Archive for October, 2013

At … “the bottom of the barrel” ?

Monday, October 28th, 2013

» As Ye Sow, So Shall Ye Reap

by Paul Craig Roberts

The year 2014 could be shaping up as the year that the chickens come home to roost.

Americans, even well-informed ones, don’t know all of the mistakes made by neoconized and corrupted Washington in the past two decades. However, enough is known to see that the US has lost economic and political power, and that the loss is irreversible.

The economic cost of this loss will be born by what remains of the middle class and the increasingly poverty-stricken lower class. The one percent will have offshore gold holdings and large sums of money in foreign currencies and other foreign assets to see them through.

In the political arena, the collapse of the Soviet Union presented Washington with the grand opportunity to reallocate the Pentagon budget to other uses. Part of the reduction could have been returned to taxpayers for their own use. Another part could have been used to improve worn out infrastructure. And another part could have been used to repair and improve the social safety net, thus insuring domestic tranquility. A final, but perhaps most important part, could have been used to begin repaying the Treasury IOUs in the Social Security Trust Fund from which Washington has borrowed and spent $2 trillion, leaving non-marketable IOUs in the place of the Social Security payroll tax revenues that Washington raided in order to fund its wars and current operations.

Instead, influenced by neoconservative warmongers who advocated America using its “sole superpower” status to establish hegemony over the world, Washington let hubris and arrogance run away with it. The consequence was that Washington destroyed its soft power with lies and war crimes, only to find that its military power was insufficient to support its occupation of Iraq, its conquest of Afghanistan, and its financial imperialism.

Now seen universally as a lawless warmonger and a nuisance, Washington’s soft power has been squandered. With its influence on the wane, Washington has become more of a bully. In response, the rest of the world is isolating Washington.

The prime minister of India, Manmohan Singh, recently declared China and Russia to be India’s “most important partners” with whom India shares “common strategic interests.” Prime Minister Singh said: “ India and Russia have always had a convergence of views on global and regional issues, and we value Russia’s perspective on international developments of mutual interest.”

India joined China in expressing concerns about the Federal Reserve’s practice of printing money in order to cover Washington’s vast red ink. The BRICS (Brazil, Russia, India, China, South Africa) are taking steps to create their own method of settling trade accounts in order to protect themselves from the looming dollar implosion,

China has forcefully called for a “de-Americanized world.” After watching the “superpower” offshore a large part of its GDP to China and then add to the diminished tax base the burden of $6 trillion in wars that brought no booty and served no US interest, China has concluded that American power is spent. The London Telegraph thinks “it is only a matter of time before the renminbi replaces the dollar as the primary currency for trading commodities and resources.”

The Obama regime attempted to attack Syria based on the sort of lies that the Bush regime used to invade Iraq, only to be slapped down by the British Parliament and Russian government. This rebuke was followed by the childishness of the government shutdown and threat of default. Consequently, the Washington morons have lost their monopoly on economic and political leadership. A few days ago the British government announced a historic agreement that permits British investors direct access to China’s markets and allows Chinese banks to expand their operations in Great Britain.

In Australia, the US dollar will no longer be used as the currency in which to settle the Australian trade accounts with China. Instead of dollars, trade will be settled in the Chinese currency.

Washington served as cheerleader, as did most economists and libertarians, while US corporations, greedy for short-term profits and executive bonuses, offshored US industry and manufacturing, calling it free trade. The obvious and predicted result is that China’s demand for resources needed to fuel its industrial and manufacturing power now dominates markets. This means that the US dollar is being displaced as world currency. The only market that America dominates is the market for financial fraud.

When industrial, manufacturing, and tradeable professional service jobs are offshored, they take US GDP and tax base with them. The foreign country gets the benefit of the relocated economic activity. Due to the revenues lost from jobs offshoring, there is a large gap between federal revenues and federal expenditures. As Washington’s irresponsible behavior has raised so many doubts about the dollar’s value and the government’s commitment to stand behind its massive debt, foreign countries with trade surpluses with the US are less and less willing to recycle those surpluses into the purchase of US Treasury debt.

Today the two largest holders of US Treasury debt are not investors or even foreign central banks. The two largest holders are the Federal Reserve and the Social Security Trust Fund.

As for those $6 trillion wars, that’s to pay for national defense to protect us from women, children, and village elders in far away countries devoid of air forces and navies, and to provide those recycled taxpayer monies from the military/security complex that find their way into political contributions.

The Wall Street gangsters sighed for relief over the last minute debt ceiling agreement. This shows how short-term Wall Street’s outlook is. All the October agreement did was to push off the crisis to January and February. The “debt ceiling agreement” did not produce a new debt ceiling that would last beyond February, and it did not resolve the large difference between federal revenues and expenditures. In other words, the can was again kicked down the road. A repeat of the October fiasco won’t play well.

Obamacare is causing the premiums on private insurance polices to rise substantially, almost doubling in some situations unless people move to the uncertain exchanges, and Obamacare’s raid on Medicare payroll tax revenues has resulted in a cut in Medicare payments to health care providers. The result is a further reduction in consumer discretionary income and a further drop in the economy.

This in turn means a larger federal budget deficit and the need for the Federal Reserve to purchase more debt.

Another reason the Federal Reserve is faced with increasing, not tapering, quantitative easing (money printing) is the decline in foreign purchases of US Treasury bills, notes, and bonds. As the instruments pay interest that is less than the rate of inflation, holding Treasury debt makes no sense when the dollar’s value and the potential of default are open questions.

According to reports, not only are foreign governments, such as China, ceasing to buy US Treasury debt, China has started to sell off its holdings, substituting gold in the place of US Treasury debt.

This means that the bonds must be purchased by the Fed or interest rates will rise as the increased supply of bonds on the market drives down bond prices. The only way the Fed can purchase a larger supply of bonds is by printing more money, that is, by more quantitative easing.

With the world moving away from using the dollar to settle international accounts, as the Fed prints more dollars the rate at which foreign holders of dollar assets sell off their holdings will rise.

To get out of dollars requires that the dollar proceeds from selling Treasuries, US stocks and US real estate be sold in the currency markets. The selling of dollars drives down the exchange value of the US dollar and results in rising US inflation. The Fed can print money with which to purchase Treasury debt, but it cannot print foreign currencies with which to purchase dollars.

The decline in the dollar’s exchange value and the domestic inflation that results will force the Fed to stop printing. What then covers the gap between revenues and expenditures? The likely answer is private pensions and any other asset that Washington can get its hands on.

Initially, private pensions will be taxed at a rate to recover the tax-free accumulation in the pensions. The second year a national emergency will be used to confiscate some share of pensions. Those relying on the pensions will find themselves with less income. Consumer spending will decline. The economy will worsen. The deficit will widen.

You can see where this is going, and there seems to be no way out. Policymakers, economists, and corporation executives are in denial about the adverse effects of offshoring, which they still, despite all the evidence, maintain is good for the economy. So nothing will be done about offshoring. Republicans will blame the budget deficit on welfare and entitlements, and if those are cut consumer spending will decline further, widening the budget deficit. Inflation will rise as incomes fall, and social cohesion will break down.

Now you know why Homeland Security purchased 1.6 billion rounds of ammunition, enough ammunition to fight the Iraq war for 12 years, has its own para-military force and 2,700 tanks. If you think the “terrorist threat” in America warrants a domestic armed force of this size, you are out of your mind. This force has been assembled to deal with starving and homeless people in the streets of America.

September employment report: According to the Bureau of Labor Statistics (BLS), September brought 148,000 new jobs, enough to keep up with population growth but not reduce the unemployment rate. Moreover, John Williams (shadowstats.com) says that one-third of these jobs, or 50,000 per month on average, are phantom jobs produced by the birth-death model that during difficult economic times overestimates the number of new jobs from business startups and underestimates job losses from business failures.

The BLS reports that 22,000 of September’s jobs were new hires by state governments, which seems odd in view of the ongoing state budgetary difficulties.

In the private sector, wholesale and retail trade produced 36,900 new jobs, which seems odd in light of the absence of growth in real median family income and real retail sales.

Transportation and warehousing produced 23,400 new jobs, concentrated in transit and ground passenger transportation. This also seems odd unless the price of gasoline and pinched budgets are forcing people onto public transportation.

Professional and business services accounted for 32,000 jobs of which 63% are temporary help jobs.

So here you have the job picture that the presstitutes, hyping “the jobs gain,” don’t tell you. The scary part of the September job report is that the usual standby, the category of waitresses and bartenders, which has accounted for a large part of every reported jobs gain since I began reporting the monthly statistics, shows job loss. Seven thousand one hundred waitresses and bartenders lost their jobs in September. If this figure is not a fluke, it is bad news. It signals that fewer Americans can afford to eat and drink out.

The unemployment rate that is reported is the rate that does not count as unemployed discouraged workers who are unable to find jobs and cease to look. This favored rate, the darling of the regime in power, the presstitutes, and Wall Street, also is not adjusted for the category of “involuntary part-time workers,” those whose hours have been cut back or because they are unable to find a full-time job. Obamacare, as is widely reported, is causing employers to shift their work forces from full time to part time in order to avoid costs associated with Obamacare. The BLS places the number of involuntary part-time workers at 7,900,000.

The announced 7.2% unemployment rate is a meaningless number. The rate can decline for no other reason than people unable to find jobs drop out of the work force. You are not counted in the work force if you are discouraged about finding a job and no longer look for a job.

The phenomena of discouraged workers shows up in the measure of the labor force participation rate, which has declined in the 21st century. The opportunities for American labor are so restricted that a rising percentage of the working age population have given up looking for jobs.

Yet, the Obama regime, the Wall Street gangsters, and the pressitute media tell us how much better the economic situation is becoming as more small businesses close, as memberships decline in golf clubs, as more university graduates return home to live with their parents, who are drawing down their savings to live, as Fed Chairman Bernanke has made it impossible for them to live on interest payments on their savings.

According to the US census bureau, real median household income in 2012 was $51,017, down 9% from $56,080 in 1999, 13 years ago. In contrast, annual compensation in 2012 for US CEOs broke all records. Two CEOs were paid more than $1 billion, and the worst paid among the top ten took home $100 million. When the presstitutes speak of economic recovery, they mean recovery for the one percent.

America is in the toilet, and the rest of the world knows it. But the neocons who rule in Washington and their Israeli ally are determined that Washington start yet more wars to create lebensraum for Israel.

Early in the 21st century the liberal Democrat Senator from New York, Chuck Schumer, and I coauthored an article in the New York Times about the adverse effects on the US economy of jobs offshoring. The article caused a sensation. The Brookings Institution in Washington quickly convened a conference which was covered by C-SPAN. C-SPAN rebroadcast the conference several times. During the conference I said that if jobs offshoring continued, the US would be a third world economy in 20 years.

Wall Street quickly shut up Senator Schumer, but I am sticking by my forecast. Indeed, I think we are already there.

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About Dr. Paul Craig Roberts

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

“… it is their right, it is their duty, to thow off such … “

Wednesday, October 16th, 2013

October 14, 2013


Russia Responds To Obama

Terror Nuke

With ABM Missile Killer


A chilling Ministry of Defense (MoD) report circulating in the

Kremlin today confirms that the Strategic Missile Forces (SMF)

sudden, unannounced and successful firing of a Topol ballistic

missile into the Sary-Shagan testing ground in Kazakhstan last

Thursday (10 October) was in “direct response” to President

Barack Obama’s attempt to destroy Charleston, South Carolina

in what military intelligence analysts state was an attempted

“ false flag attack.”

As we had previously reported, the SMF notified both President Putin

and the General Staff this past Tuesday (8 October) that at 01:58:11

GMT/UTC an atomic device was exploded in the seabed off the US

Atlantic Ocean, barely 1,000 km (620 miles) from Charleston, causing

a 4.5 magnitude earthquake measurement that SMF experts equate to

being a 1-kiloton yield, which is equal to the power of 1,000 tons of TNT.

Previous warnings about Obama’s planned false flag attack on Charleston

had been leaked to numerous global organizations including Infowars.com,

France’s highly respected dedefensa.org, and caused US Senator Lindsey

Graham to cryptically tell his fellow South Carolinians that they were

under the threat of a “terrorist nuclear attack.”

Obama’s response to his militaries failure to carry out this false flag attack, the Main Intelligence Directorate (GRU) reported, was his immediate dismissal of Americans top two military nuclear commanders, US Navy Vice Admiral Tim Giardina and US Air Force Major General Michael Carey, and two of the US Marines top officers, Major General Charles M. Gurganus and Major General Gregg A. Sturdevant.

The US military in kind, this new MoD report says, responded to Obama’s attack against their officers by rapidly returning to America over 500 troops belonging to their elite Special Purpose Marine Air-Ground Task Force (SP-MAGTF) that had been stationed in Libya, Italy, Spain and Africa.

The American military does, indeed, now fear Obama, this report continues, as he has become the first President in US history to fire 9 of his most senior officers who refuse to go along with his “master plan” for radically changing his country into a socialist dictatorship.

Even worse, and as we had previously reported on in our reports Pentagon Warns To Expect “Radical” Change In US Government Soon and Obama Retreats To Secret Bunker As “Big Event” Draws Near, the plan Obama envisioned to the American people on 2 July 2008 when as a Presidential candidate he called for the creation and establishment of a “Civilian National Security Force” he promised would be “just as powerful, just as strong, just as well funded as the US Military” has now been achieved, this MoD report says.

To how well equipped Obama’s new National Security Force is we can read as reported by Forbes magazine in their article titled 1.6 Billion Rounds Of Ammo For Homeland Security? It’s Time For A National Conversation, and which, in part, says:

“The Denver Post, on February 15th, ran an Associated Press article entitled Homeland Security aims to buy 1.6b rounds of ammo, so far to little notice.  It confirmed that the Department of Homeland Security has issued an open purchase order for 1.6 billion rounds of ammunition.

As reported elsewhere, some of this purchase order is for hollow-point rounds, forbidden by international law for use in war, along with a frightening amount specialized for snipers. Also reported elsewhere, at the height of the Iraq War the Army was expending less than 6 million rounds a month.  Therefore 1.6 billion rounds would be enough to sustain a hot war for 20+ years.  In America.

Add to this perplexing outré purchase of ammo, DHS now is showing off its acquisition of heavily armored personnel carriers, repatriated from the Iraqi and Afghani theaters of operation.  As observed by “paramilblogger” Ken Jorgustin last September:

“The Department of Homeland Security is apparently taking delivery (apparently through the  Marine Corps Systems Command, Quantico VA, via the manufacturer – Navistar Defense LLC) of an undetermined number of the recently retrofitted 2,717 ‘Mine Resistant Protected’ MaxxPro MRAP vehicles for service on the streets of the United States.”

Regardless of the exact number of MRAP’s being delivered to DHS (and evidently some to POLICE via DHS, as has been observed), why would they need such over-the-top vehicles on U.S. streets to withstand IEDs, mine blasts, and 50 caliber hits to bullet-proof glass? In a war zone… yes, definitely. Let’s protect our men and women. On the streets of America… ?”

To vast majority of the American people themselves not knowing of Obama’s “master plan” to destroy their country, this report says, has been fully explained in the grim report issued last week by the Committee to Protect Journalists (CPJ) that concluded that far from fulfilling his campaign promise to improve transparency, the President has instead presided over an unprecedented campaign to contain leaks and to control media coverage of government operations.

Even the popular American science fiction writer Orson Scott Card has now begun openly warning against Obama by stating:

“Obama is, by character and preference, a dictator. He hates the very idea of compromise; he demonizes his critics and despises even his own toadies in the liberal press. He circumvented Congress as soon as he got into office by appointing “czars” who didn’t need Senate approval. His own party hasn’t passed a budget ever in the Senate.

In other words, Obama already acts as if the Constitution were just for show. Like Augustus, he pretends to govern within its framework, but in fact he treats it with contempt.”

And, surprisingly, one of America’s top radio broadcasters, Michael Savage, has now joined the global call for the Obama regime to account for the other missing nuclear weapons planned to be used in the upcoming false flag event meant to throw the United States into civil war.

As to Russia’s response to this growing American crisis, this MoD report concludes, last weeks SMF firing of the Topol ICBM that can pierce any anti-ballistic missile (ABM) system, combined with the nuclear submarines now patrolling the Southern Seas for the first time since the Soviet era, have now given the Obama regime a “stark warning” that should their civil war begin to impact the Motherland, a “strong and immediate” response should very well be expected.

++++++

October 14, 2013 © EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.

Now …or . . . then … or . . . when ?

Tuesday, October 1st, 2013

Ron Paul Straight Talk:  Small Government Conservatives, Anti-War Liberals Should Join Forces

To Combat Warfare And Welfare Spending

September 30, 2013 by Ron Paul

As I write this, it appears that the federal government is about to shut down because the House and Senate cannot agree on whether to add language defunding or delaying Obamacare to the “Continuing Resolution”. Despite all the hand-wringing heard in DC, a short-term government shut down (which doesn’t actually shut down the government) will not cause the country to collapse.

And the American people would benefit if Obamacare was defeated or even delayed.

Obamacare saddles the American health care system with new spending and mandates which will raise the price and lower the quality of health care. Denying funds to this program may give Congress time to replace this bill with free-market reforms that put patients and physicians back in charge of health care. Defunding the bill before it becomes implemented can spare the American people from falling under the worst effects of this law.

As heartened as we should be by the fight against Obamacare, we should be equally disheartened by the fact that so few in DC are talking about making real cuts in federal spending. Even fewer are talking about reductions in the most logical place to reduce spending: the military-industrial complex. The US military budget constitutes almost 50 percent of the total worldwide military spending. Yet to listen to some in Congress, one would think that America was one canceled multi-million dollar helicopter contract away from being left totally defenseless.

What makes this military spending impossible to justify is that is does not benefit the American people. Instead, by fomenting resentment and hatred among the world population, our costly interventionist foreign policy makes our people less safe. Thus, reducing spending on militarism would not only help balance the budget, but would enhance our security.

Yet both the House and the Senate continuing resolutions not only fail to reduce military spending, they actually authorize $20 billion more in military spending than authorized by the “sequestration” created by the 2011 Budget Control Act. Most of the supposedly “draconian” sequestration cuts are not even cuts; instead, they are “reductions in the planed rate of spending.” This is where Congress increases spending but by less than originally planned—and yet they claim to cut spending.

Under sequestration, military spending increases by 18 percent instead of by 20 percent over the next ten years. Yet some so-called conservatives are so opposed to these phony cuts in military spending that they would support increased taxes and increased welfare “military” spending. This “grand bargain” would benefit the DC political class and the special interests, but it would be a disaster for the American people.

Instead of grand bargains of increased spending and taxes, those of us who support limited government and free markets should form a coalition with antiwar liberals to reduce spending on both the military industrial complex and domestic welfare programs. Instead of raising taxes on “the rich” we should also work to reduce all corporate subsidies. This “grand bargain” would truly be a win-win for the American people.

Sadly, even if a congressional coalition to cut both warfare and welfare spending was formed, it would be unlikely to carry the day as long as the Federal Reserve is willing to enable Congress’s debt addiction by monetizing the debt. But this cannot last forever. At some point the Fed’s policies will result in hyper-inflation and an economic crisis that will force Congress to reduce spending. Hopefully, the growing number of Americans who are awaking to the dangers of our current path can convince Congress to reduce overseas militarism and begin an orderly drawdown of the welfare state before this crisis occurs.

Former Representative Ron Paul has maintained a steadfast consistency in speaking out against executive power, taxation and war. Unlike many of his Republican peers, as a Congressman, he voted against the Patriot Act and against the Iraq war. He has voted against farm subsidies and regulating the Internet, which is in line with his interest in reducing government spending and the role of the Federal government. Paul has also expressed his opposition to the war on drugs, saying that the government’s efforts have actually been a war on doctors. These and other controversial opinions have often caused tension with his Republican counterparts. Paul is the author of many books, including End The Fed, Liberty Defined and Revolution: A Manifesto. Along with a lengthy political career as a Congressman and Presidential candidate, Paul has also worked as a respected obstetrician in his home State of Texas. Since his retirement from Congress in 2013, Paul has stayed busy encouraging Americans to fight for liberty by founding the Ron Paul Institute for Peace and Prosperity and his own news channel. Email this author.

Ron Paul Straight Talk: The American Public Is Tired Of Warmongers

Will the history books record these past couple of weeks as the point when the tide finally turned against our interventionist foreign policy? We began September with the Obama Administration on the verge of launching Tomahawk missiles at Syria. The missiles were needed, the Administration claimed, to punish the Syrian government for using poison gas […]

Ron Paul: Will Congress Endorse Obama’s War Plans? Does it Matter?

President Obama announced this weekend that he has decided to use military force against Syria and would seek authorization from Congress when it returned from its August break. Every Member ought to vote against this reckless and immoral use of the US military. But even if every single Member and Senator votes for another war, it will not make this terrible idea any better because some sort of nod is given to the Constitution along the way.

Ron Paul: Why Won’t They Tell Us the Truth About NSA Spying?

This article, written by Former Congressman Ron Paul, first appeared at the-free-foundation.org, the temporary home for his weekly column until his personal web page is up and running. In 2001, the Patriot Act opened the door to US government monitoring of Americans without a warrant. It was unconstitutional, but most in Congress over my strong [[…]