The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Tuesday, December 31, 2013

Oh Money Tree, Oh Money Tree, how well-Fed are Bank Branches.

 Driving to Extinction.

 An intensely speculative equities market can look to another 10 months and, presumably, another $500bn of QE:

"The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland; a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank... sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world." - Carroll Quigley, member of the Council on Foreign Relations
With the largest prison population and incarceration rate in the World, the US is facing severe overcrowding and more spending on prisons than education. 

The 1970s were framed by two “oil shocks”: the OPEC embargo of 1973 and the U.S. boycott of Iranian oil after the mullahs swept to power in 1979. During the decade, the price of a barrel of oil rose from $3 to $31. Productivity, which had been rising at nearly a 3 percent annual clip in the postwar decades, slowed to a 1 percent yearly increase during the 1970s. Europe and Japan had recovered from the devastation of World War II, and Japanese imports, chiefly autos, doubled during the late ’60s. In 1971, the U.S. experienced its first trade deficit since the late 1800s. Starting in 1976, it has run a trade deficit every year. 

Yet note that there is no such talk of a George Bush "Oil Shock" even though the same phenomenon - a 10-fold increase in the price of oil - shocked  the global economy so intensely it has yet to, nor will it ever,  recover.

 The key point is that both the belief that the metal was sitting there and the belief that the metal was no longer sitting there gave stability and yet took stability away. Fiat money is thereby irrelevant when trust in the money is altered or destroyed. Finally, fiat money has very little intrinsic worth and cost of producing it is very low relative to its face value.

That last is a truly interesting statement when one considers the value of zinc in a nickel. The cost of producing a nickel in coin far exceeds the cost of producing a one hundred dollar bill such that one must wonder how many of the 2000 nickels represented by the hundred dollar bill would be enough to cover the cost of mining and minting, transporting and accounting for one of the nickels that the paper C-note supposedly represents. However the monetary aggregate is so huge compared to the percentage that is actually represented by any physical entity, paper or metal, that the cost of seigniorage is paid for by the Treasury, ie. the US taxpayer, (not the banks).

Also paid for by the US  taxpayer is the new method of alleviating the necessity of shipping pallet-loads of dollar bills around the globe, such as the GW Bush regime did, in order to, like any criminal enterprise, reward those it held in favor without any accountability to the US taxpayer who was paying for those pallet-loads of disappearing billions. Instead, using the Internet, also a technology developed and paid for by the US taxpayer, for which they received no return on investment, Corporations used it to enable the easy transfer of funds and jobs to other countries. This technology was given away to the rest of the world, much of it Communistic in nature, for at the same time that we were intent on destroying the USSR and bringing its economy to its knees, we moved to 'open' China to Western Investment, as their fearless leaders were far more pliant, and more willing to enslave its own people to meet, not the necessities of the US public, but merely its most fanciful whims.

But what this cynical method of disencumbering sovereign Nations of their sovereignty does, is it leaves no one to govern Corporations, as the collapsing buildings in Bangladesh so vividly demonstrated, and yet whose message we completely ignore, as though it were a Phantom. It means that there is no way to halt the decline in wages that is happening all over the globe, but mostly in the demand-driven economies of the OECD, whose energy paradigm falls apart when energy prices for transport increase 10-fold. Whether it is hidden by government subsidies or the now-accepted practice of deceptive accounting methods, the absorption of an increase of cost of doing business of this magnitude does not occur without severe dislocations in all kinds of previously contracted business arrangements. The fact that businesses have moved production to, " where wages are very low and the pressure to work faster and cheaper has spawned familiar problems: unsafe buildings, substandard work conditions and repeated wage and labor violations. Consumers know little about these factories, even as global brands promise that their clothes are made in safe environments" for example, was done under a cheap transportation paradigm that is now proving untenable. Yet the fact that Corporations have moved such factories out of the market where its customers exist means that the normal feedback mechanisms of normal Classical Economics are no longer functioning as they should, because they were purposely severed. 

Even as economists, such as Krugman and Summers wring their hands over Keynesian dysfunctionality, they fail to notice that the reason for that is that the dollar is now designed to serve not its own economy, but those of other countries, being, as it is, the reserve currency of the world. So just as the first Action that the first Bush Presidency took, declaring a "Peace Dividend" and closing hundreds of bases in the US, wrecking local economies, when his son then reopened them, but located in other countries, the economic boon moved to that local economy and failed to turn that deficit spending, of which all military spending is, it being stimulative in nature, and almost always made for exactly that reason with a mere veneer of justification using the usual phrases as 'military preparedness', 'updating technology', and 'fighting Communism', that last never more so than now as our entire nuclear facility is necessitated on the threat from one country only, Russia, the nation that has been decommissioning its nuclear arsenal and selling the uranium for a nuclear power of a more electrifying sort, into a stimulative boost to our own economy.

And this is the template upon which the US economic system is run. Most of the deficit spending that occurs doesn't stay in the National economy even though it is this Nation's taxpayers from which that deficit spending is wrought, even as its stimulative effect goes to other Nations' citizens.  When the US was a mighty center of manufacturing, the logic behind such an arrangement was that by stimulating other countries' economies, enriching their citizens, they will become customers for our goods, in turn setting our factories humming to supply Their needs. But the US has had a trade deficit for decades now, and exported its factories to other lands, so deficit spending has instead turned into a constant drain, because, somehow, people don't want to import other countries' nationals simply to do their nails. Well, that's not completely true, but no one wishes them to be uppity, demanding US citizens, who actually expect, not only pay, but a porcelain toilet! Can you imagine? Who'd bother when compliant kowtowing Asians can be had for practically nothing, and are happy to shit squatting over a stinking, fly-infested hole in the ground?

As the 100'th Anniversary of the start of WW1 looms ahead, we have the same disconnect now as they did then as to how the very heart of our society, its political economy, functions. Even, maybe especially, since they'd have to unlearn that which they know, those who lobbied, bribed, and wrote the legislation for the changes that wrested labor's power from it using all the tools that a constantly flowing energy supply and a government sponsored internet and complete computerization of the economy has put at its disposal, have no idea how it will respond to changing circumstances. Because by destroying what was in order to create a never-ending flow of funds to the already rich and infamous, what's been wrought is not what ever has been, so all that we knew is now obsolete. Like a tradesman such as a letter-setter on a printing press, once the modernization of your skill has been  effected, all your hard-earned knowledge and skill is obsolete, that is what the World's Financiers have, unwittingly, done to themselves. Because the infrastructure they think they know how to contain and tweak, and cause to work they way THEY want it to work, to promote their own self interest over and above the very country in which they reside, has been so successful that the day of Warring Corporations, or Corporations, having monopolized the means of production, refusing to meet the needs of one set of a pair of Warring Nations, having become unanswerable to anyone, is upon us. This is easily imagined once one realizes that, for example, the enormous percentage of REE's (rare earth elements) that are controlled by one country. And one thing that hasn't changed since man first learned how to wield power over his fellow man, is that absolute power rules absolutely, and arbitrarily. Gone is justice, gone is equality, and fraternity is simply weakness.

A World has ended and another one waits to be born. Many think they know the shape it will take, others still mourn what is already gone, thereby ignoring the needs of the newborn while it is instead nurtured by those who wish them, and perhaps it, harm. It is time to stop grieving and move on. To what, we know not; but first, we have to admit that what was can not be, not because it is right or wrong, right or left Liberal or Conservative, but because it is dead.

Tuesday, December 17, 2013

Who are The WatcherS now, Den?

Mole on a male mole model.

In Stephen Alford's book about the secret history of the Reign of Elizabeth 1, "The Watchers", he depicts the amount of secrecy and the reasons for it during the rule of this most interesting of Monarchs. Since she was a Protestant in what had reverted to a Catholic England, everyone from the Pope to the King of Spain used the Divine right of Kings to justify the funding of conspiracies and nefarious plots to murder her and put her Catholic cousin on the throne in her stead. In light of the statements being made recently by the current pontiff, wherein he condemns the trickle down theory of economics, it's interesting to see the state in which the vast majority of Euroland was living when they were under the rigorous, heartless foot of Mother Church.

One of the conspirators who was sent by the Pope was a priest named Snowden, a "subtle, intelligent and self-assured man" who volunteered "in the cause of his native country against its enemies" ie its citizens and their rightful monarch, Queen Elizabeth. But Catholics didn't feel that QE1 had any business leading their country as they deemed her a bastard, an apostate and a heretic; an usurper, and upstart for daring to declare that a woman... a WOMAN ... My God! ... could be the lord's representative on earth.

Now, when I took the final courses I needed at Harvard for my BA, after many years absence, two of them were in American History, from a Prof Allison, who, when I drew parallels to the current state of affairs, was quite adamant that none existed and I should not make such forced comparisons. I totally disagreed with that, but since he was the teacher, and I wanted an 'A', I demured, got my 'A', and now, upon reading about Snowden, am back to my old tricks, having learned nothing. Well, that's not true, I learned a lot, but not drawing parallels wasn't one of them, and the temptation to do so by using the name-freakism of a Snowden spy in Elizabethan England to draw comparisons with our own fugitive Snowden spy while we are engaging in our own brand, methodology and justification for global spying and torture was simply too enticing to let it slip by.

Of course, it seems to need no justification that if a modern world with all the modern weapons of warfare and surveillance can declare a Terror Watch over the entire planet with no end of it ...ever ... all caused by a small cadre of Saudi-funded terrorists, then the justification of QE1 for having a spy network when her weak kingdom was under the attack of the entire European continent, the entire Catholic continent, I might add, to those who think the pope's newly-found humanity in any way reflects the policy of the Church's two-millennium-old bureaucracy, then it seems a slam dunk that QE1 would have practically been criminally negligent if she had NOT had spies, intelligencers, and, as reflected in the title, "Watchers", keeping their eyes and ears open to the innumerable plots being woven in order to bring an end to her reign.

The most vehement and notorious of these would-be assassins and monarch murderers was Cardinal William Allen, who was the one who sent Father Snowden, a priest, over to England to help "engineer plots against Queen Elizabeth". But like our Snowden he was caught before he even landed, and found guilty of high treason, which Edward Snowden has, all but formally, already been found guilty of by the current US administration.

Writing of the captured Snowden, Alford describes a man who,

"Wrote with great self-confidence", whose statement was "Certainly the work of an intelligent, experienced and subtle man: too self confident, perhaps, as he offered, without hesitation to give Queen Elizabeth's government information on plots, treasons, and conspiracies. But he maintained a conscientious scruple as a Catholic. Snowden distinguished absolutely between Catholics whose loyalty to the queen held firm and those who planned for England's invasion by the foreign power of Spain, explaining that he would betray only Elizabeth's enemies, not the Catholic faith."

Although to a modern reader it may seem easy to make this distinction, to a medieval worshiper, separating loyalty to the monarch from loyalty to their religion was not such a simple matter, one being intrinsically connected to the other. But the parallel between the Snowdens that I see is that our Snowden's loyalty is toward the country, not the government, and this is a subtle difference that in modern times is just as hard to separate as the one between Church and State was in those times.

A good example of this is illustrated by the phrase "American Values", by which it is always assumed one means those of the US. But the values of the United States are remarkably different from those of other countries in America, just as much as those values can differ from those of citizens who claim to love their country but hate its government. In order to give the citizens of Iraq the ability to do both, the Bush administration invaded their country to depose a dictator and allow the Iraqi's the luxury of not having to hate their government anymore, but love their country AND their government. So the concept's not one that is foreign to the United States, even as it condemns Snowden for daring to take the actions he did, much less horrible and murderous actions than invading a country, even though it's obvious he did so because he believed his loyalty to his country overrode and is tantamount to his loyalty to his government.

Just as QE's Snowden went against his ruler, the Pope, in favor of his ruler, QE1, Edward Snowden felt that his loyalty belongs to, not his ruler, the US NSA, who was providing him with a paycheck, but to his true ruler, the people for whom he supposedly works and whose tax dollars enable the NSA to issue that paycheck (well supposedly. It's becoming more and more obvious by the day that the Pentagon and its long list of fellow "defenders of freedom" are quite capable and have indeed for some time now, simply minted their own currency). The spied-upon citizens (without their knowledge, although how they didn't know is still a mystery to me) have no one in government that is an elected official to watch over their interests, protect their privacy, or even address their concerns in any but a nominal way. It is only someone like Snowden, operating from inside the beast, that the citizens in a Democracy have any idea of the illegal machinations of its elected and paid officials. Just as we have no idea what goes on inside Corporations unless someone from inside spills the beans, in which case they will lose their job, which then means their access to heatlhcare and soon enough their home.

John Snowden's Vatican is Edward Snowden's Secret government. Both of them perform the same function of spying on the citizens it's supposed to protect and serve, one ecclesiastically, the other materialistically. The Vatican was a corrupt and evil influence in the 1500's, as the US government is now. The difference is that there's no one who can stand up to the US, so only lone moles working on the inside can give us any inkling of what's really being done in our name so that the next time we're attacked by outsiders, we'll have at least some idea of why they felt compelled to do so. On the contrary, most US citizens to this day have no idea that the Saudi Nationals who conspired to wreak destruction on the US and hopefully bring its economic system to its knees, were all funded initially with CIA dollars, funneled through their operative, Osama Bin Laden, in order to join up with the Mujaheddin in their attacks against Russian infidels in Afghanistan. Whipped up into a religious frenzy in order to carry out the US proxy war against godless communism, Saudi's, infused with Wahhabi fundamentalism, (in much the same way that American Fundamentalist Christians were  propagandized to believe the Founding Fathers didn't want the separation of Church and State, and so were sent on the warpath against Moral reprobates, unlike themselves who were a "Moral Majority", until time after time it was demonstrated that the only morality they had was just worn on their sleeve) having brought down their original target,  successfully ousting the Russians from Afghanistan, turned to the next logical one, the infidel USA.

Which illustrates two fundamentals of good governance. That the separation of Church and State is in fact a goal that should never be abandoned, especially if religion continues to insist on its monopoly of communication with the non-existent Supernatural world that declares it knows what it teaches is absurd, but that you have to simply "believe", ie "have Faith". That is no basis for governance. What it is basis for is Totalitarianism, as you can easily see by listening to any religious proselytizer.

The other is that if you fund secret organisations to send spies all over the globe and to listen in on all communications anywhere in the world, that very technology will eventually  be used to spy on you, too. Which is why the founding fathers made the power of the central government the weakest. The power now centered in Washington has been usurped from the States, most of it since the Second World War, but starting with the first WW, as that is when the roots of the great depression were taking hold, while the States' power was usurped from the Cities and local government, where it belongs. The further from the people that power resides, the more easily corrupted and the more centralized, by necessity, it becomes, and therefore, the less answerable to anyone for its actions. Consequently Washington has increased the number of people it has rule over by a factor of 10, from 30 million to 300 million, yet there is still but one president making decision for 10 times as many people. To do that requires a certain amount of Totalitarianism of its own. And that is what Snowden felt compelled to show us. We should do better to let him know that he didn't do so, knowingly destroying his own life in the process, in vain.

Friday, December 6, 2013

How The Bit Coin Holds up vs. the Byte Dollar.

You only get a guy to Burst Your Bubble.

In 2005, as the housing market peaked and the Greedsphan-Bernanke nexus declared that housing prices only go up and there is no such thing as a national housing market, even as they created a national mortgage market via shadow banking's unregulated free-for-all of asset-stripping the value of the American public's real estate, Ned Shchmidt coined the phrase 'moneyization' for the global financial phenomenon he saw occurring wherein certain individuals and businesses, the ones ignoring the siren song of Fed monetary manipulation and dollar debasement in the guise of securitization of risk into CDO's destined to plummet in value, given the wrongheadedness of the algorithms on which they were based, moved their funds to monies in which they had the highest confidence.

But as Greedsphan denied that a Real Estate bubbles existed then, he is adamant, when talking of bitcoins, that one exists now, declaring that "Bitcoin prices are unsustainably high, and that the virtual money isn't currency", despite the fact that, since it's used as currency and accepted by certain businesses and even countries as a mean of exchange, it is used as one. As though, just as he felt that simply denying a bubble exists it didn't, he now feels that simply by his denying that bitcoin is currency, it isn't: "“It’s a bubble,” Greenspan, 87, said today in a Bloomberg Television interview from Washington. “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.”

Yet the entire structure of floating exchange rates over which Greedsphan presided for "The Great Moderation", during which he bailed out Wall St.'s most egregious criminals, assumes exactly that. No fiat currency has an intrinsic value, but is instead only worth what the Market, using various matrices, such as the GNP of the underlying economy and it's relative value as compared to the world's other economies, assigns it.

If the dollar really had intrinsic value, he wouldn't have to deride bitcoin. But because of moneyization, it's obvious that confidence in the Dollar is plummeting as a means of exchange and that individuals and businesses around the globe are so concerned about its lack of intrinsic value, which its overt manipulation by the Fed for more than five years screams out from the rooftops, (subtlety not being Bernanke's forte), they have bid the price of Bitcoin up to such astronomical levels that this wrinkle-faced troglodyte crawled out of his silk-lined casket, was propped up and  his Chatty-Kathy string pulled, to assure us that it's the dollar, not Bitcoin, that has intrinsic value.

But the more he "talks up the dollar", the more the virtual currency appears to be a better, less obviously nationalistically-manipulated, means of exchange. Because, the more they talk of the "printing press" of "Helicopter Ben", the more obvious it is that the Dollar, as much as Bitcoin, is itself a virtual currency, existing only as electrons, none of its trillions upon trillions of value physically existing anywhere but in cyberspace, it's value unabashedly manipulated by an out-of-control Central Bank that simply makes up its own laws as it goes along, something Bitcoin, at least as advertised, is immune to.

Because just as MBS's created a National, and in fact, an international, market for home mortgages, (and then, eventually, virtually anything else they could contrive to throw in with them), Globalization, and its doppleganger, dollar hegemony, via its role as the world reserve currency, has left no mechanism by which to value the intrinsic value of a country's currency, because, having to accumulate dollars, countries are forced to become export platforms for products available, not to their own citizens, but to those in the US. This dynamic has been and is still being used to suppress wage demands in the US by severing the tie between the country's currency and its industrial output, while, via blatant Fed purchases that have bloated it's balance sheet to over $4trillion dollars, by purchasing MBS that even Fannie Mae won't touch and government debt that no one else will buy because, the more of it the Fed purchases, the less the interest rate reflects the amount of risk its purchasers are assuming, simultaneously elevating asset prices of both stocks and homes beyond the reach of those continually declining wages.

In an insert in the Bloomburg article is a telling question: "Is it really money if it doesn't come from the Mint?" A question, in terms of the electronic form of monies which are constantly transferred over fiber optic cables and never ever been issued by any mint, that has ever been asked before, never mind answered. The reason for that is because electronic currency, never having been minted, has no place. You can put your money into a bank, but it can then be whisked out of your account and used to build a factory on a shore a world away to take advantage of the "Freedom" to use slave-like labor force, unregulated power generation and resource despoliation to compete with the factory you work at and bring it to its knees, and then flood, via outposts of pernicious peddling, such as War-Mart, the market with those shabby goods at cheap prices.

This they refer to as Capitalism, but it is Creditism. Capitalism leaves in the hands of local markets, politicians, businesses, and workers, not an inchoate, ill-defined, all-powerful Market Force, the ability to decide just what they should invest in to make their lives more fulfilled and productive. This is the true pursuit of happiness the founding fathers referred to and that has  been systematically and deliberately destroyed. What was new in the United States' version of Capitalism was the idea that history might be rooted not in the strictures of nature or the whims of the gods, but in the mass actions of men themselves.

But when a city, a State, an entire country, can have its wherewithal simply sucked dry by the instantaneous transfer of its citizens' savings to other lands, the only freedom left is for those who effect the transfer, skimming their fees and usurious percentages into their own accounts. To those whose hands did the work and accumulated the savings, nothing is left. This is the way that the Greedsphans of the world wish the economy to function, and Bitcoin is a threat to that hegemony. If the dynamic I describe were not a reality, there would be no need for, and therefore there would be no such thing as, Bitcoins. Whether it becomes a viable currency is certainly open to doubt, as its volatility, on which the Greedsphan remarks were made, leaves it untenable for anything but the shortest of transactions. But should it fail, another idea will come forth and then another, until the current sea of turmoil, obfuscation, and periodic Maelstroms is calmed. That, however, may be some time in coming.


Tuesday, December 3, 2013

Ladies' Paradise Lost: Digesting Emile.

Here, in an excerpt from Emile Zola's novel, "The Ladies' Paradise", we are given a glimpse into the uncensored voraciousness of the Capitalist's mind. The pure greed, shining hard and bright and inviolable as a diamond forged in the fires of earth's interior, lies unapologetically for all to survey.. To this mindset, this voracious maw, we are now told all must bow down and governments must fall, as the consumer knows all. Instead of protecting their citizens, now that they are held hostage to the forces of the market, politicians instead lead them right into the paddocks to be slaughtered:

"Mouret glanced towards the drawing-room, and in a few phrases whispered in Barren Heartland's ear, as if he were confiding to him one those amorous secrets men sometimes venture to reveal when they are alone, he finished explaining the techniques of modern business. Of supreme importance, more important than the facts he had already given, was the exploitation of Woman. Everything else led up to it, the ceaseless renewal of capital, the system of piling up goods, the low prices which attracted people, the marked prices which reassured them . It was Woman the shops were competing for so fiercely, it was Woman they were continually snaring with their bargains, after dazing her with their displays. They had awoken new desires in her weak flesh; they were an immense temptation to which she inevitably yielded, succumbing in the first place to purchases for the house, then seduced via coquetry, finally consumed by desire. By increasing sales tenfold, by making luxury democratic, shops were becoming a terrible agency for spending, ravaging households, working hand in hand with the latest extravagances in fashion, growing ever more expensive. And if, in the shops, Woman was Queen, adulated and humored in her weaknesses, surrounded with attentions, she reigned there as an amorous queen whose subjects trade on her, and who pays for every whim with a drop of her own blood. Beneath the very charm of his gallantry, Mouret thus allowed the brutality of a Jew selling Woman by the pound to show through;  he was building a temple to Woman, making a legion of shop assistants burn incense before her, creating the rites of a new cult; he thought only of her, ceaselessly trying to imagine even greater enticements; and, behind her back, when he had emptied her purse and wrecked her nerves, he was full of the secret scorn of a man to whom a mistress had just been stupid enough to yield. "Get the women", he whispered to the Barren, laughing impudently as he did so, "and you'll sell the world!"

Now the Barren understood. A few sentences had sufficed, he guessed the rest, and such gallant exploitation excited him, stirred memories of his dissolute past. His eyes twinkled knowingly; he was overtaken by admiration for the inventor of this machine for devouring women. It was very clever.

"You know, they'll take their revenge."

But Mouret shrugged his shoulders in a gesture of crushing disdain. They all belonged to him, they were his property, and he belonged to none of them. When he had extracted his fortune and his pleasure from them, he would throw them on the rubbish heap for those who could still make a living out of them.He had the calculated disdain of a Southerner and a Speculator."

And to this cabal of usurers and cutthroats, our Democratically elected governments the world over have offered us up for shearing. What could possibly go wrong?

Monday, December 2, 2013

From a 'Speculator Stag' Nation to Secular Stagnation.

Capitalism's Inner Circle.

Neo-gliberalism: enriching the world's .1% while impoverishing America. With another Black Friday fast receding and we face a new barrage, this one trumpeting the arrival of  Cyber Monday, the dynamic of the world's superpower channeling its workers' salaries into Chinese worker's paychecks, via War-Mart, which acts more like a conduit or an investment bank for a regime that is headed by the largest Communist Party on the globe, still leaves the question of why the disparity between how the US overtly helped engineer the collapse of the Soviet Union by driving down the price of oil and entrapping the USSR in a war in Afghanistan, yet pours a tsunami of dollars into propping up the Chinese State and its corrupt Bureaucracy, once again intrigues me.

The impetus for reflecting on this topic is the article published regarding the new Russian submarines that are "so silent the US Navy calls them 'black holes'". You have to wonder if whether the US under president Reagan hadn't decided to jettison detente with the Soviet Union, and instead work to collapse it in order to gain access to its oil reserves, if this technological marvel, most likely using stealth technology stealthily procured, would have come to fruition.

This is just the latest of world developments that forces me to ponder just what is the neo-liberal agenda? Thanks to the Tea Party, the country's liberals have a feast of idiotic assertions and lame-brained statements fed to it to discredit the so-called Neo-Conservative's agenda, which is neither neo, nor conservative, so that it is so busy congratulating itself for their perspicuity that they fail to understand, never mind question, what the Neo-liberal agenda, with Larry Summers pretty much the poster boy, as Groveling Norquisling is for the Neo-cons (although they admittedly have deeper ranks with Karl Rove, and well, the entire Fox news staff, ready to assume the mantle) just might be.

For whereas the Neo-Cons, for all their mendacity, are now fairly forthcoming with their agenda, the Neo-liberals, the most stark statement of their intention being delivered by Larry Summers, in the prospect of transferring millions of jobs out of America, where(at that time) employers were forced to pay healthcare costs for a citizenry being made ill by industrial pollution, only stated objective, articulated best by candidate Ross Perot in the campaign against Clinton and Bush, being the enrichment of other nations' citizens so that they could then buy this country's exports, creating newer, better jobs here. That was in 1992, more than a generation ago, and there's been absolutely nothing to bear it out, because, without a representative form of government, which China has never, ever had, nor has any prospects of ever having, citizens have labor camps if they don't like working conditions and rural impoverishment if they don't like urban living. Thus, the only part of the Neo-liberal program that worked was the one warned about by candidate Perot: the great sucking sound as jobs left this economy permanently.

And now, low interest rates, or, as should be more accurately called, transferring income from savers and retirees to banks who already had so few viable candidates for loans that they'd developed an entire infrastructure, called "shadow banking", to accommodate making loans to unqualified, high credit-risk individuals and business (few remember the covenant-lite loans being foolishly indulged in by the banks pre-crisis to allow behemoths with no cash to swallow whole businesses which were healthy, asset-strip them, and spin them off)  to somehow spur consumer spending and increase employment even though it has failed in the five years since its implementation to do anything of the sort.

But to suggest that taking money out of the pockets of the country's citizens and funneling it instead into the accounts of speculators and carry-trade robots such that it permanently impoverishes the country's citizens by design, rather than by mistake, by using the same excuse GW worked so well during the Iraq War, such that staged incompetence is used to prolong the disastrous consequences of a failed action because it enriches those who are enriching you, is a concept so foreign to a naive and feckless American public, that it never even occurs to them.

However, that is the wonder of the GW regime, it is the gift that keeps on giving, because the milestone it achieved was that of separating completely and permanently the entire concept of Accountability for one's actions, a syndrome that swung through the revolving door between politics and business as easy as Abramoff's acolytes, such that now it reigns even in the realm of the business world, an eventuality for which Jon Corzine owes his continuing existence outside the walls of a prison. What it  means in politics, though, because government jobs, already having a low correlation between performance and expectation, is that now any government agency can declare certain steps must be taken in order to achieve certain objectives. Period. If it should happen that those steps lead us over a cliff to our ruination, well, we are to blame; the 
steps, having once been decided upon, being  themselves inviolable.

So as we continue to stuff mortgages at an unprecedented pace into the same MBS that now, (Pfew!) no private institution, the same ones that offer those mortgages at a cut-rate interest rate, the liability for which they then sweep right off their books and onto the back of the taxpayer via Fannie Mae, Freddie Mac and The FHA which in combination gobble up more than 90% of them, would ever consider investing in. While the same investment banks that brought the global economy to its knees charges fees that even a banker would balk at if they were paying them instead of skimming them.

So, following the head-scratching pantomime of feckless and reckless GW, Larynx Summers wonders aloud about 'secular stagnation' knowing full well that it is the Neo-Liberal agenda of enriching citizens in other countries to allow them to afford the products of American Exporters, and completely aware that the American people he represents are those newly-created people called corporations, and that those same corporations have no allegiance to the United States of America, nor any more of a sense of brotherhood with its flesh-and-blood citizens than with the cattle it slaughters for purveying cheap hamburgers.

That this is the true agenda of so-called globalization is everywhere manifest. But rather than face that, we continue to enhance the very structures, such as Fannie Mae, that are designed for our impoverishment, despite the fact that the flimsy facade of providing access to the middle class, that their creation was heralded as providing, has been proven completely erroneous. They are instead, and at least this time, totally transparently, being used to force the American taxpayer to subsidize the purchase of an asset to a class of people who can ill afford them, at a price in far excess of affordability, held there by the stated market manipulation of the Federal Reserve, as it blows another bubble to be burst in the near future to propel another generation into the streets and hold the carrot out for the next. This is the new American Dream. Not to have a place to live, but to buy, on credit, temporary shelter until AmeriCorps decides it's time for new blood and you end up on the street, with no job, no healthcare, no home, no savings, just lots of debt ready to be force-fed to the taxpayer to assume. That's why there can be no more social security, it will all be consumed for debt security. At least that's one thing you can bank on.

Tuesday, November 26, 2013

Gobble Gobble Roil and Wobble.

Facing Extinction with Distinction.

Pictured above is this year's Thanksgiving card. I've been making and printing my own cards for decades now. The original intent was to send a personal card that had something of myself in it as opposed to the soulless products of Howlmark, oops, I mean Hallmark. Howlmark was what I named the production Company that printed them (ie, me). Complete with Logo:

What that entailed in those days was copying them on a color copier, which I had to purchase, because, at that time, Kinko's wouldn't allow their customers, as a result of government diktat, to use their color copiers, and to make a card required more instructions than was really feasible to go over with an impatient and harassed clerk. When I asked what the reason for this was, they told me that the government was afraid of someone using the copiers to make currency, to which, astounded, I queried, "So since when did you become agents of the Treasury Department?"

So I bought a color copier. It's embarrassing to admit it, but I paid $3300.00 for this marvel of technology which I still have in my cellar, as well as a copy of the bill, which I have to look at to ensure myself that it really did cost that much. Of course, today, just one of the color cartridge costs more than the price of a printer, so another piece of operational machinery sits idled replaced by a much cheaper, in every meaning of that word, color printer.

The printer is much more versatile, coming, as you know with a color copier and fax (what's a fax, right?) capability packaged together in one unit. Well, and this is the point of my post, what is now up to three other units, all of them in various states of disrepair. The Xerox printer I won't really count, (but its is still mechanically capable of dot matrix printing), an HP 2000C, which is also in perfect working order, but was no longer supported once I  upgraded to XP (yes that's right, I'm still on XP, but support for that, I've heard, is going away in March/April 2014), another brand, which I don't remember, but it lost one of its functions, so I purchased another HP, as I find their quality pretty good, and they can take the heavy stock paper I use to print the cards on, this one an Office Jet 5780 all-in-one, that I still use for scanning, but the print function is iffy, especially in color. Unless I use it every week or so (and I can go months without needing to print anything) the color cartridges simply dry up and won't print without much travail on my part, so I was grateful when I received the gift of a used, but far superior, machine in the guise of another HP, this one a Photosmart 2610, which, after a couple of years of sporadic holiday printing, has now decided that it won't feed paper anymore, but crumples it up into useless paper jam instead.

The scanning function still works, so now I have 3 scanners (I also had an HP scanner that died, but luckily, by the time it died, every printer pretty much included one for less than the price of the original scanner). Now, the printing function of the 2610 probably still works, but, despite having just paid half the price of the printer for their multi-color print cartridge, (which means you can have a cartridge that has run out of yellow, but has plenty of cyan and red left, but those ink supplies have to be thrown out unused as there's no way to refill just the yellow), I may never know if the printer still actually works, as the cost to have it repaired can easily very quickly cost more than the cost of a new and improved printer.

Now although I am in fact questioning the wisdom of continuing making and sending my own cards, the point of this post isn't that at all. It's instead to highlight the fact that in one of the most recent industries to appear on the industrial landscape, the one that was going to usher in the paperless office, has proven to be an ecological disaster of the highest proportion. Not because of my fecklessness, but because of the business model of said industry. Acceding to the theory that we are a market-oriented society, driven up against the wall by market forces, the decision that HP made in their manufacturing and pricing have directly to do with their, and the industry's as a whole, business models. And number one in that business model, and I speak not from rancor here, but from direct experience, as I was a Computer Engineer as well as peripherals technician, and a Network Support Engineer for almost my entire working career (but I can't, because of the design of said printer, even fix a paper jamming problem now), is the elimination of humans in the peripheral repair equation. In fact, as an AT&T tech, we never even worked on the printers, unless they were band printers; if the customer had a maintenance contract, we swept in swapped out and shipped off their old printer replacing it with a 'new' (ie reworked) one.

This fact, coupled with the necessity of getting the unit cost of the initial purchase price down below the cheap competitors' models, required stealth technology of a different kind. This stealth was of the sort I mentioned above, whereas cartridges cost more than the printer, and then moving further into the evolution of stealth charges, moving all the print cartridges into one, so that the purchase price was not only obscene, but wasted toxic chemicals, unavoidably, which is to say, by design, because you will ALWAYS run out of one color before the other two are gone.

And this is only printers. You know yourself that every electronic device on sale in the Marketplace right now uses the same wasteful toxic-laden business plan to increase sales and lock customers into their products so as to gouge them for future purchases in order to keep their current one in working order. The result of this orgy of production is that the resultant electronic garbage is choking every ecological system on the planet, and, because no company's bottom line need concern itself with e-waste, except as a lame PR ploy, it will never be addressed, except, again, by tacking it on at some point in the future, to the consumers' price, via taxation or other creative avenue. 

Now you can argue that that's fine, but the problem is that, because it's not included in the price, but instead uses stealth procedures by which society eventually pays the cost, it means that the products that are the dirtiest and cause the most toxicity to the environment, as long as they are manufactured in to low-wage, low-regulation country, which thanks to anything-but-free trade, it is, has to be, following the harsh discipline of the market that forces good industries out and amoral, asset-stripping malevolent industries to the top of the ladder of success, are exactly those industries that are the most capable of pushing all of their expenses and clean-up operations onto the State, off of their books, and hidden from view.

But like all of Capitalism's imbroglios, this is never ever a subject of conversation among those who should be the most concerned: government officials. Because they are exactly the same people who those other 'people', called corporations, have paid off to cater to their needs in complete indifference to the needs of anyone else, let alone to the impacts on something as 'abstract' as the planet itself. Yet, somehow, to suggest this, something no one knows more than the most fervent Capitalists, and their paid-off scum, like Groveling Norquisling, is to be branded as some kind of commie pinko ... by those who are fervently literally anti-socialists. It is this dire strait, where we can talk about the destruction of the world with more freedom and less fear than we can talk about the mechanisms by which Capitalism is bringing about that destruction, that we now find ourselves inescapably trapped. The end result will leave us with less than something to have Thanksgiving about. But on we go.

Monday, November 25, 2013

Recovery in progress .... please wait.

While lying on my bed reading D.H. Lawrence's, "The Rainbow", in a position that was more in line with keeping the maximum of light on the page as opposed to comfort, as I feel that as long as natural light is available, it's best to delay putting on the electric, not only because the light, I believe, is easier on the eyes, but because, if the billions of other people in the world practiced just this modicum of discipline, then the tons of CO2 pouring into the atmosphere would be that much reduced, I looked out the window to observe two trees that stood against the darkening sky.

There was a light wind blowing, but from the motion of the taller, wispier-branched tree, you would have thought a gale was blowing. Right next to it the heavy dense stolid branches of a cypress pine barely moved as the scattered delicate twigs of the other tree whip-sawed around in what looked to be a frenzy of excitement.

As I gazed at this strange juxtaposition, it occurred to me that there was an analogy there. Because the stoic tree was a gymnosperm while the lithe, taller tree was an angiosperm. In the gymnosperm family are included both conifers and ginkgoes, both ancient, as the ginkgoes, for example, co-existed with the dinosaurs, whereas the Angiosperms are more recent, and includes all the flowering plants, many of which have not only adapted to the presence of motile animal life, but actively uses it for their propagation and dissemination of their seeds.

What this reminded me of was the opposing forces of liberalism and conservatism. The rock of tradition and ancient ways of doing things being constantly whipped by the winds of change, yet stands solid and firm while the liberality of seed production amongst the angiosperms gives life more divers way of taking advantage of every nook in the environment that is capable of sustaining life.

In this, nature's scenario, there isn't a pitched battle of who wins and then takes all, but a constant ebb and flow as conditions become more set, the old ways settle down into a pattern, as the conditions become more volatile, it is the fleet of foot and the quick to adapt that rule the day.

This is analogous to the economic forces either at the Fed represented by inflation hawks and doves, in the Congress by fiscal liberals and conservatives, or internationally, by German austerity and Keynesian demand-stimulating deficit-spending advocates. All of whom clamor for the same thing: a recovery.

But much of the recovery programs sound just like the similarly named drug and alcohol detox clinics called Recovery Houses, that have become a cottage industry in Southern California's sun-besotted southlands. They even use much of the same lingo and have the same problems with balancing survival of the patient with using measures that are enabling to the bad habits that got them strung out in the first place.

Just as me and other bloggers, journalists, and even  Congressmen can advocate one solution or another, cold turkey , for example, allowing deflation to go its course so as to put an end to the malinvestment that's throwing good dollars after bad, wasting all the productivity of an entire hyper-energy-consuming economy by pouring them into investments that are not only deleterious in the short run, albeit stimulative of a deadened demand (if surrounded be sea water, a thirsty man may drink of it though fully knowing it will eventually kill him), but can only lead to collapse in the long run. Contrarily, Keynesians may be correct that infrastucture investment is vital, but with global warming all but certainly caused by the pouring of millions of tons of CO2 at an accelerating rate into the atmosphere, perhaps taking all the earnings of the future and putting them into road construction and repair, facilitating the very bane that's responsible for the overheating of the troposphere in the first place, isn't the way to recovery, but, as in any addiction, is merely building a road to perdition and leaving no resources left with which to change course. Or, in the language of addiction, enabling that very activity which is killing the patient.

However, what Bernanke has to deal with that his critics don't, is keeping the patient alive. So while the friends of a drug-addicted person may easily counsel the parents to let their child "hit bottom", and that may in fact be the only way for them to turn their life around, the fact of the matter is that that particular cure has been known to kill many of the patients it's used on. So, great! The cure worked, but the patient died. Thus with austerity. We can start anew and have a spanking new economy that responds more directly to demand in the economy to stimulate the formation of businesses that more efficiently respond to that demand, but what if half of the citizenry has dropped dead from starvation or lack of health care in the meantime? We armchair critics need not worry if our ideas would leave half the population toast, but the Bernank does.

So, as it seems, as evidenced by the two trees bearing their loads in the same winds with completely different responses, yet coexisting, we need to address the problem of what caused our economies to fail so massively and to recover so limply. To allow those forces that stand for conservation look into themselves and see that, like the beetle eating its way through the conifer forests of the American West, there is a sickness burrowing at their innards leaving a seemingly strong husk on the outside, but hollowing it out to a diseased center that must be stopped if survival is to be expected.

The thin tree represents those forces for change beating against the staid facade of the cypress, in full knowledge of the rot that's going on within. Those whipping branches remind me of the cry for revolution so glibly being thrown about even as we see the insanity of such a path tear Syria to pieces and spill over into the surrounding countries. Is that really what we want? Have we really reached such a point that the only solution we can come up with is dissolution? Where we think it's more expedient to rave about murdering one another (because that's what revolution means), than talking to one another?

Like the parents of the drug addict, both of the solutions for recovery, whether austerity or permissiveness, threatens to kill the patient because we have decided to impose those solutions onto the sufferer without bothering to delve into the reasons our child (as the economy is a living entity too), succumbed to addiction and drug abuse in the first place. The reason for avoiding such an obvious path is that what such investigation must reveal is that the fault, dear Brutus, lies not with the stars, but with ourselves. We all have pet beliefs and comfie lives we don't wish to see disturbed or inconvenienced, never mind uprooted and destroyed, simply because the decisions we've made over the last generations have been destructive on a scale unknown to any extant form of life on the planet.

But if we don't get serious about confronting our demons, they will consume us, and the resultant hell we are left to live in will be no less horrific simply because it was one of our own making.

Friday, November 22, 2013

It Ain't over Until the Well-FED-Lady's Yellen.

In a post in the CBB on, Doug Noland prints some of the Senate interview of the soon-to-be Fed Chairman, Janet Yellen, who, in my personal opinion, is in turn playing the same part for the Bernanke Fed that he played for the Greedsfan: ushered in right before the periodic collapse takes place so as to allow the Maestro, numero deux, to leave with his reputation remarkably untainted, even though he brought about, once again, the world's biggest financial catastrophe, isolating millions more in job limbo, which means premature deaths by the millions, as in the former USSR, as no job means no home, no health insurance, which means no health care.

But what the heck. At a quarter of a million dollar paycheck, amounting to a cool million for a 4year term, who cares? And that's just the nominal salary, counting none of the perks that jerks in government 'service' serve up to themselves.

One of the terms used in the interview over and over is "Financial Stability". How it is the Fed's job, as it increases its balance sheet using the same concept of SIV's that Enron employed and was later adopted by the same banks who constructed it for the Oil services giant (there's that word service again ... whether it's politics, the military or the banks, whenever you hear that term, just open your wallet and empty it out, because all service providers demand HUGE tips) in the first place, to ensure such stability.

Yellen then states, in literally the same breath that, "Low interest rates (yes those low interest rates promulgated by ...hmmm, oh yeah, the Fed) can induce risky behavior", because, as we all know, stability and risky behavior always go hand in hand. She then assures the panel that the Fed under her, will be especially watchful of the largest institutions, those threatening financial instability the most. She fails to mention that those institutions' size is a function of the Fed and the Federal government that abetted their getting so huge in the first place so as to allow them to compete with the European Banks, even though every European bank is teetering so precariously on the edge of insolvency that the Societe General has brought a claim against a humble (well okay, not so humble, but he shouldn't be: while Janet has proclaimed that as late as 2007 she had nary an inkling of the trouble brewing, Mish,  was giving a blow by blow account of how, when the collapse began, first the monolines (remember them anyone?), the ratings agencies, the banks with the aforementioned SIV's fraudulently held off their books in full view of the Fed who gave this vehicle for misrepresenting the Banks' true value by holding their liabilities in a separate company, Enron-style, so that their bottom line could be elevated, deceiving shareholders, their full blessing), blogger who's been fined 8,000 euros (no euro sign on keyboards), for pointing this out.

"I think it’s important for the Fed, as hard as it is, to attempt to detect asset bubbles when they are forming". But the Fed doesn't have to, there are plenty of people, outside of the Fed, pointing at Fed policy who both saw asset bubbles forming, and, correctly, laid the blame for those asset bubbles forming squarely where it belonged: at  the Fed's doorstep, for the low-interest rate policy that encourages, by their own stated objectives, risky behavior. People take their money out of bank accounts that although they are called Savings account, are as a direct result of Fed policy, losing accounts, as they pay less interest than the real rate of inflation, which, again, as a result of Fed policy, are rising on those items that people HAVE to buy, while decreasing only on those things they'd LIKE to buy, like computers and HDTV's, and game consoles and stupid smart phones.

So, how does JY plan to deal with these TBTF institutions? Which she admits  "has to be among the most important goals of the post-crisis period" (never mind that this is the fifth year and all that the Fed's done so for is encourage even MORE TBTF criminality by working with the administration to use Fannie-Mae, Freddie Mac, the FHA, and the FED itself to arbitrarily and systematically elevate the most commonly owned asset in the country, the Homes of the citizens, beyond their market valuations in order to elevate the US economy above its actual value and allow municipalities, who exist on the property taxes that would plummet if homes were allowed to fall to their true marketplace prices, to stave off bankruptcy. There are at least another 50 Detroits, kept from insolvency simply by the policy of the Fed purchasing MBS that the marketplace won't touch, because, being the instigator and perpetrator of fraud,  albeit with a wink and a nod from the government on all levels, the private sector knows  that the valuations, on which the value of those MBS's are based, are laughably elevated.

But since, as she claims, we are making progress, but, "We have on the drawing boards the possibility of requiring that the largest banking organizations hold additional unsecured debt at the holding company level to make sure that they are capable of resolution.” Wonder what kind of artists they have manning those drawing boards that it's taken more than 5 years and nothing except the further deterioration of the economy and the banking sector has occurred, although the signs of it are TARP'd over by the very Fed that's supposed to be "monitoring the situation".

Finally, on the subject of "the Wealth Effect" that a rising stock market is supposed to have, Yellen has not only the wrong assumption about that effect, but the wrong assumption of what exactly is driving what. This so-called Wealth Effect the Fed has insisted on using as justification for its wrong-headed policies since it fomented the financial crash, is the effect that the Greedsfan Fed was able to work up to a feverish pitch of Irrational Exuberance because the foolish investing public felt richer as the rigged stock market shot ever higher. This was the period when Greedsfan and Cramer were like cheerleaders for one another, while they ignored the fact that the "Wealth Effect" was nothing more than a euphemism for fraud.

But when the Fed can obfuscate their actions, spout high-flying phrases and rabidly drawn conclusions from idiotic assumptions that appear to actually work when the polity is deluded by their legerdemain is one thing. To actively and assiduously try to pull the same trick when the entire audience can see exactly how you're pulling the strings in order to make the market's valuation increasingly divorced from its worth, it's not going to have the same impact. Even those who know that they shouldn't "Fight the Fed" and so move their cash into risky investments, ones that shouldn't be being made, they do so with one foot always ready to hold the door open for them to squeeze out of it before its slams in their face with their money on the other side of it: the very definition of entrenched instability. The exact opposite of Financial Stability, again, not Watched, not MONitored by the Fed but CREATED by the Fed.

Then, like leveraging itself, if you leverage on quicksand, you may be able to look like "The Smartest Men in the Room" for awhile, but when it undergoes liquefaction, every thing falls, so, as the Fed, by counting on a wealth effect to create 'animal spirits,' has been mistaken, in that they assume it works, and  then go on to decide that a nascent recovery is taking place, "a recovery in housing that could drive a broader recovery in the economy". But, in a healthy economy, it is the other way around. If there were a true wealth effect, then there would be job growth and upward pressure on higher income for workers, not for the hoarders known as the rich. Krugman harps over and over again about 'the paradox of thrift", but never cites the paradox of funneling larger and larger proportions of company profits to the rich where it has the exact same effect as his paradox of thrift has: it takes vast sums of money out of the American Economy where it was produced and whose growth needs those profits reinvested in it, but ships it instead, by the boatload, to offshore bank accounts and foreign direct investment, and luxury goods and frat-brat toys, starving the economy that produced it. It's higher wages, not a contrived "Wealth Effect", that then gives people real confidence in their economic position, enough to consider purchasing such a big ticket item as a house.

By assuming the other way around, that you just make people 'feel' like their wealthy while you rob them of everything that gives them real financial stability: Health insurance, good education, and housing that's not jerry-rigged at a nose-bleed levels in order to trap them there when the next crash, (we now all know, you see) comes.

Claiming that we, when even the mere possibility of a tapering of the FED's program for financial instability called  QE:

"saw mortgage interest rates rise in the space of a few months by over a hundred basis points, we had to ask ourselves whether or not that tightening of conditions in a sector where we were seeing a recovery (we were?) we did have to ask ourselves whether or not that could potentially threaten what we were trying to achieve:  an improvement in the labor market ..."

Yellen lays bare the fraud at the heart of the monetary system. When even the whisper of a muting in the Fed's asset purchasing program of enlarging the balance sheet of the Fed by more than a $Trillion, that's $1,200,000,000,000.00 in less than a year, while at the same time the Pentagon comes forward with another $8trillion that has simply gone unaccounted for, one has to ask oneself, where are we? Stealth technology, which we paid for to use on other countries, is working the same way that stealth arming of a fundamentalist Muslim sect of Wahhabism during the Reagan years in order to fight our fight against the Soviet Union in Afghanistan: it is backfiring big time, and just as we blamed the terrorists that we ourselves created for what happened on 9/11 instead of the government goons that put such an odious operation into place in the first place, we are doing the same thing, only now with the entire economy, using the "Stealth Effect" in economics to fool the public into thinking their richer than they are so they can be suckered yet again into putting themselves into debt for decades to pay for an asset whose price has been purposely elevated far above its real worth by a private institution that now has the government by the balls. And the icing on the cake is that you can tell the public they're being lied to right to their faces: That's what the Wealth Effect's stated purpose means, pumping up the stock market so that people will feel wealthier than they are so that they will more readily spend money they haven't earned yet, but that they feel assured they WILL have. Like extend and pretend: they know that you are so stupid you'll never notice that that's a catchy phrase for lying to  your face 'cause that's what you like. It's all over but the Yellen. And that'll commence shortly after the Bernank steps down.