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- US President Barack Obama has authorized sanctions against individuals and entities operating in Russia’s Crimean peninsula, according to the White House statement.
- Obama has issued an executive order that “prohibits the export of goods, technology, or services to Crimea and prohibits the import of goods, technology, or services from Crimea, as well as new investments in Crimea,” according to the statement.
- The executive order also authorizes the Secretary of the Treasury to impose sanctions on “individuals and entities operating in Crimea.”
- The move comes just a day after the European Union introduced similar action against the Russian region of Crimea and Sevastopol, accepted into the Russian Federation following the referendum last March.
- The United States did not recognize the reunification and has been calling on Russia to “end its occupation and attempted annexation of Crimea.”
- “We will continue to review and calibrate our sanctions, in close coordination with our international partners, to respond to Russia’s actions,” Obama’s statement reads.
- OP-EDGE: Sanctions’ goal is regime change, no matter Cuba or Russia
- The bill that opened way for further sanctions against Russian economy – dubbed Ukraine Freedom Support Act of 2014 – was signed on Thursday. However Obama was hesitant to introduce any new measures until they are synchronized with European partners.
- ‘Can’t stuff this bear’ & other Putin Q&A quotes
- The Russian Foreign ministry warned on Thursday that actions against Crimea would be considered ‘politicized discrimination’ against Russia and its citizens.
- “We would like to remind the EU about our lawful right to adequately respond to its so-called restrictive measures against all Russian individuals and legal entities without exception,” the ministry said in a statement, reminding that Crimea is an inalienable part of Russia and warning of an adequate response.
12.19.14 – Regime Change In Cuba
- Normalization of relations with Cuba is not the result of a diplomatic breakthrough or a change of heart on the part of Washington. Normalization is a result of US corporations seeking profit opportunities in Cuba, such as developing broadband Internet markets in Cuba.
- Before the American left and the Cuban government find happiness in the normalization, they should consider that with normalization comes American money and a US Embassy. The American money will take over the Cuban economy. The embassy will be a home for CIA operatives to subvert the Cuban government. The embassy will provide a base from which the US can establish NGOs whose gullible members can be called to street protest at the right time, as in Kiev, and the embassy will make it possible for Washington to groom a new set of political leaders.
- In short, normalization of relations means regime change in Cuba. Soon Cuba will be another of Washington’s vassal states.
- Conservatives and Republicans such as Peggy Noonan and Senator Marco Rubio, have made it clear that Castro is “a bad man who turned an almost-paradise into a floating prison” and that normalizing relations with Cuba will not “grant the Castro regime legitimacy.”
- Noonan forgets about Guantanamo, Washington’s offshore torture prison in Cuba where hundreds of innocent people have been held and tortured for a large part of their lives by the exceptional Americans. The Cuban Revolution intended to free Cubans from foreign domination and from exploitation by foreign capitalists. Whatever the likelihood of success, a half century of Washington’s hostility has as much to do with Cuba’s economic problems as communist ideology.
- The self-righteousness of Americans is extreme. Noonan is happy. American money is now going to defeat Castro’s life work. And if the money doesn’t do it, the CIA will. The agency has long been waiting to avenge the Bay of Pigs, and normalization of relations brings the opportunity.
Dr. 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. Roberts’ latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West and How America Was Lost.
- The US is behind the current drop in oil prices as it is aiming to undermine the economies of large petroleum producers Russia and Venezuela, Bolivian President Evo Morales told RT.
- In his interview with RT’s Spanish-language channel, Morales said that it’s was “a pity” that Washington remains on a “wrong course” by continuing to use sanctions against its political rivals.
- “[The US thinks] we are living 200, 300 or 500 years ago, instead of today. But all the past should remain in the past. The US should realize this,” he told RT’s Spanish channel.
- America is acting like other large empires did for centuries as they “disseminated strife and hatred inside and outside, wishing to establish political control over other nations and to plunder them economically,” Morales said, in an apparent reference to the Spanish conquistadors’ invasions of Latin America.
- The Bolivian president also slammed Europe for being “US accomplices” in implementing sanctions worldwide.
- “We must think of a way to liberate Europe, and just think that they used to be invaders of our countries,” he said.
- Morales said that President Obama “should stop imposing sanctions” and pay more attention to America’s internal problems, such as “abolishing capital punishment, or to think of new laws to combat racial discrimination.”
- He described the US president a “discriminated Afro-American” who himself is “discriminating against migrants.”
- “Of course, now that America can’t overthrow a president by a violent military coup, it starts to view the option of economic sanctions. I am sure that the oil prices plunge was provoked by the US to undermine the Russian and Venezuelan economies. This is my opinion,” Morales said.
He urged Moscow and Caracas to “join their efforts” in countering Washington’s “aggressive policies.”
- Morales said that current oil prices, which have reached their lowest since 2009, are the result of “temporary difficulties.”
- “I am sure the US aggression related to oil price cuts will not last long. Is $60 per barrel a feasible price? Washington is not interested in this. All the US is interested in is an economic assault on some countries to overthrow their presidents. But they will not succeed in this task,” he said.
- The oil price has fallen from $100 per barrel in June to $60 per barrel in December, due to a drop in global demand and increased oil production in the US.
- Many observers believe that low oil prices and Western sanctions imposed on Moscow over its union with Crimea and alleged involvement in the Ukrainian crisis have delivered a painful blow to Russia’s economy.
- A decline in confidence in the country’s economy prompted investors to sell off Russian assets, which in turn saw the ruble plunging over 40 percent against the dollar since the start of the year.
- While no one will be entirely surprised in today’s consequence-less world, the “bombshell” news that Greek Independent MP Pavlos Haikalis claims he was offered EUR 2-3 million in order to vote for Greece’s next President is no less shocking in its exposure. As AP reports, it is the second such claim from the Independent Greeks. Another of the party’s lawmakers claimed last month that someone had approached her with the intention of bribing her. The government immediately jumped into defense mode and dismissed the claims as “badly acted theater” and called for any evidence to be made public. However, as KeepTalkingGreece reports, “sources” from the prosecutor’s office told media that Haikalis did indeed submit footage, and according to latest information, told the briber’s name to the Greek Police. This can only bring Goldman’s worst-case scenario – a Cyprus-style collapse – even closer for Greece.
- As AP reports,
- A lawmaker from a small right-wing party claimed Friday that someone he did not identify had attempted to bribe him to vote in favor of electing Greece’s new president.
- Bailed-out Greece is in the midst of a presidential vote that could trigger early general elections, if its 300-member parliament fails to elect a president by the third round of voting on Dec. 29. The sole candidate, nominated by the government, fell 20 votes short of the necessary 180 in the first round Wednesday.
- Actor Pavlos Haikalis of the Independent Greeks claimed during a phone-in to a live television program that he was offered about 700,000 euros in cash, a loan repayment and advertising contracts, with the alleged bribe’s total value amounting to about 2-3 million euros ($2.4-$3.7 million). He said he had informed a prosecutor about two weeks ago and had turned over audio and video material.
- It is the second such claim from the Independent Greeks. Another of the party’s lawmakers claimed last month that someone had approached her with the intention of bribing her.
- Government spokeswoman Sofia Voultepsi dismissed the claims as “badly acted theater” and called for any evidence to be made public.
- “It is obvious why these ridiculous performances are set up: so that a president of the republic is not voted for, and the country is led to early elections,” Voultepsi said in a statement. “For reasons of public interest, the evidence must be made public immediately. If there is no evidence, legal procedures must begin immediately against the perpetrators of this wretched affair.”
- The Independent Greeks’ popularity has been waning, with opinion polls indicating it could struggle to make it into parliament in general elections.
And KeepTalkingGreece provides some more local color…
- “It started as a joke, but then things got serious,” Haikalis adding that he had video and audio material and that he took the case to the prosecutor and that he also gave name and address of the briber.
- The MP refused to name the person who attempted to bribe him, but stressed that the person “was known to the economic and political world.”
- Chaikalis’ claims come just two days after the first round of voting for the country’s next President and four days before the second round. Last Wednesday, the coalition government of Nea Dimokratia and PASOK failed to gather enough votes to elect Stavros Dimas for President. 127 ND lawmakers, 28 PASOK and 5 MPs voted in favor of Dimas. The 160 votes were far below the needed 200.
- Independent Greeks is a nationalist, anti-austerity party that voted against Dimas candidacy. The party want snap polls.
- Pavlos Haikalis told ANT1 TV that he submitted the video material to prosecutor 15 days ago adding that “we kept the issue secret waiting for Justice to intervene, but nothing has happened so far.”
- “Sources” from the prosecutor’s office told media that Chaikalis did indeed submitted footage. According to the Justice sources, the footage contained “clear sound” but “blur image.” Therefore the prosecutor brief the police that established a special team to optimize the video quality and recognize the briber.
- According to latest information, Chaikalis told the briber’s name to the Greek Police.
- As whole Greece is keen to learn who attempted to bribe an MP in order to elect the President and avoid early elections, according to investigative journalist Kosta Vaxevanis , the briber was allegedly from the “environment of former PM George Papandreou” and “somebody who has worked for a Greek and a German bank.”
- So far it is not clear whether the briber was just a middleman.
- According to Vaxevanis’s website To Kouti tis Pandoras, Haikalis had three meetings with the briber, he had brief Independent Greeks chairman Panos Kammenos and they had decided to wiretap the meetings and conversations. The police had entrapped Haikalis’ home but that the briber did not appear in the crucial meeting.
Bringing Goldman’s worst-case scenario closer…
- In the event that the parliament fails to elect a president, general elections would be held and market uncertainty/pressures would extend. At this stage it is important to understand that market pressures are not linked to the democratic process of elections nor to a potential government change, whatever the ensuing government formation may be. They are linked to the risk of policy discontinuity and a severe clash between Greece and international lenders. More specifically, we think the room for Greece to meaningfully backtrack from the reforms that have already been implemented is very limited. Any such attempt would lead to an interruption of official financing to Greece.
- Examining the downside scenario.
- To be sure, even in the event of a government change, there is room for a cooperative solution between Greece and Europe. Greece has made significant reform progress between 2012 and the gap between what has already been implemented and what remains to be done is not insurmountable.
- Also, the incentives for a clash are not there. For instance any Greek government would likely want to capitalize on the momentum that the economy is building on the activity front, rather than trigger a disruptive capital flight that would lead Greece to a double–dip recession. In addition, given that more than 80% of Greek debt is held by the official sector and given that any OSI would be feasible only as part of an agreement with the Euro-area, there is an incentive for a Greek government to pursue cooperative solutions.
- However, the history of the Euro-area crisis has shown that the probability of an “accident” can never be dismissed, when it comes to intra-EMU politics. And it is important for markets to be able to understand and quantify the aspects of a potential downside scenario, where official financing to Greece is interrupted.
- The Biggest Risk is an Interruption of the Funding of Greek Banks by The ECB.
- Pressing as the government refinancing schedule may look on the surface, it is unlikely to become a real issue as long as the ECB stands behind the Greek banking system. In fact, refinancing became a lot more pressing between 2011 and 2012. But financing needs were met despite the impasse in negotiations between Greece and international lenders – partly via the issuance of T-bills repoable at the ECB by Greek banks. Such methods can always be revisited at times of extreme need.
- But herein lies the main risk for Greece. The economy needs the only lender of last resort to the banking system to maintain ample provision of liquidity. And this is not just because banks may require resources to help reduce future refinancing risks for the sovereign. But also because banks are already reliant on government issued or government guaranteed securities to maintain the current levels of liquidity constant.
- And this risk can become more pressing from a timing perspective. At the heat of the Greek crisis, there was evident deposit and broader capital flight, which Greek banks helped accommodate with ECB’s help via the ELA facility. In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged “bank holiday”. And market fears for potential Euro-exit risks could rise at that point.
- The world is more nervous about the drift toward nuclear war between the U.S. and Russia than at any time since 1962’s Cuban Missile Crisis. When French President Francois Hollande urgently side-tracked his return-flight from a diplomatic mission recently, in order to meet with Russian President Vladimir Putin at Moscow’s Vnukovo Airport, at a private room that had been scoured ahead of time to eliminate any possible bugging devices, there was speculation as to what had caused Hollande’s sudden detour, and there were even rumors of a possible cause being an American “false-flag” event in the works to be blamed on Russia as a pretext for going to war against Russia, just as Russia had been falsely blamed for the Ukrainian military’s downing of Malaysia’s airliner MH17 onJuly 17th. All that was publicly released about the two-hour meeting were platitudes, hardly anything that would have justified side-tracking Hollande’s flight so as to surprise intelligence agencies and be able to meet the Russian leader in an untapped room.
- The level of fear is certainly rising on both sides. On the U.S. side, the CBS News Poll in summer 2007 found 6% of Americans calling Russia an “enemy”; seven years later, that same figure was 22%. However, what is not rumor nor fear, but proven fact, by Obama’s own actions as will be documented here, is that he wants a war against Russia and is trying hard to get Europe (including Hollande) onboard with this goal in order to win it; and that America’s Republican Party want this at least as much as he does, though the American public do not.
- The Democratic Party (in the House and Senate) are staying as quiet as possible about a ‘Democratic’ President pushing them toward World War III, which is a goal that Republicans have always been far more eager for than Democrats. (Republicans are famous for “Speak softly but carry a big stick,” and for swinging it as hard as they can, especially against Russians.) In fact, one of the reasons why Obama won the Presidency is that he criticized his 2012 Republican opponent Mitt Romney for saying of Russia, “This is without question our No. 1 geopolitical foe.”
- That dissent by Nobel Peace Prize Winner Obama appealed to the U.S. public at the time, but not to America’s aristocracy, who are a mix of people some of whom hate Russians and others of whom don’t care about Russians, but none of whom are passionate opponents of nuclear war (a diverse group that they lump contemptuously with “peaceniks”).
- For example, one major mouthpiece of Democratic Party aristocrats has always been The New Republic, and on 17 September 2014 they headlined “Obama Can’t Admit That Romney Was Right: Russia Is Our ‘Top Geopolitical Threat’.” Another one is the National Journal, the aristocracy’s version of its companion propaganda-operation (owned by the same aristocrat as) The Atlantic. On 7 May 2014 (just five days after Obama’s people hadmassacred pro-Russians in the House of Trade Unions in Odessa and thereby started the extermination-campaign against them, or “civil war” that’s still raging), the National Journal headlined “Mitt Romney Was Right: Russia Is Our Biggest Geopolitical Foe.”
- Conservative ‘Democrats’ are just Republicans spelled with a “D”; but, when it’s an aristocrat, they know how to spell, and are just trying to deceive the ones who don’t. This is why ‘liberal’ magazines are prized possessions of the aristocracy — to deceive the ones who don’t know the difference and who think that it’s fine in a democracy for politics to be merely a choice between two conservative parties, one of which is called by a meaningless adjective ‘liberal.’
- The people who fund both political Parties are virtually united in that fascist belief: they don’t even mind backing racist facists or “nazis”; many of them are precisely that themselves.
- Obama is with them (and with Wall Street, and with Big Ag, and Big Oil, and Big Military), against the public. But he’s smart enough a politician to pretend otherwise, and his aristocratic funders respect this. (There were no hard feelings for his exploiting Romney’s politically stupid public assertion; they knew that it was an Obama pose: he’s a ‘Democrat,’ after all.)
- For America’s elite, the Cold War never ended, because it was never really about communism versus capitalism — not for them. They are fascists, and they want global dominance. Capitalism, shmapitalism; all they really care about is dominating the world, destroying enemies, which means anyone who refuses to be controlled by them.
- Aristocracy hasn’t changed since, well, long before the Bible began. Domination is the big thing, for the aristocracy. Russia threatens the vaunted global control by America’s aristocracy, their dominance over all other aristocracies, because Russia is the second-most-powerful military nation. Russia is the only nation that can say no to U.S. aristocrats and (maybe) get away with it. That’s what this conflict is all about. It’s why they ratcheted up the “enemy” figure for Russia from 6% to 22% in just the past seven years.
- As President Obama’s speech at West Point, on 28 May 2014, propagandized for (i.e., rationalized) this conquer-Russia view on the part of America’s aristocracy: “Russia’s aggression toward former Soviet states unnerves capitals in Europe, while China’s economic rise and military reach worries its neighbors. From Brazil to India, rising middle classes compete with us.” So, Obama made clear to the graduating West Point cadets that the BRIC countries are the enemy (Russia and its leading supporters of international independence, the enemies against a mono-polar or “hegemonic” world), from the standpoint of America’s aristocracy, whom the U.S. military now serves to the exclusion of any public interest. Ours want to crush the aristocrats in Brazil, Russia, India, and China. Though it’s alright for those other countries to produce more, that’s true only if American aristocrats control the local ones there, like in any other international empire — not if the local nation’s aristocrats control the country. That’s not the way aristocrats in banana republics are supposed to behave. They’re not supposed to be independent countries. Not really.
- The President who had invaded Libya and Syria, and re-invaded Afghanistan and Iraq, and who perpetrated a violent overthrow and installed racist fascists (nazis) in control of Ukraine, is lecturing the world against “Russia’s aggression,” for its having accepted back into Russia’s traditional fold little Crimea, which craved to return to Russia.
- He’s got some gall to do that, but in order to be a cadet at West Point (and thus be there hearing his speech) one needed to be either a sucker or else a cravenous tool of the aristocracy, as the military has traditionally served; so, Obama played them for being both, and they evidently liked it.
- Obama knows how to speak down to an audience and fool them into thinking he respects them. But, to aristocrats, his respect is no mere act at all; he not only respects them, he lies for them, and he protects them, because he self-identifies with them, and not with the public (who just provide his voters, the people that are forced to choose between him versus Romney, or else to go for a mere token protest-vote or non-vote, such as American ‘democracy’ has degenerated into being).
- Obama was enemy-izing (turning into enemies) nations that don’t want to serve as America’s banana republics. Similarly, for example, the British Empire didn’t wish for local aristocrats in India to be in control, but only for those client aristocrats to be of use. That’s what it means to be a client nation (or, in the American case, a banana republic).
- Obama, in his speech, added, placing a clear hyper-nationalistic coloration on his promotion of America’s empire: “The United States is and remains the one indispensable nation.” (Hitler thought the same thing of Germany.) He promised to keep it that way: “That has been true for the century passed [sp.: past [[somebody at the White House didn’t know the difference between ‘past’ and ‘passed’]] and it will be true for the century to come.” (At least he wasn’t predicting there a Thousand-Year Reich.)
- So: that’s historical background to Obama’s plan for using Ukraine as a stepping-stone toward conquering Russia — one of the few favors he hasn’t yet achieved for his sponsors, after having protected them from what he contemptuously calls (in private) the “pitchforks”; a.k.a., the public. (And he really did call us “pitchforks” there, in private. To him, the public were like the KKK; and the mega-bank CEOs whom he was confiding to were like the people KKKers lynched. That’s the type of ‘Black’ he actually is. Blacks should loathe him, but most people, black and white, can’t see beyond his skin-color and liberal platitudes. They’ve got their categories wrong, and the aristocracy-controlled media like that just fine. Stereotypes help aristocrats control political outcomes. It’s button-pushing for them.)
- On December 11th, the U.S. Senate voted 100% (unanimously) to donate U.S. weapons to the Ukrainian Government in its war against Russia. On December 4th, 98% of the U.S. House had done likewise. Both bills also accuse Russia of having invaded Ukraine, and this accusation of an aggressive Russia provides a pretext for the U.S. to attack Russia, now that the Ukrainian Government has flipped from neutral (according to some estimations) or pro-Russian (according to others) to being clearly and publicly anti-Russian, by means of their U.S.-engineered coup that occurred in February of this year, when masked gunmen, who were actually hired mercenaries, dressed themselves as if they were instead Ukrainian security forces, and fired into a crowd of “Maidan” anti-corruption protesters and police, and the U.S. Government immediately blamed Ukraine’s then-President for doing that, and Ukraine’s parliament or “Rada,” who weren’t in on the scheme and didn’t know about it, promptly elected “Yats” Yatsenyuk, who had secretly been appointed 18 days prior to lead the country, by Victoria Nuland of the U.S. State Department. “Yats” immediately installed a far-right Government, filled with people who had already committed themselves to a Ukrainian war against Russia. They then promptly set about terminating Russia’s 42-year Crimean lease for Russia’s Black Sea Fleet, which is key to Russia’s security. Crimeans, who had always overwhelmingly considered themselves to be Russians and not Ukrainians, demonstrated against that Ukrainian move against them and against Russia, and Russian troops came into Crimea, to local applause, but to the condemnation from Washington and its allies.
- Russia’s taking back Crimea was not aggression at all, though America’s noise-media say it was; it was instead protection of Crimeans against the CIA’s American invasion of Ukraine. When the Soviet leader Nikita Khrushchev donated Crimea from Russia to Ukraine in 1954, it was much to the consternation of Crimeans at the time, and ever since. Yet, one of the explicit alleged ‘justifications’ for war against Russia, that are listed in the Republican House’s bill (“Whereas the Russian Federation’s forcible occupation and illegal annexation of Crimea. …”) is a blatant lie, because Crimeans overwhelmingly wanted Russia’s protection against the new, Obama-imposed, Ukrainian regime, which Obama’s State Department and CIA had just installed when overthrowing the President for whom nearly 80% of Crimeans had voted. In fact, a poll that was issued by Gallup in June 2014 showed then that 71.3% of Crimeans viewed as “Mostly positive” the role of Russia there, and 4.0% viewed it as “Mostly negative”; by contrast, only 2.8% viewed the role of the United States there as “Mostly positive,” and a whopping 76.2% viewed it as “Mostly negative.” This wasn’t much changed from a year-earlier Gallup poll. The Republican Party (and thus the Republican-controlled House) is willing to lie blatantly (about this and other crucial matters) in order to justify invading Russia, as it did in invading Iraq in 2003 (and even in 1991); and Barack Obama is willing to lie blatantly too for the same reasons — such as about the source of the sarin gas attack in Libya, etc. — but there were enough Democrats in the U.S. Senate to block Obama’s getting such blatant lies into the Senate’s bill on Ukraine, so it’s much milder, even though it does give the Ukrainian Government $450 million of U.S. taxpayers’ money. However, when Republicans take over the Senate in January, their bill will match the House’s in its warmongering lies, and Obama will get all he wants for his planned war against Russia (not just the $450 million that the Democratic-controlled Senate bill has provided).
- So, now, both the Senate and the House, plus the U.S. President (via his State Department, CIA, FBI, and entire Administration), are actually at war, a hot war not a cold war, against Russia, through their proxy, their made-in-Washington, racist-fascist or nazi, Government of Ukraine, which currently is doing the fighting and the killing and the dying, but which couldn’t do it but for that Western backing.
- This should be analogized to Fidel Castro’s takeover of Cuba and his and Soviet leader Khrushchev’s attempt to base near the U.S., Soviet nuclear missiles aimed against America. At that time, in 1962, U.S. President John Fitzgerald Kennedy said that we’d go to war against the USSR if necessary to prevent this; and today Russia’s President Vladimir Putin has implied, but not yet said, that his country will likewise go to war against the United States if necessary to stop its attempt to do against Russia what Khrushchev had been stopped from doing against the U.S. in 1962.
- However, the U.S. is now already farther along the warpath than the USSR had been in 1962. Already, many thousands of deaths have resulted from Ukraine’s war against Russia and against its supporters inside what had previously been parts of Ukraine. In 1962, Cuba was at peace, except for a few bands of U.S.-backed Cubans, who were trying to overthrow Fidel Castro. Ukraine is today’s Cuba, but even more of a danger. And, this time, the United States Government is trying to impose nuclear supremacy; the Soviet Union and its communism no longer even exist, and Russia is up against the mortal threat that is being wrongfully perpetrated by the U.S. against them.
- Clearly, U.S. President Obama was serious when he tossed out Ukraine’s President Viktor Yanukovych; and clearly he has the full backing of the U.S. Congress (though with some hesitation on the part of Democrats) to go to war against Russia and finish the job that he has begun.
- If it weren’t for the ongoing donations — officially loans, but ‘loans’ to an already-bankrupt Government are donations — by both U.S. taxpayers and EU taxpayers, that are channeled mainly through the U.S. and EU and IMF, Ukraine would simply stop its hot war against Russia and against its own ethnic Russians; and the Ukrainian Government that we installed in February would just collapse. The IMF and EU seem likely now to have ended their donations, but U.S. taxpayers certainly haven’t ended ours. We’ve barely even started, though, ever since 1991, U.S. taxpayers have already invested “over five billion dollars” in this scheme to bring ‘democracy’ to Ukraine, even before Obama’s successful February coup provided the capstone to that entire Orwellian effort: America’s aristocracy and its hired hands call this ‘democracy.’
- The investigative journalist Wayne Madsen has published his analysis of the American aristocrats, ranging from the Kochs on the right to the Soroses on the left, who are lobbying for this campaign to get taxpayers to fund the American aristocracy’s military take-over of other nations’ aristocracies and resources. Madsen sees as being the few politicians in Washington who are resisting that, both Ron Paul (and definitely not his son Rand Paul) libertarians, and Dennis Kucinich progressives.
- Madsen doesn’t note, however, that both of those men are now retired; so, they can afford to speak the truth without losing their jobs, since they’ve already lost them. Among the U.S. aristocracy that finances politicians into federal offices, there is no visible support whatsoever for such dissidents challenging the aristocracy: when one of them somehow manages to get into the political system, they’re removed from it, in one way or another, before they can do any damage to the U.S. aristocracy.
- This is how it came to be that 98% of the House and 100% of the Senate voted for war against Russia, even though at least 67% of the American public who expressed an opinion about that in a Pew poll were opposed (and this 67% figure might have been far higher if the question had been more directly asked, such as: “Should the U.S. go to war against Russia in order to enable Ukraine to get back Crimea and conquer the rebelling regions in Ukraine’s own former southeast?”).
- This America is supposed to be a ‘democracy,’ in which 99% of Congress and the President want taxpayers to be required to donate to the Ukrainian military, but less than one-third of the American public want to make those donations. Is it instead actually taxation without representation — a modern fascist form of the very oligarchy that America’s Founders went to war against and defeated in order to create America? How much more of a demonstration needs to be made that today’s America is a dictatorship, not a representative democracy or republic? Only media pretend it’s not a dictatorship, because they’re part of it, owned by the same people who heisted our Government and who trade favors with one-another against us. Clearly, this is an us-versus-them situation in which oligarchs are the aggressors, who destroyed American democracy, and from which a democracy now must again be seized, because it has been stolen from us and will not be retaken without a fight.
- Madsen also has an interesting explanation as to why Israel is so passionately supportive of the racist-fascist, or nazi, Ukrainian political parties that the Obama Administration has placed in control of Ukraine.
- Regardless of such speculations and evidence, however, there is nothing speculative about the American Government’s drive to nuclear war.
- It’s part and parcel of the same deal that just passed in the U.S. Congress and was signed by the President, that in the event of any future U.S. financial crash, FDIC-insured bank accounts won’t be paid until and unless the mega-banks that hold derivatives contracts get full payment on all of those gambling policies they had bought — i.e, never. Granny’s savings account will get emptied out to pay Wall Street’s gambling-debts. (Not that the U.S. ‘news’ media ever made such things clear to the public. But how do you think we had managed to obtain a Congress and a President like these are? The public had to be fooled by the aristocrats’ propaganda, and the ‘news’ media had to help aristocrats fool them about it, because the ‘news’ media receive their funding from aristocrats, both as their owners and as their advertisers. The public are just pawns on their chessboard. This is what became of democracy: it’s merely the residual verbal shell — ‘democracy’ — an Orwellian opposite of the original meaning.)
- As Obama told the mega-bank chiefs on 27 March 2009 in private, “I’m protecting you … My Administration is the only thing between you and the pitchforks.”
- He’s going to teach those granny-bank-account “pitchforks,” and such, a thing or two about “the one indispensable nation.” Namely: those people in it, the public, are dispensable, even if not quite as much so as are the people his forces are slaughtering (ethnically cleansing) in southeast Ukraine and other such places, where the ‘real riffraff’ live. The people in those areas are punished and killed for the crime of living where “the right people” want them simply to be gone (preferably dead, but otherwise refugees in Russia, until the ICBMs kill them).
- “Sweet land of liberty, of thee I sing.” But it’s long since gone, and is now aiming to clear out land elsewhere, especially southeast Ukraine, to place nuclear missiles there.
- America’s ‘entrepreneurs’ have work to do, across the globe; and all the charred remains of the nuclear ‘victory’ will be passed on to their proud heirs.
- It’s the new American way, the way of ‘entrepreneurs’ — a.k.a. “the aristocracy” — but actually only the ‘entrepreneurs’ who have been able to grab the most, who are billionaires. Only insiders can apply for admission. Outsiders can apply for a job, nothing more.
- Obama had it all figured out. Everything else from him was just an act. He is the personification of cynicism, and oflies.
- If you don’t think so, then how do you explain this, and this, and this, and this? Are those just innocent tragedies; and, if not, then who was the most indispensable person toward causing them to happen — causing them to be imposed by the Ukrainian Government that Obama’s coup imposed upon Ukraine? Obama’s decisions were essential in order to empower the people who are perpetrating this extermination-campaign, which is the bait intended to draw Vladimir Putin into a Ukrainian conflict so as to provide a pretext for an American nuclear attack against Russia — as if Russia doesn’t have even more of a legitimate national-security interest in its Ukrainian neighbor than the U.S. had in its Cuban neighbor in 1962, when we rightly threatened nuclear war over that type of provocation.
- If the next U.S. President protects Obama from criminal prosecution for Ukraine like Obama protected Bush from criminal prosecution for Iraq, then the U.S. is hopelessly a lawless nation, no democracy at all.
- Unfortunately, the nuclear bombs in the war that Obama and the other stooges of America’s aristocracy are building up to, will not be targeted against themselves and their psychopathic (often billionaire) sponsors. Those people will instead have their bomb-shelters, and their corporate jets.
- Oligarchs are foreign to a democracy. Consequently, their servants in government, especially America’s current and former President, are foreign to the U.S. Constitution, and to their Oath of Office, and thus to this country, irrespective of their technical citizenship as ‘American.’ They should both be brought up on charges of treason against the United States of America; for, if they are not, then truly democracy is ended in this country, with no hope of restoration, and America’s Presidents are not subject to American Law, but instead stand above it, beyond it, and immune from it. That makes them dictators, but for whom, and against whom? The record speaks for itself.
- Reader-comments to this commentary on the Global Research facebook page, pro-and-con, are invited regarding this conclusion, especially because a public forum to discuss this severe matter is needed now — a turning-point in American, and (sad to say), perhaps also (if a nuclear attack occurs) a turning-point in global history. That’s the case regardless of which side of this debate one is on. The fundamental character of this country is at stake now. The public should have a say in it (if that’s still even possible, given that 99% of the media are in the hands of oligarchs — the very same aristocrats who benefit from the status-quo).
- Nuclear war is a serious matter, and the American Government must immediately halt their plan to provoke it. The time to force a halt to that is now, or else it will be never. Every step we get closer to nuclear war makes reversing the direction, which is toward war, even more difficult, and less likely, and makes nuclear war even likelier than it was before.
- If the public is to take charge (assuming that doing so is still possible), it will happen sooner rather than later.
- The public discussion will begin now, if it begins at all.
- We’re close to the precipice. Will the public remain quiet?
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.
- Drone strikes and other targeted counterinsurgency programs aimed at capturing or killing “high-value targets” belonging to militant groups could be effective if coupled with larger strategic goals, the CIA believes, but they could also backfire.
- That’s the conclusion the agency came to back in 2009, when it completed a review of the positive and negative consequences of targeted assassinations on counterinsurgency efforts. Published online by WikiLeaks on Thursday, the document – dubbed “Making High-Value Targeting Operations an Effective Counterinsurgency Tool” – details operations and outcomes in countries such as Afghanistan, Iraq, Colombia, Northern Ireland, and more.
- These types of high-value targeting (HVT) operations were said to involve taking aim at individuals whose death, or “removal,” as the CIA termed it, “disproportionately degrade[s] an insurgent group’s effectiveness.”
- While HVT efforts were found to have worked in some cases – the simple fact that they were ongoing significantly reduced Osama bin Laden’s ability to lead Al-Qaeda, the report found – they were not as effective in others. For example, the Taliban was able to keep replenishing leadership positions and keep its structure intact despite “sustained” targeted operations begun in 2001.
- Notably, the review’s release online comes as the Pentagon announced that American airstrikes in Iraq have killed three senior Islamic State military leaders. The United States and its coalition partners are trying to beat back the extremist group in Iraq and Syria, where it has made significant gains over the past year.
- “It is disruptive to their planning and command and control,” Gen. Martin Dempsey said. “These are high-value targets, senior leadership.”
- In the leaked analysis, the CIA said the positive effects of HVT efforts include “eroding insurgent effectiveness,” disrupting strategies and support to the point that the central government gains an advantage, reducing morale and insurgent will, and “fragmenting or splitting the insurgent group.”
- The CIA pointed out that in the case of Osama bin Laden, HVT operations forced the Al-Qaeda leader into hiding and minimized his use of technology. This “affected his ability to command his organization” by making it difficult to meet with other members in person and direct them.
- Also detailed is what the CIA called a “pruning approach,”which involves killing select individuals based on their importance to a group’s functionality rather than simply taking aim at senior leadership. In Iraq, the CIA found that “removing individuals who are important to the organization’s core functions—such as those running its car-bombing networks—has had a more demonstrable effect” when it came to reducing the effectiveness of Al-Qaeda groups.
- This approach could also be used to “protect incompetent leaders or restore them to positions of authority” by killing more effective subordinates
- On the other hand, HVT operations could backfire if they led to local populations sympathizing with insurgents or caused governments to overlook other elements of its strategy. Targeted strikes could also radicalize remaining leadership, potentially opening the group to more extreme members and worldviews. Additionally, even failed or successful attempts could “enhance an insurgent leader’s lore” or have negative effects if civilians are killed.
- When not paired with competent and influential governments, HVT operations were found to be lacking, particularly in the case of the Taliban, the report found. Despite ongoing operations in Afghanistan, corruption in the government and its lack of influence in much of the country caused many problems for counterinsurgency efforts.
- Combined with the ability of Taliban leaders to hide in the mountains of neighboring Pakistan, there were little gains to be had for the Afghan government, NATO, and the US.
- “The Taliban has a high overall ability to replace lost leaders, a centralized but flexible command and control overlaid with egalitarian Pashtun structures, and good succession planning and bench strength, especially at the middle levels,” the report said.
- The review, finalized as President Barack Obama weighed sending more troops to Afghanistan in 2009, emphasized that HVT operations are most effective when paired with a broader counterinsurgency strategy. During the Iraq War, for example, the report stated that targeted strikes did not noticeably slow the momentum of insurgents and Al-Qaeda offshoots until Sunni tribes turned against militants and their base of support crumbled.
- Do you want to know if the stock market is going to crash next year? Just keep an eye on junk bonds. Prior to the horrific collapse of stocks in 2008, high yield debt collapsed first. And as you will see below, high yield debt is starting to crash again. The primary reason for this is the price of oil. The energy sector accounts for approximately 15 to 20 percent of the entire junk bond market, and those energy bonds are taking a tremendous beating right now. This panic in energy bonds is infecting the broader high yield debt market, and investors have been pulling money out at a frightening pace. And as I have written about previously, almost every single time junk bonds decline substantially, stocks end up following suit. So don’t be fooled by the fact that some comforting words from Janet Yellen caused stock prices to jump over the past couple of days. If you really want to know where the stock market is heading in 2015, keep a close eye on the market for high yield debt.
- If you are not familiar with junk bonds, the concept is actually very simple. Corporations that do not have high credit ratings typically have to pay higher interest rates to borrow money. The following is how USA Today describes these bonds…
High-yield bonds are long-term IOUs issued by companies with shaky credit ratings. Just like credit card users, companies with poor credit must pay higher interest rates on loans than those with gold-plated credit histories.
- But in recent years, interest rates on junk bonds have gone down to ridiculously low levels. This is another bubble that was created by Federal Reserve policies, and it is a colossal disaster waiting to happen. And unfortunately, there are already signs that this bubble is now beginning to burst…
Back in June, the average junk bond yield was 3.90 percentage points higher than Treasury securities. The average energy junk bond yielded 3.91 percentage points higher than Treasuries, Lonski says.
That spread has widened to 5.08 percentage points for junk bonds vs. 7.86 percentage points for energy bonds — an indication of how worried investors are about default, particularly for small, highly indebted companies in the fracking business.
- The reason why so many analysts are becoming extremely concerned about this shift in junk bonds is because we also saw this happen just before the great stock market crash of 2008. In the chart below, you can see how yields on junk bonds started to absolutely skyrocket in September of that year…
- Of course we have not seen a move of that magnitude quite yet this year, but without a doubt yields have been spiking. The next chart that I want to share is of this year. As you can see, the movement over the past month or so has been quite substantial…
- And of course I am far from the only one that is watching this. In fact, there are some sharks on Wall Street that plan to make an absolute boatload of cash as high yield bonds crash.
- One of them is Josh Birnbaum. He correctly made a giant bet against subprime mortgages in 2007, and now he is making a giant bet against junk bonds…
When Josh Birnbaum was at Goldman Sachs in 2007, he made a huge bet against subprime mortgages.
Now he’s betting against something else: high-yield bonds.
From The Wall Street Journal:
Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents.
- Could you imagine betting 2 billion dollars on anything?
- If he is right, he is going to make an incredible amount of money.
- And I have a feeling that he will be. As a recent New American article detailed, there is already panic in the air…
It’s a mania, said Tim Gramatovich of Peritus Asset Management who oversees a bond portfolio of $800 million: “Anything that becomes a mania — ends badly. And this is a mania.”
Bill Gross, who used to run PIMCO’s gigantic bond portfolio and now advises the Janus Capital Group, explained that “there’s very little liquidity” in junk bonds. This is the language a bond fund manager uses to tell people that no one is buying, everyone is selling. Gross added: “Everyone is trying to squeeze through a very small door.”
Bonds issued by individual energy developers have gotten hammered. For instance, Energy XXI, an oil and gas producer, issued more than $2 billion in bonds just in the last four years and, up until a couple of weeks ago, they were selling at 100 cents on the dollar. On Friday buyers were offering just 64 cents. Midstates Petroleum’s $700 million in bonds — rated “junk” by both Moody’s and Standard and Poor’s — are selling at 54 cents on the dollar, if buyers can be found.
- So is there anything that could stop junk bonds from crashing?
- Yes, if the price of oil goes back up to 80 dollars or more a barrel that would go a long way to settling things back down.
- Unfortunately, many analysts are convinced that the price of oil is going to head even lower instead…
“We’re continuing to search for a bottom, and might even see another significant drop before the year-end,” said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
- As I write this, the price of U.S. oil has fallen $1.69 today to $54.78.
- If the price of oil stays this low, junk bonds are going to keep crashing.
- If junk bonds keep crashing, the stock market is almost certainly going to follow.
- For additional reading on this, please see my previous article entitled “‘Near Perfect’ Indicator That Precedes Almost Every Stock Market Correction Is Flashing A Warning Signal“.
- But just like in the years leading up to the crash of 2008, there are all kinds of naysayers proclaiming that a collapse will never happen.
- Even though our financial problems and our underlying economic fundamentals have gotten much worse since the last crisis, they are absolutely convinced that things are somehow going to be different this time.
- In the end, a lot of those skeptics are going to lose an enormous amount of money when the dominoes start falling.
- A dangerous new trend is the successful manipulation of the financial markets by the Federal Reserve, other central banks, private banks, and the US Treasury. The Federal Reserve reduced real interest rates on US government debt obligations first to zero and then pushed real interest rates into negative territory. Today the government charges you for the privilege of purchasing its bonds.
- People pay to park their money in Treasury debt obligations, because they do not trust the banks and they know that the government can print the money to pay off the bonds. Today Treasury bond investors pay a fee in order to guarantee that they will receive the nominal face value (minus the fee) of their investment in government debt instruments.
- The fee is paid in a premium, which raises the cost of the debt instrument above its face value and is paid again in accepting a negative rate of return, as the interest rate is less than the inflation rate.
- Think about this for a minute. Allegedly the US is experiencing economic recovery. Normally with rising economic activity interest rates rise as consumers and investors bid for credit. But not in this “recovery.”
- Normally an economic recovery produces rising consumer spending, rising profits, and more investment. But what we experience is flat and declining consumer spending as jobs are offshored and retail stores close. Profits result from labor cost savings from employee layoffs.
- The stock market is high because corporations are the biggest purchases of stock. Buying back their own stock supports or raises the share price, enabling executives and boards to sell their shares or cash in their options at a profitable price. The cash that Quantitative Easing has given to the mega-banks leaves ample room for speculating in stocks, thus pushing up the price despite the absence of fundamentals that would support a rising stock market.
- In other words, in America today there are no free financial markets. The markets are rigged by the Federal Reserve’s Quantitative Easing, by gold price manipulation, by the Treasury’s Plunge Protection Team and Exchange Stabilization Fund, and by the big private banks.
- Allegedly, QE is over, but it is not. The Fed intends to roll over the interest and principle from its bloated $4.5 trillion bond portfolio into purchases of more bonds, and the banks intend to fill in the gaps by using the $2.6 trillion in their cash on deposit with the Fed to purchase bonds. QE has morphed, not ended. The money the Fed paid the banks for bonds will now be used by the banks to support the bond price by purchasing bonds.
- Normally when massive amounts of debt and money are created the currency collapses, but the dollar has been strengthening. The dollar gains strength from the
rigging of the gold price in the futures market. The Federal Reserve’s agents, the bullion banks, print paper futures contracts representing many tonnes of gold and dump them them into the market during periods of light or nonexistent trading. This drives down the gold price despite rising demand for the physical metal. This manipulation is done in order to counteract the effect of the expansion of money and debt on the dollar’s exchange value. A declining dollar price of gold makes the dollar look strong.
- The dollar also gains the appearance of strength from debt monetization by the Bank of Japan and the European Central Bank. The Bank of Japan’s Quantitative Easing program is even larger than the Fed’s. Even Switzerland is rigging the price of the Swiss franc. Since all currencies are inflating, the dollar does not decline in exchange value.
- As Japan is Washington’s vassal, it is conceivable that some of the money being printed by the Bank of Japan will be used to purchase US Treasuries, thus taking the place along with purchases by the large US banks of the Fed’s QE.
- The large private US and UK banks are also manipulating markets hand over fist. Remember the scandal over the banks fixing the LIBOR rate (the London Interbank Borrowing Rate) and the opening gold price on the London exchange. Now the banks have been caught rigging currency markets with algorithms developed to manipulate foreign exchange markets.
- When the banks get caught in felonies, they avoid prosecution by paying a fine. You try doing that.
- The government even manipulates economic statistics in order to paint a rosy economic picture that sustains economic confidence. GDP growth is exaggerated by understating inflation. High unemployment is swept under the table by not counting discouraged workers as unemployed. We are told we are enjoying economic recovery and have an improving housing market. Yet the facts are that almost half of 25 year old Americans have been forced to return to live with their parents, and 30% of 30 year olds are back with their parents. Since 2006 the home ownership rate of 30 year old Americans has collapsed.
The repeal of the Glass-Steagall Act during the Clinton regime allowed the big banks to gamble with their depositors’ money. The Dodd-Frank Act tried to stop some of this by requiring the banks-turned-gambling-casinos to carry on their gambling in subsidiaries with no access to deposits in the depository institution. If the banks gamble with depositors money, the banks’ losses are covered by FDIC, and in the case of bank failure, bail-in provisions could give the banks access to depositors’ funds. With the banks still protected by being “too big to fail,” whether Dodd-Frank would succeed in protecting depositors when a subsidiary’s failure pulls down the entire bank is unclear.
- The sharp practices in which banks engage today are risky. Why gamble with their own money if they can gamble with depositors’ money. The banks led by Citigroup have lobbied hard to overturn the provision in Dodd-Frank that puts depositors’ money out of their reach as backup for certain types of troubled financial instruments, with apparently only Senator Elizabeth Warren and a few others opposing them. Senator Warren is outgunned as Citigroup controls the US Treasury and the Federal Reserve.
- The falling oil price has brought concern that oil derivatives are in jeopardy. Citigroup has a provision in the omnibus appropriations bill that shifts the liability for Citigroup’s credit default swaps to depositors and taxpayers. It was only six years ago that Citigroup was bailed out to the tune of a half trillion dollars. Already Citigroup is back for more while nothing whatsoever is done to bail the American people out of their hardships caused by Citigroup and the other financial gangsters.
- What we are experiencing is not a repeat of the past. The ability or, rather, the audacity of the US government itself to manipulate the major financial markets is new. Can this new trend continue? The government is supposed to be the enforcer of laws against market manipulation but is itself manipulating the markets.
- Governments and economists take their hats off to free markets. Yet, the markets are rigged, not free. How long can stocks stay up in a lackluster or declining economy? How long can bonds pay negative real interest rates when debt and money are rising. How long can bullion prices be manipulated down when the world’s demand for gold exceeds the annual production?
- For as long as governments and banks can rig the markets.
- The manipulations are dangerous. Manipulations blow a bigger bubble economy, and manipulations are now being used by Washington as an act of war by driving down the exchange value of the Russian ruble.
- If every time the stock market tries to correct and adjust to the real economic situation, the plunge protection team or some government “stabilization” entity stops the correction by purchasing S&P futures, unrealistic values are perpetuated.
- The price of gold is not determined in the physical market but in the futures market where contracts are settled in cash. If every time the demand for gold pushes up the price, the Federal Reserve or its bullion bank agents dump massive amounts of uncovered futures contracts in the futures market and drive down the price of gold, the result is to subsidize the gold purchases of Russia, China, and India. The artificially low gold price also artificially inflates the value of the US dollar.
- The Federal Reserve’s manipulation of the bond market has driven bond prices so high that purchasers receive a zero or negative return on their investment. At the present time fear of the safety of bank deposits makes people willing to pay a fee in order to have the protection of the government’s ability to print money in order to redeem its bonds. A number of events could end the tolerance of zero or negative real interest rates. The Federal Reserve’s policy has the bond market positioned for collapse.
- The US government, perhaps surprised at the ease at which all financial markets can be rigged, is now rigging, or permitting large hedge funds and perhaps George Soros, to drive down the exchange value of the Russian ruble by massive short-selling in the currency market. On December 15 the ruble was driven down 19%.
- Just as there is no economic reason for the price of gold to decline in the futures market when the demand for physical gold is rising, there is no economic reason for the ruble to suddenly loose much of its exchange value. Unlike the US, which has a massive trade deficit, Russia has a trade surplus. Unlike the US economy, the Russian economy has not been offshored. Russia has just completed large energy and trade deals with China, Turkey, and India.
- If economic forces were determining outcomes, it would be the dollar that is losing exchange value, not the ruble.
- The illegal economic sanctions that Washington has decreed on Russia appear to be doing more harm to Europe and US energy companies than to Russia. The impact on
Russia of the American attack on the ruble is unclear, as the suppression of the ruble’s value is artificial.
- There is a difference between economic factors causing foreign investors to withdraw their capital from a country, thereby causing the currency to lose value, and manipulation of a currency’s value by heavy short-selling in the currency market. The latter can cause the former also to occur. But the outcome for Russia can be positive.
- No country dependent on foreign capital is sovereign. A country dependent on foreign capital, especially from enemies seeking to subvert the economy, is subject to destabilizing currency and economic swings. Russia should self-finance. If Russia needs foreign capital, Russia should turn to its ally China. China has a stake in Russia’s strength as part of China’s protection from US aggression, whether economic or military.
- The American attack on the ruble is also teaching sovereign governments that are not US vassals the extreme cost of allowing their currencies to trade in currency markets dominated by the US. China should think twice before it allows full convertibility of its currency. Of course, the Chinese have a lot of dollar assets with which to defend their currency from attack, and the sale of the assets and use of the dollar proceeds to support the yuan could knock down the dollar’s exchange value and US bond prices and cause US interest rates and inflation to rise. Still, considering the gangster nature of financial markets in which the US is the heavy player, a country that permits free trading of its currency sets itself up for trouble.
- The greatest harm that is being done to the Russian economy is not due to sanctions and the US attack on the ruble. The greatest harm is being done by Russia’s neoliberal economists.
- Neoliberal economics is not merely incorrect. It is an ideology that fosters US economic imperialism. By following neoliberal prescriptions, Russian economists are helping Washington’s attack on the Russian economy.
- Apparently, Putin has been sold, along with his internal enemies, the Atlanticist integrationists, on “free trade globalism.” Globalism destroys the sovereignty of every country except the world reserve currency country that controls the system.
- As Michael Hudson has shown, neoliberal economics is “junk economics.” But it is also a tool of American financial imperialism, and this makes neoliberal Russian economists tools of American imperialism.
- The remaining sovereign countries, which excludes all of Europe, are slowly learning that Western economic institutions are deceptive and that placing trust in them is a threat to national sovereignty.
- Washington intends to subvert Russia and to turn Russia into a vassal state like Germany, France, Japan, Canada, Australia, the UK and Ukraine. If Russia is to survive, Putin must protect Russia from Western economic institutions and Western trained economists.
- It is too risky for the US to take on Russia militarily. Instead, Washington is using its unique symbiotic relationship with Western financial institutions to attack an incautious Russia that foolishly opened herself to Western financial predation.
Dr. 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. Roberts’ latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West and How America Was Lost.
12.18.14 – Someone Is Lying About Cyber Attack On Sony
- Yesterday, moments before the North Korea “hacking” tragicomedy escalated into full retard mode with Sony pulling The Interview, or a movie that absent the attention would certainly be a flop, Wired released an article titled: “North Korea Almost Certainly Did Not Hack Sony” (title subsequently changed to the one below as can be seen in the URL alias “http://www.wired.com/2014/12/north-korea-did-not-hack-sony-probs“), which however, and for the better, retains its content as it is quite critical in debunking the latest government “certainty.”
- Continue reading here for the full story, because moments after the Wired piece hit, we got this “confirmation” from the NYT:
- It is quite clear that someone is lying (we leave it up to readers to decide who). The question is “why”?
12.18.14 – This Is What Gold Does In a Currency Crisis
- To say that gold is in a bear market is to misunderstand both gold and markets. Gold isn’t an investment that goes up and down. It is money in the most basic store-of-value sense. Most of the time it just sits there, and when its price changes in local currency terms that says more about the local currency than about gold.
- But when currencies collapse, gold shines.
- Consider the above from the point of view of a typical Russian. The ruble is tanking (no need to understand why — all fiat currencies go this way eventually and the proximate cause is almost irrelevant). Russians who trusted their government and kept their savings in, say, a bank account, are losing their shirts. But those who own boring, doesn’t-pay-interest, in-a-bear-market gold have seen their capital appreciate in local currency terms by about 60 percent in just the past month. They’re not “making money,” but they are preserving wealth.
- This is how it has gone always and everywhere when governments have destroyed their currencies. In the Roman Empire, revolutionary France, revolutionary America, most of Latin America in the 20th century, and now big parts of the developing world, local currencies evaporate but gold just sits there, buying the same amount of stuff as ever, impervious to the games governments play.
- It won’t be long before this chart is replicated in a whole lot of other places. But by then it will be too late to prepare. The gold will be gone and those who trusted their governments will have to make do with promises.
- Britain’s oil industry is in a “crisis” and may be “close to collapse,” a senior oil industry expert has said, as the UK’s biggest oil and gas companies continue to cut staff and investment and the price of crude slumps.
- Speaking to the BBC, Robin Allan, chairman of the independent explorers’ association Brindex, echoed warnings made by other figures in the oil industry in the past month, saying that no new projects in the North Sea would be profitable while oil is being traded at below $60 a barrel.
- “It’s almost impossible to make money at these oil prices,” Allan said.
- “It’s close to collapse,” he said. “In terms of new investments – there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone.”
- While Allan said such fluctuations had happened before, he also said more oil workers than usual may be axed, particularly contractors rather than full-time employees.
- UK oil and gas production has declined since 1999, although investment levels have remained high. While the UK is exploring alternative energy options, investment into oil peaked in 2013, at around £13 billion.
- Earlier this year, a study conducted by the UK Department of Business, Innovation & Skills and the oil and gas safety body Optio predicted as many as 35,000 jobs in the sector could be lost within the next five years as oil prices continue to plunge.
- Meanwhile, insolvencies among UK oil and gas companies have trebled this year, with a further £55 billion worth of future oil projects facing cuts or outright cancelation, according to leading UK accountancy firm Moore Stephens.
- However, some analysts believe a decline in oil prices may work in the UK’s favor, particularly in comparison to major oil-producing countries such as Russia and Saudi Arabia.
- “In essence, an oil price fall acts like a tax cut for the economy, but a particularly favorable one in the sense that the burden of lost revenue is primarily borne by the major oil producers such as the OPEC member countries and Russia,” said John Hawksworth, chief economist for PriceWaterhouseCoopers (PwC).
- “Of course, the UK is still a significant oil producer, but we are now a net oil importer, so there should be a net benefit to our economy as a whole, even if there as some losers in the UK oil and gas sector,” he said.
- Despite this, new figures commissioned by BBC News showed Britons were using 10 percent less energy than they were five years ago, despite the British economy growing in real terms.
- According to the report, much of this is due to increased use of energy-saving domestic appliances, as well as an increased use of green energy sources.
- Everyone thought that any major monetary policy surprises and/or capital controls today would come from Putin during his annual press conference. Boy were they wrong: just after 2 am Eastern, none other than the Swiss National Bank joined the ranks of the ECB in scrambling to stem the wave of capital flight, not to mention the cost of money, when it announced it too would start charging customers for the privilege of holding cash in its banks, when it revealed a negative, -0.25% interest rate on sight deposits: a step which according to the SNB was critical in maintaining the 1.20 EURCHF floor.
- From the SNB:
- The Swiss National Bank (SNB) is imposing an interest rate of –0.25% on sight deposit account balances at the SNB, with the aim of taking the three-month Libor into negative territory. It is thus expanding the target range for the three-month Libor to –0.75% to 0.25% and extending it to its usual width of 1 percentage point. Negative interest will be levied on balances exceeding a given exemption threshold.
- The SNB reaffirms its commitment to the minimum exchange rate of CHF 1.20 per euro, and will continue to enforce it with the utmost determination. It remains the key instrument to avoid an undesirable tightening of monetary conditions resulting from a Swiss franc appreciation. Over the past few days, a number of factors have prompted increased demand for safe investments. The introduction of negative interest rates makes it less attractive to hold Swiss franc investments, and thereby supports the minimum exchange rate. The SNB is prepared to purchase foreign currency in unlimited quantities and to take further measures, if required.
The factors from the “past few days” in question that the SNB was envisioning to justify becoming the latest entrant to the NIRP monetary twilight zone: Russian capital flight. Per Bloomberg, “the SNB move follows Russia’s surprise interest-rate increase this week and hints at the investment pressures that resulted after that decision failed to stem a run on the ruble. Swiss officials acted as the turmoil, along with the imminent threat of quantitative easing from the ECB, kept the franc too close to its 1.20 per euro ceiling for comfort.”
- “This is not the magic bullet, but will buy them time,” said Peter Rosenstreich, head of market strategy at Swissquote in Gland, Switzerland. “This will relieve pressure from the floor in the short term, but not in the long term.”
- The franc weakened after the announcement, trading at 1.2045 per euro at 11:08 a.m. in Zurich. Against the dollar it fell to 97.82 centimes.
- To be sure, Russia’s recent shocking rate hike to 17% was a factor in the Swiss decision. Then again to say that a few Russian billionaires took on the SNB and forced it to do a historic monetary policy move would be just a little bit naive. Surely, the reason for the capital flight had much more to do with the capital flight from “everywhere” as a result of the latest market turbulence which has seen a major flight out of risk assets and into fixed income assets, and also safe-haven currencies, at least until Janet Yellen’s “renormalization” statement yesterday which purely coinicdentally had both keywords sought for by algos: “considerable time” and “patient.”
- What was also left unsaid is that the Swiss central bank is also worried about the pressure from the Eurozone as the ECB launches full-blown QE in 2015. And in a purely reflexive fashion, the SNB move also makes it that much more likely that the ECB itself will have to act even further, as central bank actions have now become a tit for tat exchange with other central banks in creeping global capital controls, even if nobody is willing to call it for what it is. One thing is clear: if and when the ECB does more, the SNB will again have no choice but to respond: as Bloomberg strategist Richard Jones writes “SNB’s decision today to introduce negative rates of -0.25% next month may be escalated if external factors like a large scale QE from ECB threatens the EUR/CHF floor, analysts say, adding that FX interventions will likely continue. Jan. 22 start date for SNB’s negative interest on sight deposits coincides with next ECB meeting, increasing the likelihood of QE announcement by the latter next month.”
- In any event, at least the Swiss were kind enough to give the Russians an advance notice that their cash is not welcome in the country. After all Russian billionaires could have been merely “Cyprused”, all over again.
- Finally, here is Goldman’s take on the SNB move:
- Bottom line: The Governing Board of the SNB surprisingly announced this morning that it will introduce a negative rate of -0.25% on sight deposit account balances at the SNB. The SNB’s target range for the three-month Libor was also widened from 0.0% – +0.25% to -0.75% – +0.25%. In our view, today’s rate decision simply underlines the determination of the SNB to enforce the minimum exchange rate target for the CHF against the Euro.
- 1. This morning, the SNB surprisingly announced that, on January 22, it will introduce a negative interest rate of -25bp on reserve holdings from banks at the SNB, above a threshold of 20 times the minimum reserve requirement. The SNB’s target range for the three-month Libor was also widened from 0.0% – +0.25% to -0.75% – +0.25%. Over the last couple of days, the CHF has traded very close to the 1.20 level on the back of rising market volatility. The subsequent demand for safe investments attracted large capital inflows into Switzerland, eventually prompting the SNB to react.
- 2. According to the SNB, the measure is aimed at making investments into CHF less attractive. Although it is only banks that will have to pay the negative deposit rate, banks will pass on, to some extent at least, the negative rates to customers. It is noteworthy in that respect that some German banks – in response to the ECB’s negative rates – have also started charging some clients negative deposit rates.
- 3. It remains to be seen how effective this measure will be and the SNB will continue to rely on FX interventions to defend the minimum exchange rate. But the measure in any case shows the determination of the SNB to maintain the lower bound for the CHF against the Euro.
- American officials investigating the source of the recent Sony hack have determined that North Korea is “centrally involved” in the cyber attack against the studio, the New York Times reported.
- The news comes in the wake of Sony’s decision to cancel the release of its film “The Interview,” which involves a fictional, CIA-sanctioned plot to assassinate North Korean leader Kim Jong-un. The hackers had previously threatened a violent response if the movie was released — recalling the September 11 attacks — and the country’s largest theater chains decided to drop the film from their venues.
- According to CNN, American officials will detail their findings on Thursday.
- Meanwhile, other unnamed officials told NBC News that the source of the cyber attack did not come directly from within North Korea. Instead, investigators believe the individuals responsible were taking orders from North Korea.
- “We have found linkage to the North Korean government,” said a US government source.
- Despite the discovery of such a link, unnamed officials told the New York Times that the White House is still mulling over what type of response to make in public.Some in the Obama administration believe the US should respond forcefully and confront Kim, while others are wary of escalating the situation.
- Additionally, some officials do not want to divulge too many details regarding their investigation, since North Korea’s computer networks are extremely difficult to breach and they don’t want to inadvertently reveal their methods.
- In a report by ABC News, US officials said the government believes that “Bureau 121,” a highly capable North Korean cyber unit, could be behind the attacks. They also said there is evidence indicating the hack was “routed through a number of infected computers in various locations overseas, including computers in Singapore, Thailand, Italy, Bolivia, Poland and Cyprus.”
- Suspicion of North Korea’s involvement comes just a couple of days after the FBI said, “There is no attribution to North Korea at this point.”
- Although there have been numerous embarrassing revelations about Sony’s Hollywood business in the days following the hack, the situation took a dramatic turn on Tuesday when the hackers threatened violence if “The Interview” was released.
- Should the movie come out as scheduled on Christmas Day, “the world will be full of fear,” the hackers wrote on Tuesday.
- “Remember the 11th of September 2001. We recommend you to keep yourself distant from the places at that time,” they said. “Whatever comes in the coming days is called by the greed of Sony Pictures Entertainment.”
- While the Department of Homeland Security continues to say there is “no specific, credible threat information” regarding an attack, the US’ largest theater chains decided to pull the movie.
- On Wednesday, Sony officially canceled its December 25th release.
- “Sony Pictures has been the victim of an unprecedented criminal assault against our employees, our customers, and our business,” the company said in a statement. “Those who attacked us stole ourintellectual property, private emails, and sensitive and proprietary material, and sought to destroy our spirit and our morale – all apparently to thwart the release of a movie they did not like.”
- “We are deeply saddened at this brazen effort to suppress the distribution of a movie, and in the process do damage to our company, our employees, and the American public. We stand by our filmmakers and their right to free expression and are extremely disappointed by this outcome.”
- US President Barack Obama has promised to deepen economic sanctions against Russia by the end of the week, and it turns out he already quietly signed the bill that opens way for more restrictions without further legal hurdle, State Department said.
- The bill was expected to be signed “by the end of the week” despite some concerns about its contents, according to White House press secretary Josh Earnest’s statement in Tuesday. However, the bill was actually signed without any further delay, as confirmed by US State Department spokesperson Jen Psaki.
- “He signed it yesterday,” she stated on Wednesday when asked about the bill dubbed Ukraine Freedom Support Act of 2014.
The bill will see some $350 million in assistance provided to Ukraine.
- Besides the military and non-military assistance to Ukraine, the bill additionally allows further imposition of conditional sanctions on the Russian defense sector, such as penalties on state-owned arms dealer Rosoboronexport as well as connected individuals.
- The bill also envisions $20 million in annual funding in order to support “Russian democracy and civil society organizations” including through increasing “US government-supported broadcasting activities.” Another priority is expanded broadcasting in countries of the former Soviet Union, which will cost another $10 million per year.
- Although the bill does not make sanctions fully obligatory, it allows Obama to decide which parts of the bill to enforce.
- ‘Outdated approach’
The news comes the very same day President Obama made a historic announcement about a “policy change” towards Havana and US plans to lift the sales and exports embargo and establish diplomatic relations with Cuba.
- The decades of “outdated approach” brought no regime change in Cuba which is “still governed by the Castros and the Communist party,” the US president announced.
- “No other nation joins us in these sanctions. And it has had little effect,” Obama said. “We will end an outdated approach that for decades has failed to advance our interest.”
- In the case of Russia, US politicians including Obama have also admitted that restrictions imposed so far were not as effective as expected. However, “every country is hugely different,” Psaki said, apparently implying that the push for “isolation” of Russia may still somehow influence policies and processes within the country.
- The Russian Foreign Ministry meanwhile expressed hope that Washington might finally realize the ineffectiveness of sanction pressure on other countries, as it eventually did in the case of Cuba.
- “It is indicative that the US president has recognized the futility of years of trying to ‘isolate’ Cuba,” the Russian Foreign Ministry said. “We cannot but hope that Washington will be quick to realize the futility of similar sanctions pressure on other countries.”
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