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7.31.14 – CIA Admits Spying On Senate Computers
- It’s not been a good day for the CIA. First, the State Department slams them for brutally treating terror suspects after the 9/11 attacks, noting that “no American is proud” of CIA tactics. And now, as The NY Times reports, an internal investigation has found that its officers improperly penetrated a computer network used by the Senate Intelligence Committee in preparing the report on the CIA’s detention and interrogation program. Of course, this is not the first time the CIA has hacked Senate networks but do not fear American citizenry, CIA Director has apologized for his staff “acting inappropriately” and is setting up an internal accountability board to review the matter.
- The report is damning… (via AP)
- The State Department has endorsed the broad conclusions of a harshly critical Senate report on the CIA’s interrogation and detention practices after the 9/11 attacks, a report that accuses the agency of brutally treating terror suspects and misleading Congress, according to a White House document.
- “This report tells a story of which no American is proud,” says the four-page White House document, which contains the State Department’s preliminary proposed talking points in response to the classified Senate report, a summary of which is expected to be released in the coming weeks.
- The Senate report concludes that CIA’s techniques on al-Qaida detainees captured after the 2001 attacks were far more brutal than previously understood. The tactics failed to produce life-saving intelligence, the report asserts, and the CIA misled Congress and the Justice Department about the interrogation program.
- So it is no wonder the CIA decided it was above the law and hacked the Senate’s PCs… (via NY Times)
- In a statement issued Thursday morning, a C.I.A. spokesman said that agency’s inspector general had concluded that C.I.A. officers had acted inappropriately by gaining access to the computers.
- The statement said that John O. Brennan, the C.I.A. director, had apologized to the two senior members of the Senate Intelligence Committee and that he would set up an internal accountability board to review the matter. The board will be led by former Senator Evan Bayh, Democrat of Indiana.
- The statement gave almost no specifics about the findings of the report, written by David Buckley, the agency’s inspector general.
- Officials said there was a tense meeting earlier this week when Mr. Brennan briefed the two senators — Dianne Feinstein, Democrat of California and Saxby Chambliss, Republican of Georgia. The officials said Ms. Feinstein had confronted Mr. Brennan about past public statements on the issue, in which he defended the agency’s actions.
- Of course Brennan denied it all when Feinstein first lost her temper over it…
- When the C.I.A.’s monitoring of the committee became public in March Mr.
- Brennan said, “When the facts come out on this, I think a lot of people
- who are claiming that there has been this tremendous sort of spying and
- monitoring and hacking will be proved wrong.”
- Nope – you lied… and once again there is no accountability
- * * *
- It appears Ron Paul was right.
- Over the past 6 months, there has been much talk about the strategic proximity between Russia and China, made even more proximal following the “holy grail” gas deal announced in May which would not have happened on such an accelerated time frame had it not been for US escalation in Ukraine.
- And yet little has been said about that other just as crucial for the “new BRIC-centric world order” relationship, that between Russia and India. That is about to change when yesterday the Russian central bank announced that having been increasingly shunned by the west, Russia discussed cooperation with Reserve Bank of India Executive Director Shrikant Padmanabhan. The punchline: India agreed to create a task group to work out a mechanism for using national currencies in settlements. And so another major bilateral arrangement is set up that completely bypasses the dollar.
- From the Russian Central Bank:
- First Deputy Chairman of the Central Bank of the Russian Federation KV Yudaeva and Executive Director of the Reserve Bank of India G. Padmanabhan at the twentieth meeting of the Subgroup on banking and financial issues of the Russian-Indian intergovernmental commission on trade-economic, scientific-technical and cultural cooperation discussed the current state and prospects of cooperation between banks.
- The meeting was attended by representatives of central banks, ministries and agencies, credit organizations in Russia and India.
- During the meeting dealt with the problems faced by the branches and subsidiaries of banks in the two countries and ways of addressing these problems.
- As a priority area discussed the use of national currencies in mutual settlements. Given the urgency of the issue and the interest of commercial structures of the two countries, the meeting decided to establish a working group to develop a mechanism for the use of national currencies in mutual settlements. It will consist of representatives of banks and, if necessary, the ministries and departments of the two countries to coordinate its activities will be central banks of Russia and India.
- What is curious is that now that China has sided firmly with Russia when it comes to geopolitical strategy (not least when it comes to recent development surrounding the downing of flight MH-17, recall “China Blasts “One-Sided Western Rush To Judge Russia” Over MH17″), and thus Russia behind China when it comes to claims by the world’s most populous nation in its territorial dispute with Japan, Japan too is scrambling to secure a major ally in Asia, and it too is trying desperately to get on India’s good side.
- Bloomberg reports that “Japan’s Sasebo naval base this month saw unusual variety in vessel traffic that’s typically dominated by Japanese and U.S. warships. An Indian frigate and destroyer docked en route to joint exercises in the western Pacific.”
- The INS Shivalik and INS Ranvijay’s appearance at the port near Nagasaki showed Japan’s interest in developing ties with the South Asian nation as Prime Minister Shinzo Abe’s government faces deepening tensions with China. Japan for the third time joined the U.S. and India in the annual “Malabar” drills that usually are held in the Bay of Bengal.
- With Abe loosening limits on his nation’s military, the exercises that conclude today showcase Japan’s expanding naval profile as China pushes maritime claims in disputed areas of the East and South China Seas. For newly installed Indian Prime Minister Narendra Modi, Japan’s attention adds to that of China itself, in an opportunity to expand his own country’s sway.
- Japan’s involvement in Malabar underscores its interest in helping secure its trade routes to Europe and the Middle East. The Indian Ocean is “arguably the world’s most important trading crossroads,” according to the Henry L. Stimson Center, a foreign policy research group in Washington. It carries about 80 percent of the world’s seaborne oil, mostly headed to China and Japan.
- “The Japanese are facing huge political problems in China,” said Kondapalli in a phone interview. “So Japanese companies are now looking to shift to other countries. They’re looking at India.”
- So on one hand Japan is rushing to extend a much needed olive branch by the “insolvent western alliance + Japan” to India; on the other Russia is preparing to transact bilterally with India in a way that bypasses the dollar.
- Which means that just as Germany has become the fulcrum and most strategic veriable in Europe (more on this shortly) whose future allegiance to Russia or the US may determine the fate of Europe, so suddenly India is now the great Asian wildcard.
- Perhaps a very important hint of which way India is headed came moments ago from Reuters, which said that India has raised the issue of U.S. surveillance activities in the South Asian nation with Secretary of State John Kerry, the foreign minister said on Thursday. “Yes, I raised this issue (U.S. snooping) with Secretary John Kerry … I have also conveyed to him that this act on the part of U.S. authorities is completely unacceptable to us,” Sushma Swaraj said at a joint news conference in New Delhi. In response, Kerry said: “We (the United States) fully respect and understand the feelings expressed by the minister.”
- Thank you Snowden for helping move the geopolitical tectonic plates that much faster.
- Now let the real courting begin.
- If you like your disposable income… forget it. Health-care insurance premiums for individuals in California rose between 22% and 88% in 2014 from last year, even after the federal health-care overhaul. This has led, as Bloomberg reports, to Proposition 45 – a bill that would grant regulatory say on proposed premium increases. “Unless Proposition 45 is passed we are going to continue to see dramatic year-over-year increases,” warned Insurance Commissioner Dave Jones.
- As Bloomberg reports,
- Insurance Commissioner Dave Jones said, a Democrat, is pushing a statewide ballot measure for November known as Proposition 45 that would give him regulatory say on proposed premium increases. The measure is opposed by insurance companies, which have said that it would actually cause rates to rise while harming the quality of care.
- “Unless Proposition 45 is passed or some other law is enacted to provide health-insurance rate regulation and the requirement that health insurers and HMOs justify their rates, we are going to continue to see dramatic year-over-year increases,” Jones said in a telephone briefing with reporters.
- The California health-care insurance exchange, called Covered California, is expected to announce its 2015 rates later this week. Jones said he expects those increases to be “modest at best” because insurance companies will want to avoid providing voters reason to approve Proposition 45.
- “The insurance commissioner is using this misleading report to promote a ballot measure that would give him vast new powers over health care decisions,” said Robin Swanson, a spokeswoman for the campaign against the initiative, Californians Against Higher Health Care Costs. “Our coalition of doctors, nurses, labor unions and health care providers opposing the measure thinks that giving one politician the power to override decisions made by the state’s successful health exchange is the wrong approach to controlling costs.”
- * * *
- Seems like everything’s going according to plan for Obamacare…
- Argentina’s credit rating was downgraded to “selective default” by Standard & Poor’s as the South American country missed Wednesday’s deadline for a grace period during ongoing negotiations with holdout debt holders.
- Wednesday is the cutoff for Argentina to make good on a $539 million payment to bondholders, which was placed on hold by a US judge’s order tying that payment to ongoing litigation by vulture funds which refused the country’s original cents-on-the-dollar debt restructuring offer.
- Analysts generally do not believe that a default by Argentina will have the same consequences as in 2001.
- “An Argentina default is expected to be short-lived at this point and shouldn’t have any major implication for the country,” said Mauro Roca to Bloomberg, a senior Latin America economist at Goldman Sachs in New York.
- “There’s the expectation that a deal with holdouts will be worked out soon.”
- Moscow has slammed Washington’s allegations that Russia breached the Intermediate-Range Nuclear Forces Treaty, calling the claims unsubstantiated. It added Russia also has complaints about the US’s fulfillment of their obligations under the treaty.
- US claims that Russia violated the Intermediate-Range Nuclear Forces Treaty (INF Treaty) are “just as unsubstantiated as everything that has recently been heard by Moscow coming from Washington, including other issues. There is absolutely no evidence provided to support [these allegations],” Russia’s Foreign Ministry said in a statement Wednesday.
- The ministry said that the problems regarding the obligations under the treaty by both sides are not new.
- “They are well-known by both sides” and need to be worked on continuously, with both countries refraining from loud accusations, the ministry said.
- “This cooperation is all the more important, as we have accumulated a considerable amount of complaints to [be addressed to] the US in the framework of the treaty. In particular, on target missile defense tests similar in characteristics to the short- and intermediate-range missiles and the manufacturing of armed drones, which meet the treaty’s definition of ground-launched cruise missiles,” the ministry said.
- Moscow added that recently the MK 41 Vertical Launching System has come into the spotlight, as the US is planning to deploy those launchers in Poland and Romania as part of its global missile defense shield plan.
- “These systems can launch intermediate-range cruise missiles and their land-based version can be regarded as a direct violation of the INF Treaty,” the ministry said.
- The ministry reiterated that Washington was refusing to listen to Moscow’s calls, instead “only listening to themselves.”
- Russia hopes to receive answers to these “pertinent questions” and to see that the US is ready to work on ensuring the observance of the treaty, the ministry said.
7.30.14 – Six Current Economic Myths And Realities
- The following are six of the most prevalent economic myths that appear time and again in the mainstream media. I will give a brief description of each and a brief description of the economic reality, as seen from an Austrian perspective.
- Myth #1: Increased money leads to economic prosperity.
- This Keynesian myth postulates that increasing aggregate demand through increasing the money supply will lead to more spending, higher employment, increased production, and a higher overall standard of living.
- The reality is that an increase in money leads to malinvestment. The time structure of production is thrown into disequilibrium by encouraging investment in projects more remotely removed in time from final consumption. There are insufficient resources in the economy for the profitable completion of all projects, since individual time preference is unchanged, meaning that there is no increase in savings. When prices rise, due to this unchanged time preference, these projects will be liquidated, revealing the loss of capital. Production will be lower than otherwise. Unemployment will increase while workers adapt to economic reality.
- Myth #2: Manipulating interest rates leads to economic prosperity.
- This is a corollary of Myth #1 but deserves its own discussion. In the Keynesian view lower interest rates always are beneficial; therefore, it is the proper role of the monetary authorities to drive down the interest rate via open market operations.
- The reality is that interest rates are a product of the market, reflecting the interplay of the demand for loanable funds and the availability of loanable funds. Historically high or low interest rates can have multiple causes, none of which are prima facie good or bad. For example, rates can be high because entrepreneurs have highly profitable opportunities due to reduced regulation or a breakthrough in technology. If time preference is unchanged and, therefore, savings is unchanged, the interest rate rises and allocates the scarce savings to the most highly desired ends. Or, interest rates can be low due to a change in time preference that leads to increased savings. If entrepreneurial opportunities are unchanged, interest rates will fall. Likewise, demand for loans can be high while savings is high or vice versa. Manipulating the interest rate truly is an act of fantasy by the monetary authorities, who believe that they can know the impact of billions of ever changing decisions affecting the supply of money and demand for money.
- Myth #3: Lowering the foreign exchange rate of the currency, to give more local currency in exchange for foreign currency, will lead to an export driven economic recovery.
- The reality is that no country can force another to subsidize its economy by manipulating its exchange rate. Giving more local currency subsidizes foreign buyers in the near term, but it creates higher prices in the domestic economy later. Early receivers of the new money–exporters, their employees, their suppliers, etc.–benefit by a transfer of wealth from later receivers of the new money. But as the price level rises from the increase in the domestic money supply, the benefit to foreign buyers evaporates. Then the exporters demand that the monetary authorities conduct another round of exchange rate interventions. The big winners are foreign buyers. Intermediate winners are exporters, but their advantage ends eventually. The losers are non-exporters, especially retired people.
- Myth #4: Money expansion will not cause higher prices.
- Currently the U.S. government is engaged in a propaganda campaign to convince us that it can both monetize the government’s debt and engage in quantitative easing without causing a rising price level.
- The reality is that there is no escaping the fundamentals of economic law in the monetary sphere. Ludwig von Mises and many excellent Austrian economists since, such as Murray N. Rothbard, have explained that the relationship between an increase in money and an increase in the price level is not a mechanical one. Nevertheless, even Mises explained that the basis of all monetary theory is the “Quantity Theory of Money”, that states that there is a positive relationship between the money supply and the price level. In other words, more money eventually leads to higher prices and vice versa. What causes all the confusion is that the price level actually can fall even when the money supply expands, if all of the new money plus some of the existing money stock are hoarded. Mises call this the first stage of the three stages of inflation. The public expects prices to remain the same or even fall, so they do not increase their spending even when the money supply expands. Eventually, though, the public comes to understand that the money supply will keep increasing and that prices will not return to some previous golden age. At this point the public will begin to increase spending to buy at lower prices today rather than higher prices tomorrow. The price level will rise even if the money supply shrinks, because the public spends previously hoarded money faster. This is Mises’ phase two of inflation. In the final stage money loses its value, as the public spends it as fast as possible. This is Mises’ stage three, the “crackup boom”.
- Myth #5: More, better, and more vigorously enforced regulations can prevent loan and investment losses.
- The politicians and their regulatory agencies believe that prior monetary crises were caused by a combination of stupidity, greed, and criminality by bankers and sellers of investments.
- The reality is that no army of regulators armed with the most modern analytical tools and the most powerful means of regulatory enforcement can prevent malinvestment from money supply expansion. The monetary expansion encourages longer term projects for which the cost of money is a major factor in forecasting success. But without an increase in real savings, insufficient resources will ensure that many of these projects will never earn a profit and must be liquidated. Bank and investor losses are inescapable.
- Myth #6: Government can prevent hyperinflation.
- This is a corollary of Myth #4. If our monetary masters believe that money expansion will not cause higher prices, then they believe that they can prevent hyperinflation; i.e., the total destruction of the monetary unit as a universal medium of exchange.
- The reality is that hyperinflation is cause by a loss of confidence in the money unit, which the monetary authorities may be incapable of preventing. Once the panic starts, the demand by the public to hold money falls to zero. Prices skyrocket. Even if the monetary authorities got religion at this point and froze the money supply, the panic will run its course. No one will want to be the last holding worthless paper. More likely, though, the monetary authorities will aid and abet the panic, even if unwittingly, due to political pressure to increase payments to powerful domestic constituencies, such as retirees, the military, the public safety sector, government contractors, etc. This was the case in Revolutionary France, Weimar Germany, and modern day Zimbabwe. The mindset of today’s money masters seems little more advanced.
- I encourage Austrian economists to point out these common myths whenever encountered. I have had success writing letters-to-the-editor of major newspapers. Their editors often seem genuinely pleased to receive a polite letter pointing out the Austrian view. Perhaps it is simply a case of controversy selling newspapers. Furthermore, much business writing often has imbedded Keynesian assumptions that drive the narrative toward government intervention. Most business reporters have no economic training, so Austrians should politely point out these errors, too.
- The voice of Gaza teen blogger Farah Baker, which went viral over the weekend, has been silenced after Israeli bombing took out Gaza’s only power plant. The 16 year old’s live account of Israeli bombing saw her followers go from 4,000 to over 70,000.
- Baker, known as Farah Gazan on Twitter, struck a chord with Twitter users around the world when she live-tweeted her fears and emotions during an Israeli attack.
- Between attacks, Baker uploaded videos and sounds of the bombardment.
- Baker’s poignant insight into the situation on the ground captivated the internet, attracting the attention of American news channel NBC, who interviewed the Palestinian teenager. She described the night of the bombing as the most terrifying in her life.
- However, Baker’s running commentary was cut short Tuesday after the IDF knocked out Gaza’s only power station and electricity in over 20,000 homes.
2nd day of power cut: food in the fridge rotted, water on th verge of force bc we can not run the motor, Mobile Charge almost finished#Gaza
— Guess what (@Farah_Gazan) July 29, 2014
- The IDF’s incursion into Gaza has had a serious effect on the region’s crumbling infrastructure. Following strikes on 13 feeder lines and Gaza’s main electric power plant, at least 90 percent of the electricity is out, resulting in regular blackouts for the region’s 1.8 million-strong population, an official from a local power supplier told Al Jazeera.
- Israel intensified its bombardment of Gaza on Monday following the deaths of 10 Israeli soldiers in cross-border attacks. The Palestinian Health Ministry reports that the death toll in Gaza has now reached over 1,200, with tens of thousands displaced by Israel’s ongoing Operation Protective Edge.
- Paul Craig Roberts – former Assistant Secretary of the Treasury under President Reagan, former editor of the Wall Street Journal, listed by Who’s Who in America as one of the 1,000 most influential political thinkers in the world, PhD economist – wrote an article yesterday about the build up of hostilities between the U.S. and Russia titled, simply: “War Is Coming”. In the article, Roberts notes:
As reported by Tyler Durden of Zero Hedge, the Russian response to the extra-legal ruling of a corrupt court in the Netherlands, which had no jurisdiction over the case on which it ruled, awarding $50 billion dollars from the Russian government to shareholders of Yukos, a corrupt entity that was looting Russia and evading taxes, is telling. Asked what Russia would do about the ruling, an advisor to President Putin replied, “There is a war coming in Europe.” Do you really think this ruling matters?”
- In January, well-known economist Nouriel Roubini tweeted from the gathering of the rich and powerful at the World Economic Forum in Davos:
Many speakers compare 2014 to 1914 when WWI broke out & no one expected it. A black swan in the form of a war between China & Japan?
Both Abe and an influential Chinese analyst don’t rule out a military confrontation between China and Japan. Memories of 1914?
- Billionaire hedge fund manager Kyle Bass writes:
Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.
- Reagan’s head of the Office of Management and Budget – David Stockman – is posting pieces warning of the dispute between the U.S. and Russia leading to World War 3.
- Investment adviser Larry Edelson wrote an email to subscribers entitled “What the “Cycles of War” are saying for 2013″, which states:
Since the 1980s, I’ve been studying the so-called “cycles of war” — the natural rhythms that predispose societies to descend into chaos, into hatred, into civil and even international war.
I’m certainly not the first person to examine these very distinctive patterns in history. There have been many before me, notably, Raymond Wheeler, who published the most authoritative chronicle of war ever, covering a period of 2,600 years of data.
However, there are very few people who are willing to even discuss the issue right now. And based on what I’m seeing, the implications could be absolutely huge ….
- Former Goldman Sachs technical analyst Charles Nenner – who has made some big accurate calls, and counts major hedge funds, banks, brokerage houses, and high net worth individuals as clients – saysthere will be “a major war”, which will drive the Dow to 5,000.
- Veteran investor adviser James Dines forecast a war is epochal as World Wars I and II, starting in the Middle East.
- Economist and investment manager Marc Faber says that the American government will start new wars in response to the economic crisis:
- “The next thing the government will do to distract the attention of the people on bad economic conditions is they’ll start a war somewhere.”
- “If the global economy doesn’t recover, usually people go to war.”
- Martin Armstrong – who has managed multi-billion dollar sovereign investment funds – wrote in August:
Our greatest problem is the bureaucracy wants a war. This will distract everyone from the NSA and justify what they have been doing. They need a distraction for the economic decline that is coming.
- Bad Economic Theories
- What’s causing the slide towards war? We discuss several causes below.
- Initially, believe it or not, one cause is that many influential economists and talking heads hold thediscredited belief that war is good for the economy.
- Therefore, many are overtly or more subtly pushing for war.
- Challengers Give Declining Empires “Itchy Fingers”
- Moreover, historians say that declining empires tend to attack their rising rivals … so the risk of world war is rising because the U.S. feels threatened by the rising empire of China.
- The U.S. government considers economic rivalry to be a basis for war. Therefore, the U.S. is systematically using the military to contain China’s growing economic influence.
- Competition for Resources Is Heating Up
- In addition, it is well-established that competition for scarce resources often leads to war. For example, Oxford University’s Quarterly Journal of Economics notes:
In his classic, A Study of War, Wright (1942) devotes a chapter to the relationship between war and resources. Another classic reference, Statistics of Deadly Quarrels by Richardson (1960),extensively discusses economic causes of war, including the control of “sources of essential commodities.”A large literature pioneered by Homer-Dixon (1991, 1999) argues that scarcity of various environmental resources is a major cause of conflict and resource wars (see Toset, Gleditsch, and Hegre 2000, for empirical evidence).
In the War of the Pacific (1879–1884), Chile fought against a defensive alliance of Bolivia and Peru for the control of guano [i.e. bird poop] mineral deposits. The war was precipitated by the rise in the value of the deposits due to their extensive use in agriculture.
Westing (1986) argues that many of the wars in the twentieth century had an important resource dimension. As examples he cites the Algerian War of Independence (1954–1962), the Six Day War (1967), and the Chaco War (1932–1935). More recently, Saddam Hussein’s invasion of Kuwait in 1990 was a result of the dispute over the Rumaila oil field. In Resource Wars (2001), Klare argues that following the end of the Cold War, control of valuable natural resources has become increasingly important, and these resources will become a primary motivation for wars in the future.
- Former Federal Reserve chairman Alan Greenspan (and many world leaders) admitted that the Iraq war was really about oil, and former Treasury Secretary Paul O’Neill says that Bush planned the Iraq war before 9/11. And see this and this. Libya, Syria, Iran and Russia are all oil-producing countries as well …
- Indeed, we’ve extensively documented that the wars in the Middle East and North Africa are largely about oil and gas. The war in Gaza may be no exception. And see this. And Ukraine may largely be aboutgas as well.
- And James Quinn and Charles Hugh Smith say we’re running out of all sorts of resources … which will lead to war.
Central Banking and Currency Wars
- We’re in the middle of a global currency war – i.e. a situation where nations all compete to devalue their currencies the most in order to boost exports. Brazilian president Rousseff said in 2010:
The last time there was a series of competitive devaluations … it ended in world wartwo.
- Jim Rickards agrees:
Currency wars lead to trade wars, which often lead to hot wars. In 2009, Rickards participated in the Pentagon’s first-ever “financial” war games. While expressing confidence in America’s ability to defeat any other nation-state in battle, Rickards says the U.S. could get dragged into “asymmetric warfare,” if currency wars lead to rising inflation and global economic uncertainty.
- As does billionaire investor Jim Rogers:
Trade wars always lead to wars.
- Given that China, Russia, India, Brazil and South Africa have just joined together to create a $100 billion bank based in China, and that more and more trades are being settled in Yuan or Rubles – instead of dollars – the currency war is hotting up.
- Multi-billionaire investor Hugo Salinas Price says:
What happened to [Libya's] Mr. Gaddafi, many speculate the real reason he was ousted was that he was planning an all-African currency for conducting trade. The same thing happened to him that happened to Saddam because the US doesn’t want any solid competing currency out there vs the dollar. You know Gaddafi was talking about a golddinar.
- Indeed, senior CNBC editor John Carney noted:
Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power? It certainly seems to indicate how extraordinarily powerful central bankers have become in our era.
Robert Wenzel of Economic Policy Journal thinks the central banking initiative reveals that foreign powers may have a strong influence over the rebels.
This suggests we have a bit more than a ragtag bunch of rebels running around and that there are some pretty sophisticated influences. “I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising,” Wenzel writes.
- Indeed, some say that recent wars have really been about bringing all countries into the fold of Western central banking.
- Finally, trend forecaster Gerald Celente – who has been making some accurate financial and geopolitical predictions for decades – says WW3 will start soon.
- Martin Armstrong argued that war plans against Syria are really about debt and spending:
The Syrian mess seems to have people lining up on Capital Hill when sources there say the phone calls coming in are overwhelmingly against any action. The politicians are ignoring the people entirely. This suggests there is indeed a secret agenda to achieve a goal outside the discussion box. That is most like the debt problem and a war is necessary to relief the pressure to curtail spending.
- The same logic applies to Ukraine and other countries.
- Billionaire investor Jim Rogers notes:
A continuation of bailouts in Europe could ultimately spark another world war, says international investor Jim Rogers.
“Add debt, the situation gets worse, and eventually it just collapses. Then everybody is looking for scapegoats. Politicians blame foreigners, and we’re in World War II or World War whatever.”
- Americans Don’t Want War
- Poll after poll shows that the American people don’t want to get involved in any more wars.
- After all, we spent trillions in Iraq and Afghanistan, and Americans are exhausted. Not only does a top Pentagon official say we’re no safer – and perhaps less safe – after 13 years of war, but it has now been shown that war hurts our economy.
- Never-ending wars are also destroying our democratic republic. The Founding Fathers warned against standing armies, saying that they destroy freedom. They were right …
- And they warned against financing wars with debt. But according to Nobel prize winning economist Joseph Stiglitz, the U.S. debt for the Iraq war could be as high as $5 trillion dollars (or $6 trillion dollarsaccording to a study by Brown University.) The U.S. has the largest standing army in history, and treatsanti-war sentiment as terrorism.
- But war is great for the bankers and the defense contractors. And – as discussed above – governments are desperate for war.
- So it’s up to us – the people – to stop wider war.
- Senior U.S. Intelligence Officers: Obama Should Release Ukraine Evidence
- Preface: With the shoot-down of Malaysia Airlines Flight 17 over Ukraine turning a local civil war into a U.S. confrontation with Russia, former high-level U.S. intelligence veterans released a statement today urging President Obama to release what evidence he has about the tragedy and silence the exaggeration and rush to judgment. (The whole post is a must-read; but we at Washington’s Blog have added bolding for emphasis.)
- Signatory Bill Binney – the former senior technical director at the NSA, and a man who battled the Soviet Union for decades – tells Washington’s Blog:
- In my analytic efforts to predict intentions and capabilities down through the years, I always made sure that I had multi-factors verifying what I was asserting. So far, I don’t see that discipline here in this administration or the IC [i.e. the United States intelligence community].
- Posted with permission.
- MEMORANDUM FOR: The President
- FROM: Veteran Intelligence Professionals for Sanity (VIPS)
- SUBJECT: Intelligence on Shoot-Down of Malaysian Plane
- Executive Summary
- U.S.–Russian intensions are building in a precarious way over Ukraine, and we are far from certain that your advisers fully appreciate the danger of escalation. The New York Times and other media outlets are treating sensitive issues in dispute as flat-fact, taking their cue from U.S. government sources.
- Twelve days after the shoot-down of Malaysian Airlines Flight 17, your administration still has issued no coordinated intelligence assessment summarizing what evidence exists to determine who was responsible – much less to convincingly support repeated claims that the plane was downed by a Russian-supplied missile in the hands of Ukrainian separatists.
- Your administration has not provided any satellite imagery showing that the separatists had such weaponry, and there are several other “dogs that have not barked.” Washington’s credibility, and your own, will continue to erode, should you be unwilling – or unable – to present more tangible evidence behind administration claims. In what follows, we put this in the perspective of former intelligence professionals with a cumulative total of 260 years in various parts of U.S. intelligence:
- We, the undersigned former intelligence officers want to share with you our concern about the evidence adduced so far to blame Russia for the July 17 downing of Malaysian Airlines Flight 17. We are retired from government service and none of us is on the payroll of CNN, Fox News, or any other outlet. We intend this memorandum to provide a fresh, different perspective.
- As veteran intelligence analysts accustomed to waiting, except in emergency circumstances, for conclusive information before rushing to judgment, we believe that the charges against Russia should be rooted in solid, far more convincing evidence. And that goes in spades with respect to inflammatory incidents like the shoot-down of an airliner. We are also troubled by the amateurish manner in which fuzzy and flimsy evidence has been served up – some it via “social media.”
- As intelligence professionals we are embarrassed by the unprofessional use of partial intelligence information. As Americans, we find ourselves hoping that, if you indeed have more conclusive evidence, you will find a way to make it public without further delay. In charging Russia with being directly or indirectly responsible, Secretary of State John Kerry has been particularly definitive. Not so the evidence. His statements seem premature and bear earmarks of an attempt to “poison the jury pool.”
- Painting Russia Black
- We see an eerie resemblance to an earlier exercise in U.S. “public diplomacy” from which valuable lessons can be learned by those more interested in the truth than in exploiting tragic incidents for propaganda advantage. We refer to the behavior of the Reagan administration in the immediate aftermath of the shoot-down of Korean Airlines Flight 007 over Siberia on August 30, 1983. We sketch out below a short summary of that tragic affair, since we suspect you have not been adequately briefed on it. The parallels will be obvious to you.
- An advantage of our long tenure as intelligence officers is that we remember what we have witnessed first hand; seldom do we forget key events in which we played an analyst or other role. To put it another way, most of us “know exactly where we were” when a Soviet fighter aircraft shot down Korean Airlines passenger flight 007 over Siberia on August 30, 1983, over 30 years ago. At the time, we were intelligence officers on “active duty.” You were 21; many of those around you today were still younger.
- Thus, it seems possible that you may be learning how the KAL007 affair went down, so to speak, for the first time; that you may now become more aware of the serious implications for U.S.-Russian relations regarding how the downing of Flight 17 goes down; and that you will come to see merit in preventing ties with Moscow from falling into a state of complete disrepair. In our view, the strategic danger here dwarfs all other considerations.
- Hours after the tragic shoot-down on Aug. 30, 1983, the Reagan administration used its very accomplished propaganda machine to twist the available intelligence on Soviet culpability for the killing of all 269 people aboard KAL007. The airliner was shot down after it strayed hundreds of miles off course and penetrated Russia’s airspace over sensitive military facilities in Kamchatka and Sakhalin Island. The Soviet pilot tried to signal the plane to land, but the KAL pilots did not respond to the repeated warnings. Amid confusion about the plane’s identity – a U.S. spy plane had been in the vicinity hours earlier – Soviet ground control ordered the pilot to fire.
- The Soviets soon realized they had made a horrendous mistake. U.S. intelligence also knew from sensitive intercepts that the tragedy had resulted from a blunder, not from a willful act of murder (much as on July 3, 1988, the USS Vincennes shot down an Iranian civilian airliner over the Persian Gulf, killing 290 people, an act which President Ronald Reagan dismissively explained as an “understandable accident”).
- To make the very blackest case against Moscow for shooting down the KAL airliner, the Reagan administration suppressed exculpatory evidence from U.S. electronic intercepts. Washington’s mantra became “Moscow’s deliberate downing of a civilian passenger plane.” Newsweek ran a cover emblazoned with the headline “Murder in the Sky.” (Apparently, not much has changed; Time’s cover this week features “Cold War II” and “Putin’s dangerous game.” The cover story by Simon Shuster, “In Russia, Crime Without Punishment,” would merit an A-plus in William Randolph Hearst’s course “Yellow Journalism 101.”)
- When KAL007 was shot down, Alvin A. Snyder, director of the U.S. Information Agency’s television and film division, was enlisted in a concerted effort to “heap as much abuse on the Soviet Union as possible,” as Snyder writes in his 1995 book, “Warriors of Disinformation.”
- He and his colleagues also earned an A-plus for bringing the “mainstream media” along. For example, ABC’s Ted Koppel noted with patriotic pride, “This has been one of those occasions when there is very little difference between what is churned out by the U.S. government propaganda organs and by the commercial broadcasting networks.”
- “Fixing” the Intelligence Around the Policy
- “The perception we wanted to convey was that the Soviet Union had cold-bloodedly carried out a barbaric act,” wrote Snyder, adding that the Reagan administration went so far as to present a doctored transcript of the intercepts to the United Nations Security Council on September 6, 1983.
- Only a decade later, when Snyder saw the complete transcripts — including the portions that the Reagan administration had hidden — would he fully realize how many of the central elements of the U.S. presentation were false.
- The intercepts showed that the Soviet fighter pilot believed he was pursuing a U.S. spy aircraft and that he was having trouble in the dark identifying the plane. Per instructions from ground control, the pilot had circled the KAL airliner and tilted his wings to order the aircraft to land. The pilot said he fired warning shots, as well. This information “was not on the tape we were provided,” Snyder wrote.
- It became abundantly clear to Snyder that, in smearing the Soviets, the Reagan administration had presented false accusations to the United Nations, as well as to the people of the United States and the world. In his book, Snyder acknowledged his own role in the deception, but drew a cynical conclusion. He wrote, “The moral of the story is that all governments, including our own, lie when it suits their purposes. The key is to lie first.”
- The tortured attempts by your administration and stenographers in the media to blame Russia for the downing of Flight 17, together with John Kerry’s unenviable record for credibility, lead us to the reluctant conclusion that the syndrome Snyder describes may also be at work in your own administration; that is, that an ethos of “getting your own lie out first” has replaced “ye shall know the truth.” At a minimum, we believe Secretary Kerry displayed unseemly haste in his determination to be first out of the starting gate.
- Both Sides Cannot Be Telling the Truth
- We have always taken pride in not shooting from the hip, but rather in doing intelligence analysis that is evidence-based. The evidence released to date does not bear close scrutiny; it does not permit a judgment as to which side is lying about the shoot-down of Flight 17. Our entire professional experience would incline us to suspect the Russians – almost instinctively. Our more recent experience, particularly observing Secretary Kerry injudiciousness in latching onto one spurious report after another as “evidence,” has gone a long way toward balancing our earlier predispositions.
- It seems that whenever Kerry does cite supposed “evidence” that can be checked – like the forged anti-Semitic fliers distributed in eastern Ukraine or the photos of alleged Russian special forces soldiers who allegedly slipped into Ukraine – the “proof” goes “poof” as Kerry once said in a different context. Still, these misrepresentations seem small peccadillos compared with bigger whoppers like the claim Kerry made on Aug. 30, 2013, no fewer than 35 times, that “we know” the government of Bashar al-Assad was responsible for the chemical incidents near Damascus nine days before.
- On September 3, 2013 – following your decision to call off the attack on Syria in order to await Congressional authorization – Kerry was still pushing for an attack in testimony before a thoroughly sympathetic Senate Foreign Affairs Committee. On the following day Kerry drew highly unusual personal criticism from President Putin, who said: “He is lying, and he knows he is lying. It is sad.”
- Equally serious, during the first week of September 2013, as you and President Vladimir Putin were putting the final touches to the deal whereby Syrian chemical weapons would be given up for destruction, John Kerry said something that puzzles us to this day. On September 9, 2013, Kerry was in London, still promoting a U.S. attack on Syria for having crossed the “Red Line” you had set against Syria’s using chemical weapons.
- At a formal press conference, Kerry abruptly dismissed the possibility that Bashar al-Assad would ever give up his chemical weapons, saying, “He isn’t about to do that; it can’t be done.” Just a few hours later, the Russians and Syrians announced Syria’s agreement to do precisely what Kerry had ruled out as impossible. You sent him back to Geneva to sign the agreement, and it was formally concluded on September 14.
- Regarding the Malaysia Airlines shoot-down of July 17, we believe Kerry has typically rushed to judgment and that his incredible record for credibility poses a huge disadvantage in the diplomatic and propaganda maneuvering vis-a-vis Russia. We suggest you call a halt to this misbegotten “public diplomacy” offensive. If, however, you decide to press on anyway, we suggest you try to find a less tarnished statesman or woman.
- A Choice Between Two
- If the intelligence on the shoot-down is as weak as it appears judging from the fuzzy scraps that have been released, we strongly suggest you call off the propaganda war and await the findings of those charged with investigating the shoot-down. If, on the other hand, your administration has more concrete, probative intelligence, we strongly suggest that you consider approving it for release, even if there may be some risk of damage to “sources and methods.” Too often this consideration is used to prevent information from entering the public domain where, as in this case, it belongs.
- There have been critical junctures in the past in which presidents have recognized the need to waive secrecy in order to show what one might call “a decent respect for the opinions of mankind” or even to justify military action.
- As senior CIA veteran Milton Bearden has put it, there are occasions when more damage is done to U.S. national security by “protecting” sources and methods than by revealing them. For instance, Bearden noted that Ronald Reagan exposed a sensitive intelligence source in showing a skeptical world the reason for the U.S. attack on Libya in retaliation for the April 5, 1986 bombing at the La Belle Disco in West Berlin. That bombing killed two U.S. servicemen and a Turkish woman, and injured over 200 people, including 79 U.S. servicemen.
- Intercepted messages between Tripoli and agents in Europe made it clear that Libya was behind the attack. Here’s an excerpt: “At 1:30 in the morning one of the acts was carried out with success, without leaving a trace behind.”
- Ten days after the bombing the U.S. retaliated, sending over 60 Air Force fighters to strike the Libyan capital of Tripoli and the city of Benghazi. The operation was widely seen as an attempt to kill Colonel Muammar Gaddafi, who survived, but his adopted 15-month-old daughter was killed in the bombing, along with at least 15 other civilians.
- Three decades ago, there was more shame attached to the killing of children. As world abhorrence grew after the U.S. bombing strikes, the Reagan administration produced the intercepted, decoded message sent by the Libyan Peoples Bureau in East Berlin acknowledging the “success” of the attack on the disco, and adding the ironically inaccurate boast “without leaving a trace behind.”
- The Reagan administration made the decision to give up a highly sensitive intelligence source, its ability to intercept and decipher Libyan communications. But once the rest of the world absorbed this evidence, international grumbling subsided and many considered the retaliation against Tripoli justified.
- If You’ve Got the Goods…
- If the U.S. has more convincing evidence than what has so far been adduced concerning responsibility for shooting down Flight 17, we believe it would be best to find a way to make that intelligence public – even at the risk of compromising “sources and methods.” Moreover, we suggest you instruct your subordinates not to cheapen U.S. credibility by releasing key information via social media like Twitter and Facebook.
- The reputation of the messenger for credibility is also key in this area of “public diplomacy.” As is by now clear to you, in our view Secretary Kerry is more liability than asset in this regard. Similarly, with regard to Director of National Intelligence James Clapper, his March 12, 2013 Congressional testimony under oath to what he later admitted were “clearly erroneous” things regarding NSA collection should disqualify him. Clapper should be kept at far remove from the Flight 17 affair.
- What is needed, if you’ve got the goods, is an Interagency Intelligence Assessment – the genre used in the past to lay out the intelligence. We are hearing indirectly from some of our former colleagues that what Secretary Kerry is peddling does not square with the real intelligence. Such was the case late last August, when Kerry created a unique vehicle he called a “Government (not Intelligence) Assessment” blaming, with no verifiable evidence, Bashar al-Assad for the chemical attacks near Damascus, as honest intelligence analysts refused to go along and, instead, held their noses.
- We believe you need to seek out honest intelligence analysts now and hear them out. Then, you may be persuaded to take steps to curb the risk that relations with Russia might escalate from “Cold War II” into an armed confrontation. In all candor, we see little reason to believe that Secretary Kerry and your other advisers appreciate the enormity of that danger.
- In our most recent (May 4) memorandum to you, Mr. President, we cautioned that if the U.S. wished “to stop a bloody civil war between east and west Ukraine and avert Russian military intervention in eastern Ukraine, you may be able to do so before the violence hurtles completely out of control.” On July 17, you joined the top leaders of Germany, France, and Russia in calling for a ceasefire. Most informed observers believe you have it in your power to get Ukrainian leaders to agree. The longer Kiev continues its offensive against separatists in eastern Ukraine, the more such U.S. statements appear hypocritical.
- We reiterate our recommendations of May 4, that you remove the seeds of this confrontation by publicly disavowing any wish to incorporate Ukraine into NATO and that you make it clear that you are prepared to meet personally with Russian President Putin without delay to discuss ways to defuse the crisis and recognize the legitimate interests of the various parties. The suggestion of an early summit got extraordinary resonance in controlled and independent Russian media. Not so in “mainstream” media in the U.S. Nor did we hear back from you.
- The courtesy of a reply is requested.
- Prepared by VIPS Steering Group
- William Binney, former Technical Director, World Geopolitical & Military Analysis, NSA; co-founder, SIGINT Automation Research Center (ret.)
- Larry Johnson, CIA & State Department (ret.)
- Edward Loomis, NSA, Cryptologic Computer Scientist (ret.)
- David MacMichael, National Intelligence Council (ret.)
- Ray McGovern, former US Army infantry/intelligence officer & CIA analyst (ret.)
- Elizabeth Murray, Deputy National Intelligence Officer for Middle East (ret.)
- Coleen Rowley, Division Counsel & Special Agent, FBI (ret.)
- Peter Van Buren, U.S. Department of State, Foreign Service Officer (ret)
- Ann Wright, Col., US Army (ret); Foreign Service Officer (ret.)
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