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- On November 22 Russian Foreign Minister Sergey Lavrov told the Council on Foreign and Defense Policy in Moscow that Washington treats Russia as “subhumans” and has forced Russia into a “game of chicken” in order to determine whether Russia will blink or defend its national interests. As Russia will not blink, Washington is driving the world to war.
- Read Lavrov’s address:
- Remarks by Foreign Minister Sergey Lavrov at the XXII Assembly of the Council on Foreign and Defence Policy, Moscow, 22 November 2014
- I’m happy to be at this annual Assembly of the Council on Foreign and Defence Policy (Russian abbreviation SVOP). It is always a great pleasure for me to meet people and feel the intellectual potential, which enables the Council, its leaders and representatives to respond to global developments and analyse them. Their analysis is always free from any hysteria, and its members offer well-grounded and solid arguments, taking a step back, since those caught in the midst of events can hardly adopt an unbiased perspective. We are inevitably influenced by the developments, which makes your observations, analysis, discourse and suggestions even more valuable to us.
- As far as I know, this year’s Assembly will focus on prospects for accelerating domestic growth in Russia. There is no doubt that concerted efforts by our society as a whole to bring about comprehensive economic, social and spiritual development are a prerequisite for making Russia’s future sustainable. That said, by virtue of my professional duties, I have to focus on foreign policy issues, which are still relevant for the Assembly’s agenda, since in this interconnected, globalised world, isolating internal development from the outside world is impossible.
- Russia’s President Vladimir Putin provided a detailed analysis of the international developments at the Valdai Club meeting in Sochi, as well as in his interviews during his trip to Asia. For this reason, I won’t offer any conceptual observations, as everything has already been said.
Nevertheless, I would like to share with you some considerations based on our day-to-day foreign policy efforts. It is not my intention to deliver a comprehensive or clear outlook, since at this stage all forecasts are provisional, no matter who makes them. Moreover, diplomats seek to influence developments as they unfold, not contemplate them.
- Naturally, I will start with Ukraine. Long before the country was plunged into the crisis, there was a feeling in the air that Russia’s relations with the EU and with the West were about to reach their moment of truth. It was clear that we could no longer continue to put issues in our relations on the back burner and that a choice had to be made between a genuine partnership or, as the saying goes, “breaking pots.” It goes without saying that Russia opted for the former alternative, while unfortunately our Western partners settled for the latter, whether consciously or not. In fact, they went all out in Ukraine and supported extremists, thereby giving up their own principles of democratic regime change. What came out of it was an attempt to play chicken with Russia, to see who blinks first. As bullies say, they wanted to Russia to “chicken out” (I can’t find a better word for it), to force us to swallow the humiliation of Russians and native speakers of Russian in Ukraine.
- Honourable Leslie Gelb, whom you know all too well, wrote that Ukraine’s Association Agreement with the EU had nothing to do with inviting Ukraine to join the EU and was aimed in the short term at preventing it from joining the Customs Union. This is what an impartial and unbiased person said. When they deliberately decided to go down the path of escalation in Ukraine, they forgot many things, and had a clear understanding of how such moves would be viewed in Russia. They forgot the advice of, say, Otto von Bismarck, who had said that disparaging the millions-strong great Russian people would be the biggest political mistake.
- President Vladimir Putin said the other day that no one in history has yet managed to subjugate Russia to its influence. This is not an assessment, but a statement of fact. Yet such an attempt has been made to quench the thirst for expanding the geopolitical space under Western control, out of a mercantile fear to lose the spoils of what they across the Atlantic had persuaded themselves was the victory in the Cold War.
- The plus of today’s situation is that everything has clicked into its place and the calculus behind the West’s actions has been revealed despite its professed readiness to build a security community, a common European home. To quote (singer/song-writer) Bulat Okudzhava, “The past is getting clearer and clearer.” The clarity is becoming more tangible. Today our task is not only to sort out the past (although that must be done), but most importantly, to think about the future.
- Talks about Russia’s isolation do not merit serious discussion. I need hardly dwell on this before this audience. Of course, one can damage our economy, and damage is being done, but only by doing harm to those who are taking corresponding measures and, equally important, destroying the system of international economic relations, the principles on which it is based. Formerly, when sanctions were applied (I worked at the Russian mission to the UN at the time) our Western partners, when discussing the DPRK, Iran or other states, said that it was necessary to formulate the restrictions in such a way as to keep within humanitarian limits and not to cause damage to the social sphere and the economy, and to selectively target only the elite. Today everything is the other way around: Western leaders are publicly declaring that the sanctions should destroy the economy and trigger popular protests. So, as regards the conceptual approach to the use of coercive measures the West unequivocally demonstrates that it does not merely seek to change Russian policy (which in itself is illusory), but it seeks to change the regime — and practically nobody denies this.
- President Vladimir Putin, speaking with journalists recently, said that today’s Western leaders have a limited planning horizon. Indeed, it is dangerous when decisions on key problems of the development of the world and humankind as a whole are taken on the basis of short electoral cycles: in the United States the cycle is two years and each time one has to think of or do something to win votes. This is the negative side of the democratic process, but we cannot afford to ignore it. We cannot accept the logic when we are told to resign, relax and take it as a given that everyone has to suffer because there are elections in the United States every two years. This is just not right. We will not resign ourselves to this because the stakes are too high in the fight against terror, the threats of the proliferation of weapons of mass destruction and many bloody conflicts whose negative impact goes far beyond the framework of the corresponding states and regions. The wish to do something to gain unilateral advantages or to endear oneself to the electorate ahead of another election leads to chaos and confusion in international relations.
- We hear the daily repeated mantra that Washington is aware of its own exclusiveness and its duty to bear this burden, to lead the rest of the world. Rudyard Kipling spoke about “the white man’s burden.” I hope that this is not what drives Americans. The world today is not white or black, but multi-coloured and heterogeneous. Leadership in this world can be assured not by persuading oneself of one’ exclusiveness and God-given duty to be responsible for everyone, but only by the ability and craft in forming a consensus. If the US partners committed their power to this goal, this would be priceless, and Russia would be actively helping them.
- However, so far, US administrative resources still work only in the NATO framework, and then with substantial reservations, and its writ does not reach beyond the North Atlantic Alliance. One proof of this is the results of US attempts to make the world community follow its line in connection with the anti-Russian sanctions and principles. I have spoken about it more than once and we have ample proof of the fact that American ambassadors and envoys across the world seek meetings at the highest level to argue that the corresponding countries are obliged to punish Russia together with them or else face the consequences. This is done with regard to all countries, including our closest allies (this speaks volumes about the kind of analysts Washington has). An overwhelming majority of the states with which we have a continuing dialogue without any restrictions and isolation, as you see, value Russia’s independent role in the international arena. Not because they like it when somebody challenges the Americans, but because they realise that the world order will not be stable if nobody is allowed to speak his mind (although privately the overwhelming majority do express their opinion, but they do not want to do so publicly for fear of Washington’s reprisals).
- Many reasonable analysts understand that there is a widening gap between the global ambitions of the US Administration and the country’s real potential. The world is changing and, as has always happened in history, at some point somebody’s influence and power reach their peak and then somebody begins to develop still faster and more effectively. One should study history and proceed from realities. The seven developing economies headed by BRICS already have a bigger GDP than the Western G7. One should proceed from the facts of life, and not from a misconceived sense of one’s own grandeur.
- It has become fashionable to argue that Russia is waging a kind of “hybrid war” in Crimea and in Ukraine. It is an interesting term, but I would apply it above all to the United States and its war strategy – it is truly a hybrid war aimed not so much at defeating the enemy militarily as at changing the regimes in the states that pursue a policy Washington does not like. It is using financial and economic pressure, information attacks, using others on the perimeter of a corresponding state as proxies and of course information and ideological pressure through externally financed non-governmental organisations. Is it not a hybrid process and not what we call war? It would be interesting to discuss the concept of the hybrid war to see who is waging it and is it only about “little green men.”
- Apparently the toolkit of our US partners, who have become adept at using it, is much larger.
- In attempting to establish their pre-eminence at a time when new economic, financial and political power centres are emerging, the Americans provoke counteraction in keeping with Newton’s third law and contribute to the emergence of structures, mechanisms, and movements that seek alternatives to the American recipes for solving the pressing problems. I am not referring to anti-Americanism, still less about forming coalitions spearheaded against the United States, but only about the natural wish of a growing number of countries to secure their vital interests and do it the way they think right, and not what they are told “from across the pond.” Nobody is going to play anti-US games just to spite the United States. We face attempts and facts of extra-territorial use of US legislation, the kidnapping of our citizens in spite of existing treaties with Washington whereby these issues are to be resolved through law enforcement and judicial bodies.
- According to its doctrine of national security, the United States has the right to use force anywhere, anytime without necessarily asking the UN Security Council for approval. A coalition against the Islamic State was formed unbeknownst to the Security Council. I asked Secretary of State John Kerry why have not they gone to the UN Security Council for this.
- He told me that if they did, they would have to somehow designate the status of Syria’s President Bashar al-Assad. Of course, they had to because Syria is a sovereign state and still a member of the UN (no one excluded it from UN membership). The secretary of state said it was wrong because the United States is combating terrorism and the al-Assad regime is the most important factor that galvanises terrorists from around the world and acts as a magnet attracting them to this region in an attempt to overthrow the Syrian regime.
- I believe this is perverse logic. If we are talking about precedents (the United States adheres to case law), it is worth remembering the chemical disarmament in Syria when the Assad regime was a completely legitimate partner of the United States, Russia, the OPCW and others. The Americans maintain talks with the Taliban as well. Whenever the United States has an opportunity to benefit from something, it acts quite pragmatically. I’m not sure why the ideologically-driven position took the upper hand this time and the United States chose to believe that Assad cannot be a partner.
- Perhaps, this is not so much an operation against the Islamic State as paving the way for toppling al-Assad under the guise of a counter-terrorist operation.
- Francis Fukuyama recently wrote the book, Political Order and Political Decay, in which he argues that the efficiency of public administration in the United States is declining and the traditions of democratic governance are gradually being replaced with feudal fiefdom ruling methods. This is part of the discussion about someone who lives in a glass house and throws stones.
- All of this is happening amid the mounting challenges and problems of the modern world. We are seeing a continued “tug of war” in Ukraine. Trouble is brewing on the south border of the EU. I don’t think the Middle Eastern and North African problems will go away all by themselves. The EU has formed a new commission. New foreign actors have emerged, who will face a serious fight for where to send their basic resources: either for the continuation of reckless schemes in Ukraine, Moldova, etc., within the Eastern Partnership (as advocated by an aggressive minority in the EU), or they will listen to the Southern European countries and focus on what’s happening on the other side of the Mediterranean.
- This is a major issue for the EU.
- So far, those who are not guided by real problems, but rather by a desire to quickly grab things from freshly turned up ground. It is deplorable.
- Exporting revolutions – be they democratic, communist or others – never brings any good.
- State, public and civilisational structures are actually disintegrating in the MENA region. The destructive energy released in the process can scorch states that are located far beyond this region. Terrorists (including the Islamic State) are claiming a national status. Moreover, they are already beginning to create quasi-governmental bodies there that engage in the administrative work.
- On this backdrop, minorities, including Christians, are banished. In Europe, these issues are deemed not politically correct. They are ashamed when we invite them to do something about it together at the OSCE. They wonder why would we focus specifically on Christians? How is that special? The OSCE has held a series of events dedicated to keeping memories about the Holocaust and its victims alive. A few years ago, the OSCE started holding events against Islamophobia. We will be offering an analysis of the processes leading to Christianophobia.
- On 4-5 December, OSCE ministerial meetings will be held in Basel, where we will present this proposal. The majority of EU member states elude this topic, because they are ashamed to talk about it. Just as they were ashamed to include in what was then the EU constitution drafted by Valery Giscard d’Estaing a phrase that Europe has Christian roots.
- If you don’t remember or respect your own roots and traditions, how would you respect the traditions and values of other people? This is straightforward logic. Comparing what’s happening now in the Middle East to a period of religious wars in Europe, Israeli political scientist Avineri said that the current turmoil is unlikely to end with what the West means when it says “democratic reforms.”
- The Arab-Israeli conflict is dead in the water. It’s hard to play on several boards at a time. The Americans are trying to accomplish this, but it doesn’t work for them. In 2013, they took nine months to sort out the Israeli-Palestinian conflict. I will not go into the reasons, they are known, but they failed at this as well. Now, they asked for more time to try to achieve some progress before the end of 2014, so that the Palestinians wouldn’t go to the UN and sign the Statute of the International Criminal Court, etc. Suddenly, it transpired that negotiations on Iran are underway. The US State Department dumped Palestine to focus on Iran.
- US Secretary of State John Kerry and I agreed to talk on this subject some time soon. It’s important to understand that you can’t keep the problem of the Palestinian state deeply frozen forever. Failure to resolve it for nearly 70 years has been a major argument of those who recruit extremists in their ranks, “there’s no justice: it was promised to create two states; the Jewish one was created, but they will never create an Arab state.” Used on a hungry Arab street, these arguments sound quite plausible, and they start calling for a fight for justice using other methods.
- Russian President Vladimir Putin said at the Valdai Club meeting in Sochi that we need a new version of interdependence. This was a very topical statement. The leading powers must return to the negotiating table and agree on a new framework that takes into account the basic legitimate interests of all the key parties (I can’t tell you what it should be called, but it should be based on the UN Charter), to agree on reasonable self-imposed restrictions and collective risk management in a system of international relations underpinned by democratic values. Our Western partners promote respect for the rule of law, democracy and minority opinion within countries, while failing to stand up for the same values in international affairs. This leaves Russia as a pioneer in promoting democracy, justice and rule of international law. A new world order can only be polycentric and should reflect the diversity of cultures and civilisations in today’s world.
- You are aware of Russia’s commitment to ensuring indivisibility of security in international affairs and holding it in international law. I won’t elaborate on this.
- I would like to support the point the SVOP has been making that Russia won’t succeed in becoming a major, successful and confident power of the 21st century without developing its eastern regions. Sergei Karaganov was among the first to conceptualise this idea, and I fully agree. Taking Russia’s relations with the Asia Pacific countries to a new level is an absolute priority. Russia worked along these lines at the Beijing APEC meeting and the G20 forum. We will continue moving in this direction in the new environment created by the upcoming launch of the Eurasian Economic Union (EAEU) on 1 January 2015.
- We have been treated as “subhumans.” For over a decade, Russia has been trying to establish partnership ties with NATO through CSTO. These efforts were not just about putting NATO and CSTO “in the same league.” As a matter of fact, CSTO is focused on catching drug dealers and illegal migrants around the Afghan border, and the North-Atlantic Treaty Organisation is the backbone of the international security forces, which, among other things, were tasked with fighting the terrorist threat and eliminating its financing schemes, which involve drug trafficking. We tried everything: we pleaded and then demanded real-time contact, so that once NATO detects a caravan transporting drugs and is unable to stop it, it alerts us across the border, so that this caravan could be intercepted by CSTO forces. They simply refused to talk to us. In private conversations, our NATO well-wishers (and I actually mean this in the positive way) told us that the alliance can’t view CSTO as an equal partner for ideological reasons. Until recently, we saw the same condescending and arrogant attitude with respect to the Eurasian economic integration. And that despite the fact that countries intending to join the EAEU have much more in common in terms of their economies, history and culture than many EU members. This union is not about creating barriers with anyone. We always stress how open this union is expected to be. I strongly believe that it will make a significant contribution to building a bridge between Europe and Asia Pacific.
- I can’t fail to mention Russia’s comprehensive partnership with China. Important bilateral decisions have been taken, paving the way to an energy alliance between Russia and China. But there’s more to it. We can now even talk about the emerging technology alliance between the two countries. Russia’s tandem with Beijing is a crucial factor for ensuring international stability and at least some balance in international affairs, as well as ensuring the rule of international law. We will make full use of our relations with India and Vietnam, Russia’s strategic partners, as well as the ASEAN countries. We are also open to expanding cooperation with Japan, if our Japanese neighbours can look at their national interests and stop looking back at some overseas powers.
- There is no doubt that the European Union is our largest collective partner. No one intends to “shoot himself in the foot” by renouncing cooperation with Europe, although it is now clear that business as usual is no longer an option. This is what our European partners are telling us, but neither do we want to operate the old way. They believed that Russia owed them something, while we want to be on an equal footing. For this reason, things will never be the same again. That said, I’m confident that we will be able to overcome this period, lessons will be learned and a new foundation for our relations will emerge.
- The idea of creating a single economic and humanitarian space from Lisbon to Vladivostok can now be heard here and there and is gaining traction. Germany’s Foreign Minister, Frank-Walter Steinmeier, has said publicly (while we have been saying it for a long time) that the EU and the EAEU should engage in dialogue. The statement President Vladimir Putin made in Brussels in January 2014, when he proposed the first step by launching negotiations on a free-trade zone between the EU and the Customs Union with an eye on 2020, is no longer viewed as something exotic. All of this has already become part of diplomacy and real politics. Although this is so far only a matter of discussion, I strongly believe that we will one day achieve what is called “the integration of integrations.” This is one of the key topics we want to promote within the OSCE at the Ministerial Council in Basel.
- Russia is about to assume BRICS and SCO presidency. The two organisations will hold their summits in Ufa. These are very promising organisations for the new age. They are not blocks (especially BRICS), but groups where members share the same interests, representing countries from all continents that share common approaches regarding the future of the global economy, finance and politics.
- Suddenly the countrywide Ferguson protests, which today had progressed peacefully at least until now, took a turn for the ugly, when as the Star Tribune reported moments ago, A vehicle plowed through a group of demonstrators in Minneapolis several hours ago during a march and rally in the wake of last night’s grand jury decision.
- Star Tribune has the details: “A solidarity rally and march for Michael Brown, who was killed by Ferguson police officer Darren Wilson, was planned for 4:30 p.m. near the Minneapolis Police Department’s 3rd Precinct building at E. Lake Street and Minnehaha Avenue. A Star Tribune reporter who was at the rally says that witnesses say the vehicle started honking at protesters blocking the intersection before running down a woman.”
- Here is more from Star Tribune reporter Libor Jany, who is at the protest and sending updates via Twitter:
- Witnesses say the car, a teal station wagon, started honking at protesters blocking the intersection, before running down down a woman.
— Libor Jany (@StribJany) November 25, 2014
Other demonstrators are now standing, hand in hand, around the woman, who’s being treated by paramedics in the middle of the intersection.
— Libor Jany (@StribJany) November 25, 2014
Witnesses say that the woman’s leg was caught under the car. She’s being wheeled into an ambulance.
— Libor Jany (@StribJany) November 25, 2014
Police say the hit-and-run suspect is in custody.
— Libor Jany (@StribJany) November 25, 2014
And a clip of the dramatic crush-and-run, in which the driver, about to be lynched by the protesters, went pedal to the metal.
- Fast forward to the 1:15 mark
- EU Commission President Jean-Claude Junker has unveiled a $390 billion (€315 billion) investment plan to stave off recession and jumpstart the sluggish European economy.
- The European Commission plan will make billions of euros available for investment projects throughout the 28-nation bloc, with a heavy emphasis on financing for infrastructure, small businesses, education, youth employment, and telecoms.
- Investment will for the most part be private; Juncker foresees €252 billion in new private money. The EU will provide €21 billion for a special fund to be managed by the European Investment Bank (EIB) which it will allow it to give out €63 billion in loans. Of the €21 billion, the Commission is putting up €8 billion from the EU budget and the EIB €5 billion.
Today we turn a page: We are adding the 3rd point of a virtuous triangle: An ambitious +realistic Investment Plan for Europe #investEU
— Jean-Claude Juncker (@JunckerEU) November 26, 201
- The liquidity drive will look to close the major gap in EU investment, which is currently €370 billion below pre-crisis norms.
- “After years of fighting to restore our fiscal credibility and to promote reform, today we are adding the third point of a virtuous triangle: An ambitious, yet realistic ‘Investment Plan for Europe’. Europe needs a kick-start and today the Commission is supplying the jump cables,” Junker said in his speech to the parliament Wednesday.
- Some hypothetical investment projects Juncker mentioned were new state of the art computers in a Greek classroom, new medical equipment in Italian hospitals, and electric motorways in France.
- Growth in the EU has failed to recover after nearly six years of recession, and has left the continent with a huge public debt, high unemployment, and on the verge of deflation.
- So far, the European Central Bank has decided not to print money to fight its way out of the financial crisis as the US did with its monetary stimulus program.
- “Money will not fall from the sky. We do not have a money printing machine,” Juncker said, emphasizing Europe will have to generate real investment, instead of just snapping its fingers and creating more debt.
- The plan is based on three major pillars- first to create the new fund, then set up projects with the money, and then get rid of red tape and regulators in order for the projects to be carried out.
- Juncker says the money is the “missing part of the puzzle” and the third point in the “virtuous” triangle of euro recovery.
- While last night’s events in Ferguson raised many eyebrows over the decision to release the Jury decision late into the night, and even more tempers, as rampant destruction and looting quickly became the means by locals express their indignation with the US judicial system, some say they could have been worse. Still, just to make sure the second night of the Ferguson protests is not a replica of what happened yesterday, moment ago Missouri governor Jay Nixon announced he would dispatch a massive 2,200 national guard troops, up from 700 on Monday night: a presence that is set to make the city resembles an all out warzone. One can only hope the similarities end there.
- From AP:
- Missouri Gov. Jay Nixon says more than 2,200 National Guardsmen will be in place in the region near Ferguson on Tuesday night in the event of more violence.
- He said Tuesday that hundreds more will be deployed to Ferguson, where fires and looting erupted Monday night after word that a grand jury decided not to indict a white police officer who fatally shot 18-year-old Michael Brown.
- The rest will be in a position to respond rapidly, if needed.
- Nixon says 700 guardsmen were in the area on Monday night, when more than a dozen buildings were set on fire and otherwise vandalized.
- Ferguson’s mayor said earlier in the day that the National Guard wasn’t deployed quickly enough as violent protests broke out.
- From the dawn of history, elites have always attempted to enslave humanity. Yes, there have certainly been times when those in power have slaughtered vast numbers of people, but normally those in power find it much more beneficial to profit from the labor of those that they are able to subjugate. If you are forced to build a pyramid, or pay a third of your crops in tribute, or hand over nearly half of your paycheck in taxes, that enriches those in power at your expense. You become a “human resource” that is being exploited to serve the interests of others. Today, some forms of slavery have been outlawed, but one of the most insidious forms is more pervasive than ever. It is called debt, and virtually every major decision of our lives involves more of it. For example, at the very beginning of our adult lives we are pushed to go to college, and Americans have piled up more than 1.2 trillion dollars of student loan debt at this point. When we buy homes, most Americans get mortgages that they can barely afford, and when we buy vehicles most Americans now stretch their loans out over five or six years. When we get married, that often means even more debt. And of course no society on Earth has ever piled up more credit card debt than we have. Almost all of us are in bondage to debt at this point, and as we slowly pay off that debt over the years we will greatly enrich the elitists that tricked us into going into so much debt in the first place. At the apex of this debt enslavement system is the Federal Reserve. As you will see below, it is an institution that is designed to produce as much debt as possible.
- There are many people out there that believe that the Federal Reserve is an “agency” of the federal government. But that is not true at all. The Federal Reserve is an unelected, unaccountable central banking cartel, and it has argued in federal court that it is “not an agency” of the federal government and therefore not subject to the Freedom of Information Act. The 12 regional Federal Reserve banks are organized “much like private corporations“, and they actually issue shares of stock to the “member banks” that own them. 100 percent of the shareholders of the Federal Reserve are private banks. The U.S. government owns zero shares.
- Many people also assume that the federal government “issues money”, but that is not true at all either. Under our current system, what the federal government actually does is borrow money that the Federal Reserve creates out of thin air. The big banks, the ultra-wealthy and other countries purchase the debt that is created, and we end up as debt servants to them. For a detailed explanation of how this works, please see my previous article entitled “Where Does Money Come From? The Giant Federal Reserve Scam That Most Americans Do Not Understand“. When it is all said and done, the elite end up holding the debt instruments and we end up being collectively responsible for the endlessly growing mountain of debt. Our politicians always promise to get the debt under control, but there is never enough money to both fund the government and pay the interest on the constantly expanding debt. So it always becomes necessary to borrow even more money. When it was created back in 1913, the Federal Reserve system was designed to create a perpetual government debt spiral from which it would never be possible to escape, and that is precisely what has happened.
- Just look at the chart that I have posted below. Forty years ago, the U.S. national debt was less than half a trillion dollars. Today, it has exploded up to nearly 18 trillion dollars…
- But the national debt is only part of the story. The big banks which control the Federal Reserve also seek to individually dominate our lives with debt. We have become a “buy now, pay later” society and the results have been absolutely catastrophic. 40 years ago, the total amount of debt in our system was just a shade over 2 trillion dollars. Today it is over 57 trillion dollars…
- The big banks do not loan you money because they want to help you achieve “the American Dream”. The elitists loan you money because it will make them wealthier. For example, if you only make the minimum payment on a credit card each month, you will end up paying back several times as much money as you originally borrowed. It is a very insidious form of debt enslavement that most Americans simply do not understand.
- Meanwhile, the Federal Reserve is also systematically destroying the wealth that you already have. If you try to buck the system and actually save money, the purchasing power of that money is continually being eroded by the Federal Reserve’s inflationary policies. The following chart comes directly from the Federal Reserve and it shows how the value of the U.S. dollar has plummeted over the past 40 years…
- Overall, the U.S. dollar has lost approximately 98 percent of its value since the Fed was first established in 1913.
- Most people seem to assume that if we could just send the “right politicians” to Washington D.C. that we could get our economy back on the right track.
- What those people do not understand is that our system is fundamentally broken. We are trapped in a perpetual debt spiral that is destined to end in a horrifying collapse. Just “tweaking” a few things here or there and adjusting tax rates a bit is not going to fix anything. The vast majority of the “economic solutions” that our politicians talk about are basically equivalent to rearranging the deck chairs on the Titanic.
- And of course the elite don’t want the rest of us to truly understand what is going on. Just think about it. Even though the Federal Reserve is one of the most important institutions in our society, and even though it is at the very heart of our economic system, our kids are taught next to nothing about the Fed in school. The vast majority of them have absolutely no idea where money comes from.
- Isn’t that pathetic?
- But the elite know that if we did understand what they were doing to us that most of us would start to get very upset. Henry Ford, the founder of Ford Motor Company, once said the following…
“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.”
11.24.14 – Ferguson grand jury reaches decision
Ferguson police officer Darren Wilson will not be indicted on any charges for shooting and killing unarmed American teenager Michael Brown, a St. Louis grand jury has decided.There are roughly 150+ protesters currently gathered outside of the Ferguson Police Department.
Live Stream From Ferguson
- A grand jury has reached a decision regarding whether or not to indict Ferguson, Missouri police officer Darren Wilson over the fatal shooting of unarmed teenager Michael Brown, according to the Washington Post.
- The Post reported on Monday afternoon that the grand jury has finally reached a decision after spending weeks receiving testimony and evidence concerning the August shooting death of Brown, 18.
- The decision itself has not yet been announced, but could be made public as early as Monday afternoon.
- Depending on the grand jury’s findings, Wilson, 28, could face charges ranging from manslaughter to first-degree murder.
- Wilson fired six shots at Brown on August 9 in Ferguson, a small town of around 20,000 outside of St. Louis. The absence of charges filed in the initial aftermath and the handling of the situation by local police enforcement quickly propelled the story into the national spotlight, with protests in Ferguson and elsewhere waging a series of demonstrations in recent months.
- Last week, United States Attorney General Eric Holder called for peace from both protesters and police officers ahead of what could likely become a new wave of mass demonstrations.
- In what is hardly a surprising outcome, the parties involved in the Iran nuclear talks have decided it best for all to extend (and pretend) the discussion for another 7 months:
- *IRAN NUCLEAR TALKS EXTENDED UNTIL JULY 1, OFFICIALS SAY
Diplomatic teams will reconvene in December and the US State Department is proclaiming “good progress” in a brief statement. 7 more months of sanctions, a call with Putin today, and OPEC later in the week… one wonders if any of this will be relevant in 7 months. Additionally, it seems beggars can be choosers as P5+1 says Iran can get $700 million per month in frozen assets back…
- As CNN reports,
- One of the primary sticking points in this round of talks has been how to lift sanctions against Iran.
- Hardliners in Iran have insisted that significant sanctions be lifted right away as a sign of good faith from the P5+1 countries. Such penalties, including banking and energy sanctions, would affect tens of billions of dollars.
- Earlier this month, 200 Iranian members of parliament signed a statement demanding that Iranian negotiators “vigorously defend” the country’s nuclear rights and ensure a “total lifting of sanctions.”
- But P5+1 members have said they’d prefer to lift the sanctions incrementally so they can have leverage on Iran and to make sure Tehran makes good on its commitments to whatever deal is reached.
- Reaching a deal by the deadline “would be impossible” based on the differences that remain between negotiators, the Iranian Students’ News Agency reported Sunday, citing an unidentified Iranian official involved in the talks.
- Before Monday’s extension of talks, a U.S. State Department official said negotiators had been “chipping away” at the issues.
- “The focus of discussions remains on an agreement, but we are discussing both internally and with our partners a range of options for the best path forward,” the official said.
- This isn’t the first time negotiations over Iran’s nuclear program have been extended. The previous deadline had been pushed back four months, to this round of talks.
* * *
- It seems, once again, beggars can be choosers and consequences are a thing of the past anyway…
- *IRAN TO GET $700M IN FROZEN ASSETS PER MONTH, U.K. SAYS: AFP
*IRAN SAYS TO RECEIVE $700 MLN/MONTH UNDER EXTENSION: Lavrov
So deal extended, no benefits for West… but you can have some of your funds back… *as long as you keep pressuring OPEC to keep oil prices low (but not too low)
11.24.14 – Swiss Gold Referendum: What It Really Means
- In a few days the Swiss people will go to the polls to decide whether the Swiss central bank is to be required to hold 20% of its reserves in the form of gold. Polls show that the gold requirement is favored by the less well off and opposed by wealthy Swiss invested in stocks. These poll results provide new insight into the real reason for Quantitative Easing by the Federal Reserve and European Central Bank.
- First, let’s examine the reasons for these class-based poll results. The view in Switzerland is that a gold backed Swiss franc would be more valuable, and a more valuable franc would increase the purchasing power of wage earners, thus reducing their living costs. For the wealthy stock owners, a stronger franc would reduce Swiss exports, and less exports would reduce stock prices and the wealth of the wealthy.
- The vote is clearly a vote about income shares between the rich and the poor. The Swiss establishment opposes the gold-backed franc, as does Washington.
- A few years ago the Swiss government, after experiencing a strong rise in the exchange value of the Swiss franc as a result of dollar and euro inflows seeking safety in the Swiss franc, decided to expand the Swiss money supply in line with the foreign currency inflows in order to stop the rise of the franc. The liquidity supplied by the central bank creating new francs has stopped the rise of the franc and supports exports and stock prices. As a vote in favor of a gold backed franc is not in the interest of the elite, it is unclear that the vote will be honest.
- What does this tell us about the Federal Reserve’s policy of Quantitative Easing, which is an euphemism for printing an enormous amount of new dollars?
- The official reason for QE is the Keynesian Phillips Curve claim that economic growth requires mild inflation of 2-3%. This false theory was put to death by the supply-side policy of the Reagan administration, but the misrepresentation of the Reagan administration’s policy by the Establishment has kept the bogus Phillips curve theory alive.
- The claim based in disproven Phillips Curve theory that the Fed’s policy is directed at helping the overall economy is another example of the deception practiced by US authorities. The real purpose of QE is to drive up the wealth and income of the one percent by providing the liquidity that flows into financial asset prices such as stocks and bonds.
- Since the 2008 US recession, skeptics of the Fed’s explanation of QE as support for the US economy have stressed instead that the purpose of US economic policy has been to support the federal deficit at low interest rate costs and to support the balance sheets of the troubled banks by pushing up the prices of debt-related derivatives on the banks balance sheets.
- These have been important purposes, but it now appears that the main purpose has been to make the rich richer. This is why we have a stock market whose high values are not based in fundamentals but, instead, are based on the outpouring of liquidity by the Federal Reserve. As the economic policy of the US is entirely in the hands of the rich, it is not surprising that the rich use it to enrich themselves at the expense of everyone else. The Fed’s monetary policy that enriches the rich by driving up the prices of stocks and bonds also has robbed retirees of hundreds of billions of dollars, perhaps trillions, in lost interest income on their savings.
- As Nomi Prins and Pam Martens have made clear, QE is not over. The Fed is rolling over its interest and principal payments on its $4.5 trillion bond inventory into new bond purchases, and the banks now infused with $2.6 trillion in cash from the Fed are purchasing the bonds in place of the Fed’s QE purchases.
- According to the latest news reports, Mario Draghi, the head of the European Central Bank will print all the money necessary to support financial asset prices., like the Federal Reserve, masks his policy of enriching the rich in Phillips curve terms of driving up inflation in order to support economic growth. Of course, the real purpose is to drive up stock prices.
- Like the Fed, the ECB pretends that the money it prints flows into the economy. But given the poor condition of the banks and potential borrowers, loan volume is low. Instead the money created by central banks flows into paper financial asset prices. Thus, the monetary policy of the Western world is directed toward supporting the wealth of the rich and worsening the inequality in the distribution of income and wealth.
- The rich are far from finished with their pillage. In exchange for campaign donations, state governors are turning over state pension funds to the management of high-fee, high-risk private pension fund managers who do a better job of maximizing their fee income than protecting the nest eggs of retirees.
- Throughout the Western world economic policy is run for the sole benefit of the one percent and at the cost of everyone else. The greed and stupidity of the rich are creating ideal conditions for violent revolution. Karl Marx might yet triumph.
- Over the past several years there has been a long string of deaths in the financial community. Top executives and advisers in the banking industry have been dying off in droves, and often under very peculiar circumstances. This year alone has seen 16 banker deaths, with most of them ruled as suicides. Now we can chalk that number up to 17, with the death of Shawn Miller of Citigroup.
- Miller was found dead in his apartment with his wrists and throat slashed, and the case is now being investigated as a suicide. He was apparently a well known advocate for responsible business practices.
- Police believe Miller killed himself, Detective Martin Speechley, an NYPD spokesman, told Bloomberg News Wednesday. However, the official cause of death will remain a mystery until the autopsy report is concluded. Miller “was highly regarded at Citi and across the financial services industry as a leader and tireless advocate for environmental and sustainable business practices,” top managers at Citigroup wrote in a letter to staff in his department, Bloomberg reported.
“He will be greatly missed by all who knew him,” the letter said.
- Miller had a strong background in advocating corporate social responsibility throughout his career, first at the World Bank and then at Citigroup.
After winning a US government-funded fellowship to study Bengali in Calcutta, India, Miller worked for the International Finance Corp, the investment arm of the World Bank, for nine years, advocating “public consultation” and better cooperation with environmental and human rights groups.
- At Citigroup from 2004, he was responsible for policies drawn up by the Equator Principles Association, a group of 80 lenders worldwide that called for banks to defend environmental and social conditions when financing projects, Bloomberg News reported.
He co-authored standards for “responsible risk decision-making,” according to Citigroup’s website.
- However, not everything is as it seems with the death of Shawn Miller.
- Based on the following “before” and “after” the Ukraine crisis pictures of NATO warplanes located just off the Russian border…
- … one can almost understand why Victoria Nuland was so eager to tell the EU to “fuck off” in her successful attemp to foment Ukraine unrest leading to the overthrow of ex-president Yanukovich, and destabilize the region, giving NATO a pretext for a major arms build up on the other side of the Russian border.
- Per CNN, “There used to be only four jets ready to intercept Russian planes that crossed into European airspace. Now there are 18.” And rising.
- As for what the US response would be if Russia were to park a few squadrons of Mig-35s in Cuba, Canada and Mexico, we leave that to the reader’s imagination.
- The parliament of Afghanistan approved an agreement that allows troops of the NATO-led coalition to say in the country beyond 2014. The agreement was suspended in mid-air for months, as former President Hamid Karzai refused to sign it during his term.
- The new agreement, ratified Sunday, allows the ISAF to maintain a total of 12,000 troops in Afghanistan next year. After a 152-5 vote, Nazifullah Salarzai, spokesman for Afghan President Ashraf Ghani, said the foreign troops will “train, advise and assist Afghan security forces.”
- “Afghan forces are responsible for the security and defense of the Afghan people, and in the fight against international terrorism and training of our national security forces we count on the support and assistance of our international partners,” he said, AP reported.
- Ghani signed the deal with NATO immediately after taking office in September, following weeks of squabbling over the election results. His predecessor, Hamid Karzai, repeatedly refused to sign the deal in the latter part of his presidency, sparking periodic quarrels with Washington.
- In ratifying the deal, Afghan MPs have not mentioned the possibility of foreign troops taking combat mission against Taliban fighters. A secret order extending the direct combat role for US troops was signed by President Barack Obama, according to a New York Times report.
- Publicly, Washington said the US troops would not be sent into battlefield operations anymore and their engagement would be limited to training of Afghan security forces and reconnaissance missions.
- Turkish protesters have rallied against the visit of US Vice President Joe Biden under banners saying ‘Yankee Go Home’. In Istanbul Biden has been encouraging Europe to reduce energy dependence on Russia and announced aid to Syrian refugees.
- Around 300 people chanting “Biden get out. The country is ours,” took to the streets in Istanbul on Saturday. The event had been organized by the Youth Association of Turkey which also “greeted” three US Navy sailors last week stating a similar “Yankee, go home!”.
- Biden was lucky not to witness the protests himself, as the sailors last week were doused in paint meant to symbolize blood while calling the victims “murderers.”
- Speaking at the Atlantic Council’s energy security summit in Istanbul on Saturday, Biden called on Europe to continue diversifying its energy supplies to reduce dependence on Russia.
- “Now, now, now is the time to act,” Biden said according to AP. “We have been aware that this single source of energy has been a problem for a long time… But my message is not that Europe can or should do away with Russian imports.”
- “Russia can and should be a player, but Russia has to play by the rules,” Biden stated, while Turkish PM Ahmet Davutoglu said vaguely that “energy is a tool for peace.”
- Students staged the protest as Biden was meeting with Turkish President Recep Tayyip Erdogan after the summit and announced nearly $135 million of extra humanitarian aid to the country to cope with the influx of civilians on account of ongoing turmoil in neighboring Syria.
- Turkey has some 1.6 million refugees within its borders from Syria. Among them are more than 190,000 Syrians from Kobani which has been the site of ongoing battles between predominantly-Kurdish forces and Islamic State militants who have been attempting to seize the area.
- Biden told reporters that he had spoken at length with Turkish President Recep Tayyip Erdogan about the situation in Iraq and Syria and affirmed that the US-Turkey relationship is “as strong as it has ever been.”
- “We need Turkey, and I think that Turkey believes that it needs us as well,” he said. Turkey has been somewhat reluctant to fully engage against the Islamic State. Erdogan has resisted over fears of empowering Kurdish factions in his own country that could push for independence.
- Biden also stated that the status of Syrian President Bashar al-Assad was discussed.
- “On Syria, we discussed … not only to deny ISIL a safe haven and roll back and defeat them, but also strengthen the Syrian opposition and ensure a transition away from the Assad regime,” Biden stated.
- On November 15, the US and Turkey agreed on plans to train 2,000 members of the Free Syrian Army (FSA) on Turkish territory, but the sides failed to agree on the question of training Kurdish groups, which Ankara has labeled members of a terrorist organization.
- he Federal Bureau of Investigation has dispatched 100 agents to the St. Louis, Missouri area ahead of an expected grand jury decision over whether to bring charges against Darren Wilson, the Ferguson, Missouri police officer who killed unarmed teenager Michael Brown in August.
- The move underscores the extent to which the Obama administration is taking a leading role in the police crackdown in Ferguson, coordinating behind the scenes with state and local officials.
- On Friday evening, CBS News reported that two men had been arrested by FBI agents in a sting operation for allegedly “buying explosives to be used during protests.” The two men are allegedly members of the New Black Panther Party. These arrests and the dispatch of FBI agents to the area have the aim of intimidating and terrorizing the population into accepting the decision of the grand jury, which is broadly expected not to bring charges against Wilson.
- An intelligence bulletin from the FBI to local police departments earlier this week warned that “extremists” are planning to carry out “attacks” against “critical infrastructure” in connection with the grand jury decision. ABC News has reported, based on undisclosed sources, that the FBI has set up a temporary field office to coordinate its activities.
- As part of the nationally coordinated campaign, ABC News aired an excerpt of a television interview with President Barack Obama Friday evening in which he warned demonstrators to “keep protests peaceful.”
- “This is a country that allows everybody to express their views,” Obama said, “Allows them to peacefully assemble, to protest actions that they think are unjust. But using any event as an excuse for violence is contrary to rule of law and contrary to who we are,” Obama told reporter George Stephanopoulos.
- These remarks parrot the standard line used by the political establishment to justify the police crackdown against demonstrators: While “peaceful” protests are acceptable, these protests are being co-opted by “violent” and “extremist” elements, sometimes denounced as “outside agitators,” who are intent on using the demonstrations as an excuse to break the law.
- This creates the fraudulent justification for the state to respond to peaceful demonstrations with massive police repression, on the grounds that “violent” and “extremist” elements forced them into taking such actions. In reality, it is the government, not demonstrators, that is the instigator of violence. In August, police responded to peaceful protests against police violence with tear gas, rubber bullets and mass arrests of protestors and journalists.
- Similar plans are in the works for responding to the grand jury announcement, which is expected within days. Hundreds of National Guard personnel are already being deployed to the region following the declaration of a state of emergency by Governor Jay Nixon on Monday, and area police are switching to twelve-hour shifts beginning this weekend.
- Police carried out arrests against protestors for the second night in a row Thursday evening, chasing demonstrators into a parking lot considered to be a “safe zone” and detaining individual protestors.
- Also on Friday, Attorney General Eric Holder announced he was issuing new guidelines for police, outlining rules on “How to Maintain Order During First Amendment-Protected Events.” The basic theme of Holder’s remarks was that there exist two types of political opposition, one legitimate and another illegitimate. Even the title of the announcement expresses the conception that some events are “First Amendment-protected” while others are not.
- “Over the past few months,” Holder said, “we’ve seen demonstrations and protests that have sought to bring attention to real and significant underlying issues involving police practices, implicit bias, and pervasive community distrust. And in most cases, these demonstrations have been both meaningful and responsible, and have brought vital issues to the attention of the public at large.”
- But what about concerns that are not aimed at overcoming “community distrust,” or do not advocate trivial changes in police practices, but rather contradict the fundamental interests of the state? What about the demand that killer cops be prosecuted, or that the government stop spying on the people, prosecute officials responsible for torture, and end the bloody and disastrous wars into which the US population has been dragged?
- These, by implication, are not “meaningful and responsible.” They are therefore invalid and not under the purview of “First Amendment-protected” demands. Anyone making such demands, it is implied, falls under the FBI’s definition of a “violent extremist” and forfeits the rights enumerated in the US Constitution.
- Holder, echoing Obama, also called on protesters to “adhere to non-aggression and non-violence.” It is worth noting that the US military-intelligence apparatus is the greatest purveyor of violence all over the world. Holder himself will go down in history as the attorney general who spelled out the doctrine that the US government has the right to assassinate American citizens, both abroad and within the borders of the United States, without due process.
- What is becoming increasingly clear is that these extrajudicial powers are being asserted by the federal government for use not primarily against Islamic fundamentalists, but against any social movement that makes demands that the government does not accept as “meaningful and responsible.”
- Washington and its allies remain in contact on further restrictive measures they want to impose on Russia, the US State Department has announced.
- “We will increase the costs to Russia if it doesn’t take steps on its own,” Jeff Rathke, a spokesperson for the US State Department said at a press briefing Friday, adding that the United States is “actively discussing” the matter with its “European and international partners”.
- “We have a broad understanding and similar point of view with our European partners with respect to steps Russia needs to take, and the ways in which the costs to Russia should increase if they fail to abide by the agreements,” Rathke stressed, adding that the United States and the European Union “remain on the same page” on the issue.
- Rathke emphasized that the United States will continue to sanction Russia unless it changes its position with regard to Ukraine.
- “There is a continuing ratcheting of the pressure, and raising of the costs,” Rathke said, adding that “that’s going to continue” until Russia changes course.
- In October US Vice President Joe Biden stated that the United States and US President Barack Obama personally forced EU members to introduce sanctions against Russia.
- The West has imposed several rounds of restrictive measures on Russia over its alleged involvement in the Ukrainian crisis, a claim Moscow has repeatedly denied.
- Moscow has stressed that sanctions “threaten international peace and stability” and run counter to the principles of international law.
- In a response to the imposed sanctions, Russia has introduced a ban on certain food imports from the European Union, the United States, Australia, Canada and Norway.
- Are you in better shape financially than you were last Thanksgiving? If so, you should consider yourself to be very fortunate because most Americans are not. As you chow down on turkey, stuffing and cranberry sauce this Thursday, please remember that there are millions of Americans that simply cannot afford to eat such a meal. According to a shocking new report that was just released by the National Center on Family Homelessness, the number of homeless children in the U.S. has reached a new all-time high of 2.5 million. And right now one out of every seven Americans rely on food banks to put food on the table. Yes, life is very good at the moment for Americans at the top end of the income spectrum. The stock market has been soaring and sales of homes worth at last a million dollars are up 16 percent so far this year. But most Americans live in a very different world. The percentage of Americans that are employed is about the same as it was during the depths of the last recession, the quality of our jobs continues to go down, the rate of homeownership in America has fallen for seven years in a row, and the cost of living is rising much faster than paychecks are. As a result, the middle class is smaller this Thanksgiving than it was last Thanksgiving, and most Americans have seen their standards of living go down over the past year.
- In 2014, there are tens of millions of Americans that are anonymously leading lives of quiet desperation. They are desperately trying to hold on even though things just keep getting worse. For example, just consider the plight of 49-year-old Darrell Eberhardt. Once upon a time, his job in a Chevy factory paid him $18.50 an hour, but now he only makes $10.50 an hour and he knows that he probably would not be able to make as much in a new job if he decided to leave…
For nearly 20 years, Darrell Eberhardt worked in an Ohio factory putting together wheelchairs, earning $18.50 an hour, enough to gain a toehold in the middle class and feel respected at work.
He is still working with his hands, assembling seats for Chevrolet Cruze cars at the Camaco auto parts factory in Lorain, Ohio, but now he makes $10.50 an hour and is barely hanging on. “I’d like to earn more,” said Mr. Eberhardt, who is 49 and went back to school a few years ago to earn an associate’s degree. “But the chances of finding something like I used to have are slim to none.”
- Of course you can’t support a family on $10.50 an hour.
- You can barely support one person on $10.50 an hour.
- But there are many men out there that would absolutely love to switch positions with Darrell Eberhardt. At this point, one out of every six men in their prime working years (25 to 54) does not have a job. That is an absolutely crazy number.
- And of course just because you “have a job” does not mean that things are going well. The number of Americans that are “working part-time involuntarily” has risen by over 50 percent since the beginning of the last recession. There are millions of hard working Americans that would love to get a full-time job if they could land one. But these days “decent jobs” are in short supply.
- For example, CNN recently profiled the story of college graduate Meghan Brachle…
Meghan would love to be a music teacher or play full-time in an orchestra. She studied music at Loyola University in New Orleans and plays the flute.
Instead, Meghan works a slew of part-time jobs and receives no benefits.
She is a cashier at Whole Foods, a substitute teacher, a flute tutor and an administrative assistant at a non-profit.
- Even with all of her hard work, Brachle and her husband often really struggle to pay the bills…
With inconsistent hours, Meghan monthly income fluctuates between $1,000 and $3,000. Even with her husband’s teaching salary, the couple sometimes struggles to cover the $3,600 of monthly expenses they have.
“It’s very stressful,” Meghan, a college graduate, says. “I think about all the job applications I’ve turned in and all the interviews I’ve been on and all the other people who are in the same situation, looking for those same [full-time] jobs. It’s frustrating.”
- Sadly, a lot of these part-time employers know that their employees desperately need these jobs and are using that leverage to treat them very poorly.
- For example, it is being reported that any KMart employees that do not show up for work on Thanksgiving will be automatically fired.
- What kind of nonsense is that?
- And around the country at Wal-Mart stores, food drives are being held for “needy employees“.
- So why wouldn’t Wal-Mart just pay their workers enough so that they could afford to take care of themselves in the first place?
- Most people don’t realize this, but approximately one out of every four part-time workers in America is currently living below the poverty line. Many of them are working as hard as they can and still can’t make enough to take care of themselves.
- Meanwhile, our paychecks are getting stretched further and further with each passing month.
- When you don’t make much money, every dollar is precious. And when food prices go up substantially, it can be very painful. Unfortunately, that is precisely what is happening right now…
- -From September to October, the price of a pound of Turkey rose from $1.58 to $1.66. That represents a 5.2 percent price increase in just one month.
- -The price of a pound of ground beef has just risen to a brand new record high of $4.15 a pound, and more price increases are on the way. The U.S. Department of Agriculture is projecting that U.S. beef production will drop by another 1 billion pounds next year due to a variety of factors including the horrific multi-year drought out west.
- -The entire planet is bracing for a huge chocolate shortage, and this threatens to push the price of chocolate beyond the reach of many American families…
Start hoarding those Hershey’s Kisses and stockpile your Snickers: The world could soon experience a chocolate shortage.
Mars Inc. and Barry Callebaut, two of the world’s largest chocolate makers, say that’s the path we’re headed down. They cite a perfect storm of factors: Less cocoa is being produced as more and more people are devouring chocolate.
In 2013, consumers ate about 70,000 metric tons more cocoa than was produced, The Washington Post reports, and that deficit could go up to 1 million metric tons by 2020. The Ivory Coast and Ghana produce more than 70 percent of the world’s cacao beans, and both countries are experiencing dry weather that limits growth. To make things worse, a fungal disease called frosty pod has destroyed 30 to 40 percent of global cocoa production.
- As a result of all of the things that I have just discussed above, more Americans than ever are being forced to turn to the government for assistance. Today, the number of Americans getting a check from the government each month is at an all-time high, and at this point Americans collectively get more money from the government than they pay in taxes.
- The monetary tectonic plates are shifting, and predicting the next global financial earthquake is relatively easy.
- I recently suggested that the devaluation of the yen was Japan’s Monetary Pearl Harbor: a direct attack on the currencies of its major trading partners: the euro (European Union), the won (South Korea), the Australian dollar (AUD) and the U.S. dollar (USD), which affects both the U.S. and China since China’s currency, the renminbi, is pegged to the USD.
- Though there have been no overt (that is to say, public) counter-attacks, this may not reflect monetary peace so much as an undeclared war. Correspondent Mark G. observed that the current geopolitical backdrop is considerably more unsettled than the relatively benign global chessboard in 2008:
- “The Eurozone and the Pacific Rim now have a pair of regional wars being fought out primarily by financial and monetary means. We can infer that the major central banks won’t be anywhere near as cooperative during a crisis as they were in 2008.”
- While the American-European financial sanctions against Russia and Russia’s counter-moves are being waged in public, the public response of the Korean and Chinese central banks to Japan’s massive devaluation has been limited to grumbling.
- But it is unlikely that other central banks are limiting their response to Japan’s aggressive devaluation to words.
- Let’s start by noting that central banks play two games: one is pure public relations: marionettes on strings beat deflation with sticks and declare they’ll save financial parasites with “whatever it takes” monetary policies.
Meanwhile, their actions may be mere shadows of the bold policies being trumpeted, or they may be extremes nobody dares make public, for example the Federal Reserve’s $16 trillion bailout of literally the entire Western banking sector in the last Global Financial Meltdown.
- The U.S. Fed has remained mute, but the yen devaluation has destabilized the global monetary order, whether the Fed acknowledges it publicly or not.
- Unsurprisingly, central bank public statements don’t mention that competing devaluations share certain characteristics with circular firing squads. Beggar thy neighbor policies destabilize currency flows, and from there, imports and exports, and from there, domestic regimes.
- Is there a beneficiary of devaluations and shadow currency wars? It’s not too difficult to imagine gold will eventually be revalued to reflect the decline in purchasing power of devalued currencies. It’s also not too difficult to anticipate capital flows into whatever currency isn’t being actively devalued–for example, the U.S. dollar.
- One peculiar consequence of choosing not to devalue one’s currency is the resulting inflows of capital fleeing devaluing currencies act as a form of quantitative easing: some of that capital flows into Treasury bonds, effectively replacing the Federal Reserve’s QE bond purchases.
- The monetary tectonic plates are shifting, and predicting the next global financial earthquake is relatively easy. Predicting the timing and the winners–now that’s tricky.
- A week ago, we penned “The Real Reason Why Germany Halted Its Gold Repatriation From The NY Fed”, in which we got, for the first time ever, an admission by an official source, namely the bank that knows everything that takes place in Germany – Deutsche Bank – what the real reason was for Germany’s gold repatriation halt after obtaining a meager 5 tons from the NY Fed:
… the gold community paid great attention to the decision of the German Bundesbank to “bring German gold home”. At the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties. Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports. In the early 2000s, the Bundesbank incrementally repatriated 930 tonnes of German gold held by the Bank of England.
- Some took offense with this, pointing out, accurately, that the gold held at the NY Fed in deposit form for foreign institutions had continued to decline into 2014 despite the alleged German halt. Well, today we know the answer: it wasn’t Germany who was secretly withdrawing gold from the NYFed contrary to what it had publicly disclosed.
- It was the Netherlands.
- This is the stunning statement made by the Dutch Central Bank earlier today, and which, all compliments to China’s rate cut, is truly the biggest news of the day, as it shows that one doesn’t need a referendum to repatriate their gold, nor does one run into logistic or diplomatic problems if one is truly set on procuring their physical.
- As to why the DNB decided it was time to cut its gold held at the NY Fed by 122 tons? “”It is no longer wise to keep half of our gold in one part of the world,” a DNB spokesman told Telegraaf. “Maybe it was desirable during the Cold War, but not now.”
- From the source:
De Nederlandsche Bank (DNB) has adjusted its gold stock location policy and has shipped gold from the United States to the Netherlands to spread its gold stock in a more balanced way.
Under the previous policy, 11% of the gold stock was located in the Netherlands, 51% in the United States, with the remainder held in Canada (20%) and the United Kingdom (18%). Under the new policy, the breakdown by location is as follows: 31% in Amsterdam, 31% in New York, with the relative holdings in Ottawa and London remaining unchanged at 20% and 18%, respectively. Following this adjustment, DNB is in line with other central banks holding a greater part of their gold stock in their own countries. Beyond realising a more balanced distribution of the gold stock across the different locations, this may also have a positive effect on public confidence.
Changing the distribution of the gold holdings across the different locations is not without precedent. From the end of the Second World War until the early 1970s, for example, DNB increased its gold reserves following the Bretton Woods Accord, mainly in New York. Since then, there have been other movements in DNB’s gold stock. The main reasons for this being the gold sales in the past few decades and the closure of the vaults of the Reserve Bank of Australia, as a result of which DNB shipped gold from Australia to the United Kingdom in 2000.
- Sure enough, AP confirmed:
The Dutch Central Bank says it has recently shipped 122.5 tons of gold worth around 4 billion euros ($5 billion) from safekeeping in New York back to its headquarters in Amsterdam.
In a statement Friday morning the bank said that its 612.5-ton national gold reserve is now divided 31 percent in Amsterdam, 31 percent in New York, 20 percent in Ottawa, Canada and 18 percent in London.
“With this adjustment the Dutch Central Bank joins other banks that are keeping a larger share of their gold supply in their own country,”the bank said in a statement. “In addition to a more balanced division of the gold reserves...this may also contribute to a positive confidence effect with the public.”
- This is how the Old and New gold allocation of the Dutch Central Bank look currently:
- Note: the reallocation has already taken place, and is not – like Germany – subject to a 5 year period during which the NY Fed is expected to recoup the gold. So it can be done!?
- As to when it was done, here is the NY Fed’s monthly reports of gold deposits by foreign entities: here we can see that while the 5 tons outflow in 2013 was most likely Germany, the recent surge in gold repatriation from Liberty 33 was the Netherlands. That said, only 57.5 tons of NY deposits gold has been officially repatriated through September, which means the October update, when it comes out, will be a doozy.
- Some more details from the Dutch Telegraaf, google-translated:
In the vaults at the Amsterdam Frederiksplein was until recently 11% percent of the total of 612 tons of government gold. That is screwed up to 31%.
For years there were major concerns of the gold was still there. This months of almost military organized gold shipments from Manhattan DNB wants a ‘balanced’ distribution of the national gold buffer.
In addition, DNB expects Dutch citizens more confident that enough of our gold is in their own ‘home’ to guide the country if necessary following major crises.
At that effect also highlights the German Bundesbank, which are gold also partially recovered. De Nederlandsche Bank has great silence in recent months retrieved 130 tons of gold bars.
Last week drove armored trucks back and forth towards the Amsterdam Frederiksplein. “It is no longer wise to keep half of our gold in one part of the world,” the DNB spokesman on the massive operation with gold bars to Amsterdam says. “Maybe that was during the Cold War still desirable, not now. ”
In Amsterdam is recently 31% of the gold. In the vaults of New York is 31%. It remains. De Nederlandsche Bank carries no gold bars back from the protected storage in Ottawa, Canada, where 20% of the gold remains. In London, the Netherlands keeps 18% of all Dutch ‘sandwiches’ gold as nest egg.
Netherlands moved his gold in the past frequently. In the period after the Second World War until the early seventies the Dutch central bank bought gold to replenish its reserves. That was mainly focused on the vaults in New York, which are built to earthquakes and bomb attacks endured. Since then bought and sold DNB gold and earned it every robustly.
- Another curiosity: the gold was repatriated by ship. From Dutch News:
In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said. The high security reparations for the move took months.
- Luckily, that particular vessel did not suffer any “boating incidents.”
- And now that the Dutch have shown just how “easy” it is to repatriate one’s gold when not entangled in shifting alliances, diplomatic feuds, or suffering from “logistical problems” preventing one from collecting their gold, we wonder just how much more eager Germany or Switzerland will be to collect their own gold, or whether the Swiss November 30 referendum will decide to let countries like the Netherlands have a right of first refusal of whatever gold may still be held at the vault located 90 feet below street level at the New York Federal Reserve Bank (which as we reported a year ago, is connected by an underground tunnel to the JPMorgan precious metal which was located just across the street).
- President Barack Obama announced an executive order on immigration reform Thursday, which he will sign on Friday. The actions will affect up to 5 million undocumented immigrants in the US, many of whom are the parents or spouses of legal residents.
- Obama announced his plan for unilateral action on immigration via a prime-time address from the White House. He will sign the executive order during a rally in Las Vegas on Friday. Because the plan will not be passed by Congress, it could also be easily reversed by a new president after Obama’s term runs out in just over two years.
- The president called his actions “a commonsense middle ground approach,” as he continued to push Congress to pass a comprehensive bill reforming the country’s immigration system. Under the terms of his order, undocumented immigrants who have lived in the US for five years or more, and are parents of American citizens or lawful residents, will be subjected to criminal and national security background checks. Once these are completed, they can pay taxes and defer deportation for three years at a time.
- The US will also increase security at the borders and focus deportation efforts on criminals and potential security threats rather than families.
- “”Mass amnesty would be unfair. Mass deportation would be both impossible and contrary to our character,” Obama said in his remarks. “If you meet the criteria, you can come out of the shadows and get right with the law. If you’re a criminal, you’ll be deported. If you plan to enter the US illegally, your chances of getting caught and sent back just went up.”
They know he & it are ratings LOSERS: “@RT_America: TV networks snub Obama’s immig address http://t.co/Y8omYrSeXy pic.twitter.com/HxYFZIHH22″
— Laura Ingraham (@IngrahamAngle) November 20, 2014
- Obama will also defend his decision to issue an executive order against Republicans and those who claim he is overreaching, arguing that every Republican and Democratic president in the last 50 years has used his authority similarly.
- “To those members of Congress who question my authority to make our immigration system work better, or question the wisdom of me acting where Congress has failed, I have one answer: Pass a bill,” he said.
- Already, the president’s plan has come under fire from conservatives. House Speaker John Boehner (R-Ohio) criticized Obama ahead of his speech, saying he is acting like “an emperor.”
- “Instead of working together to fix our broken immigration system, the president says he’s acting on his own,” he said in a video statement. “That is just not how our democracy works.”
“What I’m describing is accountability—a common-sense, middle ground approach.” —President Obama #ImmigrationAction pic.twitter.com/af7DG6DMbK
— The White House (@WhiteHouse) November 21, 2014
- The plan will include a temporary reprieve from deportation for as many as 5 million undocumented immigrants ‒ which includes parents and spouses of US citizens and permanent residents who have been in the country for at least five years. Those people may also be made eligible for work permits, but will not have a path to citizenship. Officials said the eligible immigrants will not be entitled to federal benefits ‒ including health care tax credits, food stamps, Medicaid coverage or other need-based federal programs ‒ under Obama’s plan.
- The plan will cover parents of legal residents, but not the parents who brought their children to the US illegally. In 2012, Obama authorized the Deferred Action for Childhood Arrivals via executive action, which delayed deportation for the young undocumented immigrants, often referred to as DREAMers. The actions will create a similar program for undocumented parents of children who are in the country legally, the Washington Post reported. Expansions include raising the eligibility age beyond the current limit of 30 and allowing more recent arrivals (those who came after 2007) to apply, among other things.
- “These people – our neighbors, our classmates, our friends – they did not come here in search of a free ride or an easy life,” Obama said Thursday. “They came to work, and study, and serve in our military, and above all, contribute to America’s success.”
- “Whether our forebears were strangers who crossed the Atlantic, or the Pacific, or the Rio Grande, we are here only because this country welcomed them in, and taught them that to be an American is about something more than what we look like, or what our last names are, or how we worship. What makes us Americans is our shared commitment to an ideal – that all of us are created equal, and all of us have the chance to make of our lives what we will.
Pro-#immigration reform advocate translating President #Obama’s speech in Spanish, per @brennawilliams: pic.twitter.com/hLVYGiWKeg
— Phillip M. Bailey (@phillipmbailey) November 21, 2014
- Notably, visas for migrant farm workers will not be expanded, reportedly over concerns about justifying the way that group would be treated compared to other workers, like construction workers.
- Obama’s orders will make up to 4 million undocumented immigrants eligible for temporary protective status and provide relief to another 1 million through other means, a senior Democrat familiar with the plans told the Post. There are roughly 11 million illegal immigrants in the US currently.
- The president’s plan also includes a program to facilitate visas for people who invest in the United States, as well as for those who pursue degrees in the so-called STEM fields of science, technology, engineering and math. It will also modify federal immigrant detention procedures. Concerns were raised by immigrant rights activists over the summer, after current facilities were overwhelmed by an influx of tens of thousands of unaccompanied minor children and families with children illegally entering the country.
- The actions also include steps to further secure the United States’ border with Mexico, Homeland Security Secretary Jeh Johnson said at a Wednesday appearance at the National Press Club. The administration’s lawyers have concluded that the president can legally issue these executive actions, despite intense opposition from Republicans, he noted.
- “Legislative action is always preferable,” Johnson said. “But we have waited for Congress to act, and the Congress has not acted. The president has waited.”
- Last Wednesday, following the Republican Party’s takeover of the US Senate, Obama warned that he would take whatever lawful actions he feels are necessary to “improve the function of our immigration system,” following years of unsuccessful efforts from Congress to accomplish as much on its own. The White House says that the Republican-controlled House of Representatives has previously pushed back on efforts from Democratic lawmakers to introduce immigration reform, and the results of November’s midterm elections will soon see to it that the GOP has a majority in the Senate as well next session. Republicans have threatened to impeach the president over the immigration executive actions.
- By taking executive action, it is likely that Obama will derail any opportunities to cooperate with the GOP majority in Congress during the rest of his term, including on bipartisan initiatives like tax reform, among other issues.
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