"Starve The Beast" - July 4th, 2009

I do alot of reading, chatting and checking forums on the net: mostly I hear whining, anger, criticism and fear - noone really has a plan to do anything about a future which seems bleaker and bleaker.

But I have always had a plan: I know exactly how to bring corporate and government corruption to a screeching halt. All it would take is 30% of the population (of any country) to stop spending money. Shut down the country. And make unified demands. This has to be done while there are still some consumers left with disposable income.

Sure, you might say, this will only make things worse. But only in the short run. The power of the people to control their own government will not be reinstated without some pain. Better make a potent effort now, or the consequences of allowing the Big Dogs to control our destiny will bring much more suffering than a week or two of shutting down government and corporate profits. There can be short term sacrifice now - or all will suffer long term. And better money than blood.

Here is the first article I have found that has a decent plan: keep your money in your pocket until government decides to serve those it is meant to serve - the people. Give the article a read and if you agree, please pass it on. WE ARE THE BOSS - TIME TO LET THE BIG DOGS KNOW IT!

I would add to the list below to include many other 'people before profit' demands not mentioned here. And my agenda would be a bit more radical; but, Mr. Denninger has the right idea.

"Starve The Beast" - July 4th, 2009

Karl Denninger
Source

Perhaps its time.

There have been a number of people on the forum talking about this, with one of the most recent converts being "iflyjetzzz".

Look, we can rant and rave about market manipulation and government-sponsored games. We can petition the SEC, the FBI and Congress. We can demand that they stop it all we want.

But they haven't and likely won't until and unless America gets pissed off enough to force them to act.

So how do we make that happen, yet remain within the law?

Its not that hard, and in the intermediate and longer-term it would be incredibly positive for our economy and nation.

We go on a consumption strike until and unless our demands are met.

What are our demands? Here's the list:

1. * All the financial fraudsters are investigated, indicted, and prosecuted. This includes the con artists in CONgress who got "special deals" from Mozilo and his "Friends of Angelo" program (and who are blocking a subpoena to BofA as it would implicate them), it includes those past and current members of Government Sachs, and it includes all those other financial "professionals" who deceived Americans and others with their sale of toxic exploding mortgage products along with the securities supposedly backed by them.
2. * Glass-Steagall is restored, in full, and all the firms that can't exist under it are broken up. Period.
3. * The insider-trading that has become blatant and outrageous is prosecuted where illegal and where not, is made illegal and then prosecuted, with the focus being on the size of the scam. This includes obvious circumstances such as August 2007 (Bernanke's phone logs were FOIA'd) where trading patterns made clear that "certain someones" had foreknowledge of the discount rate cut along with Congresspeople who were briefed on the TARP and within hours or days made significant stock trades. Today if you're Martha Stewart you're prosecuted where if you make millions in an hour by exploiting government information "leaks" the SEC and FBI look the other way.
4. * The Government withdraws all of its backstopping of financial firms who created this mess. All of it. If you're a bank or other firm and did something imprudent, you fail. Period. This is true whether you're a small regional bank (as is happening now; 5 in the last week) or a big behemoth like Citibank or Bank Of America. No "special deals", no "special guarantees", nothing of the kind. If the government wishes to avoid "systemic risk" then the government regulators can do their damn job.
5. * The Fed disgorges all of its improperly-acquired MBS and other related securities. If it doesn't have a full-faith-and-credit guarantee and was bought, it is disgorged - period.
6. * The Fed agrees to full annual audits without exception.
7. * Those people inside government who conspired with certain bankers to cook the books, along with those in the banks who did so, go to jail. Our own Office of The Inspector General in the government has confirmed that there was an active conspiracy to break the law within the OTS, but not one indictment has been issued.
8. * Those who committed fraud in the creation of this economic mess, whether they be mortgage lenders, those who packaged up securities while intentionally omitting credit information, those in the real estate industry to pressed for appraisal fraud and others are investigated, prosecuted and if convicted jailed. All of them.
9. * Losses are born by those who made bad decisions, not the taxpayer generally. Those who made good decisions get to reap the benefits, while those who made bad decisions eat the losses. No exceptions.
10. * Government cuts the annual budget deficit to zero. If government wants to blow the money it has to have the money. If they can't raise the money they don't spend it. It is time to live within our means and hold government to account for its profligate spending along with promises of "benefits" they know they cannot actually deliver down the road such as Medicare Part D.

Until then the position of those who wish to join is simple: No non-essential purchases of anything are made. Period.

What's an essential purchase? Here's the list:

• * Enough food to eat at home. No more eating out.
• * Rent and utilities.
• * Essential medical services.
• * Enough fuel to get to and from work.

In addition any "excess withholding" is stopped; if you are getting a big fat refund from the IRS every year you are loaning the government your money at zero interest until April. Stop that; its stupid. Change your W4 so you get exactly nothing back or owe a tiny amount; if you pay estimates pay only that which you must and not one dime more.

Note that it is unlawful to use your W4 to intentionally under-withhold, but you are in fact not obligated to pay one more dime in tax than you actually owe. There is nothing wrong with adjusting withholding to match (as close as you reasonably can) your actual tax obligation.

Put the money you save (it will be a lot!) into a non-TARP Credit Union if you have one available to you, or a non-TARP local bank if you do not. Spend none of it.

If we pledge to do this and not resume normal spending habits on wants as opposed to needs until and unless the budget is balanced, the bailouts are rolled back and those who committed fraud go to prison the government will be forced to act as they will simply run out of money.
They cannot force you to buy that new iPOD or flatscreen TV, or to take an expensive vacation.

Consumer spending is 70% of the economy.
This is a consumer weapon that is more powerful than any other means of peaceful protest. Strangling the government and private business' ability to steal from us all by cutting off their revenue will force reform, and has the additional benefit of being exactly what this nation needs to provide a strong capital formation base when that reform is complete.

If businesses want my money they can join in the chorus of voices demanding that government stop the looting and start prosecuting.

Will any of us be perfect in this endeavor? No. There will be the occasional indulgence I'm sure no matter who we are. But I'm willing to bet we can shrink consumption - each and every one of us - by at least 10% without any real personal pain at all, and if we do so it will send an indelible message to those in government and business: cut that crap out!

Constitution in Crisis - Bill Moyers

Where were you 13 years ago? What were you doing during the Iran Contra affair? Were you paying attention? If you were, then you know exactly what is going on in Iran today.

I invite you to view this 13 year old Bill Moyers special and the subversion of the US Constitution for an historical perspective on the Iranian elections and US meddling in the foreign affairs of this country. You can go futher back if you like to 1953 - but at least go back to 1986.

How do Americans forget (or ignore) their own history? It is shocking.

Please enjoy the video. The Secret Government: The Constitution in Crisis

Israel poisons Palestinian water

Caption: Now you just have to imagine the room with a different color scheme, hardwood floors, and all these people living in the street and the six year-old shot through the head and the rest of the family acting crazy as if things could have been handled differently.

Nothing Israel does surprises me anymore. Zionists seem to be able to justify any atrocity as long as it serves their interests. Must be lovely to tell oneself all actions are mandated by God. I am sure they are not the first to do this.

I can't do much about it: but I can boycott their products. Read Naomi Klein's renewed call for Israeli boycott and spread the word. The only way to hurt Israel is talk their language: money.

Israel Poisons Palestinian Water

29 June 2009
Source

Ya know, wouldn't it be grand to wake up one day and not have to read where Zionist Racists murdered a non-Jew, attacked a non-Jew, attempted to kill a non-Jew, stolen land from a non-Jew, perpetuated crimes against humanity on a non-Jew. Until they can learn to become humans perhaps they should all be shot into space, yes, that's it!! And be given their own rocky desert planet, so they can live with only their kind forever and always, which, is of course their dream to expel everyone "not" like them from the middle east. Don't they know there is a word for that? "Racist"

Israeli soldiers poured dirt, stones and toxic chemicals in the only well in the hamlet of Khirbat Makehl near the village of Ya’bad in the northern West Bank overnight on Saturday, according to Palestinians in the community.

The village’s official representative, Walid Hamdan, said soldiers riding in three military jeeps entered the community overnight and sabotaged the well. The chemicals caused the water to change color and taste, he said.

The 80 cubic-meter well is the only source of water for the village of 70 to 80 families, Hamdan said.

He also said that, since the village lies near the Israeli settlement of Hermesh, the armed guards of the settlement often harass and assault Palestinians, particularly herders who venture near the edges of the settlement. Israeli forces also sometimes close the road leading to the community, preventing deliveries of food.


Related:

Picture of demolitions in Palestine
REALITY CHECK; ILLEGAL CHECKPOINTS IN PALESTINE NOW OPERATED BY PRIVATE COMPANIES
GAZA gets "Lip Service" but NO JUSTICE

NWO = New reserve currency

I have tried in vain to convince Americans that the dollar will fall - and with it the standard of living to which the consumer zombie has been accustomed. Once again, I am presenting an article which should set off red alarm bells for anyone holding dollars. Those who do not take heed may live to regret it.

Wary of Dollar, China Wants Super-sovereign Currency

China's central bank calls for super-sovereign currency
Dollar's dominance has intensified risk, worsened crisis
IMF should manage part of its members' FX reserves

By Zhou Xin and Chris Buckley
Source
June 26, 2009
BEIJING
China's central bank renewed its call on Friday for the creation of a super-sovereign reserve currency to reduce the dollar's global domination, which it said had worsened the financial crisis.

In its annual financial stability report, the central bank did not mention the dollar by name but said it was a serious defect that one currency should tower over all others.

"An international monetary system dominated by a single sovereign sovereign currency has intensified the concentration of risk and the spread of the crisis," the People's Bank of China said.

In thinly-veiled criticism of loose U.S. monetary and fiscal policies, the PBOC urged the International Monetary Fund to exercise closer supervision of the economic and financial policies of major reserve-issuing countries.

The 170-page report dusted off a call by the bank's governor, Zhou Xiaochuan, for the creation of a super-sovereign currency.

In an essay in late March, Zhou caused a stir by suggesting that the Special Drawing Right, the IMF's unit of account, could eventually displace the dollar as the principal reserve currency. [ID:nPEK184558]

Friday's report not only advocated a full role for the SDR but said the IMF should be entrusted with managing a portion of its member countries' foreign currency reserves.

"To avoid intrinsic shortcomings in using a sovereign currency as a reserve currency, we need to create an international reserve currency that is divorced from sovereign states and can maintain a stable value over the long term," the report said.

DOLLAR DILEMMA

Chinese officials have expressed growing concern in recent months that massive U.S. fiscal and monetary stimulus will generate inflation and drive down the dollar, handing Beijing big losses on its vast portfolio of U.S. bonds.

Bankers say China holds perhaps 70 percent of its $1.95 trillion in official currency reserves in dollars.

"When a national currency becomes the global price-setting currency for primary products, the trade settlement currency and the reserve currency, that national currency has great difficulty attending to both domestic monetary policy goals and the reserve currency needs of various countries.

"And the economic development model of debt-based consumption is most difficult to sustain," the report said.

The PBOC also levelled criticism at international banking rules, drawn up by the Basel Committee on Banking Supervision, which it said had paid inadequate attention to the risks inherent in complex credit securities.

Oversight of derivatives had also been lax, the report said.

Turning to the domestic economy, the PBOC said the slump in global trade caused by the international financial crisis would spawn risks for China's banks as exporters ran into difficulties.

By weighing on incomes, the crisis might also slow China's drive to develop a consumption-led economy, the PBOC said.

The central bank also said China could face inflationary pressure in the medium- to long-term as a result of liquidity now being pumped into the global financial system, coupled with extensive deficit spending by many governments.

(Reporting by Zhou Xin, Aileen Wang and Chris Buckley; Writing by Alan Wheatley; editing by Patrick Graham)

Copyright 2009 Reuters

End of the Dollar

Will the 'Dollar Wars' Kill
What's Left of the American Dream?

Countries yoked to America's currency, and therefore its cratering empire, want to kick the dollar to the curb. And that's bad news for the U.S.

By Scott Thill
Source
June 26, 2009

Here's a terrible joke: An elderly man walks into a bar and says, "I got good news and I got bad news."

"What's the good news?" the bartender asks.

"I stayed out of the stock market, so my retirement dollars are safe."

"What's the bad news?"

"They're dollars."

OK, I said it was a terrible joke. But that may be what the dollar is becoming, now that the critical mass of wartime spending, rampant consumption, hyper-real finance and environmental collapse has hit the fan.

The hangover from the last three presidential terms, but especially the last two, has taken the American economy down the rabbit hole, with the international monetary system begging for mercy while hitched to its off-the-ralls crazy train. But the ride has stopped, and some countries yoked to America's currency, and therefore its cratering empire, don't want to get back on.

Namely, Brazil, Russia, India and China, loosely termed BRIC by Goldman Sachs economist Jim O'Neill, who is not alone in predicting the four countries' ascendant power, as the United States and the Eurozone fade into the 20th century.

With Brazil and Russia lording over a large share of what's left of the planet's natural gas and oil, and China and India providing a titanic labor force that rivals the intelligence, productivity and regimentation of workers anywhere outside their borders, BRIC is in the house, big time. And it wants a say in what's going on, as Marvin Gaye sang.

What's going on is that the dollar, to which the majority of the planet's economies and currencies are now reliant, has us all by the proverbial balls, and BRIC is screaming about it in the press. Something has to give, it's saying, and that thing is the dollar.

"There is a lot of political and economic posturing involved," Rachel Zimeba, lead analyst at economist Nouriel Roubini's RGE Monitor, explained to AlterNet. "But I think there is substance to it. China has been trying, relatively unsuccessfully, to diversify for a couple of years, which has conflicted with its desire to have undervalued exports. Same thing has happened to countries in the Middle East, which are pegged to the dollar. And we're going to see even more pressure to diversify from these countries to reduce the share of their [dollar] assets.

"They see that the U.S. has a rising debt burden and record financing needs. Over time, they are worried that inflation and a weaker dollar will reduce the value of those assets."

They should be worried. Since the Bush administration took office, the dollar has lost 33 percent of its value. And since the Bushies left office, the dollar has been on autopilot, hovering beneath the pound and euro and jockeying for position with the Canadian dollar for the bronze medal in underperforming currencies, losing or gaining altitude every time a politician from Russia or China slams or praises it in the press. Like the American economy itself, the Humpty Dumpty dollar is wobbling on the fence, hoping reality doesn't hop along and give it a shove.

The good news? It could land softly.

"This is not an overnight thing," Ziemba added. "Same thing goes for these countries' attempts to turn their own currencies into transactional and reserve currencies."

That's reassuring, especially to what's left of those who still have a lot of dollars, as the American unemployment rate rises to levels nearly unseen since World War II. But once you wormhole a bit further into the future, the dollar's fate is much more murky.

"The debate between the inflationists and deflationists is red-hot these days, as the U.S. financial system continues to wobble and the 'real' economy of goods and services staggers," explained Jim Kunstler, author of The Long Emergency, World Made By Hand and the riotously acerbic column "Clusterfuck Nation." "The fate of the dollar in the short-term depends on which way this really goes. But in the long term, both sides say the dollar is toast."

Helping push America off the debt-soaked cliff it built for itself by hitching its future to hyper-real derivatives and unsustainable deregulation and development is beginning to look less like sacrilege and more like prudent international monetary policy. Whereas in the past, China and Russia's public protestations about the hegemonic corruption of the American empire would have been shooed away like jealous flies, now more countries are joining in the anti-American chorus, even as they shake President Barack Obama's hand and hope openly for a kindler, gentler global village.

What's going on behind the scenes is anybody's guess. But it's probably a good guess that more than a few long knives have been unsheathed.

"Geopolitically, I suspect there is whispered consensus between our various partners and rivals that the American situation is pretty hopeless," Kunstler cracked, "and that they would now all more or less benefit from the diminishment of U.S. power across the board. The Chinese, for instance, must know that we will never again ramp up the orgy of credit spending. Why keep throwing away their wealth to keep us consuming?"

It's a good question. One of the BRIC members' solutions to the conundrum is to spend more time on their own currencies, as well as those of the beleaguered International Monetary Fund, which has its own currency, called special drawing rights. The SDRs are pegged to a currency basket, containing the U.S dollar, the euro, the yen and the U.K. pound sterling. In other words, the currencies of the 20th century's superpowers.

BRIC, the purported superpowers of the 21st century, have been buying SDRs like mad lately. When BRIC met in mid-June in the Siberian city of Yekaterinberg, it committed to giving $80 billion to the IMF, with China carrying the lion's share at $50 billion. Add that to the $250 billion that the G20 coughed up in April, and the IMF is quickly becoming the planet's reserve bank of choice.

“There is a need to make the IMF a true representative of the world’s leading economies," Russian Finance Minister Alexei Kudrin asserted in June. "It’s not there right now,” he said, adding that it would be a decade before what People’s Bank of China Governor Zhou Xiaochuan recently called a super-sovereign reserve currency mounted enough of a challenge to displace the dollar.

In the meantime, Russia, China and the other BRIC members are putting their money where they want their mouths to be, which is in the International Monetary Fund's ear. But whether that super-sovereign reserve currency is the SDR is too soon to say.

"The SDR can't handle the load in its current form," Zimeba argued. "You'd need a payment system that accepted the SDR, for one. But where it can grow is in reserve assets, and this upcoming issuance of IMF bonds denominated in SDR will be a significant increase. But SDRs will only be open to governments, not the secondary market where they can be traded, which fails the requirements of convertibility and liquidity.

"Right now, the SDR doesn't have that mechanism. But that can change over time. In the near term, this is a way towards diversification, because the dollar doesn't have a majority share in the SDR."

Kunstler adds: "They're obviously hedging their bets as much as possible. Put yourself in their shoes. They see the U.S. financial system's stupendous swindles, and they know the score. So their interests are strictly tactical and strategic in the interests of their survival. They also surely want to try to insure the continuation of world trade, with or without the U.S. consumer."

Which is why BRIC, and by extension the countries beneath its heel or shaking its hand, are diversifying their dollars and dumping cash into the IMF, where they can attempt to influence the international monetary system in their favor. The United States has so far committed $108 billion, including $5 billion siphoned from the controversial war-funding bill that passed in mid-June.

In addition, it has arranged for the IMF to receive over $500 billion altogether, mostly to prop up zombie European banks that drank too much of the derivatives Kool-Aid. So BRIC has an uphill battle ahead of it. But it's gaining strength, and wants to convert that to IMF say-so.

"They want more significant voting rights in the IMF," Ziemba said. "The money is in exchange for leverage. China has talked in detail about how the over-reliance on the dollar was adding to global instability, creating a situation where the optimal monetary policy for the U.S. is not optimal for countries tacked to the dollar. But it's fairly obvious that, in five to 10 years, the role of these countries in the global economy will only increase. But they also have to figure out how much responsibility they want to take on."

Or can take on. BRIC is ascendant for sure, but it's about to inherit a global economy and environment that is nothing like the respectively stable climates American and European empires have enjoyed over the last few hundred years. From the econopocalypse to climate crisis and beyond, BRIC is quickly going to find its hands full of problems that will doubtlessly dampen its upward surge. Sure, the dollar is toast, but so is Earth's biodiversity and store of natural resources. It's hard to build a superpower on that heap.

"I think all nations are losing the ability to control events at the global level," Kunstler concluded. "It's a symptom of the crack-up of globalization, per se: A set of transient economic relations that only existed because of special conditions, namely, the final blowout of the cheap energy era. With that over, it's now a mad scramble for each player to survive.

"Observers seem to think that China will become the new global hegemon, but I doubt it. They have problems with water, food, overpopulation and environmental degradation that are much worse than ours. The world is comprehensively headed for a reduced standard of living."

Scott Thill runs the online mag Morphizm. His writing has appeared on Salon, XLR8R, All Music Guide, Wired and others.

Author Naomi Klein Calls for Boycott of Israel

Author Naomi Klein Calls for Boycott of Israel

By Agence France Presse
June 26, 2009
Source
Bestselling author Naomi Klein on Friday took her call for a boycott of Israel to the occupied West Bank village of Bilin, where she witnessed Israeli forces clashing with protesters.

"It's a boycott of Israeli institutions, it's a boycott of the Israeli economy," the Canadian writer told journalists as she joined a weekly demonstration against Israel's controversial separation wall.

"Boycott is a tactic . . . we're trying to create a dynamic which was the dynamic that ultimately ended apartheid in South Africa," said Klein, the author of "The Shock Doctrine: The Rise of Disaster Capitalism."

"It's an extraordinarily important part of Israel's identity to be able to have the illusion of Western normalcy," the Canadian writer and activist said.

"When that is threatened, when the rock concerts don't come, when the symphonies don't come, when a film you really want to see doesn't play at the Jerusalem film festival . . . then it starts to threaten the very idea of what the Israeli state is."

She briefly joined about 200 villagers and foreign activists protesting the barrier which Israel says it needs to prevent attacks, but which Palestinians say aims at grabbing their land and undermining the viability of their promised state.

She then watched from a safe distance as the protesters reached the fence, where Israeli forces fired teargas and some youths responded by throwing stones at the army.

"This apartheid, this is absolutely a system of segregation," Klein said adding that Israeli troops would never crack down as violently against Jewish protesters.

She pointed out that her visit coincided with court hearings in Quebec in a case where the villagers of Bilin are suing two Canadian companies, accusing them of illegally building and selling homes to Israelis on land that belongs to the village.

The plaintiffs claim that by building in the Jewish settlement of Modiin Illit, near Bilin, Green Park International and Green Mount International are in violation of international laws that prohibit an occupying power from transferring some of its population to the lands it occupies.

"I'm hoping and praying that Canadian courts will bring some justice to the people of Bilin," Klein said.

Her visit was also part of a promotional tour in Israel and the West Bank for "The Shock Doctrine" which has recently been translated into Hebrew and Arabic. Klein said she would get no royalties from sales of the Hebrew version and that the proceeds would go instead to an activist group.

© Copyright (c) AFP

Who's A Low Level Terrorist? Are You?

Another five-year-old on the no-fly list: meet Sam Adams

It is shocking how distractable people are, not just in the US, but Europe also.

While we are transfixed on the 3 ring media circus, civil rights as we know them are being replaced by laws which imprison us in oppressive bureaucratic networks, internationally.

Whose fault is this? Is it our own; or that of those who pass these laws confident that we are mesmerised by the media clown show?

Perhaps we deserve to be controlled like cattle if we cannot accept the responsibility for freely creating the world in which we live?

Who's A Low Level Terrorist? Are You?

Click image to enlarge

By Emily Spence
June 26, 2009
Source
Recently, an American Civil Liberties Union report pointed out, "Anti-terrorism training materials currently being used by the Department of Defense (DoD) teach its personnel that free expression in the form of public protests should be regarded as 'low level terrorism." [1]

See Man arrested/convicted for complaining to gov't

Despite that DoD officials removed the offensive section from their educational resources at the urging of ACLU members, the DoD stance is still troubling since a longstanding practice to designate peaceful, law abiding activists as dangerous and treasonable still exists in many government departments and agencies. Indeed the participants of the first antiwar protest against the Vietnam incursion, put together in the mid-1960's by peaceable Quakers and FOR members after having discussed Gandhi's Salt March as a model for a nonviolent demonstration, faced government operatives filming them face by face from rooftops as they moved en masse down Broadway to the UN Plaza. (My mother, a pacifist married to a World War II Conscientious Objector, and I, a child at the time of the march, both were in attendance. When the film crew focused on us, she stood tall, faced the agents with their telephoto lens, glared in disdainful defiance and, simultaneously, throw the corner of her coat over my face. Afterwards, she muttered, "How dare they try to intimidate us!")

This sort of happening in mind, the treatment of Nobel Peace Award winner Aung San Sui Kyi in Myanmar is not necessarily all that different than the response that she'd receive in the USA and, while it's commendable that American spokespersons publicly object to her most recent arrest, they, certainly, might seem to be a bunch of hypocrites. This is due to the fact that a number of Nobel Peace Award recipients, such as American Friends Service Committee (AFSC), have had difficulties of their own on American soil.

For example, "AFSC�s work, always open and resolutely nonviolent, has been under government surveillance for decades. The Service Committee secured nearly 1,700 pages of files from the FBI under a Freedom of Information request in 1976. These files show that the FBI kept files on AFSC that dated back to 1921. Ten other federal agencies kept files on AFSC, including the CIA, Air Force, Navy, Internal Revenue Service, Secret Service, and the State Department. The CIA has intercepted overseas mail and cables in the 1950s, and some AFSC offices (and even its staff's homes) have been infiltrated and burglarized in the late 1960s into the 1970s." [2]

In relation, AFSC associate general secretary for justice and human rights, Joyce Miller, asked, "How can we speak of spreading democracy in Iraq while dismantling it here at home?" She further remarked, "Political dissent is fundamental to a free and democratic society. It should not be equated with crime."

Add to the AFSC problems, those pertaining to Nobel Peace Award recipient Nelson Mandela, who only a year ago had the designation "terrorist" removed from his name, under protest by the State Department, so that he no longer suffered travel restrictions from the US government. Yet his travel curtailment was not nearly as awful as was Ramzy Baroud's blockage. He, the editor of Palestine Chronicle, had his US passport seized by a consular officer at an overseas American Embassy [3]. Similarly, Senator Edward Kennedy was, also, flagged by the U.S. no-fly list.

Then again, Ted Kennedy received much less harassment than did Nobel Peace Award winner Mairead Corrigan Maguire after her flight from Guatemala had been directed to Ireland through Houston:

"She was probably tired and ready to get back to Belfast, where her attempts to bring about an end to The Troubles in 1976 made her at 32 the youngest Nobel Peace Prize-winner ever. Since then, she's been given the Pacem in Terris Award by Pope John Paul II, and the United Nations selected her (along with the Dalai Lama, Desmond Tutu, Jordan's Queen Noor and a dozen or so other fellow Nobel Laureates) as an honorary board member of the International Coalition for the Decade.

"Unfortunately for Maguire, her flight back home to Northern Ireland was routed through Houston, where none of that meant diddly. Federal Customs officials were far less interested in any of that than they were in a box on the back of the transit form she filled out on her flight.

"'They questioned me about my nonviolent protests in USA against the Afghanistan invasion and Iraqi war,' Maguire said later in a statement. 'They insisted I must tick the box in the Immigration form admitting to criminal activities.'

"Maguire was detained for two hours -- grilled once, fingerprinted, photographed, and grilled again. She missed her flight home. She was only released after an organization she helped found -- the Nobel Women's Initiative -- started kicking up a fuss." [4]

On can add to her troubles countless other ones wherein human rights and environmental supporters have been repeatedly hassled for no other reason than that they're holding views that don't jive with positions at any number of U.S. government institutions. One needn't return in time to the McCarthy Era to find many individuals who have been investigated and persecuted for holding vilified opinions. For example, Stephen Lendman, a peace advocate and writer in his seventies with a permanent knee injury that delimits travel, has been repeatedly investigated by the FBI.

At the same time, he is joined by myriad others such as assorted activists in Maryland whose names were put on federal terrorist lists by state police who infiltrated their groups. [5] As such, their perfectly legal activities, freedom of speech and right to unhindered assembly have been criminalized.

Simultaneously, there's a certain inescapable irony and disingenuous quality presented by the Western government heads who are harshly critical of the Iran crackdown on dissenting citizens while they, themselves, condone similar ironfisted policies in their own lands. Their two-faced position is barely hidden beneath the surface of their mock concern for the well-being of Iranian protesters as they urge their own and allied troops into battle, show little (if any) sincere remorse over the slaughter of masses of civilians that happen in the process and make sure that demonstrators at home are disregarded, denigrated or preemptively rounded up as happened at the 2008 Republican National Convention.

Then again, one might find himself in pretty good company if he were singled out as unpatriotic and treacherous for holding viewpoints or undertaking actions that go contrary to the perspectives that a certain hawkish and totalitarian segment of society holds. All the same, every method conceivable might be used to hunt down the offenders and, when taken to the extreme, render their seemingly provocative positions ineffectual by any means possible, including imprisonment and murder.

Anyone who doubts this to be the case needs only to remember about what happened to people like Howard Fast; the slain Freedom Riders Andy Goodman, James Chaney and Michael Schwerner; the thirteen shot students at Kent State University at which Ohio National Guardsman fired sixty-seven rounds over a thirteen second period, and scores of others who have stood against mainstream policies.

Meanwhile, stigmatizing dissidents is a fairly common practice. As such, "There are 1.1 million people on the [U.S.] Terrorist Watch List and there is a 35 per cent error rate, minimum, for that list," according to ACLU's Michael German. [6] Furthermore, the overzealous and aggressive surveillance tactics used by the National Security Agency (NSA) to check the public's e-mails, telephone calls and other communications are the same ones as were in use during George W. Bush's administration. Likewise, the amount of spying on personal exchanges is as high as it ever was.

In relation to recent claims by Justice Department and national security officials that the overcollection was unintentional, House representative, Rush Holt, a Democrat from New Jersey and Chairman of the House Select Intelligence Oversight Panel, commented "Some actions are so flagrant that they can't be accidental." Additionally, the act of tracking e-mailed transmissions and other interactions has seemed in violation of federal law according to lawyers at the Justice Department. Regardless, the practice continues.

At the same time, the decision to designate social activists as troublemakers, while singling them out for intimidation, threats and investigations, carries serious legal and political implications in democratic societies.The further measure of subjecting them to the sorts of difficulties that Mairead Corrigan Maguire, Ramzy Baroud, AFSC members and innumerable others have endured is clearly based in xenophobic, paranoid and despotic thinking. It embodies the kind of authoritarian mentality and oppressive activities that one finds in the worst types of tyrannical regimes.

As Harry S. Truman suggested, "Once a government is committed to the principle of silencing the voice of opposition, it has only one way to go, and that is down the path of increasingly repressive measures, until it becomes a source of terror to all its citizens and creates a country where everyone lives in fear." Due to this fear, are we, then, to all conform with lock-step in perverse obedience to the State's dictates, outlooks and agendas in an increasingly Orwellian milieu? If not, then we must constantly remind ourselves and each other of US Supreme Court Justice William O. Douglas's vision: "Restriction of free thought and free speech is the most dangerous of all subversions. It is the one un-American act that could most easily defeat us."

References

[1] Pentagon Rebrands Protest as "Low-Level Terrorism" (http://dissidentvoice.org/2009/06/pentagon-rebrands-protest-as-low-level-terrorism/).

[2] American Friends Service Committee (AFSC) (http://www.commondreams.org/news2006/0201-03.htm).

[3] "Punishing activists or pursuing terrorists?" by Maggie Mitchell Salem in Asia Times Online :: Asian News, Business and Economy. (http://www.atimes.com/atimes/Front_Page/GL10Aa01.html).

[4] Nobel Prize Winner Gets Hassled At Bush Intercontinental ... (http://www.commondreams.org/headline/2009/05/29-8).

[5] Police Spied on Activists In Md. - washingtonpost.com (http://www.washingtonpost.com/wp-dyn/content/article/2008/07/17/AR2008071701287.html) and Md. Police Put Activists' Names On Terror Lists - ... (http://www.washingtonpost.com/wpdyn/content/article/2008/10/07/AR2008100703245.html).

[6] One third of FBI Terror Watch List are innocent people | Top ... (http://www.russiatoday.ru/Top_News/2009-06-17/One_third_of_FBI_Terror_Watch_List_are_innocent_people.html).

Emily Spence is an author living in Massachusetts. She has spent many years involved in human rights, environmental and social services efforts.

Iran - A hard look at the numbers

What Actually Happened in the Iranian Presidential Election?
A Hard Look at the Numbers

June 22, 2009
by Esam Al-Amin
Source
Since the June 12 Iranian presidential elections, Iran "experts” have mushroomed like bacteria in a Petri dish. So here is a quiz for all those instant experts. Which major country has elected more presidents than any in the world since 1980? Further, which nation is the only one that held ten presidential elections within thirty years of its revolution?

The answer to both questions, of course, is Iran. Since 1980, it has elected six presidents, while the U.S. is a close second with five, and France at three. In addition, the U.S. held four presidential elections within three decades of its revolution to Iran’s ten.

The Iranian elections have unified the left and the right in the West and unleashed harsh criticisms and attacks from the “outraged” politicians to the “indignant” mainstream media. Even the blogosphere has joined this battle with near uniformity, on the side of Iran’s opposition, which is quite rare in cyberspace.

Much of the allegations of election fraud have been just that: unsubstantiated accusations. No one has yet been able to provide a solid shred of evidence of wide scale fraud that would have garnered eleven million votes for one candidate over his opponent.

So let’s analyze much of the evidence that is available to date.

More than thirty pre-election polls were conducted in Iran since President Mahmoud Ahmadinejad and his main opponent, former Prime Minister Mir Hossein Mousavi, announced their candidacies in early March 2009. The polls varied widely between the two opponents, but if one were to average their results, Ahmadinejad would still come out on top. However, some of the organizations sponsoring these polls, such as Iranian Labor News Agency and Tabnak, admit openly that they have been allies of Mousavi, the opposition, or the so-called reform movement. Their numbers were clearly tilted towards Mousavi and gave him an unrealistic advantage of over 30 per cent in some polls. If such biased polls were excluded, Ahmadinejad’s average over Mousavi would widen to about 21 points.

On the other hand, there was only one poll carried out by a western news organization. It was jointly commissioned by the BBC and ABC News, and conducted by an independent entity called the Center for Public Opinion (CPO) of the New America Foundation. The CPO has a reputation of conducting accurate opinion polls, not only in Iran, but across the Muslim world since 2005. The poll, conducted a few weeks before the elections, predicted an 89 percent turnout rate. Further, it showed that Ahmadinejad had a nationwide advantage of two to one over Mousavi.

How did this survey compare to the actual results? And what are the possibilities of wide scale election fraud?

According to official results, there were 46.2 million registered voters in Iran. The turnout was massive, as predicted by the CPO. Almost 39.2 million Iranians participated in the elections for a turn out rate of 85 percent, in which about 38.8 million ballots were deemed valid (about 400,000 ballots were left blank). Officially, President Ahmadinejad received 24.5 million votes to Mousavi’s 13.2 million votes, or 62.6 per cent to 33.8 per cent of the total votes, respectively. In fact, this result mirrored the 2005 elections when Ahmadinejad received 61.7 per cent to former President Hashemi Rafsanjani’s 35.9 per cent in the runoff elections. Two other minor candidates, Mehdi Karroubi and Mohsen Rezaee, received the rest of the votes in this election.

Shortly after the official results were announced Mousavi’s supporters and Western political pundits cried foul and accused the government of election fraud. The accusations centered around four themes. First, although voting had been extended several hours due to the heavy turnout, it was alleged that the elections were called too quickly from the time the polls were closed, with more than 39 million ballots to count.

Second, these critics insinuated that election monitors were biased or that, in some instances, the opposition did not have its own monitors present during the count. Third, they pointed out that it was absurd to think that Mousavi, who descended from the Azerbaijan region in northwest Iran, was defeated handily in his own hometown. Fourth, the Mousavi camp charged that in some polling stations, ballots ran out and people were turned away without voting.

The next day, Mosuavi and the two other defeated candidates lodged 646 complaints to the Guardian Council, the entity charged with overseeing the integrity of the elections. The Council promised to conduct full investigations of all the complaints. By the following morning, a copy of a letter by a low-level employee in the Interior Ministry sent to Supreme Guide Ali Khamanei, was widely circulating around the world. (Western politicians and media outlets like to call him “Supreme Leader” but no such title exists in Iran.)

The letter stated that Mousavi had won the elections, and that Ahmadinejad had actually come in third. It also promised that the elections were being fixed in favor of Ahmadinejad per Khamanei’s orders. It is safe to assume that the letter was a forgery since an unidentified low-level employee would not be the one addressing Ayatollah Khamanaei. Robert Fisk of The Independent reached the same conclusion by casting grave doubts that Ahmadinejad would score third – garnering less than 6 million votes in such an important election- as alleged in the forged letter.

There were a total of 45,713 ballot boxes that were set up in cities, towns and villages across Iran. With 39.2 million ballots cast, there were less than 860 ballots per box. Unlike other countries where voters can cast their ballots on several candidates and issues in a single election, Iranian voters had only one choice to consider: their presidential candidate. Why would it take more than an hour or two to count 860 ballots per poll? After the count, the results were then reported electronically to the Ministry of the Interior in Tehran.

Since 1980, Iran has suffered an eight-year deadly war with Iraq, a punishing boycott and embargo, and a campaign of assassination of dozens of its lawmakers, an elected president and a prime minister from the group Mujahideen Khalq Organization. (MKO is a deadly domestic violent organization, with headquarters in France, which seeks to topple the government by force.) Despite all these challenges, the Islamic Republic of Iran has never missed an election during its three decades. It has conducted over thirty elections nationwide. Indeed, a tradition of election orderliness has been established, much like election precincts in the U.S. or boroughs in the U.K. The elections in Iran are organized, monitored and counted by teachers and professionals including civil servants and retirees (again much like the U.S.)

There has not been a tradition of election fraud in Iran. Say what you will about the system of the Islamic Republic, but its elected legislators have impeached ministers and “borked” nominees of several Presidents, including Ahmadinejad. Rubberstamps, they are not. In fact, former President Mohammad Khatami, considered one of the leading reformists in Iran, was elected president by the people, when the interior ministry was run by archconservatives. He won with over 70 percent of the vote, not once, but twice.

When it comes to elections, the real problem in Iran is not fraud but candidates’ access to the ballots (a problem not unique to the country, just ask Ralph Nader or any other third party candidate in the U.S.) It is highly unlikely that there was a huge conspiracy involving tens of thousands of teachers, professionals and civil servants that somehow remained totally hidden and unexposed.

Moreover, while Ahmadinejad belongs to an active political party that has already won several elections since 2003, Mousavi is an independent candidate who emerged on the political scene just three months ago, after a 20-year hiatus. It was clear during the campaign that Ahmadinejad had a nationwide campaign operation. He made over sixty campaign trips throughout Iran in less than twelve weeks, while his opponent campaigned only in the major cities, and lacked a sophisticated campaign apparatus.

It is true that Mousavi has an Azeri background. But the CPO poll mentioned above, and published before the elections, noted that “its survey indicated that only 16 per cent of Azeri Iranians will vote for Mr. Mousavi. By contrast, 31 per cent of the Azeris claim they will vote for Mr. Ahmadinejad.” In the end, according to official results, the election in that region was much closer than the overall result. In fact, Mousavi won narrowly in the West Azerbaijan province but lost the region to Ahmadinejad by a 45 to 52 per cent margin (or 1.5 to 1.8 million votes).

However, the double standard applied by Western news agencies is striking. Richard Nixon trounced George McGovern in his native state of South Dakota in the 1972 elections. Had Al Gore won his home state of Tennessee in 2000, no one would have cared about a Florida recount, nor would there have been a Supreme Court case called Bush v. Gore. If Vice-Presidential candidate John Edwards had won the states he was born and raised in (South and North Carolina), President John Kerry would now be serving his second term. But somehow, in Western newsrooms Middle Eastern people choose their candidates not on merit, but on the basis of their “tribe.”

The fact that minor candidates such as Karroubi would garner fewer votes than expected, even in their home regions as critics charge, is not out of the ordinary. Many voters reach the conclusion that they do not want to waste their votes when the contest is perceived to be between two major candidates. Karroubi indeed received far fewer votes this time around than he did in 2005, including in his hometown. Likewise, Ross Perot lost his home state of Texas to Bob Dole of Kansas in 1996, while in 2004, Ralph Nader received one eighth of the votes he had four years earlier.

Some observers note that when the official results were being announced, the margin between the candidates held steady throughout the count. In fact, this is no mystery. Experts say that generally when 3-5 per cent of the votes from a given region are actually counted, there is a 95 per cent confidence level that such result will hold firm. As for the charge that ballots ran out and some people were turned away, it is worth mentioning that voting hours were extended four times in order to allow as many people as possible the opportunity to vote. But even if all the people who did not vote, had actually voted for Mousavi (a virtual impossibility), that would be 6.93 million additional votes, much less than the 11 million vote difference between the top two candidates.

Ahmadinejad is certainly not a sympathetic figure. He is an ideologue, provocative, and sometimes behaving imprudently. But to characterize the struggle in Iran as a battle between democratic forces and a “dictator,” is to exhibit total ignorance of Iran’s internal dynamics, or to deliberately distort them. There is no doubt that there is a significant segment of Iranian society, concentrated around major metropolitan areas, and comprising many young people, that passionately yearns for social freedoms. They are understandably angry because their candidate came up short. But it would be a huge mistake to read this domestic disagreement as an “uprising” against the Islamic Republic, or as a call to embark on a foreign policy that would accommodate the West at the expense of Iran’s nuclear program or its vital interests.

Nations display respect to other nations only when they respect their sovereignty. If any nation, for instance, were to dictate the United States’ economic, foreign or social policies, Americans would be indignant. When France, under President Chirac opposed the American adventure in Iraq in 2003, some U.S. Congressmen renamed a favorite fast food from French Fries to “Freedom Fries.” They made it known that the French were unwelcome in the U.S.

The U.S. has a legacy of interference in Iran’s internal affairs, notably when it toppled the democratically elected government of Prime Minister Mohammad Mossadegh in 1953. This act, of which most Americans are unaware, is ingrained in every Iranian from childhood. It is the main cause of much of their perpetual anger at the U.S. It took 56 years for an American president to acknowledge this illegal act, when Obama did so earlier this month in Cairo.

Therefore, it would be a colossal mistake to interfere in Iran’s internal affairs yet again. President Obama is wise to leave this matter to be resolved by the Iranians themselves. Political expediency by the Republicans or pro-Israel Democrats will be extremely dangerous and will yield serious repercussions. Such reckless conduct by many in the political class and the media appears to be a blatant attempt to demonize Iran and its current leadership, in order to justify any future military attack by Israel if Iran does not give up its nuclear ambition.

President Obama’s declarations in Cairo are now being aptly recalled. Regarding Iran, he said, “I recognize it will be hard to overcome decades of mistrust, but we will proceed with courage, rectitude, and resolve. There will be many issues to discuss between our two countries, and we are willing to move forward without preconditions on the basis of mutual respect.”

But the first sign of respect is to let the Iranians sort out their differences without any overt –or covert –interference.

Esam Al-Amin can be reached at alamin1919@gmail.com

JFK Assassination - New film footage

I had to watch this a couple times; but the actions of the driver are undeniably intentional. The second video is the original Zapruder film, from which the first one is taken.

Iran protests - BBC BUSTED with phony pictures

Western media is pretty pathetic. On June 15, 2009 Western media went to great lengths to convince its gullible readers that Iranians were revolting against the victory of Ahmadinejad by using a photo of his SUPPORTERS and claiming these were the Mousavi protesters.


Here is one example of how the BBC uses phoney pictures to create a mindset with it's readers.

Picture of supposed Mousavi protesters BBC

Caption: Tehran has seen mass demonstrations by all sides since the disputed election (see correction below)

Here is the 'correction'. Guess someone complained.

Update 19 June 2009: an earlier version of our caption was incorrect. We wrongly stated that this was a pro-Mousavi rally when in fact it was a pro-Ahmadinejad rally.

Here is the same picture used by the LA Times to give the impression that Iranians are protesting AGAINST Ahmadinejad.

Here is the true caption and picture from a slightly different angle.

Source

Iran's hardline President Mahmoud Ahmadinejad waves to a sea of thousands of flag-waving supporters during a massive rally to celebrate his victory in the presidential elections in Tehran's Valiasr square on June 14, 2009. Ahmadinejad defended his June 12 re-election but his defeated rival, Mir Hossein Mousavi, demanded the result be scrapped, setting the stage for further tense confrontations after the authorities cracked down on opposition protests. Getty

You can notice in the first and last pictures that the images are from Getty.

Anyone who thinks they have the real picture of what is going on in Iran from Western media, please leave your contacts details below. I have a bridge I want to sell you.

Related urls:



Who had motives to cheat in the Iranian elections? Good article

The Western media and Iran Excellent view of media bias. Why are the protests in Peru
, Egypt, Palestine and Georgia not covered?

"I can't recall seeing one video of one of the hundreds of children killed in Gaza shown in the US media. In contrast, two days ago CNN broadcasted footage of a woman who was shot and bleeding to death on a Tehran street."

CIA running black propaganda operation against Iran, Syria and Lebanon, officials say

Iran busts another CIA network

Bush Authorizes New Covert Action Against Iran

The C.I.A.’s Missteps, From Past to Present
... teased out newly declassified primary documents and done numerous ...like Eisenhower's demand in 1953 that the shah of Iran be restored to his throne....July 12, 2007 - By MICHAEL BESCHLOSS

Police Brutality USA - Interactive map

Since the recent infamous Grandma tasering, I have found many incidents of similar brutality by police. The following links are VIDEOS of such events.

Girl shoes cop - Cop beats girl

Then they came for me....and there was noone...

Police Overreact with a Taser Gun - AGAIN!

Ambulance driver brutalized by police: cops did it right!

Grandma tasered update - Police: we did it right!

Grandma tasered - Unedited video from dash cam

Ambulance driver brutalized by police

SWAT bust down wrong door

I had wondered how long it would take to compile a relatively complete list of all the incidences. Luckily I found that someone has done this already and presented it neatly in an interactive map.

I spent hours examining incidences from the map - it was horrifying and enlightening to see how widespread abuse of civil rights is in the USA - and how many innocent people have been killed or irreparably damaged.

Take a look if you dare.

An interactive map of botched SWAT and paramilitary police raids, released in conjunction with the Cato policy paper "Overkill: The Rise of Paramilitary Police Raids," by Radley Balko.


Related:

Medals for Botched SWAT Raid Officers

Police SWAT teams: Overused?

Man demolishes house before repo

With all the tragic foreclosures going on, it's nice to see at least one person getting some satisfaction from losing his home to the bank. My guess is this: if people were going to destroy their homes before the bank reposessed them, the banks would be much more flexible. Or maybe, the destruction of foreclosed homes would help to stem the glut of homes on the market, meaning that the bottom of the housing bubble might finally arrive.

In either case, it's refreshing to see one man who refused to walk away with nothing, not even satisfaction.

Enjoy the video. Read article here

Police Overreact with a Taser Gun - AGAIN!

Police Overreact with a Taser Gun

Why the dollar is dying

Update: June 24, 2009
A new world is being born, one without the US dollar greasing the wheels of commerce
BRIC & SCO summits: Reinventing the wheel

Updates: June 18, 2009
Fed Buying Treasuries; China Selling Treasuries

Russia, China to Promote Ruble, Yuan Use in Trade


Probably the most important meeting in the world is going on right now in Russia: but, only a few people will notice the article below. Yet, it details the most critical change occurring currently creating a new world order and eradicating the United States financial and military hegemonic plans. And the change will be soooo quiet. Not really quiet; it's just that people's attentions are being focussed elsewhere. The information is here for all who are interested in it.

As the dollar enters its death cycle, Americans are focussed on GM and Sarah Palin's new blooper. The fall of the dollar will be a big surprise for many....but don't worry, it will happen gradually (for the near future).

I highly recommend this long but lucid article on why the US Empire is being superceded by the power of Shanghai Cooperation Organisation SCO; and BRIC (Brazil, Russia, Inda and China). See When China awakes, it will shake the world. - Napoleon Bonaparte

If switching to another reserve currency or basket of currencies disables the American military stranglehold on earth, I say, Bring it on!

For those of you who prefer the Americanised version of news with its 'happy ending' see Dollar poses dilemma for Bric countries , the BBC version of the SCO summit.

De-Dollarization: Dismantling America’s
Financial-Military Empire
The Yekaterinburg Turning Point

by Michael Hudson
Global Research, June 13, 2009
Source
The city of Yakaterinburg, Russia’s largest east of the Urals, may become known not only as the death place of the tsars but of American hegemony too – and not only where US U-2 pilot Gary Powers was shot down in 1960, but where the US-centered international financial order was brought to ground.

Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).

The attendees have assured American diplomats that dismantling the US financial and military empire is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the United States, NATO or the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. That is what a multipolar world means, after all. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.


Yet the meeting has elicited only a collective yawn from the US and even European press despite its agenda is to replace the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry,1 suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”) built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a common ground when it comes to finding an alternative to the dollar and hence to the US ability to run balance-of-payments deficits ad infinitum.

What may prove to be the last rites of American hegemony began already in April at the G-20 conference, and became even more explicit at the St. Petersburg International Economic Forum on June 5, when Mr. Medvedev called for China, Russia and India to “build an increasingly multipolar world order.” What this means in plain English is: We have reached our limit in subsidizing the United States’ military encirclement of Eurasia while also allowing the US to appropriate our exports, companies, stocks and real estate in exchange for paper money of questionable worth.

Members of Shanghai Cooperation Organisation

"The artificially maintained unipolar system,” Mr. Medvedev spelled out, is based on “one big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks.”2 At the root of the global financial crisis, he concluded, is that the United States makes too little and spends too much. Especially upsetting is its military spending, such as the stepped-up US military aid to Georgia announced just last week, the NATO missile shield in Eastern Europe and the US buildup in the oil-rich Middle East and Central Asia.

The sticking point with all these countries is the US ability to print unlimited amounts of dollars. Overspending by US consumers on imports in excess of exports, US buy-outs of foreign companies and real estate, and the dollars that the Pentagon spends abroad all end up in foreign central banks. These agencies then face a hard choice: either to recycle these dollars back to the United States by purchasing US Treasury bills, or to let the “free market” force up their currency relative to the dollar – thereby pricing their exports out of world markets and hence creating domestic unemployment and business insolvency.

When China and other countries recycle their dollar inflows by buying US Treasury bills to “invest” in the United States, this buildup is not really voluntary. It does not reflect faith in the U.S. economy enriching foreign central banks for their savings, or any calculated investment preference, but simply a lack of alternatives. “Free markets” US-style hook countries into a system that forces them to accept dollars without limit. Now they want out.

This means creating a new alternative. Rather than making merely “cosmetic changes as some countries and perhaps the international financial organisations themselves might want,” Mr. Medvedev ended his St. Petersburg speech, “what we need are financial institutions of a completely new type, where particular political issues and motives, and particular countries will not dominate.”

When foreign military spending forced the US balance of payments into deficit and drove the United States off gold in 1971, central banks were left without the traditional asset used to settle payments imbalances. The alternative by default was to invest their subsequent payments inflows in US Treasury bonds, as if these still were “as good as gold.” Central banks now hold $4 trillion of these bonds in their international reserves – and these loans have financed most of the US Government’s domestic budget deficits for over three decades now! Given the fact that about half of US Government discretionary spending is for military operations – including more than 750 foreign military bases and increasingly expensive operations in the oil-producing and transporting countries – the international financial system is organized in a way that finances the Pentagon, along with US buyouts of foreign assets expected to yield much more than the Treasury bonds that foreign central banks hold.

The main political issue confronting the world’s central banks is therefore how to avoid adding yet more dollars to their reserves and thereby financing yet further US deficit spending – including military spending on their borders?

For starters, the six SCO countries and BRIC countries intend to trade in their own currencies so as to get the benefit of mutual credit that the United States until now has monopolized for itself. Toward this end, China has struck bilateral deals with Argentina and Brazil to denominate their trade in renminbi rather than the dollar, sterling or euros,3 and two weeks ago China reached an agreement with Malaysia to denominate trade between the two countries in renminbi.[4] Former Prime Minister Tun Dr. Mahathir Mohamad explained to me in January that as a Muslim country, Malaysia wants to avoid doing anything that would facilitate US military action against Islamic countries, including Palestine. The nation has too many dollar assets as it is, his colleagues explained. Central bank governor Zhou Xiaochuan of the People's Bank of China wrote an official statement on its website that the goal is now to create a reserve currency “that is disconnected from individual nations.”5 This is the aim of the discussions in Yekaterinburg.

In addition to avoiding financing the US buyout of their own industry and the US military encirclement of the globe, China, Russia and other countries no doubt would like to get the same kind of free ride that America has been getting. As matters stand, they see the United States as a lawless nation, financially as well as militarily. How else to characterize a nation that holds out a set of laws for others – on war, debt repayment and treatment of prisoners – but ignores them itself? The United States is now the world’s largest debtor yet has avoided the pain of “structural adjustments” imposed on other debtor economies. US interest-rate and tax reductions in the face of exploding trade and budget deficits are seen as the height of hypocrisy in view of the austerity programs that Washington forces on other countries via the IMF and other Washington vehicles.

The United States tells debtor economies to sell off their public utilities and natural resources, raise their interest rates and increase taxes while gutting their social safety nets to squeeze out money to pay creditors. And at home, Congress blocked China’s CNOOK from buying Unocal on grounds of national security, much as it blocked Dubai from buying US ports and other sovereign wealth funds from buying into key infrastructure. Foreigners are invited to emulate the Japanese purchase of white elephant trophies such as Rockefeller Center, on which investors quickly lost a billion dollars and ended up walking away.

In this respect the US has not really given China and other payments-surplus nations much alternative but to find a way to avoid further dollar buildups. To date, China’s attempts to diversify its dollar holdings beyond Treasury bonds have not proved very successful. For starters, Hank Paulson of Goldman Sachs steered its central bank into higher-yielding Fannie Mae and Freddie Mac securities, explaining that these were de facto public obligations. They collapsed in 2008, but at least the US Government took these two mortgage-lending agencies over, formally adding their $5.2 trillion in obligations onto the national debt. In fact, it was largely foreign official investment that prompted the bailout. Imposing a loss for foreign official agencies would have broken the Treasury-bill standard then and there, not only by utterly destroying US credibility but because there simply are too few Government bonds to absorb the dollars being flooded into the world economy by the soaring US balance-of-payments deficits.

Seeking more of an equity position to protect the value of their dollar holdings as the Federal Reserve’s credit bubble drove interest rates down China’s sovereign wealth funds sought to diversify in late 2007. China bought stakes in the well-connected Blackstone equity fund and Morgan Stanley on Wall Street, Barclays in Britain South Africa’s Standard Bank (once affiliated with Chase Manhattan back in the apartheid 1960s) and in the soon-to-collapse Belgian financial conglomerate Fortis. But the US financial sector was collapsing under the weight of its debt pyramiding, and prices for shares plunged for banks and investment firms across the globe.

Foreigners see the IMF, World Bank and World Trade Organization as Washington surrogates in a financial system backed by American military bases and aircraft carriers encircling the globe. But this military domination is a vestige of an American empire no longer able to rule by economic strength. US military power is muscle-bound, based more on atomic weaponry and long-distance air strikes than on ground operations, which have become too politically unpopular to mount on any large scale.

Click to enlarge image

On the economic front there is no foreseeable way in which the United States can work off the $4 trillion it owes foreign governments, their central banks and the sovereign wealth funds set up to dispose of the global dollar glut. America has become a deadbeat – and indeed, a militarily aggressive one as it seeks to hold onto the unique power it once earned by economic means. The problem is how to constrain its behavior. Yu Yongding, a former Chinese central bank advisor now with China’s Academy of Sciences, suggested that US Treasury Secretary Tim Geithner be advised that the United States should “save” first and foremost by cutting back its military budget. “U.S. tax revenue is not likely to increase in the short term because of low economic growth, inflexible expenditures and the cost of ‘fighting two wars.’”6

At present it is foreign savings, not those of Americans that are financing the US budget deficit by buying most Treasury bonds. The effect is taxation without representation for foreign voters as to how the US Government uses their forced savings. It therefore is necessary for financial diplomats to broaden the scope of their policy-making beyond the private-sector marketplace. Exchange rates are determined by many factors besides “consumers wielding credit cards,” the usual euphemism that the US media cite for America’s balance-of-payments deficit. Since the 13th century, war has been a dominating factor in the balance of payments of leading nations – and of their national debts. Government bond financing consists mainly of war debts, as normal peacetime budgets tend to be balanced. This links the war budget directly to the balance of payments and exchange rates.

Foreign nations see themselves stuck with unpayable IOUs – under conditions where, if they move to stop the US free lunch, the dollar will plunge and their dollar holdings will fall in value relative to their own domestic currencies and other currencies. If China’s currency rises by 10% against the dollar, its central bank will show the equivalent of a $200 million loss on its $2 trillion of dollar holdings as denominated in yuan. This explains why, when bond ratings agencies talk of the US Treasury securities losing their AAA rating, they don’t mean that the government cannot simply print the paper dollars to “make good” on these bonds. They mean that dollars will depreciate in international value. And that is just what is now occurring. When Mr. Geithner put on his serious face and told an audience at Peking University in early June that he believed in a “strong dollar” and China’s US investments therefore were safe and sound, he was greeted with derisive laughter.7

Anticipation of a rise in China’s exchange rate provides an incentive for speculators to seek to borrow in dollars to buy renminbi and benefit from the appreciation. For China, the problem is that this speculative inflow would become a self-fulfilling prophecy by forcing up its currency. So the problem of international reserves is inherently linked to that of capital controls. Why should China see its profitable companies sold for yet more freely-created US dollars, which the central bank must use to buy low-yielding US Treasury bills or lose yet further money on Wall Street?

To avoid this quandary it is necessary to reverse the philosophy of open capital markets that the world has held ever since Bretton Woods in 1944. On the occasion of Mr. Geithner’s visit to China, “Zhou Xiaochuan, minister of the Peoples Bank of China, the country’s central bank, said pointedly that this was the first time since the semiannual talks began in 2006 that China needed to learn from American mistakes as well as its successes” when it came to deregulating capital markets and dismantling controls.8

An era therefore is coming to an end. In the face of continued US overspending, de-dollarization threatens to force countries to return to the kind of dual exchange rates common between World Wars I and II: one exchange rate for commodity trade, another for capital movements and investments, at least from dollar-area economies.

Even without capital controls, the nations meeting at Yekaterinburg are taking steps to avoid being the unwilling recipients of yet more dollars. Seeing that US global hegemony cannot continue without spending power that they themselves supply, governments are attempting to hasten what Chalmers Johnson has called “the sorrows of empire” in his book by that name – the bankruptcy of the US financial-military world order. If China, Russia and their non-aligned allies have their way, the United States will no longer live off the savings of others (in the form of its own recycled dollars) nor have the money for unlimited military expenditures and adventures.

US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a word that Americans will hear much more in the future.

Notes

1 Andrew Scheineson, “The Shanghai Cooperation Organization,” Council on Foreign Relations,

Updated: March 24, 2009: “While some experts say the organization has emerged as a powerful anti-U.S. bulwark in Central Asia, others believe frictions between its two largest members, Russia and China, effectively preclude a strong, unified SCO.”

2 Kremlin.ru, June 5, 2009, in Johnson’s Russia List, June 8, 2009, #8.

3 Jamil Anderlini and Javier Blas, “China reveals big rise in gold reserves,” Financial Times, April 24, 2009. See also “Chinese political advisors propose making yuan an int’l currency.” Beijing, March 7, 2009 (Xinhua). “The key to financial reform is to make the yuan an international currency, said [Peter Kwong Ching] Woo [chairman of the Hong Kong-based Wharf (Holdings) Limited] in a speech to the Second Session of the 11th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), the country’s top political advisory body. That means using the Chinese currency to settle international trade payments …”

4 Shai Oster, “Malaysia, China Consider Ending Trade in Dollars,” Wall Street Journal, June 4, 2009.

5 Jonathan Wheatley, “Brazil and China in plan to axe dollar,” Financial Times, May 19, 2009.

6 “Another Dollar Crisis inevitable unless U.S. starts Saving - China central bank adviser. Global Crisis ‘Inevitable’ Unless U.S. Starts Saving, Yu Says,” Bloomberg News, June 1, 2009. http://www.bloomberg.com/apps/news?pid=20601080&sid=aCV0pFcAFyZw&refer=asia

7 Kathrin Hille, “Lesson in friendship draws blushes,” Financial Times, June 2, 2009.

8 Steven R. Weisman, “U.S. Tells China Subprime Woes Are No Reason to Keep Markets Closed,” The New York Times, June 18, 2008.

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