Monday, August 30, 2010

GATA figures heavily in Financial Times report on gold

The True Value of Gold

By Ellen Kelleher
Financial Times, London
Saturday, August 28, 2010

http://www.ft.com/cms/s/2/e9378c6c-b0b8-11df-8c04-00144feabdc0.html

The Baird & Co. warehouse sits in a dreary business park, half a mile east of London's City airport. A black Mercedes and a blue Jaguar near the entrance are the sole touch of glamour. Step inside and men in overalls are fashioning medallions, bars, and rings from molten gold, purified in vats next door.

From an office upstairs, Tony Baird, the company's managing director and a former coin dealer, presides over the hubbub. "Gold is stable," he says. "It's the value of money that goes up and down." Baird & Co. sells gold to everyone from pension funds to jewellers, and as the managing director says: "Our machines can't work fast enough these days."

Demand for gold has risen since September 2008, when the financial crisis began roiling the markets, following the collapse of Lehman Brothers. Investors may have lost faith in paper money, but by June this year, $81.6 billion was stored in gold-backed, exchange-traded funds -- more than eight times the amount invested in March 2006. Meanwhile, the Rand refinery in South Africa, which produces the world's most popular gold coin, the krugerrand, has been forced to increase production to keep up with demand. And in May the Austrian Mint sold 238,000 ounces of its Vienna Philharmonic coin, a six-fold increase in a year.

- - -

All the talk of gold infuriates some investors. They argue that it is too expensive, and its price could drop sharply if the hedge funds and asset managers with the largest positions in the market sell. "There is so much hype attached to gold mainly because it's perceived to be a safe haven," says Patrick Connolly, an adviser with the Bath firm AWD Chase de Vere. "But it doesn't give off income and the price is very high and depends solely on demand and supply. We are nervous of investing in any asset class that has risen so much in value."

But a cadre of loyalists claim that gold offers a hedge against both inflation and deflation and is a store of value when equity and bond markets fall apart. Their enthusiasm ranges from mild appreciation of gold's ability to outperform in a downturn to more zealous admiration.

One thing some "gold bugs" do not buy is the idea that gold is too expensive; in fact, they argue that the price would be much higher were it not for the manipulation of the market by central banks and bullion banks, which handle government trades.

"This price suppression is a scandal," says Bill Murphy, founder of the Gold Anti-Trust Action Committee (GATA). "And it's going to be huge when it is exposed."

Since 1999, GATA, one of many gold bug organisations promoting conspiracy theories, has fought to pull back the curtain on the gold market. "Gold is the economy's thermometer," says Murphy, "and every time its price goes up, it's bad for banks, for Wall Street, and politicians. So it's in their interest to keep it down."

Murphy is a rangy man in his mid-60s who enjoyed a short career as a wide-receiver for the Boston Patriots, the American football team now known as the New England Patriots, before he surfaced on Wall Street. Here, his experience was a riches-to-rags story. "I made a fortune in copper, then lost it," he says on the poolside veranda of the Raleigh Hotel in Miami's South Beach. He also runs a Web site aimed at gold bugs, Le Metropole Cafe (www.lemetropolecafe.com), with an annual membership fee of $299. It is from this electronic pulpit that Murphy argues that the cost of gold should rise, due to the instability of the world economy and markets.

"There hasn't been an independent audit of U.S. gold reserves since 1955," he says. "Don't you think that's a bit suspicious?"

Murphy is not alone in calling for a public audit of the gold supplies held by central banks and the International Monetary Fund (IMF). Ron Paul, a Republican congressman who ran for president as a Libertarian candidate in 1988, has been calling for an audit of the gold held by the U.S. Federal Reserve since 1982, when he served on the U.S. Gold Commission -- set up to examine the role of gold in the monetary system.

"We were in a financial crisis and inflation was high," Paul recalls. "But the Federal Reserve wasn't interested. I remember Paul Volcker [then chairman of the Federal Reserve] walking into a room in 1980 -- at the height of the financial crisis, when gold went up to more than $800 per ounce -- and saying, 'What's the price of gold?'" According to Paul, "Everyone knows a high gold price is a vote of no confidence in paper. That is why governments will manipulate and try to give you an artificial price for gold."

In his book "Gold, Peace, and Prosperity," Paul decries the end of the gold standard -- the practice of backing currencies with a fixed weighting in the metal, which took many forms through history. President Nixon brought an end to the gold standard in 1971, as part of his attempt to overcome the strain of funding the Vietnam war and the U.S.'s mounting trade deficit. Paul thinks the system of fiat money facilitates "governments' attempts to inflate, control the economy, run up deficits, and fight senseless wars." He worries too that both the supply of paper money and government debt levels are spiralling out of control.

"My beef is with the paper money," he says. "All the problems we're having today were destined to happen. Gold plays an important role in the monetary system because it restrains government spending." Without it, Paul argues, central banks have the power to print money without pausing to consider the consequences, and more impetus to spend it.

While they refuse to rule out the reintroduction of the gold standard if economic Armageddon descends, a clutch of economists contacted by the FT are quick to poke holes in Paul's ideas.

"The basic problem with the gold standard is that fluctuations in the demand and supply of gold destabilise the price of everything else," explains Ken Rogoff, a Harvard professor formerly in charge of research at the International Monetary Fund. "The only countervailing advantage is that gold arguably provides a better anchor for long-term price stability." However, even Rogoff believes we are witnessing an international scramble for gold.

Gold reserves have long been a measure of wealth, and shifts in the location of the world's biggest deposits testify to the fierce economic wars the U.S. and Europe are waging with China and India.

The U.S. still possesses the most gold, according to the World Gold Council, with 8,133.5 tonnes -- about 70 per cent of its foreign currency reserves. Germany is in second place, with 3,407 tonnes. Then comes the IMF (which is selling more than 160 tonnes on the market) with just under 3,000 tonnes; Italy, with 2,451.8 tonnes; and France, with 2,435.4 tonnes. Russia, which went on a buying spree last year, has 668 tonnes. The UK, meanwhile, has just 310 tonnes, and the European Central Bank 501.

And what of China?

It now produces more gold than any other country but ranks only eighth on the list. However, since 2003 it has increased its gold reserves from 400 tonnes to at least 1,054 tonnes by quietly buying from domestic mines and has made moves to liberalise its gold market ­further. These include increasing the number of banks permitted to trade bullion internationally and announcing measures that will encourage development of gold-linked investment products.

The changes come as the ­country's investors continue to pour record amounts of money into gold. Last year Chinese investors bought 73 tonnes of bullion, up from 18 tonnes in 2007.

The view on Wall Street and in the City is that China still buys gold from domestic mines as it must bulk up on the metal to diversify its portfolio as the size of its foreign reserves increases. "It would cause quite a stir if China came into the international market and tried to buy big amounts of gold," surmised one strategist. "But we still think they're ­accumulating gold, just not on the international market."

Other countries are likely to take action as well. According to Rogoff, "Emerging market central banks will probably want to raise the share of gold in their foreign exchange reserves, bringing them closer in line with advanced-country central banks."

In part, Rogoff explains, this is because the shift from an overreliance on the dollar to currencies such as the euro is not "sufficient diversification against the risk -- which is low, but certainly non-trivial -- of a generalised global inflation."

- - -

It's not just central bankers who are looking to acquire gold. ­Private bankers are on the hunt as well. Take Adam Fleming. The nephew of James Bond's creator Ian Fleming and heir to the Robert Fleming Holdings fortune (the family's merchant bank was sold to Chase Manhattan Bank in 2000 for $7.75 billion), Adam also professes to be a gold bug and an occasional supporter of GATA's causes.

The great-grandson of Robert Fleming, a Dundonian who made his fortune investing in U.S. railroads following the American Civil War, Adam Fleming joined the family business in 1970, honing his interest in mining in Johannesburg. He opened offices for the family business across southern Africa and served as chairman of Harmony Gold Mining after its acquisition of Kalahari Goldridge Mining.

Over tea at the Fleming family's private bank just off Trafalgar Square, he bemoans the opacity of the gold market. "Gold and silver are the DNA of currency," he says. "When the chips are down, precious metals are the only fungible currency."

Fleming believes we are seeing gold begin to reassert itself in real currency terms. "The levels of paper money have reached an extreme never seen before," he says. "I worry about the markets."

Fleming also argues that it's in the interest of governments for gold markets to remain somewhat opaque; that today's system of fiat money rests on keeping much of the inner workings of monetary policy secretive. "Politics and gold are uneasy bedfellows," he says. "And politicians like to control their currency."

Fleming is critical of Gordon Brown's decision as Chancellor, in 1999, to sell more than 400 tonnes -- about half -- of the Bank of England's gold reserves in a series of auctions and buy foreign currencies. The move was controversial, as the gold price hovered around an average of $275 an ounce, and it met with considerable opposition from the Bank of England. "It was an astonishingly imprudent mistake," Fleming says.

According to Fleming, manipulation of the gold market by governments is nothing new. He argues that it occurred as early as the mid-1930s, when Franklin Roosevelt forbade private gold ownership, apart from ­jewellery. As for GATA's hypothesis that central banks still engage in covert manipulation of the gold market, he feels that all currencies, not just gold, are regularly manipulated by the monetary authorities.

- - -

The recent rumours of manipulation first arose in 1998, following the collapse of the hedge fund, Long Term Capital Management (LTCM). One tale sent into cyberspace by GATA was that LTCM was short of more than 400 tonnes of gold at the time of its implosion. GATA questioned too whether the gold auctions the Bank of England arranged in the wake of that collapse were orchestrated to aid bullion banks' efforts to cover gold short positions. LTCM, however, denied the allegations.

LTCM's former lawyer, James Rickards, later told the Financial Times: "GATA raised this in 1998 out of thin air. It fitted their paradigm that central banks always and everywhere manipulate the gold market. As counsel, I wrote a letter including a sworn affidavit from a principal, rejecting the allegations and demanding a retraction. They printed the letter as 'proof' of the gold conspiracy. I gave up at that point because I realised they were not persuaded by evidence and I did not want to engage further."

- - -

With hindsight, it is clear that Gordon Brown's decision to auction off such a large chunk of the UK's gold reserves at such a low price was ill-advised. But the official aim of the programme was to shift more of the reserves into foreign currencies and other assets that bear interest. A report on the sale of the gold reserves conducted by the National Audit Office in January 2001 concluded that the auctions were "conducted according to current notions of best practice" and emphasised that central banks in Canada, the Netherlands, Switzerland, and Malaysia disposed of gold around the same time. "The overall aim was to restructure the UK's reserve holdings to achieve a better balance in the portfolio by increasing the proportion held in currency," the auditors wrote. "The decision was taken against a background of a decreasing market value of gold, which over the last 20 years has fallen from a high of $850 per ounce in January 1980 to an average annual price of under $300 per ounce since the start of 1998."

Many economists are also quick to pick apart GATA's hypothesis that attempts at market manipulation are suppressing the gold price. "Gold is a vast market, and it's not subject to national boundaries," says Jeffrey Nichols of American Precious Metals Advisers. "How it could be manipulated and still have risen so much over the past decade baffles me. The idea strikes me as almost ludicrous."

Martin Murenbeeld of Dundee Wealth Economics is more succinct. "It's bunk," he says. "It's a massive conceit on the part of gold people to think that gold is so important that the Federal Reserve and the president of the United States are out there manipulating the gold price."

They may be bunk, of course, but such conspiracies only add to gold's mystique. And the whisper campaigns attract a sizeable congregation at Bill Murphy's Le Metropole Cafe. "There are still plenty of deluded individuals sufficiently conditioned by governments and the mainstream media that they believe that the gold market is free and fair," wrote GATA supporter Paul Mylchreest in Thunder Road, his Internet newsletter. And even those who take a sceptical view of GATA still appreciate that the law of supply and demand could support the gold price, which hovered around $1,220 this week, for some time to come. The volumes being extracted by miners in South Africa, Australia, China, and the western United States are falling. At the same time, central banks, pension funds, and people on the high street are badgering bullion dealers for more.

- - -

The rising price of gold also coincides with public disaffection with our governments' inability to resolve our difficulties. Poor economic reports keep rolling in. George Osborne has asked UK government departments to outline cuts of up to 40 per cent, in one of the toughest spending squeezes of any advanced economy in recent times. In the U.S., fewer jobs than expected were added to the payrolls in July, while Ben Bernanke, chairman of the Federal Reserve, has said he believes the ­Federal Budget is on an "unsustainable" path. Looking ahead, the world may be entering the second leg of a W-shaped recession, sinking again just as we thought the economy was set to improve.

It is not surprising, then, that people are returning to gold. Arguably, buyers' interest is not so much a vote of confidence in precious metals as a lack of confidence in central banks and governments. We may be witnessing nothing less than a populist uprising against the financial system.

Maybe it just comes down to, as a Financial Times reader pointed out in a letter to the editor last month (July 6), whether you can trust politicians and central bankers. He quoted George Bernard Shaw: "You have to choose between trusting the natural stability of gold and the natural stability of the honesty and intelligence of the members of the government. And with due respect for these gentlemen, I advise you .. to vote for gold."

-----

Asteroid Discovery From 1980 - 2010

Instructions for installing WRH iPhone app (beta)!

The semi-official WRH iPhone app (Beta) does not go through the Apple iPhone App Store, because they require a rather sizeable fee to participate in the program, and I cannot afford that for something I am giving away for free. Also, since this app does not used compiled code (in fact feel free to take it apart for your own use) I don't need to bother with a regular installation. It is really just an HTML5 page saved to the home screen!

Step 1:

On your iPhone, open up the Safari Browser

Do not use any other iPhone browser for this.

Step 2:

Enter the URL http://whatreallyhappened.com/iPhone/index.html exactly.

You will see the WTH app as a web page. And you can even use all the links from here if you wish, but please continue to save the app to your desktop.

At the very bottom of the Safari window, press the "+" symbol.

Step 3:

Press the button that says "Add to Home Screen"

Step 4:

You can leave all the settings as they are and just press "Add" at upper right.

Step 5:

Safari will exit and the semi-official WRH App (Beta) will be on your home screen

This app is not endorsed by or approved of by Apple. This app is in beta test stage and is provided without guarantees or warranties of any kind whatsoever (but I've had it on my own iPhone for a month now without a problem). Please email comments and criticisms to The software guru.

Las Vegas logs 5 murder-suicides since Aug. 7

LAS VEGAS (AP) - Police say murder-suicides are on the rise in the Las Vegas area because of a bad economy.

Las Vegas police say there were five murder-suicides from Aug. 7 to Aug. 20 for a total of 10 victims.

A gun was used in each case. In four of the five cases, the shooter was a man.

In one instance, a housekeeper found Donald and Barbara Romano, both 74, dead at their million-dollar Summerlin home. The couple, heavily involved in the real estate business, had been financially crippled by the recession.

In another case, a bystander was wounded.

The numbers of murder-suicides are apparently up, but no law enforcement agency keeps track of them. The FBI tracks homicides and health agencies track suicides, but nobody puts the numbers together.

___

Canada Opens Arctic To NATO, Plans Massive Weapons Buildup



The government of Prime Minister Stephen Harper recently concluded the largest of a series of so-called Canadian sovereignty exercises in the Arctic, Operation Nanook, which ran from August 6-26.

Harper, Minister of National Defence Peter MacKay and Chief of the Defence Staff of the Canadian Forces General Walter Natynczyk visited the nation's 900 troops participating in the "Canadian Forces' largest annual demonstration of Canada's sovereignty in the Arctic" [1] which included "Canada's air force, navy, coast guard...testing their combat capabilities in the frigid cold." [2]

Nanook military exercises were commenced in 2007 when Russia renewed its claims to parts of the Arctic and resumed air patrols in the region after an almost twenty year hiatus. They are complemented by two other Canadian military drills in the region, Operation Nunalivut in the High Arctic and Operation Nunakput in the western Arctic.

Canada is formally involved in territorial disputes with two other Arctic claimants: The United States over the Beaufort Sea lying between Canada's Northwest Territories and Yukon Territory and the American state of Alaska, and Denmark over the Hans Island between Canada's Ellesmere Island and Denmark's Greenland possession on the other end of the Arctic.

Four of the five nations with Arctic claims, all except Russia, are founders of the North Atlantic Treaty Organization whose charter commits member states to mutual military assistance.

With the melting of the polar ice cap and the opening of the fabled Northwest Passage from the Atlantic to the Pacific Oceans for the first time in recorded history, the scramble for the Arctic - reported to contain 30 percent of the world's undiscovered natural gas and 13 percent of undiscovered oil according to last year's U.S. Geological Survey - is under way in earnest. The military value of the navigability of the passage is of even greater and more pressing significance.

The George W. Bush administration's National Security Presidential Directive 66 of January 12, 2009 states:

“The United States has broad and fundamental national security interests in the Arctic region and is prepared to operate either independently or in conjunction with other states to safeguard these interests. These interests include such matters as missile defense and early warning; deployment of sea and air systems for strategic sealift, strategic deterrence, maritime presence, and maritime security operations; and ensuring freedom of navigation and overflight.” [3]

The U.S. insists that the Northwest Passage is open to international navigation while Canada claims it as solely its own. Yet Ottawa has accommodated Washington at every turn while persisting in saber-rattling comments and actions alike vis-a-vis Russia.



Sixteen days after the release of the White House's Arctic directive of last year NATO conducted a two-day Seminar on Security Prospects in the High North in Iceland attended by the military bloc's secretary general, its two top military commanders and the chairman of its Military Committee, and stated that “Clearly, the High North is a region that is of strategic interest to the Alliance.” [4]

Although Canada's territorial disputes in the Arctic are with fellow NATO members the U.S. and Denmark, the three nations have recently coordinated their strategies and in this year's Operation Nanook have for the first time collectively participated in military exercises in the Arctic region.

In mid-July NATO's chief European military commanders, Admiral James Stavridis, Supreme Allied Commander Europe, and General Sir John McColl, Deputy Supreme Allied Commander Europe, arrived in the Canadian capital at the invitation of the nation's military chief, General Walter Natynczyk. The three consulted on "how to take the Alliance forward" and Stavridis "conveyed his latest appraisal of NATO's progress in Afghanistan and commended Canada on its contributions to NATO's efforts around the world." [5]

Canadian Defence Minister MacKay stated almost two years ago: “We are concerned about not just Russia’s claims through the international process, but Russia’s testing of Canadian airspace and other indications...(of) some desire to work outside of the international framework. That is obviously why we are taking a range of measures, including military measures, to strengthen our sovereignty in the North.” [6]

A year ago Canada and the U.S. conducted a 42-day joint Arctic expedition to survey the continental shelf for future bilateral demarcation, following a more modest effort along the same lines in 2008 and followed this year by one with U.S. and Canadian ships from August 7 to September 3. The latter was announced two weeks after a Russian research vessel left St. Petersburg on a mission to delimit the borders of Russia's Arctic continental shelf.

The U.S. State Department described the purpose of this year's expedition: "The mission will help delineate the outer limits of the continental shelf in the Arctic Ocean for the U.S. and Canada, and will also include the collection of data in the disputed area where the U.S. and Canada have not agreed to a maritime boundary." [7] It is being held in the Canada Basin, the Beaufort Shelf, and the Alpha Mendeleev Ridge. The last, along with the Lomonosov Ridge, is the basis of Russian Arctic claims.

On May 14 Canada and Denmark signed a military agreement, a memorandum of understanding pledging to collaborate more closely in the Arctic "through enhanced consultation, information exchange, visits, and exercises," according to the Canadian Forces. [8] The preceding month Denmark deployed a unit to participate in the Operation Nunalivut exercise in the High Arctic.

The Royal Danish Navy sent the HDMS Vaedderen ocean patrol vessel and the HDMS Knud Rasmussen offshore patrol vessel to join the recently concluded Nanook 10 exercises, where they were joined by the U.S. Second Fleet's naval destroyer USS Porter and the U.S. Coast Guard Cutter Alder "for the purpose of exercising and increasing...interoperability with Arctic allies."

As for the Canadian contribution, "The Air Force [provided] air movement and mission support through the CC-177 Globemaster III, CC-130 Hercules, CP-140 Aurora, CH-146 Griffon, and CC-138 Twin Otter aircraft.

"The maritime component [included] Her Majesty's Canadian Ships (HMCS) Montreal, Glace Bay and Goose Bay; and Canadian Coast Guard Ships CCGS Des Groseilliers and CCGS Henry Larsen." [9]

Military personnel involved included "About 900 Canadian troops [who patrolled] parts of the Eastern and Northern Arctic by air, land and sea." Another "600 military personnel from the Danish Royal Navy, the U.S. Navy and the U.S. Coast Guard are also [took] part in the operation." [10]

In the words of Lieutenant Commander Albert Wong of Canada Command, "They're our allies. Collaboration is part of what Canada does." [11]

This year's exercise was based in Resolute Bay in the Nunavut federal territory where the Harper government is building a new army Arctic warfare training center in Resolute and a deep-sea port for the Nanisivik Naval Facility to be constructed on Baffin Island. Canadian Navy Lieutenant Commander Robert Houle said before the event that "2010's military operation will push further north than in past years." [12] That is, north of the Arctic Circle for the first time.

"The US Navy 2nd Fleet, the US Coast Guard and the Royal Danish Navy...joined in the war games in an effort to enhance the allies' capabilities to cooperate in Arctic waters." [13]

In fact the NATO allies collaborated to an unprecedented degree, as "Danish and American vessels" conducted "ocean exercises throughout eastern Nunavut." [14]

After visits by Canada's defense and military chiefs to inspect the multinational war games, Prime Minister Harper arrived in Resolute on August 25, the penultimate day of the 20-day military maneuvers, to - in the words of one of the nation's main news agencies - rally the 1,500 Canadian, American and Danish troops present. [15]

Harper's visit to inspect the exercise occurred only hours after another - potentially dangerous - publicity stunt by his government: Dispatching CF-18 fighter jets (variants of the American F/A-18 Hornet) to allegedly ward off two Russian Tupolev Tu-95 (Bear) strategic bombers patrolling off Canada's northern border, "something the Russian military does frequently." [16]

Harper's press secretary, Dimitri Soudas, "said the two CF-18 Hornet fighters visually identified the two Russian aircraft approximately 120 nautical miles north of Inuvik in Northwest Territories," [17] over international waters.

The timing of the Canadian action, as that of its announcement, was calculated. As was a comparable incident in February of 2009 when then recently installed U.S. President Barack Obama paid his first visit abroad to Ottawa, to meet with Harper, and his host scrambled warplanes to intercept a Russian Tu-95 bomber - on a routine mission thousands of kilometers from the Canadian capital - in a show of bravado and of loyalty to his ally south of the border.

"The Russians said then the plane never encroached on Canadian airspace and that Canada had been told about the flight beforehand." [18]

Last year Canada's prime minister and defence minister made the following comments:

Harper: “We have scrambled F-18 [CF-18] jets in the past, and they’ll always be there to meet them.”

MacKay: “When we see a Russian Bear [Tu-95] approaching Canadian air space, we meet them with an F-18.” [19]

A few days before Operation Nanook began, July 28, Canada also deployed CF-18 fighters against Russian Tu-95 bombers "as debate rage[d] over whether Canada needs the next generation of fighter jets to replace the nearly 30-year-old CF 18s. The Harper government has committed to buying 65 F-35 stealth fighters at a cost of $9 billion. Critics have said such Cold War-type jets are no longer needed." [20]

The same source provided background information concerning what is being fought over:

"Canada is in a race with Russia and other Arctic nations to lay claim to the frozen territory that may hold untold treasures.

"Geologists believe the Arctic shelf holds vast stores of oil, natural gas, diamonds, gold and minerals. A 2007 Russian intelligence report predicted that conflict with other Arctic nations is a distinct possibility, including military action 'in a competition for resources.'" [21]



Regarding the later occurrence on August 24, "The Prime Minister's Office used the incident to promote Ottawa's plan to buy 65 stealth fighter jets for $16 billion." [22]

The discrepancy in (Canadian) dollar amounts is attributable to Ottawa's attempt in May to underestimate the actual cost of the purchase when Defence Minister MacKay said "There is eye-watering technology now available, and a fifth-generation fighter aircraft will be brought to Canada after the year 2017." [23], but failed to disclose the total cost.

When in-service support and other additional outlays are included, the total package will be $16 billion, according to a major Canadian newspaper "one of the most expensive military equipment purchases ever." [24]

In fact the F-35 Lightning II fifth generation stealth fighter project also has been estimated to be "the Pentagon's most expensive weapons program" at a cost of $323 billion for 2,443 of the warplanes. [25]

Last month Defence Minister MacKay confirmed that Canada will buy 65 of the Joint Strike Fighters. At the same time Ottawa announced that the $3 billion Joint Support Ship project will be restarted, as "the military [wants] Joint Supply Ships to be capable of carrying army vehicles and to provide support to ground forces ashore. The ships would also have an air-force element on board, having helicopters and repair facilities for those aircraft. A hospital would also be included on the vessels." [26]

On August 25 Dmitri Soudas, Harper's director of communications, trumpeted the news of the non-encounter between Canadian and Russian military aircraft and laid the bravado on thickly - and not without a purpose. His comments included:

"Thanks to the rapid response of the Canadian Forces, at no time did the Russian aircraft enter sovereign Canadian airspace.

"The Harper Government has ensured our Forces have the tools, the readiness and the personnel to continue to meet any challenges to Canadian sovereignty with a robust response.

"This is true today, it will be true tomorrow and it will be true well into the future.

"The CF-18 is an incredible aircraft that enables our Forces to meet Russian challenges in our North. That proud tradition will continue after the retirement of the CF-18 fleet as the new, highly capable and technologically-advanced F-35 comes into service. It is the best plane our Government could provide our Forces, and when you are a pilot staring down Russian long range bombers, that's an important fact to remember." [27]

The Associated Press reported on the above statement that "Soudas noted...Canada's recent purchase of 65 F-35 Joint Strike Fighter jets from U.S. aerospace giant Lockheed Martin Corp. The $8.5 billion purchase, one of the biggest military equipment purchases in the country's history, was due to be debated at a parliamentary defense committee hearing on Wednesday. [August 25, the date of Soudas' comments]. The jets will replace the Air Force's aging fleet of CF-18s." [28]

According to a Canadian journalist:

"This week...we learned that the Cold War is not, in fact, over and that Russia remains an active threat in the north....Harper's press spokesman, noted Sovietologist Dimitri Soudas, explicitly turned the Russian flyby into an argument for a $16-billion, sole-sourced upgrade of Canada's fighter-plane fleet." [29]



Canada requires an adversary to justify large-scale arms acquisitions. In the past three years it has bought and leased 120 Leopard tanks from Germany and the Netherlands for the war in Afghanistan. It has purchased and used Israeli-made Heron drones (unmanned aerial vehicles) for the same war theater and beyond, one of which crashed near a military base in Alberta last month knocking out power lines.

It has also acquired Chinook, Griffon and Mi-8 helicopters for NATO's war in South Asia, where it has deployed 2,830 troops and where 151 of its soldiers have been killed.

The Polar Epsilon spaced-based satellite project is being developed for the Arctic, and while in Resolute Bay on Wednesday Prime Minister Harper reiterated that the RADARSAT Constellation Mission, a three-spacecraft fleet of satellites that is the centerpiece of Polar Epsilon, "will provide the Canadian military with daily coverage of Canada's land mass and ocean approaches 'from coast-to-coast-to-coast, especially in the Arctic.'" [30]

In June defense chief MacKay disclosed that Canada will spend over $30 billion "to build 28 large vessels for the Canadian Coast Guard and navy, as well as 100 smaller ships." [31]

Canada is, as NATO's top military commander Admiral Stavridis remarked in Ottawa last month, providing the Western military bloc and the Pentagon indispensable services around the world. In the Arctic as much as if not more than anywhere else.

Related articles:

Canada: Battle Line In East-West Conflict Over The Arctic
http://rickrozoff.wordpress.com/2009/08/31/canada-battle-line-in-east-west-conflict-over-the-arctic

Encroachment From All Compass Points: Canada Leads NATO Confrontation With Russia In North
http://rickrozoff.wordpress.com/2009/09/01/encroachment-from-all-compass-points-canada-leads-nato-confrontation-with-russia-in-north

Loose Cannon And Nuclear Submarines: West Prepares For Arctic Warfare
http://rickrozoff.wordpress.com/2009/12/01/loose-cannon-and-nuclear-submarines-west-prepares-for-arctic-warfare

Canada: In Service To The Pentagon And NATO At Home And Abroad
http://rickrozoff.wordpress.com/2009/08/28/canada-in-service-to-the-pentagon-and-nato-at-home-and-abroad

Notes

1) Xinhua News Agency, August 7, 2010
2) Agence France-Presse, August 25, 2010
3) NATO’s, Pentagon’s New Strategic Battleground: The Arctic
Stop NATO, February 2, 2009
http://rickrozoff.wordpress.com/2009/08/26/natos-pentagons-new-strategic-battleground-the-arctic
4) Ibid
5) North Atlantic Treaty Organization
Supreme Headquarters Allied Powers Europe
July 11, 2010
6) Canwest News Service, September 12, 2008
7) Russian Information Agency Novosti, July 27, 2010
8) Nunatsiaq News, May 24, 2010
9) Xinhua News Agency, August 7, 2010
10) CTV, August 25, 2010
11) Nunatsiaq News, June 16, 2010
12) CBC News, August 3, 2010
13) Agence France-Presse, August 25, 2010
14) CBC News, August 18, 2010
15) Canadian Press, August 25, 2010
16) CTV, August 25, 2010
17) Xinhua News Agency, August 25, 2010
18) Associated Press, August 25, 2010
19) Encroachment From All Compass Points: Canada Leads NATO Confrontation With
Russia In North
Stop NATO, August 5, 2009
http://rickrozoff.wordpress.com/2009/09/01/encroachment-from-all-compass-points-canada-leads-nato-confrontation-with-russia-in-north
20) Toronto Sun
Quebec Media, Inc. Agency
July 30, 2010
21) Ibid
22) CTV, August 25, 2010
23) Canwest News Service, May 28, 2010
24) Ottawa Citizen, July 12, 2010
25) PBS Newshour, April 21, 2010
26) Ottawa Citizen, July 12, 2010
27) CBC News, August 25, 2010
28) Associated Press, August 25, 2010
29) Susan Riley, The Russians aren't coming
Ottawa Citizen, August 27, 2010
30) Agence France-Presse, August 25, 2010
31) Xinhua News Agency, June 4, 2010


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The Great Collapse of the Chicago Climate Exchange

Plagued by a free fall in carbon emissions prices and the perennial failure of Washington to pass any binding Cap and Trade Bill, it seems that the Chicago Climate Exchange is on its last leg, announcing that it will be scaling back its operations.

Chicago Climate Exchange or CCX, is North America’s sole voluntary, legally binding greenhouse gas trading and carbon “offset” projects in North America and Brazil. Rueters reported on Aug 11th that Intercontinental Exchange Inc, the operating body who purchased the struggling CCX in May this year, will be scaling back major operations this month, a move that includes massive layoffs. This is likely due to the complete market free-fall of their only product… carbon emissions.

Anthony Watts from the climate watchdog website Watts Up With That posts a graph from the CCX which shows carbon prices dropping like a stone, bottoming out this week at the embarrassingly low figure of 10 cents per tonne. Compare this to trading prices during its brief hay day in May and June 2008 where market highs reached $5.85 and $7.40 respectively, and you can say that most investors will be evaluating carbon as one of today’s more worthless commodities.

What a difference a year makes. It’s been nine months since the world watched the bottom drop out of a much-hyped UN Climate Summit in Copenhagen back in Dec 2009, with its neo-colonial agenda exposed within the first days of the summit. One of the keystones of the Climate Change alarmist movement was its audacious attempt to create a functioning market by monetizing the atmospheric trace gas known as CO2. Since last year, a number of scandals like Climategate have penetrated mainstream conversation, putting a rather awkward limp in the once nimble Man-Made Global Warming movement. Hence, apocalyptic frenzies and fears have dissipated and carbon prices around the world have continued to be pummelled by the market.

A Financial ‘Boondoggle’

Unlike most real markets, the carbon market was created by banks and governments so that new investment opportunities could seamlessly dovetail with specific government policies. It’s a fantasy casino based on a doctrine of pure science fiction. Certainly, gaming the system has always been at the top on the agenda of the new green eco-trader. Most people, investors included, might innocently ask the fundamental question, “what’s the point of having a CO2 commodities market?” The answer to that question should be obvious by now, and you can certainly look to the initial stakeholders in the various international climate trading bodies for a ‘Who’s Who’ list of individuals that have actively been pushing the global warming concept from its inception.

As American’s own CCX nears total collapse, climate alarmists and their vested partners are pinning their hopes on Europe. With most European countries happily singing from the same EU song sheet, institutional investment in the carbon market has seen a slightly more sustained existence. Europe’s socialized historical habit of subsidizing anything and everything means that it has been a better safe haven for something as radical as a carbon market. Many financial analysts would say that carbon requires a relatively steady price of around €40 a tonne in order to spur industrial investment in cleaner technologies, but unfortunately, Copenhagen failed and the announcements of emissions cuts are not coming as expected. Perhaps the reality gap is beginning to set in between governments’ political capital in climate change and the peoples’ ability to believe in global warming. Either way, the market will not be able to deliver such lofty figures, which is why real investors are getting out of the carbon market in 2010.

The front end of this game of ‘supply and demand’ is heavily reliant on EU governments making lofty announcements about future emissions targets. The logic here is that cutting emissions increases demand for EU carbon allowances. In the absence of such a restriction of the market, it was expected that the price would fall, and naturally that’s exactly what happened. In 2008, it cost €31 to pump out a ton of CO2, but today it will set you back about half that at €15. You will be hard pressed to find any financial wizard/pundit giving a sermon on a bullish carbon market in the near future- it’s just not happening anymore.

On the back end of the game, things are a bit shadier to say the least- some might call it a recipe for corruption. The industrial monopoly power giants and other green businesses who are ‘well connected’ are of course, being allocated free EU Carbon Allowances until 2012, but from 2013 some sectors will have to pay for 20% of their allowances (those with weaker political influence in Brussels), rising each year to 60% in 2020. Many government/power company ‘green initiatives’ will automatically result in high energy price to consumers, which naturally means guaranteed profit increases for those same corporations (see Enron).

Off-set scam

Carbon trading is underpinned by an equally dodgy product called ‘carbon off-sets”, most of which are taken on face value by the buyer. Not based on an actual ton of carbon emitted, rather governing agencies are issuing certificates for a fictional commodity of emissions not emitted. A rather wild concept. Worse than this however, it is near impossible to verify which of these thousands of so-called off-set projects in the developing world are actually legitimate. In the coming years, we will no doubt see or read a number exposes detailing the depths of this fantastic green scam.

Get in early and then get out

The formula: create an investment vehicle, hype the new commodity, buy low, watch share prices rise, sell high. The result is money, lots of it. In some cases it’s been about driving up the share prices of companies Gore’s group has already invested in. The fact that the original shareholders of the CCX have already bailed out with their sale to Intercontinental Exchange Inc. for a modest $600 million earlier this year only reinforces the reality that its creators have already lost faith in their elaborate invention. Likewise, the self-styled leaders of the climate change crusade Maurice Strong and Al Gore have already cashed in carbon fortunes already, whilst other active politicians like US President Barrack Obama, and United Nations IPCC Chief Rajendra K. Pachauri are engaged in similar play with their own financial interests in the Carbon Markets.

Like all government rigged quasi-commercial schemes, the only real beneficiaries are the initial shareholders- a special inner circle who are naturally ahead of the curve knowing about legislation and policy before it comes into existence. They are sometimes called the great and the good, the in-crowd, or the smartest men in the room (again, see Enron). Of these, almost all have jumped ship out of the market while their preferred shares- or in the case of the larger energy and manufacturing monopolies, their gratis “carbon allowances” given to them free by their governments- are still worth something. If you’re on the inside, it’s simple: get in early, make money and then get out.

Climate change based on science fiction

Pointing out the obvious is always a painful thing in the world of human affairs. The real reason for the complete and total failure of the concept behind trading an atmospheric gas like CO2 is something few within the green block will dare to even mention now, and it’s the same reason why the whole movement will go down in history as one of the most flamboyant efforts in the history of economics. It’s not just hubris. The whole idea behind making CO2 a commodity was to make it expensive and thus reduce the amount produced, which would (they hoped) reduce the effect of anthropogenic(man-made) global warming, or ‘climate change’ as it’s now commonly referred to. There was only one massive problem with this equation- there has been no global warming since 1998. So despite the hundreds of millions, perhaps billions spent on research and computer models addressing this possibility, no scientist or body has been able to show that man’s CO2 contribution has had any effect on the global temperature. Another massive blind spot for climatists is their almost religious denial that the sun might have any effect on the earth’s climate (studies show that it does, of course)- a major sore spot in any debate on global warming.

The movement was a merger of radical Collectivist ideas and huge financial opportunities. Men like Maurice Strong looked for their moral positions to be anchored by a small group of hand-picked ‘scientific authorities’, a latter day technocracy if you will. On the opportunist side we also see those same scientists who have made their careers, many millions of dollars over the last decade alone, on grants to prove that global warming was somehow happening. Other financial opportunists will include Al Gore, scores of companies like Carbon Fund and a number of charities soliciting donations to save the planet, all of whom were hoping to cash in on this non-event until its financial opportunities eventually die out.

If you step back and marvel at the timing and combination of the climate change movement and carbon trading business it’s enough to make you dizzy. Never has the world seen a more stunning collusion between government and big business, a tango that makes fascist enterprises like Mussolini’s Italy or Franco’s Spain look like student internships.

Still hoping for some silver lining in this otherwise cloud of failure, most diehard green activists are laying the blame on governments for giving away too many free carbon coupons in recent years. Certainly there is a valid economic point there, but greens were all too eager to get into bed with Wall Street and the Fabian Socialists in order to realize their dream of a new utopia. The current color-blind global financial system based on derivatives, futures and sub-prime gambling products will eventually take down the carbon market altogether, as speculators prey on untapped markets, selling more worthless paper to an ever decreasing naive minority. In the wake of the dot com boom and the housing boom, Wall Street certainly tried to make environmentalism sexy and trendy for investors, but we can see now that the results speak for themselves- CO2, a penny stock for kids. “Roll up, roll up. Anyone want a tonne of CO2 for 10 cents?”

In the end it’s just another age-old tale of grovelling academics, big business, politics, power and money. So it doesn’t require an expert to tell you that the carbon market was doomed to fail from the beginning.

—-

US-Europe scandal may paralyze IMF

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International Monetary Fund. © Flickr.com/David Boyle/cc-by

The International Monetary Fund (IMF) may lose its board of directors amid the escalating scandal between the United States and Europe over the ways to reform this financial institution. The scandal came as a bombshell, while IMF’s spokesman Gerry Rice said there was nothing to worry about.

It all started with Europe’s refusal to give some of its 9 seats in the 24-member board of the International Monetary Fund to emerging markets. It should be noted that the fund’s lending capacity is distributed in compliance with the members’ voting power. Naturally, the European board, which has been dominating since the IMF was founded, will not yield power and thus sabotage the decision made by the leaders of last year’s G20 summit in Pittsburg.

At the summit, the sides reached a historical compromise, assuming obligations to redistribute IMF quota shares in favor of developing economies, expert with the Finance Academy of the Russian Government Boris Rubtsov said.

Obviously, while China, India, Brazil, and Russia are gaining strength, their role in decisions by the International Monetary Fund should also increase. I think it would be logical if both the US and Europe yield some of their seats, said Rubtsov.

IMF’s new executive board is expected to assume office on November 1st this year. According to the organization’s official spokesman Gerry Rice, there is no cause for concern, even though the US and Europe failed to reach a compromise within a year. If the latter eventually refuses to lose some seats, Washington will not give ground too. The US may once again use the blocking stake and frustrate the decision on re-electing the current board of directors, as it happened last week. The International Monetary Fund will prove incapable of making any further decisions unless a compromise is reached between the two sides.

Of course, it is possible to form a restricted board, but in this case African countries will be out of the running. And this may result in a more prominent political scandal.

Remaking the board members’ areas of responsibility will also prove painful, since many of them represent the interests of not only their countries.

Another obstacle for seeking a possible way out is Europe’s inability to promptly make permanent decisions, especially if it needs to yield some of the privileges to developing countries.

Family win 18 year fight over MMR damage to son: £90,000 payout is first since concerns over vaccine surfaced

A mother whose son suffered severe brain damage after he was given the controversial MMR vaccine as a baby has been awarded £90,000 compensation.

The judgment is the first of its kind to be revealed since concerns were raised about the safety of the triple jab.

Robert Fletcher, 18, is unable to talk, stand unaided or feed himself.

Lovely boy: Robert Fletcher with his mother Jackie at the age of  14

Lovely boy: Robert Fletcher with his mother Jackie at the age of 14

He endures frequent epileptic fits and requires round-the-clock care from his parents Jackie and John, though he is not autistic.

He suffered the devastating effects after being given the combined measles, mumps and rubella vaccine when he was 13 months old.

The Department of Health had always denied that the jab was the cause of Robert’s disability.

But now, in a judgment which will give hope to hundreds of other parents whose children have been severely affected by routine vaccinations, a medical assessment panel consisting of two doctors and a barrister has concluded that MMR was to blame.

Robert’s mother Jackie said the money would help with his care, though she described the amount as ‘derisory’.

Her first application for compensation under the Government’s Vaccine Damage Payment Scheme was rejected in 1997 on the grounds that it was impossible to prove beyond reasonable doubt what had caused Robert’s illness.

But Mrs Fletcher appealed and in a ruling delivered last week, a new panel of experts came to a different conclusion.

Healthy: Robert in the bath as baby before he had the MMR jab

Healthy: Robert in the bath as baby before he had the MMR jab

In a six-page judgment, they said: ‘Robert was a more or less fit boy who, within the period usually considered relevant to immunisation, developed a severe convulsion... and he then went on to be epileptic and severely retarded.

‘The seizure occurred ten days after the vaccination. In our view, this cannot be put down to coincidence.

'It is this temporal association that provides the link. It is this that has shown on the balance of probabilities that the vaccination triggered the epilepsy.

'On this basis, we find that Robert is severely disabled as a result of vaccination and this is why we allowed the appeal.’

The ruling will reignite the debate over the safety of common childhood vaccines, although it makes clear that Robert’s case does not involve autism.

There is one other reported case of a family being given compensation as a result of an MMR jab.

But Mrs Fletcher said she believed the compensation award to Robert was the first to a surviving MMR-damaged person since controversy erupted in 1998 when the now discredited Dr Andrew Wakefield raised concerns about a possible link between the combined MMR injection and autism.

He has since been struck off the medical register.

Affected: Robert with his parents as a five-year-old. He is unable  to stand, feed himself and speaks very little

Affected: Robert with his parents as a five-year-old. He is unable to stand, feed himself and speaks very little

The Government refuses to say how many awards have been directly attributed to this jab rather than other inoculations against illnesses such as diphtheria or whooping cough.

Details of successful claims involving vaccine-damaged children are seldom publicised because the Department of Health is thought to be anxious not to encourage a rush of applications.

Figures released in 2005 under the Freedom of Information Act revealed that tribunals had paid out £3.5 million over the previous eight years.

The Department for Work and Pensions, which administers the Vaccine Damage Payment Scheme, said: ‘We do not hold any information on how many awards have been MMR-related.

'It is not a requirement when a case is being assessed for the medical adviser to state which vaccine the damage has been attributed to.

'Nor is it a requirement to list the disabling condition that gave rise to the award.’

The controversy over a suggested link between MMR and autism erupted in 1998 when Dr Wakefield published a paper in The Lancet medical journal.

His work has since been discredited and earlier this year Dr Wakefield, who has moved to America, was struck off the medical register after the General Medical Council ruled that he had acted against the interests of patients and ‘failed in his duties as a responsible consultant’.

Campaign: Robert's mother Jackie set up JABS - a pressure group  which provides advice and support to families affected by vaccinations

Campaign: Robert's mother Jackie set up JABS - a pressure group which provides advice and support to families affected by vaccinations

Robert Fletcher does not suffer from autism. But Mrs Fletcher, from Warrington, Cheshire, said the ruling would give hope to hundreds of other parents fighting to prove that their children’s disabilities were caused by the MMR injection.

Mrs Fletcher set up and runs pressure group JABS - Justice, Awareness and Basic
Support.

Around 2,000 families seeking compensation for their vaccine-damaged children are registered with the group, which provides advice and support.

‘My husband John and I have battled for 18 years for the cause of Robert’s disability to be officially recognised,’ she said.

‘We were told the vaccine was perfectly safe. Like most people, we trusted what the doctors and nurses were putting to us.

'Robert is nearly 19 but mentally he is like a 14-month-old toddler. He can’t stand unaided and he is doubly incontinent.

'He can’t speak except to say “Hi, Mum” or “Hi, Daddy”.

‘We chop up his food and have to anticipate all his needs. He is prone to various illnesses and last week suffered around 40 severe epileptic seizures.

Discredited: Dr Andrew Wakefield was struck off by the GMC after  it found his research into the possible effects of MMR was flawed

Discredited: Dr Andrew Wakefield was struck off by the GMC after it found his research into the possible effects of MMR was flawed

'In April this year, we thought we’d lost him. He contracted a chest infection and had to go to hospital for several days.

‘He is such a lovely boy. When he’s not ill, he’s so cheerful and seems to take everything on the chin. In between seizures he says “Hi, Mum” and tries to kiss me.

‘The money is a derisory amount though it will help with making adaptations to the house for Robert’s benefit.

'What matters is the recognition that MMR was the reason this happened.’

The first doctor who assessed Robert under the compensation scheme in 1996 concluded that he had suffered a ‘simple febrile convulsion with no long-lasting consequences’.

Although he agreed that Robert had a degree of disability, he refused to accept that the MMR vaccine was to blame.

At this month’s appeal, evidence was given by a leading expert on vaccine-damaged children, paediatric neurologist Dr Marcel Kinsbourne. He explained the biological changes which had occurred in Robert’s brain following the vaccination.

The one-day hearing was chaired by a barrister sitting with two doctors, Professor Sundara Lingam, a former consultant at Great Ormond Street Hospital for Children, and Dr Adrian Allaway.

In a dissenting judgment, Professor Lingam said he believed Robert was ‘genetically predisposed to epilepsy and that the vaccination triggered it rather than caused it.

'Robert would have developed epilepsy in any event, even if he had not had the vaccination’.

But Professor Lingam was overruled by his two colleagues.

In their final judgment, they accepted that MMR had caused Robert’s illness but added: ‘We would stress that this decision is fact-specific and it should not be seen as a precedent for any other case.

'In particular, it has no relevance to the issue... as to whether there is a link between the MMR vaccine and autism.’

Last night, Tory MP Nadine Dorries, a member of the powerful Commons Health Committee, said: ‘If an independent panel has reached the conclusion that there has been a link between the MMR vaccine and the brain damage suffered by this boy in this case, then it is fair to assume that there could be as many as thousands of children and parents in the same position.

‘There should be full and easy access to all documentation relating to the judgment for any parent or professional to read and assess.’

Dr Michael Fitzpatrick, a London GP whose own son is autistic, said: ‘It is a very important principle that parents should be compensated in cases of this kind.

'But although a causal link has been established in law in this instance, exhaustive scientific research has failed to establish any link between MMR and brain damage.

'This case should not make parents feel any different about the safety of the vaccine.’

The Department of Health said: ‘This decision reflects the opinion of a tribunal on the specific facts of the case and they were clear that it should not be seen as a precedent for any other case.

'The safety of MMR has been endorsed through numerous studies in many countries.’


New hope for parents who claim MMR jab blighted their children

By SALLY BECK

For MMR campaigners, the Robert Fletcher ruling is a small but significant milestone in their efforts to prove that the vaccine is not safe for a few children, even though the Government insists it is and that serious reactions are rare.

The triple jab was introduced in 1988, and has been given to millions of children as part of their vaccination schedule, which includes inoculations for 12 diseases.

The vast majority of children suffer no more than redness and swelling around the injection site or a fever that can be easily treated.

But a small number suffer serious reactions. The official figure is one in a million, but campaigners believe that is an underestimate.

Up to 2,000 parents remain convinced their children have suffered significant harm from MMR but have been unable to prove it.

This new decision will give them hope, even though compensation panels do not officially recognise autism claims.

Campaigner Polly Tommey, who edits the magazine The Autism File and believes her son Billy is autistic because of MMR, says: ‘This is fantastic news. Now doctors can’t tell me that the MMR is safe.

'This payout is evidence that it is not safe. It’s interesting that they will look at epilepsy
and not autism, and you have to ask why.

'Is it because the compensation would be billions?’

Parents have tried to get the medical profession and the Government to investigate their claims that MMR damaged their children but have failed so far.

A group of parents brought a case in 1993 which was blocked after their legal aid was withdrawn in 2003.

They claimed for various injuries including autism, Guillain-Barre syndrome, epilepsy, sensorineural deafness, diabetes and arthritis.

Robert’s mother Jackie Fletcher, who set up the vaccine campaign group JABS, is one of a group of parents who continued to fight.

His compensation comes 12 years after the London-based paediatrician Andrew Wakefield claimed a link between MMR and autism.

He was struck off this year after the General Medical Council judged his research to be flawed.

Claiming compensation for any vaccine-related disability is notoriously difficult.

Mrs Fletcher said: ‘Only one in 200 parents who applies to the Vaccine Damage Payment Scheme is successful in receiving compensation.

'Claims for autism are not considered. There are 120 MMR cases waiting to be heard, but none is for autism.’

In America, 4,000 parents are claiming compensation for MMR damage, but again the courts will not officially look at cases where autism is mentioned.

However, cases involving autism do slip through the net.

Bailey Banks, who suffered seizures 16 days after receiving the MMR jab and was diagnosed with pervasive developmental disorder, an autistic condition, was paid compensation.

So was Ben Zeller, who suffered seizures, while Hannah Poling, who is autistic, was paid in secret.

Another 1,820 cases of brain damage caused by vaccines in the U.S., including MMR, have been settled in private.

Mrs Fletcher hopes that the 2,000 families registered with JABS will be awarded legal aid to continue their cases.

She says: ‘We plan to talk to our MP Andy Burnham about the anomalies in the Vaccine Damage Payments Act, the main one being that you can apply for compensation only if a child has died after the age of two.

'We have a number of children on our books who died younger after receiving MMR, but they are not eligible to claim.

'Most vaccines are given at two, three and four months old, so this rule makes no sense.

‘Robert was 13 months old when he had his seizure and, under the rules today, he wouldn’t be eligible to claim.’

U.S. staff told to send children out of Mexican city

(Reuters) - The U.S. government told staff at its consulate in Monterrey to send their children out of the northern Mexican city where drug violence has been escalating, the consulate said on Friday.

The decision follows an apparent kidnap attempt outside an elite private school attended by children of U.S. consulate staff, amid rising drug violence in Mexico's business capital that has surged since the start of this year.

"U.S. government personnel from the consulate general are not permitted to keep their minor dependents in Monterrey," a U.S. Embassy spokeswoman said in Mexico City. "As of September 10, no minor dependents, no children of U.S. government employees will be permitted in Monterrey," she added.

Suspected drug hitmen attacked a group of security guards working for Latin America's top beverage maker, Femsa, outside the American School in Monterrey on August 20, in what the consulate said was "an attempted kidnapping targeting the relatives of a local business executive."

Two of the bodyguards were killed and their bodies returned to the company's offices, police said.

Monterrey, once considered one of Latin America's safest cities and a top regional business center, has seen a dramatic spike in violence since the start of this year, when a split between two local drug cartels turned to all-out war.

The powerful Gulf cartel and its former allies, the Zetas, are fighting over smuggling routes into the United States across northeastern Mexico, sucking Monterrey into the conflict, with more than 450 drug killings this year.

(Reporting by Robin Emmott and Missy Ryan; editing by Stacey Joyce)

Make Sure the Bunker is Well Stocked

Robert Herz was forced to resign from his job as as chairman of the Financial Accounting Standards Board (FASB) because he insisted that the banks assign a fair value to their assets. That's not what you'll read in the papers, but it's true just the same. Herz was a major proponent of mark-to-market accounting, a simple means of determining the value of a bond or security by comparing the price of similar assets sold at market. In other words, Herz is a defender of universally-accepted accounting principles, which is why he was terminated, er, I mean, resigned. According to the Wall Street Journal:

"A new front has opened up in the war over mark-to-market accounting. Suddenly banks find themselves with an unexpected advantage in the fight over how they should value their vast holdings of financial instruments…

Mr. Herz had backed a recent proposal to expand the use of market-value accounting to banks’ loan books....Now, with Mr. Herz out of the picture, the future of the rule change may be in doubt."

Pretty nifty, eh? As soon as Herz became a nuisance for the banks, he got his pink slip. Surprise, surprise. It's just more evidence that the country is ruled by a Financial Mafia. Think of it like this: If you or I went to the bank to secure a loan using a dilapidated old bicycle and couple bags of empty cat food cans as collateral, we'd be ushered to the door by two beefy security guards who'd toss our sorry ass onto the street pronto. But when the banks use their putrid mortgage-backed sludge to borrow in the repo markets (or to conceal their true condition from investors), they get high-fives from bondholders and regulators alike. Herz threatened to blow the lid off the whole charade by exposing the extent to which the banks are doctoring their balance sheets and hiding the red ink on their books. Only he was sent packing (resigned?) before he got a chance to clean up the system. This is from the Huffington Post:

".... Herz's departure wasn't expected; his current five-year term runs for another two years...Herz has been "an effective investor advocate to improve the quality of financial reporting standards around the world." ..... Banks were forced in the aftermath of the financial crisis to write down trillions of dollars of securities tied to subprime mortgages, gutting their balance sheets even though the assets could eventually recover their value." (Huffington Post)

"Recover their value"? Not bloody likely. These toxic turkeys will never recover their value because they were fraudulent loans made to people who don't have the wherewithal to repay the balance. The whole thing was a scam from the get go, which is why Herz got the ax. Without "creative accounting" techniques (think Enron), the insolvency of the system would be exposed which, of course, the banksters cannot allow. Thus, Herz got the boot. End of story.

HIGH FREQUENCY CHICANERY: Update on the May 6 "Flash Crash"

Here's something else to munch on from Dennis K. Berman of the Wall Street Journal:

"Today, small investors are fleeing the equities markets in droves, according to data from the Investment Company Institute, pulling out a net $34 billion from stock funds so far this year.....They say, "I still feel like someone is screwing me......trading feels different than it used to."

Righto. Berman traces the problem to its source, the "inscrutable interplay between myriad exchanges and high-frequency traders, whose volume now accounts for an estimated two-thirds of all trading"..."a market that many perceive as tainted and prone to gaming by a cadre of insiders."

That sounds like an admission that the market is rigged?

High-frequency trading (HFT) is algorithmic-computer trading that finds "statistical patterns and pricing anomalies" by scanning the various stock exchanges. It's high-speed robo-trading that oftentimes executes orders without human intervention. HFT allows one group of investors to see the data on other people's orders ahead of time and use their supercomputers to buy in front of them. It's called frontloading, and it goes on every day right under the SEC's schnoz.

In an interview on CNBC, market analyst Joe Saluzzi was asked if the big HFT players were able to see other investors orders (and execute trades) before them. Saluzzi said, "Yes. The answer is absolutely yes. The exchanges supply you with the data, giving you the flash order, and if your fixed connection goes into their lines first, you are disadvantaging the retail and institutional investor."

Today's market is configured in a way that the only reliable way to make money is by increasing volume and trading on myriad venues. We're talking about gains of mere pennies per trade on zillions of trades. The problem is that--when there's a glitch in the system--the high frequency bullyboys head for the exits taking an ocean of liquidity with them. That leads to a "Flash Crash" like the one on May 6 when the markets tumbled nearly 1,000 points in a matter of minutes. And, guess what; there's nothing to prevent a similar cataclysm from taking place in the future, because nothing's changed. Everything is exactly as it was before the crash, which makes another disaster a virtual certainty.

There appears to be general agreement about the nature of the problem. Here's Berman again:

"When BlackRock Inc. surveyed 380 financial advisers earlier this summer about the flash crash, their perceptions said it all: The mayhem had been primarily caused by an "overreliance on computer systems and some types of high frequency trading" strategies that roam the market en masse, looking to pick off pennies of profit." ("A Market Solution That Put Investors in a Fix", Dennis K. Berman, Wall Street Journal)

No one wants to fix the problem, because then the big players would lose boatloads of money. So the vehicle continues to speed faster and faster down the mountain veering wildly from one side of the road to the other. How long before it jumps the guardrail and plunges to the bottom of the canyon? Stay tuned....

Capital Hill is awash in Wall Street's filthy lucre, which means that congress will block any law that threatens the main profit-centers of the big banks or brokerage houses. HFT, complex derivatives, securitization and repo transactions will all be preserved in their present state until the next big tremor rumbles through lower Manhattan bringing the markets down in a thunderous roar. Make sure the bunker is well stocked.

http://www.informationclearinghouse.info/article26260.htm

America's Top Military Chief: Debt is Main Threat to U.S. National Security ... Pentagon Must Cut Spending

In February 2009, the head of U.S. intelligence - Dennis Blair - said that the global financial crisis was the largest threat to America's national security. All of America's intelligence agencies apparently agreed.

The same month, the chairman of the Joint Chiefs of Staff - Admiral Mullen - also agreed.

Now, Mullen is focusing on a specific economic threat. Specifically, Mullen is focusing on the debt:

The national debt is the single biggest threat to national security, according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit.

“That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending.

But at least war is good for the economy, right? At least spending on defense will help the economy recover and climb out of this pit of debt, no?

Actually, no.

Nobel-prize winning economist Joseph Stiglitz has said that war can be very bad for the economy. For example, in 2003, Stiglitz wrote:

War is widely thought to be linked to economic good times. The second world war is often said to have brought the world out of depression, and war has since enhanced its reputation as a spur to economic growth. Some even suggest that capitalism needs wars, that without them, recession would always lurk on the horizon.

Today, we know that this is nonsense. The 1990s boom showed that peace is economically far better than war. The Gulf war of 1991 demonstrated that wars can actually be bad for an economy.
Stiglitz has said that this decade's Iraq war has been very bad for the economy. See this, this and this.

And as the New Republic noted last year:

Conservative Harvard economist Robert Barro has argued that increased military spending during WWII actually depressed other parts of the economy.

Also from the right, Robert Higgs has done good work showing that military spending wasn't the primary source of the recovery and that GDP growth during WWII has been "greatly exaggerated."

And from the left, Larry Summers and Brad Delong argued back in 1988 that "five-sixths of the decline in output relative to the trend that occurred during the Depression had been made up before 1942."

As I noted in January:

All of the spending on unnecessary wars adds up.

The U.S. is adding trillions to its debt burden to finance its multiple wars in Iraq, Afghanistan, Yemen, etc.

Two top American economists - Carmen Reinhart and Kenneth Rogoff - show that the more indebted a country is, with a government debt/GDP ratio of 0.9, and external debt/GDP of 0.6 being critical thresholds, the more GDP growth drops materially.

Specifically, Reinhart and Rogoff write:

The relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies...
Indeed, it should be obvious to anyone who looks at the issue that deficits do matter.

A PhD economist told me:
War always causes recession. Well, if it is a very short war, then it may stimulate the economy in the short-run. But if there is not a quick victory and it drags on, then wars always put the nation waging war into a recession and hurt its economy.
You know about America's unemployment problem. You may have even heard that the U.S. may very well have suffered a permanent destruction of jobs.

But did you know that the defense employment sector is booming?

As I pointed out in August, public sector spending - and mainly defense spending - has accounted for virtually all of the new job creation in the past 10 years:
The U.S. has largely been financing job creation for ten years. Specifically, as the chief economist for BusinessWeek, Michael Mandel, points out, public spending has accounted for virtually all new job creation in the past 10 years:

Private sector job growth was almost non-existent over the past ten years. Take a look at this horrifying chart:

longjobs1.gif

Between May 1999 and May 2009, employment in the private sector sector only rose by 1.1%, by far the lowest 10-year increase in the post-depression period.

It’s impossible to overstate how bad this is. Basically speaking, the private sector job machine has almost completely stalled over the past ten years. Take a look at this chart:

longjobs2.gif

Over the past 10 years, the private sector has generated roughly 1.1 million additional jobs, or about 100K per year. The public sector created about 2.4 million jobs.

But even that gives the private sector too much credit. Remember that the private sector includes health care, social assistance, and education, all areas which receive a lot of government support.

***

Most of the industries which had positive job growth over the past ten years were in the HealthEdGov sector. In fact, financial job growth was nearly nonexistent once we take out the health insurers.

Let me finish with a final chart.

longjobs4.gif

Without a decade of growing government support from rising health and education spending and soaring budget deficits, the labor market would have been flat on its back.

Indeed, Robert Reich lamented this month:
America’s biggest — and only major — jobs program is the U.S. military.
Back to my January essay:
Raw Story argues that the U.S. is building a largely military economy:

The use of the military-industrial complex as a quick, if dubious, way of jump-starting the economy is nothing new, but what is amazing is the divergence between the military economy and the civilian economy, as shown by this New York Times chart.

In the past nine years, non-industrial production in the US has declined by some 19 percent. It took about four years for manufacturing to return to levels seen before the 2001 recession -- and all those gains were wiped out in the current recession.

By contrast, military manufacturing is now 123 percent greater than it was in 2000 -- it has more than doubled while the rest of the manufacturing sector has been shrinking...

It's important to note the trajectory -- the military economy is nearly three times as large, proportionally to the rest of the economy, as it was at the beginning of the Bush administration. And it is the only manufacturing sector showing any growth. Extrapolate that trend, and what do you get?

The change in leadership in Washington does not appear to be abating that trend...[121]
So most of the job creation has been by the public sector. But because the job creation has been financed with loans from China and private banks, trillions in unnecessary interest charges have been incurred by the U.S.And this shows military versus non-military durable goods shipments:



[Click here to view full image.]

So we're running up our debt (which will eventually decrease economic growth), but the only jobs we're creating are military and other public sector jobs.

PhD economist Dean Baker points out that America's massive military spending on unnecessary and unpopular wars lowers economic growth and increases unemployment:
Defense spending means that the government is pulling away resources from the uses determined by the market and instead using them to buy weapons and supplies and to pay for soldiers and other military personnel. In standard economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing growth and costing jobs.
A few years ago, the Center for Economic and Policy Research commissioned Global Insight, one of the leading economic modeling firms, to project the impact of a sustained increase in defense spending equal to 1.0 percentage point of GDP. This was roughly equal to the cost of the Iraq War.

Global Insight’s model projected that after 20 years the economy would be about 0.6 percentage points smaller as a result of the additional defense spending. Slower growth would imply a loss of almost 700,000 jobs compared to a situation in which defense spending had not been increased. Construction and manufacturing were especially big job losers in the projections, losing 210,000 and 90,000 jobs, respectively.

The scenario we asked Global Insight [recognized as the most consistently accurate forecasting company in the world] to model turned out to have vastly underestimated the increase in defense spending associated with current policy. In the most recent quarter, defense spending was equal to 5.6 percent of GDP. By comparison, before the September 11th attacks, the Congressional Budget Office projected that defense spending in 2009 would be equal to just 2.4 percent of GDP. Our post-September 11th build-up was equal to 3.2 percentage points of GDP compared to the pre-attack baseline. This means that the Global Insight projections of job loss are far too low...

The projected job loss from this increase in defense spending would be close to 2 million. In other words, the standard economic models that project job loss from efforts to stem global warming also project that the increase in defense spending since 2000 will cost the economy close to 2 million jobs in the long run.
The Political Economy Research Institute at the University of Massachusetts, Amherst has also shown that non-military spending creates more jobs than military spending.

So we're running up our debt - which will eventually decrease economic growth - and creating many fewer jobs than if we spent the money on non-military purposes.
As I wrote last month:

It is ironic that America's huge military spending is what made us an empire ... but our huge military is what is bankrupting us ... thus destroying our status as an empire.

Even Admiral Mullen seems to agree:

The Pentagon needs to cut back on spending.

“We’re going to have to do that if it’s going to survive at all,” Mullen said, “and do it in a way that is predictable.”

Indeed, Mullen said:
For industry and adequate defense funding to survive ... the two must work together. Otherwise, he added, “this wave of debt” will carry over from year to year, and eventually, the defense budget will be cut just to facilitate the debt.
Secretary of Defense Robert Gates agrees as well. As David Ignatius wrote in the Washington Post in May:

After a decade of war and financial crisis, America has run up debts that pose a national security problem, not just an economic one.

***

One of the strongest voices arguing for fiscal responsibility as a national security issue has been Defense Secretary Bob Gates. He gave a landmark speech in Kansas on May 8, invoking President Dwight Eisenhower's warnings about the dangers of an imbalanced military-industrial state.

"Eisenhower was wary of seeing his beloved republic turn into a muscle-bound, garrison state -- militarily strong, but economically stagnant and strategically insolvent," Gates said. He warned that America was in a "parlous fiscal condition" and that the "gusher" of military spending that followed Sept. 11, 2001, must be capped. "We can't have a strong military if we have a weak economy," Gates told reporters who covered the Kansas speech.

On Thursday the defense secretary reiterated his pitch that Congress must stop shoveling money at the military, telling Pentagon reporters: "The defense budget process should no longer be characterized by 'business as usual' within this building -- or outside of it."