Thursday, May 20, 2010

I write to you from a disgraced profession

The following is the text of James Galbraith‘s written statement to members of the Senate Judiciary Committee delivered a few days ago.

Chairman Specter, Ranking Member Graham, Members of the Subcommittee, as a former member of the congressional staff it is a pleasure to submit this statement for your record.

I write to you from a disgraced profession. Economic theory, as widely taught since the 1980s, failed miserably to understand the forces behind the financial crisis. Concepts including “rational expectations,” “market discipline,” and the “efficient markets hypothesis” led economists to argue that speculation would stabilize prices, that sellers would act to protect their reputations, that caveat emptor could be relied on, and that widespread fraud therefore could not occur. Not all economists believed this – but most did.

Thus the study of financial fraud received little attention. Practically no research institutes exist; collaboration between economists and criminologists is rare; in the leading departments there are few specialists and very few students. Economists have soft- pedaled the role of fraud in every crisis they examined, including the Savings & Loan debacle, the Russian transition, the Asian meltdown and the dot.com bubble. They continue to do so now. At a conference sponsored by the Levy Economics Institute in New York on April 17, the closest a former Under Secretary of the Treasury, Peter Fisher, got to this question was to use the word “naughtiness.” This was on the day that the SEC charged Goldman Sachs with fraud.

There are exceptions. A famous 1993 article entitled “Looting: Bankruptcy for Profit,” by George Akerlof and Paul Romer, drew exceptionally on the experience of regulators who understood fraud. The criminologist-economist William K. Black of the University of Missouri-Kansas City is our leading systematic analyst of the relationship between financial crime and financial crisis. Black points out that accounting fraud is a sure thing when you can control the institution engaging in it: “the best way to rob a bank is to own one.” The experience of the Savings and Loan crisis was of businesses taken over for the explicit purpose of stripping them, of bleeding them dry. This was established in court: there were over one thousand felony convictions in the wake of that debacle. Other useful chronicles of modern financial fraud include James Stewart’s Den of Thieves on the Boesky-Milken era and Kurt Eichenwald’s Conspiracy of Fools, on the Enron scandal. Yet a large gap between this history and formal analysis remains.

Formal analysis tells us that control frauds follow certain patterns. They grow rapidly, reporting high profitability, certified by top accounting firms. They pay exceedingly well. At the same time, they radically lower standards, building new businesses in markets previously considered too risky for honest business. In the financial sector, this takes the form of relaxed – no, gutted – underwriting, combined with the capacity to pass the bad penny to the greater fool. In California in the 1980s, Charles Keating realized that an S&L charter was a “license to steal.” In the 2000s, sub-prime mortgage origination was much the same thing. Given a license to steal, thieves get busy. And because their performance seems so good, they quickly come to dominate their markets; the bad players driving out the good.

The complexity of the mortgage finance sector before the crisis highlights another characteristic marker of fraud. In the system that developed, the original mortgage documents lay buried – where they remain – in the records of the loan originators, many of them since defunct or taken over. Those records, if examined, would reveal the extent of missing documentation, of abusive practices, and of fraud. So far, we have only very limited evidence on this, notably a 2007 Fitch Ratings study of a very small sample of highly-rated RMBS, which found “fraud, abuse or missing documentation in virtually every file.” An efforts a year ago by Representative Doggett to persuade Secretary Geithner to examine and report thoroughly on the extent of fraud in the underlying mortgage records received an epic run-around.

When sub-prime mortgages were bundled and securitized, the ratings agencies failed to examine the underlying loan quality. Instead they substituted statistical models, in order to generate ratings that would make the resulting RMBS acceptable to investors. When one assumes that prices will always rise, it follows that a loan secured by the asset can always be refinanced; therefore the actual condition of the borrower does not matter. That projection is, of course, only as good as the underlying assumption, but in this perversely-designed marketplace those who paid for ratings had no reason to care about the quality of assumptions. Meanwhile, mortgage originators now had a formula for extending loans to the worst borrowers they could find, secure that in this reverse Lake Wobegon no child would be deemed below average even though they all were. Credit quality collapsed because the system was designed for it to collapse.

A third element in the toxic brew was a simulacrum of “insurance,” provided by the market in credit default swaps. These are doomsday instruments in a precise sense: they generate cash-flow for the issuer until the credit event occurs. If the event is large enough, the issuer then fails, at which point the government faces blackmail: it must either step in or the system will collapse. CDS spread the consequences of a housing-price downturn through the entire financial sector, across the globe. They also provided the means to short the market in residential mortgage-backed securities, so that the largest players could turn tail and bet against the instruments they had previously been selling, just before the house of cards crashed.

Latter-day financial economics is blind to all of this. It necessarily treats stocks, bonds, options, derivatives and so forth as securities whose properties can be accepted largely at face value, and quantified in terms of return and risk. That quantification permits the calculation of price, using standard formulae. But everything in the formulae depends on the instruments being as they are represented to be. For if they are not, then what formula could possibly apply?

An older strand of institutional economics understood that a security is a contract in law. It can only be as good as the legal system that stands behind it. Some fraud is inevitable, but in a functioning system it must be rare. It must be considered – and rightly – a minor problem. If fraud – or even the perception of fraud – comes to dominate the system, then there is no foundation for a market in the securities. They become trash. And more deeply, so do the institutions responsible for creating, rating and selling them. Including, so long as it fails to respond with appropriate force, the legal system itself.

Control frauds always fail in the end. But the failure of the firm does not mean the fraud fails: the perpetrators often walk away rich. At some point, this requires subverting, suborning or defeating the law. This is where crime and politics intersect. At its heart, therefore, the financial crisis was a breakdown in the rule of law in America.

Ask yourselves: is it possible for mortgage originators, ratings agencies, underwriters, insurers and supervising agencies NOT to have known that the system of housing finance had become infested with fraud? Every statistical indicator of fraudulent practice – growth and profitability – suggests otherwise. Every examination of the record so far suggests otherwise. The very language in use: “liars’ loans,” “ninja loans,” “neutron loans,” and “toxic waste,” tells you that people knew. I have also heard the expression, “IBG,YBG;” the meaning of that bit of code was: “I’ll be gone, you’ll be gone.”

If doubt remains, investigation into the internal communications of the firms and agencies in question can clear it up. Emails are revealing. The government already possesses critical documentary trails — those of AIG, Fannie Mae and Freddie Mac, the Treasury Department and the Federal Reserve. Those documents should be investigated, in full, by competent authority and also released, as appropriate, to the public. For instance, did AIG knowingly issue CDS against instruments that Goldman had designed on behalf of Mr. John Paulson to fail? If so, why? Or again: Did Fannie Mae and Freddie Mac appreciate the poor quality of the RMBS they were acquiring? Did they do so under pressure from Mr. Henry Paulson? If so, did Secretary Paulson know? And if he did, why did he act as he did? In a recent paper, Thomas Ferguson and Robert Johnson argue that the “Paulson Put” was intended to delay an inevitable crisis past the election. Does the internal record support this view?

Let us suppose that the investigation that you are about to begin confirms the existence of pervasive fraud, involving millions of mortgages, thousands of appraisers, underwriters, analysts, and the executives of the companies in which they worked, as well as public officials who assisted by turning a Nelson’s Eye. What is the appropriate response?

Some appear to believe that “confidence in the banks” can be rebuilt by a new round of good economic news, by rising stock prices, by the reassurances of high officials – and by not looking too closely at the underlying evidence of fraud, abuse, deception and deceit. As you pursue your investigations, you will undermine, and I believe you may destroy, that illusion.

But you have to act. The true alternative is a failure extending over time from the economic to the political system. Just as too few predicted the financial crisis, it may be that too few are today speaking frankly about where a failure to deal with the aftermath may lead.

In this situation, let me suggest, the country faces an existential threat. Either the legal system must do its work. Or the market system cannot be restored. There must be a thorough, transparent, effective, radical cleaning of the financial sector and also of those public officials who failed the public trust. The financiers must be made to feel, in their bones, the power of the law. And the public, which lives by the law, must see very clearly and unambiguously that this is the case. Thank you.

WRAPUP 6-Heavy oil hits Louisiana shore, enters sea current

* Part of spill in "Loop Current," may spread far wider

* BP says it is trapping more oil from leaking well

* BP shares down nearly 2 percent in London (Recasts, adds heavy oil in Louisiana marshlands)

By Matthew Bigg

VENICE, La., May 19 (Reuters) - The first heavy oil from a giant Gulf of Mexico spill sloshed ashore in fragile Louisiana marshlands on Wednesday and part of the mess entered a powerful current that could carry it to Florida and beyond.

The developments underscored the gravity of the situation as British energy giant BP (BP.L) Plc raced to capture more crude gushing from a ruptured well a mile (1.6 km) beneath the surface. The spill is threatening an ecological and economic disaster along the U.S. Gulf Coast and beyond.

"This wasn't tar balls. This wasn't sheen," Louisiana Governor Bobby Jindal said after a boat tour to the southernmost point of the Mississippi River estuary. "This is heavy oil in our wetlands."

The marshes are the nurseries for shrimp, oysters, crabs and fish that make Louisiana the leading producer of commercial seafood in the continental United States and a top destination for recreational anglers. The United States has already imposed a large no-fishing zone in waters in the Gulf seen affected by the spill. [ID:nN18155760] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ TAKE A LOOK on the spill [ID:nSPILL] INSIDER TV: link.reuters.com/wuw64k Graphic: link.reuters.com/ken64k Breakingviews column [ID:nLDE64C1D1] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Meanwhile, the U.S. government's top weather forecaster said a "small portion" of light sheen from the giant oil slick has already entered the Loop Current, which could carry the oil down to the Florida Keys, to Cuba and even up the U.S. East Coast.

BP, its reputation on the line in an environmental disaster that could eclipse the 1989 Exxon Valdez spill in Alaska, has marked some progress at siphoning some of the oil from the well, which ruptured after an April 20 explosion of the Deepwater Horizon rig that killed 11 workers.

BP said it is now siphoning about 3,000 barrels (126,000 gallons/477,000 liters) a day of oil, out of what the company estimated was a 5,000 barrels (210,000 gallons/795,000 liters) a day gusher. And BP could begin injecting mud into the well as early as Sunday in a bid to permanently plug the leak.

'NOT ROCKET SCIENCE'

A U.S. congressional panel heard testimony from experts who said the spill rate could be many-fold larger.

"This is not rocket science," said Steve Wereley, associate mechanical engineering professor at Purdue University, who pegged the spill's volume at about 70,000 barrels per day. "All outside estimates are considerably higher than BP's."

The development may still be welcome news for the company and its battered share price. BP shares closed down nearly 2 percent in London on Wednesday, extending recent steep losses.

The political fall-out also continues. The U.S. Interior Department said on Wednesday its embattled Minerals Management Service will be broken up into three separate divisions, as part of an effort to restructure the way the department handles offshore energy production. [ID:nN19223644]

Florida's tourism gained a respite when tar balls found on Keys beaches were shown not to come from the Gulf of Mexico oil leak, but officials said the $60 billion-a-year industry was already taking a beating from the month-old spill.

To the relief of Florida officials, the Coast Guard said laboratory tests had shown that 50 tar balls found this week on the Lower Keys -- a mecca for divers, snorkelers, fishermen and beach goers -- were not from the Gulf spill.

Local tourism authorities said damage had already been inflicted by the negative publicity linked to the spill.

"Even if we don't get even a gumball-sized tar ball down here in the next month, there has already been significant perception damage to Florida Keys and Florida tourism," said Andy Newman of the Monroe Tourism Development Council.

"We understand we are not out of the woods yet, that there's more oil out there," he said.

Tar balls have also been found on the Texas coast and were being tested but a Coast Guard official said it was "highly unlikely those tar balls in Texas are related to this spill."

The spill has also prompted rare talks between U.S. and Cuban officials in Havana, with forecasters predicting that oil could reach Cuban shores. [ID:nN19218031]

CRIME SCENE

Wildlife and environmental groups accused BP of holding back information on the real size and impact of the growing slick, and urged President Barack Obama to order a more direct federal government role in the spill response.

In prepared testimony for a congressional committee, National Wildlife Federation President Larry Schweiger said BP had failed to disclose results from its tests of chemical dispersants used on the spill. He also said it had tried to withhold video showing the true magnitude of the leak.

"The federal government should immediately take over all environmental monitoring, testing and public safety protection from BP," he said. "The Gulf of Mexico is a crime scene and the perpetrator cannot be left in charge of assessing the damage."

The Washington-based Center for American Progress published comments by its health experts Lesley Russell and Ellen-Marie Whelan saying the huge spill, and the dispersants being used against it, posed "insidious and unknown" human risks.

Noting the federal government had allowed BP to test the undersea use of dispersants, they added, "But are we letting the fox guard the hen house by letting the oil companies determine the safety of these cleaning agents?"

The spill has forced Obama to put a hold on plans to expand offshore oil drilling and has raised concerns about planned oil operations in other areas like the Arctic. [ID:nN19224303] (Additional reporting by Deborah Zabarenko in Washington, Jane Sutton and Pascal Fletcher in Miami, Matthew Bigg in Louisiana, and Anna Driver, Chris Baltimore and Jeff Mason in Houston; Writing by Ed Stoddard and Pascal Fletcher; Editing by Todd Eastham)

Power Play Over Immigration Law

An Arizona utility commissioner said he's willing to pull the plug on Los Angeles if the city goes through with a boycott of his state.

In a letter to the city of LA, a member of Arizona's power commission said he would ask Arizona utility companies to cut off the power supply to Los Angeles. LA gets about 25 percent of its power from Arizona.

"That is one commissioner who has that idea -- whether he can do that or not is another idea," said LA Councilman Dennis Zine. "They are the ones who have to make the move, not us."

The commissioner's power grid play is in response to the city's approval of a resolution directing city staff to consider which contracts with Arizona can be terminated.

U.S. stock markets will shed gains swiftly: Prechter

(Reuters) - Another deflationary wave of global credit strains, heralded by the Greek debt crisis, will broadly punish riskier assets, technical analyst Robert Prechter said on Friday.

U.S. stock markets will erase their past six months of gains "in a matter of weeks," said Prechter, president of research company Elliott Wave International, in Gainesville, Georgia and known for predicting the 1987 stock market crash.

Investors should opt for the safest possible investments, putting their money in very short-term Treasury bills or cash, he said, reiterating this long-expressed preference based on the expectation of long-term economic weakness.

Prechter maintained his call, made in January, that the dollar should continue gaining against the euro for about a year.

The euro hit a 14-month low against the dollar this week on investors' concern about the crisis in Greece and some other heavily indebted European countries.

In a telephone interview with Reuters, Prechter also predicted a "dramatic widening" of U.S. corporate bond yield spreads over Treasuries, which he said has already started.

Over the next few months, junk bond spreads are likely to widen substantially, he said. Over the next six years, as the U.S. economy weakens and more corporations and municipalities default, spreads will widen further as prices of corporate and municipal bonds fall, he said.

Prechter has previously said he believes the 2007-2009 markets crisis and U.S. recession were harbingers of a severe, longer economic downturn. His book "Conquer the Crash," first published in 2002, warned about the dangers of a deflationary depression. Prechter maintains the U.S. economy will struggle for years to come.

Sell Everything, You Won't Recognize America By The End Of The Year

WHOA!

Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

That's pretty intense!

Update: By popular demand, here's more on what he sees in the market. The gist is that the markets recent gyrations are telling him that the economy is in trouble:

And I ask myself, "Am I seeing things? The April 26 high for the Dow
was 11205.03. The Dow is selling as write at 10557 down 648 points
from its April high. If business is even better than expected, then
why is the Dow down over 600 points? And why, if there were 674 new
highs on the NYSE on April 26, were there only 20 new highs on Friday,
May 14? And if my PTI was 6133 on April 26, why is it down 17 points
since its April high?

The fact is that I've been seeing deterioration in the stock market
ever since early-April, and this in the face of improving business
news
. The D-J Industrial Average is composed of 30 internationally
known top-quality blue-chip stocks. These are 30 of "America's biggest
companies." If Barron's is so bullish on the future of America's
biggest companies, then why isn't the Dow advancing to new highs?

Clearly something is wrong. But what could it be? Much as I love
Barron's, I trust the stock market more. If I read the stock market
correctly, it's telling me that there is a surprise ahead. And that
surprise will be a reversal to the downside for the economy, plus a
collection of other troubles ahead
.

About Dow Theory -- First, we saw the recent April highs in the
Averages. Then we saw a plunge in both Averages to their May 7 lows --
Industrials to 10380.43, Transports to 4298.12, next a short rally. If
ahead, the two Averages turn down and violate their May 7 lows, that
would be the clincher. Such action would signal the certain resumption
of the primary bear market.

Just as for years I asked, cajoled, insisted, threatened, demanded,
that my subscribers buy gold, I am now insisting, demanding, begging
my subscribers to get OUT of stocks (including C and BYD, but not
including golds) and get into cash or gold (bullion if possible). If
the two Averages violate their May 7 lows, I see a major crash as the
outcome. Pul - leeze, get out of stocks now, and I don't give a damn
whether you have paper losses or paper profits!

Global Cooling Is Coming -- and Beware the Big Chill, Scientist Warns

Contrary to the commonly held scientific conclusion that the Earth is getting warmer, a scientist who has written more than 150 peer-reviewed papers has unveiled evidence for his prediction that global cooling is coming soon.

The hottest new trend in climate change may be global cooling, some researchers say.

Contrary to the commonly held scientific conclusion that the Earth is getting warmer, Dr. Don Easterbrook, emeritus professor of geology at Western Washington University and author of more than 150 peer-reviewed papers, has unveiled evidence for his prediction that global cooling is coming soon.

“Rather than global warming at a rate of 1 F per decade, records of past natural cycles indicate there may be global cooling for the first few decades of the 21st century to about 2030,” said Easterbrook, speaking on a scientific panel discussion with other climatologists. This, he says, will likely be followed by “global warming from about 2030 to 2060,” which will then be followed by another cooling spell from 2060 to 2090.

Easterbrook spoke before a group of about 700 scientists and government officials at the fourth International Conference on Climate Change. The conference is presented annually in Chicago by the Heartland Institute, a conservative nonprofit think tank that actively questions the theory of man's role in global warming. Last year the Institute published Climate Change Reconsidered, a comprehensive reply to the United Nations' latest report on climate change.

"Global warming is over -- at least for a few decades," Easterbrook told conference attendees. "However, the bad news is that global cooling is even more harmful to humans than global warming, and a cause for even greater concern."


Easterbrook made several stunning claims about the effects of the coming cold. There will be twice as many people killed by extreme cold than by extreme heat, he predicted, and global food production will suffer because of the shorter, cooler growing seasons and bad weather during harvest seasons.

But not everyone is breaking out the overcoat and mittens.

“It's absurd to talk of global cooling when global heating is with us now and accelerating," said Dan Miller, managing director of the Roda Group, and an expert on climate change. "According to NASA, this past April was the hottest since temperature measurements began. And 2010 is on track to be the hottest year since temperature records began.

“North America was relatively cool last year, but the Earth as a whole was much warmer than average,” he said.

Data from the National Oceanic and Atmospheric Agency (NOAA) also points to a warming trend. The agency recently reported that global land and ocean surface temperatures for the first four months of 2010 were the warmest it had on record.

Easterbrook, one of 75 climate and policy experts presenting at the conference, uncovered sudden climate fluctuations of warming and cooling -- all of which occurred before 1945, when carbon dioxide levels began to rise sharply -- through geologic evidence.

Ten big climate changes occurred over the past 15,000 years, and another 60 smaller changes occurred in the past 5,000 years.

Based on new analysis of ice cores from Greenland to Antarctica, Easterbrook said global temperatures rose and fell from 9 to 15 degrees in a century or less -- swings that he said were "astonishing."

In addition, he explained that energy consumption will rise -- and consumer prices will rise along with it -- and political and social instability could result as the world population grows 50 percent in the next 40 years while food and energy demand soars.

Another presenter at the conference, James M. Taylor, an environmental policy expert and a fellow at the Heartland Institute, said that global cooling is already happening. Based on figures provided by the Rutgers University Global Snow Lab, he noted that snow records from the last 10 years exceeded the records set in the 1960s and 1970s.

A sign of global cooling? This past “decade set a record for largest average global snow extent,” Taylor said.

G8/G20 Global View

In the lead up to the G20 summit, Kevin Carmichael will provide a running commentary on the critical issues facing the global economy that will be dealt with at the meeting.

Kevin Carmichael

For a glimpse of what life must be like for a Group of 20 negotiator, jump over to the New York Times for its summation of the U.S.’s apparent victory in winning backing at the United Nations Security Council for further sanctions on Iran over its nuclear program.

On Tuesday, Secretary of State Hillary Clinton announced that she had brokered a draft agreement, finally winning over a reluctant Russia and China and big footing a compromise that upstarts Brazil and Turkey struck with Iran on Monday.

“This announcement is as convincing an answer to the efforts undertaken in Tehran over the last few days as any we could provide,” Secretary of State Hillary Rodham Clinton told the Senate Foreign Relations Committee, describing the agreement as a “strong draft,” according to the Times.

And if not for a thing called the internet, that would be the story on Wednesday. But because of that thing called the Internet, the Times can update its reporting around the clock. When the sun rose in Moscow, the paper dutifully sought out Russia’s take on Ms. Clinton’s “strong draft.” Turns out, that draft might have a little less force than first appeared, as a Russian foreign ministry spokesman told the Times that the Brazil-Turkey plan should be given a longer look.

Our position is, give them another chance,” the Russian official said of Iran’s apparent willingness to send its enriched uranium to Turkey. “We should take into account this demonstration of readiness by Iran.”

Any number of things could be happening here. Ms. Clinton might have exaggerated her position in an attempt to force a resolution. Russia could be double dealing, trying to play this diplomatic game from both sides. Don’t underestimate the possibility of miscommunication, misunderstanding or some other form of bureaucratic failure. For more informed speculation, see Daniel Drezner, a former U.S. Treasury official and one of the original academic bloggers, who also is puzzling over the announcement of two separate diplomatic agreements on Iran in 36 hours.

But one thing is clear in all of this: the U.S. isn’t in charge of world affairs anymore. Put another way, the White House might still be chairman and chief executive officer of global order, but it must contend with a strong block of activist shareholders intent on exerting more influence on how the enterprise is run.

The surge in diplomacy around Iran over the last few days is the new world order taking shape in real time.

You have evidence of the U.S. preferring to achieve its objectives through the UN Security Council, a smaller venue where setting and influencing the agenda is a far simpler matter. This preference also could explain the U.S.’s new found interest in the Group of Eight process, which, after being left for dead, is suddenly showing new signs of life, as University of Toronto professor Alan Alexandroff noted over on the Centre for International Governance Innovation’s G20 blog. The older powers might already be pining for good old days.

The counterpoint to the U.S. in this realignment of global power is Brazil and its president, Luiz Inácio Lula da Silva. Unlike China and Russia, who weren’t always considering “emerging” powers, Brazil under Lula is like a peewee hockey player who has just learned how to take a slap shot. Brazil is the most outwardly enthusiastic of the BRIC nations in what appears to be an effort to foster an alternative pole of influence to the G8. (Pity Russia, caught between the two.) At the International Monetary Fund, Brazil’s executive director, Paulo Nogueira Batista, has made much of the fact that the BRIC nations hold a veto over how a newly expanded credit line -- the $550-billion (U.S.) New Arrangements to Borrow, or NAB -- will be used because they are among the biggest contributors.

Lula’s intervention in the Iran situation represents his hardest slapper yet. Let’s see if he scores or puts it off the post.

China Enters Bear Market Territory

Stocks trading in Shanghai are off 25% from their cyclical bull market peak 0f 3500 which was reached in the summer of 2009. A decline of more than 20% is viewed by many as bear market territory. According to The Vanguard Group “there’s no agreed-upon definition of a bear market, one generally accepted measure is a price decline of 20% or more over at least a two-month period.” Shanghai now qualifies.

The secular (Long Term) trend remain is bearish as well as the cyclical rally failed to decisively reach above the 38.2% Fibonacci level. A bear market in China can directly effect global equity markets as noted here.

The Bankster-Gangster Crowd..Murdering People for over 2,000 Years

International bankers saw that interest-free scrip would keep America free of their influence, so by 1781 banker-backed Alexander Hamilton succeeded in starting the Bank of America. After a few years of "bank money", the prosperity of "Colonial Scrip" was gone. Benjamin Franklin said, "Conditions were so reversed that the era of prosperity had ended and a depression set in to such an extent that the streets of the Colonies were filled with the unemployed!" Bank money was like our FED money. It had debt and interest attached.

Source



Whoever steps forward to take on that pit of vipers known as the Fed is on a suicide mission.

Obama could go the route of that carpenter from Nazareth that kicked the moneychangers out of the Temple and was killed for his efforts.

Or he could take the route of Andy Jackson, who closed down the 2nd National Bank of the US and got shot for his efforts, but not killed.

Or Lincoln, who was opposed to an Independent US Treasury, but refused to pay usurious rates to finance the Civil War, so he printed US greenbacks and was murdered by an assassin's bullet.

Or the 20th President, James Garfield, who was opposed to establishing a national bank that would have been controlled by international gangsters and was assassinated by a 'crazed, lone nut gunman,' a recurring narrative that we hear time and again.

Or Kennedy, who printed US government currency, around 4 billion dollars worth, money which LBJ took out of circulation after Johnson took over after JFK was murdered by an assassin. That money was issued debt and interest free, a thought which was repugnant to the international banking crowd that control the world.

You can either take an axe to cut out the cancer infecting America or go about that job with the deft hands of a surgeon using a scalpel.

Either way, whoever takes on the task is going to have a bulls eye on their back.


How International Bankers Gained Control of America

One month after the inauguration of Abraham Lincoln, the first shots of the American Civil War were fired at Fort Sumter, South Carolina on April 12,1861. ...

Certainly slavery was a cause for the Civil War, but not the primary cause. Lincoln knew that the economy of the South depended upon slavery and so (before the Civil War) he had no intention of eliminating it. Lincoln had put it this way in his inaugural address only one month earlier:

"I have no purpose, directly or indirectly, to interfere with the institution of slavery in the states where it now exists. I believe I have no lawful right to do so, and I have no inclination to do so."

Even after the first shots were fired at Fort Sumter, Lincoln continued to insist that the Civil War was not about the issue of slavery:

"My paramount objective is to save the Union, and it is not either to save or destroy slavery. If I could save the Union without freeing any slave, I would do it."

So what was the Civil War all about? There were many factors at play. Northern industrialists had used protective tariffs to prevent their southern states from buying cheaper European goods. Europe retaliated by stopping cotton imports from the South. The Southern states were in a financial bind. They were forced to pay more for most of the necessities of life while their income from cotton exports plummeted. The South grew increasingly angry.

But there were other factors at work. ... The central bankers now saw an opportunity to use the North/South divisions to split the rich new nation - to divide and conquer by war. Was this just some sort of wild conspiracy theory? Well, let's look at what a well placed observer of the scene had to say at time.

This was Otto von Bismarck, Chancellor of Germany, the man who united the German states in 1871. A few years later, in 1876, he is quoted as saying:

"It is not to be doubted, I know of absolute certainty," Bismarck declared, "that the division of the United States into two federations of equal power was decided long before the Civil War by the high financial powers of Europe. These bankers were afraid that the United States, if they remained as one block and were to develop as one nation, would attain economic and financial independence, which would upset the capitalist domination of Europe over the world."



Within months after the first shots were fired at Fort Sumter, the central bankers loaned Napoleon III of France (the nephew of the Waterloo Napoleon) 210 million francs to seize Mexico and station troops along the southern border of the U.S., taking advantage of the Civil War to violate the Monroe Doctrine and return Mexico to colonial rule.

No matter what the outcome of the Civil War, it was hoped that a war-weakened America, heavily indebted to the Money Changers, would open up Central and South America once again to European colonization and domination.

At the same time, Great Britain moved 11,000 troops into Canada and positioned them along America's northern border. The British fleet went on war alert should their quick intervention be called for.


Lincoln knew he was in a bind. He agonized over the fate of the Union. There was a lot more to it than just differences between the North and the South. That's why his emphasis was always on "Union" and not merely the defeat of the South. But Lincoln needed money to win.

In 1861, Lincoln and his Secretary of the Treasury, Salmon P. Chase, went to New York to apply for the necessary war loans. The Money Changers, anxious to maximize their war profits, only offered loans at 24-36% interest. Lincoln said thanks, but no thanks, and returned to Washington. He sent for an old friend, Colonel Dick Taylor of Chicago, and put him onto the problem off financing the War. At one particular meeting, Lincoln asked Taylor how else to finance the war. Taylor put it this way:

"Why, Lincoln, that is easy; just get Congress to pass a bill authorizing the printing of full legal tender treasury notes... pay your soldiers with them and go ahead and win your war with them also."

When Lincoln asked if the people of the United States would accept the notes, Taylor said:

"The people or anyone else will not have any choice in the matter, if you make them full legal tender. They will have the full sanction of the government and be just as good as any money ... the stamp of full legal tender by the Government is the thing that makes money good any time, and this will always be as good as any other money inside the borders of our country."

So that's exactly what Lincoln did. From 1862 to 1865, with Congressional authorization, he printed up $432,000,000 of the new bills.

In order to distinguish them from private bank notes in circulation, he had them printed with green ink on the back side. That's why the notes were called "Greenbacks." With this new money, Lincoln paid the troops, and bought their supplies. During the course of the war, nearly all of the 450 million dollars of Greenbacks authorized by Congress were printed at no interest to the federal government.

By now Lincoln realized who was really pulling the strings and what was at stake for the American people. ... This is how he explained his monetary views:

"The Government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity... By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest. The financing of all public enterprises, and the conduct of the Treasury will become matters of practical administration. Money will cease to be master and become the servant of humanity."

Meanwhile in Britain a truly incredible editorial in the London Times explained the Bank of England's attitude towards Lincoln's Greenbacks.

"If this mischievous financial policy, which has its origin in North America, shall become indurate down to a fixture, then the Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the globe."



Keep in mind, by this time the European monarchs were already chained to their private central banks, hence the bankers' concern to preserve their captive monarchs. Within four days of the passage of the law that allowed Greenbacks to be issued, bankers met in convention in Washington to discuss the situation. It was agreed that Greenbacks would surely be their ruin. Something had to be done. They devised a scheme gradually to undermine the value of the Greenbacks.

Seemingly unimportant limitations on the use of Greenbacks (printed on the green back), insisted on by the bankers, forbidding their use to pay import duties and interest on the public debt, were utilized by the banks to slap a surcharge on Greenbacks of up to 185%. This undermined the confidence of the people in Greenbacks and necessitated further concessions to the bankers to obtain more, discounted as the Greenbacks now were.

This scheme was effective - so effective that the next year, 1863, with Federal and Confederate troops beginning to mass for the decisive battle of the Civil War, and the Treasury in need of further Congressional authority at that time to issue more Greenbacks, Lincoln gave in to the pressure, which he described:

"They persist, they have argued me almost blind - I am worse off than St. Paul. He was in a strait between two. I am in a strait between twenty and they are bankers and financiers."

Lincoln allowed the bankers to push through the National Banking Act of 1863 in exchange for their support for the urgently needed additional Greenbacks. This act created "National Banks" (hence the N.A. still in use after National banks' names) and gave them a virtual tax-free status. The new banks also got the exclusive power to create the new form of money - National Bank Notes. Though Greenbacks continued to circulate, their quantity was limited and no more were authorized after the war.
The ones who REALLY pull the strings in politics are the ones who control the PURSE strings.
Obama, Brown/Cameron, Merkel and their ilk are merely puppets, constantly showing their devotion to the bankster gangster crowd by genuflecting at the altar of Zionism.
The REAL tyrants - the Mammonites, the Plutocrats, the gazillionaires – almost always remain nameless.... except those con artists on the Federal Reserve.

Blair Murdered Glass-Steagall, Charges French Society of Financial Analysts

May 18, 2010 (LPAC) PARIS — Nicolas J. Firzli, the chair of the Paris-based Canadian European Economic Council (CEEC) and former officer of Axa Investment Managers, wrote a long article in defense of Glass-Steagall called "Financial orthodoxy and Banking Regulation: The Lessons of the Glass-Steagall Act," Published in the first quarter issue of Analyse Financiere, the magazine of the French Society of Financial Analysts (SFAF).

Firzli starts by blaming the current mess by the "complacency" of national governments towards large financial corporations and their acceptance of the "progressive phasing out of control mechanisms presented as necessary for the 'modernization' of national economies." After an accurate description of Carter Glass and Henry Steagall's drive for the 1933 bill, Firzli, in a clear reference to today, notes that "the law stopped abuse for over six decades... from 1933 on, 'sellers will no longer be evaluators' and 'lenders ceased to be advisors.'" [backtranslated from the French]

Most interestingly, Firzli notes Tony Blair's personal role in rolling back the Glass-Steagall standards. "In the middle of the 1990s, Bill Clinton and Tony Blair develop and put into practice a 'new way of doing politics' on the center-left which became a model for many European leaders whatever their political tendencies: to impose so-called inevitable reforms, always aimed at weakening the state, taking down public services and full-fledged deregulation, Clinton and Blair called on the advice of 'impartial' experts from New York investment banks and Boston consultancies. Tony Blair even hired McKinsey and 'farmed' to them entire sectors of the British government's policy."

The Blair policy continued under Bush. Despite the Enron scandal, Bush's entourage, according to Bush's Secretary of the Treasury Paul O'Neill who tried to impose regulation, expressed nothing but disdain for the Treasury Department experts whom they branded "sterile academics" generally "lost in their thoughts."

"The disdain for academics and economic experts of the Treasury Department (who were precisely the ones consulted by Senator Carter Glass in 1932-33) is the sign of a dangerous civilian and intellectual decline... We are witnessing at a progressive weakening of the rational-humanist paradigm of the Renaissance and the Enlightenment, and together with that, we see the emergence of a new political paradigm founded on the permanent manipulation of national cultural symbols and the use of media announcement effects."

To conclude, Firzli notes that today, "the situation is far different in post-Communist China which adopted two major laws largely inspired by Glass-Steagall: the law on commercial banks of 1995, completed with the law on stock market traders of 1998 (brought into force at the very moment the U.S. started to consider scrapping Glass-Steagall). Concerned above all with their economic efficacy, the Chinese political elites decided in favor of a strict separation between depository banks and investment banks: of all industrial countries, China is the country whose financial system has best survived the crisis."

Ex-Bundesbank Chief Says Greece Will Never Repay Debt, Says Bailout All About "Rescuing Banks And Rich Greeks"

Finally someone speaks the truth. In an interview with Spiegel Magazine, former Bundesbank chief Karl Otto Pohl, says it how it is: "Without a "haircut," a partial debt waiver, [Greece] cannot and will not ever [repay its debt]. So why not immediately? That would have been one alternative. The European Union should have declared half a year ago -- or even earlier -- that Greek debt needed restructuring." As for the reason for the bailout, Pohl's observation will not be a surprise to our readers "It was about protecting German banks, but especially the French banks, from debt write offs." Is there any hope for Europe now? It appears no, as the right decision was to let Greece go bankrupt: "Investors would quickly have seen that Greece could get a handle on its debt problems. And for that reason, trust would quickly have been restored. But that moment has passed. Now we have this mess." Amusingly, when asked if banks used "speculators" as a straw man to break all EU Rules and especially the Lisbon treaty:"Of course that's possible. In fact, it's even plausible." We can't wait until the German population realizes just how massively it has been scammed. Last week's Nordrhein-Westphalia Merkel loss will seem like a walk in the park once the mobilized German society decides to fix things on its own. Oh, and look for the EU and the euro to be a thing of the past.

Key items from the Spiegel interview:

SPIEGEL: The German government has said that there was no alternative to the rescue package for Greece, nor to that for other debt-laden countries.

Pöhl: I don't believe that. Of course there were alternatives. For instance, never having allowed Greece to become part of the euro zone in the first place.

SPIEGEL: That may be true. But that was a mistake made years ago.

Pöhl: All the same, it was a mistake. That much is completely clear. I would also have expected the (European) Commission and the ECB to intervene far earlier. They must have realized that a small, indeed a tiny, country like Greece, one with no industrial base, would never be in a position to pay back €300 billion worth of debt.

SPIEGEL: According to the rescue plan, it's actually €350 billion ...

Pöhl: ... which that country has even less chance of paying back. Without a "haircut," a partial debt waiver, it cannot and will not ever happen. So why not immediately? That would have been one alternative. The European Union should have declared half a year ago -- or even earlier -- that Greek debt needed restructuring.

SPIEGEL: But according to Chancellor Angela Merkel, that would have led to a domino effect, with repercussions for other European states facing debt crises of their own.

Pöhl: I do not believe that. I think it was about something altogether different.

SPIEGEL: Such as?

Pöhl: It was about protecting German banks, but especially the French banks, from debt write offs. On the day that the rescue package was agreed on, shares of French banks rose by up to 24 percent. Looking at that, you can see what this was really about -- namely, rescuing the banks and the rich Greeks.

SPIEGEL: In the current crisis situation, and with all the turbulence in the markets, has there really been any opportunity to share the costs of the rescue plan with creditors?

Pöhl: I believe so. They could have slashed the debts by one-third. The banks would then have had to write off a third of their securities.

SPIEGEL: There was fear that investors would not have touched Greek government bonds for years, nor would they have touched the bonds of any other southern European countries.

Pöhl: I believe the opposite would have happened. Investors would quickly have seen that Greece could get a handle on its debt problems. And for that reason, trust would quickly have been restored. But that moment has passed. Now we have this mess.

SPIEGEL: How is it possible that the foundation of the euro was abandoned, essentially overnight?

Pöhl: It did indeed happen with the stroke of a pen -- in the German parliament as well. Everyone was busy complaining about speculators and all of a sudden, anything seems possible.

SPIEGEL: You don't believe in the oft-mentioned attacks allegedly perpetrated by currency gamblers, fortune hunters and speculators?

Pöhl: No. A lot of those involved are completely honorable institutes -- such as banks, but also insurance companies and investment- and pension funds -- which are simply taking advantage of the situation. That's totally obvious. That's what the market is there for.

...

SPIEGEL: With the exception that speculators are now carrying no risk at all because euro-zone members have agreed to guarantee Greek debt.

Pöhl: Yes, and that is harmful. It means that the basic balancing mechanism in the market economy is out of sync.

SPIEGEL: Is it possible that politicians invented the specter of rampant speculation to legitimize a break with the Lisbon Treaty and with the ECB's rules?

Pöhl: Of course that's possible. In fact, it's even plausible.

SPIEGEL: What will be the political consequences of this crisis?

Pöhl: The whole mechanism of the European community will change. The EU is a federation of nations, not a federal republic. But now the European Commission will have a lot more power and more authority as well as the potential to interfere in national budget law. That, however, is constitutionally problematic in Germany.

SPIEGEL: But this could also be construed as a positive development. For a long time, critics have been saying that before we can have a genuine currency union we need common fiscal and economic policy. Surely this crisis has brought the EU closer to that goal.

Pöhl: Yes, that is the logical next step of our union, but we must bear the burden. You only have to look at what it is going to cost us Germans. I would have preferred that things hadn't gone quite this far.

...

SPIEGEL: If you were president of the Bundesbank today, would you be ordering the printing of German marks just in case they became necessary?

Pöhl: No, no, we have not gone that far quite yet. In my opinion, the euro is in no danger. Perhaps one of the smaller countries will have to leave the currency union.

SPIEGEL: How should that work?

Pöhl: It would involve Greece, if we stick with the case we were discussing, reintroducing the drachma.

SPIEGEL: But Greece doesn't seem to have any interest in doing that -- and it would be against European agreements to force Athens to leave the currency union.

Pöhl: That is correct. As long as a country receives such massive support, it would, of course, have no interest in turning its back on the euro.

SPIEGEL: You think that could change?

Pöhl: On the mid and long term, I wouldn't rule it out.

Deepwater Horizon: Send us your ideas for capping the BP oil spill

We want your ideas on how to stop the leak - we'll publish your suggestions online and present them to BP too

Thank you for your ideas. We are no longer accepting submissions and have passed your 186 suggestions to BP - you can add yours via BP's suggestions process

Oil spill Deepwater Horizon oil rig : Oil washes on the land near Chandeleur Island

Oil washes on the land near Chandeleur Island, Louisiana, May 7, 2010. Photograph: Larry W. Smith/EPA

BP last night successfully inserted a tube into the riser, the broken pipe from which most of the oil is gushing into the Gulf of Mexico, allowing oil and gas to be siphoned off into a drill ship at the surface. But the oil is still leaking, despite several previous efforts including a cofferdam which failed to stem the leak.

That's why today we're calling for your ideas on how to stop the leak. In particular, we're looking for views from experts with knowledge of the oil industry. Whether you're an engineer in the field, an academic or a retired oil expert, we'd like to hear from you.

Just submit your idea below - we'll publish your ideas online and present them to BP too.

WMD LIES - Bush Cheney Rumsfeld etc. - THE ULTIMATE CLIP

Click this link ..... http://www.youtube.com/watch?v=EYI7JXGqd0o

THE LIE OF THE CENTURY

The Downing Street Memo is only the beginning of the proof we were all lied to.

Michael Rivero

[Text only version][Italian translation provided by reader][pdf version]

"All war is based on deception." -- Sun Tzu, The Art of War

There is nothing new in a government lying to their people to start a war. Indeed because most people prefer living in peace to bloody and horrific death in war, any government that desires to initiate a war usually lies to their people to create the illusion that support for the war is the only possible choice they can make.


President McKinley told the American people that the USS Maine had been sunk in Havana Harbor by a Spanish mine. The American people, outraged by this apparent unprovoked attack, supported the Spanish American War. The Captain of the USS Maine had insisted the ship was sunk by a coal bin explosion, investigations after the war proved that such had indeed been the case. There had been no mine.

Hitler used this principle of lying to his own people to initiate an invasion. He told the people of Germany that Poland had attacked first and staged fake attacks against German targets. The Germans, convinced they were being threatened, followed Hitler into Poland and into World War 2.

FDR claimed Pearl Harbor was a surprise attack. It wasn't. The United States saw war with Japan as the means to get into war with Germany, which Americans opposed. So Roosevelt needed Japan to appear to strike first. Following an 8-step plan devised by the Office of Naval Intelligence, Roosevelt intentionally provoked Japan into the attack. Contrary to the official story, the fleet did not maintain radio silence, but sent messages intercepted and decoded by US intercept stations. Tricked by the lie of a surprise attack, Americans marched off to war.

President Johnson lied about the Gulf of Tonkin to send Americans off to fight in Vietnam.

There were no torpedoes in the water in the Gulf. LBJ took advantage of an inexperienced sonar man's report to goad Congress into escalating the Vietnam War.


It is inescapable historical reality that leaders of nations will lie to their people to trick them into wars they otherwise would have refused. It is not "conspiracy theory" to suggest that leaders of nations lie to trick their people into wars. It is undeniable fact.

This brings us to the present case.

Did the government of the United States lie to the American people, more to the point, did President Bush and his Neocon associates lie to Congress, to initiate a war of conquest in Iraq?

This question has been given currency by a memo leaked from inside the British Government which clearly indicates a decision to go to war followed by the "fixing" of information around that policy. This is, as they say, a smoking gun.

But the fact is that long before this memo surfaced, it had become obvious that the US Government, aided by that of Great Britain, was lying to create the public support for a war in Iraq.

First off is Tony Blair's "Dodgy Dossier", a document released by the Prime Minister that made many of the claims used to support the push for war. The dossier soon collapsed when it was revealed that much of it had been plagiarized from a student thesis paper that was 12 years old!

The contents of the dossier, however much they seemed to create a good case for invasion, were obsolete and outdated.

This use of material that could not possibly be relevant at the time is clear proof of a deliberate attempt to deceive.

Then there was the claim about the "Mobile biological weapons laboratories". Proffered in the absence of any real laboratories in the wake of the invasion, photos of these trailers were shown on all the US Mainstream Media, with the claim they while seeming to lack anything suggesting biological processing, these were part of a much larger assembly of multiple trailers that churned out biological weapons of mass destruction.
The chief proponent of this hoax was Colin Powell, who presented illustrations such as this one to the United Nations on February 5th, 2003.

This claim fell apart when it was revealed that these trailers were nothing more than hydrogen gas generators used to inflate weather balloons. This fact was already known to both the US and UK, as a British company manufactured the units and sold them to Iraq.


Click for full sized image

Colin Powell's speech to the UN was itself one misstatement after another. Powell claimed that Iraq had purchased special aluminum tubes whose only possible use was in uranium enrichment centrifuges. Both CIA and Powell's own State Department confirmed that the tubes were parts for missiles Saddam was legally allowed to have. Following the invasion, no centrifuges, aluminum or otherwise were found.


Click for full sized image

Powell also claimed to the United Nations that the photo on the left showed "Decontamination Vehicles". But when United Nations inspectors visited the site after the invasion, they located the vehicles and discovered they were just firefighting equipment.

Powell claimed the Iraqis had illegal rockets and launchers hidden in the palm trees of Western Iraq. None were ever found.

Powell claimed that the Iraqis had 8,500 liters (2245 gallons) of Anthrax. None was ever found.

Powell claimed that Iraq had four tons of VX nerve gas. The UN had already confirmed that it was destroyed. The only VX ever found were samples the US had left as "standards" for testing. When the UN suspected that the US samples had been used to contaminate Iraqi warheads, the US moved quickly to destroy the samples before comparison tests could be carried out.

Powell claimed that Iraq was building long-range remote drones specifically designed to carry biological weapons. The only drones found were short-range reconnaissance drones.

Powell claimed that Iraq had an aggregate of between 100 and 500 tons of chemical and biological warfare agents. Powell gave no basis for that claim at all, and a DIA report issued the same time directly contradicted the claim. No biological or chemical weapons were found in Iraq following the invasion.

Powell claimed that "unnamed sources" confirmed that Saddam had authorized his field commanders to use biological weapons. No such weapons were ever used by the Iraqis to defend against the invasion and, of course, none were ever found in Iraq.

Powell claimed that 122mm warheads found by the UN inspectors were chemical weapons. The warheads were empty, and showed no signs of ever having contained chemical weapons.

Powell claimed that Iraq had a secret force of illegal long-range Scud missiles. None were ever found.

Powell claimed to have an audio tape proving that Saddam was supporting Osama Bin Laden. But independent translation of the tape revealed Osama's wish for Saddam's death.

Colin Powell's UN debacle also included spy photos taken from high flying aircraft and spacecraft. On the photos were circles and arrows and labels pointing to various fuzzy white blobs and identifying them as laboratories and storage areas for Saddam's massive weapons of mass destruction program. Nothing in the photos actually suggested what the blobby shapes were and during inspections which followed the invasion, all of them turned out to be rather benign.

In at least one case, the satellite Powell claimed had taken one of the pictures had actually been out of operation at the time. And many questioned why Powell was showing black and white photos when the satellites in use at the time over Iraq took color images.

Another piece of evidence consists of documents which President Bush referenced as in his 2003 State of the Union Speech. According to Bush, these documents proved that Iraq was buying tons of uranium oxide, called "Yellow Cake" from Niger.

Since Israel had bombed Iraq's nuclear power plant years before, it was claimed that the only reason Saddam would have for buying uranium oxide was to build bombs.

This hoax fell apart fast when it was pointed out that Iraq has a great deal of uranium ore inside their own borders and no need to import any from Niger or anywhere else. The I.A.E.A. then blew the cover off the fraud by announcing that the documents Bush had used were not only forgeries, but too obvious to believe that anyone in the Bush administration did not know they were forgeries! The forged documents were reported as being "discovered" in Italy by SISMI, the Italian Security Service. Shortly before the "discovery" the head of SISMI had been paid a visit by Michael Ledeen, Manucher Ghorbanifar, and two officials from OSP, one of whom was Larry Franklin, the Israeli spy operating inside the OSP.

In July, 2005, the Italian Parliament concluded their own investigation and named four men as suspects in the creation of the forged documents. Michael Ledeen, Dewey Clarridge, Ahmed Chalabi and Francis Brookes. This report has been included in Patrick Fitzgerald's investigation into the outing of Valerie Plame, and Paul McNulty, the prosecutor of the AIPAC spy case.

A recently declassified memo proves that the State Department reported the fact that the NIger documents were forgeries to the CIA 11 days before President Bush made the claim about the Niger uranium based on those documents.

In the end, the real proof that we were lied to about Iraq's weapons of mass destruction is that no weapons of mass destruction were ever found. That means that every single piece of paper that purported to prove that Iraq had weapons of mass destruction was by default a fraud, a hoax, and a lie. There could be no evidence that supported the claim that Iraq had weapons of mass destruction because Iraq did not have weapons of mass destruction. In a way, the existence of any faked documents about Iraq's WMDs is actually an admission of guilt. If one is taking the time to create fake documents, the implication is that the faker is already aware that there are no genuine documents.

What the US Government had, ALL that they had, were copied student papers, forged "Yellow Cake" documents, balloon inflators posing as bioweapons labs, and photos with misleading labels on them. And somewhere along the line, someone decided to put those misleading labels on those photos, to pretend that balloon inflators are portable bioweapons labs, and to pass off stolen student papers as contemporary analysis.

And THAT shows an intention to deceive.

Lawyers call this "Mens Rea", which means "Guilty Mind". TV lawyer shows call it "Malice aforethought". This means that not only did the Bush Administration lie to the people and to the US Congress, but knew they were doing something illegal at the time that they did it.

All the talk about "Intelligence failure" is just another lie. There was no failure. Indeed the Army agents who erroneously claimed that missile tubes were parts for a uranium centrifuge received bonuses, while the Pentagon smeared Hans Blix, and John Bolton orchestrated the firing of Jose Bustani, the director of the Organization for the Prohibition of Chemical Weapons, because Bustani was trying to send chemical weapons inspectors to Baghdad.

The President of the United States and his Neocon associates lied to the people of the United States to send them off on a war of conquest.

Defenders of the government will point to the cases listed at the top of the page as proof that lying to the people is a normal part of the leader's job and we should all get used to it. And because "Everybody does it" that we should not single out the present administration. But this is madness. We do not catch all the murderers, yet when we catch a murderer, we deal with them as harshly as possible, in order to deter more murderers.

Right now, we have the criminals at hand. and, while other leaders in history have lied to start wars, for the first time in history, the lie stands exposed while the war started with the lies still rages on, to the death and detriment of our young men and women in uniform. We cannot in good moral conscience ignore this lie, this crime, lest we encourage future leaders to continue to lie to us to send our kids off to pointless wars. Lying to start a war is more than an impeachable offence; it the highest possible crime a government can commit against their own people. Lying to start a war is not only misappropriation of the nation's military and the nation's money under false pretenses, but it is outright murder committed on a massive scale. Lying to start a war is a betrayal of the trust each and every person who serves in the military places in their civilian leadership. By lying to start a war, the Bush administration has told the military fatalities and their families that they have no right to know why they were sent to their deaths. It's none of their business.

Our nation is founded on the principle of rule with the consent of the governed. Because We The People do not consent to be lied to, a government that lies rules without the consent of the governed, and ruling without the consent of the governed is slavery.

You should be more than angry. You should be in a rage. You should be in a rage no less than that of the families of those young men and women who have been killed and maimed in this war started with a lie.You need to be in a rage and you need to act on that rage because even as I type these words, the same government that lied about Iraq's nuclear weapons is telling the exact same lies about Iran's nuclear capabilities. The writing is on the wall; having gotten away with lying to start the war in Iraq, the US Government will lie to start a war in Iran, and after that another, and after that another, and another and another and another because as long as you remain silent, and as long as you remain inactive, the liars have no reason to stop.

As long as you remain inactive, the liars have no reason to stop.

None.

It is time to fire the liars.

"The only thing necessary for the triumph of evil is
for good men to do nothing"
.
--Edmund Burke


U.S.C. TITLE 18 > PART I > CHAPTER 47 § 1001.
(a) Except as otherwise provided in this section, WHOEVER, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully—
(1) falsifies, conceals, or covers up by ANY trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation; or
(3) makes or USES any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title or imprisoned not more than 5 years, or both.
(b) Subsection (a) does not apply to a party to a judicial proceeding, or that party's counsel, for statements, representations, writings or documents submitted by such party or counsel to a judge or magistrate in that proceeding.
(c) With respect to any matter within the jurisdiction of the legislative branch, subsection (a) shall apply only to—
(1) administrative matters, including a claim for payment, a matter related to the procurement of property or services, personnel or employment practices, or support services, or a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch; or
(2) any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate.

SO HERE IS WHAT WE ARE GOING TO DO

The Bush administration and their friends in the media want this story to go away. More than want it to go away, they are in a panic, and will do everything they can to stop it. They will use every dirty trick, every paid shill, every presstitute that they can. Already there is a report that the Michael Jackson jury is "expected" to reach a verdict just before the Conyers hearings.

So, I want YOU to copy this article off, post it everywhere. This article is placed in the public domain. Mail it to your friends. Then send it to your local media and your Congresscritters and have everyone you know do the same. Get on the phones. Flood their offices.

The term is "Viral Marketing" where you get the people who need a product to market it for you. Well, this nation NEEDS this "product". It needs to know that this war was started with lies. INTENTIONAL lies. And they need to know there is something they can do about it, and that is to start pounding on the doors of power.

Because when a flood of such messages reaches the Congress and the media, what they will hear is that there is no more time. Either they will deal with these lies and the liars, in full, or they will lose all credibility as a government and as media.

A government that lies to the people cannot be the legal government of this land. Make sure that they understand that YOU understand that the Constitution does not allow the government to lie to the people. Calling themselves the government does not make it so if they act unconstitutionally and illegally. The Constitution is the original "Contract with America" and a government that lies stands in clear breach of that contract.

MORE MEDIA CONTACTS MORE CONGRESSIONAL CONTACTS

But when a long train of abuses and usurpations, pursuing invariably the same Object, evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
-- "The Declaration of Independence"

'Bring 'em on!' - Bush's Legacy of Death in Iraq