Friday, October 1, 2010

House passes bill aimed at Chinese currency

The House of Representatives approved legislation Wednesday designed to combat the manipulation of currency by China that results in unfavorable trade conditions for the United States.

The legislation, which authorizes the Commerce Department to impose duties on imports from countries with undervalued currencies, passed by a vote of 348 to 79.

The bill got support from both sides of the aisle, a rarity in recent sessions, with Democrats framing the legislation as a jobs issue.

"We can talk, or we can act. International trade is a high stakes, cut-throat business, and every time we simply talk, the other side acts, and every time they act, an American loses a job," said Rep. Xavier Becerra, D-California.

China said this year it would allow its currency, the renminbi, to trade in a wider range against the dollar. But the currency, also known as the yuan, has scarcely appreciated since then, inflaming critics who charge the undervalued renminbi helps steal U.S. manufacturing jobs.

Estimations on the undervaluation of the renminbi vary depending on the economic model used, but one estimate by the Peterson Institute of International Economics puts the number at about 24% against the dollar.

That undervaluing makes Chinese goods cheaper to buy in the United States and likewise drives up the price of U.S. goods sold in China.

The House vote caps years of frustration for lawmakers as the United States has continued to shed manufacturing jobs, and promises of reform from the Chinese have failed to result in policy changes.

"If this risks upsetting the People's Republic of China, so be it," said Ohio Democrat Tim Ryan. "Whether you're a Democrat or a Republican, a liberal or a conservative -- millions of good-paying jobs have been lost and hundreds of thousands of families across this country have suffered as a result of China's unlawful trade policies."

The legislation now moves to the Senate. Sen. Charles Schumer, a New York Democrat, says the body will act quickly to move the bill to the president's desk.

"We must take decisive action against China's currency manipulation and other economically injurious behavior," Schumer said on Tuesday, noting that the Senate will take up the issue when it reconvenes later this year.

"China is merely pretending to take significant steps on its currency," Schumer said. "This sucker's game is never going to stop unless we finally call their bluff."

But not every member of Congress is convinced, especially after China raised tariffs on U.S. poultry producers earlier this week and accused them of dumping product into the Chinese market.

Citing potential retaliatory measures from China, Texas Republican Rep. Jeb Hensarling said the bill was "unwise public policy" during tough economic times.

Earlier on Wednesday, President Obama addressed the issue at a town hall-style meeting.

"The reason I'm pushing China about their currency is because their currency is undervalued," he said, adding that "people generally think they are managing their currency in a way that makes our goods more expensive to sell there and their goods cheaper to sell here."

The resulting imbalance is a major factor contributing to the U.S. trade deficit, the president said.

Last week, Obama urged Chinese Premier Wen Jiabao to speed up the revaluation of the yuan currency, telling him in a two-hour meeting at the United Nations that the slow pace of reforms was affecting both global and U.S. economies.

The meeting on the sidelines of the U.N. General Assembly followed a speech by Wen the night before in which he told the business community in New York that China will continue reforming and opening its markets under a policy it started in 1978 by officially ending decades of isolation.

However, demands by U.S. lawmakers that China revalue its currency by more than 20% would bankrupt Chinese companies and lead to "major unrest" in his country, Wen said in the speech.

Obama Working on Plan to Wiretap Skype, Facebook, BlackBerrys

The Obama administration wants to force all communications companies to make their networks compliable with wiretapping orders from law enforcement, a change that would primarily affect the likes of Facebook, Skype, BlackBerrys and similar encrypted systems.

Phone and broadband companies already are required under the 1994 Communications Assistance to Law Enforcement Act to ensure their operations can allow for eavesdropping by police and federal agents. But more recent communications like BlackBerrys, which encrypt emails, make it difficult for the government to intercept messages that may involve terrorist plots.

The White House has been working with the FBI, the Department of Justice and the National Security Agency to develop a plan that would be submitted to Congress sometime next year.

Copyright © 2006-2010

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"Underground" Group of Cadets Say Air Force Academy Controlled by Evangelicals

An anonymous cadet at the US Air Force Academy (USAFA ) spoke out against alleged religious discrimination at the school last week, saying that some cadets must pretend to be evangelical Christians in order to maintain standing among their peers and superiors. In an email to the Military Religious Freedom Foundation (MRFF), the whistleblower stated that he is part of an "underground group" of about 100 cadets who cannot rely on proper channels to confront evangelical pressure.

The email, published by Veterans Today, applauds the MRFF from the "underground" and indicates that the academy is "literally overrun with Christian conservative fanatics."

The MRFF and allies from a myriad of civil rights and interfaith groups sent a letter Tuesday to the Department of Defense (DoD) detailing the cadet's email and other startling complaints, including testimony from the parents of an academy graduate who believe their daughter was "methodically brain washed" by a fundamentalist group there, demanding an investigation of the academy and the evangelical academy ministry Cadets For Christ.

The MRFF is also demanding the DoD pressure the USAFA to publicly release the results of a study of the religious climate at the academy.

Academy leadership announced last month that the results would not be released, which angered the anonymous cadet who contacted the MRFF.

Results of the so-called "Climate Study" leaked to the press, and "353 cadets (almost 1 out of every 5 survey participants) reported having been subjected to unwanted religious proselytizing, and 23 cadets (13 of them Christians) reported living 'in fear of their physical safety' because of their religious beliefs," according to the MRFF.

Mikey Weinstein, a USAFA graduate and MRFF founder, told Truthout that USAFA Superintendent Lt. Gen. Mike Gould was dishonest about the results of the Climate Study, and told the public that everything was fine at the academy without releasing the actual results. He said it's time for a legitimate investigation of the "fundamentalist culture" in the academy.

"That commander's report belongs to the public because [Gould] lied to the American people," Weinstein said. "Until August of this year, I was supporting Gould and the Academy, now it is obvious that was a mistake."

The USAFA issued a press release earlier this month after the MRFF alleged that dozens of cadets had come forward and complained about the improper and cult-like evangelism practiced by Cadets for Christ.

"Upon learning of this allegation, Lt. Gen. Mike Gould, USAFA superintendent, directed an immediate review of the claim," the release states. "To date, the allegation is not substantiated. Throughout his tenure as Superintendent, General Gould has repeatedly emphasized the necessity for religious accommodation and respect."

Weinstein received the email from the anonymous cadet after this initial spat with the academy and Gould.

The email describes a group of cadets who don't fit the Protestant evangelical stereotype; they're Catholics, mainstream Protestants, LGBT, atheists or agnostic. They tell Weinstein that his earlier advice to "trust the system" and take their grievances up the chain of command has failed, and they are forced to pretend to be something they are not. In order to achieve and prosper in the academy, these cadets pretend to be evangelicals and even attend Bible studies to avoid being "outed."

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"Despite the Cadet Honor Code we all lie about our lives," the anonymous cadet writes. "We have to. We don't have a choice. Thus we are all 'invisible' to our tormentors. They will never find us. My own parents don't know. Only my fiancée knows and he/she is one of my classmates and a fellow member of our underground group. I keep 'Christian' books and 'Christian' CD's in my room so others will be fooled and leave me alone and not suspect that I'm not actually with the USAFA 'Christianity is the Only Way' program here, even though I consider myself to be a Christian."

The cadet reports that, in response to the MRFF's attempt to hold USAFA leaders accountable, the academy's public affairs office included anti-MRFF blog posts from in a blanket email containing news clips about the USAFA to the entire academy.

The blog, constantly at odds with Weinstein and the MRFF, reports deflecting a MRFF lawsuit earlier this year. Weinstein said the MRFF is considering future legal action.

In its letter to the DoD, the MRFF maintains that the Christian Fighter Pilot "God and Country" blog has spread personal attacks and lies about the foundation. The MRFF is also concerned about a blog post included in the mass email regarding ministry group Cadets for Christ, although it is unclear if the blogger is associated with Cadets for Christ.

Cadets and graduates, as well as concerned parents of several cadets and graduates, have contacted the MRFF with serious concerns about Cadets for Christ, according to the letter to Gates.

The letters details the startling testimony of two Catholic parents of a 2010 graduate who, at first, were happy to hear that their daughter joined a Bible study group at the academy. That was before they discovered that their daughter was being taught that her "career should be that of a wife and mother," and in Biblical terms, "the female is the sheep and the male is the shepherd."

"Our daughter was methodically brain washed into believing that she was unsaved in the Catholic religion," the anonymous parents wrote in an email to the MRFF. "During spring break 2009, she urgently asked that we read the Bible everyday in order to 'receive the grace of God and be saved.' This manner of speech took us completely off guard."

"This invisible force has rocked our family to the core. Two sisters no longer talk to one another. A mother has been asked to no longer contact her daughter. A father tries very hard to keep some sense of equilibrium in the family. This is what our family has become. Nevertheless, we will continue our attempts to bring our daughter back to us - we will never give up hope."

"As parents, it is very difficult to see your child change in a manner that you no longer recognize her as your own. We grossly underestimated the power of this group. Being at such a geographical distance, coupled with the rigors of the USAFA, it becomes more difficult to monitor behavioral changes until they have taken deep root. Do you have any idea how it feels to grieve the loss of a child who is alive and healthy? THE AIR FORCE ACADEMY ALLOWED THIS TO HAPPEN!"

The Christian Fighter Pilot blog claims the MRFF attack on Cadets for Christ for being a "cult" is hypocritical, and a cult has every right to be a cult as long as it does not break any civil or military laws.

"The restrictions on the free exercise of what Weinstein calls a 'Christian cult' are no different than those on any other faith or non-faith group in the military, including what some may have called a 'pagan cult' for which the Air Force Academy created a chapel earlier this year," according to the blog. "The fact that Weinstein has heartburn over the Christian content of this group is irrelevant to their right to free exercise, though it does highlight the fact his goal isn't 'religious freedom' after all."

As of Wednesday, the Cadets for Christ web site appears to be down. The Colorado Independent reported that its organizers did not respond to a request for an interview.

The MRFF represents nearly 20,000 members of the military, more than 90 percent of them are Christians, according to Weinstein, who is a member of the Truthout board of advisers.

The Bipartisan War Machine

The desperately sad situations in Iraq and Afghanistan, and the dramatic contrast between the promises and the realities of war, have brought into sharp relief the moral and practical calamity of US foreign policy. But while it is tempting to fix blame on only the current managers who occupy the White House, we must also consider the larger picture.

The neoconservative clique and their partners have deepened the commitment to American empire, but Republicans hold no monopoly on building empire in the recent history of our country.

The Bill Clinton regime, now seemingly forgotten except as a kind of Camelot II by the American Left, featured most of the same patterns of imperial conquest and domestic repression, though all of this was marked by Clinton's inimitable style. A different cast of characters achieved the same result with the same methods for the same ends.

For example, the bombing of Serbians to spread democracy, though dwarfed by the latter attack, was in principle little different from the conquest of Iraq. It is vital to remember that the bombing of at least something or someone in Iraq went on practically every day for all the years between the Gulf wars, as did the murderous embargo. Most of this destruction belonged to Clinton.

Indeed, even now much of the bold Democratic (that is to say, social democratic) opposition to the war in Iraq comes from folks who were happy enough to see the war happen, though earlier this year some of those war supporters did add the reservation that our slaughter of Iraqis would be better if we did it in unison with the United Nations.

The hard, antiwar left, was no part of this, but note well that most of the leading Washington Democratic politicos and pundits now coming out as opponents of the Occupation supported both the Serbian war and the war on Iraq.

The greater pattern runs like this, and in some measure it is derived from a system of empire and "democracy" reaching back to the Great Crusade of 1861-1865. We invade some country with some laudable Jacobin slogan on our lips: "make the world safe for democracy," "the four freedoms," "winning the hearts and minds," etc. We demonize the ruler of said country, making him into the "face of evil," so that those in our land who can't quite grasp the meaning of a "crusade for humanity" can latch onto the more prosaic goal of killing a really bad guy. (This is easy enough, since most leaders of modern countries have plenty of skeletons in their closets)

At the end of the victorious crusade, we "reconstruct" the country, with price tags rising war-by-war. Part of this money goes to enhance the power and size of the military establishment policing the occupation. Part of it goes toward rooting out and expropriating certain chosen, and wealthy, intractable ruling elites and setting up deserving new elites who will be friendly. Part funds the physical reconstruction of the damage done during the war (most of which we did ourselves--some of it at least, gratuitous).

This last part is critical, since it is done by awarding "contracts" to American or other firms to do the work. Most of the contracts are awarded far in advance, and those businesses which receive the contracts will always be among the deserving companies that supported the war in any case. Note well that the United States of America then pays for or organizes the funds for reconstruction of the defeated country. These funds are always based on money taxed or otherwise extracted (through inflation, confiscation, etc.) from private citizens and then handed over to selected firms who support the current administration.

The continuities of this pattern through the alternative Democratic and Republican administrations are absolute, but the alternation provides much scope for Democratic and Republican pundits to be alternately warlike crusaders and rational peace-lovers, depending on how their partisan loyalties match with current political culpability.

All throughout the Clinton years, the Republicans were developing strong anti-empire and even antiwar tendencies. They decried nation building and took steps toward seeing the war machine as an integral part of the problem of big government. During the presidential campaign, Bush tapped into this sense by decrying "national building" and calling for a "humble" foreign policy.

The critique of Clinton's foreign policy didn't stop there. Some on the right began delving into the interest-group analysis along the lines of the old left. A case in point is an important Newsmax story by Carl Limbacher and Caron Grich from 1999, entitled " The Caspian Connection ." The story contextualizes the Serbian war by showing the geographic and geopolitical connections of the Balkans and Caspian oil. It is still important to read.

And yet, in the end, it didn't stick. is a "conservative" news source which follows a kind of Rush-Limbaugh trajectory in equating conservatism with whatever the Republican National Committee is cooking up at the moment.

Now that the Bush administration has, seemingly for very different reasons, chosen to invade and occupy two countries which bracket the crucial oil-bearing region, only runs oil-related stories which bolster the pro-war line, emphasizing competition with the Russians, the need for a "stable" supply of oil, etc. See for example the article from year ago on the Pipeline.

Paleoconservatives and libertarians know this already: though the alternating regimes look different, they tend to follow a series of intertwined policies. Empire is so useful, in both domestic and foreign policy, that no modern administration would be able to resist, even if it wanted to. In fact, since the "teams" are built in advance for precisely this kind of game, there is no way that any new administration would want to.

The Bush White House displays more decorum than the lubricious establishment of la Boca Grande (to borrow from Westbrook Pegler) and the Big Jerk, but its goals and accomplishments are in their essence the same, and its success rate is actually a good deal better. The Dick Cheney strategy differs little from the Madeleine Albright strategy, though each is pleased to point to the failures and missteps of the other.

And the results will be the same: bigger, more intrusive government at home; a world of perpetual war for perpetual peace abroad. The job of a serious believer in liberty is to learn to distinguish between a politically driven attack and a fundamental critique, avoiding the former and focusing as much energy as possible on the latter.

Hunt Tooley teaches history at Austin College. He is the author of "The Hindenburg Program of 1916: A Central Experiment in Wartime Planning".

Friendly Fire: Whining Up Front, Warmongering in the Back

While Barack Obama busies himself in public with hectoring his "base" for not appreciating the super-progressive wonderfulness of his administration, behind the scenes he is rapidly escalating America's war on its own ally, Pakistan, with a series of deadly incursions that seemed designed to provoke the Pakistanis into a violent response -- which could then be used to "justify" a further escalation.

The new "surge" against Pakistan is not limited to attacks on "militants" (the description now given to any Pakistani -- man, woman or child -- who is killed by American ordnance) but is also being waged against the forces of the Pakistani government itself. After a weekend bombing blitzkrieg across Pakistan's supposedly sovereign border that left more than 50 people dead, American forces launched a pre-dawn helicopter raid on Thursday which hammered two posts of Pakistan's Frontier Corps, killing three soldiers. That is to say, three allied soldiers of an army that has lost hundreds of men fighting (and killing and displacing) its own people at the behest of Washington.

No explanation for the attacks on Pakistani forces has been offered yet. Perhaps they were launched to put a little muscle behind the visit of Obama's CIA chief, Leon "Let the Torturers Go Free" Panetta, who coincidentally, or not so coincidentally, was arriving in Pakistan for talks with the nation's military chiefs on Thursday. After all, shedding blood is an excellent way to concentrate the minds of one's counterparts in negotiation.

In response to the attack, Pakistan did close a transit point for supplies for the American-led occupation forces in Afghanistan; but this is doubtless a temporary measure -- and anyway, it's pretty weak beer compared to actually murdering your ally's soldiers.

It is almost certain that we will never learn the real reasons behind these particular attacks; the operations of the Terror War are obscured by so much deliberately fomented murk, so many factions with various covert agendas, and so much "plausible deniability" that specific events can rarely be discerned with any clarity. But the general fact of Obama's relentless escalation of military action in and against Pakistan cannot be denied. Likewise, the result of this surge, if it continues apace, is equally clear: the further destabilization of a nuclear-armed nation now suffering one the greatest humanitarian disasters in modern times, with a concomitant rise in extremism, desperation, violence, and the world-shaking destabilization of a region already long poised on the brink of nuclear war.

As I've said here before, you must forgive me for not being overly concerned about the political fortunes of a president and a party embarked on a course of such murderous lunacy.

Common Habits and Mistakes That Can Cost You Dearly

Common Habits and Mistakes That Can Cost You Dearly

These are common habits and mistakes that people make that cost you money and most people don’t know they are paying this extra money. Eliminate the 5 common habits and put extra money in your bank instead of the credit card company, car dealers, tobacco industry and the power company. The biggest mistake you can make is to paying on student loans and the interest for years after you graduated. Don’t even think about not paying them at all, these are Federal loans, they can garnish payments from your wages including Social Security your Federal income tax until it is paid in full.

Paying only the minimum payment on Credit Cards. Paying the minimum payment on your credit card balance every month keeps your creditors content, but is not helping you pay off the growing interest charges that you make with every payment. Credit card companies list only you minimum payments and interest is calculated on your current balance. With a $3,000 credit balance at 12.99% annually, a minimum payment percent of 12%, a minimum monthly payment of $17.00, for 36 months/ 3 years will pay $291.00 in total interest. Increasing the minimum payment percent to 30%, the minimum monthly payment to $50.00, you could pay it off in 12 months/1 year and the total interest paid would only be $110.00, that is a $181.00 saving. To determine how much you can save by increasing you monthly payment and paying you balance off faster, see

Ignoring your student loans. Even though you graduated years ago, it will cost you hundreds of dollars in interest alone just paying the minimum payment and if you stop paying altogether, nonpayment can be garnished from you wages including government income. Pay down that student loan already, it’s costing you dearly in interest charges to carry the balance, so get a calculator and see how you can best afford increasing your payment and paying it off faster.

A drafty attic, windows and doors, A attic without insulation can leak air costing you hundreds of dollars in your heating and cooling every year. Just by adding insulation and weather stripping to your hatch, window and doors making them air tight can save you hundreds of dollars and cut you’re heating and cooling cost by at least 20% or more.

Is buying a brand new car worth the cost, A new car smells great but is that new smell really worth the approximately 11% to 20% is lost just driving it off the lot, 15 -25% the first 5 years you own the care or the 37% after the first 5 years. According to popular car site if you plan on driving the wheels off your car then buying new is worth the price you pay, if you plan on trading it in think smart about the resale value of your car.

Smoking what’s the real cost to you, The cost of a pack of cigarettes is over $5.00 a pack, not including taxes, depending on where you live. If you buy generic cigarettes, pay just $5.00 per pack and smoke a pack a day, it can cost you $35.00 a week and $1,820 a year. I n 5 years time you will have spent $9,100 on cigarettes and this does not include any health care cost that smoking can cause you or loved ones from second hand smoke, now or in the future. Weather you smoke cigarettes a pipe, cigar, or chew, tobacco is a health care risk that can lead to health care cost you cannot afford.

As Western Civilization Lies Dying

The Western commercial system exists to extract more from consumers than it supplies in products and services. Its goal is profit and has never been to improve the human condition but to exploit it. When governments institutionalize this system, they place their nations on suicidal paths, because as Jefferson recognized, "Merchants have no country." It is not terrorism that threatens the security of the Western World, it is the Western World's commercial system.

A man suffering from severe chest pains collapses. His wife calls 911. An ambulance arrives, the EMTs treat the patient, place him in the ambulance's bed, and start off to the hospital. Along the way, the engine stalls. The ambulance's staff begins arguing about how to get the motor restarted. One says more gasoline is needed, another says there's water in the tank, a third says the fuel filter is clogged. While they argue, the patient lies dying.

This situation is analogous to what's happening in America and parts of Europe. While economists and politicians argue, their nations are in the throes of death. These people are looking for the devil in the details, but he is not there. It's the system itself that’s diabolical.

The Western commercial system is extractive. It exists to extract more from consumers than it supplies in products and services. Its goal is profit, and profit literally means to make more (pro-ficere). Its goal has never been to improve the human condition but to exploit it. It works like this:

Consider two water tanks, initially each partially full, one above the other. One gallon of water is dumped from the upper tank into the lower one for each two gallons extracted from the lower tank and pumped into the upper tank. Over time, the lower tank ends up empty and the upper tank ends up full. The circulation of water between the tanks ends.

Essentially, this scenario describes all commercial systems based on profit. It is why the top 20 percent of Americans has 93 percent of the nation's financial wealth and the bottom 80 percent has a mere seven percent. It is why the bottom 40 percent of all income earners in the United States now collectively own less than one percent of the nation’s wealth. It is why the nation's poverty rate is now14.3 percent, about 43.6 million people or one in seven. It is also why the Wall Street Journal has reported that 70 percent of people in North America live paycheck to paycheck. It is also why, despite numerous pledges over decades, no progress has been made in reducing world-wide poverty. The system is a thief.

The economy has collapsed not because of misfeasance, deregulation, or political bungling (although all may have been proximate causes), it has collapsed because the pockets of the vast majority of Americans have been picked. The housing bubble didn't burst because home prices had risen, it burst because the pockets of consumers had been picked so clean they could no longer service their mortgages.

What the wealthiest 20 percent of Americans don't realize is that some in this group will begin to target the others in order to keep the extractive process working. In fact, it's already happening. "The brute force of the recession earlier this year turned back the clock on Americans' personal wealth to 2004 and wiped out a staggering $1.3 trillion as home values shrank and investments withered." Little of this loss from investments was suffered by the lower 80 percent of Americans. There is, after all, no goodwill within greed, and the market can be and often is manipulated.

The "system" has impoverished the people, the circulation between the two tanks has been reduced to a trickle, and our economists have convinced the government that the only way to get things flowing again is to pour more water into the upper tank, hoping that the spillover will settle in the lower tank. Better to pray for rain!

This impoverishment has numerous mathematically certain implications; two major ones follow.

First, the system can't be fixed by tinkering with the details. At best, tinkering with the details can merely slow down the depletion of consumer wealth. As long as the system is based on profit, more must be taken than is given. The rate of depletion can be changed, but the depletion cannot be stopped. This conclusion is as mathematically certain as subtraction. Why the geniuses in the American economics community, all who whom taut economics for its use of mathematical models, cannot understand this is a conundrum. They can tinker as much as they like. Some tinkering will produce apparent benefits, some won't. But one thing is certain—the system, unless it is fundamentally and essentially changed—will break down over and over again just as it has at fairly regularly intervals in the past. As long as maintaining the system is more important that the welfare of people, the people have no escape. They are eventually impoverished—both when the system works and when it doesn't! Two thousand years of history has produced not a single counterexample to this conclusion. Prosperity never results from exploitation.

Another implication that few seem to recognize concerns the national debt.

We are told that the burden of paying off the debt will be borne by our progeny, our children, and their children. But unless the Western commercial system undergoes fundamental changes, the children and grand children of most Americans will never have to bear this burden. Why? Not even governments can pick empty pockets. So if the debt is to be paid by raising taxes, the children and grandchildren of that 20 percent of Americans who hold 93 percent of the nation's financial wealth will have to pay them. Most, if not all, of these people are also investors. Given the acrimonious debate about letting the Bush tax cuts for the wealthy expire, the chances of that ever happening are slim to none.

Will the debt then be paid by devaluing the dollar, by printing money? Many believe that the government will eventually take this alternative. Let's say it does. Then all the dollars held by anyone anywhere will be devalued equally, including the dollars held by that same 20 percent of Americans. Again the wealthy 20 percent of Americans, having the most, lose the most. The devalued dollars they collect on their investments are merely added to their other devalued dollars, and the more the dollar must be devalued to repay the debt, the more the wealthy lose.

And finally, will the government default? Most seem to believe this to be unlikely. Perhaps, but isn't it the best alternative? Investors will simply not be paid, but the rest of their money will retain its value unless other economic consequences reduce it. Even Morgan Stanley recognizes that "the sovereign debt crisis won't end till deeply indebted rich country governments give holders of their bonds a good soaking."

So relax, Americans, your children will never bear the burden of paying off the national debt. Just sit back and enjoy watching the wealthy squirm.

Some say that if the nation defaults, the government will be unable to borrow. But other governments have defaulted without losing their ability to borrow. Russia, Argentina, and Zimbabwe are but recent examples. Of course, there are severe economic consequences to defaulting, but there are severe consequences to each of these alternatives too. How much harder can life be for the 80 percent of Americans holding a mere seven percent of the nation's wealth? There are, after all, no degrees of broke; no broke, broker, and brokest.

Will investors refuse to lend? Doubtful. A wealthy person can do four things with money: give it away, spend it, stuff it under the mattress, or invest it. Those are the only alternatives, and it is unlikely that much of it can be spent or that many will have the inclination to give it away or save it. So the wealthy really lack a great deal of choice.

Finally, a hidden principle underlies this extractive system—It is okay for some to enrich themselves by making others poor. Even though this is exactly what thieves do, no one, to my knowledge, has ever pointed out that this principle is immoral. It appears to be accepted universally as economically acceptable. But consider these two similar principles: (1) It is okay for some to improve their health by making others unhealthy, and (2) It okay for some to avoid the consequences of their criminal acts by making others bear them. No one would consider the last of these right, yet all three are logically and materially identical.

Some may claim that without profit, no commercial system can function effectively. If true, the implications for humanity are horrific. It implies that mankind was made in Satin's image, that the Commandments, especially the tenth, are fraudulent, that all the philosophy and literature that defines Western Civilization are nugatory, that no essential distinction exists between so-called civilized and barbaric nations, that all governments are illegitimate, that words like justice and fairness are meaningless, that the law is lawless, that society disintegrates into nociety, and that nothing really matters. The economy is Bedlam, the Earth is the Universe's Insane Asylum, and the craziest are in charge. What kind of human mind would ever attempt to defend this abomination?

This Western commercial system exists merely to enrich vendors by exploiting consumers. When governments institutionalize this system, they place their nations on suicidal paths. Astute observers of history have long recognized what Thomas Jefferson made explicit—"Merchants have no country." Oh, yes! These merchants will object vehemently. Pay no attention. Just watch what they do.

They expect favorable treatment and services from governments but do everything possible to keep from paying for them in taxes and exhibit no concern whenever their native lands face bankruptcy. When their native lands face stress, as in times of war, the people are called upon to sacrifice while the merchants are allowed to profiteer. When John F. Kennedy said, "Ask not what your country can do for you, but ask what you can do for your country," he was not speaking to corporate America. Does any reader of this piece really believe that the makers of Humvees, drones, and F16s would ever consider supplying them to our military at cost? Yet how great is the cost of the sacrifice parents are asked to make by sending their children off to fight hideous wars?

People, a merchant unwilling to sacrifice for his country has no country, he will support no country, defend no country, and if such people are given control of a nation, they will suck its blood dry and sell off the body parts to the highest bidder. Not even a recognizable corpse will remain. It is not terrorism that threatens the security of the Western World, it is the Western World's commercial system.

John Kozy is a retired professor of philosophy and logic who writes on social, political, and economic issues. After serving in the U.S. Army during the Korean War, he spent 20 years as a university professor and another 20 years working as a writer. He has published a textbook in formal logic commercially, in academic journals and a small number of commercial magazines, and has written a number of guest editorials for newspapers. His on-line pieces can be found on and he can be emailed from that site's homepage

Peter Schiff Stocks Plummet as Market Wakes Up to Real Economic Crisis

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Will the Dollar Rebound Before Being Dissolved Into Global Currency?

Eric Blair

Every time the dollar begins to decline, I wonder, "Is this it, is this the end to the fiat dollar?" The fundamentals suggest that it should be finished, but just as the world is about to declare it dead, miraculously a global storyline seems to emerge just when needed and foreign investors rush back in for "safety." A clear example was the steady drumbeat of a sovereign-foreign-debt war that resulted in reports of whether the Euro would even survive, while the dollar enjoyed a triumphant ride up victory mountain.

Since the "world" declared the Euro debt crisis saved, the focus has shifted to exposing America's deficit problems, which has led to the dollar collapsing to its 5-month low against the Euro. There seems to be a growing realization by foreign countries that a volatile dollar as the world's reserve currency is unhealthy for their nations and the global economy as a whole -- especially as it pertains to vital commodities like oil and food. This increased awareness is causing foreign governments to invest more in other currencies, gold, and even vast stretches of agricultural land -- while beginning to advocate for a more stable global reserve currency.

Some are defining this volatility as all out "international currency wars." The Telegraph reported on Brazil's fears of a currency war:
Brazil's finance minister Guido Mantega has complained repeatedly over the past month that his country is facing a 'currency war' as funds flood the local bond market to take advantage of yields of 11pc, vastly higher than anything on offer in the West.
'We're in the midst of an international currency war. This threatens us because it takes away our competitiveness. Advanced countries are seeking to devalue their currencies,' he said, pointing the finger at America, Europe and Japan. He is mulling moves to tax short-term debt investments.
There seems to be little hope for the dollar rebounding as the Fed's quantitative easing not only continues, but must increase dramatically to make up ground from lost investors and higher deficits. Can anything reverse the trend and boost the dollar once again? Perhaps the powers-that-be don't want the dollar to re-strengthen, as indicated by Stephen Lewis from Monument Securities in the Telegraph article, where he said: "The Fed is playing a risky game toying with more QE. There are already signs of investor flight into commodities. The danger is a repeat of the spike in 2008, which was a contributory cause of the Great Recession. Further QE at this point may prove self-defeating."

If history is any indicator, the only thing that may temporarily strengthen the dollar is another manufactured disaster, or global uncertainty, which may entice investors back to U.S. Treasury bonds because they're still widely considered the "safe haven" investment during a crisis. The U.S. is still viewed as the world super power and most innovative economy despite its current economic woes and insurmountable debts. Therefore, during times of international crisis or collective doubt, the big institution investors tend to flock to the dollar, apparently under the assumption that America is best equipped to weather global storms.

Recent news that Ireland's sovereign debt needs a $40 billion bailout, along with the renewed austerity protests around Europe, or perhaps a major gold scandal may begin to reverse the dollar's decline once again. However, the severely debased dollar is unlikely to rebound to previous highs given the international awareness of America's financial problems. Understanding that the goal of the global elite is to move toward a global currency, ultimately they must kill the dollar and other major currencies.

When the world has suffered enough pain from maintaining the volatile dollar as the reserve currency, they will demand, if not beg, for something more stable. The IMF is pushing to implement the Bancor, which has been introduced as the currency name for the basket of currencies called Special Drawing Rights (SDR). In America, when the dollar reaches near worthless levels, the desperate public will likely grasp at any solution. Much like during Katrina when the newly homeless were given ATM cards by the government, we may see the IMF roll out Bancor ATM cards. This will accomplish two goals of the agenda at once: a global currency that is cashless. But maybe not before one more good crisis.

Welcome to the Gold Mania

Jeff Clark
Senior Editor
Casey's Gold & Resource Report

With gold punching the $1,300 mark, thoughts of what a gold mania will be like crossed my mind. If we're right about the future of precious metals, a gold rush of historic proportions lies ahead of us. Have you thought about how a mania might affect you? Not like this, you haven't…

You log on to your brokerage account for the third time that day and see your precious metal portfolio has doubled from last week. Gold and silver stocks have been screaming upward for weeks. Everyone around you is panicking from runaway inflation and desperate to get their hands on any form of gold or silver. It's exhilarating and frightening in the same breath. Welcome to the mania.

Daily gains of 20% in gold and silver producers become common, even expected. Valuations have been thrown out the window – this is no time for models and charts and analysis. It's not greed; it's survival. Get what you can, while you can. Investors clamor to buy any stock with the word “gold” in its title. Fear of being left behind is palpable.

The shares of junior exploration companies have gone ballistic. They double and triple in days, then double and triple again. Many have already risen ten-fold. You have several up 10,000%. No end is in sight. Your portfolio swells bigger every day. Your life is changing right in front of you at warp speed.

Every business program touts the latest hot gold or silver stock. It's all they can talk about. Headlines blare anything about precious metals, no matter how trivial. Weekly news magazines and talk-radio hosts dispense free stock picks. CNBC and Bloomberg battle to be first with the latest news. Each tick in the price of gold and silver flashes on screen, and interruptions offering the latest prediction seem to happen every fifteen minutes. Breathy reporters yell above the noise on the trade floor about insane volume, and computers that can't keep up. Entire programs are devoted to predicting the next winner. You watch to see if some of your stocks are named. You can't help it.

The only thing growing faster than your portfolio is the number of new “gold experts.” It’s a bull market in bull.

You can feel the crazed mass psychology all around you. Your co-workers know you bought gold some time ago and pepper you with questions seemingly every hour, interrupting your work. They ask if you heard about the latest pick from Fox Business. They want to know where you buy gold, who has the best price, and, by the way, how do I know if my gold is real? They all look at you differently now. Women smile at you in the hallway. You worry someone may follow you home.

Your relatives once teased you but now hound you with questions at family get-togethers – what stocks do you own? What's that gold newsletter telling you? Where can I keep my bullion? You don't want to be the life of the party, but they force it – it's all anyone wants to talk about. Your brother tells you he dumped his broker and is trading full-time. Another relative shoves his account statement in front of you and wants advice. You sense someone will ask for a loan. You don't know what to tell people. The attention is discomforting, and you feel the urge to escape.

At first it was exciting, then breathtaking. Now it's scary. You're drowning in obscene profits but are becoming increasingly anxious about how long it can last. Worry replaces excitement. You don't know if you should sell or hold on. Nobody knows what to do. But the next day, your portfolio screams higher and you feel overwhelmed once again.

You grab the local paper and read the town's bullion shop had a break-in last night. They hired a security company and have posted several guards outside and inside the store. Premiums have skyrocketed, but lines still form every day. The proprietor hands out tickets when locals arrive: your number will be called when it's your turn… the wait will be long… please have your order ready… yesterday we ran out of stock at 11am.

You begin to worry about the security of your own stash of bullion – those clever hiding spots don't feel quite as secure as you first thought they'd be. Is the bank safe deposit box really secure? Shouldn't they hire a security guard? Should I move some of it elsewhere? Is there anywhere truly safe? You find yourself checking gun prices online.

And it's all happening because the dollar is crashing and inflation has scourged every part of life. You curse at those who said this couldn't happen and mock past assurances from government. Cash is a hot potato, and spending it before it loses more purchasing power is a daily priority. Everyone is clamoring to get something that can't lose value, but mostly gold and silver.

Your wife calls and says the $100 you gave her that morning isn't enough to buy groceries for dinner. Prices change often on everything. She urges you to get some bread and milk before the stores raises the price again. You suddenly remember you're low on gas and make plans to leave work early to beat others to the filling station. Restaurants and small businesses post prices on a chalkboard and update them throughout the day. Employers scramble to work out an "inflation adjustment" for salaries.

On your way home, the radio broadcaster reports the government has convened an emergency summit of all heads of state. They're working urgently on the problem, and all other agendas have been tabled. Outside experts have been called in. We're going to solve this rampant flood of inflation for the American people, they say. In your gut you know there's nothing they can do.

You change the channel and hear about the spike in arrests of U.S. citizens at the Canadian border. Scads of people are caught trying to sneak bullion and stock certificates out of the country – from airports to rail stations. Violence at borders has escalated, and stories of bloodshed are getting common. The White House ordered heightened security at all U.S. borders, with the media reporting it can take days to cross. Foreign governments offer meaningless help, others mock U.S. leaders for their shortsightedness. Their countries are suffering, too.

You think about the gains in your portfolio and wince at the taxes you'll pay when you sell. Nothing has been indexed to inflation, so everyone has been pushed into higher tax brackets. Citizens are furious with government. Agencies have been swarmed with bitter taxpayers and revolting benefit recipients. One government office was set on fire. A riot erupted in Washington, D.C. last week and martial law was temporarily declared. It's too dangerous to travel anywhere.

As crazy as things are, it's hard not to smile. You're in the middle of a mania. Your life has changed permanently. You're part of the new rich. You can quit work, live off your investments. Your wife is ecstatic, and you both feel as if it’s your second honeymoon. Your kids are amazed and gaze at you with the same awe they did when they were children.

You're thankful you bought gold and silver before the mania, along with precious metal stocks. You daydream of where you might go, what you might buy. New options open up daily. You realize you'll need to meet with your accountant, maybe hire a second one to protect your sudden wealth. You wonder what you'll invest in next. You ponder what charities are worthwhile. Better meet with the attorney to redraft the will.

As night settles and your house quiets, you log on to your brokerage account one last time. Even though you're ready for it, your mouth drops when you see your account balance. It is truly overwhelming. You think of others who own gold and silver stocks and wonder if any have sold yet. Has Doug Casey exited?

You stare at the blinking screen, hand on the mouse, the cursor hovering on the sell button…

[We can't promise the gold mania will be exactly like Jeff outlines, but we're convinced one is coming for all things gold and silver. And to be prepared for the coming events, you’d do well to listen to those experts who have predicted the quagmire the financial system now finds itself in long before it happened. An all-star cast including John Hathaway of Tocqueville Gold Fund fame… Eric Sprott, Sprott Asset Management… Richard Russell of the Dow Theory Letters… and many more.

All those experts will gather at Casey’s Gold & Resource Summit from Oct. 1 to 3. But even though the summit is sold out, you can still hear every presentation and stock recommendation… on more than 17 hours of audio on CD. If you order now, you’ll save $100 off the retail price. Details here.]

DHS Aims to Establish Police State Through Terror Watchlists and Mobile Body Scanners

DHS is currently tracking and discriminating against thousands of activists. Foreign companies have actually been hired to spy on Americans throughout Pennsylvania. Janet Napolitano is attempting to push a hundred different nations into a non binding agreement to install body scanners in their airports. As more and more of our civil liberties are tramped upon, what is left of our nation will become a total police state.

It is only going to get worse. Starting November 1st, new rules will be put in place by TSA under operation “Secure Flight.”

The plan will essentially cross check 100% of passengers against terror watchlists. On first glance, a new program to check all passengers for ties to terrorism might seem like a good thing. The problem is, real terrorists have consistently gotten past these checkpoints and some have even been let through by intelligence agents.

On the other hand, activists throughout the United States have been detained and interrogated by thug TSA agents. Terrorists such as the Christmas Day Bomber have made it past security while 6 year old girls have been detained as terrorists.

The Secure Flight Program, Saving Us From “Terrorists”

Recently the San Fransisco Chronicle reported on one of these illegal detentions. This time it was two anti war activists whose names happened to be on the no fly list. Their detainment/harassment eventually caused them to miss their plane.

The San Fransisco ChronicleNo-fly blacklist snares political activists

A federal “No Fly” list, intended to keep terrorists from boarding planes, is snaring peace activists at San Francisco International and other U. S. airports, triggering complaints that civil liberties are being trampled.

And while several federal agencies acknowledge that they contribute names to the congressionally mandated list, none of them, when contacted by The Chronicle, could or would say which agency is responsible for managing the list.

One detainment forced a group of 20 Wisconsin anti-war activists to miss their flight, delaying their trip to meet with congressional representatives by a day. That case and others are raising questions about the criteria federal authorities use to place people on the list — and whether people who exercise their constitutional right to dissent are being lumped together with terrorists.

Mission Creep: TSA to Implement “Secure Flight” On November 1

Secretary Napolitano Announces Major Aviation Security Milestone June 2010

Activists Demand Investigation into DHS Bulletin, Long History of Labeling Americans as Terrorists

This attack on the Constitution doesn’t stop at your local airport. As Paul Joseph Watson documented in his article, “Feds Radiating Americans At Internal Checkpoints.” authorities in the Atlanta area are using full body mobile scanners in a move that is sure to radiate the public.

In late August, Forbes reported on these mobile cancer machines:

American Science & Engineering, a company based in Billerica, Massachusetts, has sold U.S. and foreign government agencies more than 500 backscatter x-ray scanners mounted in vans that can be driven past neighboring vehicles to see their contents, Joe Reiss, a vice president of marketing at the company told me in an interview. While the biggest buyer of AS&E’s machines over the last seven years has been the Department of Defense operations in Afghanistan and Iraq, Reiss says law enforcement agencies have also deployed the vans to search for vehicle-based bombs in the U.S. Forbes

These vans will soon be on the streets of every major American City, restricting our freedoms and tracking our every move. As technology continues to advance so will the police state. Movies like Minority Report will become reality as the scientific dictatorship moves in for the kill.

GOLDman Sachs fat fingers

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Millions of Computers Hit by Virus Across China

Jakarta Globe

Bejing. A computer virus dubbed the world’s “first cyber superweapon” and which may have been designed to attack Iran’s nuclear facilities has found a new target — China.

The Stuxnet computer worm has wreaked havoc in China, infecting millions of computers around the country, state media reported this week.

Stuxnet is feared by experts around the globe as it can break into computers that control machinery at the heart of industry, allowing an attacker to assume control of critical systems like pumps, motors, alarms and valves.

It could, technically, make factory boilers explode, destroy gas pipelines or even cause a nuclear plant to malfunction.

The virus targets control systems made by German industrial giant Siemens that are commonly used to manage water supplies, oil rigs, power plants and other industrial facilities.

“This malware is specially designed to sabotage plants and damage industrial systems, instead of stealing personal data,” an engineer at antivirus service provider Rising International Software said.

Large demonstrations bring the General Strike to an end

Union leaders addressed the crowd in Madrid, while rallies were seen in all other cities

The day of Spain’s General Strike ended with large rallies in both Madrid and Barcelona.

In Barcelona the day had been marked by events from anti-system demonstrators who broke into and wrecked one of the most famous bookstores in the city, and engaged with running battles with police in the street.

Unions claim that 400,000 took part in the protest march in Barcelona at the end of the day, and several thousand shouted against the labour reform at a demonstration in Valencia. Other smaller demonstrations and marches were held in other cities across the country.

The expected war on words, or in this case numbers, has broken out over the numbers taking part in the main protest in Madrid. The unions claimed that it was half a million, but the Lynce counting system for the EFE news agency put it at 17,228. They took 850 photographs of the march using high resolution cameras to arrive at the number.

The two main union leaders, Ignacio Fernández Toxo and Cándido Méndez, insisted at the rally that the Government change its policies, with their speeches bringing the day’s events to an end. They called for the Government to ‘not commit suicide’ and return to left wing policies to fight the recession. Toxo insisted the that ball was now in the Government’s court. There were many placards calling for the Prime Minister’s resignation, something which the union leaders have never called for.

In summary, the day was ‘successful’ for the unions, and ‘uneven’ for the Government. It can be said that the seventh General Strike since Spain’s turn to democracy did achieve the shutdown of industry, but often only through the efforts of pickets, transport services were seriously disrupted, but the service sector was practically untouched.

Minister for Employment, Celestino Corbacho, declined to give numbers regarding those who joined the strike, but chose instead to praise the unions for their ‘responsibility’ in meeting minimum services. He described the incidents seen as those which could be expected during a General Strike.

Read more:

US Government 'hiding true amount of debt'

THE actual figure of the US' national debt is much higher than the official sum of $US13.4 trillion ($14.3 trillion) given by the Congressional Budget Office, according to analysts cited by the New York Post.

"The Government is lying about the amount of debt. It is engaging in Enron accounting," said Laurence Kotlikoff, an economist at Boston University and co-author of The Coming Generational Storm: What You Need to Know about America's Economic Future.

"The problem is we're seeing an explosion in spending," added Andrew Moylan, director of government affairs for the National Taxpayers Union.

In 1980, the debt - the accumulated red ink incurred by the Federal Government - was $US909 billion.

This represented some 33 per cent of gross domestic product, according to the Congressional Budget Office (CBO).

Thirty years later, based on this year's second-quarter numbers, the CBO said the debt was $US13.4 trillion, or 92 per cent of GDP.

The CBO estimates the debt will be at $US16.5 trillion in two years, or 100.6 per cent of GDP.

But these numbers are incomplete.

They do not count off-budget obligations such as required spending for Social Security and Medicare, whose programs represent a balloon payment for the Government as more Americans retire and collect benefits.

In the case of Social Security, beginning in 2016, the US Government will be paying out more than it is collecting in taxes.

Without basic measures - such as payment cuts or higher payroll taxes - the system could be on the road to bankruptcy, according to officials.

"Without changes," wrote Social Security Commissioner Michael Astrue, "by 2037 the Social Security Trust Fund will be exhausted. There will be enough money only to pay about $US0.76 for each dollar of benefits."

Mr Kotlikoff and Mr Moylan agree US national debt is much more than the official $US13.4 trillion number, but they disagree over how to add up the exact number.

Mr Kotlikoff says the debt is actually $US200 trillion.

Mr Moylan says the number is likely about $US60 trillion.

That is close to the figure quoted by David Walker, the US Comptroller General from 1998 to 2008.

He launched a campaign to convince Americans that the federal spending and debt is a greater threat than terrorism.

But whichever figure is accurate, all three agree that the problem has worsened in the last few years.

They say it is because Congress and the Administration, whether Republican or Democrat, consistently overspend.

Outsourcing safety: Airplane repairs move to unregulated foreign shops

In 1991, a mechanic at a Turkish repair shop overhauled an engine on a U.S. passenger jet and missed a crack in the engine.

Four years later, on a June afternoon, the 57 passengers on ValuJet Flight 597 heard a loud bang as the plane bolted down a runway in Atlanta. Shrapnel from the busted engine ripped through a fuel line. The engine and cabin caught on fire. One crew member suffered serious puncture wounds from the shrapnel, and another crew member and five passengers suffered minor injuries.

A National Transportation Safety Board investigation of the ValuJet accident concluded that if the Turkish repair station had required the same rigorous record-keeping as U.S. airplane maintenance facilities, the crack probably would have been discovered and the engine part replaced.

Last year, US Airways Flight 518, traveling from Omaha to Phoenix, had to be diverted to Denver because the pressure seal on the main cabin was leaking. A mechanic at the Aeroman repair shop in El Salvador had put a part of the plane's door on backward, according to a National Public Radio report.

Lawmakers and aviation safety experts are raising new concerns about the outsourcing of plane repairs, especially to shops in other countries that are less closely supervised than domestic shops.

More maintenance has moved overseas. Airlines are not required to use regulated repair shops. Foreign repair stations can go five years between inspections, and even then are often tipped off that inspectors are coming. Manuals are in English, but not all the workers read English. Drug tests of workers are illegal in some countries.

A News21 analysis of Federal Aviation Administration data showed that about 15,000 accidents or safety incidents in all aviation travel can be attributed at least in part to inferior maintenance or repairs since 1973, when the FAA started keeping such records. In these accidents at least 2,500 people died and 4,200 were injured. (News21, a college journalism coalition, worked with the Center for Public Integrity, a nonprofit investigative journalism organization in its investigation. Many of their stories are being published this week by You can read the full series at News21.)

The analysis shows that at least 253 of those accidents involved commercial or chartered passenger planes and harmed people onboard. On those passenger flights, nearly 800 people died and more than 850 were injured.

FAA not following many safety guidelines
Thousands of mechanics from all over the world work on U.S. commercial airplanes. Foreign repair stations are located in Canada, Mexico, Central America and Asia. Domestically, airplanes are repaired at large facilities in Mobile, Ala., Greensboro, N.C., and Everett, Wash., among many others.

Faulty maintenance, regardless of where the work is done, is the No. 2 cause of airplane accidents and safety incidents, second to pilot error and other operational errors, according to data compiled by the FAA.

When an airplane crashes or has a close call, it is the job of the NTSB to come up with ways to make the industry safer for passengers. But it's up to the FAA whether or not to turn those recommendations into rules for the industry.

The FAA has failed to follow at least 37 of the NTSB's 340 safety recommendations concerning airplane maintenance since 1967. Those safety suggestions include requirements for special training on complex aircraft parts and more frequent inspections of some critical parts.

By 2001, safety regulators had come up with new rules that hold foreign repair stations to the same standards as domestic repair shops for filling out paperwork and keeping records.

Safety advocates want FAA inspectors to make more frequent visits to foreign repair stations to check the quality of work. They want measures to reduce drug and alcohol use at those far-off facilities. And they want the FAA to get a better handle on the growing number of repair shops in the U.S. and overseas that operate without FAA certification or inspections.

The FAA has not "prioritized looking at the issue, and I don't think the American flying public realizes to what extent maintenance has been outsourced in an effort to cut costs," Sen. Claire McCaskill, D-Mo., an advocate of cracking down on foreign repair stations, said while questioning members of the aviation industry during a 2009 Senate hearing.

Saving money
A couple of decades ago, U.S. airlines repaired and serviced their own airplanes in the U.S. But by the late 1980s, when labor costs rose and rules about foreign airplane repairs relaxed, airlines began outsourcing maintenance to less expensive repair shops. In 2003, airlines outsourced 34 percent of heavy maintenance, which includes taking an airplane apart and putting it back together, a process that can take weeks. That share rose to 71 percent by 2007, according to an inspector general's report in 2008.

And more of that outsourced work has gone to foreign repair stations, said John Goglia, a former NTSB board member who now works as a transportation safety consultant. In 2003, 21 percent of the outsourced heavy maintenance work was done by foreign shops; that rose to 27 percent by 2007, according to the same report.

Those numbers could be even higher because the FAA requires airlines to divulge only the top 10 stations they use most often for major repairs, according to the report.

Many airlines in America have faced financial distress over the past decade, and some have gone bankrupt. Goglia said airlines face pressures to outsource to maintenance facilities with the lowest prices, and that could mean planes are receiving lower quality repairs.

"The airlines will make a switch to another vendor for seemingly minor differences in price," Goglia said. "That does lead to considerable amounts of pressure on any vendor providing services to an airline."

Non-certified shops
The number of outsourced airplane repairs is no doubt much larger than the FAA numbers indicate. That's because they only account for repairs done at certified shops.

The FAA certifies more than 4,100 maintenance facilities in this country and more than 700 abroad to work on U.S. aircraft. But the FAA doesn't require airlines to use those shops. Airlines can go to non-certified repair stations that are inspected only by the airlines that use them — not the FAA. The mechanics there must follow the airline's manuals and guidelines.

"Why do we have certified repair stations if people aren't required to use them?" McCaskill said.

In 2007, the Department of Transportation sampled 19 airlines and found that all of them were outsourcing to non-certified facilities. In its report, the DOT's inspector general identified more than 1,400 non-certified shops performing maintenance for those aircraft, 100 of which were foreign stations in countries such as Aruba, Belize, Bermuda, Haiti and Mexico.

Sometimes repairs are as simple as boxing up a cockpit screen and sending it off to a television repair shop. Other times they're as complex as sending landing gears parts to a shop in Mexico for chrome plating.

When airlines outsource to countries where the rules are more lax, "you're increasing the risk a little bit," Goglia said. "Risk is like a ladder. If you raise the risk and go up the ladder, the danger of falling gets greater and greater."

The FAA would not agree to interviews on airline maintenance and repairs but said in a prepared statement that it closely regulates and monitors repair stations, both domestic and foreign, and that airlines and contractors are required to comply with federal regulations.

Double standards
The FAA makes an attempt to monitor work done at foreign stations, but its oversight consists primarily of once-a-year inspections. And the stations typically are notified in advance when the inspection will take place.

In the U.S., however, repair shops are inspected every month or so by the FAA, and those visits often are

Why does Germany still owe money for the first world war?

In a few days Germany will pay its final reparations to the Allies for the first world war, 92 years after it finished

A tank is dismantled in Berlin, 1919. A tank is dismantled in Berlin, 1919. Photograph: Hulton Archive/Getty Images

According to Bild magazine, the first world war will finally end this weekend when Germany pays off the last instalment of the interest it owes on loans it took out in the 1930s to pay £22bn in reparations to the allied powers. The sum would, of course, have been paid off much earlier were it not for Adolf Hitler, who exploited public resentment at the economic crisis caused by said reparations to a) refuse to pay them, and b) kick off a whole other war – leading to a whole other load of reparations. But news that Germany was still paying reparations from 1919 in 2010 does rather prompt the question: what for?

The idea isn't new, of course: Rome exacted punitive indemnities from Carthage after the Punic wars in the second century BC. But there has long been a feeling that the practice might be unfair: the people who end up paying are rarely those responsible. There are few more eloquent examples of the injustice of reparations than Haiti, which has never recovered from having to compensate France for the loss of slaves and property after independence in 1804. At one stage this absorbed 80% of Haiti's budget, and the interest on the foreign loans Haiti took out to meet the bill was not paid off until 1947, by which time its economy was pretty much shot.

Mainly, though, it's now understood that bankrupting a beaten country won't necessarily achieve the desired result. Partly in recognition of this, Germany's second world war reparations were exacted, in theory at least, in machinery, movable goods and know-how rather than money, and shared economic development was prioritised over punishment.

In a further advance, the UN Compensation Commission, set up after the Gulf war, decreed that Iraq's reparations for the invasion of Kuwait should not be expressed in a cash sum but limited to 30% of its revenues under the oil-for-food programme, with concrete claims from actual people prioritised over abstract ones from governments and companies.

That's sensible, because otherwise reparations can get out of hand: in 2007, a disgruntled American founded the International Coalition for British Reparations, demanding £31tn from Britain as "the greatest criminal nation on earth . . . responsible for such atrocities as genocide, the industrial revolution and global misrule (but particulary in the Middle East), as well as atrocious inventions such as machine guns, slums, child labour and concentration camps," from the time of the Crusades to the second Iraq war.

Europe rallies to stop workers' pay assault

Union-led rallies in defence of working peoples' hard-won rights and against pay freezes rocked cities the length and breadth of Europe on Wednesday.

The popular ETUC-led protests in countries including Greece, Portugal, Slovenia, Poland, Italy, Serbia and Ireland complemented a massive protest in Brussels.

In Northern Ireland the Irish Congress of Trade Unions, its affiliates and local trades councils led rallies in Belfast and Derry as part of the EU-wide Day of Action against austerity and cuts.

Over 5,000 people gathered outside Belfast City Hall and Derry Guildhall to express their opposition to the regressive austerity measures and cuts expected to be announced by Britain's Tory chancellor on October 20.

ICTU assistant general secretary Peter Bunting told the rally that it is a "myth that government debt has never been higher.

"It was more than three times higher after the second world war and that generation built the National Health Service and the modern welfare state," Mr Bunting stormed.

He said that politicians and pundits who are clamouring for swift, deep cuts to reduce government deficits are trying to perpetrate a "cruel hoax" on working people and the vulnerable.

In Greece public hospital and transport workers walked out, disrupting travel in the country, while in Slovenia public-service unions are continuing a strike that started on Monday after the government froze workers' wages for two years.

In Poland, thousands of workers defied a torrential downpour to march through central Warsaw against government plans to freeze wages.

5 Outright Illegal Scams That Should Put Wall St. Bankers Behind Bars

From laundering drug money to gouging you on overdrafts, here are five scams where Wall Street ran afoul of the law.

Unchecked greed and financial insanity on Wall Street crashed our economy. Much of that insanity was legal -- bankers lobbied hard for weak regulations, and got what they paid for. But much of that craziness was outright illegal, and in recent months, a number of shocking scams have come to light that could result in huge fines for banks or even put bankers behind bars. Though Wall Street has yet to see serious prosecutions for the current calamity, prosecutions are not at all uncommon after financial crises -- more than 1,000 bankers went to prison after the savings and loan debacle alone.

From laundering drug money to scamming you on overdrafts, here are five recent Wall Street scandals that have "illegal" written all over them. The SEC is attempting to settle civil fraud charges it has filed in many of these cases, but in finance, the only difference between civil fraud and criminal fraud is the burden of proof. If the Justice Department wanted to go after many of these crooked dealers, it could.

1) Wachovia Launders $380 Billion in Drug Money

The financial crisis is full of complex schemes and indecipherable acronyms, but the most astonishing alleged fraud of the entire mess is pretty straightforward: Wachovia allowed Mexican drug cartels to launder $380 billion of drug money through its bank, repeatedly looking the other way and ignoring internal whistleblowers who alerted them to the problem.

This was a clear violation of federal law, but Wachovia appears to be getting away with it. The Justice Department is not seeking an indictment against the company, out of fears that it could destabilize financial markets. Instead, it's reached a "deferred prosecution agreement" -- effectively a settlement -- in which the bank agrees to pay $160 million and promise to never, ever launder drug money again.

Pretty light penalty for, you know, laundering drug money. The fine amounts to about one-half of one-hundredth of a percent of the drug money that DOJ says passed through the bank. Outside the too-big-to-fail world, getting caught laundering billions of dollars in drug money doesn't just earn you hefty fines, it plants you in jail.

And Wachovia wasn't alone. According to the U.N., laundering drug money was common during the darkest days of the financial crisis, as faltering banks sought to get their hands on any money they could find -- regardless of where it came from.

2) Chamber of Commerce Launders AIG's Lobbying Cash

Money laundering has been very profitable for Wall Street, and not just drug money. The U.S. Chamber of Commerce is a lobbying front-group for a lot of powerful corporations, and some of its most aggressive members are Wall Street titans. A watchdog group has filed a complaint with the Internal Revenue Service accusing the Chamber and notorious AIG kingpin Maurice "Hank" Greenberg of tax fraud. Greenberg was ousted from AIG in 2005 amid a massive accounting scandal, but not before helping to establish the insurance giant's ridiculous credit default swap wing, which would destroy the company only a few years later.

Bank Of America Debt Collectors Called Borrowers "F___ing N__ger" And "Punk" To Get Them To Pick Up The Phone

Bank of America has been busted using some seriously outrageous tactics to try to collect debts so small they're barely worth the paper they're written on.

It wasn't until ABC News ambushed BOFA CEO Brian Moynihan Michael-Moore style outside his office that the firm finally responded by firing its debt-collection firm.

via Yves Smith, who has more >

Bank of America Collection Agency Harrassed Borrowers With Racist, Obscene Calls

Tom Adams pointed out a story on ABC about the sleazy strong arming tactics used by a debt collection agency engaged by Bank of America debt collection agency called ACT Technologies. I imagine we are going to hear more and more about this sort of thing, not simply because high unemployment rates mean more people getting into credit trouble (yes, banks reported a fall off in new delinquencies, but a robin does not mean a spring. In addition, banks are also getting more aggressive on other fronts. For instance, banks would get a deficiency judgment when a foreclosure sale failed to recover the mortgage balance plus other charges. They would seldom pursue it, since people who lose their homes are under financial stress and you can’t get blood from a turnip. Since discussions of strategic defaults are now common, banks now appear to believe they are widespread, when the studies that have touted that idea are simply not reliable (I’m regularly called in to evaluate possible corporate investments, and my work often includes assessing consultant and academic research). So expect more debt collectors to be called in to pursue people who have lost their homes, even when there is nothing more to get.

The Bank of America case is particularly striking since the collection agency violated the Fair Debt Collection Practices Act. Bank of America continued to use the agency after a $1.5 million judgment against the collection agency, which also included Bank of America, and ABC News sent copies of abusive phone calls. It was only after they ambushed the CEO, Michael Moore style, to discuss the problem that the bank dismissed the firm.

You can also view the video here.

As Tom noted:

While the circumstances are quite different, they remind me of the way the banks ran the mortgage and CDO deals during the bubble days. They know what they are doing is wrong, but they also know it works. If they bully people, they can get what they want and the odds are very low they’ll suffer in any meaningful way. This time, BofA got caught, so they fired the agency and they move on, otherwise unaffected.

Thousands rally in opposition to austerity

EUROPEAN DAY OF PROTEST: DEMONSTRATORS MARCHED through Brussels in their tens of thousands as trade unionists throughout Europe staged protests against the austerity measures being planned across the continent.

Traffic in parts of central Brussels came to a standstill as marchers, many of them carrying union flags and banners, made their way from one of the city’s main train stations to the headquarters of the EU Commission and the European Council.

The European Trade Union Confederation (ETUC), which organised the march and similar protests in more than a dozen other cities, said “more than 100,000” workers answered its call to demand growth-oriented policies from European governments.

While Belgian police said the attendance was more like 56,000, ETUC general secretary John Monks claimed a success. “Workers are on the streets today with a clear message to Europe’s leaders: there is still time not to choose austerity, still time to change direction,” he told the rally.

“Austerity measures are still in the decision-making stage but their implementation will have a disastrous impact on individuals and on the economy once the effects start being felt, which could be as early as this winter. We realise that governments have deficits that have to be absorbed but we ask them to take their time to pay their debts.”

European trade union leaders called the Brussels protest, at which some 218 people were arrested for minor offences, as a gesture of solidarity with their Spanish counterparts, who staged a general strike.

As well as in Dublin, there were demonstrations of varying scale in Lisbon, Rome, Riga, Warsaw, Nicosia, Bucharest, Prague, Paris, Athens and Belgrade.

A heavy security presence was visible at the Brussels march, with razor wire erected around city’s European quarter

The march was led by a group of black-suited protesters with blackened faces, symbolising stock market speculators in a mock funeral cortege for Europe. Protesters blew whistles and vuvuzelas and held placards bearing the slogans: “No to Austerity” and “Priority for Jobs and Growth”.

An ETUC delegation later met Belgian prime minister Yves Leterme, whose country holds the EU’s rotating presidency, and European Commission chief José Manuel Barroso.

Mr Barroso said the European authorities understood the “social knock-on effect” of austerity but said political leaders saw no other way through the economic crisis, which is the worst since the 1930s.

Echoing a wave of general strikes in Greece as the country came close to bankruptcy, large numbers of public transport workers walked off the job and closed metro and tram systems in Athens. Rail workers also went out on strike.

Protesters in Warsaw, including miners and shipyard workers, marched to prime minister Donald Tusk’s office chanting: “No to budget cuts!” and “Yes to job protection and economic growth!” About half of public sector staff in Slovenia were on strike for a third day against a planned wage freeze.