A small town in central Italy is trying to go independent and mint its own money in protest at government austerity cuts.
Filettino, set in rugged hill country around 100 km (65 miles) east of Rome, is rebelling against a proposal to merge the governments of towns with fewer than 1,000 inhabitants to save money.
Filettino has only around 550 people, but instead of merging with neighboring Trevi, mayor Luca Sellari is trying to go it alone and set up a "principality" along the lines of the famous republic of San Marino to the north.
He has started minting Filettino's own bank currency, the "Fiorito," with his photo on the back, which he says is already being used by the townsfolk.
"We aim to achieve real autonomy from Italy and we have the financial resources to do it," Sellari said in an interview on the town's website www.principatodifilettino.com
There was no immediate comment from the central government in Rome.
Mayors from all over Italy are up in arms about proposals to cut local government funding and merge small towns as part of a 45.5 billion euro ($65.3 billion) austerity plan to balance the country's budget by 2013...
Full story:
http://www.cnbc.com/id/44322945/
Wednesday, August 31, 2011
U.S. Bancorp sues Bank of America over bad Countrywide mortgages.
The Associated Press
NEW YORK - The lawsuits against Bank of America are piling up.
The latest comes from U.S. Bancorp, which wants Bank of America Corp. to repurchase poorly written mortgages sold by Countrywide Financial in 2005.
Bank of America bought Countrywide Financial Corp. in 2008.
The lawsuit, which was filed in New York on Monday, claims Countrywide sold U.S. Bancorp a pool of more than 4,000 loans originally valued at $1.75 billion. U.S. Bancorp claims Countrywide ignored its own mortgage underwriting guidelines when issuing those loans.
According to the complaint, Countrywide agreed to repurchase loans within 90 days if any of the statements made in the loan contract wound up being untrue. Those statements included an assertion that the loans complied with the bank's underwriting guidelines.
U.S. Bancorp says Countrywide's loans began to "become delinquent and default at a startling rate," soon after it sold the loans. U.S. Bancorp has asked the court to ask Countrywide to repurchase either just the defective loans or all of the loans in the pool.
The nation's largest bank is facing several other lawsuits. On Aug. 8, American International Group Inc. sued the bank for more than $10 billion, claiming Charlotte-based Bank of America deceived the insurer by selling it faulty mortgage investments.
NEW YORK - The lawsuits against Bank of America are piling up.
The latest comes from U.S. Bancorp, which wants Bank of America Corp. to repurchase poorly written mortgages sold by Countrywide Financial in 2005.
Bank of America bought Countrywide Financial Corp. in 2008.
The lawsuit, which was filed in New York on Monday, claims Countrywide sold U.S. Bancorp a pool of more than 4,000 loans originally valued at $1.75 billion. U.S. Bancorp claims Countrywide ignored its own mortgage underwriting guidelines when issuing those loans.
According to the complaint, Countrywide agreed to repurchase loans within 90 days if any of the statements made in the loan contract wound up being untrue. Those statements included an assertion that the loans complied with the bank's underwriting guidelines.
U.S. Bancorp says Countrywide's loans began to "become delinquent and default at a startling rate," soon after it sold the loans. U.S. Bancorp has asked the court to ask Countrywide to repurchase either just the defective loans or all of the loans in the pool.
The nation's largest bank is facing several other lawsuits. On Aug. 8, American International Group Inc. sued the bank for more than $10 billion, claiming Charlotte-based Bank of America deceived the insurer by selling it faulty mortgage investments.
Larger Drawdown Possible For U.S. Marine Corps
NEW ORLEANS - The national budget crisis could force the U.S. Marine Corps to start cutting the force as soon as next fall, and below the 186,800-troop end strength top officers have pushed to maintain after the war in Afghanistan ends.
Commandant Gen. Jim Amos said the options must be considered as the federal government ponders widespread cuts to the defense budget to help the U.S. reduce its ballooning deficit. For months, the commandant has advocated a gradual drawdown of about 15,000 Marines from the service's 202,000 active-duty end strength, but political and fiscal realities may require the Corps to cut deeper.
"There is pressure to go below the 186,800, I don't want to lie to you," Amos told Marine Corps Times recently during a two-day trip to Marine Corps Forces Reserve headquarters here and Marine Corps Air Station Cherry Point, N.C. "We just don't know what that is going to look like yet and we won't know for months."
Budget pressures ratcheted up after President Barack Obama signed a deal Aug. 2 to reduce the U.S. government's estimated $1.5 trillion budget deficit. That deal, reached after weeks of haggling in Congress, likely means at least $350 billion in cuts to defense spending over the next decade, and potentially up to $1 trillion.
It's not clear how much of that burden the Corps will be forced to shoulder, but the numbers could prime the service for considerable change. It depends on how much of the Corps' $26 billion budget is slashed during the coming year, Amos said.
Earlier this year, recently retired Defense Secretary Robert Gates "blessed" the Corps' force-structure review recommendations, Amos said. He did so on the condition that force reductions not begin until after U.S. combat operations in Afghanistan are complete, likely in 2014.
That was before the deficit deal was reached, however. Amos could be pushed into a corner by budget decisions that will affect the entire military. Marine planners have developed a blueprint that lays out options for a force smaller than 186,800 Marines, and with the drawdown beginning as soon as fiscal 2013 - which begins in October 2012 - to meet fiscal requirements, Amos said.
The commandant declined to say how small the service could eventually be, but sources at Marine Corps headquarters said planners have discussed cuts that could reduce the service by at least 25,000 Marines. That would leave the Corps with fewer than 180,000 troops on active duty. There were about 172,000 Marines on active duty at the time of the 9/11 terrorist attacks, and about 175,000 when the U.S. invaded Iraq in March 2003.
The force-structure recommendations call for one regimental headquarters to be cut, dropping the total to seven. The Corps also will cut its active-duty infantry battalions from 27 to 24, its artillery batteries from nine to seven and its armor companies from 10 to eight, Marine officials said.
Three active and one reserve Marine wing support group headquarters also will be cut, with aviation logistics expertise kept within the Marine air wing staff. Command and control of the Marine wing support squadrons will instead fall under the Marine air group headquarters.
Additionally, Marine logistics groups will be trimmed, with key pieces aligned with Marine expeditionary units and infantry regiments. By being a part of those units, logistics Marines will train with the operational units instead of assigned to them shortly ahead of a deployment.
Marine officials in several commands also have disclosed expected troop reductions. For example, The Basic School at Marine Corps Base Quantico, Va., is planning to see its staff of more than 800 Marines reduced by 27 captains and 103 enlisted billets.
The Corps also has started to build two new one-star Marine expeditionary brigade headquarters, with one falling under Marine Corps Forces Central Command, out of Tampa, Fla., and the other falling under Marine Corps Forces Africa Command, based in Germany.
The manpower will be available for the MEB headquarters as the Corps flattens the command staff at Marine Corps Installations East and West. The two-star MCI commands manage bases, stations and regional strategies for the Corps, and will be streamlined as part of force restructuring. Details on the MCI cuts have not been disclosed.
The Corps also recently adopted a significant change to its top-end service limits for sergeants, from 13 to 10 years. Each Marine will still be guaranteed at least one chance to go before a staff sergeant promotion board, even in the slowest promoting military occupational specialties. However, once a Marine is passed over twice or reaches 10 years of service without being promoted, he will be shown the door either at the end of his current contract or seven months after the release of promotion board results - whichever offers more time.
This change is partly a return to normal following rapid growth during the 202,000 push, Manpower officials said. The service limit for sergeants was 10 years from 1992 to 2001. However, senior leaders also said it is part of developing a new, more competitive environment that will make a drawdown less painful by moving top noncommissioned officers into zone for promotion faster than they otherwise would be, preventing stagnation.
"I would say it's a combination of all things," Barrett said. "I would say that's fair."
Commandant Gen. Jim Amos said the options must be considered as the federal government ponders widespread cuts to the defense budget to help the U.S. reduce its ballooning deficit. For months, the commandant has advocated a gradual drawdown of about 15,000 Marines from the service's 202,000 active-duty end strength, but political and fiscal realities may require the Corps to cut deeper.
"There is pressure to go below the 186,800, I don't want to lie to you," Amos told Marine Corps Times recently during a two-day trip to Marine Corps Forces Reserve headquarters here and Marine Corps Air Station Cherry Point, N.C. "We just don't know what that is going to look like yet and we won't know for months."
Budget pressures ratcheted up after President Barack Obama signed a deal Aug. 2 to reduce the U.S. government's estimated $1.5 trillion budget deficit. That deal, reached after weeks of haggling in Congress, likely means at least $350 billion in cuts to defense spending over the next decade, and potentially up to $1 trillion.
It's not clear how much of that burden the Corps will be forced to shoulder, but the numbers could prime the service for considerable change. It depends on how much of the Corps' $26 billion budget is slashed during the coming year, Amos said.
Earlier this year, recently retired Defense Secretary Robert Gates "blessed" the Corps' force-structure review recommendations, Amos said. He did so on the condition that force reductions not begin until after U.S. combat operations in Afghanistan are complete, likely in 2014.
That was before the deficit deal was reached, however. Amos could be pushed into a corner by budget decisions that will affect the entire military. Marine planners have developed a blueprint that lays out options for a force smaller than 186,800 Marines, and with the drawdown beginning as soon as fiscal 2013 - which begins in October 2012 - to meet fiscal requirements, Amos said.
The commandant declined to say how small the service could eventually be, but sources at Marine Corps headquarters said planners have discussed cuts that could reduce the service by at least 25,000 Marines. That would leave the Corps with fewer than 180,000 troops on active duty. There were about 172,000 Marines on active duty at the time of the 9/11 terrorist attacks, and about 175,000 when the U.S. invaded Iraq in March 2003.
What to expect
Where there could be cuts
Recommendations made last year by the Corps' Force Structure Review Group are expected to serve as the drawdown's framework. Outlined broadly in February, it calls for the estimated 15,000-troop reduction and elimination of several units. It's unclear how deeper cuts would be implemented if they are required.The force-structure recommendations call for one regimental headquarters to be cut, dropping the total to seven. The Corps also will cut its active-duty infantry battalions from 27 to 24, its artillery batteries from nine to seven and its armor companies from 10 to eight, Marine officials said.
Three active and one reserve Marine wing support group headquarters also will be cut, with aviation logistics expertise kept within the Marine air wing staff. Command and control of the Marine wing support squadrons will instead fall under the Marine air group headquarters.
Additionally, Marine logistics groups will be trimmed, with key pieces aligned with Marine expeditionary units and infantry regiments. By being a part of those units, logistics Marines will train with the operational units instead of assigned to them shortly ahead of a deployment.
Marine officials in several commands also have disclosed expected troop reductions. For example, The Basic School at Marine Corps Base Quantico, Va., is planning to see its staff of more than 800 Marines reduced by 27 captains and 103 enlisted billets.
The Corps also has started to build two new one-star Marine expeditionary brigade headquarters, with one falling under Marine Corps Forces Central Command, out of Tampa, Fla., and the other falling under Marine Corps Forces Africa Command, based in Germany.
The manpower will be available for the MEB headquarters as the Corps flattens the command staff at Marine Corps Installations East and West. The two-star MCI commands manage bases, stations and regional strategies for the Corps, and will be streamlined as part of force restructuring. Details on the MCI cuts have not been disclosed.
The Corps also recently adopted a significant change to its top-end service limits for sergeants, from 13 to 10 years. Each Marine will still be guaranteed at least one chance to go before a staff sergeant promotion board, even in the slowest promoting military occupational specialties. However, once a Marine is passed over twice or reaches 10 years of service without being promoted, he will be shown the door either at the end of his current contract or seven months after the release of promotion board results - whichever offers more time.
This change is partly a return to normal following rapid growth during the 202,000 push, Manpower officials said. The service limit for sergeants was 10 years from 1992 to 2001. However, senior leaders also said it is part of developing a new, more competitive environment that will make a drawdown less painful by moving top noncommissioned officers into zone for promotion faster than they otherwise would be, preventing stagnation.
"I would say it's a combination of all things," Barrett said. "I would say that's fair."
Fight Back Against an Economic Attack, Buy Gibson Guitars and thier Products
I am a proud owner of two Gibson Guitars. I won a Gibson Les Paul autographed by Ace Freely of Kiss, the year1978 at a raffle in New Jersey and a Gibson SG model singed by Angus Young of AC/DC being the 77th caller into a radio station in 1985. I own a Fender Telecaster and a BC Rich too. They all have the same wood on the fret board all made in the USA before our jobs were outsourced to China. All handmade with Fine American craftsmanship. Gibson Guitars is a reminder of what can make this country great again if we are willing to put up a fight to keep their doors open and people working.
Not many of you maybe cannot afford a Les Paul or a Gibson SG guitar to support this company in need of support. Gibson sells more than just Guitars. You can buy T-shirts and baseball caps to show your support keeping jobs in America. We should be saying thank you to Gibson Guitars, despite with all the burdensome regulations that are costly to operate here in the states. They could have went to China or Mexico to keep cost down with cheap labor. Gibson chose to keep the jobs here to keep Americans working. Lets show our support for them for staying here and not outsourcing overseas like many companies did when it got too costly.
This Government raid on Gibson Guitars is our government attacking one of the last bastions of American craftsmanship. This is crony capitalism by a gangster government out of control. Gibson donated to the GOP and not to the Democrats. Since Gibson did not kiss the ring of the Chicago mob boss in the oval office. So the Department of Justice selectively enforces a foreign law outside the jurisdiction of the United States trying to shut down competition in favor of a guitar maker who donated to Obama. This is just not bureaucratic nonsense we hear about. This is extortion, racketeering and abuse of power coming out of the White House attacking the real economy in favor of his donors. This is another reason why we need to impeach Obama in light of this raid on Gibson Guitars. Abuse of power, plain and simple.
How we can support Gibson to show we are with them is if you cannot afford a guitar? Like I said before. Buy T-shirts and ball caps. If they sell jackets and duffel bags. Buy them too, even if they sell boxer short and ladies panties. Purchase it and show we are behind them,that is what will win in the end. It will be we the people having the victor . We have to send a message to this out of control government that they are on the losing side. Lets keep America working .support Gibson Guitars.
Not many of you maybe cannot afford a Les Paul or a Gibson SG guitar to support this company in need of support. Gibson sells more than just Guitars. You can buy T-shirts and baseball caps to show your support keeping jobs in America. We should be saying thank you to Gibson Guitars, despite with all the burdensome regulations that are costly to operate here in the states. They could have went to China or Mexico to keep cost down with cheap labor. Gibson chose to keep the jobs here to keep Americans working. Lets show our support for them for staying here and not outsourcing overseas like many companies did when it got too costly.
This Government raid on Gibson Guitars is our government attacking one of the last bastions of American craftsmanship. This is crony capitalism by a gangster government out of control. Gibson donated to the GOP and not to the Democrats. Since Gibson did not kiss the ring of the Chicago mob boss in the oval office. So the Department of Justice selectively enforces a foreign law outside the jurisdiction of the United States trying to shut down competition in favor of a guitar maker who donated to Obama. This is just not bureaucratic nonsense we hear about. This is extortion, racketeering and abuse of power coming out of the White House attacking the real economy in favor of his donors. This is another reason why we need to impeach Obama in light of this raid on Gibson Guitars. Abuse of power, plain and simple.
How we can support Gibson to show we are with them is if you cannot afford a guitar? Like I said before. Buy T-shirts and ball caps. If they sell jackets and duffel bags. Buy them too, even if they sell boxer short and ladies panties. Purchase it and show we are behind them,that is what will win in the end. It will be we the people having the victor . We have to send a message to this out of control government that they are on the losing side. Lets keep America working .support Gibson Guitars.
FOMC Minutes Summary - Bernanke Waves White Flag
Check out the video below. Bernanke has nothing left.
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Marketwatch
WASHINGTON - If you’re not interested in 10 pages of two-column verbiage, here are the condensed minutes from the Federal Open Market Committee meeting of Aug. 9:
“The economy’s lousy. It’s not our fault. We can do more things but they probably won’t work, or at least not work well.”To be fair, the Fed does have ideas. Most we’ve heard before: buying more bonds, buying longer-dated bonds, cutting interest on the reserves it pays to banks that park money.
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Marketwatch
The options with the most support were more asset purchases and increasing the maturity of the Fed’s balance sheet. A “few” favored cutting the interest on excess reserves the Fed pays to banks. The Fed will discuss these options at its two-day meeting on Sept. 20-21.
And there were some on the FOMC who thought the central bank was out of ammunition.
“Some participants judged that none of the tools available to the FOMC would likely do much to promote a faster economic recovery,” according to the minutes. “Consequently, these participants thought that providing additional stimulus at this time would risk boosting inflation without providing a significant gain in output or unemployment.”
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An US F4 Phantom Jet tests the strength of a concrete wall built to withstand a nuclear blast by crashing into it at 500 MPH. Watch the plane turn into dust.
We assume the symbolism of the above video is obvious.
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Senator Sanders on Social Security
Video - Bernie Sanders On Social Security - Aug. 24, 2011
Outstanding short speech.
- "There has been too much discussion in this country, not just from Republicans, but from Democrats alike, that we should be making cuts in Social Security. That is wrong!"
Sanders announced that he will introduce legislation that would strengthen Social Security without cutting benefits to any of its beneficiaries. Sanders’ legislation would eliminate the income cap that currently exists in the payroll tax that does not tax income above $106,800.
- To keep Social Security strong for another 75 years, Sanders’ legislation would apply the same payroll tax already paid by more than nine out of 10 Americans to those with incomes over $250,000 a year. [...] Under Sanders’ legislation, Social Security benefits would be untouched. The system would be fully funded by making the wealthiest Americans pay the same payroll tax already assessed on those with incomes up to $106,800 a year.
Read Sanders full press release HERE...
Interview between Cheviot's Ned Naylor-Leyland and James Turk
China declared war on the City of London and Wall Street when they opened the Pan Asian Metals Exchange and PAGE the Pan Asian Gold Exchange.
Their opening salvo will be fired in October when the Pan Asian Metals Exchange allows international investors to buy into a 90 day rolling spot gold contract which is for allocated gold. They already have a ten ounce mini-gold contract and a similar silver contract. The investor will have the choice of either take delivery of their gold or be paid in Chinese Renminbi. Major European and North American brokerages will allow investors worldwide to invest in the Pan Asian Metals Exchange.
Six major Chinese banks will fix the gold price every morning at 8am their time.
Currently, the price of gold and silver are set by the paper sale of silver and gold. The Federal Reserve is willing to pay JP Morgan, HSBC, Goldman Sachs and other banks hundreds of billions of dollars to short gold and silver.
Currently the New York and London banks own and run the gold and silver exchanges COMEX and the London Bullion Market Exchange. HSBC also runs the gold Exchange Traded Fund (ETF) GLD and JP Morgan runs the SLV ETF. ETFs use some bullion and a lot of paper to simulate the spot price of gold and silver bullion. They are designed to siphon billions of dollars in investor funds away the bullion market to paper.
Jeff Christian told us at the CFTC hearings that there is up to 100 ounces of paper gold and silver for every ounce of physical bullion. I have also written of leased gold where the UK and US governments lease their gold to a bank. The government is supposed to retain physical possession of the bullion and give the banks a certificate which is treated as gold. This paper gold is then sold five times and appears on the balance sheet of six banks as an asset.
The Chinese will put an end to paper gold. They will set the price of bullion. They will allocate a bar of gold to every bar on sale in their futures market. This is called allocated gold. The LBMA and COMEX are alleged to have 90% unallocated versus 10% allocated. But I have heard of a married couple from the Mideast who had to threaten a lawsuit to get a ton of supposedly allocated gold back from their Swiss bank. And now Hugo Chavez has driven the market insane by demanding the return of his 211 tons of gold. Ben Bernanke is printing dollars as fast as he can to subsidize tens of billions of dollars in losing short sales.
These new gold and silver investment products will be rolled out in October if not earlier. I have previously said that I expected silver to skyrocket by November. I also said that after silver goes through 53 dollars an ounce there will be no resistance to bullion going higher. When the New York and London stranglehold on the exchanges lose control, prices will jump. Of course SLV and GLD will be exposed for the scams which they are.
If you can have a guarantee of allocated gold and silver, why would you do any business at all with the criminal bankers and Ponzi scheme operators of London and New York?
Major London and New York banks, the LBMA, the COMEX, GLD and SLV are going down.
A Comment On The Rothschilds and the Pan Asian Metals Exchange:
I had previously disclosed the information about the 10% ownership in the Pan Asian Metal Exchange to my regular readers. I cannot put everything into every article.
Go back in history to the Battle of Waterloo (18 June 1815). What did the Rothschilds do? They told the City of London that Napoleon had won. Lord Rothschild appeared in public to sell his shares. But he had his agents buy back all of his shares and those of everyone who was panic selling.
In effect he declared war on the City of London in 1815 and won. The Rothschilds wound up owning the Bank of England until the post-war Labour government nationalized it.
How much do you want to bet that N M Rothschild is long on gold and silver while selling all of their paper?
Obama names labor economist to top advisory post
President Barack Obama announced Monday that he would appoint Princeton professor Alan Krueger to lead the White House Council of Economic Advisers.
Krueger, a labor economist and advocate of more direct government action to combat high unemployment, previously served in the Treasury Dept. during President Obama's first two years, and is credited with the successful "Cash for Clunkers" program that helped the U.S. auto industry get back on its feet and a number of tax incentive programs that encouraged some new hiring. He also served at the Treasury during the Clinton administration.
If confirmed by the Senate, Krueger will replace Austan Goolsbee, Obama's former chief economist who left last month.
"I rely on the Council of Economic Advisers to provide unvarnished analysis and recommendations, not based on politics, not based on narrow interests, but based on the best evidence -- based on what’s going to do the most good for the most people in this country," Obama said during a brief press conference Monday morning.
"And that’s more important than ever right now. We need folks in Washington to make decisions based on what’s best for the country, not what’s best for any political party or special interest. That’s how we’ll get through this period of economic uncertainty, and that’s the only way that we’ll be able to do what’s necessary to grow the economy."
Tags: Krueger, a labor economist and advocate of more direct government action to combat high unemployment, previously served in the Treasury Dept. during President Obama's first two years, and is credited with the successful "Cash for Clunkers" program that helped the U.S. auto industry get back on its feet and a number of tax incentive programs that encouraged some new hiring. He also served at the Treasury during the Clinton administration.
If confirmed by the Senate, Krueger will replace Austan Goolsbee, Obama's former chief economist who left last month.
"I rely on the Council of Economic Advisers to provide unvarnished analysis and recommendations, not based on politics, not based on narrow interests, but based on the best evidence -- based on what’s going to do the most good for the most people in this country," Obama said during a brief press conference Monday morning.
"And that’s more important than ever right now. We need folks in Washington to make decisions based on what’s best for the country, not what’s best for any political party or special interest. That’s how we’ll get through this period of economic uncertainty, and that’s the only way that we’ll be able to do what’s necessary to grow the economy."
Peaceful Solutions for Impossible Problems (Part 1 of 2)
Blake Walley, Contributing Writer
Activist Post
I know it may sound crazy to you, but I don’t believe it necessarily takes a “real” economist to fix our financial problems. In fact, my philosophy is that the economy needs to be simplified drastically… because when the layperson no longer understands what is going on with the economy, they are also unable to act as a watchdog upon it. This in turn leaves the door open for rampant corruption and manipulation by the small group of insiders that actually do understand how the system works… because unfortunately for the rest of us, there seems to be a tendency for them to use their “insider knowledge,” absurdly complicated mathematics, and carefully worded legal language against us for their own selfish interests instead…
So as most of you are aware, we are in major financial mess… And since it should be obvious by now that our media and politicians don’t have a clue, I guess it doesn’t hurt to have some “outside the box” solutions. But I also have to warn you…
I am not an economist, I am just a guy with common sense, critical-thinking skills, and a well developed BS detector. And since the phony, bought-and-paid for mainstream media is never going to give you any actual solutions, then I guess it’s time for me to step up again and try to handle this mess myself:
First off, no matter what these TV clowns are saying between the seemingly endless pharmaceutical ads and car insurance commercials, let’s be clear: it is mathematically impossible to ever pay off this debt.
Speaking of which, did you know that the debt we owe goes directly to a private bank? Yes, the Federal Reserve Bank is almost entirely private. That means it has absolutely NOTHING to do with our Federal government. So with that in mind, it kind of makes you wonder things like; so do we really owe them this money? And why is a private bank in charge of our economy anyway?
And why are these filthy rich aristocrats like Ben Bernanke, Henry Paulson, Timmy Geithner, and Alan Greenspan living like kings while telling us everything is fine even though every financial indicator seems to be telling us the opposite?
Does this make sense to anyone else? Not only are they living like kings among us serfs already… according to the mathematics of the debt, we haven’t even scratched the surface of what we still owe them! Now even though it’s not quite that simple, the point is; how absurd does this mathematical nightmare have to get before you finally decide to take action?
But this speech isn’t about class warfare. After all, there are many other people that are also responsible for this mess; and many of them see those people everyday in their own mirror. However, I’m also not here to insult the gullible, naïve, and uninformed either. After all, despite the fact that I can be perceived as condescending at times; I also used to be gullible, naïve, and uninformed.
So how to we fix the economy then? Let me ask you a question: Is there a shortage of resources? Is there food in the grocery stores? Is there gasoline in the pumps? Yes. So let me ask you; why are we about to live in indefinite austerity even though we already have resources available? I’ll explain…
Whether you want to refer to this racket as crony-capitalism, crony-collectivism, socialism, fascism, globalism, or neo-feudalism; our economy has been destroyed by corruption. In this specific resource example I mentioned, it’s a phenomenon known as “artificial scarcity.” The resources are still there, you just can’t “afford” them anymore.
Here’s another example of how wasteful our economy is; not only does your dollar not buy as much as it used to, did you notice that everything also costs more now too? Quantitative “easing?” They should call it “quantitative squeezing,” because the Federal Reserve has really mastered how to squeeze our economy from both ends.
I hate to give bad news, but the truth is that corruption and greed have destroyed our economic system. And these people aren’t going to tell you the truth and it’s for a childishly simple reason; they don’t want to lose their wealth and power.
So what do we do?
First we need to acknowledge how bad the corruption has gotten, and accept the fact that it’s impossible to fix the system within its current framework.
You also have to understand history…. In fact our country actually shares many eerie parallels to Ancient Rome; one of which is the invasion of barbarians… only these are modern times; so instead of an obvious head on attack by barbarian hordes… we’ve been invaded by ingenious and calculated stealth. And instead of barbarians, we’ve been invaded by bankers.
But regardless of whether this mess was caused by design or not, we have to admit that the system is a failure and its complexity and confusion has led to rampant manipulation and corruption. Fact: this is a failed system and it’s time to move on. Do you want to see your grand-kids in poverty or having to work 3 jobs while Ben Bernanke’s spoiled rotten grandchildren are living like gods? Either do I….
Look, no one wants the economy to fall apart in their lifetime, but it’s not going to last forever. The stock market isn’t going to last forever. We don’t need this corrupt, manipulated, white-collar criminal casino having this kind of power over our prosperity. In my opinion, the world will be a better place when once we’ve turned the New York Stock Exchange into the New York Stock Exchange Museum.
It’s really sad that they are making such a big deal about our credit rating, but it shows you just how embarrassingly corrupt our economic system has become.
And believe me, the fact that we are still “AA+” is still a ridiculous joke. Funny, Warren Buffett was recently quoted as saying that he thought our debt should be rated “quadruple A” which was also parroted in a recent Obama speech. Quadruple A? I can’t believe both of these guys said that with a straight face. Who knew these guys had such an incredible sense of humor?
So what should our credit rating really be? Here, let me illustrate why our credit rating is a joke from an “outside the box” perspective: hypothetically speaking; if you were an investor from another planet and you stumbled upon earth and spent a week on Wall Street, would you really want to invest in our bonds? Of course not! So what would you rate them? Let’s face reality: they’re JUNK!
Of course they aren’t ready to admit they are junk, and I can’t say I completely blame them. After all, a spontaneous default would obviously send economic shock waves and possible panic all over the globe. I mean the dollar is still the world’s reserve currency… however; we can’t keep this hoax of an economy propped up forever, so how do we fix it?
I’m sure most of you had the chance to see just how incompetent our politicians really are… I mean John Boehner? Nancy Pelosi? Mitch McConnell? Does anyone else feel convinced that any of these clowns are actually going to fix anything? Of course not… they’re just going to point the fingers at somebody else and just keep pushing the problem into the future.
So since these incompetent weasels have no solutions, the latest idea lies in the creation of a diabolical super oligarchy of 13? I’m sorry, super congress? Really? And in the odd chance that this really became necessary, shouldn’t the people get to pick the 12? And if there wasn’t enough time for a vote, shouldn’t they be selected by the highest approval rating? Or would that make too much sense? I mean we wouldn’t want to risk having a situation where 12 of the country’s most unpopular aristocrats were selected to be in charge of something this important, would we? That would just be silly… what do you think this is, a Dystopia? That could never happen in real life!
But seriously, if anyone thinks these corrupted incompetents are going to solve our financial problems than I’m sorry to inform you that you’re probably not going to get a solution you are going to be excited about. In fact it’s most likely going to end up with you under hopeless and overwhelming amounts of debt while these corrupt, multimillionaire con-men live like kings and tell you that everything is fine; “corporations are people” and write laws to legally protect themselves from all the nefarious rackets they’ve created.
Another possibility is that we will go into the dreaded one-world currency that will be run by the very same people that are responsible for this mess to begin with. Knowing them, I’m sure they will make that sound like the most amazing idea ever, but the reality is; it will only be a different version of what we have now: an overly confusing and fraudulent system designed to benefit the small cabal of insiders that actually understand how it works.
We need transparency and common-sense economics, not multi-million dollar bankers, lawyers, and politicians running the system. The economy should empower the people, not enslave them.
And speaking of Warren Buffett; now he’s trying to suggest we should raise taxes on the rich…. A noble gesture… however, that’s probably not going to happen, but even if it does, let’s be honest; it’s not going to magically fix anything, and there’s no mathematical or scientific way to prove it will… which leads me to my next point:
Our economic system needs to be simplified drastically if the general public is ever going to have a hope of understanding it; and with that being said, I think it should be quite obvious by now that Keynesian economics should be purged from our society for the greater good of the future.
Visit Eccentric Perspective for the second half, parts 4-7
Blake Walley is an independent writer hiding in plain view on the strip of Las Vegas. Visit his Eccentric Perspective blog for more philosophical and political opinion, citizen/gonzo journalism.
Activist Post
I know it may sound crazy to you, but I don’t believe it necessarily takes a “real” economist to fix our financial problems. In fact, my philosophy is that the economy needs to be simplified drastically… because when the layperson no longer understands what is going on with the economy, they are also unable to act as a watchdog upon it. This in turn leaves the door open for rampant corruption and manipulation by the small group of insiders that actually do understand how the system works… because unfortunately for the rest of us, there seems to be a tendency for them to use their “insider knowledge,” absurdly complicated mathematics, and carefully worded legal language against us for their own selfish interests instead…
So as most of you are aware, we are in major financial mess… And since it should be obvious by now that our media and politicians don’t have a clue, I guess it doesn’t hurt to have some “outside the box” solutions. But I also have to warn you…
I am not an economist, I am just a guy with common sense, critical-thinking skills, and a well developed BS detector. And since the phony, bought-and-paid for mainstream media is never going to give you any actual solutions, then I guess it’s time for me to step up again and try to handle this mess myself:
First off, no matter what these TV clowns are saying between the seemingly endless pharmaceutical ads and car insurance commercials, let’s be clear: it is mathematically impossible to ever pay off this debt.
Speaking of which, did you know that the debt we owe goes directly to a private bank? Yes, the Federal Reserve Bank is almost entirely private. That means it has absolutely NOTHING to do with our Federal government. So with that in mind, it kind of makes you wonder things like; so do we really owe them this money? And why is a private bank in charge of our economy anyway?
And why are these filthy rich aristocrats like Ben Bernanke, Henry Paulson, Timmy Geithner, and Alan Greenspan living like kings while telling us everything is fine even though every financial indicator seems to be telling us the opposite?
Does this make sense to anyone else? Not only are they living like kings among us serfs already… according to the mathematics of the debt, we haven’t even scratched the surface of what we still owe them! Now even though it’s not quite that simple, the point is; how absurd does this mathematical nightmare have to get before you finally decide to take action?
But this speech isn’t about class warfare. After all, there are many other people that are also responsible for this mess; and many of them see those people everyday in their own mirror. However, I’m also not here to insult the gullible, naïve, and uninformed either. After all, despite the fact that I can be perceived as condescending at times; I also used to be gullible, naïve, and uninformed.
So how to we fix the economy then? Let me ask you a question: Is there a shortage of resources? Is there food in the grocery stores? Is there gasoline in the pumps? Yes. So let me ask you; why are we about to live in indefinite austerity even though we already have resources available? I’ll explain…
Whether you want to refer to this racket as crony-capitalism, crony-collectivism, socialism, fascism, globalism, or neo-feudalism; our economy has been destroyed by corruption. In this specific resource example I mentioned, it’s a phenomenon known as “artificial scarcity.” The resources are still there, you just can’t “afford” them anymore.
Here’s another example of how wasteful our economy is; not only does your dollar not buy as much as it used to, did you notice that everything also costs more now too? Quantitative “easing?” They should call it “quantitative squeezing,” because the Federal Reserve has really mastered how to squeeze our economy from both ends.
I hate to give bad news, but the truth is that corruption and greed have destroyed our economic system. And these people aren’t going to tell you the truth and it’s for a childishly simple reason; they don’t want to lose their wealth and power.
So what do we do?
First we need to acknowledge how bad the corruption has gotten, and accept the fact that it’s impossible to fix the system within its current framework.
You also have to understand history…. In fact our country actually shares many eerie parallels to Ancient Rome; one of which is the invasion of barbarians… only these are modern times; so instead of an obvious head on attack by barbarian hordes… we’ve been invaded by ingenious and calculated stealth. And instead of barbarians, we’ve been invaded by bankers.
But regardless of whether this mess was caused by design or not, we have to admit that the system is a failure and its complexity and confusion has led to rampant manipulation and corruption. Fact: this is a failed system and it’s time to move on. Do you want to see your grand-kids in poverty or having to work 3 jobs while Ben Bernanke’s spoiled rotten grandchildren are living like gods? Either do I….
Look, no one wants the economy to fall apart in their lifetime, but it’s not going to last forever. The stock market isn’t going to last forever. We don’t need this corrupt, manipulated, white-collar criminal casino having this kind of power over our prosperity. In my opinion, the world will be a better place when once we’ve turned the New York Stock Exchange into the New York Stock Exchange Museum.
It’s really sad that they are making such a big deal about our credit rating, but it shows you just how embarrassingly corrupt our economic system has become.
And believe me, the fact that we are still “AA+” is still a ridiculous joke. Funny, Warren Buffett was recently quoted as saying that he thought our debt should be rated “quadruple A” which was also parroted in a recent Obama speech. Quadruple A? I can’t believe both of these guys said that with a straight face. Who knew these guys had such an incredible sense of humor?
So what should our credit rating really be? Here, let me illustrate why our credit rating is a joke from an “outside the box” perspective: hypothetically speaking; if you were an investor from another planet and you stumbled upon earth and spent a week on Wall Street, would you really want to invest in our bonds? Of course not! So what would you rate them? Let’s face reality: they’re JUNK!
Of course they aren’t ready to admit they are junk, and I can’t say I completely blame them. After all, a spontaneous default would obviously send economic shock waves and possible panic all over the globe. I mean the dollar is still the world’s reserve currency… however; we can’t keep this hoax of an economy propped up forever, so how do we fix it?
I’m sure most of you had the chance to see just how incompetent our politicians really are… I mean John Boehner? Nancy Pelosi? Mitch McConnell? Does anyone else feel convinced that any of these clowns are actually going to fix anything? Of course not… they’re just going to point the fingers at somebody else and just keep pushing the problem into the future.
So since these incompetent weasels have no solutions, the latest idea lies in the creation of a diabolical super oligarchy of 13? I’m sorry, super congress? Really? And in the odd chance that this really became necessary, shouldn’t the people get to pick the 12? And if there wasn’t enough time for a vote, shouldn’t they be selected by the highest approval rating? Or would that make too much sense? I mean we wouldn’t want to risk having a situation where 12 of the country’s most unpopular aristocrats were selected to be in charge of something this important, would we? That would just be silly… what do you think this is, a Dystopia? That could never happen in real life!
But seriously, if anyone thinks these corrupted incompetents are going to solve our financial problems than I’m sorry to inform you that you’re probably not going to get a solution you are going to be excited about. In fact it’s most likely going to end up with you under hopeless and overwhelming amounts of debt while these corrupt, multimillionaire con-men live like kings and tell you that everything is fine; “corporations are people” and write laws to legally protect themselves from all the nefarious rackets they’ve created.
Another possibility is that we will go into the dreaded one-world currency that will be run by the very same people that are responsible for this mess to begin with. Knowing them, I’m sure they will make that sound like the most amazing idea ever, but the reality is; it will only be a different version of what we have now: an overly confusing and fraudulent system designed to benefit the small cabal of insiders that actually understand how it works.
We need transparency and common-sense economics, not multi-million dollar bankers, lawyers, and politicians running the system. The economy should empower the people, not enslave them.
And speaking of Warren Buffett; now he’s trying to suggest we should raise taxes on the rich…. A noble gesture… however, that’s probably not going to happen, but even if it does, let’s be honest; it’s not going to magically fix anything, and there’s no mathematical or scientific way to prove it will… which leads me to my next point:
Our economic system needs to be simplified drastically if the general public is ever going to have a hope of understanding it; and with that being said, I think it should be quite obvious by now that Keynesian economics should be purged from our society for the greater good of the future.
Visit Eccentric Perspective for the second half, parts 4-7
Blake Walley is an independent writer hiding in plain view on the strip of Las Vegas. Visit his Eccentric Perspective blog for more philosophical and political opinion, citizen/gonzo journalism.
Pentagon under fire over war contracts
 |
| US soldiers having lunch at a "Burger King" at their military base in southern Baghdad © AFP/File Samuel Aranda |
WASHINGTON (AFP) - The Pentagon has wasted more than $30 billion on contracts in Iraq and Afghanistan due to shoddy management and a lack of competition, an independent inquiry said.
In its final report to Congress due to be released Wednesday, the bipartisan Commission on Wartime Contracting warns that waste and fraud have undermined American diplomacy, fomented corruption in host countries and tarnished the US image abroad.
"Tens of billions of taxpayer dollars have been wasted through poor planning, vague and shifting requirements, inadequate competition, substandard contract management and oversight, lax accountability, weak inter-agency coordination, and subpar performance or outright misconduct by some contractors and federal employees," the co-chairs of the panel, Christopher Shays and Michael Thibault, wrote in the Washington Post.
"Both government and contractors need to do better," said the commentary published Monday.
The report comes amid mounting pressure in Washington to scale back defense spending and waning public support for the Afghan mission after nearly a decade of war.
The US military increasingly has turned to private companies since the September 11, 2001 attacks, with the contractor workforce at times surpassing 260,000 people -- a roughly one-to-one ratio with troops deployed.
But the commission found that the United States went to war in Afghanistan in 2001 and in Iraq in 2003 without sufficiently preparing to handle the "enormous scale and numbers of contracts."
As a result, "America is over-relying on contractors," they said.
The commission chiefs also warned that another $30 billion or more could be wasted if the Iraqi or Afghan "governments are unable or unwilling to sustain US-funded projects after our involvement ends."
The Pentagon said previous inquiries had pointed out problems with contracting and the department had enacted a number of reforms as a result.
"We are well aware of some of the deficiencies over the years in how we've worked contracts," spokesman Colonel Dave Lapan told reporters.
"We have worked hard over those years to try to correct those deficiencies when we've come across them," said Lapan.
The department will review the report to look for any additional measures to prevent waste, he added.
Among the examples cited by the commission was a $40 million prison built in Iraq that the Baghdad government "did not want and that was never finished," Shays and Thibault wrote.
In Afghanistan, the United States spent $300 million on a power plant in Kabul that the Afghan government cannot afford to sustain and lacks the technical experts to run, the panel found.
The lack of competition in contracting has resulted in waste, lower quality services and fraud, according to the investigative report by the non-profit Center for Public Integrity.
In one case, a Tucson-based company, Applied Energetics, won over $50 million in funding for a futuristic "lightning weapon" that is supposed to detonate roadside bombs, even though it had failed some tests.
In August, the Marine Corps canceled the latest $3 million proposed contract after a commander in Afghanistan decided the weapon would not provide what his unit needed.
The Defense Department often justifies no-bid contracts by saying there is only one legitimate supplier of certain goods, that there is "an unusual and compelling urgency" or that holding a competition would undermine national security, the report said.
During his 2008 presidential campaign, Barack Obama vowed to rein in contracting and after his election, he issued a memorandum calling for more competition. But the report found that Pentagon no-bid contracts have continued to increase.
The Pentagon said no-bid contracts were sometimes necessary to rush sophisticated equipment to troops in combat.
"There have been many instances because of wartime needs where a long, lengthy competitive bid contract process does not serve the needs of the warfighters," Lapan said.
© AFP -- Published at Activist Post with license
$30 bln of US war money gone to crooks and wasters
http://rt.com/news/billions-pentagon-money-wasted-845-417/
The US wasted at least one dollar out of six on wars in Iraq and Afghanistan, which amounts to about US $30 billion, a bipartisan commission found. The sum may double in future, as foreign governments abandon unsustainable projects funded by the US.
The Commission on Wartime Contracting in Iraq and Afghanistan is to report its sobering findings on Wednesday, but co-chairs Christopher Shays and Michael Thibault made parts of it public on Monday in an op-ed article in the Washington Post.
“Tens of billions of taxpayer dollars have been wasted through poor planning, vague and shifting requirements, inadequate competition, substandard contract management and oversight, lax accountability, weak inter-agency co-ordination, and sub-par performance or outright misconduct by some contractors and federal employees. Both government and contractors need to do better,” they say.
The Pentagon has been increasingly reliant on contractors to wage war over the decades. In Afghanistan and Iraq, on average, there was one private contractor for each troop serving, with the total number of contractors at times exceeding 260,000. Now America “cannot conduct large or prolonged military operations without contractor support.”
The sheer scale of private firms’ operation aggravated by lack of accountability caused a fresh set of problems and has harmed US interests in a number of ways, the authors say.
“Our final report shows that the costs of contracting waste and fraud extend beyond the disservice to taxpayers. The costs include diminishing US military, diplomatic and development efforts; fostering corruption in host countries; and undermining US standing and influence overseas,” they say.
“Poor planning, federal understaffing and over-reliance led to billions of dollars of contracts awarded without effective competition, legions of foreign subcontractors not subject to US laws, private security guards performing tasks that can easily escalate into combat, unprosecuted instances of apparent fraud, and projects that are unlikely to be sustained by the governments of Iraq and Afghanistan,” the authors add.
The potential waste from unfinished or unsustainable projects is a problem, which may equal in scale that of actual waste from poor handling of direct expenditures. Some of the examples of this are $40 million invested in a prison in Iraq which Baghdad did not want and that was never finished, and $300 million poured into a Kabul power plant which the Afghan government has neither the money nor the technical skills to use. The money came from US taxpayers and is likely to simply vanish down the drain.
The commission has prepared a set of recommendations for Congress and the US administration to approve, which they hope will improve the situation.
The Pentagon say they are aware of the problem, but refused to comment on the commission’s findings until the report is published.
"We are well aware of some of the deficiencies over the years in how we have worked contracts," said Marine Corps Colonel David Lapan, a Pentagon spokesman. "We have worked hard over those years to try to correct those deficiencies when we come across them."
"There have been many instances because of wartime needs where a long lengthy competitive bid contract process does not serve the needs of the war-fighters," he said. "In many instances it's a matter of saving lives, doing things more quickly because of the nature of conflict."
The Department of Defense has been under increasing scrutiny recently, as the US government seeks ways to reduce the budget deficit. Lately, the Pentagon was targeted for overspending on risky weapon R&D projects, buying aircraft spare parts at inflated prices and paying money to shady Afghan transport companies possibly linked to the Taliban, among other things. The sums allegedly mishandled in all such cases range from tens of millions to billions of dollars.
US infantryman Sergeant Darren McIntyre prepares his gun in the Delta Company barracks at combat outpost Makuan in Kandahar province in southern Afghanistan (AFP Photo / Romeo Gacad)
The US wasted at least one dollar out of six on wars in Iraq and Afghanistan, which amounts to about US $30 billion, a bipartisan commission found. The sum may double in future, as foreign governments abandon unsustainable projects funded by the US.
The Commission on Wartime Contracting in Iraq and Afghanistan is to report its sobering findings on Wednesday, but co-chairs Christopher Shays and Michael Thibault made parts of it public on Monday in an op-ed article in the Washington Post.
“Tens of billions of taxpayer dollars have been wasted through poor planning, vague and shifting requirements, inadequate competition, substandard contract management and oversight, lax accountability, weak inter-agency co-ordination, and sub-par performance or outright misconduct by some contractors and federal employees. Both government and contractors need to do better,” they say.
The Pentagon has been increasingly reliant on contractors to wage war over the decades. In Afghanistan and Iraq, on average, there was one private contractor for each troop serving, with the total number of contractors at times exceeding 260,000. Now America “cannot conduct large or prolonged military operations without contractor support.”
The sheer scale of private firms’ operation aggravated by lack of accountability caused a fresh set of problems and has harmed US interests in a number of ways, the authors say.
“Our final report shows that the costs of contracting waste and fraud extend beyond the disservice to taxpayers. The costs include diminishing US military, diplomatic and development efforts; fostering corruption in host countries; and undermining US standing and influence overseas,” they say.
“Poor planning, federal understaffing and over-reliance led to billions of dollars of contracts awarded without effective competition, legions of foreign subcontractors not subject to US laws, private security guards performing tasks that can easily escalate into combat, unprosecuted instances of apparent fraud, and projects that are unlikely to be sustained by the governments of Iraq and Afghanistan,” the authors add.
The potential waste from unfinished or unsustainable projects is a problem, which may equal in scale that of actual waste from poor handling of direct expenditures. Some of the examples of this are $40 million invested in a prison in Iraq which Baghdad did not want and that was never finished, and $300 million poured into a Kabul power plant which the Afghan government has neither the money nor the technical skills to use. The money came from US taxpayers and is likely to simply vanish down the drain.
The commission has prepared a set of recommendations for Congress and the US administration to approve, which they hope will improve the situation.
The Pentagon say they are aware of the problem, but refused to comment on the commission’s findings until the report is published.
"We are well aware of some of the deficiencies over the years in how we have worked contracts," said Marine Corps Colonel David Lapan, a Pentagon spokesman. "We have worked hard over those years to try to correct those deficiencies when we come across them."
"There have been many instances because of wartime needs where a long lengthy competitive bid contract process does not serve the needs of the war-fighters," he said. "In many instances it's a matter of saving lives, doing things more quickly because of the nature of conflict."
The Department of Defense has been under increasing scrutiny recently, as the US government seeks ways to reduce the budget deficit. Lately, the Pentagon was targeted for overspending on risky weapon R&D projects, buying aircraft spare parts at inflated prices and paying money to shady Afghan transport companies possibly linked to the Taliban, among other things. The sums allegedly mishandled in all such cases range from tens of millions to billions of dollars.
Barter Trade, Not Capitalism
ARE ANARCHISTS PRO OR ANTI capitalism? Many anarchists dogmatically claim an anarchist cannot be pro capitalism simply because capitalism is oppressive--and anarchism is based on socialist ideals. The anarchist society necessarily needs to be “free from capitalist oppression.” Other anarchists claim an anarchist society, based solely on voluntary action of free people (individually or collectively) cannot be anything but capitalist. There seems to be an unbridgeable gap here.
As anarchists often and correctly note, barter trade is inoffensive and it is ethical. Someone believing in natural rights (or any other kind of rights too) would say barter trade does not violate rights and is thus ethical. Some simply state that since barter trade is in full voluntary and does not include any kind of coercive measures it is ethical and just. This is a fully anarchist point of view, all anarchists should be able to support this.
Now, why is barter trade not the same as a market? Imagine two people, let’s say a baker and a fisherman, get together every now and then to voluntarily exchange things. The baker obviously values fish higher than the bread he needs to give up to get it, and the fisherman obviously values the bread higher than the fish he “pays” for it. It is very simple, if either one of them would believe it was not just--and that they were not better (or as good) off as before--they would not voluntarily agree to the exchange. This is how many libertarian or anarcho-capitalist anarchists define the market--voluntary exchanges for one’s own benefit, which means every exchange is for all partaking actors’ benefit.
Imagine there are more people in this society, for instance a wagon maker. Now, this is going to get troublesome since one wagon takes a lot of time and skill to produce, and the wagon maker cannot produce more than a few wagons each year. And, since the baker and fisherman know they cannot make a wagon unless not baking or fishing for a long while, they will agree to exchange a large quantity of bread or fish for a wagon (if they need it). Of course, working for a couple of months making a wagon, and then getting perhaps one thousand loaves of bread or many hundreds of fish is not an attractive exchange. Bread gets bad after a while, and fish will rot. Also, the wagon maker needs something to eat while making the wagon he is about to sell.
It is the same the other way around too: bread and fish will go bad as the baker or fisherman is trying to save enough bread or fish to buy a wagon. So the wagon-maker would have a wagon which he wishes to exchange for fish or bread, and the baker and fisherman would have their bread and fish while being interested in trading it for a wagon. But the exchange would never happen, since bread and fish easily goes bad when saved. So what would happen in this little society?
It is obvious the three people would come to an agreement since it is in their mutual interest to make this exchange. Maybe they agree on paying the wagon maker a couple of loaves of bread or some fish every day for a couple of months, and will in return get the wagon when it is finished. This means they have avoided the problem with bread or fish getting bad, and they all benefit from this scheme since nobody needs to keep a lot of bread/fish while awaiting the right quantity. There is nothing wrong with this, right? They are still into barter trade, but have agreed on paying for the thing of greater value in smaller portions. With this solution, they have through voluntary action invented the contract, since they have an agreement for exchange even thought the exchange is not immediate. The agreement therefore causes an ongoing interdependence throughout the time of the contract, but it is still barter and it is still 100 % voluntary.
Also, they have invented a financial instrument since there is value in the contract. The value arises simply because the baker and fisherman offer their products before they get anything in return (which is the basis for this contract), and will as time goes by have a bigger claim to the property (wagon) of the wagon maker. And, of course, the wagon maker will be in debt as the baker and fisherman pays him bread and fish while he has not yet given them anything. The difference is the current value of the contract, since--in this case--the baker and fisherman relies on the contract to get value in the future.
It is still barter, so there is no conflict and it is not offensive; it is still as ethical as we agree barter is. We are still relying totally on voluntary exchange for the mutual benefit of whomever is involved (in this case: the baker, the fisherman, and the wagon maker).
Now, maybe there is a storm and the fisherman’s boat is thrown ashore and sinks to the bottom of the sea. The fisherman cannot get any more fish (or he cannot get the quantity he expected) and would need to get a new boat. According to the contract he will have to continue paying a number of fish every day to the wagon maker even though the wagon maker in real terms is in debt to the fisherman. What can he do?
He can of course go to the wagon maker and ask him to release him from his obligation stated in the contract through cancelling it. Maybe the wagon maker will agree to this, but it would mean he has to pay the fisherman back the number of fish he has already paid. But the wagon maker has probably already started working on the fisherman’s wagon, which means he has really “paid” a part of the value of the contract even though it is not yet realized for the fisherman. Maybe he cannot afford to let the fisherman get his fish back because he ate them all and cannot trade for new ones. Now we have a problem.
Either the wagon maker could give the fisherman whatever he has achieved in making the wagon, perhaps a wheel and a blueprint (which are not really of value to the fisherman, who cannot continue the work), or he can simply demand the fisherman continues giving him fish as was already agreed. Or, he could offer to make yet another agreement saying perhaps that the contract is off and that the fisherman will have a few fish back, but that he will keep 10 fish because he now cannot get food the following days. Since he expected to get fish every day while working on the wagon he now demands some of his costs are covered by the fisherman--this is not hard to imagine.
As we can see, the contract is here a financial instrument since there is value in the expected completion of whatever is stated in the contract. The agreement in itself means a promise to make a future payment, thus the contract is simply an agreement to make such an exchange as we have covered above--but it is not immediate.
The contract is to some extent also to be considered as speculation, since the fisherman promises to give the wagon maker a number of fish every day--but while signing the contract he does not have the fish. He simply expects to have the fish when he is supposed to deliver it to the wagon maker. He believes he will be able to catch fish every day to give to the wagon maker, so he takes this chance. But there is, as we can see, a certain amount of risk involved.
The wagon maker and the fisherman most likely think this is quite troublesome, exchanging fish for wagons. The difference in value is too great, thereby causing a lot of problems. Of course, the value they identify in fish and wagons is totally subject to their wants and desires. There is no real (or rather: objective) value in the wagon nor in the fish. To the wagon maker the wagon is worth approximately the time and effort it takes him to produce the wagon, to the fisherman the wagon is worth as much as it lightens his burden or what he expects to gain in whatever he would like to use it for. The same is true with the fish: the fisherman values the fish to the time and effort he puts in catching the fish, while the wagon maker values the fish according to his needs or desires.
The values of the things is thus not objective, it is subjective and individual. What happens when these two people get together to exchange a wagon for a number of fish is the establishment of market value of both the fish and the wagon. The market value in this case is simply whatever is agreed between seller and buyer, e.g. a wagon is worth 1,000 fish and a fish is worth 1/1,000 wagon. There is nothing strange about this, it is simply a voluntary agreement to exchange products and the values of the products are established by the parties involved in the exchange.
Since the wagon maker also makes a deal with the baker, there is also a market value of bread (relative to wagons) established. Perhaps the wagon is sold for 1,500 loaves of bread (the value of one wagon) meaning the bread is valued to 1/1,500 wagon. So we have established the market value of wagons, fish and bread. This does not mean the value is always the same, the market value is set only for the instance in which the single agreement is made. In this instance fish seems to have the value of 1.5 loaves of bread, but we do not know this until the baker and fisherman agree to exchange their products. (Simple Austrian economics, very rational and very intelligible.) The so-called “market value” the State uses for taxation and the multitude of government programs with subsidies or whatever is simply a scam.
Competition
The same is true if there are multiple actors in the marketplace (the market is simply the abstraction of all voluntary exchanges). If there are 1,000 bakers, 1,000 fisherman, and 1,000 wagon makers the market value is set in exactly the same way--in each individual transaction or exchange. But what is now added is the choice of whom to make the exchange with. If there are two fishermen in our example the value of fish would probably be lower since there are more fish available in exchange for roughly the same number of loaves of bread or wagons. Competition is introduced, which in this example increases the volume of fish available in exchange for bread or wagons.
This does not mean the fishermen will do anything to get as many fish as possible in order to buy all wagons and bread on the market. No, every exchange is still the result of voluntary action from both the “seller” and the “buyer,” thus the baker will exchange his bread for fish with the fisherman of his choice. Of course, the number of fish he can get is an important factor, but so is how the baker feels about the fisherman and his products, trust, friendship, politeness etc. Maybe the baker prefers fish caught using float and not nets, or he wishes the fish to be killed painlessly and treated in a good way, or he feels sorry for a poorer fisherman, or whatever. All these factors are of course important, since the choice to trade bread is only the baker’s.
As a matter of fact, since the baker has the option of with whom to exchange, the fishermen will have to outbid each other--the one offering the best deal for the baker (on the baker’s terms) will probably get the bread thus selling his fish. And of course, price is an important factor, but it is not at all the only one. The baker chooses which factors he wishes to consider, and chooses freely with whom to trade. So competition between the fishermen is for the trust of the baker, on the baker’s terms. In competition, the customer is king and the sellers will have to accept his terms.
This is of course not true in today’s society, where the state has a large number of rules on how to make exchanges, how to produce things, how to tell people about them (advertising), how to offer them, and a lot of other things. Such rules of course upsets the “market,” since it is no longer up to the fishermen to agree to the baker’s terms, and the baker’s terms are no longer important for the exchange--only the laws are. This is what happens when coercive measures are introduced to an otherwise voluntary exchange. The laws are of greater importance since they are backed by the guns of government, the baker’s preferences are no longer a priority. All the baker can do is not to trade his bread while the government can fine, outlaw or in other ways punish the fisherman. (Actually, many governments demands the baker to take part in the exchange even if he does not like the terms.)
Money
Imagine another thing in our original example with one baker, one fisherman and one wagon maker: one day the fisherman finds a couple of very beautiful pearls in some of the clams he caught while fishing. He thinks they are very beautiful and puts them in his pockets, anxious to show them to people. Everybody agrees that these pearls are really something special, and people imagine a number of different uses for such beauties. Thus, there is a demand for the pearls. It is not created in terms of producing a demand not before existing in the minds of people, but the new information (that such pearls exist) brings new thoughts to people and lets them reconsider their priority hierarchies. Hence, some people value the pearls very highly and some don’t. It is a newly identified demand, but it is based solely on voluntary preferences. The value of pearls is exactly as with bread, fish, and wagons--it is subjective. (What is objective is that there is an identified value in the pearls--all people seem to agree on this even though they do not agree on what the value is.)
The fisherman notices there are a lot of people wanting such pearls, and thus that there is a market value. He does not know what the market value is (since it has to be established in each individual exchange) but he is sure there is a value. Thus, he tries offering the baker pearls instead of fish in exchange for bread. The baker accepts according to what we established above--he places a higher value in these pearls than in the bread exchanged for them, and the fisherman vice versa. So an exchange takes place and a market value is established for that single exchange.
Since the fisherman exchanged only half of his pearls for bread, now both the baker and the fisherman have pearls. The fisherman makes the same offer to the wagon maker, offering pearls instead of fish as payment for the wagon. The wagon maker accepts since he thinks these pearls are very rare and beautiful. His wife would love them, and since he has heard the fisherman has already gotten bread for the pearls they surely have a market value.
The pearls have hence become a general medium of exchange, since people agree to trade using pearls as bearers of value instead of the direct exchange of products. Any medium of exchange such as this is money, so in our small society everybody is suddenly using money! Why? Because everybody wants to own the pearls (they all place a certain value in owning the pearls), and they choose to use the pearls rather than fish, bread, and wagons when exchanging value for products.
Thus, the next time the wagon maker visits the baker to make an exchange for bread he does not have to go through the trouble of trying to sell the baker a wagon and settling a contract with part-payments. Instead, he brings the pearls he was paid by the fisherman, and pays the number of pearls the baker and wagon maker agree the bread is worth.
The reason they all start using the pearls instead of direct barter is that they all consider them valuable and it is much easier for all of them to trade products for pearls instead of products for products. They are easier to store and handle, and they are scarce--one cannot find large numbers of pearls everywhere. Finding pearls takes time and energy, and thus there is a cost for getting more pearls (money) into the marketplace.
Investment
Now the fisherman can simply sell fish to the others and perhaps save the few pearls he does not need to use directly to get bread and whatever he needs. So he starts leading a little cheaper life in order to save; saving being the main prerequisite for investments. What is now spontaneously invented is a money-based economy with profits--the fisherman is saving a little money from each exchange.
The profits are not coercive or violate the rights of anyone. Any exchanges are still the result of voluntary action between the buyer and seller (they are both better off!), thus a new market price is established every time people agree to make an exchange. And it is still the same as barter, even though it is indirect because everybody taking part in exchanges believes it is easier and better to use pearls.
If the fisherman can save a lot of money it means simply that his costs are far less than what people are prepared to pay for his fish (meaning they place a higher value in the fish than in the pearls they give up for it). And because of this others can easily start fishing in order to get a piece of these profits. There is a rational incentive in catching fish if the fisherman is already making profits--of course other people want to be better off just as the fisherman. So profits cause competition, which in turn cuts profits. The result of this spontaneous balance-making is simply cheaper (and better) products for the consumers.
Anyway, when the fisherman has saved enough money (pearls) he goes to another town to buy a new boat or a net in order to catch more fish so that he can save more money and perhaps buy a house or a more comfortable bed for his wife. This way he can, through saving and investing his profits, increase the supply of fish in the market and thereby supplying more food to hungry people. Since there is more fish available (in the market) people are willing to pay less. If the fisherman tries to charge the same price for the fish he will only find that people will not be able to buy all the fish and it will rot while awaiting buyers. Also, the greater profits per sold fish will create an incentive for people to compete with him. So his profits will not be stable no matter what he does (unless he goes to the government asking for “favors”).
Thus, the market price for fish goes down. The fisherman can probably still save a little money from his business, since people are better off paying less for the fish and there is a small barrier for competitors to enter the market. Buying a boat (or net) is costly, and this produces a possibility for modest profits. Of course, the fisherman can set whatever price he wishes, but setting a too high price will only mean less people will be able to buy the fish.
Also, it creates a greater incentive for other people to get a boat/net and compete. As we have seen above anyone would be able to make an equal deal with a boat maker as the baker and fisherman did before with the wagon maker--i.e. making a contract for exchange of products in order to buy a boat. If there is a big profit in catching and selling fish there is enough for a competitor to cover the costs of such an agreement with the boat maker. So the price of fish will go down either through the fisherman recognizing this fact or through the “threat” of a new actor (competitor) in the market. The threat is of course only directed to the “unnatural” profits of the fisherman, all others are better off with such competition.
Capitalism
Another great thing with this is that there may be people in such a society who have been successful fishermen for many years through which they could have saved some money (pearls). Either they can use the money for covering daily expenses (food, clothes etc) or they can boost the balance-making in the market, thus cutting profits, lowering consumer prices and stream-lining production, through investing. This is what is called capitalism.
Imagine the fisherman gets old and has quite a few pearls in his possession. A new fisherman takes his place, so there are still three actors in the market: a baker, a fisherman, and a wagon maker. The fisherman is very intelligent and finds ways of being very successful in catching fish. He lowers the price of each fish a little bit, but is still able to make a lot of money from his business. He somehow knows there is no one able to buy the boat needed to compete with him, except for the old fisherman (who has no interest in going back to catching fish).
But since the fisherman is making profits there is an incentive for others to catch fish and get part of the profit. The baker’s son sees the opportunity but has no pearls to invest in the boat necessary for such an enterprise. But he knows the old fisherman has quite a few pearls, and one day goes to him offering him a very good deal. He says he wants to buy a boat to earn pearls from catching fish, but does not have enough pearls to make the purchase. So he offers the old fisherman the deal of buying (and owning) the boat, and the baker’s son will pay him a number of pearls every month. This way he will in time pay for the boat, and gives the old fisherman an extra pearl with every payment for the trouble and use of his property.
The old fisherman thinks about it, and finds the idea very attractive. So he agrees to pay for the boat and teaches the baker’s son a few secrets on how to catch very big fish. The baker’s son enters the markets and sells his fish, of course to a slightly lower price than the other fisherman. So the fisherman will have to lower his price not to lose the customers. Thus, the price of fish goes down.
The baker’s son sells the fish to a price covering the costs of the boat, the small profit for the old fisherman, and his personal expenses. Probably the other fisherman sells his fish for about the same price, since he wants to get as much as possible for his fish, but cannot charge a higher price than the competitor (the baker’s son). So, spontaneously and voluntary there is capitalism created in the market.
Also, the old fisherman could agree to a slightly different deal. He could agree to buy the boat for the baker’s son in order to start the enterprise, but with the condition that he gets part of the profits. Perhaps they agree that the old fisherman buys the boat and the baker’s son does all the work, but they split any profits fifty-fifty. If so, they have started a corporation and own 50 % each of the stock. The corporation may hire people to professionally do necessary work, but the owners still require their money back--and maybe a little profit on top. Corporations, the stock-market etc are all inventions of voluntary exchanges and agreements between individuals. But all these things are today thoroughly corrupted by the state and its laws.
Since all these things are directly derived from the simple barter situation and no force is added it cannot be any less ethical or moral than the original situation. If you find this development ethically offensive you are not considering the actions or behavior of the people involved--you only take the results into account. If you want to guarantee a certain result or rules of conduct in a society you will have to rely on the use of force. Relying on force simply cannot be anarchist.
What has really changed between the simple barter trade and this “advanced capitalist” society is that people get cheaper fish while the baker’s son earns a living and the old fisherman gets a profit (this profit is nothing but a small payment to make it worth his while to risk his justly achieved property). Also, the boat maker has sold two more boats. I am not able to find anything offensive in this. There is no force added, and people are better off. The reason this is possible is that prices and values are subjective, therefore each transaction means economic growth--all parties involved are [subjectively] better off.
State Capitalism
What truly is offensive is the so-called market of today, where all these voluntary actions leading to competition, productivity and capitalism have been set aside by the state through coercion, force, and fraud. There is no such thing as a market like the one described above existing today--the voluntary agreements of exchange between free people have been abolished by the use of guns of government. The closest there is is what is usually called the “black” market, but the prices in the black market are much higher than they should be because of the constant threat of state repression. And most of the so-called market instruments causing balance and consumer-power through the voluntary actions of individuals are set aside by the same threat of repression.
Of course, the above example is a simplified abstraction of the marketplace. It is much more advanced than this since there are many, many more actors involved. But the basis is exactly the same. The creation of money, competition etc actually happened in about the same way as in the example. With a little coercion added by the state, of course, which corrupted the results.
So as you probably see, the market is simply people coming together voluntarily to make exchanges, and what that eventually leads to. So what is the difference between this voluntary market with capitalism and anarchism? The answer is so obvious most anarchists do not find it: there is no difference. And there is no essential difference between the simple barter trade and global corporations.
Speculation
It is true that today’s “market” is somewhat oppressive and repressive, but it is not because of the market instruments competition, money or capitalism--it is because they have been corrupted by the state. For example, in such a free market as described here there could be no such thing as the speculation in currencies happening every day these days--making money doing really nothing. The currencies of today have no real value (such as pearls or gold, which are voluntarily accepted by everyone--and need to be voluntarily accepted as means of payment in each single exchange), but are simply pieces of paper and ink backed by the guns of government. What makes people think such “money” has a value is simply because the state forces people to use it. And because there is no identifiable value, people can through simple transactions make more “money” from speculating if the value placed in the “dollar” is really corresponding to the current exchange rate for the “euro.”
With a market not intervened by the state there would be no such fiat currencies. Instead people would trade in pearls, gold or whatever (and receipts of ownership of such; or barter). With such currencies there is no way of making a profit in speculation, since the currencies are simply products as anything else.
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As anarchists often and correctly note, barter trade is inoffensive and it is ethical. Someone believing in natural rights (or any other kind of rights too) would say barter trade does not violate rights and is thus ethical. Some simply state that since barter trade is in full voluntary and does not include any kind of coercive measures it is ethical and just. This is a fully anarchist point of view, all anarchists should be able to support this.
Now, why is barter trade not the same as a market? Imagine two people, let’s say a baker and a fisherman, get together every now and then to voluntarily exchange things. The baker obviously values fish higher than the bread he needs to give up to get it, and the fisherman obviously values the bread higher than the fish he “pays” for it. It is very simple, if either one of them would believe it was not just--and that they were not better (or as good) off as before--they would not voluntarily agree to the exchange. This is how many libertarian or anarcho-capitalist anarchists define the market--voluntary exchanges for one’s own benefit, which means every exchange is for all partaking actors’ benefit.
Imagine there are more people in this society, for instance a wagon maker. Now, this is going to get troublesome since one wagon takes a lot of time and skill to produce, and the wagon maker cannot produce more than a few wagons each year. And, since the baker and fisherman know they cannot make a wagon unless not baking or fishing for a long while, they will agree to exchange a large quantity of bread or fish for a wagon (if they need it). Of course, working for a couple of months making a wagon, and then getting perhaps one thousand loaves of bread or many hundreds of fish is not an attractive exchange. Bread gets bad after a while, and fish will rot. Also, the wagon maker needs something to eat while making the wagon he is about to sell.
It is the same the other way around too: bread and fish will go bad as the baker or fisherman is trying to save enough bread or fish to buy a wagon. So the wagon-maker would have a wagon which he wishes to exchange for fish or bread, and the baker and fisherman would have their bread and fish while being interested in trading it for a wagon. But the exchange would never happen, since bread and fish easily goes bad when saved. So what would happen in this little society?
It is obvious the three people would come to an agreement since it is in their mutual interest to make this exchange. Maybe they agree on paying the wagon maker a couple of loaves of bread or some fish every day for a couple of months, and will in return get the wagon when it is finished. This means they have avoided the problem with bread or fish getting bad, and they all benefit from this scheme since nobody needs to keep a lot of bread/fish while awaiting the right quantity. There is nothing wrong with this, right? They are still into barter trade, but have agreed on paying for the thing of greater value in smaller portions. With this solution, they have through voluntary action invented the contract, since they have an agreement for exchange even thought the exchange is not immediate. The agreement therefore causes an ongoing interdependence throughout the time of the contract, but it is still barter and it is still 100 % voluntary.
Also, they have invented a financial instrument since there is value in the contract. The value arises simply because the baker and fisherman offer their products before they get anything in return (which is the basis for this contract), and will as time goes by have a bigger claim to the property (wagon) of the wagon maker. And, of course, the wagon maker will be in debt as the baker and fisherman pays him bread and fish while he has not yet given them anything. The difference is the current value of the contract, since--in this case--the baker and fisherman relies on the contract to get value in the future.
It is still barter, so there is no conflict and it is not offensive; it is still as ethical as we agree barter is. We are still relying totally on voluntary exchange for the mutual benefit of whomever is involved (in this case: the baker, the fisherman, and the wagon maker).
Now, maybe there is a storm and the fisherman’s boat is thrown ashore and sinks to the bottom of the sea. The fisherman cannot get any more fish (or he cannot get the quantity he expected) and would need to get a new boat. According to the contract he will have to continue paying a number of fish every day to the wagon maker even though the wagon maker in real terms is in debt to the fisherman. What can he do?
He can of course go to the wagon maker and ask him to release him from his obligation stated in the contract through cancelling it. Maybe the wagon maker will agree to this, but it would mean he has to pay the fisherman back the number of fish he has already paid. But the wagon maker has probably already started working on the fisherman’s wagon, which means he has really “paid” a part of the value of the contract even though it is not yet realized for the fisherman. Maybe he cannot afford to let the fisherman get his fish back because he ate them all and cannot trade for new ones. Now we have a problem.
Either the wagon maker could give the fisherman whatever he has achieved in making the wagon, perhaps a wheel and a blueprint (which are not really of value to the fisherman, who cannot continue the work), or he can simply demand the fisherman continues giving him fish as was already agreed. Or, he could offer to make yet another agreement saying perhaps that the contract is off and that the fisherman will have a few fish back, but that he will keep 10 fish because he now cannot get food the following days. Since he expected to get fish every day while working on the wagon he now demands some of his costs are covered by the fisherman--this is not hard to imagine.
As we can see, the contract is here a financial instrument since there is value in the expected completion of whatever is stated in the contract. The agreement in itself means a promise to make a future payment, thus the contract is simply an agreement to make such an exchange as we have covered above--but it is not immediate.
The contract is to some extent also to be considered as speculation, since the fisherman promises to give the wagon maker a number of fish every day--but while signing the contract he does not have the fish. He simply expects to have the fish when he is supposed to deliver it to the wagon maker. He believes he will be able to catch fish every day to give to the wagon maker, so he takes this chance. But there is, as we can see, a certain amount of risk involved.
The wagon maker and the fisherman most likely think this is quite troublesome, exchanging fish for wagons. The difference in value is too great, thereby causing a lot of problems. Of course, the value they identify in fish and wagons is totally subject to their wants and desires. There is no real (or rather: objective) value in the wagon nor in the fish. To the wagon maker the wagon is worth approximately the time and effort it takes him to produce the wagon, to the fisherman the wagon is worth as much as it lightens his burden or what he expects to gain in whatever he would like to use it for. The same is true with the fish: the fisherman values the fish to the time and effort he puts in catching the fish, while the wagon maker values the fish according to his needs or desires.
The values of the things is thus not objective, it is subjective and individual. What happens when these two people get together to exchange a wagon for a number of fish is the establishment of market value of both the fish and the wagon. The market value in this case is simply whatever is agreed between seller and buyer, e.g. a wagon is worth 1,000 fish and a fish is worth 1/1,000 wagon. There is nothing strange about this, it is simply a voluntary agreement to exchange products and the values of the products are established by the parties involved in the exchange.
Since the wagon maker also makes a deal with the baker, there is also a market value of bread (relative to wagons) established. Perhaps the wagon is sold for 1,500 loaves of bread (the value of one wagon) meaning the bread is valued to 1/1,500 wagon. So we have established the market value of wagons, fish and bread. This does not mean the value is always the same, the market value is set only for the instance in which the single agreement is made. In this instance fish seems to have the value of 1.5 loaves of bread, but we do not know this until the baker and fisherman agree to exchange their products. (Simple Austrian economics, very rational and very intelligible.) The so-called “market value” the State uses for taxation and the multitude of government programs with subsidies or whatever is simply a scam.
Competition
The same is true if there are multiple actors in the marketplace (the market is simply the abstraction of all voluntary exchanges). If there are 1,000 bakers, 1,000 fisherman, and 1,000 wagon makers the market value is set in exactly the same way--in each individual transaction or exchange. But what is now added is the choice of whom to make the exchange with. If there are two fishermen in our example the value of fish would probably be lower since there are more fish available in exchange for roughly the same number of loaves of bread or wagons. Competition is introduced, which in this example increases the volume of fish available in exchange for bread or wagons.
This does not mean the fishermen will do anything to get as many fish as possible in order to buy all wagons and bread on the market. No, every exchange is still the result of voluntary action from both the “seller” and the “buyer,” thus the baker will exchange his bread for fish with the fisherman of his choice. Of course, the number of fish he can get is an important factor, but so is how the baker feels about the fisherman and his products, trust, friendship, politeness etc. Maybe the baker prefers fish caught using float and not nets, or he wishes the fish to be killed painlessly and treated in a good way, or he feels sorry for a poorer fisherman, or whatever. All these factors are of course important, since the choice to trade bread is only the baker’s.
As a matter of fact, since the baker has the option of with whom to exchange, the fishermen will have to outbid each other--the one offering the best deal for the baker (on the baker’s terms) will probably get the bread thus selling his fish. And of course, price is an important factor, but it is not at all the only one. The baker chooses which factors he wishes to consider, and chooses freely with whom to trade. So competition between the fishermen is for the trust of the baker, on the baker’s terms. In competition, the customer is king and the sellers will have to accept his terms.
This is of course not true in today’s society, where the state has a large number of rules on how to make exchanges, how to produce things, how to tell people about them (advertising), how to offer them, and a lot of other things. Such rules of course upsets the “market,” since it is no longer up to the fishermen to agree to the baker’s terms, and the baker’s terms are no longer important for the exchange--only the laws are. This is what happens when coercive measures are introduced to an otherwise voluntary exchange. The laws are of greater importance since they are backed by the guns of government, the baker’s preferences are no longer a priority. All the baker can do is not to trade his bread while the government can fine, outlaw or in other ways punish the fisherman. (Actually, many governments demands the baker to take part in the exchange even if he does not like the terms.)
Money
Imagine another thing in our original example with one baker, one fisherman and one wagon maker: one day the fisherman finds a couple of very beautiful pearls in some of the clams he caught while fishing. He thinks they are very beautiful and puts them in his pockets, anxious to show them to people. Everybody agrees that these pearls are really something special, and people imagine a number of different uses for such beauties. Thus, there is a demand for the pearls. It is not created in terms of producing a demand not before existing in the minds of people, but the new information (that such pearls exist) brings new thoughts to people and lets them reconsider their priority hierarchies. Hence, some people value the pearls very highly and some don’t. It is a newly identified demand, but it is based solely on voluntary preferences. The value of pearls is exactly as with bread, fish, and wagons--it is subjective. (What is objective is that there is an identified value in the pearls--all people seem to agree on this even though they do not agree on what the value is.)
The fisherman notices there are a lot of people wanting such pearls, and thus that there is a market value. He does not know what the market value is (since it has to be established in each individual exchange) but he is sure there is a value. Thus, he tries offering the baker pearls instead of fish in exchange for bread. The baker accepts according to what we established above--he places a higher value in these pearls than in the bread exchanged for them, and the fisherman vice versa. So an exchange takes place and a market value is established for that single exchange.
Since the fisherman exchanged only half of his pearls for bread, now both the baker and the fisherman have pearls. The fisherman makes the same offer to the wagon maker, offering pearls instead of fish as payment for the wagon. The wagon maker accepts since he thinks these pearls are very rare and beautiful. His wife would love them, and since he has heard the fisherman has already gotten bread for the pearls they surely have a market value.
The pearls have hence become a general medium of exchange, since people agree to trade using pearls as bearers of value instead of the direct exchange of products. Any medium of exchange such as this is money, so in our small society everybody is suddenly using money! Why? Because everybody wants to own the pearls (they all place a certain value in owning the pearls), and they choose to use the pearls rather than fish, bread, and wagons when exchanging value for products.
Thus, the next time the wagon maker visits the baker to make an exchange for bread he does not have to go through the trouble of trying to sell the baker a wagon and settling a contract with part-payments. Instead, he brings the pearls he was paid by the fisherman, and pays the number of pearls the baker and wagon maker agree the bread is worth.
The reason they all start using the pearls instead of direct barter is that they all consider them valuable and it is much easier for all of them to trade products for pearls instead of products for products. They are easier to store and handle, and they are scarce--one cannot find large numbers of pearls everywhere. Finding pearls takes time and energy, and thus there is a cost for getting more pearls (money) into the marketplace.
Investment
Now the fisherman can simply sell fish to the others and perhaps save the few pearls he does not need to use directly to get bread and whatever he needs. So he starts leading a little cheaper life in order to save; saving being the main prerequisite for investments. What is now spontaneously invented is a money-based economy with profits--the fisherman is saving a little money from each exchange.
The profits are not coercive or violate the rights of anyone. Any exchanges are still the result of voluntary action between the buyer and seller (they are both better off!), thus a new market price is established every time people agree to make an exchange. And it is still the same as barter, even though it is indirect because everybody taking part in exchanges believes it is easier and better to use pearls.
If the fisherman can save a lot of money it means simply that his costs are far less than what people are prepared to pay for his fish (meaning they place a higher value in the fish than in the pearls they give up for it). And because of this others can easily start fishing in order to get a piece of these profits. There is a rational incentive in catching fish if the fisherman is already making profits--of course other people want to be better off just as the fisherman. So profits cause competition, which in turn cuts profits. The result of this spontaneous balance-making is simply cheaper (and better) products for the consumers.
Anyway, when the fisherman has saved enough money (pearls) he goes to another town to buy a new boat or a net in order to catch more fish so that he can save more money and perhaps buy a house or a more comfortable bed for his wife. This way he can, through saving and investing his profits, increase the supply of fish in the market and thereby supplying more food to hungry people. Since there is more fish available (in the market) people are willing to pay less. If the fisherman tries to charge the same price for the fish he will only find that people will not be able to buy all the fish and it will rot while awaiting buyers. Also, the greater profits per sold fish will create an incentive for people to compete with him. So his profits will not be stable no matter what he does (unless he goes to the government asking for “favors”).
Thus, the market price for fish goes down. The fisherman can probably still save a little money from his business, since people are better off paying less for the fish and there is a small barrier for competitors to enter the market. Buying a boat (or net) is costly, and this produces a possibility for modest profits. Of course, the fisherman can set whatever price he wishes, but setting a too high price will only mean less people will be able to buy the fish.
Also, it creates a greater incentive for other people to get a boat/net and compete. As we have seen above anyone would be able to make an equal deal with a boat maker as the baker and fisherman did before with the wagon maker--i.e. making a contract for exchange of products in order to buy a boat. If there is a big profit in catching and selling fish there is enough for a competitor to cover the costs of such an agreement with the boat maker. So the price of fish will go down either through the fisherman recognizing this fact or through the “threat” of a new actor (competitor) in the market. The threat is of course only directed to the “unnatural” profits of the fisherman, all others are better off with such competition.
Capitalism
Another great thing with this is that there may be people in such a society who have been successful fishermen for many years through which they could have saved some money (pearls). Either they can use the money for covering daily expenses (food, clothes etc) or they can boost the balance-making in the market, thus cutting profits, lowering consumer prices and stream-lining production, through investing. This is what is called capitalism.
Imagine the fisherman gets old and has quite a few pearls in his possession. A new fisherman takes his place, so there are still three actors in the market: a baker, a fisherman, and a wagon maker. The fisherman is very intelligent and finds ways of being very successful in catching fish. He lowers the price of each fish a little bit, but is still able to make a lot of money from his business. He somehow knows there is no one able to buy the boat needed to compete with him, except for the old fisherman (who has no interest in going back to catching fish).
But since the fisherman is making profits there is an incentive for others to catch fish and get part of the profit. The baker’s son sees the opportunity but has no pearls to invest in the boat necessary for such an enterprise. But he knows the old fisherman has quite a few pearls, and one day goes to him offering him a very good deal. He says he wants to buy a boat to earn pearls from catching fish, but does not have enough pearls to make the purchase. So he offers the old fisherman the deal of buying (and owning) the boat, and the baker’s son will pay him a number of pearls every month. This way he will in time pay for the boat, and gives the old fisherman an extra pearl with every payment for the trouble and use of his property.
The old fisherman thinks about it, and finds the idea very attractive. So he agrees to pay for the boat and teaches the baker’s son a few secrets on how to catch very big fish. The baker’s son enters the markets and sells his fish, of course to a slightly lower price than the other fisherman. So the fisherman will have to lower his price not to lose the customers. Thus, the price of fish goes down.
The baker’s son sells the fish to a price covering the costs of the boat, the small profit for the old fisherman, and his personal expenses. Probably the other fisherman sells his fish for about the same price, since he wants to get as much as possible for his fish, but cannot charge a higher price than the competitor (the baker’s son). So, spontaneously and voluntary there is capitalism created in the market.
Also, the old fisherman could agree to a slightly different deal. He could agree to buy the boat for the baker’s son in order to start the enterprise, but with the condition that he gets part of the profits. Perhaps they agree that the old fisherman buys the boat and the baker’s son does all the work, but they split any profits fifty-fifty. If so, they have started a corporation and own 50 % each of the stock. The corporation may hire people to professionally do necessary work, but the owners still require their money back--and maybe a little profit on top. Corporations, the stock-market etc are all inventions of voluntary exchanges and agreements between individuals. But all these things are today thoroughly corrupted by the state and its laws.
Since all these things are directly derived from the simple barter situation and no force is added it cannot be any less ethical or moral than the original situation. If you find this development ethically offensive you are not considering the actions or behavior of the people involved--you only take the results into account. If you want to guarantee a certain result or rules of conduct in a society you will have to rely on the use of force. Relying on force simply cannot be anarchist.
What has really changed between the simple barter trade and this “advanced capitalist” society is that people get cheaper fish while the baker’s son earns a living and the old fisherman gets a profit (this profit is nothing but a small payment to make it worth his while to risk his justly achieved property). Also, the boat maker has sold two more boats. I am not able to find anything offensive in this. There is no force added, and people are better off. The reason this is possible is that prices and values are subjective, therefore each transaction means economic growth--all parties involved are [subjectively] better off.
State Capitalism
What truly is offensive is the so-called market of today, where all these voluntary actions leading to competition, productivity and capitalism have been set aside by the state through coercion, force, and fraud. There is no such thing as a market like the one described above existing today--the voluntary agreements of exchange between free people have been abolished by the use of guns of government. The closest there is is what is usually called the “black” market, but the prices in the black market are much higher than they should be because of the constant threat of state repression. And most of the so-called market instruments causing balance and consumer-power through the voluntary actions of individuals are set aside by the same threat of repression.
Of course, the above example is a simplified abstraction of the marketplace. It is much more advanced than this since there are many, many more actors involved. But the basis is exactly the same. The creation of money, competition etc actually happened in about the same way as in the example. With a little coercion added by the state, of course, which corrupted the results.
So as you probably see, the market is simply people coming together voluntarily to make exchanges, and what that eventually leads to. So what is the difference between this voluntary market with capitalism and anarchism? The answer is so obvious most anarchists do not find it: there is no difference. And there is no essential difference between the simple barter trade and global corporations.
Speculation
It is true that today’s “market” is somewhat oppressive and repressive, but it is not because of the market instruments competition, money or capitalism--it is because they have been corrupted by the state. For example, in such a free market as described here there could be no such thing as the speculation in currencies happening every day these days--making money doing really nothing. The currencies of today have no real value (such as pearls or gold, which are voluntarily accepted by everyone--and need to be voluntarily accepted as means of payment in each single exchange), but are simply pieces of paper and ink backed by the guns of government. What makes people think such “money” has a value is simply because the state forces people to use it. And because there is no identifiable value, people can through simple transactions make more “money” from speculating if the value placed in the “dollar” is really corresponding to the current exchange rate for the “euro.”
With a market not intervened by the state there would be no such fiat currencies. Instead people would trade in pearls, gold or whatever (and receipts of ownership of such; or barter). With such currencies there is no way of making a profit in speculation, since the currencies are simply products as anything else.
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Gold & Silver: The Smack Down Is Over
US Dollar Chart
Dollar Commentary
Gold Analysis:
The SuperForce Proprietary SURGE index SIGNALS:
25 Surge Index Buy or 25 Surge Index Sell: Solid Power.
50 Surge Index Buy or 50 Surge Index Sell: Stronger Power.
75 Surge Index Buy or 75 Surge Index Sell: Maximum Power.
100 Surge Index Buy or 100 Surge Index Sell: "Over The Top" Power.
Stay alert for our surge signals, sent by email to subscribers, for both the daily charts on Super Force Signals at www.superforcesignals.com and for the 60 minute charts at www.superforce60.com
About Super Force Signals:
Our Surge Index Signals are created thru our proprietary blend of the highest quality technical analysis and many years of successful business building. We are two business owners with excellent synergy. We understand risk and reward. Our subscribers are generally successfully business owners, people like yourself with speculative funds, looking for serious management of your risk and reward in the market.
Frank Johnson: Executive Editor, Macro Risk Manager.
Morris Hubbartt: Chief Market Analyst, Trading Risk Specialist.
website: www.superforcesignals.com
email: trading@superforcesignals.com
email: trading@superforce60.com
Super Force Signals
422 Richards Street, Suite #300
Vancouver, BC V6B 2Z4
Canada
###
Dollar Commentary
- I am projecting that the USD falls to the 65 area on the above chart, likely in the Sept-Nov timeframe. Gold has started a huge devaluation of the dollar. The reason gold has been hitting highs is because of a serious loss of confidence in the world’s fiat currency system, one that is gaining momentum by the day.
- I see no reason to alter my target of 65. Recent economic data has caused one economist after another to steadily trim their growth estimates. The odds of a double-dip recession, or worse, are rising.
- Debt remains front and center, and committees of congress will try to work out an agreement. The problem is congress knows they need to diet, and they promise to cut back on their calorie intake after every “next election”. The situation is very serious, and a lack of credibility on this matter could create a confidence disaster. Gold’s skyrocketing price is offering politicians a warning that their actions are failing badly.
- One of the most important lead indicators for the dollar and the economy is the bank stocks. Bank of America is the largest bank in the United States. This chart looks like the company is going to be delisted. It is an ominous sign for the banking industry, and the dollar.
- Some investors bought Bank of America on the news that Warren Buffett bought the stock. You need to ask yourself what kind of deal he may have really gotten, versus the deal you might be getting, if you buy the stock in the open market.
- Also, the “breakout” exhibited by the stock on the supposedly great news that Bank of America is in a desperate situation… is already a technical failure! I expect the dollar chart to mimic what you are seeing now on the price charts of the nation’s largest financial institutions.
Gold Analysis:
- Supply and demand are like truth detectors. Fresh gold supplies are mined and brought to market, but the rate it occurs at is physically limited. Compare the growth in the ability of miners to supply gold to the refiners with the ability of a central bank to print paper currency and decide which item holds the real value for you.
- The public is really just barely aware of the fact that fiat currencies are on fire. There are few places for people to run to outside of the fiat currency system. Gold offers liquidity and is fairly portable. What is most important right now is that gold has burst through the upper window of the previous uptrend. It has entered what appears to be, technically, a parabolic superhighway.
- The gold overshoot of the up channel has been truly spectacular. It took place around Aug 8th, and I then projected that gold would enter into what I termed, “the smack down zone”.
- This chart is a magnified view of the price action I projected would occur at the entrance to the superhighway price channel. This price correction could be your last opportunity to buy before gold goes to much higher prices, and does so at a much faster rate of rise.
- I continue to look at the top of the previous upper channel, which is approximately $1700, for the end of the correction target zone. This hard two-day correction feels like a clean-out type of move; a sort of vicious good-bye to gold’s price chasers. I have urged my people to add to gold positions this week, because the smack down zone is also likely your “last chance to buy zone”!
- Gold stocks are setting up for a major move! One of the most bullish technical patterns in technical analysis is the inverse head and shoulders pattern. That is the pattern you are looking at on this GDX chart. A secondary H&S pattern has also formed in the last three weeks, giving this technical situation even more firepower!
- Gold stocks have started moving with powerful volume. The H&S patterns project GDX will rise to $70, and I believe that number is simply a stepping stone target. Take a hard look at the next chart, and you will see why I believe a rise to GDX $70 is only the beginning of an immense move in gold stocks.
- Gold continues to be a stellar performer in this debt crisis. Venezuela appears to be intent on nationalizing their mines, which may take future gold out of an already tight international market. The country is also moving hundreds of tons of gold out of Europe, which seems to have put additional pressure on the physical gold market.
- It is wise to prepare for a day when a shortage of gold becomes a real issue for investors. I’m referring to physical gold. Gold stocks have severely disappointed investors for many years now, in this bull market. That is about to change.
- My technical chart work continues to indicate that the smack down zone is your last buying opportunity, before an enormous move higher occurs in bullion, and gold stocks! The head & shoulders pattern on gold stocks is a powerful price activation mechanism. You are very likely to see gold stocks move well above $70, basis GDX, and stay there for years to come.
- I brought this situation to your attention several weeks ago when GDX was starting to outperform the S&P. I want to give you an update today. GDX is almost blowing the doors off the general stock market now, in terms of relative performance!
- My internal indicators point to a continuing and even expanding superior performance for gold stocks against the stock market! Gold stocks are drastically undervalued and are poised to begin an almost immediate and enormous catch up phase, relative to gold bullion. On the superhighway, I fully expect the gold stock “racecars” to actually pass gold bullion in terms of absolute performance.
- This chart is a snapshot of the power of fuel cell volume. My technical volume analysis indicates the picture for gold junior stocks is stunningly bullish. Note that the fuel cell volume day has been followed by soft volume pullbacks. This is picture-perfect chart action for the bulls!
- Silver offers an absolutely enormous opportunity, and price has held in very strong, in the face of a powerful MACD sell signal. In coming years, I’m looking for massive gains. Your strategy should be to buy the physical metal on significant price weakness.
- I issued a new buy signal on silver into the carnage that occurred on Wednesday. Physical silver is my second largest holding, second only to gold. I strongly advocate you hold a large core silver position!
| Aug 26, 2011 Super Force Signals special offer for 321Gold Readers: Send an email to trading@superforcesignals.com and I'll send you 3 of my next Super Force Surge Signals, as I send them to paid subscribers, to you for free. Thank-you! |
The SuperForce Proprietary SURGE index SIGNALS:
25 Surge Index Buy or 25 Surge Index Sell: Solid Power.
50 Surge Index Buy or 50 Surge Index Sell: Stronger Power.
75 Surge Index Buy or 75 Surge Index Sell: Maximum Power.
100 Surge Index Buy or 100 Surge Index Sell: "Over The Top" Power.
Stay alert for our surge signals, sent by email to subscribers, for both the daily charts on Super Force Signals at www.superforcesignals.com and for the 60 minute charts at www.superforce60.com
About Super Force Signals:
Our Surge Index Signals are created thru our proprietary blend of the highest quality technical analysis and many years of successful business building. We are two business owners with excellent synergy. We understand risk and reward. Our subscribers are generally successfully business owners, people like yourself with speculative funds, looking for serious management of your risk and reward in the market.
Frank Johnson: Executive Editor, Macro Risk Manager.
Morris Hubbartt: Chief Market Analyst, Trading Risk Specialist.
website: www.superforcesignals.com
email: trading@superforcesignals.com
email: trading@superforce60.com
Super Force Signals
422 Richards Street, Suite #300
Vancouver, BC V6B 2Z4
Canada
###
Take Up the White Man’s Burden
"Take up the White Man's burden –
Send forth the best ye breed –
Go, bind your sons to exile
To serve your captives' need;
To wait, in heavy harness,
On fluttered folk and wild –
Your new-caught sullen peoples,
Half devil and half child."
~ Rudyard Kipling 1899
Watching rebel gunmen rampage through Col. Muammar Gadaffi’s Bab al-Aziziya compound – once Tripoli’s Forbidden City of Tripoli – was a strange experience for me.
I spent an evening there with Gadaffi in 1987, a year after it was bombed by US warplanes.
Libya’s "Brother Leader" talked about the Mideast, Palestine, North Africa. He led me by the hand through his ruined private quarters, still reeking of fire and smoke, and showed me the bed in which an American 1,000 kilo laser-guided bomb killed his two-year old adopted daughter.
We sat in his gaily colored Bedouin tent, talking into the night. He opened up to me about his love for fancy dress and beamed happily when I told him, tongue in cheek, how attractive he was to western women.
Fast forward to August, 2011. CIA teams, British SAS and SBC special forces, and French Foreign Legionnaires and Marine Commandos are searching for Muammar Gadaffi.
Western led Libyan forces are closing in on Garaffi’s birthplace, Sirte. There are growing rumors Gadaffi and his family fled last week to Algeria, whose brutal, western-backed military regime has long been allied to the Libyan leader.
Few will miss him. Gadaffi was a blight on Libya and an embarrassment to the Arabs.
But were I western intelligence, the man I would want in my interrogation cells is Gadaffi’s elusive brother-in-law, Abdullah Senoussi, the longtime head of Libyan intelligence and alter ego of Gadaffi.
While awaiting my interview with Gadaffi, I was awakened from sleep in my hotel one night at 1030 by pounding on the door. My heart went into overdrive. I was certain I was being arrested by the secret police. One of them had accused me earlier in the day of being a CIA agent.
I was hustled off in a car. Instead of prison, I was taken to a well-appointed villa, ushered into a salon, and introduced to a "Mr. Senoussi," who told me he was Libya’s health minister and invited to dine with him desert-style off a large copper tray on the floor.
Senoussi, whom I immediately identified as Libya’s spy chief and one of the key "people of the tent" surrounding Gadaffi, chatted away with me about the Mideast, Africa, and my life. He was handsome, elegant, well-educated and very charming.
Senoussi, who hails from Libya’s royal family, was also indicted for mounting an assassination attempt against Saudi Crown Prince Abdullah in 2003.
In 1994, French magistrates indicted Senoussi for masterminding the 1989 bombing of a UTA airliner over Niger. He was tried and convicted in absentia.
It seems certain agents of France’s DGSE intelligence agency, a notoriously rough outfit, are hunting down Senoussi – if he is unwise enough to remain in Libya.
The files of Libya’s intelligence and security agencies will be a primary target for western special forces and intelligence agents. Seizing them is vital since they show the deep level of western cooperation with the now demonized Gadaffi. Like another former US ally, Saddam Hussein, he must be silenced.
Meanwhile, Libya is literally turning into a gold rush as the big western oil firms pile into Libya and pay court to the new government in Tripoli, the National Transitional Council. Police units and troops from Britain, France and Italy may soon follow – all, naturally, as part of the west’s new "humanitarian intervention" strategy that has replaced "counter-terrorism." Libya is in semi-chaos and its economy devastated by six months of conflict. The food distribution system has broken down. Thousands of heavily armed "rambos" make their own law. There are barely any state institutions aside from the national oil company and central bank. The police have evaporated.
As a modest historian, I am always delighted when history draws striking parallels. We now see the fascinating spectacle of those old colonial powers, Britain, France, and Italy, starting to move back into their former overseas possessions while the United States looks on approvingly.
Britain ruled Libya until a young colonel named Muammar Gadaffi overthrew the doddering old British puppet, King Idris. The US lost one of its largest bombers bases at Libya’s Wheelus Field. Neither nation was to forgive Gadaffi.
Imperial Britain had seized Libya from Italy’s fascist regime in 1943. Italy colonized Libya after tearing it away from the crumbling Ottoman Empire. Italy used concentration camps and poison gas to terrorize Libyans into submission.
France, whose colonial empire included neighboring Tunisia, Algeria, Morocco, Chad, and Niger, long competed with Italy and Spain for regional domination. Mussolini’s Fascist regime pressed claims to Tunisia, Corsica, Nice and Cannes.
An obscure colonial border dispute over Chad’s Aouzou Strip dating from the 1920’s between France and Italy led to a nasty little Franco-Libyan border war there in 1987.
French Foreign Legionnaires in jeeps, disguised as Chadian nomads, drove the wretched Libyan army from Aouzou in what became known as the "Toyota War." Disguised French special forces and Legionnaires, as well as Britain’s SAS, just used the same theatrical tactics in Libya. The real fighting against Gadaffi’s troops was done by NATO air, ground and naval forces. All those mobs of gun-waving Libyans were merely extras.
The big question now is which foreign power will dominate Libya. The United States, which has waged this little war from well offstage? Italy, which gets most of its oil from Libya? France, where President Sarkozy has been hinting at a Mediterranean union – bien sure, under French tutelage?
Oil is a potent aphrodisiac. Libya has vast reserves of premium, low-sulphur oil and gas, and a hundred-year supply of ancient artesian water. Energy-rich Libya will become an important market for European consumer products and industrial exports, as well as a huge major supplier of investment funds from its estimated $50 billion worth of annual oil exports.
There are more prizes to be had: Libya’s gold reserves, estimated at $4-5 billion; and its nearly $100 billion of foreign deposits and investments.
One thing is increasingly clear: oil and gas are simply too important to be left in the hands of Arabs, Iranians and Central Asians.
Gadaffi warned a few months ago that if he was overthrown, the west would grab Libya’s oil.
Send forth the best ye breed –
Go, bind your sons to exile
To serve your captives' need;
To wait, in heavy harness,
On fluttered folk and wild –
Your new-caught sullen peoples,
Half devil and half child."
~ Rudyard Kipling 1899
Watching rebel gunmen rampage through Col. Muammar Gadaffi’s Bab al-Aziziya compound – once Tripoli’s Forbidden City of Tripoli – was a strange experience for me.
I spent an evening there with Gadaffi in 1987, a year after it was bombed by US warplanes.
Libya’s "Brother Leader" talked about the Mideast, Palestine, North Africa. He led me by the hand through his ruined private quarters, still reeking of fire and smoke, and showed me the bed in which an American 1,000 kilo laser-guided bomb killed his two-year old adopted daughter.
We sat in his gaily colored Bedouin tent, talking into the night. He opened up to me about his love for fancy dress and beamed happily when I told him, tongue in cheek, how attractive he was to western women.
Fast forward to August, 2011. CIA teams, British SAS and SBC special forces, and French Foreign Legionnaires and Marine Commandos are searching for Muammar Gadaffi.
Western led Libyan forces are closing in on Garaffi’s birthplace, Sirte. There are growing rumors Gadaffi and his family fled last week to Algeria, whose brutal, western-backed military regime has long been allied to the Libyan leader.
Few will miss him. Gadaffi was a blight on Libya and an embarrassment to the Arabs.
But were I western intelligence, the man I would want in my interrogation cells is Gadaffi’s elusive brother-in-law, Abdullah Senoussi, the longtime head of Libyan intelligence and alter ego of Gadaffi.
While awaiting my interview with Gadaffi, I was awakened from sleep in my hotel one night at 1030 by pounding on the door. My heart went into overdrive. I was certain I was being arrested by the secret police. One of them had accused me earlier in the day of being a CIA agent.
I was hustled off in a car. Instead of prison, I was taken to a well-appointed villa, ushered into a salon, and introduced to a "Mr. Senoussi," who told me he was Libya’s health minister and invited to dine with him desert-style off a large copper tray on the floor.
Senoussi, whom I immediately identified as Libya’s spy chief and one of the key "people of the tent" surrounding Gadaffi, chatted away with me about the Mideast, Africa, and my life. He was handsome, elegant, well-educated and very charming.
Senoussi, who hails from Libya’s royal family, was also indicted for mounting an assassination attempt against Saudi Crown Prince Abdullah in 2003.
In 1994, French magistrates indicted Senoussi for masterminding the 1989 bombing of a UTA airliner over Niger. He was tried and convicted in absentia.
It seems certain agents of France’s DGSE intelligence agency, a notoriously rough outfit, are hunting down Senoussi – if he is unwise enough to remain in Libya.
The files of Libya’s intelligence and security agencies will be a primary target for western special forces and intelligence agents. Seizing them is vital since they show the deep level of western cooperation with the now demonized Gadaffi. Like another former US ally, Saddam Hussein, he must be silenced.
Meanwhile, Libya is literally turning into a gold rush as the big western oil firms pile into Libya and pay court to the new government in Tripoli, the National Transitional Council. Police units and troops from Britain, France and Italy may soon follow – all, naturally, as part of the west’s new "humanitarian intervention" strategy that has replaced "counter-terrorism." Libya is in semi-chaos and its economy devastated by six months of conflict. The food distribution system has broken down. Thousands of heavily armed "rambos" make their own law. There are barely any state institutions aside from the national oil company and central bank. The police have evaporated.
As a modest historian, I am always delighted when history draws striking parallels. We now see the fascinating spectacle of those old colonial powers, Britain, France, and Italy, starting to move back into their former overseas possessions while the United States looks on approvingly.
Britain ruled Libya until a young colonel named Muammar Gadaffi overthrew the doddering old British puppet, King Idris. The US lost one of its largest bombers bases at Libya’s Wheelus Field. Neither nation was to forgive Gadaffi.
Imperial Britain had seized Libya from Italy’s fascist regime in 1943. Italy colonized Libya after tearing it away from the crumbling Ottoman Empire. Italy used concentration camps and poison gas to terrorize Libyans into submission.
France, whose colonial empire included neighboring Tunisia, Algeria, Morocco, Chad, and Niger, long competed with Italy and Spain for regional domination. Mussolini’s Fascist regime pressed claims to Tunisia, Corsica, Nice and Cannes.
An obscure colonial border dispute over Chad’s Aouzou Strip dating from the 1920’s between France and Italy led to a nasty little Franco-Libyan border war there in 1987.
French Foreign Legionnaires in jeeps, disguised as Chadian nomads, drove the wretched Libyan army from Aouzou in what became known as the "Toyota War." Disguised French special forces and Legionnaires, as well as Britain’s SAS, just used the same theatrical tactics in Libya. The real fighting against Gadaffi’s troops was done by NATO air, ground and naval forces. All those mobs of gun-waving Libyans were merely extras.
The big question now is which foreign power will dominate Libya. The United States, which has waged this little war from well offstage? Italy, which gets most of its oil from Libya? France, where President Sarkozy has been hinting at a Mediterranean union – bien sure, under French tutelage?
Oil is a potent aphrodisiac. Libya has vast reserves of premium, low-sulphur oil and gas, and a hundred-year supply of ancient artesian water. Energy-rich Libya will become an important market for European consumer products and industrial exports, as well as a huge major supplier of investment funds from its estimated $50 billion worth of annual oil exports.
There are more prizes to be had: Libya’s gold reserves, estimated at $4-5 billion; and its nearly $100 billion of foreign deposits and investments. One thing is increasingly clear: oil and gas are simply too important to be left in the hands of Arabs, Iranians and Central Asians.
Gadaffi warned a few months ago that if he was overthrown, the west would grab Libya’s oil.
August 30, 2011
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