Saturday, February 12, 2011

Egypt: Controlled Chaos or True Liberation?

I don’t know about you, but I’m watching all this unfold in Egypt with a kind of nervous scepticism. While many are saying this is the beginning of an uprising chain-reaction that will bring in new life and hope to other oppressed nations.

I hope so, but I have my doubts.

I hate to rain on anyone’s parade, especially regarding hope. I do have hope for humanity and we are waking up at an astounding rate. That will continue whether it manifests in physical uprisings like Egypt or not.

It’s just that people are so easily fooled.

The Illuminati news organ AP (Associated Propaganda) is already pushing global puppet ElBaradei to the forefront again in the very first announcement of Mubarak handing power over to the military:

“In these grave circumstances that the country is passing through, President Hosni Mubarak has decided to leave his position as president of the republic,” a grim-looking Suleiman said. “He has mandated the Armed Forces Supreme Council to run the state. God is our protector and succor.”

Nobel Peace laureate Mohammed ElBaradei, whose young suporters were among the organizers of the protest movement, told The Associated Press, “This is the greatest day of my life.”

“The country has been liberated after decades of repression,” he said adding that he expects a “beautiful” transition of power. (source)

And that’s how it works.

It all gets co-opted, whatever percentage of the uprising is genuine–and I agree it’s a lot. Suddenly the protesters are the good guys as the press “guides” you into the desired outcome by staged interviews with selected people giving you “the wonderful liberating solution”.

We all know it’s staged. Many of them know it’s staged. But this collective consciousness called “the world” is a thoroughly manipulated creation that has tremendous inertia and power over anyone not fully conscious. That’s just the state of today’s dumbed-down and mind controlled society, sorry to say.

Case In Point – 9/11

If the so-called “greatest country on earth” can so easily be completely hoodwinked with a scam as obvious as 9/11 and the rise of phony terrorism, who’s to stand?

Yes, people are waking up. And it’s wonderful.

But where’s the public outrage here in the U.S? What “demonstration” gets any publicity about anything against the government any more, unless it’s a staged event? Look at the Tea Party movement. Now it’s OK to talk about because they co-opted that as well–and their “new, improved groundswell” reps are now dutifully pushing for the extension of the Patriot Act.

Before this the Tea Party movement was completely unreported because they didn’t have control over it yet.

I know, that’s hopefully the signal Egypt is giving, to get out there and you’ll get results, and that others will hopefully follow. Maybe. When push comes to shove people will act out. Just don’t ever forget WHO’s doing the pushing and shoving. And that they know what they’re doing and why. The WHO didn’t cut back their food rations in Egypt without knowing they’d hit a tipping point–and their trained operatives were all in place to show they just how to “revolt.”

As with WikiLeaks, be careful

If I sound cynical I apologize. But I think this is realistic. We have to stay very awake and aware and not get swept into the emotion of anything, whether it seems good or bad. I have friends who were so jacked by the WikiLeaks revelations thinking it was going to bring the system down, but when I told them be careful, it’s very likely a psyop or will be turned into one, it was a complete bummer for them. Turns out that was the case.

It’s not that we shouldn’t get excited at victories, we just need to stay sober and vigilant like never before.

Cautious optimism comes to mind.

Playing the Global Warming Card

Cassandra Anderson
Morph City

Man-made global warming (also known as climate change) claims have been thoroughly discredited by the "scientists" who perpetrated them through leaked e-mails in the 'Climategate' scandal. It seems like it should be a dead issue, but the truth is that too many resources have been invested in this scam to allow it to fade away. The global warming myth is thriving internationally, on the federal level and in state and local governments.

The global warming myth was popularized by Margaret Thatcher (under the influence of a UN depopulation advocate) and was designed to break US power, usher nuclear weapons into the UK and to punish Thatcher's political enemies.

Carbon dioxide is natural and beneficial to plants. Rises in carbon dioxide follow temperature rise. It is a lie that the cause and effect are the reverse.

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IT NEVER ENDS: Goldman Sachs, J.P. Morgan & Prudential Steal From The Poor To Earn Subsidies On Luxury Hotels

The recently renovated Blackstone Hotel in Chicago is a shining example of the great taxpayer ripoff in action - all courtesy of your favorite too big to be failures.

Please take a few minutes to read the full investigative piece at Bloomberg. There's much more detail beyond what we're excerpting below.


Rich Take From Poor as U.S. Subsidy Law Funds Luxury Hotels

Source - Bloomberg

The landmark Blackstone Hotel in downtown Chicago, which has hosted 12 U.S. presidents, opened in 2008 after a two-year, $116 million renovation. Inside the Beaux Arts structure, built in 1910, buffed marble staircases greet guests spending up to $699 a night for rooms with views of Lake Michigan.

What’s surprising isn’t the opulent makeover: It’s how the project was financed. The work was subsidized by a federal development program intended to help poor communities.

The biggest beneficiary of taxpayer help for the Blackstone revamp was Prudential Financial Inc., the second-largest U.S. life insurer. The company got $15.6 million in tax credits from the U.S. Department of the Treasury for helping to fund the project, according to Chicago city records, Bloomberg Markets magazine reports in its March issue.

JPMorgan Chase & Co., the second-largest U.S. bank by assets, also took in money by serving as a lender and the monitor of Blackstone construction financing, city records show.

Since 2003, some of the world’s biggest financial companies, including Goldman Sachs Group Inc., U.S. Bancorp, JPMorgan Chase and Prudential, have taken advantage of a federal subsidy that will cost taxpayers $10.1 billion -- and most of the public has never heard of it.

Investors have used the program, called New Markets Tax Credits, to help build more than 300 upscale projects, including hotels, condominiums, office buildings and a car museum, on streets far from poverty, according to Treasury Department records released through a federal Freedom of Information Act request.

Investors have used the program, called New Markets Tax Credits, to help build more than 300 upscale projects, including hotels, condominiums, office buildings and a car museum, on streets far from poverty, according to Treasury Department records released through a federal Freedom of Information Act request.

The Blackstone adjoins Chicago’s cultural hub, one of the most vibrant in the nation, and is miles from the city’s neediest neighborhoods. Prudential invested $9.3 million and made $30.4 million in loans, according to Chicago records.

Under New Markets rules, firms get a credit of 39 cents on the dollar, paid over seven years, for cash or loans they put in. For its contribution, Prudential collected $15.6 million in credits, according to a July 2008 JPMorgan project oversight report filed with Chicago.

Goldman targeted tracts on the upswing in Pittsburgh and Portland, Oregon, when the firm got its first New Markets investment authorizations in 2002. In Pittsburgh, $30.5 million of a $75 million Goldman investment authorization went to a shopping center in the East Liberty neighborhood.

The mall’s tract was in the midst of recovery with city renewal efforts that had already helped lure a Whole Foods Market Inc. grocery store.

Goldman brought in PNC Financial Services Group Inc., the sixth-largest U.S. bank by deposits, to help finance the project. PNC invested $30.5 million in equity and loans to receive $11.9 million in tax credits. The subsidy was $1.3 million more than PNC’s cash investment of $10.6 million.

Banks, lawyers and consultants took fees totaling $9 million -- 28 percent of the total project cost of $32.7 million, according to city records. Goldman’s share, for overseeing the project’s finances, will be $1.6 million over eight years, according to Goldman spokesman Stephen Cohen.

Continue reading at Bloomberg...

NJ - Fair Tax group lining up to file lawsuit

The Princeton Fair Tax Revaluation Commission, a group of citizens who are fighting the 2010 revaluation of the Princetons, are preparing to proceed with legal action to challenge what they call unjust assessments.

The group is alleging the revaluation, conducted by Appraisal Systems Incorporated, was flawed and led to inflated land values and deflated home values. This, in turn, has caused smaller homes on small lots to see large increases in their property taxes — some as much as 60 percent increases — and larger homes to loose value and decrease in taxable value.

Residents are puzzled over the skyrocketing of land values, which in some cases went up three or four times and how the assessment company came to the amount of the land value.

”There is enough evidence of failure on the part of ASI and the assessor and the township committee that they deserve to be brought to a conclusion that overcomes the clearly unfair redistribution of the assessment,” said Dick Reichart, a township resident whose assessment went up. He also found irregularities within his neighbors that ranged from 30 percent to 50 percent tax increases.
read more here

Over 100 under investigation in Iceland bank crash probe

Iceland’s Special Prosecutor into the banking crisis says that well over a hundred people are being investigated by his office.

Olafur Thor Hauksson told Frettatiminn that well over a hundred people are legally classified as suspects in his team’s investigations into the causes of the Icelandic banking crisis — adding that the number is set to increase quickly in the near future.

So far, the Special Prosecutor has only brought charges in two cases: one over a company called Exeter Holdings and the other against Baldur Gudlaugsson, the former Ministry of Finance undersecretary.

Five people have so far been taken into custody since the prosecutor started work in early 2009.

However, Hauksson and his former chief assistant Eva Joly have regularly stressed that the investigation will take a long time. Joly told the press it could well be four years before satisfactory results are reached. She also stressed that to rush the cases would probably lead to their failure.

Globoctopus Tightens its Grip.

Dog Poet Transmitting......

The Egyptians are doing what is necessary to force change. The workers are striking. This is the key action necessary to bring down a government when you lack the guns and the media. No government can endure a protracted shutdown of the economy. It was through the economy and the currency that corporations and a certain criminal banking country took over control of so many governments in the first place. I believe it is a principal law of most countries that the government cannot be ruled by a foreign power. Trafficking with influence for gain is a form of treason. It is widespread now, throughout the western world and the reason the economies are crumbling, due to the activities of corporations and banks.

The predictable behavior of corporations is what led to the definition of fascism as being, ‘government under corporate control’. In America, the single biggest evidence that this is so, came about when the highest court in the land ruled that it was legal for corporations to buy the government. A decade earlier they were the last gasp fixer, for a stolen election. Nothing has been the same since and quality of life is in the toilet, except for the few who are living it up at the expense of the many. When an economy shuts down, by the will of the people who turn the wheels, everything comes to a halt.

Now, it seems that the Egyptian government is torturing the protesters in rather large numbers. This defines them as demons in the flesh. They are doing this at the behest of Israel and The United States, who had previously used Egypt in its extraordinary rendition program; just in case you want to know who the bad guys are in all of this, it’s not the Egyptians. It is their government acting under the requests or orders of a foreign power.

Just now, word is being given that Mubarak will step down and also that Suleiman will not replace him. So far, this is a beautiful blueprint for all nations presently laboring under dictators or corporate and banking fascism. What may surface is something else. My belief is that revolution is meant to sweep the planet and nothing intended by the ruling elite is going to work out the way they want it to. The time has come and they are all meant to fall but… the fact is that I don’t know. I don’t know.

Now Mubarak says he won’t step down but will transfer his power to a man, every bit as psychopathic and ruthless as himself. It all comes down to the army and what they will and will not do. Mid level commanders of the military are deserting to join the protesters and I have heard that some in the army have said they will train their guns on their commanders before they will train them on the people. Anything can happen at this point. The people are not going to back down, so that means some incidents must surely occur and they will be the indicators of what will follow. I suspect that any collision between forces, that results in any significant loss of life, will cause the army to stop and turn against the government.

What we are dealing with here, is nothing short than the transformation of the world as we know it. It is going to sweep the Arab world and from there it will sweep outward in all directions. In the meantime, Israel is trying to plug the leaks in the dike but has only so many fingers. Members of her illustrious nation are calling for a Tiananmen Square scenario to bring the Egyptians back into line with the will of a xenophobic, misanthropic little country in the Middle East. Nothing is going to stop the wave of change that is sweeping over the world and those who are seeking to restrain and resist it will be engulfed in the tsunami.

The ruling elite of psychopaths; bankers, corporate high rollers, aristocrats and political and religious whores are all in the crosshairs of history. The change is impacting from without and impacting upon the change within. The nature of each creature is crying out the shape and intent of the identity of its being, as the force of the cosmos lights upon it and illuminates it with the ray of revealing truth. We’re all going through the scanner and there’s no lying about what you are powerless to conceal.

All of what we are seeing at the moment is the exposure of those plotting to route and rule the world. They’ve had a game plan in action for a long time. Not long ago they ramped up the speed but, make no mistake, this has been in the works for awhile. They are ‘all in’ as the saying goes and there are no possibilities of action that are being overlooked. They are determined to keep the demon ship on course, for an empire of the few over the prison planet of the many. Of course, they intend to reduce the overall population by at least half or more.

They’ve got their big blueprint for world enslavement laid out on the boardroom table constructed of endangered wood, which is polished to a high gloss from resins made from human blood. You can’t imagine the thoughts that move through their heads, or the degree of treacheries dreaming, behind the half-shuttered reptilian eyes. Some of them know what they’re up against but most of them don’t. It’s being hidden from their sight, because the movie has to play out to the final scene. There it will remain as testimony for the coming age, against the return of these horrible fiends

Look upon the world at this time and marvel. You can see the plans hatch and fail in real time. You can see the wave, as it rises up from the plains and sweeps around the world into the hearts of every living thing, causing them to vibrate and cry out the truth concerning themselves. We are all in a state of continuing revelation. It is all coming out and it is all being uncovered. There has never been a better time than now, to be stalwart and possessed of a true heart. That will be uncovered too.

Overlooked, ignored or badly planned against, comes the shifting of the poles and the outrage of Mother Nature, whose patience has gone beyond her will to contain herself. Civilization is 180 degrees off course. Corrections must be made according to a mathematical imperative. The bowstring is overdrawn and repenting of the pull. The days of prophecy are upon us.

All of the external changes are being mirrored by internal counterparts. The grand dance has begun and everything we have known is in transformation. Meanwhile, in Sleepyville, the TV churns out its unending cycle of mind rot. This is also a part of the design of those bent on global enslavement. They not only want it all …and for you to have as little as can be arranged, they want you to suffer too. It makes them feel privileged and powerful. The plug is about to be pulled from the wall and some real entertainment is in store for when they immediately turn upon each other. We are going to see some very unscheduled programs inserting themselves into the airwaves, without commercial break.

My heart goes out to all of those caught up in the turmoil of these times. I am powerless to affect it and can only affect myself. It is my hope that all of us will focus on what we can do and be about it with a will. It’s just going to get stronger and swifter by the moment, until one stands aghast at the power and the speed of it. The masks are going to come off.

All of the public preening and jockeying for position has a point to it. We are seeing our oppressors at work on the stage. They are defining themselves to the nth degree. They are exposing themselves and even accelerating their bad behavior, as if they could somehow catch the wave that is destined to plow them under. It’s not going to happen but a great many other things are going to happen and where you wind up is going to have a lot to do with where you were headed all along. If you’re off course, you had better get on course, because the margins are unforgiving.

End Transmission.......

The Tangled Woods

Obama administration proposes higher fees, down payments for homebuyers

Click this link .....

Fed’s Warsh Quits; Bernanke Adviser Questioned QE2

Federal Reserve Governor Kevin Warsh, who was one of Chairman Ben S. Bernanke’s closest financial-crisis advisers before becoming the only governor to question the expansion of record monetary stimulus in November, resigned after five years at the central bank.

Warsh, 40, a former investment banker who was the youngest- ever Fed governor when then-President George W. Bush appointed him in 2006, will leave “on or around March 31,” he said in a letter today to President Barack Obama that was released by the Fed in Washington.

His departure may give Bernanke a stronger hand to complete or potentially expand $600 billion in Treasury purchases through June. At the same time, Bernanke loses a link to Wall Street executives and Republican politicians as he carries out Congress’s overhaul of financial regulation and faces criticism from a political party that in the midterm election gained control of the U.S. House.

“You lose a forceful internal advocate for ending QE and trying to renormalize policy quicker,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007, referring to the stimulus program known as quantitative easing.

The move also “deepens the void” in financial-markets expertise at the Board of Governors after former Vice Chairman Donald Kohn, a 40-year central bank veteran, left in September, said Reinhart, a scholar at the American Enterprise Institute in Washington. That may leave Bernanke more dependent for market insight on New York Fed officials including William Dudley, president of the regional bank, Reinhart said.

Five-Year Term

Separately, Dudley will probably be reappointed to a five- year term starting March 1, a person familiar with the matter said today. He was named New York Fed chief in January 2009 to finish the term of Timothy F. Geithner, who became Treasury Secretary. The board of the regional bank appoints presidents to five-year terms, subject to approval by the Board of Governors in Washington.

Warsh’s term would have run through January 2018; most Fed governors don’t serve out their full terms. His resignation opens a second vacancy on the seven-member Board of Governors and leaves Elizabeth Duke, a former community banker, as the only governor not appointed or reappointed by Obama.

Duke’s term expires in January 2012, and she can stay after that until a replacement is appointed. Obama’s nomination of Peter Diamond, a Nobel Prize-winning economist from the Massachusetts Institute of Technology, is pending in the Senate again after failing last year.

Second Vice Chairman

The White House also must designate a Fed governor to be a second vice chairman in charge of supervision, as required by last year’s Dodd-Frank Act overhauling financial regulation. It has two other regulatory vacancies in the chiefs of the Office of the Comptroller of the Currency and the agency overseeing Fannie Mae and Freddie Mac.

“I am honored to have served at a time of great consequence,” Warsh, who never dissented from a Federal Open Market Committee decision, said in his resignation letter. Bernanke said in a statement that Warsh’s “intimate knowledge of financial markets and institutions proved invaluable during the recent crisis.”

Warsh is still on good terms with Bernanke and is leaving because he sees it as the right time with an improving economy and not because of a policy dispute, said another person familiar with the matter who spoke on condition of anonymity. He’s likely to return to the private sector.

‘Greater Force’

Warsh staked out an anti-inflation stance on monetary policy in September 2009, when he published a Wall Street Journal op-ed and gave a speech saying the Fed may need to raise interest rates with “greater force” than it has in the past. In June, he said any decision to expand the $2.3 trillion balance sheet must be subject to “strict scrutiny.”

On Nov. 8, he said in an op-ed and speech that the Fed’s Treasury buying “poses nontrivial risks” even after he voted to support the stimulus. He hasn’t publicly discussed his views on the purchases since November and backed the policy at the Fed’s subsequent meetings in December and January.

“When non-traditional tools are needed to loosen policy and markets are functioning more or less normally -- even with output and employment below trend -- the risk-reward ratio for policy action is decidedly less favorable,” Warsh said in the speech in New York. “As a result, we cannot and should not be as aggressive as conventional policy rules -- cultivated in more benign environments -- might judge appropriate.”

‘Soft Dissent’

John Ryding, a former Fed researcher who’s now chief economist at RDQ Economics LLC in New York, said that day the speech was a “soft dissent” that expressed concern about the policy without a formal vote against it. Warsh “needs to ‘man up’ and put his vote where his mouth is,” Stephen Stanley, an economist who’s criticized the Fed stimulus, said in a Nov. 8 research note.

“The hurdle for dissenting for a governor is probably somewhat higher” than for a regional Fed president, Reinhart said. Last year, Kansas City Fed President Thomas Hoenig dissented in favor of tighter policy at all eight FOMC meetings.

Warsh’s ambitions go back to his high school days near Albany, New York, where he had a business buying and distributing neon novelties, according to a 1987 article in the Albany Times-Union.

College Freshman

As a freshman at Stanford University in California, Warsh pestered political-science professor David Brady to attend a senior seminar that wasn’t open to first-year students, Brady said in 2009.

“He was so persistent,” said Brady, who became his thesis adviser at Stanford. “He said he would get the best grade in the class, and he did.”

After graduating from Stanford, Warsh earned a law degree from Harvard University but never practiced, opting instead to join Morgan Stanley in New York, where he worked in the mergers and acquisitions department from 1995 to 2002. He then joined the White House, advising on policies including the government- chartered home-finance companies Fannie Mae and Freddie Mac.

Warsh was an architect of the terms the Treasury dictated to nine of the biggest U.S. banks in October 2008 in return for a $125 billion injection of government funds. He played a central role in negotiating the sale of the ailing Wachovia Corp., mediating a takeover fight that erupted between Citigroup Inc. and Wells Fargo & Co.

Intensified Crisis

Days before Lehman Brothers Holdings Inc.’s bankruptcy in 2008 intensified the crisis, a Fed staff member e-mailed Warsh to say she hoped “we don’t have to protect” some Lehman debt holders, according to documents released by the Financial Crisis Inquiry Commission. Warsh replied an e-mail 30 minutes later that “I hope we dont (sic) protect anything!”

In January 2009, Warsh was passed over for the presidency of the New York Fed in favor of Dudley, a former Goldman Sachs Group Inc. economist and leading advocate of the Fed’s stimulus that’s been dubbed QE2 by investors for a second round of quantitative easing.

Warsh has served as the Fed’s representative to the Group of 20 and the Board of Governors’ emissary to emerging and advanced economies in Asia. He also managed Fed operations and personnel as the governor assigned to administration.

“He is an extraordinarily talented guy who made big contributions to the Federal Reserve,” Atlanta Fed President Dennis Lockhart said in an interview today. Warsh received a standing ovation after a December speech to former Atlanta Fed directors, Lockhart said. “I regret seeing him go.”

Warsh in 2002 married Jane Lauder, an heir to her grandmother Estee Lauder’s cosmetics fortune, making him wealthier than the rest of the Fed governors combined. His wife is the global president and general manager of Estee Lauder Cos.’ Origins and Ojon brands and is on the company’s board of directors.

How the Government Will Take Control of Your Retirement Account

By Simon Black

In the late 1920s, the economy of the Weimar Republic was beset by numerous fiscal troubles. The global depression spread quickly to Germany, undermining the government's ability to make its reparation payments from the Great War.

Fearing a return to hyperinflation, many Germans who had spent the last decade building up a small fortune during the Weimar Republic's own 'Roaring 20s' decided to pack up and leave; they remembered the days when banknotes were used as wallpaper and had no desire to repeat the experience.

In 1931, Chancellor Heinrich Bruning imposed a 'flight tax', which levied a 25% tax on the value of all property and capital for Germans leaving the country.

Total revenue collected from this tax amounted to roughly 1 million Reichsmarks (RM) in its earliest days ($56 million today). By the late 1930s under Hitler's rule, flight tax revenue soared to RM 342 million ($21.5 billion today) as more people headed toward the exits.

This flight tax constitutes one of the earliest modern examples of capital controls. They've evolved substantially since the days of Hitler, but the end goal is the same-- governments controlling the flow of capital across borders.

Governments impose these for a variety of reasons-- rapidly developing nations may want to restrict the flow of capital into their country, preventing 'hot money' from pumping up prices and affecting local markets. We see this today in places like Brazil and Thailand.

In other instances, bankrupt governments seek to trap capital within their borders, maximizing the amount available for subsequent taxation or other forms of confiscation. This tactic is usually employed when lost confidence has impaired the government's capability to borrow.

We're seeing strong indications of both examples today, though the latter is the most alarming. As I scan the headlines and hear from colleagues in the US and Europe, it's clear to me that the march towards stricter capital controls is quickening its pace.

The British government, for example, just announced an increase to its bank levy that taxes UK-domiciled banks on their worldwide balance sheets. In response, HSBC has indicated that it may move its headquarters elsewhere.

I suspect the British government will enact legislation to discourage or prevent this from happening, likely with a modern day corporate flight tax (albeit with a more patriotic sounding name).

Capital controls can take a variety of other forms-- including taxation on outward remittances, restrictions on the movement of financial instruments, bureaucratic approval processes for foreign transactions, reporting requirements for foreign assets, and government control over banks.

This last is important-- when politicians and bankers are in bed with each other, banks can be compelled to loan a portion of their deposits to the treasury at unrealistic terms, sticking bank customers with sub-optimal yields below the rate of inflation.

In the US, I think retirement accounts will be the first to go. They're the easiest to grab because most people hold their retirement accounts domestically with a large financial institution that will happily sell every customer down the river when the government comes calling.

The way they'll do this is simple-- the next time there's a market meltdown (bear in mind that insiders are selling like crazy right now...), the government will step in with new legislation that requires these institutions to invest a portion of their accounts in the 'safety' of government securities.

Insider politiconomists like Teresa Ghilarducci have already strongly advocated for government managed retirement accounts in the US, and we've seen numerous examples of other bankrupt nations from Argentina to Hungary moving to seize their citizens' pensions.

IMF calls for dollar alternative

CNN Money

NEW YORK (CNNMoney) -- The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.

The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.

SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs.

While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.

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Rich Get Richer When Governments Tout Austerity

Matthew Lynn

Remember all that stuff about how the credit crunch was going to usher in a new age of austerity? The financial industry would shrink; the gulf between the haves and the have-nots would close; and taxes would rise for the top earners, forcing them to contribute more to society.

Well, guess what? It didn’t happen.

In fact, we just had a “rich-get-richer” recession. U.K. data suggest the gap between the wealthy and the poor has widened. We can give up any idea that it is going to close by itself. The government usually bails out the rich; the wages that the highly skilled can command are rising all the time; and globalization means the well-off increasingly occupy a whole different economy than the rest of the country they live in.

While the U.K. economy as a whole may be struggling, people at the top end of the income range are doing surprisingly well.

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Egypt's Social Crisis: Financial Bonanza for Wall Street Investors and Speculators

Hidden Agenda behind Mubarak's Decision Not to Resign?

Mubarak's decision not to resign was taken in close consultation with Washington. The US administration including US intelligence had carefully identified the possible scenarios. If Washington had instructed Mubarak to step down, he would have obeyed forthright.

His decision not to resign indelibly serves US interests. It creates a situation of social chaos and political inertia, which in turn generates a vacuum in decision making at the government level.

The continued social crisis has also resulted in a massive outflow of money capital. More concretely, what this signifies is that Egypt's official foreign exchange reserves are being confiscated by major financial institutions.

The ransacking of the country's money wealth is an integral part of the macroeconomic agenda. The newly formed government on instructions from Washington has not taken concrete steps to curtail the massive outward flow of money capital. A prolonged social crisis means that large amounts of money will be appropriated.

According to official sources, Egypt's Central Bank had (prior to the protest movement) 36 billion dollars in foreign exchange reserves as well as an additional $21 billion of deposits with international banking institutions which are said to to constitute its so-called "unofficial reserves." (Reuters, 30 January, 2011).

Egypt's external debt, which has increased by more than fifty percent in the last five years is of the order 34.1 billion (2009). What this means is that these Central Bank reserves are de facto based on borrowed money.

In early 2010, there was a large influx of hot money deposits into Egyptian government debt instruments.

Foreign exchange flows into the country and is exchanged for Egyptian pounds (EgP), which are then used by institutional investors and speculators to purchase high yielding government bonds and treasury bills (denominated in Egyptian pounds) with short term interest rates of the order 10 percent.

The interest rate on long term government bonds shot up to 7.2 percent at the outset of the protest movement. (Egypt Banks to Open Amid Concern Deposit-Run May Weaken Pound, Lift Yields - Bloomberg, January 2, 2011)

At the onset of the crisis, international investors owned about $25bn of Egyptian T-bills and bonds, almost a fifth of the total T-bill market and about 40 per cent of the domestic bond market. Foreign investors also accounted for about 17 per cent of the stock market’s turnover, and held about $5bn-$6bn of Egyptian shares. (Ibid)

Under its agreement with the IMF, Egypt is not allowed to implement foreign exchange controls. These hot money deposits are now leaving the country in anticipation of a devaluation of the Egyptian pound. In the days preceding Mubarak's speech, capital flight was running at several hundred million dollars a day.

In a bitter irony, Egypt deposits 21 billion with the commercial banks as "unofficial reserves" on the one hand, while the commercial banks acquire $25bn worth of EgP debt, with a yield of the order of 10 percent. What this suggests is that Egypt is financing its own indebtedness.

The protest movement started on a bank holiday. While the closure of the Cairo stock market and domestic banking system had put a temporary lid on the outflow of money capital, large amounts of capital flight instrumented by major financial institutions had already occurred in the days leading up to the protest movement.

Egypt's banking system reopened on February 5, leading to a renewed process of capital flight resulting in the depletion of central bank reserves and a corresponding increase in Egypt's foreign debt.

A devaluation of at least 20 percent is contemplated. According to UBS' emerging markets currency division, "the pound could “easily” drop by a further 50 per cent or so to E£9 per US dollar". / Currencies - Banks weigh risk of capital flight, February 1, 2010)

A devaluation of more than ten percent would wreck social havock: Domestic prices of food are dollarized. If there is a devaluation of the Egyptian pound, this would inevitably trigger a renewed increase in the prices of essential food staples, leading to a further process of impoverishment.

A scenario of currency devaluation, rising external debt coupled with a renewed package of IMF sponsored austerity measures would inevitably lead to an accentuation of the social crisis and a new wave of protests.

The newly appointed Finance Minister Samir Radwan is firmly committed to the Washington consensus, which has served to impoverish the Egyptian people. In a contraditory statement on February 3, Radwan confirmed that "the government won’t reduce subsidies even if global prices of food and commodities rise. Public spending will be used as a tool to “achieve social justice,” he told a news conference in Cairo." (Bloomberg, February 5, 2011)

Radwan is abiding by IMF-World Bank guidelines: no restrictions will be placed on capital flight. The Central Bank will ensure the conversion of hot money deposits into hard currency by major financial institutions. The coffers of the central will be ransacked.

With capital flight, domestic debt is transformed into foreign debt, putting the country into the stranglehold of foreign creditors:

Radwan said Egypt will honor its debt obligations and urged foreign investors to have confidence in the country. “All the bond obligations, everything will be honored on time,” Radwan said in a Feb. 4 telephone interview from Cairo. “We are not defaulting on any obligations.” (Bloomberg, February 5, 2011)

In a bitter irony, Mubarak's decision to remain as head of State with Washington's approval has served the interests of institutional investors, currency traders and speculators.

Financial dislocation, rising debt and spiralling food prices: Before "democratic" elections are called, Egypt will have been pushed into the straightjacket of a new set of IMF condionalities.

Lawmakers Oppose Federal Bailout for States

WASHINGTON — The new Republican-led House is showing no appetite for making federal taxpayers help state and local governments cope with widespread budget problems. Even some Democrats are wary, underscoring the impact of Washington's crushing budget deficits.

For the coming fiscal year, the 50 states face combined expected deficits of $125 billion, according to the liberal Center on Budget and Policy Priorities. Unlike the federal government, nearly all states are required by their constitutions to balance their budgets. Now, the GOP is spearheading an effort to vilify government workers and create a pathway for state bankruptcies. "The era of the bailout is over," Rep. Patrick McHenry, R-N.C., told a House hearing on the debt problems facing scores of states and municipalities around the country.

At the same hearing, Rep. Mike Quigley, D-Ill., said states need to erase their deficits and face up to their long-term obligations such as pensions for government workers on their own. He also criticized a proposal some conservatives have made that Congress pass a law allowing states to reorganize their debts by declaring bankruptcy, an idea that opponents say would send state borrowing costs soaring.

"I don't think either one of those options can work or are optimal," Quigley said.

McHenry chairs a subcommittee of the House Oversight and Government Reform Committee that oversees federal bailouts, which was holding a hearing on the issue. Quigley is the top Democrat on that panel.

House Majority Leader Eric Cantor, R-Va., has also said there will be no federal bailout for fiscally ailing states.

Washington has pumped billions of dollars to state and local governments during the past two years from President Barack Obama's $814 billion economic stimulus program. But that aid is ending, and states and municipalities face huge projected deficits for this year and next.

For the coming fiscal year, the 50 states face combined expected deficits of $125 billion, according to the liberal Center on Budget and Policy Priorities. Unlike the federal government, nearly all states are required by their constitutions to balance their budgets.

Despite bipartisan agreement that Washington's budget problems mean that governors can't expect help from federal taxpayers, the two parties used the hearing to blame different culprits for the states' problems.

Republicans said the stimulus program let states postpone making their budgets healthier and cited state workers' pensions and health benefits. Democrats said the stimulus let states preserve valuable services and defended public employees, and said most states' budget imbalances are largely due to the huge bite that the weak economy took out of tax collections.

Citing worries that state workers could see their pensions cut, Rep. Elijah Cummings, D-Md., said, "One of my concerns is when the storm is over, then these folks have been locked out of a lot of money they were due."

McHenry blamed the wide-ranging budget problems chiefly on states' huge pension obligations, citing "the looming burden of paying out trillions of dollars in lucrative public sector union pension and health care benefits that come at the expense of taxpayers."

He said public employees on average have better salaries and benefits than private workers and said, "Public sector employees and private sector employees are living in two different economies."

He also blamed excessive spending and falling tax revenues caused by the economic downturn, adding, "Reckless spending fueled by bottomless borrowing and guaranteed by endless bailouts is an unsustainable course."

Quigley, the Democrat, said long-term budget imbalances are faced by only six to eight states, including his own state of Illinois. He said those states face major problems caused by rising health care costs and underfinanced pension plans.

"This is why a one-size-fits-all approach, like bankruptcy for states, could do more harm than good," Quigley said.

Besides Illinois, some other states facing especially tough budget problems include New York, New Jersey, California and Texas.

Calif. governor drops plan to sell state buildings

California Gov. Jerry Brown announced Wednesday he is dropping a plan hatched by former Gov. Arnold Schwarzenegger to sell 24 state government buildings to private investors because the high cost of rent did not make sense for taxpayers.

The state had been in negotiations to sell the properties for $2.3 billion and use the proceeds after paying off construction bonds to help close the state's general fund budget deficit. Under a deal approved by lawmakers, the state would have continued using the space by entering into a 20-year lease with the new owners.

The Associated Press reported in April that the deal would end up costing the state $5.2 billion in rent over 20 years, likely saddling taxpayers with costs beyond whatever the state would net from the sale. That assessment was confirmed by the nonpartisan Legislative Analyst's Office, which found the sale shifts taxpayer costs to the future. The state controller and treasurer also opposed the sale.

"No doubt there's a huge budget deficit and the Legislature and the governor tried to do everything they could, but it's still very daunting," Brown said Wednesday. "The sale of the buildings really didn't really make much sense. It didn't make much sense because it in effect is a gigantic loan with interest payments."

Brown said selling and renting back the space amounted to a 10 percent loan and that the sale would have been "the ultimate in kicking the can down the road."

The AP also reported in April that the Schwarzenegger administration quietly removed appointees from two oversight bodies that must sign off on the sale, replacing critics of the move with people who support it. The move was made as the state began taking bids on the properties, quashing any dissent or independent financial studies that might have emerged as the sale moved forward.

Properties that were put up for sale included the Ronald Reagan office building in downtown Los Angeles, the San Francisco Civic Center, which houses the state Supreme Court, and buildings in downtown Sacramento that house the attorney general's office and state Department of Education.

Cancelling the sale means Brown will have to cover a $1.2 billion gap that was expected to be filled by the sale's proceeds. His administration is proposing taking out short-term loans from special funds for less than a 1 percent interest rate — a "fraction of the cost," Brown said.

He estimated his plan to borrow from Medi-Cal, prison construction bonds and other state resources would be paid back over three years at a cost of about $18 million. Such a maneuver would save the state $6 billion over 35 years compared with Schwarzenegger's proposal, Brown said.

The governor added he expected to be able to pull out of the sale without a legal fight.

Administration officials said state programs would not be hurt by the alternative borrowing plan.

Brown previously had not commented on the proposal. But as attorney general, he declined to represent Schwarzenegger in a lawsuit seeking to block the sale.

Three former state building authority members had sued to stop the sale, saying it amounted to an unlawful gift of public funds and illegally bypassed the state Judicial Council, which has authority over some of the buildings that Schwarzenegger wanted to sell. Plaintiffs Jerry Epstein, A. Redmond Doms and Don Casper were ousted by Schwarzenegger's administration for questioning the sale.

The sale was set to close Dec. 15 but the state appeals court temporarily blocked it until Schwarzenegger left office, leaving the decision to Brown.

"We are thrilled with the decision. It's exactly what we were trying to accomplish through the litigation, and we're pleased we were able to provide the opportunity for Gov. Brown to review the transaction," said Anne Marie Murphy, an attorney representing the plaintiffs.

The state had awarded the sale of the buildings to California First LLC, a consortium of investors led by a Texas real estate firm and a private equity firm based in Irvine.

"We are disappointed with Gov. Brown's decision not to proceed with the state office building sale," said Michael Bustamante, spokesman for California First. "We had looked forward to assisting the state in addressing its fiscal crises and are available if our assistance is needed in the future."

White House Responds to Blackout Controversy…

- Prison – -

White House Responds to Blackout Controversy

Posted By admin On February 5, 2011 @ 4:48 pm In Featured Stories,News In Focus,Paul Watson Articles | 12 Comments

White House Communications Director rebuttal a tissue of lies, deception, and spin

White House Responds to Blackout Controversy 050211top

Alex Jones & Paul Joseph Watson
Prison [1]
Saturday, February 5, 2011

- Lies about Texas not being affected by draconian EPA rules on greenhouse gases.

- Deception about clean burning coal-fired plants producing “carbon pollution”.

- Spin in denying EPA and Obama administration have publicly stated and openly embarked on mission to destroy coal industry by blocking construction of new power plants.

The White House has publicly responded to the controversy surrounding the Obama administration’s agenda to bankrupt the coal industry and its connection to this week’s blackouts across the country, by attempting to deny the link in a rebuttal that amounts to nothing more than a tissue of lies, deception and spin.

In a blog that appears on the front page of [2], White House Communications Director Dan Pfeiffer begins by claiming that the story came from a “questionable” source and is “unquestionably false,” without even naming the source. Frightened that Americans might actually read the source and make their own minds up based on the facts, Pfeiffer fails to provide a link to our original article [3] that was subsequently picked up by the Drudge Report, Fox News and numerous other media outlets.

Pfeiffer then oversimplifies the debate by building a straw man argument based around the premise that “the Obama Administration is somehow responsible for the rolling blackouts in Texas,” before blaming the outages on cold weather.

By framing the argument to make out as if we claimed Obama flipped a switch and the lights went out is completely deceptive. Of course the cold weather has shown that the country is vulnerable to blackouts, but that vulnerability is a direct result of the Obama administration’s stated goal to bankrupt the coal industry and its proven track record, through the enforcement of EPA regulations, of blocking power plants from being built that would be able to handle the extra demand.

Pfeiffer then claims that the blackouts were a result of power plants experiencing “mechanical failures,” completely ignoring the fact that the blackouts were planned and were made necessary because of a lack of supply to meet increased demand. That’s why Texas had to rely on Mexico [4] to meet its power shortfall, an offer that was subsequently suspended.

Pfeiffer then attempts to counter the manifestly provable fact that desperately needed new coal-fired plants are being mothballed under the weight of draconian EPA regulations on CO2 emissions by claiming that Texas isn’t subject to such restrictions. Firstly, Texas supplies power to surrounding states that have been impacted by the new EPA regulations, leaving less energy to meet the demand of those living in the lone star state.

Secondly, despite Texas’ best efforts to fight the new Clean Air Act standards, the EPA has aggressively enforced existing regulations, a process that has both delayed and prevented new plants in Texas from being built, such as the Las Brisas Energy Center, which has been the subject of a near three year battle [5] between the EPA and state authorities.

Indeed, a federal court ruling last month gave the EPA permission to proceed with greenhouse gas regulation in Texas [6], temporarily superseding Texas’ non-compliance with the new regulations which came into force on January 2. The White House’s claim that EPA regulations are not currently affecting Texas is a complete fabrication.

The wider argument that the EPA is simply trying to implement reasonable measures to prevent “carbon pollution” is also a complete misnomer. Modern day clean burning coal-fired plants go to great lengths to remove all hazardous chemicals before any emissions leave the plant, through the use of sophisticated scrubbers and other techniques, to the point where the only emissions are water vapor and carbon dioxide. Watch the video below for a demonstration of these techniques.

There can be no doubt whatsoever that the Obama administration has deliberately pursued a policy of bankrupting the coal industry by means of crippling EPA regulations. Candidate Obama himself explicitly stated this objective during a January 2008 interview.

“So, if somebody wants to build a coal plant, they can — it’s just that it will bankrupt them, because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted,” he stated.

This policy has led not only to new coal plants not being built, but also to existing coal plants being threatened with termination. EPA regulations are forcing power plants out of business [7] across America – leaving the country vulnerable to more enforced blackouts and higher energy prices.

- Back in July 2008, a Superior Court judge in Fulton County blocked the construction of a coal plant in Georgia [8], citing global warming concerns and the need to limit CO2 emissions.

- In January 2009, the Obama EPA blocked approval for a coal-fired power plant in South Dakota [9], claiming the state, “didn’t meet requirements under the Clean Air Act in part of its proposed permit for the plant.”

- As Governor of Kansas, Obama’s current Secretary of Health and Human Services Kathleen Sebelius slapped a de facto ban on the construction of all new coal-fired plants [10] across the state.

- Last month, Senators in Obama’s home state of Illinois blocked the construction of a clean-burning coal [11] gasification and power generating plant.

- As a result of the EPA’s recent remand of air permits, Shell Oil announced this week [12]that it has “dropped plans to drill in the Arctic waters of the Beaufort Sea this year and will concentrate,” ensuring more shortages and higher prices for Americans

Last month Dayton Daily News reported [13]that, “The power industry nationwide might have to spend more than $80 billion and retire 45,000 megawatts of coal-fired power plants over several years in adjusting operations to meet current and possible new EPA regulations.”

The shortage of power plants to meet the demands of Texans and other Americans as cold weather grips the country is down to the EPA holding local utility companies hostage and blocking them from building desperately needed new power plants.

Obama’s January greenhouse gas rules restricted the amount of emissions allowable for new power plants, while giving an exemption to General Electric [15], an intimate financial supporter of his administration.

The Obama administration has crippled US infrastructure and its ability to meet the needs of Americans by declaring war on the coal industry. While smaller independent power plant companies are being squeezed out of existence by EPA rules, transnational giants are busy creating artificial scarcity [16]to jack up prices and eliminate their competition. Indeed, we only have to recall how Enron shut down power plants on false pretenses [17] during the 2001 blackouts in California as a ploy to raise prices to understand how the restriction of energy is used as a political and financial tool of oppression.

Energy prices continue to skyrocket nationwide while the EPA prepares to shut down more plants, ensuring only higher prices in the years to come. The federal government’s siege against independent power companies’ efforts to build coal-fired plants is part of the unfolding globalist agenda to cripple American infrastructure even as China and Mexico build new power plants at ever accelerating speeds.

The fact that the White House is so concerned that this agenda is being exposed that they feel the need to address it with a tissue of lies and deception on the front page of is a telling indication that the Obama administration is panicking about Americans becoming aware of the move to completely de-industrialize the United States.