VIDEO HIGHLIGHTS - GOP Tea Party Debate: Focus On Obama, The Federal Reserve & Social Security

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Highlight clip #1 - Memorable Moments
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Highlight Clip #2  - Federal Reserve Blasted
Five short clips inside.
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Highlight Clip #3 - Ron Paul on Executive Orders
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Highlight Clip #4 - Gingrich Moments
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Highlight Clip #5 - Gingrich with a great line on Obama


Read complete coverage of the Republican debate at the following link:

• CNN Live Blog

60 Minutes - Financial WMDs: Credit Default Swaps, The Bet That Blew Up Wall Street

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Outstanding segment from 60 Minutes that has not been posted previously.
Transcript is below.
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Anyone with more than a casual interest in why their 401(k) has tanked over the past year knows that it's because of the global credit crisis. It was triggered by the collapse of the housing market in the United States and magnified worldwide by the sale of complicated investments that Warren Buffett once labeled financial weapons of mass destruction.

They are called credit derivatives or credit default swaps.

As correspondent Steve Kroft first reported last fall, they are essentially side bets on the performance of the U.S. mortgage markets and some of the biggest financial institutions in the world - a form of legalized gambling that allows you to wager on financial outcomes without ever having to actually buy the stocks and bonds and mortgages.

It would have been illegal during most of the 20th century under the gaming laws, but in 2000, Congress gave Wall Street an exemption and it has turned out to be a very bad idea.
Read the rest of the transcript at CBS...

Cramer Gets Bearish - 'Short Financials NOW, European Lehman Moment Is Upon Us'

CNBC's Jim Cramer is a stock-picking buffoon, this is no secret to anyone beyond his call-in sycophants, who willingly scream 'booyah' for any chance to be on-air with their majesty, lord of all stupidity.  However, when Cramer gets bearish and tells readers to short financials, as he did today, even going so far as to recommend using the double and triple short financial etfs, well then it's newsworthy, to a certain degree, if only for the uncomprising laughter at the late-to-the-party clown.
Yes, Jim we are laughing at you, not with you.
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Cramer - Europe's Lehman Moment
Source - Real Money
NEW YORK -- At least it is no longer complicated. We know a European Lehman is upon us. Or, more like it, a European Lehman/Bear/Merrill/Washington Mutual/Wachovia/Citigroup.
That's the first proposition.
Second, we know that "they" have no plan to deal with it.
Third, we don't even know who "they" is anymore. Is it the Germans? The French? The IMF? The European Central Bank? Trichet?
Fourth, it is now too late for the banks to raise capital. As you recall, when the ratings agencies strike, it very quickly leads to Lehman. The banks can't get short-term funding and they collapse.
Fifth, the French banks in particular have been getting away with hiding their version of subprime debt, Greek debt, forever.
Sixth, our country isn't able to stop any of this. We are too weak and it is none of our business.
Seventh, because of how tightly correlated we are with Europe, individual stocks can't buck the trend, at least initially. Later on they will, because while our banking system won't collapse, it can't help but cause a worldwide recession if it all goes bad, which it looks like it is going to do.
So, the only battle plan is to brace yourself if you can't short. Raise some cash if you can. And short the S&P and double- and triple-short the financials -- the levered ETFs will certainly give you that chance.

Bank of America will cut 30,000 jobs

Bank of America will cut about 30,000 jobs over the next few years in a bid to save $5 billion per year. The cost-cutting drive is part of a broader effort to reshape and shrink the nation's largest bank as it copes with fallout from the housing bust.
The bank announced the job cuts in a statement shortly after Brian Moynihan, the bank's CEO, disclosed the cost-saving goals in an address to investors in New York. "We're a much simpler company than we were 24 months ago," Moynihan said.
Bank of America stock was up 2 cents at $7 at midday. The stock has lost half its value this year, largely over problems related to poorly-written mortgages it acquired with its 2008 purchase of Countrywide Financial Corp. The bank faces lawsuits from investors and regulators over the sales of mortgage-backed securities that lost value after the housing boom collapsed.
The job cuts follow a revamp of the bank's top management team last week. Two senior executives, wealth management head Sallie Krawcheck and head of consumer banking Joe Price, left the bank. The bank also elevated commercial banking chief David Darnell and investment banking head Tom Montag to co-chief operating officers, reporting to Moynihan.
The latest job cuts will lead to a 10% reduction in the bank's work force of 288,000. The cuts come on top of 6,000 positions the bank has already eliminated through the third quarter of this year.
The Charlotte, N.C. company said it expects many of the cuts to come through attrition and eliminating unfilled positions. The bank says the number of job cuts isn't fixed, but that it expects they will total 30,000. It hopes to save $5 billion in annual costs through 2014 under a cost-cutting plan dubbed internally as "Project New BAC."

Explosion Hits French MOX Nuclear Site

Paul Joseph Watson
Infowars.com
Monday, September 12, 2011
An explosion at a French nuclear facility that processes dangerous MOX plutonium has killed one person and injured four others, provoking fear that radioactivity could be escaping into the atmosphere, although officials have played down such concerns.
However, the French government’s complicity in hiding the severity of the 1986 Chernobyl disaster will do nothing to assuage concerns about authorities being honest with the public about the scale of the problem.
“There were no radioactive leaks after the blast, caused by a fire near a furnace in the Centraco radioactive waste storage site, officials said,” reports BBC News.
“It produces MOX fuel, which recycles plutonium from nuclear weapons, but does not include reactors.”
French nuclear watchdog ASN has not explained the cause of the blast, but conceded that, “The furnace that exploded is used to melt waste with levels of radioactivity ranging from low to very high.”
As we highlighted during the Fukushima crisis, Plutonium is the most deadly radioactive isotope known to man, and MOX is two million times more deadly than normal enriched uranium. The Half-life of Plutonium-239 in MOX is 24,000 years and just a few milligrams of P-239 escaping in a smoke plume will contaminate soil for tens of thousands of years.
Although officials are saying that no radioactivity has escaped, a spokesman for France’s Atomic Energy Commission rather unreassuringly said, “For the time being nothing has made it outside,” authorities would be expected to play down the severity of such an event.
Nuclear power accounts for over 70% of France’s energy needs. Any crisis approaching Fukushima proportions would completely cripple the country’s economy.
However, it is important to note that unlike Japan, France is not recovering from a massive earthquake, therefore any necessary measures to secure the facility will be far easier to perform. In addition, France is the leading country in nuclear safety expertise and can call on a vast number of experienced professionals in the field.
France has painful memories of radioactive contamination, and the country’s government has a history of nuclear cover-ups.
During the Chernobyl disaster, French authorities “deliberately suppressed information about the spread of radioactive fallout.” In parts of France, thyroid cancer surged as the population didn’t take steps to protect itself having believed their government that the radiation cloud was harmless.
“Two independent physicists say in the report that the state-run Central Service for Protection against Radioactive Rays (SCPRI) knew of high levels of contamination in Corsica and southeastern France but kept the details under wraps,” reported Expatica.com.

9/11: A Conspiracy Theory

Blast at French nuclear site kills one, no leaks

MARCOULE, France (Reuters) - A worker was killed in an explosion at a French nuclear waste site on Monday, but officials said there was no radioactive leak and the authorities quickly declared the emergency over.
Four people were also injured, one with serious burns, in the blast at the Centraco site, owned by French power utility EDF and adjacent to the Marcoule nuclear research center on the river Rhone near the southern city of Orange.
The area no longer houses nuclear reactors. But supervisory bodies opened inquiries into the incident, which dented EDF's share price. In the wake of this year's Fukushima disaster in Japan, it was also likely to provide further arguments for opponents of France's heavy reliance on nuclear energy.
EDF, which a regulator said had improved safety at the site since being criticized in 2008, said the blast was contained within a furnace that was used to melt down scrap metal, from nuclear plants, which emitted only low levels of radiation.
"There was an explosion at the Marcoule site at 1306 (1106 GMT) causing one death and injuring four," an EDF spokeswoman said. "We don't know the cause."
Later, an executive from the plant operator, EDF subsidiary Socodei, called it a "classic industrial accident" which would most likely be classified as Level 1 on the seven-point international scale of nuclear incidents.
France's ASN nuclear safety watchdog declared the incident over but has launched an inquiry. The International Atomic Energy Agency, was seeking information from France and activated its incident and emergency center.
Data on previous fatal accidents at French nuclear plants were not available but officials said they could not recall one.
"NO CONTAMINATION"
Police cordons kept onlookers away on Monday. Journalists saw police and other emergency vehicles at the site. There was no obvious sign of damage or smoke.
Local emergency services said there were no traces of radiation on the four people injured: "The risk of fire is over and there is no radioactive or chemical contamination of either the interior or exterior of the site," a rescue worker said.
Police also said there was no contamination outside the Centraco complex, which has been in operation since 1999.
Employing some 350 people, it melts down scrap metal such as valves and pumps used in nuclear plants and burns combustible waste in an incinerator, according to Centraco's website.
France, which draws 75 percent of its electricity from nuclear plants, is carrying out stress tests on its 58 reactors in the aftermath of the Fukushima disaster, when the Japanese nuclear site was damaged in an earthquake and tsunami.
Kash Burchett, European energy analyst at IHS Energy, noted a poll in June found 77 of French voters opposed to building new nuclear plants. But she said trade unions, as well as businesses facing higher fuel costs, would be unlikely to accept any move by a future government to curb investment in nuclear power.
"Even if a government of any hue were to attempt to slow investment into new nuclear facilities, let alone phase out existing capacity ahead of schedule, they would come up against the powerful, militant French unions," she said.
"Equally, the loss of nuclear power would increase energy costs substantially for households and businesses alike."
In its 2010 annual report, the ASN said that in 2008 it identified some weak spots in the Centraco site that prompted it to ask for an action plan to improve safety. It said the situation had improved since then at the site.
Malcolm Sperrin, director of Medical Physics and Clinical Engineering at the Royal Berkshire Hospital in Reading, England said: "It is unlikely that there will be significant, or any, releases of radiation into the wider environment but this will need to be confirmed in the next few hours or days."
(Additional reporting by Marion Douet, Mathilde Cru and Muriel Boselli in Paris and Kate Kelland in London and Scott DiSavino in New York; Writing by Catherine Bremer; Editing by Alastair Macdonald)

Ranting Andy: The Last Refuge of Central Bankers . . . Prayer

RANTING ANDY – Despite the unabashed support of the PPT, August was one of the Dow’s WORST MONTHS EVER.  “Summer doldrums” are typical during a period of “normal” economic activity, but DECIDEDLY NOT amidst an ALL-OUT COLLAPSE of the GLOBAL economy.
And please notice a VERY important change in my macro viewpoint; I am no longer forecasting collapse of the WESTERN economy, but the ENTIRE GLOBAL ECONOMY.  Just as I reached a “Eureka Moment” last month when I decided that even hyperinflationary monetary policy cannot prevent a stock market CRASH, I have now concluded there is NO WAY that even the Chinese economy can be immune to a Western economic implosion.

Don’t believe me?  Then take a look at the below charts of the ETFs holding the largest Chinese industrial companies and the largest American financials.  Not only are they similar, but I needed to do a double-take to make sure I hadn’t copied the same chart twice!


These two ETFs represent some of the largest and most economically strategic companies in the world, and both look ready to COLLAPSE imminently, to at least the lows of late 2008 (amdist GLOBAL MELTDOWN I), and more likely still lower levels.
And if that doesn’t properly scare you, look at the below charts of some of Europe’s LARGEST BANKS, which had the EXACT same charts as the two shown above until swan diving in recent weeks.  Yes, readers, these charts likely presage what NEARLY ALL financials are about to look like, such as MAJOR BANKS in….
….Germany….

…France (UGGHH, BELOW the 2008/2009 LOW!)….

…England…


…with white shoe snob outfit Lloyd’s of London also BELOW its 2008 LOWS!

…Spain…


…Italy (Unicredit about to break 2008 lows, with only $0.80 left until bankruptcy!)…

…Switzerland…

….and of course, GREECE, which may have officially DEFAULTED by the time you read this RANT…

In my August 26^th RANT, “The Coming Fall to Remember”, I predicted that IMMEDIATELY after Labor Day, markets would implode on heightened economic fears.  With GLOBAL economic activity in freefall, as well as stocks of the world’s largest international banks, it didn’t take rocket science to forecast that traders returning from August vacations would have trigger-happy selling fingers, and sure enough, the first week of September was an unmitigated disaster.
On average, Asian stocks fell more than 2%, as did the HEAVILY PPT-SUPPORTED Dow, while in Europe, stocks fell a whopping 6% on fears of the imminent collapse of the Eurozone, which WILL happen VERY, VERY soon.  Sovereign interest rates soared, as did credit default swaps on essentially every European sovereign, municipality, and bank, and gold rose through $1,900 three separate times (fought back each time by CARTEL “DEATH STAR” tactics), only to settle roughly unchanged as it prepares to ROCKET through $2,000 in the coming weeks.  Moreover, the week couldn’t have ENDED worse, with global markets COLLAPSING the day after Obama’s pathetic speech proposing a $447 billion “jobs bill” while Congress simultaneously (almost to the MINUTE) raised the debt ceiling by another $500 billion, officially putting it above U.S. GDP for the first time ever.
Rumors of a Greek sovereign default permeated the internet all week, an event that WILL happen this fall, perhaps as soon as this weekend.  In fact, it looks like austerity riots have re-commenced already, and frankly ANYONE that believes Greece has a PRAYER of economic survival needs to have their head examined.  A Greek sovereign default will cause an IMMEDIATE CHAIN REACTION OF FINANCIAL IMPLOSION across Europe, triggering payouts on TENS OF BILLIONS OF TOXIC CREDIT DEFAULT SWAPS, cascading into write-offs of TENS OF BILLIONS OF WORTHLESS GREEK DEBT, and setting the stage for the COLLAPSE OF THE EURO as the last-ditch EFSF bailout fund crumbles into oblivion.
Such events would in turn yield a global, all encompassing financial tsunami that would waste all but the strongest banks in its wake, likely including ALL the major U.S. banks such as Goldman Sachs, JP Morgan, and Citigroup.  By the way, take a look at their charts and compare them to those above.  Yes, they are staring into the same abyss.



…and don’t forget Warren Buffet’s favorite stock, Bank of America!

Which brings me to the topic of this RANT, the existential concept of PRAYER.
Quantitative Easing has accelerated GLOBALLY for the past THREE YEARS, yet somehow we are led to believe an OFFICIAL commencement of QE3 in America will somehow matter.  Two weeks ago, the Pollyana media espoused the market was ‘waiting with baited breath’ for Bernanke’s Jackson Hole speech, as if he could somehow reverse decades of decay by announcing QE3, but he disappointed by essentially saying he’ll announced it on September 21^st, a whopping three weeks hence.  Yesterday, we were told the G-7 would SAVE THE DAY by announcing “GLOBAL QUANTITATIVE EASING” at their tax-payer funded boondoggle in Marseilles this weekend, but all they wound up stating were these UNBACKED platitudes:
Central Banks stand ready to provide liquidity to banks as required. We will take all necessary actions to ensure the resilience of banking systems and financial markets.
We reaffirm our shared interest in a strong and stable international financial system, and our support for market- determined exchange rates.
Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability, and we will consult closely in regard to actions in exchange markets and cooperate as appropriate.
Ah, what a beaut!  They agreed on absolutely NOTHING, other than to put out a CHEERLEADING STATEMENT!  Moreover, if you want to see just how STUPID these “leading bankers” are, look at the blatant contradiction of the last two sentences, first stating the G7 supports market-determined exchange rates, and directly afterwards stating that market-determined exchange rates can be dangerous, and thus they will blatantly, in a coordinated manner, MANIPULATE them further.  As if the Japanese and Swiss Central Bank devaluations of the past two weeks weren’t enough!
Even better, after reading this article about the G7 proceedings (http://english.irib.ir/news/political/item/79311-g7-meeting-held-in-marseilles), it appears it was nothing more than a giant arguing session.  The ministers admitted the problems were much broader than 2008, that the individual nations’ had dramatically different aims, and that further meetings were required due to deep concerns regarding the economic viability of the Eurozone.
Furthermore, according to ZeroHedge, LATE FRIDAY NIGHT the IMF activated a $580 billion bailout fund (all PRINTED MONEY, by the way) which, via their own bylaws, is only to be activated to “forestall or cope with a threat to the international monetary system.”
So you tell me readers, what ammo is left to the bankers except PRAYER?
The answer, of course, is NOTHING, and that is exactly what the GLOBAL FINANCIAL MARKETS are about to realize, perhaps as early as this week.  Regarding my aforementioned “Eureka moment”, I believe global markets will start to reflect, in VERY SHORT ORDER, the HOPELESSNESS of the Eurozone’s financial situation, particularly in its weakest link Greece, the invetible all-out collapse of the U.S. economy, the insolvent nature of essentially ALL the Western money-center banks, and the utter WORTHLESSNESS of the fiat currencies behind them.
Conversely, they will realize, perhaps simultaneously, what I and other “goldbugs” have been stating for the past decade, that ONLY GOLD AND SILVER ARE MONEY.  When this happens, the parabolic stage will officially commence (to the chagrin of top callers everywhere), and don’t be surprised if gold and silver coins and bars go “no offer” a lot sooner than you think.
Please take proper measures to PROTECT YOURSELF AND YOUR FAMILY AND FRIENDS now, as once this Eureka moment goes VIRAL, it will become far more difficult to do so, and potentially impossible under the worst case scenario.

Rumsfeld on September 11th 10 Years Later

We disagree with virtually everything you are about to hear and read, but it's important to know what the neo-con troglodytes are saying.

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Former Defense Secretary Donald Rumsfeld warned that it will only be a matter of time before America endures another terrorist attack if Congress ends up blaming the defense budget for this country’s red ink woes. “The Department of Defense is not what’s causing the debt and the deficit. It’s the entitlement programs,” he told HUMAN EVENTS in an exclusive interview. “If we make that mistake, we’re doomed to suffer another attack of some kind, and our intelligence will be less strong and less effective.”

Before legislators attempt to take out the nation’s crushing debt on the Defense Department, they must understand that spending on the military is low compared with historical averages, said Rumsfeld. He noted that military spending from Eisenhower though LBJ topped 10% of the gross domestic product (GDP), far less than today’s 4.7%.

President Obama has already imposed $400 billion in military cuts, and there could be $800 billion more in slashing to follow in the very near future if congressional leaders do not agree on a debt-reduction deal.

Rumsfeld stressed that the military cuts looming today may be similarly disastrous to those that occurred at the end of the Cold War—a precursor, he claims, to creating the vulnerable environment that bred 9/11. The mindset then was, “we can cut the defense budget, we cut the intelligence budget, and we’ll be okay. The answer was that we weren’t okay. We didn’t have the kind of intelligence capability we needed.”

Continue reading...

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Economy Enters Dangerous New Phase

Greg Hunter
USA Watchdog

The head of the International Monetary Fund, Christine Largarde, said Friday the world economy is entering a “dangerous new phase.”  Lagarde is referring to a debt bubble, the likes of which the planet has never seen before, and the possibility that it could all unravel at any moment.  Uncertainty over the debt crisis in Europe is what caused the Dow to crash more than 300 points at the end of last week.   What is Lagarde going to do about the debt problem?

A CNBC story reported, “She warned that both advanced and emerging economies faced key economic challenges, and that governments must ‘act now’ to stop further contagion.  ‘Policymakers should stand ready, as needed, to take more action to support the recovery, including through unconventional measures,’ Lagarde said.”  (Click here to read the complete CNBC story.)  Lagarde is surely talking about revving up the global printing presses for more bailouts.

Meanwhile, the Germans are talking about letting countries like Greece go bankrupt.  Another CNBC story yesterday said, “Even senior figures in Merkel’s conservative Christian Democrats (CDU) are leaving open the possibility of default.  ‘The way things are looking, you can no longer rule out a possible Greek restructuring,’ CDU budget expert Norbert Barthle told Reuters, when asked about a default or euro zone exit.”  (Click here for more on this CNBC story.)  So which is it?  Will it be bailout or default?  Who knows, maybe a little of both before it is all over.

A post on Zerohedge.com Friday may give the answer.  It reported, “Wondering what is next for Europe? Don’t be. With Jurgen Stark, aka the last real hawk at the ECB, gone, here comes “the printing.” SocGen’s (Societe Generale) Dylan Grice explains.  From SocGen:  Suppose that Italy or Spain get caught up in the whirlwind like Greece, Ireland and Portugal, as threatened to happen last month. Maybe the Italian political situation deteriorates, maybe Ireland defaults, maybe Greece will go revolutionary, or maybe an ill-advised wayward comment from an influential European politician will spook markets and send them into renewed tailspin. We don’t know which of these will happen, if any. All we know is that these are some of the many plausible triggers for a further deterioration in this fragile situation.”  (Click here for the complete post from Zerohedge.com.)

That “fragile situation” would mean a panic set off by an impending debt implosion, but SocGen’s Grice says the powers will not allow it to happen.  In the end, there will be a burst of money printing to stave off insolvency that has already infected many European banks.

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The Mathematics Of Austerity: Proving Austerity Never Was Even Intended To Work

For some time I have said the following of debt based money systems as practiced by the Federal Reserve and the Bank of England:
It has never worked. It cannot work. It will never work. And it was never even intended to work. What is was intended to do is to take all the money from those of us who labor for a living and those who own small businesses and farms or work in professions. And give every last dollar, pound and euro from our savings, our pensions and our paychecks and give it to the bankers who gave unto themselves the privilege to print our money.
Substitute the word Austerity for debt based money system in the above and every last word will still ring true. The bankers know the Austerity programs they are advocating for Europe and America will not work and cannot work. What they will do is to transfer all of our remaining wealth to billionaire bankers. We are headed to The Second Great Depression which will be far worse than 1929-1939 and could be called The Greatest Starvation.
A Note: What you are about to read will be disturbing. But read on as you need to understand what is really happening so you can appreciate the solutions I promise to cover in my next essay.
Let me explain why Austerity budgets will never work in such simple terms that even a Presidential candidate will understand.
Let us begin with the definition of Gross National Product or GNP. It measures the total value of goods and services consumed in a nation. America’s GNP is a little over 14 trillion dollars. The total US public bond debt limit has been raised to just over 15 trillion dollars. If you add the government guaranteed bonds of Fannie Mae, Freddie Mac and the like, the total is 20 trillion dollars in round numbers.
First year economic students like some of those American Presidential candidates were taught that the GNP equals the total of Consumption plus Investment plus Government spending or GNP = C + I + G. By the rules of mathematics, if I subtract the same amount from both sides of the equation both sides will still equal each other. Enter the US Congress or your favorite European parliament and their Austerity measures.
The US deficit is always higher than the projected figure. I remember Obama proudly saying that the US deficit was only 1.4 trillion dollars for the previous year. But the total of bonds sold was more than 1.8 trillion dollars. Let’s be generous and assume Obama’s 2011-2012 budget deficit including a few hundred billion in Off Budger items is a mere 1.7 trillion dollars despite declining revenues, an insane stimulus program and looming Bailouts for the bankers. To balance the budget all we have to do is to cut 1.7 trillion dollars from both sides the above equation. Let’s see what happens:
GNP suddenly equals 12.4 trillion dollars. The G of C plus I plus G is cut 1.7 trillion dollars. What have we done? The gross interest on the debt is a little over 500 billion dollars. A quick glance at Wikipedia tells us that the total non-defense discretionary spending was 660 billion dollars. So let’s subtract 660 from 1,700. This means our Austerity fiends only have another one trillion and forty billion to cut. We must pay the interest on the debt so what is left. They can cut Medicare and Medicaid ($793B) by 500 billion and Social Security ($701B) by 500 billion.
Gee. You say that sounds a bit rough. Food Stamps would have to be eliminated for 48 million recipients as part of the 660 billion in discretionary spending. Food Stamps cost 65 billion dollars last year and food prices have gone up at least 39% over the past few years. But our Austerity budget must cut out the whole 65 billion despite the rapid increase in unemployment. If we use the real definition of unemployment Ronald Reagan had when he took office in 1981, the true unemployment rate is 23% for America and over 30% for California.
Let us proceed to the Social Security budget. 500 billion needs to be cut from 701 billion leaving us with a stupendous sum of 201 billion dollars. We can estimate all we need to do is to cut 5 of every 7 dollars from the average recipient’s check. Suppose a woman is receiving a check for $1,050 a month. If we cut her check by 5/7ths, she will now have a munificent sum of $300 a month. There will be no subsidized housing as that was eliminated along with Food Stamps. And utility bills are rising because Obama is a Globalist and wants to cut back on energy usage by raising fees. Of course those fees are funneled into the hands of bankers. She and most of the other 59,000,000 plus other Social Security recipients will have to move out into the streets. They will probably hang out at the library or the local McDonalds to keep warm.
Of course the fly in the ointment is the cancellation of Food Stamps and extended unemployment insurance. That will set off permanent riots from more than 50 million younger people with nothing to eat. But in America state and local police are funded by local taxpayers so the riots will not increase the federal budget outside of Washington D.C.
Now let us proceed to even bigger Austerity cuts. Chinese people have been saying they might as well just load all their exports to America into containers and dump them in the sea. It would save them on fuel and avoid the problem of trying to get rid of those Federal Reserve Notes or Bernanke Bucks. The US has bought 8 trillion dollars from overseas without giving fair value in trade or exchange since 1975.
Our next equation starts with the definition of GDP or Gross Domestic Product. You remember GNP is the total of goods and services consumed. If we subtract Imports M and add Exports X, we get GDP or Gross Domestic Product which tells us how much we are actually producing rather than consuming. That is written as GDP = GNP + X – M.
Enter Dr Michael Hudson, an economist, who is staunchly anti-war and anti-Wall Street. (Aren’t they the same?) Hudson wanted to accuse Obama of the worst thing imaginable so he called him a Republican. He also said Obama’s solution to the unemployment problem (23%) and our trade deficit (373 billion dollars so far in 2011) is to cut wages 30%. This will most likely be done by raising prices of imported goods like oil, clothes, food and consumer goods.
Let us see what happens to the average American worker. The median hourly wage for an American is $16.27. The median is defined as the 51st man in a group of 101 ranked by income. This gives us a better idea of what real people are earning than would the average income. Suppose you included a Goldman Sachs employee whose average pay is $750,000 a year in that group of 101 people. The resulting average income figure would not tell us what challenges the other 100 were facing.
Our average man’s after tax wage discounted for inflation has been declining steadily since 1970. Depending on his age, his parents or certainly his grandparents have been kicked out into the streets from the Social Security cuts. He might have a sister who is divorced, has two children and used to receive Food Stamps. Now they are all at his house asking for help with shelter, utility bills, food and medicine. Remember that medical care to the poor and to the elderly was savagely cut. Now prices are raised sufficiently to cut his gross $16.27 hourly rate down to $11.39 without cutting the total amount of taxes withheld from his check. His paycheck will in the common American parlance really suck. Now that Globalist plan to double his utility bill does not sound so good. And the increase in prices for food, energy and clothing combined with cuts to medical care has even further exacerbated his situation with poor relatives who will quite literally soon be dying of starvation.
And do not forget his sister whose pay was also cut 30% while simultaneously losing maybe $400 a month in Food Stamps. That is why I deliberately chose the words The Great Starvation to better describe The Second Great Depression. Needless to say, any business selling anything including food to Americans will fail. Corner grocery stores will be robbed blind by more than a hundred million hungry Americans. Americans must have at least 300,000,000 guns and way more than 10 billion bullets so the policy of having the police shoot the poor won’t last long.
We have not reached the end of our Austerity cut woes. Enter Steve Keen, the Australian economist, who has something really important to say about debts and Austerity cuts. Keen points out the obvious fact that if you stack debts into one pile and incomes into another pile, cutting wages will only make the burden on the average tax payer-worker relatively bigger so we will never pay off our debts. I might add that in the previous step when Obama’s banker buddies successfully cut your wages by at least 30%, they did that by devaluing the dollar. When they devalued the dollar, they will have to offer US Treasury bondholders substantially higher interest rates. That means the 500 billion dollars a year in gross interest payments of the federal debt will easily go to a trillion and then within 2 years to 2 trillion dollars or more. I do not think you will like the second and more savage round of tax increases and Austerity cuts on top of the above. An additional two trillion dollars in cuts and tax increases will destroy what was left of western civilization.
Congratulations. You are now ready for the final step. You must conclude that these debts were created to reduce us all to slavery. Let that fact sink in. There is no combination of tax increases and Austerity cuts that will solve our problems. Now you are ready accept this:
The Fundamental Fact of Your Existence as a modern man or woman is that the bankers of New York and London want to reduce you to debt slavery.
Accept that fact and move on to the solution.
You should ponder the fact that I have said we could call this Second Great Depression the Great Starvation. I have previously said that the bankers have a solution to the problems of mass starvation, grinding poverty, daily food riots and rebellions by the poor. They plan to release a series of plagues that will kill billions of people. Any rioters seeking vengeance on those bankers in Manhattan, the City of London or elsewhere will flee from the sight of other people as soon as they see tens of thousands of people falling over dead from some new kind of fatal flu.
I might also repeat my warning that they can use DNA to target specific races who cause too many problems or have natural resources like oil, water, gold, silver, food and other commodities they would want to take away from you.
You live in a land ruled by bankers. You must learn to think like a banker to understand what is really happening. Bankers see assets and liabilities where you see your friends, your family and your neighbors.
Do not despair. There are solutions. You need to understand the world as it is before you have sufficient motivation and understanding to change things for the better.
I will write of the solutions in my next essay which I will post in a couple of days.
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Germany bracing for Greek default

A new economics adviser to German Chancellor Angela Merkel's government was quoted yesterday saying Greek debt would need rescheduling or restructuring, while increasing the euro rescue fund would be difficult for Germany.
Lars Feld, an economist picked by the cabinet for its team of "wise men," was quoted by German media saying that some form of rescheduling of Greek debt was inevitable. "I don't believe Greece will manage without a cut in its debt. And then German guarantees will be needed," Handelsblatt's website quoted the 44-year-old director of the Walter Eucken Institute in Freiburg as saying.

Die Welt quoted the economics professor saying: "I know hardly anyone who believes Greece can make it on its own."
Earlier yesterday, the German government denied reports it was planning for a Greek debt rescheduling, though sources said the German finance ministry was working on contingency plans in case Greece has to default or restructure.
Feld said the German government should take precautions to ensure that any fiscal impact from providing guarantees for this does not violate the new German "debt brake" law. This law, which came into effect at the beginning of 2011, stipulates that Germany has to cut its structural deficit to 0.35% of gross domestic product by 2016.
"So only if the finance minister plans for an outcome and makes appropriate savings will he avoid coming into conflict with the debt brake law," Feld was quoted as saying.
The Frankfurter Allgemeine Zeiting quoted Feld saying Greece and Ireland would need debt rescheduling or restructuring rather than long-term rescues. He also said, according to the Frankfurter, that raising the European Financial Stability Facility, a euro-zone rescue fund set up in May, would involve "costs and risks" for Germany. In the Die Welt interview, he said there were already signs the interest Germany has to pay for debt has risen recently.

China paper tells U.S. not to play with fire over Taiwan

(Reuters) - China's top official newspaper warned on Friday that "madmen" on Capitol Hill who want the United States to sell advanced weapons to Taiwan were playing with fire and could pay a "disastrous price," as the Obama administration nears a decision on a sale.
The People's Daily, the main paper of China's ruling Communist Party, said the United States should excise the "cancer" of the law which authorizes Washington's sale of weapons to the self-ruled island of Taiwan that China considers its own territory.
Taiwan's biggest ally and arms supplier, the United States is committed under a 1979 law to supply it with the weapons it needs to maintain a "sufficient self-defense capability."
Taiwan hopes to buy 66 late-model F-16 aircraft from the United States, a sale potentially valued at more than $8 billion and intended to phase out its remaining F-5 fighters.
The arms sale debate has been building steam in the United States, with U.S. Senator John Cornyn, a Republican from Texas, where Lockheed Martin Corp manufactures the F-16, saying killing the sale would cost valuable U.S. jobs.
"At present, some madmen on Capitol Hill are making an uproar about consolidating and expanding this cancer," the People's Daily said in a commentary, adding these politicians were "wildly arrogant."
"If these crazy ideas come to fruition, what kind of predicament will Sino-U.S. relations find themselves in?" the paper wrote.
The commentary appeared under a pen name "Zhong Sheng," a name suggesting the meaning the "voice of China," which is sometimes used to reflect higher-level opinion.
While China and the United States have sparred over everything from trade, Tibet and the internet over the past few years, ties have improved drastically following President Hu Jintao's visit to the United States in January.
Relations between the world's two largest economies have "not easily reached the point where they are today, and need to be cherished and protected to the greatest extent," the commentary wrote.
"Some people want to turn back the tide of history, but they must be clear about the disastrous price they will have to pay," it added.
"A word of advice for those muddleheaded congressmen: don't go too far, don't play with fire."
U.S. President Barack Obama is due by October 1 to say what, if anything, his administration plans to do to boost Taiwan's aging air force.
Beijing strongly opposes the potential arms sale to the island it deems an illegitimate breakaway province. But Taiwan says it needs the jets to counter China's growing military strength.
The request for the new F-16s has been pending informally since 2006. Taiwan in 2009 also requested an upgrade to its 146 old F-16 A/B models. Then-President George H.W. Bush sold Taiwan its first F-16s in 1992.
Analysts have told Reuters a full package of new jets is unlikely to be approved by the Obama administration, but that it may instead offer Taiwan an upgrade on existing F-16A/B jets worth up to $4.2 billion.
(Reporting by Ben Blanchard; Editing by Nick Macfie)

The Day The Bush War on Terror Began

It did not need to come to this. 

Ed. Note /by Debbie Menon

James Wall identifies the distortion and deception completely… “it did not need to come to this,” but through the gross and brutal distortion of a dreadfully unspeakable event, and turning a memorial and a rallying point into a marching banner for more of the same, leaders have betrayed their offices, their people and themselves as human beings.
The fact that some of them, like Robert Gates  and others, can discuss these betrayals after they leave office, indicates that they were aware of the nature of their crimes while in office.
Furthermore, although they voice outrage and anger, they have done absolutely nothing about it.  What in hell are American taxpayers paying them for, anyway? All the right reactions, for the wrong reasons…. and inadequate responses!
Political and personal expedient in the power game of dominance over other men!

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The Day The Bush War on Terror Began

by James M. Wall

President George Bush’s War on Terror began ten years ago, September 11, 2001.
Murderous crime scenes in New York, Washington, and Pennsylvania, became spiritual staging grounds for an international war against what Time’s Tony Karon describes as “a tiny network of transnational extremists, founded on the remnants of the Arab volunteers who’d fought in the U.S.-backed Afghan jihad against the Soviet Union.”
It did not need to come to this.
The attacks on the US could have been a time to reinvent ourselves as a united people, bound together in our common grief.  But politicians, supported by a national media that was far more concerned with drama of what happened than why it happened, began to shape a different future, a worldwide attack on Islam.
Our crime scenes of death became shrines of memory designed not to mourn the dead, but to serve as spiritual support bases for the Bush War on Terror. The deaths of more than 3000 victims were exploited to create an evolving  narrative of  permanent international warfare.
Frank Rich wrote in New York magazine August 27, 2011:

The hallowed burial grounds of 9/11 were supposed to bequeath us a stronger nation, not a busted one. We were supposed to be left with a finer legacy than Gitmo and the Patriot Act. When we woke up on September 12, we imagined a whole host of civic virtues that might rise from the smoldering ruins.

Rich reminds us that Bush, a “still-green president” had a “near-perfect approval rating for weeks”. The nation was ready to build “a selfless wartime patriotism built on the awesome example of those regular Americans who ran to the rescue on that terrifying day of mass death, at the price of their own health and sometimes their lives”.
Instead we got “another hijacking—of 9/11 by those who exploited it for motives large and petty, both ideological and crassly ­commercial”.

The most lethal of these hijackings was the Bush administration’s repurposing of 9/11 for a war against a country that had not attacked us. So devilishly clever was the selling of the Saddam-for-Osama bait-and-switch that almost half the country would come to believe that Iraqis were among the 9/11 hijackers.

Joseph E. Stiglitz, University Professor at Columbia University, wrote in a posting, The Price of 9/11: “President George W. Bush’s response to the attacks compromised America’s basic principles, undermined its economy, and weakened its security”.
Three years ago, when Stiglitz, a Nobel Prize winning economist, and a colleague, examined the costs of the Bush wars, their conservative tally was $3-5 trillion. Since then, he writes, the costs have mounted.

With almost 50% of returning troops eligible to receive some level of disability payment, and more than 600,000 treated so far in veterans’ medical facilities, we now estimate that future disability payments and health-care costs will total $600-900 billion. But the social costs, reflected in veteran suicides (which have topped 18 per day in recent years) and family breakups, are incalculable.

One glaring reason why the Bush-Cheney war machine could shape public opinion with such impunity in 2001 is that the main stream media had abandoned its journalistic responsibility to talk truth to power.
Looking back over my own 2001 files from those immediate post 911 months, I found a remarkable exception to that total media capitulation, a Newsweek essay published on November 18, 2001. The essay was written by David Gates under the headline, “The Voices Of Dissent”. The Daily Beast, Newsweek’s current online presence, has the essay on its site, here. Gates writes:

Since September 11, political dissent has seemed a decadent luxury, rather than a democratic necessity. The new united-we-stand orthodoxy holds that we’re all engaged in a war of unquestionable good against inexplicable evil–that, in fact, the attempt to understand the enemy’s perception of us is disloyal–and that bombing Afghanistan, approved by 90 percent of Americans, is both morally and practically justified.
These assumptions are worth questioning, if only for prudential reasons. But our official opposition party has signed on; so have most of the world’s leaders. And again, [few contemporary] writers get with the program.

Gates found, with some searching I imagine, John le Carre and Alan Gurganus, both of whom had written “to critique the war and the United States’ arrogance”
The most audible voices Gates identified, however, were those of Susan Sontag and Barbara Kingsolver, and the Indian novelist Arundhati Roy.
Sontag, the essayist and author of the National Book Award-winning In America: A Novel, drew a bizarrely fierce reaction for a 473-word New Yorker piece. She called the president “robotic” and added that the attacks were motivated by “specific American alliances and actions”.  Gates does not specify those allies and their actions, but ten years later it is possible to surmise she may have been alluding to Israel.
Gates writes further that since September 11, Kingsolver “has been pouring out editorials and essays”.

Her dissent, like Roy’s, is both moral and practical. “If our goal is to reduce the number of people in the world who would like to kill us,” she says, “this is not the way to go about it.” She resents having her patriotism impugned. “I’m speaking out because I’m a patriot,” she says.
“Because I love my country and I want it to do the right thing.” And she also resents being told–as she has been lately–that she should stick to writing novels. “It’s a nasty slap down that’s been used against those of us, particularly Arundhati Roy, who have spoken out,” Kingsolver says.
“As if the fact of our being novelists disqualified us for any other sort of speech. I can’t make any sense of that. Words are my tools. Words are what I have to offer.”

In that same 2001 file folder I found a column I wrote for the Christian Century‘s December 12, 2001, issue. It is available on the Century web site. Cick here for the full column.
I quoted from the David Gates Newsweek essay, and added  these observations on how Bush’s War on Terror looked to me, and to many more Americans who were not being heard, in 2001.

Meanwhile, the president’s repeated insistence that the war against terror will last a long time indicates that he is listening to those who want him to extend the war to all nations that “harbor” what Secretary of Defense Donald Rumsfeld, who has seen too many movies, likes to call the “bad guys.”
Rumsfeld’s deputy Paul Wolfowitz, White House officials Condolezza Rice, Karl Rowe and Karen Hughes, and chairman of the president’s Defense Policy Board, Richard Pearle, are urging Bush not to stop with Afghanistan.
New Yorker writer Peter J. Boyer reports that Newt Gingrich, a member the President’s Defense Policy Board, is urging the president to “confront Iraq even while the engagement in Afghanistan continues, and go after terrorist operations in Somalia and Sudan as well.”

I called my December 12, 2001 column, A Moral Squint: Bombs and Chaos. The column began:

After a particularly heavy U.S. bombardment of the city of Kunduz, al-Qaeda and Taliban fighters initially refused to surrender. Northern Alliance factions argued over how to arrange the surrender of Kunduz, provoking one U.S. official to describe the situation in and around the city as “chaotic.”
His word reminds me of an exchange in Robert Bolt’s A Man for All Seasons. Cardinal Thomas Wolsey demands that Thomas More support a papal dispensation so that King Henry VIII can legally divorce his queen, who has failed to produce a male heir.
When More refuses to intercede with the pope, the cardinal says, “You are a constant regret to me, Thomas. If you could just see facts flat on without that horrible, constant moral squint. With a little common sense you could have made a statesman.”
To which More replies: “I think that when statesmen forsake their own private consciences for the sake of their public duties they lead the country by a short route to chaos.”

Our nation needs the wisdom of  writers these days who possess a “moral squint” and don’t hesitate to write and speak about it.
The picture at the top was taken September 11, 2001 by Marty Lederhandler for the Associated Press.  It ran on Tony Karon’s Time blog on September 8, 2011. The Empire State Building is in the foreground; the burning twin towers are at  the right.

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James Wall is currently a Contributing Editor of The Christian Century magazine, based in Chicago, Illinois.  From 1972 through 1999, he was editor and publisher of the Christian Century magazine.  He has made more than 20 trips to that region as a journalist, during which he covered such events as Anwar Sadat’s 1977 trip to Jerusalem, and the 2006 Palestinian legislative election. He has interviewed, and written about, journalists, religious leaders, political leaders and private citizens in the region.  Jim served for two years on active duty in the US Air Force, and three additional years in the USAF (inactive) reserve. He can be reached at:  jameswall8@gmail.com.

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