101 Ways To Annoy People (Just for fun)
1. Sing the Batman theme incessantly.
2. In the memo field of all your checks, write "for sensual massage."
3. Specify that your drive-through order is "to go."
4. Learn Morse code, and have conversations with friends in public consisting entirely of "Beeeep Bip Bip Beeep Bip..."
5. If you have a glass eye, tap on it occasionally with your pen while talking to others.
6. Amuse yourself for endless hours by hooking a camcorder to your TV and then pointing it at the screen. <
7. Speak only in a "robot" voice.
8. Push all the flat Lego pieces together tightly.
9. Start each meal by conspicuously licking all your food, and announce that this is so no one will "swipe your grub".
10. Leave the copy machine set to reduce 200%, extra dark, 17 inch paper, 98 copies.
11. Stomp on little plastic ketchup packets.
12. Sniffle incessantly.
13. Leave your turn signal on for fifty miles.
14. Name your dog "Dog." 15. Insist on keeping your car windshield wipers running in all weather conditions "to keep them tuned up."
16. Reply to everything someone says with "that's what YOU think."
17. Claim that you must always wear a bicycle helmet as part of your "astronaut training."
18. Declare your apartment an independent nation, and sue your neighbors upstairs for "violating your airspace".
19. Forget the punchline to a long joke, but assure the listener it was a "real hoot."
20. Follow a few paces behind someone, spraying everything they touch with Lysol.
21. Practice making fax and modem noises.
22. Highlight irrelevant information in scientific papers and "cc:" them to your boss.
23. Make beeping noises when a large person backs up.
24. Invent nonsense computer jargon in conversations, and see if people play along to avoid the appearance of ignorance.
25. Erect an elaborate network of ropes in your backyard, and tell the neighbors you are a "spider person."
26. Finish all your sentences with the words "in accordance with the prophesy."
27. Wear a special hip holster for your
remote control.
28. Do not add any inflection to the end of your sentences, producing awkward silences with the impression that you'll be saying more any moment.
29. Signal that a conversation is over by clamping your hands over your ears.
30. Disassemble your pen and "accidentally" flip the ink cartridge across the room.
31. Give a play-by-play account of a persons every action in a nasal Howard Cosell voice.
32. Holler random numbers while someone is counting.
33. Adjust the tint on your TV so that all the people are green, and insist to others that you "like it that way."
34. Drum on every available surface.
35. Staple papers in the middle of the page.
36. Ask 1-800 operators for dates.
37. Produce a rental video consisting entirely of dire FBI copyright warnings.
38. Sew anti-theft detector strips
into peoples backpacks.
39. Hide dairy products in inaccessible places.
40. Write the surprise ending to a novel on its first page.
41. Set alarms for random times.
42. Order a side of pork rinds with your filet mignon.
43. Instead of Gallo, serve Night Train next Thanksgiving.
44. Publicly investigate just how slowly you can make a "croaking" noise.
45. Honk and wave to strangers.
46. Dress only in clothes colored Hunters Orange.
47. Change channels five minutes before the end of every show.
48. Tape pieces of "Sweating to the Oldies" over climactic parts of rental movies.
49. Wear your pants backwards.
50. Decline to be seated at a restaurant, and simply eat their complimentary mints by the cash register.
51. Begin all your sentences with "ooh la la!"
52. ONLY TYPE IN UPPERCASE.
53. only type in lowercase.
54. dont use any punctuation either
55. Buy a large quantity of orange traffic cones and reroute whole streets.
56. Pay for your dinner with pennies.
57. Tie jingle bells to all your clothes.
58. Repeat everything someone says, as a question.
59. Write "X - BURIED TREASURE" in random spots on all of someone's roadmaps.
60. Inform everyone you meet of your personal Kennedy assassination/UFO/ O.J Simpson conspiracy theories.
61. Repeat the following conversation a dozen times: "Do you hear that?" "What?" "Never mind, its gone now."
62. Light road flares on a birthday cake.
63. Wander around a restaurant, asking other diners for their parsley.
64. Leave tips in Bolivian currency.
65. Demand that everyone address you as "Conquistador."
66. At the laundromat, use one dryer for each of your socks.
67. When Christmas caroling, sing "Jingle Bells, Batman smells" until physically restrained.
68. Wear a cape that says "Magnificent One."
69. As much as possible, skip rather than walk.
70. Stand over someone's shoulder, mumbling, as they read.
71. Pretend your computer's mouse is a CB radio, and talk to it.
72. Try playing the William Tell Overture by tapping on the bottom of your chin. When nearly done, announce "no, wait, I messed it up," and repeat.
73. Drive half a block.
74. Inform others that they exist only in your imagination.
75. Ask people what gender they are.
76. Lick the filling out of all the Oreos, and place the cookie parts back.
77. Cultivate a Norwegian accent. If Norwegian, affect a Southern drawl.
78. Routinely handcuff yourself to furniture, informing the curious that you don't want to fall off "in case the big one comes".
79. Deliberately hum songs that will remain lodged in co-workers brains, such as "Feliz Navidad", the Archies "Sugar" or the Mr. Rogers theme song.
80. While making presentations, occasionally bob your head. like a parakeet.
81. Lie obviously about trivial things such as the time of day.
82. Leave your Christmas lights up and lit until September.
83. Change your name to "AaJohn Aaaaasmith" for the great glory of being first in the phone book. Claim it's a Hawaiian name, and demand that people pronounce each "a."
84. Sit in your front yard pointing a hair dryer at passing cars to see if they slow down.
85. Chew on pens that you've borrowed.
86. Wear a LOT of cologne.
87. Listen to 33rpm records at 45rpm speed, and claim the faster speed is necessary because of your "superior mental processing."
88. Sing along at the opera.
89. Mow your lawn with scissors.
90. At a golf tournament, chant "swing-batabatabata-suhWING-batter!"
91. Ask the waitress for an extra seat for your "imaginary friend."
92. Go to a poetry recital and ask why each poem doesn't rhyme.
93. Ask your co-workers mysterious questions, and then scribble their answers in a notebook. Mutter something
about "psychological profiles."
94. Stare at static on the TV and claim you can see a "magic picture."
95. Select the same song on the jukebox fifty times.
96. Never make eye contact.
97. Never break eye contact.
98. Construct elaborate "crop circles" in your front lawn.
99. Construct your own pretend "tricorder," and "scan" people with it, announcing the results.
100. Make appointments for the 31st of September.
101. Invite lots of people to other people's parties.
Wednesday, July 6, 2011
Wednesday, December 16, 2009
Monday, September 29, 2008
Protests on Wall Street - what the news media isn't showing you 62
Protests took place on Wall St. to protest the bail out plan - and the mainstream news media didn't even mention it
Hundreds of protestors demonstrated agains the proposed $700 Billion bail out plan for the finance and banking industry, yet the national news media in America didn't even report it! Why not? It seems strange that this barely generated a gander from the big news outlets like ABC, CNN, CBS, NBC etc. all of whom have a presence in New York City.
Hundreds of protestors demonstrated agains the proposed $700 Billion bail out plan for the finance and banking industry, yet the national news media in America didn't even report it! Why not? It seems strange that this barely generated a gander from the big news outlets like ABC, CNN, CBS, NBC etc. all of whom have a presence in New York City.
Friday, September 26, 2008
Let's Play "WALLSTREET BAILOUT" The Rules Are... Rep Kaptur
Let's Play "WALLSTREET BAILOUT" The Rules Are... Rep Kaptur
Thursday, September 25, 2008
Human jet' try due over English Channel
Human jet' try due over English Channel
LONDON, England (AP) -- Swiss pilot Yves Rossy is set to cross the English Channel strapped to a homemade jet-propelled wing, organizers said Thursday.
Weather permitting, Rossy will leap from a plane more than 2,500 meters (2,700 yards) off the ground, fire up his jets and try to make the 35-kilometer (22-mile) from Calais in France to Dover in England in about 12 minutes, according to a statement put out by his organizers.
In his first public demonstration of the device in May, Rossy turned figure-eights high above the Alps, performing fluid loops from one side of the Rhone valley to the other.
Thursday's trip is meant to trace the route of French aviator Louis Bleriot, the first person to cross the Channel in an airplane 99 years ago. Rossy has told The AP he one day hopes to fly through the Grand Canyon.
The carbon composite-wing weighs about 55 kilograms (121 pounds) when loaded with fuel, and carries four kerosene-burning jet turbines to keep him aloft. The wing has no steering devices -- Rossy moves his body to control its movements.
He wears a heat-resistant suit similar to that worn by firefighters and racing drivers to protect him from the heat of the turbines. The cooling effect of the wind and high altitude also prevent him from getting too hot.
Organizers said cameras installed in the launch plane, on a helicopter following Rossy, and on the jet-wing itself will relay images of the trip live online.
LONDON, England (AP) -- Swiss pilot Yves Rossy is set to cross the English Channel strapped to a homemade jet-propelled wing, organizers said Thursday.
Weather permitting, Rossy will leap from a plane more than 2,500 meters (2,700 yards) off the ground, fire up his jets and try to make the 35-kilometer (22-mile) from Calais in France to Dover in England in about 12 minutes, according to a statement put out by his organizers.
In his first public demonstration of the device in May, Rossy turned figure-eights high above the Alps, performing fluid loops from one side of the Rhone valley to the other.
Thursday's trip is meant to trace the route of French aviator Louis Bleriot, the first person to cross the Channel in an airplane 99 years ago. Rossy has told The AP he one day hopes to fly through the Grand Canyon.
The carbon composite-wing weighs about 55 kilograms (121 pounds) when loaded with fuel, and carries four kerosene-burning jet turbines to keep him aloft. The wing has no steering devices -- Rossy moves his body to control its movements.
He wears a heat-resistant suit similar to that worn by firefighters and racing drivers to protect him from the heat of the turbines. The cooling effect of the wind and high altitude also prevent him from getting too hot.
Organizers said cameras installed in the launch plane, on a helicopter following Rossy, and on the jet-wing itself will relay images of the trip live online.
Monday, September 22, 2008
Why does the US think it can win in Afghanistan?
Robert Fisk – The Independent September 20, 2008
Poor old Algerians. They are being served the same old pap from their cruel government. In 1997, the Pouvoir announced a "final victory" over their vicious Islamist enemies. On at least three occasions, I reported – not, of course, without appropriate cynicism – that the Algerian authorities believed their enemies were finally beaten because the "terrorists" were so desperate that they were beheading every man, woman and child in the villages they captured in the mountains around Algiers and Oran.
And now they're at it again. After a ferocious resurgence of car bombing by their newly merged "al-Qa'ida in the Maghreb" antagonists, the decrepit old FLN government in Algiers has announced the "terminal phase" in its battle against armed Islamists. As the Algerian journalist Hocine Belaffoufi said with consummate wit the other day, "According to this political discourse ... the increase in attacks represents undeniable proof of the defeat of terrorism. The more terrorism collapsed, the more the attacks increased ... so the stronger (terrorism) becomes, the fewer attacks there will be."
We, of course, have been peddling this crackpot nonsense for years in south-west Asia. First of all, back in 2001, we won the war in Afghanistan by overthrowing the Taliban. Then we marched off to win the war in Iraq. Now – with at least one suicide bombing a day and the nation carved up into mutually antagonistic sectarian enclaves – we have won the war in Iraq and are heading back to re-win the war in Afghanistan where the Taliban, so thoroughly trounced by our chaps seven years ago, have proved their moral and political bankruptcy by recapturing half the country.
It seems an age since Donald "Stuff Happens" Rumsfeld declared,"A government has been put in place (in Afghanistan), and the Islamists are no more the law in Kabul. Of course, from time to time a hand grenade, a mortar explodes – but in New York and in San Francisco, victims also fall. As for me, I'm full of hope." Oddly, back in the Eighties, I heard exactly the same from a Soviet general at the Bagram airbase in Afghanistan – yes, the very same Bagram airbase where the CIA lads tortured to death a few of the Afghans who escaped the earlier Russian massacres. Only "terrorist remnants" remained in the Afghan mountains, the jolly Russian general assured us. Afghan troops, along with the limited Soviet "intervention" forces, were restoring peace to democratic Afghanistan.
And now? After the "unimaginable" progress in Iraq – I am quoting the fantasist who still occupies the White House – the Americans are going to hip-hop 8,000 soldiers out of Mesopotamia and dump another 4,700 into the hellfire of Afghanistan. Too few, too late, too slow, as one of my French colleagues commented acidly. It would need at least another 10,000 troops to hope to put an end to these Taliban devils who are now equipped with more sophisticated weapons, better trained and increasingly – sad to say – tolerated by the local civilian population. For Afghanistan, read Irakistan.
Back in the late 19th century, the Taliban – yes, the British actually called their black-turbaned enemies "Talibs" – would cut the throats of captured British soldiers. Now this unhappy tradition is repeated – and we are surprised! Two of the American soldiers seized when the Taliban stormed into their mountain base on 13 July this year were executed by their captors.
And now it turns out that four of the 10 French troops killed in Afghanistan on 18 August surrendered to the Taliban, and were almost immediately executed. Their interpreter had apparently disappeared shortly before their mission began – no prizes for what this might mean – and the two French helicopters which might have helped to save the day were too busy guarding the hopeless and impotent Afghan President Hamid Karzai to intervene on behalf of their own troops. A French soldier described the Taliban with brutal frankness. "They are good soldiers but pitiless enemies."
The Soviet general at Bagram now has his amanuensis in General David McKiernan, the senior US officer in Afghanistan, who proudly announced last month that US forces had killed "between 30 and 35 Taliban" in a raid on Azizabad near Herat. "In the light of emerging evidence pertaining (sic) to civilian casualties in the ... counter-insurgency operation," the luckless general now says, he feels it "prudent" – another big sic here – to review his original investigation. The evidence "pertaining", of course, is that the Americans probably killed 90 people in Azizabad, most of them women and children. We – let us be frank and own up to our role in the hapless Nato alliance in Afghanistan – have now slaughtered more than 500 Afghan civilians this year alone. These include a Nato missile attack on a wedding party in July when we splattered 47 of the guests all over the village of Deh Bala.
And Obama and McCain really think they're going to win in Afghanistan – before, I suppose, rushing their soldiers back to Iraq when the Baghdad government collapses. What the British couldn't do in the 19th century and what the Russians couldn't do at the end of the 20th century, we're going to achieve at the start of the 21 century, taking our terrible war into nuclear-armed Pakistan just for good measure. Fantasy again.
Joseph Conrad, who understood the powerlessness of powerful nations, would surely have made something of this. Yes, we have lost after we won in Afghanistan and now we will lose as we try to win again. Stuff happens.
www.independent.co.uk/opinion/commentators/fisk/robert-fisks-world-why-does-the-us-think-it-can-win-in-afghanistan-936185.html
Poor old Algerians. They are being served the same old pap from their cruel government. In 1997, the Pouvoir announced a "final victory" over their vicious Islamist enemies. On at least three occasions, I reported – not, of course, without appropriate cynicism – that the Algerian authorities believed their enemies were finally beaten because the "terrorists" were so desperate that they were beheading every man, woman and child in the villages they captured in the mountains around Algiers and Oran.
And now they're at it again. After a ferocious resurgence of car bombing by their newly merged "al-Qa'ida in the Maghreb" antagonists, the decrepit old FLN government in Algiers has announced the "terminal phase" in its battle against armed Islamists. As the Algerian journalist Hocine Belaffoufi said with consummate wit the other day, "According to this political discourse ... the increase in attacks represents undeniable proof of the defeat of terrorism. The more terrorism collapsed, the more the attacks increased ... so the stronger (terrorism) becomes, the fewer attacks there will be."
We, of course, have been peddling this crackpot nonsense for years in south-west Asia. First of all, back in 2001, we won the war in Afghanistan by overthrowing the Taliban. Then we marched off to win the war in Iraq. Now – with at least one suicide bombing a day and the nation carved up into mutually antagonistic sectarian enclaves – we have won the war in Iraq and are heading back to re-win the war in Afghanistan where the Taliban, so thoroughly trounced by our chaps seven years ago, have proved their moral and political bankruptcy by recapturing half the country.
It seems an age since Donald "Stuff Happens" Rumsfeld declared,"A government has been put in place (in Afghanistan), and the Islamists are no more the law in Kabul. Of course, from time to time a hand grenade, a mortar explodes – but in New York and in San Francisco, victims also fall. As for me, I'm full of hope." Oddly, back in the Eighties, I heard exactly the same from a Soviet general at the Bagram airbase in Afghanistan – yes, the very same Bagram airbase where the CIA lads tortured to death a few of the Afghans who escaped the earlier Russian massacres. Only "terrorist remnants" remained in the Afghan mountains, the jolly Russian general assured us. Afghan troops, along with the limited Soviet "intervention" forces, were restoring peace to democratic Afghanistan.
And now? After the "unimaginable" progress in Iraq – I am quoting the fantasist who still occupies the White House – the Americans are going to hip-hop 8,000 soldiers out of Mesopotamia and dump another 4,700 into the hellfire of Afghanistan. Too few, too late, too slow, as one of my French colleagues commented acidly. It would need at least another 10,000 troops to hope to put an end to these Taliban devils who are now equipped with more sophisticated weapons, better trained and increasingly – sad to say – tolerated by the local civilian population. For Afghanistan, read Irakistan.
Back in the late 19th century, the Taliban – yes, the British actually called their black-turbaned enemies "Talibs" – would cut the throats of captured British soldiers. Now this unhappy tradition is repeated – and we are surprised! Two of the American soldiers seized when the Taliban stormed into their mountain base on 13 July this year were executed by their captors.
And now it turns out that four of the 10 French troops killed in Afghanistan on 18 August surrendered to the Taliban, and were almost immediately executed. Their interpreter had apparently disappeared shortly before their mission began – no prizes for what this might mean – and the two French helicopters which might have helped to save the day were too busy guarding the hopeless and impotent Afghan President Hamid Karzai to intervene on behalf of their own troops. A French soldier described the Taliban with brutal frankness. "They are good soldiers but pitiless enemies."
The Soviet general at Bagram now has his amanuensis in General David McKiernan, the senior US officer in Afghanistan, who proudly announced last month that US forces had killed "between 30 and 35 Taliban" in a raid on Azizabad near Herat. "In the light of emerging evidence pertaining (sic) to civilian casualties in the ... counter-insurgency operation," the luckless general now says, he feels it "prudent" – another big sic here – to review his original investigation. The evidence "pertaining", of course, is that the Americans probably killed 90 people in Azizabad, most of them women and children. We – let us be frank and own up to our role in the hapless Nato alliance in Afghanistan – have now slaughtered more than 500 Afghan civilians this year alone. These include a Nato missile attack on a wedding party in July when we splattered 47 of the guests all over the village of Deh Bala.
And Obama and McCain really think they're going to win in Afghanistan – before, I suppose, rushing their soldiers back to Iraq when the Baghdad government collapses. What the British couldn't do in the 19th century and what the Russians couldn't do at the end of the 20th century, we're going to achieve at the start of the 21 century, taking our terrible war into nuclear-armed Pakistan just for good measure. Fantasy again.
Joseph Conrad, who understood the powerlessness of powerful nations, would surely have made something of this. Yes, we have lost after we won in Afghanistan and now we will lose as we try to win again. Stuff happens.
www.independent.co.uk/opinion/commentators/fisk/robert-fisks-world-why-does-the-us-think-it-can-win-in-afghanistan-936185.html
Sunday, September 21, 2008
It's the Derivatives, Stupid!
Ellen Brown – Web of Deceit September 18, 2008
I can calculate the movement of the stars, but not the madness of men."
– Sir Isaac Newton, after losing a fortune in the South Sea bubble
Something extraordinary is going on with these government bailouts. In March 2008, the Federal Reserve extended a $55 billion loan to JPMorgan to "rescue" investment bank Bear Stearns from bankruptcy, a highly controversial move that tested the limits of the Federal Reserve Act. On September 7, 2008, the U.S. government seized private mortgage giants Fannie Mae and Freddie Mac and
imposed a conservatorship, a form of bankruptcy; but rather than let the bankruptcy court sort out the assets among the claimants, the Treasury extended an unlimited credit line to the insolvent corporations and said it would exercise its authority to buy their stock, effectively nationalizing them. Now the Federal Reserve has announced that it is giving an $85 billion loan to American International Group (AIG), the world’s largest insurance company, in exchange for a nearly 80% stake in the insurer . . . .
The Fed is buying an insurance company? Where exactly is that covered in the Federal Reserve Act? The Associated Press calls it a "government takeover," but this is not your ordinary "nationalization" like the purchase of Fannie/Freddie stock by the U.S. Treasury. The Federal Reserve has the power to print the national money supply, but it is not actually a part of the U.S. government. It is a private banking corporation owned by a consortium of private banks. The banking industry just bought the world’s largest insurance company, and they used federal money to do it. Yahoo Finance reported on September 17:
"The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters."
Treasury bills are the I.O.U.s of the federal government. We the taxpayers are on the hook for the Fed’s "enhanced liquidity facilities," meaning the loans it has been making to everyone in sight, bank or non-bank, exercising obscure provisions in the Federal Reserve Act that may or may not say they can do it. What’s going on here? Why not let the free market work? Bankruptcy courts know how to sort out assets and reorganize companies so they can operate again. Why the extraordinary measures for Fannie, Freddie and AIG?
The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an "event of default" that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.
The Anatomy of a Bubble
Until recently, most people had never even heard of derivatives; but in terms of money traded, these investments represent the biggest financial market in the world. Derivatives are financial instruments that have no intrinsic value but derive their value from something else. Basically, they are just bets. You can "hedge your bet" that something you own will go up by placing a side bet that it will go down. "Hedge funds" hedge bets in the derivatives market. Bets can be placed on anything, from the price of tea in China to the movements of specific markets.
"The point everyone misses," wrote economist Robert Chapman a decade ago, "is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing."1 They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services. In congressional hearings in the early 1990s, derivatives trading was challenged as being an illegal form of gambling. But the practice was legitimized by Fed Chairman Alan Greenspan, who not only lent legal and regulatory support to the trade but actively promoted derivatives as a way to improve "risk management." Partly, this was to boost the flagging profits of the banks; and at the larger banks and dealers, it worked. But the cost was an increase in risk to the financial system as a whole.2
Since then, derivative trades have grown exponentially, until now they are larger than the entire global economy. The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars – that’s 1,000 trillion dollars.3 How is that figure even possible? The gross domestic product of all the countries in the world is only about 60 trillion dollars. The answer is that gamblers can bet as much as they want. They can bet money they don’t have, and that is where the huge increase in risk comes in.
Credit default swaps (CDS) are the most widely traded form of credit derivative. CDS are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the "protection buyer" gets a large payoff from the "protection seller" if the company defaults within a certain period of time, while the "protection seller" collects periodic payments from the "protection buyer" for assuming the risk of default. CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to increase profits by gambling on market changes. In one blogger’s example, a hedge fund could sit back and collect $320,000 a year in premiums just for selling "protection" on a risky BBB junk bond. The premiums are "free" money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims.
And there’s the catch: what if the hedge fund doesn’t have the $100 million? The fund’s corporate shell or limited partnership is put into bankruptcy; but both parties are claiming the derivative as an asset on their books, which they now have to write down. Players who have "hedged their bets" by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets.
The dominos go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme. The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives "weapons of financial mass destruction." It is also why the banking system cannot let a major derivatives player go down, and it is the banking system that calls the shots. The Federal Reserve is literally owned by a conglomerate of banks; and Hank Paulson, who heads the U.S. Treasury, entered that position through the revolving door of investment bank Goldman Sachs, where he was formerly CEO.
The Best Game in Town
In an article on FinancialSense.com on September 9, Daniel Amerman maintains that the government’s takeover of Fannie Mae and Freddie Mac was not actually a bailout of the mortgage giants. It was a bailout of the financial derivatives industry, which was faced with a $1.4 trillion "event of default" that could have bankrupted Wall Street and much of the rest of the financial world. To explain the enormous risk involved, Amerman posits a scenario in which the mortgage giants are not bailed out by the government. When they default on the $5 trillion in ibonds and mortgage-backed securities they own or guarantee, settlements are immediately triggered on $1.4 trillion in credit default swaps entered into by major financial firms, which have promised to make good on Fannie/Freddie defaulted bonds in return for very lucrative fee income and multi-million dollar bonuses. The value of the vulnerable bonds plummets by 70%, causing $1 trillion (70% of $1.4 trillion) to be due to the "protection buyers." This is more money, however, than the already-strapped financial institutions have to spare. The CDS sellers are highly leveraged themselves, which means they depend on huge day-to-day lines of credit just to stay afloat. When their creditors see the trillion dollar hit coming, they pull their financing, leaving the strapped institutions with massive portfolios of illiquid assets. The dreaded cascade of cross-defaults begins, until nearly every major investment bank and commercial bank is unable to meet its obligations. This triggers another massive round of CDS events, going to $10 trillion, then $20 trillion. The financial centers become insolvent, the markets have to be shut down, and when they open months later, the stock market has been crushed. The federal government and the financiers pulling its strings naturally feel compelled to step in to prevent such a disaster, even though this rewards the profligate speculators at the expense of the Fannie/Freddie shareholders who will get wiped out. Amerman concludes:
"[I]t’s the best game in town. Take a huge amount of risk, be paid exceedingly well for it and if you screw up -- you have absolute proof that the government will come in and bail you out at the expense of the rest of the population (who did not share in your profits in the first place)."4
Desperate Measures for Desperate Times
It was the best game in town until September 14, when Treasury Secretary Paulson, Fed Chairman Ben Bernanke, and New York Fed Head Tim Geithner closed the bailout window to Lehman Brothers, a 158-year-old Wall Street investment firm and major derivatives player. Why? "There is no political will for a federal bailout," said Geithner. Bailing out Fannie and Freddie had created a furor of protest, and the taxpayers could not afford to underwrite the whole quadrillion dollar derivatives bubble. The line had to be drawn somewhere, and this was apparently it.
Or was the Fed just saving its ammunition for AIG? Recent downgrades in AIG’s ratings meant that the counterparties to its massive derivatives contracts could force it to come up with $10.5 billion in additional capital reserves immediately or file for bankruptcy. Treasury Secretary Paulson resisted advancing taxpayer money; but on Monday, September 15, stock trading was ugly, with the S & P 500 registering the largest one-day percent drop since September 11, 2001. Alan Kohler wrote in the Australian Business Spectator:
"[I]t’s unlikely to be a slow-motion train wreck this time. With Lehman in liquidation, and Washington Mutual and AIG on the brink, the credit market would likely shut down entirely and interbank lending would cease."5
Kohler quoted the September 14 newsletter of Professor Nouriel Roubini, who has a popular website called Global EconoMonitor. Roubini warned:
"What we are facing now is the beginning of the unravelling and collapse of the entire shadow financial system, a system of institutions (broker dealers, hedge funds, private equity funds, SIVs, conduits, etc.) that look like banks (as they borrow short, are highly leveraged and lend and invest long and in illiquid ways) and thus are highly vulnerable to bank-like runs; but unlike banks they are not properly regulated and supervised, they don’t have access to deposit insurance and don’t have access to the lender of last resort support of the central bank."
The risk posed to the system was evidently too great. On September 16, while Barclay’s Bank was offering to buy the banking divisions of Lehman Brothers, the Federal Reserve agreed to bail out AIG in return for 80% of its stock. Why the Federal Reserve instead of the U.S. Treasury? Perhaps because the Treasury would take too much heat for putting yet more taxpayer money on the line. The Federal Reserve could do it quietly through its "Open Market Operations," the ruse by which it "monetizes" government debt, turning Treasury bills (government I.O.U.s) into dollars. The taxpayers would still have to pick up the tab, but the Federal Reserve would not have to get approval from Congress first.
Time for a 21st Century New Deal?
Another hole has been plugged in a very leaky boat, keeping it afloat another day; but how long can these stopgap measures be sustained? Professor Roubini maintains:
"The step by step, ad hoc and non-holistic approach of Fed and Treasury to crisis management has been a failure. . . . [P]lugging and filling one hole at [a] time is useless when the entire system of levies is collapsing in the perfect financial storm of the century. A much more radical, holistic and systemic approach to crisis management is now necessary."6
We may soon hear that "the credit market is frozen" – that there is no money to keep homeowners in their homes, workers gainfully employed, or infrastructure maintained. But this is not true. The underlying source of all money is government credit – our own public credit. We don’t need to borrow it from the Chinese or the Saudis or private banks. The government can issue its own credit – the "full faith and credit of the United States." That was the model followed by the Pennsylvania colonists in the eighteenth century, and it worked brilliantly well. Before the provincial government came up with this plan, the Pennsylvania economy was languishing. There was little gold to conduct trade, and the British bankers were charging 8% interest to borrow what was available. The government solved the credit problem by issuing and lending its own paper scrip. A publicly-owned bank lent the money to farmers at 5% interest. The money was returned to the government, preventing inflation; and the interest paid the government’s expenses, replacing taxes. During the period the system was in place, the economy flourished, prices remained stable, and the Pennsylvania colonists paid no taxes at all. (For more on this, see E. Brown, "Sustainable Energy Development: How Costs Can Be Cut in Half," webofdebt.com/articles, November 5, 2007.)
Today’s credit crisis is very similar to that facing Herbert Hoover and Franklin Roosevelt in the 1930s. In 1932, President Hoover set up the Reconstruction Finance Corporation (RFC) as a federally-owned bank that would bail out commercial banks by extending loans to them, much as the privately-owned Federal Reserve is doing today. But like today, Hoover’s ploy failed. The banks did not need more loans; they were already drowning in debt. They needed customers with money to spend and invest. President Roosevelt used Hoover’s new government-owned lending facility to extend loans where they were needed most – for housing, agriculture and industry. Many new federal agencies were set up and funded by the RFC, including the HOLC (Home Owners Loan Corporation) and Fannie Mae (the Federal National Mortgage Association, which was then a government-owned agency). In the 1940s, the RFC went into overdrive funding the infrastructure necessary for the U.S. to participate in World War II, setting the country up with the infrastructure it needed to become the world’s industrial leader after the war.
The RFC was a government-owned bank that sidestepped the privately-owned Federal Reserve; but unlike the Pennsylvania provincial government, which originated the money it lent, the RFC had to borrow the money first. The RFC was funded by issuing government bonds and relending the proceeds. Then as now, new money entered the money supply chiefly in the form of private bank loans. In a "fractional reserve" banking system, banks are allowed to lend their "reserves" many times over, effectively multiplying the amount of money in circulation. Today a system of public banks might be set up on the model of the RFC to fund productive endeavors – industry, agriculture, housing, energy -- but we could go a step further than the RFC and give the new public banks the power to create credit themselves, just as the Pennsylvania government did and as private banks do now. At the rate banks are going into FDIC receivership, the federal government will soon own a string of banks, which it might as well put to productive use. Establishing a new RFC might be an easier move politically than trying to nationalize the Federal Reserve, but that is what should properly, logically be done. If we the taxpayers are putting up the money for the Fed to own the world’s largest insurance company, we should own the Fed.
Proposals for reforming the banking system are not even on the radar screen of Prime Time politics today; but the current system is collapsing at train-wreck speed, and the "change" called for in Washington may soon be taking a direction undreamt of a few years ago. We need to stop funding the culprits who brought us this debacle at our expense. We need a public banking system that makes a cost-effective credit mechanism available for homeowners, manufacturing, renewable energy, and infrastructure; and the first step to making it cost-effective is to strip out the swarms of gamblers, fraudsters and profiteers now gaming the system.
NOTES
1. Quoted in James Wesley, "Derivatives – The Mystery Man Who’ll Break the Global Bank at Monte Carlo," SurvivalBlog.com (September 2006).
2. "Killer Derivatives, Zombie CDOs and Basel Too?", Institutional Risk Analytics (August 14, 2007).
3. Kevin DeMeritt, "$1.14 Quadrillion in Derivatives – What Goes Up . . . ," Gold-Eagle.com (June 16, 2008).
4. Daniel Amerman, "The Hidden Bailout of $1.4 Trillion in Fannie/Freddie Credit-Default Swaps," FinancialSense.com (September 10, 2008).
5. Alan Kohler, "Lehman End-game," Business Spectator (Australia) (September 15, 2008).
6 Ibid.
Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine.
www.globalresearch.ca/index.php?context=va&aid=10265
I can calculate the movement of the stars, but not the madness of men."
– Sir Isaac Newton, after losing a fortune in the South Sea bubble
Something extraordinary is going on with these government bailouts. In March 2008, the Federal Reserve extended a $55 billion loan to JPMorgan to "rescue" investment bank Bear Stearns from bankruptcy, a highly controversial move that tested the limits of the Federal Reserve Act. On September 7, 2008, the U.S. government seized private mortgage giants Fannie Mae and Freddie Mac and
imposed a conservatorship, a form of bankruptcy; but rather than let the bankruptcy court sort out the assets among the claimants, the Treasury extended an unlimited credit line to the insolvent corporations and said it would exercise its authority to buy their stock, effectively nationalizing them. Now the Federal Reserve has announced that it is giving an $85 billion loan to American International Group (AIG), the world’s largest insurance company, in exchange for a nearly 80% stake in the insurer . . . .
The Fed is buying an insurance company? Where exactly is that covered in the Federal Reserve Act? The Associated Press calls it a "government takeover," but this is not your ordinary "nationalization" like the purchase of Fannie/Freddie stock by the U.S. Treasury. The Federal Reserve has the power to print the national money supply, but it is not actually a part of the U.S. government. It is a private banking corporation owned by a consortium of private banks. The banking industry just bought the world’s largest insurance company, and they used federal money to do it. Yahoo Finance reported on September 17:
"The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters."
Treasury bills are the I.O.U.s of the federal government. We the taxpayers are on the hook for the Fed’s "enhanced liquidity facilities," meaning the loans it has been making to everyone in sight, bank or non-bank, exercising obscure provisions in the Federal Reserve Act that may or may not say they can do it. What’s going on here? Why not let the free market work? Bankruptcy courts know how to sort out assets and reorganize companies so they can operate again. Why the extraordinary measures for Fannie, Freddie and AIG?
The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an "event of default" that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.
The Anatomy of a Bubble
Until recently, most people had never even heard of derivatives; but in terms of money traded, these investments represent the biggest financial market in the world. Derivatives are financial instruments that have no intrinsic value but derive their value from something else. Basically, they are just bets. You can "hedge your bet" that something you own will go up by placing a side bet that it will go down. "Hedge funds" hedge bets in the derivatives market. Bets can be placed on anything, from the price of tea in China to the movements of specific markets.
"The point everyone misses," wrote economist Robert Chapman a decade ago, "is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing."1 They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services. In congressional hearings in the early 1990s, derivatives trading was challenged as being an illegal form of gambling. But the practice was legitimized by Fed Chairman Alan Greenspan, who not only lent legal and regulatory support to the trade but actively promoted derivatives as a way to improve "risk management." Partly, this was to boost the flagging profits of the banks; and at the larger banks and dealers, it worked. But the cost was an increase in risk to the financial system as a whole.2
Since then, derivative trades have grown exponentially, until now they are larger than the entire global economy. The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars – that’s 1,000 trillion dollars.3 How is that figure even possible? The gross domestic product of all the countries in the world is only about 60 trillion dollars. The answer is that gamblers can bet as much as they want. They can bet money they don’t have, and that is where the huge increase in risk comes in.
Credit default swaps (CDS) are the most widely traded form of credit derivative. CDS are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the "protection buyer" gets a large payoff from the "protection seller" if the company defaults within a certain period of time, while the "protection seller" collects periodic payments from the "protection buyer" for assuming the risk of default. CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to increase profits by gambling on market changes. In one blogger’s example, a hedge fund could sit back and collect $320,000 a year in premiums just for selling "protection" on a risky BBB junk bond. The premiums are "free" money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims.
And there’s the catch: what if the hedge fund doesn’t have the $100 million? The fund’s corporate shell or limited partnership is put into bankruptcy; but both parties are claiming the derivative as an asset on their books, which they now have to write down. Players who have "hedged their bets" by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets.
The dominos go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme. The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives "weapons of financial mass destruction." It is also why the banking system cannot let a major derivatives player go down, and it is the banking system that calls the shots. The Federal Reserve is literally owned by a conglomerate of banks; and Hank Paulson, who heads the U.S. Treasury, entered that position through the revolving door of investment bank Goldman Sachs, where he was formerly CEO.
The Best Game in Town
In an article on FinancialSense.com on September 9, Daniel Amerman maintains that the government’s takeover of Fannie Mae and Freddie Mac was not actually a bailout of the mortgage giants. It was a bailout of the financial derivatives industry, which was faced with a $1.4 trillion "event of default" that could have bankrupted Wall Street and much of the rest of the financial world. To explain the enormous risk involved, Amerman posits a scenario in which the mortgage giants are not bailed out by the government. When they default on the $5 trillion in ibonds and mortgage-backed securities they own or guarantee, settlements are immediately triggered on $1.4 trillion in credit default swaps entered into by major financial firms, which have promised to make good on Fannie/Freddie defaulted bonds in return for very lucrative fee income and multi-million dollar bonuses. The value of the vulnerable bonds plummets by 70%, causing $1 trillion (70% of $1.4 trillion) to be due to the "protection buyers." This is more money, however, than the already-strapped financial institutions have to spare. The CDS sellers are highly leveraged themselves, which means they depend on huge day-to-day lines of credit just to stay afloat. When their creditors see the trillion dollar hit coming, they pull their financing, leaving the strapped institutions with massive portfolios of illiquid assets. The dreaded cascade of cross-defaults begins, until nearly every major investment bank and commercial bank is unable to meet its obligations. This triggers another massive round of CDS events, going to $10 trillion, then $20 trillion. The financial centers become insolvent, the markets have to be shut down, and when they open months later, the stock market has been crushed. The federal government and the financiers pulling its strings naturally feel compelled to step in to prevent such a disaster, even though this rewards the profligate speculators at the expense of the Fannie/Freddie shareholders who will get wiped out. Amerman concludes:
"[I]t’s the best game in town. Take a huge amount of risk, be paid exceedingly well for it and if you screw up -- you have absolute proof that the government will come in and bail you out at the expense of the rest of the population (who did not share in your profits in the first place)."4
Desperate Measures for Desperate Times
It was the best game in town until September 14, when Treasury Secretary Paulson, Fed Chairman Ben Bernanke, and New York Fed Head Tim Geithner closed the bailout window to Lehman Brothers, a 158-year-old Wall Street investment firm and major derivatives player. Why? "There is no political will for a federal bailout," said Geithner. Bailing out Fannie and Freddie had created a furor of protest, and the taxpayers could not afford to underwrite the whole quadrillion dollar derivatives bubble. The line had to be drawn somewhere, and this was apparently it.
Or was the Fed just saving its ammunition for AIG? Recent downgrades in AIG’s ratings meant that the counterparties to its massive derivatives contracts could force it to come up with $10.5 billion in additional capital reserves immediately or file for bankruptcy. Treasury Secretary Paulson resisted advancing taxpayer money; but on Monday, September 15, stock trading was ugly, with the S & P 500 registering the largest one-day percent drop since September 11, 2001. Alan Kohler wrote in the Australian Business Spectator:
"[I]t’s unlikely to be a slow-motion train wreck this time. With Lehman in liquidation, and Washington Mutual and AIG on the brink, the credit market would likely shut down entirely and interbank lending would cease."5
Kohler quoted the September 14 newsletter of Professor Nouriel Roubini, who has a popular website called Global EconoMonitor. Roubini warned:
"What we are facing now is the beginning of the unravelling and collapse of the entire shadow financial system, a system of institutions (broker dealers, hedge funds, private equity funds, SIVs, conduits, etc.) that look like banks (as they borrow short, are highly leveraged and lend and invest long and in illiquid ways) and thus are highly vulnerable to bank-like runs; but unlike banks they are not properly regulated and supervised, they don’t have access to deposit insurance and don’t have access to the lender of last resort support of the central bank."
The risk posed to the system was evidently too great. On September 16, while Barclay’s Bank was offering to buy the banking divisions of Lehman Brothers, the Federal Reserve agreed to bail out AIG in return for 80% of its stock. Why the Federal Reserve instead of the U.S. Treasury? Perhaps because the Treasury would take too much heat for putting yet more taxpayer money on the line. The Federal Reserve could do it quietly through its "Open Market Operations," the ruse by which it "monetizes" government debt, turning Treasury bills (government I.O.U.s) into dollars. The taxpayers would still have to pick up the tab, but the Federal Reserve would not have to get approval from Congress first.
Time for a 21st Century New Deal?
Another hole has been plugged in a very leaky boat, keeping it afloat another day; but how long can these stopgap measures be sustained? Professor Roubini maintains:
"The step by step, ad hoc and non-holistic approach of Fed and Treasury to crisis management has been a failure. . . . [P]lugging and filling one hole at [a] time is useless when the entire system of levies is collapsing in the perfect financial storm of the century. A much more radical, holistic and systemic approach to crisis management is now necessary."6
We may soon hear that "the credit market is frozen" – that there is no money to keep homeowners in their homes, workers gainfully employed, or infrastructure maintained. But this is not true. The underlying source of all money is government credit – our own public credit. We don’t need to borrow it from the Chinese or the Saudis or private banks. The government can issue its own credit – the "full faith and credit of the United States." That was the model followed by the Pennsylvania colonists in the eighteenth century, and it worked brilliantly well. Before the provincial government came up with this plan, the Pennsylvania economy was languishing. There was little gold to conduct trade, and the British bankers were charging 8% interest to borrow what was available. The government solved the credit problem by issuing and lending its own paper scrip. A publicly-owned bank lent the money to farmers at 5% interest. The money was returned to the government, preventing inflation; and the interest paid the government’s expenses, replacing taxes. During the period the system was in place, the economy flourished, prices remained stable, and the Pennsylvania colonists paid no taxes at all. (For more on this, see E. Brown, "Sustainable Energy Development: How Costs Can Be Cut in Half," webofdebt.com/articles, November 5, 2007.)
Today’s credit crisis is very similar to that facing Herbert Hoover and Franklin Roosevelt in the 1930s. In 1932, President Hoover set up the Reconstruction Finance Corporation (RFC) as a federally-owned bank that would bail out commercial banks by extending loans to them, much as the privately-owned Federal Reserve is doing today. But like today, Hoover’s ploy failed. The banks did not need more loans; they were already drowning in debt. They needed customers with money to spend and invest. President Roosevelt used Hoover’s new government-owned lending facility to extend loans where they were needed most – for housing, agriculture and industry. Many new federal agencies were set up and funded by the RFC, including the HOLC (Home Owners Loan Corporation) and Fannie Mae (the Federal National Mortgage Association, which was then a government-owned agency). In the 1940s, the RFC went into overdrive funding the infrastructure necessary for the U.S. to participate in World War II, setting the country up with the infrastructure it needed to become the world’s industrial leader after the war.
The RFC was a government-owned bank that sidestepped the privately-owned Federal Reserve; but unlike the Pennsylvania provincial government, which originated the money it lent, the RFC had to borrow the money first. The RFC was funded by issuing government bonds and relending the proceeds. Then as now, new money entered the money supply chiefly in the form of private bank loans. In a "fractional reserve" banking system, banks are allowed to lend their "reserves" many times over, effectively multiplying the amount of money in circulation. Today a system of public banks might be set up on the model of the RFC to fund productive endeavors – industry, agriculture, housing, energy -- but we could go a step further than the RFC and give the new public banks the power to create credit themselves, just as the Pennsylvania government did and as private banks do now. At the rate banks are going into FDIC receivership, the federal government will soon own a string of banks, which it might as well put to productive use. Establishing a new RFC might be an easier move politically than trying to nationalize the Federal Reserve, but that is what should properly, logically be done. If we the taxpayers are putting up the money for the Fed to own the world’s largest insurance company, we should own the Fed.
Proposals for reforming the banking system are not even on the radar screen of Prime Time politics today; but the current system is collapsing at train-wreck speed, and the "change" called for in Washington may soon be taking a direction undreamt of a few years ago. We need to stop funding the culprits who brought us this debacle at our expense. We need a public banking system that makes a cost-effective credit mechanism available for homeowners, manufacturing, renewable energy, and infrastructure; and the first step to making it cost-effective is to strip out the swarms of gamblers, fraudsters and profiteers now gaming the system.
NOTES
1. Quoted in James Wesley, "Derivatives – The Mystery Man Who’ll Break the Global Bank at Monte Carlo," SurvivalBlog.com (September 2006).
2. "Killer Derivatives, Zombie CDOs and Basel Too?", Institutional Risk Analytics (August 14, 2007).
3. Kevin DeMeritt, "$1.14 Quadrillion in Derivatives – What Goes Up . . . ," Gold-Eagle.com (June 16, 2008).
4. Daniel Amerman, "The Hidden Bailout of $1.4 Trillion in Fannie/Freddie Credit-Default Swaps," FinancialSense.com (September 10, 2008).
5. Alan Kohler, "Lehman End-game," Business Spectator (Australia) (September 15, 2008).
6 Ibid.
Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, and Forbidden Medicine.
www.globalresearch.ca/index.php?context=va&aid=10265
Thursday, September 18, 2008
Horrors of war our leaders never have to confront
Robert Fisk – The Independent September 13, 2008
Just outside Andrew Holden's office at the Christchurch Press off Cathedral Square – and, believe me, New Zealand's prettiest city is as colonial as they come, a Potemkin town of mock-Tudor government buildings, Scottish baronial churches and wooden versions of Victorian homes – is a brightly coloured, cheerful little water-colour. Boarding a big steamship, thousands of New Zealanders in big broad-bottomed brown hats are lining the quaysides, the gangplanks and the decks.
For a moment this week, I thought this might be some annual festival (perhaps involving New Zealand's 35 million boring sheep). But then Andrew spotted my interest. "They're going to Gallipoli," he said. And – fast as the lightning bolt of history – my eyes returned to the tiny figures on the deck. Off they were going, another flower of youth, to the trenches and dust and filth of my father's war.
I'm not sure of this, but I think – I suspect and feel – that the Great War, the war of 1914-1918, is beginning to dominate our lives even more than the terrible and infinitely more costly conflict of 1939-1945. As the years go by, the visitors to the great cemeteries of the Somme, Passchendaele and Verdun grow greater in number. The Second World War may haunt our lives. The First World War, it seems to me, imprisons us all.
The statistics still have the power to overawe us. As John Terraine calculates, by November of 1918, France had lost 1,700,000 men out of a population of 40 million, the British Empire a million – 700,000 of them from the 50 million people of the British Isles. The British Army, let it be repeated, lost 20,000 killed on the first day of the Somme. I noticed that in Christchurch Cathedral, the bronze plaques to the Great War dead had been newly polished – so that they looked as they must have been seen by those who came to mourn almost a hundred years ago.
Who would have believed, even half a century ago, that this year's Toronto Film Festival would open in Canada with a film called Passchendaele – perhaps the most-difficult-to-spell-movie of all time – the film poster showing just a young man standing in mud and filth and rain? Who could conceive that one of the most popular non-fiction books in recent Canadian history would be the Ottawa War Museum's Great War historian Tim Cook's At the Sharp End, the first volume of his monumental study of Canadians in the 1914-18 war?
Canada had its Douglas Haig – a maniac called Sam Hughes ("Minister of Militia and Defence") who forced his young men to use the hopeless Canadian-made Mark III Ross rifle which jammed and misfired and heaped up the corpses of Canadians who could not defend themselves with this patriotic, murderous weapon. Cook, despite his occasional tendency to cliché (says Fisk) is superlative.
His description of desperately young Canadian men cowering in shell-holes – showered by the putrefying remains of their long-dead friends as bodies are again torn apart by shells – is devastating. So, too, are his quotations from the letters home of Canadian soldiers. "I went thru all the fights the same as if I was making logs," Sergeant Frank Maheux writes home to his wife in an innocent, broken English. "I bayoneted some (sic) killed lots of Huns. I was caught in one place with a chum of mine he was killed beside me when I saw he was killed I saw red ... The Germans when they saw they were beaten they put up their hands but dear wife it was too late."
My God, how that "dear wife" tells the truth about the surrendering Germans' fate. And here is Captain Joseph Chabelle of the Canadian 2nd Division's 22 Battalion: "Oh! The sensation of driving the blade into flesh, between the ribs, despite the opponent's grasping efforts to deflect it. You struggle savagely, panting furiously, lips contorted in a grimace, teeth gnashing, until you feel the enemy relax his grip and topple like a log. To remove the bayonet, you have to pull it out with both hands; if it is caught in the bone, you must brace your foot on the still heaving body, and tug with all your might."
Private James Owen was to describe how an enraged friend was trying to bayonet another German. "He lunged at the German again and again, who each time lowered his arms and stopped the point of the bayonet with his bare hands. He was screaming for mercy. Oh God it was brutal!"
Haig, by the way, was initially dismissive of the Canadians. "They have been very extravagant in expending ammunition!" he complained. "This points rather to nervousness and low morale."
How the gorge rises at such wickedness. But it rises far more as you turn the pages of the beautifully produced, desperate collection of French soldiers' amateur paintings and sketches of the Great War – "Croquis et dessins de Poilus" – which, ironically, includes a set of sad portraits of the poilus' Canadian comrades. This magnificent book was produced by the French Ministry of Defence; why it could not have had a joint production with the Imperial War Museum beggars belief – does the Entente now count for nothing? For anyone who wants to understand the total failure of the human spirit which war represents – and the utter disgust which must follow the "arbitrament"of war (a Chamberlain word this – see his 3 September 1939, declaration of war) – must read the extract from Jean Giono's Le Grand Troupeau, which accompanies Louis Dauphin's bleak, rainswept painting, "Supply Route at Peronne".
"The rats, with red eyes, march delicately along the trench," Giono writes of the creatures with whom he shared the war. "All life had disappeared down there except for that of the rats and the lice ... The rats were coming to sniff the bodies ... They chose the young men without beards on the cheeks ... rolled up into a ball and began to eat the flesh between the nose and the mouth up to the edge of the lips ... from time to time they would wash their whiskers to stay clean. Then the eyes, they took them out with their claws, licked the eyelids, and would then bite into the eye as if it was a small egg ..."
My father saw these horrors on the Somme. They all did. Of course, Messrs Bush and Blair did not have to soil their thoughts with such images. Our boys shipping off to war – Mrs Thatcher happily endured the Gallipoli-like departures from Portsmouth – is enough for our leaders. But could it be, perhaps, that we – the people – know more about horror than our masters? Our history suggests this is true.
www.independent.co.uk/opinion/commentators/fisk/robert-fisks-week-horrors-of-war-our-leaders-never-have-to-confront-928810.html
Just outside Andrew Holden's office at the Christchurch Press off Cathedral Square – and, believe me, New Zealand's prettiest city is as colonial as they come, a Potemkin town of mock-Tudor government buildings, Scottish baronial churches and wooden versions of Victorian homes – is a brightly coloured, cheerful little water-colour. Boarding a big steamship, thousands of New Zealanders in big broad-bottomed brown hats are lining the quaysides, the gangplanks and the decks.
For a moment this week, I thought this might be some annual festival (perhaps involving New Zealand's 35 million boring sheep). But then Andrew spotted my interest. "They're going to Gallipoli," he said. And – fast as the lightning bolt of history – my eyes returned to the tiny figures on the deck. Off they were going, another flower of youth, to the trenches and dust and filth of my father's war.
I'm not sure of this, but I think – I suspect and feel – that the Great War, the war of 1914-1918, is beginning to dominate our lives even more than the terrible and infinitely more costly conflict of 1939-1945. As the years go by, the visitors to the great cemeteries of the Somme, Passchendaele and Verdun grow greater in number. The Second World War may haunt our lives. The First World War, it seems to me, imprisons us all.
The statistics still have the power to overawe us. As John Terraine calculates, by November of 1918, France had lost 1,700,000 men out of a population of 40 million, the British Empire a million – 700,000 of them from the 50 million people of the British Isles. The British Army, let it be repeated, lost 20,000 killed on the first day of the Somme. I noticed that in Christchurch Cathedral, the bronze plaques to the Great War dead had been newly polished – so that they looked as they must have been seen by those who came to mourn almost a hundred years ago.
Who would have believed, even half a century ago, that this year's Toronto Film Festival would open in Canada with a film called Passchendaele – perhaps the most-difficult-to-spell-movie of all time – the film poster showing just a young man standing in mud and filth and rain? Who could conceive that one of the most popular non-fiction books in recent Canadian history would be the Ottawa War Museum's Great War historian Tim Cook's At the Sharp End, the first volume of his monumental study of Canadians in the 1914-18 war?
Canada had its Douglas Haig – a maniac called Sam Hughes ("Minister of Militia and Defence") who forced his young men to use the hopeless Canadian-made Mark III Ross rifle which jammed and misfired and heaped up the corpses of Canadians who could not defend themselves with this patriotic, murderous weapon. Cook, despite his occasional tendency to cliché (says Fisk) is superlative.
His description of desperately young Canadian men cowering in shell-holes – showered by the putrefying remains of their long-dead friends as bodies are again torn apart by shells – is devastating. So, too, are his quotations from the letters home of Canadian soldiers. "I went thru all the fights the same as if I was making logs," Sergeant Frank Maheux writes home to his wife in an innocent, broken English. "I bayoneted some (sic) killed lots of Huns. I was caught in one place with a chum of mine he was killed beside me when I saw he was killed I saw red ... The Germans when they saw they were beaten they put up their hands but dear wife it was too late."
My God, how that "dear wife" tells the truth about the surrendering Germans' fate. And here is Captain Joseph Chabelle of the Canadian 2nd Division's 22 Battalion: "Oh! The sensation of driving the blade into flesh, between the ribs, despite the opponent's grasping efforts to deflect it. You struggle savagely, panting furiously, lips contorted in a grimace, teeth gnashing, until you feel the enemy relax his grip and topple like a log. To remove the bayonet, you have to pull it out with both hands; if it is caught in the bone, you must brace your foot on the still heaving body, and tug with all your might."
Private James Owen was to describe how an enraged friend was trying to bayonet another German. "He lunged at the German again and again, who each time lowered his arms and stopped the point of the bayonet with his bare hands. He was screaming for mercy. Oh God it was brutal!"
Haig, by the way, was initially dismissive of the Canadians. "They have been very extravagant in expending ammunition!" he complained. "This points rather to nervousness and low morale."
How the gorge rises at such wickedness. But it rises far more as you turn the pages of the beautifully produced, desperate collection of French soldiers' amateur paintings and sketches of the Great War – "Croquis et dessins de Poilus" – which, ironically, includes a set of sad portraits of the poilus' Canadian comrades. This magnificent book was produced by the French Ministry of Defence; why it could not have had a joint production with the Imperial War Museum beggars belief – does the Entente now count for nothing? For anyone who wants to understand the total failure of the human spirit which war represents – and the utter disgust which must follow the "arbitrament"of war (a Chamberlain word this – see his 3 September 1939, declaration of war) – must read the extract from Jean Giono's Le Grand Troupeau, which accompanies Louis Dauphin's bleak, rainswept painting, "Supply Route at Peronne".
"The rats, with red eyes, march delicately along the trench," Giono writes of the creatures with whom he shared the war. "All life had disappeared down there except for that of the rats and the lice ... The rats were coming to sniff the bodies ... They chose the young men without beards on the cheeks ... rolled up into a ball and began to eat the flesh between the nose and the mouth up to the edge of the lips ... from time to time they would wash their whiskers to stay clean. Then the eyes, they took them out with their claws, licked the eyelids, and would then bite into the eye as if it was a small egg ..."
My father saw these horrors on the Somme. They all did. Of course, Messrs Bush and Blair did not have to soil their thoughts with such images. Our boys shipping off to war – Mrs Thatcher happily endured the Gallipoli-like departures from Portsmouth – is enough for our leaders. But could it be, perhaps, that we – the people – know more about horror than our masters? Our history suggests this is true.
www.independent.co.uk/opinion/commentators/fisk/robert-fisks-week-horrors-of-war-our-leaders-never-have-to-confront-928810.html
Tuesday, September 16, 2008
Is the Illuminati Provoking Economic Collapse?
by Henry Makow Ph.D. – Sept. 15, 2008
(Remembering Svali's Words)
We may be on the verge of a stock market crash reminiscent of 1929.
I was watching CNBC when the news came across that Moody's had downgraded the Insurance giant AIG (American International Group.) This company was already on the ropes Monday when its stock crumbled to $4.75 from $11, %60 in one day. It was down from a $70 52-week-high. The company had gone to the Fed for a bailout. It was estimated it needed $40 billion.
Because of the Moody's downgrade, it emerges that it will need alot more money to avert bankruptcy. This is a massive company that holds the pensions of millions of employees. A money manager estimated that a trillion dollars would be lost if AIG declares bankruptcy. The whole world financial system could be taken down. He said banks in the Far East were already acting like this is inevitable, and the collapse already has been set in motion.
As you can imagine, the CNBC commentators were frantic. One demanded to know how the Fed can allow this to happen. "We know they print money," he said. Another wondered if the States whose pension funds were held by AIG could organize a bailout. Not enough time, he was told.
The bottom line is that Tuesday and the rest of this week could be ugly so be prepared. The second bottom line is that this Depression like the last appears to be caused by a deliberate contraction of credit. House prices are falling because banks don't have the money to lend to house buyers. As a result, portfolios holding mortgage backed securities are tumbling, taking banks with them. The Fed, after bailing out Fannie May and Fredie Mack, have let Lehman Brothers fail. AIG appears to be next and the dominoes will continue to fall.
At this time, it is important to remember that an Illuminati defector known as "Svali" said <>she was taught that the "end of the world" scenario<> involved an economic collapse. Remember the Illuminati is a Masonic cult founded and funded by the central bankers who own the Fed. Here is her full testimony given about ten year ago.
"Want to hear the end of the world scenario the Illuminati taught me? It was cult propaganda, but this is how they believed the New Order would be ushered in:
There will be continued conflict in the Mideast, with a severe threat of nuclear war being the culmination of these hostilities. An economic collapse that will devastate the economy of the US and Europe, much like the great depression.
One reason that our economy continues limping along is the artificial supports that the Federal Reserve had given it, manipulating interest rates, etc. But one day, this won't work (or this leverage will be withdrawn on purpose) and the next great depression will hit.
The government will call in its bonds and loans, and credit card debts will be called in. There will be massive bankruptcies nationwide. Europe will stabilize first,and Germany, France and England (surprise) will have the strongest economies, and will institute through the UN an international currency. Japan will also pull out, although their economy will be weakened.
Peacekeeping forces will be sent out by the UN and local bases to prevent riots. The leaders will reveal themselves, and people will be asked to make a pledge of loyalty during a time of chaos and financial devastation.
Doesn't sound pleasant, does it? I don't know the exact time frame for all of this, and wouldn't want to even guess. The good news is that if a person is debt-free, owes nothing to the government or credit debt, and can live self sufficiently, they may do better than others. I would invest in gold, not stocks, if I had the income.
Gold will once again be the world standard, and dollars will be pretty useless (remember after the Civil War? Our money will be worth about what confederate money was after the collapse).
All this said, it could just be cult propaganda taught to me and others to frighten us. It may be that none of this will happen. I sincerely hope not. I also strongly believe that God is able to stay the hand of the wicked, and to take care of our nation and others, if we turn to Him."
http://giuli.com/svali/EssentialSvali.pdf
That noted, let's remember the words of Denis Healey, former British Defence Secretary and Secretary of the Exchequer: "World events do not occur by accident: They are made to happen, whether it is to do with national issues or commerce; and most of them are staged and managed by those who hold the purse strings."
I think we are in for a recession, maybe even a Depression but I don't think the Illuminati is ready to declare their New World Order just yet. However, this could be part of a larger scenario leading to World War Three, similar to the role the Great Depression played as a precursor to World War Two.
The Illuminati goal is to torture the human race until we cry out to them for world government, anything to stop the pain.
----
Henry Makow Ph.D. is the author of "Cruel Hoax: Feminism and the New World Order." (www.cruelhoax.ca) His articles can be found at his web site www.henrymakow.com He enjoys receiving your comments, some of which he posts on his site using first names only. hmakow@gmail.com
Saturday, September 13, 2008
The Origins of Modern Banking
Kieron McFadden
“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from banks, and restored to the people.” Thomas Jefferson
Money was originally invented as a convenient alternative to barter, an alternative without which a highly developed civilisation like ours could not exist.
Imagine trying to pay the taxi driver with a bag of coal or the grocery bill with a box of spanners and a set of golf clubs. Imagine trying to carry all that around with you when you go shopping. As societies grew more complex and social roles became more specialised, the idea of money was conceived as a better and more flexible way to exchange, and thereby distribute among men, goods and services.
Money is quite simply an idea agreed upon among people that some system of tokens or symbols: discs of metal (coins) paper with symbols on it (notes) and so on, will be used by them to represent or stand proxy for goods and services and that those tokens can be exchanged for goods and services. One can then exchange the tokens rather than bags of coal, boxes of spanners or what-have-you and the tokens are easy to carry around. Its workability depends upon the participants' confidence that those tokens are and will continue to be exchangeable for a certain amount of goods or services.
That's all money is. It is no more complicated than that, although men may try to make it seem complex and hard to understand. The truth however, as truths tend to be, is simple; it is alterations of the truth - lies -that are complicated.
Many societies have used gold and silver coins as their tokens, then later pieces of paper to represent gold and silver coins, and later cheques and ledger entries to represent notes and coins and in modern times electronic money, the shifting and balancing of numbers in computer memories, alongside or in place of coins, notes and cheques. Thus when we receive a computer print-out of our bank statement saying we have £500 in our current account we usually visualise a stack of £l0 notes sitting in a vault somewhere, or perhaps a bag of gold coins, although in reality there is no pile of notes or bag of coins, merely the ledger-entry in an electronic memory Saying we have £500. Should we then write a cheque in order to spend £50 of it, the numbers in our ledger change to £450 and the payee's account increases by £50, although no notes, gold or anything else move from one account to another.
Yet it works because we have confidence in it and trust it and we know we can change that £500 for real notes, real coins or real goods or services whenever we want to.
This evolution in the system of tokens we use to represent real goods and services comes about through a succession of bright ideas in the direction of making distribution and exchange more convenient, the movement of wealth between people smoother and faster. However, anything can be used for money, provided people agree to use it and have confidence in it. For instance dried yak dung was once used in Tibet, notched pieces of wood in Medieval England, leather discs in Medieval Europe and even cigarettes and tins of coffee in post-war Germany. The money in use in a country is called currency, from the word current, meaning prevalent, in circulation or in use.
Governments firm up that agreement and confidence by enshrining a particular system of tokens in law and demanding those tokens in payment of taxes. A particular system of creating, denominating, issuing and circulating money - currency - where backed by law and deemed by law the only recognised system, and which cannot be legally refused as payment of a debt, is called legal tender. Where barter is no longer practised, one has to possess those tokens in order to acquire goods and services from others. It is the medium of exchange. Tokens, be they yak dung, metal discs or numbers with the '£' symbol in front of them, are exchanged back and forth between people instead of goods and exchange does now usually occur without the use of tokens or the promise of tokens on the future.
The way one acquires tokens is by producing something and then selling it to someone who has expressed his want for it by offering us some of his tokens. We do the deal and receive the tokens he has offered. Now we can go and exchange those tokens for other products that we desire, which we do not produce ourselves. Thus money enables goods and services to be exchanged among people and distribution of those goods and services to occur naturally, and according to the needs and wants of the participants.
The more of those tokens one possesses or is able to acquire through one's production, the more one can if one wishes acquire goods and services from others. One can also store money in a safe or bank account without having to build a couple of warehouses in which to store container-loads of spare goods. Money therefore confers exchange power or spending power on he who possesses it in direct ratio to the amount of it he is able to offer up for exchange.
GOLDSMITHS
In the old days gold was minted into coins and those coins, along with silver coins, formed the nation's currency. Goldsmiths had strongboxes and vaults in which to securely store the precious metal with which they worked. It was natural enough then that other people took to asking the goldsmith to store their gold and gold coins in his vault and to pay the goldsmith for the service. A merchant (for example) would entrust to the goldsmith £20 worth of his own gold for safekeeping. When he handed over his gold, the goldsmith would provide him with a receipt or note promising to hand back the gold (pay the bearer on demand) whenever the depositor returned and presented the note. The receipt held by the depositor was in fact as good as gold because he could exchange it for his £20 worth of gold any time he chose. But the note was easier to carry around than heavy and bulky amounts of gold and easier to conceal, so the depositor was often content to leave his gold in the goldsmith's safekeeping for long periods. In fact when the time came to pay for some commodity with his £20 of gold, instead of returning to the goldsmith, exchanging the receipt for the gold and then using the gold to pay for his purchase, it was more convenient for him simply to hand over his receipt to the seller. The seller was happy to accept the receipt in lieu of actual gold because it was more convenient to carry around and he knew that should he present it to the goldsmith, £20 of gold would be handed over to him.
Thus those gold receipts began to circulate and became the first paper money. People were happy to exchange them back and forth rather than the cumbersome gold they represented. The receipts had value because people were confident that in the goldsmith's vault lay the gold, which they could redeem at any time.
Eventually the goldsmiths noticed that the gold left by depositors remained in their vaults for longer and longer periods. People turned up wishing to exchange their receipts for gold less and less often, and that the receipts they had issued to depositors circulated in its stead. It seemed a shame to have that gold just sitting there doing nothing. Why not lend some of it out for a while? If it just sat there for year after year the owner, the holder of the receipt, was not going to miss it if it were loaned to someone else for a period.
As long as there was enough gold in the vaults to satisfy anyone who did turn up with a receipt, then no-one would be any the wiser. So depositor Joe would leave £20 of gold with the goldsmith for safekeeping and depart with his receipt which he would then use as money in lieu of the gold and it would circulate. It might be years before anyone turned up with that £20 note asking for £20 of gold. Meanwhile Tom would turn up at the goldsmith's asking to borrow £20 of gold and the goldsmith would lend it to him, demanding that it be paid back after a certain period at a certain amount of interest. But instead of lending Tom actual gold, the goldsmith would draw up a £20 receipt, just like the one depositor Joe had been given. Tom was happy to take the receipt in lieu of the gold because it was more convenient to carry around and people were happy to accept such receipts in payment for things.
So Tom went off with his £20 note, content that through it he was now in temporary possession of £20 of gold. But unbeknownst to Tom, Joe also has a receipt representing that gold. In other words there are now two notes in circulation representing the same £20 of gold! Clearly the goldsmith's issuance of two receipts for the same amount of gold is fraudulent - particularly when Tom repays the gold he believes he has borrowed in real gold. As each receipt promises to hand over the same £20 of gold on demand, the goldsmith is making a promise he knows he cannot keep.
Several things are clear at the moment the second receipt was issued and entered circulation: new money has been created out of thin air; that new money has been loaned into existence; as the loan has interest charged upon it, then a debt has been created out of nothing that is greater than the amount of new money created.
And another thing: Tom will eventually return to the goldsmith and repay his £20 loan, say at 10% interest. He will therefore hand the goldsmith, £22 in real gold. In other words, the goldsmith, in creating that bogus receipt and lending it to Tom, is creating for himself, albeit after a delay, real debt-free gold worth more than the new money he loaned into existence! It gets worse.
After a while the goldsmith, seeing that his fraud is working pretty well, thinks that if he can issue two £20 receipts against the same £20 of gold, then why not two, three or even four?
So Joe deposits £20 of gold and the goldsmith gives him his receipt. In time four other people turn up at his shop wanting to borrow that £20 of gold. The goldsmith obligingly lends it to each of them at interest, giving each a receipt purporting to represent that £20 of gold. There are now five receipts in circulation representing the same deposit of gold, one for the original depositor and one for each of the four borrowers. For that deposit of £20, £80 (4x £20) of new money is created merely by writing on a fancy piece of paper.
If(say) £2 of interest (10%) is charged on each loan, at the same time that £80 of new money is created out of thin air, a debt of £88 is also created out of thin air.
Property is held as security against these loans so if the borrower fails to repay with real gold the fraudulent piece of paper he borrowed, the goldsmith takes his property.
Each time the goldsmith lends £20 of bogus gold he charges 10% interest on the loan. By lending out £20 four times over and charging £2 interest on each loan, the goldsmith makes a whopping 40% (four times £2) in interest on the £20 "reserves" that were not even his to begin with! The goldsmith cannot lose and soon begins to amass a fortune from his fraud. It is the greatest get-rich-quick scheme ever invented. And it is, in essence, the basis of the modern banking system.
The goldsmiths of yesteryear became the bankers of today and although paper money and latterly electronic money took over from gold, essentially the same fraud is being run.
BANKERS
The business of lending pieces of paper pretending to be gold made the goldsmiths very wealthy and very influential men. Their easy wealth enabled them to move to upmarket premises. They became pillars of the community and some even became international financiers, lending money to kings and governments.
In the seventeenth century conflict between the bankers of the day and the Stuarts led the bankers to act in concert with bankers in Europe. They joined forces with those in the Netherlands to finance the invasion of England by William of Orange. William overthrew the Stuart Kings in 1688 and became King William III.
By the end of the 1600s England was in financial ruin, gold and silver supplies were running low and a costly civil war followed by costly wars with France and Holland, all in a fifty year period, had left her heavily in debt.
Government officials met with the financiers to negotiate the loans they needed. King William was £20 million in debt and he could not pay his army. Apparently it did not occur to William or anyone that if William needed to pay his army or get the economy going, all he had to do was have the government print its own money and use that to pay the troops -something that Abraham Lincoln would do successfully during the American Civil war nearly two hundred years later!
King William's "friends", the bankers, were willing to loan him the money he needed but the price they wanted for their "help" was high. They wanted a government-sanctioned but privately owned central bank that could; through fractional reserve lending, create money out of nothing and loan it to the government.
They got their way. In 1694 the world's first privately owned central bank was created. It was to be called the Bank of England. The Bank's charter included the following immortal words: "The bank hath benefit on the interest on all monies which it creates out of nothing."
Instead of exercising its right to create money and spend it into the economy, the government had the bank create it, then lend it to the government so that the government could spend it into the economy, then pay the loans back later at interest. That completely unnecessary complication was to have devastating consequences for the futures of the English people.
As well as delivering extraordinary power over the nation into the hands of a privately owned business corporation, it began the National Debt, a debt that would go on increasing remorselessly over the ensuing years until it had reached around £380 billion in 1996, costs us around £30 billion a year in interest payments and is still climbing.
By the end of the 17th century, the goldsmiths' scam had become respectable banking. The role of the banks in issuing money through lending to individuals and businesses had already become widely accepted. Thus there came to be established two routes by which money was borrowed into the economy: private and commercial borrowing on the one hand and government borrowing on the other. That combined debt in the present day has now soared to well over one trillion pounds.
In 1704, just ten years after the creation of the Bank of England, the banks' promissory notes, on the recommendation of the bankers and financiers who advised the government, were declared legal tender.
Although the new central bank was an entirely privately owned corporation, the name chosen for it led generations of Englishmen to believe that it was part of their government, when it most certainly was not. Like any other privately owned corporation the new central bank sold shares to create its initial capital. Its investors - whose identities were never disclosed - were supposed to put up a total of £1 ¼ million in gold coin to purchase their shares. Only three quarters of a million was ever received.
Nevertheless, despite that minor technicality, the bank was chartered in 1694 and began the business of lending out several times the money it supposedly had in its reserves.
In exchange for this unique and immensely profitable privilege, the bank would very kindly lend the English, and later British, government as much money as it wanted, at interest, provided the debt was secured by direct taxation of the people.
THE MODERN INCARNATION OF FRAUD
What happens when you or I, or for that matter the government, borrow money from the bank? Prepare yourself for a surprise.
Let's say we want to borrow a £100,000 mortgage on a house. The bank or building society does what the goldsmith did and creates £100,000 out of thin air. Instead of handing us a paper certificate, it simply credits our bank account with the £100,000 and registers that £100,000 as a debt, with (say) a further £100,000 interest over 25 years. The money is simply penned into our account without any account anywhere being debited the loaned money. New money is therefore created. Alongside it a debt (in this case £100,000 plus the roughly £100,000 of interest) is created. When we repay the debt, the interest is accounted as income for the bank. The £100,000 we originally borrowed is withdrawn from circulation and is accounted as collateral for further lending, loaned back into circulation when someone else borrows.
Our house is held as security so if we fail to keep up our repayments, the creditor takes possession of it. The repayments themselves can vary through no fault of our own, according to interest rates set by the banking industry.
After 25 years of blood sweat and tears we finally pay back the last installment of the £200,000 capital-plus-interest we owed and the house in finally ours. It is not ours until that point.
The lender, who loaned us money which did not exist until the moment he created it out of nothing, winds up with £100,000 of interest on the loan: that is real, spendable income that comes courtesy of our real work and real wealth creation. The numbers have been simplified to highlight the nature of the fraud and in practise the process is hidden under a great deal of complexity but this in essence is the process of money creation.
Each time the banks create money they create a debt that is greater than the spending power they create. One can see too that each time they are creating a debt for the borrower, they are ultimately creating debt free money for themselves.
Before the goldsmiths' scam began, the money in circulation was hard currency - usually gold or silver minted into coins which then circulated as the tokens used to represent goods and services. That minting and circulation of coinage was usually administered by the government or king.
However as soon as the goldsmiths' certificates became used in lieu of gold, paper money had made an appearance. As soon as the goldsmiths began issuing paper notes for gold they did not actually have, the goldsmiths were themselves creating new money and lending it into circulation.
One can see that this establishes debt as the basis of our currency. Where once, long ago, the British pound represented something -so much gold or silver - it now represents so much debt, which is not only nothing it is less than nothing.
Extracted from: Your Business Under Siege…and the reasons why. Published by the BAMR, email: BAMR@bamr.fsnet.co.uk Tel: 01342410962 (UK)
“Whoever controls the volume of money in any country is absolute master of all industry and commerce. And when we realize that the entire system is very easily controlled, one way or another, by a few very powerful men at the top, you will not have to be told how periods of inflation and depression originate.”
U.S. President James Garfield. A few weeks after making this statement, he was assassinated on July 12, 1818.
“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from banks, and restored to the people.” Thomas Jefferson
Money was originally invented as a convenient alternative to barter, an alternative without which a highly developed civilisation like ours could not exist.
Imagine trying to pay the taxi driver with a bag of coal or the grocery bill with a box of spanners and a set of golf clubs. Imagine trying to carry all that around with you when you go shopping. As societies grew more complex and social roles became more specialised, the idea of money was conceived as a better and more flexible way to exchange, and thereby distribute among men, goods and services.
Money is quite simply an idea agreed upon among people that some system of tokens or symbols: discs of metal (coins) paper with symbols on it (notes) and so on, will be used by them to represent or stand proxy for goods and services and that those tokens can be exchanged for goods and services. One can then exchange the tokens rather than bags of coal, boxes of spanners or what-have-you and the tokens are easy to carry around. Its workability depends upon the participants' confidence that those tokens are and will continue to be exchangeable for a certain amount of goods or services.
That's all money is. It is no more complicated than that, although men may try to make it seem complex and hard to understand. The truth however, as truths tend to be, is simple; it is alterations of the truth - lies -that are complicated.
Many societies have used gold and silver coins as their tokens, then later pieces of paper to represent gold and silver coins, and later cheques and ledger entries to represent notes and coins and in modern times electronic money, the shifting and balancing of numbers in computer memories, alongside or in place of coins, notes and cheques. Thus when we receive a computer print-out of our bank statement saying we have £500 in our current account we usually visualise a stack of £l0 notes sitting in a vault somewhere, or perhaps a bag of gold coins, although in reality there is no pile of notes or bag of coins, merely the ledger-entry in an electronic memory Saying we have £500. Should we then write a cheque in order to spend £50 of it, the numbers in our ledger change to £450 and the payee's account increases by £50, although no notes, gold or anything else move from one account to another.
Yet it works because we have confidence in it and trust it and we know we can change that £500 for real notes, real coins or real goods or services whenever we want to.
This evolution in the system of tokens we use to represent real goods and services comes about through a succession of bright ideas in the direction of making distribution and exchange more convenient, the movement of wealth between people smoother and faster. However, anything can be used for money, provided people agree to use it and have confidence in it. For instance dried yak dung was once used in Tibet, notched pieces of wood in Medieval England, leather discs in Medieval Europe and even cigarettes and tins of coffee in post-war Germany. The money in use in a country is called currency, from the word current, meaning prevalent, in circulation or in use.
Governments firm up that agreement and confidence by enshrining a particular system of tokens in law and demanding those tokens in payment of taxes. A particular system of creating, denominating, issuing and circulating money - currency - where backed by law and deemed by law the only recognised system, and which cannot be legally refused as payment of a debt, is called legal tender. Where barter is no longer practised, one has to possess those tokens in order to acquire goods and services from others. It is the medium of exchange. Tokens, be they yak dung, metal discs or numbers with the '£' symbol in front of them, are exchanged back and forth between people instead of goods and exchange does now usually occur without the use of tokens or the promise of tokens on the future.
The way one acquires tokens is by producing something and then selling it to someone who has expressed his want for it by offering us some of his tokens. We do the deal and receive the tokens he has offered. Now we can go and exchange those tokens for other products that we desire, which we do not produce ourselves. Thus money enables goods and services to be exchanged among people and distribution of those goods and services to occur naturally, and according to the needs and wants of the participants.
The more of those tokens one possesses or is able to acquire through one's production, the more one can if one wishes acquire goods and services from others. One can also store money in a safe or bank account without having to build a couple of warehouses in which to store container-loads of spare goods. Money therefore confers exchange power or spending power on he who possesses it in direct ratio to the amount of it he is able to offer up for exchange.
GOLDSMITHS
In the old days gold was minted into coins and those coins, along with silver coins, formed the nation's currency. Goldsmiths had strongboxes and vaults in which to securely store the precious metal with which they worked. It was natural enough then that other people took to asking the goldsmith to store their gold and gold coins in his vault and to pay the goldsmith for the service. A merchant (for example) would entrust to the goldsmith £20 worth of his own gold for safekeeping. When he handed over his gold, the goldsmith would provide him with a receipt or note promising to hand back the gold (pay the bearer on demand) whenever the depositor returned and presented the note. The receipt held by the depositor was in fact as good as gold because he could exchange it for his £20 worth of gold any time he chose. But the note was easier to carry around than heavy and bulky amounts of gold and easier to conceal, so the depositor was often content to leave his gold in the goldsmith's safekeeping for long periods. In fact when the time came to pay for some commodity with his £20 of gold, instead of returning to the goldsmith, exchanging the receipt for the gold and then using the gold to pay for his purchase, it was more convenient for him simply to hand over his receipt to the seller. The seller was happy to accept the receipt in lieu of actual gold because it was more convenient to carry around and he knew that should he present it to the goldsmith, £20 of gold would be handed over to him.
Thus those gold receipts began to circulate and became the first paper money. People were happy to exchange them back and forth rather than the cumbersome gold they represented. The receipts had value because people were confident that in the goldsmith's vault lay the gold, which they could redeem at any time.
Eventually the goldsmiths noticed that the gold left by depositors remained in their vaults for longer and longer periods. People turned up wishing to exchange their receipts for gold less and less often, and that the receipts they had issued to depositors circulated in its stead. It seemed a shame to have that gold just sitting there doing nothing. Why not lend some of it out for a while? If it just sat there for year after year the owner, the holder of the receipt, was not going to miss it if it were loaned to someone else for a period.
As long as there was enough gold in the vaults to satisfy anyone who did turn up with a receipt, then no-one would be any the wiser. So depositor Joe would leave £20 of gold with the goldsmith for safekeeping and depart with his receipt which he would then use as money in lieu of the gold and it would circulate. It might be years before anyone turned up with that £20 note asking for £20 of gold. Meanwhile Tom would turn up at the goldsmith's asking to borrow £20 of gold and the goldsmith would lend it to him, demanding that it be paid back after a certain period at a certain amount of interest. But instead of lending Tom actual gold, the goldsmith would draw up a £20 receipt, just like the one depositor Joe had been given. Tom was happy to take the receipt in lieu of the gold because it was more convenient to carry around and people were happy to accept such receipts in payment for things.
So Tom went off with his £20 note, content that through it he was now in temporary possession of £20 of gold. But unbeknownst to Tom, Joe also has a receipt representing that gold. In other words there are now two notes in circulation representing the same £20 of gold! Clearly the goldsmith's issuance of two receipts for the same amount of gold is fraudulent - particularly when Tom repays the gold he believes he has borrowed in real gold. As each receipt promises to hand over the same £20 of gold on demand, the goldsmith is making a promise he knows he cannot keep.
Several things are clear at the moment the second receipt was issued and entered circulation: new money has been created out of thin air; that new money has been loaned into existence; as the loan has interest charged upon it, then a debt has been created out of nothing that is greater than the amount of new money created.
And another thing: Tom will eventually return to the goldsmith and repay his £20 loan, say at 10% interest. He will therefore hand the goldsmith, £22 in real gold. In other words, the goldsmith, in creating that bogus receipt and lending it to Tom, is creating for himself, albeit after a delay, real debt-free gold worth more than the new money he loaned into existence! It gets worse.
After a while the goldsmith, seeing that his fraud is working pretty well, thinks that if he can issue two £20 receipts against the same £20 of gold, then why not two, three or even four?
So Joe deposits £20 of gold and the goldsmith gives him his receipt. In time four other people turn up at his shop wanting to borrow that £20 of gold. The goldsmith obligingly lends it to each of them at interest, giving each a receipt purporting to represent that £20 of gold. There are now five receipts in circulation representing the same deposit of gold, one for the original depositor and one for each of the four borrowers. For that deposit of £20, £80 (4x £20) of new money is created merely by writing on a fancy piece of paper.
If(say) £2 of interest (10%) is charged on each loan, at the same time that £80 of new money is created out of thin air, a debt of £88 is also created out of thin air.
Property is held as security against these loans so if the borrower fails to repay with real gold the fraudulent piece of paper he borrowed, the goldsmith takes his property.
Each time the goldsmith lends £20 of bogus gold he charges 10% interest on the loan. By lending out £20 four times over and charging £2 interest on each loan, the goldsmith makes a whopping 40% (four times £2) in interest on the £20 "reserves" that were not even his to begin with! The goldsmith cannot lose and soon begins to amass a fortune from his fraud. It is the greatest get-rich-quick scheme ever invented. And it is, in essence, the basis of the modern banking system.
The goldsmiths of yesteryear became the bankers of today and although paper money and latterly electronic money took over from gold, essentially the same fraud is being run.
BANKERS
The business of lending pieces of paper pretending to be gold made the goldsmiths very wealthy and very influential men. Their easy wealth enabled them to move to upmarket premises. They became pillars of the community and some even became international financiers, lending money to kings and governments.
In the seventeenth century conflict between the bankers of the day and the Stuarts led the bankers to act in concert with bankers in Europe. They joined forces with those in the Netherlands to finance the invasion of England by William of Orange. William overthrew the Stuart Kings in 1688 and became King William III.
By the end of the 1600s England was in financial ruin, gold and silver supplies were running low and a costly civil war followed by costly wars with France and Holland, all in a fifty year period, had left her heavily in debt.
Government officials met with the financiers to negotiate the loans they needed. King William was £20 million in debt and he could not pay his army. Apparently it did not occur to William or anyone that if William needed to pay his army or get the economy going, all he had to do was have the government print its own money and use that to pay the troops -something that Abraham Lincoln would do successfully during the American Civil war nearly two hundred years later!
King William's "friends", the bankers, were willing to loan him the money he needed but the price they wanted for their "help" was high. They wanted a government-sanctioned but privately owned central bank that could; through fractional reserve lending, create money out of nothing and loan it to the government.
They got their way. In 1694 the world's first privately owned central bank was created. It was to be called the Bank of England. The Bank's charter included the following immortal words: "The bank hath benefit on the interest on all monies which it creates out of nothing."
Instead of exercising its right to create money and spend it into the economy, the government had the bank create it, then lend it to the government so that the government could spend it into the economy, then pay the loans back later at interest. That completely unnecessary complication was to have devastating consequences for the futures of the English people.
As well as delivering extraordinary power over the nation into the hands of a privately owned business corporation, it began the National Debt, a debt that would go on increasing remorselessly over the ensuing years until it had reached around £380 billion in 1996, costs us around £30 billion a year in interest payments and is still climbing.
By the end of the 17th century, the goldsmiths' scam had become respectable banking. The role of the banks in issuing money through lending to individuals and businesses had already become widely accepted. Thus there came to be established two routes by which money was borrowed into the economy: private and commercial borrowing on the one hand and government borrowing on the other. That combined debt in the present day has now soared to well over one trillion pounds.
In 1704, just ten years after the creation of the Bank of England, the banks' promissory notes, on the recommendation of the bankers and financiers who advised the government, were declared legal tender.
Although the new central bank was an entirely privately owned corporation, the name chosen for it led generations of Englishmen to believe that it was part of their government, when it most certainly was not. Like any other privately owned corporation the new central bank sold shares to create its initial capital. Its investors - whose identities were never disclosed - were supposed to put up a total of £1 ¼ million in gold coin to purchase their shares. Only three quarters of a million was ever received.
Nevertheless, despite that minor technicality, the bank was chartered in 1694 and began the business of lending out several times the money it supposedly had in its reserves.
In exchange for this unique and immensely profitable privilege, the bank would very kindly lend the English, and later British, government as much money as it wanted, at interest, provided the debt was secured by direct taxation of the people.
THE MODERN INCARNATION OF FRAUD
What happens when you or I, or for that matter the government, borrow money from the bank? Prepare yourself for a surprise.
Let's say we want to borrow a £100,000 mortgage on a house. The bank or building society does what the goldsmith did and creates £100,000 out of thin air. Instead of handing us a paper certificate, it simply credits our bank account with the £100,000 and registers that £100,000 as a debt, with (say) a further £100,000 interest over 25 years. The money is simply penned into our account without any account anywhere being debited the loaned money. New money is therefore created. Alongside it a debt (in this case £100,000 plus the roughly £100,000 of interest) is created. When we repay the debt, the interest is accounted as income for the bank. The £100,000 we originally borrowed is withdrawn from circulation and is accounted as collateral for further lending, loaned back into circulation when someone else borrows.
Our house is held as security so if we fail to keep up our repayments, the creditor takes possession of it. The repayments themselves can vary through no fault of our own, according to interest rates set by the banking industry.
After 25 years of blood sweat and tears we finally pay back the last installment of the £200,000 capital-plus-interest we owed and the house in finally ours. It is not ours until that point.
The lender, who loaned us money which did not exist until the moment he created it out of nothing, winds up with £100,000 of interest on the loan: that is real, spendable income that comes courtesy of our real work and real wealth creation. The numbers have been simplified to highlight the nature of the fraud and in practise the process is hidden under a great deal of complexity but this in essence is the process of money creation.
Each time the banks create money they create a debt that is greater than the spending power they create. One can see too that each time they are creating a debt for the borrower, they are ultimately creating debt free money for themselves.
Before the goldsmiths' scam began, the money in circulation was hard currency - usually gold or silver minted into coins which then circulated as the tokens used to represent goods and services. That minting and circulation of coinage was usually administered by the government or king.
However as soon as the goldsmiths' certificates became used in lieu of gold, paper money had made an appearance. As soon as the goldsmiths began issuing paper notes for gold they did not actually have, the goldsmiths were themselves creating new money and lending it into circulation.
One can see that this establishes debt as the basis of our currency. Where once, long ago, the British pound represented something -so much gold or silver - it now represents so much debt, which is not only nothing it is less than nothing.
Extracted from: Your Business Under Siege…and the reasons why. Published by the BAMR, email: BAMR@bamr.fsnet.co.uk Tel: 01342410962 (UK)
“Whoever controls the volume of money in any country is absolute master of all industry and commerce. And when we realize that the entire system is very easily controlled, one way or another, by a few very powerful men at the top, you will not have to be told how periods of inflation and depression originate.”
U.S. President James Garfield. A few weeks after making this statement, he was assassinated on July 12, 1818.
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