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.
Monday, September 29, 2008
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.
Friday, September 12, 2008
Selling Virginity Is Feminist's Logical Choice
Henry Makow Ph.D. – September 12, 2008
Natalie Dylan", the 22-year-old San Diego woman who is auctioning her virginity to pay her tuition is a Women's Studies grad.
Her decision to prostitute herself is the natural result of an "education" ( i.e. indoctrination) that trashes marriage and family. It also shows how feminism, which pretended to oppose the sexual objectification of women, has had the exact opposite effect.
Sounding every bit the feminist, Ms. Dylan (not her real name) says: "I don't have a moral dilemma about it. We live in a capitalist society. Why shouldn't I be allowed to capitalize on my virginity? I understand some people may condemn me. But I think this is empowering. I'm using what I have to better myself."
This girl has a degree in Woman's Studies and yet thinks her most valuable asset is her vagina?
Yet she wishes to raise the price of that commodity by recalling the traditional morality that held virginity in high regard.
Can she have it both ways?
Men put a value on virginity only in a wife. Virginity in a prostitute is not an asset, but a serious liability.
Dylan proposes to complete the transaction at a Nevada brothel where her sister already works. Why would a man pay an exorbitant price for an amateur when he is surrounded by pros?
In 2004, Rosie Reid, an 18-yr. old British lesbian sold her virginity for $20,000. Reid admitted the experience was "horrible" but blessedly brief. "It was horrible. . . I felt nervous and scared," she said.
How much pleasure can a man get from sex with such a woman? Dylan's venture exposes her (and society's) naive attitude about sex. If a man's satisfaction were merely sexual release, he could masturbate. His pleasure comes from the woman's total emotional and physical response to him. A prostitute or a professional virgin is not going to satisfy him.
FEMINISM AND SEX
Sex has become a commodity because feminism has alienated women from their social role as wives and mothers. Divorced from this identity, they tend to be sexual commodities and sex is impersonal physical release.
Inversely, men generally do not see wives and mothers as sex objects. For one thing, another man will thrash them if they do.
Women used to devote their lives to their families and saved their virginity for their husband. This had the effect of creating stable permanent marriages capable of producing healthy children. Families are necessary for our personal development, no matter if we are women , men or children.
Feminism, with its hidden lesbian agenda, is brainwashing and social engineering. It was fostered by the financial elite in order to destabilize family en route to creating a totalitarian state. The destruction of the family was a plank in the Communist Manifesto, which was financed by these same bankers.
Young women today are lost souls, betrayed by their society to think their only value lies in sex appeal and career. They are willing to have promiscuous sex to assuage their sense of worthlessness. This only undermines their chance of marital success.
Ironically, Natalie Dylan wants to use her money to pursue a Master's degree in "Marriage and Family Therapy."
Related: "How Feminism Killed Courtship on Campus"
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
Wednesday, September 10, 2008
Durable Power Of Attorney Info
The durable power of attorney (POA) is a legal form, which can be used by a competent adult to appoint another person to act as their agent to manage their financial affairs. It's 'durable' because it stays in full effect even if you become disabled. Usually at inopportune times would be when you need your agent the most, that’s why this legal form was created.
Unlike a general POA it won't be inoperative when the principal, person who made the poa, becomes disabled. Although the agent has this power, he must operate under the terms, conditions, limitations, and guidelines outlined in the durable POA.
If you were ever to become disabled, for any reason during your lifetime and did not have a durable power of attorney then you have just missed your chance to appoint an agent. The only way some one could be appointed to act on your behalf is if your local Probate Court was requested to appoint someone. These proceedings are called 'Guardianship proceedings' or 'Conservatorship proceedings'. Unfortunately, this process is expensive and time consuming. That's why most people decide they don't want the court to be able to intervene, they want to be able to choose their own agent they trust, and that’s why they fill out a durable poa.
Another advantage to having a durable power of attorney is that it can be used to protect your assets. When a disabled person enters a nursing home that did not take steps to shelter some of their assets, then all of the assets could be exposed to being used to pay for the nursing home care. Under the current law, up to one half of those assets could be transferred or gifted and thus sheltered by using a properly drawn up durable poa that permitted gifting. Without a durable poa with gifting provisions then it’s unlikely a disabled person will be able to protect any of their assets if they’re emitted to a nursing home.
Defining the agent’s authority is completely up to the principal. Under the durable power of attorney, the principal can make the agents authority as broad or as limited as they wish. A typical form will be drawn up giving broad authorities so that the agent can manage any and all financial affairs. Other principals may only want their agents to handle certain assets or follow a specific wish, that’s perfectly ok too. As an example you may give your agent the power to handle your stocks, bonds, banking, insurance, and tax matters or other matters on your behalf.
Sometimes a durable power of attorney will have more than one agent. You must decide if they will act independently or decide on issues together. Most people believe its better allow them to act independently to avoid conflicts and court battles that could delay a decision. Or, instead they will name their second agent as an alternative in case something happens to the primary agent.
Disclaimer: This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as legal advice or used to make legal decisions. Consult an attorney in your area if you’re seeking legal advice.
Unlike a general POA it won't be inoperative when the principal, person who made the poa, becomes disabled. Although the agent has this power, he must operate under the terms, conditions, limitations, and guidelines outlined in the durable POA.
If you were ever to become disabled, for any reason during your lifetime and did not have a durable power of attorney then you have just missed your chance to appoint an agent. The only way some one could be appointed to act on your behalf is if your local Probate Court was requested to appoint someone. These proceedings are called 'Guardianship proceedings' or 'Conservatorship proceedings'. Unfortunately, this process is expensive and time consuming. That's why most people decide they don't want the court to be able to intervene, they want to be able to choose their own agent they trust, and that’s why they fill out a durable poa.
Another advantage to having a durable power of attorney is that it can be used to protect your assets. When a disabled person enters a nursing home that did not take steps to shelter some of their assets, then all of the assets could be exposed to being used to pay for the nursing home care. Under the current law, up to one half of those assets could be transferred or gifted and thus sheltered by using a properly drawn up durable poa that permitted gifting. Without a durable poa with gifting provisions then it’s unlikely a disabled person will be able to protect any of their assets if they’re emitted to a nursing home.
Defining the agent’s authority is completely up to the principal. Under the durable power of attorney, the principal can make the agents authority as broad or as limited as they wish. A typical form will be drawn up giving broad authorities so that the agent can manage any and all financial affairs. Other principals may only want their agents to handle certain assets or follow a specific wish, that’s perfectly ok too. As an example you may give your agent the power to handle your stocks, bonds, banking, insurance, and tax matters or other matters on your behalf.
Sometimes a durable power of attorney will have more than one agent. You must decide if they will act independently or decide on issues together. Most people believe its better allow them to act independently to avoid conflicts and court battles that could delay a decision. Or, instead they will name their second agent as an alternative in case something happens to the primary agent.
Disclaimer: This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as legal advice or used to make legal decisions. Consult an attorney in your area if you’re seeking legal advice.
Tuesday, September 9, 2008
Stoking the Fires for War
Phillip Weiss – Phillip Weiss.org September 7, 2008
Report: '60 Minutes' Cut Ahmadinejad's Statement, 'Solution Is Democracy' in Israel/Palestine
The interview that Mike Wallace (born Myron Leon Wallace) did of Iranian president Mahmoud Ahmadinejad 2 years ago was aired on C-Span recently, and a diligent blogger has reported on what "60 Minutes" cut out of the interview when it aired.
When Wallace confronted Ahmadinejad with the "wipe Israel off the map" threats, Ahmadinejad said that "the solution is democracy" in Israel and Palestine, a suggestion that he favors a one-state solution. I agree with blogger Tom Murphy that "60"'s edits misrepresent Ahmadinejad's thrust, making him out to be far more confrontational than he is, especially after Wallace promised Ahmadinejad that he would listen to his complete answers to questions. And yes, that this amounts to "suppression of basic facts concerning Israel and the Palestinians."
Here's Murphy's data:
The text in italic was edited out of the 60 Minutes broadcast:
MR. WALLACE: You are very good at filibustering. You still have not answered the question. You still have not answered the question. Israel must be wiped off the map. Why?
PRESIDENT AHMADINEJAD: Well, don't be hasty, sir. I'm going to get to that.
MR. WALLACE: I'm not hasty.
PRESIDENT AHMADINEJAD: I think that the Israeli government is a fabricated government and I have talked about the solution. The solution is democracy. We have said allow Palestinian people to participate in a free and fair referendum to express their views. What we are saying only serves the cause of durable peace. We want durable peace in that part of the world. A durable peace will only come about with once the views of the people are met.
So we said that allow the people of Palestine to participate in a referendum to choose their desired government, and of course, for the war to come an end as well. Why are they refusing to allow this to go ahead? Even the Palestinian administration and government which has been elected by the people is being attacked on a daily basis, and its high-ranking officials are assassinated and arrested. Yesterday, the speaker of the Palestinian parliament was arrested, elected by the people, mind you. So how long can this go on?
We believe that this problem has to be dealt with fundamentally. I believe that the American government is blindly supporting this government of occupation. It should lift its support, allow the people to participate in free and fair elections. Whatever happens let it be. We will accept and go along. The result will be as you said earlier, sir.
MR. WALLACE: Look, I mean no disrespect. Let's make a deal. I will listen to your complete answers if you'll stay for all of my questions. My concern is that we might run out of time.
PRESIDENT AHMADINEJAD: Well, you're free to ask me any questions you please, and I am hoping that I'm free to be able to say whatever is on my mind. You are free to put any question you want to me, and of course, please give me the right to respond fully to your questions to say what is on my mind.
Do you perhaps want me to say what you want me to say? Am I to understand –
MR. WALLACE: No.
PRESIDENT AHMADINEJAD: So if that is the case, then I ask you to please be patient.
MR. WALLACE: I said I'll be very patient.
PRESIDENT AHMADINEJAD: Maybe these are words that you don't like to hear, Mr. Wallace.
MR. WALLACE: Why? What words do I not like to hear? [the words highlighted in italic and edited out of the interview]
PRESIDENT AHMADINEJAD: Because I think that you're getting angry.
MR. WALLACE: No, I couldn't be happier for the privilege of sitting down with the president of Iran.
Report: '60 Minutes' Cut Ahmadinejad's Statement, 'Solution Is Democracy' in Israel/Palestine
The interview that Mike Wallace (born Myron Leon Wallace) did of Iranian president Mahmoud Ahmadinejad 2 years ago was aired on C-Span recently, and a diligent blogger has reported on what "60 Minutes" cut out of the interview when it aired.
When Wallace confronted Ahmadinejad with the "wipe Israel off the map" threats, Ahmadinejad said that "the solution is democracy" in Israel and Palestine, a suggestion that he favors a one-state solution. I agree with blogger Tom Murphy that "60"'s edits misrepresent Ahmadinejad's thrust, making him out to be far more confrontational than he is, especially after Wallace promised Ahmadinejad that he would listen to his complete answers to questions. And yes, that this amounts to "suppression of basic facts concerning Israel and the Palestinians."
Here's Murphy's data:
The text in italic was edited out of the 60 Minutes broadcast:
MR. WALLACE: You are very good at filibustering. You still have not answered the question. You still have not answered the question. Israel must be wiped off the map. Why?
PRESIDENT AHMADINEJAD: Well, don't be hasty, sir. I'm going to get to that.
MR. WALLACE: I'm not hasty.
PRESIDENT AHMADINEJAD: I think that the Israeli government is a fabricated government and I have talked about the solution. The solution is democracy. We have said allow Palestinian people to participate in a free and fair referendum to express their views. What we are saying only serves the cause of durable peace. We want durable peace in that part of the world. A durable peace will only come about with once the views of the people are met.
So we said that allow the people of Palestine to participate in a referendum to choose their desired government, and of course, for the war to come an end as well. Why are they refusing to allow this to go ahead? Even the Palestinian administration and government which has been elected by the people is being attacked on a daily basis, and its high-ranking officials are assassinated and arrested. Yesterday, the speaker of the Palestinian parliament was arrested, elected by the people, mind you. So how long can this go on?
We believe that this problem has to be dealt with fundamentally. I believe that the American government is blindly supporting this government of occupation. It should lift its support, allow the people to participate in free and fair elections. Whatever happens let it be. We will accept and go along. The result will be as you said earlier, sir.
MR. WALLACE: Look, I mean no disrespect. Let's make a deal. I will listen to your complete answers if you'll stay for all of my questions. My concern is that we might run out of time.
PRESIDENT AHMADINEJAD: Well, you're free to ask me any questions you please, and I am hoping that I'm free to be able to say whatever is on my mind. You are free to put any question you want to me, and of course, please give me the right to respond fully to your questions to say what is on my mind.
Do you perhaps want me to say what you want me to say? Am I to understand –
MR. WALLACE: No.
PRESIDENT AHMADINEJAD: So if that is the case, then I ask you to please be patient.
MR. WALLACE: I said I'll be very patient.
PRESIDENT AHMADINEJAD: Maybe these are words that you don't like to hear, Mr. Wallace.
MR. WALLACE: Why? What words do I not like to hear? [the words highlighted in italic and edited out of the interview]
PRESIDENT AHMADINEJAD: Because I think that you're getting angry.
MR. WALLACE: No, I couldn't be happier for the privilege of sitting down with the president of Iran.
Sunday, September 7, 2008
Mysteries of the Universe will be solved, Starting next Wednesday
The CMS detector will trace sub-atomic debris created when particles travelling almost at the speed of light collide
MARK HENDERSON, SCIENCE EDITOR
It is the most ambitious and expensive civilian science experiment in history, based on the biggest machine that humanity has yet built. It has sparked alarmist fears that it might create a black hole that will tear the Earth apart, and it has triggered two last-minute legal attempts to stop it
And next Wednesday, after almost two decades of planning and construction, the project in question will finally get under way.
Beneath the foothills of the Jura mountains, in a network of tunnels that bring to mind the lair of a crazed Bond villain, scientists will fire a first beam of particles around a ring as long as the Circle Line on the London Underground. This colossal circuit, 17 miles (27km) in circumference, is the world’s most powerful atom-smasher, the £3.5 billion Large Hadron Collider (LHC), created at CERN, the European particle physics laboratory near Geneva. Some 10,000 scientists and engineers from 85 countries have been involved. In the years ahead it will recreate the high-energy conditions that existed one trillionth of a second after the big bang. In doing so, it should solve many of the most enduring mysteries of the Universe.
This extraordinary feat of engineering will accelerate two streams of protons to within 99.9999991 per cent of the speed of light, so that they complete 11,245 17-mile laps in a single second.
The two streams will collide, at four points, with the energy of two aircraft carriers sailing into each other at 11 knots, inside detectors so vast that one is housed in a cavern that could enclose the nave of Westminster Abbey. The detectors will trace the sub-atomic debris that is thrown off by the collisions, to reveal new particles and effects that may never have existed on Earth before. The mountains of data produced will shed light on some of the toughest questions in physics.
The origin of mass, the workings of gravity, the existence of extra dimensions and the nature of the 95 per cent of the Universe that cannot be seen will all be examined. Perhaps the biggest prize of all is the “God particle” – the Higgs boson. This was first proposed in 1964 by Peter Higgs, of Edinburgh University, as an explanation for why matter has mass, and can thus coalesce to form stars, planets and people. Previous atom-smashers, however, have failed to find it, but because the LHC is so much more powerful, scientists are confident that it will succeed. Even a failure, however, would be exciting, because that would pose new questions about the laws of nature.
“What we find honestly depends on what’s there,” said Brian Cox, of the University of Manchester, an investigator on one of the four detectors, named Atlas. “I don’t believe there’s ever been a machine like this, that’s guaranteed to deliver. We know it will discover exciting things. We just don’t know what they are yet.” The guarantee applies, however, only if the hardware works as it should, and the LHC’s first big test comes on Wednesday, when the first beam of particles is injected into the accelerator. That is a huge technical challenge. “The beam is 2mm in diameter and has to be threaded into a vacuum pipe the size of a 50p piece around a 27km loop,” said Lyn Evans, the LHC’s project manager, who will oversee the insertion. “It is not going to be trivial.”
Engineers will use magnets to bend the beam around the LHC’s eight sectors, until it finally begins to circulate. “That’ll be the first sight of relief, that there are no obstacles in the vacuum chamber,” Dr Evans said. “There could be a Kleenex in the chamber – we’ve had that before. Only when we get the beam around will we be able to tell it’s clear.” Once the first beam is in – probably the one running clockwise, though that has yet to be decided – the team will insert the second, anticlockwise stream of particles. The first collisions, to test the detectors, should follow by the end of next week.
The next step will be to “capture” the beams so they fire in short pulses, 2,800 times a second. These will then be accelerated to an energy of 5 tera-electronvolts (TeV), generating collisions of 10TeV.The detectors should be calibrated by the end of the year and the collisions will then be ramped up to their maximum energy of 14TeV, generating the conditions that prevailed fractions of a second after the Big Bang.
One of the first scientific discoveries is likely to concern a theory called supersymmetry. Tejinder Virdee, of Imperial College, London, who leads the Compact Muon Solenoid (CMS) detector team, said: “What supersymmetry predicts is that, for every particle you have a partner, so it doubles up the spectrum.
You have a whole new zoology of particles, if you like.” Theory suggests that if supersymmetry is real, evidence to confirm it should emerge quickly from the LHC, possibly as soon as next year. “If it pops up it’ll be quite easy to see,” Professor Cox said.
Such a discovery might also help to explain dark matter, which is thought to account for much of the missing mass of the Universe. Only about 4 per cent of matter – galaxies and the like – is visible to our telescopes. “In this new zoology, the lightest super-symmetric particle is a prime candidate for explaining dark matter,” Professor Virdee said.
The search for the Higgs could take longer, though it depends on the particle’s mass and thus the energy of the collisions in which it might be found. If it is at the heavier end of the possible range, the discovery could take as little as 12 months. A lighter Higgs would take longer to find, as the particles into which it would decay would also be lighter and harder to track.
Other potential discoveries include evidence for the existence of extra dimensions beyond the familiar three of space and one of time, and the creation of miniature (and harmless) black holes, though these are less probable. “Most of us think we’d be very lucky to find these things,” Professor Cox said.
There are two more detectors. The LHCb will investigate why there is any matter in the Universe at all, while Alice aims to study a mixture known as quark-gluon plasma, which last existed in the first millionth of a second after the big bang.
From gluons to sparticles
Particle
In physics, this term refers to sub-atomic particles – entities that are smaller than atoms. Some, such as protons and electrons, are the constituents of atoms. Others, such as quarks, are the constituents of other particles. Still others, such as photons and neutrinos, are generated by the Sun. And yet more, such as the Higgs boson, are theoretical: predicted but still undiscovered
Hadron
This is more than an excuse for a geeky physics joke – “Is that your hadron, or are you just pleased to see me?” Hadrons are particles with mass, made up of quarks that have been bound together
Protons, neutrons, quarks and gluons
Protons and neutrons are the best-known types of hadron. Each is composed of three smaller units, called quarks, and gluons that stick the quarks together. Protons have a positive charge, while neutrons have a neutral charge
Higgs boson
A theoretical particle, which is thought to give matter its mass. First proposed by Peter Higgs, of the University of Edinburgh, in 1964, it is sometimes nicknamed the “God particle”. The Large Hadron Collider (LHC) should confirm whether it exists. The theory suggests that other particles travel through and interact with a field of Higgs bosons, which slows the particles down and gives rise to their mass. The process is often likened to moving through treacle. In the early 1990s Lord Waldegrave of North Hill, then the Science Minister, staged a competition for the best explanation. The winning analogy was of Margaret Thatcher – a massive particle – wandering through a Tory cocktail party and gathering hangers-on as she went
Standard model
The orthodox theory of modern physics. It is based on two other theories – general relativity and quantum mechanics – and its main weakness is that it cannot yet fully describe gravity or mass
Quantum mechanics
The main principle of the standard model, which describes how particles and forces behave at atomic and sub-atomic scales
General relativity
Einstein’s theory describing gravity. It is exceptionally well attested, but not fully compatible with quantum mechanics
Supersymmetry
The hypothesis that all particles have an accompanying partner known as a “superparticle” or “sparticle”. There is good theoretical evidence for it, but it has not yet been confirmed by experiment
Dark matter
Only about 4 per cent of the Universe is made up of visible matter. Another 25 per cent is “dark matter” – which can be inferred from its gravity, but cannot be seen. The remaining 71 per cent is still more mysterious “dark energy”. The LHC could shed light on what dark matter is, possibly through discoveries about supersymmetry
Extra dimensions
We are all familiar with four dimensions – three of space and one of time. But some theoretical physicists suggest that there could be as many as 26. Most physicists find these every bit as hard to visualise as normal people, but they make mathematical sense
The Independent Sep 05, 2008
The Big Question: Is our understanding of the Universe about to be transformed?
By Steve Connor, Science Editor
Friday, 5 September 2008
Independent Graphics
Why are we asking this now?
Next Wednesday the biggest machine and international scientific experiment ever built will be switched on. Called the Large Hadron Collider (LHC), it is a giant $10bn "atom smasher" that has been constructed at the European centre for nuclear research (Cern) in Geneva.
It consists of an underground circular tunnel 27 kilometres in circumference, which is about the size of the Circle Line on the London Underground. At various points along the tunnel, four massive instruments have been positioned to act as sub-atomic microscopes for analysing the extremely high-energy collisions that will occur between two opposing beams of protons, the atomic nuclei of hydrogen atoms. The aim of the experiment is to understand the fundamental forces of nature and the sub-atomic particles that compose all matter in the Universe.
Why is it causing such excitement?
Although we have built "atom smashers" before, this one is different in terms of how much energy will be involved. Two beams of protons will be spun in opposite directions within the underground tunnel and will attain speeds just a fraction shy of the speed of light, meaning that they will make about 11,000 laps of the circuit every second.
When they are accelerated in this way to collide head-on with each other, the resulting impact between the two proton beams will generate about seven times the energy of the LHC's nearest rival machine, the Tevatron atom smasher in Batavia, Illinois. The LHC scientists hope to get up to energy levels of 14 teraelectron volts (TeV) and so in the process create conditions that last occurred less than a billionth of a second after the Big Bang, when the Universe was created some 13.7 billion years ago.
What's the point of all this?
In order to understand what things are made of, and the forces that hold them together, it is necessary to break apart the sub-atomic constituents of matter. It is only by breaking apart a proton that scientists are able to see what is going on within this infinitesimally small unit of matter. The answer comes down to even smaller particles, some of which are so small or elusive that they have so far escaped detection. So far we know of 12 subatomic particles and 4 forces, but this is just the start. More importantly, scientists hope to resolve some of the biggest problems in physics. They hope for instance to one day unify all the disparate forces of nature, from the small-scale nuclear forces within an atomic nucleus to the force of gravity, which acts between planets and galaxies. They call this the "theory of everything" and there is hope that the LHC will make important contributions to our wider understanding of the biggest questions concerning creation, time and the nature of matter.
Isn't it risky to mess around with high-energy collisions?
There are some theorists who believe that the collisions may create "mini" black holes. But even if they do result from the experiment, they will be sub-microscopic in size and disappear within a fraction of second of coming into existence.
Few if any sensible scientists believe that these minuscule black holes pose any threat, for instance by merging into a bigger black hole that could swallow up Geneva. Some Russian scientists have also suggested that it may be possible for the LHC to create the conditions that could in theory allow time travel. They have rather fancifully painted a scenario where future time travellers come back to visit us through the LHC, but, as other theorists have pointed out, such time travellers would have to be atom-sized to pass through the tiny "worm holes" through time and space that the LHC may or may not create.
What exactly will happen when the experiment gets under way?
For the first time, scientists will attempt to put a beam of protons into the tunnel and to accelerate it around the entire circuit. Then, possibly later that day, or certainly in the days to follow, a second beam will be put into the tunnel and accelerated around the same tunnel but in the opposite direction. It is just possible, although unlikely, that the two beams might collide, which will cause the instruments to start registering readings. However, it is only when all the finer adjustments have been made that the two beams will reach the highest energy levels that could result in some very interesting discoveries.
What important findings might emerge?
The most interesting things are almost certainly going to be those that are least expected -- or even totally unpredicted. However, there is one sub-atomic particle that theorists have already predicted to exist.
Formally called the Higgs boson, but nicknamed the "God Particle", it could explain why matter has mass and hence lead to a greater understanding of the force of gravity. At the energy levels of the LHC, it is very likely that the first Higgs boson will be registered. Indeed, Prof Peter Higgs of Edinburgh University is 90 per cent confident that the particle named after him will be discovered by the LHC. How quickly the Higgs is found – assuming it exists – depends on how heavy it is, with a lighter Higgs being harder to detect than a heavier one. But this is just one of many possible discoveries that the LHC could make. Physicists hope that the machine will also find the mysterious supersymmetry particles that are thought to have been created at the beginning of the Universe. The theory of supersymmetry says that all known particle have a heavier partner, but none has ever been detected.
If the LHC finds evidence of supersymmetrical particles, it may have also found the reason why 90 per cent of the mass of the Universe exists as invisible "dark matter".
How difficult was it to build the LHC and its machines?
Very. The 27-km tunnel is aligned to better than a tenth of a millimetre and underground rivers had to be temporarily frozen to permit its construction. The giant magnets used to accelerate the proton beams have to be held together with a force that can resist 500 tons per square metre -– equivalent to one jumbo jet per square metre.
They are supercooled to 1.8 degrees above absolute zero (-273C), making the LHC the coldest place in the known universe, with enough freezing capacity to keep 140,000 domestic fridges at a temperature of -271.2C. The civil and mechanical engineering involved was almost as momentous as the science, which could account for why next week's switch on was originally scheduled for three years ago.
Is such a huge experiment worth it?
Yes...
* We need to know how the Universe is put together to understand our place in it
* The cost is trivial compared with that of not expanding on our existing knowledge
* There have been huge spin-offs from similar experiments, notably the internet
No...
* The science is too distant and abstruse for enough worthwhile benefits to humanity
* Particle physics is less important than, say, medicine and biology
* If scientists have misunderstood the physics there's a risk of creating a black hole
The Daily Telegraph Sep 05, 2008
Scientists get death threats
over Large Hadron Collider
By Roger Highfield, Science Editor
Last Updated: 12:01am BST 05/09/2008
Scientists working on the world's biggest machine are being besieged by phone calls and emails from people who fear the world will end next Wednesday, when the gigantic atom smasher starts up.
• Rap about Large Hadron Collider becomes YouTube hit
• The Big Bang: atom-smashing could uncover truth
• Time travellers from the future 'could be here in weeks'
The Large Hadron Collider near Geneva, where particles will begin to circulate around its 17 mile circumference tunnel next week, will recreate energies not seen since the universe was very young, when particles smash together at near the speed of light.
Hadron Collider: The final pieces slot into place
Such is the angst that the American Nobel prize winning physicist Frank Wilczek of the Massachusetts Institute of Technology has even had death threats, said Prof Brian Cox of Manchester University, adding: "Anyone who thinks the LHC will destroy the world is a t---."
The head of public relations, James Gillies, says he gets tearful phone calls, pleading for the £4.5 billion machine to stop.
"They phone me and say: "I am seriously worried. Please tell me that my children are safe," said Gillies. Emails also arrive every day that beg for reassurance that the world will not end, he explained. Others are more aggressive. "There are a number who say: "You are evil and dangerous and you are going to destroy the world." "I find myself getting slightly angry, not because people are getting in touch but the fact they have been driven to do that by what is nonsense. What we are doing is enriching humanity, not putting it at risk."
There have also been legal attempts to halt the start up. The remarkable outpouring of concern about turning on the experiment, the most ambitious in history, comes as a new report concludes that it poses no threat to mankind.
Since 1994, when the collider was first mooted by the multi-national European nuclear research organisation (CERN), dogged doomsayers have claimed that there would be a small but real risk that an unstoppable cataclysm would take place. Many of the emails received by Gillies cite a gloomy book - Our Final Century?: Will the Human Race Survive the Twenty-first Century? - written by Lord Rees, astronomer royal and president of the Royal Society.
"My book has been misquoted in one or two places," Lord Rees said yesterday. "I would refer you to the up-to-date safety study." The new report published today provides the most comprehensive evidence available to confirm that nature's own cosmic rays regularly produce more powerful particle collisions than those planned within the LHC. The LHC Safety Assessment Group has reviewed and updated a study first completed in 2003, which dispels fears of universe-gobbling black holes and of other possibly dangerous new forms of matter, and confirms that the switch-on will be safe.
The report, 'Review of the Safety of LHC Collisions', published in the Journal of Physics G: Nuclear and Particle Physics, proves that if particle collisions at the LHC had the power to destroy the Earth, we would never have been given the chance to worry about the LHC, because regular interactions with more energetic cosmic rays would already have destroyed the Earth.
The Safety Assessment Group writes, "Nature has already conducted the equivalent of about a hundred thousand LHC experimental programmes on Earth - and the planet still exists." The Group compares the rates of cosmic rays that bombard Earth to show that hypothetical black holes or strangelets, that have raised fears in some, will pose no threat.
As the Group writes, "Each collision of a pair of protons in the LHC will release an amount of energy comparable to that of two colliding mosquitoes, so any black hole produced would be much smaller than those known to astrophysicists." They also say that such microscopic black holes could not grow dangerously. As for the equally hypothetical strangelets, the review uses recent experimental measurements at the Brookhaven National Laboratory's Relativistic Heavy-Ion Collider, New York, to prove that they will not be produced in the LHC.
The collider is designed to seek out new particles including the long-awaited Higgs boson responsible for making things weigh what they do, the possible source of gravity called dark matter, as well as probe the differences between matter and antimatter.
MARK HENDERSON, SCIENCE EDITOR
It is the most ambitious and expensive civilian science experiment in history, based on the biggest machine that humanity has yet built. It has sparked alarmist fears that it might create a black hole that will tear the Earth apart, and it has triggered two last-minute legal attempts to stop it
And next Wednesday, after almost two decades of planning and construction, the project in question will finally get under way.
Beneath the foothills of the Jura mountains, in a network of tunnels that bring to mind the lair of a crazed Bond villain, scientists will fire a first beam of particles around a ring as long as the Circle Line on the London Underground. This colossal circuit, 17 miles (27km) in circumference, is the world’s most powerful atom-smasher, the £3.5 billion Large Hadron Collider (LHC), created at CERN, the European particle physics laboratory near Geneva. Some 10,000 scientists and engineers from 85 countries have been involved. In the years ahead it will recreate the high-energy conditions that existed one trillionth of a second after the big bang. In doing so, it should solve many of the most enduring mysteries of the Universe.
This extraordinary feat of engineering will accelerate two streams of protons to within 99.9999991 per cent of the speed of light, so that they complete 11,245 17-mile laps in a single second.
The two streams will collide, at four points, with the energy of two aircraft carriers sailing into each other at 11 knots, inside detectors so vast that one is housed in a cavern that could enclose the nave of Westminster Abbey. The detectors will trace the sub-atomic debris that is thrown off by the collisions, to reveal new particles and effects that may never have existed on Earth before. The mountains of data produced will shed light on some of the toughest questions in physics.
The origin of mass, the workings of gravity, the existence of extra dimensions and the nature of the 95 per cent of the Universe that cannot be seen will all be examined. Perhaps the biggest prize of all is the “God particle” – the Higgs boson. This was first proposed in 1964 by Peter Higgs, of Edinburgh University, as an explanation for why matter has mass, and can thus coalesce to form stars, planets and people. Previous atom-smashers, however, have failed to find it, but because the LHC is so much more powerful, scientists are confident that it will succeed. Even a failure, however, would be exciting, because that would pose new questions about the laws of nature.
“What we find honestly depends on what’s there,” said Brian Cox, of the University of Manchester, an investigator on one of the four detectors, named Atlas. “I don’t believe there’s ever been a machine like this, that’s guaranteed to deliver. We know it will discover exciting things. We just don’t know what they are yet.” The guarantee applies, however, only if the hardware works as it should, and the LHC’s first big test comes on Wednesday, when the first beam of particles is injected into the accelerator. That is a huge technical challenge. “The beam is 2mm in diameter and has to be threaded into a vacuum pipe the size of a 50p piece around a 27km loop,” said Lyn Evans, the LHC’s project manager, who will oversee the insertion. “It is not going to be trivial.”
Engineers will use magnets to bend the beam around the LHC’s eight sectors, until it finally begins to circulate. “That’ll be the first sight of relief, that there are no obstacles in the vacuum chamber,” Dr Evans said. “There could be a Kleenex in the chamber – we’ve had that before. Only when we get the beam around will we be able to tell it’s clear.” Once the first beam is in – probably the one running clockwise, though that has yet to be decided – the team will insert the second, anticlockwise stream of particles. The first collisions, to test the detectors, should follow by the end of next week.
The next step will be to “capture” the beams so they fire in short pulses, 2,800 times a second. These will then be accelerated to an energy of 5 tera-electronvolts (TeV), generating collisions of 10TeV.The detectors should be calibrated by the end of the year and the collisions will then be ramped up to their maximum energy of 14TeV, generating the conditions that prevailed fractions of a second after the Big Bang.
One of the first scientific discoveries is likely to concern a theory called supersymmetry. Tejinder Virdee, of Imperial College, London, who leads the Compact Muon Solenoid (CMS) detector team, said: “What supersymmetry predicts is that, for every particle you have a partner, so it doubles up the spectrum.
You have a whole new zoology of particles, if you like.” Theory suggests that if supersymmetry is real, evidence to confirm it should emerge quickly from the LHC, possibly as soon as next year. “If it pops up it’ll be quite easy to see,” Professor Cox said.
Such a discovery might also help to explain dark matter, which is thought to account for much of the missing mass of the Universe. Only about 4 per cent of matter – galaxies and the like – is visible to our telescopes. “In this new zoology, the lightest super-symmetric particle is a prime candidate for explaining dark matter,” Professor Virdee said.
The search for the Higgs could take longer, though it depends on the particle’s mass and thus the energy of the collisions in which it might be found. If it is at the heavier end of the possible range, the discovery could take as little as 12 months. A lighter Higgs would take longer to find, as the particles into which it would decay would also be lighter and harder to track.
Other potential discoveries include evidence for the existence of extra dimensions beyond the familiar three of space and one of time, and the creation of miniature (and harmless) black holes, though these are less probable. “Most of us think we’d be very lucky to find these things,” Professor Cox said.
There are two more detectors. The LHCb will investigate why there is any matter in the Universe at all, while Alice aims to study a mixture known as quark-gluon plasma, which last existed in the first millionth of a second after the big bang.
From gluons to sparticles
Particle
In physics, this term refers to sub-atomic particles – entities that are smaller than atoms. Some, such as protons and electrons, are the constituents of atoms. Others, such as quarks, are the constituents of other particles. Still others, such as photons and neutrinos, are generated by the Sun. And yet more, such as the Higgs boson, are theoretical: predicted but still undiscovered
Hadron
This is more than an excuse for a geeky physics joke – “Is that your hadron, or are you just pleased to see me?” Hadrons are particles with mass, made up of quarks that have been bound together
Protons, neutrons, quarks and gluons
Protons and neutrons are the best-known types of hadron. Each is composed of three smaller units, called quarks, and gluons that stick the quarks together. Protons have a positive charge, while neutrons have a neutral charge
Higgs boson
A theoretical particle, which is thought to give matter its mass. First proposed by Peter Higgs, of the University of Edinburgh, in 1964, it is sometimes nicknamed the “God particle”. The Large Hadron Collider (LHC) should confirm whether it exists. The theory suggests that other particles travel through and interact with a field of Higgs bosons, which slows the particles down and gives rise to their mass. The process is often likened to moving through treacle. In the early 1990s Lord Waldegrave of North Hill, then the Science Minister, staged a competition for the best explanation. The winning analogy was of Margaret Thatcher – a massive particle – wandering through a Tory cocktail party and gathering hangers-on as she went
Standard model
The orthodox theory of modern physics. It is based on two other theories – general relativity and quantum mechanics – and its main weakness is that it cannot yet fully describe gravity or mass
Quantum mechanics
The main principle of the standard model, which describes how particles and forces behave at atomic and sub-atomic scales
General relativity
Einstein’s theory describing gravity. It is exceptionally well attested, but not fully compatible with quantum mechanics
Supersymmetry
The hypothesis that all particles have an accompanying partner known as a “superparticle” or “sparticle”. There is good theoretical evidence for it, but it has not yet been confirmed by experiment
Dark matter
Only about 4 per cent of the Universe is made up of visible matter. Another 25 per cent is “dark matter” – which can be inferred from its gravity, but cannot be seen. The remaining 71 per cent is still more mysterious “dark energy”. The LHC could shed light on what dark matter is, possibly through discoveries about supersymmetry
Extra dimensions
We are all familiar with four dimensions – three of space and one of time. But some theoretical physicists suggest that there could be as many as 26. Most physicists find these every bit as hard to visualise as normal people, but they make mathematical sense
The Independent Sep 05, 2008
The Big Question: Is our understanding of the Universe about to be transformed?
By Steve Connor, Science Editor
Friday, 5 September 2008
Independent Graphics
Why are we asking this now?
Next Wednesday the biggest machine and international scientific experiment ever built will be switched on. Called the Large Hadron Collider (LHC), it is a giant $10bn "atom smasher" that has been constructed at the European centre for nuclear research (Cern) in Geneva.
It consists of an underground circular tunnel 27 kilometres in circumference, which is about the size of the Circle Line on the London Underground. At various points along the tunnel, four massive instruments have been positioned to act as sub-atomic microscopes for analysing the extremely high-energy collisions that will occur between two opposing beams of protons, the atomic nuclei of hydrogen atoms. The aim of the experiment is to understand the fundamental forces of nature and the sub-atomic particles that compose all matter in the Universe.
Why is it causing such excitement?
Although we have built "atom smashers" before, this one is different in terms of how much energy will be involved. Two beams of protons will be spun in opposite directions within the underground tunnel and will attain speeds just a fraction shy of the speed of light, meaning that they will make about 11,000 laps of the circuit every second.
When they are accelerated in this way to collide head-on with each other, the resulting impact between the two proton beams will generate about seven times the energy of the LHC's nearest rival machine, the Tevatron atom smasher in Batavia, Illinois. The LHC scientists hope to get up to energy levels of 14 teraelectron volts (TeV) and so in the process create conditions that last occurred less than a billionth of a second after the Big Bang, when the Universe was created some 13.7 billion years ago.
What's the point of all this?
In order to understand what things are made of, and the forces that hold them together, it is necessary to break apart the sub-atomic constituents of matter. It is only by breaking apart a proton that scientists are able to see what is going on within this infinitesimally small unit of matter. The answer comes down to even smaller particles, some of which are so small or elusive that they have so far escaped detection. So far we know of 12 subatomic particles and 4 forces, but this is just the start. More importantly, scientists hope to resolve some of the biggest problems in physics. They hope for instance to one day unify all the disparate forces of nature, from the small-scale nuclear forces within an atomic nucleus to the force of gravity, which acts between planets and galaxies. They call this the "theory of everything" and there is hope that the LHC will make important contributions to our wider understanding of the biggest questions concerning creation, time and the nature of matter.
Isn't it risky to mess around with high-energy collisions?
There are some theorists who believe that the collisions may create "mini" black holes. But even if they do result from the experiment, they will be sub-microscopic in size and disappear within a fraction of second of coming into existence.
Few if any sensible scientists believe that these minuscule black holes pose any threat, for instance by merging into a bigger black hole that could swallow up Geneva. Some Russian scientists have also suggested that it may be possible for the LHC to create the conditions that could in theory allow time travel. They have rather fancifully painted a scenario where future time travellers come back to visit us through the LHC, but, as other theorists have pointed out, such time travellers would have to be atom-sized to pass through the tiny "worm holes" through time and space that the LHC may or may not create.
What exactly will happen when the experiment gets under way?
For the first time, scientists will attempt to put a beam of protons into the tunnel and to accelerate it around the entire circuit. Then, possibly later that day, or certainly in the days to follow, a second beam will be put into the tunnel and accelerated around the same tunnel but in the opposite direction. It is just possible, although unlikely, that the two beams might collide, which will cause the instruments to start registering readings. However, it is only when all the finer adjustments have been made that the two beams will reach the highest energy levels that could result in some very interesting discoveries.
What important findings might emerge?
The most interesting things are almost certainly going to be those that are least expected -- or even totally unpredicted. However, there is one sub-atomic particle that theorists have already predicted to exist.
Formally called the Higgs boson, but nicknamed the "God Particle", it could explain why matter has mass and hence lead to a greater understanding of the force of gravity. At the energy levels of the LHC, it is very likely that the first Higgs boson will be registered. Indeed, Prof Peter Higgs of Edinburgh University is 90 per cent confident that the particle named after him will be discovered by the LHC. How quickly the Higgs is found – assuming it exists – depends on how heavy it is, with a lighter Higgs being harder to detect than a heavier one. But this is just one of many possible discoveries that the LHC could make. Physicists hope that the machine will also find the mysterious supersymmetry particles that are thought to have been created at the beginning of the Universe. The theory of supersymmetry says that all known particle have a heavier partner, but none has ever been detected.
If the LHC finds evidence of supersymmetrical particles, it may have also found the reason why 90 per cent of the mass of the Universe exists as invisible "dark matter".
How difficult was it to build the LHC and its machines?
Very. The 27-km tunnel is aligned to better than a tenth of a millimetre and underground rivers had to be temporarily frozen to permit its construction. The giant magnets used to accelerate the proton beams have to be held together with a force that can resist 500 tons per square metre -– equivalent to one jumbo jet per square metre.
They are supercooled to 1.8 degrees above absolute zero (-273C), making the LHC the coldest place in the known universe, with enough freezing capacity to keep 140,000 domestic fridges at a temperature of -271.2C. The civil and mechanical engineering involved was almost as momentous as the science, which could account for why next week's switch on was originally scheduled for three years ago.
Is such a huge experiment worth it?
Yes...
* We need to know how the Universe is put together to understand our place in it
* The cost is trivial compared with that of not expanding on our existing knowledge
* There have been huge spin-offs from similar experiments, notably the internet
No...
* The science is too distant and abstruse for enough worthwhile benefits to humanity
* Particle physics is less important than, say, medicine and biology
* If scientists have misunderstood the physics there's a risk of creating a black hole
The Daily Telegraph Sep 05, 2008
Scientists get death threats
over Large Hadron Collider
By Roger Highfield, Science Editor
Last Updated: 12:01am BST 05/09/2008
Scientists working on the world's biggest machine are being besieged by phone calls and emails from people who fear the world will end next Wednesday, when the gigantic atom smasher starts up.
• Rap about Large Hadron Collider becomes YouTube hit
• The Big Bang: atom-smashing could uncover truth
• Time travellers from the future 'could be here in weeks'
The Large Hadron Collider near Geneva, where particles will begin to circulate around its 17 mile circumference tunnel next week, will recreate energies not seen since the universe was very young, when particles smash together at near the speed of light.
Hadron Collider: The final pieces slot into place
Such is the angst that the American Nobel prize winning physicist Frank Wilczek of the Massachusetts Institute of Technology has even had death threats, said Prof Brian Cox of Manchester University, adding: "Anyone who thinks the LHC will destroy the world is a t---."
The head of public relations, James Gillies, says he gets tearful phone calls, pleading for the £4.5 billion machine to stop.
"They phone me and say: "I am seriously worried. Please tell me that my children are safe," said Gillies. Emails also arrive every day that beg for reassurance that the world will not end, he explained. Others are more aggressive. "There are a number who say: "You are evil and dangerous and you are going to destroy the world." "I find myself getting slightly angry, not because people are getting in touch but the fact they have been driven to do that by what is nonsense. What we are doing is enriching humanity, not putting it at risk."
There have also been legal attempts to halt the start up. The remarkable outpouring of concern about turning on the experiment, the most ambitious in history, comes as a new report concludes that it poses no threat to mankind.
Since 1994, when the collider was first mooted by the multi-national European nuclear research organisation (CERN), dogged doomsayers have claimed that there would be a small but real risk that an unstoppable cataclysm would take place. Many of the emails received by Gillies cite a gloomy book - Our Final Century?: Will the Human Race Survive the Twenty-first Century? - written by Lord Rees, astronomer royal and president of the Royal Society.
"My book has been misquoted in one or two places," Lord Rees said yesterday. "I would refer you to the up-to-date safety study." The new report published today provides the most comprehensive evidence available to confirm that nature's own cosmic rays regularly produce more powerful particle collisions than those planned within the LHC. The LHC Safety Assessment Group has reviewed and updated a study first completed in 2003, which dispels fears of universe-gobbling black holes and of other possibly dangerous new forms of matter, and confirms that the switch-on will be safe.
The report, 'Review of the Safety of LHC Collisions', published in the Journal of Physics G: Nuclear and Particle Physics, proves that if particle collisions at the LHC had the power to destroy the Earth, we would never have been given the chance to worry about the LHC, because regular interactions with more energetic cosmic rays would already have destroyed the Earth.
The Safety Assessment Group writes, "Nature has already conducted the equivalent of about a hundred thousand LHC experimental programmes on Earth - and the planet still exists." The Group compares the rates of cosmic rays that bombard Earth to show that hypothetical black holes or strangelets, that have raised fears in some, will pose no threat.
As the Group writes, "Each collision of a pair of protons in the LHC will release an amount of energy comparable to that of two colliding mosquitoes, so any black hole produced would be much smaller than those known to astrophysicists." They also say that such microscopic black holes could not grow dangerously. As for the equally hypothetical strangelets, the review uses recent experimental measurements at the Brookhaven National Laboratory's Relativistic Heavy-Ion Collider, New York, to prove that they will not be produced in the LHC.
The collider is designed to seek out new particles including the long-awaited Higgs boson responsible for making things weigh what they do, the possible source of gravity called dark matter, as well as probe the differences between matter and antimatter.
Friday, September 5, 2008
The World Is Not Enough for Humans
Humanity's environmental impact has reached an unprecedented scope, and it's getting worse
By David Biello
Since 1987 annual emissions of carbon dioxide—the leading greenhouse gas warming the globe—have risen by a third, global fishing yields have declined by 10.6 million metric tons and the amount of land required to sustain humanity has swelled to more than 54 acres (22 hectares) per person. Yet, Earth can provide only roughly 39 acres (15 hectares) for every person living today, according to the United Nation's Environmental Program's (UNEP) Global Environment Outlook, released this week. "There are no major issues," the report's authors write of the period since their first report in 1987, "for which the foreseeable trends are favorable."
Despite some successes—such as the Montreal Protocol's 95 percent reduction in chemicals that damage the atmosphere's ozone layer and a rise in protected reserves of habitat to cover 12 percent of the planet—humanity's impact continues to grow. For example:
Biodiversity—The planet is in the grips of the sixth great extinction in its 4.5-billion-year history, this one largely man-made. Species are becoming extinct 100 times faster than the average rate in the fossil record. More than 30 percent of amphibians, 12 percent of birds and 23 percent of our own class, mammals, are threatened.
Climate—Average temperatures have climbed 1.4 degrees Fahrenheit (0.76 degree Celsius) over the past century and could increase as much as 8.1 degrees F (4.5 degrees C) over the next unless "drastic" steps are taken to reduce greenhouse gas emissions from, primarily, burning fossil fuels. Developed countries will need to reduce this globe-warming pollution by 60 to 80 percent by mid-century to stave off dire consequences, the report warns. "Fundamental changes in social and economic structures, including lifestyle changes, are crucial if rapid progress is to be achieved."
Food—The amount of food grown per acre has reached one metric ton, but such increasing intensity is also driving rapid desertification of formerly arable land as well as reliance on chemical pesticides and fertilizers. In fact, four billion out of the world's 6.5 billion people could not get enough food to eat without such fertilization. Continuing population growth paired with a shift toward eating more meat leads the UNEP to predict that food demand may more than triple.
Water—One in 10 of the world's major rivers, including the Colorado and the Rio Grande in the U.S., fail to reach the sea for at least part of the year, due to demand for water. And that demand is rising; by 2025, the report predicts, demand for fresh water will rise by 50 percent in the developing world and 18 percent in industrialized countries. At the same time, human activity is polluting existing fresh waters with everything from fertilizer runoff to pharmaceuticals and climate change is shrinking the glaciers that provide drinking water for nearly one third of humanity. "The escalating burden of water demand," the report says, "will become intolerable in water-scarce countries."
The authors—388 scientists reviewed by roughly 1,000 of their peers—view the report as "an urgent call for action" and decry the "woefully inadequate" global response to problems such as climate change. "The amount of resources needed to sustain [humanity] exceeds what is available," the report declares.
"The systematic destruction of the earth's natural and nature-based resources has reached a point where the economic viability of economies is being challenged," Achim Steiner, UNEP's executive director, said in a statement. "The bill we hand our children may prove impossible to pay."
Sitting Too Close to the Computer Screen Can Make You Go Blind
Eyestrain is a common—and occasionally debilitating—effect of staring at screens
By Molly Webster
You roll your head, hoping to loosen the knots in your neck, and shut your eyes. After rubbing them you settle back into staring, hunched inches away from the computer screen. Despite the brief reprise your vision remains cloudy, causing the words on the monitor to blur. At this point, you need to know: With each further click on the keyboard, video watched on YouTube, and e-mail sent—are you damaging your vision?
Ophthalmologists, optometrists and other eye professionals note a seeming link between myopia, also called nearsightedness, and "near work"—visual activities that take place at a distance of about 40 centimeters (16 inches) from the eye—such as reading a book. Staring at a computer screen qualifies as well, though monitors usually are around 50 centimeters (20 inches) away.
But only a small—and mysterious—subset of people see myopic progression from near work, whether they are focusing on a computer or accounting books. "We are not very clever in identifying who [is affected] yet," says James Sheedy, a professor at the Pacific University College of Optometry in Oregon.
The fact that near work doesn't lead to myopia in all of us, however, doesn't mean sitting close to a computer screen causes no problems. Though for most it is not permanently damaging, computer near work leads to an uncomfortable, at times debilitating, list of symptoms collectively known as eyestrain.
Eyestrain, says Mark Bullimore, a professor at The Ohio State University College of Optometry, results from staring at a screen over long periods of time. Such activity causes eye exhaustion: burning, dryness and muscle aches—all unpleasant and potentially incapacitating symptoms while they last.
The simplest way to understand why eyestrain develops—and learn how to prevent it—is by looking at the way our built-in binoculars show us the fine print. When we "see" something, light reflects from an object through the cornea, the transparent, dome-shaped layer covering the eye. The cornea and the crystalline lens (a transparent, round, flexible structure behind the iris) then bend the wavelengths so they hit the rods and cones—photoreceptors on the retina that gather incoming light information. This innermost layer at the back of the eye is responsible for collecting and then moving light information, via the optic nerve, to the brain, which produces an image.
Staring closely at a screen forces our ciliary muscle, which controls the shape of our lens and therefore how well we focus, to remain contracted, without rest. This is demanding—and tiring—for the poor little muscle. Up close focusing also stops us from blinking.
Blinking is essential because it spreads tears over the surface of the eye; if blinking stops, the corneal surface dries out. When this happens, the cornea becomes cloudy, causing "foggy" vision, according to Sheedy. The normal blink rate is around 20 times per minute but using a computer can drop it to as low as seven, though experts believe this has no long-term effect.
Staring at a screen—surrounded by glaring peripheral lights—also causes us to squint, says Dennis Robertson, an ophthalmology professor at the Mayo Medical School in Rochester, Minn.
And though squinting cuts down on glare and prevents exorbitant amounts of light from assaulting your eyeballs (which solves some of the problems created by not blinking), it's exhausting. Freezing the muscles around your eye into a tense, squinched position all day long is just as tiring as it would be to hold a stomach-crunch for nine hours.
These eyestrain symptoms usually only last a few hours, dissipating as we allow ourselves time to blink and focus on things farther away. But once they start, they hamper productivity and, more importantly, make us grumpy. All is not lost, however. We can fix these burning, aching, dried out sensations one ergonomic workstation at a time.
Invest in one of today's nonglare computer screens, and don't be afraid to change your computer's brightness, contrast or text size, all of which will alleviate eye stress. Also, position your screen slightly lower than your eyes; the top of your monitor should be level with your eyebrows. For physiological problems, hit your doctor up for a pair of corrective lenses.
Finally, eliminate any glaring peripheral light. To find out what lights are bothersome, Sheedy recommends performing the hand-as-visor trick: Shield your eyes with your hand, and see if that makes the tension in your face and shoulders dissipate. If it does, manually adjust the lamps you blocked out as bothersome. As for watching TV, experts recommend laughing along with your favorite sitcom from a comfortable distance. (Finally, a reason to be a couch potato.)
But by far the simplest and best expert advice for eliminating eyestrain from any type of medium: take regular breaks. Go on, walk over to the water cooler, even if you aren't thirsty; and by all means, move your easy chair at least two feet from the television. Above all: don't forget to blink.
By Molly Webster
You roll your head, hoping to loosen the knots in your neck, and shut your eyes. After rubbing them you settle back into staring, hunched inches away from the computer screen. Despite the brief reprise your vision remains cloudy, causing the words on the monitor to blur. At this point, you need to know: With each further click on the keyboard, video watched on YouTube, and e-mail sent—are you damaging your vision?
Ophthalmologists, optometrists and other eye professionals note a seeming link between myopia, also called nearsightedness, and "near work"—visual activities that take place at a distance of about 40 centimeters (16 inches) from the eye—such as reading a book. Staring at a computer screen qualifies as well, though monitors usually are around 50 centimeters (20 inches) away.
But only a small—and mysterious—subset of people see myopic progression from near work, whether they are focusing on a computer or accounting books. "We are not very clever in identifying who [is affected] yet," says James Sheedy, a professor at the Pacific University College of Optometry in Oregon.
The fact that near work doesn't lead to myopia in all of us, however, doesn't mean sitting close to a computer screen causes no problems. Though for most it is not permanently damaging, computer near work leads to an uncomfortable, at times debilitating, list of symptoms collectively known as eyestrain.
Eyestrain, says Mark Bullimore, a professor at The Ohio State University College of Optometry, results from staring at a screen over long periods of time. Such activity causes eye exhaustion: burning, dryness and muscle aches—all unpleasant and potentially incapacitating symptoms while they last.
The simplest way to understand why eyestrain develops—and learn how to prevent it—is by looking at the way our built-in binoculars show us the fine print. When we "see" something, light reflects from an object through the cornea, the transparent, dome-shaped layer covering the eye. The cornea and the crystalline lens (a transparent, round, flexible structure behind the iris) then bend the wavelengths so they hit the rods and cones—photoreceptors on the retina that gather incoming light information. This innermost layer at the back of the eye is responsible for collecting and then moving light information, via the optic nerve, to the brain, which produces an image.
Staring closely at a screen forces our ciliary muscle, which controls the shape of our lens and therefore how well we focus, to remain contracted, without rest. This is demanding—and tiring—for the poor little muscle. Up close focusing also stops us from blinking.
Blinking is essential because it spreads tears over the surface of the eye; if blinking stops, the corneal surface dries out. When this happens, the cornea becomes cloudy, causing "foggy" vision, according to Sheedy. The normal blink rate is around 20 times per minute but using a computer can drop it to as low as seven, though experts believe this has no long-term effect.
Staring at a screen—surrounded by glaring peripheral lights—also causes us to squint, says Dennis Robertson, an ophthalmology professor at the Mayo Medical School in Rochester, Minn.
And though squinting cuts down on glare and prevents exorbitant amounts of light from assaulting your eyeballs (which solves some of the problems created by not blinking), it's exhausting. Freezing the muscles around your eye into a tense, squinched position all day long is just as tiring as it would be to hold a stomach-crunch for nine hours.
These eyestrain symptoms usually only last a few hours, dissipating as we allow ourselves time to blink and focus on things farther away. But once they start, they hamper productivity and, more importantly, make us grumpy. All is not lost, however. We can fix these burning, aching, dried out sensations one ergonomic workstation at a time.
Invest in one of today's nonglare computer screens, and don't be afraid to change your computer's brightness, contrast or text size, all of which will alleviate eye stress. Also, position your screen slightly lower than your eyes; the top of your monitor should be level with your eyebrows. For physiological problems, hit your doctor up for a pair of corrective lenses.
Finally, eliminate any glaring peripheral light. To find out what lights are bothersome, Sheedy recommends performing the hand-as-visor trick: Shield your eyes with your hand, and see if that makes the tension in your face and shoulders dissipate. If it does, manually adjust the lamps you blocked out as bothersome. As for watching TV, experts recommend laughing along with your favorite sitcom from a comfortable distance. (Finally, a reason to be a couch potato.)
But by far the simplest and best expert advice for eliminating eyestrain from any type of medium: take regular breaks. Go on, walk over to the water cooler, even if you aren't thirsty; and by all means, move your easy chair at least two feet from the television. Above all: don't forget to blink.
Subscribe to:
Posts (Atom)