AP . February 26, 2007

Former U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year’s end.
He said the U.S. economy has been expanding since 2001 and that there are signs the current economic cycle is coming to an end.

“When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign,” Greenspan said via satellite link to a business conference in Hong Kong. “For example in the U.S., profit margins … have begun to stabilize, which is an early sign we are in the later stages of a cycle.”

“While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 … with some slowdown,” he said.

Greenspan said that while it would be “very precarious” to try to forecast that far into the future, he could not rule out the possibility of a recession late this year.

The U.S. economy grew at a surprisingly strong 3.5 percent rate in the fourth quarter of 2006, up from a 2 percent rate in the third quarter. A survey released Monday by the National Association for Business Economics showed that experts predict economic growth of 2.7 percent this year, the slowest rate since a 1.6 percent rise in 2002.

Greenspan also warned that the U.S. budget deficit, which for 2006 fell to $247.7 billion, the lowest in four years, remains a concern.

“The American budget deficit is clearly a very significant concern for all of us that are trying to evaluate both the American economy’s immediate future and that of the rest of the world,” he said via satellite at the VeryGC Global Business Insights 2007 Conference.

Greenspan also said he has seen no economic spillover effects from the slowdown in the U.S. housing market.

“We are now well into the contraction period and so far we have not had any major, significant spillover effects on the American economy from the contraction in housing,” he said.

MIKE WHITNEY

CounterPunch . February 26, 2007

Gold traders love Dick Cheney. Every time he opens his twisted lip and barks out another threat to Iran, the dollar takes a powder and gold futures shoot to the moon. Maybe that’s the way Cheney likes it. After all, he dumped about $25 million in euro-bonds before he took office. Judging by the way he and brother-Bush have flogged dollar, he must have doubled his investment by now.

The old greenback has dropped nearly 35% in the last 6 years while gold has just about tripled. In 2000 the dollar was a trim, sinewy pillar of strength. It entered the ring like a young Mohammed Ali; darting to and fro while pummeling his prey with quick laser-like blows that were barely visible. Now, the greenback plods along like a 60 year old Rocky Balboa, wheezing heavily and reeling with every punch; waiting for the one roundhouse that will leave him staring up from the canvas, spitting up broken teeth and blood.

The dollar’s in a heap o’ trouble and “Doomsday” Dick is doing his level-best to make sure that it hits the skids before he leaves office. Just yesterday the snappish Vice President said, “It would be a serious mistake if a nation like Iran were to become a nuclear power. Then he added ominously, “All options are still on the table.”

That comment put the dollar on its backside and sent Tokyo gold futures to a 21 year high.

Good work, Dick.

At present, the rest of the world is wondering if dollar’s going to pull through without a nervous breakdown. Central banks in Europe, Japan, and China have increased their money supply and kept rates low in order to prop up the droopy greenback. But that won’t last. Eventually, they’ll all have to raise rates to slow inflation and stop equity bubbles from getting out of control. (The Chinese stock market rose by a whopping 140% in one year. They probably don’t like the prospect of a Dot.com-type meltdown like we had in the US.) Regrettably, once interest rates start to rise, the dollar will quickly slip from view leaving nothing but a trail of vapor behind.

It’s astonishing how cavalier Cheney and the gaggle of racketeers at the Federal Reserve have been regarding the dollar. After all, why kill the goose that lays the golden egg?

As the world’s “reserve currency” the fed can simply print out a couple trillion whenever it comes up short and bring back boatloads of sleek, Chinese manufactured goods or tankers weighed down with petroleum to power our boxcar-sized SUVs. Or, maybe, Bernanke would rather crank-out another $12 billion in crisp $100 bills, shrink-wrapped and loaded onto pallets and sent off to Iraq where they can vanish in the black hole of corporate malfeasance.

That’s not a problem as long as the world keeps accepting our “overdrawn” checks.

But what happens when the rest of the world sees that the “stewards of the global economic system” (that’s us) are nothing but a bunch of Texas yahoos, religious zealots, and war-mongering boneheads?

See, the funny thing about money is that it requires confidence in the provider that he will honor his part of the deal and operate in good faith. Otherwise, no one would dream of exchanging valuable resources and manufactured goods for silly, green tokens of credit-based fiat money with squiggly writing and funny looking men in powdered wigs on it.

We all expect money to have value, and yet, the Bush team continues to sabotage the currency with their unfunded tax cuts, their $9 per month war in Iraq, and their 35% expansion of the federal government. (Remember when Clinton said the “era of big government is over”?) The result of this craziness was thoroughly predictable; central banks are running for the exits.

Last Friday, the government reported that net capital inflows reversed from the requisite $70 billion to AN OUTFLOW OF $11 BILLION!

The current account deficit (which includes the trade deficit) is running at roughly $800 billion per year, which means that the US must attract about $70 billion per month of foreign investment (US Treasuries or securities) to compensate for America’s extravagant spending. When foreign investment stumbles, as it did in December, it puts downward pressure on the dollar.

So what does it all mean?

It means they don’t want our stinking greenbacks. And, if they don’t resume purchasing our debt (US Treasuries or securities) the dollar will join Rocky Balboa on the canvas peering out blankly at the klieg lights.

Just last week, the Royal Bank of Scotland conducted a survey which showed that Central Banks in Italy, Switzerland and Sweden have made “major adjustments” in their stockpiles of dollars. The cutbacks raise the fear that a stampede away from the dollar could begin at any time, triggering a global currency crisis of biblical proportions.

“The full faith and credit” of the US Dollar does not mean what it did 6 years ago. That’s a fact.

The Bush-Cheney-Federal Reserve axis believe they can keep this ponzi-scheme going by cornering the oil market (attacking Iran) and forcing the petroleum-thirsty world to accept our feeble banknotes. But that’s just nuts. The Chinese are already killing us by buying up oil and natural gas leasing rights around the world WITH OUR OWN DOLLARS!

We’re getting beat with our own stick.

It wasn’t supposed to work that way. We thought we were being clever by destroying the American labor movement and shipping our industry to China. We figured we could trounce the middle class at home while putting the “fear o’ god” in the Chinese with our “shock and awe” military that was supposed to be out of Iraq in 3 years at the most.

How’s that working out?

Now the housing-bubble albatross is dragging down millions of home owners while the maxed out American consumer is down to his last credit card. In other words, the $11 trillion of new debt that was cleverly engineered through Greenspan’s low interest rate bonanza is about to detonate and bring the whole, wretched tower of American debt crashing to earth.

The whole mess could have been avoided with responsible leadership. If Bush’s wasteful tax cuts had gone to the middle class they would have stimulated positive growth in the economy and reduced the widening wealth gap. If Greenspan had raised interest rates in 2001 it would have slowed down new home construction and circumvented the housing bubble. If Bush had negotiated with Saddam, he could have secured oil-leasing rights (which Saddam offered in the weeks before March 2003) without dragging the country to war.

Instead, the economy is facing disaster; the dollar is shaky, gold is soaring, personal savings rates are shrinking, margin debt is skyrocketing, foreign investment is drying up, home sales are plummeting, and Dick “Last throes” Cheney wants to expand the war to Iran.

All we’re missing is a “plague of frogs.”

Cheney is still convinced he can pull off his whacko scheme to control Middle East oil and, thus, force the world to take worthless sheets of green scrip that’re backed up by $8.7 trillion of debt and wouldn’t even make good bird-cage liner.

It’s madness.

Mike Whitney lives in Washington state. He can be reached
at: fergiewhitney@msn.com

Paul Craig Roberts

Counterpunch . February 13, 2007

What would be the consequences of a US or Israeli attack on Iran’s nuclear energy sites?

At the 2006 Perdana Global Peace Forum, Australian medical scientist Dr. Helen Caldicott provided an authoritative analysis of the devastating impact on human life that would result from the radiation release from such an attack.

Dr. Caldicott described the catastrophic deaths that would result from a conventional attack on nuclear facilities and the long-term increase in cancer deaths from the radiation release.
Should the attack be made with nuclear weapons–as some of Bush’s criminally insane neoconservative advisers advocate–the populations of many countries would suffer for generations from radioactive particles in air, water, and food chains. Deaths would number in the many millions.

Such an attack justified in the name of “American security” and “American hegemony” would constitute the rawest form of evil the world has ever seen, far surpassing in evil the atrocities of the Nazi and Communist regimes.

Dr. Caldicott detailed the horrible long-term consequences for the Iraqi population from the US military’s current use of depleted uranium in explosive ammunition used in Iraq. Caldicott explained that “depleted” does not mean depleted of radiation. She explained that each time such ammunition is used, radioactive particles are released in the air and are absorbed into people’s lungs. We are yet to see the horrific civilian casualty rate of the American invasion–or the true casualty rate among US troops.

Dr. Caldicott expressed bewilderment why the rest of the world does not stand up to the US and force a halt to its crimes against humanity.

One man heard her–Vladimir Putin, President of Russia.

On February 10 at the 43rd Munich Security Conference, President Putin told the world’s assembled political leaders that the US was trying to establish a “uni-polar world,” which he defined as “one single center of power, one single center of force and one single master.”

This goal, Putin said, was a “formula for disaster.”

“The United States,” Putin said, truthfully, “has overstepped its borders in all spheres” and “has imposed itself on other states.”

The Russian leader declared: “We see no kind of restraint–a hyper-inflated use of force.”

To avoid catastrophe, Putin said a reconsideration of the entire existing architecture of global security was necessary.

Putin’s words of truth fell on many deaf ears. US Senator John McCain, America’s most idiotic and dangerous “leader” after Bush and Cheney, equated Putin’s legitimate criticism of the US with “confrontation.”

America’s new puppets–the states of central and Eastern Europe and the secretary general of NATO, no longer a treaty for the defense of Europe but a military force enlisted in America’s quest for empire–lined up with McCain’s argument that Russia was in fundamental conflict “with the core values of Euro-Atlantic democracies.”

Even the BBC’s defense and security correspondent, Rob Watson, jumped on the American propaganda bandwagon, tagging Putin’s speech a revival of the cold war.

No delegate at the security conference stood up to state the obvious fact that it is not Russia that is invading countries under pretexts as false as Hitler’s and setting up weapons systems on foreign soil in order to achieve military hegemony.

The reception given to Putin’s words made it clear to Russia, China, and every country not bribed, threatened or purchased into participation in America’s drive for world hegemony that the US has no interest whatsoever in peace. Intelligent people realize that American claims to be a moral and democratic force are mere pretense behind which hides a policy of military aggression.

The US, Putin said, has gone “from one conflict to another without achieving a fully-fledged solution to any of them.”

Putin has repeatedly stressed Russia’s peaceful intentions and desire to focus on its economy and to avoid a new arms race. In his speech on the 60th anniversary of the victory over Nazi Germany, Putin said: “I am convinced that there is no alternative to our friendship and our fraternity. With our closest neighbors and all countries of the world, Russia is prepared to build a kind of relationship which is not only based on lessons of the past but is also directed into a shared future.”

In his 2006 state of the nation speech, Putin noted that America’s military budget is 25 times larger than Russia’s. He compared the Bush Regime to a wolf who eats whom he wants without listening. Putin is being demonized by US propagandists, because he insists upon Russia being a politically and economically independent state.

The Bush Regime has taken the US outside the boundaries of international law and is acting unilaterally, falsely declaring American military aggression to be “defensive” and in the interests of peace. Much of the world realizes the hypocrisy and danger in the Bush Regime’s justification of the unbridled use of US military power, but no countries except other nuclear powers can challenge American aggression, and then only at the risk of all life on earth.

The solution is nonmilitary challenge.

The Bush Regime’s ability to wage war is dependent upon foreign financing. The Regime’s wars are financed with red ink, which means the hundreds of billions of dollars must be borrowed. As American consumers are spending more than they earn on consumption, the money cannot be borrowed from Americans.

The US is totally dependent upon foreigners to finance its budget and trade deficits. By financing these deficits, foreign governments are complicit in the Bush Regime’s military aggressions and war crimes. The Bush Regime’s two largest lenders are China and Japan. It is ironic that Japan, the only nation to experience nuclear attack by the US, is banker to the Bush Regime as it prepares a possible nuclear attack on Iran.

If the rest of the world would simply stop purchasing US Treasuries, and instead dump their surplus dollars into the foreign exchange market, the Bush Regime would be overwhelmed with economic crisis and unable to wage war. The arrogant hubris associated with the “sole superpower” myth would burst like the bubble it is.

The collapse of the dollar would also end the US government’s ability to subvert other countries by purchasing their leaders to do America’s will.

The demise of the US dollar is only a question of time. It would save the world from war and devastation if the dollar is brought to its demise before the Bush Regime launches its planned attack on Iran.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.He can be reached at: PaulCraigRoberts@yahoo.com

New Jersey Emergency Medical Technician asked “how could someone have rigged all these explosives?” before towers collapsed, support columns had been blown out

Paul Joseph Watson

Prison Planet / February 8, 2007

A New Jersey EMT has gone public on how emergency workers were told that Building 7 was going to be “pulled,” before a 20 second demolition countdown broadcast over radio preceded its collapse. The ground zero rescue worker also blows the whistle on how he witnessed multiple underground support columns of the WTC towers that had been severed before the buildings imploded.

In a letter to Loose Change producer Dylan Avery, the individual who wishes to remain anonymous refering to himself only as Mike, 30, NJ, describes how he has repeatedly tried to alert numerous authorities to what he saw on 9/11 but was ignored or told to “shut up” on every occasion, and ultimately fired for disorderly conduct.

The EMT now dismisses the official government explanation of events and slams the 9/11 commission as a “whitewash.”

Having been in his profession for six years, the individual states that he was at ground zero before, during and after the collapse. He was forced to flee from the falling towers and take cover under a bus shelter as debris rained down all around him, leaving his lungs poisoned today with the toxic dust that 9/11 heroes were exposed to as a result of a cover-up on behalf of Condoleezza Rice and the EPA that assured workers ground zero air was safe to breathe.

The EMT made the decision to make his claims public after becoming aggrieved at how 9/11 debunkers were viciously attacking the creators of Loose Change for questioning the events of 9/11 in their film, which has now aired on numerous international television stations and has been seen by millions on the Internet.

In his enthralling testimony, the EMT goes into graphic detail of how he and others personally witnessed a plethora of explosions at all points of the buildings before their collapse.

“There were explosions. There were flashes. There was molten metal running down the I-beams of the basement levels like lava flows. I’ve never seen anything like it. Yes, planes hit the buildings - anybody who says otherwise is a moron. But the explosions - the rapid, symmetrical, sequential explosions - they happened,” states ‘Mike’.

He explains how he and others were in the basement of one of the towers helping injured victims when he saw “One of the huge steel and concrete support pillars with an 8 foot section blown out of the center of it.” Looking around, Mike saw other support columns that were in the same condition, prompting rescue personal to ask “how could someone have rigged all these explosives?”

“We stood outside listening to the explosions,” states Mike, “One after the other, every minute or so. At one point, about 10 minutes before the first collapse, a 30 foot or so section of the courtyard exploded straight up into the air. Just before the collapses, a series of deep, below ground explosions, then numerous explosions in the buildings upper floors. Then we ran. We felt the same deep explosions before the second collapse. This was not just the planes.”

The rescue worker concludes emphatically, “The buildings were rigged, there is no question about it.”

Perhaps of even more interest, the EMT relates the fact that hundreds of emergency rescue personnel were told over bullhorns that Building 7, a 47 story skyscraper adjacent the twin towers that was not hit by a plane yet imploded symmetrically later in the afternoon on 9/11, was about to be “pulled” and that a 20 second radio countdown preceded its collapse.

Following news reports in the days after the attack that Building 7 had collapsed due to fire damage, Mike fully expected this mistake to be corrected after the chaos had subsided, but was astonished when it became part of the official story.

Questions about Building 7 came to the fore in January 2004 when footage of WTC complex owner Larry Silverstein telling a September 2002 PBS documentary that after consultation with the FDNY the decision was made to “pull” the building surfaced on the Internet.

These issues were subsequently explored in Alex Jones’ Martial Law and Terror Storm documentary films.

Since then, debunkers and Silverstein’s office itself have tried to argue that Silverstein simply meant to “pull” or evacuate the firefighters out of the building, yet in the same documentary explosives experts are seen demolishing the remnants of other buildings in the ground zero area and repeatedly use the industry term “pull” to describe a controlled demolition.

In addition, there were no firefighters in WTC 7 to “pull” in the first place.

Dr. Shyam Sunder, of the National Institutes of Standards and Technology (NIST), which investigated the collapse of WTC 7, is quoted in Popular Mechanics (9/11: Debunking the Myths, March, 2005) as saying: “There was no firefighting in WTC 7.”

The FEMA report on the collapses, from May, 2002, also says about the WTC 7 collapse: “no manual firefighting operations were taken by FDNY.”

And an article by James Glanz in the New York Times on November 29, 2001 says about WTC 7: “By 11:30 a.m., the fire commander in charge of that area, Assistant Chief Frank Fellini, ordered firefighters away from it for safety reasons.”

Photo and video evidence of the collapse of Building 7 shows classic indications of a controlled demolition. The standard ‘crimp’ in the center-left top of the building and the subsequent ’squibs’ of smoke as it collapses clearly represent explosive demolition.

Even Dan Rather, commenting on the collapse for CBS News said that the collapse was, “reminiscent of those pictures we’ve all seen too much on television before, where a building was deliberately destroyed by well placed dynamite to knock it down.”

The EMT worker agrees, stating, “There were bright flashes up and down the sides of Building 7, you could see them through the windows…and it collapsed. We all knew it was intentionally pulled… they told us!”

In February of 2002 Silverstein Properties won $861 million from Industrial Risk Insurers to rebuild on the site of WTC 7. Silverstein Properties’ estimated investment in WTC 7 was $386 million. This building’s collapse alone resulted in a profit of about $500 million.

Due to the many unanswered questions surrounding Building 7, The National Institute of Standards and Technology (NIST) was forced to include in its probe into Building 7 the theory of, “Whether hypothetical blast events could have played a role in initiating the collapse.”

Following the attacks, Mike made a sustained effort to inform the relevant authorities of what he saw, including the FDNY, the NYPD, newspapers and television networks. In every case he was told to “shut up”, “forget about it”, or “let it go, for my own good.”

Initially praised as heroes, when Mike and his colleague tried to to alert their EMT Coordinator In Charge of what they had witnessed, they were brought up on charges of disorderly conduct, fired, and fined for damaged uniforms and equipment they had used on 9/11. Two other colleagues who witnessed the same events now refuse to even acknowledge they were at ground zero for fear of reprisals.

The astounding testimony of this brave EMT only adds further credence to the already overwhelming case for controlled demolition of both the twin towers and Building 7. We implore this individual to go public with his full name in the interests of his own safety. It is far more secure to blow the whistle out in the light than to remain in the shadows and become another victim of those who wish to see 9/11 truth buried.

Mike Whitney / February 7, 2007 

The massive equity bubbles which arose from artificially low interest rates and the deliberate destruction of the dollar by reckless increases in the money supply have shifted trillions of dollars from working class Americans to the predatory aristocrats at the top of the economic food chain. The gulf between rich and poor has grown so wide that it now poses a direct threat to our increasingly fragile democracy.

“Whatever future developments may prove to be, my best guess is that the US will continue to maintain a façade of Constitutional government and drift along until financial bankruptcy overtakes it.” Chalmers Johnson, “Empire V. Democracy: Why Nemesis is at our Door”

02/06/07 “ICHBlog” — - Every time a US Dollar is traded, a check is issued on an account that is overdrawn by $8.6 trillion. (That is the present size of the national debt) It is, without question, the biggest swindle in history. Flimsy sheets of faded-green scrip are eagerly exchanged for costly goods and services without any regard for the real value of the currency.

And, the real value of the currency is absolutely nothing!

How is it that this scam persists when people appear to be aware of the massive debt and deficits which underwrite the dollar? Do they still believe in that puerile fairy tale about “the full faith and credit” of the United States backing up every greenback? Or are they pacified by the wizened graybeards, like Alan Greenspan and Hank Paulson, who soothingly bray about the “strong dollar policy”?

What gibberish.

In truth, the dollar rests on the crumbling foundation of consumerism and oil. The American consumer’s gluttonous appetite for spending has kept the greenback flying high for decades. Economists marvel at America’s lust for electronic gadgetry, the latest fashions, and useless knick-knacks. They call our profligate spending “the engine for global growth”; and indeed it is. No other country in the world is nearly as addicted to binge-spending as the US consumer. As long as he can beg, borrow or steal his way into the shopping mall; the orgy of spending is bound to continue. (Consumer spending is 70% of GDP)

Regrettably, there are signs that the US consumer is beginning to buckle from the weight of personal debt. The Associated Press reported just this week that “people are saving at the slowest rate since the Great Depression… and the Commerce Dept stated that the nation’s personal savings rate for 2006 was a negative 1%, the worst showing in 73 years.”

Additionally, credit card debt has skyrocketed, which is an indication that homeowners are no longer able to siphon easy-money from their home-equity. The nose-diving real estate market has slowed refinancing to a dribble; cutting off the additional $825 billion of cash which was extracted from home-equity just last year.

Clearly, the well is running dry; the housing bubble is hang-gliding into the abyss and there’s nothing Fed-master Bernanke can do to save it from its inevitable crash-landing.

The central banks around the world are now watching for any sign that the American consumer is about to give up the ghost. As soon as that happens, bank managers everywhere will swing into action, ditch their U.S.Dollars and head for the exits. When the “global engine” sputters to a halt; it’ll be curtains for the greenback.

The Oil-extortion Racket

The dollar’s link to oil has helped to keep it afloat but, in truth, it’s just another dismal rip-off. More than 70% of the world’s oil is denominated in USD; a virtual monopoly for the USA. Until last year, even Russia was using dollars in its oil transactions with Germany. Imagine a comparable deal, like the US purchasing oil from Canada in rubles?!?

It’s lunacy; and yet this is the system the US hopes to preserve so it can maintain its unique status as the world’s “reserve currency” and keep expanding its debt into perpetuity. It explains why the Federal Reserve has been able to increase the money supply by a whopping 15% for the last 6 years! Trillions of dollars are now circulating in the oil trade keeping the value of the dollar high by creating artificial demand.

The other reason the dollar hasn’t succumbed to hyperinflation is because the current account deficit is running at roughly $800 billion per year. The Asian giants (China and Japan) and the oil exporting countries are mopping up more than $700 billion of our red ink every year!

The dollar’s link to oil forces central banks to maintain humongous stockpiles of USD to pay the steadily rising price of oil that keeps their industries and vehicles running. Otherwise they would have chucked the flaccid greenback years ago and converted to the more steadfast euro.

The so-called ‘global economic system’ has nothing to do with competition, free markets or private enterprise; that’s just public relations gobbledygook. In practice, it is the world’s biggest extortion racket, wherein, the “Godfather”– Uncle Sam– holds a gun to the heads of his subjects and forces them to use our fiat-paper to purchase the oil that lubricates their economies.

Why would anyone accept a personal check from a nation that owes the bank more than $8.6 trillion dollars?

Why, indeed?

It’s blackmail, pure and simple; and yet, the Chinese, Japanese etc. continue to play along knowing full-well that we neither have the inclination nor the resources to pay them back in kind?

It’s madness.

Every so often, a rebel nation will try to break the shackle of greenback-tyranny and operate outside the US-run system?

For example, Saddam Hussein switched to euros 6 months before he was carpet-bombed in Shock and Awe. His defiance only hastened his ultimate downfall.

Now Iran and Venezuela are threatening to convert to euros. Is it any surprise that they are both on Bush’s axis-of-evil hit list?

Russia has already made the conversion to euros and rubles (and has considerably depleted his supplies of USD) but, of course, regime change is more difficult when a state has nuclear weapons. Instead, the mainstream media is conducting an impressive “Swift Boat” campaign against Putin, smearing him as a “Russian autocrat” who is “rolling back democracy”. At the same time, the Bush administration is threatening to deploy missile systems in Eastern Europe and ratcheting up the pressure in the former Soviet republics.

Bush would rather restart the Cold War than abandon the supremacy of the greenback.

But, why? Is Dollar-primacy really that crucial to our economy?

The greenback is the baling wire that keeps the global economy in the hands of the doddering old misers at the Federal Reserve. It’s the cornerstone of the whole wretched system; a system which now includes torture, extraordinary rendition, and myriad other war crimes.

The young Muslim men who are abducted off the streets of Europe and Asia and taken to CIA Black Sites where they are waterboarded or stacked in naked pyramids; are tortured in defense of the crumpled piece of green paper we carry in our pants pockets.

Think I’m kidding?

Just look at Bush’s budget for 2007-2008; $700 billion for foreign wars?!? There’s no way the US can pay off that debt through the normal means of increasing exports. In fact, Bush has already said that he plans to preserve his unfunded tax cuts whether they produce massive deficits or not.

What Bush plans to do is force the foreign central banks to hold more dollar-based assets, thus, thrusting our gigantic debt onto our trading partners. According to Bob Chapman of The International Forecaster, “US debt was up 10.1% to $4.085 trillion and accounts for 58.8% OF ALL THE CREDIT ISSUED GLOBALLY LAST YEAR. The US is producing more debt than the rest of the world combined.

As long as foreign lenders are willing to take our paper, Bush will keep expanding our debt. As Chalmers Johnson opined, “We are dependent on ‘the kindness of strangers’”. (The Blanche Dubois economy)

Of course, if the central banks grow tired of this pyramid-scheme and dump the dollar; the world can get on with the business of addressing global warming, poverty, AIDs, Peak Oil, nuclear proliferation etc. That won’t happen as long as the dollar reigns supreme and a small cadre of unelected racketeers at the Fed continue Gerry-rig the system.

Economic justice and equitable distribution of wealth begin with greater parity among the currencies. That requires “regime change” for the greenback and a loosening of its tyrannical grip on the system.

Sleepwalking in the Weimar U.S.A.

The good news is that the Bush administration is pushing the dollar towards extinction anyway. Another few years of $800 billion trade deficits, lavish unfunded tax cuts for the mega-rich, and a Pentagon budget of $700 billion-plus; and the old greenback will be going the way of the Dodo. Jim Willie of GoldenJackass.com summarized it this way:

“Never in the history of central bankers has the hidden coordination, influenced pressure, gargantuan money creation, doctored statistics, and interference with financial markets been so broad, so deep, and so profound. My allegation is clear, that we now live in Weimar times, as has been warned for two years worth of scribbles. Collectively, they have abused the privilege of printing money, and in doing so, have guaranteed a gold bull market. … The more heavily the counterfeit press dispenses electronic dollars, devoted to operations, to credit, to consumer spending, to military adventures, to good old fashioned fraud, the gold bull benefits from ample new oxygen and blood flow”.

Willie is right; the system is rotten to the core. Once the dollar crashes, other currencies rush in to fill the void generating greater competition between the energy and manufacturing giants. A new paradigm will emerge distributing power more equitably among the states. It’s a way to resuscitate a system that is currently held together through force of arms.

Besides, how long will China and Japan continue to abet Washington’s war-mongering adventurism? My guess is that the daggers have already been sharpened in Beijing, Caracas, Delhi and Moscow. Everyone is just waiting for Bush to cross that invisible line in the sand before they fling their greenbacks into the jet-stream and wait for Goliath to tumble.

That “invisible line in the sand” is Iran.

The world is at a crossroads and everyone who can fog a mirror knows it. The superpower model of global governance has failed miserably. We need more responsible stewardship of the planet and its resources.

How can we build our economies when a handful of western plutocrats control the spigot for quickly dwindling oil reserves? How can we attack climate change when those same blinkered reprobates employ pseudo-scientists to dispute global warming? How can we address nuclear proliferation when neocon militarists believe in “useable” low-yield, bunker-busting warheads?

The model is hopelessly shattered. We’d be better off boarding-up the White House and the Federal Reserve and starting from Square One.

The world needs a break from Washington’s wasteful spending and unprovoked wars. At the same time, foreign creditors are increasingly reluctant to keep financing America’s extravagant consumption. And, no one is hoodwinked by Bush’s “war on terror” scam; a conflict that was clearly concocted to assert control over the world’s remaining resources.

The world is realigning according to mutual interests and a shared vision of the future. The rise of energy alliances in Latin America and Asia (particularly the Shanghai Cooperation Organization (SCO) which now controls most new oil deposits and output) signals the waning of western influence and the ascendancy of a new energy paradigm. Power is progressively shifting away from Washington.

That’s bad news for the greenback which depends on its linkage to oil to sustain its enormous debt.

The dollar now faces challenges from all directions. Western elites have savaged the country’s economic base by hollowing out our manufacturing base in order to destroy the American labor movement.

Free trade has transformed the US into the biggest creditor nation in history. The country exports nothing but bombs and misery.

Also, as Congressman Ron Paul notes, “Most knowledgeable people assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not been fully discounted, guarantees the further depreciation of the dollar.”

Eventually, the markets will catch on, foreign lenders will stop buying our Treasuries, and the dollar will fall through the floor.

The laws of gravity apply to economics as well as science.

Red flags are going up everywhere. China’s central bank issued a warning in December about the risks of the weakening dollar:

“If external capital stops flowing into the US, a significant drop in the dollar may occur with consumption and investment shrinking, interest rates rising, and financial markets experiencing turbulence, endangering global financial and economic stability. There could be adjustments to how European private capital, Asian foreign exchange reserves and oil export proceeds are invested.”

Yes, of course, a complete economic meltdown with capital fleeing the United States to foreign countries and the American economy collapsing in a heap.

The Chinese central bank statement adds:

“If the US current account deficit continues to grow faster than GDP, then the investment value of US assets may be subject to doubts and challenges and the willingness of investors to continue holding and buying US financial products may weaken. This could cause changes in capital flows, the exchange rates of major currencies, and the value of foreign exchange assets.”

The Chinese bank is giving the Bush Team a chapter out of Econ. 101: “If you keep spending more than you are taking in; the stock market will fall, the dollar will plummet, and the US economy will tank”.

What could be clearer than that?

The administration, however, chooses to ignore the basic laws of economics and pursue a madcap plan to wage aggressive war across the planet and pilfer the world’s oil reserves.

So far, the results have been less than reassuring.

The Decline of U.S. Sovereignty; blame it on the Fed

The United States set off on the road to perdition when it transferred the power to create money to the privately-owned Federal Reserve. It’s been downhill ever since.

The man who can set interest rates and create money is more powerful than the man who can move armies and change laws. By conferring that authority on the Federal Reserve we have assured that the policies that govern our economy are decided by unelected members of the ruling elite whose choices will naturally reflect the interests of their class.

The wealth gap that has opened up like a yawning chasm between rich and poor in America originated with the class-based policies of the Fed. The massive equity bubbles which arose from artificially low interest rates and the deliberate destruction of the dollar by reckless increases in the money supply have shifted trillions of dollars from working class Americans to the predatory aristocrats at the top of the economic food chain. The gulf between rich and poor has grown so wide that it now poses a direct threat to our increasingly fragile democracy. That’s why Thomas Jefferson said:

“If the American people ever allow private banks to control the issue of our currency, first by inflation, then by deflation, the banks and the corporations that will grow up will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing of power should be taken from the banks and restored to the people, to whom it properly belongs.”

Free people cannot control their own destiny unless they control their own currency. The Federal Reserve must be abolished.

Link to this page: http://www.ichblog.eu/content/view/405/2/

Ron Paul

Lew Rockwell / January 30, 2007

The Pentagon recently reported that it now spends roughly $8.4 billion per month waging the war in Iraq, while the additional cost of our engagement in Afghanistan brings the monthly total to a staggering $10 billion. Since 2001, Congress has spent more than $500 billion on specific appropriations for Iraq. This sum is not reflected in official budget and deficit figures. Congress has funded the war by passing a series of so-called “supplemental” spending bills, which are passed outside of the normal appropriations process and thus deemed off-budget.

This is fundamentally dishonest: if we’re going to have a war, let’s face the costs – both human and economic – squarely. Congress has no business hiding the costs of war through accounting tricks.

As the war in Iraq surges forward, and the administration ponders military action against Iran, it’s important to ask ourselves an overlooked question: Can we really afford it? If every American taxpayer had to submit an extra five or ten thousand dollars to the IRS this April to pay for the war, I’m quite certain it would end very quickly. The problem is that government finances war by borrowing and printing money, rather than presenting a bill directly in the form of higher taxes. When the costs are obscured, the question of whether any war is worth it becomes distorted.

Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve System is a creation of Congress.

The result of this arrangement is inflation. And inflation finances war.

Economist Lawrence Parks has explained how the creation of the Federal Reserve Bank in 1913 made possible our involvement in World War I. Without the ability to create new money, the federal government never could have afforded the enormous mobilization of men and material. Prior to that, American wars were financed through taxes and borrowing, both of which have limits. But government printing presses, at least in theory, have no limits. That’s why the money supply has nearly tripled just since 1990.

For perspective, consider our ongoing military commitment in Korea. In Korea alone, U.S. taxpayers have spent $1 trillion in today’s dollars over 55 years. What do we have to show for it? North Korea is a belligerent adversary armed with nuclear weapons, while South Korea is at best ambivalent about our role as their protector. The stalemate stretches on with no end in sight, as the grandchildren and great-grandchildren of the men who fought in Korea give little thought to what was gained or lost. The Korean conflict should serve as a cautionary tale against the open-ended military occupation of any region.

The $500 billion we’ve officially spent in Iraq is an enormous sum, but the real total is much higher, hidden within the Defense Department and foreign aid budgets. As we build permanent military bases and a $1 billion embassy in Iraq, we need to keep asking whether it’s really worth it. Congress should at least fund the war in an honest way so the American people can judge for themselves.

John Fraher and Adrian Cox

Bloomberg / January 27, 2007

Jan. 27 (Bloomberg) — Malaysian Prime Minister Abdullah Ahmad Badawi said his country has shifted some of its $82 billion of currency reserves away from the dollar and that potential foreign-exchange volatility may hurt exporters.

“We’re concerned for the reason that the high percentage of our international trade is in U.S. dollars,'’ said Abdullah today in an interview in Davos, Switzerland at the annual meeting of the World Economic Forum. When asked whether Malaysia will cut its dollar holdings, he said: “We have already done. We’ll continue to watch the situation.'’

Abdullah’s comments reflect concern that lopsided trade flows between the U.S. and the rest of the world will weaken the dollar. The U.S. currency has dropped 6 percent against the euro in the past year. Kuwaiti Finance Minister Bader al-Humaidhi said on Jan. 24 that the third-largest Arab oil producer may abandon the dinar’s peg against the dollar in favor of a basket.

Malaysia’s central bank abandoned a peg to the dollar in July 2005 and manages it against an undisclosed basket of currencies. The ringgit has advanced 0.7 percent against the dollar this year, climbing to a nine-year high this month and trailing only the Icelandic krona as the world’s best performing currency.

“Overdependence on one currency can create a problem, the dollar or any other currency,'’ said Abdullah. He declined to comment further on the country’s foreign exchange policy or his favored currencies.

Central bank Governor Zeti Akhtar Aziz in November declined to comment on whether Malaysia was diversifying its reserves.

Abdullah also called on U.S. and European ministers meeting in Davos today to unblock stalled World Trade Organizations talks on dismantling trade barriers.

“The U.S. and the Europeans have a very important role to play,'’ he said. “A lot of things are stuck here because of these giants. If we can’t have it globally then people do it bilaterally or multilaterally.'’

Social Security and Medicare benefits strain federal budget

Marilyn Geewax

Cox News / January 19, 2007

Washington — The United States faces a “vicious cycle” of rising federal deficits and interest rates unless Congress quickly figures out how to pay for promised Social Security and Medicare benefits, Federal Reserve Chairman Ben Bernanke warned Thursday.

“Unfortunately, economic growth alone is unlikely to solve the nation’s impending fiscal problems,” Bernanke told the Senate Budget Committee in his first Capitol Hill appearance since Democrats took control of Congress this month.

Although the federal deficit fell to $248 billion in fiscal 2006 from $319 billion the previous year, that improvement should not be taken as a sign of long-term fiscal fitness, Bernanke said.

“We are experiencing what seems likely to be the calm before the storm,” when roughly 78 million Baby Boomers begin being eligible for Social Security next year, he said.

Once the generation born from 1946 through 1964 stops earning taxable paychecks and starts drawing government-guaranteed retirement benefits, the budget outlook will darken dramatically, he said.

Combined spending on Social Security and Medicare will shoot from 7 percent of U.S. economic output today to almost 13 percent by 2030, he said.

Without “meaningful action” to reduce benefits or increase funding for entitlement programs, “The U.S. economy could be seriously weakened, with future generations bearing much of the cost,” he said.

His message was not new; last week, U.S. Comptroller General David Walker warned the committee about coming fiscal imbalances.

But Bernanke’s tone was urgent. While Walker had said that “the time for action is now,” Bernanke declared: “The right time to start was about 10 years ago.”

A major reform of entitlements in 1983 raised Social Security and Medicare payroll taxes, replenishing both programs’ trust funds. But Congress has borrowed the money in the funds to finance other programs, replacing it with IOUs.

When the trust funds are exhausted — projected to occur in 2018 for Medicare and 2040 for Social Security — the government will have to cut benefits or pay them out of general revenues.

“The longer we wait, the more severe, the more draconian, the more difficult” the reform process will be, Bernanke said.

Committee Chairman Sen. Kent Conrad, D-N.D., agreed, saying lawmakers must “take these challenges on, and the sooner we do so, the better.”

Recent attempts to deal with the politically potent issue have come to nothing, however.

President Bush has promoted a reform plan that incorporated private investment accounts. But his idea proved unpopular with many lawmakers, and the effort stalled.

Bernanke did not recommend any specific reforms, but recounted experts’ suggestions, such as raising the retirement age, boosting payroll taxes or increasing the amount of income subject to payroll taxes.

Economists generally regard Medicare as an even bigger problem because health care costs are rising rapidly.

Bernanke did urge Congress to help keep entitlement programs solvent by encouraging Boomers to delay retirement.

Lawmakers should “make the labor market as accommodating as possible to older people who wish to continue working,” he said.

David Oakley and Gillian Tett in London

Financial Times / January 14, 2007

The euro has displaced the US dollar as the world’s pre-eminent currency in international bond markets, having outstripped the dollar-denominated market for the second year in a row.

The data consolidate news last month that the value of euro notes in circulation had overtaken the dollar for the first time. Outstanding debt issued in the euro was worth the equivalent of $4,836bn at the end of 2006 compared with $3,892bn for the dollar, according to International Capital Market Association data.

Outstanding euro-denominated debt accounts for 45 per cent of the global market, compared with 37 per cent for the dollar. New issuance last year accounted for 49 per cent of the global total.

That represents a startling turnabout from the pattern seen in recent decades, when the US bond market dwarfed its European rival: as recently as 2002, outstanding euro-denominated issuance represented just 27 per cent of the global pie, compared with 51 per cent for the dollar.

The rising role of the euro comes amid growing issuance by debt-laden European governments. However, the main factor is a rise in euro-denominated issuance by companies and financial institutions.

One factor driving this is that European companies are moving away from their traditional reliance on bank loans – and embracing the capital markets to a greater degree.

Another is that the creation of the single currency in 1999 has permitted development of a deeper and more liquid market, consolidated by a growing eurozone.

This has made it more attractive for issuers around the world to raise funds in the euro market. And, more recently, the trend among some Asian and Middle Eastern countries to diversify their assets away from the dollar has further boosted this trend.

René Karsenti, executive president of ICMA, said: “It is the stable interest rates in Europe that have helped and the fact that [the euro] has strengthened and shown resilience.”

Since the start of 2003, the European Central Bank’s main interest rate has fluctuated only 1.5 percentage points, ranging from a low of 2 per cent in the middle of that year to 3.5 per cent, its rate today.

In comparison, the Fed funds rate, the main US interest rate, has fluctuated 4.25 percentage points, ranging from 1 per cent in the middle of 2003 to 5.25 per cent, its level today. The euro has also risen to trade around $1.30 against the dollar, from around parity three years ago. Sterling issuance has grown in the past three years, reinforcing its attraction as a niche currency among some investors. The yen, in comparison, has fallen out of favour.

Overall, international capital markets have doubled in size in terms of bond issuance during the past six years.