Monday, April 13, 2015

US-Iran nuclear fuel agreement & Asian infrastructure investment bank

US-Iran nuclear fuel agreement & Asian infrastructure investment bank


These are two very important developments in undermining the military and economic unilateralism exercised by USA and its allies since World War II. The agreement on restrictions on enrichment of uranium by Iran is totally against NPT, to which Tehran is signatory. It is now allowed to do so with constraints .It is just another example of general lawlessness followed by USA and its Western allies. Hopefully there would be no slip between the cup and lip, by end June, whatever Israeli Prime Minister Mr Netanyahu might proclaim and opposition by Republican fanatics in USA.


The agreement on in Asia infrastructure investment bank organised at the behest of China, to which even Western powers and allies of USA have joined is another major move to do away with unequal financial and economic arrangement enforced around the world since World War II by Washington and its allies.


Dr William Engdahl, who has written these two articles, is a very well known and reputed commentator and analyst of international affairs, especially in the energy and financial field. These articles are concise, lucid and hard-hitting and bring out the truth of US exceptionalism and riding roughshod over international treaties, laws and obligations. Since the fall of the Berlin Wall, Washington has been a raging Bull, bringing about havoc and destruction recently in North Africa, countries of Sahel, West, South and Southwest Asia, not to forget Ukraine, a country which is being devastated almost as badly as Iraq, Libya and Syria.


It must be said to some credit of US Pres Barack Obama that in spite of fanatic  right-wing resistance and noise ,he is trying to bring some sanity into US foreign and strategic relations keeping in view its declining manufacturing and exporting capability except for arms. Apart from promoting the nuclear enrichment deal with Iran, Obama has after 50 years made up with US neighbour in south, Cuba, which has stood as a sentinel against US exceptionalism, and pure and simple US sponsored terrorism and gangsterism either directly or through its allies and cronies .


In recent decades Latin America, considered a US backyard has shown great spine in resisting US exceptionalism led by Fidel Castro and others.


K Gajendra Singh, April 13, 2015, DelhiIran and a Possible New Energy Geopolitics


F. William Engdahl (NEO) : The recent tentative agreement between Iran and the USA regarding Iran's nuclear program open the prospect of a lifting of almost 36 years of American economic sanctions against Iran. It is being greeted by threats of unilateral military strikes by Israel against Iran to "pre-empt" Iran developing a nuclear bomb.


An alliance improbable as it may seem between the ultra-conservative Saudi monarchy and the government of Israel is emerging against Iran and the US deal. The real question is what the deeper motive of the Obama Administration is regarding Iran. Here energy geopolitics plays the lead role, as so often in the energy-rich Middle East. And Russia is the target.


I recently had a dialogue with Shervin, an Iranian energy expert I met two years ago in Tehran regarding these developments. I want to share some of the highlights of that discussion here. He is an energy specialist with Iran's leading international news agency, Tasnim News Agency. The talk provides a useful insight into the thinking of Iranian intellectuals regarding US sanctions, Iran's possible role in the world and in energy geopolitics.


Tasnim: What is your opinion about Iran's sanctions?

WE: The US sanctions on Iran are illegal under the precepts of international law and an act of war, just as are the sanctions on Syria and now on Russia.


Tasnim: Has the Iran negotiations reached a final agreement that will see the West's economic sanctions against Iran cancelled?

WE: We must be specific. The sanctions come from Washington and the US Treasury financial warfare unit, especially the latest round of sanctions against using the SWIFT interbank clearing system to sell Iranian oil, an unprecedented step by Washington that is now being threatened against Russia. The EU would love to reopen trade with Iran. So long as Washington is controlled by the banks of Wall Street and the military-industrial complex you can expect some excuse, even with a nuclear agreement, to continue the sanctions in some form. Look at Cuba.


Tasnim: How do the current low oil prices affect the economy in America?

WE: The US Secretary of State John Kerry met the Saudi King in Saudi Arabia last September and proposed the collapse of oil prices to put extreme pressure on Iran and primarily on Putin's Russia whom they are determined to destroy as the only military great power that could threaten the Pentagon's total military hegemony. If Russia capitulates, which I am convinced it will not, the current world will collapse, Iran will be isolated and destroyed, China as well and the entire alternative multi-polar new structures opposed to the increasingly naked totalitarianism of the Anglo-American hegemonists will suffer a devastating setback.

Ironically, the Saudi oil shock since last year is having a devastating impact on the huge new shale oil industry in North Dakota, Texas, California and such. I estimate if it goes another three to six months, we will begin to see a snowball series of oil company bankruptcies and default on more than $1 trillion in oil company loans or "junk" bonds. So far the shale oil companies have been flooding the market with their oil to get cash to avoid bank loan default in hopes the crisis will soon end. The Big Oil boys like ExxonMobil, Chevron, BP, Shell can ride the storm as they are well capitalized and global. In terms of the larger US economy, virtually the only bright spot in terms of jobs growth has been hundreds of thousands of new jobs in the domestic shale industry. Those are now vanishing rapidly. The Obama Administration once again failed to see the larger consequences of their actions. They have shot themselves in both feet in the oil war against Putin.


Tasnim: How do the economic sanctions against Iran also impact the US economy?

WE: The US Treasury sanctions on Iran have virtually no impact on the US economy, which makes them so diabolical.


Tasnim: Are economic sanctions against Iran more beneficial to America or Iran?

WE: Actually, and I saw this when I was in Tehran two years ago, it benefits Iran far more. This is because it forces you to be more self-reliant and not let your economy, your industries, your agriculture be destroyed by cheap Western imports like so many countries in Asia, Africa, South America have done. It forces Iran to develop the wonderful capacities internally, to control her own credit, not become a vassal of a dollar system that is going bankrupt. Iranians are very educated and very intelligent people, very resourceful. I think you will do quite well without importing iPhone6 or Monsanto GMO toxic soybeans.


Tasnim: Did Washington get the Saudis to drive down the price in order to hurt Russia and perhaps Iran?

WE: Yes, of course. It was a repeat of what George Schultz and Vice President Bush Sr. did back in 1986 to get the Saudis at that time to flood the market and drive prices below $10 a barrel, in order to bankrupt the Soviet Union during their Afghan war against the US-backed Mujahideen of Osama bin Laden.

But the policy people at the State Department and CIA in Washington were rather stupid this time. They did not calculate that the Saudis had their own agenda with cheap oil, namely to destroy the growing competition from the US shale oil. Now it's too late for Obama and Washington to easily reverse oil prices. The intellectual quality of the people today in Washington's bureaucracy, even compared to those some three decades ago, is so poor, in terms of understanding history, culture, economics, strategy. Note that some of the nastiest persons in the US foreign policy establishment like Brzezinski and Kissinger are urging Obama to not provoke a war with Russia. They at least have some grasp of history. Neo-conservatives like Victoria Nuland at State Department or Defense Secretary Ashton Carter or Hillary Clinton who has her cold eye on the White House, lack the depth in addition to being bad people. Therefore they are so dangerous to their nation as well as the world.


Tasnim: Did the Saudis see in Washington's request the opportunity to drive the US fracking industry out of business, thus preserving its US market?

WE: It's not about the Saudi US market. Saudi exports mainly to Asia today and rather little, about 800,000 barrels a day, to the US of a daily US oil consumption of around 19 million barrels a day, around 4%. It's the global market the Saudis are concerned with dominating via leverage of Arab OPEC—Saudi, Kuwait, Emirates.

Without Iran for the Saudis of course, but that Sunni-Shi'ite conflict, especially since Washington deliberately started the Arab Spring Color Revolutions in late 2010, was intended to create total dis-order between once-cooperating OPEC members in the Middle East in order to establish direct US military control over the entire region. The OPEC countries and their Sovereign Wealth Funds, using their huge oil revenues, were beginning to establish networks of Islamic banking independent from Western usury and debt slavery—Tunisia, Libya, Egypt…Had that continued, the dollar would become a worthless banana republic currency in a few years, much like the threat Washington sees today from the BRICS and the Asian Infrastructure Investment Bank.

It is useful to keep in mind, there are two pillars of Washington hegemony: Control of money via Wall Street and the Dollar as world reserve currency; and control of the military power. The money control began collapsing with the foolish deregulation of the banks under Alan Greenspan's time at the Federal Reserve and the resulting orgy of speculation called the Asset Backed Securitization that led to the inevitable 2007-2008 financial crisis. After that, the military "solution" has become more dominant as the financial pillar was too weak to continue the push for global domination or as Bush and David Rockefeller have called it, their New World Order.

It might help to know that today these American Oligarchs, as I call them, are becoming terrified as never since at least one hundred years that they can lose everything. They are desperate. Washington today is riddled with confused people fighting each other and the world. It is a bit like the last years of the Roman Empire of the Fourth Century AD. It reminds of the ancient Greek saying, "Whom the gods would destroy they first make mad." Today Washington is home of the Lost Hegemon and some very mad people as in Israel under that gangster, Binjamin Netanyahu.


Tasnim: Is the reduction of price oil for Iran a threat or an opportunity?

WE: An opportunity, a wonderful one, to take a lead in a new just international trading system, one pricing oil not in dollars. As long as the world trades its oil in dollars, you support the Dollar Empire and destroy yourselves. Here China, Russia and others are playing a crucial role pricing in local currencies, thus de-dollarizing their economies. Today the only thing propping up the debt-bloated US Dollar System are oil sales in dollars, narcotics traffic worldwide in dollars and the US military worldwide as the global cops. That's a pretty fragile system in my view.


Tasnim: What suggestions do you have for economic authorities?

WE: Iran is a wonderful land with beautiful, warm-hearted people and enormous intelligence and economic resources. Were I Iranian head of state I would direct my government to create planning processes across Iran in every region if it does not already exist, to engage local citizens in dialogue with the regional economic officials to define priority economic goals of each region for the next 5 year period (anything longer becomes too rigid). Much like Charles deGaulle, who was certainly no communist, did with his and Jacques Rueff's "Planification."

Then the central government ministers meet and review the wants and needs of the people across Iran and draft realizable priorities. I would ban all Western vaccines, all. A healthy diet and loving family and community are the only way to a healthy immune system. I would ban GMO and the chemical weed killers like Monsanto Roundup from ever coming in, even indirectly via soybeans from USA or Argentina or GMO corn. China is just now realizing its error in allowing 60% of her soybeans to be imported and all are GMO. I would develop Iran's wonderful food culture naturally, with natural chemical-free methods, subsidize that with a positive tax policy and punish industrial US-style agribusiness with punitive taxes.


Today the oligarchs of the West have a simple agenda: genocide against all darker-skinned non-Anglo Saxon blood lines. I have met many of them over the years at conferences in Davos, Frankfurt, many places. They are bloody racists, eugenicists, people like Gates with his vaccines that kill small babies or make young girls unable to have children.


Bill Gates, George Soros, David Rockefeller, Warren Buffett, the DuPonts, the Russell family of Yale University, and others whose names are not so known. They are all fundamentally stupid and ridiculous people who are incapable of seeing the consequences of every life they take to the entirety of the human species. For them to kill the "useless eaters" like ourselves, they make wars, spread disease, make more and more of our children sick and crippled via their poison vaccines, destroy healthy non-chemical traditional medicine like exists still in parts of China or Iran or Russia in favor of the drugs and toxins of Western Drug companies who, by the way, control WHO. They create terrorist organizations to spread their wars of destruction such as Al Qaeda in Libya, Iraq, Yemen, and across the Arab world, Fethullah Gülen's Cemaat in Turkey and beyond, ISIS which was a creation of US and Israeli intelligence to destroy Bashar al-Assad and the Syrian ties to Iran and Iraq.


Washington now wants to seduce Iran into turning her back on previous ally, Russia and undercutting Russian gas exports to Turkey and the EU. In my view Iran's future lies not in becoming a new ally of the present Washington neo conservatives to get a few economic cookies from the West if they abandon their natural alliance with Eurasia, especially with Russia, China and the countries of the Shanghai Cooperation Organization.

Iran's proven natural gas reserves are estimated by BP to be some 34 trillion cubic meters, while Russia's are at 33 trillion cubic meters. Cooperation now between those two natural gas superpowers is essential in order to build the architecture of Eurasia in a way beneficial to all, including to Germany and the rest of the EU. This is a golden opportunity to change the locus of global energy geopolitics away from the Washington-London-Riyadh axis powers who have controlled it since the initial agreement between US President Roosevelt and Saudi King Ibn Saud in 1943 giving American Rockefeller oil majors exclusive control of the vast oil riches of Saudi Arabia.


F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine "New Eastern Outlook".


 AIIB, BRICS Development Bank and an Emerging World

 Author: F. William Engdahl 10Ap2015
First appeared:


Germany is a founding member as France. So is Luxemburg, even Great Britain. Putin's Russia and India are also among the founders. To the surprise of many, so is the International Monetary Fund (IMF), an institution that until now has been a pillar of the dollar system. We are talking about China's Asian Infrastructure Investment Bank or AIIB. The question is whether the AIIB is on its way to become the seed crystal of a new monetary order that could replace the destructive influence of the dollar? Or will it be infected by Trojans like the UK and the IMF? The answer could well shape the architecture of a new world in which the dollar and its bloated debt structures no longer dictate to the entire world what their economic policies shall be.


In October 2014, China announced it was creating a new international bank to finance major infrastructure projects across Asia. The prime driver for China was to finance their New Silk Road high-speed Eurasian rail and also sea infrastructure projects and the refusal of the United States to agree to major IMF voting reform that would give China and other emerging economic nations more say. Beijing announced they will give $50 billion to start the new bank. At the time, Washington and most of the rest of the world ignored the bank, while the Obama Administration attacked the AIIB for possibly lacking transparency or sufficient concern for environmental risks, patent diversions from the reality, namely, that the AIIB represents a strategic threat to continued American global dollar hegemony.


Washington's well-aimed shot in the foot

The Obama Administration, by fiercely opposing it when the UK, Australia, Japan and other core US allies indicated interest in joining the AIIB, now have royally shot themselves in both feet. Today, as of the March 31 deadline, more than 40 nations have joined with China's new banks as Founding Members. The bank now threatens to rival the IMF, World Bank and the related Asian Development Bank as a long-term creditor able to attract capital to major infrastructure investment across Eurasia and perhaps beyond. Those three public banks are all derived from the US' postwar Bretton Woods Treaty and all three are controlled tightly by Washington to the advantage of the dollar and of US interests.


Now it's not as if China is sneaking behind the back of their dear friends in Washington. In 2010 China, Brazil and other fast-developing countries won an agreement on reform of the IMF that would have doubled the funds available to the IMF in return for a greater voting weight for countries such as China, Russia, India and Brazil and other economies which were not even on the map in 1944 in terms of relative economic size. The proposal won 77% of the share votes of all IMF member countries.


The 2010 IMF voting rights reform stipulated that China will become the 3rd largest member country in the IMF, and there will be four emerging economies—Brazil, China, India, and Russia—among the 10 largest shareholders in the Fund. Under present rules, Washington, conveniently holds 16.75%, a veto minority. Close US geopolitical allies—Japan with 6.23%, UK and France each with 4.29% and Germany with 5.81% would typically insure that IMF policies in any area were "friendly" to American defined national interests.

China, Russia, India, Brazil and other fast-emerging economies find it is manifestly absurd that today IMF voting rights on the Executive Board give France, with a $3 trillion GDP, far more votes than China with a 2014 GDP of more than three times that, at $10 trillion, or gives Belgium (1.86%) with a $500 billion GDP a larger voting share than Brazil (1.72%) with a GDP more than four times as large at $2.2 trillion. According to the IMF bylaws, a member country's voting shares ought to be roughly proportional to its relative size among the 147 IMF member countries in terms of GDP. When Washington drew up the IMF bylaws in 1944 it stipulated, conveniently, that no major decision of the IMF could come into force unless it had 85% of all member voting shares supporting it.


Washington is holding on like a pit bull to the old bylaws in which the US retains a blocking veto share of votes. The US Congress refuses to pass the IMF reforms and to break the impasse. This is a major way forced China and the other fast-growing BRICS states to look outside the IMF and World Bank and build an entirely new architecture. The AIIB today is emerging rapidly as a centerpiece in this emerging new global architecture.


Rather than trying to influence the new AIIB from within, Washington has chosen a tactic that has delivered it a huge and humiliating geopolitical defeat, and which will likely exclude US corporations from lucrative construction bids.

US foreign policy under Obama, as it was under George W. Bush, is being run by a gaggle of neo-conservative ideologues who seem incapable of flexible response. For them anything China does is "bad" and must be opposed with all US might.


China for those Washington people is the emerging global challenger to US military power, so Obama imposes an "Asia Pivot" military strategy to encircle and anger Beijing. China's economic and financial influence threatens the dollar system so that too must be opposed. The BRICS threatens to become independent of Washington control as vassal states, so BRICS states must be "taught a lesson" as Washington recently attempted with its usual Color Revolution organized opposition protests against pro-BRICS president Dilma Rousseff in hopes of installing a US-friendly free market alternative.


The problem for Washington is that none of this is working as it used to. And Washington sees the desertion of her closest "allies" to join China's AIIB. One is reminded of the statement by England's Prime Minister Lord Palmerston, "England has no friends, merely her interests."


The new architecture emerging

Not only are Russia, Brazil, India, in the AIIB founders list—four of the five BRICS—as well Australia, New Zealand, Indonesia, Pakistan, Philippines, Vietnam—countries the Obama Administration is relying on to join the military Asia Pivot against China, have all decided to join with China in her new bank. Even Taiwan has applied to join under the name Chinese Taipei.

And in a further devastating for the image of Washington and perhaps for the future of its domination of the IMF and World Bank, was the fact that five of the Group of Seven large western industrial countries—Italy, France, Germany, UK and even Japan looks likely to join. In all more than forty nations have applied to become founding members.


"Money talks and nobody walks," as the crazy radio jingle during the 1960's aired by Rock 'n Roll DJ Charlie Greer on the popular WABC Top 40 New York radio station, on behalf of Dennison's Clothing Store put it. China has the money, and nobody, except the USA, is walking away from that it seems.


The rush to get in on the China-backed Asian Infrastructure Investment Bank by all these countries including the largest EU members is the realization that Asia and Eurasia is where the economic future of the planet will be made or broken. The USA and Canadian economies are choking in unpayable debts, rotting infrastructure and rustbelt industrial ghost towns like Detroit or Pittsburgh. America is no longer the magnet that all others are drawn to for trade. The country is bust, its government economic figures a bodyguard of lies, its true unemployment at Great Depression levels of 23.2% according to John Williams' Shadow Government Statistics.


China is in a pivotal position to found such a new bank to finance transnational large infrastructure such as the New Silk Road trans-Eurasian high-speed railway that Russia is in the process of connecting with. There will emerge large demand for construction of infrastructure in terms of electric power facilities, highways across Eurasia and Asia. Economic infrastructure is on the drawing boards ultimately linking South Korea to the vast Chinese economy via North Korea.

The infrastructure gap across Asia and Eurasia is enough to spur global industrial growth for decades. The Asian Development Bank (ADB) estimates Asia will need $8 trillion over the next decade for energy, transportation, telecommunication and water/sanitation. Now private investment in infrastructure runs a mere $13 billion a year, most in low-risk projects. Official development assistance adds another $11 billion a year. That means a shortfall exceeding $700 billion a year.

By refusing to join and trying to stop the AIIB Washington in effect stands opposed to Asian regional investments that will expand trade, support financial market development and macroeconomic stability, and improve environmental, health and social conditions. Instead all Washington has to offer is the silly Trans-Pacific Partnership for US-friendly free trade deals that would allow Monsanto and other US corporations to override Asian national laws in pursuit of profit.


The very fact that the AIIB has gathered such worldwide support is demonstration of the impotence of the US-dominated Bretton Woods institutions of the World Bank, IMF and Asian Development Bank.


And a new BRICS Bank

The Asian Infrastructure Investment Bank is but one new initiative by the world's emerging economies.


At the 2014 BRICS summit in Fortaleza, Brazil, they five heads of state declared bluntly, "We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund reforms, which negatively impacts on the IMF's legitimacy, credibility and effectiveness." Collectively, BRICS account for nearly $16 trillion in GDP and 40% of the world's population, nothing to be lightly disregarded as a group of banana republics as some policymakers in Washington evidently still see them. They haven't had their eyes checked since 1944 apparently.


The New Development Bank as it is formally called, or informally the BRICS Development Bank will be headquartered in Shanghai, China's fast-emerging world financial hub. It will open for business with a $100 billion dollar liquidity reserve to defend against possible currency wars as Washington and Wall Street launched in 1997 to destroy the then-booming Asian Tiger economies led by South Korea, Malaysia and Indonesia. The New Bank will also have an initial $50 billion in capital, each BRICS country contributing $10 billion, with the agreed option to rise to $100 billion for financing BRICS infrastructure projects.

The NDB charter specified its membership will be open to all United Nations member states. However, and this is crucial, the five founding BRICS capital share must never fall below 55 percent, and a non-founding member may never increase above 7 percent. In short The BRICS bank will be managed by governments who share deep dissatisfaction with the Washington-controlled Bretton-Woods institutions.


The combination of the two new infrastructure banks poses the greatest threat to the US dollar system and its control of world financial flows since 1944.iv It is this threat that is driving the rudderless foreign policy agenda of Washington. Peace and cooperation is a far more useful way to resolve affairs among civilized nations.


F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine "New Eastern Outlook"
First appeared:


Thursday, April 9, 2015

Re: How America Became an Oligarchy

How America Became an Oligarchy

By Ellen Brown

"The politicians are put there to give you the idea that you have freedom of choice. You don't. . . . You have owners."                                                                                                —George CarlinThe American Dream

April 07, 2015 "ICH" - According to a new study from Princeton University, American democracy no longer exists. Using data from over 1,800 policy initiatives from 1981 to 2002, researchers Martin Gilens and Benjamin Page concluded that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of – or even against – the will of the majority of voters. America's political system has transformed from a democracy into an oligarchy, where power is wielded by wealthy elites.

"Making the world safe for democracy" was President Woodrow Wilson's rationale for World War I, and it has been used to justify American military intervention ever since. Can we justify sending troops into other countries to spread a political system we cannot maintain at home?

The Magna Carta, considered the first Bill of Rights in the Western world, established the rights of nobles as against the king. But the doctrine that "all men are created equal" – that all people have "certain inalienable rights," including "life, liberty and the pursuit of happiness" – is an American original. And those rights, supposedly insured by the Bill of Rights, have the right to vote at their core. We have the right to vote but the voters' collective will no longer prevails.

In Greece, the left-wing populist Syriza Party came out of nowhere to take the presidential election by storm; and in Spain, the populist Podemos Party appears poised to do the same. But for over a century, no third-party candidate has had any chance of winning a US presidential election. We have a two-party winner-take-all system, in which our choice is between two candidates, both of whom necessarily cater to big money. It takes big money just to put on the mass media campaigns required to win an election involving 240 million people of voting age.

In state and local elections, third party candidates have sometimes won. In a modest-sized city, candidates can actually influence the vote by going door to door, passing out flyers and bumper stickers, giving local presentations, and getting on local radio and TV. But in a national election, those efforts are easily trumped by the mass media. And local governments too are beholden to big money.

When governments of any size need to borrow money, the megabanks in a position to supply it can generally dictate the terms. Even in Greece, where the populist Syriza Party managed to prevail in January, the anti-austerity platform of the new government is being throttled by the moneylenders who have the government in a chokehold.

How did we lose our democracy? Were the Founding Fathers remiss in leaving something out of the Constitution? Or have we simply gotten too big to be governed by majority vote?

Democracy's Rise and Fall

The stages of the capture of democracy by big money are traced in a paper called "The Collapse of Democratic Nation States" by theologian and environmentalist Dr. John Cobb. Going back several centuries, he points to the rise of private banking, which usurped the power to create money from governments:

The influence of money was greatly enhanced by the emergence of private banking.  The banks are able to create money and so to lend amounts far in excess of their actual wealth.  This control of money-creation . . . has given banks overwhelming control over human affairs.  In the United States, Wall Street makes most of the truly important decisions that are directly attributed to Washington.

Today the vast majority of the money supply in Western countries is created by private bankers. That tradition goes back to the 17th century, when the privately-owned Bank of England, the mother of all central banks, negotiated the right to print England's money after Parliament stripped that power from the Crown. When King William needed money to fight a war, he had to borrow. The government as borrower then became servant of the lender.

In America, however, the colonists defied the Bank of England and issued their own paper scrip; and they thrived. When King George forbade that practice, the colonists rebelled.

They won the Revolution but lost the power to create their own money supply, when they opted for gold rather than paper money as their official means of exchange. Gold was in limited supply and was controlled by the bankers, who surreptitiously expanded the money supply by issuing multiple banknotes against a limited supply of gold.

This was the system euphemistically called "fractional reserve" banking, meaning only a fraction of the gold necessary to back the banks' privately-issued notes was actually held in their vaults. These notes were lent at interest, putting citizens and the government in debt to bankers who created the notes with a printing press. It was something the government could have done itself debt-free, and the American colonies had done with great success until England went to war to stop them.

President Abraham Lincoln revived the colonists' paper money system when he issued the Treasury notes called "Greenbacks" that helped the Union win the Civil War. But Lincoln was assassinated, and the Greenback issues were discontinued.

In every presidential election between 1872 and 1896, there was a third national party running on a platform of financial reform. Typically organized under the auspices of labor or farmer organizations, these were parties of the people rather than the banks. They included the Populist Party, the Greenback and Greenback Labor Parties, the Labor Reform Party, the Antimonopolist Party, and the Union Labor Party. They advocated expanding the national currency to meet the needs of trade, reform of the banking system, and democratic control of the financial system.

The Populist movement of the 1890s represented the last serious challenge to the bankers' monopoly over the right to create the nation's money.  According to monetary historian Murray Rothbard, politics after the turn of the century became a struggle between two competing banking giants, the Morgans and the Rockefellers.  The parties sometimes changed hands, but the puppeteers pulling the strings were always one of these two big-money players.

In All the Presidents' Bankers, Nomi Prins names six banking giants and associated banking families that have dominated politics for over a century. No popular third party candidates have a real chance of prevailing, because they have to compete with two entrenched parties funded by these massively powerful Wall Street banks.

Democracy Succumbs to Globalization

In an earlier era, notes Dr. Cobb, wealthy landowners were able to control democracies by restricting government participation to the propertied class. When those restrictions were removed, big money controlled elections by other means:

First, running for office became expensive, so that those who seek office require wealthy sponsors to whom they are then beholden.  Second, the great majority of voters have little independent knowledge of those for whom they vote or of the issues to be dealt with.  Their judgments are, accordingly, dependent on what they learn from the mass media.  These media, in turn, are controlled by moneyed interests.

Control of the media and financial leverage over elected officials then enabled those other curbs on democracy we know today, including high barriers to ballot placement for third parties and their elimination from presidential debates, vote suppression, registration restrictions, identification laws, voter roll purges, gerrymandering, computer voting, and secrecy in government.

The final blow to democracy, says Dr. Cobb, was "globalization" – an expanding global market that overrides national interests:

[T]oday's global economy is fully transnational.  The money power is not much interested in boundaries between states and generally works to reduce their influence on markets and investments. . . . Thus transnational corporations inherently work to undermine nation states, whether they are democratic or not.

The most glaring example today is the secret twelve-country trade agreement called the Trans-Pacific Partnership. If it goes through, the TPP will dramatically expand the power of multinational corporations to use closed-door tribunals to challenge and supersede domestic laws, including environmental, labor, health and other protections.

Looking at Alternatives

Some critics ask whether our system of making decisions by a mass popular vote easily manipulated by the paid-for media is the most effective way of governing on behalf of the people. In an interesting Ted Talk, political scientist Eric Li makes a compelling case for the system of "meritocracy" that has been quite successful in China.

In America Beyond Capitalism, Prof. Gar Alperovitz argues that the US is simply too big to operate as a democracy at the national level. Excluding Canada and Australia, which have large empty landmasses, the United States is larger geographically than all the other advanced industrial countries of the OECD (Organization for Economic Cooperation and Development) combined. He proposes what he calls "The Pluralist Commonwealth": a system anchored in the reconstruction of communities and the democratization of wealth. It involves plural forms of cooperative and common ownership beginning with decentralization and moving to higher levels of regional and national coordination when necessary. He is co-chair along with James Gustav Speth of an initiative called The Next System Project, which seeks to help open a far-ranging discussion of how to move beyond the failing traditional political-economic systems of both left and Right..

Dr. Alperovitz quotes Prof. Donald Livingston, who asked in 2002:

What value is there in continuing to prop up a union of this monstrous size? . . . [T]here are ample resources in the American federal tradition to justify states' and local communities' recalling, out of their own sovereignty, powers they have allowed the central government to usurp.

Taking Back Our Power

If governments are recalling their sovereign powers, they might start with the power to create money, which was usurped by private interests while the people were asleep at the wheel. State and local governments are not allowed to print their own currencies; but they can own banks, and all depository banks create money when they make loans, as the Bank of England recently acknowledged.

The federal government could take back the power to create the national money supply by issuing its own Treasury notes as Abraham Lincoln did. Alternatively, it could issue some very large denomination coins as authorized in the Constitution; or it could nationalize the central bank and use quantitative easing to fund infrastructure, education, job creation, and social services, responding to the needs of the people rather than the banks.

The freedom to vote carries little weight without economic freedom – the freedom to work and to have food, shelter, education, medical care and a decent retirement. President Franklin Roosevelt maintained that we need an Economic Bill of Rights. If our elected representatives were not beholden to the moneylenders, they might be able both to pass such a bill and to come up with the money to fund it.

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at Listen to "It's Our Money with Ellen Brown" on

Wednesday, April 8, 2015

Re: Birth Pangs Of The Coming Great Depression

Birth Pangs Of The Coming Great Depression

By Michael Snyder of The Economic Collapse
Friday, January 30, 2015 3:28 AM EDT

The signs of the times are everywhere – all you have to do is open up your eyes and look at them.  When a pregnant woman first goes into labor, the birth pangs are usually fairly moderate and are not that close together. But as the time for delivery approaches, they become much more frequent and much more intense. Economically, what we are experiencing right now are birth pangs of the coming Great Depression. As we get closer to the crisis that is looming on the horizon, they will become even more powerful. This week, we learned that the Baltic Dry Index has fallen to the lowest level that we have seen in 29 years.The Baltic Dry Index also crashed during the financial collapse of 2008, but right now it is already lower than it was at any point during the last financial crisis. In addition, "Dr. Copper" and other industrial commodities continue to plunge. This almost always happens before we enter an economic downturn. Meanwhile, as I mentioned the other day, orders for durable goods are declining. This is also a traditional indicator that a recession is approaching. The warning signs are there – we just have to be open to what they are telling us.

Birth Pangs

And of course there are so many more parallels between past economic downturns and what is happening right now.

For example, volatility has returned to the markets in a big way. On Tuesday the Dow was down about 300 points, on Wednesday it was down another couple hundred points, and then on Thursday it was up a couple hundred points.

This is precisely how markets behave just before they crash. When markets are calm, they tend to go up. When markets get really choppy and start behaving erratically, that tells us that a big move down is usually coming.

At the same time, almost every major global currency is imploding. For much more on this, see the amazing charts in this article.

In particular, I am greatly concerned about the collapse of the euro. The Swiss would not have decoupled their currency from the euro if it was healthy.  And political events in Greece are certainly not going to help things either. Economic conditions across Europe just continue to get worse, and the future of the eurozone itself is very much in doubt at this point. And if the eurozone does break up, a European economic depression is almost virtually assured – at least in the short term.

And I haven't even mentioned the oil crash yet.

There is only one other time in all of history when the price of oil collapsed by more than 60 dollars, and that was just prior to the horrific financial crisis of 2008.

Since the last financial crisis, the oil industry has been a huge source for job growth in this country. The following is an excerpt from a recent CNN article

The oil sector has added over a half million jobs — many of them high paying — since the recession ended in June 2009. That's 13% of all US job growth over that period.

Now energy companies and related sectors are laying off thousands. Expect that trend to continue, bears say.

But losing good jobs is just the tip of the iceberg of this oil crisis.

At this point, the price of oil has already dropped to a catastrophically low level.  The longer it stays at this level, the more damage that it is going to do.  If the price of oil stays at this level for all of 2015, we are going to have a complete and total financial nightmare on our hands

For the first time in 18 years, oil exporters are pulling liquidity out of world markets rather than putting money in. The world is now fast approaching a world reserve currency shift. If we see 8 to 12 months at these oil prices; U.S. shale industry will be wiped out. The effect on junk bonds will cascade to the rest of the stock market and U.S. economy.

…and this time there will be nothing left to catch the falling knife before it hits the American economy right in the heart. Not the FED nor the U.S. government can stop what's coming. Liquidity will freeze up, our credit will be downgraded, the stock market will start to collapse, and then we can expect the FED to come in and hyper-inflate the dollar. This will cause the world to finish abandoning the world reserve currency in the last rungs of trade. This will be the end of the petrodollar.

Something that I have not discussed so far this year is the looming crisis in emerging market debt.

As economic problems spread around the world, a number of "emerging markets" are in danger of having their debt downgraded.  And many investment funds have rules that prohibit them from holding any debt that is not "investment grade". Therefore, we could potentially see some of these giant funds dumping massive amounts of emerging market debt if downgrades happen.

This is a really big deal.  As a Business Insider article recently detailed, we could be talking about hundreds of billions of dollars…

Russia this week became the first of the major economies to lose its investment grade status from Standard & Poor's, falling out off the top ratings category for credits deemed to have a low risk of default for the first time in a decade.

If Moody's and Fitch follow, conservative investors barred from owning junk securities must sell their holdings. JPMorgan estimates this means they may ditch $6 billion in Russian government rouble and dollar debt.

Russia may have company. Almost $260 billion worth of sovereign and corporate bonds – nearly a tenth of outstanding emerging market (EM) debt – is in danger of being relegated to junk, according to David Spegel, head of emerging debt at BNP Paribas, who calls such credits "falling angels".

And no article of this nature would be complete without mentioning derivatives.

I could not possibly overemphasize the danger that the 700 trillion dollar derivatives bubble poses to the global financial system.

As we enter the coming Great Depression, derivatives are going to play a starring role. Wall Street has been pumped full of funny money by global central banks, and our financial markets have been transformed into the greatest casino in the history of the world. When this house of cards comes crashing down, and it will, it is going to be a financial disaster unlike anything that the planet has ever seen.

And yes, global central banks are very much responsible for setting the stage for what we are about to experience.

I really like the way that David Stockman put it the other day…

The global financial system is literally booby-trapped with accidents waiting to happen owing to six consecutive years of massive money printing by nearly every central bank in the world.

Over that span, the collective balance sheet of the major central banks has soared by nearly $11 trillion, meaning that honest price discovery has been virtually destroyed. This massive "bid" for existing financial assets based on credit confected from thin air drove long-term bond yields to rock bottom levels not seen in 600 years since the Black Plague; and pinned money market costs at zero—-for 73 months running.

What is the consequence of this drastic financial repression along the entire yield curve? The answer is bond prices which keep rising regardless of credit risk, inflation or taxes; and rampant carry trade speculation that can't get out of its own way because  central banks have made the financial gamblers' cost of goods—the "funding" cost of their trades—-essentially zero.

Of course I am not the only one warning that a new Great Depression is coming. For instance, just consider what British hedge fund manager Crispin Odey is saying…

British hedge fund manager Crispin Odey thinks we've entered an economic downturn that is "likely to be remembered in a hundred years," and central banks won't be able to stop it.

In his Odey Asset Management investor letter dated Dec. 31, Odey writes that the shorting opportunity "looks as great as it was in 07/09."

"My point is that we used all our monetary firepower to avoid the first downturn in 2007-09," he writes, "so we are really at a dangerous point to try to counter the effects of a slowing China, falling commodities and EM incomes, and the ultimate First World Effects. This is the heart of the message. If economic activity far from picks up, but falters, then there will be a painful round of debt default."

Even though most average citizens are completely oblivious to what is happening, many among the elite are heeding the warning signs and are feverishly getting prepared. As Robert Johnson told a stunned audience at the World Economic Forum the other day, they are "buying airstrips and farms in places like New Zealand". They can see the horrifying storm forming on the horizon and they are preparing to get out while the getting is good.

It can be very frustrating to write about economics, because things in the financial world can take an extended period of time to play out.  Sadly, most people these days have extremely short attention spans. We live in a world of iPhones, iPads, YouTube videos, Facebook updates and 48 hour news cycles. People no longer are accustomed to thinking in long-term time frames, and if something does not happen right away we tend to get bored with it.

But the economic world is not like a game of "Angry Birds". Rather, it is very much like a game of chess.

And unfortunately for us, checkmate is right around the corner.

Saturday, April 4, 2015

Re: Yemen and Socotra Island and Militarization of Strategic Waterways

Yemen and Socotra ; and Militarization of Strategic Waterways

Securing US Control over Socotra Island and the Gulf of Aden

Global Research, April 04, 2015
Global Research 7 February 2010
  44  7 
Yemen and The Militarization of Strategic Waterways

This article was first published by GR more than five years ago sheds light on America's unspoken military agenda: the control over strategic waterways  (GR Ed. M. Ch)


"Whoever attains maritime supremacy in the Indian Ocean would be a prominent player on the international scene." (US Navy Geostrategist Rear Admiral Alfred Thayus Mahan (1840-1914))

The Yemeni archipelago of Socotra in the Indian Ocean is located some 80 kilometres off the Horn of Africa and 380 kilometres South of the Yemeni coastline. The islands of Socotra are a wildlife reserverecognized by (UNESCO), as a World Natural Heritage Site. 

Socotra is at the crossroads of the strategic naval waterways of the Red Sea and the Gulf of Aden (See map below). It is of crucial importance to the US military.


Among Washington's strategic objectives is the militarization of major sea ways. This strategic waterway links the Mediterranean to South Asia and the Far East, through the Suez Canal, the Red Sea and the Gulf of Aden.

It is a major transit route for oil tankers. A large share of China's industrial exports to Western Europe transits through this strategic waterway. Maritime trade from East and Southern Africa to Western Europe also transits within proximity of Socotra (Suqutra), through the Gulf of Aden and the Red Sea. (see map below). A military base in Socotra could be used to oversee the movement of vessels including war ships in an out of the Gulf of Aden.

"The [Indian] Ocean is a major sea lane connecting the Middle East, East Asia and Africa with Europe and the Americas. It has four crucial access waterways facilitating international maritime trade, that is the Suez Canal in Egypt, Bab-el-Mandeb (bordering Djibouti and Yemen), Straits of Hormuz (bordering Iran and Oman), and Straits of Malacca (bordering Indonesia and Malaysia). These 'chokepoints' are critical to world oil trade as huge amounts of oil pass through them." (Amjed Jaaved, A new hot-spot of rivalry, Pakistan Observer, July 1, 2009)


Sea Power

From a military standpoint, the Socotra archipelago is at a strategic maritime crossroads. Morever, the archipelago extends over a relatively large maritime area at the Eastern exit of the Gulf of Aden, from the island of Abd al Kuri, to the main island of Socotra. (See map 1 above and 2b below) This maritime area of international transit lies in Yemeni territorial waters. The objective of the US is to police the entire Gulf of Aden seaway from the Yemeni to Somalian coastline. (See map 1).

MAP 2b

Socotra is some 3000 km from the US naval base of Diego Garcia, which is among America's largest overseas military facilities.

The Socotra Military Base

On January 2nd, 2010, President Saleh and General David Petraeus, Commander of the US Central Command met for high level discussions behind closed doors.

The Saleh-Petraeus meeting was casually presented by the media as a timely response to the foiled Detroit Christmas bomb attack on Northwest flight 253. It had apparently been scheduled on an ad hoc basis as a means to coordinating counter-terrorism initiatives directed against "Al Qaeda in Yemen", including "the use [of] American drones and missiles on Yemen lands."

Several reports, however, confirmed that the Saleh-Petraeus meetings were intent upon redefining US military involvement in Yemen including the establishment of a full-fledged military base on the island of Socotra. Yemen's president Ali Abdullah Saleh was reported to have "surrendered Socotra for Americans who would set up a military base, pointing out that U.S. officials and the Yemeni government agreed to set up a military base in Socotra to counter pirates and al-Qaeda." (Fars News.January 19, 2010)

On January 1st, one day before the Saleh-Petraeus meetings in Sanaa, General Petraeus confirmed in a Baghdad press conference that "security assistance" to Yemen would more than double from 70 million to more than 150 million dollars, which represents a 14 fold increase since 2006. (Scramble for the Island of Bliss: Socotra!War in Iraq, January 12, 2010. See also CNN January 9, 2010, The Guardian, December 28, 2009).

This doubling of military aid to Yemen was presented to World public opinion as a response to the Detroit bomb incident, which allegedly had been ordered by Al Qaeda operatives in Yemen.

The establishment of an air force base on the island of Socotra was described by the US media as part of the "Global war on Terrorism":

"Among the new programs, Saleh and Petraeus agreed to allow the use of American aircraft, perhaps drones, as well as "seaborne missiles"–as long as the operations have prior approval from the Yemenis, according to a senior Yemeni official who requested anonymity when speaking about sensitive subjects. U.S. officials say the island of Socotra, 200 miles off the Yemeni coast, will be beefed up from a small airstrip [under the jurisdiction of the Yemeni military] to a full base in order to support the larger aid program as well as battle Somali pirates. Petraeus is also trying to provide the Yemeni forces with basic equipment such as up-armored Humvees and possibly more helicopters." (Newsweek,  Newsweek, January 18, 2010, emphasis added)

Existing runway and airport

US Naval Facility?

The proposed US Socotra military facility, however, is not limited to an air force base. A US naval base has also been contemplated.

The development of Socotra's naval infrastructure was already in the pipeline. Barely a few days prior (December 29, 2009) to the Petraeus-Saleh discussions (January 2, 2010), the Yemeni cabinet approved a US$14 million loan by Kuwait Fund for Arab Economic Development (KFAED) in support of the development of Socotra's seaport project.


The Great Game

The Socotra archipelago is part of the Great Game opposing Russia and America.

During the Cold War, the Soviet Union had a military presence in Socotra, which at the time was part of South Yemen.

Barely a year ago, the Russians entered into renewed discussions with the Yemeni government regarding the establishment of a Naval base on Socotra island. A year later, in January 2010, in the week following the Petraeus-Saleh meeting, a Russian Navy communiqué "confirmed that Russia did not give up its plans to have bases for its ships… on Socotra island." (DEFENSE and SECURITY (Russia), January 25, 2010)

The Petraeus-Saleh January 2, 2010 discussions were crucial in weakening Russian diplomatic overtures to the Yemeni government.

The US military has had its eye on the island of Socotra since the end of the Cold War.

In 1999, Socotra was chosen "as a site upon which the United States planned to build a signal intelligence system…." Yemeni opposition news media reported that "Yemen's administration had agreed to allow the U.S. military access to both a port and an airport on Socotra." According to the opposition daily Al-Haq, "a new civilian airport built on Socotra to promote tourism had conveniently been constructed in accordance with U.S. military specifications." (Pittsburgh Post-Gazette (Pennsylvania), October 18, 2000)

The Militarization of the Indian Ocean

The establishment of a US military base in Socotra is part of the broader process of militarization of the Indian Ocean. The latter consists in integrating and linking Socotra into an existing structure as well as reinforcing the key role played by  the Diego Garcia military base in the Chagos archipelago.

The US Navy's geostrategist Rear Admiral Alfred T. Mahan had intimated, prior to First World War, that "whoever attains maritime supremacy in the Indian Ocean [will] be a prominent player on the international scene.".(Indian Ocean and our Security).

What was at stake in Rear Admiral Mahan's writings was the strategic control by the US of major Ocean sea ways and of the Indian Ocean in particular: "This ocean is the key to the seven seas in the twenty-first century; the destiny of the world will be decided in these waters."


Michel Chossudovsky is Professor of Economics (Emeritus) at the University of Ottawa and Director of the Centre for Research on Globalization (CRG), Montreal,  which hosts the award winning . He is the author of the international best-seller "The Globalisation of Poverty and The New World Order". He is contributor to the Encyclopaedia Britannica, member of the Kuala Lumpur War Crimes Commission and recipient of the Human Rights Prize of the Society for the Protection of Civil Rights and Human Dignity (GBM), Berlin, Germany. His writings have been published in more than twenty languages.