Tuesday, February 16, 2010

Bank Crimes

The Bankers Manifesto of 1892:
History Repeated

Congressman Charles A. Lindbergh, Sr. revealed the Bankers Manifesto of 1892 to the U.S. Congress somewhere between 1907 and 1917.

We (the bankers) must proceed with caution and guard every move made, for the lower order of people are already showing signs of restless commotion. Prudence will therefore show a policy of apparently yielding to the popular will until our plans are so far consummated that we can declare our designs without fear of any organized resistance.

Organizations in the United States should be carefully watched by our trusted men, and we must take immediate steps to control these organizations in our interest or disrupt them.

At the coming Omaha convention to be held July 4, 1892, our men must attend and direct its movement or else there will be set on foot such antagonism to our designs as may require force to overcome.

This at the present time would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination (conspiracy) and legislation.

The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.

When, through the process of law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers.

People without homes will not quarrel with their leaders. History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism.

The question of tariff reform must be urged through the organization known as the Democratic Party, and the question of protection with the reciprocity must be forced to view through the Republican Party.

By thus dividing voters, we can get them to expend their energies in fighting over questions of no importance to us, except as teachers to the common herd. Thus, by discrete actions, we can secure all that has been so generously planned and successfully accomplished.

Friday, February 12, 2010

Reflections Of Fidel

The Bolivarian Revolution and the Caribbean

I liked history, as most boys do. Wars as well, a culture that society sowed in male children. All the toys offered us were weapons.

In my childhood they sent me to a city where I was never taken to a movie theater. Television did not exist then, and there was no radio in the house in which I lived. I had to use my imagination.

In the first boarding school, I read with amazement about the Universal Flood and Noah’s Ark. Later on I came to the conclusion that maybe it was a vestige that humanity retained of the last climate change in the history of our species. It was possibly the end of the Ice Age, which is thought to have taken place thousands of years ago.

As one might imagine, later I avidly read the histories of Alexander the Great, Caesar, Hannibal, Bonaparte and, of course, any book that came into my hands on Maceo, Gómez, Agramonte and other great soldiers who fought for our independence. I did not possess sufficient culture to understand what lay behind history.

Later on, I centered my interest in Martí. In reality I owe my patriotic sentiments to him and the profound concept that "Homeland is humanity." The audacity, the beauty, the value and the ethics of his thinking helped to convert me into what I believe I am: a revolutionary. Without being a follower of Martí one cannot be a follower of Bolívar; without being a follower of Martí and Bolívar, one cannot be a Marxist and, without being a follower of Martí, Bolívar and a Marxist, one cannot be anti-imperialist; without being those three things a Revolution in Cuba in our epoch could not have been conceived.

Almost two centuries ago, Bolívar wanted to send an expedition under the command of Sucre to liberate Cuba, which really needed it, in the 1820s, as a Spanish sugar and coffee colony, with 300,000 slaves working for their white owners.

With its independence frustrated and converted into a neo-colony, the full dignity of human beings could never be attained without a revolution that would end the exploitation of people by other people.

"…I want the first law of our republic to be the veneration of Cubans for the full dignity of human beings."

With his thinking, Martí inspired the valor and conviction that led our [26th of July] Movement to the assault on the Moncada Garrison, which would have never entered our heads without the ideas of other great thinkers like Marx and Lenin, who made us see and understand the very distinct realities of the new era that we were experiencing.

Throughout centuries, the odious latifundia ownership and its slave workforce, preceded by the extermination of the former inhabitants of these islands, was justified in the name of progress and development.
Martí said something marvelous and worthy of Bolívar and his glorious life:
"…what he did not leave done, remains undone to this day: because Bolívar has still much to do in America."

"Let Venezuela show me how to serve her: she has a son in me."

In Venezuela, as others did in the Caribbean, the colonial power planted sugar cane, coffee, and cacao, and likewise took men and women from Africa as slaves. The heroic resistance of its indigenous peoples, using nature and the vast Venezuelan soil, prevented the annihilation of the original inhabitants.

With the exception of one part of the northern hemisphere, the vast territory of Our America remained in the hands of two kings of the Iberian Peninsula.

Without fear it can be affirmed that, for centuries, our countries and the fruits of the labor of our peoples have been plundered and continue being plundered by the large transnational corporations and the oligarchies that are in their service.

Throughout the 19th and 20th centuries; in other words, for almost 200 years after the formal independence of Ibero-America, nothing changed in essence. The United States, starting with the Thirteen English colonies that rebelled, expanded west and south. It purchased Louisiana and Florida, snatched more than half of its territory from Mexico, intervened in Central America and took possession of the area of the future Panama Canal, which would link the great oceans east and west of the continent via the point where Bolívar wished to create the capital of the largest of the republics that would be born from the independence of the nations of America.

In that epoch, oil and ethanol were not traded in the world, nor did the WTO exist. Sugar cane, cotton and corn were cultivated by slaves. Machines were still to be invented. Industrialization based on coal was strongly advancing.

Wars gave impulse to civilization, and civilization gave impulse to wars. These changed in nature, and became more terrible. They finally became world conflicts.

Finally, we were a civilized world. We even believed in it as a question of principles.

But we do not know what to do with the civilization attained. Human beings have equipped themselves with nuclear weapons of unbelievable accuracy and annihilation potency while, from the moral and political point of view, they have ignominiously retrogressed. Politically and socially, we are more underdeveloped than ever. Automatons are replacing soldiers; the mass media, educators, and governments are beginning to be overtaken by events without knowing what to do. In the desperation of many international political leaders one can appreciate an impotency in the face of the problems that are accumulating in their offices and steadily more frequent international meetings.

In those circumstances, an unprecedented disaster is taking place in Haiti, while on the other side of the planet, three wars and an arms race are continuing their development, in the midst of the economic crisis and growing conflicts, which is consuming more than 2.5% of the global GDP, a figure with which all the Third World countries could be developed in a short period of time and possibly evade climate change by devoting the economic and scientific resources that are essential to that objective.

The credibility of the world community has just received a harsh blow in Copenhagen, and our species is not demonstrating its capacity for surviving.

The tragedy of Haiti allows me to expound on this point of view based on what Venezuela has done with the countries of the Caribbean. While the large financial institutions vacillate over what to do in Haiti, Venezuela did not hesitate for one second to cancel that country’s economic debt of $167 million.

Throughout close to one century the major transnationals extracted and exported Venezuelan oil at infinitesimal prices. Over the decades, Venezuela became the largest world exporter of oil.

It is known that when the United States spent hundreds of billions on its genocidal war on Vietnam, killing and mutilating millions of the sons and daughters of that heroic people, it also unilaterally broke the Bretton Woods Agreement by suspending the conversion of gold into dollars, as the agreement stipulated, and launching the cost of that dirty war on the world. The U.S. currency was devalued and the hard currency income of the Caribbean countries was not sufficient to pay for oil. Their economies are based on tourism and exports of sugar, coffee, cacao and other agricultural products. A stunning blow threatened the economies of the Caribbean states, with the exception of two of them that are exporters of energy.

Other developed countries eliminated preferential tariffs for Caribbean agricultural exports, like bananas; Venezuela made an unprecedented gesture: it guaranteed the majority of those countries secure supplies of oil and special payment facilities.

On the other hand, nobody was concerned about the destiny of those peoples. If it were not for the Bolivarian Republic a terrible crisis would have hit the independent states of the Caribbean, with the exception of Trinidad and Tobago and Barbados. In the case of Cuba, after the USSR collapsed, the Bolivarian government promoted an extraordinary growth in trade between the two nations, which included the exchange of goods and services, which permitted us to confront one of the harshest periods of our glorious revolutionary history.

The finest ally of the United States and, at the same time the basest and vilest enemy of the people, was the fraudster and simulator Rómulo Betancourt, president-elect of Venezuela when the Revolution triumphed in Cuba in 1959.

He was the principal accomplice of the pirate attacks, acts of terrorism, aggressions against and the blockade of our homeland.

When Our America most needed it, the Bolivarian Revolution finally broke out.

Invited to Caracas by Hugo Chávez, the members of the ALBA committed themselves to lend maximum support to the Haitian people at the saddest moment in the history of that legendary people, who carried out the first victorious social Revolution in world history, when hundreds of thousands of Africans, in rising up and creating in Haiti a republic thousands of miles away from their native lands, undertook one of the most glorious revolutionary actions of this hemisphere. In Haiti, there is African, Indian and white blood; the Republic was born from the concepts of equality, justice and liberty for all human beings.

Ten years ago, at a point when the Caribbean and Central America lost tens of thousands of lives during the tragedy of Hurricane Mitch, the Latin American School of Medicine (ELAM) was created in Cuba to train Latin American and Caribbean doctors who, one day, would save millions of lives, but especially and above all, would serve as an example in the noble exercise of the medical profession. Together with the Cubans, dozens of young Venezuelans and other Latin American graduates of ELAM will be in Haiti. News has arrived from all corners of the continent of many compañeros who studied at ELAM and now want to collaborate with them in the noble task of saving the lives of children, women and men, young and old.

There will be dozens of field hospitals, rehabilitation centers and hospitals, in which more than 1,000 doctors and students in the final years of medical school from Haiti, Venezuela, the Dominican Republic, Bolivia, Nicaragua, Ecuador, Brazil, Chile and other sister countries will be providing services. We have the honor of already being able to count on a number of American doctors who also studied in ELAM. We are prepared to cooperate with those countries and institutions which wish to participate in these efforts to provide medical services in Haiti.

Venezuela has already contributed tents, medical equipment, medicine and foodstuffs. The Haitian government has given full cooperation and support to this effort to bring health services free of charge to the largest possible number of Haitians. It will be a consolation for everybody in the midst of the greatest tragedy that has taken place in our hemisphere.

Fidel Castro Ruz
February 7, 2010

Friday, February 05, 2010


The Bankruptcy of the
United States is Now Certain

Porter Stansberry

It's one of those numbers that's so unbelievable you have to actually think about it for a while... Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt - whether subprime borrowers, GM, Fannie, or GE - the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss." What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt it's called "a default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists - Alan Greenspan and Pablo Guidotti - published the secret formula in a 1999 academic paper. That's why the formula is called the Greenspan-Guidotti rule. The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default. The U.S. holds gold, oil, and foreign currency in reserve. The U.S. has 8,133.5 metric tonnes of gold (it is the world's largest holder). That's 16,267,000 pounds. At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months - an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So... where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP. Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or the Russian central bank, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None own even 1% of their total reserves in gold.

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