“….this is nothing less than legalized plunder of the american people”

“The Fed’s sole purpose: keeping the banks afloat” – G. Edward Griffin @ Casey Research says Casey Summit speaker G. Edward Griffin, author of The Creature from Jekyll IslandHe talks about the Fed’s real role in the US economy and why – contrary to common belief – it is not this banking cartel’s mission to act in the best interest of the American public.

The origin of the FED can be traced to the early years of the 20th century. After the failure of the, first and then second, Bank of the United States, the banking cartel managed to get Woodrow Wilson’s agreement, allegedly in exchange for financial support for his presidential campaign of 1912,  for a bill that would lead to the formation of a central bank for the United States.

“In 1910, a secret meeting took place on the Morgan estate on Jekyll Island, Georgia. Aldrich met with representatives of prominent banking firms. Such men included Henry Davison (senior partner of J.P. Morgan Company), Frank Vandelip (President of the National Bank of New York associated with the Rockefellers), Charles D. Norton (president of the Morgan-dominated of First National Bank of New York), Benjamin Strong (representing J.P. Morgan), and the primary architect of the Act, Paul Warburg (representing Kuhn, Loeb & Co.)”

“Over a period of ten days they drafted the Federal Reserve Act that was voted on in Congress on Monday 22 December 1913….It passed through the Senate the following morning and Woodrow Wilson signed the bill into law later that same day at 6:02 pm. This Act transferred control of the money supply of the United States from Congress as defined in the U.S. Constitution to the private banking elite.”

“The deceptive terminology of the name was carefully chosen because the American public did not want a central bank similar to those in Europe. The Federal Reserve is not a federal governmental entity nor is it a reserve, such as a governmental treasury, backing up its currency. The Federal Reserve is a legalized cartel of the money supply owned by private national banks, operating for the benefit of the few under the guise of protecting and promoting public interests.”

“The meeting on Jekyll Island remained unknown to the public until Forbes magazine founder Bertie Charles Forbes wrote an article about it in 1916, three years after the Federal Reserve Act was passed.”

TYR 8 October 2012 reads

How to be a China bull @ China Financial Markets Michael Pettis dissects and challenges the notion that China’s high growth rate will continue in the next decade. High debt and misallocation of resources stand in the way.

Decline, Decay, Denial, Delusion & Despair @ The Burning Platform “I despair for my country that has chosen to eat, amuse and borrow itself to death. But my despair is deepest for my children and their future. The greed, corruption, myopia, selfishness, and disregard for the well-being of future generations by current and past generations has left a barren and bleak landscape for my children. The Huxley vision of America consuming and amusing itself to death is coming to a painful conclusion, as the limits of a fiat currency and debt based lifestyle become evident. Those in power are preparing the masses for a more Orwellian vision of America when they are forced to pull the plug on the existing paradigm.”

What’s Your Number at the Zero Bound? @ PIMCO The FED’s policies force the elderly to work longer… “low interest rates go hand-in-hand with high labor force participation among the elderly.”….”Work a little longer. Save a little more. Get by with a little less. It’s like each of our numbers is tied to a hot air balloon that seems to rise higher as we get a little closer.”

TYR 4 October 2012 reads

Spanish Prisoners @ NYT The catalan secessionist movement has sound economic, cultural and historical roots. It should be respected. In all aspects but name, Catalonia is a colony of Spain.

Chart Of The Day: The Rise Of Global Central Planning @ Zerohedge It starts like this…”there was a time when the world had (somewhat) free markets.”. The article does not contain a lot of information, but it conveys the idea with perhaps the most explanatory power in order to comprehend the present crisis: western societies are fast morphing into a neo-feudal regime, confiscatory, unelected, undemocratic, repressive, where central banks play the role of exercising the power usurped to individual citizens and democratic institutions. Behind the central banks, the real “owners” of power, a financial elite that in many ways remains hidden. The process started with the Magna Carta goes into reverse.

French Economy Implodes @ Mish’s Global Economic Trend Analysis the Markit Composite PMI sports the steepest rate of contraction since March 2009 with job losses accelerating at the fastest pace in 33 months and output plunging at the fastest rate in 42 months.

TYR reads “The Real Reason Behind War”

by James E. Miller of the Ludwig von Mises Institute of Canada

First some excerpts, then a comment, and finally the article.

The excerpts:

“As economist Joseph Salerno notes: We thus arrive at a universal, praxeological truth about war. War is the outcome of class conflict inherent in the political relationship – the relationship between ruler and ruled, parasite and producer, tax-consumer and taxpayer. The parasitic class makes war with purpose and deliberation in order to conceal and ratchet up their exploitation of the much larger productive class. Thus, a permanent state of war or preparedness for war is optimal from the point of view of the ruling elite, especially one that controls a large and powerful state.”

“Using war as both a diversion and a cover for imperialistic motives is best exemplified by the ongoing tension between the state of Israel and Iran. “

“Israeli Prime Minister Benjamin Netanyahu is so determined to put the boot down on a nuclear Iran that he is actively interfering with the U.S. presidential election with the hope of obtaining military assistance.  He arrogantly carries on this crusade even though there is no evidence of a weapons program and the Iranian government remains a signatory of the nuclear non-proliferation treaty.”

“So why does Netanyahu desperately want war with Iran? “

“..as former Assistant Secretary to the U.S. Treasury and Wall Street Journal editor Paul Craig Roberts points out: the real agenda hiding behind the hysterical concern about an Iranian nuke, is the rightwing Israeli government’s design on the water resources of southern Lebanon.”

“The Israeli government knows that it cannot be forthright and say that it wants Americans to go to war with Iran so that Israel can steal southern Lebanon. But if fear over nonexistent nukes can muster the Western populations to support an attack on Iran, Iran can be eliminated as Hizbollah’s supplier, and Israel can steal the water from Lebanon.”

“The undertaking of war masks this reality for a short period while accelerating the pace at which liberty is stripped away.  In the end, wars are waged to fulfill the sadistic desires of government leaders and to give them an opening to tighten their grip on society.  The parasitic class which makes up the state doesn’t just war with other states; it conducts war against the citizens it claims to protect.”

The comment:

The central idea of the article is that war is always a deliberate policy, exercised by the elites that control the state for their own purposes, which are not the protection of the citizens of the states under whose banners they hide.

This idea has already been expressed before. Major General Smedley Darlington Butler, one of the most colorful officers in the Marine Corps’ long history, was one of the two Marines who received two Medals of Honor for separate acts of outstanding heroism. General Butler was still in his teens when, on 20 May 1898, he was appointed a second lieutenant in the Marine Corps during the Spanish-American War. In the early part of the last century General Butler led assault troops in Nicaragua, Dominican Republic, Mexico and Haiti. He was a regimental commander in France during World War I and later served in China. On 1 October 1931, he was retired upon his own application after completion of 33 years’ service in the Marine Corps. Major General Butler died at the Naval Hospital, Philadelphia, on 21 June 1940, following a four-week illness. After his retirement General Butler wrote a book, War is a Racket, which begins as follows:

“WAR is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives. A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.”.

The article:

To mark the 11year anniversary of the Afghanistan occupation, the death toll for the U.S. military reached two thousand.  The soldier who had the misfortune of both dying and becoming a stark symbol of America’s longest running war died under unusual circumstances.  Instead of being killed while on patrol, the unnamed soldier was the victim of an “apparent insider attack” that was conducted by American-backed Afghan forces.  This latest incident comes one week after an announcement by NATO that it would scale back its operations with Afghan security forces after a spike in insider attacks.  At the time of the announcement, a total of fifty one NATO troops had been killed by soldiers wearing Afghan uniforms.

This upsurge in violence committed by supposed allies remains a challenge to the U.S. military which is attempting to arm and train a suitable domestic security force to leave behind as the troop drawdown deadline of late 2014 approaches.  As the Associated Press reports, the internal attacks are “undermining the mantra that both sides are fighting the Taliban “shoulder to shoulder.””

The AP comment is representative of the American public’s understanding of the so-called War on Terror.  Since the attack on the World Trade Center on September 11, 2011, Americans, as well as most Westerners, are under the impression that the U.S. government and its allies are waging war with the Taliban and Al Qaeda.  These radical Islamic terrorist groups are said to threaten America’s way of life.  In the words of former President George Bush on the evening of 9/11, “America was targeted for attack because we’re the brightest beacon for freedom and opportunity in the world.”

This line of reasoning ignores the decades of intervention conducted by the American military and intelligence apparatus which resulted in the deaths of thousands, the overthrow of democratically elected leaders, and financial support for repressive dictators.  Yet as neoconservatives and liberals alike still appeal to this notion to justify American “leadership,” it becomes preposterous in the face of revelations that U.S. tax dollars areaiding rebel militants suspected of being members of Al Qaeda and other terrorist groups. According to the Centre for Research on Globalization, U.S. Secretary of State Hillary Clinton recently pledged $45 million in “non-lethal aid” to the opposition currently trying to overthrow President Bashar al-Assad in Syria.  This “opposition” is labeled as civilian but is actually partly comprised of foreign terrorist brigades including the Libyan Islamic Fighting Group.  The LIFG, which is labeled a terrorist group by the U.S. State Department,is described by the United Nations as “an Al-Qaeda affiliate.”  And as the State Departmentspeculated back in 2011, Al-Qaeda “was believed to be extending its reach into Syria and seeking to exploit the popular uprising against the dictatorship of Bashar al-Assad.”  The Libyan fighters now in Syria also played a crucial role in the overthrowing of former leader Muammar Gaddafi that was supported militarily and financially by the U.S. government.

As Texas Congressman Ron Paul described it,

In Libya we worked with, among others, the rebel Libyan Fighting Group (LIFG) which included foreign elements of al-Qaeda. It has been pointed out that the al-Qaeda affiliated radicals we fought in Iraq were some of the same groups we worked with to overthrow Gaddafi in Libya. Last year in a television interview I predicted that the result of NATO’s bombing of Libya would likely be an increased al-Qaeda presence in the country. I said at the time that we may be delivering al-Qaeda another prize.

Not long after NATO overthrew Gaddafi, the al Qaeda flag was flown over the courthouse in Benghazi.

Such truths may strike the heart of those who unquestioningly support the U.S. government’s War on Terror.  It isn’t just hypocritical that the enemy is being funded by the same people they target, it is a slap in the face of all those who lost their lives on the day the World Trade Centers fell to the ground.  American lawmakers claim to be on the side of freedom and democracy even when they support not only the arming of accused terrorists but also other dictators such as King Abdullah of Saudi Arabia.

If the U.S. government was truly fighting the War on Terror to rid the world of violent extremists and iron-fist authoritarians, it wouldn’t be aiding and abetting their crimes.  So what is the purpose of war then?

The waging of total war is not an act carried out irrationally or on a whim.  Like all human action, it is purposeful and used to achieve particular ends.  And unlike armed conflict between private individuals, war is generally defined as being fought by one or more institutions known as the state.  The state is unique institution in that it holds, as famed sociologist Max Weber defined it, “the claim to the monopoly of the legitimate use of physical force in the enforcement of its order.”  This arrogated authority gives the enforcers of the state the legal right to plunder whatever citizenry happens to be living under their rule.  Whereas in the private sphere all dealings are voluntary by nature, the state’s operations are financed solely through force.  This creates a kind of tension between those coerced into paying and those who live off the proceeds.  War with foreigners can thus be seen as a kind of distraction from the exploitive state of affair known as state governance.

As economist Joseph Salerno notes,

We thus arrive at a universal, praxeological truth about war. War is the outcome of class conflict inherent in the political relationship – the relationship between ruler and ruled, parasite and producer, tax-consumer and taxpayer. The parasitic class makes war with purpose and deliberation in order to conceal and ratchet up their exploitation of the much larger productive class.

Thus, a permanent state of war or preparedness for war is optimal from the point of view of the ruling elite, especially one that controls a large and powerful state.

Historically, freedom has been trampled upon with little remorse or protest during war.  Enhanced domestic surveillance, the outlawing of political dissent, the internment of suspected enemies without due process, robust inflationary policy, higher government spending, increased taxation, and stifling economic intervention are all common occurrences during war.  They are policies that in the absence of war would garner a greater amount of pushback from the public.  Even more crucial is the effect war has on national identity.  Simple reasoning says that government is composed of a small group of individuals; it does not represent in some metaphysical sense all of “the people.”  This distinction is blurred and forgotten during war however as those who insist on fighting appeal to emotion rather than reason.  With the media’s assistance, allegiance to the state is championed as a display of support for war.  Dissenters are openly ridiculed as unpatriotic and friends of the enemy.  As Randolph Bourne wrote in his renowned essay “War is the Health of the State

The moment war is declared, however, the mass of the people, through some spiritual alchemy, become convinced that they have willed and executed the deed themselves. They then, with the exception of a few malcontents, proceed to allow themselves to be regimented, coerced, deranged in all the environments of their lives, and turned into a solid manufactory of destruction toward whatever other people may have, in the appointed scheme of things, come within the range of the Government’s disapprobation. The citizen throws off his contempt and indifference to Government, identifies himself with its purposes, revives all his military memories and symbols, and the State once more walks, an august presence, through the imaginations of men. Patriotism becomes the dominant feeling, and produces immediately that intense and hopeless confusion between the relations which the individual bears and should bear toward the society of which he is a part.

Using war as both a diversion and a cover for imperialistic motives is best exemplified by the ongoing tension between the state of Israel and Iran.  Western media figures have done their best to portray the rulers of Iran as lunatics hell-bent on acquiring nuclear weapons.  Israeli Prime Minister Benjamin Netanyahu is so determined to put the boot down on a nuclear Iran that he is actively interfering with the U.S. presidential election with the hope of obtaining military assistance.  He arrogantly carries on this crusade even though there is no evidence of a weapons program and the Iranian government remains a signatory of the nuclear non-proliferation treaty.

So why does Netanyahu desperately want war with Iran?  Why does he insist with childish tactics such as presenting a picture of a cartoon bomb before the United Nations even as amajority of Israelis and military leaders are opposed to a unilateral attack?   And why must the attack be imminent when U.S. intelligence has indicated that it would take years for the Iranian regime to weaponize their current nuclear program?

Wars aren’t fought because the ruling class that instigates them lacks a good reason.  In the case of Netanyahu and Israel, there are a variety of explanations why state leaders see mass murder as beneficial to their cause.  First, with bank profits falling and economic growth slowing down, Israel’s economy is showing recessionary signs.  War would be a preoccupation from a deteriorating job market.  Second, there has been little noise made over the people of Palestine and their struggle for statehood since the hysteria over Iranian nukes has picked up.  And lastly, as former Assistant Secretary to the U.S. Treasury and Wall Street Journal editor Paul Craig Roberts points out

The real agenda hiding behind the hysterical concern about an Iranian nuke, is the rightwing Israeli government’s design on the water resources of southern Lebanon.

Twice the Israeli government sent the Israeli army into southern Lebanon to occupy and eventually annex the territory. And twice Hizbollah defeated and drove out the vaunted Israeli army.

The Israeli government knows that it cannot be forthright and say that it wants Americans to go to war with Iran so that Israel can steal southern Lebanon. But if fear over nonexistent nukes can muster the Western populations to support an attack on Iran, Iran can be eliminated as Hizbollah’s supplier, and Israel can steal the water from Lebanon.

The conventional validation for perpetual war in the Middle East does not hold when looked at rationally.  When the ideas of nationalism and statist glory are wiped away, the state appears as it really is: institutionalized exploitation of the masses by the few.  The undertaking of war masks this reality for a short period while accelerating the pace at which liberty is stripped away.  In the end, wars are waged to fulfill the sadistic desires of government leaders and to give them an opening to tighten their grip on society.  The parasitic class which makes up the state doesn’t just war with other states; it conducts war against the citizens it claims to protect.

TYR reads Lacy Hunt: “No Increase in Standard of Living Since 1997”

In the following video posted @ Casey Research, Mr.Hunt convincingly argues that the increase in debt levels in the economy  from about 240% of GDP to 350% of GDP since 1997 is the real cause behind the stagnation of the standard of living in the USA during the same period. On a broader scale, the interventionist, Keynesian, policies followed by the USA government since the 1960s, an economic model that favors consumption over production, are at the root of the present economic crisis.

He traces the onset of this “age of debt” to the 1960s, when both political parties, republicans and democrats, advocated policies that increased the involvement of the government in the economy. James Tobin, Nobel Prize winner and a Keynesian economist, gave “theoretical” backing to this government (and monetary) intervention by postulating that macroeconomic science was powerful enough to modulate the business cycle (recessions/expansions) with a positive outcome, that is, increasing the welfare of society.

Another economist Arthur Okun proposed that a way to ascertain the validity of the assertion that government involvement creates positive welfare, might be the so-called Misery Index, defined as the addition of the Unemployment Rate (UR) and the Inflation Rate (IR). For instance, if the Unemployment Rate is 5% and the Inflation Rate is 3% the Misery Index would be 8. The lower the index the better off a society would be.

Mr. Hunt uses the Misery Index to prove that since the onset of the interventionist policies (1960s), the Misery Index has always been higher than before interventionist policies were used (1950s).

Perhaps the most important consequence of the application of these interventionist policies has been the secular increase in debt levels in the USA economy. The idea was supposed to be that by inducing people to get into debt, they would consume more and so the economy would grow more creating a virtuous circle. Reality could not be more different. As debt levels have steadily risen, welfare has not increased. The reason, according to Mr. Hunt lies in that debt has positive effects only when it is used in such a way that creates an income stream (cash flow) that repays the debt, that is, when is used for productive and sound investment, not consumption.

It is important to remark that Mr. Hunt’s calculation of the standard of living probably understates the severity of the retreat in living standards. The standard of living is computed by deflating Personal Disposable Income (PDI) with the Consumer Price Index (CPI) and getting a number that is comparable across time…or so it would be if the CPI was properly computed. The fact is though, that the CPI calculation has been changed many times, most specially since the 1980s, with the result that the official CPI in 2012 is much lower than what it would be if it had been computed according to the 1980s rules, that is, the CPI is misleading and systematically understated. Since a lower CPI gives you a higher real DPI, DPI is overstated, and the standard of living has not risen from many years before 1997, making Mr. Hunt’s thesis even more valid. For a complete treatment of this crucial issue please see John William’s ShadowStats.