Monday, May 20, 2013

Rise Up or Die

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Joe Sacco and I spent two years reporting from the poorest pockets of the United States for our book “Days of Destruction, Days of Revolt.”We went into our nation’s impoverished “sacrifice zones”—the first areas forced to kneel before the dictates of the marketplace—to show what happens when unfettered corporate capitalism and ceaseless economic expansion no longer have external impediments. We wanted to illustrate what unrestrained corporate exploitation does to families, communities and the natural world. We wanted to challenge the reigning ideology of globalization and laissez-faire capitalism to illustrate what life becomes when human beings and the ecosystem are ruthlessly turned into commodities to exploit until exhaustion or collapse. And we wanted to expose as impotent the formal liberal and governmental institutions that once made reform possible, institutions no longer equipped with enough authority to check the assault of corporate power.

What has taken place in these sacrifice zones—in postindustrial cities such as Camden, N.J., and Detroit, in coalfields of southern West Virginia where mining companies blast off mountaintops, in Indian reservations where the demented project of limitless economic expansion and exploitation worked some of its earliest evil, and in produce fields where laborers often endure conditions that replicate slavery—is now happening to much of the rest of the country. These sacrifice zones succumbed first. You and I are next.

Corporations write our legislation. They control our systems of information. They manage the political theater of electoral politics and impose our educational curriculum. They have turned the judiciary into one of their wholly owned subsidiaries. They have decimated labor unions and other independent mass organizations, as well as having bought off the Democratic Party, which once defended the rights of workers. With the evisceration of piecemeal and incremental reform—the primary role of liberal, democratic institutions—we are left defenseless against corporate power.

The Department of Justice seizure of two months of records of phone calls to and from editors and reporters at The Associated Press is the latest in a series of dramatic assaults against our civil liberties. The DOJ move is part of an effort to hunt down the government official or officials who leaked information to the AP about the foiling of a plot to blow up a passenger jet. Information concerning phones of Associated Press bureaus in New York, Washington, D.C., and Hartford, Conn., as well as the home and mobile phones of editors and reporters, was secretly confiscated. This, along with measures such as the use of the Espionage Act against whistle-blowers, will put a deep freeze on all independent investigations into abuses of government and corporate power.

Seizing the AP phone logs is part of the corporate state’s broader efforts to silence all voices that defy the official narrative, the state’s Newspeak, and hide from public view the inner workings, lies and crimes of empire. The person or persons who provided the classified information to the AP will, if arrested, mostly likely be prosecuted under the Espionage Act. That law was never intended when it was instituted in 1917 to silence whistle-blowers. And from 1917 until Barack Obama took office in 2009 it was employed against whistle-blowers only three times, the first time against Daniel Ellsberg for leaking the Pentagon Papers in 1971. The Espionage Act has been used six times by the Obama administration against government whistle-blowers, including Thomas Drake.

The government’s fierce persecution of the press—an attack pressed by many of the governmental agencies that are arrayed against WikiLeaks, Bradley Manning, Julian Assange and activists such as Jeremy Hammond—dovetails with the government’s use of the 2001 Authorization for Use of Military Force to carry out the assassination of U.S. citizens; of the FISA Amendments Act, which retroactively makes legal what under our Constitution was once illegal—the warrantless wiretapping and monitoring of tens of millions of U.S. citizens; and of Section 1021 of the National Defense Authorization Act, which permits the government to have the military seize U.S. citizens, strip them of due process and hold them in indefinite detention. These measures, taken together, mean there are almost no civil liberties left.

A handful of corporate oligarchs around the globe have everything—wealth, power and privilege—and the rest of us struggle as part of a vast underclass, increasingly impoverished and ruthlessly repressed. There is one set of laws and regulations for us; there is another set of laws and regulations for a power elite that functions as a global mafia.

We stand helpless before the corporate onslaught. There is no way to vote against corporate power. Citizens have no way to bring about the prosecution of Wall Street bankers and financiers for fraud, military and intelligence officials for torture and war crimes, or security and surveillance officers for human rights abuses. The Federal Reserve is reduced to printing money for banks and financiers and lending it to them at almost zero percent interest; corporate officers then lend it to us at usurious rates as high as 30 percent. I do not know what to call this system. It is certainly not capitalism. Extortion might be a better word. The fossil fuel industry, meanwhile, relentlessly trashes the ecosystem for profit. The melting of 40 percent of the summer Arctic sea ice is, to corporations, a business opportunity. Companies rush to the Arctic and extract the last vestiges of oil, natural gas, minerals and fish stocks, indifferent to the death pangs of the planet. The same corporate forces that give us endless soap operas that pass for news, from the latest court proceedings surrounding O.J. Simpson to the tawdry details of the Jodi Arias murder trial, also give us atmospheric concentrations of carbon dioxide that surpass 400 parts per million. They entrance us with their electronic hallucinations as we waiver, as paralyzed with fear as Odysseus’ sailors, between Scylla and Charybdis.

There is nothing in 5,000 years of economic history to justify the belief that human societies should structure their behavior around the demands of the marketplace. This is an absurd, utopian ideology. The airy promises of the market economy have, by now, all been exposed as lies. The ability of corporations to migrate overseas has decimated our manufacturing base. It has driven down wages, impoverishing our working class and ravaging our middle class. It has forced huge segments of the population—including those burdened by student loans—into decades of debt peonage. It has also opened the way to massive tax shelters that allow companies such as General Electric to pay no income tax. Corporations employ virtual slave labor in Bangladesh and China, making obscene profits. As corporations suck the last resources from communities and the natural world, they leave behind, as Joe Sacco and I saw in the sacrifice zones we wrote about, horrific human suffering and dead landscapes. The greater the destruction, the greater the apparatus crushes dissent.

More than 100 million Americans—one-third of the population—live in poverty or a category called “near poverty.” Yet the stories of the poor and the near poor, the hardships they endure, are rarely told by a media that is owned by a handful of corporations—Viacom, General Electric, Rupert Murdoch’s News Corp., Clear Channel and Disney. The suffering of the underclass, like the crimes of the power elite, has been rendered invisible.

In the Lakota Indian reservation at Pine Ridge, S.D., in the United States’ second poorest county, the average life expectancy for a male is 48. This is the lowest in the Western Hemisphere outside of Haiti. About 60 percent of the Pine Ridge dwellings, many of which are sod huts, lack electricity, running water, adequate insulation or sewage systems. In the old coal camps of southern West Virginia, amid poisoned air, soil and water, cancer is an epidemic. There are few jobs. And the Appalachian Mountains, which provide the headwaters for much of the Eastern Seaboard, are dotted with enormous impoundment ponds filled with heavy metals and toxic sludge. In order to breathe, children go to school in southern West Virginia clutching inhalers. Residents trapped in the internal colonies of our blighted cities endure levels of poverty and violence, as well as mass incarceration, that leave them psychologically and emotionally shattered. And the nation’s agricultural workers, denied legal protection, are often forced to labor in conditions of unpaid bondage. This is the terrible algebra of corporate domination. This is where we are all headed. And in this accelerated race to the bottom we will end up as serfs or slaves.

Rebel. Even if you fail, even if we all fail, we will have asserted against the corporate forces of exploitation and death our ultimate dignity as human beings. We will have defended what is sacred. Rebellion means steadfast defiance. It means resisting just as have Bradley Manning and Julian Assange, just as has Mumia Abu-Jamal, the radical journalist whom Cornel West, James Coneand I visited in prison last week in Frackville, Pa. It means refusing to succumb to fear. It means refusing to surrender, even if you find yourself, like Manning and Abu-Jamal, caged like an animal. It means saying no. To remain safe, to remain “innocent” in the eyes of the law in this moment in history is to be complicit in a monstrous evil. In his poem of resistance, “If We Must Die,” Claude McKay knew that the odds were stacked against African-Americans who resisted white supremacy. But he also knew that resistance to tyranny saves our souls. McKay wrote:

If we must die, let it not be like hogs

Hunted and penned in an inglorious spot,

While round us bark the mad and hungry dogs,

Making their mock at our accursèd lot.

If we must die, O let us nobly die

So that our precious blood may not be shed

In vain; then even the monsters we defy

Shall be constrained to honor us though dead!

O kinsmen! We must meet the common foe!

Though far outnumbered let us show us brave,

And for their thousand blows deal one death blow!

What though before us lies the open grave?

Like men we’ll face the murderous, cowardly pack,

Pressed to the wall, dying, but fighting back!


It is time to build radical mass movements that defy all formal centers of power and make concessions to none. It is time to employ the harsh language of open rebellion and class warfare. It is time to march to the beat of our own drum. The law historically has been a very imperfect tool for justice, as African-Americans know, but now it is exclusively the handmaiden of our corporate oppressors; now it is a mechanism of injustice. It was our corporate overlords who launched this war. Not us. Revolt will see us branded as criminals. Revolt will push us into the shadows. And yet, if we do not revolt we can no longer use the word “hope.” 

Herman Melville’s “Moby-Dick” grasps the dark soul of global capitalism. We are all aboard the doomed ship Pequod, a name connected to an Indian tribe eradicated by genocide, and Ahab is in charge. “All my means are sane,” Ahab says, “my motive and my object mad.” We are sailing on a maniacal voyage of self-destruction, and no one in a position of authority, even if he or she sees what lies ahead, is willing or able to stop it. Those on the Pequod who had a conscience, including Starbuck, did not have the courage to defy Ahab. The ship and its crew were doomed by habit, cowardice and hubris. Melville’s warning must become ours. Rise up or die.

The decomposition of American democracy

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On Thursday, Assistant Defense Secretary Michael Sheehan told the Senate Armed Services Committee that the war on terror would continue at least another 10 or 20 years. Alluding to last month’s lockdown of Boston, he said the president and the military would continue to assert “wartime” powers, unchecked by Congress or the courts, extending from “Boston to FATA [the Federally Administered Tribal Areas in Pakistan].” These asserted powers include the power to unilaterally launch new wars and the power to carry out assassinations, including of US citizens.
On the same day, Obama gave a press conference in which he bluntly defended his administration’s unconstitutional spying on the press, exposed by the revelation that the Justice Department had secretly seized the telephone records of Associated Press editors and reporters. As grounds for this patently illegal action, Obama stated that “national security” and other government interests trumped the Bill of Rights in this instance.
The Pentagon’s assertion of the power for the indefinite future to unilaterally deploy the US killing machine wherever the president sees fit—including within the US and without any oversight or “checks and balances”—amounts to an announcement of a semi-dictatorship in the US. Sheehan’s assertions are all the more remarkable for the fact that they encountered no serious opposition on the Senate Armed Services Committee or more broadly within the media or the political establishment.
Pursuant to military regulations already in place, the military is authorized to deploy itself within the US to suppress “civil disturbances” and “provide for the restoration of law and order in a specific State or locality.” The regulations define a civil disturbance as “[g]roup acts of violence and disorder prejudicial to public law and order.”
These regulations state that the military may be deployed within the US where “[d]uly constituted Federal, State, or local authorities are unable or decline to provide adequate protection…” In other words, the military expressly asserts the power to intervene with force and violence to put down what it has determined to be an unacceptable “civil disturbance,” including over the opposition of civilian federal, state or local agencies. The regulations even authorize military action in response to “large-scale, unexpected civil disturbances” where “prior authorization by the President is impossible.”
In his Senate testimony, Sheehan cited the Authorization for Use of Military Force (AUMF), passed in the aftermath of the September 11, 2001 attacks, as authority for the assertion of unchecked presidential and military power. As the World Socialist Web Site previouslyobserved, “The AUMF, presented at the time as a temporary and limited measure of self-defense against those who committed acts over 12 years ago, is well on its way to being transformed into something akin to the Reichstag Fire Decree or the Enabling Act—an all-purpose pseudo-legal rationalization for police state measures and unfettered executive power for the indefinite future.”
Just as the Pentagon’s assertion of unbridled executive power encountered no significant objections within the political establishment, no serious opposition has emerged to Obama’s embrace of the “balancing” theory of constitutional rights, according to which basic rights can be trampled on where “government interests” outweigh them. This view, which three decades ago would have been considered a fringe, ultra-right position, is now the virtually unanimous view in American courts, the political establishment, and academia.
It is worth recalling that the first Gulf War in February 1991 was preceded by a congressional debate and vote on whether the US should undertake military action in Iraq. By contrast, the US president now asserts the power for the indefinite future to launch wars based on his own secret determinations, without accountability to anyone, and without regard for the Constitution or international law.
The chief base of support for the abrogation of democratic rights and the lurch towards a police state lies in the financial aristocracy, i.e., the tiny layer of multimillionaires and billionaires who have made spectacular fortunes by means of speculation, theft, criminality and corruption. This layer has grown even richer since the eruption of the global economic crisis in 2008, subsidized to the tune of trillions of dollars by the state, while the working class has been devastated by mass unemployment and austerity policies.
Democratic rights and historic reforms mean nothing to these kleptomaniacs, who view the broad mass of the population with extreme fear and hostility. Jealous of its ill-gotten gains, this layer supports police-state measures to violently suppress social opposition.
Behind Obama, and next to the financial aristocracy, stands a privileged middle class layer—approximately the top 90th to 99th percentile. Some within this layer maintain minor differences with the financial aristocrats on lifestyle, race, culture and identity issues. However, they depend on the existing setup for their privileged status, income and respectable positions in corporate management, university departments, law firms, the entertainment industry, the trade unions, NGOs, the media and so forth. On board for imperialist war and the defense of the capitalist system in general, this layer is prepared to go along with a police state if the alternative is a revolutionary overthrow of the system by the working class.
The vast majority of the American population—the bottom 80 to 90 percent—is wholly excluded from the official political life of the country. Obama does not address himself to them. Their interests are not taken into account in any major political decision. They do not matter.
Ask an American worker in that bottom 80 to 90 percent whether the First Amendment contains mere suggestions conditioned on “government interests,” or whether it guarantees absolute, inalienable rights. Ask whether the US president and military should have unlimited and unchecked powers for the indefinite future, up to and including the power to violently suppress “civil disturbances” without regard for the Constitution or basic rights. Ask whether the president should be able to secretly order the assassination of US citizens. Ask, and you are highly likely to get very different answers than if you ask a Supreme Court justice, a member of Congress, a “liberal” newspaper columnist or the president (who is purportedly a one-time “constitutional law lecturer” at a top US law school).
Analyzing the theft of the 2000 elections, the World Socialist Web Site observed at the time that there remained no significant constituency for the defense of democratic rights within the American ruling class or its political establishment. The WSWS predicted a rapid shift towards authoritarian forms of rule and reiterated these warnings in the period following the September 11, 2001 attacks.
It is now necessary to issue a new warning. More than a decade has passed since the launch of the so-called “war on terror.” The process of disintegration of American democracy has accelerated and advanced sharply, in particular under the Obama administration. Now looming on the horizon is an American police state.
The only social force capable of halting and reversing the drive toward dictatorship is the working class—the bottom 80 to 90 percent which is everywhere locked out of the gated community of official politics. Here is where a deep-seated commitment to democratic rights resides. But to realize this commitment, the working class must develop its own organizations, program and leadership, independent of the bourgeois political establishment and the rotten milieu of its “left” apologists. The working class must take up the fight for a workers’ government, the confiscation of the fortunes of the financial aristocrats and nationalization of the banks and corporations, and the termination of imperialist war.
The ruling class is urgently strengthening the repressive apparatus of the state. The working class must urgently build the parties of the International Committee of the Fourth International.

Popular Resistance Is Percolating Across the Country -- Inspiring Activism That the Corporate Media Always Ignores

The fight against plutocracy, concentrated wealth and corporatism is decentralized, creative and growing.

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Every week we are inspired by the many people throughout the country who are doing excellent work to challenge the power structure and put forward a new path for the country. The popular resistance to plutocracy, concentrated wealth and corporatism is decentralized, creative and growing.
One growing series of protests has been the “Moral Monday” demonstrations in North Carolina.  They do not have ‘one demand’ but rather are challenging the systemic corruption, undermining of democracy and misdirection of a state government that puts human needs second to corporate profits – which they have dubbed ‘Robin Hood in Reverse.’  This week 49 of 200 protesters inside the capitol were arrested singing, chanting and echoing many of the same concerns that demonstrators have for the past three Mondays.  Last week there were 30 arrests, the week before 17.  Among those arrested was an 83 year old retired minister, Vernon Tyson, who was merely a spectator, but he gave a great interview cheering on the protests after his release. And, a group of historians were among those arrested who put these protests in the context of US history.
Another courageous protest involved seven undocumented immigrants who blocked the Broadview Detention Center where immigrants are being incarcerated.  They blocked the doors to the detention facility, linking arms together using pipes, chains, and locks. They were protesting the record-high deportations under President Obama, and the lack of leadership from Illinois representatives to call for a suspension of deportations. On the West coast, the always creative Backbone Campaign supported allied faith communities with a giant banner lift over the private for-profit immigration detention center asking “Who Would Jesus Deport?” and an inflatable lady liberty exposing the unjust policies that break up families.
There was a recent victory for Seattle teachers and students that resulted from their citywide protests against standardized testing. The school district announced that testing in the high schools would not occur next year.  The teachers said they will keep protesting until the tests are banned from lower grades as well.
We hope the Chicago teachers, who won a major battle with Mayor Rahm Emanuel earlier this year when they went out on strike, have great success this weekend when three days of marches are held against the mass school closings in Chicago.  The teachers union has developed a great organizing strategy that unites teachers with students, parents and communities.  This battle is one of many across the country to stop the thinly veiled corporatization of education.
In another education protest, the students @FreeCooperUnion continue to occupy the office of the president after one week.  They are painting the walls black until he agrees to step down, and are highlighting his $750,000 annual salary.  They are protesting a plan to begin to charge tuition at the university; this plan will not affect these students, but future students who attend Cooper Union.
The heart of the conflict faced in the United States is the inequity of an unfair economy supported by a corrupt two party system.  This week there was a very creative protest in New York City against the world’s richest man, Carlos Slim of Mexico.  He’s made his billions with the help of government allowing a monopoly on phone service resulting in Slim gouging the public.  Now he gives a small percentage of that wealth back in philanthropy and people applaud him.  But, the protesters were very effective, laughing out loud whenever he spoke. They responded when someone asked “Why is everyone laughing?” with “Because Slim’s philanthropy is a joke!” and followed with mocking kazoos.
In contrast to the world’s wealthiest was the Poor People’s Campaign which marched from Baltimore to Washington, DC ending at Freedom Plaza.  The march occurred on the anniversary of Dr. Martin Luther King, Jr.’s campaign and raised issues of poverty, police violence, unfair economy and non-responsive government.  Another march was announced in Pennsylvania from Philadelphia to Harrisburg from May 25 to June 3 to stop spending on prison construction and instead invest in building communities.  Also, from Philadelphia the ‘Operation Green Jobs’ March from Philadelphia to Washington, DC will begin on May 18 and is organized by the Poor People’s Economic and Human Rights Campaign.
A campaign that is growing every week is the fast food worker strikes. The largest fast food walk out was held in Detroit last week, even the scabs walked out, and this week the strikes spread to their fifth city, Milwaukee, WI.  It is great to see these workers, who no doubt saw themselves as powerless, standing up and demanding fairness.  If you eat at fast food restaurants, this would be a good time to stop, and let them know why – you support the workers who are demanding a living wage.
US Empire and imperialism continue to cause protest. Obama’s Asia Pivot, moving 60% of the US Navy to the Asian Pacific is causing a lot of distress.  On Jeju Island people are fighting for their survival against a massive Navy base.  Jeju is the “Peace Island” that was harshly abused during the US occupation of South Korea after World War II before the Korean War.  And, South Koreans, who regularly protest against the US military, are protesting the US war games that are practicing dropping nuclear bombs on North Korea and invading it.
Protests are mounting in the United States against the abusive Guantanamo Bay prison where more than 100 of the 166 prisoners at Guantanamo are participating in a hunger strike and two-dozen are being brutally force fed. These prisoners have been held without trial for over 10 years, and even though 88 have been approved to leave, they remain.  The Green Shadow Cabinet came out with a statement describing how Obama could close the prison (and why Congress is not an excuse) and what you can do on the 100th day of the hunger strike this Friday. Show solidarity with these prisoners who are being abused by the US government.
Diane Wilson, a shrimper from the Gulf Coast who works with CODE PINK and Veterans for Peace, is on her 15th day of an open-ended solidarity hunger strike in Washington, DC. She explains why she is taking the extreme step of a hunger strike to support the Guantanamo prisoners. And S. Brian Willson is joining Diane in hunger strike.
Another protest related to US Empire occurred in Oak Ridge, TN where Transform Now Plowshares activists protested nuclear weapons by cutting through four chain-link fences and spray-painting biblical messages of nonviolence on a building that warehouses an estimated 400 tons of highly enriched uranium, the radioactive material used to fuel nuclear weaponry. This week an 83 year old nun, Sister Megan Rice, and two other activists were found guilty of damaging government property.  As the jury left the courtroom the people in the courtroom sang to them “Love, love, love, love. People, we are made for love.”  Sentencing is several months away and they face a potential 30 years in prison.
Environmental protests are boiling up throughout the United States.  When President Obama came to New York for a fundraiser (where he raised $3 million), protesters greeted him with signs calling for him to “End the War on Mother Earth” and opposing the KXL pipeline.
Protesters from the Appalachian Mountains came to the EPA in Washington DC to protest polluted water caused by Mountaintop removal for coal.  The protesters displayed the dirty, opaque water in jars in front of the EPA.  And Climate Justice activists from CoalIsStupid.org blocked a freighter delivering coal in Boston with two men on a lobster boat on May 15th.
But more and more Americans are realizing that while we protest the extraction of oil, gas, uranium and coal, the reality is that the root of the problem is in the American Way of Life (AWOL).  One activist from Portland made the point that the Tar Sands starts in our driveways and we need to change the AWOL in order to truly combat it.  We agree that our strategy has two prongs: protest and build i.e. Stop the Machine and Create a New World.
In addition to how much energy we each use, we need to look at where our food comes from. An Occupy group in Berkeley, Occupy the Farm, made that point this week when they took over University of California land to grow farm for the community locally.
Another area where we are seeing continued growth in the movement is in thinking through how we do our work and in developing strategy to achieve our goals.  We published a live streamer “Code of Ethics” developed by people who work in the citizen’s media. Note the high ethics and cooperative approach they take to getting the media out.
Many are thinking about strategy to make the movement more effective.  Gar Alperovitz, a political economist who has been writing about alternatives to big finance capitalism in the United States has a new book out focused on strategy, “What then Must We Do,” and we published a review of the book by Sam Pizzigati of Inequality.org entitled:  A Promising Path for Pummeling Plutocracy.
Upcoming actions:
May 17th, Support the Guantanamo hunger strikers on the 100th Day of their hunger strike with phone calls and tweets to the White House and protests in DC, NY, Chicago and other cities.
May 18th, ‘Operation Green Jobs’ March from Philadelphia to Washington, DC organized by the Poor People’s Economic and Human Rights Campaign.
May 18th to 23rd the Home Defenders League Week of Action against the banks and foreclosures in Washington, DC.
May 22nd Stop the Frack Attack People’s Forum in Washington, DC.
May 25th to June 3rd   March from Philadelphia to Harrisburg against prison spending.
June 1st,  Get on the Bus For Bradley Court Martial Trial  with buses leaving from Baltimore, MD, Washington DC, New York City and Willimantic, CT.
June 14th to 16th Trade Justice Action Camp in Bellingham, WA by the Backbone Campaign
June 24th to 29th is the beginning of “Fearless Summer” that starts “an epic summer of actions.
You can order or print OccuCards to bring with you to these actions. There are cards for all of the issues being protested above and new cards are being created

Washington Signals Dollar Deep Concerns

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Over the past month there has been a statistically improbable concurrence of events that can only be explained as a conspiracy to protect the dollar from the Federal Reserve’s policy of Quantitative Easing (QE).
Quantitative Easing is the term given to the Federal Reserve’s policy of printing 1,000 billion new dollars annually in order to finance the US budget deficit by purchasing US Treasury bonds and to keep the prices high of debt-related derivatives on the “banks too big to fail” (BTBF) balance sheets by purchasing mortgage-backed derivatives. Without QE, interest rates would be much higher, and values on the banks’ balance sheets would be much lower.
Quantitative Easing has been underway since December 2008. During these 54 months, the Federal Reserve has created several trillion new dollars with which the Fed has monetized the same amount of debt.
One result of this policy is that most real US interest rates are negative. Another result is that the supply of dollars has outstripped the world’s demand for dollars.
These two results are the reason that the Federal Reserve’s policy of printing money with which to purchase Treasury bonds and mortgage backed derivatives threatens the dollar’s exchange value and, thus, the dollar’s role as world reserve currency.
To be the world reserve currency means that the dollar can be used to pay any and every country’s oil bills and trade deficit. The dollar is the medium of international payment.
This is very helpful to the US and is the main source of US power. Because the dollar is the reserve currency, the US can cover its import costs and pay for its cost of operation simply by creating its own paper money.
If the dollar were not the reserve currency, Washington would not be able to finance its wars or continue to run large trade and budget deficits. Therefore, protecting the exchange value of the dollar is Washington’s prime concern if it is to remain a superpower.
The threats to the dollar are alternative monies–currencies that are not being created in enormous quantities, gold and silver, and Bitcoins, a digital currency.
The Bitcoin threat was eliminated on May 17 when the Gestapo Department of Homeland Security seized Bitcoin’s accounts. The excuse was that Bitcoin had failed to register in keeping with the US Treasury’s anti-money laundering requirements.
Washington has stifled the threat from other currencies by convincing other large currencies to out-print the dollar. Japan has complied, and the European Central Bank, though somewhat constrained by Germany, has entered the printing mode in order to bail out the private banks endangered by the “sovereign debt crisis.”
That leaves gold and silver. The enormous increase in the prices of gold and silver over the last decade convinced Washington that there are a number of miscreants who do not trust the dollar and whose numbers must not be permitted to increase.
The price of gold rose from $272 an ounce in December 2000 to $1,917.50 on August 23, 2011. The financial gangsters who own and run America panicked. With the price of the dollar collapsing in relation to historical real money, how could the dollar’s exchange rate to other currencies be valid? If the dollar’s exchange value came under attack, the Federal Reserve would have to stop printing and would lose control over interest rates.
The bond and stock market bubbles would pop, and the interest payments on the federal debt would explode, leaving Washington even more indebted and unable to finance its wars, police state, and bankster bailouts.
Something had to be done about the rising price of gold and silver.
There are two bullion markets. One is a paper market in New York, Comex, where paper claims to gold are traded. The other is the physical market where personal possession is taken of the metal–coin shops, bullion dealers, jewelry stores.
The way the banksters have it set up, the price of bullion is not set in the markets in which people actually take possession of the metals. The price is set in the paper market where speculators gamble.
This bifurcated market gave the Federal Reserve the ability to protect the dollar from its printing press.
On Friday, April 12, 2013, short sales of gold hit the New York market in an amount estimated to have been somewhere between 124 and 400 tons of gold. This enormous and unprecedented sale implies an illegal conspiracy of sellers intent on rigging the market or action by the Federal Reserve through its agents, the BTBF that are the bullion banks.
The enormous sales of naked shorts drove down the gold price, triggering stop-loss orders and margin calls. The attack continued on Monday, April 15, and has continued since.
Before going further, note that there are position limits imposed on the number of contracts that traders can sell at one time. The 124 tons figure would have required 14 traders with no open interest on the exchange to sell all together in the same few minutes 40,000 futures contracts. The likelihood of so many traders deciding to short at the same moment at the maximum permitted is not believable. This was an attack ordered by the Federal Reserve, which is why there is no investigation of the illegality.
Note also that no seller that wanted out of a position would give himself a low price by dumping an enormous amount all at once unless the goal was not profit but to smash the bullion price.
Since the April 12-15 attack on the gold price, subsequent attacks have occurred at 2pm Hong Kong time and 2 am New York time. At this time activity is light, waiting on London to begin operating. As William S.Kaye has observed, no entity concerned about profits would choose this time to sell 20,000 to 30,000 futures contracts, but this is what has been happening.
Who can be unconcerned with losing money in this way? Only a central bank that can print it.
Now we come to the physical market where people take possession of bullion instead of betting on paper instruments. Look at this chart from ZeroHedge. http://www.zerohedge.com/news/2013-05-16/gold-demand-one-chart-physical-vs-etf The demand for physical possession is high, despite the assault on gold that began in 2011, but as the price is set in the non-real paper market, orchestrated short sales, as in the current quarter of 2013, can drive down the price regardless of the fact that the actual demand for gold and silver cannot be met.
While the corrupt Western financial press urges people to abandon bullion, everyone is trying to purchase more, and the premiums above the spot price have risen. Around the world there is a shortage of gold and silver in the forms, such as one-ounce coins and ten-ounce bars, that individuals demand.
That the decline in gold and silver prices is an orchestration is apparent from the fact that the demand for bullion in the physical market has increased while naked short sales in the paper market imply a flight from bullion.
What does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse.
It remains to be seen whether Washington can prevail over the world demand for gold and silver. Can the dollar remain supreme when offshoring has deprived the US of the ability to cover its imports with exports? Can the dollar remain supreme when the Federal reserve is creating 1,000 billion new ones each year, while the BRICS, China and Japan, China and Australia, and China and Russia are making deals to settle their trade balances without the use of the dollar?
If the consumption-based US economy deprived of consumer income by jobs offshoring takes a further dip down in the third or fourth quarter–a downturn that cannot be masked by phony statistical releases–the federal deficit will rise. What will be the effect on the dollar if the Federal Reserve has to increase its Quantitative Easing?
A perfect storm has been prepared for America. Real interest rates are negative, but debt and money are being created hand over foot. The dollar’s demise awaits the world’s decision how to get out of it. The Federal Reserve can print dollars with which to keep the bond and stock markets high, but the Federal Reserve cannot print foreign currencies with which to keep the dollar afloat.
When the dollar goes, Washington’s power goes, which is why the bullion market is rigged. Protect the power. That is the agenda. Is it another Washington over-reach?
Bitcoin Note: On May 16, PCWorld reported: “The seizure of funds of the largest bitcoin exchange, Mt. Gox, was triggered by an alleged failure of the company to comply with U.S. financial regulations, according to a federal court document. The U.S. District Court in Maryland on Tuesday ordered the seizure of Mt. Gox’s funds, which were in an account with Dwolla, a payments company that transferred money from U.S. citizens to Mt. Gox for buying and selling the virtual currency bitcoin.”
Reports subsequent to my column suggest that instead of funds being seized, a money transfer mechanism was shut down. Whatever happened, the government has demonstrated that it can disable or destroy Bitcoin at will. Bitcoin might be tolerated unless it becomes widely used. If the government regards Bitcoin as a refuge from the dollar, it can simply have its agents buy up the Bitcoins, driving the price skyhigh, and then dump the purchases all at once, just as tons of gold shorts were dumped on the gold market.
Bitcoin showed its vulnerability in April when, according to news reports, someone gave away $13,627 worth of Bitcoins, and Bitcoin values crashed from $265 to $105. Some people who watch this market concluded that the exercise was a covert central bank stress test.
The fact that I reported on Bitcoin does not mean that I oppose Bitcoin. The point of my article is to demonstrate that the government will take all steps to protect the dollar from Quantitative Easing.