Was Jekyll Island a conspiracy or is it just made to look that way? Inside the Fed.

 10 dollar 1st National Bank Brainerd MN 1881

Martin Armstrong is definitely one of the foremost experts on currency through the history of time.

The Federal Reserve: Part I “The Creature from Jekyll Island”
This is like asking to criticize the Bible since so many people believe every word written in this book. Well here it goes. Thousands of hate e-mails will flood in, but conspiracy myths be damned, they are a cover-up for the real culprit – Congress. Some people hate central banks because of this book, they believe Andrew Jackson was a hero and are oblivious to the fact that he set off a round of wildcat banking that ended in yet another sovereign debt default among the states who then tried to bailout their own banks.

Well, fiction be damned. “The Creature From Jekyll Island” is amateurish at best and another total misrepresentation of the facts and events. It is very one-sided and ignores the real political manipulation of the Fed by the government for their own self-interest. It promotes the very same Marxist/socialistic beliefs from the Progressive Era that gave us the New Deal and robbed every one of their future: altering the family structure in the West forever.

The original design of the Fed was to be private, for banks were to contribute to fund their own bailouts, as JP Morgan had done taking the lead during the Panic of 1907. It was not to be a government bailout operation. The United States had no central bank at that time. There was never any intent to create the institution as it exists today: the original design was altered dramatically by lawyers who never understood the madness of their own minds in their pursuit of power as politicians.

We must also look at the context of the era from which Griffin draws his ideas. We must be EXTREMELY careful for much of what he said is sheer propaganda, directed at the bankers to support the rise of Marxism – the new Progressive Movement. This movement finally succeeded with the New Deal and the Great Depression focusing blame at bankers, when in fact Europe collapsed into a Sovereign Debt Crisis in 1931, which sent the dollar soaring and a capital concentration from around the world made the 1929 high just as the Nikkei peaked in Japan during 1989. To look at this era we absolutely MUST step back and look at the whole situation dispassionately. If we do not put this conspiracy aside, we will never understand what really needs to be reformed.
Wilson-Morgan

Before Woodrow Wilson became president, he was the head of Princeton University, and uttered praise for Morgan and his effort to save the banking system during the Panic of 1907. The Marxists were responsible were turning the bankers to evil in an attempt to eliminate freedom. After all, this was the rising sentiment cheering Marxism and demonizing capital focus on the bankers. This was their agenda that we are still plagued by to this day. This book championed the entire Marxist argument without realizing whose side he took.

We must be EXTREMELY careful here for to advocate the end of central banking is to advocate communism. Do not forget that 1917 saw the Russian Revolution, and in 1918 the Communist Revolution in Germany that produced their famous hyperinflation. Be careful what you wish for, if it became true you would hand more power to government, and they would love that to happen. Their goes all your freedom and with electronic money, you will be converted to economic slaves for the state, not so different from just living the dream in the Matrix. Ask yourself, do you want the truth or do you prefer to live the dream? Their dream by the way, not yours.

The difference between the bankers of Morgan’s day and today is very different. The crisis unfolded because of the classic mismatch between deposits, which are on a demand basis, and loans, which are long-term like mortgages. When the demands to withdraw exceed available cash (fractional banking), the bank fails. Today, the bankers are traders and have moved to transactional banking to stay liquid abandoning the old days of Morgan when banks were relationship oriented and did not resell the loans they made acting more like brokers.

JPMorgan Chase CEO, Jamie Dimon, told Congress that the bank’s massive loss can be blamed on insufficient risk controls and a failure by traders to understand the bets they were placing. He actually stated that he failed in his management yet retained the job for he was really fully on-board. This is not relationship banking and it is entirely different from the days of J.P. Morgan view of banking. Dimon lobbied Congress to rollback Dodd-Frank so they could continue to trade maintaining their transaction banking model they used to get Congress to repeal Glass-Steagall by the Clinton Administration and now Hillary begs for money from the same people and wants to run the nation as SHE DID before (like Cheney). Thanks to the Clintons, who are always available to the highest bidder, when the banks blow up on trading again, this will bite Congress in the ass for the 2016 elections. I hope that if we understand the problem, we will make the right solution this time if we examine the truth.

Yes, the Fed began effectively as private consortium of banks to accomplish what J.P. Morgan did to rescue the banking system during the Panic of 1907 that saved the day. The banking crisis of that era was not due to people blowing up with their trading as in Transactional Banking today. The Panic of 1907 was the classic mismatch between demand and loans – the fractional banking element.

Morgan-JPA period of a temporary cash shortage burst forth during the Panic of 1907. John Pierpont Morgan (1837-1913) saved the day despite receiving criticism for ignoring his great patriotism and contribution to the country. The Panic began when there was an attempt to manipulate the market in United Copper Company, which was a short squeeze that backfired. This was the catalyst, not the cause. The spark ignited the Panic that took place. They borrowed money to buy stock to create the squeeze from the Knickerbocker Trust and suddenly they could not pay back their loans, bringing the bank into failure. J.P. Morgan gathered his associates to examine the books of the Knickerbocker Trust but found it was insolvent and decided not to intervene to stop the run. When it became clear the Knickerbocker Trust would fail, the run spread to other banks and a contagion grew. The Trust Company of America asked Morgan for help. Morgan now brought in First National Bank and National City Bank of New York (later Citi Bank), and the US Secretary of the Treasury. Morgan had a quick audit of the bank and declared that this was where to defend. As the run began, Morgan worked with his associates to sell the assets of the bank to free up cash for the depositors. The bank survived the close of business that day for this is always a CONFIDENCE game.NYSE-1908Morgan knew that this collapse in CONFIDENCE would not end by just saving the Trust Company of America. Morgan now summoned the heads of various banks in New York and kept them until they agreed to provide loans of $8.25 million. Morgan convinced the Treasury to deposit $25 million in NY banks. John D. Rockefeller, the wealthiest man in America, deposited $10 million with City and called the Associated Press to announce his pledge to help the NY banks. Nonetheless, the New York banks then, as now, proved to be their worst enemy. Despite the efforts of Morgan to create this infusion, they were reluctant to lend any money for short-term stock trading. The stock market crashed as a result. By 1:30 pm on October 24th, the president of the NYSE went to tell Morgan the exchange would close early. Morgan was livid. He understood that this would reinforce the Panic and he drew the line and would not allow it. Morgan warned that if the NYSE closed early, it would be catastrophic to say the least. Once again, he summoned the bankers who arrived by about 2:00 pm and Morgan pretty much yelled at them, warning that as many as 50 stock brokerage firms would fail unless they could raise $25 million within the next 10 minutes! By 2:16 pm, 14 banks pledged $23.6 million to keep the stock exchange alive. The money reached the exchange by 2:30 pm, to finish trading at 3:00 pm. In reality, they only needed to reach $19 million. Despite his hatred for the press who seldom treated him fairly, Morgan gave a rare comment to the press, discussing the matter at hand.Panic-1907-1

The next day, the NYSE needed more money, but this time Morgan could only raise $9.7 million. Morgan directed the NYSE not to use the money for margin sales or short selling. The exchange made it to the close. Morgan knew he had to turn the minds of the people and to restore their critical CONFIDENCE to stop the Panic. Morgan than formed two committees: one for persuading the clergy to preach calm to their congregations on Sunday, and the other to sell the idea of claim to the press. Morgan was desperately trying to hold the nation together. Unknown even to his associates, the City of New York could not raise enough money through its bond issue and it informed Morgan that it needed $20 million by November 1st, 1907, or the city would go into bankruptcy. Morgan himself contracted to purchase $30 million in New York City bonds.

On November 2nd, 1907, one of the largest stock exchange brokers, Moore & Schley, was heavily in debt using the Tennessee Coal, Iron & Railroad Co. stock as collateral. The thinly traded stock was under pressure. Their creditors would now surely call their loans. Morgan called another emergency meeting for a proposal put forth that US Steel Corp, would acquire the stock in bulk. Yet another crisis was looming. Runs were now likely to hit two banks on Monday. Morgan summoned 120 banks and told them he would not proceed with the US Steel deal unless they supported the banks.

Morgan proceeded to lock them in his library and told them they have to come up with $25 million to save the banks. It took almost 2 hours. Morgan finally convinced them that they had to bailout the banks to save their own skins. They signed the agreement, and he unlocked the doors and let them leave.

Morgan was saving the nation again, single-handedly. He then turned back to save the NYSE. He knew the problem would be the Marxist inspired Antitrust Laws (Sherman Antitrust Act), and the crusading Marxist/Progressive President Teddy Roosevelt (1858-1919). Breaking up companies that he believed were monopolies became the primary focus of Roosevelt’s administration. To save the day, he would have to see that the Antitrust Laws must yield.

Two men thus traveled to the White House to implore Roosevelt to set aside his Antitrust Laws to save the nation. As typical, Roosevelt’s secretary refused to let them in to discuss the problem. The two men, Frick and Gary of US Steel turned to James Garfield who was Secretary of the Interior at that time and son former President Garfield. They pleaded with him to go to the president directly. Garfield had convinced Roosevelt to review the proposal and Roosevelt was for the first time forced in to a corner. He had to realize a collapse of the NYSE would take place if he did not yield in his anti-corporate beliefs. Roosevelt later lamented:

“It was necessary for us to decide on the instant before the Stock Exchange opened, for the situation in New York was such that any hour might be vital. I do not believe that anyone could justly criticize me for saying that I would not feel like objecting to the purchase under those circumstances.”

Following the near catastrophic financial disaster known as the Panic of 1907, the movement for banking reform picked up steam among Wall Street bankers, Republicans, and a few eastern Democrats. However, much of the country was still distrustful of bankers and of banking in general, especially after Panic of 1907. After two decades of minority status, Democrats regained control of Congress in 1910 and were able to block several Republican attempts at reform, even though they recognized the need for some kind of currency and banking changes. As always, it was more important to further political party power than actually do the right thing for the nation.

In 1912, President Woodrow Wilson (1856–1924) won the Democratic Party’s nomination for president, and in his populist-friendly acceptance speech, he warned against the “money trusts,” and advised that a concentration of the control of credit may at any time become infinitely dangerous to free enterprise. It was the anti-Wall Street agenda.

Behind the scenes, the Panic of 1907 revealed the weak underbelly to the American financial system. After the scare that the Panic of 1907 created among the bankers, they demanded reform. The following year, Congress enacted the Aldrich-Vreeland Act of 1908 establishing the National Monetary Commission forming a study group of experts to come up with a nonpartisan solution. They viewed the lack of a central bank in America, in contrast to Europe, as the threat to economic stability among the bankers as filled by J.P. Morgan during that crisis.

A National Monetary Commission formed and the Republican leader in the Senate, Senator Nelson Aldrich (1841-1915) took charge. Aldrich was a brilliant man who was passionate about revising the American financial system. The Commission went to Europe and was duly impressed at how well they believed the central banks in Britain and Germany handled the stabilization of the overall economy and the promotion of international trade. The Commission issued some 30 reports between 1909 and 1912, which preserved a wonderful detailed resource surveying of banking systems of the late 19th and early 20th centuries at that time. These reports examined also the Canadian banking history in addition to the banking and currency systems of Belgium, England, France, Germany, Italy, Mexico, Russia, Switzerland, and other nations. They also provided an excellent review of domestic U.S. financial laws federally as well as state banking statutes. These reports contain essays of contemporary specialists as well as a host of data in tables, charts, graphs, and facsimiles of banking forms and documents. There are also transcripts of relevant political speeches, interviews, and various hearings.

In 1910, Aldrich met with Frank Vanderlip of National City Bank (Citibank), Henry Davison of Morgan Bank, and Paul Warburg of the Kuhn, Loeb Investment House secretly. They met at Jekyll Island, a resort island off the coast of Georgia, to discuss and formulate banking reform, including plans for a form of central banking that would accomplish the role of J.P. Morgan played during the Panic of 1907. They held the meeting in secret because the participants knew that the House of Representatives would reject any plan they generated given the intense hatred of the bankers and Wall Street in the festering Marxist/Progressive atmosphere.

Unfortunately, because this meeting was in secret involving Wall Street, the whole Jekyll Island affair remains cloaked in conspiracy theories. Nevertheless, this intense bias and conspiracy theory has always overestimated both the purpose and significance of the meeting in light of the extensive work of the National Monetary Commission. Reform was essential. However, those two words – political economy – could not be divorced.

Upon his return, Aldrich’s investigation led to his plan in 1912 to bring central banking to the United States with all its promises of financial stability and expanded international roles in trade and money flow. Aldrich knew the dangers of American politics and insisted that control by impartial experts was essential. Placing bankers at the helm rather than politicians was really the only way to proceed. The two words, political economy, had to be divorced in his mind. There was to be absolutely NO political meddling in finance as had been the case under Andrew Jackson (1757-1845). Aldrich asserted that a central bank was essential yet the diversity and size of the United States presented a distinctly different twist to the European situation.

Aldrich concluded that Europe had many countries with diverse economic models. He realized that while the United States needed a central bank, paradoxically it also required simultaneous decentralization to cope with both the economy and the self-defeating American political system. Aldrich appreciated the fact that local politicians and bankers would attack the central banks, as they had the First and Second Bank of the United States. Aldrich introduced his brilliant plan in 62nd and 63rd Congresses (1912 and 1913). As always, the political winds changed and the Democrats in 1912 won control of both of the House and the Senate as well as the White House.

The Aldrich Plan proposed a system of fifteen regional central banks, called National Reserve Associations, whose actions were to be coordinated by a national board of commercial bankers to do NO more than be a lender of last resort as J.P. Morgan had acted during the Panic of 1907. The National Reserve Association would make emergency loans to member banks, they would create money to provide an elastic currency that enabled equal exchanges for demand deposits, and would act as a fiscal agent for the federal government. Congress ended up rejecting Aldrich’s idea, which was defeated in the House as politics superseded the national good. However, his outline did become a model for a future implemented bill. The problem with the Aldrich Plan was that it gave bankers control over the regional banks, a prospect that did not sit well with the populist Democratic Party or with President Wilson. The Democrats and Wilson were fearful that the reforms would grant more control of the financial system to bankers and the politicians could not meddle as they saw fit. The history of the First and Second Bank of the United States was repeating. The political economy cannot be divorced.

The need for a central bank was really far too great and even the Democrats recognized it behind closed doors. Eventually, the Federal Reserve Act passed 43-25 and this altered the actual role of currency. MONEY was now becoming “elastic” for the Federal Reserve would issue currency notes thereby creating a money supply that increases and decreases as the economy expands and shrinks. This new “Elastic Money” would become an essential function of the Federal Reserve System in its early days, where it would regulate the amount of money supply permitted to be in circulation. This was essential due to the wild swings during the 19th century in the economy caused by the chance discoveries of gold in California, Alaska, and silver that disrupted the economy and arbitrarily increased the money supply with nobody in charge.

Effectively, the 20th century saw unrestrained printing of paper dollars caused by political fiscal mismanagement whereas the 19th century was plagued by chance discoveries of precious metals that had the same effects. The California Gold Rush injected a huge wave of inflation because the sheer supply of money increased sharply. The same argument that paper money has caused inflation during the 20th century applied to gold during the 19th century.

Essentially, this new ability to have an Elastic Money Supply became a perceived necessity to ensure that the reserves held in trust by the government were adequate to back the amount of coins and currency permitted to circulate. It was a nonpartisan decision to deal with shifts in the economy whereas politicians could not be responsible no matter what. The Federal Reserve would now prevent excessive conditions that would lead the country into financial chaos and ultimate ruin as nearly took place during the Panic of 1907. The Fed would expand the money supply during periods of economic decline and contract the money supply during economic booms. Of course, the politicians would later seize control of the Fed and ensure it would be party time all the time.

Optimal monetary policy is supposed to facilitate exchange within the economy to avoid aggregate shocks that affect individuals and economic sectors (industries) unequally. Exchange may be conducted using either bank deposits that some see as “inside money” or “fiat” currency, which some refer to as “outside money” that is created by leverage or fractional banking. A central monetary authority both controls the stock of “outside money” and pursues an interest rate policy that is intended to affect the rate at which private banks create “inside money”. The modern context views it as the optimal monetary policy, requiring management of both interest rates and the quantity of outside money. By controlling interest rates the monetary authority can affect the price level in the short-run and adjust households’ consumption, so they believe, and therefore this provides insurance against unfavorable aggregate shocks to the money supply tempering the boom-bust cycle.

However, the feasibility of manipulating the interest rate policy and the quantity of money, as we will see, is purely a fantasy in the new modern global economy. These concepts quickly proved to be far too parochial. The global economy was about to receive a major shock that would turn it on its head – World War I which began July 28th, 1914 and lasted until November 11th, 1918. The war involved more than 70 million military personnel, including 60 million Europeans, and a loss of more than 9 million soldiers killed in combat. The assassination of Archduke Franz Ferdinand of Austria on June 28th, 1914 was the excuse for the war, but in reality, it was the culmination of centuries of contests for imperialistic power in Europe. Ferdinand was the heir to the Austria- Hungarian Empire throne, which was the remnant of the Holy Roman Empire. This allowed the hatred between many rivals bringing into the conflict the German Empire, Ottoman Empire, Russian Empire, British Empire, French Empire, and Italy. In the end, the Financial Capital of Europe, which migrated from Babylon to Athens, then Rome, Byzantine, Northern Italy centered in Florence/Genoa/Venice, to Amsterdam, and then to London in 1689, now migrated to the United States beginning in 1914.

With World War I, the American politicians began to alter the Fed. Its original design was brilliant. To stimulate the economy and suppress unemployment, they would buy corporate paper. With World War I, Congress ordered the Fed to support the US debt. They would not return to the original design of the Fed set out in 1913.

With the Great Depression, the major banking collapse took place largely due to the Sovereign Debt Default of 1931. Banks failed as money vanished from circulation collapsing the velocity. Asset values collapsed and land, which had sold for $2.50 an acre during the mid-1800s, fell to 10 cents. No degree of limiting fractional banking would save the day when the bond market collapses. We see the huge spike in foreign bonds listed in 1928 on the NYSE, and the collapse as defaults began to rage from 1931 onward.

Franklin Roosevelt, every much a socialist as Teddy even though a Democrat, altered the Fed usurping all power to Washington. The branches remained, but they no longer served the purpose of managing the local economy. It was now one-size-fits-all. It would be Congress who appoints the directors and Fed Chairman, while the technical ownership of a rescue fund for bankers is only there in name, not reality. Goldman Sachs switched tactics and installed its people in the Treasury not for banking, but for trading. They were Obama’s biggest contributors, but make no mistake: Goldman Sachs is a trader, not a bank with branches taking deposits from little old ladies.

Today, the Fed is nothing like its original intended design. This alter was not caused by bankers, but by politicians. Now, it has the authority to take over anything it thinks is too big to fail, which is not limited to banks. It could take over Google, McDonalds, or anything as long as it states it would harm the economy.

We need a central bank, but not one manipulated by government. There should be a simple insurance fund for banks as originally intended without using taxpayers’ money. It should not be restricted to buying government debt. Instead, it should protect jobs by its original focus to buy corporate paper in times of stress. We must look closely at the Fed to see that its manipulation by Congress for political reasons. It was supposed to support government bonds during World War II, but it took until 1951 to rescind.

The Fed is not evil, but rather it is the manipulation of the Fed by politicians. It is use to blame for economy booms and busts while Congress avoids all responsibility. Now, the Fed is stuck in a very difficult situation. It is charges with Keyensian/Marxist ideas of manipulating the economy when its original design was only to deal with a banking crisis.

Tomorrow we will look at the risks we now face from the REALITY of political manipulation of the Fed.

The Federal Reserve: Part II

The amount of propaganda against the Federal Reserve is incredible. What we must keep in mind is that its original design, which lasted for about one year, was brilliant. The classic banking model, borrowing from depositors on a demand basis and lending long-term making a profit on the spread in interest rates, such as business loans and mortgages. This was Relationship Banking not today’s Transactional Banking model.

Yes, this was fractional banking insofar as about 8% of the money needed to remain free to service demand requirements. The crisis comes during an economic contraction when people run to the bank for a loss of confidence and demand to withdraw their funds. This results in the value of cash rising in purchasing power, compared to assets, so asset values collapse.

The idea of “elastic money” was to increase the supply of cash during such a crisis to meet the demand for withdrawals and that would offset the need to sell assets by calling in long-term debts. By increasing the money supply on a temporary basis, the Fed could offset the contraction in theory smoothing out the business cycle.

This was a brilliant scheme. However, it has been Congress, and not the Fed, who has corrupted that mechanism. The Fed was owned technically by the banks as this was supposed to save the taxpayer money. The banks should contribute to their own bailout fund.

Furthermore, the Fed’s design was also about buying in corporate paper when banks would not lend money. This was a mechanism used to offset rising unemployment if corporations could not fund their operations. They supplemented this by the management of regional interest rates to balance the domestic economy. Each branch of the Fed could raise or lower their local interest rate autonomously to attract capital when there was a local shortage or deflect capital when there was too much. This would often take place with the crop cycle, as money would flow in to pay the farmers upon delivery. Regional capital flows became the Texas-New York arbitrage for when Texas was booming New York was in recession and vice versa. This was the original design and purpose behind the Fed. The Jekyll Island meeting was held in secret ONLY because there was a very strong resentment against anyone with wealth as Marxism dominated the Progressive Movement of the era. There was no such cabal to create some evil entity.

Congress began to manipulate the Federal Reserve for their own self-interest when World War I broke out on April 6, 1917. The alteration to the design of the Fed was to direct it to buy government bonds, not corporate. In this first step, they never reverse this decree after the war. They removed the brilliant design to stimulate the economy directly by purchasing corporate paper during a recession. In the last 2007-2009 crisis, the government wrote a check to TARP and hoped that the banks would lend money, but they did not. Removing this first pillar of the independent Fed distorted the entire system. It then made little sense for bankers to own share in an entity that was no longer privately controlled.

During the Boom-Bust Cycle of 1929, banks became traders. Whatever they could make money on was fair game. Goldman Sachs was caught-up in the whole bull market just like everyone else. Under the leadership of Waddill Catchings, who led the firm into joining the hot market by creating an “investment trust” where he saw that a giant fund could maximize profits by buying and selling stocks. He promoted this as a business that was professional, and the profession was investing.

The Goldman Sachs “investment trust” was sort of the domestic “hedge fund” of its day. Everyone was jumping into the game. Catchings was caught-up in the whole thing and was very bullish going into the high of 1929. He gave this new entity the name: Goldman Sachs Trading Corporation. The deal was that Goldman Sachs would be paid 20% of the profit, offering stocks at $104 per share. The stock jumped to $226 per share – twice its book value. This would be the very same mistake exposed in the Crash of 1966 when shares in mutual funds traded on the exchange allowing them to be bid up well beyond their asset value.

The whole bullish atmosphere was very intoxicating. Just three months into the fund, Goldman Sachs arranged for a merger of the trust fund with Financial & Industrial Corporation that controlled Manufacturers Trust Company that was a giant group of insurance companies. This doubled the assets of Goldman Sachs Trading Corporation taking it up to a staggering near $245 million. This was huge money in those days. The trust exploded and the assets under control are said to have exceeded $1 billion.

Goldman Sachs expanded the leverage going right into the eye of the storm that was about to hit starting on September 3rd, 1929. In the summer of 1929, Goldman Sachs launched two more trusts: Shenandoah and the memorable Blue Ridge. The shares were over­-subscribed; Shenandoah began at just $17.80 and it closed on the first trading day at $36 per share. Blue Ridge was leveraged even more, and the partners at Goldman Sachs put pressure on everyone to buy as a sign of support. The leverage was astonishing for with just about $25 million in capital, there was now more than $500 million at stake.

The disaster was monumental to say the least. Goldman Sachs Trading Company, whose shares had stood at $326 at their peak, fell during the Great Depression to $1.75. They fell to less than 1% of their high. The loss suffered at Goldman Sachs on a percentage basis was far worse than at any other trust. In fact, of the top trusts, Goldman Sachs had lost about 70% of the entire trust market.

Goldman Sachs was awash with lawsuits and it became the target of jokes in Vaude­ville. This would fuel the anti-Jewish feeling in New York for decades to come. Samuel Sachs died in 1934 at the age of 84. He was devastated, for what he had worked for was to build the firm’s reputation. That is what broke the family in two.

The Glass-Steagall Act, also known as the Banking Act of 1933 (48 Stat. 162), was passed by Congress in 1933 and prohibited commercial banks from engaging in the investment business. It was enacted as an emergency response to the failure of nearly 5,000 banks during the Great Depression. Why? Because banks sold trusts and foreign sovereign government bonds to the public in small denominations. During the Stock Market Crash of 1929, amid accusations that Goldman had engaged in share price manipulation and insider trading, this was the actual drive behind the act. Goldman Sachs inspired the decision to ban insider trading in the United States in 1934.

Goldman Sachs then installed Robert Rubin under Bill Clinton as Secretary of the Treasury. Ironically, the very firm that inspired Glass-Steagall seized control of Congress with political donations to get it overturned. This began once again the age of Transactional Banking.

The Federal Reserve: Part III – The Takeover
Roosevelt established the Federal Deposit Insurance Corporation (FDIC) in 1933, assuring people it was safer to keep their money in a reopened bank than under the mattress. Then on August 23, 1935, Congress approved legislation that had a major impact on the Federal Reserve Banks, the Banking Act of 1935. This Act structurally altered forever the entire concept behind the Federal Reserve, whereas its purpose originally was to provide stability with respect to internal capital flows in addition to a regulatory clearing house for the banks. Each branch maintained its separate interest rate to attract capital to a region or to deflect it to prevent another Panic of 1907 when cash flowed from the east to the west because of the San Francisco Earthquake of 1906.

This is where the Open Market Committee was established and national monetary and credit policies were determined in Washington which would gradually become the new political economy and Laissez–faire was now officially dead.

As World War II approached, politics took control of the Fed. Once again the Fed was ordered to support US government bonds at par. This decree was not lifted until 1951. The Fed remained fairly independent thereafter until the Vietnam War. Politicians viewed its authority to increase the money supply on an elastic basis meant that inflation was their problem, not Congress’. Politicians began to spend whatever they wanted to win election and criticized the Fed if inflation appeared when they had no control over the fiscal spending of Congress.

The entire Bretton Woods system of fixed exchange rates backed by gold pegged permanently to $35 was stupid and became a nightmare. The military establishment that Eisenhower warned about upon leaving office wanted to rule the world. The Presidential Debate of 1960 between Kennedy and Nixon set off the first Gold Panic. Kennedy correctly addressed the decline in the value of the dollar. He stated that the US could stop the decline anytime it desired. All they had to do was stop expanding the military around the world.

The fiscal mismanagement of Congress continued until finally on June 4th, 1963, Kennedy signed Executive Order 11110 which dealt with the problem that silver was rising in price and therefore it could no longer be used for a monetary instrument given the Bretton Woods fixed rate ideas. This is why there can be no standard because everything with time fluctuates. The Treasury was under order to maintain the fixed rate of silver and there was a tax placed on trading in silver back in the Great Depression in 1937. Kennedy was authorizing the Treasury to issue notes ONLY if needed for the transition in the elimination of silver from the monetary system. It has nothing to do with stripping the authority of the Federal Reserve to issue notes.

The collapse of Bretton Woods was underway. It became self-evident with the Crash of 1966. The stock market fell 26.5% in about 8.6 months, but so did collectibles and other investments for the bearishness on the dollar reached excessive levels. Then the market recovered reaching back to the former highs in 1968. The decline resumed and the market fell for about 17.2 months into May of 1970.

Bretton Woods was collapsing in slow motion. From the first gold panic in 1960, 11 years later the world financial system collapsed. It was 8.6 years from the Kennedy decision to abandon silver. Richard Nixon who had debated Kennedy in 1960, was forced to close the Gold Window on August 15th, 1971. It was Nixon who set in motion the withdrawal from Vietnam. He opened China in hopes of putting pressure on Vietnam to reach a settlement, but that failed. Nixon knew that the military establishment undermined the economy.

Of course, European politics was the polar opposite of the USA. There, a stronger currency proved they were doing a good job of rebuilding the economy post-war. The French and the Swiss were leading the charge to demand gold for dollars. The French had visions of conquering the financial world and dethroning the dollar to grasp that golden wreath of victory snatched from the hands of Napoleon.

The 1970s were all about trying to fight inflation caused by the decline in the purchasing power of the dollar. German cars had more than doubled in value through the 1970s. Gold had risen to $875 on January 21st, 1980. Volcker took charge of the Fed and used gold as his sign of success at first, but then abandoned that as any guidance. He raised rates into March of 1981 taking the discount rate to 14%. When the inflation broke and the dollar then soared to record highs going into 1985, rates had declined back to 8%. This would set that stage to the dramatic escalation in the national debt, for it stood at almost $1 trillion in 1982, and reached almost $6 trillion by 1999.

Voclker’s battle with inflation set in motion the major factor of inflation – government spending. The Federal Reserve was stripped of any real power to manipulate the economy for they lacked any control over the fiscal spending of Congress The attempt to raise interest rates to fight inflation, send the national debt soaring and the proportion of interest costs sky-rocketed and eventually reached about 70%. The whole idea of socialism to benefit the people was inverted to benefit the bond holders. Then the movement to return to a gold standard was unleashed, which would have been a huge benefit to bondholders and strip-mining the people of whatever liberty and assets they managed to earn. The bond holders would have profited tremendously.

The Federal Reserve: Part IV – The Bankers Strike Back
The entire theory of how to manage an economy via the rise and fall of the money supply being the sole cause of inflation or deflation was discredited post-1971 with the birth of the Floating Exchange Rate System. Unbeknownst to the vast majority, the entire accounting system of trade had been constructed upon the Bretton Woods system. There was no need to actually count the number of Toyota cars coming in at the dock, for all you had to do was count the dollars in and out and under a fixed exchange rate system, this meant more or less goods. However, this short cut made sense with fixed exchange rates, not when currency fluctuated.

The 1970s produced rising prices (inflation) but declining economic growth, which became known as STAGFLATION. This was a cost-push type inflation whereas OPEC sent oil prices soaring so the costs rose dramatically forcing prices to rise even in recession. Therefore, it became possible for inflation to rise without an increase in money supply or even consumer demand. The consumer post-1976 responded by purchasing goods now to save money tomorrow, much as the consumer rise in spending in Tokyo ahead of the implementation of taxes. Likewise, real estate sales will typically rise when the consumer begins to see mortgages rates rising, not falling. The consumer responds to the trend in motion.

Raising interest rates to fight a mixed type of inflation only sent the government spending into hyper-drive because it was on automatic pilot. Congress was expecting the Fed to control inflation, but meanwhile, government budgets increased per department for they had been indexed to the CPI. President Jimmy Carter required the adoption of Zero-Base Budgeting (ZBB) by the federal government during the late 1970s. Zero-Base Budgeting was an executive branch budget formulation process, introduced into the federal government in 1977. Volcker tried his best, but all he could do is stop the consumer speculation. He had himself delivered a lecture in 1978 he entitled the Rediscovery of the Business Cycle.

No longer were departments required to send in a budget each year and have it approved by Congress. This new Zero-Base Budgeting process meant that whatever they spent the previous year would be automatically renewed, indexed to inflation. This further created the now standard practice of wastefully spending whatever they had remaining just to avoid cuts the following year.

The entire landscape was altered in how government now fit into the economy. It became impossible for the Fed to control inflation. As you can see, despite the recession 1974-1976 and 1981-1985, both the CPI and money supply kept rising. There was a total disconnect from the traditional economic theories and the view that the Fed was in the driver seat was just not realistic. The entire fate of the economy was not on a new paradigm of economic interaction.

This would be a leading cause of the 19-year decline in gold and the complete discrediting of the old-world view of inflation and money supply punctuated by the claim that paper money was fiat. The floating exchange rate system ended the concept that money had to be tangible, freeing it to move according to the worth of the people and their total productive capacity. This changed everything and then Carter’s Zero-Base Budgeting created an automatic pilot process that nobody understood just how it would alter the behavior of whole departments. It was Adam Smith’s Invisible Hand inside government – spend it or lose it.

The global economy was changing and taking a giant leap forward in economic reality. This decoupling of money from the concept of a barter system where it had to be some object between two other objects, Japan soared to the second largest economy in the world without old or natural resources. They proved the new era was here – the dawn of money that reflected the capacity of the people to produce distinguished skills and educated society from those that were still primitive. This also had a profound impact upon the commodity industry and its take over of Wall Street that began precisely with the ECM peak of the 51.6 year wave 1981.35.

The company known at first as Philipp Brothers was founded in 1901. It was later acquired and became the Philipp Brothers Division of Engelhard Minerals & Chemicals Corporation, the major gold refinery of 1967. In 1981, the company was spun off as Phibro Corporation, and that same year the company subsequently acquired Salomon Brothers, creating Phibro-Salomon Inc. Phibro Energy, Inc. was established in 1984, absorbing the oil department of Philipp Brothers. There was a rather famous connection between Marc Rich (1934 – 2013) and PhiBro. Rich once worked for Philipp Brothers, but left the firm in 1974 to set up a Swiss operation known as Marc Rich & Co. AG, which would later become Glencore Xstrata Plc. Rich was indicted for tax evasion and never returned to the USA, staying in Switzerland. Bill Clinton not only repealed Glass Steagall for Goldman Sachs, he also granted Marc Rich a controversial pardon.

In 1981, commodity trading firm Phibro Corporation acquired Salomon Brothers, which was founded in 1910 by three brothers along with a clerk named Ben Levy. In 1978, John Gutfreund rose as the head of Salomon Brothers, which had remained a partnership. Gutfreund was now selling the firm to the huge commodity firm Philips Brothers of Marc Rich fame, known as Phibro on the street. This takeover was right in line with the major high on the Public Wave that peaked at 1981.35.

PhiBro were great traders coming from the commodity markets. They had conquered the world in 1980, shorting gold and silver, and thus were now trying to buy Salomon Brothers when they were at the top of their cycle. Gutfreund became a co-CEO with Phibro’s David Tendler. The currency swing following 1981 was dramatic from a percentage basis. Neither PhiBro nor Salomon Brothers comprehended what was going on internationally regarding capital flows. They got caught in this new pendulum swing with extremely high volatility. The commodities crashed and burned, and the tables were turning. This shifted the profit base from PhiBro now to Salomon Brothers. Gutfreund now seized control and started to expand the firm into the currency trading, and enlarged the firm’s positions in underwriting and share trading. Salomon Brothers was now also trying to expand into Japan, as well as Germany and Switzerland.

The firm that had risen to such heights, known as the “King of Wall Street” saw its profits peak precisely with the 1985 turn in the Economic Confidence Model at about a half-billion dollars. The markets all turned in 1985 with the dollar crashing, commodities starting to rise and the stock market exploding. The fixed income specialists at Salomon Brothers were now in a bear market. Salomon had expanded right at the top in 1985. They had increased their staff by 40%. So as it was, PhiBro’s turn at the 1981 turning point, it was now Salomon’s turn with the 1985 target.

Salomon Brothers was the powerhouse of Wall Street banking – the bond dealer extraordinaire. It was founded by three brothers: Arthur, Herbert and Percy Salomon. The brothers began with $5,000, and some help from their father’s (a broker himself) clerk, and opened their first money brokerage office on Broadway near Wall Street. They made their fortune selling US debt during World War I. Unlike Goldman Sachs, Salomon Brothers were conservative and weathered the Great Depression rather well, avoiding getting caught up in all the speculation of a permanent new era.

Under the new leadership of the family’s next generation, William (Billy) Salomon, the firm expanded its operations in the 1960s, adding a research department, which included the infamous economist Henry Kaufman. They expanded into underwriting activities and block trading joining Lehman Brothers, Blythe, and Merril Lynch in the field of Investment Banking where they became known as the ‘Fearsome Foursome’.
Gutfreund-John-2

John Gutfreund joined Salomon as a statistics trainee in the mid-1950s, and per request of Billy Salomon, Gutfreund became his golf partner. It was this friendship that allowed Gutfreund to quickly climb the corporate ladder at Salomon Brothers. He was named partner at the young age of 34, and then took over the firm at 49 becoming the CEO.

According to Michael Lewis’ Liar’s Poker, Gutfreund was known to tell his employees “a trader needs to wake up every morning ready to bite the ass of a bear.” The arrogance was astonishing. The power clearly went to their heads for the famous line from Lewis’s book that lives on, was what they called themselves – “big swinging dicks.” Yet the idea of creating first private mortgage backed security actually began there at Salomon Brothers during the 1980’s.

This was the era of the Bonfire of the Vanities, a 1987 novel by Tom Wolfe, which captured the decline in ethics and morals in New York City at the time. The competition between Goldman Sachs and Salomon Brothers was always there. Goldman was not part of the ‘Fearsome Foursome’ but was determined to break back into the center of the era.

When PhiBro and Salomon were joining at the hip, Goldman began looking around to follow in the footsteps of this merger. They too wanted commodity exposure and bought the trading house of J. Aron that was clearly a competitive move given the Salomon Brothers merger with Philips Brothers. J. Aron was an old commodity house that began in New Orleans in 1898; it moved to New York City in 1910, just in time for the commodity boom with World War I. The firm was named after Jack Aron, who was part of the Jewish community. J. Aron expanded into the metals trade during the late 1960s after gold became a free market in London and the official line was that there was now a two-tier pricing in gold as of 1968. During the 21.5 year commodity boom, J. Aron rose from a capitalization of less than $500,000 in the late 1960’s to $100 million by the peak in 1981. By the peak, J. Aron had become the largest trader in gold doing more volume in dollars than the biggest of any of the Dow stocks.

Being a commodity firm, J. Aron was actively trading currency futures that the
banks did not understand. They were the first to arbitrage the currency futures against the cash currency markets, for the commercial banks back then did not understand the markets, but had to provide that service to keep commercial clients.

Aron’s business in precious metals helped to bring in market-share. This is the beginning of gold lending. Banks holding gold would start to lend it to J. Aron at 0.5%. This business was starting to explode. After the 1980 Commodity Boom, everyone expected it to rebound and keep going. Oil hit $40 and gold $875. Everyone wanted to become a commodity trader for the Dow Jones had kept bouncing off 1,000 so why not go where the action was.

It was October 1981 when Goldman Sachs purchased J. Aron & Co. for $135 million. It was in fact on the top of the commodity market. Although they had bought the high, they were importing the commodity culture of trading that would in fact lead to the firm’s trading reputation. Its current head, Lloyd C. Blankfein, came from J. Aron and has now focused Goldman Sachs as a mean, lean, trading machine.

The competition between these two Jewish firms fueled Wall Street’s evolution. Leading up to 1980, Sidney Weinberg (1891-1969) at Goldman Sachs brought in his heir that perhaps began the desire to cultivate contacts within government. In 1968 Henry Fowler (1908-2000), former Secretary of Treasury, was recruited. It was Fowler who opened those political doors in a host of different nations, however it was Gus Levy (1910-1976) who was the aggressive one, pushing the firm into taxable bond dealing expanding from commercial paper. From 1969, Goldman Sachs now moved into the bond market.

Salomon Brothers was taking market share away from Goldman Sachs. The decision to get back into proprietary trading appears to have been from Steve Friedman and Robert Rubin to be competitive with Salomon. Goldman Sachs was still hesitant sitting, to a large extent, watching trading profits grow at Salomon, and that was the trend at Morgan Stanley, First Boston, and of course Merrill Lynch.

The October 1981 takeover by Goldman Sachs of J. Aron & Co. altered the culture within the firm. From that point onward, Goldman would also drift toward becoming a lean, mean, trading machine bent on proprietary trading.

The 1987 Crash hit Salomon Brothers where it hurt. Traders scalping markets never see the big changes in trend until it hits them in the face. Warren Buffett now enters the scene; Salomon turned to Warren Buffet to inject $700 million. Their traders lost big time. Buffet wrote in that year’s letter to his investors:

“By far our largest – and most publicized – investment in 1987 was a $700 million purchase of Salomon Inc. 9% preferred stock. This preferred is convertible after three years into Salomon common stock at $38 per share and, if not converted, will be redeemed ratably over five years beginning October 31, 1995. From most standpoints, this commitment fits into the medium-term fixed-income securities category. In addition, we have an interesting conversion possibility.”

That investment turned into a long relationship full of ups and downs, but it also saw Buffett turn into the commodity game of manipulation and wild trading. At first, he assumed it would be his typical classic Buffett play. Sunday, Sept. 27, 1987, Buffett met with John Gutfreund, then Salomon’s chairman and CEO, and agreed that Berkshire Hathaway would buy $700 million of Salomon convertible preferred stock, which equated to a 12% stake in the company. Buffett invested in what appeared to be a solid company with a good reputation that was getting its stock slapped around by a fearful market following 1987. Buffet would later say, “Be fearful when others are greedy; be greedy when others are fearful.”

Buffet quickly found himself in the midst of turbulent trading where he was not accustomed to really valuing speculative positions on a trading desk. Within weeks, Buffett was stunned by Salomon’s sudden surprise disclosure of a $70 million write-down from bad bets made by trading junk bonds. That hidden trading loss wiped out one-third of Mr. Buffett’s investment.

Salomon was not alone. Kidder Peabody also starting with the 1987 Crash was plagued by scandals, including insider-trading cases involving head of mergers Martin Siegel, head of arbitrage Richard Wigton (charges were later dropped) and trader Joseph Jett. While a judge originally found Mr. Jett not guilty of securities fraud, in 2004 the SEC reversed that decision and upheld the charges. In 1994, parent company General Electric sold Kidder to Paine Webber for $70 million.

This trading atmosphere of “big swinging dicks” had not learned its lesson from the 1987 Crash. This was the culture instilled by PhiBro from the commodity side of the world. Trader Paul Mozer, who had a 12-year career at the firm coming from Morgan Stanley, allegedly submitted illegal bids for U.S. treasury securities in August of 1990, attempting to corner the market by purchasing more than the 35% share allowed per individual transaction. Yet, what he eventually plead guilty to was based on only two transactions in the five-year notes on February 21, 1991 for $6 billion, which was $2 billion more than the bank was allowed to buy. The plea did not match the events.

Other Salomon employees would later tell the NY Times they were shocked:

“This was not driven by personal gain, if this is true. There’s a game here. And it was a desire to win the game.” Mozer’s supervisor, John Meriwether who started and blew up Long-Term Capital Management in 1998 requiring a Fed bailout his hedge fund with a position of nearly $100 billion. Meriwether, at the time in Salomon, claimed to have chastised Mozer for the manipulation when it came to his attention, but he did not fire Mozer raising serious questions about the trading culture overall inside Salomon Brothers.

Shortly before the Salomon Bros. scandal erupted, Paul W. Mozer must have been aware that the Treasury knew about the trade and there would be ramifications. Before the announcement by Salomon Brothers on August 9th, 1991, Mozer then sold about $1.7 million worth of Salomon stock, which was about 46,000 shares, confirmed by the firm. The government froze the funds for it smelled like insider trading in the real sense.

Salomon Brothers and Mr. Mozer’s lawyer said that Mr. Mozer had offered to reverse or rescind the sale. Salomon’s stock price sank sharply after the scandal was revealed. Mozer’s lawyer denied that any violation of insider trading laws had occurred. To this day, Paul Mozer is entirely omitted from Wikipedia – very strange – and it tends to suggest that he was by no means acting alone.

The President of the NY Federal Reserve at that time was NOT in the pocket of the bankers. The Fed sent a letter that was pointed and demanding. The letter was signed by an executive vice president of the bank, but it was clear, Edward Gerald Corrigan (born 1941), was pissed off and stood behind every word. Corrigan by then knew enough to become incensed by these schemes on his watch. The letter said that Salomon’s bidding “irregularities” called into question its “continuing business relationship” with the Fed and pronounced the Fed “deeply troubled” by the failure of Salomon’s management to make a timely disclosure of what it had learned about Mozer. Corrigan demanded a comprehensive report within ten days of all “irregularities, violations, and oversights” Salomon knew to have occurred. The real interesting factor that demonstrated the more-likely-than-not involvement of everyone right up to Gutfreund was the fact that Gutfreund failed to inform the Board of Directors, including Buffett, that the Fed had even sent such a letter.

John H. Gutfreund, Salomon’s chief executive; Thomas W. Strauss, the firm’s president; and John W. Meriwether, the vice chairman, were all forced to resign after Salomon disclosed it made a series of improper bids at several Treasury auctions. All three executives were told of Mr. Mozer’s illegal bids, but they waited months before relaying the information to the Treasury Department. It was at least plausible that this was just part of the “big swinging dicks” culture at Salomon where anything goes.

Paul Mozer, the alleged central figure in the Salomon Brothers Treasury bond scandal, first agreed to a plea deal on January 8th, 1993. Then the plea deal fell apart on January 12th, suggesting he was really unwilling to take the fall for everyone. Mozer finally pled guilty after being greatly reduced. He told U.S. District Judge Pierre N. Leval on Thursday, October 1st, 1993, that he made false statements to the U.S. Treasury and Federal Reserve Board investigators. Mozer faced a maximum of 10 years in prison and a $500,000 fine. Mozer then entered a cooperation agreement to rat on Wall Street, and what really went on in Salomon Brothers resulting in the resignations. Mozer was sentenced to only 4 months of probation. At sentencing, his lawyer told the court that Mozer had provided extensive information about the practice of “illegal manipulation of the Treasury bond market that led to investigations of Salomon, Goldman Sachs, Daiwa Securities and several Japanese investors”. (see Assassociated Press December 14th, 1993)

Salomon Brothers was fined $290 million for this infraction. The firm was weakened by the scandal and August 18th, 1991, the U.S. Treasury first banned Salomon from bidding in government securities auctions. It was then that Warren Buffet appears again, offering to take the helm. The Treasury agreed and rescinded the ban. In the four hours of suspense between the two actions, Buffett struggled passionately to protect his investment for the firm, valued at $9 billion, which would have been out of business and most likely would have had to file immediately to file for bankruptcy. That action also seemed to reflect that Mozer was a fall guy, and the problem was the culture at the firm – not one individual. This is probably why there is no Wikipedia page on Mozer – very strange.

Salomon was deeply involved in the bond trading scandal from top to bottom. The firm was nearly forced to file for bankruptcy as clients fled based on the rumors the Treasury would shut them down. In order to protect his investment, Mr. Buffett went from being a passive investor to the Chairman of the firm. He found that every dollar of shareholder equity was supporting $37 of assets. That is even higher than the 30:1 leverage ratio at Lehman Brothers when it collapsed.

Mr. Buffett became Chairman of Salomon Brothers and ran the firm for nine months. He later claims that his time there was “far from fun” in a letter to investors in his Berkshire Hathaway holding company. However, Buffett was somehow converted to the culture. The first time his name was being bantered around associated with a silver manipulation was 1993. The CFTC walked into PhiBro and demanded to know who their client was. PhiBro refused to tell them and the CFTC ordered them to exit the position.

In 1997, Salomon was sold to Travelers for $9 billion. Yet strangely enough, the sigh of relief could be heard all the way from Mr. Buffett’s hometown of Omaha. His $700 million investment was now worth $1.7 billion, but the experience seemed to sour him on Wall Street deals. By 2001, he had exited his investment in the firm.

Buffett’s name was again bantered around 1997 with regard to silver. Once again, the player involved was PhiBro. People judge others by themselves. As a result, the NY crowd began to realize that I was always on the other side of the classic failures. Instead of considering that perhaps our model was better than what they could produce with all their machinations, they took the position that our firm was just too influential. I had testified before Congress in 1996 and we did have about half the equivalent of the US national debt under contract for corporate advisory. They translated that into influence and assumed their failures were my successes since 1987, and that was simply due to influence.

Based upon this view of influence, they desperately tried to get me to join the second silver manipulation with Buffet. I have written statements publicly that PhiBro’s brokers walked across the COMEX pit floor and showed my floor brokers Buffett’s orders and told me to join. They knew I would never trust these people, for how would I know I was not the patsy to buy and they would use another seller on the other side of the ring. I would never join them. Hence, PhiBro showed me the orders to convince me to join.

So why did PhiBro show me the orders? Yes, I was a big trader looking for the low in 1999. I would often go head to head with them for they traded on manipulation, and I traded by time and price.

In the movie, Barclay Lieb states that before he came to work for me, he called Goldman Sachs and they admitted that they had thought they could “crush” me, but usually I won. The Club was actually planning their manipulation earlier in the year. The cycles were NOT in their favor, so I took them on. They tried their best to manipulate the market but the Wall Street gods were not smiling that day. On April 3rd, 1997, it was I who crushed them – they lost – the floor went nuts. They said they never saw trading like that day. It was like stepping in the ring as a lightweight and knocking out Mike Tyson in one punch. You cannot manipulate against the trend. I proved that standing my ground that day. This was why they then gave up and wanted me to join. Perhaps that first attempt to manipulate silver sent them to solicit Warren Buffett to take me on since in the end, he spent $1 billion to buy silver for that move.

After PhiBro showed me the orders, I then reported to our clients “they are back”, knowing it was Buffet and PhiBro for a second time. They were pissed off at me even though I never mentioned names. The buying of silver was done in London. Therefore, they moved silver out of COMEX warehouses in USA, and shipped them to London to pretend there was a shortage to justify the manipulation. The Wall Street Journal assisted in the rally.

The manipulators with steering the Buffet buying in London to avoid the 1993 problem with the CFTC. This is why AIG trading arm also set up in London.

Buying silver in London justified moving it from the NY COMEX and this allowed them to get the manipulation going. COMEX supplies were reported in isolation. Moving the silver to London created the false image of a shortage to justify the higher prices. The Wall Street Journal was used to plant the story. On September 30th, 1997, the stories played headlines: “Silver Prices Hit Six-Month High On Steadily Decline Reserves,” by PALLAVI GOGOI AP-Dow Jones news service updated September 30th, 1997, 12:01 a.m. ET, New York; “Silver futures surged to a six-month high at the COMEX division of the New York Mercantile Exchange, a move analysts said was triggered by steadily declining warehouse stocks…The rally was boosted by preplaced purchase orders around the $5-per-ounce level…”.

This was the news created for manipulation that was constantly played out in the newspapers. The Wall Street Journal reported again on November 17, 1997: “Silver Future Prices Leap On Hints of Tight Supplies”. On December 4, 1997 the Wall Street Journal from London reported: “Silver Surges on Strength In Supply-Demand Status” By Neil Behrmann; Special to The Wall Street Journal updated December 5, 1997 12:01 a.m. ET LONDON — “Gold may be in the doghouse, but silver is soaring like a bird”. The reporting of shortages continued to fuel the rally. The Wall Street Journal reported again December 24, 1997 for the manipulators: “Silver Futures Advance As Inventories Plunge”.

We kept track of what the “club” was doing and warned our clients whenever their antics were conflicting. One of the big ones that blew the lid off was again silver. In 1997, I warned that silver was going to rise from $4 to $7 between September and January 1998. I was even invited to join them; I told to stop fighting and putting out false forecasts. I declined. Their strategy became insane.

At first, a friend of mine who had been Prime Minister Thatcher’s economic adviser became a board member of AIG in London – Alan Walters. He called one day and asked if he could drop in to Princeton the next morning when he arrived from London. I naturally said, “OK”. To my surprise, he arrived with the head trader from AIG London who then proceeded to try to convince me to stop talking about the manipulations. I told him I would never reveal any names, and the government didn’t care anyway.

Things got insane thereafter. An analyst on the payroll of PhiBro had a main contact at the Wall Street Journal. They decided to slander me and get the press to target me claiming I was trying to manipulate the market. It was an interesting strategy, but one I cared nothing about since I was primarily an institutional and corporate adviser, and they were not really interested in silver.

The journalist from the Wall Street Journal called me. He accused me of this nonsense and we argued. It got quite heated. He said if silver was being manipulated, then I should give him the name. I told him he would not believe me anyway. He demanded the name and so I said fine, go ahead, let me see you print it, knowing he never would. The name I gave him was Warren Buffett. He laughed and told me everyone knew Buffett did not trade commodities; I told him that was how much he knew.

The Wall Street Journal published the article. The London newspapers were fed stories by “the club” that I was now the largest silver trader in the world. This became all a joke to me. Even the CFTC could look at positions and knew I was not a big player in silver on that move.

The mistake made by “the club” by turning out the press against me, was they actually created such a worldwide story that the CFTC was forced to call me. They knew I was not the source. They asked me, where was the manipulation taking place? I told them it was in London, out of their jurisdiction. They told me that they could pick up the phone and find out. I told them that they had to make that clear decision. I hung up. Never did I expect that they would really do anything.

A few hours later, my phone rang. It was a good source in London, who also was helping to monitor “the club” actions. He told me that the Bank of England had called an immediate meeting of all silver brokers in London in the morning. I was shocked. The CFTC had made the call, but then again, I had given them no names so perhaps in their mind, this was fair game.

Within the hour, Warren Buffett made a press announcement. He admitted he had purchased $1 billion worth of silver in London. He denied that he was manipulating the market, claiming the silver was a long-term investment. Everyone was shocked that Buffett was suddenly exposed as a commodity trader after all, the next day the Wall Street Journal called me. The writer asked – “How did you know?” I told him it was my job to know! Silver thereafter declined and made new lows going into 1999. So much for the long-term investment.

The time line of this head-to-head confrontation was AFTER the Treasury Scandal of 1991. Clearly, Buffett developed some relationship with PhiBro. In 1993, Phibro Energy, Inc. became the Phibro Energy Division of Salomon Inc. It was renamed to simply “Phibro” in 1996, and in 1997 Salomon was acquired by Travelers Group, which then merged with Citicorp to form Citigroup in 1998. With the merger, Salomon became an indirect, wholly owned subsidiary of Citigroup. So obviously, the silver play was in the fall of 1997.

Phibro came to the notice of the general public only when its leader, Andrew J. Hall reportedly was seeking a $100 million bonus from Citigroup, which had been bailed out by U.S taxpayers in 2009. Reportedly, Phibro was the main source of the $2 billion in pretax revenue Citigroup received in commodities trading. Hall’s position was rather clear. He had nothing to do with the mortgage backed security debacle.

In October 2009, Occidental Petroleum announced it would acquire Phibro from Citigroup, estimating its net investment at approximately $250 million. Phibro is now part of Oxy’s “Midstream, marketing and other segment”, which includes Oxy’s gas plant, pipelines, marketing, trading, and power generation operations. Hall continues to run Phibro and heads Astenbeck Capital Management, of which 80% is owned by Hall and 20% by Occidental.

The repeal of Glass-Steagall Act, also known as the Banking Act of 1933 (48 Stat. 162), was to prevent the very thing that Goldman Sachs was involved in during the Great Depression. The stock in Goldman Sachs Trading Company crashed more than anything falling from $326 to $1.75, it was intended to prohibit commercial banks from engaging in the investment business. It was enacted as an emergency response to the failure of nearly 5,000 banks during the Great Depression. The accusations that Goldman Sachs had engaged in share price manipulation and insider trading contributed to the firm becoming the target of jokes in Vaude­ville.

Stephen Friedman and Robert Rubin took over the role of managing Fixed Income where they planned to expand into proprietary trading.

Stephen Friedman and Robert Rubin took over the role of managing fixed income where they planned to expand into proprietary trading. Goldman Sachs moved into quantitative analysis in the late 1970s, relying still on academics. It was Freidman and Rubin who changed the culture creating the trading profit bonus and starting in 1986, Goldman Sachs began to take talent from Salomon offering a huge bonus structure and adopting the trading mentality it now acquired from J. Aron & Co.

In 1986, Goldman Sachs hired Fischer Black of Black–Scholes, famous for valuing
stock options. It was Rubin who brought in Black, and the problem they had was the newly embedded options within debt. However, the issue they did not understand, that they were now walking into, was there is a great language problem between traders and programmers. You MUST be good at both, or you are screwed.

Goldman Sachs, the most profitable firm in Wall Street history, moved its headquarters to a new 43-story skyscraper at 200 West St. in 2010 after almost three decades at 85 Broad St.

Stephen Friedman, former CEO of Goldman Sachs, resigned as Chair of the Federal Reserve Bank of New York on May 7, 2009 Friedman was criticized for apparently at least creating an unethical image of benefiting from his role as Chair of the New York Fed branch due to the federal government’s aid to Goldman Sachs in recent months. Amazingly, Friedman remained on the board of Goldman even as he was supposedly regulating Goldman. Like Hank Paulson Secretary of the Treasury, Friedman also applied for, and got, a conflict of interest waiver from the government. Who gives out such waivers is unknown and why they are not done openly in Congress is obvious. Friedman was also supposed to divest himself of his Goldman stock after Goldman became a bank holding company, but thanks to the waiver, he was allowed to go out and buy 52,000 additional shares in his old bank, leaving him $3 million richer. Being exempt from insider trading is a government benefit. Friedman’s eventual resignation announcement came within an hour of the government’s release of the 2009 stress tests for 19 U.S. financial institutions. It was effective immediately.

Goldman Sachs, the very firm who was the worst example from the Great Depression crash, led the charge against the trend to take over government. They installed Robert Rubin under Bill Clinton as Secretary of the Treasury. Ironically, the very firm that inspired Glass-Steagall seized control of Congress with political donations to get it overturned. This began once again the age of Transactional Banking.

Fractional Banking v Matched Funding
Banking has existed from the earliest of times and has taken many forms from safe deposit storage, money changers, merchants with the ability to move money internationally, to money lenders. Some people wrongly assume that they can eliminate the business cycle by eliminating fractional banking. They assume that it will be possible to match lenders and borrowers to maturity contracts. They do not comprehend that this is the line of thinking that always leads to authoritarianism, all the way to communism.

The problem that will emerge from this matching lenders and borrowers to a maturity contract is that the boom bust cycle will still exist. There will always be the perpetual rise and fall in asset values caused by other factors (including human nature), not the least will be changes in technology, no less civil unrest and war that can alter capital flows. History offers a catalogue of solutions. All we need to test such an idea is to open the books.

People assume the cause of the business cycle is the fractional banking issue, as if that were eliminated, then you would flat-line the business cycle creating utopia. Be very careful. This was the goal of Karl Marx as well. So the starting point is a basic question. Has fractional banking always existed? NO! Since the answer is no, then did the boom and bust cycle in banking exist even without fractional banking? The stark answer – YES.

In ancient times, there were financial panics without fractional banking as well. In Athens during 354BC, people borrowed money from the Temple unbeknownst to everyone else. They were speculating in real estate. The real estate market collapsed without fractional banking and then it exposed that the money was borrowed behind the curtain, so to speak, from the temple. Corrupt priests had all this money donated to Athena. She obvious was very frugal since she never seemed to go on a spending spree to buy shoes, owls, or spears. She wore a helmet so she didn’t need a hairdresser. So the priests could keep their hands out of the treasury. Oops – they were caught lending it out to their buddies for spare change. There was no fractional banking involved. They had the money and lent it to their buddies. The assets collapse because as always, the mood of people changes with the seasons.

Fast forward to the 17th century, we find the very same scheme played out by politicians. There was the collapse of Wisselbank in Amsterdam, where people had deposited their money and assumed the bank was strictly a safekeeping facility. They offered no loans and paid no interest. Little did they know, the government was using their deposits to fund their own trading.

The Wisselbank was founded in 1609. Upon first opening an account, a depositor paid a fee of ten guilders, three guilders, and three stuivers for each additional account. Two stuivers were paid for each transaction, excepting those of less than three hundred guilders, for which six stuivers were paid, in order to discourage the multiplicity of small transactions. A person who neglected to balance his account twice in the year forfeited 25 guilders. A person who ordered a transfer for more than what was upon his account, was obliged to pay three per cent for the sum overdrawn. The bank made further profit by selling foreign coin and bullion, which fell to it by the expiration of receipts, and by selling bank money at five percent and buying it at four percent. These sources of revenue were more than enough to pay for the wages of bank officers, and defraying the expense of management. (Adam Smith)

In 1602, the United East India Company (VOC) formed from six trading companies in the Netherlands, and granted a trade monopoly over the Indies. The bank was administered by a committee of city government officials concerned to keep its affairs secret. It initially operated on a deposit-only basis, but by 1657, it was allowing depositors to overdraw their accounts, and lending large sums to the Municipality of Amsterdam and the United East Indies Company (Dutch East India Company). Initially this was kept confidential, but it had become public knowledge by 1790. The City of Amsterdam took over direct control in 1791 as a bailout, before finally closing it in 1819.

There is plenty of history of banking BEFORE fractional banking. Sorry, but that did not stop banking panics nor did it stop the business cycle with the boom and bust events. The Tulip Bubble was not leveraged with fractional banking. No matter what, the boom and bust cycle is driven by human nature. We do have a tendency to change our minds about everything from fashion to money.

The idea that we can match lenders and borrowers sounds nice. However, that will not eliminate the cycle. I can find no instance of such a flat line except during a Dark Age where there was no banking, private ownership, or any real economy. Coinage during the period is rare and is typically confined to the region where it was struck demonstrating the lack of an economy or circulation due to trade.

 

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My 1987 story that Marty commented on.

COMMENT: 30 years ago today I was sitting in a brokerage firm in New Castle Pennsylvania on a personal computer that had 720 K of RAM and ran at 1 GHz watching the market and sitting looking at the charting. Prices on stocks were running between 15 and 30 minutes late, nobody knew what was going on. All we knew was things were dropping, dropping, dropping and dropping, everyone was confused. It was crazy. The volume was bigger than they’d ever seen before. Therefore, they could not keep up with the bids and the ask.

I was short the market with every penny I owned and I had no idea how well I was doing. We tried calling places to get current prices if you could get through and even if you did they did not have current quotes, it was pure chaos. When the dust cleared at the end of the day the brokerage firm I was with had gone bankrupt and had lost most everybody’s money.

I had bought a ton of OEX puts and the person who owned the firm. Instead of processing them through regular channels, he decided to write against me on his own. He did not have the money to cover them. I was right on the market but wrong about who I placed my bids through. Three days later all the brokers at this firm were laid off, fired or let go… however you want to put it…. the friend who had the PC and the stock charts. I helped him move all the stuff out to his house. The next year he started his own brokerage firm.

The interesting thing is 5 to 10 days before that drop I told everybody we were in for a major crash but nobody wanted to believe me. But it was in the charts and I tried to show them this.

REPLY: Welcome to the old man in the corner club. You know. The old guy in the trading room who use to say this is just like 1929 when we were kids. Now we talk about 1987 which was 30 years ago. I was giving a WEC that weekend. We just elected a set of Double Weekly Bearish Reversals. The Arrays called for a low in 2 days. There were no other reversals between 286 and 180.

I remember standing up there trying to find some technical support between 286 and 180. I could not. There was nothing between the two even technically. The audience asked me what would happen? I said look, it sounds nuts, but we should move down 10,000 basis point in two days.

I myself could not believe it. But people paid me for what the computer had to say, not my opinion.

When that happened, it was right on the ECM date. It was absolutely perfect to the T.

Everyone was calling for the 1929 collapse. The model said new highs by 1989. That’s when brokerage houses were begging me to please come and speak to their retail audiences. I agreed and went to Toronto for Midland Daugherty. They filled the place with thousands of people.

Australian brokers and British brokers were all lining up to have me speak to their clients. It was all in their self-interest. They were paying back then $100k to get me to speak to their clients because I only did Institutional. It was an interesting time.

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On taxes and knowing the future by Martin Armstrong

We tend to assume that the freedom of movement is confined solely to migration and travel. There are four aspects to the freedom of movement, and migration or travel is only one. Yes, we warned that the Schengen Agreement would come to an end and the European refugee crisis has enabled that decline. We warned that this agreement, signed in 1985, was reaching the end and would begin to be “overthrown … come 2016.867 or November 12, 2016,” which was pi – 31.415 years from the signing.

There are four facets to the freedom of movement, which people far too often do not look at or understand their vital role in furthering the development of civilization. What truly made Rome a great enduring Empire was more than just might. Roman imperial history cannot ignore the freedom of movement in all four aspects: 1.) translation of texts, practices, and ideas; 2.) communication or the movement of written documents (i.e. today’s internet, phone calls, and texting); 3.) migration (i.e. officials, merchants, students, etc.); and 4.) the free movement of goods and services. The interrelationships among the four aspects of the freedom of movement are critical to the advancement of civilization.

redit-forecaster-banned

1.) The freedom of movement that enabled the translation of concepts and ideas has often been curtailed. For example, Lenin’s book “What is to be Done?” was first published in Germany during 1902, but it was outlawed for publication and distribution in Russia. For my own movie, “The Forecaster,” the distribution rights were bought in the United States and Switzerland, and then they refused to show it. In London, the film was not blocked, but the night of the debut the Evening Standard ran a story about a local headhunter named Martin Armstrong who said the bankers were worth every penny — but they used my picture. The freedom of translation is denied all the time and governments employ such tactics out of their self-interests.

Today, this would include books, movies, and also the internet. Turkey, for example, blocked Facebook, Twitter, and YouTube throughout Turkey on Friday, November 4, 2016. They also blocked the messaging services WhatsApp, Skype, and Instagram. The United States monitors everything through the NSA. Europe has also been looking at restricting the internet (eu-restrict-internet).

2.) The aspect of communication in the freedom of movement involves written documents, phone calls, and texting. The two major inventions that made the Roman empire soar were road and mail service. Yes, the Romans were really the inventors of the pony express. Letters have been discovered at Vindolanda in Britain at Hadrian’s Wall. Discoveries include formal letters of military issue, a letter from Octavius about supplies, the oldest letter from a woman, and even an invite to a birthday party back in Rome. Such letters could be delivered in just seven days.

Restricting this aspect of free movement changes the role of the state as well as relations between individuals and states. The implications of the assault on the free movement of communications are expanding under the pretense that they need to track what people are doing for taxes. This direct assault is altering relations in ways of organizing and thinking among individuals while hampering the expansion of global commerce.

3.) The third aspect of the freedom of movement is migrating one’s actual person. The saying, “All roads lead to Rome” was indicative of Rome’s vast road network that facilitated this free movement of people and trade. This restriction is expanding once again insofar as restrictions on carrying anything of value due to taxes. There are already visa requirements for many states that are typically used when there are concerns of migration.

4.) Finally, the fourth aspect of the freedom of movement is goods and services. The Roman Empire facilitated free trade, which was the foundation of the Roman economy. True, Donald Trump soared to the White House on the back of middle class America who were forgotten when they lost their jobs to foreign imports. Yes, you can put up barriers and tariffs to protect local jobs in every political state. However, this is a losing battle and it only looks at labor in the same manner as Karl Marx who took the position that nothing has value except for the labor to produce it. Keeping overvalued jobs may bring cheers from displaced workers, but it also imposes higher costs to the consumer.

Why are jobs leaving the country? It is not due exclusively to cheaper labor. That is total nonsense. It is the huge cost of regulation and taxes. The higher government raises taxes, the more overvalued the cost of labor. When I helped restructure companies looking to set up plants inside Europe, I had to weigh all costs. I placed manufacturing jobs in Britain because 1.) they had the skilled labor force, and 2.) they had 40% less in taxation from the corporate aspect compared to Germany and certainly France. It they needed the best tax deal without the skilled labor for manufacturing, I placed those companies in Ireland. It was not the cost of labor that was the deciding factor, but the taxation.

The United States is the most unstable country when it comes to taxes. You cannot set out a business plan for 25 years because the tax rates may change every four years. Companies leave the U.S., not because of the price of labor, but to have a safe and secure place to do business without the rules changing. Therefore, restricting the free movement of goods and services denies the ability of the economy to grow and adapt. Shall we ban computers because they can do your taxes faster and cheaper than an accountant? How many accountants were denied a job because of TurboTax?

If government restricts the freedom of movement with respect to people, trade, ideas, communication, and good and services, the world economy cannot possibly survive and this places us at risk of a frightening Dark Age all because governments fear losing power and are desperate to hunt money for confiscation. The first thing we must do to save all four aspects of the freedom of movement is to sharply reduce government’s invasion into every possible aspect of our lives.

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war or no war that is the question.

This is a video of Putin explaining the balance of power from the Russian viewpoint. He is absolutely correct in saying that an anti-missile system neutralizes opposition. It would certainly embolden the war hawks into believing that they could defeat Russia and rule the world at the expense of American and Russian citizens.

Montesquieu, who influenced the Founding Fathers in creating the Constitution, met the political leader and soldier known as the Prince Eugene of Savoy (1663-1736). The political discussions between these two men helped Montesquieu understand the evils of government and forged the Second Amendment of the United States Constitution and the right to bear arms. The Prince of Savoy was considered, even by Napoleon, as one of the seven greatest strategists in military history. He fought against the Turks (1683-1688, 1697, 1715-1718) and he fought against the French in the War of the Grand Alliance (1689-1691). He was also the teacher of Frederick the Great of Prussia (b 1712; 1740–1786) who he shaped into a brilliant military strategist.

savoy-prince

The Prince of Savoy also fought in the War of the Spanish Succession (1701-1714). Nonetheless, jealousy attached to his accomplishments and he was plagued by a rumor that he was really the illegitimate son of King Louis XIV of France, which he perpetually denied. Yet, Louis XIV was always ashamed of such offspring and he restrained the prince’s ambitions as if he was perhaps his son. So after 20 years of living in Paris and Versailles, he left France and offered his talent to Holy Roman Emperor Leopold I (1640-1705) who was fighting the Turks. He distinguished himself in the siege of Vienna in 1683 and his military career was born.

The Prince of Savoy acquired brilliant skill and wisdom that allowed him to see that military victory was merely an instrument for achieving political ends. He was Europe’s most formidable general who was wounded 13 times, yet always faced a world of cunning foes with conspirators at his back, which he regarded as the “hereditary curse” of Austria. He served three emperors: Leopold I, Joseph I, and Charles VI. Of these three men, Prince of Savoy considered that the first had been a father, the second a brother, but with the third, he was just the hired help.

order OF THE CINCINNATI

He was a truly brilliant man of many talents. The Prince of Savory came to see standing armies as evil, for they were easily used because of the expense of keeping them. He came to see that there should be NO armies and that was the only way to reduce war. The brilliant insight of the Prince of Savoy greatly influenced Montesquieu, for this was his source that it laid the foundation for the right to bear arms, as the Second Amendment to the United States constitution. The underlying idea was to eliminate standing armies that feed the cycle of war.

The Prince of Savory was also a student of history. He understood that the early days of Rome were based upon citizen militias. The story of Lucius Quinctius Cincinnatus reflected him coming from his farm to lead the army defending Rome and then returning to his land. This was such a profound story that even George Washington was part of the Order of the Cincinnati.

Indeed, there is a tremendous risk of standing armies and building huge defense systems. These people naturally want to play with the toys they create. It would give them such pleasure as if this were some video game for children.

middle-east-russia-chinaOn the other side of the coin, there are rumors that Russia has a whole new class of weapons that nobody knows about or quite understands, which were designed to defeat the American anti-missile defense system. If the US wants to engage Russia in the Middle East and compel them to invade through Iraq crossing the Tigris and Euphrates rivers, there is little doubt that Russia might use tactical nuclear weapons in the field to defend their troops.

If the US and Europe are foolish enough to enter that venue with boots on the ground, we may see China aid Russia since its economy is turning down and it would distract the population from an economic decline. China borders Afghanistan right next to Iraq. It appears that the US is backing the Sunni (including ISIS) and Russia has taken the side of the Shia. Keep in mind that both Russia and China can send armies in directly over land.

winds-of-warThe stars are beginning to align, as they say, and the winds of war may be upon us to divert the people from revolution due to the collapse of socialism and all its promises.
War becomes a tool of conquest or diversion. We are in the latter stage of this motive. The world economy is crumbling before our eyes. There is not much we can do about it because governments are desperate to hold on to power. There can be no reform when that entails a loss of power on their end. They will fight until the very last drop of blood. The problem, though, it’s always our blood rather than theirs. I agree with the Prince of Savoy — standing armies are ultimately used.

 

By Martin Armstrong

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“The most dangerous thing about glyphosate is the van that delivers it” by Sean Spardling

Filming a piece on Glyphosate for BBC Country file – but when did it become totally acceptable for groups who oppose anything – whether that be glyphosate, GMs, or indeed the general use of agrochemicals or anything else for that matter – to routinely spread spurious information and downright falsehoods in order to achieve their aims?  UK food production and indeed world farming would be decimated and unnecessarily compromised if glyphosate were to be removed from use when its re-evaluated in December 2017. It is as vital a tool to agriculture as the farmers themselves and, to put pseudo-scientific and knowingly false claims into the public domain just to create public  distrust of what is one of the safest actives we use, is a disgracefully calculated and cynical act. The overwhelming body of scientific evidence shows that glyphosate is NOT in any way carcinogenic to consumers, it is NOT mutagenic, it is NOT an endocrine disrupting agent – the overwhelming mountain of independent scientific assessments and reports from world renowned bodies such as the EFSA have proved that over and over again – but apparently all you need to do to get an active ingredient banned – no matter how safe – is simply put an unqualified rumour into the public arena and that undoes, undermines and negates all of the years of science and fact?

We used very little glyphosate up until around 25 years ago when we had straw burning – the burn did the job of the glyphosate by destroying weeds and weed seeds prior to crop establishment. When the burning ban came in, we turned to glyphosate as the only alternative – and it worked pretty well to a degree. When we had burning, we had little in the way of resistance, because fire kills everything. But weeds have evolved, and now we see herbicides failing in the growing crop – hence pre cultivation glyphosate and stale seedbeds are the only way forward in the fight against weeds like blackgrass.

If the reason certain groups are demonising glyphosate, is to help the drive to prevent GM crop technology from developing in the future – “no Glyphosate no GM” being their logic – then these groups should consider a few things in the meantime.

  1. Approximately just over 75% of world supplies of glyphosate are NOT made and/or sold by Monsanto, therefore over 75% of the worlds glyphosate would never be used in GM crop production anyway – even if GM technology were to be universally adopted which is looking highly unlikely. So to remove glyphosate “because without it they cant develop GM crops” or “just in case all else fails in getting GM crops stopped” is a ridiculous standpoint – from a food production AND a human health point of view. Why human health? Because, as an example, if grass weeds are not controlled pre drilling in the seedbed before any cereal seed ever goes in the ground, because our “in crop” herbicide options are now so limited thanks to legislation and resistance issues, the incidence of Ergot (claviceps purpurea to name but one) which can lead to abortion and miscarriage will increase dramatically – now that IS dangerous to human health . . . . . . BAN ERGOT! The effects on conventional agriculture are almost incalculable, not least with weeds like blackgrass which need to be controlled PRIOR to cereals being planted. Long-term feeding studies have shown that glyphosate does not cause birth defects or reproductive problems in laboratory animals either. Glyphosate has consistently been shown to be without effect in an extensive battery of mutagenicity and genotoxicity assays designed to measure gene mutations, chromosome aberrations, and DNA damage and repair.
  2. Glyphosate is being demonised as a “toxic” compound. Looking at that, it has an LD50 (which is the universally accepted toxicology rating, where the number is the quantity in mg required per kg of bodyweight to kill 50% of test subjects), of 5600. The lower the LD50, the more toxic the item. So on the same scale, Arsenic has an LD50 of just 15 mg/kg bodyweight, CuSO4 (widely used organic fungicide) has an LD50 of just 30, Nicotine has an LD50 of 50, Rotenone (widely used organic insecticide) has an LD50 of 150, caffeine has an LD50 of 197, Aspirin of 200, Lead of 450, Vitamin A of 2000, alcohol is actually up there at 7060 . . . . So with an LD50 of 5,600 why is glyphosate public enemy number 1 . . . . Shouldn’t a few of these others be banned first, before we get to the higher numbers like glyphosate, purely on the “public safety” grounds which are being used as justification for ridding us of glyphosate? . . . . . . . . . BAN NICOTINE, CAFFEINE, COPPER SULPHATE, VITAMIN A, ASPIRIN, BLEACH, PARACETAMOL . . . . . . . .According to some experts, the amount of alcohol required to kill us is about 10 times the amount needed to feel “buzzed” if that alcohol were to be consumed in a 15 minute period. So, if the person drinking it is about 70 kg (154 pounds) & it takes them 2 drinks (around 33 g of alcohol) to get a buzz, then 330 g would kill them. That’s about 20 drinks in a 15-20 minute period – not unusual if shots are being downed. The EPA classifies herbicides for acute toxicity in four categories where “I” is the most toxic and “IV” is the least toxic.
  3. Glyphosate is rated as an EPA Category IV for acute oral toxicity based on tests conducted on rats – that’s pretty much as safe as it gets. Indeed when we talk about the dose being the toxin, if a 3 year old were to ingest just 5 adult iron tablets, it would kill the child – and you can buy as many of them as you like on a trip to a health food shop, with no statutory regulations governing their safe storage, handling etc. if theyre that toxic, shouldn’t they be more closely regulated or sold only by pharmacists as drugs just like other medicines? Perspective again – they’re perfectly safe when used as instructed.
  4. The results from other extensive, chronic toxicology tests recently resulted in an EPA classification of glyphosate as a “Category E” herbicide, or “evidence of non-carcinogenicity for humans,” the most favorable rating possible that can be granted.

    EPA Categories are on a scale of A to E where A is carcinogenic to humans and E is not carcinogenic to humans . . . *Glyphosate is rated as Category E

  5. These “Anti-Glyphosate” groups are also pushing for a group of the adjuvants used  within some glyphosate products – tallow amines – to be banned because of how toxic IT is . . . tallow amines are derived from animal fats, they are surfactants and wetting agents and belong to  the polyoxy-ethylene-amines group of surfactants. These wetters are also widely used in our domestic soaps, shampoos, washing up liquids, hand creams, shower gels and other general everyday products, so should we not be removing these deadly domestic soap bars from use too, after all, how can it be safe to apply these compounds directly to ones skin but not safe to apply to a field 3 years BEFORE we get to use it . . . . BAN IMPERIAL LEATHER AND CAMAY . . . . do you see where this is going?
  6. Glyphosate is being quoted as being “carcinogenic to humans” because apparently that statement was contained in “a report”. The actual context of the reference in that report, was that “glyphosate could be perceived as being carcinogenic to spray operators who are over exposed to it, but this risk is minimised by the routine and statutory use of protective equipment which reduces operator exposure to negligible levels”. It was NEVER stated that there is any risk at all to consumers from glyphosate – that was just poetic licence from taking a comment out of context and is at best VERY misleading. The fact is, that based upon field rates of 1 litre per hectare of a 360g formulation of glyphosate applied pre harvest of a milling wheat crop as a harvest aid, even if wholemeal flour was used, based upon 550g of flour in an 800g loaf we would get over 18000 bread loaves per hectare treated and, taking into account that 99% of the applied glyphosate would stay in the field on the straw and chaff and never even touch the grain owing to the fact that because it is a translocated material, when applied to a crop at less than 30% moisture (when it would be applied), it can’t penetrate the glumes that envelope the grain itself – you find out that one would have to eat in excess of 750 loaves of wholemeal bread a day for a lifetime to get to just 1% of the safe dose or MRL of glyphosate! Yet a teaspoon of salt or a cap-ful of bleach will kill a child within minutes – BAN SALT & BLEACH should be the cry from these groups surely . . . . . I think a little perpective is required don’t you?!
  7. If these groups don’t want GM technology to progress, I have no problem with that view, but to demonise vital tools such as glyphosate that are fundamentally and scientifically proven by the EFSA and hundreds of other organisations to be consumer safe and to pose no threat to anything other than the plants they were designed to kill, should at best be viewed as misrepresentation. Such accusations need to be proven by independent bodies with no hidden agenda and no ulterior motive, otherwise anyone can say anything about anything, then before you know it, it’s the bloody Salem witch trials all over again.It’s also worth noting that the IARC also classifies some organic pesticides as carcinogenic too, does that mean that they cause cancer in the amounts consistent with actual practical usage? No, not necessarily, but the extreme emphasis some people are putting on glyphosate’s reclassification to the exclusion of the other “natural” compounds is a huge double standard, and double standards are usually a pretty good indication of a strong bias on the part of the people making the most noise about it.

SCIENCE IS FACT – ITS FINDINGS ARE FINAL . . . . . . . . BAN THE GROUPS CAUSING THE PANIC AND ACCEPT THE FINDINGS OF THOSE INDEPENDENT SCIENTIFIC BODIES WHO HAVE NOTHING ELSE TO DO OTHER THAN ENSURE THE FOOD WE EAT IS SAFE TO US. IF ACTIVE INGREDIENTS ARE FOUND TO BE UNSAFE BY THE BODIES CHARGED WITH KEEPING US SAFE THEN THEY SHOULD BE REMOVED WITHOUT QUESTION – THATS JUST COMMON SENSE. BUT TO REMOVE AN ACTIVE INGREDIENT BECAUSE SOMEONE WITH AN ULTERIOR MOTIVE STARTS A RUMOUR ABOUT IT . . . . . . . NO, THATS NOT GOOD ENOUGH.

6. Great headlines were made from the fact that glyphosate turned up at a minutely trace level in a Euro MP’s urine. Firstly, that shows that someone other than me is taking the p*ss out of Euro MPs, secondly and most importantly it shows that the human body is doing its job and removes anything remotely “waste” as far as its concerned; thirdly the levels of arsenic, cyanide, aluminium, lead, mercury, cadmium and selenium in the same urine sample, were most likely thousands of times greater than the glyphosate levels – but it wasn’t deemed necessary to include that fact in the headlines, because they’re not trying to get these elements banned are they . . . . the picture begins to come together doesn’t it? In fact bio-accumulation test results show that glyphosate does not accumulate in animals, birds, or aquatic species such as fish, clams or shrimp; therefore, glyphosate does not accumulate in the food chain. The lack of accumulation reflects the high water solubility of glyphosate and its rapid elimination from the body – also hence the aforementioned Euro MP’s widdle! in factcurrent regulations state that no more than 0.5 parts per billion (PPB) or microgrammes per litre of pesticide are allowed in our drinking water, but they allow 4x more mercury, 10x more cadmium, 20x more Selenium, 30x more lead, 100x more arsenic and 400x more aluminium and cyanide in that water . . . . perspective please. The fact its in there is irrelevant, as Paracelsus (the father of toxicology) said, “its the dose that makes the toxin”. Indeed, there’s enough flouride in 23 tubes of toothpaste to kill us, enough caffeine in 15 cans of redbull to kill us, 6 litres of water in one go will kill us . . . . . its the dose thats key, not the presence.

8. “Glyphosate contaminates the soil” is yet another spurious claim. The fact is that glyphosate quickly breaks down in the soil (within 40 days or so) into inert compounds such as carbon dioxide, water and other compounds that actually nourish some soil organisms and, what doesn’t break down just locks firmly onto soil particles and deactivates. This means it goes nowhere, it cannot get into the water table because its immobile and is locked onto soil particles. Glyphosate inhibits the production of an enzyme called EPSP synthase, which in turn prevents the plant from manufacturing certain aromatic amino acids essential for plant growth and life. The pathway is known as the Shikemic acid pathway. This pathway is unique to plants and to a tiny number of bacteria – bacteria which, incidentally, if the said amino acid production is disrupted, are able to harvest the missing aromatic amino acids from their immediate environment and therefore suffer no adverse effects as a result – much as a cereal plant will produce the enzyme malate which mimics the actions of sulphate if Sulphur is deficient. Its also fair to say that organic farms use extensive quantities of glyphosate in the 18 months leading up to organic certification, so surely that soil must also be contaminated if conventional agriculture use leads to contamination . . . . . the fact is that it doesn’t contaminate soils at all so the “contamination” argument is utterly moot.

9. FACT – No one has EVER died as a result of the correct use of ANY pesticide . . . . EVER, yet every year thousands of people die from eating wild berries and leaves – 4kg of Spinach or rhubarb has enough naturally occurring toxin in it to be lethal to an average adult. BAN BERRIES AND SPINACH

10. There are more toxins and carcinogenic compounds in 1 cup of coffee, a few glasses of wine, or a few pints of beer than there are in all the pesticide residues you ingest from your food over an entire year – perspective strikes again.

11. On the same scale of “dangerousness” from the IACR and WHO which is demonising glyphosate, glyphosate ranks at the same risk level as eating red meat, eating apples, in fact eating all fruit, hairdresser products, emissions from frying foods, smoke from wood burning and – perhaps most worryingly – working a night shift . . . . . . BAN NIGHT SHIFTS

12. Conservation tillage is an important part of the solution to soil erosion across the world, and glyphosate contributes to the success of this environmentally beneficial agricultural technique. In conservation tillage, enough crop residue is left on the soil surface to protect it from water & wind erosion. Without traditional cultivations, however, weeds emerge that interfere with planting or compete with growing seedlings for sun, water and nutrients. When glyphosate is sprayed on the field before planting, the competing weeds are killed while the residual vegetation continues to protect the soil surface from erosion and moisture loss. Crops can then be planted shortly after the glyphosate is applied. Conservation tillage programs also conserve energy, because fewer trips over the field are required, so farmers can significantly reduce their fossil fuel use. In fact, they can save around 70% of the fuel they would have used for conventional farming practices. As far as water contamination goes, several glyphosate formulations are actually approved for controlling weeds in waterways in both the U.S. and in Europe.

13. Generally, a 100-fold margin of safety is considered adequate for exposure to a herbicide. This means that the highest potential amount of herbicide residue in food or the highest potential amount of herbicide exposure to workers using it must be at least 100 times less than the amount of the compound that causes no effect in animal studies. Glyphosate’s safety margin is much greater than required. It has over a 1,000-fold safety margin in food, and over a 700-fold safety margin for workers who manufacture it or use it.

14. It is also worth noting that when glyphosate IS “shown” to be toxic or dangerous to non plant organisms in these “scientific studies” carried out by its opponents, invariably it is only when huge doses are injected directly into the subjects – this is NOT representative of how it is used in practice. To put that into context, you can take 2 paracetamol 4 times a day for headaches with no ill effects. BUT, if you were to take 1000 paracetamol 4 times a day, it would kill you. THIS IS NOT A JUSTIFICATION FOR BANNING PARACETAMOL!!!

To summarise, RISK and HAZARD are 2 very different things. Virtually all agrochemicals are HAZARDOUS, but we lessen the danger by understanding them, respecting and abiding by stautory regulations and directions, and by mitigating the RISK. The best analogy of this is a roller skate on the stairs. The roller skate is the HAZARD, the chances of standing on it is the RISK. What you do, is you make sure you know where the roller skate is and you take measures to avoid standing on it.

WHAT YOU DON’T BLOODY DO IS BAN ROLLER SKATES!

The truth is, that glyphosate is most certainly NOT the deadly, carcinogenic and mortally dangerous herbicide that those who wish to see its removal have hyped it up to be. When used as it is intended to be used, legally, safely and when all usage instructions and safety equipment recommendations on the labels are adhered to – as people like me ensure they always are in this industry of ours – it is almost totally innocuous to the operator and a thousand times less dangerous than that to us as consumers. Furthermore, when you compare its safety to products like paraquat that were replaced when its use increased following the burning ban over 25 years ago, it was a huge step forward in safety. Opponents of glyphosate often seem to hold this biased, utopian and wholly unfounded notion that, if they can manage to get glyphosate banned or even willingly abandoned under a wave of public pressure, then it would mean an improvement in both food and environmental safety, but the truth is that it would be more likely be the exact opposite of that. Weeds have to be controlled in agriculture, it has always been that way – that is an inescapable truth – and without glyphosate, we would have to develop something else to do the job, because currently there is no alternative other than cultivations which are useless in comparison. The problem is that the overwhelming likelihood is it would most probably be something far more caustic and far more dangerous to both us and the environment . . . but almost certainly not less so.

In 1989, virtually the entire Canadian milling wheat harvest had to be abandoned because wet weather had prevented fungicides being applied, and the resulting explosion of mycotoxins on the grain – which conventional fungicides would have prevented from forming – rendered the wheat totally unfit for human health. There is always a risk WITH EVERYTHING – too much sun will kill us, too much alcohol, caffeine, nicotine, salt, fat, calories, water, oxygen carbon dioxide, carbon monoxide, stress . . . . the list is endless, but understanding that those risks can be managed is fundamental to modern life and indeed our future as a species. Canada is testament to the fact that without man made chemicals, mother nature has an almost incalculable portfolio of ways to severely compromise our health and the health of the plants we are trying to grow for food.

And by the way, Just because an agrochemical is an “organic” or “natural” compound it doesn’t mean its safer than a synthetic one. Many compounds used in organic farming are derived from natural sources, which allows them to be used in organic farming. If you ask 100 people why they buy organic food, the overwhelming response is because “its grown without pesticides”. It isn’t. It just means the pesticides that are used are derived from natural sources, because many plants have their own “in-built” fungicidal properties, insecticides, phytoalexins and other toxins (lectins in kidney beans, glycoalkaloids in green potatoes, patulin in mouldy apples, mycotoxins produced by the moulds themselves) which enable plants to repel insects, disease etc, and its these compounds that are used in organic farming. Copper Sulphate is a naturally derived fungicide for example, Rotenone is a naturally derived insecticide. But just because its natural does not mean its safer than conventional chemicals – mother nature can be quite the chemist! In the late 1980’s, a fungicide we used on apples called “Alar” was removed from use overnight, because 2 parts per billion (2ppb) of its active ingredient – a HYDRAZINE based fungicide – was found in apples & this was considered to be far too carcinogenic to humans. The thing is, that mushrooms, peanut butter and burnt toast all contain levels of naturally ocurring HYDRAZINES well in excess of 500ppb – in excess of 250 times greater than the banned fungicide!!! That doesn’t mean these foods are mortally dangerous, but it DOES mean that natural is NOT always better for us and that its NOT always the safer option.

The constant drip drip drip of pseudo-science, lies and misinformation into the unsuspecting and trusting public domain regarding glyphosate MUST be stopped and, possibly more importantly, MUST be shown up for the calculated and cynical means to a dubious end that it really is, because in my opinion, the most dangerous thing about glyphosate is the van that delivers it!

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This movie needs to be watched by everyone , for if nothing more but to understand how a big part of economics works

please watch and pass on.  Knowledge is power

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Capitalism rejected by majority of adults under 30 by Mich Haverluck

With the self-proclaimed socialist, Sen. Bernie Sanders (D-Vt.) being the hands-down favorite for young Americans looking for a Democratic presidential candidate, the results from a recent survey confirms this Leftist bent, showing that more than half of American adults under 30 reject capitalism.

The study conducted by Harvard University was a shocker for many Americans, showing that capitalism is dying in the United States.

“The Harvard University survey, which polled young adults between ages 18 and 29, found that 51 percent of respondents do not support capitalism,” the Washington Post reports. “Just 42 percent said they support it.”

As the schools, media and entertainment industry continue to spread and promote socialism from decade to decade, targeting impressionable youth, the ideals of capitalism are slipping away in an aging America.

“As older generations die off, they will eventually become the leaders of this country,” explains Charisma News’ Michael Snyder. “And of course, our nation has not resembled anything close to a capitalist society for quite some time now.”

Along with an aging country being raised up under a new set of economic and political ideals, it is pointed out how Americans pay 97 different taxes every year, which ultimately ends up amounting to more than half of the average taxpayer’s annual income.

“So at best it could be said that we are running some sort of hybrid system that isn’t as far down the road toward full-blown socialism as most European nations are,” Snyder contends. “But without a doubt, we are moving in that direction, and our young people are going to be cheering every step of the way.”

Are we really socialist?

With just 33 percent of those participating in Harvard’s research outrightly indicating that they support socialism, some attest that those surveyed didn’t fully understand the questioning, but other studies have produced similar results — that America is quickly and consistently turning from capitalism to socialism.

And what is the younger generation’s rationale for turning to a system of government that has failed in societies around the world time and time again? Research shows that governments have sold the idea of equating socialism with goodwill and generosity, while dubbing capitalism as the system embraced by the greedy and materialists.

“The university’s results echo recent findings from Republican pollster Frank Luntz, who surveyed 1,000 Americans between the ages of 18 and 26 and found that 58 percent of respondents believed socialism to be the ‘more compassionate’ political system when compared to capitalism,” Snyder shared. “And when participants were asked to sum up the root of America’s problem in one word, 29 percent said ‘greed.’”

He goes on to maintain that evidence of this trend can be found in youth’s gravitation to Sanders and its aloofness to his Democratic rival for the White House, Hillary Clinton.

“This trend among our young people is very real, and you can see it in their support of Bernie Sanders,” Snyder continued. “For millions upon millions of young adults in America today, Hillary Clinton is not nearly liberal enough for them. So they have flocked to Sanders, and if they had been the only ones voting in this election season, he would have won the Democratic nomination by a landslide.”

Don’t take our word for it

Charisma News’ economics guru argues that students and young graduates simply overlook socialism’s failure when it can be witnessed right under their noses if they care to take a look around the world — from Europe to South America.

“Sadly, most of our young people don’t seem to understand how socialism slowly but surely destroys a nation,” Snyder asserts. “If you want to see the end result of socialism, just look at the economic collapse that is going on in Venezuela right now.”

He points to a report on the dire situation in Venezuela — brought about by socialism.

“Venezuela’s epic shortages are nothing new at this point … [n]o diapers or car parts or aspirin — it’s all been well documented,” Bloomberg reports in an article titled “Venezuela Doesn’t Have Enough Money to Pay for Its Money.” But now the country is at risk of running out of money itself.”

Out-of-control inflation and decreased economic productivity were also mentioned as severe consequences of adopting the problematic system.

“In a tale that highlights the chaos of unbridled inflation, Venezuela is scrambling to print new bills fast enough to keep up with the torrid pace of price increases,” the report added. “Most of the cash, like nearly everything else in the oil-exporting country, is imported. And with hard currency reserves sinking to critically low levels, the central bank is doling out payments so slowly to foreign providers that they are foregoing further business.”

Imminent landslide

With the evolution of America’s economic principles shifting from capitalism to socialism in the youth generation, it is contended that the country is about to hit the point of no return.

“We are losing an entire generation of young people,” Snyder insists. “These days, there is quite a lot of talk about how we need to get America back to the principles that it was founded upon, but the cold, hard reality of the matter is that most of our young people are running in the opposite direction as fast as they can.”

It is also contended that the progressive agenda is pulling young Americans down in much more than just economics.

“Surveys have found that [Americans under 30] are more than twice as likely to support gay rights and less than half as likely to regularly attend church as the oldest Americans are,” Snyder informed.

And he gives his analysis as to why these degrading changes are taking place.

“[T]he truth is that our colleges and universities have become indoctrination centers for the progressive movement,” Snyder impressed. “I know because I spent eight years at public universities in this country. The quality of the education that our young people are receiving is abysmal, but the values that are being imparted to them will last a lifetime.”

Things don’t look too bright for the younger youth generations under the polling age either.

“And, of course, the same things could be said about our system of education all the way down to the kindergarten level,” he continued. “There are still some good people in the system, but overall, it is overwhelmingly dominated by the progressives.”

Home-grown decadence

Besides the devolving state of education behind school and university gates, the dumbing-down and secularization of America is well under way — starting at the younger people’s nearest electronic device. When looking at the amount of time the average American spends tuning in to and operating their electronic devices, the sinking intellectual and moral climate in the country is better understood. Here’s a look:

“Watching live television: 4 hours, 32 minutes,” reads the first listing on Snyder’s article titled “Depressing Survey Results Show How Extremely Stupid America Has Become,” based on data from aNielson Report. “Watching time-shifted television: 30 minutes; Listening to the radio: 2 hours, 44 minutes; Using a smartphone: 1 hour, 33 minutes; Using Internet on a computer: 1 hour, 6 minutes … Overall, the average American spends about 10 hours a day consuming one form of entertainment or another.”

With the amount of time spent daily tuning into the influences emanating from these devices, Snyder maintains that such exposure cannot help but mold one’s mind.

“When you allow that much ‘programming’ into your mind, it is inevitable that it is going to shape your values, and our young people are more ‘plugged in’ than any of the rest of us,” Snyder concludes. “So yes, I believe that it is exceedingly clear why we should be deeply concerned about the future of America. The values that are being relentlessly pounded into the heads of our young people are directly opposed to the values that this nation was founded upon, and it is these young people that will determine the path that this country ultimately takes.”

 

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Possible CIT on or around the 23rd

vertical red line  for  CIT on INDU

 

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For those who love fantastic artwork

http://www.masterofstainedglass.com/artworks

 

 

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The 17% Consensus

← Is Stupidity The Main Driver Of Global Warming?The 17% ConsensusPosted on February 4, 2016 by stevengoddardScreenshot 2016-02-04 at 07.57.42 AM-down1990 ipcc_far_wg_I_chapter_07When Al Gore was elected vice-president in 1992, only 17% of climate scientists accepted his junk science, and everyone accepted the Medieval Warm period.Screenshot 2016-02-04 at 07.46.03 AM-down13 Dec 1992, Page 7 – at Newspapers.comThis did not make fraudster Al Gore happy, so he fixed it by cutting off funding for skeptics like Bill Gray. Gore’s creative use of funding made the Medieval Warm Period disappear, and created the 97% consensus.Screenshot 2016-02-04 at 08.09.14 AMIPCC Third Assessment Report – Climate Change 2001Last night Hillary said the only reason skeptics believe what they believe, is because the Koch Brothers are paying us and tell us what he have to say.

Source: The 17% Consensus

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The Harbingers That Scream America’s Days Are Numbered

Sword At-The-Ready

DoomProtests

Open borders, promotion of state totalitarianism, acceptance of Communism, a negative replacement birthrate, and a blind eye to Islam have sealed our fate.

Let me just say it: America is toast.  As is Western Civilization itself.

It’s committed suicide.  Just as every single Republic and Democracy that has come before ours has done.  What remains is a fragile shell that keeps up an appearance of strength and stability.   It masks the rot that has hollowed out the foundations and guts of a nation and people.  As a result: a perverse and wicked people denounce what was once foundational and celebrate what is anathema to our foundations;   institutional corruption exists at all levels of society;  an oppressive government is empowered under false promises to restore what once was.

We are witnessing the collapse of the civil society.

Our leaders have already abandoned the Constitution and replaced it with a defacto federal dictatorship.  Faith in the institutions that maintained liberty are now abandoned as…

View original post 3,237 more words

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On the constitution and healthcare

The girl is really worth watching , and you will learn some stuff

 

 

 

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Some fantastic art depicting prison life

Hatched in Prison

Hatched in Prison: The Art of Gil Batle

Gil Batle. Age 53. Born and raised in San Francisco to Filipino parents, in and out of five different California prisons over 20 years for fraud and forgery, now living on a small island in the Philippines. Batle’s self-taught drawing ability evolved behind bars into sophisticated and clandestine tattooing skills that protected him from murderous gang violence in prisons such as San Quentin, Chuckawalla, and Jamestown—”Gladiator School,” as it’s known to the unfortunate cognoscenti. Where Bloods, Crips, and Aryan Brotherhood gang-bangers in racially segregated cell-blocks rule with intimidation and threat, Batle’s facility for drawing was considered magic by the murderers, drug dealers, and armed robbers whose stories he now recounts in minutely carved detail on fragile ostrich egg shells. With only the men’s names, as he says, “changed to protect the guilty.”

Almost one out of every hundred Americans is now in prison, the largest percentage of any developed country in the world. The other 99 percent of us have little inkling of the ferocity of life inside. Articles about prison abuse appear weekly in the press, but are mere snapshots of the hard truth chronicled in Gil Batle’s orb-like relief carvings; each with an architecture of pictorial panels supported and separated by a fine lattice of chain-link fencing, razor-wire, or carved hand-cuffs. The violent men he knew, the sad mistakes that sometimes led to the incarceration of regular guys, the terrifying events he witnessed, and the bonds formed under the worst conditions, all appear with precise detail on pristine eggshells, nature’s most perfect creation and manifestation of life and birth.

– Norman Brosterman

Gil Batle Sanctuary, 2014, carved ostrich egg shell, 6.5 x 5 x 5 in.

Gil Batle It’s Your Fault II, 2014, carved ostrich egg shell, 6.5 x 5 x 5 in.

Gil Batle Reception: Fresh Fish, 2015, carved ostrich egg shell, 6.5 x 5 x 5 in.

Gil Batle Jargon, 2014, carved ostrich egg shell, 6.5 x 5 x 5 in.

Gil Batle 51/50 Dreams, 2015, carved ostrich egg shell, 6.5 x 5 x 5 in.

Gil Batle Jamestown, 2015, carved ostrich egg shell, 6.5 x 5 x 5 in.

Gil Batle Gang Chart II, 2015, carved ostrich egg shell, 6.5 x 5 x 5 in.

Hatched in Prison

 

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Happy birthday Jude where ever you may be

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DJ-30

INDU12242015

 

IN TIME  FOR  5  WAVE UP   AND HAVE A  CIT ON JAN 15.

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It is my opinion Armstrong is precisely correct on this subject

Just  think back in history  on just  how many times incidences like this were created just to get people to  rally  around their governments…..We  all  got to wake up…  FF

Is Turkey Trying to Distract the World From its Debt Crisis Shooting Down a Russian Plane?

There is something not quite right about this entire incident of Turkey shooting down the Russian fighter jet and then attacking the rescue helicopter. Sorry, but Turkey is way out of line when they KNEW that Russia had no intention of attacking Turkey. A argument that Turkey will defend its borders implies there is a threat to Turkey, not simply a drive-by. There was plainly no reason for Turkey to take such action. They assume they are a NATO member and thus Russia cannot fire back without starting World War III. This is a totally reckless incident and unimaginable conduct of Turkey under these conditions when they clearly knew they were NOT under attack from Russia no less a single fighter jet.

Even if it were true that the Russian jet strayed into Turkish airspace, at best there should have been a scramble of jets to “protect” its airspace without provoking war. This has been standard operational procedures between USA and Russia for years. It is not some coincidence that a Turkish film crew captured the incident. They were most likely tipped off to be at the right place at the right time.

This entire incident raises serious questions if the economic conditions in Turkey, being on the brink of a economic meltdown, did not deliberately try to provoke war to distract the world from its debt crisis. Turkey is being watched for many see it as the FIRST domino to fall in the Emerging Market Debt Crisis. This raises many, many serious questions about the motive behind this entire incident.

What is truly astonishing is that in a letter to the U.N. Security Council, Turkey openly stated that it had shot down the jet while in Turkish air space. It then even admits it also shot a second plane on a rescue mission – the helicopter as if that was some major threat. These actions make it appear that Turkey is praying for war because its government could collapse with its debt.

An armoured police vehicle drives through a barricade on fire during a demonstration in Istanbul
Putin rightfully said “We will never tolerate such crimes like the one committed today.” What Turkey did was unimaginable and the entire incident appears to create a diversion from its pending economic meltdown. There have been major demonstrations against government corruption in Turkey for the past few years.

NATO has called for Turkey and Russia to show restraint, the alliance’s Secretary-General Jens Stoltenberg said, “we stand in solidarity with Turkey and support the territorial integrity of our NATO ally”. This is reminiscent of precisely how World War I began because of treaties. Then Obama also said similar confrontations could be avoided if Russia stopped attacking “moderate” Syrian rebels who are battling forces loyal to the government of President Bashar al-Assad.

Obama is way out of line here for the US is totally responsible for ISIS since they funded these people to try to overthrow Assad in Syria. All of this for a pipeline to compete with Russia to get gas from Saudi Arabia to Europe. World leaders are full of shit and pretend this is about a dictator when in fact the overthrow of Syria was precisely what ISIS wanted. This mess lies squarely in the hands of the Obama Administration and then to have the audacity to pretend Turkey had a right to defend its airspace when not being attacked is just too much. These people NEED war to distract everyone from the Sovereign Debt Crisis that is causing the collapse of governments for a system of borrowing year after year with ABSOLUTELY no intention of ever paying any debt off.

The Japanese attacked Pearl Harbor. That was a viable attack. One plane flying close to the border and claiming it was 1km in your airspace giving you the right to shoot down a Russian plane is pure insanity. The fact that a film crew was there makes this seem to have been a deliberate act to cover up the economic meltdown of Turkey.

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Poem

I have been told that Armstrong knows
On how to forecast the next big lows
But when it comes to the next big top
You must look at the Ferris clock
For it is precise its timing right
It will guide one though the hype
To go short or just to cash in all
For it follows a very precise law

Now when it comes for the in-between
This is a time that u must wean
Your anger thoughts and your fears
And put your money management into gear
Use your fibs if you must
Or play the Bradley if you trust
For when it is all said and done
It is your bottom line that tells you if you have won

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dow change in trend

aaaNext CIT  a few days away this  could be a big one

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How Russian Mafia hurt an investment of mine.

If I remember right I owned about 7% of the shares in this company.

An American Businessman In Moscow: The Story Of Paul Tatum


By David Amoruso
Posted in 2001
Copyright © www.gangstersinc.nl

The first time the Western world became familiar with the crime entangled Russian business scene was when American businessman Paul Tatum was murdered by unknown assailants, reputedly over a business dispute. The murder sent shockwaves through the business community and had American congressmen screaming for justice. But after a few months it seemed like all was forgotten, Tatum as well as the corrupt Russian business scene. Maybe forgotten but hardly out of mind.

Paul Tatum was born in 1955 in Edmond, Oklahoma. He graduated from Edmond Memorial High School. In High School Tatum already showed an enormous drive to succeed and it became clear to his fellow students and his teachers that Tatum would excel at whatever he pursued. After dropping out of college Tatum began hopping from one business deal to and he eventually ended up doing fundraisers for the Republican Party. Tatum first came to Russia in 1985 at the age of 29 when he was with an American trade delegation. Tatum immediately saw the potential of the Russian market and began planning his path to Russian success. In 1987 after two years of planning and preparation Tatum was ready to conquer Russian business, Tatum set up a business center for foreign firms in Moscow: a first for the communist city. Not long after he and several other American businessmen founded Americom International Corporation. Two important associates in Americom were H.R. “Bob” Haldeman and Bernie Rome, two former members of President Nixon’s chief of Staff, Tatum came into contact with them while he was working as a fundraiser for the Republican Party. They helped Tatum get an ‘in’ with all the important people in Russia and enabled him to set up and expand his business without too much difficulties.

By 1990 Tatum’s big break came. The break came when Tatum’s company RedAmer Partnership joined up with Radisson Hotel Corporation and signed a contract with Goskom Intourist and later the Moscow City Government that agreed to construct an American hotel combined with a business center that would go by the name Intourist Redamer Hotel and Business Center (later changed to Radisson Slavyanskaya Hotel). A year later in June of 1991 the Hotel opened it’s doors. At the numerous parties at the hotel and business center Tatum mingled with powerful figures from Russian business, politics and eventually ,and inevitably, the Russian underworld.

The Moscow Underworld is a maze filled with a different Organized Crime group or gang on every corner. In the mid 1990s the Russian interior ministry did research on the amount of gangs in Moscow and came up with around 200 organizations, about 20 of those had branched out to other parts of the world. The Moscow underworld is made up out of groups from several different ethnic backgrounds. The main groups are Slavic (Russian), Georgian, Armenian and Chechen. With so many groups in Moscow the city’s businesses are inevitably tangled up with Organized Crime and vice versa. Organized Crime is said to control around 75% of all private businesses in Russia. With Russian criminals threatening legit business and demanding pay offs and ineffective Russian law enforcement it is not surprising then that the demand for private security sky rocketed seeing to it that across Russia private security businesses stepped into the forground. In seven years 25.000 Russian security firms were established employing between half a million to a million workers. These workers are mainly ex Spetznaz commandos or war veterans who are desperately seeking money and would rather stay legit then go into crime. The funny and dangerous thing about these security firms is however that most of them are controlled by Organized Crime groups. With this concrete basis Organized Crime has a lock-down on the entire legit business world in Russia. It was this shady world that Paul Tatum had to start dealing with.

Tatum’s Hotel was doing good business and things went great, a little inconvienant for business was the August 1991 Russian Coup but after the frenzy died down Tatum had even more opportunities. It is rumored that he was the one responsible for a direct phone line between the White House and Gorbachov’s camp. After the coup things settled down again and Tatum went back to business. A business that was ever changing. In 1992 Goskom Intourist was liquidated and the Moscow City Government became a new partner in the deal. No big deal for Tatum at first, his company still owned 80% of the 50% (50% that belonged to the American partners in the deal, the other 50% belonged to the Russian companies and Moscow City Government) of the property. But with the Moscow City Government came a partner that held a lot of power, more than any of the other partners in the deal. The Moscow City Government had connections throughout the Russian government and it’s system, it could pressure anyone to give in to their demands and their demands would become clear very fast.

Paul Tatum and The Moscow City Government had a quiet working relationship for about two years. After that time it started to rumble. In January of 1995 problems arose with the General Director of the American Partnership. The American hadn’t received his Russian visa and wasn’t going to receive one either. The loss of the General Director was a big blow for Tatum because now that position would be taken over by someone from the Russian partnership. Umar Dzhabrailov was named General Director. Dzhabrailov was a Chechen who had heavy connections within the Moscow City Government and used those connections to get into the position of General Director. But those weren’t the only connections Umar Dzhabrailov had, several law enforcement agencies including the F.B.I. and Interpol list Dzhabrailov as a member of Chechen Organized Crime. A report in the Russian press went even further calling Dzhabrailov a “known contract killer and one of a handful of Chechen mafia bosses operating in Moscow.” Dzhabrailov doesn’t deny his ties to Organized Crime but says they are “only social”. With Dzhabrailov as General Director things made a turn for the worse for Paul Tatum.

Paul Tatum didn’t realize it that fast but the Russian partnership had made ousting him it`s priority….by any means possible. While Tatum went about his business the Russian side showed it’s teeth. On St Valentine’s Day 1995 one of Tatum’s bodyguards was found beaten and stabbed in the chest with a pen knife. The bodyguard also had a message from his attackers: “Tell Paul it’s high time he left for home.” Most businessmen would’ve gotten the message and would’ve left town immediately, but not Paul Tatum. Tatum had grown a fondness for the Moscow nightlife, the clubs, the women. Tatum had enough money and liked to spend it and some even say he started acting like a mobster throwing around cash and surrounding himself with gorgeous women. Meanwhile the cold war for control of the Hotel and business center continued. Tatum had upped his bodyguards and after the attack on his bodyguard took extra security measures he now always had his bodyguards guard empty rooms so no one could plant bombs in them. He also decided to fight Dzhabrailov in the media he called him a “genuine Mafioso” who “has threatened he can kill me at any time” The fight had turned ugly and was now spilling from the boardrooms onto the public scene.

After months of warring between the Tatum and Dzhabrailov in February 1996 it looked like there would be a solution to Tatum’s problems. The solution was to bribe Dzhabrailov and the Moscow City Government. If Tatum would pay the sum of $1 millions dollars to a certain person all his troubles would end. $500.000 dollars would go to the Moscow City Government and the other $500.000 dollars would go to Dzhabrailov so that he would resign or step down as General Director. But instead of paying Tatum decided to take the matter to court. Tatum sued the Russian partners for $35 million dollars additional payments and payment of damages. In the media Tatum remained defiant as ever saying “They will have to shoot me to get rid of me” Things were heating up and Tatum was bracing himself for the hit. He now had said goodbye to the fast nightlife of Moscow preferring to stay in his Hotel in suites 850 and 852. Tatum was now told repeatedly by U.S. embassy oficials to leave Russia, Tatum replied in U.S.A. Today with: “I feel like I’m fighting a one-man battle.” “They’d rather pay than stand up and fight.” On September 30, 1996 Tatum went even further when he published a full page ad in a Moscow paper directed to Moscow mayor Yuri Luzhkov:

“Yuri M. Luzhkov: I must tell you that not one person here in Russia or abroad is fooled. All know of the dangerous activities. I implore you to show the world your resolve and commitment to become the catalyst to solve these grave problems-peacefully, efficiently, with fairness and justice for the investor and for the legal agreements under which their original activities were created. The world now awaits this signal. This is your choice and your crossroads. Where do you stand, Yuri M. Luzhkov? In the shadows or the bright sunlight?”

It would be Tatum’s last defiant gesture.

On November 3rd, 1996 around 5.00 PM Paul Tatum left his Hotel and headed towards the Kievskaya metro station, where he had arranged to meet someone. When Tatum arrived there with his bodyguards the person he was supposed to meet wasn’t there, instead a man walked up towards Tatum and shot him eleven times from five meters distance with an AK-47. Tatum’s bodyguards did nothing to protect there boss, the killer dropped his weapon and fled the scene unharmed. Tatum’s bodyguards rushed their wounded boss to the hospital but to no avail Paul Tatum died shortly after his arrival. Shortly after the news of Tatum’s death Dzahrailov and the Moscow City Government took undisputed control of the Radisson Slavyanskaya Hotel and business center. He denied any role in the Tatum murder but did say: “What goes around, comes around”. Dzahrailov also saw to it that a planned memorial service at the hotel was nixed as well as Tatum’s wishes to be buried at the prestigious Novodevichy Cemetery. Tatum was eventually cremated and interred in the Moscow Novodevitsji cemetery. “Paul never learned it was their country,” said Tatum’s Americom associate Bernie Rome. “He was like a bull in a china shop. He didn’t understand you have to play by Russian rules. It’s all very sad.”

Tatum’s murder shows how corrupt Russian business had become. Russian business is controlled by Organized Crime groups and powerful businessmen who use strong arm tactics and criminal ways to get deals done. With Russian law enforcement and the Russian courts inefective Russian business has absorbed Mafia tactics to get it’s demands done. It will be interesting to see how and if Russian business will ever de-criminalize and return to normal business procedures such as suing each other over a business dispute instead of putting out a murder contract.

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Possible low on shares market on 21 august.

dowaugust2015

I  have been wrong before can be again but think we have about 100  more point to  drop   than  we  should get some good buying coming in. But many stocks that I have looked at have broke their support area so  be  careful.

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All I know is if you want to save the USA income tax must go

Economists Say Trump is Wrong

FILE - In this June 16, 2015 file photo, Donald Trump announces that he seek the Republican nomination for president, in the lobby of Trump Tower in New York. Trump vows to bring back the millions of American jobs lost to China and other foreign competitors if voters put him in the White House. Economists say he wouldn’t stand a chance: Trump’s boundless self-confidence is no match for the global economic forces that took those jobs away. (AP Photo/Richard Drew, File)

Yahoo is reporting that economists say Trump could not bring jobs back to America from China and other countries. Well, the economists are wrong. All it would take is a repeal of the income tax. Nearly half of the cost of labor is taxation. If you want to create jobs, cut the income taxes. That does not mean merely corporate. That would not reverse the trend alone. You need to eliminate payroll taxes and personal income taxes.

Founding-Fathers

The repeal of income taxes should apply to states as well and any taxation should be restricted to what the Founding Fathers concluded – indirect taxation only. That means consumption taxes EXCLUSIVELY. Then it also does not matter who is here. Illegal aliens would pay the same as citizens. Income taxes only apply to citizens or those with Greencards.

Oldest Street-Elfreths-Alley-Philadelphia

This is Elfreth’s Alley in Philadelphia which is the oldest continuously inhabited residential street in America, dating from 1702. Notice there are two aspects driven by property taxes. First, row homes developed because there was a tax on windows. Secondly, the phrase taking a step up in life refers to the number of steps you had to enter your home. You were taxed per step.

We do not own our homes for you cannot ever retire even after paying off your mortgage since you still have to pay property taxes. If you do not pay your property taxes, they come take your house and throw you out on the street. Property taxes are the most UNDEMOCRATIC tax we have and are a remnant of a totalitarian state. Today, it is government workers who demand pensions and those are paid by exploiting the people.

Government should be privatized to eliminate pensions. We have to face the fact. Politicians could never efficiently manage anything. They are hopeless. Government departments should be privatized simply for real management and then we would not have this crisis of unfunded pensions that is bankrupting the states. No state is capable of simple fiscal management because they are not competitive, instead, they abuse their power of taxation to fill in gaps of mismanagement. Taxes clearly alter our lives and it is never for the better at the end of the day.

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The Colossal Hoax Of Organic Agriculture

The Colossal Hoax Of Organic Agriculture
By Henry I. Miller and Drew L. Kershen

Consumers of organic foods are getting both more and less than they bargained for. On both counts, it’s not good.

Many people who pay the huge premium—often more than a hundred percent–for organic foods do so because they’re afraid of pesticides. If that’s their rationale, they misunderstand the nuances of organic agriculture. Although it’s true that synthetic chemical pesticides are generally prohibited, there is a lengthy list of exceptions listed in the Organic Foods Production Act, while most “natural” ones are permitted. However, “organic” pesticides can be toxic. As evolutionary biologist Christie Wilcox explained in a 2012 Scientific American article (“Are lower pesticide residues a good reason to buy organic? Probably not.”): “Organic pesticides pose the same health risks as non-organic ones.”

SAN FRANCISCO, CA – JUNE 13: A label stating ‘Produce of USA’ is wrapped around a bunch of organic carrots at a farmers market on June 13, 2012 in San Francisco, California. (Photo by Justin Sullivan/Getty Images)

Another poorly recognized aspect of this issue is that the vast majority of pesticidal substances that we consume are in our diets “naturally” and are present in organic foods as well as non-organic ones. In a classic study, UC Berkeley biochemist Bruce Ames and his colleagues found that “99.99 percent (by weight) of the pesticides in the American diet are chemicals that plants produce to defend themselves.” Moreover, “natural and synthetic chemicals are equally likely to be positive in animal cancer tests.” Thus, consumers who buy organic to avoid pesticide exposure are focusing their attention on just one-hundredth of one percent of the pesticides they consume.

  • Some consumers think that the USDA National Organic Program (NOP) requires certified organic products to be free of ingredients from “GMOs,” organisms crafted with molecular techniques of genetic engineering. Wrong again. USDA does not require organic products to be GMO-free. (In any case, the methods used to create so-called GMOs are an extension, or refinement, of older techniques for genetic modification that have been used for a century or more.) As USDA officials have said repeatedly:

Organic certification is process-based. That is, certifying agents attest to the ability of organic operations to follow a set of production standards and practices which meet the requirements of the Organic Foods Production Act of 1990 and the [National Organic Program] regulations . . . If all aspects of the organic production or handling process were followed correctly, then the presence of detectable residue from a genetically modified organism alone does not constitute a violation of this regulation. [emphasis added]

Putting it another way, so long as an organic farmer abides by his organic system (production) plan–a plan that an organic certifying agent must approve before granting the farmer organic status–the unintentional presence of GMOs (or, for that matter, prohibited synthetic pesticides) in any amount does not affect the organic status of the farmer’s products or farm.

Under only two circumstances does USDA sanction the testing of organic products for prohibited residues (such as pesticides, synthetic fertilizers or antibiotics) or excluded substances (e.g., genetically engineered organisms). First, USDA’s National Organic Production Standards support the testing of products if an organic-certifying agent believes that the farmer is intentionally using prohibited substances or practices. And second, USDA requires that certifying agents test five percent of their certified operations each year. The certifying agents themselves determine which operations will be subjected to testing.

The organic community, including the International Federation of Organic Agricultural Movements (IFOAM), supports the USDA’s lenient testing protocols and opposes more frequent mandatory testing of organic products for prohibited and excluded substances.

The organic community and USDA offer two explanations for such minimal testing. First, they emphasize that organic farming is process-based, not product-based, meaning that what counts for organic certification are the approved organic system (production) plan and the farmer’s intention to comply with that plan as reflected through record-keeping obligations.

Second, widespread testing would impose substantial costs on organic farmers, thereby increasing production costs beyond the already greater expenses that organic farmers incur. Organic farmers offset these higher productions costs by earning large premiums for organic products, but there is always a price point beyond which consumers will shift to cheaper non-organic.

Few organic consumers are aware that organic agriculture is a “trust-based” or “faith-based” system. With every purchase, they are at risk of the moral hazard that an organic farmer will represent cheaper-to-produce non-organic products as the premium-priced organic product. For the vast majority of products, no tests can distinguish organic from non-organic—for example, whether milk labeled “organic” came from a cow within the organic production system or from a cow across the fence from a conventional dairy farm. The higher the organic premium, the stronger the economic incentive to cheat.

Think such nefarious behavior is purely theoretical? Think again. USDA reported in 2012 that 43 percent of the 571 samples of “organic” produce tested violated the government’s organic regulations and that “the findings suggest that some of the samples in violation were mislabeled conventional products, while others were organic products that hadn’t been adequately protected from prohibited pesticides.”

How do organic farmers get away with such chicanery? A 2014 investigation by the Wall Street Journal of USDA inspection records from 2005 on found that 38 of the 81 certifying agents–entities accredited by USDA to inspect and certify organic farms and suppliers—“failed on at least one occasion to uphold basic Agriculture Department standards.” More specifically, “40% of these 81 certifiers have been flagged by the USDA for conducting incomplete inspections; 16% of certifiers failed to cite organic farms’ potential use of banned pesticides and antibiotics; and 5% failed to prevent potential commingling of organic and non-organic products.”

Speaking of trust and faith—or lack thereof–in organic foods, there was the example of holier-than-thou Whole Foods importing large amounts of its supposedly “organic” produce from China, of all places. Those imports even included Whole Foods’ house brand, “California Blend.” (Yes, you read that correctly.)

Organic agriculture is an unscientific, heavily subsidized marketing gimmick that misleads and rips off consumers, both because of the nature of the regulations and cheating. The old saying that you get what you pay for doesn’t apply when you buy overpriced organic products.

As can be seen from the popularity of rip-off artists like Whole Foods markets, organic foods are popular. The U.S. market for organic produce alone was $12.4 billion last year.

Some of the devotion from consumers attains almost cult-like status, which is why a recent article by Stanford University researchers that was dismissive of health or nutritional benefits of organic foods created such a furor.

The study, by researchers in the university’s Center for Health Policy and published in the Annals of Internal Medicine, was a meta-analysis in which results from the scientific literature were combined but no new, original laboratory work was conducted. Data from 237 studies were aggregated and analyzed to determine whether organic foods are safer or healthier than non-organic foods. They concluded that fruits and vegetables that met the criteria for “organic” were on average no more nutritious than their far cheaper conventional counterparts, nor were those foods less likely to be contaminated by pathogenic bacteria like E. coli or Salmonella.

The investigators themselves were surprised by the result. “When we began this project, we thought that there would likely be some findings that would support the superiority of organics over conventional food,” according to physician Dr. Dena Bravata.

Many devotees of organic foods purchase them in order to avoid exposure to harmful levels of pesticides. But that’s a poor rationale: Although non-organic fruits and vegetables do have more pesticide residue, more than 99 percent of the time the levels are below the permissible, very conservative safety limits set by regulators – limits that are established by the Environmental Protection Agency and enforced by the Food and Drug Administration.

Ironically, the designation “organic” is itself a synthetic construct of bureaucrats that makes little sense. It prohibits the use of synthetic chemical pesticides – although there is a lengthy list of exceptions listed in the Organic Foods Production Act – but permits most “natural” ones (and also allows the application of pathogen-laden animal excreta as fertilizer).

These permitted pesticides can be toxic. As evolutionary biologist Christie Wilcox explained in a September 2012 Scientific American article (“Are lower pesticide residues a good reason to buy organic? Probably not.”): “Organic pesticides pose the same health risks as non-organic ones. No matter what anyone tells you, organic pesticides don’t just disappear. Rotenone is notorious for its lack of degradation, and copper sticks around for a long, long time. Studies have shown that copper sulfate, pyrethrins, and rotenone all can be detected on plants after harvest—for copper sulfate and rotenone, those levels exceeded safe limits. One study found such significant rotenone residues in olives and olive oil to warrant ‘serious doubts…about the safety and healthiness of oils extracted from [fruits] treated with rotenone.’” (There is a well-known association between rotenone exposure and Parkinson’s Disease.)

There is another important but unobvious point about humans’ ingestion of pesticides: The vast majority of pesticidal substances that we consume occur in our diets “naturally,” and they are present in organic foods as well as conventional ones. In a landmark research article published in the Proceedings of the National Academy of Sciences, University of California, Berkeley, biochemist Bruce Ames (https://ketchemandfleezem.wordpress.com/2014/07/03/unsprayed-produce-creates-natural-carcinogens-to-protect-itself-or-why-do-people-ignore-the-scienice-on-how-dangrous-organic-vegetables-can-be/) and his colleagues found that “99.99 percent (by weight) of the pesticides in the American diet are chemicals that plants produce to defend themselves. Only 52 natural pesticides have been tested in high-dose animal cancer tests, and about half (27) are rodent carcinogens; these 27 are shown to be present in many common foods.”

The bottom line of Ames’ experiments: “Natural and synthetic chemicals are equally likely to be positive in animal cancer tests. We also conclude that at the low doses of most human exposures the comparative hazards of synthetic pesticide residues are insignificant.”

In other words, consumers who buy overpriced organic foods in order to avoid pesticide exposure are focusing their attention on 0.01% of the pesticides they consume.

There seems to be confusion about these issues even at the American Association of Pediatrics (AAP), which in October released a report that appeared to endorse organic produce because of its lower levels of pesticide residues, while at the same time admitting, “in the long term, there is currently no direct evidence that consuming an organic diet leads to improved health or lower risk of disease.”

Perhaps the most illogical tenet of organic farming is the exclusion of “genetically engineered” plants – but only if they were modified with the newest, best, most precise and predictable techniques. Except for wild berries and wild mushrooms, virtually all the fruits, vegetables and grains in our diet have been genetically improved by one technique or another – often as a result of seeds being irradiated or genes being moved from one species or genus to another in ways that do not occur in nature. But because genetic engineering is more precise and predictable, the technology is at least as safe as – and often safer than – the modification of food products in cruder, “conventional” ways that can qualify as organic.

There are examples of new varieties of plants, including two varieties each of potatoes and squash and one of celery, that have sickened or killed consumers, but all of these were the result of conventional genetic modification – which would qualify for organic farming.

The organic community remains unswayed by either biology or history, however, and modern genetic engineering remains prohibited from organic agriculture. This bias against genetic engineering in organic agriculture makes recommendations such as those of the American Association of Pediatrics especially dubious because as genetically engineered “biofortified” foods with enhanced levels of vitamins, antioxidants and so on appear, none of them will be available to organophiles.

Another rationale for buying organic is that it’s supposedly better for the natural environment. But the low yields of organic agriculture – typically 20-50 percent lower than conventional agriculture – impose various stresses on farmland and especially on water consumption. A British meta-analysis published in September of this year in the Journal of Environmental Management identified some of the environmental stresses that were higher in organic, as opposed to conventional, agriculture: “ammonia emissions, nitrogen leaching and nitrous oxide emissions per product unit were higher from organic systems,” as was “land use, eutrophication potential and acidification potential per product unit.”
“Sustainable” has become a buzzword that is applicable not only to agriculture and energy production but to sectors as far afield as the building and textile industries. Some universities offer courses or even degrees in “sustainability.” Many large companies tout the concept and boast a sustainability department, and the United Nations has hundreds of projects concerned with sustainability throughout its many agencies and programs.

But as with many vague, feel-good concepts–“natural” and “locavorism” come to mind–it contains more than a little sophistry. For example, sustainability in agriculture is often linked to organic food production, whose advocates tout it as a “sustainable” way to feed the planet’s expanding population. According to the Worldwatch Institute, “Organic farming has the potential to contribute to sustainable food security by improving nutrition intake and sustaining livelihoods in rural areas, while simultaneously reducing vulnerability to climate change and enhancing biodiversity.” This is wishful thinking, if not outright delusion.

What does “sustainable” really mean, and how does it relate to organic methods of food production, compared to the more advanced methods of today’s modern farming practices? Definitions vary widely; a typically subjective and circular definition comes from Dr. John E. Ikerd, extension professor at the University of Missouri:

A sustainable agriculture must be economically viable, socially responsible and ecologically sound. The economic, social and ecological are interrelated, and all are essential to sustainability. An agriculture that uses up or degrades its natural resource base, or pollutes the natural environment, eventually will lose its ability to produce. . . a sustainable agriculture must be all three–ecologically sound, economically viable and socially responsible. And the three must be in harmony.

The organic movement touts the sustainability of their methods, but its claims do not withstand scrutiny. For example, a study published earlier this year in the journal Hydrology and Earth System Sciences found that the potential for groundwater contamination can be dramatically reduced if fertilizers are distributed through the irrigation system according to plant demand during the growing season. But organic farming depends on compost, the release of which is not matched with plant demand.

The study found that “intensive organic agriculture relying on solid organic matter, such as composted manure that is implemented in the soil prior to planting as the sole fertilizer, resulted in significant down-leaching of nitrate” into groundwater. Especially with many of the world’s most fertile farming regions in the throes of drought and aquifer depletion–which was the subject of a 60 Minutes segment on November 16–increased nitrate in groundwater is hardly a mark of sustainability.

Moreover, although composting gets good PR as a “green” activity, at large scale it generates a significant amount of greenhouse gases (and is also often a source of pathogenic bacteria applied to crops).

Organic farming might work well for certain local environments on a small scale, but its farms produce far less food per unit of land and water than conventional ones. The low yields of organic agriculture–typically 20%-50% percent lower than conventional agriculture–impose various stresses on farmland and especially on water consumption. A British meta-analysis published in the Journal of Environmental Management (2012) addressed the question whether organic farming reduces environmental impacts. It identified some of the stresses that were higher in organic, as opposed to conventional, agriculture: “ammonia emissions, nitrogen leaching and nitrous oxide emissions per product unit were higher from organic systems,” as were “land use, eutrophication potential and acidification potential per product unit.”

Lower organic crop yields are largely inevitable, given the systematic, arbitrary rejection of various advanced methods and technologies in organic farming. Organic affords limited pesticide options, difficulties in meeting peak fertilizer demand, and the lack of access to genetically engineered varieties. If the scale of organic production were significantly increased, the lower yields would increase the pressure for the conversion of more land to farming and on water supplies, both of which are serious environmental issues.

Stanford University’s Sustainable Choices website defines sustainability this way: “the ability to provide for the needs of the world’s current population without damaging the ability of future generations to provide for themselves. When a process is sustainable, it can be carried out over and over without negative environmental effects or impossibly high costs to anyone involved.”

That definition is compatible with the notion that sustainability is favored by maximizing human ingenuity and the quest for progress—that is, for processes and products that are more efficient, less costly, and at the same time, less harmful to the environment. Organic food producers need not apply.

Henry I. Miller, a physician and molecular biologist, is the Robert Wesson Fellow in Scientific Philosophy and Public Policy at Stanford University’s Hoover Institution; he was the founding director of the FDA’s Office of Biotechnology. Richard Cornett is the communications director for the Western Plant Health Association, a nonprofit agricultural trade group based in Sacramento, Calif. 

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Obama & Prison Reform

Obama & Prison Reform

US President Barack Obama speaks as he tours the El Reno Federal Correctional Institution in El Reno, Oklahoma, July 16, 2015. Obama is the first sitting US President to visit a federal prison, in a push to reform one of the most expensive and crowded prison systems in the world. AFP PHOTO / SAUL LOEBSAUL LOEB/AFP/Getty Images

Obama’s visit to El Reno Federal prison (Correctional Institution) in Oklahoma is probably one of the few acts he has done that I agree with. Like most people, I assumed the justice system was fair – until I was confronted with the absurdity of American justice. Only then did I begin to appreciate how corrupt the system really is. The stereotype of inmates that even I had in mind was a ruthless, violent type of character. Only when I entered the system myself did I see the truth – only about 4% were violent, at best. For you see, the Feds have “conspiracy” which can be used to charge and sentence individuals to the same amount of time as if they had actually committed the crime, instead of merely thinking about it.

I met a priest who wired money to China as a favor to help someone whom he believed needed the money for an operation. That recipient turned out to be a drug dealer. Others agreed to bag some crack in return for money to pay for a funeral. One was a superintendent in an apartment complex and drug dealers merely said he would let them know if the police were around. Another was asked for the location of someone, he responded by saying something to the effect of “over there” and the people asking the question ending up killing that man. He later committed suicide to avoid serving life at 22 on a conspiracy of murder charge for merely answering the question, “Where is he?” Conspiracy is a standard crime for everyone charged by the government, since you never actually have to prove a crime was committed. The crime is merely an agreement.

Long sentences are destructive for you cannot lock up people for decades and then expect them to return to society. It is just inhumane. I had a black inmate crying in my cell because his sentence was up and he did not want to leave. He was about 55 and had spent nearly his entire adult life in prison since the age of 19. His family was dead; he had no one to return to and was unable to envision having a job. This is what you call institutionalized.  All he can do is quickly commit some crime to get back inside the prison. This is extremely common. Inside, it is free room and board. There is no taxation, no telemarketing calls, and no one can visit you unless you put them on a list. It is more like a monastic lifestyle in Federal prison for very few people are actually violent.

Besides it costing more to house an inmate than most people pay to go to college, the social damage is huge. The people in prison for drugs are never the real kingpins. Typically they are street sellers, lock them up and another takes their place. There is no actual endgame. Besides that, crime rises with economic decline and falls when the economy expands.

Ashcroft-1

The Clintons signed for mandatory minimums, which sent the prison population up to 25% of the world’s prison population, despite the fact that the U.S. has just 5% of the world’s population. Hillary counts on the minority black vote, yet her and her husband signed the law that has imprisoned more blacks than all the presidents before them. Then Bush Jr put in John Ashcroft at the head of the Justice Department. Besides this nut-job putting a tarp around the bronze statue of Justice because her bare breasts offended him, he changed the rules whereby a prosecutor would not get credit for a conviction unless the person was sentenced to prison. Between the Clintons and Bush Jr, they wiped out American liberty and justice for all. The crisis is conspiracy – eliminate that and we return to a justice system that punishes only people who actually commit crimes.

The proposal to eliminate the question asking if someone is a felon on employment applications is certainly reasonable. Why? They are typically discriminated against since the public remains ignorant of the abuse of the Justice System. Additionally, even J.P. Morgan Chase is a felon since the banks were criminally charged for their manipulations, yet the SEC waived their automatic ban from having a banking license that applies to felons. What is good for exempting the bankers, should apply to everyone else.

If I were President, I would pardon everyone charged with conspiracy who did not actually commit the crime. Conspiracy use to be a maximum sentence of 2 years. When Congress made the time for conspiracy the same as committing the crime, the prisons filled and prosecutors no longer had to prove anyone actually committed a crime – they just had to be remotely connected to someone.

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The Solution – the ONLY Solution otherwise a new dark ages

The Solution – the ONLY Solution

DeFINF-CL

QUESTION:

Can you please explain how your Solution is different than what Central Banks around the world are currently doing  and appear to be poised to expand on?  And how it changes anything?

As I understand it your plan is to exchange all national/soverign government debt for private equity credits, which smells alot like a second currency, and abandon federal taxation to save pensions and the economy.  Your plan is to simply print enough dollars to fund the federal government.

ANSWER: Central banks are monetizing debt, this much is true. However, that accomplishes nothing for they cannot return the system back to a pre-2007 state. They leave the debt intact and a rise in interest rates will blow up the budgets, to which governments will then target more aggressively in tax collection.

By doing a debt-to-private equity swap, that is substantially different from constructing more roads, buildings, or Dunkin Donuts. Investment in infrastructure is a short-term impact and does not create long-term jobs. You have to keep building to maintain employment and those things do not contribute to the creation of national wealth as they too consume it. True, building a plant will enable a business to create wealth. By itself, a building is a depreciating asset that ultimately needs to be replaced.

A debt-to-private equity swap would be the creation of small business, which employs 70% of the civil work force. The major companies have reached saturation levels and are buying their own shares back. So, we are not talking about swapping $17 trillion of debt for more Apple, Amazon, PayPal, or IBM shares. We are talking about creating an opportunity to fund small business, which the banks gave up on for if they do not have 120% collateral, they cannot borrow from banks. Venture capital creates wealth and this is substantially different.

USIntAs%Total

Additionally, we can see that up to 70% of the national debt is accumulative interest expenditures. The central banks are not eliminating the debt; they are buying it and leaving interest still payable, which will maintain the tax collection. The debt will continue to rise and so will taxes, sucking in everything like a black hole, and diverting capital from creating employment consumed purely by bondholders. Detroit went bust when pensions consumed more than 50% of total revenue. Government could not raise taxes and the pensions kept sucking in everything to the point where public services collapse. You pay taxes for nothing.

If we eliminate taxes, we will restore our liberty and eliminate FATCA, restoring the world economy. The private equity swap would convert Social Security into a national wealth fund that really invested, creating jobs for the youth and the displaced government workers. Eliminate tax collection and it would shrink government by 33%, not to mention save the world economy and our liberty.

This is just the start. Central banks quantitative easing does none of this. On top of that, they will come after your assets to pay the bondholders who convinced them they fail unless they are paid. Additionally, the cost of labor would decline by 50% by eliminating taxes and people would then fund corporations. Corporate taxes are very destructive for the very same capital is taxes three times. You buy shares with after tax dollars. The corporation pays taxes. It pays a dividend tax, and then the shareholder pays income tax on the dividend. Eliminate that and people will secure their own future pensions with equities. This would create a huge domestic job market and it will cause companies to bring jobs home where it will be more efficient.

Printing money to fund government capped at say 5% of GDP will be a huge reduction in government. Eliminate taxation and we will reduce government. There were SEVEN agencies that all approved the CDOs the banks sold which blew up the world in 2007. Not a single one of them understood what they were approving. There should be ONE agency, not SEVEN, and it would be cheaper to pay for expertise in a single agency rather than lawyers who know nothing, yet think they do. The savings in reducing the size and servicing the debt will more than offset the cost. Plus, you are trapped in the old idea that increasing money supply automatically creates inflation. Sorry, even QE1-3 proved that theory is dead wrong. As long as people save or hoard, increasing the money will by no means cause prices to rise. The money supply MUST increase with the population or you get DEFLATION.

That is just skimming the surface. Those who are living in the 16th century and say, “oh just printing 5% to pay for government is horrible and inflationary”, I say you will pray on hands and knees for inflation by the time they are done confiscating everything you have to pay the bondholders. Wake up. This is the 21st century.

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Eight Weeks Since Huffington Post Announced The End Of Western Water

Eight Weeks Since Huffington Post Announced The End Of Western Water.

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