Goal Digger,
My apologies: wasn’t wearing my glasses and was skimming full speed…
More for the Righteous Indignation file: http://www.democracynow.org/2008/11/25/naomi_klein_robert_kuttner_and_michael
Naomi Klein, Robert Kuttner and Michael Hudson Dissect Obama’s New Economic Team & Stimulus Plan
(This is a mere one hour program that will make you feel as if you had suffered indignities for years.)
The central bankers and associates are running for the exits before the doors slam shut in January 2009, but not before filling their pockets. The public of Joe "NASCAR" SixPack are not completely ignorant, although tragically misinformed. Sadly, Obama’s election triggered a run on the gun stores. Possibly his inaugeration will trigger a cash run on the banks. 2009 will look like 1859.
Though Citicorp is deemed too big to fail, it’s hardly
reassuring to know that it’s been allowed to sink its fangs into the
Mother Zombie that the US Treasury has become and sucked out a
multi-billion dollar dose of embalming fluid so it can go on pretending
to be a bank for a while longer. I employ this somewhat clunky metaphor
to point out that the US Government is no more solvent than the
financial zombies it is keeping on walking-dead support. And so this
serial mummery of weekend bailout schemes is as much of a fraud and a
swindle as the algorithm-derived-securities shenanigans that induced
the disease of bank zombification in the first place. The main question
it raises is whether, eventually, the creation of evermore zombified US
dollars will exceed the amount of previously-created US dollars now
vanishing into oblivion through compressive debt deflation.
My guess, given the usual time-lag factor, is that the
super-inflation snap-back will occur six to eighteen months from now.
And the main result of all this will be our inability to buy the
imported oil that comprises two-thirds of the oil we require to keep
WalMart and Walt Disney World running. At some point, then, in the
early months of the Obama administration, we’ll learn that "change" is
not a set of mere lifestyle choices but a wrenching transition away
from all our familiar and comfortable habits into a stark and rigorous
new economic landscape.
The credit economy is dead and the dead credit residue of that
dead economy is going where dead things go. It came into the world as
"money" and it is going out of this world as a death-dealing disease,
and we’re not going to get over this disease until we stop generating
additional zombie money out of no productive activity whatsoever. The
campaign to sustain the unsustainable is, besides war, the greatest
pitfall this society can stumble into. It represents a squandering of
our remaining scant resources and can only produce the kind of extreme
political disappointment that wrecks nations and leads to major
conflicts between them. I don’t know how much Mr. Obama buys into the
current adopt-a-zombie program – his Treasury designee Timothy
Geithner was apparently in on this weekend’s Citicorp deal – but the
President would be wise to steer clear of whatever the walking dead in
the Bush corner are still up to.
<MORE> http://jameshowardkunstler.typepad.com/clusterfuck_nation/
> Unless and until there is some John Galt-esque broadcast to the people they will remain clueless.
Good luck getting people to listen to anything longer than three sentences, and if it’s non-trivial and requires stringing together fact(s) using (gasp) logic, then forget it. Sigh. Glad I’m not cynical.
It just gets more and more frustrating as we go along. sigh
By Michael Ruppert who has been on Citibank for a long time. This is from an article he published in 2001.
U.S. Banks and The Dirty Money Empire
Washington and the mass media have portrayed the U.S. as being in the forefront of the struggle against narco trafficking, drug laundering and political corruption: the image is of clean white hands fighting dirty money. The truth is exactly the opposite. U.S. banks have developed a highly elaborate set of policies for transferring illicit funds to the U.S., investing those funds in legitimate businesses or U.S. government bonds and legitimating them. The U.S. Congress has held numerous hearings, provided detailed exposés of the illicit practices of the banks, passed several laws and called for stiffer enforcement by any number of public regulators and private bankers. Yet the biggest banks continue their practices, the sum of dirty money grows exponentially, because both the State and the banks have neither the will nor the interest to put an end to the practices that provide high profits and buttress an otherwise fragile empire.
First thing to note about the money laundering business, whether criminal or corrupt, is that it is carried out by the most important banks in the USA. Secondly, the practices of bank officials involved in money laundering have the backing and encouragement of the highest levels of the banking institutions - these are not isolated cases by loose cannons. This is clear in the case of Citibank’s laundering of Raul Salinas (brother of Mexico’s ex-President) $200 million account. When Salinas was arrested and his large scale theft of government funds was exposed, his private bank manager at Citibank, Amy Elliott told her colleagues that "this goes in the very, very top of the corporation, this was known…on the very top. We are little pawns in this whole thing" (p.35).
Citibank, the biggest money launderer, is the biggest bank in the U.S., with 180,000 employees world-wide operating in 100 countries, with $700 billion in known assets and over $100 billion in client assets in private bank (secret accounts) operating private banking offices in 30 countries, which is the largest global presence of any U.S. private bank. It is important to clarify what is meant by "private bank."
Private Banking is a sector of a bank which caters to extremely wealthy clients ($1 million deposits and up). The big banks charge customers a fee for managing their assets and for providing the specialized services of the private banks. Private Bank services go beyond the routine banking services and include investment guidance, estate planning, tax assistance, off-shore accounts, and complicated schemes designed to secure the confidentiality of financial transactions. The attractiveness of the "Private Banks" (PB) for money laundering is that they sell secrecy to the dirty money clients. There are two methods that big Banks use to launder money: via private banks and via correspondent banking. PB routinely use code names for accounts, concentration accounts (concentration accounts co-mingles bank funds with client funds which cut off paper trails for billions of dollars of wire transfers) that disguise the movement of client funds, and offshore private investment corporations (PIC) located in countries with strict secrecy laws (Cayman Island, Bahamas, etc.)
For example, in the case of Raul Salinas, PB personnel at Citibank helped Salinas transfer $90 to $100 million out of Mexico in a manner that effectively disguised the funds’ sources and destination thus breaking the funds’ paper trail. In routine fashion, Citibank set up a dummy offshore corporation, provided Salinas with a secret code name, provided an alias for a third party intermediary who deposited the money in a Citibank account in Mexico and transferred the money in a concentration account to New York where it was then moved to Switzerland and London.
The PICs are designed by the big banks for the purpose of holding and hiding a person’s assets. The nominal officers, trustees and shareholder of these shell corporations are themselves shell corporations controlled by the PB. The PIC then becomes the holder of the various bank and investment accounts and the ownership of the private bank clients is buried in the records of so-called jurisdiction such as the Cayman Islands. Private bankers of the big banks like Citibank keep pre-packaged PICs on the shelf awaiting activation when a private bank client wants one. The system works like Russian Matryoshka dolls, shells within shells within shells, which in the end can be impenetrable to a legal process.
The complicity of the state in big bank money laundering is evident when one reviews the historic record. Big bank money laundering has been investigated, audited, criticized and subject to legislation; the banks have written procedures to comply. Yet banks like Citibank and the other big ten banks ignore the procedures and laws and the government ignores the non-compliance.
Over the last 20 years, big bank laundering of criminal funds and looted funds has increased geometrically, dwarfing in size and rates of profit the activities in the formal economy. Estimates by experts place the rate of return in the PB market between 20-25% annually. Congressional investigations revealed that Citibank provided "services" for 4 political swindlers moving $380 million: Raul Salinas - $80-$100 million, Asif Ali Zardari (husband of former Prime Minister of Pakistan) in excess of $40 million, El Hadj Omar Bongo (dictator of Gabon since 1967) in excess of $130 million, the Abacha sons of General Abacha ex-dictator of Nigeria - in excess of $110 million. In all cases Citibank violated all of its own procedures and government guidelines: there was no client profile (review of client background), determination of the source of the funds, nor of any violations of country laws from which the money accrued. On the contrary, the bank facilitated the outflow in its prepackaged format: shell corporations were established, code names were provided, funds were moved through concentration accounts, the funds were invested in legitimate businesses or in U.S. bonds, etc. In none of these cases - or thousands of others - was due diligence practiced by the banks (under due diligence a private bank is obligated by law to take steps to ensure that it does not facilitate money laundering). In none of these cases were the top banking officials brought to court and tried. Even after arrest of their clients, Citibank continued to provide services, including the movement of funds to secret accounts and the provision of loans.
Chris Martenson, armed with a candlestick chart and his head, predicted back in July, the latest, the demise of Citi. Those who say that the Fed & Treasury bureaucrats are just blindly reacting to present events seem to imply that Citi itself didn’t know that it was in dire straits. If Chris saw this with a chart, what did the Citi accountants see with the detailed information? It shouldn’t stretch the imagination to think that Citi has had all this time to plan and prepare their wishlist. What you should expect is that they were planning on the framework created by the bailout way before the bailout was announced or passed. The "puzzled bureaucrat" view also ignores a simple fact: all those guys are buddies! There is a revolving door between the government and the executive positions of the big banks. They know each other, they play with each other, they plan with each other. They know their business, because it is their business to externalize all costs and reap all profits. And political contributions and staffing the executive branch do buy you some prerrogatives. And that is not going to change of course. Look at Obama’s picks: the head of the NY Fed for the Treasury? Larry Summers? Please…
Elaborating more on the movement thing: I am personally not advocating a revolt nor violence. The suspend-debt-payment may sound nice until you realize that there is no need to break stuff that is not broken yet, and that there is still a resemblance of a working economy, at least up to this point, and that not all debts out there were maliciously induced. But what I do advocate is getting people to start making noises in the halls of Congress. The calls, the sending of letters, but in a large-scale and organized way. In the 60’s people attempted to get their voices heard. The elites freaked out, they called that the "excess of democracy." There are still some functioning mechanisms through which people can make themselves be heard. That capacity to organize is what freaks out the elites the most. There are many ideas and incipient movements out there, valuable ones, like monetary reform (http://www.honestmoneyreport.com/archives/2006/0305.php but that link is old so I don’t even know if it works).
But one can be more pragmatic. A succint analysis like Chris’s about the nature of the Citi bailout can be made into a protest letter. Imagine hundreds of those flooding the fax machines and emails and mailboxes of congresspeople, week after week. The letters will change frequently because there is plenty of material to protest about. The raw deals, the unpayable mountains of debt with which this and future generations are being chained. In one of Davos’s links yesterday, the one with the hedge fund guy video, this dude confidently expressed that the government is solvent by virtue of its ability to tax. That’s right, the full faith and credit of the US government is simply its ability to take EVERYTHING from you when the time comes, to repay debts incurred in your name, without asking. How solvent do YOU feel? We need to use the most prosaic mechanisms available, we need to start somewhere. I bet you that some congresspeople will have their first chance at understanding some of these issues themselves. But the point is not to educate them, the point is to show that people notice, that people care, and that the ultimate "special interest", i.e. the population, wants influence. In the face of that, they can only carry out their shameless behavior for so long.
So much effort now, to give diffusion to the Crash Course, and that is great, we need people to awaken, to generate discussions, to get scandalized. Because this is a scandal. More and more people will come to this site and to others. What will happen when we get critical mass? And critical mass for what? To tell people to get a weapons flush and go to the mountains? Is it every person for his/herself? We can do better than that. If we can mass-produce DVDs we can mass produce letters. If we can share videos and web links we can share specific, concise information that should just make other people catch fire with rage. And all by telling the truth. Little by little.
How many times have I seen in these forums, smart people showing disbelief at the nature of the monetary system and its implications? I don’t even know. People catch on. How many of you were as cognizant of these issues a year ago? People CAN wake up.
I am just throwing out an idea, one that seems feasible. There will be community showings of the Crash Course now that the DVDs are out, you’ll see reactions, people will want to act, and this is a relatively easy way. Others may come up with better, workable things. But in this orgy of opinions that we have in these forums, in agreement and disagreement, some common objectives could be identified. Heck, is this consistent with the intentions that Chris has? I don’t even know. But I, for one, am thirsty for a feeling of empowerment by numbers and by organization. It is not enough for me to rant publicly as a matter of catharsis. I doubt that I am alone in this.
At the risk of being redundant, and to lighten things up, here is something I posted in another discussion:
http://www.youtube.com/watch?v=kJ4SSvVbhLw
… we do need to notice and we do need to care.
That’s all very well mred… but you have left out one humungous fundametal issue here: THE DEBTS CAN NEVER BE REPAID…
Debt has been growing exponentially, one of Chris’ hockey sticks. To repay that debt, more exponentially growing economic growth is required. Otherwise we have to print more money, also exponentially, and we all know the consequences of doing that.
Whichever way we go, it cannot be done. We no longer have the resources (particularly the energy) to, say. create another doubling of ‘stuff’. Chris’ baseball stadium is full… and we cannot make it overflow. Besides, the ‘stuff’ we already have is starting to crumble (all over the world BTW), and we’re flat out maintaining THAT!
So, as left field as I know it sounds, I still say we will have to cancel the debts. I’ve heard all the negative rumblings, I was expecting them. But no one, absolutely no one, has yet offered up a better solution.
I can’t think of one. Can you?
I should have added re: "Elaborating more on the movement thing: I am personally not advocating a revolt nor violence. The suspend-debt-payment may sound nice until you realize that there is no need to break stuff that is not broken yet"
Are you kidding? Not broken yet? How broken does it have to be before you see it broken?
The Matrix is STUFFED, and beyond all help. I think even Chris has said so recently if my [poor] memory serves me right…
Martin Weiss has some words of warning about this.
Citigroup collapses! Banking Shutdown Possible
It pains me deeply to announce that, despite the massive government rescue, yesterday’s collapse of Citigroup could ultimately lead to a shutdown of the global banking system. Link
I don’t keep more money in a bank than I need for routine expenses, and I keep cash to last for a couple of months. I even have a credit card from the same bank where I do my checking. If those bastards cut off my checking account, they ain’t getting paid. In today’s environment, it’s better safe than sorry.
Take the Citbank and the other bailouts as a warning of worse to come. These people have no inhibitions about taking your savings, your pensions, your 401k, whatever they need to stay afloat.
Some of you may have already seen the interview with Mark Faber today on Bloomberg TV - I was encouraged to see that he was given airtime to publicly express his own sense of frustration over the actions taken by the U.S. Treasury and the Fed.
For the full interview refer to: Mark Faber interview
A sampling of his comments are below:
<starting about half way through the interview…>
I strongly agree that doing ‘nothing’ vs doing what they are doing with Citi is far preferable. Whether doing nothing at all (from day one of the crisis) would have been the right solution is harder to determine. However, we are going to spend a LOT of money no matter what choices are made, but spending money so the rich STAY rich galls me no end. We’ve put off spending money on the right projects for far too long and the silver lining to this storm looked (at first) like it would be the catalyst to change direction and tackle the important challenges ahead of us. Now what I seem to hear are the choruses of "Spend baby Spend" by the Treasury and Fed as they strive to find ways to get consumers back on their ‘hamster wheel’ of debt. I am becoming disillusioned to the point that marching on Washington (or Wall Street) seems necessary if we are going to get the attention of our leaders and refocus their attention on meeting ‘our’ priorities and not those of wall street…
Daniel
I am overwhelmingly sick over this heinous bailout frenzy.
We have to be heard. the only thing I can hope for is a NATIONAL STRIKE. If even just 50% of Americans went to their businesses and and protested the government robberies taking place I would have hope.
Martin Weiss has some words of warning about this.
Citigroup collapses! Banking Shutdown Possible
It pains me deeply to announce that, despite the massive government rescue, yesterday’s collapse of Citigroup could ultimately lead to a shutdown of the global banking system. Link
I don’t keep more money in a bank than I need for routine expenses, and
I keep cash to last for a couple of months. I even have a credit card
from the same bank where I do my checking. If those bastards cut off my
checking account, they ain’t getting paid. In today’s environment, it’s
better safe than sorry.
Take the Citbank and the other bailouts as a warning of worse to come.
These people have no inhibitions about taking your savings, your
pensions, your 401k, whatever they need to stay afloat.
Martin Weiss has some words of warning about this.
Citigroup collapses! Banking Shutdown Possible
It pains me deeply to announce that, despite the massive government rescue, yesterday’s collapse of Citigroup could ultimately lead to a shutdown of the global banking system. Link
I don’t keep more money in a bank than I need for routine expenses, and
I keep cash to last for a couple of months. I even have a credit card
from the same bank where I do my checking. If those bastards cut off my
checking account, they ain’t getting paid. In today’s environment, it’s
better safe than sorry.
Take the Citbank and the other bailouts as a warning of worse to come.
These people have no inhibitions about taking your savings, your
pensions, your 401k, whatever they need to stay afloat.
Damnthematrix:
First, don't make the mistake of lumping together ALL debts. Yes, so the Fed's balance sheet took a moonshot, yes, federal debt can't be repaid unless in the process of inflation any wealth you have is stripped from you, or well, by defaulting. But normal people out there are still in debt, maybe still paying their homes, student loans or whatever. And you advocate that everyone stop payment on every debt? That is what you say. And that is going to solve the problems how exactly? Are there consequences to that that would be better not to precipitate? The problem with the government's debts is that they are incurred in your name, without your knowing unless you are paying attention. Just mortgaging future generations. What does that have to do with the personal financial commitments that individuals have made and that still sustain to some degree what remains of our economic interactions?
Second, no I'm not kidding. Can people still go to the store to buy food? Do people still get to work in general? Can people get on a bus and go somewhere? Buy gas? Flip on the switch and there is electricity still? You get the idea. Things are still working. I'm sure you have enough imagination to think about how things will look like when they get really broken. Furthermore, it is precisely the fact that things are not broken enough which makes it difficult still to make the average person see the dimensions of this predicament. It is precisely this what allows so many people to remain oblivious. The fact that we can guess where things are heading doesn't change this fact.
Count me in! As time goes by the need for organization not only gains importance, but becomes less possible. Seriously, notify me when you see hopeful organization, I’ll jump aboard.
Being free of debt frees you to do constructive things. It means you can work a whole lot less, probably at least two days a week for most people, but a whole lot more for those in up to their necks. It means they have to drive less, which means we will run out of oil a lot later than the current scenario, allowing us to plan to use what's left to build the new sustainable future we so badly need. It also means less Fossil Fuels (FFs) are wasted on things that are trivial, and can be conserved for farming and transitioning to sustainable farming.
[quote=mred] Are there consequences to that that would be better not to precipitate? The problem with the government's debts is that they are incurred in your name, without your knowing unless you are paying attention. Just mortgaging future generations. What does that have to do with the personal financial commitments that individuals have made and that still sustain to some degree what remains of our economic interactions? [/quote]
We need a whole new system. This one's completely stuffed... It's unsustainable, it won't last no matter what TPTB do... so why flog a dead horse?
[quote=mred] Second, no I'm not kidding. Can people still go to the store to buy food? Do people still get to work in general? Can people get on a bus and go somewhere? Buy gas? Flip on the switch and there is electricity still? You get the idea. [/quote]
And just how long do you think this can all keep going? IF business as usual continues, next year there will be food and gas shortages.... All this idiotic consumption to pay off interest on debts that should ve canceled has to stop sometime, why not now?
[quote=mred] Things
are still working. I’m sure you have enough imagination to think
about how things will look like when they get really broken.
Furthermore, it is precisely the fact that things are not broken
enough which makes it difficult still to make the average person see
the dimensions of this predicament. It is precisely this what allows
so many people to remain oblivious. The fact that we can guess where things are heading doesn’t change this fact.[/quote]
True, but people will get seriously pissed off when TSHTF… will it not be too late then? Will we not see blood in the streets?
Don’t you think that if an internet campaign was started urging people to stop paying their debts off because the banks don’t deserve to survive and telling people just how conned they were, that they might just take it up? It would be a bloodless coup… no one on the streets even, they all stay home and tear up their bank statements…
Anyway, I still haven’t seen a better proposition from this site.
In a worst-case situation, when a declining economy simply prevents people from honoring debts, then people will stop payments. Your Draconian proposal, or I should say Solonesque, is redundant in this regard. Of course we need a new monetary system, we need sound money based on a positive value like an asset, and not on a negative one, debt. But to get from here to there we need continuity, we need a transition that is well thought out, with a cool head, some intelligence and some knowledge of economics. To just crash everything by wrecking whatever is left of the credit system would only bring misery and hunger, because a complex society does not deal well with shocks and discontinuities of the sort you propose. That much ought to be obvious. Wreck the system and indeed people will find themselves with more free time in their hands, especially due to explosive unemployment. This is where you would find empty shelves at the grocery store.
It is not only the present monetary system that demands growth, it is also population. Your proposal would not fix this one bit. People here may understand the Crash Course better than what you think, because people recognize the complex problems, but are not proposing a one-size-fits-all solution that doesn’t address any of the complexities.
It also turns out, that in a situation of shock and crisis, the elites stand to gain the most. Crises are always exploited to advance certain agendas, especially the ones that are thought out in advance. The agendas of the elites are quite clear, their goals better defined and their groups more compact than the rest of the population. If you haven’t noticed, your enemies, the guys that are screwing you, are pretty smart. You can’t gain advantage by being reckless. You would shoot yourself in the foot. Did you notice how much gains are they getting from this crisis? In a panic they will continue to get whatever they want, just faster.
Lastly, you insist that you haven’t heard better ideas on "this site". I have seen lots of articles being pointed out by people here on the prescriptions by credible individuals that actually understand economics. The good proposals are out there (most based on the Austrian school view, I think), if you care to study them. Forum participants are pointing all the time to articles by Farber, Jim Rogers, Peter Schiff, etc. And those are just the popular ones. Is yours better than theirs? I don’t think so. I even pointed out yesterday to a very interesting proposal for a seamless transition to a new monetary system:
https://peakprosperity.com/comment/6211#comment-6211
I would say that this proposal addresses the transition to a non-inflationary monetary system, addresses the important aspect of diluting the power of the elites and giving economic freedom to individuals, and all without creating shocks. This addresses the complexities and would put people in a better position to confront the real challenges of energy and resource depletion. Our current problem is something we should not be facing. But people need to push for something like this to happen. This is where organization is necessary. We can’t complain about the agendas of the bankers if we don’t have real, thought-out proposals of our own, and we need to find the ways to push them forward. The proposals should also have appeal for the majority of the population to obtain support, and Draconian proposals rarely do.
What was overlooked here is the sales pitch that was fed to the sheeple. The mainstream news provided a much different picture of this deal! Remember this was unlike all those "Sweetheart" deals from before - Citi has to limit dividend payments to its shareholders, and they are limited in their ability to give bonus’ to the executives who put this thing together. WOW, what terrific oversight!
As a result of this well orchestrated marketing scheme, the world has completely bought into this latest rip-off of the taxpayers, and Citi stock is climbing!
I don’t want to resort to expletives, but WTF?!
as someone who wrote emails till his hands could not function and called and called and called along with 70% of the american public in opposition to the bailout only to see our efforts get pissed on and our noses continuously rubbed in the manure i have my doubts about a letter writnig campaign accomplishing anything. remember a large number of people are stil drinking obama koolaid. who is going ot start this letter writing campaign?
i suggest you start the campaign right here and start writing the letters we can then email to " our" representatives.
i will be happy to send them off.
i think your idea of the credit unions and gold and silver backing the currency are good ideas but i see no transition to a system like that. the powers that be will not go along with that. ron paul is an interesting sidlight to this whole drama but who is listening? the only real change will be a violent revolution…imho