Tag: Iraq

NEW SURGE IN IRAQ

The neo-con numbskulls never give up. They have murdered thousands of American boys in their un-Constitutional invasions in the Middle East and efforts to rule the world. We’ve pissed away over $1.3 trillion on these worthless wars of choice in the last ten years. The true terrorists (Cheney, Wolfowitz, McCain, Bush, Rumsfeld, and now the drone murdering thug – Obama) failed in their Israel/Saudi Arabia propaganda effort to invade Syria. Israel and their captured politician hacks in Washington DC continue to push war with Iran.

You always hear about what a threat these countries are to us. What a fucking joke. Iraq, Libya, Syria and Iran are absolutely no threat to the United States. They do not have the capability or interest in attacking America. On the other hand, 15 of the 19 men who attacked us on 9/11 were Saudi Arabians. Who is the real threat?

Everyone remembers moron Bush landing on the aircraft carrier and declaring Mission Accomplished. How’s that working out now. Prior to 2003 oil was $25 per barrel. Al Qaeda did not exist in Iraq. Hussein, our ally against Iran from 1979 until 1990, hated bin Laden and all of the religious Muslim zealots. Now Al Qaeda has taken over Fallujah and is gaining strength in Iraq. What a neo-con success story.

There was no terrorism or bombings in Iraq prior to 2003. Almost 9,000 Iraqis died in 2013 in bombings. The cowardly American public freaked out and cowered in their basements when a couple idiots used some cookware to kill three people in Boston. These same American idiots barely look up from their iGadgets when told that 9,000 Iraqis have been blown up for no good reason. Are their lives worth less than the 3 people killed in Boston? Maybe Neil Diamond can sing a song in Baghdad to sooth the pain of Iraqis.

I’m sure idiots like McCain and Cheney think we should go back into Iraq and fix it again. Neo-cons are the dumbest, most dangerous creatures on earth. Ron Paul was right in 2003 and he is right today.

Submitted by Ron Paul
Remember Fallujah? Shortly after the 2003 invasion of Iraq, the US military fired on unarmed protestors, killing as many as 20 and wounding dozens. In retaliation, local Iraqis attacked a convoy of US military contractors, killing four. The US then launched a full attack on Fallujah to regain control, which left perhaps 700 Iraqis dead and the city virtually destroyed.According to press reports last weekend, Fallujah is now under the control of al-Qaeda affiliates. The Anbar province, where Fallujah is located, is under siege by al-Qaeda. During the 2007 “surge,” more than 1,000 US troops were killed “pacifying” the Anbar province.  Although al-Qaeda was not in Iraq before the US invasion, it is now conducting its own surge in Anbar.For Iraq, the US “liberation” is proving far worse than the authoritarianism of Saddam Hussein, and it keeps getting worse. Last year was Iraq’s deadliest in five years. In 2013, fighting and bomb blasts claimed the lives of 7,818 civilians and 1,050 members of the security forces. In December alone nearly a thousand people were killed.I remember sitting through many hearings in the House International Relations Committee praising the “surge,” which we were told secured a US victory in Iraq. They also praised the so-called “Awakening,” which was really an agreement by insurgents to stop fighting in exchange for US dollars. I always wondered what would happen when those dollars stopped coming.Where are the surge and awakening cheerleaders now?

One of them, Richard Perle, was interviewed last year on NPR and asked whether the Iraq invasion that he pushed was worth it. He replied:

I’ve got to say I think that is not a reasonable question. What we did at the time was done in the belief that it was necessary to protect this nation. You can’t a decade later go back and say, well, we shouldn’t have done that.

Many of us were saying all along that we shouldn’t have done that – before we did it. Unfortunately the Bush Administration took the advice of the neocons pushing for war and promising it would be a “cakewalk.” We continue to see the results of that terrible mistake, and it is only getting worse.

Last month the US shipped nearly a hundred air-to-ground missiles to the Iraqi air force to help combat the surging al-Qaeda. Ironically, the same al-Qaeda groups the US is helping the Iraqis combat are benefiting from the US covert and overt war to overthrow Assad next door in Syria. Why can’t the US government learn from its mistakes?

The neocons may be on the run from their earlier positions on Iraq, but that does not mean they have given up. They were the ones pushing for an attack on Syria this summer. Thankfully they were not successful. They are now making every effort to derail President Obama’s efforts to negotiate with the Iranians. Just last week William Kristol urged Israel to attack Iran with the hope we would then get involved. Neoconservative Senators from both parties recently introduced the Nuclear Weapon Free Iran Act of 2013, which would also bring us back on war-footing with Iran.

Next time the neocons tell us we must attack, just think “Iraq.”

TRYING TO STAY SANE IN AN INSANE WORLD – AT WORLD’S END

In the first three parts (Part 1, Part 2, Part 3) of this disheartening look back at a century of central banking, income taxing, military warring, energy depleting and political corrupting, I made a case for why we are in the midst of a financial, commercial, political, social and cultural collapse. In this final installment I’ll give my best estimate as to what happens next and it has a 100% probability of being wrong. There are so many variables involved that it is impossible to predict the exact path to our world’s end. Many people don’t want to hear about the intractable issues or the true reasons for our predicament. They want easy button solutions. They want someone or something to fix their problems. They pray for a technological miracle to save them from decades of irrational myopic decisions. As the domino-like collapse worsens, the feeble minded populace becomes more susceptible to the false promises of tyrants and psychopaths. There are a myriad of thugs, criminals, and autocrats in positions of power who are willing to exploit any means necessary to retain their wealth, power and control. The revelations of governmental malfeasance, un-Constitutional mass espionage of all citizens, and expansion of the Orwellian welfare/warfare surveillance state, from patriots like Julian Assange, Bradley Manning and Edward Snowden has proven beyond a doubt the corrupt establishment are zealously anxious to discard and stomp on the U.S. Constitution in their desire for authoritarian control over our society.

Anyone who denies we are in the midst of an ongoing Crisis that will lead to a collapse of the system as we know it is either a card carrying member of the corrupt establishment, dependent upon the oligarchs for their living, or just one of the willfully ignorant ostriches who choose to put their heads in the sand and hum the Star Spangled Banner as they choose obliviousness to awareness. Thinking is hard. Feeling and believing a storyline is easy.

 

A moral society must be inhabited by an informed, educated, aware populace and   governed by honorable leaders who oversee based upon the nation’s founding principles of liberty, freedom and limited government of, by and for the people. A moral society requires trust, honor, property rights, simple just laws, and the freedom to succeed or fail on your own merits. There is one major problem in creating a true moral society where liberty, freedom, trust, honor and free markets are cherished – human beings. We are a deeply flawed species who are prone to falling prey to the depravities of lust, gluttony, greed, sloth, wrath, envy and pride. Men have always been captivated by the false idols of dominion, power and wealth. The foibles of human nature haven’t changed over the course of history. This is why we have 80 to 100 year cycles driven by the same human strengths and shortcomings revealed throughout recorded history.

Empires rise and fall due to the humanness of their leaders and citizens. The great American Empire is no different. It was created a mere 224 years ago by courageous patriots who risked their wealth and their lives to create a Republic founded upon the principles of freedom, liberty, and the pursuit of happiness; took a dreadful wrong turn in 1913 with the creation of a privately held central bank to control its currency and introduction of an income tax; devolved into an empire after World War II, setting it on a course towards bankruptcy; sealed its fate in 1971 by unleashing power hungry psychopathic elitists to manipulate the monetary and fiscal policies of the nation to enrich themselves; and has now entered the final frenzied phase of pillaging, currency debasement, war mongering, and ransacking of civil liberties. Despite the frantic efforts of the financial elite, their politician puppets, and their media propaganda outlets, collapse of this aristocracy of the moneyed is a mathematical certainty. Faith in the system is rapidly diminishing, as the issuance of debt to create the appearance of growth has reached the point of diminishing returns.

 

Increase in Real GDP per Dollar of Incremental Debt

“At the root of America’s economic crisis lies a moral crisis: the decline of civic virtue among America’s political and economic elite. A society of markets, laws, and elections is not enough if the rich and powerful fail to behave with respect, honesty, and compassion toward the rest of society and toward the world.” – Jeffrey Sachs

Five Stages of Collapse

The day of reckoning for a century of putting our faith in the wrong people with wrong ideas and evil intentions is upon us. Dmitry Orlov provides a blueprint for the collapse in his book – The Five Stages of Collapse – Survivors’ Toolkit:

Stage 1: Financial Collapse. Faith in “business as usual” is lost. The future is no longer assumed to resemble the past in any way that allows risk to be assessed and financial assets to be guaranteed. Financial institutions become insolvent; savings wiped out and access to capital is lost.

Stage 2: Commercial Collapse. Faith that “the market shall provide” is lost. Money is devalued and/or becomes scarce, commodities are hoarded, import and retail chains break down and widespread shortages of survival necessities become the norm.

Stage 3: Political Collapse. Faith that “the government will take care of you” is lost. As official attempts to mitigate widespread loss of access to commercial sources of survival necessities fail to make a difference, the political establishment loses legitimacy and relevance.

Stage 4: Social Collapse. Faith that “your people will take care of you” is lost, as social institutions, be they charities or other groups that rush to fill the power vacuum, run out of resources or fail through internal conflict.

Stage 5: Cultural Collapse. Faith in the goodness of humanity is lost. People lose their capacity for “kindness, generosity, consideration, affection, honesty, hospitality, compassion, charity.” Families disband and compete as individuals for scarce resources. The new motto becomes “May you die today so that I can die tomorrow.”

The collapse is occurring in fits and starts. The stages of collapse do not necessarily have to occur in order.  You can recognize various elements of the first three stages in the United States today. Stage 1 commenced in September 2008 when this Crisis period was catalyzed by the disintegration of the worldwide financial system caused by Wall Street intentionally creating the largest control fraud in world history, with easy money provided by Greenspan/Bernanke, fraudulent mortgage products, fake appraisals, bribing rating agencies to provide AAA ratings to derivatives filled with feces, and having their puppets in the media and political arena provide the propaganda to herd the sheep into the slaughterhouse.

The American people neglected their civic duty to elect leaders who would tell them the truth and represent current and future generations equally. They have neglected the increasing lawlessness of Wall Street, K Street and the corporate suite. The American people have lived in denial about their responsibility for their own financial well-being, willingly delegating it to a government of math challenged politicians who promised trillions more than they could ever deliver. The American people have delayed tackling the dire issues confronting our nation, including: $200 trillion of unfunded liabilities, the military industrial complex creating wars across the globe, militarization of our local police forces, domestic spying on every citizen, allowing mega-corporations and the financial elite to turn our nation from savings based production to debt based consumption, and allowing corporations, the military industrial complex, Wall Street, and shadowy billionaires to pick and control our elected officials. The civic fabric of the country is being torn at the points of extreme vulnerability.

“At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where, during the Unraveling, America will have neglected, denied, or delayed needed action. Anger at “mistakes we made” will translate into calls for action, regardless of the heightened public risk. It is unlikely that the catalyst will worsen into a full-fledged catastrophe, since the nation will probably find a way to avert the initial danger and stabilize the situation for a while. Yet even if dire consequences are temporarily averted, America will have entered the Fourth Turning.”  – The Fourth Turning – Strauss & Howe – 1997

Our Brave New World controllers (bankers, politicians, corporate titans, media moguls, shadowy billionaires) were able to avert a full-fledged catastrophe in the fall of 2008 and spring of 2009 which would have put an end to their reign of destruction. To accept the rightful consequences of their foul actions was intolerable to these obscenely wealthy, despicable men. Their loathsome and vile solutions to a crisis they created have done nothing to relieve the pain and suffering of the average person, while further enriching them, as they continue to gorge on the dying carcass of a once thriving nation. Despite overwhelming public outrage, Congress did as they were instructed by their Wall Street masters and handed over $700 billion of taxpayer funds into Wall Street vaults, under the false threat of systematic collapse. The $800 billion of pork stimulus was injected directly into the veins of corporate campaign contributors. The $3 billion Cash for Clunkers scheme resulted in pumping taxpayer dollars into the government owned union car companies, while driving up the prices of used cars and hurting lower income folks.

Ben Bernanke has peddled the false paradigm of quantitative easing (code for printing money and airlifting it to Wall Street) as benefitting Main Street. Nothing could be further from the truth. He bought $1.3 trillion of toxic mortgage backed securities from his Wall Street owners. He has pumped a total of $2.8 trillion into the hands of Wall Street since September 2008, and is singlehandedly generating $5 billion of risk free profits for these deadbeats by paying them .25% on their reserves. Drug dealer Ben continues to pump $2.8 billion per day into the veins of Wall Street addicts and any hint of tapering the heroin causes the addicts to flail about. Ben should be so proud. He should hang a Mission Accomplished banner whenever he gives a speech. Bank profits reached an all-time record in the 2nd quarter, at $42.2 billion, with 80% of those profits going to the 2% Too Big To Trust Wall Street Mega-Goliath Banks. It’s enough to make a soon to retire, and take a Wall Street job, central banker smile.

“The money rate can, indeed, be kept artificially low only by continuous new injections of currency or bank credit in place of real savings. This can create the illusion of more capital just as the addition of water can create the illusion of more milk. But it is a policy of continuous inflation. It is obviously a process involving cumulative danger. The money rate will rise and a crisis will develop if the inflation is reversed, or merely brought to a halt, or even continued at a diminished rate. Cheap money policies, in short, eventually bring about far more violent oscillations in business  than those they are designed to remedy or prevent.” – Henry Hazlitt – 1946

Any serious minded person knew Wall Street had too much power, too much control, and too much influence in 2008 when they crashed our economic system. When something is too big to fail because it will create systematic collapse, you make it smaller. Instead we have allowed our sociopathic rulers to allow these parasitic institutions to get even larger. Just 12 mega-banks control 70% of all the banking assets in the country, with 90% controlled by the top 86 banks. There are approximately 8,000 financial institutions in this country. Wall Street will be congratulating themselves with record compensation of $127 billion and record bonuses of $23 billion for a job well done. It is dangerous work making journal entries relieving loan loss reserves, committing foreclosure fraud, marking your assets to unicorn, making deposits at the Fed, and counting on the Bernanke Put to keep stocks rising. During a supposed recovery from 2009 to 2011, average real income per household grew pitifully by 1.7%, but all the gains accrued to Bernanke’s minions. Top 1% incomes grew by 11.2% while bottom 99% incomes shrunk by 0.4%. Therefore, the top 1% captured 121% of the income gains in the first two years of the recovery. This warped trend has only accelerated since 2011.

The median household income has fallen by $2,400 to $52,100 since the government proclaimed the end of the recession in 2009. Real wages for real people continue to fall. A record 23.1 million households (20% of all households) are receiving food stamps. After four years of “recovery” propaganda, we are left with 2.2 million less people employed (5 million less full time jobs) and 22 million more people on SNAP and SSDI. A record 90.5 million working age Americans are not working, with labor participation at a 35 year low. Ben’s money has not trickled down, but his inflation has fallen like a load of bricks on the heads of the middle class. Bernanke’s QE to infinity constitutes a transfer of purchasing power away from the middle class to the bankers, mega-corporations and .1%. This Cantillon effect means that newly created money is neither distributed evenly nor simultaneously among the population. Some users of money profit from rising prices, and others suffer from them. This results in a transfer of wealth (a hidden tax) from later receivers to earlier receivers of new money. This is why the largest banks and largest corporations are generating the highest profits in history, while the average person sinks further into debt as their real income declines and real living expenses (energy, food, clothing, healthcare, tuition) rise.

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Ben works for your owners. Real GDP (using the fake government inflation adjustment) since July 2009 is up by a wretched 5.6%. Revenue growth of the biggest corporations in the world is up by a pathetic 12%. One might wonder how corporate profits could be at record levels with such doleful economic performance. One needs to look no further than Ben’s balance sheet, which has increased by 174%. There appears to be a slight correlation between Ben’s money printing and the 162% increase in the S&P 500 index. With the top 1% owning 42.1% of all financial assets (top .1% own most of this) and the bottom 80% owning only 4.7% of all financial assets, one can clearly see who benefits from QE to infinity.

The key take away from what the ruling class has done since 2008 is they have only temporarily delayed the endgame. Their self-serving exploits have guaranteed that round two of the financial collapse will be epic in proportion and intensity. This Fourth Turning Crisis is ongoing. The linear thinkers who control the levers of power keep promising a return to normalcy and resumption of growth. This is an impossibility – mathematically & socially. Fourth Turnings do not end without the existing social order being swept away in a tsunami of turmoil, violence, suffering and war. Orlov’s stages of collapse will likely occur during the remaining fifteen years of this Crisis. We are deep into Stage 1 as our national Detroitification progresses towards bankruptcy, with an added impetus from our trillion dollar wars of choice in the Middle East. Commercial collapse has begun, as faith in the fantasy of free market capitalism is waning. The race to the bottom with currency debasement around the globe is reaching a tipping point, and the true eternal currencies of gold and silver are being hoarded and shipped from the West to the Far East.

Monetary Base (billions of USD)

When the financial collapse reaches its crescendo, the just in time supply chain, that keeps cheese doodles and cheese whiz on your grocery store shelves, Chinese produced iGadgets in your local Wal-Mart Supercenter, and gasoline flowing out of gas station hoses into your leased Cadillac Escalade, will break down rapidly. The strain of $110 oil is already evident. The fireworks will really get going when ATM machines run dry and the EBT cards stop functioning. Within a week riots and panic will engulf the country.

“At some point we are bound to hear, from across two oceans, the shocking words “Your money is no good here.” Fast forward to a week later: banks are closed, ATMs are out of cash, supermarket shelves are bare and gas stations are starting to run out of fuel. And then something happens: the government announces they have formed a crisis task force, and will nationalize, recapitalize and reopen banks, restoring confidence. The banks reopen, under heavy guard, and thousands of people get arrested for attempting to withdraw their savings. Banks close, riots begin. Next, the government decides that, to jump-start commerce, it will honor deposit guarantees and simply hand out cash. They print and arrange for the cash to be handed out. Now everyone has plenty of cash, but there is still no food in the supermarkets or gasoline at the gas stations because by now the international supply chains have broken down and the delivery pipelines are empty.”  – Dmitry Orlov – The Five Stages of Collapse

We are witnessing the beginning stages of political collapse. The government and its leaders are being discredited on a daily basis. The mismanagement of fiscal policy, foreign policy and domestic policy, along with the revelations of the NSA conducting mass surveillance against all Americans has led critical thinking Americans to question the legitimacy of the politicians running the show on behalf of the bankers, corporations and arms dealers. The Gestapo like tactics used by the government in Boston was an early warning sign of what is to come. Government entitlement promises will vaporize, as they did in Detroit, with pension promises worth only ten cents on the dollar. Total social and cultural collapse could resemble the chaotic civil war scenarios playing out in Libya and Syria. The best case scenario would be for a collapse similar to the Soviet Union’s relatively peaceful disintegration into impotent republics. I don’t believe we’ll be this fortunate. The most powerful military empire in world history will not fade away. It will go out in a blaze of glory with a currency collapse, hyper-inflation, and war on a grand scale.

“History offers even more sobering warnings: Armed confrontation usually occurs around the climax of Crisis. If there is confrontation, it is likely to lead to war. This could be any kind of war – class war, sectional war, war against global anarchists or terrorists, or superpower war. If there is war, it is likely to culminate in total war, fought until the losing side has been rendered nil – its will broken, territory taken, and leaders captured.” – The Fourth Turning – Strauss & Howe – 1997

In Whom Do You Trust?

“Use of money concentrates trust in a single central authority – the central bank – and, over extended periods of time, central banks always tend to misbehave. Eventually the “print” button on the central banker’s emergency console becomes stuck in the depressed position, flooding the world with worthless notes. People trust that money will remain a store of value, and once the trust is violated a gigantic black hole appears at the very center of society, sucking in peoples’ savings and aspirations along with their sense of self-worth. When those who have become psychologically dependent on money as a yardstick, to be applied to everything and everyone, suddenly find themselves in a world where money means nothing, it is as if they have gone blind; they see shapes but can no longer resolve them into objects. The result is anomie – a sense of unreality – accompanied by deep depression. Money is an addiction – substance-less and unreal, and sets itself up for a severe and lengthy withdrawal.” – Dmitry Orlov – The Five Stages of Collapse

Our modern world revolves around wealth, the appearance of wealth, the false creation of wealth through the issuance of debt, and trust in the bankers and politicians pulling the levers behind the curtain. The entire world economic system is dependent on trusting central bankers whose only response to any crisis is to create more debt. The death knell is ringing loud and clear, but people around the globe are desperately clinging to their normalcy biases and praying to the gods of cognitive dissonance. It seems the only things that matter to our controllers are stock market levels, the continued flow of debt to the plebs, continued doling out of hush money to those on the dole, and of course an endless supply of brown skinned enemies to attack. With every country in the world attempting to the same solution of debasing their currencies, we are rapidly approaching the tipping point. India is the canary in the coal mine.

Government, Household, Financial & Non-Financial Debt (% of GDP)

An exponential growth model built upon cheap plentiful energy and debt creation has its limits, and we’ve reached them. With the depletion of inexpensive, easily accessible energy resources, higher prices will continue to slow world economies. Demographics in the developed world are slowing the global economy as millions approach their old age with little savings due to over consuming during their peak earnings years. Bernanke has already quadrupled his balance sheet with no meaningful benefit to the economy or the financial well-being of the average middle class American. Financial manipulation that creates nothing has masked the rot consuming our economic system. The game has been rigged in favor of the owners, but even a rigged game eventually comes to an end. Americans and Europeans can no longer maintain a façade of wealth by buying knickknacks from China with money they don’t have. The US and Europe are finding that their credit is no longer good in the exporting Far East countries. This is a perilous development, as the West has depended upon foreigners to accommodate its never ending expansion of credit. Without that continual expansion of debt, the Ponzi scheme comes crashing down. As China, Japan and the rest of Asia have balked at buying U.S. Treasuries with negative real yields, the only recourse for Ben has been to monetize the debt through QE and inflation. The doubling of ten year Treasury rates in a matter of three months due to just talk of possibly slowing QE should send shivers down your spine.

We are supposedly five years past the great crisis. Magazine covers proclaimed Bernanke a hero. If we are well past the crisis, why are the extreme emergency measures still in effect? If the economy is growing and jobs are being created, why do we need $85 billion of government debt to be monetized each and every month? Why are the EU, Japan, and China printing even faster than the Fed? The answer is simple. If the debt was not being monetized, it would have to be purchased out in the free market. Purchasers would require an interest rate far above the 2.9% being paid today. The debt levels in the U.S., Europe and Japan are so large that a rise in interest rates of just a few points would explode budget deficits and lead to a worldwide financial collapse. This is why Bernanke and the rest of his central banker brethren are trapped by their own ideology of bubble production. Just the slowing of debt creation will lead to collapse. Bernanke needs a Syrian crisis to postpone the taper talk. Those in control need an endless number of real or false flag crises to provide cover for their printing presses to keep rolling.

There are a couple analogies that apply to our impending doom. The country is like a 224 year old oak tree that has been slowly rotting on the inside due to the insidious diseases of hubris, apathy, selfishness, dependence, delusion, and debasement. The old oak gives an outward appearance of health and stability. Winter has arrived and gale force winds are in the forecast. One gust of wind and the mighty aged oak will topple and come crashing to earth. I think an even more fitting analogy is the sandpile with grains of sand being added day after day. Seven out of ten Americans receive more in government benefits than they pay in taxes. Goliath corporations and the uber-wealthy use the tax code and legislation to syphon hundreds of billions from the national treasury every year. We spend $1 trillion per year on past, current and future wars of choice. Annual interest on the debt we’ve racked up in the last few decades already approaches $400 billion per year. The entire Federal budget totaled $400 billion in 1977. The sandpile grows ever higher, while its instability expands exponentially. One seemingly innocuous grain of sand will ultimately cause the pile to collapse catastrophically. Will it be an unintended consequence of a missile launch into Syria? Will it be a spike in oil prices? Will it be the collapse of one of the EU PIIGS? Will it be an assassination of a political figure or banker? No one knows. But that innocuous grain of sand will trigger the collapse of the entire pile.

Worried people are looking for solutions. They often get angry at me because they don’t think I provide answers to the issues I raise about our corrupt failing system. They want easy answers to intractable problems. Sadly, I’ve come to the conclusion that our system and majority of citizens are too corrupted to change our course through the ballot box or instituting policies along the lines of those proposed by Ron Paul and many other thoughtful liberty minded people. We are experiencing the downside of a representative democracy.  Once a person is democratically elected a gulf is created between the electors and the person they elected, as the representative becomes corrupted and bought by moneyed interests. Elected officials become a class unto themselves. The political class grows to be puppets that resemble human beings but are nothing but cogs in a vast corporate run machine, pawns in an enormous game of chess played by powerful vindictive immoral men.

There are no cures for our disease. It’s terminal. Anyone telling you they have the answers is either lying or trying to sell you something. More people and organizations are on the take than are playing by the rules. The producers are being overrun by the parasites. The barbarians are at the gate. An implosion of societal trust is underway. The next stage of this crisis, which I believe will materialize within the next twelve months will try the souls of the weary.

“As the Crisis catalyzes, these fears will rush to the surface, jagged and exposed. Distrustful of some things, individuals will feel that their survival requires them to distrust more things. This behavior could cascade into a sudden downward spiral, an implosion of societal trust. This might result in a Great Devaluation, a severe drop in the market price of most financial and real assets. This devaluation could be a short but horrific panic, a free-falling price in a market with no buyers. Or it could be a series of downward ratchets linked to political events that sequentially knock the supports out from under the residual popular trust in the system. As assets devalue, trust will further disintegrate, which will cause assets to devalue further, and so on.” – The Fourth Turning – Strauss & Howe – 1997

As a nation we have squandered our inheritance, born of the blood of patriots. A freedom loving, liberty minded, self-responsible, courageous people have allowed ourselves to fall prey to selfishness, apathy, complacency and dependency. Once we allowed our human appetites of greed, power seeking, and control to override the moral responsibility for our own lives and the lives of future unborn generations, collapse was inevitable. The danger now is what happens after the unavoidable collapse. Will the millions of dependency zombies beg for a strong dictator to protect them, provide for them and lead them into further bondage? Or will the spark of liberty and freedom reignite, allowing citizens to throw off the shackles of banker and corporate control? I believe most of the people in this country are good hearted. We are merely pawns in this game of Risk being played by those seeking power, wealth and world domination. We are all trapped in our own forms of normalcy bias. Have I cashed out my retirement funds, sold my suburban house and built a doomstead in the mountains? No I haven’t. Do I second guess myself sometimes? Yes I do. But even the aware have families to support, jobs to go to, bills to pay, laundry to do, lawns to mow, and lives to live. I can’t live in constant fear of what might happen. We only get 80 or so years on this earth, if we’re lucky. The best we can do is leave a positive legacy for our children and their children. A drastic change to our way of life is coming, but most of us are trapped in a cage of our own making.

Each living generation will need to do their part during this Crisis if we are to survive the coming storm. Since no one knows the nature of how the next fifteen years will unfold, it would be wise to at least make basic preparations for food, water, heat and protection. This is easier for some than others, but you don’t have to star on Doomsday Preppers in order to stock up on items that can be purchased at Wal-Mart today, but won’t be available when the global supply chain breaks down. Make sure you have neighbors and family you can rely upon. A small community of like-minded people with varied skills is more likely to succeed in our brave old world than rugged individualists. With no financial means to maintain our globalized world, living locally will take on a new meaning. After much turmoil, chaos, violence, and likely mass casualties the best outcome would be for the Great American Empire to break into regional republics, incapable of waging global war, led by law abiding moral liberty minded individuals, and willing to trade freely and honestly with their fellow republics. Daily life would revert back to a simpler Amish like time. Would that be so bad?

This Fourth Turning could end with a whimper or a bang. There are enough nuclear arms to obliterate the world ten times over. There are enough hubristic egomaniacal psychopathic men in power, that the use of those weapons has a high likelihood of happening. It will be up to the people to not allow this horrific result. I love my country and despise my government. The Declaration of Independence clearly states that when a long train of abuses and usurpations lead toward despotism, it is our right and duty to throw off that government and provide new guards of liberty. My family comes first with my country a close second. I will fight with whatever means necessary to protect my family and do what I can to influence the future course of our country. Time is running out. Will we have the courage, fortitude and wisdom to make the right decisions over the next fifteen years? Will we choose glory or destruction? The fate of our nation hangs in the balance. Are you prepared? Are you ready to fight for your family and your rights?

The Fourth Turning could spare modernity but mark the end of our nation. It could close the book on the political constitution, popular culture, and moral standing that the word America has come to signify. The nation has endured for three saecula; Rome lasted twelve, the Soviet Union only one. Fourth Turnings are critical thresholds for national survival. Each of the last three American Crises produced moments of extreme danger: In the Revolution, the very birth of the republic hung by a thread in more than one battle. In the Civil War, the union barely survived a four-year slaughter that in its own time was regarded as the most lethal war in history. In World War II, the nation destroyed an enemy of democracy that for a time was winning; had the enemy won, America might have itself been destroyed. In all likelihood, the next Crisis will present the nation with a threat and a consequence on a similar scale. – The Fourth Turning – Strauss & Howe – 1997

  

 IT’S OUR CHOICE.

WHY ARE WE SUPPORTING AL QAEDA (EASTASIA)?

There were no Al Qaeda terrorists in Iraq before we invaded. Now it’s swarming with Al Qaeda fighters. Libyan dictator Ghaddafi was fighting Al Qaeda. We killed him. Mubarek kept the radical Islamists under control. We deposed him. Assad is fighting Al Qaeda terrorists. We are about to kill him. When will the American people use their fucking brains and see what is going on.

Do you see any resemblance to Orwell’s description of war in his training manual for American democracy?

 “In 1984, there is a perpetual war between Oceania, Eurasia and Eastasia, the super-states which emerged from the atomic global war. “The book”, The Theory and Practice of Oligarchic Collectivism by Emmanuel Goldstein, explains that each state is so strong it cannot be defeated, even with the combined forces of two super-states—despite changing alliances. To hide such contradictions, history is re-written to explain that the (new) alliance always was so; the populaces accustomed to doublethink accept it. The war is not fought in Oceanian, Eurasian or Eastasian territory but in a disputed zone comprising the sea and land from Tangiers (northern Africa) to Darwin (Australia) to the Arctic. At the start, Oceania and Eastasia are allies combatting Eurasia in northern Africa.

That alliance ends and Oceania allied with Eurasia fights Eastasia, a change which occurred during the Hate Week dedicated to creating patriotic fervour for the Party’s perpetual war. The public are blind to the change; in mid-sentence an orator changes the name of the enemy from “Eurasia” to “Eastasia” without pause. When the public are enraged at noticing that the wrong flags and posters are displayed they tear them down—thus the origin of the idiom “We’ve always been at war with Eastasia”; later the Party claims to have captured Africa.

“The book” explains that the purpose of the unwinnable, perpetual war is to consume human labour and commodities, hence the economy of a super-state cannot support economic equality (a high standard of life) for every citizen. Goldstein also details an Oceanian strategy of attacking enemy cities with atomic rockets before invasion, yet dismisses it as unfeasible and contrary to the war’s purpose; despite the atomic bombing of cities in the 1950s the super-states stopped such warfare lest it imbalance the powers. The military technology in 1984 differs little from that of the Second World War, yet strategic bomber aeroplanes were replaced with Rocket Bombs, Helicopters were heavily used as weapons of war (while they didn’t figure in WW2 in any form but prototypes) and surface combat units have been all but replaced by immense and unsinkable Floating Fortresses, island-like contraptions concentrating the firepower of a whole naval task force in a single, semi-mobile platform (in the novel one is said to have been anchored between Iceland and the Faroe Islands, suggesting a preference for sea lane interdiction and denial).”

http://georgeorwellnovels.com/books/about-nineteen-eighty-four/#The_War

 

Experts: U.S. Case that Syrian Government Responsible for Chemical Weapons Is Weak

George Washington's picture
Submitted by George Washington on 08/30/2013 15:33 -0400

Bonus:

The civil war in Syria started in March 2011. And see this. However, the U.S. has been funding the Syrian opposition since 2006 … and arming the opposition since 2007.

So the American government’s argument that “we must stop Assad because he’s brutally crushing a spontaneous popular uprising” is false.  The U.S. started supporting the rebels 5 years before the protests started.

Moreover, reports from mainstream media sources such as the New York Times, (and here), Wall Street Journal, USA Today, CNN, McClatchy (and here), AP, Time, BBC, the Independent, the Telegraph, Agence France-Presse, Asia Times, and the Star (and here) – confirm that supporting the rebels means supporting Al Qaeda and two other terrorist groups. Indeed, the the New York Times has reported that virtually all of the rebel fighters are Al Qaeda terrorists.

By supporting the rebels, we’re supporting our sworn terrorist enemies.

A War 20 Years In the Making

If there is any doubt about this timeline, please keep in mind that the U.S. and Britain considered attacking Syrians and then blaming it on the Syrian government as an excuse for regime change … 50 years ago (the U.S. just admitted that they did this to Iran) And the U.S. has been planning regime change in Syria for 20 years straight.

The Last “Humanitarian War”

Libya’s Gaddafi claimed that the rebels in that country were actually Al Qaeda.

That claim – believe it or not – has been confirmed.

According to a 2007 report by West Point’s Combating Terrorism Center’s center, the Libyan city of Benghazi was one of Al Qaeda’s main headquarters – and bases for sending Al Qaeda fighters into Iraq – prior to the overthrow of Gaddafi:

The Hindustan Times reported:

“There is no question that al Qaeda’s Libyan franchise, Libyan Islamic Fighting Group, is a part of the opposition,” Bruce Riedel, former CIA officer and a leading expert on terrorism, told Hindustan Times.   It has always been Qaddafi’s biggest enemy and its stronghold is Benghazi.

(Incidentally, Gaddafi was on the verge of invading Benghazi in 2011, 4 years after the West Point report cited Benghazi as a hotbed of Al Qaeda terrorists. Gaddafi claimed – rightly it turns out – that Benghazi was an Al Qaeda stronghold and a main source of the Libyan rebellion.  But NATO planes stopped him, and protected Benghazi.) Al Qaeda is now largely in control of Libya.  Indeed, Al Qaeda flags were flown over the Benghazi courthouse once Gaddafi was toppled. There is a direct connection to Syria.  Specifically, CNN, the Telegraph,  the Washington Times, and many other mainstream sources confirm that Al Qaeda terrorists from Libya have since flooded into Syria to fight the Assad regime.  And the post-Gaddafi Libyan government is also itself a top funder and arms supplier of the Syrian opposition.

The Bottom Line

The bottom line is that there are no few good guys involved in the Syrian war. The solution is not to bomb the country … or to send more arms to the rebels. The solution is to make sure that less weapons – chemical and conventional – get into that tinder box of a country. And to stay the h@!! out of a conflict which has no bearing on our national security.

FEEDS THE RICH, BURIES THE POOR (Oldie but Goodie)

Below is the last article that I wrote on the original TBP in January, 2010. It was one of my favorites because I was able to use the lyrics to one of my favorite songs and the blend it with one of my favorite movies. It didn’t get much visibility because many of the financial websites didn’t want an article on war. I think it is fitting that I repost it now as our tyrannical government clamps down on our civil liberties and prepares for war with Syria and Iran.  Read this article and find out who always benefits from war. 

What we’ve got here is failure to communicate.
Some men you just can’t reach…
So, you get what we had here last week,
Which is the way he wants it !
Well, he gets it !
N’ I don’t like it any more than you men.

Luke Jackson, as portrayed by Paul Newman, in Cool Hand Luke is a classic American character. He is a rogue who marches to the beat of his own drummer. His stubbornness, indefatigable spirit, and nonconformity are a symbol of the timeless American spirit. His character is reminiscent of Winston Smith in Orwell’s 1984, Steve McQueen’s Virgil Hilts character in The Great Escape, and Jack Nicholson’s Randall McMurphy character in One Flew Over the Cuckoo’s Nest. Captain, played by Strother Martin, makes it his mission to beat the nonconformity out of Luke. No matter how bad he is beaten, he comes back for more. His indomitable fortitude and independent attitude inspires the other prisoners. He escapes from the prison twice and is caught and brought back. Captain thinks that he has finally broken his will as the other prisoners see him beg for mercy, but Luke escapes one final time and is shot dead. In death Luke regained all the adulation he lost among the prisoners and became a mythic hero.

Americans have a choice. They can allow their government to bully and threaten them into conforming to their view of reality like Winston Smith or they can go down swinging like Cool Hand Luke and Randall McMurphy. The cowboy spirit of the Old West is what is required today. We need tough hardened individualists who are willing to say enough is enough. Our government has been corrupted by weak men slithering around the halls of Congress soliciting for money, an evil banking cartel creating fiat money, corporate fascists paying off criminals in Washington DC, and the military industrial complex enforcing Washington’s power across the globe. The country longs for an Andrew Jackson or a Dwight Eisenhower. Instead we are stuck with Harry Reid and Nancy Pelosi. The citizens of the country have chosen a false security in place of liberty and freedom.

This country achieved greatness because Americans took chances, had the freedom to succeed or fail, picked themselves up when they failed, and lived their lives within a moral framework of fairness and honesty. That flame of independence and freedom is dying out. Americans no longer believe in shared sacrifice, working hard, honoring a sense of civic duty, morality, or modesty. A private banking cartel controls the purse strings and protects its bank owners and its protectors in Congress. The President wages wars across the globe without Constitutional approval from Congress that is required. Agencies of government operate in secret, assassinating foreign enemies, fomenting unrest in other countries, and spying on Americans. Look at the fear we’re feeding. Look at the lives we’re leading.

Look at your young men fighting
Look at your women crying
Look at your young men dying
The way they’ve always done before

Look at the hate we’re breeding
Look at the fear we’re feeding
Look at the lives we’re leading
The way we’ve always done before –  Guns N Roses – Civil War

Brainwashed Pride

“It is forbidden to kill; therefore all murderers are punished unless they kill in large numbers and to the sound of trumpets.” –  Voltaire

My hands are tied
The billions shift from side to side
And the wars go on with brainwashed pride
For the love of God and our human rights
And all these things are swept aside
By bloody hands time can’t deny
And are washed away by your genocide
And history hides the lies of our civil wars – Guns N Roses – Civil War

According to our own Declaration of Independence:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Do these human rights exist today in our country? Is our system conducive to justice and human dignity? I contend that we have sacrificed our liberty for security. We’ve sacrificed justice for safety. We’ve sacrificed freedom for enslavement by fascist corporatism. We’ve sacrificed peace for never ending war. Your government knows everything you are doing. They can monitor your phone calls. They can monitor your emails. They can watch your every move with satellites. They can brand you a terrorist, break down your front door and take you away. All of this can be done in the name of safety. We have allowed this to happen with virtually no debate or dissent from the masses. These choices have led our once great Republic to the edge of the abyss. As we stare into this abyss we have a choice. If we continue on our current path we are destined for a brutish future of totalitarianism, wars, resource depletion, and violent conflicts across the globe. If we display persistence and never say die attitude of Cool Hand Luke, we have a opportunity to capture this country back from the corrupt ruling privileged class. It may take a Revolution to do so, but so be it. If we choose not to fight, we are fated to wear leg chains for the rest of our incarcerated existence.

When the Legislative branch willingly delegates its Constitutional authority to declare war to the Executive branch, the citizenry has no opportunity to be heard. This is a bastardization of our Constitution as envisioned by our Founding Fathers. We have Presidents who invade other countries in the name of God.

“I am driven with a mission from God. God would tell me, ‘George go and fight these terrorists in Afghanistan’. And I did. And then God would tell me ‘George, go and end the tyranny in Iraq’. And I did.”  – George W. Bush

Of course the reason sold to the American public was weapons of mass destruction. I wonder if the American people would have rallied around the flag if they knew President Bush believed he had been instructed by God to invade Iraq. Instead our National Security Advisor was warning of imminent mushroom clouds unless we invaded.

“The problem here is that there will always be some uncertainty about how quickly he can acquire nuclear weapons. But we don’t want the smoking gun to be a mushroom cloud.”  – Condoleezza Rice

A concerted campaign of lies and exaggerations were used to mislead the American public into supporting the invasion of Iraq. This brainwashing effort covered up the fact that plans were being discussed before 9/11. Paul O’Neill, the Treasury Secretary at the outset of the Bush administration, detailed the preparations in his book The Price of Loyalty. At the first meeting of the National Security Council on January 30, 2001, seven months before the 9/11 attacks, Rumsfeld argued, “What we really want to think about is going after Saddam.” Regime change in Iraq, he argued, would allow the U.S. to enhance the situation of the pro-American Kurds, redirect Iraq toward a market economy, and guarantee a favourable oil policy.

Rumsfeld’s recommendation was taken up by Dick Cheney’s National Energy Policy Development Group. This task force decided that enhanced American influence over the production and sale of Middle East oil should be “a primary focus of U.S. international energy policy,” relegating both the development of alternative energy sources and domestic energy conservation measures as meaningless. By March of 2001, according to O’Neill, who was a member of both the NSC and the task force: “Actual plans…. were already being discussed to take over Iraq and occupy it — complete with disposition of oil fields, peacekeeping forces, and war crimes tribunals — carrying forward an unspoken doctrine of pre-emptive war.” O’Neill also reported that, by the time of the 9/11 attacks on the World Trade Center and the Pentagon, the plan for conquering Iraq had been developed and that Secretary of Defense Rumsfeld indeed urged just such an attack at the first National Security Council meeting convened to discuss how the U.S. should react to the 9/11 attack.

“We know he’s been absolutely devoted to trying to acquire nuclear weapons, and we believe he has, in fact, reconstituted nuclear weapons.”  – Dick Cheney

The result of these lies and secret plans withheld from the American public has been 5,400 dead American soldiers, 46,000 wounded soldiers, $1 trillion in costs to wage the wars, at least 150,000 civilian casualties, and oil prices that have quadrupled since 2001. The blood of all these innocent people is on the hands of those who lied, hid the truth, and committed genocide. The bitter truth is that power, oil, and money have been the driving forces of American imperialism for the last century.

Feeds the Rich While it Buries the Poor

“When the rich wage war, it’s the poor who die.” – Jean-Paul Sartre

I don’t need your civil war
It feeds the rich while it buries the poor
You’re power hungry sellin’ soldiers
In a human grocery store
Ain’t that fresh
I don’t need your civil war

Look at the shoes you’re filling
Look at the blood we’re spilling
Look at the world we’re killing
The way we’ve always done before
Look in the doubt we’ve wallowed
Look at the leaders we’ve followed
Look at the lies we’ve swallowed
And I don’t want to hear no more –   Guns N Roses – Civil War

George Washington, a true American warrior, understood that a large military establishment was dangerous to the Republic. He spent eight years in the field fighting for American Independence. He understood the power of a large dominant military.

“Over grown military establishments are under any form of government inauspicious to liberty, and are to be regarded as particularly hostile to republican liberty.” – George Washington

 
What most people do not understand is the relationship between the Federal Reserve and war. The Federal Reserve is responsible for every economic difficulty that afflicts our nation. Without a Federal Reserve creating fiat paper currency out of thin air, an empire could not wage continuous war. There is no clearer proof than evaluating major U.S. military conflicts prior to 1913 versus after the creation of the Federal Reserve. Between 1791 and 1913 (122 years) the U.S. engaged in only four major conflicts:

  • War of 1812
  • Mexican-American War
  • Civil War
  • Spanish-American War

Only the War Between the States can be considered significant and it was fought solely on U.S. soil. The Federal Reserve was created in 1913 by bankers in collusion with politicians in Washington DC. This private central bank, run by a cartel of major banks, has encouraged politicians to wage war. Continuous conflict enriches bankers, as all the money used to wage war is borrowed from them. This may explain why between 1913 and 2010 (97 years) the U.S. has engaged in eleven significant foreign conflicts:

  • World War I
  • World War II
  • Korean War
  • Vietnam War
  • Grenada Invasion
  • Panama Invasion
  • Gulf War
  • Somalia
  • Kosovo War
  • Afghan War
  • Iraq War

Above and beyond these actual conflicts, we engaged in a 46 year Cold War with the Soviet Union that involved funding opponents to communism, coups, and assassination of foreign leaders. This Cold War was used as an excuse to station troops in over a 100 foreign countries, creation of the military industrial complex and creation of a secret spy agency, the CIA. Conveniently, when the Cold War ended with the collapse of the Soviet Union, a new amorphous war was created by politicians and their bankers. The nebulous War on Terror has been exploited to create the Department of Homeland Security and passage of the Orwellian Patriot Act, which allows the government to violate Americans’ right to privacy in the name of National Security.

The War on Terror is used as the reason for invading foreign countries and using predator drones to blow up whoever our leaders feel is a threat. The cost for the War on Terror thus far has been $2.3 TRILLION. There are trillions more to be wasted because you can never win a war on terror. Who benefits from a never ending war on terror? Every dime of the $2.3 trillion has been borrowed. The beneficiaries of debt are bankers, as they reap billions in profits and pay themselves millions in bonuses. The money that is loaned to the government is then paid to the companies that constitute the military industrial complex. These companies then buy the support of Congress for their new and improved killing machines. This is the circle of death encompassing Washington DC.

Section 8 of the U.S. Constitution says Congress has the power to coin Money, regulate the Value thereof, and of foreign Coin and to declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water. The corrupt politicians who have controlled the country for the last century have abrogated their power to coin money to a secretive private bank run by crooked bankers. Since 1941 Congress has failed in their Constitutional duty to be the branch of government that commits citizens of the U.S. to war. They have allowed the executive branch to decide when Americans will die and for what causes. The Bush Doctrine, created by Dick Cheney, Donald Rumsfeld, and Paul Wolfowitz, is policy of preventative war, which holds that the United States should topple foreign regimes that represent a potential or perceived threat to the security of the United States, even if that threat is not immediate; a policy of spreading democracy around the world, especially in the Middle East, as a strategy for combating terrorism; and a willingness to pursue U.S. military interests in a unilateral way. Should the American people follow the doctrine of men who never served a day in the U.S. military and have no difficulty in wiping their blood stained hands all over the U.S. Constitution or a wise Founding Father who risked his life to create that Constitution?

“The Constitution vests the power of declaring war in Congress; therefore no offensive expedition of importance can be undertaken until after they shall have deliberated upon the subject and authorized such a measure.” – George Washington

Ronald Reagan increased military spending dramatically in the 1980s in an effort to bankrupt the Soviet Union. Total spending on defense in the decade reached $3.8 trillion. The collapse of the only country in the world that threatened the U.S. militarily left a vacuum in the 1990s. This peace dividend resulted in military spending decreasing to $3.3 trillion in the 1990s. Defense companies did not fare well in this decade as plants were closed and employees laid off. The 9/11 terrorist attack was a windfall for the military industrial complex, the neo-conservative Constitution burners, and privileged bankers. With no country on earth capable of competing with our immense military machine, the government used fear, loathing and false patriotism to ramp up military spending to $5.3 trillion during the just completed decade. Ask yourself who benefited from these expenditures. Are you safer? Are you better off financially today? Oil prices rose from $20 a barrel to $145 a barrel. The U.S. National debt rose from $5.7 trillion to $12.3 trillion. The financial system collapsed due to the actions of the Federal Reserve, greedy criminal bankers, and self serving corrupt politicians. And still the wars go on.

War is a Racket

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

My hands are tied
For all I’ve seen has changed my mind
But still the wars go on as the years go by
With no love of God or our human rights
and all these dreams are swept aside
By bloody hands of the hypnotized
Who carry the cross of homicide
And history bears the scars of our civil wars

I don’t need your civil war
It feeds the rich while it buries the poor
You’re power hungry sellin’ soldiers
In a human grocery store –   Guns N Roses – Civil War

General Smedley Butler, at the time of his death was the most decorated Marine in U.S. history. He was awarded 16 medals, 5 for heroism. His 33 year military career was marked by bravery and brilliance in command. His 1935 book, War is a Racket, detailed how profiteering by corporate fascists encouraged military imperialism by America’s leaders. He condemned the profit motive behind war and described it in no uncertain terms.

“I spent 33 years and four months in active military service and during that period I spent most of my time as a high class thug for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.” –   General Smedley Butler

Smedley Butler another Cool Hand Luke character who was willing to stand up for what he knew to be right, no matter the consequences, is nowhere to be found on the political scene today. Only Ron Paul seems able to summon the courage to speak the truth in Washington DC.

“War is never economically beneficial except for those in position to profit from war expenditures. The moral and constitutional obligations of our representatives in Washington are to protect our liberty, not coddle the world, precipitating no-win wars, while bringing bankruptcy and economic turmoil to our people.” –   Ron Paul

Those who profit from war are easy to determine. The chart below details the obscene profit increases of the five biggest defense contractors in the U.S. Profits soared by 205% between 2000 and 2007 to $13.5 billion. With revenue up 155%, it is interesting to note that their work forces only grew by 10%, with two of the firms decreasing their work forces. Luckily, the righteous CEOs of these distributors of death were able to increase their compensation by 173%, ranging from $10 million to $60 million per year. 9/11 has proved to be an extreme windfall for peddlers of war. I’m sure the $463 million spent by the Defense Industry to “lobby” Congressmen over the last 10 years has had no impact on these results. I’m certain Haliburton’s association with Vice President Dick Cheney did not factor in the $3.5 billion profit they generated in 2007 after generating only $500 million of profit in 2000.

War most certainly feeds the rich, while it buries the poor. The people pulling the strings in Washington DC are all rich. George Bush, Dick Cheney, Hank Pauson, Ben Bernanke, Barack Obama, and Tim Geithner are all multi-millionaires. It matters not which party controls the levers of power. The racket is perpetual. The most liberal President since FDR is submitting the largest Defense spending budget in U.S. history, exceeding $700 billion for 2010. The cumulative National Debt of the U.S. from 1791 until 1977 (186 years) totaled $699 billion. We now spend more than that every year on war.

There are no rich dying in the deserts of Iraq and Afghanistan. There are no wealthy Wall Street bankers’ sons or daughters dying in the Middle East. Isn’t it fresh that there are 237 millionaires out of 535 members of Congress and only 10 members of Congress with a son or daughter putting their lives on the line in Iraq or Afghanistan? The facts are that the lower middle class and poor die in a foreign desert like dogs for no good reason. The rich and powerful line their pockets while selling soldiers in a human grocery store. The hypnotized masses are manipulated by government propaganda, ideologue think tanks, and corporate mainstream media. Even the financial crisis benefits the military industrial complex. Before the crisis, military recruiters had tremendous difficulty in convincing enough young people to become cannon fodder for the War on Terror. When 22% of the population is unemployed, there is no such problem. Nationwide, the Air Force reached its highest number of enlistments since 2004, and the Marines Corps was able to do enough recruiting in 2009 to go from 175,000 in its ranks to 202,000. The Army has exceeded its goal of 80,000 enlistments from 2006 to 2008, and it took in more than 70,000 soldiers, with a goal of 65,000 in 2009. The grocery store shelves have been restocked.

Sometimes Nothing can be a Real Cool Hand

“How did we win the election in the year 2000? We talked about a humble foreign policy: No nation-building; don’t police the world. That’s conservative, it’s Republican, it’s pro-American – it follows the founding fathers. And, besides, it follows the Constitution.” –   Ron Paul

I find it revealing that three men who occupied the top military position of the nation, led men into battle, and understood the responsibility in committing American citizens to battle were the most reflective and cautious in using the military power of the U.S. in foreign entanglements.

“Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.” – Dwight D. Eisenhower

“Although a soldier by profession, I have never felt any sort of fondness for war, and I have never advocated it, except as a means of peace.” – Ulysses S. Grant

“Wars can be prevented just as surely as they can be provoked, and we who fail to prevent them, must share the guilt for the dead.” – Omar N. Bradley

The United States has spent $12.5 trillion on the Military over the last three decades. The U.S. National Debt totals $12.3 trillion. Essentially every dime spent on the military in the last three decades has been borrowed. We police the world using a credit card with an unlimited line of credit. The issuer of the credit card is the Federal Reserve Bank. The systematic destruction the U.S. dollar over the last 97 years has allowed politicians to steal from the middle class and enrich the corporate fascists that control the country. Dr. Edwin Vieira describes the truth of our dilemma:

“Private financial special-interest groups buy politicians; in public office these politicians empower the special-interest groups by statute to manipulate the monetary and banking systems; to the extent that these manipulations succeed, the profits are largely privatized; and to the extent that the manipulations fail, the losses are almost entirely socialized. In either case, the general public is held hostage to the racket, and foots the gargantuan bill for its operation. And the guilty parties escape scot free to steal again, and again, and again.”

We are left a hollowed out economy with a middle class that hasn’t seen their real wages increase in 30 years. Our manufacturing base has been gutted. The only thing this country has produced in the last ten years is killing machines. Is society more likely to advance by producing a computer or a humvee? Is our civilization better off with a plant producing tanks or hybrid cars? Defense spending means the government is pulling away resources from free market uses and instead using them to buy weapons and to pay for soldiers and Blackwater mercenaries.  In realistic economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing expansion and costing jobs. Based on the chart below, we’ve made our selection. It is a choice that will surely lead to an economic collapse as the cumulative weight of debt will capsize our ship of state.

We are now at a critical crossroads for our Republic. Normally intelligent Americans must open their eyes to the collusion between politicians, military industrial complex, Federal Reserve and corporate media that have used fear and misinformation to gain power over brainwashed American citizens. The ruling elite fear and despise the American public. The Department of Homeland Security has been given free rein to spy on American citizens, classifies Ron Paul supporters as potential domestic terrorists, considers returning Iraq veterans as a potential threat, and seems to be directing their laser focus toward suppressing domestic civil dissent. U.S. combat troops of Northern Command have been stationed on domestic soil. A list of Executive Orders gives FEMA and the President greater control over many aspects of our lives. Last week Executive Order 13528 created a Council of Governors which will coordinate the Federal and State responses to domestic crisis. The Council will coordinate:

(a) matters involving the National Guard of the various States;
(b) homeland defense;
(c) civil support;
(d) synchronization and integration of State and Federal military activities in the United States; and
(e) other matters of mutual interest pertaining to National Guard, homeland defense, and civil support activities.

 

Are these the actions of a government preparing for a bright future? The ruling class sees their control slipping away. Any honest financial analyst can perceive that the country is headed for catastrophe. Hyperinflation and disintegration of the U.S. dollar are in our future. The consequence will be anger, chaos, and social unrest. The ruling elite are preparing for this by stationing troops in the U.S. and creating the means to squash any threats to their wealth and power. Now is the time to confront these traitors to the Republic. Speaking the truth, questioning authority, practicing civil disobedience, and peaceful protest are necessary to confront the evil doers today. I believe it is time for every concerned American to invoke their right to bear arms. Totalitarian states always act to install gun control laws. The biggest threat to America is from within, not from without.

“How far you can go without destroying from within what you are trying to defend from without?”  –  Dwight D. Eisenhower

We practice selective annihilation
Of mayors and government officials
For example to create a vacuum
Then we fill that vacuum
As popular war advances
Peace is closer
Guns N Roses – Civil War

FISCAL FARCE, FAILURE, FANTASY & FORNICATION

I’ve put off writing an article about what is likely to happen in 2013 so I could peruse the thousands of other articles by reputable bloggers, paid pundits, Wall Street shills and captured charlatans to gather their wisdom. It’s essential that I make predictions for 2013 so I can write another article in December rationalizing why 90% of my predictions failed to materialize. Reading all of these 2013 prediction articles made things much clearer for me. I now know for sure:

  • The stock market will reach an all-time high.
  • The stock market will fall 42%.
  • The economy will strengthen as the year progresses.
  • The economy will descend into a depression.
  • The USD will strengthen.
  • The USD will collapse.
  • Gas prices will set new highs.
  • Gas prices will fall below 2012 levels.
  • Gold will rise to $10,000 per ounce.
  • Gold will drop below $1,000 per ounce.
  • We will experience hyperinflation.
  • We will experience horrific deflation.
  • Obama will compromise with the Republicans and put the country on a path to prosperity.
  • Obama will create a debt ceiling crisis and assume dictatorial powers as a result.
  • Snooki will be a better mother than Kim Kardashian.
  • Honey Boo Boo will beat I Didn’t Know I Was Pregnant in the Neilson ratings.

The majority of 2013 prediction articles are written to support the agenda of the writer. Many are trying to sell newsletter subscriptions or investment services. Their predictions will match the theme of their newsletter. Others are Wall Street paid shills who will predict what they are paid to predict by their owners. Then there are the political hacks who tow the party line with their predictions. But no one can top the predictive powers of the CBO. They just put out their ten year updated forecast reflecting the fabulous fiscal cliff deal that saved the country. According to the CBO, the “compromise” to reduce our deficits will add a mere $4 trillion to the national debt over the next ten years. I’m sure this will prove to be accurate. Just take a look at their 2002 projection, after passage of the Bush tax cuts:

The CBO predicted the FY2012 surplus would be $641 billion, the national debt would total $3.5 trillion, the debt held by the public would total $1.273 trillion, and GDP would total $17.2 trillion. They missed by that much.

The actual FY12 results were:

  • The true deficit was $1.37 trillion (amount national debt increased – not the phony deficit number reported by the mainstream media).
  • The national debt was $16.1 trillion.
  • The debt held by the public was $11.3 trillion.
  • GDP was $15.8 trillion.

Based on these results, I won’t be asking the CBO for help with my Super Bowl bet. Making ten year predictions is beyond worthless, but public policy in Washington DC is based on these useless CBO projections. The entire fiscal cliff kabuki theater fictitious crisis reveals the politicians and mainstream media pundits to be liars, fools and frauds. The tax the rich to cut the deficit storyline was sold to the public and won the day. Of course, the highly accurate CBO immediately revealed that the Orwellian named American Taxpayer Relief Act of 2012 adds $4 trillion to the national debt over the next ten years. Based on the accuracy of their previous predictions, it’s a guarantee the national debt goes up by $8 trillion, as the rich take advantage of the thousands of loopholes in the IRS code they paid for to avoid paying the taxes expected by the CBO.

Hypocrisy abounds on both sides of the aisle in Washington DC and on the media company propaganda channels. As the national debt soared from $10.6 trillion on the day Obama took office to $16.4 trillion today, I heard shrieking liberal talking heads on MSNBC, CNN, and the rest of the liberal media blame the debt on the Bush tax cuts and the Bush wars. If the Bush tax cuts were so horrific, why did Obama and his minions just make 98% of these tax cuts permanent? Liberals held protest marches across the country against Bush’s wars and burned him in effigy. Obama’s defense budgets have been larger than Bush’s and he doubled down on our miserable failure in Afghanistan. You don’t hear a peep from the liberals about the warmongering Barack Obama who has kill lists and unleashes predator drones, killing women and children across the globe. Liberals pretend to be concerned about the welfare of the citizens, but continue to support a President that uses executive orders to imprison citizens indefinitely without charges, has expanded surveillance on citizens, has kept Guantanamo open, signs the continuation of the Patriot Act, and proposes overturning the Second Amendment by executive order. Liberals shriek about the evils of an unregulated Wall Street, while remaining silent as Obama hasn’t prosecuted a single banker for the greatest financial fraud in world history. You don’t hear a peep about Jon Corzine, who stole $1.2 billion from the accounts of farmers and ranchers. Liberals talk about regulation and then stand idly by while Wall Street lobbyists wrote the Dodd Frank law and insurance and drug company lobbyists wrote the Obamacare law. Liberal hypocrisy knows no bounds and is only matched by Neo-Con hypocrisy.

The Neo-Con controlled Republican Party is a pathetic joke. They have the guts to declare themselves the party of fiscal responsibility, after Bush’s eight year reign of error. He and his fiscally responsible party were handed a budget in surplus and managed to add $4.9 trillion to the national debt by waging undeclared wars, encouraging Wall Street to create the biggest fraudulent financial bubble in history, creating a new $16 trillion unfunded entitlement (Medicare Part D), cutting taxes without paying for them, and creating a massive new government agency (DHS) to take away our liberties and freedom. Federal government spending grew from $1.9 trillion to $3.0 trillion under Bush and the Republicans. Does that sound fiscally responsible?

Does anyone believe the Republican Party is serious about cutting anything? Tough guy Republicans like Big Chris Christie preach fiscal responsibility when going to war with teachers’ unions, but he squeals  like a stuck pig when a $60 billion pork filled, unpaid for, Sandy Relief bill is held up in Congress. The courageous fiscally responsible Congress critters passed the entire pork filled, unfunded, bloated, vote buying joke. It included $28 billion to mitigate future disasters, $3 billion to repair or replace Federal assets, and $6 billion for transportation projects completely unrelated to Sandy damage.   The hypocrisy of politicians who proclaim the $50 billion of 2013 fiscal cliff tax revenue as deficit cutting, and then immediately piss it away by paying people to rebuild their houses yards from the Atlantic Ocean while funding billions of non-disaster related projects is disgusting to behold. There is nothing like compromise to add another $60 billion to the national debt.

Our entire economic and political system is a farce. The American people are being played by the powerful interests that provide them with an illusion of choice. Both parties serve the interests of their masters and the fiscal cliff show and debt ceiling show are a form of reality TV to keep the masses alarmed, fearful, and believing there is actually a difference between the policies of the ruling class. The charade has played out in its full glory in the last few weeks with Obama convincing the masses he had stuck it to the rich, while in reality the working middle class got it good and hard when they got their January paychecks. This chart details the tax changes that went into effect on January 1.

taxbill

The funniest part this fiscal fiasco farce is watching the reaction of the sheep who believed Obama and the mainstream media storyline. Obama was able to raise the published top rate on people making over $400,000. The newly defined “rich” laughed heartily as they know only fools pay anywhere near the top rate. The rich just call their tax advisor and instruct them to use one of the thousands of tax loopholes in the 75,000 page IRS tax code to “legally” avoid the new Obama rates. Meanwhile, both parties and their mainstream media mouthpieces downplayed the 2% payroll tax increase on every working American. This tax increase has been a complete surprise to the reality TV zombies and Facebook aficionados. Even college educated professionals in my office had no idea their next monthly paycheck was going to be $150 to $200 lighter. This will wipe out most, or all, of the annual raise they received. The tax will fall heavily on the 75% of households that make less than the $113,700 Social Security cutoff. For a struggling family of four earning the median income of $50,000, the $1,000 less in their paychecks will mean less food, putting off trips to the doctor, driving on bald tires, or not taking the family on a vacation to the Jersey shore. The $2,274 increase in taxes (.57%) for the Wall Street banker making $400,000 probably won’t put too much of a crimp in his Hamptons lifestyle.

The joke is on the American people as the rich will ante up maybe $50 billion of taxes in 2013, while the working middle class will be skewered for $125 billion. How’s that “Tax the Rich” slogan working out for you?

Only in the Orwellian capital of Washington DC would a bill that was supposed to provide tax relief to the middle class and spending cuts to reduce the deficit, actually increase the tax burden of a median household by $1,000 and perpetuate the pork spending payoffs to campaign contributors and friends of the slimy politicians that slither through the halls of Congress. The list of pork and bribes should be nauseating to hard working Americans across the country:

$30 billion extension of the 99 weeks of unemployment benefits, even though we are supposedly in the 3rd year of economic recovery. Continuing to pay people to not work for two years will surely boost employment.

$14.3 billion for a two-year extension of the corporate research credit benefiting large technology companies like IBM and Hewlett Packard.

$12.2 billion one-year extension of the production tax credit for wind power.

$11.2 billion two- year extension of the active financing exception, which lets GE, Caterpillar Inc. (CAT) and Citigroup Inc. (C), among others, defer taxes on financing income they earn outside the U.S.

$1.9 billion extension of the Work Opportunity Tax Credit for hiring workers from disadvantaged groups, benefitting mega-restaurant chains like McDonalds.

$1.8 billion extension of the New Markets Tax Credit for investments in low- income areas, benefitting JP Morgan and other Wall Street shyster banks.

$650 million tax credit for manufacturing energy-efficient appliances, benefitting mega-corps like Whirlpool.

$430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States. Producers can expense up to $15 million of costs for their projects. NBC thanks you.

$331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50% of the cost to maintain tracks that they own or lease.

$248 million in special expensing rules for films and television programs.

$222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced in the islands and imported to the mainland.

$78 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.”

$59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon.

$4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes.

So when you see the cut in your take home pay, just comfort yourself knowing that JP Morgan, Citigroup, GE and hundreds of mega-corporations were able to retain their tax breaks. As they have done for decades, Congress and the President agreed to address spending cuts at a future date. Of course, a government spending cut isn’t actually a cut. It’s a lower increase than their previous projection. Nothing is ever cut in Washington DC. The austerity storyline is a lie. Not a dime has been cut from the Federal budget. Intellectually dishonest ideologues try to peddle the wind down of the Obama $800 billion porkulus program as a cut in Federal spending. They sold this Keynesian “shovel ready” crap to a gullible public as stimulus to jumpstart the economy. Federal spending was $3.0 trillion before the Obama stimulus. After the two year stimulus was pissed away without helping the economy one iota, the baseline should have been back in the $3.2 trillion range. Instead, FY13 Federal spending will be $3.8 trillion. This hasn’t kept liberal ideologues like Krugman and his minions in the mainstream media from blaming crazy Tea Party Republicans for inflicting horrendous austerity measures on the poor and disadvantaged.

The chart above reveals a few truths:

  • The country has been blessed with two of the worst presidents in U.S. history over the last twelve years.
  • When Federal spending as a percentage of GDP is beyond two standard deviations over the normal range during the last sixty years, your problem is not lack of tax revenue.
  • Obama and the current Congress are spending at a level of 24% of GDP versus the 18% of GDP when Clinton left office. This amounts to a nose bleed altitude $950 billion higher than the level Clinton was spending in his final year in office.

The Op-eds in liberal rags across the land decry the lack of civility in Washington DC and plead for politicians on both sides of the aisle to come together and compromise for the good of the country. This line of bullshit would be laughable if it wasn’t so wretched in its falsity. Compromise is what has left this country with a $16.4 trillion national debt, $200 trillion of unfunded liabilities, and $1 trillion deficits as far as the eye can see. Democrats have compromised and let the Republicans create a warfare state. Republicans have compromised and let Democrats create a welfare state. The two headed monster living in the swamps of Washington DC just voted to increase taxes on all Americans. They voted to hand criminal Wall Street banks $700 billion. They voted to pass the Patriot Act. They voted to pass the NDAA. They’ve allowed the President to wage undeclared wars in Iraq, Afghanistan, Libya, and now Iran. They voted for a $663 billion Defense bill that includes tens of billions the Secretary of Defense doesn’t even want. They will vote to raise the debt ceiling in the next two months. The last thing this country needs is more compromise. We can’t afford any more compromise. The chart above proves what can happen when gridlock ensues, spending restrictions are enforced, and confrontation displaces compromise. After the 1994 Republican takeover of Congress, gridlock ensued for the next six years. PAYGO restrictions in the Omnibus Budget Reconciliation Act of 1990 didn’t allow unfettered spending increases. The result was Federal spending falling from 22% of GDP to 18% of GDP and a budget surplus. The Pay-Go restrictions expired in 2002 and Democrats and Republicans have compromised to the tune of a $10.2 trillion increase in the national debt in ten years. The hypocrisy of pandering deceitful politicians is boundless and shows utter contempt for the intelligence of the American populace.

“Raising the debt ceiling does not authorize more spending. It simply allows the country to pay for spending that Congress has already committed to. If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed. We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialist who track down loose nuclear materials wouldn’t get their paychecks. Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire, interest rates would spike for anybody who borrows money – Every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire. We are not a deadbeat nation.

It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession. And ironically it would probably increase our deficit. So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. Republicans in Congress have two choices here. They can act responsibly, and pay America’s bills, or they can act irresponsibly and put America through another economic crisis. But they will not collect a ransom in exchange for not crashing the American economy.” – President Barack Obama – January 14, 2013

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. The Senate continues to reject a return to the common sense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and to tax cuts.

The Senate had to abide by the common sense budgeting principle of balancing expenses and revenues. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.” – Senator Barack Obama – March 16, 2006

I could have shown quotes from George W. Bush during the 2000 Presidential campaign talking about a non-interventionist foreign policy and no need for the U.S. to get involved in nation building and then proceeding to pre-emptively attack sovereign countries while wasting trillions and impoverishing unborn generations trying to create “democracy” in the Middle East at the point of a gun as a cover to protect “our” oil. The point is that we are being given the illusion of choice. Everyone knows the debt ceiling will be raised after another episode of Washington DC Kabuki Theater, presented by the corporate mainstream media in breathtaking detail, because the politicians are beholden to their owners and those owners want more of our money. That is why spending will never be willingly cut by the spineless puppet congressmen, as their strings are pulled by the corporate puppet masters and they dance to the tune of the banking oligarchs that own this country.

After witnessing the fighting of undeclared never ending wars, passage of freedom destroying legislation like the Patriot Act & NDAA, approval of pork barrel spending to the tune of hundreds of billions, rule by Executive Order, using ZIRP to extract hundreds of billions from senior citizen savers and give it to criminal Wall Street banks, forcing the American people at gunpoint to replenish the Wall Street banks with $700 billion after they had committed the greatest financial fraud in history, and a continuing trampling of the U.S. Constitution, the American people continue to remain willfully ignorant of the truth. The American Dream is dead. We’ve allowed a rich, privileged, elite few to achieve hegemony over our economic and political system with their control of the media and manipulation of our financial markets. They will collapse the country because they will never be satisfied with the amount of wealth and power they’ve accumulated. Their voracious greed will be their downfall. The sooner we can channel the anger of George Carlin, the sooner we can put an end to this corporate fascist reign of terror.

“Politicians are put there to give you that idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations, and they’ve long since bought and paid for the Senate, the Congress, the State Houses, and the City Halls. They’ve got the judges in their back pockets. And they own all the big media companies so they control just about all the news and information you get to hear. They’ve got you by the balls.

They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.

It’s a big club and you ain’t in it! You and I are not in the Big Club. By the way, it’s the same big club they use to beat you in the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to think and what to buy. The table is tilted folks, the game is rigged. And nobody seems to notice, nobody seems to care. That’s what the owners count on, the fact that Americans are and will probably remain willfully ignorant of the big red, white, and blue dick that’s being jammed up their assholes every day. Because the owners of this country know the truth, it’s called the American Dream, because you have to be asleep to believe it.” – George Carlin

I never did get around to making my 2013 predictions. I’ll give it a stab in my next article: Apparitions in the Fog.

WE PISS TRILLIONS AWAY OVERSEAS WHILE OUR INFRASTRUCTURE CRUMBLES

The http://theeconomiccollapseblog.com/ with another fine list of things to depress you. Here is the missing piece. I hear various jackass pundits like Larry Summers declare that what this nation needs is a massive Keynesian Federal Infrastructure Program to repair our infrastructure and generate jobs. It’s a crock of shit. The Federal government, state governments, county governments, and municipal governments create budgets every fucking year and have been creating them for over 200 years. Expenditures for capital and infrastructure projects have been in these budgets every year. So why is our infrastructure crumbling?

It’s because these politicians and government bureaucrats have CHOSEN to spend YOUR money on gold plated public union contracts, beautiful new municipal buildings, bridges to nowhere, social welfare programs, food stamps, SSDI for depressed people, corporate tax breaks, solar energy subsidies, ethanol subsidies, and the biggest of them all – handing hundreds of billions to dictators we prop up throughout the world, three trillion dollars fighting wars in the Middle East, and spending $900 billion per year policing the world.

We spent billions blowing up Iraqi infrastructure, then spent billions more rebuilding Iraqi infrastructure that we had blown up, while our own infrastructure crumbles by the day.

Well it’s too fucking late people. The fucking money is gone. We can’t afford a massive Keynesian infrastructure program. The money is already committed to Social Security, Medicare, Obamacare, and the Military Industrial Complex. So Solly. 

 

21 Facts About America’s Decaying Infrastructure That Will Blow Your Mind

 
You can tell a lot about a nation by the condition of the infrastructure.  So what does our infrastructure say about us?  It says that we are in a very advanced state of decay.  At this point, much of America is being held together with spit, duct tape and prayers.  Our roads are crumbling and thousands of our bridges look like they could collapse at any moment.  Our power grid is ancient and over a trillion gallons of untreated sewage is leaking from our aging sewer systems each year.  Our airports and our seaports are clogged with far more traffic than they were ever designed to carry.  Approximately a third of all of the dam failures that have taken place in the United States since 1874 have happened during the past decade.  Our national parks and recreation areas have been terribly neglected and our railroads are a bad joke.  Hurricane Katrina showed how vulnerable our levees are, and drinking water systems all over the country are badly outdated.  Sadly, at a time when we could use significant new investment in infrastructure, our spending on infrastructure is actually way down.  Back during the 50s and the 60s, the U.S. was spending between 3 and 4 percent of GDP on infrastructure.  Today, that figure is down to about 2.4 percent.  But of course we don’t have any extra money to spend on infrastructure because of our reckless spending and because of the massive amount of debt that we have accumulated.  While the Obama administration is spending more than half a million dollars to figure out why chimpanzees throw poop, our national infrastructure is literally falling apart all around us.  Once upon a time nobody else on the planet could match our infrastructure, and now we are in the process of becoming a joke to the rest of the world.

The following are 21 facts about America’s failing infrastructure that will blow your mind….

#1 The American Society of Civil Engineers has given America’s crumbling infrastructure an overall grade of D.

#2 There are simply not enough roads in the United States today.  Each year, traffic jams cost the commuters of America 4.2 billion hours and about 2.8 million gallons of gasoline.

#3 It is being projected that Americans will spend an average of 160 hours stuck in traffic annually by the year 2035.

#4 Approximately one-third of all roads in the United States are in substandard condition.

#5 Close to a third of all highway fatalities are due “to substandard road conditions, obsolete road designs, or roadside hazards.”

#6 One out of every four bridges in America either carries more traffic than originally intended or is in need of repair.

#7 Repairing all of the bridges in the United States that need repair would take approximately 140 billion dollars.

#8 According to the U.S. Chamber of Commerce, our decaying transportation system costs the U.S. economy about 78 billion dollars annually in lost time and fuel.

#9 All over America, asphalt roads are being ground up and are being replaced with gravel roads because they are cheaper to maintain.  The state of South Dakota has transformed over 100 miles of asphalt roads into gravel roads, and 38 out of the 83 counties in the state of Michigan have transformed at least some of their asphalt roads into gravel roads.

#10 There are 4,095 dams in the United States that are at risk of failure.  That number has risen by more than 100 percent since 1999.

#11 Of all the dam failures that have happened in the United States since 1874, a third of them have happened during the past decade.

#12 Close to half of all U.S. households do not have access to bus or rail transit.

#13 Our aging sewer systems spill more than a trillion gallons of untreated sewage every single year.  The cost of cleaning up that sewage each year is estimated to be greater than 50 billion dollars.

#14 It is estimated that rolling blackouts and inefficiencies in the U.S. electrical grid cost the U.S. economy approximately 80 billion dollars a year.

#15 It is being projected that by the year 2020 every single major container port in the United States will be handling at least double the volume that it was originally designed to handle.

#16 All across the United States, conditions at many of our state parks, recreation areas and historic sites are deplorable at best.  Some states have backlogs of repair projects that are now over a billion dollars long….

More than a dozen states estimate that their backlogs are at least $100 million. Massachusetts and New York’s are at least $1 billion. Hawaii officials called park conditions “deplorable” in a December report asking for $50 million per year for five years to tackle a $240 million backlog that covers parks, trails and harbors.

#17 Today, the U.S. spends about 2.4 percent of GDP on infrastructure.  Meanwhile, China spends about 9 percent of GDP on infrastructure.

#18 In the United States today, approximately 16 percent of our construction workers are unemployed.

#19 China has plans to build 55,000 miles of highways by the year 2020.  If all of those roads were put end to end, it would be longer than the total length of the entire U.S. interstate system.

#20 The World Economic Forum ranks U.S. infrastructure 23rd in the world, and we fall a little bit farther behind the rest of the developed world every single day.

#21 It has been projected that it would take 2.2 trillion dollars over the next 5 years just to repair our existing infrastructure.  That does not even include a single penny for badly needed new infrastructure.

So where did we go wrong?

Well, one of the big problems is that we have become a very materialistic society that is obsessed with short-term thinking.  Investing in infrastructure is something that has long-term benefits, but these days Americans tend to only be focused on what is happening right now and most politicians are only focused on the next election cycle.

Another major problem is that there is so much corruption and waste in our system these days.  The government certainly spends more than enough money, but very little of that money is spent wisely.  A lot of the money that could be going toward rebuilding our infrastructure is being poured down the toilet instead.  For much more on this, please read my previous article entitled “16 Sickening Facts That Show How Members Of Congress And Federal Workers Are Living The High Life At Your Expense“.

Unfortunately, it is probably appropriate that our infrastructure is decaying because we are decaying in just about every other way that it is possible for a society to decay.

We are decaying economically, politically, mentally, emotionally, physically, morally and spiritually.

We are a complete and total mess.  So why shouldn’t what is happening to our infrastructure on the outside match what is happening to us as a nation on the inside?

And sadly, we simply do not have the money that we need for infrastructure because of all the debt that we have piled up.  The federal government, our state governments and our local governments are all struggling to stay afloat in an ocean of red ink, and unfortunately that means that spending on infrastructure is likely to be cut even more in the years ahead.

So get used to rotting, crumbling, decaying infrastructure.  What you see out there right now is only just the beginning.

ECONOMIC REPORT CARD – FAIL

We are now three and one half years into Barack Obama’s presidency. I thought a few pertinent charts would help us assess the success of his economic policies. Upon his election he demanded an $800 billion stimulus package in order to keep the unemployment rate from surpassing 8%. The $800 billion was to be spent over two years we were told and then government spending would be scaled back to pre-stimulus levels. There were 145 million Americans employed when Obama was elected. There are 9 million more working age Americans today than there were in 2008. There are now 142.4 million employed Americans. So, we’ve added 9 million potential workers and still have 2.6 less Americans employed. We have the same number of Americans employed as we did in early 2006, when there were 17 million less working age Americans.

The Obama stimulus plan was passed with everything he wanted. Democrats controlled the House and Senate and gave him exactly what he proposed. By October 2009, the unemployment rate was 10%. Obama’s stimulus package and economic policies have been so successful that he has been able to get the unemployment rate all the way down to 8.2% after three and one half years, even though he said his stimulus package would keep the unemployment rate under 8%. And all it took to get the unemployment rate down to 8.2% was for 8 MILLION Americans to leave the labor force. A critical thinking person who doesn’t swallow the crap peddled by the BLS and the rest of the government propaganda machine might question WHY 8 million Americans would leave the workforce when people desperately need income. If the labor participation rate had stayed constant, the current unemployment rate is 10.9%.

070612rbjune

The long-term chart below tells the true story. The BLS classifying millions as not in the labor force is a crock. The Obama apologists and sycophants peddle a false storyline about Baby Boomers retiring as the cause for this labor force decline. The fact is people over the age of 55 have the highest participation rate in history and it continues to rise. Of the 142.4 million employed Americans, only 114 million works more than 35 hours per week, with 28.4 million working part-time. That means that 20% of those employed are part time workers with no benefits. In 2008, prior to the ascendency of Obama, there were 125 million full-time workers and 20 million part-time workers. Obama has been able to increase the percentage of part-time workers from 14% to 20% in just over 3 years. Remember this fact when Obama touts the 3 million new jobs he’s created since 2010.

If you were wondering what the 8.5 million Americans who have left the labor force since 2008 were doing, look no further than the millions of bedrooms now functioning as classrooms for the University of Phoenix and the other on-line, for profit diploma mills that have proliferated with the doling out of hundreds of billions in cheap government student loans. These for profit diploma mills know how to game the system and get their money even if the students drop out after a few months. They educate 12% of students, receive 25% of federal student aid and account for nearly 50% of loan defaults. Sounds like a great business model.

Low interest Federal government loans have skyrocketed from $100 billion when Obama took office to $450 billion today. Total student loan debt has surpassed $1 trillion, with the average student graduating with $25,000 of debt and many more burdened with $100,000 or more of debt. Those part-time jobs making lattes at Starbucks aren’t cutting it. Default rates are already at a ten year high and are poised to skyrocket as more people graduate into a jobless job market. Not only is the American taxpayer on the hook for the $450 billion of direct Federal student loans, but the Federal government is guaranteeing another $450 billion. When the student loan bubble pops, the taxpayer financed bailout will be epic. And this is all being engineered by the Obama administration in order to artificially reduce the unemployment rate. Does this graph remind you of another bubble that resulted in a few problems for the American taxpayer?

After three and a half years, Obama’s policies have led to 11 million less full-time workers and 8 million more part-time workers – just like he drew it up on the board when he committed $800 billion of your tax dollars to saving our economy through classic Keynesianism. Obama declared the stimulus would be a two year jolt to get our economy back on track. Federal government spending was $2.7 trillion in 2006, $2.7 trillion in 2007 and $3.0 trillion in 2008, the last three years of Bush’s administration. If spending stayed on a standard trajectory, it would have been $3.1 trillion in 2009, $3.2 trillion in 2010, $3.3 trillion in 2011 and $3.4 trillion in 2012. With the end of the Iraq occupation in 2010, it should have dropped by $200 billion, resulting in total spending of $3.1 trillion in 2011 and $3.2 trillion in 2012.

Obama declared the stimulus would be short-term. Federal government spending should have risen to $3.5 trillion in 2009, $3.6 trillion in 2010 ($300 billion stimulus – $200 billion Iraq withdrawal), and then revert back to $3.3 trillion in 2011 and $3.4 trillion in 2012. Let’s see whether Obama was honest in his promises:

Federal Government Spending

2009 – $3.5 trillion

2010 – $3.5 trillion

2011 – $3.6 trillion

2012 – $3.8 trillion

After three and one half years of stimulus spending, Cash for Clunkers, Home Buyer Tax Credits, mortgage modification programs, Fannie, Freddie & FHA accumulating billions in bank losses, zero interest rates, QE1, QE2, Operation Twist, unlimited student loans, wars of choice in the Middle East, mark to fantasy accounting standards for Wall Street, and hundreds of billions in bonuses for criminal bankers, we are left with a $5.3 trillion (50% increase) higher national debt and a $300 billion (2.3% increase) higher real GDP. That’s not exactly a big bang for your Keynesian buck. The response you will get from the Obama apologists is, “Imagine how bad it would have been if we didn’t spend the money”. This is a classic liberal response when their solutions are a total failure. Krugman will declare that if we had only spent another $2 trillion all would be well.

As you can see, Obama and all the politicians in Washington DC are really good at spending your money on pork projects, paying off campaign contributors and compensating their corporate cronies. Do you see any reversion back to normalized spending? How can current spending be $300 billion higher than the two stimulus years if Obama was telling the truth in 2009? The Obamanistas declare we are still in an emergency and must borrow and spend to save the economy. The emergency never ends for politicians of both parties. This is how they have bastardized John Maynard Keynes’ theory. They love to implement spending when the economy is in the dumper, but they forget his admonition to pay down debt during the good times. It never happens. There will always be another emergency. Even 2nd grade level Sesame Street fans can see the Federal government spending and debt accumulation never reverses. It couldn’t be any more obvious, unless you are an intellectually dishonest Keynesian ideologue hack (aka Krugman).

This brings us to the crowning economic achievement of the Obama administration. His most successful program is unequivocally the SNAP food stamp program. When Obama assumed power in January 2009 there were 32 million Americans on food stamps and the annual cost of the program was $44 billion. Today there are 46 million Americans on food stamps and the annual cost is pacing at $75 billion. He has been able to get fully 15% of the U.S. population enrolled in this fantastic program and the Department of Agriculture is even running advertisements to convince more people to join.

And don’t worry about any restrictions. You can buy as much soda, ice cream, cheetos, and fudge brownies with your SNAP card as you choose. Of course, you are still free to purchase higher end fare.

A cynical less trusting soul than me might even conclude that Obama’s goal is to provide government entitlements to as many people as possible in order to win votes in the upcoming election. One might ask how he can tout an economic recovery and the millions of “new” jobs he has created since 2010, when 6 million people have been added to the food stamp rolls since his economic recovery officially began in 2010. I’m confused by the Obama distinction between success and utter failure.

Not far behind the food stamp program, the SSDI program has been another resounding Obama success. He has been able to enroll twice as many participants in this program as jobs created since the end of the recession. There are already 10 million people on SSDI costing the American taxpayer in excess of $150 billion per year. There are 250,000 people per month applying for benefits and the program will be broke by 2015. In a shocking development, when people began to roll off the 99 week unemployment gravy train, the number of new SSDI applications soared. I guess they were depressed at not being able to collect unemployment for two more years.

Bob Adelman recently summed up the SSDI scam:

“The program, funded federally but administered by the states, is being milked by many who have run out of unemployment benefits and other resources and haven’t been able to find work. At present one out of every eight working-age, non-retired individuals receive disability payments, some for “mental disorders” and “back pain.” Claims for mental disorders, for instance, have more than tripled from 10 percent of cases in 1982 to 32.8 percent in 2012, with half of those based on “mood disorders” such as depression or anxiety. Back or neck “problems” have increased by 31 percent and were the top cause of disability for 50- to 64-year olds. Depression and anxiety and other emotional problems increased by 20 percent, and now constitute one-third of all disability claims. Once on the rolls, beneficiaries have little incentive to return to work because their disability entitles them to additional benefits such as food stamps, Medicaid, Section 8 housing, and student-loan forgiveness. As a result less than one half of one percent of those on disability ever go back to work.”

I’m depressed by the results of Obama’s economic policies. Maybe I should apply for SSDI.

It appears that former college professor Obama never paid attention in his macroeconomics undergraduate course. The “guns versus butter model” doesn’t enter the equation for a profound thinker like Barack. Why do hard choices need to be made when Ben Bernanke is manning the printing press? In the real world, a nation has to choose between two options when spending its finite resources. It can buy either guns (invest in defense/military) or butter (invest in production of goods), or a combination of both. This can be seen as an analogy for choices between defense and civilian spending in more complex economies. Politicians and bankers have been ignoring this rational model since 1971 when Nixon closed the gold window. Why make difficult choices when you can borrow and print your way to prosperity? As a country we’ve chosen guns, butter, BMWs, McMansions, free unfunded healthcare, unfunded pensions, unfunded sickcare, and DHS implemented security for all. In order to prove himself tougher than George W., Obama, the socialist, has actually increased war spending by 23% to an all-time high. Fiat currency is an amazing invention. Guns, butter and healthcare for all.

Mainstream media liberals like Ezra Klein dutifully trot out charts and storylines trying to convince the ignorant masses that Obama is not to blame for the soaring national debt. They declare it was the Bush tax cuts and his wars. This blame Bush storyline is growing old as Obama has already extended the Bush tax cuts once, ramped up wars in the Middle East and cut payroll taxes for the last two years. The Office of Management and Budget has calculated the total increase in the national debt will be $7.8 trillion after eight years of Obama, 269% more than was accumulated during the Bush reign of error. I believe the $7.8 trillion is ridiculously optimistic. The national debt has increased by $5.3 trillion since Obama took office. It will go up another $200 billion by the end of this fiscal year. It will surely exceed $1 trillion per year during a 2nd Obama term as he would extend most of the Bush tax cuts, extend the payroll tax cuts, continue to increase war spending, and the hidden delayed Obamacare costs would arrive. His eight year report card will show a $9.5 trillion increase in the national debt, reaching the magic grand total of $20 trillion. The national debt to GDP ratio will be close to 120%.

This scathing assessment of Obama’s economic policies is by no means an endorsement of Mitt Romney or his economic plan, since he has never provided a detailed economic plan. After four years of a Romney presidency, the national debt will also be $20 trillion as his war with Iran and handouts to his Wall Street brethren replace Obama’s food stamps and entitlement pork. There was only one presidential candidate whose proposals would have placed this country back on a sustainable path. The plutocracy controlled corporate mainstream media did their part in ignoring and then scorning Ron Paul during his truth telling campaign. The plutocracy wants to retain their wealth and power, while the willfully ignorant masses don’t want to think. The words of Ron Paul sum up what will occur over the coming years as the interchangeable pieces of this corporate fascist farce drive the country to ruin:

“Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.” 

“A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.”

“Believe me, the next step is a currency crisis because there will be a rejection of the dollar, the rejection of the dollar is a big, big event, and then your personal liberties are going to be severely threatened.”

 

The politicians, bankers and corporate titans running this country are too corrupt and cowardly to reverse the course on our path to destruction. The debt will continue to accumulate until our Minsky Moment. At that point the U.S. dollar will be rejected and chaos will reign. The Great American Empire will be no more. At that time sides will need to be chosen and blood will begin to spill. Decades of bad decisions, corruption, cowardice, ignorance, greed and sloth will come to a head. The verdict of history will not be kind to the once great American Empire.

order non hybrid seeds

WAR PIGS – THE FALL OF A GLOBAL EMPIRE

“We will bankrupt ourselves in the vain search for absolute security.”  -Dwight D. Eisenhower

“How far can you go without destroying from within what you are trying to defend from without?” –Dwight D. Eisenhower

Generals gathered in their masses
Just like witches at black masses
Evil minds that plot destruction
Sorcerers of deaths construction

In the fields the bodies burning
As the war machine keeps turning
Death and hatred to mankind
Poisoning their brainwashed minds, oh lord yeah!
                             Black Sabbath – War Pigs

As Americans mindlessly celebrate another Memorial Day with cookouts, beer and burgers, the U.S. war machine keeps churning. As we brutally enforce our will on foreign countries, we create more people that hate us. They don’t hate us for our freedom. They hate us because we have invaded and occupied their countries. They hate us because we kill innocent people with predator drones. They hate us for our hypocrisy regarding democracy and freedom. Just when we had the opportunity to make a sensible decision by leaving Iraq and exiting the Middle East quagmire, Obama made the abysmal choice to casually sacrifice more troops in the Afghan shithole. We have thrown over $1.3 trillion down Middle East rat holes over the last 11 years with no discernible benefit to the citizens of the United States. George Bush and Barack Obama did this to prove  they were true statesmen. The Soviet Union killed over 1 million Afghans, while driving another 5 million out of the country and retreated as a bankrupted and defeated shell after ten years. Young Americans continue to die, for whom and for what? Our foreign policy during the last eleven years can be summed up in one military term, SNAFU – Situation Normal All Fucked Up. These endless foreign interventions under the guise of a War on Terror are a smoke screen for what is really going on in this country. When a government has unsolvable domestic problems, they try to distract the willfully ignorant masses by proactively creating foreign conflicts based upon false pretenses.  General Douglas MacArthur understood this danger to our liberty.

“I am concerned for the security of our great Nation; not so much because of any threat from without, but because of the insidious forces working from within.”

Economic Opportunity Cost

“You can’t say civilization don’t advance… in every war they kill you in a new way.”  – Will Rogers

Any doubt that the Military Industrial Complex is as strong as ever should be removed after examining Obama’s 2012 Budget which has $900 billion dedicated to our military machine. We spent $370 billion in 2001, $620 billion in 2006, and now this liberal anti-war Democrat from Illinois is spending 45% more than that war monger Bush who was burned in effigy by the anti-war Democrats during Iraq War protests. It seems both parties are war pigs.

The Soviet Union collapsed in 1989, leaving the United States as the only remaining superpower on earth. Since 1990, the United States has depleted the U.S. Treasury of $11.5 trillion for spending on War. With no military on earth capable of challenging us why would there be a need to spend this much on the military? Over this same time frame the U.S. spent $500 billion on science, space & technology and $70 billion on energy, a mere 6% of the spending on invading sovereign countries. Military expenditures benefit humanity in no way. If these trillions had been invested by the private sector or devoted to energy and scientific research, our economy might not be a hollowed out shell, dependent on China for financing and oil exporting countries for energy. Neo-Cons argue the Arms Industry employs millions and benefits the country. These companies employ brilliant engineers and scientists who spend their days developing weapons that kill people more efficiently. If they had been employed manufacturing high tech goods to export around the world, inventing new technologies that didn’t obliterate human beings, newer safer nuclear power plants, a more efficient electric grid, upgrading our deteriorating infrastructure, or finding a cure for Alzheimer’s, would the United States be better off today?

The National Debt in 1990 was $3.2 trillion. Today, it is $15.7 trillion. This is a 500% increase in twenty-two years. What benefit has $11.5 trillion of spending on War produced for the United States or the world? In 2001, spending on Defense was 17% of total governmental spending. In 2012, Defense, Homeland Security, and war spending account for 25% of government spending. In the meantime, major cities experience blackouts due to an overloaded electrical grid, our 156,000 structurally deficient bridges crumble, one hundred year old water pipes burst under our streets every day, and we transfer over $300 billion per year to foreign countries for our precious oil. The 19 terrorist hijackers who implemented their plan with box cutters, spent less than $500,000 to pull off their 9/11 acts of terror – not war. The United States will directly spend at least $3 trillion on our wars of choice in response, while turning our country into a prison camp and stripping our citizens of their freedoms and liberties for perceived security and safety.

You would think we must be trying to keep up with our enemies by spending $900 billion per year on past and present military adventures. But one look at the following chart reveals the United States is spending almost as much as the rest of the world combined. The two countries considered potential rivals, China and Russia, spent $200 billion combined in 2010. This is 22% of U.S. spending. From a foreign viewpoint, one must wonder why the U.S. is spending such vast sums on our military. They can only conclude that it is for offensive intentions rather than defensive. The United States soil has not been attacked by a foreign power since December 7, 1941. Prior to that surprise attack, a foreign power hadn’t attacked the U.S. since the War of 1812. With this stupendous level of wasteful spending, our leaders feel compelled to interfere in the business of sovereign states and dictate how they should govern their nations . When you have an enormous hammer, every country looks like a nail.

Laughably, the neo-con hawks and Fox News pundits declare that our military is a hollow shell and needs much greater funding to insure our safety from attack by our many enemies. Other countries, such as China and Russia, feel they have no choice but to increase their expenditures on the military. On a percentage basis, they have more than doubled their expenditures in the last ten years, and still are a drop in the ocean compared to  American Empire spending. The fact is that the U.S., China and Russia all have enough nuclear weapons to obliterate the world – mutually assured destruction. The United States could realistically protect itself from attack with only the 18 ballistic missile nuclear submarines we have in commission.

When did Americans lose their ability to distinguish between intellectual and moral pygmies like George Bush, Barack Obama and Mitt Romney versus statesmen like Dwight D. Eisenhower? The Bush Doctrine of pre-emptive war when our country was not threatened has proven to be financially and diplomatically disastrous and his blueprint is being followed by our Nobel Peace Prize President in his saber rattling with Iran. Following this policy puts them in fine company.

“Preventive war was an invention of Hitler. Frankly, I would not even listen to anyone seriously that came and talked about such a thing.” –Dwight D. Eisenhower

The U.S. borrowed $807 billion from China, Japan and oil exporting countries to wage a war in Iraq that was based on false pretenses. None of the terrorist hijackers on 9/11 were Iraqis, they had no links to Al Qaeda, and Iraq had no weapons of mass destruction. Historian Barbara Tuchman description of “war as the unfolding of miscalculations” was never so fitting. In 2002, Secretary of Defense Rumsfeld estimated the costs of the war in the range of $50 to $60 billion, a portion of which he believed would be financed by other countries. The United States invaded Iraq to secure the 115 billion barrels of oil reserves, pure and simple. We traded the blood of young Americans for oil because we chose to not develop a cohesive logical energy policy in the last 30 years. Americans, not in the military, sacrificed nothing in the last 11 years of war. We bought BMW SUVs, 6,000 square foot McMansions, flat screen HDTVs, iPads, iPhones and Rolexes while less than 1% of Americans fought and died, with the cost passed to future unborn generations. We are a country of chickenhawks, willing to sacrifice the few so the ruling class can comfortably relax on their decks sipping wine, believing Fox News propaganda about terrorists lurking behind every bush, and filling up their Mercedes convertibles for their excursions to the summer cottage in the Hamptons.

“Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.”  – Dwight D. Eisenhower

As we spend $900 billion per year on instruments of destruction, 49 million Americans live in poverty, with 46 million on food stamps. There are 3 to 4 million people homeless in any given year. Military Veterans, who make up 13% of the population, account for 23% of the homeless. This is another example of Federal government politicians using young Americans to fulfill their agenda and then tossing them away like pieces of garbage. With the country supposedly three years into an economic recovery, tent cities of homeless dot the landscape across the nation. We pour billions into killing technology while millions of American families are forced to live in tents or sleep in their cars.

As the world spends $1.7 trillion per year on new methods of killing, millions die the old fashioned way.

  • 13 million people per year die from starvation in the world.
  • The FAO says that 925 million people worldwide are undernourished.
  • For the price of one missile, a school full of hungry children could eat lunch every day for 5 years.
  • One child dies every 5 seconds as a result of hunger – 700 every hour – 16 000 each day – 6 million each year – 60% of all child deaths (2002-2008 estimates)

What kind of a civilized society allocates 44% of the taxes taken from its people to war? Only 2.5% of your taxes go to science, energy, and environment. Only 2.2% of your taxes go to education and jobs. You produce the results that you would expect from your investments. A full 13% of our population doesn’t have a high school diploma (20% of African Americans & 43% of Latinos) and only 30% have a college degree. How do we expect to lead the world in technology and research with these figures? We do lead the world in government issued student loan debt with $1 trillion and rising.

Human Cost

Politicians hide themselves away
They only started the war
Why should they go out to fight?
They leave that role to the poor

Time will tell on their power minds
Making war just for fun
Treating people just like pawns in chess
Wait till their judgment day comes, yeah!

                    Black Sabbath – War Pigs

George Bush, Dick Cheney, Donald Rumsfeld, and Barack Obama are cowardly politicians who never had the “pleasure” of coming under fire in battle. The brilliant anti-war novel Catch-22 describes these men perfectly.

“Some men are born mediocre, some men achieve mediocrity, and some men have mediocrity thrust upon them. With Major Major it had been all three.”

The world has been a huge game of Risk for these warmongers, with young Americans as the game pieces. Instead of conquering Kamchatka in a board game, these non-veterans sent 6,470 Americans to their deaths in Iraq and Afghanistan for a false cause. Their ideology of empire convinced them they could change the world into their image of how it should be, and their re-election campaigns were funded with millions from the purveyors of death – the arms industry.

“In modern war… you will die like a dog for no good reason.” – Ernest Hemingway

Another 47,545 Americans have been badly wounded in Iraq and Afghanistan.  Three of these despicable politicians have written their memoirs, raking in millions for telling lies and half-truths. The 6,470 dead Americans won’t have a chance to write their memoirs or get rich. They will never get a chance to see their kids’ graduate college or walk their daughter down the aisle at her wedding. Their children will grow up with a giant hole in their hearts. Their widows will never recover from their endless heartache.

Politician chickenhawks who send our young people to their deaths for oil and ideology will receive their reward on judgment day if there is a just God.

As National Guard troops have been deployed over and over again to Iraq and Afghanistan, they must realize that Catch-22 is alive and well in today’s military.

“There was only one catch and that was Catch-22, which specified that a concern for one’s own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn’t, but if he was sane he had to fly them. If he flew them he was crazy and didn’t have to; but if he didn’t want to he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle.”

 “That’s some catch, that catch-22,” he observed.

 “It’s the best there is,” Doc Daneeka agreed

American soldiers, who have completed their duty to country, have been lied to and had the rules of the game changed again and again. Their politician leaders have reneged on their promises by sending men and women back to the war zone or not letting them come home on the timeline that was agreed to. Meanwhile, their families have gone bankrupt, lost their houses, and saw their marriages dissolve. Politicians started these wars and are too cowardly and prideful to accept failure.

“The military don’t start wars. Politicians start wars.”  – General William Westmoreland

Over 1,300 more Americans died needlessly when Barack Obama, winner of the Nobel Peace Prize, chose to double down in Afghanistan to prove he was as tough as Bush and McCain. Another man who has never been under fire needed to prove his manliness to his opponents and his constituency. He should have studied the words of former Presidents who were under fire.

“I hate war as only a soldier who has lived it can, only as one who has seen its brutality, its futility, its stupidity.” – Dwight D. Eisenhower

“My first wish is to see this plague of mankind, war, banished from the earth.” – George Washington

President Obama follows the standard Presidential game plan and dutifully gives patriotic speeches at military bases proclaiming the bravery and sacrifice of our troops. These are the words of politicians. The brutal reality for troops is much different. Representative Ron Paul in November 2003 described the early mistreatment of our soldiers:

  • Fort Stewart, Georgia housed hundreds of injured reserve and National Guard soldiers in deplorable conditions who were forced to wait months just to see a doctor. These soldiers made huge sacrifices, leaving their families and jobs to fight in Iraq. They found themselves living in hot, crowded, unsanitary barracks and waiting far too long to see overworked doctors. This was hardly the heroes’ welcome they might have expected. Only an exposé in a major newspaper brought attention to their plight, prompting an embarrassed Defense department to rush additional doctors to the base.
  • Some wounded soldiers convalescing at Walter Reed hospital in Washington were forced to pay for hospital meals from their own pockets. Other soldiers returning stateside for a two-week liberty had to buy their own airfare home from the east coast. Still others paid for desert boots, night vision goggles, and other military necessities with personal funds.
  • Existing federal rules forced disabled veterans to give up their military retirement pay in order to receive VA disability benefits. This meant that every VA disability dollar paid to a veteran was deducted from his retirement pay, effectively creating a “disabled veterans tax.” No other group of federal employees is subject to this unfair standard; in every other case disability pay is viewed as distinct from standard retirement pay.

The Humvees that soldiers were forced to drive did not have enough protective armor. In December 2004, Secretary of Defense Rumsfeld was giving one of his usual inspirational speeches when Army Spc. Thomas Wilson of the 278th Regimental Combat Team, a unit that consisted mainly of reservists from the Tennessee Army National Guard asked him a question:

“Why do we soldiers have to dig through local landfills for pieces of scrap metal and compromised ballistic glass to up-armor our vehicles?”

This set off what the AP described as “a big cheer” from his comrades in arms. Rumsfeld paused, asked Wilson to repeat the question, then finally replied, “You go to war with the army you have.” Besides, he added, “You can have all the armor in the world on a tank and it can be blown up.” I’m glad Donald Rumsfeld has a clear conscience. History will not be kind to this despicable excuse for a human being.

Rumsfeld also sent Americans into battle without protective body armor. Only after bad publicity did the proper protection reach the troops. The blood of dead soldiers is on Rumsfeld’s hands. While President Bush sacrificed by not golfing, terribly wounded soldiers were sent to Walter Reed Hospital to recover. Instead they entered hell on earth. Outpatient mistreatment was reported in 2004, but nothing was done. In 2004 and 2005, articles appeared in the Washington Post and in Salon interviewing First Lt. Julian Goodrum about his court martial for seeking medical care elsewhere due to poor conditions at WRAMC. A Washington Post expose in 2007 finally revealed the horrible mistreatment of our brave wounded soldiers. These reporters uncovered the following conditions:

  • WRAMC’s Building 18 was described in the article as rat- and cockroach-infested, with stained carpets, cheap mattresses, and black mold, with no heat and water reported by some soldiers at the facility. The unmonitored entrance created security problems, including reports of drug dealers in front of the facility. Injured soldiers stated they are forced to “pull guard duty” to obtain a level of security.
  • The typical soldier was required to file 22 documents with eight different commands – most of them off-post – to enter and exit the medical processing world, according to government investigators. Sixteen different information systems were used to process the forms, but few of them could communicate with one another. This complicated system has required some soldiers to prove they were in the Iraq War or the War in Afghanistan in order to obtain medical treatment and benefits because Walter Reed employees were unable to locate their records.

There was a tremendous surge in suicides by soldiers who have been pushed beyond their limits as they increased by 80% between 2004 and 2008. There are almost as many deaths by suicide as deaths in combat:

  • Overall, the services reported 434 suicides by personnel on active duty, significantly more than the 381 suicides by active-duty personnel reported in 2009. The 2010 total is below the 462 deaths in combat, excluding accidents and illness. In 2009, active-duty suicides exceeded deaths in battle.
  • Soldiers returning from long tours in Iraq or Afghanistan suffering from combat stress were sometimes met with scorn from their superiors and something bordering on neglect from some medical officials. As their largely untreated problems deteriorated, their marriages unraveled under the strain. They turned to alcohol and drugs and in some cases saw no other way out than suicide.
  • Healthcare officials at various installations who are struggling to help say they’re overwhelmed by huge numbers of troops returning from two, three or even four deployments with acute mental problems from combat.
  • Statistics on Iraq and Afghanistan veterans, obtained in 2011 through a Freedom of Information Act request by a San Francisco newspaper, found that more than 2,200 soldiers died within two years of leaving the service, and about half had been undergoing treatment for post-traumatic stress or other combat-induced mental disorders at the time.
  • For five years, beginning in 2005, a service member died by suicide every 36 hours, according to the report by the Center for New American Security.

Nearly 20% of military service members who have returned from Iraq and Afghanistan — 300,000 in all — report symptoms of post-traumatic stress disorder or major depression, yet only slightly more than half have sought treatment, according to a RAND Corporation report. Many service members said they do not seek treatment for psychological illnesses because they fear it will harm their careers. But even among those who do seek help for PTSD or major depression, only about half receive treatment that researchers consider “minimally adequate” for their illnesses. Recent studies expect PTSD to affect 30% of all returning veterans.

For all the glory and accolades of dying for chickenhawks like Dick Cheney, enlisted soldiers make between $17,000 and $32,000 per year. The military evidently does not prepare them well for the outside world as their unemployment rate is 12.1% versus the national rate of 8.2%. The pandering Obama gives speeches and the criminal bankers at JP Morgan have their PR maggots create TV commercials about hiring veterans, but the numbers don’t lie. A country can be measured by how well it treats its veterans. Our leaders talk a good game, but their actions prove they don’t care about the human costs of war. They are busy planning their next move in their game of Risk.

Moral Cost

Now in darkness, world stops turning
As the war machine keeps burning
No more war pigs of the power

Hand of God has struck the hour
Day of Judgment, God is calling
On their knees, the war pigs crawling
Begging mercy for their sins
Satan, laughing, spreads his wings
All right now!

                  Black Sabbath – War Pigs

Omar Bradley, the last five star General in the U.S. military, was known as the “soldier’s general” during World War II. He was portrayed by Karl Malden in the movie Patton as a thoughtful man who cared about his troops. He was one of the key architects of the Normandy invasion and led the 12th Army Group consisting of 900,000 men until the end of the war. After the war, Bradley headed the Veterans Administration for two years. He is credited with doing much to improve its health care system and with helping veterans receive their educational benefits under the G.I. Bill of Rights. He ultimately rose to Chairman of the Joint Chiefs. Contrast the words of the fictional Colonel Kilgore from the movie Apocalypse Now, with the words of General Bradley:

Kilgore: I love the smell of napalm in the morning. You know, one time we had a hill bombed, for 12 hours. When it was all over, I walked up. We didn’t find one of ’em, not one stinkin’ dink body. The smell, you know that gasoline smell, the whole hill. Smelled like
[ sniffing, pondering ]
victory. Someday this war’s gonna end…
[ suddenly walks off ]

 

“The world has achieved brilliance without wisdom, power without conscience. Ours is a world of nuclear giants and ethical infants. We know more about war than we know about peace, more about killing than we know about living.” – Omar Bradley

We need giants like Omar Bradley and Dwight D. Eisenhower to lead our country through the difficult times ahead. These men knew the horrors of war and didn’t act like it was a game of chess. Instead we will be led by intellectual and ethical infants, Obama or Romney. There are no wise men with a conscience and high moral standards in power today. Only those with no conscience and a willingness to lie are able to gain power in today’s world. General Bradley understood that morality was ultimately more important than power and strength in determining the progress of a country. His words are those of someone who knew we had failed in our moral duty:

“We have grasped the mystery of the atom and rejected the Sermon on the Mount.”

Peacemakers are ridiculed and shunned in America today. Those who preach diplomacy and non-interventionism, like Ron Paul, are scorned and ignored. Old men who care more about their own power than the human race are willing to sacrifice the blood of young people for precious oil, phony nationalism, their own strategic interests or corporate interests disguised as philosophical agendas. The world is a game for these old men. They care about their personal legacy and rigid ideologies. War and militarism are a failure of passion over reason. Albert Einstein, whose discovery brought about this age of potential world destruction, had no love for these blind warriors.

“He who joyfully marches to music in rank and file has already earned my contempt. He has been given a large brain by mistake, since for him the spinal cord would suffice.”

The overwhelming cost of maintaining a global empire eventually bankrupted Rome and Great Britain. Treasures were wasted, young men were needlessly sacrificed in the name of the flag, and the morality of leaders sank to unprecedented levels. The U.S. had advanced financially and technologically for more than a century, but since the takeover of our economic system by private banking and corporate interests in 1913 we have seen continuous war, continuous currency debasement, and continuous moral decay. How far will we decline before a sufficient number of Americans are outraged enough to lead a new American Revolution?

Our current situation reminds me of the movie Planet of the Apes. The apes are divided into a strict class system: the gorillas as police, military, and hunters; the orangutans as administrators, politicians and lawyers; and the chimpanzees as intellectuals and scientists. Humans, who cannot talk, are considered feral vermin and are hunted and used for scientific experimentation. The United States is now in the control of gorillas and orangutans. If we continue down the current path of financial and moral decay, allowing the Military Industrial Complex, criminal bankers and corrupt politicians to push us into further world conflicts, we will experience the shock and horror that George Taylor, played by Charlton Heston, displayed in the final scene of Planet of the Apes .

George Taylor: Oh my God. I’m back. I’m home. All the time, it was… We finally really did it.

 [ screaming ]

 You Maniacs! You blew it up! Ah, damn you! God damn you all to hell!

The War Pigs must be stopped before it’s too late. The Military Industrial Complex, with the unwavering support of central bankers printing unlimited amounts of fiat currency, while controlling the scoundrel puppets in Washington DC, will destroy this country in their never ending quest for power and profits. One man fights a lonely battle against these forces of oppression. We must join his legion and take this country back from the war pigs.

“As many frustrated Americans who have joined the Tea Party realize, we cannot stand against big government at home while supporting it abroad. We cannot talk about fiscal responsibility while spending trillions on occupying and bullying the rest of the world. We cannot talk about the budget deficit and spiraling domestic spending without looking at the costs of maintaining an American empire of more than 700 military bases in more than 120 foreign countries. We cannot pat ourselves on the back for cutting a few thousand dollars from a nature preserve or an inner-city swimming pool at home while turning a blind eye to a Pentagon budget that nearly equals those of the rest of the world combined.” – Ron Paul

 



 

THOSE “SOFT” MILLENIALS

The Millenial Generation is between the ages of 7 years old and 30 years old today. There are approximately 87 million of them and 60 million of them are still under 21 years old. I find it hysterical that old codgers that have been responsible for leaving this country in such a shambles have the balls to scorn and ridicule this generation before they have even started their adult lives. Actually I find it disgusting and revolting. But I expect nothing less from the Shallowest, Greediest Generation. I’m sure I’ll get the usual response about Millenials being soft, playing X-box, and not amounting to a hill of beans.

Well, it seems there are about 30 million Millenials between the ages of 18 and 30. That happens to be the prime cannon fodder age. Here is what the “soft” millenials have done over the last ten years or so:

  • 6431 American soldiers have died in Iraq and Afghanistan.
  • Approximately 4,000 of these soldiers were Millenials.
  • 47,545 American soldiers have been badly wounded in Iraq and Afghanistan.
  • Approximately 30,000 of these soldiers are Millenials.

It seems that these soft Millenials are doing the majority of fighting and dying for this country. Not too many Boomers in the casualty counts. But, they do seem to have created the brilliant strategy that has resulted in the Millenial casualties.

 Below are pictures of some of our fallen heroes. It is just one page of soldiers that have died for you. I suggest you visit this website:

http://apps.washingtonpost.com/national/fallen/

You can go through the 96 pages of pictures. And the next time you think about ridiculing, scorning or bad mouthing the Millenial generation, remember that more than 60% of these heroes are from that generation. Have a nice day.

 

Jorge Velasquez Alejo Thompson Chase Marta Jacob Schwallie Dustin Gross Thomas Fogarty John Huling Gregory Childs Zachary Hargrove Junot Cochilus David Rylander Bruce Clark Nicholas Dickhut Christian Sannicolas Scott Pruitt Dick Lee Jr. Christopher Mosko Brandon Eggleston Jason Edens Andrew Brittonmihalo Benjamin Neal Moises Gonzalez Manuel Vasquez Jonathan Walsh Michael Metcalf Joseph Frankhauser Dean Shaffer Nicholas Johnson Don Viray Michael Braden Aaron Faust David Nowaczyk Tanner Higgins Ramon Kaipat Philip Schiller Ramon Kaipat Trevor Stanley Antonio Burnside Alex Martinez Shawn Hannon Jeffrey Rieck Nicholas Rozanski Christopher Bordoni Christopher Brown Tyler Smith Jeffrey White, Jr. James Dutton Roberto Cazarez Michael Palacio David Taylor Johnathon Davis Francis Imlay Joseph D?Augustine William Wilson III Aaron Istre Daniel Brown Dennis Weichel Jr. Jamie Jarboe Clovis Ray Daquane Rivers Jesse Grindey Edward Acosta Payton Jones Jordan Bear Conner Lowry Robert Marchanti II John Loftis Joshua Born Timothy Conrad Jr. Allen McKenna Jr. Ryan Hall Nicholas Whitlock Julian Scholten Justin Wilkens Paris Pough Jerry Reed II Cesar Cortez Osbrany Motes De Oca Billy Sutton Terence Hildner Edward Dycus William Stacey David Johnson Joshua Pairsh Christopher Singer Daniel Bartle Travis Riddick Jesse Stites Kevin Reinhard Nathan McHone Joseph Logan Keith Benson Phillip McGeath Kenneth Cochran

2012 – THE YEAR OF LIVING DANGEROUSLY

“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability –  problem areas where America will have neglected, denied, or delayed needed action.” – Strauss & Howe – The Fourth Turning – 1997

 

In December 2010 I wrote an article called Will 2012 Be as Critical as 1860?, that pondered what might happen with the 2012 presidential election and the possible scenarios that might play out based on that election. Well, 2012 has arrived and every blogger and mainstream media pundit is making their predictions for 2012. The benefit of delaying my predictions until the first week of 2012 is that I’ve been able to read the wise ponderings of Mike Shedlock, Jesse, Karl Denninger, and some other brilliant truth seeking analysts regarding what might happen during 2012. The passage above from Strauss & Howe was written fifteen years ago and captured the essence of what has happened since 2007 and what will drive all the events over the next decade. Predicting specific events is a futile human endeavor. The world is so complex and individual human beings so impulsive and driven by emotion, that the possible number of particular outcomes is almost infinite.

But, as Strauss and Howe point out, the core elements that created this Crisis and the reaction of generational cohorts to the implications of debt, civic decay and global disorder will drive all the events that will occur in 2012 and for as far as the eye can see. Linear thinkers in mega-corporations, mainstream media and Washington D.C. focus on retaining the status quo, their power and their wealth. They believe an economic recovery can be manufactured through monetary manipulation and Keynesian borrowing and spending. They are blind to the fact that history is cyclical, not linear. In order to have an understanding of what could happen in the coming year, it is essential to keep the big picture in focus. As we enter the fifth year of this twenty year Crisis period, there is absolutely no chance that 2012 will see an improvement in our economy, political atmosphere or world situation. Fourth Turnings never de-intensify. They exhaust themselves after years of chaos, conflict and turmoil. I can guarantee you that 2012 will see increased mayhem, riots, violent protests, recessions, bear markets, and a presidential election that will confound the establishment. All the episodes which will occur in 2012 will have at their core one of the three elements described by Strauss & Howe in 1997: Debt, Civic Decay, or Global Disorder.

Debt – On the Road to Serfdom

The world is awash in debt. Everyone is focused on the PIIGS with their debt to GDP ratios exceeding the Rogoff & Reinhart’s 90% point of no return. But, the supposedly fiscally responsible countries like Germany, France, U.K., and the U.S. have already breached the 90% level. Japan is off the charts, with debt exceeding 200% of GDP. These figures are just for the official government debt. If countries were required to report their debt like a corporation, their unfunded entitlement promises to future generations are four to six times more than their official government debt.

Any critical thinking person can look at the chart above and realize that creating more debt out of thin air to solve a debt problem is foolish, dangerous, and self serving to only bankers and politicians. The debt crisis took decades of terrible choices and bogus promises to produce. The world is now in the midst of a debt driven catastrophe. At best, the excessive levels of sovereign debt will slow economic growth to zero or below in 2012. At worst, interest rates will soar as counties attempt to rollover their debt and rolling defaults across Europe will plunge the continent into a depression. The largest banks in Europe are leveraged 40 to 1, therefore a 3% reduction in their capital will cause bankruptcy. Once you pass 90% debt to GDP, your fate is sealed.

“Those who remain unconvinced that rising debt levels pose a risk to growth should ask themselves why, historically, levels of debt of more than 90 percent of GDP are relatively rare and those exceeding 120 percent are extremely rare. Is it because generations of politicians failed to realize that they could have kept spending without risk? Or, more likely, is it because at some point, even advanced economies hit a ceiling where the pressure of rising borrowing costs forces policy makers to increase tax rates and cut government spending, sometimes precipitously, and sometimes in conjunction with inflation and financial repression (which is also a tax)?” – Rogoff & Reinhart

The ECB doubling their balance sheet and funneling trillions to European banks will not solve anything. The truth that no one wants to acknowledge is the standard of living for every person in Europe, the United States and Japan will decline. The choice is whether the decline happens rapidly by accepting debt default and restructuring or methodically through central bank created inflation that devours the wealth of the middle class. Debt default would result in rich bankers losing vast sums of wealth and politicians accepting the consequences of their phony promises. Bankers and politicians will choose inflation. They believe they can control the levers of inflation, but they have proven to be incompetent, hubristic, and myopic. The European Union will not survive 2012 in its current form. Countries are already preparing for the dissolution. Politicians and bankers will lie and print until the day they pull the plug on the doomed Euro experiment.

The false storyline of debt being paid down in the United States continues to be propagated by the mainstream press and decried by Paul Krugman. The age of austerity storyline gets full play on a daily basis. Total credit market debt in 2000 was $27 trillion. It skyrocket to $42 trillion by 2005 as George Bush and Alan Greenspan encouraged delusional Americans to defeat terrorism by leasing SUVs and live the American dream by putting zero down on a $600,000 McMansion, financing it with a negative amortization no doc loan. Paul Krugman got his wish as a housing bubble replaced the dotcom bubble. Debt accumulation went into hyper-speed in 2006 and 2007 as Wall Street sharks conducted a fraudulent feeding frenzy by peddling their derivatives of mass destruction around the globe. By the end of 2007, total credit market debt reached $51 trillion.

In a world inhabited by sincere sane leaders, willing to level with the citizens and disposed to allow financial institutions that took world crushing risks to fail through an orderly bankruptcy process, debt would have been written off and a sharp short contraction would have occurred. The stockholders, bondholders and executives of the Wall Street banks would have taken the losses they deserved. Instead Wall Street used their undue influence, wealth and power to force their politician puppets to funnel $5 trillion to the bankers that created the crisis while dumping the debt on taxpayers and unborn generations. The Wall Street controlled Federal Reserve provided risk free funding and took toxic mortgage assets off their balance sheets. The result is total credit market debt higher today than it was at the peak of the financial crisis in March 2009.

 

Our leaders have done the exact opposite of what needed to be done to address this debt crisis. The country is adding $3.7 billion per day to the National Debt. With the debt at $15.2 trillion, we have now surpassed the 100% to GDP mark. The National Debt will be $16.5 trillion when the next president takes office in January 2013. Ben Bernanke has been able to keep short term interest rates near zero and the non-existent U.S. economic growth and European disaster has resulted in keeping long-term rates near record lows. Despite these historic low rates, interest on the National Debt totaled $454 billion in 2011, an all-time high. The effective interest rate was approximately 3%. If rates stay at current levels, interest will be between $400 and $500 billion in 2012. Each 1% increase in rates would cost American taxpayers an additional $150 billion. A rapid increase in rates to the 7% level would ratchet interest expense above $1 trillion and destroy the last remaining vestiges of Bernanke’s credibility. It can’t possibly happen in 2012. Right? The world has total confidence in pieces of paper being produced at a rate of $3.7 billion per day. Confidence in Ben Bernanke, Barack Obama and the U.S. Congress is all that stands between continued stability and complete chaos. What could go wrong?

Debt related issues that will likely rear their head in 2012 are as follows:

  • A debt saturated society cannot grow. As debt servicing grows by the day, the economy losses steam. The excessive and increasing debt levels will lead to a renewed recession in 2012 as clearly detailed by ECRI, John Hussman and Hoisington Investment Management.

“Here’s what ECRI’s recession call really says: if you think this is a bad economy, you haven’t seen anything yet. And that has profound implications for both Main Street and Wall Street.” – ECRI 

At present, we observe agreement across a broad ensemble of models, even restricting data to indicators available since 1950 (broader data since 1970 imply virtual certainty of recession). The uniformity of recessionary evidence we observe today has never been seen except during or just prior to other historical recessions.-  John Hussman 

Negative economic growth will probably be registered in the U.S. during the fourth quarter of 2011, and in subsequent quarters in 2012. Though partially caused by monetary and fiscal actions and excessive indebtedness, this contraction has been further aggravated by three current cyclical developments: a) declining productivity, b) elevated inventory investment, and c) contracting real wage income. In summary, the case for an impending recession rests not only on cyclical precursors evident in productivity, real wages, and inventory investment, but also on the disfunctionality of monetary and fiscal policy. – Van Hoisington 

  • The onrushing recession will send housing down for the count. With 2.2 million homes already in the foreclosure process and another 13 million homes with negative or near negative equity, the recession will push more people over the edge. As foreclosures rise a self reinforcing loop will develop. Home prices will fall as banks dump houses at lower prices, pushing millions more into a negative equity position. Home prices will fall another 5% to 10% in 2012, with a couple years to go before bottoming.
  • The recession will result in companies laying off more workers. It won’t be as dramatic as 2008-2009 because companies have already shed 6 million jobs. The working age population will increase by 1.7 million, the number of people employed will go up by 1 million, but the official unemployment rate will drop to 7% as the BLS reveals that 10 million people decided to relax and leave the workforce. Surely I jest. The government manipulated unemployment rate will rise above 9%, while the real rate will surpass 25%.
  • The American people rationally increased their savings rate to 6.2% in the 2nd Quarter of 2009. When you are over-indebted and the country heads into recession, spending less and saving more is a sane option. Consumer expenditures accounted for 69% of GDP in 2007, prior to the economic collapse. The “recovery” of 2010-2011 has been driven by Ben’s zero interest rate policy, the resumption of easy credit peddling by the Wall Street banks, and consumers convinced that going further into hock to attain the American dream is rational. Consumer spending as a percentage of GDP has actually risen to 71% and the savings rate has plunged to 3.6%. The 20% drop in gas prices since April bottomed in December. This decline temporarily boosted consumer spending, but prices are on the rise again. With the State and local governments reducing spending, do the Wall Street Ivy League economists really believe consumers will increase their consumption to 73% of GDP and reduce their savings rate to 1%? If you open your local newspaper you will see the master plan. Car dealers are offering 0% financing with nothing down for 60 months. The GMAC/Ditech/Ally Bank zombie lives as subprime auto loans are back. The “strong” auto sales are a debt financed illusion. Ashley Furniture is offering 0% financing for 50 months with no payments through Wells Fargo Bank. When the Federal Reserve provides the Wall Street banks with 0% funding, banks are willing to take big risks knowing that Uncle Ben and the naive American taxpayer will be there to bail them out when it blows up again.

 

  • With recession a certainty as fiscal stimulus wears off, home prices fall, employment stagnates, and consumer spending grinds to a halt, what will happen to the stock market? The Wall Street shills paraded on CNBC and interviewed by the multi-millionaire talking head twits assure you that stocks are undervalued and the market will surely be up 10% to 15% by 2013. It’s a mortal lock, just as it has been for the last twelve years, with the S&P 500 at the same level as January 1999. The fact is the stock market drops 30% on average during a recession. The talking heads declare that corporate profits are at record levels and will continue higher. Not bloody likely. Corporate profit margins are at an all-time peak about 50% above their historical norms. Profits always revert to their mean. These profits are not sustainable as they were generated by firing millions of workers, zero interest rates for banks, fraudulent accounting by the banks, and trillions in handouts from the middle class taxpayers to corporate America.

 

In a true free market excess profits will draw more competitors and profits will fall due to competition. When corporate profits exceed the mean by such a large amount, you can conclude that crony capitalism has replaced the free market. Government bureaucrats have been picking the winners (Wall Street, War Industry, Big Media, Big Healthcare) and the American people are the losers. Corporate oligarchs prefer no competition so they can reap obscene risk free profits and reward themselves with king-like compensation. Mean reversion will eventually be a bitch. Real S&P earnings have reached the 2007 historic peak. To believe they will soar higher as we enter a recession takes the same kind of faith shown by Americans buying a $600,000 McMansion in Stockton with no money down in 2005. The result will be the same. Do you ever wonder how corporations are doing so well while the average American sinks further into debt, despair and poverty?

The brilliant John Hussman captures the gist of an investor’s dilemma in his latest article:

“With 10-year Treasury yields below 2%, 30-year yields below 3%, corporate bond yields below 4%, and S&P 500 projected 10-year total returns below 5%, we presently have one of the worst menus of prospective return that long-term investors have ever faced. The outcome of this situation will not be surprisingly pleasant for any sustained period of time, but promises to be difficult, volatile, and unrewarding. The proper response is to accept risk in proportion to the compensation available for taking that risk. Presently, that compensation is very thin. This will change, and much better opportunities to accept risk will emerge. The key is for investors to avoid the allure of excessive short-term speculation in a market that promises – bends to its knees, stares straight into investors’ eyes, and promises – to treat them terribly over the long-term.”

Ben Bernanke, Wall Street shysters and Barack Obama want you to be drawn in by the allure of short-term gains based on hopes of QE3. The stock market will be volatile in 2012 with stocks falling 20% when it becomes evident the country is going back into recession. Ben will try to ride to the rescue with QE3 as he buys up more toxic mortgage debt. Wall Street will do their usual touchdown dance celebration, but the bloom will fall off this rose fast, as quantitative easing has proven to be a failure in stimulating economic growth.Gridlock in Washington D.C., chaotic national conventions, and the implosion of Europe will contribute to the market finishing down by at least 15% for the year.

  • Even though the U.S. economy has been stagnant for the past year and Europe is back in recession, oil is trading at $102 a barrel (Brent – $113 a barrel). This is a classic Catch-22 for Bernanke and his central banker buddies. The higher the price goes, the more recessionary economies become as energy and food costs rise. This would normally decrease demand and lower prices, but the massive money printing by the Fed and ECB artificially inflates the price of oil. The Canadian oil sands are only viable at $90 a barrel. Saudi Arabia needs $90 oil to balance their budgets. The onset of peak cheap oil, lack of Libyan supply, possible war with Iran, and increased demand from the developing world (China, India) will put a floor of $80 to $90 a barrel under oil. A shooting war with Iran would result in $150 a barrel of oil overnight. The trend in gasoline prices over the last three years is not your friend:

January 2009           $1.65

January 2010           $2.57

January 2011           $3.04

January 2012           $3.29

Gas prices are rising during the lowest usage time of the year. The average price of oil will exceed $100 during 2012 resulting in the highest average gas price in history for American drivers. These high prices, along with various weather related issues will keep food prices elevated, with 5% or higher increases likely. This should spur a few more peasant revolutions around the globe.

  • The question of whether gold can keep its streak of 11 consecutive positive return years in a row intact is an easy one. Will Obama and Congress spend $1.3 trillion more than they bring in during 2012? Will Ben Bernanke and other central bankers around the globe keep printing pieces of paper and calling it currency? If the answer to these two questions is yes, then gold will finish the year higher. As always, it will be volatile and manipulated by the powers that be. A drop below $1,500 in the beginning of the year is possible, but when Ben announces QE3, it will be off to the races. I expect gold to reach $1,900 by year end. Silver will be more volatile, but will likely reach $40 by year end.

Civic Decay – Occupying, Plundering, Capturing

Civic decay revealed itself dramatically in 2011 as millions of young people across the country occupied parks and town squares in a fruitless effort to correctly point out how the ruthless oligarchs inhabiting Wall Street bank executive suites, Mega-corporation boardrooms, the Marriner S. Eccles Federal Reserve Board Building, and the hallways of Congress had pillaged the wealth of the middle class through inflation, taxation, fraud and outright thievery. The majority of over-medicated, lethargic, uninterested, ignorant Americans yawned at this selfless display of courage and civil disobedience as they chose to occupy lines for hours to get the latest iPad or $3 waffle-maker at Wal-Mart. Delusional, non-thinking dolts across the land watched on their 60 inch HDTVs as young protestors got clubbed, beaten, tear gassed, tasered, maced, and brutalized by paid mercenaries for the ruling oligarchy. They treated the horrific scenes of brutality as if it was just one of their 30 favorite reality TV shows like I Didn’t Know I Was Pregnant or Toddlers & Tiaras. They thought this was a new show called Mace A Millenial.

Despite controlling the media, the money and the levers of power in Washington D.C., those in power cannot spin the reality of a middle class being systematically wiped out by the policies put in place by the corporate fascist oligarchs running this country. As Wall Street profits and bonuses flow like honey, the lines at food banks look like the lines at Best Buy on Black Friday and homeless shelters overflow with former members of the middle class. The ministry of propaganda (BLS, BEA) reports improving economic conditions while the number of Americans in the food stamp program has jumped from 38 million when the recession officially ended in late 2009 to 46.3 million today. Having 15% of the population surviving on food stamps is surely a sign of economic recovery.

 

The mainstream media methodically spews misinformation and happy talk about increased consumer spending and retail sales above expectations as if Americans borrowing to buy another laptop, TV, Kindle, or Rolex proves we have a real recovery. Meanwhile, old line mall based retailers like Sears and J.C. Penney die a slow agonizing death as they stagger into the sunset like Montgomery Ward, Circuit City and thousands before them. There is a disconnect in society as high end retailers like Saks, Tiffany, and Neiman Marcus report record sales as the 1% feel confident and flush with cash. Meanwhile, real median income is lower than it was in 2001. It seems tax cuts didn’t lift all boats, just the yachts. The average Joe pays twice as much for a gallon of gas and 50% more for food since 2001 while taking home less pay. The ruling elite can’t figure out why the peasants are getting restless.

 

The wealthy elite have been out in force over the last few months broadcasting their storyline about 50% of Americans not paying taxes. They and their media mouthpieces pound this message home unceasingly. They portray themselves as job creators, when the facts prove they have destroyed jobs here in America. They successfully painted the Occupy Movement as a bunch of lazy good for nothing socialists who needed to get a job. Then they unleashed the full fury of their brute strength upon these citizens practicing their right to assembly and free speech by crushing them with their hired police thugs, while the ignorant by choice public looked away. Controlling the message is essential for the oligarchs to retain their wealth, power and control. Aldous Huxley’s understanding of the American people is as true today as it was eighty years ago:

 “Most ignorance is vincible ignorance. We don’t know because we don’t want to know.”

It is time to not choose ignorance. The storyline peddled to the masses is false. The ruling oligarchy will do everything in their power to obscure and manipulate the truth. It is true that 50% of American workers pay no Federal income tax. It is also true that 50% of American workers make less than $25,000 per year. If these workers are employed in Philadelphia they pay 4% city income tax, 3% state income tax, 7.65% Social Security and Medicare tax, 6% sales tax on everything they buy, 15% state and federal taxes on gasoline, and they pay city and county property taxes whether they own or rent. They also pay the various sewer, trash, and myriad of other fees inflicted on them by government drones. Maybe someone should inform multi-billionaire hedge fund guru Steve Schwarzman that lower income families actually have most of their skin in the game. They can’t hire hoards of high powered lawyers and tax accountants to minimize their tax burden while contributing millions to politicians who write the laws to protect the oligarchs. I wonder why hedge fund managers don’t pay taxes on their profits.

Asked if he were willing to pay more taxes in a Nov. 30 interview with Bloomberg Television, Blackstone Group LP CEO Stephen Schwarzman spoke about lower-income U.S. families who pay no income tax. “You have to have skin in the game,” said Schwarzman, 64. “I’m not saying how much people should do. But we should all be part of the system.”

We are all part of the system, and the system is rigged. The middle class is systematically being obliterated as high paying jobs were shipped to low paying countries by mega-corporations. Their huge cost advantages have driven small domestic “job creating” firms out of business. The middle class has the majority of their wealth tied up in their homes, and they continue to see that wealth decline on a daily basis. The culprits in the housing collapse – the major Wall Street banks – have seen their profits skyrocket as they held the middle class hostage to a multi-trillion dollar banker bailout. Americans don’t hate the wealthy. Wealthy men like Steve Jobs and Bill Gates have been admired and emulated by Americans because they exhibited the true admirable traits of entrepreneurship, creativity, hard work, taking chances, and creating a better society. Wall Street shysters create nothing. They exhibit the worst traits of greed, avarice, and non-existent empathy for their fellow man.

 Gains and Losses in 2007-2009, Average CEO Pay vs. Average Worker Pay

Matt Taibbi summed up how the system is rigged rather succinctly in a recent article:

“And in the bigger picture, of course, you need the state and the private sector both to be functioning well enough to provide you with regular work, and a safe place to raise your children, and clean water and clean air. The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government.

But citizens of the stateless archipelago where people like Schwarzman live spend millions a year lobbying and donating to political campaigns so that they can jump the line. They don’t need to make sure the government is fulfilling its customer-service obligations, because they buy special access to the government, and get the special service and the metaphorical comped bottle of VIP-room Cristal afforded to select customers.”

The wealth inequality in this country did not occur because half the population is lazy and stupid. It didn’t happen because the 1% is intellectually superior, more highly motivated, or more entrepreneurial than the 99%. If any of these statements were true, the inequality would be consistent across decades and centuries. But, as the chart below details, the phenomenon has happened since 1979. Interestingly, it also occurred just prior to the 1929 stock market crash and Great Depression.  

  

The chart reflects the results of three decades of crony capitalism based upon phony tax canards; delusions of a debt based American dream peddled by bankers, politicians and the media; and complete capture of our economic and political system by a self selected wealthy few. Jesse captures the essence of how it happened in a recent article:

“Anyone who has seriously studied applied macroeconomics knows that crony capitalists hate free markets, with all the fairness and transparency that they imply. Competition is a serious drag on enormous profits and introduces significant uncertainty and risk. As soon as the game is underway, successful capitalists are constantly pushing the envelope of the rules, seeking to establish rents, monopolies, unfair advantages, and debt traps to snare the bulk of the players and stifle the profit-eroding tendency of real competition.

This is the basis of all aristocracies, which are merely the institutionalization of privilege.  Once they make it they bloody well want to change the rules to hang on to it, and take the risk out of their equation. They foster a culture of two sets of books, two sets of rules, and two systems of justice. They are given over in their personal and professional lives to the benefits of hypocrisy and cheating, with little conscience to restrain them. There is a predatory class that is nationless, without allegiance to anything, any principle, but their own greed and lust for power.”

What has happened over the last three decades is not particular to the United States. It is a flaw in all humanity. The majority of humans are inherently honest and if raised by good parents will do the right thing most of the time. When society allows psychopaths and evil men to attain high status in government and business through chosen ignorance, lack of vigilance, casting aside the rule of law, or admiration for wealth attained by any means, then wealth disparity reaches extreme levels. The fatal defect of the Wall Street psychopaths is their hubris. Too much is never enough. They are like sharks, always needing more to satiate their hunger. They will eventually go too far and collapse their crony capitalist system resulting in revolution and ultimately their demise. We are very close to the tipping point and 2012 is likely to reveal deep cracks in the foundation of our warped dysfunctional corporate fascist economic system. These are a few things I expect to happen in 2012:

  • The Occupy Movement will become more extreme with more disruptions of the economic system with less warning so the authorities don’t have time to prepare. I expect more cyber hacking into Wall Street, government, and media computer networks, causing disarray and uncertainty regarding financial information. I expect the Democratic and Republican presidential conventions to be overrun by protestors. The authorities will respond with excessive force, resulting in further violent protests in other cities.
  • Two simultaneous trends will eventually result in a domestic conflict. The Federal government grows ever more panicked by the knowledge that its ponzi scheme economy is going to collapse. This is why passage of the NDAA and the future passage of SOPA are so important to them. Imprisonment of citizens without charge and shutting down the only remaining means of truth – the Internet – are essential to retaining their power and control over the masses. At the same time, gun sales are at record levels. Critical thinking Americans can see the writing on the wall and no longer trust corrupt politicians of either party. Arming yourself and buying physical gold and silver is a prudent act in today’s world. If the financial system implodes in 2012 and an MF Global like stealing of customer funds from IRAs, 401ks, and bank accounts happens, all hell could break loose.
  • The ruling elite hand selected puppets for the 2012 presidential election are Obama and Romney. They are virtually interchangeable and both are acceptable to the Wall Street oligarchs. The monkey wrench in the gears is Ron Paul. His message of freedom, liberty, non-interventionism, living within our means, self reliance, and a sound currency are poison to the establishment. His message appeals to young people and a growing number of realists who understand we are already bankrupt. He will run as a 3rd Party candidate and focus a light on the crony capitalism that passes for free markets in America today. He will be vilified by both parties and their media mouthpieces, but if he gains traction I fear an unfortunate accident will befall him. Either way, he will have a dramatic impact on the debate and the outcome of the 2012 election.

The question for 2012 is whether the gaping multitude will come to their senses and respond accordingly against the ruling oligarchy.

“Modern fanaticism thrives in proportion to the quantity of contradictions and nonsense it pours down the throats of the gaping multitude, and the jargon and mysticism it offers to their wonder and credulity.” – William Hazlitt

Global Disorder – War, Oil, Religion

“We do not have to visit a madhouse to find disordered minds; our planet is the mental institution of the universe.” – Johann Wolfgang von Goethe

Disorder is an understatement when describing what is happening on the global scene. It seems like the inmates are running the insane asylum. The beauty of globalization, sold to Americans by the corporate oligarchs, is being revealed for all to see. Besides seeing millions of jobs shipped overseas by mega-corporation executives and our industrial base gutted beyond repair, the other “benefits” are aplenty. The interconnectedness of the global economy insures that a recession in Europe and the U.S. will spread across the world. The producing countries will fall when the consuming countries run out of fiat currency to spur consumption. Federal Reserve created inflation in the United States instantaneously spreads around the world creating revolutions across the Middle East and social unrest in China as food and energy prices surge to levels of pain which cause the poor to revolt against the ruling establishment. People lose it when they have nothing to lose.

But, the biggest gift of globalization has been provided by whom else – the Wall Street banks and the large European banks. The European banks did their part by loaning hundreds of billions to PIIGS that could never pay them back. Next, they leveraged their balance sheets 40 to 1, insuring that a 3% loss on their capital wipes them out. When their losses clearly exceeded 40%, the bankers employed their politician puppets running the insolvent countries across the continent to dump the losses on the taxpayers through austerity measures that insure a deep European recession. Since derivatives of mass destruction link the insolvent Wall Street banks to the insolvent European banks, the Federal Reserve has now stepped into the breach with American taxpayer money by providing swap lines to European banks. The oligarchs are perfectly willing to destroy the lives of hundreds of millions of citizens across the globe to insure their wealth and power remains intact.

The other crucial component of global disorder is oil. The storyline currently being peddled to the masses is the return of energy independence for America. The political class and their lapdog media pundits blatantly lie to the American public with stories of 100 years of oil supply under our soil. GOP candidates declare we can be energy independent in two years if we just drill, drill, drill. Meanwhile, in the real world 33 billion barrels of oil are consumed every year, with the U.S. consuming 7 billion barrels per year, of which 3.3 billion barrels are imported. Total U.S. oil production continues its 40 year decline, despite the shale oil boom in the Dakotas and the massive fracking hype touted by the gas industry. If Americans used some critical thinking skills they would conclude that our oil dependent society is balanced on the head of a pin. The chart below paints a picture of current and future global disorder.

One look at this chart and you begin to understand the War on Terror cover story. The average person in these Muslim oil rich countries wants a chance for a better life, food, clothing, and hope for their children’s future. They are not the evil, freedom hating, religious fanatic terrorists portrayed by the neo-cons and war mongers like Santorum, Gingrich and Romney. American troops are stationed in or around the countries with the most oil. Any dictator that fails to play along with the U.S. and its oil demands isn’t around for long. Hussein and Gaddafi learned the hard way. It’s just a matter of time for Ahmadinejad. Expect the rhetoric about the dangerous Chavez to escalate in the near future. Controlling 300 billion barrels of oil will be essential to keeping our suburban sprawl society functioning. Soccer moms will become irate when they can’t fill up their GMC Yukon with 39 gallons of precious fuel. Our own military clearly documented why the War on Terror will never end in their 2010 Joint Operating Environment report:

 A severe energy crunch is inevitable without a massive expansion of production and refining capacity. While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India. One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest. By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.

The likeliest global events which will make 2012 a year to remember include:

  • The disintegration of the European Union with outright default by Greece and the exit from the Union by Italy, Spain, and Portugal. A default and currency devaluation would bankrupt banks across Europe and would guarantee a worldwide recession and possibly depression.
  • It seems more likely by the day that someone will do something stupid in or around Iran and the Persian Gulf will explode into a virtual hell on earth. The unintended consequences of such a development will far outweigh the intended consequences.
  • The revolutions, protests, and brewing civil wars in Egypt, Syria, Libya and Iraq will flare up even if Iran doesn’t explode into a shooting war. The tensions in the Middle East will keep oil prices above $100, despite a world plunging into recession.
  • China’s hard landing will arrive in 2012. Keynesianism on steroids has failed as they’ve built more than enough vacant malls, vacant cities, vacant condo towers, and bridges to nowhere. Property prices will plunge, exports will decline, and peasants will revolt as food and energy prices push them over the edge. Chinese leaders will look for a foreign bogeyman so they can rally their 1 billion peasants around the flag. With 11% of their oil supply coming from Iran, it could get very interesting.

Just as no one saw the most significant events of 2011 (Arab Spring, Mubarak & Gaddafi overthrown, Japanese earthquake, tsunami, nuclear meltdown, and Occupy Wall Street) in advance, 2012 will surely have some surprises. Possibilities include:

  • An earthquake on the New Madrid fault or off the coast of California causing a tsunami to hit the west coast.
  • One or more hurricanes entering the Gulf of Mexico causing widespread oil rig destruction and causing oil and natural gas prices to soar.
  • A new bird flu or swine flu pandemic that spreads around the world.
  • An actual terrorist attack in the United States in a mall, hotel or public venue that provokes a massive over response by our government could change this country forever.
  • The assassination of political leaders and prominent bankers around the world as radicals take retribution into their own hands.

We have now entered the fifth year of this Fourth Turning Crisis. George Washington and his troops were barely holding on at Valley Forge during the fifth year of the American Revolution Fourth Turning. By year five of the Civil War Fourth Turning 700,000 Americans were dead, the South left in ruins, a President assassinated and a military victory attained that felt like defeat. By the fifth year of the Great Depression/World War II Fourth Turning, FDR’s New Deal was in place and Adolf Hitler had been democratically elected and was formulating big plans for his Third Reich. The insight from prior Fourth Turnings that applies to 2012 is that things will not improve. They call it a Crisis because the risk of calamity is constant. There is zero percent chance that 2012 will result in a recovery and return to normalcy. Not one of the issues that caused our economic collapse has been solved. The “solutions” implemented since 2008 have exacerbated the problems of debt, civic decay and global disorder. The choices we make as a nation in 2012 will determine the future course of this Fourth Turning. If we fail in our duty, this Fourth Turning could go catastrophically wrong. I pray we choose wisely. Have a great 2012.          

“The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. Thus might the next Fourth Turning end in apocalypse – or glory. The nation could be ruined, its democracy destroyed, and millions of people scattered or killed. Or America could enter a new golden age, triumphantly applying shared values to improve the human condition. The rhythms of history do not reveal the outcome of the coming Crisis; all they suggest is the timing and dimension.” – Strauss & Howe

 

  Source: www.williambanzai7.blogspot.com

ENERGY INDEPENDENCE – THE BIG LIE

 

 PRICE OF A BARREL OF OIL 1978 – $14.00

“We are the generation that will win the war on the energy problem and in that process, rebuild the unity and confidence of America.” – President Jimmy Carter, 1979

“We have it in our power to act right here, right now. I propose $6 billion in tax cuts and research and developments to encourage innovation, renewable energy, fuel-efficient cars, and energy-efficient homes.” – President Bill Clinton, 1998

“I think that in ten years, we can reduce our dependence so that we no longer have to import oil from the Middle East or Venezuela. I think that’s about a realistic time frame…That’s why I’ve focused on putting resources into solar, wind, biodiesel, geothermal. These have been priorities of mine since I got to the Senate, and it is absolutely critical that we develop a high fuel efficient car that’s built not in Japan and not in South Korea, but built here in the United States of America.” – President Barack Obama, 2008

“We don’t have to wait on OPEC anymore. We don’t have to let them hold us hostage. America’s got the energy. Let’s have American energy independence.”- Rick Perry, CNN Debate, October 18

“We must become independent from foreign sources of oil. This will mean a combination of efforts related to conservation and efficiency measures, developing alternative sources of energy like biodiesel, ethanol, nuclear, and coal gasification, and finding more domestic sources of oil such as in ANWR or the Outer Continental Shelf (OCS).” – Mitt Romney  

PRICE OF A BARREL OF BRENT OIL 2011 – $114.00

 

It is too bad that our 255 million cars can’t run on hot air. American presidents have propagated the Big Lie of energy independence for the last three decades. The Democrats have lied about green energy solutions and the Republicans have lied about domestic sources saving the day. These deceitful politicians put the country at risk as they misinform and mislead the non-thinking American public. They have been declaring our energy independence for 30 years, but we import three times as much oil today as we did in the early 1980’s. The CPI has gone up 350% since 1978, but the price of a barrel of oil has risen 800% over the same time frame. Today, I hear the same mindless fabrications from politicians and pundits about our ability to become energy independent. Any critical thinking analysis of the hard facts reveals that the United States will grow increasingly dependent upon other countries to supply our energy needs from a dwindling and harder to access supply of oil and natural gas. The fantasy world of plug in cars, corn driven vehicles and solar energy running our manufacturing plants is a castle in the sky flight of imagination. The linear thinking academic crowd believes a technological miracle will save us, when it is evident technology fails without infinite quantities of cheap oil.

I know the chart below requires some time to grasp, but I’m sure the average American can take five minutes away from watching Jersey Shore, Dancing with the Stars, or the latest update of the Kardashian saga to understand why the propaganda about energy independence is nothing but falsehoods. You have U.S. energy demand by sector on the right and the energy source by fuel on the left. Total U.S. energy use is nearly 100 quadrillion Btu. In physical energy terms, 1 quad represents 172 million barrels of oil (8 to 9 days of U.S. oil use), 50 million tons of coal (enough to generate about 2% of annual U.S. electricity use), or 1 trillion cubic feet of natural gas (about 4% of annual U.S. natural gas use).  

Please note that 37% of our energy source is petroleum, which supplies 95% of the energy for our transportation sector. That means your car and the millions of 18 wheelers that deliver your food to your grocery stores and electronic gadgets to your Best Buy. You can’t fill up your SUV with coal, natural gas, nuclear energy or sunshine. Without the 7 billion barrels of oil we use every year, our just in time mall centric suburban sprawl society would come to a grinding halt. There is no substitute for cheap plentiful oil anywhere in sight. The government sponsored ethanol boondoggle has already driven food prices higher, while requiring more energy to produce than it generates. Only a government “solution” could raise food prices, reduce gas mileage, and bankrupt hundreds of companies in an effort to reduce our dependence on oil. Natural gas as a transportation fuel supplies 2% of our needs. The cost to retro-fit 160,000 service stations across the country to supply natural gas as a fuel for the non-existent natural gas automobiles would be a fool’s errand and take at least a decade to implement.   

    

The green energy Nazis despise coal and nuclear power, which account for 31% of our energy supply. They want to phase coal out. They aren’t too fond of fracking either, so there goes another 23% of our supply. You might be able to make out that itsy bitsy green circle with the 7% of our supply from renewable energy. And more than half of that energy is supplied by hydro power. Less than 2% of our energy needs are met by solar and wind. For some perspective, we need to use the equivalent of 17 billion barrels of oil per year to run our society and solar and wind supplies the equivalent energy of about 300 million barrels of that total. I think our green energy dreams will come up just a smidgen short of meeting our demands. Nothing can replace oil as the lifeblood of our culture and there is no domestic supply source which will eliminate or even reduce our dependence upon the 10 million barrels per day we import from foreign countries. There are some hard truths that are purposefully ignored by those who want to mislead the public about the grim consequences of peak cheap oil:

  • The earth is finite. The amount of oil within the crust of the earth is finite. As we drain 32 billion barrels of oil from the earth every year, there is less remaining within the earth. We have drained the cheapest and easiest to reach 1.4 trillion barrels from the earth since the mid 1800s. The remaining recoverable 1.4 trillion barrels will be expensive and hard to reach.
  • The United States has about 2% of the world’s proven oil and gas reserves, but consumes 22% of the world’s oil production and 27% of the world’s natural gas production.
  • Demand for oil will continue to rise no matter what the United States does, as the developing world consumption far outstrips U.S. consumption. Oil is fungible and will be sold to the highest bidder.
  • The concept of energy returned on energy invested (EROEI) is beyond the grasp of politicians and drill, drill, drill pundits. EROEI is the ratio of the amount of usable energy acquired from a particular energy resource to the amount of energy expended to obtain that energy resource. When the EROEI of a resource is less than or equal to one, that energy source becomes an “energy sink”, and can no longer be used as a primary source of energy. Once it requires 1.1 barrels of oil to obtain a barrel of oil, the gig is up.
  • There is a negative feedback loop that revolves around oil supply, oil price and economic growth. As demand continues to rise and supply is more difficult to access, prices will rise. Since oil is an essential ingredient in every aspect of our lives, once the price reaches $120 to $150 a barrel economic growth goes into reverse. Demand crashes and investment in new sources of energy dries up. Rinse and repeat.

Finite World

World oil production peaked in 2005 has been flat since then, despite a continuous stream of promises from Saudi Arabia that they are on the verge of increasing production. The chart below from the U.S. Energy Information Administration propagates the standard fabrications about energy supplies. Even though worldwide oil production has clearly peaked, the oil industry PR whores and government agencies continue to project substantial production growth in the future. The mainstream media trots out Daniel Yergin whenever it wants to calm the masses, despite his track record of being 100% wrong 100% of the time. The brilliance of his July, 2005 Op-Ed shines through:

“Prices around $60 a barrel, driven by high demand growth, are fueling the fear of imminent shortage — that the world is going to begin running out of oil in five or 10 years. This shortage, it is argued, will be amplified by the substantial and growing demand from two giants: China and India. There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million barrels a day — from 85 million barrels per day to 101 million barrels a day — a 20 percent increase. Such growth over the next few years would relieve the current pressure on supply and demand.”

Oil production capacity has not grown by one barrel since Yergin wrote this propaganda piece. This is despite the fact that prices have almost doubled, which should have spurred production. The current energy independence false storyline – the Bakken Formation – has gone from production of 10,000 barrels per day in 2003 to 400,000 barrels per day now, while the hundreds of millions invested in developing the Canadian tar sands have increased production by 50% since 2005. Despite these substantial increases in output, worldwide production has remained flat as existing wells deplete at the same rate that new production is brought online.

 

The facts are there is approximately 1.4 trillion barrels of recoverable oil left in the crust of the earth. We currently suck 32 billion barrels per year out of the earth. This means we have 44 years of oil left, at current consumption levels. But we know demand is growing from the developing world. Taking this fact into consideration, we have between 35 and 40 years worth of recoverable oil left on the planet. That is not a long time. Additionally, the last 1.4 trillion barrels will much more difficult and costly to extract than the first 1.4 trillion barrels. The remaining oil is miles under the ocean floor, trapped in shale and tar sands, and in the arctic. Despite these hard facts, governmental agencies and politicians continue to paint a rosy picture about our energy future. I watched in stunned amazement last week as five bozos on the McLaughlin Group news program unanimously proclaimed the U.S. would become a net exporter of oil in the coming decade. Do these supposedly intelligent people not understand the basic economics of supply, demand and price?  

It seems the governmental organizations always paint the future in the most optimistic terms, despite all facts pointing to a contrary outcome. The EIA predicts with a straight face that oil production will rise to 110 million barrels per day, while the price of a barrel of oil remains in the current $100 to $125 per barrel range. Non-OPEC production has been in decline since 2004, but the EIA miraculously predicts a 15% increase in production over the next 25 years. OPEC production has been flat since 2005, but the EIA is confident their 50 year old oil fields will ramp up production by 25% in the next 25 years. Does the EIA consider whether OPEC even wants to increase production? It would appear that constrained supply and higher prices would be quite beneficial to the OPEC countries. And then of course there is the unconventional oil that is supposed to increase from 4 million barrels per day to 13 million barrels per day, a mere 325% increase with no upward impact on prices. These guys would make a BLS government drone blush with the utter ridiculousness of their predictions.

 

The picture below is an excellent representation of how the easy to access oil and gas of the earth have been tapped. They were close to the surface. The remaining oil and gas is deeper and trapped within shale and sand. The new technology for extracting gas from shale has concerns regarding whether fracking and disposal of waste water can be done safely, especially near highly populated areas. The relationship between fracking and earthquakes could also prove to be problematic. The wells also have rapid decline rates. Add a mile of ocean to the picture below and you have some really expensive to access oil and potential for disaster, as witnessed with the Deep Water Horizon.

 

The EIA projects natural gas supply to grow by 10% between now and 2035 due to a 300% increase in shale gas supply. It seems the EIA believes the fantasy of 8 Saudi Arabia’s in the Bakken formation of North Dakota and decades of gas within the Marcellus Shale. These fantasies have been peddled by the natural gas industry in order to get support for their fracking efforts. This false storyline is damaging to the long-term planning that should be taking place now to alleviate the energy scarcity that is our future. In 2006 the EIA reported the possibility of 500 billion barrels of oil in the Bakken formation, based on guesswork. The U.S. Geological Survey has since scaled this back ever so slightly to 3.65 billion barrels, which is six months of U.S. consumption. The deceptions peddled regarding Marcellus shale are also colliding with reality. The U.S. Geological Survey recently produced an estimate of Marcellus Shale resources, which will cause the EIA to reduce its estimate of shale gas reserves for the Marcellus Shale by 80%. The price of natural gas is currently $3.54 MMBtu, down from $13 a few years ago. Extracting natural gas from shale has high capital costs of land, drilling and completion. It is not economically feasible below $6 MMBtu.

 

Based on the known facts and a realistic view of the future, there will be less supply of oil and natural gas as time goes on. We can already see the impact of these facts today. Even though Europe and the U.S. are in recession, the price of oil continues to rise. The developing world continues to demand more oil and the supply is stagnant. Stunts like withdrawing oil from the Strategic Reserve are foolish and politically motivated. Is the world then running out of oil then? No, but any increase in future global oil production will be modestly incremental and production could be thrown off course by any number of possible events, from an Israeli attack on Iran to (another, but successful this time) al Qaida attack on Saudi Arabia’s Abqaiq oil refinery. Any forecast regarding future oil production and prices isn’t worth the paper it is written on unless consideration to wars, revolutions and terrorism are factored into the equation.

We Don’t Matter

Americans like to think we are the center of the universe. Those who propagate the misinformation about U.S. energy independence are clearly math challenged. The total proven oil reserves in the world total 1.4 trillion barrels and the United States has 22 billion barrels of that total, or 1.6% of the world’s oil. The U.S. burns 7 billion barrels per year, so we have enough oil to survive for three whole years. The U.S. consumes 22% of the world’s oil despite having 4.5% of the world’s population and less than 2% of the world’s oil. Do these facts lead you to the conclusion the United States will be exporting oil in the near future?

 

When you hear the pundits breathtakingly describe our vast natural gas resources you would think we are the dominant player in this market. Not quite. The United States has 4% of the world’s natural gas reserves. Predictably we consume 22% of the world’s natural gas. Russia controls 25% of the world’s natural gas reserves, with the Middle East countries controlling 40% of the world’s reserves. The pundits can hype our “vast” supplies of natural gas, but the facts clearly reveal it is nothing but hype.

  

The U.S. is consuming less oil than it was in 2005. U.S. consumption is not the crucial factor in determining the price of oil today and our consumption will matter even less in the future. Emerging market countries, led by China and India, will be the driving force in oil demand in the coming decades. According to the IEA, “Non-OECD [emerging markets] account for 90% of population growth, 70% of the increase in economic output and 90% of energy demand growth over the period from 2010 to 2035.”

 

This demand is being driven by the growth in vehicles in emerging markets. The U.S. market has reached a saturation point, but China, India and the rest of the world are just beginning their love affairs with the automobile. The accumulation of facts regarding both supply and demand should even convince the most brainless CNBC talking head that the price of oil will continue to rise. The 2008 peak price of $145 per barrel will not hold. The tried and true American method of ignoring problems until they reach crisis proportions will bite us in the ass once again.

 

Slippery Road Ahead

The concept of EROI is incomprehensible to the peak oil deniers. When Larry Kudlow or one of the other drill, drill, drill morons proclaims the vast amount of oil in North Dakota shale and in Alberta, Canada tar sands, they completely ignore the concept of EROI. Some estimates conclude there are 5 trillion barrels of oil left in the earth. But, only 1.4 trillion barrels are considered recoverable. This is because the other 3.6 trillion barrels would require the expenditure of more energy to retrieve than they can deliver. Therefore, it is not practical to extract. When oil was originally discovered, it took on average one barrel of oil to find, extract, and process about 100 barrels of oil. That ratio has declined steadily over the last century to about three barrels gained for one barrel used up in the U.S. and about ten for one in Saudi Arabia.

The chart below clearly shows the sources of energy which have the highest energy return for energy invested. I don’t think I’ve heard Obama or the Republican candidates calling for a national investment in hydro-power even though it is hugely efficient. The dreams of the green energy crowd are shattered by the fact that biodiesel, ethanol and solar require as much energy to create as they produce. Tar sands and shale oil aren’t much more energy efficient. It’s too bad Obama and his minions hate dirty coal, because has the best return on energy invested among all the practical sources.   

 File:EROI - Ratio of Energy Returned on Energy Invested - USA.svg

Worse than the peak oil deniers are those who pretend that oil isn’t really that important to our society. They declare that technology will save the day, when in reality technology can’t function without oil. Without plentiful cheap oil our technologically driven civilization crashes. We are addicted to oil. Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 250 cubic feet of natural gas per day each.  You might be interested in a partial list of products that require petroleum to be produced.

Solvents Diesel fuel Motor Oil Bearing Grease
Ink Floor Wax Ballpoint Pens Football Cleats
Upholstery Sweaters Boats Insecticides
Bicycle Tires Sports Car Bodies Nail Polish Fishing lures
Dresses Tires Golf Bags Perfumes
Cassettes Dishwasher parts Tool Boxes Shoe Polish
Motorcycle Helmet Caulking Petroleum Jelly Transparent Tape
CD Player Faucet Washers Antiseptics Clothesline
Curtains Food Preservatives Basketballs Soap
Vitamin Capsules Antihistamines Purses Shoes
Dashboards Cortisone Deodorant Footballs
Putty Dyes Panty Hose Refrigerant
Percolators Life Jackets Rubbing Alcohol Linings
Skis TV Cabinets Shag Rugs Electrician’s Tape
Tool Racks Car Battery Cases Epoxy Paint
Mops Slacks Insect Repellent Oil Filters
Umbrellas Yarn Fertilizers Hair Coloring
Roofing Toilet Seats Fishing Rods Lipstick
Denture Adhesive Linoleum Ice Cube Trays Synthetic Rubber
Speakers Plastic Wood Electric Blankets Glycerin
Tennis Rackets Rubber Cement Fishing Boots Dice
Nylon Rope Candles Trash Bags House Paint
Water Pipes Hand Lotion Roller Skates Surf Boards
Shampoo Wheels Paint Rollers Shower Curtains
Guitar Strings Luggage Aspirin Safety Glasses
Antifreeze Football Helmets Awnings Eyeglasses
Clothes Toothbrushes Ice Chests Footballs
Combs CD’s & DVD’s Paint Brushes Detergents
Vaporizers Balloons Sun Glasses Tents
Heart Valves Crayons Parachutes Telephones
Enamel Pillows Dishes Cameras
Anesthetics Artificial Turf Artificial limbs Bandages
Dentures Model Cars Folding Doors Hair Curlers
Cold cream Movie film Soft Contact lenses Drinking Cups
Fan Belts Car Enamel Shaving Cream Ammonia
Refrigerators Golf Balls Toothpaste Gasoline

 

The propaganda blared at the impressionable willfully ignorant American public has worked wonders. The vast majority of Americans have no clue they have entered a world of energy scarcity, a world where the average person is poorer and barely able to afford the basic necessities of life. This is borne out in the vehicles sales statistics reported every month. There have been 10.5 million passenger vehicles sold through the first 10 months of 2011. In addition to the fact they are “purchased” using 95% debt and financed over seven years, the vast majority are low mileage vehicles getting less than 20 mpg. Only 1.8 million small energy efficient vehicles have been sold versus 6.1 million SUVs, pickup trucks and large luxury automobiles. Americans have the freedom to buy any vehicle they choose. They also have the freedom to not think and ignore the facts about the certainty of higher prices at the pump. By choosing a 20 mpg vehicle over a 40 mpg vehicle, they’ve sealed their fate. How could the average soccer mom get by without a Yukon or Excursion to shuttle Biff and Buffy to their games? Have you ever tried to navigate a soccer field parking lot in a hybrid? The horror!

The American public has been lulled back into a sense of security as gas prices have receded from $4.00 a gallon back to $3.40 a gallon. This lull will be short lived. Oil prices have surged by 15% in the last two months, even as the world economy heads into recession. The link between high oil prices and economic growth are undeniable, even though the deceitful pundits on CNBC will tell you otherwise. Ten out of eleven recessions since World War II were associated with oil price spikes. Gail Tverberg sums up the dilemma of energy scarcity for the average American:

“High-priced oil tends to choke economies because high oil prices are associated with high food prices (because oil products are used in food growing and transport), and people’s salaries do not rise to offset this rise in food and oil prices. People have to eat and to commute to their jobs, so they cut back on other expenditures. This leads to recession. Recession leads to lower oil consumption, since people without jobs can’t buy very much of anything, oil products included. In some sense, the reduction in oil extraction is due to reduced demand, because citizens cannot afford the high-priced oil that is available.”

But don’t worry. The rising oil and food prices will only impact the 99% in the U.S. and the poorest dregs across the globe that spend 70% of their income on food. The 1% will be just fine as they will bet on higher oil prices, therefore further enriching themselves while the peasants starve. The market for caviar, champagne, NYC penthouses, and summer mansions in the Hamptons will remain robust.

There is no escape from the ravages of higher priced oil. There is plenty of oil left in the ground. But, the remaining oil is difficult, slow and expensive to extract. Oil prices will rise because they have to. Without higher prices, who would make the huge capital investment required to extract the remaining oil? Once oil prices reach the $120 to $150 per barrel range our economy chokes and heads into recession. We are trapped in an endless feedback loop of doom. The false storyline of renewable energy saving the day is put to rest by Gail Tverberg:

“Renewables such as wind, solar PV, cellulosic ethanol, and biogas could more accurately be called “fossil fuel extenders” because they cannot exist apart from fossil fuels. Fossil fuels are required to make wind turbines and other devices, to transport the equipment, to make needed repairs, and to maintain the transport and electrical systems used by these fuels (such as maintaining transmission lines, running-back up power plants, and paving roads). If we lose fossil fuels, we can expect to lose the use of renewables, with a few exceptions, such as trees cut down locally, and burned for heat, and solar thermal used to heat hot water in containers on roofs.”

Predictably, the politicians and intellectual elite do the exact opposite of what needs to be done. We need to prepare our society to become more local. Without cheap plentiful oil our transportation system breaks down. Our 3.9 million miles of road networks will become a monument to stupidity as Obama and Congress want to spend hundreds of billions on road infrastructure that will slowly become obsolete. The crumbling infrastructure is already the result of government failure, as the money that should have been spent maintaining our roads, bridges and water systems was spent on train museums, turtle crossings, teaching South African men how to wash their genitalia, studies on the mating habits of ferrets, and thousands of other worthless Keynesian pork programs. If our society acted in a far sighted manner, we would be creating communities that could sustain themselves with local produce, local merchants, bike paths, walkable destinations, local light rail commuting, and local energy sources. The most logical energy source for the U.S. in an oil scarce scenario is electricity, since we have a substantial supply of coal and natural gas for the foreseeable future and the ability to build small nuclear power plants. The Fukushima disaster is likely to kill nuclear as an option until it is too late. The electrical grid should be the number one priority of our leaders, as it would be our only hope in an oil scarce world. Instead, our leaders will plow borrowed money into ethanol, solar, and shale oil drilling, guaranteeing a disastrous scenario for our country.

The United States is a country built upon the four C’s: Crude, Cars, Credit, and Consumption. They are intertwined and can’t exist without crude as the crucial ingredient. As the amount of crude available declines and the price rises, the other three C’s will breakdown. Our warped consumer driven economy collapses without the input of cheap plentiful oil. Those at the top levels of government realize this fact. It is not a coincidence that the War on Terror is the current cover story to keep our troops in the Middle East. It is not a coincidence the uncooperative rulers (Hussein, Gaddafi) of the countries with the 5th and 9th largest oil reserves on the planet have been dispatched. It is not a coincidence the saber rattling grows louder regarding the Iranian regime, as they sit atop 155 billion barrels of oil, the 4th largest reserves in the world. It should also be noted the troops leaving Iraq immediately began occupying Kuwait, owner of the 6th largest oil reserves on the planet. Oil under the South China Sea and in the arctic is being hotly pursued by the major world players. China and Russia are supporting Iran in their showdown with Israel and the U.S. As the world depletes the remaining oil, conflict and war are inevitable. The term Energy Independence will carry a different meaning than the one spouted by mindless politicians as the oil runs low.

And as things fell apart
Nobody paid much attention

Nothing but Flowers – The Talking Heads 

THANK GOD I’M WHITE

Fascinating report put out by the Census Bureau this morning. Here are some key points:

  • The nation’s official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009, the third consecutive annual increase in the poverty rate.  
  • There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009, the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published
  • The number of people without health insurance coverage rose from 49.0 million in 2009 to 49.9 million in 2010, while the percentage without coverage -16.3 percent – was not statistically different from the rate in 2009.
  • Breaking it down by ethnicity, living in poverty were 27.4% of all blacks, and 26.6% of all Hispanics. White, non Hispanics and Asians were doing better at 9.9% and 12.1% respectively.

Looks like us white folks are doing better than those minorities. I find this data fascinating. The number of people in poverty rose for the fourth consecutive year to an all-time high. But how could that be? Our very own government reported that Real GDP grew 3.0% in 2010. How could more people go into poverty if the economy grew strongly? It’s because the economy did not grow. The GDP numbers are a lie. The government borrowed from the Chinese, transferred the money to the poor and called it income.

The only people who recovered in 2010 were Wall Street bankers and big corporation CEOs like Immelt. The average person’s life got worse – little or no pay increases, higher food costs, and higher energy costs. If the economy had actually recovered in 2010, why did 6 million MORE people go on food stamps since 2009?

Obama and his minions got everything they asked for in 2009. They had both houses of Congress and they passed their plan, lock, stock and barrel. But somehow their Keynesian solutions led to greater poverty, 23% unemployment, and declining household income. Are you shocked that blacks and hispanics have almost three times the poverty of whites? When more than half your population is born out of wedlock and 50% of your kids drop out of high school and you depend on the government to pay your way in the world, what do you expect. At least they still have their Direct TV, cell phones, and SNAP cards.

The most revolting figure in the report is the real median household income of $49,445. This means 50% of the households in the U.S. make less than $49,445 per year. Below is a chart showing the real median household income going back to 1975. It is now lower than it was in 1997 and 6% below the peak, reached in 1999. Imagine the result if we used the real rate of inflation, rather that the government manipulated piece of shit called the CPI. My educated guess would be that real median household income is lower than it was in 1986.  

Year No. of Households Nominal $ Inflation Adjusted $
2009 117,538,000 $49,777 $49,777
2008 117,181,000 $50,303 $50,303
2007 116,783,000 $50,233 $52,163
2006 116,011,000 $48,201 $51,473
2005 114,384,000 $46,326 $51,093
2004 113,343,000 $44,334 $50,535
2003 112,000,000 $43,318 $50,711
2002 111,278,000 $42,409 $50,756
2001 109,297,000 $42,228 $51,356
2000 108,209,000 $41,990 $52,500
1999 106,434,000 $40,696 $52,587
1998 103,874,000 $38,885 $51,295
1997 102,528,000 $37,005 $49,497
1996 101,018,000 $35,492 $48,499
1995 99,627,000 $34,076 $47,803
1994 98,990,000 $32,264 $46,351
1993 97,107,000 $31,241 $45,839
1992 96,426,000 $30,636 $46,063
1991 95,669,000 $30,126 $46,445
1990 94,312,000 $29,943 $47,818
1989 93,347,000 $28,906 $48,463
1988 92,830,000 $27,225 $47,614
1987 91,124,000 $26,061 $47,251
1986 89,479,000 $24,897 $46,665
1985 88,458,000 $23,618 $45,069
1984 86,789,000 $22,415 $44,242
1983 85,407,000 $20,885 $42,910
1982 83,918,000 $20,171 $43,212
1981 83,527,000 $19,074 $43,328
1980 82,368,000 $17,710 $44,059
1979 80,776,000 $16,461 $45,498
1978 77,330,000 $15,064 $45,625
1977 76,030,000 $13,572 $43,925
1976 74,142,000 $12,686 $43,649
1975 72,867,000 $11,800 $42,936

 

The average family in the US is making much less money than they were 12 years ago. This supports John Williams contention that the US has virtually been in a decade long recession, despite what the government and main stream media report.

The situation continues to deteriorate. These families made up for their decline in income, by increasing their credit card, auto loan and student loan debt from $1.4 trillion in 1999 to $2.5 trillion today. Without jobs, incomes can’t rise. The Obama solution will be to funnel more of your money to those classified as in poverty. The only solution that will work is to liquidate the banks, liquidate the debt, wipe out those who made bad decisions, and start over. No one wants to accept the reality of this solution. It is too painful. It is mean and brutish. Tough shit. It is the only way. We could soften the blow by withdrawing our troops from around the globe, protecting our own borders and freeing up hundreds of billions in war spending for domestic purposes. What a concept – building bridges in the U.S. rather than rebuilding bridges we blew up in Iraq.

Otherwise we will continue on a path of ever declining income and bankers enriching themselves at our expense. But, at least I’m white. I got that going for me.

Income, Poverty and Health Insurance Coverage in the United States: 2010

Summary of Key Findings

     The U.S. Census Bureau announced today that in 2010, median household income declined, the poverty rate increased and the percentage without health insurance coverage was not statistically different from the previous year.

     Real median household income in the United States in 2010 was $49,445, a 2.3 percent decline from the 2009 median.

     The nation’s official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009 ─ the third consecutive annual increase in the poverty rate. There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 ─ the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published.

     The number of people without health insurance coverage rose from 49.0 million in 2009 to 49.9 million in 2010, while the percentage without coverage −16.3 percent – was not statistically different from the rate in 2009.

     This information covers the first full calendar year after the December 2007-June 2009 recession. See section on the historical impact of recessions.

     These findings are contained in the report Income, Poverty, and Health Insurance Coverage in the United States: 2010. The following results for the nation were compiled from information collected in the 2011 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC):

Income

  • Since 2007, the year before the most recent recession, real median household income has declined 6.4 percent and is 7.1 percent below the median household income peak that occurred prior to the 2001 recession in 1999. The percentages are not statistically different from each another.

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

  • Among race groups, real median income declined for white and black households between 2009 and 2010, while changes for Asian and Hispanic-origin households were not statistically different. Real median income for each race and Hispanic-origin group has not yet recovered to the pre-2001 recession all-time highs. (See Table A.)

Regions

  • Households in the Midwest, South and West experienced declines in real median income between 2009 and 2010. The apparent change in median household income for the Northeast was not statistically significant. (See Table A.)

Nativity

  • Median income for households maintained by native-born householders declined between 2009 and 2010 in real terms. The change in the median income of all foreign-born households was not statistically significant. (See Table A.)

Earnings

  • In 2010, the earnings of women who worked full time, year-round were 77 percent of that for men working full time, year-round, not statistically different from the 2009 ratio. The 2010 real median earnings of these men and women were not different from the 2009 earnings.
  • Since 2007, the number of men working full time, year-round with earnings decreased by 6.6 million and the number of corresponding women declined by 2.8 million.

Income Inequality

  • Based on the Gini Index, the change in income inequality between 2009 and 2010 was not statistically significant, while the changes in shares of aggregate household income by quintiles showed a slight shift to more inequality. The Gini index was 0.469 in 2010. (The Gini index is a measure of household income inequality; zero represents perfect income equality and 1 perfect inequality.)

Poverty

  • The poverty rate in 2010 was the highest since 1993 but was 7.3 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available. Since 2007, the poverty rate has increased by 2.6 percentage points.
  • In 2010, the family poverty rate and the number of families in poverty were 11.7 percent and 9.2 million, respectively, up from 11.1 percent and 8.8 million in 2009.
  • The poverty rate and the number in poverty increased for both married-couple families (6.2 percent and 3.6 million in 2010 from 5.8 percent and 3.4 million in 2009) and female-householder-with-no-husband-present families (31.6 percent and 4.7 million in 2010 from 29.9 percent and 4.4 million in 2009). For families with a male householder no wife present, the poverty rate and the number in poverty were not statistically different from 2009 (15.8 percent and 880,000 in 2010).

Thresholds

  • As defined by the Office of Management and Budget and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2010 was $22,314.
    (See <http://www.census.gov/hhes/www/poverty/data/threshld/index.html> for the complete set of dollar value thresholds that vary by family size and composition.)

Race and Hispanic Origin (Race data refer to people reporting a single race only. Hispanics can be of any race.)

  • The poverty rate for non-Hispanic whites was lower in 2010 than it was for other racial groups. Table B details 2010 poverty rates and numbers in poverty, as well as changes since 2009 in these measures, for race groups and Hispanics.

Doubled-Up Households

  • Doubled-up households are defined as households that include at least one “additional” adult: a person 18 or older who is not enrolled in school and is not the householder, spouse or cohabiting partner of the householder. In spring 2007, prior to the recession, doubled-up households totaled 19.7 million. By spring 2011, the number of doubled-up households had increased by 2.0 million to 21.8 million and the percent rose by 1.3 percentage points from 17.0 percent to 18.3 percent.
  • In spring 2011, 5.9 million young adults age 25-34 (14.2 percent) resided in their parents’ household, compared with 4.7 million (11.8 percent) before the recession, an increase of 2.4 percentage points.
  • It is difficult to precisely assess the impact of doubling up on overall poverty rates. Young adults age 25-34, living with their parents, had an official poverty rate of 8.4 percent, but if their poverty status were determined using their own income, 45.3 percent had an income below the poverty threshold for a single person under age 65.

Age

  • The poverty rate increased for children younger than 18 (from 20.7 percent in 2009 to 22.0 percent in 2010) and people 18 to 64 (from 12.9 percent in 2009 to 13.7 percent in 2010), while it was not statistically different for people 65 and older (9.0 percent).
  • Similar to the patterns observed for the poverty rate in 2010, the number of people in poverty increased for children younger than 18 (15.5 million in 2009 to 16.4 million in 2010) and people 18 to 64 (24.7 million in 2009 to 26.3 million in 2010) and was not statistically different for people 65 and older (3.5 million).

Nativity

  • The 2010 poverty rate for naturalized citizens was not statistically different from 2009, while the poverty rates of native-born and noncitizens increased. Table B details 2010 poverty rates and the numbers in poverty, as well as changes since 2009 in these measures, by nativity.

Regions

  • The South was the only region to show statistically significant increases in both the poverty rate and the number in poverty — 16.9 percent and 19.1 million in 2010 — up from 15.7 percent and 17.6 million in 2009. In 2010, the poverty rates and the number in poverty for the Northeast, Midwest and the West were not statistically different from 2009. (See Table B.)

Health Insurance Coverage

  • The number of people with health insurance increased to 256.2 million in 2010 from 255.3 million in 2009. The percentage of people with health insurance was not statistically different from 2009.
  • Between 2009 and 2010, the percentage of people covered by private health insurance declined from 64.5 percent to 64.0 percent, while the percentage covered by government health insurance increased from 30.6 percent to 31.0 percent. The percentage covered by employment-based health insurance declined from 56.1 percent to 55.3 percent.
  • The percentage covered by Medicaid (15.9 percent) was not statistically different from 2009.
  • In 2010, 9.8 percent of children under 18 (7.3 million) were without health insurance. Neither estimate is significantly different from the corresponding 2009 estimate.
  • The uninsured rate for children in poverty (15.4 percent) was greater than the rate for all children (9.8 percent).
  • In 2010, the uninsured rates decreased as household income increased from 26.9 percent for those in households with annual incomes less than $25,000 to 8.0 percent in households with incomes of $75,000 or more.

Race and Hispanic Origin (Race data refer to those reporting a single race only. Hispanics can be of any race.)

  • The uninsured rate and number of uninsured in 2010 were not statistically different from 2009 for non-Hispanic whites and blacks, while increasing for Asians. The number of uninsured Hispanics was not statistically different from 2009, while the uninsured rate decreased to 30.7 percent. (See Table C.)

Nativity

  • The proportion of the foreign-born population without health insurance in 2010 was about two-and-a-half times that of the native-born population. The 2010 uninsured rate was not statistically different from the 2009 rate for native-born, the foreign-born overall and noncitizens but rose for naturalized citizens. Table C details the 2010 uninsured rate and the number of uninsured, as well as changes since 2009 in these measures, by nativity.

Regions

  • The Northeast and the Midwest had the lowest uninsured rates in 2010. Between 2009 and 2010, there were no statistical differences in uninsured rates for any of the regions. The number of uninsured increased in the Northeast, while there were no statistically significant changes for the other three regions. (See Table C.)

Historical Impact of Recessions

Since 2010 represents the first full calendar year after the recession that ended in June 2009, one can compare changes in income, poverty and health insurance coverage between 2009 and 2010 with changes during the first year after the end of other recessions:

  • Median household income declined the first full year following the December 2007 to June 2009 recession, as well as in the first full year following three other recessions (March 2001 to November 2001, January 1980 to July 1980 and December 1969 to November 1970). However, household income increased the first full year following the November 1973 to March 1975 recession, and the changes following the July 1990 to March 1991 and July 1981 to November 1982 recessions were not statistically significant.
  • The poverty rate and the number of people in poverty increased in the first calendar year following the end of the last three recessions. For the recessions that ended in 1961 and 1975, the poverty rate decreased in the next full calendar year.
  •      After the most recent recession, there was no significant difference in the uninsured rate during the first full year after the recession. However, in the year following the recessions that ended in 1991 and 2001, the uninsured rate increased.

Supplemental Poverty Measure

     The Census Bureau’s statistical experts, with assistance from the Bureau of Labor Statistics and in consultation with the Office of Management and Budget, the Economics and Statistics Administration and other appropriate agencies and outside experts, are now developing a Supplemental Poverty Measure. The Supplemental Poverty Measure, for which the Census Bureau expects to publish preliminary estimates in October 2011, will provide an additional measure of economic well-being. It will not replace the official poverty measure and will not be used to determine eligibility for government programs. See Income, Poverty, and Health Insurance Coverage in the United States: 2010 for more information.

     The Current Population Survey Annual Social and Economic Supplement is subject to sampling and nonsampling errors. All comparisons made in the report have been tested and found to be statistically significant at the 90 percent confidence level, unless otherwise noted.

     For additional information on the source of the data and accuracy of the estimates for the CPS, visit <http://www.census.gov/hhes/www/p60_239sa.pdf>.

PEAK OIL – THE LONG & THE SHORT

Does it seem like we’ve been here before?

A barrel of Brent Crude (the truest indicator of worldwide oil scarcity) sits at $118, up from $75 per barrel in July 2010 – a 57% increase in eleven months. In the U.S., the average price of gasoline is $3.69 per gallon this week, up 37% in the last year and up 100% in the last 30 months.

The pundits and politicians are responding predictably. They blame the Libyan revolution, the dreaded speculators and that old fallback – Big Oil. When the Middle East turmoil began in earnest in January, gas prices had already risen 15% in three months, spurred by increased worldwide demand and by Ben Bernanke’s printing press. Congressmen have reacted in their usual kneejerk politically motivated fashion by demanding that supplies be released from the Strategic Oil Reserve.

Congress has a little trouble with the concept of “strategic.” They also have difficulty dealing with a reality that has been staring them in the face for decades. Politicians will always disregard prudent, long-term planning for vote-generating talk and gestures.

The Long Term

Peak oil has been a mathematically predictable occurrence since American geophysicist M. King Hubbert figured out the process in 1956. His model predicted that oil production in the United States would peak in 1970. He wasn’t far off. In 1971, when the U.S. was producing 88% of its oil needs, domestic production approached 10 million barrels per day and has been in decline ever since.

(Source: http://www.eia.doe.gov/energy_in_brief/images/charts/
Consumption_production_import_trends-large.gif)

The Department of Energy was established in 1977 with a mandate to lessen our dependence on foreign oil. At the time, the U.S. was importing 6.5 million barrels per day. In 1985 the country was still able to produce enough to cover 75% of its needs. Today, 34 years later, the U.S. imports 10 million barrels per day, almost half of what it uses.

President Obama’s 2011 Budget proposal included priorities for the DOE:

  • Positions the United States to be the global leader in the new energy economy by developing new ways to produce and use clean and renewable energy.
  • Expands the use of clean, renewable energy sources such as solar, wind and geothermal while supporting the Administration’s goal to develop a smart, strong and secure electricity grid.
  • Promotes innovation in the renewable energy sectors through the use of expanded loan guarantee authority.

That’s what goes on in talk space.

Back on planet Earth, not a single U.S. oil refinery or nuclear power plant has been built  since 1977. Decades of inaction and denial have left our energy infrastructure obsolescent and decaying. Pipelines, tanks, drilling rigs, refineries and tankers have passed their original design lives. The oil industry is manned by an aging workforce of geologists, engineers and refinery hands. Many are nearing retirement, and there are few skilled personnel to replace them.

Denial of peak oil becomes more dangerous by the day. The Obama administration prattles about clean energy, solar, wind and ethanol, when petroleum powers 96% of the transportation sector and 44% of the industrial sector. Coal provides 51% of the country’s electricity, and nuclear accounts for another 21%. Renewable energy contributes only 6.7% of the country’s energy needs, mostly from hydroelectric facilities.

Ethanol works nicely as a slogan but poorly as a solution. The ethanol boondoggle diverts 40% of the U.S. corn crop to fuel production. The real cost to produce a gallon of ethanol (tariffs, lost energy, higher food costs)  exceeds $7 and has contributed to the price of corn rising 112% in the last year. The 107 million tons of grain that went to U.S. ethanol distilleries in 2009 would have been enough to feed 330 million people for one year.

(Source: http://perotcharts.com/category/challenges/energy/)

The most worrisome aspect of peak oil is that our government leaders have known of it  and have chosen to do nothing. The Department of Energy requested a report from widely respected energy expert Robert Hirsch in 2005. The report clearly laid out the dire situation:

The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.

Some of his conclusions:

  • World oil peaking is going to happen, and will likely be abrupt. World production of conventional oil will reach a maximum and decline thereafter.
  • Oil peaking will adversely affect global economies, particularly the U.S. Over the past century, the U.S. economy has been shaped by the availability of low-cost oil. The economic loss to the United States could be measured on a trillion-dollar scale.
  • The problem is liquid fuels for transportation. The lifetimes of transportation equipment are measured in decades. Rapid changeover in transportation equipment is inherently impossible. Motor vehicles, aircraft, trains and ships have no ready alternative to liquid fuels.
  • Mitigation efforts will require substantial time. Waiting until production peaks would leave the world with a liquid fuel deficit for 20 years. Initiating a crash program 10 years before peaking leaves a liquid fuels shortfall of a decade. Initiating a crash program 20 years before peaking could avoid a world liquid fuels shortfall.

World liquid oil production has never exceeded the level reached in 2005. It becomes more evident by the day that worldwide production has peaked. Robert Hirsch was correct. The world will have a liquid fuel deficit for decades.

The Short Term

The International Energy Agency has been increasing its estimates for world oil consumption to over 90 million barrels per day by the 4th quarter of 2011, led by strong demand from China, India and the rest of the emerging world. World supply was already straining to keep up with this demand before the recent tumult in the Middle East. The mayhem in Tunisia, Egypt, Libya, Bahrain, Yemen and Iran has already taken 1.5 million barrels per day off the market, according to the IEA.

(Source: http://omrpublic.iea.org/)

The Obama administration and mainstream media continue to downplay the economic impact of the conflagration spreading around the world. The risk that oil prices gush toward the 2008 highs is much greater than the likelihood that this turmoil will subside and oil prices fall back to $80 per barrel. As the following chart shows, the daily oil supply coming from countries already experiencing revolution or in danger of uprisings is nearly 8 million barrels per day, or 9% of world supply. No country can ramp up production to make up for that shortfall.

Proven Oil Oil
Country
 Reserves (billion barrels) Production Per Day
Saudi Arabia
265
9,000,000
Iran
137
3,700,000
Iraq
115
2,700,000
UAE
98
2,300,000
Kuwait
102
2,300,000
Libya
46
1,600,000
Algeria
12
1,300,000
Qatar
25
820,000
Oman
6
810,000
Egypt
4
742,000
Syria
3
376,000
Yemen
3
298,000

The Washington DC spin doctors are now assuring the American people that Saudi Arabia can make up for any oil shortfall. Saudi Arabia has declared it has already turned the spigot on and will produce 10.0 million bpd, up from 8.5 million bpd.

Is this replacement production real? A leading industry expert revealed that the Saudis were already producing 8.9 million bpd in January. Hype and misinformation won’t fill your SUV with cheap gas. Saudi production peaked at 9.8 million bpd in 2005. When prices spiked to $147 per barrel in early 2008, their production grew only to 9.5 million bpd. Saudi oil fields are 40 years old and are in terminal decline. Their “spare capacity” doesn’t exist.

And the media ignore the quality difference between Libyan crude and Saudi crude. Libya’s oil is a perfect feedstock for ultra-low-sulfur diesel. The oil Saudi Arabia will supply to replace it is not. It takes three barrels of Saudi crude to yield the same quantity of diesel fuel as one Libyan barrel of crude, and only specially designed refineries can process high-sulfur Saudi oil.

The problem isn’t just turmoil in the Middle East. The Persian Gulf provides 17% of U.S. imports; 22% comes from Africa, 10% from Venezuela and 15% from Mexico. Many of these countries hate us. Mexico, although a relatively friendly country, will become a net importer of oil in the next five years, as its Cantarell oil field is in rapid decline. They’ll have nothing to sell to us.

The long and the short of it is that sunshine, corn and wind will not keep Americans from paying $5 per gallon or more for gas in the near future. The financial implications are that oil and energy investments will produce solid returns over the coming years.

This article was originally published in the Casey Report.

THERE ARE NO GOOD OUTCOMES

The political class and their mouthpieces in the corporate controlled mainstream media are desperately trying to spin the oil price surge as a temporary inconvenience that will not derail their phony recovery story. Brent crude closed at $116 per barrel yesterday. West Texas crude closed at $104 per barrel. Unleaded gas has risen by 22% in the last month and 60% since September 1, 2010. I’m sure this slight increase hasn’t impacted Ben Bernanke or Lloyd Blankfein. Their limo drivers just charge it to their unlimited expense accounts. Joe Sixpack, driving his 15 mpg Dodge RAM pickup, is now forking over an extra $1,200 per year in gas expenditures, not to mention more for everything impacted by oil such as food, utilities, and anything transported to their local Wal-Mart by truck (everything). Luckily, the Federal Reserve and crooked politicians only care about their comrades in the top 1% elitist society, for whom oil is an investment, not an expense.

               UNLEADED GAS

The “experts” speak as if they know what will happen, even though they never saw the rebellions coming in Tunisia, Egypt or Libya. They assure the masses that Libya doesn’t really have an impact on U.S. oil supply. It’s as if these shills never took Econ 101 in college. World oil demand is 88 million barrels per day. Oil supply is 88 million barrels per day. If 1 million barrels of oil supply are taken off-line, it doesn’t matter that the U.S. doesn’t get their oil from Libya. The Italians need their oil. Do the talking heads understand that oil is fungible? The supplier will ship the oil to the highest bidder. Presto!!! – $116 a barrel oil.

With Friends Like This, Who Needs Enemies

Let’s assess the probability of things getting better in the near, medium, long term or ever term. Take a gander at the chart below. These countries account for 29% of the daily world oil supply. Does it strike you as a list of stable countries with happy populations of employed young men?  Egypt, Libya, Yemen, Syria and Iran have already experienced revolution or are on the verge of revolution. Algeria is dead man walking. The Saudi royal family is trying to buy off the masses to stay in power. The revolution genie is out of the bottle. It can’t be put back. Mix 40% unemployment, with millions of young men, no hope, and some Muslim fundamentalism and you’ve got yourself an out of control situation. No amount of public relations spin will create a positive outcome for the United States. The existing world order of despots, kings, and military juntas was just fine for Washington DC. They poured hundreds of billions of “aid”, tanks, helicopters and missiles to these “freedom fighter” despots who diverted the billions to their Swiss bank accounts and fell into line with U.S. policy. No matter who takes power when these revolutions succeed in toppling our puppets, the new regimes will not be friendlier toward America. And they still have the oil.

Proven Oil Oil
Country Reserves (bil barrels) Production Per Day
Saudi Arabia 265 8,400,000
Iran 137 3,700,000
Iraq 115 2,700,000
UAE 98 2,300,000
Kuwait 102 2,300,000
Libya 46 1,600,000
Algeria 12 1,300,000
Qatar 25 820,000
Oman 6 810,000
Egypt 4 742,000
Syria 3 376,000
Yemen 3 298,000

One look at the chart of self reported world oil reserves paints a picture of woe for the United States. Countries in the tinderbox of the Middle East and Africa control 65% of the world’s oil reserves. Saudi Arabia controls 20%, Iran and Iraq control 11% each, Venezuela controls 7%, Russia 5%, and Libya 3%. So, countries that can barely stomach our existence, hate us, or just despise us, control 57% of the world’s remaining oil. Sounds like a recipe for lower oil prices in the future. The two countries on our border are the only dependable suppliers for the U.S. Canada controls 13% of the world oil reserves, mostly in its tar sands. Mexico controls just over 1% of the world’s oil reserves, but supplies 13% of the U.S. daily oil supply.

File:World Oil Reserves by Region.PNG

Drill, Baby, Drill

Now for a reality check on the “Drill Baby Drill” propagandists like Larry Kudlow and the other dishonest Republican shills. The United States controls a full 1.58% of the remaining oil reserves in the world. We have 21.3 billion barrels of reserves versus 264 billion barrels in Saudi Arabia. We are currently producing 9 million barrels per day. At that production rate, the U.S. will deplete its proven reserves in the next 6 to 10 years. New discoveries will not be able to keep up with depletion of existing wells. The good news just keeps coming. Mexico’s oil production has been dependent upon one giant oil field since 1976. The Cantarell oil field produced 2.1 million barrels per day in 2003 at its peak. It is currently producing 464,000 barrels per day. Peak oil has arrived in Mexico. By 2015, the country that currently supplies 13% of our daily oil supply will become a net importer of oil. Drill Baby Drill.

File:Mexican Petroleum Production.PNG

Based upon the monthly import data below from the IEA, it would appear that, to paraphrase Chief Brody in Jaws, we’re going to need more corn. As the Obama administration operates in denial of these simple facts, they will continue to push ethanol and Chevy Volts to save us from dirty oil. We are already diverting 40% of our corn crop to the ethanol boondoggle. I’m sure that has nothing to do with the 98% increase in corn prices in the last year. Maybe tax credits for solar panels on SUVs and rubber band propeller cars will save the day.

We know for a fact that Mexico’s 1.2 million barrels per day will evaporate in the next few years. But, at least we have that solid dependable 2.7 million barrels per day (30% of our daily imports) from those stable bastions of democracy Nigeria, Venezuela, Iraq, Angola, and Algeria. Makes you want to go out and buy a Hummer. The storyline being sold to the American people is that there is no need to worry. Saudi Arabia will step to the plate and make up for any shortfalls throughout the world. Just one problem. Saudi Arabia is lying about their reserves and their ability to increase production. They’d fit in very well in Congress and on Wall Street.

Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
Country Dec-10 Nov-10 YTD 2010 Dec-09 YTD 2009
CANADA 2,064 1,975 1,972 2,104 1,943
MEXICO 1,223 1,229 1,140 1,063 1,092
SAUDI ARABIA 1,076 1,119 1,080 870 980
NIGERIA 1,024 806 986 1,020 776
VENEZUELA 825 884 912 772 951
IRAQ 336 340 414 325 449
ANGOLA 307 263 380 266 448
BRAZIL 271 188 254 181 295
ALGERIA 262 379 325 336 281
COLOMBIA 220 489 338 179 251
ECUADOR 192 188 195 86 181
RUSSIA 158 85 252 168 230
KUWAIT 125 170 195 160 180
UNITED KINGDOM 124 80 120 67 103
ARGENTINA 85 35 29 33 53

Lies, Obfuscation, Misinformation & Denial

The late Matt Simmons made the strong case In his book Twilight in the Desert that Saudi Arabia has been lying about their reserves for years. Documents released by Wikileaks give support to this contention. Cables from the U.S. Embassy in Riyadh , released by WikiLeaks, urge Washington to take seriously a warning from senior Saudi government oil executive Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.
The UK Guardian reported:

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.

Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.

One cable said: “According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray.”

The US consul then told Washington: “While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered.”

A fourth cable, in October 2009, claimed that escalating electricity demand by Saudi Arabia may further constrain Saudi oil exports. “Demand [for electricity] is expected to grow 10% a year over the next decade as a result of population and economic growth. As a result it will need to double its generation capacity to 68,000MW in 2018,” it said.

It also reported major project delays and accidents as “evidence that the Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production.” While fears of premature “peak oil” and Saudi production problems had been expressed before, no US official has come close to saying this in public.

The overstatement of reserves by Saudi Arabia and most of the OPEC countries should be abundantly clear to anyone with a smattering of critical thinking skills. This eliminates just about everyone on CNBC or Fox News. Essentially, the self reported, unaudited declared oil reserves from OPEC members are a fraud. Production quotas for each member of OPEC are dependent upon their oil reserve amount. When this was instituted in the early 1980s, shockingly OPEC countries miraculously added nearly 300 billion barrels to proven reserves in a six year period with NO NEW DISCOVERIES of oil. The chart below shows the unexplained jumps in reserves in red. Do you honestly believe any self reported number from Iran or Venezuela? Dr. Ali Samsam Bakhtiari, a former senior expert of the National Iranian Oil Company, has estimated that Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates have overstated reserves by a combined 320–390 billion barrels and has said, “As for Iran, the usually accepted official 132 billion barrels is almost one hundred billion over any realistic estimate.”

Using some common sense, someone might ask, “How could Saudi Arabia’s oil reserves remain above 260 million for the last 22 years despite pumping over 60 billion barrels during this time frame, and not making any major new discoveries?” Maybe their statisticians did their training at Goldman Sachs or the Federal Reserve. The monster Saudi oil fields are over 40 years old. They will deplete. Oil is finite. They will not refill abiotically like some crackpots contend. Saudi Arabia’s production peaked in 2005 and it has been unable to reach that level since. The spin sheiks in Riyadh and spin doctors in Washington DC cannot spin oil out of sand. Peak oil is about to choke the American way of life.

Declared reserves of major Opec Producers (billion of barrels)
BP Statistical Review – June 2009
Year Iran Iraq Kuwait Saudi Arabia UAE Venezuela Libya Nigeria
1980 58.3 30.0 67.9 168.0 30.4 19.5 20.3 16.7
1981 57.0 32.0 67.7 167.9 32.2 19.9 22.6 16.5
1982 56.1 59.0 67.2 165.5 32.4 24.9 22.2 16.8
1983 55.3 65.0 67.0 168.8 32.3 25.9 21.8 16.6
1984 58.9 65.0 92.7 171.7 32.5 28.0 21.4 16.7
1985 59.0 65.0 92.5 171.5 33.0 54.5 21.3 16.6
1986 92.9 72.0 94.5 169.7 97.2 55.5 22.8 16.1
1987 92.9 100.0 94.5 169.6 98.1 58.1 22.8 16.0
1988 92.9 100.0 94.5 255.0 98.1 58.5 22.8 16.0
1989 92.9 100.0 97.1 260.1 98.1 59.0 22.8 16.0
1990 92.9 100.0 97.0 260.3 98.1 60.1 22.8 17.1
1991 92.9 100.0 96.5 260.9 98.1 62.6 22.8 20.0
1992 92.9 100.0 96.5 261.2 98.1 63.3 22.8 21.0
1993 92.9 100.0 96.5 261.4 98.1 64.4 22.8 21.0
1994 94.3 100.0 96.5 261.4 98.1 64.9 22.8 21.0
1995 93.7 100.0 96.5 261.5 98.1 66.3 29.5 20.8
1996 92.6 112.0 96.5 261.4 97.8 72.7 29.5 20.8
1997 92.6 112.5 96.5 261.5 97.8 74.9 29.5 20.8
1998 93.7 112.5 96.5 261.5 97.8 76.1 29.5 22.5
1999 93.1 112.5 96.5 262.8 97.8 76.8 29.5 29.0
2000 99.5 112.5 96.5 262.8 97.8 76.8 36.0 29.0
2001 99.1 115.0 96.5 262.7 97.8 77.7 36.0 31.5
2002 130.7 115.0 96.5 262.8 97.8 77.3 36.0 34.3
2003 133.3 115.0 99.0 262.7 97.8 77.2 39.1 35.3
2004 132.7 115.0 101.5 264.3 97.8 79.7 39.1 35.9
2005 137.5 115.0 101.5 264.2 97.8 80.0 41.5 36.2
2006 138.4 115.0 101.5 264.3 97.8 87.3 41.5 36.2
2007 138.2 115.0 101.5 264.2 97.8 99.4 43.7 36.2
2008 137.6 115.0 101.5 264.1 97.8 99.4 43.7 36.2

The denial, accusations and misinformation have already begun. Congressional hearings will be called to blame Big Oil and the dreaded speculators. Americans always need a bogeyman to blame for their mindless decisions and willingness to be led to slaughter by corrupt politicians. Big oil companies do benefit from higher oil prices. Big oil companies spend millions buying off Congressmen. Big oil companies cut corners, ignore safety procedures, and seek profits by any means possible. But, they do not control the oil. Nations control the oil. Many of these nations are led by lying, corrupt, evil despots. That is a fact. Blustering moronic Congressmen going after oil executives and phantom speculators is just a sideshow. It will divert the non-thinking masses from the truth that our leaders haven’t allowed a refinery or nuclear power plant to be built since 1977. These leaders have promoted and subsidized corn based ethanol that requires more energy to produce than it creates and has driven the cost of our food sky high. We are more dependent on foreign oil than any time in our history.

The real speculators are the Americans who clog our highways every morning driving monster SUVs, turbocharged sports cars, gas guzzling minivans, and pickup trucks that make them feel like salt of the earth tough guys despite living in their 6,000 square foot energy sucking McMansions in suburban tracts 30 miles from their jobs, if they have one. The ignorance of the average American car buyer knows no bounds. The recent bounce back in auto sales was led by SUVs and pickups. The green clean cars are nothing but hype and bullshit. GM expects to sell about 10,000 Volts this year, and Nissan expects to sell about 25,000 Leafs in the United States, a piss in the ocean compared with the millions of sport wagons and SUVs purchased by Americans annually. Americans have the attention span of a gnat and are already dazed and confused by the surge in gas prices to $3.50 per gallon.

When oil prices spiked to $147 barrel in 2008, Americans were spending $467 billion per year for fuel. By early 2009, the collapse in energy prices due to the worldwide recession reduced the annual expenditure to $265 billion, freeing up over $200 billion for consumers to spend on other items, pay down debt, or save. Expenditures for fuel had already surged back to $400 billion before the recent spike in oil prices. Next stop $500 billion. That should do wonders for the faux economic recovery that has been touted by Obama and the MSM for the last year. The years of denial, lies, indecision, bad decisions, and inertia have left the country vulnerable and at the mercy of countries in far off lands that despise our way of life.

There are no good outcomes, only bad, really bad, and catastrophic. Take your pick. Could gas prices drop below $3.00 per gallon if the world sinks back into recession? Yes. But it would only be momentary. The easy to access supply is dwindling. The medium and long term direction of gas at the pump is up. There is nothing that can be done in the next five years to prevent significantly higher oil prices. A full court press of realistic ideas like converting our truck fleets to natural gas, a major effort to build nuclear power plants, more drilling, greater use of wind, geothermal, and solar would take at least a decade to have an impact. There is no consensus or resolve to undertake such an effort. Therefore, Americans will suffer the consequences. Be a good American and take advantage of GM’s no interest for 7 years deal on their biggest baddest SUVs and buy two. What could go wrong?