Dont Look to Banks To Solve The Problems In The Economy

Not much effort being made to solve problems in economy, money borrowing causes servitude to banks, Fed policies weaken sovereign nations, millions to lose their home this year, insolvency becoming a national problem, Goldman Sachs faces civil charges, maybe more, banks not helping homeowners in crisis, spying on email.

One of the reasons for less bank lending is the almost non-existent market for securitized bonds. Investors have so many bad loans on their books that they refuse to commit to further risky investments. This means banks are forced to hold this toxic paper on their books and that inhibits them from lending at higher levels. If the Fed had not purchased $1.7 trillion of this toxic junk many banks would currently be in bankruptcy. Thus, there still are trillions in these bad loans on the books of many financial institutions and they cannot be sold and they are clogging up the system, and there is no end in sight for the problem.

At the same time there is no effort to reduce federal debt, because if government does so it will absorb more funds needed for investment and to fund newly occurring debt. This reduces money supply and further crowds out business investment. This is truly being in a box with no way out. The Fed has been accommodating via monetization and will have to continue to do so, but the result of that is inflation and perhaps hyperinflation. As you can see this is a never-ending debt trap, and nothing that has been done is permanently solving the problem. Business understands. They are raising as much money as possible at the lowest rates since the 1930s. They may be flush with cash, but can they employ it. Unemployment at 22-1/8% means less buyers for their products. They cannot expand because the demand isn’t there. They cannot invest because they are unsure of recovery and they continue to lay off to cut their biggest cost, labor, and remain profitable. You could call this a vicious circle.

The transfer of fiscal control is passing from the individual to the state in a true corporatist, fascist fashion. These are the same kind of programs that were forced upon the citizens of Italy and Germany in the 1930s. Now you can better understand why the Illuminists in NYC, London and Paris brought Hitler and Mussolini to power and helped finance their rise to power. Part of this plan is to transfer taxpayer revenues into elitist hands, giving them more power over the citizenry. Unfortunately, Americans don’t have a clue to what is being done to them. They do not even know what fascism is. These elitists are so brazen that they are trying to convenience the public that America’s problems are the result of their financial foolishness. In fact, Americans need a forced savings plan to return them to solvency, when in fact the savings are needed by government to fund its burgeoning debt. The world is being forced into austerity. Next comes poverty.

The key to this enforced servitude is the borrowing of money, which enriches the lender, usually private banks, that in the fractional banking system creates money. Historically it is averaged about 9 to 1. Nine dollars are created for every one-dollar on deposit. In fact currently that figure is 40 to 1, as a result of imprudent lending over the past several years. Government also increases money supply by creating deficits and borrowing money to do so. The government borrows and you get to pay the interest and to repay the debt. Currently money is getting more difficult to come by due to the voracious needs of government, which is crowding out other borrowers. The bulk of the money lent by banks has gone into the financial sector leaving very little for individuals and small to medium sized businesses. Government is currently borrowing at very low interest rates. The problem is interest rates are rising. As time goes on the interest on the debt grows more onerous. In this process the privately owned Federal Reserve is buying government debt, usually secretly, so that government can continue to spend more money than it takes in, which is in the form of tax revenues. This is called monetization, because the Fed creates the money it lends out of thin air. The alternative to using the Fed would be to end the Fed and have the Treasury simply create the money. The bankers do not want that because that control of printing of money and credit puts the Fed and banking in control of government. Thus, the Fed is unnecessary. It doesn’t really directly profit from its function; it protects the banks, which own the Fed and allows the Fed to pass inside information to its fellow elitists, who profit from this information in a major way. The Fed and its friends have a license to steal. This is why the Fed should cease to function and their duties taken over by the US Treasury, a job it was mandated to do by our Constitution.

If the Fed is not disbanded it will be part of a move to world control banking that will rob all countries of their sovereignty. Once in place these financial mavens will form a World Government and dictate to the world. This is why Ron Paul’s legislation HR-1207 is so important to the future of America. It will expose what the Fed is really up too. That discovery would lead to the end of the Fed. This November we have a unique opportunity to vote out of office almost all incumbents. That clean slate will give us an opportunity to take back our country. If we are not successful the game is over and Americans will pay a terrible price.

Just to give you an idea of the power and arrogance of the Fed, this past week saw a gain of $421.8 billion of outstanding loans and leases. The Fed is secret so they do not have to tell us what is going on. Who received the loans and leases and what was the collateral received for such loans? Our suspicion is that Greece is being bailed out by the Fed or institutions in Europe holding Greek debt are being bailed out. This is the sort of thing that has to be stopped. We know the Fed posts their financials, but many things the Fed is involved in are not posted. We still await an execution of an appeal judgment by the Federal District Court regarding who received $112.4 billion in loans directed secretly through AIG and what collateral was received against such loans. The Fed still refuses to respond.

The Fed and the Treasury are well aware that America is bankrupt and the only way it can continue to function is via the Fed’s ability to create endless amounts of money and credit. That is why credit spreads are at records. As of late this year an additional $420 billion in additional interest expense will be added for this year and every other year, plus we are facing another $1.8 trillion deficit. Worse yet, the official projection is for an additional $1 trillion deficit annually for the next ten years. Presently, as a result of policies of the Treasury and the Fed, real inflation is 8%, not the official number of 2.5% to 3%. All these parties, which include Wall Street, have no intention of allowing the reduction of spending and government.

As a result of wanton lending by the Fed into the banking system we are facing, by the end of 2010, an inventory of homes for sale of a 3-year supply, when that number officially, currently is 8.6-months, when normal is 4-months. Housing is still in a bubble. Five to seven million families will lose their homes this year. Even now there is a supply of expensive homes that reaches out five years. Those mortgages containing CDOs, ABSs and MBS held by lenders, the Fed and the FDIC are near worthless. Half the banks in America face insolvency. Of 750,000 mortgage holders under trial modification only about 30,000 have been converted to permanent payment changes. Thee are millions of homeowners who have not made a payment for a year or two ready to come out of the pipeline. The government has been holding prices up three years disregarding the huge distortions they had created in the market. This was done not for the benefit of the homeowners, but to bail out the lenders. They left people in their homes for two years and they paid nothing to stay there. These are mostly people who should have never had a home in the first place. Not only will millions of homeowners be on the street, but lenders books will be flooded with assets worth far less then they are carrying them at. Those homes are about to fall again in value. Instead of cleaning up the books over the last few years management has been busy serving up bonuses for themselves.

The result of the foregoing will be 2,800 banks going under. As we told you before the FDIC won’t be able to handle the depositor’s financial demands. The TARP Oversight Committee says it has been stonewalled by the Fed. As a result only the banks and the Fed know what is really going on. How will banks raise money to offset lending losses? Will government allow them to stay in business in a bankrupt state and merge them? Of course they’ll continue to function, but FDIC insurance will end. The toxic assets will still be there for what is left of the solvent middle class to pay for.

The Natural Bureau of Economic Research says the recession is not over. We believe that the consumer’s lack of income and the absence of credit growth needed for a recovery is absent. Inflation is 8% and wages are falling at a 3% level.

The jobless numbers are again worsening and without major stimulus they will get worse. The raw unadjusted numbers total 514,742 and increase of 99,730 week-on-week. Extended claims jumped 261,817 to 5,555,301. These are the people on the 2-1/2 year jobless payroll.

The Commercial Paper market fell for the 5th week in a row off $15.4 billion to $1.074 trillion. Asset backed paper rose by $200 million after falling by $7.2 billion the prior week.

The NAHB/Wells Fargo Housing Market Index rose 4 points to 19. What can they be thinking of?

RealtyTrac says foreclosures rose 7% y-o-y in the first quarter. Foreclosures were 367 in March, up 19% m-o-m. The highest rates were in Nevada, Arizona and Florida. By totals, California, Florida and Arizona led the pack.

Goldman Sachs director Rajat Gupta may have given inside information about Goldman to Galleon Group hedge fund founder Raj Rajaratnam says prosecutors.

Consumer confidence figures from ABC News showed the weekly consumer confidence index fell to minus 47 from minus 43. Worse yet, 8% of those polled rated the national economy as excellent or good while 92% rated it good or even poor, 25% said it was a good time to buy while 75% said it isn’t.

The Securities and Exchange Commission on Friday charged Goldman Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product related to subprime mortgages.

The SEC alleged in a lawsuit that Goldman (GS 161.60, -22.67, -12.30%) structured and marketed a collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities. However, it failed to disclose the role that a major hedge fund, Paulson & Co., played in the portfolio selection process as well as the fact that the hedge fund had taken a short position against the CDO.

“Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party,” said Robert Khuzami, director of the division of enforcement, in a statement.

Business Inventories have increased at a 0.5% pace in February, following a flat performance in January, although they dropped 7.7% in year of year terms, according to data released by the US Census Bureau.

The combined value of distributive trade sales and manufacturers’ shipments have posted a 0.3% increment in February, while they fell at a 6.8% pace from February 2009.

The inventory to sales ratio, the amount of time needed to empty inventories at the current sales rate, has dropped to 1.27 months in February from 1.46 months in February last year

Retail sales grew 1.6% in March, up from a 0.5% increase in February. This jump betters market predictions of a more modest rise of 1.0%.

US retail sales ex-autos increased 0.6% in March compared to a 0.8% boost in February. March’s result also exceeds analysts’ predictions of a greater slowdown to reach a growth rate of 0.4%.

JPMorgan Chase & Co., the second- biggest U.S. bank by assets, beat analysts’ estimates as first- quarter earnings rose 55 percent on record fixed-income trading revenue and a reduction in provisions for credit losses.

Net income climbed to $3.33 billion, or 74 cents a share, from $2.14 billion, or 40 cents, in the same period a year earlier and from $3.28 billion in the fourth quarter, the New York-based bank said today in a statement. The per-share earnings compared with a 64-cent average estimate of 21 analysts surveyed by Bloomberg. (Courtesy of the US tax payer).

Morgan Stanley, which once ran the biggest property-investment arm among Wall Street banks, expects to lose $5.4 billion, or 61 percent, of its $8.8 billion global fund from 2007, said a person familiar with the situation.

The firm sent a fourth-quarter update to investors in recent weeks showing the fund was likely to recover $3.4 billion of the investment, said the person, who declined to be identified because the information wasn’t public. A spokesman for New York-based Morgan Stanley declined to comment.

The mortgage chief of the United States’ second largest bank was mobbed by angry borrowers on Tuesday after he invited customers to speak to him if they feared foreclosure of their homes.

The JPMorgan Chase & Co executive was at a congressional hearing in Washington when a lawmaker asked him who mortgage borrowers could turn to if they felt his bank’s employees were not helping them hold onto their homes.

“Come to me,” said David Lowman, chief executive for JPMorgan Chase & Co’s home mortgage business in response to the question from Massachusetts Democrat Barney Frank.

Minutes later, around 50 borrowers burst from the audience and presented Lowman with a 6-page document alleging his bank reneged on a pledge to help struggling homeowners.

The activist who organized the protest said Lowman did not want to talk and left the hearing.

“He ran. He ran like a dog with its tail between his legs,” said Bruce Marks of the Neighborhood Assistance Corporation of America (NACA), which helps homeowners avoid foreclosure. “He was scared to death because he doesn’t really want to talk to homeowners.”

The incident is symptomatic of frustrations among U.S. homeowners as defaults and foreclosure filings dominate the housing sector more than three years after the property bubble began to deflate.

NACA organizes events where borrowers try to get loan modifications with lenders. The group says JPMorgan signed up to the NACA program but dropped out in December.

A JPMorgan spokesman declined to comment on the complaint.

(Reporting by Corbett Daly, additional reporting by Al Yoon; writing by Andrew Hay)

The cost of living in the U.S. rose in March, while prices excluding food and energy were unexpectedly unchanged, indicating tame inflation is accompanying the economic recovery.

The 0.1 percent gain in the consumer price index was in line with expectations and followed no change in February, the Labor Department reported today in Washington. Excluding food and fuel, the so-called core rate held steady after rising 0.1 percent in February, reflecting cheaper rents and clothing.

Lehman Brothers Holdings Inc. may have grounds to sue Goldman Sachs Group Inc. and Barclays Plc after they demanded $1.2 billion in additional margin to assume trading positions auctioned by a Chicago exchange, bankruptcy examiner Anton Valukas said.

Goldman Sachs was the high bidder for Lehman’s equity derivatives at options and futures exchange CME Group Inc., and took $445 million of those assets at a private auction in September 2008, according to previously censored details of Valukas’s March 11 report. Barclays was the high bidder for Lehman’s energy derivatives and took $707 million in assets from CME.

DRW Trading was the highest bidder for Lehman’s foreign exchange, agricultural and interest-rate derivatives, Valukas said. The transfer of $2 billion in Lehman deposits for its proprietary trades at the CME cost the defunct investment bank $1.2 billion, Valukas said, adding that CME also may be sued.

“The examiner concludes that an argument can be made that the transfers at issue were fraudulent transfers,” Valukas said in the report, released in its unredacted form yesterday. Under bankruptcy law, Lehman may be able to undo the auction, he said.

Part of Valukas’s job was to explore Lehman’s grounds for suing companies that contributed to, or benefitted unfairly from, the demise of the investment bank and its affiliates including the brokerage Lehman Brothers Inc., and to say which kinds of lawsuits are most likely to succeed and what the possible defenses are.

Yahoo is heading for a legal battle with the US government over the monitoring of email accounts.

The company is involved in a federal court case in which the government is demanding access to email archives which include messages that the account owner has already read.

Yahoo argues that the messages fall under the protection of the US Stored Communications Act, which requires law enforcement groups to obtain a search warrant before accessing electronic data archives.

The government contends that the data should not fall under protections because the messages have already been read.

The case could have significant ramifications for the industry in terms of government access to private electronic data, and Yahoo has received backing from several organisations.

A coalition ranging from traditional advocacy groups the Electronic Frontier Foundation (EFF) and the Center for Democracy in Technology, to Yahoo’s long-time rival Google, is lobbying the court to uphold Yahoo’s right to protect the data.

“This court must protect the user’s privacy in these emails by requiring the government to seek and obtain a search warrant based on probable cause,” the groups said in a court filing.

The EFF argued that the government is attempting to find a workaround to constitutional protections that have long limited law enforcement’s ability to conduct search and seizure.

“Just as your postal letters and packages are private even though the carrier could open them, so your email and other information is protected even if it is stored on a third party’s server,” said EFF civil liberties director Jennifer Granick.

Not everyone in the current majority party is satisfied with how House Democrats are handling the budget. On Tuesday, Senate Budget Committee Chairman Kent Conrad, North Dakota Democrat, said, “I think it is very important to have a budget blueprint to outline priorities where the country is going to spend its money, how we’re going to bring the deficit down.”

House Majority Leader Steny H. Hoyer, Maryland Democrat, justifies not passing a budget resolution. He claims Democratic inaction is the fault of “deep debt” caused by the George W. Bush administration. This business of blaming President Bush for today’s deficit crisis doesn’t work 15 months into the Obama presidency. Mr. Obama’s $862 billion stimulus package and more than $400 billion supplemental spending bill had more than a little to do with the 2009 budget deficit of $1.4 trillion. Mr. Obama’s planned 2010 budget deficit is expected to surpass this record and hit $1.6 trillion. By comparison, all of Mr. Bush’s deficits from 2002 to 2008 – giving him no credit for the 2001 surplus – produced a combined deficit of $2.1 trillion.

The November elections are seven long months away. The skyrocketing deficit cannot be hidden under a barrel that long. But out of desperation to spare themselves embarrassment at the polls, Democrats are avoiding a vote on the budget resolution to stall bad news. Although politically expedient, this lack of leadership will make deficits larger in the future.

A Goldman Sachs director, Rajat Gupta, is now under investigation for passing inside info to Galleon head Raj Rajaratnam, says the WSJ.

Gupta is also a board member of Procter & Gamble and American Airlines parent, AMR. He is the ex-head of consulting firm McKinsey & Co.

There may not be anything here other than that Gupta and Raj were good buddies and Raj was frantically trading Goldman stock during the financial crisis. (Though that in itself is something.)

But the mere suggestion that Gupta passed confidential information to Raj about Goldman Sachs would be devastating to Gupta’s reputation.

Goldman’s name emerged in a government letter listing companies whose trading, by Mr. Rajaratnam and others in the Galleon case, the U.S. is investigating. The March 22 letter said the government is scrutinizing trades by Mr. Rajaratnam and others in Goldman Sachs from June 2008 through October 2008, a time when Goldman shares gyrated amid the bankruptcy of Lehman Brothers Holdings and concerns about the future of all major investment banks.

As part of that focus, the government is examining whether Rajat Gupta—a current Goldman director, former head of McKinsey & Co. and close associate of Mr. Rajaratnam’s—shared inside information about Goldman, the people close to the situation say.

No criminal charges or other allegations have been filed against Mr. Gupta, nor is there any indication that investigators are looking at his own stock trading. A spokesman for Mr. Gupta said, “Mr. Gupta is unaware of any examination of any such issue and has done nothing wrong.”…

Messrs. Rajaratnam and Gupta spoke frequently, and Mr. Gupta was invited to attend parties hosted by Galleon, an individual close to the situation says.

Source: Bob Chapman The International Forecatser, April 17 2010


Banks Fight to keep Crisis Loans Secret: Fed Shouldn’t Reveal Crisis Loans, Banks Vow to Tell High Court

April 14 (Bloomberg) — The biggest U.S. commercial banks will take their fight against disclosure of Federal Reserve lending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said.

Continued legal appeals will delay or block the first public look at details of the central bank’s $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.

The U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help.

“Our member banks are very concerned about real-time disclosure of information that could cause a run on the banks,” said Paul Saltzman, the group’s general counsel, in an interview yesterday. “We’re not going to let the Second Circuit opinion stand without seeking a review.”

Regardless of whether the Fed appeals, the Clearing House will take the next legal step by asking for a review by the full appellate court, Saltzman, 49, said at his office in New York. If the ruling is unfavorable, the bank group will petition the Supreme Court, he said.

Joined Lawsuit

The 157-year-old, New York-based Clearing House Payments Co., which processes transactions among banks, is owned by its 20 members. They include Citigroup Inc., Bank of New York Mellon Corp., Deutsche Bank AG, HSBC Holdings Plc, PNC Financial Services Group Inc., UBS AG, U.S. Bancorp and Wells Fargo & Co.

The Clearing House Association, a lobbying group with the same members, joined the lawsuit in September 2009, after an initial ruling against the central bank in federal court in Manhattan.

The Fed is “reviewing the decision and considering our options,” said Fed spokesman David Skidmore in Washington. He had no comment on Saltzman’s plans.

Attorneys face a May 3 deadline to file their appeals.

“We’ll wait to see the motion papers,” said Thomas Golden, attorney for Bloomberg who is a partner at New York- based Willkie Farr & Gallagher LLP. “The judges’ decision was well-reasoned, and we doubt further appeals will yield a different result.”

Bloomberg sued in November 2008 under the U.S. Freedom of Information Act, after the Fed denied access to records of four Fed lending programs and a loan the central bank made in connection with New York-based JPMorgan Chase’s acquisition of Bear Stearns Cos. in March 2008.

231 Pages

The central bank contends that 231 pages of daily reports summarizing lending activity, which were prepared by the Federal Reserve Bank of New York for the Fed Board of Governors in Washington, aren’t covered by the FOIA. The statute obliges federal agencies to make government documents available to the press and the public. The suit doesn’t seek money damages.

The Fed released lists on March 31 of assets it acquired in the 2008 bailout of Bear Stearns.

The New York Times Co., the Associated Press and Dow Jones & Co., publisher of the Wall Street Journal, are among media companies that have signed up as friends of the court in support of Bloomberg.

The Fed Board of Governors’ “refusal to disclose the names of borrowers renders public oversight of its actions impossible — it prevents any assessment of the effectiveness of the Board’s actions and conceals any collusion, corruption, fraud or abuse that might have occurred,” the news organizations said in a letter to the appeals panel.

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).

To contact the reporter on this story: Bob Ivry in New York at

Geithner In Beijing: The Dangers of Exporting The Depression

Webster G. Tarpley
April 7, 2010

Treasury Secretary Geithner is on his way to Beijing, where he will meet with Chinese Vice Prime Minister Wang. The trip is in relation to US demands for a massive up valuation of the Chinese currency, the renminbi or yuan. This announcement has unleashed much gloating at the Associated Press and other pro-Wall Street news outlets, so it is important to issue a caveat at the very beginning: trips do not equal agreements. Obama made a personal visit to Afghanistan last month, and bilateral US relations with that country have been deteriorating in an alarming way ever since.

The question of the Chinese currency is this: for about 20 months, since about the beginning of the world economic depression in the late summer of 2008, China has been maintaining a peg or approximately fixed parity in relation to the dollar at a rate of about 6.8 renminbi per US greenback. Before that, the renminbi had been allowed to rise by about 21% between 2005 and 2008, largely in response to US pressure. The relatively fixed parity between the dollar and the renminbi has been an element of stability in a generally chaotic panorama of floating rates which characterizes the wreckage of the Bretton Woods system, which was demolished by Nixon and Kissinger almost four decades ago. Fixed parities among currencies promote world trade, because they allow exporters and importers to accurately anticipate the value of trade deals that take 6, 12 or 24 months to come to fruition. A rational US policy would be to maintain a negotiated fixed parity with China, and then invite the Japanese yen, the Russian ruble, the euro, and the Latin American regional currency to join such a system of fixed parities. This would amount to restoring one of the positive features of the 1944-1971 Bretton Woods system, which produced the highest rates of economic growth in human history before or since. Instead, the Wall Street puppets of the Obama administration are determined to destroy one of the few areas of stability which still persist.

The policy which Obama and Geithner are attempting to pursue is one of competitive devaluation of the US dollar. This is the policy of exporting the world economic depression towards China, which has been less hard hit so far than the Anglo-Saxon derivatives paradises of the US and the UK. This is a beggar my neighbor policy broadly similar to the one pursued by the British between 1931 and the outbreak of World War II. The US is demanding an upvaluation of the renminbi by something between 20 and 40%. This is another way of saying that the US wants to devalue or n value the US dollar by the same 20 to 40%. The idea is that Chinese products will then become more expensive on the US market, helping to reduce the astronomical merchandise trade deficit and balance of payments deficit which the US is suffering. It is a crackpot scheme.

The US Treasury under Geithner has been threatening to use a report on currency issues which is scheduled to be released on April 15 as a forum in which to brand China as a currency manipulator, opening the door to various kinds of punitive measures against Beijing being prepared by Democratic and Republican demagogues in the U.S. Congress in the context of the current congressional election season. That report may have been postponed, but the implicit blackmail remains on the table.

Every country has an inalienable sovereign right to manage its currency anyway it wants to. In response to the US demands, two factions have become visible in China. On the one hand are the elitists and globalists, whose spokesman on this issue is Governor Zhou of the central bank, who argues that a stronger renminbi will allow Chinese who already have money to buy more and consume more. This argument plays to the interests of the affluent elites in the coastal regions where this faction is based. On the other hand, the populist faction argues through Commerce Minister Chen that Chinese export firms are currently surviving on paper-thin profit margins, and that any appreciation of the renminbi will begin to put these companies out of business, causing unemployment and severe social dislocations. This argument seems to be supported by the Finance Ministry and the National Development and Reform Commission.

The Chinese rightly fear that increased unemployment will lead to widespread labor unrest, giving the Anglo-Americans the chance to run destabilization campaigns against China from the inside. At the same time, the Chinese leaders have an exaggerated fear of losing face if they are branded as currency manipulators. They can also see that many in the U.S. Congress would like to blame China for the Depression and take retaliatory measures.

Geithner has already proven in practice that he is incapable of seeing a large-scale panic bearing down on him until it is much too late. He should be careful what he wishes for. In reality, the Chinese peg represents an important support for the increasingly labile US currency. This is because of the way the peg works in practice, i.e. through the Chinese buying dollars and buying U.S. Treasury paper on international markets even on days when few others have been willing to do so. In some ways the peg amounts to a concerted support operation for the US dollar by the Chinese central bank. If there is no peg, China will buy less and less Treasury paper, and a key prop for the greenback will have disappeared.

This is the great danger of the US plan for exporting the Depression to China. Over the decades, Paul Volcker has spoken occasionally about his greatest nightmare, which was that of a dollar slide which, once it had began, would become almost impossible to stop because of the inherent weakness of the US currency. This is the kind of mud slide of the dollar which could easily emerge if the Chinese peg is abandoned or even attenuated. This is something that will make the Depression worse for everybody.

Chinese sources indicate that a likely outcome of the current controversy is that China may increase the value of the renminbi by 3% to 4% over the next year as a way to avoid more overt clashes with the United States, especially in the context of the US election. But, as Chen points out, even 3% to 4% in appreciation for the Chinese currency will deliver a death blow to a whole population of Chinese exporters, and the fundamental US goal of exporting some of the Depression into China will have been attained.

There is no way out of these dilemmas for the Chinese unless and until they abandon their policy of orienting towards production for the US consumer market, a policy which has been combined with the very unwise accumulation of between $1 and $2 trillion worth of US Treasury paper. It is folly for a developing country like China to hold such large reserves of an unstable foreign currency. If the Chinese simply hold these Treasury bonds, they are very likely to depreciate significantly in value. If they try to dump them, their value will crash overnight in a general dissent of the world into panic and chaos. One important way to utilize these currency reserves would be to spend in an orderly way by purchasing capital goods and infrastructure either from the United States or on the world market more generally for the intensive development of the rural and less developed areas of China. One obvious need would be the purchase of thousands of modern hospitals to increase public health in precisely these areas. Other areas of hard infrastructure and soft infrastructure could also be developed.

The Chinese currency reserves could also be used internationally. The Chinese have been intensely focused on Africa as a source of raw materials for their future growth. Beijing would therefore be well advised to solidify its position in Africa by launching an ambitious Marshall Plan for that continent in the form of comprehensive infrastructural, agricultural, and industrial development. This could involve the creation of a Sino-African Development Bank from which many states could benefit. In effect, the Chinese could offer the Africans an alternative to the hated and discredited policies of the International Monetary Fund and the World Bank, which could not survive a competitor that would respect national sovereignty and offer the Africans equitable terms.

The result would be a new African market for Chinese exports, mainly in the area of modern capital goods. Until this is done, the Chinese will have a very hard time escaping their excessive reliance on the US consumer market and U.S. Treasury paper.

As for Geithner, he had better come home and start working on his federal income tax return due April 15, since we know how much trouble he has had with paying his taxes in the recent past.

U.K A Very Good Day For Burying Bad News

A very good day for burying bad news

Posted: 07 Apr 2010 01:11 AM PDT

Whilst the rest of us were yesterday marking that benchmark moment in our democracy when an election is called, the House of Lords was the scene of an awful climax to their Lordships’ expenses scandal.

78-year-old Lord Clarke of Hampstead was being flogged at the yard arm. Hard to know whether to feel sorry or angry for Clarke, a former postman and trades unionist.

Once an election is called, journalists go into overdrive. It’s a genuinely exciting time – a voyage into the unknown whose ending will affect all our lives.

Hence it was not until I crawled into bed at 11.43pm last night and turned on Today in Parliament, that by chance I heard the miserable peer quite literally reduced to tears as he was forced to make a public and grovelling apology for over-claiming his expenses.

According to The Sunday Times, he had claimed some £18,000 a year for overnight stays in London when in fact he had driven home to St Albans – an hour away. It was a horrible sound, this poor old man – taken to the pinnacle of his powers in his sixties as Chairman of the Labour Party – was reduced to scattering his dignity all over the floor of the House.

And yet what he did, he has told  The Times newspaper, was a consequence itself of ‘peer pressure’.

“I got the impression that if I didn’t do what people did, it could bring a bad light on someone else”, he told the paper last year.

The police and the CPS had the decency not to prosecute Clarke, for ‘lack of evidence’. That in itself represents a damning indictment of the entire Lords’ expenses system.

There was, quite simply no paper trail, because Lords expenses were quite simply un-receipted. There was, it seems, a help yourself to the taxpayers’ till attitude. At least a dozen peers have been identified as having charged – not the £18,000 a year that Clarke charged, but hundreds of thousands of pounds a year for years. Nothing will happen to them either.

The Lords Speaker Lady Hayman, herself listed as having charged for an out of town home as her place of residence whilst retaining another in London, has presided over a decision to regard visiting a home once a month, as enough proof of primary residence for expenses claims.

But no other peer has had to do what was demanded of Clarke. He’s the first peer to have to publicly confess. To hear a 78-year-old cry in the hallowed confines of the House of Lords is bad enough. Will he be the last?

Can it really be that after the abuse of a system that has cost tax payers millions of pounds, just one old man is to pay with his dignity? A good day for burying bad news?

Source: Snowblogs

Economy Kept On Life Support While Global Governance Is Organized

Neithercorp Press – , 03/10/2010
By Giordano Bruno

Herbert West: Re-Animator

Winter is slowly melting away here in the U.S., and Spring will soon be upon us.  Wall Street is currently flush with delight at the year long run of the stock market (driven by fiat bailouts), which at first glance appears to be doing quite well, though international incidences such as those in Dubai and Greece have revealed how shaky the market actually is in the face of any unhealthy news.  In the meantime, the dollar, recently on the edge of detrimental value loss, has made a semi-miraculous recovery in the span of a few months, especially as the Euro suffers.  Official employment numbers, despite the continuous loss of jobs monthly, have somehow fallen and are for the moment stabilized.  Is it time for America to dust off the old credit cards and return to the wild and rollicking carefree spending days of pre-2007?  Perhaps not…

While the mainstream media puts on the recovery song and dance, the fundamental problems of the collapse remain the same, and in some cases are growing ever more precarious.  Subsections of the public, unaware of the real issues at hand, are holding a misguided jubilee in the tranquil eye of a hurricane, wrongly assuming that the storm has passed.

The world is breathing a hasty sigh of relief at the beginning of 2010, but what are the facts behind the current “peaceful” economic moment?  In this article, we will examine whether or not the good news is legitimate, or, if are we being lulled into a false sense of security…

Job Market Statistics Manipulated

At the beginning of the year, official unemployment stood at around 10%.  This number of course does not include those people who are off unemployment benefits and still have not found jobs, or those people who are underemployed.  The Labor Department then announced their intention to revise their “birth/death ratio” method of calculating job loss, which would supposedly add a whopping 800,000 lost jobs to their books that were hidden before:

Directly after this news was released, markets braced for a substantial increase in the unemployment percentage.  Yet, by some act of magic, the unemployment percentage fell to 9.7%!

How is this possible?  Well, those of us who were hoping for greater Labor Department transparency (including myself) should have known better.  With the Labor Department, two-plus-two NEVER equals four…

As the EPI article above indicates, while the government has reportedly changed their dubious “birth/death ratio” method, they also at the same time changed their “home survey” method.  This survey is meant to give the Labor Department an overall view of unemployment percentages, but now the government has sharply reduced the number of households they actually survey, making the results more volatile and easier to manipulate.  This why even though nearly a million jobless people were added to the unemployment rolls, the government was still able to report a drop in unemployment percentages.  Sound like a dirty trick?  Yes, it is…

According to the EPI’s estimates, which are probably still conservative, over 11 million jobs would need to be created in order to bring employment rates to pre-2007 levels.  This is called the “jobs gap.”  To fill the jobs gap by 2013 (which is about the time frame that the government has suggested it would take for a full recovery) the U.S. would need to generate over 400,000 jobs a month for the next three years!  As I think most of you can see, this is not going to happen.  Last month according to official numbers the U.S. lost another 36,000 jobs.  Jobs are not being created, and will not be created anywhere near the 400,000 a month mark required for a three year recovery.

Also not often reported is the span of weeks at which those who are unemployed have to wait until they find another job.  This “lag time” in-between jobs has grown markedly higher in recent months as the chart below shows:


In January of this year alone, 6.3 million people (over half of those unemployed) had been without a job for more than 6 months.  This is an astonishing number, and it shows just how out of touch MSM reports of recovery are.  Anyone who has been unemployed for more than just one month knows how tense and uncertain such a situation makes life.  Imagine the misery of a 6 month hiatus from steady work, not able to fully support ones self and not knowing when you’ll be able to again.  The Labor Department, nor the media, seems to take the factor of ‘duration’ into account when considering whether employment is actually in recovery.  Nor do they take into account the fact that most of the jobs lost over the past two years were high paying and specialized, while most of the scant few jobs created have been low paying service sector positions.

What is most frightening about this information is that it reveals deliberate mishandling of statistics.  Instead of being more open about unemployment numbers, the government is moving to hide them further.  But why would they escalate secrecy on the economy?

The Day The Dollar Died

Last week, Li Ruogu, chairman of Export-Import Bank of China, a lender tasked with supporting the country’s foreign investments, stated that China would continue to support the dollar and that reports of a break from U.S. treasuries were “absolute nonsense.”  Investors in treasuries this week seemed to take the comment as a good sign that the dollar’s place as world reserve currency is assured.  However, one might ask why it was suddenly so important for China to comfort treasury markets?

Interestingly, statements of China’s “affection” for the dollar have come right after their central bank decided to dump $34 billion in U.S. treasuries.  Along with other nations, the U.S. suffered the worst one month treasury dump on record so far at $53 billion:

This follows a treasury dump last year by China of $25 billion, after which we predicted that such dumps would occur more frequently and in larger amounts.  Apparently, we were right:

Initially, it was reported after their latest dumping of U.S. bonds that China had lost its position as the number one investor in U.S. debt, placing Japan in the top spot.  Strangely, only days later this report was rescinded after the Treasury released a statement claiming that China did indeed dump $34 billion in bonds, but, they were still the number one investor in T-bills:

How is this possible?  According to the Treasury, they “forgot” to include Chinese treasury holdings in third markets such as Hong Kong and Britain.  This is very strange.  Who holds these extra bonds and what are they doing sitting in foreign venues?  Is it not convenient that these bonds appeared from thin air just as news of China’s treasury dump was hitting the bond market?  And now we suddenly have a Chinese finance official attempting to reassure the world that China still wants T-bonds while at the same time they are trying to get rid of them?  If this behavior seems confusing it is because this is what occurs when governments lie big; no matter how good they are at it, they can’t make the facts add up.

If one examines Treasury Auctions month-to-month, they would find that “Primary Buyers” of treasuries (who have to buy treasuries when no one else is buying) now dominate auction sales.  Indirect buyers, who cannot be tracked, also make up a large portion of competitive bids on treasury bonds.  It is suspected that most of these indirect buys are made by the Federal Reserve itself in order to prop up the dollar.  The article below explains the process succinctly:

The bottom line is that foreign governments are NOT buying treasuries at volumes necessary to keep the U.S. afloat amidst its ever climbing national debt, and in some cases, they are now trying to quietly and gradually dump what they have so as to not arouse immediate suspicion from the markets.  In fact, the Treasury and the Federal Reserve seem to be helping them do this!

The dollar is, in effect, dead, but disinformation and market manipulation, mainly by the private Federal Reserve, is being used to reanimate it for appearances.  The result is the conjuring of a kind of “zombie currency,” a Weekend at Bernie’s currency that the Fed props up with strings and pulleys to fool everyone at the party.

The most obvious question here is, why go through so much trouble to keep the dollar around at all?

World Government And The SDR

Since the “Great Recession” began, economic forums and conferences such as the G20, and the annual World Economic Forum (WEF) in Davos, Switzerland have spoken of little else except the formation of a centralized world economy and the establishment of a legal body that has the power to run it.  At the Davos “workshops,” economists and others present ideas for world governance as if they were the originators of the concept.  It may not be surprising to most of us that there is rarely if ever anyone who participates in the WEF meetings that supports the restoration of national sovereignty.  In fact, nearly all the participants seem to assume that a world government is the solution to all our ills.  It is also important that like the G20, government officials from all over the world attend, including those from the U.S., and that very often the policies developed at these forums end up in legislation and mass media here at home.  Meaning, the laws and propaganda supporting forced globalization and world government are fine tuned at the meetings and then brought to America for mass consumption.  Below are a couple video examples of Davos workshops:

It is important to recognize what exactly is being presented in these two videos because they reveal much about our current economic circumstances.  The goal of the G20 and the WEF, as they have stated on numerous occasions, is to dissolve national sovereignty.  If they had their way, America as we know it would not exist, along with the Constitutional framework that is meant to protect our liberties.  To achieve this end, a carefully engineered breakdown of the U.S. dollar is being enacted.

As we have shown, U.S. treasuries auctions have tanked and those long term treasuries already held by foreign nations are being slowly cast off.  So far, the Federal Reserve has propped up the dollar by purchasing T-bonds in the place of foreign banks who no longer want them.  By continually monetizing this debt, the Fed will inflate an incredible bubble in the treasury market.  When will this bubble burst?  The key lay in the rules governing Special Drawing Rights.

Special Drawing Rights (SDRs) are securities much like treasury bonds.  Their value is determined by a basket of international currencies including the Dollar, the Euro, the Yen, and the Pound Sterling.  The IMF claims that SDRs are not technically considered currency, but SDRs serve nearly all the functions of a currency except that they are not available to the general public (yet).  It walks like a duck, and quacks like a duck, but the IMF would rather not call it a duck.  In the end, the SDR is a world reserve currency, and its purpose is to topple the dollar.

Not long after the economic meltdown began, the IMF announced that they would begin the unlimited printing of SDRs.  In 2009, within the span of a few months, SDR circulation went from $21 billion, to nearly $204 billion, and this is only the amount they have admitted to:

Governments across the world have purchased SDRs, while at the same time dropping U.S. treasuries.  China in particular has shown sharp interest in the SDR as a replacement for the U.S. dollar:

It may be prudent to mention that China’s heightened dumping of U.S. treasuries began right around the time that the IMF began mass printing SDRs.  And, even more disconcerting, the U.S. Treasury also quintupled its supply of SDRs in August of 2009:

Being that the U.S. dollar is supposedly the undisputed world reserve currency, why would the U.S. Treasury have any need to buy SDRs at all?  Would this not be redundant?  Unless, the Treasury knows that the dollar will not remain the world reserve currency for much longer….

Now we get to the tricky part…

The IMF has instituted new rules governing the SDR and those countries who trade it (called “member countries”).  Drafting the “Fourth Amendment” governing SDR allocation, the IMF now requires member nations to retain a “special allocation” of the currency much higher than previous allocations.  Countries who keep their SDR supply above the required level receive interest payment on their excess.  Countries that fall below the required level have to PAY interest on the shortfall.  That is to say, if the U.S. were to allow its SDR reserves to fall below the level demanded by the IMF, we would be punished monetarily.  Also, under current rules, the interest rates of the currencies that make up the SDR help to determine the interest rates of the SDR.

The IMF claims it only acts as an “intermediary” between countries wishing to trade in SDRs, but since the IMF is the creator and printer of SDR’s, this would ultimately make them the controller of the SDR market, not some outside intermediary.

Participation in the SDR market for now is voluntary.  However, what we are witnessing here is the subtle positioning of the SDR as the only alternative in the event that the U.S. dollar fails, and once again, China is the key.

China’s Slow Dollar Dive

The argument is constantly made by mainstream economists that China could never drop its large supply of U.S. T-bills because if they tried, the dollar would collapse, virtually erasing the value of their dollar holdings.  The suggestion that “they are as dependent on us as we are on them” is rampant in the MSM, but, if we throw in the wild card factor of the SDR, this all changes.

If the Chinese central bank along with certain others amass enough SDRs over an extended period of time while gradually selling off their T-bonds, the SDR’s could act as a cushion to prevent foreign central banks from losing a large portion of their wealth while the dollar sinks.  In fact, in the event that the Federal Reserve raises interest rates on the dollar (perhaps in response to the heightened risk of a mass treasury dump) those holding SDR’s actually benefit, because the interest they receive on their SDR reserves will also go up:

This would not absorb all of China’s losses in the event of a dollar collapse, but it would be a very effective stop gap, and ample incentive for them to continue dumping treasuries.  I believe that this is the exact reason why the dollar and the Dow have been held up by the Federal Reserve for so long.  They cannot allow a major dollar depreciation until the SDR is established on the world market as a ready substitute.

A good sign that this process might accelerate would be in the event that China de-pegs the Yuan from the Dollar and allows it to appreciate in value.  This would signal that China is moving away from the traditional export arrangement with the U.S.  Talks of a Yuan appreciation are already hitting the MSM:

Investors in the U.S. will foolishly cheer a rise in the value of the Yuan, thinking that this will increase American exports to China.  In reality, China will be preparing to dump the last of its U.S. bonds, and begin exports and imports with the new ASEAN trading bloc:…

This new bloc has the potential to surpass profit margins in U.S. markets, especially in the face of extremely weak consumer activity in America.  As the U.S. falters under sovereign debt pressure, China will be in prime standing with a ready supply of SDRs and an organized trading bloc to take up the slack of falling exports to the West.

Shock And Awe

The illusion of U.S. recovery seems to be paramount in the plan for Globalist centralization.  Every scam imaginable has been fashioned to lure the public into a sense of false comfort.  In my original observations on the economic collapse, I believed that we would likely see a “trigger” event in 2010, which would set off a “rolling breakdown” that would not fully climax for a few years.  Now, I am not so sure.  After examining the facts behind the implementation of SDRs as well as the potentially explosive situation in the treasury market, I believe that a “shock and awe” scenario is becoming more probable.  The behavior of the Fed, along with that of the IMF seems to suggest that they are preparing for a focused collapse, peaking within weeks or months instead of years, and the most certain fall of the dollar.

As I think of it now, the advantages of a sudden financial flash flood are numerous.  In a drawn out collapse, the Liberty Movement is given a tremendous time advantage, allowing us to double and redouble our membership while the public opinion of the Federal Reserve and the government in general would deteriorate.  In a sudden breakdown, our time will be cut short, and the public will be distracted and fearful, desperate for an organized authority to offer any semblance of “order.”  A slow collapse allows for the Liberty Movement to work peacefully within the system to build a third party capable of dethroning the current two party farce.  A sudden collapse erases all political activity and opens the door to martial law and illegitimate government.  And finally, a fast moving meltdown leaves a much stronger psychological impression; a catastrophic waking nightmare, instead of a slow grinding depression.  A world government could never be brought about due to the “monotony” of a long slow economic burnout.  Too many factors could present themselves in such an extended period that might interfere with the desired end result.  Too many variables to calculate.  In an abrupt collapse, the Globalists would need only to gage and influence the amount of fear in the populace to a sufficient boiling point then leap in with their intended solution to the problem; centralized global governance.

I feel that in either method, the Central Bankers will fail to reach their ultimate goal, but the prospect of a direct monetary break with limited warning does make the atmosphere much heavier.  One can only prepare as much as possible mentally and emotionally, and keep his eyes wide open…

WAR IS A RACKET – Smedley Butler

About the Author

by Two-Time Congressional Medal of Honor Recipient

Major General Smedley D. Butler – USMC Retired


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.

In the World War [I] a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. That many admitted their huge blood gains in their income tax returns. How many other war millionaires falsified their tax returns no one knows.

How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy? How many of them were wounded or killed in battle?

Out of war nations acquire additional territory, if they are victorious. They just take it. This newly acquired territory promptly is exploited by the few – the selfsame few who wrung dollars out of blood in the war. The general public shoulders the bill.

And what is this bill?

This bill renders a horrible accounting. Newly placed gravestones. Mangled bodies. Shattered minds. Broken hearts and homes. Economic instability. Depression and all its attendant miseries. Back-breaking taxation for generations and generations.

For a great many years, as a soldier, I had a suspicion that war was a racket; not until I retired to civil life did I fully realize it. Now that I see the international war clouds gathering, as they are today, I must face it and speak out.

Again they are choosing sides. France and Russia met and agreed to stand side by side. Italy and Austria hurried to make a similar agreement. Poland and Germany cast sheep’s eyes at each other, forgetting for the nonce [one unique occasion], their dispute over the Polish Corridor.

The assassination of King Alexander of Jugoslavia [Yugoslavia] complicated matters. Jugoslavia and Hungary, long bitter enemies, were almost at each other’s throats. Italy was ready to jump in. But France was waiting. So was Czechoslovakia. All of them are looking ahead to war. Not the people – not those who fight and pay and die – only those who foment wars and remain safely at home to profit.

There are 40,000,000 men under arms in the world today, and our statesmen and diplomats have the temerity to say that war is not in the making.

Hell’s bells! Are these 40,000,000 men being trained to be dancers?

Not in Italy, to be sure. Premier Mussolini knows what they are being trained for. He, at least, is frank enough to speak out. Only the other day, Il Duce in “International Conciliation,” the publication of the Carnegie Endowment for International Peace, said:

“And above all, Fascism, the more it considers and observes the future and the development of humanity quite apart from political considerations of the moment, believes neither in the possibility nor the utility of perpetual peace… War alone brings up to its highest tension all human energy and puts the stamp of nobility upon the people who have the courage to meet it.”

Undoubtedly Mussolini means exactly what he says. His well-trained army, his great fleet of planes, and even his navy are ready for war – anxious for it, apparently. His recent stand at the side of Hungary in the latter’s dispute with Jugoslavia showed that. And the hurried mobilization of his troops on the Austrian border after the assassination of Dollfuss showed it too. There are others in Europe too whose sabre rattling presages war, sooner or later.

Herr Hitler, with his rearming Germany and his constant demands for more and more arms, is an equal if not greater menace to peace. France only recently increased the term of military service for its youth from a year to eighteen months.

Yes, all over, nations are camping in their arms. The mad dogs of Europe are on the loose. In the Orient the maneuvering is more adroit. Back in 1904, when Russia and Japan fought, we kicked out our old friends the Russians and backed Japan. Then our very generous international bankers were financing Japan. Now the trend is to poison us against the Japanese. What does the “open door” policy to China mean to us? Our trade with China is about $90,000,000 a year. Or the Philippine Islands? We have spent about $600,000,000 in the Philippines in thirty-five years and we (our bankers and industrialists and speculators) have private investments there of less than $200,000,000.

Then, to save that China trade of about $90,000,000, or to protect these private investments of less than $200,000,000 in the Philippines, we would be all stirred up to hate Japan and go to war – a war that might well cost us tens of billions of dollars, hundreds of thousands of lives of Americans, and many more hundreds of thousands of physically maimed and mentally unbalanced men.

Of course, for this loss, there would be a compensating profit – fortunes would be made. Millions and billions of dollars would be piled up. By a few. Munitions makers. Bankers. Ship builders. Manufacturers. Meat packers. Speculators. They would fare well.

Yes, they are getting ready for another war. Why shouldn’t they? It pays high dividends.

But what does it profit the men who are killed? What does it profit their mothers and sisters, their wives and their sweethearts? What does it profit their children?

What does it profit anyone except the very few to whom war means huge profits?

Yes, and what does it profit the nation?

Take our own case. Until 1898 we didn’t own a bit of territory outside the mainland of North America. At that time our national debt was a little more than $1,000,000,000. Then we became “internationally minded.” We forgot, or shunted aside, the advice of the Father of our country. We forgot George Washington’s warning about “entangling alliances.” We went to war. We acquired outside territory. At the end of the World War period, as a direct result of our fiddling in international affairs, our national debt had jumped to over $25,000,000,000. Our total favorable trade balance during the twenty-five-year period was about $24,000,000,000. Therefore, on a purely bookkeeping basis, we ran a little behind year for year, and that foreign trade might well have been ours without the wars.

It would have been far cheaper (not to say safer) for the average American who pays the bills to stay out of foreign entanglements. For a very few this racket, like bootlegging and other underworld rackets, brings fancy profits, but the cost of operations is always transferred to the people – who do not profit.


The World War, rather our brief participation in it, has cost the United States some $52,000,000,000. Figure it out. That means $400 to every American man, woman, and child. And we haven’t paid the debt yet. We are paying it, our children will pay it, and our children’s children probably still will be paying the cost of that war.

The normal profits of a business concern in the United States are six, eight, ten, and sometimes twelve percent. But war-time profits – ah! that is another matter – twenty, sixty, one hundred, three hundred, and even eighteen hundred per cent – the sky is the limit. All that traffic will bear. Uncle Sam has the money. Let’s get it.

Of course, it isn’t put that crudely in war time. It is dressed into speeches about patriotism, love of country, and “we must all put our shoulders to the wheel,” but the profits jump and leap and skyrocket – and are safely pocketed. Let’s just take a few examples:

Take our friends the du Ponts, the powder people – didn’t one of them testify before a Senate committee recently that their powder won the war? Or saved the world for democracy? Or something? How did they do in the war? They were a patriotic corporation. Well, the average earnings of the du Ponts for the period 1910 to 1914 were $6,000,000 a year. It wasn’t much, but the du Ponts managed to get along on it. Now let’s look at their average yearly profit during the war years, 1914 to 1918. Fifty-eight million dollars a year profit we find! Nearly ten times that of normal times, and the profits of normal times were pretty good. An increase in profits of more than 950 per cent.

Take one of our little steel companies that patriotically shunted aside the making of rails and girders and bridges to manufacture war materials. Well, their 1910-1914 yearly earnings averaged $6,000,000. Then came the war. And, like loyal citizens, Bethlehem Steel promptly turned to munitions making. Did their profits jump – or did they let Uncle Sam in for a bargain? Well, their 1914-1918 average was $49,000,000 a year!

Or, let’s take United States Steel. The normal earnings during the five-year period prior to the war were $105,000,000 a year. Not bad. Then along came the war and up went the profits. The average yearly profit for the period 1914-1918 was $240,000,000. Not bad.

There you have some of the steel and powder earnings. Let’s look at something else. A little copper, perhaps. That always does well in war times.

Anaconda, for instance. Average yearly earnings during the pre-war years 1910-1914 of $10,000,000. During the war years 1914-1918 profits leaped to $34,000,000 per year.

Or Utah Copper. Average of $5,000,000 per year during the 1910-1914 period. Jumped to an average of $21,000,000 yearly profits for the war period.

Let’s group these five, with three smaller companies. The total yearly average profits of the pre-war period 1910-1914 were $137,480,000. Then along came the war. The average yearly profits for this group skyrocketed to $408,300,000.

A little increase in profits of approximately 200 per cent.

Does war pay? It paid them. But they aren’t the only ones. There are still others. Let’s take leather.

For the three-year period before the war the total profits of Central Leather Company were $3,500,000. That was approximately $1,167,000 a year. Well, in 1916 Central Leather returned a profit of $15,000,000, a small increase of 1,100 per cent. That’s all. The General Chemical Company averaged a profit for the three years before the war of a little over $800,000 a year. Came the war, and the profits jumped to $12,000,000. a leap of 1,400 per cent.

International Nickel Company – and you can’t have a war without nickel – showed an increase in profits from a mere average of $4,000,000 a year to $73,000,000 yearly. Not bad? An increase of more than 1,700 per cent.

American Sugar Refining Company averaged $2,000,000 a year for the three years before the war. In 1916 a profit of $6,000,000 was recorded.

Listen to Senate Document No. 259. The Sixty-Fifth Congress, reporting on corporate earnings and government revenues. Considering the profits of 122 meat packers, 153 cotton manufacturers, 299 garment makers, 49 steel plants, and 340 coal producers during the war. Profits under 25 per cent were exceptional. For instance the coal companies made between 100 per cent and 7,856 per cent on their capital stock during the war. The Chicago packers doubled and tripled their earnings.

And let us not forget the bankers who financed the great war. If anyone had the cream of the profits it was the bankers. Being partnerships rather than incorporated organizations, they do not have to report to stockholders. And their profits were as secret as they were immense. How the bankers made their millions and their billions I do not know, because those little secrets never become public – even before a Senate investigatory body.

But here’s how some of the other patriotic industrialists and speculators chiseled their way into war profits.

Take the shoe people. They like war. It brings business with abnormal profits. They made huge profits on sales abroad to our allies. Perhaps, like the munitions manufacturers and armament makers, they also sold to the enemy. For a dollar is a dollar whether it comes from Germany or from France. But they did well by Uncle Sam too. For instance, they sold Uncle Sam 35,000,000 pairs of hobnailed service shoes. There were 4,000,000 soldiers. Eight pairs, and more, to a soldier. My regiment during the war had only one pair to a soldier. Some of these shoes probably are still in existence. They were good shoes. But when the war was over Uncle Sam has a matter of 25,000,000 pairs left over. Bought – and paid for. Profits recorded and pocketed.

There was still lots of leather left. So the leather people sold your Uncle Sam hundreds of thousands of McClellan saddles for the cavalry. But there wasn’t any American cavalry overseas! Somebody had to get rid of this leather, however. Somebody had to make a profit in it – so we had a lot of McClellan saddles. And we probably have those yet.

Also somebody had a lot of mosquito netting. They sold your Uncle Sam 20,000,000 mosquito nets for the use of the soldiers overseas. I suppose the boys were expected to put it over them as they tried to sleep in muddy trenches – one hand scratching cooties on their backs and the other making passes at scurrying rats. Well, not one of these mosquito nets ever got to France!

Anyhow, these thoughtful manufacturers wanted to make sure that no soldier would be without his mosquito net, so 40,000,000 additional yards of mosquito netting were sold to Uncle Sam.

There were pretty good profits in mosquito netting in those days, even if there were no mosquitoes in France. I suppose, if the war had lasted just a little longer, the enterprising mosquito netting manufacturers would have sold your Uncle Sam a couple of consignments of mosquitoes to plant in France so that more mosquito netting would be in order.

Airplane and engine manufacturers felt they, too, should get their just profits out of this war. Why not? Everybody else was getting theirs. So $1,000,000,000 – count them if you live long enough – was spent by Uncle Sam in building airplane engines that never left the ground! Not one plane, or motor, out of the billion dollars worth ordered, ever got into a battle in France. Just the same the manufacturers made their little profit of 30, 100, or perhaps 300 per cent.

Undershirts for soldiers cost 14¢ [cents] to make and uncle Sam paid 30¢ to 40¢ each for them – a nice little profit for the undershirt manufacturer. And the stocking manufacturer and the uniform manufacturers and the cap manufacturers and the steel helmet manufacturers – all got theirs.

Why, when the war was over some 4,000,000 sets of equipment – knapsacks and the things that go to fill them – crammed warehouses on this side. Now they are being scrapped because the regulations have changed the contents. But the manufacturers collected their wartime profits on them – and they will do it all over again the next time.

There were lots of brilliant ideas for profit making during the war.

One very versatile patriot sold Uncle Sam twelve dozen 48-inch wrenches. Oh, they were very nice wrenches. The only trouble was that there was only one nut ever made that was large enough for these wrenches. That is the one that holds the turbines at Niagara Falls. Well, after Uncle Sam had bought them and the manufacturer had pocketed the profit, the wrenches were put on freight cars and shunted all around the United States in an effort to find a use for them. When the Armistice was signed it was indeed a sad blow to the wrench manufacturer. He was just about to make some nuts to fit the wrenches. Then he planned to sell these, too, to your Uncle Sam.

Still another had the brilliant idea that colonels shouldn’t ride in automobiles, nor should they even ride on horseback. One has probably seen a picture of Andy Jackson riding in a buckboard. Well, some 6,000 buckboards were sold to Uncle Sam for the use of colonels! Not one of them was used. But the buckboard manufacturer got his war profit.

The shipbuilders felt they should come in on some of it, too. They built a lot of ships that made a lot of profit. More than $3,000,000,000 worth. Some of the ships were all right. But $635,000,000 worth of them were made of wood and wouldn’t float! The seams opened up – and they sank. We paid for them, though. And somebody pocketed the profits.

It has been estimated by statisticians and economists and researchers that the war cost your Uncle Sam $52,000,000,000. Of this sum, $39,000,000,000 was expended in the actual war itself. This expenditure yielded $16,000,000,000 in profits. That is how the 21,000 billionaires and millionaires got that way. This $16,000,000,000 profits is not to be sneezed at. It is quite a tidy sum. And it went to a very few.

The Senate (Nye) committee probe of the munitions industry and its wartime profits, despite its sensational disclosures, hardly has scratched the surface.

Even so, it has had some effect. The State Department has been studying “for some time” methods of keeping out of war. The War Department suddenly decides it has a wonderful plan to spring. The Administration names a committee – with the War and Navy Departments ably represented under the chairmanship of a Wall Street speculator – to limit profits in war time. To what extent isn’t suggested. Hmmm. Possibly the profits of 300 and 600 and 1,600 per cent of those who turned blood into gold in the World War would be limited to some smaller figure.

Apparently, however, the plan does not call for any limitation of losses – that is, the losses of those who fight the war. As far as I have been able to ascertain there is nothing in the scheme to limit a soldier to the loss of but one eye, or one arm, or to limit his wounds to one or two or three. Or to limit the loss of life.

There is nothing in this scheme, apparently, that says not more than 12 per cent of a regiment shall be wounded in battle, or that not more than 7 per cent in a division shall be killed.

Of course, the committee cannot be bothered with such trifling matters.


Who provides the profits – these nice little profits of 20, 100, 300, 1,500 and 1,800 per cent? We all pay them – in taxation. We paid the bankers their profits when we bought Liberty Bonds at $100.00 and sold them back at $84 or $86 to the bankers. These bankers collected $100 plus. It was a simple manipulation. The bankers control the security marts. It was easy for them to depress the price of these bonds. Then all of us – the people – got frightened and sold the bonds at $84 or $86. The bankers bought them. Then these same bankers stimulated a boom and government bonds went to par – and above. Then the bankers collected their profits.

But the soldier pays the biggest part of the bill.

If you don’t believe this, visit the American cemeteries on the battlefields abroad. Or visit any of the veteran’s hospitals in the United States. On a tour of the country, in the midst of which I am at the time of this writing, I have visited eighteen government hospitals for veterans. In them are a total of about 50,000 destroyed men – men who were the pick of the nation eighteen years ago. The very able chief surgeon at the government hospital; at Milwaukee, where there are 3,800 of the living dead, told me that mortality among veterans is three times as great as among those who stayed at home.

Boys with a normal viewpoint were taken out of the fields and offices and factories and classrooms and put into the ranks. There they were remolded; they were made over; they were made to “about face”; to regard murder as the order of the day. They were put shoulder to shoulder and, through mass psychology, they were entirely changed. We used them for a couple of years and trained them to think nothing at all of killing or of being killed.

Then, suddenly, we discharged them and told them to make another “about face” ! This time they had to do their own readjustment, sans [without] mass psychology, sans officers’ aid and advice and sans nation-wide propaganda. We didn’t need them any more. So we scattered them about without any “three-minute” or “Liberty Loan” speeches or parades. Many, too many, of these fine young boys are eventually destroyed, mentally, because they could not make that final “about face” alone.

In the government hospital in Marion, Indiana, 1,800 of these boys are in pens! Five hundred of them in a barracks with steel bars and wires all around outside the buildings and on the porches. These already have been mentally destroyed. These boys don’t even look like human beings. Oh, the looks on their faces! Physically, they are in good shape; mentally, they are gone.

There are thousands and thousands of these cases, and more and more are coming in all the time. The tremendous excitement of the war, the sudden cutting off of that excitement – the young boys couldn’t stand it.

That’s a part of the bill. So much for the dead – they have paid their part of the war profits. So much for the mentally and physically wounded – they are paying now their share of the war profits. But the others paid, too – they paid with heartbreaks when they tore themselves away from their firesides and their families to don the uniform of Uncle Sam – on which a profit had been made. They paid another part in the training camps where they were regimented and drilled while others took their jobs and their places in the lives of their communities. The paid for it in the trenches where they shot and were shot; where they were hungry for days at a time; where they slept in the mud and the cold and in the rain – with the moans and shrieks of the dying for a horrible lullaby.

But don’t forget – the soldier paid part of the dollars and cents bill too.

Up to and including the Spanish-American War, we had a prize system, and soldiers and sailors fought for money. During the Civil War they were paid bonuses, in many instances, before they went into service. The government, or states, paid as high as $1,200 for an enlistment. In the Spanish-American War they gave prize money. When we captured any vessels, the soldiers all got their share – at least, they were supposed to. Then it was found that we could reduce the cost of wars by taking all the prize money and keeping it, but conscripting [drafting] the soldier anyway. Then soldiers couldn’t bargain for their labor, Everyone else could bargain, but the soldier couldn’t.

Napoleon once said,

“All men are enamored of decorations…they positively hunger for them.”

So by developing the Napoleonic system – the medal business – the government learned it could get soldiers for less money, because the boys liked to be decorated. Until the Civil War there were no medals. Then the Congressional Medal of Honor was handed out. It made enlistments easier. After the Civil War no new medals were issued until the Spanish-American War.

In the World War, we used propaganda to make the boys accept conscription. They were made to feel ashamed if they didn’t join the army.

So vicious was this war propaganda that even God was brought into it. With few exceptions our clergymen joined in the clamor to kill, kill, kill. To kill the Germans. God is on our side…it is His will that the Germans be killed.

And in Germany, the good pastors called upon the Germans to kill the allies…to please the same God. That was a part of the general propaganda, built up to make people war conscious and murder conscious.

Beautiful ideals were painted for our boys who were sent out to die. This was the “war to end all wars.” This was the “war to make the world safe for democracy.” No one mentioned to them, as they marched away, that their going and their dying would mean huge war profits. No one told these American soldiers that they might be shot down by bullets made by their own brothers here. No one told them that the ships on which they were going to cross might be torpedoed by submarines built with United States patents. They were just told it was to be a “glorious adventure.”

Thus, having stuffed patriotism down their throats, it was decided to make them help pay for the war, too. So, we gave them the large salary of $30 a month.

All they had to do for this munificent sum was to leave their dear ones behind, give up their jobs, lie in swampy trenches, eat canned willy (when they could get it) and kill and kill and kill…and be killed.

But wait!

Half of that wage (just a little more than a riveter in a shipyard or a laborer in a munitions factory safe at home made in a day) was promptly taken from him to support his dependents, so that they would not become a charge upon his community. Then we made him pay what amounted to accident insurance – something the employer pays for in an enlightened state – and that cost him $6 a month. He had less than $9 a month left.

Then, the most crowning insolence of all – he was virtually blackjacked into paying for his own ammunition, clothing, and food by being made to buy Liberty Bonds. Most soldiers got no money at all on pay days.

We made them buy Liberty Bonds at $100 and then we bought them back – when they came back from the war and couldn’t find work – at $84 and $86. And the soldiers bought about $2,000,000,000 worth of these bonds!

Yes, the soldier pays the greater part of the bill. His family pays too. They pay it in the same heart-break that he does. As he suffers, they suffer. At nights, as he lay in the trenches and watched shrapnel burst about him, they lay home in their beds and tossed sleeplessly – his father, his mother, his wife, his sisters, his brothers, his sons, and his daughters.

When he returned home minus an eye, or minus a leg or with his mind broken, they suffered too – as much as and even sometimes more than he. Yes, and they, too, contributed their dollars to the profits of the munitions makers and bankers and shipbuilders and the manufacturers and the speculators made. They, too, bought Liberty Bonds and contributed to the profit of the bankers after the Armistice in the hocus-pocus of manipulated Liberty Bond prices.

And even now the families of the wounded men and of the mentally broken and those who never were able to readjust themselves are still suffering and still paying.


WELL, it’s a racket, all right.

A few profit – and the many pay. But there is a way to stop it. You can’t end it by disarmament conferences. You can’t eliminate it by peace parleys at Geneva. Well-meaning but impractical groups can’t wipe it out by resolutions. It can be smashed effectively only by taking the profit out of war.

The only way to smash this racket is to conscript capital and industry and labor before the nations manhood can be conscripted. One month before the Government can conscript the young men of the nation – it must conscript capital and industry and labor. Let the officers and the directors and the high-powered executives of our armament factories and our munitions makers and our shipbuilders and our airplane builders and the manufacturers of all the other things that provide profit in war time as well as the bankers and the speculators, be conscripted – to get $30 a month, the same wage as the lads in the trenches get.

Let the workers in these plants get the same wages – all the workers, all presidents, all executives, all directors, all managers, all bankers –

yes, and all generals and all admirals and all officers and all politicians and all government office holders – everyone in the nation be restricted to a total monthly income not to exceed that paid to the soldier in the trenches!

Let all these kings and tycoons and masters of business and all those workers in industry and all our senators and governors and majors pay half of their monthly $30 wage to their families and pay war risk insurance and buy Liberty Bonds.

Why shouldn’t they?

They aren’t running any risk of being killed or of having their bodies mangled or their minds shattered. They aren’t sleeping in muddy trenches. They aren’t hungry. The soldiers are!

Give capital and industry and labor thirty days to think it over and you will find, by that time, there will be no war. That will smash the war racket – that and nothing else.

Maybe I am a little too optimistic. Capital still has some say. So capital won’t permit the taking of the profit out of war until the people – those who do the suffering and still pay the price – make up their minds that those they elect to office shall do their bidding, and not that of the profiteers.

Another step necessary in this fight to smash the war racket is the limited plebiscite to determine whether a war should be declared. A plebiscite not of all the voters but merely of those who would be called upon to do the fighting and dying. There wouldn’t be very much sense in having a 76-year-old president of a munitions factory or the flat-footed head of an international banking firm or the cross-eyed manager of a uniform manufacturing plant – all of whom see visions of tremendous profits in the event of war – voting on whether the nation should go to war or not. They never would be called upon to shoulder arms – to sleep in a trench and to be shot. Only those who would be called upon to risk their lives for their country should have the privilege of voting to determine whether the nation should go to war.

There is ample precedent for restricting the voting to those affected. Many of our states have restrictions on those permitted to vote. In most, it is necessary to be able to read and write before you may vote. In some, you must own property. It would be a simple matter each year for the men coming of military age to register in their communities as they did in the draft during the World War and be examined physically. Those who could pass and who would therefore be called upon to bear arms in the event of war would be eligible to vote in a limited plebiscite. They should be the ones to have the power to decide – and not a Congress few of whose members are within the age limit and fewer still of whom are in physical condition to bear arms. Only those who must suffer should have the right to vote.

A third step in this business of smashing the war racket is to make certain that our military forces are truly forces for defense only.

At each session of Congress the question of further naval appropriations comes up. The swivel-chair admirals of Washington (and there are always a lot of them) are very adroit lobbyists. And they are smart. They don’t shout that “We need a lot of battleships to war on this nation or that nation.” Oh no. First of all, they let it be known that America is menaced by a great naval power. Almost any day, these admirals will tell you, the great fleet of this supposed enemy will strike suddenly and annihilate 125,000,000 people. Just like that. Then they begin to cry for a larger navy. For what? To fight the enemy? Oh my, no. Oh, no. For defense purposes only.

Then, incidentally, they announce maneuvers in the Pacific. For defense. Uh, huh.

The Pacific is a great big ocean. We have a tremendous coastline on the Pacific. Will the maneuvers be off the coast, two or three hundred miles? Oh, no. The maneuvers will be two thousand, yes, perhaps even thirty-five hundred miles, off the coast.

The Japanese, a proud people, of course will be pleased beyond expression to see the united States fleet so close to Nippon’s shores. Even as pleased as would be the residents of California were they to dimly discern through the morning mist, the Japanese fleet playing at war games off Los Angeles.

The ships of our navy, it can be seen, should be specifically limited, by law, to within 200 miles of our coastline. Had that been the law in 1898 the Maine would never have gone to Havana Harbor. She never would have been blown up. There would have been no war with Spain with its attendant loss of life. Two hundred miles is ample, in the opinion of experts, for defense purposes. Our nation cannot start an offensive war if its ships can’t go further than 200 miles from the coastline. Planes might be permitted to go as far as 500 miles from the coast for purposes of reconnaissance. And the army should never leave the territorial limits of our nation.

To summarize: Three steps must be taken to smash the war racket.

We must take the profit out of war.

We must permit the youth of the land who would bear arms to decide whether or not there should be war.

We must limit our military forces to home defense purposes.


I am not a fool as to believe that war is a thing of the past. I know the people do not want war, but there is no use in saying we cannot be pushed into another war.

Looking back, Woodrow Wilson was re-elected president in 1916 on a platform that he had “kept us out of war” and on the implied promise that he would “keep us out of war.” Yet, five months later he asked Congress to declare war on Germany.

In that five-month interval the people had not been asked whether they had changed their minds. The 4,000,000 young men who put on uniforms and marched or sailed away were not asked whether they wanted to go forth to suffer and die.

Then what caused our government to change its mind so suddenly?


An allied commission, it may be recalled, came over shortly before the war declaration and called on the President. The President summoned a group of advisers. The head of the commission spoke. Stripped of its diplomatic language, this is what he told the President and his group:

“There is no use kidding ourselves any longer. The cause of the allies is lost. We now owe you (American bankers, American munitions makers, American manufacturers, American speculators, American exporters) five or six billion dollars.

If we lose (and without the help of the United States we must lose) we, England, France and Italy, cannot pay back this money…and Germany won’t.


Had secrecy been outlawed as far as war negotiations were concerned, and had the press been invited to be present at that conference, or had radio been available to broadcast the proceedings, America never would have entered the World War. But this conference, like all war discussions, was shrouded in utmost secrecy. When our boys were sent off to war they were told it was a “war to make the world safe for democracy” and a “war to end all wars.”

Well, eighteen years after, the world has less of democracy than it had then. Besides, what business is it of ours whether Russia or Germany or England or France or Italy or Austria live under democracies or monarchies? Whether they are Fascists or Communists? Our problem is to preserve our own democracy.

And very little, if anything, has been accomplished to assure us that the World War was really the war to end all wars.

Yes, we have had disarmament conferences and limitations of arms conferences. They don’t mean a thing. One has just failed; the results of another have been nullified. We send our professional soldiers and our sailors and our politicians and our diplomats to these conferences. And what happens?

The professional soldiers and sailors don’t want to disarm. No admiral wants to be without a ship. No general wants to be without a command. Both mean men without jobs. They are not for disarmament. They cannot be for limitations of arms. And at all these conferences, lurking in the background but all-powerful, just the same, are the sinister agents of those who profit by war. They see to it that these conferences do not disarm or seriously limit armaments.

The chief aim of any power at any of these conferences has not been to achieve disarmament to prevent war but rather to get more armament for itself and less for any potential foe.

There is only one way to disarm with any semblance of practicability. That is for all nations to get together and scrap every ship, every gun, every rifle, every tank, every war plane. Even this, if it were possible, would not be enough.

The next war, according to experts, will be fought not with battleships, not by artillery, not with rifles and not with machine guns. It will be fought with deadly chemicals and gases.

Secretly each nation is studying and perfecting newer and ghastlier means of annihilating its foes wholesale. Yes, ships will continue to be built, for the shipbuilders must make their profits. And guns still will be manufactured and powder and rifles will be made, for the munitions makers must make their huge profits. And the soldiers, of course, must wear uniforms, for the manufacturer must make their war profits too.

But victory or defeat will be determined by the skill and ingenuity of our scientists.

If we put them to work making poison gas and more and more fiendish mechanical and explosive instruments of destruction, they will have no time for the constructive job of building greater prosperity for all peoples. By putting them to this useful job, we can all make more money out of peace than we can out of war – even the munitions makers.

So…I say,


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If you enjoyed ‘War Is A Racket’ you should also read ‘THE WAR PRAYER’ by Mark Twain.

U.K. Budget 2010: In The Carbon Religion’s Worst Week Brits Throw £1bn At The Bank of Superstition

It seems even the impending menace of a general election cannot make Labour face reality. The Budget showed the carbonphobic green hysteria still has a grip on the major parties. Alistair Darling was cock-a-hoop because he had just discovered his borrowing needs had shrunk from a massive £178bn to a trivial – er – £167bn. So, with the insouciance of a lottery winner, he immediately blew £1bn on a “green bank” whose chief function will be to fund wind energy, the discredited technology that sensible investors are now shunning, to the extent that the plant building wind turbines in this country has shut down.

That is half the sum he has just clawed back from greedy bankers. Silly old us, if we imagined for a moment it might be spent on something sensible like reducing the deficit. Nor should we look to the opposite side of the Commons chamber for more sane prescriptions: Dave and his cronies are even more infatuated with the anti-carbon superstition than Labour. This is, as usual, bad news for British taxpayers.

However, beyond these shores, there is very good news indeed. Those global warming sceptics who pessimistically forecast that, despite the disintegration of the AGW scam on an almost daily basis, governments would forge ahead and impose green taxes have been proved gratifyingly wrong. This has been the worst week for the carbon scare scam since its gestation in the frontal lobes of Al Gore and similar eco-entrepreneurs.

First, Nicolas Sarkozy’s party was slaughtered in the French regional elections, to the point that it now controls only Alsace and an island in the Indian Ocean called Reunion. With the Front National rampant in the polls and complete electoral humiliation heaped upon him, Sarkozy had the sense to come in out of the rain. He announced the indefinite postponement (ie cancellation) of France’s proposed carbon tax. The French environment secretary described herself as “devastated that eco-scepticism had prevailed”.

There will be a lot more green politicos devastated shortly. The message to electorates worldwide is: thrash them at the polls and you can actually remove the green tyranny from your backs. This week too, the backlash in America against Barack Obama’s constitutional coup d’état on healthcare finally buried any vestigial hopes that he would be allowed to impose cap and trade or any other ecofascist ploys devised by the Al Gore camp on the American public. In the great carbon hysteria, you can effectively take America out of the picture.

So, with the United States and France removed from the jigsaw of green totalitarianism, the eventual outcome is inevitable: the real objective of the AGW scam, green taxes and billionaire profits from carbon trading are ultimately doomed projects. Here in Britain, of course, both Labour and the Tories remain mesmerised by the Fifth Monarchy Men of the carbon apocalypse. The French electorate has demonstrated the solution: wipe them both out at the general election. Take off the blinkers, shrug off outdated tribal prejudices, reject the perceived “least worst” option and vote for what you actually want. Make Labour and Toryism history.

Source:, March 24 2010
By: Gerald Warner

Gerald Warner is an author, broadcaster, columnist and polemical commentator who writes about politics, religion, history, culture and society in general.