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The Odd Masonic Imagery of the 33 Chilean Miners’ Rescue
By Vigilant | October 14th, 2010 | Category: Latest News | 482 comments
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The rescue of the 33 unfortunate Chilean miners has definitely turn into an international media event. All aspects of the rescue have been carefully staged to make the entire thing a spectacular show inspiring emotions, admiration and national pride. For those knowledgeable of Masonic and occult symbolism, it is hard not to ponder on the numerological and symbolic facts of the event. Here are some of them:
1- The number of Miners
Insignia of the 33rd (and highest) Degree of Scottish Rite Freemasonry
The number 33 is of great importance in Freemasonry and in Qabbalistic system of numbers. It can be found in many instances in Masonic lore.
“For example, consider the number 33. The first temple of Solomon stood for thirty-three years in its pristine splendor. At the end of that time it was pillaged by the Egyptian King Shishak, and finally (588 B.C.) it was completely destroyed by Nebuchadnezzar and the people of Jerusalem were led into captivity to Babylon. (See General History of Freemasonry, by Robert Macoy.) Also King David ruled for thirty-three years in Jerusalem; the Masonic Order is divided into thirty-three symbolic degrees; there are thirty-three segments in the human spinal column; and Jesus was crucified in the thirty-third year of His life.”
– Manly P. Hall, Secret Teachings of All Ages“Alchemy is a threefold art, its mystery well symbolized by a triangle. Its symbol is 3 times 3 – three elements or processes in three worlds or spheres. The 3 times 3 is part of the mystery of the 33rd degree of Freemasonry, for 33 is 3 times 3, which is 9, the number of esoteric man and the number of emanations from the root of the Divine Tree.”
– Ibid2- The Date of the Event
The date of the start of the rescue is also significant:
10/13/10 which can qabbalistically be calculated this way: 10 + 13 + 10 which equals…33.
3- The Phoenix
The name of the rescue device was named “Fénix” (Phoenix), which is the bird that rose from its ashes. Once again, the selection of the name Phoenix, a mythological creature holding a great importance in occult mysteries, is quite interesting. The bird is considered a symbol of accomplishment of alchemical transmutation, a process equivalent to human regeneration.
“In the Mysteries it was customary to refer to initiates as phoenixes or men who had been born again, for just as physical birth gives man consciousness in the physical world, so the neophyte, after nine degrees in the womb of the Mysteries, was born into a consciousness of the Spiritual world.”
– Ibid.4- The Number of Days it Took to Drill the Hole
…33.
“The work took 33 days total, one day a man,” said Mikhail Proestakis, manager of Driller Supply Company, which participated in the drilling of the rescue shaft with a diameter of 66 centimetres, which is 33 times two.
“I believe in numerology, it has to mean something.”
– Source//
//5- The First Note Sent by the Miners
“Others call attention to the first note the miners sent up to show they were still alive – “estamos bien en el refugio los 33” (all 33 of us are in the shelter) – which was 33 characters in length.”
– Ibid6- The Symbolism of the Event
To summarize the rescue event, 33 miners, who were trapped for 69 days in the depths and darkness of the underground were lifted one by one, on 10/13/10 in a device called “Fenix” – a creature representative of occult initiation – to the light of day. As they say “Ex tenebris lux”: From darkness to light.
Acting out the Masonic motto?
With these facts in mind, I’m asking you this: was the Chilean Miner’s rescue a Masonic mega-ritual?
Inverted pentagram on the shirt the miner’s were told to wear
Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds
The foreclosure fraud crisis seems to escalate with each passing now. It is being reported that all 50 U.S. states have launched a joint investigation into alleged fraud in the mortgage industry. This is a huge story that is not going to go away any time soon. The truth is that it would be hard to understate the amount of fraud that has gone on in the U.S. mortgage industry, and we are watching events unfold that could potentially rip the U.S. economy to shreds. Many are now referring to this crisis as “Foreclosure-Gate“, and already it is shaping up to be the worst thing that has ever happened to the U.S. mortgage industry. At this point, it seems inevitable that some financial institutions will go under as a result of this mess. In fact, by the end of this thing we might see a whole bunch of lending institutions crash and burn. This crisis is very hard to describe because it is just so darn complicated, but it is worth it to try to dig into this thing and understand what is going on because it has the potential to absolutely decimate the entire U.S. mortgage industry.
The truth is that there was fraud going on in every segment of the mortgage industry over the past decade. Predatory lending institutions were aggressively signing consumers up for mortgages that they knew they could never repay. Many consumers were also committing fraud because a lot of them also knew that they could never possibly repay the mortgages. These bad mortgages were fraudulently bundled up and securitized, and these securitized financial instruments were fraudulently marketed as solid investments. Those who certified that these junk securities were “AAA rated” also committed fraud. Then these securities were traded at lightning speed all over the globe and a ton of mortgage paperwork became “lost” or “missing”.
Then, when it came time to foreclose on these bad mortgages, a whole bunch more fraud started being committed. The reality is that the “robo-signing” scandal is just the tip of the iceberg. The following are six things that you should know about how deep this foreclosure fraud crisis really goes….
#1 According to the Associated Press, financial institutions were hiring just about whoever they could find, including hair stylists and Wal-Mart employees, as “foreclosure experts” to help them rush through the massive backlog of foreclosures that were rapidly piling up.
Apparently many of these “foreclosure experts” barely even knew what a “mortgage” was according to the AP….
In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.
#2 There is soon going to be a colossal legal scramble to figure out who actually owns millions of U.S. mortgages.
In his recent article entitled “Invasion Of The Robot Home Snatchers“, Robert Scheer described the complete and total mess that the U.S. mortgage industry has created….
How do you foreclose on a home when you can’t figure out who owns it because the original mortgage is part of a derivatives package that has been sliced and diced so many ways that its legal ownership is often unrecognizable? You cannot get much help from those who signed off on the process because they turn out to be robot signers acting on automatic pilot. Fully 65 million homes in question are tied to a computerized program, the national Mortgage Electronic Registration Systems (MERS), that is often identified in foreclosure proceedings as the owner of record.
Meanwhile, more organizations are stepping forward to help homeowners fight foreclosures. National People’s Action, PICO National Network, Industrial Areas Foundation, Alliance of Californians for Community Empowerment and the Northwest Federation of Community Organizations have all partnered with the SEIU to launch the “Where’s The Note” campaign which is going to encourage homeowners to demand to see the note before submitting to a foreclosure. Campaigns such as this are going to make foreclosures much more costly for banks.
#3 Legal battles over foreclosure documents could soon spawn thousands upon thousands of lawsuits across the United States.
Adam Levitin, a Georgetown University Law professor who specializes in mortgage finance and financial regulatory issues was recently quoted in an article on CNBC as saying the following about the situation we are currently in….
The mortgage is still owed, but there’s going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you’re stealing my money. You’re going to then have trusts that don’t have any assets that have been issuing securities that say they’re backed by a whole bunch of assets, and you’re going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they’re going to do, and you’re going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.
#4 The problems with foreclosure paperwork may be more widespread than anyone would have dared to imagine.
Attorney Richard Kessler recently conducted a study in which he found “serious errors” in approximately 75 percent of the court filings related to home repossessions that he examined. Now he says that the foreclosure crisis could haunt the U.S. mortgage industry for the next ten years….
“Defective documentation has created millions of blighted titles that will plague the nation for the next decade.”
#5 If some banks discover that they are missing the paperwork for large numbers of mortgages (as is currently being alleged), those banks could be forced to significantly revalue those assets (as in “close to zero”) on their balance sheets.
John Carney of CNBC recently described it this way….
The most damaging thing that could happen to banks would be the discovery that they simply cannot prove they hold a mortgage on a house. In that case, the loan would probably have to be written down to near zero. Even for current loans, the regulatory reserve requirements would double as the loan would no longer be a functional mortgage but an ordinary consumer loan. Depending on the size of the “no docs” portion of the loan portfolio, this might be a minor blip or require a bank to raise new capital to fill the hole in the balance sheet.
#6 Renowned investor Jim Sinclair is actually warning that the collapse of securitized mortgage debt could be the “final shot” that will wipe out many financial institutions across the United States.
The recent warning that Sinclair posted on his blog is more than a little sobering….
I am asking for your attention again because of the depth of the fraud and now the size of the securitized mortgage debt OTC derivative pile of garbage that is in the trillions. This entire mountain of weapons of mass financial and social destruction is now in question. I have been telling you this for more than 2 years since the manufacturers and distributors of this crap were called by the NY Fed due to the loss of control over the paperwork.
I had dinner with my former partner, then lead director of and CEO of Bear Stearns. I could not contain myself so I asked him why he did so much business in OTC derivatives which were certain to bankrupt them. The answer I got was it was more than 50% of their profit. The right answer should have been it was more than 80% of their earnings.
Securitized mortgage debt is going to be the final shot that kills all kinds of financial entities in the Western world. The biggest holder of this putrid junk is pension funds.
Meanwhile, the stock market continues to go up, up, up as if everything is right in the world and as if a juicy new bull market is now upon us.
Well, let’s all join hands and sing happy songs around the campfire.
Perhaps if we all close our eyes and wish real hard all of this foreclosure fraud will just go away.
Then again, maybe not.
The Biggest Bank Robbery In History? More Quantitative Easing = Backdoor Bailouts For The Big Banks Without Having To Go Through Congress
The U.S. Federal Reserve is getting ready to conduct another gigantic bailout of the big banks, but this time virtually nobody in the mainstream media will use the term “bailout” and the American people are going to get a lot less upset about it. You see, one lesson that was learned during the last round of bank bailouts was that the American people really, really do not like it when the U.S. Congress votes to give money to the big banks. So this time, the financial “powers that be” have figured out a way around that. Instead of going through the massive headache of dealing with the U.S. Congress, the Federal Reserve is simply going to print money and give it directly to the banks. To be more precise, the Federal Reserve is going to use a procedure known as “quantitative easing” to print money out of thin air in order to purchase large quantities of “troubled assets” (such as mortgage-backed securities) from the biggest U.S. banks at well above market price. Some are already openly wondering if this next round of quantitative easing is going to be the biggest bank robbery in history. Most Americans won’t understand these “backdoor bailouts” well enough to get upset about them, but that doesn’t mean that they won’t be just as bad (or even worse) than the last round of bailouts. In the end, all of the inflation that this new round of quantitative easing is going to cause is going to be a “hidden tax” on all of us.
These new backdoor bailouts are going to work something like this….
1) The big U.S. banks have massive quantities of junk mortgage-backed securities that are worth little to nothing that they desperately want to get rid of.
2) They convince the Federal Reserve (which the big banks are part-owners of) to buy up these “toxic assets” at way above market price.
3) The Federal Reserve creates massive amounts of money out of thin air to buy up all of these troubled assets. The public is told that all of this “quantitative easing” is necessary to stimulate the U.S. economy.
4) The big banks are re-capitalized and have gotten massive amounts of bad mortgage securities off their hands, the Federal Reserve has found a way to pump hundreds of billions (if not trillions) of dollars into the economy, and most of the American people are none the wiser.
During a recent appearance on MSNBC, Matt Taibbi of Rolling Stone did a great job of explaining how this all works….
http://www.youtube.com/watch?v=uwhMVB0XzPU&feature=player_embedded
But this isn’t the only way that the Federal Reserve forks over massive amounts of cash to the big U.S. banks. In a previous article, I described how the U.S. Federal Reserve lends huge quantities of nearly interest-free money to big U.S. banks which they turn around and invest in U.S. Treasuries which bring in a return of three percent or so. In essence, it is a legalized way for the big U.S. banks to make mountains and mountains of free money.
The truth is that the Federal Reserve does whatever it can to ensure that the big U.S. banks stay fat and happy.
So what about the small banks? What happens to them?
Well, the vast majority of the small banks are considered “not big enough for bailouts” and they are allowed to die like dogs.
Don’t let anyone ever fool you into thinking that the U.S. banking system has a level playing field.
For weeks, Federal Reserve officials have been coming out and have been dropping hints about how important it is for them to take “action” and implement another round of quantitative easing in order to help stimulate the U.S. economy.
In fact, during his speech on Friday, you could almost hear Ben Bernanke salivating at the thought of printing more money.
But nobody ever really asks who is going to be the first to get their hands on all this money that the Fed is going to pump into the economy.
The answer, of course, is obvious.
It is going to be the big banks – the same banks that are part-owners of the Federal Reserve and that have tremendous influence over Fed policies.
But even though this is all more than a little shady, is it such a bad thing for the rest of us if the Federal Reserve bails out the big banks and brings some much needed stability back to the U.S. financial system?
After all, if “Foreclosure-Gate” could potentially cause a nightmarish financial meltdown, isn’t it better for the Federal Reserve to step in and soak up large amounts of these toxic assets?
Those are legitimate questions.
Certainly the Federal Reserve has the power to step in and smooth over all sorts of short-term problems by papering them with money, but in the end printing more money will just make our long-term problems even worse.
Whenever a new dollar is introduced into the system, every other dollar in existence loses a little bit of value.
When trillions of new dollars get introduced into the system, it has the potential to create an inflationary nightmare.
Already, a number of top Fed officials are publicly saying that inflation is “too low” and that we need to purposely generate more inflation in order to “stimulate” the U.S. economy.
Yes, that is just as insane as it sounds, but that is what they are actually proposing.
Apparently many top Federal Reserve officials honestly believe that they can pump trillions into the economy, jack up inflation significantly, and little harm will be done.
But even before “QE2” has begun, we are already starting to see all kinds of little bubbles beginning to develop in the financial system. For example, commodity prices are skyrocketing right now, and that will soon be affecting the price we pay for food at the supermarket.
We are already on the road to serious inflation and the Federal Reserve has not even fired up the money hoses yet. So what is going to happen after they pump trillions more into the economy?
Printing more money and giving it to the banks is not going to solve our economic problems. It is just going to make them worse.
But unfortunately, American voters get no say about any of this. Our national monetary policy is in the hands of an unelected central bank that does pretty much whatever it wants.
An economic nightmare is coming, and you had better get ready.
Currency War 货币战争 – starts now….
And the Americans calls China the currency manipulator….
We’re In a Global Currency War … But What Does It Mean? Published on 10-04-2010
Source: Washington’s Blog
There is a currency war raging world-wide.
Japan, Brazil, Peru and countries all over the world are trying to beggar thy neighbor (just as happened during the 1930s) and gain a leg up for their exports by cheapening their currencies.
As the Wall Street Journal writes:
Beggar-thy-neighbor currency devaluations proved ruinous for the global economy in the 1930s. Is the world setting off down the same slippery slope again?
Japan’s decision to intervene in the currency market to drive down the value of the yen blew a hole in the developed world’s united effort to persuade China and other Asian countries to stop artificially holding down their currencies.
If you take a step back, it really is an odd situation. As Joe Weisenthal notes:
Just think for a moment about the screwy times we live in when central banks are trying to hurt their rivals by buying up their rivals’ bonds — essentially lending them money.Such is the state of things in a world where every country wants to weaken their currencies to boost their own exporters.
And the House has passed legislation saying China is a currency manipulator and has to raise the value of the Yuan.
What does it mean?
American experts say that the Chinese Yuan is undervalued by 25%, which makes Chinese exports artificially competitive. The U.S. Congress is trying to blame China’s undervalued currency for America’s bad economy and unemployment woes.
But the former U.S. trade representative, Susan Schwab, says that – while there’s a very real problem in terms of China artificially keeping the renminbi low – this isn’t the way to solve anything. Schwab calls it “a signal-sending exercise during an election season”. She says that the bill won’t really do anything, even if the Senate passes it and it is signed into law. Schwab says it “makes no sense”, won’t solve any problems, will escalate tensions, and will only divert attention from the real trade problems between the U.S. and China.
Indeed, Schwab warns that other countries might decide that this U.S. bill means that its open season for addressing currency manipulation, and that other countries believe that the U.S. is manipulating our currency. She says there could be a “boomerang effect” from the legislation.
(Ironically, an anti-sourcing bill – the kind of legislation which might actually keep jobs in the country – was defeated in the same week that the toothless China bill passed.)
Zachary Karabell notes that China is not to blame for all of America’s economic woes, and China is in the middle of revaluing its currency:
The idea is that there is direct line between China, its currency, its exports of lower-cost goods to the United States, and the erosion of middle-class life and now soaring unemployment. But U.S. manufacturing has been bleeding jobs for decades …
What’s more, the recent loss of millions of jobs since 2008 has everything to do with the collapse of the construction and housing industries along with the near-death of the Big Three American auto makers than with any competitive challenge from China. China has become a large car market for General Motors, but not for export to the United States: for sale in China. It would take a massive leap unsupported by any fact to lay the demise of the U.S. auto industry at the feet of China, or for that matter hold China responsible for the sub-prime and derivative debacles. Those are the cause of recent job loss.
Furthermore, China has been revaluing its currency, nearly 20% between 2005 and 2008 and now nearly 3% since June when the government resumed that policy having shelved it during the midst of the global financial crisis. It is in the domestic interest of the Chinese government to raise the value of their currency because they are focused on building up on internal, domestic consumption market. They have no wish to be dependent long-term of the vagaries and whims of American consumers, and higher purchasing power for Chinese consumers is the answer. They are not revaluing quickly enough to suit an America stuck in second gear and looking for someone to blame, but revaluing they are.
Martin Wolf points out that the real problem is global weakness in demand, and China is understandably trying to avoid what happened Japan’s ramped-up currency, which led to the Lost Decade:
“We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness.” This complaint by Guido Mantega, Brazil’s finance minister, is entirely understandable. In an era of deficient demand, issuers of reserve currencies adopt monetary expansion and non-issuers respond with currency intervention. Those, like Brazil, who are not among the former and prefer not to copy the latter, find their currencies soaring. They fear the results.
***
Here there are three facts, relevant to today’s currency wars.
First, as a result of the crisis, the developed world is suffering from chronically deficient demand. In none of the six biggest high-income economies – the US, Japan, Germany, France, the UK and Italy – was gross domestic product in the second quarter of this year back to where it was in the first quarter of 2008. These economies are now operating at up to 10 per cent below their past trends. One indication of the excess supply is the decline in core inflation to close to 1 per cent in the US and the eurozone: deflation beckons. These countries hope for export-led growth. This is true both of those with trade deficits (such as the US) and of those with surpluses (such as Germany and Japan). In aggregate, however, this can only happen if emerging economies shift towards current account deficit.
***
China is overwhelmingly the dominant intervener, accounting for 40 per cent of the accumulation since February 2009. By June 2010, its reserves had reached $2,450bn, 30 per cent of the world total and a staggering 50 per cent of its own GDP. This accumulation must be viewed as a huge export subsidy.
Never in human history can the government of one superpower have lent so much to that of another.
***
It is not hard to see China’s point of view: it is desperate to avoid what it views as the dire fate of Japan after the Plaza accord. With export competitiveness damaged by its soaring currency and pressured by the US to reduce its current account surplus, Japan chose not the needed structural reforms, but a huge monetary expansion, instead. The consequent bubble helped deliver the “lost decade” of the 1990s. Once a world-beater, Japan fell into the doldrums. For China, self-evidently, any such outcome would be a catastrophe.
Bill Bonner notes that the core problem is unhinged fiat currencies which are not backed by anything real, and that a revaluation in the Yuan would hurt the vast majority of Americans when they shop:
These strange facts incite the following reflection on the whole scammy system. The trouble with today’s capitalism is that there is little honest capital left in it. It has been drained away by quackery, debt and fraud. Real capitalism requires solid capital – money you can trust. But real money disappeared nearly 40 years ago. That was when the last traces of gold were removed. Since then, all currencies have been “managed.” No longer fixed measures of real wealth, they have become tools…supposedly used by the authorities to promote full employment and growth…but in fact little more than monetary felonies.
From the end of the Napoleonic wars until the beginning of World Wars of the 20th century, the world’s money system was backed by gold. You couldn’t “manage” it. You couldn’t devalue it. You couldn’t talk it up or talk it down. You couldn’t beggar thy neighbor by cheapening it or enrich him by making it more dear. It was what it was. The new experimental money system began in the Year of Richard Nixon, 1971. Thereafter, the supply of money could increase much faster than the supply of goods and services. US money supply (M2) rose 1,314% between 1970 and 2008, from $624 billion to $8.2 trillion. What did all this ersatz new money do? First it flattered…then it corrupted…and finally, it robbed.
America’s working stiffs were the first to get whacked. Inflation made them feel like they were earning more; but they haven’t had a real, hourly raise since the system was put in place 4 decades ago. And now, America is struggling to make sure they get none in the future either. Lowering the dollar against the renminbi increases the cost of probably 90% of the goods in Wal-Mart and Costco – where the working classes shop.
But this has been going on ever since the managers began taking liberties with the dollar. In the 1960s, the working man – 90% of the population – got 60% of the income gains of the period. By the end of the bubble years – 2001- 2007 – he got just 11%. This has resulted in a “record income gap,” says this week’s news. Half the nation’s income goes to the top 20% of the population, nearly twice as much, compared to the bottom 20%, as in 1967; it’s the biggest gap since they began keeping track.
Consumer prices rose 5 times over the last 40 years. The stock market went up 15 times – from 800 in January 1970 to over 12,000 in 2008 – roughly in line with the increase in the money supply. But the phony money betrayed the rich too. Investors were misled. Capitalists erred. Trillions of dollars went down rat-holes. Consumers were spent out, but the capitalists kept building shopping malls. Now, stock market prices have gone nowhere for more than a decade. And household net worth – most of it in the hands of the wealthy – has declined $12.3 trillion from the peak. When the mistakes are finally flushed out, they could be down another $12 trillion.
The horns have sounded and bells have been rung. It is 1939 in the currency war – just the beginning. When it is over, every managed currency in the world will be dead or wounded. But we will be wiser, too. When the new managed dollar was introduced in the “Nixon Shock” of August, 1971, nobody knew what it was worth. When the end comes, everyone will know.
Former Secretary of Labor Robert Reich argues:
Using a weak dollar to create American jobs is foolish, for two reasons.
First, no other country wants to lose jobs because its currency becomes too high relative to the dollar. So a weak dollar policy invites currency wars. Everyone loses.
***
Here’s the other problem. Even if we succeed, a weak dollar makes us poorer. Imports are around 18 percent of the US economy, so a dropping dollar is exactly like an extra tax on 18 percent of what we buy.
It’s no big accomplishment to create jobs by getting poorer. You want to know how to cut unemployment by half tomorrow? Get rid of the minimum wage and unemployment insurance, and make everyone who needs a job work for a dollar a day.
***
The goal isn’t just more jobs. It’s more jobs that pay enough to improve our living standards.Using a weakening dollar to create more jobs doesn’t get us where we want to be.
And Michael Hudson points out that – with the dollar as the world’s reserve currency – every county, including China, must devalue their currencies just to stabilize their economies:
It is traditional for politicians to blame foreigners for problems that their own policies have caused. And in today’s zero-sum economies, it seems that if America is losing leadership position, other nations must be the beneficiaries. Inasmuch as China has avoided the financial overhead that has painted other economies into a corner, nationalistic U.S. politicians and journalists are blaming it for America’s declining economic power.
***
For over a century, central banks have managed exchange rates by raising or lowering the interest rate. Countries running trade and payments deficits raise rate to attract foreign funds. The IMF also directs them to impose domestic austerity programs that reduce asset prices for their real estate, stocks and bonds, making them prone to foreign buyouts. Vulture investors and speculators usually have a field day, as they did in the Asian crisis of 1997.
Conversely, low interest rates lead bankers and speculators to seek higher returns abroad, borrowing domestic currency to buy foreign securities or make foreign loans. This capital outflow lowers the exchange rate.
There is a major exception, of course: the United States. Despite running the world’s largest balance-of-payments deficit and also the largest domestic government budget deficit, it has the world’s lowest interest rates and easiest credit. The Federal Reserve has depressed the dollar’s exchange rate by providing nearly free credit to banks at only 0.25% interest. This “quantitative easing” (making it easier to borrow more) aims at preventing U.S. real estate, stocks and bonds from falling further in price. The idea is to save banks from more defaults as the economy slips deeper into negative equity territory. A byproduct of this easy credit is to lower the dollar’s exchange rate – presumably helping U.S. exporters while forcing foreign producers either to raise the dollar price of their goods they sell here or absorb a currency loss.
This policy makes the dollar a managed currency. Low U.S. interest rates and easy credit spur investors to lend abroad or buy foreign assets yielding more than 1%. This dollar outflow forces other countries to protect their currencies from being forced up. So their central banks do not throw the excess dollars they receive onto the “free market,” but keep them in dollar form by buying U.S. Government bonds. So the “Chinese savings,” “yen savings” and “Euro savings” that are spent on U.S. Treasury securities (and earlier, on Fannie Mae bonds to earn a bit more) are not really what Chinese people save in their local yuan, or what Japanese or Europeans save. The money used to buy U.S. Government securities consists of the excess dollars that the American military, American investors and American consumers spend abroad in excess of U.S. earning power.
***
Accusations that Japan, South Korea and Taiwan are “making their currencies cheaper” by recycling their dollar inflows into U.S. Treasury securities simply means that they are trying to maintain their currencies at a stable level.
***
It is how most central banks throughout the world are responding to the global dollar glut. They are increasing their international reserves by the amount of surplus free credit” dollars that the U.S. payments deficit is pumping out. To pretend that China is “manipulating its currency” by doing what central banks have done for over a century is [false]. Back in the early 1970s, U.S. officials told OPEC governments that if they did not do this, it would be deemed an act of war. And Congress has refused to let China buy U.S. companies – so China can only recycle its dollar inflows by buying Treasury securities, thereby financing the U.S. federal budget deficit.
***
To pretend that exchange rates are determined mainly by international trade is Junk Economics Error #3. International currency speculation and investment is much larger than the volume of commodity trade. The typical currency bet lasts less than a minute, often being computer-driven by arbitrage swap models. This financial fibrillation has dislodged exchange rates from purchasing-power parity or prices for export and imports.
The largest payments imbalances have little to do with “market forces” for imports and exports. They are what economists call price-inelastic – money spent without regard for price. This is true above all for military spending and maintenance of America’s vast network of foreign bases and political maneuverings to control foreign countries. During the 1960s and ‘70s U.S. military spending accounted for the entire balance-of-payments deficit, as private sector trade and investment remained in balance. Escalation of America’s oil war in the Near East and Pipelinistan, and the hundreds of billions of dollars spent to prop up America-friendly regimes, end up in central banks – whose main option, as noted above, is to send them back to the United States in the form of purchases of U.S. Treasury bills – to finance further federal deficit spending!
None of this can be blamed on China.
***
U.S. strategists would not mind seeing China’s economy similarly untracked by letting global speculators bid up the renminbi’s exchange rate – by enough to let Wall Street speculators make hundreds of billions of dollars betting on the run-up. “Free capital markets” and “open financial markets” are euphemisms for setting the renminbi’s exchange rate by U.S. and European currency arbitrage and capital flight. The U.S. balance-of-payments outflow would increase rather than shrink, thanks to the ability of American banks to create nearly “free” credit on their keyboards to convert into Chinese or other currencies, gold or other speculative vehicles that look to rise against the dollar.
***
“An undervalued currency always promotes trade surpluses,” Prof. Krugman explains. But this is only true if trade is “price-elastic,” with other countries able to produce similar goods of their own at only marginally different prices. This is less and less the case as the United States and Europe de-industrialize and as their capital investment shrinks as a result of their expanding financial overhead ends in a wave of negative equity.
***
Congress is increasing the drumbeat of accusations that China is violating international trade rules by protecting itself from financialization. “Democrats in Congress are threatening to … slap huge tariffs on Chinese goods to undermine the advantages Beijing has enjoyed from a currency, the renminbi, that experts say is artificially weakened by 20 to 25 percent.” The aim is to make China “lift the strict controls on its currency, which keep Chinese exports competitive and more factory workers employed.” But such legislation is illegal under world trade rules.
***
This kind of propaganda does not see the United States as guilty of “managing the dollar” by its quantitative easing that depresses the exchange rate below what would be normal for any other economy suffering so gigantic and chronic s payments deficit. What makes this situation inherently unfair is that while the Washington Consensus directs other countries to impose austerity plans, raise their taxes on consumers and cut vital spending, the Bush-Obama administration blames China, not the U.S. financial system or post-Cold War military expansionism.
The cover story is that foreign exchange controls and purchase of U.S. securities keep the renminbi’s exchange rate low, artificially spurring its exports. The reality is that these controls protect China from U.S. banks creating free “keyboard credit” to buy out its companies or load down its economy with loans to be paid off in renminbi whose value will rise against the deficit-prone dollar.
***
It’s the arbitrage opportunity of the century that lobbyists are pressing for, not the welfare of workers.
***
Paul Krugman and Robin Wells blame China for Wall Street’s junk mortgage binge. Instead of pointing to criminal behavior by the banks, brokerage companies, bond rating agencies and deceptive underwriters, they take the financial sector off the hook: “Just as global imbalances – the savings glut created by surpluses in China and other countries – played an important part in creating the great real estate bubble, they have an important role in blocking recovery now that the bubble has burst.”
This sounds more like what one would hear from a Wall Street lobbyist than from a liberal Democrat. It is as if the real estate bubble didn’t stem from financial fraud, junk mortgages, NINJA loans or the Federal Reserve flooding the U.S. economy with credit to inflate the real estate bubbles and sending electronic dollars abroad to glut the global economy. It’s China’s fault for running large trade surpluses “at the rest of the world’s expense.”
***
Wall Street’s idea of “equilibrium” is for foreign countries to financialize themselves along the lines that the United States is doing, then global equilibrium could be restored.
***
Such suggestions are a cover story for America’s own financial mismanagement. The U.S. idea for global equilibrium is to demand that that the rest of the world follow suit in adopting the short-term time frame typical of banks and hedge funds whose business plan is to make money purely from financial maneuvering, not long-term capital investment. Debt creation and the shift of economic planning to Wall Street and similar global financial centers is confused with “wealth creation,” as if it were what Adam Smith was talking about.
***
China is trying to help by voluntarily cutting back its rare earth exports. It has almost a monopoly, accounting for 97% of global trade in these 17 metallic elements. These exports are “price inelastic.” There is little known replacement cost once existing deposits are depleted. Yet China charges only for the cost of digging these rare metals out of the ground and refining them. They are used in military and other high-technology applications, from guided missile steering systems and computer hard drives to hybrid electric automobile batteries. This has prompted China to recently cut back its exports to save its land from environmental pollution and, incidentally, to build up its own stockpile for future use.
So I have a modest suggestion. If and when China starts re-exporting these metals, raise their price from a few dollars a pound to a few hundred dollars. According to theory put forth by Mr. Krugman and the U.S. Congress, this price increase should slow demand for Chinese exports. It also would help promote world peace and demilitarization, because these rare metals are key elements in missile guidance systems. China should build up its national security stockpile of these key minerals for the future – say, the next prospective five years of production. Let this be a test of the junk paradigms at work.
The bottom line is that there really is a trade imbalance with China which needs to be addressed over some reasonable time-frame. But it can’t be done overnight. As Michael Pettis notes:
By now nearly everyone recognizes that raising the value of the renminbi is a necessary part of the process of raising the real value of household income and improving the balance between producers and consumers, but if the currency rises too quickly and so leads to rising unemployment, it will actually cause household income (and with it household consumption) to decline as unemployment rises. The imbalance will still improve, but it will improve in the “wrong” way, in the form of production declining faster than consumption.
In the meantime, America hasn’t addressed its own fundamental problems (such as rampant speculation and fraud) which led to our financial crisis. And as former trade rep Susan Schwab notes, the Congressional bill is nothing but political theater which might boomerang on us.
Some people think that the currency war could eventually lead to a flight from paper money altogether (and see this), or to an outright conflict between nations (and see this). But those are topics for future discussion.
So when Japan or US or Europe intervene the financial markets, it is an act to save the world, but when China does it, it is the evil currency manipulator….
Original post – http://inflation.us/artificialeconomy.html
September 16, 2010
Americans Enjoying Final Days of Artificial Economy
In recent days, Japan has intervened in the foreign currency market to artificially drive down the value of the yen. Japan’s actions to weaken the yen have driven it from 83 to 85.73 against the U.S. dollar. Most analysts in the mainstream media are portraying this as Japan’s attempt to “head off a deflation spiral”. Almost everybody is applauding Japan’s move, saying it was needed in order to “shore up its export-driven economy”.
The truth is, although Japan claims to be helping Japanese citizens with this move, Japanese citizens are the ones who will actually suffer. Despite Japan’s economy entering into recession last year, the Japanese were able to maintain their same standard of living because prices were falling due to their strong currency. Some of the largest Japanese exporters like Toyota and Sony saw their revenues decline last year by 20.8% and 12.9% respectively, but this was only bad for shareholders of these companies. Despite rapidly declining revenues for Japanese exporters, Japan’s unemployment rate only reached a peak of 5.6% last year and is now down to 5.2%.
The Japanese should be happy and grateful for how strong their economy is compared to the U.S. economy. When it comes to exporters in Japan, their problem is not the strong yen, but the weak U.S. dollar. If Japanese exporters allow the U.S. dollar to collapse, their revenues will continue to decline substantially, but that is a healthy part of a free market economy. Within a year or two, a strengthening yen would allow the Japanese to spend more on their own goods, and revenues for Toyota and Sony would come back strong.
Japan’s efforts to postpone a few Japanese corporations going through a brief but tough readjustment period are helping to artificially prop up the standard of living for Americans one last time. NIA believes that the Japanese better be careful what they wish for. Never before in world history has nearly every developed country been in battle with each other to have the weakest currency. Asian producing countries want their currencies to be the weakest so that they can have the honor of shipping their products to Americans who can’t afford them.
Currencies are very fragile, especially when they are fiat and backed by nothing. NIA believes that nearly all countries around the world with fiat currencies are currently making the grave mistake of doing everything in their power to debase them. Even a five year old child, if you asked them if they want the money in their piggy bank to be worth more or less, would have the common sense to say more. The world’s politicians either don’t have this same common sense or they are being paid off by the management of export giants.
Although China recently made the wise decision to allow the yuan to strengthen, they haven’t allowed the yuan to strengthen fast enough. China is now facing a price inflation crisis that will soon spread to the U.S. Consumer prices in China rose by 3.5% in August compared to one year ago, the largest increase in nearly two years. On a month-over-month basis (including seasonal adjustments), consumer prices in China rose by 4.8% in August over July.
Workers at a Honda plant in China recently went on strike over wages and work conditions. The Chinese have had enough of slaving in factories for $30 per week while Americans sit home on their couches, collect $400 per week in unemployment benefits, and consume the goods that the Chinese make. Chinese manufacturers are now being forced to increase the wages they pay to workers and these costs will be passed on to American importers of Chinese goods like Wal-Mart.
Wal-Mart recently eliminated their “rollbacks” on grocery items in the U.S. Grocery prices at Wal-Mart rose by a shocking 5.8% in July from June. In fact, some items in Wal-Mart like a 36-ounce bottle of Windex and a 12-ounce box of Quaker Oats rose in price by 51% and 66% respectively in July over June. Considering that in 29 states, Wal-Mart controls more than half the grocery market, almost all Americans are beginning to feel the effects of massive price inflation.
With 70% of the goods sold in Wal-Mart made in China, NIA believes that Wal-Mart’s massive price increases for grocery items will soon spread to all other items sold. It is crystal clear for us to see what is ahead for U.S. prices of consumer goods, yet the mainstream media continues to talk about deflation. Cotton prices have surged 28% during the past two months to their highest level in 15 years. That alone guarantees higher clothing prices, but combined with the wage situation in China, Americans could see an unprecedented surge in clothing prices in the months to come.
A massive outbreak of price inflation is already taking place all around us, as Americans enjoy their final days of our artificial economy that is being propped up by China and Japan. Some people say China and Japan continue to buy and hold U.S. treasuries because of our overpowering military presence, but when they start dumping our treasuries and the bond bubble bursts, the U.S. military regime will come to an end. A U.S. societal collapse is coming and NIA will expose the truth in its over one hour long documentary coming in late-October. This documentary will be talked about around the world for years to come.
If you would like your friends and family members to be the first to see NIA’s new upcoming documentary, please tell them to become a member of NIA for free.
Ahmadinejad tells U.N. most blame U.S. government for 9/11
By Louis Charbonneau
UNITED NATIONS | Thu Sep 23, 2010 6:08pm EDT
UNITED NATIONS (Reuters) – Iranian President Mahmoud Ahmadinejad told the United Nations Thursday most people believe the U.S. government was behind the attacks of September 11, 2001, prompting the U.S. delegation to leave the hall in protest.
Addressing the General Assembly, he said it was mostly U.S. government officials and statesmen who believed al Qaeda Islamist militants carried out the suicide hijacking attacks that brought down New York’s World Trade Center and hit the Pentagon.
Another theory, he said, was “that some segments within the U.S. government orchestrated the attack to reverse the declining American economy, and its grips on the Middle East, in order to save the Zionist regime.” Ahmadinejad usually refers to Israel as the “Zionist regime.”
“The majority of the American people as well as most nations and politicians around the world agree with this view,” Ahmadinejad told the 192-nation assembly, calling on the United Nations to establish “an independent fact-finding group” to look into the events of September 11.
As in past years, the U.S. delegation walked out during Ahmadinejad’s speech. It was joined by all 27 European Union delegations and several others, one Western diplomat said.
Mark Kornblau, spokesman for the U.S. mission to the United Nations, reacted before Ahmadinejad finished speaking.
“Rather than representing the aspirations and goodwill of the Iranian people, Mr. Ahmadinejad has yet again chosen to spout vile conspiracy theories and anti-Semitic slurs that are as abhorrent and delusional as they are predictable,” he said.
“COVERED UP”
Ahmadinejad raised a third theory about the attacks, saying: “It was carried out by a terrorist group, but that the American government supported and took advantage of the situation. Apparently this viewpoint has fewer proponents.”
He said the main evidence for that theory was “a few passports found in the huge volume of rubble and a video of an individual whose place of domicile was unknown but it was announced that he had been involved in oil deals with some American officials.”
“It was also covered up and said that due to the explosion and fire no trace of suicide attackers was found,” he added.
Similar to past years, the Iranian president used the General Assembly podium to attack Iran’s other arch foe, Israel, and to defend the right of his country to a nuclear program that Western powers fear is aimed at developing arms.
“This regime (Israel), which enjoys the absolute support of some western countries, regularly threatens the countries in the region and continues publicly announced assassination of Palestinian figures and others, while Palestinian defenders … are labeled as terrorists and anti-Semites,” he said.
“All values, even the freedom of expression, in Europe and the United States are being sacrificed at the altar of Zionism,” Ahmadinejad said.
The Iranian president has previously raised doubts about the Holocaust of the Jews in World War Two and said Israel had no right to exist.
Tehran has been hit with four rounds of U.N. sanctions for refusing to halt its nuclear enrichment program. U.S. President Barack Obama earlier told the assembly that the door to diplomacy was still open for Iran, but it needed to prove its atomic program is peaceful, as it says it is.
Wednesday, foreign ministers from the five permanent U.N. Security Council members and Germany said they hoped for a negotiated solution to the standoff with Tehran.
Ahmadinejad criticized the Security Council for imposing sanctions on his country, saying the penalties were “destroying the remaining credibility” of the 15-nation body.
(Reporting by Louis Charbonneau; Editing by Eric Walsh)
Stuxnet worm is the ‘work of a national government agency’
| Another possible attack on Iran. |
| Published on 09-26-2010 |
|
Source: UK Guardian
Malware believed to be targeting Iran’s Bushehr nuclear power plant may have been created by Israeli hackers A computer worm which targets industrial and factory systems is almost certainly the work of a national government agency, security experts told the Guardian – but warn that it will be near-impossible to identify the culprit. The “Stuxnet” computer worm, which has been described as one of the “most refined pieces of malware ever discovered”, has been most active in Iran, says the security company Symantec – leading some experts to conjecture that the likely target of the virus is the controversial Bushehr nuclear power plant, and that it was created by Israeli hackers. Speaking to the Guardian, security experts confirmed that Stuxnet is a targeted attack on industrial locations in specific countries, the sophistication of which takes it above and beyond previous attacks of a similar nature.
Alan Bentley, senior international vice president at security firm Lumension, said Stuxnet is “the most refined piece of malware ever discovered”, and that the worm was significant because “mischief or financial reward wasn’t its purpose, it was aimed right at the heart of a critical infrastructure”. However Graham Cluley, senior consultant with the online security company Sophos, warned against jumping to conclusions about the target of the attack, saying “sensationalist” headlines were “a worry”. Clulely is wary of reports linking Stuxnet with Israel: “It’s very hard to prove 100% who created a piece of malware, unless you are able to gather evidence from the computer they created it on – or if someone admits it, of course.” But he said that its characteristics did not suggest a lone group. “I think we need to be careful about pointing fingers without proof, and I think it’s more appropriate – if true – to call this a state-sponsored cyber attack rather than cyber terrorism.” Stuxnet works by exploiting previously unknown security holes in Microsoft’s Windows operating system. It then seeks out a component called Simatic WinCC, manufactured by Siemens, which controls critical factory operations. The malware even uses a stolen cryptographic key belonging to the Taiwanese semiconductor manufacturer RealTek to validate itself in high-security factory systems. The worm then takes over the computer running the factory process – which for WinCC would be “mission-critical” systems which have to keep functioning under any circumstance – and “blocks” it for up to a tenth of a second. For high-speed systems, such as the centrifuges used for nuclear fuel processing being done by Iran, that could be disastrous, experts suggested. US army forces are aware of the threat posed by Stuxnet, general Keith Alexander confirmed this week, saying early indications showed that the worm was “very sophisticated”. Clulely told that Guardian that Siemens has “astonishingly” advised power plants and manufacturing facilities not to change the default password that allows access to functions, despite it being exploited by Stuxnet and being “public knowledge on the web for years”. Alan Bentley, SVP International at Lumension, told the Guardian: “There is a lot of circumstantial evidence to suggest that Iran was the target of Stuxnet. We know that the worm was designed with a specific target in mind – its makeup and the way it executes render the tell-tale signs. “Combine this with the fact that the worm was identified by a Belarusian security firm working for an Iranian client and the fact that the nuclear power plant was not working properly for months, it is understandable that speculation points towards Iran as the target. But, without being inside the walls of the Bushehr nuclear power plant, we can’t be certain.” Rik Ferguson, senior security adviser at Trend Micro, said: “Initially, it looks like a targeted attack. It saw a high percentage of infections concentrated in the Middle East. Iran being one. There’s every possiblity that the [other countries affected] may have been collateral damage.” Asked whether a nation state was behind the attack, Ferguson said: “The truth is we don’t know. But we can look at the concentration [of the attacks]. I don’t think we can call this cyberwarfare, I would call it modern espionage. Countries have been spying on their neighbours for years – as the technology has improved, espionage has always improved, and this is step in that direction. “It’s significant because it’s not just the malware but the vulnerability to infect machines – if this had been in more traditional, criminal hands it could have been more widely used, like Conficker was. This was a powerful vulnerability it exploited and usually either you sell it for a lot of money or use it for mass criminality.” David Emm, a senior security researcher at Kaspersky Lab, told the Guardian: “We think that Stuxnet’s sophistication, purpose and the intelligence behind it suggest the involvement of a state. “This is a very sophisticated attack – the first of its kind – and has clearly been developed by a highly skilled group of people intent on gaining access to SCADA [supervisory control and data acquisition] systems – industrial control systems for monitoring and managing industrial infrastructure or facility-based processes. In contrast to the bulk of indiscriminate cybercrime threats on the internet, this has been aimed at very specific targets. It’s different also because there’s no obvious financial motivation behind the attack – rather the aim seems to be to sabotage systems.” However, John Pescatore, vice president for internet security at Gartner, said it was “definitely not the case” that Stuxnet would have required state sponsorship. “We’ve seen similarly targeted software going after credit card readers for financial gain in the past,” he said. “Governments have no monopoly on the talent. We’ve seen attacks that looked like they were state-sponsored in the past launched by hackers for attention or citizens’ groups. You cannot tell just by looking at where it landed.” The experts agree that Stuxnet marks a shift away from malware deployed for financial gain to controlling critical machinery. We are now moving into a “third age” of cyber crime, Clulely said, where the intention of making money from technical exploits is replaced by an intention to bring down critical infrastructure. “We’re entering this third age as well, where there are political, economic and military ways in which the internet can be exploited – and malware can be used – to gain advantage by foreign states. “I think we will see more and more attacks which will be blamed on state-sponsored cyber attacks. There have been numerous attacks in the past which could be said to have possible military, political or economic motives, but it is very difficult to prove that a hack was ordered by Mossad or instead dreamt up by a Macclesfield student.” |
GMullen says US has Iran strike plan, just in case
Obviously they are testing the waters and warming people up to the idea that hitting Iran is a must otherwise we will have another evil empire like Iraq and Afghanistan.
Source – http://news.yahoo.com/s/ap/20100801/ap_on_go_ca_st_pe/us_us_iran
Mullen says US has Iran strike plan, just in case
By ANNE GEARAN, AP National Security Writer Anne Gearan, Ap National Security Writer Sun Aug 1, 3:42 pm ET
WASHINGTON – The U.S. military has a plan to attack Iran, the chairman of the Joint Chiefs of Staff said Sunday, although he thinks a military strike is probably a bad idea.
Not long after Adm. Mike Mullen’s aired on a Sunday talk show, the deputy chief of Iran’s Revolutionary Guard was quoted as saying there would be a strong Iranian response should the U.S. take military action against his country.
Mullen, the highest ranking U.S. military officer, often has warned that a strike on Iran would have serious and unpredictable ripple effects around the Middle East. At the same time, Mullen said the risk of Iran’s developing a nuclear weapon is unacceptable, although he would not say which risk he thinks is worse.
“I think the military options have been on the table and remain on the table,” Mullen said on “Meet the Press” on NBC. “It’s one of the options that the president has. Again, I hope we don’t get to that, but it’s an important option and it’s one that’s well understood.”
The official Iranian news agency IRNA quoted Revolutionary Guard deputy chief Yadollah Javani as saying Sunday that security in the Persian Gulf would be jeopardized “if Americans commit the slightest mistake.”
“The Persian Gulf is a strategic region. If the security of this region is endangered, they will suffer losses too and our response will be firm,” Javani said.
Iran repeatedly has threatened to target the heart of Tel Aviv, the second-largest city in Israel, should the U.S. or Israel take military action against it.
The U.S. and Iran are at odds over the goals of Iran’s nuclear program. Iran contends that it’s aimed at peaceful uses of nuclear energy while the U.S. claims Iran is gearing up to create a nuclear weapon.
___
Associated Press writer Ali Akbar Dareini in Tehran, Iran, contributed to this report.
Ahmadinejad: US behind terror attacks
Published on 07-19-2010
Source: Press TV
Iran’s president says US and NATO forces offer financial and material support to terrorists, yet US President Barack Obama, ironically enough, sends a condolence message on the recent deadly terrorist attacks in southeast Iran.
Mahmoud Ahmadinejad said on Sunday that US troops in Afghanistan and Pakistan sponsor such acts of terror, reported IRNA.
“No grouping other than US-backed terrorist groups which are devoid of human feelings can commit such acts,” added President Ahmadinejad.
The president further called on the Iranian Foreign Ministry to follow up the terror attack through the Pakistani government.
“We are friends with the Pakistani nation, … but the Pakistani government should be held accountable”, he said.
Mahmoud Ahmadi also instructed his office to lodge a complaint with international circles base on the ‘existing documents’, and follow up on NATO and Israel’s cooperation with the terrorists.
“The puppeteers pulling the strings in this show will get nothing”, President Ahmadinejad said.
“Such aggressive policies will only fuel public hatred”, he underscored.
Two bombs were detonated in quick succession in front of the Zahedan Grand Mosque in the southeastern province of Sistan-Baluchestan last Thursday.
At least 27 people lost their lives and more than 100 others were injured in the terrorist act.
Israel convinces Obama to plan for Iran strike
Source: Israel Today
According to a report in Time magazine Israel has managed to convince Washington to put the option of a military strike against Iran’s nuclear facilities back on the table.
Israel has long argued that all of the international sanctions against Iran are pointless unless Western powers are prepared to back them up with the threat of force.
Prime Minister Benjamin Netanyahu has been pressing that point since US President Barack Obama pushed through a new package of sanctions at the UN Security Council last month.
In the past few weeks, Time reported that US Central Command has been devising a thorough plan of targeted air strikes on Iran’s nuclear facilities. The article claimed that Israel has been brought into that planning process.
Israel is also reportedly still revising its own independent plan of attack, should a solo mission against Iran become necessary.
Through the Looking Glass 