The Un-Manipulated Market That Keeps Merkel Awake At Night

It would appear that either Germans have stopped using electricity (now that is some severe austerity) or the ‘real’ economy in the core powerhouse of Europe’s growth is struggling notably more than the nominal price of its stock market would imply. Applying the same ‘myth-busting’ data-series to Germany as we have in China, it is clear that expectations for greater electricity demand (and implicitly economic growth) are grossly different to the expectations priced into German stocks.

…or they just discovered cold fusion…


Charts: Bloomberg

Perhaps a Crumble Rather Than a Collapse – Part Two of Three


Perhaps a Crumble Rather Than a Collapse – Part Two of Three




Cognitive Dissonance



When discussing new ideas or concepts, or when bringing new understanding to older ideas, it is difficult to be brief because not only must the new be carefully explained, but the old must be dissected to understand what it is we think we know, but do not. So with apologies to those who are weary of my verbose renderings I present the second chapter of this cognitive journey.

Chapter One may be found here.


Abandonment and collapse

For 25 minutes twice a day I travel back and forth to my office, a labor of love if I must confess. I enjoy the pleasure of traveling a scenic blue highway consisting mostly of wooded forest and rolling (former tobacco) farm land. All in all a very relaxing commute conductive to solitude and reflection with very little traffic to contend with and a heavy trooper presence to keep the speed down to a more sane and leisurely pace. One can find inspiration wherever one looks, but I find some places more inspiring than others.

None of the farms I pass continues to grow tobacco, an expected outcome of the Tobacco Master Settlement Agreement which precipitated various ‘tobacco state’ buyout programs. But a very visible remnant of this once thriving economic activity are scores of abandoned tobacco barns, most previously used to air cure harvested tobacco leaves before bringing them to market.

While I imagine the locals pay little attention to these hulking sentinels of a past life until suddenly they disappear from the travelers’ line of sight, crumpled into a haphazard pile of rotting debris, for several years now I’ve been witnessing the relentless and ongoing disintegration of these structures. And I see their inevitable destruction as just one small part of a long and convoluted process that is very similar to the coming end of the developed world’s global fiat empire.

Even the eventual (some might say inevitable) failure of both the decaying barns and the global fiat empire do not represent the end, but rather the beginning of the end of this cycle, to be closely followed by the rebirth and renewal (but not necessarily the duplication) of the next. This has led me to think about the widely used term ‘collapse’ when discussing the future of the present day socioeconomic system. Collapse infers that there is an end point, a firm and definite finality, a full stop which in my opinion doesn’t properly sync with the fact that life will carry on, even though the music and dance steps have (radically) changed. Thus the word ‘crumble’ seems more representative of the actual process underway.

To the casual eye very little appears to be happening to these decaying barns for years at a stretch. But if one watches closely and looks for incremental change, very soon one notices some newly deformed or detached wall boards here, additional missing roof shakes there, a barn door ajar and swinging in the breeze or maybe a window sill sagging, the window glazing gone and the panes of glass long since fallen from their sash. Depending upon the pace of the decay and possibly a sense of wasted investment or unrealized potential, the absentee owner might feel compelled to perform some rudimentary repairs in order to stave off what appears to the casual observer to be a case of imminent collapse. 

But once the roof and sides are punctured in several places and fundamental structures are exposed to the elements, the decay accelerates exponentially. More and more roof shakes go missing, rafters fall away and the ridge begins to sag while entire walls bulge and ripple. If you’re lucky to be passing by at the particular moment of rescue you might catch a glimpse of the owner, pickup truck backed up to the long unsecured opening, removing any salvageable property that remains within the structure.

This is the sign, the ‘tell’ if you will, that the end is truly near……at least in the mind of the owner. And yet the barn still stands for months, years even; leaning precariously to one side or another, large sections of the roof long since fallen in, half its wall boards missing, heavily overgrown with vines and brush and inhabited by wildlife who’ve taken refuge from the elements.

Then one day you notice something missing from your routine passage. Not sure at first exactly what it is that you sense is wrong, suddenly you realize that what was once there is now gone. Or at least what appears to be missing is actually still there, only no longer in the shape and form you remember. Overnight it has been reduced in size and shape to a far smaller, more compact pile of wood and assorted detritus. Was it a gust of wind, a breaking timber or a landing bird? One can only guess in what form the straw came that broke the barn’s back.

Actually, it would be far more accurate to say that where once a severely degraded shell of a formerly vibrant and productive asset existed (its supporting structures and various subsystems degraded far beyond any semblance of productive utility or structural integrity) now there is a weathered skeleton no longer able to support what little remained of itself and quickly subsided. Not exactly a collapse in my book, but most people would disagree and over simplify it by calling it one.


Crumbling Tobacco Barn 


The anatomy of an economic crumble by the removal of structural faith and belief

Of course the reader might also accuse me of an oversimplification as well and s/he would also be correct. In my defense though I just wish to examine collapse in its simplest physical form and work from there. In reality, unlike the old unused tobacco barns our economic system is not abandoned, at least not yet.

Rather, while ruthlessly used and severely abused by the elite, the present socioeconomic consensus reality contains one active ingredient the abandoned barns do not……in spite of what is clearly a rapidly decomposing financial and political system, you and I (and increasingly the general public) still maintain a somewhat desperate faith and belief in its past success and future functionality if only the rot could be exorcized and the structure rebuilt.

However, unlike a complicated mechanical device where breakdowns can and will occur with increasing frequency as complexity and age increases, hope, faith and belief are powerful emotional engines not constrained by physical limitations. And equally important they are fueled by a seemingly unlimited energy source, thus they can and will continue to operate long past their seemingly obvious fail date.

Or to put it another way, unlike the abandoned tobacco barns, our socioeconomic culture (into which all of us are seamlessly embedded) embodies tremendous momentum of prior belief which in turn propels, energizes and validates (oftentimes false) hope, faith and belief in the present and future of our obviously failed economic structure. We want to believe, even if we claim we don’t presently believe, and this emotional energy alone is enough to support the structure, if only for a while longer and despite (seemingly) vital components and subsystems falling off or rotting away.

This helps explain why we exuberantly overshoot to the irrational upside, then quickly chase it all back down with an emotional hangover. Modern day markets, currencies and economies may be manipulated and moved by external forces, but they also appear to be moved by (among other things) the rise and fall of the herd’s faith and belief. The question appears to be a chicken or egg query, though it really isn’t. Does social mood move the economy or does the economy move social mood? It seems to me that it is neither, but rather both. There is an ebb and flow back and forth in a positive feedback loop. One cannot exist without the other, with both dependent upon one another.

This interrelated dynamic is constantly dismissed or simply ignored as not relevant or immaterial by the mainstream propagandizing economists and by much of the contrary crew primarily because our socioeconomic culture is considered an ‘economechanical’ (economy mechanical) machine rather than a ‘living’ organism. The economechanical economists claim that our socioeconomic system is a mathematically driven financial machine that influences (some say controls) we humans rather than seeing it as complex organisms in a symbiotic but extremely dysfunctional relationship.

The tobacco barns are physical structures and thus subject to the physical ‘laws’ of the present day consensus reality universe. (Many of the natural ‘laws’ of our current worldview are actually well established and widely believed assumptions and beliefs, a subject I will expand upon in a future article.) Presently those physical laws as we know and believe them do not require faith and belief as structural components in order for the physical barns to remain standing, at least not within the scope of this article’s discussion. The same cannot be said of our culture and its economy.

Reality creators rather than reality consumers

Interestingly while the mainstream economists view the socioeconomic system as mostly economechanical, they do publicly acknowledge the critical hope and belief component of the structure. Thus they dare not say with their out loud voices that the emperor has no clothes, for then the evident will truly become patently obvious and the plausible lie will no longer appear functionally believable.

Still, while they recognize the power of our faith and belief, they say that this emotional force is created by the system and not the reverse. We are seen as just one of several mechanical components of their economic engine, subject to incentives and stimulus, herded and corralled by interest rates and taxes, as reality consumers rather than the all powerful reality creators we truly are.

But make no mistake about one irrefutable fact. The top of the elite, the true puppet masters, know full well who and what we are and how dangerous we are to them if we were to recognize our full potential and take our leave. This is why we are manipulated and enslaved, bottled up like a nuclear reactor. While safely contained we produce consistent and manageable power to run their machines of commerce and consumerism. But released from our restraints and freed to create reality unhindered by our self limitations we are all powerful and no longer controllable.

The manipulating force that distorts our socioeconomic system and its ultimate binding force, the super glue that holds it all together and enables our collective self enslavement, is self evident and entirely esoteric. I am, of course, speaking of the fear based mind control system of the contrived scarcity money meme, the central vehicle used to compel our ‘willing’ participation within the socioeconomic system.

Ultimately currency, widely seen as ‘money’ by the herd and vice versa (thus both words will be used interchangeably in this discussion though there is a distinct difference) is entirely esoteric in nature, without true form or physical structure other than those fancy colored paper symbols in our wallets and electronic one’s and zero’s on our statements that are used to represent a non physical psychological and emotional construct.

The same can also be said about Gold and Silver which are commanding and enduring symbols of the money meme. While Gold and Silver may present in physical form as opposed to un-backed fiat, which is mostly accounted for by numerical journal entries with only a small percentage of the total actually represented as paper currency, Gold and Silver are still just symbols. However, unlike fiat, which comes and goes every few generations, for thousands of years the precious metals have consistently been powerful attractors upon which we focus our energizing faith and belief.

Their physical form, their luster and glow, their primeval allure can for many people be absolutely mesmerizing and speaks to an unknown energy, power and even spiritual magic that the economechanical magicians have trouble publicly acknowledging, let alone modeling. But they do recognize this primeval power and they are desperate to capture it by redirecting that power towards their flaccid fiat.

In my opinion this is why the fiat fakers will often use Gold and Silver to initially back their latest fiat creation, and then strip it away in order to extort the greatest amount of leverage from their wage slaves. Only when they have no choice will they reinstitute a precious metal backing to their worthless fiat, and then only to reset the meme and start it up all over again. One may not be able to totally control the wild (human) beast, but one most certainly can cage it.


Gold, FRN's and the Money Meme


Real or not, it is still just a symbol

The length and degree to which the fiat mongers attempt to demean and dishonor Gold during the latter stages of their currency debasement says all that needs to be said about Gold’s base power, meaning our base power. That said, and regardless of whether or not we believe Gold and Silver to be honest money and the basis for sound money policy (remember in Chapter One my discussion about ‘good’ money meme components many wish to resurrect or maintain while ignoring the overall debilitating effects of the money meme itself?) the monetary precious metals are still just (significant) symbols of the overall money meme. They are not washed clean of their money meme mind control function simply because they are considered beneficial to humanity overall and to us as individuals. They remain symbols, powerful though they may be, of the money meme.

Without fully realizing it we are all guilty of conflating money and/or currency, the primary symbols of the mind control money meme, with what money is used to create, enable or activate, meaning residential and commercial buildings, road and bridges, couches and cameras, intellectual property and all the other ‘real’ things that are formed from mind and matter.

The total and seamless integration of the money meme into our culture is designed to confirm and leverage the faith and belief we bestow upon the esoteric concept of ‘money’ by conflating it with the ‘real’ solid reality we use money to create. This is very deliberately done through propaganda and conditioning via education, beginning with our parents and extending through all levels of primary, secondary and graduate school, as well as through predictive programming and meme affirmation by way of movies, television and advertising and so on.

By extension, we are also conditioned to bestow our faith and belief upon the high priests and puppet masters of the money meme through adulation, worship and subservience to authority and power, which in turn is conflated with money and wealth in an endless positive feedback loop of alchemical abomination creation.

In effect we are all turning mental lead into fiat Gold; only the fiat is Fool’s Gold for those who are left holding it when the bottom begins to fall out of the Fed’s misdirected faith and belief confidence racket. This speaks again to the ultimate power of physical Gold and Silver as vessels of our faith and belief and why those who wish to control us so desperately want to siphon off or redirect some of that power to energize their own controlling fiat.

If we are to be totally honest with ourselves we must accept that Gold and Silver are simply more perfect vessels into which we direct our faith and belief compared to the un-backed fiat currencies. It is still a fear based mind control contrived scarcity money meme even when precious metals are used to ground our faith within the meme. Using Gold and Silver simply means the meme cannot be as easily hijacked or leveraged by others (as opposed to fiat currencies) precisely because our faith and belief is so strong when using the precious metals.

By extension, a precious metal backed currency is an extremely powerful controlling meme in its own right. It is not ‘pure’ just because its backing is a highly pure and refined element. Recognizing and acknowledging this does not diminish our power. What it actually does is it disarms and delegitimizes the predators that prey upon us if we embody this knowledge and understanding.

Perception is reality, so manage the perception and the reality follows

Is it money/currency that makes all those real things ‘real’ or is it those real things that make money/currency appear to be real? Since we perceive currency for what it can be used for and not for what it really is, which in reality is just a concept, a mental construct, a meme, then its ultimate value (which is shorthand for form and function) is based entirely upon our faith and belief in ‘it’.

We intuitively know this to be the truth when we speak about the various central banks debasing their currency, which ultimately means that the central banks are destroying any of our remaining residual faith and belief in these particular money meme symbols (the dollar, euro etc.) which they have utilized to enslave us. Our innate and naturally occurring power energizes and activates their dead fiat currencies, and not the other way around. But the powers that be and their central bankers are loath to admit this to us because this true fact, if widely known and understood, would instantly delegitimize them in the eyes of nearly all but the most subservient.  

We contrarians argue that the monetary system cannot last much longer in its present form because the numbers just don’t add up, that it is being artificially propped up, otherwise it would have collapsed long ago. Over and over again we present charts, graphs, statistics and historical testimony to ‘prove’ that the economic system’s days are numbered and that the end is near. And yet the system continues to persevere, to prosper even… least for some participants.

We declare that if only the slumbering minions would wake and recognize that they and their fellow codependent economic slaves are in deep doodoo, that the financial system would be exposed for what it really is……a corrupt system of extortion and slavery. (On a side note we must ask ourselves why anyone would possibly want to wake to the above described nightmare.) We understand that the status quo is maintained by the ignorance or apathy of those we claim to be asleep; otherwise we would not say this.

Doesn’t that declaration alone make the case that it is the (sometimes blind) faith and belief of the herd that perpetuates the present paradigm and not the desperate economechanical machinations of the controllers? That the economic numbers are manipulated in order to maintain the faith and belief of the herd in the system and not to maintain the actual system?


A Miracle Occurs 


In our material culture complexity infers credibility and belief.

Maybe we need to see this from another point of view. We consistently fail to recognize that math and science are simply intricate (and at times deeply flawed) descriptions of our perceived realty, and not the actual reality itself. And that our perceived reality as described by math, physics and science forms the bedrock basis of our overall worldview and of our economic system.

Because we tend to confuse or conflate math and science with reality itself, or at least we believe that the sciences accurately describe reality, thus reality appears to reinforce the validity of the description in a self reinforcing perpetual motion meme, when an esoteric ‘reality’ (such as economics) is described, presented or explained in mathematical and/or scientific language, we tend to believe that the esoteric reality is real as well. We have been indoctrinated and conditioned for decades, for centuries really, to trust the offered descriptions as real, as a genuine reality, as a truth, rather than to trust our own experience, common sense and inner knowing.

In effect the economechanical magicians have convinced us (all of us to some degree or another) to alter our perception to match their description. This is how we are manipulated, by convincing us to disbelieve our lying eyes. This easily explains how the present day leveraged fiat socioeconomic system has been able to endure so much longer than many people thought possible based solely upon the obvious unsustainability of the present day financial reality.  

The modern day financial system is entirely dependent upon our manipulated and deeply compromised faith and belief in order to function. By distorting our perception of (economic) reality, by pushing the boundary between believability and unbelievability further and further out, the socioeconomic system can endure long past its math and science based projected failure date. Add in our intense desire to believe, in part due to our raging co-dependency, and we can see how Wile E. Coyote can travel well past the cliff edge in flagrant violation of gravity.

Economic gravity doesn’t matter…….until it is consciously recognized and emotionally accepted as detrimental, then suddenly it matters a whole lot and comes roaring back with a vengeance. Ignorance truly is bliss, regardless of whether it comes in the form of a true lack of knowledge and understanding or as a part of our denial or as part of a manipulated and distorted perception.

The elite economechanical magicians (aka the top tier economists and central bank barons) use incomprehensible-to-the-layman (and to each other) math and science to describe why the system has indeed survived (aka the new normal) thus closing the faith and belief positive feedback loop. When only a few dozen individuals can successfully claim that they understand how a (faith and belief) socioeconomic system functions, and more importantly how to ‘fix’ the system, while the remaining 99.99% are told that all is well, that the system will be just fine if only we would do this or that, to just trust them, then we have fully crossed over from examining and describing a complex economic entity and into a religious socioeconomic cult based solely upon faith and belief.

I am constantly amazed, but not really surprised, by the degree of back peddling, amending, correcting and restating that occurs in all of the sciences, with economics leading the way these days. “Yes I know we once said that this (fill in the blank) was bad, but in the new normal this is now good. The proof that this change is good is that the system continues to operate and even prosper, so you should believe this now and not that.” I just love circular logic that feeds my confirmation bias and triggers those soothing endorphins.

Yet amazingly we as a society continue to believe in these seriously flawed descriptions primarily because they are promoted by so called experts and authorities and because we as a group and as individuals are so deeply compromised by our addictions and dependencies that we have become infantile pawns. Either we believe what we are told, regardless of how preposterous or ridiculous it may be, or we reject it and suddenly we are on our own, totally responsible for ourselves and, if we have family or close friends, several others.

This applies to all of us, particularly the educated professional class who are even more dependent upon the present day socioeconomic system to function so that their elevated status among the other wage slaves can be maintained. The house slaves are usually better fed and clothed if nothing else.

If the high priests of the various science and financial cults were to suddenly declare that they know not what they do, who is going to tell me what to think, say and most importantly do. In a culture that gloriously worships conformity of the individual and craves affirmation from our masters above, we shouldn’t be too surprised to discover the ugly underbelly of our hive mind.

Essentially we practice the abandonment of the self in pursuit of confirmation that ‘we’ are O-bee K-bee from authorities who author blatant fiction before changing their water into wine. Who really wants to walk waist deep into the cesspool our society has become and accept responsibility? Isn’t it so much easier to let those who (‘who’ else but the sociopaths?) say they can fix it to do so rather than to face it ourselves? Well………what a fine mess we have on our hands now that ‘they’ screwed things up so badly. 

You can’t make this stuff up because it just wouldn’t be believable. But if the economechanical authority figures author up another alternative reality fiction and then present it as proven fact we blindly, begrudgingly or blissfully accept it until another palatable ‘proof’ proves otherwise. Especially if we wish to believe that our well being and safety depends upon believing their fiction is fact, a wonderful escape clause for those of us who outsourced our personal sovereignty long ago.

When we do not actively and continuously seek our inner knowing to vet externally perceived reality we are easily manipulated into accepting all sorts of nonsense that is passed off as ‘real’ reality. While as individuals we can at times be somewhat sane, as groups we are almost always maddeningly insane. The thing is that the madness of crowds always springs from within. It is our madness exponentially amplified, reflected and directed by the crowd that is the ‘madness of crowds’ we actually see.

We must stop pointing to the unsustainability of the math as proof of imminent collapse and recognize that our collective faith and belief, and the resilience of that faith and belief, is the true measure of the socioeconomic systems strength or weakness.

Chapter Three to follow soon.



Cognitive Dissonance 

Government Protects Criminals by Attacking Whistleblowers

It’s now obvious to everyone that – even though criminal fraud dominates Wall Street – the Obama administration refuses to prosecute white collar crime.

Ronald Reagan, George W. Bush, George H.W. Bush and Bill Clinton each prosecuted financial crime more aggressively than Barack Obama.

Of course, the lack of a fair and even-handed legal system destroys prosperity and leads to the breakdown of society.

National security claims are also used to keep financial fraud secret (and people who protest runaway criminality by the big banks are targeted as terrorists).  And when those in the private sector blow the whistle on potential crimes, they are targeted also.

But it’s not like the government isn’t aggressively using the legal system … it’s just using it to silence the truth.

Specifically, the Obama administration has prosecuted more whistleblowers than all other presidents combined.

Government employees also goes out of their way to smear whistleblowers, threaten reporters who discuss whistleblower information and harass honest analysts.

Indeed, even high-level government employees are in danger. For example, after the head of the NSA’s spying program – William Binney – disclosed the fact that the U.S. was spying on everyone in the U.S. and storing the data forever, and that the U.S. was quickly becoming <a href="” title=”a totalitarian state”>a totalitarian state, the Feds tried to scare him into shutting up:

[Numerous] FBI officers held a gun to Binney’s head as he stepped naked from the shower. He watched with his wife and youngest son as the FBI ransacked their home. Later Binney was separated from the rest of his family, and FBI officials pressured him to implicate one of the other complainants in criminal activity. During the raid, Binney attempted to report to FBI officials the crimes he had witnessed at NSA, in particular the NSA’s violation of the constitutional rights of all Americans. However, the FBI wasn’t interested in these disclosures. Instead, FBI officials seized Binney’s private computer, which to this day has not been returned despite the fact that he has not been charged with a crime.

Other NSA whistleblowers have also been subjected to armed raids and criminal prosecution.

After high-level CIA officer John Kiriakou blew the whistle on illegal CIA torture, the government prosecuted him for espionage.

Even the CIA director was targeted with extra-constitutional spying  and driven out of office.

Former constitutional lawyer Glenn Greenwald notes:

The permanent US national security state has used extreme secrecy to shield its actions from democratic accountability ever since its creation after World War II. But those secrecy powers were dramatically escalated in the name of 9/11 and the War on Terror, such that most of what the US government now does of any significance is completely hidden from public knowledge. Two recent events – the sentencing last week of CIA torture whistleblower John Kirikaou to 30 months in prison and the invasive investigation to find the New York Times’ source for its reporting on the US role in launching cyberwarfare at Iran – demonstrate how devoted the Obama administration is not only to maintaining, but increasing, these secrecy powers.


When WikiLeaks published hundreds of thousands of classified diplomatic cables in 2010, government defenders were quick to insist that most of those documents were banal and uninteresting. And that’s true: most (though by no means all) of those cables contained nothing of significance. That, by itself, should have been a scandal. All of those documents were designated as “secret”, making it a crime for government officials to reveal their contents – despite how insignificant most of it was. That revealed how the US government reflexively – really automatically – hides anything and everything it does behind this wall of secrecy: they have made it a felony to reveal even the most inconsequential and pedestrian information about its actions.


This is why whistleblowing – or, if you prefer, unauthorized leaks of classified information – has become so vital to preserving any residual amounts of transparency. Given how subservient the federal judiciary is to government secrecy claims, it is not hyperbole to describe unauthorized leaks as the only real avenue remaining for learning about what the US government does – particularly for discovering the bad acts it commits. That is why the Obama administration is waging an unprecedented war against it – a war that continually escalates – and it is why it is so threatening.


To understand the Obama White House’s obsession with punishing leaks – as evidenced by its historically unprecedented war on whistleblowers – just consider how virtually every significant revelation of the bad acts of the US government over the last decade came from this process. Unauthorized leaks are how we learned about the Bush administration’s use of torture, the NSA’s illegal eavesdropping on Americans without the warrants required by the criminal law, the abuses at Abu Ghraib, the secret network of CIA “black sites” beyond the reach of law or human rights monitoring, the targeting by Obama of a US citizen for assassination without due process, the re-definition of “militant” to mean “any military age male in a strike zone”, the video of a US Apache helicopter gunning down journalists and rescuers in Baghdad, the vastly under-counted civilians deaths caused by the war in Iraq, and the Obama administration’s campaign to pressure Germany and Spain to cease criminal investigations of the US torture regime.


In light of this, it should not be difficult to understand why the Obama administration is so fixated on intimidating whistleblowers and going far beyond any prior administration – including those of the secrecy-obsessed Richard Nixon and George W Bush – to plug all leaks. It’s because those methods are the only ones preventing the US government from doing whatever it wants in complete secrecy and without any accountability of any kind.


Silencing government sources is the key to disabling investigative journalism and a free press. That is why the New Yorker’s Jane Mayer told whistleblowing advocate Jesselyn Radack last April: “when our sources are prosecuted, the news-gathering process is criminalized, so it’s incumbent upon all journalists to speak up.”


Indeed, if you talk to leading investigative journalists they will tell you that the Obama war on whistleblowers has succeeded in intimidating not only journalists’ sources but also investigative journalists themselves. Just look at the way the DOJ has pursued and threatened with prison one of the most accomplished and institutionally protected investigative journalists in the country – James Risen – and it’s easy to see why the small amount of real journalism done in the US, most driven by unauthorized leaks, is being severely impeded. This morning’s Washington Post article on the DOJ’s email snooping to find the NYT’s Stuxnet source included this anonymous quote: “People are feeling less open to talking to reporters given this uptick. There is a definite chilling effect in government due to these investigations.”


For authoritarians who view assertions of government power as inherently valid and government claims as inherently true, none of this will be bothersome. Under that mentality, if the government decrees that something shall be secret, then it should be secret, and anyone who defies that dictate should be punished as a felon – or even a traitor. That view is typically accompanied by the belief that we can and should trust our leaders to be good and do good even if they exercise power in the dark, so that transparency is not only unnecessary but undesirable.


But the most basic precepts of human nature, political science, and the American founding teach that power exercised in the dark will be inevitably abused. Secrecy is the linchpin of abuse of power. That’s why those who wield political power are always driven to destroy methods of transparency. About this fact, Thomas Jefferson wrote in an 1804 letter to John Tyler [emphasis added]:

“Our first object should therefore be, to leave open to him all the avenues of truth. The most effectual hitherto found, is freedom of the press. It is therefore, the first shut up by those who fear the investigation of their actions.”

About all that, Yale law professor David A Schultz observed: “For Jefferson, a free press was the tool of public criticism. It held public officials accountable, opening them up to the judgment of people who could decide whether the government was doing good or whether it had anything to hide. . . . A democratic and free society is dependent upon the media to inform.”


There should be no doubt that destroying this method of transparency – not protection of legitimate national security secrets- is the primary effect, and almost certainly the intent, of this unprecedented war on whistleblowers. Just consider the revelations that have prompted the Obama DOJ’s war on whistleblowers, whereby those who leak are not merely being prosecuted, but threatened with decades or even life in prison for “espionage” or “aiding the enemy”.


Does anyone believe it would be better if we remained ignorant about the massive waste, corruption and illegality plaguing the NSA’s secret domestic eavesdropping program (Thomas Drake); or the dangerously inept CIA effort to infiltrate the Iranian nuclear program but which ended up assisting that program (Jeffrey Sterling); or the overlooking of torture squads in Iraq, the gunning down of journalists and rescuers in Baghdad, or the pressure campaign to stop torture investigations in Spain and Germany (Bradley Manning); or the decision by Obama to wage cyberwar on Iran, which the Pentagon itself considers an act of war (current DOJ investigation)?


Like all of the Obama leak prosecutions – see here none of those revelations resulted in any tangible harm, yet all revealed vital information about what our government was doing in secret. As long-time DC lawyer Abbe Lowell, who represents indicted whistleblower Stephen Kim, put it: what makes the Obama DOJ’s prosecutions historically unique is that they “don’t distinguish between bad people – people who spy for other governments, people who sell secrets for money – and people who are accused of having conversations and discussions”. Not only doesn’t it draw this distinction, but it is focused almost entirely on those who leak in order to expose wrongdoing and bring about transparency and accountability.


That is the primary impact of all of this. A Bloomberg report last October on this intimidation campaign summarized the objections this way: “the president’s crackdown chills dissent, curtails a free press and betrays Obama’s initial promise to ‘usher in a new era of open government.’”


The Obama administration does not dislike leaks of classified information. To the contrary, it is a prolific exploiter of exactly those types of leaks – when they can be used to propagandize the citizenry to glorify the president’s image as a tough guy, advance his political goals or produce a multi-million-dollar Hollywood film about his greatest conquest. Leaks are only objectionable when they undercut that propaganda by exposing government deceit, corruption and illegality.




As FAIR put it this week, whatever else is true: “The only person to do time for the CIA’s torture policies appears to be a guy who spoke publicly about them, not any of the people who did the actual torturing.”

Despite zero evidence of any harm from his disclosures, the federal judge presiding over his case – the reliably government-subservient US District Judge Leonie Brinkema – said she “would have given Kiriakou much more time if she could.” As usual, the only real criminals in the government are those who expose or condemn its wrongdoing.


Exactly the same happened with revelations by the New York Times of the illegal Bush NSA warrantless eavesdropping program. None of the officials who eavesdropped on Americans without the warrants required by law were prosecuted. The telecoms that illegally cooperated were retroactively immunized from all legal accountability by the US Congress. The only person to suffer recriminations from that scandal was Thomas Tamm, the mid-level DOJ official who discovered the program and told the New York Times about it, and then had his life ruined with vindictive investigations.


This Obama whistleblower war has nothing to do with national security. It has nothing to do with punishing those who harm the country with espionage or treason.


It has everything to do with destroying those who expose high-level government wrongdoing. It is particularly devoted to preserving the government’s ability to abuse its power in secret by intimidating and deterring future acts of whistleblowing and impeding investigative journalism. This Obama whistleblower war continues to escalate because it triggers no objections from Republicans (who always adore government secrecy) or Democrats (who always adore what Obama does), but most of all because it triggers so few objections from media outlets, which – at least in theory – suffer the most from what is being done.

And see this.

When the government acts like a “protection racket” – and pretends that the truth is too complicated or dangerous for the public to know – we’re in real trouble.

As Kiriakou points out:

President Obama just like president Bush has made a conscious decision to allow the torturers, to allow the people who conceived of the tortures and implemented the policy, to allow the people who destroyed the evidence of the torture and the attorneys who used specious legal analysis to approve of the torture to walk free.




In this post 9/11 atmosphere that we find ourselves in we have been losing our civil liberties incrementally over the last decade to the point where we don’t even realize how much of a police state the United States has become.Ten years ago the thought of the National Security Agency spying on American citizens and intercepting their emails would have been anathema to Americans and now it’s just a part of normal business.


The idea that our government would be using drone aircraft to assassinate American citizens who have never seen the inside of a courtroom, who have never been charged with a crime and have not had due process which is their constitutional right would have been unthinkable. And it is something now that happens every year, every so often, every few weeks, every few months and there is no public outrage. I think this is a very dangerous development.

The Putrid Smell Suddenly Emanating From European Banks

Wolf Richter

By now we should have gotten used to the odor emanating from banks—bailouts, money laundering, Libor rate-rigging, the other misdeeds. But in Europe over the last few days, it was particularly dense.

A nauseating whiff came from Barclays today, when it leaked out that it has been under investigation by the Financial Services Authority and the Serious Fraud Office in Britain for illegal fundraising in 2008. Allegedly, the bank secretly loaned £5.3 billion ($8.4 billion) to one of Qatar’s sovereign wealth funds, which then turned around and with great public fanfare pumped that money back into Barclays—a scheme to raise capital on paper to escape a government takeover during the financial crisis.

Then Crédit Agricole, France’s third largest bank, announced €3.8 billion ($5 billion) in write-downs, mostly of “Goodwill” due to the “present macro-economic and financial environment.” Goodwill reflects money paid out for certain items in excess of their value—an expense that, by a quirk of accounting, is temporarily parked as an asset on the balance sheet to be expensed eventually. After the write-off, the bank will still have about €14 billion of Goodwill clogging up its balance sheet, and more write-offs are to come. It already wrote off €2.5 billion last year, when it agreed to sell its stake in the Greek bank Emporiki for €1, which it had acquired with impeccable timing in 2006 for €2.2 billion.

Greek banks… oh my! They’re being investigated by Greek financial crime prosecutors for €232 million in loans that they handed out to the ruling parties, Prime Minister Antonis Samaras’ New Democracy and the Socialist PASOK. “Suspected crimes against the state,” a court official called it.

The state funds political parties based on their share of the vote, and both parties pledged hoped-for state funding as collateral for these loans. But during the election last June, New Democracy’s share of the vote dropped from 33% to 29% and PASOK’s from 43% to 12%. With it, state funding suddenly collapsed, and some of the loans are turning sour.

Bitter irony: teetering Greek banks, hoping at the time to get bailed out by taxpayers in other countries, funded Greek political parties that then negotiated the bank bailouts with the EU for the benefit of bank investors [likewise, Proton Bank got bailed out in 2011 though it engaged in fraud, embezzlement, and money laundering, when a bomb exploded…. European Bailout Fund For Greek Money Laundering And Fraud]

Still on Friday, SNS Reaal, fourth largest bank in the Netherlands, was bailed out again—after already having been bailed out in 2008. This time, it was nationalized. The €10 billion package would cost taxpayers initially €3.7 billion. Stockholders and junior debt holders lost out too, but holders of senior debt and covered bonds were made whole.

There is never an alternative to bailouts. A collapse “would have unacceptably large and undesirable consequences,” according to Finance Minister Jeroen Dijsselbloemsaid. As brand-spanking new President of the Eurogroup, he thus confirmed: bank bailouts will be the norm in the Eurozone.

They’re worried that letting even a smallish bank fail could take down the electron-thin confidence in the entire financial system—just when the debt crisis has been officially declared “over.” And so, based on the operative set of rules, the Dutch government shanghaied its strung-out taxpayers, whose belts are already being tightened by austerity, into paying, once again, for the misdeeds of the bankers.

In Italy, a billowing scandal got new fuel. It kicked off with a criminal investigation into Monte dei Paschi di Siena, Italy’s third largest bank, for alleged market manipulation, false accounting, obstructing regulators, and fraud. The bank used derivatives to hide losses during the financial crisis, but these losses are now seeping from the woodwork. So Standard & Poor’s just cut the bank’s credit rating, fearing that the announced losses may just be the tip of the iceberg.

That form of financial engineering came to light when new management took a gander at the books. Now a government bailout is in the works. Because there is never an alternative. Taxpayers tighten your belts!

And on Thursday, Deutsche Bank waded deeper into its quagmire of “matters,” among them the Libor rate-rigging scandal, which might cost it €2.5 billion, and the carbon-trading tax-fraud scandal that broke with a televised raid by police on its headquarters. So, more write-downs are due, and the bank announced a €2.2 billion loss for the fourth quarter. “In 2013,” said co-CEO Jürgen Fitschen reassuringly, “we will be confronted with more developments in these and other matters.”

And other matters! More revelations to come. Already, there are estimates that these misdeeds would eventually amount to €10 billion. Now suddenly: “Building capital is our top priority,” said the other co-CEO Anshu Jain. He wants to do it without diluting current stockholders. “But in this uncertain world, I cannot exclude anything,” he mollified his audience.

Turns out, the bank intends to get rid of €16 billion in high-risk credit default swaps by end of March. It might boost its core Tier 1 capital ratio from 8% to 8.5%. More such sales are planned—a wholesale dumping of its credit correlation book, an outgrowth of the financial engineering it used to hide whatever needed to be hidden.

The bitter irony of the financial crisis is just how common the putrid smell has become since. And how routine it has become for these inscrutable institutions with their opaque financial statements to transfer risks and losses to the people. In the US, too, the smell refuses to evaporate. And nothing indicates that this will change anytime soon.

Weary of all this, the French—whose economy is spiraling deeper into crisis—expressed disdain for their political class; they’re dreaming of authoritarian leadership, a “real leader” who would clean up the mess and “reestablish order.” Read…. Could 87% of the French Really Want A Strongman To Reestablish Order?

The Government Generously Offers To Help You "Manage” Your Retirement Account

Via Michael Krieger of Liberty Blitzkrieg blog,

[ZH: We have discussed this threat over the past several years (must read).] The obvious concept is that when the government runs out of money, or they face a drying up in interest for its debt, they will come for the $19.4 trillion in American’s retirement accounts.  It seems that day may be finally drawing near.

I stopped contributing to my 401k back when I worked at Bernstein, and I will probably now have to give more serious consideration whether I want to take the penalty and move the funds out of my retirement account entirely.  I haven’t made any decisions, but will be watching closely.

I’m sure the government is just trying to protect your retirement account from terrorists.

From Bloomberg:

The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments.


That’s one of the things we’ve been exploring and are interested in in terms of whether and what authority we have,” bureau director Richard Cordray said in an interview. He didn’t provide additional details.


The bureau’s core concern is that many Americans, notably those from the retiring Baby Boom generation, may fall prey to financial scams, according to three people briefed on the CFPB’s deliberations who asked not to be named because the matter is still under discussion.


The Securities and Exchange Commission and the Department of Labor are the main regulators of U.S. retirement savings vehicles and funds. However, the consumer bureau — established by the 2010 Dodd-Frank Act — sees itself as a potential catalyst for promoting a coherent policy across the government, the people said.

Gossip and views about privacy, gold, wealth, asset preservation