CRYPTOGON READER CONTRIBUTES $100
July 10th, 2007Cryptogon reader NH has sent $100. Thank you.
How Indebted Americans Are Giving up Their Independence
July 9th, 2007Via: Money Week:
America may be referred to as the “Home of the Brave†because when the bills arrive it takes a lot of courage to open them up, especially when you must turn around and face your wife and kids with a straight face. When it comes to paying bills these days, America just doesn’t feel like the land of the free any longer. To be truly free you must be debt-free; if you’re not, your creditors own you.
Americans now owe a staggering $16 trillion dollars ($2.4 Trillion in personal loans, and $13.6 trillion borrowed from their house). Yet, as a society, we just can’t seem to get away from accumulating debt, and have become nothing short of debt slaves. The American consumer continues to abuse credit that has been offered to them, and pay incredibly high interest charges every month, without blinking an eye. To maintain a certain lifestyle that would ordinarily be unattainable with their current income levels, our nation of consumers is slowly but surely being eaten alive by our own conspicuous consumption.
The Ants of Gaia
July 9th, 2007Joe doesn’t seem to acknowledge the kill off of the die off, but I’m not sure that it matters anymore.
Via: Joe Bageant:
The hearts of even our most avowedly thriving cities are just a dead, reduced to nothing more than designated spending zones, collections of bars and banks and overpriced eateries lodged at the center of a massive tangle of overpasses and freeways designed for a nation of soft people hurtling themselves through the suburbs in petroleum powered exoskeletons in search of fried chicken, or into the city for the lonely monetized experience called urban nightlife. Which is no life at all, but rather posturing in lifelike poses amid simple drunkenness and engorgement.
We allow ourselves to imagine the worst is somewhere in yet another future so we can continue without owning decision. Love of comfort being the death of courage, we continue the familiar commoditized life, the only one we have known. Is it not true that our entire understanding of courage as we know it is about braving some unknown? About making the socially unaccepted and dangerous choice? Stepping forward in the face of the wars and evil mechanics of our own particular time?…
…Evil men seeking empire did not make us or the world this way. We made their existence possible through our denial, love of ease and non accountability.
Research Credit: Idleworm
Gore Vidal Installs Solar Power System, City of Los Angeles Makes Up an Excuse and then Starts Ripping Out Wire
July 9th, 2007I had initially passed on this story, but four of you submitted it. First of all, being from Orange County and going to college in Los Angeles, I witnessed the madness first hand. In my opinion, anyone who is able to leave Los Angeles or Orange County, but doesn’t, is insane. I’ve written the place off entirely. It’s a crowded, polluted, dry, hot death trap; a vague and distant nightmare to me now. It’s difficult for any news of the madness in that place to cross the threshold of significance in my book anymore. (See Grass Under Renovation and Building a Clothes Line.)
Additionally, I just don’t see bogus crackdowns by criminal local authorities as worth mentioning now. (Do you also want to see stories about cops beating up old ladies for not maintaining their lawns to Nazi specifications?) This crap is the order of the day in the U.S. They just happened to drop the bomb on a famous limousine liberal author this time.
I’m refusing to look at the base level of the meat grinder. Why? That level of analysis isn’t useful anymore for the U.S. If you don’t get it by now, you’ll never get it. I’m not saying that people shouldn’t report these things, but, after reading this shit for 20 years, I’m here to tell ya’: Stories about fascism do nothing to stop fascists.
Only you can stop fascism. And reading/writing about it doesn’t count. (See Defunding Fascists.)
Finally, with regard to this Gore Vidal situation, his total ignorance on electricity generation in California really put me off this story. It makes me sad when so-called dissidents are so clueless. Someone like Gore Vidal should know better. Saying that California is burning oil to produce electricity makes anyone with anything to do with alternative power look like an idiot.
Vidal says, “Utility companies have no intention for anyone to use solar power so long as there’s a drop of oil anywhere in the world.”
For the record, these are the electricity generation methods in California:
Natural Gas 41.5%
Nuclear 12.9%
Large Hydro 19.0%
Coal 15.7%
Renewable 10.9%
I assume Vidal isn’t using BP solar panels… * sigh * And, of course, humans will never extract the last drop of oil from the earth, but we might soon be approaching the point where supplies of economically viable oil are depleted. Yes. Details, details.
In summary, the issue isn’t that local authorities are clueless, fascist goons—for f#*@s sake, tell me something I don’t know—but rather, what you’re going to do about it.
When your only response to fascism is strong words, that equals complicity in my book. (Members of the U.S. Congress, I know you’re reading this…)
Via: Truthdig:
Note to public utility companies: Do not cross Gore Vidal. A week after representatives from the Los Angeles Department of Water and Power came to his Hollywood Hills home to inspect (and then shut down) his newly installed solar power system, Vidal is still “on the grid,†unable to use solar until the system is fully re-inspected. As his fans would expect, the puissant author and tough customer has let fly with some strong words about the utility company, the state of California and the state of the country at large.
China Exporting Ecological Disaster to the World
July 8th, 2007Via: Spiegel:
Can the environment withstand China’s growing economic might? As one of the planet’s worst polluters, Beijing’s ecological sins are creating problems on a global scale. Many countries are now feeling the consequences.
FTC Abandons Net Neutrality
July 8th, 2007Via: Crooks and Liars:
The Federal Trade Commission (FTC) has decided to abandon net neutrality and allow telecoms companies to charge websites for access.
The FTC said in a report that, despite popular support for net neutrality, it was minded to let the market sort out the issue.
This means that the organisation will not stand in the way of companies using differential pricing to make sure that some websites can be viewed more quickly than others. The report also counsels against net neutrality legislation.
Research Credit: Sketch at Move Quiet
Military and Police Technology Sharing
July 8th, 2007Via: Salt Lake City Weekly:
At the recent National Sheriff’s Association convention in the Salt Palace Convention Center in Salt Lake City, the triad of military technology, corporate manufacturing and law enforcement symbolized in RoboCop’s Ed-209 was more than just fiction.
Besides six days of seminars on everything from in-custody deaths to character building, the annual gathering of sheriffs also acts as a marketplace for law-enforcement gadgetry. Everything was on offer in the exhibition hall: tracking devices, facial-recognition technology, communication networks, paddy wagons, riot gear, surveillance equipment and guns—lots of guns.
But most conspicuous were the numerous permutations of America’s military machine—all at the disposal of the 6,000-plus sheriffs on hand. For example, Chris Kincaid, a senior consultant with the Department of Defense’s Technology Transfer Program, was present to aid law enforcement agencies with what he calls “technological transfer.†The federal program was set up in 2002 to aid the transfer of technology and equipment from the military to law enforcement.
War Costs Soar by a Third; Total Could Top $1.4 Trillion
July 8th, 2007Mission accomplished.
Via: Wired:
It’s not just the troops that are surging. War costs are up for American operations in Iraq and Afghanistan* — way up, more than a third higher than last year. In the first half of this fiscal year, the Defense Department’s “average monthly obligations for contracts and pay is running about $12 billion per month, well above the $8.7 billion in FY2006,” says a new report, obtained by DANGER ROOM, from the non-partisan Congressional Research Service.
Garbage Bonds & Bonfires
July 6th, 2007This is an outstanding essay. I’ve included a few passages below, but these don’t do the piece justice. I highly suggest reading it in its entirety.
Via: 321Gold:
For years the homestead, the house property has been considered the ultimate inflation hedge asset. Sure, price inflation wrecked havoc in the USEconomy, but the nation of citizens had a home which was rising in value to offset the undermine from inflation. Now the leaders point to still substantial gains in home equity from the last six years when the housing bubble was erected. In two to three years, they will sing a different tune, since most of the gains from the entire six years, nearly $10 trillion in additional home equity, will evaporate. A strong claim. Just watch as it happens. Call me crazy, send me nasty emails, but not a single forecast of mine has been outlandish in hindsight. This devastation will unleash the extraordinary economic recession, the unending bond crisis, the USDollar global upheaval, and the political response. In a matter of several months to a couple years, a growing sense of chaos will take over the landscape. After chaos intensifies, a totalitarian state is a certainty. The cry will be for order, not growth or job preservation. The next painful phase will involve inflationary recession, not stagflation. The powers mismanaging matters of state and banks will hope for stagflation, and not see it except in this falsified statistics.
The USEconomy has already handed its manufacturing base to Asia. Banking officials and economic counselors have leaned upon the residential real estate as foundation for the entire consumption driven economy, against all sacrosanct wisdom in full heretical style. The price to pay will be economic decline, lost wages, a lower standard of living, and rising chaos. People will lose their homes and lose their jobs. People unfortunately will volunteer to forfeit their freedoms in order to maintain order. They will eventually beg for order when the suburbs are invaded. When? Something like by year 2010. What lies around the corner is the end of the United States of America as we know it.
…
If an auction fails, what is the value of items raised for sale which do not sell? This is the key question asked after the failed auction by Merrill Lynch and Bear Stearns. They tested the market, sought price clarity, and received the worst of all possible news. NO VALUE. The exercise is surely to be repeated in subsequent months. How does a market respond? The process within more easy reach require stocks to halt trading during disequilibrium imbalance, as sellers mass, buyers vanish, and price is unclear. The stock reopens a day or two later, after news sets the stage more clearly, usually with a 20% to 50% price cut. Imagine that in the mortgage bond arena, a 20% to 50% slice off principal value, depending upon the type of bond, like subprime or Alt-A or a shade of anything below sterling ‘A’ rating. The real fun will be with the derivative leveraged paper, where the guys in propeller hats set up 20:1 leverage, are stuck with cancerous assets behind the paper, and value is without any question whatsoever negative. Why? Because a 5% loss employing 20-fold leverage produces a total wipeout of the original investment. A 20% loss, by the way, using again the 20-fold leverage, produces a 400% loss, meaning a total wipeout plus added losses by three times more. The power of leverage cuts both ways, with profit and loss.
…
Without a doubt the USDollar is the weakest link, as numerous holes must be plugged to in the leaking dike. Gold and silver must be prevented from a zoom rise in price, since they serve as warning signals. Crude oil and natural gas must be prevented from a zoom rise in price, since they directly strain the USDollar. The long-term interest rates must be prevented from jumping higher. The stock market indexes must be prevented from falling sharply, since the public sees stocks as a visible signal of wealth. The USDollar must be prevented from a sudden freefall. The entire Wall Street and US Federal Reserve leadership is in the process of soiling their skivvies. The best investment might be in Depends Adult Diapers. These guys, leverage mechanics in financial engineering, destroyers of economies, snake oil salesmen of cancer ridden asset bonds, they are sweating bullets, pooping their pants, staring into space, stunned by failed auctions and uncertain valuation, wondering about leverage implications and debts called by creditors. These are no longer exaggerations written in tabloids, but rather front page news items.
…
The untold story is that the strain on credit derivatives has put tremendous pressure on the USDollar, which cannot hold. The sale and liquidation of countless billion$ in credit derivatives will deliver a series of unending blows to the USDollar, sure to crack before long. With $120 trillion in notional value for credit derivatives, figure with 30:1 leverage that $4 trillion in original equity tied to margin investment is involved. The FOREX markets (foreign exchange for currency trades) involves between $1 trillion and $1.5 trillion in daily volume, less on holidays and more during crises. We have a crisis building. The USDollar in my view cannot be defended in the face of a credit derivative crisis. Look for coercion next, in the form of threats to those wishing to liquidate vast tranches of bonds. To expect no interweaving of military activity with the coercion would be naïve. It is a certainty. It has past precedent.
Wall Street Journal: Money Meltdown
July 6th, 2007Following on the heels of the admission by the Council on Foreign Relations that the U.S. Dollar is, “An absurdity… supported only by faith,” the Wall Street Journal discusses the current “Money Meltdown.”
Let me consult my Magic 8-Ball: I see fewer national currencies in your future.
Via: Wall Street Journal:
Interest rates are on the rise in the Eurozone, Great Britain and Japan, as well as in India and China. But the Federal Reserve has again elected to keep its target rate on hold despite repeated assertions that inflation risk is still its predominant concern. Are central banks abroad recognizing a threat that their American counterpart has yet to acknowledge?
The Fed seems to believe that inflation has something to do with “excessive” demand. Although it admits that inflation is already running at an unacceptable pace, the majority of its policy officials cling to the belief (or hope) that the U.S. economy is slowing down, alleviating the inflation threat. Both of these assumptions are inconsistent with historical evidence.
What’s more, the recent rise in the euro and sterling relative to the dollar has obscured the fact that the world economy has embarked on another classic “run” on paper currencies that is driving inflation up everywhere. For several years now, as was the case in the 1970s, all the world’s currencies have been depreciating relative to stable benchmarks such as gold. Since the end of 2001, these declines have ranged from 38% (in the case of the euro) to nearly 60% (in the case of the dollar).
Why then has the pace of consumer-price inflation to date been so much less noteworthy than the pace of currency depreciation against gold? The answer lies in the timing: Gold is a fast-moving leading indicator, whereas consumer-price indices are slow-moving indicators that lag far behind. We all learned in the period between 1975 and 1985 that consumer prices do eventually catch up. It is the size of the move in the gold price, rather than in the consumer price index, that is a true and timely indicator of the magnitude of the inflation problem.
In 1975, Yale economist Richard Cooper described the process that now appears to be driving world inflation as “a general loss of confidence in money, a psychological mood that can be transmitted across national boundaries . . . [that will] lead individuals to try to convert their assets into physical form: goods or housing or real estate.”
…
Inflation is not intrinsically global — it is obvious that some countries experience more inflation than others. But currencies depreciating against gold across the board is a sign of world-wide inflation — and it has begun to set off alarm bells in many major economic capitals. But in Washington, our own central bankers remain placidly confident that everything will turn out all right.
Unsustainable peacetime spending is a much slower process than the unsustainable war spending. Far from sudden death, currencies these days are facing death by a thousand cuts. The unfortunate result is that the current crisis of confidence in paper money goes largely undiagnosed by the bulk of economists and policy makers.
