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IMF as the key institution for neoliberal debt enslavement

Beware of Americans bearing loans

Finance is war. Finance is the new kind of warfare, using finance and forced sell-offs in a new kind of battlefield

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Introduction

IMF is not the agency to help other countries with the economic development. Under neoliberalism (and that means since 80th) it became the major instrument for redistributing wealth up and enslaving countries with debt that can't be repaid.  As a tool for the redistribution it works extremely  efficiently both on local level (producing local oligarchs) and on international level -- ensuring prosperity of G7 and USA in particular.

The U.S. economy has benefited immensely from its ability to extract tribute from other nations, including the U.S. financial community's probable engineering of crises in developing nations in order to scoop up devalued assets on the cheap.  One of the most important instruments of this extraction, plunder of weaker nations, is IMF.

The standard IMF policy is to approach countries in financial crises with the same rather crude recipies that favour large Wall Street banks. In this case IMF staff acts like like vulture fund managers  rather than economists. They try to force a country with a fiscal deficit to reduce government spending, privatage industries and take on additional debt. Reducing government spending reduces aggregate demand, which in turn reduces government income, and make the deficit worse. So the country need to take more loads, inflicting more pain on the population. The reason that the IMF does this, is that it is meant to "restore confidence in the markets". But once a crisis starts, foreign investors tend to bail out anyway, so all it buys the country is a small breathing space before default.  Country is better off introducing strict capital controls and accepting the fact that speculative foreign investors are gone. It should not allow them to enter the market in the first place and focus on growth.

The other thing is the immense level of hypocrisy of the US administrations that control IMF, which forced policies on emerging markets, which it would never accept itself.

In fact, the IMF more or less took instructions from the US Treasury during the 1990s, and certainly my sense at the time was that some  IMF staffers were very frustrated at the policies that the US government forced them to follow. The point though, is that while the US government was battling the balanced budget amendment at home, on the reasonable grounds that it limited their freedom to manage demand, they were essentially enforcing a balanced budgets on the emerging markets via IMF condition for loans. They are forcing central banks to focus only on inflation. They are forcing emerging markets to open their markets, while protecting US farmers from imports.

The economic restructuring programs imposed on poor countries has benefited U.S. and other foreign investors while creating a small but powerful class of wealthy individuals (fifth column of neoliberalisation) in China, Mexico, South Korea, Ukraine, Russia, etc.

Unsustainable level of debt creates the potentially catastrophic financial situation for those countries that take IMF loads.

Debt that can't be paid back, won't be paid back. That simple idea is the key to debt enslavement of people and nations.  One of the key mechanisms is ensuring that loads to state were looted by local oligarchy, turning being eye to money laundering or, as was the case in post 1991 Russia, actively supporting money laundering as the way to decimate former opponent and drive it into vassal status.

There is a strong alliance of Western governments and local oligarchs in this dirty game with IMF serving as an enforcer of debt slavery enabling buying countries assets by transnational for penny on a dollar.     Corrupt officials burden taxpayers with unsustainable amounts of debt for unproductive, grossly overpriced projects.

The TPP and TTIP are integral initiatives in this effort of extending financial obligations, debt, and control.

This is why these corporatists and statists hate gold and silver, by the way. And why it is at the focal point of a currency war. It provides a counterweight to their monetary power. It speaks unpleasant truths. It is a safe haven and alternative, along with other attempts to supplant the IMF and the World Bank, for the rest of the world. So when you say, the Philippines deserved it, Iceland deserved it, Ireland deserved it, Africa deserves it, Jefferson County deserved it, Detroit deserved it, and now Greece deserves it, just keep in mind that some day soon they will be saying that you deserve it, because you stood by and did nothing.

Because when they are done with all the others, for whom do you think they come next? If you wish to see injustice stopped, if you wish to live up to the pledge of 'never again,' then you must stand for your fellows who are vulnerable. The economic hitmen have honed their skills among the poor and relatively defenseless, and have been coming closer to home in search of new hunting grounds and fatter spoils.

You may also find some information about the contemporary applications of these methods in The IMF's 'Tough Choices' On Greece by Jamie Galbraith.

The basic mechanism of debt enslavement

The whole mechanism of debt enslavement is polished to perfection on developing countries.

  1. Questionable projects. Often peddled by IMF. Sometimes by EU. Sometimes of home origin. In case of Greece it was basically spending big on arms   http://www.analyzegreece.gr/interviews/item/145-frank-slijper-an-insane-level-of-military-spending-led-greece-to-massive-debts-for-weapons-does-not-need The US is the major supplier of Greek arms, with the Americans supplying 42 per cent of its arms,  Germany supplying 22.7 per cent, and France 12.5 per cent of Greece's arms purchases.
  2. The country elite takes large loans for those projects or takes loans to placate the population who is sliding into neoliberal poverty/unemployment swamp of poverty and unemployment in order to survive politically.
  3. Part of the money is immediately stolen by local neoliberal oligarchy (which profess "greed is good" religion with probably more enthusiasm then their counterparts) and quickly repatriated to Western banks.
  4. The rest is partially wasted due to various factors including mismanagement, nepotism, the fact that equipment and often materials were bought from the country that gave the loan at inflated prices.
  5. The net result of the project is growth of the debt.
  6. Bank crisis
  7. Conversion of private loans into state debt (according to standard neoliberalism mechanism of wealth redistribution "appropriate gains, shift losses to public")
  8. Austerity regime is enforced which guarantees that this condition is a permanent one.
  9. The country became a cheap supplier of the raw materials and workforce to G7.

 

 Confessions of an Economic Hit Man

Here are some relevant Amazon reviews of the book Confessions of an Economic Hit Man  that discusses IMF policies since 1980th.

gordon macgregoron May 2, 2015

IMF forced lending to poor countries of sums far in excess of their needs ...

Absolutely fascinating, pulling back the veil of the inner workings of the IMF as it does. Confirms a lot of things people have long suspected and been shouted down for voicing.

Shows the IMF as an organization bent on capturing the resources of countries around the world via various highly unethical means. e.g forced lending to poor countries of sums far in excess of their needs or means, for inappropriate purposes, leading to big profits for Western firms, the beggaring of the recipient nations, and forced capture of natural resources by large corporations. Surprising that the IMF has not been subject to deep investigation by the UN after this expose.

johnnyjohnnyon April 25, 2015

learn what's going on. read this book. gives a clue to MONSANTO's model of world domination

truly a remarkable book that has been proven with events and facts that have come out since the book was written back in the day.

the model of economic control, back in the good ole days when the International Monetary Fund & U.S. congressionally funded loans to third world countries was the way to pull the strings, and get our largest corporations huge projects that third worlders didn't need and couldn't pay for...but brought the bucks home.

if you ever had a suspicion about recent wars, the billion$ they brought to large contractors, and the reason for those interventions, go back to the early days of this model of international control from someone who was there. and yes, halliburton (aka Kellogg Brown and Root back then) was involved.

James Kenney on April 1, 2015

Should I simply take him at his own word, that he is a liar?

This is a very believable book on a topic of vital importance to the world today: the extent to which "economic development aid" is designed not to benefit the target country, but to ensnare it into the global culture as a debtor nation with assets never designed to be profitable, but merely to serve as an "economic gateway drug".

Somehow, though, while the book is eminently readable, and a bit unnerving, I just couldn't shake off a feeling that I was being "had", by Mr. John Perkins. Look at the number of reviews here! Clearly, this book touched a nerve...but if the author is as unscrupulous as he claims to be (or to have been, since he also claims to have experienced a remarkable conversion, like Paul on the road to Damascus), a fundamental question arises: why should we believe him?

This question is even more essential, since many of us who would even read such a book believe in our hearts that, yes, American capitalism, aided by the IMF, and the World Bank, is seeking to enslave the world. Of course! It's almost a given, an article of faith. No wonder the rest of the world hates us!

I too felt the lure of Perkins' mesmerizing description of an unspoken conspiracy to take over the world by bankrupting it. Certainly, the events of 2008 and 2009 showed the moral bankruptcy of the Big Banks and those who cynically packaged sliced and diced debt into impossible to understand financial instruments, then peddled them to school boards and public pension plans.

Now that I come to review the book, though, I almost feel as if I should wash my hands first. Just picking it up, seeing its jaunty cover, remembering its schmaltzy "spy coming in from the cold" ending, I feel...taken in. I don't know why I feel that way, but the feeling is definitely there. There is something exploitive about this book, as if the author had not changed his skin, only his target: as if now, instead of ensnaring struggling nations, he is ensnaring readers all too willing to believe the worst about ourselves and the economic system in which we too are ensnared.

Even the title sounds phony. Perkins may well be right, he may well be telling it like it is, he may have become a champion bravely taking on a system he helped create, a modern David fighting an economic Goliath. Heavens knows, after stories of regulators sniffing cocaine off a toaster oven with those they are supposed to be regulating, nothing seems unbelievable, and in a sense this book sounds almost inevitable, natural, and important.

It may be. But one of the things I was taught as a historian, is to consider your sources, and the chief question is, how credible are they? When a self-proclaimed liar, swindler and cheat tells me the "system is rigged", should I believe him? Or should I simply take him at his own word, that he is a liar?

I gave this ugly tale 4 stars simply for readability. Fact or fiction, it is certainly that: readable.

DH Koester on March 24, 2015

Truth Enslaves

Well, well, well---another piece to the puzzle as to what constitutes the United States of America!

Besides the curse of blood-stained hands from endless wars of aggression there is another sinister side to this country's quest for empire and world domination--the enslavement of countries and peoples through cleverly devised debt imposition--the same method our government uses on its own people. This debt imposition on foreign countries serves to enrich foreign rulers and US corporations while impoverishing the common people.

Perkins was one of the people--a cog in the wheel --that made it all possible and when his conscience finally got the better of him he wrote a book about it.
Students will not read about these economic hit men ion any American textbook. Nor will they, as adults, read about it in any periodical or hear about it on any newscast. Politicians will not tell them about it nor will their religious leaders. Yet there is this book by John Perkins describing the process in detail. But those in power--those responsible for this immoral conduct--will allow it to be published and made available to the public without fear of reprisal or consequences--just as they have the countless other books that have spoken truth to power detailing corruption, war-making and deceit by those in the highest offices.

Why?? Because the average citizen in this country doesn't care one iota about anything that he perceives as not directly affecting the welfare of himself or his family. That plus the fact that very few people will ever hear of or read this book. People don't read any more--they are plugged into their machines of instant gratification and get the bulk of what they think is news from inane sources such as the Letterman show. Even if some do read it, they will soon forget and move on--continuing with their mundane lives completely oblivious to the world that is suffering and burning outside their doors.

And me?? I know the truth--but even those who know the truth, they are powerless. There is nothing that can be done to stop the insanity. It is like death---Death eventually smiles at us all and the best a man can do is smile back.

I give this book 5 Stars not because it was particularly well written but because it informs in a world desperately in need of being informed. Read it if you will but with the understanding and full knowledge that the truth shall not set you free.

"And There I Was" by DH Koester

David Lupo "David Lupo" on February 21, 2015

Do you wonder why the world hates us? Read this book.

When I was in college, I took another course after Sociology 101, called Social Issues. It was a great course, eye-opening, but sad, because I learned about how skewed the world really is today. There were discussions on the Ford Pinto death-trap story, and stories about how grocery stores sell third-rate products at high prices, to keep the poor poor. There were other stories about how the corporation wields great power over the average citizen. I went to college in the 80s, long after we were told lies about the Great Oil Shortage in the 70s, when oil companies made a killing.

The book by John Perkins gives the historical background of how our government, working with the corporation has done some nasty things in recent decades to places around the globe. Economic Hit Men, and those in league with them have played national leaders against their people for the great financial gain that the US reaps. The corporation not only wields great power over the US citizen; it seeks this same control in the world. John Perkins highlights how this has played out in his corporate life, to the people that he knew.

I also notice that despite the harm he caused as an EHM, he escapes any sort of punishment, since he is spilling the beans on how the game is played, and has been played across the globe. That was a drawback. But today he is trying to do better things for the good of humanity, and that has to count for something.

White Rabbiton January 7, 2015

soft-minded lola granola platitudes

This book can be summarized in one sentence: America "forces" loans on third world countries based on inflated projections of resulting economic growth, that we know the recipient country will never be able to repay.

we then leverage their debt to strong-arm collateral benefits such as construction and service contracts (for the industry they got loans to build) or use their land for military bases, thereby increasing and securing our growing empire.

Perkins says this on every page of his 220 page book.

there is NO analysis or explanation of why development is automatically bad, and preserving rain forests and shaman lifestyles is automatically good, and even if it is good, why it is our problem, as a sovereign nation, to devote our resources to preserving other peoples' lifestyles. i am not asserting that industrial development is automatically "good," but there is simply no thoughtful analysis of the issues at all. Nor is there any nuts-and-bolts explanations of how he structured the economic deals that are supposedly so wicked.

There is just a lot of soft-minded liberal clap-trap about "using less oil; reading a book instead of going shopping; "dreaming" the world into existence; and -- you guessed it -- "shapeshifting." While I doubt any reader of a non-fiction book without pictures with "economic" in the title thinks that industrial development is an unmitigated boon, there have always been significant discrepancies in wealth throughout history, in every culture, country, and time, and there has always been tension (& disruption) in "progress" in any form.

Perhaps there are reasons for this besides the greed and evil of white european males, especially since the "haves" have not always been white or European (and sometimes not even male). Even (or especially) in underdeveloped countries, there are LOTS of people who would prefer medicine and basic sanitation to relying on shamanistic rain dances when their children are sick.

There are compelling and undeniable reasons why manual workers get paid less than highly specialized ones, and simply reiterating Marx's Communist Manifesto is not convincing to any thinking person, or to anyone who clawed their way out of those countries that tried to implement his pipe dream. Reminds me of the rebels' kvetching in Monty Python's Life of Brian: "Well, except for the roads, and the aqueducts, and education, and bread, and medicine, and peace, and security, what else have the Romans done for us?"

 A. Kumaron January 1, 2015

Read it to get a general idea of aid programs but discard personal anecdotes as fiction

The book is clearly a combination of fact and fiction. The facts are based on the well known criticisms of the IMF and World Bank and how they have destroyed various countries. The fiction part is where the author speaks of personal experiences.

Two points give away the fact that the book is semi-fiction. The first is that the author has only used criticisms that were already made on the internet at the time of publication of the book. The second is that the author subconsciously projects his political biases based on his country's Republican vs. Democrat politics and selectively attacks Republicans while letting off the Democrats. Thus, Nixon, Reagan and the Bushes are villains while Jimmy Carter is a hero and American interference in foreign economies during the Clinton era is completely missing from the book. This despite the fact that the era of globalization and the creation of WTO and foisting the American agenda through WTO happened during the Clinton regime and Jimmy Carter started the Iran-Iraq war. Clinton was also responsible for the war on Yugoslavia which lasted all through the 1990s.

The author's list of heroes is also selective and are Communists from Latin America. He is also selective in his list of villains. Bechtel and Halliburton come in for criticism just like on the internet. And just like on the internet, there is no criticism of defense contractors whose executives support the Democratic Party. So you won't see much criticism of Raytheon or Northrop Grumman.

Most of the criticism of the aid programs was well known especially in Latin America and India. In 2000, the combination of the Seattle protests against WTO and the fact that the internet was new made the information become popular. The author seems to have picked up on that data and written a book. There is also a touch of self-delusion that it is the White man's burden to save the world. Whether it is Indonesia or Panama, there is always a character in the book who appeals to the White hero and says he will show him a side of the country that only the locals have access to and that the Whites must somehow fix it. In no country do the locals lack self-respect that they will actually indulge in such behavior.

That said, writing a first person account is an innovative idea and the author is not wrong in highlighting the true nature of aid programs. The book is successful in conveying the general idea that aid programs exist to help the American corporations. The public needs to know this sort of information and the author has done a good job at it.

Margaret M. Pratton December 14, 2014

It's amazing he's still alive to tell his tale

It's amazing he's still alive to tell his tale! John Perkins is quite frank about how he became an 'economic hit man', producing inflated optimistic economic data to persuade leaders in foreign countries to invest in building up their infrastructure (think dams, etc.) through loans they will never be able to pay back, how US industries profit through this, and his own complicity for quite a few years.

And then his slow change of heart when he began to face the actual effect of his contribution to the downward spiral of these countries. It's a real eye-opener. And yes, it does matter who's President.

Malcolm McIntyre, on October 16, 2014

Groundbreaking, although naive on the role of conspiracy

BOOK REVIEW: Confessions of an Economic Hit Man, by John Perkins

“Economic hit men are highly paid professionals who cheat countries around the globe out of trillions of dollars [through the perversion of foreign aid funds … using] fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalisation.”

This book is a decade old and the activities that Perkins exposes have become widely known since 2004, for which his work shares much of the credit. It remains a valuable primer for anyone seeking to understand current international events; and will reward greatly even those already aware of the casual criminality of the U.S.’s political, financial and business elites.

Perkins’ career as an economic hit man (EHM) began in 1971 and ended in 1980, after his conscience prevailed. It was sandwiched between a Peace Corps stint in the jungles of South America and a post-EHM career which included establishing a successful alternative energy company. He wrote the passage at the head of this review in 1982, but was persuaded not to go ahead with the book at that time. Four more delays were occasioned by threats or bribes.

So, how does an Economic Hit Man operate? “We are an elite group of men and women who utilize international financial organisations to foment conditions that make other nations subservient to the corporatocracy running our biggest corporations, our government, and our banks. Like our counterparts in the Mafia, EHMs provide favors. These take the form of loans to develop infrastructure – electric generating plants, highways, ports, airports, or industrial parks.

“A condition of such loans is that engineering and construction companies from our own country must build all these projects. In essence, most of the money never leaves the United States; it is simply transferred from banking offices in Washington to engineering offices in New York, Houston, or San Francisco.

“Despite the fact that the money is returned almost immediately to corporations that are members of the corporatocracy (the creditor), the recipient country is required to pay it all back, principal plus interest. If an EHM is completely successful, the loans are so large that the debtor is forced to default on its payments after a few years. When this happens, then like the Mafia we demand our pound of flesh.

“This often includes one or more of the following: control over United Nations votes, the installation of military bases, or access to precious resources such as oil or the Panama Canal. Of course, the debtor still owes us the money – and another country is added to our global empire.”

Perkins is not anti-American, but rather one of the diminishing remnant of Americans who believe the U.S. Constitution still means something. “The longer version [of why he finally wrote the book] relates to my dedication to the country where I was raised, to my love of the ideals expressed by our Founding Fathers, to my deep commitment to the American republic that today promises ‘life, liberty, and the pursuit of happiness’ for all people, everywhere, and to my determination after 9/11 not to sit idly by any longer while EHMs turn that republic into a global empire.”

Having finally got around to reading Confessions of an Economic Hit Man, I will certainly be following up with his 2008 The Secret History of the American Empire: The Truth About Economic Hit Men, Jackals, and How to Change the World and 2011’s Hoodwinked: An Economic Hit Man reveals why the global economy imploded – and how to fix it. One area of interest will be whether his understanding of conspiracy – or, more accurately in terms of Confessions, lack of conspiracy – has changed.

“Some would blame our current problems on an organised conspiracy. I wish it were so simple. Members of a conspiracy can be rooted out and brought to justice,” he says in the preface. “This system, however, is fuelled by something far more dangerous than conspiracy. It is driven not by a small band of men but by a concept that has become accepted as gospel: the idea that all economic growth benefits humankind and that the greater the growth, the more widespread the benefits.”

This idea of the concept of benefit for humankind driving the agenda is a somewhat naïve construction. The reality is that there is a relatively small band of psychopathic men (more women in the gang these days and they are no prettier) driving the agenda. The “benefit for mankind” schtick is merely one of the concepts used in their propaganda.

“The corporatocracy is not a conspiracy, but its members do endorse common values and goals,” Perkins says, adding shortly after: “People like me are paid outrageously high salaries to do the system’s bidding. If we falter, a more malicious form of hit man, the jackal, steps to the plate. And if the jackal fails, then the job falls to the military.”

The United States has 40,000 troops in Germany and 50,000 in Japan – they are still occupied countries, more than half a century after World War 2. The U.S. has more than 600 overseas bases. Wikipedia can usually be relied upon in simple matters such as this http://en.wikipedia.org/wiki/United_States_military_deployments although not in more sensitive matters which attract hasbara and intelligence operatives to the editing function. Also worth a read are http://www.globalresearch.ca/the-worldwide-network-of-us-military-bases/5564 and http://www.politifact.com/truth-o-meter/statements/2011/sep/14/ron-paul/ron-paul-says-us-has-military-personnel-130-nation/

Other than the EHM books mentioned so far, Perkins has written several about spiritual/indigenous matters, based on his experiences before and after his Hit Man service. They are listed at his web site http://www.johnperkins.org/books/

I found out more than I really wanted to know.

CWOK: Ex-Navy, on October 15, 2014

Dubious " Confessions "...

I just finished reading, " Confessions of an Economic Hit Man ", by John Perkins, in which the author recounts his alleged career as an ` Economic Hit Man ` (He uses the abbreviation ` EHM `) for a major corporation, exploiting the resources and people of under-developed countries for the financial gain of his company, with the support, or at least acquiescence, of the US Government, from the early 1970's until after the SEP 11 2001, when he finally wrote a book which includes descriptions about alleged ' black 'operations that occurred all over the world, including: Iran, Iraq, Indonesia, Panama, Ecuador, Saudi Arabia, & Colombia.

To be clear, I am NOT making a judgment as to the ultimate truth regarding all of the historical events referenced in Perkins's book, or all the allegations surrounding them.

However, I myself have experience in Investigative and Intelligence Work, and so my focus is Perkins's representation that he has First-Hand Knowledge of these historical events himself, and how this representation affects his own credibility:

* Perkins asserts that the Central Intelligence Agency was responsible for the deaths of at least two Latin-American leaders, " ...in a series of CIA Assassinations... (p. 161), during the Reagan-Bush Administrations of the 1980's.

Yet his source for this claim is John Dean's 1973 Watergate testimony, despite the fact that this testimony occurred BEFORE either Reagan or Bush took office (George H.W. Bush did serve under then President Nixon, but did not become head of the CIA until after Nixon left office, and Perkins presents ZERO evidence that Bush himself was ever involved in any such plot.)

Moreover, Perkins does not state anywhere in " Confessions " that he ever had any direct contact with the CIA at any time at all, & so what First-Hand Knowledge of the CIA's activities could Perkins possibly have?

* Perkins repeatedly-and frustratingly-makes vague, unattributed, & unverifiable statements such as:

 " ...The EHM presence was very strong in Baghdad during the 1980's... "

* Yet despite both the gravity, and the number, of Perkins's claims, he still provides ZERO documentation of his own to corroborate any of them (merely a copy of his professional resume from the 1970's).

Of the MANY books and accounts that I have read involving the topic of international intrigue, this is the ONLY one with such a glaring omission.

Perkins instead lists his sources as previously written books and articles from news magazines, which he appears to have had no personal involvement with himself.

* Perhaps most telling of all, Perkins states how early on in his career as an EHM, he felt guilty about the ` Corrupt ` system that he was a part of.

Yet despite this supposed guilt, he STAYED in that ` Corrupt ` system, AND accepted all the benefits that came with it; Money, Women, Perks, Etc., AND stayed silent about it, for 30 years!

Perkins states his reasons/justifications/rationalizations/excuses as to why he STAYED in that ` Corrupt ` system, AND accepted all the benefits that came with it; Money, Women, Perks, Etc., AND stayed silent about it, for 30 years.

But, regardless, he nevertheless STAYED in that ` Corrupt ` system, AND accepted all the benefits that came with it; Money, Women, Perks, Etc., AND stayed silent about it, for 30 years!

This becomes all the more troubling because, according to Perkins's own statistics, 24,000 people die each day due to hunger (P. 192)!

IF this is true, then Perkins himself took all that blood-money, for all those years, while knowingly and silently acquiescing to the deaths of BILLIONS of people!!!

Therefore, based on my own professional experience in Investigative and Intelligence Work, it is my opinion that Perkins has NOT established that he is credible.

Until he does so, I regard Perkins's book not as a true autobiography, but rather an historical novel, in which Perkins uses some actual events as the bare bones, on which he adds a LOT of fiction.

MCK

Amazon Customer, on September 11, 2014

Americorp and the dictatorship kept us illiterate and very poor. We also lost many young lives fighting this ...

I am from Nicaragua and breathed and lived the consequences of the acts of these Economic Hit Men. We had a dictatorship put in place by the US, Inc.on my country for more than 40 years.

'Americorp" had the full access to our resources, one of them gold, we never saw the benefits of this gold. Americorp and the dictatorship kept us illiterate and very poor. We also lost many young lives fighting this dictatorship because it refused to give us the choice of electing who we wanted to lead us. It was until 1979 when the USA finally gave up supporting the dictatorship, not because of our lost of lives but because the dictator became an embarrassment to US, Inc. just like Noriega, Saddam, etc.

Very true though is the fact that the opposition was mostly supported by the USSR and Cuba.

 Also very true is that the Sandinistas did not believe in property rights and believe everything belongs to the State. we went from Satan's arms to the Devil's bed.

Sucks being a poor underdeveloped nation with vultures waiting to pounce around you and tear out your eyes. Love the American People, hate its foreign policy which they are mostly kept blinded by propaganda.

Prissyon July 7, 2014

The Ugly Truth of Corporate America and Government's incestuous plan for Globalization

I've meant to read this book for years...the irony is I downloaded on Kindle while in Latin America and read it all the way through. I always suspected (from my own experience spending time on the Hill, knowing journalists, bankers, etc) this stuff went on. But Perkins fills in all the missing pieces.

I'm literally sick that I have a degree in American criminal justice and this book goes against everything I was taught of how "this country" operates. It may have come as a shock to have the dirty details to me, but my Latin American friends have known these empire building ways all along, because they've lived with it all of their lives.

I hope one thing people take away from this book are Perkins suggestions to begin at the grass roots level (school boards, county commissioners, etc) to change the way we do business and speak out when you know the truth. This is the raw, ugly truth, dear readers. I'm still attempting to digest what I know in my heart of hearts is that I have been fighting corruption of those who sugar coat it and when its pointed out, will do everything they can to disparage your credibility, no matter how impeccable it is or how well you present it. Hiring a private company to get around government checks and balances (not that there are that many) only makes sense from a globalists point of view.

Don't sit there-DO something, anything...I know- I sat out of the fray for a long time, it IS easier. But that's the coward's way out and the founding father's were anything but that. Remember, we are supposed to be the home of the brave. Are you right or left? I'd rather be active, accurate and correct...

Case of Greece

Greece story is another classic of neoliberal debt enslavement: first corrupt neoliberal government (in case of Greece successive governments) got loans that were partially stolen, partially wasted, enriching top 1% of the country and improving living conditions of the top 20%.  Then those loans from private banks were converted into public debt by attempt to save insolvent banks. And when the next wave of crisis occurred due to Greece inability to service those (now state) loans without drastic reduction of standard of living of most of the population IMF acts as enforcer. It now essentially dictates what should be done in Greece economy. No matter if previous recommendation  led to disastrous consequences. 

European neoliberal elite headed by Merkel is threatening to expel Greece from the Euro zone, scaring voters. It is very important to understand that anti-crisis policies have two main approaches – cyclical and counter-cyclical. The neo-liberals response is always "only wellbeing of banks matters"

Neoliberals key postulate is that the "invisible hand" of the market works better than government regulation, then the government should allow the market to work independently. The only think government should do is to balance the budget by slashing spending synchronously with falling revenues. Which led in cas of Greece to 60% unemployment among young people.

In other word "the invisible hand" does not work and instead country is sliding in real debt slavery when load became permagreen and interest will be paid forever.  Forecasts of neoliberal institutions such as IMF that austerity will allow Greece to pay debts, were not justified.

Countercyclical stabilization policy is based on the opposite basis: with the reduction of budget revenues not need to cut spending in order to reduce the current deficit, but rather to increase them, thereby increasing the tax base, and along with receiving political support from the population. This should be done considering all the risks carefully assessing the consequences. The trouble is that in specific Greek terms it also doesn't work very well.

Even of part of the debt was written off by the creditors, if you can't grow the real economy, the budget crisis will be renewed. But the Greek industry was killed by accession to the EU. It was decided by EU brass that the specialization of southern Europe within Europe United should be the services sector. If this was somehow forgotten that in services industries (primarily tourism) tax collection is much lower than in industry and agriculture. Demands of the "Troika" to increase taxes on the tourism industry will lead to the withdrawal of this sector into the shadows, or to the ruin of a vast number of small and medium enterprises. If you go with the demands of Brussels and reduce subsidies to agriculture (and this was one of the main requirements of the latest Memorandum of the Troika) the destruction of the economy will be complete.

And while the entire Greek economy is suffering from a terrible level of unemployment, and German Chancellor Angela Merkel said that the borders are open, so Greeks can compete for low paid jobs in Germany. In other words, Greece has to spend money on the education of engineers, scientists and other high-demand in the EU professionals, but to find word they need  have to go to Germany and most end working as janitors and other low paid jobs. Greece which spend a lot of public money to train those professionals will be left our, and all the benefits from this  get more developed countries. This is actually explicit policy of the EU, which consider Southern countries to be EU "village".

Increase of exports in the current circumstances is a very difficult undertaking. It is impossible to increase export to Russia where there is some space for Greek products, as the EU has declared sanctions. That means that he crisis is expanding, and within the framework imposed on Greece anti-crisis policy  there is no light at the end of the tunnel.

Cuts in public expenditure will inevitably lead to a reduction in domestic demand for the products of national industry and national agriculture. Besides falling living standards, the reduction of pensions and salaries in the public sector will be a big hit for the most vulnerable part of the population: two-thirds of Greek pensioners are already living below the poverty line.

Five months of fruitless negotiations, a new government understood that Greek people will not forgive the capitulation to EU demands.  Another "cannibalistic" austerity program. So it  announced the referendum on the adoption of the requirements of the Troika, shifting the responsibility for making decisions to ordinary Greeks. Still not very clear whether the Cabinet is really to declare a default, or this  is only a means of pressure on the Troika. In the end, in politics the most important things is to remain in power and if Greeks vote Yes to EU demands that the end of the current government.  What will happen to the country next is unclear. Probably the parties that brought the country to the current collapse (PASOK and New democracy) will return to power helped by Brussels neoliberals, who can throw a bone to them in a form of some minor compromises, compromise to which they would never agree with the current government, which is considered to be "hostile" by neoliberal stooges which now want the regime change in Greece.

But the mere decision to go the referendum caused in shakeup and hysteria in all centers of neoliberal power such as Brussels, Berlin and Washington. However, we cannot exclude that such a reaction is a mean to increase the pressure on Tsipras.

As Neil Irwin's in his at The Upshot  column (NYT, June 28, 2015) noted
Greek leaders think the offer on the table from European governments and the International Monetary Fund is lousy, requiring still more pension cuts and tax increases in a depressed economy, and intend to throw to voters the question of whether to accept it.

spartacus, July 1, 2015 at 1:26 pm

I think things are a little more complicated than that. According to the preliminary report of the commission set up by the Greek government to look into the origins of this debt, it appears that a big chunk of it is a consequence of the government stepping in to recapitalize troubled banks. Then the report also mentions excessive and unjustified military spending, loss of tax revenues due to illicit capital outflows. The report can be accessed via this link:

http://www.hellenicparliament.gr/en/Enimerosi/Grafeio-Typou/Deltia-Typou/?press=f660f87e-9410-414c-9476-a4bb016e6c48

The problem is that after so much austerity the debt now stands at 177% of GDP, higher than ever, because GDP took a little bit of a nosedive. The Troika recipe for success was crap.

http://www.tradingeconomics.com/greece/gdp

The “lazy Greek” line is just that. A line peddled by the MSM in order to demonize the Greek people, as opposed to the “hard working” Germans. If you look at the OECD statistic provided by the following link, you will see that, in reality, the exact opposite is true.

http://stats.oecd.org/index.aspx?DataSetCode=ANHRS

This is not about lavish lifestyle. Is about starvation, homelessness and suicide.

http://bmjopen.bmj.com/content/5/1/e005619

kirill says:

July 1, 2015 at 2:28 pm

http://www.globalresearch.ca/the-real-causes-of-the-catastrophic-crisis-in-greece-and-the-left/5365013

Greece was screwed over by foremost the Germans. The whole German shtick of pretending to have “fed Greece” is grotesque obscenity.

Wikipedia on Greek government-debt crisis

Greek government-debt crisis - Wikipedia, the free encyclopedia

Charges of hypocrisy

Hypocrisy has been alleged on multiple bases. "Germany is coming across like a know-it-all in the debate over aid for Greece", commented Der Spiegel, while its own government did not achieve a budget surplus during the era of 1970 to 2011, although a budget surplus indeed was achieved by Germany in all three subsequent years (2012–2014). A Bloomberg editorial, which also concluded that "Europe's taxpayers have provided as much financial support to Germany as they have to Greece", described the German role and posture in the Greek crisis thus:

In the millions of words written about Europe's debt crisis, Germany is typically cast as the responsible adult and Greece as the profligate child. Prudent Germany, the narrative goes, is loath to bail out freeloading Greece, which borrowed more than it could afford and now must suffer the consequences. [… But] irresponsible borrowers can't exist without irresponsible lenders. Germany's banks were Greece's enablers.

German economic historian Albrecht Ritschl describes his country as "king when it comes to debt. Calculated based on the amount of losses compared to economic performance, Germany was the biggest debt transgressor of the 20th century." Despite calling for the Greeks to adhere to fiscal responsibility, and although Germany's tax revenues are at a record high, with the interest it has to pay on new debt at close to zero, Germany still missed its own cost-cutting targets in 2011, and also fell behind on its goals for 2012.

There have been widespread accusations that Greeks are lazy, but analysis of OECD data shows that the average Greek worker puts in 50% more hours per year than a typical German counterpart, and the average retirement age of a Greek is, at 61.7 years, older than that of a German.

US economist Mark Weisbrot has also noted that while the eurozone giant's post-crisis recovery has been touted as an example of an economy of a country that "made the short-term sacrifices necessary for long-term success", Germany did not apply to its economy the harsh pro-cyclical austerity measures that are being imposed on countries like Greece,[151] In addition, he noted that Germany did not lay off hundreds of thousands of its workers despite a decline in output in its economy but reduced the number of working hours to keep them employed, at the same time as Greece and other countries were pressured to adopt measures to make it easier for employers to lay off workers. Weisbrot concludes that the German recovery provides no evidence that the problems created by the use of a single currency in the eurozone can be solved by imposing "self-destructive" pro-cyclical policies as has been done in Greece and elsewhere.

Arms sales are another fountainhead for allegations of hypocrisy. Dimitris Papadimoulis, a Greek MP with the Coalition of the Radical Left party:

If there is one country that has benefited from the huge amounts Greece spends on defence it is Germany. Just under 15% of Germany's total arms exports are made to Greece, its biggest market in Europe. Greece has paid over €2bn for submarines that proved to be faulty and which it doesn't even need. It owes another €1bn as part of the deal. That's three times the amount Athens was asked to make in additional pension cuts to secure its latest EU aid package. […] Well after the economic crisis had begun, Germany and France were trying to seal lucrative weapons deals even as they were pushing us to make deep cuts in areas like health. […] There's a level of hypocrisy here that is hard to miss. Corruption in Greece is frequently singled out as a cause for waste but at the same time companies like Ferrostaal and Siemens are pioneers in the practice. A big part of our defence spending is bound up with bribes, black money that funds the [mainstream] political class in a nation where governments have got away with it by long playing on peoples' fears.

Thus allegations of hypocrisy could be made towards both sides: Germany complains of Greek corruption, yet the arms sales meant that the trade with Greece became synonymous with high-level bribery and corruption; former defence minister Akis Tsochadzopoulos was gaoled in April 2012 ahead of his trial on charges of accepting an €8m bribe from Germany company Ferrostaal. In 2000, the current German finance minister, Wolfgang Schäuble, was forced to resign after personally accepting a "donation" (100,000 Deutsche Mark, in cash) from a fugitive weapons dealer, Karlheinz Schreiber.

Another is German complaints about tax evasion by moneyed Greeks. "Germans stashing cash in Switzerland to avoid tax could sleep easy" after summer 2011, when "the German government […] initialled a beggar-thy-neighbour deal that undermine[d] years of diplomatic work to penetrate Switzerland's globally corrosive banking secrecy." Nevertheless, Germans with Swiss bank accounts were so worried, so intent on avoiding paying tax, that some took to cross-dressing, wearing incontinence diapers, and other ruses to try and smuggle their money over the Swiss–German border and so avoid paying their dues to the German taxman. Aside from these unusual tax-evasion techniques, Germany has a history of massive tax evasion: a 1993 ZEW estimate of levels of income-tax avoidance in West Germany in the early 1980s was forced to conclude that "tax loss [in the FDR] exceeds estimates for other countries by orders of magnitude." (The study even excluded the wealthiest 2% of the population, where tax evasion is at its worst). A 2011 study noted that, since the 1990s, the "effective average tax rates for the German super rich have fallen by about a third, with major reductions occurring in the wake of the personal income tax reform of 2001–2005."

Alleged pursuit of national self-interest[edit]

Listen to many European leaders—especially, but by no means only, the Germans—and you'd think that their continent's troubles are a simple morality tale of debt and punishment: Governments borrowed too much, now they're paying the price, and fiscal austerity is the only answer.

"An Impeccable Disaster"
Paul Krugman, 5 November 2013

Since the euro came into circulation in 2002—a time when the country was suffering slow growth and high unemployment—Germany's export performance, coupled with sustained pressure for moderate wage increases (German wages increased more slowly than those of any other eurozone nation) and rapidly rising wage increases elsewhere, provided its exporters with a competitive advantage that resulted in German domination of trade and capital flows within the currency bloc. As noted by Paul De Grauwe in his leading text on monetary union, however, one must "hav[e] homogenous preferences about inflation in order to have a smoothly functioning monetary union." Thus Germany broke what the Levy Economics Institute has called "the golden rule of a monetary union" when it jettisoned a common inflation rate.

The violation of this golden rule led to dire imbalances within the eurozone, though they suited Germany well: the country's total export trade value nearly tripled between 2000 and 2007, and though a significant proportion of this is accounted for by trade with China, Germany's trade surplus with the rest of the EU grew from €46.4 bn to €126.5 bn during those seven years. Germany's bilateral trade surpluses with the peripheral countries are especially revealing: between 2000 and 2007, Greece's annual trade deficit with Germany nearly doubled, from €3 bn to €5.5 bn; Italy's more than doubled, from €9.6 bn to €19.6 bn; Spain's well over doubled, from €11 bn to €27.2 bn; and Portugal's more than quadrupled, from €1 bn to €4.2 bn. German banks played an important role in supplying the credit that drove wage increases in peripheral eurozone countries like Greece, which in turn produced this divergence in competitiveness and trade surpluses between Germany and these same eurozone members.

Germans see their government finances and trade competitiveness as an example to be followed by Greece, Portugal and other troubled countries in Europe, but the problem is more than simply a question of southern European countries emulating Germany. Dealing with debt via domestic austerity and a move toward trade surpluses is very difficult without the option of devaluing your currency, and Greece cannot devalue because it is chained to the euro. Roberto Perotti of Bocconi University has also shown that on the rare occasions when austerity and expansion coincide, the coincidence is almost always attributable to rising exports associated with currency depreciation. As can be seen from the case of China and the US, however, where China has had the yuan pegged to the dollar, it is possible to have an effective devaluation in situations where formal devaluation cannot occur, and that is by having the inflation rates of two countries diverge. If inflation in Germany is higher than in Greece and other struggling countries, then the real effective exchange rate will move in the strugglers' favour despite the shared currency. Trade between the two can then rebalance, aiding recovery, as Greek products become cheaper. Paul Krugman estimated that Spain and other peripherals would need to reduce their 2012 price-levels relative to Germany by around 20 percent to become competitive again:

If Germany had 4 percent inflation, they could do that over 5 years with stable prices in the periphery—which would imply an overall eurozone inflation rate of something like 3 percent. But if Germany is going to have only 1 percent inflation, we're talking about massive deflation in the periphery, which is both hard (probably impossible) as a macroeconomic proposition, and would greatly magnify the debt burden. This is a recipe for failure, and collapse.

This view, that German deficits are a crucial factor in assisting eurozone recovery, is shared by leading economics commentators,[171] by the OECD, the Carnegie Endowment for International Peace, Deutsche Bank, Credit Suisse, Standard & Poor's, the European Commission, and the IMF. The Americans, too, asked Germany, repeatedly and heatedly, to loosen fiscal policy, though without success.[181] This failure led to the US taking a more high-powered tack: for the first time, the Treasury Department, in its semi-annual currency report for October 2013, singled out Germany as the leading obstacle to economic recovery in Europe.

Therefore, it is argued, the problem is Germany continuing to shut off this adjustment mechanism. "The counterpart to Germany living within its means is that others are living beyond their means", agreed Philip Whyte, senior research fellow at the Centre for European Reform. "So if Germany is worried about the fact that other countries are sinking further into debt, it should be worried about the size of its trade surpluses, but it isn't."

This chorus of criticism, however, germinates in the very poorest of soil because, in October 2012, Germany chose to legislate against the very possibility of stimulus spending, "by passing a balanced budget law that requires the government to run near-zero structural deficits indefinitely." OECD projections of relative export prices—a measure of competitiveness—showed Germany beating all euro zone members except for crisis-hit Spain and Ireland for 2012, with the lead only widening in subsequent years.

Even with such policies, Greece and other countries would have faced years of hard times, but at least there would be some hope of recovery. During 2012, it seemed as though the status quo was beginning to change as France began to challenge German policy, and even Christine Lagarde called for Greece to at least be given more time to meet bailout targets. Further criticism mounted in 2013: a leaked version of a text from French president Francois Hollande's Socialist Party openly attacked "German austerity" and the "egoistic intransigence of Mrs Merkel"; Manuel Barroso warned that austerity had "reached its limits"; EU employment chief Laszlo Andor called for a radical change in EU crisis strategy—"If there is no growth, I don't see how countries can cut their debt levels"—and criticised what he described as the German practice of "wage dumping" within the eurozone to gain larger export surpluses; and Heiner Flassbeck (a former German vice finance minister) and economist Costas Lapavitsas charged that the euro had "allowed Germany to 'beggar its neighbours', while also providing the mechanisms and the ideology for imposing austerity on the continent".

Battered by criticism, the European Commission finally decided that "something more" was needed in addition to austerity policies for peripheral countries like Greece. "Something more" was announced to be structural reforms—things like making it easier for companies to sack workers—but such reforms have been there from the very beginning, leading Dani Rodrik to dismiss the EC's idea as "merely old wine in a new bottle." Indeed, Rodrik noted that with demand gutted by austerity, all structural reforms have achieved, and would continue to achieve, is pumping up unemployment (further reducing demand), since fired workers are not going to be re-employed elsewhere. Rodrik suggested the ECB might like to try out a higher inflation target, and that Germany might like to allow increased demand, higher inflation, and to accept its banks taking losses on their reckless lending to Greece. That, however, "assumes that Germans can embrace a different narrative about the nature of the crisis. And that means that German leaders must portray the crisis not as a morality play pitting lazy, profligate southerners against hard-working, frugal northerners, but as a crisis of interdependence in an economic (and nascent political) union. Germans must play as big a role in resolving the crisis as they did in instigating it." Paul Krugman described talk of structural reform as "an excuse for not facing up to the reality of macroeconomic disaster, and a way to avoid discussing the responsibility of Germany and the ECB, in particular, to help end this disaster." Furthermore, as Financial Times analyst Wolfgang Munchau observed, "Austerity and reform are the opposite of each other. If you are serious about structural reform, it will cost you upfront money." Claims that Germany had, by mid-2012, given Greece the equivalent of 29 times the aid given to West Germany under the Marshall Plan after World War II completely ignores the fact that aid was just a small part of Marshall Plan assistance to Germany, with another crucial part of the assistance being the writing off of a majority of Germany's debt.

Artificially low exchange rate[edit]

Though Germany claims its public finances are "the envy of the world", the country is merely continuing what has been called its "free-riding" of the euro crisis, which "consists in using the euro as a mechanism for maintaining a weak exchange rate while shifting the costs of doing so to its neighbors." With eurozone adjustment locked out by Germany, economic hardship elsewhere in the currency block actually suited its export-oriented economy for an extended period, because it caused the euro to depreciate, making German exports cheaper and so more competitive.[201] The weakness of the euro, caused by the economy misery of peripheral countries, has been providing Germany with a large and artificial export advantage to the extent that, if Germany left the euro, the concomitant surge in the value of the reintroduced Deutsche Mark, which would produce "disastrous" effects on German exports as they suddenly became dramatically more expensive, would play the lead role in imposing a cost on Germany of perhaps 20–25% GDP during the first year alone after its euro exit. November 2013 saw the European Commission open an in-depth inquiry into German's surplus, which hit a new record in spring 2015. As the German current accounts surplus looked set to smash all previous records again in Spring 2015, one commentator noted that Germany was "now the biggest single violator of the eurozone stability rules. It would face punitive sanctions if EU treaty law was enforced." 2015 is "the fifth consecutive year that Germany's surplus has been above 6pc of GDP," it was pointed out. "The EU's Macroeconomic Imbalance Procedure states that the Commission should launch infringement proceedings if this occurs for three years in a row, unless there is a clear reason not to."

Advocacy of internal devaluation for peripheral economies[edit]

The version of adjustment offered by Germany and its allies is that austerity will lead to an internal devaluation, i.e. deflation, which would enable Greece gradually to regain competitiveness. "Yet this proposed solution is a complete non-starter", in the opinion of one UK economist. "If austerity succeeds in delivering deflation, then the growth of nominal GDP will be depressed; most likely it will turn negative. In that case, the burden of debt will increase." A February 2013 research note by the Economics Research team at Goldman Sachs again noted that the years of recession being endured by Greece "exacerbate the fiscal difficulties as the denominator of the debt-to-GDP ratio diminishes", i.e. reducing the debt burden by imposing austerity is, aside from anything else, utterly futile.[210] "Higher growth has always been the best way out the debt (absolute and relative) burden. However, growth prospects for the near and medium-term future are quite weak. During the Great Depression, Heinrich Brüning, the German Chancellor (1930–32), thought that a strong currency and a balanced budget were the ways out of crisis. Cruel austerity measures such as cuts in wages, pensions and social benefits followed. Over the years crises deepened". The austerity program applied to Greece has been "self-defeating", with the country's debt now expected to balloon to 192% of GDP by 2014. After years of the situation being pointed out, in June 2013, with the Greek debt burden galloping towards the "staggering" heights previously predicted by anyone who knew what they were talking about, and with her own organization admitting its program for Greece had failed seriously on multiple primary objectives and that it had bent its rules when "rescuing" Greece; and having claimed in the past that Greece's debt was sustainable—Christine Lagarde felt able to admit publicly that perhaps Greece just might, after all, need to have its debt written off in a meaningful way. In its Global Economic Outlook and Strategy of September 2013, Citi pointed out that Greece "lack[s] the ability to stabilise […] debt/GDP ratios in coming years by fiscal policy alone",:7 and that "large debt relief" is probably "the only viable option" if Greek fiscal sustainability is to re-materialise;:18 predicted no return to growth until 2016;:8 and predicted that the debt burden would soar to over 200% of GDP by 2015 and carry on rising through at least 2017.:9 Unfortunately, German Chancellor Merkel and Foreign Minister Guido Westerwelle had just a few months prior already spoken out again against any debt relief for Greece, claiming that "structural reforms" (i.e. "old wine in a new bottle", see Rodrik et al. above) were the way to go and—astonishingly—that "debt sustainability will continue to be assured".[219]

Strictly in terms of reducing wages relative to Germany, Greece had been making 'progress': private-sector wages fell 5.4% in the third quarter of 2011 from a year earlier and 12% since their peak in the first quarter of 2010. The second economic adjustment programme for Greece called for a further labour cost reduction in the private sector of 15% during 2012–2014.

German views on inflation as a solution[edit]

The question then is whether Germany would accept the price of inflation for the benefit of keeping the eurozone together. On the upside, inflation, at least to start with, would make Germans happy as their wages rose in keeping with inflation. Regardless of these positives, as soon as the monetary policy of the ECB—which has been catering to German desires for low inflation[224] so doggedly that Martin Wolf describes it as "a reincarnated Bundesbank"—began to look like it might stoke inflation in Germany, Merkel moved to counteract, cementing the impossibility of a recovery for struggling countries.

All of this has resulted in increased anti-German sentiment within peripheral countries like Greece and Spain.[227] German historian Arnulf Baring, who opposed the euro, wrote in his 1997 book Scheitert Deutschland? (Does Germany fail?): "They (populistic media and politicians) will say that we finance lazy slackers, sitting in coffee shops on southern beaches", and "[t]he fiscal union will end in a giant blackmail manoeuvre […] When we Germans will demand fiscal discipline, other countries will blame this fiscal discipline and therefore us for their financial difficulties. Besides, although they initially agreed on the terms, they will consider us as some kind of economic police. Consequently, we risk again becoming the most hated people in Europe." Anti-German animus is perhaps inflamed by the fact that, as one German historian noted, "during much of the 20th century, the situation was radically different: after the first world war and again after the second world war, Germany was the world's largest debtor, and in both cases owed its economic recovery to large-scale debt relief." When Horst Reichenbach arrived in Athens towards the end of 2011 to head a new European Union task force, the Greek media instantly dubbed him "Third Reichenbach"; in Spain in May 2012, businessmen made unflattering comparisons with Berlin's domination of Europe in WWII, and top officials "mutter about how today's European Union consists of a 'German Union plus the rest'". Almost four million German tourists—more than any other EU country—visit Greece annually, but they comprised most of the 50,000 cancelled bookings in the ten days after the 6 May 2012 Greek elections, a figure The Observer called "extraordinary". The Association of Greek Tourism Enterprises estimates that German visits for 2012 will decrease by about 25%. Such is the ill-feeling, historic claims on Germany from WWII have been reopened, including "a huge, never-repaid loan the nation was forced to make under Nazi occupation from 1941 to 1945."

Analysis of the Greek rescue[edit]

Unbalanced scales.svg The neutrality of this section is disputed. Relevant discussion may be found on the talk page. Please do not remove this message until the dispute is resolved. (June 2015)

One estimate is that Greece actually subscribed to €156bn worth of new debt in order to get €206bn worth of old debt to be written off, meaning the write-down of €110bn by the banks and others is more than double the true figure of €50bn that was truly written off. Taxpayers are now liable for more than 80% of Greece's debt. One journalist for Der Spiegel noted that the second bailout was not "geared to the requirements of the people of Greece but to the needs of the international financial markets, meaning the banks. How else can one explain the fact that around a quarter of the package won't even arrive in Athens but will flow directly to the country's international creditors?" He accused the banks of "cleverly manipulating the fear that a Greek bankruptcy would trigger a fatal chain reaction" in order to get paid. According to Robert Reich, in the background of the Greek bailouts and debt restructuring lurks Wall Street. While US banks are owed only about €5bn by Greece, they have more significant exposure to the situation via German and French banks, who were significantly exposed to Greek debt. Massively reducing the liabilities of German and French banks with regards to Greece thus also serves to protect US banks.

Creditors of Greece 2011 and 2015

According to Der Spiegel "more than 80 percent of the rescue package is going to creditors—that is to say, to banks outside of Greece and to the ECB. The billions of taxpayer euros are not saving Greece. They're saving the banks." One study found that the public debt of Greece to foreign governments, including debt to the EU/IMF loan facility and debt through the eurosystem, increased by €130 bn, from €47.8 bn to €180.5 billion, between January 2010 and September 2011. The combined exposure of foreign banks to Greek entities—public and private—was around 80bn euros by mid-February 2012. In 2009 they were in for well over 200bn. The Economist noted that, during 2012 alone, "private-sector bondholders reduced their nominal claims by more than 50%. But the deal did not include the hefty holdings of Greek bonds at the European Central Bank (ECB), and it was sweetened with funds borrowed from official rescuers. For two years those rescuers had pretended Greece was solvent, and provided official loans to pay off bondholders in full. So more than 70% of the debts are now owed to 'official' creditors", i.e. European taxpayers and the IMF. With regard to Germany in particular, a Bloomberg editorial noted that, before its banks reduced its exposure to Greece, "they stood to lose a ton of money if Greece left the euro. Now any losses will be shared with the taxpayers of the entire euro area."


NEWS CONTENTS

Old News ;-)

[Oct 20, 2018] According to Global Wealth Report by the personal wealth of the population Ukraine is in the 123rd place (out of 140 countries ranked).

Oct 20, 2018 | www.unz.com

AP says: October 18, 2018 at 9:58 pm GMT 100 Words @Gerard2

This months gas tariff for "Ukrainians" increases by 24%!!

The context is that Ukrainian consumers have the lowest gas rate in Europe. Moldovan households pay more for gas than do Ukrainian ones. Even with a 24% price increase Ukraine will still have the cheapest gas in Europe for its consumers:

https://ec.europa.eu/eurostat/statistics-explained/index.php/Natural_gas_price_statistics

AP says: October 19, 2018 at 12:46 am GMT @Gerard2

The price increase will go past 40% in May

Which will make gas prices for Ukrainian consumers more or less tied with those in Moldova as the cheapest in Europe.

For whatever reason IMF wanted Ukrainian consumers not be subsidized as much as they have been.

AnonFromTN , says: October 19, 2018 at 2:51 pm GMT

@Anon According to Global Wealth Report ( https://www.credit-suisse.com/corporate/en/articles/news-and-expertise/global-wealth-report-2018-us-and-china-in-the-lead-201810.html ), by the personal wealth of the population Ukraine is in the 123rd place (out of 140 countries ranked).
By this measure Ukraine is behind Nepal, Cameroon, Kenia, Bangladesh, and Lesotho, just ahead of Zambia. But there are 135 people in Ukraine with personal wealth greater than $50 million.

A huge line for free food at the charity kitchen in Kiev can be seen here: http://rusvesna.su/news/1539952343 (those who read Russian can find details in the accompanying news item).

I guess all of this is a great achievement of Maidan. Ukies, please comment.

[Oct 19, 2018] For the $TRILLIONS hoovered up by Deep State and their war profiteering minions, we could have put every Afghan male of military age through Harvard Business School.

Oct 19, 2018 | www.moonofalabama.org

b , Oct 18, 2018 9:28:57 AM | link

The governor General Abdul Raziq, the police chief and the intelligence chief of Kandahar have all been killed today. Bodyguards turned their guns on them. Two U.S. soldiers were wounded. The top U.S. commander in Afghanistan was present but not hurt.

Raziq was a brut, thief, killer, drug baron and the CIA's man in Kandahar.

In 2011 Matthieu Atkins portrait him: Our Man in Kandahar
Abdul Raziq and his men have received millions of dollars' worth of U.S. training and equipment to help in the fight against the Taliban. But is our ally -- long alleged to be involved in corruption and drug smuggling -- also guilty of mass murder?


Anton Worter , Oct 18, 2018 10:05:07 AM | link

b

Been there. Done that. Kandahar is beautiful.

The United States, specifically Cheney and Petraeus and Rodham, imposed the Imperial Executor form of Federalist government upon a people who were a well-organized heirarchical society while William the Conqueror was still head chopping Anglo-Saxons in bear skins.

Cheny wrote the Afghan petroleum and strategic resources laws *in English* at the beginning of the 2001 invasion. The US imposed a new flag, a new pledge of allegiance, a new national song and even a new national currency on the Afghan people, then imposed the first imperial caesar, Karzai.

You break it, you own it!

For the $TRILLIONS hoovered up by Deep State and their war profiteering minions, we could have put every Afghan male of military age through Harvard Business School.

On to Tehran!! Lu,lu,lu,lu,lu!

Anton Worter , Oct 18, 2018 2:36:09 PM | link
12

Cheney, Petraeus and Rodham ALSO created the Federal Republican Guard ANA and ANP, goombahs, renegade hijackers and shakedown artists who, like those same ANA/ANP 'personal guards' mentioned in b's article, assassinated the governor and the others. And umm, yes, I've been on the muzzle end of those ANA/ANP thugs in an attempted kidnapping, so been there, done that.

AFA Russ' defense of William the Conqueror as some 'high point' of a Western Civilization of Red Haired Yettis, they were still head-chopping each other in England while Afghanistan ruled from East Persia to Western India, an advanced civilization far more ancient than Anglo-Saxon bearskin cave dwelling knuckle draggers, at the time.

Of course, now today we have the White Scientocratic Triumphal Exceptionalist Civilization and its Miracle of the Two Planes and Three Towers to prove it, even if Johnny and Jillian can't read, write or do their ciphers.

[Sep 16, 2018] Ending the Secrecy of the Student Debt Crisis

Pervasive racketeering rules because we allow it to, especially in education and medicine. Both are self-destructing under the weight of their own money-grubbing schemes.
Notable quotes:
"... Because of the loans' disgracefully high interest rates, my family and I have paid more or less the equivalent of my debt itself in the years since I graduated, making monthly payments in good faith -- even in times of unemployment and extreme duress -- to lenders like Citigroup, a bank that was among the largest recipients of federal bailout money in 2008 and that eventually sold off my debt to other lenders. This ruinous struggle has been essentially meaningless: I now owe more than what I started out owing, not unlike my parents with their mortgage . ..."
"... By Daniela Senderowicz. Originally published in Yes! Magazine ..."
"... Activists are building meaningful connections among borrowers to counter the taboo of admitting they can't pay their bills. ..."
"... Gamblers and reality TV stars can claim bankruptcy protections when in financial trouble, but 44 million student loan borrowers can't. Unemployed, underpaid, destitute, sick, or struggling borrowers simply aren't able to start anew. ..."
"... With a default rate approaching 40 percent , one would expect armies of distressed borrowers marching in the streets demanding relief from a system that has singled out their financial anguish. Distressed student debtors, however, seem to be terror-struck about coming forward to a society that, they say, ostracizes them for their inability to keep up with their finances. ..."
"... When we spoke to several student borrowers, almost none were willing to share their names. "I can't tell anyone how much I'm struggling," says a 39-year-old Oregon physician who went into student loan default after his wife's illness drained their finances. He is terrified of losing his patients and reputation if he speaks out about his financial problems. ..."
"... Debtors are isolated, anxious, and in the worst cases have taken their own lives . Simone confirms that she has "worked with debtors who were suicidal or had psychological breakdowns requiring psychiatric hospitalization." ..."
"... "Alienation impacts mental health issues," says New York mental health counselor Harriet Fraad. "As long as they blame themselves within the system, they're lost." ..."
"... A recent manifesto by activist and recent graduate Eli Campbell calls for radical unity among borrowers. "Young people live in constant fear that they'll never be able to pay off their debt. We're not buying houses or able to afford the hallmarks of the American dream," he explains. ..."
"... Do a little research on car selling and you will see the pressures on the dealer sales force to suck the vast majority of buyers into long term debt. Car loans are now five or six years, routinely. ..."
Sep 16, 2018 | www.nakedcapitalism.com
Yves here. This article describes how the stigma of struggling to pay student debt is a burden in and of itself. I wish this article had explained how little it take to trigger an escalation into default interest rates and how punitive they are. The piece also stresses the value of activism as a form of psychological relief, by connecting stressed student debt borrowers with people similarly afflicted.

But the bigger issue is the way indebtedness is demonized in a society that makes it pretty much impossible to avoid borrowing. One reader recounted how many (as in how few) weeks of after tax wages it took to buy a car in the 1960s versus now. Dealers don't want to talk to buyers who want to pay in full at the time of purchase. And if you don't have installment credit or a mortgage, the consumer credit agencies ding you!

It goes without saying that the sense of shame is harder to endure due to how shallow most people's social networks are, which is another product of neoliberalism.

In keeping, the New York Times today ran an op-ed by one of its editors on how student debtors are also victims of the crisis, reprinted from a longer piece in The Baffler (hat tip Dan K). Key sections :

Because of the loans' disgracefully high interest rates, my family and I have paid more or less the equivalent of my debt itself in the years since I graduated, making monthly payments in good faith -- even in times of unemployment and extreme duress -- to lenders like Citigroup, a bank that was among the largest recipients of federal bailout money in 2008 and that eventually sold off my debt to other lenders. This ruinous struggle has been essentially meaningless: I now owe more than what I started out owing, not unlike my parents with their mortgage .

Many people have and will continue to condemn me personally for my tremendous but unexceptional student debt, and the ways in which it has made the recession's effects linger for my family. I've spent quite a lot of time in the past decade accepting this blame. The recession may have compounded my family's economic insecurity, but I also made the conscious decision to take out loans for a college I couldn't afford in order to become a journalist, a profession with minimal financial returns. The amount of debt I owe in student loans -- about $100,000 -- is more than I make in a given year. I am ashamed and embarrassed by this, but as I grow older, I think it is time that those profiting from this country's broken economic system share some of my guilt

[At my commencement in 2009] Mrs. Clinton then echoed a fantasy of boundless opportunity that had helped guide the country into economic collapse, deceiving many of the parents in attendance, including my own, into borrowing toward a future that they couldn't work hard enough to afford. "There is no problem we face here in America or around the world that will not yield to human effort," she said. "Our challenges are ones that summon the best of us, and we will make the world better tomorrow than it is today." At the time, I wondered if this was accurate. I now know how wrong she was.

By Daniela Senderowicz. Originally published in Yes! Magazine

Activists are building meaningful connections among borrowers to counter the taboo of admitting they can't pay their bills.

Gamblers and reality TV stars can claim bankruptcy protections when in financial trouble, but 44 million student loan borrowers can't. Unemployed, underpaid, destitute, sick, or struggling borrowers simply aren't able to start anew.

With a default rate approaching 40 percent , one would expect armies of distressed borrowers marching in the streets demanding relief from a system that has singled out their financial anguish. Distressed student debtors, however, seem to be terror-struck about coming forward to a society that, they say, ostracizes them for their inability to keep up with their finances.

When we spoke to several student borrowers, almost none were willing to share their names. "I can't tell anyone how much I'm struggling," says a 39-year-old Oregon physician who went into student loan default after his wife's illness drained their finances. He is terrified of losing his patients and reputation if he speaks out about his financial problems.

"If I shared this with anyone they will look down upon me as some kind of fool," explains a North Carolina psychologist who is now beyond retirement age. He explains that his student debt balance soared after losing a well-paying position during the financial crisis, and that he is struggling to pay it back.

Financial shame alienates struggling borrowers. Debtors blame themselves and self-loathe when they can't make their payments, explains Colette Simone, a Michigan psychologist. "There is so much fear of sharing the reality of their financial situation and the devastation it is causing in every facet of their lives," she says. "The consequences of coming forward can result in social pushback and possible job -- related complications, which only deepen their suffering."

Debtors are isolated, anxious, and in the worst cases have taken their own lives . Simone confirms that she has "worked with debtors who were suicidal or had psychological breakdowns requiring psychiatric hospitalization."

With an average debt of just over $37,000 per borrower for the class of 2016 , and given that incomes have been flat since the 1970s , it's not surprising that borrowers are struggling to pay. Student loans have a squeaky-clean reputation, and society tends to view them as a noble symbol of the taxpayers' generosity to the working poor. Fear of facing society's ostracism for failure to pay them back has left borrowers alienated and trapped in a lending system that is engulfing them in debt bondage.

"Alienation impacts mental health issues," says New York mental health counselor Harriet Fraad. "As long as they blame themselves within the system, they're lost."

Student debtors can counter despair by fighting back through activism and political engagement, she says. "Connection is the antidote to alienation, and engaging in activism, along with therapy, is a way to recovery."

Despite the fear of coming forward, some activists are building a social movement in which meaningful connections among borrowers can counter the taboo of openly admitting financial ruin.

Student Loan Justice, a national grassroots lobby group, is attempting to build this movement by pushing for robust legislation to return bankruptcy protections to borrowers. The group has active chapters in almost every state, with members directly lobbying their local representatives to sign on as co-sponsors to HR 2366. Activists are building a supportive community for struggling borrowers through political agitation, local engagement, storytelling, and by spreading a courageous message of hope that may embolden traumatized borrowers to come forward and unite.

Julie Margetaa Morgan , a fellow at The Roosevelt Institute, recently noted that student debt servicers like Navient have a powerful influence on lawmakers. "Student loan borrowers may not have millions to spend on lobbying, but they have something equally, if not more, powerful: millions of voices," she says.

A recent manifesto by activist and recent graduate Eli Campbell calls for radical unity among borrowers. "Young people live in constant fear that they'll never be able to pay off their debt. We're not buying houses or able to afford the hallmarks of the American dream," he explains.

In his call for a unified national boycott of student loan payments, inevitably leading to a mass default on this debt, Campbell hopes to expose this crisis and instigate radical change. In a recent interview he explained that the conditions for borrowers are so bad already that debtors may not join the boycott willingly. Instead, participation may simply happen by default given the lack of proper work opportunities that lead to borrowers' inability to pay.

While a large-scale default may not happen through willful and supportive collective action, ending the secrecy of the crisis through massive national attention may destigmatize the shame of financial defeat and finally bring debtors out of the isolation that causes them so much despair.

Activists are calling for a significant conversation about the commodification of educating our youth, shifting our focus toward investing into the promise of the young and able, rather than the guarantee of their perpetual debt bondage. In calling for collective action they soothe the hurt of so many alienated debtors, breaking the taboos that allow them to say, "Me, too" and admit openly that in this financial climate we all need each other to move forward.


Jane , September 16, 2018 at 4:15 am

How much are the interest rates on student loans there in the USA? Here in India its 11.5% if you want to finance studies abroad. 8.5 for some select institutions.

JVR , September 16, 2018 at 5:36 am

I wonder if the media's obsession with "millenials" isn't primarily a way to try to divide people with shared interests, above all around the topics of student debt and the job market and to make the problems seem like they have shallower roots than they really do. The individuals mentioned here are older than that 24-37 age cohort, one of them much older.

Epistrophy , September 16, 2018 at 6:42 am

Dealers don't want to talk to buyers who want to pay in full at the time of purchase.

Yes Yes. Car manufacturers are actually finance houses selling products manufactured by subcontractors – such is the state of American industry – but their dream is to move to a SaaS model where ownership, of anything, becomes a relic of the past (except for the overlords and oligarchs).

This could not be possible without government corruption and revolving-door regulation. Maybe these PAYG vehicles will contain built-in body scanners too; for our own security, of course.

In his call for a unified national boycott of student loan payments, inevitably leading to a mass default on this debt, Campbell hopes to expose this crisis and instigate radical change.

Default, or radical change, would bring the economy to it's knees. But when there is another economic downturn, this is going to happen anyway. Terrible situation; negative real interest rates destroying the pensions of the elderly, student loan servitude destroying the youth and the middle class being squeezed to oblivion. What can be done to fix it, I ask?

Yet they are doing God's work, are they? Well, this is not a God I choose to worship.

JTMcPhee , September 16, 2018 at 8:33 am

Well good for you. How many cars, of what age, have you bought, for your anecdote to rate as anything vaguely resembling the wide reality, and how does your personal financial situation let you just write checks for $30 or $70,000?

Do a little research on car selling and you will see the pressures on the dealer sales force to suck the vast majority of buyers into long term debt. Car loans are now five or six years, routinely.

And one wonders what the investment is in trying to impeach the points of this report, wth such an unlikely and atypical claim.

UserFriendly , September 16, 2018 at 6:57 am

NYT ran the same story , interesting they edited out his total debt and major though.

JTMcPhee , September 16, 2018 at 8:39 am

Maybe a little traction, then, for the notion, and increasingly the inescapable reality, of #juststoppaying on those "remember Joe Biden" virtually non-dischargeable, often fraudulently induced, "student loan" debt shackles?

[Sep 07, 2018] Al Qaeda and the "War on Terrorism" by Prof Michel Chossudovsky

Notable quotes:
"... Foreign Affairs, ..."
"... According to the official version of history, CIA aid to the Mujahideen began during 1980, that is to say, after the Soviet army invaded Afghanistan, [on] 24 December 1979. But the reality, secretly guarded until now, is completely otherwise. Indeed, it was July 3, 1979, that President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. ..."
"... We now have the opportunity of giving to the USSR its Vietnam War. Indeed, for almost 10 years, Moscow had to carry on a war unsupportable by the government, a conflict that brought about the demoralization and finally the breakup of the Soviet empire. ..."
"... What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Moslems or the liberation of Central Europe and the end of the Cold War? ..."
Sep 07, 2018 | www.globalresearch.ca

The alleged mastermind behind the 9/11 terrorists attacks, Saudi-born Osama bin Laden, was recruited during the Soviet-Afghan war, "ironically under the auspices of the CIA, to fight Soviet invaders".(Hugh Davies, "`Informers' point the finger at bin Laden; Washington on alert for suicide bombers." The Daily Telegraph, London, 24 August 1998).

In 1979 the largest covert operation in the history of the CIA was launched in Afghanistan:

"With the active encouragement of the CIA and Pakistan's ISI, who wanted to turn the Afghan Jihad into a global war waged by all Muslim states against the Soviet Union, some 35,000 Muslim radicals from 40 Islamic countries joined Afghanistan's fight between 1982 and 1992. Tens of thousands more came to study in Pakistani madrasahs. Eventually, more than 100,000 foreign Muslim radicals were directly influenced by the Afghan jihad." (Ahmed Rashid, "The Taliban: Exporting Extremism", Foreign Affairs, November-December 1999).

This project of the US intelligence apparatus was conducted with the active support of Pakistan's Inter Services Intelligence (ISI), which was entrusted in channelling covert military aid to the Islamic brigades and financing, in liason with the CIA, the madrassahs and Mujahideen training camps.

U.S. government support to the Mujahideen was presented to world public opinion as a "necessary response" to the 1979 Soviet invasion of Afghanistan in support of the pro-Communist government of Babrak Kamal.

The CIA's military-intelligence operation in Afghanistan, which consisted in creating the "Islamic brigades", was launched prior rather than in response to the entry of Soviet troops into Afghanistan. In fact, Washington's intent was to deliberately trigger a civil war, which has lasted for more than 25 years. (photo: CIA and ISI agents)

The CIA's role in laying the foundations of Al Qaeda is confirmed in an 1998 interview with Zbigniew Brzezinski, who at the time was National Security Adviser to President Jimmy Carter:

Brzezinski: According to the official version of history, CIA aid to the Mujahideen began during 1980, that is to say, after the Soviet army invaded Afghanistan, [on] 24 December 1979. But the reality, secretly guarded until now, is completely otherwise. Indeed, it was July 3, 1979, that President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. And that very day, I wrote a note to the President in which I explained to him that in my opinion, this aid was going to induce a Soviet military intervention.

Question: Despite this risk, you were an advocate of this covert action. But perhaps you yourself desired this Soviet entry into war and looked to provoke it?

Brzezinski: It isn't quite that. We didn't push the Russians to intervene, but we knowingly increased the probability that they would.

Question:When the Soviets justified their intervention by asserting that they intended to fight against a secret involvement of the United States in Afghanistan, people didn't believe them. However, there was a basis of truth. You don't regret anything today?

Brzezinski: Regret what? That secret operation was an excellent idea. It had the effect of drawing the Russians into the Afghan trap and you want me to regret it? The day that the Soviets officially crossed the border, I wrote to President Carter. We now have the opportunity of giving to the USSR its Vietnam War. Indeed, for almost 10 years, Moscow had to carry on a war unsupportable by the government, a conflict that brought about the demoralization and finally the breakup of the Soviet empire.

Question: And neither do you regret having supported the Islamic fundamentalism, having given arms and advice to future terrorists?

Brzezinski: What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Moslems or the liberation of Central Europe and the end of the Cold War? ( "The CIA's Intervention in Afghanistan, Interview with Zbigniew Brzezinski, President Jimmy Carter's National Security Adviser", Le Nouvel Observateur, Paris, 15-21 January 1998, published in English, Centre for Research on Globalisation, http://www.globalresearch.ca/articles/BRZ110A.html , 5 October 2001, italics added.)

Consistent with Brzezinski's account, a "Militant Islamic Network" was created by the CIA.

The "Islamic Jihad" (or holy war against the Soviets) became an integral part of the CIA's intelligence ploy. It was supported by the United States and Saudi Arabia, with a significant part of the funding generated from the Golden Crescent drug trade:

"In March 1985, President Reagan signed National Security Decision Directive 166 [which] authorize[d] stepped-up covert military aid to the Mujahideen, and it made clear that the secret Afghan war had a new goal: to defeat Soviet troops in Afghanistan through covert action and encourage a Soviet withdrawal. The new covert U.S. assistance began with a dramatic increase in arms supplies -- a steady rise to 65,000 tons annually by 1987 as well as a "ceaseless stream" of CIA and Pentagon specialists who travelled to the secret headquarters of Pakistan's ISI on the main road near Rawalpindi, Pakistan. There, the CIA specialists met with Pakistani intelligence officers to help plan operations for the Afghan rebels."(Steve Coll, The Washington Post, July 19, 1992.)

[Sep 06, 2018] The US Military is Winning. No, Really, It Is! by Nick Turse

Notable quotes:
"... Nick Turse is the managing editor of ..."
"... a fellow at the Nation Institute, and a contributing writer for the ..."
"... His latest book is ..."
"... . He is also the author of the award-winning ..."
"... His website is NickTurse.com. ..."
Sep 06, 2018 | www.unz.com

The Taliban says that in order to end "this long war" the "lone option is to end the occupation of Afghanistan and nothing more."

In June, the 17th American nominated to take command of the war, Lieutenant General Scott Miller, appeared before the Senate Armed Services Committee where Elizabeth Warren (D-MA) grilled him on what he would do differently in order to bring the conflict to a conclusion. "I cannot guarantee you a timeline or an end date," was Miller's confident reply .

Did the senators then send him packing? Hardly. He was, in fact, easily confirmed and starts work this month. Nor is there any chance Congress will use its power of the purse to end the war. The 2019 budget request for U.S. operations in Afghanistan -- topping out at $46.3 billion -- will certainly be approved.

#Winning

All of this seeming futility brings us back to the Vietnam War, Kissinger, and that magic number, 4,000,000,029,057 -- as well as the question of what an American military victory would look like today. It might surprise you, but it turns out that winning wars is still possible and, perhaps even more surprising, the U.S. military seems to be doing just that.

Let me explain.

In Vietnam, that military aimed to " out-guerrilla the guerrilla ." It never did and the United States suffered a crushing defeat. Henry Kissinger -- who presided over the last years of that conflict as national security advisor and then secretary of state -- provided his own concise take on one of the core tenets of asymmetric warfare: "The conventional army loses if it does not win. The guerrilla wins if he does not lose." Perhaps because that eternally well-regarded but hapless statesman articulated it, that formula was bound -- like so much else he touched -- to crash and burn .

In this century, the United States has found a way to turn Kissinger's martial maxim on its head and so rewrite the axioms of armed conflict. This redefinition can be proved by a simple equation:

0 + 1,000,000,000,000 + 17 +17 + 23,744 + 3,000,000,000,000 + 5 + 5,200 + 74 = 4,000,000,029,057

Expressed differently, the United States has not won a major conflict since 1945; has a trillion-dollar national security budget; has had 17 military commanders in the last 17 years in Afghanistan, a country plagued by 23,744 " security incidents " (the most ever recorded) in 2017 alone; has spent around $3 trillion , primarily on that war and the rest of the war on terror, including the ongoing conflict in Iraq, which then-defense secretary Donald Rumsfeld swore , in 2002, would be over in only "five days or five weeks or five months," but where approximately 5,000 U.S. troops remain today; and yet 74% of the American people still express high confidence in the U.S. military.

Let the math and the implications wash over you for a moment. Such a calculus definitively disproves the notion that "the conventional army loses if it does not win." It also helps answer the question of victory in the war on terror. It turns out that the U.S. military, whose budget and influence in Washington have only grown in these years, now wins simply by not losing -- a multi-trillion-dollar conventional army held to the standards of success once applied only to under-armed, under-funded guerilla groups.

Unlike in the Vietnam War years, three presidents and the Pentagon, unbothered by fiscal constraints, substantive congressional opposition, or a significant antiwar movement, have been effectively pursuing this strategy, which requires nothing more than a steady supply of troops, contractors, and other assorted camp followers; an endless parade of Senate-sanctioned commanders; and an annual outlay of hundreds of billions of dollars. By these standards, Donald Trump's open-ended, timetable-free "Strategy in Afghanistan and South Asia" may prove to be the winningest war plan ever. As he described it:

"From now on, victory will have a clear definition: attacking our enemies, obliterating ISIS, crushing al-Qaeda, preventing the Taliban from taking over Afghanistan, and stopping mass terror attacks against America before they emerge."

Think about that for a moment. Victory's definition begins with "attacking our enemies" and ends with the prevention of possible terror attacks. Let me reiterate: "victory" is defined as "attacking our enemies." Under President Trump's strategy, it seems, every time the U.S. bombs or shells or shoots at a member of one of those 20-plus terror groups in Afghanistan, the U.S. is winning or, perhaps, has won. And this strategy is not specifically Afghan-centric. It can easily be applied to American warzones in the Middle East and Africa -- anywhere, really.

Decades after the end of the Vietnam War, the U.S. military has finally solved the conundrum of how to "out-guerrilla the guerrilla." And it couldn't have been simpler. You just adopt the same definition of victory. As a result, a conventional army -- at least the U.S. military -- now loses only if it stops fighting. So long as unaccountable commanders wage benchmark-free wars without congressional constraint, the United States simply cannot lose. You can't argue with the math. Call it the rule of 4,000,000,029,057.

That calculus and that sum also prove, quite clearly, that America's beleaguered commander-in-chief has gotten a raw deal on his victory parade. With apologies to the American Legion, the U.S. military is now -- under the new rules of warfare -- triumphant and deserves the type of celebration proposed by President Trump. After almost two decades of warfare, the armed forces have lowered the bar for victory to the level of their enemy, the Taliban. What was once the mark of failure for a conventional army is now the benchmark for success. It's a remarkable feat and deserving, at the very least, of furious flag-waving, ticker tape , and all the age-old trappings of victory.

Nick Turse is the managing editor of TomDispatch , a fellow at the Nation Institute, and a contributing writer for the Intercept. His latest book is Next Time They'll Come to Count the Dead: War and Survival in South Sudan . He is also the author of the award-winning Kill Anything That Moves: The Real American War in Vietnam . His website is NickTurse.com.


Sin City Milla , says: September 6, 2018 at 5:23 am GMT

Military conquests are the most ephemeral. Colonisation lasts longer. A mere century or two in the case of Europeans. But even 900 years was not sufficient for Greeks to remove the military n cultural threat posed by the Semites n Iranians of Southwest Asia, from Alexander's conquest in 323 BC till the Muslim "reconquista" of 632 AD. Only demographic "conquest" works in the end. If your women are not out-reproducing their women, then your military will fail spectacularly n quickly, as what had once been your population transforms into theirs. At that point, far from victory parades, you get to see statues to your former heros torn down, n the highest "patriotism" becomes enthusiastically opening the gates to what had once been your people's deadliest enemies.
Haxo Angmark , says: Website September 6, 2018 at 6:41 am GMT
the GWOT has 3 components:

1. keep Israhell on the map.
2. keep oil-producers taking dollars and only dollars for their oil
3. keep the CIA's poppy fields in Afghanistan in full production

on 1: ongoing victory, Israhell is still there
on2: Iraq and Libya back on the petrodollar, Iran pending
on3: ongoing victory, CIA drug ops proceeding normally

in ZOG-ruled 'Murka, every day is a day of new victories.

Anonymous , [317] Disclaimer says: September 6, 2018 at 11:18 am GMT
Mr. Turse is a comic. What a beautiful summary of the situation.
See a group, Imagine a possible threat, if both occur, bingo group =converts to =>terrorist
and each member converts to a subliminal threat. Imagine the psychology that can be applied to that bit of information to produce next day propaganda. Let us not forget the real media that displays the propaganda is owned by just 6 entities; global access to knowledge and real truth is gated and directed by search engine magic these two facts are IMO a real global threat to humanity.

Win by not losing/ In such a scenario increasing numbers in a terror group or increasing numbers of, or broadening the global distribution of terror groups produces more terror fodder. The competent imagination derives its threats from terror fodder ( fodder fits any size imagination).

When ever it is needed, proof of any non self-inflicted terrorism can be conjured from the imagination. As Mr Turse says proof of terrorism can be found in the definition, proof of victory can be found in the attack (as Mr. Turse so adequately expressed), and both are recorded in the history of terrorism, which can be found in the daily media presentations and the MSM annual report "Dollars Spent Chasing Terrorist from the Imagination". a joint publication of the Internationally linked intelligence services and the global college of paranoia producing propaganda.

victory is found in the attack because dollars start to flow; the more dollars the greater the victory.

But how much of this would be possible if the reserve currency were no longer the dollar? What will happen when Russia, China, Iran and others produce a new reserve currency or displace existing reserve currencies by assigning exchange value to the currency of each nation? The issuer of reserve currency measures its money supply by the checks he writes [their checks never bounce], everyone else measures their currency by the amount of the reserve currency they are able to keep in the bank ( to prevent their checks from bouncing].

Justsaying , says: September 6, 2018 at 11:22 am GMT
@Sean Because although Health and Education Keynesianisn would work as well as the Military variant, it also leads to an organised population mobilising for social change. And while wars do end eventually, social spending seems to increase over time without limit. I was almost sold on that explanation to my honest question, until the phrase

wars do end eventually

Would wars "ending eventually", not render the MIC obsolete? Is it not the MIC that thrives on perpetual wars with seemingly endless supplies of cash to fund their wars? Even in periods of relative calm (if ever, since WWII that is), is it not the constant threat of war that keeps the military monstrosity grinding away?

RVBlake , says: September 6, 2018 at 11:45 am GMT
74% of Americans express high confidence in their military? I wonder if 74% of Americans are even aware that we're at war. I read somewhere that U.S. generals now define victory as getting the Taliban to the bargaining table.
Tom Walsh , says: September 6, 2018 at 12:46 pm GMT
"out-guerrilla the guerrilla." was coined by Col. David Hackworth as out "G" ing the G and was shown to work in the Delta. Read his book "About Face" or "Steel my soldiers hearts"
Kjell Holmsten , says: September 6, 2018 at 1:39 pm GMT
Elites, read Bolsheviks or Freemasons win no war, they do not win over diseases, crime, idiot bla, bla. They are making money on them and they always turn to both sides. To the criminal gangsters, to the associations of the sick, to the losers in war, they can win in 20 years, etc. etc. This article is foam, foam. The Elites are trying to do everything and nobody understands anything, so the elite wins – the banker always has his blood money.
Carroll Price , says: September 6, 2018 at 1:42 pm GMT

the United States has not won a major conflict since 1945; has a trillion-dollar national security budget; has had 17 military commanders in the last 17 years in Afghanistan, a country plagued by 23,744 "security incidents" (the most ever recorded) in 2017 alone; has spent around $3 trillion, primarily on that war and the rest of the war on terror, including the ongoing conflict in Iraq, which then-defense secretary Donald Rumsfeld swore, in 2002, would be over in only "five days or five weeks or five months," but where approximately 5,000 U.S. troops remain today; and yet 74% of the American people still express high confidence in the U.S. military.

Let me correct that 1st sentence for you: the United States has not REPEATED THE MISTAKE OF WINNING a major conflict since 1945.

Why? Because as they quickly discovered, WW2 was the best thing that ever happened to the US economy, and that lots more money is made fighting wars than winning one, as proven by the above quoted figures.

Agent76 , says: September 6, 2018 at 2:54 pm GMT
September 17, 2014 US Pursues *134** Wars Around the World

The US is now involved in *134* wars or none, depending on your definition of war.

http://www.thedailybell.com/news-analysis/35654/US-Pursues-134-Wars-Around-the-World/

December 24, 2013 The Worldwide Network of US Military Bases

The US Military has bases in *63* countries. According to Gelman, who examined 2005 official Pentagon data, the US is thought to own a total of *737* bases in foreign lands.

http://www.globalresearch.ca/the-worldwide-network-of-us-military-bases/5564

ChuckOrloski , says: September 6, 2018 at 2:57 pm GMT
Hi Nick Turse,
Given OBL and Afghanistan Taliban had nothing to do with 9/11 terror attacks, it appears likely that the W. Bush regime launched war upon the Taliban exclusively for geopolitical interests, minerals, i.e., lithium, and construction of natural gas pipelines directed southeast to the subcontinent, India.
Fyi, approximately seven years ago, I saw a U.S. Veterans informational map which identified the Neo-"Grunts" military bases as within close proximity to pipeline construction.
Consequently, for me, I see US military's incessant stay in "the graveyard of Empires" as a stilted profit & loss (P&L) "'victory," but of course there's no (!) dividend for dumb goyim American citizens, but voila, oodles for global energy companies, untouchable Military-Industrial-$ecurity Complex, & killing "Poppy Fields," including Moneychanger pharmaceutical-opioid trade!
In short, the incredible cost for U.S. military's GWOT & advanced targeting of Russia is diabolically placed upon future generations of American taxpayers who, at the moment-of-their birth, are in debt, & the Mom and Pop' "victory" is incarnate in a 'guvmint CHIP card.
ZUSA wars "victory" is in the pockets of P&L-benefactors, and on Sunday afternoons, one can feel the "bern" when fighter jets flyover NFL stadiums!
Thanks for the education, Mr. Turse!
onusians , says: September 6, 2018 at 3:48 pm GMT
@jilles dykstra It did not in the civilised societies of north and western Europe. The nordic " model " is dead , and it has been a bad example to the world . Sweden has 10 million people , Norway 4 , Danmark 6 . These little countries can not be a valid model for anyone .

Like Toynbee said nordics are kind of a failed egoistic subcivilization of the germans , english of russians , with which they never had the courage to integrate . They seem to be happy in their autistic cold world , pretending to be a showroom for the UN perverts .

Thim , says: September 6, 2018 at 5:40 pm GMT
As to Vietnam the author is just clueless. Where was the so called crushing defeat? When we Americans pulled out in 1971 to 1972 the NVA was still stymied and impotent. Our so called allies hated us totally and the feeling was mutual. We actually had no allies in Vietnam except the savage yard tribes. But yes after we pulled out the South collapsed fast as we knew they would. They got exactly what they deserved. But it was a South Vietnamese defeat. By 1975 our armies were long gone. Repeat, there were no American divisions, battallions or platoons to lose. We were gone.

We still do not know exactly what Kissinger got from the Chinese at Paris in 1971-2, but he and Nixon seemed happy enough, and we pulled out and ceded Vietnam. We do know this was the exact time China began to cooperate with us in the Cold War against the Bolsheviks. Specifically, we know the Chinese allowed our B-52′s, loaded with nukes, to overfly, all along the Soviet border, and this continued to 1987, when the game was already up.

[Sep 03, 2018] Michael Hudson: Argentina's New $50 Billion IMF Loan Is Designed to Replay its 2001 Crisis

Notable quotes:
"... Alberto Nisman and Argentina's History of Assassinations and Suspicious Suicides ..."
"... Whether the crusading prosecutor's death is found to be a suicide or homicide, many Argentines probably won't believe it. The past has taught them to always look for the sinister explanation. ..."
"... Decades after the military murdered thousands, Mothers of Plaza de Mayo warn that the current era of alternative facts poses a new threat ..."
"... They'll gain the world but lose their souls They'll gain the world but lose their souls ..."
"... Don't believe politicians and thieves They want our people on their bended knees Pirates and robbers, liars and thieves You come like the wolf but dressed like the sheep ..."
"... If you go to Lagos what you find, vampires If you go to Kinshasa what you find, vampires If you go to Darfur what you find, vampires If you go to Malabo what you find, vampires ..."
"... Lies and theft Guns and debt Life and death IMF ..."
"... When the bank man comes to your door Better know you'll always be poor Bank loans and policies They can't make our people free ..."
"... You live on the blood of my people Everyone knows you've come to steal You come like the thieves in the night The whole world is ready to fight ..."
Jul 25, 2018 | www.nakedcapitalism.com

Posted on July 25, 2018 by Yves Smith

Yves here. In this Real News Network interview, Micheal Hudson explains why IMF "programs" inevitably hurt workers.

https://www.youtube-nocookie.com/embed/N5ZHD9-zdkQ?rel=0&showinfo=0

SHARMINI PERIES: It's The Real News Network. I'm Sharmini Peries, coming to you from Baltimore.

For several months now. Argentines have been taking to the streets to protest against neoliberal austerity measures of President Mauricio Macri. The most recent such protest took place on July 9 on Argentine's Independence Day. There has also been three general strikes thus far. In the two years since he took office, President Macri has laid off as many as 76,000 public sector workers, and slashed gas and water and electricity subsidies, leading to a tenfold increase in prices, in some cases.

Now, the government argues that all of this is necessary in order to stem inflation, and the decline of the currency's value. Last month, Macri received the backing of the International Monetary Fund. The IMF agreed to provide Argentina with a $50 billion loan, one of the largest in IMF history. In exchange, the Macri government will deepen the austerity measures already in place.

Joining me now to analyze Argentina's economic situation and its new IMF loan is Michael Hudson. Michael is a distinguished research professor of economics at the University of Missouri Kansas City. Welcome back, Michael.

MICHAEL HUDSON: Good to be back, Sharmini.

SHARMINI PERIES: Michael, why is it that Argentina needs such a huge credit line from the IMF?

MICHAEL HUDSON: For precisely the reason that you explained. The neoliberal policy has its aim rolling back any of the wage increases in employment that Mrs. Kirschner, the former president, implied, as part of the class war. So in order to shrink the economy, you have to basically cut back business, cut back employment. And so the purpose of the IMF loan was to enable the wealthy Argentinians, the oligarchy that's run the country for a century, to get all its money out and run. So like almost all IMF loans, the purpose is to subsidize capital flight out of Argentina so that the wealthy Argentinians can take their money and run before the currency collapses.

The aim of the loan is to indebt Argentina so much that its currency will continue to go down and down and down, essentially wrecking the economy. That's what the IMF does. That's its business plan. It makes a loan to subsidize capital flight, emptying out the economy of cash, leading the currency to collapse, as it is recently collapsed. As soon as the $50 billion was expended, or wasted, in letting wealthy Argentinians take their pesos, convert them into dollars, move them offshore to the United States, to England, to the Dutch West Indies, and offshore banking centers. Then they let the currency collapse so that the IMF model, which it's announced for the last 50 years, the model is if you can depreciate a currency what you're really lowering is the price of labor. Because raw materials and capital have an international price. But when a currency goes down it makes imports much more expensive, and that causes a price umbrella over the cost of living; that labor has to pay the equivalent international price for grain, for food, for oil and gas, for everything else.

And so what Macri has done is they agree with the IMF to wage class war with a vengeance, devaluation, leaving Argentina so hopelessly indebted that it can't possibly repay the IMF loan. So what we're seeing is a replay of what happened in 2001.

SHARMINI PERIES: Exactly. I was going to ask you, now, that was only 17 years ago, Michael. Argentinians do have memory here. They know what happened. They experienced it as well. Now, that was back in 2001 during the economic crisis when unemployment had increased so dramatically. That country went through a series of presidents and went through a series of crises. And we saw images of, you know, very similar to what we had seen in, in Greece not too long ago. Now, tell us more about that history. What exactly happened during that crisis, and then eventually how did Nestor Kirschner relieve the economy and come out of that crisis?

MICHAEL HUDSON: Well, the IMF staff said, don't make the loan. There's no possible way Argentina can pay the loan. It's all going to be made to the oligarchy for capital flight. You're giving the IMF money for crooks, and you're expecting the Argentine people to have to pay. So Argentina very quickly was left totally broke, as the IMF intended it to be. And so although it was 17 years ago, for the last 17 years the IMF has had a slogan: No more Argentinas. In other words, they said, we're never going to make the loan that is only given to oligarchs for capital flight to steal. It's as if you make a loan to the Ukraine, or to the Russian kleptocrats, or to the Greek banks to move offshore.

And yet here, here again, we're having a replay of what happened was, after Mrs. Kirschner came in, it was obvious to the [inaudible] to everybody, as it had been to the IMF staff, many of whom had resigned, that Argentina couldn't pay. So about 80 percent of Argentines' bondholders agreed to write down the debt to something that could be paid. They said, OK, you know, either it's a total default because they can't pay anything, or we'll write it down very substantially to what could be paid. Because the IMF really made a completely incompetent- not incompetent, directly corrupt insider deal. Well, unfortunately, the oligarchy had a fatal clause put in the original bond issue, saying they would agree to U.S. arbitration and to U.S. law if there was any dispute.

Well, after the old Argentine bonds depreciated in price, the bonds that were not renegotiated as part of the 80 percent, you had vulture funds buy them out. Especially Paul Singer, the Republican campaign donor who tends to buy politicians, along with foreign government bonds. And sued, and said, we want 100 percent on the dollar, not, you know, the 40 cents on the dollar or whatever they'd settled. And the case went to a senile, dying judge, Griesa in New York City, who said, well, there was something that's about a clause that said investors have to be treated separately. And Argentina said, well, that's fine, we'll pay the other 20 percent [inaudible] the 80 percent of all agreed to. The majority rules. And Griesa said, no, no, you have to pay the 80 percent all the money that the 20 percent demands. That's symmetry, because only if you let the hedge funds win can you go bankrupt again, wreck the government, and bring in oligarchy.

And so that ruling caused absolute turmoil. The United States State Department set out to support the oligarchy by doing everything it could to destabilize Argentina. And the Argentine people said, well, we'd better vote in a government that's supported by the United States. Maybe it will be nice to us. I don't know why foreign countries think that way, but they thought maybe if they voted the neoliberal that the United States would agree to forgive some of its debt. Well, that's not what neoliberals do. The neoliberal did just what you said at the beginning of the program; announced that he was going to cut employment, lower, stop inflation by making the working class bail, bear all of the costs, and would borrow- actually, it was the largest loan in IMF history, the $50 billion to enable the Argentine wealthy class to move its money offshore, leaving the economy a bankrupt shell. That's what the IMF does.

SHARMINI PERIES: Right. So let's imagine you are given the opportunity to resolve this issue. How would you be advising the Argentine government in terms of what can they do to stabilize the economy, given the circumstances they're facing right now?

MICHAEL HUDSON: Very simple. I'd say this debt is an odious debt. There is no way that Argentina can pay. The clause that bankrupted us was put in as a result of tens of thousands of professors, labor leaders, [land] people being assassinated. The United States financed an assassination team throughout Latin America after Pinochet in Chile to have basically a proxy government, and the Argentine loan that said we will, we will follow U.S. rules, not Argentine rules, basically should disqualify that debt from having to be paid. And it should say the IMF debt is an odious debt. It was given under fraudulent purposes solely for purposes of capital flight. We will not pay.

SHARMINI PERIES: Now, Michael, just one last question. Did you want to add something to what you were saying?

MICHAEL HUDSON: Well, once it doesn't pay the foreign debt, its balance of payments will be, will be there. The problem is that the creditors have always used violence in order to get their way. I don't see how the Argentina situation can be solved without violence, because the creditors are using police force, covert assassination. They're just as bad as the dirty war that had that mass assassination period in the late, into the early '90s. There's obviously going to be not only the demonstrations that you showed, but an outright war, because it's broken out in Argentina more drastically than anywhere else right now in Latin America, except in Venezuela.

SHARMINI PERIES: Michael, at the moment, the Fed is gradually increasing interest rates and the dollar is gaining in value. This is sucking the financial capital not only in Argentina but in many places around the world. Also, you know, they're going to be soon in crisis as well. What is, what can the developing economies do?

MICHAEL HUDSON: Here's the problem. When the United States raises interest rates, that causes foreign money to flow, flow into the dollar, because the rest of the world, Europe and other areas, are keeping low interest rates. So as money goes into the dollar, to take advantage of the rising interest rates, the dollar rises. Now, that makes it necessary for Argentina or any other country, third world country, to pay more and more pesos in order to buy the dollars to pay that foreign debt. Because Argentina and third world countries have violated the prime rule of credit. And that is never to denominate a debt in another currency that you can't pay. And all of a sudden, the dollar debts become much more expensive in peso terms, and as a result, all throughout the world right now you're having a collapse of bond prices of third world debt. Argentine bonds, Chilean bonds, African bonds, near Eastern bonds. Third world debt bonds are plunging, because the investors realize that the countries can't pay. The game looks like it may be over.

The good side of this is that Argentina now can join with other third world countries and say we are going to redenominate the debts in our own currency, or we just won't pay, or we will do what the world did in 1931 and announce a moratorium on intergovernmental debts. Now, that was done on German reparations and the World War I inter-ally debts. Something like that. Some international conference to declare a moratorium and say, what is the amount that actually can be paid? And to write down third world debts to the amount that should be paid.

Because the principle that countries have to say is that no country should be obliged to sacrifice its own economy, its own employment, and its own independence to pay foreign creditors. Every country has a right to put its own citizens first and its own economy first before foreign creditors, especially when the loans are made under false pretenses, as the IMF has made pretending to stabilize the currency instead of subsidizing capital flight to destabilize the currency.

SHARMINI PERIES: All right, Michael. I thank you so much. And we'll continue this conversation. There's so much more to discuss, and so many countries here in this situation for that discussion as well. I thank you so much for joining us today.

MICHAEL HUDSON: Thanks. I think it's going to get worse, so we'll have a lot to discuss.

SHARMINI PERIES: And thank you for joining us here on The Real News Network.


tawal , July 25, 2018 at 3:12 am

Why does the IMF have a US dollar credit line at the US FED, and Argentina does not; countries like Canada do, as do companies like Harley Davidson. Why the discrimination?

vlade , July 25, 2018 at 3:26 am

I'd really like your source on HD having a line with Fed .

tawal , July 25, 2018 at 10:05 am

Here's one: http://www.motorcycle-usa.com/2010/12/article/harley-davidson-loaned-2-3-billion-from-fed/

I recall Bloomberg doing quite an expose, when the FED databases were forced to be released.

Disturbed Voter , July 25, 2018 at 7:00 am

"The IMF was originally laid out as a part of the Bretton Woods system exchange agreement in 1944. During the Great Depression, countries sharply raised barriers to trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade."

IMF is an anachronism, a perpetual organization seeking new reasons for its continued existence.

And like all Western post WW II institutions, is part of the Cold War. Of course any actions by US connected entities in Latin America/Caribbean are part of the Monroe Doctrine ;-(

Thuto , July 25, 2018 at 7:55 am

Gas prices in Egypt have just been raised by 75% as part of the austerity measures attached to the $12bn loan granted by the IMF. Regular folk barely have two pennies to rub together and have been battered by this and other measures ostensibly designed to "lift the economy and lure back investors (as per the IMF rationale behind these crushing loan conditions). I wonder if the same sleight of hand outlined by Prof Hudson applies here (I.e. whether this is an IMF subsidised capital flight scheme designed to aid the Egyptian oligarchy in repatriating its loot) and whether we should cast a suspicious eye towards the oligarchs in any country the IMF extends a loan to.

michael hudson , July 25, 2018 at 8:33 am

That's my point, of course.

The Rev Kev , July 25, 2018 at 9:02 am

This puts me in mind of a blog that I came across sometime ago at http://ferfal.blogspot.com/ which has relevance here. Yeah, he tries to flog a lot of survival gear and the like but this site came out of his experiences in the first crash in Argentina in 2001. If you are prepared to dig deep into his files you will find all sorts of stories about what life was like in Argentina and it was awful and desperate. Probably the best place to start is at http://ferfal.blogspot.com/search/label/Argentine%20Collapse

Alejandro , July 25, 2018 at 10:52 am

From your link, this jumped out, as agnotological apologetics:

" Right now with President Mauricio Macri there's hope, but the change the country needs will take decades "

He didn't make much of an effort to clarify, who holds this "hope" nor what "change the country needs". OTOH Michael Hudson, in his last two interviews on NC, did. He (Feral) also seems oblivious to the neoliberal projects role in Latin America, and in Argentina's 2001 crises.

And this:

"Anyway, that's what happened in Argentina and this is why in spite of the good president we now have we need another 10 or 20 years for an entire generation of people to know something other than populism and corruption as a way of life."

Again, oblivious to the neoliberal projects role in Latin America, and in Argentina's 2001 crises. Who benefits from austerity, and how?

Bud-in PA , July 25, 2018 at 9:48 am

"As soon as the $50 billion was expended, or wasted, in letting wealthy Argentinians take their pesos, convert them into dollars, move them offshore to the United States, to England, to the Dutch West Indies, and offshore banking centers"

Not sure I understand this. Who is converting the Oligarch pesos to dollars? Crooks in the Argentine government?

Synoia , July 25, 2018 at 10:35 am

The Argentinian Banks, and their US correspondent Banks. The US is one of the largest safe havens for foreign "hot money" in the world.

"Free flow" of Capital is a key feature of "Free Trade."

Mel , July 25, 2018 at 10:39 am

As I understand it, it's the Oligarchs' butlers and footmen in the Argentine government that do it. If the Argentine government has a policy of pegging the peso at some set number of pesos per dollar, then the government is obliged to hand over this many dollars in exchange for that many pesos. That's what a peg is. One way to get the dollars would be through a loan which the IMF would "reluctantly" give them, conditional on a few crushing social policies.
Like I said before, this so much resembles a leveraged buy-out.

Ba Wang Long , July 25, 2018 at 11:51 am

Could someone please explain the mechanisms by which the $50B loan leaves the country. Exactly how do the elites get their hands on this money and then get it out of the country?

Mel , July 25, 2018 at 1:10 pm

If you haven't already read it, check Prof. Hudson's previous article . It describes more about the methods.
Of course, if you have, then I'm not helping.

HotFlash , July 25, 2018 at 1:14 pm

Ah yes! As they taught us back in accounting classes, it is easy to cook the books, the hard part is getting the cash out.

I heard this excellent podcast from Democracy at Work earlier this week wherein Michael Hudson explains it very clearly.

Synoia , July 25, 2018 at 5:59 pm

They convert their liquid cash into Dollars. Then wire it to Banks outside the Argentine, and invest, (typically buy property). In addition, they take out loans against their Argentinian assets or property, and convert those pesos into dollars, and export those dollars as well.

All legal and above board.

When the peso collapses, they repatriate some of their dollars, and pay of the now deflated loans.

Jim Haygood , July 25, 2018 at 12:42 pm

'The Argentine loan that said we will, we will follow U.S. rules, not Argentine rules, basically should disqualify that debt from having to be paid.'

Most foreign currency bonds floated by developing economies specify New York or London legal jurisdiction because of (1) well-developed case law; (2) creditors don't trust the objectivity of courts in borrower countries.

If all developing country debt were considered "odious" merely because of New York or English legal jurisdiction, lending to developing countries would stop cold.

'I don't see how the Argentina situation can be solved without violence, because the creditors are using police force, covert assassination.'

Cite one -- just one -- link showing "covert assassination" occurring in Argentina. The Dirty War of the 1970s and early 1980s doesn't count. You can't keep waving the bloody shirt of military dictatorship in South America more than thirty years after it ended.

JTMcPhee , July 25, 2018 at 1:33 pm

I'm sure there is a nice polite clear unassailable explanation for what happened in this instance:

" Alberto Nisman and Argentina's History of Assassinations and Suspicious Suicides

Whether the crusading prosecutor's death is found to be a suicide or homicide, many Argentines probably won't believe it. The past has taught them to always look for the sinister explanation. "

https://www.propublica.org/article/alberto-nisman-argentinas-history-of-assassinations-and-suspicious-suicides

And maybe creditors like to have their loan docs choose US/NY courts and law as the basis for dispute resolution because both are stacked in favor of creditors? Home court "white shoe lawyer" advantage? No history of support for the great creditor scams of the past? the word "jackal" has no meaning? There was no reason for that guy to write a sequel to "Confessions of an Economic Hit Man"?

Really, there's no need for the "bloody shirt," now is there, given current right-wing dictators supported by "us," what the Empire and Banksters and the rest are doing in and to central and South America, now is there? But it's a great distraction, I'll grant, and might even work as impeachment for some folks

Plenue , July 25, 2018 at 7:09 pm

I'm shocked that Haygood would confidently talk about something he doesn't understand. Shocked!

Roberto , July 25, 2018 at 6:18 pm

Further, from a previous MH article here

"No country should be obliged to pay its bondholders if the price of paying means austerity, unemployment, shrinking population, emigration, rising suicide rates, abolition of public health standards, and selloffs of the public domain to monopolists."

These sorts of rules would put a dead stop to foreign loans.

JTMcPhee , July 25, 2018 at 7:59 pm

Something always bothers me about the "bondholder" sanctity meme. Bonds are "investments," right? And there are RISKS associated with investments, right? And there's supposed to be a "risk premium" built into the "price" of the bond, right?

At least Investopedia and other sources say so, basically that these are NOT God-sanctioned absolute-right deals where the bondholder takes priority over everyone else in the world, right? https://www.investopedia.com/ask/answers/05/bondrisks.asp

And bonds are sort of contracts, subject to the rules and defenses that apply in contract disputes, albeit specialized rules, right? Impossibility and stuff? Fraud?

So why are the rest of us, like where "the government" is dumb or corrupt (CalPERS?)enough to "obligate" the wealth and future of a country by "selling bonds" to "investors," as security for "loans" that get siphoned off by corruption and stupidity, dumb enough to usually just roll over and accept that we have to live like serfs to "pay off the bonds?" Especially when the same scam has been pulled by the same set of Banksters over and over?

And yes, in the financialized westernized world, we mopes are tied to the "paying for progress [some definition of same] by borrowing," aren't we?

Interesting that the hated Sharia Law, the banking and investment part of it, kind of makes those allegedly risk-free kinds of fee- and profit- and reacketeer-generating "deals" not only unlawful, but against the will of G_D? https://shariabanking.com/

We could do better, couldn't we?

knowbuddhau , July 25, 2018 at 7:03 pm

Who are you to say when?

How telling. Was only 7 years ago that the torture-murderer of mothers and nuns, the Blonde Angel of Death himself, Alfredo Ignacio Astiz, was sentenced to life in prison. Per Wikipedia:

Astiz, a specialist in the infiltration of human rights organizations, was implicated in the December 1977 kidnapping of twelve human rights activists, including Azucena Villaflor and two other founders of the Mothers of the Plaza de Mayo, and two French nationals, Léonie Duquet and Alice Domon, who were Catholic nuns. None of the twelve was seen alive again outside detention and all were believed killed, rumored to be among the bodies washed up on beaches south of Buenos Aires in late 1977.

To this day, torturers and murderers hold public offices. But I'm sure that's all in the past. Anyone who still talks about the US-sponsored 16 years of Dirty War, from 1967-1983, is a bloody shirt-waving fool, amirite Jim?

BUENOS AIRES, Argentina (CNN) [2 March 1998] -- Argentina's "dirty war" ended 15 years ago, but it is an ugly episode that cannot be buried and refuses to be silenced.

Aging mothers and grandmothers march each week as the Mothers of Plaza de Mayo, carrying banners and chanting, "We will not be stopped. We will not be broken. We have held on for 20 years."

They demand to know the whereabouts of sons and daughters and husbands and wives who were detained by the ruling military junta between 1976 and 1983, and then disappeared.

The junta seized power in Argentina in March 1976 and began a systematic campaign to wipe out left-wing terrorism. But the terror it spread exceeded anything the leftists ever dreamed of, claiming the lives of dissidents as well as innocent civilians.

More than 9,000 people disappeared during the dirty war, and some human rights groups say as many as 30,000 may have been tortured and killed.

"We only want to know where our sons and daughters are -- alive or dead," says one woman. "We are anguished because we don't know whether they are sick or hungry or cold. We don't know anything. We are desperate, desperate because we don't know who to turn to.

"Consulates, embassies, government ministries, churches. Every place is closed to us. Everywhere they shut us out. We beg you to help us. We beg you."

40 years later, the mothers of Argentina's 'disappeared' refuse to be silent [Guardian 28 April 2017]

Decades after the military murdered thousands, Mothers of Plaza de Mayo warn that the current era of alternative facts poses a new threat

Torturers and murderers hold public office, thanks to an amnesty. But I'm sure no one today, in the whole of Argentina, would ever consider what well, actually has long been standard operating procedure in Argentina.

ChrisAtRU , July 25, 2018 at 3:12 pm

Nation State Debtor's Prison the beatings will continue

Chauncey Gardiner , July 25, 2018 at 4:55 pm

While not precisely on point, reminds me of a monologue to music titled "FMI", the Portuguese abbreviation for IMF, by Portuguese poet Mario Branco. Salient lyrics (English translation) of IMF:

"It's 'Monetary Internationalism' The IMF doesn't exist The IMF is a mask."

"There can't exist a reason for so much suffering."

ChrisAtRU , July 25, 2018 at 5:37 pm

Thievery Corporation were far more brutal in their Fela-Kuti-inspired "Vampires"

Lyrics (abridged):

They'll gain the world but lose their souls
They'll gain the world but lose their souls

Don't believe politicians and thieves
They want our people on their bended knees
Pirates and robbers, liars and thieves
You come like the wolf but dressed like the sheep

If you go to Lagos what you find, vampires
If you go to Kinshasa what you find, vampires
If you go to Darfur what you find, vampires
If you go to Malabo what you find, vampires

Lies and theft
Guns and debt
Life and death
IMF

When the bank man comes to your door
Better know you'll always be poor
Bank loans and policies
They can't make our people free

You live on the blood of my people
Everyone knows you've come to steal
You come like the thieves in the night
The whole world is ready to fight

knowbuddhau , July 25, 2018 at 5:44 pm

This:

The clause that bankrupted us was put in as a result of tens of thousands of professors, labor leaders, [land] people being assassinated. The United States financed an assassination team throughout Latin America after Pinochet in Chile to have basically a proxy government, and the Argentine loan that said we will, we will follow U.S. rules, not Argentine rules, basically should disqualify that debt from having to be paid. And it should say the IMF debt is an odious debt. It was given under fraudulent purposes solely for purposes of capital flight. We will not pay.

And this:

The problem is that the creditors have always used violence in order to get their way.

Are why I so love Michael Hudson. There's the blood so studiously avoided in the desanguinated language of "economics." Its absence is the tell-tale of the kind of disembodiment described by Nancy Krieger (h/t Lambert ).

Embodiment, in other words, is literal. The
ecosocial premise is that clues to current and
changing population patterns of health, includ-
ing social disparities in health, are to be found
chiefly in the dynamic social, material, and
ecological contexts into which we are born,
develop, interact, and endeavour to live mean-
ingful lives. The contrast is to pervasive aetiolo-
gical hypotheses concerned mainly with
decontextualised and disembodied ''behaviours''
and ''exposures'' interacting with equally decon-
textualised and disembodied ''genes.'' The dis-
tinction is more than simply between
''determinants'' and ''mechanisms.'' Consider,
for example, contending -- and longstanding --
claims about racism compared with ''race'' as
causes of racial/ethnic disparities in health.

An embodied approach promotes testing hypoth-
eses to ascertain if the observed disparities are a
biological expression of racial discrimination,
past and present; by contrast, a disembodied
and decontextualised approach promulgates
research focused on detrimental genes and/or
''lifestyles.'' The vastly different implications
of these approaches for generating epidemiolo-
gical knowledge and informing policy underscore
the utility of clarifying the significance of
''embodiment'' for epidemiological inquiry.
[Footnotes omitted, emphasis added.]

Ah yes, but talking about our ideas about the problem, or talking about the talking about the problem, is so much better for catapulting the propaganda.

Also, if it looks, walks, and bankrupts Argentina over and over exactly like an Economic Hit Job aka mass murder and looting under the color of law by the Suits in broad g.d. daylight, then yes. Yes it is.

Scott1 , July 25, 2018 at 9:30 pm

In the '70s at the best universities Ecology Classes were instituted and the young well off students were told first, that the climate was being altered as a result of human activities.
Nixon was told by the CIA that overpopulation was the main treat to future US Security.

The Vatican quashed that way of looking at it. Gopsay policies are all the same as Vatican policies.
Loyalty to the nation of their birth for a rich person & their wealthy families was thrown out the window.
The jetsetter class now buys the best deal far as taxes and protections.

Their goal is to eliminate any harm to them or their families from "Forces beyond their control." If the leaders of the world are going to co-operate with them, those leaders will be paid. For the majority who are born to labor and become labor those things done by bankers and their leaders become for them "Forces beyond their control."

The rich know that overpopulation is already the fact at 7.5 billion. They will bond together on the tarmacs hanging around their jets for little talks as took place between Bill Clinton and Lauretta Lynch.
"All those people that don't like how we get rich, who are taking up space we want, well, let them starve. The science says there are too many of them anyway."
(Wasn't a discussion of how to engineer revolts wonderful to crush, but is used as illustrative of how jet setters get around to meetings that lead to this or that policy of the day.)

This is the essence of "Scientific Socialism". Current Trump Administration policies will cause the withdrawal of US lands devoted to agriculture. What was for Stalin destruction of the Kulaks and collectivization starvation of Armenians, or Peasants, or the Intellogemtsia, or all those ambivalent about who is in power and are therefore Counter-Revolutionaries, starving them all leaves only the ignorant, cowed, or lucky alive.

Creating the conditions for civil wars is a great thing for the banks and their loyal patrons, the war materiel`s industries. The people rebel and oligarchs at the top have them killed.

Trotsky made the point that the weapons in the arsenals are the peoples. Somehow soldiers and police in nation after nation don't see it that way. In the US the police are made soldiers in the drug war. Keeping the peace is not their primary job. No pot smoking peaceniks are to be hired so the ranks are securely filled by thugs and incompetents made special by law. They shoot Black people at the drop of a hat. They shoot the poor driven crazy pretty often as well.

Somebody wondered why in the US Blues & Reds or Democrats, the Leftists silo and don't talk civilly to each other. Trump supporters show and shoot guns or as in Charlottesville Virginia run as many people as possible over and are obviously willing to kill other Americans. In Weimar Germany the "Scientific Socialists" had their uniformed enforcers.

Dictators have their own organizations exultant at the opportunity to be rewarded for beating and killing the people who object to the destruction of civilization. Spectaculars in stadiums, like Trump's to come Military Parade become more common as if such is civilization when it is more indicative of a break down of civilization itself.

I have no means to remove myself and my wife from the roiling clouds of more murder in the streets. I'll be "collapsing in place" as described by Lambert Strether. These things and the ideologies behind them happening are not accidental of "Forces Beyond My Control".

Thanks

Chauncey Gardiner , July 25, 2018 at 10:18 pm

The true purposes of the IMF loan are questionable to me.

1.) Over the past few years, we have seen market rigging by large transnational banks in both the LIBOR and foreign exchange markets. This raises the question of whether there was covert market manipulation to rapidly drop the Argentine peso and coerce the Argentine government to borrow funds from the IMF to defend the peso in order to assure that nation was able to pay for necessary imports?

2.) Was this debt undertaken to facilitate capital flight for a small, wealthy segment of the Argentine population without the consent of or benefit to the people of Argentina, or for some other unstated reason?

If either of these is true, this debt can legitimately be considered as "odious debt" by the people of Argentina and potentially repudiated.

It also appears to me that there is a high probability that the austerity measures likely to be imposed under this $50 billion loan to Argentina by the IMF could violate the International Covenant on Economic, Social and Cultural Rights.

Not an attorney, nor knowledgeable about international law. Just my opinion as an ordinary citizen based on my reading of the post and Wikipedia.

[Aug 31, 2018] Exposing the Giants- The Global Power Elite by Prof. Peter Phillips

Notable quotes:
"... Developing the tradition charted by C. Wright Mills in his 1956 classic The Power Elite , in his latest book, Professor Peter Phillips starts by reviewing the transition from the nation state power elites described by authors such as Mills to a transnational power elite centralized on the control of global capital. ..."
Aug 31, 2018 | www.globalresearch.ca

Developing the tradition charted by C. Wright Mills in his 1956 classic The Power Elite , in his latest book, Professor Peter Phillips starts by reviewing the transition from the nation state power elites described by authors such as Mills to a transnational power elite centralized on the control of global capital.

Thus, in his just-released study Giants: The Global Power Elite , Phillips, a professor of political sociology at Sonoma State University in the USA, identifies the world's top seventeen asset management firms, such as BlackRock and J.P Morgan Chase, each with more than one trillion dollars of investment capital under management, as the 'Giants' of world capitalism. The seventeen firms collectively manage more than $US41.1 trillion in a self-invested network of interlocking capital that spans the globe.

This $41 trillion represents the wealth invested for profit by thousands of millionaires, billionaires and corporations. The seventeen Giants operate in nearly every country in the world and are 'the central institutions of the financial capital that powers the global economic system'. They invest in anything considered profitable, ranging from 'agricultural lands on which indigenous farmers are replaced by power elite investors' to public assets (such as energy and water utilities) to war.

In addition, Phillips identifies the most important networks of the Global Power Elite and the individuals therein. He names 389 individuals (a small number of whom are women and a token number of whom are from countries other than the United States and the wealthier countries of Western Europe) at the core of the policy planning nongovernmental networks that manage, facilitate and defend the continued concentration of global capital. The Global Power Elite perform two key uniting functions, he argues: they provide ideological justifications for their shared interests (promulgated through their corporate media), and define the parameters of action for transnational governmental organizations and capitalist nation-states.

More precisely, Phillips identifies the 199 directors of the seventeen global financial Giants and offers short biographies and public information on their individual net wealth. These individuals are closely interconnected through numerous networks of association including the World Economic Forum, the International Monetary Conference, university affiliations, various policy councils, social clubs, and cultural enterprises. For a taste of one of these clubs, see this account of The Links in New York. As Phillips observes: 'It is certainly safe to conclude they all know each other personally or know of each other in the shared context of their positions of power.'

The Giants, Phillips documents, invest in each other but also in many hundreds of investment management firms, many of which are near-Giants. This results in tens of trillions of dollars coordinated in a single vast network of global capital controlled by a very small number of people. 'Their constant objective is to find enough safe investment opportunities for a return on capital that allows for continued growth. Inadequate capital-placement opportunities lead to dangerous speculative investments, buying up of public assets, and permanent war spending.'

Because the directors of these seventeen asset management firms represent the central core of international capital, 'Individuals can retire or pass away, and other similar people will move into their place, making the overall structure a self-perpetuating network of global capital control. As such, these 199 people share a common goal of maximum return on investments for themselves and their clients, and they may seek to achieve returns by any means necessary – legal or not . the institutional and structural arrangements within the money management systems of global capital relentlessly seek ways to achieve maximum return on investment, and the conditions for manipulations – legal or not – are always present.'

Like some researchers before him, Phillips identifies the importance of those transnational institutions that serve a unifying function. The World Bank, International Monetary Fund, G20, G7, World Trade Organization (WTO), World Economic Forum (WEF), Trilateral Commission, Bilderberg Group , Bank for International Settlements, Group of 30 (G30), the Council on Foreign Relations and the International Monetary Conference serve as institutional mechanisms for consensus building within the transnational capitalist class, and power elite policy formulation and implementation. 'These international institutions serve the interests of the global financial Giants by supporting policies and regulations that seek to protect the free, unrestricted flow of capital and debt collection worldwide.'

But within this network of transnational institutions, Phillips identifies two very important global elite policy-planning organizations: the Group of Thirty (which has 32 members) and the extended executive committee of the Trilateral Commission (which has 55 members). These nonprofit corporations, which each have a research and support staff, formulate elite policy and issue instructions for their implementation by the transnational governmental institutions like the G7, G20, IMF, WTO, and World Bank. Elite policies are also implemented following instruction of the relevant agent, including governments, in the context. These agents then do as they are instructed. Thus, these 85 members (because two overlap) of the Group of Thirty and the Trilateral Commission comprise a central group of facilitators of global capitalism, ensuring that 'global capital remains safe, secure, and growing'.

So, while many of the major international institutions are controlled by nation-state representatives and central bankers (with proportional power exercised by dominant financial supporters such as the United States and European Union countries), Phillips is more concerned with the transnational policy groups that are nongovernmental because these organizations 'help to unite TCC power elites as a class' and the individuals involved in these organizations facilitate world capitalism. 'They serve as policy elites who seek the continued growth of capital in the world.'

Developing this list of 199 directors of the largest money management firms in the world, Phillips argues, is an important step toward understanding how capitalism works globally today. These global power elite directors make the decisions regarding the investment of trillions of dollars. Supposedly in competition, the concentrated wealth they share requires them to cooperate for their greater good by identifying investment opportunities and shared risk agreements, and working collectively for political arrangements that create advantages for their profit-generating system as a whole.

Their fundamental priority is to secure an average return on investment of 3 to 10 percent, or even more. The nature of any investment is less important than what it yields: continuous returns that support growth in the overall market. Hence, capital investment in tobacco products, weapons of war, toxic chemicals, pollution, and other socially destructive goods and services are judged purely by their profitability. Concern for the social and environmental costs of the investment are non-existent. In other words, inflicting death and destruction are fine because they are profitable.

So what is the global elite's purpose? In a few sentences Phillips characterizes it thus: The elite is largely united in support of the US/NATO military empire that prosecutes a repressive war against resisting groups – typically labeled 'terrorists' – around the world. The real purpose of 'the war on terror' is defense of transnational globalization, the unimpeded flow of financial capital around the world, dollar hegemony and access to oil; it has nothing to do with repressing terrorism which it generates, perpetuates and finances to provide cover for its real agenda. This is why the United States has a long history of CIA and military interventions around the world ostensibly in defense of 'national interests'.

Giants: The Global Power Elite

Wealth and Power

An interesting point that emerges for me from reading Phillips thoughtful analysis is that there is a clear distinction between those individuals and families who have wealth and those individuals who have (sometimes significantly) less wealth (which, nevertheless, is still considerable) but, through their positions and connections, wield a great deal of power. As Phillips explains this distinction, 'the sociology of elites is more important than particular elite individuals and their families'. Just 199 individuals decide how more than $40 trillion will be invested. And this is his central point. Let me briefly elaborate.

There are some really wealthy families in the world, notably including the families Rothschild (France and the United Kingdom), Rockefeller (USA), Goldman-Sachs (USA), Warburgs (Germany), Lehmann (USA), Lazards (France), Kuhn Loebs (USA), Israel Moses Seifs (Italy), Al-Saud (Saudi Arabia), Walton (USA), Koch (USA), Mars (USA), Cargill-MacMillan (USA) and Cox (USA). However, not all of these families overtly seek power to shape the world as they wish.

Similarly, the world's extremely wealthy individuals such as Jeff Bezos (USA), Bill Gates (USA), Warren Buffett (USA), Bernard Arnault (France), Carlos Slim Helu (Mexico) and Francoise Bettencourt Meyers (France) are not necessarily connected in such a way that they exercise enormous power. In fact, they may have little interest in power as such, despite their obvious interest in wealth.

In essence, some individuals and families are content to simply take advantage of how capitalism and its ancilliary governmental and transnational instruments function while others are more politically engaged in seeking to manipulate major institutions to achieve outcomes that not only maximize their own profit and hence wealth but also shape the world itself.

So if you look at the list of 199 individuals that Phillips identifies at the centre of global capital, it does not include names such as Bezos, Gates, Buffett, Koch, Walton or even Rothschild, Rockefeller or Windsor (the Queen of England) despite their well-known and extraordinary wealth. As an aside, many of these names are also missing from the lists compiled by groups such as Forbes and Bloomberg , but their absence from these lists is for a very different reason given the penchant for many really wealthy individuals and families to avoid certain types of publicity and their power to ensure that they do.

In contrast to the names just listed, in Phillips' analysis names like Laurence (Larry) Fink (Chairman and CEO of BlackRock), James (Jamie) Dimon (Chairman and CEO of JPMorgan Chase) and John McFarlane (Chairman of Barclays Bank), while not as wealthy as those listed immediately above, wield far more power because of their positions and connections within the global elite network of 199 individuals.

Predictably then, Phillips observes, these three individuals have similar lifestyles and ideological orientations. They believe capitalism is beneficial for the world and while inequality and poverty are important issues, they believe that capital growth will eventually solve these problems. They are relatively non-expressive about environmental issues, but recognize that investment opportunities may change in response to climate 'modifications'. As millionaires they own multiple homes. They attended elite universities and rose quickly in international finance to reach their current status as giants of the global power elite. 'The institutions they manage have been shown to engage in illegal collusions with others, but the regulatory fines by governments are essentially seen as just part of doing business.'

In short, as I would characterize this description: They are devoid of a legal or moral framework to guide their actions, whether in relation to business, fellow human beings, war or the environment and climate. They are obviously typical of the elite.

Any apparent concern for people, such as that expressed by Fink and Dimon in response to the racist violence in Charlottesville, USA in August 2017, is simply designed to promote 'stability' or more precisely, a stable (that is, profitable) investment and consumer climate.

The lack of concern for people and issues that might concern many of us is also evident from a consideration of the agenda at elite gatherings. Consider the International Monetary Conference. Founded in 1956, it is a private yearly meeting of the top few hundred bankers in the world. The American Bankers Association (ABA) serves as the secretariat for the conference. But, as Phillips notes: 'Nothing on the agenda seems to address the socioeconomic consequences of investments to determine the impacts on people and the environment.' A casual perusal of the agenda at any elite gathering reveals that this comment applies equally to any elite forum. See, for example, the agenda of the recent WEF meeting in Davos . Any talk of 'concern' is misleading rhetoric.

Hence, in the words of Phillips: The 199 directors of the global Giants are 'a very select set of people. They all know each other personally or know of each other. At least 69 have attended the annual World Economic Forum, where they often serve on panels or give public presentations. They mostly attended the same elite universities, and interact in upperclass social setting[s] in the major cities of the world. They all are wealthy and have significant stock holdings in one or more of the financial Giants. They are all deeply invested in the importance of maintaining capital growth in the world. Some are sensitive to environmental and social justice issues, but they seem to be unable to link these issues to global capital concentration.'

Of course, the global elite cannot manage the world system alone: the elite requires agents to perform many of the functions necessary to control national societies and the individuals within them. 'The interests of the Global Power Elite and the TCC are fully recognized by major institutions in society. Governments, intelligence services, policymakers, universities, police forces, military, and corporate media all work in support of their vital interests.'

In other words, to elaborate Phillips' point and extend it a little, through their economic power, the Giants control all of the instruments through which their policies are implemented. Whether it be governments, national military forces, 'military contractors' or mercenaries (with at least $200 billion spent on private security globally, the industry currently employs some fifteen million people worldwide) used both in 'foreign' wars but also likely deployed in future for domestic control, key 'intelligence' agencies, legal systems and police forces, major nongovernment organizations, or the academic, educational, 'public relations propaganda', corporate media, medical, psychiatric and pharmaceutical industries, all instruments are fully responsive to elite control and are designed to misinform, deceive, disempower, intimidate, repress, imprison (in a jail or psychiatric ward), exploit and/or kill (depending on the constituency) the rest of us, as is readily evident.

Defending Elite Power

Phillips observes that the power elite continually worries about rebellion by the 'unruly exploited masses' against their structure of concentrated wealth. This is why the US military empire has long played the role of defender of global capitalism. As a result, the United States has more than 800 military bases (with some scholars suggesting 1,000) in 70 countries and territories. In comparison, the United Kingdom, France, and Russia have about 30 foreign bases. In addition, US military forces are now deployed in 70 percent of the world's nations with US Special Operations Command (SOCOM) having troops in 147 countries, an increase of 80 percent since 2010. These forces conduct counterterrorism strikes regularly, including drone assassinations and kill/capture raids.

'The US military empire stands on hundreds of years of colonial exploitation and continues to support repressive, exploitative governments that cooperate with global capital's imperial agenda. Governments that accept external capital investment, whereby a small segment of a country's elite benefits, do so knowing that capital inevitably requires a return on investment that entails using up resources and people for economic gain. The whole system continues wealth concentration for elites and expanded wretched inequality for the masses .

'Understanding permanent war as an economic relief valve for surplus capital is a vital part of comprehending capitalism in the world today. War provides investment opportunity for the Giants and TCC elites and a guaranteed return on capital. War also serves a repressive function of keeping the suffering masses of humanity afraid and compliant.'

As Phillips elaborates: This is why defense of global capital is the prime reason that NATO countries now account for 85 percent of the world's military spending; the United States spends more on the military than the rest of the world combined.

In essence, 'the Global Power Elite uses NATO and the US military empire for its worldwide security. This is part of an expanding strategy of US military domination around the world, whereby the US/ NATO military empire, advised by the power elite's Atlantic Council , operates in service to the Transnational Corporate Class for the protection of international capital everywhere in the world'.

This entails 'further pauperization of the bottom half of the world's population and an unrelenting downward spiral of wages for 80 percent of the world. The world is facing economic crisis, and the neoliberal solution is to spend less on human needs and more on security. It is a world of financial institutions run amok, where the answer to economic collapse is to print more money through quantitative easing, flooding the population with trillions of new inflation-producing dollars. It is a world of permanent war, whereby spending for destruction requires further spending to rebuild, a cycle that profits the Giants and global networks of economic power. It is a world of drone killings, extrajudicial assassinations, death, and destruction, at home and abroad.'

Where is this all heading?

So what are the implications of this state of affairs? Phillips responds unequivocally: 'This concentration of protected wealth leads to a crisis of humanity, whereby poverty, war, starvation, mass alienation, media propaganda, and environmental devastation are reaching a species-level threat. We realize that humankind is in danger of possible extinction'.

He goes on to state that the Global Power Elite is probably the only entity 'capable of correcting this condition without major civil unrest, war, and chaos' and elaborates an important aim of his book: to raise awareness of the importance of systemic change and the redistribution of wealth among both the book's general readers but also the elite, 'in the hope that they can begin the process of saving humanity.' The book's postscript is a 'A Letter to the Global Power Elite', co-signed by Phillips and 90 others, beseeching the elite to act accordingly.

'It is no longer acceptable for you to believe that you can manage capitalism to grow its way out of the gross inequalities we all now face. The environment cannot accept more pollution and waste, and civil unrest is everywhere inevitable at some point. Humanity needs you to step up and insure that trickle-down becomes a river of resources that reaches every child, every family, and all human beings. We urge you to use your power and make the needed changes for humanity's survival.'

But he also emphasizes that nonviolent social movements, using the Universal Declaration of Human Rights as a moral code, can accelerate the process of redistributing wealth by pressuring the elite into action.

Conclusion

Peter Phillips has written an important book. For those of us interested in understanding elite control of the world, this book is a vital addition to the bookshelf. And like any good book, as you will see from my comments both above and below, it raised more questions for me even while it answered many.

As I read Phillips' insightful and candid account of elite behavior in this regard, I am reminded, yet again, that the global power elite is extraordinarily violent and utterly insane: content to kill people in vast numbers (whether through starvation or military violence) and destroy the biosphere for profit, with zero sense of humanity's now limited future. See 'The Global Elite is Insane Revisited' and 'Human Extinction by 2026? A Last Ditch Strategy to Fight for Human Survival' with more detailed explanations for the violence and insanity here: 'Why Violence?' and 'Fearless Psychology and Fearful Psychology: Principles and Practice' .

For this reason I do not share his faith in moral appeals to the elite, as articulated in the letter in his postscript. It is fine to make the appeal but history offers no evidence to suggest that there will be any significant response. The death and destruction inflicted by elites is highly profitable, centuries-old and ongoing. It will take powerful, strategically-focused nonviolent campaigns (or societal collapse) to compel the necessary changes in elite behavior. Hence, I fully endorse his call for nonviolent social movements to compel elite action where we cannot make the necessary changes without their involvement. See 'A Nonviolent Strategy to End Violence and Avert Human Extinction' and Nonviolent Campaign Strategy .

I would also encourage independent action, in one or more of several ways, by those individuals and communities powerful enough to do so. This includes nurturing more powerful individuals by making 'My Promise to Children' , participating in 'The Flame Tree Project to Save Life on Earth' and signing the online pledge of 'The People's Charter to Create a Nonviolent World' .

Fundamentally, Giants: The Global Power Elite is a call to action. Professor Peter Phillips is highly aware of our predicament – politically, socially, economically, environmentally and climatically – and the critical role played by the global power elite in generating that predicament.

If we cannot persuade the global power elite to respond sensibly to that predicament, or nonviolently compel it to do so, humanity's time on Earth is indeed limited.

*

Robert J. Burrowes has a lifetime commitment to understanding and ending human violence. He has done extensive research since 1966 in an effort to understand why human beings are violent and has been a nonviolent activist since 1981. He is the author of 'Why Violence?' His email address is flametree@riseup.net and his website is here . He is a frequent contributor to Global Research.

[Aug 28, 2018] South Africa is cursed with neo-liberal trickle-down baloney stifling radical economic change by Kevin Humphrey

Notable quotes:
"... There is consensus between commentators who have studied the effects of neo-liberalism that it has become all pervasive and is the key to ensuring that the rich remain rich, while the poor and the merely well to do continue on a perpetual hamster's wheel, going nowhere and never improving their lot in life while they serve their masters. ..."
"... Monbiot says of this largely anonymous scourge: "Attempts to limit competition are treated as inimical to liberty. Tax and regulations should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous, a reward for utility and a genera-tor of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve." ..."
"... Senior cadres co-opted Unfortunately, history shows that some key senior cadres of the ANC were all too keen to be coopted into the neo-liberal fold and any attempts to put forward radical measures that would bring something fresh to the table to address the massive inequalities of the past were and continue to be kept off the table and we are still endlessly fed the neo-liberal trickle-down baloney. ..."
medium.com

SA is cursed with neo-liberal trickle-down baloney stifling radical economic change Kevin Humphrey, The New Age, Johannesburg, 1 December 2016

South Africa's massive inequalities are abundantly obvious to even the most casual observer. When the ANC won the elections in 1994, it came armed with a left-wing pedigree second to none, having fought a protracted liberation war in alliance with progressive forces which drew in organised labour and civic groupings.

At the dawn of democracy the tight knit tripartite alliance also carried in its wake a patchwork of disparate groupings who, while clearly supportive of efforts to rid the country of apartheid, could best be described as liberal. It was these groupings that first began the clamour of opposition to all left-wing, radical or revolutionary ideas that has by now become the constant backdrop to all conversations about the state of our country, the economy, the education system, the health services, everything. Thus was the new South Africa introduced to its own version of a curse that had befallen all countries that gained independence from oppressors, neo-colonialism.

By the time South Africa was liberated, neo-colonialism, which as always sought to buy off the libera-tors with the political kingdom while keep-ing control of the economic kingdom, had perfected itself into what has become an era where neo-liberalism reigns supreme. But what exactly is neo-liberalism? George Monbiot says: "Neo-liberalism sees competi-tion as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that 'the market' delivers benefits that could never be achieved by planning."

Never improving

There is consensus between commentators who have studied the effects of neo-liberalism that it has become all pervasive and is the key to ensuring that the rich remain rich, while the poor and the merely well to do continue on a perpetual hamster's wheel, going nowhere and never improving their lot in life while they serve their masters.

Monbiot says of this largely anonymous scourge: "Attempts to limit competition are treated as inimical to liberty. Tax and regulations should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous, a reward for utility and a genera-tor of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve."

Nelson Mandela

South Africa's sad slide into neo-liberalism was given impetus at Davos in 1992 where Nelson Mandela had this to say to the assembled super rich: "We visualise a mixed economy, in which the private sector would play a central and critical role to ensure the creation of wealth and jobs. Future economic policy will also have to address such questions as security of investments and the right to repatriate earnings, realistic exchange rates, the rate of inflation and the fiscus."

Further insight into this pivotal moment was provided by Anthony Sampson, Mandela's official biographer who wrote: "It was not until February 1992, when Mandela went to the World Economic Forum in Davos, Switzerland, that he finally turned against nationalisation. He was lionised by the world's bankers and industrialists at lunches and dinners."

This is not to cast any aspersions on Mandela, he had to make these decisions at the time to protect our democratic transition. But these utterances should have been accom-panied by a behind the scenes interrogation of all the ANC's thoughts on how to proceed in terms of the economy delivering socialist orientated solutions without falling into the minefield of neo-liberal traps that lay in wait for our emerging country.

Senior cadres co-opted Unfortunately, history shows that some key senior cadres of the ANC were all too keen to be coopted into the neo-liberal fold and any attempts to put forward radical measures that would bring something fresh to the table to address the massive inequalities of the past were and continue to be kept off the table and we are still endlessly fed the neo-liberal trickle-down baloney.

Now no one dares to express any type of radical approach to our economic woes unless it is some loony populist. Debate around these important issues is largely missing and the level of commentary on all important national questions is shockingly shallow.

Anti-labour, anti-socialist, anti-poor, anti-black The status quo as set by the largely white-owned media revolves around key neo-liberal slogans mas-querading as commentary that is anti-labour, anti-socialist and anti-poor, which sadly translates within our own context as anti-black and therefore repugnantly racist.

We live in a country where the black, over-whelmingly poor majority of our citizens have voted for a much revered liberation movement that is constantly under attack from within and without by people who do not have their best interests at heart and are brilliant at manipulating outcomes to suit themselves on a global scale.

Kevin Humphrey is associate executive editor of The New Age

[Aug 27, 2018] The brutal neoliberal experiment has ended for the boiled frog Greece - what we should be expecting next

This is Ukrainian future, unless the government neoliberal policies change...
Notable quotes:
"... The fact that Brussels euroclowns celebrated in triumph the exit of Greece from the memorandum agreement, should be taken only as a huge farce. ..."
"... Greece entered the bailout program with national debt at 120% of GDP. Now, the debt remains close to 180% of GDP! Unemployment remains at record levels. Public property has been sold-off for pennies to foreign 'investors'. Labor rights almost vanished, the situation resembles the Middle Ages. Social state and benefits severely damaged. This is the Troika 'success story'. ..."
"... This contradiction could be explained by the fact that the neoliberal regime apparatus wants to send a warning sign to Tsipras administration not to take any action without permission. It is more than certain that the tight scrutiny will be continued and Tsipras must prove to the Western neocolonialists that he will not even think to implement any anti-austerity policies. ..."
"... Without a bailout program, Greece will be left alone now to swim with the bloodthirsty sharks of the global financial mafia in the wild sea of the supposedly 'free markets'. ..."
"... Either way, the debt colony will deliver to the predators every single asset that has been left untouched. ..."
Aug 27, 2018 | failedevolution.blogspot.com

The fact that Brussels euroclowns celebrated in triumph the exit of Greece from the memorandum agreement, should be taken only as a huge farce.

The Troika (ECB, European Commission, IMF) bailout program has officially ended and the result is a scenery of disaster. If you still believe that this program has been implemented to save the Greek economy and not the Franco-German banks , take a look at the situation today.

Greece entered the bailout program with national debt at 120% of GDP. Now, the debt remains close to 180% of GDP! Unemployment remains at record levels. Public property has been sold-off for pennies to foreign 'investors'. Labor rights almost vanished, the situation resembles the Middle Ages. Social state and benefits severely damaged. This is the Troika 'success story'.

So, in reality, the experiment was indeed successful for the goals of the international capitalist predators who transformed the country into a debt colony. For more than eight years, they boiled the frog slowly with the help of Troika, and now it's impossible to escape from the hot water.

While the clowns in Brussels had to present a 'success story' to cover their huge failure and slow down the centrifugal forces against eurozone's existence and unity, the mainstream media didn't exactly celebrate. Most of the headlines were quite moderate and even alarming for the future of the Greek economy.

This contradiction could be explained by the fact that the neoliberal regime apparatus wants to send a warning sign to Tsipras administration not to take any action without permission. It is more than certain that the tight scrutiny will be continued and Tsipras must prove to the Western neocolonialists that he will not even think to implement any anti-austerity policies.

It is worth to mention that most of the neutral/pessimistic headlines came from the Anglo-American mainstream media. This could be also considered another indication about the level of deterioration in the relations between the Anglo-American axis and the Brussels-Berlin axis, inside the Western camp.

Without a bailout program, Greece will be left alone now to swim with the bloodthirsty sharks of the global financial mafia in the wild sea of the supposedly 'free markets'. The fear of the Greek government in front of such a perspective became quite evident when Greece 'decided' to expel two Russian diplomats in order to take a small gift by Standard and Poor's .

Greece will have to give much more to the Western neoliberal predators. Otherwise, the rating agencies will be ordered to attack again and force the ruined Greek economy into another round of disastrous bailouts.

Either way, the debt colony will deliver to the predators every single asset that has been left untouched.

[Aug 26, 2018] "Creating Wealth" through debt- the West's Finance-Capitalist road by Michael Hudson

Notable quotes:
"... This financial dynamic has hijacked industrial capitalism. It is leading economies to polarize and ultimately collapse under the weight of their debt burden. That is the inherent dynamic of finance capitalism. The debt overhead leads to a financial crisis that becomes an opportunity to impose emergency rule to replace democratic lawmaking. So contrary to Hayek's anti-government "free enterprise" warnings, "slippery slope" to totalitarianism is not by socialist reforms limiting the rentier class's extraction of economic rent and interest, but just the opposite: the failure of society to check the rentier extraction of income vesting a hereditary autocracy whose financial and rent-seeking business plan impoverishes the economy at large. ..."
May 05, 2018 | www.newcoldwar.org

Originally appeared in Counterpunch

Text of Michael Hudson's speech on debt and the world economy, presented at Peking University's School of Marxist Studies, May 5-6, 2018.


Volumes II and III of Marx's Capital describe how debt grows exponentially, burdening the economy with carrying charges. This overhead is subjecting today's Western finance-capitalist economies to austerity, shrinking living standards and capital investment while increasing their cost of living and doing business. That is the main reason why they are losing their export markets and becoming de-industrialized.

What policies are best suited for China to avoid this neo-rentier disease while raising living standards in a fair and efficient low-cost economy? The most pressing policy challenge is to keep down the cost of housing. Rising housing prices mean larger and larger debts extracting interest out of the economy. The strongest way to prevent this is to tax away the rise in land prices, collecting the rental value for the government instead of letting it be pledged to the banks as mortgage interest.

The same logic applies to public collection of natural resource and monopoly rents. Failure to tax them away will enable banks to create debt against these rents, building financial and other rentier charges into the pricing of basic needs.

U.S. and European business schools are part of the problem, not part of the solution. They teach the tactics of asset stripping and how to replace industrial engineering with financial engineering, as if financialization creates wealth faster than the debt burden. Having rapidly pulled ahead over the past three decades, China must remain free of rentier ideology that imagines wealth to be created by debt-leveraged inflation of real-estate and financial asset prices.

Western capitalism has not turned out the way that Marx expected. He was optimistic in forecasting that industrial capitalists would gain control of government to free economies from unnecessary costs of production in the form of rent and interest that increase the cost of living (and hence, the break-even wage level). Along with most other economists of his day, he expected rentier income and the ownership of land, natural resources and banking to be taken out of the hands of the hereditary aristocracies that had held them since Europe's feudal epoch. Socialism was seen as the logical extension of classical political economy, whose main policy was to abolish rent paid to landlords and interest paid to banks and bondholders.

A century ago there was an almost universal belief in mixed economies. Governments were expected to tax away land rent and natural resource rent, regulate monopolies to bring prices in line with actual cost value, and create basic infrastructure with money created by their own treasury or central bank. Socializing land rent was the core of Physiocracy and the economics of Adam Smith, whose logic was refined by Alfred Marshall, Simon Patten and other bourgeois economists of the late 19th century. That was the path that European and American capitalism seemed to be following in the decades leading up to World War I. That logic sought to use the government to support industry instead of the landlord and financial classes.

China is progressing along this "mixed economy" road to socialism, but Western economies are suffering from a resurgence of the pre-capitalist rentier classes. Their slogan of "small government" means a shift in planning to finance, real estate and monopolies. This economic philosophy is reversing the logic of industrial capitalism, replacing public investment and subsidy with privatization and rent extraction. The Western economies' tax shift favoring finance and real estate is a case in point. It reverses John Stuart Mill's "Ricardian socialism" based on public collection of the land's rental value and the "unearned increment" of rising land prices.

Defining economic rent as the unnecessary margin of prices over intrinsic cost value, classical economists through Marx described rentiers as being economically parasitic, not productive. Rentiers do not "earn" their land rent, interest or monopoly rent, because it has no basis in real cost-value (ultimately reducible to labor costs). The political, fiscal and regulatory reforms that followed from this value and rent theory were an important factor leading to Marx's value theory and historical materialism. The political thrust of this theory explains why it is no longer being taught.

By the late 19th century the rentiers fought back, sponsoring reaction against the socialist implications of classical value and rent theory. In America, John Bates Clark denied that economic rent was unearned. He redefined it as payment for the landlords' labor and enterprise, not as accruing "in their sleep," as J. S. Mill had characterized it. Interest was depicted as payment for the "service" of lending productively, not as exploitation. Everyone's income and wealth was held to represent payment for their contribution to production. The thrust of this approach was epitomized by Milton Friedman's Chicago School claim that "there is no such thing as a free lunch" – in contrast to classical economics saying that feudalism's legacy of privatized land ownership, bank credit and monopolies was all about how to get a free lunch, by exploitation.

The other major reaction against classical and Marxist theory was English and Austrian "utility" theory. Focusing on consumer psychology instead of production costs, it claimed that there is no difference between value and price. A price is whatever consumers "choose" to pay for commodities, based on the "utility" that these provide – defined by circular reasoning as being equal to the price they pay. Producers are assumed to invest and produce goods to "satisfy consumer demand," as if consumers are the driving force of economies, not capitalists, property owners or financial managers.

Using junk-psychology, interest was portrayed as what bankers or bondholders "abstain" from consuming, lending their self-denial of spending to "impatient" consumers and "credit-worthy" entrepreneurs. This view opposed the idea of interest as a predatory charge levied by hereditary wealth and the privatized monopoly right to create bank credit. Marx quipped that in this view, the Rothschilds must be Europe's most self-depriving and abstaining family, not as suffering from wealth-addiction.

These theories that all income is earned and that consumers (the bourgeois term for wage-earners) instead of capitalists determine economic policy were a reaction against the classical value and rent theory that paved the way for Marx's analysis. After analyzing industrial business cycles in terms of under-consumption or over-production in Volume I of Capital, Volume III dealt with the precapitalist financial problem inherited from feudalism and the earlier "ancient" mode of production: the tendency of an economy's debts to grow by the "purely mathematical law" of compound interest.

Any rate of interest may be thought of as a doubling time. What doubles is not real growth, but the parasitic financial burden on this growth. The more the debt burden grows, the less income is left for spending on goods and services. More than any of his contemporaries, Marx emphasized the tendency for debt to grow exponentially, at compound interest, extracting more and more income from the economy at large as debts double and redouble, beyond the ability of debtors to pay. This slows investment in new means of production, because it shrinks domestic markets for output.

Marx explained that the credit system is external to the means of production. It existed in ancient times, feudal Europe, and has survived industrial capitalism to exist even in socialist economies. At issue in all these economic systems is how to prevent the growth of debt and its interest charge from shrinking economies. Marx believed that the natural thrust of industrial capitalism was to replace private banking and money creation with public money and credit. He distinguished interest-bearing debt under industrial capitalism as, for the first time, a means of financing capital investment. It thus was potentially productive by funding capital to produce a profit that was sufficient to pay off the debt.

Industrial banking was expected to finance industrial capital formation, as was occurring in Germany in Marx's day. Marx's examples of industrial balance sheets accordingly assumed debt. In contrast to Ricardo's analysis of capitalism's Armageddon resulting from rising land-rent, Marx expected capitalism to free itself from political dominance by the landlord class, as well as from the precapitalist legacy of usury.

This kind of classical free market viewed capitalism's historical role as being to free the economy from the overhead of unproductive "usury" debt, along with the problem of absentee landownership and private ownership of monopolies – what Lenin called the economy's "commanding heights" in the form of basic infrastructure. Governments would make industries competitive by providing basic needs freely or at least at much lower public prices than privatized economies could match.

This reform program of industrial capitalism was beginning to occur in Germany and the United States, but Marx recognized that such evolution would not be smooth and automatic. Managing economies in the interest of the wage earners who formed the majority of the population would require revolution where reactionary interests fought to prevent society from going beyond the "bourgeois socialism" that stopped short of nationalizing the land, monopolies and banking.

World War I untracked even this path of "bourgeois socialism." Rentier forces fought to prevent reform, and banks focused on lending against collateral already in place, not on financing new means of production. The result of this return to pre-industrial bank credit is that some 80 percent of bank lending in the United States and Britain now takes the form of real estate mortgages. The effect is to turn the land's rental yield into interest.

That rent-into-interest transformation gives bankers a strong motive to oppose taxing land rent, knowing that they will end up with whatever the tax collector relinquishes. Most of the remaining bank lending is concentrated in loans for corporate takeovers, mergers and acquisitions, and consumer loans. Corporate capital investment in today's West is not financed by bank credit, but almost entirely out of retained corporate earnings, and secondarily out of stock issues.

The stock market itself has become extractive. Corporate earnings are used for stock buybacks and higher dividend payouts, not for new tangible investment. This financial strategy was made explicit by Harvard Business School Professor Michael Jensen, who advocated that salaries and bonuses for corporate managers should be based on how much they can increase the price of their companies' stock, not on how much they increased or production and/or business size. Some 92 percent of corporate profits in recent years have been spent on stock buyback programs and dividend payouts. That leaves only about 8 percent available to be re-invested in new means of production and hiring. Corporate America's financial managers are turning financialized companies into debt-ridden corporate shells.

A major advantage of a government as chief banker and credit creator is that when debts come to outstrip the means to pay, the government can write down the debt. That is how China's banks have operated. It is a prerequisite for saving companies from bankruptcy and preventing their ownership from being transferred to foreigners, raiders or vultures.

Classical tax and banking policies were expected to streamline industrial economies, lowering their cost structures as governments replaced landlords as owner of the land and natural resources (as in China today) and creating their own money and credit. But despite Marx's understanding that this would have been the most logical way for industrial capitalism to evolve, finance capitalism has failed to fund capital formation. Finance capitalism has hijacked industrial capitalism, and neoliberalism is its anti-classical ideology.

The result of today's alliance of the Finance, Insurance and Real Estate (FIRE) sector with natural resource and infrastructure monopolies has been to reverse that the 20th century's reforms promoting progressive taxation of wealth and income. Industrial capitalism in the West has been detoured along the road to rent-extracting privatization, austerity and debt serfdom.

The result is a double-crisis: austerity stemming from debt deflation, while public health, communications, information technology, transportation and other basic infrastructure are privatized by corporate monopolies that raise prices charged to labor and industry. The debt crisis spans government debt (state and local as well as national), corporate debt, real estate mortgage debt and personal debt, causing austerity that shrinks the "real" economy as its assets and income are stripped away to service the exponentially growing debt overhead. The economy polarizes as income and wealth ownership are shifted to the neo-rentier alliance headed by the financial sector.

This veritable counter-revolution has inverted the classical concept of free markets. Instead of advocating a public role to lower the cost structure of business and labor, the neoliberal ideal excludes public infrastructure and government ownership of natural monopolies, not to speak of industrial production. Led by bank lobbyists, neoliberalism even opposes public regulation of finance and monopolies to keep their prices in line with socially necessary cost of production.

To defend this economic counter-revolution, the National Income and Product Accounts (NIPA) and Gross Domestic Product (GDP) measures now used throughout the world were inspired by opposition to progressive taxation and public ownership of land and banks. These statistical measures depicting finance, insurance and real estate as the leaders of wealth creation, not the creators merely of debt and rentier overhead.

What is China's "Real" GDP and "real wealth creation"?

Rejection of classical value theory's focus on economic rent – the excess of market price over intrinsic labor cost – underlies the post-classical concept of GDP. Classical rent theory warned against the FIRE sector siphoning off nominal growth in wealth and income. The economics of Adam Smith, David Ricardo, J.S. Mill and Marx share in common the view that this rentier revenue should be treated as an overhead charge and, as such, subtracted from national income and product because it is not production-related. Being extraneous to the production process, this rentier overhead is responsible for today's debt deflation and economically extractive privatization that is imposing austerity and shrinking markets from North America to Europe.

The West's debt crisis is aggravated by privatizing monopolies (on credit) that historically have belonged to the public sector. Instead of recognizing the virtues of a mixed economy, Frederick Hayek and his followers from Ayn Rand to Margaret Thatcher, Ronald Reagan, the Chicago School and libertarian Republicans have claimed that any public ownership or regulation is, ipso facto, a step toward totalitarian politics.

Following this ideology, Alan Greenspan aborted economic regulation and decriminalized financial fraud. He believed that in principle, the massive bank fraud, junk-mortgage lending and corporate raiding that led up to the 2008 crisis was more efficient than regulating such activities or prosecuting fraudsters.

This is the neoliberal ideology taught in U.S. and European business schools. It assumes that whatever increases financial wealth most quickly is the most efficient for society as a whole. It also assumes that bankers will find honest dealing to be more in their economic self-interest than fraud, because customers would shun fraudulent bankers. But along with the mathematics of compound interest, the inherent dynamic of finance capitalism is to establish a monopoly and capture government regulatory agencies, the justice system, central bank and Treasury to prevent any alternative policy and the prosecution of fraud.

The aim is to get rich by purely financial means – by increasing stock-market prices, not by tangible capital formation. That is the opposite of the industrial logic of expanding the economy and its markets. Instead of creating a more productive economy and raising living standards, finance capitalism is imposing austerity by diverting wage income and also corporate income to pay rising debt service, health insurance and payments to privatized monopolies. Progressive income and wealth taxation has been reversed, siphoning off wages to subsidize privatization by the rentier class.

This combination of debt overgrowth and regressive fiscal policy has produced two results. First, combining debt deflation with fiscal deflation leaves only about a third of wage income available to be spent on the products of labor. Paying interest, rents and taxes – and monopoly prices – shrinks the domestic market for goods and services.

Second, adding debt service, monopoly prices and a tax shift to the cost of living and doing business renders neo-rentier economies high-cost. That is why the U.S. economy has been deindustrialized and its Midwest turned into a Rust Belt.

How Marx's economic schema explains the West's neo-rentier problem

In Volume I of Capital, Marx described the dynamics and "law of motion" of industrial capitalism and its periodic crises. The basic internal contradiction that capitalism has to solve is the inability of wage earners to be paid enough to buy the commodities they produce. This has been called overproduction or underconsumption, but Marx believed that the problem was in principle only temporary, not permanent.

Volumes II and III of Marx's Capital described a pre-capitalist form of crisis, independent of the industrial economy: Debt grows exponentially, burdening the economy and finally bringing its expansion to an end with a financial crash. That descent into bankruptcy, foreclosure and the transfer of property from debtors to creditors is the dynamic of Western finance capitalism. Subjecting economies to austerity, economic shrinkage, emigration, shorter life spans and hence depopulation, it is at the root of the 2008 debt legacy and the fate of the Baltic states, Ireland, Greece and the rest of southern Europe, as it was earlier the financial dynamic of Third World countries in the 1960s through 1990s under IMF austerity programs. When public policy is turned over to creditors, they use their power for is asset stripping, insisting that all debts must be paid without regard for how this destroys the economy at large.

China has managed to avoid this dynamic. But to the extent that it sends its students to study in U.S. and European business schools, they are taught the tactics of asset stripping instead of capital formation – how to be extractive, not productive. They are taught that privatization is more desirable than public ownership, and that financialization creates wealth faster than it creates a debt burden. The product of such education therefore is not knowledge but ignorance and a distortion of good policy analysis. Baltic austerity is applauded as the "Baltic Miracle," not as demographic collapse and economic shrinkage.

The experience of post-Soviet economies when neoliberals were given a free hand after 1991 provides an object lesson. Much the same fate has befallen Greece, along with the rising indebtedness of other economies to foreign bondholders and to their own rentier class operating out of capital-flight centers. Economies are obliged to suspend democratic government policy in favor of emergency creditor control.

The slow economic crash and debt deflation of these economies is depicted as a result of "market choice." It turns out to be a "choice" for economic stagnation. All this is rationalized by the economic theory taught in Western economics departments and business schools. Such education is an indoctrination in stupidity – the kind of tunnel vision that Thorstein Veblen called the "trained incapacity" to understand how economies really work.

Most private fortunes in the West have stemmed from housing and other real estate financed by debt. Until the 2008 crisis the magnitude of this property wealth was expanded largely by asset-price inflation, aggravated by the reluctance of governments to do what Adams Smith, John Stuart Mill, Alfred Marshall and nearly all 19th-century classical economists recommended: to keep land rent out of private hands, and to make the rise in land's rental value serve as the tax base.

Failure to tax the land leaves its rental value "free" to be pledged as interest to banks – which make larger and larger loans by lending against rising debt ratios. This "easy credit" raises the price of obtaining home ownership. Sellers celebrate the result as "wealth creation," and the mainstream media depict the middle class as growing richer by higher prices for the homes its members have bought. But the debt-financed rise in housing prices ultimately creates wealth mainly for banks and their bondholders.

Americans now have to pay up to 43 percent of their income for mortgage debt service, federally guaranteed. This imposes such high costs for home ownership that it is pricing the products of U.S. labor out of world markets. The pretense is that using bank credit (that is, homebuyers' mortgage debt) to inflate the price of housing makes U.S. workers and the middle class prosperous by enabling them to sell their homes to a new generation of buyers at higher and higher prices each generation. This certainly does not make the buyers more prosperous. It diverts their income away from buying the products of labor to pay interest to banks for housing prices inflated on bank credit.

Consumer spending throughout most of the world aims above all at achieving status. In the West this status rests largely on one's home and neighborhood, its schools, transportation and other public investment. Land-price gains resulting from public investment in transportation, parks and schools, other urban amenities and infrastructure, and from re-zoning land use. In the West this rising rental value is turned into a cost, falling on homebuyers, who must borrow more from the banks. The result is that public spending ultimately enriches the banks – at the tax collector's expense.

Debt is the great threat to modern China's development. Burdening economies with a rentier overhead imposes the quasi-feudal charges from which classical 19th-century economists hoped to free industrial capitalism. The best protection against this rentier burden is simple: first, tax away the land's rising rental valuation to prevent it from being paid out for bank loans; and second, keep control of banks in public hands. Credit is necessary, but should be directed productively and debts written down when paying them threatens to create financial Armageddon.

Marx's views on the broad dynamics of economic history

Plato and Aristotle described a grand pattern of history. In their minds, this pattern was eternally recurrent. Looking over three centuries of Greek experience, Aristotle found a perpetual triangular sequence of democracy turning into oligarchy, whose members made themselves into a hereditary aristocracy – and then some families sought to take the demos into their own camp by sponsoring democracy, which in turn led to wealthy families replacing it with an oligarchy, and so on.

The medieval Islamic philosopher Ibn Khaldun saw history as a rise and fall. Societies rose to prosperity and power when leaders mobilized the ethic of mutual aid to gain broad support as a communal spirit raised all members. But prosperity tended to breed selfishness, especially in ruling dynasties, which Ibn Khaldun thought had a life cycle of only about 120 years. By the 19th century, Scottish Enlightenment philosophers elaborated this rise-and-fall theory, applying it to regimes whose success bred arrogance and oligarchy.

Marx saw the long sweep of history as following a steady upward secular trend, from the ancient slavery-and-usury mode of production through feudalism to industrial capitalism. And not only Marx but nearly all 19th-century classical economists assumed that socialism in one form or another would be the stage following industrial capitalism in this upward technological and economic trajectory.

Instead, Western industrial capitalism turned into finance capitalism. In Aristotelian terms the shift was from proto-democracy to oligarchy. Instead of freeing industrial capitalism from landlords, natural resource owners and monopolists, Western banks and bondholders joined forces with them, seeing them as major customers for as much interest-bearing credit as would absorb the economic rent that governments would refrain from taxing. Their success has enabled banks and bondholders to replace landlords as the major rentier class. Antithetical to socialism, this retrogression towards feudal rentier privilege let real estate, financial interests and monopolists exploit the economy by creating an expanding debt wedge.

Marx's Theories of Surplus Value (German Mehrwert), his history of classical political economy, poked fun at David Ricardo's warning of economic Armageddon if economies let landlords siphon off of all industrial profits to pay land rent. Profits and hence capital investment would grind to a halt. But as matters have turned out, Ricardo's rentier Armageddon is being created by his own banking class. Corporate profits are being devoured by interest payments for corporate takeover debts and related financial charges to reward bondholders and raiders, and by financial engineering using stock buybacks and higher dividend payouts to create "capital" gains at the expense of tangible capital formation. Profits also are reduced by firms having to pay higher wages to cover the cost of debt-financed housing, education and other basic expenses for workers.

This financial dynamic has hijacked industrial capitalism. It is leading economies to polarize and ultimately collapse under the weight of their debt burden. That is the inherent dynamic of finance capitalism. The debt overhead leads to a financial crisis that becomes an opportunity to impose emergency rule to replace democratic lawmaking. So contrary to Hayek's anti-government "free enterprise" warnings, "slippery slope" to totalitarianism is not by socialist reforms limiting the rentier class's extraction of economic rent and interest, but just the opposite: the failure of society to check the rentier extraction of income vesting a hereditary autocracy whose financial and rent-seeking business plan impoverishes the economy at large.

Greece's debt crisis has all but abolished its democracy as foreign creditors have taken control, superseding the authority of elected officials. From New York City's bankruptcy to Puerto Rico's insolvency and Third World debtors subjected to IMF "austerity programs," national bankruptcies shift control to centralized financial planners in what Naomi Klein has called Crisis Capitalism. Planning ends up centralized not in the hands of elected government but in financial centers, which become the de facto government.

England and America set their economic path on this road under Margaret Thatcher and Ronald Reagan by 1980. They were followed by even more pro-financial privatization leaders in Tony Blair's New Labour Party and Bill Clinton's New Democrats seeking to roll back a century of classical reforms and policies that gradually were moving capitalism toward socialism. Instead, these countries are suffering a rollback to neofeudalism, whose neo-rentiereconomic and political ideology has become mainstream throughout the West. Despite seeing that this policy has led to North America and Europe losing their former economic lead, the financial power elite is simply taking its money and running.

So we are brought back to the question of what this means for China's educational policy and also how it depicts economic statistics to distinguish between wealth and overhead. The great advantage of such a distinction is to help steer economic growth along productive lines favoring tangible capital formation instead of policies to get rich by taking on more and more debt and by prying property away from the public domain.

If China's main social objective is to increase real output to raise living standards for its population – while minimizing unproductive overhead and economic inequality – then it is time to consider developing its own accounting format to trace its progress (or shortcomings) along these lines. Measuring how its income and wealth are being obtained would track how the economy is moving closer toward what Marx called socialism.

Of special importance, such an accounting format would revive Marx's classical distinction between earned and unearned income. Its statistics would show how much of the rise in wealth (and expenditure) in China – or any other nation – is a result of new tangible capital formation as compared to higher rents, lending and interest, or the stock market.

These statistics would isolate income and fortunes obtained by zero-sum transfer payments such as the rising rental value of land sites, natural resources and basic infrastructure monopolies. National accounts also would trace overhead charges for interest and related financial charges, as well as the economy's evolving credit and debt structure. That would enable China to measure the economic effects of the banking privileges and other property rights given to some people.

That is not the aim of Western national income statistics. In fact, applying the accounting structure described above would track how Western economies are polarizing as a result of their higher economic rent and interest payments crowding out spending on actual goods and services. This kind of contrast would help explain global trends in pricing and competitiveness. Distinguishing the FIRE sector from the rest of the economy would enable China to compare its economic cost trends and overhead relative to those of other nations. I believe that these statistics would show that its progress toward socialism also will explain the remarkable economic advantage it has obtained. If China does indeed make this change, it will help people both in and out of China see even more clearly what your government is doing on behalf of the majority of its people. This may help other governments – including my own – learn from your example and praise it instead of fearing it.

[Aug 23, 2018] The Greece Bailout s Legacy of Immiseration by James K. Galbraith

Aug 20, 2018 | www.defenddemocracy.press

The Greece Bailout's Legacy of Immiseration | by James K. Galbraith 22/08/2018

Note from the author : As friends have quickly pointed out, the situation is even worse than described here. Quarterly reviews by the troika will continue. The German Bundestag will still vote on any debt deferrals, and -- as I do stress -- the crushing austerity will continue indefinitely. A nightmare.

2010 to 2018 will go down in Greek history as an epic period of colonization; of asset stripping and privatization; of unfunded health and education; of bankruptcies, foreclosures, homelessness, and impoverishment; of unemployment, emigration, and suicide. These were the years of the three memoranda, or "financial-assistance programs" accompanied by "structural reforms," enacted supposedly to promote Greek "recovery" from the slump and credit crunch of 2010. They were, in fact, a fraud perpetrated on Greece and Europe, a jumble of bad policies based on crude morality tales that catered to right-wing politics to cover up unpayable debts.

This was a bailout? The word reeks of indulgence and implied disapproval. As it was often said, "The Greeks had their party and now they must pay." Yes, there was a party -- for oligarchs with ships and London homes and Swiss bank accounts, for the military, for engineering and construction and armaments companies from Germany and France and the United States. And yes, there was a bailout. It came from Europe's taxpayers, and went to the troubled banks of France and Germany. Greece was merely the pass-through, and the Greeks who paid dearly with their livelihoods were just the patsies in the deal. The third "memorandum of understanding" expires today.

With Greece's completion of a three-year, 61.9-billion-euro eurozone emergency-loan package, it can once again borrow at market rates. The expiration of the memorandum also ends, for now, the direct control by Europe's "troika" -- the International Monetary Fund, the European Commission, and the European Central Bank -- over the Greek government. But its conditions, constraints, and consequences will endure. Read also: Conference of the modern Left in Iceland: learning from each other

Back in 2010, Greece, along with Portugal, Spain, Ireland, and Italy, was definitely in trouble. The Great Financial Crisis crashed into all of Europe, but it hit the weaker countries hardest -- and Greece was the weakest of them all. Its economy shrunk by a quarter, and youth unemployment rose to roughly 50 percent. The memorandum was, for all concerned, the easy way out. It started a game of "extend and pretend" on the Greek debt, based on optimistic forecasts and on policies of reform that had no basis in the reality of Greek economic conditions.

The policies came from the IMF -- its standard repertory of austerity and "reform." But its staff and directors knew from the beginning that these measures would not suffice. IMF executive directors from Australia, Switzerland, Brazil, and China voiced objections. Channels were therefore bypassed, objections ignored. The Fund was nearly out of work and money because of the failures of its programs -- and the relative success of countries that ignored them -- all over the world. And its managing director at the time wished to be the next president of France. So Greece, which is to say its creditors -- especially French and German banks -- received the largest loan in IMF history (relative to its ownership share). And that 289-billion-euro loan came largely from U.S. taxpayers.

In Athens, teams of functionaries from the Fund, the European Central Bank, and the European Commission came to Greece, where they stayed in fancy hotels at Greek expense and were escorted by uniformed police from ministry to ministry to dictate policy in detail. (Such a nice gig, in a warm and sunny place, so close to the sea.) In 2015, they were lodged for a time in a four-star hotel, deprived of their convoys, and given protection by elite forces dressed in plain clothes. They didn't like that at all, and their bosses, Mario Draghi and Christine Lagarde, complained loudly on their behalf.

Read also: Berlin goes on with self-defeating policies. Now they encourage Scotland to secede!

And what of the policies? Public assets were to be dumped en masse at fire-sale prices, but only if they were already profitable. (Regional airports making losses, for example, stayed with the state.) Dutch dairies and German drug companies were taken care of. Labor markets were deregulated while collective bargaining was wiped out -- an unethical experiment on an untenable premise. Neither German nor Chinese industry was moving to Greece even if the Greeks worked for free. The value-added tax was raised, pensions were cut, and hundreds of thousands of civil servants were sacked. Ministries lost cleaning ladies, who set up camp, bless them, in front of the Ministry of Finance. The Greeks rebelled in 2015, as they were right to do. But the European Central Bank held the high card: It could shut the banks and confiscate deposits, forcing Greece out of the euro and perhaps out of the European Union. The government, undermined from within, capitulated. The third memorandum was signed, and Syriza, the left-wing coalition that had swept into power in January, by that July had become the model prisoner of the European elites.

The irony is that in 2012 Greece's debts were already postponed, so that from late 2015 to 2022 there would be a grace period with relatively few major payments due. Now there is a primary-budget surplus and the markets need not be tested. So the memorandum can end, but austerity will not; the debt still looms in the long term, so the commitment to surplus extends for more than 40 years. In any event, the Greeks' will to resistance appears to have been broken, so it seems safe enough to leave them alone. For now.

But the damage done extends far beyond Greece. The cynicism and brutality of what happened there is for everyone to see. The fact that Europe imposed a policy of privation on one of its weakest members -- not for its own sake, and not with any expectation of economic success, but to intimidate the Italians and the French, as the German Finance Minister Wolfgang Schäuble conceded to the Greek Finance Minister Yanis Varoufakis privately in 2015 -- was not lost on British voters who chose Brexit in 2016. The Greek debacle helped to turn the French left against Europe, and fueled the inchoate coalition now in power in Italy. The German and east European far right is surely not motivated by sympathy -- on the contrary, they despise the Greeks. But they do resent the supposed "solidarity" -- a fiction if ever there was one -- that Germany's Chancellor Angela Merkel and her allies invoked to sell their parliaments and voters on the idea of the Greek loans.

Read also: The IMF wants to appoint Prime Ministers. They want a Greek Macron in Athens

Europe is therefore rotting Hat both ends. Its economy must remain unified, but it is coming apart at its political seams. It needs institutions and policies of social stabilization, financial reform, and full employment -- a dramatic change in ideas and action at the continental level to thwart the rising tide of nationalist reaction. There is therefore a growing sense, among those who are watching closely, that a major democratic reform -- a New Deal for Europe -- is the only way to hold it together in the long run.

* James K. Galbraith is author of Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe . In 2015 he served as an informal assistant to the finance minister of Greece.

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[Aug 23, 2018] The War Piece to End All War Pieces Or How to Fight a War of Ultimate Repetitiousness by Tom Engelhardt

Notable quotes:
"... Here, for instance, is what I wrote about our Afghan War in 2008, almost seven years after it began, when the U.S. Air Force took out a bridal party, including the bride herself and at least 26 other women and children en route to an Afghan wedding. And that would be just one of eight U.S. wedding strikes I toted up by the end of 2013 in three countries, Afghanistan, Iraq, and Yemen, that killed almost 300 potential revelers. "We have become a nation of wedding crashers," I wrote, "the uninvited guests who arrived under false pretenses, tore up the place, offered nary an apology, and refused to go home." ..."
"... Thought of another way, the U.S. military is now heading into record territory in Afghanistan. In the mid-1970s, the rare American who had heard of that country knew it only as a stop on the hippie trail . If you had then told anyone here that, by 2018, the U.S. would have been at war there for 27 years ( 1979-1989 and 2001-2018), he or she would have laughed in your face. And yet here we are, approaching the mark for one of Europe's longest, most brutal struggles, the Thirty Years' War of the seventeenth century. Imagine that. ..."
"... raison d'être ..."
"... Afganistan is the graveyard of poor empires. It's the playground of the rich American empire, a place to test weapons, test men, gain battle experience, get promotions, and generally keep the military-industrial complex in top health. If it didn't exist, we'd have to invent it. ..."
"... As shown in this article there is a very interesting connection between growing wealth inequality in the United States and American wars: https://viableopposition.blogspot.com/2018/07/how-american-wars-lead-to-increased.html ..."
"... it's not a war; it's an occupation. More cops get killed/wounded in USA proper then military personnel in that "war". 2017, 46 U.S. police officers were killed by felons in the line of duty; 17 military personnel in Afghanistan. ..."
"... Yes , the US military industrial complex is rich and in top health as you say , but what I see is that the health of the US as a whole , physical and mental , is going down in the last 50 years . Maybe the metastasis of the " healthy " military cancer are killing the American host . ..."
Aug 16, 2018 | www.unz.com

Fair warning. Stop reading right now if you want, because I'm going to repeat myself. What choice do I have, since my subject is the Afghan War (America's second Afghan War, no less)? I began writing about that war in October 2001, almost 17 years ago, just after the U.S. invasion of Afghanistan. That was how I inadvertently launched the unnamed listserv that would, a year later, become TomDispatch . Given the website's continuing focus on America's forever wars (a phrase I first used in 2010 ), what choice have I had but to write about Afghanistan ever since?

So think of this as the war piece to end all war pieces. And let the repetition begin!

Here, for instance, is what I wrote about our Afghan War in 2008, almost seven years after it began, when the U.S. Air Force took out a bridal party, including the bride herself and at least 26 other women and children en route to an Afghan wedding. And that would be just one of eight U.S. wedding strikes I toted up by the end of 2013 in three countries, Afghanistan, Iraq, and Yemen, that killed almost 300 potential revelers. "We have become a nation of wedding crashers," I wrote, "the uninvited guests who arrived under false pretenses, tore up the place, offered nary an apology, and refused to go home."

Here's what I wrote about Afghanistan in 2009, while considering the metrics of "a war gone to hell": "While Americans argue feverishly and angrily over what kind of money, if any, to put into health care, or decaying infrastructure, or other key places of need, until recently just about no one in the mainstream raised a peep about the fact that, for nearly eight years (not to say much of the last three decades), we've been pouring billions of dollars, American military know-how, and American lives into a black hole in Afghanistan that is, at least in significant part, of our own creation."

Here's what I wrote in 2010, thinking about how "forever war" had entered the bloodstream of the twenty-first-century U.S. military (in a passage in which you'll notice a name that became more familiar in the Trump era): "And let's not leave out the Army's incessant planning for the distant future embodied in a recently published report, 'Operating Concept, 2016-2028,' overseen by Brigadier General H.R. McMaster, a senior adviser to Gen. David Petraeus. It opts to ditch 'Buck Rogers' visions of futuristic war, and instead to imagine counterinsurgency operations, grimly referred to as 'wars of exhaustion,' in one, two, many Afghanistans to the distant horizon."

Here's what I wrote in 2012, when Afghanistan had superseded Vietnam as the longest war in American history: "Washington has gotten itself into a situation on the Eurasian mainland so vexing and perplexing that Vietnam has finally been left in the dust. In fact, if you hadn't noticed -- and weirdly enough no one has -- that former war finally seems to have all but vanished."

Here's what I wrote in 2015, thinking about the American taxpayer dollars that had, in the preceding years, gone into Afghan "roads to nowhere, ghost soldiers, and a $43 million gas station" built in the middle of nowhere, rather than into this country: "Clearly, Washington had gone to war like a drunk on a bender, while the domestic infrastructure began to fray. At $109 billion by 2014, the American reconstruction program in Afghanistan was already, in today's dollars, larger than the Marshall Plan (which helped put all of devastated Western Europe back on its feet after World War II) and still the country was a shambles."

And here's what I wrote last year thinking about the nature of our never-ending war there: "Right now, Washington is whistling past the graveyard. In Afghanistan and Pakistan the question is no longer whether the U.S. is in command, but whether it can get out in time. If not, the Russians, the Chinese, the Iranians, the Indians, who exactly will ride to our rescue? Perhaps it would be more prudent to stop hanging out in graveyards. They are, after all, meant for burials, not resurrections."

And that's just to dip a toe into my writings on America's all-time most never-ending war.

What Happened After History Ended

... ... ...

In reality, when it comes to America's spreading wars , especially the one in Afghanistan, history didn't end at all. It just stumbled onto some graveyard version of a Möbius strip. In contrast to the past empires that found they ultimately couldn't defeat Afghanistan's insurgent tribal warriors, the U.S. has -- as Bush administration officials suspected at the time -- proven unique. Just not in the way they imagined.

Their dreams couldn't have been more ambitious. As they launched the invasion of Afghanistan, they were already looking past the triumph to come to Saddam Hussein's Iraq and the glories that would follow once his regime had been "decapitated," once U.S. forces, the most technologically advanced ever, were stationed for an eternity in the heart of the oil heartlands of the Greater Middle East. Not that anyone remembers anymore, but Dick Cheney, Donald Rumsfeld, Paul Wolfowitz, Douglas Feith, and the rest of that crew of geopolitical dreamers wanted it all.

What they got was no less unique in history: a great power at the seeming height of its strength and glory, with destructive capabilities beyond imagining and a military unmatched on the planet, unable to score a single decisive victory across an increasingly large swath of the planet or impose its will, however brutally, on seemingly far weaker, less well-armed opponents. They could not conquer, subdue, control, pacify, or win the hearts and minds or anything else of enemies who often fought their trillion-dollar foe using weaponry valued at the price of a pizza . Talk about bleeding wounds!

A War of Abysmal Repetition

Thought of another way, the U.S. military is now heading into record territory in Afghanistan. In the mid-1970s, the rare American who had heard of that country knew it only as a stop on the hippie trail . If you had then told anyone here that, by 2018, the U.S. would have been at war there for 27 years ( 1979-1989 and 2001-2018), he or she would have laughed in your face. And yet here we are, approaching the mark for one of Europe's longest, most brutal struggles, the Thirty Years' War of the seventeenth century. Imagine that.

... ... ...

Almost 17 years and, coincidentally enough, 17 U.S. commanders later, think of it as a war of abysmal repetition. Just about everything in the U.S. manual of military tactics has evidently been tried (including dropping "the mother of all bombs," the largest non-nuclear munition in that military's arsenal), often time and again, and nothing has even faintly done the trick -- to which the Pentagon's response is invariably a version of the classic misquoted movie line, "Play it again, Sam."

And yet, amid all that repetition, people are still dying ; Afghans and others are being uprooted and displaced across Asia, South Asia, the Middle East, and deep into Africa; wars and terror outfits are spreading. And here's a simple enough fact that's worth repeating: the endless, painfully ignored failure of the U.S. military (and civilian) effort in Afghanistan is where it all began and where it seems never to end.

A Victory for Whom?

Every now and then, there's the odd bit of news that reminds you we don't have to be in a world of repetition. Every now and then, you see something and wonder whether it might not represent a new development, one that possibly could lead out of (or far deeper into) the graveyard of empires.

As a start, though it's been easy to forget in these years, other countries are affected by the ongoing disaster of a war in Afghanistan. Think, for instance, of Pakistan (with a newly elected, somewhat Trumpian president who has been a critic of America's Afghan War and of U.S. drone strikes in his country), Iran, China, and Russia. So here's something I can't remember seeing in the news before: the military intelligence chiefs of those four countries all met recently in Islamabad, the Pakistani capital, officially to discuss the growth of Islamic State-branded insurgents in Afghanistan. But who knows what was really being discussed? And the same applies to the visit of Iran's armed forces chief of staff to Pakistan in July and the return visit of that country's chief of staff to Iran in early August. I can't tell you what's going on, only that these are not the typically repetitive stories of the last 17 years.

And hard as it might be to believe, even when it comes to U.S. policy, there's been the odd headline that might pass for new. Take the recent private, direct talks with the Taliban in Qatar's capital, Doha, initiated by the Trump administration and seemingly ongoing. They might -- or might not -- represent something new , as might President Trump himself, who, as far as anyone can tell, doesn't think that Afghanistan is " the right war ." He has, from time to time, even indicated that he might be in favor of ending the American role, of " getting the hell out of there," as he reportedly told Senator Rand Paul, and that's unique in itself (though he and his advisers seem to be raring to go when it comes to what could be the next Afghanistan: Iran ).

But should the man who would never want to be known as the president who lost the longest war in American history try to follow through on a withdrawal plan, he's likely to have a few problems on his hands. Above all, the Pentagon and the country's field commanders seem to be hooked on America's " infinite " wars. They exhibit not the slightest urge to stop them. The Afghan War and the others that have flowed from it represent both their raison d'être and their meal ticket. They represent the only thing the U.S. military knows how to do in this century. And one thing is guaranteed: if they don't agree with the president on a withdrawal strategy, they have the power and ability to make a man who would do anything to avoid marring his own image as a winnner look worse than you could possibly imagine. Despite that military's supposedly apolitical role in this country's affairs, its leaders are uniquely capable of blocking any attempt to end the Afghan War.

And with that in mind, almost 17 years later, don't think that victory is out of the question either. Every day that the U.S. military stays in Afghanistan is indeed a victory for well, not George W. Bush, or Barack Obama, and certainly not Donald Trump, but the now long-dead Osama bin Laden. The calculation couldn't be simpler. Thanks to his " precision" weaponry -- those 19 suicidal hijackers in commercial jets -- the nearly 17 years of wars he's sparked across much of the Muslim world cost a man from one of Saudi Arabia's wealthiest families a mere $400,000 to $500,000 . They've cost American taxpayers, minimally, $5.6 trillion dollars with no end in sight. And every day the Afghan War and the others that have followed from it continue is but another triumphant day for him and his followers.

A sad footnote to this history of extreme repetition: I wish this essay, as its title suggests, were indeed the war piece to end all war pieces. Unfortunately, it's a reasonable bet that, in August 2019, or August 2020, not to speak of August 2021, I'll be repeating all of this yet again.

Tom Engelhardt is a co-founder of the American Empire Project and the author of a history of the Cold War, The End of Victory Culture . He is a fellow of the Nation Institute and runs TomDispatch.com . His sixth and latest book is A Nation Unmade by War (Dispatch Books).


Anonymous , [142] Disclaimer says: August 16, 2018 at 2:54 pm GMT

Afganistan is the graveyard of poor empires. It's the playground of the rich American empire, a place to test weapons, test men, gain battle experience, get promotions, and generally keep the military-industrial complex in top health. If it didn't exist, we'd have to invent it. All very human. If America wasn't doing it, somebody else would.

Life is a killer.

MarkU , says: August 16, 2018 at 3:06 pm GMT

Its all about pipelines, rare-earth elements and drug money for CIA black ops.

15 years of American efforts to suppress opium growing and the heroin trade in that country (at historic lows, by the way, when the U.S. invaded in 2001).

And many record harvests after the US invasion.

' In politics, nothing happens by accident. If it happens, you can bet it was planned that way ' Franklin D. Roosevelt.

Sally Snyder , says: August 16, 2018 at 5:05 pm GMT

As shown in this article there is a very interesting connection between growing wealth inequality in the United States and American wars: https://viableopposition.blogspot.com/2018/07/how-american-wars-lead-to-increased.html

Unless Washington shifts from a program of funding wars by deficit financing to funding wars through direct taxation, wars being fought by the United States will continue to contribute to America's growing income inequality.

mijj , says: August 17, 2018 at 4:14 am GMT

fyi: Forever War was a 1974 Sci-Fi book inspired by the Vietnam war.

Colin Wright , says: Website August 17, 2018 at 9:32 pm GMT

To leave Afghanistan we would have to admit defeat. We don't want to admit defeat. Therefore, we don't leave.

Deschutes , says: August 18, 2018 at 4:53 pm GMT

About the only thing I take away from this insufferably droll, repetitive piece on America at war forever, is how powerless the both the writer and the reader are. All we can do is read these depressing articles which remind us of a war we can do absolutely nothing about. Very shitty and depressing, just like USA!

peterAUS , says: August 19, 2018 at 1:56 am GMT
@Anonymous

Pretty much. Besides, it's not a war; it's an occupation. More cops get killed/wounded in USA proper then military personnel in that "war". 2017, 46 U.S. police officers were killed by felons in the line of duty; 17 military personnel in Afghanistan.

The article's point/issue is simply overblown. That's why people don't pay attention to it.

skrik , says: August 19, 2018 at 7:29 am GMT
@peterAUS

Besides, it's not a war; it's an occupation

BS; it's an alien invasion = Nuremberg-class war crime.

More cops get killed/wounded in USA proper

This looks very much like the "tu quoque" or the appeal to hypocrisy fallacy plus 'oranges vs. apples.' What the good US-burghers do in their own country is entirely their business, and IF it looks like they act like antediluvian neanderthal savages [a direct result of their risible 'education' + night & day TV, perhaps] THEN tough luck for the cops. It probably doesn't help that the US-cops are just as much free with the lead as their oppressed subjects. And don't think that the same sort of savagery won't impact someone near you; a quick glance into abc.net.au/news/justin reveals horrendous 'social situations,' like bodies in barrels, say, or aggravated home invasions, etc., also caused by defective education plus importing 'cheap' labour.

That's why people don't pay attention to it

More BS; the sheeple ignore US/Z aggression everywhere it occurs because the corrupt&venal MSM+PFBCs [= publicly financed broadcasters, like the AusBC] sell the powerless population pups = the sheeple get actively, deliberately brainwashed [cf. Lügenpresse ]. Apologists for [here terrorist] criminals make themselves accessories = assign themselves guilt and should be punished after being tried & found so guilty.

blackswan , says: August 21, 2018 at 5:02 pm GMT

" The U.S. has spent 25 trillion since the Vietnam War, what do they have to show for it? " Jack Ma Ali Baba
" The genius of our ruling class is that it has kept the majority of people from ever questioning the inequity of a private for profit fraudulent banking system where most people drudge along, paying heavey taxes for which they get nothing in return." Gore Vidal

Biff , says: August 23, 2018 at 4:37 am GMT

Tom, you have to get over tying Osama bin Laden to 9/11. Who organized that event, I do not know, but cave dwelling Arabs it was not.

cui bono does include Osama's ilk, but many others as well, and there HAD to be insiders in the U.S. government to pull it off.

Yukon Tom , says: August 23, 2018 at 5:06 am GMT

(War) "It's something we do all the time because we're good at it. And we're good at it because we're used to it. And we're used to it because we do it all the time." Sergeant Michael Dunne played by Paul Gross in Passchendaele the Movie

I'm not sure, but I don't think we are good at it anymore. But it appears to me that the Russians, Iranians, Syrians and Houthi's are and that really scares us. But it does make a lot of money for some people, careers for others and the MSM loves it for the ratings and avoiding telling the truth.

Realist , says: August 23, 2018 at 8:11 am GMT

Your opening photo is of two of the dumbest son-of-a-bitches to ever hold the office of President of The United States. Indicative of the shit slide this country is on.

The Alarmist , says: August 23, 2018 at 9:07 am GMT

"Afghans and others are being uprooted and displaced across Asia, South Asia, the Middle East, and deep into Africa ."

So the strategy is to depopulate the country of its indigenous peoples until "we" outnumber them? Never mind the damage these re-settled folks are doing to Western Europe, not to mention other places.

Winning!

blood drunk , says: August 23, 2018 at 9:16 am GMT
@Anonymous

.generally keep the military-industrial complex in top health

Yes , the US military industrial complex is rich and in top health as you say , but what I see is that the health of the US as a whole , physical and mental , is going down in the last 50 years . Maybe the metastasis of the " healthy " military cancer are killing the American host .

The same happened to most of the empires , got drunk on blood and fell .

[Aug 19, 2018] Ukrainian external debt reached 83 percent of the GDP

Notable quotes:
"... In this version of 21st century slavery, all these disadvantages have been eliminated! Slaves stay in their homecountry: there is no need to bring them from there, no need to live amongst them and to feed them! Slaves are forced to work hard in the hope of paying off their debt, so they are motivated and hardworking. And most importantly, no civil war in the USA! ..."
Aug 19, 2018 | thenewkremlinstooge.wordpress.com

Moscow Exile,

This year, the Ukraine Prime Minister Groisman said that the external debt is 83% of the GDP. And by the end of the year, having been pressurized by the IMF, it will reach 90%. In order to service its external debts, the Ukraine spends $4.8 billion a year.

This is real slavery - only a new, improved version of it. From the 17th to the 19 centuries, slavery in [the North American British colonies and then - ME] the United States had a number of serious deficiencies: slaves had to be brought all the way from Africa; slaves were not extremely industrious; Americans themselves had to live amongst the slaves; and, most unpleasantly, all this led to civil war in the United States.

In this version of 21st century slavery, all these disadvantages have been eliminated! Slaves stay in their homecountry: there is no need to bring them from there, no need to live amongst them and to feed them! Slaves are forced to work hard in the hope of paying off their debt, so they are motivated and hardworking. And most importantly, no civil war in the USA!

Draw your own conclusions.

[Aug 19, 2018] New Interests Join The Clash About North-East Syria

Notable quotes:
"... Turkey fell into the same deep state bankers financial trap, that Spain Greece Italy fell for. Bail out a vunrable country then pull the rug out ! You own them ! So I would slightly disagree with it being entirely of there own making. I blame the Rothchild family. ..."
Aug 19, 2018 | www.moonofalabama.org

... ... ...

At the beginning of the year one U.S. dollar cost 3.5 lira. At the beginning of August it cost 4.80 lira. It then went up to 7.00 lira/$ and at Friday's closing it was down again at 6.00 TL/$. But Monday morning lira will again lose more of its value:

Turkey's credit rating was cut further into junk Friday by S&P Global Ratings and Moody's Investors Service, which said the volatile lira and wide current-account deficit may undermine the Middle East's largest economy.

S&P reduced Turkey's foreign-currency rating to four notches below investment grade at B+ from BB-, on par with Argentina, Greece and Fiji. Moody's lowered its grade to Ba3 from Ba2, three notches below investment grade. The ratings companies said the weak currency, runaway inflation and current-account deficit are Turkey's key vulnerabilities .

Turkey's crisis is homemade . The current spat with the United States only exaggerates it. For years Turkey borrowed large amounts of money from abroad and invested it into local infrastructure instead of producing exportable products. Its current account deficit this year will again be some $50 to $60 billion. International banks and other foreign lenders now demand interests rates above 20% from Turkish lenders because the chance of losing the lent money is high.

After the 17% crash on August 13 down to 7 TL/$ the Turkish Central Bank used some one-time measures to support the currency without raising its interest rate. The Turkish president Erdogan is ideologically adverse to interests and keeps the bank from doing what it must do to cool the Turkish economy and to stabilize the currency.

Erdogan asked Russia for help but received nothing but good advice. He also called in favors. When in June 2017 Saudi Arabia's clown prince Mohammed bin Salman (MbS) tried to take over Qatar and to steal its juicy $350 billion sovereign wealth fund, the emir of Qatar called on Turkey for help. Erdogan sent the Turkish army and air force. His troops protected Qatar from a Saudi invasion.

With the lira in trouble the emir flew to Ankara and promised a new $15 billion investment into Turkey. Additionally some mysterious cargo was unloaded from his plane. That saved the lira for a few days. But Turkey's structural problems are unsolved. Erdogan is no longer trusted and his son in law, who he made finance minister, lacks the necessary qualification for the job. Thus :

"We forecast a recession next year," S&P said. "Inflation will peak at 22 percent over the next four months, before subsiding to below 20 percent by mid-2019."

The Qatari move came a few days before its arch enemy Saudi Arabia also moved into the area. On Friday the U.S. announced that Saudi Arabia would support the U.S. occupied north-east Syria with 100 million dollar . The Wahhabi Saudis are now financing the secular Kurdish terror organization PKK/YPG, the local U.S. proxy in north-east Syria.

If the Saudi clown prince MbS wants to take revenge on Turkey's Erdogan for messing up his plans for Qatar, he now has his chance.

Posted by b on August 18, 2018 at 03:56 PM | Permalink


Mark2 , Aug 18, 2018 5:12:42 PM | 4

One refinement to add to 'b's outstanding post (how the hell does he do it, miraculous !) as far as I can see Turkey fell into the same deep state bankers financial trap, that Spain Greece Italy fell for. Bail out a vunrable country then pull the rug out ! You own them ! So I would slightly disagree with it being entirely of there own making. I blame the Rothchild family.
Fastfreddy , Aug 18, 2018 5:32:52 PM | 5
Moody's and S&P ratings agencies are fraudulent institutions. For having AAA rated billions worth of junk mortgages, they should have been indicted and prosecuted.
Lochearn , Aug 18, 2018 5:44:06 PM | 6
Excellent analysis again, b. You surpass yourself. There is something you talk about that has always intrigued me

"For years Turkey borrowed large amounts of money from abroad and invested it into local infrastructure instead of producing exportable products."

There is a parallel here with Spain. From entry into the Euro in 1999 the floodgates of credit opened. Bankers, politicians and builders were involved in creating vast swathes of speculative urbanization; two airports were built which now stand empty, a formula 1 track hosted five races before closing, a phantom theme park; huge, almost empty accommodation complexes, and the list goes on. The ghost airport in Ciudad Real, which cost £1.2 million euros, was sold off to Chinese buyers for a mere 10,000 euros. The "Cajas", the regional banks, were all bailed out by the government.

Apart from local corruption, which is nothing new, I think there must have been a deliberate strategy on the part of EU elites not to finance industrial projects that would generate export currency, and hence compete with EU industrial powers such as Germany (I once read Spanish academic paper arguing this but have not managed to track it down). When the same happens in Turkey, obviously not an EU country, you have to wonder whether is it part of a transatlantic banker strategy: corrupt national elites finance corrupt local elites to build ghost infrastructures as cheap and shoddy as you can get, the banks that financed it get bailed out if it all crashes. What's not to like?

telescope , Aug 18, 2018 5:50:52 PM | 7
Turks can't avoid Greek-style crisis now. The solution calls for a violent swing in trade balance from huge deficit to sizable surplus, somewhere in a range of $100B. That can't happen unless people of Turkey are warehoused in slave-labor-condition factories that can be competitive enough to displace Asian players. That entails bone-crushing fall in living standards.
All in all, 20 percent decline in GDP is now all but certainty. The longer Erdogan tries to avoid the harsh medicine, the deeper this cancer goes. He should either bow to IMF, or to exit NATO, join BRICS and ask for loans from that grouping.
Of course, Turkish military can say bye-bye to its present size. It's unsustainable. Financial crunch will reduce Turkish armed forces to less than half of their present size.
And if Erdogan wants to keep his soldiers well-equipped for half the price - which he should - he'll have to switch to much more reasonably priced Russian weaponry. Once he does that, even Russia may contribute $10B to his bailout kitty.
Otherwise, Erdogan is a dead man. The economic hurricane barreling his way is only gathering strength with every passing day. And all he is doing is unfurling umbrellas and increasing the volume of music.
Mark2 , Aug 18, 2018 6:29:19 PM | 12
That list of infrastructure @ Lochern mentions looks geared toward the holiday industry which in the past has been a major income for Turkey ! Worth at the time perhaps investing in. Very popular with Eurapians but very popular with Russians. My wild guess would be---- some dodgey ploy by the west to drive a wedge between Russia and Turky, devideding and ruling both! By meens of conflict and bank debt .The gains would be numerous long term and short term. But as already mentioned may back fire and bring Russia and Turkey closer. I hope so.
Pft , Aug 18, 2018 6:30:54 PM | 13
Much of Turkeys external debt is private and not government . Their BIS controlled central bank kept interest rates high. This forced Turkish banks to take out loans in USD or Euro which had lower interest rates to meet loan demands in the private corporate sector , which they made at higher interest rates after exchanging for Lira. More profitable. The assumption was there would be a relatively stable exchange rate. So there was risk.

That risk made them vulnerable fx attack by the globalist banking cartel. When Erdogan took over more control from the TCB last month to reduce interest rates and reduce demand for foreign loans this was seen as an act of war. The independence of the central bank must be defended. Trumps additional tarrif increases, mild as they were were simply a symbolic barking of orders to take Turkey down

Looking at the broader picture. Since the 2008 financial blowout there has been "carry trade" fueled by zero-cost liquidity pumped into the global system by quantitative easing, which was then shipped to high-interest emerging markets such as Brazil, Turkey and other countries.

With the beginning of the Fed's "tapering" of QE and rising interest rates since 2015, the whole financial system has triggered a "reverse carry trade" where dollars flow out of emerging markets back to safer havens. This is what you are seeing in Turkey, Argentina, Russia, Brazil, etc.

The last 10 years are a replay of the decade running up to the 1997/1998 crisis. While the 1985 'Plaza Accord' dollar devaluation was not exactly QE, it had the same intent and results – a flood of cheap money and dollar debt, and therefore growing global dependence on the dollar and vulnerability to US monetary and economic policy

Some say countries like Turkey should know better, but countries have little control over their monetary policy under the global and independent central banking system forced on them. Go against this system and you will be hit with sanctions , subject to regime change or will be invaded

So call it a homegrown crisis if thats the reality you choose to live in. Who am I to say otherwise?

CDWaller , Aug 18, 2018 6:52:06 PM | 15
These rating agencies are the same ones that rated junk mortgage bonds AA. They are for sale to highest bidder or since they haven't been prosecuted for their criminal behavior, vulnerable to threats from the same political machine that turned a blind eye in 2008.
Turkey may have homegrown economic problems as you have pointed out but they certainly have even more problems with a vindictive and extremely corrupt Uncle Sam who ruthlessly punish any and all independent actions.
dh-mtl , Aug 18, 2018 7:26:48 PM | 17
Another excellent blog B. I agree with many of the above commenters that the breadth and depth of the analysis on MOA is truly amazing.

Pft@13. Good analysis as well.

However, I would expect that Turkey will not be another Greece. Rather I expect Turkey to get help from its friends to stabilize its economic position, resist U.S. sanctions and avoid an IMF bail-out.

With the support of Qatar, and I would expect China as well, I would expect Turkey to protect its banks. However, it is also possible that they will let some private Turkish companies, with dollar denominated debts, default. Such defaults, combined with the pressure that declining dollar liquidity is already putting on other emerging markets and Italy, would be destabilizing for the Western financial system. Sooner or later, and I suspect sooner, the FED will be required to start printing money again, which will reverse the dollar's recent strength and relieve the pressure on Turkey.

At the end of the day, however, I expect that this episode will be another step in the direction of de-dollarization and will further reduce the ability of the U.S. to use economic sanctions to bully its adversaries.

Mark2 , Aug 18, 2018 8:03:33 PM | 18
A strange paradox of life !
Owe your bank 1000 the bank manager will make you bankrupt, owe the bank a million and he'll invite you home for dinner ! More to lose !
By this token I'd like to think, the more country's that refuse there debt, the less power the west will have ! The less credibility and the less fear and influence they can inflict .
If the west wants to weaponise banking so be it ! Bring it on. Let's pull the rug out from under the banks/Rothchilds.
Feet ! Natural justice !
ben , Aug 18, 2018 8:19:12 PM | 19
Pft @ 13 said:"Some say countries like Turkey should know better, but countries have little control over their monetary policy under the global and independent central banking system forced on them. Go against this system and you will be hit with sanctions , subject to regime change or will be invaded."

CDWaller @ 15 said:"These rating agencies are the same ones that rated junk mortgage bonds AA. They are for sale to highest bidder or since they haven't been prosecuted for their criminal behavior, vulnerable to threats from the same political machine that turned a blind eye in 2008."


The usual suspects described perfectly.

[Aug 15, 2018] Talking Turkey: In essence this is an emerging market financial crisis, much like the 1997-98 Asian Financial Crisis

Notable quotes:
"... So why should you care? Why does that matter to you or me? Well, like most emerging market financial crisis there is the danger of contagion . ..."
"... Turkey's economy is four times the size of Greece, and roughly equal in size to Lehman Brothers circa 2008. ..."
"... Turkey's other borders face six nations: Georgia, Iran, Iraq, Syria, Armenia, and Nakhchivan, a territory affiliated with Azerbaijan. Five of those are involved in ongoing armed conflicts or outright war. ..."
"... NATO has long outlived its' usefulness. Cancel its' stipend and bring our soldiers, marines, sailors and airmen and women home! Put them to work here. Fighting fires. ..."
"... NATO only seems to be useful to the hegemony that supports it. Peace is not it's mission. ..."
Aug 15, 2018 | caucus99percent.com

gjohnsit on Tue, 08/14/2018 - 3:46pm

By now you've probably heard that Turkey is having a financial crisis, and Trump appears to be pouring gasoline on it.
But you may not understand what is happening, or you may not know why it's important.
So let's do a quick recap .

Turkey's currency fell to a new record low today. Year to date it's lost almost half its value, leading some investors and lenders inside and outside of Turkey to lose confidence in the Turkish economy.
...
"Ninety percent of external public and private sector debt is denominated in foreign currencies," he said.

Here's the problem. Because of the country's falling currency, that debt just got a lot more expensive.
A Turkish business now effectively owes twice as much as it did at the beginning of the year. "You are indebted in the U.S. dollar or euro, but your revenue is in your local currency," explained Lale Akoner, a market strategist with Bank of New York Mellon's Asset Management business. She said Turkey's private sector currently owes around $240 billion in foreign debt.

In essence this is an emerging market financial crisis, much like the 1997-98 Asian Financial Crisis.

This is all about hot money that has been washing around in a world of artificially low interest rates, and now, finally, an external shock happened. As it always happens .

The bid-ask spread, or the difference between the price dealers are willing to buy and sell the lira at, has widened beyond the gap seen at the depth of the global financial crisis in 2008, following Lehman Brothers Holdings Inc.'s collapse.

So why should you care? Why does that matter to you or me? Well, like most emerging market financial crisis there is the danger of contagion .

The turmoil follows a similar currency crash in Argentina that led to a rescue by the International Monetary Fund. In recent days, the Russian ruble, Indian rupee and South African rand have also tumbled dramatically.

Investors are waiting for the next domino to fall. They're on the lookout for signs of a repeat of the 1997-1998 Asian financial crisis that began when the Thai baht imploded.

A minor currency devaluation of the Thai baht in 1997 eventually led to 20% of the world's population being thrust into poverty. It led to Russia defaulting in 1998, LTCM requiring a Federal Reserve bailout, and eventually Argentina defaulting in 2001.

Turkey's economy is four times the size of Greece, and roughly equal in size to Lehman Brothers circa 2008.

The markets want Turkey to run to the IMF for a loan, but that would require a huge interest rate hike and austerity measures that would thrust Turkey into a long depression. However, that isn't the biggest obstacle .

The second is that Erdogan would have to bury his hatchet with the United States, which remains the IMF's largest shareholder. Without U.S. support, Turkey has no chance of securing an IMF bailout program.

There is another danger, a political one and not so much an economic one, that could have dramatic implications.
If Erdogan isn't overthrown, or humbled, then there is an ironclad certainty that Turkey will leave NATO and the West.

Turkey, unlike Argentina, does not seem poised to turn to the International Monetary Fund in order to stave off financial collapse, nor to mend relations with Washington.

If anything, the Turkish President looks to be doubling down in challenging the US and the global financial markets -- two formidable opponents.
...
Turkey would probably no longer view the US as a reliable partner and strategic ally. Whoever ends up leading the country, a wounded Turkey would most likely seek to shift the center of gravity away from the West and toward Russia, Iran and Eurasia.

It would make Turkey less in tune with US and European objectives in the Middle East, meaning Turkey would seek to assert a more independent security and defense policy.

Erdogan has warned Trump that Turkey would "seek new friends" , although Russia and China haven't yet stepped up to the plate to bat for him.
Russia, Iran and China do have a common interest when in comes to undermining the petrodollar . Pulling Turkey into their sphere of influence would be a coup.

Turkey lies at a historic, strategic crossroad. The bridge between the peaceful West and the war-ridden dictatorships of the East that the West likes to bomb.

On its Western flank, Turkey borders Greece and Bulgaria, Western-facing members of the European Union. A few years ago, Turkey -- a member of NATO -- was preparing the join Europe as a full member.

Turkey's other borders face six nations: Georgia, Iran, Iraq, Syria, Armenia, and Nakhchivan, a territory affiliated with Azerbaijan. Five of those are involved in ongoing armed conflicts or outright war.

Losing Turkey would be a huge setback for NATO, the MIC, and the permanent war machine.

QMS on Tue, 08/14/2018 - 4:59pm

IMF = Poison

more struggling economies are starting to get it. Trade wealth for the rulers (IMF supporters) to be paid by the rest of us. Fight back. Squeeze the bankers balls. Can't have our resources, now way, no how, without a fight.

enhydra lutris on Tue, 08/14/2018 - 6:26pm
Can the BRICS get by without Brazil, perhaps by pulling

in a flailing Turkey? Weren't there some outside potential takers encouraging China when it floated its currency proposal?

Nastarana on Tue, 08/14/2018 - 8:41pm
NATO has long outlived its' usefulness. Cancel its' stipend and bring our soldiers, marines, sailors and airmen and women home! Put them to work here. Fighting fires.

Patrolling our shores for drug running and toxic dumping. Teaching school, 10 kids per class maximum. Refurbishing buildings and housing stock. Post Cold War, an military alliance with Turkey makes no sense.

QMS on Tue, 08/14/2018 - 9:22pm
NATO only seems to be useful to the hegemony that supports it. Peace is not it's mission.

[Aug 15, 2018] While the west is gradually leaning toward dumping Ukraine and hoping Russia will solve the financial problems it faces, Russia might decline this offer

Ukraine has huge problems because far right nationalists while hate corruption, do not control economics and oligarchs who control it do not intent to share their profits with the population, who is on the edge of starvation.
Breaking economic ties with Russia helped to relegate Ukraine to semi-colonial status as without cooperation with Russian industries and access to Russian market (which they know very well) many Ukrainian manufacturing industries are less viable..
Ukraine was already converted into debt-slave, and it is extremely difficult to climb out of this hole without default. At the same time it serves are powerful anti-Russian force in the region and as such will be semi-supported by both the USA and EU. for example attacks on Ukrainian currency probably will be avoided.
This is a variant of " don't cry for me Argentina" situation.
Notable quotes:
"... Notably that while the west is gradually leaning toward dumping Ukraine and hoping Russia will solve the problem, the warning signs are there that Russia has no intention of bailing out an exhausted Ukraine, and that this time it is going to be allowed to fail all the way down. The west should be warned that nobody is riding to the rescue and pouring their resources into stabilizing Ukraine – if the west cannot do it, the alternative is collapse and draining emergency work to keep the population from starvation. Prosperity is an impossible dream now, and the people – I think – would be pretty happy to be back where they were before the glorious Maidan. ..."
"... Interestingly, something that was not touched upon in the 'Necessary' section was the elimination of the oligarchy in Kiev and other major cities. I will declare frankly that I have no idea how this might be achieved – as discussed before several times, the Ukrainian oligarchs control something in the order of 70% of Ukrainian GDP, and are not about to gift any of it back to the Ukrainian state. ..."
"... You'll know there's no more money in Ukraine when the oligarchs leave, and I see no sign of that so far, while it is evident they intend to be a big part of any future rebuilding. They've already successfully stolen most of the IMF money, and plainly think an even bigger payday is still in the offing. ..."
"... Eventually, if the USA is unsuccessful in forcing the outbreak of another world war, the west will get around to either asking Russia to help, or trying to dump Ukraine on Russia. ..."
"... Whatever happens, the dream of Ukrainian nationalists to forge a great and powerful ... nation of Ukraine is always going to remain that – a dream. They're happy enough at present scampering about in the ruins and glorying in their imagination of great power, but they are kings of the dungheap without any clue of nation-building. ..."
"... The few who both hated Russia and honestly aspired to a Great Ukraine – free of corruption and able to pay its way through judicious management of its undeniable resources and casting off the peasant mentality – have no influence, and operate at the pleasure of the power-brokers; they are allowed to dabble at anti-corruption until their probing becomes uncomfortable, and then they are discredited and fired, if not charged with the crimes they say they are investigating. ..."
Aug 15, 2018 | thenewkremlinstooge.wordpress.com

Cortes August 10, 2018 at 9:02 pm

Last post time, but a goodie (I think):

http://thesaker.is/whats-destructive-constructive-and-necessary-in-ukrainian-politics/

No intention to comment- read for yourselves.

Mark Chapman August 11, 2018 at 6:41 am
That is indeed an interesting piece – generally speaking, we most enjoy writing with which we agree, and I mostly agree with it and feel the ring of familiarity, because some of it is what we have been saying here for a couple of years. Notably that while the west is gradually leaning toward dumping Ukraine and hoping Russia will solve the problem, the warning signs are there that Russia has no intention of bailing out an exhausted Ukraine, and that this time it is going to be allowed to fail all the way down. The west should be warned that nobody is riding to the rescue and pouring their resources into stabilizing Ukraine – if the west cannot do it, the alternative is collapse and draining emergency work to keep the population from starvation. Prosperity is an impossible dream now, and the people – I think – would be pretty happy to be back where they were before the glorious Maidan.

Interestingly, something that was not touched upon in the 'Necessary' section was the elimination of the oligarchy in Kiev and other major cities. I will declare frankly that I have no idea how this might be achieved – as discussed before several times, the Ukrainian oligarchs control something in the order of 70% of Ukrainian GDP, and are not about to gift any of it back to the Ukrainian state.

But for so long as Ukraine continues to elect one oligarch after another to the office of President, the oligarch of the moment will be far more occupied with increasing his/her personal wealth and power, and settling scores with rivals, than with governance and accountability. At the same time, there is no use hoping the President will be a poor man or woman, because they generally do not have the worldly education to grasp the problem and envision solutions while being simultaneously beset from all sides by the oligarchy, seeking to retain its power and influence.

You'll know there's no more money in Ukraine when the oligarchs leave, and I see no sign of that so far, while it is evident they intend to be a big part of any future rebuilding. They've already successfully stolen most of the IMF money, and plainly think an even bigger payday is still in the offing.

The United States has largely forgotten Ukraine, as it was only ever a pretext for a full-court press against Russia anyway, and it now has enough Russophobia sustainment in its ditzy population to press forward without the need to invoke sympathy for Ukraine. Europe is still quite interested in a resolution, but only because of its fear that it is going to get stuck with the booby prize, and be made to assume responsibility for getting Ukraine on its feet somehow, perhaps even absorbing it. Eventually, if the USA is unsuccessful in forcing the outbreak of another world war, the west will get around to either asking Russia to help, or trying to dump Ukraine on Russia.

Whatever happens, the dream of Ukrainian nationalists to forge a great and powerful ... nation of Ukraine is always going to remain that – a dream. They're happy enough at present scampering about in the ruins and glorying in their imagination of great power, but they are kings of the dungheap without any clue of nation-building.

The few who both hated Russia and honestly aspired to a Great Ukraine – free of corruption and able to pay its way through judicious management of its undeniable resources and casting off the peasant mentality – have no influence, and operate at the pleasure of the power-brokers; they are allowed to dabble at anti-corruption until their probing becomes uncomfortable, and then they are discredited and fired, if not charged with the crimes they say they are investigating.

Patient Observer August 11, 2018 at 8:17 am
Well said. Presumably, the Donbass will pull away from Ukraine and vote to joint Russia and Russia will approve for any number of reasons but certainly including humanitarian, ethnic/cultural connections and military considerations. Other regions such as Odessa could jump aboard as well.

There may be a mass exodus from what is left – the grifter to the West and those seeking a better life to the east. The Nazis will remain behind and may serve some purpose such as providing a pool of mercenaries for CIA projects.

I, for one, do not think the Donbass will be an overwhelming economic burden in the long run. The population has shown resolve and resilience. Given leadership and material aid, they can rebuild fairly quickly I think.

[Aug 15, 2018] Ukraine has more or less lost its case before the WTO, in which it wept that Russia s unfair imposition of an embargo on its railway cars and rolling stock constituted a violation which cost Ukraine $3.2 Billion in annual sales

Aug 15, 2018 | thenewkremlinstooge.wordpress.com

Mark Chapman August 1, 2018 at 5:27 pm

Oh, dear; Ukraine has more or less lost its case before the WTO, in which it wept that Russia's unfair imposition of an embargo on its railway cars and rolling stock constituted a violation which caused a former $3.2 Billion in annual sales – more than it realizes from transit fees for carrying Russian gas to Europe – to collapse to $150 Million. The WTO bought the Russian rationale that Russian inspectors going to Ukraine to ensure the product conformed to Russian standards would be in fear of their lives.

But the WTO ruled that the security situation was such that Russian inspectors sent to check that Ukraine's exports complied with Russian standards would have been risking their lives, and Russia was therefore justified in not sending them to Ukraine.

"The panel fully agreed with Russia's position and recognized that there was no systematic restriction of imports of Ukrainian equipment by Russia," Russia's Ministry of Trade and Economy said in a statement.

The WTO did go on to say Russia could have carried out the inspections outside Ukraine, but therein lies a sandbag to the head that Ukraine probably spotted already – if Russian inspectors found shoddy work or any other reason to refuse the offered goods, to say nothing of the probability that no contracting position between the two countries even exists any more, then Ukraine would be out the sale plus whatever costs it incurred to ship the goods outside Ukraine.

https://m.investing.com/news/economy-news/wto-ruling-derails-bulk-of-ukrainian-trade-dispute-against-russia-1551279?ampMode=1

Gosh! Is Ukraine's Russophobia beginning to blow up in its face?

[Aug 13, 2018] Imperialism Is Alive and Kicking A Marxist Analysis of Neoliberal Capitalism by C.J. Polychroniou

Highly recommended!
Marxism provides one of the best analysis of capitalism; problems start when Marxists propose alternatives.
Notable quotes:
"... Such demand-compression occurs above all through the imposition of an income deflation on the petty producers, and on the working population in general, in the Third World. This was done in the colonial period through two means: one, "deindustrialization" or the displacement of local craft production by imports of manufactures from the capitalist sector; and two, the "drain of surplus" where a part of the taxes extracted from petty producers was simply taken away in the form of exported goods without any quid pro quo ..."
"... I mean by the term "imperialism" the arrangement that the capitalist system sets up for imposing income deflation on the working population of the Third World for countering the threat of inflation that would otherwise erode the value of money in the metropolis and make the system unviable. "Imperialism" in this sense characterizes both the colonial and the contemporary periods. ..."
"... The fact that the diffusion of capitalism to the Third World has proceeded by leaps and bounds of late, with its domestic corporate-financial oligarchy getting integrated into globalized finance capital, and the fact that workers in the metropolis have also been facing an income squeeze under globalization, are important new developments; but they do not negate the basic tendency of the system to impose income deflation upon the working population of the Third World, a tendency that remains at the very core of the system. ..."
"... any state activism, other than for promoting its own exclusive and direct interest, is anathema for finance capital, which is why, not surprisingly, "sound finance" and "fiscal responsibility" are back in vogue today, when finance capital, now globalized, is in ascendancy. Imperialism is thus a specifically capitalist way of obtaining the commodities it requires for itself, but which are produced outside its own domain. ..."
"... dirigiste regimes ..."
"... With the reassertion of the dominance of finance, in the guise now of an international ..."
"... Contemporary imperialism therefore is the imperialism of international finance capital which is served by nation-states (for any nation-state that defies the will of international finance capital runs the risk of capital flight from, and hence the insolvency of, its economy). The US, being the leading capitalist state, plays the leading role in promoting and protecting the interests of international finance capital. But talking about a specific US imperialism, or a German or British or French imperialism obscures this basic fact. ..."
"... Indeed, a good deal of discussion about whether the world is heading toward multi-polarity or the persistence of US dominance misses the point that the chief actor in today's world is international or globalized finance capital, and not US or German or British finance capital. ..."
"... US military intervention all over the world, in order to acquire a proper meaning has to be located within the broader setting of the imperialism of international finance capital. ..."
"... absolute immiserization ..."
Aug 13, 2018 | truthout.org

C.J. Polychroniou: How do you define imperialism and what imperialist tendencies do you detect as inherent in the brutal expansion of the logic of capitalism in the neoliberal global era?

Prabhat Patnaik: The capitalist sector of the world, which began by being located, and continues largely to be located, in the temperate region, requires as its raw materials and means of consumption a whole range of primary commodities which are not available or producible, either at all or in adequate quantities, within its own borders. These commodities have to be obtained from the tropical and sub-tropical region within which almost the whole of the Third World is located; and the bulk of them (leaving aside minerals) are produced by a set of petty producers (peasants). What is more, they are subject to "increasing supply price," in the sense that as demand for them increases in the capitalist sector, larger quantities of them can be obtained, if at all, only at higher prices, thanks to the fixed size of the tropical land mass.

This means an ex ante tendency toward accelerating inflation as capital accumulation proceeds, undermining the value of money under capitalism and hence the viability of the system as a whole. To prevent this, the system requires that with an increase in demand from the capitalist sector, as capital accumulation proceeds, there must be a compression of demand elsewhere for these commodities, so that the net demand does not increase, and increasing supply price does not get a chance to manifest itself at all.

Such demand-compression occurs above all through the imposition of an income deflation on the petty producers, and on the working population in general, in the Third World. This was done in the colonial period through two means: one, "deindustrialization" or the displacement of local craft production by imports of manufactures from the capitalist sector; and two, the "drain of surplus" where a part of the taxes extracted from petty producers was simply taken away in the form of exported goods without any quid pro quo . The income of the working population of the Third World, and hence its demand, was thus kept down; and metropolitan capitalism's demand for such commodities was met without any inflationary threat to the value of money. Exactly a similar process of income deflation is imposed now upon the working population of the Third World by the neoliberal policies of globalization.

I mean by the term "imperialism" the arrangement that the capitalist system sets up for imposing income deflation on the working population of the Third World for countering the threat of inflation that would otherwise erode the value of money in the metropolis and make the system unviable. "Imperialism" in this sense characterizes both the colonial and the contemporary periods.

We recognize the need for a reserve army of labor to ward off the threat to the value of money arising from wage demands of workers. Ironically, however, we do not recognize the parallel and even more pressing need of the system (owing to increasing supply price) for the imposition of income deflation on the working population of the Third World for warding off a similar threat.

The fact that the diffusion of capitalism to the Third World has proceeded by leaps and bounds of late, with its domestic corporate-financial oligarchy getting integrated into globalized finance capital, and the fact that workers in the metropolis have also been facing an income squeeze under globalization, are important new developments; but they do not negate the basic tendency of the system to impose income deflation upon the working population of the Third World, a tendency that remains at the very core of the system.

Those who argue that imperialism is no longer a relevant analytic construct point to the multifaceted aspects of today's global economic exchanges and to a highly complex process involved in the distribution of value which, simply put, cannot be reduced to imperialism. How do you respond to this line of thinking?

Capitalism today is of course much more complex, with an enormous financial superstructure. But that paradoxically makes inflation even more threatening. The value of this vast array of financial assets would collapse in the event of inflation, bringing down this superstructure, which incidentally is the reason for the current policy obsession with "inflation targeting." This makes the imperialist arrangement even more essential. The more complex capitalism becomes, the more it needs its basic simple props.

I should clarify here that if "land-augmenting" measures [such as irrigation, high-yielding seeds and better production practices] could be introduced in the Third World, then, notwithstanding the physical fixity of the tropical land mass, the threat of increasing supply price -- and with it, [the threat] of inflation -- could be warded off without any income deflation. Indeed, on the contrary, the working population of the Third World would be better off through such measures. But these measures require state support and state expenditure, a fact that Marx had recognized long ago. But any state activism, other than for promoting its own exclusive and direct interest, is anathema for finance capital, which is why, not surprisingly, "sound finance" and "fiscal responsibility" are back in vogue today, when finance capital, now globalized, is in ascendancy. Imperialism is thus a specifically capitalist way of obtaining the commodities it requires for itself, but which are produced outside its own domain.

The post-decolonization dirigiste regimes [regimes directed by a central authority] in the Third World had actually undertaken land-augmentation measures. Because of this, even as exports of commodities to the metropolis had risen to sustain the biggest boom ever witnessed in the history of capitalism, per capita food grain availability had also increased in those countries. But I see that period as a period of retreat of metropolitan capitalism, enforced by the wound inflicted upon it by the Second World War. With the reassertion of the dominance of finance, in the guise now of an international finance capital, the Third World states have withdrawn from supporting petty producers, a process of income deflation is in full swing, and the imperialist arrangement is back in place, because of which we can see once more a tendency toward a secular decline in per capita food grain availability in the Third World as in the colonial period.

There is a third way -- apart from a greater obsession with inflation aversion and a yoking of Third World states to promoting the interests of globalized finance rather than defending domestic petty producers -- in which contemporary capitalism strengthens the imperialist arrangement. It may be thought that the value of imports of Third World commodities into the capitalist metropolis is so small that we are exaggerating the inflation threat from that source to metropolitan currencies. This smallness itself, of course, is an expression of an acutely exploitative relationship. In addition, however, the threat to the Third World currencies themselves from a rise in the prices of these commodities becomes acute in a regime of free cross-border financial flows as now, which threatens the entire world trade and payments system and hence makes income deflation particularly urgent. Hence the need for the imperialist arrangement becomes even more acute.

Not long ago, even liberals like Thomas Friedman of the New York Times were arguing that "McDonald's cannot flourish without McDonnell Douglas" (that is, the US Air Force). Surely, this is a crude version of imperialism, but what about today's US imperialism? Isn't it still alive and kicking?

The world that Lenin had written about consisted of nation-based, nation-state-supported financial oligarchies engaged in intense inter-imperialist rivalry for repartitioning the world through wars. When [Marxist theorist] Karl Kautsky had suggested the possibility of a truce among rival powers for a peaceful division of the world, Lenin had pointed to the fact that the phenomenon of uneven development under capitalism would necessarily subvert any such specific truce. The world we have today is characterized by the hegemony of international finance capital which is interested in preventing any partitioning of the world, so that it can move around freely across the globe.

Contemporary imperialism therefore is the imperialism of international finance capital which is served by nation-states (for any nation-state that defies the will of international finance capital runs the risk of capital flight from, and hence the insolvency of, its economy). The US, being the leading capitalist state, plays the leading role in promoting and protecting the interests of international finance capital. But talking about a specific US imperialism, or a German or British or French imperialism obscures this basic fact.

Indeed, a good deal of discussion about whether the world is heading toward multi-polarity or the persistence of US dominance misses the point that the chief actor in today's world is international or globalized finance capital, and not US or German or British finance capital. So, the concept of imperialism that [Utsa Patnaik and I] are talking about belongs to a different terrain of discourse from the concept of US imperialism per se . The latter, though it is, of course, empirically visible because of US military intervention all over the world, in order to acquire a proper meaning has to be located within the broader setting of the imperialism of international finance capital.

Some incidentally have seen the muting of inter-imperialist rivalry in today's world as a vindication of Kautsky's position over that of Lenin. This, however, is incorrect, since both of them were talking about a world of national finance capitals which contemporary capitalism has gone beyond.

... ... ...

One final question: How should radical movements and organizations, in both the core and the periphery of the world capitalist economy, be organizing to combat today's imperialism?

Obviously, the issue of imperialism is important not for scholastic reasons, but because of the praxis that a recognition of its role engenders. From what I have been arguing, it is clear that since globalization involves income deflation for the peasantry and petty producers, and since their absorption into the ranks of the active army of labor under capitalism does not occur because of the paucity of jobs that are created even when rates of output growth are high, there is a tendency toward an absolute immiserization of the working population. For the petty producers, this tendency operates directly; and for others, it operates through the driving down of the "reservation wage" owing to the impoverishment of petty producers.

Such immiserization is manifest above all in the decline in per capita food grain absorption, both directly and indirectly (the latter via processed foods and feed grains). An improvement in the conditions of living of the working population of the Third World then requires a delinking from globalization (mainly through capital controls, and also trade controls to the requisite extent) by an alternative state, based on a worker-peasant alliance, that pursues a different trajectory of development. Such a trajectory would emphasize peasant-agriculture-led growth, land redistribution (so as to limit the extent of differentiation within the peasantry) and the formation of voluntary cooperatives and collectives for carrying forward land-augmentation measures, and even undertaking value-addition activities, including industrialization.

Small Third World countries would no doubt find it difficult to adopt such a program because of their limited resource base and narrow home market. But they will have to come together with other small countries to constitute larger, more viable units. But the basic point is that the question of "making globalization work" or "having globalization with a human face" simply does not arise.

The problem with this praxis is that it is not only the bourgeoisie in the Third World countries, but even sections of the middle-class professionals who have been beneficiaries of globalization, who would oppose any such delinking. But the world capitalist crisis, which is a consequence of this finance-capital-led globalization itself, is causing disaffection among these middle-class beneficiaries. They, too, would now be more willing to support an alternative trajectory of development that breaks out of the straitjacket imposed by imperialism.

[Aug 13, 2018] Turkey blames Trump for attack on lira, says it won't 'kneel' and has counter-measures ready

Notable quotes:
"... "The currency of our country is targeted directly by the US president," ..."
"... "This attack, initiated by the biggest player in the global financial system, reveals a similar situation in all developing countries." ..."
"... "All of our action plan and measures are ready," ..."
"... "Together with our banks, we prepared our action plan regarding the situation with our real sector companies, including Small and Medium-sized enterprises (SMEs), which is the sector that is affected by the fluctuation the most," ..."
"... "Together with our banks and the Banking Regulation and Supervision Agency (BRSA), we will take the necessary measures quickly." ..."
"... "It is making an operation against Turkey Its aim is to force Turkey to surrender in every field from finance to politics, to make Turkey and the Turkish nation kneel down," ..."
"... "We have seen your play and we challenge you." ..."
Aug 13, 2018 | www.rt.com

Turkey has accused Donald Trump of leading an attack on its national currency. The lira lost about 40 percent of its value against the US dollar this year and, to reduce its volatility, Ankara has prepared an urgent action plan. "The currency of our country is targeted directly by the US president," Finance Minister Berat Albayrak told the Hurriyet. "This attack, initiated by the biggest player in the global financial system, reveals a similar situation in all developing countries."

The Turkish lira took a massive hit against the dollar on Friday following Trump's decision to double tariffs on aluminum and steel imports from Turkey to 20 percent and 50 percent. Overall, the national currency lost roughly about 40 percent of its value this year.

Read more © Ozan Kose Erdogan urges Turks to dump dollar to support lira

To calm down the markets, the government instructed its institutions to implement a series of actions on Monday. "All of our action plan and measures are ready," Albayrak said, without elaborating.

"Together with our banks, we prepared our action plan regarding the situation with our real sector companies, including Small and Medium-sized enterprises (SMEs), which is the sector that is affected by the fluctuation the most," the minister said . "Together with our banks and the Banking Regulation and Supervision Agency (BRSA), we will take the necessary measures quickly."

President Recep Tayyip Erdogan meanwhile slammed the US decision to impose new tariffs on steel and aluminum imports.

"It is making an operation against Turkey Its aim is to force Turkey to surrender in every field from finance to politics, to make Turkey and the Turkish nation kneel down," Erdogan said in Trabzon on Sunday. "We have seen your play and we challenge you."

[Aug 09, 2018] Why They Fail - The Quintessence Of The Korengal Valley Campaign

Notable quotes:
"... Wall Street Journal ..."
Aug 09, 2018 | www.moonofalabama.org

A new excerpt from a book by C.J. Chivers, a former U.S. infantry captain and New York Times war correspondent, tells the story of a young man from New York City who joined the U.S. army and was send to the Korengal Valley in Afghanistan. While the man, one Robert Soto, makes it out alive, several of his comrades and many Afghans die during his time in Afghanistan to no avail.

The piece includes remarkably strong words about the strategic (in)abilities of U.S. politicians, high ranking officers and pundits:

On one matter there can be no argument: The policies that sent these men and women abroad, with their emphasis on military action and their visions of reordering nations and cultures, have not succeeded. It is beyond honest dispute that the wars did not achieve what their organizers promised, no matter the party in power or the generals in command. Astonishingly expensive, strategically incoherent, sold by a shifting slate of senior officers and politicians and editorial-page hawks, the wars have continued in varied forms and under different rationales each and every year since passenger jets struck the World Trade Center in 2001. They continue today without an end in sight, reauthorized in Pentagon budgets almost as if distant war is a presumed government action.

That description is right but it does not touche the underlying causes. The story of the attempted U.S. occupation of the Korengal valley, which Civers again describes, has been the theme of several books and movies. It demonstrates the futility of fighting a population that does not welcome occupiers. But most of the authors, including Chivers, get one fact wrong. The war with the people of the Korengal valley was started out of shear stupidity and ignorance.

The main military outpost in the valley was build on a former sawmill. Chivers writes:

On a social level, it could not have been much worse. It was an unforced error of occupation, a set of foreign military bunkers built on the grounds of a sawmill and lumber yard formerly operated by Haji Mateen, a local timber baron. The American foothold put some of the valley's toughest men out of work, the same Afghans who knew the mountain trails. Haji Mateen now commanded many of the valley's fighters, under the banner of the Taliban.

Unfortunately Chivers does not explain why the saw mill was closed. Ten years ago a piece by Elizabeth Rubin touched on this:

As the Afghans tell the story, from the moment the Americans arrived in 2001, the Pech Valley timber lords and warlords had their ear. Early on, they led the Americans to drop bombs on the mansion of their biggest rival -- Haji Matin. The air strikes killed several members of his family, according to local residents, and the Americans arrested others and sent them to the prison at Bagram Air Base. The Pech Valley fighters working alongside the Americans then pillaged the mansion. And that was that. Haji Matin, already deeply religious, became ideological and joined with Abu Ikhlas, a local Arab linked to the foreign jihadis.

Years before October 2004, before regular U.S. soldiers came into the Korengal valley, U.S. special forces combed through the region looking for 'al-Qaeda'. They made friends with a timber baron in Pech valley, a Pashtun of the Safi tribe, who claimed that his main competitor in the (illegal) timber trade who lived in the nearby Korengal river valley was a Taliban and 'al-Qaeda'. That was not true. Haji Matin was a member of a Nuristani tribe that spoke Pashai . These were a distinct people with their own language who were and are traditional hostile to any centralized government (pdf), even to the Taliban's Islamic Emirate.

The U.S. special forces lacked any knowledge of the local society. But even worse was that they lacked the curiosity to research and investigate the social terrain. They simply trusted their new 'friend', the smooth talking Pashtun timber baron, and called in jets to destroy his competitor's sawmill and home. This started a local war of attrition which defeated the U.S. military. In 2010 the U.S. military, having achieved nothing, retreated from Korengal. (The sawmill episode was described in detail in a 2005(?) blog post by a former special force soldier who took part in it. It since seems to have been removed from the web.)

Back to Chivers' otherwise well written piece. He looks at the results two recent (and ongoing) U.S. wars:

The governments of Afghanistan and Iraq, each of which the United States spent hundreds of billions of dollars to build and support, are fragile, brutal and uncertain. The nations they struggle to rule harbor large contingents of irregular fighters and terrorists who have been hardened and made savvy, trained by the experience of fighting the American military machine.
...
Billions of dollars spent creating security partners also deputized pedophiles, torturers and thieves. National police or army units that the Pentagon proclaimed essential to their countries' futures have disbanded. The Islamic State has sponsored or encouraged terrorist attacks across much of the world -- exactly the species of crime the global "war on terror" was supposed to prevent.

The wars fail because they no reasonable strategic aim or achievable purpose. They are planned by incompetent people. The most recent Pentagon ideas for the U.S. war on Afghanistan depend on less restricted bombing rules. Yesterday one predictable and self defeating consequence was again visible:

An American airstrike killed at least a dozen Afghan security forces during intense fighting with the Taliban near the Afghan capital, officials said Tuesday.
...
Shamshad Larawi, a spokesman for the governor, said that American airstrikes had been called in for support, but that because of a misunderstanding, the planes mistakenly targeted an Afghan police outpost.
...
Haji Abdul Satar, a tribal elder from Azra, said he counted 19 dead, among them 17 Afghan police officers and pro-government militia members and two civilians.
...
In the first six months of this year, United States forces dropped nearly 3,000 bombs across Afghanistan, nearly double the number for the same period last year and more than five times the number for the first half of 2016. ... Civilian casualties from aerial bombardments have increased considerably as a result, the United Nations says.

One argument made by the Pentagon generals when they pushed Trump to allow more airstrikes was that these would cripple the Taliban's alleged opium trade and its financial resources. But, as the Wall Street Journal reports , that plan, like all others before it, did not work at all:

Nine months of targeted airstrikes on opium production sites across Afghanistan have failed to put a significant dent in the illegal drug trade that provides the Taliban with hundreds of millions of dollars, according to figures provided by the U.S. military.
...
So far, the air campaign has wiped out about $46 million in Taliban revenue, less than a quarter of the money the U.S. estimates the insurgents get from the illegal drug trade. U.S. military officials estimate the drug trade provides the Taliban with 60% of its revenue.
...
Poppy production hit record highs in Afghanistan last year , where they are the country's largest cash crop, valued at between $1.5 billion and $3 billion.

More than 200 airstrikes on "drug-related targets" have hardly made a dent in the Taliban's war chest. The military war planners again failed.

At the end of the Chivers piece its protagonist, Robert Soto, rightfully vents about the unaccountability of such military 'leaders':

Still he wondered: Was there no accountability for the senior officer class? The war was turning 17, and the services and the Pentagon seemed to have been given passes on all the failures and the drift. Even if the Taliban were to sign a peace deal tomorrow, there would be no rousing sense of victory, no parade. In Iraq, the Islamic State metastasized in the wreckage of the war to spread terror around the world. The human costs were past counting, and the whitewash was both institutional and personal, extended to one general after another, including many of the same officers whose plans and orders had either fizzled or failed to create lasting success, and yet who kept rising . Soto watched some of them as they were revered and celebrated in Washington and by members of the press, even after past plans were discredited and enemies retrenched.

Since World War II, during which the Soviets, not the U.S., defeated the Nazis, the U.S. won no war. The only exception is the turkey shooting of the first Gulf war. But even that war failed in its larger political aim of dethroning Saddam Hussein.

The U.S. population and its 'leaders' simply know too little about the world to prevail in an international military campaign. They lack curiosity. The origin of the Korengal failure is a good example for that.

U.S. wars are rackets , run on the back of lowly soldiers and foreign civil populations. They enriche few at the cost of everyone else.

Wars should not be 'a presumed government action', but the last resort to defend ones country. We should do our utmost to end all of them.


bjd , Aug 8, 2018 4:19:05 PM | 1

There is a fundamental misunderstanding in the lament ringing through in this story.

The policy makers and the generals do not care about Afghanistan, nor about American boys being sent and being killed there.

Any bombs spent means more bombs being ordered and manufactured. The Military-Industrial-Intelligence-Complex thus profits.

Those belonging to that complex do not belong to the same class as those boys in body bags.

In spite of these valuable insights like in this story, everything is going just hunky dory.

Mischi , Aug 8, 2018 4:34:28 PM | 2
you know, it is just as easy to influence a foreign society by making movies (Bollywood in this case) with a certain bent, the one you want people to follow. After a few years of seeing the Taliban as villains, there would be no fresh recruits and mass desertion. But, the weapons manufacturers wouldn't be making their enormous profits. This same effect can be seen in American society, where the movies coming out of Hollywood started becoming very aggressive in tone around the time that Ronald Reagan became president. Movies went from The Deer Hunter to Rambo and Wall Street. Is it any wonder that even the progressive Left in the USA thinks it is ok to attack their political adversaries and that violence is justified? This is the power of movies and the media.
Mark2 , Aug 8, 2018 4:45:09 PM | 3
Thank you 'b' this post as always is a true in depth education !
If you run for president of the United States of America enytime soon you'v got my vote !
karlof1 , Aug 8, 2018 5:09:38 PM | 4
bjd @1 highlights an important truth similar to that exposed by Joseph Heller in Cache-22 and by Hudson's Balance-of-Payments revelation he revealed yet again at this link I posted yesterday . Most know the aggressive war against Afghanistan was already planned and on the schedule prior to 911 and would have occurred regardless since after Serbia the Outlaw US Empire felt it could do and get away with anything. 911 simply provided BushCo with Carte-Blache, but it wasn't enough of a window to fulfill their desired destruction of 7 nations in 5 years for their Zionist Patron.

IMO, as part of its plan to control the Heartland, those running the Outlaw US Empire never had any plan to leave Afghanistan; rather once there, they'd stay and occupy it just as the Empire's done everywhere since WW2. The Empire's very much like a leech; its occupations are parasitic as Hudson demonstrated, and work at the behest of corporate interests as Smedly Butler so eloquently illustrated.

As with Vietnam, the only way to get NATO forces to leave is for Afghanis to force them out with their rifles. Hopefully, they will be assisted by SCO nations and Afghanistan will cease being a broken nation by 2030.

jayc , Aug 8, 2018 5:13:05 PM | 5
The Wall Street Journal article on the Taliban's ties to the local drug trade also the reveals deliberate omission practiced by the MSM, which keeps its readers actively misinformed. Estimating illegal drug revenues contribute as much as $200 million to the Taliban, the article fails to put that in proper context: that figure represents merely 7%-13% of total production receipts (estimated at 1.5 to 3 billion dollars). Most informed persons know exactly who reaps the rewards of more than 80% of the Afghan drug products, and why this much larger effort is not the focus of "targeted airstrikes."
Pft , Aug 8, 2018 5:17:07 PM | 6
1. "The wars fail because they no reasonable strategic aim or achievable purpose........
Since World War II, during which the Soviets, not the U.S., defeated the Nazis, the U.S. won no war. The only exception is the turkey shooting of the first Gulf war."

2 "U.S. wars are rackets, run on the back of lowly soldiers and foreign civil populations. They enriche few at the cost of everyone else"

Your points in 1 ignore the reality expressed by 2. The real strategic aims and purposes are not those provided for public consumption. Winning wars is not the objective, the length and cost of wars is far more important than results. Enriching and empowering the few over the many is the entire point of it all

And lets put an end to "US " responsibility for all evils. Its a shared responsibility. None of this is possible without the cooperation of Uk and its commonwealth nations, EU, Japan and the various international organizations that allow the dollar to be weaponized such as IMF/World Bank and BIS not to mention the various tax havens which support covert operations and looting of assets obtained in these wars (military or economic).

Until the rest of the world is prepared to do something about it they are willing accomplices in all of this.

The global elites are globalists, they dont think in national terms. Its a global elitist cabal at work that is hiding behind the cover of US hegemony.


Ash , Aug 8, 2018 6:01:26 PM | 7
b: "Wars should not be 'a presumed government action', but the last resort to defend ones country. We should do our utmost to end all of them."

Well said, sir.

ben , Aug 8, 2018 6:09:27 PM | 8
karlof1 @ 4 said:"The Empire's very much like a leech; its occupations are parasitic as Hudson demonstrated, and work at the behest of corporate interests as Smedly Butler so eloquently illustrated."

You bet.. The operative words being " work at the behest of corporate interests "

And so it goes around the globe. Question is; How to get this information to the herded bovines the general public has become?

Without a major network to disseminate such info, we're all just spinning our wheels. Oh, but, the therapy is good..

fast freddy , Aug 8, 2018 6:18:02 PM | 9
Very interesting stories - especially re: the timber mill warlord competition.

Defoliants are still used in warfare - especially "by accident". Carpet bombing is still legal. If NATO wanted to wipe out the poppies, it surely could do so.

Pft at 6, reminded me of this zinger:

The nation state as a fundamental unit of man's organized life has ceased to be the principal creative force: International banks and multinational corporations are acting and planning in terms that are far in advance of the political concepts of the nation-state. - The Brzez

Deltaeus , Aug 8, 2018 6:38:00 PM | 10
jayc @5 implies it, and I'll say it more directly: US soldiers guard poppy fields in Afghanistan. I'm also reminded of Alfred C McCoy's famous 1972 work The Politics of Heroin in Southeast Asia.

https://www.youtube.com/watch?v=FzQUsY6a_Ds
Why the US grows heroin in Afghanistan, from the movie War Machine

Piotr Berman , Aug 8, 2018 6:51:23 PM | 11
The nation state as a fundamental unit of man's organized life has ceased to be the principal creative force: International banks and multinational corporations are acting and planning in terms that are far in advance of the political concepts of the nation-state. - The Brzez

Posted by: fast freddy | Aug 8, 2018 6:18:02 PM | 9

This gem hides a deep truth. One has to replace "creative" and "far in advance", instead, we have power relationships. And those power relationships resemble central planning of the Communist states, concept that is attractive in abstraction, but centralization cannot cope with complexities of societies and economies, in part because the central institutions are inevitably beset by negative selection: people rise due to their adroit infighting skills rather than superior understanding of what those institutions are supposed to control. Ultimately, this proces leads to decay and fall. "Nation states" themselves are not immune to such cycles and are at different stages of the cycle creative-decadent-falling. However, international finance lacks observable "refreshing" mechanisms of nation states.

Kalen , Aug 8, 2018 6:54:16 PM | 12
War as always is financial racket, $trillion stolen, MIC thrives, took over with CIA all prerogatives of power and has million agents in US alone in every institution government and corporate.

I call it success of ruling elite. B war would stop tomorrow if it was unsuccessful read unprofitable for those who wage it. Nazi death camps were most profitable enterprises in third Reich.

Curtis , Aug 8, 2018 7:22:43 PM | 13
For some reason, when the US wars are admitted to be civil wars, no one questions whose side did the US take until it is too late and so very few tune in. Incompetence is the excuse. It reminds me of that adage to not blame on malice that which can be explained by stupidity but stupidity has been used to excuse a lot of malice. It's one reason why "military intelligence" resides at the top of oxymorons along with "congressional ethics" and "humanitarian intervention."

It is amazing to think that the US has been in Afghanistan for 17 years and supposedly knows where the opium and its processors are and yet could not take it out. (The pix of soldiers patrolling poppy fields is rich.) The initial excuse years ago was that the US needed to support the warlords who grew/sold it. What is the excuse now? Incompetence, corruption, laziness?

The US likes the idea of opium products going into Iran and Russia ... who have protested to no avail. A bit of indirect subversion.

Ian , Aug 8, 2018 7:27:07 PM | 14
@13:

The adage is Hanlon's Razor. There should be a joint air operation to bomb those poppy fields.

goldhoarder , Aug 8, 2018 7:33:26 PM | 15
US wars are rackets. They are very successful in that regard. It doesn't matter what people think about them.
fast freddy , Aug 8, 2018 7:50:42 PM | 16
The US likes opium products going into the US. It makes for broken citizens who lack zeal for knowledge, and therefore, comprehension; and the will to organize against the PTB. Importantly, being illegal, opiate use feeds the pigs who own the prison-industrial complex.
par4 , Aug 8, 2018 7:50:56 PM | 17
The Taliban had virtually eradicated opium when they controlled Afghanistan. Try this link or or this one.
fast freddy , Aug 8, 2018 7:55:40 PM | 18
https://www.thenation.com/

article/bushs-faustian-deal-taliban/

In April 2001, 5 months prior to nine elva, $43 million was gifted to the Taliban in Afghanistan for the stated purpose of eradicating opium.


karlof1 , Aug 8, 2018 8:09:38 PM | 19
ben @8--

Given the current, longstanding dynamics within the Outlaw US Empire, I don't see any possibility of the required reforms ever having an opportunity to get enacted. The situation's very similar to Nazi Germany's internal dynamic--the coercive forces of the State and its allies will not allow any diminution of their power. Within the Empire, thousands of Hydra heads would need to be rapidly severed for any revolt to succeed, and that requires a large, easily infiltrated organization to accomplish. Invasion by an allied group of nations invites a nuclear holocaust I can't condone. I think the best the world can do is force the Empire to retreat from its 800+ bases and sequester it behind the Atlantic and Pacific Oceans until it self-destructs or drastically reforms itself--Containment. But for that to work, almost every comprador government would need to be changed and their personages imprisoned, exiled or executed--another close to impossible task. Ideally, the ballot box would work--ideally--but that requires deeply informed voters and highly idealistic, strongly principled, creative, and fearless candidates, along with an honest media.

Yeah, writing can be good therapy. But I'm no more cheery than when I began. Must be time for intoxicants.

b4real , Aug 8, 2018 8:20:04 PM | 20
@6 Pft

"Until the rest of the world is prepared to do something about it..."

What is this 'something' of which you speak?

b4real

vk , Aug 8, 2018 8:26:25 PM | 21
More than 200 airstrikes on "drug-related targets" have hardly made a dent in the Taliban's war chest. The military war planners again failed.

Or did they?

Jen , Aug 8, 2018 9:11:48 PM | 22
Karlofi @ 19:

The world does not need to force the Evil Empire to retreat from its 1,000 (and counting) military bases around the planet.

All the world needs to do is trade with Iran, Venezuela or some other outsider nation. The Evil Empire will be so busy trying to punish everyone who trades with these countries by extending sanctions against the outsiders to their trading partners that the Empire effectively ends up having sanctioned everyone away and it becomes the victim of its sanctioning.

The 1,000+ military bases around the globe are then effectively on their own and the soldiers and administrators inside can either stay there and starve, throw in their lot with the host nation's citizenry or beg to be allowed to return home.

james , Aug 8, 2018 9:22:13 PM | 23
thanks b... as long as the americans support the troops, lol - all will be well apparently... jesus.. meanwhile - the support for the 1% bomb makers and etc continues... maybe it is the mutual fund money that folks are concerned about maintaining..

"In the first six months of this year, United States forces dropped nearly 3,000 bombs across Afghanistan." what is that? about 17 or 18 bombs a day or something? what about the drones? they have to be put to use too... best to get someone who is involved in their own turf war in afgan to give out the targets.. brilliant... usa war planning is mostly destroy and destroy and honour the troops and wave their stupid american flag and that is about it... sorry, but that is what it looks like to me..

Jason , Aug 8, 2018 9:32:50 PM | 24
its not so much they want to end the war on terror or the war on drugs.........they just want to say one thing to cover their asses and do another thing completely..

no matter what there should of been one general who got it right.....but we see it was never about peace .... it was always about war and its profits. anyone who didn't take orders or even had a hint of the right strategy would be Hung like dirty boots to dry.

what is the right strategy? leave. just as other empires did. before you call on your faces

to be even more frank....its not even about the money as that is not as important than having a nation of 300m regurgitate the news that they are there for 17 years to be the police of the world. because USA are the good ones... that they need to buy the biggest trucks which can't even fit in normal parking spaces because they have land mines(I mean ieds...) to avoid and need to haul 5tons of cargo to their construction job all while watching out for terrorists and trump Hillary divisions. is disorienting and it is deliberate. just as having a war last without a reason is deliberate while they entertain the masses with games..

dh , Aug 8, 2018 9:35:25 PM | 25
@23 "...maybe it is the mutual fund money that folks are concerned about maintaining.."

Definitely a big factor james. Unfortunately a lot more than 1% of the US population depends on the MIC for their livliehood.

james , Aug 8, 2018 9:38:08 PM | 26
@23dh... same deal here in canuckle head ville... people remain ignorant of what there money is ''''invested'''' in... could be saudi arabia for all the canucks think... btw - thanks for the laugh on the other thread... you made a couple of good jokes somewhere the past few days! i don't have much free time to comment at the moment..
pogohere , Aug 8, 2018 9:39:10 PM | 27
par4:

McCoy, in "The Politics of Heroin" gives a more complete picture:

In 1996, following four years of civil war among rival resistance factions, the Taliban's victory caused further expansion of opium cultivation. After capturing Kabul in September, the Taliban drove the Uzbek and Tajik warlords into the country's northeast, where they formed the Northern Alliance and clung to some 10 percent of Afghanistan's territory. Over the next three years, a seesaw battle for the Shamali plain north of Kabul raged until the Taliban finally won control in 1999 by destroying the orchards and irrigation in a prime food-producing region, generating over 100,000 refugees and increasing the country's dependence on opium.

Once in power, the Taliban made opium its largest source of taxation. To raise revenues estimated at $20-$25 million in 1997, the Taliban collected a 5 to 10 percent tax in kind on all opium harvested, a share that they then sold to heroin laboratories; a flat tax of $70 per kilogram on heroin refiners; and a transport tax of $250 on every kilogram exported. The head of the regime's anti-drug operations in Kandahar, Abdul Rashid, enforced a rigid ban on hashish "because it is consumed by Afghans, Muslims." But, he explained, "Opium is permissible because it is consumed by kafirs [unbelievers] in the West and not by Muslims or Afghans." A Taliban governor, Mohammed Hassan, added: "Drugs are evil and we would like to substitute poppies with another cash crop, but it's not possible at the moment because we do not have international recognition."

More broadly, the Taliban's policies provided stimulus, both direct and indirect, for a nationwide expansion of opium cultivation. . . Significantly, the regime's ban on the employment and education of women created a vast pool of low-cost labor to sustain an accelerated expansion of opium production. . . . In northern and eastern Afghanistan, women of all ages played " a fundamental role in the cultivation of the opium poppy"---planting, weeding, harvesting, cooking for laborers, and processing by-products such as oil. The Taliban not only taxed and encouraged opium cultivation, they protected and promoted exports to international markets.

In retrospect, however, the Taliban's most important contribution to the illicit traffic was its support for large-scale heroin refining.
. . .
Instead of eradication, the UN's annual opium surveys showed that Taliban rule had doubled Afghanistan's opium production from 2,250 tons in 1996 to 4,600 tons in 1999--equivalent to 75 percent of world illicit production. (508-509)
. . .

War on the Taliban

All this [heroin] traffic across Central Asia depended on high-volume heroin production in politically volatile Afghanistan. In July 2000, as a devastating drought entered its second year and mass starvation spread across Afghanistan, the Taliban's leader Mullah Omar ordered a sudden ban on opium cultivation in a bid for international recognition. (p.517)

dh , Aug 8, 2018 9:53:59 PM | 28
@26 I've been following the Canada/Saudi spat. I guess Justin has his own reasons for what he said but he certainly pissed MBS off.

Doesn't look like Donald wants to mediate. Perhaps Justin will have better luck with Teresa.

Pft , Aug 8, 2018 10:05:34 PM | 29
B4real@20

Dealing with their own elites for a start

james , Aug 8, 2018 10:17:03 PM | 30
@28 dh... usa daily propaganda press briefing had a few things to say - https://www.state.gov/r/pa/prs/dpb/2018/08/285028.htm
folktruther , Aug 8, 2018 10:27:00 PM | 31
B's article assumes that the operative purpose of the US military is to win wars. This isn't the case. The US military largely a business enterprise whose objective is to make money for the plutocracy that largely controls them. That being the case, the Afghanistan war has been a great success. If the US 'won' it, it would cease; if the Taliban conquered, it would cease. In this form of military stagnation it continues, and the money roles in making the ammunition, equipment, etc.

The military budget is largely an institution for transferring the tax money of the population from the people to the plutocracy. Military stagnation serves this purpose better than winning or losing.

Hoarsewhisperer , Aug 8, 2018 10:38:55 PM | 32
If there is one standout factor which makes makes all this profitable mayhem possible then it's the successful campaign by the Elites to persuade the Public that Secrecy is a legitimate variation of Privacy.
It is not.

Impregnable Government Secrecy is ALWAYS a cover for erroneous interpretations of an inconvenient Law - or straight-out cover for criminal activity.
It's preposterous to believe that a government elected by The People has a legitimate right to create schemes which must be kept Secret from The People.
This is especially true in the case of Military/Defense. There wouldn't be a CIC on earth who doesn't have up-to-date and regularly updated info on the hardware and capabilities of every ally and every potential foe. The People have a legitimate right to know what the CIC, and the rest of the world, already knows.

And that's just the most glaring example of the childish deception being perpetrated in the name of Secrecy. If governments were to be stripped of the power to conduct Our affairs in Secret then the scrutiny would oblige them to behave more competently. And we could weed out the drones and nitwits before they did too much damage.

dh , Aug 8, 2018 10:41:21 PM | 33
@30 Right. I notice they avoid mentioning the Badawis who are central to the issue. I guess helping Justin out isn't very high on Donald's list of priorities.
the pair , Aug 8, 2018 11:41:17 PM | 34
i forget who said it and the exact phrasing, but the best explanation i've seen is "why is the US there? it answers itself: to be there".

vast opium money for the deep state vermin.

profits for the bomb makers (you know, the respectable corporate ones as opposed to the quaint do-it-yourselfers).

lithium deposits that probably rival those in bolivia as well as other untapped profitable resources (probably, anyway; i could see oil and gas coming out of those ancient valleys).

it's also an occupation as opposed to a "win and get out" war. these military welfare queens think they can win a staring contest with the descendants of people who bitchslapped every would-be conqueror since alexander the great. ask the russians how well that went for them.

the west supports israel's 70+ years of colonizing palestine (plus the 3 or 4 decades of dumbness before it with balfour and such) and still has troops in south goddamn korea. as long as the tap flows they'll keep drinking that sweet tasty tax welfare.

[Aug 07, 2018] Bill Black Pre-Crisis 4506-T Studies Showed Massive Fraud in Liar's Loans; Fed Ignored Warning, DoJ Refused to Target Implic

Notable quotes:
"... By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Jointly published with New Economic Perspectives ..."
"... New Economic Perspectives ..."
"... The Pentagon Wars ..."
"... The Generals ..."
"... The Chickenshit Club ..."
Aug 07, 2018 | www.nakedcapitalism.com

Bill Black: Pre-Crisis "4506-T Studies" Showed Massive Fraud in Liar's Loans; Fed Ignored Warning, DoJ Refused to Target Implicated Banksters Posted on August 7, 2018 by Yves Smith Yves here. With the tsunami of "ten years after the crisis" stories that are already starting to hit the beach, I am endeavoring to focus on ones that contain new or significantly under-reported information or give particularly insightful overviews. Here Black gives a telling example of both how the authorities were warned of massive mortgage fraud and ignored it, and then later failed to use the same evidence to pursue the perps.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Jointly published with New Economic Perspectives

Steven Krystofiak formed the Mortgage Brokers Association for Responsible Lending, a professional association dedicated to fighting mortgage fraud and predation. On August 1, 2006. He tried to save our Nation by issuing one of the most prescient warnings about the epidemic of mortgage fraud and predation and the crisis it would so cause.

The context was Congress' effort to empower and convince the Federal Reserve to take action against what the mortgage lending industry called, behind closed doors, "liar's" loans. A liar's loan is a loan in which the lender does not verify (at least) the borrower's actual income. The industry knew that the failure to verify inherently led to endemic fraud. George Akerlof and Paul Romer's 1993 article on "Looting" by financial CEOs explicitly cited the failure to verify the borrower's income as an example of a lending practice that only fraudulent lenders would use on a widespread basis.

Congress gave the Fed the unique authority to ban all liar's loans in 1994, by passing the Home Ownership and Equity Protection Act (HOEPA). HOEPA gave the Fed the authority to ban liar's loans even by "shadow" sector financial firms that had no federal deposit insurance.

Liar's loans began to become material around 1989 during the savings and loan debacle where all good U.S. financial frauds are born – Orange County, California. In that era, they were called "low documentation" ('low doc') loans. We (the West Region of the Office of Thrift Supervision (OTS), were the federal regulator for these S&Ls, and we were overwhelmed dealing with the "control frauds" driving the debacle, who overwhelmingly used commercial real estate (CRE) as their accounting "weapon" of choice. Our examiners, however, made two critical points. No honest lender would make widespread loans without verifying the borrower's income because it was certain to produce severe "adverse selection" and produce serious losses. The examiners' second warning was that such loans were growing rapidly in Orange County and multiple lenders were involved.

We listened and responded well to our examiners' timely and sound warnings and made it a moderate priority to drive liar's loans out of the industry we regulated. The last of the major fraudulent S&L liar's loan lenders was Long Beach Savings. Long Beach set a common pattern for fraudulent lenders by also engaging in predation primarily against Latinos and blacks. In 1994, the same year HOEPA became law; Long Beach voluntarily gave up federal deposit insurance and its charger as a savings and loan. Long Beach's controlling owner, Roland Arnall, did this for the sole purpose of escaping our regulatory jurisdiction and our ability to examine, sue, and sanction the S&L and its officers. Arnall changed its name to Ameriquest, and converted it to a mortgage bank. Mortgage banks were essentially unregulated. Arnall successfully sought sanctuary in what we now call the "shadow" financial sector. The S&L debacle did not end. It found sanctuary in the Shadow and grew 50% annually for 13 years.

Ameriquest and its leading mortgage bank competitor, run by former S&L officers we (OTS) had "removed and prohibited" from working in any federally insured lender, became the leading "vectors" spreading the epidemic of fraudulent liar's loans through (initially) the shadow sector and later back into federally insured lenders. Many of Arnall's lieutenants eventually left Ameriquest to lead other fraudulent and predatory lenders making predatory liar's loans. Michael W. Hudson's book, The Monster , is a great read that presents this history. Ameriquest and its fraudulent and predatory peers grew at extraordinary rates for over a decade. They hyper-inflated the bubble and drove the financial crisis.

Alan Greenspan and Ben Bernake refused to use HOEPA to stop this surging epidemic of fraudulent and predatory liar's loans. This was the setting when Krystofiak, on his own dime and initiative took advantage of a Fed hearing on predatory lending near his home to warn us all of the coming disaster. Krystofiak was not the first warning. His written testimony cited the appraisers' and the FBI's prior warnings. The appraisers' 2000 petition explaining how lenders and their agents were extorting appraisers to inflate appraisals was superb. Chris Swecker's 2004 warning on behalf of the FBI that the developing "epidemic" of mortgage fraud would cause a financial "crisis" if not stopped was superb.

Krystofiak was also superb. The Fed did not want to conduct hearings on fraudulent and predatory liar's loans – Congress forced it to do so. The Fed's Board members were not interested in stopping fraudulent and predatory liar's loans. The Fed did not invite Krystofiak to testify. The Fed offered only a brief "cattle call" at the end of the hearing allowing (after a top Fed official had left to fly back to DC) the public to make a very brief statement.

The Fed's treatment of Krysofiak stood in sharp contrast to its fawning treatment of the Mortgage Bankers Associations' chosen witness. The MBA chose the leading originator of fraudulent liar's loans in California – IndyMac – to present the MBA's position. The MBA's position was that the Fed should not use its HOEPA authority to ban fraudulent and predatory liar's loans. The Fed officials cracked jokes with and treated the IndyMac officer like an old pal. They treated Krytofiak with cold indifference. The MBA witness presented utter BS. Krystofiak spoke truth to power. Power loved the BS. The truth discomfited the Fed officials.

Krytofiak's written testimony made many vital points, but I refer to only two related points here. First, he warned the Fed that the twin mortgage fraud origination epidemics – appraisal fraud and liar's loans – were so large that they were inflating the housing bubble. Second, his means of quantifying the incidence of liar's loan fraud showed the regulators and the prosecutors that they could use the same method to document reliably, cheaply, and quickly the incidence of liar's loan fraud at every relevant financial firm.

Data Collected by the Mortgage Brokers Association for Responsible Lending

A recent sample of 100 stated income loans which were compared to IRS records (which is allowed through IRS forms 4506, but hardly done) found that 90 % of the income was exaggerated by 5 % or more. MORE DISTURBINGLY, ALMOST 60 % OF THE STATED AMOUNTS WERE EXAGGERATED BY MORE THAN 50%. These results suggest that the stated income loans deserves the nickname used by many in the industry, the "liar's loan" (emphasis in original).

The MBA's anti-fraud experts, MARI, appears to have conducted the study for Krystofiak. They featured the 4506-T (the "T" stands for "transcript") study and its finding of a 90% fraud incidence in liar's loans. In 2006, MARI presented its fraud study at the MBA's annual meeting. The MBA sent MARI's report to every member, which included all the major mortgage players.

Any honest originator, purchaser, or packager of liar's loans was on notice no later than mid-2006 that they could determine quickly, cheaply, and reliably the fraud incidence in those liar's loans by using the 4506-T forms to test a sample of those loans. Krystofiak aptly noted that while lenders typically required borrowers to sign the IRS 4506-T form allowing the lender to access their tax information, it was actually "hardly done." Lenders supposedly require the 4506-T because taxpayers have an obvious interest in not inflating their income to the IRS. The self-employed have to report their income accurately or face potential tax fraud sanctions.

The reason liar's loan mortgage lenders, purchasers, the packagers of toxic collateralized debt obligations (CDOs ) that typically were composed of large amounts of liar's loans, and credit rating agencies, "hardly [ever] used" or required the sellers to use their 4506-T authority is also clear if you understand "accounting control fraud." Any 4506-T study of liar's loans will document their pervasive frauds. Virtually all liar's loan and CDO sales required "reps and warranties" that they were not fraudulent. If a firm making or selling liar's loans conducted a 4506-T study and documented that it knew its reps and warranties were false, and it continued t make, sell, package, or rate those fraudulent loans under false reps and warranties it would be handling its counterparty a dream civil fraud suit. They would be handing DOJ the ability to prosecute them successfully for felonies that caused hundreds of billions of dollars in losses. The fraudulent mortgage money machine relied on the major players following a financial "don't ask; don't tell" policy.

The exceptions prove the rule. I have found public evidence of only two cases in which mortgage players (other than Krystofiak) conducted 4506-T audits of liar's loans. I have never found public evidence that any federal regulator or prosecutor conducted or mandated a 4506-T study. The two known cases of 4506-T audits were Wells Fargo (just disclosed by DOJ) and Countrywide (disclosed by the SEC investigation and complaint). Both audits found massive fraud incidence in the liar's loans. The risk officers presented these audit results to the banks' senior managers.

Bank Whistleblowers United's 4506-T Proposal

Two and-a-half years ago, Bank Whistleblowers United (BWU) discussed the senior officers of Countrywide's response to its 4506-T audit. We noted that BWU co-founder Michael Winston blew the whistle on Countrywide's frauds to the bank's most senior officers to try to prevent these frauds. Mr. Winston eagerly aided potential prosecutors – who failed to prosecute Countrywide's senior officers leading the frauds. BWU then explained the analogous response of Citigroup's senior officers to a different but equally reliable audit conducted by BWU co-founder Richard Bowen. We did so in a January 30, 2016 New Economic Perspectives blog urging presidential candidates in the 2016 election to pledge to implement the 60-day BWU plan to restore the rule of law to Wall Street.

As documented in the SEC complaint, Countrywide's managers conducted a secret internal study of Countrywide's liar's loans that, on June 2, 2006, confirmed Krystofiak's findings of endemic fraud in liar's loans. Fraud was the norm in Countrywide's liar's loans, a fact that it failed to disclose to its stockholders and secondary market purchasers. Instead of stopping such loans, Countrywide's senior officers caused it to adopt what they termed "Extreme Alt-A" loans offered by Bear and Lehman that "layered" this fraud risk on top of a half dozen additional massive risks to create what Countrywide's controlling officer described as loans that were "toxic" and "inherently unsound." "Alt-A" was the euphemism for liar's loans. Countrywide made massive amounts of "Extreme Alt-A" and acted as a vector spreading these "toxic" loans throughout the financial system. A member of our group, Dr. Michael Winston, tried to stop these kinds of abuses, which enriched top management but bankrupted Countrywide.

Similarly, a member of our group, Richard Bowen and his team of expert underwriters, documented that Citigroup knew that it was purchasing tens of billions of dollars of loans annually on the basis of fraudulent "reps and warranties" – and then reselling them to Fannie and Freddie on the basis of fraudulent reps and warranties. Bowen put the highest levels of Citigroup (including Bob Rubin) on personal notice in writing as the incidence of fraud climbed from 40% to 60%. (It eventually reached an astonishing 80% fraud incidence.) Citigroup's leadership's response was to remove his staff. Senior Citigroup officers also responded to the surging fraud by causing Citigroup to become a major purchaser of fraudulently originated liar's loans.

We can now add the senior leaders that determined Wells Fargo's response to its 4506-T audit. We draw on the Department of Justice (DOJ) disclosures in conjunction with its indefensible settlement of civil fraud claims against Wells Fargo's massive mortgage fraud. The DOJ press release revealed that "in 2005, Wells Fargo began an initiative to double its production of subprime and Alt-A loans." DOJ did not explain that this was after the FBI warned there was an emerging "epidemic" of mortgage "fraud" that would cause a financial "crisis" if it were not stopped. The settlement discloses that Wells' risk officers alerted senior managers that the plan to increase greatly the number of liar's loans would greatly increase fraud in 2005 before Wells implemented the plan.

The press release had other bombshells (unintentionally) demonstrating the strength of the criminal cases that DOJ refused to bring against Wells' senior officers. Wells Fargo's 4506-T audit found that its liar's loans were endemically fraudulent, and the amount of inflated income was extraordinary.

The results of Wells Fargo's 4506-T testing were disclosed in internal monthly reports, which were widely distributed among Wells Fargo employees. One Wells Fargo employee in risk management observed that the "4506-T results are astounding" yet "instead of reacting in a way consistent with what is being reported WF [Wells Fargo] is expanding stated [income loan] programs in all business lines."

The press release note some other actions by Wells' senior managers that show what prosecutors term "consciousness of guilt." Such actions make (real) prosecutors salivate. The press release's final substantive revelation is the unbelievable rate of loan defaults on Wells Fargo's fraudulent loans and the exceptional damages those loans and sales caused.

Wells Fargo sold at least 73,539 stated income loans that were included in RMBS between 2005 to 2007, and nearly half of those loans have defaulted, resulting in billions of dollars in losses to investors.

Typical default rates on conventional mortgages averaged, for decades, around 1.5 percent. The Wells Fargo liar's loans defaulted at a rate 30 times greater.

How Corrupt is Wells? Cheating Customers is "Courageous"

The press release does not contain the Wells Fargo gem that proves our family rule that it is impossible to compete with unintentional self-parody. Paragraph H of the settlement reveals that Wells' term for doubling its number of fraudulent liar's loans in 2005 was "Courageous Underwriting." Wells' senior managers changed its compensation system to induce its employees to approve even worse loans. Calling defrauding your customers "courageous" epitomizes Wells Fargo's corrupt culture built on lies and lies about lies.

DOJ's pathetic settlement with Wells Fargo has no admissions by the bank. It does not require a penny in damages from any bank officer. It does not require a bank officer to return a penny of bonuses received through these fraudulent loans. The settlement contains DOJ's statement that its investigation found that Wells' violated four federal criminal statutes. DOJ will continue to grant de facto immunity from prosecution to elite banksters. The Trump administration has again flunked a major test dealing with the swamp banksters.

Section H (b) of the settlement is factually inaccurate in a manner that makes it highly favorable to fraudulent lenders making liar's loans. There is no indication that DOJ ever investigated Wells' fraudulent loan origination practices. It was overwhelmingly lenders and their loan brokers that put the lies in liar's loans. DOJ's settlement documents do not refer to Wells whistleblowers, even though and competent investigation would have identified dozens of whistleblowers. Throughout its Wells documents, DOJ implies that borrowers overstated their income rather than Wells and its loan brokers.

The Jig is Up on DOJ's Pathetic Excuses for Refusing to Jail Elite Bank Frauds

We now know with certainty from the whistleblowers and the internal audits that the response of Citigroup, Countrywide, and Wells Fargo's senior leaders to knowing that most of their liar's loans and the reps and warranties they made about those loans were fraudulent. We know with certainty that Michael Winston and Richard Bowen's disclosures were correct. We know with certainty that each served up to DOJ on a platinum platter dream cases for prosecuting Citigroup and Countrywide's top managers. The senior managers' response to proof that their banks were engaged in endemic fraud makes sense only if the senior managers were leading an "accounting control fraud," which enriches the managers by harming the lender.

When the appraisers' warned of extensive extortion by lenders and their agents to inflate appraisals, when the FBI warned that mortgage fraud was becoming "epidemic" and would cause a financial "crisis" if not halted, and when the MBA publicized Krystofiak and MARI's warnings that liar's loans were endemically fraudulent, the fraudulent CEOs' response was always the same. In each case, they expanded what they knew were endemically fraudulent liar's loans and increased the extortion of appraisers.

Back to BWU's 4506-T Proposal

This brings us back to reminding the public what BWU proposed 32 months ago about 4506-T audits. Point 17 of our 60-day plan began:

Within 60 days, each federal financial regulatory agency directs any bank that it regulates to conduct and publicly report a "Krystofiak" study on a sample of "liar's" loans that they continue to hold. Krystofiak devised a clever study that he presented to the Federal Reserve in an unsuccessful attempt to try to get the Fed to stop the epidemic of fraudulent liar's loans. Lenders and secondary market purchasers routinely required borrowers to authorize the lender and any subsequent purchaser of the loan to obtain a "transcript" (4506-T) of the borrower's tax returns from the IRS to allow the lender to quickly and inexpensively verify the borrower's reported income.

Other parts of our 60-day plan called for DOJ appointees with the courage, integrity, and skills to restore the rule of law to Wall Street. We also explained the needs (and means) for the banking regulators to conduct the investigations (such as 4506-T audits), activate a legion of whistleblowers, and make the criminal referrals to DOJ essential to bring successful prosecutions.

Conclusion

Had the regulators (particularly the Fed through its HOEPA power) required each bank making liar's loans to conduct a 4506-T audit, the senior managers would have faced a dilemma. They could stop the fraudulent lending or provide DOJ with a great opportunity to prosecute them. The bank CEOs' response to the internal audits showing endemic fraud and the retaliation against the whistleblowers combine to offer superb proof of senior managers' 'specific intent' to defraud. The reasons for the failure to prosecute were some combination of cowardice and politics. If Democrats win control of the House they can use their investigative powers to force each bank regulator to cause every relevant financial institution to conduct a 4506-T audit.

Of course, the Republican Senate and House chairs could order those steps today . We are not holding our breath, but BWU's co-founders are eager to aid either, or both, parties restore the rule of law to Wall Street. Instead, we are rapidly creating an intensely criminogenic environment on Wall Street that will eventually cause a severe financial crisis.


Hayek's Heelbiter , August 7, 2018 at 5:35 am

Did John Stumpf (President of Wells Fargo 2007-2016) really say, "If one family loses their home, it is a tragedy. If ten million people lose their homes, it is a statistic?"

Tinky , August 7, 2018 at 6:33 am

Even by Black's lofty standards, this is an outstanding article. The fact that it won't be published in the mainstream media, and that the vast majority of regulators and politicians will ignore it, underscores once again just how broken and corrupted the American political and economic systems are.

Colonel Smithers , August 7, 2018 at 7:54 am

Thank you, Tinky.

It's the same in the UK with regard to mortgage fraud and reporting.

A colleague, brought in from the regulator to clean up our German basket case TBTF's brief and late in the day foray into the mortgage market, said the UK mortgage market was as corrupt / fraudulent. The same US firms were involved in many, if not most, cases. Lehman had an outpost, Ascendant, in my home county, Buckinghamshire, for such activity. Lehman, Merrill and Citi carved out the UK on geographical lines. One (US) firm was given the name of the Germanic tribe that settled in the area 1500 years before.

readerOfTeaLeaves , August 7, 2018 at 11:34 am

Agree about the excellence of this post.

FWIW, the kinds of government errors, cowardice, and confusions that Black relates – on top of having taxpayers foot the bill for it all – was a key factor IMVHO in people voting Trump as a kind of protest vote. He talks about 'fake news' to a huge number of Americans who faked income, or approved fake income.

The rest of us, I assume, continue to seethe and are supporting 'honest money, fair wages/salary' candidates like Warren and Sanders.

flora , August 7, 2018 at 11:54 am

+1

Tom Stone , August 7, 2018 at 7:49 am

In early 2005 I was working as a loan Broker when I met the World Savings rep or the first time.
The first words out of his mouth were a warning not to take more than 3 pints on the back end because it was greedy, the second sentence was "If there's a problem with the income the underwriter will drop the file on my desk, I'll call you and we'll fix it".
He's still in the business, a few rungs further up the corporate ladder, I got out of the business the following week.

Peter Pan , August 7, 2018 at 10:31 am

If Democrats win control of the House they can use their investigative powers to force each bank regulator to cause every relevant financial institution to conduct a 4506-T audit.

The establishment democrats that receive donor dollars from Wall Street banks? I wouldn't hold my breath waiting for them to even investigate much less do anything else to stop this criminal activity.

Otherwise another excellent post by Bill Black.

Tomonthebeach , August 7, 2018 at 3:31 pm

Also, is there a statute of limitations on this fraud? If so, both parties might just be running out the clock.

crittermom , August 7, 2018 at 7:43 pm

+1

Bewildered , August 7, 2018 at 10:41 am

Fabulous piece as usual from Mr. Black. Just makes the tenure of the previous administration all the more complicit in the current state of affairs. As Mr. Black details there was an obvious solution to uncover the fraud and go after senior execs, something that also could have also been done when the 'democrat' party held the House and at least a leverage position in the Senate. What the American public received instead was a giant con job/cover-up advertised as restitution and Obama goes on national TV to pathetically claim that grossly fraudulent behavior was simply unethical. Obviously that maneuver had a higher ROI for post-tenure legacy building and fundraising.

georgieboy , August 7, 2018 at 10:50 am

Wells Fargo -- doing it the Warren Buffet way! For that matter, Goldman Sachs -- doing it the Warren Buffet way!

Superb summary by Mr. Black, thanks Yves.

Bottom Gun , August 7, 2018 at 11:10 am

There is really a simple solution: fire everyone at DOJ and replace them with Air Force officers.

An Air Force officer is brave. He will fly through enemy fire if he has to in order to do his job. He gives no thought to the Taliban career opportunities that he might be forgoing by bombing them.

An Air Force officer is competent. He can fly through thunderstorms in the dead of night and get his bombs when and where the forward air controller down with the infantry needs them. Compare that to the experience of an honest IG official trying to get an indictment from DOJ for anyone at a mega-bank.

An Air Force officer knows how to get funding for his priorities. The Air Force annual budget, at $156 billion, is about 5 times that of DOJ. Enough said.

When you know these facts, the solution is obvious.

Kevbot5000 , August 7, 2018 at 4:36 pm

Go read The Pentagon Wars or Coram's Boyd . Air Force (or other service) officers have no particular claim to virtue. If you pulled mostly captains maybe it'd work, but the bravery and competence needed on the front line is vastly different from that needed from say a Colonel or General running programs/units which is likely the officers you'd be bringing in. Remember you're advocating bringing in people responsible for the boondoggle that is the F35 to shape up an organization. (which is not an isolated instance but emblematic of the upper tiers of the service)

Bottom Gun , August 7, 2018 at 8:00 pm

Thanks for the referrals; let me take a look. (I have read Thomas Ricks' The Generals , which I suspect makes a similar point to those.) The point is acknowledged, although I have not only read The Chickenshit Club but lived through it. There were many DOJ people I had to deal with whom I can only describe using Bundy's pungent phrase for the South Vietnamese political leadership: "the absolute bottom of the barrel." They contrasted starkly with the fellow junior officers I knew in my youth, but as you noted, those were junior officers.

Susan the other , August 7, 2018 at 12:08 pm

The simplicity of the 4506-T audits is as profound as the physics comparison of the diversity of the economy to GDP. These things don't work when all the chaos comes home to roost. In 1989 our economy was on the rocks and our corporations were offshoring as fast as they could; the USSR collapsed and we landed like a murder of crows to pick their bones and loot Russia. OPEC was naming their price; China was exporting massive deflation; our banks were already on the brink. But how to bring home all the loot from not just Russia but all the other illegal sources connected with our once and future imperialism? We were no longer a country of laws; we were looters, thieves and launderers. We were trying to salvage our "investments" or we were hoovering up flight capital or some other thing that had nothing to do with law and order and democracy. You name it. How else did all the banks, all of them, agree to forego their own standards and make all those conveyor belt loans? They prolly all had to become industrial laundromats and get rid of the stuff asap. Which was perhaps only one aspect to the ongoing collapse of "capitalism" as we once knew it – but were unable to protect it. I love Bill Black because he makes me come to uncomfortable explanations who knows how it all fell apart? Somebody does.

templar555510 , August 7, 2018 at 2:34 pm

Superb comment Susan. I make know how ' it all fell apart ' other than recognising that the early capitalists worked with stuff that had to be produced, and so despite vile excesses produced something useful to many , whereas these financial capitalists produce nothing of value to anyone except themselves and take away something from everybody else ( liar's loans being a key example ) . The question is , is there any here beyond here ? Clearly not with ANY of the present political incumbents ( I am in the UK it's the same for you and us ) . So that in two sentences is my answer to your question . My question is ' how on earth do we get beyond here ?'

Chauncey Gardiner , August 7, 2018 at 12:18 pm

Re Bill Black: " Instead, we are rapidly creating an intensely criminogenic environment on Wall Street that will eventually cause a severe financial crisis."

By design and intent with no fear of criminal prosecution for fraud, imprisonment, or even surrender of ill-gotten personal financial gains. All brought to us courtesy of the political donor class and large corporations, those they have corrupted, and the Supreme Court's Orwellian-named Citizens United decision and expanded executive branch powers that make it possible.

Look at any set of issues: Failure to pass and implement policies to address climate change, endless wars, defunding public education and infrastructure, the opioid crisis, manipulation of financial markets, federal government austerity, transfers of public lands and resources into private hands, privatization of public services, healthcare, stagnant real wages, loss of any semblance of economic equality, debt burdens placed on our young people seeking economic opportunity or family formation, lack of legal separation of bank depository and payments system functions from their market speculations, failure to enforce corporate antitrust laws, erosion of privacy and civil liberties, repeated bubbles, concentration of media ownership in the hands of a few, secret international tax havens, etc. and what do you see?

Tim , August 7, 2018 at 12:22 pm

In case you need comedy – George Carlin The Death Penalty from 1996

https://youtu.be/qDO6HV6xTmI

crittermom , August 7, 2018 at 8:02 pm

Thanks, Tim. Comedy was exactly what I needed after Bill Black's excellent article. (One of his best, IMHO)

I saw George Carlin in person at a small theater in Denver long ago. He was great, & still cracks me up.

shinola , August 7, 2018 at 12:49 pm

With the latest disclosures about WF stealing directly from their banking customers on top of their previous frauds, I'm just sure the regulators will come down hard on them this time (NOT!)

I wonder if Mr. Trump, with his involvement in commercial RE, ever "mis-stated" his his income, assets and/or liabilities when obtaining a loan. Nah, couldn't happen.

Tomonthebeach , August 7, 2018 at 3:37 pm

I wonder why anybody still banks with WF. My late mom had about 30K in a WF account under a trust that I could not close out for 24 months (Florida laws – WF had a branch in their eldercare facility.) I was delighted that my closeout check did not bounce.

Karma Fubar , August 7, 2018 at 1:22 pm

A while back I worked at a medical device startup operating within a formal (i.e. written and comprehensive) quality system. A quality system is required for any commercial sales of medical products; previously I had been involved in early stage R+D and had not been bound by such systems. So a lot of it was new to me.

Something that stuck out at the time, and probably ties in to the article above, was the sanctity of corporate internal audit files. The FDA could demand access to almost any company quality system document, except for internal audit files. They could be provided with summaries of these internal audits indicating something like "6 minor deficiencies found, 1 major deficiency found, 0 extreme deficiencies found" , but were not permitted access to the raw internal audits.

I suspect that financial firms have the same level of protection for their internal audits. Had they hired a consulting firm to investigate the accuracy of stated income in the loans they originated, the results of that outside investigation would probably be a document reviewable by government regulators (assuming they were interested in doing their job). But by pursuing this as an internal audit, executives knew that the results would never be reviewable, and give them plausible deniability that they knew of the systemic level of fraud.

There certainly must be other ways of investigating efficiency or compliance within a company, but by pursuing it as an internal audit they could easily bury the results.

Oregoncharles , August 7, 2018 at 1:52 pm

A quibble: comparing stated income to income tax forms may be misleading, although it is the standard. People have an interest in understating their income to the IRS, and in overstating it when seeking a loan. The logic is that they risk prosecution if they understate to the IRS, but there are plenty of situations where they're very unlikely to get caught. It's conceivable the loan application is more honest than the tax return.

perpetualWAR , August 7, 2018 at 7:57 pm

Neither is correct.

Enquiring Mind , August 7, 2018 at 3:09 pm

Loan officers I knew over the decades have changed their views. Asking them if they would lend their own money to the proposed borrower used to be more likely to elicit a Yes. When standards loosened (again) earlier this millennium, some answered No until realizing that they shouldn't care since the money wasn't theirs. What really mattered was getting that commission endorsed and deposited, given the rise of IBGYBG (I'll be gone, you'll be gone) thinking.

Another question I asked was about tracking borrower performance relative to loan officer compensation. Relationship building and longer term interactions declined with the rise of neo-liberalish (the -ish suffix indicates a primitive reaction to immediate perceived incentives without further investigation) mindsets. Portfolio lenders had more at risk but still laid off some of that on the deposit insurance funds. Loan buyers did not fully appreciate that they had to trust everyone preceding them in the value (destruction) cycle, from brokers and investment bankers through ratings agencies.

Internal audits, compliance functions and regulatory exams were often the only temporary inconveniences or obstacles to transactions and related income distribution.

Ron Con Coma , August 7, 2018 at 3:20 pm

Eric Holder for President – NOT!

steelhead23 , August 7, 2018 at 4:02 pm

If Democrats win control of the House they can use their investigative powers to force each bank regulator to cause every relevant financial institution to conduct a 4506-T audit.

Let us, for a moment, imagine this happens. Then what? The results would show widespread fraud and a pathetic lack of adequate vetting by the issuer. Then those fraudulent loans were aggregated into various RMBS and sold to others. I hope you can see that just this disclosure is likely to cause a substantial hiccup in the financial system, perhaps another full-blown crisis. And who would the public blame? The criminals – or the cops? I could see Dems, even Dems with little or no connection to the Street, deciding not to open Pandora's box.

That is one of the problems with the American political system. From defense appropriations to banking regulation, the pols live in fear of being tarred for doing the right thing, if the outcome is temporarily bad or unpopular. Yes, it would obviously be best to cleanse the wound, but doing so would hurt, so the pols decide that it would be best for their popularity to let the wound fester until it becomes too big to ignore or financial Armageddon occurs. Isn't that precisely the thinking of the Obama Administration?

Murgatroy , August 7, 2018 at 6:25 pm

All major Wall St banks and brokerages including Wachovia, Wells, BofA and even Citadel and a few foreign banks (ABN Amro, Deutsche Bank, Credit Suisse, etc) set up an offshore sub called CDS Indexco. This was used as a defacto cartel to control the prices of both Sub-Prime CDO issues and their respective Credit Default Swaps. They created the Markit BBB- index which was used by Paulsen, Ackman and a few other chosen ones to short the MBS sub-prime market. This is the truth.. CDS Indexco dropped that name in Nov. 2008 when the accounting rules forced Marked to Market accounting and also the Consolidation of VIE's (Special Purpose Financial Subs that got an exception to the Enron Rule). So in other words: if banks had been made to follow the "Enron Rule" the financial crisis wouldn't have happened. Goldman's own employee was the Chairman of CDS Indexco, I couldn't make this shit up. And Yves knows it too. Gramm Leach Bliley made it all possible – so banks could hold both the debt and the equity of an entity that they took no responsibility for. This was the precise reason for Glass-Steagall banks were manhandling the ownership of business due to inherent conflicts of interest between debt and equity holders.

steelhead23 , August 7, 2018 at 7:30 pm

My dear Murgatory, Wow. This is the first I have heard of CDS Indexco. You are suggesting that it was much more than a mere market clearinghouse. Where could I read more on this?

perpetualWAR , August 7, 2018 at 7:51 pm

Google it. I just did.
I. Am. Stunned.
Just when I think the shiitake can't get any deeper, it does.

perpetualWAR , August 7, 2018 at 7:34 pm

A former bank/trustee foreclosure attorney is running for a District Court judge position in Seattle. Remember Trott, the Foreclosure King, who Michigan sent to Congress? Yeah, this dude is trying to get on the bench.

crittermom , August 7, 2018 at 8:19 pm

Of course no bankers went to jail.

But does anyone remember this news from 2011, about the homeowner who did?
The lengths they went to 'catch him' once he was in their sites, says it all.
https://www.businessinsider.com/charlie-engle-2011-3

[Aug 05, 2018] War Is A Racket After 17 Years and Billions Wasted, US Seeks Peace With Taliban by Ron Paul and Daniel McAdams

Jul 31, 2018 | www.antiwar.com
Last week, US State Department officials met with Taliban leaders in Qatar. At the request of the Taliban, the US-backed Afghan government was not invited. The officials discussed ceasefires and an end to the war. Meanwhile, the US inspector general charged with monitoring US spending on Afghanistan reconstruction has reported that since 2008, the US has completely wasted at the least $15.5 billion. He believes that's just the tip of the iceberg, though. Will President Trump do the smart thing and negotiate peace and leave? Tune in to today's Ron Paul Liberty Report:

[Aug 02, 2018] The classic method of American negotiation and warfare like the Roman before them is to divide and conquer.Even the Soviet Union and Russians were unable to make the American respect their commitments

Notable quotes:
"... I agree with the caricature nature of much of this. I don't think there will be a next target. The MIC has become bloated while Iran, Syria, Russia, China are turning out true fighters as well as stronger economic planning. ..."
Jul 31, 2018 | www.moonofalabama.org
The United States seems ready to give up on Afghanistan.

After the World Trade Center came down the U.S. accused al-Qaeda, parts of which were hosted in Afghanistan. The Taliban government offered the U.S. to extradite al-Qaeda chief Osama Bin Laden to an Islamic country to be judged under Islamic law. The U.S. rejected that and decided instead to destroy the Afghan government.

Taliban units, supported by Pakistani officers, were at that time still fighting against the Northern Alliance which held onto a few areas in the north of the country. Under threats from the U.S. Pakistan, which sees Afghanistan as its natural depth hinterland, was pressed into service. In exchange for its cooperation with the U.S. operation it was allowed to extradite its forces and main figures of the Taliban.

U.S. special forces were dropped into north Afghanistan. They came with huge amounts of cash and the ability to call in B-52 bombers. Together with the Northern Alliance they move towards Kabul bombing any place where some feeble resistance came from. The Taliban forces dissolved. Many resettled in Pakistan. Al-Qaeda also vanished.

A conference with Afghan notables was held in Germany's once capital Bonn. The Afghans wanted to reestablish the former Kingdom but were pressed into accepting a western style democracy. Fed with large amounts of western money the norther warlords, all well known mass-murderers, and various greedy exiles were appointed as a government. To them it was all about money. There was little capability and interest to govern.

All these U.S. mistakes made in the early days are still haunting the country.

For a few years the Taliban went quiet. But continued U.S. operations, which included random bombing of weddings, torture and abduction of assumed al-Qaeda followers, alienated the people. Pakistan feared that it would be suffocated between a permanently U.S. occupied Afghanistan and a hostile India. Four years after being ousted the Taliban were reactivated and found regrown local support.

Busy with fighting an insurgency in Iraq the U.S. reacted slowly. It then surged troops into Afghanistan, pulled back, surged again and is now again pulling back. The U.S. military aptly demonstrated its excellent logistic capabilities and its amazing cultural incompetence. The longer it fought the more Afghan people stood up against it. The immense amount of money spent to 'rebuild' Afghanistan went to U.S. contractors and Afghan warlords but had little effect on the ground. Now half the country is back under Taliban control while the other half is more or less contested.

Before his election campaign Donald Trump spoke out against the war on Afghanistan. During his campaign he was more cautious pointing to the danger of a nuclear Pakistan as a reason for staying in Afghanistan. But Pakistan is where the U.S. supply line is coming through and there are no reasonable alternatives. Staying in Afghanistan to confront Pakistan while depending on Pakistan for logistics does not make sense.

Early this year the U.S. stopped all aid to Pakistan. Even the old Pakistani government was already talking about blocking the logistic line. The incoming prime minister Imran Khan has campaigned for years against the U.S. war on Afghanistan. He very much prefers an alliance with China over any U.S. rapprochement. The U.S. hope is that Pakistan will have to ask the IMF for another bailout and thus come back under Washington's control. But it is more likely that Imran Khan will ask China for financial help.

Under pressure from the military Trump had agreed to raise the force in Afghanistan to some 15,000 troops. But these were way to few to hold more than some urban areas. Eighty percent of the Afghan people live in the countryside. Afghan troops and police forces are incapable or unwilling to fight their Taliban brethren. It was obvious that this mini-surge would fail :

By most objective measures, President Donald Trump's year-old strategy for ending the war in Afghanistan has produced few positive results.

Afghanistan's beleaguered soldiers have failed to recapture significant new ground from the Taliban. Civilian deaths have hit historic highs. The Afghan military is struggling to build a reliable air force and expand the number of elite fighters. Efforts to cripple lucrative insurgent drug smuggling operations have fallen short of expectations. And U.S. intelligence officials say the president's strategy has halted Taliban gains but not reversed their momentum, according to people familiar with the latest assessments.

To blame Pakistan for its support for some Taliban is convenient, but makes little sense. In a recent talk John Sopko, the U.S. Inspector General for Afghanistan Reconstruction (SIGAR), made a crucial point:

"We keep referring to Pakistan as being the key problem. But the problem also was that the Afghan government at times was viewed very negatively by their local people and what you really need is to insert a government that the people support, a government that is not predatory, a government that is not a bunch of lawless warlords," observed Sopko.

He went on to say that the U.S. policy of pouring in billions of dollars in these unstable environments contributed to the problem of creating more warlords and powerful people who took the law into their own hands.

"In essence, the government we introduced, particularly some of the Afghan local police forces, which were nothing other than warlord militias with some uniforms on, were just as bad as the terrorists before them," said Sopko ...

This was the problem from the very beginning. The U.S. bribed itself into Afghanistan. It spent tons of money but did not gain real support. It bombed and shot aimlessly at 'Taliban' that were more often than not just the local population. It incompetently fought 17 one-year-long wars instead of a consistently planned and sustained political, economic and military campaign.

After a year of another useless surge the Trump administration decided to pull back from most active operations and to bet on negotiations with the Taliban:

The shift to prioritize initial American talks with the Taliban over what has proved a futile "Afghan-led, Afghan-owned" process stems from a realization by both Afghan and American officials that President Trump's new Afghanistan strategy is not making a fundamental difference in rolling back Taliban gains.

While no date for any talks has been set, and the effort could still be derailed, the willingness of the United States to pursue direct talks is an indication of the sense of urgency in the administration to break the stalemate in Afghanistan.
...
Afghan officials and political leaders said direct American talks with the Taliban would probably then grow into negotiations that would include the Taliban, the Afghan government, the United States and Pakistan.

In February the Taliban declared their position in a public Letter of the Islamic Emirate to the American people (pdf). The five pages letter offered talks but only towards one aim:

Afghans have continued to burn for the last four decades in the fire of imposed wars. They are longing for peace and a just system but they will never tire from their just cause of defending their creed, country and nation against the invading forces of your war­mongering government because they have rendered all the previous and present historic sacrifices to safeguard their religious values and national sovereignty. If they make a deal on their sovereignty now, it would be unforgettable infidelity with their proud history and ancestors.

Last weeks talks between the Taliban and U.S. diplomats took place in Doha, Qatar. Remarkably the Afghan government was excluded. Despite the rousing tone of the Reuters report below the positions that were exchanged do not point to a successful conclusion:

According to one Taliban official, who said he was part of a four-member delegation, there were "very positive signals" from the meeting, which he said was conducted in a "friendly atmosphere" in a Doha hotel.

"You can't call it peace talks," he said. "These are a series of meetings for initiating formal and purposeful talks. We agreed to meet again soon and resolve the Afghan conflict through dialogue."
...
The two sides had discussed proposals to allow the Taliban free movement in two provinces where they would not be attacked, an idea that President Ashraf Ghani has already rejected . They also discussed Taliban participation in the Afghan government.

"The only demand they made was to allow their military bases in Afghanistan ," said the Taliban official.
...
"We have held three meetings with the U.S. and we reached a conclusion to continue talks for meaningful negotiations," said a second Taliban official.
...
"However, our delegation made it clear to them that peace can only be restored to Afghanistan when all foreign forces are withdrawn ," he said.

This does not sound promising:

It is difficult to see how especially the last mutually exclusive positions can ever be reconciled.

The Taliban are ready to accept a peaceful retreat of the U.S. forces. That is their only offer. They may agree to keep foreign Islamist fighters out of their country. The U.S. has no choice but to accept. It is currently retreating to the cities and large bases. The outlying areas will fall to the Taliban. Sooner or later the U.S. supply lines will be cut. Its bases will come under fire.

There is no staying in Afghanistan. A retreat is the only issue the U.S. can negotiate about. It is not a question of "if" but of "when".

The Soviet war in Afghanistan took nine years. The time was used to build up a halfway competent government and army that managed to hold off the insurgents for three more years after the Soviet withdrawal. The government only fell when the Soviets cut the money line. The seventeen year long U.S. occupation did not even succeed in that. The Afghan army is corrupt and its leaders are incompetent. The U.S. supplied it with expensive and complicate equipment that does not fit Afghan needs . As soon as the U.S. withdraws the whole south, the east and Kabul will immediately fall back into Taliban hands. Only the north may take a bit longer. They will probably ask China to help them in developing their country.

The erratic empire failed in another of its crazy endeavors. That will not hinder it to look for a new ones. The immense increase of the U.S. military budget, which includes 15,000 more troops, points to a new large war. Which country will be its next target?


james , Jul 30, 2018 3:26:49 PM | 2

thanks b.. it would be good if the exceptional warmongering nation could go home, but i am not fully counting on it.. i liked your quote here "The U.S. military aptly demonstrated its excellent logistic capabilities and its amazing cultural incompetence." that is ongoing.. unless the usa leaves, i think the madness continues.. i suspect the madness will continue.. the only other alternative is the usa, with the help of their good buddies - uk, ksa, qatar, uae and israel - will keep on relocating isis to afgan for future destabilization.. i watched a video peter au left from al jazzera 2017 with isis embedded in the kush mtns... until the funding for them ceases - i think the usa will have a hand in the continued madness... if the usa was serious about ending terrorism they would shut down the same middle east countries they are in bed with.. until that happens, i suspect not much will change.. i hope i am wrong..
Pft , Jul 30, 2018 3:52:04 PM | 5
I dont believe it for a second. Especially with Iran looming as a potential target. US is staying in Afghanistan also to counter China , keep opium production high and of course there is the TAPI pipeline to "protect" that is backed by US as an alternative to the Iran-Pakistan-India pipeline that would have tapped Iran's South Pars gas field. A hostile or unfriendly Pakistan is just one more reason to stay

Just like US will never leave Iraq or Syria, they will stay in Afghanistan. There will be ebbs and flows, and talk of disengagement from time to time primarily for domestic consumption, but thats all it is IMO.

Jackrabbit , Jul 30, 2018 4:01:30 PM | 7
It seems that an ISIS-Taliban proxy war has begun.

That will take pressure off USA to leave. Likely gives USA an excuse to stay (to supply fight ISIS).

Uncoy , Jul 30, 2018 4:19:49 PM | 11
This is a fine recap of the situation. It's much too optimistic. The classic method of American negotiation and warfare like the Roman before them is to divide and conquer. It was very successful against the American Indians.

If the Taliban get free movement in two provinces, the Americans will demand an end to attacks on their bases, their soldiers and their agents elsewhere in Afghanistan. Just as the Iroquois Confederation enjoyed special privileges in what is now Upper New York for their help against the French, the Taliban will have special privileges in their two provinces while the Americans consolidate in the rest of Afghanistan. When the Americans feel strong enough, just as with the Iroquois, they will break the previous treaties.

After the Revolutionary War, the ancient central fireplace of the League was re-established at Buffalo Creek. The United States and the Iroquois signed the treaty of Fort Stanwix in 1784 under which the Iroquois ceded much of their historical homeland to the Americans, which was followed by another treaty in 1794 at Canandaigua which they ceded even more land to the Americans./b

Posted by: Uncoy | Jul 30, 2018 4:03:17 PM | 8

(...continuation of the comment above, somehow got posted when I pressed the return key)

Even the Soviet Union and Russians were unable to make the American respect their commitments. The United States reneged on the Anti-Ballistic Missile Treaty as soon as it could in 2001 (Russia was on its knees), reneged on its commitments not to expand NATO east and has built ballistic missile bases all around Russia which seem to be preparation for a pre-emptive nuclear strike/war against Russia.

The Afghanis (foolish to call them the Taliban, they are traditional Afghani patriots) have always been wise enough to annihilate any invader to the last man. This salutary policy keeps invaders out for decades at a time. The Taliban have a long row to hoe. It took almost a hundred years and several massacres to finally curb British ambitions on Afghanistan (1838 to 1919). Afghanis' best hopes rely on forging tight alliances with Pakistan and China, squeezing the Americans out completely right now.

The Americans burnt their bridges with the Russian already and are in the process of burning their bridges with Pakistan while losing influence with China. The US is very short of options right now. It's the ideal time for Afghanis to reclaim the whole territory, not leaving a single American soldier or airbase operational. They'll need a technically sophisticated ally to help them clear their skies of US drones. This role might appeal to either the Russians or the Chinese. As a training exercise, extended anti-drone warfare could be very useful.

fast freddy , Jul 30, 2018 4:24:15 PM | 12
What a great success the US achieved in destroying Yugoslavia. Murdering thousands went almost unnoticed. It was able to break up the country into a number of tiny, impoverished nations and got to put a US MIC Base in most of them.

Afghanistan is one tough nut to crack.

Bilal , Jul 30, 2018 4:39:14 PM | 13
You did not mention isis-k in your analysis. Its active mostly in eastern afghanistan in areas close to or adjacent to Pakistan (it is also controlls a small area in Jawzjan, in northern afghanistan). Many fighters are formerly pakistani taliban(not to be confused with afghan taliban who are simply called taliban). Before isis-k appeared in afghanistan, the areas which it now controls had pakistani taliban presence. TTP, or tehreek e taliban pakistan was facilitated by afghan ggovernment to settle down in these areas after they fled pakistan when its military launched a large scale offensive, Operation Zarb e Azb. The afghan government planned to use them to pressurize Pakistan, basically to use them as a bargaining chip. They operate openly in eastern afghanistan, but many of them joined isis-k.

Russians estimate isis-k's strength to be between 10k to 12k, although it might be a bit inflated number. From here they plan attacks against afghanistan and pakistan alike, mostly suicide bombings as of now. They have had fierce clashes with afghan taliban in eastern Afghanistan but have held their territory for now. Afghan army simply doesn't have the capacity in those areas to confront them. It was here that MOAB was dropped but as expected against a guerrilla force, it was ineffective in every way. But it did make headlines and has helped US in giving an impression its seriously fighting ISIS. The reports of unmarked helicopters dropping god-knows-what have also been coming from these areas. Hamid karzai mentioned that and also maria zakharova asked afghan gov. and US to investigate that which shows these are not just rumors. Recently intelligence chiefs of Pakistan, russia, iran and china as well(if i remember correctly) met in islamabad to discuss isis-k in afghanistan, no details other than this of this meeting are available.

In Northern afghanistan, in Jawzjan, fierce clashes broke out between taliban and isis-k after taliban commander in thiae areas was beheaded. ISIS-k has been beaten up pretty badly there but clashes are ongoing. Many areas have been cleared but fighting is still ongoing. An interesting aspect is taliban sources claiming that whenever they come close to a decisive victory, they have to stop operations becauae of heavy bombardment by US planes. They made similar claims when fighting daesh in eastern afghanistan. Anyway in a few days isis presence will probably be finished in Jawzjan. ISIS fighters who have survived have done so by surrendering to afghan forces. They will probably end up back in eastern afghanistan.

Red Ryder , Jul 30, 2018 4:49:21 PM | 14
Next Target for a long war?

Africa. US AFRICOM has a huge playground, tactics won't change and logistics is far easier.

There also will be a long Hybrid wr against Iran, but that will be much like the early days of Syria. Proxies as "moderates". Insurgents, not US troops. ISIS and AQ crazies will be on the ground.

The big money will go into Africa. You want to see Trillions "spent"? It will be Africa.

Robert Snefjella , Jul 30, 2018 4:55:49 PM | 15
The decision to invade Afghanistan had been taken before the 9/11 false flag coup. Had nothing much to do with the CIA's al-Qaeda mercenaries.

As I understood it, there were many agendas at work: testing weapons and making money for the MIC; controlling the lucrative (how many hundreds of billions of dollars ?) opium/ heroin production/profiteering; military bases relating to Iran, Russia, China, Pakistan and other ...stans, etc; control of oil and gas pipelines; access to increasingly valuable and sought rare earth minerals; proximity to oil and gas actual and potential.

More generally, subjugating Afghanistan was a necessary part of the 'full spectrum dominance' 'we will rule the earth' doctrine, dear til recently to too many mad hatters, and still evoking a misty eyed longing in some, no doubt.

NemesisCalling , Jul 30, 2018 5:00:17 PM | 16
Ahhh...the US produces some of the lamest euphemisms approved for all audiences; such as "Afgahn Security Forces." So sterile, innocuous. And benign. How could anyone question their plight? (We did pick up the game a little bit in Syria with "Free Syrian Army..." Can I get a hell yeah?) All the people hearing this in the US could do was shrug their shoulders and speak, "I guess I should support them." That is, of course, after we took out OBL and the mission in Afghanistan was a little more opaque. Just a little bit. Anyways...Hell, yeah! Get some!

Thanks b for the brief history. Really invaluable.

StephenLaudig , Jul 30, 2018 5:26:35 PM | 17
Afghani patriots, resisting invaders since 330 BCE... https://en.wikipedia.org/wiki/Invasions_of_Afghanistan
The US military, the planet's costliest losingest military since 1946. The US military, like its munitions manufacturers, doesn't win but it does get paid and is why we can have nice things like oh, decent health care. Lack of health insurance kills more Americans than the Russians ever will. The Russians aren't the enemy, Trump is. Lobbyists are too.
Eugene , Jul 30, 2018 5:39:35 PM | 18
I haven't read anything about Blackwater wanting to replace the U.S. Military in Afghanistan. Of course, the U.S. Treasury would continue to shovel those pallet loads of newly printed $100.00 bills down the Blackwater hole. Any odds this might go forward from anyone's opinion?
Willy2 , Jul 30, 2018 5:45:04 PM | 19
- The US already started to plan an invasion of Afghanistan in januari & february of 2001.
adam gadahn , Jul 30, 2018 5:45:40 PM | 20
robin cook before he was murdered stated that alqueda was a cia data base.
i believe bresinski knew obl as tim osman who was later killed by cia mi6 man omar blah blah sheikh bhutto of pakisyan was assasinated after spilling the beans about sheikh.

christopher bolleyn on you tube will give you the sp on what 9 and 11 was shirley we are past the point of the offecal theory.
the turd burger that is the official theory is clearly the worst and lowest grade of all the conspiracy theories.
the taliban where in barbera bushes texas talking lithium opium and oil pipelines with the paedo bush crime syndicate before 9 and 11

marvin bush ran security at the twin towers

christopher bollyn is the go to man in these regardings

http://www.bollyn.com/

Peter AU 1 , Jul 30, 2018 5:55:31 PM | 21
The US wants peace talks but wants to keep its bases in Afghanistan. US under Trump has built new bases in Syria, Iraq, Kuwait.
SDF have been talking with Syrian government, and US in Talks with Taliban. Are these just moves to buy the US a little time until it launches the war Trump has been building the US military up for.
dahoit , Jul 30, 2018 6:00:22 PM | 22
Trump is?What about the neocons who started this f*ck up.
adam gadahn , Jul 30, 2018 6:02:02 PM | 23
alas not a nice number 13 bilal

isis is israeli counter gang with support of usa usa and the city of london,ukrainian,polish,uk sas,cia,kiwi,aussie,jordanian and donmeh satanic house of saud.

talking of isis as if it is real entity rather than a frank kitson gang counter gang and pseudo gang is polluting the well.

who has been providing extraction helicopters from syriana for the last 14 months.
who has been washing these bearded devils operating on them in kosher field hospitals making them well shiny and new
who?
scchhhhh you know who

Peter AU 1 , Jul 30, 2018 6:13:36 PM | 24
From Russian Ministry of Foriegn Affairs 25 March 2018.

http://www.mid.ru/en/foreign_policy/news/-/asset_publisher/cKNonkJE02Bw/content/id/3139715
"We are alarmed by the growing number of terrorist activities being carried out by the Taliban who stage armed attacks across Afghanistan, as well as by the increased ISIS presence in Afghanistan's northern provinces that border CIS countries.

We are concerned about reports regarding the use of helicopters without any identification marks in many parts of Afghanistan that are delivering terrorists and arms to the Afghan branch of this terrorist organisation. We believe that reports to this effect made by Afghan officials should be thoroughly investigated."

Willy2 , Jul 30, 2018 6:27:53 PM | 25
- Of course. The US wants to keep its bases in Afghanistan. Surprise, surprise.
In 2002 when ABC corporate propaganda showed Special Forces rounding up village Hajji, the writing was on the wall. Afghanistan is a Holy War run by incompetents for a profit. The only question is when will the Westerners withdraw from the Hindu Kush and how disastrous it will be. Americans cannot afford the unwinnable war's blood and treasure. The US's Vietnam War (1956 to 1975) ended for the same reasons. That war ushered in the Reagan Revolution and the Triumph of the Oligarchy. The consequences of the breakup of the Atlantic Alliance will be even more severe.

Posted by: VietnamVet , Jul 30, 2018 7:06:37 PM | 26

In 2002 when ABC corporate propaganda showed Special Forces rounding up village Hajji, the writing was on the wall. Afghanistan is a Holy War run by incompetents for a profit. The only question is when will the Westerners withdraw from the Hindu Kush and how disastrous it will be. Americans cannot afford the unwinnable war's blood and treasure. The US's Vietnam War (1956 to 1975) ended for the same reasons. That war ushered in the Reagan Revolution and the Triumph of the Oligarchy. The consequences of the breakup of the Atlantic Alliance will be even more severe.

Posted by: VietnamVet | Jul 30, 2018 7:06:37 PM | 26 /div

james , Jul 30, 2018 7:21:13 PM | 27
@uncoy.. i basically see it like you, however another proxy war involving usa-russia-china sounds like a running theme now...

@13 bilal.. good post.. i agree about the analysis missing much on isis presence in afgan as @6 jr also points out.. i think it is a critical bit of the puzzle.. it appears the usa is using isis as a proxy force, as obama previously stated with regard to syria... the usa just can't seem to help themselves with their divide and conquer strategy using isis as part of it's methodology... it's exact opposite of what they profess..

@18 eugene.. isn't blackwater or whatever they're called now - headquartered in uae? perfect place for them, lol... right on top of yemen, afgan, and etc. etc.. if isis can't do the job for the west thru their good friends ksa, uae - well, then maybe they can pay a bit more and get blackwater directly involved too..

dltravers , Jul 30, 2018 7:41:30 PM | 28
Trump is serious when he said he would talk to anybody. The CIA is alleged to have been stirring the pot with Islamic militants prior to the Soviet invasion when the country went full socialist. I would suspect the Russians had a hand in that in 1978. US intelligence was said to be helping along the backlash to socialism by Islamic militants back then in 1978. The CIA station chief was promptly assassinated the next year.

Obviously you could dump 600,000 NATO and US soldiers into the country and not control it short of executing every Muslim. What a foolish endeavor but what would you expect from these buffoons and their death cult? These human sacrifices are holy to them. They worship blood, death, power and money.

With their loss in Syria the NEOCONS can now make peace with the Taliban and use them and ISIS to push into old Soviet Central Asia in an attempt to deny them what the Anglo American Zionist alliance cannot have at this time, control of the commodities.

China will slide right in and take it all at some point once exhaustion sets into place. Even the Brits knew when it was time to leave India and their Middle Eastern holdings. They realized the costs of containment would wipe out their country.

Harry , Jul 30, 2018 7:53:57 PM | 29
@ Patrick Armstrong | 10
I still think Trump wants to cut the Gordian Knot and get the USA out of all this crap. https://www.cnbc.com/2018/07/30/trump-i-am-ready-to-meet-with-iran-anytime-they-want-to.html

No he doesnt, along with Israel and neocons. There was already nuclear deal, and US was out of "all this crap", so why introduce Gordian Knot if he doesnt want it?

What Trump demands is Iran's surrender. 'b discussed it at length some time ago, the list of Trump's demands is completely ridiculous and the goal is Iran as a client state.

From its side, Iran is refusing to even meet Trump, two reasons: 1) If Iran agrees to meet, it would mean they agree to renegotiate the deal, which they dont. 2) US word isnt worth a toilet paper, so any negotiations is meaningless. Plus US list of demands makes even endeavor to negotiate dead from the get go.

Curtis , Jul 30, 2018 7:54:05 PM | 30
Congress went along with the Pentagon's 7 countries in 5 years plan. No investigation of 9/11 or even consideration of Ron Paul's bringing in an old idea of Letters of Marque and Reprisal.
As to the US leaving the warlords in power to continue opium production, etc, Van Buren (We Meant Well book) said some of the same happened in Iraq with some sheikhs still holding power in local areas. General Garner looked forward to going in to rebuild (and was promising quick elections) but was shocked to see no protection of ministries (except oil) which were looted and burned. And then Bremer was put in charge. Complete mismanagement of the war, the aftermath, etc. Like someone once said, if they were doing these things at random you would expect them to get it right once in a while.

The Kunduz Airlift which allowed Pakistan a corridor to fly out Pak officials, Taliban, and possibly al Qaeda was yet another snafu like paying Pakistan to supposedly block any escape from their side of Tora Bora only to have a long convoy leave at night. It made one wonder about the US supposed air superiority/domination. Again, complete mismanagement.

A comparison to the end situation in VietNam 1975 is apt.

Peter AU 1 , Jul 30, 2018 8:11:57 PM | 31
Trump meeting Rouhani. Trump saays he wants a better deal. The nuke agreement took years to negotiate and Iran accepted far more stringent inspections than any other country signed up NPT. There is nothing more for Iran to negotiate other than to give away their sovereignty.
The offer of a meeting by Trump is more along the line of "we tried to avoid war".
The US under Trump have scrapped the nuke agreement and made demands that are impossible for Iran to meet without giving away its sovereignty.
Red Ryder , Jul 30, 2018 8:21:00 PM | 32
Erik Prince's plan for fighting in Afghanistan.
He presented it to the WH. Military rejected it.
He is no longer Blackwater-connected.
Frontier Services Group Ltd. is his new military-security services corp.
He has extensive contracts with the Chinese government and their SOEs overseas.

This was a trailer he made to explain his concept. He still wants to do this.
https://www.youtube.com/watch?v=qjhPSaqBj1c

spudski , Jul 30, 2018 8:38:09 PM | 33
Peter AU 1 @31

I fear you're absolutely right.

occidentosis , Jul 30, 2018 9:08:50 PM | 34
did you see General Souleimani answer's to Trump rabid tweet

it went like this

Our president doesnt lower himself to answer someone like.I, a soldier answer someone like you, you re someone who speaks in the vocabulary of a cabaret owner and a gambling house dealer.(paraphrasing saker has the video on his site)

and then he went on to describe how your cowad troops wore adult diapers in Afghanistan and Iraq

fairleft , Jul 30, 2018 9:25:35 PM | 35
China will slide right in and take it all at some point once exhaustion sets into place.

dltravers @28

No. China, being development-oriented rather than imperialist, will leave Afghanistan alone. China and Russia, but especially China, requires an Afghanistan that is not a U.S.-controlled terrorist base. Because China needs the oil/gas link that it is building through Pakistan to access Gulf energy resources, and that energy corridor would be the primary target of U.S.-hired mercenaries ('terrorists').

How Afghanistan manages itself in the post-U.S. era is Afghan business, but it will almost certainly involve the Pashtun majority (in the form of the 'Taliban') retaking power in Kabul but with the traditional huge amounts of autonomy for the provinces. That arrangement reduces pressure by Pashtun nationalists in Pakistan against Pakistan's government, and in general seems to be the long-term stable set up, and stability is what China has to have in Afghanistan.

Now is the time with perfect China partner Khan and the Pakistan military firmly in power. Not instant, but over the next two years I think we'll see the Taliban's fighting capacity hugely improve, with transfers of supplies, weapons and intelligence from Pakistan. It would be very smart for Trump to get out in 2019. History is going to accelerate in that region.

S , Jul 30, 2018 9:31:48 PM | 36
Which country will be its next target?

I know I'm in the minority here, but I worry a lot about Venezuela. See, it's a perfect fit for the U.S. economy. U.S. shale oil is way too light to be useful, while Venezuelan oil is way too heavy to be useful. They are destined for each other, i.e. to be mixed into a blend that would be a good fit U.S. refineries. Plus, Venezuela is very import-dependent and thus would make for a good vassal. It also has a rabid capitalist class that will do anything -- any kind of atrocity or false flag -- to return to the good old days of exploitation. "But Venezuela has a lot of arms!", I hear you counter. True, but the people are severely demoralized because of the extreme economic hardship. Think of the USSR in late 80s/early 90s. It had the most powerful military in the world, and yet people were so demoralized and disillusioned with the old system that they simply chose not to defend it. Same thing may happen in Venezuela. After Colombia has signed peace accords with FARC, U.S. has been steadily increasing its military presence in Colombia. I think there is a very real possibility of a naval blockade combined with supply lines/air raids from Colombia supporting the "Free Venezuelan Army" assembled from Venezuelan gangs and revanchist capitalists and foreign mercenaries. It would be logistically impossible for Russia or China to provide military help to far-away Venezuela. Neighbors will not come to the aid of Venezuela either as there is a surge of pro-U.S. right-wing governments in the region.

ben , Jul 30, 2018 9:33:25 PM | 37
Any moves the U$A makes will have to be approved according to which natural resources their corporate masters covet at any particular moment. Lithium and other rare earth minerals, strategic importance, whatever the corporate form needs to stay on top globally, will dictate what the empire does.

Leave Afghanistan? I very much doubt it.

DJT will do what the "puppet masters" desire. Just like all his predecessors.

Profits uber alles!!

fairleft , Jul 30, 2018 9:36:15 PM | 38
'Correction': No reliable census has been done in decades, but I don't think the Pashtun are the majority in Afghanistan. They
are by far the largest minority however. British 'divide and rule' stategists long ago deliberately separated them into Pakistan and Afghanistan.
Peter AU 1 , Jul 30, 2018 9:40:53 PM | 39
s 36

Venezuela and Iran have two things in common. Both have large oil reserves and neither recognize Israel.
Trump's wars will be about destroying enemies of Israel, and at the same time, achieving global energy dominance.

Chipnik , Jul 30, 2018 9:58:21 PM | 40
I've posted this before. I met a Taliban leader and his two guards in a brutal area during the Hearts and Minds Schtick, preparatory to Cheney getting all the oil and gas, and copper and iron and coming coal lease awards.

He was a nice guy, the Taliban leader. His guards looked at me with absolute death in their eyes. Not wanting them to hear him, as we finished our tea, the Taliban leader leaned close, then whispered, 'I love your Jesus, but I hate your Crusaders.'

And I take issue with the US 'incompetence' meme. Ever since Cheney hosted the Taliban in Texas in 1998, trying to get a TAPI pipeline, the US has deliberately and cunningly taken over the country, assassinated the local-level leadership, and installed their foreign Shah, first Karzai, then Ghani.

In that time of occupation, 18 years, Pentagon MIC disappeared TRILLIONS in shrink-wrapped pallets of $100s, and ballooned from $340B a year, to now Trump is saying $840B a year.

That's not incompetence. Just the opposite.

Now, to honor my Afghan friends, who love to joke even after 35+ years of machine warfare, a joke I wrote in their honor:

Ring ring ring ring

"Office of the President of the United States, Ronald Reagan!"

"BRRZZZBRRZZZV..."

"Hold please."

President Reagan, it's the Iranian ambassador!"

"Well hello Mr. Assinabindstani, what can I do for you?"

"BRRZZZBRRZZZV..."

"Well I'll get my staff right on it."

[Intercomm clicks]

"Hey Ollie, the Ayatollah wants more guns! Step on it!"

Chipnik , Jul 30, 2018 10:10:55 PM | 41
38

Actually, the British paid an annual tithe-tribute the the Afghan king to stop raiding their India holdings, and agreed to a neutral zone between them. Then when the British pulled out, they declared the neutral zone as Pakistan and shrunk India away from Pashtun territory to create a bigger divide. The Afghan leaders had no say in the matter. I believe Baluchistan was also carved away. At one time, Afghan control extended from Persia to the Indus Valley. There is no way to defeat a nation of warriors who created a kingdom that vast, while William the Conqueror was still running around in bear skin diapers.

dh , Jul 30, 2018 11:03:19 PM | 42
@41 'Afghan control extended from Persia to the Indus Valley.'

You are probably referring to the Khalji Dynasty, a brutal bunch, who ruled India from 1290 to 1320 by which time William the Conqueror was long dead. You would be a lot more credible if you got your history right.

Lozion , Jul 30, 2018 11:30:50 PM | 43
@42 dh is correct. Afghan territory was in the Persian sphere of influence much longer compared to the Mughal/British/Indian periods..
Charles Michael , Jul 31, 2018 12:19:59 AM | 44
IMHO the military Budget increase, and what an increase it is!
is part of worsening an already outrageous situation to reach a caricatural point. Typical of trump repeated special "art".
Of course Nobody in USA, no President can go against the MIC and Pentagon.
But money is cheap when you print it.

It is sugaring the intended shrinking of foreign deployments (as in NATO), closure of "facilities" and replacing them officially with total deterrence capacities (Space Forces anybody ?).
While keeping classical projection capacities for demonstration against backward tribes.

Guerrero , Jul 31, 2018 12:21:04 AM | 45
That is an excellent account. Who can help rooting for the Afghanis to get their country back?

The economics of empire are always upside down; the homeland people end up shelling out for it.

Hoarsewhisperer , Jul 31, 2018 12:26:51 AM | 46
...
From its side, Iran is refusing to even meet Trump, two reasons: 1) If Iran agrees to meet, it would mean they agree to renegotiate the deal, which they dont. 2) US word isnt worth a toilet paper, so any negotiations is meaningless. Plus US list of demands makes even endeavor to negotiate dead from the get go.
Posted by: Harry | Jul 30, 2018 7:53:57 PM | 29

Tru-ish but Trump's latest offer is, according to the MSM, "no pre-conditions." It's quite likely that Iran's allies have advised the Iranians to tell Trump to Go F*ck yourself (if you feel you must), but then satisfy yourselves that Trump's No Preconditions means what Iran wants it to mean.

Trump jumped into the NK and Putin talks first because both were eager to talk. Iran will be a good test of Trump's seduction skills. All he's got to do is persuade the Iranians that talking is more useful than swapping long-distance insults. Iranians are rusted onto logical principles and Trump will find a way to appeal to that trait, imo.

Ian , Jul 31, 2018 12:41:07 AM | 47
Which country will be its next target?

Iran.

Debsisdead , Jul 31, 2018 1:11:58 AM | 48
It's too late for the afghanis who have been driven into the urban areas during the regulaar 'Afghanistanisation' campaigns. Most of them will have become hooked on consumerism and the necessity of dollars.
That leaves only two options for the Taliban when they take over as they undoubtedly will altho that is likely to mean having to tolerate clutches of obese amerikans lurking in some Px strewn green zone, the inhabitants of which are likely to have less contact with people from Afghanistan than any regular user of a Californian shopping mall. The new government can ignore the consumerists even when these rejects insist on getting lured into some nonsense green revolution - the danger with this isn't the vapid protests which can easily be dealt with by fetching a few mobs of staunch citizens from rural Afghanistan who will quickly teach them that neither cheeseburgers nor close captioned episodes of daytime television provide sufficient nutrition to handle compatriots raised on traditional food and Islam. Or the new administration can do as other traditional regimes have done many times over the last 80 years or so, purge the consumerists by disappearing the leadership and strewing empty lots in the urban areas with mutilated corpses of a few of the shitkicker class consumerists. That option can cause a bit of a fuss but it (the fuss) generally only lasts as long as the purge.

I suspect the Afghan government will favour the latter approach but they may try to hold off until the North has been brought back into line. OTH, consumerism is a highly contagious condition so, unless the North can be pacified speedily which seems unlikely, initially at least the Taliban adminsitration may have to fight on two fronts, agin the North while they nip urban consumerists in the bud before those confused fools can cause any highly publicised in the west but in actuality, low key, attempted insurrection.
My advice to the gaming, TV or cheeseburger addicted inhabitants of Kabul would be to volunteer your services to the amerikan military as a 'translator' asap and join yer cobbers in California.
It is unlikely that you will bump into Roman Brady especially not when he is in one of his avuncular moods, but if you stay outta Texas, Florida or any other part of flyover amerika chocka with alcohol induced blowhardism, you will discover than amerikan racism isn't as lethal as it once was.

Apart from having to ignore being jostled in the line at fast food joints and being loudly and incorrectly termed a motherf**in sand n***er mid-jostle. Certainly a whole lot less lethal than trying to cover your Fortnite jones by waving a badly copywritten sign in front of the al-Jazeera cameras for a one month battle pass .

AV17 , Jul 31, 2018 1:49:03 AM | 49
This retreat is to focus resources on Iran. Nuclear Winter it is!
Daniel , Jul 31, 2018 2:05:21 AM | 50
What was happening in Kabul, Afghanistan less than 8 hours after the WTC Towers turned into dust in midair? Who here remembers the massive bombing/cruise missile attack?

Here is CNN's transcript:

NIC ROBERTSON, CNN CORRESPONDENT: "Well, Joie, it's about 2:30 in the morning here in Kabul. We've been hearing explosions around the perimeter of the city. We're in a position here which gives us a view over the whole city. We just had an impact, perhaps a few miles away.

"If I listen, you can hear the ripple of explosions around the city. Perhaps you heard there. The fifth explosion -- sixth explosion, I think. Gun bursts and star bursts in the air. Tracer fire is coming up out of the city. I hear aircraft flying above the city of Kabul. Perhaps we've heard half a dozen to 10 detonations on the perimeter of the city, some coming from the area close to the airport. I see on the horizon what could be a fire on the horizon, close, perhaps, to where the airport might be. A flash came up then from the airport. Some ground fire coming up here in Kabul."

"I've been in Belgrade and I've been in Baghdad and seen cruise missiles arrive in both those cities. The detonations we're hearing in Kabul right now certainly sound like the detonations of loud missiles that are coming in. "

"Certainly -- certainly it would appear that the Afghan defense systems have detected a threat in the air. They are launching what appears to be anti-aircraft defense systems at the moment. Certainly, I can see that fire that was blazing on the horizon. It was a faint yellow; it's now a bright orange blazing. Several other detonations going off around the city, multiple areas. Rockets appear to be taking off from one end of the airport. I can see that perhaps located about 8 or 9 miles away from where we stand, Joie."

The bombing/explosions continue for 10+ minutes of this broadcast.

Then, they cut to WILLIAM COHEN, FORMER SECRETARY OF DEFENSE: who says the US is only collecting intelligence. He says what we're seeing must be part of the "Civil War" (despite the fact that neither side had an air force or cruise missiles). The Pentagon later denies knowing anything about it.

Then, CNN returns to Nic Robertson, who- within 15 minutes of his first report - begins to change his tune. Suddenly, the jet sounds are not mentioned. The cruise missiles (jet engines) have transformed into possible rockets. The airport fire is now an ammunition dump.

And voila! They lose their connection and Nic will not be heard from again. And this little bit of history will essentially disappear.

CNN video archive (attack report starts at 7:43).

http://transcripts.cnn.com/TRANSCRIPTS/0109/11/bn.61.html

NPR had a reporter in Kabul that night. He apparently didn't notice the massive bombing, at least in his memoir 15 years later.

Mishko , Jul 31, 2018 2:07:19 AM | 51
Dear Mr. B,
"All these U.S. mistakes made in the early days are still haunting the country."
These mistakes are by design. To cause and keep causing destabilisation.

I like to refer to it as the 3-letter Scrabble method of doing things.
Me living in the Netherlands as I do, let me take the example of Greece.
Greece had its regime changed in 1948 (Wiki says 46-49).
And how is Greece doing these days? ...

Plasma , Jul 31, 2018 2:16:47 AM | 52
@37 yep, gotta agree with the more passimistic outlook here. Personally i'll eat my shoes if US leaves Afghanistan within any reasonable time frame. In addition to plentiful natural resources, there are very influential vested interests in Afghanistans booming opium industry.
Quentin , Jul 31, 2018 2:20:09 AM | 53
Off topic: Andrei Nekrasov's 'Magnitsky Act: Behind the Scenes' can be viewed in full on You Tube at this moment (31 July, 08:15 Amsterdam time). Can it also be seen in the USA, I wonder? How long will it take before Google take it down ? Watch it and learn about one of the main drivers of the Russia obsession.
Andreas Schlüter , Jul 31, 2018 3:35:18 AM | 54
The US (Neocon dominated) Power Elite has only one strategy left for that Region: destabilization and chaos to serve as a barrier against the Project of the Eurasian Cooperation!
See:
„Geo-Politics: The Core of Crisis and Chaos and the Nightmares of the US Power Elite" https://wipokuli.wordpress.com/2016/08/01/geo-politics-the-core-of-crisis-and-chaos-the-nightmares-of-the-us-power-elite/
And on the recent developments:
"US Politics, Russia, China and Europe, Madness and Strategies": https://wipokuli.wordpress.com/2018/07/22/us-politics-russia-china-and-europe-madness-and-strategies/
Best regards
Harry , Jul 31, 2018 4:35:59 AM | 55
@ Hoarsewhisperer | 46
Tru-ish but Trump's latest offer is, according to the MSM, "no pre-conditions." It's quite likely that Iran's allies have advised the Iranians to tell Trump to Go F*ck yourself (if you feel you must), but then satisfy yourselves that Trump's No Preconditions means what Iran wants it to mean.

White House just explained what Trump's "no preconditions" means: 1) Iran should at the core change how it deals with its own people. 2) Change its evil stance in foreign policy. 3) Agree on nuclear agreement which would REALLY prevent them making a nuke.

In other words, Iran should capitulate and become a client state, thats what Trump means by "no preconditions."

venice12 , Jul 31, 2018 4:53:03 AM | 56
@eugene #18

https://taskandpurpose.com/blackwater-eric-prince-afghan-war-plan/

"Blackwater Founder Erik Prince's Afghan War Plan Just Leaked, And It's Terrifying "

Tis was 8 months ago.

et Al , Jul 31, 2018 5:04:41 AM | 57
Afghanistan, the graveyard of empires!

When I heard old hand Gulbuddin Hekmatyar (what a name!) was heading back it was clear that things were afoot.

China's been trying to get in for a while, the Mes Aynak mine for example, but nothing much has happened.

Afghanistan is sitting on huge amounts of valuable mineral resources (an estimated $3t) but remains dirt poor...

ashley albanese , Jul 31, 2018 6:42:37 AM | 58
In any hot clash with China the U S would be very exposed in Afghanistan .
Mark2 , Jul 31, 2018 6:51:36 AM | 59
At this advanced stage of American insanity, I don't see why the devil should have all the best tunes. I'm sick of the yanks doing this shit in over people's county's ! While they stuff there fat faces with burgers and donuts! The dirty games they play on over country's, should now be played in America with all the brutality that they have used on others. Until that happens things world wide will continue to detriate. Natural justice is all that remains. They'v curupted all else.
Yeah, Right , Jul 31, 2018 7:09:00 AM | 60
@19 "The US already started to plan an invasion of Afghanistan in januari & february of 2001."

Well, to be fair the USA probably has plans to invade lots of countries.

Indeed, it would be more interesting to consider how many countries there are that the USA *doesn't* have invasion plans gathering dust on the shelves.

Not many, I would suggest.

Mark2 , Jul 31, 2018 7:41:56 AM | 61
It's just been reported on the bbc news---- the man responsible for the Manchester bombing had been 'rescued from Lybia when Gadafi was overthrown and tracked ever since. Even in Britain up to the day of the bombing ! And now on this post we discuss America uk transporting terrorists from Syria to Afghanistan . Not to mention the white helmet bunch and where Ther going! The Manchester bombing, Westminster bridge and London Bridge atacks were done by the Tory party to win a general election ! This is the reality of the world we live in.full on oppression !!!
TG , Jul 31, 2018 8:26:48 AM | 62
Indeed, I agree with the sentiments here. But missing a big part of the picture.

Afghanistan and Pakistan have sky-high fertility rates. Forget the rubbish peddled by economist-whores like Milton Friedman, under these conditions no country without an open frontier has ever developed into anything other than a larger mass of poverty. In Pakistan something like half the children are so malnourished that they grow up stunted, and it is this misery that is starting slow population growth. Pakistan is yet another example of the Malthusian holocaust, which is not a global catastrophe: it is slow grinding poverty that results when people have more children than they can support.

Bottom line: these places will remain poor and unstable no matter what lunacy the United States does or does not do. The traditional approach to such places is to leave them alone, and only keep them from escaping. Bottled up, the Afghanis and Pakistanis will kill only each other. 9/11 is a consequence of allowing people from these places free access to the Untied States.

The 'war on terror' is a consequence of 'there shall be open borders.' It's a big and messy world, and even if the government of the United States was not criminally incompetent, there would be a lot of misery and hatred in it. Open borders means that now the Untied States has to intervene in every country all over the world to ensure that nowhere can there develop terrorist cells. An impossible task.

Charles Michael @ 44

I agree with the caricature nature of much of this. I don't think there will be a next target. The MIC has become bloated while Iran, Syria, Russia, China are turning out true fighters as well as stronger economic planning.

financial matters , Jul 31, 2018 9:19:51 AM | 63
The US still has some resources and some use but needs to continue to make friends in the pattern of Kim and Putin and give up on its self defeating economic and military sabotage planning which has been exposed as morally bankrupt as well.

[Jul 31, 2018] The classic method of American negotiation and warfare like the Roman before them is to divide and conquer.Even the Soviet Union and Russians were unable to make the American respect their commitments

Jul 31, 2018 | www.moonofalabama.org
The United States seems ready to give up on Afghanistan.

After the World Trade Center came down the U.S. accused al-Qaeda, parts of which were hosted in Afghanistan. The Taliban government offered the U.S. to extradite al-Qaeda chief Osama Bin Laden to an Islamic country to be judged under Islamic law. The U.S. rejected that and decided instead to destroy the Afghan government.

Taliban units, supported by Pakistani officers, were at that time still fighting against the Northern Alliance which held onto a few areas in the north of the country. Under threats from the U.S. Pakistan, which sees Afghanistan as its natural depth hinterland, was pressed into service. In exchange for its cooperation with the U.S. operation it was allowed to extradite its forces and main figures of the Taliban.

U.S. special forces were dropped into north Afghanistan. They came with huge amounts of cash and the ability to call in B-52 bombers. Together with the Northern Alliance they move towards Kabul bombing any place where some feeble resistance came from. The Taliban forces dissolved. Many resettled in Pakistan. Al-Qaeda also vanished.

A conference with Afghan notables was held in Germany's once capital Bonn. The Afghans wanted to reestablish the former Kingdom but were pressed into accepting a western style democracy. Fed with large amounts of western money the norther warlords, all well known mass-murderers, and various greedy exiles were appointed as a government. To them it was all about money. There was little capability and interest to govern.

All these U.S. mistakes made in the early days are still haunting the country.

For a few years the Taliban went quiet. But continued U.S. operations, which included random bombing of weddings, torture and abduction of assumed al-Qaeda followers, alienated the people. Pakistan feared that it would be suffocated between a permanently U.S. occupied Afghanistan and a hostile India. Four years after being ousted the Taliban were reactivated and found regrown local support.

Busy with fighting an insurgency in Iraq the U.S. reacted slowly. It then surged troops into Afghanistan, pulled back, surged again and is now again pulling back. The U.S. military aptly demonstrated its excellent logistic capabilities and its amazing cultural incompetence. The longer it fought the more Afghan people stood up against it. The immense amount of money spent to 'rebuild' Afghanistan went to U.S. contractors and Afghan warlords but had little effect on the ground. Now half the country is back under Taliban control while the other half is more or less contested.

Before his election campaign Donald Trump spoke out against the war on Afghanistan. During his campaign he was more cautious pointing to the danger of a nuclear Pakistan as a reason for staying in Afghanistan. But Pakistan is where the U.S. supply line is coming through and there are no reasonable alternatives. Staying in Afghanistan to confront Pakistan while depending on Pakistan for logistics does not make sense.

Early this year the U.S. stopped all aid to Pakistan. Even the old Pakistani government was already talking about blocking the logistic line. The incoming prime minister Imran Khan has campaigned for years against the U.S. war on Afghanistan. He very much prefers an alliance with China over any U.S. rapprochement. The U.S. hope is that Pakistan will have to ask the IMF for another bailout and thus come back under Washington's control. But it is more likely that Imran Khan will ask China for financial help.

Under pressure from the military Trump had agreed to raise the force in Afghanistan to some 15,000 troops. But these were way to few to hold more than some urban areas. Eighty percent of the Afghan people live in the countryside. Afghan troops and police forces are incapable or unwilling to fight their Taliban brethren. It was obvious that this mini-surge would fail :

By most objective measures, President Donald Trump's year-old strategy for ending the war in Afghanistan has produced few positive results.

Afghanistan's beleaguered soldiers have failed to recapture significant new ground from the Taliban. Civilian deaths have hit historic highs. The Afghan military is struggling to build a reliable air force and expand the number of elite fighters. Efforts to cripple lucrative insurgent drug smuggling operations have fallen short of expectations. And U.S. intelligence officials say the president's strategy has halted Taliban gains but not reversed their momentum, according to people familiar with the latest assessments.

To blame Pakistan for its support for some Taliban is convenient, but makes little sense. In a recent talk John Sopko, the U.S. Inspector General for Afghanistan Reconstruction (SIGAR), made a crucial point:

"We keep referring to Pakistan as being the key problem. But the problem also was that the Afghan government at times was viewed very negatively by their local people and what you really need is to insert a government that the people support, a government that is not predatory, a government that is not a bunch of lawless warlords," observed Sopko.

He went on to say that the U.S. policy of pouring in billions of dollars in these unstable environments contributed to the problem of creating more warlords and powerful people who took the law into their own hands.

"In essence, the government we introduced, particularly some of the Afghan local police forces, which were nothing other than warlord militias with some uniforms on, were just as bad as the terrorists before them," said Sopko ...

This was the problem from the very beginning. The U.S. bribed itself into Afghanistan. It spent tons of money but did not gain real support. It bombed and shot aimlessly at 'Taliban' that were more often than not just the local population. It incompetently fought 17 one-year-long wars instead of a consistently planned and sustained political, economic and military campaign.

After a year of another useless surge the Trump administration decided to pull back from most active operations and to bet on negotiations with the Taliban:

The shift to prioritize initial American talks with the Taliban over what has proved a futile "Afghan-led, Afghan-owned" process stems from a realization by both Afghan and American officials that President Trump's new Afghanistan strategy is not making a fundamental difference in rolling back Taliban gains.

While no date for any talks has been set, and the effort could still be derailed, the willingness of the United States to pursue direct talks is an indication of the sense of urgency in the administration to break the stalemate in Afghanistan.
...
Afghan officials and political leaders said direct American talks with the Taliban would probably then grow into negotiations that would include the Taliban, the Afghan government, the United States and Pakistan.

In February the Taliban declared their position in a public Letter of the Islamic Emirate to the American people (pdf). The five pages letter offered talks but only towards one aim:

Afghans have continued to burn for the last four decades in the fire of imposed wars. They are longing for peace and a just system but they will never tire from their just cause of defending their creed, country and nation against the invading forces of your war­mongering government because they have rendered all the previous and present historic sacrifices to safeguard their religious values and national sovereignty. If they make a deal on their sovereignty now, it would be unforgettable infidelity with their proud history and ancestors.

Last weeks talks between the Taliban and U.S. diplomats took place in Doha, Qatar. Remarkably the Afghan government was excluded. Despite the rousing tone of the Reuters report below the positions that were exchanged do not point to a successful conclusion:

According to one Taliban official, who said he was part of a four-member delegation, there were "very positive signals" from the meeting, which he said was conducted in a "friendly atmosphere" in a Doha hotel.

"You can't call it peace talks," he said. "These are a series of meetings for initiating formal and purposeful talks. We agreed to meet again soon and resolve the Afghan conflict through dialogue."
...
The two sides had discussed proposals to allow the Taliban free movement in two provinces where they would not be attacked, an idea that President Ashraf Ghani has already rejected . They also discussed Taliban participation in the Afghan government.

"The only demand they made was to allow their military bases in Afghanistan ," said the Taliban official.
...
"We have held three meetings with the U.S. and we reached a conclusion to continue talks for meaningful negotiations," said a second Taliban official.
...
"However, our delegation made it clear to them that peace can only be restored to Afghanistan when all foreign forces are withdrawn ," he said.

This does not sound promising:

It is difficult to see how especially the last mutually exclusive positions can ever be reconciled.

The Taliban are ready to accept a peaceful retreat of the U.S. forces. That is their only offer. They may agree to keep foreign Islamist fighters out of their country. The U.S. has no choice but to accept. It is currently retreating to the cities and large bases. The outlying areas will fall to the Taliban. Sooner or later the U.S. supply lines will be cut. Its bases will come under fire.

There is no staying in Afghanistan. A retreat is the only issue the U.S. can negotiate about. It is not a question of "if" but of "when".

The Soviet war in Afghanistan took nine years. The time was used to build up a halfway competent government and army that managed to hold off the insurgents for three more years after the Soviet withdrawal. The government only fell when the Soviets cut the money line. The seventeen year long U.S. occupation did not even succeed in that. The Afghan army is corrupt and its leaders are incompetent. The U.S. supplied it with expensive and complicate equipment that does not fit Afghan needs . As soon as the U.S. withdraws the whole south, the east and Kabul will immediately fall back into Taliban hands. Only the north may take a bit longer. They will probably ask China to help them in developing their country.

The erratic empire failed in another of its crazy endeavors. That will not hinder it to look for a new ones. The immense increase of the U.S. military budget, which includes 15,000 more troops, points to a new large war. Which country will be its next target?


james , Jul 30, 2018 3:26:49 PM | 2

thanks b.. it would be good if the exceptional warmongering nation could go home, but i am not fully counting on it.. i liked your quote here "The U.S. military aptly demonstrated its excellent logistic capabilities and its amazing cultural incompetence." that is ongoing.. unless the usa leaves, i think the madness continues.. i suspect the madness will continue.. the only other alternative is the usa, with the help of their good buddies - uk, ksa, qatar, uae and israel - will keep on relocating isis to afgan for future destabilization.. i watched a video peter au left from al jazzera 2017 with isis embedded in the kush mtns... until the funding for them ceases - i think the usa will have a hand in the continued madness... if the usa was serious about ending terrorism they would shut down the same middle east countries they are in bed with.. until that happens, i suspect not much will change.. i hope i am wrong..
Pft , Jul 30, 2018 3:52:04 PM | 5
I dont believe it for a second. Especially with Iran looming as a potential target. US is staying in Afghanistan also to counter China , keep opium production high and of course there is the TAPI pipeline to "protect" that is backed by US as an alternative to the Iran-Pakistan-India pipeline that would have tapped Iran's South Pars gas field. A hostile or unfriendly Pakistan is just one more reason to stay

Just like US will never leave Iraq or Syria, they will stay in Afghanistan. There will be ebbs and flows, and talk of disengagement from time to time primarily for domestic consumption, but thats all it is IMO.

Jackrabbit , Jul 30, 2018 4:01:30 PM | 7
It seems that an ISIS-Taliban proxy war has begun.

That will take pressure off USA to leave. Likely gives USA an excuse to stay (to supply fight ISIS).

Uncoy , Jul 30, 2018 4:19:49 PM | 11
This is a fine recap of the situation. It's much too optimistic. The classic method of American negotiation and warfare like the Roman before them is to divide and conquer. It was very successful against the American Indians.

If the Taliban get free movement in two provinces, the Americans will demand an end to attacks on their bases, their soldiers and their agents elsewhere in Afghanistan. Just as the Iroquois Confederation enjoyed special privileges in what is now Upper New York for their help against the French, the Taliban will have special privileges in their two provinces while the Americans consolidate in the rest of Afghanistan. When the Americans feel strong enough, just as with the Iroquois, they will break the previous treaties.

After the Revolutionary War, the ancient central fireplace of the League was re-established at Buffalo Creek. The United States and the Iroquois signed the treaty of Fort Stanwix in 1784 under which the Iroquois ceded much of their historical homeland to the Americans, which was followed by another treaty in 1794 at Canandaigua which they ceded even more land to the Americans./b

Posted by: Uncoy | Jul 30, 2018 4:03:17 PM | 8

(...continuation of the comment above, somehow got posted when I pressed the return key)

Even the Soviet Union and Russians were unable to make the American respect their commitments. The United States reneged on the Anti-Ballistic Missile Treaty as soon as it could in 2001 (Russia was on its knees), reneged on its commitments not to expand NATO east and has built ballistic missile bases all around Russia which seem to be preparation for a pre-emptive nuclear strike/war against Russia.

The Afghanis (foolish to call them the Taliban, they are traditional Afghani patriots) have always been wise enough to annihilate any invader to the last man. This salutary policy keeps invaders out for decades at a time. The Taliban have a long row to hoe. It took almost a hundred years and several massacres to finally curb British ambitions on Afghanistan (1838 to 1919). Afghanis' best hopes rely on forging tight alliances with Pakistan and China, squeezing the Americans out completely right now.

The Americans burnt their bridges with the Russian already and are in the process of burning their bridges with Pakistan while losing influence with China. The US is very short of options right now. It's the ideal time for Afghanis to reclaim the whole territory, not leaving a single American soldier or airbase operational. They'll need a technically sophisticated ally to help them clear their skies of US drones. This role might appeal to either the Russians or the Chinese. As a training exercise, extended anti-drone warfare could be very useful.

fast freddy , Jul 30, 2018 4:24:15 PM | 12
What a great success the US achieved in destroying Yugoslavia. Murdering thousands went almost unnoticed. It was able to break up the country into a number of tiny, impoverished nations and got to put a US MIC Base in most of them.

Afghanistan is one tough nut to crack.

Bilal , Jul 30, 2018 4:39:14 PM | 13
You did not mention isis-k in your analysis. Its active mostly in eastern afghanistan in areas close to or adjacent to Pakistan (it is also controlls a small area in Jawzjan, in northern afghanistan). Many fighters are formerly pakistani taliban(not to be confused with afghan taliban who are simply called taliban). Before isis-k appeared in afghanistan, the areas which it now controls had pakistani taliban presence. TTP, or tehreek e taliban pakistan was facilitated by afghan ggovernment to settle down in these areas after they fled pakistan when its military launched a large scale offensive, Operation Zarb e Azb. The afghan government planned to use them to pressurize Pakistan, basically to use them as a bargaining chip. They operate openly in eastern afghanistan, but many of them joined isis-k.

Russians estimate isis-k's strength to be between 10k to 12k, although it might be a bit inflated number. From here they plan attacks against afghanistan and pakistan alike, mostly suicide bombings as of now. They have had fierce clashes with afghan taliban in eastern Afghanistan but have held their territory for now. Afghan army simply doesn't have the capacity in those areas to confront them. It was here that MOAB was dropped but as expected against a guerrilla force, it was ineffective in every way. But it did make headlines and has helped US in giving an impression its seriously fighting ISIS. The reports of unmarked helicopters dropping god-knows-what have also been coming from these areas. Hamid karzai mentioned that and also maria zakharova asked afghan gov. and US to investigate that which shows these are not just rumors. Recently intelligence chiefs of Pakistan, russia, iran and china as well(if i remember correctly) met in islamabad to discuss isis-k in afghanistan, no details other than this of this meeting are available.

In Northern afghanistan, in Jawzjan, fierce clashes broke out between taliban and isis-k after taliban commander in thiae areas was beheaded. ISIS-k has been beaten up pretty badly there but clashes are ongoing. Many areas have been cleared but fighting is still ongoing. An interesting aspect is taliban sources claiming that whenever they come close to a decisive victory, they have to stop operations becauae of heavy bombardment by US planes. They made similar claims when fighting daesh in eastern afghanistan. Anyway in a few days isis presence will probably be finished in Jawzjan. ISIS fighters who have survived have done so by surrendering to afghan forces. They will probably end up back in eastern afghanistan.

Red Ryder , Jul 30, 2018 4:49:21 PM | 14
Next Target for a long war?

Africa. US AFRICOM has a huge playground, tactics won't change and logistics is far easier.

There also will be a long Hybrid wr against Iran, but that will be much like the early days of Syria. Proxies as "moderates". Insurgents, not US troops. ISIS and AQ crazies will be on the ground.

The big money will go into Africa. You want to see Trillions "spent"? It will be Africa.

Robert Snefjella , Jul 30, 2018 4:55:49 PM | 15
The decision to invade Afghanistan had been taken before the 9/11 false flag coup. Had nothing much to do with the CIA's al-Qaeda mercenaries.

As I understood it, there were many agendas at work: testing weapons and making money for the MIC; controlling the lucrative (how many hundreds of billions of dollars ?) opium/ heroin production/profiteering; military bases relating to Iran, Russia, China, Pakistan and other ...stans, etc; control of oil and gas pipelines; access to increasingly valuable and sought rare earth minerals; proximity to oil and gas actual and potential.

More generally, subjugating Afghanistan was a necessary part of the 'full spectrum dominance' 'we will rule the earth' doctrine, dear til recently to too many mad hatters, and still evoking a misty eyed longing in some, no doubt.

NemesisCalling , Jul 30, 2018 5:00:17 PM | 16
Ahhh...the US produces some of the lamest euphemisms approved for all audiences; such as "Afgahn Security Forces." So sterile, innocuous. And benign. How could anyone question their plight? (We did pick up the game a little bit in Syria with "Free Syrian Army..." Can I get a hell yeah?) All the people hearing this in the US could do was shrug their shoulders and speak, "I guess I should support them." That is, of course, after we took out OBL and the mission in Afghanistan was a little more opaque. Just a little bit. Anyways...Hell, yeah! Get some!

Thanks b for the brief history. Really invaluable.

StephenLaudig , Jul 30, 2018 5:26:35 PM | 17
Afghani patriots, resisting invaders since 330 BCE... https://en.wikipedia.org/wiki/Invasions_of_Afghanistan
The US military, the planet's costliest losingest military since 1946. The US military, like its munitions manufacturers, doesn't win but it does get paid and is why we can have nice things like oh, decent health care. Lack of health insurance kills more Americans than the Russians ever will. The Russians aren't the enemy, Trump is. Lobbyists are too.
Eugene , Jul 30, 2018 5:39:35 PM | 18
I haven't read anything about Blackwater wanting to replace the U.S. Military in Afghanistan. Of course, the U.S. Treasury would continue to shovel those pallet loads of newly printed $100.00 bills down the Blackwater hole. Any odds this might go forward from anyone's opinion?
Willy2 , Jul 30, 2018 5:45:04 PM | 19
- The US already started to plan an invasion of Afghanistan in januari & february of 2001.
adam gadahn , Jul 30, 2018 5:45:40 PM | 20
robin cook before he was murdered stated that alqueda was a cia data base.
i believe bresinski knew obl as tim osman who was later killed by cia mi6 man omar blah blah sheikh bhutto of pakisyan was assasinated after spilling the beans about sheikh.

christopher bolleyn on you tube will give you the sp on what 9 and 11 was shirley we are past the point of the offecal theory.
the turd burger that is the official theory is clearly the worst and lowest grade of all the conspiracy theories.
the taliban where in barbera bushes texas talking lithium opium and oil pipelines with the paedo bush crime syndicate before 9 and 11

marvin bush ran security at the twin towers

christopher bollyn is the go to man in these regardings

http://www.bollyn.com/

Peter AU 1 , Jul 30, 2018 5:55:31 PM | 21
The US wants peace talks but wants to keep its bases in Afghanistan. US under Trump has built new bases in Syria, Iraq, Kuwait.
SDF have been talking with Syrian government, and US in Talks with Taliban. Are these just moves to buy the US a little time until it launches the war Trump has been building the US military up for.
dahoit , Jul 30, 2018 6:00:22 PM | 22
Trump is?What about the neocons who started this f*ck up.
adam gadahn , Jul 30, 2018 6:02:02 PM | 23
alas not a nice number 13 bilal

isis is israeli counter gang with support of usa usa and the city of london,ukrainian,polish,uk sas,cia,kiwi,aussie,jordanian and donmeh satanic house of saud.

talking of isis as if it is real entity rather than a frank kitson gang counter gang and pseudo gang is polluting the well.

who has been providing extraction helicopters from syriana for the last 14 months.
who has been washing these bearded devils operating on them in kosher field hospitals making them well shiny and new
who?
scchhhhh you know who

Peter AU 1 , Jul 30, 2018 6:13:36 PM | 24
From Russian Ministry of Foriegn Affairs 25 March 2018.

http://www.mid.ru/en/foreign_policy/news/-/asset_publisher/cKNonkJE02Bw/content/id/3139715
"We are alarmed by the growing number of terrorist activities being carried out by the Taliban who stage armed attacks across Afghanistan, as well as by the increased ISIS presence in Afghanistan's northern provinces that border CIS countries.

We are concerned about reports regarding the use of helicopters without any identification marks in many parts of Afghanistan that are delivering terrorists and arms to the Afghan branch of this terrorist organisation. We believe that reports to this effect made by Afghan officials should be thoroughly investigated."

Willy2 , Jul 30, 2018 6:27:53 PM | 25
- Of course. The US wants to keep its bases in Afghanistan. Surprise, surprise.
In 2002 when ABC corporate propaganda showed Special Forces rounding up village Hajji, the writing was on the wall. Afghanistan is a Holy War run by incompetents for a profit. The only question is when will the Westerners withdraw from the Hindu Kush and how disastrous it will be. Americans cannot afford the unwinnable war's blood and treasure. The US's Vietnam War (1956 to 1975) ended for the same reasons. That war ushered in the Reagan Revolution and the Triumph of the Oligarchy. The consequences of the breakup of the Atlantic Alliance will be even more severe.

Posted by: VietnamVet , Jul 30, 2018 7:06:37 PM | 26

In 2002 when ABC corporate propaganda showed Special Forces rounding up village Hajji, the writing was on the wall. Afghanistan is a Holy War run by incompetents for a profit. The only question is when will the Westerners withdraw from the Hindu Kush and how disastrous it will be. Americans cannot afford the unwinnable war's blood and treasure. The US's Vietnam War (1956 to 1975) ended for the same reasons. That war ushered in the Reagan Revolution and the Triumph of the Oligarchy. The consequences of the breakup of the Atlantic Alliance will be even more severe.

Posted by: VietnamVet | Jul 30, 2018 7:06:37 PM | 26 /div

james , Jul 30, 2018 7:21:13 PM | 27
@uncoy.. i basically see it like you, however another proxy war involving usa-russia-china sounds like a running theme now...

@13 bilal.. good post.. i agree about the analysis missing much on isis presence in afgan as @6 jr also points out.. i think it is a critical bit of the puzzle.. it appears the usa is using isis as a proxy force, as obama previously stated with regard to syria... the usa just can't seem to help themselves with their divide and conquer strategy using isis as part of it's methodology... it's exact opposite of what they profess..

@18 eugene.. isn't blackwater or whatever they're called now - headquartered in uae? perfect place for them, lol... right on top of yemen, afgan, and etc. etc.. if isis can't do the job for the west thru their good friends ksa, uae - well, then maybe they can pay a bit more and get blackwater directly involved too..

dltravers , Jul 30, 2018 7:41:30 PM | 28
Trump is serious when he said he would talk to anybody. The CIA is alleged to have been stirring the pot with Islamic militants prior to the Soviet invasion when the country went full socialist. I would suspect the Russians had a hand in that in 1978. US intelligence was said to be helping along the backlash to socialism by Islamic militants back then in 1978. The CIA station chief was promptly assassinated the next year.

Obviously you could dump 600,000 NATO and US soldiers into the country and not control it short of executing every Muslim. What a foolish endeavor but what would you expect from these buffoons and their death cult? These human sacrifices are holy to them. They worship blood, death, power and money.

With their loss in Syria the NEOCONS can now make peace with the Taliban and use them and ISIS to push into old Soviet Central Asia in an attempt to deny them what the Anglo American Zionist alliance cannot have at this time, control of the commodities.

China will slide right in and take it all at some point once exhaustion sets into place. Even the Brits knew when it was time to leave India and their Middle Eastern holdings. They realized the costs of containment would wipe out their country.

Harry , Jul 30, 2018 7:53:57 PM | 29
@ Patrick Armstrong | 10
I still think Trump wants to cut the Gordian Knot and get the USA out of all this crap. https://www.cnbc.com/2018/07/30/trump-i-am-ready-to-meet-with-iran-anytime-they-want-to.html

No he doesnt, along with Israel and neocons. There was already nuclear deal, and US was out of "all this crap", so why introduce Gordian Knot if he doesnt want it?

What Trump demands is Iran's surrender. 'b discussed it at length some time ago, the list of Trump's demands is completely ridiculous and the goal is Iran as a client state.

From its side, Iran is refusing to even meet Trump, two reasons: 1) If Iran agrees to meet, it would mean they agree to renegotiate the deal, which they dont. 2) US word isnt worth a toilet paper, so any negotiations is meaningless. Plus US list of demands makes even endeavor to negotiate dead from the get go.

Curtis , Jul 30, 2018 7:54:05 PM | 30
Congress went along with the Pentagon's 7 countries in 5 years plan. No investigation of 9/11 or even consideration of Ron Paul's bringing in an old idea of Letters of Marque and Reprisal.
As to the US leaving the warlords in power to continue opium production, etc, Van Buren (We Meant Well book) said some of the same happened in Iraq with some sheikhs still holding power in local areas. General Garner looked forward to going in to rebuild (and was promising quick elections) but was shocked to see no protection of ministries (except oil) which were looted and burned. And then Bremer was put in charge. Complete mismanagement of the war, the aftermath, etc. Like someone once said, if they were doing these things at random you would expect them to get it right once in a while.

The Kunduz Airlift which allowed Pakistan a corridor to fly out Pak officials, Taliban, and possibly al Qaeda was yet another snafu like paying Pakistan to supposedly block any escape from their side of Tora Bora only to have a long convoy leave at night. It made one wonder about the US supposed air superiority/domination. Again, complete mismanagement.

A comparison to the end situation in VietNam 1975 is apt.

Peter AU 1 , Jul 30, 2018 8:11:57 PM | 31
Trump meeting Rouhani. Trump saays he wants a better deal. The nuke agreement took years to negotiate and Iran accepted far more stringent inspections than any other country signed up NPT. There is nothing more for Iran to negotiate other than to give away their sovereignty.
The offer of a meeting by Trump is more along the line of "we tried to avoid war".
The US under Trump have scrapped the nuke agreement and made demands that are impossible for Iran to meet without giving away its sovereignty.
Red Ryder , Jul 30, 2018 8:21:00 PM | 32
Erik Prince's plan for fighting in Afghanistan.
He presented it to the WH. Military rejected it.
He is no longer Blackwater-connected.
Frontier Services Group Ltd. is his new military-security services corp.
He has extensive contracts with the Chinese government and their SOEs overseas.

This was a trailer he made to explain his concept. He still wants to do this.
https://www.youtube.com/watch?v=qjhPSaqBj1c

spudski , Jul 30, 2018 8:38:09 PM | 33
Peter AU 1 @31

I fear you're absolutely right.

occidentosis , Jul 30, 2018 9:08:50 PM | 34
did you see General Souleimani answer's to Trump rabid tweet

it went like this

Our president doesnt lower himself to answer someone like.I, a soldier answer someone like you, you re someone who speaks in the vocabulary of a cabaret owner and a gambling house dealer.(paraphrasing saker has the video on his site)

and then he went on to describe how your cowad troops wore adult diapers in Afghanistan and Iraq

fairleft , Jul 30, 2018 9:25:35 PM | 35
China will slide right in and take it all at some point once exhaustion sets into place.

dltravers @28

No. China, being development-oriented rather than imperialist, will leave Afghanistan alone. China and Russia, but especially China, requires an Afghanistan that is not a U.S.-controlled terrorist base. Because China needs the oil/gas link that it is building through Pakistan to access Gulf energy resources, and that energy corridor would be the primary target of U.S.-hired mercenaries ('terrorists').

How Afghanistan manages itself in the post-U.S. era is Afghan business, but it will almost certainly involve the Pashtun majority (in the form of the 'Taliban') retaking power in Kabul but with the traditional huge amounts of autonomy for the provinces. That arrangement reduces pressure by Pashtun nationalists in Pakistan against Pakistan's government, and in general seems to be the long-term stable set up, and stability is what China has to have in Afghanistan.

Now is the time with perfect China partner Khan and the Pakistan military firmly in power. Not instant, but over the next two years I think we'll see the Taliban's fighting capacity hugely improve, with transfers of supplies, weapons and intelligence from Pakistan. It would be very smart for Trump to get out in 2019. History is going to accelerate in that region.

S , Jul 30, 2018 9:31:48 PM | 36
Which country will be its next target?

I know I'm in the minority here, but I worry a lot about Venezuela. See, it's a perfect fit for the U.S. economy. U.S. shale oil is way too light to be useful, while Venezuelan oil is way too heavy to be useful. They are destined for each other, i.e. to be mixed into a blend that would be a good fit U.S. refineries. Plus, Venezuela is very import-dependent and thus would make for a good vassal. It also has a rabid capitalist class that will do anything -- any kind of atrocity or false flag -- to return to the good old days of exploitation. "But Venezuela has a lot of arms!", I hear you counter. True, but the people are severely demoralized because of the extreme economic hardship. Think of the USSR in late 80s/early 90s. It had the most powerful military in the world, and yet people were so demoralized and disillusioned with the old system that they simply chose not to defend it. Same thing may happen in Venezuela. After Colombia has signed peace accords with FARC, U.S. has been steadily increasing its military presence in Colombia. I think there is a very real possibility of a naval blockade combined with supply lines/air raids from Colombia supporting the "Free Venezuelan Army" assembled from Venezuelan gangs and revanchist capitalists and foreign mercenaries. It would be logistically impossible for Russia or China to provide military help to far-away Venezuela. Neighbors will not come to the aid of Venezuela either as there is a surge of pro-U.S. right-wing governments in the region.

ben , Jul 30, 2018 9:33:25 PM | 37
Any moves the U$A makes will have to be approved according to which natural resources their corporate masters covet at any particular moment. Lithium and other rare earth minerals, strategic importance, whatever the corporate form needs to stay on top globally, will dictate what the empire does.

Leave Afghanistan? I very much doubt it.

DJT will do what the "puppet masters" desire. Just like all his predecessors.

Profits uber alles!!

fairleft , Jul 30, 2018 9:36:15 PM | 38
'Correction': No reliable census has been done in decades, but I don't think the Pashtun are the majority in Afghanistan. They
are by far the largest minority however. British 'divide and rule' stategists long ago deliberately separated them into Pakistan and Afghanistan.
Peter AU 1 , Jul 30, 2018 9:40:53 PM | 39
s 36

Venezuela and Iran have two things in common. Both have large oil reserves and neither recognize Israel.
Trump's wars will be about destroying enemies of Israel, and at the same time, achieving global energy dominance.

Chipnik , Jul 30, 2018 9:58:21 PM | 40
I've posted this before. I met a Taliban leader and his two guards in a brutal area during the Hearts and Minds Schtick, preparatory to Cheney getting all the oil and gas, and copper and iron and coming coal lease awards.

He was a nice guy, the Taliban leader. His guards looked at me with absolute death in their eyes. Not wanting them to hear him, as we finished our tea, the Taliban leader leaned close, then whispered, 'I love your Jesus, but I hate your Crusaders.'

And I take issue with the US 'incompetence' meme. Ever since Cheney hosted the Taliban in Texas in 1998, trying to get a TAPI pipeline, the US has deliberately and cunningly taken over the country, assassinated the local-level leadership, and installed their foreign Shah, first Karzai, then Ghani.

In that time of occupation, 18 years, Pentagon MIC disappeared TRILLIONS in shrink-wrapped pallets of $100s, and ballooned from $340B a year, to now Trump is saying $840B a year.

That's not incompetence. Just the opposite.

Now, to honor my Afghan friends, who love to joke even after 35+ years of machine warfare, a joke I wrote in their honor:

Ring ring ring ring

"Office of the President of the United States, Ronald Reagan!"

"BRRZZZBRRZZZV..."

"Hold please."

President Reagan, it's the Iranian ambassador!"

"Well hello Mr. Assinabindstani, what can I do for you?"

"BRRZZZBRRZZZV..."

"Well I'll get my staff right on it."

[Intercomm clicks]

"Hey Ollie, the Ayatollah wants more guns! Step on it!"

Chipnik , Jul 30, 2018 10:10:55 PM | 41
38

Actually, the British paid an annual tithe-tribute the the Afghan king to stop raiding their India holdings, and agreed to a neutral zone between them. Then when the British pulled out, they declared the neutral zone as Pakistan and shrunk India away from Pashtun territory to create a bigger divide. The Afghan leaders had no say in the matter. I believe Baluchistan was also carved away. At one time, Afghan control extended from Persia to the Indus Valley. There is no way to defeat a nation of warriors who created a kingdom that vast, while William the Conqueror was still running around in bear skin diapers.

dh , Jul 30, 2018 11:03:19 PM | 42
@41 'Afghan control extended from Persia to the Indus Valley.'

You are probably referring to the Khalji Dynasty, a brutal bunch, who ruled India from 1290 to 1320 by which time William the Conqueror was long dead. You would be a lot more credible if you got your history right.

Lozion , Jul 30, 2018 11:30:50 PM | 43
@42 dh is correct. Afghan territory was in the Persian sphere of influence much longer compared to the Mughal/British/Indian periods..
Charles Michael , Jul 31, 2018 12:19:59 AM | 44
IMHO the military Budget increase, and what an increase it is!
is part of worsening an already outrageous situation to reach a caricatural point. Typical of trump repeated special "art".
Of course Nobody in USA, no President can go against the MIC and Pentagon.
But money is cheap when you print it.

It is sugaring the intended shrinking of foreign deployments (as in NATO), closure of "facilities" and replacing them officially with total deterrence capacities (Space Forces anybody ?).
While keeping classical projection capacities for demonstration against backward tribes.

Guerrero , Jul 31, 2018 12:21:04 AM | 45
That is an excellent account. Who can help rooting for the Afghanis to get their country back?

The economics of empire are always upside down; the homeland people end up shelling out for it.

Hoarsewhisperer , Jul 31, 2018 12:26:51 AM | 46
...
From its side, Iran is refusing to even meet Trump, two reasons: 1) If Iran agrees to meet, it would mean they agree to renegotiate the deal, which they dont. 2) US word isnt worth a toilet paper, so any negotiations is meaningless. Plus US list of demands makes even endeavor to negotiate dead from the get go.
Posted by: Harry | Jul 30, 2018 7:53:57 PM | 29

Tru-ish but Trump's latest offer is, according to the MSM, "no pre-conditions." It's quite likely that Iran's allies have advised the Iranians to tell Trump to Go F*ck yourself (if you feel you must), but then satisfy yourselves that Trump's No Preconditions means what Iran wants it to mean.

Trump jumped into the NK and Putin talks first because both were eager to talk. Iran will be a good test of Trump's seduction skills. All he's got to do is persuade the Iranians that talking is more useful than swapping long-distance insults. Iranians are rusted onto logical principles and Trump will find a way to appeal to that trait, imo.

Ian , Jul 31, 2018 12:41:07 AM | 47
Which country will be its next target?

Iran.

Debsisdead , Jul 31, 2018 1:11:58 AM | 48
It's too late for the afghanis who have been driven into the urban areas during the regulaar 'Afghanistanisation' campaigns. Most of them will have become hooked on consumerism and the necessity of dollars.
That leaves only two options for the Taliban when they take over as they undoubtedly will altho that is likely to mean having to tolerate clutches of obese amerikans lurking in some Px strewn green zone, the inhabitants of which are likely to have less contact with people from Afghanistan than any regular user of a Californian shopping mall. The new government can ignore the consumerists even when these rejects insist on getting lured into some nonsense green revolution - the danger with this isn't the vapid protests which can easily be dealt with by fetching a few mobs of staunch citizens from rural Afghanistan who will quickly teach them that neither cheeseburgers nor close captioned episodes of daytime television provide sufficient nutrition to handle compatriots raised on traditional food and Islam. Or the new administration can do as other traditional regimes have done many times over the last 80 years or so, purge the consumerists by disappearing the leadership and strewing empty lots in the urban areas with mutilated corpses of a few of the shitkicker class consumerists. That option can cause a bit of a fuss but it (the fuss) generally only lasts as long as the purge.

I suspect the Afghan government will favour the latter approach but they may try to hold off until the North has been brought back into line. OTH, consumerism is a highly contagious condition so, unless the North can be pacified speedily which seems unlikely, initially at least the Taliban adminsitration may have to fight on two fronts, agin the North while they nip urban consumerists in the bud before those confused fools can cause any highly publicised in the west but in actuality, low key, attempted insurrection.
My advice to the gaming, TV or cheeseburger addicted inhabitants of Kabul would be to volunteer your services to the amerikan military as a 'translator' asap and join yer cobbers in California.
It is unlikely that you will bump into Roman Brady especially not when he is in one of his avuncular moods, but if you stay outta Texas, Florida or any other part of flyover amerika chocka with alcohol induced blowhardism, you will discover than amerikan racism isn't as lethal as it once was.

Apart from having to ignore being jostled in the line at fast food joints and being loudly and incorrectly termed a motherf**in sand n***er mid-jostle. Certainly a whole lot less lethal than trying to cover your Fortnite jones by waving a badly copywritten sign in front of the al-Jazeera cameras for a one month battle pass .

AV17 , Jul 31, 2018 1:49:03 AM | 49
This retreat is to focus resources on Iran. Nuclear Winter it is!
Daniel , Jul 31, 2018 2:05:21 AM | 50
What was happening in Kabul, Afghanistan less than 8 hours after the WTC Towers turned into dust in midair? Who here remembers the massive bombing/cruise missile attack?

Here is CNN's transcript:

NIC ROBERTSON, CNN CORRESPONDENT: "Well, Joie, it's about 2:30 in the morning here in Kabul. We've been hearing explosions around the perimeter of the city. We're in a position here which gives us a view over the whole city. We just had an impact, perhaps a few miles away.

"If I listen, you can hear the ripple of explosions around the city. Perhaps you heard there. The fifth explosion -- sixth explosion, I think. Gun bursts and star bursts in the air. Tracer fire is coming up out of the city. I hear aircraft flying above the city of Kabul. Perhaps we've heard half a dozen to 10 detonations on the perimeter of the city, some coming from the area close to the airport. I see on the horizon what could be a fire on the horizon, close, perhaps, to where the airport might be. A flash came up then from the airport. Some ground fire coming up here in Kabul."

"I've been in Belgrade and I've been in Baghdad and seen cruise missiles arrive in both those cities. The detonations we're hearing in Kabul right now certainly sound like the detonations of loud missiles that are coming in. "

"Certainly -- certainly it would appear that the Afghan defense systems have detected a threat in the air. They are launching what appears to be anti-aircraft defense systems at the moment. Certainly, I can see that fire that was blazing on the horizon. It was a faint yellow; it's now a bright orange blazing. Several other detonations going off around the city, multiple areas. Rockets appear to be taking off from one end of the airport. I can see that perhaps located about 8 or 9 miles away from where we stand, Joie."

The bombing/explosions continue for 10+ minutes of this broadcast.

Then, they cut to WILLIAM COHEN, FORMER SECRETARY OF DEFENSE: who says the US is only collecting intelligence. He says what we're seeing must be part of the "Civil War" (despite the fact that neither side had an air force or cruise missiles). The Pentagon later denies knowing anything about it.

Then, CNN returns to Nic Robertson, who- within 15 minutes of his first report - begins to change his tune. Suddenly, the jet sounds are not mentioned. The cruise missiles (jet engines) have transformed into possible rockets. The airport fire is now an ammunition dump.

And voila! They lose their connection and Nic will not be heard from again. And this little bit of history will essentially disappear.

CNN video archive (attack report starts at 7:43).

http://transcripts.cnn.com/TRANSCRIPTS/0109/11/bn.61.html

NPR had a reporter in Kabul that night. He apparently didn't notice the massive bombing, at least in his memoir 15 years later.

Mishko , Jul 31, 2018 2:07:19 AM | 51
Dear Mr. B,
"All these U.S. mistakes made in the early days are still haunting the country."
These mistakes are by design. To cause and keep causing destabilisation.

I like to refer to it as the 3-letter Scrabble method of doing things.
Me living in the Netherlands as I do, let me take the example of Greece.
Greece had its regime changed in 1948 (Wiki says 46-49).
And how is Greece doing these days? ...

Plasma , Jul 31, 2018 2:16:47 AM | 52
@37 yep, gotta agree with the more passimistic outlook here. Personally i'll eat my shoes if US leaves Afghanistan within any reasonable time frame. In addition to plentiful natural resources, there are very influential vested interests in Afghanistans booming opium industry.
Quentin , Jul 31, 2018 2:20:09 AM | 53
Off topic: Andrei Nekrasov's 'Magnitsky Act: Behind the Scenes' can be viewed in full on You Tube at this moment (31 July, 08:15 Amsterdam time). Can it also be seen in the USA, I wonder? How long will it take before Google take it down ? Watch it and learn about one of the main drivers of the Russia obsession.
Andreas Schlüter , Jul 31, 2018 3:35:18 AM | 54
The US (Neocon dominated) Power Elite has only one strategy left for that Region: destabilization and chaos to serve as a barrier against the Project of the Eurasian Cooperation!
See:
„Geo-Politics: The Core of Crisis and Chaos and the Nightmares of the US Power Elite" https://wipokuli.wordpress.com/2016/08/01/geo-politics-the-core-of-crisis-and-chaos-the-nightmares-of-the-us-power-elite/
And on the recent developments:
"US Politics, Russia, China and Europe, Madness and Strategies": https://wipokuli.wordpress.com/2018/07/22/us-politics-russia-china-and-europe-madness-and-strategies/
Best regards
Harry , Jul 31, 2018 4:35:59 AM | 55
@ Hoarsewhisperer | 46
Tru-ish but Trump's latest offer is, according to the MSM, "no pre-conditions." It's quite likely that Iran's allies have advised the Iranians to tell Trump to Go F*ck yourself (if you feel you must), but then satisfy yourselves that Trump's No Preconditions means what Iran wants it to mean.

White House just explained what Trump's "no preconditions" means: 1) Iran should at the core change how it deals with its own people. 2) Change its evil stance in foreign policy. 3) Agree on nuclear agreement which would REALLY prevent them making a nuke.

In other words, Iran should capitulate and become a client state, thats what Trump means by "no preconditions."

venice12 , Jul 31, 2018 4:53:03 AM | 56
@eugene #18

https://taskandpurpose.com/blackwater-eric-prince-afghan-war-plan/

"Blackwater Founder Erik Prince's Afghan War Plan Just Leaked, And It's Terrifying "

Tis was 8 months ago.

et Al , Jul 31, 2018 5:04:41 AM | 57
Afghanistan, the graveyard of empires!

When I heard old hand Gulbuddin Hekmatyar (what a name!) was heading back it was clear that things were afoot.

China's been trying to get in for a while, the Mes Aynak mine for example, but nothing much has happened.

Afghanistan is sitting on huge amounts of valuable mineral resources (an estimated $3t) but remains dirt poor...

ashley albanese , Jul 31, 2018 6:42:37 AM | 58
In any hot clash with China the U S would be very exposed in Afghanistan .
Mark2 , Jul 31, 2018 6:51:36 AM | 59
At this advanced stage of American insanity, I don't see why the devil should have all the best tunes. I'm sick of the yanks doing this shit in over people's county's ! While they stuff there fat faces with burgers and donuts! The dirty games they play on over country's, should now be played in America with all the brutality that they have used on others. Until that happens things world wide will continue to detriate. Natural justice is all that remains. They'v curupted all else.
Yeah, Right , Jul 31, 2018 7:09:00 AM | 60
@19 "The US already started to plan an invasion of Afghanistan in januari & february of 2001."

Well, to be fair the USA probably has plans to invade lots of countries.

Indeed, it would be more interesting to consider how many countries there are that the USA *doesn't* have invasion plans gathering dust on the shelves.

Not many, I would suggest.

Mark2 , Jul 31, 2018 7:41:56 AM | 61
It's just been reported on the bbc news---- the man responsible for the Manchester bombing had been 'rescued from Lybia when Gadafi was overthrown and tracked ever since. Even in Britain up to the day of the bombing ! And now on this post we discuss America uk transporting terrorists from Syria to Afganistan . Not to mention the white helmet bunch and where Ther going! The Manchester bombing, Westminster bridge and London Bridge atacks were done by the Tory party to win a general election ! This is the reality of the world we live in.full on oppression !!!
TG , Jul 31, 2018 8:26:48 AM | 62
Indeed, I agree with the sentiments here. But missing a big part of the picture.

Afghanistan and Pakistan have sky-high fertility rates. Forget the rubbish peddled by economist-whores like Milton Friedman, under these conditions no country without an open frontier has ever developed into anything other than a larger mass of poverty. In Pakistan something like half the children are so malnourished that they grow up stunted, and it is this misery that is starting slow population growth. Pakistan is yet another example of the Malthusian holocaust, which is not a global catastrophe: it is slow grinding poverty that results when people have more children than they can support.

Bottom line: these places will remain poor and unstable no matter what lunacy the United States does or does not do. The traditional approach to such places is to leave them alone, and only keep them from escaping. Bottled up, the Afghanis and Pakistanis will kill only each other. 9/11 is a consequence of allowing people from these places free access to the Untied States.

The 'war on terror' is a consequence of 'there shall be open borders.' It's a big and messy world, and even if the government of the United States was not criminally incompetent, there would be a lot of misery and hatred in it. Open borders means that now the Untied States has to intervene in every country all over the world to ensure that nowhere can there develop terrorist cells. An impossible task.

Charles Michael @ 44

I agree with the caricature nature of much of this. I don't think there will be a next target. The MIC has become bloated while Iran, Syria, Russia, China are turning out true fighters as well as stronger economic planning.

div
Charles Michael @ 44

I agree with the caricature nature of much of this. I don't think there will be a next target. The MIC has become bloated while Iran, Syria, Russia, China are turning out true fighters as well as stronger economic planning.

div
financial matters , Jul 31, 2018 9:19:51 AM | 63
The US still has some resources and some use but needs to continue to make friends in the pattern of Kim and Putin and give up on its self defeating economic and military sabotage planning which has been exposed as morally bankrupt as well.

[Jul 29, 2018] Time to Talk to the Taliban by Daniel L. Davis

Too many US clans are profiting from the war...
Notable quotes:
"... While agree totally with what Col. Davis says here about ending America's involvement in the Afghanistan War. Way to many are profiting from this long-term misadventure. ..."
"... Eminently sensible advice, except that Trump can't take it without being greeted with a hysterical chorus of "we're losing Afghanistan ZOMG!" (as if we ever had it) and "Putin puppet!" ..."
"... "Of course most Americans are clueless about the cost of these wars and how it impacts money necessary to re-build our country infrastructures." ..."
"... Completely disagree. I don't know a single individual who supports the war in Afghanistan or misunderstands its costs. The American people just have no say in the matter. ..."
"... Finally, they realise what St Ronnie knew in the 1980s. He created the Taliban we know today via Operation Cyclone. Maybe Ollie North can lead the negotiations? He seems to have a good channel to the Iranians ..."
"... Putting together Sid_finster's and spite's comments paints an interesting picture. Aside from war profiteering (Fran Macadam) there is no real purpose served by our occupation except to be there. ..."
"... I'll go a step further and say that the invasion of Afghanistan was unnecessary too. We were not attacked by Afghanistan. We were not even attacked by the Taliban. We were attacked by al Quaida, by teams comprised mostly of Saudi Arabians. ..."
"... It cannot be repeated too often that Afghanistan is the graveyard of empires. Let the Taliban have it. ..."
"... What the Army could not do, and still cannot do, is transform a tribal society in isolated mountainous terrain into a liberal democracy. As LTC Davis observes: "The reason McChrystal failed to end the war -- and Miller will likewise fail -- is that these objectives can't be militarily accomplished." ..."
"... The conclusion of this simple argument is that the war in Afghanistan actually has almost nothing to do with that country and almost entirely to do with the political and economic demands arising from the US .nothing to do with Afghanistan other than the destruction of the place and its people. ..."
Jul 24, 2018 | www.theamericanconservative.com
We have no choice. The 17-year war in Afghanistan has failed at every level, while the violence is only getting worse.

Reports have surfaced recently that the White House is instructing its senior diplomats to begin seeking "direct talks with the Taliban." It's a measure that would have been unthinkable at the start of the Afghanistan war yet today it's long overdue. Despite the criticism it's elicited, such talks offer the best chance of ending America's longest and most futile war.

While there is broad agreement that American leaders were justified in launching military operations in Afghanistan following the 9/11 attacks, it's painfully evident after 17 years that no one has any idea how to end the fighting on military terms.

Possibly the biggest impediment to ending the war has been the definition of the word "win." General Stanley McChrystal said in 2009 that winning in Afghanistan meant "reversing the perceived momentum" of the Taliban, "seek[ing] rapid growth of Afghan national security forces," and "tackl[ing] the issue of predatory corruption by some" Afghan officials.

Nine full years and zero successes later, however, Lieutenant General Austin S. Miller, latest in line to command U.S. troops in Afghanistan, defined as America's "core goal" at his confirmation hearing that "terrorists can never again use Afghanistan as a safe haven to threaten the United States."

The reason McChrystal failed to end the war -- and Miller will likewise fail -- is that these objectives can't be militarily accomplished. Predicating an end to the war on such is to guarantee perpetual failure. A major course correction is therefore in order.

Keeping 15,000 U.S. troops on the ground in Afghanistan does not, in any way , prevent terror attacks against the United States from originating there -- and for this lack of success we will pay at least $45 billion this year alone. The real solution is therefore to withdraw our troops as quickly as can be safely accomplished rather than throw more of them into a fruitless conflict.

I personally observed in 2011 during my second combat deployment in Afghanistan that even with 140,000 U.S. and NATO boots on the ground, there were still vast swaths of the country that were ungoverned and off-limits to allied troops.

Meaning, at no point since October 2001 has American military power prevented Afghanistan from having ungoverned spaces. What has kept us safe, however -- and will continue to keep us safe -- has been our robust, globally focused intelligence, surveillance, and reconnaissance capabilities that work in concert with the CIA, FBI, and local law enforcement to defend our borders from external attack.

Many pundits claim that if the U.S. military withdraws from Afghanistan then chaos will reign there -- and that is almost certainly true. But that's how we found Afghanistan, that's how it is today, and -- wholly irrespective of when or under what conditions the U.S. leaves -- that's how it will be long into the future until Afghans themselves come to an accommodation.

The question U.S. policymakers need to ask is which is more important to American interests: the maintenance of a perpetually costly war that fails to prevent any future attacks, or ending America's participation in that war?

Continuing to fight for a country that can't be won cements a policy that has drained the U.S. of vital resources, spilled the blood of American service members to no effect, and dissipated the Armed Forces' ability to defend against potentially existential threats later on -- while in the meantime not diminishing the threat of international terrorism. To strengthen our national security, we must end the enduring policy of failure by prudently and effectively ending our military mission.

While the fundamentals of a withdrawal plan are relatively straightforward, they would still be met by considerable opposition. One of the arguments against leaving was voiced by McChrystal nine years ago when he pleaded with the American public to "show resolve" because "uncertainty disheartens our allies [and] emboldens our foe." Yet the facts can't be denied any longer: for all eight years of the Obama administration and the first 500 days of Trump's tenure, we maintained that "resolve" and were rewarded with an unequivocal deterioration of the war.

Since McChrystal's admonition to maintain the status quo, the Taliban have exploded in strength to reportedly 77,000 , more territory is now in the hands of the insurgents than at any point since 2001 , the Afghan government remains one of the most corrupt regimes on the planet, and civilian casualties in the first half of 2018 are the highest ever recorded .

The only way this permanent failure ends is if President Trump shows the courage he has sometimes demonstrated to push back against the Washington establishment. That means ignoring the status quo that holds our security hostage, ending the war, and redeploying our troops. Without that resolve, we can count on continued failure in Afghanistan. With it, American security will be strengthened and readiness improved.

Daniel L. Davis is a senior fellow at Defense Priorities and a former lieutenant colonel in the U.S. Army who retired in 2015 after 21 years, including four combat deployments. Follow him on Twitter @DanielLDavis1 .


Fred Bowman July 24, 2018 at 1:29 pm

While agree totally with what Col. Davis says here about ending America's involvement in the Afghanistan War. Way to many are profiting from this long-term misadventure. The only way these wars of choice will ever end is when Congress has the balls to cut off funding. Of course most Americans are clueless about the cost of these wars and how it impacts money necessary to re-build our country infrastructures. Military madness indeed.
Sid_finster , says: July 24, 2018 at 2:06 pm
Eminently sensible advice, except that Trump can't take it without being greeted with a hysterical chorus of "we're losing Afghanistan ZOMG!" (as if we ever had it) and "Putin puppet!"

If Trump were going to leave, he should have done so soon after taking office. At least then he could blame his predecessors.

That country is Trump's baby now.

Fran Macadam , says: July 24, 2018 at 3:37 pm
The financial security of the National Security State and its suppliers now depends on no war ever ending or being won. The new definition of defeat is having any war end. As long as it continues, that war is being won.
Kent , says: July 24, 2018 at 4:31 pm
"Of course most Americans are clueless about the cost of these wars and how it impacts money necessary to re-build our country infrastructures."

Completely disagree. I don't know a single individual who supports the war in Afghanistan or misunderstands its costs. The American people just have no say in the matter.

spite , says: July 24, 2018 at 5:31 pm
There is only one reason why the USA is still in Afghanistan that makes sense (all the official reasons are an insult to ones intelligence), it borders on Iran and thus serves as a means to open a new front against Iran. The more the US pushes for war against Iran, the more this seems correct.
EliteCommInc. , says: July 24, 2018 at 5:43 pm
"Reports have surfaced recently that the White House is instructing its senior diplomats to begin seeking "direct talks with the Taliban."

I have to give my Jr High response here:

"Well, duh."
__________________

"While there is broad agreement that American leaders were justified in launching military operations in Afghanistan following the 9/11 attacks . . ."

Yeah . . . no.

1. They manipulated the game to make what was a crime an act of war to justify the an unnecessary, unethical, and strategically unwise invasion. I remain now where I was 14 years ago -- bad decision in every way.

2. It was even a poor decision based on reason for war. To utterly bend the will of the opponent to conform to the will of the US. it is possible to win. But to do so would require such massive force, brutality and will.

3. 9/11 was a simple criminal act, despite the damage. As a crime we should have sought extradition, and or small team FBI and special forces operations to a small footprint in either capturing, and or if need be killing Osama bin Laden and company.

Nothing that has occurred since 9/11 provides evidence that the invasion was either justified or effective. It will if the end game is to quit be one of three losses suffered by the US.

They are: War of 1812
Iraq
Afghanistan

" . . . it's painfully evident after 17 years that no one has any idea how to end the fighting on military terms."

Sure leave. Though talking so as to avert whole slaughter of those that aided the US is the decent thing to do.

Whine Merchant , says: July 24, 2018 at 5:48 pm
Finally, they realise what St Ronnie knew in the 1980s. He created the Taliban we know today via Operation Cyclone. Maybe Ollie North can lead the negotiations? He seems to have a good channel to the Iranians
Janek , says: July 24, 2018 at 6:05 pm
Solving USA problems in Afghanistan an at the same time pushing for war with Iran is by definition classic oxymoron. Afghanistan's problems can only be solved with cooperation and understanding with Iran. Conflict of the USA with Iran will extend indefinitely the suffering of the Afghanis and the eventual lose of the Afghanistan and Iran to the Russia. Always reigniting and keeping on the front burner the conflict with Iran by the USA is exactly what Russia and V. Putin want. I can't see any other politicians except D. Trump, B. Netanyahu and American 'conservatives' for the advancement of the Russia's goals in the Middle East and in the globalistan. These are the new XXI century 'useful (adjective)'.
Myron Hudson , says: July 24, 2018 at 6:22 pm
Putting together Sid_finster's and spite's comments paints an interesting picture. Aside from war profiteering (Fran Macadam) there is no real purpose served by our occupation except to be there.

I'll go a step further and say that the invasion of Afghanistan was unnecessary too. We were not attacked by Afghanistan. We were not even attacked by the Taliban. We were attacked by al Quaida, by teams comprised mostly of Saudi Arabians. This should have been a dirty knife fight in all the back alleys of the world, but we responded to the sucker punch as our attackers intended; getting into a brawl with somebody else in the same bar; eventually, with more than one somebody else.

It cannot be repeated too often that Afghanistan is the graveyard of empires. Let the Taliban have it.

TG , says: July 25, 2018 at 8:28 am
Indeed, but as others have commented, the entire point of the Afghanistan war is that it is pointless. It can suck up enormous amounts of money, and generate incredible profits for politically connected defense contractors – and because Afghanistan is in fact pointless, it doesn't matter if all of that money is wasted or stolen, how could you tell? The vested interest in these winless pointless foreign wars means that they will continue until the American economy finally collapses – and anyone who opposes these wars is a fascist, a Russian stooge, "literally Hitler." Because money.
EarlyBird , says: July 25, 2018 at 4:22 pm
Thank you for this. I am very surprised to learn that Trump is pursuing this, given his pugilistic nature. I hope he does in fact, get us the hell out of there. He may be, like Nixon, the one who is politically able to make this smart move. Can you imagine the Republican outrage if Obama had tried a diplomatic exit from this sand trap?

We can still be proud of what we attempted to do there. A few years post-9/11, an Afghan colleague of mine who had come to the US as a boy said, "9/11 is the best thing to ever happen to Afghanistan." He meant that rather than carpet bombing Afghanistan "back to the Stone Age," as the left predicted the US would do, we poured billions of dollars in aide to build schools, hospitals, sewage and water plants, roads, etc.

EliteCommInc. , says: July 25, 2018 at 8:29 pm
"He meant that rather than carpet bombing Afghanistan "back to the Stone Age," as the left predicted the US would do, we poured billions of dollars in aide to build schools, hospitals, sewage and water plants, roads, etc."

And we could have done a lot more if we had not invaded. The Taliban had nothing to do with 9/11.

furbo , says: July 26, 2018 at 4:47 pm
The achievable operational level Military objectives in the Afghan war were accomplished in the first year; The Taliban were out of power and hiding in Pakistan and the Afghans had a somewhat benevolent government that wanted to guarantee security an property and a measure of individual liberty.

What the Army could not do, and still cannot do, is transform a tribal society in isolated mountainous terrain into a liberal democracy. As LTC Davis observes: "The reason McChrystal failed to end the war -- and Miller will likewise fail -- is that these objectives can't be militarily accomplished."

This has been particularly true with the intense guerrilla actions enabled by the Pakistanis who have a vested interest in an unstable Afghanistan.

I believe the noble goals 'might' have been doable – but it would have required a level of effort, and more importantly a 'cultural confidence' on par with the Roman Empire of the 2nd Century to pull it off. That is no longer us.

masmanz , says: July 27, 2018 at 1:29 am
"9/11 is the best thing to ever happen to Afghanistan"? I bet none of his family members died or suffered. Probably they are all living in the US. Are we supposed to feel proud that instead of carpet bombing and killing millions our war killed only a hundred thousand?
Wizard , says: July 27, 2018 at 9:53 am
Sadly, Kent, I do know people who still claim that our continued presence in Afghanistan is a good thing. Some of these are otherwise fairly bright people, so I really can't comprehend why they continue to buy into this idiocy.
James Keye , says: July 27, 2018 at 12:12 pm
Afghanistan must be Afghanistan and the US must be the US; this is such a simple tautology. If the US leaves, Afghanistan will become what ever it can for its own reasons and options. If the US stays, it will be for the US' reasons, not for the Afghans.

The conclusion of this simple argument is that the war in Afghanistan actually has almost nothing to do with that country and almost entirely to do with the political and economic demands arising from the US .nothing to do with Afghanistan other than the destruction of the place and its people.

[Jul 23, 2018] Christianity was formed after Jesus was executed to protect the money lenders as a protest against debt slavery

Jul 23, 2018 | www.moonofalabama.org

Pft , Jul 23, 2018 1:27:18 AM | 43

So most folks never heard of a guy named Hillel. He was a Baghdad Jew who moved to Judea about 60 years before Christ was born.

His great influence on Judaism was a novel invention to get around the Jubilee which many civilizations employed snd was part of Judaism Mosaic Law. Basically every 7 years debts were cancelled to prevent the elites from accumulating all the land and wealth and enslaving the bottom 99% and causing rebellion. Much of the debt forgiven was owed to the state in the form of taxes but individuals and business also were indebted to money lenders . Debt of individuals acquired to pay taxes, farm, etc was forgiven by the Jubilee. Business /Merchant debts had to be repaid

https://www.counterpunch.org/2018/01/19/could-should-jubilee-debt-cancellations-be-reintroduced-today/

The rabbiis of the Pharisees under the suggestion of Hillel the Elder, created a loophole in Jewish law, in which a legal document would accompany the interest-free loans (charging interest to fellow Jews was forbidden in the Torah) issued by individuals that stated that the loans were to be transferred to the courts as the law of remission does not apply In this case.
It was called a Prosbul.

This led to great unrest among Jews and non Jews alike. This unrest led to a Jewish activist named Jesus leading a protest against the Pharisees and the money lenders. Michael Hudson has a theory backed up by historical documents in the original Aramaic,Hebrew and Greek that Mosaic Law is mostly about the prohibitions of the sins related to debt and the sinful practices of creditors to secure repayment. Translations into English and other languages have obscured this.

Christianity was formed after Jesus was executed to protect the money lenders . Unfortunately the Romans were pro creditor and then Constantine hijacked the religion a couple of centuries later , and aside from a prohibition on usury by the Roman Church the Jubilee was no more. When the Roman Empire fell the Byzantine Emperor reinstated the Jubilee from 7th-10th Century and abandoned this . I imagine this wad due to the Islamic Wars that required external loans to finance at interest.

Judaism still use the prosbul today , at least in Orthodox , to escape the Jubilee called for in Mosaic Law . That applied only for loans to Jews in any event. Prohibitions of usury in the Christian world ended pretty much with the Reformation and Calvinism. Even so in the US their were limits on usury in many US states until early 1980's when neoliberalism crushed that. Now the poor get charged as much as 30% on credit card debt while earning 2% on savings and they cant even declare bankruptcy like Trump did 6 times

Islamic banking is interest free though under Sharia Law. "Loans are equity-based, asset-backed. In lieu of interest the banks rely on cost-plus financing (murabaha), profit-sharing (mudaraba), leasing (ijara), partnership (musharaka) and forward sale (bay'salam).

"This prohibition is based on arguments of social justice, equality, and property rights. Islam encourages the earning of profits but forbids the charging of interest because profits, determined ex post, symbolize successful entrepreneurship and creation of additional wealth whereas interest, determined ex ante, is a cost that is accrued irrespective of the outcome of business operations and may not create wealth if there are business losses. Social justice demands that borrowers and lenders share rewards as well as losses in an equitable fashion and that the process of wealth accumulation and distribution in the economy be fair and representative of true productivity.


"Risk sharing. Because interest is prohibited, suppliers of funds become investors instead of creditors. The provider of financial capital and the entrepreneur share business risks in return for shares of the profits."

"Money as "potential" capital. Money is treated as "potential" capital -- that is, it becomes actual capital only when it joins hands with other resources to undertake a productive activity. Islam recognizes the time value of money, but only when it acts as capital, not when it is "potential" capital."

"Prohibition of speculative behavior. An Islamic financial system discourages hoarding and prohibits transactions featuring extreme uncertainties, gambling, and risks."

So maybe the war against Islam has another component?

Getting back to Jesus. Hudson says the Pharisees decided that Jesus' growing popularity was a threat to their authority and wealth.

http://michael-hudson.com/2017/12/he-died-for-our-debt-not-our-sins/

"They said 'we've got to get rid of this guy and rewrite Judaism and make it about sex instead of a class war', which is really what the whole Old Testament is about,"


"That was that was where Christianity got perverted. Christianity turned so anti-Jesus, it was the equivalent of the American Tea Party, applauding wealth and even greed, Ayn-Rand style."


"Over the last 1000 years the Catholic Church has been saying it's noble to be poor. But Jesus never said it was good to be poor. What he said was that rich people are greedy and corrupt. That's what Socrates was saying, as well as Aristotle and the Stoic Roman philosophers, the biblical prophets in Isaiah."


"Neither did Jesus say that it was good to be poor because it made you noble.

"What Jesus did say is that say if you have money, you should share it with other people."


"American Fundamentalist Christians say don't share a penny. King Jesus is going to make you rich. Don't tax millionaires. Jesus may help me win the lottery. Tax poor people whom the Lord has left behind – no doubt for their sins. There's nothing about the Jubilee Year here."

Hudson has a book coming out next week on the subject

.

Guerrero , Jul 23, 2018 2:32:12 AM | 44
Pft, I am interested in your discourse; are their grounds for a scientific gifting economy?

What I mean is: does a model exist for a human society that has followed Christ's teaching

I know that after he was gone, his mother Mary said "my son never touched a single penny"

Is this credible? Is there an archeological reading of any society not based on greed?

I think there may be. They didn't have to do bookkeeping, a source of constant happiness,

but it's is the loss of posterity since we can wonder and speculate about gift economics.

This isn't a joke, nor is it irony. Dear Pft, ¿Can you say more about biblical etc. utopia?

[Jul 09, 2018] Why Was Malaysian Airlines Flight MH17 Shot Down, by Kees van der Pijl

Notable quotes:
"... Today, Western imperialism projects its global power, as far as capital is concerned, primarily from the perspective of speculative, financial asset investment. Long gone are the days of class and international compromise forced upon it after World War Two. Instead, the predatory instincts of dominant financial capital require forcibly opening up all states for commodification and exploitation. Given the global spread of product and commodity chains, the continued flow of profits to the West cannot be taken for granted as long as effective state sovereignty elsewhere persists. For the liberal, Anglophone heartland of capital, 'defence' is therefore not merely, or even primarily, a matter of upholding the territorial integrity of the states constituting it, but keeping open the arterial system of the global economy and maintaining the centrality of the West. Regime change is a logical corollary, and from this perspective we must view the coup in Ukraine in February 2014 and all ensuing events, including the downing of Malaysian Airlines Flight MH17. ..."
"... Russia under Yeltsin had effectively surrendered its sovereignty to transnational capital and the West and as a result was left a social and economic disaster zone. ..."
"... The Anglo-American invasion of Iraq on a false pretext made abundantly clear that the West was abandoning the rules of the post-war international order. 'Democracy promotion' intended to prevent national sovereignty from being mobilised against Western global governance, was now made a priority. The 'Rose Revolution' in Georgia in 2003 and the 'Orange Revolution' a year later in Ukraine, marked the lengths to which the United States was willing to go. ..."
"... To ensure that countries incorporated into the US-NATO sphere of influence, really became neoliberal client states, Pascual and Krasner devised a strategy for preventive intervention with a rulebook listing the measures by which 'market democracy' was to be established. Ukraine was a key target and battleground, because by now, Russia was beginning to contest Western forward pressure. ..."
"... The economic mismanagement and infighting of the different oligarchic clans in Ukraine led to payment arrears and repeated shutdowns of the gas supply from Russia, and Gazprom, the state-owned Russian gas company, early on began to look for ways to bypass the Ukrainian grid. ..."
"... If Russia takes Ukraine, Belarus will join the Eurasian Union, and, presto, the Soviet Union (in another name) will be back. ..."
"... Far easier to [hold] the line now, in Ukraine than elsewhere, later ..."
"... weekend of 13 to 14 April, CIA Director John Brennan was in the Ukrainian capital. ..."
"... Parubiy sent out a Twitter message on the 15th that veterans of the Maidan uprising were poised to join the fight. ..."
"... The downing of MH17 on 17 July changed all that. As I said above, who did it and how remains obscure, although there are several pursued by people familiar with local circumstances, or revealed by insiders who know who which military assets were operating that day -- but all that remains inconclusive. The official reports by the Dutch Safety Board and the JIT may be conveniently dismissed although the DSB rightly pointed at the questionable decision by Kiev to allow civilian planes to fly over a war zone. However, irrespective of the actual perpetrator, and whether it was an intentional act or an accident, there is no doubt about the West's intent to exploit the event to the maximum. ..."
"... 'without MH17 it would have been pretty difficult to find sufficient support for the increased sanctions on the Russian economy' ..."
"... Even at the time of the Kiev coup, commentators wondered to what extent shale gas from the US might be used to offset Russian deliveries. LNG facilities planned in Florida and Maryland were projected to serve the European market at Gazprom's expense, a prospect meanwhile far more realistic. ..."
"... The downing of Flight MH17 also definitively sealed the fate of South Stream. Russian banks financing the project, led by Gazprombank, were hit by new sanctions, so that the necessary capital could no longer be raised internationally. ..."
"... Since the F-16 that shot down the Russian jet was part of a pro-NATO unit based at Inçirlik airbase that took part in the coup attempt, the incident over Syria would appear to fit in a framework that may also have decided the fate of Flight MH17: a provocation to throw relations with Russia into disarray, but we don't know for sure. ..."
"... cover the scenarios from changes of leadership within the current structures, to the emergence of a group ready to pursue structural reform in some sort of accountable dialogue with the Russian population, to regime collapse ..."
"... In the current global conjuncture, even the tentative contender coalition combining the Eurasian Union, the BRICS and the Shanghai Cooperation Organisation, constitutes an acute danger to a capitalist West in crisis. Whether the United States and NATO would therefore also be willing to take even greater risks than they are doing now is a prospect too frightening to contemplate. However, it must be confronted, or the fate of the 298 people on Flight MH17 may become that of humanity at large. ..."
Jul 09, 2018 | www.unz.com

Four years ago, on 17 July 2014, in the midst of a civil war raging in eastern Ukraine, Malaysian Airlines Flight MH17 was destroyed with all 298 passengers and crew. On 25 May last, the Joint Investigation Team (JIT) entrusted with the criminal investigation of the downing and composed of the Netherlands, Australia, Belgium, Malaysia and paradoxically, given its possible involvement, Ukraine, presented its second progress report. Like the first report in September 2016, it took the form of a press conference, with video animations supporting the investigation's findings.

This time there was even less to report; the main conclusion was that elements from the Russian 53rd Buk missile brigade were the culprits, a claim already made by the London-based investigative group Bellingcat two years before.

In February 2016 that assertion had still been dismissed as unfit for evidence by the Dutch chief prosecutor on the JIT, Fred Westerbeke, in a letter to victims' relatives. How can it possibly have become the core component of the case for the prosecution two years and two months later?

The JIT press conference was immediately followed by a formal declaration on the part of the Dutch and Australian governments that held Russia responsible. However, JIT member Malaysia dissociated itself from the accusation, whilst Belgium has remained silent.

The obviously over-hasty conclusion, on the heels of the alleged Skripal nerve gas incident in Salisbury and the likewise contested Syrian government gas attack on jihadist positions in Douma, all point in the same direction: Putin's Russia must be kept under fire and there is no time to wait for a court verdict.

In my book Flight MH17, Ukraine and the New Cold War. Prism of Disaster (Manchester University Press), I have refrained from entering the slippery terrain of making claims about who pulled the trigger, intentionally or by accident, in the late afternoon of 17 July, or even which type of weapon was used. For the downing of the Malaysian plane has become part of a propaganda war that was already heating up prior to the catastrophe. Instead the book is about what we do know about the events surrounding it, in the preceding months, weeks, and days, indeed even on the day itself. Subsequent events have only underlined that it is this context that lends meaning to the tragedy.

Refocusing US Supremacy After the Soviet Collapse

Today, Western imperialism projects its global power, as far as capital is concerned, primarily from the perspective of speculative, financial asset investment. Long gone are the days of class and international compromise forced upon it after World War Two. Instead, the predatory instincts of dominant financial capital require forcibly opening up all states for commodification and exploitation. Given the global spread of product and commodity chains, the continued flow of profits to the West cannot be taken for granted as long as effective state sovereignty elsewhere persists. For the liberal, Anglophone heartland of capital, 'defence' is therefore not merely, or even primarily, a matter of upholding the territorial integrity of the states constituting it, but keeping open the arterial system of the global economy and maintaining the centrality of the West. Regime change is a logical corollary, and from this perspective we must view the coup in Ukraine in February 2014 and all ensuing events, including the downing of Malaysian Airlines Flight MH17.

Right from the Soviet collapse in 1991, the US global perspective was articulated in several new strategic doctrines. The first and perhaps foundational one is the Wolfowitz Doctrine, named after Paul Wolfowitz, undersecretary of defence in the Bush Sr. administration, who commissioned a Defence Planning Guidance for Fiscal 1994-'99 (DPG) of 1992. It proclaims the United States the world's sole superpower, which must remain ahead of all possible contenders in arms technology and never again accept military parity, as with the USSR during the Cold War. The newly self-confident European Union, too, was obliquely warned that the US alone would handle global policing.

Additional doctrines, specifying on which grounds armed US intervention might be undertaken and justified, added elements such as humanitarian intervention (a Carnegie Endowment report of 1992, Self-Determination in the New World Order ); it was applied in Yugoslavia and again in Libya. Next, the'War on Terror', originally floated at Israeli Likud/US Neocon conferences between 1979 and 1984, was revived after the collapse of the USSR as the 'Clash of Civilizations' by Cold War strategist Samuel Huntington; Afghanistan and Iraq stand as monuments of the application of this doctrine. Finally, Zbigniew Brzezinski's The Grand Chessboard of 1997 specifically dealt with reorganising the former USSR, including Ukraine.

Through the different episodes, NATO was transformed into a global policing structure serving the interests of Atlantic capital. 'Out of area operations', unthinkable in the Yalta epoch, were first tried out against the Bosnian Serbs in the mid-1990s. The enlargement of the alliance into the former Soviet bloc, which began around that time too, was obviously motivated to prevent European departures from US tutelage, hence its bold forward surge. Already in 1994, Ukraine became the first former Soviet republic to join the Partnership for Peace, the newly created waiting room for NATO membership. To quell Russian concerns about the advancing West, the NATO-Russia Founding Act of 1997 laid down that no nuclear weapons and permanent troop deployments would take place in new member states. Yet Georgia, Ukraine, Azerbaijan, and Moldova not long afterwards joined a low-key organisation of former Soviet republics (after the initials, GUAM), another oblique link up with NATO.

Mobilising Georgia and Ukraine against Resurgent Russia

Russia under Yeltsin had effectively surrendered its sovereignty to transnational capital and the West and as a result was left a social and economic disaster zone. Under his successor, Vladimir Putin, the country began to mutate back to a society led by a directive state, assisted by rising oil prices. After the United States unilaterally withdrew from the Anti-Ballistic Missile Treaty in 2002 and announced a missile defence system deployed in the CzechRepublic, Poland, and Rumania, Russia shifted to a more robust international position. The Anglo-American invasion of Iraq on a false pretext made abundantly clear that the West was abandoning the rules of the post-war international order. 'Democracy promotion' intended to prevent national sovereignty from being mobilised against Western global governance, was now made a priority. The 'Rose Revolution' in Georgia in 2003 and the 'Orange Revolution' a year later in Ukraine, marked the lengths to which the United States was willing to go.

Yet even a colour revolution means little if there is no accompanying make-over of the fundamental state/society relation. Hence, the incoming policy planning director at the US State Department, Stanford professor Stephen Krasner, and Carlos Pascual, former US ambassador in Kiev, developed a comprehensive regime change doctrine in 2004. This would prove a key element in the subsequent Ukraine intervention. To ensure that countries incorporated into the US-NATO sphere of influence, really became neoliberal client states, Pascual and Krasner devised a strategy for preventive intervention with a rulebook listing the measures by which 'market democracy' was to be established. Ukraine was a key target and battleground, because by now, Russia was beginning to contest Western forward pressure.

At the Munich Security Conference in January 2007, Putin reminded his audience of the promises made to Gorbachev in 1991 not to expand the Atlantic alliance and warned that further attempts at enlargement (the Baltic states having been included in 2004) would imply great risks. Yet NATO and the EU were inexorably pressing forward. At the Bucharest NATO summit in April 2008 the Americans made the offer of NATO membership to Georgia and Ukraine, only to have the offer vetoed by Germany and France. Possibly to force the issue, the pro-Western president brought to power by the Rose Revolution in Georgia, Mikheil Saakashvili, armed and encouraged by the US and Israel, later that year embarked on a military adventure to recapture the breakaway province of South Ossetia. It ended in a complete debacle, as a Russian army stood ready in North Ossetia to deal the invaders a major, if very costly, blow. This, then, was what Richard Sakwa calls, 'the war to stop NATO enlargement'. From now on, every post-Soviet republic tempted to join the Atlantic alliance would have to reckon with Russian protection for groups resisting such integration, irrespective of whether it concerned actual Russians or any other of the almost two hundred nationalities of the former USSR.

The EU-Russian Energy Equation and Ukraine

The gas from Russia that feeds Europe today was discovered back in the 1960s; the Friendship oil pipeline was built in 1964 and the Soyuz, Urengoi and Yamal pipelines followed after West Germany started purchasing Soviet gas. The link-up culminated in 1980 with the contract for a gas pipeline from Urengoi in north Siberia to Bavaria, signed by a heavy-industry consortium headed by Deutsche Bank.

After the collapse of the USSR, Russian gas had to pass through the pipeline grid of independent Ukraine, which in the meantime had become the prey of rival clans of oligarchs. For most of them, gas was the key source of rapid enrichment -- directly, as in the case of subsequent prime minister Yuliya Timoshenko, 'the Gas Princess', or indirectly, by supplying steel pipes for gas transport, as in the case of president Leonid Kuchma's son-in-law, Victor Pinchuk, the 'Pipeline King'. The economic mismanagement and infighting of the different oligarchic clans in Ukraine led to payment arrears and repeated shutdowns of the gas supply from Russia, and Gazprom, the state-owned Russian gas company, early on began to look for ways to bypass the Ukrainian grid.

After Putin had come to power, he disciplined the Russian oligarchs as part of the restoration of state sovereignty. Mikhail Khodorkovsky, the energy oligarch and richest of all Russian billionaires at the time, at the time was buying support in the Duma to build a trans-Siberian pipeline to China; whilst negotiating with ExxonMobil and Chevron about US participation in his Yukos concern, which he planned to merge with Sibneft into the world's largest oil company. In 2005 he was convicted to a long prison sentence. Yukos was brought back into the Russian patrimony via a proxy construction involving state-owned Rosneft and Gazprom, as part of broader subordination of the economy to the state.

Gazprom meanwhile began building alliances to avoid future disruption of supplies via Ukraine and secure its European market. In 2005 it agreed with the outgoing government of Gerhard Schröder to build a pipeline across the Baltic directly to Germany, 'Nord Stream', with a consortium of German companies. Schröder was made the chairman of the board of the joint venture, Achimgaz, and two years later, a South Stream pipeline across the Black Sea to Bulgaria was contracted with ENI of Italy. It was to be extended into south-eastern Europe as far as Austria. In this way Gazprom and the Russian state were outmanoeuvring various EU projects for pipelines aimed at by-passing Russia. Indeed it was the EU's plan to use a Nabucco pipeline across Turkey to connect to the Caspian energy reserves that prompted the $40 billion South Stream project. Romano Prodi, prime minister of Italy, who first discussed South Stream with Putin in late 2006, was offered the chairmanship, which he declined, perhaps in the knowledge the project would become highly contested.

The Eurasian connection by now posed a direct threat to the cohesion of the enlarged Atlantic bloc. Besides Nord Stream and South Stream, Gazprom's collaboration with NIOC of Iran and a joint venture with ENI in Libya set all alarm bells ringing in Washington. Already in May 2006, a few months after the gas shutdown to Ukraine, the US Senate unanimously adopted a resolution calling on NATO to protect the energy security of its members and have it develop a diversification strategy away from Russia. Senator Richard Lugar in a much-noted speech prior to the NATO summit in Riga, Latvia, in November 2006, argued in favour of designating the manipulation of the energy supply as a 'weapon' that can activate Article 5 of the NATO treaty (common defence).

In a report to the European Parliament in 2008, the director of the EurasianPolicyCenter of the Hudson Institute in the US recommended that the EU should assist in liberalising and modernising the Ukrainian grid instead of supporting South Stream. Tension in the Black Sea area, her report noted candidly, might serve the purpose of blocking that pipeline altogether. However, after the 2010 election of president Victor Yanukovych, the front man of the powerful eastern and southern oligarchs, the lease of Russia's Crimean naval base at Sebastopol, home of its Black Sea fleet, had been extended to 2042, so the prospects for stirring up unrest there were mitigated by Moscow's enduring naval preponderance.

Regime Change in Kiev

One aspect of the resurgence of a sovereign Russia was the plan for a Eurasian economic union to rebuild relations with former Soviet republics (Ukraine obtained observer status early on). The EU's Eastern Partnership was a direct response. It was offered to former Soviet republics in 2008, in a gesture that signalled that Europe now effectively acted as a subcontractor to the larger anti-Russian design drafted in Washington. Concretely, the EU offered Ukraine and other former Soviet republics an Association Agreement that also included provisions for the country's alignment on NATO security policy, besides a neoliberal make-over in the spirit of the Krasner-Pascual doctrine. The envisaged reforms would be devastating for the country's existing power structure, not least for the Donbass oligarchs whose front man was Yanukovych. Their heavy industry assets would be swept away by EU competition, the country turned into an agricultural supplier, and Russian gas cut off.

Hence, when both the EU and Russia sought to win over Yanukovych to join their respective blocs and Brussels ruled out the triangular arrangement by which the Ukrainian president had hoped to postpone the choice, he could not but step back from signing the EU Association Agreement in November 2013 and accept a Russian counteroffer. By then, 'Europe' had become a code word for an end to oligarchic rapaciousness, in which Yanukovych and his sons had become involved as well. The president's decision triggered mass demonstrations and occupations, which this time included an armed insurrection by Ukrainian ultra-nationalists in the historically anti-Russian west of the country. It created the space for actual fascists to hijack the protests and prepare a coup. By their use of deadly force at the Maidan central square (ascribed by the coup plotters and in the West to the riot police), the Ukrainian ultras demonstrated they were ready to kill their own compatriots to achieve their aims.

To prevent the situation from getting out of hand completely, the foreign ministers of Germany, France and Poland flew to Kiev on 20 February 2014. However, whilst they negotiated a deal with Yanukovych and the opposition, the US and other NATO ambassadors met with Andriy Parubiy, the co-founder of the fascist party of Ukraine and former head of its militia, Patriot of Ukraine . Parubiy, today the speaker of the Kiev parliament, was in command of the armed gangs at the Maidan; two days later these took power in the capital, installing a government of Ukrainian nationalist stripe, selected by US diplomats. Parubiy was appointed secretary of the National Security and Defence Council (NSDC), a key post overseeing all military and intelligence operations, which he continued to hold until three weeks after the downing of MH17. With the Russian-Ukrainian half of the country effectively disenfranchised, the coup was responded to by the secession of Crimea and an armed insurrection in the Donbass. Stirrings of revolt in Odessa and Mariupol would be suppressed with deadly violence, in which Parubiy and other far right figures were directly involved.

Confronting the BRICS in Ukraine

From late March onwards the war party in the United States and NATO began to elaborate a strategy that would make Ukraine the testing ground for a trial of strength with Russia and China. The secession of Crimea and its re-incorporation into the Russian Federation was exploited to evoke the spectre of an impending Russian invasion on several fronts. General Philip Breedlove, commander of US Eucom (European Command, one of nine regional US military commands spanning the globe) and NATO Supreme Allied Commander Europe (Saceur), coordinated the Western position with General Wesley Clark, a former NATO Saceur at the time of the Yugoslavia wars. Clark was already advising Kiev forces in eastern Ukraine before the Donbass had actually risen in revolt. On 12April he asked Breedlove whether the NATO commander could not arrange a statement blaming Moscow for the violence because ' if the Ukrainians lose control of the narrative , the Russians will see it as an open door'. Clark then elaborated on the general geopolitical situation, giving further insights into why the war party in the US believed that Ukraine was to be 'held' and chosen as a battle ground to confront Russia and China. No time was wasted on market democracy here. Claiming that 'Putin has read US inaction in Georgia and Syria as US "weakness",' Clark went on to explain that

China is watching closely. China will have four aircraft carriers and airspace dominance in the Western Pacific within 5 years, if current trends continue. And if we let Ukraine slide away, it definitely raises the risks of conflict in the Pacific. For, China will ask, would the US then assert itself for Japan, Korea, Taiwan, the Philippines, the South China Sea? If Russia takes Ukraine, Belarus will join the Eurasian Union, and, presto, the Soviet Union (in another name) will be back. Neither the Baltics nor the Balkans will easily resist the political disruptions empowered by a resurgent Russia. And what good is a NATO "security guarantee" against internal subversion? And then the US will face a much stronger Russia, a crumbling NATO, and [a] major challenge in the Western Pacific. Far easier to [hold] the line now, in Ukraine than elsewhere, later .

On the weekend of 13 to 14 April, CIA Director John Brennan was in the Ukrainian capital. The Anti-Terrorist Operation (ATO, so called because the use of military force within the country is only warranted under that label) began right after Brennan's visit; Parubiy sent out a Twitter message on the 15th that veterans of the Maidan uprising were poised to join the fight. Since NATO had earlier implored Yanukovych not to use force against (armed) demonstrators, Moscow now asked the alliance to restrain the coup leaders in turn. But according to foreign minister Lavrov, the answer they got was that 'NATO would ask them to use force proportionately'.

In fact even the oligarch, Petro Poroshenko, elected president on 25 May 2014 to provide a veneer of legitimacy to the coup regime, proved unable to restrain the hardliners. On 30 June, following a four-hour NSDC meeting with Parubiy, interior minister Avakov, and others whose armed followers were demonstrating outside, Poroshenko declared that the ceasefire would be lifted and a new offensive launched. Three days later NATO naval manoeuvres in the Black Sea commenced with US participation and with electronic warfare a key component. On the ground, Kiev's forces made rapid progress, apparently drawing a ring around the large rebel city of Donetsk. NATO had its own concerns: an upcoming summit in Wales in September was expected to capitalise on the trope of a 'Russian invasion', vital after the Afghanistan debacle, and dovetailing with the emerging contest with the BRICS bloc.

The BRICS, coined first as a banker's gimmick, were never more than a loose collection of '(re-) emerging economies', but from Washington's perspective, sovereign entities not submitting to neoliberal global governance are unacceptable. So when on 16 July, the BRICS heads of state, hosted by the Brazilian president, Dilma Rousseff (removed by a rightwing conspiracy in May 2016), signed the statute establishing a New Development Bank, or BRICS bank, as a direct challenge to the US and Western-dominated World Bank and IMF, the US imposed new sanctions on Russia over Ukraine, specifically targeting the energy link with the EU. The creation of an equivalent of the World Bank with a capital of $100 billion with a reserve currency pool of the same size (an equivalent of the IMF), laid the groundwork of a contender pole in the global political economy challenging the West's austerity regime frontally -- or so it seemed at the time.

Still in Brazil before flying back to Moscow, Russian president Putin on the fringes of the football world cup finals also agreed with German Chancellor Angela Merkel to pursue a comprehensive Land for gas deal. Its tentative provisions included normalising the status of Crimea in exchange for a massive economic rehabilitation plan and a gas price rebate for Ukraine. However, a special European Council meeting convened on the 16th could not reach agreement on whether the EU should follow the American lead this time, since countries with export interests to Russia and dependent on its gas, were balking. Instead, the Council stressed the EU's commitment 'to pursue trilateral talks on the conditions of gas supply from the Russian Federation to Ukraine' in order to 'safeguard the security of supply and transit of natural gas through Ukraine.'

The Downing of Flight MH17 and South Stream

The downing of MH17 on 17 July changed all that. As I said above, who did it and how remains obscure, although there are several pursued by people familiar with local circumstances, or revealed by insiders who know who which military assets were operating that day -- but all that remains inconclusive. The official reports by the Dutch Safety Board and the JIT may be conveniently dismissed although the DSB rightly pointed at the questionable decision by Kiev to allow civilian planes to fly over a war zone. However, irrespective of the actual perpetrator, and whether it was an intentional act or an accident, there is no doubt about the West's intent to exploit the event to the maximum.

Former secretary of state and then-presidential hopeful Hillary Clinton in a TV interview on the 18th called for making 'Russia pay the price' once its culpability had been established. Her to-do list for the EU included, one, 'toughen sanctions'; two, find alternatives to Gazprom, and third, 'do more in concert with us to support the Ukrainians'. The 'Land for gas' negotiations were shelved and on the 22nd Europe dropped the remaining hesitations when it underwrote the US sanctions targeting Russia's role as an energy supplier. As Mark Leonard, founder and director of the European Council on Foreign Relations, noted in a newspaper interview a year later, 'without MH17 it would have been pretty difficult to find sufficient support for the increased sanctions on the Russian economy' .

In 2009 the EU had introduced a new energy policy, dubbed a 'Third Energy Package'. It does not permit gas to be transported to the EU by the company producing it, effectively forcing Gazprom to sell even the gas piped through the Ukrainian grid to other companies before it could enter the EU. Nord Stream had still been exempted from EU competition rules, but the projected South Stream was not, never mind that most contracts with Gazprom had been signed before the Third Energy Package came into force. Even at the time of the Kiev coup, commentators wondered to what extent shale gas from the US might be used to offset Russian deliveries. LNG facilities planned in Florida and Maryland were projected to serve the European market at Gazprom's expense, a prospect meanwhile far more realistic.

The Crimean secession and incorporation into the Russian Federation obviously played its own role here. Crimea is a historically Russian region; having been assigned to Ukraine by a whim of Soviet party leader Khrushchev in 1954, it never reconciled itself to being part of an independent Ukraine. After the nationalist coup in late February, the status of the Russian naval base in Sebastopol was in the balance. In 1991, the Black Sea had been a Soviet/bloc inland sea, with one NATO country (Turkey) bordering it. Now there were two more NATO/EU countries and two pro-Western, aspiring NATO members on its littoral. So when one week after the coup, three former Ukrainian Presidents, Kravchuk, Kuchma, and Yushchenko, called on the coup government in Kiev to cancel the agreement under which the lease of Sebastopol, home to the Russian Black Sea fleet, had been extended to 2042, the question of who would be able to project naval power over the Black Sea became acute. The question now was whether Russia would be able to provide cover for a large-scale project such as South Stream, or not.

South Stream itself came into the firing line directly. The European Parliament, which never raised the issue of why the February agreement with Yanukovych the EU brokered had been sidelined by the coup, on 17 April 2014 adopted a non-binding resolution opposing the South Stream gas pipeline and recommended a search for alternative sources of gas. On 28 April, the United States imposed a ban on business transactions within its territory on seven Russian officials, including Igor Sechin, the CEO of Rosneft, the Russian state oil company, as well as Gennady Timchenko, whose Volga Group controls Stroytransgaz, the company entrusted with building the Bulgarian section of South Stream. Nevertheless the Bulgarian parliament approved South Stream two weeks after the reincorporation of Crimea, circumventing the EU's anti-trust legislation by renaming the pipeline a 'sea-land connection'.The European Commission then instructed Bulgaria to stop work on South Stream and proceeded to cut off tens of millions of much-needed regional development funds, whilst the US ambassador warned Bulgarian companies against working with Timchenko. A final visit of US Senators John McCain and Ron Johnson, in combination with other punitive measures then led to the cancellation in early June. As Eric Draitser commented at the time, 'South Stream has become one of the primary battlegrounds in the economic war that the West is waging against Russia'.

The downing of Flight MH17 also definitively sealed the fate of South Stream. Russian banks financing the project, led by Gazprombank, were hit by new sanctions, so that the necessary capital could no longer be raised internationally. Putin earlier had hinted at moving the transit of gas for the EU to non-European countries; in August, it was reported there was a Plan B in the works to export via Turkey. On 1 December 2014, during a state visit to Ankara, the Russian president announced that in light of Western sanctions and the refusal of construction permits in the EU, South Stream would be replaced by a 'Turkish Stream' pipeline, besides the existing Blue Stream link. However, in November 2015, a Turkish F-16 shot down a Russian fighter jet over northern Syria, throwing relations between Moscow and Ankara into a deep crisis and entailing the cancellation of Turkish Stream. This was only overcome after the July 2016 coup attempt against Erdoğan, in which Russia sided with the Turkish president, possibly even warning him in advance. Since the F-16 that shot down the Russian jet was part of a pro-NATO unit based at Inçirlik airbase that took part in the coup attempt, the incident over Syria would appear to fit in a framework that may also have decided the fate of Flight MH17: a provocation to throw relations with Russia into disarray, but we don't know for sure.

Regime Change in Moscow?

The MH17 disaster occurred in the context of a deep crisis, in which capitalist discipline as imposed from its historic epicentre in the West, has become primarily predatory, relying to an ever-greater extent on violence.

Speculative financial operations in combination with the 'War on Terror' have spread economic risk and repression at home, war and regime change abroad. Human survival itself has been turned into a global gamble played out over the head of the affected populations for private gain.

The West, led by the effectively bankrupt United States, increasingly relies on force to sabotage the formation of any alternative, something its own social formation can no longer bring forth. Even the most promising, potentially revolutionary IT and media developments coming out of Silicon Valley have been mortgaged by a planetary project of communications surveillance to safeguard US imperial positions.

Back in the 1980s, when it launched the second Cold War, the Reagan administration intended to destabilise the Soviet bloc and bring about regime change in Moscow. This is also the aim of the current, new Cold War. A 2015 Chatham House report, 'The Russian Challenge', discusses this in some detail. Although it concedes that the West cannot have an interest in Russia sliding into complete anarchy, neither should the Putin presidency be protected 'against change, whether managed or violent '. Therefore, 'whether Putin was ousted by an internal coup, by illness or by popular unrest , it would nevertheless be sensible for the West to give further thought to how it might deal with the consequences of regime change in Russia.'

Effective communication with the Russian people and the defence of human values beforehand would be essential for Western credibility Planning for the future ought, lastly, to cover the scenarios from changes of leadership within the current structures, to the emergence of a group ready to pursue structural reform in some sort of accountable dialogue with the Russian population, to regime collapse .

The president of the National Endowment for Democracy, Carl Gershman, in a piece for the Washington Post in October 2016 suggested launching a new, sustained anti-Putin campaign, for which the contract killing of the journalist, Anna Politkovskaya, ten years earlier, might be used as a vignette.

For such a campaign, George Soros' Open Society Foundation can be trusted to have elaborated the 'civil society'/colour revolution scenarios, whilst identifying the groups that might be mobilised for their execution. The OSF plan of action for 2014-17, titled Russia Project Strategy , identifies Russian intellectuals active in Western academic and opinion networks, the Russian gay movement, and others as potential levers for civil society protest against the conservative bloc in power in Moscow. From the OSF documents hacked by the CyberBerkut collective, Alexei Navalny's Anti-Corruption Foundation emerges as the key beneficiary, and discussion portals and liberal media such as Echo of Moscow radio station, RBK news agency, and the newspaper Vedomosti, as the preferred channels to disseminate content.

There is no need to repeat that all this is part a powerful offensive to derail the loose contender bloc around China and Russia, which had constituted itself in the face of Western aggressiveness and crisis. The seizure of power in Ukraine as well as the secession of Crimea and the civil war in the east, which has meanwhile cost the lives of more than 13,000 people and displaced a million, as well as economic warfare against Russia by the US and the EU, have brought the danger of a large European war several steps closer. Whether the actual downing of Flight MH17 was an intentional, premeditated act or an accident, whether it involved a jet attack, an anti-aircraft missile, or both, ultimately cannot be established with certainty. Yet both the NATO war party and the coup regime in Kiev, which on many occasions has demonstrated that its ultra-nationalist and fascist antecedents are very much alive, would have been perfectly capable of such an act and had the means for it. Most importantly, they had the motive. Those in power in Kiev had several times already attempted to draw Moscow into the civil war, directly and through a NATO intervention. If this indeed was their aim, it would also have served the Atlantic bloc's determined and long-standing commitment to force continental Europe into an antagonistic relation with Russia.

In the current global conjuncture, even the tentative contender coalition combining the Eurasian Union, the BRICS and the Shanghai Cooperation Organisation, constitutes an acute danger to a capitalist West in crisis. Whether the United States and NATO would therefore also be willing to take even greater risks than they are doing now is a prospect too frightening to contemplate. However, it must be confronted, or the fate of the 298 people on Flight MH17 may become that of humanity at large.

Kees van der Pijl is a Fellow, Centre for Global Political Economy and Professor Emeritus of the School of Global Studies at the University of Sussex.

[Jul 06, 2018] The IMF is back in Argentina an economic and social crisis, even more serious than the present one, looms large on the horizon by Eric Toussaint , Sergio Ferrari

Jun 27, 2018 | www.defenddemocracy.press

The second neoliberalization of Argentina turned into second financial crash. Brazil is probably next. And Argentina and Brazil were two contires in which neoliberal staged a counterrevolution after financial crisi of 2008.

The IMF is back in Argentina: "an economic and social crisis, even more serious than the present one, looms large on the horizon"

1. The vicious circle of illegitimate debt grapples the Argentine people once again
2. IMF's $ 50 billion loan surpasses Greece's previous record

Sergio Ferrari from Berne, Switzerland interviewed Eric Toussaint, international debt specialist

After more than a decade of Argentina's official "distance" from the International Monetary Fund (IMF), Mauricio Macri's government has just knocked on the doors of the world's financial police. The $ 50 billion credit granted by the organization during the first week of June sets an international record and will directly impact the economic and social situation of this South American country. Eric Toussaint, Belgian historian and economist, an eminent specialist in this field and spokesperson for the Committee for the Abolition of Illegitimate Debt (CADTM), based in Brussels, pointed this out. Interview follows. Q: Why did the Argentine government turn to the IMF , in full view of Argentina's relations with this international organization in the late 1990s and their dire political consequences? Is the financial top brass of the Macri team despairing?

Eric Toussaint (ET): Since the Mauricio Macri government assumed office in December 2015, its policies have led to a critical situation. Sharp reduction in export taxes have brought down tax revenues, the debt servicing expenditure has been significantly increased (100% higher in 2018 than in 2017). The country is running out of dollars. Currency reserves fell by $ 8 billion earlier this year. Macri needs this IMF loan to continue debt servicing. Private international lenders require such a loan as a prerequisite for continued credit to Argentina. A very large chunk of the IMF loan will be used directly to repay foreign creditors in dollars.


Q: If we look at the Argentine history of the 1990s, this seems to be a scheme of playing with fire

Read also: What Kissinger did in Chile, Cyprus, Turkey, the Middle East and ... his own country

ET: Yes, of course. But I would like to further explore the background of this appeal to the IMF

Q- Please go ahead!

ET: This shows that the government's policy is an abject failure: with a peso that devalued fast; with the interest rate set at a high 40% by the Argentine Republic's Central Bank ; with the $ 8 billion reduction in international reserves that keep declining. And with a debt service that has increased by 100% compared to 2017. Faced with a balance sheet of such a nature, undoubtedly it is a total failure. Macri claimed that a high growth level and a viable debt would be ensured by paying the debt – between end-2015 and early-2016 – and by compensating the vulture funds , in keeping with Judge Thomas Griesa's verdict. He knelt before the vulture funds (see: http://www.cadtm.org/Reject-the-Imminent-Agreement-with ). But the facts confirm that this plan did not work. Debt rose at a whirling pace and it's startling to see how fast it snowballed. As a result, it became impossible to convince the creditors that Argentina could repay its debt in the future. That's why Macri is asking for this $ 50 billion credit. We must remember that when Greece received $ 30 billion from the IMF in 2010 in the backdrop of a dramatic situation, it was a record amount!

Q: Some analysts say that President Macri is trying to breathe in some fresh air with the help of this loan, before commanding a comfortable position in the October 2019 elections.

ET: I would not like to engage in farfetched political speculations. I prefer facts. I have read the contents of the agreement signed with the IMF and it has imposed a severe reduction in general social benefits and wages of the public servants. Public investment will be almost wiped out and it will lead to an economic depression. Debt repayment will increase and the IMF charges high interest rates . The government will impose taxes with elevated rates on the public to repay the debt, while continuing to hand out fiscal perks to the capitalists. The government will encourage the export of the maximum number of agricultural products and raw materials to the global market by reinforcing the extractivist-exporting model. IMF's policy will lead the country to an economic and social crisis even more serious than what it suffered before this loan was sanctioned. Let's go back to your question. It is very likely that, politically, Macri will claim that what he is doing is not his project, but what the IMF demands from him.

Read also: USA - In praise of Riotous Assembly

Q: This brings us back to a not-so-distant past and I would like to highlight that: the decade of indebtedness and the IMF's role in the 1990s that eventually led to the social outburst of 2001. Can history repeat itself without tragedy?

ET: History is repeating itself in a country that is a serial debt payer. It started with the illegitimate and odious debt inherited from the military dictatorship of the 1970s. IMF's support was crucial for this dictatorship to continue until the early 1980s. The vicious circle of illegitimate debts persisted during the 1990s with President Carlos Menem followed by Fernando De la Rúa. Their allegiance to the IMF's recommendations led to the great social crisis of late 2001. President Rodríguez Saá, in his few days or Presidency at end-2001, announced the suspension of debt repayment to allay popular anger. The debt was restructured in 2005, then re-negotiated with creditors who had not participated before. It caused a crisis in the government and evoked sharp criticism from the people (see the section on Argentina here http://www.cadtm.org/Restructuration-Audit-Suspension,11723 ). Former minister Roberto Lavagna, who had negotiated the 2005 restructuring, objected to negotiations with outsider creditors. The Argentine authorities never wanted to do what Ecuador did in 2007-2008: to carry out a debt audit with citizens' participation, which could have defined the odious and illegitimate part of the debt (see: http://www.cadtm.org/Video-The-Ecuador-debt-audit-a and http://www.cadtm.org/Vulture-funds-are-the-vanguard ). This, along with the inconsistency of the Cristina Fernandez government's national sovereignty discourse, frustrated people. This partly explains Macri's electoral victory in 2015.

Q: A course over several decades where illegitimate debts condition government policies without ever finding structural solutions

Read also: Two-Thirds of Human Rights Defenders Killed in 2017 Were From Latin America

ET: Yes. And that led today to this new mega-loan from the IMF. From now on, it can be included in the category of odious and illegitimate debts. An odious debt is a debt contracted against the people's interests, and the creditors know that it is illegitimate. Evidently a new illegitimate and odious debt is taking shape.

Q: What about future prospects?

ET: I have already spoken about the deteriorating economic and social crisis. I hope for a strong popular reaction in the coming months. I also hope that the popular forces will not take too long to consolidate their strength to oppose even more vigorously the Macri government and the pressures of the IMF and other international creditors.

Translated by Suchandra De Sarkar

[Jul 05, 2018] Sic Semper Tyrannis What happened to the signers

Jul 05, 2018 | turcopolier.typepad.com
What happened to the signers?

"Five signers were captured by the British as traitors, and tortured before they died. Twelve had their homes ransacked and burned. Two lost their sons in the revolutionary army, another had two sons captured. Nine of the fifty-six fought and died from wounds or hardships resulting from the Revolutionary War.

These men signed, and they pledged their lives, their fortunes, and their sacred honor!

What kind of men were they? Twenty-four were lawyers and jurists. Eleven were merchants. Nine were farmers and large plantation owners. All were men of means, well educated. But they signed the Declaration of Independence knowing full well that the penalty could be death if they were captured.

Carter Braxton of Virginia, a wealthy planter and trader, saw his ships swept from the seas by the British navy. He sold his home and properties to pay his debts, and died in rags." "What really happened?"

------------

I had a lot of ancestors in that war, some Continentals, some militia. One man in Boston raised his own regiment of militia at his own expense. He commanded it throughout the war. A lot of these soldiers were old broke down grunts by the end, They made new lives for themselves. I revere their memory. pl

http://www.whatreallyhappened.com/RANCHO/POLITICS/DOCUMENTS/the_signers.html


blue peacock , 19 hours ago

"All were men of means, well educated. But they signed the Declaration of Independence knowing full well that the penalty could be death if they were captured."

They were men of character. They were willing to lose everything for their convictions and beliefs. These are men to be revered. Thank you Col. Lang for remembering them.

IMO, as a people we no longer have this character. We have allowed big & bigger government over the decades who have usurped our sovereignty and essential liberty through mass surveillance, civil forfeiture, state secrets doctrine as the cornerstone of deceit, and now the weaponization of law enforcement and intelligence for domestic political purposes.

TTG , 12 hours ago
These were indeed hard and principled men. I offer the example of one of the founding fathers of my hometown. Gideon Hotchkiss was a new light Puritan receiving a commission as an ensign in a Waterbury militia company in November 1756. He was at Saratoga in August 1757 when he wrote home about "the melancholy news of our upper fort" referring to the loss of Fort William Henry and the ensuing massacre. In July 1758 he took part in the battle of Fort Carillon as a lieutenant. He served another year as a captain in 1760 along with two of his sons.

Leading up to the War of Independence, he served on the local committee of inspection. He sent two sons and a grandson to serve in the war and organized a troop of light horse cavalry to respond to British incursions such as the raids on Woodbridge and Danbury. After the fall harvests were completed, his company of veterans served through the winter months when they were most needed.

Once while working in his fields, he heard the sound of battle to the south. He mounted his horse and, along with a servant boy, rode to meet the British at Westville, north of New Haven. His servant was struck by a cannon ball. Gideon placed the boy's body in a concealed place, sent his horse back to his farm and joined the battle. This was the British raid on New Haven in July 1779. He was sixty-three years old at the time.

After the War, he was appointed deacon of the church of Columbia Parish, now Prospect. One of his many sons became a Methodist minister. This Puritan deacon first disowned his son, but he soon forgave and embraced him. One of Gideon's descendants moved to the Shenandoah Valley. He was Jedediah Hotchkiss, cartographer and staff officer to General Thomas "Stonewall" Jackson.

richardstevenhack , 14 hours ago
Speaking of the signers, only three lived to see America's 50th Anniversary. Thomas Jefferson was unable to attend a reunion organized by the mayor of Washington, and this article provides the full text of his letter of RSVP.

Read What Thomas Jefferson Wrote on America's 50th Birthday
http://www.thetruthaboutgun...

Quote:

"May it be to the world, what I believe it will be, (to some parts sooner, to others later, but finally to all,) the Signal of arousing men to burst the chains, under which monkish ignorance and superstition had persuaded them to bind themselves, and to assume the blessings & security of self-government. That form which we have substituted, restores the free right to the unbounded exercise of reason and freedom of opinion. these are grounds of hope for others."

End Quote

It also cites this list of Jefferson quotes on the right to bear arms:

Thomas Jefferson on The Right To Bear Arms
https://www.nraila.org/arti...

[Jul 04, 2018] Pathology of Debt

Jul 04, 2018 | www.henryckliu.com

Pathology of Debt

By
Henry C.K. Liu

Part I: Commercial Paper Market Seizure turns Banks into their own Vulture Investors

This article appeared in AToL on November 27, 2007

Vulture restructuring is a purging cure for a malignant debt cancer. The reckoning of systemic debt presents regulators with a choice of facing the cancer frontally and honestly by excising the invasive malignancy immediately or let it metastasize over the entire financial system over the painful course of several quarters or even years and decades by feeding it with more dilapidating debt.

But the strategy of being your own vulture started with Goldman Sachs, the star Wall Street firm known for its prowess in alternative asset management, producing spectacular profits by manipulating debt coming and going amid unfathomable market anomalies and contradictions during years of liquidity boom. The alternative asset management industry deals with active, dynamic investments in derivative asset classes other than standard equity or fixed income products. Alternative investments can include hedge funds, private equity, special purpose vehicles, managed futures, currency arbitrage and other structured finance products. Counterbalancing opposite risks in mutually canceling paired speculative positions to achieve gains from neutralized risk exposure is the basic logic for hedged fund investments.

Hedge Funds

The wide spread in return on investment between hedge funds and mutual funds is primarily due to differences in trading strategies. One fundamental difference is that hedge funds deploy dynamic trading strategies to profit from arbitraging price anomalies caused by market inefficiencies independent of market movements whereas mutual funds employ a static buy-and-hold strategy to profit from economic growth. An important operational difference is the use of leverage. Hedge funds typically leverage their informed stakes by margining their positions and hedging their risk exposure through the use of short sales, or counter-positions in convergence or divergent pairs. In contrast, the use of leverage is often limited if not entirely restricted for mutual funds.

The classic model of hedge funds developed by Alfred Winslow Jones (1910-1989) takes long and short positions in equities simultaneously to limit exposures to volatility in the stock market. Jones, Australian-born, Harvard and Columbia educated sociologist turned financial journalist, came upon a key insight that one could combine two opposing investment positions: buying stocks and selling short paired stocks, each position by itself being risky and speculative, but when properly combined would result in a conservative portfolio that could yield market-neutral outsized gains with leverage. The realization that one could couple opposing speculative plays to achieve conservative ends was the most important step in the development of hedged funds.

The Credit Guns of August

Yet the credit guns of August 2007 did not spare Goldman's high-flying hedge funds. Goldman, the biggest US investment bank by market value, saw its Global Equity Opportunities Fund suffer a 28% decline with assets dropping by $1.4 billion to $3.6 billion in the first week of August as the fund's computerized quantitative investment strategies fumbled over sudden sharp declines in stock prices worldwide.

The Standard & Poor's 500 Index, a measure of large-capitalization stocks, fell 44.4 points or 2.96% on August 9. On August 14, the S&P 500 fell another 26.38 points or 1.83%, followed by another fall of 19.84 points to 1,370.50 or 1.39% on August 15, totaling 9.4% from its record high reached on July 19, but still substantially higher than its low of 801 reached on March 11, 2003 .

Goldman explained the setback in Global Equity Opportunities in a statement: "Across most sectors, there has been an increase in overlapping trades, a surge in volatility and an increase in correlations. These factors have combined to challenge many of the trading algorithms used in quantitative strategies. We believe the current values that the market is assigning to the assets underlying various funds represent a discount that is not supported by the fundamentals." The statement is a conceptual stretch of the meaning of "fundamentals" which Goldman defines as value marked to model based on a liquidity boom rather than marked to market, even as the model has been rendered dysfunctional by the reality of a liquidity bust.

The market value in mid August of two other Goldman funds: Global Alpha and North American Equity Opportunities also suffered big losses. Global Alpha fell 27% in the year-to-date period, with half of the decline occurring in the first week of August. North American Equity Opportunities, which started the year with about $767 million in assets, was down more than 15% through July 27. The losses had been magnified by high leverage employed by the funds' trading strategies. Goldman said both risk-taking and leverage in these two funds had since been reduced by 75% to cut future losses. Similarly, leverage employed by Global Equity Opportunities had been reduced to 3.5 times equity from 6 times. The three funds together normally managed about $10 billion of assets.

Feeding on One's Own Death Flesh

Facing pending losses, Goldman Chairman Lloyd Blankfein was reported to have posed a question to his distraught fund managers: if a similar distress opportunity such as Goldman's own Global Equity Opportunities presented itself in the open market outside of Goldman, would Goldman invest in it as a vulture deal. The answer was a resounding yes. Thus the strategy of feeding on one's own dead flesh to survive, if not to profit, took form.

Goldman would moderate its pending losses by profiting as vulture investor in its own distressed funds. The loss from one pocket would flow into another pocket as gains that, with a bit of luck, could produce spectacular net profit in the long run if the abnormally high valuations could be manipulated to hold, or the staying power from new capital injection could allow the fund to ride out the temporary sharp fall in market value. It was the ultimate hedge: profiting from one's own distress. The success of the strategy depends on whether the losses are in fact caused by temporary anomalies rather than fundamental adjustment. Otherwise, it would be throwing good money after bad.

The Fed Held Firm on Inflation Bias

The Fed, in its Tuesday, August 7 Fed Open Market Committee (FOMC) meeting, defied market expectation and decided against lowering interest rates with a bias against growth and focused instead on inflation threats. In response, the S&P 500 index, with profit margin at 9% against a historical average of 6%, fell 44.4 points or 2.96% to 1,427 on August 9. The Dow Jones Industrial Average (DJIA) dropped 387 points to 13,504 on the same day, even as the Federal Reserve pumped $62 billion of new liquidity into the banking system to help relieve seizure in the debt market.

On the following Monday, August 13, Goldman announced it would injected $2 billion of new equity from its own funds into its floundering Global Equity Opportunities fund, along with another $1 billion from big-ticket investors, including CV Starr & Co., controlled by former American International Group (AIG) chairman Maurice "Hank" Greenberg, California real estate developer Eli Broad who helped found SunAmerica and later sold it to AIG, and hedge fund Perry Capital LLC, which is run by Richard Perry, a former Goldman Sachs equity trader.

The new equity injection was intended to help shore up the long/short equity fund, which was down almost 30% in the previous week, to keep the fund from forced sales of assets at drastic discount long enough for markets to stabilize and for the fund to get out of the tricky leveraged bets it took before the credit markets went haywire in mid August. Global Equity "suffered significantly" as global markets sold off on worries about debt defaults credit draught, dragging the perceived value of its assets down to $3.6 billion, from about $5 billion.

Goldman chief financial officer David Viniair on a conference call with analysts was emphatic that the move was not a rescue but to capture "a good opportunity". After more than a week of panic over the disorderly state of global capital markets, Goldman Sachs pulled a kicking live rabbit magically out of its distressed asset hat.

On a conference call to discuss the additional equity investment in the $3.6 billion Global Equity Opportunities fund, Goldman executives insisted the move would not add to moral hazard (encouraging expectations that lead investors to take more risk than they otherwise might because they expect to be bailed out), but would merely reflect the firm's belief that the value of the fund's underlying assets was out of whack with "fundamentals" and that sooner or later the losses would be recouped when an orderly market returns.

"We believe the current values that the market is assigning to the assets underlying various funds represent a discount that is not supported by the fundamentals," Goldman explained in a statement. A day later, on August 14, the S&P 500 fell another 26.38 points or 1.83%, followed by another fall of 19.84 points or 1.39% on August 15, notwithstanding that a chorus of respected voices were assuring the public that the sub-prime mortgage crisis had been contained and would not spread to the entire financial system.

But Goldman did not inject more equity into two of its other funds: Global Alpha and North American Equity Opportunities that had also suffered sharp losses. Goldman said it was reducing leverage in the funds, a process that was mostly complete, but added that it was not unwinding Global Alpha, down 27% this year through August 13, about half of that in the previous week alone. Unlike Global Equity Opportunities, Goldman did not bolster its Global Alpha quantitative fund. Investors had reportedly asked to withdraw $1.6 billion, leaving Global Alpha with about $6.8 billion in assets after forced liquidation to pay the withdrawals.

Ireland registered Global Alpha, originally seeded in 1995 with just $10 million and returned 140% in its first full year of operation, was started by Mark Carhart and Raymond Iwanowski, young students of finance professor Eugene Fama of the University of Chicago . Fama's concept of efficient markets is based on his portfolio theory which states that rational investors will use diversification to optimize their portfolios based on precise pricing of risky assets.

Global Alpha soon became the Rolls Royce of a fleet of alternative investment vehicles that returned over 48% before fees annually. Hedge funds usually charge management fees of up to 2% of assets under management and 20% of investment gains as incentive fees. Global Alpha fees soared to $739 million in first quarter of 2006, from $131 million just a year earlier and boosted earnings rise at the blue-chip Goldman Sachs by 64% to $2.48 billion, the biggest 2006 first-quarter gain of any major Wall Street firm. Goldman is one of the world's largest hedge fund managers, with $29.5 billion in assets under management in an industry that oversees $2.7 trillion globally. Goldman reported in October 2006 that its asset management and securities services division produced $485 million, or 21% of its $2.36 billion in pretax profit for the fiscal third quarter.

For 2006, Global Alpha dropped 11.6% through the end of November and end up dropping 9% for the year yet still generating over $700 million in fees from earlier quarters. That was the first annual decline in seven years and followed an almost 40% gain for all of 2005. The fund took a hit misjudging the direction of global stock and currency markets, specifically that the Norwegian krone and Japanese yen would decline against the dollar. Global Alpha lost money partly on wrong-way bets that equities in Japan would rise, stocks in the rest of Asia and the US would fall and the dollar would strengthen. Before August 2007, the fund had lost almost 10% on wrong bet in global bond markets.

Goldman's smaller $600 million North American Equity Opportunities fund had also hit rough waters, losing 15% this year. There was real danger of a rush of redemptions from nervous investors that would force the funds to sell securities in a market that had all but seized up, forcing down asset prices to fire sale levels. Global Equity Opportunities investors were entitled to pull their money monthly with a 15-day warning, meaning notices for Aug. 31 were due on August 16. Global Alpha investors could redeem quarterly, and certain share classes also must notify the fund by the week of August 13.

Hedge funds are private, largely unregulated pools of capital whose managers command largely unrestricted authority to buy or sell any assets within the bounds of their disclosed strategies and participate in gains but not losses from investment. The industry has been growing over 20% annually due to its above-market performance. Still, Carhart and Iwanowski, both in their early forties, had not been able to take any of their 20% incentive fees since Global Alpha fell from its 2006 peak. They would have to make good about 60% of their previous incentive fees from profit, if any, in future quarters before they could resume taking a cut of the fund's future gains.

The Fed Wavered

By August 16, the DJIA fell way below 13,000 to an intraday low of 12,445, losing 1,212 points from its 13,657 close on August 8. The next day, August 17, the Fed while keeping the Fed Funds rate target unchanged at 5.25%, lowered the Discount Rate by 50 basis points to 5.75%, reducing the gap from the conventional 100 basis points by half to 50 basis points and changed the rules for access by banks to the Fed discount window.

In an accompanying statement, the Fed said: "To promote the restoration of orderly conditions in financial markets, the Federal Reserve Board approved temporary changes to its primary credit discount window facility. The Board approved a 50 basis point reduction in the primary credit rate to 5-3/4 percent, to narrow the spread between the primary credit rate and the Federal Open Market Committee's target federal funds rate to 50 basis points. The Board is also announcing a change to the Reserve Banks' usual practices to allow the provision of term financing for as long as 30 days, renewable by the borrower. These changes will remain in place until the Federal Reserve determines that market liquidity has improved materially. These changes are designed to provide depositories with greater assurance about the cost and availability of funding. The Federal Reserve will continue to accept a broad range of collateral for discount window loans, including home mortgages and related assets. Existing collateral margins will be maintained. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York and San Francisco ."

The Fed Panicked

A month later, on September 18, brushing aside a DJIA closing at a respectable 13,403 the day before even in the face of poor employment data for August, the Fed panicked over the unemployment data and lowered both the Fed Funds rate target and the Discount Rate each by 50 basis points to 4.75% and 5.25% respectively. The rate cuts gave the DJIA a continuous rally for 9 consecutive days that ended on October 1 at 14,087. Obviously, the Fed knew something ominous about the credit market that was not reflected in the DJIA index.

The Global Equity Opportunities fund, now with about $6.6 billion in asset value, was using six times leverage before the capital infusion. Like many other managers, Goldman was experiencing the same problems with its so-called quantitative funds. Quant funds use computerized models to make opportunistic investment decisions on minute statistic disparities in asset prices caused by market inefficiency. When the short-term credit market seized up, the quant models turned dysfunctional.

Funds caught with significant losses in credit and bond investments had to sell stock holdings to lower the risks profile of their overall portfolios, and the herd selling in the stock market magnified the price shift in a downward spiral. Stocks that were held long fell in price, and stocks that were held short rose, exacerbating losses.

Opacity Fueled Market Rumors

As required, quant fund managers have been disclosing losses to investors but they are not required to disclose to the market. The opacity fueled the rumor mill. Renaissance Technology's $26 billion institutional equities fund was reportedly down 7% for the year. Some of the funds Applied Quantitative Research (AQR) managed were down as well, as were quant funds at Tykhe Capital, Highbridge Capital and D.E. Shaw (of which Lehman now owns 20%).

Vulture Opportunities in Distressed Funds

At Goldman, quant funds made up half of the $151 billion of alternative investments under management, and half of which was the sort of long-short equity quant funds that had been having trouble. But Goldman executives began to see opportunities in distressed funds. The highly respected AQR was raking in new funds to invest in distressed situations, as were other astute fund managers. AQR is an investment management firm employing a disciplined multi-asset, global research process, with investment products provided through a limited set of collective investment vehicles and separate accounts that deploy all or a subset of AQR's investment strategies. These investment products span from aggressive high volatility market-neutral hedge funds, to low volatility benchmark-driven traditional products. AQR's founder is Clifford S. Asness, a Goldman alumni where he was Director of Quantitative Research for the Asset Management Division responsible for building quantitative models to add value in global equity, fixed income and currency markets. H e was another of Fama's students at the University of Chicago .

Goldman was putting its own money down alongside that of select outside investors, an expression of its faith in the fund's ability to recoup. The situation differed from that of Bear Stearns which had to loan $1.6 billion to bail out one of two internal hedge funds that had big problems with exposure to mortgage-related securities.

The First Wave of Warnings

Goldman, one of the world's premiere financial companies, had joined Bear Stearns and France 's BNP Paribas in revealing that its hedge funds had been hit by the credit market crisis. Bear Stearns earlier in the summer disclosed that two of its multibillion dollar hedge funds were wiped out because of wrong bets on mortgage-backed securities. BNP Paribas announced a few weeks later it would freeze three funds invested in US asset-backed securities.

The assets of the two troubled Bear Stearns hedge funds had been battered by turmoil in the credit market linked to sub-prime mortgage securities. On Jun 20, 2007 , $850 million of the funds' assets held as collateral was sold at greatly discounted prices by their creditor, Merrill Lynch & Co. The assets sold included mortgage-backed securities (MBS), collateralized debt obligations (CDO) and credit default swaps (CDS). JP Morgan, another Bear Stearns creditor, had also planned an auction for some of the collateralized assets of the Bear Stearns funds, but cancelled the auction to negotiate directly with the Bear Stearns funds to unwind positions via private transactions to avoid setting a market price occasioned by market seizure.

The two Bear Stearns funds: High-Grade Structured Credit Strategies Enhanced Leverage Fund and High-Grade Structured Credit Strategies Fund, run by mortgage veteran Ralph Cioffi, were facing shut-down as the rescue plans fell apart. The funds had slumped in the first four months of 2007 as the subprime mortgage market went against their positions and investors began asking for their money back. The High-Grade Structured Credit Strategies Enhanced Leverage Fund sold roughly $4 billion of subprime mortgage-backed securities in mid June, selling its highest-rated and most heavily traded securities first to raise cash to meet redemption requests from investors and margin calls from creditors, leaving the riskier, lower-rated assets in its portfolio that had difficulty finding buyers.

Collateral Debt Obligation Crisis

CDOs are illiquid assets that normally trade only infrequently as institutional investor had not intended to trade such securities. Demand for them is not strong even in normal times. In a credit crunch, demand became extremely weak. Sellers typically give investors one or two days to price the assets and bid in order to get the best price. Bid lists were now sent out for execution within roughly an hour, which was unusual and suggested that sellers were keen to sell the assets quickly at any price.

Bear Stearns' High-Grade Structured Credit Strategies Enhanced Leverage Fund sold close to $4 billion worth of AAA and AA rated securities. The fund was started less than a year ago with $600 million in assets, but used leverage to expand its holdings to more than $6 billion. But subprime mortgage trades that went wrong left the fund down 23% in the first four months of 2007. The fund was selling its highest-rated and most tradable securities first to raise cash to meet expected redemption requests and margin calls. Buyers were found for the bonds but the fund still had to retain lower-rated subprime mortgage-based securities which had triggered its losses earlier in the year.

Bear Stearns was highly leveraged in an illiquid market and was faced with the prospect that its funds were going to start getting margin calls so it tried to sell ahead of being in the worst spot possible. Subprime mortgages were offered at low initial rates to home buyers with blemished credit ratings who could not carry the adjusted payments if and when rates rise. This was not a problem as long as prices for houses continued to rise, allowing the lenders to shift loan repayment assurance from the borrower's income to the rising value of the collateral. Thus subprime mortgages lenders were not particularly concerned about borrower income for they were merely using home buyers as needed intermediaries to profit from the debt–driven housing boom. This strategy worked until the debt balloon burst. Rising delinquencies and defaults in this once-booming part of the mortgage market had triggered a credit crunch earlier in the year that left several lenders bankrupt. Many hedge funds had generated big gains for several years on this unstainable liquidity boom. The premature bears who shorted the market repeated lost money as the Fed continued to feed the debt balloon to sustain the unsustainable.

As delinquencies and foreclosures rose finally, losses first hit the riskiest tranches of subprime mortgage-backed securities (MBS). The losses were subsequently transmitted to collateralized debt obligations (CDOs) which invested in the higher-rated tranches of subprime MBS that did not have an active market since they were bought by institutions with the intention to hold until maturity. Such securities were super safe as long as their ratings remain high.

Hedge funds have become big credit-market players in recent years, and many firms trade the riskiest tranches of subprime MBS and higher-rated CDOs tranches to profit from the return spread. While some funds, such those managed by Cheyne Capital and Cambridge Place Investment Management, had suffered sudden losses, some hedge funds made handsome gains in February 2007 betting that a subprime mortgage crisis would hit.

As the number of market participants increased and the packaging of the CDO became more exoteric over the liquidity boom years, it became impossible to know who were holding the "toxic" tranches and how precisely the losses would spread, since the risk profile of each tranche would be affected by the default rates of other tranches. The difficulty in identifying the precise locations of risk exposure caused a sharp rise in perceived risk exposure system wide. This sudden risk aversion led to rating downgrades of the high-rated tranches, forcing their holders to sell into a market with few buyers.

The Federal Deposit Insurance Corporation, which monitors risk in the banking system, tracks bank holdings of MBS, but not specific tranches of CDOs. It has no information on which bank holds CDOs and how much, since such instruments are held by the finance subsidiaries of bank holding companies, off the balance sheets of banks. Asian investors, particularly those in Japan , had been eager to seek off-shore assets yielding more than the near zero or even negative interest rates offered at home. Many Japanese as well as foreign investors participated in currency "carry trade" to arbitrage interest rate spreads between the Japanese yen and other higher interest rate currencies and assets denominated in dollars, fueling a liquidity boom in US markets. The US trade deficit fed the US capital account surplus as the surplus trade partners found that they could not convert the dollars they earned from export to the US into local currencies without suffering undesirable rise in money supply. The trade surplus dollars went into the US credit market.

The growth of CDOs has been explosive during the past decade. In 1995, there were hardly any. By 2006, more than $500 billion worth was issued. About 40% of CDO collateral was residential MBS, with three quarters in subprime and home-equity loans, and the rest in high-rated prime home loans. CDOs became an important part of the mortgage market because their issuers also bought the riskier tranches of MBS that others investors shunned. The high-rated tranches of MBS were sold easily to pension funds and insurers. But the ultra-high rated tranches paid such low returns because of their perceived safety that few buyers were interested, forcing the banks which structured them to hold them themselves. The issuers often hold the more riskier tranches to sell at later dates for profit when the value of the collateral rose with rising home prices. But when the riskier tranches could not be sold as home prices fell and mortgage default rose, the higher rating tranches suffered rating drops and institutional buyers were prevented by regulation to hold the ones they had bought and from buying new ones. When the ultra safe tranches held by banks are downgraded, banks are forced to writedown their value. With CDOs withdrawing from the residential MBS market, mortgage lenders were unable to sell the loans they had originated for new funds to finance new mortgages.

The chain of derivative structures that turns home loans into CDOs begins when a mortgage is packaged together with other mortgages into an MBS. The MBS is then sliced up into different CDO tranches that pay on a range of interest rates tied to risk levels. Mortgage payments go first to the highest-rated tranches with the lowest interest rates. The remaining funds then flows down to the next risky tranches until all are paid. The riskiest CDO tranches get paid last, but they offer the highest interest rates to attract investor with strong risk appetite.

In theory, all trenches have the same risk/return ratio. As the liquidity boom has gone on for years with the help of the Fed, historical data would suggest that risks of default should be minimal. Yet when losses actually occurred from unanticipated mortgage defaults and foreclosures, the riskiest tranches were hit first, while the top-rated tranches were hit last. But until losses occurred, the riskier tranches got the higher returns. Over the years, the riskier tranches generated big profit for hedge funds when the risks did not materialize to overwhelm the high returns. The problem was that the profitability drove new issues of MBS at a faster pace than maturing MBS, with the number and amount of outstanding securities getting bigger with each passing year, exposing investors to aggregate risk higher than the accumulated gains. Because of the complexity and opacity of the CDO market, institutional investors were not alerted by rating agencies of the fact that their individual safety actually caused a sharp rise in systemic risk. They felt comfortable as long as assets they acquired were rated AAA and deemed bankruptcy-remote, not realizing the system might seize up some Wednesday morning. That Wednesday came on August 15, 2007 .

CDOs, a cross between an investment fund and an asset-backed security (ABS), perform this slicing process of risk/reward unbundling repeatedly to keep money recycling and money supply growing in the mortgage market. While CDOs lubricate the credit market to make more home financing affordable to more home buyers, it raises the price of home and its financing cost beyond the carrying capability of almost all home buyers when the bursting of the debt bubble resets interest rates to normal levels, making a rising default rate inevitable.

Hedge funds are attracted by the high returns offered by the lowest-rated tranches of subprime MBS undbubled by CDOs, the so-called equity tranches which sink underwater as home prices fall. Many hedge funds arbitrage the wide return spread with low-cost funds borrowed in the commercial paper market and magnify the return with high leverage through bank loans. They often hedge against risk by holding derivatives that are expected to rise in value when housing prices fall, such as interest rate swaps. They also hedge against defaults with credit default swaps. These hedges failed when risk was re-priced by the market at rollover time for short-term securities which could be every 30 days.

CDOs and Commercial Paper

Much of the money used to buy CDOs come form the commercial paper market. Commercial paper consists of short-term, unsecured promissary notes issued primarily by financial and non-financial corporations. Maturities range up to 270 days but average about 30 days. Many companies use commercial paper to raise cash needed for current transactions, and many find it to be a lower-cost alternative to bank loans. Financial companies use high-rated CDO tranches as collateral to back their commercial paper issues.

Because commercial paper maturities do not exceed nine months and proceeds typically are used only for current transactions, the notes are exempt from registration as securities with the United States Securities and Exchange Commission.

Large institutions have long managed their short-term cash needs by buying and selling securities in the money market since the early 1970's. Today, a broad array of domestic and foreign investors uses these versatile, short-term securities to help to make the money market the largest, most efficient credit market in the world driving assets from $4 billion in 1975 to more than $1.8 trillion today. This money market is a fixed income market, similar to the bond market. The major difference being that the money market specializes in very short term debt securities.

The money market is a securities market dealing in short-term debt and monetary instruments. Money market instruments are forms of debt that mature in less than one year and are very liquid but traded only high denominations. The easiest way for individual investor to gain access is through money market mutual funds, or sometimes through a money market bank account. These accounts and funds pool together the assets of thousands of investors and buy the money market securities on their behalf.

Borrowing short-term money from banks is often a labored and uneasy situation for many corporations. Their desire to avoid banks as much as they can has led to the popularity of commercial paper. For the most part, commercial paper is a very safe investment because the financial situation of a large company can easily be predicted over a few months. Furthermore, typically only companies with high credit ratings and credit worthiness issue commercial paper and over the past 35 years there have only been a handful of cases where corporations defaulted on their commercial paper repayment.

ABCP Conduits

Asset backed commercial paper (ABCP) is a device used by banks to get operating assets, such as trade receivables, funded by the issuance of securities. Traditionally, banks devised ABCP conduits as a device to put their current asset credits off their balance sheets and yet provide liquidity support to their clients. Conduits raise money by selling short-term debt and using the proceeds to invest in assets with longer maturities, like mortgage-backed bonds. Conduits typically have guarantees from banks, which promise to lend them money up to the amount of the SIVs the banks structure.

A bank with a client whose working capital needs are funded by the bank can release the regulatory capital that is locked in this credit asset by setting up a conduit, essentially a special purpose vehicle (SPV) that issues commercial paper, such as the ones used by Enron that led to its downfall. The conduit will buy the receivables of the client and get the same funded by issuance of commercial paper. The bank will be required to provide some liquidity support to the conduit, as it is practically impossible to match the maturities of the commercial paper to the realization of trade receivables. Thus, the credit asset is moved off the balance sheet giving the bank a regulatory relief. Depending upon whether the bank provides full or partial liquidity support to the conduit, ABCP can be either fully supported or partly supported.

ABCP conduits are virtual subsets of the parent bank. If the bank provides full liquidity support to the conduit, for regulatory purposes, the liquidity support given by the bank may be treated as a direct credit substitute in which case the assets held by the conduit are aggregated with those of the bank. ABCP conduits are also set up large issuers that are not banks.

The key weakness in the entire credit superstructure lies in the practice by intermediaries of credit to borrow short term to finance long term. This term carry is magical in an expanding economy when the gap between short term and long term credit is narrower than gains from long term asset appreciation. But in a contracting economy, it can be a fatal scenario, particularly if falls in short term rates raise the credit rating requirement of the short term borrower, putting previously qualified loans in technical default. Securities that face difficulty in rolling over at maturity are known as "toxic" in the trade.

Lethal Derivatives

The credit default swap market is a microcosm of investor confidence. Credit default swaps are insurance for bad debt. Insured creditors are compensated by the seller of the insurance if a debtor defaults on a loan. When the threat of default rises in the market, the insurance premium rises, just as Katrina boosted hurricane insurance premium. This is known in the business as re-pricing of risk. The cost of credit default swaps written on investment banks such as Bear Stearns and Goldman Sachs and on commercial banks such as Citibank have soared in the past few months amid worries that troubles in the subprime-mortgage market and the leveraged-buyout market could leave them with massive loan defaults. The financial industry tracks mortgage-linked securities via the ABX index, which calculates the prices of a basket of assets backed by subprime loans.

The ongoing crisis in the US housing market has pushed the ABX, a key mortgage-linked derivatives index, to new lows, threatening to unleash a further bout of credit market upheaval. Price swing in the ABX can reduce the value of ultra-safe credit instruments that carried high credit ratings, forcing banks and other regulated investors to make further large write-downs on their credit market holdings, on top of the huge losses several major US and foreign banks suffered from credit turmoil that began in August.

As the US mortgages market deteriorates, financial sector losses will accumulate. Secondary market price movements indicate that losses on mortgage inventory are likely to be larger in coming quarters. Before July, the part of the ABX index that tracks AAA debt was trading almost at face value. However, in the last three weeks in October, it has fallen sharply due to downgrades by credit rating agencies and continuing bad data from the housing sector.

As a result, the so-called ABX 07-1 index – which tracks AAA mortgage bonds originated in the first half of this year – fell to a record low close of 79 on October 30, meaning that traders reckon these bonds are worth only 79 cents on the dollar. The ABX "BBB" 07-1 index measures the performance of loans made during the second half of 2006, when many home purchase loans were made to buyers with shaky credit standings. The index traded around 44, or 44 cents on a dollar, nearly its weakest level ever.

The swing is creating real pain for investors, since in recent years numerous firms have created trading strategies which have loaded large debt levels onto these "safe" securities, precisely because these instruments were not expected to fluctuate in price. Investors normally hold such "safe" securities to maturity thus there is no demand for a ready market for them. But as the credit rating of these securities falls, investor cannot find buyer for them at any reasonable price. The last week in October saw the worst falls in the ABX market this year, especially higher up the capital structure with highly rated debt.

Pension funds and insurance companies hold the less risky, senior CDO tranches because regulatory rules restrict them from investing in lower-rated securities. When the low-rated tranches default in large numbers, the high-rated tranches lose rating and these regulated institutions are forced to sell their non-conforming holdings into a market with few buyers.

Pension funds, insurance companies and university endowment funds have also invested in hedge funds that hold the riskier CDO tranches to get higher returns. In recent years, CDO issuance has exploded and many hedge funds have been buying the riskiest tranches of MBS that are backed by subprime loans. Mortgages closed by 4 pm New York time were sent electronically to back-office locations in India to be packaged into CDO tranches and resent electronically to New York at 9:30 am the next day to be sold in the credit market, generating huge fees and profits for Wall Street firms every day.

Rating Agencies Under Pressure

Moody's Investors Services, an influential rating agency, warned in late July that defaults and downgrades of subprime MBS could have "severe" consequences for CDOs that invested heavily in the sector. CDOs that Moody's rated from 2003 to 2006 had 45% exposure to subprime MBS on average. But that varied widely from almost zero to 90% with recent CDOs having the high concentrations of such collateral, the potential downgrade for which could be 10 or more notches in rating. The secondary market for CDOs responded to these heightened risks, pushing prices down and widening spreads - the difference between interest rates on riskier debt and measures of short-term borrowing costs such as the London Interbank Offered Rate (LIBOR) or commercial paper rates. Spreads on BBB-rated asset-backed securities (ABS) CDOs over LIBOR have widened by roughly 125 basis points to 657 basis points since the end of 2006.

Structured investment vehicles (SIVs)

Although the first structured investment vehicles (SIVs) appeared in the structured finance world some 15 years ago, and the growth of SIVs had been somewhat limited, (there are fewer than 20 vehicles globally), there is no doubt that these sophisticated bankruptcy-remote structures have strongly influenced other funding vehicles and asset management businesses. Since 2002, there has been renewed interest by different types of financial institutions in starting up SIVs or SIV-like structures with evolved capital structures embracing new classes of financial instruments.

The first SIVs were founded in the mid-1980s as bankruptcy-remote entities and were sponsored by large banks or investment managers for the purpose of generating leveraged returns by exploiting the differences in yields between the longer-dated assets managed and the short-term liabilities issued. The balance sheet of a structured investment vehicle typically contains assets such as asset-backed securities (ABS) and other high-grade securities that are funded through issued liabilities in the form of commercial paper (CP) and medium-term note (MTN) and subordinate capital notes. SIVs typically hedge out all interest and currency risks using swaps and other derivative instruments.

Overall, CP and MTN issuance shot up dramatically in 2004, up US$25.7 billion to US$133.1 billion at year-end, with capital investments at an all-time high. In general, advances in capital structures and asset portfolio management have invigorated interest from investors and prospective sponsors.

SIVs, Conduits and Asset-Backed Commercial Paper (ABCP)

SIVs are typically funded in the low interest short-term asset-backed commercial paper (ABCP) market to invest in high-return long-term securities for profit. The viability of the stratagem depends on the ability to roll over the short-term commercial paper when they mature in typically less than 120 days. To keep the liquidity risk at a minimum, issuers stagger the maturity so that only a small portion of the loan needs to be refunded in any one week. The credit market crisis in mid 2007 created a break in short-term debt rollovers to cause a funding mismatch in long-term assets positions because investors have stopped buying new ABCP issued by some SIVs and conduits.

What separates a SIV from other investment vehicles is the nature of its ongoing relationship with rating agencies – from the originating qualification process to the continuous monitoring of its asset diversification, risk management and funding practices. These guidelines include frequent reporting of operating parameters such as portfolio credit quality, portfolio diversification, asset and liability maturity, market risk limitations, leverage and capital adequacy requirements, and liquidity requirements.

The rigorous monitoring allows SIVs to be highly capital efficient, enabling them to be leveraged on an average of 12 times the capital base, with exceptions. Unlike related traditional asset backed commercial paper (ABCP) conduits, SIVs do not require 100% liquidity support and credit enhancement.

Many SIVs faced trouble in the summer of 2007 as they were hit by both sharp falls in the value of their investments, mainly financial debt and asset-backed bonds, and a lack of access to new refinancing as investors shunned short-term commercial paper debt linked to asset-backed securities (ABCP).

Most CDOs are cash flow transactions not directly sensitive to the market value of their underlying assets as long as the cash flow is undisturbed. But if a CDO manager needs to sell an asset quickly even at a loss because of ratings agency downgrade, the CDO manager will be forced to carry the remaining assets at a lower value, upsetting both collateral for the agreed cash flow and the balance sheet of the participants.

While some hedge funds have profited from the sublime mortgage meltdown, other funds have been hit hard, resulting in a deteriorating financial sector as asset values plummeted faster than potential gains by vultures.

Other big lenders that raised warning flags earlier about bad-performing debt portfolios included Washington Mutual, New Century Financial and Marshall & IIsley Corporation. Foreclosures jumped 35% in December 2006 versus a year earlier. For the fifth straight month, more than 100,000 properties entered foreclosure because the owner couldn't keep up with their loan payments. In January 2007, Washington Mutual disclosed that its mortgage business lost $122 million in the fourth quarter, highlighting the weak sub-prime market.

New York Attorney General Sues Appraisal Company

New York Attorney General Andrew Cuomo, a potential Democrat gubernatorial candidate for New York, has filed suit against eAppraiseIT (EA), a real estate appraisal management subsidiary of First American Corporation, for having "caved to pressure from Washington Mutual" to inflate property values of homes. Washington Mutual allegedly complained to EA that "its appraisals weren't high enough." Cuomo said in a statement that "consumers are harmed because they are misled as to the value of their homes, increasing the risk of foreclosure and hindering their ability to make sound economic decisions. Investors are hurt by such fraud because it skews the value and risk of loans that are sold in financial markets." The bank is also facing a number of class action suits from irate borrowers.

Shares of government sponsored mortgage lenders Fannie Mae and Freddie Mac tumbled after receiving subpoenas seeking information on loans they bought from Washington Mutual and other banks. Cuomo said he uncovered a "pattern of collusion" between lenders and appraisers, and is seeking documents that may prove the lenders inflated appraisal values. The subpoenas also seek information on Fannie and Freddie's due diligence practices. If decided that they own or guarantee mortgages with inflated appraisals, company policy dictates that the lenders buy back the loans. "In order to fulfill their duty to consumers and investors, Fannie Mae and Freddie Mac must ensure that Washington Mutual's mortgages have not been corrupted by inflated appraisals," Cuomo said. In 2007, WaMu is Fannie Mae's third-largest loan provider, selling it $24.7 billion and Freddie Mac's fourteenth largest at $7.8 billion. Washingtom Mutual share fell 17% after it announced it would set aside $1.3 billion fourth quarter 2007 for credit losses, up from $967 million in the third quarter.

Mortgage Lenders Fell Like Flies

The handwriting had been clearly on the wall. Back on February 6, New Century Financial shares plunged 29% after the mortgage services provider slashed its forecast for loan production for 2007 because early-payment defaults and loan repurchases had led to tighter underwriting guidelines. A week later, Pasadena, Calif.-based IndyMac Bancorp Inc. which sold Alt-A mortgages for borrowers who were not required to submit conforming income and financial documents necessary to quality for conventional conforming mortgages, warned that its quarterly earnings would come in well short of analyst expectations because of increased loan losses and delinquencies. Other lenders were also squeezed by deteriorating credit. Marshall & IIsley reported a jump in non-performing assets in the quarter, while Bank of the Ozarks reported a 69% increase in problem loans. US Bancorp predicted an increase in retail loan charge-offs and commercial loan losses in coming quarters. Wells Fargo warned it expected net credit losses from wholesale banking to increase in 2007.

Britain 's Barclays PLC, in the midst of an unsuccessful takeover battle for ABN Amro, was reported as among the banks that were having trouble with bad loans and its hedge funds. Barclays Global Investors was one of the world's biggest fund managers, with some $2 trillion in assets under management.

The Case of Countrywide Financial

Non-conforming mortgages securities packaged by Countrywide Financial needed to be sold in the private, secondary market to alternative investors, instead of the agency market. On August 3, 2007 , this secondary market collapsed and essentially stopped the sales of most non-conforming securities. Alt-A mortgages (loans given to self-declared creditworthy borrowers without supporting documentation) completely stopped trading and the seizure extended to even AAA-rated mortgage-backed securities. Only securities with conforming mortgages were trading. Unfazed, Countrywide Financial issued a reassuring statement that its mortgage business had access to a nearly $50 billion funding cushion.

In reality, the sub-prime mortgage meltdown put Countrywide Financial, along with many other mortgage lenders, in a crisis situation of holding drastically devalued loan portfolios that could not be sold at any price. Amid rising defaults, investors have fled from mortgage-related investments, drying up market demand. The ongoing credit crunch threatened Countrywide's normal access to cash.

After the collapse of American Home Mortgage on August 6, the market's attention returned to Countrywide Financial which at the time had issued about 17% of all mortgages in the United States . Days later, Countrywide Financial disclosed to the SEC that disruptions in the secondary mortgage markets could adversely affect it financially. The news raised speculation that Countrywide was a potential bankruptcy risk. On August 10, a run on the Countrywide Bank began as the secondary mortgage market shutdown, curtailing new mortgage funding.

The perceived risk of Countrywide bonds rose sharply. Credit ratings agencies downgraded Countrywide to near junk status. The cost of insuring its bonds rose 22% overnight. This development limited Countrywide access to the short-term commercial paper debt market which normally provides cheaper money than bank loans. Institutional investors were trying desperately to unload outstanding Countrywide paper held in their portfolios. Some 50 other mortgage lenders had already filed for Chapter 11 bankruptcy, and Countrywide Financial was cited as a possible bankruptcy risk by Merrill Lynch and others on August 15. This combined with news that its ability to issue new commercial paper might be severely hampered put severe pressure on the stock. Countrywide shares fell $3.17 to $21.29, which was its biggest fall in a single day since the crash of 1987 when the shares fell 50% for the year. The 52-week low to date was $12.07 per share.

On Thursday, August 16, having expressed concerns over liquidity because of the decline of the secondary market for securitized mortgage obligations, Countrywide also announced its intention to draw on the entire $11.5 billion credit line from a group of 40 banks. On Friday August 17, many depositors sought to withdraw their bank accounts from Countrywide. It also planned to make 90% of its loans conforming. By this point stock shares had lost about 75% of their peak value and speculation of bankruptcy broadened.

The Fed Discount Window Accepts Toxic Collateral from Banks

At the same time the Federal Reserve lowered the discount rate 50 basis points in a last-minute, early morning conference call. The Fed also accepted $17.2 billion in repurchase agreements for mortgage backed securities to provide liquidity in the credit market. This helped calm the stock market and investors promptly responded positively with the Dow posting temporary gains.

Additionally, Countrywide was forced to restate income it had claimed from accrued but unpaid interest on "exotic" mortgages in which the initial pay rate was less than the amortization rate. By mid 2007, it became apparent much of this accrued interest had become uncollectible. In a letter dated August 20, Federal Reserve agreed to waive banking regulations at the request of Citigroup and Bank of America to exempt both banks from rules that limited the amount that federally-insured banks can lend to related brokerage companies to 10% of bank capital, by increasing the limit to 30%. Until then, banking regulations restricted banks with federally insured deposits from putting themselves at risk by brokerage subsidiaries' activities. On August 23, Citibank and Bank of America said that they and two other banks accessed $500 million in 30-day financing at the Fed's discount window at the new low rate of 5.25%.

On the next day, Countrywide Financial obtained $2 billion of new capital from Bank of America Corp, the banking holding parent. In exchange, the Bank of America brokerage arm would get convertible preferred stock yielding 7.3%, a profitable spread over its Fed discount rate of 5.25% and the Fed funds rate of 4.75%. The preferred stocks can be converted into common stock at $18 per share (trading around $12 on October 25). This gave the distressed mortgage lender a much-needed cash infusion amid a crippling credit crunch. Countrywide shares soared 20.01%, or $4.37, to $26.19 after hours on the news. Bank of America shares rose 1.9%, or 98 cents, to $52.63 (trading around $46.75 on October 25 after announcing third quarter earning dropping 32%).

SEC to Scrutinize Security Valuation

The Securities and Exchange Commission (SEC) is reportedly looking into the accounting and securities valuation practices at Wall Street investment banks to ensure consistency and clarity for investors. Meanwhile, major financial institutions were lining up to announce write-downs on their sub-prime mortgage exposures. Merrill Lynch wrote down $5.5 billion which was later revised to $8 billion; Citigroup $3.3 billion which was later revised to $11 billion; Goldman Sachs $1.7 billion, Lehman Brothers $1 billion, Morgan Stanley $0.9 billion and Bear Sterns $0.7 billion. Many in the market expect further write downs in coming quarters. Already Merrill Lynch write down is widely put at more than $14 billion and few believe that Citigroup's loss could be kept to $11 billion in coming quarters. The heads of Merrill, UBS and Citigroup all resigned.

Wachovia, the fourth-largest US bank by assets, estimated on Friday, November 9 that the value of its subprime mortgage-related securities had fallen $1.1 billion in October. It said loan-loss provisions would be increased by as much as $600 million in the fourth quarter due to "dramatic declines" in home values. The announcement came three weeks after Wachovia reported writedowns of $1.3 billion in the third quarter and posted its first earnings drop in six years.

Morgan Stanley, the second-biggest U.S. securities firm, said on November 7 its subprime mortgages and related securities lost $3.7 billion in the past two months, after prices sank further than the firm's traders anticipated. The decline may cut fourth-quarter earnings by $2.5 billion. Colm Kelleher, Morgan Stanley chief financial officer to the Financial Times in an interview: "You need to see some of these long positions reduced, you need to see buyers coming in, you need to see an easing of liquidity in the market." Kelleher said credit markets would take three or four quarters to recover, instead of the one or two he estimated when the firm reported third-quarter results on September 19.

Concerns about potential writedowns at Morgan Stanley have pushed the stock lower this week, bringing the year-to-date decline to 24 percent. The stock fell $3.32, or 6.9%, to $51.19 in New York Stock Exchange composite trading on November 8. Analysts estimate the firm would lose about $4 billion on asset- backed securities and collateralized debt obligations and expected the remaining losses to be booked on residual mortgage interest and on credit lines to structured investment vehicles.

Being Right Can lead to Losses through Aggressive Hedging

Part of the losses Morgan Stanley incurred stemmed from derivative contracts the firm's proprietary trading unit wrote earlier in the year. The traders anticipated correctly a decline in the value of subprime securities and took up short positions and the contracts made money for the firm in the second quarter. But the contracts started losing money when prices fell below the level the traders had anticipated. As markets continued to decline, the firm's risk exposure swung from short, to flat to long because the structure of the book had big negative convexity. For any given bond, a graph of the relationship between price and yield is a convex curve rather than a linear straight-line. As a bond's price goes up, its yield goes down, and vice versa. The degree to which the graph is curved shows how much a bond's yield changes in response to a change in price. Negative convexity gives the investor a greater loss in the event of a 50 basis points drop in yields than his gain in the event of a 50 basis points rise in yields. For any given move in interest rates, the downside is bigger than the upside to give a built-in loss for a short position with negative convexity. Sophisticated traders can create instruments which have so much negative convexity that the price might start off moving in one direction as yields start moving, and then eventually start moving in the opposite direction beyond a given range. The hedge then begins to cannibalize profitability.For any given move in interest rates, the downside is bigger than the upside to give a built-in loss for a short position with negative convexity, thus producing losses. For positive convexity, the upside is bigger than the down side, thus giving short positions an advantage. Morgan Stanley's short positions allegedly turned against them by negative convexity; at least that was how they explained the loss. Some analysts think there must be more than meets the eye, assuming Morgan management itself even know. The people who put on the bad trades were fired and not there to answer questions.

It is one thing to lose money, but it is quite another to lose money without knowing why and how. Morgan Stanley, Citibank, and the rest still have difficulty figuring out how they lost money last quarter and how much loss is waiting in future quarters. They only know the numbers came in very bad.

SEC Concern over Accuracy of Writedowns

US market regulators have been working with investment banks and accounting firms over the past few months to keep tabs on how they are dealing with changes to the accounting treatment of securities that were introduced this year by the US Financial Accounting Standards Board (FASB). The SEC has been particularly concerned during the third quarter earnings season, which resulted in billions of dollars in write-downs at investment banks after problems in the sub-prime mortgage markets that triggered a wider credit crisis. At issue is whether these write-downs accurately reflect the total financial impact of the credit crisis on the banks and their investors.

The SMELEC Super Fund Proposal

Citigroup, Bank of America and JP Morgan/Chase announced on Monday, October 15, plans for a super fund to buy mortgage-linked securities in an attempt to allay fears of a downward price-spiral that would hit the balance sheets of big banks. US banks collectively would put up credit guarantees up to $100 billion for the fund, named the Single-Master Liquidity Enhancement Conduit (SMLEC).

The concept of an SMLEC first emerged three weeks earlier when the US Treasury summoned leading bankers to discuss ways to revive the mortgage-linked securities market and to deal with the threat to the credit market posed by structured investment vehicles (SIVs) and conduits. The Treasury said it acted as a "neutral third party" in the discussions, but Henry Paulson, Treasury secretary, was reportedly strongly in support of the initiative.

Robert Steel, under-secretary for domestic finance, led the US Treasury side of the discussions, with the day-to-day work handled by Anthony Ryan, assistant secretary. The plan is an attempt to address concerns about SIVs and conduits, vehicles that are off-balance sheet but closely affiliated to banks.

Fears emerged that some SIVs might be pushed into forced sales of assets, prompting further declines in the market price of mortgage-linked securities as a class that could hurt the balance sheets of all lending institutions. SMLEC, designed as a superfund to preserve the theoretical value of the high-rated tranches by creating a ready buyer for them, is likely to be unpopular with some banks and non-bank institutions which have already started trading in distressed low-rated subprime securities at knockdown prices.

SMLEC as proposed is intended as a restructuring vehicle, repackaging credit securities to make them more transparent than existing SIV commercial paper and less risky to investors. It would only deal in "highly-rated" assets. Although it is envisaged that the scheme will initially focus on vehicles in the dollar market held by US banks, it is expected to extend to non-US banks as well, and may even be extended to the euro market. The US Treasury declined to provide official comment on the reported proposal.

In October, Citigroup Inc. posted a 57% slump in third-quarter net income at $2.38 billion, or 47 cents a share, from $5.51 billion, or $1.10 a share, a year earlier. The latest quarterly results included $1.35 billion of pretax write-down in the value of loans that helped finance the leveraged-buyout boom and $1.56 billion of pretax losses tied to loans and sub-prime mortgages. A couple of weeks after the SMLEC proposal, Citigroup announced a write down of $3.3 billion which was later revised to $11 billion and that its Chairman resigned after an emergency board meeting on the first Saturday of November.

SMLEC is in essence a big bet that a consortium of banking giants, at the prodding of the US Treasury, can persuade investors to pour new money into the troubled credit market to buy the assets of troubled SIVs to prevent the pending loss faced by the sponsoring institutions.

Alan Greenspan, former Fed chairman, immediately raised serious doubts over SMLEC, warning that it could prevent the market from establishing true clearing prices for asset-backed securities. "It is not clear to me that the benefits exceed the risks," Greenspan told Emerging Markets , adding, "The experience I have had with that sort of intervention is very mixed." As the person most responsible for a macro liquidity boom that had prevented "the market from establishing true clearing prices for assets of all types", Greenspan is critical of the effort of the Treasury to do the same thing on a micro level to save the banking system.

Greenspan explained: "What creates strong markets is a belief in the investment community that everybody has been scared out of the market, pressed prices too low and there are wildly attractive bargaining prices out there." He added: "if you intervene in the system, the vultures stay away. The vultures are sometimes very useful." Goldman Sachs must have heard the message loud and clear and decided to act as its own home-grown vulture.

Greenspan's remarks came amid growing speculation on Wall Street that the current Federal Reserve sees potential benefits in the SMLEC proposal in terms of preventing a possible fire sale of assets, and does not think it has been designed to allow financial institutions to avoid recognizing losses. But the Fed is concern that the superfund plan could exacerbate growing investor anxiety, and thinks markets might normalize faster if at least some troubled SIV assets were sold in the market to allow prices to find a floor. Fed officials have been officially silent on the superfund plan, leading to the impression that the Fed wants to keep its distance. The Treasury regards the Fed's silence as simply reflecting the separation of powers and responsibilities between the institutions. In reality, the Treasury leads the Fed on issues of national economic security, notwithstanding the Fed's claim of independence.

Greenspan defended the 1998 Fed-sponsored rescue of Long-Term Capital Management (LTCM) by a group of creditor banks, saying it worked because it took a set of assets that would otherwise have been dumped at fire-sale prices off the market, allowing prices of the remaining assets to find a true equilibrium. But he said today "we are dealing with a much larger market." To those who still have reliable memory, the justification for the Fed managed rescue of LTCM was to prevent the total collapse of the financial market because of the dominant size and high leverage of LTCM. Other distressed hedge funds would also have survived with a Fed managed bailout, but they did not qualify as being "too big to fail".

Frederic Mishkin, a Federal Reserve governor, admitted to the Financial Times that although the central bank could use monetary policy to offset the macroeconomic risk arising from the credit squeeze, it was "powerless" to deal with "valuation risk" – the difficulty assessing the value of complex or opaque securities.

Robert J Shiller, Yale economist of " Irrational Exuberance " fame (2000), writing in the October 14 edition of the New York Times: Sniffles That Precede a Recession : "While it may seem as though these private banks could have met by themselves and agreed to create a fund without pressure from Treasury to do so, apparently there are times when the private sector cannot take care of itself and it needs the government to intervene and prod it in the right direction, at least that appears to be the attitude at Treasury (and I wonder if there will be government guarantees of any sort as part of the bargain, a situation that rules out the private sector doing it on its own, but also a situation that more explicitly recognizes the existence of market failure and the need for government intervention to overcome it). It would be refreshing to see this same attitude extended by the administration to other markets that cannot coordinate properly or that suffer from significant market failures of other types, markets that produce outcomes where, say, children are left without health coverage. But don't get your hopes up."

Warren Buffett, the Pied Piper of other awed investors, told Fox Business Network that "pooling a bunch of mortgages, changing the ownership" would not change the viability of the mortgage instrument itself. "It would be better to have them on the balance sheets so everyone would know what's going on." Bill Gross, chief investment officer of Pimco, the giant bond fund manager, called the superfund idea "pretty lame". Investors need to know what their portfolio is really worth at any moment in time, not merely constructed value if conditions should hold.

Next: The Commercial Paper Market and SIVs

[Jul 03, 2018] When you see some really successful financial speculator like Soros or (or much smaller scale) Browder , search for links with intelligence services to explain the success or at least a part of it related to xUSSR space , LA and similar regions

Highly recommended!
Jul 03, 2018 | www.moonofalabama.org

Recently came across the following article written by F. William Engdahl in 1996 which might be of interest to some here:

The secret financial network behind "wizard" George Soros

The last page of the above article can be found here:

Soros's looting of Ibero-America

Posted by: integer | Jul 2, 2018 4:49:45 AM | 35

[Jun 27, 2018] Immigration Western Wars and Imperial Exploitation Uproot Millions by James Petras

Jun 26, 2018 | www.unz.com

"Immigration" has become the dominant issue dividing Europe and the US, yet the most important matter which is driving millions to emigrate is overlooked is wars.

In this paper we will discuss the reasons behind the massification of immigration, focusing on several issues, namely (1) imperial wars (2) multi-national corporate expansion (3) the decline of the anti-war movements in the US and Western Europe (4) the weakness of the trade union and solidarity movements.

We will proceed by identifying the major countries affected by US and EU wars leading to massive immigration, and then turn to the western powers forcing refugees to 'follow' the flows of profits.

Imperial Wars and Mass Immigration

The US invasions and wars in Afghanistan and Iraq uprooted several million people, destroying their lives, families, livelihood, housing and communities and undermining there security.

As a result, most victims faced the choice of resistance or flight. Millions chose to flee to the West since the NATO countries would not bomb their residence in the US or Europe.

Others who fled to neighboring countries in the Middle East or Latin America were persecuted, or resided in countries too poor to offer them employment or opportunities for a livelihood.

Some Afghans fled to Pakistan or the Middle East but discovered that these regions were also subject to armed attacks from the West.

Iraqis were devastated by the western sanctions, invasion and occupation and fled to Europe and to a lesser degree the US , the Gulf states and Iran.

Libya prior to the US-EU invasion was a 'receiver' country accepting and employing millions of Africans, providing them with citizenship and a decent livelihood. After the US-EU air and sea attack and arming and financing of terrorist gangs, hundreds of thousands of Sub-Sahara immigrants were forced to flee to Europe. Most crossed the Mediterranean Sea to the west via Italy, Spain, and headed toward the affluent European countries which had savaged their lives in Libya.

The US-EU financed and armed client terrorist armies which assault the Syrian government and forced millions of Syrians to flee across the border to Lebanon,Turkey and beyond to Europe, causing the so-called 'immigration crises' and the rise of rightwing anti-immigrant parties. This led to divisions within the established social democratic and conservative parties,as sectors of the working class turned anti-immigrant.

Europe is reaping the consequences of its alliance with US militarized imperialism whereby the US uproots millions of people and the EU spends billions of euros to cover the cost of immigrants fleeing the western wars.

Most of the immigrants' welfare payments fall far short of the losses incurred in their homeland. Their jobs homes, schools, and civic associations in the EU and US are far less valuable and accommodating then what they possessed in their original communities.

Economic Imperialism and Immigration: Latin America

US wars, military intervention and economic exploitation has forced millions of Latin Americans to immigrate to the US.. Nicaragua, El Salvador, Guatemala and Honduras engaged in popular struggle for socio-economic justice and political democracy between 1960 – 2000. On the verge of victory over the landed oligarchs and multinational corporations, Washington blocked popular insurgents by spending billions of dollars, arming, training, advising the military and paramilitary forces. Land reform was aborted; trade unionists were forced into exile and thousands of peasants fled the marauding terror campaigns.

The US-backed oligarchic regimes forced millions of displaced and uprooted pr unemployed and landless workers to flee to the US.

US supported coups and dictators resulted in 50,000 in Nicaragua, 80,000 in El Salvador and 200,000 in Guatemala. President Obama and Hillary Clinton supported a military coup in Honduras which overthrew Liberal President Zelaya -- which led to the killing and wounding of thousands of peasant activists and human rights workers, and the return of death squads, resulting in a new wave of immigrants to the US.

The US promoted free trade agreement (NAFTA) drove hundreds of thousands of Mexican farmers into bankruptcy and into low wage maquiladoras; others were recruited by drug cartels; but the largest group was forced to immigrate across the Rio Grande. The US 'Plan Colombia' launched by President Clinton established seven US military bases in Colombia and provided 1 billion dollars in military aid between 2001 – 2010. Plan Colombia doubled the size of the military.

The US backed President Alvaro Uribe, resulting in the assassination of over 200,000 peasants, trade union activists and human rights workers by Uribe directed narco-death squad.Over two million farmers fled the countryside and immigrated to the cities or across the border.

US business secured hundreds of thousands of Latin American low wages, agricultural and factory workers almost all without health insurance or benefits – though they paid taxes.

Immigration doubled profits, undermined collective bargains and lowered US wages. Unscrupulous US 'entrepreneurs' recruited immigrants into drugs, prostitution, the arms trade and money laundering.

Politicians exploited the immigration issue for political gain – blaming the immigrants for the decline of working class living standards distracting attention from the real source : wars, invasions, death squads and economic pillage.

Conclusion

Having destroyed the lives of working people overseas and overthrown progressive leaders like Libyan President Gadhafi and Honduran President Zelaya, millions were forced to become immigrants.

Iraq, Afghanistan, Syria, Colombia, Mexico witnessed the flight of millions of immigrants -- all victims of US and EU wars. Washington and Brussels blamed the victims and accused the immigrants of illegality and criminal conduct.

The West debates expulsion, arrest and jail instead of reparations for crimes against humanity and violations of international law.

To restrain immigration the first step is to end imperial wars, withdraw troops,and to cease financing paramilitary and client terrorists.

ORDER IT NOW

Secondly, the West should establish a long term multi-billion-dollar fund for reconstruction and recovery of the economies, markets and infrastructure they bombed The demise of the peace movement allowed the US and EU to launch and prolong serial wars which led to massive immigration – the so-called refugee crises and the flight to Europe. There is a direct connection between the conversion of the liberal and social democrats to war -parties and the forced flight of immigrants to the EU.

The decline of the trade unions and worse, their loss of militancy has led to the loss of solidarity with people living in the midst of imperial wars. Many workers in the imperialist countries have directed their ire to those 'below' – the immigrants – rather than to the imperialists who directed the wars which created the immigration problem. Immigration, war , the demise of the peace and workers movements, and left parties has led to the rise of the militarists, and neo-liberals who have taken power throughout the West. Their anti-immigrant politics, however, has provoked new contradictions within regimes,between business elites and among popular movements in the EU and the US. The elite and popular struggles can go in at least two directions – toward fascism or radical social democracy.

[Jun 19, 2018] Counterdrug Programs Come With Increased Drug Production - Where Does The Money Go

Notable quotes:
"... Here's a thought: If the USG was truly interested in controlling opium production in Afghanistan it would simply use the counternarcotics money to buy up the crop directly from the farmers. The price at that level would be incredibly cheap compared to the "street value" of the drug. The farmers would happily sell to such a reliable buyer and not need to fear the risk of military interference. The current Afghan government would likely earn the goodwill of the farmers and it would cut off funding to the Taliban. It will never happen, however; because our military project in Afghanistan is mostly about enriching private military contractors while keeping the the "threat" of terrorism alive and well. War is a racket. ..."
"... b, have you read "Whiteout" by Alexander Cockburn (RIP) and Jeffrey St. Clair? It was written decades ago but is still relevant. I'm sure the CIA DOES make money from drugs although the CIA black books budget is so large they hardly need the cash. But one imagines it's nice to have a few millions completely out of government accountability--for lining their own pockets if nothing else. ..."
"... I highly recommend Doug Valentine's book, "CIA as Organized Crime." CIA Director William Colby gave him free access to interview CIA officials who had been involved in the Phoenix program in South Vietnam. Since all those CIA officers/agents had Colby's blessing, they assumed Valentine was on their side. Oops! Bottom line: There is ZERO difference between CIA and the Mafia. They are essentially one and the same, though they generally have different spheres of action. One upon which they overlap is drug production, smuggling and distribution. ..."
"... I would add that there is ZERO difference between supra-national finance and the Mafia. For instance, the bank, HSBC was founded to launder opium money after Great Britain fought the Opium Wars forcing China to permit them to import opium into China. Former FBI Director and on again/off again hero of the partisans, James Comey left his career with the US Government to work for HSBC after they were finally fined for laundering cash from both drug smuggling and terrorist groups. His job was to help them "negotiate" the new "oversight" placed on the bank. ..."
"... John Ehrlichman, who served as President Richard Nixon's domestic policy chief admitted back in 1994 that the "War on Drugs" was actually a political tool to crush leftist protesters and black people. "We knew we couldn't make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did." ..."
"... Mike Ruppert was an associate of Gary Webb's, was a Los Angeles detective and knew a lot about the CIA's involvement in the Crips/Bloods Drug Wars and its massive importation of drugs into the nation. His investigation was used as his website URL , copvcia, although its name was From The Wilderness. Until 911, his investigation was his passion, then he discovered he had another and it was connected to the former. Here's a page many will want to view . It's hard not to reread the entire website. Unfortunately, Mike saved and only released much of the juicier evidence to his subscribers--he had to eke out a living in some manner. ..."
"... Back in 2002, when the poppy production too off, the idea of flooding Russia was in vogue, it may still be in the game. Transit through Iran to Turkey was also in play. Money laundering started out in "Polish Zlotys", through the banks there. ..."
"... I presume much of that counternarcotics money ends up being cash in hand to thousands of foot-soldiers working for local warlords in Afghanistan as farmers, security personnel, soldiers, prostitutes and what-not, in a way similar to how part of Victoria Nuland's $5 billion investment in Ukraine ended up as cash incentives to entice people from as far as Lvov to travel to Kiev to participate in the Maidan demonstrations over the winter of 2013 / 2014. ..."
"... This in addition to the billions being used to buy weapons, train and send jihadists to fight in other parts of western and central Asia, and line people's pockets at every stage of the drug money trail whether in Afghanistan, Wall Street or various tax havens around the planet. ..."
"... And to the east, I remember reading that one of the first things the US did was to build a bridge and highway towards the east; shortly thereafter, heroin flooded into Russia. ..."
"... Alfred W. McCoy is the authority on drugs and CIA. He's still doing great work, publishing books.His first, The Politics of Heroin in Southeast Asia is a classic.His latest, In the Shadows of the American Century, is brilliant analysis. Some videos on youtube, also. He has traveled, researched every ratline trail and outpost all over the globe. Read him if you want the real facts. ..."
Jun 19, 2018 | www.moonofalabama.org

james , Jun 18, 2018 1:30:38 PM | 2

thanks b... the speculation has always been in my mind anyway - that the money is controlled by the cia... covert money for covert projects and on and on it goes...
LXV , Jun 18, 2018 1:47:36 PM | 3
b wrote: "I am not aware of any sound evidence that shows that the CIA reaped financial profits from drug dealing."

Define 'sound evidence, b... For some, it's a kilo of stash; for others (like myself), it's suffice with the testimony of (suicided) insiders, like Gary Webb (RIP).

ben , Jun 18, 2018 2:06:01 PM | 4
james @ 2 said:" covert money for covert projects and on and on it goes..."

Yes, and what they don't spend on "projects", goes to their minions and sycophants..

ken , Jun 18, 2018 2:16:06 PM | 5
The Taliban curtailed the poppy growing without any problem. Shortly after the US invasion under the guise of capturing OBL. Almost 18 years later, long after the death of OBL (in reality and in US military BS) the poppy production has increased exponentially. There are Pics of US military personnel walking through poppy fields.
Other than drug production there is no need for the US to be in Afghanistan except maybe to use it as a launching platform to attack Iran. Drugs are an excellent source for funding black ops.

Not only is the US allowing the production, considering how easy it would be for them to kill the crops, and IMHO it as also assisting in the transportation of drugs to the West.

librul , Jun 18, 2018 3:16:16 PM | 11

b says the efforts appear counterproductive. Here is why:

https://www.rollingstone.com/politics/news/afghanistan-the-making-of-a-narco-state-20141204#

If you understand the Afghan government as a narco state, then the fact that opium production has actually increased –while the U.S. spent billions on counternarcotics efforts and troop numbers surged – starts to make sense. A completely failed state – Afghanistan in 2001 – can't really thrive in the drug trade. Traffickers have no reason to pay off a toothless government or a nonexistent police force. In such a libertarian paradise, freelance actors – like Saleem, the heroin cook – flourish.

But as the government builds capacity, officials can start to demand a cut. It's not that there's a grand conspiracy at the center of government, but rather that, in the absence of accountability and the rule of law, officials start to orient themselves around a powerful political economy. Big drug barons with links to the government take over the trade. People who don't pay, or who fall out with government officials, might find themselves killed or arrested.

In this light, U.S. counternarcotics programs, which have cost nearly $8 billion to date, and the Afghan state-building project in general, are perversely part of the explanation for the growing government involvement in the drug trade. Even the newly rebuilt Afghan Air Force has been investigated by the U.S. military for alleged trafficking. In many places, the surge had the effect of wresting opium revenue from the Taliban and handing it to government officials. For example, in Helmand's Garmsir District, which sits on key trafficking routes between the rest of the province and Baramcha, a big Marine offensive in 2011 finally pushed out the Taliban and handed the district back to the Afghan government. The result? The police began taking a cut from those drug routes. "There are families, as in Mafia-style, that have the trade carved up between them, and when some outsider tries to get in on it, they serve him up as a success for drug interdiction," one Western official who worked in Garmsir told me.

I just luv-ed this next paragraph. Glad I wasn't sipping Coca Cola
while I read it. Would have chortled cola out my nose!

Here is government BS-speak at it's vacuous best (enjoy):

The U.S. government, for its part, acknowledged that there are no quick solutions at hand. "The U.S. interagency is developing an updated counternarcotics strategy for Afghanistan," says Jen Psaki, the State Department's spokeswoman. "These are long-term efforts that build the foundation for eventual reductions in opium harvests."
Chris G , Jun 18, 2018 4:04:03 PM | 14
Here's a thought: If the USG was truly interested in controlling opium production in Afghanistan it would simply use the counternarcotics money to buy up the crop directly from the farmers. The price at that level would be incredibly cheap compared to the "street value" of the drug. The farmers would happily sell to such a reliable buyer and not need to fear the risk of military interference. The current Afghan government would likely earn the goodwill of the farmers and it would cut off funding to the Taliban. It will never happen, however; because our military project in Afghanistan is mostly about enriching private military contractors while keeping the the "threat" of terrorism alive and well. War is a racket.
WorldBLee , Jun 18, 2018 4:08:12 PM | 15
b, have you read "Whiteout" by Alexander Cockburn (RIP) and Jeffrey St. Clair? It was written decades ago but is still relevant. I'm sure the CIA DOES make money from drugs although the CIA black books budget is so large they hardly need the cash. But one imagines it's nice to have a few millions completely out of government accountability--for lining their own pockets if nothing else.
Daniel , Jun 18, 2018 4:32:10 PM | 17
I highly recommend Doug Valentine's book, "CIA as Organized Crime." CIA Director William Colby gave him free access to interview CIA officials who had been involved in the Phoenix program in South Vietnam. Since all those CIA officers/agents had Colby's blessing, they assumed Valentine was on their side. Oops! Bottom line: There is ZERO difference between CIA and the Mafia. They are essentially one and the same, though they generally have different spheres of action. One upon which they overlap is drug production, smuggling and distribution.

I would add that there is ZERO difference between supra-national finance and the Mafia. For instance, the bank, HSBC was founded to launder opium money after Great Britain fought the Opium Wars forcing China to permit them to import opium into China. Former FBI Director and on again/off again hero of the partisans, James Comey left his career with the US Government to work for HSBC after they were finally fined for laundering cash from both drug smuggling and terrorist groups. His job was to help them "negotiate" the new "oversight" placed on the bank.

Daniel , Jun 18, 2018 4:37:37 PM | 18
John Ehrlichman, who served as President Richard Nixon's domestic policy chief admitted back in 1994 that the "War on Drugs" was actually a political tool to crush leftist protesters and black people. "We knew we couldn't make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did."
karlof1 , Jun 18, 2018 5:29:48 PM | 20
Mike Ruppert was an associate of Gary Webb's, was a Los Angeles detective and knew a lot about the CIA's involvement in the Crips/Bloods Drug Wars and its massive importation of drugs into the nation. His investigation was used as his website URL , copvcia, although its name was From The Wilderness. Until 911, his investigation was his passion, then he discovered he had another and it was connected to the former. Here's a page many will want to view . It's hard not to reread the entire website. Unfortunately, Mike saved and only released much of the juicier evidence to his subscribers--he had to eke out a living in some manner.

The CIA is the planet's #1 Terrorist Organization, and it has all 3 types of Weapons of Mass Destruction. It's often hard to determine which poses a greater threat to humanity: The CIA or its parent the Outlaw US Empire. If humanity's to have any chance at a viable future, both the CIA and its Imperial parent must be destroyed for their many crimes.

Ornot , Jun 18, 2018 5:49:10 PM | 21
Seymore Hersh first (to my knowledge) first looked at CIA drug links when people exited buildings not using the stairs.
https://www.nytimes.com/1975/07/10/archives/family-plans-to-sue-cia-over-suicide-in-drug-test-family-planning.html

That CIA was experimenting with narcotics as a tool seemed to have metasticised into something else during the Air America years, which in turn seems to have morphed via Barry Seal (& Gary Webb's investigation)and the Cocaine Coyboys onward into Silk Airways (famed by weapons to Syria scandal) -
https://archive.nytimes.com/www.nytimes.com/books/first/c/cockburn-white.html

https://www.globalresearch.ca/oliver-north-worked-with-cocaine-traffickers-to-arm-terrorists-now-hell-be-president-of-the-national-rifle-association-nra/5640431
Whatever the post WWII period there seems to be a airline moving illicit product(s) across borders and a rouge militia force hook up. While powder is not as convertable as say Bitcoin, it leaves no paper trail.

Good luck with the research - its a long dark deep rabbit hole, leading to many fingers in many pies.

https://nsarchive2.gwu.edu/NSAEBB/NSAEBB2/
https://www.minnpost.com/eric-black-ink/2009/03/investigative-reporter-seymour-hersh-describes-executive-assassination-ring

Eugene , Jun 18, 2018 6:36:02 PM | 23
Back in 2002, when the poppy production too off, the idea of flooding Russia was in vogue, it may still be in the game. Transit through Iran to Turkey was also in play. Money laundering started out in "Polish Zlotys", through the banks there.

Addicts were given small sums to deposit in the banks, by the thousands, which didn't draw attention. A lot of the money was sent to the U.S. to buy "American Muscle Cars", which were then shipped back to the E.U. and resold again.

Pakistan was also a transit country where the "Labs" were first set up to process the opium to heroin. How time fly's when having fun. Addiction to "drugs" isn't the only addiction nor the addicts involved either. Only one leaf in the book of the minds of those who believe they are doing the right thing.

Jen , Jun 18, 2018 6:54:58 PM | 26
I presume much of that counternarcotics money ends up being cash in hand to thousands of foot-soldiers working for local warlords in Afghanistan as farmers, security personnel, soldiers, prostitutes and what-not, in a way similar to how part of Victoria Nuland's $5 billion investment in Ukraine ended up as cash incentives to entice people from as far as Lvov to travel to Kiev to participate in the Maidan demonstrations over the winter of 2013 / 2014.

Also a big portion of the counternarcotics dosh must be going to teams of people digging up and burning opium and also to teams of people planting new opium seeds in the areas where the first lot of opium was eradicated later on. Similar to stories people used to hear about what supposedly happened during the 1930s Great Depression, when teams of people were employed to dig ditches and then other teams of people were employed to fill up the ditches which would be dug up again at a later time.

This in addition to the billions being used to buy weapons, train and send jihadists to fight in other parts of western and central Asia, and line people's pockets at every stage of the drug money trail whether in Afghanistan, Wall Street or various tax havens around the planet.

frances , Jun 18, 2018 7:06:21 PM | 28
reply to:
".. and IMHO it as also assisting in the transportation of drugs to the West."
Posted by: ken | Jun 18, 2018 2:16:06 PM | 5

And to the east, I remember reading that one of the first things the US did was to build a bridge and highway towards the east; shortly thereafter, heroin flooded into Russia.

oldenyoung , Jun 18, 2018 7:08:31 PM | 29
The level of US "counter-narcotic" investment seems to be about right to support the GROWTH of the narcotics industry...not the otherway around...its black and its dirty

regards

OY

Mark2 , Jun 18, 2018 7:14:33 PM | 30
Every comment on this post is like a fine champagne of reality. how do people get by with out wanting to know the truth. keep the comments coming I need more! Brilliant links. The doors of perception just opened for me. Who the hell runs our TVs stations that they can turn a blind I to this lot.
-------
I to find great strength in music, to find the truth. For me it is reggae any group in society that has sufferd what we discuss on this site for 300 years, but have survived got stronger and put it to music, I feel needs listening to!!!
Daniel Bruno , Jun 18, 2018 7:51:32 PM | 32
The "War on Drugs" was conceived to put black people in jail en masse as Jim Crow came to an end. Nixon's aides admitted this. Read "The New Jim Crow" for the full story. Marijuana laws were first introduced in the early 20th century as a tool to arrest and deport Mexicans from the American southwest. Google it.

The bullshit "War on Drugs" is as phony as the bullshit "War on Terror" in the wake of 3 skyscrapers that were demolished and collapsed at freefall speed.

The real money is to be made in the bullshit wars spawned by these 2 hoaxes that boggle the mind in their scope.

Basically, these two cornerstones of American domestic and foreign policy are frauds of biblical proportions.

An empire built on these foundations will come crashing down as fast as WTC 7 on the afternoon of September 11, 2001.

0use4msm , Jun 18, 2018 8:35:04 PM | 33
"O my, cocaine" is an anagram of "CIA economy".

Various Contra-cocaine type operations of un/controlled shipments of drugs existed in the early 1990s, some of which existed in order to arm Bosnia (local fighters and foreign mujahideen), thereby undermining the UN's arms embargo of former Yugoslav states.

Between 1988 and 1992, 22 tons of cocaine was brought into the US via Venezuela by a team consisting of Mark McFarlin (head of the CIA's counter-narcotics center), Jim Campbell (the CIA's chief of station in Venezuela) and General Guillén (head of the Venezuelan National Guard in the pre-Chavez era).
Anti-Drug Unit of C.I.A. Sent Ton of Cocaine to U.S. in 1990

At roughly the same time Albanian mobsters had built a heroin smuggling network for the purpose of illegally supplying arms to the Bosnian mujahideen.
Drugs Paying for Conflict in Europe

In the summer of 1991, Dutch drug lord Klaas Bruinsma, who had connections with members of the Dutch elite (corporate and royal), the Colombian Cali cartel and the Yugoslav mafia, was assassinated by either former cop Martin Hoogland (possibly working for intelligence), or the Yugoslav mobster Branco Marianovic. In that same summer, the UN Security Council passed Resolution 713 (the Yugoslav arms embargo), and soon after elements within Dutch customs and police, in cooperation with Bruinsma's business heirs/infiltrators, started the controlled shipment of large amounts of cocaine (estimated 25,000 kilo) and hashish (estimated 500,000 kilo) under the name "Operation Delta". The customs officials involved in Operation Delta were most likely protected by their boss Fred Teeven, later rewarded by given the job of State Secretary for Security and Justice. Mabel Wisse-Smit, daughter of a top banker (possibly drug money launderer) and future sister-in-law of the current Dutch king, was first the lover of drug lord Bruinsma (until his assassination, possibly she was sent to spy on him) and then the lover of Wall St. banker Mohamed Sacirbey (Bosnia's ambassador to UN in 1992, Bosnia's foreign minister in 1995). Wisse-Smit (later a George Soros protégé) co-founded the Dutch charity foundation War Child, which was used as a cover for arms lobbying during the Bosnia war, and she is reported by Bosnian media to have been involved in a specific arms deal with Egypt.

Red Ryder , Jun 18, 2018 8:41:17 PM | 34
Alfred W. McCoy is the authority on drugs and CIA. He's still doing great work, publishing books.His first, The Politics of Heroin in Southeast Asia is a classic.His latest, In the Shadows of the American Century, is brilliant analysis. Some videos on youtube, also. He has traveled, researched every ratline trail and outpost all over the globe. Read him if you want the real facts.
Curtis , Jun 18, 2018 9:44:25 PM | 36
It's good to know so many are well informed on this. I've read Rupert/Webb's stuff and have Dark Alliance. There's a good movie/documentary out there about Webb but I can't recall the name right now. Levine wrote about his undercover work in South American being thwarted by the CIA. And Bo Gritz was trying to set up a deal where the US would buy up Khun Sa's opium before it could be distributed but the USG wasn't interested. The amazing thing about the Afghan ramp up in supply was seeing pictures of US soldiers patrolling in the middle of poppy fields. Meanwhile at home, congress takes bribes (lobbying efforts) to help protect the legal drug pushers from prosecution by the DEA shoving millions of pills across the country. A friend's term for this kind of thing is "racket science."
Lozion , Jun 18, 2018 9:56:06 PM | 37
@36 "Kill the messenger" with Jeremy Renner..
Pft , Jun 18, 2018 9:59:20 PM | 38
Red Ryder@34

Yeah, his updated edition is a must read. They do not handle the money directly, they let the guerillas/rebels/revolutionaries handle that as a reward and provide protection from legal authorities and access to markets using various agencies and mafia at both ends of the supply-distribution chain. The dollars from the drugs pay for the weapons and support. The profits go into nameless offshore Eurodollar accounts which then flow into London and Wall Street as eurodollar loans in many multiples of the deposits (not to be confused with the euro) to speculate in various markets and drive up asset prices. When the Taliban shut down opium production we had the Dot.com crash (coincidence?). 100 billion a year can generate 1 trillion in dollars for speculators, and that was sorely missed (along with Clinton running a surplus instead of a deficit)

There is so much evidence that in many places where they were or are engaged that drug flows in the region increased and production increased in those areas known for growing the stuff. Like any organization only those with a need to know have an idea and the majority are clean and without information

psychohistorian , Jun 18, 2018 10:11:18 PM | 39
While we are discussing history of the War on Drugs another example of a major consumer organization (at the time of print) being turned into a vacuous shell....

Licit and Illicit Drugs is a 1972 book on recreational drug use by medical writer Edward M. Brecher and the editors of Consumer Reports.

The WIkipedia summary
"
The book describes the effects and risks of psychoactive drugs which were common in contemporary use for recreational and nonmedical purposes.[2] The New York Times paraphrased some major arguments from the book, saying "'Drug-free' treatment of heroin addiction almost never works", "Nicotine can be as tough to beat as heroin", and "Good or bad, marijuana is here to stay. The billions spent to fight it are wasted dollars."[3] The book identifies marijuana as the most popular drug after tobacco, alcohol, and nicotine.[4] A reviewer for the Journal of the American Medical Association summarized it by saying that "Brecher holds that the division of drugs into licit and illicit categories is medically irrational and rooted mainly in historical and sociological factors."[5]
"

Daniel , Jun 18, 2018 10:52:53 PM | 40
karlof1. Amazing that you knew Mike. And yes, the willful ignorance is horribly frustrating.

The way I see it, almost all "Westerners" are willfully ignorant. We all must know that the only way we live to the "standards" we do is because of the plunder of both our colonial past and neoliberal present. But most choose to look aside.

For those who haven't seen it, please spend 17 minutes to see Mallence Bart-Williams give an incredible talk.

Alogon , Jun 19, 2018 12:58:19 AM | 41
I have nothing to add to this except to say great article b and excellent comments from posters.

[Jun 13, 2018] The Roots of Argentina's Surprise Crisis

The root is neoliberal government that came to power in 2015
Notable quotes: