Excerpted from Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil by Michael C. Ruppert, scheduled for release
in the late spring of 2003.
Fascism
should more properly be called corporatism,
since it is the merger of state and corporate power. -
Benito Mussolini
----------
If you understand nothing else about
the map that I have been trying to draw for you, understand
that the post 9-11 erosion of civil liberties and the
economic devastation that is being felt here at home
- in the land of The Chosen People - are opposite sides
of the same coin. One begets and demands the other,
whether the Empire consciously considers it or not.
And the currents of behavior depicted on the map dictate,
as surely as gravity pulls things down and not up,
that what has already started can only get worse. This
is both the good news and the bad news. For years many
already aware Americans have complained about the complacency
of the general population in this country, seeing it
as the single biggest obstacle to meaningful change.
In the metaphor I used earlier in the book about a
ham and eggs breakfast, the American people were playing
the role of the chicken rather than the pig. - Mike Ruppert
The role has changed and the obstacle
is being removed...
----------
HOMELAND (IN)SECURITY
...And then we have the advent of the
Department of Homeland Security (DHS) which came into
being in January of 2003 and became fully operational
in March. The best way to understand the Homeland Security
Act is to think of it as the vehicle which will be driven
on the road to complete totalitarianism. When overt or
covert operations are carried out, cars need to be rented,
motel rooms need to get paid for, staff has to be funded.
Telephone numbers and data bases need to be created.
Airplanes need to be chartered or scheduled.
Homeland Security is, at least in part,
the vehicle by which the Patriot Act is brought to life.
It has combined 22 different components of the U.S. government
into a complete unified command structure. It has given
the President absolute authority to give it orders (through
the Secretary). It has removed many of the labor protections
of employees who are now much more closely related to
members of the Armed Forces than they understand - "property
of the U.S. government". And it has made sure that
no dissenting voices can arise by removing dialogue between
differing cabinet departments over varying priorities.
And it has done much more than that. For
within its pages and hidden behind its mission, stated
in Title I, "to prevent terrorist attacks within
the United States, reduce the vulnerability of the United
States to terrorism and minimize the damage from...attacks
that do occur" are some very insidious provisions.
These provisions attack both your rights and your pocketbook
with equal vigor.
Employees of the DHS will be enforcers.
They will carry weapons and they will also enforce drug
laws.1 They will take control of and coordinate all communications,
including radio, teletype and telephone communications
at state and local levels to maximize efficiency, and
they will coordinate federal grants and provide equipment
to upgrade all state and local radio and closed "intranet" systems
which means that they will both control and monitor all
state and local emergency communications.2 And they will
also set up secure communications for private industry
(the corporations who will be selling the equipment),
the banking industry and all other corporations deemed
to be "critical infrastructure.3
The DHS will collect and share intelligence
vital for its primary mission which is the protection
of critical infrastructure. In the process of doing this,
it will access the intelligence of state and local agencies
and "coordinate" the dissemination of that
information.4 This means that local police agencies,
if they want to continue receiving federal subsidies
and don't want to look as though they aren't concerned
about their citizens, will effectively become intelligence
gathering units for the federal government. In addition
the DHS Secretary and his employees are also given total
access to all information in any federal agency, whether
verified or not on a level of priority equal with the
President and the Director of Central Intelligence.5
It will also have complete access to all banking and
stock transaction records and may share that information
as it sees fit.6
In fulfilling its mandate to enhance cyber
security the DHS will be given access to all state and
local databases and programs and "upon request" to
privately owned data bases (e.g. your HMO records) to
make sure that each system's vulnerabilities have been
analyzed and that the "proper technical assistance" has
been rendered to upgrade each system as needed.7 This
is where TIA and the PROMIS back door get introduced.
Even if Congressional attempts to suspend funding for
the Total Information Awareness (TIA) program are successful,
the program will still be in place and operating "off
the books" using either funds obtained from the
drug trade or stolen from the U.S. Treasury (see below).
The government doesn't give up such power easily.
Kissinger PROMIS and TIA - Not long after
Henry Kissinger withdrew his name as a candidate to head
the independent commission investigating 9/11 - ostensibly
because he didn't want to name his private clients -
journalist Jim Rarey ripped the covers off an unnoticed
bombshell in Kissinger's background. Henry Kissinger's
partner in one of his consulting firms (Kissinger-McLarty
Associates), and the Vice Chairman of Kissinger's other
firm (Kissinger & Associates) is former Clinton Chief
of Staff Mack McLarty. As it turns out McLarty
also sits on the board of directors of a company called
Acxiom.
That name might not ring a bell, but Acxiom
is a recent name change from a company formerly called
Alltel which was once known as Systematics. Systematics
is the information, communications, data processing firm
owned by Arkansas billionaire and kingmaker Jackson Stephens.
And Systematics has been part and parcel - linked in
paperwork and court records - of the PROMIS software
saga almost from day one. It was Systematics that reportedly
received stolen copies of the software in the 1980s.
If Inslaw founder Bill Hamilton ever had any doubt about
the fact that the progeny of his creation were at the
heart of TIA, he can lay it to rest now. In a December
17, 2002 story Rarey revealed that Acxiom had been selected "the
lead company to provide software and pull together the
network to furnish the information to DARPA's "Information
Awareness Office" headed by John Poindexter.8
DHS will also fund a massive science and
technological research branch that will develop new law
enforcement technologies and see that they are tested
and implemented at the state and local levels.9 It will
then certify and test the various pieces of equipment
and technology, and it will follow that no local agency
that does not use them can participate in DHS funding.10
This is a great guarantee of billions of dollars in income
for corporations that support the administration. The
DHS will even have a seal of approval! Then the DHS will
train and certify state and local agencies to make sure
that they know exactly what to do, especially when DHS
takes over in a major emergency. The DHS will also certify
training programs and be allowed to assume command and
control of local agencies, including medical facilities
in the event of an attack or even an "imminent" attack.11
Another great giveaway to pharmaceutical
companies comes at the very end of the Homeland Security
Act, where DHS is charged with maintaining a Strategic
National Stockpile of Smallpox Vaccine.12
By issuing security clearances to state
and local personnel after appropriate training and screening,
DHS will guarantee that only those personnel in local
agencies loyal to the federal agenda will be given access
to key information as DHS deems necessary.13 Following
on that, the DHS will have the authority to go into any
local agency and evaluate its methods for control of
sensitive and classified information and it will have
legal control of all such information in the hands of
local agencies including decision-making power as to
who sees it and who doesn't.14
Voila! All local law enforcement agencies
are now working for the federal government.
The DHS is also empowered to engage in
massive research programs on everything from DNA sequencing,
to chemical and biological warfare "countermeasures",
to biometric identification technology.15
The Act creating DHS has a particular
obsession with biological warfare (Biowar) and, in particular,
smallpox, which is the only disease specifically mentioned
throughout Title 3. And in a magnanimous gift to
vaccine makers it has made it a law that, in the event
of a declared emergency when millions might be ordered
to receive untested (for efficacy) and dangerous vaccinations,
the vaccine makers and those who administer the vaccinations
at government direction will be immune from lawsuits,
even if you drop dead or suffer permanent disability
as a result.16
And, in the event that the Secretary of
DHS declares a health emergency or "a potential
health emergency", certain provisions of U.S. public
health laws may be activated to not only compel vaccinations,
but to give the DHS the power to condemn and seize private
property without advance hearings or court procedures.
And during such emergencies the FBI and all other U.S.
government functions will report to the DHS Secretary
at all times.17
The Act also allows the DHS to go to universities
under government contract to make sure that their research
conforms with what the government wants and needs. The
DHS will also exercise security control over material
that is deemed sensitive. The DHS will have the ability
to suspend funding if the universities are not complying
with the government program.18
The DHS will have the authority and responsibility
to monitor livestock throughout the country and to either
quarantine or condemn livestock at will.19
DHS will assume control of all visa issuance
for those wishing to enter the United States and will
have personnel posted at U.S. embassies and consulates
all over the world.20
And although the Homeland Security Act
conveys a sense of Congress, that the Posse Comitatus
Act, which prohibits the military from being used in
domestic law enforcement operations, should be honored,
it ignores position papers originating from within the
military that the Posse Comitatus Act has already been
nullified by previous legislation, court decisions and
precedent. One such position paper, written in 2000,
even refers to Posse Comitatus as a "myth."21
YOUR MONEY AND YOUR RIGHTS!
Every American who reads this book
needs to understand that the process of rendering him
or her financially disabled is already well underway,
just as it was for the citizens of Russia long before
it hit them. The quote from Benito Mussolini at the beginning
of this chapter goes to the heart of the map and why
what you are about to learn is only the beginning. Of
course, with the reality of Peak Oil, financial disasters
are very easy to predict; fish in a barrel. But within
that global reality there will linger in the hearts and
minds of many Americans the belief that somehow the Great
Emperor will see to it that they are protected and have
more than anyone else as the world suffers. Nonsense!
This is one of the biggest lies which
this book must dispel once and for all. The truth is
that the abundance enjoyed by the American people for
two centuries must be utterly destroyed if the Empire
is to survive. Few will be prepared for how far that
destruction has already progressed and fewer still will
even think of preparing before the disaster arrives.
Before looking at how badly the Chosen
People have already been eaten, it is important to understand
an important dynamic driving globalized capitalism. That
is the fact that the current "operating system" has
evolved into one which makes its profits by killing things,
by removing people's liberties, and by lowering standards
of living for everyone except the elites. Simple
reason then dictates that whatever solutions the Empire
presents to Peak Oil and a failed economic system will
be destructive rather than constructive; that they will
create more, rather than less suffering. To think otherwise
would be to blithely assume that a rattlesnake might
somehow inject vitamins rather than venom.
There are currently 6.6 million people
in the United States either in jail, on probation or
on parole.22 Of those, as I have documented in previous
issues of From The Wilderness, more than two million are incarcerated, mostly in state
and federal penitentiaries. And of those two million
- half of which were added in the last ten years - more
than sixty per cent are nonviolent drug offenders.23
There has been a growing trend in corporate America to
employ many of these prisoners as virtual slave labor
for multi-national corporations. Inmate laborers now
do everything from processing your credit card statements
to making your airline reservations, to assembling your
tennis shoes and the circuit boards for your stereo.
And the Department of Justice operates something called
Federal Prison Industries, better known as Unicor, as
a profit-making venture to benefit American corporations.
Unicor runs more than 100 factories in prisons in at
least 30 states.24
According to Unicor's web site:
One example was its [UNICOR's] role as
a supplier to the military during the 1990-91 Persian
Gulf conflict. UNICOR provided Kevlar helmets, camouflage
battle uniforms, lighting systems, sandbags, blankets,
and night vision eyewear for the military to use during
Operation Desert Shield and Operation Desert Storm. It
even manufactured cables for chemical gas detection devices
and for the Patriot missile systems that played a key
role in defending Allied troops during the Persian Gulf
War. Brigadier General John Cusick, commanding officer
of the Defense Personnel Support Center, praised UNICOR
for the "superb support [it] provided to America's
Fighting Forces" and for helping ensure that "we
received the supplies the troops needed to win the war.25
About thirty per cent of the prisons in
this country are run by private corporations which trade
their stock based upon how many human beings they "house".
In pure economic terms, inmates have become inventory.
The two largest of these corporations are Wackenhut and
Corrections Corporation of America.
In recent years many law abiding Americans
have lost their jobs to prison industries which are able
to provide labor costs at a fraction of those in an uncorrupted
marketplace. This means that the corrupt economy makes
money by first selling drugs to people and then by putting
them in prison for using drugs.
Consider also that when Iraq released
its 12,000 page report on its Weapons of Mass Destruction
(WMD) programs, the U.S. government promptly censored
several thousand pages. Among the pages that it withheld
from public view in the U.S. were pages showing which
corporations had made billions of dollars in profits
during the 1980s and '90s by selling Iraq all of the
technology, equipment and weapons that it needed to become
the threat that the U.S. government insists it is today.
Those corporations include: Honeywell,
Spektra Physics, Semetex, TI Coating, UNISYS, Sperry
Corp., Tektronix, Rockwell, Leybold Vacuum Systems, Finnigan
-MAT-US, Hewlett Packard, Dupont, Eastman Kodak, American
Type Culture Collection (involved in bioweapons research),
Alcolac International, Consarc, International computer
Systems, Bechtel, EZ Logic Data Systems, Canberra Industries.
Many of these companies which operate overseas are subsidiaries
of larger corporations based in the U.S. And the Iraqi
government also received assistance from the Lawrence
Livermore Laboratories and the Sandia National Laboratory.26
We should not forget that Dick Cheney's
Halliburton made extensive sales to Saddam Hussein right
up until 9-11. And even on the brink of invasion, a year
and a half later, the United States is still purchasing
Iraqi oil on the open market.
So therefore, when examining the recent
pandemic of corporate fraud in America which, according
to a 2002 FOX News report, had wiped out $600 billion
in shareholder equity (mostly pension funds held in stocks),
one needs to ask just a couple more questions. Looking
at the list of corporations under investigation for cooking
their books* it is important to look at how much money
the top executives made through fraud. The Financial
Times published an
excellent series on this titled The Barons of Bankruptcy
under a broader compendium of reports titled Capitalism
in Crisis. That report disclosed that 61 executives made
an estimated $3.3 billion in insider stock trades before
the collapse of their respective companies.27
But these figures tell only a tiny part
of the story because they only describe a small fraction
of the share volume that was actually dumped after the
prices had been fraudulently inflated by these same executives.
For every CEO or CFO that sold shares, there were members
of the Boards of Directors, the audit committees and
the major shareholders who dumped tens and perhaps hundreds
of times as many shares. Their personal profits were
also that much greater.
And the big show made by the Bush administration
about corporate reform was just that - a show. Just one
day after the Corporate Reform Act was signed into law
by President Bush in late-July of 2002, he turned around
and gutted it by declaring a White House policy that
whistle-blowing protection would not apply to those who
exposed fraudulent practices unless and until the whistle
blowers were sworn in under oath at a Congressional hearing.
That means that the whistle blowers, the one group of
people essential to making the new law work, are defenseless.
They will have no protection when they go to the FBI,
the SEC, or even if they go to congressional staff outside
of a hearing.28
Few potential whistleblowers will ever
come forward if they understand that they will only be
protected for the last yard of a hundred yard dash under
fire.
The Julia Childs of Book Cooking
And the U.S. government is the champion
of book cooking in ways that make the corporate scandals
appear pedestrian. By sleight of hand in changing the
dates by which corporations had to pay quarterly income
taxes, it conjured up $33 billion in paper money needed
to finance the Bush tax cut. One news report quoted former
Minnesota congressman Bill Frenzel as saying, "If
you look at the books of the corporate world, even the
fraudulent ones, they are less subject to manipulation
than the federal budget is."29
We saw in Chapter Nine how Bush's budget
director Mitch Daniels refused to comply with a congressional
request to submit the government's books to the same
standards that corporations are now supposed to follow.
The Ostrich Economy
Only twice in its history has FTW issued an urgent economic bulletin,
warning our subscribers of pending economic crashes.
In both cases, our warnings were followed within days
by major events. Our first alert on September 9th 2001
was followed two days later by the World Trade Center
attacks. Our second alert in early July of 2002 was
followed only days later by a plunge in the Dow Jones
Industrial Average, lasting weeks, which took the index
down more than 1400 points.
Anyone who thinks that the market fundamentals
aren't just as bad as they were a year ago is delusional.
In fact, there are many signs showing that they are much
worse. One of the most cogent and penetrating columnists
of our day, Arianna Huffington, in May of 2002 warned
of a coming economic devastation and stated that the
signs of collapse were multiplying at an alarming rate:
"Here are a few of them: in the last
two years, 433 public companies - including Enron, Global
Crossing, and Kmart have declared bankruptcy. Two million
Americans have lost their jobs. Four trillion dollars
in market value has been lost on Wall Street. And each
day brings a fresh, stomach-turning revelation of the
rampant corruption infecting corporate America..."30
Huffington was warning about the dismal
failure of legislation that would have banned a non-transparent
form of accounting called "pro forma." The
big money in Congress had seen to it that the bill, sponsored
by Senator Paul Sarbanes (D - MD) died in committee.
To put it simply, what pro-forma accounting does, as
opposed to much stricter Generally Accepted Accounting
Principles (GAAP), is that it allows you to cheat, to
hide money, to hide debt and to cook the books. A recent
article in CFO Magazine revealed that 54% of 181 U.S. publicly traded corporations
responding to their survey used pro forma accounting
and that most CFO's felt some pressure to hide data and
that many felt pressure to resist change.31
It is a relatively safe assumption to
say that where there's pro forma accounting, there is
a choice of profit over truth-telling. A look at some
of the major corporations opting to use pro forma and
the media outlets they own says quite a bit about the
myth of a free press.
GENERAL ELECTRIC (NBC)
AOL/TIME-WARNER (CNN, Headline News,
TIME Magazine, PEOPLE, HBO)
MICROSOFT (MS-NBC, MSN)
VIACOM (CBS)
DISNEY (ABC)
IBM
INTEL
CISCO SYSTEMS
SUN MICRO
TRIBUNE Co. (The Los Angeles Times,
The Chicago Tribune)
THE WASHINGTON POST (The Washington
Post, NEWSWEEK)
THE NEW YORK TIMES...
Thus, almost all of the major media outlets
in the United States are vested in a system which makes
profits and competes by destroying things and hiding
the truth. A notable exception in this case is FOX
News. But FOX
News is owned by the Australian company NEWSCORP and it
does conform, at least in the most recent filing I could
find, to Australian GAAP. But they're not quite off the
hook. With Saudi Prince Alwaleed bin Talal as its second
largest shareholder, and with former Reagan political
strategist and Republican Party operative Roger Ailes
as the CEO of its news operations, FOX has plenty of
other questions to answer.
What's Already Been Stolen
In March of 2000 Department of Housing
and Urban Development (HUD) Inspector General Susan Gaffney
testified before the House Committee on government reform.
She answered questions about the fact that HUD had lost
$17 billion in 1998 and $59 billion in 1999. She could
not explain what had happened to the money and when she
was asked what HUD had done about the missing funds,
her basic explanation, made simple, was that HUD had
made an adjustment to its checkbook.32
In September of 1999, it was disclosed that the U.S. Navy had lost $3 billion
in equipment.33 Most of the equipment had probably been channeled to illegal
covert operations. Other losses that turned up soon after that are more difficult
to explain.
In August of 2001, INSIGHT Magazine's Kelly O'Meara disclosed that the Department of Defense
could not account for $1.1 trillion for Fiscal Year
2000. It had been stolen, or it was lost and nobody
knew where to find it - same thing.34
And then came the bombshell. On January
29, 2002 CBS News reported
that the Pentagon could not account for 25% of its funds
or more than $2.3 trillion. That amount, reported CBS, equaled $8,000 for every man, woman and child in
America. In dissecting the case of one missing
batch of money, CBS came
up with an explanation that was to fit all the rest of
the money. "We know they spent it but we don't know
what they spent it on."35
A skeptic will say, "How can the
Pentagon lose trillions of dollars? Its annual budget
is only $400 billion (larger than the next six nations
combined)." The answer is simple. The Pentagon manages
the pension funds for more than two million service people
and about another million civilian employees. It also
manages their medical insurance plans. It owns real estate,
collects rents, and operates concessions and businesses
on military bases. And when a multi-year weapons program
is approved by Congress all of the earmarked funds go
into Pentagon accounts but are only "dispersed" by
year.
The great irony here is that most
of the financial data processing for U.S. government
accounting systems is done by DynCorp and by Lockheed-Martin.
DynCorp was the brainchild of Harvard's Herbert "Pug" Winokur,
who chaired Enron's finance committee. Former Assistant
Secretary of Housing Catherine Austin Fitts has done
extensive research on these and other thefts and come
to the conclusion that HUD, which probably handles your
mortgage, is "a candy store for covert operations
and rigged financial markets", and that the U.S.
Treasury is being systematically looted.36 When you take
the damage to individual taxpayers and workers from this,
financial fraud, and the draining of entitlement programs
like Social Security and federal pension funds together,
the picture gets worse than ugly.
The Plunge Protection Team and Rigged Markets (From FTW's July 2002 economic bulletin)
The Washington Post acknowledged the existence of a select group of four who could and would
intervene in markets to prevent massive capital flight
and a run on shares that would cause an economic collapse
if there weren't enough cash to pay out during a massive
sell off. In his Feb. 23, 1997 story titled "Plunge
Protection Team," Post reporter Brett Fromson
identified the Federal Reserve chairman, the Securities
and Exchange Commission chairman, the chairman of the
Commodities Futures Trading Commission, and the secretary
of the Treasury as the team's key players. The intervention
of the team in the 1998 crash of Long Term Capital
Management, after it became wildly overexposed in the
gold market (see below), revealed that private institutions
such as Goldman Sachs, J.P. Morgan, Merrill Lynch and
other major banks could be involved as well.
Fromson quoted a former team member as
saying, "In a crisis, a lot of deference is paid
to the Fed. They are the only ones with any money." Or,
I might add, the ability to print it. The Treasury has
lots of money too.
Pointing to the 1987 stock market crash,
the single largest crash in history, Fromson observed, "The
Fed kept the markets going by flooding the banking system
with reserves and stating publicly that it was ready
to extend loans to important financial institutions,
if needed."
On April 5, 2000 New York Post reporter John Crudele reported that the stock market
had turned back from the abyss. After a 500-point drop
that looked like it was leading to a meltdown, "...someone
started buying large amounts of stock index futures
contracts through two major brokerage firms -- Goldman
Sachs and Merrill Lynch...Unless the brokers tell,
there is no way of knowing which of their clients were
making the purchases...Then the market rebounded."
Calling it the PPT, Crudele both referred
to the 1997 Washington Post story
and suggested that private banks were acting as team
captains.
Gold activist David Guyatt, relying on
information obtained from Gold Anti-Trust Action Committee
(GATA) Chairman Bill Murphy, pointed to the PPT in October
2000. "The hand of the Plunge Protection Team (PPT)
is clearly visible for the first time. The entire short
gold play over the last few years is a technique that
has been used to 'prop up key stocks' and 'fund futures'
operations. In the simplest form it works like this.
Borrow (at negligible interest rates) someone's [America's,
Germany's, Britain's, Goldman Sachs'] gold and sell it
in the market. This gives a handsome pool of near-interest-free
dollar cash. Whenever the stock market looks shaky, or
key stocks come under pressure, dive in and buy, buy,
buy...
"But it is not only necessary to
manipulate the stock market to succeed. It is also necessary
to manipulate the gold price and keep the price of gold
below the price PPT sold the leased gold for...This is
a game of double jeopardy...The problem the PPT now have
is that there is virtually no more official gold left
to borrow."
The causes of this intervention were a
pending NASDAQ crash and the imminent downgrading of
IBM and Intel stocks.
And the PPT's hand has been noted recently
from as far away as Australia. Progressive Review Editor
Sam Smith recently quoted a story by Richard Bromby of
the Australian Financial Review:
"At 2:32 Wednesday [June 26], New
York time, something extraordinary happened at the corner
of Wall and Broad streets. The New York Stock Exchange's
Dow Jones industrial index -- struggling since the opening
bell after the WorldCom fraud revelations -- threw off
its problems. From an intraday low of 8,926.6, the Dow
shot skywards to its high of 9,160 at 3:29 p.m...Could
it be the work of the much talked about, but never seen,
Plunge Protection Team? There is a belief that this team
represents a powerful and secretive hand that is ready
to act at any time the Dow looks ready to tank big-time...
"...London's Observer newspaper last October reported it had information
the plunge team was preparing to spend 'billions of
dollars' to avert a repeat of 1929 and 1987."
The problem is clear: With a strong dollar
the PPT has demonstrated that it has enough cash to suppress
gold prices or to save the stock market. It may not have
enough cash to do both -- especially if the dollar were
to suddenly lose its value. Then, all of the chickens
that have been locked out will come home to roost with
a vengeance.
As The International Forecaster reported
on April 26, "The American consumer has run out
of credit and buying power...All bets are off if the
housing and credit bubbles break and that's a distinct
possibility...Debtor's prison is drawing nearer. House
and Senate conferences are deciding on a new set of rules
for Chapter 7 bankruptcy...If the Plunge Protection Team
weren't manipulating the market with all these scandals,
the Dow would already be at 4,500."
----------
Adding Up The
Losses
Let's take a look at the financial raiding
that can be documented and add it up. The Bush administration
has taken some of it just to pay the bills but I have
no doubt that vast quantities of this stolen money are
being used to manipulate financial markets, stimulate
investor confidence and encourage small investors to
keep putting their money into a failed Ponzi scheme.
Bear in mind that the following "thefts" are
just what I can document.
Taken From(source)
Amount
Social Security (2001) - (USA Today/Washington
Post)
$34 Billion
Social Security (2002) - (White
House Office of Management and Budget)
$ 455 Billion
Fed. Employee Retirement System
to meet '02 budget deficits (Wall Street Journal,
June 13, 2002)
$42 Billion
Civil Service Retirement and Disability
Fund in '02 (WS Journal, above)
$2 Billion
Stolen from the Department of Defense
1999
$1,100 Billion
Stolen from the Department of Defense
2000
$2,300 Billion
Stolen from HUD 1998
$17 Billion
Stolen from HUD 1999
$59 Billion
U.S. government funds paid to companies
and individuals not entitled to receive it (Reuters)
$20 Billion
Shareholder Equity Lost to Financial
Fraud (FOX)
$600 Billion
------------------------
TOTAL
$4.629 Trillion
Dollars
Estimated pending withdrawals from Social
Security to cover deficits by 2010,
(Washington
Post citing the Congressional Budget Office)$845 Billion
This is taxpayer money. This is retirement money. This is money for Medical
care. This is the wealth of America and it is being stolen.
The Fundamentals
... With the Plunge Protection Team
on the field, it is neither wise nor prudent to predict
exact numerical events and dates. There are many sober
experts who have been predicting a major crash for
some time and the important thing is to recognize the
pressures and forces making a major crash inevitable.
My experience tells me that the markets will be rigged
and manipulated to eke every possible bit of wealth
out of them before the plug is pulled. Most of that
wealth is now coming from the Chosen People.
And still I have seen no expert
even mention Peak Oil issues and the implications they
carry for the markets. Leaving peak oil aside, let's
examine the American economy from some standard measurements.
Employment -
We have already seen that two million Americans have
lost their jobs in the last two years. Globally,
the trend is as bad or worse. In January of 2003
the International Labor Organization in Geneva released
a report showing that, worldwide, 20 million people
have lost their jobs in the last two years, bringing
the total number of unemployed to 180 million. The
report went on to state that millions of people who
do have jobs make so little money that they are just
existing.38
In light of this President Bush has
taken a "prudent" action to reduce government
spending in an effort to stimulate the economy. He
has cut off the funding for a Labor Department program
that tracks mass layoffs by U.S. companies. The mass-layoffs
statistic was widely used by analysts to measure the
health of the economy. But a story in the San Francisco
Chronicle reported
that the Bush Administration told the Bureau of Labor
Statistics to "look elsewhere for its funding."39
I guess if you don't see it, it's not there.
Pension Funds -
In January of 2003 the US Pension Benefit Guaranty
Corporation (PBGC) - the entity which serves a role
to guarantee pensions as the FDIC does for bank deposits
- announced that it was broke. In 2001 the PBGC had
$22 billion in assets, but recent major bankruptcies like U.S. Airways,
Bethlehem Steel, National Steel and LTV steel have prompted bailouts which
have wiped out the fund's ability to provide even a measure of protection
to employees whose pension funds have been looted by corporate fraud.
The PBGC does not receive any federal
money, but has been supported by federally authorized
payroll deductions. What this means is that employees
of major companies facing bankruptcy, like K-Mart,
might have no place to turn for retirement income.40
This is a classic example of the way in which major
corporate bankruptcies are used as weapons to transfer
wealth from the poor to the rich. First the books are
cooked. Then the pension funds are looted. Then the
companies go bankrupt and the assets, which should
have belonged to the stockholders and employees, are
sold off to other powerful financial interests for
pennies on the dollar.
Bankruptcies -
U.S. personal bankruptcy filings are at an all-time
high and setting a new record each month. In the
12 month period ending September 30, 2002, 1.55 million
Americans filed for bankruptcy as opposed to 1.44
million for the previous year. This was an increase
of 7.7 percent. In just the three months from July-September
of 2002, bankruptcy filings had gone up 11.6 per
cent.41
The Dollar -
With the Federal Reserve having reduced interest
rates about as low as they can, and with the economy
still failing, the dollar has started a precipitous
slide against other currencies. This is a frightening
development because most of the world's trade is
priced in dollars and most nations hold dollars as
their reserve currencies. OPEC also prices its oil
in dollars At this writing the Euro is at an all-time
high of valuation against the dollar at $1.10.
The Empire depends upon several things
to retain its power. One of the most important is the
strength of the dollar. But now a wide range of experts
are predicting a deflationary recession (depression)
in which prices and wages could actually fall. This
has disastrous implications, not least of which is
that the U.S. is the world's largest debtor nation
and its economic survival is predicated upon a heavy
influx of foreign investment capital (cash flow) to
remain solvent, especially since the Empire's financial
markets are burdened with hundreds of trillions of
dollars in derivatives (see below).
If the dollar loses too much value then,
of necessity, other nations will switch to other safer
and more stable currencies. That would send a torrent
of valueless dollars back home in a double whammy that
might pour massive inflation on top of a depression. And
the Empire knows that while the world might not be
able to resist militarily, it has been doing a skillful
job of resisting economically. Saddam Hussein has already
priced Iraqi oil in Euros and other nations are examining
the possibility. And currency agreements between Russia
and China suggest a bright future for the Chinese "golden
Yuan".
Gold -
Gold really deserves a much greater discussion than
I can give it here. Over the years incredible work
has been done by Bill Murphy and the Gold Anti-Trust
Action Committee (GATA) documenting in painstaking
detail how gold prices have been artificially suppressed
to "protect" financial markets and ensure
a ready supply for market manipulations and quick
profits. This ties in closely with the activities
of the Plunge Protection Team (PPT) above.
Not only is the price of gold a sign
to investors of the relative stability of other markets,
if gold prices rise too high too quickly the derivative
paper based on borrowed gold becomes a time bomb for
major banks like J.P. Morgan, Chase, and Citigroup.
Gold has risen in price more than 30% in the last two
years while the DOW has dropped 20% or more. And there
is five times more paper gold than there is actual
gold out of the ground.
Recently China allowed its citizens
to begin purchasing physical gold on bullion markets
and this was followed by near-panic buying in Japan
and Australia.42
The Housing Market and Home Foreclosures - Few things have been as over-promoted as the "hot" housing
market in America. The truth is that it's not that
hot and it's about to pop like all the other bubbles.
In September of 2002, USA Today reported that a record
percentage of U.S. homeowners were facing foreclosure
at a rate of 1.23%, which was the highest rate in
30 years.43 Completed foreclosures in the
third quarter of 2002 set a record at 1.15 per cent
of mortgages according to the Mortgage Bankers Association.44
These numbers imply two things. First, that the homeowners
couldn't pay their mortgages and, secondly, that
they couldn't sell the house to get out from under
the mortgage. That means there's pressure on prices.
But there are more ominous signs than
that. Before the major crashes of 2001 and 2002, which
- according to the Associated Press -
saw a cumulative total of $7.5 trillion in stockholder
equity wiped out, the telltale warning signal was massive
insider selling by executives in the "dot com" businesses
and the energy sector off their own stock. They had
cooked the books, pumped the share prices and then
sold out, leaving small investors and pension funds
holding the bag.
In August of 2002 The Financial Times reported that corporate officers and board members
of publicly traded U.S. building companies had started
dumping their personally owned shares. According
to the Times it
was the largest sell-off by industry insiders since
records of such sales were started in 1996.45
This was followed by an earnings warning issued by
Home Depot for the entire year of 2003 rather than
just one or two quarters.46 And sales of homes worth
more than $1 million fell by ten per cent in the
third quarter of 2002, with signs of prices softening
in many regions of the country.47
The Budget Deficit - What was a budget surplus when George W. Bush took office is now a
budget deficit that is estimated to top $300 billion
in 2003.48 But, as we already know, different
accounting procedures come up with different numbers. New
York Post reporter John Crudele, citing a letter from then Secretary
Paul O'Neil he found on the Treasury Department's
web site, discovered that the actual deficit for
2001 was $515 billion dollars. O'Neil's letter said, "Accrual
based financial reporting is critical to gaining
comprehensive understanding of the U.S. government's
operations. For fiscal 2001, our results were an
accrual-based deficit of $515 billion in contrast
to a $127 billion budget surplus reported last fall." 49
And all the Bush administration wants
to do is to cut taxes. That philosophy has been an
abject failure since the first Reagan administration.
It has only enriched the wealthiest one per cent, and
has created inevitably painful recessions as a result.
Derivatives -
A derivative is any financial instrument that is
not based on something with intrinsic value. Its
value is "derived" from something else
which does. When leveraged and traded they can serve
as hedges against risk or as insanely speculative
instruments. Examples of derivatives are futures,
options, forwards, swaps and various combinations
of these instruments. They can be based on energy,
on gold, on stocks, on just about anything and they
can also be created out of thin air. The problem
is that they can be incredible risky, especially
when used as leverage. Under the right (or wrong)
circumstances they could destroy an institution heavily
invested in them because if everything goes south
then enormous quantities of cash are required to "service
the paper".
When I attended the economic conference
in Moscow in March of 2001, I heard a very sharp Russian
economist state that the United States as a whole was
sitting atop a $300 trillion derivatives bubble.50
This may be a bit high but not by much. It is certain
that banks like J.P. Morgan and Citigroup are sitting
on derivatives easily within the $20-30 trillion range.51
If the stock market falls too far, or if the price
of gold rises too high, this would likely create a
liquidity crisis that could wipe out these and many
other banks as well.
Debt -
Just about everybody and everything in this country
is in deep debt. British economist Chris Sanders
(http://www.sandersresearch.com/)
recently wrote:
At 280% of GDP and rising America's
total debt burden relative to GDP has far outrun the
ability of the economy to finance it out of retained
earnings. With net foreign investment income negative,
financing the debt requires ever-greater investment
from foreigners. Although this later point is so obvious
that you may well gloss over it, consider: the implication
is that the maintenance of American economic growth
requires an accelerating rate of net foreign investment.
America already pre-empts more than 70% of net world
savings."52
When things go south, as they certainly
will with Peak Oil, and as nations scramble for dwindling
resources, debts will get called in to provide the
one financial ingredient that can mitigate a serious
crisis, liquidity. And the house of cards we have been
describing will collapse.
State and Local Government Funding - As this book goes to press some twenty-eight states
are facing the most serious budget crises they have
ever known. Many local governments are in the same
or worse condition. Discussions are being held about
the interruption or scaling back of vital services
such as police, fire, sanitation and health care.
As the economy fails and as energy becomes increasingly
expensive this can only get much worse. A global
conflict, Peak Oil and economic warfare against the
United States may well combine to render our major
cities derelict and unprotected. The Emperor's solution
to this is the tax cut which will further reduce
the federal government's assistance to the states.
Terrifying Insurance and a Bias for
Autism - In late November of 2002, Congress also passed
a Terrorism Insurance Bill.53 It became a
law that, in the event of a major terrorist attack,
insurance companies will not have to bear the burden.
The U.S. taxpayer will. And these megalithic giants
like AIG will have to sustain only five million dollars
in losses before the Treasury steps in to carry up
to 90% of the remaining burden up to $100 billion.
Five million dollars is a drop in the bucket for
a company like AIG (the world's largest insurance
company), which had more than $5 billion in profits
on 2001.54 From what we have seen above, that money
will have to come out of Social Security, Medicare,
Medicaid, your pension or the money that should have
gone to pave the roads in your neighborhood.
Adding insult to injury, after asking
a federal court to seal records that would show that
common childhood vaccines may be a direct cause of
autism in children 55 - to protect the vaccine makers
from liability - President Bush declared in his 2003
State of the Union address that he was starting the
$6 billion Project Bio Shield so that the government
could stockpile vaccines for anthrax, ebola, plague
and botulism. As we will see in the next chapter, it
will not even be required that these vaccines be tested
to see if they work before the government buys them...
A MESSAGE FROM 35 YEARS AGO
Robert F. Kennedy evolved through
obvious stages in his short life. When he was a young
lawyer he served as the counsel for the House Un-American
Activities committee and participated in a shameless
witch hunt that destroyed the lives of many innocent
people. As Attorney General serving under his brother
John, he turned on organized crime alliances which
had done business with his father Joseph during prohibition
and ambitiously prosecuted civil rights cases and
Teamsters President Jimmy Hoffa, while furthering
his brother's career and protecting the Kennedy political
franchise.
RFK was young, bright, charismatic
and powerful. But it was not until after his brother
was assassinated in 1963 that he became a visionary.
After spending what he and his family described as "some
years in the wilderness", wrestling with the
deeper questions that life had literally cornered
him with, Bobby Kennedy returned in 1964 to run for
and win a U.S. Senate race in New York. And that
victory placed him squarely in the running for the
White House in the 1968 general election.
Although I was just a sophomore in
high school when Bobby was assassinated on the night
of June 5, 1968, his life was to touch mine in some
very personal ways as a result of my relationship
with key LAPD command and intelligence figures who
began grooming me as a promising young college intern
in 1969. The story of that relationship is not important
here, but I have left it on my web site for those
who crawl the dark catacombs of history.
What is important is that in 1968,
perhaps the most pivotal year in American history
over the last century, RFK the visionary and the
prophet delivered a speech at the University of Kansas
at Lawrence. On March 18, less than three months
before his death, he said:
Too much and for too long we seem
to have surrendered personal excellence and community
values in the mere accumulation of material things.
Our gross national product now is over $800 billion
a year.
But that gross national product,
if we judge the United States of America by that,
counts air pollution, and cigarette advertising,
and ambulances to clear our highways of carnage.
It counts special locks for our doors, and the
jails for people who break them. It counts the
destruction of redwoods and the loss of our natural
wonder in chaotic sprawl. It counts napalm and
it counts nuclear warheads, and armored cars for
the police to fight the riots in our cities. It
counts Whitman's rifle and Speck's knife, and the
television programs which glorify violence in order
to sell toys to our children.
Yet the gross national product
does not allow for the health of our children,
the quality of their education, or they joy of
their play. It does not include the beauty of our
poetry or the strength of our marriages, the intelligence
of our public debate or the integrity of our public
officials. It measures neither our wit nor our
courage, neither our wisdom nor our learning, neither
our passion nor our devotion to our country.
It measures everything, in short,
except that which makes life worthwhile. And it
can tell us everything about America - except why
we are proud that we are Americans.
4. The Act, Title 2, Section 201. I-
Information Analysis and Infrastructure Protection.
Sec. 201. Under Secretary for Information Analysis
and Infrastructure Protection. http://www.whitehouse.gov/deptofhomeland/bill/title2.html#201; http://news.findlaw.com/wp/docs/terrorism/hsa2002.pdf
13. The Act, Title 8 [Co-ordination
with Non-Federal Entities; Inspector General; United
States Secret Service; Coast Guard; General Provisions],
Subtitle I [Information Sharing], section 891[Short
Title; Findings; and Sense of Congress], 892[Facilitating
Homeland Security Information Sharing Procedures],
pp.296-306. http://news.findlaw.com/wp/docs/terrorism/hsa2002.pdf
15. The Act, Title 2 [Information Analysis
and Infrastructure Protection], Title 3 [Science
and Technology in Support of Homeland Security],
throughout, pp. 21-106. http://news.findlaw.com/wp/docs/terrorism/hsa2002.pdf
17. Ibid; The Act, Title 8 [Co-ordination
with Non-Federal Entities; Inspector General; United
States Secret Service; Coast Guard; General Provisions],
section 887 [Coordination with the Department of
Health and Human Services under the Public Health
Service Act], pp.287-288. http://news.findlaw.com/wp/docs/terrorism/hsa2002.pdf
18. The Act, Title 3 [Science and Technology
in Support of Homeland Security], Section 308 [Conduct
of Research, Development, Demonstration, Testing
and Evaluation], pp. 87-91. http://news.findlaw.com/wp/docs/terrorism/hsa2002.pdf
19. The Act, Title 4 [Directorate of
Border and Transportation Security], Subtitle C [Miscellaneous
Provisions], section 421 [Transfer of Certain Agricultural
Inspection Functions of the Department of Agriculture],
pp. 118-123. http://news.findlaw.com/wp/docs/terrorism/hsa2002.pdf
24. "Of the more than 150,000
men and women currently incarcerated in the federal
prison system, 22,000 are employed by Federal Prison
Industries, which uses the trade name UNICOR. The
wholly owned government corporation was established
by Congress in 1934 to provide job skills, training,
and employment for prisoners, and now has more than
100 factories operating inside federal prisons nationwide," Silja
J.A. Talvi, "Business from behind bars: profitable,
or not?" Christian Science Monitor, May
14, 2001. http://csmweb2.emcweb.com/durable/2001/05/14/fp16s1-csm.shtml
According to Unicor's own literature,"...it
should be noted that the average Federal inmate has
an 8th grade education, is 37 years old, is serving
a 10-year sentence for a drug related offense..." http://www.unicor.gov/history/foreword.htm
28. Kelly Wallace, "Senators:
Bush could undercut whistleblowers," (CNN),
The Freedom of Information Center, July 31, 2002.
http://foi.missouri.edu/whistleblowing/senatorsbush.html;
Audrey Hudson, "Security Bill bars blowing whistle," The
Washington Times, June 22, 2002. http://www.washtimes.com/national/20020622-42082444.htm
33. "According to the General
Accounting Office, between 1996 and 1998 the United
States Navy 'lost' more than $3 billion worth of
goods-tasty items like guided missile launchers and
night vision equipment. One reason the diversion
of these goodies went unnoticed, says William J.
Lynn III, the Defense Department's comptroller, is
that the department has been using more than 330
separate accounting systems to keep track of its
possessions. In April, Lynn told a Senate subcommittee
that he is working hard to reduce that number to
32," Bulletin of the Atomic Scientists,
Vol. 55, No. 5, September/October 1999, pp. 9-10. http://www.thebulletin.org/issues/1999/so99/so99briefs.html
40. Patrick Martin, "Corporate
bankruptcies exhaust US pension guaranty fund," World
Socialist Web Site, January 29, 2003. http://www.wsws.org/articles/2003/jan2003/pens-j29.shtml Why
is it that only a socialist web site reports such
devastating news? The millions of people who worked
their entire lives expecting a pension won't care
about the political affiliation of who either revealed
or hid this official government announcement!
