Checkmate

Dmitry Orlov

In all of the descriptions of perilous situations that I have studied, arising during adventures on the high seas or in the high mountains, or during armed conflict, a single mistake rarely proves fatal. More often than not, death comes as a result of a sequence of bad choices which reinforce each other. These choices may not appear bad at the time - but they certainly do in retrospect! The end result is a situation in which no further steps can be taken that would not be either harmful or futile. This is the essence of checkmate: no moves left. At that point, none of the previous moves can be undone. Nor do they even exist, really: they have gone off to an imaginary universe populated by the regretful ghosts of those who didn't make it.

As one should expect from a natural phenomenon, failure is fractal - observable at every scale. The same pattern of maladaptive strategy leading to untimely demise constantly replays itself at the level of viruses and bacteria, and all the way to individual plants and animals, populations, societies, countries and civilizations. Nature moves forward by canceling its unsuccessful experiments, which far outnumber its successes. Most people have come to terms with the theory of natural selection, and can understand individual and group failure. But over the last few decades - quite recently, in fact - it has become unacceptable to speak of accepting the failure of very large corporations, societies and countries as a terminal state. They are always considered to be in need of bail-out, reorganization, aid, reform, reconstruction, development and so forth. Perpetual degradation and decay followed by a headlong plunge into merciful oblivion is simply not on offer. Haiti will one day be prosperous, Somalia a model democracy, and perhaps even low-lying coastal and island nations can have a bright though wet future, provided the people there are fitted with snorkels to help them cope with rising ocean levels. When attempting to come to terms with the regularly observable demise of civilizations, and the forthcoming demise of this one, our failure to cope is complete: ancient pagan archetypes take over our thinking, our unconscious mind takes over, and we are transported to a realm of second-rate fantasy films. All reasonable people agree that the future is either Mad Max or Waterworld; take your pick, end of discussion.

The concept of strategy, and of games of strategy, is a useful one, although when applying it to serious matters (instead of childish distractions like sports) our thinking tends to be distorted by the bad habits that sports instill in us. We tend to think of games as enjoyable learning experiences that teach us to play better the next time. The idea that there always has to be the next time is insidious. The vast majority of the games we can observe being played out, both in nature and in society, are played specifically to determine whether there should be a next time. "But I have learned my lessons and the next time we play I will win!" says the defeated champion. "That won't be necessary," says Death. "We must hurry. There is a horny old man who's dying to meet you. He'll be your personal trainer for the rest of eternity." But even this ageless little narrative has a flaw, for Death is rarely in much of a hurry, and the leading edge of eternity is quite fuzzy. Defeat overlaps decay, which overlaps demise. We continue playing far beyond the point at which our defeat would have become clear to us in retrospect. In the meantime, we come to accept our personal trainer as the devil that we know, and might even delude ourselves into thinking that we are winning.

It is a serious matter that much of life has been recast in terms of sport. We are all supposed to be good sports, team players, when we fail we pick ourselves up and try again, or fall into a safety net. When we get into trouble we can always call for rescue. When someone dies, it is always the result of an accident, never the inevitable result of bad judgment. People who fail repeatedly yet always try again are lauded for their persistence, never mind that they are serial failures. This isn't necessarily bad; people should and do safeguard each other. What's worse is that the higher in society one goes, the more dilute the consequences of failure tend to become, until we rise up to those exalted places whose existence is safeguarded by the magic incantation "too big to fail." This incantation is quite effective: many people are hypnotized by it. It prevents them from seeing something quite obvious: when serial failures are continually rescued, this allows them to bloat up until they are too large for the rescuers to deal with, at which point they become too big to not fail. When any one of them can no longer be rescued, the result is a cascaded failure that overwhelms the rest, and failure becomes crippling. Past that point, nobody gets to try much of anything ever again: society has checkmated itself.

What happens after that point bears a striking resemblance to what came before. After all, there were many insoluble problems before, and many degenerative cultural trends could be observed. It's just that there are more of them afterward, and they are more severe, but there may not be an obvious qualitative difference. It may not be immediately apparent that checkmate has arrived, and the specific point in time can become visible only in retrospect, if at all. Emergencies come and go, and people get used to the fact that the beaches are black and sometimes catch fire and burn for weeks, or that there is a ravine running through the center of town where the riverfront used to be, or that electricity is only on for a couple of hours a day. Dogs and children turn feral, but nobody remembers when that started happening, so everyone assumes that that's the way it's always been. Nor does anyone remember when it became fashionable to tattoo corporate logos on one's scalp, or to proudly display one's naked buttocks in public. An expatriate who leaves and later comes back might think that this now is a completely different country, but those who stay would be at pains to detect the difference because for them changes were too slow to rise above the threshold of perception.

The population can dwindle quite rapidly, but this too is often imperceptible. Large swaths of the landscape become depopulated, but that is not noticed by anyone because nobody goes there any more. When births exceed deaths, population increases exponentially. When deaths exceed births, population declines exponentially. There are always some maternities, and there are always some funerals; the change in the ratio of the two is not something that can be directly perceived. Societal extinction doesn't make any noise when it finally happens. Survivors simply move on. Non-survivors might as well have not existed, and the more gullible survivors come to believe the extravagant ruins they left behind to have been the work of extraterrestrials.

How does a society go about checkmating itself? There is no shortage of real-world examples, but real life is complicated, so here is a simple allegory. Let's suppose that there is a tribe called the Merkanoids, which remains quite ordinary for most of its history, but which at some point undergoes a strange cultural mutation. An accidental synergy between atmospheric electricity and chemicals in the water produces a strange effect on their minds that causes them to decamp from the towns and villages wherein they had hitherto happily dwelt, and take up residence in little huts scattered throughout the surrounding pasture, fields and woods. They then proceed to move around and switch huts a lot, until few of them know or trust their neighbors. This makes them feel rather unsafe, and the way the Merkanoids decide to make themselves feel safer is by burying land mines about their property and posting signs that read "No trespassing! Land mines!"

This makes them feel a whole lot safer while in fact making them much less so: the social predators among them become reasonably good at avoiding land mines, while the rest of the population generally does not, producing a large subclass of people whose legs have been blown off. These, being relatively immobile and defenseless, present an even more desirable target to the social predators, and naturally compensate by acquiring more and bigger land mines. This cycle repeats a few times, until two-legged people become the minority. Since people who are missing a lower limb or two are somewhat less productive than two-legged ones, in due course the Merkanoid economy can no longer produce the surplus necessary to invest in anything beyond more land mines (which they now find it cheaper to import from China on credit than to manufacture themselves). As debt service swallows up more and more of the Merkanoids income, their disposable income plummets. As a consequence, crutches, wheelchairs and prosthetic limbs became luxury items which fewer and fewer of them can afford. Without these devices the ever more numerous legless people can no longer move around, making it more difficult for them to remain productive members of the Merkanoid economy, causing economic output to plunge even faster.

When this vicious circle becomes too obvious for any half-intelligent Merkanoid to ignore, a reform movement springs up. Activists organize community de-mining activities and promote the idea of an annual "land mine-free week." Entrepreneurs work to develop "green mines" which stun people instead of maiming them, but these come to be regarded as less effective and therefore unsafe. Some political extremists take the radical step of de-mining their own properties. A lot of them then find their huts repeatedly burgled and quietly put the land mines back in. At one point a brilliant Merkanoid visionary has an epiphany and exclaims: "It's not the land-minds that are killing us! It's the huts!" Everyone thinks that he had gone off the deep end: how can anyone not live in one's own private hut? It's the Merkanoid way of life!

In the meantime, small groups of as yet two-legged people begin to band together on the margins of Merkanoid society. Instead of living in widely dispersed huts, they live compactly in tents, moving about the non-mined parts of the landscape. They eschew land mines and defend themselves (and each other) by keeping a sharp look-out at all times, and, if necessary, with pointed sticks. They also spontaneously develop a sort of crazy talk that turns out to be highly disruptive to the mainstream Merkanoid mentality. So disruptive is this effect that Merkanoid society, having no energy to oppose these outside groups, is forced to strenuously deny their existence. In turn, the outsiders happily ignore much of Merkanoid society, patiently waiting for it to fade from view, which, in due course, it does.

I hope that the meaning of my little parable is clear. A society takes a series of bad turns (which may not seem bad at the time). Once that happens, it's all over but for the waiting. The turns are irreversible, and attempting to make a society undo them is futile. In this situation, the only adaptive thing any of us can do is to learn to live as if these turns had never been made in the first place. This, of course, is very difficult and, should you succeed, will make you unpopular, so you should definitely consider the alternative: do nothing. In the timeless words of the I Ching, "Perseverance does not further. No blame."

www.energybulletin.net

Copper/Gold Ratio Predicts Lower Stock Prices

Trading, Natural Resources

Earlier in the year we looked at an indicator that had a 95% correlation with the S&P 500 index. While at first it may seem bizarre, the indicator was simply the copper to gold ratio.

While the copper/gold ratio and the S&P 500 had enjoyed a remarkably parallel trajectory, one was beginning to outrun the other. Since then, this pattern has only continued. As you can see from the chart below, while the equity markets continued to make new highs, the copper gold ratio spent about 9 months going sideways (from August 2009 to April 2010).

Most recently, while the S&P 500 index managed to maintain itself above the February correction, the copper gold ratio fell significantly below it.

There are several explanations. The first is that the relationship between the two is simply breaking down. I don’t think that is the case since the connection between the two is based on a tangential relationship. After all, copper is the most ubiquitous metal and is known as “Dr. Copper” for its ability to predict economic activity.

The other is that the relationship continues but one will eventually realign itself with the other. In that case, the lower price of copper is either signaling an upcoming economic contraction (with a decline in stock prices) or the other way around; that the copper gold ratio or copper (priced in gold) increases as economic activity continues and realigns itself with the higher stock prices.

Either way, I think we simply return to the battle royale between fundamental indicators and technical indicators.

http://www.tradersnarrative.com

Who Died And Made BP King Of The Gulf Of Mexico?

The Economic Collapse

There is one question that I would really like an answer to. Who died and made BP king of the Gulf of Mexico? In recent weeks, BP has almost seemed more interested in keeping the American people away from the oil spill than in actually cleaning it up. Journalists are being pushed around and denied access, disaster workers are being intimidated and abused and now BP has even go so far as to hire an army of private mercenaries to enforce their will along the Gulf coast. Are we suddenly living in occupied Iraq? How in the world did a foreign oil company get the right to start pointing guns at the American people? The last time I checked, BP did not own the Gulf of Mexico and did not have the right to tell the American people where they can and cannot go. The truth is that BP could have avoided all of this by running an open, honest and transparent operation from the start. They could have welcomed help from all sources, they could have tried to be open with the media, and they could have tried to be fair with the volunteers and rescue workers. But instead BP has been conducting this whole thing as if we are living in a totalitarian dictatorship and they are the dictators.

Over the last several weeks, members of the mainstream media attempting to cover the oil spill in the Gulf of Mexico have been yelled at, harassed, kicked off public beaches and threatened with arrest. The Obama administration keeps promising "to improve media access", but so far their promises haven't seemed to make much difference. In fact, a recent AP report detailed several recent highly disturbing incidents of journalist intimidation....

  • On June 5, sheriff's deputies in Grand Isle threatened an AP photographer with arrest for criminal trespassing after he spoke to BP employees and took pictures of cleanup workers on a public beach.
  • On June 6, an AP reporter was in a boat near an island in Barataria Bay when a man in another boat identifying himself as a U.S. Fish and Wildlife employee ordered the reporter to leave the area. When the reporter asked to see identification, the man refused, saying "My name doesn't matter, you need to go."
  • According to a June 10 CNN video, one of the network's news crews was told by a bird rescue worker that he signed a contract with BP stating that he would not talk to the media. The crew was also turned away by BP contractors working at a bird triage area -- despite having permission from the U.S. Fish and Wildlife Service to enter the facility.
  • On June 11 and 12, private security guards patrolling in the Grand Isle area attempted repeatedly to prevent a crew from New Orleans television station WDSU from walking on a public beach and speaking with cleanup workers.

But it is not just the media that are being pushed around. The Louisiana Environmental Action Network is reporting that BP is actually threatening to fire fishermen hired to help with the oil spill cleanup for using respirators and other safety equipment that wasn't provided by the company.

Seriously.

The workers say that they are only using their own safety equipment because BP has not provided what they need. It is a fact that a large number of rescue workers have already gotten sick enough to be admitted to the hospital, so it certainly makes sense that those working to clean up the oil would want to do whatever they can to stay safe.

But no, BP has to be a bunch of jerks about the whole thing.

Even the EPA says that workers need to be careful. Hugh Kaufman, a senior policy analyst at the EPA's office of solid waste and emergency response, made the following statement during an interview on Thursday....

"There's no way you can be working in that toxic soup without getting exposures."

It's not just the oil that is the problem. The chemical dispersants that BP is using in the Gulf are even more toxic than the oil. In fact, because it is so extremely toxic, the UK's Marine Management Organization has completely banned Corexit 9500, so if there was a major oil spill in the North Sea, BP would not be able to use it.

But the Obama administration has allowed BP to dump over a million gallons of Corexit 9500, Corexit 9527 and other highly toxic dispersants into the Gulf of Mexico.

Apparently the truth is that BP would rather disperse the oil so that the spill doesn't look so bad even if it means creating an ecological disaster of nightmarish proportions.

You see, these days BP does what it wants, and anyone who doesn't like it gets pushed out of the way.

Monique Harden, the co-director and attorney at the New Orleans-based Advocates for Environmental Human Rights, is so outraged over BP's behavior that she recently made the following statement....

"BP should not be running the Gulf region like a prison warden, and we've got to stop that."

But rather than becoming more open and taking responsibility for their actions, BP has now hired private security contractors to keep the American people away from the oil cleanup sites.

In other words, BP has brought in a horde of private mercenaries (just like the U.S. uses in Iraq and Afghanistan) to muscle the American people around.

Yeah, we are really going to appreciate that.

Doesn't BP understand that the American people do not respond well to this kind of nonsense?

In fact, it is being alleged that BP has actually attempted to manipulate the search results on sites like Google and Yahoo.

They seem absolutely obsessed with controlling what we see and think.

Perhaps what BP should be obsessed with is stopping the oil from shooting out of the ground.

Meanwhile, BP execs are busy testifying in front of Congress and making half-hearted apologies.

Carl-Henric Svanberg, the BP chairman, has even apologized for referring to those affected by the Gulf of Mexico oil spill as "small people".

Isn't that nice of him?

While all of this is going on, BP is already trying to ensure that things go their way legally. Back in May, BP requested that one particular judge be assigned to preside over all lawsuits related to the spill. Well, it turns out that this particular judge gets tens of thousands of dollars a year in oil royalties and is paid travel expenses to attend oil industry conferences.

Isn't that convenient?

But that is how the game is played these days.

Meanwhile, the "oil volcano" on the bottom of the Gulf of Mexico continues to pump out a nightmarish amount of oil every single day. BP is even admitting that oil is escaping from the leak at such high pressure that if they try to cap it the entire well may blow.

So this crisis may keep getting worse for months.

By the time this is over, will anything in the Gulf be left alive?

Even now, hordes of dolphins, fish, sharks, crabs, rays and other sea creatures find themselves trapped between the rapidly advancing oil and the shore. Unprecedented numbers are showing up just off the Gulf coast in an attempt to escape certain death, but once the oil reaches shore there will be nowhere else for them to go. The tragedy will be unspeakable.

Things did not have to turn out this way. BP and the Obama administration could have done things much differently. But they didn't.

Now we all have to live with the results.

theeconomiccollapseblog.com

The Street: Silver's History of Suppression

Jeff Nielson

Sophisticated precious metals investors are well-aware of the rampant manipulation of the gold and silver markets. They are also generally aware of the reason for such manipulation. A rapid rise in the price of gold and silver is like an economic "warning siren" - alerting savers that their wealth (i.e. the purchasing power of their currency) is being rapidly eroded by the monetary depravity of bankers.

At the same time that the bankers were trying to prop-up the U.S. dollar while on the gold standard, these same bankers (and their allies in government) were making their first efforts to defuse a "silver supply crisis" - caused by pricing silver at only a fraction of its true worth. In the 1960's, the U.S. government had kept the price of silver frozen at $1.29/oz. However, whenever an asset is under-priced, there will always be a group of investors who will identify such an under-priced asset - and then accumulate it. Thus, the U.S. (and other governments) were rapidly squandering their entire stockpiles of silver, as they had to dump ever-increasing amounts onto the market to maintain the artificially low price.

Ultimately, the bankers capitulated, and the U.S. government ceased its efforts to keep the price of silver frozen at $1.29. However, as is usually the case with any illegitimate scheme, every time the schemers take action to deal with one flaw in their plans, that produces unintended (and undesirable) consequences - which then require further acts of manipulation.

Once the price of silver was allowed to rise, very quickly the actual value of the silver contained in our small denomination coins (primarily the 10-cent and 25-cent pieces) greatly exceeded their face-value as legal tender. This created a huge incentive to melt-down these coins and make a very profitable arbitrage trade of "buying" these coins at their face value, and then selling them for their metal-content.

The U.S. government responded in two ways (and was quickly copied by the Canadian government). First, it changed the composition of all newly-issued coins - removing all their silver content. U.S. dimes had 90% silver-content up until 1964, while Canadian dimes contained just over 80% silver. Meanwhile, the U.S.'s 1965 Coinage Act made it a crime to melt-down any legal tender coins (in order to profit on their metal-content), and a duplicate measure was passed in Canada. Consider the true dynamics of this measure.

First the bankers abolish the gold standard, to allow them to rapidly accelerate the speed at which they steal from us through currency-dilution. This, in turn, requires them to (illegally) manipulate the gold and silver markets - in order to hide the true value of these metals from being expressed in the bankers' diluted paper. The government then makes it a "crime" for its own citizens to make a profit on their own money. In the bankers' scam of money-dilution, only the bankers are allowed to profit on their crimes.

It was at this point in history that the bankers were able to largely forget about manipulating the silver market (for many years), and to focus their energies on gold-manipulation - because basic market fundamentals created conditions which depressed the price of silver, with only minimal "assistance" from the bankers (and their servants in government).

Clearly the price of silver has been driven in recent decades mostly by its industrial demand. And it is this industrial demand which (with a little help from the bankers) kept the price of silver well below its true value for more than thirty years (until early in this decade).

This leads us to a fundamental "truth" in the precious metals sector: investment demand (i.e. "speculative" demand) does not stimulate mine production (except in a very belated manner - only after inventories have been exhausted), while industrial demand does stimulate higher levels of mine production, because the bankers will finance new mine-production based upon that level of industrial use. As an aside, it was because gold is not used to a great degree "industrially" that the bankers had to "persuade" the world's largest gold miners to enter into vast "hedging agreements" - which simulated the same market conditions for gold: maximizing production at the lowest, possible price.

In a true "equilibrium", this industrial production and demand would not cause silver to trade at a price well below its fair-market (equilibrium) value. However, the bankers ensured that the silver market could never reach such an equilibrium by continuing to dump their waning stockpiles of silver onto the market.

As I have pointed out on many occasions, between 1990 and 2005, official silver inventories plummeted by approximately 90%. It is simple economics that any good which is grossly under-priced will be grossly over-consumed. Faced with the abrupt end to their silver-manipulation (which would make it much more difficult to continue to manipulate the gold market), the bankers fell back upon their oldest and most-favorite swindle: they sold paper to people, and pretended that the paper represented actual silver - and thus "SLV" was born.

This is such an obvious sham that I simply lack the space to go until all of the clearly fraudulent implications of this fund, so I will restrict myself to just a couple of facets. From 2005 to the end of 2008, after silver inventories plummeted by 90% in just 15 years (due to being grossly under-priced), we are supposed to believe that inventories suddenly 'made a U-turn' - and tripled over the course of just four years.

Regular readers will be familiar with the following chart, which shows the progression of "official" silver inventories - along with the small caveat attached to the graph. These official inventories include every ounce of ETF-silver, and SLV (by far the largest silver-ETF) was created at the beginning of 2006. As of the beginning of 2009, ETF-holdings represented roughly 2/3 of total "official inventories".

Anyone with even a slight understanding of markets should recognize the obvious sham here. An "inventory" is the amount of a particular good warehoused and ready-for-sale. Conversely, the units of SLV (and all other bullion-ETF's) represent privately-owned silver which has obviously been taken off the market. As a matter of elementary logic, it is impossible for even one ounce of silver to be both an "inventory" and an "ETF". It can be one (silver-for-sale) or the other (privately-owned) but not both. Thus, at the end of 2008, two-thirds of official, global inventories of silver were nothing but an obvious paper-sham.

Making this massive fraud potentially much more egregious, the supposed "custodian" for most of this silver is JP Morgan, which holds the world's largest "short" position in silver, the most-concentrated position in the history of commodities markets. In what is obviously not a "coincidence" the total size of the global short position has stayed roughly equal to the (supposed) total holdings of "bullion-ETF's". However, those massive short positions are never audited, meaning that JP Morgan (and the other bullion-banks) have never been able to show they have more than half the silver necessary to cover both their short-positions and "custodian agreements" with the ETF's.

What this directly implies is that as of 2009, as much as 2/3 of total global inventories of "silver" was literally nothing but banker-paper - and we can only assume that their massive fraud has expanded in the time that has since elapsed. While industrial demand for silver helped the banksters in their nefarious (and illegal) schemes for many years, it is now industrial demand which is certain to destroy the bullion-banks.

While a gold-investor might be capable of being duped into buying banker-paper, and mistakenly believe that the banker-paper is "as good as gold", you can't use banker-paper to make silver bearings, or silver mirrors, or silver batteries, or silver solar cells, or silver anti-bacterial products. The bankers market-manipulation has progressed from merely dumping the silver which they held, to the much more fraudulent practice of passing off their worthless paper as "bullion".

In doing so, they have eliminated the possibility of the price of silver merely "correcting". What has become totally inevitable after 50 years of constant manipulation of the silver market is that this market is poised for the most spectacular default in the history of commodities markets - even more so than in the gold market. Companies which require silver to continue the existence of their businesses will be ready to bid-up the price of the commodity to multiples many times greater than an investor merely making a discretionary purchase.

www.bullionbullscanada.com

The Federal Reserve is Evil

Jonathon Schooner

The first misconception that most people have is that the Federal Reserve Bank is a branch of the US government. IT IS NOT. THE FEDERAL RESERVE BANK IS A PRIVATE COMPANY. Most people believe it is as American as the Constitution. THE FACT IS THE CONSTITUTION FORBIDS IT'S EXISTENCE. Article 1, Section 8 of the Constitution states that Congress shall have the power to create money and regulate the value thereof, NOT A BUNCH OF INTERNATIONAL BANKERS! Today the FED controls and profits by printing WORTHLESS PAPER, called money, through the Treasury, regulating its value, AND THE BIGGEST OUTRAGE OF ALL, COLLECTING INTEREST ON IT! (THE SO-CALLED NATIONAL DEBT). The FED began with approximately 300 people or banks that became owners, stockholders purchasing stock at $100 per share - the stock is not publicly traded) in the Federal Reserve Banking System. They make up an international banking cartel of wealth beyond comparison. The FED banking system collects billions of dollars in interest annually and distributes the profits to its shareholders. The Congress illegally gave the FED the right to print money through the Treasury at no interest to the FED.

The FED creates money from nothing, and loans it back to us through banks, and charges interest on our currency. The FED also buys Government debt with money printed on a printing press and charges U.S. taxpayers interest. Many Congressmen and Presidents say this is fraud. Who actually owns the Federal Reserve Central Banks? The ownership of the 12 Central banks, a very well kept secret, has been revealed: 1. Rothschild Bank of London 2. Warburg Bank of Hamburg 3. Rothschild Bank of Berlin 4. Lehman Brothers of New York 5. Lazard Brothers of Paris 6. Kuhn Loeb Bank of New York 7. Israel Moses Seif Banks of Italy 8. Goldman, Sachs of New York 9. Warburg Bank of Amsterdam 10. Chase Manhattan Bank of New York.

These bankers are connected to London Banking Houses which ultimately control the FED. When England lost the Revolutionary War with America where our forefathers were fighting their own government, they planned to control us by controlling our banking system, the printing of our money, and our debt. The individuals listed below owned banks which in turn owned shares in the FED. The banks listed below have significant control over the New York FED District, which controls the other 11 FED Districts. These banks also are partly foreign owned and control the New York FED District Bank: First National Bank of New York, James Stillman National City Bank, New York, Mary W. Harnman, National Bank of Commerce, New York, A.D. Jiullard Hanover, National Bank, New York, Jacob Schiff, Chase National Bank, New York, Thomas F. Ryan, Paul Warburg, William Rockefeller, Levi P. Morton, M.T. Pyne, George F. Baker, Percy Pyne, Mrs. G.F. St. George, J.W. Sterling, Katherine St. George, H.P. Davidson, J.P. Morgan (Equitable Life/Mutual Life), Edith Brevour, T. Baker.

How did it happen? After previous attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson's campaign for President. He had committed to sign this act. In 1913, a Senator, Nelson Aldrich, maternal grandfather to the Rockefellers, pushed the Federal Reserve Act through Congress just before Christmas when much of Congress was on vacation. When elected, Wilson passed the FED. Later, Wilson remorsefully replied, referring to the FED, "I have unwittingly ruined my country". Now the banks financially back sympathetic candidates. Not surprisingly, most of these candidates are elected.

The bankers employ members of the Congress on weekends (nickname T&T club -out Thursday...in Tuesday with lucrative salaries. Additionally, the FED started buying up the media in the 1930's and now owns or significantly influences most of it. Presidents Lincoln, Jackson, and Kennedy tried to stop this family of bankers by printing U.S. dollars without charging the taxpayers interest. Today, if the government runs a deficit, the FED prints dollars through the U.S. Treasury, buys the debt, and the dollars are circulated into the economy. In 1992, taxpayers paid the FED banking system $286 billion in interest on debt the FED purchased by printing money virtually cost free. Forty percent of our personal federal income taxes goes to pay this interest. The FED's books are not open to the public. Congress has yet to audit it. Congressman Wright Patman was Chairman of the House of Representatives Committee on Banking and Currency for 40 years. For 20 of those years, he introduced legislation to repeal the Federal Reserve Banking Act of 1913. Congressman Henry Gonzales, Chairman of a banking committee, introduced legislation to repeal the Federal Reserve Banking Act of 1913 almost every year. It's always defeated, the media remains silent, and the public never learns the truth. The same bankers who own the FED control the media and give huge political contributions to sympathetic members of Congress.

THE FED FEARS THE POPULATION WILL BECOME AWARE OF THIS FRAUD AND DEMAND CHANGE. We, the People, are at fault for being passive and allowing this to continue. THE FEDERAL RESERVE BOARD, A GOVERNMENT BOARD, HAS CHEATED THE GOVERNMENT OF THE UNITED STATES AND THE PEOPLE OF THE UNITED STATES OUT OF ENOUGH MONEY TO PAY THE NATIONAL DEBT SEVERAL TIMES OVER. The depredations and the iniquities of the Federal Reserve Board and the Federal Reserve banks acting together have cost this country dearly.

They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; the rich and predatory money lenders. This is an era of economic misery and for the reasons that caused that misery, the Federal Reserve Board and the Federal Reserve banks are fully liable. Half a million dollars was spent on one part of propaganda organized by those same European bankers for the purpose of misleading public opinion in regard to the Federal Reserve Bank.

WHAT MONEY LOOKED LIKE WHEN IT WAS STILL BACKED BY SOMETHING

Every effort has been made by the Federal Reserve Board to conceal its power but the truth is the Federal Reserve Board has USURPED THE GOVERNMENT OF THE UNITED STATES. IT CONTROLS EVERYTHING HERE AND IT CONTROLS ALL OUR FOREIGN RELATIONS. IT MAKES AND BREAKS GOVERNMENTS AT WILL. No man and no body of men is more entrenched in power than the arrogant credit monopoly which operates the Federal Reserve Board and the Federal Reserve banks. These evil-doers have robbed this country. What the Government has permitted the Federal Reserve Board to steal from the people should now be restored to the people.

Our people's money to the extent of $1,200,000,000 has within the last few months been shipped abroad to redeem Federal Reserve Notes and to pay other gambling debts of the traitorous Federal Reserve Board and the Federal Reserve banks. The greater part of our monetary stock has been shipped to foreigners. Why should we promise to pay the debts of foreigners to foreigners? Why should American Farmers and wage earners add millions of foreigners to the number of their dependents? Why should the Federal Reserve Board and the Federal Reserve banks be permitted to finance our competitors in all parts of the world? The Federal Reserve Act should be repealed and the Federal Reserve banks, having violated their charters, should be liquidated immediately. FAITHLESS GOVERNMENT OFFICERS WHO HAVE VIOLATED THEIR OATHS SHOULD BE IMPEACHED AND BROUGHT TO TRIAL.

If the media is unbiased, independent and completely thorough, why haven't they discussed the FED? Currently, half the states have at least a grass roots movement in action to abolish the FED, but there's no press coverage. In July, 1968, the House Banking Subcommittee reported that Rockefeller, through Chase Manhattan Bank, controlled 5.9% of the stock in CBS. Furthermore, the bank had gained interlocking directorates with ABC.

In 1974, Congress issued a report stating that the Chase Manhattan Bank's stake in CBS rose to 14.1% and NBC to 4.5%. The same report said that the Chase Manhattan Bank held stock in 28 broadcasting firms. After this report, the Chase Manhattan Bank obtained 6.7% of ABC, and today the percentage is most likely much greater. It only requires 5% ownership to significantly influence the media . This is only one of 300 wealthy shareholders of the FED. It is believed other FED owners have similar holdings in the media. To control the media, FED bankers call in their loans if the media disagrees with them.

Rockefeller also controls the Council on Foreign Relations (CFR), the sole purpose of which is to aid in stimulating greater interest in foreign affairs and a one world government. Nearly every major newscaster belongs to the Council on Foreign Relations. The Council on Foreign Relations controls many major newspapers and magazines. Additionally, major corporations owned by FED shareholders are the source of huge advertising revenues which surely would influence the media.

Every day I hear people complaining about what they don't like about our government and media, but not one of them are willing to put forth an effort to try and change it, especially when it comes to their personal lives. We are as much a slave on a personal level, as our government is to the international bankers. We keep right on using the tool they put out here to control us, credit cards, and we are imprisoned by it. We are no longer willing to save up to buy something, we have to have it right now, so the Government has made it easy to have what you want without the having to save for it, (CREDIT). Don't you think it funny that in a land with so much wealth, only 2 PERCENT of the people own their homes? (CREDIT). Do you know 60 PERCENT of Americans have at least 3 Credit cards used to it's maximum? (CREDIT). Do you know that only 1 PERCENT of the people have their car paid for? (CREDIT). To be free, you must throw away your credit cards, and NEVER buy anything that you cannot afford at the moment of purchase. We will never be a free people until we rid ourselves of the burden placed here to control us, and when we stop renting from the powers, the power will cease to exist.

Disrespect for Government Is as American as Fried Bananas

Felipe Franco

After decades of travelling throughout Latin America and years living there, I have developed a painful twinge every time I return to the U.S. and realize the loss of freedoms and rude behavior that is in store for me. It all comes flooding into my brain. What's the rule on shoes and searches at the airport? What will the cops do if my 7-year-old son is not in a government-approved booster seat in the rental car? What if a family member needs antibiotics or stitches? What are the things that will cause US residents to call the cops on me? What are the rules on car and health insurance that will get me in trouble? What kind of ticket will I get if I forget to turn on the headlights when there is a drizzle? Can the children stick their heads out of a sunroof or ride in the back of a pickup? No. Daddy might be arrested. Why? The cops are different here. The kids don't understand the oppressive environment. They don't understand the government worship and the angry woman screaming at Dad while he putts around on a motorcycle, "Where's your helmet!" Why do people want to control their neighbor's lives via the state in this country? We don't get it.

Then come the financial worries. What if someone is injured during the trip and we have to go to the unfriendly ridiculously expensive fascist hospitals. Is everyone's dental work caught up before the trip? What if the car breaks down? There aren't friendly roadside mechanics everywhere like there are in Latin America.

The pliant state-worshiping population seems like a crazy infestation to us in this "freest of all nations." We are used to societies made up of friendly entrepreneurs of all ages happily assisting the population. We are used to neighbors that tolerate each others' actions. In Latin America, there is no such thing as calling government goons to invade your neighbor's house when he has a birthday party lasting until 3 in the morning with a live band, clowns, a bouncy castle, fireworks, and lots of laughter. People expect the same allowances from their neighbors and they definitely don't trust the police to do anything, but cause problems. Why would you ruin your relationship with your neighbor by calling in government forces? Nobody would think of doing that.

The populace is openly disrespectful to the state in these countries. Journalism is real journalism. News articles blast state employees for their lavish lifestyles and thievery from the people. These aren't just editorials. They are regular articles filled with anti-government venom in the major newspapers. The newspapers don't spout pro-government rhetoric at the rate it is seen in the U.S. They continually point out government thievery and scandals and they hammer away repeatedly as they investigate and develop more on the stories. After all, newspapers are private businesses owned by entrepreneurs and they don't want their wealth stolen by the government either in these countries.

Latin American Governments Walk a Fine Line

These governments know that their existence is precarious. They don't own the presses for the world's reserve currency and many of them have experienced hyperinflation when they have ruined various issues of their own currency. They have a limit on the amount of wealth they can take from the people via inflation before the currency stops working. Most people don't pay any taxes. The entities that do are the major brick and mortar corporate businesses (e.g. Coca Cola, McDonalds, private airlines) who can't escape the government's predations and licensing schemes. Practically every other business is mobile or easily uprooted and replanted in another part of town. The tax base isn't there to support a large intrusive government. Most businesses will ask you when you make a purchase, "Con factura o sin factura?" This is universal language throughout Latin America meaning, "Do you want us to use the government serialized receipt and pay the taxes for this purchase?" The answer, of course, is always "sin factura" unless you need the receipt - like if you are travelling on business - in which case you may decide to pay the sales taxes or VAT via the government serialized receipt. Even then, they look at you in an odd way and ask if you wouldn't rather have a "recibo" than a "factura" so you don't have to pay the taxes. The "recibo" is an unofficial factura that you can use to claim expenses if you are travelling or purchasing something for business where you need a paper receipt to claim the expense. In the open air markets, where most of the business is done for everything from electronics to food, there is not even the option of paying taxes. For those people that really need receipts, they carry around a pad of pre-printed recibos and get a signature from the person selling the item or providing the service (like a plumber, electrician, or carpenter).

Most businesses don't even think of reporting any income or sales to the government. Since everyone has this attitude, the government stays poor and weak and can't afford to mess with the people very often. The Latin state's other option for government wealth - running the presses - has never worked for them. They wind up perpetually adding zeroes to their currency until the currency collapses. The governments have become aware that a hugely debased currency will ruin their ability to fund their operations. A currency collapse doesn't hurt the regular residents of these countries to the extent you might think. They have a lot of other options. Using Paraguay as an example - Paraguay uses as much or more foreign currency as they do their own (Guaranies). Business is routinely done in Brazilian Reales, Argentine Pesos, Chilean Pesos, Bolivian Bolivianos, Uruguayan Pesos, Euros, US Dollars, and Asian currencies. The collapse of one or more of these currencies wouldn't be a fatal blow to businesses that regularly operate in a free market of currencies. They don't rely on their country's own currency which has undergone massive inflation in the past and is currently trading at 4,765 Guaranies to 1 dollar. A 100,000 Guarani bill is the green-colored one and can be conveniently thought of as a 20-dollar bill by US visitors when making purchases. These countries could convert to barter if needed since practically everyone produces something (agricultural products if nothing else). These products are seen everywhere on street corners and in markets. It wouldn't be a huge leap for the guy who sells mangos to trade directly with the guy who sells homemade bread or the guy who sells homemade sandals if needed. People would not starve without a state currency since practically everyone is doing something productive and could trade the product of their labor.

US Attitudes vs. Latin American Attitudes

Here's an anecdote to illustrate the difference in US attitudes versus Latin American attitudes. In the early nineties, I was driving around a group of visiting Americans while living in Bolivia. I was informed by a cop that the highway we passed through that morning was under construction and closed going the other way and that we wouldn't be able to return for 24 hours until the closed lane was opened. I pulled out a 20 Boliviano note (4 dollars at the time) and paid the cop guarding the road. He opened the barrier for us and I easily drove the 5-hour trip home on the wrong side of the road. I thought my fellow Americans would be relieved that we got back to town that night, but they were incredulous asking, "What did you just do? Did you give that cop a bribe?"

"Well, yeah. I thought you guys wouldn't want to sit in the car for 24 hours getting bit by mosquitoes."

The comfort of being back in their beds was appreciated, but the fact that I negotiated an arrangement with a government official was something they thought to be outrageous. My explanation of the routine nature of such events was not acknowledged as if somehow I had gone down the slippery slope of government disrespect. I didn't understand their concern. Everyone was happy - even the cop.

Driving

Driving in Latin America is quick and efficient. It is natural and easy. Rules of the road develop intuitively and traffic is largely self-controlled by the drivers themselves. Despite what you may have heard - and this is based on years of driving experience - speeds are generally slower than they are in the U.S. People rarely race around at dangerous high speeds. They don't delay either. Major collisions are much rarer than in the U.S. I lived for 5 years in a city of one million people that had no traffic lights or stop signs at the time. Traffic flow was very natural. Traffic would flow one way through an intersection until there was a natural lull and then the cars from the other direction would nose in and dominate the intersection until the flow eased in the new direction. It is very interesting to observe and participate in - and quite safe - especially if you are not prone to road rage. Speaking of road rage, drivers don't get it in Latin America. They move quickly and efficiently and will drive around you or cut in front of you if you delay, but there is little or no animosity in their driving. They have places to go and they get there without worrying about their own egos or those of other drivers. It's a give and take attitude.

Medical

The doctors in Latin America don't give you the angry obligatory lecture like the traffic cop fascist doctors in the US who make demands of you and level threats and accusations at you if you don't comply with their "orders." Doctors in Latin America analyze the situation, run the appropriate tests (if you agree - they don't "order" you to take a battery of unnecessary tests to pad their pockets and to create a defense against frivolous malpractice suits), and give a cost estimate for the solution which you are free to decline or accept. If you decide to walk away, they are fine with that and don't insult you. They are very attentive and professional. They are trained in renowned universities and hospitals around the world (Europe, Japan, etc.) and have a much higher work ethic and professional demeanor than most U.S. doctors. They are not lacking in knowledge of complex medical techniques as people in the U.S. no doubt fear. We have undergone multiple medical procedures in Latin America.

On an occasion when we were living in Paraguay, my daughter broke her arm in a rather nasty way while practicing high jumps. A tendon had torn a bone fragment loose from the elbow. The bone chip was attached to the tendon and the tendon was detached from the elbow. We went to a private hospital. The prescribed procedure, after the X-ray and tests, was surgery creating an incision to drill a hole into the elbow, the insertion of a screw to attach the bone fragment to the elbow, the application of a cast, an overnight stay in the hospital (in a private room), and months of physical therapy after the cast came off and after a second surgery to remove the screw. We were provided a "presupuesto" (a cost estimate) of 3,000,000 Guaranies (about $600 at the time) for the two surgeries, private room, and multiple visits with a physical therapist over the coming months. We were told that we could decide if we wanted the work done in which case we could come back and pay at the front desk. We went home, thought it over, and came back and paid the money. Everything went splendidly and our daughter's arm has a full range of motion with no ill effects from the serious injury. I can only imagine the fiasco of unnecessary tests this would have turned into in the U.S. where there is no customer relationship - not to mention the likelihood of a call to the evil family services officials to investigate our family. What does a routine doctor visit cost at a private hospital in Paraguay? 20,000 Guaranies. When you punch that into your calculator, you will think you made a mistake. Government run hospitals in Latin America are crowded and bureaucratic. They argue endlessly with their clients about scheduling and documents. They are not worth dealing with. The private clinics and hospitals are fantastic. They are very aware of the business relationship with their customers. They want customers to have a good experience so that their reputation remains untarnished.

Dental

My family has undergone extensive dental work in Latin America including multiple root canals, crowns, and bridges. The same type of modern dental techniques and dental laboratories that exist in the U.S. are utilized. The level of patience and personal attention are much higher and the prices are much better. The dental clinics may be less impressive and ornate looking than a U.S. clinic, but who wants to pay more for a fancy office. The equipment is modern and the dentists are skilled. That's what matters.

As an example, eight months ago, I had 10 leaking fillings drilled out and replaced on 10 separate teeth. The original fillings had been done years before in the U.S. and were cosmetically ugly beside the fact that they were failing. It took 10 visits over a 6-week period to get all the work done. The end result was technically immaculate and was also a great visual improvement over the original fillings. The total cost: $250 ($25 per tooth). A U.S. dentist told me that it would have cost at least $300 per tooth to do that in the U.S. Root canals cost $120 and the crown including the mold and the custom laboratory work is another $100. If you haven't checked recently, a root canal and the custom mold and laboratory work to make the crown will cost you thousands of dollars in the U.S. I'm sure that more and more businesses will arise that arrange medical and dental tours to foreign countries for those patients who lack the language ability and geographic knowledge needed to get the work done on their own. Once you've experienced private foreign medical and dental work, you will never look the same at expensive, rude, and inattentive U.S. doctors and dentists - and you can get a foreign vacation thrown in for the cost of getting the work done in the U.S.

Other Benefits

There are many other benefits that come from living in a society where the government can't effectively control economic and personal behavior. Here are some of them.

Healthier diet and lifestyle: One of the first things you notice when you go out into the world in a Latin American country is that almost everybody is physically fit. Children and adults are not obese. They are not malnourished either. Why? They eat better and have a healthier lifestyle. They eat meats, vegetables, and fruits that they buy fresh and prepare simply. They eat instinctively based on what their bodies need - not based on a government "food pyramid" or FDA labels about salt and cholesterol. They move around more. They walk a lot. The children are not turned into Ritalin zombies. The people sleep and work based on what makes sense in their environment. They don't let the government program their lives.

Ease of hiring: Most households have domestic employees because they are so affordable. Even persons who don't have a lot of money often employ someone who makes even less than they do. The average household employs a housekeeper and a gardener and often a young man or woman to run errands. It is easy to start a business out of your house and have an employee to help you. A wage is agreed to voluntarily by both parties - typically $50-150 a month in many countries. The household is helping this person who willingly agrees to work in the household to raise his or her standard of living. The employee is usually given meals as well. This is a very kind arrangement which allows people to enter the workforce and better themselves rather than live in poverty - which would be the result if the minimum wage laws were followed. Also, specialty workers like carpenters, electricians, plumbers, and welders are affordable, easy to hire, and have a tremendous work ethic. Employment is near full employment in Latin American countries where employers and employees negotiate directly for wages and services.

Closer families: Social security may exist on the books in these countries, but is not relied on since less wealth is stolen from society to support such programs. Multiple generations regularly meet together, live together, eat together, celebrate together, and take care of each other. Aging relatives are welcomed into the homes of younger family members. It is very common to see an old man or woman out walking with their adult child by their side. That is the norm. The lonely detached aging person warehoused away from their family is much rarer. The state-sponsored divorce industrial complex does not exist in these countries either. Government interventions in family life have broken down many of the natural affections between family members in the U.S.

Cars: There are more car choices to fit your needs. All kinds of interesting imported cars are seen throughout Latin America. Many small efficient cars and innovative trucks and specialty vehicles can be purchased that are the current state-of-the art for automakers. These cars are never seen in the U.S. because the foreign company has not paid the millions of dollars to undergo U.S. crash tests and DOT certification. I have often impressed US car aficionados by sending them photos of new modern cars that are never seen in the U.S. They are imported cheaply via unofficial means (bypassing import duties) into Latin American countries. You can choose from many interesting models made all over the world. Many persons don't get license plates for their cars. Many that do get plates only pay once when they buy the car and never choose to pay again to re-register.

Not lawsuit happy: People in these countries like to settle things directly between themselves. There is not the predatory civil lawsuit environment that exists in the U.S. This keeps down the cost of services, medicines, etc. and reduces the fear that your property will be taken by the courts and given to someone else. Once again, people don't want the government involved in their affairs.

More choice of medications and herbal remedies: Pharmacists, doctors, and herbal specialists readily help customers choose the correct remedies and advise appropriately on negative effects, dosage, etc. Drug addicts are much rarer than in the U.S. Substances tend to be used carefully and in moderation. People can also do their own research and then go into a pharmacy and buy whatever they want without a prescription. Generic and name brand medications are imported from all over the world. Surprisingly, U.S.-made medications are often cheaper because they are sold for export from the U.S. and don't have all the medical liability costs built into the price tag as is the case for the same medications sold for the U.S. market.

Fine dining: If you are into eating out regularly, the prices are fantastic compared to U.S. restaurants. A $10 price for a high-end meal with drinks at a classy restaurant is not uncommon in third-world countries in Latin America. This is, once again, due to the fact that businesses ignore the state's wishes and hire employees and operate businesses with total disregard for the government's nonsensical regulatory mandates. They make money by serving and providing for the needs and happiness of their fellow man. The food is great. The stereotype about unhealthy cooking practices is just that. I get sick less often in Latin America than I do in the U.S. The waiters also treat customers with utmost respect. They are extremely attentive and do not intrude and blare over the diners as happens with waiters in the U.S. who try to dominate the conversation at the table. I have a hard time stomaching arrogant, loud, overbearing, and intrusive U.S. waiters after living for years in Latin America. Many U.S. companies now hold seminars in foreign countries, like Mexico, just for the fine personal treatment that is provided by the waiters in resorts and restaurants as compared to that received in the U.S. Employees like waiters are actually expected to perform their duties in a polite respectful manner since they don't have government agencies to force the employers to keep them when they behave in an inappropriate manner.

Government Work is not Honorable

The residents of these countries don't worship the police or the military as their saviors or heroes. The state tries to foster hero worship through the erection of statues and the naming of holidays and streets after military figures, but the people are strongly aware that those who enter the police or military professions are doing so to enrich themselves at the expense of others. The people see the thievery happening up close and personal as cops directly take their money to let them out of state-manufactured infractions. It is nice to see directly the dirty parasitic nature of the state rather than through the filter of a thieving taxation system where the parasites aren't seen taking money directly from the public. Children see their parents paying the cops directly and they become aware at an early age that anyone entering the government is pursuing a career of thievery.

As it used to be in the U.S. in the days of my parents, the most prestigious profession in Latin America is that of engineer. The engineering profession is the symbol of industry and productivity in Latin America and represents the opposite of the filthy state in people's minds. The title "inginiero" immediately commands respect. The professions representing industry and productivity are the most revered and the careers involving politics are the most despised by the people.

Ranking the Freedom in Latin American Countries

It is fairly easy to rank the countries that have more and less freedom in Latin America. As a general rule, if you want the most for your money and the most freedom, go to countries that are not "first world" or "second world" and go to countries that are farther from the U.S. The official level of "socialism" in the government of the country is less important than you think. Don't spend a lot of time studying their laws. All Latin American countries have very intrusive laws and confiscatory taxation schemes. The laws are more draconian than they are in the U.S., but they are outright ignored in most of the countries. The economies in first world / second world countries where the government has more wealth and more power (e.g. Brazil, Argentina, Chile, Colombia) are more formal and more controlled by the government which results in less freedom. Also, countries that are closer to the U.S. have already been inundated to a greater extent by U.S. visitors and have elevated their prices somewhat. They are also more affected by U.S. Government pressures and U.S. Government money aimed at "cracking down" on informal businesses. However, even the closer, bigger countries (e.g. Mexico) have a higher level of actual day-to-day freedom than the U.S. and lower prices than the U.S. for medical, dental, etc. Even the countries I mentioned with wealthier governments have more day-to-day freedom than the U.S., so they are not bad choices if you are enamored with one of those countries for other reasons. The "dangers" you read about in Latin American countries are severely overstated or simply invented to promote statist intervention in activities that the government does not like. We feel safer on the streets of Latin America than we do on the streets of big cities in the U.S.

Contempt for the State

Persons in Latin America have a strong healthy disrespect for government. They openly display their contempt for public officials as they jeer and mock convoys of officials driving through their midst. They consider things that they work for to be their property and not the property of a state parasite. They purposely keep their things out of reach of the government. They don't cheer government as the savior of humanity. They strongly resist state attempts to register their assets, income, and banking activities. The state stays weak because the residents don't willingly sign themselves up to be robbed. The state employees cannot try too hard to overcome this or they will be deposed as has happened many times in the past. The Latin state keeps hobbling along weakly and is tolerated grudgingly by the populace if it stays out of the way.

June 18, 2010

Felipe Franco [send him email] is an American homeschooling father and frequent business traveler to Latin America.

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