Tuesday, October 14, 2014

When Poverty Was the Enemy, Not the Poor

The poverty rate in the US would be 15 percent higher if not for the War on Poverty and government anti-poverty programs since 1967.
Tom Eblen
It has been 50 years since America launched the War on Poverty. The Economic Opportunity Act and legislation to outlaw racial discrimination were the centerpieces of President Lyndon B. Johnson’s vision to create a Great Society.
Today, rather than a war on poverty, we seem to have a war on the poor. Wealth inequality is growing. State support for education is withering. Social safety-net programs are under attack in Congress. Many Americans believe that if people are poor, it’s their own fault. The only “solution” for poverty that many people advocate is allowing companies to create jobs offering wages too low to support a family.
Although it is now widely—and inaccurately—portrayed as a costly welfare program, the War on Poverty was not a failure. If not for government anti-poverty programs since 1967, the nation’s poverty rate would have been 15 percentage points higher in 2012, according to a study published recently by the National Bureau of Economic Research.
For the many Americans committed to fighting economic injustice, the War on Poverty offers some valuable lessons. It showed what can work—and what is still working. It can even work in some of America’s poorest places, such as the Appalachian Mountains of Eastern Kentucky where Johnson traveled in 1964 to launch his “war” from the front porch of a poor laborer’s cabin.
As a young adult, Robert Shaffer accompanied his father to the March on Washington for Jobs and Freedom in 1963 and was inspired to action by Martin Luther King Jr.’s “I Have A Dream” speech. Shaffer went home to New Jersey and started organizing poor people to push for economic justice.
His work soon attracted the attention of the new Office of Economic Opportunity (the OEO). But Shaffer wanted to work on the front lines, not in some Washington cubicle. He had read Harry M. Caudill’s 1962 book, Night Comes to the Cumberlands, which chronicled the poverty, economic injustice, and “desperation of the spirit” in an Eastern Kentucky controlled by coal companies and absentee landowners. Shaffer told federal officials, “I’ll take the job if you’ll send me to Kentucky.”
The Economic Opportunity Act required the “maximum feasible participation of the poor” in decisions about the use of federal development money. But many state and local politicians and business leaders in Kentucky saw that kind of power-sharing as a threat, and they ignored the requirement. In one example, the federal government took back a major grant from the eight-county Cumberland Valley Community Action Agency because it refused to give poor people a voice. The OEO sent Shaffer to Kentucky as a special technical assistant to reorganize the agency so funding could be restored.
“Those who lost control of the grant funds resented the new agencies,” said Shaffer, now 84 and living in Berea, Ky. “Those people weren’t used to somebody else having money to work with that they didn’t control. Sometimes it was a pretty hostile environment.”
Later, with federal money and diverse local leadership, Cumberland Valley and other community-action agencies in Kentucky achieved notable successes. They leveraged social services to create businesses, taught job skills to poor people, and created small construction firms and manufacturing companies owned by their workers. Among those companies’ products: handmade crafts, upholstered furniture for Sears Roebuck & Co., and high-end dresses for Laura Ashley, Inc.
“Before long, products being produced in some of the poorest counties in the nation were being sold in fine stores in New York City, Dallas, Chicago,” Shaffer said. Unfortunately, many of those companies later went under after free-trade agreements sent manufacturing jobs overseas to low-wage countries.
“There’s a difference between welfare and economic opportunity,” Shaffer said. “And, to me, that’s the exciting thing about what we experienced here. We were using social services for economic development and ownership.”
Shaffer worked closely with Hollis West, one of most successful community action agency leaders in Eastern Kentucky. He was also one of the most controversial because of his confrontations with the bosses who controlled the poor mountain counties. At their behest, Gov. Louie B. Nunn tried to get West fired.
“These programs helped get a generation of families jobs,” said West, now 83 and living in Lexington, Ky. “We just had to find ways to get all sides working together.”
Their experiences showed them anti-poverty programs work best when poor people are involved in policy decisions. “You’re never going to change the culture of Appalachia until you have a legitimate organization of the poor and their allies,” Shaffer said. “The majority of the people in the mountains are just as capable as anyone else if they have the same education and economic opportunities as anyone else.”
Johnson’s passion for ending poverty was not shared by his successor, Richard Nixon. By the early 1970s, the Nixon Administration had killed or neutered many War on Poverty programs.
Shaffer said he and other special technical assistants from around the country were called back to Washington in 1971. The OEO was then headed by Donald Rumsfeld, who, as Secretary of Defense three decades later, would oversee the war in Iraq. “They said, ‘You’ve been doing a wonderful job, you’ve accomplished a lot of good things … but we cannot expand the program so we’re going to terminate it,’” Shaffer said.
But one organization that Shaffer and West were instrumental in creating in 1968 survived. Originally called Job Start, it is now Kentucky Highlands Investment Corp., based in London, Ky. It grew under the leadership of Thomas Miller, who moved Kentucky Highlands into the venture capital business in 1972. The mission has expanded even more under Jerry Rickett, the director since 1989. Kentucky Highlands says it has helped create more than 18,000 jobs in the region since 1968 by providing more than $275 million in public and private financing to more than 625 businesses. The result: $2.1 billion in wages and salaries and $400 million in tax revenues.
“You’ve got to have a job if you want to overcome poverty,” Rickett said. “That’s what this company has always been about.”
The coal industry, which for more than a century created an almost colonial economy in the mountains, has been cutting jobs for three decades. Decades of state government efforts to attract large corporate employers from outside the region have resulted in few jobs that pay more than minimum wage. It has largely been a top-down effort.
But Kentucky Highlands focuses on home-grown entrepreneurship: training people who have the aptitude and helping them get capital to start and grow businesses. The capital comes from government grants and loans, private foundations, and, increasingly, banks and other private investors.
Kentucky Highlands also partners with dozens of other organizations on projects. A recent focus has been building about 25 energy-efficient houses a year for low- and moderate-income families and helping with a state initiative to expand broadband infrastructure so people can take advantage of information-economy jobs. Kentucky ranks 46th nationally in broadband coverage with 23 percent of the state’s residents, primarily in Eastern Kentucky’s mountains, having no online access.
After leaving Kentucky highlands in 1981, Miller went on to work in economic and community development in San Francisco, Tennessee, New York, and Africa. But when it came time to retire, he moved to Berea, where he continues to advocate for more effective Appalachian development strategies. Kentucky Highlands is doing the right things, he said, but it will never be big enough.
In the 1990s, the Clinton-era Empowerment Zone program brought Eastern Kentucky $40 million in tax breaks and loans, some of which still fund a $13 million revolving loan fund that Kentucky Highlands says has leveraged $120 million in private investment.
Miller thinks a new, massive infusion of investment capital is needed, an Eastern Kentucky Venture Fund of at least $250 million organized by successful business leaders from across Kentucky. The region also needs more trained entrepreneurs who know how to use that money to grow and diversify the economy.
“There are no silver bullets,” Miller said. “It’s probably a 50-year strategy, at best, and the first 10 years aren’t going to be pretty. But we know that this investment strategy works in Eastern Kentucky, that betting on the people here is the thing to do.”
Like other parts of the Central Appalachian coalfields, Eastern Kentucky remains one of America’s poorest places, with high unemployment, drug abuse, and other social problems that grow out of joblessness. But substantial progress has been made—in living conditions, educational attainment, health care, and infrastructure. And what set that progress in motion was the War on Poverty.
“Dad worked in the coal mines and did other jobs. He was a very hard worker, but he didn’t have an education,” said Darlene Sharp, 61, who was a teenager with six brothers and sisters when the War on Poverty came to Knox County. Her father managed buildings that housed the new educational programs, and her mother got a job at one of the factories West helped create. “A lot of people worked there,” she said. “I’m sure that every one of them was people who had no employment before. Without the programs, there weren’t very many jobs. It helped them be able to take care of their families and meet needs. I know it helped my family.”
At its core, the War on Poverty was not about a handout, but a hand up. It was about creating economic opportunity and giving poor people the skills and support they needed to take advantage of it. And it was about giving poor people a voice in decisions affecting their lives. A half-century ago, Americans made a commitment to fight a war on poverty, and we could do it again. Creating a society that is more fair, just, and prosperous for everyone is a fight worth winning.
This piece was reprinted by RINF Alternative News with permission or license. 

Yes, CEOs are ludicrously overpaid. And yes, it's getting worse

These charts show how the richest are pulling away from the rest

A large computerised display of the British FTSE 100 index is pictured in London
Nice work if you can get it: FTSE 100 CEOs have seen huge pay increases Photo: AFP
 
A new report produced by the TUC claims that we're in the middle of the worst pay squeeze since the 1860s, with real wages falling for the seventh year in a row. Not the best time for another report, by Incomes Data Services, to show that FTSE 100 directors have received a bumper 21 per cent pay increase over the past year. While their actual salaries only rose by 2.5 per cent, rising share prices and juicy bonuses saw their median pay packet reach £2,433,000. The typical CEO now rakes in £3,344,000, or 120 times more than the average UK worker.
The chart below, taken from the IDS report, compares the wages of the highest-paid director of each FTSE 100 company (which usually means the chief executive) with the average UK salary. It shows how, since 2000, bosses' salaries have increased almost six times more quickly than their workers'. (Pay packets at smaller companies, in the FTSE 350, have also risen much faster than ordinary wages, but not quite as spectacularly.)
Can such pay packets possibly be justified? Even for those of us on the free-market end of the spectrum, it's very hard to see how. You can make the argument that these executives are part of a global marketplace for talent, that the international focus of the FTSE means it's relatively unmoored from the UK economy per se, or that the companies themselves have become larger and more profitable and their managers are reaping their just rewards.
But none of these arguments quite holds up. If you take the salary data for those FTSE 100 chief execs, and ask a Bloomberg terminal for the total revenues and profits of the companies they run over the past few years, you see that CEO pay has massively outpaced anything with which it can possibly be correlated - let alone the FTSE 100 Index itself, which is the blue line on the bottom.
 

What’s Really Killing the World Economy

Turns out forgiveness can be a virtue when it comes to easing hard economic times, as well as other areas of life.
The world economy is still stumbling, Paul Krugman writes in his column today. Recovery is stalling. “If this story sounds familiar, it should; it has played out repeatedly since 2008,” Krugman writes, somewhat depressingly. “As in previous episodes, the worst news is coming from Europe, but this time there is also a clear slowdown in emerging markets — and there are even  warning signs in the United States, despite pretty good job growth at the moment.”
Then he sets out to answer this question of why things areso bad. After all, we are many years past the housing bust and banking crisis, i.e., the causes of the Great Recession.
The sad truth is that the ongoing economic hardship around the word is and perhaps still is avoidable, in Krugman’s view. It is the result of a series of policy mistakes: “Austerity when economies needed stimulus, paranoia about inflation when the real risk is deflation, and so on.”
Next question, then, why do governments keep making these mistakes?
The answer, Krugman posits, is misplaced righteousness, overzealous moralizers intent on continuing to punish debtors even if doing so drags everyone down. Here is the background: Before the crash, credit was exploding. “Old notions of prudence, for both lenders and borrowers, were cast aside,” Krugman writes. “Debt levels that would once have been considered deeply unsound became the norm.

Suddenly, We Have Problems

by John Rubino
A rising stock market, like a rising tide, can cover a multitude of interesting and/or scary things. The thinking seems to be that if the finance guys who really know what’s going on are buying, then the disturbing stories that lead each evening’s news must be manageable. So, in general, we’re okay.
But let the market fall a bit and those headlines suddenly begin to seem both oppressive and really, really numerous. And maybe we’re not okay after all. To take just a few of the issues that, in the wake of the recent equity correction, now loom large:
Islamic State, the tiny band of religious crazies that the US armed to do its bidding in the Syrian civil war is now threatening to take Baghdad, capital of Iraq and home to a US embassy that will live forever in the annals of hubristic excess. Actually a small, self-contained city, the embassy contains all kinds of sensitive equipment, documents and personnel, and will be defended with (thousands of) boots on the ground if an Islamic State victory appears imminent — which it now seems to be. In other words, we’re getting ready to dump another trillion or so dollars into the hole where we previously dumped two trillion with nothing to show for it but chaos.
Ebola, a nasty virus that was previously polite enough to stay in Africa, has escaped and is now touring Europe and the US. Either it has mutated to become more communicable or the West’s protocols for dealing with it are inadequate. Either way, there is now talk of the disease breaking free and causing a First World pandemic. See Ebola pandemic spreading across Europe is ‘unavoidable,’ WHO warns.
The strong dollar, meanwhile, has had the same effect on the world as would higher US interest rates, slowing growth and causing hot money to leave emerging markets and pour into US Treasuries. So while everyone is waiting for the Fed to raise interest rates and court the traditional “taper tantrum” liquidity crisis, the foreign exchange markets have done the heavy lifting already. See Why a strong dollar is scarier than taper tantrum.
Japan and Europe are dropping into recessions that could easily become system-threatening depressions. While US stocks were rising it was possible to view America as an island of stability in a chaotic world. But when US stocks start to fall it’s much easier to envision an interconnected world where everyone feels everyone else’s pain. Which is the accurate viewpoint, because who will buy our stuff — including the bonds that finance our deficits — if the other major economies grind to a halt?
Junk bonds, typically a canary in the financial-bubble coal mine, began selling off in September, just as the dollar started to spike. This was also easy to ignore while equity prices were rising, but now looks like the first of many dominoes to fall in a financial panic.
And it’s October! All of the above happening simultaneously would be scary anytime, but coming in the month when some of the most dramatic stock market crashes have for some reason occurred, this must feel like deja vu all over again for folks with a sense of financial history.
It’s impossible, of course, know whether something is a crisis until it becomes one. So this might turn out to be nothing more than a hic-up in the permanent new normal of ever-rising financial asset prices. We’ll know soon enough.

Counterfeiting Trillions of Dollars in US Treasury Bonds And Other Crimes.

A week ago I noticed that the Treasury published our total increase in Treasury bonds for the past year. It had grown by $1,085,888,854,036.50. Some people mistakenly think that this is the Treasury deficit. Not quite. They have not accounted for the privilege certain Too Big To Jail Banks have which is that one or more of them is allowed to counterfeit US Treasury bonds and pocket the cash.
The Treasury deficit is calculated the old fashioned way. You take federal expenses and subtract revenues. The total Treasury deficit for 2013 cited by Joint Statement of Secretary Lew and OMB Director Burwell on Budget Results for Fiscal Year 2013 was $680 billion.
If you subtract the Budget deficit from the total number of Treasury bonds sold you have: $1,085,888,854,036.50 minus $680 billion which  equals $405,888,854,036.50.
So the Bankers are allowed to take more than $405 billion a year from you because they can counterfeit Treasury bonds. The Federal Reserve has 21 primary dealers who handle Treasury transactions through the New York branch of the FED.
Is there any evidence that there are large amounts of fake Treasury bonds floating around? Yes. There is. There is a rather intriguing story from June 2009 about two Japanese men headed to Switzerland who were detained in Italy with 134 billion dollars in US Treasury bonds. The bonds turned out not to be genuine according to the US Treasury. It is illegal to possess counterfeit securities, but the men were sent back to Japan without being charged. Bloomberg did a story a few days later saying this was merely bizarre news.
Dr Jim Willie said the primary dealers and the New York Federal Reserve sold $2.2 trillion in counterfeit Treasury bonds from the Clinton era and another $1.5 trillion more in bonds than the deficits required over the 45 months after 911. So far no politician has done anything to stop this organized counterfeiting.
When the Federal Reserve was created in 1913, Bankers were given the right to charge us interest on money they created out of nothing. If we had a non-interest bearing debt free currency like Lincoln’s Greenbacks, there would be no National Debt and no interest paid on that debt. There ought to be no Treasury bonds and no interest on the debt.
The Bankers have been given a license to steal from you in other areas. Some might remember the controversy of the bullion banks being allowed to lease gold at a very low interest rate and then to sell it five times as a paper certificate.  Various countries like Germany and the Netherlands have asked for the return of their gold that had been on deposit in New York and London. The US said it would take 7 years to return Germany’s gold. To date the US has returned 5 tons of gold out of 1,500 tons on deposit. Dr Jim Willie has estimated that there are at least 20,000 tons of paper certificates for gold on deposit at bullion banks for which there is no corresponding bullion.
Bankers have other means of stealing from you. Catherine Austin Fitts says they stole $40 trillion from you.
Catherine was US Housing Commissioner in the first Bush administration. She said she found one block in San Diego that had lost $20 million in HUD loan guarantees made on properties that never existed and did not even have postal street addresses.
On March 22, 2000 Susan Gaffney, Inspector General of Housing and Urban Development, testified before the US House of Representatives that she had to adjust the books 284 times and write off $77.2 billion for the fiscal years 1998 and 1999. A Congressman asked her if she did anything other than adjust the books. She said she did nothing other than adjust the books meaning she did not even bother to recover the stolen money. The Congress has rather low standards when it comes to protecting you from organized theft by Wall Street.
On September 10, 2001 Donald Rumsfeld said he could not trace $2.3 trillion in Department of Defense spending. He promised to do a better job in the future. The future is Now and DOD accounting has not improved. Rabbi Dov Zakheim was the Comptroller of the Pentagon under Rumsfeld. It was his job to find the missing trillions. On the morning of 9-11-2001 the auditors tracing the missing money died. Also on 911 the records that could prove the existence of 2.2 trillion dollars in counterfeit Treasury bonds that had been sold in the Clinton years was destroyed at Cantor Fitzgerald’s offices at One World Trade Center on the 101st to 105th floors. The Securities and Exchange Commission had an office in World Trade Center Tower 7 that had evidence against the Wall Street firms who could have been sued over their fiduciary responsibilities for the ENRON bankruptcy.  Too bad all the evidence for the $2.2 trillion in counterfeit Treasury bonds and billions in the ENRON case went up in smoke on 9-11-2001.
Two American financial reporters, Stacy Herbert and Max Keiser, reported the results of their interviews with Bankers in Dubai. The Bankers told them that American military contractors who opened bank accounts in Dubai did so with all cash deposits averaging $2.5 million.There have been consistent reports that the US Department of Defense has let out contracts for buildings, bridges and other projects that are blown up by ‘terrorists’ as soon as they are complete thus allowing the contractor to build another bridge to nowhere.
Afghanistan and the world are awash in opium. I read an interview with an American veteran who had been a sniper. He was told to take out anyone going over his assigned mountain pass except for the man transporting the opium. And you wonder why America is still in Afghanistan and is negotiating to keep a military presence there.
This opium war diplomacy has been a long standing tradition. President Nixon appropriated millions over a period of years to pay Turkish farmers to stop selling their opium illegally because their sales were to the French Corsican mobs. Those men were in competition with the CIA which was bringing heroin into the US from Vietnam and Burma. One of the three reasons for killing President Kennedy was the desire to get white Americans hooked on drugs.
Vietnam was America’s First Opium war and Afghanistan was its second. The Too Big To Jail Bankers launder a trillion dollars in illegal weapons and drug money. The Bankers also launder $500 billion a year in political bribes. The CIA flies drugs into the US by the plane loads which it sells to its favored Street Gangs. These gangs according to the FBI had been growing at 40% every four years. America’s Open Borders have increased the growth of those gangs by allowing juveniles with Gang Tattoos to enter the country along with adults who have criminal records. This should mean we will surpass the 2 million Gang Members mark some time in 2015.
The Mexican Drug Cartels, some of whom work with the CIA, have already put American cops on their Death Lists. The Cartels obviously are waiting to cross names of their Death Lists as soon as they have added sufficient numbers to their armies inside the US. No point in risking a closing of Open Borders by prematurely killing the most honest and courageous cops in America. They plan to systematically go down that List until the honest cops are either dead or retired.
The elite Bankers think America suffers from ‘Excessive Democracy.’ Two million Drug Gang members will eliminate what little remains of America’s democratic traditions. Zach Taylor, the former Border Patrol supervisor, had access to US intelligence reports. He said that the Russian gangs are working very closely with the Mexican Cartels. What he did not say was that the Russian Gangs are Jewish.
The Mexican government works very closely with the Drug Cartels and the CIA. The Mexican Drug Wars have have killed 130,000 people. The Mexican government, the CIA and the favored Drug Gangs like the Sinaloa Cartel are not willing to share the drug profits with some 300 other smaller gangs.
Americans should take a long hard look at what the Cartels are planning for America. This is known to the federal government but that has not yet convinced them to end the disastrous Open Borders policy.
Some have speculated what Wall Street will do to change the dynamic of American politics now that we can be certain that the Federal Reserve and the rampant corruption will send this current Depression into the worst one in 500 years. The Bankers dealt a serious body blow to America’s ‘Excessive Democracy’ in 2001 when they they let Israel take down World Trade Center Towers 1,  2 and 7 with controlled demolitions. This allowed them to pass the Patriot Act, the John Warner Defense Authorization Act, The Military Commissions Act and the Nation Defense Authorization Act of 2012 and to militarize US domestic police.
They have already started doing what they plan to do in their Endgame. Ebola was, in my opinion and that of many others, a manufactured disease that enabled the City of London, Wall Street and Parisian Financiers to do what they have been doing for hundreds of years which is to exploit Africans. Ebola makes the governments of the Dark Continent extremely weak so Bankers can rob Africans of their immense natural resources.
90% of the ships used to transport African slaves to the New World were owned by Jews. When the working and middle class whites demanded an end to slavery, the Bankers replaced it with the even more profitable drug trade.
What white Americans have yet failed to realize is that the Bankers have no more regard for them than they do for Africans. Ebola has been reengineered to  give it a longer period of transmission. In the old days it killed people before they could spread it. Now the new and improved version of Ebola is Coming to America and to Europe. The Tory government of Britain and the Socialists in France have blocked direct flights from the Ebola infected countries since late August. Not so for America. Ebola and Enterovirus D68 seem to be doing great harm to America’s medical system. Given time they will be more devastating than Obamacare.
When the Dollar Dies and the economy crashes, Ebola will stop people from gathering in large crowds. This will prevent mobs of people with pitchforks from chasing down the Brokers and the Bankers of Manhattan. Ebola will also give a Greenlight to Disappearing the American resistance movement. I have said before that the federal government has a plan to Disappear 8 million Americans. That could only be attempted if there were a plague to cover it up. If they can give you s drug that makes you believe a false Ebola diagnosis, they can give you the real thing when you get to their concentration camps.
I do not expect a widespread plague until the US starts a mandatory Ebola vaccination program early in 2015. If you have read modern history, you would know that polio vaccinations infected more people than did the live virus. And the polio vaccination was intentionally loaded with contaminants according to the writings of Ed Haslam and Judyth Vary Baker.
I do not think this plan will work even if the elite can release another plague and successfully blame it on ISIS. Too many people know that ISIS is Al Qaeda of Iraq. It was trained, armed and funded by Obama. Edward Snowden told us that ISIS is run by the Mossad. Too many people inside the government will balk when they see engineered plagues killing their countrymen.
I would hope the military and others inside the government will say No.
Related Articles:
Video: The Sinaloa Mexican Drug Cartel Is A CIA Subsidiary
http://vidrebel.wordpress.com/2012/11/01/video-the-sinaloa-mexican-drug-cartel-is-a-cia-subsidary/
Screw Up: 8 Million Americans Are On The List To Be Disappeared
http://vidrebel.wordpress.com/2014/02/02/screw-up-8-million-americans-are-on-the-list-to-be-disappeared/
If ISIS is a Bomb, Israel is the Bombmaker
http://vidrebel.wordpress.com/2014/09/02/if-isis-is-a-bomb-israel-is-the-bombmaker/
Resurrecting Israel Did 911. All the Proof In The World
http://vidrebel.wordpress.com/2013/09/16/resurrecting-israel-did-911-all-the-proof-in-the-world/
This is the famous interview with Dr Jim Willie by Max Keiser

Systemic COLLAPSE as Fed Policy Causes Extreme Stock Market Moves!


S&P Warns: Athens Nearing Default, Again
Putin Rules Out Capital Controls as Russian Outflows Grow
For A Reminder Of What Inflation Does To Your Money, Check Out The ‘Cost Of Living’ In 1938
Q2 earnings is consistent with the rebound/slowdown recovery that has been the hallmark of the economic cycle following the financial crisis.
Jobs added by industry
Obama administration

Saudi Arabia's "Oil-Weapon" Hits Europe

Source: Zero Hedge


We first exposed the "secret" US-Saudi deal in September which led to the inevitable bombing of Syria. We then progressed to explain the quid pro quo of the deal in lower oil prices (benefiting US consumers into an election and crushing Russian revenues). In today's Wall Street Journal we get the final piece of the puzzle as it is clear that what Saudi Arabia loses in 'price' it will make up in 'volume' as The Kingdon is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude. Simply put, "they are threatening [European] buyers" to discontinue sales if they don't agree with the full fixed deliveries. The 'oil weapon' grows stronger...
As The Wall Street Journal explains,
Days after slashing prices in Asia, Saudi Arabia is now making an aggressive push in the European oil market, traders say.
The kingdom is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude.
“The Saudi push is not just in Asia. It’s a global phenomenon,” one oil trader said. “They are using very aggressive tactics” in Europe too, the trader added.
This month, state-owned Saudi Aramco stunned the rest of the Organization of the Petroleum Exporting Countries by slashing its November prices to defend its market share in Asia’s growing market. The move, setting a price war in the oil-production group, was combined with a boost in the kingdom’s output in September.
But Riyadh is also moving to protect its sales to Europe, a declining market where it is facing rivalry from returning Libyan production.
After cutting its November prices there, Saudi Aramco is also asking refiners to commit to full, fixed deliveries in talks to renew contracts for next year, the traders say. They say the Saudi oil company had previously offered a formula allowing flexibility of more or less 10% of contracted volumes, the most commonly used in the industry.
“They are threatening buyers” to discontinue sales if they don’t agree with the fixed deliveries, another trader said.
*  *  *
Of course, the more pressure ths US (prxied by Saudi Arabia) puts on Russia (and Iran) and implicitly Europe now (as they are forced to buy 'more' oil than needed, albeit at lower prices - but leaving their budgets bursting still further), the more the rest of the world is forced to consider alternatives to US hegemony and side with those that, for now, have not reached peak totalitarianism.

Oil Price War Throws the Fed into Crisis Mode

By Pam Martens and Russ Martens: October 13, 2014
OPEC Headquarters in Vienna, Austria
OPEC Headquarters in Vienna, Austria
It was only a matter of time until the evidence became irrefutable that the only way out of a global deflation on the order of the Great Depression was to address the fact that 571 U.S. billionaires simply don’t have enough hours in the day to spend adequate money to buy enough goods that would require the restocking of shelves, create new factory orders and thereby ramp up job hiring to keep a nation of 317 million people afloat.
A nation where the top 10 percent reaps more than 50 percent of the income is doomed to end up in the quicksand of deflation, dragging down the rich along with everyone else. The Federal Reserve’s timidity to address this reality since the crisis of 2008, as the national debt ballooned and its own balance sheet quadrupled, has now put it in a dire pickle at a most inopportune time.
The Fed has attempted to assure the world that things are so dandy here in the “Goldilocks economy” that its biggest focus is when it will raise interest rates to keep the economy from overheating and keep inflation in check. That thesis has been quite a bit of a stretch with 45.3 million of its fellow citizens living in poverty and a labor force participation rate of 62.7 percent – a data point that has been steadily getting worse since the financial crisis in 2008.
A key component that has allowed both the Fed and Congress to keep from taking strong measures to address a looming deflation has been the price of crude oil. Because oil impacts everything from transportation costs that inflate the price of food and other products to the cost of an airline ticket or heating a home, the high price of this commodity has, to a degree, masked the growing deflation threat.
Now the mask has been removed. Oil prices are in freefall and an oil price war has broken out among OPEC members, raising the specter of 1986 when oil prices fell by 50 percent in just an eight month span. A serious global slowdown has effectively turned the oil cartel, OPEC, into a beggar thy neighbor band of go-it-alone dealmakers who hope to sign individual contracts with customers and grab market share before prices decline further.
Earlier this month, Saudi Arabia’s state-owned oil company, Saudi Aramco, cut its official crude price by $1 a barrel for November deliveries to its Asian customers. It also dropped pricing by approximately 40 cents a barrel to U.S. and European customers. According to OPEC data, “Saudi Arabia possesses 18 per cent of the world’s proven petroleum reserves and ranks as the largest exporter of petroleum.” As the world learned in 1986, if Saudi Arabia wants to start a price war to assert its dominance, it has both the resources and production capability on its side.
According to a report from Bloomberg News, Iran is now offering oil discounts similar to Saudi Arabia. The situation is fraying nerves in countries dependent on oil revenues with Venezuela calling for an emergency OPEC meeting prior to its regular meeting slated for November 27.
Before the latest news of OPEC’s disarray sent oil prices plunging, the Fed was already expressing some concerns about the low rate of inflation. Its minutes for the Federal Open Market Committee (FOMC) meeting of September 16 – 17, 2014 included the following:
“Total U.S. consumer price inflation, as measured by the PCE [Personal Consumption Expenditures] price index, was about 1½ percent over the 12 months ending in July.  Over the 12 months ending in August, the consumer price index (CPI) rose about 1¾ percent…
“The staff continued to project inflation to be lower in the second half of this year than in the first half and to remain below the Committee’s longer-run objective of 2 percent over the next few years. With longer-term inflation expectations assumed to remain stable, resource slack projected to diminish slowly, and changes in commodity and import prices expected to be subdued, inflation was projected to rise gradually and to reach the Committee’s objective in the longer run.”
In other words, a sudden, sharp drop in inflation expectations caused by an oil price war raging around the globe was not present in the Fed’s crystal ball just a month ago. But it should have been: other commodity prices have been sending up red flags for some time now. As we reported on September 24, just one week after the Fed’s September meeting:
“Iron ore has now slumped 41 percent this year, marking a five-year low. In just the third quarter the price is off by 15 percent, suggesting the trend remains in place. This week the price broke $80 a dry ton for the first time since 2009.
“Agricultural commodity prices are also confirming the trend with corn off 22 percent since June and wheat down 16 percent in the same period. Soybean prices are down 28 percent this year to the lowest in four years.
“Deflationary winds blowing in from Europe, cooling economic growth in China, together with the question of just how disfigured the stock market has become as a result of $1.09 trillion propping up the S&P 500 through corporate buybacks in the last 18 months, all signal one word for the average investor: caution.”
Another key gauge of inflation expectations, the 10-year U.S. Treasury note, has been telling the market for some time that deflation was far greater a worry than inflation and that the Fed’s thesis of hiking interest rates next year had all the staying-power of a snow cone in July.
The 52-week high in the yield of the 10-year Treasury note was 3.06 percent. This morning, it is yielding 2.28 percent. That’s not the behavior of an interest-rate benchmark anticipating heated economic growth in the U.S. or an interest rate hike by the Fed.
The market has delivered epiphanies to the Fed on multiple fronts – some of them blazing with sirens – but the Fed seems to have had its head in the sand just as securely as it did heading into the 2008 crisis.
The problem for the Fed, which has already quadrupled its balance sheet to over $4 trillion to sustain a less than 2 percent inflation rate while keeping interest rates in the zero-bound range, is that its monetary arsenal loses its firing power with the onset of deflation, should it occur.
Deflation boosts the value of holding cash and deferring purchases. The thinking goes like this: the longer you wait to buy, the cheaper the house or product becomes, effectively raising the value of the cash you hold. Conversely, if you spend your cash prematurely, the product or investment you buy may lose future value as a result of the deflation, handing you a wealth loss. If enough people adopt that attitude and defer enough purchases, the deflationary spiral becomes self-reinforcing, as it did in the Great Depression.
Then there is the problem of the strong U.S. dollar. This hampers export growth for U.S. manufacturers because it costs more in local currencies to buy the product we are attempting to sell in foreign markets. A strong dollar can also accelerate deflationary trends by making foreign imports cheaper in the U.S. as a result of the increased purchasing power of our currency. This would further complicate the Fed’s ability to beat deflationary forces.
As Wall Street on Parade reported in December, the Fed prides itself on gathering intelligence from the marketplace, starting its day at 4:30 a.m. at the New York Fed and ending up around 6:30 p.m. with conference calls to the Federal Reserve Board of Governors in between. The growing fear is that the Fed is once again, like 2008, watching the market tick by tick but failing to see the larger, dangerous trends.
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China will use gold and gold pricing to force global currency reset

Gold inventories on the Comex
Gold inventories on the Comex
Courtesy of goldsilverworlds.com
On Sept. 30, statistician and economist Dr. Jim Willie was a guest on the Caravan to Midnight radio show to talk about current financial, economic, and geo-political events. During his three hour interview, Dr. Willie stated that one of the purposes behind China's creation of the new Shanghai gold exchange is to eventually take over global price controls for the monetary metal away from the Comex, and then force a global currency reset by raising the price of gold to its true or actual value.
The way this will come about in the near future according to Dr. Willie, is that China will re-price gold to near or above twice the current price, which will have a devastating effect on derivatives and ongoing use of the Comex futures market to suppress gold prices, and protect the dollar. And based upon supply details for the Comex over the past two years, America's primary gold exchange no longer settles their contracts through the delivery of physical gold, but instead settles in cash payments or through the hedging of gold using derivatives. Subsequently, once this failure to deliver takes place, then China, through the Shanghai gold exchange, will become the default market for price discovery, and at that point will re-adjust gold to its true value, instantly causing massive chaos in the fiat currency markets and leaving the world little alternative but to implement a complete currency reset.
Dr. Jim Willie: When we get this next global currency reset, it's going to be a complete reset. It apparently will happen predominantly in the gold world. They are going to change the price of gold, and jam it down the U.S.'s throat.
Take a look at the Comex. Since the middle of 2012 or so, they've been forcing gold contracts to settle not in metal, but in cash. And if you don't like it, they'll ban you from the Comex. There's been very little if any settlement of gold futures contracts for two years in gold metal. They're not a gold market anymore, they're a derivative market for gold instruments.
So, in late September... about a week ago, Shanghai started offering a gold and futures contract, and they're settling in metal. And this is rabidly threatening the United States and London. And interestingly, you will notice shortly after this new exchange opened there are now uprisings in Hong Kong.
But this is the final phase... the end game of the next reset. They are going to do this in Shanghai and with their global gold contracts, with the real big event that's going to create mass disruptions in the currency markets. And those disruptions will be from the Asians declaring what the gold price is, and with the Asians delivering and supplying physical metals at that gold price. - Caravan to Midnight, Sept. 30
Several economic analysts, including John Williams, Peter Schiff, Dr. Paul Craig Roberts, and Gerald Celente all gave predictions earlier this year that a global currency reset event was going to take place in 2014, with most believing it would come before the end of summer. However, with the U.S. not on board with the rest of the world, and instead seeking military conflicts to delay the end of the petro-dollar system, both Russia and China have had to accelerate their efforts to create infrastructures that will allow a more fluid transition for global trade once a currency reset actually takes place.
Over the past several weeks, the dollar has grown in strength at the same time the rest of the world's currencies have been collapsing. And because of this, global accumulation of physical gold at depressed levels is running at or near historic highs in an attempt to hedge sovereign currencies that have run out of muster from years of low interest rates and slow money velocities. And as several global financial indicators begin to reach a nexus, and threaten once again to bring the world into another economic crisis, China is recognizing that physical gold is the ultimate catalyst to force an end to the domination of purely fiat finance, and that by revaluing gold to its rightful price will have the effect of both protecting their own currency, and wresting financial control away from the West and the system of dollar hegemony.

Crimes and Hope | Ron Paul


Bankers caused crash & got away with it,says Carney: Bank of England chief says bosses should have paid higher price

  • Governor Mark Carney launches stinging attack on irresponsible bankers
  • Claims those responsible for 2008 financial crisis got away without sanction
  • Mr Carney: 'They are still on the best golf courses. That has got to change'

The Governor of the Bank of England last night launched a stinging attack on the bankers who caused the financial crisis and ‘got away without sanction’.
Mark Carney said the bosses of the banks behind the 2008 global financial crash should have paid a higher price for their errors.
Instead – despite facing limited social embarrassment – they were still on the ‘best golf courses’.
Speaking in Washington, Mr Carney said: ‘The individuals who ran the institutions got away with it. They got away with their compensation packages and without sanction.
‘Maybe they are no longer at the most esteemed table in society, but they are still on the best golf courses and that has got to change.’
Bank of England Governor Mark Carney (pictured) has told a Washington audience the bankers who caused the 2008 global financial crisis have 'got away without sanction'
Bank of England Governor Mark Carney (pictured) has told a Washington audience the bankers who caused the 2008 global financial crisis have 'got away without sanction'
During a panel discussion on financial ethics, Mr Carney made it clear he had no sympathy for board-level bankers who would not take personal responsibility for the actions of their organisations.
The Bank governor, who has been in Washington for a series of International Monetary Fund meetings, complained that the authorities had been unable to jail any of the bankers whose failings led to the global financial crisis.
His rebuke came as two senior executives of HSBC are poised to quit their jobs over new tough rules that would see ‘reckless’ financial executives facing jail for their actions or omissions in the event of a major failing by their bank.
But Mr Carney said such rules were necessary because the heads of banks during the crisis had got away with huge amounts of money without criminal sanction.
He made it clear he rejected the complaints of the HSBC board members without naming the pair or specifically referring to their bank.
While it was difficult to come up with acceptable compensation schemes and incentives, he said one thing that was vital to make the system safer was clearer personal responsibility. Curtailing financial rewards alone was not enough.
Two senior HSBC executives are poised to quit their jobs over tough new rules on 'reckless' bank actions
Two senior HSBC executives are poised to quit their jobs over tough new rules on 'reckless' bank actions
He said: ‘If you are the chairman or the head of the risk committee, you have a responsibility for the activities of that institution.
‘If you don’t think you can do it, you shouldn’t be on the board.’
The new regulation regime of senior managers is designed to make it easier to bring criminal charges in a future banking crisis. Mr Carney added: ‘It does focus the mind of directors and it should. I would like to think that the minds of directors are being focused. Some of them might not like it – that’s okay.’
It emerged last week that two HSBC executives are preparing to leave the bank amid concerns over the potential personal and criminal responsibility they would face in future.

TOP BOSSES' PAY SOARS AS STAFF FEEL SQUEEZE 

Directors at Britain’s biggest companies saw their average earnings rise by a fifth last year despite a nationwide wage squeeze.
Boardroom executives at FTSE 100 companies pocketed huge bonuses, according to a survey published today by pay research group Incomes Data Services (IDS).
These helped push their average total earnings to £2.4million – 21 per cent higher than last year. The staggering sum is almost 100 times higher than the average wage of £26,500 per annum. FTSE 100 chief executives now typically earn 120 times more than their full-time staff, the report said.
Critics said the findings showed a ‘huge gap’ in pay levels between boardrooms and ordinary workers. Most British staff have seen their pay lag behind inflation since the financial crash. The basic salary for most FTSE 100 directors rose last year by 2.5 per cent – just below the 2.8 per cent level of inflation at the time, the IDS report said. Top directors also enjoyed a 12 per cent rise in bonuses.
FTSE 100 chief executives – who are generally the highest paid in any organisation – receive an average basic salary of £832,000 and an average bonus of £1million. They also benefit from share payouts of around £2million.
Deborah Hargreaves from the High Pay Centre think-tank said: ‘There’s a huge gap opening up. We’ve seen workforce wages stagnating across the board, while chief executives’ remuneration continues to go up. ‘This is not healthy for our economy, our country or our society.’
Alan Thomson, who sits on the audit and risk committees of HSBC, has resigned and will leave the board of the bank’s UK subsidiary in January. John Trueman, its deputy chairman, is also preparing to resign.
Mr Carney has always taken a tough stance on personal responsibility and has a history of standing firm in the face of complaints from financial sector employees.
Meanwhile, the taxman has ramped up prosecutions against individuals suspected of tax dodging – but is still accused of letting corporate giants off the hook.
The number of court cases HMRC brought for illegal tax evasion rose last year by almost a third – from 612 to 795 – data from Thomson Reuters shows today.
It is not yet known how many were successful.
But it is claimed the taxman has done deals with Google that allow it to avoid paying millions in the UK.

Will the Fed Let the Stock Market Crash Before an Election?

by Charles Hugh-Smith
Anyone in their position with the tools at hand would not have any other real option other than to buy stocks in whatever quantity is needed to reverse the selling and blow the shorts out of the water.
Since I’m writing this on Sunday evening, if the Dow Jones Industrial Average opens down 1,000 on Monday morning, I’m going to look very foolish. Such is the risk of being contrarian. So what’s contrarian now–expecting a crash or expecting a bounce and rally?
Exactly what the sentiment consensus is right now is open to debate. Analysts expecting a stock market crash see those expecting a rebound as the consensus view.
But if we look at various measures of sentiment such as the Put-Call Ratio andgreedometer.com, we find elevated levels of fear over the past few weeks. The consensus can hardly be said to complacent when the VIX index is over 20.
Let’s set aside sentiment measures and technical analysis and ask a larger question: will the Fed let the stock market crash before an election? Once again we find two camps among participants. One camp believes markets still obey the basic rules of technical analysis. The Fed and other central banks may intervene at the margins, but their interventions only work on low-volume days. When selling increases, it overwhelms the relatively modest size of central bank intervention and the market then crash.
The other camp holds that all markets are now engineered, and intervention can reach essentially unlimited levels if the Powers That Be deem that necessary. I covered this view in Have We Reached a Financial Singularity? (September 4, 2014)
For context, let’s recall that the Fed conjured up $16 trillion to backstop global banks in the Global Financial Meltdown; (the Levy Institute came up with $29 trillion after poring over all the data):

To put $16 trillion in context, note that entire gross domestic product (GDP) of the U.S. is about $17.3 trillion, and all residential mortgages in the U.S. total about $10 trillion.
Long-time readers know that I see the Federal Reserve as an intrinsically political entity. Though it casts itself as an independent institution that’s above the political fray, this is simply good PR: the Fed is as political as any other institution of the central state.
What would happen to incumbents in the election a few weeks from now if the stock market crashes? The happy story–that all is well and you would be wise to re-elect the incumbents responsible for the economic good news–would be reduced to rubble.
One can only imagine the phone calls being made to Fed governors by politicos of both parties suggesting that it would be a terrible shame if all the hard work of those in power was destroyed by a needlessly destructive market crash.
We can also imagine similar calls being made to officials in the Bank of Japan, the European Central Bank, etc.
We know central banks are openly buying bonds and stocks, either directly or through proxies. What possible reason would the central banks have to suddenly reverse their interventions and stand aside right when the global markets are in meltdown?
Thus we can also imagine some conference calls being made this weekend to coordinate intervention on whatever scale is necessary.
If central banks have learned anything since 2008, it’s that waiting around for the panic to deepen is not a winning strategy.
We can also ponder the psychological consequences of the vast expansion of intervention. Where prior to 2008 the Fed and other central state players might have viewed $10 billion as a major intervention, what do you think whatever it takes is now? Do you really think $1 trillion would give those in charge pause? Since we’re talking about propping up a $160+ trillion edifice ($80 trillion of assets in the U.S. alone), what’s a trillion or two between pals?
Some observers think it bearish that no central bank has stepped up and announced a new easing program. I reckon the central banks have fully grasped that the public is now skeptical of PR campaigns, and so the smart move is to avoid public jawboning in favor of buying the assets directly, in whatever quantities are deemed necessary.
Put yourself in their shoes. Isn’t this what you would do, given the dearth of alternatives and the very real risks of implosion? Anyone in their position with the tools at hand would not have any other real option other than to buy stocks in whatever quantity is needed to reverse the selling and blow the shorts out of the water.
If $1 trillion doesn’t do the job, make it $3 trillion, or $5 trillion. At this point, it doesn’t really matter, does it?

U.S. and UK Test Big Bank Collapse – Risk Of Bail-ins

by GoldCore
Regulators from the U.S. and the UK are in a “war room” today to see if they can cope with any possible fall-out when the next big bank topples over, the two countries said on Friday according to Reuters.

Treasury Secretary Jack Lew and the UK’s Chancellor of the Exchequer, George Osborne, on Monday will run a joint exercise simulating how they would prop up a large bank with operations in both countries that has landed in trouble.
Also taking part are Federal Reserve Chair Janet Yellen and Bank of England Governor Mark Carney, and the heads of a large number of other regulators, in a meeting hosted by the U.S. Federal Deposit Insurance Corporation.
“We are going to make sure that we can handle an institution that previously would have been regarded as too big to fail. We’re confident that we now have choices that did not exist in the past,” Osborne said at the International Monetary Fund’s annual meeting.
Six years after the financial crisis, politicians and regulators around the globe are keen to prove they have created rules that will allow them to let a large bank go under without spending billions in taxpayer dollars.
They have forced banks to ramp up equity and debt capital buffers to protect taxpayers against losses, and have told them to write plans that lay out how they can go through ordinary bankruptcy. The plans are so-called living wills.
Yet salvaging a bank with operations in several countries – which is the norm for most of the world’s largest banks such as Deutsche Bank, Citigroup Inc and JPMorgan – has proven to be a particularly thorny issue.
Because the failure of a big bank is such a rare event, regulators may not be used to talking to each other. There have also been suspicions that supervisors would first look to save the domestic operations of a bank, and would worry less about units abroad.
The exercise comes as regulators are about to bring to fruition further initiatives to make banking safer.
The first would force banks to have more long-term bonds that investors know can lose their value during a crisis, on top of their equity capital, to double their so-called Total Loss-Absorbing Capacity (TLAC).
A second measure, expected to be announced this weekend, will force through a change in derivative contracts, which in their current form protect investors, and complicate the winding down of a bank across borders.

Gold in U.S. Dollars (Thomson Reuters)
It is now the case that in the event of bank failure, your deposits could be confiscated.
Let’s be crystal clear: The EU, UK, the U.S., Canada, Australia and New Zealand all have plans for bail-ins in the event of banks and other large financial institutions getting into difficulty.
Are your deposits safe?
Are you prepared for Bail-Ins?
Special Report on Bail-ins Here

GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,228.00, EUR 969.14 and GBP 763.82 per ounce.
Friday’s AM fix was USD 1,222.25, EUR 964.38 and GBP 761.01 per ounce.
Gold and silver both remained unchanged on Friday at $1,223.70 and $17.35. Last week, gold and silver both climbed 2.7% and 3.2%, respectively.

Silver in U.S. Dollars (Thomson Reuters)
Gold jumped sharply in the early Asian trading Monday as a safe haven bid came into the market. Gold in Singapore rose as high as $1,235 an ounce prior to concentrated selling in London pushed prices lower again. At the open in London, gold climbed to $1,237.30 an ounce, near a 4 week high, prior to selling saw gold fall back to $1,225/oz.
Last week gold bullion saw its largest weekly gain in 4 months as safe haven buying was seen due to concerns about the Eurozone and continuing ultra loose monetary policies.
Poor economic data from Europe, slow growth in China and concerns about Ebola have prompted investors to sell equities. Asian stocks stumbled to seven-month lows on today while crude oil prices were pinned near a four-year trough. Stocks in Dubai fell 6.5% on Sunday, the biggest drop in four months to bring the Dubai Financial Market General Index to its lowest level since July 20.
Gold is a proven hedging instrument and safe haven asset to riskier assets such as equities.
Last week the IMF cut its global economic forecast, and the U.S. Fed’s very dovish comments have made investors think that an interest rate hike is coming later than they expected.
Fed officials also expressed concern over the global economy, which could further delay a rise in U.S. interest rates.
Most notably, Fed Vice Chairman Stanley Fischer said the effort to normalise radical U.S. monetary policy after years of extraordinary stimulus may be hampered by the global outlook.
A delay in raising interest rates is positive for gold, a non-interest-bearing asset, and negative for the dollar and other interest yielding assets.
Today, Japanese markets are closed and the U.S. and Canada will be partially, or fully, shut for holidays as well.
Singapore launched physically-settled kilobar gold trading today or contracts for 25kg or 804 ounces each. Singapore has stated its intent to become an Asian gold hub with a goal of setting a regional benchmark price. The contract which expires tomorrow was priced at $39.685/gram at close of trade. The contracts trade at 830-1130 am Singapore time.