03.09.09
World Bank offers dire forecast for world economy
World Bank offers dire forecast for world economy
By Edmund L. Andrews, International Herald Tribune, 8 March 2009
In a bleaker assessment than those of most private forecasters, the World Bank predicted Sunday that the global economy would shrink in 2009 for the first time since World War II.
The bank did not provide a specific estimate, but bank officials said its economists would be publishing one in the next several weeks.
Until now, even extremely pessimistic forecasters have predicted that the global economy would eke out a tiny expansion but had warned that even a growth rate of 5 percent in China would be a disastrous slowdown, given the enormous pressure there to create jobs for the country’s rural population.
The World Bank also warned that global trade would contract for the first time since 1982, and that the decline would be the biggest since the 1930s. READ MORE…
01.20.09
Forrest Gump Explains The Banking Mess
Mortgage Backed Securities are like boxes of chocolates. Criminals on Wall Street stole a few chocolates from the boxes and replaced them with turds. Their criminal buddies at Standard & Poor rated these boxes AAA Investment Grade chocolates. These boxes were then sold all over the world to investors. Eventually somebody bites into a turd and discovers the crime. Suddenly nobody trusts American chocolates anymore worldwide.
Hank Paulson now wants the American taxpayers to buy up and hold all these boxes of turd-infested chocolates for $700 billion dollars until the market for turds returns to normal. Meanwhile, Hank’s buddies, the Wall Street criminals who stole all the good chocolates are not being investigated, arrested, or indicted.
Mama always said: ‘Sniff the chocolates first, Forrest’.
Quote of the day from a fund manager:
“This is worse than a divorce… I’ve lost half of my net worth and I still have my wife…”
The bailout–a different perspective:
Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it. They failed and it closed. Now we are trusting the economy of our country to a pack of nit-wits who couldn’t make money running a whore house and selling booze?
12.25.08
A Crisis of Dollars and Sense
Here is a terrific piece by an attorney who practices constitutional law. He has won three Supreme Court cases.
A Crisis of Dollars and Sense
Written by Edwin Vieira, Jr., TheNewAmerican.com
24 December 2008
The “dollar” bills that we routinely exchange for goods and services are not genuine constitutional dollars, but promissory notes substituting for the real thing.
Every day, millions of Americans receive and pay out what they think are “dollars.” Yet, in almost every instance, they are deceiving themselves. For the “one-dollar” (picture of George Washington on its face) Federal Reserve Note (FRN) that most everyone uncritically calls a “dollar” is not a “dollar” at all. No statute of the United States has ever declared that note to be a “dollar.” Neither could such a declaration ever be made. For each and every FRN, of whatever denomination, is only a “note” — a private bank’s promise to pay the holder a stated number of “dollars.” Self-evidently, a promise to pay some thing is not that thing itself.
Even the statute that authorizes the emission of FRNs requires that “They shall be redeemed in lawful money on demand at the Treasury Department … or at any Federal Reserve bank” (12 U.S.C. § 411) – which proves that FRNs are not themselves “lawful money.” Another statute does declare FRNs to be “legal tender for all debts, public charges, taxes, and dues” (31 U.S.C. § 5103). But FRNs would not have to be declared “legal tender” if they were actually “dollars.” Rather, the statutory designation “legal tender” recognizes that FRNs are not “dollars,” but may be used as substitutes for “dollars” with respect to any payment covered by the law.
Thus, amazing as it may seem, the present chaotic circumstances plaguing America’s financial markets have nothing to do with the true “dollar.” The markets’ derangement has arisen, over the course of decades, from the absence of the “dollar” in day-to-day economic transactions — indeed, from having the “dollar” supplanted as the American people’s official monetary unit so that hardly anyone anywhere in this country employs the “dollar” as his medium of exchange or standard of value. This has occurred because all too many Americans have simply forgotten, or have never learned, what a real “dollar” — a constitutional “dollar” — is.
The constitutional “dollar” is a specific silver coin — and nothing else. A “dollar” derives from the Spanish milled dollar, which was proposed as America’s monetary unit by Thomas Jefferson, adopted as such by the Continental Congress, and then designated the standard of value in the Constitution (Article I, Section 9, Clause 1) and the Bill of Rights (the Seventh Amendment). Its then-contemporary content — 371.25 grains (troy) of fine silver — was determined as an historical fact, and declared to be the value of America’s own “dollar,” in 1792. (For more information about the dollar referred to by the Constitution, click here to see “What’s a Dollar?”)
Because the Founding Fathers knew that real “money” consists of valuable commodities, they delegated to Congress the power “To coin Money, regulate the Value thereof, and of foreign Coin” (Article I, Section 8, Clause 5). And to promote national uniformity in official coinage, the Constitution declares that “No State shall … coin Money” (Article I, Section 10, Clause 1). So, the official “Money” of the United States is to be coin, and coin alone.
In the same clause, the Constitution also mandates that “No State shall … emit Bills of Credit” (the Founders’ term for paper currency) or “make any Thing but gold and silver Coin a Tender in Payment of Debts.” Often overlooked, though, is that the original draft of Article I, Section 8, Clause 2 of the Constitution empowered Congress “To borrow Money, and emit bills on the credit of the United States.” But, by a vote of nine states to two, the Federal Convention deleted the power to “emit bills” — so that Clause 2 now reads simply “To borrow Money on the credit of the United States.” Inasmuch as Congress has no powers other than those the Constitution delegates, this deletion absolutely deprives Congress of any power to “emit bills.” And if Congress cannot “emit bills” at all, it cannot emit “bills” with the special character of “legal tender,” either. Thus, the emission of every form of paper currency by the General Government is as utterly unconstitutional as the emission of paper currency by the states.
The reason for this sweeping prohibition was the Founders’ experiences with their own Continental Currency and state “bills of credit” during the War of Independence. The collapse of these “legal-tender” paper currencies disabused the Founders of the notion that a “bill of credit” is as good as the money in which it is denominated. In any particular case, such a promise may be honored, or may not be — but in every instance the conversion of promise into payment remains problematical until actual performance is had. Even less were the Founders subject to the modern delusion that a paper promise to pay (such as a Federal Reserve Note) not only can substitute for real money for a while, but even can supplant it permanently. Moreover, the Founders recognized that “bills of credit,” when expanded beyond the issuers’ ability or willingness to pay with silver or gold, were instruments capable of unjustly redistributing immense amounts of wealth from society to the issuers — a result at odds with the general welfare.
So how, constitutionally, is sound money to come into existence? In four ways:
(1) Congress must “coin Money,” particularly of silver (the constitutional “dollar”) and gold, so as to supply the “gold and silver Coin” which the states are required to “make … a Tender in Payment of Debts.” (See United States v. Marigold, 50 U.S. (9 Howard) 560, 567 (1850).) Congress may, of course, coin whatever silver and gold the General Government happens to own or acquire. But the greater source of official coins is to be through so-called “free coinage”: the requirement that the government mint coin, at the minimum possible (or even no) charge, whatever silver and gold private parties bring to them, the resulting coins then being spent into circulation by those parties. In this manner, ultimately the free market will determine the amount of official coinage in circulation.
(2) Congress must also “regulate the Value” of “foreign Coin.” This requires assigning to “foreign Coin” the value in “dollars” such coin has in the free market. (Thus, a “foreign Coin” containing 742.50 grains of fine silver would be “regulate[d in] Value” at “two dollars.” Or a “foreign Coin” containing 371.25 grains of fine gold, when the market exchange ratio between silver and gold is 20 to one, would be “regulate[d in] Value” at “20 dollars.”) Through this process, Congress could incorporate all of the present gold and silver coin of the entire world into the monetary system of the United States, with the passage of a single statute.
(3) Although coins minted or “regulate[d in] Value” by Congress are the only official “Money” of the United States, Congress may not prohibit any nonfraudulent forms of private coinage — whether of silver, gold, copper, or any other metal or alloy (see Amendments IX and X). Every American may use any of these media of exchange in his private transactions. Unfortunately, on the basis of a statute that purports to penalize anyone who “makes or utters or passes … any coins of gold or silver … of original design,” the Department of Justice is harassing at least one issuer of private coinage, the so-called “Liberty Dollar” (18 U.S.C. § 486). But, as applied to any honest private coinage, this statute is plainly unconstitutional.
(4) Private banks and other financial institutions may emit notes, and the holders of those notes may use them as media of exchange in private transactions — provided that the issuers: (i) make full disclosure to the general public as to what reserves or assets secure the notes, and how and when the notes may be redeemed; and (ii) suffer severe legal consequences if they fail to abide by their promises with respect to redemption.
Today, though, the monetary system with which Americans deal flouts the Constitution at every turn.
Being a paper currency, the FRN is a “bill of credit.” Worse, it is a discredited “bill.” For the “one-dollar” FRN does not promise to pay an actual constitutional “dollar” containing 371.25 grains of fine silver. A statute does require the FRN to be redeemed “in lawful money” (12 U.S.C. § 411); however, in practice, redemption yields not an actual “dollar,” but only base-metallic coinage containing no silver (or gold) whatsoever. In addition, the Department of the Treasury will not redeem a “one-dollar” FRN with, or exchange “one dollar” of base-metallic coinage for, a real “dollar,” either. Instead, the relevant statute provides that “A person lawfully holding United States coins and currency may present the coins and currency to the Secretary of the Treasury for exchange (dollar for dollar) for other United States coins and currency (other than gold and silver coins) that may be lawfully held” (31 U.S.C. § 5118(b)). And no one may sue the General Government on a claim “for United States coins or currency” or “arising out of the surrender, requisition, seizure, or acquisition of United States coins or currency, gold, or silver involving the metallic content of the dollar or in a regulation about the value of money” (31 U.S.C. § 5118(c)(1)). Meaning that, although a “one-dollar” FRN must be redeemed “in lawful money,” the medium of redemption will be whatever Congress — in defiance of its constitutional duty — wants it to be other than gold and silver coins, and notwithstanding that the thing used for redemption is worth far less in the marketplace than a “dollar” containing 371.25 grains of silver.
Yet, notwithstanding all of this chicanery — exacerbated by the “legal-tender” statute — no one is obliged always and under all circumstances to use FRNs in his private transactions. In addition to the Constitution (particularly Amendments IX and X), a statute entitles any American to use United States or foreign silver and gold coins to the absolute exclusion of FRNs (31 U.S.C. § 5118(d)(2)). Contracts for that purpose are often called “gold-clause contracts” because gold was the preferred medium of exchange when such arrangements originally became popular in the late 1800s. Congress outlawed “gold-clause contracts” in 1933, but permitted them once again in 1978. Since then, however, they have been only infrequently employed because almost all Americans have been unaware both of such contracts’ legality and of their usefulness for avoiding losses in monetary purchasing power due to inflation.
Such widespread popular ignorance evidences a shocking failure on the part of America’s political leadership, her educational establishment, and the big media because FRNs’ chronic loss of purchasing power — amounting to more than 90 percent since World War II — should hardly be unexpected, and the way to correct it hardly uncertain. FRNs are not backed “dollar”-for-”dollar” by silver or gold, but instead are issued on the supposed security of public and private debts. Each FRN is the product of an essentially magical process by which debt (a liability) is somehow monetized via the creation of money (an asset) out of thin air.
As if that were not enough, FRNs are the currency of a private banking cartel, the Federal Reserve System (FRS), which operates on the basis of so-called “fractional reserves.” Using “fractional reserves,” the Fed can expand the amount of currency and credit many times beyond the amount of public and private debts on which that currency and credit rests. The result is an inverted pyramid in which at the bottom a relatively small amount of debts, the real values of which are themselves uncertain, attempts to support at the top a much larger mass of currency and credit, the values of which depend upon the values of the debts. As long as this pyramid continues to expand, all appears well, because one “dollar’s” worth of debt at the bottom seems to prop up many “dollars’” worth of currency and credit at the top. Economic activity in society accelerates. But should enough of the debts prove bad, serious trouble follows — because each “dollar’s” worth of debt that must be written off at the bottom requires many “dollars’” worth of currency and credit to be extinguished at the top. Then the economy rapidly stagnates and sinks into recession, or even depression.
This “boom and bust” cycle inevitably and unavoidably occurs because bankers maximize their profits by transforming debts into currency and credit to the greatest extent possible. Thus, they have an incentive to make loans that are excessive in amount and only questionably secure. At some point a disjunction must occur between the speculations of the financial system and the physical realities of the productive system, bringing about an economic crisis.
To make matters worse, the Federal Reserve System is not a purely private banking cartel, but instead a cartel in which private banks are interlocked with the Treasury of the United States. Indeed, a statute designates the Treasury as the surety for redemption of FRNs “in lawful money” should the banks fail (12 U.S.C. § 411). This political-economic integration of bank and State renders the General Government, and through it the American people as a whole, hostages to the vicissitudes of fractional-reserve banking and allied speculative ventures in the world of high finance. This is why the present crisis in the financial markets threatens not only the solvency of the banks and their clients, but also the solvency of the Treasury, the credit of the United States, and ultimately the economic stability, if not the survival, of the whole country.
The severity of this crisis at the constitutional level can be gauged by observing that the Federal Reserve System is a cartel established by Congress for the purpose of self-regulation by its member banks, all of which are private parties, not governmental entities. When in 1933 Congress attempted to set up similar self-regulating cartel arrangements throughout private industry under the National Industrial Recovery Act, the Supreme Court held that “Such a delegation of legislative power is unknown to our law and is utterly inconsistent with the constitutional prerogatives and duties of Congress.” The illegal delegation involved allowing the industries themselves to set quotas on production and to fix prices for goods and services, with the force of law behind their actions, so that dissenting businessmen could be criminally charged for bucking the system. It was pure and simple “fascism” (in the economic sense of that term). (A.L.A. Schechter Poultry Corporation v. United States, 295 U.S. 495, 537 (1935).) The FRS escaped condemnation in the Schechter case because its purported authority arose, not from the National Industrial Recovery Act, but instead from the Federal Reserve Act of 1913, the unconstitutionality of which has evaded adjudication since its inception.
Self-evidently, the economic and legal chaos that has arisen throughout America’s economy by structuring this country’s monetary and banking systems on “a delegation of legislative power [that] is unknown to our law and is utterly inconsistent with the constitutional prerogatives and duties of Congress” dwarfs by many orders of magnitude the harm that such an illegal “delegation of legislative power” in the poultry (or any other) industry could cause. And it will become increasingly severe until the contradiction between what the Constitution mandates and what politicians and the banks have done in defiance of it is finally resolved in the Constitution’s favor.
How might that occur? The constitutionally correct course would be to return America to money that is sound because it is honest, and honest because it is the silver and gold “Coin” the Constitution commands the General Government and the states to employ in all of their financial transactions. This will require at least:
• First, reinstatement of the “dollar,” containing 371.25 grains of fine silver, as this country’s monetary unit, along with United States gold coins valued in “dollars” according to the free market’s exchange rate between the two metals, and foreign coins regulated in “dollar”-values according to their contents in silver and gold.
• Second, reestablishment of “free coinage” as the primary means for creating official coinage, along with complete allowance of all forms of nonfraudulent private coinage.
• Third, elimination of all “legal-tender” laws that license the unjust substitution of some unsound currency for sound money in the payment of any debt, tax, or other monetary obligation.
• Fourth, prohibition of all forms of paper currency (”bills of credit”) emitted, directly or indirectly, by the United States or any state — whether such currency is redeemable in silver and gold or not.
• Fifth, absolute separation of bank and state, such that no private bank can claim to exercise any delegated governmental power, or other abusive special privilege, with respect to money. And,
• Sixth, stringent regulation of all fractional-reserve and kindred financial practices in the private sector, so as to eliminate fraudulent expansion of debts and excessive speculation.
Bankers and their pet politicians, however, do not intend to allow America to follow the course her supreme law requires. When, in the near future, the FRS finally melts down in monetary chaos as the inevitable result of its own inherent instability, they will use its collapse as their excuse to introduce a new North American hemispheric paper currency — already being touted as the “Amero”; or perhaps even a new global paper currency — for which the name “Phoenix” has been predicted. But, to obtain the promised “stability” of this new currency, financially desperate Americans will be obliged to accept the transfer of their country’s sovereignty, in whole or significant part, to a North American Union or some new global political entity.
Thus, the present financial crisis goes beyond even a constitutional crisis. In addition, it is a crisis that strikes at the heart of the Declaration of Independence — a crisis of America’s national identity, national independence, national sovereignty, and even national survival. If Americans do not wake up and demand enforcement of constitutional money and banking — in particular, the reinstatement of the constitutional “dollar” as the monetary standard — America herself will be irretrievably doomed.
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What’s a Dollar?
Although the word “dollars” appears in the Constitution and the Bill of Rights, it is not defined there. Nonetheless, it must have referred specifically to something then in existence. But no “dollar” had been created by the Continental Congress prior to ratification of the Constitution. No “dollar” was created by the constitutional Congress coincident with ratification because that Congress had not yet been elected. And no “dollar” had been created by the constitutional Congress before the Bill of Rights was ratified.
The only possible referent of the word “dollars” was the silver “Spanish milled dollar,” which was actually being used as the money of account throughout the independent states at that time, and had been the standard for regulating the “value” — the metallic content — of foreign silver coins in the colonies since the early 1700s. To determine the value of this “dollar,” and thereby define the constitutional “dollar” as an historical fact, a representative sample of Spanish milled dollars then in circulation was subjected to chemical analysis. The Mint Act of 1792 incorporated the result in its definition of America’s “DOLLARS or UNITS” as “of the value of a Spanish milled dollar as the same is now current” — that is, the metallic content of a Spanish milled dollar accepted in the free market as containing a “dollar’s” worth of silver — which was determined to be 371.25 grains of that metal. (Act of 2 April 1792, ch. 16, § 9, 1 Stat. 246, 248.)
12.22.08
The Death of Deep Throat and the Crisis of Journalism
This is from a routine distribution from Stratfor strategic forecasters from their weekly Geopolitical Intelligence Report. These guys put out great stuff. Sign up for the weekly Geopolitical Intelligence Report at: Stratfor
Readers should consider the timely nature of this information, particularly considering the roles of media in the recent election, what is happening on the global economic stage, and the theme of this site.
The Death of Deep Throat and the Crisis of Journalism
By George Friedman, Stratfor
22 December 2008
Mark Felt died last week at the age of 95. For those who don’t recognize that name, Felt was the “Deep Throat” of Watergate fame. It was Felt who provided Bob Woodward and Carl Bernstein of The Washington Post with a flow of leaks about what had happened, how it happened and where to look for further corroboration on the break-in, the cover-up, and the financing of wrongdoing in the Nixon administration. Woodward and Bernstein’s exposé of Watergate has been seen as a high point of journalism, and their unwillingness to reveal Felt’s identity until he revealed it himself three years ago has been seen as symbolic of the moral rectitude demanded of journalists.
In reality, the revelation of who Felt was raised serious questions about the accomplishments of Woodward and Bernstein, the actual price we all pay for journalistic ethics, and how for many years we did not know a critical dimension of the Watergate crisis. At a time when newspapers are in financial crisis and journalism is facing serious existential issues, Watergate always has been held up as a symbol of what journalism means for a democracy, revealing truths that others were unwilling to uncover and grapple with. There is truth to this vision of journalism, but there is also a deep ambiguity, all built around Felt’s role. This is therefore not an excursion into ancient history, but a consideration of two things. The first is how journalists become tools of various factions in political disputes. The second is the relationship between security and intelligence organizations and governments in a Democratic society.
Watergate was about the break-in at the Democratic National Committee headquarters in Washington. The break-in was carried out by a group of former CIA operatives controlled by individuals leading back to the White House. It was never proven that then-U.S. President Richard Nixon knew of the break-in, but we find it difficult to imagine that he didn’t. In any case, the issue went beyond the break-in. It went to the cover-up of the break-in and, more importantly, to the uses of money that financed the break-in and other activities. Numerous aides, including the attorney general of the United States, went to prison. Woodward and Bernstein, and their newspaper, The Washington Post, aggressively pursued the story from the summer of 1972 until Nixon’s resignation. The episode has been seen as one of journalism’s finest moments. It may have been, but that cannot be concluded until we consider Deep Throat more carefully.
Deep Throat Reconsidered
Mark Felt was deputy associate director of the FBI (No. 3 in bureau hierarchy) in May 1972, when longtime FBI Director J. Edgar Hoover died. Upon Hoover’s death, Felt was second to Clyde Tolson, the longtime deputy and close friend to Hoover who by then was in failing health himself. Days after Hoover’s death, Tolson left the bureau.
Felt expected to be named Hoover’s successor, but Nixon passed him over, appointing L. Patrick Gray instead. In selecting Gray, Nixon was reaching outside the FBI for the first time in the 48 years since Hoover had taken over. But while Gray was formally acting director, the Senate never confirmed him, and as an outsider, he never really took effective control of the FBI. In a practical sense, Felt was in operational control of the FBI from the break-in at the Watergate in August 1972 until June 1973.
Nixon’s motives in appointing Gray certainly involved increasing his control of the FBI, but several presidents before him had wanted this, too, including John F. Kennedy and Lyndon Johnson. Both of these presidents wanted Hoover gone for the same reason they were afraid to remove him: He knew too much. In Washington, as in every capital, knowing the weaknesses of powerful people is itself power — and Hoover made it a point to know the weaknesses of everyone. He also made it a point to be useful to the powerful, increasing his overall value and his knowledge of the vulnerabilities of the powerful.
Hoover’s death achieved what Kennedy and Johnson couldn’t do. Nixon had no intention of allowing the FBI to continue as a self-enclosed organization outside the control of the presidency and everyone else. Thus, the idea that Mark Felt, a man completely loyal to Hoover and his legacy, would be selected to succeed Hoover is in retrospect the most unlikely outcome imaginable.
Felt saw Gray’s selection as an unwelcome politicization of the FBI (by placing it under direct presidential control), an assault on the traditions created by Hoover and an insult to his memory, and a massive personal disappointment. Felt was thus a disgruntled employee at the highest level. He was also a senior official in an organization that traditionally had protected its interests in predictable ways. (By then formally the No. 2 figure in FBI, Felt effectively controlled the agency given Gray’s inexperience and outsider status.) The FBI identified its enemies, then used its vast knowledge of its enemies’ wrongdoings in press leaks designed to be as devastating as possible. While carefully hiding the source of the information, it then watched the victim — who was usually guilty as sin — crumble. Felt, who himself was later convicted and pardoned for illegal wiretaps and break-ins, was not nearly as appalled by Nixon’s crimes as by Ni xon’s decision to pass him over as head of the FBI. He merely set Hoover’s playbook in motion.
Woodward and Bernstein were on the city desk of The Washington Post at the time. They were young (29 and 28), inexperienced and hungry. We do not know why Felt decided to use them as his conduit for leaks, but we would guess he sought these three characteristics — as well as a newspaper with sufficient gravitas to gain notice. Felt obviously knew the two had been assigned to a local burglary, and he decided to leak what he knew to lead them where he wanted them to go. He used his knowledge to guide, and therefore control, their investigation.
Systematic Spying on the President
And now we come to the major point. For Felt to have been able to guide and control the young reporters’ investigation, he needed to know a great deal of what the White House had done, going back quite far. He could not possibly have known all this simply through his personal investigations. His knowledge covered too many people, too many operations, and too much money in too many places simply to have been the product of one of his side hobbies. The only way Felt could have the knowledge he did was if the FBI had been systematically spying on the White House, on the Committee to Re-elect the President and on all of the other elements involved in Watergate. Felt was not simply feeding information to Woodward and Bernstein; he was using the intelligence product emanating from a section of the FBI to shape The Washington Post’s coverage.
Instead of passing what he knew to professional prosecutors at the Justice Department — or if he did not trust them, to the House Judiciary Committee charged with investigating presidential wrongdoing — Felt chose to leak the information to The Washington Post. He bet, or knew, that Post editor Ben Bradlee would allow Woodward and Bernstein to play the role Felt had selected for them. Woodward, Bernstein and Bradlee all knew who Deep Throat was. They worked with the operational head of the FBI to destroy Nixon, and then protected Felt and the FBI until Felt came forward.
In our view, Nixon was as guilty as sin of more things than were ever proven. Nevertheless, there is another side to this story. The FBI was carrying out espionage against the president of the United States, not for any later prosecution of Nixon for a specific crime (the spying had to have been going on well before the break-in), but to increase the FBI’s control over Nixon. Woodward, Bernstein and above all, Bradlee, knew what was going on. Woodward and Bernstein might have been young and naive, but Bradlee was an old Washington hand who knew exactly who Felt was, knew the FBI playbook and understood that Felt could not have played the role he did without a focused FBI operation against the president. Bradlee knew perfectly well that Woodward and Bernstein were not breaking the story, but were having it spoon-fed to them by a master. He knew that the president of the United States, guilty or not, was being destroyed by Hoover’s jilted heir.
This was enormously important news. The Washington Post decided not to report it. The story of Deep Throat was well-known, but what lurked behind the identity of Deep Throat was not. This was not a lone whistle-blower being protected by a courageous news organization; rather, it was a news organization being used by the FBI against the president, and a news organization that knew perfectly well that it was being used against the president. Protecting Deep Throat concealed not only an individual, but also the story of the FBI’s role in destroying Nixon.
Again, Nixon’s guilt is not in question. And the argument can be made that given John Mitchell’s control of the Justice Department, Felt thought that going through channels was impossible (although the FBI was more intimidating to Mitchell than the other way around). But the fact remains that Deep Throat was the heir apparent to Hoover — a man not averse to breaking the law in covert operations — and Deep Throat clearly was drawing on broader resources in the FBI, resources that had to have been in place before Hoover’s death and continued operating afterward.
Burying a Story to Get a Story
Until Felt came forward in 2005, not only were these things unknown, but The Washington Post was protecting them. Admittedly, the Post was in a difficult position. Without Felt’s help, it would not have gotten the story. But the terms Felt set required that a huge piece of the story not be told. The Washington Post created a morality play about an out-of-control government brought to heel by two young, enterprising journalists and a courageous newspaper. That simply wasn’t what happened. Instead, it was about the FBI using The Washington Post to leak information to destroy the president, and The Washington Post willingly serving as the conduit for that information while withholding an essential dimension of the story by concealing Deep Throat’s identity.
Journalists have celebrated the Post’s role in bringing down the president for a generation. Even after the revelation of Deep Throat’s identity in 2005, there was no serious soul-searching on the omission from the historical record. Without understanding the role played by Felt and the FBI in bringing Nixon down, Watergate cannot be understood completely. Woodward, Bernstein and Bradlee were willingly used by Felt to destroy Nixon. The three acknowledged a secret source, but they did not reveal that the secret source was in operational control of the FBI. They did not reveal that the FBI was passing on the fruits of surveillance of the White House. They did not reveal the genesis of the fall of Nixon. They accepted the accolades while withholding an extraordinarily important fact, elevating their own role in the episode while distorting the actual dynamic of Nixon’s fall.
Absent any widespread reconsideration of the Post’s actions during Watergate in the three years since Felt’s identity became known, the press in Washington continues to serve as a conduit for leaks of secret information. They publish this information while protecting the leakers, and therefore the leakers’ motives. Rather than being a venue for the neutral reporting of events, journalism thus becomes the arena in which political power plays are executed. What appears to be enterprising journalism is in fact a symbiotic relationship between journalists and government factions. It may be the best path journalists have for acquiring secrets, but it creates a very partial record of events — especially since the origin of a leak frequently is much more important to the public than the leak itself.
The Felt experience is part of an ongoing story in which journalists’ guarantees of anonymity to sources allow leakers to control the news process. Protecting Deep Throat’s identity kept us from understanding the full dynamic of Watergate. We did not know that Deep Throat was running the FBI, we did not know the FBI was conducting surveillance on the White House, and we did not know that the Watergate scandal emerged not by dint of enterprising journalism, but because Felt had selected Woodward and Bernstein as his vehicle to bring Nixon down. And we did not know that the editor of The Washington Post allowed this to happen. We had a profoundly defective picture of the situation, as defective as the idea that Bob Woodward looks like Robert Redford.
Finding the truth of events containing secrets is always difficult, as we know all too well. There is no simple solution to this quandary. In intelligence, we dream of the well-placed source who will reveal important things to us. But we also are aware that the information provided is only the beginning of the story. The rest of the story involves the source’s motivation, and frequently that motivation is more important than the information provided. Understanding a source’s motivation is essential both to good intelligence and to journalism. In this case, keeping secret the source kept an entire — and critical — dimension of Watergate hidden for a generation. Whatever crimes Nixon committed, the FBI had spied on the president and leaked what it knew to The Washington Post in order to destroy him. The editor of The Washington Post knew that, as did Woodward and Bernstein. We do not begrudge them their prizes and accolades, but it would have been useful to know who handed them the story. In many ways, that story is as interesting as the one about all the president’s men.
11.25.08
Russian Financial Analyst Predicts Decline And Breakup Of U.S.–Aknowledges ‘Secret’ Amero Agreement
From Russian News & Information Agency–Novosti, 24 November 2008: http://en.rian.ru/world/20081124/118512713.html
MOSCOW, November 24 (RIA Novosti) – A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.
Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: “The dollar is not secured by anything. The country’s foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse.”
The paper said Panarin’s dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year’s events.
When asked when the U.S. economy would collapse, Panarin said: “It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world’s financial regulator.”
When asked who would replace the U.S. in regulating world markets, he said: “Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia.”
Asked why he expected the U.S. to break up into separate parts, he said: “A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles.”
He also cited the “vulnerable political setup”, “lack of unified national laws”, and “divisions among the elite, which have become clear in these crisis conditions.”
He predicted that the U.S. will break up into six parts – the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.
He even suggested that “we could claim Alaska – it was only granted on lease, after all.”
On the fate of the U.S. dollar, he said: “In 2006 a secret agreement was reached between Canada, Mexico and the U.S. on a common Amero currency as a new monetary unit. This could signal preparations to replace the dollar. The one-hundred dollar bills that have flooded the world could be simply frozen. Under the pretext, let’s say, that terrorists are forging them and they need to be checked.”
When asked how Russia should react to his vision of the future, Panarin said: “Develop the ruble as a regional currency. Create a fully functioning oil exchange, trading in rubles… We must break the strings tying us to the financial Titanic, which in my view will soon sink.”
Panarin, 60, is a professor at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, and has authored several books on information warfare.
11.18.08
Paulson Appears To Announce Nationalization of Banks
In a Nov 18 story by one of its economic writers, AP identified an about face by Treasury Secretary Paulson from the previous, highly criticized “no-strings” infusion of cash to the U.S. banking industry, to a nationalistic buy in.
Many conservative financial analysts, particularly FOX’s Neil Cavuto, hammered away at the notion of free money with no conditions. With AIG executives romping around posh resorts and chicken-counting mortgage banks allegedly planning to squat on the fresh green, Paulson and Bernanke pivoted to a seemingly more sinister position–U.S. Government ownership in the banking private sector.
Jeannine Aversa’s (AP) report quoted the New York Post, New York Times and Paulson:
In a profile published Tuesday in The Washington Post, Paulson, who is overseeing the bailout program for the Bush administration, said he was also working on a proposal that would allow the government to take over a wide range of financial institutions — not just banks — that are in danger of collapse.
Last week, Paulson changed course and announced that the government would not use any of the $700 billion to buy rotten mortgages and other bad assets from banks. That had been the centerpiece of the plan when Paulson and Bernanke originally pitched it to lawmakers.
“Our assessment … is that this is not the most effective way” to use the bailout money, Paulson said at that time.
In an op-ed published Tuesday in The New York Times, Paulson wrote: “If we have learned anything throughout this year, we have learned that this financial crisis is unpredictable and difficult to counteract. We decided it was prudent to reserve our (Troubled Asset Relief Program) money, maintaining not only our flexibility, but also that of the next administration.”
Still, Paulson said that “recovery will happen much, much faster than it would have had we not used TARP to stabilize our system.”
Paulson said last week the department would focus on rolling out a capital injection program to pour $250 billion into banks in return for partial ownership stakes in them. In the Times on Tuesday, he explained that “stronger capitalization is essential to increasing lending, which is vital to economic recovery.”
As conservatives pushed the “socialist” button pre-election, liberals retorted, “what do you call this Republican bank bailout?” Perhaps Paulson decided it was time to show the world what’s in the bag.
Editor’s note: AmeroCurrency.com has been warning for almost three years, the wisest exercise in a government imposing a desired major change on a population is convincing the population to beg for it. The problem the population faces is designed to suit the “solution” the power wants to impose.
If the Alan Greenspans and the Barney Franks’ of the world didn’t see this (these) mess coming, they were either inept or complicit. The, supposed, smartest minds in the country drove our economy into the ground, and their first solution as the “problem” revealed itself was to dilute our currency. Now, the answer appears to be, dilute the currency and let the government in on ownership of the banks.
Buyer beware.
