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Jim Willie: Oil Being Sold In Rubles

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Update From Jim Willie

September 22, 2014 by Perpetual Assets

​The Game Is On, Sale Of Russian Oil In Rubles, Expect Ruble Strength Soon, Next Should Come Exchanges To Set Oil Price In Rubles, This Is A Major Petdo-Dollar Demise Step, Initial Gazprom Neft Transactions To Europe Have Begun, The Payments In Rubles… Two Transactions Have Been Completed… The Russians Will Probably Roll Out Other Vendors For The Same Ruble Payment, Since The Test Case Has Worked With Success… Next Comes Exchanges To Set The Crude Oil Price In Rubles… The Petro-Dollar Is Dying.

Jaroslav in St Petersburg Russia has supplied some high important information. The following is from him, with my edits for readability and flow.

The information uses quoted comments from Alexander Dyukov, the head of Gazprom Neft (Gazprom Oil). Almost all their clients for crude oil and petroleum products have signed agreements to pay in Rubles. A few have been permitted from certain points to make payments in Euro currency. As for Novoport, this project has already begun delivery for Ruble currency, and ongoing oil deliveries from the field will be in Rubles.

Also, from this time, the deliveries to the Asian market are to be completed in Yuan currency. The USDollar is a global liquid currency, and the transition into any other currency is a certain chore with risks and costs. “They see a potentially large amount of crude oil and oil products which could be realized in USD settlement. They require conversion into Rubles, to be done with as minimal risk and as simple as possible.” He was clear that Russia should consider creating its own price agency and exchanges that set quoted oil prices in Rubles.

This function would help to facilitate global access to the Ruble, which in turn would increase the volume of oil and petroleum products sold in Rubles and Yuan.In update, Gazprom Neft has sent the second oil tanker for settlement in Rubles. The oil was produced at the Novoportovskoye field on the Yamal Peninsula. It contained crude oil in the amount of 27.2 thousand tons, delivered on September 17th to North Western Europe.

New oil is called Novy Port, its quality characteristics, including low sulfur content exceeds the benchmark grade of Brent. They are currently preparing for shipment of a third tanker. One should conclude that Oil for Rubles is a done deal. Soon other Russian companies will join in, for conducting large sales in Rubles, and possibly Yuan, possibly outside the energy sector. The Jackass adds that the Ruble currency will strengthen considerably. One can hope that the London and Wall Street market rig specialists will experience a vast backfire with heavy losses at their desks and in their faces.

 

Oil Being Sold in Rubles

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Written by testudoetlepus

September 22nd, 2014 at 8:10 pm

David Morgan: A Run to Silver and Gold Unlike Anything in History of Mankind

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By Greg Hunter’s USAWatchDog

Silver guru, David Morgan, says forget about the manipulated price suppression of the yellow and white metals. It’s only a matter of time before the debt and derivative markets crash, catapulting precious metals prices exponentially higher. Morgan explains, “The bigger problem all exists in the debt markets, and the debt markets is where the problem is really. When that problem blows up, there’s going to be a run to gold unlike anything in the history of mankind. . . . The spillover into silver will be phenomenal, as well, because once it (debt markets) starts down, everyone that understands what’s going on, which will be very few, will be running to gold. They will try to get gold in any form that they can, and again, a huge spillover into the silver market. All of a sudden, even at the retail level, and at the wholesale level or commercial level, or the futures market or bar level—it’s over. A big ETF type or silver holding company will call up and say I want to buy $50 million of silver, or $150 million or $200 million, which is peanuts compared to the bond market. . . . The answer is going to be ‘we don’t have it.’ When that happens, it’s over.”

Morgan goes on to say, “These types of events are anomalies. . . . Few people see them coming, and with the silver price being so low the last three years, a lot of people who once believed us are going to say that these guys just can’t be right. The paper manipulators are going to keep prices under control forever, but they won’t. It will be an event that will be unlike anything we have seen.”

On the recent strength of the U.S. dollar, Morgan says, “John Exter’s upside down pyramid explains it very well. The derivative markets blow up, and you go down the pyramid of liquidity. The step above the run to gold is the U.S. dollar. Most people who are under educated about money think if you have physical dollars under your mattress, you are in the safest position you could possibly be in. If you have all of your savings in physical greenback, you don’t have to worry about a bank failure. That is the most important step until that doesn’t work. When that doesn’t work, faith in the dollar is lost or being lost, then where do you go? The answer is you go to money that has lasted for 5,000 years. So, to see the dollar have all this strength and look good, that’s just the step before you go to the last step, which is a run to gold. So, it (the strength of the dollar) doesn’t surprise me. It’s part of the process . . . and the run to the dollar is a precursor that is absolutely necessary before the next step down the pyramid. . . . This is the big picture, and I see how things narrow down and why precious metals are so important in today’s financial system.”

Morgan admits that his low of $18.17 silver did not hold and now thinks that the next “price spike” for silver “will be going lower.” Morgan explains, “This means we would get a spike down of maybe a dollar or something like that, from $18 to $17 or maybe even in the $16 range. I think that would be a spike that would be a dramatic drop. . . . It would be primarily a paper driven situation, and it would take place in a short duration.” Morgan goes on to predict, “Silver will be back in the $20 per ounce range, and the high $1,300 per ounce range for gold by the end of the year. That just presupposes that the system, as it is, continues, and the paper markets continue, and the derivative markets continue, and the powers that be are able to manage this price as they see fit with the derivatives. In the event that something happens, that whole scenario could go away very, very rapidly. That’s why you really want to be 6 months too early than 6 minutes too late.”

After the Interview:
Morgan puts lots of free information and articles on his site. If you want to check out his analysis, please go to Silver Investor.

 

A Run to Silver and Gold unlike Anything in History of Mankind-David Morgan

Greg Hunter

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Written by testudoetlepus

September 22nd, 2014 at 2:44 pm

Barbarism Versus Stupidism

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by James Howard Kunstler

In my lifetime, the USA has not blundered into a more incoherent, feckless, and unfavorable foreign policy quandary than we see today.

The US-led campaign to tilt Ukraine to Euroland and NATO — and away from the Russian-led Eurasian Customs Union — turned an “intelligence” fiasco into a strategic humiliation for the Obama White House. Notice that the story has vamoosed utterly from the American media headlines, even when the Russian Engineers’ Union issued a report last week asserting that the Malaysian Airlines Flight MH17 was most likely shot down by 30mm cannon fire from Ukrainian military aircraft. The USA State Department didn’t deign to refute it because doing so would have drawn attention to the fact that it was the only plausible explanation for what happened.

Likewise, the campaign to paint Vladimir Putin as Stalin-in-a-judo-robe never really reached take-off velocity, since by all appearances he was the most rational and cool-headed actor on the geopolitical stage, following logical and long-established national interests. If the West had just left Ukraine alone, and allowed it to join the Eurasian Customs Union, that basket-case nation would have been Russia’s economic ward. Now the US and the EU have to support it with billions in loans that will never be paid back. Meanwhile, our European allies have been snookered into a set of economic and financial sanctions against Russia that guarantees they’ll be starved for oil and gas supplies in the winter months ahead. Smooth move.

So, the reason that all this has vanished from the news media is that it’s game-over in Ukraine. We busted it up, and can do more with it, and pretty soon the rump Ukraine region run out of Kiev will go crawling back to Russia begging for a little heating fuel.

Does any tattoo-free American adult outside the Kardashian-NFL mass hypnosis matrix feel confident about the trajectory of US policy regarding the so-called Islamic State (ISIS, ISIL)? First, there is the astonishing humiliation that this ragtag band of psychopaths managed to undo ten years, 4,500 US battle deaths, and $1+ trillion worth of nation-building effort in Iraq in a matter of a few weeks this summer. The US public does not seem to have groked the damage to our honor, self-confidence, and international standing in this debacle.

So, now we’re going to just deal “death from above” on the Black Flaggers across that stretch of their captured territory that runs from Iraq into Syria — violating Syria’s sovereignty in the process, of course. My guess is that such an operation will inspire them to bring the action straight to Europe, the USA, and the grand prize, Saudi Arabia. The movement is too broad now, includes too many psychopaths from all over the world (Europe especially) who hold passports that will enable them to travel easily out of the Middle East and export mayhem wherever they want to bring it.

The USA is stuck within so many pathways of systems criticality in this fall of 2014, that is sure to be expressed in our own internal politics very soon. We’re all set up for a classic state of siege with the Pentagon militarizing every Podunk police department in the land, and one can easily imagine a single IS operation aimed at some soft American target shoving us into hysteria.

While all this is happening, of course, Wall Street and its hand-maidens rev up the engines of malinvestment and bid up false values of things that will do nothing to get us safely into the economy of real things that awaits us. That economy of real things I speak of does not include many of the comforts and conveniences we’re used to — mass motoring, national chain retail, air-conditioning for all, 24/7 electric service — but it’s where we’re going. As reality drags us kicking and screaming toward it, the likelihood of a domestic political convulsion increases. We’ll look back on these weirdly placid years after the 2008 train wreck with amazement. These are the rudderless years of no leadership, of cowardly dissimulating midgets. A people can only take so much of that.

Finance is the weakest link in the chain of systems that allows us to run the old economy. It’s the system most abstracted from reality and the most easily manipulated into ever-greater abstraction. Hence it’s the system most easily subject to fatal slippage. And all it takes to set off the slipping is a simple loss of faith.

 

 

I will be reading, yakking, and mixing with the home folks at the Northshire Book Shop
in Saratoga Springs, New York, this coming Friday September 19 at 7:00 pm

The new World Made By Hand novel
!! Is now available !!

Kunstler skewers everything from kitsch to greed, prejudice, bloodshed, and brainwashing in this wily, funny, rip-roaring, and profoundly provocative page- turner, leaving no doubt that the prescriptive yet devilishly satiric A World Made by Hand series will continue.” — Booklist

HistoryoftheFuture_Thumb

My local indie booksellers… Battenkill Books (Autographed by the Author) … or Northshire Books
or Amazon

Also: Published as an E-book for the first time!
The 20th Anniversary edition
With an entertaining new introduction by the author

GON_thumb

Bargain Price $3.99

Amazon Kindle …or … Barnes & Noble Nook …or… Kobo

 

[James Howard Kunstler]

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Written by testudoetlepus

September 22nd, 2014 at 2:03 pm

Jim Willie: The Crash Heard Round the World, Saudis to Reject USD for Oil Payments

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Putin kicked out the Rothschild bankers from his country. Putin interrupted the USGovt heroin trade supply routes out of Afghanistan. Like Abraham Lincoln 150 years ago, the elite banker chambers wish to remove Putin and to suppress Russia, but the sprawling nation has joined at the hip with China. Thus Russia cannot be isolated any more than a bear can be bear hugged. The nation spans 12 time zones and is a top supplier of numerous important commodities. The Russia & China bond is growing and will result in a marriage, the consummation being a baby called the Gold Trade Standard. The King Dollar is being displaced, kicked off its throne. Its squire the Petro-Dollar is undergoing demise. The Ukraine War is the USDollar Waterloo event. The Saudi rejection of the USD in exclusive oil payments will be the crash heard around the world. The marriage between the Saudis and Chinese is a process well along, with each month featuring yet another high level conference. The Saudis will make the announcement in the coming weeks or months, as a genuflection before the Chinese, with a hat tip to the Russians. Soon the crude oil price will be set by the Russia-China tag team, priced in Yuan. When the Gold Trade Standard is entrenched, the diversification away from USTreasurys in the global banking system will become a torrent. Bank system practices will follow trade payment practices. When installed, it will cause prosperity in the East and havoc in the West.
The Crash Heard Round the World is coming. The USDollar will be rejected, and replaced by the Gold Trade Standard.

 

By Jim Willie, GoldenJackass.com
September 21, 2014

Economic Dollar Collapse

The byline should read MONEY VELOCITY HITS RECORD LOW, WHILE MONEY SUPPLY CONTINUES TO GO INTO ORBIT… SYSTEMIC FAILURE IS EVIDENT AS POLICY IS NOT STIMULUS AT ALL… THE PRINCIPAL CAUSE FOR THE BREAKDOWN IS MONETARY POLICY, WHICH IS STUCK IN PLACE.

The USFed monetary policy is killing the system, simply and boldly put. They call it stimulus, when the extreme accommodation is actually just a backdoor Wall Street bailout combined with a pass on the USGovt debt discipline. No debt limit is enforced anymore, a travesty. The United States is looking more like a Third World nation with each passing month, with colossal fraud, economic decay, war and sanctions, and no leadership. The US Federal Reserve has ventured into very dangerous ground, putting hyper monetary inflation as the installed policy, while making money free for the Interest Rate Swap machinery that operates the derivative for maintaining the easy policy. So foreign creditors have largely exited the room, with no great entities to finance the yawning annual $trillion debt. So derivative machinery is relied upon to maintain the absurd 10-year USTreasury (TNX) yield at 2.60% without buyers. So asset markets like the US Stock Market go to monthly new high levels, despite the USEconomy mired in the worst recession since the Great Depression. The visible piece is shopping malls with one third of stores shuttered, and the jobless rate over 22% in the real world without rose colored glasses. These conditions cannot be sustained, especially since the credit machinery is all jammed. The big US banks are insolvent structures dedicated to the bond carry trade, where that same cheap money is used to invest, often with leverage, in the long-dated maturity USTreasury Bonds. The banks serve the casino, not the business sector.

STUCK MONETARY POLICY

In no way can the current easy money policy be reversed, and put into a normal mode. In no way can the accommodation be tapered. The entire Taper Talk is a lie, and always has been a lie. The Jackass called out the USFed last June and July, and was proved correct by September. Since that time, the USFed has been lying vigorously and creatively. The Belgium Bulge showed itself as a $400+ billion abscess visible to the world, hardly a real savings account by the small nation. It was either a Hidey Hole for USTBonds or else a loading depot for BRICS sourcing of Gold bullion for their upcoming central bank. In no way can the enormous bond carry trades be stopped. They are the only source of actual income for the big US banks. Their other source of narco funds money laundering. Doing so would put the carry trade engines into reverse, forcing an unwanted Bond Convexity episode of leveraged selling of USTreasury Bonds by the same large corrupted banks which are so clearly involved in the derivatives game. In no way can the USFed hike rates, since their own outsized bond portfolio would register huge losses, only to gain ugly publicity. They after all bought the top in bonds, and continue to buy the top in bonds every month that QE continues. They are the fools buying the asset bubble at the top. See a parallel in Japan.

Red light warning signals are all over the place. The biggest in the Jackass view is the Failures to Deliver. We are told that the demand for USTreasurys is huge by the market players. It might be moderate, but surely not huge, since savings is in shortage. When the Interest Rate Swaps are applied, using 0% money into the machinery tubes, the result is an artificial demand produced to purchase the same USTreasurys. The big US banks are required to follow through, or else to expose the entire sham game, a veritable Ponzi Scheme. The banks are growing in resentment.However, not enough USTBonds exist in the operating bond market to satisfy such outsized contrived demand out of machinery. The result is Failures to Deliver, the warning signal of a fabricated rigged market. This Third World nation has fancy machinery indeed.

SMOKING GUN GRAPHS IN CONTRAST

The answer to the US bond riddle lies in corrosive ruinous effect of monetary policy, now in its fourth year. They said the 0% ZIRP would be just for a few months, but they lied. The Jackass said in 2009 that it would be permanent. They said QE bond monetization would be just for a few months, but they lied. The Jackass said in 2011 that it would be permanent. We were taught by central bank mouthpieces for years that a little inflation is good, but a lot is bad. We were taught in economics classes that hyper inflation destroys the entire system eventually, like in Third World nations. Yet QE (hyper monetary inflation) and ZIRP (free money) respectively cause capital destruction with retired equipment and distorted asset prices with no reward to savers.

The two graphs show in clear terms that QE is not stimulus, and ZIRP is a wet blanket. Together they are causing economic collapse with systemic failure. The Jackass words have sounded exaggerated and fantastic for years, actually since the Lehman failure, a basic scuttle killjob done by Wall Street criminal banks in order to protect Goldman Sachs from sinking. The two graphs show a Money Velocity down almost 4-fold while Money Supply is up 3.5-fold. You decide if it translates to systemic failure. Jackass says resoundingly yes. This is broken US financial system and thus a broken USEconomy, the consequence of heretical injurious damaging monetary policy. The greater tragedy is that it cannot be removed. Putting a halt to the QE monetary spigot means letting the financial markets collapse, bond yields to rise, stock indexes to fall, carry trade to go into reverse, and consumer lending to dry up. So the QE spigot continues in a slow death dispensing acid, rather than causing a sudden death.

The story sold on the highly corrosive and assuredly ruinous monetay policy is of stimulus. The only stimulus is for the big US banks to continue recycling their worthless bond assets to the USFed as buyer of last resort. The USFed has been totally wrecked in the process, a good thing since the HQ of the banking crime syndicate. The only stimulus offered is to the big US banks to continue with carry trade projects instead of lending toward capital formation in the business sector. The big banks are able to keep the derivative game going with free money, to maintain the Whirling Dervish platform of vaporous mass. The result has been a systematic assault on capital. The USEconomy has entered a feedback loop of capital destruction, job cuts, and reduced activity. It cannot be stopped. The results of much lower Money Velocity stands as screaming evidence of failure in monetary policy. The moribund activity means capital is being ruined, not functioning, not producing the wanted output. The slower turnover in the USEconomy is not from hoarding of cash. The participants are suffering a shortage of money, often struggling to survive. Putting money in mattresses is an absurd concept when struggling to pay the rent and buy the food and pay the utilities. The beneficiaries of the easy money are the big US banks. They are also suffering a shortage of money, since the derivative holes are acting like sewers to drain their capital. Their capital ratios are not good, and the harsher Basel III rules have been delayed. No cash hoarding evident anywhere.

LOGICAL CONCLUSION

The logical end is systemic failure, USGovt debt default, war to defend the USDollar and the USTreasury Bond. The USDollar has become the ticket that when refused, invites war. The USTBond has become the toxic element in the banking systems. The Western chambers in the US, UK, EU refuse to liquidate the big banks and work toward the Gold Standard return. So the Eastern chambers in Russia, China, and BRICS nations will pursue the return to the Gold Trade Standard with a growing alliance in support. They are accumulating gold in volume.

The pathetic explanation is left as the final word, by the USFed. They are out of answers, out of policy solutions, and out of integrity. The central bank franchise system has failed. The bankers are cornered, some being murdered. Others might be prosecuted. They are the principal cause of the systemic failure, the other cause being the massive outsourcing initiatives over three decades and the outsized USGovt social welfare state. The bigger principal cause of the systemic failure is the US War Machine, which has been around longer than the debutante Fascist Business Model that made its introduction in 2002. Half the $17 trillion in USGovt debt comes from war spending. They defend the indefensible USDollar, but also the narco business. As footnote, Russian President Vladimir Putin committed two deeds that infuriated the Western bank cabal supra-national leaders. Putin kicked out the Rothschild bankers from his country. Putin interrupted the USGovt heroin trade supply routes out of Afghanistan. Like Abraham Lincoln 150 years ago, the elite banker chambers wish to remove Putin and to suppress Russia, but the sprawling nation has joined at the hip with China. Thus Russia cannot be isolated any more than a bear can be bear hugged. the nation spans 12 time zones and is a top supplier of numerous important commodities. The theme is a constant item in the Hat Trick Letter reports. The Russia & China bond is growing and will result in a marriage, the consummation being a baby called the Gold Trade Standard. The attempts by the USGovt to impose sanctions will result in the United States being isolated, another steady theme in the Hat Trick Letter.

The Federal Reserve published a report. It is laughable. They blame the public, the citizens, the victims. They talk endlessly of a sluggish recovery like fools and charlatans. THE FOLLOWING IS RUBBISH AND FLIMSY. The StLouis Fed stated the following.

“The issue has to do with the velocity of money, which has never been constant, as can be seen in the figure below . If for some reason the money velocity declines rapidly during an expansionary monetary policy period, it can offset the increase in money supply and even lead to deflation instead of inflation. During the first and second quarters of 2014, the velocity of the monetary base2 was at 4.4, its slowest pace on record. This means that every dollar in the monetary base was spent only 4.4 times in the economy during the past year, down from 17.2 just prior to the recession. This implies that the unprecedented monetary base increase driven by the Fed’s large money injections through its large-scale asset purchase programs has failed to cause at least a one-for-one proportional increase in nominal GDP. Thus, it is precisely the sharp decline in velocity that has offset the sharp increase in money supply, leading to the almost no change in nominal GDP. So why did the monetary base increase not cause a proportionate increase in either the general price level or GDP? The answer lies in the private sector’s dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money.” Rubbish!! The surge of money killed capital!!

GOLD STANDARD RETURN

It is coming. It will be painfully slow in its return. It is the only answer, the avoided solution. As long as QE & ZIRP are in place, highly destructive forces will remain at work, ruining capital within economic structures, distorting asset values in financial markets, leading to gross misallocation of assets, and forcing the system into breakdowns under constant aggravated strain. The monetary policy cannot remain in place indefinitely, since so destructive and disruptive. Time is not on the bank cabal side. The Eastern Alliance will continue to work toward installation of the Gold Trade Standard. It requires and has successfully seen a growing boycott and rejection of the USDollar in trade settlement. The Chinese RMB has been making important inroads to establish Swap Facilities that avoid the USDollar in usage, while more RMB Hub sites are being constructed like giant pillboxes in the Global Monetary War.

The King Dollar is being displaced, kicked off its throne. Its squire the Petro-Dollar is undergoing demise. The Ukraine War is the USDollar Waterloo event. The Kiev Regime fascist leaders have begun to bug out, the IMF $3.2 billion loan funds now gone missing. The big Eastern energy deals are underwritten in Rubles and Yuan, no longer the USDollar, another recent correct Jackass forecast. The Saudi rejection of the USD in exclusive oil payments will be the crash heard around the world. The marriage between the Saudis and Chinese is a process well along, with each month featuring yet another high level conference. The Saudis will make the announcement in the coming weeks or months, as a genuflection before the Chinese, with a hat tip to the Russians. Soon the crude oil price will be set by the Russia-China tag team, priced in Yuan currency. When the Gold Trade Standard is entrenched, the diversification away from USTreasurys in the global banking system will become a torrent. Bank system practices will follow trade payment practices. When installed, it will cause prosperity in the East and havoc in the West.

The reaction by the USGovt and USFed will be full of intrigue and desperation. The USFed will be in overdrive with its interest rate derivative machinery active, to prevent a US debt default event or a visible derivative event with another whale beached in full view. The USGovt will be cornered into launching a new domestic currency, a Scheiss Dollar. The USEconomy will react in its own way, with price inflation, supply shortage, and growing chaos with violence. The hint of what comes is seen in the devastating situation in Venezuela, whose tragedy few are paying attention to. They are exporting their essential products (beans, rice, oil) in order to raise hard currency and to prevent a domestic currency collapse. The same will be done in the United States. The early example of exported essentials is of hayfeed for livestock, heading to China from US farms on a growing basis.

 

 

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

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(JosephM in South Carolina)

“Not only have I seen many of the things you talk about in the public arena come to pass, but I have seen many of the things you say repeated three months later by the other analysts. Congratulations!”

(MannyM in England)

“Jim Willie is a gift to our age who is the only clear voice sounding the alarm of the extreme financial crisis facing the Western nations. He has unique skills of unbiased analysis with synthesis of information from his valuable sources. Since 2007, he has made over 17 correct forecast calls, each at least a year ahead of time. If you read his work or listen to his interviews, you will see what has been happening, know what to expect, and know what to do.”

(Charles in New Mexico)

“A Paradigm change is occurring for sure. Your reports and analysis are historic documents, allowing future generations to have an accurate account of what and why things went wrong so badly. There is no other written account that strings things along on the timeline, as your writings do. I share them with a handful of incredibly influential people whose decisions are greatly impacted by having the information in the Jackass format. The system is coming apart on such a mega scale that it is difficult to wrap one’s head around where all this will end. But then, the universe strives for equilibrium and all will eventually balance out.”

(The Voice, a European gold trader source)

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com. For personal questions about subscriptions, contact him at JimWillieCB@aol.com

 

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Written by testudoetlepus

September 22nd, 2014 at 3:52 am

Monetary Policy Killing the System

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by Jim Willie CB, Golden Jackass

Friday, 19 September 2014

The byline should read: MONEY VELOCITY HITS RECORD LOW, WHILE MONEY SUPPLY CONTINUES TO GO INTO ORBIT… SYSTEMIC FAILURE IS EVIDENT AS POLICY IS NOT STIMULUS AT ALL… THE PRINCIPAL CAUSE FOR THE BREAKDOWN IS MONETARY POLICY, WHICH IS STUCK IN PLACE.

 

The USFed monetary policy is killing the system, simply and boldly put. They call it stimulus, when the extreme accommodation is actually just a backdoor Wall Street bailout combined with a pass on the USGovt debt discipline. No debt limit is enforced anymore, a travesty. The United States is looking more like a Third World nation with each passing month, with colossal fraud, economic decay, war and sanctions, and no leadership. The US Federal Reserve has ventured into very dangerous ground, putting hyper monetary inflation as the installed policy, while making money free for the Interest Rate Swap machinery that operates the derivative for maintaining the easy policy. So foreign creditors have largely exited the room, with no great entities to finance the yawning annual $trillion debt. So derivative machinery is relied upon to maintain the absurd 10-year USTreasury (TNX) yield at 2.60% without buyers. So asset markets like the US Stock Market go to monthly new high levels, despite the USEconomy mired in the worst recession since the Great Depression. The visible piece is shopping malls with one third of stores shuttered, and the jobless rate over 22% in the real world without rose colored glasses. These conditions cannot be sustained, especially since the credit machinery is all jammed. The big US banks are insolvent structures dedicated to the bond carry trade, where that same cheap money is used to invest, often with leverage, in the long-dated maturity USTreasury Bonds. The banks serve the casino, not the business sector.

STUCK MONETARY POLICY
In no way can the current easy money policy be reversed, and put into a normal mode. In no way can the accommodation be tapered. The entire Taper Talk is a lie, and always has been a lie. The Jackass called out the USFed last June and July, and was proved correct by September. Since that time, the USFed has been lying vigorously and creatively. The Belgium Bulge showed itself as a $400+ billion abscess visible to the world, hardly a real savings account by the small nation. It was either a Hidey Hole for USTBonds or else a loading depot for BRICS sourcing of Gold bullion for their upcoming central bank. In no way can the enormous bond carry trades be stopped. They are the only source of actual income for the big US banks. Their other source of narco funds money laundering. Doing so would put the carry trade engines into reverse, forcing an unwanted Bond Convexity episode of leveraged selling of USTreasury Bonds by the same large corrupted banks which are so clearly involved in the derivatives game. In no way can the USFed hike rates, since their own outsized bond portfolio would register huge losses, only to gain ugly publicity. They after all bought the top in bonds, and continue to buy the top in bonds every month that QE continues. They are the fools buying the asset bubble at the top. See a parallel in Japan.

Red light warning signals are all over the place. The biggest in the Jackass view is the Failures to Deliver. We are told that the demand for USTreasurys is huge by the market players. It might be moderate, but surely not huge, since savings is in shortage. When the Interest Rate Swaps are applied, using 0% money into the machinery tubes, the result is an artificial demand produced to purchase the same USTreasurys. The big US banks are required to follow through, or else to expose the entire sham game, a veritable Ponzi Scheme. The banks are growing in resentment. However, not enough USTBonds exist in the operating bond market to satisfy such outsized contrived demand out of machinery. The result is Failures to Deliver, the warning signal of a fabricated rigged market. This Third World nation has fancy machinery indeed.

SMOKING GUN GRAPHS IN CONTRAST
The answer to the US bond riddle lies in corrosive ruinous effect of monetary policy, now in its fourth year. They said the 0% ZIRP would be just for a few months, but they lied. The Jackass said in 2009 that it would be permanent. They said QE bond monetization would be just for a few months, but they lied. The Jackass said in 2011 that it would be permanent. We were taught by central bank mouthpieces for years that a little inflation is good, but a lot is bad. We were taught in economics classes that hyper inflation destroys the entire system eventually, like in Third World nations. Yet QE (hyper monetary inflation) and ZIRP (free money) respectively cause capital destruction with retired equipment and distorted asset prices with no reward to savers.

The two graphs show in clear terms that QE is not stimulus, and ZIRP is a wet blanket. Together they are causing economic collapse with systemic failure. The Jackass words have sounded exaggerated and fantastic for years, actually since the Lehman failure, a basic scuttle killjob done by Wall Street criminal banks in order to protect Goldman Sachs from sinking. The two graphs show a Money Velocity down almost 4-fold while Money Supply is up 3.5-fold. You decide if it translates to systemic failure. Jackass says resoundingly yes. This is broken US financial system and thus a broken USEconomy, the consequence of heretical injurious damaging monetary policy. The greater tragedy is that it cannot be removed. Putting a halt to the QE monetary spigot means letting the financial markets collapse, bond yields to rise, stock indexes to fall, carry trade to go into reverse, and consumer lending to dry up. So the QE spigot continues in a slow death dispensing acid, rather than causing a sudden death.

 

 

The story sold on the highly corrosive and assuredly ruinous monetay policy is of stimulus. The only stimulus is for the big US banks to continue recycling their worthless bond assets to the USFed as buyer of last resort. The USFed has been totally wrecked in the process, a good thing since the HQ of the banking crime syndicate. The only stimulus offered is to the big US banks to continue with carry trade projects instead of lending toward capital formation in the business sector. The big banks are able to keep the derivative game going with free money, to maintain the Whirling Dervish platform of vaporous mass. The result has been a systematic assault on capital. The USEconomy has entered a feedback loop of capital destruction, job cuts, and reduced activity. It cannot be stopped. The results of much lower Money Velocity stands as screaming evidence of failure in monetary policy. The moribund activity means capital is being ruined, not functioning, not producing the wanted output. The slower turnover in the USEconomy is not from hoarding of cash. The participants are suffering a shortage of money, often struggling to survive. Putting money in mattresses is an absurd concept when struggling to pay the rent and buy the food and pay the utilities. The beneficiaries of the easy money are the big US banks. They are also suffering a shortage of money, since the derivative holes are acting like sewers to drain their capital. Their capital ratios are not good, and the harsher Basel III rules have been delayed. No cash hoarding evident anywhere.

 

 

LOGICAL CONCLUSION
The logical end is systemic failure, USGovt debt default, war to defend the USDollar and the USTreasury Bond. The USDollar has become the ticket that when refused, invites war. The USTBond has become the toxic element in the banking systems. The Western chambers in the US, UK, EU refuse to liquidate the big banks and work toward the Gold Standard return. So the Eastern chambers in Russia, China, and BRICS nations will pursue the return to the Gold Trade Standard with a growing alliance in support. They are accumulating gold in volume.

The pathetic explanation is left as the final word, by the USFed. They are out of answers, out of policy solutions, and out of integrity. The central bank franchise system has failed. The bankers are cornered, some being murdered. Others might be prosecuted. They are the principal cause of the systemic failure, the other cause being the massive outsourcing initiatives over three decades and the outsized USGovt social welfare state. The bigger principal cause of the systemic failure is the US War Machine, which has been around longer than the debutante Fascist Business Model that made its introduction in 2002. Half the $17 trillion in USGovt debt comes from war spending. They defend the indefensible USDollar, but also the narco business. As footnote, Russian President Vladimir Putin committed two deeds that infuriated the Western bank cabal supra-national leaders. Putin kicked out the Rothschild bankers from his country. Putin interrupted the USGovt heroin trade supply routes out of Afghanistan. Like Abraham Lincoln 150 years ago, the elite banker chambers wish to remove Putin and to suppress Russia, but the sprawling nation has joined at the hip with China. Thus Russia cannot be isolated any more than a bear can be bear hugged. the nation spans 12 time zones and is a top supplier of numerous important commodities. The theme is a constant item in the Hat Trick Letter reports. The Russia & China bond is growing and will result in a marriage, the consummation being a baby called the Gold Trade Standard. The attempts by the USGovt to impose sanctions will result in the United States being isolated, another steady theme in the Hat Trick Letter.

The Federal Reserve published a report. It is laughable. They blame the public, the citizens, the victims. They talk endlessly of a sluggish recovery like fools and charlatans. THE FOLLOWING IS RUBBISH AND FLIMSY. The StLouis Fed stated the following.

"The issue has to do with the velocity of money, which has never been constant, as can be seen in the figure below . If for some reason the money velocity declines rapidly during an expansionary monetary policy period, it can offset the increase in money supply and even lead to deflation instead of inflation. During the first and second quarters of 2014, the velocity of the monetary base2 was at 4.4, its slowest pace on record. This means that every dollar in the monetary base was spent only 4.4 times in the economy during the past year, down from 17.2 just prior to the recession. This implies that the unprecedented monetary base increase driven by the Fed’s large money injections through its large-scale asset purchase programs has failed to cause at least a one-for-one proportional increase in nominal GDP. Thus, it is precisely the sharp decline in velocity that has offset the sharp increase in money supply, leading to the almost no change in nominal GDP. So why did the monetary base increase not cause a proportionate increase in either the general price level or GDP? The answer lies in the private sector's dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money." Rubbish!! The surge of money killed capital!!

GOLD STANDARD RETURN
It is coming. It will be painfully slow in its return. It is the only answer, the avoided solution. As long as QE & ZIRP are in place, highly destructive forces will remain at work, ruining capital within economic structures, distorting asset values in financial markets, leading to gross misallocation of assets, and forcing the system into breakdowns under constant aggravated strain. The monetary policy cannot remain in place indefinitely, since so destructive and disruptive. Time is not on the bank cabal side. The Eastern Alliance will continue to work toward installation of the Gold Trade Standard. It requires and has successfully seen a growing boycott and rejection of the USDollar in trade settlement. The Chinese RMB has been making important inroads to establish Swap Facilities that avoid the USDollar in usage, while more RMB Hub sites are being constructed like giant pillboxes in the Global Monetary War.

The King Dollar is being displaced, kicked off its throne. Its squire the Petro-Dollar is undergoing demise. The Ukraine War is the USDollar Waterloo event. The Kiev Regime fascist leaders have begun to bug out, the IMF $3.2 billion loan funds now gone missing. The big Eastern energy deals are underwritten in Rubles and Yuan, no longer the USDollar, another recent correct Jackass forecast. The Saudi rejection of the USD in exclusive oil payments will be the crash heard around the world. The marriage between the Saudis and Chinese is a process well along, with each month featuring yet another high level conference. The Saudis will make the announcement in the coming weeks or months, as a genuflection before the Chinese, with a hat tip to the Russians. Soon the crude oil price will be set by the Russia-China tag team, priced in Yuan currency. When the Gold Trade Standard is entrenched, the diversification away from USTreasurys in the global banking system will become a torrent. Bank system practices will follow trade payment practices. When installed, it will cause prosperity in the East and havoc in the West.

The reaction by the USGovt and USFed will be full of intrigue and desperation. The USFed will be in overdrive with its interest rate derivative machinery active, to prevent a US debt default event or a visible derivative event with another whale beached in full view. The USGovt will be cornered into launching a new domestic currency, a Scheiss Dollar. The USEconomy will react in its own way, with price inflation, supply shortage, and growing chaos with violence. The hint of what comes is seen in the devastating situation in Venezuela, whose tragedy few are paying attention to. They are exporting their essential products (beans, rice, oil) in order to raise hard currency and to prevent a domestic currency collapse. The same will be done in the United States. The early example of exported essentials is of hayfeed for livestock, heading to China from US farms on a growing basis.

 

 

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

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Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com. For personal questions about subscriptions, contact him at JimWillieCB@aol.com

 

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September 20th, 2014 at 2:14 pm

Understanding Organizational Stupidity

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by Dmitry Orlov

[Another re-run. Regularly scheduled blogging will resume once I've sailed far enough down the coast. Homework assignment: read this article and apply the concepts within it to the Obama administration's policies on Ukraine and Syria.]

Is it morning in America again, or is the bubble that is the American economy about to pop (again), this time perhaps tipping it into full-blown collapse in five stages with symphonic accompaniment and fireworks? A country blowing itself up is quite a sight to behold, and it makes us wonder about lots of things. For instance, it makes us wonder whether the people who are doing the blowing up happen to be criminals. (Sure, they may be in a manner of speaking—as a moral judgment passed on the powerful by the powerless—but since none of them are likely to see the inside of a jail cell or even a courtroom any time soon, the point is moot. Let's be sure to hunt them down once they try to run and hide, though.) But at a much more basic and fundamental level, a better question to ask is this one:

“Why are we being so fucking stupid?”

What do I mean when I use the term “fucking stupid”? I do not mean it as a term of abuse but as a precise, if unflattering, diagnosis. Here is as good a definition as any, excerpted from American Eulogy by Jim Quinn:

If you had told someone on September 10, 2001 that ten years later America would be running $1.5 trillion annual deficits, fighting two wars of choice in countries that despise our presence, and had not only not addressed the $100 [trillion] of unfunded welfare liabilities but added billions more with Medicare D and Obamacare, they would have thought you were a crazy doomster predicting the end of the world. They would have put you away in a padded cell if you had further predicted that politicians would cut taxes three separate times, that the Wall Street banks that leveraged themselves 40 to 1 and destroyed the financial system [would be] handed $2 trillion of taxpayer funds so they could pay themselves multi-million dollar bonuses, and that the Federal Reserve would triple its balance sheet to $2.45 trillion by running its printing presses at hyper-speed and handing the money to those same Wall Street Mega-Banks.

Well, the evidence is in, and that crazy doomster in his padded cell has turned out to be amazingly prescient, so perhaps we should listen to him. And what would that crazy doomster have to say now? I would venture to guess that it would be something along these lines:

There is no reason to think that those who failed to take corrective action up until now, but remain in control, will ever do so. But it should be perfectly obvious that this situation cannot continue ad infinitum. And, as a matter of general principle, things that can't go on forever—don't.

Back to the question of stupidity: Why are we (as a country) being so fucking stupid? This question has puzzled me for some time. It appears that the problem of stupidity is quite pervasive: look at any large human organization, and you will find that it is ruled by stupidity. I was not the first to stumble across the conjecture that the intelligence of a hierarchically organized group of people is inversely proportional to its size, but so far the mechanism that makes it so has eluded me. Clearly, there is something amiss with hierarchically organized groups, something that causes all of them to eventually collapse, but what exactly is it? To try to get at this question, last year I spent quite a while researching anarchy, and wrote a series of articles on it (Part I, Part II, Part III). I discovered that vast hierarchies do not occur in nature, which is anarchic and self-organizing, with no chains of command and no entities in supreme command. I discovered that anarchic organizations can go on forever while hierarchical ones inevitably end in collapse. I examined some of the recent breakthroughs in complexity theory, which uncovered the laws governing the different scaling factors in natural (anarchically organized, efficient, stable) systems and unnatural (hierarchically organized, inefficient, collapse-prone) ones.

But nowhere did I find a principled, rigorous explanation for the fatal flaw embedded in the very nature of hierarchical systems. I did have a very strong hunch, though, backed by much anecdotal evidence, that it comes down to stupidity. In anarchic societies whose members cooperate freely, intelligence is additive; in hierarchical organizations structured around a chain of command, intelligence is subtractive. The lowest grunts or peons are expected to carry out orders unquestioningly. Their critical faculties are 100% impaired; if not, they are subjected to disciplinary action. The supreme chief executive officer may be of moderately impaired intelligence, since it is indicative of a significant character flaw to want such a job in the first place. (Kurt Vonnegut put it best: “Only nut cases want to be president.”) But beyond that, the supreme leader must act in such a way as to keep the grunts and peons in line, resulting in further intellectual impairment, which is compounded across all of the intervening ranks, with each link in the chain of command contributing a bit of its own stupidity to the organizational stupidity stack.

I never ascended the ranks of middle management, probably due to my tendency to speak out at meetings and throw around terms such as “nonsensical,” “idiotic,” “brainless,” “self-defeating” and “fucking stupid.” If shushed up by superiors, I would resort to cracking jokes, which were funny and even harder to ignore. Neither my critical faculties, nor my sense of humor, are easily repressed. I was thrown at a lot of special projects where the upside of being able to think independently was not negated by the downside of being unwilling to follow (stupid) orders. To me hierarchy = stupidity in an apparent, palpable way. But in explaining to others why this must be so, I had so far been unable to go beyond speaking in generalities and telling stories.

And so I was happy when I recently came across an article which goes beyond such “hand-waving analysis” and answers this question with some precision. Mats Alvesson and André Spicer, writing in Journal of Management Studies (49:7 November 2012) present “A Stupidity-Based Theory of Organizations” in which they define a key term: functional stupidity. It is functional in that it is required in order for hierarchically structured organizations to avoid disintegration or, at the very least, to function without a great deal of internal friction. It is stupid in that it is a form intellectual impairment: “Functional stupidity refers to an absence of reflexivity, a refusal to use intellectual capacities in other than myopic ways, and avoidance of justifications.” Alvesson and Spicer go on to define the various “…forms of stupidity management that repress or marginalize doubt and block communicative action” and to diagram the information flows which are instrumental to generating and maintaining sufficient levels stupidity within organizations. What follows is my summary of their theory. Before I start, I would like to mention that although the authors' analysis is limited in scope to corporate entities, I believe that it extends quite naturally to other hierarchically organized bureaucratic systems, such as governments.

Alvesson and Spicer use as their jumping-off point the major leitmotif of contemporary management theory, which is that “smartness,” variously defined as “knowledge, information, competence, wisdom, resources, capabilities, talent, and learning” has emerged as the main business asset and the key to competitiveness—a shift seen as inevitable as industrial economies go from being resource-based to being knowledge-based. By the way, this is a questionable assumption; do you know how many millions of tons of hydrocarbons went into making the smartphone? But this leitmotif is pervasive, and exemplified by management guru quips such as “creativity creates its own prerogative.” The authors point out that there is also a vast body of research on the irrationality of organizations and the limits to organizational intelligence stemming from “unconscious elements, group-think, and rigid adherence to wishful thinking.” There is also no shortage of research into organizational ignorance which explores the mechanisms behind “bounded-rationality, skilled incompetence, garbage-can decision making, foolishness, mindlessness, and (denied) ignorance.” But what they are getting at is qualitatively different from such run-of-the-mill stupidity. Functional stupidity is neither delusional nor irrational nor ignorant: organizations restrict smartness in rational and informed ways which serve explicit organizational interests. It is, if you will, a sort of “enlightened stupidity”:
Functional stupidity is organizationally-supported lack of reflexivity, substantive reasoning, and justification (my italics). It entails a refusal to use intellectual resources outside a narrow and “safe” terrain. It can provide a sense of certainty that allows organizations to function smoothly. This can save the organization and its members from the frictions provoked by doubt and reflection. Functional stupidity contributes to maintaining and strengthening organizational order. It can also motivate people, help them to cultivate their careers, and subordinate them to socially acceptable forms of management and leadership. Such positive outcomes can further reinforce functional stupidity.

The terms I italicized are important, so let's define each one:

Reflexivity refers to the ability and willingness to question rules, routines and norms rather than follow them unquestioningly. Is your corporation acting morally? Well it doesn't matter, because “what is right in the corporation is what the guy above you wants from you.” The effects of this attitude tend to get amplified as information travels (or, in this case, fails to travel) down the chain of command: your immediate superior might be a corrupt bastard, but your supreme leader cannot possibly be a war criminal.

Justification refers to the ability and willingness to offer reasons and explanations for one's own actions, and to assess the sincerity, legitimacy, and truthfulness of reasons and explanations offered by others. In an open society that has freedom of expression, we justify our actions in order to gain the cooperation of others, while in organizational settings we can simply issue orders, and the only justification ever needed is “because the boss-man said so.”

Substantive reasoning refers to the ability and willingness to go beyond the “small set of concerns that are defined by a specific organizational, professional, or work logic.” For example, economists tend to compress a wide range of phenomena into a few numbers, not bothering to think what these numbers actually represent. Organizational and professional settings discourage people from straying from the confines of their specializations and job descriptions, in essence reducing their cognitive abilities to those of idiot-savants.

Functional stupidity can arise spontaneously, because there are many subjective factors which motivate people within organizations to narrow their thinking to the point of achieving it. A certain amount of closed-mindedness can be helpful in furthering your career. It helps you present yourself as a reliable organizational person—one who would never even question the validity of the organizational or occupational paradigm, never mind stray from it. At the other extreme, your refusal to stray beyond a narrow focus may be prompted by feelings of anxiety, insecurity, and fear of jeopardizing your position. And while, just as you would expect, functional stupidity produces negative outcomes for the organization as a whole, it provides for smooth social functioning within the organization itself by suppressing dangerous or uncomfortable questions and by avoiding the awkwardness of calling into question the judgment of your superiors.

But such subjective factors are dwarfed by certain stupidity-generating features of organizations. At their highest level, organizations tend to focus on purely symbolic issues such as “strong corporate cultures and identities, corporate branding, and charismatic leadership.” Corporate (and other) leaders try to project an identical internal and external image of the organization, which may have little to do with reality. This is only possible through stupidity management—the process by which “various actors (including managers and senior executives as well as external figures such as consultants, business gurus, and marketers) exercise power to block communication. The result is that adherence to managerial edicts is encouraged, and criticism or reflection on them is discouraged.”

As the people within the organization internalize this message, they begin to engage in stupidity self-management: they cut short their internal conversations, refusing to ask themselves troubling questions, and focusing instead on a positive, coherent view of their environment and their role within it. But stupidity self-management can also fail when the mismatch between the message and reality becomes too difficult to ignore, ruining morale. The suppressed reality (“The king is naked!”) can spread as a whisper, resulting in passive-aggressive behavior and deliberate foot-dragging all the way to sabotage, defections and resignations.

The functions of stupidity management are to project an image, to encourage stupidity self-management in defense of that image, and to block communication whenever anyone lapses into reflexivity or substantive reasoning, or demands justification. Communication is blocked through the exercise of managerial power. The authors discuss four major ways in which managers routinely exercise their power in defense of functional stupidity: direct suppression, setting the agenda, ideological manipulation, and fetishizing leadership. Of these, direct suppression is by far the simplest: the manager signals to the subordinate that further discussion will not be appreciated, threatening or carrying out disciplinary action if the signaling doesn't work. Setting the agenda is a more subtle technique; for instance, a typical ploy is to require that all criticisms be accompanied by “constructive suggestions,” placing beyond the pale all problems that do not have immediate solutions (which are the vast majority). Ideological manipulation is more subtle yet; one common technique is to emphasize action, at the expense of deliberation, as expressed by the corporate cliché “stop thinking about it and start doing it!” Finally, fetishizing leadership involves splitting each group into leaders and followers, where the leaders seek to make their mark, whatever it takes, and to get promoted quickly. To do so successfully, they must suppress the critical faculties of those around them, compelling them to act as obedient followers.

Functional stupidity is self-reinforcing. Stupidity self-management, reinforced using the four managerial techniques listed above, produces a fragile, blinkered sort of certainty. By refusing to look in certain directions, people are able to pretend that what is there does not exist. But reality tends to intrude on their field of perception sooner or later, and then the reaction is to retreat into functional stupidity even further: those who can ignore reality the longest are rewarded and promoted, setting an example for others.

But the spell can also be broken when the artificial reality bubble protected by the imaginary film of functional stupidity is punctured by a particularly contradictory outcome. For an individual, the prospect of unemployment or the end to one's career can produce such a sudden realization: “How could I have been so stupid?” Similarly, entire organizations can be shaken out of their stupor by a painful fiasco that subjects them to a barrage of public criticism. Public hearings in which industry leaders are forced to appear before government committees and answer uncomfortable questions can sometimes serve as stupidity-busting events. A particularly daunting challenge is to pop the functional stupidity bubble of an entire nation, since there is no public forum at which objective outsiders can force national leaders to take part in a substantive discussion. Bearing witness to the fast-approaching end of the nation as a going concern may be of help here. How could we have been so fucking stupid? Well, now you know.

 

Understanding Organizational Stupidity

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September 17th, 2014 at 6:35 pm

Jim Willie: “It’s Not Going To Hang On For A Whole Lot Longer” | US Plans To Collapse Europe!

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Jim Willie Interview with Elijah Johnson

 

Part One

Part Two

Jim Willie joins FinanceAndLiberty.com in this newly released video and reveals the US government’s plans to collapse Europe. With the world quickly headed the way of World War 3 and financial and nuclear armageddon a possibility within our near future, Willie warns that nothing is getting fixed, everything is breaking, and the US is becoming more and more desperate as the rest of the world rejects the US dollar. “It’s not going to hold on for a whole lot longer” we are warned.

Part One:

  • The U.S. wants to destroy European Economy 1:24
  • How will Russian sanctions impact U.S. Dollar and European Economy? 6:53
  • U.S. isolating itself from the rest of the world 10:37
  • Germany not co-operating with move toward fascism and breaking away from the EU 20:16
  • NATO being undermined by sanctions and war 33:45
  • Petrodollar continuing to be threatened 38:52

Part Two:

  • Why is Germany repatriating their gold? 0:34
    Viewers Questions:
  • What is America's role in the new millennium? 7:25
  • Will debt be erased in a dollar collapse? 11:46
  • When will the U.S. government market rigging end? 15:42
  • Should we invest in rigged markets? 18:04
  • Australia aligning with the West or East? 25:08
  • Will the BRICS association survive? 29:49

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September 14th, 2014 at 6:24 pm

Russia, The Ukraine, BRICSA Nations, Sanctions, and The Retreat From “Globaloney”

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by Joseph P. Farrell

There is yet another consequence that is spinning out from the Anglosphere’s foreign policy insanity vis-a-vis the Ukraine, Russia, and the imposition of sanctions on the latter: the breakdown of the very globalist-New World Order agenda – we call it Globaloney here at Giza Death Star – that the CFR, Trilateralists, Bilderbergers, and so on have been so assiduously busy about building since the end of the Second World War (if not before):

World marching back from globalisation

Of course, you’ll notice a certain tendentiousness in this article, perhaps best revealed here:

“There is a mood abroad that says history will record that sanctions against Russia marked the start of an epochal retreat from globalisation. I heard a high-ranking German official broach the thought the other day at the German Marshall Fund’s Stockholm China Forum. It was an interesting point, but it missed a bigger one. The sanctions are more symptom than cause. The rollback began long before Vladimir Putin, Russia’s President, began his war against Ukraine.

“The case for calling a halt to business as usual with Moscow is self-evident to anyone who considers that international security demands nations do not invade their neighbours. The valid criticism of the West is that it has been too slow to react. At every step, the Russian president has ruthlessly exploited US hesitation and European divisions.

“He will do so until NATO restores deterrence to the core of European security. Putin’s irredentism demands tough diplomacy stiffened by hard power. He will stop when he understands that aggression will invite unacceptable retaliation. To make deterrence credible, the alliance must put boots on the ground on its eastern flank. The Baltics have replaced Berlin as the litmus test of western resolve.

“Some, particularly though not exclusively in the rising world, have seen sanctions through a different prism. By punishing Russia economically, the US and Europe are undermining the open international system. Economics, this cast of mind says, must be held apart from the vicissitudes of political quarrels. Why should new powers sign up to a level international playing field if the US and Europe scatter it with rocks in pursuit of narrow interests?”

There are four points here that leave me scratching my head in disbelief, and the first is, the idea that this is “Mr. Putin’s War.”

Now, granted, I don’t watch much tv, but the notion of Mr.Putin having begun “his war against (THE) Ukraine” strikes me as not only a BIG FAT WHOPPER OF A LIE, but one so ridiculous that it strains imagination. Most regular readers here are probably as ready as I to assign equal if not more responsibility for the mess in THE Ukraine to the West in general and to America in particular. As far as this blogger is concerned, Russia’s only responsibility in the affair appears to have been the misfortune to have their country so close to the Ukraine. One gets the impression, from some western “spokespersons” that the Russians are also to be blamed for the location of their country (How dare they place it so close to our interests!) and that Washington would be much happier if the Russians lived in another solar system.

I’ve heard the usual stuff about a Russian invasion of the Eastern Ukraine, though admittedly, I haven’t watched much tv news lately to see how the American media is spinning the whole thing(frankly, I can only stand about two minutes of it before I switch it off in disgust). But I’m just not seeing it. This is Russia we’re talking about folks, and if Mr. Putin wanted to invade the Ukraine, he wouldn’t muck about. We would be seeing massive air and missile strikes against C3 targets (communications, command and control), airfield strikes to cripple the Ukrainian air force and gain air superiority, interdiction of transportation and logistics, road blocks and check points everywhere, a clamp on all foreign journalists, massive columns, armor, &c… you get the idea. In other words, you’d see a military operation with all that entails, and from what I can tell – I may be wrong, after all, I don’t watch TV and I don’t live in Donetsk – this is not happening.

The second problem here is, sure, you don’t invade friendly and non-hostile “neighbours”, and that’s the point: Mr. Putin didn’t, and even if he did, there has been some provocation. Left out of this mix is of course, that one also doesn’t sponsor neo-Nazi coups and bloody covert operations against a legitimate sovereign government that is moving in a direction you don’t like, but not doing anything threatening to you or your interests, just so the Vice-President’s son can have a cushy job (ok ok…I exaggerate).

Thirdly, the Baltics have replaced Berlin as the test of Western resolve. Really? Funny… I don’t recall hearing recently that Mr. Putin or Mr. Glazyev or anyone else were massing troops and tanks on the border of Estonia, Latvia, or Lithuania. Could you produce some satellite pictures from Brazilian, German, French, Japanese, Chinese, Indian satellites showing us this? What I suspect is REALLY being said here is “we need American bases in those countries in the guise of NATO bases so we can more easily interdict that Russian-German gas pipeline in the Baltic Sea.”

However, it’s that fourth component that really is where the rubber meets the road, and two more paragraphs expound on this:

“These critics are right to say an integrated global economy needs a cooperative political architecture. Sanctions against Ukraine, though, fit a bigger picture of the unravelling of globalisation since the financial crash of 2008. They testify to a profound reversal in US attitudes. Washington’s steady retreat from global engagement reaches beyond Barack Obama’s ordinance that the US stop doing “stupid stuff”.

“The architect of the present era of globalisation is no longer willing to be its guarantor. The US does not see a vital national interest in upholding an order that redistributes power to rivals. Much as they may cavil at this, China, India and the rest are unwilling to step up as guardians of multilateralism. Without a champion, globalisation cannot but fall into disrepair.”(Emphasis added)

I have to admit, I read the last paragraph in disbelief, for the BRICSA nations, Russia and China in particular, have repeatedly made statements to the effect that “globalization” must be genuine and not unipolar. In other words, they have dared call a spade a spade, and pulled off the phony term of “globalization” as simply a convenient name for the imposition of American and for that matter private financial and corporate will on the rest of the world. Think only of the secret agendas behind the drive to push standards of US Patent Law through the WTO – with all the associated GMO issues that go with it – the whole creation of the WTO-IMF system:

“The open trading system is fragmenting. The collapse of the Doha round spoke of the demise of global free-trade agreements. The advanced economies are looking instead to regional coalitions and deals — the Trans-Pacific Partnership and the Transatlantic Trade and Investment Pact. The emerging economies are building south-south relationships. Frustrated by a failure to rebalance the International Monetary Fund, the Brics nations (Brazil, Russia, India, China and South Africa) are setting up their own financial institutions”

And the “masters” in the City, Wall Street, London and Washington have only themselves to blame. But there’s a lament here, and it’s a significant one:

“Globalisation needs an enforcer — a hegemon, a concert of powers or global governance arrangements sufficient to make sure the rules are fairly applied. Without a political architecture that locates national interests in mutual endeavours, the economic framework is destined to fracture and fragment. Narrow nationalisms elbow aside global commitments. Sanctions are part of this story, but Russia’s contempt for the international order is a bigger one.

“Sad to say, we learnt in 1914 that economic interdependence is a feeble bulwark against great-power rivalry.”

Reading between the lines a bit, this is both an admission, and perhaps a bit of a desperate prayer. The admission is, the USA cannot be the unipolar “enforcer” any more for any attempt to do so will only exacerbate an already deteriorating situation, and secondly, the old system of alliances is collapsing under the strain of new emerging regional coalitions, financial realities, and their accompanying geopolitical commitments. In other words, the USA must make sure those new bases in Eastern Europe that are being called for here must be perceived as NATO bases. And there’s the rub… selling that idea in Rome, Madrid, Paris, or Berlin is going to be difficult.

Now, one final question: do any of you think that “global enforcer” will be genuinely fair? a genuinely responsive government to the peoples of the world? to their middle classes? Or do you think it will be what the corporatized governments of the west have become?

I suspect most of us know the answer to that already.

See you on the flip side.

(My thanks to Mr. Z.Y. for sharing this important article.)

 

RUSSIA, THE UKRAINE, BRICSA NATIONS, SANCTIONS, and THE RETREAT FROM “GLOBALONEY”

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Written by testudoetlepus

September 11th, 2014 at 3:25 pm

Jim Willie: Saudis to Kill Petrodollar. Germany to Scuttle The EU and Wall Street

without comments

 

The BRICS nations (Brazil, Russia, India, China and South Africa) at their summit in Brazil said they would give the United States until the end of 2014 to reform the world monetary system including the IMF and the World Bank. The Obama administration has since decided to up the ante and pass more toothless sanctions against Russia. The US had fined BNP Paribas $9 billion for daring to trade with Russia and Iran.

The facts left out of the above in most media accounts are that the Rothschilds own BNP Paribas. and that their Parisian bank is technically bankrupt. In American parlance we are at the point where the rubber meets the road. Do the economic experts running the United States actually know what they are doing?

Dr Willie outlined from his sources a chain of events that could unfold over the next few months. It is difficult to put a date certain when the Dollar Dies but we are on an Express Train headed for a Brick Wall. And America has passengers from other nations on board looking for a safe exit because they know the men in charge in Washington and New York are stark raving mad.

The first actual event Jim Willie mentioned will be a disappointing harvest in the Ukraine. A poor harvest in an agricultural country will doom the Kiev regime which is a good thing. Another source of complaint will be the returning veterans sent home after the ceasefire. They are angry. The Kiev coup leaders are so incompetent that they sent their draftees into battle with poor support and inadequate weapons. Their army in some cases was never paid. These are men who could have made money in the fields. There are videos of the returning veterans showing exceptionally high levels of anger. The US stole Ukraine’s gold and has ordered them to allow GMO crops to be planted. The neighboring states of Hungary and Russia have banned GMO as a health risk. The next round of elections should be interesting but of no consequence to us though we should all be grateful to Putin that Washington’s insanity was not contagious.

Lost in the mainstream press is the fact that the resistance to Kiev was swollen with foreign volunteers who hate the EU. These men are seasoned veterans from NATO countries. Brits from the SAS were fighting alongside French, Germans, Danes and others against the IMF-EU installed dictator in Kiev. These men are resistance fighters in the war against the New World Order. That is why the Department of Homeland Security says returning veterans are the number one threat to the government in Washington.

Dr Willie has been reporting for quite awhile on the growing friendship between the Saudis and the other Gulf States and China. The Chinese and the Saudis hold monthly ministerial level meetings. A few hundred wealthy Arabs have been sending their 400 ounce gold bars to Switzerland to have them recast into 99.99% pure kilogram size bars. Those kilogram gold bars are to be part of a gold backed yuan that will trade with other gold and commodity backed currencies.

This is to be a distributed system with letters of credit based on gold to facilitate trade as opposed to the current centrally controlled one where one man in Washington can shut down your economy because you do not think Iran has a program to build a nuclear weapon. So what if the US National Intelligence Estimate which relies on the best data from America’s 16 intelligence agencies says there is no such program. Jewish Lobby campaign contributors have told both political parties there is one and your country must be bankrupted through American sanctions for defying the will of Benyamin Netanyahu.

The Petrodollar is about all that is keeping the US dollar from sinking. Henry Kissinger started the Petrodollar system to replace the dollar gold exchange system which had originated at Bretton Woods in 1944 and ended Monday August 16, 1971 when Nixon closed the gold window. The Bretton Woods agreement essentially took the British pound system which had ruled international trade since the defeat of Napoleon. That British domination of trade hit a serious bump on September 21, 1931 when Britain went off the gold standard. That depressed liquidity and sent the entire world even deeper into Depression. The US dollar did not formally replace the pound in trade until 1944.

The problem in the West is that we have debt based currencies and fractional reserve banking which sets us up for a fall. Under our system a Banker can charge you interest on money he created out of nothing even if we were on a gold standard. The money he lends you is in a checking account deposit he created out of nothing. Everyone in the country actually should share in the interest received for the loan because the Banker was allowed to inflate their currency which devalued their purchasing power. It was their loss but the Banker gets all of the gain.

The other problem with fractional reserve banking is that all that debt money leads to a Boom which attracts a lot of investments into the wrong part of the economy in the Boom phase. Booms are created when Banks loan out ten times as much as they receive in deposits. Busts are equally hard on the way down. When the Bank forecloses on a $100,000 loan, they have to call in a million dollars in loans. That contracts the Money Supply which really does serious harm. In the Great Depression Americans did die from starvation. The US had a Depression in the 19th century which lasted longer than the Great Depression. It was called the Great Contraction.

The seeds of the dollar’s destruction were sown in Wall Street’s post war plans. The Bankers did not trust the Americans so they flooded the US with Jewish refugees and then with legal and illegal aliens from everywhere. This population surge and division made resistance for Americans more difficult. But it also required Americans for the first time to begin importing raw materials to meet the needs of the added population.

The Petrodollar was a necessity because currencies depend upon supply and demand to set their value. The US was increasing the Supply of dollars to pay for wars and for the occupation of foreign lands. And also for unlimited population growth due to legal and illegal immigration forcing the US to become a net importer of many raw materials. This put downward pressure on wages as it pushed prices higher. Instead of correcting these problems politicians printed more dollars. The Petrodollar meant that people overseas could buy oil with the dollars they earned selling raw materials, cars, electronics, clothes and a lot of other things to America. The Gulf States agreed to accept dollars which they used to buy US Treasury bonds. This solved two problems. The Arabs covered America’s budget deficit. And the problem of the US perpetual trade deficit at least appeared to be solved.

In exchange the US promised to keep the Mad Dog of the Mideast, Israel, on a short leash. The US did go after Libya and Iraq because they refused to sell dollars for oil. They wanted euros and gold. But the US also attacked Iraq in 2003 because Israel had demanded that they go down for their support of the Palestinians. And Syria had to be attacked by ISIS, Al Qaeda, Al Nusra and those fun loving cannibals at the FSA because Israel wanted Obama to take down the main allies of Lebanon. Hezbollah had defeated them in the 2006 Lebanon war. And if Syria were taken down, Israel hopes America could go to war with Iran and maybe their allies in Russia and China. World War III might kill a lot of Americans but who in the Israeli government cares. God made so many Americans.

The United States has failed to keep up its end of the Petrodollar agreement to protect Muslims from the crazies in Israel. Time ran out on that deal. Besides the dollar is about to collapse. A lot of multi-billionaire investors including George Soros are betting on a stock market collapse. There is no reason for the economy in America to be where it is except that Bretton Woods gave the US the right to print the international reserve currency meaning we could export inflation all over the world. Hard working miners in Africa, Poland and Latin America have been tricked into working for free by paying for their labors in I Owe You Nothing Federal Reserve Notes. And retired workers all over the world whose pensions funds were invested in dollars could face starvation unless their fund managers dump dollars very, very soon.

The BRICS nations have allies who are working with them to undo the dollar as the international reserve currency. One of those allies is NATO member Turkey which has observer status with the Shanghai Cooperation Organization, the Russo-Chinese alliance. Iran is a member of the SCO. China elevated Iran’s rank and singled them out as a key ally. That message has not been well received in either Israel or in Washington which is owned by the Jewish Lobby. Turkey has been a traditional lead player in gold backed trading in the region. Their Bankers are on board with the BRICS alliance against the dollar.

The question is: where does Germany go and when? Angela Merkel might even retire rather than go into a coalition after their September 22nd elections. There are quite a few people in Germany angry that the US stole their gold. Germany is currently locked into the European Union and the euro. Germans are a very productive people. Supply and demand would make their Deutschmark very valuable if they had one. A high priced currency does make imports cheap but it also makes exports expensive.

Having Germany, Finland and the Netherlands in the EU is about all that makes their trade cartel worth joining and their currency, the euro, worth anything at all. People want things Germany makes. They can afford to buy them because southern Europe is a basket case supported by the euro. The perpetual deficit regimes in the south lower the value of the euro. This depressed euro enables German businesses to sell more overseas. But the down side is that Germany is called to bail out very ungrateful people. And the Germans have about reached the limit of their ability to bail out everyone on the planet. The Germans owe the Americans nothing after they stole their gold and defrauded the world with their Paper Ponzi schemes.

Dr Willie sees this German issue coming to a head over banking. The banks of Europe are in worse shape than Americans think. And in turn America is in far worse shape than Europeans understand. I saw a German journalist interview an Englishman who used to be the chief correspondent for his paper in America. He is currently his paper’s senior business editor. Neither man had a clue as to how bad things are in the US. Dr Willie said the Germans might let one of their major banks collapse without bailing them out. Deutsche Bank is one of the world’s largest. In recent years they have had Jewish CEOs. Dr Willie said if that bank went under that the French banks would go and that the southern European banks would follow. London and US banks would fall soon afterwards. We are talking about hundreds of trillions of dollars in losses if you count Credit Default Swaps.

So what happens after a major European bank collapses? No more subsidies to the Americans. Too expensive. Tens of millions of Europeans will want food and will refuse to send more of their money to the corrupt regime that destroyed their banking system. It was a J P Morgan employee Blythe Masters who invented Credit Default Swaps and made this mountain of Unpayable Debt possible. Dr Willie sees Germany going for a trade deal with Russia and accepting their gold backed ruble. Germany will probably take Austria and maybe even the Netherlands and Finland with them. Russia seems unlikely to invade Finland as Joe Stalin did many decades ago.

So when does this happen? I think very early in 2015. That is when Obamacare exemptions expire. And it is when Group health insurance plans are subjected to higher premiums and deductibles. Zero Hedge had a few articles of late that could explain to people overseas and in Washington how bad things are in America. 53 million Americans are temps, independent contractors and part timers. 30.7 million Americans are federal, state and local government workers. 92.3 million Americans of working age are not in the labor market at all. Stay At Home Moms started going out of style in the 1970s when inflation and declining wages first began to take their toll. As previously mentioned, many billionaire investors like George Soros are betting on a massive drop in the stock market. The Central Banks have been caught buying stock index futures to drive the markets higher and to keep small investors in the market.

That American Express train is headed to a Brick Wall. Russia and China will, along with the other BRICS nations and their allies, be offering the Germans, the Saudis and the rest of the world a safe exit from an otherwise fatal crash. Unfortunately, there is no exit for the US, Great Britain and the other Europeans apart from those who take the Russo-Chinese lifeline. That is unless the US military which has been preparing for martial law for at least two decades were to intervene and to begin arresting Bankers and seizing their assets. At some point, the US military will realize with certainty that Nationwide Food Riots will be breaking out in the very near future unless they lead the revolt against Wall Street.

 

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Written by testudoetlepus

September 11th, 2014 at 3:23 pm

Busybody Nation

without comments

by James Howard Kunstler

If anyone above a kindergarten pay-grade has figured out America’s vital interest in the Ukraine, it has not been reported — or even leaked from the foundering vessel that is the US State Department. In fact, when you consider the results, it’s hard to understand the rationale behind any recent US foreign policy endeavor. Mr. Putin of Russia summed it up last week, saying, “Anything the US touches turns to Libya or Iraq.” Vlad has a point there, and what he left off the list, of course, was Ukraine, which entered the zone of failing states a few months ago when the US lubricated the overthrow of its previously-elected government.

What complicates things is that Ukraine is right next door to Russia. For many years it was even part of the same nation as Russia. Russia has a lot of hard assets in Ukraine: pipelines, factories, port facilities. Because they were recently part of the same nation, a lot of Russian-speaking people live in the eastern part of Ukraine bordering Russia. The casual observer from Mars might easily discern that Russia has a range of real interests in Ukraine. Especially if the central government of Ukraine can’t control its own economic affairs.

The US claims to have interests in Afghanistan, Iraq, Syria, and Libya. These nations are respectively 11,925, 11,129, 10,745, and 10,072, miles away from America — not exactly neighbors of ours. All of them, one way or another, and partly due to our exertions, are checking into the homeless shelter of failed statedom. Afghanistan was, shall we say, a special case, since it was being used thirteen years ago explicitly as a “base” (al Qaeda) for launching attacks on US soil. But that was then. No other war or “war” in US history has lasted as long. And it remains unclear whether our presence there yet today is a “nation-building” project or a mere occupation, in the absence of some better idea of what to do.

President Obama has made noises about pulling US troops out of Afghanistan, but we’re still there. How is the nation-building project working out? With Mr. Osama bin Laden dead and in his watery grave, and the Islamic extremist action moved to other venues, how significant is Afghanistan’s role as a strategic base for Jihad?

How many educated, media-marinated professors in their Ivy League turrets can explain in one paragraph what the necessity of overthrowing Muammar Gaddafi was, exactly? Anyone remember? I suppose, like many actions in history, it just seemed like a good idea at the time. If the idea was to keep the oil and gas flowing to western nations — i.e. the “Carter Doctrine” —well, excuse me while I cough into my sleeve. Production is about one-eighth what it was before Mr. Gaddafi exited the scene. That really worked.

Then, of course, there is ISIS (or the Islamic State or the Caliphate), the most visible outcome of a decade of US foreign policy endeavors in Iraq and Syria. Good show, ladies and gentlemen! You have managed to give the world a political movement arguably more barbaric than even the Nazis. On Sunday, The New York Times stood back in breathless admiration for the accomplishments and skills of that organization in the headline: ISIS Displaying a Deft Command of Varied Media. Like a mad scientist in thrall to his own creation, the Times appears dazzled by the political Frankenstein monster we have loosed upon the world.

Considering all the current mayhem in the Middle East, and the potential for deadly mischief from it spreading even into the US and western Europe, do we really have any business hassling Putin and Russia about its feckless, floundering next-door-neighbor, Ukraine? In fact, is any other nation in a better position to prevent Ukraine from descending into full-blown failure? Why don’t we just shut up and mind our own business?

 

Busybody Nation

[James Howard Kunstler]

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Written by testudoetlepus

September 10th, 2014 at 4:29 pm