China's Ultimatum: Let Us Invade Taiwan Or We'll Dump The Dollar
Financial analyst says China could use huge dollar reserves as blackmail for beefing superpower status
Paul Joseph Watson
Prison Planet
Wednesday, September 19, 2007
The Fed's decision to cut interest rates again is likely to send the dollar tumbling to historic new lows, leading one financial analyst to predict that China's fury at the devaluation of its huge dollar reserves will provoke them into giving the U.S. government a terse ultimatum - let us invade Taiwan unopposed or we'll dump the dollar and bring about economic chaos.
China holds $1.3 trillion of dollar denominated assets and leading Communist Party officials have repeatedly threatened to use what the London Telegraph referred to as "the nuclear option," the liquidation of US treasuries if Washington imposes trade sanctions to force a yuan revaluation, the result of which would be an almost certain and immediate collapse of the dollar.
But according to Greg Zanetti of the Financial Network, an advisor for the McDonalds franchise, China may also be using economic threats as a means of greasing the skids for the unopposed invasion of Taiwan.
"So what is the end game?" writes Zanetti. "Well, there is now conjecture that China may willingly take the huge financial hit from the falling dollar… provided we don’t interfere with their claims to Taiwan."
"Their argument would be they acquired Hong Kong peacefully and that the envelopment of Taiwan would just be the finale of a 70 year civil war."
"Their gamble would be that Americans would not fall on their swords for Taiwan. Of course, if we agree to such a deal we have (for all intents and purposes) ceded regional hegemony to China. They would be considered the Asian power and we would begin our retreat as a global power."
Under the 1979 Taiwan Relations Act, the United States is mandated to provide support to Taiwan in the event of any hostile trade embargoes or military invasion on behalf of China.
The fact that the U.S. government, with the help of Alan Greenspan, have done their utmost to bring about a slow-paced economic meltdown by continually bad-mouthing the dollar suggests they would want to avoid the rapid decline that would be triggered if the Chinese were to dump their assets.
Though public sentiment in China and the majority of analysts think a Chinese invasion of Taiwan is unlikely, any warming of relations between Taiwan and the U.S. is usually subject to vocal rebuke.
Earlier this year, Chinese government leaders threatened to plan new war games and heighten military readiness in anticipation of any attempt by the U.S. to defend Taiwan should a Chinese invasion occur, or simply if Taiwan declares its independence, after President Bush shook hands with Taiwan's representative to the United States, Joseph Wu.
Wednesday, September 19, 2007
the usa is in deep doodoo
FROM- WHATREALLYHAPPENED.COM
The United States Is In Deep Doodoo!
United States Congressional Record - March 17, 1993 - Vol. #33, page H-1303 - Speaker- Rep. James Traficant, Jr. (Ohio) addressing the House:
"Mr. Speaker, we are here now in chapter 11. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner's report that will lead to our demise."
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Imagine for a moment that someone inherits a farm. Let's say that the farm has good topsoil, a good well, good breeding stock, good seed, and excellent farm equipment in good repair. Prior to passing into the control of the present owner the farm did a good business selling vegetables, meat, and dairy products to the local market, and it made a small profit.
But let us suppose for a moment that the present owner of the farm doesn't understand farming, or isn't even really interested in learning. The present owner has no objection to standing around looking good, so he stays at the farm, standing in front of it, looking good to passers by.
Of course, the bills still come in, so our farmer puts them on his credit card. When that bill comes due he uses another credit card, Then another. Pretty soon the interest payments alone are higher than his bills and the banks get nervous and call him. No problem. Our farmer sells the tractor, takes the money around to the various credit cards, the food store, the utilities, and pays off all his bills. Then he stands around in front of the farm looking good to passers-by, the lord of his domain.
Well, the bills still come in. Again the credit cards get loaded up. So, this time our farmer sells the harvester. Then later on, the cattle, then the chickens, then the seeds, then he leases the well to his neighbor and finally sells the top soil from his farm to another farm down the road whose soil is getting tired. The cash is taken around to the various creditors, the food store, the utilities, etc.
Now at this point, our farmer thinks everything is okay. The bills are paid, he has a little cash in his pocket, and everything is fine.
Of course, you know better. The farm simply does not exist any more; it's just an empty lot with a few buildings, and soon they will be gone as well. The path from the farmer's present condition to seizure of the property for unpaid taxes is a foregone conclusion, even if the farmer doesn't look far enough ahead to see it.
Poor, dumb, stupid farmer.
That farmer is our government, and our business leaders.
Just as our hypothetical farm has lost its soil, livestock, seed, and farm equipment, America has lost its manufacturing ability. Short sighted business leaders, with as little interest in manufacturing as our farmer had in farming, decided their own personal bonuses would be higher if they simply sold their factories rather that ran them. After WW2, the 27 American TV companies including Zenith, Emerson, RCA, GE, etc. led the world in TV technology. Then, the owners of the patents on TV technology decided they didn't need to dirty their hands by actually making the TV sets themselves any more, and they started selling licenses to manufacture, which the Japanese bought.
By 1987, the only remaining American TV company was Zenith. The patent holders get their money, but the American products which can be sold overseas are gone, along with the jobs to make them. (Today Zenith is owned by a Korean electronics company.)
The same happened in high-tech electronics. The integrated circuit was invented in the United States. But rather than focus on selling integrated circuits, the companies that owned that technology sold the machines to MAKE integrated circuits around the world, and now America sells very few chips anywhere. The patent holders have their money, but the cash flow from sales of manufactured goods, and the jobs that go with them, are gone. When Seymour Cray needed custom chips for his supercomputers, he had to order them from Japan.
The same thing has been happening in aviation. The airplane was invented in the United States, and through the 60s, we sold a lot of them around the world. But lately, all aircraft sales to foreign countries involve "offsets", a portion of the core technology that gets licensed to the purchasing nation and gets manufactured there. Bit by bit, the core technology gets bled off, taking with it jobs, and cash flow from the sale of those manufactured products. Along the way, the rights to manufacture American inventions outside America leak away on a steadily increasing basis. Even the mighty F-16 is now being manufactured overseas, under license.
To cover the loss of manufacturing jobs, our government has invented the catch phrase "service economy". This is the idiotic notion that we don't need to actually sell manufactured products; that we can grow and prosper our nation by doing each other's laundry for a fee. To conceal the loss of manufacturing jobs, the government has legislated into existence thousands upon thousands of useless paper-shuffling jobs, and declared their necessity by fiat. The most obvious is the income tax which has been so obfuscated by the government that half of you had to rely on an outside expert to figure out just what all those incomprehensible words really meant. By this device, the government has replaced those jobs that made products to sell with an equal number of jobs that produce nothing whatsoever of any worth, except to keep the unemployment figures down. This over-burdening of the American people with gratuitous regulations and paperwork has accomplished nothing except to obfuscate the loss of manufacturing jobs, and to transform the American character from innovators and inventors creating new products to that of minor clerks, peeking under each other's seat cushions for lost change.
So, with most of our manufacturing now gone, just what DOES America make? Trouble, mostly. With 4% of the world's population and 18% of the economy, we have 50% of all the lawyers, all looking to make a killing by looting those few industries that still call America home (like Microsoft). Kids don't want to be scientists and engineers; they've seen how little such people are valued in our country. Based on recent history, kids see the "big bucks" are in corporate law, specifically investment banking, leveraged buyouts, greenmail, junk bonds, in short what other countries describe as "trying to make money grow by shaking it side to side".
With America's ability to actually produce products that can compete on the open world market in decline, it's no wonder that the balance of trade is the problem it is. Nobody buys our export products because we just don't make that many any more, and like or not, we have to buy our appliances from the people who make them, which are NOT Americans. (When Ampex invented the VCR, they didn't even bother trying to find an American company to make it, they immediately sold the rights to Japan).
So, what do all these countries on the plus side of the trade imbalance do with their surplus billions? Well, they have been loaning it right back to us!
Our government engages in a practice politely called "deficit spending". Other terms which would aptly describe the practice include "counterfeiting" and "check kiting", but it all comes down to the same thing; spending money one does not actually have.
What would be a jailable offense for a normal citizen was rendered legal for the government by the Federal Reserve Act. This was not a popular piece of legislation. In fact the Democrats had campaigned in 1912 on a platform of rejection of the creation of a private bank in charge of a fiat money system. Nevertheless, on December 23, 1913, taking advantage of the absence of congressmen opposed to the creation of a fiat monetary system during the Christmas break, the Federal Reserve Act was passed.
Years later, during the great depression, Congressman Louis T. McFadden (who served twelve years as Chairman of the Committee on Banking and Currency) asked for congressional investigations of criminal conspiracy to establish the privately owned 'Federal Reserve System'. He requested impeachment of Federal officers who had violated oaths of office both in establishing and directing the Federal Reserve -- imploring Congress to investigate an incredible scope of overt criminal acts by the Federal Reserve Board and Federal Reserve Banks. McFadden even suggested that the Federal Reserve deliberately triggered the great stock market crash of 1929, in order to eventually force the passage of the Emergency Banking Act of March 9, 1933, which suspended the gold standard.
In describing the FED, McFadden remarked in the Congressional Record, House pages 1295 and 1296 on June 10, 1932:
"Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the misadministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it".
Why all the fuss over the gold standard?
Well it goes back to the original Founding Fathers and the meaning of the word "dollar". "Dollar" is actually a weight measure of silver, 371.25 grains, to be exact. Our American silver dollars are actually heavier, since other metals were added for durability. But that 371.25 grains of silver WAS the dollar, matching in weight an unbroken chain of accepted monetary units that reached back through the Spanish Milled Dollar, the Dutch Daller, back to the German Thaler; the product of a silver mine which sold its product in coins of an exact weight. The Coinage Act of 1792 defined our dollar to exactly match in weight the silver dollars in use around the world, and then defined the gold dollar to be that amount of gold which would equal the worth of silver in a silver dollar, 24.75 grains, 1/15 the weight of the silver in a silver dollar.
US Silver Dollar US Gold Dollar (same scale)
So, what's wrong with this? Nothing really. When you, as a citizen, hold a silver dollar or a gold dollar in your hand, you hold that actual worth of metal. Nothing the government can do can change the worth of the money in your control.
Take the Roman Silver Denarius pictured above. The Roman Empire is long gone, but the money that Rome issued still has worth because the coins themselves had inherent worth. Long after the collapse of the empire, Roman silver coins were still used as money, because the silver in the coin itself did not depend on the issuing government for its worth.
Of course, carrying around too much coin can be bothersome, so many nations, including our own, issued paper notes as a convenience. But that paper currency of the nation was just a convenience. The gold and silver certificates were merely "claim checks" for the equivalent weight of gold or silver held in the treasury, and which would be produced on demand when the certificate was presented. But in the end, the lawful dollar of the United States was 371.25 grains of silver, or 24.75 grains of gold.
The problem with this system from the point of view of the government or the banks is that it limits the amount of money they can work with. When the bank runs out of silver or gold (or the equivalent certificates) it can no longer lend any more money with which to earn interest. When the government runs out of gold or silver (or the equivalent certificates) it can no longer spend money (just like the rest of us).
The immediate effect of ending the gold standard was that with the paper dollar no longer legally dependent on 371.25 grains of silver or 24.75 grains of gold, more paper dollars (now called "Federal Reserve Notes") could be printed, their actual worth no longer under the control of the citizens but under the control of the issuing central bank, based on the total number of dollars printed (or created as credit lines) divided by the estimated worth of the nation's assets. The more dollars which are created out of thin air, the less each one is worth.
A federal Reserve Note.
The swindle of the system is simple. The Federal Reserve Bank hires the US Treasury to print up some money. The Federal Reserve only actually pays the treasury for the cost of the printing, they do NOT pay $1 for each 1$ printed. But the Federal Reserve turns around and loans out that money (or credit line) to banks at full face value, those banks which have exhausted their deposits then loan that Federal Reserve fiat money to you, and you must repay it in the full dollar value (plus interest) in work product, even though the Federal Reserve printed that money for pennies, or created it out of thin air in a computer.
As the Federal Reserve overprints more money, the money supply inflates, and too much money starts chasing too few goods and services, which means prices go up. But contrary to the charade put on by the Federal Reserve, inflation doesn't just come and go due to some arcane sorcery. The Federal Reserve can halt inflation any time it wants to by simply shutting down those printing presses. It therefore follows that both inflation and recession are fully under the control of the Federal Reserve. This means the cycle of inflation and recession is an intentional one; a gigantic heartbeat that pumps paper certificates out to the working class, while pumping real wealth in to the owners of the banks.
Over time, that excess of printing has destroyed the value of that dollar you think you have. If you want to know by just how much, go out and try to purchase 371.25 grains of silver right now. Usually, the deterioration is gradual. Sometimes, it has to be obvious, such as the 1985 devaluation (done to halt the trade imbalance) which triggered the Japanese real-estate grab in this country.
Many politicians have attempted to reverse this process. John F. Kennedy issued an Executive Order 11110, requiring the Treasury Department to start printing and issuing silver certificates for the silver then remaining in the US Treasury.
Kennedy decided that by returning to the constitution, which states that only Congress shall coin and regulate money, the soaring national debt could be reduced by not paying interest to the bankers of the Federal Reserve System, who print paper money then loan it to the government at interest. This was the reason he signed Executive Order 11110 which called for the issuance of $4,292,893,815 in United States Notes through the U.S. Treasury rather than the Federal Reserve System.
John F. Kennedy's United States Note.
That same day, Kennedy signed a bill changing the backing of one and two dollar bills from silver to gold, adding strength to the weakened U.S. currency.
Kennedy's comptroller of the currency, James J. Saxon, had been at odds with the powerful Federal Reserve Board for some time, encouraging broader investment and lending powers for banks that were not part of the Federal Reserve system. Saxon also had decided that non-Reserve banks could underwrite state and local general obligation bonds, again weakening the dominant Federal Reserve banks".
Kennedy's E.O. was never implemented following his assassination, and shortly afterwards, United States silver coins were taken out of circulation and replaced with the copper clad slugs in use today. These two events, the failure to print new silver certificates, and the substitution of worthless slugs for our silver coins, may explain why the Warren Commission included on its panel John J. McCloy, a man with no experience in crime, law enforcement, or national security, but who had been the President of the Chase Manhattan Bank.
It should be noted that the banks themselves are still using the gold standard. Accounts are still settled between major national banks by the transfer of gold bullion.
So here we are with a bank that legally counterfeits the money you borrow but expects a full value (plus interest) repayment. But what's good for the Federal Reserve is good for the government itself, and this is where we get back into that funny word "deficit spending". The government spends more money than it takes in. It has for many years now. The Federal Reserve, being the only lawful source of this fiat money, prints up the excess cash the government needs (or manufactures a credit line in a computer). This extra cash is treated as a loan, in order to keep the government overspending from further eroding the worth of the dollar in the world market. The government (meaning the taxpayers) is on the hook for the full face value, plus interest.
But there's another problem. The government is borrowing so much money that it drives the interest rates up! You pay MORE interest on your mortgage, car loan, and credit cards, because the government cannot balance its books. That extra interest you pay is therefore another hidden tax. The government, in its "generosity", gives you a tax credit on mortgage interest that is higher because of their own borrowing!
During the 80s, as exports dropped, and jobs moved from manufacturing to lower paying "service sector" jobs, the US tax base declined. In order to keep the jobless rate from rising, a massive defense program called the Strategic Defense Initiative was cranked up, but since this program produced no exportable product, it produced no taxable sales revenues, and hence the money poured into the project accelerated the government decline into debt. Because manufacturing was on the decline, fewer start-up companies were approaching the lending institutions, so the government loosened up the rules (while increasing the insurable deposit limit) to allow "investments" in more high risk ventures, most of which turned out to be frauds, or worse, money laundering operations for drug criminals. This includes Whitewater, Flowerwood, and Castle Grande. Despite shifting the S&L loss primarily onto the taxpayers (to reassure foreign investors that the taxpayers still made America a safe place to park their surplus cash) the government plunged further into debt.
In the 12 years of the Reagan/Bush(I) administrations, the United States went from being the world's largest creditor nation to the world's largest debtor. Many of those nations which had enjoyed huge trade surpluses started loaning that profit back to the United States with the stipulation that we work on our manufacturing, clean up our infrastructure, raise taxes, in short, clean up our act, so that investment in America makes sense!
However, we didn't quite do that.
There has been some shuffling around to try to conceal the real scope of the problem. Over the last several years, the Federal Government has been sending less tax money back to the states than it takes in in taxes. This means that the states have to borrow MORE money to cover their obligations. The net result is that the debt is being transferred to the states, to conceal its true size. The government will easily admit to a $3 trillion "publicly held" debt, grudgingly concede that it's "unfunded liability" brings that number to almost $7 trillion, but the real hard truth is that total government debt, state and federal, is now over $14 trillion dollars, or about 50,000 for every man, woman, and child inside the United States. Since 1960, the taxpayers have shelled out $15 trillion in interest payments alone, while the principal continues to rise.
Yet another stunt the government has pulled is to "borrow" from the various trust funds under its control. Some $2 billion has vanished from the trust accounts of Native Americans (presently suing the Departments of the Interior and Treasury), and nearly ¾ of a TRILLION dollars has been removed from your Social Security retirement trust fund and spent in the last 8 years.
If the government has to borrow your retirement money when things are supposed to be so good, under what conditions can it repay the money? Or is that government IOU in your retirement account merely a promise to either tax you a second time or stiff you on the benefits you thought you were paying for?
In the last 8 years, during what are supposed to be record setting good times, the Federal government has nearly DOUBLED its debt load. The estimated interest on the debt equals all the personal income tax paid by all Americans. Our government is so deep in debt that it cannot get out.
This brings us to the issue of collateral. We've borrowed so much money the lenders are getting nervous. Back during the Johnson administration Charles DeGaulle demanded the United States collateralize the loans owed to France in gold and started carting out the bullion from the treasury. This caused several other nations to demand the same and President Nixon had to slam the gold window closed or the treasury would have been emptied, since the United States was even then in debt for more money than the treasury could cover in gold.
But Nixon had to collateralize that debt somehow, and he hit upon the plan of quietly setting aside huge tracts of American land with their mineral rights in reserve to cover the outstanding debts. But since the American people were already angered over the war in Vietnam, Nixon couldn't very well admit that he was apportioning off chunks of the United States to the holders of foreign debt. So, Nixon invented the Environmental Protection Agency and passed draconian environmental laws which served to grab land with vast natural resources away from the owners and lock it away, and even more, prove to the holders of the foreign debt that US citizens were not drilling. mining, or otherwise developing those resources. From that day to this, as the government sinks deeper into debt, the government grabs more and more land, declares it a wilderness or "roadless area" or "heritage river" or "wetlands" or any one of over a dozen other such obfuscated labels, but in the end the result is the same. We The People may not use the land, in many cases are not even allowed to enter the land.
This is not about conservation, it is about collateral. YOUR land is being stolen by the government and used to secure loans the government really had no business taking out in the first place. Given that the government cannot get out of debt, and is collateralizing more and more land to avoid foreclosure, the day is not long off when the people of the United States will one day wake up and discover they are no longer citizens, but tenants.
The following map shows the current extent of all lands grabbed by the government under the guise of environmentalism.
click for full size image
In short, the United States is in deep trouble. We have lost a huge amount of our manufacturing capacity, and those products we still make do not compete well on the world market, despite the steady devaluation of the dollar. In short we have vast debts to pay and little to pay them with. Like the foolish Farmer we have sold the machinery that allowed us to prosper, and we stand around shaking our investment portfolios back and forth in the hopes that the money inside will somehow grow all by itself. It won't. It never has. The very best that can be said is that money gets moved from one person to the other.
Those nations and banks to whom we owe money have been very patient indeed with us. They know that our economies are so tightly entwined that what hurts America will hurt them. But sooner or later, possibly after a market crash, someone, in order to pay their own debts, will demand their loans to the United States be paid. Rather than get caught with "bad paper", there will be a run on the United States government.
In addition to the government debt of $14 trillion, our businesses are home to trillions more in foreign investment, kept here by the promise that the American taxpayer will be made to cover all losses. But with our manufacturing in decline and our schools producing far more lawyers than anything else, it should be obvious to the prudent observer that the American taxpayer, even if so inclined, may not be able to cover the losses of their own government, let alone a foreign investor. That has to be making them nervous as well.
This brings us to the "equities markets", most notably the stock market. Over the last several years a constant media harangue has assured us that the soaring numbers of the stock market are the sole measure of how good our economy is. But close examination of those high-priced stocks reveals that most are heavily over-valued; their price the result of market forces rather than underlying worth (earnings ability). Amazon.com, as one example, has had a terrific run-up of its stock price, even though the company itself has yet to show a profit.
The government has admitted to using covert means to prevent a market downturn; to keep the stock prices at an artificially high and overvalued level, in order to wave those impressive numbers about as "proof" that everything is okay so that the taxpayers go back to work and pay more taxes. But in order to keep those stock prices up above their actual worth, demand must be maintained to keep the prices high. In other words, NEW investors must constantly be brought into the bottom of the pyramid to keep the prices of the stocks at the top from dropping. Hence the onslaught of commercials luring neophyte investors into the stock market via "online trading". Like any Ponzi scheme, the stock market will collapse when no more new buyers can be dragged in at the bottom. As the market starts to stutter, governments (most recently Britain) have moved to dump huge reserves of gold onto the world market to depress gold prices and deter investors from deserting the stock market for gold.
Some years back I worked on the film version of "The Day The Bubble Burst", and in between playing a stock broker, I got to spend some time with the show's consultant, Mr. William Hupt, who had been on the trading floor in 1929 as it all fell apart. He still had, framed, that last strip of ticker tape that ushered in the Great Depression, and he shared some stories which have a bearing on what is going on today.
The first story Bill shared is that there had been early indications of a dangerously over-valued market, running too deep on margin, and like the Plunge Protection Team, the largest investment houses, in particular the House of Morgan, attempted to reverse the early corrections by purchasing large blocks of stock in order to create market demand and drive the prices back up. It worked all but the last time.
The second story Bill shared was that a friend of his, riding up to his office in September of 1929, overheard the elevator operator chatting about his own stock portfolio, and his investments. Something about that image of an elevator operator playing the market set off warning signals, and Bill's friend immediately liquidated his entire portfolio, just in time to miss the great crash. Many people, including the actor Charlie Chaplin, had recognized the "recruitment" of that segment of society that did NOT have risk capital as new investors as a desperate attempt to prop up an overvalued market, and got out in time to save their own personal fortunes.
In the end, there is no such thing as a free lunch. You cannot make money grow in value by shaking it back and forth from one bank to another. You cannot prosper a nation by doing each other's laundry, or filling out their government mandated and greatly obfuscated paperwork, or flinging stock certificates around which may have as little real worth as Federal Reserve Notes. To make money, to show a profit, you must make products that somebody else wants to buy, and sadly, that is a capability the United States has allowed to slip away in great measure. The "service economy" was political propaganda to make the public believe that the decline of our manufacturing ability was a good thing.
Our nation is broke, bankrupt, and having sold much of its machinery and technology (or given it away to political donors), is unable to easily return to those endeavors which once made our nation great. Our infrastructure is in decay (the percentage of roads in the US with major damage doubled last year alone), our public schools unable to produce a workforce able to function in a high-tech manufacturing environment, and those managers end engineers with manufacturing experience have in great part been lured away to other nations. The severity of our total government debt has reached a point where the promise that the taxpayers can be made to cover any foreign investment loss rings hollow, because we can no longer pay the debts our government has now.
Our nation is in trouble. We don't make many of the products we used to make. Consequently we don't have the products to sell that we used to. We don't even make most of the products we need ourselves (like that computer you're staring at this very moment). Result: we have a massive trade imbalance. Cash is flowing out of the nation, and it's not coming back in anywhere near as fast. There's no way to spin it; that is a major problem. Our nation is becoming poorer, it is hopelessly in debt, and all the artificial escalation of stock prices cannot conceal that.
And as the artificially pumped up stock market continues to decline, the true scale of the economic horror which is the product of decades of government corruption, will become apparent to all.
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A very good book on the subversion of our money system is, "Money" by Jim Ewert, and is available at http://www.principiapub.com
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Joe Smith started the day early having set his alarm clock (MADE IN JAPAN) for 6 a.m. While his coffeepot (MADE IN CHINA) was perking, he shaved with his electric razor (MADE IN HONG KONG). He put on a dress shirt (MADE IN SRI LANKA), designer jeans (MADE IN SINGAPORE) and tennis shoes (MADE IN KOREA).
After cooking his breakfast in his new electric skillet (MADE IN INDIA) he sat down with his calculator (MADE IN MEXICO) to see how much he could spend today. After setting his watch (MADE IN TAIWAN) to the radio (MADE IN INDIA) he got in his car (MADE IN GERMANY) and continued his search for a good paying AMERICAN JOB.
At the end of yet another discouraging and fruitless day, Joe decided to relax for a while. He put on his sandals (MADE IN BRAZIL) poured himself a glass of wine (MADE IN FRANCE) and turned on his TV (MADE IN INDONESIA), and then wondered why he can't find a good paying job in.....AMERICA.....
WHO'S RESPONSIBLE FOR THE NATIONAL DEBT?
Let us imagine for a moment that you go to a restaurant, you place an order for a hamburger. The proprietor of the restaurant tells you the cost is $5 for the hamburger, and you pay $5 for the hamburger. You get your food. No problems. Well worth the money you paid for it. No complaints.
Then when you are done eating, the owner of the restaurant shows up at your table, apologizes profusely, explains that he underestimated the real cost of providing you with the hamburger he agreed to serve you and hands you a bill for an additional sum he had to borrow in order to provide the meal plus interest since the start of your meal. Do you pay it? Of course not. You, the customer, entered into a verbal contract with the proprietor of the restaurant to provide you with your meal at the price agreed to by all parties prior to the transaction.
If the proprietor of the restaurant has miscalculated the cost of meeting his agreed-to obligation to the customer, is the customer obligated to cover the shortfall? No. The proprietor of the restaurant is responsible for the error, and if he cannot meet his agreed-to obligations for the agreed-upon price, he should declare bankruptcy, go out of business, and make way for a new restaurant with better fiscal sense.
Simple common sense.
Let us imagine for a moment that you live in a nation, and you request some benefits. The government tells you the cost is $500 for the benefits, and you pay $500 in taxes for the benefits. You get your benefits. No problems. Well worth the money you paid for them. No complaints.
Then when you have your benefits, the government shows up at your door, apologizes profusely, explains that it underestimated the real cost of providing you with the benefits it agreed to provide and hands you a bill for an additional sum it had to borrow in order to provide the services, plus interest since the start of your use of the benefits. Do you pay it? Of course not. You, the citizen, entered into a verbal contract with the government to provide you with your benefits at the taxes agreed to by all parties prior to the transaction.
If the government has miscalculated the cost of meeting the agreed-to obligation to the citizen, is the citizen obligated to cover the shortfall? No. The government is responsible for the error, and if it cannot meet it's agreed-to obligations for the agreed-upon price, it should declare bankruptcy, go out of business, and make way for a new government with better fiscal sense.
The claim is constantly made that "we" (meaning the citizens) have already spent the almost 6 trillion dollars that the Federal Government owes and that therefore "we" (meaning the citizens) must repay it.* This is nonsense. No taxpayer alive now ever voted or otherwise agreed to allow the government to borrow money on their behalf and agreed to underwrite the resultant ruinous interest obligation. No citizen spent that money. The government spent it, to keep promises it had no business making in the first place.
The Federal Reserve Act (Otherwise known as the currency act) was voted into law December 23, 1913. The people who voted in that law are all dead.
No taxpayer alive today had anything to say about repaying any money the government borrowed to keep it's promises. We did not have any choice in the matter. We did not choose to accept this obligation. It has been forced on us. It was manufactured for us.
Certainly the young people who are becoming voters and taxpayers this year have had no say at all about the almost 6 trillion dollar debt that our government hands to them and says, "This thou shalt pay". To so encumber our children without their permission is at best indentured servitude; at the worst outright slavery.
We The People didn't borrow that 6 trillion dollars. We The People, those of us alive today, paying taxes today, have never had the opportunity to decide whether or not we are obligated to cover the bad debts of a government that gets elected by selling $5 dollar hamburgers, only to tell us after election day that they really cost $7 and we are now obligated for that additional $2.
Every man, woman, retired senior citizen and even the tiniest newborn baby are being told that they owe $22,556 extra for services that were bought and paid for by an agreed-to tax rate.
Are those tiny newborn babies really obligated for $22,556 because of a law passed 84 years before they were born?
Are those tiny newborn babies really obligated for $22,556 because our government makes promises it cannot keep?
Or is it time for the Federal Government to declare bankruptcy and make way for something better?
To conceal the true size of the debt problem, the Federal Government has been returning less money to the states, forcing the states to borrow to meet their obligations. This transfers the debt from the Federal Government to the States. Taken together, the debt of the states and the debt of the Federal Government totals approximately $14 trillion. Guess who they want to pay it?
The United States Is In Deep Doodoo!
United States Congressional Record - March 17, 1993 - Vol. #33, page H-1303 - Speaker- Rep. James Traficant, Jr. (Ohio) addressing the House:
"Mr. Speaker, we are here now in chapter 11. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner's report that will lead to our demise."
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Imagine for a moment that someone inherits a farm. Let's say that the farm has good topsoil, a good well, good breeding stock, good seed, and excellent farm equipment in good repair. Prior to passing into the control of the present owner the farm did a good business selling vegetables, meat, and dairy products to the local market, and it made a small profit.
But let us suppose for a moment that the present owner of the farm doesn't understand farming, or isn't even really interested in learning. The present owner has no objection to standing around looking good, so he stays at the farm, standing in front of it, looking good to passers by.
Of course, the bills still come in, so our farmer puts them on his credit card. When that bill comes due he uses another credit card, Then another. Pretty soon the interest payments alone are higher than his bills and the banks get nervous and call him. No problem. Our farmer sells the tractor, takes the money around to the various credit cards, the food store, the utilities, and pays off all his bills. Then he stands around in front of the farm looking good to passers-by, the lord of his domain.
Well, the bills still come in. Again the credit cards get loaded up. So, this time our farmer sells the harvester. Then later on, the cattle, then the chickens, then the seeds, then he leases the well to his neighbor and finally sells the top soil from his farm to another farm down the road whose soil is getting tired. The cash is taken around to the various creditors, the food store, the utilities, etc.
Now at this point, our farmer thinks everything is okay. The bills are paid, he has a little cash in his pocket, and everything is fine.
Of course, you know better. The farm simply does not exist any more; it's just an empty lot with a few buildings, and soon they will be gone as well. The path from the farmer's present condition to seizure of the property for unpaid taxes is a foregone conclusion, even if the farmer doesn't look far enough ahead to see it.
Poor, dumb, stupid farmer.
That farmer is our government, and our business leaders.
Just as our hypothetical farm has lost its soil, livestock, seed, and farm equipment, America has lost its manufacturing ability. Short sighted business leaders, with as little interest in manufacturing as our farmer had in farming, decided their own personal bonuses would be higher if they simply sold their factories rather that ran them. After WW2, the 27 American TV companies including Zenith, Emerson, RCA, GE, etc. led the world in TV technology. Then, the owners of the patents on TV technology decided they didn't need to dirty their hands by actually making the TV sets themselves any more, and they started selling licenses to manufacture, which the Japanese bought.
By 1987, the only remaining American TV company was Zenith. The patent holders get their money, but the American products which can be sold overseas are gone, along with the jobs to make them. (Today Zenith is owned by a Korean electronics company.)
The same happened in high-tech electronics. The integrated circuit was invented in the United States. But rather than focus on selling integrated circuits, the companies that owned that technology sold the machines to MAKE integrated circuits around the world, and now America sells very few chips anywhere. The patent holders have their money, but the cash flow from sales of manufactured goods, and the jobs that go with them, are gone. When Seymour Cray needed custom chips for his supercomputers, he had to order them from Japan.
The same thing has been happening in aviation. The airplane was invented in the United States, and through the 60s, we sold a lot of them around the world. But lately, all aircraft sales to foreign countries involve "offsets", a portion of the core technology that gets licensed to the purchasing nation and gets manufactured there. Bit by bit, the core technology gets bled off, taking with it jobs, and cash flow from the sale of those manufactured products. Along the way, the rights to manufacture American inventions outside America leak away on a steadily increasing basis. Even the mighty F-16 is now being manufactured overseas, under license.
To cover the loss of manufacturing jobs, our government has invented the catch phrase "service economy". This is the idiotic notion that we don't need to actually sell manufactured products; that we can grow and prosper our nation by doing each other's laundry for a fee. To conceal the loss of manufacturing jobs, the government has legislated into existence thousands upon thousands of useless paper-shuffling jobs, and declared their necessity by fiat. The most obvious is the income tax which has been so obfuscated by the government that half of you had to rely on an outside expert to figure out just what all those incomprehensible words really meant. By this device, the government has replaced those jobs that made products to sell with an equal number of jobs that produce nothing whatsoever of any worth, except to keep the unemployment figures down. This over-burdening of the American people with gratuitous regulations and paperwork has accomplished nothing except to obfuscate the loss of manufacturing jobs, and to transform the American character from innovators and inventors creating new products to that of minor clerks, peeking under each other's seat cushions for lost change.
So, with most of our manufacturing now gone, just what DOES America make? Trouble, mostly. With 4% of the world's population and 18% of the economy, we have 50% of all the lawyers, all looking to make a killing by looting those few industries that still call America home (like Microsoft). Kids don't want to be scientists and engineers; they've seen how little such people are valued in our country. Based on recent history, kids see the "big bucks" are in corporate law, specifically investment banking, leveraged buyouts, greenmail, junk bonds, in short what other countries describe as "trying to make money grow by shaking it side to side".
With America's ability to actually produce products that can compete on the open world market in decline, it's no wonder that the balance of trade is the problem it is. Nobody buys our export products because we just don't make that many any more, and like or not, we have to buy our appliances from the people who make them, which are NOT Americans. (When Ampex invented the VCR, they didn't even bother trying to find an American company to make it, they immediately sold the rights to Japan).
So, what do all these countries on the plus side of the trade imbalance do with their surplus billions? Well, they have been loaning it right back to us!
Our government engages in a practice politely called "deficit spending". Other terms which would aptly describe the practice include "counterfeiting" and "check kiting", but it all comes down to the same thing; spending money one does not actually have.
What would be a jailable offense for a normal citizen was rendered legal for the government by the Federal Reserve Act. This was not a popular piece of legislation. In fact the Democrats had campaigned in 1912 on a platform of rejection of the creation of a private bank in charge of a fiat money system. Nevertheless, on December 23, 1913, taking advantage of the absence of congressmen opposed to the creation of a fiat monetary system during the Christmas break, the Federal Reserve Act was passed.
Years later, during the great depression, Congressman Louis T. McFadden (who served twelve years as Chairman of the Committee on Banking and Currency) asked for congressional investigations of criminal conspiracy to establish the privately owned 'Federal Reserve System'. He requested impeachment of Federal officers who had violated oaths of office both in establishing and directing the Federal Reserve -- imploring Congress to investigate an incredible scope of overt criminal acts by the Federal Reserve Board and Federal Reserve Banks. McFadden even suggested that the Federal Reserve deliberately triggered the great stock market crash of 1929, in order to eventually force the passage of the Emergency Banking Act of March 9, 1933, which suspended the gold standard.
In describing the FED, McFadden remarked in the Congressional Record, House pages 1295 and 1296 on June 10, 1932:
"Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the misadministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it".
Why all the fuss over the gold standard?
Well it goes back to the original Founding Fathers and the meaning of the word "dollar". "Dollar" is actually a weight measure of silver, 371.25 grains, to be exact. Our American silver dollars are actually heavier, since other metals were added for durability. But that 371.25 grains of silver WAS the dollar, matching in weight an unbroken chain of accepted monetary units that reached back through the Spanish Milled Dollar, the Dutch Daller, back to the German Thaler; the product of a silver mine which sold its product in coins of an exact weight. The Coinage Act of 1792 defined our dollar to exactly match in weight the silver dollars in use around the world, and then defined the gold dollar to be that amount of gold which would equal the worth of silver in a silver dollar, 24.75 grains, 1/15 the weight of the silver in a silver dollar.
US Silver Dollar US Gold Dollar (same scale)
So, what's wrong with this? Nothing really. When you, as a citizen, hold a silver dollar or a gold dollar in your hand, you hold that actual worth of metal. Nothing the government can do can change the worth of the money in your control.
Take the Roman Silver Denarius pictured above. The Roman Empire is long gone, but the money that Rome issued still has worth because the coins themselves had inherent worth. Long after the collapse of the empire, Roman silver coins were still used as money, because the silver in the coin itself did not depend on the issuing government for its worth.
Of course, carrying around too much coin can be bothersome, so many nations, including our own, issued paper notes as a convenience. But that paper currency of the nation was just a convenience. The gold and silver certificates were merely "claim checks" for the equivalent weight of gold or silver held in the treasury, and which would be produced on demand when the certificate was presented. But in the end, the lawful dollar of the United States was 371.25 grains of silver, or 24.75 grains of gold.
The problem with this system from the point of view of the government or the banks is that it limits the amount of money they can work with. When the bank runs out of silver or gold (or the equivalent certificates) it can no longer lend any more money with which to earn interest. When the government runs out of gold or silver (or the equivalent certificates) it can no longer spend money (just like the rest of us).
The immediate effect of ending the gold standard was that with the paper dollar no longer legally dependent on 371.25 grains of silver or 24.75 grains of gold, more paper dollars (now called "Federal Reserve Notes") could be printed, their actual worth no longer under the control of the citizens but under the control of the issuing central bank, based on the total number of dollars printed (or created as credit lines) divided by the estimated worth of the nation's assets. The more dollars which are created out of thin air, the less each one is worth.
A federal Reserve Note.
The swindle of the system is simple. The Federal Reserve Bank hires the US Treasury to print up some money. The Federal Reserve only actually pays the treasury for the cost of the printing, they do NOT pay $1 for each 1$ printed. But the Federal Reserve turns around and loans out that money (or credit line) to banks at full face value, those banks which have exhausted their deposits then loan that Federal Reserve fiat money to you, and you must repay it in the full dollar value (plus interest) in work product, even though the Federal Reserve printed that money for pennies, or created it out of thin air in a computer.
As the Federal Reserve overprints more money, the money supply inflates, and too much money starts chasing too few goods and services, which means prices go up. But contrary to the charade put on by the Federal Reserve, inflation doesn't just come and go due to some arcane sorcery. The Federal Reserve can halt inflation any time it wants to by simply shutting down those printing presses. It therefore follows that both inflation and recession are fully under the control of the Federal Reserve. This means the cycle of inflation and recession is an intentional one; a gigantic heartbeat that pumps paper certificates out to the working class, while pumping real wealth in to the owners of the banks.
Over time, that excess of printing has destroyed the value of that dollar you think you have. If you want to know by just how much, go out and try to purchase 371.25 grains of silver right now. Usually, the deterioration is gradual. Sometimes, it has to be obvious, such as the 1985 devaluation (done to halt the trade imbalance) which triggered the Japanese real-estate grab in this country.
Many politicians have attempted to reverse this process. John F. Kennedy issued an Executive Order 11110, requiring the Treasury Department to start printing and issuing silver certificates for the silver then remaining in the US Treasury.
Kennedy decided that by returning to the constitution, which states that only Congress shall coin and regulate money, the soaring national debt could be reduced by not paying interest to the bankers of the Federal Reserve System, who print paper money then loan it to the government at interest. This was the reason he signed Executive Order 11110 which called for the issuance of $4,292,893,815 in United States Notes through the U.S. Treasury rather than the Federal Reserve System.
John F. Kennedy's United States Note.
That same day, Kennedy signed a bill changing the backing of one and two dollar bills from silver to gold, adding strength to the weakened U.S. currency.
Kennedy's comptroller of the currency, James J. Saxon, had been at odds with the powerful Federal Reserve Board for some time, encouraging broader investment and lending powers for banks that were not part of the Federal Reserve system. Saxon also had decided that non-Reserve banks could underwrite state and local general obligation bonds, again weakening the dominant Federal Reserve banks".
Kennedy's E.O. was never implemented following his assassination, and shortly afterwards, United States silver coins were taken out of circulation and replaced with the copper clad slugs in use today. These two events, the failure to print new silver certificates, and the substitution of worthless slugs for our silver coins, may explain why the Warren Commission included on its panel John J. McCloy, a man with no experience in crime, law enforcement, or national security, but who had been the President of the Chase Manhattan Bank.
It should be noted that the banks themselves are still using the gold standard. Accounts are still settled between major national banks by the transfer of gold bullion.
So here we are with a bank that legally counterfeits the money you borrow but expects a full value (plus interest) repayment. But what's good for the Federal Reserve is good for the government itself, and this is where we get back into that funny word "deficit spending". The government spends more money than it takes in. It has for many years now. The Federal Reserve, being the only lawful source of this fiat money, prints up the excess cash the government needs (or manufactures a credit line in a computer). This extra cash is treated as a loan, in order to keep the government overspending from further eroding the worth of the dollar in the world market. The government (meaning the taxpayers) is on the hook for the full face value, plus interest.
But there's another problem. The government is borrowing so much money that it drives the interest rates up! You pay MORE interest on your mortgage, car loan, and credit cards, because the government cannot balance its books. That extra interest you pay is therefore another hidden tax. The government, in its "generosity", gives you a tax credit on mortgage interest that is higher because of their own borrowing!
During the 80s, as exports dropped, and jobs moved from manufacturing to lower paying "service sector" jobs, the US tax base declined. In order to keep the jobless rate from rising, a massive defense program called the Strategic Defense Initiative was cranked up, but since this program produced no exportable product, it produced no taxable sales revenues, and hence the money poured into the project accelerated the government decline into debt. Because manufacturing was on the decline, fewer start-up companies were approaching the lending institutions, so the government loosened up the rules (while increasing the insurable deposit limit) to allow "investments" in more high risk ventures, most of which turned out to be frauds, or worse, money laundering operations for drug criminals. This includes Whitewater, Flowerwood, and Castle Grande. Despite shifting the S&L loss primarily onto the taxpayers (to reassure foreign investors that the taxpayers still made America a safe place to park their surplus cash) the government plunged further into debt.
In the 12 years of the Reagan/Bush(I) administrations, the United States went from being the world's largest creditor nation to the world's largest debtor. Many of those nations which had enjoyed huge trade surpluses started loaning that profit back to the United States with the stipulation that we work on our manufacturing, clean up our infrastructure, raise taxes, in short, clean up our act, so that investment in America makes sense!
However, we didn't quite do that.
There has been some shuffling around to try to conceal the real scope of the problem. Over the last several years, the Federal Government has been sending less tax money back to the states than it takes in in taxes. This means that the states have to borrow MORE money to cover their obligations. The net result is that the debt is being transferred to the states, to conceal its true size. The government will easily admit to a $3 trillion "publicly held" debt, grudgingly concede that it's "unfunded liability" brings that number to almost $7 trillion, but the real hard truth is that total government debt, state and federal, is now over $14 trillion dollars, or about 50,000 for every man, woman, and child inside the United States. Since 1960, the taxpayers have shelled out $15 trillion in interest payments alone, while the principal continues to rise.
Yet another stunt the government has pulled is to "borrow" from the various trust funds under its control. Some $2 billion has vanished from the trust accounts of Native Americans (presently suing the Departments of the Interior and Treasury), and nearly ¾ of a TRILLION dollars has been removed from your Social Security retirement trust fund and spent in the last 8 years.
If the government has to borrow your retirement money when things are supposed to be so good, under what conditions can it repay the money? Or is that government IOU in your retirement account merely a promise to either tax you a second time or stiff you on the benefits you thought you were paying for?
In the last 8 years, during what are supposed to be record setting good times, the Federal government has nearly DOUBLED its debt load. The estimated interest on the debt equals all the personal income tax paid by all Americans. Our government is so deep in debt that it cannot get out.
This brings us to the issue of collateral. We've borrowed so much money the lenders are getting nervous. Back during the Johnson administration Charles DeGaulle demanded the United States collateralize the loans owed to France in gold and started carting out the bullion from the treasury. This caused several other nations to demand the same and President Nixon had to slam the gold window closed or the treasury would have been emptied, since the United States was even then in debt for more money than the treasury could cover in gold.
But Nixon had to collateralize that debt somehow, and he hit upon the plan of quietly setting aside huge tracts of American land with their mineral rights in reserve to cover the outstanding debts. But since the American people were already angered over the war in Vietnam, Nixon couldn't very well admit that he was apportioning off chunks of the United States to the holders of foreign debt. So, Nixon invented the Environmental Protection Agency and passed draconian environmental laws which served to grab land with vast natural resources away from the owners and lock it away, and even more, prove to the holders of the foreign debt that US citizens were not drilling. mining, or otherwise developing those resources. From that day to this, as the government sinks deeper into debt, the government grabs more and more land, declares it a wilderness or "roadless area" or "heritage river" or "wetlands" or any one of over a dozen other such obfuscated labels, but in the end the result is the same. We The People may not use the land, in many cases are not even allowed to enter the land.
This is not about conservation, it is about collateral. YOUR land is being stolen by the government and used to secure loans the government really had no business taking out in the first place. Given that the government cannot get out of debt, and is collateralizing more and more land to avoid foreclosure, the day is not long off when the people of the United States will one day wake up and discover they are no longer citizens, but tenants.
The following map shows the current extent of all lands grabbed by the government under the guise of environmentalism.
click for full size image
In short, the United States is in deep trouble. We have lost a huge amount of our manufacturing capacity, and those products we still make do not compete well on the world market, despite the steady devaluation of the dollar. In short we have vast debts to pay and little to pay them with. Like the foolish Farmer we have sold the machinery that allowed us to prosper, and we stand around shaking our investment portfolios back and forth in the hopes that the money inside will somehow grow all by itself. It won't. It never has. The very best that can be said is that money gets moved from one person to the other.
Those nations and banks to whom we owe money have been very patient indeed with us. They know that our economies are so tightly entwined that what hurts America will hurt them. But sooner or later, possibly after a market crash, someone, in order to pay their own debts, will demand their loans to the United States be paid. Rather than get caught with "bad paper", there will be a run on the United States government.
In addition to the government debt of $14 trillion, our businesses are home to trillions more in foreign investment, kept here by the promise that the American taxpayer will be made to cover all losses. But with our manufacturing in decline and our schools producing far more lawyers than anything else, it should be obvious to the prudent observer that the American taxpayer, even if so inclined, may not be able to cover the losses of their own government, let alone a foreign investor. That has to be making them nervous as well.
This brings us to the "equities markets", most notably the stock market. Over the last several years a constant media harangue has assured us that the soaring numbers of the stock market are the sole measure of how good our economy is. But close examination of those high-priced stocks reveals that most are heavily over-valued; their price the result of market forces rather than underlying worth (earnings ability). Amazon.com, as one example, has had a terrific run-up of its stock price, even though the company itself has yet to show a profit.
The government has admitted to using covert means to prevent a market downturn; to keep the stock prices at an artificially high and overvalued level, in order to wave those impressive numbers about as "proof" that everything is okay so that the taxpayers go back to work and pay more taxes. But in order to keep those stock prices up above their actual worth, demand must be maintained to keep the prices high. In other words, NEW investors must constantly be brought into the bottom of the pyramid to keep the prices of the stocks at the top from dropping. Hence the onslaught of commercials luring neophyte investors into the stock market via "online trading". Like any Ponzi scheme, the stock market will collapse when no more new buyers can be dragged in at the bottom. As the market starts to stutter, governments (most recently Britain) have moved to dump huge reserves of gold onto the world market to depress gold prices and deter investors from deserting the stock market for gold.
Some years back I worked on the film version of "The Day The Bubble Burst", and in between playing a stock broker, I got to spend some time with the show's consultant, Mr. William Hupt, who had been on the trading floor in 1929 as it all fell apart. He still had, framed, that last strip of ticker tape that ushered in the Great Depression, and he shared some stories which have a bearing on what is going on today.
The first story Bill shared is that there had been early indications of a dangerously over-valued market, running too deep on margin, and like the Plunge Protection Team, the largest investment houses, in particular the House of Morgan, attempted to reverse the early corrections by purchasing large blocks of stock in order to create market demand and drive the prices back up. It worked all but the last time.
The second story Bill shared was that a friend of his, riding up to his office in September of 1929, overheard the elevator operator chatting about his own stock portfolio, and his investments. Something about that image of an elevator operator playing the market set off warning signals, and Bill's friend immediately liquidated his entire portfolio, just in time to miss the great crash. Many people, including the actor Charlie Chaplin, had recognized the "recruitment" of that segment of society that did NOT have risk capital as new investors as a desperate attempt to prop up an overvalued market, and got out in time to save their own personal fortunes.
In the end, there is no such thing as a free lunch. You cannot make money grow in value by shaking it back and forth from one bank to another. You cannot prosper a nation by doing each other's laundry, or filling out their government mandated and greatly obfuscated paperwork, or flinging stock certificates around which may have as little real worth as Federal Reserve Notes. To make money, to show a profit, you must make products that somebody else wants to buy, and sadly, that is a capability the United States has allowed to slip away in great measure. The "service economy" was political propaganda to make the public believe that the decline of our manufacturing ability was a good thing.
Our nation is broke, bankrupt, and having sold much of its machinery and technology (or given it away to political donors), is unable to easily return to those endeavors which once made our nation great. Our infrastructure is in decay (the percentage of roads in the US with major damage doubled last year alone), our public schools unable to produce a workforce able to function in a high-tech manufacturing environment, and those managers end engineers with manufacturing experience have in great part been lured away to other nations. The severity of our total government debt has reached a point where the promise that the taxpayers can be made to cover any foreign investment loss rings hollow, because we can no longer pay the debts our government has now.
Our nation is in trouble. We don't make many of the products we used to make. Consequently we don't have the products to sell that we used to. We don't even make most of the products we need ourselves (like that computer you're staring at this very moment). Result: we have a massive trade imbalance. Cash is flowing out of the nation, and it's not coming back in anywhere near as fast. There's no way to spin it; that is a major problem. Our nation is becoming poorer, it is hopelessly in debt, and all the artificial escalation of stock prices cannot conceal that.
And as the artificially pumped up stock market continues to decline, the true scale of the economic horror which is the product of decades of government corruption, will become apparent to all.
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A very good book on the subversion of our money system is, "Money" by Jim Ewert, and is available at http://www.principiapub.com
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Joe Smith started the day early having set his alarm clock (MADE IN JAPAN) for 6 a.m. While his coffeepot (MADE IN CHINA) was perking, he shaved with his electric razor (MADE IN HONG KONG). He put on a dress shirt (MADE IN SRI LANKA), designer jeans (MADE IN SINGAPORE) and tennis shoes (MADE IN KOREA).
After cooking his breakfast in his new electric skillet (MADE IN INDIA) he sat down with his calculator (MADE IN MEXICO) to see how much he could spend today. After setting his watch (MADE IN TAIWAN) to the radio (MADE IN INDIA) he got in his car (MADE IN GERMANY) and continued his search for a good paying AMERICAN JOB.
At the end of yet another discouraging and fruitless day, Joe decided to relax for a while. He put on his sandals (MADE IN BRAZIL) poured himself a glass of wine (MADE IN FRANCE) and turned on his TV (MADE IN INDONESIA), and then wondered why he can't find a good paying job in.....AMERICA.....
WHO'S RESPONSIBLE FOR THE NATIONAL DEBT?
Let us imagine for a moment that you go to a restaurant, you place an order for a hamburger. The proprietor of the restaurant tells you the cost is $5 for the hamburger, and you pay $5 for the hamburger. You get your food. No problems. Well worth the money you paid for it. No complaints.
Then when you are done eating, the owner of the restaurant shows up at your table, apologizes profusely, explains that he underestimated the real cost of providing you with the hamburger he agreed to serve you and hands you a bill for an additional sum he had to borrow in order to provide the meal plus interest since the start of your meal. Do you pay it? Of course not. You, the customer, entered into a verbal contract with the proprietor of the restaurant to provide you with your meal at the price agreed to by all parties prior to the transaction.
If the proprietor of the restaurant has miscalculated the cost of meeting his agreed-to obligation to the customer, is the customer obligated to cover the shortfall? No. The proprietor of the restaurant is responsible for the error, and if he cannot meet his agreed-to obligations for the agreed-upon price, he should declare bankruptcy, go out of business, and make way for a new restaurant with better fiscal sense.
Simple common sense.
Let us imagine for a moment that you live in a nation, and you request some benefits. The government tells you the cost is $500 for the benefits, and you pay $500 in taxes for the benefits. You get your benefits. No problems. Well worth the money you paid for them. No complaints.
Then when you have your benefits, the government shows up at your door, apologizes profusely, explains that it underestimated the real cost of providing you with the benefits it agreed to provide and hands you a bill for an additional sum it had to borrow in order to provide the services, plus interest since the start of your use of the benefits. Do you pay it? Of course not. You, the citizen, entered into a verbal contract with the government to provide you with your benefits at the taxes agreed to by all parties prior to the transaction.
If the government has miscalculated the cost of meeting the agreed-to obligation to the citizen, is the citizen obligated to cover the shortfall? No. The government is responsible for the error, and if it cannot meet it's agreed-to obligations for the agreed-upon price, it should declare bankruptcy, go out of business, and make way for a new government with better fiscal sense.
The claim is constantly made that "we" (meaning the citizens) have already spent the almost 6 trillion dollars that the Federal Government owes and that therefore "we" (meaning the citizens) must repay it.* This is nonsense. No taxpayer alive now ever voted or otherwise agreed to allow the government to borrow money on their behalf and agreed to underwrite the resultant ruinous interest obligation. No citizen spent that money. The government spent it, to keep promises it had no business making in the first place.
The Federal Reserve Act (Otherwise known as the currency act) was voted into law December 23, 1913. The people who voted in that law are all dead.
No taxpayer alive today had anything to say about repaying any money the government borrowed to keep it's promises. We did not have any choice in the matter. We did not choose to accept this obligation. It has been forced on us. It was manufactured for us.
Certainly the young people who are becoming voters and taxpayers this year have had no say at all about the almost 6 trillion dollar debt that our government hands to them and says, "This thou shalt pay". To so encumber our children without their permission is at best indentured servitude; at the worst outright slavery.
We The People didn't borrow that 6 trillion dollars. We The People, those of us alive today, paying taxes today, have never had the opportunity to decide whether or not we are obligated to cover the bad debts of a government that gets elected by selling $5 dollar hamburgers, only to tell us after election day that they really cost $7 and we are now obligated for that additional $2.
Every man, woman, retired senior citizen and even the tiniest newborn baby are being told that they owe $22,556 extra for services that were bought and paid for by an agreed-to tax rate.
Are those tiny newborn babies really obligated for $22,556 because of a law passed 84 years before they were born?
Are those tiny newborn babies really obligated for $22,556 because our government makes promises it cannot keep?
Or is it time for the Federal Government to declare bankruptcy and make way for something better?
To conceal the true size of the debt problem, the Federal Government has been returning less money to the states, forcing the states to borrow to meet their obligations. This transfers the debt from the Federal Government to the States. Taken together, the debt of the states and the debt of the Federal Government totals approximately $14 trillion. Guess who they want to pay it?
limbo- how low can it go?
AP
Dollar Hits New Low Against Euro
Wednesday September 19, 6:36 am ET
By Matt Moore, AP Business Writer
Dollar Tumbles Briefly to Record Low on Fed Benchmark Rate Cut
FRANKFURT, Germany (AP) -- The dollar fell to an all-time low against the euro early Wednesday in the aftermath of a half-percent rate cut by the U.S. central bank.
The euro rose to $1.3987, a new high, in morning European trading before settling back to $1.3956. That was below the $1.3971 it bought in late New York trading the night before.
The Federal Reserve cut its benchmark interest rate a half-point to 4.75 percent, the first reduction in this key rate in four years. Most dealers had expected a quarter-point cut. Lower interest rates, used to jump-start the economy, can weaken a currency by giving investors less return on investments denominated in the currency.
The Fed acted to calm financial markets afraid of an impending recession due to a slumping housing market, the credit crisis, and weak August jobs data. The Fed said it "will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth."
The pound fell against the dollar to $2.0013, below the $2.0131 it bought in New York trading late Tuesday night.
The rising euro has yet to cause great consternation among most of the 13 nations that use the common currency, but as it rises, it can dampen exports, particularly to the United States, where the prices for anything from automobiles to steel to consumer goods are more expensive to American buyers.
That, coupled with the subprime credit crisis, has some officials wary though.
On Wednesday, German Economics Minister Michael Glos said that the U.S. crisis could dampen the economic recovery in his country, Europe's biggest economy.
In an interview published in the daily Bild newspaper, he said that "nobody knows how the U.S. financial crisis will affect Germany in the end."
He also said that a weakened dollar, along with higher oil prices, has the potential to slow Germany's growth, particularly among exports. Germany is the world's biggest exporter, just ahead of China and the United States.
"If the dollar's exchange rate further weakens, it will cast a shadow on our export chances."
The dollar strengthened against the Japanese currency, rising to 115.83 yen from 115.74 yen on Monday after the Bank of Japan kept its benchmark interest rate steady at half a percent and kept its assessment of the national economy unchanged.
The bank, in a monthly report released Wednesday, left its assessment for the world's second largest economy the same as in the previous month, saying moderate growth was holding up. The bank also repeated its optimistic outlook for the future, while expressing some caution about the U.S. economy.
"Japan's economy is expected to expand moderately," it said.
AP Business Writer Yuri Kageyama in Tokyo contributed to this report.
Dollar Hits New Low Against Euro
Wednesday September 19, 6:36 am ET
By Matt Moore, AP Business Writer
Dollar Tumbles Briefly to Record Low on Fed Benchmark Rate Cut
FRANKFURT, Germany (AP) -- The dollar fell to an all-time low against the euro early Wednesday in the aftermath of a half-percent rate cut by the U.S. central bank.
The euro rose to $1.3987, a new high, in morning European trading before settling back to $1.3956. That was below the $1.3971 it bought in late New York trading the night before.
The Federal Reserve cut its benchmark interest rate a half-point to 4.75 percent, the first reduction in this key rate in four years. Most dealers had expected a quarter-point cut. Lower interest rates, used to jump-start the economy, can weaken a currency by giving investors less return on investments denominated in the currency.
The Fed acted to calm financial markets afraid of an impending recession due to a slumping housing market, the credit crisis, and weak August jobs data. The Fed said it "will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth."
The pound fell against the dollar to $2.0013, below the $2.0131 it bought in New York trading late Tuesday night.
The rising euro has yet to cause great consternation among most of the 13 nations that use the common currency, but as it rises, it can dampen exports, particularly to the United States, where the prices for anything from automobiles to steel to consumer goods are more expensive to American buyers.
That, coupled with the subprime credit crisis, has some officials wary though.
On Wednesday, German Economics Minister Michael Glos said that the U.S. crisis could dampen the economic recovery in his country, Europe's biggest economy.
In an interview published in the daily Bild newspaper, he said that "nobody knows how the U.S. financial crisis will affect Germany in the end."
He also said that a weakened dollar, along with higher oil prices, has the potential to slow Germany's growth, particularly among exports. Germany is the world's biggest exporter, just ahead of China and the United States.
"If the dollar's exchange rate further weakens, it will cast a shadow on our export chances."
The dollar strengthened against the Japanese currency, rising to 115.83 yen from 115.74 yen on Monday after the Bank of Japan kept its benchmark interest rate steady at half a percent and kept its assessment of the national economy unchanged.
The bank, in a monthly report released Wednesday, left its assessment for the world's second largest economy the same as in the previous month, saying moderate growth was holding up. The bank also repeated its optimistic outlook for the future, while expressing some caution about the U.S. economy.
"Japan's economy is expected to expand moderately," it said.
AP Business Writer Yuri Kageyama in Tokyo contributed to this report.
this is what usa will be like if we dont stop it now
click here
Hell and heroism: Tyranny that rules by terror is threatened by brave few
In a rare report from Burma, Andrew Buncombe, Asia correspondent, talks to some of the dissenters who live in fear of the ruling junta
Published: 19 September 2007
The junta has a list – a list that has reverberated through this rain-soaked, fear-ridden city. Arranged in order of their "wanted" priority, the list contains 22 names and faces, addresses and personal details, anything that could help the military find these pro-democracy activists and throw them behind bars.
Scores have already been locked up, dragged off to jails from which emerge reports of abuse and torture. But the junta is desperate to find those still at large.
Burma's military government, which has ruled the former British colony with a rare brutality for more than half a century, is facing its most serious challenge for at least a decade.
Every day there are flashes of resistance, flickering protests against the regime's unbending rule. And yesterday, in what may be a critical development, more than 1,000 saffron-robed Buddhist monks marched in defiant protest in two separate cities, only to have tear-gas grenades fired at them by the authorities.
This wave of protests was started by a group of charismatic activists that came of age during widespread demonstrations two decades ago and severely threatened the regime. They seized on an unexplained government decision to increase fuel prices and anger over the soaring prices fed into general despair among the downtrodden population about the regime's cruelty and ruinous governance.
Indeed, it may be the sinister normality of Burma that is the country's most disturbing signature. In the decaying colonial city of Rangoon there is barely a policeman or a soldier in sight, people with money are busy buying air conditioners and stereo systems driven in from China while traders set up their stalls on the street and hawk their wares to passers-by.
"In the past the regime has arrested people and then released them after a few months," said one Western diplomat in Rangoon, Burma's largest city. "I don't think that is the case here. I think the regime is preparing to throw the book at [the activists it has arrested]. I think they are very sophisticated at spotting leaders who people will rally around."
The diplomat added: "I was not here in 1988 but people say that then there were [initially] sporadic demonstrations and that eventually everybody joined in. If the monks join in, that could make a huge difference. They could get people out. That is what happened in '88."
The ability to rally ordinary people, to persuade them to confront the police and militias and to march against the regime is precisely why the authorities are so keen to trace those activists still free. The list of names, which includes seven women, has been circulated to government officials and hotel owners in Rangoon, who have been told to report anything suspicious. Police have even been showing up at foreign embassies with photographs and asking whether activists have taken refuge inside.
"We have been instructed to inform higher authorities immediately if we sight any of these people in our area," one official said.
The Burmese regime, known as the State Peace and Development Council (SPDC), has a strong and clear advantage as it confronts its opponents. Two decades after the demonstrations of 1988, which it put down with the death of thousands of civilians, it is wealthier, more secure and more experienced at dealing with protesters. It also knows that the overwhelming majority of its citizens are too terrified to act. And having banned the international media and silenced its own press, it has controlled almost all the information that reaches the eyes and ears of the public.
Yet over the course of four storm-lashed days during which Rangoon's broken streets flooded and people huddled under makeshift shelters, I was able to speak to half-a-dozen pro-democracy campaigners desperate for change. The names of these individuals – members of the National League for Democracy, the political group headed by the imprisoned Nobel laureate Aung Sang Suu Kyi – are not on the junta's list, but they, like so many others, live in constant fear and spoke only on condition of anonymity.
"The big difference is not with us but with the government. We are the same but they have money and experience," said a senior NLD member who acts as the group's spokesman.
The first of the protests that triggered this clampdown by the SPDC was launched last month by members of the '88 Generation Students group, an organisation that was heavily involved in the protests 19 years ago. Among those arrested was a high-profile activist and poet who goes by the nickname Min Ko Naing or "Conqueror of Kings", and who was only released from jail in 2006 after 15 years imprisonment.
There has been no word on Min Ko Naing's fate since he was dragged away on 22 August. NLD sources said about 65 people had been arrested with a dozen or so leaders being held in the country's notorious Insein Jail and the remainder detained at the Kyaik Ka San park, a former race course in Rangoon.
Campaigners based in neighbouring Thailand say the number of people arrested is about 120. Diplomats say they have heard reports the prisoners have been tortured but they have no confirmation.
Given the regime's iron grip on the media, it is difficult for campaigners to organise. A 70-year-old journalist who was released from jail two years ago having served 13 years, said: "There is no free press. We have no chance to speak to one another. We cannot tell other people about our experiences. Even the NLD cannot open its office. There is no freedom. No democracy. No rule of law."
Another journalist, who like the 70-year-old, can now only write using a pen name and then only about topics that the newspapers deem "safe", spent 17 years in jail. He was also released in 2005. "It was very hard to survive [in jail] but we have to struggle for our cause," he said.
After nearly two decades in prison, he emerged to see that, while the cause for which he had given so much had barely progressed, the underlying desire of the people remained as strong as ever. "After 17 years, nothing had changed, just the roads. People had not changed. People still encourage me to try to get democracy."
That determination is revealed by the flurry of scattered protests that have broken out across the country, coinciding with a massive hike in fuel prices by the government that saw the cost of petrol and compressed natural gas increase by 500 per cent.
While I was with the NLD spokesman, his mobile phone constantly rang, often with news of another demonstration. One morning, his phone trilling like a wind chime, he reported there had been a demonstration in the town of Lappottar, 200 miles to the north of Rangoon, when three activists had tried to set off on a march to the former capital.
The following day he reported there had been a demonstration in Taung Goke township, where two people had been arrested. He said a local NLD official claimed 10,000 people had come out in support of the protesters, a number he said he could not personally believe but the local official was adamant was correct.
The Burmese military regime, in control of the country since 1962, has been widely condemned by the international community and some of its neighbours.
When the authorities recently concluded a 15-year effort to draw up a new constitution, the resulting document was condemned by the United States State Department as a "sham".
It said the national conventions that agreed the constitution "clearly do not represent the will of the Burmese people, nor are they a step toward democracy". Even Laura Bush, the first lady, spoke out against the regime.
One Western diplomat, also based in Rangoon, said of the convention: "The regime has no understanding of what democracy means, of the value of dialogue, or of the abhorrent way in which it suppresses the voice of the people. The way it has ignored the demands of the ethnic groups in the National Convention and the unnecessary detention of people peacefully making their point indicates the regime's true intention: to keep tight control and to ensure power and wealth remains in the hands of the few."
But despite complete sanctions enacted by the US and partial sanctions imposed by the EU and Britain, the regime is still courted by regional powers such as India and China which are desperate to secure deals for Burma's vast natural gas resources – much of which is located in the offshore Shwe gasfields. Anything other than the most muted criticism of the regime's human rights record has been shoved aside as the two countries battle over their shared neighbour's resources. Both have signed arms deals with the regime.
Matthew Smith, a campaigner with the group EarthRights International, said: "The regime's brutality and readiness for violence in part secures its daily survival, but the gas deals are integral on a longer-term economic level, providing billions of dollars to private and state bank accounts that would otherwise be relatively empty.
"From this we can infer at least two things: one, the regime will stop at nothing to secure the export of its most lucrative asset, natural gas, and two, foreign oil and gas corporations are in a unique position of power because they provide the capital and expertise the regime presently lacks."
Campaigners insist progress can be made with Burma. They say the international community is finally starting to pay more attention to those making a stand in the country.
On the ground in Burma it is hard to find hope. People are not only terrified but they see little prospect for their country. One afternoon a tour guide nervously led the way to a tea shop, away from watchful eyes. Sitting on a low plastic seat he casually revealed that he, too, had been a political prisoner in the early 1990s and that he had spent two years in jail. For the first six months, his family had no idea where he was.
The 42-year-old said he had four children. "I tell my children that they must study hard. I tell them to do well at English," he said, leaning his body forward and speaking almost in a whisper. "I want them to move abroad – there is no future for them in Burma."
And yet for all the despair, there are perhaps flashes of hope. Despite the regime's efforts to ban a free media and limit what information the public receives, in the past couple of years Rangoon has seen the opening of numerous internet cafes where those who can afford to, log on and sit for hours. These cafes are usually packed with young people, bashing away at their keyboards. Perhaps they are sharing information with others that the regime does not want the world to know.
Hell and heroism: Tyranny that rules by terror is threatened by brave few
In a rare report from Burma, Andrew Buncombe, Asia correspondent, talks to some of the dissenters who live in fear of the ruling junta
Published: 19 September 2007
The junta has a list – a list that has reverberated through this rain-soaked, fear-ridden city. Arranged in order of their "wanted" priority, the list contains 22 names and faces, addresses and personal details, anything that could help the military find these pro-democracy activists and throw them behind bars.
Scores have already been locked up, dragged off to jails from which emerge reports of abuse and torture. But the junta is desperate to find those still at large.
Burma's military government, which has ruled the former British colony with a rare brutality for more than half a century, is facing its most serious challenge for at least a decade.
Every day there are flashes of resistance, flickering protests against the regime's unbending rule. And yesterday, in what may be a critical development, more than 1,000 saffron-robed Buddhist monks marched in defiant protest in two separate cities, only to have tear-gas grenades fired at them by the authorities.
This wave of protests was started by a group of charismatic activists that came of age during widespread demonstrations two decades ago and severely threatened the regime. They seized on an unexplained government decision to increase fuel prices and anger over the soaring prices fed into general despair among the downtrodden population about the regime's cruelty and ruinous governance.
Indeed, it may be the sinister normality of Burma that is the country's most disturbing signature. In the decaying colonial city of Rangoon there is barely a policeman or a soldier in sight, people with money are busy buying air conditioners and stereo systems driven in from China while traders set up their stalls on the street and hawk their wares to passers-by.
"In the past the regime has arrested people and then released them after a few months," said one Western diplomat in Rangoon, Burma's largest city. "I don't think that is the case here. I think the regime is preparing to throw the book at [the activists it has arrested]. I think they are very sophisticated at spotting leaders who people will rally around."
The diplomat added: "I was not here in 1988 but people say that then there were [initially] sporadic demonstrations and that eventually everybody joined in. If the monks join in, that could make a huge difference. They could get people out. That is what happened in '88."
The ability to rally ordinary people, to persuade them to confront the police and militias and to march against the regime is precisely why the authorities are so keen to trace those activists still free. The list of names, which includes seven women, has been circulated to government officials and hotel owners in Rangoon, who have been told to report anything suspicious. Police have even been showing up at foreign embassies with photographs and asking whether activists have taken refuge inside.
"We have been instructed to inform higher authorities immediately if we sight any of these people in our area," one official said.
The Burmese regime, known as the State Peace and Development Council (SPDC), has a strong and clear advantage as it confronts its opponents. Two decades after the demonstrations of 1988, which it put down with the death of thousands of civilians, it is wealthier, more secure and more experienced at dealing with protesters. It also knows that the overwhelming majority of its citizens are too terrified to act. And having banned the international media and silenced its own press, it has controlled almost all the information that reaches the eyes and ears of the public.
Yet over the course of four storm-lashed days during which Rangoon's broken streets flooded and people huddled under makeshift shelters, I was able to speak to half-a-dozen pro-democracy campaigners desperate for change. The names of these individuals – members of the National League for Democracy, the political group headed by the imprisoned Nobel laureate Aung Sang Suu Kyi – are not on the junta's list, but they, like so many others, live in constant fear and spoke only on condition of anonymity.
"The big difference is not with us but with the government. We are the same but they have money and experience," said a senior NLD member who acts as the group's spokesman.
The first of the protests that triggered this clampdown by the SPDC was launched last month by members of the '88 Generation Students group, an organisation that was heavily involved in the protests 19 years ago. Among those arrested was a high-profile activist and poet who goes by the nickname Min Ko Naing or "Conqueror of Kings", and who was only released from jail in 2006 after 15 years imprisonment.
There has been no word on Min Ko Naing's fate since he was dragged away on 22 August. NLD sources said about 65 people had been arrested with a dozen or so leaders being held in the country's notorious Insein Jail and the remainder detained at the Kyaik Ka San park, a former race course in Rangoon.
Campaigners based in neighbouring Thailand say the number of people arrested is about 120. Diplomats say they have heard reports the prisoners have been tortured but they have no confirmation.
Given the regime's iron grip on the media, it is difficult for campaigners to organise. A 70-year-old journalist who was released from jail two years ago having served 13 years, said: "There is no free press. We have no chance to speak to one another. We cannot tell other people about our experiences. Even the NLD cannot open its office. There is no freedom. No democracy. No rule of law."
Another journalist, who like the 70-year-old, can now only write using a pen name and then only about topics that the newspapers deem "safe", spent 17 years in jail. He was also released in 2005. "It was very hard to survive [in jail] but we have to struggle for our cause," he said.
After nearly two decades in prison, he emerged to see that, while the cause for which he had given so much had barely progressed, the underlying desire of the people remained as strong as ever. "After 17 years, nothing had changed, just the roads. People had not changed. People still encourage me to try to get democracy."
That determination is revealed by the flurry of scattered protests that have broken out across the country, coinciding with a massive hike in fuel prices by the government that saw the cost of petrol and compressed natural gas increase by 500 per cent.
While I was with the NLD spokesman, his mobile phone constantly rang, often with news of another demonstration. One morning, his phone trilling like a wind chime, he reported there had been a demonstration in the town of Lappottar, 200 miles to the north of Rangoon, when three activists had tried to set off on a march to the former capital.
The following day he reported there had been a demonstration in Taung Goke township, where two people had been arrested. He said a local NLD official claimed 10,000 people had come out in support of the protesters, a number he said he could not personally believe but the local official was adamant was correct.
The Burmese military regime, in control of the country since 1962, has been widely condemned by the international community and some of its neighbours.
When the authorities recently concluded a 15-year effort to draw up a new constitution, the resulting document was condemned by the United States State Department as a "sham".
It said the national conventions that agreed the constitution "clearly do not represent the will of the Burmese people, nor are they a step toward democracy". Even Laura Bush, the first lady, spoke out against the regime.
One Western diplomat, also based in Rangoon, said of the convention: "The regime has no understanding of what democracy means, of the value of dialogue, or of the abhorrent way in which it suppresses the voice of the people. The way it has ignored the demands of the ethnic groups in the National Convention and the unnecessary detention of people peacefully making their point indicates the regime's true intention: to keep tight control and to ensure power and wealth remains in the hands of the few."
But despite complete sanctions enacted by the US and partial sanctions imposed by the EU and Britain, the regime is still courted by regional powers such as India and China which are desperate to secure deals for Burma's vast natural gas resources – much of which is located in the offshore Shwe gasfields. Anything other than the most muted criticism of the regime's human rights record has been shoved aside as the two countries battle over their shared neighbour's resources. Both have signed arms deals with the regime.
Matthew Smith, a campaigner with the group EarthRights International, said: "The regime's brutality and readiness for violence in part secures its daily survival, but the gas deals are integral on a longer-term economic level, providing billions of dollars to private and state bank accounts that would otherwise be relatively empty.
"From this we can infer at least two things: one, the regime will stop at nothing to secure the export of its most lucrative asset, natural gas, and two, foreign oil and gas corporations are in a unique position of power because they provide the capital and expertise the regime presently lacks."
Campaigners insist progress can be made with Burma. They say the international community is finally starting to pay more attention to those making a stand in the country.
On the ground in Burma it is hard to find hope. People are not only terrified but they see little prospect for their country. One afternoon a tour guide nervously led the way to a tea shop, away from watchful eyes. Sitting on a low plastic seat he casually revealed that he, too, had been a political prisoner in the early 1990s and that he had spent two years in jail. For the first six months, his family had no idea where he was.
The 42-year-old said he had four children. "I tell my children that they must study hard. I tell them to do well at English," he said, leaning his body forward and speaking almost in a whisper. "I want them to move abroad – there is no future for them in Burma."
And yet for all the despair, there are perhaps flashes of hope. Despite the regime's efforts to ban a free media and limit what information the public receives, in the past couple of years Rangoon has seen the opening of numerous internet cafes where those who can afford to, log on and sit for hours. These cafes are usually packed with young people, bashing away at their keyboards. Perhaps they are sharing information with others that the regime does not want the world to know.
10 most polluted places on earth
click here
Hell on earth: The 10 most polluted places on the planet
Published: 14 September 2007
SUMGAYIT, AZERBAIJAN
Affected people: 275,000
Pollutants: Organic chemicals, oil, heavy metals including mercury.
Source: Petrochemical and industrial sites
Once a Soviet centre of industry and the location of more than 40 rubber, chlorine and pesticides factories, Sumgayit is now home to piles of untreated sewage and mercury-contaminated sludge. Cancer rates are up to 50 per cent higher than the rest of Azerbaijan and a birth defects are common.
SUKINDA, INDIA
Affected people: 2,600,000
Pollutants: Hexavalent chromium and other metals
Source: Chromite mines and processing
Home to 97 per cent of India's chromite deposits, Sukinda's mines spew out millions of tons of waste rock into the rivers that residents drink from. A quarter of nearby residents have pollution-related illnesses
TIANJIN, CHINA
Affected people: 140,000
Pollutants: Lead and other heavy metals
Source: Mining and processing
Tianjin, one of China's largest lead-production bases, has no pollution controls. Forced to breathe air with 10 times the legal levels of lead, residents suffer lower IQs, impaired growth and brain damage.
CHERNOBYL, UKRAINE
Affected people: Initially 5.5m, now disputed
Pollutants: Radioactive dust
Source: Meltdown of reactor core in 1986
From 1992 to 2002, 4,000 youngsters born in and around the 19-mile exclusion zone that still exists around the destroyed reactor developed thyroid cancer. Five million people still live in contaminated areas.
DZERZINSK, RUSSIA
Affected people: 300,000
Pollutants: Chemicals and toxic by-products, including Sarin and VX gas. Also lead, phenols.
Source: Cold War-era chemical weapons manufacturing. The principal site of chemical weapons production during the Cold War, Dzerzinsk is now a centre of chemical manufacturing. Over a period of 70 years until 1998, 300,000 tons of chemical waste were dumped, leaching almost 200 chemicals into groundwater. The drinking water is heavily contaminated and the life expectancy for men is just 42.
NORILSK, RUSSIA
Affected people: 134,000
Pollutants: Air pollution - particulates, sulphur dioxide, heavy metals (nickel, copper, cobalt, lead, selenium), phenols, hydrogen sulphide.
Source: The mining and processing of nickel and other related metals.
The snow is black in Norilsk, and 16 per cent of child deaths at the former Siberian slave labour camp are caused by respiratory illnesses related to the city's mining operations. Residents at the world's largest heavy metals smelting complex suffer a horrifying range of illnesses including respiratory illnesses and lung cancer. Birth defects are common.
VAPI, INDIA
Affected People: 71,000
Pollutants: Chemicals, heavy metals
Source: Industry estates
At the end of India's 400 km-long "Golden Corridor" of industrial estates, Vapi has more than 50 factories producing petrochemicals, fertilisers, dyes and paint, discharging dangerous levels of pollutants into the groundwater. Doctors report a high incidence of respiratory diseases and spontaneous abortions.
KABWE, ZAMBIA
Affected people: 255,000
Pollutants: Lead, cadmium
Source: Lead mining and processing
Children in Kabwe still bathe in the heavily polluted river that runs from the town's lead mine, which ran without safeguards from 1902 to 1994. Many have blood lead levels considered fatal.
LINFEN, CHINA
Affected People: 3,000,000
Pollutants: Fly-ash, carbon monoxide, nitrogen oxides, sulphur dioxide, arsenic, lead.
Source: Automobile and industrial emissions
Linfen's residents are forced to breathe the toxic output from hundreds of unregulated mines, factories and refineries. Clinics report an explosion in bronchitis, pneumonia and lung cancer.
LA OROYA, PERU
Affected people: 35,000
Pollutants: Lead, copper, zinc, sulphur dioxide.
Source: Heavy-metal mining and processing
The US owners of a metallic smelter in this mining town have failed to clean up the plant, which exposes residents to toxic emissions and waste. Ninety-nine per cent of children living in or around La Oyroya have blood lead levels that exceed safe limits and acid rain caused by sulphur dioxide in the air has decimated vegetation in the area.
Hell on earth: The 10 most polluted places on the planet
Published: 14 September 2007
SUMGAYIT, AZERBAIJAN
Affected people: 275,000
Pollutants: Organic chemicals, oil, heavy metals including mercury.
Source: Petrochemical and industrial sites
Once a Soviet centre of industry and the location of more than 40 rubber, chlorine and pesticides factories, Sumgayit is now home to piles of untreated sewage and mercury-contaminated sludge. Cancer rates are up to 50 per cent higher than the rest of Azerbaijan and a birth defects are common.
SUKINDA, INDIA
Affected people: 2,600,000
Pollutants: Hexavalent chromium and other metals
Source: Chromite mines and processing
Home to 97 per cent of India's chromite deposits, Sukinda's mines spew out millions of tons of waste rock into the rivers that residents drink from. A quarter of nearby residents have pollution-related illnesses
TIANJIN, CHINA
Affected people: 140,000
Pollutants: Lead and other heavy metals
Source: Mining and processing
Tianjin, one of China's largest lead-production bases, has no pollution controls. Forced to breathe air with 10 times the legal levels of lead, residents suffer lower IQs, impaired growth and brain damage.
CHERNOBYL, UKRAINE
Affected people: Initially 5.5m, now disputed
Pollutants: Radioactive dust
Source: Meltdown of reactor core in 1986
From 1992 to 2002, 4,000 youngsters born in and around the 19-mile exclusion zone that still exists around the destroyed reactor developed thyroid cancer. Five million people still live in contaminated areas.
DZERZINSK, RUSSIA
Affected people: 300,000
Pollutants: Chemicals and toxic by-products, including Sarin and VX gas. Also lead, phenols.
Source: Cold War-era chemical weapons manufacturing. The principal site of chemical weapons production during the Cold War, Dzerzinsk is now a centre of chemical manufacturing. Over a period of 70 years until 1998, 300,000 tons of chemical waste were dumped, leaching almost 200 chemicals into groundwater. The drinking water is heavily contaminated and the life expectancy for men is just 42.
NORILSK, RUSSIA
Affected people: 134,000
Pollutants: Air pollution - particulates, sulphur dioxide, heavy metals (nickel, copper, cobalt, lead, selenium), phenols, hydrogen sulphide.
Source: The mining and processing of nickel and other related metals.
The snow is black in Norilsk, and 16 per cent of child deaths at the former Siberian slave labour camp are caused by respiratory illnesses related to the city's mining operations. Residents at the world's largest heavy metals smelting complex suffer a horrifying range of illnesses including respiratory illnesses and lung cancer. Birth defects are common.
VAPI, INDIA
Affected People: 71,000
Pollutants: Chemicals, heavy metals
Source: Industry estates
At the end of India's 400 km-long "Golden Corridor" of industrial estates, Vapi has more than 50 factories producing petrochemicals, fertilisers, dyes and paint, discharging dangerous levels of pollutants into the groundwater. Doctors report a high incidence of respiratory diseases and spontaneous abortions.
KABWE, ZAMBIA
Affected people: 255,000
Pollutants: Lead, cadmium
Source: Lead mining and processing
Children in Kabwe still bathe in the heavily polluted river that runs from the town's lead mine, which ran without safeguards from 1902 to 1994. Many have blood lead levels considered fatal.
LINFEN, CHINA
Affected People: 3,000,000
Pollutants: Fly-ash, carbon monoxide, nitrogen oxides, sulphur dioxide, arsenic, lead.
Source: Automobile and industrial emissions
Linfen's residents are forced to breathe the toxic output from hundreds of unregulated mines, factories and refineries. Clinics report an explosion in bronchitis, pneumonia and lung cancer.
LA OROYA, PERU
Affected people: 35,000
Pollutants: Lead, copper, zinc, sulphur dioxide.
Source: Heavy-metal mining and processing
The US owners of a metallic smelter in this mining town have failed to clean up the plant, which exposes residents to toxic emissions and waste. Ninety-nine per cent of children living in or around La Oyroya have blood lead levels that exceed safe limits and acid rain caused by sulphur dioxide in the air has decimated vegetation in the area.
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