Socio-Economics History Blog

Socio-Economics & History Commentary

Ron Paul on AIG Bonuses, Congress and Federal Reserve

  • Ron Paul – We shouldn’t be in the business of bailing out these companies ….. No one has read the (stimulus) Bill before passing them.. The Fed (Federal Reserve) doesn’t have to answer any questions on how they spend the money… We can’t audit the Federal Reserve..

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March 21, 2009 Posted by | Economics | , , | 1 Comment

U.N. Envoy sees Israeli War Crimes in Gaza

  • May G_d bless Richard Falk and all peace loving Jews. Reuters reports :
     
    A United Nations human rights investigator said on Thursday that Israel‘s military assault on densely populated Gaza appeared to constitute a grave war crime.
     
    Richard Falk, U.N. special rapporteur on human rights in the Palestinian territories, said the Geneva Conventions required warring forces to distinguish between military targets and surrounding civilians.
     
    “If it is not possible to do so, then launching the attacks is inherently unlawful and would seem to constitute a war crime of the greatest magnitude under international law,” Falk said.
     
    “On the basis of the preliminary evidence available, there is reason to reach this conclusion,” he wrote in an annual 26-page report submitted to the U.N. Human Rights Council.
     
    Falk gave the same death toll from Israel’s offensive in December and January — 1,434 Palestinians, including 960 civilians — as the Palestinian human rights center.
     
    Israel, which lost 13 people during the war, disputes the figures and has accused Hamas fighters in Gaza of using civilians as human shields during the conflict — an allegation which Falk said should be investigated.
     
    He called the Israeli attacks a “massive assault on a densely populated urbanized setting” in which the entire civilian population had been subjected to “an inhumane form of warfare that kills, maims and inflicts mental harm.”
     
    “As all borders were sealed, civilians could not escape from the orbit of harm,” he said.
     
    This denial of people’s right to flee the war zone as refugees may also constitute a crime against humanity, he said.
     
    WAR CRIMES PROBE
    Falk called for an independent experts group to probe possible war crimes committed by both Israeli forces and Hamas. It should gather eyewitness testimony as well as explanations from Israeli and Palestinian military commanders.
     
    Violations included Israel’s alleged “targeting of schools, mosques and ambulances” during the offensive, which lasted from December 27 to January 18, and its use of weapons including white phosphorus, as well as Hamas’s firing of rockets at civilian targets in southern Israel.
     
    Falk said that Israel’s blockade of the coastal strip of 1.5 million people violated the Geneva Conventions and this suggested further war crimes and possibly crimes against humanity.
     
    The aggression was not legally justified and may represent a “crime against peace” — a principle established at the Nuremberg trials of Nazi war criminals, according to Falk, an American law professor who serves as the Human Rights Council‘s independent investigator.
     
    Falk, who is Jewish, suggested the Security Council might set up an ad hoc criminal tribunal to establish accountability for war crimes in Gaza, noting Israel has not signed the Rome statutes establishing the International Criminal Court.
     
    He was denied entry to Israel two weeks before the assault started, forcing him to abort a planned mission to Gaza. In his report, he said that the refusal had set an “unfortunate precedent” for treatment of a special rapporteur.
     
    On Monday, he is to present his report formally to the Human Rights Council, a 47-member forum where Islamic and African countries backed by China, Cuba and Russia have a majority. Neither Israel nor its chief ally the United States are members.

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March 21, 2009 Posted by | GeoPolitics | , , | 3 Comments

Gold New Upleg as Lunatic Fed Creates $1 Trillion Dollars Out of Thin Air

gold-chart-20-mar-09
  • Gold rocket is blasting off. Adam Hamilton writes :
      
    After gold’s breathtaking $38 surge in 15 minutes Wednesday, there is much renewed interest in the Ancient Metal of Kings. The Federal Reserve, which is clearly being run by lunatics, publicly announced it is going to create over a trillion dollars out of thin air to monetize US debt. This degree of pure monetary inflation is utterly unprecedented.
     
    Gold soared because it remains the best asset to own in inflationary times. Inflation is an immoral stealth tax levied on everyone. But it hits those of modest means the hardest, because rising everyday living expenses consume a higher proportion of their incomes. When the Fed injects fiat money into the economy, relatively more dollars chasing relatively fewer goods and services bid up prices on everything.
     
    But gold always stays ahead of the rising inflationary tide. New mining only adds 1% to 2% to the global above-ground gold supply annually. Yet even before this week’s monetization announcement, the Fed grew the US monetary base by an astounding and frightening 88.1% over the past year. With vastly more dollars bidding on relatively far less gold, a rising gold price is the inevitable result of this inflation.
     
    The prospect of unbridled monetary inflation rightly terrifies investors. Mountains of cash, the highest relative and absolute levels ever, languish in money-market funds earnings zero interest today due to the Fed’s interest-rate manipulations. As monetary inflation accelerates, this capital will suffer increasing real losses of purchasing power. So the natural defense against this central-bank predation is to move capital into gold.
     
    Thanks to gold’s inflation-driven surge this week, a lot of traders are starting to discuss a new gold upleg. They are right, a gold upleg is coming, but they are late to the party. Today’s gold upleg started way back in the dark days of November when gold neared $700. Believe it or not, I had already planned to write this essay, and had these charts mostly built, before the stunning Fed announcement on Wednesday.
     
    But Ben Bernanke desperately trying to become the most notorious inflationist the world has ever seen only adds bullish fuel to the gold fire. While this week’s monetization pledge surprised mainstreamers and the
    deluded deflationists , the gold strength is no surprise to students of the markets. Gold’s new upleg was very technically impressive and well-established for months before the Fed’s inflation unveiling.
     
    As you can see in this chart, Wednesday’s amazing gold action is barely a blip relative to gold’s relentless upleg progress since its panic lows. This metal’s exceptional strength during the tough market months we’ve witnessed lately has made it one of the best-performing assets anywhere. Walking through this upleg’s technicals leads to a better understanding of where gold is likely to go from here.
        ……
    The bottom line is gold is indeed in a new upleg. But this week’s inflationist-Fed announcement, while it will accelerate this gold upleg, certainly didn’t ignite it. Gold has already been powering higher for over 4 months now. This upleg’s technicals have been textbook-perfect and very bullish. The Fed-driven inflation spike, while exciting, is merely a blip within this already well-established uptrend. 
       …..
    ….  it is mainstream stock investors who are leading this charge into gold. Even before the Fed declared to the world it was going to inflate without limit, stock demand via this ETF was hitting records. All this newfound awareness of the coming inflation should accelerate this bullish trend for mainstream investors to prudently add gold exposure to their portfolios.  
     
  • See also :
     
    Gold Soars by 8% as Fed Shocks Market Announcement of Dollar Debasement !
    Fed Destroys the US Dollar, Gold and Euro Soar !
    China Backs Russia’s Call for New World Reserve Currency!
    U.N. Panel says World Should Ditch Dollar ! US is Already Bankrupt !
    Quantitative Easing – Death Knell for Dollar, Re-Igniting the Gold Rocket !
    Let the Currency Wars Begin?
    World Financial System in a State of Insolvency !
    Global Financial & Economic Meltdown
    Global Monetary Meltdown in 2009 ?
    Dollar Devaluation, Debt Default & Gold
    Massive US Dollar Devaluation Against Gold During 2009
    Obama, Roosevelt, Gold Confiscation and Dollar Devaluation 

Disclaimer – I am not a financial advisor. This is not an advice to buy, sell or hold any stocks or bonds or any precious metals.

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March 21, 2009 Posted by | Economics | , , , , , | Comments Off on Gold New Upleg as Lunatic Fed Creates $1 Trillion Dollars Out of Thin Air

Gold Soars by 8% as Fed Shocks Market Announcement of Dollar Debasement !

Disclaimer – I am not a financial advisor. This is not an advice to buy, sell or hold any stocks or bonds or any precious metals.

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March 21, 2009 Posted by | Economics | , , , , | 1 Comment

Israeli Soldiers Admit to Deliberate Killing of Gaza Civilians

Palestininian women beside the rubble of their houses. Israeli soldiers were allegedly ordered to throw furniture out of homes - (Ali Ali/EPA)

Palestininian women beside the rubble of their houses. Israeli soldiers were allegedly ordered to throw furniture out of homes - (Ali Ali/EPA)

  • Peace loving Jews throughout the world need to speak out against the genocide of Palestinians. Israel must return to G_d. Remember the commandments of G_d :
     
    Exodus 22:21
    “You shall neither mistreat a stranger nor oppress him, for you were strangers in the land of Egypt.”
     
    Exodus 23:9
    “Also you shall not oppress a stranger, for you know the heart of a stranger, because you were strangers in the land of Egypt.”
     
    Leviticus 19:34
    The stranger who dwells among you shall be to you as one born among you, and you shall love him as yourself; for you were strangers in the land of Egypt: I am the LORD your G_d.
     
    Deuteronomy 10:19
    Therefore love the stranger, for you were strangers in the land of Egypt.
       
  • The Times reports :
      
    The Israeli army has been forced to open an investigation into the conduct of its troops in Gaza after damning testimony from its own front line soldiers revealed the killing of civilians and rules of engagement so lax that one combatant said that they amounted on occasion to “cold-blooded murder”.
     
    The revelations, compiled by the head of an Israel military academy who declared that he was “shocked” at the findings, come as international rights groups are calling for independent inquiries into the conduct of both sides in the three-week Israeli offensive against Palestinian Islamists.
     
    The soldiers’ testimonies include accounts of an unarmed old woman being shot at a distance of 100 yards, a woman and her two children being killed after Israeli soldiers ordered them from their house into the line of fire of a sniper and soldiers clearing houses by shooting anyone they encountered on sight.
     
    “That’s the beauty of Gaza. You see a man walking, he doesn’t have to have a weapon, and you can shoot him,” one soldier told Danny Zamir, the head of the Rabin pre-military academy, who asked him why a company commander ordered an elderly woman to be shot. 
      
    “I gathered the graduate students of the course who fought in Gaza, to hear their impressions from the fighting. I wasn’t prepared for any of the stuff I heard there. I was shocked,” Mr Zamir said. “I think that the writing was on the wall, but we just didn’t want to see it, we didn’t want to face it.”
     
    One non-commissioned officer told Mr Zamir, himself a deputy battalion commander in the reserves, that the army “fired a lot of rounds and killed a lot of people in order for us not to be injured or shot at.
     
    “When we entered a house, we were supposed to bust down the door and start shooting inside and just go up storey by storey… I call that murder. Each storey, if we identify a person, we shoot them. I asked myself – how is this reasonable?”
     
    The same unnamed NCO said that his commanding officer ordered soldiers on to a rooftop to shoot an old woman crossing a main street during the fighting, which a Palestinian rights groups said left 1,434 people dead, 960 of them civilians.
     
    “I don’t know whether she was suspicious, not suspicious, I don’t know her story,” the NCO said. “I do know that my officer sent people to the roof in order to take her out… It was cold-blooded murder.”
     
    Another NCO recounted a military blunder that led to a mother and her two children being shot dead by an Israeli sniper. “We had taken over the house… and the family was released and told to go right. A mother and two children got confused and went left… The sniper on the roof wasn’t told that this was okay and that he shouldn’t shoot… you can say he just did what he was told… he was told not to let anyone approach the left flank and he shot at them.
     
    “I don’t know whether he first shot at their feet or not, but he killed them,” the soldier said. The soldiers’ accounts were submitted anonymously at a meeting at the academy around a month ago. The Israel army said that it had started an investigation, but that this was the first time it had heard such testimony, despite having debriefed troops itself.
     
    Breaking The Silence, an organisation of former soldiers who gather witness accounts from troops in the Palestinian territories, said that its own investigation into Operation Cast Lead, as the war was known in Israel, had revealed a similar picture of the fighting.
     
    “It’s definitely in line with what we are hearing,” said one of the researchers.
     
    Another disturbing element reported by the soldiers was the role of military rabbis in distributing booklets that framed the fighting as a religious war. “All these articles had a clear message: we are the Jewish people, we have come to the land by miraculous means, and now we have to fight to remove the Gentiles who are getting in our way and preventing us from occupying the Holy Land… a great many soldiers had a feeling throughout this operation of a religious war,” said one soldier.
      
    There were also accounts of soldiers being ordered to throw all the furniture out of Palestinians’ homes as they were taken over.
     
    “We simply threw everything out the windows to make room and order. The entire contents of the house flew out the windows: refrigerator, plates, furniture. The order was to remove the entire contents of the house.”

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March 21, 2009 Posted by | GeoPolitics | , , | Comments Off on Israeli Soldiers Admit to Deliberate Killing of Gaza Civilians

Nouriel Roubini – The United States Of Ponzi !

  • America’s own Dr Doom, professor Roubini (NYU) op-ed about the sham that is America’s economy :
      
    Americans lived in a “Made-off” and Ponzi bubble economy for a decade or even longer. Madoff is the mirror of the American economy and of its over-leveraged agents: a house of cards of leverage over leverage by households, financial firms and corporations that has now collapsed in a heap.
     
    When you put zero down on your home, and you thus have no equity in your home, your leverage is literally infinite and you are playing a Ponzi game.
     
    And the bank that lent you, with zero down, a NINJA (no income, no jobs and assets) liar loan that was interest-only for a while, with negative amortization and an initial teaser rate, was also playing a Ponzi game.
     
    And private equity firms that did over a $1 trillion of leveraged buyouts (LBOs) in the last few years with a debt-to-earnings ratio of 10 or above were also Ponzi firms playing a Ponzi game.
     
    A government that will issue trillions of dollars of new debt to pay for this severe recession and socialize private losses may risk becoming a Ponzi government if–in the medium term–it does not return to fiscal discipline and debt sustainability.
      
    A country that has–for over 25 years–spent more than income and thus run an endless string of current account deficit–and has thus become the largest net foreign debtor in the world (with net foreign liabilities that are likely to be over $3 trillion by the end of this year)–is also a Ponzi country that may eventually default on its foreign debt if it does not, over time, tighten its belt and start running smaller current account deficits and actual trade surpluses.
     
    Whenever you persistently consume more than your income year after year (a household with negative savings, a government with budget deficit, a firm or financial institution with persistent losses, a country with a current account deficit) you are playing a Ponzi game. In the jargon of formal economics, you are not satisfying your long-run inter-temporal budget constraint as you borrow to finance the interest rate on your previous debt, and are thus following an unsustainable debt dynamics that eventually leads to outright insolvency.
      
    According to Hyman Minsky and economic theory, Ponzi agents(households, firms, banks) are those who need to borrow more to repay both principal and interest on their previous debt; i.e., Minsky’s “Ponzi borrowers” cannot service either interest or principal payments on their debts. They are called “Ponzi borrowers” as they need persistently increasing prices of the assets they invested in to keep on refinancing their debt obligations.
     
    By this standard, U.S. households whose debt relative to income went from 65% 15 years ago, to 100% in 2000, to 135% today were playing a Ponzi game.
     
    And an economy where the total debt to GDP ratio (of households, financial firms and corporations) is now 350% is a Made-Off Ponzi economy. And now that home values have fallen 20% (and they will fall another 20% before they bottom out) and equity prices have fallen over 50% (and may fall further), using homes as an ATM to finance Ponzi consumption is not feasible any more. The party is over for households, banks and non-bank highly leveraged corporations.
     
    The bursting of the housing bubble, the equity bubble, the hedge funds bubble and the private equity bubble showed that most of the “wealth” that supported the massive leverage and overspending of agents in the economy was a fake bubble-driven wealth. Now that these bubble have burst, it is clear that the emperor had no clothes, and that we are the naked emperor. A rising bubble tide was hiding the fact that most Americans and their banks were swimming naked; and the bursting of the bubble is the low tide that shows who was naked.
     
    Madoff may now spend the rest of his life in prison. U.S. households, financial and non-financial firms, and government may spend the next generation in debtor’s prison having to tighten their belts to pay for the losses inflicted by a decade or more of reckless leverage, over-consumption and risk-taking.
      
    Americans, let us look at ourselves in the mirror: Madoff is us and Mr. Ponzi is us!

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March 21, 2009 Posted by | Economics | , , , | 1 Comment

China Backs Russia’s Call for New World Reserve Currency!

  • The end of the USD hegemony is near. China and many emerging countries are backing Russia’s call for a new international reserve currency. Reuters reports :
      
    China and other emerging nations back Russia’s call for a discussion on how to replace the dollar as the world’s primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures in the text of its proposals to the April G20 summit published last Monday.
     
    Calls for a rethink of the dollar’s status as world’s sole benchmark currency come amid concerns about its long-term value as the U.S. Federal Reserve moved to pump more than a trillion dollars of new cash into the ailing economy late Wednesday.
     
    Russia met representatives of China, India and Brazil ahead of the G20 finance ministers meeting last week, as the big emerging powers seek to up their influence on decision making globally. Their first ever joint communique did not mention a new currency but the source said the issue was discussed.
     
    “They (China) did not formally put forward their position for the G20 summit but unofficially they had distributed their paper regarding the same ideas (the need for the new currency),” the source told Reuters, speaking on condition of anonymity.
     
    The source said the Chinese paper envisaged the International Monetary Fund’s Special Drawing Rights (SDRs) being first assigned a role of a clearing currency on some transactions and then gradually becoming the main global reserve currency. “They said that the role of reserve currency should be given to SDR,” the source said.
     
    A U.N. panel of experts is also looking at using expanded SDRs, originally created by the International Monetary Fund in 1969, but now used mainly as an accounting unit within similar organisations as a new reserve currency instead of the dollar.
     
    Currency specialist Avinash Persaud, a member of the U.N. panel, told a
    Reuters Funds Summit on Wednesday that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.
     
    The SDR and the old Ecu are essentially combinations of currencies, weighted to a constituent’s economic clout, which can be valued against other currencies and against those inside the basket.
     
    The Russian source said Moscow was aware that the emergence of the new global currency would not happen overnight and said its goal was to initiate a discussion about it at the G20 summit in London on April 2.
     
    The source said that India did not object to the discussion but was not prepared to take the lead. The source said South Korea and South Africa backed the idea, while developed nations were not “allergic” to it. “We are not waiting for everyone to say: ‘How beautifully it has all been formulated, let’s subscribe to it’,” the source said. “The main idea is to start a discussion about it.
     
       
  • The USD is heading for a massive collapse. The movement towards a 1 world currency is gathering strength. See also :
     
    U.N. Panel says World Should Ditch Dollar ! US is Already Bankrupt !
    Quantitative Easing – Death Knell for Dollar, Re-Igniting the Gold Rocket !
    Let the Currency Wars Begin?
    World Financial System in a State of Insolvency !
    Global Financial & Economic Meltdown
    Global Monetary Meltdown in 2009 ?
    Dollar Devaluation, Debt Default & Gold
    Massive US Dollar Devaluation Against Gold During 2009
    Obama, Roosevelt, Gold Confiscation and Dollar Devaluation 

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March 21, 2009 Posted by | Economics | , , , , , | 9 Comments