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China Getting Ready for Severe Blitzkrieg
08/01/2003 17:47
Many experts say that the North Korean conflict is not a conflict between Pyongyang and Washington, but a large-scale diplomatic game between China and the USA with a view of gaining control over the Korean Peninsula
Analysts from the Pentagon think that Chinese are getting ready for a military operation against Taiwan. Beijing is speedily increasing the missile potential of its armed forces and increases the army budget. The Pentagon says the main factor of this alleged operation must be "unexpectedness, cunning and shock". They also add that Chinese may use their missiles against the US base on Okinawa in case if the USA decides to help Taiwan.
The US Department of Defense thinks that making preparations for a military conflict in the Taiwan Strait, Taiwan is becoming the key driving force of military modernization of China. For the time being, China holds 450 short-range missiles, but it is expected to increase its missile potential by 75 missiles per year. At that, the Pentagon emphasizes that China has improved the operating performance and the precision of its missiles.
It is quite natural that Beijing will immediately react to this harsh statement in its address. Especially that the Chinese leadership already declared several times that it would seek peaceful settlement of the Taiwan problem. However, it is not clear why the Pentagon published the report now when US Undersecretary of State Jon Bolton is making a tour about China, South Korea and Japan. Bolton's tour is dedicated to the North Korea problem settlement. At first, the US undersecretary of state left for Beijing; as is known, China is one of the key figures in solution of the problem. Washington certainly needs China's support and assistance to be a success with solution of the problem.
It is strange that reports on the results of negotiations in Beijing just mention that North Korea, as John Bolton says, "disagrees with the US's suggestions concerning the N.Korean nuclear program." We should say here that Washington is ready to provide North Korea with economic aid and security guarantees only in case if Pyongyang gives up its nuclear program.
However that may be but to all appearances Bolton's visit to Beijing brought no results. Obviously for this very reason the US undersecretary of state said upon arrival to Seoul that Kim Jong-il was a tyrant and the life of ordinary Koreans was "a hellish nightmare". In a word, he sounded rather undiplomatic. North Koreans will certainly dislike Bolton's statements, although the man is widely known for his inclination to pronounce such words.
According to Chinese mass media, in the evening of July 30 Chairman of the People's Republic of China Hu Jintao and US President George W. Bush had a telephone conversation. In addition to common phrases on strengthening of mutual trust and progress in the cooperation, both parties also touched upon the North Korean problem. It is unlikely that details of the discussion will ever be published. The Chinese newspaper People's Daily only reported: "Both leaders exchanged their opinions about peaceful settlement of the North Korean nuclear problem through a dialogue." Nothing more was reported there on the subject.
Many experts say that the North Korean conflict is not a conflict between Pyongyang and Washington, but a large-scale diplomatic game between China and the USA with a view of gaining control over the Korean Peninsula. So, now we should focus not upon the possibility of a war with North Korea but upon the possibility of a conflict between the USA and China. If the countries fall out, it is not clear what consequences may occur.
It is not ruled out that the recent statement by the Pentagon is just an episode of this game. Is there anyone who seriously believes that China may deliver a missile attack against Okinawa? Mind that the economic relations between the two countries will be seriously damaged as a result of such an attack. Both, the USA and China will suffer if the relations are stopped. So, the game will continue further, and it may reveal lots of interesting details in the future.
Vasily Bubnov
Read the original in Russian: http://world.pravda.ru/world/2003/5/15/42/12647_chinablitz.html (Translated by: Maria Gousseva)
http://english.pravda.ru/world/20/91/366/10637_korea.html
Monsanto Sues And Sues And Sues...
By Paul Beingessner
Canadian farmer and writer CropChoice
guest commentary
7-31-3
Monsanto and President George Bush have one thing in common. Both have a liking for the "walk softly and carry a big stick" form of public relations. Bush uses his big economic stick to gain the support of various nations in his quest to make the world safe for American corporations.
Monsanto also uses a big economic stick - the big stick of the courtroom, to beat up those who fall afoul of its litigious nature. And, like George Bush, Monsanto has been pretty successful with these tactics. After all, the effect of a cluster bomb dropping on the home quarter would not be much more devastating than the effect of being sued by a huge corporation that is willing and able to spend millions to gain its ends.
Monsanto is very determined to defend its position that farmers must buy new seed of its patented genetically modified crops each year. Monsanto has built a whole department to enforce its seed patents and licensing agreements. It has 75 employees and an annual budget of $10 million.
An estimated 400 farmers have received threats of legal action from Monsanto over alleged patent infringement. While Canadian farmers will be familiar with the trials and tribulations of Percy Schmeiser, names like Homan McFarling and Nelson Farms should resonate with American producers. Few of these cases ever get to court because most farmers look at the odds of outlasting Monsanto and simply give in. A clause in Monsanto's licensing agreement allows Monsanto to take such cases in the U.S. before courts in Missouri. This can add a huge amount to the legal bills of farmers who might be thousands of miles away.
Several of the cases that have gone to court are enough to scare farmers into meek submission to Monsanto's demands. Homan McFarling was fined $780,000 for growing Roundup Ready soybeans without paying Monsanto's licensing fee. Tennessee farmer Kem Ralph was fined $1.7 million and sentenced to eight months in jail for a variety of offenses that began with a Monsanto lawsuit.
Monsanto must be pleased with the results of its aggressive legal campaign. So pleased, in fact, it has decided to branch out. Monsanto's latest foray into the courtroom has it suing a dairy in Maine, alleging that Oakhurst Dairy's marketing campaign that touts its milk as being free of artificial growth hormones is misleading. Monsanto further claims Oakhurst's ads and labels are deceptive and disparage Monsanto's products by implying that milk from untreated cows is better than milk from hormone-treated cows.
Monsanto is the world's only producer of artificial bovine growth hormone (BGH). This product is banned in Canada and elsewhere because of concerns about its impact on humans and the cows that are injected with it. In the U.S., where BGH is legal, some dairy farmers have captured a niche market by declaring that they do not use it on their cows. The Oakhurst Dairy label is simple enough: "Our Farmers' Pledge: No Artificial Growth Hormones." Who would have thought that a simple statement of the truth could have such dire consequences?
Oddly enough, it would not be unexpected if Monsanto were to name the state of Maine as a co-defendant. Maine has a program, the Quality Trademark Seal, which can only be carried on dairy products that are guaranteed free of artificial growth hormones.
Monsanto's latest legal moves have angered farmers and consumers alike. Oakhurst Dairy defends the right of consumers to know what is in the milk they drink. Farmers who currently produce this milk would lose the ability to differentiate their product if Monsanto's suit is successful. Other dairies, which make similar claims, will be watching.
Monsanto treads on thin ice with its aggressive litigation. However, it need not fear the same consumer backlash that other companies might face. Monsanto does not sell directly to the average consumer. Rather, its customers are farmers who often have no other place to go if they want to grow certain products. Because of this dependency relationship, farmers cannot afford to stay angry at Monsanto forever. Monsanto, on the other hand, can enjoy the exercise of its brute power with little fear of repercussions. It is a situation that could easily get worse.
(c) Paul Beingessner (306) 868-4734 phone, 868-2009 fax
beingessner@sasktel.net
http://www.connectotel.com/gmfood/cc140703.txt
OUR SECRET GOVERNMENT: Hack the Vote
How to stop someone from stealing the 2004 election.
By Paul Boutin
Updated Thursday, July 31, 2003, at 3:31 PM PT
[Spin doctors have gotten a hold of this story.]
After the hanging-chad fiasco of the 2000 presidential election, Congress funded a nationwide drive to replace punch-card ballots and lever-operated voting machines in time for November 2004. The Help America Vote Act of 2002, or HAVA, authorized $3.9 billion over three years to help state and local governments upgrade their election equipment. The only replacements being considered seriously are electronic voting booths: stand-alone kiosks for which voters are given an encrypted smartcard that identifies them to the computer and lets them vote exactly once. But a report released last week by the Information Security Institute at Johns Hopkins University says the touch-screen machines are Swiss cheese—full of holes—for hackers. "Common voters, without any insider privileges, can cast unlimited votes without being detected," the report claims. It's based on an analysis of the software source code for voting machines made by Diebold Election Systems, a division of a company that makes automated teller machines. Someone at Diebold accidentally placed the code on a publicly accessible Internet server in January, resulting in its dissemination around the Net.
Diebold boasts only 33,000 machines in use nationwide, and Omaha, Neb.-based Election Systems & Software, which claims to count 56 percent of America's vote, has installed a mere 30,000 touch-screen machines in 15 different states. But the state of Maryland, which bought 5,000 of Diebold's machines last year, just awarded Diebold a contract to replace the rest of the state's booths with 11,000 more touch-screen units. That's probably why Baltimore-based JHU's report sounds like it's lunging for the emergency brake. "Our analysis shows that this voting system is far below even the most minimal security standards," it thunders on page one. The report claims the code is riddled with "unauthorized privilege escalation, incorrect use of cryptography, vulnerabilities to network threats, and poor software development processes" (Ack! A geek's worst insult!) before spelling out a scenario in which a middling hacker steals the vote by stamping out fake voter smartcards using a $100 desktop printer.
Are there bugs in Diebold's code? Of course there are, same as with any program longer than "Hello, world." But instead of 'fessing up, Diebold has issued one press release after another trying to discredit the Johns Hopkins report. Too bad the company didn't decide to go with the flow instead, by claiming it put the source code on the Internet on purpose. Open-sourcing its software was the smartest mistake Diebold could have made. It's the only way security experts (real or self-imagined) will ever take the company seriously. The security track record of open-source programs such as the Linux kernel and the Apache Web server suggests that an all-hands review would improve Diebold's product. And unlike most software products, there's little business risk. Unlike pirated music CDs, bootleg voting booths based on Diebold's copyrighted code would be a tough sell to local governments, either in the United States or in the 178 other member nations of the World Intellectual Property Organization.
More important, open-sourcing the voting machines would reduce some people's nagging fear that the booths are rigged. Even if there were no bugs at all in the code, the installation of hundreds of thousands of new, all-electronic voting machines just in time for President Bush's next election is already high-octane fuel for conspiracy theorists. [How about just plain o' normal people who can think?] News stories on the Diebold flap have ignored the original source of the claims: Bev Harris, a Renton, Wash., publicist and fast-talking progressive activist. The Johns Hopkins study was based on the code Harris found, but by her own admission she is neither an impartial source nor a particularly technical one. Harris claims she found Diebold's source code online while obsessively Googling for information about the company's possible connections to the Bush administration. That's probably why major newspapers, including the New York Times, that have picked up on her discovery have run it without mentioning her. Meanwhile, though, Harris is drawing lots of online links to her black-helicopter claims, which boil down to: Diebold's machines are designed with back doors into which GOP operatives can download additional "votes." None have been found, but good luck pointing that out the day after the election.
The two most popular scenarios for Hack the Vote '04 are either a Kevin Mitnick-style cyberpunk tapping into the machines remotely, or Cheney board-member cronies who order back doors built into the software. Hollywood-style plots like these are about as likely as they sound. Instead, Stanford University computer science professor David Dill, who has been campaigning for better voting machines, says the most likely hack would be an inside job carried out by an accomplished, partisan hacker who lands a trusted job at Diebold, ES&S, or one of the election offices. "Imagine a programmer, system administrator, or even a janitor who gets access to the code," Dill says.
Dill points out that most successful computer crimes are pulled off by insiders. It's the standard M.O. for identity theft: The thief finagles a job at a financial firm, close to the big database of customer accounts, and walks out the door with a copied disk. Likewise, voting machines could be tampered with by insiders who turn out to be party agents, or even a lone gunman with the political drive to match his coding skills—say, a Unix guru who thinks Nader just needs a little help to defeat those corporate campaign contributions.
The only sure check against an outlaw wacko programmer is an army of wacko programmers poring over every line of his work. There are also ways to verify that the booths themselves aren't running tampered code. Instead of looking for Diebold's ties to Dick Cheney, we should be watching that quiet new repairman.
Unfortunately, it's unlikely that any of the voting-machine vendors will go the open-source route. Proprietary code is a given in most corporate cultures, and Jim Barksdale's conversion to open source at Netscape five years ago didn't exactly set a great example of successful results. But there's another feature that should be added to the electronic machines that already record about 20 percent of America's votes: an old-fashioned paper trail. Dill calls it a "voter verifiable audit trail," which means that before you leave the booth, you the voter get a printout of what the machine thinks your votes are, for your review. If you agree with the printout, you drop it into a sealed box where it can be used for recounts. Boxes full of paper are much harder to manipulate than electronic tallies. Without a paper copy of your vote stored as a backup, there's no way to prove whether electronic vote totals were tampered with.
Adding a ballot-printing option to electronic machines should be an easy fix, but unless Congress mandates that elections have a paper trail, don't expect local governments to line up behind the idea. ES&S claims it will be able to add a printer to existing machines for $500 each—a 10 percent markup. And a Diebold spokesman told me, "While Diebold is certainly capable of producing receipt printers, we currently have no plans to manufacture receipt printers primarily because our customers haven't requested it." HAVA passed without requiring a voter-verified audit trail, and a bill to amend it hasn't gone far in the House. Unless that changes, if you don't like next November's election results, at least you'll be able to blame the computer.
http://slate.msn.com/id/2086455/
NICE SPIN!
Treasuries Lower as Mortgage Rout Weighs
Friday August 1, 2:34 pm ET
By Ros Krasny
CHICAGO (Reuters) - U.S. Treasuries held at barely lower levels on Friday after an erratic morning in which prices plummeted early in ongoing fallout from the mortgage market.
Selling from firms rebalancing the duration of their mortgage portfolios as mortgage prepayments slow in the face of rising interest rates has dominated the fixed-income landscape this week.
Capping a busy morning of economic data, the Institute for Supply Management index for July pointed to better U.S. economic prospects for the second half.
"The ISM report shows the industrial economy is turning up, which has been the last holdout. We're seeing a very good platform from which to launch second-half acceleration," said David Littman, chief economist, Comerica Bank.
The data was bearish for Treasuries as signs of an improving economy raise the specter of higher rates ahead. Still, at 51.8 the manufacturing activity index was a shade below "whisper numbers" heard after the strong Chicago-area purchasing managers' report on Thursday that tempered the report's impact.
Treasuries briefly found support from weakness in major equities indexes after the July payrolls report gave a mixed report card on the U.S. jobs situation.
The July unemployment rate fell to 6.2 percent from 6.4 percent, the first decline for more than a year, but nonfarm payrolls dipped unexpectedly by 44,000 and June payrolls were revised to a drop of 72,000 from a 30,000 decline.
Companies slashed payrolls for the sixth straight month. Manufacturing jobs continue to disappear while temporary jobs are expanding.
Worries about an ongoing "job-loss recovery" and its impact on consumer confidence encouraged some value-type buying in Treasuries.
The benchmark 10-year Treasury note is making a stand near the 4.50-percent yield after briefly hitting a one-year high of 4.59 percent early Friday.
Among others, European mutual funds were said to be buyers around 4.50 percent. Dealers also foresee a switch by consumers out of money market funds into longer certificates of deposit following recent curve steepening.
"A 4.5-percent return with inflation at 1.5 percent is not a bad rate of return. Still, with any further evidence of strong growth, 4.5 percent on 10-year yields might look low," said John Nyhoff, vice president of Tokyo-Mitsubishi Futures.
Ten-year notes (US10YT=RR) fell 13/32 for a yield of 4.46 percent, up from 4.41 percent late Thursday. The 30-year bond (US30YT=RR) was down 8/32 for a yield of 5.37 percent, up from 5.36 percent late Thursday.
Two-year notes (US2YT=RR) fell 9/32, with their yield at 1.89 percent, and five-year notes (US5YT=RR) were down 12/32 at a yield of 3.32 percent.
At the Chicago Board of Trade (News - Websites), Sept. 30-year bond futures posted a contract low of 104 6/32, equivalent to a cash yield of about 5 1/2 percent and far below the old low set Thursday and on Nov. 27 at 105 3/32.
George DeMarcilla, bond analyst at Alaron Trading, said there is major technical support at the 103 to 104 level in Sept. bond futures.
"This look like a great place to be looking to buy," he said.
Open interest in CBOT 10-year Treasury note futures made a record high on Thursday at 1,057,959 contracts.
Looming next is the record quarterly Treasury refunding. The U.S. Treasury will sell a total of $60 billion in three-, five- and 10-year notes Tuesday through Thursday.
http://biz.yahoo.com/rb/030801/markets_bonds_9.html
Bond Massacre!
David Chapman
Jul 31, 2003
Since topping on June 13, 2003 the US Treasury Bond market (and Canada's) has taken one of its swiftest drops ever. In barely seven weeks the market fell more than $15 or about 14% (as measured by the 30-year US Treasury Bond Future that trades on the Chicago Board of Trade (CBOT)). Indeed the drop was so swift we did wonder how that compared with the immediate drop after a top in other years.
Since the long-term bull market in bonds started back in October 1981 we have of course seen many peaks rises and subsequent corrections. While there has been some impressive drops, however, none have matched this one over the first six weeks. The closest was a 12% drop in 1987 in the first seven weeks following an important top. The 1987 market fell almost $20 to the bottom or about 24%. The worst bond bear since the bond long-term bull got underway was the 1983-1984 collapse that wiped 25% of value. In dollar terms, the worst drop was the 1993-1994 bear market that fell $21.31.
Bonds have been shown to go through cycles of roughly 3 years. While we have shown this in the past it is worth repeating. Since the major bond market bottom on September 28, 1981 we have seen significant troughs in:
1984 (July 2 - 1008 days),
1987 (October 19 - 1205 days),
1990 (September 24 - 1071 days),
1994 (November 11 - 1509 days),
1997 (April 11 - 871 days) and
2000 (January 18 - 2000).
The average is just over 3 years with the longest being 4.1 years and the shortest 2.4 years. This suggests that the next bond market low should occur sometime between June 7, 2002 and March 6, 2004. We are past the early date and we are past the average date of February 4, 2003. This bond bear should bottom sometime in the next 7 months and could easily have another 12%-15% to fall.
This carnage is coming against the backdrop of the lowest interest rates in years and after the Federal Reserve has cut the discount rate an unprecedented 13 times in the past few years. The huge influx of liquidity into the market - particularly over the past number of months as Gulf War II unfolded - has contributed in no small way to a bubble in the bond market, the mortgage/housing market and probably once again in the stock market. It has become obvious now that the bond and mortgage bubble can no longer be sustained. Once again Fed Chairman Greenspan has given the impression that low interest rates, an endless supply of liquidity and fear of deflation has led to a bond bubble. Some have called it Greenscam.
Fed Chairman Greenspan contributed to the pricking of the bond bubble by announcing that he expected economic growth to increase next year thereby lessening the need to cut rates further or intervene in the market through treasury sales. Oddly a few days later Fed Governor Bernake said that the Fed would stop at nothing to ensure long term growth including further interest cuts even to zero. Seems confusion reigns at the Fed.
But a drop of this magnitude in the bond market means there is no confusion there. So why is the bond market all in a dither? Well it seems that $450 billion budget deficits and the need to fund these deficits does have an impact after all. The recent US Treasury announcement that they need to borrow $230 billion in the second half of the year is enough to dampen the enthusiasm of any bond buyer. Upwards of half of this supply could be new money to finance the burgeoning budget deficit. And at least 40% or more of the supply is dependent upon the whims of foreign investors primarily Japan. With the US Dollar falling, yields at historic lows, and burgeoning supply the foreign investor has to be enticed with considerably higher yields especially a country like Japan that has its own problems and demands.
While bond yields have been low and are still low by more recent historical standards the rise in rates is putting pressure on particularly the mortgage market which is more sensitive to long term interest rates rather that more Fed controlled short term interest rates. Rising interest rates could put a damper on house sales, which have remained one of the few bright spots in the market. Already we are seeing signs that the housing market is cooling and the recent record sales of new homes could soon be just a memory.
In addition to the supply coming on the market as a result of the huge deficit, corporations have also being piling into the market to take advantage of the low rates. Of course homeowners have been doing the same thing. The burgeoning demands of the US government have clearly proven too much for the market and despite the low short term rates and the seeming endless supply of liquidity it has proven too much, and the exit from the bond market began.
All this is coming against a background of continued high and unsustainable debt levels for both consumers and corporations, record US budget and trade deficits, low-to-nil savings by consumers, continued record bankruptcies for both consumers and corporations, huge under funded pension liabilities, continued weak economic growth in other countries and ongoing geopolitical risks.
While investors might complacently state that while interest rates have backed up from their recent lows (bond prices move inversely to bond yields) the Fed is keeping interest rates low, the yields are still low historically and therefore should continue to encourage both investors and the consumer. Finally the Fed is prepared to stand by and defend deflation and ensure economic growth through this policy of low interest rates and a never-ending supply of liquidity.
What they seem to forget is that the recent collapse in the bond market is also huge by historical standards and is signaling a severe problem. With the US dollar also turning around after a recent upside correction we should all be reminded that in 1987 it was a falling US Dollar and a falling bond market that caused the one of the biggest financial panics in history. Was there any sector that benefited? Well, one - gold. And the gold market now is breaking out with minimum projections to $400-$450 for the gold price.
We are showing two interesting inter-market ratio charts (below). The first one is a weekly chart of a Gold/Bond ratio. We have used the nearest futures contract for both gold and US Treasury Bonds. Throughout the 1990's gold was falling against US Treasuries clearly favouring bonds over gold. Exceptions were clearly the 1993/1994 bear market in bonds in particular and as well the 1990 bond bear and to a lesser extent the 1999 mini bond bear where a spike is seen. Prior to that the best performance of gold against bonds was the 1987 bond bear. Since 2000 gold has been in an uptrend against bonds not only breaking the 1990's downtrend but gold has being going up even as bonds were going themselves to new price highs (yield lows). A remarkable performance for gold against bonds.
Our second chart is a weekly chart of the Dow Jones Industrials/Bond ratio. Throughout the 1990's stocks were clearly the place to be as the ratio rose steadily. There was a dip during the 1990 mini bear in bonds and stocks as well again during the 1993-1994 mini bear where bonds were better performers then stocks. There was also a strong pullback during the 1998 Asian meltdown. But since 2000 the ratio has been in a strong downtrend clearly favouring bonds over stocks. Of course there has been counter trend rallies but they have generally only taken us back to the down trend line. That is where we are now as clearly over the past few months in 2003 stocks have outperformed bonds.
But the rapid record drop in the bonds is a clear sign that something is amiss. As we noted above during the summer of 1987 we had a falling US Dollar, a falling bond market and rising gold prices. The stock market meanwhile was blissfully ignoring it all rising well into August before topping. In the fall we had one of the biggest financial panics in history in the stock market. Does history repeat itself? We don't know but the recent bond massacre should not be taken lightly.Our recommendation is that investors ensure that they are either out of the bond market or in short term maturities, and out of the stock market.
[Get silver and gold bullion the guy runs a stock MF what do you expect him to say?]
On the other hand investors should be fully invested in the gold market through stocks or even in gold bullion itself (three choices either the Millennium BullionFund (www.bullionfund.com, 416- 777-6691) or Central Fund of Canada (CEF.A-TSX) (www.centralfund.com, 905-648-4196 or Central Gold-Trust (GTU.UN-TSX) (www.gold-trust.com, 905-304-4653). The size of the position is dependent of course on the risk profile of the investor but a minimum of 10% is recommended. The Dow/Gold ratio also continues in a downtrend and is currently at resistance as our chart of the Dow/Gold ratio shows. Meanwhile the US Dollar is firmly in a downtrend. The stock market continues to make what should be a top while gold stocks have clearly broken out on the charts. Investors have been warned. Buy gold, sell stocks and bonds.
Click link for charts:
http://www.321gold.com/editorials/chapman_d/chapman_d_073103.html
Charts created using Omega TradeStation or SuperCharts. Chart data supplied by Dial Data.
David Chapman
31 July 2003
email david@davidchapman.com
www.davidchapman.com
David Chapman is a director of the Millennium Bullion Fund.
The opinions, estimates and projections stated are those of David Chapman as of the date hereof and are subject to change without notice. David Chapman, as a registered representative of Union Securities Ltd. makes every effort to ensure that the contents have been compiled or derived from sources believed reliable and contain information and opinions, which are accurate and complete. Neither David Chapman nor Union Securities Ltd. take responsibility for errors or omissions which may be contained therein, nor accept responsibility for losses arising from any use or reliance on this report or its contents. Neither the information nor any opinion expressed constitutes a solicitation for the sale or purchase of securities. Union Securities Ltd. may act as a financial advisor and/or underwriter for certain of the corporations mentioned and may receive remuneration from them. David Chapman and Union Securities Ltd. and its respective officers or directors may acquire from time to time the securities mentioned herein as principal or agent. Union Securities Ltd. is an independent investment dealer and is a member of the Toronto Stock Exchange, the Canadian Venture Exchange, the Investment Dealers Association and the Canadian Investor Protection Fund.
________________
321gold Inc Miami USA
Bring Back Honest Money
by Rep. Ron Paul, MD
Ron Paul in the US House of Representatives, July 25, 2003
Mr. Speaker, I rise to introduce the Honest Money Act. The Honest Money Act repeals legal tender laws, a.k.a. forced tender laws, that compel American citizens to accept fiat (arbitrary) irredeemable paper-ticket or electronic money as their unit of account.
Absent legal tender laws, individuals acting through the markets, rather than government dictates, determine what is to be used as money. Historically, the free-market choice for money has been some combination of gold and silver, whenever they were available. As Dr. Edwin Vieira, the nation’s top expert on constitutional money, states: “A free market functions most efficiently and most fairly when the market determines the quality and the quantity of money that’s being used.”
While fiat money is widely accepted thanks to legal tender laws, it does not maintain its purchasing power. This works to the disadvantage of ordinary people who lose the purchasing power of their savings, pensions, annuities, and other promises of future payment. Most importantly, because of the subsidies our present monetary system provides to banks, which, as Federal Reserve Chairman Alan Greenspan has stated, “induces” the financial sector to increase leverage, the Federal Reserve can create additional money, in Mr. Greenspan’s words, “without limit.” For this reason, absent legal tender laws, many citizens would refuse to accept fiat irredeemable paper-ticket or electronic money.
Legal tender laws disadvantage ordinary citizens by forcing them to use money that is vulnerable to vast depreciation. As Stephen T. Byington wrote in the September 1895 issue of the American Federationist: “No legal tender law is ever needed to make men take good money; its only use is to make them take bad money. Kick it out!” Similarly, the American Federation of Labor asked: “If money is good and would be preferred by the people, then why are legal tender laws necessary? And, if money is not good and would not be preferred by the people, then why in a democracy should they be forced to use it?”
The American Federation of Labor understood how the erosion of the value of money cheated working people. Further, honest money, i.e., specie, was one of the three issues that encouraged ordinary people to organize into unions when the union movement began in the U.S. circa 1830.
While harming ordinary citizens, legal tender laws help expand the scope of government beyond that authorized under the Constitution. However, the primary beneficiaries of legal tender laws are financial institutions, especially banks, which have been improperly granted the special privilege of creating fiat irredeemable electronic money out of thin air through a process commonly called fractional reserve lending. According to the Federal Reserve, since 1950 these private companies (banks) have created almost $8 trillion out of nothing. This has been enormously advantageous to them.
The advantages given banks and other financial institutions by our fiat monetary system, which is built on a foundation of legal tender laws, allow them to realize revenues that would not be available to these institutions in a free market. This represents legalized plunder of ordinary people. Legal tender laws thus enable the redistribution of wealth from those who produce it, mostly ordinary working people, to those who create and move around our irredeemable paper-ticket electronic money which is, in essence, just scrip.
The drafters of the Constitution were well aware of how a government armed with legal tender powers could ravage the people’s liberty and prosperity. That is why the Constitution does not grant legal tender power to the federal government, and the states are empowered to make legal tender only out of gold and silver (see Article 1, Section 10). Instead, Congress was given the power to regulate money against a standard, i.e., the dollar. When Alexander Hamilton wrote the Coinage Act of 1792, he simply made into law the market-definition of a dollar as equaling the silver content of the Spanish milled dollar (371.25 grains of silver), which is the dollar referred to in the Constitution. This historical definition of the dollar has never been changed, and cannot be changed any more than the term “inch,” as a measure of length, can be changed. It is a gross misrepresentation to equate our irredeemable paper-ticket or electronic money to “dollars.”
However, during the 20th century, the legal tender power enabled politicians to fool the public into believing the dollar no longer meant a weight of gold or silver. Instead, the government told the people that the dollar now meant a piece of government-issued paper backed up by nothing except the promises of the government to maintain a stable value of currency. Of course, history shows that the word of the government (to protect the value of the dollar) is literally not worth the paper it is printed on.
Tragically, the Supreme Court has failed to protect the American people from unconstitutional legal tender laws. Salmon Chase, who served as Secretary of the Treasury in President Lincoln’s administration, when he was Chief Justice of the Supreme Court, dissenting in Knox vs. Lee, summed up the argument against legal tender laws in twelve words: “The legal tender quality [of money] is only valuable for the purposes of dishonesty.” [emphasis added.]
Another prescient Justice was Stephen Field, the only Justice to dissent in every legal tender case to come before the Court. Justice Field accurately described the dangers to our constitutional republic posed by legal tender laws: “The arguments in favor of the constitutionality of legal tender paper currency tend directly to break down the barriers which separate a government of limited powers from a government resting in the unrestrained will of Congress. Those limitations must be preserved, or our government will inevitably drift from the system established by our Fathers into a vast, centralized, and consolidated government.” A government with unrestrained powers is properly characterized as tyrannical.
Repeal of legal tender laws will help restore constitutional government and protect the people’s right to a medium of exchange chosen by the market, thereby protecting their current purchasing power as well as their pensions, savings, and other promises of future payment. Because honest money serves the needs of ordinary people, instead of fiat irredeemable paper-ticket electronic money that improperly transfers the wealth of society to a small specially privileged financial elite along with other special interests, I urge my colleagues to cosponsor the Honest Money Act.
Dr. Ron Paul is a Republican member of Congress from Texas.
WHOSE SECURITY?
By: Ted Lang
Of course the term "our" in the title of this meager effort is a misnomer; it’s not our government, it’s George Bush’s government. Both Republicans and Democrats have so bastardized our God-given as well as legal rights that we no longer qualify as a second-rate banana republic. The list of prohibitions in the Bill of Rights against government growing itself at our expense is being summarily ignored. What needs to be secret in a society where the people are self-governing? Aren’t "we the people" the government?
But if we are no longer self-governing, then just who or what is the government, depending upon your definition of the word "is?" We have been asked to suspend the rule of law for the convenience of President George W. Bush and Republicans, and grant "war powers" just as we had previously done based upon the lies from Democrat President, Lyndon Baines Johnson. LBJ committed deliberate fraud when he initiated the Gulf of Tonken resolution, lying about attacks upon our Navy that never happened. Obviously, LBJ kept that secret because it was a matter of "national security."
And then there was lying Democrat Franklin Delano Roosevelt, who couldn’t just simply come clean with the American people and explain that we needed to engage in war against the Axis [of ?]. Instead, he goaded the Japanese with the threat of an embargo and then blacked out advance warnings that the Japanese were on their way to attack Pearl Harbor. Nothing like blacking out intelligence when we need it, and then citing it when we don’t!
The British were hanging on with our Lend Lease help, and Hitler bit off more than he could chew attacking Red Communist Joe Stalin’s Russia. But you see, losing 2,400 Navy personnel is all right, so long as we’re losing American lives for the Democrats’ beloved communists. Losing 3,000 Americans is no biggie - communists don’t stand to gain anything from that insignificant sacrifice.
There’s nothing like secret government to control the population and force them how and what to think. They must be trained that there are awful weapons of mash distraction out there, and regime changes waiting, and the ability of Saddam bin Laden to launch his battle star and his evil death ray.
The simple command decision that should have been made required holding someone in the administration accountable, but learning from the biggest fraud ever in American government, namely Bill Clinton, Bush was offered up those responsible for 9-11, namely Tenet and Freeh, whose incompetence was covered up by Mueller, and fired no one. Of course, some stepped up and accepted blame, but Bush conveyed that he forgave them and doesn’t care about the American people.
And to add insult to injury, death, fraud and terror, President George Bush and his cabal have been summarily stonewalling the 9-11 commission, delaying funding, refusing to cooperate, and generally obstructing both the inquiry and justice. Where’s the "white paper" Secretary of State Colin Powell promised proving bin Laden’s involvement? We’ve already forgotten that our secret government was going to make a case for us as regards that accusation? And where’s the case proving Saddam was involved in 9-11?
Is that why 28 pages have been censored out of the 9-11 commission report, because it proves Saddam had nothing to do with 9-11? What other reason would there be? Just look at history for the answers, and you’ll find that tyranny always thrives on both secrets and lies! And it always needs oppressed classes and villainous enemies!
Isn’t it astonishing that the Bush regime needs the "Patriot" Act to break into our homes while we are at work "donating" 50 percent of our earnings for their financial support? His entourage of secret government advisors and experts is extremely uncomfortable with the fact that we might have some secrets. How dangerous! But then, that depends upon your definition of the word "we."
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."
http://www.etherzone.com/2003/lang073103.shtml
Man your battle stations, this is no drill
Bob Moriarty
July 31, 2003
About seven weeks back I wrote a piece about the impending bond market crash. In it I said, " . . . when the bond market self-destructs (and that's on the cards shortly) the entire derivatives market is going to melt down. The bond market is a bubble. The US Federal Reserve is on the verge of buying up the long bonds to lower interest rates. (Let me see if I can understand this clearly. We are going to buy up a bunch of funny looking but basically worthless bonds with funny looking but basically worthless dollar bills. Why didn't I think of that? Of course).
The dollar is toast."
Take a gander at the chart below and see if you understand what I meant. On June 15th, the interest rate on the 30 year bond was about 4.2% and now, a short six weeks later, the interest rate is over 5.25%. In $150 trillion dollar derivatives terms, that's a crash that makes 1929 look like children playing in the sandbox.
The rest of it and a nifty chart:
http://www.321gold.com/editorials/moriarty/moriarty073103.html
It gets better: really worth the click...
Better Late Than Never
In recent weeks, the press and
the Democrats have finally taken up
a critical White House deception about Iraq
and uranium. What took them so long?
And what about all the other lies?
by Steve Perry
City Pages
July 30, 2003
POSTED 7/24; REVISED AND UPDATED 7/30
IT SEEMS A LONG TIME AGO NOW, but May 1 was a big day for the president--Victory in Iraq Day, even though he could not say so officially without putting U.S. occupation forces on the wrong side of still more international laws. But the occasion was designed with all the martial preening of a victory celebration and then some. The White House announced that Bush would close the day by delivering an address to the world from the deck of the USS Abraham Lincoln just off the coast of San Diego. And he would arrive on board in a Navy Viking jet.
This bit of gaudy theatrics was attributed to the president's desire to avoid a post-docking ceremony that would delay the sailors' homecoming. Afterward, when someone pointed out to Ari Fleischer that the carrier was within helicopter range of shore when W made his fighter-jet entrance, Fleischer essentially shrugged and said, The president really wanted to ride in that plane. According to the Washington Post, Bush also took a course of "underwater survival training" in the White House swimming pool to prepare for his odyssey.
That afternoon the president's plane broke through the clouds and glided to a tailhook landing with the whole country watching on television. Bush, grinning like a kid who got a real F-18 for Christmas, emerged in a camouflage flight suit and gave a thumbs-up to the cameras. But if it looked at first like the sequel to Ferris Bueller's Day Off, there was also more than a whiff of Triumph of the Will in that Flight of the Valkyries entrance, especially with Karl Rove's own film crew on hand to shoot the opening scenes of the Campaign 2004 biopic.
Then Bush swapped the jumpsuit for a business suit and ran an exultant rhetorical victory lap, during the course of which he proffered boast after boast that happened to be untrue. The shooting war is over and we won... We've defeated an ally of al Qaeda... The Iraqi people are liberated... We are rebuilding Iraq... We are in control of events in Iraq... Iraqis are celebrating the U.S. presence... We don't do business with countries that harbor terrorists...
Not only were these contentions false; they were already known to be so by anyone who had made a point of keeping up with the international English-language press, including a growing though still small number of internet-prowling Americans. The administration's May Day pageant was strictly for the undifferentiated mass of folks at home, that majority of Americans who had gotten their news from TV and later told pollsters that Saddam was behind 9/11 (70 percent), or we'd already found WMDs in Iraq (33 percent). Needless to say, misapprehensions like these were not failures of the Bush information plan, but successes.
But now the extent and gravity of the White House's lies are beginning to look manifest even on television. One regular guest on the news-chat circuit, former Nixon counsel and jailed Watergate conspirator John Dean, recently wrote, "In the three decades since Watergate, this is the first potential scandal I have seen that could make Watergate pale by comparison. If the Bush administration intentionally manipulated or misrepresented intelligence to get Congress to authorize, and the public to support, military action to take control of Iraq, then that would be a monstrous misdeed.... To put it bluntly, if Bush has taken Congress and the nation into war based on bogus information, he is cooked. Manipulation or deliberate misuse of national security intelligence data, if proven, could be 'a high crime' under the Constitution's impeachment clause."
All very compelling, except for one thing. With the Republicans in control of both houses of Congress, who's going to impeach him?
LATELY THE AMERICAN PRESS has demonstrated uncharacteristic spunk, dating to the White House's early July admission that the State of the Union uranium claim was false. The very first question--when did they learn this?--opened the floodgates, and incriminating details began swirling around Bush and Tony Blair alike. Before last week's triumphal shootout with Saddam's sons stole back the headlines for a day, the Bush gang had faced nearly three solid weeks of embarrassing revelations. Signs of open derision sprouted in the American press corps for the first time since September 2001. The heat on both sides of the Atlantic grew so intense that David Kelly, a member of Blair's intel staff and the source of a BBC report that Blair pressured his people to doctor intelligence, apparently killed himself.
Contrary to appearances, this is not some great spasm of reportorial enterprise we're witnessing. It is a window on the latest front in the administration's wars: the CIA versus George W. Bush et al. Every embarrassing leak to emerge so far has the Agency's fingerprints all over it; most involve matters only the CIA and the White House would know about. The White House humiliated the CIA in numerous ways while building Bush's case for war--ignoring the advice of its analysts, pressuring director George Tenet to sign off on the uranium claim when he had already stricken it from another Bush speech three months earlier, sticking him with the blame when the lie was exposed, and later, in a bit of blatant illegality, outing an undercover CIA agent--and now it's time for the Agency to settle a few accounts.
But if the tone of media reports and of political chatter has changed dramatically this month, it still leaves the past year to account for, all the months of numb collaboration in whatever the Bush administration chose to say or do to lay the foundations for an invasion. The most striking thing about the present age is not that a White House has lied and overreached itself in pursuit of its aims--hardly unique in the annals of the presidency--but that almost no one seemed to mind. No one who counted, that is; no one in a position to make his or her voice heard.
It's been said that this administration crucifies dissenters, and recent events bear that out. Valerie Plame, the CIA agent whose cover was blown recently by Bush officials speaking through columnist Bob Novak, is the wife of former Iraq ambassador Joseph Wilson. It was Wilson who traveled to Africa in 2002 at Dick Cheney's behest. He reported back at the time that the uranium story was bogus, and told the world he'd done so in a New York Times op-ed earlier this month. When Illinois Senator Dick Durbin brought up the Plame affair, the White House charged that he was discussing classified information publicly and tried to ride him off the Senate Intelligence Committee. On a more bizarre note, Bush flacks contacted their chief cyber-spokesman, Matt Drudge, to say that ABC reporter Jeffrey Kofman, who had broadcast a withering report on troop morale in Iraq, was both gay and Canadian. (Laugh if you like, but their not-so-funny point was that Americans should not be listening to anyone whose loyalty to the fatherland is in question.)
But however vicious the president's posse is capable of being, the truth is that until recently Bush rarely had to flex those muscles. He has owed his success to the pliancy and corruption of supposedly democratic institutions from the start. Most Americans still think the episode in Florida came down to the swinging chads on a relative handful of disputed ballots, but the real tipping point came earlier when brother Jeb's secretary of state, Katherine Harris, hired a company to vacuum the state's voter rolls of any convicted felons registered in error. The resulting purge of mostly poor and black voters did not confine itself to felons, however; it also accidentally-on-purpose expunged from the rolls thousands of prospective Democratic voters with no criminal records at all. The second great outrage came when the Supreme Court voted 5-4 to hand Bush the White House, a vote from which two of the pro-Bush justices, Antonin Scalia and Clarence Thomas, should have been forced to recuse themselves on the grounds that members of their families had worked for the Bush campaign.
Neither the press nor the Democrats focused on these aspects of the Florida episode, obviously, and the administration has met the same spirit of accommodation on practically every front, no matter how outrageous its demands. When Bush wanted his open-ended mandate for war, Congress obliged. When Dick Cheney intervened to suppress a more ambitious investigation into the events of September 11, no one complained. When Seymour Hersh reported in May that the administration had prepped for war by throwing away the findings of the U.S. intelligence apparatus in favor of the anecdotal testimony of handpicked Iraqi defectors fed to the administration by its stooge Ahmed Chalabi, the mainstream media left it alone. No peep, either, when the White House intervened a few months ago to suppress portions of Congress's eventual 9/11 report, which was finally released late last week after seven months of editing and stonewalling by the administration.
SINCE THE COUNTDOWN TO WAR began last fall, there has been exactly one prominent and categorical dissenter in the entire U.S. Congress, the 85-year-old West Virginia Senator Robert Byrd. "This is no small conflagration we contemplate," he declaimed on the Senate floor one month before the invasion. "This is no simple attempt to defang a villain. No. This coming battle, if it materializes, represents a turning point in U.S. foreign policy and possibly a turning point in the recent history of the world.
"This nation is about to embark upon the first test of a revolutionary doctrine applied in an extraordinary way at an unfortunate time. The doctrine of preemption-- the idea that the United States or any other nation can legitimately attack a nation that is not imminently threatening but may be threatening in the future--is a radical new twist on the traditional idea of self defense. It appears to be in contravention of international law and the UN Charter. And it is being tested at a time of worldwide terrorism, making many countries around the globe wonder if they will soon be on our--or some other nation's--hit list. High level administration figures recently refused to take nuclear weapons off of the table when discussing a possible attack against Iraq...
"Frankly, many of the pronouncements made by this administration are outrageous. There is no other word. Yet this chamber is hauntingly silent. On what is possibly the eve of horrific infliction of death and destruction on the population of the nation of Iraq--a population, I might add, of which over 50 percent is under age 15--this chamber is silent. On what is possibly only days before we send thousands of our own citizens to face unimagined horrors of chemical and biological warfare--this chamber is silent. On the eve of what could possibly be a vicious terrorist attack in retaliation for our attack on Iraq, it is business as usual in the United States Senate. We are truly sleepwalking through history."
Ask any pundit why the Bushmen have had their way so easily and you will hear the story of Karl Rove's towering presence. Rove, the man half of Washington calls "Bush's brain," is one of the most formidable party bosses the city has seen since the days of towering Democratic figures like Lyndon Johnson and Jim Farley. He is an absolute master of the mechanics of party politics, a ruthless enforcer of marching orders, and an utterly audacious competitor. It is no exaggeration to say that Rove inspires fear and fealty throughout Republican ranks; his White House is by all accounts the most leakproof of the modern era.
Whether he is the über-media manipulator he's made out to be is less sure. Either way, however, it was not the residue of Rove's genius that put the Bush agenda over the top, but the utter acquiescence of America's most cherished democratic institutions--the opposition party and the free press. Bush and Rove will likely go down in history not as master propagandists but as ruthless operators in the right place at the right time: the first White House of the modern era bold enough to flout "checks and balances" altogether and charge through the bankrupt, tissue-thin lines of the Democratic party and the American news media without incurring serious consequences. When future historians comb through the muck of the Bush era, there is no telling what, if any, documentary evidence they will find (this is a crew schooled in the art of concealing its tracks), but they will surely be dumbfounded by the gap between the Bush administration's public conduct--radical in scope, aggressive in its means, beset by international opposition and by open lies, manipulations, and gaffes--and the paltry, token resistance it engendered in the domestic press and the American political establishment.
If the failure of the Democratic Party in responding to the Iraq war and the so-called war on terror has seemed especially glaring, it's only because the issues involved are so momentous that one can scarcely fail to notice the lack of dissent. But it's nothing new. The national Democratic party began retooling itself along more explicitly business-friendly, proto-Republican lines in the shadows of the Carter years, and from the start of the Reagan era onward, it has never put up serious resistance to any major Republican initiative. Neither has it cast an inquisitive eye toward any fermenting Republican scandal, from Iran-Contra to Enron to Saddam's WMDs. Apart from Senators Dick Durbin (D-Ill) and Chuck Schumer (D-NY), who have both called for an investigation into who leaked Valerie Plame's identity to Bob Novak, the Democrats have clucked a bit without really seeking to do anything. Just last week Bill Clinton phoned Larry King to say that all presidents make mistakes and everyone was being too hard on W. The previous Friday, Hillary Clinton had appeared on Bob Costas's HBO talk show saying the same thing. She still believed invading Iraq was the right thing to do, and she was going to reserve her judgment about the other questions surrounding Bush's conduct--until 2008, I'm guessing, unless she can be enticed to join the Democratic ticket next summer.
It's only fitting that the Clintons should come to Bush's rescue. Even during the ostensible interlude of the Clinton years, it was still the Republicans who set the social and fiscal agenda, which the president always embraced with a feigned reluctance. Most famously, he stole their welfare reform proposal and managed to get all the credit for it, which was one reason the right despised him so. A neat political trick, but it made little difference to the country: It was just eight more years of Republican rule in sheep's clothing.
At the moment the Republican party is controlled by a gang of neo-conservatives who want to build American empire by nakedly militarized means, for the express reason that there is currently no one to stop us and we ought to keep it that way. The Democrats are ruled by neoliberals who want to achieve the same imperial goals by gradualism and finesse, through systems of international trade and law dictated by U.S. corporations and the U.S. government. They are not opposed to military interventions, but they are certainly more circumspect about them than the current White House (who isn't?). So the great debate over America's new and precipitous policy of preemptive war was no debate at all. It more closely resembled a fretful lovers' tiff.
Which it was. A few weeks ago the UK magazine New Statesman featured a profile of George Soros, the billionaire currency trader who has become a vocal critic of the Bush crew. "Soros," wrote Neil Clark, "may not, as some have suggested, be a fully paid-up CIA agent." But, he continued, "that his companies and NGOs are closely wrapped up in U.S. expansionism cannot seriously be doubted. So why is he so upset with Bush? The answer is simple. Soros is angry not with Bush's aims--of extending Pax Americana and making the world safe for global capitalists like himself--but with the crass and blundering way Bush is going about it. By making U.S. ambitions so clear, the Bush gang has committed the cardinal sin of giving the game away.
"For years, Soros and his NGOs have gone about their work extending the boundaries of the "free world" so skillfully that hardly anyone noticed. Now a Texan redneck and a gang of overzealous neo-cons have blown it."
Soros is emblematic of the only kind of establishment critic Bush has had here in the U.S.: the ones who wonder if preemptive invasions are the right way to go at the thing. But they have no quarrel with his larger aims. Despite the few lonely cranks who, like Byrd, still call the U.S. Congress home, there is nothing like an anti-imperialist wing in either party or in U.S. media.
For that reason, Bush's putative opponents and watchdogs have had no place to stand, practically or philosophically, so long as what he was doing could be spun as a success on the evening news. If a majority of the people continued to think his war was a success, who was going to be first to call it a failure? But poll numbers and recent invocations of the q-word (quagmire, see: Vietnam) prove that far fewer people now deem the war a success. Bush got the briefest of news-cycle bounces from tracking down Uday and Qusay, but it won't change the situation on the ground in Iraq. The bad news will continue to dribble in. The war is not going well, which means the rules of engagement between the Bushmen, the Democrats, and the media are shifting.
OVER HALF A CENTURY HAS PASSED since the last time an American president undertook to shift the whole footing of U.S. foreign policy and American empire in quite so radical a manner. When the Truman administration began the military buildup that ushered in the Cold War, it was as untroubled by facts as the Bush administration. Afterward, as Gore Vidal tells it, "[Dean] Acheson wrote, cheerfully, 'If we did make our points clearer than truth, we did not differ from most other educators and could hardly do otherwise.' After all, as he noted, it was the State Department's view that the average American spent no more than 10 minutes a day brooding on foreign policy."
But Bush has it better than Truman in one regard. For purposes of managing public opinion, "the news" now means TV news, where surveys say 75-85 percent of the public gets most of its meager daily allowance of information. There are six major TV news operations in the country now--five, really, since NBC and its Microsoft-branded cable version are two of them. Control what they've got to say and you possess the equivalent of a state-run news agency with all the (rapidly diminishing) cachet of a free press.
And it's never been simpler to control what the networks have to say. And, though they matter less, the same can be said of most of the newspapers most of the time. "The press in this country," wrote James Wolcott in the June Vanity Fair, "has never identified less with the underdog and pandered more to the top pedigrees. The arrogance of the Bush administration is mirrored in the arrogance of the elite media, which preens even as it prostrates itself."
Part of the growing worthlessness of TV news derives from economic pressures, the same ones that have turned network entertainment divisions into production lines for reality TV shows, a spoon-fed and mostly spurious programming phenomenon driven mainly by the minuscule cost of these shows versus old-school sitcoms and dramas. In the broadcast news departments and at the cable networks, the age of austerity has meant cutting back on the resources devoted to newsgathering: reporters, foreign bureaus, production personnel. The change has wrought a predictable transformation in the mindset of the working broadcast journalist. As the distinction between informing and entertaining fades to the vanishing point, so does any notion that TV news might exist for purposes beyond pleasing the viewer. Gathering the news has become a matter of getting the best live shots, telling a tidy and gratifying "human" story, making the heroes look like heroes and the correspondents look like models. Critics of behemoth corporate media have always fretted about the top-down pressures on journalists to watch what they say, but it's hard to imagine that most contemporary network journalists have a single thought in their heads that might distress their bosses. (When they do, though, they are hauled straight to the woodshed, as MSNBC's Ashleigh Banfield learned after telling a campus lecture audience that TV news did a poor job of covering numerous aspects of the war.)
Money is also one reason why there is no news on the cable news networks during the evening time slots, when the greatest share of viewers tune in. It's far cheaper to lard the schedule with talking heads who earn their keep finding ways to restate what official sources have already said. The format is a great boon to the White House. It serves to do the heavy lifting required of any serious propaganda campaign, which is sheer numbing repetition. More felicitously still, the ranks of prominent opinion-makers on TV, radio, and the internet are dominated by tub-thumping carnival barkers of the right such as Rush Limbaugh, Matt Drudge, and the Fox ensemble, who set the agenda for the (also right-wing) chat-show "liberals" chasing their fumes.
The most consequential player in the rightward lunge of TV's chattering classes is of course the visionary Fox News chieftain and old Nixon/Reagan hand Roger Ailes. As Michael Wolff wrote in New York magazine last spring, the most important factor in Ailes's triumph is not the network's open right-wing politics but its success in crafting a persona that appeals to the confused and vaguely disaffected as well as the hardcore right. Fox has fashioned itself the voice of the beleaguered, commonsensical little guy who rightly suspects that he's not getting the whole story.
The right now owns the entire American political apparatus--the federal government, the putative opposition party, and the lion's share of news media. Thanks in considerable measure to Ailes, it controls the most charged political symbols as well, from the flag to that most cherished marker of American citizenship, the role of victim. Fox News and all the other right-wing pundits thrive by assuring their audiences that they are the real unfortunates, oppressed by problems as varied as big government, liberal media, taxes and the bottom-feeders they serve, car-pool lanes, and France. Ann Coulter, whose public descent into complete hysteria can be spectacularly entertaining on the right night, is only the best known of a whole battalion of right-wing ravers penning book after book about the abuse of conservatives and conservative values by mobs of elite liberal thugs--no, traitors.
Demographically speaking, Fox and the other children of Ailes get to have it both ways, sucking up to the right-thinkers and to those who simply feel bewildered and powerless. What's the competition to do? While neither CNN or MSNBC has embraced Fox's brassy, jingoistic trappings, they have followed Fox's lead where it counts most, by installing flocks of right-wing commentators and giving short shrift to any hint of dissent or disorder concerning Bush administration affairs.
Finally, an interesting and little-known fact: Fox News is currently under investigation in the UK (where it appears on cable systems) for violating British broadcasting's "due impartiality" rule with its ceaseless pro-Bush, pro-war drumbeat. The head of one English journalism organization, Julian Petley, described the basis of the complaint: "Murdoch would like to do with British television news what he has done with newspapers, which is to force people to compete on his own terms.... f we allow into Britain the kind of journalism represented by Fox, that would [amount to] a form of censorship."
RECENTLY JOHN DEAN PUBLISHED another essay on the White House's conduct. "The African uranium matter," he wrote, "is merely indicative of larger problems, and troubling questions of potential and widespread criminality when taking the nation to war. It appears that not only the Niger uranium hoax, but most everything else that Bush said about Saddam Hussein's weapons was false, fabricated, exaggerated, or phony. Bush repeatedly, in his State of the Union, presented beliefs, estimates, and educated guesses as established fact."
The public grows restless as well. Events in Iraq were already past the administration's grasp when the lies scandal broke. Thanks to television news, most Americans do not yet realize the extent of the troubles there, but they do know that they are bored and disappointed with this war. It's costing a lot in dollars and lives, it isn't good television anymore, and meanwhile the economy only grows worse. ("If American elections were decided by foreign policy," a friend reminded me recently, "our history would be entirely different. The economy and other domestic issues decide elections--much to the dismay of the pundit class, I know, but for a fact, nevertheless.")
Ever since 9/11, polls have attested to the breadth of the president's public support. Now we're seeing how shallow it was all along. Two weeks ago, a Zogby poll indicated that for the first time, more people opposed than supported Bush's reelection. If you are the Bush administration, the joy of a credulous, kept-in-the-dark populace is that they will believe practically anything you tell them; the danger is that, should events begin to spin out of your control, they are just as liable to believe anything your newly emboldened critics tell them.
Can Bush weather it? It's always instructive to read the transcripts of the daily White House press briefings, which offer a barometric reading on current media/administration relations. Lately they have been remarkably antagonistic on both sides, and the animus is personal. The administration has made reporters look like fools. And the White House, for its part, is visibly outraged that its word is no longer taken at face value. This is a recipe for protracted, open ugliness. Keep in mind that Bush's and Rove's tactical instincts are less Machiavelli than Genghis Khan. They are bullies and bludgeoners. Bush's spontaneous taunt to Iraqi guerrilla forces (Bring 'Em On!) seems to go for everyone in the world except Kim Jong-Il and the House of Saud.
More and more, the Soros critique of Bush's foreign policy--he makes the game too obvious--goes for domestic appearances too. A long time has passed since the Democrats and the Republicans had any serious or prolonged disagreements, which is doubtless part of what Rove meant when he told the New Yorker's Nicholas Lemann, "I think we're at a point where the two major parties have sort of exhausted their governing agendas." What Rove seems not to see is that it's precisely in the absence of real politics that the appearance of debate and disagreement is most vital. In their unstinting imperiousness, the Bush crowd is exposing the sham for all to see.
One of the larger questions looming at the moment is how far the CIA wants to carry its current info-war against the Bush gang. Now that Congress's heavily redacted and emended 9/11 report is going public, watch the papers for additional disclosures about the White House's handling of pre-9/11 warnings about imminent attacks. Keep a particular eye on Walter Pincus of the Washington Post, the dean of CIA-insider American journalists. It was a Pincus story, published on June 12, that set the ball rolling by reporting that an anonymous official--later revealed as Joseph Wilson--had given the CIA a negative report on Niger uranium. More recently he has written that the Agency also advised Bush before the war that a besieged or deposed Saddam could pose greater risks than he did as leader. If the coming days and weeks bring leaks of a what-they-knew-and-when-they-knew-it nature about the White House and 9/11, it's probably fair to assume that the CIA is not out merely to humiliate Bush but to destroy him. At least we can be sure that the president, never a very industrious student, has learned one thing during his time in the White House: He knows why none of the numerous presidents who hated and feared J. Edgar Hoover ever dared show him up in public.
If the furor over lies keeps up, the president's men will only make it worse on themselves through their secretive, peremptory, capricious ways. A take-no-prisoners policy seems already in effect from the look of things. We see what they have already tried to do to Joseph Wilson, Dick Durbin, and Jeffrey Kofman, but the air of paranoiac retrenchment runs much deeper than that, as I lately learned firsthand. When City Pages contacted the White House for copies of photographs to accompany this story, the flack who fielded the request demanded to know what it was about, and later declined the request. A small thing, but it was the first time in my cumulative 10 years or so at the paper that any agency or office of the federal government has flatly refused to provide public materials on the grounds that it didn't like what we might do with them.
It's been evident for some time that only Bush could beat Bush in 2004, and he is already part of the way there--accent on part. Never forget that the White House still has two formidable assets in the ever-shrinking American public memory and the Democratic presidential field.
Copyright 2003 Steve Perry
http://babelogue.citypages.com:8080/sperry/stories/storyReader$517
Why the US needs the Taliban
By Ramtanu Maitra
Since Pakistani President General Pervez Musharraf made his much-acclaimed visit to Camp David and met US President George W Bush on June 24, new elements have begun to emerge in the Afghan theater. US troops in Afghanistan are now encountering more enemy attacks than ever before, and clashes between Pakistani and Afghan troops along the tribal borders have been reported regularly.
On July 16, speaking to Electronic Telegraph of the United Kingdom, US troop commander General Frank "Buster" Hagenbeck, based at Bagram Air Base in Afghanistan, reported increased attacks over recent weeks on US and Afghan forces by the Taliban, al-Qaeda and other anti-US groups that have joined hands. He also revealed some other very interesting information: the Taliban and its allies have regrouped in Pakistan and are recruiting fighters from religious schools in Quetta in a campaign funded by drug trafficking. Hagenbeck also said that these enemies of US and Afghan forces have been joined by Al-Qaeda commanders who are establishing new cells and sponsoring the attempted capture of American troops. One other piece of news of import from Hagenbeck is that the Taliban have seized whole swathes of the country.
Reliable intelligence
Hagenbeck's statements were virtually ignored in Washington. Also ignored were a number of similar statements issued from Kabul by Afghan President Hamid Karzai and his cabinet colleagues. On July 17, presidential spokesman Jawed Ludin spoke to the Pakistani newspaper The News of the Afghan government's concern over the volatile situation on its border with Pakistan. Ludin urged Pakistan to "take steps" to prevent the Taliban fighters from crossing over to launch terrorist attacks against Kabul. "We will take it seriously to confront it," he warned. "So our expectation is for all those involved in the war against terror to take serious steps," Ludin added, clearly addressing the Bush administration.
A week later, on July 24, in an article for The Nation, a Pakistani news daily, Ahmed Rashid, the well known expert on the Taliban and Afghanistan, quoted President Hamid Karzai, during an interview at Kabul, as saying: "As much as we want good relations with Pakistan and other neighbors, we also oppose extremism, terrorism and fundamentalism coming into Afghanistan from outside. We have one page where there is a tremendous desire for friendship and the need for each other. But there is the other page, of the consequences if intervention continues, cross-border terrorism continues, violence and extremism continue. Afghans will have no choice but to stand up and stop it."
Among Americans, only the special envoy of the US president to Afghanistan and a good friend of President Karzai, Zalmay Khalilzad, has shown any concern about the recent developments. Khalilzad has little choice but to keep up a bold front to the Afghans, telling them how his bosses in Washington are doing their best to rebuild Afghanistan, and attributes the present crisis to the security situation. Like everyone else, Khalilzad has little in reality to offer and, given the opportunity, falls back on what "must be done" and "should be done". At a July 15 press conference at Kabul, Khalilzad said every effort has to be made by Pakistan not to allow its territory to be used by the Taliban elements. This "should not be allowed", he said. "We need 100 percent assurances [from Pakistan] on this, not 50 percent assurances, and we know the Taliban are planning in Quetta."
What is happening? Both Hagenbeck, who boasts to the media about the high quality of his intelligence, and Khalilzad, who is unquestionably in a position to know, have stated that the Taliban and al-Qaeda are being nurtured, not in some inaccessible terrain along the Pakistan-Afghanistan border but in Quetta, the capital of Pakistan's Balochistan province where the Pakistan Army and the ISI have a major presence. Yet, President Bush and his neo-conservative henchmen have remained strangely quiet, allowing Pakistan to strengthen the Taliban in Quetta, and, as a consequence, re-energize al-Qaeda - the killers of thousands of Americans in the fall of 2001.
Recall for a moment: Following the September 11 terrorist attacks in the United States, no other terrorist was portrayed by the United States as more dangerous than al-Qaeda leader Osama bin Laden and no other Islamic fundamentalist group was presented to the American people as more despicable than the Taliban. Within a month the United States invaded Afghanistan to "take out" the Taliban, al-Qaeda and bin Laden, while the world lined up behind the new anti-terrorist messiahs from Washington, providing it the necessary moral and vocal support. Why, then, is Washington now weakening President Karzai and allowing the strengthening and re-emergence of the Taliban?
Karzai shared with Ahmed Rashid his belief, like that of the average Afghan today, that the answer to that question lies in an understanding reached between the United States and Pakistan during Musharraf's visit to Camp David, that Afghanistan could be, in effect, "sub-contracted" to Pakistan. Karzai also told Rashid that Musharraf's critical remarks about the Karzai regime during his visit to the United States reminded him of the pre-September 11 days when Pakistan was fully backing the Taliban and exercising ever-more-strident control over Afghanistan. Musharraf had said, among other things, that the Afghan president does not have much control over Afghanistan beyond Kabul. But, Karzai added in the interview with Rashid, no matter what the outsiders are planning or plotting, as of now, "I want nobody to be under any illusion that Afghanistan will allow any other country to control it." Is Karzai overreacting? Most likely, he is not. He has seen the writing on the wall. It is arguable whether the Taliban's return to power is inevitable, but there is little doubt that under the circumstances it is very convenient for the US.
Bowing to realities
To begin with, it was clear from the outset that the United States never really wanted to be in Afghanistan. It was basically a jumping-off point for the "big enchilada", the re-shaping of the Middle East's politics and regimes. The Afghan reconstruction talk was mostly wishful thinking. For anyone familiar with present-day Afghanistan - its security situation, the drug production and trafficking, its destroyed infrastructure, its rampant illiteracy and poverty - its reconstruction by foreigners is either a dream or a string of motivated lies.
Now, after a half-hearted effort that lasted for almost 18 months, the Bush administration has come to realize that it is impossible to keep Pakistan as a friend and simultaneously keep the Northern Alliance-backed government in power in Kabul. The "puppet" Pashtun leader in Kabul, Hamid Karzai, does not have the approval of Pakistan and the majority of the rest of the Pashtun community straddling both sides of the Pakistan-Afghanistan border. So, either one has Pakistan as a friend with an Islamabad-backed Pashtun group in power in Kabul, or one gets Pakistan as an enemy. There should be no doubt in anyone's mind how the Bush administration would act when confronted with such a choice.
Secondly, look at the Northern Alliance (NA) allies. The best ally of the NA is Russia, the Bush administration's key contestant for supremacy in Central Asia. In the 1980s, the United States spent billions of dollars to get Afghanistan out of the Russian orbit. It is ridiculous to believe that the Bush administration would act differently now to protect the NA and Karzai. Much better is to have Afghanistan sub-contracted to Pakistan and keep the Russians at bay, than to yield ground to Moscow, who is hardly friendly to Pakistan.
Thirdly, the NA, and particularly the Shi'ites of the Hazara region of Afghanistan, are close to Iran. Iran is building a road which will connect the Iranian port of Chahbahar to the city of Herat in central Afghanistan and link up with Kandahar in the southeast. While this is going on, some neo-conservatives in Washington are screaming for Iranian blood. Even if the Bush administration is not quite willing right now to spill that blood, it is nonetheless a certainty that Washington will be more than eager to see the Iranian influence in Afghanistan curbed. If the NA-backed Karzai government stays in power for long, Iran would most definitely enhance its influence. The Taliban do not want that and they have sent a message recently by slaughtering the Shi'ites in Quetta with the full knowledge of the Pakistani authorities. Besides being anti-Russia, the Taliban are also anti-Shi'ite, or anti-Iran. This added "virtue" of the Taliban has not gone unnoticed in the corridors of intrigue-makers in Washington.
Finally, there is the India factor. A minor factor, it does, however, come into play in calculating the pluses and minuses of the resurgent Taliban option. The Bush administration wants closer relations with India - not on New Delhi's terms, but on Washington's terms. Indian activity in Afghanistan has increased multifold since the Karzai government came to power in the winter of 2001. These developments are being eyed suspiciously by Islamabad. While Washington would not make a federal case out of it, it surely does not like to see India forming a strategic alliance with Russia and Iran in Afghanistan. Washington would rather like to break such an alliance quickly, particularly if its ally, in this case Pakistan, wants such an alliance broken. Significantly, a well-connected relative of Musharraf, Brigadier Feroz Hassan Khan, formerly at the Wilson Center and now a fellow at the Monterey Institute of International Studies, addressed these issues directly in a recent publication.
Not just whistling in the dark
In the January issue of Strategic Insight, a publication for the Center for Contemporary Conflict, Khan observed: "In Iran, President Khatami is moving in tandem and cooperation with Pakistan in supporting the Karzai government as manifest in the recent visit to Pakistan. However there are hardliners in Iran who would want to continue with the old game of supporting warlords and factions and consider Pakistan as rival vis-a-vis Afghanistan, and who are still suspicious of the Saudi role. Iran is pitching its bid, by constructing a road from Chahbahar Port in the Persian Gulf through Iran's Balochistan area to link up eventually with Kandahar in the hope of 'breaking the monopoly of Pakistan'. Afghanistan is currently sustained primarily through the Karachi-Quetta/Peshawar routes - Bolan and Khyber passes respectively - which has provided Afghanistan with trade and transit with the outside world for centuries."
Furthermore, Khan pointed out, "Russia remains involved with the major warlords [of Afghanistan]. One such warlord, Rashid Dostum, was recently on a shopping spree for arms and equipment from Moscow. Russia believes it has its own experience and expertise in Afghanistan and must reestablish its interests. Given the history, Pakistan is very uncomfortable with this development."
Of course, the Khan's treatise would not have been complete without pointing to the devious role of the Indians in Afghanistan. He said: "India is a major proactive player now. It is providing well-coordinated military supplies to the Northern Alliance thorough the air base in Tajikistan. This includes weapons, equipment and spare parts aimed at strengthening those elements that had become the sworn enemies of Pakistan during the Taliban's rule. Fear in Pakistan is that despite Afghanistan's changed policies, some elements still hold a grudge against Pakistan and would be willing to do India's bidding. This would bring the India-Pakistan rivalry into the Afghan imbroglio."
It is safe to assume that Khan, who has an extensive background in arms control, disarmament and international treaties, and who formulated Pakistan's security policy on nuclear war, arms control and strategic stability in South Asia, is not merely whistling in the dark.
The terms of convenience
Now the question remains, what might Pakistan be expected to deliver in return for the Bush administration granting it control over Afghanistan once more? In the real world, Pakistan can help the United States significantly. It has already agreed not to provide nuclear technology to Islamic nations. Musharraf may have to give the United States control of its nuclear research facility, among other things. More important will be to hand over Osama bin Laden to the United States and send two brigades of Pakistani troops to Iraq to help out the beleaguered US troops there. The arrest of Osama would surely justify the US mission to Afghanistan, and could set the stage for America's eventual withdrawal from that country. Another likely item on the agenda is Pakistani recognition of Israel.
Would this new arrangement of "sub-contracting" (to use Karzai's apt term) Afghanistan to the Pakistan-Taliban combination complicate the already complex situation any further? Probably not. It was evident in October 2001, when the United States went pell-mell into Afghanistan with the help of the Northern Alliance, that America's hastily-organized arrangement there was unsustainable. It was clear that no matter what Islamabad says, or how much pressure is brought to bear on it, Pakistan has absolutely no reason whatsoever to agree to such an arrangement.
Washington came to appreciate the non-sustainability of this arrangement when Musharraf, in a sleight of hand, brought the Muttahida Majlis-e Amal - the MMA, also known as "Musharraf, Mullahs and the Army" - to power in the two provinces bordering Afghanistan. At that point, Karzai's tenure as president of Afghanistan shrank abruptly, and Washington deemed it time to give up the "Marshall Plan for Afghanistan" and settle for next best - Taliban rule in Afghanistan under Pakistani control, once again.
(Copyright 2003 Asia Times Online Co, Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)
http://www.atimes.com/atimes/Central_Asia/EG30Ag01.html
Speculative Bubbles in Housing & Stock Markets
by AL MARTIN
The US housing market has now reached the absolutely classic
definition of a speculative bubble in an asset class.
In the first quarter of ’03, median home prices again advanced by 6% vs. the expected advance of less than 1%. Despite the fact that inventory of unsold homes increased to an 11 year high. Despite the fact that residential construction spending has declined for two months in a row. And, despite the fact that mortgage and refinancing applications have declined from their previous peaks for 2 months in a row.
These then are the classic signs of the top of a
speculative bubble-- when prices continue to advance
irrationally, yet unsold inventories of merchandise
also increase to record levels.
These numbers come from the National Realtors
Association and the Mortgage Brokers Association, and
they refer to median home prices in the US.
A classic sign of a speculative bubble is that
prices continue to advance as unsold inventories
continue to rise.
This refers not only to housing, but
any other asset class. Prices are still rising at a
double-digit annual rate, yet the amount of unsold
merchandise moves into new highs. The amount of new
merchandise moving into the market continues to fall.
The number of people applying for loans to buy that
merchandise continues to fall. The question then is –
how much further can prices advance when the available
supply is also advancing and the pool of available
buyers continues to shrink?
(Note: Tulip Buyers - Beware)
These are the signs of a classic bubble in its
final phase. This is my own personal interpretation
that these are the collateral indicators of a
speculative bubble of any asset class in its final
phase.
People ask me on radio shows -- what’s behind
the speculative bubble and I say all you have to do is
watch the CNBC polls they run once a week, when the
question of the day is – do you believe that a year
from now housing prices will be higher or lower than
they are now?
The poll shows that 78% of the people feel that
it will be higher. The same thing can be said about
the bear market rally in stocks. In other words, stock
prices have now rallied so far beyond the underlying
economic fundamentals that you begin to get the
warning signs – increased inventories, reduced
purchasing, and reduced construction which means
reduced replacement or expansion of that inventory.
The construction spending numbers came out negative
again, two months in a row. That is the first time
that has happened in 6 years, yet the market
nevertheless rallied 100 points.
So the hint to our readers is -- stay liquid and
keep your trades short.
When you have two speculative bubbles that are
created at the same time in different asset classes,
in this case two primary asset classes – the
securities markets and the housing markets – and they
begin to peak at the same time – watch out below
because cash becomes king.
An interesting subcomponent of this is to look
at the statistics of the Mortgage Brokers of America
(MBA) of mortgage applications and refinancing,
particularly the application index.
How could this speculative bubble be maintained
in a declining economic growth market where
unemployment is skyrocketing and people have lost
trillions in their IRAs, 401Ks and securities in
general?
http://www.conspiracyplanet.com/channel.cfm?channelid=49&contentid=883&page=2
The Theft of Your Vote Is Just a Chip Away
By Thom Hartmann opednews.com
[Yeah; it's long, read it anyway. Every word. No skimming.]
Are computerized voting machines a wide-open back door to massive voting fraud? The discussion has moved from the Internet to CNN, to UK newspapers, and the pages of The New York Times. People are cautiously beginning to connect the dots, and the picture that seems to be emerging is troubling.
"A defective computer chip in the county's optical scanner misread ballots Tuesday night and incorrectly tallied a landslide victory for Republicans," announced the Associated Press in a story on Nov. 7, just a few days after the 2002 election. The story added, "Democrats actually won by wide margins."
Republicans would have carried the day had not poll workers become suspicious when the computerized vote-reading machines said the Republican candidate was trouncing his incumbent Democratic opponent in the race for County Commissioner. The poll workers were close enough to the electorate – they were part of the electorate – to know their county overwhelmingly favored the Democratic incumbent.
A quick hand recount of the optical-scan ballots showed that the Democrat had indeed won, even though the computerized ballot-scanning machine kept giving the race to the Republican. The poll workers brought the discrepancy to the attention of the County Clerk, who notified the voting machine company.
"A new computer chip was flown to Snyder [Texas] from Dallas," County Clerk Lindsey told the Associated Press. With the new chip installed, the computer then verified that the Democrat had won the election. In another Texas anomaly, Republican state Senator Jeff Wentworth won his race with exactly 18,181 votes, Republican Carter Casteel won her state House seat with exactly 18,181 votes, and conservative Judge Danny Scheel won his seat with exactly 18,181 votes – all in Comal County. Apparently, however, no poll workers in Comal County thought to ask for a new chip.
Startling Results
The Texas incidents happened with computerized machines reading and then tabulating paper or punch-card ballots. In Georgia and Florida, where paper had been totally replaced by touch-screen machines in many to most precincts during 2001 and 2002, the 2002 election produced some of the nation's most startling results.
USA Today reported on Nov. 3, 2002, "In Georgia, an Atlanta Journal-Constitution poll shows Democratic Sen. Max Cleland with a 49%-to-44% lead over Republican Rep. Saxby Chambliss." Cox News Service, based in Atlanta, reported just after the election (Nov. 7) that, "Pollsters may have goofed" because "Republican Rep. Saxby Chambliss defeated incumbent Democratic Sen. Max Cleland by a margin of 53 to 46 percent. The Hotline, a political news service, recalled a series of polls Wednesday showing that Chambliss had been ahead in none of them."
Just as amazing was the Georgia governor's race. "Similarly," the Zogby polling organization reported on Nov. 7, "no polls predicted the upset victory in Georgia of Republican Sonny Perdue over incumbent Democratic Gov. Roy Barnes. Perdue won by a margin of 52 to 45 percent. The most recent Mason Dixon Poll had shown Barnes ahead 48 to 39 percent last month with a margin of error of plus or minus 4 points."
Almost all of the votes in Georgia were recorded on the new touchscreen computerized voting machines, which produced no paper trail whatsoever. And nobody thought to ask for a new chip, although it was noted on Nov. 8 by the Atlanta Constitution-Journal that in downtown Atlanta's predominantly Democratic Fulton County "election officials said Thursday that memory cards from 67 electronic voting machines had been misplaced, so ballots cast on those machines were left out of previously announced vote totals." Officials added that all but 11 of the memory cards were subsequently found and recorded.
Similarly, as the San Jose Mercury News reported in a Jan. 23, 2003 editorial titled "Gee Whiz, Voter Fraud?" "In one Florida precinct last November, votes that were intended for the Democratic candidate for governor ended up for Gov. Jeb Bush, because of a misaligned touchscreen. How many votes were miscast before the mistake was found will never be known, because there was no paper audit." ("Misaligned" touchscreens also caused 18 known machines in Dallas to register Republican votes when Democratic screen-buttons were pushed: it's unknown how many others weren't noticed.)
Apparently, nobody thought to ask for new chips in Florida, either.
In Minnesota, the Star Tribune reported just a few days before the election (Oct. 30, 2002) that, "Dramatic political developments since Sen. Paul Wellstone's death Friday have had little effect on voters' leanings in the U.S. Senate race, according to a Star Tribune Minnesota Poll taken Monday night. Wellstone's likely replacement on the ballot, former Vice President Walter Mondale, leads Republican Norm Coleman by 47 to 39 percent – close to where the race stood two weeks ago when Wellstone led Coleman 47 to 41 percent."
When the computerized machines were done counting the vote a few days later, however, Coleman had beat Mondale by 50 to 47 percent. If Mondale had asked for new chips, would it have made a difference? We'll never know.
One state where Republicans did ask for a new chip was Alabama. Fox News reported on Nov. 8, 2002 that initial returns from across the state showed that Democratic incumbent Gov. Don Siegelman had won the governor's race. But, overnight, "Baldwin County took center stage when election officials released results Tuesday night showing Siegelman with 19,070 votes – enough for a narrow victory statewide. Later, they recounted and reduced Siegelman's tally to 12,736 votes – enough to give Riley the victory."
What produced the sudden loss of about 6,000 votes? According to the Fox report: "Probate Judge Adrian Johns, a member of the county canvassing board, blamed the initial, higher number on 'a programming glitch in the software' that tallies the votes." All parties were not satisfied with that explanation, however. Fox added: "The governor claimed results were changed after poll watchers left."
It turns out the "glitch in the software" in Alabama was discovered by the Republican National Committee's regional director Kelley McCullough, who, according to a story in the conservative Daily Standard, "logged onto the county's municipal website and confirmed that [incumbent Democratic Governor] Siegelman had actually only received 12,736 votes – not the 19,070 the Associated Press projected for him. A computer glitch had caused the error. The erroneous tally would have put Siegelman on top by 3,582 votes, but the corrected one gave Riley a 2,752-vote edge."
As the Murdoch-owned Daily Standard noted, "If it hadn't been for one woman, the Republican National Committee's regional director Kelley McCullough, things might have gone terribly wrong for [Republican Gubernatorial candidate] Riley."
Similarly, in Davison County, South Dakota, the Democratic election auditor noticed the machines double counting votes (it's not noted for which side) and had a "new chip" brought in.
Hacking Democracy?
This is just the tip of the iceberg of '00 and '02 election irregularities, as reported by www.votewatch.us. Either the system by which democracy exists broke that November evening, or was hacked, or American voters became suddenly more fickle than at any time since Truman beat Dewey.
Maybe it's true that the citizens of Georgia simply decided that incumbent Democratic Senator Max Cleland, a wildly popular war veteran, was, as Republican TV ads suggested, too unpatriotic to remain in the Senate, even though his Republican challenger, Saxby Chambliss, had sat out the Vietnam war with a medical deferment.
Maybe, in the final two days of the race, those voters who'd pledged themselves to Georgia's popular incumbent Governor Roy Barnes suddenly and inexplicably decided to switch to Republican challenger Sonny Perdue.
Maybe George W. and Jeb Bush, Alabama's new Republican governor Bob Riley, and a small but congressionally decisive handful of other long-shot Republican candidates around the country really did win those states where conventional wisdom and straw polls showed them losing in the last few election cycles, but computer controlled voting or ballot-reading machines showed them winning.
Perhaps, after a half-century of fine-tuning exit polling to such a science that it's now used to verify if elections are clean in Third World countries, it really did suddenly become inaccurate in the United States in the past few years and just won't work here anymore. Perhaps it's just a coincidence that the sudden rise of inaccurate exit polls happened around the same time corporate-programmed, computer-controlled, modem-capable voting machines began recording and tabulating ballots.
But if any of this is true, there's not much of a paper trail from the voters' hand to prove it.
You'd think in an open democracy that the government – answerable to all its citizens rather than a handful of corporate officers and stockholders – would program, repair and control the voting machines. You'd think the computers that handle our cherished ballots would be open and their software and programming available for public scrutiny. You'd think there would be a paper trail of the actual hand-cast vote, which could be followed and audited if there was evidence of voting fraud or if exit polls disagreed with computerized vote counts.
You'd be wrong.
Upsets In Nebraska
It's entirely possible that Nebraska Republican Chuck Hagel – who left his job as head of an electronic voting machine company to run as a long-shot candidate for the U.S. Senate – honestly won all of his elections.
Back when Hagel first ran for the U.S. Senate in 1996, his own company's computer-controlled voting machines showed he'd won stunning and unexpected victories in both the primaries and the general election. The Washington Post (1/13/1997) said Hagel's "Senate victory against an incumbent Democratic governor was the major Republican upset in the November election." According to Bev Harris, author of "Black Box Voting," Hagel won virtually every demographic group, including many largely black communities that had never before voted Republican. Hagel was the first Republican in 24 years to win a Senate seat in Nebraska.
Six years later Hagel ran again, this time against Democrat Charlie Matulka in 2002, and won in a landslide. As his Website says, Hagel "was re-elected to his second term in the United States Senate on November 5, 2002 with 83% of the vote. That represents the biggest political victory in the history of Nebraska." What the site fails to disclose is that about 80 percent of those votes were counted by computer-controlled voting machines put in place by the company affiliated with Hagel: built by that company; programmed by that company; chips supplied by that company.
"This is a big story, bigger than Watergate ever was," said Hagel's Democratic opponent in the 2002 Senate race, Charlie Matulka (www.lancastercountydemocrats.org/matulka.htm). "They say Hagel shocked the world, but he didn't shock me."
Is Matulka the sore loser the Hagel campaign paints him as, or is he democracy's proverbial canary in the mineshaft? Between them, Hagel and Chambliss' victories sealed Republican control of the Senate. Odds are both won fair and square, the American way, using huge piles of corporate money to carpet-bomb voters with television advertising. But either the appearance or the possibility of impropriety in an election casts a shadow over American democracy.
"The right of voting for representatives is the primary right by which all other rights are protected," wrote Thomas Paine over 200 years ago. "To take away this right is to reduce a man to slavery.."
That slavery, according to Hagel's last opponent Charlie Matulka, is at our doorstep. "They can take over our country without firing a shot," Matulka said, "just by taking over our election systems."
Revolution by control of computer chips? Is that really possible in the USA?
Who's Counting the Votes?
"Imagine it's Election Day 2004," says U.S. Congressman Rush Holt, also a scientist with a Ph.D. in physics who knows more than a little bit about both politics and computers. "You enter your local polling place and go to cast your vote on a brand-new touchscreen voting machine. The screen says your vote has been counted. As you exit the voting booth, however, you begin to wonder. How do I know if the machine actually recorded my vote?"
It's a question that probably hasn't occurred to many Americans, even those who used the touchscreen machines particularly notable in states where there were "upsets" and "glitches" in the 2002 election. But it occurred to Congressman Holt, and after looking at the law, the voting machines and the companies that produce them, he concluded that, "The fact is, you don't [know if the machine actually recorded your vote]."
Bev Harris has studied the situation in depth and thinks both Congressman Holt and candidate Matulka may be on to something. The company with ties to Hagel even threatened her with legal action when she went public about the company having built the machines that counted Hagel's landslide votes.
In the meantime, exit-polling organizations have quietly gone out of business, and the news arms of the huge multinational corporations that own our networks are suggesting the days of exit polls are over. Virtually none were reported in 2002, creating an odd and unsettling silence that caused unease for the many voters who had come to view exit polls as proof of the integrity of their election systems.
As all this comes to light, many citizens and even a few politicians are wondering if it's a good idea for corporations to be so involved in the guts of our voting systems. The whole idea of a democratic republic was to create a common institution (the government itself) owned by its citizens, answerable to its citizens and authorized to exist and continue existing solely "by the consent of the governed."
However, the recent political trend has moved us in the opposite direction, with governments turning administration of our commons over to corporations answerable only to profits. The result is the enrichment of corporations and the appearance that democracy in America has started to resemble its parody in banana republics.
Further frustrating those concerned with the sanctity of our vote, the corporations selling and licensing voting machines and voting software often claim Fourth Amendment rights of privacy and the right to hide their "trade secrets" – how their voting software works and what controls are built into it – from both the public and the government itself.
Secret Software
"If you want to make Coca-Cola and have trade secrets, that's fine," says Harvard's Rebecca Mercuri, Ph.D., one of the nation's leading experts on voting machines. "But don't try to claim trade secrets when you're handling our votes."
The window into who owns whom among the various companies – most of which are not publicly traded – is equally opaque. One voting machine company was partially funded at startup by wealthy Republican philanthropists who belong to an organization that believes the Bible instead of the Constitution should govern America. Another is partly owned by a defense contractor. Even the reincarnation of a company that helped Enron cook their books has gotten into the act.
"There are several issues here," says reporter Lynn Landis, who has written extensively about voting machines. "First, there's the issue that the Voting Rights Act requires that poll watchers be able to observe the vote. But with computerized voting machines, your vote vanishes into a computer and can't be observed."
To solve this, many are calling for a return to paper ballots that are hand-counted. It may be slower, but temp-help precinct workers may even cost less than electronic voting machines (which are a multi-billion-dollar boon for corporate suppliers), and will ensure that real humans are tabulating the vote.
"Second," says Landis, "there's the issue of who controls the information. Of all the functions of government that should not be privatized, handling our votes is at the top of the list. This is the core of democracy, and must be open, transparent, and available to both the public and our politicians of all parties for full and open inspection."
Although Rush Holt is suggesting there be stringent standards, he hasn't gone so far as to say corporations shouldn't process our votes. But why not? Most government functions – from our courts to our fire departments – run fairly smoothly, despite carping from the extreme right wing. Increasingly, people across America are demanding that – like in other democracies around the world – our system of voting should be publicly owned.
Another point Dr. Rebecca Mercuri raises is that the Help America Vote Act (HAVA) – passed after the 2000 election – calls for the President to appoint, as the Act states, "with the advice of the Senate," members to "an independent entity, the Election Assistance Commission." The commission is then to create "the Election Assistance Commission Standards Board, the Election Assistance Commission Board of Advisors ... and the Technical Guidelines Development Committee" to establish standards and oversee compliance of the law by voting machine companies.
"But the commission has not yet been established," says Mercuri, even though billions in federal dollars have been distributed under HAVA for states to buy electronic voting machines and license their software from private corporations. "As a result," Mercuri says, "there are currently no meaningful federal standards for voting machines. Many of the machines used in 2002 were built to industry guidelines that many question and were established in 1990."
And those standards are problematic. In the course of researching "Black Box Voting," Harris did a Google search on one of the voting machine companies, Diebold Election Systems, and found it maintained an open FTP site on the internet apparently through the 2002 election. In it, she located computer code used to tabulate elections and, apparently, actual vote count files that could be downloaded or even replaced by any visiting hacker.
A website for the New Zealand news publication The Scoop has published Diebold's files on the Internet, producing lively discussions among computer enthusiasts and scientists who have apparently (and perhaps unlawfully) cracked the company's various codes.
The Scoop also performed a statistical analysis comparing American polls and computer-controlled voting machine results. In many states there were no variations. In a few, however, they found that "the Republican Party experienced a pronounced last minute swing in its favour of between 4 and 16 points. Remarkably this last minute swing appears to have been concentrated in its effects in critical Senate races (Georgia and Minnesota) where [the Republican Party] secured its complete control of Congress."
Purging Voter Rolls
While corporate bungles or the potential for outright vote fraud are a concern of many opposed to electronic voting machines, another issue of concern is the concentration of voter rolls in the hands of partisan politicians instead of civil servants.
In most states, local precincts or counties maintain their own voter rolls. Florida, however, had gone to the trouble before the 2000 election to consolidate all its voter rolls at the state level, and put them into the custody and control of the state's elected Secretary of State, Katherine Harris, who was also the chairman of the Florida campaign to elect George W. Bush.
As described in disturbing detail in the documentary "Unprecedented" and in Greg Palast's book "The Best Democracy Money Can Buy," Harris spent millions to hire a Texas company to clean up the Florida list by purging it of all convicted felons – using a list of felons who lived in the State of Texas.
One of the legacies of slavery is that a large number of African Americans share the same or similar names, and sure enough, when the Texas felon list was compared with the Florida voter list over 94,000 matches or near-matches were found. Those registered Florida voters – about half of them African Americans (who generally vote Democratic) – with names identical or even similar to Texas felons were deleted from the Florida voter rolls, and turned away from the polls when they tried to vote in 2000 and in 2002.
Now, under HAVA, states across the nation are consolidating their voter lists and handing them over to Harris's various peers to be cleaned and maintained.
Another concern is Internet voting, since it's impossible to ensure its accuracy. Imagine if all the time a voting machine was being used, it also had its back door open and an unlimited number of technicians and hackers could manipulate its innards before, during and after the vote.
Activists suggest this is one of the reasons it's dangerous that so many electronic voting machines today are connected to company-access modems, but it's an even stronger argument against the very core of democracy – the vote – being handled out in the public of cyberspace.
Nonetheless, the Pentagon is moving ahead with plans to have a private corporation conduct Internet voting for overseas GIs in 2004, and many fear it'll be used as a beta test for more widespread Internet voting across the nation. While many Americans think the ability to vote from home or office over the computer would be wonderfully convenient, the results could be disastrous: even the CIA hasn't been able to prevent hackers from penetrating parts of its computer systems attached to the Internet.
Votes Are Sacred
On most levels, privatization is only a "small sin" against democracy. Turning a nation's or community's water, septic, roadway, prisons, airwaves or health care commons over to private corporations has so far demonstrably degraded the quality of life for average citizens and enriched a few of the most powerful campaign contributors, but it hasn't been the end of democracy.
Many citizens believe, however, that turning the programming and maintenance of voting over to corporations that can share their profits openly with politicians (or, like Hagel, become the politicians), puts democracy itself at peril.
A growing number of Americans are saying our votes are too sacred to reside only on "chips," and that it's critical that we kick corporations out of the commons of our voting, and that we make sure we have a human-verifiable vote paper trail that goes all the way back to the original hand of the original voter.
If there are chips involved in the voting process, these democracy advocates say, government civil service employees who are subject to adversarial oversight by both parties must program them in an open-source fashion, and in a way that produces a voter-verified paper trail.
Anything less, and our democracy may vanish as quickly as a network of modem-connected election-counting computers can reboot.
Thom Hartmann is a nationally syndicated daily talk show host and the author of "Unequal Protection" and "The Last Hours of Ancient Sunlight," among other books. This article is copyright by Thom Hartmann, but permission is granted for reprint in print, email, blog or web media so long as this credit is attached and the title remains the same.
originally published in AlterNet
http://www.opednews.com/hartmann_theft_of_your_vote_just_a_chip.htm
[Now do something...]
Bush Family Business: The Clear Channel Connection
by AL MARTIN
Formerly an associate of Oliver North and General Richard Secord, today Al Martin is a political/ economic analyst, who calls himself a "Recovering Republican Scamscateer."
In his column called "Bush Family Business: Committing Scams on OPM (Other People's Money) and the New American Caesarism," Al Martin paints a grim picture for the future of the United States.
Even though his memoir called "The Conspirators: Secrets of an Iran Contra Insider" hasn't sold as many copies as "Treason" by Ann Coulter, Al Martin's book tells the truth. It's based on first-hand knowledge of government fraud and other illicit covert activities of the Shadow Government.
"Now even the Bush Cabal is confused, especially my old Republican Cohorts in Crime," writes Martin in his usual deadpan style of political black humor.
"The Bush Regime’s intentions have even confused Bushonian Republican Loyalists. When you walk around the Beltway, half of them have grown toothbrush mustaches -- and the other half are wearing togas.
http://www.conspiracyplanet.com/
US offshore tax amnesty recovers only $1m
By Joshua Chaffin in Washington
Published: July 30 2003 1:28 / Last Updated: July 30 2003 1:28
The US Treasury's success at cracking down on offshore tax shelters was called into question on Tuesday after it was revealed that a much-touted amnesty programme had so far recovered less than $1m in unpaid tax.
The programme, which the Internal Revenue Service hoped would bring in $100m, has an estimated cost of $56m.
The Treasury and the IRS have recently taken aggressive steps against tax shelters, suing law and accounting firms to force them to disclose the names of customers to whom they sold dubious tax avoidance strategies.
The amnesty scheme, known as the Offshore Voluntary Compliance Initiative, was launched in January as a softer approach. Individuals who reported income they had hidden overseas and then repaid the government would face reduced penalties.
Bob Wenzel, acting head of the IRS, reported a "strong response" in May, saying more than 1,200 people had come forward. As of June 30, however, the IRS had assessed $3.3m in unpaid taxes and collected just $744,546, according to an initial review by the Treasury's inspector-general for tax administration.
[No assessment no tax owed.]
The study was cited in a letter sent on Tuesday by Senator Charles Grassley, chairman of the Senate finance committee, and Max Baucus, senior Democrat on the committee, to John Snow, Treasury secretary, urging him to take a "more vigorous approach" against tax cheats.
The IRS disputed the inspector's findings, saying the campaign had been "productive", and that it had collected about $75m as of last week through OVCI and by examining individual taxpayers. The IRS did not specify, however, how much of that money resulted directly from the programme.
Some experts have questioned whether OVCI would be effective because many of the tax dodges were criminal frauds. "This was like asking people who robbed a bank to come in and return the money," said Howard Abrams of law firm Steptoe & Johnson.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=105...
Somebody go try and post this on RB...I'm too lazy to bother with them any more; as several folks have said: "Have removed RB from "my favorites"."
Virus writers turn to spam
Clicking on spam could give you a virus
Britain's technology managers have issued a warning about spam e-mails that act as a new way for Windows viruses to penetrate organisations.
The spam message tricks people into clicking on a link that takes them to a website but also, unseen, delivers a virus too.
Versions of the virus-bearing spam let people unsubscribe from bogus newsletters or claim to give away electronic greetings cards.
Technology managers fear that the viruses delivered by the malicious message will include key logging programs that will steal login details, passwords or credit card numbers.
Hidden and dangerous
Before now senders of unwanted commercial e-mail have used viruses to gain control of innocent machines that they use to send millions of messages on their behalf.
But now in a reversal of this tactic, virus writers are adopting the tactics of spammers to spread their own malicious creations.
A warning about these spam-viruses was released by the Corporate IT Forum (Tif), which is the industry association for senior technology managers working at more than 130 of Britain's largest organisations.
Over the past few years many companies have got used to tackling viruses because of a surge in the numbers of malicious programs circulating via e-mail.
Spam is becoming a big problem too and is often hard to filter out because it can resemble legitimate e-mail messages.
By putting links to websites that download viruses, the creators of the viruses are avoiding the scanners and filters that stop malicious programs that typically travel inside e-mails.
'Danger of spam'
"Clicking on a link in a spam e-mail is the equivalent of handing a burglar the keys to your house," said David Roberts, chief executive of Tif.
"People must understand that there could be a very nasty shock lurking behind each and every spam e-mail."
Mr Roberts said spam was becoming an increasingly large problem and 80% of the e-mail dealt with by some Tif members was now unwanted commercial messages.
He said the rise of the spam-virus turned what was an irritant into something more dangerous.
Mr Roberts urged people to think before they click on links in e-mail messages and to be suspicious of any messages they get that they were not expecting.
http://news.bbc.co.uk/2/hi/technology/3107613.stm
Wizzards of Money:
http://www.wizardsofmoney.org/episodes.html
Good stuff.
Educationamal like that...
NASDAQ Rocket:
2003's Greatest Attraction
Ralph Kettell
July 30, 2003
The wildest amusement ride this summer (and fall) may not be at a theme park. You'll have to call your broker for a ride on this baby. The NASDAQ Rocket is the greatest roller coaster the world has ever seen and is coming to you courtesy of Alan Greenspan and his great dollar-printing machine. This baby has a drop that will make other coasters seem like mere kiddie rides. Buckle up your seat belt, tighten down the safety bar, and more importantly say your prayers. The drop is coming, slowly at first, but it will drop off when you least expect it.
If you are looking to climb aboard for a ride, you are just a bit late as this one left the station in October. It has been clicking up the track, click, click, click from about 1150 to 1776 (a very patriotic height). However it is now over the top and picking up a little speed. Slowly at first with a few bumps, but gradually faster, faster, and faster till you can't stand it. Let me off you scream, I can't take it, please let me off. This ride is definitely not for the faint of heart or those with a weak constitution or a bad back. Sorry, but you should have read the fine print before you got on.
When the Rocket really gets rolling, watchout! The bottom of this drop is all the way down at 900 or maybe lower, and that's if the track doesn't break from the huge stress and strain. Then with the cars barrelling down the track at full speed look for the Rocket to fly back up to 1350 before the next thrilling drop. No, no, NO! let's not get ahead of ourselves. The purpose of the article is to talk about this part of the ride: the impending drop and its timing and magnitude.
Why do I believe the market, and in particular the NASDAQ is going to reverse course and resume its bearish ways? Where do I start? Insider selling is accelerating; interest rates are almost as low as they can go; the economy is moribund, but looking brighter (so the "experts" claim); the PE ratios are still in the stratosphere; and to top it off complacency is running rampant.
Let's dissect these factors one at a time. Insider selling is at phenomenally high levels. If the men and women running the major corporations in this country are selling their stock to beat the band, they must think they'll be able to buy it back considerably cheaper at a later date. They have a much better handle on leading indicators for their business than you and I. While they do not have a 20/20 crystal ball, the conditions that they can discern for the near and intermediate term future must appear quite dim.
As for interest rates, the short term rates which the Federal Reserve can control are getting close to as low as they can go. The long term rates which the Fed cannot control have recently taken a turn for the worse (as far as the Fed is concerned) i.e. upwards. This trend is having a significantly negative impact on the mortgage refinance business. This is a problem for the Fed, because excluding the stock market; the mortgage business may be the only business in the country that was growing. The United States no longer has a significant manufacturing base, our predominant businesses are printing and distributing dollars, making loans, and trading stocks. We are headed for the Japanese problem of zero interest rates, zero room to manoeuvre, and zero (or worse) growth.
The so called "experts" who claim the economy is improving are largely the same folks who failed to recognize that the U.S. was entering a recession in 2001/2002. When they finally admitted publicly that the economy had slowed down a bit, they promptly claimed the recession was over. Pray tell, how can you declare a recession is over when you never declared one to begin with? In any case, I find it difficult to believe that the economy is really improving. Just ask the poor unfortunate folks who are out of work or those who have had to take a much lower paying job after they were laid off.
For the sake of argument let us suppose the experts are right, and the economy is starting to grow again. How will a recovering economy affect the stock market in light of the lowest interest rates in over half a century and perhaps the largest money supply growth of all time? It would eventually (if not sooner) translate into higher interest rates to moderate the growth in a recovering economy and prevent a surge in inflation. Any rise in interest rates would be disastrous for the stock market, especially against the backdrop of the incredible PE ratios that stocks currently command. The equity markets are performing a huge balancing act on the point of a sword and the least disturbance will knock it over and impale the players (riders) on that sword.
Now to the critical point, the rampant complacency! The market players have become complacent to a level which portends a major sell off. The VIX or volatility index is a measure of the implied volatility of options on the CBOE (Chicago Board Options Exchange). When the VIX is high it means that investors are worried about losses in the markets and are trading as if the market is going lower. They are nervous and are anxious to protect their precious investment capital. Conversely, when the VIX is low, the opposite is true. Investors are complacent, because the market has been going up and they see no reason for the trend to change. They are trading as if the market is perpetually going up and have little to no defensive position in place.
The past few days have seen the VIX drop to levels not seen since March of 2002. At that time the market had also grown complacent and simultaneously overvalued. I decided to short the NASDAQ. The vehicle I chose to short the NASDAQ was Profunds Ultra Short OTC symbol USPIX. There is normally a $7500 minimum investment for this fund, but if you use Ameritrade the minimum is $2000. I suspect that most major brokerages have a similar deal with Profunds.
My two primary reasons for choosing USPIX were that I could own it in my IRA (neither shorting nor options trading are allowed in most IRAs) and also the leverage of the fund. USPIX invests in NASDAQ futures and the managers attempt to match the inverse of the performance of the NASDAQ with a 2X gearing. This means that for every 1% drop in the NASDAQ, USPIX should rise about 2%. The downside of the 2X gearing is that a 1% rise in the NASDAQ typically results in a 2% loss.
My trade from last March through July resulted in over a 100% return in about 4 months. I entered the positions starting on March 21, 2003 when the VIX closed at 19.98 and USPIX was $40.67. I sold the position between July 17th and July 29th for an average sale price of $83.61...
The rest of it with chart:
http://www.321gold.com/editorials/kettell/kettell073003.html
Refinancing demand slides 32.9%
Demand for home loans drying up as mortgage rates continue to climb.
July 30, 2003: 8:18 AM EDT
NEW YORK (Reuters) - A rise in interest rates dampened demand for home mortgage refinancings and loans for home purchases last week, an industry survey reported Wednesday.
The drop in demand diminishes the key support that housing has provided the U.S. economy in recent years.
Rates for 30-year loans, the most commonly used home mortgage, rose to 5.87 percent in the latest week from 5.72 percent in the previous week, according to the Mortgage Bankers Association of America.
Demand for refinancings as measured by the trade group's refinance index plummeted 32.9 percent to 4,145.8 in the week ended July 25. The purchase index, the measure of demand for loans to buy homes, fell 3.5 percent to 426.9.
Record home sales and refinancings have been an important support for a struggling economy in recent years because it encourages spending as owners outfit their new homes with furniture and appliances.
Low rates have allowed many homeowners to cut borrowing costs by refinancing their loans. Many owners have withdrawn equity from their homes with the help of cash-out refinancings and used the money to pay down debt or support spending on goods and services.
"Obviously, there is a strong relationship between refi activity and mortgage rates. The refinance market is going to take a hit," said Richard Green, principal economist at Freddie Mac.
At the same time, Green said there are factors other than low borrowing costs that drive demand for homes.
"As to home buying, the market is more complex. It is not just interest rates, but about people's expectations about home prices in the future, the cost of rent and alternative investment opportunities," Green noted. "The stock market uncertainties will cause people to put money into the housing market."
So, while higher borrowing costs are sure to drive down demand for refinancings, housing could remain strong.
"There are still people refinancing. There are procrastinators, but the vast majority have done so," said Chris Low, chief economist FTN Financial. "They are coming in [to lenders] under the impression that rates are at lows and then obviously they are disappointed."
Looking ahead, Low said home sales could jump in July as stragglers look to buy homes before rates rise further. "Some people will have rate locks they'll push to get done," he said, adding "you will see a rise in home sales, then activity should peter out pretty quickly after that."
"In coming months, cash flow to homeowners will start to dry up," Low said. "Refis will be a negligible component of the economy if rates are at this level or higher by year-end."
http://money.cnn.com/2003/07/30/news/economy/mortgage_activity.reut/index.htm
Silver:
Hint, begins with an "S"
Bob Moriarty
July 29, 2003
During the depths and despair of World War II, Winston Churchill commissioned a Royal Navy Lieutenant named C. Northcote Parkinson to do a study on the nature of growth in organizations. Parkinson discovered a tendency of organizations to grow at a rate of about 3.5% to 5% a year regardless of the work to be accomplished. We are probably more familiar with the derivative of Parkinson's work, now called Parkinson's Law, "Work expands to fit the time allotted."
It's for this reason that every organization, company or government eventually fails. Organizations have a natural tendency to grow. Those without someone trimming them back on a regular basis, such as governments, grow until they become a cancer and devour their own subjects.
So one of the first goals of every manager in business should be to constantly be on lookout for signs of unnecessary growth. It happens in every organization and must be chopped at the first opportunity.
The world famous Sunshine mine of the Silver Valley in Idaho didn't collapse 18 months ago due just to a fall in the price of silver. It's clear looking through the accounting numbers that the organization simply grew beyond its financial resources.
So when Ray De Motte and I were having breakfast in Coeur d'Alene a little over a week ago I had two reactions when he asked the waitress how much two eggs with hash brown potatoes and toast cost. My first reaction was to snicker. My second, more reasoned, thought was that he might just be the perfect manager for Sterling Mining with their acquisition of the Sunshine Mine, he throws nickels around like they are manhole covers. Ray is the CEO of Sterling Mining Company which just picked up the Sunshine Mine.
Just for the record, the meal cost $3.75 in what was one of the finest restaurants in Coeur d'Alene and I picked up the tab for both of us. I felt bad for him. Maybe that was the purpose.
I'm going to admit a goof. Along with everyone else in the industry, I got caught out at the airport when Sterling's ship came in.
Sterling is an advertiser and has been for months. They have some nice claims and are progressing in building value for the company. So when the press release came in announcing they had leased the Sunshine Mine, I yawned and posted it. Hardly anyone reads press releases anyway, why should I?
Barb was actually very excited, and I thought it was probably because Ray De Motte is a Brit like her. (He is also a smoker and like all smoking-lepers there is always an immediate triple-bonding). And she did a wonderful banner for them, with Sunshine written in bright yellow, but I just mumbled, and most of the readers mumbled, and the stock just mumbled.
The Sunshine Mine, 360 million ounces of silver production, 120 years of production, the most prolific silver mine in US history, another potential 50 years of silver resources, $200 million dollars worth of plant and equipment, 185 million ounces of resources... Those all sound like pretty good reasons to read the press release. I didn't and no one else paid any attention to it either. So I'm not the only twit in the business.
I went up to Fairbanks Alaska two weeks ago to attend the annual Alaska Pipeline vehicle and equipment auction. I bought a truck for use in Nevada (and as my good luck would have it, it's silver!). While I was in Alaska I drove up to Silverado's Nolan Mine. (Yes Sherrie, they are producing gold) I will be doing a piece on them in a couple of days or so.
I drove down through Dawson in the Klondike and Jasper in BC and into Idaho. I thought it would be a good idea to stop and visit our advertisers in the Silver Valley. Bright idea. Little did I know what was around the corner.
Tom Wobker of Pennaluna wanted to make reservations for me at a fancy place right on the lake. It was magnificent and cost $400 trillion a night. Barbara about had a fit on the phone when Tom told her and promptly advised him that I wouldn't get caught dead in a place like that. As a matter of fact, I have been thrown out on my tail in hotels at half that price. I had just finished driving 4700 miles in 5 days, I had no clean clothes, and I did not need a pillow with a hot and cold running blond on it. I needed a pillow - a $69 a night pillow.
Everyone talking to Ray De Motte told him to not let me see his office. It was supposed to be a dump. He told me about it over our $3.75 breakfast. (plus a nice tip. I ain't cheap.) So I insisted on seeing it. He was right, it was a dump with rock samples and papers all over the place. I loved it. Before you ever invest in any mine, check out the executive offices. If they cost over 4 figures a month, have marble floors and extra-shiny door knobs think about investing elsewhere. Guess who's money is paying for it all?
Ray and John Swallow, a director of the company, took me and Tom Wobker out to the mine. When we arrived, I realized that maybe I should have paid just a little more attention to the figures and facts. For Sterling to purchase a 15 years lease on the Sunshine Mine for $400,000 cash out of pocket is roughly equivalent to the Governor of New York in a drunken stupor selling Manhattan back to the Indians for $24 in glass beads including all the companies, cars and fixtures.
What did Sterling buy? Well, for one, they got a mine with 160 million ounces in silver resources from the most prolific silver mine in US history with production going back to 1884 and another 25 million ounces of silver reserves. And the Sunshine has the highest correlation to silver of any silver company in the world with over 90% of the revenue coming directly from silver with the remainder in antimony, copper and some lead. They had a total cost of production of $4.01 an ounce when they shut down, a permit to mine, virtually no environmental problems as a settlement on past issues was reached by the former Sunshine management team and a major interstate highway a mile from the mine right in the center of an economically-depressed area with thousands of qualified workers just waiting to go back to work.
Basically Ray De Motte decided on the spot to make an offer for the mine, unlike the larger corporate bidders who wanted 6 months to do due diligence. Since a large tax payment was looming, the seller accepted.
The deal is a little confusing but that's meaningless. Sterling has a 15-year lease on the biggest silver mine in US history with an out-of-pocket cost of $400,000. If they did nothing with the mine, it probably would cost them in the neighborhood of $400,000-$500,000 a year. Depending on the price of silver, Sterling can buy the Sunshine Mine for between $3 and $5 million.
Let me try to put that into perspective for you. About 19 months ago I wrote another piece about silver. What I said was interesting. "And the bottom of silver just passed at $4. It might and I repeat, might, go down a tiny bit more. But when you can buy 12 ounces of silver per share of SSRI for $.10 an ounce it's worth doing. That's cheap, do you really think it will go down to $.08 per ounce. Go buy some."
I followed that piece with yet another on Silver Standard, SSRI. I pointed out that Silver Standard was a hell of a deal because they had a great game plan and were buying silver in the ground for $.02 an ounce.
Well, silver cost $4 an ounce then and is $5 an ounce now. Silver Standard did exactly what I believed it would and those wise investors who listened to what I said have watched the stock shoot up from $1.20 to $6.72 as of last Friday. But Silver Standard has no permit and no mill and no mining equipment. They paid $.02 an ounce for silver in the ground. Ray De Motte of Sterling bought the Sunshine Mine for $.002 an ounce, 1/10th of the cost SSRI paid. He got a mining permit and a mill, and it's right in the heart of richest recorded silver district in the world. What's most absurd is that the Sunshine Mine management never attempted real exploration and only 1/4 of a square mile around the property has any drilling done on it. Sterling holds another 10 square miles of claims around the Sunshine mine yet to be drilled.
By now, if you are still reading rather than being on the phone to your broker as you should be, you might be wondering just what Ray has in mind for The Sunshine.
His quote was both memorable and quotable, "I don't have a clue as to what we are going to do with it."
I smiled as he continued, "I told all my guys we are doing nothing but thinking for the first 90 days. I want to leave all our options open." I really liked hearing that. I want to see him keep his options open. At this point, there is no silver bullet, they need to consider all options.
Let me get into the issue of valuation. Before I say anything, I will guarantee the stock is going for a ride this week. It's going to be up and down like a bride's nightie and should you make a decision to invest, understand it's going to be a wild week.
The stock is absurdly undervalued in comparison to any other silver stock, in production or not. Sterling has about 10.5 million shares fully diluted but a couple million shares are tied up as payment to the receiver and basically there are only about 2.1 million shares in the float. The last week or so has seen about 700,000 shares move from weak hands into strong hands. I suspect that once the 2.1 million share float is soaked up, the stock will roar.
What's a stock with 185 million ounces of silver worth? To find the answer, we need to look at similar stocks. When I did my piece on SSRI back 19 months ago, Silver Standard was selling for about $1.20 a share and was backed with 12 ounces of silver in the ground. No mine and no mills or equipment. The price of silver was $4 an ounce. Today silver is $5 an ounce, SSRI is $6.72 and investors value an ounce of silver in the ground at $.76 an ounce.
But Sterling/Sunshine has 18 ounces of silver per share, higher than any other silver company and in my estimation, $100 million dollars worth of plant and equipment and an operating permit which has to be worth something.
Here is what other silver companies sell for based on the silver resources they have.
Western Silver $.305 an ounce
Coeur d'Alene $.46 an ounce
Silver Standard $.77 an ounce
Pan American $.82 an ounce
Apex Silver $1.34 an ounce
If you use the lowest price for silver in the ground from Western Silver which has no mines, equipment or permit, the 10.5 million shares of Sterling should be selling for $5.37 and if you use the highest figure, that of Apex silver which does have mines, mills and permits, Sterling would be valued at $23.75 a share.
As I told Ray De Motte, I am a closet Silver Queen. I don't believe in conspiracies, I don't believe silver is the most critical war material but I do believe in value. Silver is at the lowest cost in 5,000 years so the risk of holding either silver or silver shares isn't very high. Everyone seems to have forgotten how silver can double in 6 weeks time. It will happen again.
And the Sunshine Mine will be back in production. Ray doesn't know exactly how or when and he only has some ideas as to how much it might cost. But he and his team are hiring some of the top minds in the business and they will come up with a plan which works. He has told me that he is copying the concept originally come up with by Rob McEwen of Goldcorp where every employee will be a shareholder. Labor will be his biggest cost and he's spending a lot of time thinking about how he can bring everyone working for the Sunshine Mine onto his team to make it not only the biggest silver mine in the United States but the most profitable as well.
Sounds like a plan to me.
Sterling Mining Company trades in the US on the pink sheets as SRLM. There are about 10.5 million shares fully diluted. As of the close of trade on Friday July 25th, the stock was $1.10 a share.
Sterling Mining Company is a paid advertiser on 321gold. We have not been paid nor will be paid to produce this piece. Our comments are neither an offer to buy nor sell shares of the Sterling Mining Company and any opinion is strictly our opinion. Before making any investment decision, you should consult with your financial advisor. And especially with Sterling being so undervalued in comparison with other silver companies, you should be very careful. It will go up, it will come back down and the swings will be violent. Barb owns shares in the company and we intend to participate in any private placement in the future. We do have a bias and as such, you should be aware we are not strictly neutral. All information presented is to the best of our knowledge, but no guarantee of accuracy is given.
I just love The Sunshine.
Bob Moriarty
Email bob@321gold.com
Jul 29, 2003
Link to:
http://www.sterlingmining.com/
Link to article:
http://www.321gold.com/editorials/moriarty/moriarty072903.html
Hint: I will be in Coeur d'Alene (again), in a little over 2 weeks...THG
The Invisible Recovery
by Gary North
The stock market is rising. Long-term interest rates are rising, indicating a recovery, which the public expects will bring price increases. Mortgage rates are rising, indicating that the housing boom is getting close to the end of its rope. Manufacturing is contracting and has been for four consecutive months. Employment is contracting.
So, is the glass half empty or half full? Are the lagging employment and manufacturing statistics no longer providing an accurate view of the future? Are stocks (up) and bonds (down) giving us a more accurate picture, i.e., economic growth ahead?
Bonds worry me. Why should bonds be falling (interest rates rising) if production is increasing? Won't additional goods put downward pressure on prices? This is the old debate over Keynesianism vs. supply side economics. The supply-siders see additional output as providing downward pressure on prices: dollars chasing more goods. The Keynesians look at consumption-driven increases in production and conclude, "higher prices ahead."
The Austrians look at the money supply and ask: "Why is output rising?" If it is rising because of lots of new money coming into circulation through the central bank, they predict price increases if the economy is coming out of a recession. The boom is artificially induced. The new money will have its effects: driving consumer prices higher. But the increase in production for a time may offset the increased bidding by consumers. Also, businesses may use the new money to pay off old debt, which will tend to lower interest rates. So, it depends on where the economy is in the business cycle, and what business managers' judgment tells them regarding the future. But the long-run move is clear: higher prices in response to additional credit money. This is what government does to our money.
IMPORT GOODS, CUT PRODUCTION
What we are seeing today is an increase in imports: a $500 billion/year payments deficit. This is putting pricing pressure on American manufacturers inside the United States. Of course, some American companies are building plants abroad, hiring cheap foreign laborers. So, we have a rising money supply, a falling dollar, slowly rising prices at home, more layoffs in the manufacturing sector, reduced domestic manufacturing, and rising unemployment.
For as long as foreign investors put their savings in our capital markets, we can continue to import consumer goods. Americans are now selling off ownership of income-producing assets to foreigners. Foreigners are buying up American capital by selling Americans lots of consumer goods. The productivity generated by American workers will more and more make foreign owners wealthy. Foreigners supply more tools for American workers to use. So, foreigners will receive income generated by their American workers.
The Institute of Supply Management (formerly the National Association of Purchasing Managers) releases a monthly report on how well manufacturing is doing. Supposedly, the recession ended in November, 2001. But what has happened to American manufacturing in this recovery? There is no recovery in this sector. According to the July report for June's figures, there is a lot of bad news.
ISM's Backlog of Orders Index indicates that order backlogs were unchanged in June. Manufacturing Employment continued to decline in June as the index remained below the breakeven point (an index of 50 percent) for the 33rd consecutive month. ISM's Prices Index indicates that manufacturers experienced higher prices for the 16th consecutive month. . . .
The PMI [Purchasing Managers Index] indicates that the manufacturing economy declined in June for the fourth consecutive month. The PMI for June registered 49.8 percent, an increase of 0.4 percentage point compared to the May reading of 49.4 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. . . .
ISM's Manufacturing Employment Index remained below 50 percent in June for the 33rd consecutive month. The index registered 46.2 percent in June compared to 43 percent in May, an increase of 3.2 percentage points. . . .
The rate of liquidation of manufacturers' inventories accelerated in June as the Inventories Index registered 41.3 percent. This compares to 46.1 percent reported in May. The Inventories Index has been under 50 percent for 41 consecutive months. An Inventories Index greater than 42.1 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis' (BEA) figures on overall manufacturing inventories (in constant 1987 dollars). The only industries reporting higher Inventories in June are: Textiles and Food. . . .
Yet the report hastens to assure us that in the second half of the year – that ever-disappointing second half of the year – things may pick up. This is the opinion of Mr. Ore, who issued the report.
"The mood of the survey respondents has definitely turned upbeat, and is evidenced by the fact that nine industries reported growth this month. Although the Prices paid indicator is higher, there is a short list of commodities reported up in price. Last month we saw a positive reversal of a number of indexes, and this month we see further strengthening of those indexes. This is certainly encouraging for the second half of the year," said Ore.
THE NEW MERCANTILISM
We have come to expect bad news for American manufacturing. American workers are unable to compete effectively with growing numbers of foreign workers, whose productivity is rising because of capital invested in foreign nations. The ISM issues bad news, month after month, yet this receives very little attention from the financial press. The fact that American workers are not being replaced by Americans is of interest only to Democrat hopefuls for the Presidency – a growth sector of the economy. America has lost over three million jobs since March, 2001.
This recovery is based almost entirely on fiat money. The Federal Reserve System is creating new money at rates sufficient to drive the federal funds rate to 1%. Three years ago, it was 6.5 %.
We have seen this unprecedented decline in short-term rates along with a refusal of business owners to invest in new equipment, which is the only basis for long-term growth of employment and per capita output. As the American savings rate has fallen, foreigners have taken up the slack. If they are correct, then they will reap for more of the benefits than would have been true three years ago. If they are incorrect, they will stop investing here. Demand for the dollar will fall.
What is keeping the dollar high? In part, it is the desire of foreigners to send savings out of their own nations. But governments and their central banks are the primary reason. Basically, the governments are in collusion with exporters – a small minority in any large country's population. (I am not speaking of Hong Kong and Singapore.) The exporters pressure their governments to buy American government debt in order to keep their domestic currencies from rising against the dollar. Their central banks create new money to buy American government debt. This props up the dollar and keeps exports moving to America. It's a bad deal for the vast bulk of the foreign populations, but great for the export sector. The common people are subsidizing the export industries. It is a huge system of wealth redistribution inside foreign nations.
This is a new form of an old error: mercantilism. In old-time mercantilism, government officials sought gold for their national treasuries. Exporting was seen as the way to get gold, except for the Spanish, in which case enslaving South Americans to work in gold mines was the cost-effective strategy, at least until the gold ore ran low. In the new form of mercantilism, governments seek the U.S. Treasury's official promises to pay dollars. This policy will blow up on foreign governments eventually. In fact, the blow-up process has begun. They will be stuck with depreciating assets: dollars. But, for now, foreign nations' mercantilism is great for foreign exporters and American consumers. It's bad for American manufacturers and foreign consumers.
AMERICA'S JOBS OF THE FUTURE
Americans will face the day of reckoning in the next decade. Rising Social Security entitlements by the baby boomers will hit at a time when foreign productivity will be rising and white collar American jobs will be flowing off-shore, in the same way blue-collar jobs are flowing off shore today. English-speaking workers will have computers and cheap phone service. The outsourcing of American white collar jobs has already begun. My children's generation will face competition from low-wage, high-productivity foreign workers. The communications revolution will siphon off jobs in the high-paying white collar service fields. Only suppliers of services that must be delivered and monitored locally will buck this trend.
As the job market is flooded with immigrants from Latin America and the children of these immigrants, wage rates will cease rising. The tax burden – Social Security/Medicare – will keep rising. A few people with unique services to offer will do well, just as professional athletes do well. But the market value of a college education in the liberal arts will continue to fall. In engineering, graduates will be competing with engineers in India, China, and third world countries that have sent their best and brightest to go to graduate school here. Today, almost half of all Ph.D. students in American universities in engineering and science are foreigners. We had better recruit them and keep them here. A recent report provides the figures.
There is some evidence of an increasing flow of foreign science and engineering graduate students to a number of industrialized countries. Enrollments of foreign students at the graduate level at U.K. universities increased from 28.9 percent in 1995 to 31.5 percent in 1999. Foreign student enrollment is at an all-time high in the United States, representing around 40 percent of all graduate students in engineering, math, and computer sciences. . . .
Global diffusion of science and engineering knowledge and expansion of doctoral education abroad imply that a larger share of academic research and development and scientific knowledge will be generated outside the United States. This challenges the United States to devise effective forms of collaboration and information exchange to benefit from, and link with, the other countries' and regions' expanding scientific capabilities.
In American undergraduate education, it's the same story: "Sorry; I no speak mathematics."
American students, meanwhile, seem to be losing interest in technical careers – from 1983 to 1997 enrollment in undergraduate engineering programs decreased by 19 percent. Much of the problem is simply demographic: from 1980 to 2000 the U.S. college-age population dropped by more than 21 percent, from 21.6 million to 17 million. But although that population will increase in the next decade, we must still worry about the shifting focus of students. In 1986 college students earned about 24,000 degrees in electrical engineering and about 5,000 degrees in parks, recreation, leisure, and fitness. In 1996, they earned nearly 14,000 degrees in each of these fields. Only two years later 4,000 more students were earning degrees in parks, recreation, leisure, and fitness than in electrical engineering.
Nobody blames this on the decline of the tax-funded school system, despite the fact that there is no other institution that could conceivably be equally responsible.
Parks, recreation, leisure, and fitness: as Americans age, they will demand more services like these. These are locally administered services. The problem is this: How will older Americans pay for this? I can understand choosing such a career over engineering because parks, recreation, leisure and fitness will not be supplied by Indians – not the Hindu kind, anyway. But how can anyone make a good living by supplying services to people with declining incomes? Who is going to foot the bill for an aging population?
THEN WHY THE STOCK MARKET BOOM?
American investors look one quarter out. They always dream of the recovery in the second half. Today, they are buying shares on the assumption that the second half recovery will continue into next year. They ignore counter-evidence from manufacturing. They ignore evidence that corporate insiders are selling over six shares for every share they buy. The insiders are taking this opportunity to unload shares on the public. If there is a boom coming in the second half, insiders don't see it.
We are seeing a bear market rally fueled by desperate brokers who have fallen in hard times and who cannot believe that the boom of the 1990's is gone in their lifetimes. They are selling stocks to equally desperate baby boomers – anyway, the richest 20% of them – on the idea that there will be someone ready to buy at high prices when they call their brokers and issue "sell" signals in 2011. As to who that well-heeled someone will be, they do not ask. Asians, maybe? It surely will not be their children's generation, who have put everything they own into better housing, probably on an ARM contract.
This is why millions of American students should be taught entrepreneurship. This is where America has a major advantage. It's easier to set up a small business here than anywhere else on earth. But school teachers are not entrepreneurs. They can't teach what they don't understand and rarely appreciate.
CONCLUSION
Bonds have been hit hard, as monetary inflation produces price inflation, and the threat of further price inflation threatens the purchasing power of interest paid in the future.
Stocks are rising, despite any signs of rising profits, rising investment in plant and equipment, and rising expectations by corporate insiders. This rally has the marks of a sucker's play. There are a lot of suckers out there. They will be there until they finally figure out that ever-stiffer foreign competition is the wave of the future. So are bankrupt social insurance programs, a problem that does not threaten Asia.
What do we need to respond? Lower taxes, less regulation of the economy, and more entrepreneurship. These are not high priority items on today's political agendas.
July 28, 2003
http://www.lewrockwell.com/north/north191.html
Just conspiracy theory, right?:
http://www.voxfux.com/features/stranger_than_fiction.htm
Patriot Act faces lawsuits
The ACLU plans to challenge the act in Portland and Detroit, Mich.
Staff, news services
July 30, 2003
DETROIT, Mich. — A coalition of groups led by the American Civil Liberties Union plans to file federal lawsuits today asking judges to declare key sections of the USA Patriot Act unconstitutional.
The ACLU will file lawsuits in Portland and in Detroit.
Passed in the wake of the Sept. 11 attacks, the Patriot Act has been heralded by the U.S. Justice Department as a crucial weapon in the war on terrorism.
Federal authorities claim that the act safeguards against abuses of civil liberties, but critics repeatedly have attacked its law as discriminatory and intrusive.
Last week, the Republican-controlled U.S. House voted to repeal a section of the act over the Justice Department’s objections. To date, 143 communities in 27 states, including seven in Oregon, have passed resolutions opposing the law.
The ACLU’s Detroit office said Tuesday that it would announce Wednesday “the first-ever direct constitutional challenge to the USA Patriot Act,” and said separate lawsuits would be filed in Portland and Michigan.
Six Portland-area residents face terrorism-related charges under the Patriot Act.
The U.S. attorney general’s office in Portland handled a complex, 10-month investigation that eventually cracked what U.S. Attorney General John Ashcroft called a terrorist cell operating in Portland in 2002.
Five people were arrested in October. A sixth person, computer engineer Mike Hawash, was arrested in the spring. The seventh person charged, Jordanian national Habis al Saoub, remains at large.
The case is expected to serve as a test of the FBI’s new domestic spying powers under the USA Patriot Act, the sweeping expansion of law enforcement powers after the Sept. 11 attacks which Ashcroft supported. It is farthest along of any that challenge secret search warrants.
The lawsuit, to be filed in Detroit by the ACLU, the Council on Arab-Islamic Relations, the American-Arab Anti-Discrimination Committee and several other groups, seeks to overturn provisions that allow the government wide latitude to seize records, books and papers in investigations of international terrorism, said Mo Abdrabboh, a Dearborn, Mich., lawyer who is on the ACLU’s at-large board.
The area’s large Arab-American community is a major reason for filing the lawsuit in Detroit, he said.
“People are worried about their privacy, and when they check out books they want to feel safe,” said Haaris Ahmad, who heads Michigan’s branch of the Council on Arab-Islamic Relations. “In a free society, people have freedom of thought.”
Said Abdrabboh: “The Constitution is being attacked. This is a position of principle. We hope this is going to be precedent-setting and work to slow the momentum of the government running rampant.”
Abdrabboh pointed to a provision of the law that makes it illegal for a person to disclose that he or she received an order for personal information from federal investigators. Librarians, for example, may be required to disclose to the FBI a list of books a person checked out. And they couldn’t tell the patron that the library had turned over the records to the federal agency.
“Anyone who would come forward could be charged with a felony,” Abdrabboh said.
He said groups that could be subject to future search warrants, like the Arab Community Center for Economic and Social Services, are part of the lawsuit.
Today’s announcement of the lawsuits in Portland and Detroit comes on the same day that U.S. Attorney Jeffrey Collins plans to hold a forum at Wayne State University defending the Patriot Act. Collins didn’t return telephone calls seeking comment on the planned lawsuits.
Michigan has been a key battleground in the government’s war on terrorism. More than 50 FBI agents are assigned to anti-terrorism efforts working with two dozen federal, state and local task force agents.
Collins has called counter-terrorism “our top priority.” Six assistant U.S. attorneys are assigned to the Anti-Terrorism Task Force here.
In July, two men in metropolitan Detroit were convicted of conspiracy to provide material support to terrorists in the country’s first criminal case to go to trial stemming from the Sept. 11 investigation. They were found with the documents that allegedly plotted attacks against the U.S. air base and a hospital in Jordan. Another man was cleared of all charges and a fourth convicted of a lesser charge.
Critics of the war on terror said they hoped the ACLU lawsuit would point the spotlight on the Patriot Act. The act toughened federal surveillance and law enforcement powers, added new rules to prevent terrorism funding and removed barriers to the Central Intelligence Agency and other agencies from sharing information with federal law enforcement.
“I want to see awareness out of this,” said Abed Ayoub, president of the Detroit chapter of the American-Arab Anti-Discrimination Committee, one of several civil rights groups partnering in the legal challenge.
Ayoub said he hopes the lawsuits would result in “a sense of relief (in the Arab-American community), a sense that somebody is standing up for our rights.”
Late Tuesday, drafts of the lawsuit still were being circulated between lawyers for the various civil rights groups. The lawsuit will seek to overturn Section 215, which allows the FBI broader access to personal records under the Foreign Intelligence Surveillance Act.
The ACLU’s Abdrabboh said the groups are prepared to fight it out in court.
“All the groups are prepared to take this issue all the way to the top.”
http://news.statesmanjournal.com/article.cfm?i=65449
Americans: Free Yourselves from the Two Party Death Grip
By Chuck Baldwin
July 29, 2003
It's time to say it: the two major parties hold a death grip on the American people! Instead of representing the people, both parties are bought and paid for by special interest groups. Neither party pays any attention to the U.S. Constitution but are largely marching in lock-step toward bigger and bigger government. Both Republicans and Democrats eagerly sacrifice what's good for the country with what's good for the party. As they now exist, neither major party deserves the support of patriotic Americans.
Furthermore, blind allegiance to the two major parties has created a "lesser of two evils" mindset that has warped the thinking and perverted the values of otherwise good people. What people would never accept in any other venue of society, they gladly and willingly accept from their chosen party's candidates.
People expect honesty and integrity from clergymen, bankers, doctors, businessmen, realtors, even journalists and used car salesmen. Those same people, however, quickly tolerate and even excuse dishonesty and chicanery from their chosen political party.
Consider the excuse conservatives give for President Bush's recent announcement that he supports the Clinton gun ban. Rather than holding Bush accountable for his inexcusable statement, they rush to his defense by saying, "Bush is just saying this to placate moderates. He doesn't really mean it." What they don't stop to consider is that if they are correct, G.W. Bush is a liar!...
It is clear, therefore, that conservatives are more than willing to support and defend someone they believe to be deliberately lying. In other words, it doesn't matter to them whether Bush tells the truth or not. He has an "R" behind his name and, therefore, they will support him.
However, the same people who will justify dishonesty in the lives of their favored party's politicians would never accept such conduct from anyone else. Furthermore, many of these conservatives actually call themselves Christians; many are preachers. They preach and teach the virtues of honesty and integrity. What is even more amazing is that they find no inconsistency with what they are doing.
In his Farewell Address, our first and greatest President, George Washington, loquaciously lobbied the American people to guard against over-infatuation with political parties. Anyone reading his warnings today will be impressed with his insight and sagacity. Virtually everything he predicted has come to pass. Blind loyalty to political parties has corrupted our public institutions, blinded the hearts and minds of the American people, and opened wide the door to undue foreign influence.
If everyone who believes and teaches honesty and accountability would put it into practice when they walk into the voting booth, we could put a stop to this pathetic practice of electing dishonest and despicable people to high public office. Instead of hiding their own character and integrity under the bushel basket of party partisanship, voters could be proud of the fact that are actually helping to set the ship of state aright by helping to elect men and women of honesty and character.
Though I do not share this opinion, many people believe Abraham Lincoln to be one of America's greatest presidents. Personal opinion aside, it is a fact that Lincoln's election and subsequent influence upon this country was huge. Therefore, it is more than significant to realize that Lincoln was first elected from a four- person ticket with less than 40% of the vote! So much for the importance of receiving a majority vote.
In practically every presidential election, there are candidates from a variety of independent or "third" parties on the ballot. To ignore them merely because they are not Republicans or Democrats is absurd! If a worthy candidate cannot be found within the two major parties (and they are becoming increasingly harder to find), voters should look to alternative parties.
Remember, the object is to elect honest and honorable leaders for our country, not to promote and protect the private agendas of the fat cats who control the two major parties!
***
[If you found this article of interest, please consider perusing the FriendsOfLiberty/SiaNews archives
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http://www.sianews.com/modules.php?name=News&file=article&sid=1151
Gold mines?
You there's gold mines in Fiji don't you?
http://www.wnaustralia.com/s/solomon/
...21 former prisoners of war, 17, who had been tortured by their Iraqi captors, would like something more tangible. This month they won a court award of almost $1 billion against Iraq, and a federal law says they may be paid from frozen Iraqi funds.
The Bush administration has expressed sympathy for the plaintiffs over what they endured but is fighting them about the money...
http://www.nytimes.com/2003/07/29/politics/29POW.html?ex=1060476657&ei=1&en=e988d2c5930e13c2
Heads up for GOLD in August:
http://www.321gold.com/editorials/mcclellan/mcclellan072803.html
Consumer Confidence Suffers Surprise Fall
Tuesday July 29, 2:22 pm ET
By Wayne Cole
NEW YORK (Reuters) - U.S. consumer confidence took a surprise spill in July as worries over rising unemployment took a heavy toll, the Conference Board reported on Tuesday.
The result provided a muted counterpoint to cheerleading from government officials. Treasury Secretary John Snow on Tuesday took time off from a bus tour of the Midwest to tell television network CNBC the economy was "spring-loaded to go."
Not all Americans, it seems, are convinced. The private research group's monthly consumer confidence index slid to 76.6 in July from 83.5 in June.
That was the lowest reading since March, when the invasion of Iraq was in full swing, and completely confounded analysts, who had looked for an improvement to 85.0.
"It's a bit of a disappointment, like two steps forward and one step back," said Jim O'Sullivan, an economist at UBS. "People are obviously concerned about jobs."
The index that measures jobs hard-to-get rose to 33.1 percent from 31.9 percent in June, its highest level since 1994. That mirrored a jump in the national unemployment rate to 6.4 percent in June, also a nine-year peak.
Job figures for July are due on Friday, and this poor survey could dent hopes that payrolls will show the first rise in five months. The labor market has stayed stubbornly depressed, even though other recent indicators have shown some signs of life are stirring in the economy.
"It doesn't change the overall impression that the economy's getting better. Rather, it's a reminder that people shouldn't get too carried away with expectations for the scale of the recovery," added O'Sullivan.
The stock market put a brave face on the figures and recovered from an early slide to be about flat on the day.
[Go PPT! It's your birthday, go greenie, go PPT...!]
Meanwhile, Treasury investors proved just as fickle as consumers, first bidding bonds higher on the data only to sell off en masse as the day progressed. Yields have surged in recent weeks as optimism grew for a robust economic recovery.
LABOR LAST
The survey also suggested people were more worried about the future than the present. The Conference Board's expectations index slumped to 86.4 from 96.4, while the present situation index fell only modestly to 61.9 from 64.2.
"That's a big shift and doesn't sit well with expectations of a strong second half recovery," noted John Caldwell, chief investment strategist at McDonald Financial Group.
"But it looks like a reaction to the headlines on unemployment and it's worth remembering that labor is the last thing that companies spend money on," he added. "Capital spending comes first and signs are that's improving."
McDonald Financial, based in Cleveland, compiles its own survey of affluent Americans and the latest report, released just Monday, found 55 percent now looked for better growth this quarter up from 45 percent three months ago.
Earlier this month the University of Michigan's survey of consumers found a slight improvement in July, with its sentiment index rising to 90.3 from 89.7 in June.
But a weekly survey by ABC News/Money Magazine showed scant sign of a lightening in consumers' gloomy mood.
Analysts noted that in recent years, there has been little correlation between what consumers tell surveys and what they actually do with their money. Even the gloomiest responses have not stopped people buying cars and homes at a record pace.
Two reports on U.S. chain store sales, released earlier on Tuesday, showed some slackening in demand last week. But spending was still at its best pace since the Easter-assisted strength of April.
http://biz.yahoo.com/rb/030729/economy_consumers_4.html
And on the vote fraud note:
http://www.gulufuture.com/diebold_scoop.htm
Spread the word...
US media eventually won't be able to ignore as we speak spin doctors are trying to figure out how to break this...--THG
THE REAL SCOOP
ON DIEBOLD
25th July, 2003 by Fintan Dunne,
Editor http://www.GuluFuture.com
On 24th July, 2003 an important story broke. Johns Hopkins University researchers found that electronic voting machines are full of security flaws which can allow fraudulent election results. A scandal indeed.
But like many reported 'scandals' this is a pseudo-investigation. In truth, the news was two weeks old. Alternative media site Scoop.co.nz first broke the unabridged full story, by Bev Harris --back in early July, 2003.
The Johns Hopkins team only decided to commence their investigation precisely when the Scoop story hit the Internet. Now, in double-quick time they are in print in the New York Times (followed by Yahoo News and MSNBC) with what the NYT called "the first review of the software by recognized computer security experts." Author of the Scoop articles, Bev Harris, although a world leader in this field, is sadly unrecognized --by the NYT at least. So the NYT coyly ignores the explosive content of her prior Scoop story.
Why? Note this remark by Aviel Rubin, of Johns Hopkins University, who led the team which examined Diebold software used in voting machines across the USA. When asked to comment on allegations by Bev Harris that the Diebold software may have been designed to facilitate fraud, Rubin described the claim as "ludicrous."
Rubin could dismiss the allegation of deliberately fraudulent design in Diebold software, because his team never examined the Diebold software in question. They only looked at security flaws in the touchscreen terminals and smart cards used by voters. It's true, these are deeply flawed, but not criminally flawed.
The jaw-dropping revelations in the Scoop story did not relate to the touchscreens, but the Diebold software running on the servers which collate the results from many individual touchscreens. It is here that the smoking gun was found.
Incredibly, this software keeps not one, but two Microsoft Access data tables of voting results. It's like a business keeping two sets of account books. The two tables are notionally identical copies of the votes collated from all polling stations. The software uses the first table for on-demand reports which might uncover alteration of the data --such as spot checks of results from individual polling stations.
And here's where it got scary. The second of the two tables is the one used to determine the election result. But the second table can be hacked and altered to produce fake election totals without affecting spot check reports derived from the first table. These will still check out.
The election officials using menu-driven Diebold software are never aware there are two underlying data tables.
Finally, alterations to the second table can be accomplished by dialing into the Diebold server across the Internet through a maintenance port. Whew!
Is this software designed with criminal intent? Consider this: If the IRS called to a business and found two sets of books -one used for IRS spot checks and a second, alterable set used to make IRS returns, do you think they might be a little bit annoyed?
Yet even though the Johns Hopkins team sourced their data from Scoop and surely knew of the full implications of Bev Harris's discoveries, by only looking at touchscreen stations in their investigation, they can with straight faces dismiss the deliberate intent allegations as "ludicrous."
The real Diebold story may have been so hot, that some in US media and academia have co-opted the controversy and have masked it's full scope. It's not the first time this tactic has been used. For the straight dope on Diebold, go to the people who got the scoop!
GuluFuture.com Homepage
PAGE URL http://www.GuluFuture.com/diebold_scoop.htm
The Techno-Voting Nightmare; Digital Vote Corruption-- First California-- then the 2004 Elections.
by Rob Kall, OpEdNews.COM
Comments from readers follow the article
Imagine that a rogue programmer gets access to a few networks of computers in the California special gubernatorial election. The programmer manipulates the software to count wrong, making sure that Darrell Issa or whoever is running on the Republican ticket gets 10% more votes than the voters really gave him. This software "fix" will do it's work then delete itself. The program can be made to randomize the bogus numbers so they are a little different percentage at each voting location.
Now imagine that this is not some independently acting rogue programmer. What if he works for the company and the company is currying favor for or selling power to the candidate or even to unidentified backers-- like some of the wealthy oil people who have funded attack ads for George Bush in the past. This is no far-fetched scenario. There are a lot of us who believe it has already happened.
As a businessman with experience with software design, creation and support, I know how easy it is to change the numbers a program supplies-- the results-- by manipulating underlying aspects of the software. It's easy to do it so no end user would realize it. It's easy to do it so the evidence of manipulations, like the old Mission Impossible tape recorder, destroy themselves and disappear.
Of course there are other ways to fix elections, Jeb Bush and Katherine Harris showed us that in Florida, with Greg Palast's and Michael Moore's books spelling out the details of their vote corruption. So we need to be careful about a plethora of means the far right can and probably will use to corrupt future elections.
The first place we need to fear it is in California. There is every reason to believe that the forces there will use every cheating means possible to take over the number one electoral votes state. With Tom DeLay running the Republican dirty tricks operations, it is highly likely that if there is a way to use computerized voting systems to corrupt the vote, it will happen. It is less likely that pruging of voter lists will occur, since the Dems are in power there. But this is also something for which vigilance is required. Once a republican puppet is digitally elected, DeLay will take his Texas Gerrymandering approach to California. Before we know it, California could become another take-over victim of corrupt computerized voting and Republican far-right extremism.
This is why it is essential that at a state level, at least, Computerized voting laws must be enacted. Congressman Rush Holt of NJ has introduced the Voter Confidence and Increased Accessibility Act of 2003. If it, or something like it is not enacted, then there is not doubt in my mind that there is zero chance of George Bush being defeated in 2004, zero chance of the Democrats holding onto the CA governorship, and zero chance of unseating the Republican majority in the House and Senate.
Already, some state laws have been corrupted by the special interests, making it impossible to go after computerized voting companies. Wherever possible this should be reversed or laws should be passed which require full cooperation by these companies.
Ideally, any federal computerized voting bill should retroactively require all elections, or at least those affecting federal issues, like senate and congressional elections, to be reviewed. In the past, privately held computerized voting companies have refused to cooperate. This amounts to refusing to allow vote recounts. This is a horrible, almost criminal situation. Any company that is less than fully compliant and cooperative should be banned from providing service for any public election. The vote is too important, too sacrosanct an element of American Democracy.
Republicans, particularly far right extremists, who are often very well funded, do not hesitate to play nasty hardball, using the courts, law enforcement agencies, the Homeland Defense act, the Patriot act.... to further their political aims or just out of meanness. Without being mean, but with tough resolution, progressives, democrats, liberals should be using the same legal resources to go after right wingers, after corporations that do not cooperate in vote recounting, after state officials like Katherine Harris o Florida.
The left needs a counterpart to the far right's legal attack dog, Judicial Watch. That org was behind the incessant hectoring of the Clinton White House and most recently has revived harassment against Hillary Clinton. With the help of mail Order Maven Richard Viguerie, Judicial Watch has an annual budget of over $25 million a year. It's a part of the right wing "think tank" war machine. You might want to compare, on the left, the ACLU, but they're not the same. Judicial watch is used as a partisan political attack tool. It was amazingly effective in keeping Bill Clinton distracted with dozens of lawsuits. The left needs to build one of these. Yes it's nasty. Yes they play dirty-- using the legal system for inappropriate reasons. Yes, those on the far right are just as vulnerable, perhaps more so, as their hubris blooms, to similar strategies of engagement, distraction and harassment if the left were to employ them .
When I was a kid, I was taught not to get into fight, to do what I could to avoid them. But my father also taught me that if I found myself in a fight, that I should protect myself. Don't punch the other guy in the arm when he's trying to bloody your nose. Punch in the face. And that's what we need to do-- get right into the far right's faces and let them know we don't like to fight, but since they've started it, we're not going to hold back. We're going to protect ourselves and teach them that they run the risk of being bloodied themselves.
A lot of us think, or are sure that besides the stolen Presidential election, there have been a number of other crooked elections. We need to go after the people involved in them. We need to include in the election laws extremely severe punishments for tampering with elections. But more important, we need to build laws that prevent or massively reduce the risk of them being tampered with in the first place. The laws as they exist now are irresponsible, dangerous slaps in the face of democracy.
An essential resource for issues relating to computerized voting is: http://www.blackboxvoting.org/
Rob Kall rob@opednews.com is the editor/publisher of OpEdNews.com, a progessive news and opinion website, and organizer of cutting edge meetings that bring together world leaders, such as the Winter Brain Meeting and the StoryCon Summit Meeting on the Art, Science and Application of Story. This article is copyright by Rob Kall, but permission is granted for reprint in print, email, blog, or web media so long as this credit is attached. If your publication pays for op-eds, the standard payment is acceptable.
I agree, but we need a solution.
My suggestion: Make vote manipulation an ACT OF TREASON punishable by mandatory life imprisonment. I think the seed idea should be put onto the internet now to grow with each voting abuse which comes to light.
Arthur M. Howard 12233026
Vet WW2,USAAF 13AF 1944-47
http://www.opednews.com/Kall_computervoting2.htm
Citigroup, JP Morgan Settle Enron Charges
Monday July 28, 7:48 pm ET
By Chris Sanders and Paul Thomasch
NEW YORK (Reuters) - Citigroup Inc. and J.P. Morgan Chase & Co. on Monday paid more than $300 million to settle charges that they helped Enron Corp. cheat investors out of billions of dollars.
[Not a bad ROI, huh...?]
The settlement with the U.S. Securities and Exchange Commission (News - Websites) and Manhattan District Attorney Robert Morgenthau ends an 18-month investigation and lets the two largest U.S. banks avoid criminal prosecution for securities fraud.
The probe found that Citigroup and J.P. Morgan Chase structured complex deals that allowed energy trader Enron to hide debt and inflate its cash flow before it filed for bankruptcy protection in late 2001.
"No more phony baloney," Morgenthau said in announcing the settlement, while warning that companies and banks must make complicated deals more transparent or risk raising "a red flag" for authorities.
Enron's collapse was the first in a flood of high-profile corporate meltdowns that shook the public's faith in financial markets, drove lawmakers to clamp down on big business and sparked countless investor lawsuits.
Now, Citigroup and J.P. Morgan Chase are among Enron's creditors in bankruptcy court and their role in arranging the complex loans may cost them some of the money they had hoped to recover.
In a bankruptcy report issued shortly after the settlement was announced, a court appointed examiner cited the role of J.P. Morgan, Citigroup and four other investment banks in helping Enron defraud investors. The report recommends the banks lose their place at the top of the line of Enron's creditors, putting at risk $5 billion they stand to recover.
Both J.P. Morgan and Citigroup said they would change their business practices, but the banks neither admitted nor denied wrongdoing in the settlement.
"These two cases serve as yet another reminder that you can't turn a blind eye to the consequences of your actions," Stephen Cutler, the SEC's enforcement director, said at a news conference in New York.
Under the agreement, J.P. Morgan paid regulators $135 million to close out the SEC's investigation. Citigroup said it paid $120 million, which also included about $19 million to settle charges it manipulated Dynegy Inc.'s financial statements. The payments will go to a victims fund.
In addition to the SEC payments, the banks will each pay another $25 million to be split between New York State and New York City and pay investigation costs.
DAMAGING E-MAILS
The SEC has announced four previous settlements relating to Enron investigations, including an $80 million payout from Merrill Lynch & Co. in March, and said the Enron investigation remains very active,
Cutler declined to name any other potential targets. But three large international banks -- Barclays Plc, CIBC and Deutsche Bank -- were all involved in similarly complex loans to Enron. The report from Enron's bankruptcy examiner charged that the banks knew of "wrongful conduct" relating to the transactions.
Perhaps the most damaging evidence in the investigations into the loans came from internal e-mails -- as was the case during the probe of biased stock research on Wall Street. To settle that case, Citigroup and J.P. Morgan agreed earlier this year to pay $400 million and $80 million, respectively.
This time investigators turned up e-mails that indicated the banks issued loans that made it appear Enron had more cash coming in from its day-to-day business than was really the case.
In one such e-mail, a senior executive at J.P. Morgan Chase wrote to a co-worker: "We are making disguised loans, usually buried in commodities or equities derivatives ... With a few exceptions, they are understood to be disguised loans and approved as such."
Both Citigroup and J.P. Morgan have established reserves to cover legal costs, including those potentially arising from Enron matters. J.P. Morgan said earlier this month it increased its reserve by $100 million in anticipation of a settlement in the Enron case.
Shares of Citigroup rose 7 cents to $45.80, while J.P. Morgan's stock added 2 cents to close at $35.49 on the New York Stock Exchange (News - Websites) on Monday. (Additional reporting by Kevin Drawbaugh in Washington)
http://biz.yahoo.com/rb/030728/financial_sec_settlement_8.html
US buying bubble could burst the world economy
Larry Elliot: COMMENT / London
25 July 2003 13:11
Every year, policymakers say the good times are coming back, and every year so far, they have been wrong. (Photograph: AP).
Everything’s going to be all right. No, not Bob Marley, but every policymaker from Alan Greenspan to Wim Duisenberg. The A side of 2003 was a bit grim, but turn the record over and the second half will be better. The controls are set to go, the policy framework is solid, better times are ahead.
Sound familiar? It should do. This has been what policymakers and their bullish camp followers in the markets and the media have been arguing in each of the past three years. Every year, they say the good times are coming back, and every year so far, they have been wrong.
This time, they say, it’s different. Stock markets have rallied since the end of the war in Iraq, oil prices are lower and the United States’s economy is showing signs of revving up. Once the US juggernaut has really started to roll, so the conventional wisdom goes, the global economy will be dragged along behind.
But what if the conventional wisdom is wrong, not just about the imminence of recovery but about the underlying health of the global economy altogether? As one correspondent put it, is there a chance that we could be heading for the “big one”, an economic crisis the likes of which has not been seen since the 1930s?
It’s certainly worth considering, and the place to start looking is the US trade deficit, at present running at more than $50-million an hour. Far too little attention has been paid to the giant tab the US has been running with the rest of the world in order to satisfy demand for goods and services that cannot be provided domestically, with economic logic turned on its head to argue that the spendthrift habits of the world’s biggest economy are actually a good thing.
The difficulty, however, is that there is no mechanism for bringing the US current account back into balance, and it has been the absence of such a mechanism since the break up of the Bretton Woods fixed-exchange-rate system that has contributed to the growing problem.
In essence, the Bretton Woods system was an updated form of the gold standard; both ensured there was a self-stabilisation mechanism whereby countries running either surpluses or deficits were forced to take remedial action.
In the case of the gold standard, a country’s money supply was linked directly to its stock of gold. Nations that ran trade surpluses would accumulate more gold, which allowed them to expand the money supply by creating more credit. Easier money fuelled booms, which in turn fuelled inflation. Higher prices relative to other countries made exports dearer, thereby reducing the trade surplus.
The system worked in the opposite way, of course, for countries with trade deficits. The gold standard was suspended during World War I, revived in the 1920s and collapsed in the 1930s. Bretton Woods was seen as a substitute for the gold standard, and pegged the dollar to gold at $35 an ounce, with every other currency linked to the dollar at fixed rates.
Bretton Woods was more flexible than the gold standard but the premise was the same: trade imbalances led to flows across national borders of gold, or more usually dollars, and this forced domestic adjustment.
The breakdown of Bretton Woods, following Richard Nixon’s decision to suspend convertibility of dollars into gold, means there is no longer an adjustment mechanism. The US has permitted itself to run bigger and bigger trade deficits, a cumulative $3-billion since the early 1970s, financing them by printing more dollars.
The fact that the dollar has traditionally been the world’s reserve currency of choice has helped, because central banks in other countries have seen little point in sticking their stash of US currency in a bank vault but instead have sought to get a return on them by investing in US assets.
As Richard Duncan points out in his book, The Dollar Crisis (Wiley), the result of this has been to create a reservoir of global liquidity, growing bigger and bigger all the time. The extra liquidity sloshing around in the global financial system lay behind the explosion of credit, not only in those countries running trade surpluses but in the US as well, because that was where the creditor countries reinvested their dollars. This is obviously a far cry from the gold standard-Bretton Woods mechanisms.
“The current international monetary system has three inherent flaws that will eventually cause it to collapse in crisis,” Duncan says. “First, it allows certain countries to sustain large current account or capital and financial account surpluses over long periods, but it causes those countries to experience extraordinary economic boom and bust cycles that wreck their banks and undermine the fiscal health of their governments.’’ Here he means countries like Japan in the 1980s and Thailand in the 1990s.
“Its second flaw is that this system has made the well-being of the global economy dependent on a steady acceleration in the indebtedness of the US.’’ At some point this will have to stop.
“The third flaw is that it generates deflation.’’ Why? Because the credit bubble has encouraged overinvestment in just about every global industry, which has created an imbalance of supply over demand, bearing down on prices. The upshot was the dotcom bubble and its collapse. The remedy of global authorities has to be to pump in more liquidity, thereby inflating new bubbles in the US in house prices, mortgage refinancing and bonds. One way of looking at this is that Greenspan has learned from the 1930s and is determined that easy money is a vaccination for depressions. The other is that pumping up liquidity is like handing an alcoholic a bottle of whisky.
The American analyst Kurt Richebacher says the authorities are looking in the wrong place for the cause of the problem. “For the first time ever in the post-war period, many countries around the world, not only in the US, are experiencing a prolonged economic downturn in the absence of any monetary tightening. In essence, there must be causes other than the credit crunch. Nobody questions the need for action. But it should be clear that easy money can only be the cure for tight money, not for any other causes depressing the economy. For us, the real and disturbing story about the US economy is that with all its imbalances it has reached the stage where it requires permanent, massive monetary and fiscal stimulus to garner just a tepid economic response — and to prevent the bubbles from deflating.’’
This is certainly true. The interesting thing about the easing of policy in the past three years is how ineffectual it has been. Between 2000 and 2002, the federal budget moved from a surplus of $295-billion into a deficit of $257-billion, and is heading towards a $500-billion shortfall in 2003. During the same two years, credit expanded by $4,4-trillion. “And what was the effect of this credit and debt deluge on the economy?’’ he asks. “Gross domestic product grew in real terms by $248-billion and in nominal terms by $621-billion. To us, this is an outright policy disaster.’’
The dangers should be obvious. The dollar might act as a gradual adjustment mechanism but is more likely to come down with a crash. US consumers could decide to tighten their belts rather than face savage retrenchment if they continue on their rake’s progress. But the chances are they will not, and that a plunging dollar will spread the US’s recession to the rest of the world. There is no global financial system worthy of the name, merely a Potemkin village. Could this be the big one? You bet. — © Guardian Newspapers 2003
http://www.mg.co.za/Content/l3.asp?ao=17782
I.R.S. SCARES TAX PROFESSIONALS..
Crack down on tax shelters has tax advisors worried:
http://www.tax-news.com/asp/story/story.asp?storyname=12691
New US tax laws make tax filing even more complex, difficult:
http://www.tax-news.com/asp/story/story.asp?storyname=12683
Already posted but there it is again:
IRS makes cozy deal with H&R Block; taxpayer privacy shredded:
http://www.insightmag.com/news/447808.html
Atheists, Activist Courts And Constitutional Ignorance
By
Lee R. Shelton IV
Toogood Reports [Thursday, July 24, 2003; 12:01 a.m. EST]
URL: http://ToogoodReports.com/
Thanks to activist courts and an ignorant citizenry, atheists tend to dictate public policy when it comes to the separation of church and state. Not surprisingly, a recent incident in New Jersey has ruffled the feathers of some atheists who have absolutely no understanding of the U.S. Constitution.
Members of the Board of Freeholder in Warren County voted unanimously to hang posters with the words "In God We Trust" in all county-owned buildings. The decision was met with resistance from the New Jersey-based American Atheists.
One member of this Godless organization, Frank Zindler, was quoted in the New Jersey Star-Ledger as saying, "The major intent behind this is to make this a Christian nation. This, of course, is forbidden by the First Amendment."
As with most atheists who take offense at public statements of faith, Zindler's concern is misplaced. While Christian principles certainly had a strong influence in the founding of the United States of America, this country has never been a "Christian nation," and to equate the posting of our national motto with bringing citizens under the heavy yoke of a theocracy is ludicrous.
Since the drafting of our Constitution, atheists have enjoyed every immunity and privilege guaranteed to those of religious faith. No matter how offended they may feel, atheists cannot claim persecuted status. From politics to education, from business to charity, they have been actively involved in virtually every aspect of American life.
If anything, religious citizens are the ones who have been reviled. Prayer has been purged from our schools. The Ten Commandments have been taken down from courthouse walls. It is now unconstitutional for Scripture verses to be displayed in national parks. Freedoms once taken for granted have been stripped away in the name of tolerance—and this has been done without a single law being passed.
Like it or not, we are at the mercy of a judicial oligarchy. Over the years judges have reinterpreted the Constitution, effectively gutting our republican form of government. Every action taken by a public official—even at the state and local levels—must meet with the approval of these black-robed zealots.
This has been especially true in cases relating to the First Amendment. Courts have consistently ruled that allowing anything religious to be displayed or promoted on public property is unconstitutional. The reasoning is that government approval of religion is tantamount to government establishment of religion. Yes, it's ridiculous, but you can be sure that the Warren County freeholders will be sued over their totalitarian decision to post "In God We Trust" in public buildings.
There is another issue here that needs to be addressed: the Constitution in no way applies to what goes on in Warren County, N.J. What was meant to restrict Congress does not restrict what goes on at the state, county or local levels of government.
This notion may seem a bit unorthodox, but the Bill of Rights was never intended to be binding upon the various states. If you take the time to read the text of the First Amendment, you will find that it specifically refers to the federal government. ("Congress shall make no law…")
That the Bill of Rights applied only to the federal government is reiterated in the Ninth and Tenth Amendments. It was understood that matters regarding issues affecting freedom of speech and religion were to be dealt with on the state level. James Madison made this rather clear in Federalist No. 45:
The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.
For an atheist or anyone else to say that posting the words "In God We Trust" on county property is unconstitutional shows a blatant disregard for the founding principles of this nation. "Separation of church and state"—a phrase appearing nowhere in the Constitution or in the writings of its framers—has become synonymous with eliminating all religious references from the realm of public discourse. This was never the intent of the founders.
http://toogoodreports.com/column/general/shelton/20030724.htm
Flag Etiquette
STANDARDS of RESPECT
The Flag Code, which formalizes and unifies the traditional ways in which we give respect to the flag, also contains specific instructions on how the flag is not to be used. They are:
The flag should never be dipped to any person or thing. It is flown upside down only as a distress signal.
The flag should not be used as a drapery, or for covering a speakers desk, draping a platform, or for any decoration in general. Bunting of blue, white and red stripes is available for these purposes. The blue stripe of the bunting should be on the top.
The flag should never be used for any advertising purpose. It should not be embroidered, printed or otherwise impressed on such articles as cushions, handkerchiefs, napkins, boxes, or anything intended to be discarded after temporary use. Advertising signs should not be attached to the staff or halyard
The flag should not be used as part of a costume or athletic uniform, except that a flag patch may be used on the uniform of military personnel, fireman, policeman and members of patriotic organizations.
The flag should never have placed on it, or attached to it, any mark, insignia, letter, word, number, figure, or drawing of any kind.
The flag should never be used as a receptacle for receiving, holding, carrying, or delivering anything.
When the flag is lowered, no part of it should touch the ground or any other object; it should be received by waiting hands and arms. To store the flag it should be folded neatly and ceremoniously.
The flag should be cleaned and mended when necessary.
When a flag is so worn it is no longer fit to serve as a symbol of our country, it should be destroyed by burning in a dignified manner.
Note: Most American Legion Posts regularly conduct a dignified flag burning ceremony, often on Flag Day, June 14th. Contact your local American Legion Hall and inquire about the availability of this service.
Displaying the Flag Outdoors
When the flag is displayed from a staff projecting from a window, balcony, or a building, the union should be at the peak of the staff unless the flag is at half staff.
When it is displayed from the same flagpole with another flag - of a state, community, society or Scout unit - the flag of the United States must always be at the top except that the church pennant may be flown above the flag during church services for Navy personnel when conducted by a Naval chaplain on a ship at sea.
When the flag is displayed over a street, it should be hung vertically, with the union to the north or east. If the flag is suspended over a sidewalk, the flag's union should be farthest from the building.
When flown with flags of states, communities, or societies on separate flag poles which are of the same height and in a straight line, the flag of the United States is always placed in the position of honor - to its own right.
..The other flags may be smaller but none may be larger.
..No other flag ever should be placed above it.
..The flag of the United States is always the first flag raised and the last to be lowered.
When flown with the national banner of other countries, each flag must be displayed from a separate pole of the same height. Each flag should be the same size. They should be raised and lowered simultaneously. The flag of one nation may not be displayed above that of another nation.
Raising and Lowering the Flag
The flag should be raised briskly and lowered slowly and ceremoniously. Ordinarily it should be displayed only between sunrise and sunset. It should be illuminated if displayed at night.
The flag of the United States of America is saluted as it is hoisted and lowered. The salute is held until the flag is unsnapped from the halyard or through the last note of music, whichever is the longest.
Displaying the Flag Indoors
When on display, the flag is accorded the place of honor, always positioned to its own right. Place it to the right of the speaker or staging area or sanctuary. Other flags should be to the left.
The flag of the United States of America should be at the center and at the highest point of the group when a number of flags of states, localities, or societies are grouped for display.
When one flag is used with the flag of the United States of America and the staffs are crossed, the flag of the United States is placed on its own right with its staff in front of the other flag.
When displaying the flag against a wall, vertically or horizontally, the flag's union (stars) should be at the top, to the flag's own right, and to the observer's left.
Parading and Saluting the Flag
When carried in a procession, the flag should be to the right of the marchers. When other flags are carried, the flag of the United States may be centered in front of the others or carried to their right. When the flag passes in a procession, or when it is hoisted or lowered, all should face the flag and salute.
The Salute
To salute, all persons come to attention. Those in uniform give the appropriate formal salute. Citizens not in uniform salute by placing their right hand over the heart and men with head cover should remove it and hold it to left shoulder, hand over the heart. Members of organizations in formation salute upon command of the person in charge.
The Pledge of Allegiance and National Anthem
The pledge of allegiance should be rendered by standing at attention, facing the flag, and saluting.
When the national anthem is played or sung, citizens should stand at attention and salute at the first note and hold the salute through the last note. The salute is directed to the flag, if displayed, otherwise to the music.
The Flag in Mourning
To place the flag at half staff, hoist it to the peak for an instant and lower it to a position half way between the top and bottom of the staff. The flag is to be raised again to the peak for a moment before it is lowered. On Memorial Day the flag is displayed at half staff until noon and at full staff from noon to sunset.
The flag is to be flown at half staff in mourning for designated, principal government leaders and upon presidential or gubernatorial order.
When used to cover a casket, the flag should be placed with the union at the head and over the left shoulder. It should not be lowered into the grave.
Sudas closing shop: Last old-time landmark in Kihei will soon fade into Maui history
By MATTHEW THAYER and EDWIN TANJI
Staff Writers
KIHEI -- The last old-time landmark in Kihei is shutting down on Tuesday, with no indication from the landowner of what will replace it.
The Suda Store will close, just two months after the adjoining Suda Snack Shop shut down.
"As you know, when the snack shop closed, we said we were going to try to stay open," said Roy Suda, the eldest in the clan that has been operating the business since his mother took it over in 1967.
He said the family had been discussing new lease terms with the landowner, the Harry & Jeanette Weinberg Foundation, but finally decided, "It was time to retire."
It was a saddening announcement for regulars, including Kimokeo Kapahulehua, cultural adviser for the Kihei Canoe Club, whose canoe hale usually is described as being "across from Suda Store."
"This is the club's 26th year and that is how long we have been together, how long we have been neighbors," Kapahulehua said.
"This must be the new Maui. In the last month, we have received news of Waikapu Stop, Shishido Manju and Suda Store closing. It seems like all the mom and pops are closing down.
"The sad part for me personally, this will be the last little store, mom and pop store, family store in Kihei. We don't have any more little stores like this left in Kihei."
On the other side of the counter, Roy's daughter, Ronnelle Suda, had mixed feelings. A 17-year veteran behind the store's counter, who, like her aunts and father, started working at the store when she was just a teenager, Ronnelle always has greeted people with a happy face and cheerful welcome.
"For me, mixed emotions," she said. "I'll miss the loyal customers. You get kind of close to them. The part-timers that stay for a few months, you get to know them."
But it was a hot, humid Kihei day Wednesday and the old store felt it. Ronnelle said she won't miss that.
"I won't miss the heat," she said. "During the summer, it is so hot."
Roy Suda also expressed regrets over shutting down the store, which was a gateway to Kihei until the Piilani Highway displaced Kihei Road as the main thoroughfare through the booming South Maui district.
"When Suda Store goes, Kihei is going to be changed forever," Roy Suda said.
But he said he and his sisters, Therese Suda Fogarty and Janice Fernandez, also thought maybe it was time to move on with their lives.
"After so many years, they're not getting any younger," he said.
The store has been open for more than a generation, six days a week, from early in the morning to early in the evening, transforming from a neighborhood grocery to a snacks and bento specialty shop. When the snack shop opened in a renovated garage, the space inside the former Hawaiian Commercial & Sugar Co. plantation store that dates to 1944 was turned to other uses. Most recently uses included a fish market with Roy Suda as chief fish cutter.
"My sisters decided they had enough already. They made the final decision, we're going to close up," he said.
Scott Morris of Kihei will be among those to miss Suda's. He stopped by Wednesday to pick up an order of hapuu, fresh-caught grouper that isn't often found in markets because it's a relatively uncommon catch.
"Best fish in town and the friendliest people," Morris said. He said he will miss picking up his favorite fish, hapuu, at Suda's. "It's one of the few places on the island where you can get it," he said. "Hopefully they will pop up somewhere else soon."
He was joined by Dino Tapuro, who brought his kids by to pick up refreshments Wednesday afternoon.
"I grew up with Suda Store," Tapuro said. I grew up right up the road. It's sad to see them go."
His daughter, Kekai Tapuro, said she and her sister paddle for Kihei Canoe Club and they - like many, many other paddlers - will miss the convenience of having the store right across the street.
"We're sad," she said. "We'll miss Suda Store."
Roy Suda said he believes that Maui Council Member Wayne Nishiki will be able to continue his farmers market, which regularly uses the parking lot along Kihei Road in front of the Suda Store. For more than 20 years, Nishiki has been operating his fresh produce market with consent of the Sudas.
"He's going to have to deal directly with the Weinberg Foundation now," Roy said.
The Weinberg Foundation did not respond to a call from The Maui News on its plans for the site.
The Suda Store is part of a 29.2-acre commercial parcel that the foundation had planned for development several times over the past 10 years. The most recent plan was proposed five years ago as "Maui Nui Park," to include a dolphin research facility for The Dolphin Institute currently housed at Kewalo Basin on Oahu.
But the research facility was opposed by a number of Maui organizations and individuals, prompting the Maui County Council to approve a law that bans captive dolphins. The Dolphin Institute has since been invited to relocate to facilities proposed as part of the Ko Olina development on Oahu.
Still, in presentations on Maui Nui Park, foundation representatives had assured county planners that Suda Store would remain where it is and as it is.
With the store closing, Kapahulehua wondered what the foundation will do with the prime property that fronts on both Piilani Highway and Kihei Road at the entrance to Kihei..
Kapahulehua wondered if the Maui Nui project would now take over the entire property, including the rustic, asphalt-covered lot that circles the store and former snack shop and that the canoe club and other beachgoers regularly use for parking.
"I wonder if they (property owners) are going to continue this as a part of the park or are they going to leave it as it is - as a building the public can use," he said. "We hope when they build the Maui Nui Park they will make sure there is enough parking for us and for them. If they are not going to use the building, then we should be able to use the area for parking."
Kapahulehua said the club recently petitioned the Weinberg Foundation for the right to park on the property, but the request was denied.
Just as they did with the snack shop, the Sudas said they will keep regular hours until Tuesday: 7:30 a.m. to 5 p.m. today, Friday and Monday; and 7 a.m. to 4 p.m. Saturday.
"It's official. Tuesday we'll be gone," Roy Suda said.
Maui News
Thursday 7/24/03
[These stories actually bring tears to my eyes...I never ever thought I'd get this old.]
Hopkins Team Says Voting Software Has "Stunning Flaws"
Baltimore - A team of computer security researchers at Johns Hopkins University says there are serious problems with the software that runs some electronic voting machines.
The technical director of the university's Information Security Institute, Aviel Rubin, tells The New York Times that the software from Diebold Election Systems has "stunning flaws" that could allow poll workers to secretly alter electronic ballots.
The researchers also determined that "smart cards" used by voters to operate the machines can be cheaply reproduced -- allowing someone to vote more than once.
A Diebold spokesman says the company won't comment until it sees the full report. But he says that the researchers were apparently testing an older version of the software.
Diebold is based in Ohio and is best known as a maker of automated teller machines.
The state of Maryland recently agreed to a $56 million contract to use the voting system.
Copyright 2003 The Associated Press.
All Rights Reserved.
http://www.insidebaltimore.com/news/local/flawed-voting-software0724.shtml
The Unpatriot Act
From the Office of Rep. Ron Paul, MD
Congressman Ron Paul praised two landmark votes in Congress that could mark a turning point in the battle to protect civil liberties threatened by the Patriot Act. Paul has been an outspoken critic of the Patriot Act since its hasty passage in the weeks following the 9/11 terrorist attacks. The Act endangers civil liberties by easing federal rules for search warrants, allowing warrantless searches in some instances, allowing expanded wiretaps and Internet monitoring, and even allowing federal agents to examine library and bookstore records. Yet despite these serious constitutional questions, few if any members of Congress read the 500-page Patriot Act prior to voting on it!
However, the House of Representatives recently passed two amendments to the annual Justice department funding bill that show many in Congress are having second thoughts about the Patriot Act.
One amendment, sponsored by Congressman Butch Otter of Idaho and cosponsored by Paul, denies funding for the Justice department to execute so-called “sneak and peek” warrants authorized by the Patriot Act. “Sneak and peek” warrants enable federal authorities to search a person’s home, office, or personal property without the person’s knowledge! This secrecy upsets decades of legal precedent requiring that an individual be served with a warrant before a search. The House voted overwhelmingly not to fund this overzealous federal police practice.
[And the hip pocket Senate?]
The House also unanimously passed an amendment prohibiting funds for the Justice department to force libraries and bookstores to turn over records of books read by their patrons. Librarians around the country have led the charge against this provision in the Patriot Act, arguing that Americans have always been free to read whatever they choose without being monitored by government.
The battle against the Patriot Act has only just begun, however, as the Senate could strip the new restrictions passed by the House. Both the administration and congressional leadership continue to support the Act, despite public outcry against it and growing opposition among rank and file members of the House. Paul and hundreds of his House colleagues now hope to capitalize on their momentum by working to repeal all or part of the Patriot Act itself.
July 25, 2003
Dr. Ron Paul is a Republican member of Congress from Texas.
Er, uh, yeah...APOA? Got ten million shares of it...yeah that's the ticket...
Why? You pounding the table again?
Up around 40%...
http://finance.yahoo.com/q?s=APOA.OB&d=c&t=5d&l=on&z=b&q=l