May 20, 2011


Mu’ammar Al-Qadhafi – the Q indicates a velar K, a guttural far back in the throat, as the dh indicates a velar d, not the ordinary friendly d, but one far back in the throat; they’re helpful indications how his name is pronounced. – with a band of fellow army officers seized power in Libya.

The US had a large airforce base, Wheelus, in the country, whose armaments could have dealt with any small country, but they did nothing at all during the coup. After the usual round of wild claims that they must have been behind it had subsided, it has been generally recognized that the US had no part in the coup, either for or against. See note 1.

Mu’ammar’s first act on attaining power was typical and in a sense defined him. Tripoli was surrounded at the time by the ring of favellas or shanty towns that many cities in the world have; Qadhafi built a whole series of modern furnished apartments, moved the shanty town dwellers into them, and then destroyed the shanty towns. It is unlikely to be forgotten.

Mu’ammar’s own instinct was against it, but his friend Gemal Abdel Nasser of Egypt persuaded him, probably correctly, that it was necessary to create a cult of personality, simply for personal protection. His personal life remained stubbornly individualistic however, with his army tent in his army camp.

Arabic is a very big language, and the term for the minaret of the mosque, Jami’, the gatherer, the crowd creator, was extended by Qadhafi not merely to Joumhouria, a republic, but to Jamahiriya, the technically correct category for the state of Libya, meaning the masses, or “mass-dom” as one official named it.

Qadhafi may be, and often is, regarded as an amiable nut, but he is at least quite consistent. The masses are exactly who he regards as important and worthy of service, which is merely what all governments are supposed to believe, of course, but very few of them have provided their masses with free state of the art healthcare, free state of the art education, and a $50,000 (fifty thousand US dollar) state loan if they get married. Indeed, none of them, to be brutally frank about it, with the exception of Libya, which is why Libya is ranked #1 in Africa for standard of living by the UN.

Ellen Brown’s detailed and very factual description of Libya can be found at

Also at

Note I. - Some very individualistic events took place around the coup, however, all rather revealing. The coup had been planned for earlier, for example, but as the day drew nigh, news swept Tripoli that Umm Kulthum was coming to hold a concert there. (To try to explain to those not literate in the Arab world that this maternal full figured lady, all of whose songs lasted for several hours and who had all her earnings paid directly to the Egyptian army was a source of crowd hysteria that made Beatlemania look rustic would take too long.) Qadhafi found himself surrounded by fellow conspirators who had become babbling idiots, capable only of repeating endlessly “Didn’t you hear? Umm Kulthum is coming to Tripoli!” “But the coup – it’s tomorrow,” one imagines Qadhafi hissing between clenched teeth, only to be met with another dollop of the great news. Qadhafi gave up, and let the current carry him, and by something not far short of a miracle, none of the preparations were discovered. The coup was successfully carried out, at a slightly later date, and the story may serve as a useful example of the SNAFU (Situation normal, all f***ed up) as against the CONSPIRACY school of thought.

Note 2.Everyone will have their own favorites, from closing barber shops – hair cutting should be done at home – to my own favorite, announcing the replacement of all Libyan ambassadors world wide by committees formed of all Libyans in the country. (Can you imagine the chaos?)

May 18, 2011


New Zealand plate stack: New Zealand's Southern Alps run along almost the entire length of the country's South Island. In the bottom right of this picture you can see the peak of one of these 3,000m (9,800ft) mountains. When the wind coming from the Pacific in the west hits them, it bounces off, causing clouds to become altocumulus lenticularis, a pile of plates shaped like the lens of an eye.

The Pacific Ocean, “that vast eyeball of water, and what it watches is not our wars.” Robinson Jeffers, Shine Perishing Republic.

May 8, 2011


How the McEconomy Bombed the American Worker The Hollowing Out of the Middle Class By Andy Kroll

Think of it as a parable for these grim economic times. On April 19th, McDonald's launched its first-ever national hiring day, signing up 62,000 new workers at stores throughout the country. For some context, that's more jobs created by one company in a single day than the net job creation of the entire U.S. economy in 2009. And if that boggles the mind, consider how many workers applied to local McDonald's franchises that day and left empty-handed: 938,000 of them. With a 6.2% acceptance rate in its spring hiring blitz, McDonald’s was more selective than the Princeton, Stanford, or Yale University admission offices.

It shouldn’t be surprising that a million souls flocked to McDonald's hoping for a steady paycheck, when nearly 14 million Americans are out of work and nearly a million more are too discouraged even to look for a job. At this point, it apparently made no difference to them that the fast-food industry pays some of the lowest wages around: on average, $8.89 an hour, or barely half the $15.95 hourly average across all American industries.

On an annual basis, the average fast-food worker takes home $20,800, less than half the national average of $43,400. McDonald's appears to pay even worse, at least with its newest hires. In the press release for its national hiring day, the multi-billion-dollar company said it would spend $518 million on the newest round of hires, or $8,354 a head. Hence the Oxford English Dictionary’s definition of "McJob" as "a low-paying job that requires little skill and provides little opportunity for advancement."

Of course, if you read only the headlines, you might think that the jobs picture was improving. The economy added 1.3 million private-sector jobs between February 2010 and January 2011, and the headline unemployment rate edged downward, from 9.8% to 8.8%, between November of last year and March. It inched upward in April, to 9%, but tempering that increase was the news that the economy added 244,000 jobs last month (not including those 62,000 McJobs), beating economists' expectations.

Under this somewhat sunnier news, however, runs a far darker undercurrent. Yes, jobs are being created, but what kinds of jobs paying what kinds of wages? Can those jobs sustain a modest lifestyle and pay the bills? Or are we living through a McJobs recovery?

The Rise of the McWorker

The evidence points to the latter. According to a recent analysis by the National Employment Law Project (NELP), the biggest growth in private-sector job creation in the past year occurred in positions in the low-wage retail, administrative, and food service sectors of the economy. While 23% of the jobs lost in the Great Recession that followed the economic meltdown of 2008 were “low-wage” (those paying $9-$13 an hour), 49% of new jobs added in the sluggish “recovery” are in those same low-wage industries. On the other end of the spectrum, 40% of the jobs lost paid high wages ($19-$31 an hour), while a mere 14% of new jobs pay similarly high wages.

As a point of comparison, that's much worse than in the recession of 2001 after the high-tech bubble burst. Then, higher wage jobs made up almost a third of all new jobs in the first year after the crisis.

The hardest hit industries in terms of employment now are finance, manufacturing, and especially construction, which was decimated when the housing bubble burst in 2007 and has yet to recover. Meanwhile, NELP found that hiring for temporary administrative and waste-management jobs, health-care jobs, and of course those fast-food restaurants has surged.

Indeed in 2010, one in four jobs added by private employers was a temporary job, which usually provides workers with few benefits and even less job security. It's not surprising that employers would first rely on temporary hires as they regained their footing after a colossal financial crisis. But this time around, companies have taken on temp workers in far greater numbers than after previous downturns. Where 26% of hires in 2010 were temporary, the figure was 11% after the early-1990s recession and only 7% after the downturn of 2001.

As many labor economists have begun to point out, we're witnessing an increasing polarization of the U.S. economy over the past three decades. More and more, we're seeing labor growth largely at opposite ends of the skills-and-wages spectrum -- among, that is, the best and the worst kinds of jobs.

At one end of job growth, you have increasing numbers of people flipping burgers, answering telephones, engaged in child care, mopping hallways, and in other low-wage lines of work. At the other end, you have increasing numbers of engineers, doctors, lawyers, and people in high-wage "creative" careers. What's disappearing is the middle, the decent-paying jobs that helped expand the American middle class in the mid-twentieth century and that, if the present lopsided recovery is any indication, are now going the way of typewriters and landline telephones.

Because the shape of the workforce increasingly looks fat on both ends and thin in the middle, economists have begun to speak of "the barbell effect," which for those clinging to a middle-class existence in bad times means a nightmare life. For one thing, the shape of the workforce now hinders America’s once vaunted upward mobility. It’s the downhill slope that’s largely available these days.

The barbell effect has also created staggering levels of income inequality of a sort not known since the decades before the Great Depression. From 1979 to 2007, for the middle class, average household income (after taxes) nudged upward from $44,100 to $55,300; by contrast, for the top 1%, average household income soared from $346,600 in 1979 to nearly $1.3 million in 2007. That is, super-rich families saw their earnings increase 11 times faster than middle-class families.

What's causing this polarization? An obvious culprit is technology. As MIT economist David Autor notes, the tasks of "organizing, storing, retrieving, and manipulating information" that humans once performed are now computerized. And when computers can't handle more basic clerical work, employers ship those jobs overseas where labor is cheaper and benefits nonexistent.

Another factor is education. In today's barbell economy, degrees and diplomas have never mattered more, which means that those with just a high school education increasingly find themselves locked into the low-wage end of the labor market with little hope for better. Worse yet, the pay gap between the well-educated and not-so-educated continues to widen: in 1979, the hourly wage of a typical college graduate was 1.5 times higher than that of a typical high-school graduate; by 2009, it was almost two times higher.

Considering, then, that the percentage of men ages 25 to 34 who have gone to college is actually decreasing, it's not surprising that wage inequality has gotten worse in the U.S. As Autor writes, advanced economies like ours "depend on their best-educated workers to develop and commercialize the innovative ideas that drive economic growth."

The distorting effects of the barbell economy aren't lost on ordinary Americans. In a recent Gallup poll, a majority of people agreed that the country was still in either a depression (29%) or a recession (26%). When sorted out by income, however, those making $75,000 or more a year are, not surprisingly, most likely to believe the economy is in neither a recession nor a depression, but growing. After all, they’re the ones most likely to have benefited from a soaring stock market and the return to profitability of both corporate America and Wall Street. In Gallup's middle-income group, by contrast, 55% of respondents claim the economy is in trouble. They're still waiting for their recovery to arrive.

The Slow Fade of Big Labor

The big-picture economic changes described by Autor and others, however, don't tell the entire story. There's a significant political component to the hollowing out of the American labor force and the impoverishment of the middle class: the slow fade of organized labor. Since the 1950s, the clout of unions in the public and private sectors has waned, their membership has dwindled, and their political influence has weakened considerably. Long gone are the days when powerful union bosses -- the AFL-CIO's George Meany or the UAW's Walter Reuther -- had the ear of just about any president.

As Mother Jones' Kevin Drum has written, in the 1960s and 1970s a rift developed between big labor and the Democratic Party. Unions recoiled in disgust at what they perceived to be the "motley collection of shaggy kids, newly assertive women, and goo-goo academics" who had begun to supplant organized labor in the Party. In 1972, the influential AFL-CIO symbolically distanced itself from the Democrats by refusing to endorse their nominee for president, George McGovern.

All the while, big business was mobilizing, banding together to form massive advocacy groups such as the Business Roundtable and shaping the staid U.S. Chamber of Commerce into a ferocious lobbying machine. In the 1980s and 1990s, the Democratic Party drifted rightward and toward an increasingly powerful and financially focused business community, creating the Democratic Leadership Council, an olive branch of sorts to corporate America. "It's not that the working class [had] abandoned Democrats," Drum wrote. "It's just the opposite: The Democratic Party [had] largely abandoned the working class."

The GOP, of course, has a long history of battling organized labor, and nowhere has that been clearer than in the party's recent assault on workers' rights. Swept in by a tide of Republican support in 2010, new GOP majorities in state legislatures from Wisconsin to Tennessee to New Hampshire have introduced bills meant to roll back decades' worth of collective bargaining rights for public-sector unions, the last bastion of organized labor still standing (somewhat) strong.

The political calculus behind the war on public-sector unions is obvious: kneecap them and you knock out a major pillar of support for the Democratic Party. In the 2010 midterm elections, the American Federation of State, County, and Municipal Employees (AFSCME) spent nearly $90 million on TV ads, phone banking, mailings, and other support for Democratic candidates. The anti-union legislation being pushed by Republicans would inflict serious damage on AFSCME and other public-sector unions by making it harder for them to retain members and weakening their clout at the bargaining table.

And as shown by the latest state to join the anti-union fray, it's not just Republicans chipping away at workers' rights anymore. In Massachusetts, a staunchly liberal state, the Democratic-led State Assembly recently voted to curb collective bargaining rights on heath-care benefits for teachers, firefighters, and a host of other public-sector employees.

Bargaining-table clout is crucial for unions, since it directly affects the wages their members take home every month. According to data from the Bureau of Labor Statistics, union workers pocket on average $200 more per week than their non-union counterparts, a 28% percent difference. The benefits of union representation are even greater for women and people of color: women in unions make 34% more than their non-unionized counterparts, and Latino workers nearly 51% more.

In other words, at precisely the moment when middle-class workers need strong bargaining rights so they can fight to preserve a living wage in a barbell economy, unions around the country face the grim prospect of losing those rights.

All of which raises the questions: Is there any way to revive the American middle class and reshape income distribution in our barbell nation? Or will this warped recovery of ours pave the way for an even more warped McEconomy, with the have-nots at one end, the have-it-alls at the other end, and increasingly less of us in between?

Andy Kroll is a reporter in the D.C. bureau of Mother Jones magazine and an associate editor at TomDispatch. The son of two teachers, he grew up in a firmly -- and happily -- middle-class household. His email is andykroll (at) motherjones (dot) com.

Copyright 2011 Andy Kroll

Note: “The comfort of the rich depends upon an abundant supply of the poor.” Voltaire

May 5, 2011


Well, three months down and nine to go. How are you enjoying the Year of the Hare so far? Hope that the sheer speed of changes since the beginning of the year on February 3, 2011 is raising your hair a bit. Sort of exhilarating those flying roller coaster rides on the crest of the wave. Learn to ride. It’s gonna get rougher.

Mutability, or changes, comes not by presidential decree nor by secret bank deals – it’s a built in condition of the whole game – you can’t even step into the same river twice.

Purchasing a large estate in a South American country that has no extradition treaty with the USA might surely be regarded as the height of prudence. It ignores mutability, however. One day it may become a subject of negotiation between the US and the country of the large estate, on the subject of precisely entering into an extradition treaty.

Aagh, some things never change, I hear you say.

Well, you have to wait till the rock is ready to move, as a Varashaiva saint was heard to say. Grab the moment. Carpe diem. If you see a chance, take it.

Here is what we have to change, the war on humanity of Vishnu Braphat:

Where Have All the Graveyards Gone?

The War That Didn’t End War and Its Unending Successors By Adam Hochschild

What if, from the beginning, everyone killed in the Iraq and Afghan wars had been buried in a single large cemetery easily accessible to the American public? Would it bring the fighting to a halt more quickly if we could see hundreds of thousands of tombstones, military and civilian, spreading hill after hill, field after field, across our landscape?

I found myself thinking about this recently while visiting the narrow strip of northern France and Belgium that has the densest concentration of young men’s graves in the world. This is the old Western Front of the First World War. Today, it is the final resting place for several million soldiers. Nearly half their bodies, blown into unrecognizable fragments by some 700 million artillery and mortar shells fired here between 1914 and 1918, lie in unmarked graves; the remainder are in hundreds upon hundreds of military cemeteries, still carefully groomed and weeded, the orderly rows of headstones or crosses covering hillsides and meadows.

Stand on a hilltop in one of the sites of greatest slaughter -- Ypres, the Somme, Verdun -- and you can see up to half-a-dozen cemeteries, large and small, surrounding you. In just one, Tyn Cot in Belgium, there are nearly 12,000 British, Canadian, South African, Australian, New Zealander, and West Indian graves.

Every year, millions of people visit the Western Front’s cemeteries and memorials, leaving behind flowers and photographs of long-dead relatives. The plaques and monuments are often subdued and remarkably unmartial. At least two of those memorials celebrate soldiers from both sides who emerged from the trenches and, without the permission of their top commanders, took part in the famous informal Christmas Truce of 1914, marked by soccer games in no-man’s-land.

In a curious way, the death toll of that war almost a century gone, in which more than 100,000 Americans died, has become so much more visible than the deaths in our wars today. Is that why the First World War is almost always seen, unlike our present wars, not just as tragic, but as a murderous folly that swept away part of a generation and in every way remade the world for the worse?

To Paris -- or Baghdad

For the last half-dozen years, I’ve been mentally living in that 1914-1918 world, writing a book about the war that killed some 20 million people, military and civilian, and left large parts of Europe in smoldering ruins. I’ve haunted battlefields and graveyards, asked a Belgian farmer if I could step inside a wartime concrete bunker that now houses his goats, and walked through reconstructed trenches and an underground tunnel which protected Canadian troops moving their ammunition to the front line.

In government archives, I’ve looked at excuse to put their plans into action -- even though the killer was an Austro-Hungarian citizen and there was no evidence Serbia’s cabinet knew of his plot. Although the war quickly drew in many other countries, its first shots were fired by Austro-Hungarian gunboats on the Danube shelling Serbia.

The more I learned about the war’s opening, the more I thought about the U.S. invasion of Iraq. President George W. Bush and his key advisors had long hungered to dislodge Iraqi dictator Saddam Hussein from power. Like the archduke’s assassination, the attacks of September 11, 2001, gave them the excuse they had been waiting for -- even though there was no connection whatsoever between the hijackers, mainly Saudis, and Saddam Hussein’s regime.

Other parallels between World War I and today’s wars abound. You can see photographs from 1914 of German soldiers climbing into railway cars with “To Paris” jauntily chalked on their sides, and French soldiers boarding similar cars labeled “To Berlin.”

“You will be home,” Kaiser Wilhelm II confidently told his troops that August, “before the leaves have fallen from the trees.” Doesn’t that bring to mind Bush landing on an aircraft carrier in 2003 to declare, in front of a White House-produced banner reading “Mission Accomplished,” that "major combat operations in Iraq have ended"? A trillion dollars and tens of thousands of lives later, whatever mission there may have been remains anything but accomplished. Similarly, in Afghanistan, where Washington expected (and thought it had achieved) the most rapid and decisive of victories, the U.S. military remains mired in one of the longest wars in American history.

The Flowery Words of War

As the First World War made painfully clear, when politicians and generals lead nations into war, they almost invariably assume swift victory, and have a remarkably enduring tendency not to foresee problems that, in hindsight, seem obvious. In 1914, for instance, no country planned for the other side’s machine guns, a weapon which Europe’s colonial powers had used for decades mainly as a tool for suppressing uppity natives.

Both sides sent huge forces of cavalry to the Western Front -- the Germans eight divisions with 40,000 horses. But the machine gun and barbed wire were destined to end the days of glorious cavalry charges forever. As for plans like the famous German one to defeat the French in exactly 42 days, they were full of holes. Internal combustion engines were in their infancy, and in the opening weeks of the war, 60% of the invading German army’s trucks broke down. This meant supplies had to be pulled by horse and wagon. For those horses, not to mention all the useless cavalry chargers, t1 million wounded, many of them missing hands, arms, legs, eyes, genitals.

Was it worth it? Of course not. Germany’s near-starvation during the war, its humiliating defeat, and the misbegotten Treaty of Versailles virtually ensured the rise of the Nazis, along with a second, even more destructive world war, and a still more ruthless German occupation of France.

The same question has to be asked about our current war in Afghanistan. Certainly, at the start, there was an understandable motive for the war: after all, the Afghan government, unlike the one in Iraq, had sheltered the planners of the 9/11 attacks. But nearly ten years later, dozens of times more Afghan civilians are dead than were killed in the United States on that day -- and more than 2,400 American, British, Canadian, German, and other allied troops as well. As for unplanned consequences, it’s now a commonplace even for figures high in our country’s establishment to point out that the Afghan and Iraq wars have created a new generation of jihadists.

If you need a final resemblance between the First World War and ours of the present moment, consider the soaring rhetoric. The cataclysm of 1914-1918 is sometimes called the first modern war which, among other things, meant that gone forever was the era when “manifest destiny” or “the white man’s burden” would be satisfactory justificatioprotectorates and colonies. In Africa, for instance, Germany dreamed of establishing Mittelafrika, a grand, unbroken belt of territory stretching across the continent. And the British cabinet set up the Territorial Desiderata Committee, charged with choosing the most lucrative of the other side’s possessions to acquire in the postwar division of spoils. Near the top of the list of desiderata: the oil-rich provinces of Ottoman Turkey that, after the war, would be fatefully cobbled together into the British protectorate of Iraq.

When it comes to that territory, does anyone think that Washington would have gotten quite so righteously worked up in 2003 if, instead of massive amounts of oil, its principal export was turnips?

Someday, I have no doubt, the dead from today’s wars will be seen with a similar sense of sorrow at needless loss and folly as those millions of men who lie in the cemeteries of France and Belgium -- and tens of millions of Americans will feel a similar revulsion for the politicians and generals who were so spendthrift with others’ lives. But here’s the question that haunts me: What will it take to bring us to that point?

Adam Hochschild is the San Francisco-based author of seven books, including King Leopold’s Ghost. His new book To End All Wars: A Story of Loyalty and Rebellion, 1914-1918 (Houghton Mifflin Harcourt), has just been published.

Copyright 2011 Adam Hochschild

During World War 2, members of the European resistance, the underground, working against the Axis (Germany, Italy, Japan) powers, were expected to hold out for 24 hours, to give their companions time to dismantle all leads, addresses, plans, that that member knew about. Many, including the heroic British agent, Ms. Churchill, did indeed hold out against the worst that the Gestapo in a hurry could produce.

Mr. Khalid Sheikh Mohammed, a leading member of Al-Qaeda captured by the Americans, was waterboarded 183 times in a single month. He did confess to being Jack the Ripper, and to destroying, disguised as an iceberg, the Titanic, and no doubt the police forces of the UK will be happy to close those files at long last. He also knew, however, at the time of the waterboarding, of the compound in Abbottobad where Osama bin Laden was found and killed, and the courier who took round messages from and to there, and said nothing about it. (Asked why, some wit said, “They never asked about it.”)

A very strong movement is developing in a large number of states to have all unions gutted, all collective bargaining rights abolished, under a number of extreme right wing governors in these United States. Combined with the economic crisis, - no money, no jobs, all prices rising, - it is seen as the perfect time to create a crushingly plutocratic state. The military will be crucial, and when Blackwater troops are repatriated from anywhere in the event (haha) of a military withdrawal from anywhere, things will get rougher inside the USA too.

That’s not to mention the hyperinflation relentlessly rushing down on all western countries, but particularly the USA, from huge volumes of money printing. In Germany in the great Weimar hyperinflation, farmers had a bumper harvest that year, but couldn’t see the point of selling the solid assets in their granaries and storehouses for the government’s funny money that halved in value every day, and so thousands of Germans starved to death in the cities. We have something similar to look forward to, and so do you.

The plans of the powers that be are made plain in the proposal by Mr. Chertoff, head of Homeland Security and a dual nationality Israeli/American citizen to install the infamous full body scanners at bus stops and shopping mall entrances. Mr. Chertoff has a very large financial interest in Rapiscan, the company making the scanners, and although the report that it “strips your DNA” has never been explained, I’d really prefer to leave my DNA as it is, acid influence an’ all. Evacs or whatever they call the fully operated from inside a mountain in Nevada drones, armed with hell fire missiles and able to be manufactured now in ridiculously small sizes, have just been given official permission to fly not only over Libya, where they attempt to assassinate Ghaddafi, but also in the skies of the USA, mixing with commercial traffic, under an executive order signed last week. Oh, goodie!

Here is an infallible test to decide terrorism in any case where large numbers of people (Humans – genus homo sapiens hahaha) are destroyed:

If the humans are destroyed by missile strikes, smart bombs, or any automatic machinery, it is the people killed who are the terrorists, and those operating the machinery are innocent victims. This is especially true if the killing machinery is entirely human-free, such as robot drones firing hell fire missiles.

If the humans are destroyed, on the other hand, by other humans, who may also destroy themselves in the process as in the case of suicide bombers, then it is the humans destroyed who are the innocent victims, and those doing the destroying who are the terrorists.

Cousin strands of genus homo, such as apes, gorillas, chimpanzees, and orangutans (orang hutan = “people of the trees”) need not be considered because although they have the necessary two legs, two arms, and head configuration, none have any known experience of manufacturing explosives.

That’s also not to mention said he mentioning it the coming fifty year increase in natural disasters as climate change heats up. The lead time of fifty years means anything we do now may make a difference to the earth’s climate in fifty years time, but not before that. The sins of the past hundred years have to come home to roost first. We’ll mostly be up to our butts in raw sewage in various floods to worry over much about political philosophy: Aquarius, ruler of the waters, will see to that. Also, possibly, hungry. “Food is heaven,” as the ancient Chinese proverb puts it.

Any hope? Oh yeah. The flood of new DNA-altering stuff that arrived with acid and got pumped into our DNA, opened more doors and passages that take time to become apparent. The most recent update on bee colony destruction contains bee techniques I notice I’m independently using for my own rubbish disposal.

Important note: Forget not the wise words of young Daniel Cohn-Bendit, of the 1968 troubles in France, as he stepped off a plane to have reporters with microphones thrust at him for his opinion on blah, blah, blah. “You might just as well ask the next guy in the line behind me,” said Danny, “We don’t have leaders like that any more.” That happens to be the exact meaning of Jamahirya, the masses, the “poor people,” who “line up to throw their votes into the ballot box like pieces of waste paper into the trash can.” [Mu'ammar Qadhafi, The Green Book.] See how dangerous this guy is? That’s without even counting his 142 tons of gold, and the African gold dinar proposed, and largely accepted, by many African countries. (And for G_d’s sake don’t let any mention of the $50,000 state loan for every getting married couple out; it’ll only have everyone comparing their own situation. Concentrate on protecting the civilian population by blasting them with a hundred plus missiles.)

Soldier on. The best is yet to come, etcetera, worse things happen at sea. Masha’allah. Plant some potatoes. Good luck.

May 3, 2011


Spend It Like You Stole It By Bill Bonner 04/29/11 Baltimore, Maryland –

QE2 is ending in June. But globally, QE3 has already begun. As usual, Japan is the pacesetter. As temperatures rose at its Fukushima reactor so did Japan’s monetary base – at the rate of 100% per week! What happens to all this new, hot money? No one knows, exactly. But today, at The Daily Reckoning, we have advice for everyone – central planners, politicians, and householders, too: if you have money, pretend you robbed a bank.

From the point of view of a modern economist, nothing stimulates better than a bank robbery. The money leaves the cold embrace of a bank vault; soon every pimp and bartender has his pockets full. Hot money gets around.

An article in Rolling Stone Magazine provides an illustration. It explains how one Wall Street wife, and one Wall Street widow, formed a company specifically to take advantage of the US government’s spending spree known as TALF. You’d think the feds had already done enough for the Mack family. John Mack runs Morgan Stanley. Had it not been for the generous support of the US government and the Federal Reserve, he might be parking cars. Instead, the feds bailed out the entire financial sector. First, it bought up Wall Street’s bad bets at inflated prices and then lent banks money at artificially low interest rates; they were invited to lend the money back to the federal government for a sure profit.

Business was so good at Morgan Stanley that the distaff side of the Mack household apparently couldn’t resist. In June, 2009, with her friend Susan, Christy Mack set up an investment company and put in $15 million. Then, they borrowed $220 million from the government. A brave move on their part? If you think so, you are as na├»ve as a turnip. The fix was in; the two used the money to buy non-recourse loans at deep discount. If the loans increased in value, they would make a profit. If they fell, the government would take the losses. Much safer and more profitable than robbing banks. Two months later, Mr. Mack, perhaps with a little assistance from his blond helpmate, bought a limestone carriage house in Manhattan, with a 12-space garage for the getaway cars.

If you don’t have your own little stimulus scam going, you may want to listen up. Your dollars, pounds, euros and pesos are going to lose value. Don’t trust the government’s inflation figures. An honest measure of the “inflation rate” is available thanks to a pair of professors at MIT. Their “Billion Prices Project” (BPP) doesn’t pussyfoot around. It trolls the Internet, records prices and reveals the most accurate measure of inflation ever. This new index shows the rate of consumer price increases for the last 12 months at 3.2%. This is more than half again as much as the Labor Department’s own tally – 2.1%.

Something is dreadfully wrong. Either a billion prices are in error. Or, people who buy US treasury bonds are. They accept a real yield (based on the BPP numbers) of barely 1.2% on a 30-year dollar-denominated, inflation-sensitive Treasury bond, while the dollar sinks and its custodians actively try to drown it. And, over the last six months, according to BPP, prices have been rising nearly twice as fast – at a 6.1% annualized rate. If these figures hold, bond investors already have a built-in negative yield. The inflation figure for the last 3 months is even higher, 7.4%, about 300 basis points more than the yield on the long bond.

Treasury prices have trended higher for nearly 30 years. Could they be ready to fall now? Maybe. Inflation is not like holding up a liquor store; it’s more like a major bank heist, the product of long planning by trained professionals. Whenever the nominal amount of available money increases faster than the real goods and services that money buys, you can expect rising prices.

In America, real private-sector output reached a plateau at the end of the 20th century. In the last 10 years, it has scarcely increased at all. Total private sector GDP was $9.31 trillion in 2001. Now it is $9.72 trillion. But while real output has been flat, the output of hot “money” has not. When they are not stealing it from the taxpayers, or borrowing it with no intention to pay it back, the feds are counterfeiting it. The Fed will have “printed up” about $1.8 trillion from the end of 2008 to the end of June, 2011 – partly to finance staggering federal government deficits of nearly $4.5 trillion over the three years. This led to an increase in the GDP, almost entirely from government spending, with 79% of household income growth from government transfer payments.

Meanwhile, the US monetary base has tripled in the last 3 years. These increases are not all immediately available to households as “money;” they are mostly still in bank vaults, waiting to be liberated. Then, watch out. Dollars will be too hot to hold.

Regards, Bill Bonner for The Daily Reckoning

Read more: Spend It Like You Stole It