Looking Into the Crystal Ball That Saw QE3 Over A Year In Advance

Arcadia Economics Consulting
Thursday, December 27th, 2012

by Chris Marcus 

Looking Into the Crystal Ball That Saw QE3 Over A Year In Advance

Most of the questions we received this week were regarding predictions for 2013 and that is the topic of today's column. As 2012 comes to a close it's an interesting one to look back on as in many ways it felt like a yearlong holding pattern. While there was a presidential election, a lot of talk about a fiscal cliff, and new unheard of rates of money printing around the globe it still feels that in some ways very little changed. In Europe where certain parts of the union are living in daily crisis there has still not been any sort of resolution in either direction. In Japan reports that conditions are deteriorating continue to emerge yet still things continue largely the same. Many of these situations will finally change in the coming years.

Today we will look at some of the key asset classes and think about what can be expected going forward. Currently markets around the world are experiencing a very non-standard price distribution that has never really occurred to this extent. As usual, timing the correction of an asset price in a distorted market is never easy. It's one thing to recognize a bubble but figuring out when the market will correct is more difficult because you also have to figure out when other people will start to understand what you already know. Sometimes it takes longer than we think. Maybe you saw in 2005 that the real estate market was due for a correction but it took another few years before it was realized by the market.

Many of the forecasts made by Arcadia this year fit into this type of distribution. This is not an attempt to lump the outcomes into any particular category but rather a reflection of how most of the markets currently operate. It is not a typical investing environment but that can be ok as long as the situation is diagnosed accurately. Opportunity still exists and understanding the landscape can give you an incredible advantage.

Given the current market dynamics many of these forecasts can best be as an outlook for the next two years and were written with that intention in mind. With that said many of movements and developments could well take place in 2013, but in either case it is safe to say that we are no longer looking at events that are decades away.

The United States Treasury Market



Interest rates will eventually rise on U.S. debt regardless of the Fed's desire to keep them suppressed. Currently if you lend money to the US government for 10 years you get a 1.7% return. However when inflation is factored in your return becomes negative (if your money grows by 1.7% per year but the cost of the goods you buy goes up by 2% then you are actually able to buy less). Additionally the credit quality of the debt continues to deteriorate as the borrowing continues to accelerate. At the same time there is no end in sight to the political dysfunction. The most recent example is how Washington spent the last 2 months talking about how apocalyptic it would be if any spending restraints were actually implemented. Yet this time they couldn't even agree on how to increase spending! Traditionally that's been the only thing they have been able to agree on.

This particular point is one that many economists have already missed in their 2013 forecasts. I keep reading forecasts that are largely predicated on the possibility of "the US getting its fiscal house in order in 2013". The conclusions they make are not necessarily incorrect but they are somewhat misleading since they based upon an assumption that can and should be discounted. There is not going to be a last minute cure-all solution that allows a politically convenient escape from the necessary economic restructuring. The situation has progressed past the point of an easy graceful solution.

It is also important to always consider the skew and odds implied by an investment. Bond yields are not far off their historic lows and there is very little upside to the trade while real interest rates are already negative. The downside is that eventually people will begin to realize that the treasury market is not a safe haven and the value of the debt will drop substantially. You want high return and low risk, not high risk and low return.

The U.S. Equity Market



There is an incredibly important concept that affects the equity markets. If investors knew nothing else but only understood this one point they would be able to consistently be at an advantage whenever they are interacting with the market.

In 2007 the Dow Jones was trading over 14,000. It dipped as low as 6,600 in early 2009 yet now it closes 2012 just below the 13,000 level. Do you remember what else occurred at the exact time the turnaround began? On March 18, 2009 the Federal Reserve launched what has come to be known as QE1. Technically it should have been known as QE2 as it was actually an expansion of the Fed's initial bond buying program in response to the Lehman Brothers failure. But in either case the connection between the Fed policy and the stock market run-up over the past 4 years has been unmistakable. (If you haven't heard comedian Jon Stewart's analysis of Fed policy it's pretty funny and points out just how ridiculous the entire situation is).

In an inflationary environment like the one that we are currently experiencing, all of the quantitative easing (money printing) programs also pump a lot of money into the stock market. If it sounds bizarre that the Federal Reserve is monetizing government debt so that they can goose the stock market I understand how you feel. It's hardly a free market in action. But Ben Bernanke continues to monetize government debt and mortgage paper with the goal of boosting nominal stock market prices. In Bernanke's own Washington Times op-ed in 2010 he actually used this as a defense of QE2.

"This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action.... higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion."

So far the circle of virtuosity has not developed quite as Bernanke had hoped for. It is unclear why a stock market bubble caused by debt monetization would be a good thing but in either case we are up to round 4 of quantitative easing and there is no end in sight. The Fed has already committed to printing over $1 trillion in the next year alone and a lot of that money is going to go into the stock market.

In real terms (instead of pricing the market in dollars you could price it in terms of gold or silver) the US stock market is going to decline significantly. The current monetary, fiscal, and regulatory environment has been particularly harsh on business owners and job creators as reflected by the elevated unemployment level. However in nominal terms (simply looking at the dollar price) the markets may well continue to rise. This is the result of the Federal Reserve's money printing. The value of your stocks will be higher but so will the price of the items that you buy. Your money literally won't worth what it used to be. There are some sectors like precious metals, base metals, miners, and natural resources that will fare well in this environment as they have a real value, but investing in the broader market indices is a risky strategy.

Real Estate



Investing in real estate has never been more complicated because of the overwhelming government involvement in the market. On one hand prices are significantly cheaper than at the top of the bubble. On the other hand the market is being heavily supported through various government programs and Federal Reserve asset purchases. As a result housing prices remain artificially elevated. Will the nominal value of your real estate go higher as real estate rises in response to the inflation of the money supply? Eventually yes. However will the actual value of your home increase in real terms? No.

Think of it this way. If your home is worth $100,000 and right now a vacation costs $1000, you can afford to take 100 vacations if you sell your home. In 5 years your home might be worth $200,000 but the cost of the vacation is $10,000 and now your house is only worth 20 vacations (you also would have to pay tax on the real estate gain while you would n a credit for the vacations). You have more dollars but they buy less goods. With real estate you also have to consider the liquidity of the market. In 2009 your house may have been worth $500,000 but you might not have been able to find someone else who was willing AND able to pay that much.

However if you have found a dream home that you love and plan to keep it for the long-term then some of the current conditions can actually work in your favor. In this case you don't have to be concerned about the liquidity of the market and you will actually end up making those payments 20 years from now in highly devalued dollars. With real estate you do also have the advantage that again you actually own something of real value. However keep in mind that you never actually completely own your home as you are always at the mercy of your real estate taxes and history shows that they can increase during at times of governmental fiscal distress (as seen in the current case with the Fiscal Cliff).

Real estate is an asset class that is very specific to each individual's situation and these are intended not as investment recommendations but as a set of parameters to consider. This way you can discuss them with your financial planner to make sure that a plan is developed that considers some risks that are not as frequently recognized.

Silver



Precious metals are always a favorite topic at Arcadia as I continue to feel that this sector is simply the best option currently available. While no one knows for certain when the American, European, or Japanese bond markets will finally reach their breaking points the attractiveness of gold and silver as the real safe havens increases daily.

2012 was a disappointing year for many precious metals investors who were correct in predicting unprecedented amounts of money printing yet saw both gold and silver finish well below their 2011 highs. As Arcadia has pointed out throughout this past year this is a reflection of short-term liquidity issues rather than a change in the fundamentals. A physical shortage is developing and the ultimate resolution will be a significant revaluation upwards in the price of both metals. There is a good chance of this happening in 2013 although a safer statement to make is on a three-year time horizon. The current price level of silver in particular will in due time be looked back upon as one of the greatest asset mispricings in history.

There are certain market reactions that can only be caused by distortive manipulations. The crash of the tech and mortgage bubbles could only have occurred because of the prior inflation that had occurred. Similarly silver has only been able to become this far misaligned from its true market value because of distortions in the market. The result is that between the unlimited money printing, growing demand (particularly out of China) for metal, and the unanswered question of where that metal is going to come from it is difficult to see how the market supply and demand will continue to meet at current levels.

More specifically, I would personally be stunned if you can buy an ounce of silver for less than $75 by the end of 2015. I also believe that a significant price correction of that extent or greater is possible well before 2015 and could easily occur in 2013 or 2014. The distortions currently being caused in the markets cannot continue indefinitely and I believe that we are nearing the point at which that correction will take place.

Gold



Gold will also do quite well in this environment. Obviously as citizens realize that the paper currencies they are holding are being debased at an increasingly rapid rate more and more people will move to the real safe havens of gold and silver.

The gold market also has its own mysteries including the growing speculation regarding the existence of Germany's gold. Austria and the Netherlands have also recently become concerned about the security of their gold. It's baffling why the Federal Reserve refuses to audit or even comment on the idea of an audit of their vaults. As with the secrecy around the vault at Fort Knox people are left to wonder what accounts for the lack of transparency. An unexpected resolution to any of these questions could completely reprice the entire monetary system. But regardless as to whether there is a shock of that nature the continued central bank printing that is already public that we do know about will by itself be enough to push gold well past the $2,000 mark. Gold should also clear the $2500 mark by the end of 2014.


And of course Happy New Year!

I hope that Arcadia Economics Consulting was of value to you in 2012. It was a particularly special year for me as Arcadia was finally created to help people understand what they are rarely told but need to know about the markets. It's been an honor and a pleasure to serve you and we are grateful for all of the feedback from Arcadia's readers and clients. We have some exciting developments planned for the coming year and I hope you have a happy new year full of abundance and success.

Sincerely,
Chris Marcus

CEO and Founder of Arcadia Economics Consulting

chris@arcadiaeconomics.com

How the Koch Brothers Became Billionaires

FROM:  LewRockwell.com

by Robert Wenzel
Economic Policy Journal

Forbes has a cover story puff piece out on the Koch brothers, but it is informative in a number of ways. We learn for example how the Koch brothers became billionaires. Using their father's asset base, they bought more assets, sometimes using great debt, that then soared in value as a result of Federal Reserve money printing:

Over time, Charles says, he learned he could take on profitable risk by investing in long-lived assets that his customers didn’t want to buy themselves.

Koch’s father died on a hunting trip in 1967 at age 67, shortly after handing full management control over to Charles, setting in motion the two most momentous turning points in the company’s history. The following year Charles made the riskiest, and likely most profitable, move of his career. His family owned 35% of the Pine Bend refinery outside Minneapolis, with Union Oil of California holding 40% and J. Howard Marshall owning 15%. Koch wanted to buy out Unocal, but the company was asking too much. So he persuaded the older and more experienced Marshall–who later became infamous at age 89 for marrying the young stripper-turned-Playboy-pinup Anna Nicole Smith–to combine his 15% interest with Koch’s 35% to prevent Unocal from assembling a majority stake to sell to outsiders.

The risk paid off handsomely. Marshall’s heirs, including the widow of his son, J. Pierce, hold Koch Industries stock worth at least $10 billion. And while Charles took on a potentially crippling $25 million in debt to buy out Unocal–something he has eschewed ever since–Pine Bend evolved into a cash engine that provided Charles the fuel to expand.

It wasn't rocket science, but they did act. Charles was most likely influenced by Murray Rothbard's What Has Government Done to Our Money, which was published in 1963, five years before the Unocal refinery acquisition. The monograph discussed how the Fed was debasing the currency and how it would lead to major price inflation, which did occur and peaked out in the early 1980s at around 15%. If it wasn't for that inflation, foreseen by Rothbard, the Koch acquisition of the Unocal asset, with the heavy debt taken on, would have been a bust.

Price inflation from 1963 to 1981

In the Forbes profile, we also learn of a very peculiar view Charles holds about democracy:

 The goal has always been, Charles says, “true democracy,” where people “can run their own lives and choose what they want to buy, choose how to spend their money.” (“Now in our democracy you elect somebody every two to four years and they tell you how to run your life,” he says.)

People running their own lives would be less democracy and more a private property society (i.e., a Rothbardian anarcho-capitalist view), without legislators and other government operators attempting to micro-manage populations. Such a private property society would be a good thing, but it is hard to square Charles' supposed take on this with the brothers behind the scenes role in propping up various politicians who move in a direction quite different from a private property society. Says Forbes:

Mitt Romney’s loss was a huge blow to them, both in terms of likely policy outcomes and personal reputation.[...]“We raised a lot of money and mobilized an awful lot of people, and we lost, plain and simple,” says David. “We’re going to study what worked, what didn’t work, and improve our efforts in the future. We’re not going to roll over and play dead.”  MORE

The Coming Drone Attack on America

From:  LewRockwell.com

Drones on domestic surveillance duties are already deployed by police and corporations. In time, they will likely be weaponised

by Naomi Wolf

People often ask me, in terms of my argument about "ten steps" that mark the descent to a police state or closed society, at what stage we are. I am sorry to say that with the importation of what will be tens of thousands of drones, by both US military and by commercial interests, into US airspace, with a specific mandate to engage in surveillance and with the capacity for weaponization – which is due to begin in earnest at the start of the new year – it means that the police state is now officially here.
In February of this year, Congress passed the FAA Reauthorization Act, with its provision to deploy fleets of drones domestically. Jennifer Lynch, an attorney at the Electronic Frontier Foundation, notes that this followed a major lobbying effort, "a huge push by […] the defense sector" to promote the use of drones in American skies: 30,000 of them are expected to be in use by 2020, some as small as hummingbirds – meaning that you won't necessarily see them, tracking your meeting with your fellow-activists, with your accountant or your congressman, or filming your cruising the bars or your assignation with your lover, as its video-gathering whirs.
Others will be as big as passenger planes. Business-friendly media stress their planned abundant use by corporations: police in Seattle have already deployed them.
An unclassified US air force document reported by CBS (pdf) news expands on this unprecedented and unconstitutional step – one that formally brings the military into the role of controlling domestic populations on US soil, which is the bright line that separates a democracy from a military oligarchy. (The US constitution allows for the deployment of National Guard units by governors, who are answerable to the people; but this system is intended, as is posse comitatus, to prevent the military from taking action aimed at US citizens domestically.)
The air force document explains that the air force will be overseeing the deployment of its own military surveillance drones within the borders of the US; that it may keep video and other data it collects with these drones for 90 days without a warrant – and will then, retroactively, determine if the material can be retained – which does away for good with the fourth amendment in these cases. While the drones are not supposed to specifically "conduct non-consensual surveillance on on specifically identified US persons", according to the document, the wording allows for domestic military surveillance of non-"specifically identified" people (that is, a group of activists or protesters) and it comes with the important caveat, also seemingly wholly unconstitutional, that it may not target individuals "unless expressly approved by the secretary of Defense".
In other words, the Pentagon can now send a domestic drone to hover outside your apartment window, collecting footage of you and your family, if the secretary of Defense approves it. Or it may track you and your friends and pick up audio of your conversations, on your way, say, to protest or vote or talk to your representative, if you are not "specifically identified", a determination that is so vague as to be meaningless.
What happens to those images, that audio? "Distribution of domestic imagery" can go to various other government agencies without your consent, and that imagery can, in that case, be distributed to various government agencies; it may also include your most private moments and most personal activities. The authorized "collected information may incidentally include US persons or private property without consent". Jennifer Lynch of the Electronic Frontier Foundation told CBS:

"In some records that were released by the air force recently … under their rules, they are allowed to fly drones in public areas and record information on domestic situations."

This document accompanies a major federal push for drone deployment this year in the United States, accompanied by federal policies to encourage law enforcement agencies to obtain and use them locally, as well as by federal support for their commercial deployment. That is to say: now HSBC, Chase, Halliburton etc can have their very own fleets of domestic surveillance drones. The FAA recently established a more efficient process for local police departments to get permits for their own squadrons of drones.
Given the Department of Homeland Security militarization of police departments, once the circle is completed with San Francisco or New York or Chicago local cops having their own drone fleet – and with Chase, HSBC and other banks having hired local police, as I reported here last week – the meshing of military, domestic law enforcement, and commercial interests is absolute. You don't need a messy, distressing declaration of martial law.
And drone fleets owned by private corporations means that a first amendment right of assembly is now over: if Occupy is massing outside of a bank, send the drone fleet to surveil, track and harass them. If citizens rally outside the local Capitol? Same thing. As one of my readers put it, the scary thing about this new arrangement is deniability: bad things done to citizens by drones can be denied by private interests – "Oh, that must have been an LAPD drone" – and LAPD can insist that it must have been a private industry drone. For where, of course, will be the accountability from citizens buzzed or worse by these things?  MORE

MENTAL HEALTH - I, Psychopath

 FROM:  SOTT

I, Psychopath, Part One

I, Psychopath
I, Psychopath - Synopsis
Thu, 25 Mar 2010 09:42 CD
Despite the best advice of the world's top experts, Australian documentary-maker Ian Walker was naive to think he could study a psychopath in the wild and not get hurt.

"I didn't really understand how manipulative a psychopath can be," the director of I, Psychopath now admits. "I thought it would be a fair fight. After all, the filmmaker has the power, really. The power of the camera and the edit."

But, as it turns out, Walker chose his subject well. 47 year-old Israeli-born Sam Vaknin is a former corporate criminal and a self-proclaimed master of manipulation and reinvention. Walker first interviewed him several years ago as the author of the book Malignant Self-Love: Narcissism Revisited.

Walker was intrigued by a throwaway line where Vaknin professed he thought himself a "corporate psychopath". Afterwards, the film-maker spent several years researching the subject, but always wanted to make a film which might show psychopathic behaviour in action. Because of his narcissism, Vaknin was almost certain to say "Yes".

So, in February 2008, joined by Vaknin's long-suffering but ever-loyal wife Lidija, the threesome embarked on a diagnostic road trip to the world's top experts in psychopathy. Via a battery of psychological testing and brain scanning experiments, Vaknin becomes the world's first civilian to willingly seek a diagnosis for psychopathy.

The scientists are pleased to meet him. The "non-violent" or "white collar psychopath" is a test subject they rarely find in their labs. Much about them, including how their brains work, remains a mystery.

"They don't come to the attention of the science but also not to the attention of the social system because they are not criminal," explains German-based neurobiologist Professor Niels Birbaumer. "They are not violent, viciously violent and that's why we don't know them. But their impact on society is tremendous, and it was never studied."

In I, Psychopath, there are effectively two films happening in parallel. As the encounters between Sam and the scientists unfold, the relationship between subject and director shifts and changes, inadvertently supplying a voyeuristic first hand account of what it is like to deal with an everyday "non-violent" psychopath.

Vaknin proves to be the real thing, scoring an 18 out of 24 on the official Psychopathy Checklist (Screening Version). Most people, outside of prison, would score a zero or one, according to the Checklist's inventor Professor Bob Hare.  MORE

ECONOMIC VIEW - All of the Central Banks are Printing Money So Why Are Gold and Silver Lower?

Arcadia Economics Consulting
Monday, December 17th, 2012
-Chris Marcus

All of the Central Banks are Printing Money So Why Are Gold and Silver Lower?
Think about what's happened in the past 4 months. On September 6th European Central Bank president Mario Draghi "announced a new program of open-ended, unlimited buying of distressed government bonds." When a central bank purchases bonds they have to create (print) money to do so, meaning that in this case the European Central Bank said that it was going to printing an unlimited amount of Euros.

One week later the Federal Reserve announced QE3 in which it said it would begin purchasing $40 billion per month of mortgage securities and also stated that it would be willing to print as much money is required until the economy improves (unfortunately the economy won't improve until they stop printing money). Two weeks ago they launched QE4, which added an additional $45 billion per month of treasuries to the pile. This means they are now on schedule to print over $1 trillion next year.

Over in Japan new Prime Minister Shinzo Abe ran on a platform of unlimited stimulus and quantitative easing (money printing) and now that he has been elected president he is already putting pressure on the bank of Japan. So the natural question is that with all of this money printing why are both gold and silver well off their highs of the year and actually even lower than where they were trading before all of these rounds of currency debasement? Gold was trading at $1700 on September 6th and opened up trading $1660 in far east trading Sunday night, while silver has declined from $33 to as low as $29.50 last week.

There were two main reasons offered by Wall Street and the mainstream media for the recent declines. One hypothesis was that hedge fund manager John Paulson (who has a substantial position in gold) was liquidating large amount of his holdings due to customer redemptions. While at first glance this seems like a plausible explanation it does not explain why silver has also dropped over $4 since the day QE4 was announced. There have been no reports of Paulson holding any substantial silver positions. In fact it would actually be hard for Paulson to even acquire a sizeable amount of silver relative to the size of his portfolio given how much money he has under management and how small the silver market is.

The other explanation offered was that that the move had already been priced in (this is the typical Wall Street stock line used whenever an asset price does not seem to respond normally to a particular development). If that's really the case then it has been priced in incorrectly. The price of gold and silver are the inverse of the value of the dollar as metals are priced in dollars per ounce. An ounce of either gold or silver is still an ounce of gold or silver and the only thing that's changed is that the supply of dollars has increased. Therefore in a normal market the price of both metals would have increased substantially in terms of dollars per ounce.

In actuality the real actual explanation is that these markets are both being manipulated which is rapidly becoming more and more well known. The important thing to remember is that the manipulation occurs in the paper trading of the futures contracts. The same piece of physical metal has been sold many times setting up a situation where there will likely be a shortage of metal (especially in silver) and a default on the COMEX. In that case the price of precious metals would rise substantially and if you hold physical gold or silver you would benefit. However holders of futures contracts will likely be cash settled at a far lower price. This means they would receive the old price silver was trading at and not the higher price that occurs after the shortage is realized. This is an incredibly important point to understand and if you still have questions I strongly encourage you to post them on Arcadia's Facebook page so we can you understand.

Many people and investors are often frustrated about events like the mortgage bubble and Bernie Madoff's Ponzi scheme, and they wonder why no one ever speaks out in advance. However in actuality in both of those cases there were people who spoke out in advance but they were largely ignored. And again in this case there is a whistleblower named Andrew MaGuire who has not only specifically detailed how the crime occurs but has also informed the CFTC (and recapped it again here), which is the regulatory body governed with ensuring fair and equitable markets for both precious metals. The CFTC has an investigation that has been ongoing for 4 years now, and although one of their commissioners (Bart Chilton) has acknowledged in public as well as in a personal e-mail to me that he is aware that there is manipulation, there has still been no formal response or action by the CFTC. Instead they let a crime that they are aware of continue to occur.

In the financial markets there occur certain occasions where the mind's strength is truly tested. It is difficult for many people to buy gold and silver as an inflation hedge, see endless money printing, and still watch their holdings go down in dollar value. There is the temptation to think that there was something wrong in their decision-making when in fact the price action is just a reflection of short-term liquidity machinations. Many people feel that the banks on Wall Street often take advantage of the public and this specifically is one of the manners in which they do so.

But what separates those who are able to avoid these traps from those who became victims is the willingness to understand the fundamentals and focus on a longer-term perspective. As Gerald Celente pointed out in a recent King World News Interview (Gerald is the author of The Trends Journal one of the top trends forecasters in the world with an impressive track record of forecasting global economic, political, and social trends) the alternatives are to buy Dollars, Euros, or Yen. Does that sound like a better option when the powers in control just said they are going to print endless amounts of each?

This is not how markets should operate and it is a shame that it is occurring, especially when the regulators have direct knowledge of what is going on. As a former equity options specialist on the New York Stock Exchange I would have been quickly arrested if I had ever attempted any of the manipulative actions that are occurring in these markets. Fortunately however there are people like Ted Butler, GATA, and Ed Steer who have all done amazing research in organizing and detailing a small army of evidence that leaves very little mystery of what's really happening.

If you are holding physical gold or silver, or were considering buying either metal you don't need to be panicked by the short term liquidity issues. If you decide against purchasing metals for other reasons then of course you should always do what you feel is in your best interests. However if you are wondering why the metals are lower despite the economic events that have taken place, this time you can finally prepare for one of these scandals before it occurs.

chris@arcadiaeconomics.com

GREEDVILLE LIABILITIES - Mystery in Iraq Are US Munitions to Blame for Basra Birth Defects?

From:  Spiegel Online International
 

Mystery in Iraq Are US Munitions to Blame for Basra Birth Defects?

By Alexander Smoltczyk

Christian Werner/ DER SPIEGEL

The guns have been silent in Iraq for years, but in Basra and Fallujah the number of birth defects and cancer cases is on the rise. Locals believe that American uranium-tipped munitions are to blame and some researchers think they might be right.

It sounds at first as if the old man were drunk. Or perhaps as though he had been reading Greek myths. But Askar Bin Said doesn't read anything, especially not books, and there is no alcohol in Basra. In fact, he says, he saw the creatures he describes with his own eyes: "Some had only one eye in the forehead. Or two heads. One had a tail like a skinned lamb. Another one looked like a perfectly normal child, but with a monkey's face. Or the girl whose legs had grown together, half fish, half human."

ANZEIGE

The babies Askar Bin Said describes were brought to him. He washed them and wrapped them in shrouds, and then he buried them in the dry soil, littered with bits of plastic and can lids, of his own cemetery, which has been in his family for five generations. It's a cemetery only for children. Though they are small, the graves are crowded so tightly together that they are almost on top of one another. They look as if someone had overturned toy wheelbarrows full of cement and then scratched the names and dates of death into it before it hardened. In many cases, there isn't even room for the birth date. But it doesn't really matter, because in most cases the two dates are the same.
There are several thousand graves in the cemetery, and another five to 10 are added every day. The large number of graves is certainly conspicuous, says Bin Said. But, he adds, there "really isn't an explanation" for why there are so many dead and deformed newborn babies in Basra.  MORE

NO tidings of comfort & joy: It's still Hell out in Rockaway

NO tidings of comfort & joy: It's still Hell out in Rockaway
     By Jane Stillwater

     While our government still happily continues to peel big bucks off its wad and shower it down on Wall Street, big business and the "war" machine like it was Christmas for banksters and war-mongers all year long whether they need it or not, all too many hard-working tax-paying victims of Hurricane Sandy out in Staten Island and Rockaway are still getting no help at all.  Zero.  Ziltch.  Nada.

     Nothing is currently being peeled off our government's endless roll of big bucks for them.

     Last week I was riding in a Muni bus over in San Francisco (on my way back from an audition to play a bored office worker in a student film) and on the bus was a very delightful older couple who seemed to have absolutely no cares.

     "Where are you from?" I asked them. 

     "Rockaway," they replied hesitantly.  Rockaway?  OMG!  Not THAT Rockaway?  "Yeah, that's the one.  And, yes, we did live through Hurricane Sandy and, yes, our home was badly damaged and almost destroyed."  http://www.phillipvan.com/filter/PHOTO/BREEZY-POINT

     "So what the freak are you doing out here?"

     "Having fun!  After having survived a personal visit from Sandy, we realized that life is just too short not to enjoy it.  So we came out here to have fun."

     "But did you at least get any help from FEMA?" I asked, figuring that after our government has spent trillions on bailing out Wall Street (where no one hardly ever pays taxes and pretty much lives on Welfare for the Wealthy), then the least that our government could do is send a measly few billion bucks off to bail out afflicted taxpayers in Rockaway.  http://www.phillipvan.com/filter/PHOTO/ROCKAWAY-BEACH

     "Have we received any help from FEMA?  In a word?  No."

     "Not even anything?"  No. 

     "It's been a whole month after Sandy and parts of Rockaway still don't even have electricity now.  Or places for people to go."

     "But did FEMA give you any money to help you out?"  No.

     "We got nothing but an avalanche of paperwork."  They didn't even get bottled water.  "A relative in Wisconsin finally ended up bringing us some."  And they can't go back to their home because the wife has asthma and their house is a hell-hole of black mold right now.  Ah, black mold, the bane of asthma sufferers' existence. 

     "We just took out a 60-day insurance policy from Lloyd's of London on our stuff and left."

     I tried to grill the happy couple for more information on what is happening in Rockaway right now -- and right in the middle of the Christmas and Hanukkah season too -- but they weren't interested in being reminded.  All they wanted to do was forget their worst nightmare and celebrate that they, unlike some of their neighbors, were still alive and had survived one of the fiercest mega-storms ever.

     And as our bus drove on past Chinatown, the happy couple soon had all us passengers singing "Merry Christmas" -- in Chinese.  Brave souls.  I almost cried.

http://vimeo.com/52711779

PS:  And in the spirit of Christmas, what would Jesus have done after Sandy?  He woulda given government money to the happy couple instead of lavishing it all on Wall Street and war.  And I bet He would have also levied a transaction tax on every stock and bond that was bought and sold at the N.Y.S.E and used that money to keep seniors, hurricane victims and the middle class from falling off our RepubliDem-created "fiscal cliff" -- and would have kicked the moneychangers out of the temple too.

    And them Jesus would have removed that tax-exempt status from every single church in America that supported bigotry, the NRA, corporate welfare and war.  "Go Jesus!"  Happy Hanukkah.  Happy Kwanzaa.  Merry Christmas.

(Photos are by Leah Meyerhoff and Phillip Van, two of many New Yorkers who have volunteered their time to help out victims of this horrible mega-death storm)                         

EXTRA:  I just figured out why the Mayans were right about December 21, 2012!  It's the exact day that climate change becomes irreversible.  Duh.

     We now only have a few shopping days left to do something about this.

      Perhaps if we camped out all night in front of Best Buy or Target or WalMart the night before?

Update from Uruguay - Argentina’s Economic Situation, A Problem Or Opportunity?

 From: International Man

Update from Uruguay - Argentina’s Economic Situation, A Problem Or Opportunity? 

By Dean Steinbeck
Located south of the equator, South America is counter-seasonal to the northern hemisphere.  Meaning it’s almost summer in Uruguay!  For the chic resort town of Punta del Este it’s time for the annual influx of Argentines to enjoy its beaches, rent overpriced apartments, and spend lavishly on food and entertainment. Or is it?
In this article we’ll take a quick look at the current economic landscape in Argentina and see why business and property owners in Uruguay are nervous, while investors with cash wait to see what opportunities will arise from Argentina’s next decennial default.

Argentina Continues to Implode

Since my last article on the subject, “Update from Uruguay,” nothing good has happened to Argentina’s economy. In fact, it’s getting uglier by the day. So bad that many top international brands have already fled the country, including Louis Vuitton, Polo Ralph Lauren, Cartier, Yves Saint Laurent, and more.
To cover the country’s fiscal shortfall, the Argentine Central Bank has resorted to issuing increasingly large “transitory advances” (101 billion pesos so far, with more expected before year’s end) to the Argentine treasury. That’s one arm of the Argentine government lending to the other – I’m sure that will end well.
Meanwhile, the Argentine government continues to institute more rigorous capital controls to prevent wealth from fleeing the country. At this point only the richest and most connected Argentines have access to foreign currency markets. Even the purchase of gold has been “suspended.” The end result is that middle class Argentines are trapped into holding Argentine pesos, which everyone fears will be devalued in the near future.
Many government agencies are also unable to access US dollars.  Just recently two Argentine provinces “Pesified” their debt, because the Central Bank did not allow them to access foreign currency markets. The bondholders were obviously not pleased. And given Argentina’s economic situation, how long before it announces the “Pesification” of its own national debt, or perhaps a full default as it did in 2001? If one believes credit rating agencies – something I normally advise against – it appears that default is just around the corner, as top credit rating agency Fitch recently downgraded Argentine debt, fearing a “probable default.”  MORE

The Illegitimacy of The Income Tax System

GREED OUTED - $18M settlement OKd in 'kids for cash' case

$18M settlement OKd in 'kids for cash' case

December 16, 2012|Associated Press

SCRANTON - A federal judge has given final approval to a settlement that will pay nearly $18 million to juveniles who allege they were wrongly incarcerated by corrupt judges in Luzerne County.
The approval granted Friday by U.S. District Judge A. Richard Caputo in Scranton allows attorneys to begin distributing money to about 1,600 teens and parents caught up in the so-called kids-for-cash scandal.
The funds come from real estate developer Robert K. Mericle, who built a pair of for-profit youth detention facilities that replaced the Luzerne County detention center. Two county judges accepted more than $2 million in payments from Mericle and regularly jailed teens at the facilities.  MORE

Connecticut shooting: It is time for “people control”

Connecticut shooting: It is time for “people control”

by Dr. Liane Leedom 

Saturday, 15 December 2012 @ 9:27am

President Bush designated the 1990s as the Decade of the Brain: “to enhance public awareness of the benefits to be derived from brain research” through “appropriate programs, ceremonies, and activities.” Thirteen years after the decade of the brain, the public is now aware that brain function is impaired in mental illness (including psychopathy) and addiction. Research has uncovered the brain regions involved in mental illnesses (including psychopathy) and addiction and the mechanism of action of many helpful medications.

Now this may still be difficult for some people to comprehend but, I say categorically that, “a 20 year old male who kills his mother, several other women and 20 five year old children does not have a normal brain.” I also ask, “when are our laws regarding mental illness going to catch up with our scientific knowledge of same?”

In the wake of the Newtown elementary school shootings, news commentators are talking about gun control and I claim no specific expertise in that matter. However it would be terrible if we didn’t take this time to also think about the problem of “civil rights” and mental illness. We need to institute “people control” in addition to gun control.

Many mental illnesses start in early adulthood, a time when young people are still financially and emotionally dependent on their families. Parents have no real power to compel a teenager into treatment much less a dependent young adult. The most parents can do is to expel the mentally ill teen or adult child from the home. What good does that do? Parents are rendered powerless by the government to help society and their children.

Doesn’t it seem logical that a dependent young person who has a brain problem severe enough to prevent self-care should be required to adhere to the decision making of parents who provide care? As current law stands, family members are not even allowed information about the dependent’s condition if they are in treatment. Does that make sense?
From Love Fraud

A Public Bank for Scotland Could Ensure Economic Sovereignty

 From:  Truthout

A Public Bank for Scotland Could Ensure Economic Sovereignty 

by Ellen Brown

With the Scottish National Party in control, independence is on the table. One way Scotland could exercise true economic sovereignty - and control over the national currency, credit and debt - would be to have its own publicly-owned bank, one that served the interests of the Scottish people.
 
The Royal Bank of Scotland (RBS) and the Bank of Scotland have been pillars of Scotland's economy and culture for more than three centuries. So when the RBS was nationalized by the London-based UK government following the 2008 banking crisis, and the Bank of Scotland was acquired by the London-based Lloyds Bank, it came as a shock to the Scots. They no longer owned their oldest and most venerable banks.

Another surprise turn of events was the triumph of the Scottish National Party (SNP) in the 2011 Scottish parliamentary election. Scotland is still part of the United Kingdom, but it has had its own parliament since 1999, similar to US states. The SNP has rallied around the call for independence from the UK since its founding in 1934, but it was a minority party until the 2011 victory, which gave it an overall majority in the Scottish Parliament.
MORE

REVIEW - The Science of Resilience

The Science of Resilience

Posted: Huffington Post  09/13/2012 3:56 pm

Steven M. Southwick 

Professor of Psychiatry, Post-Traumatic Stress Disorder, and Resilience, Yale Medical School

For nearly twenty years my colleagues and I studied post-traumatic stress disorder and the profound negative psychological, social, and neurobiological impact of traumas such as child abuse, natural disasters, physical and sexual abuse, and combat. We often wondered why some survivors succeeded in overcoming adversity, bouncing back, and continuing on with purposeful lives, while others didn't. Some individuals were clearly more resilient than others.

The American Psychological Association defines resilience as "the process of adapting well in the face of adversity, trauma, tragedy, threats or even significant sources of threat." To answer our question, we turned to three groups of highly resilience individuals: former Vietnam prisoners of war, Special Forces instructors, and civilian men and women who had endured and even thrived after surviving harrowing traumas.
In our book, Resilience: The Science of Mastering Life's Greatest Challenges, Dennis Charney M.D. and I systematically address the topic of resilience. Because resilience is the complex product of genetic, psychological, biological, social and spiritual factors, we investigate resilience from multiple scientific perspectives. We synthesize the latest scientific and popular literature on the topic, describe our own psychological and neurobiological research on resilience, and quote from our in-depth interviews with a large number of highly resilient people.

When we began our study, we assumed that resilience was rare and resilient people were somehow special, perhaps genetically gifted. It turns out, we were wrong. Resilience is common and can be witnessed all around us. Even better, we learned that everyone can learn and train to be more resilient. The key involves knowing how to harness stress and use it to our advantage. After all, stress is necessary for growth. Without it the mind and body weaken and atrophy. 

Let's take a quick look at some genetic and biological factors that have been associated with resilience. While no one gene or gene variation explains resilience, genetic factors do play an important role in determining how an individual responds to stress and trauma. For example, DNA studies have found that polymorphisms (i.e., variations) of genes that regulate the sympathetic nervous system, the hypothalamic-pituitary-adrenal axis, and the serotonin system partially determine whether our biological response to stress is too robust, too muted, or within a range that is optimal for adaptive functioning. In addition, studies of identical twins, where one twin has been exposed to a traumatic stressor such as combat but the other twin has not, have estimated an overall heritability of posttraumatic stress disorder ranging from 32-38%. This means that genes are important but that they are only part of the story.  MORE

New Generation of Drones - scary stuff

How is this for a bit of NANO technology! Scroll Down.......

So you thought this was a mosquito?

Is this a mosquito? No. It's an insect spy drone for urban areas, already in production, funded by the US Government. It can be remotely controlled and is equipped with a camera and a microphone. It can land on you, and it may have the potential to take a DNA sample or leave RFID tracking nanotechnology on your skin. It can fly through an open window, or it can attach to your clothing until you take it in your home. Given their propensity to request macro-sized drones for surveillance, one is left with little doubt that police and military may look into these gadgets next.

HEALTH - Ashtabula – A Sacrifice Zone

Ashtabula – A Sacrifice Zone                                                                                          By Melinda Pillsbury-Foster

Ashtabula, Ohio, is facing problems which could overload their already struggling social welfare services. Across America more people are being forced onto food stamps or facing starvation. Some of these have lost their jobs. Others can no longer work because of disabilities which can be accounted for in other ways.

This appears to be especially true, and becoming more so, in Ashtabula, a small town of 29,000 inhabitants which sits at the epicenter of four superfund sites, one of the most in any county in Ohio today.

While many of the companies responsible for the toxic waste have packed up and moved operations to third world countries, others have moved in, continuing the same practices. From the perspective of such companies, for instance Millennium, the attractions of the area include the history of previous pollution. Although the impact on the people and environment, calculated monetarily, would be enormous the company has routinely paid a tiny stipend, frequently around $50,000 a year in fines to the EPA.

Diseases and conditions which, two generations ago, were barely known, now account for a significant number of the individuals now requiring aid. Among these conditions are Parkinson's and Multiple Sclerosis, both neurological in origin, both becoming far more common in Ashtabula.

From multiple directions and sources indications now affirm something has changed. Tracking the incidence of these devastating diseases could result in nothing but more rapid action to identify the conditions which are increasing their incidence in Americans. Yet legislation which would accomplish this is stalled in Congress. In 2010, the House passed H.R. 1362, a act similar to the stalled Senate bill, S. 425: National Neurological Diseases Surveillance System Act of 2011.

The House bill passed with 206 cosponsors. The nearly identical Senate bill has 14 cosponsors, nine Democrats and five Republicans.. Both would provide for the establishment of permanent national surveillance systems for multiple sclerosis, Parkinson's disease, and other neurological diseases and disorders. But until both pass and are signed into law, this cannot happen.

Having information freely available not only enables better choices for all of us, today it may well spell the difference between life and death for many Americans. Not knowing forces us to struggle in ignorance of facts essential for our health and well-being. And since these facts widely include information collected and retained by those in public service, whose salaries are paid by taxpayers, this calls into question the motives of those working for government.

In Steve Lerner's book, “Sacrifice Zones: The Front Lines of Toxic Chemical Exposure in the United States,” we see the unstated policy of ignoring corporate impact in specific areas for reasons which are never stated, also applied to the lives of the people who live there. The section of the Lerner book, which outlines the impact of Manganese poisoning in Marietta, Ohio, could well have been written about Ashtabula.

By so doing, the joining of corporate interests with the power of the state to externalize their costs and so augment their profits. In a rational world destroying the present value of resources which are common to all of us as the life-spans, intellectual and health of people are diminished and destroyed would be automatically treated as crimes.

Evading the consequences of these crimes by using the institutions of government smacks of a violation under color of law. Now, we must ask ourselves if the present compilation of policies is random, or planned.

A“National Sacrifice Zone” is defined as an area so contaminated or depleted of its resources as to have little or no future use. The term has been applied to areas which are badly polluted through previous corporate abuse of resources which go far beyond any right of ownership which can, rationally, be claimed by those responsible. Of the enormous number of examples presently in the forefront of public consciousness are fracking and manganese poisoning.

But the 'sacrifice zones' go beyond land, air, water, and the environment of which these are elements. It also includes people. In Ashtabula, and across both Ohio and Indiana, the sacrifice made to corporate prosperity included people's health, their lives, and an additional cost has been paid in the slow, but inevitable shock suffered as they individually discovered the institutions, for which we pay, were actually working against them.

As you read Lerner's book you hear the words of ordinary Americans, struggling to understand what is happening to them and why their lives and well being do not matter.

“We thought we had the American dream,” says Lesley Kuhl, who since 2002 has lived with her husband and two young children on a quiet, leafy street in Marietta, Ohio.

Mrs. Kuhl is a Republican, who considered herself conservative, when the threat to her children forced her into action along with both environmental activists and others in her town, like Caroline Beidler, who could no longer ignore the visible impact of pollutants on the health of their families.

Caroline Beidler and her husband, Keith Bailey, a carpenter, had built their “dream home,” in Marietta, Ohio. At the time they were unaware that their little piece of heaven was only four miles, as the crow flies, from the French-owned ferroalloy plant of Eramet Marietta, Inc.

According to Steve Lerner, author of “Sacrifice Zones,” “Eramet (which uses manganese, cadmium, and lead, among other feedstocks, to strengthen steel and purify chromium) releases tons of heavy metal dust into the air. It is one of the county’s top polluters.”

Their efforts transitioned from an informal club which logged the ugly odors carried by the breeze from the plant to increasingly organized efforts to stop the emissions. These struggles began in 2002. They continue today.

Tetrachloroethylene, “a chemical that can cause dizziness, headaches, nausea, unconsciousness, and even death.,” was only one of the pollutants being emitted. Tetrachloroethylene was not even on the long list of chemicals that Eramet admitting having released. In 2004, the company did, “emit 15,000 pounds of chromium compounds into the air and 75,000 pounds into the river and 500,000 pounds of airborne manganese.”

Manganese is a known neurotoxin. Manganese poisoning mimics Parkinson's Disease, among many other conditions.

At first, Beidler was reluctant to make trouble. Over time she realized just how many road blocks existed between the safety of her children. Little help was forthcoming from state regulatory officials.

They discovered how many ways accountability could be evaded by companies which routinely spend money to influence government but never enough to solve the problems they create. Fingers were pointed in every possible direction but little changed.

According to Lerner, “Total releases of toxic chemicals by Eramet reported to federal officials were radically cut from about 12 million pounds when the company was purchased in 2000 to about 6 million pounds of TRI releases in 2004.”

In December 2005 a report by David Pace of the Associated Press listed Eramet as the top factory nationwide “whose emissions created the most potential health risk for residents in the surrounding community.” Washington County was ranked number one for the “highest health risk from industrial pollution in 2000.”

This was the year Lesley Kuhl really confronted the problem.

The group which formed around Beidler and Kuhl, “began to collect information about air quality in their region and make their network of members aware of key regulatory developments, scientific studies, health studies, and emissions at Eramet.”

The bottom-line motive was the continuing threat to children, their children. In December 2005 Mrs. Kuhl read an article in the local newspaper on the impact of elevated levels of air-borne heavy metals their possible impact on the development of the brains of very young children. The Kuhl children had suffered numerous sinus infections that had to be treated with antibiotics, and one of whom was diagnosed with a developmental disorder. Loss of IQ points was also listed as a possibility.

Further research revealed older people could experience mood and movement problems from exposure. Suggestions for a 'study,' to take three years, was not a solution.

Also, the families realized even moving was no guarantee of a safe haven. How could they know where was safe? Their children began to be tested for manganese exposure.

The Kuhls and others continued to be shocked at the disregard for the health and well being of their children. Their knowledge of the problem, and how long it had been known, increased.

Dick Wittberg, another resident, who heads the Mid-Ohio Valley Health Department, had carried out a pilot study in the late 1990s. The study compared the ability of children in Marietta to perform physical tasks and answer academic questions. These were compared the results from Marietta with, “a control sample of children from a similar-sized town in Athens, Ohio, located forty-five miles away.”

A battery of 13 tests were administered to fourth-graders in both cities. The children were matched, “for age, sex, and parental education. The tests measured such things as educational proficiency, balance, visual contrast sensitivity, and short-term memory.”

The results were disturbing: “across the board: the Marietta youngsters scored significantly lower on the tests than did those from Athens.” In his opinion, “the study points to some neurological differences and one has to suspect manganese. Nobody knows, for kids, how much [exposure] is too much.”

The stalling tactics continue from Aramet.

Protocols for handling potential pollutants, thus eliminating the danger of impact exist today.

It is time to get specific about what protocols must be applied and on the issue of liability.

This is how a free market is applied. You can tell if it is a free market because if government can intervene to limit liability or allow acts which are, by their nature criminal, what you are seeing is corporate fascism.

As bad as the situation is in Marietta, what is facing Ashtabula could be far worse. The toxic releases of Manganese are double what is present in Marietta, the source of pollution, Millennium, is far closer to population centers, and a clock, of which we have only recently become aware, is ticking toward a point of no return for many people.

A study, "Parkinsonism Induced by Chronic Manganese Intoxication– An Experience in Taiwan," by Chin-Chang Huang, MD, includes the troubling facts, “Excessive manganese exposure may induce a neurological syndrome called manganism, which is similar to Parkinson’s disease (PD). However, close observation of patients with manganism reveals a clinical disease entity different from PD, not only in the clinical manifestations, but also in therapeutic responses. “ “...after long-term follow-up studies, patients with manganism showed prominent deterioration in the parkinsonian symptoms during the initial 5-10 years, followed by a plateau during the following 10 years.”

The summary, in large part quoted above, ends with, “Although typical patients with manganism are different from patients with PD, the potential risk of inhaling welding fumes, which may accelerate the onset of PD or even induce PD, has been raised during recent years. This controversial topic requires further investigation."

The results of this study should be considered along with this graph showing money spent on lobbying by the American Chemical Council. Source: Open Secrets While it is nearly impossible to know how the money was spent the timing is telling. 

 

Also available to influence legislators are the many corporations who readily donate to non-profits which, people believe, are working solely to protect them. These include, “3M, Amoco, Chevron, Dow Chemical, Exxon, General Motors, Occidental Petroleum, Philip Morris, Proctor & Gamble and W.R. Grace,” according to Integrity in Science, who routinely tracks such relationships.

The people of Ashtabula are not inhaling fumes from working as welding. They are getting it directly and it is time action was taken to establish real standards backed up by real disincentives as those impacted are compensated. In so doing, Ashtabula can begin the process of returning America to a nation of law and justice.

For more information contact Ashtabula Renewal – The Clean-Up ashtabulanenewal.org 

Melinda Pillsbury-Foster, Organizing Director, David Lincoln, Technical Director