Larry Summers and the Secret “End-Game” Memo

GregPalast.com

August 26, 2013


When a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn’t believe it.

The Memo confirmed every conspiracy freak’s fantasy: that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet. When you see 26.3% unemployment in Spain, desperation and hunger in Greece, riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo, the genesis of the blood and tears. The Treasury official playing the bankers’ secret End Game was Larry Summers. Today, Summers is Barack Obama’s leading choice for Chairman of the US Federal Reserve, the world’s central bank. If the confidential memo is authentic, then Summers shouldn’t be serving on the Fed, he should be serving hard time in some dungeon reserved for the criminally insane of the finance world.

The memo is authentic.

To get that confirmation, I would have to fly to Geneva and wangle a meeting with the Secretary General of the World Trade Organization, Pascal Lamy. I did. Lamy, the Generalissimo of Globalization, told me,

“The WTO was not created as some dark cabal of multinationals secretly cooking plots against the people…. We don’t have cigar-smoking, rich, crazy bankers negotiating.”

Then I showed him the memo.

It begins with Summers’ flunky, Timothy Geithner, reminding his boss to call the then most powerful CEOs on the planet and get them to order their lobbyist armies to march:

“As we enter the end-game of the WTO financial services negotiations, I believe it would be a good idea for you to touch base with the CEOs….”

To avoid Summers having to call his office to get the phone numbers (which, under US law, would have to appear on public logs), Geithner listed their private lines. And here they are:

Goldman Sachs: John Corzine (212)902-8281

Merrill Lynch: David Kamanski (212)449-6868

Bank of America, David Coulter (415)622-2255

Citibank: John Reed (212)559-2732

Chase Manhattan: Walter Shipley (212)270-1380

Lamy was right: They don’t smoke cigars. Go ahead and dial them. I did, and sure enough, got a cheery personal hello from Reed–cheery until I revealed I wasn’t Larry Summers. (Note: The other numbers were swiftly disconnected. And Corzine can’t be reached while he faces criminal charges.)

It’s not the little cabal of confabs held by Summers and the banksters that’s so troubling. The horror is in the purpose of the “end game” itself.

Let me explain:

The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to de-regulate banks. That required, first, repeal of the Glass-Steagall Act to dismantle the barrier between commercial banks and investment banks. It was like replacing bank vaults with roulette wheels.

Second, the banks wanted the right to play a new high-risk game: “derivatives trading.” JP Morgan alone would soon carry $88 trillion of these pseudo-securities on its books as “assets.”

Deputy Treasury Secretary Summers (soon to replace Rubin as Secretary) body-blocked any attempt to control derivatives.

But what was the use of turning US banks into derivatives casinos if money would flee to nations with safer banking laws?

The answer conceived by the Big Bank Five: eliminate controls on banks in every nation on the planet – in one single move. It was as brilliant as it was insanely dangerous.

How could they pull off this mad caper? The bankers’ and Summers’ game was to use the Financial Services Agreement, an abstruse and benign addendum to the international trade agreements policed by the World Trade Organization.

Until the bankers began their play, the WTO agreements dealt simply with trade in goods–that is, my cars for your bananas. The new rules ginned-up by Summers and the banks would force all nations to accept trade in “bads” – toxic assets like financial derivatives.

Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products.”

And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.

The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organization.

Bankers Go Bananas

Why in the world would any nation agree to let its banking system be boarded and seized by financial pirates like JP Morgan?

The answer, in the case of Ecuador, was bananas. Ecuador was truly a banana republic. The yellow fruit was that nation’s life-and-death source of hard currency. If it refused to sign the new FSA, Ecuador could feed its bananas to the monkeys and go back into bankruptcy. Ecuador signed.

And so on–with every single nation bullied into signing.

Every nation but one, I should say. Brazil’s new President, Inacio Lula da Silva, refused. In retaliation, Brazil was threatened with a virtual embargo of its products by the European Union’s Trade Commissioner, one Peter Mandelson, according to another confidential memo I got my hands on. But Lula’s refusenik stance paid off for Brazil which, alone among Western nations, survived and thrived during the 2007-9 bank crisis.

China signed–but got its pound of flesh in return. It opened its banking sector a crack in return for access and control of the US auto parts and other markets. (Swiftly, two million US jobs shifted to China.)

The new FSA pulled the lid off the Pandora’s box of worldwide derivatives trade. Among the notorious transactions legalized: Goldman Sachs (where Treasury Secretary Rubin had been Co-Chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation. Ecuador, its own banking sector de-regulated and demolished, exploded into riots. Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans. Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim–and the continent is now being sold off in tiny, cheap pieces to Germany.

Of course, it was not just threats that sold the FSA, but temptation as well. After all, every evil starts with one bite of an apple offered by a snake. The apple: The gleaming piles of lucre hidden in the FSA for local elites. The snake was named Larry.

Does all this evil and pain flow from a single memo? Of course not: the evil was The Game itself, as played by the banker clique. The memo only revealed their game-plan for checkmate.

And the memo reveals a lot about Summers and Obama.

While billions of sorry souls are still hurting from worldwide banker-made disaster, Rubin and Summers didn’t do too badly. Rubin’s deregulation of banks had permitted the creation of a financial monstrosity called “Citigroup.” Within weeks of leaving office, Rubin was named director, then Chairman of Citigroup—which went bankrupt while managing to pay Rubin a total of $126 million.

Then Rubin took on another post: as key campaign benefactor to a young State Senator, Barack Obama. Only days after his election as President, Obama, at Rubin’s insistence, gave Summers the odd post of US “Economics Tsar” and made Geithner his Tsarina (that is, Secretary of Treasury). In 2010, Summers gave up his royalist robes to return to “consulting” for Citibank and other creatures of bank deregulation whose payments have raised Summers’ net worth by $31 million since the “end-game” memo.

That Obama would, at Robert Rubin’s demand, now choose Summers to run the Federal Reserve Board means that, unfortunately, we are far from the end of the game.

America Totally Discredited

 Paul Craig Roberts
August 31, 2013

A foolish President Obama and moronic Secretary of State Kerry have handed the United States government its worst diplomatic defeat in history and destroyed the credibility of the Office of the President, the Department of State, and the entire executive branch. All are exposed as a collection of third-rate liars.

Intoxicated with hubris from past successful lies and deceptions used to destroy Iraq and Libya, Obama thought the US “superpower,” the “exceptional” and “indispensable” country, could pull it off again, this time in Syria.

But the rest of the world has learned to avoid Washington’s rush to war when there is no evidence. A foolish Obama was pushed far out on the limb by an incompetent and untrustworthy National Security Advisor, Susan Rice, and the pack of neoconservatives that support her, and the British Parliament cut the limb off.

What kind of fool would put himself in that vulnerable position?

Now Obama stands alone, isolated, trying to back away from his threat to attack without authorization from anyone–not from the UN, not from NATO, not from Congress who he ignored–a sovereign country. Under the Nuremberg Standard military aggression is a war crime. Washington has until now got away with its war crimes by cloaking them in UN or NATO approval. Despite these “approvals,” they remain war crimes.

But his National Security Advisor and the neocon warmongers are telling him that he must prove that he is a Real Man who can stand alone and commit war crimes all by himself without orchestrated cover from the UN or NATO or a cowardly US Congress. It is up to Obama, they insist, to establish for all time that the President of the United States is above all law. He, and he alone is the “decider,” the Caesar, who determines what is permissible. The Caesar of the “sole superpower” must now assert his authority over all law or Washington’s hegemony over the world is lost.

As I noted in an earlier column today, if Obama goes it alone, he will be harassed for the rest of his life as a war criminal who dares not leave the US. Indeed, a looming economic collapse could so alter the power and attitude of the United States that Obama could find himself brought to justice for his war crimes.

Regardless, the United States government has lost its credibility throughout the world and will never regain it, unless the Bush and Obama regimes are arrested and put on trial for their war crimes.

Obama’s destruction of US credibility goes far beyond diplomacy. It is likely that this autumn or winter, and almost certainly in 2014, the US will face severe economic crisis.

The long-term abuse of the US dollar’s reserve currency role by the Federal Reserve and US Treasury, the never-ending issuance of new debt and printing of dollars to finance it, the focus of US economic policy on bailing out the “banks too big to fail” regardless of the adverse impact on domestic and world economies and holders of US Treasury debt, the awaiting political crisis of the unresolved deficit and debt ceiling limit that will greet Congress’ return to Washington in September, collapsing job opportunities and a sinking economy all together present the government in Washington with a crisis that is too large for the available intelligence, knowledge, and courage to master.

When the proverbial hits the fan, the incompetent and corrupt Federal Reserve and the incompetent and corrupt US Treasury will have no more credibility than Obama and John Kerry.

The rest of the world–especially Washington’s bullied NATO puppet states–will take great delight in the discomfort of “the world’s sole superpower” that has been running on hubris ever since the Soviet collapse.

The world is not going to bail out Washington, now universally hated, with currency swaps, more loans, and foreign aid. Americans are going to pay heavily for their negligence, their inattention, their unconcern, and their ignorant belief that nothing can go wrong for them and that anything that does is temporary.

Two decades of jobs offshoring has left the US with a third world labor force employed in lowly paid domestic nontradable services, a workforce comparable to India’s of 40 years ago. Already the “world’s sole superpower” is afflicted with a large percentage of its population dependent on government welfare for survival. As the economy closes down, the government’s ability to meet the rising demands of survival diminishes. The rich will demand that the poor be sacrificed in the interest of the rich. And the political parties will comply.

Is this the reason that Homeland Security, a Nazi Gestapo institution, now has a large and growing para-military force equipped with tanks, drones, and billions of rounds of ammunition?

How long will it be before American citizens are shot down in their streets by “their” government as occurs frequently in Washington’s close allies in Egypt, Turkey, Bahrain?

Americans have neglected the requirements of liberty. Americans are so patriotic and so gullible that all the government has to do is to wrap itself in the flag, and the people, or too many of them, believe whatever lie the government tells. And the gullible people will defend the government’s lie to their death, indeed, to the death of the entire world.

If Americans keep believing the government’s lies, they have no future. If truth be known, Americans have already lost a livable future. The neocons’ “American Century” is over before it begun.

I have heard from educated and aware friends that the presstitute media on the evening news are beating the drums for war. This shows what paid whores the US media is and their total disconnect from reality. Anyone who wastes their time on the US media is a brainwashed idiot, a danger to humanity.

Is the White House idiot going to be a victim of his own careless presidential appointments?

Does he have no one to tell him how to escape the dilemma his moronic Secretary of State and National Security Advisor have put him in? Someone needs to tell the WH Fool that he must say that he accepts the conclusion of the world community that there is not sufficient evidence for launching a military attack on Syria and killing even more people than were killed in the alleged, but unproven, chemical attack, and that he awaits further and better evidence.

God help the moron and the unfortunate country that the fool represents.

Wrecking the Earth: Fracking has grave radiation risks few talk about

by Christopher Busby, who is an expert on the health effects of ionizing radiation and Scientific Secretary of the European Committee on Radiation Risk.

RT - August 28, 2013


Environmentalists point to various dangerous consequences of using fracking technology, but none can be compared to the issue of radiation exposure and radioactive contamination of the development areas it poses.

UK government plans to use fracking technology in populated areas of the country recently drew hundreds of people to the streets in protests. Protesters pointed to the dangerous example of the US, the worldwide leader in fracking, where hydraulic fracturing (which consumes vast amounts of water) led to areas of Arkansas, Colorado, New Mexico, Oklahoma, Texas, Utah and Wyoming facing a dire water crisis.

Fracking involves toxic chemicals being lowered into kilometer-deep holes drilled in the ground to isolate gas and oil from shale. The toxic chemicals can then float into lakes and rivers or contaminate the ground. Also, fracking produces a disproportionate amount of waste, including radioactive water, which then has to be dumped somewhere.

The key to fracking

Uranium is the key element to fracking, or hydraulic fracturing, to use its proper name. In the real-world version of Phineas Fogg’s “Eighty Days Around the World,” burning the ship’s masts and furniture to make steam, governments are now encouraging the oil and gas merchants to blast their way deep into the Earth to squeeze the last ounce of oil and gas from that poor creature. But there will be a terrible revenge. Locked up in the strata into which they pump the pressurized process water, to fracture and thus create the huge surface area sponge which will yield up its cargo of gas and oil, is a monstrous amount of natural uranium and its deadly daughter Radium-226. And vast amounts of the radioactive alpha emitting gas Radon-222, and its own daughters Bismuth 214, Lead-210 and the alpha emitter Polonium-210. Remember Polonium-210? That was the material used when a few millionths of a gram poisoned ex-Russian agent Alexander Litvinenko.

Deep down in the earth, there is a lot of radioactivity, which is safe enough, so long as it is not brought up to the surface. The technical term is NORM (Naturally Occurring Radioactive Material). When it is brought to the surface it becomes Technologically Enhanced, or TENORM, and it is a serious health problem near oil wells and gas production sites. It is in the production water, in the oil, in the gas, around the production sites, the groundwater, in the pipes and tanks – and in your kitchen.

The easy oil and gas deposits are those where there are subterranean reservoirs, and the oil and gas can obtained by drilling into the reservoir and then pumping down water to displace the oil back up the drill pipe. These are now running out, or are owned by people who control the flow and the price. But there are many other deposits, where the resource is spread throughout the rock, like water in a sponge. Fracking comprises any method employed to break up the solid rock, shale or sandstone to provide channels that allow the oil or gas in the strata to more easily be pumped to the surface. Fracking is not a new idea, but there are some new technologies being employed that make it easy to obtain gas economically from such hitherto unassailable rock sources. For reasons which I will outline, this development has some worrying aspects.

The gas or oil will not normally be available because it is trapped in and interspersed through solid rock. To get it out you have to drill horizontally along the solid organic clay material, the shale, (or whatever oil-bearing rock type is there) and then break that unto small pieces in various ways so that the gas or oil can be pushed by the water you pump in back to the well pipe and up to the surface. The methods of breaking up the rock and holding the subsequent channels apart vary; put together they are “fracking”.

The shale strata are between 1,000 and 8,000 feet deep. Owing the weight of rock above, the pressure on the rocks in the gas bearing strata at these depths is enormous. The drill has to pass a tube (the “gun”) along the stratum for as long a length as possible and then this has to become perforated along its length with holes that allow the gas or oil to get into the tube and up to the surface.

Historically difficult. But technology has come to the rescue in the manifestation of specially designed explosives called “shaped charges.” These are cone-shaped dense metal explosive devices that send the explosive energy in an enormously powerful directed jet of metal atoms that act as a drill and melt the rock or shale along the length of the jet. This creates a radially distributed set of channels along and around the length of the drill tube, in the shape of a bottle-cleaning brush. Once this is done, water containing a whole range of acids and chemical additives is injected under immense pressure and this is followed up by small balls and sand or grit, termed “proppant” like the pit props in a mine, to hold the channels formed open. The extreme pressure pushes the weight of the upper layers of rock upwards and releases the tension in the strata where the gas is trapped. It has been noticed that the effect of all this on geophysical stability of the local deep earth results in small earth tremors and shocks, noticed by people living nearby. But the real cause of these tremors may be more sinister.

Nuclear implications

The metal which was formerly employed for the shaped charge head or “gun” was copper. This creates a pressure of 300,000 atmospheres which pushes the rock aside by plastic deformation. But in 1984 a US patent (US 4441428) was filed by one Thomas Wilson, entitled “Conical Shaped Charge Liner of Depleted Uranium.” The patent begins: “this invention relates to a novel blasting device especially adapted for drilling oil and gas wells.” Wilson records that DU is 5-times as efficient as copper in terms of the length of the jetted hole, creating a pressure of 600,000 atmospheres. Because of the uranium’s greater chemical reactivity it actually creates new chemical compounds with the material in the rock (and the oil and gas).

The DU cuts through the rock like butter, just as the military versions of this technology, which we believe has been fitted to missiles can cut through concrete reinforced bunkers. The multiple-shaped charge explosions will certainly shake the ground. The earth tremors and earthquakes are then not so hard to explain. Where do the process water acids, chemical compounds end up? At the surface? In the local aquifer? In the local rivers? Yes. But where to the DU nanoparticles from the shaped charge end up? Perhaps the mix of process water and chemicals spilled at the surface. Perhaps in the oil or in the gas. In your kitchen? No one looks, but someone should, since we know from the Iraq wars what these things can do to human health.

In case you might think this is all scaremongering, academic and unrelated to fracking, another patent was filed more recently in 2011 (US Patent 20110000669) by Halliburton (think: oil, gas, armaments, missiles, Dick Cheney) entitled “Perforating gun assembly and method for controlling wellbore pressure during perforating”. The patent specifically refers to Depleted Uranium.

So not only is there a lot of natural radioactive material surfacing in the gas or oil stream, and the production water, there is the possibility also a lot of unnatural radioactivity coming up from the DU shaped charges. And besides the fact that Depleted Uranium is the most efficient of these shaped charge metals, let’s not forget the attraction to the US nuclear industry of a way of getting rid of its vast stocks of Depleted Uranium, or even natural Uranium, or even nuclear waste. I mean, who is going to look at the radioactivity in the process water? It will be radioactive from the Radium and Radon daughters anyway. You would need to carry out some sophisticated analysis to see if it contained any nasty man-made radionuclides, especially DU nanoparticles. Who will do that?

Fracking contamination

The issue of natural radioactivity and fracking gas was raised by my friend, Marvin Resnikoff, who was an expert on the NORM cases. He has examined the fracking situation in relation to the exploitation of the Marcellus Shale gas, New York State. He pointed out that there were two critical issues. There is the concentration of Radium-226 in the rock. Then there is the length of time it takes for the gas to get to the kitchen.

Radon has a half-life of about four days, and so if the gas takes a short time to get from the well production site to the consumer, then levels in the kitchen can be significant. He calculated that there would be between 1,000 and 30,000 extra lung cancers in New York State from such an exposure. And that no one in environmental protection agencies had paid any attention to this issue.

This is certainly of concern, but there are other issues. The process water (and chemicals) certainly contaminates the areas around the gas production machinery. In a recent court case I was involved with in Louisiana there was a gas distribution plant that was scarily radioactive, and the land around it was also radioactive. I also studied oil well production areas in a Kentucky court case. The process water dissolves Radium-226 and this precipitates as scale on the pipes and tanks and is left on the ground near the wellheads and distribution facilities. The transfer pipes are radioactive. One of the worst radionuclides left behind is the Radon daughter Lead-210 which has a longish half-life (22 years) and builds up in these situations as a fine dust. It gets into the gas stream as nanoparticles and I believe it remains in the gas stream. It decays to Bismuth-210 which immediately decays to the alpha emitter Polonium-210 with a half-life of 138 days.

Fracking will increase the amount of Radon in the extracted gas. Why? Because of the high surface area created by smashing up the rock. In the simple gas or oil well there is a big cavern. The radon seeps out of the wall which has a surface area equal to that of the cavern wall. But in the case of the fracked strata, the surface area out of which the Radon can seep is enormously enhanced. So a faster Radon transfer can occur.

Burning our ship

So I conclude that fracking carries with it some serious health issues relating to radiation exposure and local contamination, issues which, as Marvin Resnikoff points out in his articles, have not been addressed properly (or at all) by the environmental impact statements published by the operators, or by the Environmental Protection Agency in the USA. The well heads and distribution areas will become radioactively contaminated. Isolated wells along the south coast of England, the Texas-ification of Sussex being encouraged by Prime Minister David Cameron, will not be like windmills. The contamination from the process water will get into the groundwater and drinking water. And let’s not forget the Depleted Uranium.

I don’t want to be all negative: oil and gas are valuable resources, and techniques for increasing availability have to be applauded, even if examined with more caution than they have been. But let’s finish by stepping back from all of this and asking what it’s for. The short answer, of course, is that it’s for money and cheaper energy, security, independence in energy terms from remote suppliers. But we know what it’s really for. It is the necessary fuel for the continuing economic system, the market-forces-driven, short-attention-span, continued global extravaganza of manufacturing, working, buying and selling that life has now become. Of course this can’t last since (fracking or not) the fossil fuel (and other fuels) will eventually run out, and/or the limited biosphere will die off from the toxic waste products of the activity, something that is currently happening at a frightening rate. But fracking will buy them more time.

Changes in Mean Hourly Wages

The Leveraged Buyout of America

Monday, August 26, 2013 by Common Dreams

Giant bank holding companies now own airports, toll roads, and ports; control power plants; and store and hoard vast quantities of commodities of all sorts. They are systematically buying up or gaining control of the essential lifelines of the economy. How have they pulled this off, and where have they gotten the money?

by Ellen Brown

In a letter to Federal Reserve Chairman Ben Bernanke dated June 27, 2013, US Representative Alan Grayson and three co-signers expressed concern about the expansion of large banks into what have traditionally been non-financial commercial spheres. Specifically:

[W]e are concerned about how large banks have recently expanded their businesses into such fields as electric power production, oil refining and distribution, owning and operating of public assets such as ports and airports, and even uranium mining.

After listing some disturbing examples, they observed:

According to legal scholar Saule Omarova, over the past five years, there has been a “quiet transformation of U.S. financial holding companies.” These financial services companies have become global merchants that seek to extract rent from any commercial or financial business activity within their reach. They have used legal authority in Graham-Leach-Bliley to subvert the “foundational principle of separation of banking from commerce”. . . .

It seems like there is a significant macro-economic risk in having a massive entity like, say JP Morgan, both issuing credit cards and mortgages, managing municipal bond offerings, selling gasoline and electric power, running large oil tankers, trading derivatives, and owning and operating airports, in multiple countries.

A “macro” risk indeed – not just to our economy but to our democracy and our individual and national sovereignty. Giant banks are buying up our country’s infrastructure – the power and supply chains that are vital to the economy. Aren’t there rules against that? And where are the banks getting the money?

How Banks Launder Money Through the Repo Market

In an illuminating series of articles on Seeking Alpha titled “Repoed!”, Colin Lokey argues that the investment arms of large Wall Street banks are using their “excess” deposits – the excess of deposits over loans – as collateral for borrowing in the repo market. Repos, or “repurchase agreements,” are used to raise short-term capital. Securities are sold to investors overnight and repurchased the next day, usually day after day.

The deposit-to-loan gap for all US banks is now about $2 trillion, and nearly half of this gap is in Bank of America, JP Morgan Chase, and Wells Fargo alone. It seems that the largest banks are using the majority of their deposits (along with the Federal Reserve’s quantitative easing dollars) not to back loans to individuals and businesses but to borrow for their own trading. Buying assets with borrowed money is called a “leveraged buyout.” The banks are leveraging our money to buy up ports, airports, toll roads, power, and massive stores of commodities.

Using these excess deposits directly for their own speculative trading would be blatantly illegal, but the banks have been able to avoid the appearance of impropriety by borrowing from the repo market. (See my earlier article here.) The banks’ excess deposits are first used to purchase Treasury bonds, agency securities, and other highly liquid, “safe” securities. These liquid assets are then pledged as collateral in repo transactions, allowing the banks to get “clean” cash to invest as they please. They can channel this laundered money into risky assets such as derivatives, corporate bonds, and equities (stock).

That means they can buy up companies. Lokey writes, “It is common knowledge that prop [proprietary] trading desks at banks can and do invest in a variety of assets, including stocks.” Prop trading desks invest for the banks’ own accounts. This was something that depository banks were forbidden to do by the New Deal-era Glass-Steagall Act but that was allowed in 1999 by the Gramm-Leach-Bliley Act, which repealed those portions of Glass-Steagall.

The result has been a massively risky $700-plus trillion speculative derivatives bubble. Lokey quotes from an article by Bill Frezza in the January 2013 Huffington Post titled “Too-Big-To-Fail Banks Gamble With Bernanke Bucks“:

If you think [the cash cushion from excess deposits] makes the banks less vulnerable to shock, think again. Much of this balance sheet cash has been hypothecated in the repo market, laundered through the off-the-books shadow banking system. This allows the proprietary trading desks at these “banks” to use that cash as collateral to take out loans to gamble with. In a process called hyper-hypothecation this pledged collateral gets pyramided, creating a ticking time bomb ready to go kablooey when the next panic comes around.

That Explains the Mountain of Excess Reserves

Historically, banks have attempted to maintain a loan-to-deposit ratio of close to 100%, meaning they were “fully loaned up” and making money on their deposits. Today, however, that ratio is only 72% on average; and for the big derivative banks, it is much lower. For JPMorgan, it is only 31%. The unlent portion represents the “excess deposits” available to be tapped as collateral for the repo market.

The Fed’s quantitative easing contributes to this collateral pool by converting less-liquid mortgage-backed securities into cash in the banks’ reserve accounts. This cash is not something the banks can spend for their own proprietary trading, but they can invest it in “safe” securities – Treasuries and similar securities that are also the sort of collateral acceptable in the repo market. Using this repo collateral, the banks can then acquire the laundered cash with which they can invest or speculate for their own accounts.

Lokey notes that US Treasuries are now being bought by banks in record quantities. These bonds stay on the banks’ books for Fed supervision purposes, even as they are being pledged to other parties to get cash via repo. The fact that such pledging is going on can be determined from the banks’ balance sheets, but it takes some detective work. Explaining the intricacies of this process, the evidence that it is being done, and how it is hidden in plain sight takes Lokey three articles, to which the reader is referred. Suffice it to say here that he makes a compelling case.

Can They Do That?

Countering the argument that “banks can’t really do anything with their excess reserves” and that “there is no evidence that they are being rehypothecated,” Lokey points to data coming to light in conjunction with JPMorgan’s $6 billion “London Whale” fiasco. He calls it “clear-cut proof that banks trade stocks (and virtually everything else) with excess deposits.” JPM’s London-based Chief Investment Office [CIO] reported:

JPMorgan’s businesses take in more in deposits that they make in loans and, as a result, the Firm has excess cash that must be invested to meet future liquidity needs and provide a reasonable return. The primary reponsibility of CIO, working with JPMorgan’s Treasury, is to manage this excess cash. CIO invests the bulk of JPMorgan’s excess cash in high credit quality, fixed income securities, such as municipal bonds, whole loans, and asset-backed securities, mortgage backed securities, corporate securities, sovereign securities, and collateralized loan obligations.

Lokey comments:

That passage is unequivocal — it is as unambiguous as it could possibly be. JPMorgan invests excess deposits in a variety of assets for its own account and as the above clearly indicates, there isn’t much they won’t invest those deposits in. Sure, the first things mentioned are “high quality fixed income securities,” but by the end of the list, deposits are being invested in corporate securities [stock] and CLOs [collateralized loan obligations]. . . . [T]he idea that deposits are invested only in Treasury bonds, agencies, or derivatives related to such “risk free” securities is patently false.

He adds:

[I]t is no coincidence that stocks have rallied as the Fed has pumped money into the coffers of the primary dealers while ICI data shows retail investors have pulled nearly a half trillion from U.S. equity funds over the same period. It is the banks that are propping stocks.

Another Argument for Public Banking

All this helps explain why the largest Wall Street banks have radically scaled back their lending to the local economy. It appears that JPMorgan’s loan-to-deposit ratio is only 31% not because the bank could find no creditworthy borrowers for the other 69% but because it can profit more from buying airports and commodities through its prop trading desk than from making loans to small local businesses.

Small and medium-sized businesses are responsible for creating most of the jobs in the economy, and they are struggling today to get the credit they need to operate. That is one of many reasons that banking needs to be a public utility. Publicly-owned banks can direct credit where it is needed in the local economy; can protect public funds from confiscation through “bail-ins” resulting from bad gambling in by big derivative banks; and can augment public coffers with banking revenues, allowing local governments to cut taxes, add services, and salvage public assets from fire-sale privatization. Publicly-owned banks have a long and successful history, and recent studies have found them to be the safest in the world.

As Representative Grayson and co-signers observed in their letter to Chairman Bernanke, the banking system is now dominated by “global merchants that seek to extract rent from any commercial or financial business activity within their reach.” They represent a return to a feudal landlord economy of unearned profits from rent-seeking. We need a banking system that focuses not on casino profiteering or feudal rent-seeking but on promoting economic and social well-being; and that is the mandate of the public banking sector globally.

US Requested Tens of Thousands of Facebook Users' Data in Just 6 Months

Tuesday, August 27, 2013 by Common Dreams
Report welcome, but "governments don't necessarily need intermediaries like Facebook, Google, and Microsoft to get our data."
- Andrea Germanos, staff writer

The U.S. requested data on between 20,000 and 21,000 Facebook users during the first six months of 2013, the social networking site announced on Tuesday.

"Whereas transparency reports detail lawful access requests, we are living in a world where governments exploit over-permissive, vague and outdated laws with impunity."

Facebook revealed the number of requests as part of its first-ever Global Government Requests Report.

While over 70 countries made user requests during the six-month period, the vast majority were from the U.S.. India came in second, requesting data on 4,144 users, and the U.K. came in third, requesting data on 2,337 users.

"Unlike other countries, which had an exact figure, the US data was given as a range due to it being forbidden for companies to disclose how many requests they have had," BBC News reported.

Facebook stated, "We continue to push the United States government to allow more transparency regarding these requests, including specific numbers and types of national security-related requests. We will publish updated information for the United States as soon as we obtain legal authorization to do so."

Though the "vast majority of these requests relate to criminal cases, such as robberies or kidnappings," the report includes "both criminal and national security requests," Facebook noted.

Writing on Facebook's new transparency information, TechCrunch reported Tuesday:

The “Five Eyes” group of nations that share signal intelligence (United Kingdom, the United States, Canada, Australia, and New Zealand) had at least 100 requests in the first six months of the year. New Zealand and Canada included. That matters. It indicates that countries participating in mass surveillance do so in every way possible. I think that the number of requests helps us understand the zeal of these nations to look into private activity.

UK-based surveillance watchdog Privacy International welcomed Facebook's transparency report, but said that greater legal protections must in place given the "terrifying reality—that governments don't necessarily need intermediaries like Facebook, Google, and Microsoft to get our data." They said in a statement:

we are left with a disturbingly hollow feeling regarding Facebook's gesture, and it has little to do with Facebook itself. Since documents leaked by Edward Snowden have been published and analysed, the veil has been lifted on what information governments actually collect about us. [...]

Whereas transparency reports detail lawful access requests, we are living in a world where governments exploit over-permissive, vague and outdated laws with impunity. What is needed is a new strong legal framework that all governments must abide by. Until then companies like Facebook are left with the burden of having to determine what information may be 'lawfully' demanded by each country, and deciding what they can or cannot release. This is too much to ask of these companies, and too great a trust to be placed in them.

In Rush to Strike Syria, US Tried to Derail UN Probe

Wednesday, August 28, 2013 by Inter Press Service
by Gareth Porter

WASHINGTON - After initially insisting that Syria give United Nations investigators unimpeded access to the site of an alleged nerve gas attack, the administration of President Barack Obama reversed its position on Sunday and tried unsuccessfully to get the U.N. to call off its investigation.

The administration’s reversal, which came within hours of the deal reached between Syria and the U.N., was reported by the Wall Street Journal Monday and effectively confirmed by a State Department spokesperson later that day.

In his press appearance Monday, Secretary of State John Kerry, who intervened with U.N. Secretary-General Ban Ki-Moon to call off the investigation, dismissed the U.N. investigation as coming too late to obtain valid evidence on the attack that Syrian opposition sources claimed killed as many 1,300 people.

The sudden reversal and overt hostility toward the U.N. investigation, which coincides with indications that the administration is planning a major military strike against Syria in the coming days, suggests that the administration sees the U.N. as hindering its plans for an attack.

Kerry asserted Monday that he had warned Syrian Foreign Minister Moallem last Thursday that Syria had to give the U.N. team immediate access to the site and stop the shelling there, which he said was “systematically destroying evidence”. He called the Syria-U.N. deal to allow investigators unrestricted access “too late to be credible”.

After the deal was announced on Sunday, however, Kerry pushed Ban in a phone call to call off the investigation completely.

The Wall Street Journal reported the pressure on Ban without mentioning Kerry by name. It said unnamed “U.S. officials” had told the secretary-general that it was “no longer safe for the inspectors to remain in Syria and that their mission was pointless.”

But Ban, who has generally been regarded as a pliable instrument of U.S. policy, refused to withdraw the U.N. team and instead “stood firm on principle”, the Journal reported. He was said to have ordered the U.N. inspectors to “continue their work”.

The Journal said “U.S. officials” also told the secretary-general that the United States “didn’t think the inspectors would be able to collect viable evidence due to the passage of time and damage from subsequent shelling.”

The State Department spokesperson, Marie Harf, confirmed to reporters that Kerry had spoken with Ban over the weekend. She also confirmed the gist of the U.S. position on the investigation. “We believe that it’s been too long and there’s been too much destruction of the area for the investigation to be credible,” she said.

That claim echoed a statement by an unnamed “senior official” to the Washington Post Sunday that the evidence had been “significantly corrupted” by the regime’s shelling of the area.

“[W]e don’t at this point have confidence that the U.N. can conduct a credible inquiry into what happened,” said Harf, “We are concerned that the Syrian regime will use this as a delay tactic to continue shelling and destroying evidence in the area.”

Harf did not explain, however, how the Syrian agreement to a ceasefire and unimpeded access to the area of the alleged chemical weapons attack could represent a continuation in “shelling and destroying evidence”.

Despite the U.S. effort to portray the Syrian government policy as one of “delay”, the formal request from the United Nations for access to the site did not go to the Syrian government until Angela Kane, U.N. High Representative for Disarmament Affairs, arrived in Damascus on Saturday, as Ban’s spokesman, Farhan Haq, conceded in a briefing in New York Tuesday.

Syrian Foreign Minister Walid al-Muallem said in a press conference Tuesday that Syria had not been asked by the United Nations for access to the East Ghouta area until Kane presented it on Saturday. Syria agreed to provide access and to a ceasefire the following day.

Haq sharply disagreed with the argument made by Kerry and the State Department that it was too late to obtain evidence of the nature of the Aug. 21 incident.

“Sarin can be detected for up to months after its use,” he said.

Specialists on chemical weapons also suggested in interviews with IPS that the U.N. investigating team, under a highly regarded Swedish specialist Ake Sellstom and including several experts borrowed from the Organisation for the Prevention of Chemical Weapons, should be able to either confirm or disprove the charge of an attack with nerve or another chemical weapon within a matter of days.

Ralph Trapp, a consultant on proliferation of chemical and biological weapons, said he was “reasonably confident” that the U.N. team could clarify what had happened.

“They can definitely answer the question [of] whether there was a chemical attack, and they can tell which chemical was used,” he said, by collecting samples from blood, urine and hair of victims. There was even “some chance” of finding chemical residue from ammunition pieces or craters where they landed.

Trapp said it would take “several days” to complete an analysis.

Steve Johnson, who runs a programme in chemical, biological and radiological weapons forensics at Cranfield University in the United Kingdom, said that by the end of the week the U.N. might be able to answer whether “people died of a nerve agent.”

Johnson said the team, if pushed, could produce “some kind of view” on that issue within 24 to 48 hours.

Dan Kastesza, a 20-year veteran of the U.S. Army Chemical Corps and a former adviser to the White House on chemical and biological weapons proliferation, told IPS the team will not be looking for traces of the nerve gas sarin in blood samples but rather chemicals produced when sarin degrades.

But Kastesza said that once samples arrive at laboratories, specialists could make a determination “in a day or two” about whether a nerve agent or other chemical weapons had been used.

The real reason for the Obama administration’s hostility toward the U.N. investigation appears to be the fear that the Syrian government’s decision to allow the team access to the area indicates that it knows that U.N. investigators will not find evidence of a nerve gas attack.

The administration’s effort to discredit the investigation recalls the George W. Bush administration’s rejection of the position of U.N. inspectors in 2002 and 2003 after they found no evidence of any weapons of mass destruction in Iraq and the administration’s refusal to give inspectors more time to fully rule out the existence of an active Iraqi WMD programme.

In both cases, the administration had made up its mind to go to war and wanted no information that could contradict that policy to arise.

Twisted Illogic: Killing Civilians to Protect Civilians

August 29, 2013
The Warped Logic of the Syrian Bombing Mission 
by MARJORIE COHN and JEANNE MIRER


The drums of war are beating again. The Obama administration will reportedly launch a military strike to punish Syria’s Assad government for its alleged use of chemical weapons. A military attack would invariably kill civilians for the ostensible purpose of showing the Syrian government that killing civilians is wrong. “What we are talking about here is a potential response . . . to this specific violation of international norms,” declared White House press secretary Jay Carney. But a military intervention by the United States in Syria to punish the government would violate international law.

For the United States to threaten to and/or launch a military strike as a reprisal is a blatant violation of the United Nations Charter. The Charter requires countries to settle their international disputes peacefully. Article 2(4) makes it illegal for any country to either use force or threaten to use force against another country. Article 2(7) prohibits intervention in an internal or domestic dispute in another country. The only time military force is lawful under the Charter is when the Security Council approves it, or under Article 51, which allows a country to defend itself if attacked. “The use of chemical weapons within Syria is not an armed attack on the United States,” according to Notre Dame law professor Mary Ellen O’Connell.

The United States and the international community have failed to take constructive steps to promote peace-making efforts, which could have brought the crisis in Syria to an end. The big powers instead have waged a proxy war to give their “side” a stronger hand in future negotiations, evaluating the situation only in terms of geopolitical concerns. The result has been to once again demonstrate that military solutions to political and economic problems are no solution at all. In the meantime, the fans of enmity between religious factions have been inflamed to such a degree that the demonization of each by the other has created fertile ground for slaughter and excuses for not negotiating with anyone with “blood on their hands.”

Despite U.S. claims of “little doubt that Assad used these weapons,” there is significant doubt among the international community about which side employed chemical weapons. Many view the so-called rebels as trying to create a situation to provoke U.S. intervention against Assad. Indeed, in May, Carla del Ponte, former international prosecutor and current UN commissioner on Syria, concluded that opposition forces used sarin gas against civilians.

The use of any type of chemical weapon by any party would constitute a war crime. Chemical weapons that kill and maim people are illegal and their use violates the laws of war. The illegality of chemical and poisoned weapons was first established by the Hague regulations of 1899 and Hague Convention of 1907. It was reiterated in the Geneva Convention of 1925 and the Chemical Weapons Convention. The Rome Statute for the International Criminal Court specifically states that employing “poison or poisoned weapons” and “asphyxiating, poisonous or other gases, and all analogous liquids, materials or devices” are war crimes, under Article 8. The prohibition on the use of these weapons is an international norm regardless of whether any convention has been ratified. As these weapons do not distinguish between military combatants and civilians, they violate the principle of distinction and the ban on weapons which cause unnecessary suffering and death contained in the Hague Convention. Under the Nuremberg Principles, violations of the laws of war are war crimes.

The self-righteousness of the United States about the alleged use of chemical weapons by Assad is hypocritical. The United States used napalm and employed massive amounts of chemical weapons in the form of Agent Orange in Vietnam, which continues to affect countless people over many generations. Recently declassified CIA documents reveal U.S. complicity in Saddam Hussein’s use of chemical weapons during the Iran-Iraq war, according to Foreign Policy: “In contrast to today’s wrenching debate over whether the United States should intervene to stop alleged chemical weapons attacks by the Syrian government, the United States applied a cold calculus three decades ago to Hussein’s widespread use of chemical weapons against his enemies and his own people. The Reagan administration decided that it was better to let the attacks continue if they might turn the tide of the war. And even if they were discovered, the CIA wagered that international outrage and condemnation would be muted.”

In Iraq and Afghanistan, the United States used cluster bombs, depleted uranium, and white phosphorous gas. Cluster bomb cannisters contain tiny bomblets, which can spread over a vast area. Unexploded cluster bombs are frequently picked up by children and explode, resulting in serious injury or death. Depleted uranium (DU) weapons spread high levels of radiation over vast areas of land. In Iraq, there has been a sharp increase in Leukemia and birth defects, probably due to DU. White phosphorous gas melts the skin and burns to the bone. The Geneva Convention Relative to the Protection of Civilian Persons in time of War (Geneva IV) classifies “willfully causing great suffering or serious injury to body or health” as a grave breach, which constitutes a war crime.

The use of chemical weapons, regardless of the purpose, is atrocious, no matter the feigned justification. A government’s use of such weapons against its own people is particularly reprehensible. Secretary of State John Kerry said that the purported attack by Assad’s forces “defies any code of morality” and should “shock the conscience of the world.” He went on to say that “there must be accountability for those who would use the world’s most heinous weapons against the world’s most vulnerable people.”

Yet the U.S. militarily occupied over 75% of the Puerto Rican island of Vieques for 60 years, during which time the Navy routinely practiced with, and used, Agent Orange, depleted uranium, napalm and other toxic chemicals and metals such as TNT and mercury. This occurred within a couple of miles of a civilian population that included thousands of U.S. citizens. The people of Vieques have lived under the colonial rule of the United States now for 115 years and suffer from terminal health conditions such as elevated rates of cancer, hypertension, respiratory and skin illnesses and kidney failure. While Secretary Kerry calls for accountability by the Assad government, the U.S. Navy has yet to admit, much less seek atonement, for decades of bombing and biochemical warfare on Vieques.

The U.S. government’s moral outrage at the use of these weapons falls flat as it refuses to take responsibility for its own violations.

President Barack Obama admitted, “If the U.S. goes in and attacks another country without a UN mandate and without clear evidence that can be presented, then there are questions in terms of whether international law supports it . . .” The Obama administration is studying the 1999 “NATO air war in Kosovo as a possible blueprint for acting without a mandate from the United Nations,” the New York Times reported. But NATO’s Kosovo bombing also violated the UN Charter as the Security Council never approved it, and it was not carried out in self-defense. The UN Charter does not permit the use of military force for “humanitarian interventions.” Humanitarian concerns do not constitute self-defense. In fact, humanitarian concerns should spur the international community to seek peace and end the suffering, not increase military attacks, which could endanger peace in the entire region.

Moreover, as Phyllis Bennis of the Institute for Policy Studies and David Wildman of Human Rights & Racial Justice for the Global Ministries of the United Methodist Church wrote, “Does anyone really believe that a military strike on an alleged chemical weapons factory would help the Syrian people, would save any lives, would help bring an end to this horrific civil war”?

Military strikes will likely result in the escalation of Syria’s civil war. “Let’s be clear,” Bennis and Wildman note. “Any U.S. military attack, cruise missiles or anything else, will not be to protect civilians – it will mean taking sides once again in a bloody, complicated civil war.” Anthony Cordesman, military analyst from the Center for Strategic and International Studies, asks, “Can you do damage with cruise missiles? Yes. Can you stop them from having chemical weapons capability? I would think the answer would be no.”

The United States and its allies must refrain from military intervention in Syria and take affirmative steps to promote a durable ceasefire and a political solution consistent with international law. If the U.S. government were truly interested in fomenting peace and promoting accountability, it should apologize to and compensate the victims of its own use of chemical weapons around the world.

The Subterfuge of Syrian Chemical Weapons (Well it worked in Iraq, right?)

August 29, 2013
Investigating a Forgone Conclusion
by NICOLA NASSER


The U.S. Secretary of State John Kerry on this August 26 removed the sword of the alleged Syrian chemical weapons from its sheath and let the snow ball of this subterfuge for a military aggression on Syria roll unchecked, raising the stakes from asking whether “it will happen” to “when” it will happen, promising that President Barack Obama “will be making an informed decision about how” to take on Syria and warning not to make a “mistake” because Obama “believes there must be accountability,” making clear that a U.S. – led military action is in the making and imminent.

A 20 member UN independent commission of inquiry, headed by UN High Representative for Disarmament Affairs, Angela Kane, and led by the Swedish scientist and the veteran “inspector” for the UNSCOM and UNMOVIC inspection regimes in Iraq, Ake Sellstrom, arrived in Damascus on August 24 for a fourteen – day mission to investigate whether or not chemical weapons were used in Syria.

The fact that this UN mission is in Syria in response to an official request sent by the Syrian government to the UN Security Council on March 19, 2013 to investigate the first chemical attack, which was launched then from the positions of the U.S. – sponsored armed gangs fighting the Syrian regime on the government – held northern town of Khan al_A’ssal, as well as the fact that the U.S. for five months opposed such an investigation unless the UN adopts it as an “inspection” mission all over Syria, are self – evident enough facts to leave no doubt about the real intentions of the United States.

The timing of the reported chemical attack in the eastern suburbs of the Syrian capital on August 21 coincided first with the arrival of the UN investigators in Damascus and second with launching what the Syrian Arab Army (SAA) codenamed the “Reinforcement of the Shield of the Capital” (RSC) military operation to root out the armed gangs operating in the same area, consisting of al-Qaeda – linked Islamists, but mainly of the Jabhat al-Nusra, which the U.S. listed as a terrorist organization last December.

In view of the progress of the RSC operation, following a series of other successful operations by the SAA since their strategic breakthrough in al-Qusayr in June this year, which sealed off the borders with Lebanon through which rebels used to infiltrate, it was noteworthy that the American, French, British and German leaders as well as their Turkish, Qatari and Saudi Arabian allies demanded an immediate “ceasefire,” allegedly to allow and facilitate the mission of the UN investigators; alternatively, if the RSC operation did not stop, the Syrian government was accused by them of “systematically” destroying the evidence.

The Syrian foreign minister Walid al-Muallem in his press conference in Damascus on Tuesday reiterated what his government had previously confirmed: The RSC operation will continue.

The Declared Goal

The U.S. – led threats of an imminent military action was the only option left for the western backers of the rebels in Syria; their declared goal is to stem the accelerating successes of the SAA and to return the balance of power to the status quo ante.

When the 18th Chairman of the U.S. Joint Chiefs of Staff, General Martin E. Dempsey, before the reportedly chemical attack last week, admitted that the Syrian army was “gaining momentum,” he did not “think it’ll be sustainable,” not because he was drawing on the facts on the ground, but most likely because he was privy to what was in store with his co- decision makers in Washington.

Maintaining a “balance of power” on the ground is a U.S. precondition to engage in and allow negotiations to solve the Syrian conflict peacefully. The U.S. cannot co – host with Russia the repeatedly postponed Geneva – 2 peace conference on Syria unless the military status quo on the ground is deprived of the gains won by the SAA.

Therefore, the U.S. is impatient to give “enough time” to the UN investigators to finish their mission with conclusive or inconclusive evidence, as requested by the UN Secretary General Ban Ki – moon on Wednesday. The UN envoy for Syria, al-Akhdar al-Ibrahimi, on the same day said that the military solution of the conflict is “impossible,” but his appeal for a peaceful solution fell on deaf ears in Washington, where plans are being worked out by leaps and bounds for an imminent military strike.

Such a strike would only exacerbate the conflict, which al-Ibrahimi on August 23 said it “is undoubtedly today the biggest threat to peace and security in the world.”

Would Obama decide on military action to take place while the UN investigators are still in Syria? The U.S. disrespect of the UN has several precedents to make the answer in the positive a realistic probability.

Time will tell however, some say within days, but if it takes place it will be an insult to the United Nations and the world community that will further hurt the international credibility of the United States, which is now pressured into military action as a “face saving move” presumably to save the credibility of its leader who has drawn publicly a “red line” on the use of chemical weapons in Syria at least five times during the last year.

Obama Gives In

Obama, the former professor of constitutional law, who as recently as August 22 warned in a CNN interview that “we have to take into account considerations” like a “U.N. mandate” supported by “international law” and “clear evidence,” seems ready now to strike without any respect to the three factors, which they only can give legitimacy to any U.S. – led strike against Syria.

The UN mandate and legitimacy cannot be provided by a decision taken by the NATO, which is led by the U.S. A selective “responsibility to protect” pretext for a unilateral U.S. – led intervention militarily cannot replace the UN charter and international law. A fig leaf political approval of an attack on Syria from the Arab League, which is now no more than a U.S. rubber stamp, cannot provide Obama with any credible “Arab” justification for a war on Syria; similar approvals in Libya and Iraq were counterproductive examples. Obama cannot draw on artificial legitimacy to justify what will be no more than a flagrant violation of international law and UN charter to cover up what will be merely a bare – to- all – to – see aggression.

Moreover, Obama seems even ready to bypass a U.S. constitutional obligation to consult with and get the consent of the Congress, now in a month – long recess until September 9.

According to the Los Angeles Times on Tuesday, Rep. Scott Rigell (R-Va.) has collected nearly three dozen signatures of House members to a letter he intended to send to the White House to remind the president that military action without a congressional vote “would violate the separation of powers that is clearly delineated in the Constitution.”

Obama told CNN: “Sometimes what we’ve seen is that folks will call for immediate action, jumping into stuff that does not turn out well, gets us mired in very difficult situations.”

Writing in the Los Angeles Times on August 27, Kathleen Hennessey, Michael A. Memoli and Christi Parsons said that the poison gas attack in the suburbs of the Syrian capital on August 21 was “testing” Obama’s views “as no previous crisis has done;” unfortunately Kerry announced Monday that the U.S. president has failed this test.

However, Kerry’s statement in his news conference in Washington Monday, which was described by mainstream media as “emotional” and “highly charged,” sounded like an official declaration that Obama had done with whatever “considerations” might prevent him from taking a decision to strike, even if he risks to get “mired in” exactly the “very difficult situations” he has been trying to avoid.

It was a declaration that Obama has at last given in to the warmongers who have been leading a media blitz that has been beating the drums of war on Syria for two and a half years now; Kerry only added “chemical fuel” to it.

Kerry Mobilizes Passive Public

On the one hand, Kerry’s statement was emotionally highly charged with the intention of defusing a mounting pressure for action that was exacerbated with the reported chemical attack in the suburbs of Damascus.

On the other, its emotionality was intended as a prelude to mobilize a passive public opinion for a possible imminent military action against Syria.

Several recent polls showed that the majority of Americans oppose U.S. involvement in the Syrian conflict, let alone militarily. In this week’s Reuters/Ipsos survey, only 25 percent of Americans said they would support U.S. intervention if Syrian President Bashar al-Assad’s forces used chemicals to attack civilians, while 46 percent would oppose it. About 60 percent of Americans surveyed said the United States should not intervene in Syria’s civil war, while just 9 percent thought Obama should act. A Pew Research Center poll taken June 12-16 found 70 percent of Americans opposed Obama’s decision to provide arms to Syrian rebels in response to smaller-scale chemical weapons attacks there; 68 percent said the U.S. military is “too over-committed” to get involved in the Syrian conflict.

If Kerry’s intention was to mount pressure on Syria, the country’s foreign minister Walid al-Muallem on Tuesday declared Syria will not yield to “blackmail” and its only option is to defend itself with whatever means are available, some of which will be a “surprise,” he said.

However, Kerry’s statement sounded not a message to Syria per se as much as it was a message to American, European and Arab warmongers, who ever since the Syrian crisis erupted have been lobbying his administration to take action against Syria long before the first chemical attack was launched from the positions of the U.S. – sponsored armed gangs on Khan al_A’ssal five months ago.

Investigating a Forgone Conclusion

In view of the Syrian government’s confirmation of the use of chemical weapons, Kerry’s statement on Monday that it “is real, that chemical weapons were used in Syria,” and the confirmation of their use by the Syrian so called “opposition” and its western and Arab sponsors, their use is already a forgone conclusion.

Is it not surprising and a waste of time then to send the UN independent commission of inquiry to investigate a forgone conclusion that all parties take for granted as a fact!

Kerry quoted Ban Ki – moon as saying last week that “the U.N. investigation will not determine who used these chemical weapons, only whether such weapons were used.”

If the investigators’ mandate is only to confirm what is already “is undeniable,” in Kerry’s words, why were the UN investigators stripped of the mandate of determining “who” used the chemical weapons in Syria, if not to leave it up to the U.S. & partners to decide in advance as a prejudged conclusion that “There’s no doubt who is responsible: The Syrian regime,” according to Vice President Joe Biden on Wednesday, to be consistent with their plans for a regime change in Damascus, and let the truth go to hell.

On Parallel Earth

Putin Orders Massive Strike Against Saudi Arabia If West Attacks Syria

god damn.

~~~~~~~~~~~

Posted by EU Times on Aug 27th, 2013

A grim “urgent action memorandum” issued today from the office of President Putin to the Armed Forces of the Russian Federation is ordering a “massive military strike” against Saudi Arabia in the event that the West attacks Syria.

According to Kremlin sources familiar with this extraordinary “war order,” Putin became “enraged” after his early August meeting with Saudi Prince Bandar bin Sultan who warned that if Russia did not accept the defeat of Syria, Saudi Arabia would unleash Chechen terrorists under their control to cause mass death and chaos during the Winter Olympics scheduled to be held 7-23 February 2014 in Sochi, Russia.

Lebanese newspaper As-Safir confirmed this amazing threat against Russia saying that Prince Bandar pledged to safeguard Russia’s naval base in Syria if the Assad regime is toppled, but he also hinted at Chechen terrorist attacks on Russia’s Winter Olympics in Sochi if there is no accord by stating: “I can give you a guarantee to protect the Winter Olympics next year. The Chechen groups that threaten the security of the games are controlled by us.”

Prince Bandar went on to say that Chechens operating in Syria were a pressure tool that could be switched on an off. “These groups do not scare us. We use them in the face of the Syrian regime but they will have no role in Syria’s political future.”

London’s The Telegraph News Service further reported today that Saudi Arabia has secretly offered Russia a sweeping deal to control the global oil market and safeguard Russia’s gas contracts, if the Kremlin backs away from the Assad regime in Syria, an offer Putin replied to by saying “Our stance on Assad will never change. We believe that the Syrian regime is the best speaker on behalf of the Syrian people, and not those liver eaters” [Putin said referring to footage showing a Jihadist rebel eating the heart and liver of a Syrian soldier HERE], and which Prince Bandar in turn warned that there can be “no escape from the military option” if Russia declines the olive branch.

Critical to note, and as we had previously reported on in our 28 January 2013 report “Obama Plan For World War III Stuns Russia,” the Federal Security Services (FSB) confirmed the validity of the released hacked emails of the British based defence company, Britam Defence that stunningly warned the Obama regime was preparing to unleash a series of attacks against both Syria and Iran in a move Russian intelligence experts warned could very well cause World War III.

According to this FSB report, Britam Defence, one of the largest private mercenary forces in the world, was the target of a “massive hack” of its computer files by an “unknown state sponsored entity” this past January who then released a number of critical emails between its top two executives, founder Philip Doughty and his Business Development Director David Goulding.

The two most concerning emails between Doughty and Goulding, this report says, states that the Obama regime has approved a “false flag” attack in Syria using chemical weapons, and that Britam has been approved to participate in the West’s warn on Iran, and as we can read:

Email 1: Phil, We’ve got a new offer. It’s about Syria again. Qataris propose an attractive deal and swear that the idea is approved by Washington. We’ll have to deliver a CW (chemical weapon) to Homs (Syria), a Soviet origin g-shell from Libya similar to those that Assad should have. They want us to deploy our Ukrainian personnel that should speak Russian and make a video record. Frankly, I don’t think it’s a good idea but the sums proposed are enormous. Your opinion? Kind regards David

Email 2: Phil, Please see attached details of preparatory measures concerning the Iranian issue. Participation of Britam in the operation is confirmed by the Saudis.

With the events now spiraling out of control in Syria, and London’s Independent News Service now reporting that Prince Bandar is “pushing for war,” Russian foreign ministry spokesman Alexander Lukashevich further warned the West today by stating, “Attempts to bypass the Security Council, once again to create artificial groundless excuses for a military intervention in the region are fraught with new suffering in Syria and catastrophic consequences for other countries of the Middle East and North Africa.”

Heedless of Russian warnings which have fallen on deaf ears, however, British Prime Minister David Cameron this morning recalled the British Parliament to vote on attacking Syria as the Obama regime abruptly cancelled their meeting with Russia scheduled for tomorrow on finding a path to peace for Syria, and the West begins its plans to attack the Syrian nation “within days.”

As Syria itself has warned that should it be attacked by the West there will be “global chaos,” the Western peoples themselves have not been told of the fact that on 17 May 2013, Putin ordered Russian military forces to “immediately move” from Local War to Regional War operational status and to be “fully prepared” to expand to Large-Scale War should either the US or EU enter into the Syrian Civil War, a situation they are still in at this very hour.

With Putin’s previous order, and as we had reported on in our 17 May report “Russia Issues “All-Out War” Alert Over Syria,” and now combined with his new ordering of massive retaliatory strikes against Saudi Arabia, any attack on Syria is viewed by Russia as being an attack on itself.

And as we had previously explained in great detail, the fight over Syria, being led by Saudi Arabia and Qatar and their lap-dog Western allies, has but one single objective: To break Russia’s hold on the European Union natural gas market which a pipeline through Syria would accomplish, and as reported by London’s Financial Times News Service this past June:


“The tiny gas-rich state of Qatar has spent as much as $3bn over the past two years supporting the rebellion in Syria, far exceeding any other government, but is now being nudged aside by Saudi Arabia as the prime source of arms to rebels.

The cost of Qatar’s intervention, its latest push to back an Arab revolt, amounts to a fraction of its international investment portfolio. But its financial support for the revolution that has turned into a vicious civil war dramatically overshadows western backing for the opposition.

Qatar [also] has proposed a gas pipeline from the Gulf to Turkey in a sign the emirate is considering a further expansion of exports from the world’s biggest gasfield after it finishes an ambitious programme to more than double its capacity to produce liquefied natural gas (LNG).”

And in what is, perhaps, the most unimaginable cause to start World War III over Syria was noted by Russian Foreign Ministry spokesman, Aleksandr Lukashevich who said this past week: “We’re getting more new evidence that this criminal act was of a provocative nature,” he stressed. “In particular, there are reports circulating on the Internet, in particular that the materials of the incident and accusations against government troops had been posted for several hours before the so-called attack. Thus, it was a pre-planned action.”

For the West to have so sloppily engineered yet another “false flag” attack to justify a war where they posted the videos of this so-called chemical weapons attack a full day before it was said to occur is the height of arrogance and disdain, but which their sleep-walking citizens, yet again, will fall for as they have done so many times in the past.

Source

U.S. Will Take Action In Syria Regardless of Support From Allies or U.N.

Wednesday, August 28, 2013
by Madison Ruppert
Activist Post

In a statement that brings to memory the attack on Iraq, the United States said that it will take action against Syria even if allies and the United Nations do not support the operation.

The attack would be a response to alleged chemical weapons use. Despite the lack of published findings by the UN investigators, Western nations have been calling for a response to the alleged attack and one report claimed that U.S., Israeli and Jordanian commandos are already on the ground in Syria.

Today the Syrian government called for an immediate UN investigation into three new alleged attacks, reportedly carried out by the rebels.

Yet the United States’ rhetoric has become increasingly bellicose today, with the Associated Press reporting that the U.S. will simply ignore the backing – or lack thereof – of the UN and allied nations.

Note: The Washington Post changed the AP story entirely. Here is the original version posted on another site.

On Wednesday, Britain proposed a draft resolution that would authorize a military operation against Syria but that effort was stymied by the continued opposition of Russia.

The Associated Press rightly notes that if the draft resolution was put to a vote, it “would almost certainly be vetoed by Russia and China, which have blocked past attempts to sanction President Bashar Assad’s regime.”

Indeed, Russia and China have presented the most significant obstacle to Western intervention in Syria for quite some time now.

Marie Harf, deputy spokeswoman for the State Department, said that the U.S. cannot be delayed in responding to the alleged attack by Russia’s opposition in the United Nations.

Russia maintained that a military strike on Syria without the approval of the UN Security Council would be a “crude violation” of international law, something which doesn’t seem to bother the U.S.

In the United States, “No War With Syria” rallies are scheduled for Saturday, August 31 in cities across the United States.

“The movement in no way support the actions of the Assad regime, but we recognize that US intervention will instigate more violence and suffering in Syria,” organizer Nick Bernabe said in a statement.

“As the U.S. is already hurting from a recession and perpetual wars, becoming involved in Syria will only create further destabilization in the Middle East and strip the people of the United States of desperately needed resources,” he added.

Opposition has also been voiced by former Congressman Dennis Kucinich, who said that a strike on Syrian President Bashar al-Assad’s forces would mean the U.S. was supporting al-Qaeda.