February 24, 2009

Aspertame (think: Donald Rumsfield profiteer) update

New Mexico Senate
Santa Fe, New Mexico
The Honorable Frank Torti, M.D.

February 12, 2009

Acting Commissioner,
United States Food and Drug Administration
5400 Fisher's Lane
Rockville, Maryland

Dear Dr. Torti:

I am the New Mexico sponsor of the enclosed Senate Memorial 9, 2009, asking the Food and Drug Administration to rescind its approval for the artificial sweetener, aspartame.

You may know that the FDA, to its credit, turned down G.D. Searle's application for aspartame's approval from 1966 to 1981, at which point, approval was forced through the FDA at the insistence of Searle's CEO, Donald Rumsfeld.
Numerous physicians' petitions as well as many private petitions have been filed with FDA since 1981 asking for the rescinding of aspartame's approval. These have all been routinely ignored and responded to with industry assurance about how many industry financed "tests" aspartame has been through, all of which showed "aspartame to be safe."
FDA used to keep records on consumer complaints on aspartame, accruing a minimum of 92 alleged symptoms from ingesting aspartame, ranging from headaches, blurred vision, skin rashes, epilepsy and multiple sclerosis to that ultimate symptom, DEATH.

Dr. Torti, this chemical has produced a massive mountain of medical and neurodengenerative evidence, which I believe would lead you to order it removed from the market. While it is too late to do this now as a "precaution"; it is even more imperative to do this as a means of preventing further medical harm to future victims.

This Memorial is advancing in the New Mexico Senate, after being cosponsored by ten of my colleagues. A similar version of the Memorial has also been introduced by Hawaii Senator Chun Oakland, and is cosponsored by ten members of the Hawaii Senate. That resolution will create an evidentiary repository for Hawaii victims, especially those with diabetes and epileptic seizures, now statistically epidemic in Hawaii, with links to aspartame.In January 2009, Hawaii Senator Kalani English introduced SB576 in that state. It would ban aspartame entirely in Hawaii. This bill is cosponsored by an astonishing 14 members of the 25 member Hawaii Senate. At the same time, Representative Mele Carroll has introduced HB669, also banning aspartame's sale and use in Hawaii.

I realize a permanent FDA Commissioner has not yet been selected by the Obama Administration, but when one is appointed, I will send a similar letter to him/her to again request this action in order to protect the American public from further harm from a chemical that the FDA has known for 43 years is metabolized as methanol, formaldehyde, aspartic acid, phenylalanine, and the proven carcinogen, diketopiperazine.This regulatory failure of epic proportions entirely resulted from the actions of Donald Rumsfeld when he was with the original patent holder for aspartame. There is sufficient evidence to warrant such a rescinding, a situation not unlike that in 1969 when President Richard Nixon similarly ordered the FDA to take away the approval for another group of carcinogens, cyclamates, which occurred very quickly.

Our concern must be the overarching concerns of preventing further neurodengenerative and carcinogenic damage to hundreds of millions of Americans, who have no other government entity to trust and depend on than the United State Food and drug Administration!
I believe that President Obama, Congressman Bart Stupak, and Congresswoman Rosa Delauro all want to see the rebuilding of an FDA that merits the restored trust of the American people. I certainly want to see this come about, and I hope you do as well.Rescinding aspartame's FDA approval would be a major credible first step in the right direction.

Sincerely yours,
Gerald Ortiz y Pino
New Mexico State Senator
District 12Albuquerque

KaKaKarl update

Rove Skips House Judiciary Deposition

Submitted by Chip to afterdowningstreet on Tue, 2009-02-24 02:31.

John Bresnahan reports:

Former Bush adviser Karl Rove was a no-show today at his scheduled deposition deadline for the House Judiciary Committee's ongoing probe into the U.S. attorney firings -- setting up a major decision for President Obama on how to respond to congressional subpoenas.

Committee Chairman John Conyers (D-Mich.) subpeonaed Rove to find out what he knows about the Dec. 2006 firings which eventually toppled former Attorney General Alberto Gonzales.

When Rove was subpoenaed in 2007, President Bush asserted "absolute immunity" for his top aides, refusing to allow them even to appear before a congressional panel. House Democrats eventually sued, and won an initial legal victory. The Bush White House, through the Justice Dept., appealed the ruling, and when Bush left office in January 2009, the case was still undecided.

White House Counsel Greg Craig has urged the two sides to cut a deal, but Rove and his attorney, Robert Luskin, have kicked it back to the White House, saying it is up to them to assert executive privilege or not.

So the next big development will occur on March 4, when the Obama administration is scheduled to file a motion in federal appeals court laying out its position on the issue.

Text of H.R. 645: National Emergency Centers Establishment Act

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This version: Introduced in House. This is the original text of the bill as it was written by its sponsor and submitted to the House for consideration. This is the latest version of the bill available on this website.

HR 645 IH


1st Session

H. R. 645

To direct the Secretary of Homeland Security to establish national emergency centers on military installations.


January 22, 2009

Mr. HASTINGS of Florida introduced the following bill; which was referred to the Committee on Transportation and Infrastructure, and in addition to the Committee on Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


To direct the Secretary of Homeland Security to establish national emergency centers on military installations.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


This Act may be cited as the ‘National Emergency Centers Establishment Act’.


(a) In General- In accordance with the requirements of this Act, the Secretary of Homeland Security shall establish not fewer than 6 national emergency centers on military installations.

(b) Purpose of National Emergency Centers- The purpose of a national emergency center shall be to use existing infrastructure--

(1) to provide temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster;

(2) to provide centralized locations for the purposes of training and ensuring the coordination of Federal, State, and local first responders;

(3) to provide centralized locations to improve the coordination of preparedness, response, and recovery efforts of government, private, and not-for-profit entities and faith-based organizations; and

(4) to meet other appropriate needs, as determined by the Secretary of Homeland Security.


(a) In General- Not later than 60 days after the date of the enactment of this Act, the Secretary of Homeland Security, in consultation with the Secretary of Defense, shall designate not fewer than 6 military installations as sites for the establishment of national emergency centers.

(b) Minimum Requirements- A site designated as a national emergency center shall be--

(1) capable of meeting for an extended period of time the housing, health, transportation, education, public works, humanitarian and other transition needs of a large number of individuals affected by an emergency or major disaster;

(2) environmentally safe and shall not pose a health risk to individuals who may use the center;

(3) capable of being scaled up or down to accommodate major disaster preparedness and response drills, operations, and procedures;

(4) capable of housing existing permanent structures necessary to meet training and first responders coordination requirements during nondisaster periods;

(5) capable of hosting the infrastructure necessary to rapidly adjust to temporary housing, medical, and humanitarian assistance needs;

(6) required to consist of a complete operations command center, including 2 state-of-the art command and control centers that will comprise a 24/7 operations watch center as follows:

(A) one of the command and control centers shall be in full ready mode; and

(B) the other shall be used daily for training; and

(7) easily accessible at all times and be able to facilitate handicapped and medical facilities, including during an emergency or major disaster.

(c) Location of National Emergency Centers- There shall be established not fewer than one national emergency center in each of the following areas:

(1) The area consisting of Federal Emergency Management Agency Regions I, II, and III.

(2) The area consisting of Federal Emergency Management Agency Region IV.

(3) The area consisting of Federal Emergency Management Agency Regions V and VII.

(4) The area consisting of Federal Emergency Management Agency Region VI.

(5) The area consisting of Federal Emergency Management Agency Regions VIII and X.

(6) The area consisting of Federal Emergency Management Agency Region IX.

(d) Preference for Designation of Closed Military Installations- Wherever possible, the Secretary of Homeland Security, in consultation with the Secretary of Defense, shall designate a closed military installation as a site for a national emergency center. If the Secretaries of Homeland Security and Defense jointly determine that there is not a sufficient number of closed military installations that meet the requirements of subsections (b) and (c), the Secretaries shall jointly designate portions of existing military installations other than closed military installations as national emergency centers.

(e) Transfer of Control of Closed Military Installations- If a closed military installation is designated as a national emergency center, not later than 180 days after the date of designation, the Secretary of Defense shall transfer to the Secretary of Homeland Security administrative jurisdiction over such closed military installation.

(f) Cooperative Agreement for Joint Use of Existing Military Installations- If an existing military installation other than a closed military installation is designated as a national emergency center, not later than 180 days after the date of designation, the Secretary of Homeland Security and the Secretary of Defense shall enter into a cooperative agreement to provide for the establishment of the national emergency center.

(g) Reports-

(1) PRELIMINARY REPORT- Not later than 90 days after the date of the enactment of this Act, the Secretary of Homeland Security, acting jointly with the Secretary of Defense, shall submit to Congress a report that contains for each designated site--

(A) an outline of the reasons why the site was selected;

(B) an outline of the need to construct, repair, or update any existing infrastructure at the site;

(C) an outline of the need to conduct any necessary environmental clean-up at the site;

(D) an outline of preliminary plans for the transfer of control of the site from the Secretary of Defense to the Secretary of Homeland Security, if necessary under subsection (e); and

(E) an outline of preliminary plans for entering into a cooperative agreement for the establishment of a national emergency center at the site, if necessary under subsection (f).

(2) UPDATE REPORT- Not later than 120 days after the date of the enactment of this Act, the Secretary of Homeland Security, acting jointly with the Secretary of Defense, shall submit to Congress a report that contains for each designated site--

(A) an update on the information contained in the report as required by paragraph (1);

(B) an outline of the progress made toward the transfer of control of the site, if necessary under subsection (e);

(C) an outline of the progress made toward entering a cooperative agreement for the establishment of a national emergency center at the site, if necessary under subsection (f); and

(D) recommendations regarding any authorizations and appropriations that may be necessary to provide for the establishment of a national emergency center at the site.

(3) FINAL REPORT- Not later than 1 year after the date of the enactment of this Act, the Secretary of Homeland Security, acting jointly with the Secretary of Defense, shall submit to Congress a report that contains for each designated site--

(A) finalized information detailing the transfer of control of the site, if necessary under subsection (e);

(B) the finalized cooperative agreement for the establishment of a national emergency center at the site, if necessary under subsection (f); and

(C) any additional information pertinent to the establishment of a national emergency center at the site.

(4) ADDITIONAL REPORTS- The Secretary of Homeland Security, acting jointly with the Secretary of Defense, may submit to Congress additional reports as necessary to provide updates on steps being taken to meet the requirements of this Act.


This Act does not affect--

(1) the authority of the Federal Government to provide emergency or major disaster assistance or to implement any disaster mitigation and response program, including any program authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.); or

(2) the authority of a State or local government to respond to an emergency.


There is authorized to be appropriated $180,000,000 for each of fiscal years 2009 and 2010 to carry out this Act. Such funds shall remain available until expended.


In this Act, the following definitions apply:

(1) CLOSED MILITARY INSTALLATION- The term ‘closed military installation’ means a military installation, or portion thereof, approved for closure or realignment under the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note) that meet all, or 2 out of the 3 following requirements:

(A) Is located in close proximity to a transportation corridor.

(B) Is located in a State with a high level or threat of disaster related activities.

(C) Is located near a major metropolitan center.

(2) EMERGENCY- The term ‘emergency’ has the meaning given such term in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122).

(3) MAJOR DISASTER- The term ‘major disaster’ has the meaning given such term in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122).

(4) MILITARY INSTALLATION- The term ‘military installation’ has the meaning given such term in section 2910 of the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 2687 note).

Canada releases UFO X-Files to the World

Now this is "interesting".

This may be part of a wider DISinformation racket. Today an article appeared in the cheap tabloid 24 hours that commuters regularly take in daily here in Toronto that said that UFO sitings are WAY up in Canada.
This takes one's mind off the huge problem of WAR CRIMES and militarization/securitization of all of Canada that is going on.
On the other hand, this may be very progressive news that needs to be examined.
I attended one seminar on this matter, in which Paul Hellyer and Dr. Greer met last year. I left confused and unsure as to the authenticity of what was advanced. It IS rumored that UFO's have been spotted on a leyline in Toronto on a consistent basis.
This blurb was found on Jean Hudon's Earth Rainbow network email. So I post it for your consideration anyway.



The Canadian Government has authorized open public access to thousands of federal government documents concerning UFOs. A total of 9500 digitized documents spanning the years 1947 to the early 1980s have been made available through the Library and Archives Canada website. Titled "Canada's UFOs: The Search for the Unknown" the files include correspondence, reports, memos and procedures, some of which specifically deal with UFOs. The files come from Canada’s National Defense Department, the Department of Transport, the National Research Council, and the Royal Canadian Mounted Police. Canada's release of its UFO X-Files follows closely upon the release at the end of January of Denmark's UFO files. Britain continues to release thousands of UFO files through a program of gradual releases it began in May 2007 through its national archives with the most recent being on October 2008. The French Space Agency had earlier announced on March 22, 2007, that it was making public its secret UFO files through a government website. The important difference between the released Canadian UFO files with other country releases is the inclusion of departmental analyses rather than simply reports of UFO sightings. According to Victor Viggiani from Exopolitics Toronto , who has been monitoring the Canadian Government UFO website since its inception, "The Canadian files do not simply list UFO sightings; they describe actions, meetings and inter-departmental memoranda generated by Canadian officials that attempt to make sense of the considerable onslaught of UFO sightings as well as referencing American problems with keeping abreast of UFO sightings."

February 20, 2009

And one on the Obama Canada visit

Obama Visits Canada, Trade And Oil On Agenda

President Barrack Obama arrived here in Ottawa, Canada, on Thursday morning for the first foreign trip of his administration, a visit that was expected to focus on the fragile world economy, the sagging auto industry, international trade, Afghanistan and energy - in particular the question of how to turn Alberta’s oil sands into a clean source of power.

Obama was greeted by the governor general of Canada, Michaelle Jean, as well as the Canadian ambassador to the United States, Michael Wilson, and a retinue of red-jacketed Canadian Mounties after Air Force One touched down in a light snow at Ottawa International Airport shortly before 10:30 a.m. The president is here for a string of official meetings and plans to hold a short news conference with Prime Minister Stephen Harper in the afternoon.

The United States is a major importer of Canadian oil, and Harper has been trying to win an agreement to exempt Canada’s vast tracts of oil sands, which contain up to 173 billion barrels of recoverable oil bound into sand and clay, from regulation. Obama is under intense pressure from environmentalists to resist that effort. Thursday’s visit is not expected to produce any detailed pact, but a White House official said the two countries would commit to working more closely together on research and information-sharing on energy and technology.

In an interview with the Canadian Broadcasting Corporation prior to his trip, Obama stopped short of using the word dirty, as environmentalists do, to describe the process of extracting oil from the sands. But he said extraction work there “creates a big carbon footprint.”

Obama may also face tensions with Harper over the issue of trade; Canada is up in arms over a “Buy America” provision inserted by Congress into the $787 billion economic recovery package Obama just signed into law, and Canadians have not forgotten Obama’s campaign pledge to reopen negotiations on the North American Free Trade Agreement (NAFTA) - a pledge he has since backed away from.

Instead, White House officials say Obama will stress drafting new environmental and labor protection side-agreements to the pact, and will emphasize the $1.5 billion-a-day trading relationship between the United States and Canada, the largest trading relationship in the world.

Obama is hugely popular in Canada - one poll during the election found he is more popular here than in the United States - and the newspapers on Thursday were filled with stories about his visit.

Several thousand people stood outside the Parliament building Thursday morning, awaiting the arrival of Obama’s motorcade; when it pulled up, the crowd cheered wildly, and Obama and Harper stepped outside briefly to wave from behind a glass enclosure.

“They followed the campaign daily like we did,” said Jim Blanchard, a former ambassador to Canada under President Bill Clinton. “They were riveted to their televisions for a year and a half and very enamored with Obama, and they were very unhappy with George W. Bush,and so the fact that he is making his first foreign trip to Ottawa, and this early in his administration, is huge.”

By taking his first trip to Canada, Obama is following a sometime tradition for United States presidents. Ronald Reagan was one of those who made Canada his first official foreign visit.

Canadians have come to expect the first-visit honor ever since, though former President George W. Bush, a former governor of Texas, took his first trip to Mexico instead. (To avoid an international brouhaha, the Bush White House insisted the Mexico trip, to the ranch of former President Vicente Fox, was an unofficial visit, and that the first official presidential foreign trip was to Canada.)

The Obama White House is eager to avoid any similar slight, on matters stylistic or substantive. Denis McDonough, a deputy national security adviser to Obama, said before leaving Washington that the president was “very eager to make the trip.” Paul Cellucci, a former ambassador to Canada under Bush, said Obama would be wise to strike a friendly tone.

“As he deals with strong allies like Canada, I think he is going to have to listen to them,” said Cellucci. “You don’t want to go down the road of a trade war, if we’re getting all this energy from Canada and it’s a reliable source of energy. It’s not Venezuela, it’s not the Middle East. Why would we want to jeopardize that?”

Intellpuke: You can read this article by New York Times journalist Sheryl Gay Stolberg, reporting from Ottawa, Canada, in context here: " target="_blank">www.nytimes.com/2009/02/20/world/americas/20prexy.html?hp
New York Times journalist Ian Austen contributed reporting to this article.

Yes, dear ones, whither activism? My snide remarks for the night

Each day I travel around Toronto.

I speak to people about corrupt police, the invasion of the surveillance society taking place throughout the city, the feeling of doom - and then watch as yuppies go about their myriad rounds of exercise and beer festivities.

Each day I wonder: what IS it going to "take" to get people motivated to fight back against what is increasing apparent; the fiscal crisis is about to hit HARD right here in Canucksville. The government/media DISSinfo continues. We read about the crash in Buffalo (the backyard) and forget about detainees, torture and WAR CRIMES. Many look away as the homeless sit out and beg on street corners in subzero temperatures, never stopping to ask WHY these people ended up on the street.

Yet something needs to be done, obviously.

"The "old model" of social activism hasn't proved effective,... Changing a light bulb is not an appropriate response" to the climate crisis."

People don't really know how to be effective.

Roger Fisher's: "Making Threats is Not Enough," (ch. 3 in Int'l Conflict 4 Beginners, http://www dot pon.harvard.edu/hnp/writing/books/internationalconflict.shtml) might be a place to begin.

Is an uprising necessary? Is online petitioning, phoning and the usual enough.

A definition of "uprising" would help, Fisher's good on that too. He tells how there were negotiations for arms control inspections but no definition of an inspection. Naturally they didn't get far, though each side had a quite different demand for number of inspections. They argued, but didn't know what over.

There are differences between movements of people who are actually the losers (low wage workers, oppressed groups), and movements of well meaning people who don't really have much to lose. In organizing we're taught to look for the former. They'll stick with you. So, given this, are there any such precedents for what these particular leaders are advocating?

Proactively: I hear nothing here of the key items of good organizing. The picture is of police, but they're irrelevanat to the decision making that makes any real difference. I hear of general attempts to influence, but no focus on the person who decides. I hear nothing of good preparation on that decider.

Tne definite problem is that those severely affected by what is happening are the already disenfranchised: children - who neither vote, pay taxes nor go to war. Or the "mentally ill", who are, afterall PEOPLE.

How do we "mobilize" without alienating those who we need to stand WITH US.

Get a copy of International Mediation (65 action for adjusting as you go). Write your own set of proposals as in the book Dear Israelis, Dear Arabs. All this from Roger Fisher, also much online. Get training in real organizing at NTIC, WORC, etc. and read Shel Trapp, online.

Here's my checklist, from my ZSpace blog (more there).

1. Are we targeting someone who actually makes the decision? Who is the person with the power to decide? (not public, not police)
2. Are we prepared to force them to communicate with us? (Often necessary. Civil disobedience for a purpose?)
3. Are we actually asking the person to do something specific?
4. Is it a winnable step? It doesn’t have to have a greater than 50% chance of being won, just a reasonable chance, suggests Roger Fisher in his books. (This changes if you really work those two chapters (2 & 3) in Beyond Machiavelli, and worksheets in Coping with International Conflict.)
5. Have we thoroughly prepared for this? Fisher’s book, Getting Ready to Negotiate: The Getting To Yes Workbook has a full packet of additional worksheets, including one right up front for assessing where you should start. ... (See worksheets listed at my blog.)
6. Do we know what to do after they “say no?” I find that the approach of wanting to be heard is sometimes followed by quitting after they say no. ...
7. Are we monitoring and documenting their responses and using them as teaching tools? ...
8. Are we running our own meetings with them? ...
9. Are we giving our members the chance to “be there” during negotiations? ...
10. Are we using methods that have been proven, that can win victory steps? ...

Do we need fear arrest? Do we need to back down and "chill" as is the Canadian way? Do we work alone as I do with grave risks attached?

Is it a matter of a quick blitz and then disperse?

Do we stay nonviolent, ala (sellout) Ghandi?

Do we advocate (as one voice) a TENT CITY approach, and that only or focus on only one activity such as calling for the prosecution of George W. BuZh?

Do we focus on ALL actitivites together: "climate change"; the need for a green economy; focus on the fiscal crisis; disgust at the last eight years of militarism, greed, superimperialism; poverty, homelessness, and social breakdown OR do we keep working away at each issue seperate as if stringing together the syllables of the language of dispair would make a coherant sentence in the end?

Will there be disperate groups emerging with anarchists on the extreme fringes, Nationalistic groups, feminists, peace activists and others - each doing there own thing? The SPP was a painful thing to watch - I DESPISED allying with active racists and there were many among that Ron Paul crowd "thang" - yet it produced many fine activities that caught the public eye.

Are we going for attentiong-getting activities, educating people, trying to stop the tyranny or getting together to propose solutions rather than just jawing about The Problem? How do we cut down The Weeds without destroying The Garden? Do we just go along and create more institutionalized protest?

What is happening if far, far worse than even the Vietnam War side effects, which were of course horrific. This is a Global Meltdown but I dont' see much international activism conferences occuring - YET.

All I personally know is that I miss the passion I saw in Andover desperately and that I would like to make some local change in my lifetime by seriously running for City Council to add a voice of dissent in my own locality and I am completely surprised how often I am told it's a Great Idea.

But I would like to see something more than to be undertaken than resort to the same old, same old - go to the ballot box solutions as they just don't seem to cut it, although changing things at the local level is where to start, obviously since it's harder to move things up on the Provincial, Federal or international levels. Been years since the WTO activism and it's going to prove difficult to bring back that fervor as the fear is that much heavier due to the increase in HARDENED cops and police technology.

Whither activism?

Who knows?

US Inflation Could Hit 200%: Dr. Doom

Some of you may also enjoy these interviews.

In the first (2009) he forecasts major inflation in the US, as a strategy of getting out of debt

In the second (1998) he forcasted a crash due to leveraging, blames globalisation, claims the IMF was doing more harm than good, and has an interesting twist to the explanation of the protracted crisis in Japan (due to cultural reasons related to saving).

Best wishes!

http://www.cnbc. com/id/29047443

Topics:Currencies | U.S. Dollar | Western Europe | Europe | Africa | Ben Bernanke | Federal Reserve | Politics & Government | Interest Rates | Economy (U.S.) | Inflation | ECB | Italy | The Netherlands | Germany | France | Britain | Economy (Global)
By: CNBC.com | 06 Feb 2009 | 03:28 AM ET
Text Size

The US risks being hit by Zimbabwe-style hyperinflation and there are signs that the world's biggest economy risks turning into a banana republic, Marc Faber, author of the Gloom, Doom & Boom report, told CNBC's "Asia Squawk Box."

Current DateTime: 11:29:54 16 Feb 2009
LinksList Documentid: 29047514

  • Dr. Doom Finds Value in Asia
  • Pros: US Needs Stimulus - Now
  • What Economists Said in Davos
"In the US, we have a totally new school, and it’s called the Zimbabwe school," Faber said. "And it’s founded by one of the great leaders of this world, Mr Robert Mugabe, that has managed to totally impoverish his own country. And that is the monetary policy the US is pursuing."

The government's increased intervention in the economy is likely to slow down economic growth because history shows that every time the private sector shrinks to make way for the government sector, the economy suffers, he said.

Asked whether the US risked being faced with 200 percent inflation, Faber answered: "Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate."

The Federal Reserve's policy of printing money and the government's intervention in the economy might undermine the US's economic and political clout, Faber warned.

"Well, I wrote two years ago a report entitled 'Is America becoming a banana republic?' And there are some features that characterize banana republics- totalitarian states, very strong government intervention into the economy, and the polarization of wealth," he said.

"And we have all these trends occurring in the US. We are not yet there. And in theory it could be reversed, but I doubt it will be," Faber added.

Because of these factors, US government and corporate bonds, including that of CNBC parent General Electric
[GE 11.44 -0.24 (-2.05%) ] , should be downgraded, he said.

"Yeh, I think GE should be a junk bond. But I also think the US government should be junk," Faber said, adding: "I don’t pay much attention to rating agencies. The rating agencies have totally failed over the last 3-4 years to identify sick companies."

© 2009 CNBC.com

http://www.abc. net.au/foreign/ stories/s317734. htm

Interview with Marc Faber

Broadcast: 23/6/1998
Interviewer: George Negus

Faber: (predicting world depression during an earlier interview with George Negus in January 1998) You tell me where it will end? I tell you it will end all in disaster. But will it end in disaster tomorrow...in three months, six months, nine months - that I don't know, but I tell you the whole system is at threat because of the leverage the world is living on....


Negus: Marc when we talked back in January your predictions about the Asian crisis were pretty dire. Given the events of the last couple of weeks, how would your gloom and doom report, if you like, describe the situation in Asia at the moment?

Faber: Well, I think that the Asian economies have essentially collapsed. We have really economic misery which has been compounded by a very high foreign debt level, and when you have your local currency collapsing by fifty percent or eighty percent, as in the case of Indonesia, then obviously your foreign debt becomes extremely burdensome.

Negus: The IMF are predicting an economic contraction in Asia of somewhere between three to five percent, but your report suggests somewhere between ten and fifteen, which is one heck of a discrepancy. Why is your prediction so much more bleak than theirs?

Faber: Well in my opinion the IMF doesn't really understand what they are talking about and they also don't really understand the problems Asia are facing. I'd like to remind you that the IMF had its annual meeting here in September, at which stage they were still quite optimistic about Asia and they thought that the crisis of the Thai baht was unique and that it wouldn't spread or have a contagious impact on the other countries and thereafter everything collapsed. Everywhere in Asia the imports are collapsing by forty to fifty percent. Car sales in Malaysia, in Thailand, Indonesia are down in the order of seventy-five percent... tourism is down twenty-five percent in Hong Kong... So if someone talks about the contraction of just three percent he's dreaming. The contraction is much more severe than that.

Negus: It sounds to me, and I think this was your attitude when I spoke to you earlier this year, that the IMF and other world monetary bodies like the IMF are part of the problem, not part of the solution.

Faber: Well, the IMF each time it bails out a country it distorts the market, and it prevents the market from clearing entirely... it's like the Japanese government, by trying to bail out the banks and other financial institutions over the last seven years, has prevented the Japanese economy from clearing entirely, and therefore the pain in Japan... we are now eight years into the recession, it's still there.

Negus: Do you think that Japan should in fact take the measures that are being suggested to them? Do you think they should make the reforms that are being asked of them?

Faber: But you see, the problem is that you go into these countries and you ask them to reform... the problem is that a number of these countries got into trouble because of the reforms they implemented in the first place. As a result of this globalisation drive a lot of countries opened up their financial markets... they opened up their markets for imports, and therefore they began to run very large trade and current account deficits, plus the money kept on coming in and created bubbles, and when the money exited it created these depressions we have today. So to say, yeah let's go and reform... concretely it's not all that easy.. Furthermore, different countries have different cultures. How do you want to force the Japanese to consume? They don't have homes like in America and Australia where you can park three cars in front of your house. They live in very small spaces - so how many beds, TV sets, furniture items can they buy? It's very limited. They consume to some extent by travelling overseas, that they do, but in addition to that if you look at Japan, the decline of interest rates since 1990 had the following impact. Assuming you are a Japanese and you have the equivalent of one million dollars on deposit at seven percent in 1990, and today you're getting one percent, what is your reaction to that?... to spend more, or to save more?

Negus: Is there a simple way to begin solving this problem?

Faber: It took Japan a long time to get into trouble, and it will take a while to get out of trouble. Having said that, if today someone would put a gun on my head and say "either you buy the Dow Jones in the United States, or the Japanese stock market", I would rather buy the Japanese stock market, because at least in Japan you have a country that has a large trade in current account surplus, whereas in the U.S. you have a country that essentially suffers from similar symptoms that the Asian countries suffered before the crisis - mainly large trade and current account deficits - and of course a lot of debt of the U.S is held by foreigners, and if one day the foreigners decide to exit the U.S. dollar and to sell these assets, the market will plunge. The European market and the U.S. market are up in the sky and will have a very rude awakening within the next two years where these markets could easily decline by fifty percent.

Negus: What's your ultimate prognosis - total breakdown, or do you think we'll stumble on for some time to come?

Faber: Well, personally I'm extremely concerned by the growth of wealth inequality in the world. The wealth inequality's manifested on two levels - inequality between the rich countries and the poor countries, which since 1990 has actually increased very dramatically, especially now following the currency devaluations - and wealth inequality in countries themselves. The typical worker in the Western world, or in Australia is today no better off than ten years ago. However, some people who participated in the bull market of financial assets... they have done extremely well. So you have this disparity between the super rich - the type like Bill Gates, who has a worth close to $US50 billion - and the average worker who's real income hasn't increased. And that in my opinion is bad, because the people who actually would like to consume - the workers and the people living in the third world or in developing countries... they don't have the money to consume - whereas the people who have the money, they already own everything, they don't need to consume anything. And therefore this may very well lead, according to the wealth inequality business cycle theory, to a serious economic downturn.

Negus: Marc Faber, it's always good to talk to you... and you've got to learn to say what you really believe, instead of hedging your bets. Thanks again.

Faber: (laughs) I don't think I hedged them too much.

The lastest from Dr. Michael Hudson

Finance Capitalism Hits a Wall

The Oligarchs’ Escape Plan – at the Treasury’s Expense

By Prof. Michael Hudson

The financial “wealth creation” game is over. Economies emerged from World War II relatively free of debt, but the 60-year global run-up has run its course. Finance capitalism is in a state of collapse, and marginal palliatives cannot revive it. The U.S. economy cannot “inflate its way out of debt,” because this would collapse the dollar and end its dreams of global empire by forcing foreign countries to go their own way. There is too little manufacturing to make the economy more “competitive,” given its high housing costs, transportation, debt and tax overhead. A quarter to a third of U.S. real estate has fallen into Negative Equity, so no banks will lend to them. The economy has hit a debt wall and is falling into Negative Equity, where it may remain for as far as the eye can see until there is a debt write-down.

February 18, 2009 "Global Research" -- - Mr. Obama’s “recovery” plan based on infrastructure spending will make real estate fortunes for well-situated properties along the new public transport routes, but there is no sign of cities levying a windfall property tax to save their finances. Their mayors would rather keep the cities broke than to tax real estate and finance. The aim is to re-inflate property markets to enable owners to pay the banks, not to help the public sector break even. So state and local pension plans will remain underfunded while more corporate pension plans go broke.

One would think that politicians would be willing to do the math and realize that debts that can’t be paid, won’t be. But the debts are being kept on the books, continuing to extract interest to pay the creditors that have made the bad loans. The resulting debt deflation threatens to keep the economy in depression until a radical shift in policy occurs – a shift to save the “real” economy, not just the financial sector and the wealthiest 10% of American families.

There is no sign that Mr. Obama’s economic advisors, Treasury officials and heads of the relevant Congressional committees recognize the need for a write-down. After all, they have been placed in their positions precisely because they do not understand that debt leveraging is a form of economic overhead, not real “wealth creation.” But their tunnel vision is what makes them “reliable” to Wall Street, which doesn’t like surprises. And the entire character of today’s financial crisis continues to be labeled “surprising” and “unexpected” by the press as each new surprisingly pessimistic statistic hits the news. It’s safe to be surprised; suspicious to have expected bad news and being a “premature doomsayer.” One must have faith in the system above all. And the system was the Greenspan Bubble. That is why “Ayn Rand Alan” was put in charge in the first place, after all.

So the government tries to recover the happy Bubble Economy years by getting debt growing again, hoping to re-inflate real estate and stock market prices. That was, after all, the Golden Age of finance capital’s world of using debt leverage to bid up the book-price of fictitious capital assets. Everyone loved it as long as it lasted. Voters thought they had a chance to become millionaires, and approved happily. And at least it made Wall Street richer than ever before – while almost doubling the share of wealth held by the wealthiest 1% of America’s families. For Washington policy makers, they are synonymous with “the economy” – at least the economy for which national economic policy is being formulated these days.

The Obama-Geithner plan to restart the Bubble Economy’s debt growth so as to inflate asset prices by enough to pay off the debt overhang out of new “capital gains” cannot possibly work. But that is the only trick these ponies know. We have entered an era of asset-price deflation, not inflation. Economic data charts throughout the world have hit a wall and every trend has been plunging vertically downward since last autumn. U.S. consumer prices experienced their fastest plunge since the Great Depression of the 1930s, along with consumer “confidence,” international shipping, real estate and stock market prices, oil and the exchange rate for British sterling. The global economy is falling into depression, and cannot recover until debts are written down.

Instead of doing this, the government is doing just the opposite. It is proposing to take bad debts onto the public-sector balance sheet, printing new Treasury bonds give the banks – bonds whose interest charges will have to be paid by taxing labor and industry.

The oligarchy’s plans for a bailout (at least of its own financial position)

In periods of looming collapse, wealthy elites protect their funds like rats fleeing a sinking ship. In times past they bought gold when currencies started to weaken. (Patriotism never has been a characteristic of cosmopolitan finance capital.) Since the 1950s the International Monetary Fund has made loans to support Third World exchange rates long enough to subsidize capital flight. In the United States over the past half-year, bankers and Wall Street investors have tapped the Treasury and Federal Reserve to support prices of their bad loans and financial gambles, buying out or guaranteeing $12 trillion of these junk debts. Protection for the U.S. financial elite thus takes the form of domestic public debt, not foreign currency.

It is all in vain as far as the real economy is concerned. When the Treasury gives banks newly printed government bonds in “cash for trash” swaps, it leaves today’s unpayably high private-sector debt in place. All that happens is that this debt is now owed to (or guaranteed by) the government, which will have to impose taxes to pay the interest charges.

The new twist is a variant on the IMF “stabilization” plans that lend money to central banks to support their currencies – for long enough to enable local oligarchs and foreign investors to move their savings and investments offshore at a good exchange rate. The currency then is permitted to collapse, enabling currency speculators to rake in enough gains to empty out the central bank’s reserves. Speculators view these central bank holdings as a target to be raided – the larger the better. The IMF will lend a central bank, say, $10 billion to “support the currency.” Domestic holders will flee the currency at a high exchange rate. Then, when the loan proceeds are depleted, the currency plunges. Wages are squeezed in the usual IMF austerity program, and the economy is forced to earn enough foreign exchange to pay back the IMF.

As a condition for getting this kind of IMF “support,” governments are told to run a budget surplus, cut back social spending, lower wages and raise taxes on labor so as to squeeze out enough exports to repay the IMF loans. But inasmuch as this kind “stabilization plan” cripples their domestic economy, they are obliged to sell off public infrastructure at distress prices – to foreign buyers who themselves borrow the money. The effect is to make such countries even more dependent on less “neoliberalized” economies.

Latvia is a poster child for this kind of disaster. Its recent agreement with Europe is a case in point. To help the Swedish banks withdraw their funds from the sinking ship, EU support is conditional on Latvia’s government agreeing to cut salaries in the private sector – and not to raise property taxes (currently almost zero).

The problem is that Latvia, like other post-Soviet economies, has scant domestic output to export. Industry throughout the former Soviet Union was torn up and scrapped in the 1990s. (Welcome to victorious finance capitalism, Western-style.) What they had was real estate and public infrastructure free of debt – and hence, available to be pledged as collateral for loans to finance their imports. Ever since its independence from Russia in 1991, Latvia has paid for its imported consumer goods and other purchases by borrowing mortgage credit in foreign currency from Scandinavian and other banks. The effect has been one of the world’s biggest property bubbles – in an economy with no means of breaking even except by loading down its real estate with more and more debt. In practice the loans took the form of mortgage borrowing from foreign banks to finance a real estate bubble – and their import dependency on foreign suppliers.

So instead of helping it and other post-Soviet nations develop self-reliant economies, the West has viewed them as economic oysters to be broken up to indebt them in order to extract interest charges and capital gains, leaving them empty shells. This policy crested on January 26, 2009, when Joaquin Almunia of the European Commission wrote a letter to Latvia’s Prime Minister spelling out the terms on which Europe will bail out the Swedish and other foreign banks operating in Latvia – at Latvia’s own expense:

Extended assistance is to be used to avoid a balance of payments crisis, which requires … restoring confidence in the banking sector [now entirely foreign owned], and bolstering the foreign reserves of the Bank of Latvia. This implies financing … outstanding government debt repayments (domestic and external). And if the banking sector were to experience adverse events, part of the assistance would be used for targeted capital infusions or appropriate short-term liquidity support. However, financial assistance is not meant to be used to originate new loans to businesses and households. …

… it is important not to raise ungrounded expectations among the general public and the social partners, and, equally, to counter misunderstandings that may arise in this respect. Worryingly, we have witnessed some recent evidence in Latvian public debate of calls for part of the financial assistance to be used inter alia for promoting export industries or to stimulate the economy through increased spending at large. It is important actively to stem these misperceptions.

Riots broke out last week, and protesters stormed the Latvian Treasury. Hardly surprising! There is no attempt to help Latvia develop the export capacity to cover its imports. After the domestic kleptocrats, foreign banks and investors have removed their funds from the economy, the Latvian lat will be permitted to depreciate. Foreign buyers then can come in and pick up local assets on the cheap once again.

The practice of European banks riding the crest of the post-Soviet real estate bubble is backfiring to wreck the European economies that have engaged in this predatory lending to neighboring economies as well. As one reporter has summarized:

In Poland 60 percent of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story. As an act of collective folly – by lenders and borrowers – it matches America’s sub-prime debacle. There is a crucial difference, however. European banks are on the hook for both. US banks are not. Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks.1

This was the West’s alternative to Stalinism. It did not help these countries emulate how Britain and America got rich by protectionist policies and publicly nurtured industrialization and infrastructure spending. Rather, the financial rape and industrial dismantling of the former Soviet economies was the most recent exercise in Western colonialism. At least U.S. investors were smart enough to stand clear and merely ride the stock market run-up before jumping ship.

But now, the government’s plan to “save” the economy is to “save the banks,” along similar lines to the West trying to save its banks from their adventure in the post-Soviet economies. This is the basic neoliberal economic plan, after all. The U.S. economy is about to be “post-Sovietized.”

The U.S. giveaway to banks, masquerading as “help for troubled homeowners”

The Obama bank bailout is arranged much like an IMF loan to support the exchange rate of foreign currency, but with the Treasury supporting financial asset prices for U.S. banks and other financial institutions. Instead of banks and oligarchs abandoning the dollar, the aim is to enable them to dump their bad mortgages and CDOs and get domestic Treasury bonds. Private-sector debt will be moved onto the U.S. Government balance sheet, where “taxpayers” will bear losses – mainly labor not Wall Street, inasmuch as the financial sector has been freed of income-tax liability by the “small print” in last autumn’s Paulson-Bush bailout package. But at least the U.S. Government is handling the situation entirely in domestic dollars.

As in Third World austerity programs, the effect of keeping the debts in place at the “real” economy’s expense will be to shrink the domestic U.S. market – while providing opportunities for hedge funds to pick up depreciated assets cheaply as the federal government, states and cities sell them off. This is called letting the banks “earn their way out of debt.” It’s strangling the “real” economy, because not a dollar of the government’s response has been devoted to reducing the overall debt volume.

Take the much-vaunted $50 billion program designed to renegotiate mortgages downward for “troubled homeowners.” Upon closer examination it turns out that the real beneficiaries are the giant leading banks such as Citibank and Bank of America that have made the bad loans. The Treasury will take on the bad debt that banks are stuck with, and will permit mortgagees to renegotiate their monthly payment down to 38% of their income. But rather than the banks taking the loss as they should do for over-lending, the Treasury itself will make up the difference – and pay it to the banks so that they will be able to get what they hoped to get. The hapless mortgage-burdened family stuck in their negative-equity home turns out to be merely a passive vehicle for the Treasury to pass debt relief on to the commercial banks.

Few news stories have made this clear, but the Financial Times spelled the details buried in small print.2 It added that the Treasury has not yet decided whether to write down the debt principal for the estimated 15 million families with negative equity (and perhaps 30 million by this time next year as property prices continue to plunge). No doubt a similar deal will be made: For every $100,000 of write-down in debt owed by over-mortgaged homeowners, the bank will receive $100,000 from the Treasury. Government debt will rise by $100,000, and the process will continue until the Treasury has transferred $50,000,000 to the banks that made the reckless loans.

There is enough for just 500 of these renegotiations of $100,000 each. Hardly enough to make much of a dent, but the principle has been put in place for many further bailouts. It will take almost an infinity of them, as long as the Treasury tries to support the fiction that “the miracle of compound interest” can be sustained for long. The danger is the economy may be dead by the time saner economic understanding penetrates the public consciousness. In the mean time, bad private-sector debt will be shifted onto the government’s balance sheet. Interest and amortization currently owed to the banks will be replaced by obligations to the U.S. Treasury. Taxes will be levied to make up the bad debts with which the government is stuck. The “real” economy will pay Wall Street – and will be paying for decades!

Calling the $12 trillion giveaway to bankers a “subprime crisis” makes it appear that bleeding-heart liberals got Fannie Mae and Freddie Mac into trouble by insisting that these public-private institutions make irresponsible loans to the poor. The party line is, “Blame the victim.” But we know this is false. The bulk of bad loans are concentrated in the largest banks. It was Countrywide and other banksters that led the irresponsible lending and brought heavy-handed pressure on Fannie Mae. Most of the nation’s smaller, local banks didn’t make such reckless loans. The big mortgage shops didn’t care about loan quality, because they were run by salesmen. The Treasury is paying off the gamblers and billionaires by supporting the value of bank loans, investments and derivative gambles, leaving the Treasury in debt.

U.S./post-Soviet Convergence?

It may be time to look once again at what Larry Summers and his Rubinomics gang did in Russia in the mid-1990s and to Third World countries during his tenure as World Bank economist to see what kind of future is being planned for the U.S. economy over the next few years. Throughout the Soviet Union the neoliberal model established “equilibrium” in a way that involved demographic collapse: shortening life spans, lower birth rates, alcoholism and drug abuse, psychological depression, suicides, bad health, unemployment and homelessness for the elderly (the neoliberal mode of Social Security reform).

Back in the 1970s, people speculated whether the US and Soviet economies were converging. Throughout the 20th century, of course, everyone expected government regulation, infrastructure investment and planning to increase. It looked like the spread of democratically elected governments would go hand in hand with people voting in their own economic interest to raise living standards, thereby closing the inequality gap.

This is not the kind of convergence that has occurred since 1991. Government power is being dismantled, living standards have stagnated and wealth is concentrating at the top of the economic pyramid. Economic planning and resource allocation has passed into the hands of Wall Street, whose alternative to Hayek’s “road to serfdom” is debt peonage for the economy at large. There does need to be a strong state, to be sure, to keep the financial and real estate rentier power in place. But the West’s alternative to the old Soviet bureaucracy is a financial planning. In place of a political overhead, we have a financial and real estate overhead.

Stalinist Russia and Maoist China achieved high technology without land-rent, monopoly rent and interest overhead. This purging of rentier income was the historical task of classical political economy, and it became that of socialism. The aim was to create a Clean Slate financially, bringing prices in line with technologically necessary costs of production. The aim was to provide everyone with the fruits of their labor rather than letting banks and landlords siphon off the economic surplus.

Ideas of economic efficiency and “wealth creation” today are an utterly different kind of liberalism and “free markets.” Commercial banks lend money not to increase production but to inflate asset prices. Some 70% of bank loans are mortgage loans for real estate, and most of the rest is for corporate takeovers and raids, to finance stock buy-backs or simply to pay dividends. Asset-price inflation obliges people to go deeper into debt than ever before to obtain access to housing, education and medical care. The economy is being “financialized,” not industrialized. This has been the plan as much for the post-Soviet states as for North America, Western Europe and the Third World.

But we are far from having reached the end of the line. Celebrations that our present financialized economy represents the “end of history” are laughingly premature. Today’s policies look more like a dead end. But that does not mean that, like the Roman Empire, they won’t lead us down toward a new Dark Age. That’s what tends to happen when oligarchies do the planning.

Is America a Failed Economy?

It may be time to ask whether neoliberal pro-rentier economics has turned America and the West into a Failed Economy. Is there really no alternative? Have the neoliberals made the shift of planning from governments to the financial oligarchy irreversible?

Let’s first dispose of the “foundation myth” of the idea still guiding the United States and Europe. Free-market economists pretend that prices can be brought into line most efficiently with technologically necessary costs of production under capitalism, and indeed, under finance capitalism. The banks and stock market are supposed to allocate resources most efficiency. That at least is the dream of self-regulating markets. But today it looks like only a myth, public relations patter talk to get a generation of increasingly indebted voters not to act in their own self-interest.

Industrial capitalism always has been a hybrid, a symbiosis with its feudal legacy of absentee property ownership, oligarchic finance and public debts rather than the government acting as net creditor. The essence of feudalism was extractive, not productive. That is why it created industrial capitalism as State Policy in the first place – if only to increase its war-making powers. But the question must now be raised as to whether only socialism can complete the historical task that classical political economy set out for itself – the ideal that futurists in the 19th and 20th centuries believed that an unpurified capitalism might still be able bring about without shedding its legacy of commercial banking indebting property and carving infrastructure out of the public domain.

Today it is easier to see that the Western economies cannot go on the way they have been. They have reached the point where the debts exceed the ability to pay. Instead of recognizing this fact and scaling debts back into line with the ability to pay, the Obama-Geithner plan is to bail out the big banks and hedge funds, keeping the volume of debt in place and indeed, growing once again through the “magic of compound interest.” The result can only be an increasingly extractive economy, until households, real estate and industrial companies, states and cities, and the national government itself is driven into debt peonage.

The alternative is a century and a half old, and emerged out of the ideals of the classical economic doctrines of Adam Smith, David Ricardo, John Stuart Mill, and the last great classical economist, Marx. Their common denominator was to view rent and interest are extractive, not productive. Classical political economy and its successor Progressive Era socialism sought to nationalize the land (or at least to fully tax its rent as the fiscal base). Governments were to create their own credit, not leave this function to wealthy elites via a bank monopoly on credit creation. So today’s neoliberalism paints a false picture of what the classical economists envisioned as free markets. They were markets free of economic rent and interest (and taxes to support an aristocracy or oligarchy). Socialism was to free economies from these overhead charges. Today’s Obama-Geithner rescue plan is just the reverse.


1 Ambrose Evans-Pritchard, “If Eastern Europe falls, world is next,” The Telegraph, February 14, 2009.

2 Krishna Guha, “US closes in on subsidy plan to stop foreclosures,” Financial Times, February 13, 2009.

© Copyright Michael Hudson, Global Research, 2009