Apr 7, 2009
U.S. Preparing a Military Response to Coming Social Chaos
As the shocking confidential information contained in this briefing shows, the threat of social meltdown and chaos is so large a domestic law-enforcement arm of the U.S. military (referred to by The Army Times as the "Consequence Management Response Force") has been created to deal with what U.S. officials believe to be a coming, unprecedented wave of massive social chaos.
Later I'll show you why many Washington insiders (including officials directly involved in homeland security) are personally making emergency preparations for social chaos. In addition, outgoing Treasury Secretary Hank Paulson told Sen. James Inhofe and Rep. Brad Sherman that so much financial mayhem lies ahead U.S. troops may have to impose martial law to deal with social unrest. Yes, U.S. Officials Are Quietly Preparing for BIG Trouble Ahead
A new report by the Army War College's Strategic Studies Institute states flatly the U.S. military must prepare for "a violent, strategic dislocation inside the United States" that could be provoked by "unforeseen economic collapse" or "loss of functioning political and legal order."
Late last year, The Washington Post noted the incoming Obama Administration is going to "earmark" at least 20,000 troops returning from Iraq to deal with "domestic emergencies." Since then, the Army Times has broken the story that the domestic emergency army unit has been increased to 80,000 troops, who are being trained right now in Georgia.
In short, U.S. officials expect big trouble ahead - but they are not warning the general public about the danger (much less urge the unsuspecting masses to make basic preparations).... Read all here
See here for more: 21st Century Internment Camps: Disaster relief or civil rights disaster? - The National Emergency Centers Establishment Act - by Maha Zimmo, Global Research, April 8, 2009
"...The bulls will be whacked when the Dow falls another 50% from its low – down to, say, below 4,000. The bears will be whacked when the Fed seems unable to stop deflation... and the prices in the mining and commodities sectors collapse. Then, the spenders will be trapped in a burning house of debt – with the door barred by deflation. Later, the roof will fall on the savers too – when the feds finally manage to get an inflation backfire going. The fire will get away from them immediately, we predict, burning up trillions worth of savings overnight. ..." Read all here
- IMF to raise forecast for toxic asset write-offs to $3.1 trillion for US originated paper, and almost $1 trillion for European and Asian orginated paper;
- A Deutsche Bank report suggests that US junk bond default rate will rise to 53%;
- Lawrence Kotlikoff and Jeffrey Sachs says the Geithner is even worse than they thought, as it allows banks to set up vehicles to bid for the bank's own toxic assets;
- Paul Krugman compares this to a legal form of insider dealing;
- Barry Eichengreen and Kevin O'Rourke have found that global trade, industrial production and stock markets are falling faster now than during the Great Depression;
- Brad Setser has produced a striking chart about the fall in global financial flows -quite scary;
- The euro area's policy establishment condemns the leaked IMF proposals for fast track CEE euroisation as unrealistic;
by Mike Whitney on Global Research, April 6, 2009. Extracts:
"Fed chief Ben Bernanke has embarked on the most radical and ruinous financial rescue plan in history. According to Bloomberg News, the Fed has already lent or committed $12.8 trillion trying to stabilize the financial system after the the bursting of Wall Street’s speculative mega-bubble. Now Bernanke wants to dig an even bigger hole, by creating programs that will provide up to $2 trillion of credit to financial institutions that purchase toxic assets from banks or securities backed by consumer loans. The Fed’s generous terms are expected to generate a flurry of speculation which will help strengthen the banking system while leaving the taxpayer to bear the losses. It is impossible to know what the long-term effects of Bernanke’s excessive spending will be, but his plan has the potential to trigger hyperinflation or spark a run on the dollar. ...
...The recent 22 percent uptick in the stock market is a sign that Bernanke’s monetary stimulus is beginning to kick in. Oil rose from $33 per barrel to over $50 in little more than a month. Other raw materials have followed oil. The dollar has plunged every time the stock market has gone up. These are all signs of nascent inflation which is likely to accelerate after the current period of deleveraging ends. Food and energy prices will rise sharply and the dollar will come under greater and greater pressure. This is Bernanke’s nightmare scenario; a surge in inflation that forces him to raise rates and kill the recovery before it ever begins....
...Bernanke’s approach to the crisis has been wrongheaded from the get-go. It makes no sense to commit nearly $13 trillion to prop up a grossly oversized financial system while providing less than $900 billion stimulus for the real economy. The whole plan is upside-down. It’s consumers, homeowners and workers that create demand (consumer spending is 72 percent of GDP) and yet, they’ve been left to twist in the wind while the bulk of the resources have been directed to financial speculators who are responsible for the mess. Middle class families have seen their retirements slashed in half and their home equity vanish, while their jobs become increasingly less secure. The Fed and the Treasury should be focused on debt relief, mortgage cram-downs, jobs programs and open-ended support for state and local governments. Rebuilding the financial infrastructure for extending more credit to people that are already underwater is beyond shortsighted; its cruel. The financial system needs to shrink to fit the new reality of a smaller economy. That means that Bernanke should aggressively mark-down the dodgy collateral he’s been accepting (the collateral should reflect current market prices) and force many of the weaker institutions into bankruptcy. This is the fairest and fastest way to shake the deadwood from the financial system. Keeping asset prices artificially inflated only puts off the inevitable day of reckoning....
...Securitzation is dead, and yet, Bernanke and Geithner want to shovel another $2 trillion into this black hole hoping to lure investors back to the market. Why? Because Wall Street financiers and bank mandarins see securitization as an efficient model that can be exported into any market around the world. The repackaging of debt into complex instruments, that can be stealthily created in off balance sheet operations requiring smaller and smaller slices of capital, is the essential flimflam product that Wall Street intends to use to dominate global financial markets. Keeping secutization alive is ultimately about power; pure, unalloyed economic power. That is why Bernanke will spare no expense trying to resuscitate this failed system.
What’s so destructive about securitization is that it allows the banks to create credit out of thin air through unregulated, clandestine operations, which eliminate transparency and makes it impossible for the Fed to control the money supply.... In other words, securitization created incentives for fraud, which is why the system eventually collapsed. Still, Bernanke is determined to do Wall Street’s bidding and spend another $2 trillion trying to rev up the securitization engine...." Read all here
More on A-Huff
More from Telegraph: "Struggling US towns print their own currency -If you're fresh out of dollars, perhaps a Detroit Cheer, Bay Back or BerkShare will do."
More from the Ruff Times newsletter:
Life Will Find a Way
As the deflation and inflation monsters continue their colossal slugfest, battling each other over the economic destiny of the US and the world, it might make sense to take a peek at what happened during the Great Depression when deflation ruled the day.
Back then, dollars were scarce. Really scarce. That didn’t mean, however, people were left without a means of exchange. “Anytime the government can’t or won’t provide money, people have used scrip,” Neil Shafer, an author of catalogs of scrip and currencies, was quoted as saying in a Forbes article entitled, Substitute Money.
Scrip is substitute money. Subway tokens, airline tickets, buckslips, coupons, anything that takes the place of currency and may serve as a practical form of credit, could be defined as scrip.
In the 30s, when people couldn’t get their hands on dollars, scrip was a practical, acceptable alternative.
It wasn’t just everyday people who made good use of scrip, either.
“Auburn University in Alabama paid its professors and employees in scrip during the Depression, like a lot of other cash-strapped institutions. Society went along with it because it was a way of preventing the loss of a local institution through bankruptcy,” wrote Liz Moyer, author of Substitute Money.
Obviously, Auburn survived the Depression and has remained one of today’s great universities. Other institutions and communities back then survived by being resourceful enough to follow Auburn’s example, but scrip wasn’t the only means of exchange.
In addition to scrip, some communities actually issued their own currencies in the hopes of sustaining their economies. There were literally thousands of local currencies in use during the Great Depression.
Interestingly enough, the idea seems to be making a comeback.
Today, a number of communities are trying to boost their sagging economies by promoting the local currency idea. Some examples include “Ithaca Hours” in Ithaca, New York, “Bay Bucks” in Traverse City, Michigan, “Burlington Bread” in Burlington, Vermont and “Berkshares” in Massachusetts--all funny money honored by local merchants of every sort.
It’s kind of like that saying in Jurassic Park: “Life will find a way.”
Is there any doubt, in the absence of a meaningful dollar—either through its scarcity (as in a deflation) or relative worthlessness (as in a hyperinflation)—that local currencies would flourish as they once did during the Great Depression?
"As long as the threat from Iran persists, we will go forward with a missile defence system that is cost-effective and proven," US President Barack Obama said in his public address in Prague. "Iran's nuclear and ballistic missile activity poses a real threat, not just to the United States, but to Iran's neighbours and our allies." Read here
More: Obama Goes Ahead With Missile Defense Shield Despite Disarmament Pledge
A record 4.2% of consumer loans were delinquent at least 30 days in the fourth quarter, the latest data available, according to the Federal Reserve. Another 4% of consumer loans were in default, meaning they'd been written off by lenders... Read - USA Today
More: Personal insolvencies 'to rise by 40pc' as Debt Relief Orders are introduced
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