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Aug 15, 2010

The Opium Wars in Afghanistan

From A-W-I-P, 08/15/10

By Alfred W. McCoy
In ways that have escaped most observers, the Obama administration is now trapped in an endless cycle of drugs and death in Afghanistan from which there is neither an easy end nor an obvious exit.
After a year of cautious debate and costly deployments, President Obama finally launched his new Afghan war strategy at 2:40 am on February 13, 2010, in a remote market town called Marja in southern Afghanistan's Helmand Province. As a wave of helicopters descended on Marja's outskirts spitting up clouds of dust, hundreds of U.S. Marines dashed through fields sprouting opium poppies toward the town's mud-walled compounds.
After a week of fighting, U.S. war commander General Stanley A. McChrystal choppered into town with Afghanistan's vice-president and Helmand's provincial governor. Their mission: a media roll-out for the general's new-look counterinsurgency strategy based on bringing government to remote villages just like Marja.
At a carefully staged meet-and-greet with some 200 villagers, however, the vice-president and provincial governor faced some unexpected, unscripted anger. "If they come with tractors," one Afghani widow announced to a chorus of supportive shouts from her fellow farmers, "they will have to roll over me and kill me before they can kill my poppy." For these poppy growers and thousands more like them, the return of government control, however contested, brought with it a perilous threat: opium eradication.
Throughout all the shooting and shouting, American commanders seemed strangely unaware that Marja might qualify as the world's heroin capital -- with hundreds of laboratories, reputedly hidden inside the area's mud-brick houses, regularly processing the local poppy crop into high-grade heroin. After all, the surrounding fields of Helmand Province produce a remarkable 40% of the world's illicit opium supply, and much of this harvest has been traded in Marja. Rushing through those opium fields to attack the Taliban on day one of this offensive, the Marines missed their real enemy, the ultimate force behind the Taliban insurgency, as they pursued just the latest crop of peasant guerrillas whose guns and wages are funded by those poppy plants. "You can't win this war," said one U.S. Embassy official just back from inspecting these opium districts, "without taking on drug production in Helmand Province."
Indeed, as Air Force One headed for Kabul Sunday, National Security Adviser James L. Jones assured reporters that President Obama would try to persuade Afghan President Hamid Karzai to prioritize "battling corruption, taking the fight to the narco-traffickers." The drug trade, he added, "provides a lot of the economic engine for the insurgents."
Just as these Marja farmers spoiled General McChrystal's media event, so their crop has subverted every regime that has tried to rule Afghanistan for the past 30 years. During the CIA's covert war in the 1980s, opium financed the mujahedeen or "freedom fighters" (as President Ronald Reagan called them) who finally forced the Soviets to abandon the country and then defeated its Marxist client state.
In the late 1990s, the Taliban, which had taken power in most of the country, lost any chance for international legitimacy by protecting and profiting from opium -- and then, ironically, fell from power only months after reversing course and banning the crop. Since the US military intervened in 2001, a rising tide of opium has corrupted the government in Kabul while empowering a resurgent Taliban whose guerrillas have taken control of ever larger parts of the Afghan countryside.
These three eras of almost constant warfare fueled a relentless rise in Afghanistan's opium harvest -- from just 250 tons in 1979 to 8,200 tons in 2007. For the past five years, the Afghan opium harvest has accounted for as much as 50% of the country's gross domestic product (GDP) and provided the prime ingredient for over 90% of the world's heroin supply.
The ecological devastation and societal dislocation from these three war-torn decades has woven opium so deeply into the Afghan grain that it defies solution by Washington's best and brightest (as well as its most inept and least competent). Caroming between ignoring the opium crop and demanding its total eradication, the Bush administration dithered for seven years while heroin boomed, and in doing so helped create a drug economy that corrupted and crippled the government of its ally, President Karzai. In recent years, opium farming has supported 500,000 Afghan families, nearly 20% of the country's estimated population, and funds a Taliban insurgency that has, since 2006, spread across the countryside.
To understand the Afghan War, one basic point must be grasped: in poor nations with weak state services, agriculture is the foundation for all politics, binding villagers to the government or warlords or rebels. The ultimate aim of counterinsurgency strategy is always to establish the state's authority. When the economy is illicit and by definition beyond government control, this task becomes monumental. If the insurgents capture that illicit economy, as the Taliban have done, then the task becomes little short of insurmountable.
Opium is an illegal drug, but Afghanistan's poppy crop is still grounded in networks of social trust that tie people together at each step in the chain of production. Crop loans are necessary for planting, labor exchange for harvesting, stability for marketing, and security for shipment. So dominant and problematic is the opium economy in Afghanistan today that a question Washington has avoided for the past nine years must be asked: Can anyone pacify a full-blown narco-state?
The answer to this critical question lies in the history of the three Afghan wars in which Washington has been involved over the past 30 years -- the CIA covert warfare of the 1980s, the civil war of the 1990s (fueled at its start by $900 million in CIA funding), and since 2001, the U.S. invasion, occupation, and counterinsurgency campaigns. In each of these conflicts, Washington has tolerated drug trafficking by its Afghan allies as the price of military success -- a policy of benign neglect that has helped make Afghanistan today the world's number one narco-state.
CIA Covert Warfare, Spreading Poppy Fields, and Drug Labs: the 1980s
Opium first emerged as a key force in Afghan politics during the CIA covert war against the Soviets, the last in a series of secret operations that it conducted along the mountain rim-lands of Asia which stretch for 5,000 miles from Turkey to Thailand. In the late 1940s, as the Cold War was revving up, the United States first mounted covert probes of communism's Asian underbelly. For 40 years thereafter, the CIA fought a succession of secret wars along this mountain rim -- in Burma during the 1950s, Laos in the 1960s, and Afghanistan in the 1980s. In one of history's ironic accidents, the southern reach of communist China and the Soviet Union had coincided with Asia's opium zone along this same mountain rim, drawing the CIA into ambiguous alliances with the region's highland warlords.
Washington's first Afghan war began in 1979, when the Soviet Union invaded the country to save a Marxist client regime in Kabul, the Afghan capital. Seeing an opportunity to wound its Cold War enemy, the Reagan administration worked closely with Pakistan's military dictatorship in a ten-year CIA campaign to expel the Soviets.
This was, however, a covert operation unlike any other in the Cold War years. First, the collision of CIA secret operations and Soviet conventional warfare led to the devastation of Afghanistan's fragile highland ecology, damaging its traditional agriculture beyond immediate recovery, and fostering a growing dependence on the international drug trade. Of equal import, instead of conducting this covert warfare on its own as it had in Laos in the Vietnam War years, the CIA outsourced much of the operation to Pakistan's Inter-Service Intelligence (ISI), which soon became a powerful and ever more problematic ally.
When the ISI proposed its Afghan client, Gulbuddin Hekmatyar, as overall leader of the anti-Soviet resistance, Washington -- with few alternatives -- agreed. Over the next 10 years, the CIA supplied some $2 billion to Afghanistan's mujahedeen through the ISI, half to Hekmatyar, a violent fundamentalist infamous for throwing acid at unveiled women at Kabul University and, later, murdering rival resistance leaders. As the CIA operation was winding down in May 1990, the Washington Post published a front-page article charging that its key ally, Hekmatyar, was operating a chain of heroin laboratories inside Pakistan under the protection of the ISI.
Although this area had zero heroin production in the mid-1970s, the CIA's covert war served as the catalyst that transformed the Afghan-Pakistan borderlands into the world's largest heroin producing region. As mujahedeen guerrillas captured prime agricultural areas inside Afghanistan in the early 1980s, they began collecting a revolutionary poppy tax from their peasant supporters.
Once the Afghan guerrillas brought the opium across the border, they sold it to hundreds of Pakistani heroin labs operating under the ISI's protection. Between 1981 and 1990, Afghanistan's opium production grew ten-fold -- from 250 tons to 2,000 tons. After just two years of covert CIA support for the Afghan guerrillas, the U.S. Attorney General announced in 1981 that Pakistan was already the source of 60% of the American heroin supply. Across Europe and Russia, Afghan-Pakistani heroin soon captured an even larger share of local markets, while inside Pakistan itself the number of addicts soared from zero in 1979 to 1.2 million just five years later.
After investing $3 billion in Afghanistan's destruction, Washington just walked away in 1992, leaving behind a thoroughly ravaged country with over one million dead, five million refugees, 10-20 million landmines still in place, an infrastructure in ruins, an economy in tatters, and well-armed tribal warlords prepared to fight among themselves for control of the capital. Even when Washington finally cut its covert CIA funding at the end of 1991, however, Pakistan's ISI continued to back favored local warlords in pursuit of its long-term goal of installing a Pashtun client regime in Kabul.
Druglords, Dragon's Teeth, and Civil Wars: the 1990s
Throughout the 1990s, ruthless local warlords mixed guns and opium in a lethal brew as part of a brutal struggle for power. It was almost as if the soil had been sown with those dragons' teeth of ancient myth that can suddenly sprout into an army of full-grown warriors, who leap from the earth with swords drawn for war.
When northern resistance forces finally captured Kabul from the communist regime, which had outlasted the Soviet withdrawal by three years, Pakistan still backed its client Hekmatyar. He, in turn, unleashed his artillery on the besieged capital. The result: the deaths of an estimated 50,000 more Afghans. Even a slaughter of such monumental proportions, however, could not win power for this unpopular fundamentalist. So the ISI armed a new force, the Taliban and in September 1996, it succeeded in capturing Kabul, only to fight the Northern Alliance for the next five years in the valleys to the north of the capital.
During this seemingly unending civil war, rival factions leaned heavily on opium to finance the fighting, more than doubling the harvest to 4,600 tons by 1999. Throughout these two decades of warfare and a twenty-fold jump in drug production, Afghanistan itself was slowly transformed from a diverse agricultural ecosystem -- with herding, orchards, and over 60 food crops -- into the world's first economy dependent on the production of a single illicit drug. In the process, a fragile human ecology was brought to ruin in an unprecedented way.
Located at the northern edge of the annual monsoon rains, where clouds arrive from the Arabian Sea already squeezed dry, Afghanistan is an arid land. Its staple food crops have historically been sustained by irrigation systems that rely on snowmelt from the region's high mountains. To supplement staples such as wheat, Afghan tribesmen herded vast flocks of sheep and goats hundreds of miles every year to summer pasture in the central uplands. Most important of all, farmers planted perennial tree crops -- walnut, pistachio, and mulberry -- which thrived because they sink their roots deep into the soil and are remarkably resistant to the region's periodic droughts, offering relief from the threat of famine in the dry years.
During these two decades of war, however, modern firepower devastated the herds, damaged snowmelt irrigation systems, and destroyed many of the orchards. While the Soviets simply blasted the landscape with firepower, the Taliban, with an unerring instinct for their society's economic jugular, violated the unwritten rules of traditional Afghan warfare by cutting down the orchards on the vast Shamali plain north of Kabul.
All these strands of destruction knit themselves into a veritable Gordian knot of human suffering to which opium became the sole solution. Like Alexander's legendary sword, it offered a straightforward way to cut through a complex conundrum. Without any aid to restock their herds, reseed their fields, or replant their orchards, Afghan farmers -- including some 3 million returning refugees -- found sustenance in opium, which had historically been but a small part of their agriculture.
Since poppy cultivation requires nine times more labor per hectare than wheat, opium offered immediate seasonal employment to more than a million Afghans -- perhaps half of those actually employed at the time. In this ruined land and ravaged economy, opium merchants alone could accumulate capital rapidly and so give poppy farmers crop loans equivalent to more than half their annual incomes, credit critical to the survival of many poor villagers.
In marked contrast to the marginal yields the country's harsh climate offers most food crops, Afghanistan proved ideal for opium. On average, each hectare of Afghan poppy land produces three to five times more than its chief competitor, Burma. Most important of all, in such an arid ecosystem, subject to periodic drought, opium uses less than half the water needed for staples such as wheat.
After taking power in 1996, the Taliban regime encouraged a nationwide expansion of opium cultivation, doubling production to 4,600 tons, then equivalent to 75% of the world's heroin supply. Signaling its support for drug production, the Taliban regime began collecting a 20% tax from the yearly opium harvest, earning an estimated $100 million in revenues.
In retrospect, the regime's most important innovation was undoubtedly the introduction of large-scale heroin refining in the environs of the city of Jalalabad. There, hundreds of crude labs set to work, paying only a modest production tax of $70 on every kilo of heroin powder. According to U.N. researchers, the Taliban also presided over bustling regional opium markets in Helmand and Nangarhar provinces, protecting some 240 top traders there.
During the 1990s, Afghanistan's soaring opium harvest fueled an international smuggling trade that tied Central Asia, Russia, and Europe into a vast illicit market of arms, drugs, and money-laundering. It also helped fuel an eruption of ethnic insurgency across a 3,000-mile swath of land from Uzbekistan in Central Asia to Bosnia in the Balkans.
In July 2000, however, the Taliban leader Mullah Omar suddenly ordered a ban on all opium cultivation in a desperate bid for international recognition. Remarkably enough, almost overnight the Taliban regime used the ruthless repression for which it was infamous to slash the opium harvest by 94% to only 185 metric tons.
By then, however, Afghanistan had become dependent on poppy production for most of its taxes, export income, and employment. In effect, the Taliban's ban was an act of economic suicide that brought an already weakened society to the brink of collapse. This was the unwitting weapon the U.S. wielded when it began its military campaign against the Taliban in October 2001. Without opium, the regime was already a hollow shell and essentially imploded at the bursting of the first American bombs.
The Return of the CIA, Opium, and Counterinsurgency: 2001-
To defeat the Taliban in the aftermath of 9/11, the CIA successfully mobilized former warlords long active in the heroin trade to seize towns and cities across eastern Afghanistan. In other words, the Agency and its local allies created ideal conditions for reversing the Taliban's opium ban and reviving the drug traffic. Only weeks after the collapse of the Taliban, officials were reporting an outburst of poppy planting in the heroin-heartlands of Helmand and Nangarhar. At a Tokyo international donors' conference in January 2002, Hamid Karzai, the new Prime Minister put in place by the Bush administration, issued a pro forma ban on opium growing -- without any means of enforcing it against the power of these resurgent local warlords.
After investing some three billion dollars in Afghanistan's destruction during the Cold War, Washington and its allies now proved parsimonious in the reconstruction funds they offered. At that 2002 Tokyo conference, international donors promised just four billion dollars of an estimated $10 billion needed to rebuild the economy over the next five years. In addition, the total U.S. spending of $22 billion for Afghanistan from 2003 to 2007 turned out to be skewed sharply toward military operations, leaving, for instance, just $237 million for agriculture. (And as in Iraq, significant sums from what reconstruction funds were available simply went into the pockets of Western experts, private contractors, and their local counterparts.)
Under these circumstances, no one should have been surprised when, during the first year of the U.S. occupation, Afghanistan's opium harvest surged to 3,400 tons. Over the next five years, international donors would contribute $8 billion to rebuild Afghanistan, while opium would infuse nearly twice that amount, $14 billion, directly into the rural economy without any deductions by either those Western experts or Kabul's bloated bureaucracy.
While opium production continued its relentless rise, the Bush administration downplayed the problem, outsourcing narcotics control to Great Britain and police training to Germany. As the lead agency in Allied operations, Donald Rumsfeld's Defense Department regarded opium as a distraction from its main mission of defeating the Taliban (and, of course, invading Iraq). Waving away the problem in late 2004, President Bush said he did not want to "waste another American life on a narco-state.'' Meanwhile, in their counterinsurgency operations, U.S. forces worked closely with local warlords who proved to be leading druglords.
After five years of the U.S. occupation, Afghanistan's drug production had swelled to unprecedented proportions. In August 2007, the U.N. reported that the country's record opium crop covered almost 500,000 acres, an area larger than all the coca fields in Latin America. From a modest 185 tons at the start of American intervention in 2001, Afghanistan now produced 8,200 tons of opium, a remarkable 53% of the country's GDP and 93% of global heroin supply.
In this way, Afghanistan became the world's first true "narco-state." If a cocaine traffic that provided just 3% of Colombia's GDP could bring in its wake endless violence and powerful cartels capable of corrupting that country's government, then we can only imagine the consequences of Afghanistan's dependence on opium for more than 50% of its entire economy.
At a drug conference in Kabul this month, the head of Russia's Federal Narcotics Service estimated the value of Afghanistan's current opium crop at $65 billion. Only $500 million of that vast sum goes to Afghanistan's farmers, $300 million to the Taliban guerrillas, and the $64 billion balance "to the drug mafia," leaving ample funds to corrupt the Karzai government in a nation whose total GDP is only $10 billion.
Indeed, opium's influence is so pervasive that many Afghan officials, from village leaders to Kabul's police chief, the defense minister, and the president's brother, have been tainted by the traffic. So cancerous and crippling is this corruption that, according to recent U.N. estimates, Afghans are forced to spend a stunning $2.5 billion in bribes. Not surprisingly, the government's repeated attempts at opium eradication have been thoroughly compromised by what the U.N. has called "corrupt deals between field owners, village elders, and eradication teams."
Not only have drug taxes funded an expanding guerrilla force, but the Taliban's role in protecting opium farmers and the heroin merchants who rely on their crop gives them real control over the core of the country's economy. In January 2009, the U.N. and anonymous U.S. "intelligence officials" estimated that drug traffic provided Taliban insurgents with $400 million a year. "Clearly," commented Defense Secretary Robert Gates, "we have to go after the drug labs and the druglords that provide support to the Taliban and other insurgents."
In mid-2009, the U.S. embassy launched a multi-agency effort, called the Afghan Threat Finance Cell, to cut Taliban drug monies through financial controls. But one American official soon compared this effort to "punching jello." By August 2009, a frustrated Obama administration had ordered the U.S. military to "kill or capture" 50 Taliban-connected druglords who were placed on a classified "kill list."
Since the record crop of 2007, opium production has, in fact, declined somewhat -- to 6,900 tons last year (still over 90% of the world's opium supply). While U.N. analysts attribute this 20% reduction largely to eradication efforts, a more likely cause has been the global glut of heroin that came with the Afghan opium boom, and which had depressed the price of poppies by 34%. In fact, even this reduced Afghan opium crop is still far above total world demand, which the U.N. estimates at 5,000 tons per annum.
Preliminary reports on the 2010 Afghan opium harvest, which starts next month, indicate that the drug problem is not going away. Some U.S. officials who have surveyed Helmand's opium heartland see signs of an expanded crop. Even the U.N. drug experts who have predicted a continuing decline in production are not optimistic about long-term trends. Opium prices might decline for a few years, but the price of wheat and other staple crops is dropping even faster, leaving poppies as by far the most profitable crop for poor Afghan farmers.
Ending the Cycle of Drugs and Death
With its forces now planted in the dragon's teeth soil of Afghanistan, Washington is locked into what looks to be an unending cycle of drugs and death. Every spring in those rugged mountains, the snows melt, the opium seeds sprout, and a fresh crop of Taliban fighters takes to the field, many to die by lethal American fire. And the next year, the snows melt again, fresh poppy shoots break through the soil, and a new crop of teen-aged Taliban fighters pick up arms against America, spilling more blood. This cycle has been repeated for the past ten years and, unless something changes, can continue indefinitely.
Is there any alternative? Even were the cost of rebuilding Afghanistan's rural economy -- with its orchards, flocks, and food crops -- as high as $30 billion or, for that matter, $90 billion dollars, the money is at hand. By conservative estimates, the cost of President Obama's ongoing surge of 30,000 troops alone is $30 billion a year. So just bringing those 30,000 troops home would create ample funds to begin the rebuilding of rural life in Afghanistan, making it possible for young farmers to begin feeding their families without joining the Taliban's army.
Short of another precipitous withdrawal akin to 1991, Washington has no realistic alternative to the costly, long-term reconstruction of Afghanistan's agriculture. Beneath the gaze of an allied force that now numbers about 120,000 soldiers, opium has fueled the Taliban's growth into an omnipresent shadow government and an effective guerrilla army. The idea that our expanded military presence might soon succeed in driving back that force and handing over pacification to the illiterate, drug-addicted Afghan police and army remains, for the time being, a fantasy. Quick fixes like paying poppy farmers not to plant, something British and Americans have both tried, can backfire and end up actually promoting yet more opium cultivation. Rapid drug eradication without alternative employment, something the private contractor DynCorp tried so disastrously under a $150 million contract in 2005, would simply plunge Afghanistan into more misery, stoking mass anger and destabilizing the Kabul government further.
So the choice is clear enough: we can continue to fertilize this deadly soil with yet more blood in a brutal war with an uncertain outcome -- for both the United States and the people of Afghanistan. Or we can begin to withdraw American forces while helping renew this ancient, arid land by replanting its orchards, replenishing its flocks, and rebuilding the irrigation systems ruined in decades of war.
At this point, our only realistic choice is this sort of serious rural development -- that is, reconstructing the Afghan countryside through countless small-scale projects until food crops become a viable alternative to opium. To put it simply, so simply that even Washington might understand, you can only pacify a narco-state when it is no longer a narco-state.
___________________________________________________________________________________
Alfred W. McCoy is the J.R.W. Smail Professor of History at the University of Wisconsin-Madison. He is the author of The Politics of Heroin: CIA Complicity in the Global Drug Trade, which probes the conjuncture of illicit narcotics and covert operations over half a century. His latest book, Policing America's Empire: The United States, the Philippines, and the Rise of the Surveillance State, explores the influence of overseas counterinsurgency operations on the spread of internal security measures at home.
___________________________________________________________________________________

ACTA: corporate monopoly-mandated fascism

From Fskrealityguide:
There's a new international fake free trade treaty. It's the
"Anti-Counterfeiting Trade Agreement" (ACTA). Evil laws are always given
noble-sounding names. A more accurate name is "The Mainstream Media
Corporate Welfare Agreement".

These economic terrorists say "This treaty is an open and democratic
process". However, they refuse to release the drafts and details.

"It's an international 'free trade' treaty!" is a convenient catch-phrase
for circumventing individual countries' laws. Most "free trade treaties"
are actually "corporate welfare treaties". That's one reason people
falsely believe free markets are evil.

"Intellectual property" is not property. A pro-State troll says "WTF? How
will artists get paid?" The artist can directly solicit donations from
fans. The artist can make most of their money from live performances. Some
independent artists are already successful at this, without the backing of
the mainstream media cartel.

There's already a group of people that steal artists' work without paying.
They're called "record company executives". Via "Hollywood Accounting",
the artist usually never sees $1 in royalties, even for a smash hit. A new
band is locked up in a long-term contract, before the media cartel will
promote their music. A pro-State troll says "The artist voluntarily signed
the contract!" The State media cartel gives unreasonable power to
corporations. Twenty years ago, the only way to get a song published was
via the media cartel. Now, some independents are directly self-publishing
on the Internet and bypassing the media cartel.

The media cartel feels threatened, because the Internet threatens their
business model. The "solution" is to crack down on freedom on the Internet.

What are the provisions of the ACTA? This analysis is based on drafts and
rumors.

The ACTA changes copyright infringement from civil to criminal. Now, a
copyright infringer can only be sued by the copyright owner. After ACTA,
copyright infringement will be a crime.

It's the usual "cartel externalizes enforcement costs to the State". If
the RIAA/MPAA had to maintain their own spying network and private army,
it wouldn't be profitable {*}. Instead, they lobby the State to enforce
their cartel.

{*} http://www.osnews.com/story/23002/Obama_Sides_with_RIAA_MPAA_Backs_ACTA

The ACTA has a "three strikes" provision. If you're guilty of copyright
infringement three times, then your ISP terminates your service and you're
barred from purchasing Internet access. The UK already has such a law.
(The Anonymous commenter from the UK who frequently comments on "legal
extortion" would like that bit.)

It's unclear if "three strikes" is "three convictions for copyright
infringement" or "three times accused of copyright infringement". There
probably will be an administrative court, with judges chosen by the
RIAA/MPAA, separate from the regular legal system. Someone accused of
copyright infringement probably won't get due process, when their Internet
access is terminated and they're barred from buying Internet access.

The ACTA has an "ISPs are required to spy on users" provision. If an ISP
suspects a user of copyright infringement, they are required to rat you
out to the State copyright police. There's a "safe harbor" provision for
ISPs who spy on their users; the user can't sue for violating their
privacy.

If an ISP doesn't enact a "spy on users" program, then they're subject to
potential civil and criminal penalties. There's no legal requirement for
ISPs to spy on users, but they risk being sued or kidnapped if they fail
to comply.

That is like the ironically-named "Bank Secrecy Act". The Bank Secrecy Act
requires all banks to report "suspicious transactions" to the IRS and FBI.
A bank who rats on its customers is immune from being sued by a customer.
The Bank Secrecy Act makes all State-licensed banks into spies for the
State. The "Bank Secrecy Act" really is the "Bank Anti-Secrecy Act". Evil
laws are always given innocent-sounding names. BTW, the "Patriot Act"
amended the "Bank Secrecy Act", imposing stricter requirements on banks.

I don't see how this law is enforceable. People will switch to
invitation-only strongly-encrypted filesharing networks. Some people
already do this.

A P2P filesharer has a distinct traffic pattern. However, there are
legitimate filesharing uses. World of Warcraft distributes updates via
BitTorrent. Retrogaming is a grey area. Most old games are legally
copyrighted but abandonware.

There's another benefit for the prison/legal cartel. Criminalizing
copyright infringement will lead to more people in jail. Most people do
some "illegal" P2P filesharing. If the police seize your computer and
search for copyrighted material, they will frequently find infringement.

Criminal copyright infringement enhances the Police State's ability to send anyone to jail. Many young people now believe "P2P filesharing is not a crime". The police can seize someone's computer and search for copyright infringement, even if that wasn't the original reason for the search.

The ACTA is an example of State corporate welfare. This "free trade
treaty" is a stealth way of imposing freedom-restricting laws. A cartel
externalizes enforcement costs to the State. The "incandescent light bulb
ban" is another corporate welfare law, implemented via international
treaty.

Too many young people are now accustomed to P2P filesharing. They realize
that it isn't really a crime. The mainstream media cartel spends a lot of
money on propaganda denouncing P2P filesharing. I don't see the mainstream
media cartel winning this battle. They're still going to try. The ACTA
will lead to lots of frivolous arrests and lawsuits for copyright
infringement.

Hemp, and Empire

Must read of the day:

From OpEdNewsAugust 15, 2010 

"...the continuous consolidation of money and power into higher, tighter and righter hands."

That was GHW Bush's answer to reporter Sarah McClendon's question in 1992 regarding what Iran-Contra was all about. He also told her that, "If the American people really knew what we had done, we would be chased down the streets and lynched."
Extraordinarily candid of "Poppy" Bush, revealing not only the fundamental goals of Iran-Contra, but also the ultimate goal of financial Elites, now and always. For those people who really pay attention, Poppy's candidness was generic, dredging up moans of, "Oh...really?" And to our distracted masses who chronically pay little attention, it was mere wasted insight, naked truth--especially the part about what the American people would do if they "...really knew what we had done..." Can you imagine mainstream media (MSM...also known as, CorpoMedia) giving the masses truth about what is being done to them? CorpoMedia tells the masses exactly what they want the masses to believe; truth is irrelevant. They call it "perception management". What do you think about having your perceptions managed?

And speaking of lynchings...even with the list of treasonous candidates so bloated, and growing every day, there will be no lynchings--at least not until the masses learn to think for themselves instead of simply slogging along in a fantasy land spun for them by CorpoMedia, slogging along imagining there is meaningful truth amid the monolith of daily official lies; imagining TV has anything to do with reality, especially, "reality" TV.

So what about our representatives in Washington D.C.? In 2009 the average net worth across the Senate was $13,989,022.98, led by Herb Kohl, a Democrat from Wisconsin, who was worth an estimated $214,570,011 in 2008. In the House of Representatives there are actually a few who officially declare a negative net worth...while the highest net worth goes to Darrell Issa (R-California), almost $165 million. Such are the monied hands our government OF The People, BY The People, FOR The People has been financed into. Are you a multi-millionaire? Is your neighbor? How many multi-millionaires do you know personally? These are not The People, and they are not FOR The People.

After the Supreme Court recently ruled that there are no limits to the amount of money corporations may spend to influence elections, ownership of our government OF the Elite, BY the Elite, For the Elite, though obvious for so many years, has now been officially cemented--even beyond such contemporary jokes as "e-voting". Who do you think is laughing?

Perhaps it only makes sense that the Elite own our government, since they own practically everything else. In 2009, the wealthiest 10% of Americans owned 71% of all US assets, with the wealthiest 1% owning 38%. And if that lopsided distribution of wealth isn't hideous enough, our recent collapse of financial markets because of Wall Street Casino devilry turned into the greatest upward transfer of wealth in history. All we can expect is more of the same, especially considering the quadrillion? dollars worth of casino currently being obscured on Big Bank balance sheets.

By the way, the bottom 40% of Americans control 0.2% of wealth in America.

The way things are going, if we can somehow avoid extincting the human species, it won't be long before a handful of oligarchs and their minions, the "...higher, tighter and righter hands", control virtually all of the world's wealth, while everyone else is essentially a slave.

However, there IS a natural ally that has been saving people for thousands of years, one powerful enough to save us even from our globalist/imperialist/capitalist miasma. That natural powerhouse older than money is hemp.

Hemp...a more useful, beneficial crop is hard to imagine. Throughout the history of civilization hemp has been the ultimate famine buster; hemp seed is our best source of vegetable protein, one of nature's finest foods. Legendary also for its versatility, hemp today offers thousands of products that could replace so many modern consumer goods with natural, often cheaper and better alternatives...one has to wonder if it will ever be legal again to farm industrial hemp in America, considering its potential for reallocation and spreading around of wealth.

In the early days of our "republic", in many situations it was illegal not to farm hemp. Then in the early 1930s, machinery to greatly reduce the labor-intensity of hemp farming was developed. Popular Mechanics magazine, in February of 1938, ran a cover story praising the new machinery to make hemp so competitive, hailing hemp as "The New Billion-Dollar Crop". Alas...it was already looking black for hemp; in 1937, congress had passed an illegal tax law that essentially outlawed hemp farming in the United States. Surprise!

"Reefer Madness" was being hammered into the heads of Americans by William Randolph Hearst's national chain of newspapers, with help from other media. Then came WWII, and the feds' new film "Hemp For Victory!" They glorified hemp as an indispensable ally, doing all they could to entice farmers into growing hemp for the war effort. They actually told the truth.... Hemp helped us win the Big War...then the feds resumed their mantra about marijuana being the "Assassin of Youth". Any hard evidence of "Hemp for Victory" went down the memory hole, they hoped....

The true reason our farmers face prison and fines for growing hemp is much the same as it was 73 years ago: Hemp's threat to profits from cotton, timber and paper--and especially, oil--for starters. Shifting of vast profits of entrenched industrialists toward The People would be involved, and there lies the pinch. If hemp were legal to farm, certain nefarious Elite schemes since the Industrial Revolution would be jeopardized.

So now, over seventy years since farming of the most valuable crop in history was domestically banned, look around at the death and decay. Big Oil has prevailed to the point that one of the most admired countries in the world has become the most dangerous, an Imperial Thanatos trampling the globe, killing people for control of the last great reserves and supply routes to Western markets of the black gold that is killing our biosphere. Oceans are dying. The atmosphere is heating up. And Imperial Thanatos is threatening anyone who might stand in the way of its "Benign Global Hegemony" with preemptive annihilation from the greatest killing power ever amassed, including "tactical" nuclear weapons. Meanwhile, back in the homeland, "The continuous consolidation of wealth and power into higher, tighter and righter hands" has so concentrated the nation's wealth that for the vast majority of Americans, their standard of living is plummeting while the American Dream becomes a nightmare, and the Elite laugh it up.

For too many 18+ year-olds, the best job opportunities are in the business of killing foreigners for their resources, or pipeline routes, such as in Afghanistan. America is morally, spiritually and financially bankrupt. Higher, tighter and righter hands exalt globalization, and a New World Order--final phase in our inevitable bloody slog toward a world of Lords, and serfs....

But is it inevitable? If we kicked the oil addiction, and moved away from globalization, toward regionalization, the future might look less black...even, green? We are always lectured about how oil is vital for everything! Oil gives us our food, fuel, fiber, plastics, rubber, medicine...ad nauseam. But, we DO have an alternative. Fully utilizing hemp, instead of oil, we could move toward a greener future, living in a living system, as opposed to dying in a dying system. Oil is death, originally and perpetually, very old death. Watch what happens in the Gulf of Mexico, despite the "news".... Hemp is living. Food, fuel, fiber, paper, plastics, medicine, on and on--hemp has the potential to replace many products of oil and petrochemical alchemy with products that, exactly unlike oil, have a place in a living system.

And now we approach a most telling time in the history of American hemp interdiction. Medical marijuana is advancing rapidly, despite the hypocrisy of being classified as a schedule 1 drug (no medicinal uses). The Oakland city council gave final approval last week to make their's the first city in the country to allow "...large-scale industrial pot cultivation." They intend to license four production facilities to grow, process and package medical marijuana--which will "...be heavily taxed and regulated."

We are also in the midst of a country-wide push to legalize the personal use of marijuana, also to be heavily taxed and regulated. So the big question flying at us is: If possession and personal consumption of marijuana were to be decriminalized, will domestic hemp farming remain banned?

By linking industrial hemp (no drug potential) with the drug marijuana, then employing the shameful and ridiculous "Reefer Madness" chicanery--that's how the feds snuffed hemp's competitive potential with entrenched industries in the first place. They rarely speak truth, would never admit anything like: "Certainly, we used the nastiest tricks to kill the American Hemp Industry back in "37. Hearst was pretty worked up about hemp's threat to his timber and paper biz, especially since duPont had recently patented sulfuric acid paper processing. Cotton men were itchy. Rockefeller...oil men barked loud and clear. The list is a long one. And petrochemicals were gonna be the next monster thing. Lotsa money at stake. So we made "em all happy, pulled the plug on hemp by linking it with marijuana. Slick."

They were so lucky to have marijuana, and still are. But what if they lose their massive War On Drugs cash cow? If possession and private consumption of marijuana becomes legal, how will the feds justify continued prohibition of hemp farming? Will farmers be allowed to again grow industrial hemp? Will the War On Drugs die of starvation? Will We The People be allowed one of our greatest weapons to fight globalization--to empower regionalization and help to fairly spread the wealth?

Naw...they'll find a way to keep tyrannizing us, to perpetuate the status quo. They always seem to because never do enough people know the truth. Too many people are having their perceptions "managed".

For instance, how many people know anything about Ron Paul's latest hemp bill, co-sponsored by Barney Frank: HR 1866, "The Industrial Hemp Farming Act of 2009"?

The inevitable place such bills go to die is:

The House Judiciary, Subcommittee on Crime, Terrorism, and Homeland Security.

Slick.

What do you think has made Americans such slow learners?

Gold Market is not “Fixed”, it’s Rigged

By: Adrian Douglas


Goldseek, Sunday, 15 August 2010  | Source: GoldSeek.com

In 1919 the major London gold dealers decided to get together in the offices of N.M. Rothschild to “fix” the price of gold each day. While this was notionally to find the clearing price at which all buying interest and all selling interest balanced the possibility for market manipulation and self-dealing is inherently systemic in such a cozy arrangement. This quaint anti-competitive procedure continues to this day. In no other market in the world do the major players get together each day and decide on a price. Imagine if Intel, AMD and Samsung were to meet each day to “fix” the price of microchips, or if the major oil companies were to meet each day to “fix” the price of crude oil; wouldn’t there be a public outcry and a flurry of antitrust violation lawsuits? The “fix’ is not open to the public, there are no published transcripts of each fixing, and there is no way to know what the representatives of the bullion banks discuss between each other.

The current London Gold Fix is conducted by the representatives of five bullion banks, namely HSBC, Deutsche Bank, Scotia Mocatta, Societe Generale, and Barclays. The “fix” is no longer conducted in an actual meeting but by conference call.

The London Gold Pool that was instigated in the 1960’s was incontestably established with the sole purpose of suppressing the gold price. Several central banks furnished gold to sell into the market with the aim of keeping the gold price at $35/oz. This was overt market manipulation. How was this achieved? The internet site www.goldfixing.com explains here as a historical fact that “1961 - Gold Pool of US and main European central banks set up to defend $35 price, by selling at fixing to contain it”. So the London Gold Pool sold into the “fix” to suppress the price and no doubt the bullion bankers making the “fix” were party to this scheme.

The London Gold Pool disbanded in 1968 when it suffered massive outflows of bullion trying to frustrate free market forces that were manifesting themselves as insatiable demand for the metal.

As there is no London Gold Pool anymore does this mean that this mechanism of selling into the fix to suppress the gold price, that was pioneered by the London Gold Pool, is defunct also? Absolutely not! Analysis of the gold price data shows quite clearly that the price of gold is being heavily suppressed by the exact same mechanism.

Fortunately the bullion bankers added the AM Fix in 1968. This means there are two times in the day when we know for sure that the gold price is being set in a clandestine procedure that is controlled by just five bullion banks.

Figure 1 Gold Market Timeline

We will examine the characteristics of the prices determined by the London Daily Gold Fixings to demonstrate unequivocally the gold price is suppressed. To do this let’s examine what happens in a typical twenty-four hour period as illustrated in figure 1. We have chosen to start and end the 24 hour period with the PM Fix. Three and a half hours after the PM Fix the Comex closes and gold trading is then predominantly conducted in the eastern hemisphere where the western bullion banks have much less influence and the market has a much higher proportion of physical metal trading than does London or the Comex. The period from the PM Fix to the following AM Fix is labeled “overnight” trading (indicated by the blue double-headed arrow). The period from the AM Fix to the PM Fix has been labeled “intraday” trading (indicated by the red double-headed arrow). The intraday trading includes most of the trading day on the LBMA where 90% of the world’s gold trading occurs. It would be fair to say that this is the time of the day most influenced by the western cartel of gold bullion banks. The “overnight” trading is the least influenced by the gold cartel. But without question the AM Fix and the PM Fix are determined by a process under the direct control of five bullion banks.

The London Fix data used in the analysis presented in this article can be found at http://www.kitco.com/gold.londonfix.html

For purposes of demonstration let’s consider just a small sample of gold price Fix data as shown in Table 1. It can be seen that if a trader bought gold on the PM Fix on 7/26/2010 and sold it on the following AM Fix on 7/27/2010 he would have made $0.5/oz on the trade as shown in the “Overnight” column. If he were to repeat this trade every day then his gains and losses are listed in the column and would sum up to a cumulative total gain of $22.5/oz over the seven trades. If a trader bought on the AM Fix on 7/27/2010 and sold on the PM Fix on the same day he would have lost $16/oz as shown in the “intraday” column. If he were to repeat this trade everyday his daily gains and losses are as shown in the intraday column and by 8/4/2010 he would have cumulatively lost $6.5/oz. The cumulative gain or loss is recorded for each day in the columns labeled “Cumulative Intraday” and “Cumulative Overnight”

Table 1: Sample of Gold Fix Data

Figure 2 shows the cumulative gains/losses for “intraday” and “overnight” daily trades since the start of the current bull market in April 2001. This chart is astonishing. The cumulative price change between the AM Fix and the PM Fix in the last 9 years is negative $500/oz while from the PM Fix to the AM Fix it is positive $1,400/oz. What this means is that if a trader had each and every day purchased gold on the AM Fix and sold it the same day on the PM Fix he would have lost $500/oz. If he had instead bought gold every day on the PM Fix and sold it the following day on the AM Fix he would have made $1400/oz. (these calculations exclude fees and commissions). One could go further and say that if a trader had shorted gold on the AM Fix and covered the short on the PM Fix and then bought gold on the same PM Fix and sold it the following morning on the AM Fix and repeated this every day over the last 9 years the trader would have made $1,900/oz; a buy and hold strategy by comparison would have gained only $950/oz. ($250/oz gold price in 2001 to $1200/oz in 2010).

Figure 2: Cumulative Intraday Change & Overnight Change 2001-2010


The change in price between the AM Fix and the PM Fix are cumulatively making a trend which is increasingly losing money in a very strong bull market! Clearly the fixes are not being set to “clear the market” but are being manipulated to suppress the gold price. In figure 3 the same chart as figure 2 is shown but with the right-hand scale inverted.

Figure 3:  Same Chart as Figure 2 with Right-hand Scale Inverted

What this shows is that the more gold rises over night in essentially Asian markets the more it is sold down into the PM fix. This was exactly the modus operandum of the London Gold Pool but now it is being done covertly.

Figure 4: Cross-plot of Cumulative Intraday Gold Price Change & Cumulative Overnight Gold Price Change (2001-2010)

Figure 4 is a cross-plot of the cumulative intraday gold price change against the cumulative overnight gold price change. The chart shows that the cumulative amount that gold has declined between the AM Fix and the PM Fix at any time in the last nine years displays a linear correlation with the cumulative amount that gold has risen from the PM Fix to the following AM fix for the same period. The correlation coefficient R2 is 0.95 which is very close to a perfect correlation of 1.0.

This shows that someone is consistently selling down the PM Fix and the amount of the cumulative sell down is almost perfectly linearly proportional to the cumulative amount by which gold trades up overnight. That can not happen by chance.

Table 2: UP & DOWN Days for Intraday & Overnight

Table 2 shows the total number of up days and down days for both the intraday and the overnight trading from 2001 to 2010. There is a striking contrast. In fact there is almost a mirror image where the number of up days overnight is very similar to the number of down days intraday. The probability of getting this contrasting result at two different times in the same 24 hour period, in the same commodity market, and over a 9 year period is approximately one in 2.6 x 1031. In other words it is practically impossible for such a divergence of data to occur by chance, let alone for the divergence to have a nearly perfect correlation.

This is in fact a very sophisticated market manipulation that is conducted to minimize the chances of being noticed by a casual observer. In Table 1 it can be seen that gold is not systematically sold down the day following an overnight rise. It is programmed and executed over several days which is why it is only clearly revealed by looking at the cumulative changes over time. In figure 5 it can be seen that the AM Fix data and the PM Fix data appear to almost overlay. This is because the average difference between them is managed.

Figure 5: AM & PM Fix (2001-2010)

Figure 6 shows the daily difference between the AM Fix and the PM Fix charted as a percentage change from 2001 to 2010. It shows that a staggering 88% of the data fall in the minus one percent to plus one percent range. Equally surprising 98% of the data lie in the minus 2 percent to plus two percent range. This also can not happen by accident. The gold price has increased 400% in nine years yet the percentage daily price range between the AM and PM Fixes remains locked largely in a 1% band. This is why the AM & PM fix price data appear to overlay in figure 5 because the daily variation is tightly controlled. This could only be achieved by market interference.

Figure 6: Intraday Percentage Price Change (2001-2010)

The inescapable conclusion is that some entity or entities are deliberately suppressing the gold price between the AM Fix and the PM Fix and that this suppression is calculated to proportionately counter the cumulative gains in price achieved in the Asian markets that trade at some time in the period after the prior day PM Fix until the following AM Fix. Such a consistent manipulative effort would necessarily involve entities with access to large amounts of gold; this implicates central banks as they are the only entities with large hoards of gold and furthermore they have a motive for suppressing the price of gold which is to hide their mismanagement and debasement of their national currencies. Furthermore the five bullion banks who conduct the Fix would have to be complicit because by definition they are responsible for determining the clearing price on the Fix so they must be aware of the impact on price of the selling activities of the entity or entities who are offering gold in such large quantities that it causes such price aberrations. As the central banks do not trade themselves it is more than likely that some or all of the banks involved in the Fix also act on behalf of Central Banks. What is irrefutable from this analysis is the gold market is not “fixed” it is “rigged”!

The suppression of the gold price is achieved in three main “theaters of war”:

1) The LBMA unallocated gold dealing is a fractional reserve operation with a reserve of probably less than 3%. This is largely a paper gold market that masquerades as a physical gold market. Palming off the unsuspecting investor with unallocated gold with a very low reserve ratio prevents the investor’s money from chasing real physical bullion which inherently acts as a price suppression mechanism (see my recent article Proof of Gold Price Suppressionfor more details).

2) It is important to suppress the price so that investors who insist on having physical bullion are dissuaded from thinking it is a good investment. As demonstrated in this article this is done by selling gold into the PM Fix to counter the rise in the price that occurs in the physical markets of Asia. This is exactly the same tactics as employed by the London Gold Pool of the 1960’s.

3) The large bullion banks, most notably JPMorgan Chase and HSBC, sell short on the Comex inviting other commercials to join in the short selling binge to create frequent waterfall drops that wipe out speculators and serve as a cold shower for those who are bold enough to make leveraged bets that gold prices will rise.

 Additional and complementary measures include the establishment of largely unbacked Gold Exchange Traded Funds (ETF) that serve to divert demand away from the real metal. OTC derivatives that are used to hedge the essentially naked short exposure that exists by virtue of the fractional reserve nature of the massive unallocated gold market.

The London Gold Pool failed due to insufficient gold to meet demand. In those days the paper market was not as dominant. By contrast it is through selling massive amounts of paper gold that the gold cartel has managed to keep the lid on its current price suppression scheme. But therein they have unwittingly planted the seeds of their own demise. I estimate that 45 ounces of gold have been sold in unallocated accounts for every one ounce that exists in the vaults. When just a fraction of these investors ask for their gold there will be a run on the bullion banks of epic proportions. When 45 claims go looking for one ounce of physical gold the rise in bullion prices will be breathtaking. 

If you own unallocated bullion you likely only have a claim to about 2.3% of what you think you own. The window of opportunity to get your investment to be 100% bullion is closing rapidly.

This article has shown that physical gold is being dumped into the PM Fix to contain its price in a covert version of the 1960’s London Gold Pool. The result of the failure of the London Gold Pool to suppress gold was an appreciation of the gold price from $35/oz to $850/oz; a similar percentage today would carry gold to almost $30,000/oz. This is not a price forecast but an indication that when free market forces have been frustrated by market manipulation for a very long time the equilibrium price can be many multiples of the suppressed price and the rise is typically rapid when the suppression is overcome. There are many growing signs that suggest the gold manipulation scheme is coming unraveled. The onset of an epic “gold rush” is fast approaching.

Adrian Douglas
Editor of Market Force Analysis
Board Member of GATA

August 10, 2010

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