Corporate Personhood Should Be Banned, Once and For All

Ralph Nader
The decision by the U.S. Supreme Court in Citizens United v. Federal Election Commission shreds the fabric of our already

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weakened democracy by allowing corporations to more completely dominate our corrupted electoral process. It is outrageous that corporations already attempt to influence or bribe our political candidates through their political action committees (PACs), which solicit employees and shareholders for donations. With this decision, corporations can now also draw on their corporate treasuries and pour vast amounts of corporate money, through independent expenditures, into the electoral swamp already flooded with corporate campaign PAC contribution dollars.

This corporatist, anti-voter decision is so extreme that it should galvanize a grassroots effort to enact a Constitutional Amendment to once and for all end corporate personhood and curtail the corrosive impact of big money on politics. It is indeed time for a Constitutional amendment to prevent corporate campaign contributions from commercializing our elections and drowning out the civic and political voices and values of citizens and voters. It is way overdue to overthrow “King Corporation” and restore the sovereignty of “We the People”!

Unemployment Rate Increased in 43 States in December

CalculatedRisk

From the BLS: Regional and State Employment and Unemployment Summary

Regional and state unemployment rates were generally higher in December. Forty-three states and the District of Columbia recorded over-the-month unemployment rate increases, four states registered rate decreases, and three states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia.
...
Michigan again recorded the highest unemployment rate among the states, 14.6 percent in December. The states with the next highest rates were Nevada, 13.0 percent; Rhode Island, 12.9 percent; and South Carolina, 12.6 percent. North Dakota continued to register the lowest jobless rate, 4.4 percent in December, followed by Nebraska and South Dakota, 4.7 percent each. The rate in South Carolina set a new series high, as did the rates in three other states: Delaware (9.0 percent), Florida (11.8 percent), and North Carolina (11.2 percent). The rate in the District of Columbia also set a new series high (12.1 percent).
emphasis added

Click on graph for larger image in new window.

This graph shows the high and low unemployment rates for each state (and D.C.) since 1976. The red bar is the current unemployment rate (sorted by the current unemployment rate).

Sixteen states and D.C. now have double digit unemployment rates. Indiana, Missouri and Washington are all close.

Five states are at record unemployment rates: South Carolina, Florida, North Carolina, Georgia and Delaware, and several other states are close.

Another toothless bank “reform” from Obama

Tom Eley and Barry Grey
Flanked by former Federal Reserve Chairman Paul Volcker, President Obama on Thursday announced new proposals that he claimed would limit the ability of the major banks to profit from risky speculative investments.

The brief appearance before the press corps, replete with bank-bashing demagogy, was a transparent effort to give his persona a populist gloss, two days after the Democrats suffered a humiliating defeat in the Massachusetts Senate election to fill the vacancy left by the death of Edward Kennedy.

Obama was vague on the precise content of the regulations he was proposing, which he said would complement the bank regulatory overhaul passed last December by the House of Representatives. That bill, drafted in close consultation between the White House, Congressional Democrats and Wall Street CEOs and further diluted after heavy lobbying by the banks, does nothing to limit, let alone end, the unregulated “shadow” banking system that played a major role in bringing the US and global financial system to the brink of collapse.

Obama specifically denounced commercial banks making use of government support to engage in speculative trading on their own behalf—a practice known as proprietary trading.

He suggested that he wanted to revive some aspects of the separation between commercial and investment banking that was a cornerstone of the bank reform laid down by the 1933 Glass-Steagall Act. The law was repealed in 1999 during the Clinton administration. Clinton’s treasury secretary at the time, Lawrence Summers, is now Obama’s chief economic adviser.

The announcement, hastily organized, was little more than a public relations stunt, designed to placate mounting popular anger over the administration’s subservience to Wall Street and its refusal to take any measures to address the jobs crisis and growing social distress. Obama is well aware that any measures that might seriously rein in the banks will be blocked in Congress or watered down to the point of irrelevance. He and his political advisers calculated that a populist gesture would, in practice, commit his administration to nothing.

He demonstratively did not call for breaking up the banking giants--such as JPMorgan and Goldman Sachs--which have grown bigger and more powerful as a result of the administration’s policies.

The presence of Volcker underscored the cynicism of the announcement. In recent months Volcker, the chairman of Obama’s Economic Recovery Advisory Board, has been publicly calling for measures to limit proprietary trading and other speculative practices by commercial banks, i.e., institutions that hold the deposits of ordinary people and are therefore afforded special protections by the Federal Reserve Board and the Federal Deposit Insurance Corporation. Of the major banks, these include JPMorgan Chase, Citigroup, Bank of America and Wells Fargo.

For months, Volcker has been ignored or ridiculed by Obama administration officials for suggesting even a partial return to the limits on bank speculation imposed under Glass-Steagall. Now, in the wake of the political disaster suffered by the Democrats in Massachusetts, he has been brought forward to demonstrate the supposed “toughness” of Obama toward Wall Street.

Volcker, however, is hardly a fortuitous choice to symbolize the administration’s newfound determination to defend the public against the bankers. As Fed chairman from 1979, under Jimmy Carter, to 1987, under Ronald Reagan, he engineered a deep recession by raising interest rates as high as 20 percent. This was the centerpiece of an offensive against the working class that employed mass unemployment to beat back its militant opposition and impose wage cuts, attacks on benefits and speedup across the economy.

Volcker publicly supported the unionbusting and strikebreaking that characterized the 1980s, carried out with the collusion of the AFL-CIO. He famously declared that Reagan’s busting of the 1981 PATCO air traffic controllers’ strike and outlawing of the union was his greatest contribution to reining in inflation.

Acknowledging that the financial system is “still operating under the same rules that led to its near-collapse,” Obama declared that “never again will the American taxpayer be held hostage by a bank that is too big to fail.”

He continued: “We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers and that could pose a conflict of interest. And we cannot accept a system in which shareholders make money on these operations if the bank wins, but taxpayers foot the bill if the bank loses.”

Such statements have no credibility coming from a president who has presided over a vast expansion of the multi-trillion-dollar bailout of the banks and has opposed any restraints on bankers’ pay. If the banks are “still operating under the same rules” as before the crash of 2008, that is because his administration has refused to change the rules.

Obama’s phony bank-bashing was for public consumption. Next Tuesday, Treasury Secretary Timothy Geithner, who as president of the Federal Reserve Bank of New York played a key role in the bank bailout, will meet behind closed doors with more than 40 chief executives of financial institutions to reassure them and give them the real dope on Obama’s proposals.

Wall Street struck back at the mere suggestion of new regulations, driving down bank stocks and ending the trading day with the Dow down 213 points.

The Massachusetts Senate Race: A Populist Protest Vote Against Wall Street Puppets

Webster G. Tarpley
www.tarpley.net

Washington DC, January 19, 2010 — Today’s stunning defeat of the colorless hack Martha Coakley by the Republican challenger in Massachusetts must be interpreted as crucial proof that the American electorate is hungry for populism in the midst of a worsening world economic depression. The kind of populism Massachusetts voters really wanted was New Deal economic populism in the tradition of Franklin D. Roosevelt, meaning concrete measures to break the power of Wall Street and deliver economic benefits to the broad middle class and working people generally. This was the kind of economic populism which was nowhere in sight. Unfortunately, the Democratic Party of Obama, Pelosi, and Reid, and Barney Frank is a party of Wall Street shills and puppets.

Since no economic populists were in sight, Massachusetts voters settled for second best in the form of cultural populism as represented by the Republican Scott Brown, whose main claim to fame was that he drove a truck with 200,000 miles on it. That is the demagogic essence of cultural populism, the only kind of populism of which Republicans and reactionaries in general are capable. Cultural populism is what Rush Limbaugh sells on the radio every day, mocking the elitist cultural pretensions of politically correct Democrats. Cultural populism is the stock in trade of Sarah Palin, who uses it to try to make Tea Party supporters forget her warm support for the Bush-Paulson $700 billion bailout of Wall Street in October 2008, when Palin was running for vice president. Coakley, by contrast, was a prim elitist who showed her contempt for Joe Sixpack by going on a two-week vacation in the middle of her alleged Senate campaign.

The current tenant of the White House is an elitist snob who functions from day to day as a wholly owned Wall Street puppet, and Massachusetts voters recognized this very early on. They had been educated in these matters by their own governor, Deval Patrick, who spouted the very same kind of messianic and utopian rhetoric purveyed by Obama when he won the governorship some years ago. Perhaps because they had already been disillusioned by Patrick, Massachusetts Democrats made sure Obama was defeated by Mrs. Clinton in the Democratic primary there in spring 2008.

The boiling rage of the American electorate is directed against the two-party consensus which has made possible the transfer of between $25 and $30 trillion of US government money — Treasury, Federal Reserve, Federal Deposit Insurance Corporation, etc. — in the form of the TARP or bailout, while the official rate of unemployment and underemployment approaches 18%. Voters are angry in particular about tax cheat Tim Geithner, generally the most prominent representative of the Obama regime. They know that Geithner’s cell phone is programmed for speed dialing the numbers of Citibank’s Vikram Pandit, Jamie Dimon of J.P. Morgan Chase, and Lloyd Blankfein of Goldman Sachs.

They know that Geithner takes orders from these Wall Street bandits. Voters know that Geithner committed a federal crime when he ordered AIG to falsify its filings with the Securities and Exchange Commission to cover up almost $70 billion of US treasury funds which the bankrupt insurance company was using to pay off financial derivatives in the form of toxic credit default swaps at 100 cents on the dollar to a group of Wall Street banks, and even worse, European banks. These are the roots of the rage against Obama and the Democratic Party displayed today in Massachusetts.

Voters can see that Obama’s much touted health care reform plan includes the massive looting of Medicare, upon which senior citizens depend for their very lives, to the tune of $500 billion. Voters can understand that Obama’s health care bill involves an unconstitutional compulsion of the average person to bail out bankrupt health insurance companies by buying dubious policies from companies which are private, for-profit, and deregulated. Voters know that Obama’s legislation makes the Medicare MEDPAC into a death panel in the very real sense of the term. Voters may also know that Obama’s budget czar, Orszag, wants to deprive Americans of medical tests and probably represents the hidden hand behind recent efforts to limit mammograms and Pap smears — all to save money for bigger and better Wall Street bailouts. Under these circumstances, no one can be surprised by the massive vote of no confidence in Obama and the Democratic Party carried out today by Massachusetts voters.

Democrats did not turn out today in Massachusetts because they have been systematically disappointed, betrayed, and attacked by the Obama regime and its congressional allies. Antiwar activists have been appalled by Obama’s tripling of the US troop strength in Afghanistan and his evident resolve to export that civil war in neighboring Pakistan, with massacres carried out by private military contractors and Predator drones.

Those concerned about civil liberties have been deeply antagonized by Obama’s claims of authority for indefinite detention, his continuation of illegal renditions, and his probable maintenance of illegal black sites across the world. Trade unionists have been enraged by the Obama regime’s demands for vicious wage cuts on the part of UAW members working for the Detroit auto companies which Obama deliberately and cynically drove into bankruptcy, even as Obama’s fatcat contributors at Goldman Sachs have been laughing all the way to the bank with tens of billions of dollars of bonuses racked up with the help of low-interest loans from the US government. Teachers and other public sector trade unionists are equally shocked by the unionbusting tactics of Obama and his sidekick Arne Duncan, who are using charter schools and merit pay as the centerpiece of the unionbusting strategy against the American Federation of Teachers. The best informed members of the black community are acutely aware that Obama has done nothing to address sky high jobless rates in the inner city.

Gay activists are resentful that Obama has not acted on any of their concerns. All in all, Obama has already managed to alienate virtually all of the key constituency groups of the Democratic Party, including women, whom he already alienated in his misogynist presidential campaign.

Under these circumstances, it is clear that the Democratic base is fragmented and demoralized, as a direct result of Obama’s multiple betrayals of his explicit and implied promises. Both major US political parties have now been roundly repudiated at the polls — this applies to the reactionary Republicans and the Democrats, whose economic doctrine might best be summed up as a slightly modernized and watered down version of the Mussolini fascist corporate state. We note in passing that the Libertarian candidate in Massachusetts gained no traction, not least because libertarianism of the Austrian and Chicago schools offers nothing whatsoever in terms of populism, and mainly concentrates and demands that the American people he stripped of their existing economic rights to Social Security, Medicare, Medicaid, unemployment benefits, food stamps, and other benefits.

Scott Brown appears to have run as a clone of Virginia’s new GOP Governor McDonnell, who took pains to conceal how reactionary he actually was under a cloak of amiable moderation. Brown can best be defined as a reactionary gigolo, who got his start as a male model posing seminude for risqué photographs. But anybody ostentatiously riding in a truck with 200,000 miles on it qualifies a cultural populist, and so Brown carried the day.

But if Brown brings gridlock and paralysis to the U.S. Congress, he will be doing everybody a favor. It is imperative to block Obama’s destruction of Medicare, one of the last fruits of the New Deal-Great Society era. It is imperative to block Obama’s attempted carbon dictatorship under the cap and trade lunacy favored by lunatic Democratic Party radical ecologist ideologues. It is basically better to block Obama’s entire congressional agenda, with the hope that some clarity on economic program might emerge over the next year or so as the depression worsens. In the meantime, divided government is best. The Democratic preponderance in Washington is one of the most toxic legacies of the hated regime of Bush the younger, and ironically it is part of this problem which Massachusetts is helping to fix.

In a depression, voters want populism. If they can find potent New Deal economic populism, they will vote for it every time, as US elections between 1932 and 1944 show without a shadow of a doubt. But if they do not find economic populism, they can easily fall prey to the cynical demagogy of cultural populism. That is what has happened in Massachusetts. The only way to be an economic populist is to shift the cost of the world economic depression and the tax burden generally onto Wall Street financial interests, that is to say onto the malefactors of great wealth who created this crisis in the first place. That is the recipe for winning elections in a depression. Most Democrats appear to be too far gone on the road to plutocracy to learn that lesson. It therefore may well be time to create a new party to represent the one major political current in American life which is not represented by either of the two big parties of the day. In other words, we desperately need, one way or another, a New Deal economic populist party to lead this country and much of the world out of the world economic depression.

Any Democrat now wishing to survive must immediately carry out a sharp anti-Wall Street, economic populist turn. A few ideas in that regard, to be supplemented by the detailed economic recovery program displayed on my website: make Wall Street pay for the depression by enacting a 1% Tobin tax on all Wall Street financial transactions and turnover, including stocks, bonds, and above all financial derivatives.

Claw back any remaining money of the bailout or TARP. Reimpose the Glass-Steagall law to separate commercial banking, insurance, and stock brokerage. Outlaw credit default swaps and adjustable rate mortgages. Enact a 10% federal usury law to limit interest rates on credit cards and payday loans. Stop all home foreclosures for five years or for the duration of the present economic emergency, whichever lasts longer.

Seize the Federal Reserve and make it a bureau of the Treasury, passing to issue 0% federal credit for industry and agriculture, not speculation and financial services; stop federal borrowing and start federal lending. Launch a massive program of infrastructure in the spirit of the Tennessee Valley Authority, featuring 100 nuclear reactors of the most modern type, 1,000 modern hospitals, and 50,000 miles of maglev and high-speed rail, while rebuilding the entire interstate highway system in the water systems of every American city. This is the kind of program which can create 30 million new jobs over just a few years, creating full employment in this country for the first time since 1945.

The only interests that need to be sacrificed in order to get out of the depression in this way are Wall Street interests, and it is time for politicians desirous of survival to begin taking the struggle to Wall Street. Otherwise, we appear to be heading for for a seizure of power by a bonapartist regime of General Petraeus and Mitt Romney, the notorious Wall Street asset stripper and hedge fund hyena who was much in evidence at the Scott Brown rally tonight.

Ron Paul: CIA has carried out "coup" against US govt

Raw Story
US House Rep. Ron Paul says the CIA has in effect carried out a "coup" against the US government, and the intelligence agency needs to be "taken out."

Speaking to an audience of like-minded libertarians at a Campaign for Liberty regional conference in Atlanta this past weekend, the Texas Republican said:

There's been a coup, have you heard? It's the CIA coup. The CIA runs everything, they run the military. They're the ones who are over there lobbing missiles and bombs on countries. ... And of course the CIA is every bit as secretive as the Federal Reserve. ... And yet think of the harm they have done since they were established [after] World War II. They are a government unto themselves. They're in businesses, in drug businesses, they take out dictators ... We need to take out the CIA.

Paul's comments, made last weekend, were met with a loud round of applause, but they didn't gather attention until bloggers noticed a clip of the event at YouTube.

Paul appeared to be referring to news reports that the CIA is deeply involved in air strikes against Al Qaeda targets in Afghanistan and Pakistan. A suicide bombing late last year against Forward Operating Base Chapman in Afghanistan took the lives of seven of CIA operatives, including two contracted from Blackwater. The event highlighted the CIA's deep involvement in the war effort.

Paul's reference to the CIA being "in the drug business" refers to long-running allegations that the CIA has funded some of its covert operations with proceeds from drug-running. That claim was most famously made in a 1996 investigative report from the San Jose Mercury-News, which alleged that cocaine from the Contra-Sandinista civil war in Nicaragua was making its way to the streets of L.A. via the CIA.

Intelligence Ties to The Underwear Bomber

Excellent piece. Too bad the author lays sole blame on only Bush and the neocons. Obama knows full well the CIA/Mossad connection.

Bob Livingston
Could the Christmas day bomb attempt on Northwest Airlines Flight 253 have been a false flag set up by various intelligence agencies with the goal of tightening the grip of governments on its people while enriching a few well-connected individuals and corporations?

That idea—seemingly incomprehensible at first glance—gains credence the more one looks to connect a few dots.

There remain many unanswered questions about just what happened in the months, days and hours leading up to Umar Farouk Abdulmutallab’s attempt to detonate the explosive pentaerythritol tetranitrate (PETN)—which he had concealed in his underwear—as the flight descended on Detroit.

President Obama, in a news conference on Jan. 7, said a “systemic” failure allowed Abdulmutallab to board a plane at the Amsterdam Schiphol airport carrying the explosives. But was it a failure, or was it an orchestrated event?

As we documented here it’s being reported that Abdulmutallab used cash to buy a one-way ticket to the United States at the last minute while carrying no luggage and being on a terrorist watch list. Incredibly, his father had communicated to the U.S. Embassy in Nigeria in November that Abdulmutallab had been radicalized and may be planning a terrorist attack.

At least one witness—passenger Kurt Haskell—claimed that a well-dressed Indian man had escorted Abdulmutallab to the ticket counter and told a ticket agent that Abdulmutallab didn’t have a passport but needed to get on the plane. Haskell’s story has since been corroborated by another passenger who has asked not to be identified, according to a blog posted by Haskell’s wife, Lori. Dutch authorities deny this but refuse to release surveillance video of the airport terminal.

Haskell has also said another Indian man was arrested after the flight landed. But the Federal Bureau of Investigation (FBI) disputes Haskell’s version of the story. However, the FBI has orchestrated a cover-up by giving at least four different accounts of what happened once the plane was on the ground.

But there is much more to the story, and it starts a little more than two years ago.

In November 2007, under orders from President George W. Bush, two Guantanamo Bay prisoners were released to Saudi Arabia. From there they went to Yemen where they joined with the top leader of al-Qaida in Yemen and went to work.

As CBS News has reported, in August 2009 the Central Intelligence Agency (CIA) picked up information on a person of interest dubbed “The Nigerian.” He was said to have met with “terrorist elements” in Yemen. The Nigerian has turned out to be Abdulmutallab. But that connection was not made when Abdulmutallab’s father went to the U.S. Embassy on Nov. 19. There are also reports out of the United Kingdom that MI5 had warned the CIA about him in 2008 as well.

Despite Abdulmutallab’s father’s disclosure to U.S. authorities, Abdulmutallab’s visa was not revoked nor was his name placed on a no-fly list. That an oversight like this could occur by accident, without the knowledge of the CIA and U.S. State Department, is not believable.

As Gordon Duff reports in Veterans Today, groups claiming to be al-Qaida in Yemen say the Detroit attack was in retaliation for U.S. cruise missile attacks on bases in Yemen. According to a report by the British Broadcasting Corporation (BBC), the al-Qaida terrorists released from Guantanamo by Bush are really Israeli intelligence agents. This was stated by Yemeni President Ali Abdullah Saleh when he announced the arrest of a group of alleged Islamist militants. He did not say what evidence pointed toward a link with Israel.

Duff told AmericanFreePress.net (AFP) that there is no al-Qaida in Yemen. “George Bush released a couple of phony operatives from Guantanamo, and after travelling to the Middle East, they hooked up with [the Israeli intelligence agency] Mossad. The only reason Attorney General Alberto Gonzalez released them is because they’re assets,” Duff told AFP.

And, as Duff reports, Abdulmutallab’s father also has ties to Mossad, as well as the CIA station chief and U.S. Ambassador in Nigeria. Named Alhaji Umaru Abdul Mutallab, he is one of the richest men in the world and recently retired as chairman of Nigeria’s First Bank. He also serves on the board of a number of Nigerian corporations and runs the nation’s national arms industry in partnership with Mossad.

Israeli intelligence officers have been training Nigerian security forces for some time, according to an article in Nigeria’s Daily Trust newspaper. Reports show that Mossad trains the military, sells weapons, runs the airports and wields power over Defense Industries Corporation (DICON) in Nigeria, according to AFP.

In an interview with AFP, Duff said he’s not surprised that a man of Indian descent has been tied in with the Abdulmtullab’s bombing attempt. Israel and India are close business partners, especially via their military contracts. He also said the Indian intelligence agency Research and Analysis Wing (RAW) works hand-in-hand with Israel.

As investigative journalist Wayne Madsen wrote in a recent copyrighted Wayne Madsen Report (WMR), Asian intelligence believes the Indian man who helped Abdulmtullab through security was a RAW agent who used his influence to convince airline and airport security personnel that Abdulmtullab was a bona fide Sudanese refuge.

WMR reports that the security company that cleared Abdulmtullab in Schiphol is the Israeli-owned International Consultants on Targeted Security (ICTS). Many of ICTS’s officers are former Israeli intelligence agents. The online version of Israel’s Haaretz newspaper, Haaretz.com, reports the failure of ICTS, saying: “Even if U.S. intelligence failed and the name of the Nigerian passenger was not pinpointed as a suspect for the airline, he should have stirred the suspicion of the security officers. His age, name, illogical travel route, high-priced ticket purchased as the last minute, his boarding without luggage (only a carry-on) and many other signs should have been sufficient to alert security officers and warrant further examination of the suspect. However, the security supervisor… allowed him to get on the flight.”

It’s not the first time ITCS has failed. The firm also cleared attempted shoe bomber Richard Reid for a Miami-bound American Airlines flight from Paris in December 2001. And, on Sept. 11, 2001, ITCS handled security at Boston Logan Airport, Newark Airport and Dulles Airport, the three airports from which the ill-fated 9/11 planes took off. ITCS also handled security at the London transportation system when the July 7, 2005, bombing took place there.

There is another common link between Reid and Abdulmtullab: the explosive PETN. That’s what Reid had in his shoes that he tried to set off before being subdued by other passengers.

But Duff told AFP that the explosives Abdulmtullab had on him “couldn’t have blown up his own seat. Even if full power, it wouldn’t have worked.”

PETN is commonly used with blasting caps to set it off. The chemical concoction used by Abdulmtullab only caused a small fire.

So, to close the circle, who stands to gain?

First, every attempted terrorist act is met by a call for tighter security and better screening. Now the cry for full body scanners is getting louder. And who is making the most noise on these? People in Congress and those who are in a position to influence the sale of the machines. Some of them are:

• Former Department of Homeland Security (DHS) Secretary Michael Chertoff lobbies for Rapiscan Systems, one of the leading manufacturers of the scanners. Chertoff’s department purchased five of the scanners in 2005. He hit the news talk shows within hours of the attempted bombing.

• Another manufacturer is American Science and Engineering. It is represented by former Transportation Security Administration (TSA) deputy administrator Tony Blank, who also once worked for House Speaker Newt Gingrich. Also lobbying for the firm is Chad Wolf, former assistant administrator for policy at TSA and a former aid to Senator Kay Bailey Hutchison (R-Texas), who is the ranking Republican on the transportation committee.

• Smiths Detection, another screening manufacturer, employs the lobbying firm Van Scoyoc Associates. Working for them is Kevin Patrick Kelly, a former top staffer to Senator Barbara Mikulski (D-Md.), who sits on the Homeland Security Appropriations Subcommittee. Former Rep. Helen Delich Bentley (R-Md.) also works for Smiths.

• L-3 Systems is represented by former Sen. Al D’Amato (R-N.Y.), and is said to have developed one of the most sophisticated systems available.

But that’s not all. It just so happens that some provisions of the USA Patriot Act of 2001 are due to expire at the end of the year and President Obama wants them to continue. These provisions are a boon to intelligence-gathering agencies.

They are:

• The secret Foreign Intelligence Surveillance Act (FISA) court which grants the government “roving wiretaps” without identifying the target.

• The FISA court’s ability to grant warrants for “business records,” from banking to library to medical records.

• The so-called “lone wolf” provision, enacted in 2004, that allows the FISA court to issue warrants for electronic monitoring of an individual even without showing that the person is an agent of a foreign power or a suspected terrorist.

What better way to convince a skeptical Congress and public that an unconstitutional intrusion on liberty should be continued than through a failed terrorist attempt?

And finally, the military-industrial complexes of the U.S. and Israel stand to gain, as do the Bush conservatives (also called neocons), all of whom are pushing for a ramping up of military activities in Yemen. Plus, neocons like Gingrich—and most conservatives for that matter—have used the attempted bombing to bludgeon Obama as being soft on terror.

Remember, government loves a crisis. Crises allows government to push through things it could never accomplish without the people being in a state of fear and urgency.

Unfortunately, it seems the traveling public is going to stand passively by and allow their governments to squeeze them even more and use them to make pornographic photos, all in the name of a false sense of security.

(Editor’s note: My original plan for this article was to write on the dangers presented to the travelling public by the full body scanners. Sadly it seems now that their use in all airports is a foregone conclusion. However, my research led me off on this tangent, and the more I dug the more I uncovered. I realize that the vast majority of the public is not ready or willing to believe that agencies for their government could be so diabolical as to intentionally place people’s lives in jeopardy for profit or control. But I’ve sourced the information well enough that if you care to examine the evidence for yourself, you can. I suggest you do that before dismissing this out of hand. Next Monday I will write on the dangers inherent in the scanners themselves. But don’t be surprised if more on the bombing—and those who could be behind it—follows.)

Why Is HSBC Clearing Out So Much Physical Gold?

whiskeyandgunpowder.com

That’s the directive that came down from HSBC USA in late November.

It seems that everyone these days wants gold. Real, physical gold coins that they can hold in their hands, or bars that they’re assured are resting safely in a well-guarded vault. HSBC’s New York vault, for example, buried deep below its 5th Avenue tower, where it has stored people’s gold since it inherited the facility from Republic Bank a decade ago.

But no more.

HSBC has served notice to its retail customers — many of whom are simply middle-men and custodial services which store gold with HSBC on behalf of hundreds of their own account holders — that all their gold must be out of its facility by July 2010. Otherwise, folks, prepare for an unwelcome knock at your door. HSBC’s letter says that, in the absence of directions to the contrary, clients’ metal “will be returned to the address of record… at your expense.”

Picture, if you will, what the Wall Street Journal reported: “fleets of armoured cars laden with gold, ferrying the precious metal out of New York.”

Where to? That’s a good question. One destination is a pair of warehouses operated by FideliTrade, the parent company of Delaware Depository Service Co. Its vaults in Wilmington have been filling up quickly, leading Jonathan Potts, the managing director, to comment that, “I have never seen any relocation like this.” Other depositories have seen a similar run.

The logic behind HSBC’s decision, according to the Journal, is simple. The vaults are being cleared of smaller clients in order to make more room for institutional holdings, because “retail customers tend to be more expensive [to service] in part because of their diverse holdings. They usually buy American Eagle or Canadian Maple Leaf coins, and bars of various weights and sizes, all of which need to be categorized and stored separately. In contrast, institutions typically buy standardized bars of 100 or 400 ounces, making them easier to store. Institutions also tend to hold the metal for long periods.”

HSBC itself didn’t say why it’s doing this (in fact, its letter wasn’t intended for public release). So, predictably, the Internet exploded with rumors that its action had more sinister motives.

Chief among them has been the tungsten story. That one, in case you haven’t already heard it, maintains that a foreign gold buyer — some say Indian, some say Chinese — found to its dismay that bars it recently purchased were merely gold-plated tungsten. (Tungsten would be the metal of choice for a counterfeiter because it’s the closest metal to gold in specific gravity, and can fool the most basic test for purity.) Some go as far as to claim that Fort Knox is full of fakes, deliberately placed there to make our official stash appear bigger than it is. A suspicion that’s easily stoked since no outside auditor has inspected U.S. gold holdings in over 50 years.

Be that as it may, the latest rumor claims that the appearance of tungsten bars at this time is going to cause widespread chemical testing of gold bars, and HSBC doesn’t want to be caught with anything bogus. Thus they’re preemptively moving their gold out, protecting themselves and at the same time laying off the need to do any testing onto someone else.

This is a great tale, but it ignores the fact that it’s largely coins and small bars that are being moved, and those are not cost effective to counterfeit in tungsten. In addition, that the story is presently confined to the Net means it’s fiction until proven otherwise. As Ed Steer — GATA activist and author of Casey Research’s Gold and Silver Daily — points out, “If it were true, Bloomberg would be all over it in a heartbeat.”

Or someone would. And even if the mainstream media failed to do their job, there’s still the absence of a smoking gun. Who’s seen the tungsten bars? What are the names of officials who can confirm the fraud? Why aren’t the Indians who’ve been ripped off waving the phonies in front of a TV camera? These questions don’t yet have satisfactory answers. Thus the rumor will have to remain just that.

Rumor #2: HSBC has less gold on deposit than it promises, and it’s doling out what it does have to its best friends. This one might make some sense if HSBC were getting out of the gold business entirely. But it isn’t. And if it does have any physical shortages, it can cover them indefinitely with paper “equivalents.”

Rumor #3: HSBC is going under. Those storing large amounts of gold know it, and they’re protecting their assets from future claims by creditors. HSBC is hiding the mass exodus of gold by claiming to have ordered it. No way to confirm this, of course, but the volume of gold that’s leaving means an awful lot of people know what’s happening. Word of the bank’s fragility would surely have leaked out by now. That it hasn’t makes this one highly doubtful — not to mention that HSBC likely falls into the “too big to fail” category and would be propped up if it faced collapse.

Rumor #4: The most outlandish of all. Under this scenario, Washington suspects an attack in conjunction with the terrorist trials, and it’s ordered gold moved out of New York so it isn’t contaminated in the event of a dirty bomb. (Those with the deepest, darkest level of cynicism claim that this would also provide the government with a handy excuse to default on foreign claims to physical metal — as in, sorry, it’s gone, but here’s what you’re owed in dollars.)

All of these make for spicy Web chatter, but after checking with our own sources, we believe that the truth is far more mundane, yet quite exciting in its own right. In essence, we think the WSJ’s analysis is pretty close, with a twist.

It all has to do with the COMEX. That exchange, which handles futures activity in gold, has to maintain a cache of metal with which to settle trades. As a courtesy, it will also arrange to store gold for buyers who don’t want to take physical delivery. But it has no vaults of its own. It contracts with four banks to do the actual storage, though only two maintain significant amounts: of the 9.73 million ounces of COMEX gold, Scotia Mocatta has the most, nearly 5.1 million; HSBC USA is next, with over 4.1 million.

The amount of gold warehoused by the COMEX has exploded since the metal’s bull run began in 2001, as you can see from the following chart (where “registered stocks” are sitting there with someone’s name already on them, and “eligible stocks” are awaiting either registration or delivery):

The trend is obvious, and what it means is that HSBC needs an ever-increasing amount of space for its COMEX gold. Provided, of course, that the trend remains in place. Or accelerates.

HSBC has cast its vote. It clearly believes that it’s going to be getting more gold from the COMEX, maybe a lot more, and it’s making room by giving the boot to other depositors. Perhaps the bank knows something we don’t know, or perhaps it’s just acting out of reasonable expectation.

Either way, it’s telling us that the demand for gold is going to continue rising. And coming from a major bullion bank, that’s about as bullish a signal as anyone could want. If you don’t own any physical gold, it’s time.

Keeping Precious Metals Offshore

Mark Nestmann

An increasing number of Americans are concerned enough about the threat of precious metals confiscation to want to store gold or silver overseas. But laws in effect in 21 states may stand in their way.

I learned about these laws last year when one of my subscribers in Arizona called.

He wanted to buy gold from a foreign dealer for storage offshore, but the dealer refused to sell to him. The reason: the Arizona Model Commodities Act. After some research, I learned that 21 states have enacted the MCA or some variation of it: Arizona, California, Colorado, Georgia, Idaho, Indiana, Iowa, Maine, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oregon, Utah, and Washington.

I looked into the Nevada law, which a lawyer in that state told me was typical of MCAs in other states. Basically, residents of Nevada can purchase “commodities” only under circumstances which effectively exclude having precious metals delivered a non-U.S. storage facility.

The MCA came into existence in the 1980s, after a series of commodities scams in the 1970s.

One of the most notorious ones was International Gold Bullion Exchange (IGBE). Beginning in 1979, William and James Alderdice built their tiny jewelry business in Fort Lauderdale into a multi-million-dollar enterprise with over 1,000 employees.

IGBE advertised in The Wall Street Journal, Barron’s, and many other respected financial publications. In exchange for discount prices, customers waited three months or more for delivery. But many customers never received anything. When authorities finally caught up with IGBE, much of the gold supposedly stored for customers turned out to be railroad ties painted gold. In the end, customers lost millions of dollars.

With this background, it’s not surprising that states acted to protect their residents from commodities scams. But the laws appear to prohibit commodities purchases for delivery overseas.

Fortunately, companies that sell precious metals for storage overseas have developed some creative ways to deal with these laws. One option is for the buyer to use the address of a friend or family member in a non-MCA state. Another is to purchase the metals through an IRA with a custodian in a non-MCA state. A third is to sell the metals to an offshore structure that the buyer controls or is a beneficiary of.

Ultimately, though, the lesson of IGBE and similar scams is “buyer beware.” Wherever you buy, if you don’t take physical possession of precious metals you purchase, make sure that the company you’re dealing with is storing real gold, silver, platinum, or palladium—not railroad ties painted to look like the real thing.

Now, Here’s How to Report Them…

Unfortunately, neither the IRS nor the U.S. Treasury has provided direct guidance on how to report metals held offshore. As a result, I generally recommend that my clients report such ownership, although there appear to be some exceptions.

First, a little background…

U.S. citizens and residents have an annual obligation to report the existence of all “foreign bank, securities or ‘other’ financial accounts” if the aggregate value of those accounts exceeded US$10,000 at any time during the preceding year. Those failing to do so face a fine up to US$250,000, imprisonment up to five years, or both. (In an earlier blog entry, I described how non-U.S. persons have the same obligation if they are “in or doing business” in the United States.)

The report, which the Treasury Department cleverly calls Form TD F 90-22.1, is due by June 30 of the following year. Thus, you must file this form by June 30, 2009, if you had any reportable foreign account relationships anytime in 2008.

You have a separate obligation to disclose any “reportable” foreign accounts on Schedule B of Form 1040. Hopefully, you already made that acknowledgment when you filed your 2008 tax return. If not, you should file an amended return and make the required disclosure (check “yes” on line 7a of Schedule B).

The Treasury Department and the IRS construe the term “financial account” very broadly. The definition unquestionably includes bank, securities, and other accounts that hold financial instruments. However, it does not include individual bonds or stock certificates. This is an important distinction. If you have a foreign brokerage account that contains stock, this is a foreign financial account. If you hold individual shares of the stock directly, it is not reportable.

By analogy, the same rules would presumably apply to gold or other precious metals held offshore. If you hold the metals in a safety deposit box or private vault, without opening a bank or other financial account, you don’t appear to have any reporting obligation. (However, at many foreign banks, you must open an account in order to rent a safety deposit box.) On the other hand, if you purchase the metals through a foreign bank account and the bank stores the metals in its vault as part of your account holdings, the relationship would be reportable.

What if you arrange for a company to purchase gold or other metals on your behalf and that company stores those metals on your behalf in a foreign bank’s vault? While nothing is certain in life (other than death and taxes) a strong case can be made that this is not a “foreign financial account” if the following conditions apply:

• The company does not itself sell the metals but only brokers purchases and sales

• The metals are held together in a designated area of the foreign bank’s vault

• Each bar or coin is identified by a unique, certified number.

• The bars or coins in the vault are individually packaged and labeled so that it they are readily identifiable as your property.

• You can take physical possession of the metals at any time.

Naturally, the IRS might disagree with this analysis. And if you enter into such an arrangement, I highly recommend confirming my interpretation with your own tax advisor.

More Dead Afghans: Franken is “Cautiously Optimistic”

Kurt Nimmo
Infowars.com
January 17, 2010

Turn them upside down and they all look alike. Democrats and Republicans that is. When Bush and the neocons ruled the roost, Democrats complained about the invasions of Iraq and Afghanistan. Now that their man is in office, Democrats support Obama’s criminal expansion in Afghanistan.

For the average Afghan on the ground, however, there is zero difference between Bush or Obama. It is a continuation of butchery.

“Fresh from a tour of Afghanistan, Sen. Al Franken expressed modest support this week for the president’s plan to drastically expand America’s presence in the war, now in its eighth year,” reports the Star Tribune in Minnesota, where Franken is a senator. “The Minnesota Democrat previously was uncommitted on whether the U.S. should deploy 30,000 more troops to the region. Speaking to reporters Wednesday from an airport in Dubai, Franken said he will back Obama’s plan and is ‘cautiously optimistic’ about the war’s progress.”

He wasn’t necessarily opposed to illegally invading Iraq and killing over a million people. “Al Franken has had many positions on the Iraq war. Franken supported the war at the outset, although in a much more ambivalent way than [Norm] Coleman did. He says he felt, at most, ‘53 percent’ in favor. There were reasons to be for the war, and reasons to be against, but ‘all the reasons to be for the war turned out to be false,’ Franken said during our interview,” the Minnesota Post wrote in 2008.

Al Franken was more than half in favor of committing war crimes. As for what many of us knew in 2002 as Bush’s neocons dreamed up lies in preparation for invasion — the lies were so transparent as to be absurd — Franken was clueless along with a lot of other Democrats.

“I do support the president’s plan,” Franken said, adding that he will vote for additional funding. “I may have done it a little bit differently myself but I … came away from this trip feeling that we already have momentum from the president’s speech.”

Al Franken and your garden variety Democrat — and Republican for that matter — are completely clueless about the reality on the ground in Afghanistan. Somebody needs to tell them about the Afghan code of Pushtunwali, their honor-to-the-death code.

“Afghans have their own agendas, which are inevitably local, and exist only at the town and village level. Their loyalties – indeed their sense of manhood and honor – are based on promoting the well-being of their families, their clan, their tribe and their Islamic sect,” writes Robert P. Pearson. “The paradox is that the more American troops we send, the more resistance we will create. Neither the British (three tries) nor the Russians (a 10-year war) has succeeded in controlling Afghanistan, and after eight years there, we are failing too.”

Franken’s boss Obama will fail like Bush, the Russians, and everybody else who tried to invade and hold Afghanistan, including Alexander the Great.

The United States is not in Afghanistan to save the people of that country from the Taliban and al-Qaeda. The United States created both. The Pentagon is in Afghanistan at the behest of Wall Street and the bankers. Orwell said War is Peace. It is also immensely profitable.

“The counter-insurgency strategy McChrystal advocates will never work. There is no way we can provide long-term security to tens of thousands of villages throughout the country. Even if security is the main Afghan preoccupation, they know the Taliban are a far surer path to that end than American soldiers whom they know will eventually leave. At present, the Afghan government can barely keep Kabul safe, and has little influence in the countryside, which is under the control of numerous warlords or the Taliban, none of whom are eager to have their power taken away by American or NATO forces,” Pearson concludes.

In the meantime, we will have to suffer Mr. 53 Percent, Al Franken, the former comedian who is now an apologist and facilitator for mass murder.

In Germany at the end of the Second World War, war criminals were tried and summarily delivered to the gallows for invading small defenseless countries and killing countless people.

In America, they retire and write books.