GMO Fields Forever

SUBHEAD: Dow AgroScience is speedily turning thousands of acres of what used to be sugarcane into a GMO laboratory next to residences in Hanapepe Heights.

By Diana Labedz on 4 November 2010 for Island Breath -
(http://islandbreath.blogspot.com/2010/11/gmo-fields-forever.html) 

 
Image above: Dow tractor preparing G&R cane field for GMO experiments. All photos by Diana Labedz.  

These photo's are of the growing number of GMO fields on the Westside, near the community Hanapepe Heights. I could not capture with a camera the extent of how many or how far the fields have grown. It hurts my heart to see it. How many acres? How long will they be here? Is anyone monitoring the dust, land, air and water for chemical pollution?


 
Image above: Field between Kaumakani and Hanapepe Heights to be spayed with glyphosate and other chemicals.

What are the consequences of the ongoing assaults to the people that live and work on the Westside? Is there a way that could transform these fields into healthy crops that would feed, clothe and provide medicine to the island people?


 
Image above: Dust is kicked up in fields behind cliff side residences of Hanapepe Heights.

 Is there a way to channel this negative energy in a manner that will enable the island to overcome the temporary obstacles and provide lush green organic food, prosperity, fertility and rejuvenation? Can we purge and start fresh after encountering these difficult situations? Or will there be GMO fields forever?

See also:
Ea O Ka Aina: Message from Dow GMO 6/29/10
Ea O Ka Aina: Kaumakani - Toxic Village 8/15/10
Ea O Ka Aina: End of Kauai's Economy 7/7/10
Ea O Ka Aina: KIUC - PacWest - G&R Deal 10/16/09
Ea O Ka Aina: Kauai's last sugar harvest 9/28/09
Ea O Ka Aina: Gay & Robinson Future 9/27/09

 .

Plutocracy Now!

SUBHEAD: What's left standing is the perniciously powerful, highly secretive and entirely unaccountable Federal Reserve.

By Ashvin Pandurangi on 6 November 2010 in Simple Planet -  
(http://peakcomplexity.blogspot.com/2010/11/plutocracy-now.html) 

  Image above: The Federal Reserve in the center of a storm. From (http://www.nakedcapitalism.com/2010/01/guest-post-front-running-the-fed.html).

Every so often, Americans should stop everything they're doing for a moment, and reflect upon the nature of their country. Specifically, upon what has traditionally been this country's defining characteristic. Was it our capitalist economy? No, there are many capitalistic countries around the world and capitalism was not first formulated by Americans. What about our emphasis on personal freedom?

Well, once again, many countries preach the virtues of freedom and many groups of people have fought for freedom well before America was formed. Surely it has been our diverse populace and our tolerance of all races, genders, sexual preferences... yeah, right. Personally, I would answer that it was our written Constitution and the democratic values embodied within it.

No other country had ever codified the structures and processes of their governing institutions to such an extent in one single document. Many people focus on the Bill of Rights when speaking about the Constitution, but the first four Articles are just as important. They synthesized political ideas that were developed over hundreds of years by some of the most insightful thinkers, such as separation of federal powers, checks and balances, vertical division of powers (federalism), an independent judiciary and, of course, representative democracy.

The latter emphasizes the notion that any policies enacted by the federal government must be authorized by the people, through their elected representatives who are held accountable to constituents every few years. So what's the state of our Constitutional democracy today?

Simple, it doesn't exist. International corruption surveys typically rank the U.S. higher (less corrupt) than most other countries, but this simply proves how bad these surveys are at capturing the essence of real, hardcore corruption. We could write stacks of books on the prevalence of money in politics and the swarms of lobbyists who descend on Washington every single week, and many people have, but it's simpler to just focus on the most egregious example of corruption.

The most powerful, influential economic policy-making institution in the country, the Federal Reserve ("Fed"), is an unelected body that is completely unaccountable to the people. Well, let's back up and start with the fact that this institution's very existence is most likely unconstitutional. Here's why: Article I, Section 8 of the Constitution states that Congress has the power to "coin money" and "regulate the value thereof".

The Supreme Court has long held that Congress can delegate its legislative powers to Executive agencies as long as it provides an "intelligible principle" to guide the agencies' action. We don't even have to reach the question of whether the Federal Reserve Act sets out an "intelligible principle", however, because existing precedent states that Congress cannot delegate its powers to private institutions.

Schecter Poultry (held "a delegation of its legislative authority to trade or industrial associations...would be utterly inconsistent with the constitutional prerogatives and duties of Congress). In that case, the Supreme Court struck down parts of FDR's National Industrial Recovery Act which authorized these private organizations to draft "codes of fair competition" and submit them to the President for approval. The Fed, by it's own admission, is an independent entity within the government "having both public purposes, and private aspects".

By "private aspects", they mean the entire operation is wholly-owned by private member banks, who are paid dividends of 6% each year on their stock. Furthermore, the Fed's decisions "do not have to be ratified by the President or anyone else in the executive or legislative branch of government" and the Fed "does not receive funding appropriated by Congress". In 1982, the Ninth Circuit Court of Appeals confirmed this view when it held that "federal reserve banks are not federal instrumentalities... but are independent, privately owned and locally controlled corporations".

[The Legality of the Federal Reserve System, 5]. Yet, the Fed has exclusive control over the government's ability to create money and regulate its value through the targeting of interest rates and open market operations (when the Fed buys an asset, it typically prints the purchase money out of thin air). How Congress can delegate its Constitutional powers to this independent, privately owned and unaccountable institution is beyond me.

Still, the Constitutional issue is just the tip of the iceberg when it comes to this twisted institution's embodiment of all things undemocratic. When Congress (and the people it represents) makes a valid delegation of its powers to an executive agency, it almost always retains a level of control through its powers of appropriations, impeachment and oversight.

For some not-so-strange reason, the Fed isn't appropriated any funds by Congress, and so it cannot be financially "starved" like any other agency. The members of the Fed's Board of Governors also cannot be impeached by Congress, which is especially twisted, since the President of the United States can be impeached for "high crimes and misdameanors". [The Legality of the Federal Reserve System, 8]. What about oversight?

Well, a Congressional committee holds "hearings" every once in awhile to ask the Chairman a few irrelevant questions, but if this process is what passes for "oversight", then we have truly gone off the deep end. Speaking of committees and oversight, when Fed Chairman Ben Bernanke testified under oath to Congress in July, he said in no uncertain words, "the Federal Reserve will not monetize the [federal] debt". [1]. Fast forward to the day after mid-term elections, in which the American people clearly voted for LESS spending/printing, and the Fed announces its plan to monetize $900 billion in treasury bonds. [1].

The Chairman has proven his previous testimony before Congress to be a blatant lie, but instead of condemning the Fed's recent actions, the federal government has welcomed it with open arms. That's quite some oversight we have there. Perhaps the best way to oversee the Fed's actions would be to actually figure out what in Lloyd Blankfein's name it's been doing. In this country, that's easier said than done.

The Government Accountability Office is not allowed to audit the Fed's transactions for or with foreign governments, central banks, nonprivate international organizations or those made under the direction of the Federal Open Market Committee ("FOMC"). It just so happens that these are the types of transactions which are most influential on global and domestic financial markets, especially the open market operations. These operations are conducted by the FOMC, who is comprised of the Board of Governors (7 members appointed by President and confirmed by Senate) and five representatives from the regional Fed Banks.

Although the President appoints the Board of Governors, he must choose from a list of candidates provided by private institutions, and the other five representatives are also typically nominated by private member banks. Talk about an organization with conflicts of interest, lack of transparency and lack of accountability all tightly woven into its very fabric!

In the last two years, the almighty Fed has printed trillions of dollars in our name to buy worthless mortgage assets from "too big to fail" banks. It has lent these banks our hard-earned money at about 0% interest, so they could lend our own money back to us at 3%+. These banks also used our free money to ramp equity and commodity markets, which mostly benefitted the top 1% of our population who owns 43% of financial wealth [2], and conveniently, also owns the Fed.

The latter has kept interest rates at next to nothing to punish savers and encourage speculation, making everything less affordable for average Americans who have seen their wages stay the same, decrease or disappear. What's left standing is the perniciously powerful, highly secretive and entirely unaccountable Fed, who now epitomizes the state of American democracy. We have all become subject to the misguided and/or malicious whims of a few wealthy individuals operating the levers of economic policy, with no adequate means of challenging their power.

Our most treasured contribution to political society has been reduced to a bunch of meaningless articles and amendments, containing equally meaningless words. We the people, in our pursuit of "a more perfect union", have fallen into an age-old trap. Our economic policies, currency and laws are all manufactured by our very own private dictator, who amasses a fortune from our collective exploitation and destruction. Then, this despot continues to operate like nothing ever happened.

We can scream "ABOLISH THE FED" all day, non-stop to every single politician at the top of our lungs, but it will never happen. The reality is that there is only one way back to a true democratic system now, and this path will require nothing less of us than the courage of our forefathers.  

.

Pilots Reject Full Body Scanners

SUBHEAD: World’s pilots reject naked body scanners over issue of radiation danger and privacy breach.

By Steve Watson on 8 November 2010 for InfoWars.com -
(http://www.infowars.com/worlds-pilots-reject-naked-body-scanners-over-radiation-danger-privacy-breach)

  Image above: Mother to put daughter thru scanner in Amsterdam. From (http://www.overoll.com/Content/Detroit-terror-attack-hesitation-over-x-ray-scanners-risking-lives-/2009/12/31/143395.news). 

[IB Editor's note - Passengers through American airports can reject, "opt out," of the potential health dangers of full body scanners in favor of a physical pat down.]

The largest union of airline pilots in the world is urging its members to boycott body imaging machines currently being rolled out in airports all over the globe, citing dangers of excessive exposure to harmful levels of radiation during the screening process.
The president of the Allied Pilots Association, which represents 11,500 pilots, many of whom work for American Airlines, has urged members of the union to revolt against the devices.
Captain Dave Bates voiced the union’s concerns in a letter published by The Atlantic late last week.
Bates asks that members be aware “that there are ‘backscatter’ AIT devices now being deployed that produce ionizing radiation, which could be harmful to your health.”
Captain Bates suggests that pilots refrain from being put through the scanners and if necessary opt for a pat down by TSA officials instead.
“We already experience significantly higher radiation exposure than most other occupations, and there is mounting evidence of higher-than-average cancer rates as a consequence.” Bates’ letter states.
Earlier in the year, scientists warned that the machines constitute a potential health risk, noting that the radiation given off by the devices has been dangerously underestimated and could lead to an increased risk of skin cancer.
Despite these fears, the blatant violation of privacy laws, and the consistent lies that the authorities have engaged in over capabilities of the machines, Janet Napolitano, head of the DHS, recently announced plans to expand the full-body scanner program even further.
In the U.S., travelers can refuse the body scanner and opt for the pat down, however, this option is not offered by the TSA, rather the traveler must declare that they wish to “opt out”.
A recent New York Times report describes the humiliating turn of events should airline passengers exercise this right, with individuals being singled out and prodded, probed and poked by TSA agents in front of everyone else queuing in the security lines.
New pat down procedures have recently been instituted by the TSA, allowing agents to use their fingers and the palms of their hands to feel around breasts and genitalia. Previously agents were instructed to brush the backs of their hands against these areas.
The APA president, Captain Bates, acknowledges how humiliating the new pat downs are in his letter:
“There is absolutely no denying that the enhanced pat-down is a demeaning experience. In my view, it is unacceptable to submit to one in public while wearing the uniform of a professional airline pilot. I recommend that all pilots insist that such screening is performed in an out-of-view area to protect their privacy and dignity.” he writes.
The new pat down technique has even been likened to “foreplay”. An American Civil Liberties Union spokesman has called the new security procedures a choice between a “virtual strip search” and a “grope.”
“Travelers are being asked to choose between being scanned ‘naked’ and exposed to radiation, or getting what people are describing as just a highly invasive search by hands of their entire bodies.” Chris Ott, a spokesman for the ACLU of Massachusetts, said.
People traveling out of the UK and other areas of Europe don’t even get the choice – they areforced to go through the scanner if asked and cannot refuse or they are banned from traveling. This policy seems to be slowly extending into the U.S., however, given recent reports from airport workers in El Paso, Texas who say that everyone is now being forced through the machines.
Privacy group Big Brother Watch has backed the APA’s advice to pilots, with director Alex Deane, noting “Scanners are dangerous. There’s a reason that the nurse stands behind a screen when you get an x-ray at hospital. Radiation is potentially harmful, even in small doses, and the regularity with which frequent flyers are exposed to potentially cancer-causing radiation.”
“If pilots aren’t going to be scanned, why should members of the public?” Deane added.
“This stance from a professional group, the world’s leading association of pilots, must shake the government out of its absurd position on scanners.”
The TSA has a regularly updated list of which American airports are using AIT full-body scanners here.
APA president Captain Bates’ letter in full:
Fellow Pilots,
In response to increased threats to civil aviation around the world, the Transportation Security Administration (TSA) has implemented the use of Advanced Imaging Technology (AIT) body scanners at some airport locations.
While I’m sure that each of us recognizes that the threats to our lives are real, the practice of airport security screening of airline pilots has spun out of control and does nothing to improve national security. It’s long past time that policymakers take the steps necessary to exempt commercial pilots from airport security screening and grant designated pilot access to SIDA utilizing either Crew Pass or biometric identification. As I recently wrote to the TSA Administrator:
“Our pilots are highly motivated partners in the effort to protect our nation’s security, with many of us serving as Federal Flight Deck Officers. We are all keenly aware that we may serve as the last line of defense against another terrorist attack on commercial aviation. Rather than being viewed as potential threats, we should be treated commensurate with the authority and responsibility that we are vested with as professional pilots.”
It is important to note that there are “backscatter” AIT devices now being deployed that produce ionizing radiation, which could be harmful to your health. Airline pilots in the United States already receive higher doses of radiation in their on-the-job environment than nearly every other category of worker in the United States, including nuclear power plant employees. As I also stated in my recent letter to the Administrator of the TSA:
“We are exposed to radiation every day on the job. For example, a typical Atlantic crossing during a solar flare can expose a pilot to radiation equivalent to 100 chest X-rays per hour. Requiring pilots to go through the AIT means additional radiation exposure. I share our pilots’ concerns about this additional radiation exposure and plan to recommend that our pilots refrain from going through the AIT. We already experience significantly higher radiation exposure than most other occupations, and there is mounting evidence of higher-than-average cancer rates as a consequence.”
It’s safe to say that most of the APA leadership shares my view that no pilot at American Airlines should subject themselves to the needless privacy invasion and potential health risks caused by the AIT body scanners. I therefore recommend that the pilots of American Airlines consider the following guidelines:
Use designated crew lines if available.
Politely decline AIT exposure and request alternative screening.
There is absolutely no denying that the enhanced pat-down is a demeaning experience. In my view, it is unacceptable to submit to one in public while wearing the uniform of a professional airline pilot. I recommend that all pilots insist that such screening is performed in an out-of-view area to protect their privacy and dignity.
If screening delays your arrival at the cockpit, do not cut corners that jeopardize the safety of the flight. Consummate professionalism and safety are always paramount.
Maintain composure and professionalism at all times and recognize that you are probably being videotaped.
If you feel that you have been treated with less than courtesy, respect and professionalism, please submit an observer report to APA. Please be sure to include the time, date, security checkpoint and name of the TSA employee who performed the screening. Avoid confrontation.
Your APA Board of Directors and National Officers are holding a conference call this week to discuss these issues and further guidance may be forthcoming.
While I cannot promise results tomorrow, I pledge to dedicate APA resources in the days and weeks to come to achieve direct access to SIDA for the pilots of American Airlines. In the meantime, I am confident that you will continue to exhibit your usual utmost professionalism as you safely operate and protect our nation’s air transport system.
• Steve Watson is the London based writer and editor. He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham in England.
See also:
Ea O Ka Aina: Hawaii Full Body Scanners 7/24/10
Ea O Ka Aina: Full Body Scanner Politics 7/23/10
 Ea O Ka Aina: Lihue Airport Zaps Kauaians 7/10/10
Ea O Ka Aina: Kauai Tests for Terrorists 6/18/10
Ea O Ka Aina: Why so much security for Kauai? 12/1/07

.
.

Pre Post Mortem

SUBHEAD: Don't worry folks, that sound of heavy breathing you hear is the exhalations of the big banks reviving on their IV drip lines of financial liquidity.

By James Kunstler on 8 November 2010 for Kunstler.com -  
 (http://kunstler.com/blog/2010/11/pre-post-mortem.html)


 
Image above: Story illustration by Juan Wilson of SUV meeting CSX train by the light of an approaching meteor.  

The poetry of dynamic forces does not lend itself to easy explication. Thought exercise: Imagine the vectors of a Chevy Trailblazer speeding down state road #44 towards the tracks on which a CSX coal train of four 3000-horsepower diesel engines hauling 88 loaded coal hopper cars four miles north of Chugwater, Wyoming. The Chevy driver left his meth lab, say, fourteen minutes earlier after piping up and doing three tequila shots.

The lead engineer on the coal train, a sturdy fellow, five-feet-ten-inches and 270 pounds, having finished his supper of double deluxe nachos (with two meats and extra cheese) is entering a less than blissful realm of myocardial infarction. Meanwhile, a meteor the size of a basketball has passed into the troposphere on a trajectory to strike the planet Earth at precisely the point where the CSX train intersects route 44 and the speeding Trailblazer. That there would be a snapshot of your US political economy.

Of course, lying and doubletalk don't help none, either. Such as the widespread falsehood that a "recovery" to the consumer credit nirvana and rising house prices of yesteryear is underway (Krugman, Friedman, et al). Or that a program called quantitative easing represents anything more than a national check-kiting scheme ramping up so many zeros that the goddess of infinity herself would run shrieking from the scene in embarrassment.

I saw a black swan in the botanical garden at Melbourne a week or so ago and it reminded me most poetically of Mr. Taleb's proposition that nobody really knows what is going on in this republic. And so, appropriately, we held an election in which many candidates who know nothing found themselves elevated to political office well-prepared for careers in lying and doubletalk in the service of knowing nothing. Join me please in cringing for our country's future.

The unvarnished truth of our predicament is that all pathways now lead to the same destination: a falling US standard of living as measured conventionally. What's unknown is how swift and severe this decline might be, exactly what all its implications are for the social order and geopolitics, and whether it might present itself in a form that could be called collapse. For the moment, one question is: do we go broke the standard way by having less money, or the trick way by destroying the value of our money so that folks (as President Obama might say) have lots of it, only it isn't worth anything. There is even at this late date much debate between the inflationistas and the deflationistas - that is, those who think the economy ends in a bang or a whimper.

I am stumped out loud, frankly, though an exogenous ill wind has me leaning just a bit in the "de" direction. The untold tonnage of bad financial paper out there, rotting away like so much herring stuffed in the bilges of a cosmic Flying Dutchman, would tend toward an outcome of wealth vanishing from our system - and money, which represents wealth, with it. Yet, there's no denying that the prices of everyday things such as food, gasoline, cotton, and steel are shooting up just now. Surely some of this is due to the sheer operations of finance, in which herds of believers in this-or-that stampede one way or another, in this case from bonds to commodities.

But herds might get spooked by something (anything!) and suddenly reverse direction, seeking safety in cash and its equivalents. Really anything might happen in the stock markets, too, at this point, they are so detached from their former reality as a price discovery mechanism.

I like the formulation of John Michael Greer that we're about to see something called hyperstagflation, which would amount to sharply rising prices in an economy going nowhere fast. But if it's based on anything like the stagflation of the 1970s, that journey also ends in an inflationary fiasco, and logically some hyper version of it, which would kill the US government as we know it. Much as I loiter in the precincts of thought experiment, I don't really relish that outcome. But, sadly, we seem to be in one of those times when events outrun personalities and their meager abilities to react.

It's been my contention for weeks now that criminal mischief on the mortgage scene - all those lost, doctored, forged, robo-signed documents - will slow foreclosures (and even plain vanilla transactions) to the extent that the real estate market will choke on un-sellable property, leading to suffocation of the big banks and ultimately generalized thrombosis of the system.

Hence: Dr. Bernanke appears on the scene with the defibrillation paddles of quantitative easing, hoping to goose the circulation of money through the quivering bodies of BAC, Citi, and their croaking cohorts. They may stagger back into their beds in the intensive care unit, but their fate has only been postponed.

Back in the real world, outside the hospital for ailing banks, it's harder and harder to get paid by anybody for anything, so the circulation of money slows in the everyday economy. Accounts receivable go unreceived. Payrolls can't be met. Pink slips are issued. Mortgages won't get paid.

Credit card bills lie unopened on the kitchen table while the late fees, penalties, and other cockamamie charges rack up, and one day some suspicious looking fat men in mullet hair-doos and wife-beater shirts, with flames tattooed on their necks, show up with a tow truck and start hitching your car to it and you wonder for a moment how you managed to park illegally in your own driveway - wait a minute...!

Don't worry folks, that sound of heavy breathing you hear is the exhalations of the big banks reviving on their IV drip lines of financial liquidity. Pretty soon, the nurses will bring them Kansas City strip steak dinners, with truffled mashed potatoes, asparagus flown in from Chile, and even a nice year-2000 Clos Du Val reserve cabernet. You - you can go down to the food pantry and get yourself some government cheese.

Melt it over some ranch-style Doritos and hunker down with Fox News where a dry drunk will explain to you the morbid workings of the Trilateral Commission and how the Rockefellers are scheming to take over the National Football League for the greater glory of Karl Marx while selling your daughter to Albanian white slavers. You'll think you understand the world. You'll feel fulfilled and easy in your mind.
 .

End the War Against the Earth

SUBHEAD: People's need for food and water can be met only if nature's capacity to provide food and water is protected.

By Vandana Shiva on 4 November 2010 in The Age
(http://www.theage.com.au/opinion/society-and-culture/time-to-end-war-against-the-earth-20101103-17dxt.html)

Image above: Corporate mercenaries killing indigenous "rhino" on planet Avatar. From (http://kotaku.com/5343210/james-camerons-avatar-the-game-impressions-of-mass-slaughter). 



When we think of wars in our times, our minds turn to Iraq and Afghanistan. But the bigger war is the war against the planet. This war has its roots in an economy that fails to respect ecological and ethical limits - limits to inequality, limits to injustice, limits to greed and economic concentration.

A handful of corporations and of powerful countries seeks to control the earth's resources and transform the planet into a supermarket in which everything is for sale. They want to sell our water, genes, cells, organs, knowledge, cultures and future.

The continuing wars in Afghanistan, Iraq and onwards are not only about "blood for oil". As they unfold, we will see that they are about blood for food, blood for genes and biodiversity and blood for water.

The war mentality underlying military-industrial agriculture is evident from the names of Monsanto's herbicides - ''Round-Up'', ''Machete'', ''Lasso''. American Home Products, which has merged with Monsanto, gives its herbicides similarly aggressive names, including ''Pentagon'' and ''Squadron''. This is the language of war. Sustainability is based on peace with the earth.

The war against the earth begins in the mind. Violent thoughts shape violent actions. Violent categories construct violent tools. And nowhere is this more vivid than in the metaphors and methods on which industrial, agricultural and food production is based. Factories that produced poisons and explosives to kill people during wars were transformed into factories producing agri-chemicals after the wars.

The year 1984 woke me up to the fact that something was terribly wrong with the way food was produced. With the violence in Punjab and the disaster in Bhopal, agriculture looked like war. That is when I wrote The Violence of the Green Revolution and why I started Navdanya as a movement for an agriculture free of poisons and toxics.

Pesticides, which started as war chemicals, have failed to control pests. Genetic engineering was supposed to provide an alternative to toxic chemicals. Instead, it has led to increased use of pesticides and herbicides and unleashed a war against farmers.

The high-cost feeds and high-cost chemicals are trapping farmers in debt - and the debt trap is pushing farmers to suicide. According to official data, more than 200,000 Indian farmers have committed suicide in India since 1997.

Making peace with the earth was always an ethical and ecological imperative. It has now become a survival imperative for our species.

Violence to the soil, to biodiversity, to water, to atmosphere, to farms and farmers produces a warlike food system that is unable to feed people. One billion people are hungry. Two billion suffer food-related diseases - obesity, diabetes, hypertension and cancers.

There are three levels of violence involved in non-sustainable development. The first is the violence against the earth, which is expressed as the ecological crisis. The second is the violence against people, which is expressed as poverty, destitution and displacement. The third is the violence of war and conflict, as the powerful reach for the resources that lie in other communities and countries for their limitless appetites.

When every aspect of life is commercialised, living becomes more costly, and people are poor, even if they earn more than a dollar a day. On the other hand, people can be affluent in material terms, even without the money economy, if they have access to land, their soils are fertile, their rivers flow clean, their cultures are rich and carry traditions of producing beautiful homes and clothing and delicious food, and there is social cohesion, solidarity and spirit of community.

The elevation of the domain of the market, and money as man-made capital, to the position of the highest organising principle for societies and the only measure of our well-being has led to the undermining of the processes that maintain and sustain life in nature and society.

The richer we get, the poorer we become ecologically and culturally. The growth of affluence, measured in money, is leading to a growth in poverty at the material, cultural, ecological and spiritual levels.

The real currency of life is life itself and this view raises questions: how do we look at ourselves in this world? What are humans for? And are we merely a money-making and resource-guzzling machine? Or do we have a higher purpose, a higher end?

I believe that ''earth democracy'' enables us to envision and create living democracies based on the intrinsic worth of all species, all peoples, all cultures - a just and equal sharing of this earth's vital resources, and sharing the decisions about the use of the earth's resources.

Earth democracy protects the ecological processes that maintain life and the fundamental human rights that are the basis of the right to life, including the right to water, food, health, education, jobs and livelihoods.

We have to make a choice. Will we obey the market laws of corporate greed or Gaia's laws for maintenance of the earth's ecosystems and the diversity of its beings?

People's need for food and water can be met only if nature's capacity to provide food and water is protected. Dead soils and dead rivers cannot give food and water.

Defending the rights of Mother Earth is therefore the most important human rights and social justice struggle. It is the broadest peace movement of our times.
.

Depend on your Wheelbarrow

SUBHEAD: Once you’ve swallowed the little red pill you’re kicked out of the garden of oblivious innocence and blissful ease.

By Elizabeth Scarpino on 1 November 2010 in Transition Voice
(http://transitionvoice.com/2010/11/so-much-depends-on-a-wheelbarrow)

 
Image above: A restored wheelbarrow ready for another decade. From (http://www.ourfamilyprojects.com/Comfortable_Hippies/2007-11-15_Wheelbarrow.html).  

[Author's note: The following has all been said before, more eloquently, factually, persistently and presciently by others. But living with these thoughts is certainly new to me.]

I wonder, once you’ve peered through the peak-oil lens, can you ever be truly, blithely carefree or happy again? I guess it requires the sort of psychological doubling wherein you lead your normal day-to-day physical and mental life unconscious of the immense damage that your actions and society’s deeds have caused, and suppressing odious thoughts about a radically different future.

Indeed, daily tasks like laundry and grocery shopping go so much better when free of the paralysis of fear, guilt, and the unknown. Mundane matters always remain, yet this pilgrim’s progress continues…

Friends wonder if this—peak oil—is what I’m “into” now, a new obsession. They seem dubious. “So you’re really passionate about this stuff?” If, by passionate they mean “the state of being acted upon or strongly affected by something external, especially something alien to one’s nature or one’s customary behavior” then, yes.

I don’t want this to be my passion, but is there a choice?

Hello, hello, hello, is there anyone in there?
How can you be a human, a parent, a spouse, a neighbor, a Christian, an Earthling, and not be preoccupied by this?

Once you’ve swallowed the little red pill (what used to be known before The Matrix as tasting the fruit of the Tree of Knowledge of Good and Evil), you’re kicked out of the garden of oblivious innocence and blissful ease. It’s not fun, it’s not sexy, it does not garner party invitations and it does not bring satisfaction or contentment.

It doesn’t even help you feel mentally-prepared. It just makes you feel anxious and hyper-aware. It alters relationships, as well as your perceptions of previously routine tasks and choices. It both clouds and clarifies everyday thinking.
My mind wanders now whenever it’s time to pay bills, for example: so what if the mortgage gets paid….a useless paper deed to this or any other property is so not going to matter….a paid-in-full status on the utility accounts will not bring us any more water or juice when they’re shut down….why renew the truck registration when it’ll probably soon become just another permanently-parked, hopefully raccoon-proof chicken coop?
When an average, check-writing, middle class housewife begins thinking this way, a fundamental shift has occurred. And one far more radical than simple political disaffection. It’s not about the money, it’s about the folly, about the arrangement of deck chairs on the Titanic. These things may matter for the short-term, but clearly such things will not matter one whit in the future. (I can’t even begin to imagine the anarchic thoughts of someone who has already lost life savings, or been forced from their home by robo-foreclosure or debt from hospital bills.)

You don’t need a weatherman I’m not a polemicist or a college professor or even an online thought-leader, but I can sense which way the wind blows, and these days it’s a foul wind that carries the fetid stench of rotting rubbish. The heap of decaying institutions, basic former certainties and hopes and quashed dreams grows bigger daily. And of course the municipal services that deal with this trash are dwindling, too.


It’s often said that economics is a soft science, one based more on perceptions than realities, on collective faith-leaps and mutual expectations and assurances, on responsibility and trust. Well, it’s gotten soft all right — it’s all turned to mush — and there’s just no substantial foundation on which our personal and collective futures can rest. Add to it the weight of peak oil, and the structure of slop is not just unsound, it’s altogether insane. And it takes some pretty powerful mass doubling to ignore the multi-layered obvious.

Once when I was a kid, my dad (then a senior editor at the Federal Reserve) dressed up as The Malthusian Spectre for Halloween. He wore a zombie mask and a ragged bedsheet and hung some of my old broken baby dolls and a loaf of Wonder Bread around his neck. I guess back in the seventies, economists in the First World thought that predictions of massive starvation and overpopulation were ridiculous.
But Dad’s costume sure left an impression on me.

Little did I realize we’d get the trifecta Now we have the terrible trifecta of Peaks, with a capital "P": water, food, and most importantly, oil—which is what is needed currently for the water and food. The Malthusian Specter is nothing compared to the coming collapse.

Sure it’s a drag, but current and future suffering calls upon us to be passionate, and begs us to show compassion. How we react to this calling matters. So many people I know want to avoid negativity in every way possible, even mocking or ignoring the stark realities, keeping only “positive thoughts,” “eliminating stress,” and taking the “it’s all good” approach. Hardly a balanced, real existence, embracing the light and the dark that both the human condition and the end of oil represent.
I don’t want the clumsy, ugly flatness of denial, inaction or depression.

I want to be brave. The word bravery is linked to passion, and derived from pathos, which means overcoming and suffering the barriers on our journey. In my new chain of being, someone who strives to combat The Coming Famine, and teaches and helps others do so, is at the top of the chain.

When we are all kicked out of our oil-soaked oblivion, when we’ve almost completely ruined our Eden, how we respond matters. I am determined to prepare and repair, to learn and train, to shelter, to work, to progress.

Mark my word Back in the day my dad also told me about the legendary German hyperinflation after WWI: how they had to take a wheelbarrow full of banknotes to the bakery just to buy a loaf of bread. This was just mind-blowing to my childish weekly-allowance-spending sensibilities: how could money ever be worthless?

It was the classic example of the declining value of currency when over-issued, but it happened to Deutchmarks, not dollars. That couldn’t happen to us, I reasoned — only to war-weary, pitiful Germans, who ate weird dark unsliced bread anyway.

Recently, I heard the story told again by a preacher on the radio. Only, this time, when the Hausfrau came to retrieve her cart full of marks to pay the baker, she found the pile of useless paper money fluttering on the ground; the wheelbarrow had been stolen, instead. Again, a fundamental, stark shift in the standard version of the economic canon.

This is where I am now: I would rather have the wheelbarrow. I know life will not change overnight, that the dissolution of relative prosperity and creature comforts will be somewhat gradual. (My friend and I used to lament how everyone took things for granted. We wished for a period when folks would cherish something as special as an orange for Christmas. Be careful what you wish for…) Yet my faith in basic economic models, functions and institutions has disintegrated to such an extent that I would rather have the wheelbarrow, the item of utility. The thing that will help me move soil or my own rubbish, or to grow food.

Economic upheaval is one thing: we’ve dealt with that before – nationally and internationally — always softened by the cushion of plentiful oil. But marry the foundering economy with the end of cheap oil, and our society becomes an unholy unsustainable union, with the bastard offspring of climate change. It simply cannot hold.

Sturdy shoes, warm socks Who really cares anymore about money supply, purchased mortgage-backed securities, or anything the Fed does? Even the foreclosures and loss of jobs and savings don’t exude the tragedy they once did. They’re commonplace, mainstream, old news, the new normal. There’s a whole new set of more practical concerns. I now prize things of real value, permanence and utility: stone, metal, my grandmother’s quilts, hearty plants, sturdy shoes and warm socks.
But most of all I value responsible, brave, passionate people.

.

White Knight of Zombieland

SUBHEAD: The Fed's effort now suggests that the harsh effects of Peak Oil are to be felt imminently. Our waste-based economy is a zombie.

By Steve Ludlum on 5 November 2010 in Economic Undertow - 
(http://economic-undertow.blogspot.com/2010/11/white-knight-of-zombieland.html)
 
   
Image above: Bust of zombie version of superhero Colonel America. From (http://www.gametrailers.com/users/bobafett300/gamepad/?action=viewblog&id=99236).  

Now the furor over Quantitative Easing (QE) and whatnot has been swept into the past. The question now is what happens after QE proves to be a failure? The cliche is 'QE 5 - 6 - 7' but this is unlikely. Why? The failure of this iteration of QE will be the end of the Federal Reserve. In this real world, not the zombie world of phantom central banks and imaginary wealth, failure has consequences. Bernanke's bet is a tremendous gamble. There is nothing short of desperate necessity would compel him to take it; and this speaks to our clear and present dangers.

The Fed has a relevance problem which orbits around the dollar price of crude oil and the current $13.5 trillion US budget deficit. Since this latter is ongoing with no possibility of retirement in sight, it is the certain the Fed will continue monetizing (printing money). Since the crisis began servicing this debt has created difficulties requiring the shuffling of funds between primary dealers and overseas central banks.

The massive credit overhang and the effect deflation has on currency value increases both the risks and dangers of a failed Treasury auction. The solution is direct monetization but this has adverse effects on the credit market which is ... uh, useful to actually price credit risks.

The Fed argues that its goal is to reduce lending rates and increase employment but this is a lie. The Fed risks crowding out the Treasury market so as to guarantee a bid and funds for Treasury operations. Because of a relative shortage of 5- 10 year Treasury securities the Fed will also likely buy mortgage-backed bonds and protect the flailing mortgage business from the consequences of its own criminality.

By monetizing the Fed creates extraordinary risks that are then priced into debt in place of the demand for credit that is ordinarily priced into it. These 'other' risks are ones the Fed does not want to think about. By monetizing, the Fed becomes both the lender and borrower of first and last resorts.

Once begun, the Fed must monetize until the end, when circumstances will not allow it anymore. This is the kind of risk that the markets will price into Treasury issues. By attempting to solve one problem the Fed creates greater downstream problems. What the Fed buys is time but the cost is very high. Part of this new risk is showing up in 30 year Treasuries.

Part is the mechanics of the trade, the rest is this default risk. What the Fed also buys at great expense is the admission that it has no clue as to what is behind our wasting, zombie economy. Fortunately for the Fed, it and the Treasury have been monetizing US debt since the Vietnam War era. Countries that choose to monetize can do so for very long time periods, witness Japan since 1990. At the same time, doing so does not address any underlying structural issues.

Since monetizing is a compounding exponential function at some level the process accelerates then breaks down. After that point borrowing to service debt is not possible. The problem the Fed cannot hope to solve is our broken energy balance sheet, not the finance version. Servicing debts by monetizing them or burning- excommunicating- or exorcising them will not solve the structural energy waste problems that propel the current economic malaise.

Nevertheless, Bernanke is playing a clever game. He can create a distraction and hope someone else shows up with an energy solution. He also realizes if he goes too far and monetizes too much he risks being 'outed' as irrelevant. He has to monetize enough to attract attention but not enough to suggest that what is doing is failing. At the same time he cannot possibly succeed as his actions have no relationship to the real problems.

Bernanke is a rodeo clown with a beard. All he can do to keep the bucked rodeo cowboy - the US economy - from being trampled is to distract the enraged bull. I almost feel sorry for the dude! That bull is going to be trampling until the end of time. With the Treasury absent from policy and the will to legislate more fiscal funding evaporated the only support for 'Recovery Lite' is Bernanke and his con game.

 The finance nincompoops that decry the vanishing dollar and incipient inflation are playing Barnyard Ben's game. Perhaps he's hired them! Without this chorus of Zero Hedge ignoramuses Bernanke would have no traction in the real world. When Marc Faber and the central bankers of China and Germany get up and squeal that QE is ruining things they are giving BB credibility that he cannot possibly earn by himself.

The actions rather than the words suggest that the wheels are in the process of falling off business as usual. Bernanke's actions inform us that the recovery is a sham. He promotes inflation: adding more money to reserves guarantees there will be no inflation even as the recently rising oil prices also guarantee there will be no inflation.

 First of all, inflation is not that are prices rising but an increases in the supply of money. More money stuffed into reserves creates an increasing incentive to keep these reserve funds from leaking into circulation. Inflation - or in this case, hyperinflation - only takes place when funds are in circulation and transacting more frequently, which is the 'velocity' of money. As more reserves are swept into traps the increase itself represents potential inflation. That is, there would be inflation if the funds in the traps were circulated.

Since releasing funds into circulation would reduce their value, they are kept in the traps at all costs. The more reserves the Fed creates the tighter the traps are that hold them. Increased reserves guarantees that more of these reserves will be liquidated when the traps finally implode. Liquidity/currency traps are places where money goes to die. The killer is the massive overhang of unrecognized debt exposure that is on the balance sheets of the traps themselves. The amounts of the debts are far greater than the currency in the traps. Even gold is a currency trap as it is pledged as margin collateral elsewhere.

Most funds in currency traps are forms of collateral for debts on the traps' balance sheets. They aren't called traps for nothing. When the gold bubble- liquidity trap collapses, gold speculators will get hammered. Getting into a trap is easy, getting out when everyone else is trying to do the same thing is fatal. If cash in accounts is trapped within insolvent banks the accounts will be frozen and rendered inaccessible. Real estate is the worst kind of currency trap.

When the danger appears there will be no buyers for real estate and cash spent on it will evaporate. In hyper- inflationary China, cash speculative purchases of apartments are likely to return nothing as the buildings themselves will revert to state ownership leaving the speculators empty handed. Lenders will be repaid in yuan that has near- zero value. These ruined lenders will ruin others in turn returning pledged collateral to the state which holds the underlying leasehold value of the land upon which the buildings themselves are erected. The Fed cannot solve the dollar price of crude.

A Fed- generated price bubble in crude can only crash when the price reaches an unsupportable level. Afterward, the price will recover from crash lows and reestablish the equilibrium price at the upper bound where any further increase destroys demand. This is the 'value- peg' of dollars priced in crude. Here, the dollar has real value.

Currently, there is no 'scarcity premium' to ubiquitous dollars which is a world- wide benefit of the dollar as reserve currency. Since dollars have this non- money value relative to other, scarcer commodity currencies it is almost impossible for the US dollar to be 'destroyed' by reducing is F/X value. The dollar at any exchange rate by the size of its float stabilizes fuel prices ... to a point.

 If the Fed was to somehow succeed and destroy the value of the dollar by widespread dollar revulsion overseas, some other currency would become pegged in value to crude in the dollar's place. Once that happens, the US and other buyers would have to either buy that currency - at a great disadvantage to the US - or buy fuels with dollars at a discount to the pegged currency. Buying a second currency with dollars would be extraordinarily expensive. Why?

Because any other currency would be scarce in circulation relative to the dollar and this scarcity would cause its value to be bid up. If the US was to bleed liquidity traps and start circulating more dollars to afford this price the effect would indeed be hyper- inflation and fuel would quickly become unaffordable. It's price would rise in dollars faster than dollars could be circulated. The inevitable crash might not reduce the price of fuel because the post- crash dollars would not be competitive overseas versus the 'other' currency which would be held by creditor nations such as China, India, Germany and the south Asian countries.

These countries have large F/X reserves and which would certainly avoid the crash outcome that dollar inflation would wreak on the US itself. For all extents and purposes the 'death' of the dollar would effectively put the US out of business as an industrialized nation.

Meanwhile, the dollar/crude peg is aggressively deflationary. Being exchangeable on demand for a valuable physical good the dollar does now and will have increased value. This is the inevitable outcome of physical shortage. 'Barnyard Ben' Bernanke's foray into experimental monetary policy is tragic and romantic ... as well as irrelevant. Regardless of his efforts the dollar/crude peg will reestablish itself at some level with dollar recognized as a defacto hard currency.

At that point the deadly arbitrage between the dollar and other currencies will begin and the world's economic activity will shrivel into little other than buying and selling money in order to obtain increasingly valuable oil. This is the exact same thing that took place during the early 1930's and resulted in mass bank failures in the US and elsewhere and only ended when the peg between paper money and gold was broken. As was the case then, the only escape from money- value generated deflation will be for economies to 'go off' oil and break the peg. There is no other way!

Reductions in the use of crude oil will be by necessity be of the order of 80- 90% of current levels of usage - the level at which the US can become a sustainable multi- year net exporter of crude oil! The great recessions of 1973 and the early 1980's were caused by supply reductions in the US of 10% or less. Cuba's regression in the post-Soviet period were the outcome of import constraints on the order of <20 href="http://www.nydailynews.com/archives/news/1999/03/01/1999-03-01_richard_whitney_the_harder_t.html">The tragedy of Richard Whitney who saved the stock market on Black Thursday:
Whitney had been a legend since Black Thursday 1929, when, amid the din of the roaring calamities that were wiping out fortunes, he strode onto the exchange floor and boomed: "205 for Steel!" With this one bold offer - U.S. Steel had plummeted to well below 205, but Whitney was a Morgan man, and thus it followed that America should be no less confident than the House of Morgan - the worst panic in 50 years briefly subsided. "HEROIC ACTION RALLIES MARKET", the papers clamored, and Whitney was Wall Street's white knight from that moment forward. In May 1930, he was elected exchange president, marshal of 1,357 member brokers - and now, as the economy reeled, the nation's most vocal defender of their traditional interests. As securities values continued to decline, as suspicions mounted that slick traders were responsible, as New York Congressman Fiorello LaGuardia introduced a bill requiring securities to be registered with the government, Whitney appeared many times before the Senate Banking and Finance Committee, crusading to keep the market free, denouncing his inquisitors as know-nothings. It was not the professionals who had brought on the crash, he argued, it was the greed-maddened public, the seamstresses and the bootblacks and the rest of the ignoramuses and nuisances who pumped their nickels and dimes into a marketplace best left to the better classes. Control was not to be removed from the descendants of the men who had in 1825 begun gathering at the old Wall St. buttonwood tree to transact their affairs. It would not do. But the arrival of Roosevelt's New Deal brought still louder calls for government intervention, and increasingly Whitney was cast as the villain in the public's great war on big business, the living embodiment of the frostily conservative old-guard financial barons who controlled the nation's money. Finally, nothing could prevent the creation of the bristling New Deal watchdog called the Securities and Exchange Commission. By March 1935, even Whitney's allies agreed he had to step down from the exchange presidency to ward off any further federal incursions. There was no appeasement. Late in November 1937, SEC Chairman William O. Douglas made it plain that the stock exchange was going to be a regulated public institution. The stage was now set for epic combat between the old millionaires and FDR's Depression-stricken America. At this precise moment, disturbing matters were coming to the attention of the stock exchange's board of governors. There seemed to be irregularities in Richard Whitney's private affairs. It, well, appeared that the eminent Richard Whitney was a crook.
All so sickeningly familiar. Whitney's Black Thursday rescue was followed the next week by Black Monday and Black Tuesday, then a whole calendar of black days. The lights in America were not to be re-lit until the New Deal and then for almost twenty years when in 1948 the US used the Marshall Plan to recapitalize its economy by rebuilding Europe and Japan. Now comes the latest version of Richard Whitney with his order of "205 For Steel!" He rides a pale horse like Death himself as he streaks across a sky empty of stars. He is Ben Bernanke the White Knight of Zombieland. .

QE2 is Fooling You

SUBHEAD: This is nothing but another move by the Fed to bail out the lethally wounded banks long enough for insiders to get out.

 By Raul Ilargi Meijer on 5 November 2010 in The Automatic Earth -
(http://theautomaticearth.blogspot.com/2010/11/november-5-2010-qe2-is-fooling-you.html)

 
Image above: Last chance to get the money out of banks. Still from "Public Enemies". From (http://www.aintitcool.com/node/36106). 

 Let's start off by repeating once again what I still don't think everyone acknowledges: in essence, quantitative easing is a measure that is entirely experimental at best. If there is any proof regarding its effectiveness, that proof is negative. Japan's early millennium QE didn't revive its economy. Far from it. The Fed's QE1, initiated in early 2009 and subsequently vastly expanded, never solved the problems it was alleged to be able to solve.

 One may argue that it kept the economy from sliding downward even further, but one can claim that, and many of those with skin in the various games do, for a litany of stimulus measures such as TARP and the "Obama stimulus" as well. The success of all these measures added together surely can't be seen as anything but ephemeral (re: unemployment and foreclosures), and the claim, if one were indeed made, that QE1 all by itself even just managed to keep the US economy in its present prolonged and drawn-out Wile E. Coyote moment, has no substance at all that is based on actual fact.

Or, to put it another way, if QE1 achieved such a thing, which we don’t and can't know, the TARP and other stimulus measures were even grosser failures than we already recognize them to be. Still, this week brought another round of QE in the US. Why is that? Are we to believe that Bernanke et al perhaps can't read or do simple calculus? Are they desperate enough to throw the nation's financial future to the sharks, come what may? Has their faith in their particular sect of economics blinded them to such a degree that they can shake off all the evidence to the contrary and goose march ahead believing that even though all they did before has failed, "this will be the one"? Of course not.

You may think by now that Geithner and Bernanke and Larry Summers and Bob Rubin and all the rest of the pack are miserable failures and two sheets to the wind and all that, but you'd do better to give them a lot more credit than that. QE2 is here, despite the gigantic failures and behemoth losses of its predecessors, because QE works like a Mother Mary statue in tears' bleeding charm. Of course these guys all know that no proof of a QE ever reviving an economy exists.

But they can pretend it does, and so they do: $900 billion, even for them, is real money. Thing is, they never meant QE2 to do what they publicly claim they intended it for. This is nothing but another move to bail out lethally wounded banks. A full additional $900 billion and counting was announced this week. Basically nothing but a swap of long term for short term paper, and therefore necessarily a -very- short term measure. What does it achieve, apart from a knee-jerk market reaction? Wall Street banks get another injection of short term breathing space. That's all. And what was that last number on insider selling vs buying again? 3000 to 1?!

Look, these people can't sell all their hygienic paper all at once, there's silly market regulations that prevent it, they need a time window to do it. Hey, Bank of America rose 2% today, and Citi was up 3.7%. Now, if all is that rosy, why are William K. Black and L. Randall Wray calling for BofA's books to be opened and the entire firm to be nationalized? Well, BofA shares are at $12, an 80% loss from 3 years ago, and Citi's at $4, a well over 90% loss over the same time period. These are America's largest financial institutions, and finance over the past 10-20 years has become a disproportionally huge chunk of the US economy.

And its politics. And that's where the crux is. I don’t know about you, but I have completely lost interest in trying to figure out which candidate in the midterm elections got how much from Wall Street. They all need their campaign contributions from bankrupt institutions such as BofA and Citi if they want to have a shot at being elected. It's a closed system, it really is. Putting a few guys behind bars wouldn't change that. And besides, none of them paid that kind of money just to be put behind bars to begin with. But let's not try and solve it all in one go.

For now, please understand that QE2 was never intended to jump-start the American economy. It was meant to prolong Wile E.'s 15 minutes of fame, to keep banks like BofA and Citi above water long enough to allow anyone who has some skin in it to get the hell out without triggering any alarm bells. I mean, I see people triumphantly proclaim that stock prices are almost back to where they were.

But look at those two banks! They're barely alive anymore, even in the markets. Citi's $4 a share is gutter territory, if not penny. Yes, sure, Goldman Sachs and JPMorgan have lost much less, percentage wise. And you know why? Because their links to Main Street are much less pronounced than those of consumer banks like BofA and Citi. That’s the difference. And Main Street is vanishing altogether. There is money being handed out in QE2, which in the end is awfully simply yours, and which is thrown overboard in a way that makes you believe it's in your best interest. Some people see it as a hidden tax, but that's a far too gentle view.

Daylight stand-and-deliver robbery or Grand Theft Auto are much more accurate denominations. After all, if this were a tax, it's clear to anyone and their pet parrot that it will never ever be paid off. QE1, by the way, was to a large extent about the Fed buying up mortgage backed securities. Which, so it turns out, are based on, to put it mildly, highly disputable underlying "assets". What was it, $1.7 trillion?! And what would you think that's worth today? Or rather, what will it be worth once mark-to-miracle accounting can no longer "do the Wile E."?

Between the Fed and Fannie Mae and Freddie Mac, the American people own very very many trillions of dollars in silly paper. It's hard to say what its true value is, but once them whips and chips come down, it’ll be safely below double digits. Which will add up to much more than any hidden tax could ever hope to pay back. Fannie just asked for another $2.5 billion of your cash, and they will get it too, and there's nothing you can do about it. And you're right, what's $2.5 billion in the grand scheme of things? Then again, what's 1 in 7 Americans relying on food stamps?

What does any of it mean anymore? 17% U6 unemployment? 4 million 2010 foreclosures, many of which are based on at least shaky, and pretty likely illegal, papers? If that doesn't have enough meaning to move media attention away from rallies to restore whatever it is that apparently needs restoration, what will? 1 in 3 on food stamps? 40% jobless? Tent cities around every major city? $25 trillion in quantitative easing? Yeah, the markets had a knee-jerk upward reaction. And that, or so it seems, is all anybody needs. Hyperinflation is sure to follow, or so they say. Then again, they said the same when QE1 occurred.

Didn't happen, though. Will it this time? Will gold rise to the stratosphere? If so, who will buy? Bank of America? With your QE2 billions? Not very likely, they need that free cash to cover up increasing losses. Is it that hard to understand, simple calculus? That every dollar spent ostensibly "on your behalf" will have to be paid back by you, even if not a penny of this, your own, money, went towards making your life better? If that is really so, then QE2 works exactly the way it was meant to work. They're not all that dumb, and they're not making the grand mistakes some folks claim they do. They're robbing you blind in plain daylight, and, as they go along, make you believe that's in your best interest.

 It’s all nothing but a high-stakes game of pick-pocketing. Just never even try to tell me again that it's not successful. And i don’t mean delivering economic growth; the US economy won’t see real growth for more years than you care to know. No, QE2 is very simply successful in fooling you.

 .

Dollar's Decline - Oil to Soar

SUBHEAD: What current Fed dollar actions mean for Hawaii. At $100/barrel things will be looking bad.

By Brad Parsons on 5 November 2010 in Island Breath -
(http://islandbreath.blogspot.com/2010/11/what-current-fed-dollar-actions-mean.html)


Image above: What's the worst case scenario. The streets of Waikiki are empty. From (http://picasaweb.google.com/lh/photo/xUwDRlg66O2l2AXNQW3ZCw).

 
Today, the futures price of a barrel of oil rose again to above $87. As expected, it has been rising since Federal Reserve Qualitative Easing (QE2), buying government bonds with digitally created money out of thin air, began earlier this week. That is because of the logically expected reduction in value of the dollar, regardless of how it is described, a deliberate devaluation of the dollar, eventually creating inflation, whether officially measured or not.

Looking at the chart below, the beginning of the most immediate recession coincided with the price of oil rising from a similar current price to $100 a barrel in October and November of 2007. The recession was dated to have begun in Nov. 2007. QE2 is suppose to stimulate the economy, but with banks holding onto excess liquidity, QE2 is instead devaluing the dollar, raising the price of oil in dollars, and can be expected to further worsen the economy when the price of oil approaches $100 a barrel again.


Below is the futures price of an ounce of gold. From October 2008 it has risen from about $750 per ounce to as of today rising to approach $1400 per ounce. This too is in expectation of inflation on the dollar, regardless of whether officially measured or not.
For Hawaii, as we have written before, Fed monetary and U.S. Government fiscal actions, whether reasoned or not, have been escalated such that the dollar will lose value, oil priced in dollars will cost more, transportation and all other services dependent upon oil and gas fuel will go up in price, and price elastic demand will go down for services including a higher fuel cost component. This will all be very bad for cost of living in and tourism to Hawaii.

We are already seeing that the surge in tourism to Hawaii of the past summer that lasted into September, has dropped off in late September, October, and early November. Expect markets and tourism reports in the months ahead to verify this, and Oahu economists to write about it... after the fact.  

.

On the Precipice Again

SUBHEAD: Bank of America edges closer to tipping into insolvency... hence, so do we all.

By Jonathan Weil on 4 November 2010 for Bloomberg News - 
(http://www.bloomberg.com/news/2010-11-04/bank-of-america-edges-closer-to-tipping-point-commentary-by-jonathan-weil.html)

  Image above:Painting "Pie in the Sky" by Mark Bryan. From (http://www.artofmarkbryan.com/Pie_in_the_Sky.html).  

It was only last April that Bank of America Corp. was making fools out of the doomsayers who had called for its nationalization a year earlier. Taxpayers had gotten their bailout cash back. Investors who bought its shares at the bottom were making a killing. Government leaders lauded the company’s rescues, both of them, as a great success.

Now the bank may be on the verge of trouble again. Its stock has fallen 41 percent since April 15. Mortgage-bond investors are demanding untold billions of dollars in refunds. The foreclosure fiasco is metastasizing. A member of the Troubled Asset Relief Program’s oversight panel, AFL-CIO attorney Damon Silvers, openly worried at a hearing last week about the risk that Bank of America might need another bailout. A few more months like the last one, and we may be wishing Bank of America had never returned its $45 billion of TARP money. Y

ou wouldn’t know there’s anything wrong with Bank of America by an initial look at its balance sheet. The company showed common shareholder equity, or book value, of $212.4 billion as of Sept. 30. And its regulatory capital ratios have risen steadily throughout the year.  

Tipping Point
Judging by its shrinking stock price, though, investors are acting as if Bank of America is near a tipping point. Its market capitalization stands at $115.6 billion, or 54 percent of book value. That’s the second-lowest price-to-book ratio among the 24 companies in the KBW Bank Index, and well below the 76 percent ratio the company was at in October 2008 when it landed its first round of TARP dough.

Put another way, the market is saying there’s a $96.8 billion hole in Bank of America’s balance sheet. When I asked Jerry Dubrowski, a Bank of America spokesman, about the disparity, he said: “I’m not going to comment on the book value and the stock price.” It may be the shares are a bargain at $11.52, if the company’s books are right.

Another plausible scenario is that Bank of America’s management, led by Chief Executive Officer Brian Moynihan, has lost so much credibility with investors that the stock’s decline might start feeding on itself. The problem for anyone trying to analyze Bank of America’s $2.3 trillion balance sheet is that it’s largely impenetrable. Some portions, though, are so delusional that they invite laughter. Consider, for instance, the way the company continues to account for its acquisition of Countrywide Financial, the disastrous subprime lender at the center of the housing bust, which it bought for $4.2 billion in July 2008.  

Goodwill Purchase
Here’s how Bank of America allocated the purchase price for that deal. First, it determined that the fair value of the liabilities at Countrywide exceeded the mortgage lender’s assets by $200 million. Then it recorded $4.4 billion of goodwill, a ledger entry representing the difference between Countrywide’s net asset value and the purchase price. That’s right. Countrywide’s goodwill supposedly was worth more than Countrywide itself. In other words, Bank of America paid $4.2 billion for the company, even though it thought the value there was less than zero. Since completing that acquisition, Bank of America has dropped the Countrywide brand.

The company’s home-loan division has reported $13.5 billion of pretax losses. Yet Bank of America still hasn’t written off any of its Countrywide goodwill. Dubrowski, the company spokesman, declined to comment when I asked him why not. In its latest quarterly report with the SEC, Bank of America said it had determined the asset wasn’t impaired. It might as well be telling the public not to believe any of the numbers on its financial statements.  

No Surprise
Combine that with Bank of America’s reaction to the robo- signer scandal. (Working on it! Wait, halt foreclosure sales! No, restart them! Whoops, still checking records!) Add in the $141.6 billion of home-equity loans on Bank of America’s books, the real value of which is unknown. And it should be no surprise that the company’s stock price has been plunging. So, does Bank of America need to issue new common stock to raise capital? Its executives say no. They point to the usual regulatory benchmarks, as well as their own calculations of tangible common equity. This is a bare-bones capital gauge, showing a company’s ability to absorb future losses, which excludes preferred stock and most intangible assets.

Using Bank of America’s $129.5 billion figure for tangible common equity, though, that’s still about $14 billion more than the company’s market cap. So the market isn’t just discounting the intangibles, most of which don’t count in regulatory capital. Investors are wary of the company’s other numbers, too.  

Artifice of Strength
The tough part for Bank of America executives is that the company’s future may be out of their hands. Writing off more worthless assets or boosting reserves for future losses might help their credibility. (The bank wrote off $10.4 billion of goodwill unrelated to Countrywide last quarter.) Or, the market might perceive such moves as a sign that the artifice of strength is broken. It’s hard to tell. As for the government’s too-big-to-fail guarantee, it’s probably still there. But who knows?

 Republicans have won back the House. The answer is up in the air. The only certainty is there is none, aside from the knowledge that Bank of America’s top executives have no idea what goes on inside the bowels of their company. For all we know the stock could double, or be a donut. The fate of the financial system hangs in the balance. Once again, we’re all on the hook. .

GMO Patents at Risk

SUBHEAD: Justice Department surprises biotech industry with gene patent ruling.

By Richard Harris on 3 November 2010 for NPR.org - 
(http://www.npr.org/templates/story/story.php?storyId=131046392&sc=17&f=1001)

   
 Image above: Illustration of money derived from genetic engineering. From (http://www.biojobblog.com/2008/06/articles/ideas-and-indulgences/life-sciences-patent-factoid/).  

The Justice Department is proposing to overturn 30 years of legal precedent by sharply limiting patents on genes. The government surprised just about everyone who follows this issue when it suggested this change of policy in a court filing last week. The U.S. Patent and Trademark Office says that for the time being, it's not changing its rules, but the government's brief has thrown open an old debate about where to draw the line in patenting parts of nature.  

Surprising Reversal
The debate bubbled up again last spring, over the issue of patents on genes related to breast cancer. Myriad Genetics, a private health care company, has patented two genes, BRCA1 and BRCA2, which are the targets of a widely used test for breast and ovarian cancer. But a judge in Manhattan sided with plaintiffs who said genes like this shouldn't be patentable in the first place. The company appealed. And Myriad general counsel Richard Marsh says they asked the Justice Department to weigh in, figuring the government would defend its long-held position.

The government weighed in, but largely against Myriad. "In that regard, yes it was surprising to see that there's been this switch in thinking by the current administration," Marsh says. Marsh says even if the company loses the court case, their tests are still protected by several other patents, which aren't being challenged. "As to Myriad, this case is not going to have any material impact," he says. "What we're concerned about is, we're part of the biotech industry, and we believe, as to the biotech industry, this will have a very, very significant impact."

 Intrinsic Value
Gene patents are critical for companies like Myriad, Marsh says. If Myriad hadn't had patent protection, Marsh argues it would never have invested $500 million to develop these tests in the first place. It would be too easy for other companies to swoop in and use that knowledge. But Bob Cook-Deegan of Duke University says the issue is actually not as sweeping as all that. "Every jurisdiction in the world has decided: Yes, you can patent genes when what you're doing is producing a valuable thing," he says.

But the patents that are now under fire have their value simply because they describe the genetic sequence on the DNA. Diagnostic tests look for that sequence. "What has never been contested in court until now is this new concept of diagnostics," Cook-Deegan says. And that's now a concern because soon there will be a whole new testing technology that will allow labs to look at thousands of genes all at the same time.

Will a company ever be able to develop that test if many of those genes are patented by other companies? "We don't want 15 different companies, or 100 different companies, testing a hundred genes," Cook-Deegan says. "It just makes no sense. And this is the first time a judge has had to make a decision about that new context, and looked at those patents in that new light."

 Bad For Business?
But the example that Cook-Deegan raises doesn't trouble F. Scott Kieff at George Washington University Law School. He says consider your laptop computer. There are thousands of patented inventions in there. The company that makes the laptop just needs to take the time and spend the money to license those technologies from the patent holders.

"While it's conceivable that patents could clog the market, could create a gridlock and be anti-competitive, our markets over the past 30 years tell the opposite story," Kieff says. He argues that biotech took off in the United States, but not in Europe or Japan, precisely because the U.S. is more generous in allowing companies to patent genes.

 Overturning that policy, he says, would be bad for U.S. business. But what about consumers who might benefit from the next generation of genetic tests? Myriad isn't required to let other companies use its patented genes. But Richard Marsh at the company says don't worry. "We clearly appreciate and agree it would be very inappropriate to have a patent on a given technology and not let it be utilized in a fashion to benefit the public," he says. But he would like his company to make the profit.  

.

Enough!

SUBHEAD: Only by healing our belief in our separateness will we be able to finally and fully restore our balance with Nature.

By Paul Chefurka on 3 November 2010 in Approaching the Limits to Growth - (http://paulchefurka.ca/Enough.html)



Image above: Painting "Newborn" by Alex Gray (1996). From (http://www.alexgrey.com/gs.html).
 

Whenever I contemplate the spectacular mischief that we humans have wreaked on our world, I am compelled to ask how this could have possibly happened. The despoilment of our planet seems to be the exact opposite of how I would expect a thinking, feeling, caring creature to treat their home. What could have driven us to this, and what perverse qualities could have allowed us to ignore the consequences of our actions for so very long?

At first blush, our problems seem decidedly physical. Dangerous gases drift in the air; acidity rises slowly in the ocean as the fish disappear from its depths; garbage and detritus of all kinds fouls the land where lush forests and grasslands once ruled. All these disturbances point back to human actions.

The proximate causes of this planet-wide distress include economics, politics, and personal and corporate greed – all facilitated by a technological cleverness that rests on a bed of dispassionate science. I have spent over 50 years of my life trying in vain to understand our environmental problems as purely physical problems.

When I viewed them in those terms, the fact that such problems even existed in a rational, scientific culture seemed nonsensical. However, when I recently began to understand them as consequences of a rupture in the human spirit they finally began to make sense to me.

Yes, they are compounded by political and economic forces, but in my view even politics and economics are simply consequences of the same qualities of the human psyche. Since the dawn of consciousness, human societies have been driven by a complex web of factors with their roots embedded deep in our evolved human nature. Power relationships and hierarchies, kinship and xenophobia, selfishness and altruism, competition and cooperation, curiosity and apathy, and countless other polarities mingle together to form the infinite variety of human dynamics. Underneath it all, though, lurks our self-awareness.

Human self-awareness is the root of our sense of separation from the natural world, and from each other for that matter. It’s the crowning paradox of the human condition – at once both our greatest glory and our fatal flaw. It is behind the dualism – the perceptual split into subject and object – that gave us science.

It’s the source of our ability to see others as “different yet the same”, giving us the power to act altruistically. It’s also behind the sense of self and other that has allowed us to assume dominion over all we survey, whether animal, vegetable, mineral or human. Our sense of separation is the rupture of the human spirit that has allowed our current predicament to develop. If this is the case, then no physical, political or economic remediation will heal the wound.

The solution to our predicament is not – cannot be – material, political, economic, or simply philosophical. If a “solution” exists at all, it's orthogonal to all those domains. Only by healing our belief in our separateness will we be able to finally and fully restore our balance with Nature.

When I began to view the situation like this, I was finally able to see that there are in fact solutions, where none had previously been visible. These new solutions don't attack the predicament directly as a series of material, political, economic or technological problems. Instead, they seek to effect change from the center, by encouraging people to mature into an inter-connected adulthood and assume personal responsibility for their actions.

This approach follows Gandhi's dictum, "Be the change you wish to see in the world." The mischievous idea of science and technology as a post-modern "religion of salvation" with Ray Kurzweil's transhuman singularity playing the role of the Rapture and an economist making a cameo appearance as the Devil (think infinite growth on a finite planet...) resonates very strongly with me. But to be a little more precise, it's not exactly science that has failed us.

We have been undone by a toxic stew of classical economics, technological cleverness, love of progress, an attitude of Manifest Destiny and an unwillingness to accept any limits on our growth. Technology lets us use scientific discoveries to satisfy human desires of all kinds.

When we harness scientific knowledge to human ends, the outcomes we choose to implement are based on our wishes. If our wish is dominion over nature, we will use scientific principles to invent technology like mining machinery, continental energy grids, factory farming and the automobile. Of course, each of those inventions is presented within our cultural narrative as an obvious, irrefutable boon.

One of the points of having a cultural narrative is to put a positive spin on human activity. The spin is always in line with the narrative – or more precisely, in line with the wishes of those who create and sustain the narrative.

The fact that these inventions, the technological expressions of science, have a subtext of dominion over nature is carefully camouflaged, and the idea that this might possibly be a bad idea is thoroughly discouraged.

None of this would have been so damaging if people didn’t have such a natural ability to delude themselves into believing that whatever they wish for hard enough is possible. It’s kind of like clapping for Tinkerbell.

"The future is always going to be better than the past," and “My kids will have better jobs, bigger houses and faster cars than I did,” are examples of such magical thinking at its finest. Those two kinds of wishing – the wish to improve the human condition and the wish to see the human milieu keep growing forever – are not inherently different. I see them more as two points on a continuum.

On one end is simple desire; on the other end is unreasonable desire. They are distinguished less by any intrinsic difference than by the attitude and realism of the one doing the wishing. It can be very difficult to tell when the reasonable morphs into the unreasonable."I wish to own a small piece of land" becomes "I wish to own an entire island" which inflates into "I wish to claim a continent for my King" and eventually becomes "I wish to rule the world." The underlying desire is the same; it's just the scale and reasonableness of the wish that changes.

Whether or not a wish is realistic or deluded depends very much on the one doing the wishing. There are people who wish for our (and by extension, their own) material wealth to continue growing forever. There is no shortage of economists who will tell them that such a strange thing is possible. Are the dreamers deluded? Are the economists deluded?

What laws of nature would need to be violated for such a delusion to become reality? How is the worship of the Charging Bull of Wall Street materially different from worshiping the Golden Calf of the Bible, when both imply a violation of the laws of nature?

The world changes only when enough people have made a choice to change themselves. At what point will we each say, “Enough!” and choose a different path? Is anything keeping you from making that choice right now? As you finish reading this article I invite you to say it quietly to yourself. “Enough!” If you listen closely with your heart, you may be able to hear the life that shares our planet say, “Thank you.”

.