Bank Money Crunch Plan

SUBHEAD: 20 reasons why America’s next Bank Holiday will be a nightmare. What you should do!  

By James Rawles on 18 June 2012 for SHTF Plan -  
(http://www.shtfplan.com/emergency-preparedness/20-reasons-why-americas-next-bank-holiday-will-be-a-nightmare_06182012)  

[IB Editor's note: Time could be getting short for you to keep money liquid. Be prepared by this summer for possible trouble.]

 
Image above: Zombies at OWS demo in front of NYC bank with sign "Money hungry fascists are dead inside". From (http://www.eutimes.net/2011/10/zombies-join-the-wall-street-protests-in-new-york/).
 
The world is on now on the brink of a global credit crisis that could be far worse than the tumultuous events of 2008. The ongoing sovereign debt crisis in the southern reaches of the Eurozone indicate that bank runs in the region will continue, and that more bank closure “holidays” will be declared. Under a bank holiday, virtually all deposits could be frozen and irredeemable for days, weeks, or even months. The key question is: Will this crisis spread to the rest of Europe and then even to the United States? I urge SurvivalBlog readers–particularly those in Europe–to be proactive, to stay “ahead of the power curve.” While the Generally Dumb Public (GDP) wakes up some morning to hear news of a bank holiday, you will have long hence prepared yourself.

Digits Lost in the Ether–Redeemable Mañana?
Most people don’t realize that printed U.S. currency and minted coins amount to less than $800 billion, worldwide. That is just a small portion of the aggregate Money Zero Maturity (MZM) money supply that now exceeds $7 Trillion.

So what is in your bank account is just electronic money, and there is absolutely no way that even a fraction of depositors could get physical cash to redeem the digits in their accounts. If there is a bank holiday declared, there will undoubtedly be severe restrictions on cash withdrawals when banks re-open. Given the precedent of the limits on withdrawals of a few institutions during the Savings and Loan crisis of the 1980s and 1990s, I predict that withdrawal restrictions could go on for many months.

Here are 20 Reasons why America’s next bank holiday will be a nightmare:

1. A bank holiday will create a virtual blackout of information on not just checking and saving accounts, but also automated mortgage payments, CDs, and more. Our presently quite transparent banking system will suddenly become opaque. Your bank balance will become invisible. Your handy-dandy online banking web page will be replaced by a “Service Temporarily Unavailable” notice. The willingness to accept checks will evaporate in less than a day. The FUD factor (Fear, Uncertainty and Doubt) will be overwhelming.
2. Most businesses will no longer honor personal checks, corporate checks, or bank money orders. Showing a merchant your most recent bank statement isn’t likely to sway him. Again, the FUD factor will rule.
3. All checks in the U.S. are cleared through the automated clearinghouse (ACH)network. Most of this network is inside of banking system firewalls. Many Federal, State, and local tax payments are also handled through ACH. (A similar network exists for European banks–the Pan-European Automated Clearing House (PE-ACH), under the Single Euro Payments Area (SEPA) system).
4. Credit cards might not be accepted. The FUD factor will dictate that anything even peripherally related to the banking system will be suspect. (Even though the credit card companies have their own credit clearing mechanisms that are only attached to the banking milieu.)
5. Except for a few grandfathered recipients, Social Security payments are now made exclusively via bank direct deposit.
6. Military monthly pay, housing allowances, and ration payments are now made exclusively via bank direct deposit, in CONUS. That is true virtually across the board (Active component, Reserve, and National Guard.) Ditto for monthly military retirement payments.
7. Many State and Federal employees no longer get physical paychecks. They too, are trapped in the “direct deposit only” world.
8. Many Americans are now very dependent on bank debit cards (also known as a bank cards or check cards.) In fact, many people don’t even carry more than a few dollars in their wallets. If our world suddenly goes “cash only” most people will suddenly be out of cash.
9. ATMs, debit card transactions, and online banking can be shut down in minutes. This huge vulnerability of banking customers has already been evidenced by a few minor glitches.
10. Online payment systems like PayPal will be sharply degraded, because they rely on their ability to move funds to and from banks. More importantly, online payments are inextricably tied to credit card processing. If credit card processing is suspended, then online payments will be “dead in the water.”
11. Many regular monthly payments such as mortgages, insurance premiums, and some utilities are automatically debited from checking accounts. These will all come to a screeching halt.
12. SWIFT wire transfers will probably be suspended, freezing a good portion of global commerce. Similarly, International ACH transactions (IATs) will also be shut down, since they access the U.S. ACH network.
13. The ability to process credit card payments will be dubious, at best. Many merchants will wisely “just say no” to credit cards, even if their countertop POP terminals are still functioning and show available credit. And the fact that many credit cards are now just debit cards in disguise will only add to the reluctance of merchants to take any credit cards.
14. Point of purchase (POP) processing of credit and debit cards at gas stations has become ubiquitous. Nearly everyone now uses the “pay at the pump” option. Gas and diesel could become “cash only” transactions.
15. Most American families keep less than $300 in cash at home at any given time, including their kids’ piggy banks. For most families, that wouldn’t cover even one month’s rent.
16. Formerly distributed as “Food Stamps”, the USDA‘s Supplemental Nutrition Assistance Program (SNAP), provides benefits to low income families through Electronic Benefit Transfer (EBT) card payments. These cards look much like credit cards. And like checks, EBT payments are all routed through the ACH network. Again, this is a network that is inside banking system firewalls. If the banking system goes into holiday mode, then it may take days or even weeks to get EBT processing back on line. If the EBT payments stop, we can expect riots in metropolitan areas in less than a week.
17. Gift cards will be “iffy.” There are now two types of gift cards: “open loop” (or “network”) cards and traditional “closed loop” cards. Open loop cards are issued by banks or credit card companies and can be redeemed many places. It is likely that only closed loop cards will be honored by the issuing stores, because merchants will fear that open loop cards might have been zeroed out elsewhere. (If they can’t confirm the available balance, the card will be refused.)
18. Most Internet vendors are almost entirely dependent on credit card processing. If that processing system is disrupted, then mailorder firms will either have to cease operations, or have them slow to a snail’s pace, and be restricted to only non-bank money orders.
19. Reversion to U.S. Postal Service money orders (commonly called “PMOs“) will only be partially viable solution. This is because many small town and rural post offices don’t keep enough cash in their tills to be able to hand you $1,000 when you go to cash a PMO. You may be thinking, “Oh well, I’ll just ask them to write me a blank PMO, in exchange. Nope. A recent change to postal regulations designed to curtail money laundering banned money order-for-money order issuance. Bummer. And if you are considering using “Forever” postage stamps, hold your horses. Under a hygiene regulation published in the Domestic Mail Manual (DMM), postal clerks are not allowed to cash out (“buy back”) stamp booklets unless they are still in their sealed clear plastic master packages. So it might take decades to use up your Forever stamps, or you will be forced to liquidate them on the gray market at a slight loss.
20. Bank safe deposit boxes will probably be inaccessible. Plan accordingly.

Some Observations and Mitigation Steps:
Because so many pay and retirement benefit systems are now handled via bank direct deposit only, we could easily live through a frustrating “Roach Motel” period of several months when “Dollars check in, but they don’t check out.” Be prepared to ride through that period.

If the European credit spreads to the United States, then immediately visit your company’s payroll office, and ask to be removed from their direct deposit system. This change might take a couple weeks. With a paper paycheck, you can probably cash it elsewhere, even if you own bank closes its doors–perhaps even at your local grocery store.

Keep plenty of well-hidden cash at home. Since it won’t be earning interest, some of this cash might as well be in $2 rolls of nickels. That method will also give you a hedge on inflation, and also serve as insurance against a currency reform. (Where a zero could be lopped off the Dollar, overnight.)
Be prepared for times for when anything other than greenback cash or perhaps silver coins will be eyed with suspicion, or rejected outright. Even USPS PMOs and drug store money orders may be refused. In the era of bank holidays, cash will talk. Keep plenty of it on hand. Oh, and needless to say, don’t store your cash in a bank safe deposit box. You probably won’t have access to it during a bank holiday.

Be wise and circumspect in storing cash at home. Don’t tell anyone other than your spouse about that cash. See the SurvivalBlog archives for suggestions on building secret hiding places, like this one.
A good portion of your “stash of cash” should be in the form of $1 and $5 bills. This is because during a banking crisis, many people will not be able make change for small transactions. And if your local power, water, and phone companies refuse checks, then you will need to be able to pay them the exact amount of your monthly bill. (They probably won’t have much “change”, either.)

Apply for at least one gasoline station chain charge card. In turbulent times when they won’t take your check or your VISA card, they might still take their own chain card.

At the tail end of a banking crisis–when the bank doors do re-open–the Federal Reserve will certainly have to crank up the printing presses. Even people that never had “mattress money” will want some. All this new cash will increase the velocity of money, locally. This will be inflationary, even at the same time that a the macro level, we will witness a huge dollar deflation. (This is because the multiplier effect of every dollar on deposit will work in reverse, as withdrawals are made.) These will be strange times, indeed. If you start to see any evidence of mass inflation kicking in, then be ready to spend your dollars as quickly as possible to parlay them into practical, barterable tangibles. Don’t be the last one standing in the game of Dollar Musical Chairs.

Conclusion The threats of credit crunches, bank runs, and bank holidays are not new. No society is immune from them. We’ve been fortunate here in the United States to have not suffered any limits on bank withdrawals since the Savings and Loan crisis of the 1980s and 1990s. But don’t expect this stability to be permanent. We live in a dynamic world with rapidly changing threats to our lives and livelihoods. Prepare for the worst and hope for the best.


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Capital Flight, Controls & Fear

SUBHEAD: Governments may also decide that the contents of safe deposit boxes may constitute evidence of criminal activity. By Nicole Fosse on 19 June 2012 for the Automatic Earth - (http://theautomaticearth.com/Finance/capital-flight-capital-controls-capital-panic.html) [IB Editor's note: This article as several lengthy quotes and references to support position that we have removed. Go to original source (link above) for that material.] Image above: An artist's incendiary response to his JP Morgan Chase bank statement from CEO Jamie Dimon. From (http://forum.prisonplanet.com/index.php?topic=215951.0).

The ending of extend-and-pretend is ushering in a new era of fear and uncertainty which is rapidly evolving into the next phase of the on-going credit crunch.

It is becoming clearer to many that the problems run much deeper than they had perceived, and more people all the time are realizing the systemic nature of the risks we are facing. Fear leads to knee-jerk reactions. In financial markets, it leads to volatility and self-fulfilling prophecies to the downside. It leads to capital flight, and then to capital controls.

Capital controls were an integral part of the Bretton Woods regime, but went out of favour in the expansionist Washington Consensus era that followed. They remain controversial.

Capital controls appear to have limited contagion and economic damage in the Asian Financial Crisis in 1997/98. In later cases of relatively isolated financial crises, notably Iceland, they have also been credited with limiting the scope of krona currency crisis.

Capital controls are rapidly returning to official favour, but the likelihood of being able to employ them to contain a crisis orders of magnitude larger in scope is very small. Under such conditions, the risk is that capital controls will amplify the fear that is the driving force for capital flight.

The spread of financial contagion - fear by another name - is increasingly evident in Europe at the moment. Interest rates are one measure of fear, representing the perceived risk of default and thus a risk premium. As this perceived risk rises, interest rates go up, but this has the effect of making the debt harder to repay, leading to a further increase in the perceived risk of default, and therefore higher interest rates yet again.

Once a country is trapped in this vicious circle, collective psychology tells us where it will lead - to default. Similarly, austerity programmes force default by making it more difficult to repay loans by forcing economic contraction. Positive feedback loops have an inexorable progression that picks up momentum as they proceed.

Perception of risk drives capital flows - away from problem states and toward safe havens. What happens is that spreads rise. Perception of high risk leads to much higher rates, whereas perception of lower risk leads to falling rates, at least in the early stages of a financial crisis. Safe haven status does not require objective measures of safety or sounds fundamentals. All one has to be is the least worst option. Money goes from where the fear is to where the fear is not, pushing some over the edge, while buying time for others. In either case, large capital flows are destabilizing, and governments will try to use capital controls to prevent them.

The situation with the erstwhile European single currency is the epicentre of financial crisis this time. It is creating multiple risk distinctions - periphery versus core within the eurozone, long term versus short term, and also an increasing disparity between the euro countries and those outside the single currency. Clearly the interest rates are rising in the countries of the European periphery, to the point where these countries are effectively being shut out of international credit markets, and the businesses, local authorities and individuals within them are experiencing knock-on drying up of liquidity.

Funds are leaving these countries and moving towards the core states, but this move reflects only risk disparity within the eurozone. Some parties remain comfortable with the euro as a concept and are content seeking the relative security of the stronger states within it. Others take a broader view and have already lost trust in the single currency. For them, an acceptable level of risk begins with holding no euro-denominated assets at all.

Interest rate spreads are broadening within the eurozone, but core country rates are also beginning to rise, albeit from a very low level. To some this appears confusing.

Spreads can continue to rise within the eurozone while rates for the whole region rise relative to other sovereigns believed to represent a lower risk. All risks are relative, and the risk-averse psychology of a decline magnifies all differences. Attempts by central authorities to fight the psychology of decline with bailouts perversely reinforce it under such circumstances, by convincing investors that there really is something to worry about. The psychology of a rally is supportive of central interventions, making them appear successful, but declines make central authorities look incompetent, no matter what they do.

Each subsequent bailout, meant to be definitive, buys less and less time before the spiral of fear continues upward again. In the case of Spain, yields began to rise again mere days after a $100 billion bailout that was not even contingent on austerity measures, as previous bailouts for other countries had been.

The growing impetus for fear-driven risk avoidance is already causing problems, not just for the countries where capital is leaving, but also for the safe-haven recipients. The US, representing the safe haven of the reserve currency, has seen substantial inflows that are causing problems for the banking system.

Europe’s financial crisis is also supporting the value of the US dollar. A knee-jerk flight to safety into the reserve currency has been underway for some time already, and shortages of dollars are now increasing demand beyond supply. This dynamic has a lot further to go as dollar denominated debt, of which there is more than any other kind in the world, begins to deflate in earnest. Dollar liquidity will be in increasingly short supply. Safe haven status can lead to negative nominal interest rates, as interest rates are a risk premium. Rather than asking for a return, spooked investors are prepared to pay for the privilege of capital preservation. They are less concerned with the return on capital than the return of capital. In Switzerland, a major safe haven recipient of capital fleeing the eurozone, negative rates already apply. In the US, short term rates are likely to stay low, but longer term rates may well be on the verge of rising.

States are seeking to prevent destabilizing capital flows. We are currently seeing the beginning of a process that has very much further to go. Switzerland responded early on with determination to peg its currency to the euro, in an attempt to prevent its currency appreciating to the point where its export markets would suffer. However, currency pegs merely present a tempting target for speculators. They may stand for a while, but if the underlying condition that gave rise to capital flows is not addressed, currency pegs can prove impossible to maintain, costing sovereign states a lot of money while making a fortune for tenacious speculators with far more ammunition than states can defend against.

What we are headed for are global currency wars, with rounds of beggar-thy-neighbour currency devaluations, ultimately leading to the end of the fiat currency regime. The every-state-for-itself mentality is a major part of the psychology of contraction. This is the attitude that is tearing at the socioeconomic fabric of not only the eurozone, but ultimately of the European Union as well.

Where national interest become paramount, and the interests of the collective are lost, the endgame has arrived for the supranational entity. Political aggregations are increasingly fissile under such circumstances. For now, it is Europe in the crosshairs, but broader global divisions are on their way.

Capital controls, on both inflows and outflows, will be far more extensive than currency wars, however. We can expect all manner of attempts to control money flows at all scales. The impact will be widely felt by people trying to protect their scarce resources by removing them from the system while that is still possible. This can be difficult, and for ordinary people without the ability to send funds abroad leads there is a need to protect it domestically. Options are limited and increasingly risky.

The crisis may now increase the social divide in Greece, just as it has done many times in recent years. While members of the upper class have long managed to stash their money in safe places, a possible currency reform and the subsequent devaluation would probably hit many low-income earners unprepared.

Safe deposit boxes are not a secure option in the event of a bank run. If the bank’s doors are shut, the likelihood of being able to access a safe deposit box is vanishingly small. The odds of the contents remaining where they were left for long enough for the owners to be reunited with their property are also rather low. Even when there is no threat of an imminent bank run, financially-strapped central authorities may be minded to help themselves to the assets of others.

Governments may also decide that the contents of safe deposit boxes may constitute evidence of criminal activity, and reserve the right to assess the property stored, making the owners prove legitimacy. In a liquidity crunch, it is quite likely they will regard there being no legitimate reason for holding cash, and private gold ownership may be declared illegal. Both cash and gold could be subject to confiscation.

Legal niceties are very likely to go by the wayside as deleveraging proceeds and the global grab for scarce cash begins in earnest. Those who posses the power to grab assets left in harm’s way are very likely to do so, then possession will be nine tenths of the law.

Moving money abroad to a safer haven is not the simple solution one might imagine either. Governments that could not stop the hemorrhage as it was happening are seeking to reverse the capital flight after the fact. Of course, such actions will only further inflame fear, while doing nothing to address the reason for capital flight. They will thus increase the impetus for capital to flee in any way that it can.

Capital flight from the periphery is currently being quietly financed by other European central banks, allowing Greeks and other depositors in the periphery to continue withdrawing funds without banks closing their doors. Instead of a bank run, we have seen what has been described by several commentators as a "bank jog".

However, the rest of the eurozone cannot continue such support indefinitely, especially as fear causes the pace of the ‘jog’ to pick up, and contagion spreads the problem to other states. When that support ends, bank insolvency will be revealed.

The kind of capital controls one should expect, and prepare for, include:

•Restrictions on bank withdrawals

•Restrictions on money market fund redemptions

•Greater restrictions on retirement fund liquidations

•Fixing an official exchange rate and criminalizing market rate transactions

•Banning the conversion of domestic currency to foreign currency

•Banning the movement of assets out of the country to foreign financial institutions

•Barriers, restrictions, additional transaction costs imposed on foreigners seeking to deposit funds or make investments in safe havens

•Forcing sovereign debt owners to accept longer maturities rather than principal repayment

•Banning gold ownership

•Reissuing the currency in a new form (an acute risk in Europe obviously)

•Restrictions on the size of cash transactions

Assets held within the grip of the system are at risk. There is a critical dependence on the solvency of middle men, on government guarantees, and on the powerful resisting the temptation to grab what they can in the financial free-for-all of deflation and deleveraging that is picking up momentum. None of these is a good bet. Whatever actions one might plan to take, it is necessary to take those actions before push comes to shove. That way they can be taken under conditions of relative calm.

There are no no-risk solutions, but different options will suit different people, depending on their circumstances. Some may choose to store assets in another jurisdiction or in another currency if those options are available, but losing control over assets abroad is a distinct possibility, as is difficulty in converting the currency chosen as a store of value back into something that will functions as cash at home.

Physical travel may become much more difficult as capital controls lead to border controls of other kinds. Holding assets close to home gives one the greatest degree of control, but with certain obvious risks attached. Typically, he who loses the least in a deflation is the winner, as there are no easy answers.

Once fear is in the ascendancy, it is very difficult to combat. Governments and central banks simply do not have the control they think they do, and they do not understand the nature of battle they are engaged in. It is not a matter of restoring certain objective conditions. Central authorities are trying to fight the inexorable recognition that the magnitude of the debt that has resulted from our 30 year credit expansion dwarfs the wealth of the world, that the $70 trillion in G10 debt underpins some $700 trillion in derivatives.

That realization, and the natural reactions stemming from it, are the problem. As confidence evaporates, so does liquidity. Credit - the vast majority of the effective money supply - ceases to be equivalent to money. The resulting crash of the effective money supply is deflation by definition. This is what we have been predicting since the inception of TAE. This is how credit expansions always end - with the implosion of credit instruments that amount to no more than a pile of human promises that cannot be kept.

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What is in the Greeks best interest?

SUBHEAD: Greece has one thing going for it - people largely still know how to take care of themselves. By Raul Ilargi Meijer on 17 June 2012 for the Automatic Earth - (http://theautomaticearth.com/Finance/what-choice-is-in-greeces-best-interest.html) Image above: Greek tragic figure of Orestes being hounded by the Furies. Painting by William-Adolphe Bouguereau, in 1862. From (http://en.wikipedia.org/wiki/File:William-Adolphe_Bouguereau_%281825-1905%29_-_The_Remorse_of_Orestes_%281862%29.jpg).

In all of the things written about Greece and the rest of southern Europe these days, and there's an avalanche of articles, there is very little mention of the fact that Greece, Spain and Portugal were - brutal and bloody - dictatorships until less than 40 years ago. After WWII, their populations were largely left to fend for themselves for decades by the richer countries of Europe - and by the US -, until they toppled their military regimes in the mid-1970s.

While the rest of Europe, as well as the US, enjoyed their probably richest time in history, Greek, Spanish and Portuguese citizens lived mostly in wretched poverty and deadly fear. Italy might as well have been a dictatorship too, it was a democracy only in name, with the iron grip on power of the mafia, the Vatican and a slew of secret societies. Ireland was pretty much a desolate backwater.

When Greece finally dumped its military regime in 1974, moreover, it went straight to the Papandreou and Karamanlis families and their PASOK and New Democracy parties, and corruption and feudalism simply continued underneath a thin veneer of ”voting rights".

When the country entered the EU in 1981, that's where it was: a more or less feudal society. But one that Germany, France and Holland figured they could sell their increasing industrial output to. That output had outgrown its established markets, and new ones were created in the former destitute dictatorships in the south. It didn't matter much, other than in name, what the domestic political situation was in these new markets. What mattered was how much production could be sold. If rich Europe felt parties like PASOK would produce better economic results, they would support them.

And after all, there were clear and present dangers in the PIIGS countries. Not only were there the IRA in Ireland, ETA in Spain and the Red Brigades in Italy, they all had, to varying degrees, strong communist movements. Which had typically formed not so much as ideological movements, but as the only force against brutal regimes from which rich Europe - and, again, the US - historically had done precious little to protect the people they now sought as the new customers for their industries.

Communists were considered evil. They are a detriment to establishing new export markets. They had ties to Russia, maybe even China.

It's sort of funny to realize that if the Greeks today elect SYRIZA, it’ll be the first time in a long, long history that they vote to move away from feudalism and dictatorships. And that move is presented to them, and to us, as the worst one possible. It's an old song: history gets turned on its head for the sake of money and profits. That's undoubtedly also why western media label the party "extreme left".

I could write a lot more on the historical issues that play into today's Greek vote, on Greece's role in WWII, which lasted way beyond 1945, with a bitter civil war and a 1967 US-supported coup, about its part in the entire deadly Balkan conundrum, the neverending fights over territory, which saw their most recent episodes in mass killings in Bosnia and Serbia, about the Ottoman and Habsburg empires, on why the countries resurrected by the Marshall plan left southern Europe to its own suffering, but for now let's focus on the present.

The EU core countries plan a huge firewall to protect Spain and Italy from losing access to bond markets in case Greece leaves the eurozone. But surely they must understand that trying to dump Greece would require that firewall to be much larger?! They might be much better off negotiating a new deal with Greece. From a strictly financial point of view, that is.

And a new deal is necessary anyway, because the Greek economy is fast deteriorating, and the country can't possibly fulfill all conditions the "old” deal demands, no matter how austere it gets. Moreover, banks deposits have plummeted through capital flight and domestic withdrawals, so all banks are -again - teetering. Spain's banks are little different.

If the ECB, the EU, and the Bundesbank would accept similar haircuts to those they themselves have forced upon private lenders, Greece would be much better off. But then, such haircuts would be demanded for Ireland, Portugal, Spain and Italy too, and that would empty ECB reserves, and then some. Hence, Greece is forced to pay back loans for which it was clear when they were given that they could never be repaid.

In the end it's really simple: the eurozone is doomed to failure, simply because the debt levels are too high. All over the place; not just in Greece, which is no more than a sideshow.

When, in the first large European recent crisis event, Ireland's banks failed 3 years and change ago, its government could - make that should - have allowed loans to its banks to default. Many of these loans were from German - and French, Dutch - banks. Instead, they were made whole, and Germany didn't have to bail its banks out. Ever since, this has been the one and only policy, with the possible exception of the Greek haircut. But it doesn't solve anything at all: debts are still way too high. They're just transferred, every step of the way, from the banks' bond- and shareholders to the public in all of Europe's streets.

If a bank has excessive debt levels, it needs to be restructured and allowed or made to default, and its creditors should incur haircuts in order of superiority. The big problems today, in Europe and globally, are that just about every bank has hugely excessive debt levels - and exposure -. This means that in case of restructuring an enormous amount of - virtual - wealth would vanish overnight. Wealth that is in the hands of those who dictate policy, and have the political power to shift their debt to state coffers.

It is a dead end policy, but that doesn't matter much to them: they just need a bit more time, so they can get as close as possible to the completion of the transfer. Then, everything can and will be allowed to fail.

In that light, perhaps a SYRIZA victory today would be the best thing that can happen, for the Greeks, but also for all other Europeans. In spite of the plans to build a €1 trillion or bigger firewall around the rest of the PIIGS, it might just force the hand of the bankers/politicians, if only because €1 trillion won't be enough to appease the markets for long, and neither would €2 trillion. €100 billion for Spain was effective for no more than a few hours.

If you just keep on throwing money at the banks, without restructuring their debt, everybody knows that they're still weak and vulnerable, and that means betting against them is potentially profitable. As I wrote earlier this week, what you get is a situation where banks which are walking dead, take the money from the bailout facilities established by national central banks as well as ECB and EU, and use that money to bet against the whole set-up, and against their peers. It's simply the potentially most profitable game in town. They know how vulnerable other banks must be because they know their own situation.

Maybe Alexis Tsipras, if he wins, can simply threaten to print euros if the ECB closes the spigot, or even to print them with an X, the symbol for German euros. Sure, perhaps that's illegal, but then, tons of legal issues are either not at all, or poorly defined, so who knows, or cares, really? One thing Tsipras will certainly do is to say (he already has) that Greece doesn't want to leave the euro, and since there is no mechanism for a country to leave, the rest will need to invent a mechanism, and it will in all likelihood need to be accepted unanimously, so bring it on!

Look, Tsipras knows the history I talked about; he knows his potential place in history, and he knows where Germany et al are vulnerable. Most of all, he knows he can't lose: if someone else wins this round, and the austerity plans are Greece's immediate future, he’ll have another shot at gold a few months from now, because there is no way it's going to work.

Because Greece is too far gone, and so are Spain and Italy, and increasingly, France is mentioned as an at-risk economy, and and and. One more time: there's too much debt, and unless it is restructured, and the banks take losses, not the public, nothing truly changes.

Greece has one thing going for it: because dictatorialism, and the abject poverty it brought along, ended so recently, people largely still know how to take care of themselves. The same goes for Spain, Italy and Portugal. Not in Milan or Barcelona, but certainly in the countryside. You won't find that in Britain or Holland or most of Germany and France. It may be the biggest blessing they could hope for. And they might be much better off entering the inevitable next phase with Tsipras than with another Papandreou or Karamanlis, or heaven forbid another military regime. They haven't exactly had a fair and square deal for the past hundred years or so.

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Hazardous Games

SUBHEAD: The world spent all its capital to stage an orgy of development and the future arrived with no money to run everything.  

By James Kunstler on 18 June 2012 for Kunstler.com - 
 (http://kunstler.com/blog/2012/06/hazardous-games.html)

Image above: Greek women and children harvesting tea in Chakva, Georgia, about to witness the First World War. From (http://www.aussiemuslims.com/forums/showthread.php?39014-Amazing-old-pictures-in-color).

The story-line behind the convulsions shaking the money centers of the world is such a hopeless labyrinth of mathematical metaphysics because abstraction unto infinity is the last refuge of those seeking to evade reality. This is why individual human beings faced with terrible choices go crazy, and it is true of societies and nations, too.

Reality is so boringly concrete. The facts just sit there implacably like dull cement bollards in a roadway, waiting for impact with objects in motion. These facts are as follows:

The world is dead broke. (By "world" I mean those places where the electricity is on more than it is off.) The world spent all of its future capital to stage an orgy of blow-out development and then the future arrived and there was no money to run everything.

To make matters worse, there are massive interest payments due on all that money misspent. Nobody has the means to pay the interest. All the activity around this fact is an Olympiad of money games that amount to musical chairs and hot potato, signifying that 1) there is not enough to go around, and 2) somebody has to end up stuck with a problem.

The orgy averred to above coincided with the last years of cheap and abundant energy supplies to run the development. That's over and done with, too, despite the strenuous efforts of wishful thinkers, cornucopian propagandists, and corporate racketeers to pretend that technological magic can make up for dwindling cheap supplies.

The net effect of all this is that advanced societies all over the planet have entered a comprehensive compressive contraction of activity and, more ominous, of technological progress. The world can't cope with contraction. For one thing, it wreaks havoc in the mechanisms of capital formation. Capital can only be formed under conditions where interest can be paid. That is, loans are only tenable when they can be paid back with interest. Hence, the current insanity in world financial markets and banks - the mad scramble to pretend that interest payments will be made on bailouts tendered to nations that cannot make interest payments.

The assumption that this craziness can go on forever without consequence is now dissolving in an international mood of frantic despair. The spotlight for the moment is on Europe because that is where the games of hot potato and musical chairs with the most players are underway. The mutual entanglements over money tendered and interest owed are so complex and abstruse that the number of moves needed to complete the games seems infinite. But trafficking with infinity is itself one of the universe's most hazardous ventures - it invariably ends in the death of the adventurer.

What's more, the trajectory to that sorry ending accelerates fastest in the last moments of the venture. Hence, expect Europe to melt down like an overheated nuclear reactor, with an aftermath of deadly political goop oozing out to make parts of the continent unable to support human life at levels we are currently familiar with, i.e. civilized society.

That is to say I'd expect a lot of internal disorder in the nations of Europe in the decade to come, before there is even a chance of anything that resembles war between nations breaking out - and by the time war does occur, it may be fought with crude swords and helmets forged out of the scavenged detritus of a bygone age.
 
Image above: The staff of the first Hooters eatery/bar in a mall in Athens, just before the Greek meltdown. One wonders what these girls are doing now. From (http://www.greeksoccer.com/forums/lofiversion/index.php?t235047308.html).
 

The current extravaganza across the Atlantic Ocean has taken the spotlight off doings here in our own colossal floundering confederation of quasi-sovereign American states. Our situation with money spent and interest due - and the resulting impairment of capital operations - only seem less dire in comparison. It's just that we are playing a different game than hot potato and musical chairs. Our game is more like the old American schoolyard game called salugi (suh-looj-gee), or "keep-away."

The "big kids" (the one percenters) like Jamie Dimon, Jon Corzine, Lloyd Blankfein, et al, have stolen the baseball mitts of the dweeby little kids (the 99 percenters) so that most of the people in this country feel that they cannot participate in the national pastime anymore. The big kids have certain advantages, obviously, but sooner or later they run the risk of being torn to pieces by the vengeful mob. Of course, that happens when the game stops being simple keep-away but seems more and more a matter of larceny -- "they stole our mitts!"

When that moment arrives anything might happen politically here in the North America, from a corn-pone Nazi takeover of central government to a complete dissolution of the republic into autonomous and even hostile regions. Similar games and outcomes are possible in China, Russia, and the nations of the Middle East. In fact, the tendency world-wide in the face of accelerating compressive contraction will be to break up large political units into smaller units. The main question is: how much heat will that process of global fission generate as we lurch into a world made by hand.

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Clarification on KIUC ruling

SUBHEAD: Can everyone else receive an opt-out? Absolutely. Will KIUC offer it freely? Probably not. By Adam Asquith on 16 June 2012 in Island Breath - (http://islandbreath.blogspot.com/2012/06/clarification-on-kiuc-ruling.html) Image above: A KIUC Smart Meter on a Matrix Pod. From (http://s294.photobucket.com/albums/mm87/Tehila_2008/?action=view&current=Matrix-pod-with-baby.jpg&newest=1).
[Island Breath Editor's Note: We emailed Adam Asquith requesting clarification of conflicting information we have received from Mark Naea, Joan Conrow, and Ray Songtree. Adam was the plaintiff in the lawsuit against KIUC's Smart Meters. The following is Adam's response:] What you are reading are conflicting opinions, not conflicting information. Joan Conrow is correct in that the settlement was only about the complaint I filed in Federal court. Mark Naea is correct in that under State law (PUC regulations) KIUC cannot offer me something that they do not offer to everyone else. Joan is incorrect in stating that the settlement is the same a deferral form. The settlement is a court document. The deferral form is venue offered by KIUC that allows you to ask them not to put a smart meter on your home at this time. The stipulation in my settlement is a forced opt-out. Rather than go to trial, KIUC agreed to not put a smart meter on my house. KIUC will not try to put a smart meter on my home under their own initiative, nor can they ask the PUC to allow them to do so. The only way I will get a smart meter is if I ask for one, or if the PUC somehow independantly instructs KIUC to put one on my house. A deferral means exactly that. The intended action is merely postponed to a future time, but still intended. What part of "defer" to people not understand? KIUC is not postponing the installation of a smart meter on my home. Rather, they have agreed in court not to put one on my home. So currently, I have been given an opt-out as agreed to in Federal court. No other customer of KIUC has this. This is against State law. Is this an "opt-in"? I don't know and it may just be word play. What it certainly is, is a tool that any other member can now use to demand the same assurance (opt-out) that was given to me. Can everyone else receive this assurance (opt-out)? Absolutely. Will KIUC offer it freely? Probably not. Is it the same as a deferral form? Not at all. How does someone else opt-out now?
Either erase my name and add yours to the documents I used and file in Federal court, or submit a formal complaint to the PUC and demand equal treatment under State law from KIUC.
Are either of these easy to do? No. Is it worth it? That depends on each person. There are unrefuted studies showing that using smart meter data, KIUC or someone else with access to the information can easily determine the most intimate details of your private life that would ordinarily be protected under the Federal and State constitutions, and could only be accessed by law enforcement with a search warrant obtained by demonstrating probably criminal activity. But some people don't value privacy........ until they do....... and then it is too late. See also: Ea O Ka Aina: KIUC Opt-In or Opt-Out Fiasco 6/16/12 .

KIUC Opt-In or Opt-Out Fiasco

SUBHEAD: Is there a free Smart Meter Opt-Out program or not? The answer is - No!

 By Ray Songtree on 17 June 2012 for Kauai Truth -  
(http://www.afterenlightenment.net/kauaitruth.htm)


Image above: Reddy Kilowatt disguised as as Hawaiian warrior Kelco (Kauai Electric Company mascot) attached to wall of KIUC Port Allen Power Generation Station at 261 Akaula Street, Eleele, Kauai. He's mashed-up with original Reddy Kilowatt, a frequent presence in electrical generation PR material until energy conservation replaced energy production as a national goal. See background (http://en.wikipedia.org/wiki/Reddy_Kilowatt).  

[IB Publisher's note: This email from Ray Songtree was added to clarify the conclusions drawn by Mark Naea in his previous post concerning Adam ASquith's federal suit with KIUC.]

Nothing has changed on Kauai except for the rights of one person, Adam Asquith, who took KIUC to Federal Court. KIUC is pretending that it can discriminate and give one person different rights than everyone else. And on top of that, this is supposed to be a coop of equal member/owners. Where is the equality? The person who recently wrote the "free / opt in" announcement, is realizing that what is logical to an honest mind like his, is not how KIUC is behaving. We have to go back to court now to insist that discrimination doesn't occur. But KIUC even hides this, and claims their "deferred installation option" is equivalent to the court stipulation which Adam obtained, and this is not true.

 The Board should be sued for misleading the public and giving wrong legal advice and entrapping people to pay a fee for opting out, when the court told them verbally they could not charge the plaintiff. Even if we win next round, KIUC will probably word things so that we have to AGAIN, third time, take them to court. You see, they have OUR money to spend playing cat and mouse with the judge, so the more lawsuits, the more time they have to install smart meters and throw away analog meters. I swear, this is their strategy. Hopefully the judge will mandate certain requirements second time around, but if we aren't careful,

KIUC will snake around those too. KIUC will break any law, and wait to be caught, without any fear... because they are using OUR money for lawyer, and there are NO PENALTIES, so why not? They are criminals and think like criminals. In ten years, KIUC Counsel David Proudfoot cannot show any progress on implementing the Coop Principles, which he calls "aspirations". It is the opposite. He has consistently worked against them, and us, to create a corporate culture of fear and secrecy at KIUC to hide back room decisions. He laughs at the word transparency. For him, transparency means someone might be caught. I can say this without being accused of slander, for he would have to prove me wrong, and he cannot. Until we sue the Board themselves, as individuals, crime at our expense will continue. Why wouldn't it? It has worked so well since "the Coop" paid too much in the buy out of Kauai Electric and made us all debt slaves.

 Consider that WE pay $1.1 million per year to lease the KIUC building. Consider that WE pay the CEO at least $304,000 per year. Consider that WE pay over 2 million dollars in legal fees each year.

 Consider that over 100 employees at KIUC make over $100,000 a year. It is like a Chicago political machine, right here on Kauai. How many times has KIUC Chairman Phil Taciban flown to Philippines at our expense to visit his charity recipients there? Does he have family or friends at the utility there, who we rich Kauaian's support? Who knows? There is no transparency. How do we explain, that when the FERC/Hydro petitioners were proven correct in their "claim jumping" accusations by FERC itself, that KIUC did not reimburse them for their accurate educational efforts?

 They are members who worked for the good of all and were correct. Why were they viewed as opponents? They were legally correct. They should be reimbursed. Meanwhile KIUC is installing health and privacy threatening Smart Meters daily, hell bent on their agenda, which I'm sure gives them kick backs. It is a mafia paradigm.
 Yes, until we sue the Board, trying to stop this crime or that, is like band aids. We are hoping to find an attorney who can see a winning strategy, and win, and gain an award from the Board's pocket in order to pay his fees, for we victims lack funds for an attorney up front. If you would like to help with a real lawsuit that stops the criminals at KIUC from using our own money against us, please make contact at StopKIUC.com and voice your concerns. Listen to the drums, the natives are restless. We need you.

---

SOURCE: Jane Ely (deerclan2@mac.com)
SUBHEAD: Kauai Island Utility Cooperative settles in Federal Court with Adam Asquith over Smart Meter installations.  

By Mark Naea on 12 June 2012 for Stop KIUC - 
  (http://stopkiuc.com/2012/06/landmark-case-settlement-on-kauai)

 
Image above: Mashup by Juan Wilson of Lucky Strike ad featuring a recommendation by 20,679 physicians attesting that Luckies are less irritating because they are "toasted" providing protection against irritation and cough.. from (http://news.wustl.edu/news/Pages/20334.aspx).

[IB Publisher's note: We have modified the title and SUBHEAD of this article to reflect a more modest conclusion than Mark makes in his article. Even of we don't have a clear Opt-In, rather than Opt-Out program on KIUC Smart Meters, this court decision may have some of the effect Mark attributes to it. We are in process of getting a clarification from Adam on an interpretation of the settlement.] 

KIUC agrees to “By Permission Only Opt-In Agreement”


The landmark Federal Court case of “ADAM ASQUITH vs. KAUAI ISLAND UTILITY COOPERATIVE” for injunctive relief ended in an out of court settlement when KIUC’s motion to dismiss was voluntarily withdrawn on April 25, 2012.

The case was settled without going to trial. This was agreed upon at the first hearing on the injunction where the judge severely admonished KIUC. KIUC agreed that they did not want it to go to trial and agreed to settle with Adam on his complaint.


The settlement agreement was presented to the court for approval and signed by both parties on May 31, 2012. The “STIPULATION FOR DISMISSAL WITH PREJUDICE; AND ORDER”, was approved and so ordered by Federal Court Judge Helen Gillmor on June 1, 2012.

The agreement reached between Adam and KIUC as stipulated in this settlement has completely changed the landscape of KIUC’s planned roll out of smart meters here on Kauai. The settlement agreed to has two (2) conditions.

“Condition 1” of this agreement states:

"KIUC agrees that it will not seek to install (including but not limited to requesting from the Hawaii Public Utilities Commission ("PUC") permission or authorization to install a smart meter on premises where the electricity accounts are in Plaintiff's name), and will not voluntarily install without court order or an order or determination of the PUC, any smart meters on premises where the electricity accounts are in Plaintiff's name without Plaintiff's permission."

“Condition 2” of this agreement states in essence:

“. . . the dismissal with prejudice in this action will not prevent Plaintiff from challenging said decision . . .” if in the future the PUC authorizes or allows KIUC to install a smart meter without Plaintiff’s permission.

The complete settlement document in PDF format can be found here:
http://www.stopkiuc.com/wp-content/themes/atahualpa_1/pdf/kiuc_asquith.pdf

Settlement Changes Smart Meter Program to Opt-In ONLY!
The legal ramifications of “Condition 1” go far beyond this just being an "opt-out program", as some see it. By legal definition, making such an agreement with one (1) member of the Cooperative, KIUC is required by state law and PUC regulations to have this settlement apply to all Cooperative members.
Under “General Order No. 7” of the Hawaii PUC “Standards for Electric Utility Service in the State of Hawaii”, section 1.2 “Application of Rules”, item “f” states:

f. Each electric utility may of its own accord establish uniform non-discriminatory rules more favorable to its customers than the rules herein established.

KIUC of its own accord established such a “rule” by signing and agreeing to the above settlement and its conditions. This new rule must be applicable as a “uniform non-discriminatory rule” to all cooperative members.

Adam Asquith states,

KIUC admitted that they cannot offer me a special deal and these new conditions must be offered to all members under their PUC regulations.

To clarify “Condition 1”, and establish this new KIUC rule as required by state law, the term “Plaintiff” now becomes “Co-op Member” as below:

“Condition 1” of this agreement creates this new rule:
"KIUC agrees that it will not seek to install (including but not limited to requesting from the Hawaii Public Utilities Commission ("PUC") permission or authorization to install a smart meter on premises where the electricity accounts are in Co-op Member's name), and will not voluntarily install without court order or an order or determination of the PUC, any smart meters on premises where the electricity accounts are in Co-op Member's name without Co-op Member's permission."

This new rule changes everything and has the following legal guidelines that KIUC has agreed to follow and implement:

1. KIUC must have Co-op Member's permission before installation of any smart meter on premises where the electricity accounts are in Co-op Member's name.

2. KIUC will not request permission or authorization to install any smart meters from the PUC where the electricity accounts are in Co-op Member's name.

3. KIUC must have a court order or an order or determination of the PUC to install any smart meters without permission of Co-op Member.

The continued rollout of smart meters on Kauai by KIUC is in direct violation of PUC regulations and state law, as well as undermining the Federal court approved settlement with Adam Asquith.

KIUC is now required by their lawful and signed settlement with Adam to seek permission first before installation of any smart meter. KIUC is prohibited from installing any smart meters without consent of the account holder.

It’s an Opt-In Rule!!!

What we now have is an Opt-In rule, written and agreed to by KIUC, and enforced by PUC regulations and state law.

KIUC Breaks State Law, Deceives Public and PUC by Omission
All installations of smart meters on and after June 1, 2012, have been done illegally by KIUC, its contractors and interested parties.

It is imperative that KIUC stop all involuntary smart meter installations on Kauai and not expose the Cooperative to multiple lawsuits.

I now call on all of our duly elected officials and the PUC to enforce the laws that KIUC has agreed to in Federal court, and by definition, PUC regulations as they apply in this case.

I call on the Ohana of Kauai to make it known to KIUC to stop wasting our hard earned money and stop the smart meter rollout.

And lastly, I call on KIUC to show us its integrity, follow the law, and make good on its commitment to us all.

See also:
Ea O Ka Aina: Clarification on KIUC Ruling 6/17/12 .

Shell Game

SUBHEAD: Fake "Let's Go!" campaign parodies Shell's cynical PR effort supporting Arctic drilling exploration.

 By Brian Merchant on 15 June 2012 for TreeHugger -  
(http://www.treehugger.com/environmental-policy/shells-lets-go-arctic-drilling-ads-are-fake-and-hilarious.html)

   
 Image above: Illustration of a polar bear in captivity - Shell's contribution to the environment. See text below for ad content From (http://arcticready.com/arctic).

HARD CHOICES - WE'RE MAKING THEM. LET'S GO. In the high stakes hunt for natural resources we are bringing humanity closer than ever to nature's most vulnerable inhabitants. But the high stakes also bring high risk. At Shell, we're balancing our need to power our way of life with our responsibility to the planet, working harder than ever to minimize the damage when disaster strikes, so even if we lose some of our friends up north we don't lose them all. Thinking ahead makes all the difference.

Last week, we wrote about the rather amazing prank pulled by the Yes Men: they faked the malfunction of a booze-spewing oil rig replica at a faked Shell Arctic drilling launch party, and the internets went wild. So, first, read about the multi-layered stunt—they also released a fake press release from Shell threatening legal action—and the following will make more sense.
It's a faux ad campaign for Shell's Arctic drilling operations called 'Let's Go!' that the company was supposedly unveiling at the launch party before disaster struck.

So, on an official-looking website, Arctic Ready, the Yes Men and friends have put together a series of images and materials that pretty hilariously lampoon the oil giant's push to drill in the icy, dangerous northern reaches of the nation.

 
Image above: Illustration of results of ocean ising - Shell's contribution to the environment. See text below for ad content From (http://arcticready.com/arctic). Click to enlarge.

WE'RE CONQUERING THE ARCTIC TO FUEL A BRIGHTER TOMORROW. LET'S GO. Climate change means many things to many people. In our role as a world-leading energy producer we choose to look at change through a positive lens. As the Arctic north melts away, opportunity heats up. Shell is exploring how to welcome the warm embrace of change, turning crisis into solutions to power humanity into the future.

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Climate change and Pesitides

SUBHEAD: Global warming and pesticide immune rootworms conspire to ruin Monsant GMO corn.  
By Jack Kaskey on 15 June 2012 for Bloomberg News - 
(http://www.bloomberg.com/news/2012-06-15/monsanto-corn-injured-by-early-rootworm-feeding-in-illinois.html)

 
Image above: Monsanto GMO corn root pruning by worms immune to Bt pesticide. From (http://farmweeknow.com/story.aspx/corn-rootworm-damage-seen-western-il-0-60548).
 
Monsanto GMO corn has been overwhelmed in parts of Illinois by rootworms that hatched a month early, renewing concern that the bugs are becoming immune to the insecticide engineered into the crop.

An “amazing” number of rootworms have emerged as adult beetles, the earliest start in at least 30 years, Michael Gray, an entomologist at the University of Illinois at Urbana, said today in an online journal. The insects “severely pruned” the roots of corn observed June 7 at a farm in Cass County, about 200 miles (322 kilometers) southwest of Chicago.

The western corn rootworm is one of the most destructive pests and historically cost U.S. farmers about $1 billion a year in damages and chemical pesticides before crops with built-in insecticide were developed. Corn fields in four states were overrun with the bugs last year, incidents that the Environmental Protection Agency suspects is a sign of increasing resistance to the insecticide.

The damaged fields in Illinois have been planted with corn continuously for at least 10 years, including six consecutive years with corn engineered to produce the Cry3Bb1 protein from Bacillus thuringiensis, or Bt, a natural insecticide, Gray said.

“Under these conditions, the selection pressure for resistance development is markedly increased,” he said.

The damaged plants probably will fall over, a phenomenon known as lodging, as the insects continue to dine on the roots and the plants gain height, Gray said. The rootworm begins life as a root-chewing grub before developing into an adult beetle.

Monsanto evaluated fields on the Cass County farm and will collect bugs for study next week, said Danielle Stuart, a spokeswoman for the St. Louis-based company.

“This is a unique situation and there were surrounding fields that had little to no damage, so we also want to better understand why we see some fields more heavily infested than others,” she said an e-mail.

Growing Resistance
The Cry3Bb1 protein is engineered into Monsanto crops and SmartStax corn, which contains a second Bt protein from Dow Agroscience and DuPont/Pioneer. Monsanto, the world’s largest seed company, introduced its rootworm-killing corn technology in 2003. Less than 0.2 percent of the 37 million acres planted with the trait last year experienced unexpected rootworm damage, the company has said.

An Iowa State University study published last July was the first to confirm that some rootworms have evolved resistance to Monsanto’s Bt corn. A study to determine whether rootworms that damaged Illinois fields last year are resistant to the modified crop should be completed in August, Gray said.

Early Rootworms
Farmers should begin scouting for high rootworm populations earlier than usual in case insecticides need to be applied, Monsanto said.

“The combination of a mild winter, early spring planting, and the hot, dry conditions has created the potential for heavy insect pressure in corn fields this season,” Stuart said.

Monsanto’s worst resistance problem is with crops engineered to tolerate its Roundup herbicide. Weeds that Roundup no longer kills have invaded as many as 20 million acres (8.1 million hectares) of corn and soybeans, according to a Dow study.

As many as 28 million acres of cotton, soybean and corn may host Roundup-resistant weeds by 2015, according to Syngenta.

See also:
Ea O Ka Aina: Widespread failure of GMO pesticides 12/2/11
Ea O Ka Aine:Monsanto GMO Bt Corn Failing 9/2/11  

.

Jeju & Hawaii under arms

SUBHEAD: Gangjeong villagers just learned their farmland is being seized to house 600 US military who will outnumber them.  

By Koohan Paik on 14 June 2012 for Island Breath - 
  (http://islandbreath.blogspot.com/2012/06/jeju-hawaii-under-arms.html)

   
Image above: A mini food garden on a houselot on Gangjeong Village, Jeju, South Korea. From (http://www.youtube.com/watch?v=tAWdhTXNUm8).
 

The philosopher and food critic, Epicurus, once said that the city of Siracusa, in Sicily, had the best food in all the world. But Epicurus had not visited Gangjeong Village, on Jeju Island, Korea. 

Surprisingly, Gangjeong and Siracusa have much in common. They share the latitude of 37 degrees, a Mediterranean climate, and rich volcanic soil. As a result, the fruits and vegetables that grow in these places burst with flavors unknown in more northerly climes. Both Jeju and Sicily are surrounded by waters abundant with a diversity of marine flora and fauna. And both have been home to dedicated farmers perfecting cultivar propagation and livestock breeding techniques since prehistory. 

Interesting side fact: Many stocky dark ponies grazing on the rolling hills are actually descendents of horses brought by Genghis Khan. Jeju was where the Mongolians trained their steeds. I mean, how ancient can you get?

 

In Gangjeong gardens, you find a hodge-podge of fruit trees crammed into veritable food "jungles": peach trees, pomegranate bushes, fig trees, grapefruit trees, with grape vines tangled throughout. It is still early in the season, so nothing is ripe yet. The Concord grapes are still hard green marbles and the peaches look like green pussy willows. Give them three months, and it’ll all be going off. As for vegetables, it seems that every home has dedicated some patch of earth to growing a variety of greens, peppers, sesame, corn, and, of course, garlic, an essential kimchi ingredient that is also central to shamanist Korea’s millennia-old creation myth.

Much of the charm of Gangjeong lies in its human scale and utter lack of straight lines. The sides of houses cant slightly in random directions, always topped by a gaily painted, curved Asian roof, often of corrugated tin. Paths and roads follow the sway of the terrain. Rock walls enclose fields just large enough for a small family to farm without getting overwhelmed. 

A walk through the village connects you with the poetry of daily life here: a year’s supply of garlic spread out on the front porch to dry; a wife and husband busily scooping out the soft; flavorful innards from a gunny sack load of sea urchins; the sweet-jam smells wafting from a multitude of strawberry hothouses; the startled flutter of a striking Chinese ringnecked pheasant who, with his dull-colored wife, make their home in a fallow, grassy field that I pass everyday on my way to the activist shiktang, or dining area.

Yesterday I ate my first hallabong. Oh My Frickin God, that thing was delicious. It’s a jumbo tangerine with a flavor that is positively incandescent, there are no seeds, the fruit is super juicy, yet the peels and sections separate cleanly. There’s a little nodule on top like a tangelo, which is why they call it hallabong. The nodule is supposed to represent Mt. Halla, the sacred dormant volcano that gave birth to this island. Anyway, I later learned they sell for $8-10 apiece. 

The hallabong was given to me as a gift, after having been interviewed for a live-stream internet program. It was conducted by a film director whose name I know only as Mr. Yul. He was keen to hear my thoughts on a recent, much talked-about quote by Park Geun-hye, a current presidential candidate and daughter of former dictator and assassination victim, Park Chung-Hee. Ms. Park has extolled the controversial Navy base that will be built here in Gangjeong, because it will turn Jeju into another Hawaii, she says. Now, some people in Jeju are thrilled. 

Former skeptics have become new supporters of the Aegis missile base. After all, who doesn’t want to be Hawaii, right? Paradise!

The internet interview was conducted on the top floor of the mayor’s office, that has more the feel of a clubhouse or community center than a bureaucrat’s office. Another floor is used to house young people who have traveled to Gangjeong to support the resistance movement. Currently there are three teenaged boys from an alternative school called “Gandhi School” bunking up here with an American college student studying in Seoul and making a documentary about the struggle.

Recently, Kyle Kajihiro of Honolulu wrote an incisive response to Ms. Park’s ignorant statement, setting her straight. Because I have lived in Hawaii for some two decades, the activists here asked me to elaborate on what Kyle said for their internet program. 

With the windows letting in the perfect breezes of early summer, we began the interview. Yak-geul, a young musician and cetacean devotee, translated. 

I addressed the video camera. Most people know very little about the real story of Hawaii, such as the illegal military occupation, or how the continual release of carcinogens and radioactive waste into the water and land has made much of the islands uninhabitable, or that Pearl Harbor can support no life. Or that much of Kauai was sprayed with Agent Orange. Or that the Big Island is riddled with depleted uranium.

I explained that the islands were once sustainable, just as Gangjeong is. I explained how native farmers were kicked off their land in Hawaii to make way for a new way of life, a new way of making money, just like what is now happening in Gangjeong. I explained that the bases in Hawaii have irreversibly contaminated resources, and that the contamination continues to flow, as long as the base functions. I explained that Hawaii isn’t Paradise, and they should not want to follow in its footsteps.

I explained that if there were some sort of fuel crisis so that the Matson boat stopped coming to Hawaii, there would be no food after only three days. Hawaii has become supermarket-dependent. I contrasted that to Jeju Island: what if the supply boat stopped coming to Jeju? 

Of course, people in Jeju would survive on the island’s vast resources if food were to stop arriving at the port tomorrow. Especially in Gangjeong, which is known as having the most fertile soil on Jeju, if not in all of Korea. In fact, Gangjeong village is a model of sustainability for the world. Ironically, everyday-life in Gangjeong is the sort of unattainable ideal that government officials in Hawaii set as a goal by 2050 (a year suitably distant in the future so as not to interfere with any political aspirations).

I explain that it is Hawaii that should be like Gangjeong, not the other way around. 

Afterward, many people told me they were shocked to hear that Hawaii was contaminated. And they were worried, too. The Navy has already blasted the coastline and contaminated both the freshwater springs and marine ecosystems with silt. After hearing the real story of Hawaii, they are starting to see that this is only the beginning. Once the base starts operating, the trichloroethylene, the PCBs, the radioactive waste, and all the other chemicals and solvents will flow into their once pristine sea and groundwater. 

They also just learned that more village and farmland is being seized to build housing for 600 military personnel and their families, who will outnumber the Gangjeong villagers. They are starting to extrapolate that night clubs, video parlors and shopping malls will go up to service these newcomers. Big box stores will replace the quirky village lanes. Parking lots will replace farms. 

Prostitution will replace Jeju's storied women free divers. The Chinese ring-necked pheasants in the grassy field will perish. 

But the villagers and activists are ready for the long haul. They say they expect to fight this base for at least five years, maybe ten, maybe more. They are already organizing a petition against construction of the military housing. A team of young people have just about completed their training in SCUBA, a course they have been taking in order to mobilize aquatically to block four-story caissons from being dropped on the reef. Gradually, more and more activists from the outside world are joining them to help preserve not only one of the planet’s most precious spots of sustainability, but also a trigger point for large-scale war.

After the interview, I was hanging out at the Peace Center with some young activists, most of whom come from Seoul. A sun-creased farmer pulled his lorry up to the activists’ Peace Center and trotted in proudly with a crate brimming with bulbous, brightly colored tomatoes. He bowed graciously as we “ooh-ed” and “ah-ed” at his generous gift. This is a community that truly supports one another. The once-suspicious villagers now appreciate the solidarity they've found in the Seoul city slickers who've committed themselves to the resistance movement.

By the way, I had one of those tomatoes for breakfast. Spectacular. Epicurus would approve. 

Video above: "Kauai & Jeju"and the "pacific Pivot". A talk by Koohan Paik on 21 February 2012 at rhe Kauai Public Library on the effects of the Aegis Missile Program on these two islands. From (http://youtu.be/IJMTuaZF1QU).

And, if you're interested, here are some "video postcards," only a few seconds each:

http://www.youtube.com/watch?v=0qleSjyeV1U http://www.youtube.com/watch?v=iBvYf_RSpsE http://www.youtube.com/watch?v=7fCVgWmAhq8 http://www.youtube.com/watch?v=gUjFrRYoqsA http://www.youtube.com/watch?v=tAWdhTXNUm8

See also:  

Ea O Ka Aina: First Day on Jeju Island 6/10/12

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Starting an urban farm

SUBHEAD: In Youngstown, Ohio, the 73,000 or so inhabitants live among 22,000 vacant lots and buildings. By Sara LASkow on 8 June 2012 for Good Education - (http://m.good.is/post/how-to-start-an-urban-farm-in-a-post-industrial-city) Image above: parkview Garden, on the site of torn down rowhouses in Youngstown, Ohio. Courtesy of Youngstown Neighborhood Development Corp. From (http://bettercities.net/images/13851/community-garden).

Youngstown, Ohio, has a lot of vacant land. In its manufacturing heyday, its population topped 170,000. Now less than half that number live in the city. The 73,000 or so inhabitants live among 22,000 vacant lots and buildings.

But rather than sit around and watch the grass grow in vacant lots, the citizens and leaders of Youngstown have decided to take control of what grows there. By 2010, the city had put together a plan that envisioned a future as a smaller city, but also a greener one. That foresight is paying off. The city’s website lists its recent accolades—fourth best city for raising a family, one of 20 cities recovering most strongly from the Great Recession, most affordable major housing market. And instead of growing grass in vacant lots, a bevy of community groups are growing vegetables and fruits, alongside chicken coops and fish ponds, as Global Green documents in a new report.

Part of the city’s plan has been to support urban agriculture by leasing or selling land parcels for as little as a dollar and by handing out wrenches to allow farmers access to water from fire hydrants when their rainwater collection systems run dry.

Global Green took a look at what makes the urban farms in Youngstown—and elsewhere around the country—work. While the city has its fair share of urban farms, there's room for plenty more. And based on its examination of urban farms in Youngstown and beyond, the organization whipped up a plan for the ideal way to start a new one in the Ohio city's downtown.

First, find 3 to 10 mostly contiguous acres. In Youngstown, the group found 31 vacant lots that comprised 5.5 acres, all in the Oak Hill neighborhood. They weren’t all contiguous, but they were in “several clusters of significant size.”

Next, Global Green considered the most economically efficient and profitable model for a 5.5 acre farm. The farm would need some initial investment, in resources like a truck, along with seeds and plants. Of three scenarios considered, the most profitable was one that allowed for an extended growing season.

One acre was given over to hoop houses, in which to grow tomatoes. The rest were divided among winter squash, onions, eggplant, red peppers, and spinach. Operating costs for this hypothetical farm would top $150,000, but at the end of the year, it would see a profit of $10,000—a good take for a small farm that will also provide the equivalent of three full-time jobs to the community.

There's still work to be done—soil to be tested, gear to buy—but Global Green thinks a farm like this one could become a reality, soon.

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Parting of the Ways

SUBHEAD: The New Age equivalent of denial is a little more subtle than the Republicans outlawing climate warming science.  

By John Michael Greer on 13 June 2012 for the Archdruid Report - (http://thearchdruidreport.blogspot.com/2012/06/parting-of-ways.html)

 
Image above: "Progress is Our Most Important Product" was the motto of GE delivered by spokesman Ronald Reagan when these electronic vacuum tubes powered everything from radios, to TVs, to computers. From (http://www.flickr.com/photos/d76/3468700343/).
 

Chalk it up to an adolescence spent reading such cheerful books as The Limits to Growth and The Coming Dark Age, but it takes quite a bit to make me fret about the future. Even now, as industrial civilization begins to sink down the far side of Hubbert’s curve, and facts and figures come rolling in on a daily basis to sketch the predicament of our time in ever more detail, I usually find it easy to nod and make a note and go on with the work at hand, whether that’s bringing in greens and snow peas from the garden or hammering out this week’s Archdruid Report post.

Still, a series of news items over the last week or so have me worried. No, it’s not the latest news about methane plumes in the Arctic Ocean; it’s not the current round of economic idiocy from Europe, where the bizarre conviction that banks ought to be sheltered from the consequences of even their most clueless investment decisions has become the centerpiece of an economic nonpolicy that will likely tip the entire EU into mass bankruptcy; it’s not the death struggle between two failed ideologies that’s frozen Washington DC into utter political paralysis at a time when avoiding hard questions any longer may well put the survival of the nation at risk.

No, quite the contrary: it’s the rising chorus of voices, from all across the political and cultural spectrum, insisting that everything really is all right and that any suggestion to the contrary ought to be shouted down as quickly as possible.

That’s been one of the less useful habits of large parts of the American right for some time now. Still, the habit of detachment from reality reached new lows this month, as North Carolina’s senate passed legislation forbidding the state from considering scientific evidence for rising sea levels in any policy dealing with the state’s low and vulnerable coastline. Texas and Virginia have already taken similar steps; it’s reminiscent of King Canute, who famously commanded the tide to retreat and just as famously got his royal feet good and wet.

Since all three of these states are in the hurricane belt, and rising sea levels add mightily to the destructive impact of hurricane storm surges, it’s unlikely that this attempt to better Canute’s score will end so harmlessly.

Over on the other side of the spectrum, mind you, there’s no shortage of equivalent ideas. My fellow peak oil blogger Jan Lundberg, an activist well over on the leftward side of things, recently posted a thoughtful critique of the ideas on display at a San Francisco alternative culture expo. In there with the alternative healers and pop mysticism was a pervasive and contemptuous rejection of the idea that there might be limits to material abundance.

That habit’s been popular in the New Age scene for decades—Rhonda Byrne’s meretricious The Secret, with its insistence that focusing on your sense of personal entitlement will browbeat the universe into giving you all the goodies you want, has a long pedigree—but as Lundberg pointed out, it’s become tangled up with frankly paranoid conspiracy theories and frankly delusional notions about the human mind’s alleged ability to repeal the laws of thermodynamics. Lundberg suggests that what’s emerging here is a New Age equivalent to the Tea Party, and he’s quite correct: there’s really not much to choose between "visualize, baby, visualize" and "drill, baby, drill."

I had a personal run-in with the same sort of thinking not long ago, in the course of finding a publisher for After Oil, the anthology of peak oil science fiction to which this blog’s readers contributed so many excellent stories late last year. (Yes, it’s going to press; I hope to have a tentative release date shortly.) One potential publisher, who had been enthusiastic about the project early on, rejected it with some heat once he read the manuscript.

He didn’t object to the literary quality of the stories; no, what upset him was the fact that the stories assumed that people in a post-peak oil world would be more or less like people today, living in a world no more loaded with miracles than the one we now inhabit. Why, he asked, couldn’t the authors have written stories in which the problem of peak oil was solved by people sprouting psychic antennae, or creating new forms of kinship with water molecules, or at the very least powering the world on algae fuel?

Now of course there is an answer to that question, which is that the point of the anthology was to tell stories about the kind of futures we’re going to get, rather than chasing pretty daydreams that start by pretending that the realities of our predicament don’t apply to us. In the real world, my readers will have noticed, there’s a distinct shortage of people who grow antennae, psychic or otherwise; while cultivating a sense of kinship with water molecules seems reasonable enough to me—the human body is mostly water, after all—it’s not going to make water behave any differently than it does today; and there are solid thermodynamic reasons, discussed here and elsewhere, why algal biodiesel will never be more than a laboratory curiosity on the one hand, and a lure for unwary investors on the other. Still, it became clear very quickly that this answer was not the sort of thing the publisher wanted to hear.

It’s something a great many people don’t want to hear these days, and the refusal to hear it is getting distinctly shrill in some quarters—consider the angry tone of the latest press releases from the financial sphere insisting that peak oil is nonsense—after all, it ought to be obvious to any reasonable person that waving around enough money will brush aside the laws of physics and geology, right?

Not too long ago, that insistence used to be expressed in tones of insufferable superiority—think of Daniel Yergin’s dismissals of peak oil, or the airy optimism of Bjorn Lomborg’s The Skeptical Environmentalist. Now of course Lomborg insisted that the price of oil would remain at $20 to $30 a barrel through 2020, and Yergin in 2004 claimed that the price of oil had reached a permanent plateau at $38 a barrel; the failure of oil prices to do as they were told doubtless contributed to the more strident tone such proclamations so often get these days.

Still, it’s not the shrill tone of the latest round that has me watching with more than the usual concern. It’s the increasing sense that not even the people who are promoting such claims actually believe them any more. The North Carolina legislators who are trying to pretend that sea level rise won’t happen, like their equivalents in Texas and Virginia, remind me of nothing so much as six-year-olds who stuff their fingers in their ears, scrunch their eyes shut, and chant "I can’t hear you, la la la" at the top of their lungs.

The New Age equivalent is a little more subtle, but after half a century of failed predictions of saucer landings and leaps of consciousness—and let’s not even talk about what happened to the millions of Americans who tried to use The Secret to make boatloads of money for nothing by investing in the late real estate bubble—there can’t be many people left in the scene who don’t know, on some level, that they’re kidding themselves. For that matter, if the publisher who turned down After Oil suddenly sprouted a pair of antennae, it’s probably a safe bet that, instead of embracing the event as a welcome miracle, he’d call a dermatologist in a fair state of panic.

If that’s the case—if the incantations being repeated these days to justify doing nothing significant about the crisis of our age are no longer even plausible to most of the people who mouth them—we are a good deal closer to a critical juncture in the downward slide than I thought. Visible ahead of us is a parting of the ways that will define a great deal of what we will experience in the years to come.

To understand that parting of the ways, it’s important to get a good clear sense of how self-deception works.

I suspect most of my readers have had the experience of arguing themselves into believing, at least for a short time, something that they knew was not true. It’s a fascinating study in the corruption of the intellect. To start with, much more often than not, questions of the truth of the belief in question are ignored or actively evaded; what matters is that accepting the false belief will bring practical benefits, or please another person, or identify the believer with an admirable person or group.

As the false belief is affirmed in public and expressed in action, though, the critical space required to accept the belief publicly without believing it inwardly trickles away.

The cognitive dissonance that comes from affirming and enacting a belief without believing it is hard to bear, and the more the belief is affirmed and enacted, the more painful the dissonance becomes. One way out of the dissonance is to abandon the false belief, but social pressures often make that a costly and embarrassing step; the other option, to make yourself believe that the false belief is true, routinely comes with equally substantial social rewards. It’s not surprising that a significant number of people make that latter choice.

Once it’s made, though, the pathologies of repressed disbelief unfold in predictable ways. The believer becomes brittle and defensive about the false belief, affirming it loudly and publicly, and taking on the familiar social role of the strident true believer. Elaborate arguments for the truth of the false belief take on an ever larger role in his mental life; if books of such arguments exist, you can count on finding them on his bookshelves, while his willingness to encounter differing views—not even opposing ones, but simply those that are not identical to the cherished false belief—drops like a rock.

Convincing the rest of the world of the truth of the false belief becomes a central concern, since every new convert to the false belief helps shore up the believer’s self-imposed conviction that the false belief really is true. Onto those who refuse to be converted, meanwhile, the believer projects not only his own unspoken doubts, but the bad faith and hypocrisy that surrounds those doubts. Thus, in the mind of the believer, the unbeliever gets turned into a caricature of everything the believer can’t stand in himself, and serves by turns as a straw man, a scapegoat, and the supposed cause of everything evil in the world.

How this trajectory ends is determined by the nature of the false belief itself, or more precisely by the relation between the false belief and the world of objective fact. If the belief does not require the world to behave in a way that it manifestly doesn’t, it’s entirely possible for believers to spend the rest of their lives loudly proclaiming the truth of a belief they know is false, and hating those people who reject the belief for openly speaking the truth the believers are unwilling to utter, without going further into oughtright psychopathology. It’s when the false belief makes specific, falsifiable claims about the way the world works that problems crop up; the more central these claims are to the belief system, and the more obviously and repeatedly the claims are falsified, the more difficult those problems become.

The most productive way to cope with those problems is to abandon the false belief, and of course a good many people do that after a sufficiently forceful disconfirmation. Much less productive is the option of doubling down on the belief system, insisting on its truth in the face of any amount of evidence, and following it out to its logical conclusions no matter how horrific those happen to be.

That’s how mass suicides happen: back yourself into the blind alley of unconditional commitment to a belief you know to be false, and reject even the slightest doubt about the belief as a failure that’s unthinkable precisely because you’re constantly thinking it, and the temptation to prove your loyalty to the false belief in the one ultimately unanswerable way can be very hard to resist.

Most of my readers will be able to call examples of this trajectory easily to mind, and a fair number will have experienced at least a small part of it themselves. I’ve come to think, though, that in the years immediately ahead of us, it’s going to be almost impossible to miss. Plenty of belief systems will have to deal with repeated disconfirmation, but the one that’s likely to get hit the hardest, and may well produce the biggest crop of pathological behavior, is the established religion of the modern industrial world, the belief in the inevitability and goodness of progress.

I’d like to suggest that it’s precisely the failure of the modern faith in progress that’s driving the rush to illusion discussed earlier in this post. Belief in progress has no place for the awkward reality that the wastes we’re pumping into the atmosphere are putting pressure on an already unstable global climate, sending meltwater flooding into the oceans and raising sea level; after all, according to the believers, progress is supposed to solve problems, not cause them.

 Belief in progress has no place for the hard fact that economic abundance can’t simply be wished into being, but depends on ample supplies of the cheap, concentrated energy that, in this corner of the universe, can only be had in sufficient quantities from the fossil fuels we’re depleting so rapidly. Belief in progress has no place at all, finally, for the unwelcome but necessary recognition that we won’t get far by sitting on our backsides and waiting for psychic antennae or some other miracle to save us from the consequences of our own mistakes.

Precisely because it has no place for these things, in turn, the faith in progress is taking quite a beating these days. As the United States quietly folds up its space program, hands over its infrastructure to malign neglect, allows measures of public health to drop toward Third World levels, and lets what’s left of its economy devolves into a dishonest casino game, the mere fact that a narrowing circle of well-off individuals can buy electronic toys slightly more complex than last year’s equivalents just doesn’t have the cachet it once did.

Even the mainstream media has had a harder time clinging to the mythic power of progress than it once did; it’s symptomatic that the Wall Street Journal’s MarketWatch—reread that, and let it sink in for a moment—recently hosted an essay pointing out that the idea of infinite growth is a delusion, and that economics has become a pseudoscience incapable of providing meaningful information about the future. ("What do you call an economist who makes a prediction? Wrong.")

The question is how people will react to the increasing disconfirmation of the myth of progress. Some, I am relieved to say, have bitten the bullet, accepted the fact that progress was a temporary condition made possible by extravagant and unsustainable exploitation of the Earth’s fossil fuel reserves, and begun to grapple with the challenges and possibilities of a future where progress no longer takes place and contraction and regression are the rule.

More will likely do so as we proceed—many more, in all probability, than I thought possible when I launched this blog six years ago. Still, I doubt the refusal to give up on the failed myth will be limited to North Carolina politicians, San Francisco New Age aficionados, and avant-garde publishers
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I suspect, rather, that the refusal to recognize and deal with the end of progress will become a massive social force in the decade or so ahead of us, and that the great divide in American society during those years will not be the one between left and right, or between rich and poor, but between those who have accepted history’s verdict on our fantasy of perpetual progress, on the one hand, and those who cling to the fantasy despite all disconfirmations, on the other.

Since refusing to recognize the fact of decline is a good way to get clobbered over the head by one or another of that fact’s manifestations—a point that the inhabitants of coastal North Carolina are likely to find out the hard way one of these days—those who choose the path of denial may be in for a very rough road indeed.

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