Granny Caps Cops

By Ilana Mercer
November 24, 2006

It goes without saying that the late Kathryn Johnston, a heroic 92-year-old pistol-packing Atlanta resident, had every right and reason to open fire on the goons who were in the process of breaking down her front door. But they were the law, so they shot her dead.

Armed to the teeth, wearing bulletproof riot vests, and carrying riot shields, these big, “brave” men killed a very old lady in her own home. She was armed with a “rusty old revolver,” meant to repel the neighborhood rapists and drug dealers.

The goons have backup. Although neighbors say Miss Johnston lived alone, the Assistant Chief of the Atlanta Police Department and the County district attorney are claiming their “undercover officers bought illegal drugs from a man at the house in the afternoon and … the officers returned in the evening to execute a ‘no knock’ warrant, which is used in cases where officers believe that a suspect may have time to hide evidence or escape if given time to answer the door.”

According to FMNN columnist, Radley Balko a ‘no-knock’ raid occurs when police forcibly enter a private residence without first knocking and announcing that they’re the police.

These raids are often launched on tips from notoriously unreliable confidential informants. Rubber-stamp judges, dicey informants, and aggressive policing have thus given rise to the countless examples of ‘wrong door’ raids we read about in the news. In fact, there’s a disturbingly long list of completely innocent people who’ve been killed in ‘wrong door’ raids.

No-knock raids are typically carried out by masked, heavily armed SWAT teams using paramilitary tactics more appropriate for the battlefield than the living room. No-knock raids have been justified on the flimsiest of reasons, including that the suspect was a licensed, registered gun owner (NRA, take note!).

The protocol followed nowadays, pursuant to a succession of lousy court decisions, is for the police to announce themselves, wait a couple of seconds, and then force the door. Imagine how scared and confused a 92-year-old woman would have been. She probably knew nothing about the “no-knock” abomination and failed to spot the “comforting” sight of the marked patrol car in front of the home she thought was her castle, but was in fact the government’s.

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Investment Alert: Arms Sales Bonanza

War, instability, and high oil prices have created a perfect storm of profit for the world's weapons manufacturers. This year, military analysts predict the biggest arms bonanza since 1993 … which is saying something because in the aftermath of the first Gulf War the global industry reaped the benefits of a $42 billion arms race.

As the world's largest producer and exporter, the United States is riding the wave. For fiscal year 2006, which ended on September 31, the U.S. Defense Security Cooperation Agency churned out notices for $21 billion in arms sales offers . In most cases, that agency is required to notify Congress of all potential major arms deals worth more than $14 million. In one typical day—September 28—the DSCA issued notification on $5.5 billion in agreements. South Korea would get $1.5 billion in Patriot missile equipment and other hardware, Turkey was offered a $2.9 billion package including 30 F-16 fighter planes, while Jordan and Chile were also offered weapons packages.

While not all deals are finalized with arms deliveries, these notifications are a way of taking the pulse of the weapons market … and it is racing. U.S. a rms sales offers for 2006 appear to be roughly twice the levels of any other year during the Bush administration. Noteworthy among these are the $5 billion deal for F-16s to Pakistan and a $5.8 billion agreement to completely re-equip Saudi Arabia's internal security force.

The Perfect Storm
In the case of Pakistan and other allies in the war on terrorism, sales are booming as sanctions and embargoes imposed because of human rights concerns or nuclear proliferation are being lifted. For Saudi Arabia and other oil-rich nations, the price at the pump (which topped $3 a gallon this summer) freed up cash for weapons. Finally, war in Iraq, Afghanistan, and in corners of the globe where the war on terrorism is being waged more quietly, allows foreign militaries to see some of the most advanced weapons systems in action. As one U.S. government source told The Times of London in August: “Conflicts act like a customer demonstration show and we tend to see an upsurge in sales because other countries [are] … impressed by what is available.”

This storm equals rainbows and pots of gold for the defense industry. For example, Lockheed Martin, the world's largest weapons manufacturer, stands to reap more than $11 billion in possible new offers. U.S. weapons companies may have patriotic slogans (Lockheed Martin's is “We Never Forget Who We're Working For”), but foreign sales mean the biggest bucks because they involve systems where research and development costs were covered by the Pentagon. Also, they are often accompanied by lucrative deals for accessories, spare parts, and eventual upgrades.

But, what means money in the bank for Lockheed Martin, Raytheon, and other defense corporations, often means misery where the weapons are shipped. Despite having some of the world's strongest laws regulating the arms trade, almost half of U.S. weapons end up in countries plagued with ongoing conflict and governed by undemocratic regimes with poor human rights records. According to the annual Conventional Arms Sales to the Developing World released by the Congressional Research Service in November, the United States provided countries in the developing world with more than $11 billion in U.S. arms last year. Of these 25 countries, all had human rights problems according to the State Department's Human Rights Report, and 10 (including three of the top five) were “undemocratic” in the sense that citizens of those nations “did not have a meaningful right to change their government” in a peaceful manner.

This is the eighth year in a row that the United States has led in global arms deliveries. The United Kingdom trailed in second with $3.1 billion and Russia was a close third, at $2.8 billion in arms deliveries. Together, these three weapons exporters where responsible for almost 70% all arms delivered worldwide last year.

In late October, the United Nations began work on the Arms Trade Treaty, which is aimed at curbing arms transfers to major human rights abusers and areas of conflict. The treaty would also urge weapons suppliers to limit weapons sales likely to undermine development in poor nations. The United States was the only country to vote against the resolution, while 24 (including many other major weapons suppliers) abstained.

The General Assembly will take the next step, but without the active participation of the world's largest weapons producer and exporter, this important mandate will not be strong enough to counter the perfect storm of profiting from war.

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Putin Critic Poisoned

By Andrew Alderson and James Glover
November 19, 2006

• - Putin tried to kill my friend, claims billionaire
• - A magnet for emigres

Scotland Yard has launched an investigation into an audacious attempt to murder – using a deadly poison – a leading Russian defector at a restaurant in London.

Alexander Litvinenko, a former colonel in the Russian secret service and a fierce critic of President Vladimir Putin, was seriously ill under armed guard at a London hospital last night.

Mr Litvinenko, 50, who used to work for the Federal Security Bureau (FSB, the former KGB), fell ill after meeting a contact at Itsu, a sushi restaurant in Piccadilly. The woman journalist claimed to have information on the murder of Anna Politkovskaya, 48, the outspoken journalist who was killed at her Moscow apartment last month.

A close friend of Mr Litvinenko said last night: "Alexander has no doubt that he was poisoned at the instigation of the Russian government." He has been living at a secret address in London with his wife and son because he feared he might be targeted by political opponents.

Mr Litvinenko is thought to have been poisoned with thallium, a colourless and odourless liquid that is often used to kill rats. It has been used in previous murder attempts of political opponents.

Sources close to the investigation said last night that the poison has attacked Mr Litvinenko's central nervous system and there are fears that he will never make a full recovery. His condition was described last night as "serious but stable".

The crime invoked memories of the murder of Georgi Markov, 49, the prize-winning Bulgarian author and broadcaster, who was poisoned as he waited with commuters on Waterloo Bridge in 1978. Mr Markov felt a pain in his thigh and three days later he was dead: the murder weapon was an umbrella, partly developed by the KGB, which fired a pellet the size of a pinhead, containing the poison ricin.

Mr Litvinenko defected to Britain six years ago but only became a British citizen last month. He is regarded as a traitor in his native Russia and friends suspect the FSB of trying to murder him.

He went to meet the woman journalist at Itsu on November 1 after she claimed to have information about the shooting of Miss Politkovskaya, also a fierce critic of President Putin. The next day, Mr Litvinenko complained of feeling unwell and was admitted to hospital. It was thought he had nothing more than a serious stomach upset but in recent days his condition has deteriorated. Friends say the journalist may have been a genuine contact but that political opponents may have discovered the venue for their meeting and slipped the poison into his meal or drink.

Tatiane Assis, the manager of Itsu, said that two detectives visited the restaurant yesterday. "They asked if we had CCTV. We said we didn't and they left without explaining why they had called." There is no suggestion that the restaurant, or its staff, had anything to do with the poisoning.

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Canada Takes Pro-Israel Stance at UN

By Steven Edwards
November 17, 2006

Canada under the Conservatives demonstrated a marked shift in favour of Israel in votes at the United Nations Thursday, registering its third change in a row on more than 20 Arab- and Muslim-sponsored resolutions that are annually critical of Israeli policy, but light on Arab responsibilities.

The switch from the way former Liberal governments voted is expected to continue when Canadian diplomats join those of other UN member states to consider 10 more of the annual resolutions next Tuesday.

Prime Minister Stephen Harper has said in successive speeches his government would not endorse international resolutions on Arab-Israeli relations it considers unbalanced.

Arab and Muslim states use their developing world support to produce "automatic majorities" that slot the resolutions into the international record, then cite them to argue they have global support for their causes.

On many of the resolutions, Israel has typically received support only from the United States, a few U.S.-dependent Pacific island states, and frequently Australia but now Canada is breaking from its traditional siding with the Europeans on most of the issues.

"If this is a shift, and if the resolutions are largely unchanged from previous years, then it will have implications for our reputation around the world, and echoes in Canada as well," warned Paul Heinbecker, a former Canadian ambassador to the UN under the Liberals who is now an international governance expert with two Waterloo, Ontario think-tanks.

"Canada is known for taking a fair-minded and principled approach to these questions, and when I was ambassador, Canada judged every resolution on its merits, taking into account the central issue they are trying to address, and the question of fairness."

But pro-Israel and Jewish groups in Canada have for years lobbied that the resolutions are biased because they demand so much of Israel, but little from the Arab side in the search for Middle East peace and the current government appears to agree, prompting praise from Canada's Jewish community.

"We're very pleased Canada is staying the course and is now guided by a (new) set of principles," said Sara Freedman, a senior official with the Canada-Israel Committee. "Doing so is putting the onus on the UN to be fair and equitable as they deal with the Middle East situation."

The Jewish human rights activist group B'nai Brith Canada expressed similar satisfaction.

"It's anti-Israel time at the UN once again and Canada has taken up the challenge," said Frank Dimant, the group's executive vice-president. "The changes to Canada's vote on three resolutions so far demonstrates that the government will not be bound by traditional anti-Israel voting patterns, but will instead continue the principled course it has charted."

Officials with the National Council on Canada-Arab Relations did not return calls for comment.

The resolution before the UN Thursday speaks of the right of the Palestinian people to self-determination and saw Canada abstain, whereas Canada endorsed the resolution last year under the Liberals.

"Canada reiterates its strongest possible support for the Palestinian people and their right to self-determination as part of a negotiated, two-state settlement. However, this resolution does not adequately address the responsibilities of both parties to the conflict to demonstrate efforts towards establishing a peaceful settlement," Alan Bowman, a senior official with the Canadian mission to the UN, told delegates in explanation of Canada's shift.

Of the two earlier resolutions in which Canada changed its vote, one spoke of the risk of nuclear proliferation in the Middle East, and the other called on Israel not to exploit natural resources in territory the draft designates "occupied Arab lands."

Canada abstained on both after voting in favour last year. The nuclear proliferation resolution says Israel, which is widely presumed to possess nuclear weapons, should join the nuclear non-proliferation treaty, a move that would involve Israel's giving up the bomb. But, Canada said the resolution fails to also point out Iran is currently defying the UN over its nuclear program. Indeed, Western powers believe Iran is trying to develop a nuclear bomb even though it has signed the non-proliferation treaty, which allows it to legally develop nuclear technology for electricity production.

On the natural resources resolution, Canada expressed concern that it fails, in part, to additionally make references to Israel's security concerns.

All the resolutions are currently before UN committees, though all 192 UN member states sit on each one. The drafts enter the international record after the full General Assembly votes on the measures later this year. The process is usually a rubber stamp.

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Fight to Stop Government Spying on Citizens

By Jim Babka
November 17, 2006

Flashback: September . . . Congress was headed out of town for the campaigns and elections break. We fought, alongside more than a dozen organizations, to prevent a particular vote from occurring in the Senate. The subject? Warrantless surveillance of Americans. Our goal was simple: Keep that vote from occurring until after the elections.

We succeeded.

But the work is not done. The fight continues as Congress returns TODAY for a "lame-duck" session. Are you ready to fight for your rights?

Should a warrantless spying bill pass, it will permit this Administration, as well as future Presidents to spy on Americans without even a token of respect to their Fourth Amendment rights. This bill would leave all of us unprotected from snooping government agents working at the behest of either party.

Assume for a moment this bill passes. Can it be fixed in the courts and Fourth Amendment rights restored? Perhaps, but how many years will that take? ...how many people will have their rights violated in the meantime? And ultimately, can we even trust the court to make the right decision?

The best thing we can do is stop it now. No Warrant? No Search is the name of the campaign. You can send a message now.

But that's not all we're worried about.

Before Congress left for the break, they tried to pass an immunity provision at the behest of the telecommunications industry and the White House.

Congress is considering two levels of immunity.

The Senate version is the Protecting Consumer Phone Records Act, S. 2389. It's fairly obvious that this attempt is a way to preempt legal claims against telecommunications companies for violating state privacy laws.

H.R. 5825 includes more expansive language. Companies under the heat of investigation are very likely to claim that it shields them from _any_ legal action, civil or criminal, for assisting the NSA.

And government employees involved are likely to invoke the same argument.

What's at stake? Legal accountability and recourse for what might be the greatest mass invasion of privacy in American history goes out the window.

Congress attempted to sneak an immunity provision into the Port Security bill. I have been in regular contact with several other organizations fighting warrantless eavesdropping and every one of them expects similar clandestine attempts to insert this provision in some unrelated bill during this lame-duck session.

WE NEED A CLEAN BILL. (Of course, if we had the Read the Bills Act, we probably wouldn't have to worry as much about such sneakiness.)

Please send a message through our proprietary Electronic Lobbyist System AND THEN CALL your representatives in Congress to oppose the passage of any such "immunity" provisions. You can make any of the following points:

• The judicial branch exists for a reason. It appears that the telecommunications industry assisted in the greatest invasion of privacy ever perpetrated on the American people. Those Americans effected have a right to discover the extent to which their privacy was violated. Immunity would completely short-circuit the judicial process. There should be a check on illegal collaboration between the telecommunications industry and the Executive Branch. There can be no Rule of Law if it can be so simply discarded after the fact.



• It would be irresponsible for Congress to consider any kind of immunity BEFORE an investigation has been completed into whether, as well as how the law has been broken.



• The public has a right to know how many people's privacy has been violated as a result of domestic spying efforts. The American people should receive disclosure on the nature of the relationship between the telecommunications companies and the NSA. Congress must hold hearings and obtain answers to these questions.



• The Congress should also allow the people to get these questions answered themselves through litigation before it even thinks of giving anyone immunity. NOTE: Immunity might be a helpful bargaining chip in some instances to help probe the truth. But it would be wrong to "give away the store" before we know what powers have been illegally grabbed.



• Congress should not needlessly increase the threat of illegal government surveillance. Telecommunications companies' adherence to the law is the biggest practical check we have against illegal government surveillance. Giving blanket immunity to these companies, which are responsible for the privacy of countless innocent Americans, threatens to make Congress' laws a dead letter in secret meetings between telecommunications executives and government agents. Particularly considering that federal law already provides legal protections that adequately ensure companies' cooperation with lawful requests by the government (including the Foreign Intelligence Surveillance Act (FISA), which was created at the behest of the telecoms in 1978) Congress should not take that risk.



• What precedent will this immunity set? If Congress favors the telecommunications companies' interests here, instead of the public's interest in privacy and the rule of law, other industries will inevitably demand similar special treatment whenever they are caught breaking the law.

Please pick one of these reasons, preferably expressed in your own language, and include it in your message to Congress. No Warrant? No Search.

Once you're logged-in to send a message, please note the phone number of your Representative and Senators. Place a call. Leave a polite message with your Congressperson's staff. Because of the danger and urgency of this situation, phone calls are crucial.

Take action now. Congress is back into session on today (Tuesday). They should be greeted by your messages. We must oppose warrantless surveillance powers and special immunity. We must assert our support for clean bills (no sneaky combining or logrolling).

DC Downsizers, the next eight days are going to be real challenging. Suit up for battle. Take action.

And stay tuned for further battle instructions.

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Keep an Eye on Congress

"I know no safe depositary of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of Constitutional power."
-Thomas Jefferson, 1820

Ever wonder exactly what your elected representatives are wasting your hard-earned money on? Keep an eye on Congress with GovTrack.

GovTrack is a nexus of information about the United States Congress, following the status of federal legislation and the activities of your senators and representatives. Data is collected from the official government websites via automated processes daily.

The site automatically tracks legislative events and categorizes them into thousands of subjects, such as "nuclear energy" and "medicine," so that users can subscribe to follow just the events that interest them. Events, like the passage of bills, are sent to users on a daily or weekly basis by email, or through RSS/Atom feeds.

Knowledge is essential for a healthy democracy, and information about government should be free and open. In that spirit, all of the raw data that GovTrack collects and organizes is made available for others to reuse to create other projects; that is, to make the same information as useful and accessible as possible.

Get Involved
Be a part of the political process by knowing who represents you in Congress, and then tracking legislation that interests you.

Be Informed
Stay up-to-date with Congress by using “monitors”. You can then get email updates or customized RSS/Atom feeds.

Research
Search pending legislation to find out about any bill in Congress since 1999. Or view Yesterday's Activity.

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President Tommy "the Chipper" Thompson?

Election Bid Raises Specter of RFID Implant Threat
By Katherine Albrecht
November 17, 2006

Former U.S. Secretary of Health and Human Services Tommy Thompson is considering a run for president in 2008, a move that should spark alarm among those familiar with Thompson's calls for widespread RFID chipping of Americans. The authors of "Spychips," Dr. Katherine Albrecht and Liz McIntyre, who closely monitor the RFID industry, caution that his position on the Board of the VeriChip Corporation and his stock options in the company make Thompson one of the most dangerous figures in American politics today.

As head of Health of Health and Human Services, Thompson oversaw the scandal-ridden FDA when it approved the VeriChip as a medical device. Shortly after leaving his cabinet post, he joined the board of the VeriChip Corporation and wasted no time in using his clout to promote the company's glass encapsulated RFID tags. These tags are injected into human flesh to uniquely number and identify people.

In public appearances, Thompson has suggested implanting the microchips into Americans to link to their electronic medical records. "It's very beneficial and it's going to be extremely helpful and it's a giant step forward to getting what we call an electronic medical record for all Americans," he told CBS MarketWatch in July 2005. He also suggested implanting military personnel with the chips to replace dog tags.

Thompson's desire to run for president is not mere speculation. Media outlets in his home state of Wisconsin, where he served four terms as governor, have confirmed Thompson is laying the foundation for a presidential bid. His wife Sue Ann has told reporters that the family has discussed his candidacy and that "He should give it a try. He's got a lot of good ideas." Thompson himself has stated, "There's no question I'm interested.?"

Thompson is considered a long-shot for the Republican nomination, but his influence shouldn't be discounted, says McIntyre. "Despite his folksy manner, he's a savvy politician whose Washington connections run deep, and he's got a vested interest in chipping America." She points out that Thompson has an option on more than 150,000 shares of VeriChip stock.

Right now those options aren't worth much. Security flaws and public squeamishness have hurt the company's sales, resulting in losses of millions of dollars.

"It will take a considerable shift in public perception to chip enough Americans to turn all that red ink to black," Albrecht observes. "It concerns us that Thompson would have a financial interest in having people roll up their sleeves while aiming for such an influential office."

Ironically, Thompson himself has not yet received a microchip implant despite what must be extraordinary pressure from the VeriChip Corporation. He made a promise to do so on national television over a year ago.

"Given the unpopularity of the VeriChip and people's concern it could be abused, Thompson has been wise to avoid getting chipped himself," says Albrecht. "Getting chipped would would be political suicide for any politician. Even if he remains chip-free as we hope, the American people should still be wary of him."

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Flashback 2002:The President's Real Goal in Iraq

By Jay Bookman
September 29, 2002

The official story on Iraq has never made sense. The connection that the Bush administration has tried to draw between Iraq and al-Qaida has always seemed contrived and artificial. In fact, it was hard to believe that smart people in the Bush administration would start a major war based on such flimsy evidence.

The pieces just didn't fit. Something else had to be going on; something was missing.

In recent days, those missing pieces have finally begun to fall into place. As it turns out, this is not really about Iraq. It is not about weapons of mass destruction, or terrorism, or Saddam, or U.N. resolutions.

This war, should it come, is intended to mark the official emergence of the United States as a full-fledged global empire, seizing sole responsibility and authority as planetary policeman. It would be the culmination of a plan 10 years or more in the making, carried out by those who believe the United States must seize the opportunity for global domination, even if it means becoming the "American imperialists" that our enemies always claimed we were.

Once that is understood, other mysteries solve themselves. For example, why does the administration seem unconcerned about an exit strategy from Iraq once Saddam is toppled?

Because we won't be leaving. Having conquered Iraq, the United States will create permanent military bases in that country from which to dominate the Middle East, including neighboring Iran.

In an interview Friday, Defense Secretary Donald Rumsfeld brushed aside that suggestion, noting that the United States does not covet other nations' territory. That may be true, but 57 years after World War II ended, we still have major bases in Germany and Japan. We will do the same in Iraq.

And why has the administration dismissed the option of containing and deterring Iraq, as we had the Soviet Union for 45 years? Because even if it worked, containment and deterrence would not allow the expansion of American power. Besides, they are beneath us as an empire. Rome did not stoop to containment; it conquered. And so should we.

Among the architects of this would-be American Empire are a group of brilliant and powerful people who now hold key positions in the Bush administration: They envision the creation and enforcement of what they call a worldwide "Pax Americana," or American peace. But so far, the American people have not appreciated the true extent of that ambition.

Part of it's laid out in the National Security Strategy, a document in which each administration outlines its approach to defending the country. The Bush administration plan, released Sept. 20, marks a significant departure from previous approaches, a change that it attributes largely to the attacks of Sept. 11.

To address the terrorism threat, the president's report lays out a newly aggressive military and foreign policy, embracing pre-emptive attack against perceived enemies. It speaks in blunt terms of what it calls "American internationalism," of ignoring international opinion if that suits U.S. interests. "The best defense is a good offense," the document asserts.

It dismisses deterrence as a Cold War relic and instead talks of "convincing or compelling states to accept their sovereign responsibilities."

In essence, it lays out a plan for permanent U.S. military and economic domination of every region on the globe, unfettered by international treaty or concern. And to make that plan a reality, it envisions a stark expansion of our global military presence.

"The United States will require bases and stations within and beyond Western Europe and Northeast Asia," the document warns, "as well as temporary access arrangements for the long-distance deployment of U.S. troops."

The report's repeated references to terrorism are misleading, however, because the approach of the new National Security Strategy was clearly not inspired by the events of Sept. 11. They can be found in much the same language in a report issued in September 2000 by the Project for the New American Century, a group of conservative interventionists outraged by the thought that the United States might be forfeiting its chance at a global empire.

"At no time in history has the international security order been as conducive to American interests and ideals," the report said. stated two years ago. "The challenge of this coming century is to preserve and enhance this 'American peace.' "

Familiar themes
Overall, that 2000 report reads like a blueprint for current Bush defense policy. Most of what it advocates, the Bush administration has tried to accomplish. For example, the project report urged the repudiation of the anti-ballistic missile treaty and a commitment to a global missile defense system. The administration has taken that course.

It recommended that to project sufficient power worldwide to enforce Pax Americana, the United States would have to increase defense spending from 3 percent of gross domestic product to as much as 3.8 percent. For next year, the Bush administration has requested a defense budget of $379 billion, almost exactly 3.8 percent of GDP.

It advocates the "transformation" of the U.S. military to meet its expanded obligations, including the cancellation of such outmoded defense programs as the Crusader artillery system. That's exactly the message being preached by Rumsfeld and others.

It urges the development of small nuclear warheads "required in targeting the very deep, underground hardened bunkers that are being built by many of our potential adversaries." This year the GOP-led U.S. House gave the Pentagon the green light to develop such a weapon, called the Robust Nuclear Earth Penetrator, while the Senate has so far balked.

That close tracking of recommendation with current policy is hardly surprising, given the current positions of the people who contributed to the 2000 report.

Paul Wolfowitz is now deputy defense secretary. John Bolton is undersecretary of state. Stephen Cambone is head of the Pentagon's Office of Program, Analysis and Evaluation. Eliot Cohen and Devon Cross are members of the Defense Policy Board, which advises Rumsfeld. I. Lewis Libby is chief of staff to Vice President Dick Cheney. Dov Zakheim is comptroller for the Defense Department.

'Constabulary duties'
Because they were still just private citizens in 2000, the authors of the project report could be more frank and less diplomatic than they were in drafting the National Security Strategy. Back in 2000, they clearly identified Iran, Iraq and North Korea as primary short-term targets, well before President Bush tagged them as the Axis of Evil. In their report, they criticize the fact that in war planning against North Korea and Iraq, "past Pentagon war games have given little or no consideration to the force requirements necessary not only to defeat an attack but to remove these regimes from power."

To preserve the Pax Americana, the report says U.S. forces will be required to perform "constabulary duties" -- the United States acting as policeman of the world -- and says that such actions "demand American political leadership rather than that of the United Nations."

To meet those responsibilities, and to ensure that no country dares to challenge the United States, the report advocates a much larger military presence spread over more of the globe, in addition to the roughly 130 nations in which U.S. troops are already deployed.

More specifically, they argue that we need permanent military bases in the Middle East, in Southeast Europe, in Latin America and in Southeast Asia, where no such bases now exist. That helps to explain another of the mysteries of our post-Sept. 11 reaction, in which the Bush administration rushed to install U.S. troops in Georgia and the Philippines, as well as our eagerness to send military advisers to assist in the civil war in Colombia.

The 2000 report directly acknowledges its debt to a still earlier document, drafted in 1992 by the Defense Department. That document had also envisioned the United States as a colossus astride the world, imposing its will and keeping world peace through military and economic power. When leaked in final draft form, however, the proposal drew so much criticism that it was hastily withdrawn and repudiated by the first President Bush.

Effect on allies
The defense secretary in 1992 was Richard Cheney; the document was drafted by Wolfowitz, who at the time was defense undersecretary for policy.

The potential implications of a Pax Americana are immense.

One is the effect on our allies. Once we assert the unilateral right to act as the world's policeman, our allies will quickly recede into the background. Eventually, we will be forced to spend American wealth and American blood protecting the peace while other nations redirect their wealth to such things as health care for their citizenry.

Donald Kagan, a professor of classical Greek history at Yale and an influential advocate of a more aggressive foreign policy -- he served as co-chairman of the 2000 New Century project -- acknowledges that likelihood.

"If [our allies] want a free ride, and they probably will, we can't stop that," he says. But he also argues that the United States, given its unique position, has no choice but to act anyway.

"You saw the movie 'High Noon'? he asks. "We're Gary Cooper."

Accepting the Cooper role would be an historic change in who we are as a nation, and in how we operate in the international arena. Candidate Bush certainly did not campaign on such a change. It is not something that he or others have dared to discuss honestly with the American people. To the contrary, in his foreign policy debate with Al Gore, Bush pointedly advocated a more humble foreign policy, a position calculated to appeal to voters leery of military intervention.

For the same reason, Kagan and others shy away from terms such as empire, understanding its connotations. But they also argue that it would be naive and dangerous to reject the role that history has thrust upon us. Kagan, for example, willingly embraces the idea that the United States would establish permanent military bases in a post-war Iraq.

"I think that's highly possible," he says. "We will probably need a major concentration of forces in the Middle East over a long period of time. That will come at a price, but think of the price of not having it. When we have economic problems, it's been caused by disruptions in our oil supply. If we have a force in Iraq, there will be no disruption in oil supplies."

Costly global commitment
Rumsfeld and Kagan believe that a successful war against Iraq will produce other benefits, such as serving an object lesson for nations such as Iran and Syria. Rumsfeld, as befits his sensitive position, puts it rather gently. If a regime change were to take place in Iraq, other nations pursuing weapons of mass destruction "would get the message that having them . . . is attracting attention that is not favorable and is not helpful," he says.

Kagan is more blunt.

"People worry a lot about how the Arab street is going to react," he notes. "Well, I see that the Arab street has gotten very, very quiet since we started blowing things up."

The cost of such a global commitment would be enormous. In 2000, we spent $281 billion on our military, which was more than the next 11 nations combined. By 2003, our expenditures will have risen to $378 billion. In other words, the increase in our defense budget from 1999-2003 will be more than the total amount spent annually by China, our next largest competitor.

The lure of empire is ancient and powerful, and over the millennia it has driven men to commit terrible crimes on its behalf. But with the end of the Cold War and the disappearance of the Soviet Union, a global empire was essentially laid at the feet of the United States. To the chagrin of some, we did not seize it at the time, in large part because the American people have never been comfortable with themselves as a New Rome.

Now, more than a decade later, the events of Sept. 11 have given those advocates of empire a new opportunity to press their case with a new president. So in debating whether to invade Iraq, we are really debating the role that the United States will play in the years and decades to come.

Are peace and security best achieved by seeking strong alliances and international consensus, led by the United States? Or is it necessary to take a more unilateral approach, accepting and enhancing the global dominance that, according to some, history has thrust upon us?

If we do decide to seize empire, we should make that decision knowingly, as a democracy. The price of maintaining an empire is always high. Kagan and others argue that the price of rejecting it would be higher still.

That's what this is about.

"Rebuilding America's Defenses," a 2000 report by the Project for the New American Century, listed 27 people as having attended meetings or contributed papers in preparation of the report. Among them are six who have since assumed key defense and foreign policy positions in the Bush administration. And the report seems to have become a blueprint for Bush's foreign and defense policy.

Paul Wolfowitz
Political science doctorate from University of Chicago and dean of the international relations program at Johns Hopkins University during the 1990s. Served in the Reagan State Department, moved to the Pentagon during the first Bush administration as undersecretary of defense for policy. Sworn in as deputy defense secretary in March 2001.

John Bolton
Yale Law grad who worked in the Reagan administration as an assistant attorney general. Switched to the State Department in the first Bush administration as assistant secretary for international organization affairs. Sworn in as undersecretary of state for arms control and international security, May 2001.

Eliot Cohen
Harvard doctorate in government who taught at Harvard and at the Naval War College. Now directs strategic studies at Johns Hopkins and is the author of several books on military strategy. Was on the Defense Department's policy planning staff in the first Bush administration and is now on Donald Rumsfeld's Defense Policy Board.

I. Lewis Libby
Law degree from Columbia (Yale undergrad). Held advisory positions in the Reagan State Department. Was a partner in a Washington law firm in the late '80s before becoming deputy undersecretary of defense for policy in the first Bush administration (under Dick Cheney). Now is the vice president's chief of staff.

Dov Zakheim
Doctorate in economics and politics from Oxford University. Worked on policy issues in the Reagan Defense Department and went into private defense consulting during the 1990s. Was foreign policy adviser to the 2000 Bush campaign. Sworn in as undersecretary of defense (comptroller) and chief financial officer for the Pentagon, May 2001.

Stephen Cambone
Political science doctorate from Claremont Graduate School. Was in charge of strategic defense policy at the Defense Department in the first Bush administration. Now heads the Office of Program, Analysis and Evaluation at the Defense Department.

Read more...

Like I said, INSANE!

Free Market News Network
By Richard Daughty
November 10, 2006

Oddly enough, I felt that things were "back to normal" when I saw that the Federal Reserve increased Total Fed Credit by $2.6 billion last week. This TFC is the magical fount from which spews (like vomit, if I may use a disgusting but highly-appropriate metaphor) regular increases of credit available to banks, created from literally nothing, at the literal touch of a button, and that new credit in the banks becomes more money when (and if) it is borrowed.

Therefore, the Fed is back to creating more money, always more and more money, at lower and lower interest rates. Which means, unfortunately, higher and higher prices, as creating exponentially-increasing levels of money and credit (the only way to exponentially-increase the levels of money in the economy) is the only way that such an insane economic system as ours can function.

As a Mogambo Classic Example (MCE), suppose you borrow a hundred dollars at 5% interest. You know that you have to pay it back in full, plus the interest, for a total of $105. In short, you pay back more than you borrowed. So where does the money to pay the interest come from? Simple: It has to be created by someone else borrowing money, and you hope, somehow, to end up with it! Hahahaha! See where I am going with this?

And sure enough, now these new guys have the same problem (they owe more than they borrowed), which will be solved (as nothing begets more insanity and stupidity than the temporary success of insanity and stupidity) by enticing somebody else to borrow some money, creating more money! Hahahaha! And creating more inflation in prices the whole freaking way, too!

Thanks to the Federal Reserve, at the end of the day, any day, every day, there is much more debt in the economy and more money in the economy, but much less than is actually owed, ultimately, to the banks.

Like I said, insane! But that is the abysmal, idiotic depths to which the laughable neo-Keynesian/econometric theory that prevails in America (and, I am sorry to say, the world) has sunk.

And if you don't think that prices are rising, then let's stroll on over to the latest Economist magazine and take look for ourselves. Hmmm! The Dollar Index for All Items is up 37.5% from a year ago. Sounds like higher prices to me! Food is up 20.1% from a year ago, and that sounds like higher prices to me, too! All Industrials is up 56%, which I am SURE is higher prices, and Metals is up 80.4%, which I am absolutely positive is higher prices!

The only thing that is NOT up in this table is Non-food Agriculturals which is still up 2.8% from a year ago, a level of inflation that used to be thought of as alarmingly high, back before Americans lost their minds 50 years or so ago.

Desperate to distract myself and prevent another hysterical Mogambo Fit Of Outrage (MFOO), we look to foreign holdings of government and agency debt at the Fed, and it rose a cool $8.3 billion last week. Again, just like old times. Almost soothing, in a weird sort of "been there, done that" kind way.

But apparently everyone missed the lead story from the always-dependable Mogambo Muckraker News Service (MMNS) since it was quashed by government censors. The bombshell was that "The big, ugly news (BUN) is that the Treasury increased the national debt by $90 billion in October! In one month! Ninety billion dollars in one month! That's $300 more debt for every man woman and child in the country! In one month! One!"

Always eager to show off my ciphering skills to my Uncle Jed, I multiply $90 billion times 12 months to show that federal debt is soaring at a $1.8 trillion per year pace!

If you were not busily dialing 911 because of the crushing chest pains at that news and had waited around for the bombastic Mogambo Editorial at the end of the broadcast, you would have learned that this is NOT just like "old times"! This is "new and horrifically bad!"

Now I am really starting to get freaked out, and in a last-ditch, desperate attempt to control myself, I latch onto the essay "Let's Get Real" by David N. Vaughn at the Gold Letter, who writes "Consider this: The Hoover Dam was the largest single public works project in the history of the U.S., with an estimated total cost of $2.22 billion in today's dollars. China will spend eighteen times that amount on the 2008 Beijing Olympics!"

Now as interesting as that is (very!), the exact quote that got me all excited was that Weiss Research stated that "...whenever government money is spent, it spreads through the economy. By the time the government's money works its way through the economy, the total economic impact might be up to eight times the original dollar amount spent."

Therefore (and trust me when I say that this is important, which I do because I think it is important, and that means it will surely show up on your final exam, and you will surely fail this course if you get it wrong, and if you have to repeat my course again I will be very, very cruel to you for having been soooOOoooo stupid), the more important thing is that he has suggested that the fabled spending multiplier is 8! In other words, every dollar that is spent creates $8 in additional economic activity! Eight!

There are, to be fair and balanced, others who rightly say that I am an idiot (which is true) because there are no such things as multipliers (which is not true). I, personally, believe in them, and through the years I have seen it hypothesized to be in the range of between 4 or 5, sometimes 6, and now to, 8. Ahh! A new record!

The downside of multipliers, and probably the reason that nobody wants to admit that multipliers exist, is that the multiplier cuts both ways, and that in a downturn, for every dollar that is NOT spent, 8 other dollars are thus also not spent. Oops!

In oddly related way, reader Richard S, has seen something ugly about productivity at breakingviews.com. Notice the selfsame "cutting both ways" angle when writes that the article "points out that although productivity has increased, and from '98 to '04 it did increase faster than the two previous decades, it still was below the post war average. More interesting, I think, is the point that the housing boom flattered the productivity number. Housing output is recorded through sales prices so as house prices go up it looks like more output. Of course now that prices are falling it works in reverse and productivity is suddenly looking unproductive like today's 0 reading."

Indeed, he writes, taking a look at productivity growth of U.S. nonfarm businesses, as reported by the Labor Department, it "fell to 0% in the third quarter. Worse yet, "Unit labor costs -- a key gauge of inflationary pressures stemming from a tight labor market -- increased at an annualized rate of 3.8%." 3.8% inflation! This is awful, awful news!

Rex Nutting of MarketWatch.com noted that we are all being much too timid about this, and that things are far worse, in that "Over the past year, productivity increased 1.3%, the slowest growth since 1997. Unit labor costs are up 5.3% in the past year, the fastest increase in 16 years."

- Ken Y. sent the Treasury link that he thinks he may explain where some of the enormous money is coming from to fund the bloated, dysfunctional system we call Home Sweet Economic Home. It is a lulu, too!

The link describes the Term Investment Option (which has the acronym TIO). "In April 2002, the Treasury, through the Federal Reserve System, piloted a new investment option to test the viability of placing excess cash balances with Treasury Tax and Loan (TT&L) depositaries for a defined term and rate determined through a competitive auction process. Treasury announced in October 2003 that the TIO program would become a permanent cash management alternative for investing Treasury's excess cash balances."

Why are they doing this? They say "The program is designed to increase the rate of return earned on Treasury investments, add investment capacity to the TT&L Program, and to provide TT&L participants certainty in the terms of these investments." Ahh! So the Treasury Department is going to make more money by investing temporary excess estimated-tax remittances in an expansion of "investment capacity" of the banking system, and provide moral hazard underwriting to the whole thing, too? Wow! Things are worse than I thought, as this is too bizarre for words.

And after hearing that, you are not buying gold now, and I mean right freaking now? Then you had better start writing down all the reasons that you are not, because one day your little children and grandchildren are going to be groveling around in the worthless dollars covering the dirt floor of your drafty shack, and will they want to know why you did not buy gold when you could have and should have. In response, you can use that list of reasons to entertain them and keep them distracted from their miserable situation, and you also have something to brush the flies away from their filthy faces while you do it.

-- As an example of the greed of government that is coming to gobble us all up, because a government that is steadily increasing the amount of dollars it spends on an increasing number of people will always need increasing amounts of money, from Reuters we learn that "Toronto's main stock index plunged 2.4 percent on Wednesday after the Canadian government announced plans to tax the once-booming income trust sector. Ottawa said trusts that begin trading from now on will face the tax in the 2007 tax year, while existing trusts will have a four-year transition period. The S&P/TSX Income Trust subindex, which tracks the prices of 75 of the 253 trusts in the Canadian market, was down 11 percent on Wednesday."

To put it in cold, hard Canadian dollars and cents, "The drop represented a loss of more than C$20 billion ($19.5 billion) in market value for the income trusts, and more than C$24 billion including BCE and Telus's losses", which are two of the biggest trusts most devastated by this change.

And the insanely ludicrous thing is that this is, as I understand it, to prevent the government from losing a few billions of Canadian dollars in tax revenues from corporations, as the profits of the trusts are passed-through to the shareholders, who are taxed anyway! Hahaha!

So, the net effect is an immediate C$24 billion in losses to investors, plus another few billion in higher taxes sucking your investments dry, every year from now on!

But it all because the government needs money, and this may explain why Bloomberg.com reports "Retail-sales growth in the dozen nations sharing the euro accelerated in October as cheaper oil prices and increased hiring bolstered consumer spending." Well, retail sales growth may have had something to do with those things, but Bloomberg also reported that "German industrial production fell in September for the first time in three months as companies made fewer consumer goods such as washing machines and refrigerators and as energy output dropped."

I figure this all means that the Germans, already facing another announced 3% hike in the VAT tax starting in January 2007, thereby putting this "sales" tax up to around 20%, are buying like mad, right now, before the tax (and thus the total price) goes up. And now everybody else in the EU is thinking to themselves "Oh, my God! That stupid Mogambo was right! Governments really ARE a brain-dead bunch of commie/socialist re-distributionist morons who are going to destroy me with taxes and/or inflation!"

-- From DailyReckoning.com we read "Who is the world's biggest supplier of oil and gas? Russia. The west may have knocked out the old Soviet Empire, but now Russia has emerged in control of the world's most strategic asset - energy. Saudi Arabia supplies 18% of the planet's oil and gas exports. Russia puts out 19 percent."

And Russians, still smarting from the humiliation of us destroying their stupid communist economy and inflicting more than a decade of misery and suffering on them, are probably not going to be cutting any sweetheart deals with us Americans any time soon. And if I know the cunning, evil, treacherous Russians as well as I think I do from the way they are portrayed in James Bond movies, they are going to try and destroy us right back, putting THEM on top! Then can SMERSH be far behind?

-- Thanks to John Rubino of DollarCollapse.com and this excellent compilation essay "Best Quotes of October 2006" we discovered that we missed Adam Hamilton of Zeal Intelligence when he said "From its peak in mid-2001 to its trough in late 2004, the US Dollar Index lost a staggering 33.3% of its value in the world currency markets! A dollar spent internationally in late 2004 would only have purchased two-thirds of what the same dollar spent in mid-2001 would have commanded."

A third! The US debt and equities owned by foreigners have fallen in value, thanks to the collapse of the dollar, by a third! A 33% loss in five years!

Even more significantly, he says "Since currencies usually move with all the sound and fury of a glacier, this is a staggeringly large move, especially for the world's reserve currency."

And from Mr. Rubino we also get Captain Hook of TreasureChests.info, who enlightens us that "According to the Bank for International Settlements (BIS), the combined turnover in the world's derivatives exchanges totaled USD 344 trillion during Q4 2005. No, that's not a typo, that's $344 trillion of notional value, where if one were to annualize a total, it doesn't take long to figure out the world is now trading in excess of a quadrillion worth of this paper every year. Is that a big enough bubble for you? And it goes without saying this has been a boon to the brokerages and banks that deal in these formerly exotic financial instruments."

Of course, we galactic observers stationed on this planet are not too surprised to learn that slick operators and colluding bankers on yet another planet in the cosmos have rigged up something slimy to enrich themselves. But the horror comes when he goes on to say "Whether you realize it or not, even if you don't participate in them directly, simply by owning a mutual fund, or a bank account for that matter, indirectly you too are captive to this trend." Yikes! Now you know another good reason to hold gold and silver bullion, which is NOT even remotely connected to any of this crap!

This is, of course, a lot of money, and it makes gold look even more attractive, as Bill Bonner at DailyReckoning.com informs us that "Even at $600, the total world supply of gold above ground represents only 3% of U.S. dollar-based financial assets. As recently as 1980, the figure was 29 percent."

Hell, if you think that is something, then get a load of this: According to the Economist magazine, China has, literally, right now, more than enough money in foreign reserves (mostly US debt) to buy all the gold in the world! Right now! And you aren't buying gold? Wow!

And this is just American dollars, and all the big economies have been creating money like gangbusters for decades, too! Sum it all up, and that's how much monstrously more money there is than gold in the world. And if you think that there is, anywhere in history, one example where that silly, stupid situation lasted, then you were obviously like me in high school, and we both had History class early in the morning when we were still hung over and sleepy, and so that why we missed that important lesson.

But I have since learned it, and, now, so have you. And as soon as we get back from buying more gold, there is no reason why we can't get started on being hung over and sleepy tomorrow morning, just like old times, which is probably the best idea I have had all day.

-- At this stage of the show, I was going to do this terrific magic trick where I pull a rabbit out of my hat, but then I wondered "What do I do with the rabbit after I pull it out of my hat? And what if it takes a crap in my hat? And where can I borrow a hat?"

So I decided, instead, to pull a bucket of fried chicken out of a hat, and it went so well during the rehearsal that I ate it all, and now I am bloated and sick and never want to see another damned piece of fried chicken again.

Instead, looking for something easy, I am now going to answer, in a comfortable, semi-recumbent position, the most frequently asked questions of people who are so stupid that they, in the first place, read the Mogambo Guru newsletter, soon discover that I am a really stupid guy, and yet will still ask me a question after they found out how stupid I was!

Getting started, the most often-asked question is, of course, "Are you abysmally ignorant, or are you really as stupid as you sound?" My answer is that I have more than enough of each, and thanks for asking.

Next in frequency is the question represented by a recent email from Dennis, who said, as I remember, "You're always yammering about gold and silver until I am sick of hearing it. So, tell us what 'type' of silver and gold to invest in; coin, numismatic, bullion, ETFs, mining stock, etc."

I raise myself up on one elbow, and announce that according to the Patented Mogambo Investment Method (PMIM), what you want, first of all, is to get some pure gold and pure silver bullion, and take delivery. I recommend pure gold and pure silver so that you can maximize the "dollar value/cubic foot storage space" ratio, to be very scientific, and which has the added benefit of extending the length of time before your wife, or husband, starts whining about how their precious little closet is so full of gold and silver that now there is no space for their precious little shoes, and you have to politely remind them that they have too many damned shoes, and if I had feet as nasty as theirs, I'd wear big boots all the time anyway, and then for some reason that sets them off and blah blah blah.

Partially for that reason, I also suggest that you get some mutual fund shares that specialize in precious metal stocks, which conveniently store as mere pieces of paper.

Then, following this invaluable PMIM advice to the letter, the floorboards are eventually warped and the house is sagging on its foundation from the sheer tonnage of silver and gold that you have accumulated. And then, one day, you will trip over an errant 100-ounce bar of silver for the last damned time, and while putting bandages on various bleeding areas and asking your loving family members to kiss your boo-boo and make it better and they are laughing that they hope you die from an infection, you will suddenly swear that, from now on, you are buying only paper assets because nobody ever broke a leg banging into a piece of paper in the dark. Maybe slipping on one. But not banging into it!

That is near the point where you stop accumulating bullion, and start accumulating more shares of mutual funds, and a little ETF action, and individual shares of companies involved with mining, refining, finding, exploring, or other stuff connected with gold and silver, and some related stuff like copper and other commodities, especially oil and whatever is the latest Congressional scheme-du-jour larded with tax incentives.

At this point you will be so rich that you don't even want any more damned gold or any more damned silver, or anything, and if one more damned gold company sends me another damned notice of a damned shareholder meeting to vote on another damned batch of proposals designed to blatantly and obscenely enrich the company officers, by literally giving them oodles and oodles of shares and options, that you will go freaking berserk.

But this is not about the bunches of greedy, self-serving scumbags have taken over the gold mines, and taken over the corporations, governments, schools, newspapers, courts and everything else, but about investing in gold and silver, although I will note, for the record, that pandemic corruption and raw, ugly greed in gold companies is just a reflection of the massive corruption and raw, ugly greed that is always maxed out everywhere at the end of long financial booms. That's the nature of the beast, and thus it is so because has always been so.

Finally getting back to the point (and preventing the launch of another Tiresome Mogambo Tirade (TMT) about the problems that come from having a Federal Reserve that is so corrupt, brain dead and despicable as to deliberately create the money to finance it all), as far as numismatic coins are concerned, I am not a collector, and thus have no appreciation for the premium that "collectible coins" routinely sell for, often as some seemingly-insane multiple of the actual gold or silver content.

A big, BIG reason in their favor is, perhaps, the "collector mentality" that is a function of a yet-undiscovered "hunter/gatherer" gene that meant actual survival, and collectors are merely following those innate instincts to hunt down rare coins and gather them. I dunno.

But I assume it is this instinctual drive which compels collectors to pay such premiums for a mere rarity, even though there are lots and lots of rare things all over the world and nobody is collecting them (old Mogambo toothbrushes, for example), much less paying through the nose to get them.

So, while I am generally opposed to buying numismatic coins that sell at such high prices, I cannot argue against the fact that they DO sell for those high prices, and there is no reason that I can think of to make me suspect that it will be any different in the future, collectors being what they are, and genetics being what it is. And, too, one day the Chinese, who will be the rich people of the world, will experience a fad of collecting old American numismatic coins. So do what you what you think best.

One other, recurrent argument for buying numismatic coins is that the Constitution says that the government has to pay you the market value to confiscate your gold, or silver, or both, or anything else you have that the government wants. Thus, numismatic coins were exempted when that arch-villain FDR confiscated all the gold in, ummm, 1934(?) simply because it was seen as folly to buy up 99% of all the gold at $35 an ounce, and then buy the last teensy fraction of 1% that was contained in numismatic coins by paying their market value, representing (as it did, thanks to collectors) thousands of dollars per ounce. "Let the babies have their precious numismatic coins", you can almost hear them sniff. "It ain't worth the hassle!"

And, finally, we come to the people who write "Okay, suppose I lose my mind and actually take your stupid advice, and suppose that for once in your miserable life you are not wrong about everything, and gold actually DOES soar. So, when do you sell the gold, and what do you do with the money, Mister Smarty-Pants who thinks he knows everything?"

This is where The Mogambo smiles. "The answer," his buttery voice floating on the air, "is when inflation has hit its peak, which will roughly correspond to the peak in gold prices, which will roughly correspond to the peak in interest rates, and thus roughly corresponding to the low in bonds, and which will roughly correspond to the lows of the general stock market, as there will be fewer surviving companies."

At that point, you get out of gold at the high, and put all that money into bonds, which will be selling at their lows, but which will soon be gaining in price, and for a long, long time, as interest rates start coming down, and economic vitality returns to the economy over the next decade or so.

And to make it even better in a delicious, greedy, nouveau-rich kind of way, you will be earning 25% on your money every year until you sell the bonds at some huge freaking multiple of what you paid for it!

The Mogambo sinks back onto his couch, takes a long pull on a bottle of some really cheap tequila, wipes his slobbery mouth on the sleeve of his silken robe, and says "This, my Darling Mogambo Cherubs (DMC), is how successful long-term investing is done!"

After everyone leaves, there is one guy left standing there, all alone. He asks, his plaintive voice weak and pleading, "Mister Mogambo, he whose heart breaks at the pitiful plight of the poor as they must continually pay higher and higher prices, thanks to the Federal Reserve continually creating excess money and credit, what can I do, since I, too, am poor, and have no money to buy gold, or anything else? Help me, Mogambo! I have nothing and I am scared!"

The Mogambo puts down a half-eaten burrito, looks over at him standing there, and thinks to himself "Poor child. Poor doomed child. Poor doomed collateral-damage child. The victim of perpetual inflation created by the misuse of a fiat currency and a bizarrely dysfunctional fractional-reserve banking system." I look at him. He looks at me.

What can I say? I wept and went home.

It wasn't until later that I remembered the burrito, so I rushed back, but by the time I got there, it was gone. He probably stole it and ate it, the little bastard. Now I'm glad he's doomed!

-- Mike Larson of Money and Markets writes "Now thousands of former apartments that were converted to condos are being RE-converted to rentals. Result: Supplies of apartments for rent are going through the roof. Apartment REITs are going to take a big hit."

But this increase in supply of apartments will cause, I assume, the price of rent to fall, and a fall in rents will obviously show up as a reduction in the inflation statistics as measured by the Consumer Price Index, and so we ought to be prepared for it, as there will be a virtual deluge of economic zombies intoning "Inflation is low! Inflation is low!" thanks to the effect on the CPI number.

But it will all be a lie. A big, fat lie.

Ugh.

****Mogambo sez: The day is almost at hand. "What day?" you ask. The day when you realize that The Mogambo was right, and now you hate my guts for not forcing you to do the right thing and buy gold and silver.

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An Unstable Dollar Standard

Free Market News Network
By Hans Sennholz
November 10, 2006

We live in a period of world-wide economic expansion and prosperity. The world economy is said to grow this year at some five percent, which will be the third year above the historic average. Even if, in the coming year, the growth rate should decline a little, the global economy looks bright and prosperous. Led by some Asiatic countries, especially China and Japan, more countries than ever before are reporting rapid economic expansion.

But no matter how bright the economic outlook may be, the international prosperity is exposed to a looming risk, which has even grown in recent months. The war in Iraq and the skirmishes in Afghanistan are an ever-present danger that may destabilize the Middle East and spread the conflict to more countries. The Islamic republic of Iran, which does not hesitate to confront American interests and concerns, may upend the peace at any time. But the greatest concern of many economists is the global economic imbalance which is clearly visible in the huge balance-of-payments deficits of the United States and in the corresponding surpluses of the creditor countries. Americans are said to consume some 70 percent of the world’s savings while Japan, China, and other developing countries are financing the deficits and accumulating American IOUs. Many economists are convinced that such disproportions and imbalances are unsustainable in the long run.

Surely, American foreign debt has increased significantly, but so has individual income and wealth. Total domestic debt has risen visibly over the last decade, but so have productivity and income. This economic harmony nevertheless is burdened by considerable risk of global imbalances that may cause disruption and upheaval in the future. The debt-and-credit differences of the large national economies continue to grow, the balance-of-payment deficits of the United States surpass all national surpluses. In 2005 the deficits amounted to some $790 billion, which, in relation to gross national product, exceeded six percent. So far this year, it may exceed $800 billion, or 6.5 percent of GDP. Moreover, the federal government continues to suffer huge budget deficits which enlarge the national debt and add weight to the international concern.

The American mountain of debt is matched by large balance-of-payment surpluses in developing Asian countries, as well as by most oil-exporting countries. Many creditors welcome the surpluses. They keep the exchange rates of their currencies low which, in turn, boosts their exports and gives employment to millions of workers who, with American assistance and technology, are learning to produce for the world market. Chinese banks now hold nearly $1 trillion, which is the highest reserve position in the world, having passed Japan this year with some $865 billion. Without such dollar purchases, their currencies would rise immediately, which would boost all export prices, curb exports, and depress economic production and employment.

A few critics believe that the U.S. trade deficits may be the greatest threat to the economic order. Yet the deficits have neither impaired the U.S. dollar nor undermined the position of the United States as the primary economic engine and power. Many observers, therefore, question and disclaim the dangers of American balance-of-payments deficits. They not only cast doubt on official statistics that may exaggerate the case, but also point to the stable rates of exchange which all participants maintain voluntarily. Stability, after all, benefits everyone.

This economist, nevertheless, is convinced that a correction is unavoidable. All markets function to adjust and readjust any maladjustment. They are burdened and strained by the growing mountain of debt which raises the question of American ability to meet its obligations. If there ever should be any doubt about the stability of the American economy, the world-wide demand for U.S. dollars would decline, which would cause the dollar exchange rate to plummet. American imports would decline, dampening the surge of consumption and slowing the very growth engines of export countries such as Japan, China, and many others. The whole world would feel the American instability. A weaker dollar and rising import prices also would accelerate the inflation rate which would pressure the Federal Reserve to raise interest rates. Higher rates would slow the American economy and boost the rate of unemployment.

Despite such international imbalances, the U.S. dollar has not weakened significantly in recent months, and the world economy has not fallen into a global recession. At first, Asian central banks, and then also the oil-exporting countries, financed the huge deficits. It is in the economic interest of the Asian developing countries to keep their exchange rates low in order to keep export prices low and thus keep the export motor running. Massive purchases of federal obligations support the exchange rate of the dollar and increase Asian currency reserves.

It is in the interest of the United States, as well as the Asian countries, that the U.S. dollar maintain its high exchange value. Some American economists like to speak of a “Bretton Woods II” arrangement, which would resemble the international system in effect between the Second World War and 1973. Participating countries supported each other’s currencies and thus sustained stable exchange rates.

In Bretton Woods I, the member countries supported each other’s currencies – in Bretton Woods II, they eagerly support the dollar. The European Central Bank, which actively pursues employment policies, manages to avoid the influx of U.S. dollars by keeping interest rates very low and liquidity plentiful. According to some estimates, the quantity of money in euro countries, since 2000, has increased some 25 percent faster than the gross product. In the United States, it has grown some 10 percent, and in Japan by 15 percent. The European Central Bank even surpassed the Bank of Japan, which is inflating its currency in order to counter powerful deflationary forces. In short, euro liquidity is plentiful and interest rates, seen historically, are exceptionally low.

As the U.S.-Asian imbalances continue to mount, the forces of readjustment are gaining strength. There are indications that the imbalances are correcting slowly and in an orderly fashion. Most governments agree that greater flexibility of the exchange rates, especially of the Asian currencies, is an orderly step toward the correction of the global imbalances. But most governments cling to their old policies. The interest rate differences are closing slowly, which causes more and more investors to shun the dollar risk. Moreover, the American real estate market has cooled off significantly without dramatic crashes. The boom, according to Fed Chairman Ben Bernanke, has given way in an orderly and moderate fashion. But there cannot be any doubt that the decline in the housing market will be felt throughout the economy in months to come.

Some Americans will have to curtail their spending which is bound to slow down the economy. Will it drag the world economy with it? The rate of expansion in many Asian countries undoubtedly will decline, but by less than pessimists predict. Most economic expansion in China, India, and other developing countries in recent years has been driven by domestic demand and supply. Yet we must not underestimate the weighty and consequential role played by the United States in world financial markets. A huge debt casts a shadow on any market; the rapidly growing international debt of the United States is clouding the world economy. It cannot grow perpetually; it will be settled sooner or later either in an orderly and upright fashion or in financial crisis and economic recession.

The finale of the scenario may be played by the Federal Reserve System. It may seek to reassure and pacify numerous Asian creditors by maintaining high market rates of interest or at least approximate them, or cater to the notions and wishes of most legislators and their constituents who usually favor monetary stimulation. Sooner or later Federal Reserve governors will have to choose between economic consideration or political preference. Their choice will determine the future of the U. S. dollar.

Read more...

The Banished Voices of Muslim Women

The burden of liberation rests on the shoulders of the Muslim woman herself, not of those who cry crocodile tears over her.

By Soumaya Ghannoushi
November 10, 2006

I had intended to continue on the subject of the dangers of certain forms of secularism this week, particularly since it generated a stream of comments, some of which appeared to miss the point of the article entirely. But as I sit at my desk my thoughts seem occupied with a different topic altogether.

Whatever I do these days, I seem unable to shake off the scenes of the women confronting the Israeli army unarmed in the occupied Palestinian town of Beit Hanoun. I do not know what it is about them that intrigues me so much, and keeps their images engraved in my memory. Perhaps it is the thought of women defying the soldiers of the fourth largest army in the world unarmed, perhaps it is the fascinating collective power these women exuded, or the poignant imbalance of their situation. Although the soldiers had the upper hand in material terms, with their sophisticated armor and deadly weaponry, it was the women who won the moral case.

We have grown used to reading of the plight of the wretched Muslim woman living in societies that crush their will, trample over their rights and strip them of their freedom. Every day new voices join themselves to the endless lament, pleading with the West to intervene and liberate Islam's "caged virgins". But on the woman crushed beneath tanks in Baghdad, dying at checkpoints in Qalandia, or buried beneath the rubble of a shelter in Qana, these voices remain silent. The woman gunned down by a soldier is of no interest to them, if she happens to find herself in Palestine, Iraq, or Lebanon. She simply is not relevant to the "liberation agenda".

Perhaps the women of Jenin, Falluja, or Tyre are not photogenic enough for them. Their photos will never adorn the front pages of newspapers and magazines, unlike the girls of the much applauded "cedar revolution" with their tight designer jeans, sunglasses, and expensive hairdos. It was interesting to hear journalists report on the Beit Hanoun protest where two women were murdered in cold blood and many more injured. With all the talk of "robes", "abayas" and "scarves" one would have thought the reporters were commenting on a fashion show, as though these women had defied the Israeli curfew for the sole purpose of exhibiting their costumes. With all the emphasis on the women's dress the reporters stressed their difference, dehumanizing them, obscuring their womanhood, reducing them to a piece of cloth. It was as though what these women wore lent a measure of justification to the soldiers' crimes against them.

"Don't be a victim if in your reflection we do not see ourselves, but a distant, strange world, we neither understand, nor wish to understand".

The women liberation warriors are dumbstruck when the oppressor is not the classical culprit: the tyrant of One Thousand and One Nights and old Arab tales, but a whole occupation army with its soldiers, guns, tanks and warplanes. Two cases before us divest the discourse of Muslim women's emancipation of any credibility. The first is that of my friend, the Turkish MP Merve Kavakci, a university lecturer who was elected to the Turkish parliament in April 18th 1999. On May 2nd when she entered parliament for the oath-taking ceremony, she walked into a storm, facing the taunts of hundreds of men demanding her expulsion. Not only was Kavakci expelled from parliament, she was stripped of her Turkish citizenship, all because she chose to wear a headscarf. She is one of thousands of women: university graduates, doctors, engineers and teachers denied their civil and political rights for simply choosing a type of dress which their governments disapprove of.

The other is Jameela al-Shanti, elected member of the Palestinian Legislative Council, who related her poignant story in the Guardian yesterday, giving us a small glimpse of the tragedy of living under occupation as a woman. Her home was bombed, many of her friends and relatives killed and injured, but as she herself put it, "I have yet to hear western condemnation that I, an elected MP, have had my home demolished and relatives killed by Israel's bombs. When the bodies of my friends and colleagues were torn apart there was not one word from those who claim to be defenders of women's rights on Capitol Hill and in 10 Downing Street".

Kavakci and al-Shanti's fault is twofold. They fit neither the much-cherished stereotype of the oppressed Muslim woman, Taliban style, nor the western model conceived as the sole path to women's liberation. They form part of a simply non-existing category. For if you are a Muslim woman, you can either be the victim of a suffocating oppressive patriarchal society which dictates everything you do, including what you should wear and whom you should marry, or a woman who has turned her back on all that is "Islamic". If you are the former, then await our benevolent intervention to free you of your bondage and break your chains and shackles. If the latter, expect to be celebrated and to have your photos decorate glossy magazines from London to Paris, Amsterdam to Washington, Hirsi style. You are saying what we need said, fighting our battles for us, without risking the charge of Islamophobia and racism. You are the liberated one worthy of liberating her co-religionists.

What is ironic is that vast numbers of Muslim women today fit neither of these categories. Visit any university in Cairo, Kuala Lumpur, Damascus, or Jakarta and you will see the Islamic head cover everywhere, even in states that ban the practice with the text of the law and the force of the police, like Turkey and Tunisia. These very same institutions had until recently stood on the vanguard of the production of the Western feminist model.

My own mother attended one of these universities in the early 1970s. She wore neither my scarf, nor my long skirts. Her mother before her was barely literate and hardly crossed the doors of her home. Today, both my mother and I have moved away from the category of my grandmother and the Parisian woman all educated Arab females aspired to emulate through much of the 20th century. The category which would accommodate us, but remains missing, would have to be complex, neither traditionally Islamic, nor modernized along western lines. In its complexity, it would reflect the multiple forms of modernity and Islamicity at once.

The roads to modernization, Islamization, and liberation are not one but many. The world is vaster than London and Paris.

When faced with the rhetoric of Muslim women's emancipation we would do well to scratch beneath its outer crust in search of what lies underneath. The liberation of Muslim women, just like the democratization and reform of the "wider Middle East", is often used as a vehicle of justification and legitimization of unjustifiable and illegitimate interests and interventions. Muslim women, just like their sisters in the third world, in Africa, or Asia, suffer from manifold problems, under-educated, impoverished, under-represented, and discriminated against. But they can be sure that neither Blair, Bush, nor their many mouthpieces are losing any sleep over their hard lot, or over the tragedies of their sisters in Palestine, Iraq, Afghanistan, or Lebanon.

The burden of liberation rests on the shoulders of the Muslim woman herself. It is she who must define her own direction and chart her own destiny, not those who cry crocodile tears over her.

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Drug Raid Gone Wrong

By David Hunt
November 05, 2006

They say the woman slain by Nassau cops complained about drug dealing outside her home in Amelia Island.

At the end of a dead-end dirt road in this quiet oceanside community, wind flutters through the leaves of trees standing so close they could have seen everything that happened.

Cheryl Ann Stillwell spent her final days here in solitude, but not in peace.

By the time narcotics investigators broke down her front door and shot her to death, the 41-year-old computer engineer was out of work, nursing a painful disability and growing paranoid of the neighborhood.

She told family that she watched drug deals through her window and wanted them to stop. She set up surveillance and security equipment, even propping a couch behind the front door to keep it closed if someone broke the lock. For protection, she offered to rent her family's brick house next door at a discount to police officers, but found no takers.

In the end, it was a drug raid that killed her.

Dressed in tactical garb and armed with submachine guns, Nassau County detectives, assisted by federal agents, carried out a search warrant at her home early Dec. 22, believing it to contain a stash of prescription narcotics that someone there was selling illegally.

"Why did they do it the way they did it?" asked Anna D. Renshaw, Stillwell's mother. "If she had a cocaine factory or a crack factory, you could understand it, but she didn't have anything like that."

Authorities have their side of the story, backed by a Florida Department of Law Enforcement investigation determining no abuse of deadly force. Officers say they knocked and announced themselves as police, but Stillwell took aim with a loaded handgun and Nassau County detective Dallas Palecek had to shoot to protect himself and the others.

Stillwell took her story to the grave, leaving her family to wonder in disbelief.

Two pills?
A search warrant application dated Dec. 14 states a drug informant bought Oxycontin from an "unknown white female" at the white cottage on Midway Road where Stillwell lived. It doesn't list a price or volume of drugs.

Stillwell's father had given her the house. She meant to fix it up, but an accident at work left her unable to do much of anything. She was prescribed Oxycontin for pain. Family members refuse to believe that her prescription made her a drug dealer and have developed theories as to how the house became a target of an investigation.

"It was two pills she gave to somebody," said J. Doyle Wright, Stillwell's brother. "Somebody told her that they couldn't get their prescription filled for a couple of days and, when they did, they'd give the pills back to her."

The drug informant used in the investigation has not come forward to say whose version of the transaction is true.

Wright said he believes Palecek, who fired the burst of four bullets that killed Stillwell, was just doing his job. He blames his sister's death on a poor chain-of-command decision.

"They knew she was protective and they knew she had a gun, but someone in the Sheriff's Office said, 'OK, send in the SWAT team and shoot to kill.' ... You give me a gun and tell me to kick somebody's door in and I'm going to be ready to shoot," he said. "Whoever it was that said, 'This is the way you do this' - that's who I want to talk to."

The search
Sheriff Tommy Seagraves said Stillwell's death was a tragic consequence in a dangerous line of work: drug policing. Her house was among several in an unrelated number of searches that morning.

"I didn't want to see this happen, but I didn't want to see my officers get shot, either. That lady pointed a loaded gun at them," Seagraves said. "I'm a human being. I don't want anybody to lose their life, but at the same time, we had a job to do."

A search warrant inventory states officers found pill bottles and blister packs but did not specify whether actual drugs were found. Seagraves said drugs were found but the family believes anything seized was not illegal.

"It's legal for her to have Oxycontin, but it's illegal for her to sell it," Seagraves said.

The shooting
Four bullets from Palecek's UMP-40 struck Stillwell in the right leg, chest and face. She was pronounced dead at 8:45 a.m. at Shands Jacksonville hospital.

Initially, Seagraves said Stillwell fired first. The state probe into the incident determined that her gun went off after she was shot. Based on testimony given to state investigators, Palecek fired when Stillwell's finger twitched on her 9mm's trigger.

State Attorney Harry Shorstein sent a letter to Seagraves April 26 saying Palecek would not face criminal charges.

"A law enforcement officer may use deadly force when he reasonably believes the force is necessary to prevent imminent death or great bodily harm to himself or others," the letter read.

A memo from Assistant State Attorney Granville C. Burgess dated March 14 said there was no basis for prosecution but questions the tactics of the raid.

"As far as this team knew they were executing a search warrant on a single white female with no violent history, who had sold one time a minor amount of drugs," Burgess' memo said. "If they had had background information I am sure they would have approached it differently."

Seagraves points back to the search warrant application, which said an "unknown white female" sold the drugs. He said there is no law determining how a search warrant is carried out and that his department has not crafted any policies in response to the shooting.

"We were searching the house, not serving an arrest warrant," Seagraves said. "We didn't know what we were dealing with."

Burgess' memo continues: "I do question, given the lighting and distance, how detective Palecek saw this finger movement."

After several weeks of administrative leave, Palecek returned to work. An attempt to contact him was unsuccessful.

Final days
According to investigative documents, Stillwell had brandished her gun before. She pulled it when a woman tried to serve foreclosure papers days before the raid. In 2003, she was arrested for threatening a TV technician at gunpoint.

"I knew the woman, not real well. I talked to her a couple of times. She was real protective of her property," said neighbor Phil Wentz. "She seemed like a really nice woman. She just didn't want anyone coming in and out of there."

In the last conversation Stillwell had with her father, she told him about the drug activity outside. Wentz, who's lived there for nearly four years, acknowledged a problem that has since gone away. Seagraves said he does not recall Stillwell calling the police for help, as she had told her father she did.

"The last time I spoke to her, she told me what was going on and I said: 'Cheryl, stay out of it. You're going to get hurt,'" Harold Stillwell said. He and Wright suspect her death was not a coincidence, but offer no supportive evidence.

"She didn't deserve what happened to her," Wright said. "She must have had something on someone."

"I think that's ludicrous," Seagraves said. "We're out here enforcing the law."

Aftermath
The family has vowed to sue. Fernandina Beach attorney Dan McCranie gave county officials notice in February of the impending civil action, but so far nothing has been filed.

Months ago, the family circulated a petition calling the incident the "home invasion of a handicapped woman." Roughly 800 people signed it.

"We were trying to do anything we could to get it from being swept under the rug," Renshaw said. "All we care about is stopping this from happening to somebody else."

Outside Renshaw's Jacksonville home, Stillwell's yellow Nissan truck sits in the driveway. Her orphaned Doberman, Nova, barks next door.

"I don't even look out my window anymore," Renshaw, 69, said. "I don't want to know what's going on. It's a shame at my age to be afraid of a policeman."

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