Category Archives: Wall Street

A Public Bank for Los Angeles? City Council Puts It to the Voters

California legislators exploring the public bank option may be breaking not just from Wall Street but from the Federal Reserve.

Voters in Los Angeles will be the first in the country to weigh in on a public banking mandate, after the City Council agreed on June 29th to put a measure on the November ballot that would allow the city to form its own bank. The charter for the nation’s second-largest city currently prohibits the creation of industrial or commercial enterprises by the city without voter approval. The measure, introduced by City Council President Herb Wesson, would allow the city to create a public bank, although state and federal law hurdles would still need to be cleared.

The bank is expected to save the city millions, if not billions, of dollars in Wall Street fees and interest paid to bondholders, while injecting new money into the local economy, generating jobs and expanding the tax base. It could respond to the needs of its residents by reinvesting in low-income housing, critical infrastructure projects, and clean energy, as well as serving as a depository for the cannabis industry.

The push for a publicly-owned bank comes amid ongoing concerns involving the massive amounts of cash generated by the cannabis business, which was legalized by Proposition 64 in 2016. Wesson has said that cannabis has “kind of percolated to the top” of the public bank push, “but it’s not what’s driving” it, citing affordable housing and other key issues; and that a public bank should be pursued even if it cannot be used by the cannabis industry. However, the prospect of millions of dollars in tax revenue is an obvious draw. Los Angeles is the largest cannabis market in the state, with Mayor Eric Garcetti estimating that it would bring in $30 million in taxes for the city.

Bypassing the Fed

State Board of Equalization Member Fiona Ma, who is running for state treasurer, says California’s homegrown $8-20 billion cannabis industry is still operating mostly in cash almost 2 years after state legalization, with the majority of businesses operating in the black market without paying taxes. This is in large part because federal law denies them access to the banking system, forcing them to deal only in cash and causing logistical nightmares when paying taxes and transferring money.

Cannabis is still a forbidden Schedule 1 drug under federal law, and the Federal Reserve has refused to give a master account to banks taking cannabis cash. Without a master account, they cannot access Fedwire transfer services, essentially shutting them out of the banking business.

In a surprise move in early June, President Donald Trump announced that he “probably will end up supporting” legislation to let states set their own cannabis policy. But Ma says that while that is good news, California cannot wait on the federal government. She and State Sen. Bob Hertzberg (D-Los Angeles) have brought Senate Bill 930, which would allow state-chartered banks and financial institutions to apply for a special cannabis banking license to accept clients, after a rigorous process that follows regulations from the US Treasury Department. The bill cleared a major legislative hurdle on May 30th when it passed on the Senate Floor.

SB 930 focuses on California state-chartered banks, which unlike federally-chartered banks can operate under a closed loop system with private deposit insurance. As Ma explained in a May 17 article in The Sacramento Bee:

There are two types of banks – those with federal charters, and banks with California charters. Because cannabis is still considered a Schedule 1 narcotic, we cannot touch federal banking wires. We want state-chartered banks that are protected, regulated and certified under California law, and not required to be under the FDIC.

State income taxes, sales taxes, unemployment, workers’ compensation and property taxes could all be paid through a closed-loop system that takes in revenue from the cannabis industry, but is apart from the federal banking system. . . . Cannabis businesses could be part of a cashless system similar to Apple Pay, and their money would be insured by a state-licensed institution.

That is a pretty revolutionary idea – a closed-loop California banking system that is independent of the Federal Reserve and the federal system. SB 930 would bypass the Feds only for cannabis cash, and the bill strictly limits what the checks issued by these “pot banks” can be used for. But the prospects it opens up are interesting. California is now the fifth largest economy in the world, with 39 million people. It has the resources for its own cashless “CalPay” or CalCoin” system that could bypass the federal system altogether.

The Bank of North Dakota, currently the nation’s only state-owned depository bank, has been called a “mini-Fed” for that state. The Bank of North Dakota partners with local banks to make below-market loans for community purposes, including 2 percent loans for local infrastructure, while at the same time turning a tidy profit for the state. In 2017, it recorded its 14th consecutive year of record profits, with $145.3 million in net earnings and a return on the state’s investment of 17 percent. California, with more than 50 times North Dakota’s population, could use its own mini-Fed as well.

Growing Support for Public Banks

It is significant that the proposal for a closed-loop California system is not coming from academics without political clout. Fiona Ma is slated to become state treasurer, having won the primary election in June by a landslide; and the current state treasurer John Chiang has been exploring the possibility of a public bank that could take cannabis cash for over a year. Lt. Gov. Gavin Newsom, the front runner for governor, has also called for the creation of a public bank. These are not armchair theoreticians but the people who make political decisions for the state, and they have substantial popular support.

Public bank advocacy groups from cities across California have joined to form the California Public Banking Alliance, a coalition to advance legislation that would facilitate the formation of municipal banks statewide under a special state charter. A press release by Public Bank Los Angeles, one of its founding advocacy groups, notes that 15 pieces of legislation for public banks are being explored across the nation through municipal committees and state legislators, with over three dozen public banking movements building in cities and states across the country. San Francisco has created a 16-person Municipal Bank Feasibility Task Force; Seattle and Washington DC have separately earmarked $100,000 for public banking feasibility studies; and Washington State legislators have added nearly a half million dollars to their budget to produce a business plan for a public depository bank. New Jersey state legislators, with the backing of Governor Phil Murphy, have introduced a bill to form a state-owned bank; and GOP and Democratic lawmakers in Michigan have filed a bipartisan bill to create one in that state.

Cities and states are seeking ways to better leverage taxpayer dollars and reinvest them in the needs of local communities. Public banking serves that purpose, providing local determination and the opportunity for socially and environmentally responsible lending and investments. The City Council of Los Angeles is now taking it to the voters; and where California goes, the nation may well follow.

• A version of this article first appeared in Truthdig.

The Underworld of Banksters

The financial industry is but one of many industries in the modern world. Besides whatever their stated purposes may be, every one of their modus operandi can be “unmasked” to reveal some degree and form of wrongdoing and harm done, as I did once in a very cursory way.1

One of those industries, the financial industry, is comprised of numerous sectors such as the insurance industry, for instance. I have written about how it along with its government ally are financially soaking the public.2 This present article burrows into another sector, what I call the industry’s “underworld of banksters.” A bankster is a bank or banker that relies on illegal or unethical wrongdoing in their financial dealings. The wrongdoing to be found in their underworld is monumental and incalculable in size and harm done.

Hijacking a Public Domain

Permit me to issue and control a nation’s money and I care not who makes the laws.

— Mayer Amschel Rothschild3

Mayer Amschel Rothschild was a German banker and the “founding father of international finance” that grew into the Rothschild banking dynasty that still exists today in full force, with ownership or control of banks in over 150 countries.4 In 2005 he was ranked seventh on the Forbes’ magazine list of “The Twenty Most Influential Businessmen of All Time.”5

Forbes, naturally, did not characterize him as a bankster of the financial underworld, but we can judge whether that is so just from the above quote. In its first clause he says he would like to privatize what should be in the public domain, namely, the exchange of money for goods and services, an exchange essential to any society’s existence. In its second clause he is saying exactly what would be expected of a bankster.

Bankrolling Wars

All wars are banksters’ wars!

The Rothschild banking dynasty has bankrolled “war operations for the past several centuries.”6  And they bankrolled both sides!7  And why not? Why would they care so long as they profited from the bloodshed? Mayer Rothschild’s wife reportedly quipped on her deathbed “If my sons did not want wars, there would be none.”8 Such was the power of her five sons sent by their father to establish banks in five countries. I don’t think there is any evidence to show that they did not want wars.

The banksters do not wait for wars to just happen, they help get them started and then bankroll them for munificent profits. For instance, President Woodrow Wilson promised to keep the U.S. out of WWI, but the Morgan Bank, then the most powerful bank, nudged him into declaring war and then promptly bankrolled over 75 percent of the financing for the allied forces.9  Behind US involvement in more recent wars was the banksters’ intention of enfolding all countries into a Western, private central banking powerhouse.10

Woodrow Wilson was hardly the only captive U.S. president. A knowledgeable insider once examined archives of U.S. presidents for over a century and discovered that banksters were “in constant communication with the White House — not just about financial and economic policy, and by extension trade policy, but also about aspects of World War I, or World War II, or the Cold War.”10 U.S. presidents obviously listen when the banksters come calling!

Besides its full war operations, declared or undeclared, the U.S. government officially approves millions of dollars to fund terrorist groups.11 It should come as no surprise, therefore, that the banksters unofficially milk the fund. Successfully suing them on behalf of families of U.S. military members slain by the funded terrorists seems to be an insurmountable hurdle, especially when the banksters being sued were a conduit to other banks that did the funding. But indirect funding should be irrelevant, as one of the lawyers who filed the lawsuit observed; “Does it matter whether a particular bank was the physical conduit of the transfers to the terror apparatus, or is it enough that they were in a conspiracy which made that possible, and that they were, as a legal matter, deliberately indifferent to that result?”12  Well, Mr. Lawyer, you are dealing with the banksters, whether first hand or second hand.

Banksters are also profiting from and preparing for the ultimate war, a nuclear blowout. PAX recently issued a report on its findings from January 2014 through October 2017 that showed “329 banks, insurance companies, pension funds and asset managers from 24 countries that invest significantly in the top 20 nuclear weapon producers.”13  If blowback gets the banksters nuked that would be poetic justice, but it is not something to wish for since the fallout would engulf everyone else as well.

Arranging Assassinations

Befitting Mafia hit men, banksters have been suspected of arranging the assassinations of several U.S. presidents, a member of Congress and a Justice, all of whom dared defy the banksters: Andrew Jackson (attempt failed), Zaccary Taylor, James Buchannan (survived arsenic poisoning), Abraham Lincoln, James Garfield, William McKinley, Louis T. McFadden (a member of the House of Representatives in the twenties and thirties), Justice Martin V. Mahoney, and John F. Kennedy.14

Banksters are cunning enough to arrange for perfect murders, ones that will never be solved in a court of law. Each of the assassinated had with their policy decisions angered the banksters, a strong enough reason to suspect their complicity in the murders. In each case the banksters undoubtedly had foils with their own grievances against their targets do the assassinating. This account obviously amounts to conspiracy theorizing, yet there may be some truth to it. For instance, one author claims in his book that “persuasive evidence suggested that Lincoln’s assassin, John Wilkes Booth, had been hired for the job by Judah Benjamin, Treasurer of the Confederacy. Judah Benjamin was a close associate of Benjamin Disraeli (1804-1881), British Prime Minister and an intimate of the London Rothschilds.15  As time rolls on and with more digging the theory may start looking more like reality.

Bankrupting America

When America Suffers, the Banksters Thrive

There have been three major economic calamities in America’s history. The first and third were geographically widespread in scope. The first is known as the Great Depression that occurred from 1929 to 1939. The third that started around 2008 and has never ended is generally referred to as The Second Great Depression, although I named it Economic Katrina after the second, a localized calamity, Hurricane Katrina, that devastated the New Orleans area in 2005.16 The banksters, of course, were behind all three of these calamities.

The Great Depression

Poor Americans were devastated by this economic meltdown. Unemployment soared. Home foreclosures soared. Homelessness soared. The suicide rate soared. Repossessions soared. I was a little boy in the second half of this meltdown and recall how my parents struggled to make ends meet. Since my father held onto his job, my mother’s job was given to someone without a job. Yet, as a lower middle-class family, we fared much better than did millions of Americans.

So too, needless to say, did the wealthy, and that included, of course, the banksters, not to be confused with the thousands of small bankers whose banks folded. The mysteriously poisoned Congressman Louis McFadden had contended shortly before his death that the Great Depression “was no accident. It was a carefully contrived occurrence. The international bankers sought to bring about a condition of despair, so they might emerge as rulers of us all.”17

Hurricane Katrina

Hurricane Katrina was reportedly the costliest natural disaster to hit America. To Naomi Klein, author of The Shock Doctrine, hurricane Katrina was an example of how commercial interests such as the banksters swoop down in an “orchestrated raid” to capitalize on new market opportunities.18 The banksters themselves obviously window dress their role in the disaster, as exemplified in this remark by a spokesperson for one of the bank members of the Federal Reserve Board, which is a citadel for the really big banksters; “resourceful banks have designed creative ways to resume business, incorporating “flexibility” and “customization” into their vocabulary, engaging in recovery area investment projects and forming alliances with community partners.”19  That quote is sheer PR. No bankster, of course, other than anyone like a Mayer Rothschild, would boast about turning any disasters to others into bonanzas for themselves.

The Second Great Depression

America has never recovered from this third calamity that in 2008 started sweeping away main street and keeping the banksters and Wall Street high and dry, for the most part through unconscionable and astronomical government bailouts. After doing extensive research on the matter, I have concluded that there is one single, pivotal event that triggered this economic calamity, and I see that at least one Wall Street insider agrees with me.20 That event was the repeal of the Glass-Steagall Act that had prevented banks from operating both regular commercial loans and investments. The banksters gradually were able through lobbying and arm twisting to puncture some loopholes into the law, and then in 1994 the Act was replaced by one that allowed a bank to do both forms of business. The new law led to the creation of megabanks, but because they got greedy and careless with their selling of securities they suffered a financial setback of their own making but still had enough influence to get bailed out by government. It was simply a quid pro deal. One dirty hand washes the other. Or Napoleon Bonaparte would have put it differently; “When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes.”21

A Line Up of the Banksters

(a) Bank for International Settlement

Before doing the research for this article I had never heard of BIS. Now I know it is the most powerful private central bank in the world with the avowed aim of coordinating and controlling all monetary activities in the industrialized world and indebting it to the International Monetary Fund (a member of the Unholy Trinity to be discussed shortly). It was established in 1930 by bankers and diplomats of Europe and the United States to collect and disburse Germany’s World War I reparation payments. In WWII the BIS was used to launder money for the Nazis.22  As you can see, the BIS is not a wholesome bank to say the least.

(b) The Unholy Trinity

This well-deserved nickname refers to the International Monetary Fund (IMF), the World Bank (WB), and the World Trade Organization (WTO).23  They became the primary enabler of the globalization of the world’s money.

The trios’ purpose ostensibly from the beginning has been to reduce poverty and to develop the economies of Third World countries. In reality the aim of its work has been totally different, very “unholy.” Huge amounts of money masquerading as developmental loans and contingent on the currency devaluation and paring of the borrowing country’s social programs are siphoned off to huge, transnational corporations, many of which are U.S. firms, and the pockets of the governing and power elite of the country. The country goes further into debt and becomes even more vulnerable to being further exploited, including being subjected to sham debt relief programs.

No matter where on the globe the exploitation takes place there is a similar pattern of corporate/bankster behavior involved that includes such despicable, inhumane practices as relying on militaries and militias to purchase commodities made by forced labor; using armed groups to protect corporate assets; supplying arms to rebel and government forces; actually participating in military actions; engaging in smuggling, money laundering, and illegal currency transactions; and sweat-shop production of goods.24

(c) The Federal Reserve Board

The Fed is America’s banksters’ subordinate counterpart to the BIS and the Unholy Trinity.

A cabal of banksters got together in 1913 at the idyllic Jekyll Island resort off the coast of Georgia (where my family has stayed several times, not knowing we may have slept in banksters’ bedrooms). They coyly added the adjective “Federal” to disguise the intent, since twice before efforts to establish similar controlling banks had failed.17

As you may know, the Fed is made up of 12 branches around the country. All 12 and the headquarters are owned by 10 mega banks, four of which are headquartered in the U.S. As you might suspect, two of the owners are Rothschild banks, one in London and one in Berlin. About 100 very powerful individuals own those banks and thus also own the Fed. It is, therefore, no more a “Federal” agency of the government than is “Federal” Express. Being a private entity, one would expect the government would tax it. Not so, the Fed only pays property tax.17

Remember my including U. S. Congress Representative Louis T. McFadden as one of the likely victims of an arranged assassination? At the time he was Chairman of the Committee on Banking and Currency. Here is what he said that angered the banksters; “The Federal Reserve Board has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. Our people’s money, to the tune of $1,200,000,000, has within the last few months been shipped abroad to redeem Federal Reserve Notes and to pay other gambling debts of the traitorous Federal Reserve Board and the Federal Reserve Banks.”17  Today’s Fed is no less of an abominable bankster.

(d) Mega Banksters at Home

These mega banksters in the U.S. have assets totaling trillions of dollars. They didn’t get these assets through socially responsible investments to help the common good. They got them through bankrolling wars, through bankrupting the U.S. economy with fraudulent subprime securities that plummeted the U.S. into its Second Great Depression, and through all sorts of other ways to fleece the public out of its money. Put simply, these mega banksters are criminals on the loose throughout the country.

The Medium

Bad Capitalism

People, banksters included, do not depend only on themselves to go from birth to death. They must also depend on the circumstances and situations they encounter and sometimes help create. These circumstances and situations are the medium of life.  Bad capitalism is the banksters’ medium. Without it there would be no underworld of banksters.

Adam Smith, the putative “father of capitalism,” was a moral philosopher. He understood the importance of morality and the difference between good and bad capitalism and thought the emerging corporations of his time posed threats emanating from their unlimited life span; unlimited size; unlimited power; and unlimited license.25  How prescient he was!

I have written copiously about good and bad capitalism and have presented a plethora of my own as well as others’ proposals to turn bad capitalism into good capitalism.26 They have all come to naught. The banksters would guffaw if they read my work.

Public Banking to the Rescue?

Since the banksters made America’s public money private it stands to reason that a straightforward solution to ridding America of the banksters or at least curtailing them would be to establish a network of public banks throughout America. That is precisely what Ellen Brown, President and Chair of the Public Banking Institute is trying to accomplish. Through her stature and persuasive skills, she managed to get published in the OpEd section of the establishment paper, New York Times, no less, a piece promoting public banking.27 Her efforts are quite commendable and worth following.

Two additional strategies I should think would be to abolish the Fed and replace it with a truly Federal Reserve of Public Banks, and to prosecute and jail banksters instead of looking the other way or giving them token fines. Doing all this would take a herculean political effort, and I don’t expect it will ever happen.

Conclusion

A two-sentence conclusion ought to be enough. One, the banksters control most of the world’s money and will stop nothing short of fueling wars and creating economic havoc to keep growing their money and control. Two, commercializing peace or commercializing war — never the first, daily routine the second.

Acknowledgments

Wrongdoing is like mushrooms, thriving in the dark. The Fed shrouds itself in secrecy. In 2012, the Fed attempted to rebuff a Freedom of Information Lawsuit by Bloomberg News claiming that as a private banking corporation and not actually a part of the government, the Freedom of Information Act did not apply to the “trade secret” operations of the Fed.17

It is basically through the alternative media that we learn about the Fed’s secret dealings and its adverse impact on society at large. It was an article from the alternative media, for example, that told us the Fed is ruining our economic future because it caters to itself and the rest of the banksters.28  People drawn to the alternative media should rightly be fed up with the Fed.

As the author of this article who relied so heavily on one individual’s trailblazing efforts to dig up the facts that the government withholds, I must acknowledge Michael Rivero, who dominates my list of footnotes. He is my Internet friend of yesteryear. Without his efforts I could not have written this article. It was his quote, “Behind all wars are bankers” that I cited in one of my books. It was only after rereading one of my book reviews about corporate gangs, which ironically had little to say about banking, that I conceived the opprobrious “banksters.”29

  1. Brumback, GB. “Corporate America Unmasked“, The Greanville Post, January 3; OpEdNews, January 4; Dissident Voice, January 4; Uncommon Thought Journal, January 7, 2018
  2. Brumback, GB. Soaking the Public: The Insurance Industry and Captive Government, OpEdNews, July 11; Dissident Voice, July 12; 2016.
  3. Lendman, S. Banker Occupation: Waging Financial War on Humanity, Clarity Press, Inc., 2012.
  4. See: Complete List of BANKS Owned or Controlled by the Rothschild Family.
  5. Noer, M. “The Twenty Most Influential Businessmen of All Time”, Forbes, July 29, 2005.
  6. Dmitry, B. “Rothschild Wealth Is Now Greater Than 75% Of World Population Combined,” January 21, 2017.
  7. USWGO. The Rothschild Dynasty Funded Both Sides of Every War, USWGO, March 14, 2011.
  8. Collier, A. “Perspective on the World”, March 7, 2014.
  9. Washington Blog. “Bankers are Behind the Wars“, April 18, 2014.
  10. Ibid.
  11. Khabieh, B. “Obama Approves $800m Funding for Terrorist Groups in Syria and Ukraine”, Reuters, November 28, 2015.
  12. Profess, B. & Clifford, S. “Suit Accuses Banks of Role in Financing Terror Attacks”, The New York Times, November 10, 2014.
  13. Beenes, M. & Snyder, S. “Don’t Bank on the Bomb, A Global Report on the Financing of Nuclear Weapons Producers”, PAX, March, 2018.
  14. Rivero, M. “All Wars are Bankers’ Wars“.  See also, pik_artist, “Judge Poisoned After Ruling Bank Forclosure Is Illegal and All Mortgages Are Null and Void, Hub Pages, January 17, 2018.
  15. Engdahl, WF. Gods of Money: Wall Street and the Death of the American Century, 2009.
  16. Brumback, GB. The Devil’s Marriage: Break Up the Corpocracy or Leave Democracy in the Lurch, 2011, pp. 151-152.
  17. Rivero, Op. Cit.
  18. Klein, N. The Shock Doctrine: The Rise of Disaster Capitalism. 2007.
  19. Owens, D. “After the Storm: Banks Respond to Katrina’s Punch”, Federal Reserve Bank of St. Louis, Spring, 2006.
  20. Rickards, J. “Repeal of Glass-Steagall Caused the Financial Crisis”, U.S. News and World Report, August. 27, 2012.
  21. Rivero, OpCit.
  22. Epstein, E.J. “Ruling the World of Money”, Harper’s Magazine, 1983.
  23. Peet, R. Unholy Trinity: The IMF, World Bank and WTO, 2009 (Second Edition).
  24. For more on the Unholy Trinity and the globalization of the world’s economy see John Perkins’ riveting book, Confessions of an Economic Hit Man, 2004, and my review of it in Personnel Psychology, Vol. 59, No. 2-Summer, 2006, Book Review Section, pp. 489-493.
  25. Smith, A. The Wealth of Nations, 1776.
  26. See Brumback, Op. Cit. 2011; and also, Brumback, GB. Corporate Reckoning Ahead, 2015.
  27. Brown, E. “Public Banks Are Essential to Capitalism”, NYTimes Op Ed, October 2, 2013.
  28. Parramore. LS. “How the Federal Reserve is Destroying Your Economic Future”, Alternet, April 16, 2015.
  29. Nace, T. Gangs of America: The Rise of Corporate Power and the Disabling of Democracy, 2003. I reviewed this book in the 2004 Fall Issue of the Book Review Section of Personnel Psychology, pp. 780-783.

A Stock Market Primer in Six Easy Steps

What is the stock market?

  1. It’s not real economic activity—it’s a form of mass hysteria or mass psychosis.
  2. Stock prices reflect a mass-hysteria impression of the worth of a piece of paper you hold—a stock certificate. The worth of that piece of paper is sometimes tethered to some economic reality of some corporation—at least partially—but sometimes not. Often a stock price bears little relation to the economic health of a company, as illustrated in the wildly gyrating stock price-to-earnings ratios through the decades. Hence the stock price is often a matter of caprice, covert manipulation, and/or unfathomable crowd psychology, not necessarily real economic “health” or productivity.

If, say, you are fortunate enough to own a stock that has doubled or tripled in price, this does not mean that you have accrued new wealth—that stock valuation is meaningless as long as you still own the piece of paper (the stock certificate); you realize that wealth only by selling the stock. And if you do cash out—sell the piece of paper—to someone else, you are transferring to another person the hazard of seeing that valuation drop or evaporate—an opportune fobbing off of risk to someone else, a transfer of cash to you, but no real creation of wealth—just the passing on of a piece of paper in exchange for currency. Eventually, down the road, your gain will be someone else’s loss when the music stops playing and the last holder of the piece of paper finds there is no chair for him to land on—the stock market as Ponzi scheme.

If everyone or most people decide to sell their pieces of paper—to take their profits—all at once, then the stock prices tumble, so the idea that everyone can cash out and realize this imaginary wealth equally and universally is a mirage: if everyone tried to access it at once, it would evaporate. Hence the common notion that rising stock prices indicate a general increase in wealth or national prosperity is delusional. A stock crash does not erase billions or trillions in “wealth” overnight, as we are commonly told. There was never any “wealth” there to begin with, in the sense that a stock price rationally or measurably reflects the worth of tangible goods or services; that price is just a mass fever dream, a collective, chaotic, bidding war about the worth of pieces of paper.

  1. The stock market is a swindle. Much of the movement of these equities markets originates in the decisions of large funds or high-speed traders who have access to esoteric information, advanced algorithms, or trading networks from which Joe Trader, playing the market at home on his laptop, is excluded. Hence Joe Trader inevitably gets screwed. The author Michael Lewis draws the veil from this complicated high-tech rigging in a 2014 interview with CBS’s 60 Minutes:

Steve Kroft: What’s the headline here?

Michael Lewis: Stock market’s rigged. The United States stock market, the most iconic market in global capitalism, is rigged.

Steve Kroft: By whom?

Michael Lewis: By a combination of these stock exchanges, the big Wall Street banks and high-frequency traders.

Steve Kroft: Who are the victims?

Michael Lewis: Everybody who has an investment in the stock market. . . .

Steve Kroft: And this is all being done by computers?

Michael Lewis: All being done by computers. It’s too fast to be done by humans. Humans have been completely removed from the marketplace. “Fast” is the operative word. Machines with secret programs are now trading stocks in tiny fractions of a second, way too fast to be seen or recorded on a stock ticker or computer screen. Faster than the market itself. High-frequency traders, big Wall Street firms and stock exchanges have spent billions to gain an advantage of a millisecond for themselves and their customers, just to get a peek at stock market prices and orders a flash before everyone else, along with the opportunity to act on it. . . . The insiders are able to move faster than you. They’re able to see your order and play it against other orders in ways that you don’t understand. They’re able to front run your order.

Steve Kroft: What do you mean front run?

Michael Lewis: Means they’re able to identify your desire to, to buy shares in Microsoft and buy ‘em in front of you and sell ‘em back to you at a higher price. It all happens in infinitesimally small periods of time. There’s speed advantage that the faster traders have is milliseconds, some of it is fractions of milliseconds. But it’s enough for them to identify what you’re gonna do and do it before you do it at your expense.

  1. The MSM commentators on the markets are all industry touts. Their unvarying counsel, under all circumstances, is this: Get into the market. Get in if you’re not in already. Stay in if you’re already in. A plunge is a buying opportunity. A surge is a buying opportunity. A buying opportunity is that which puts a commission in their pockets. A mass exit from the stock market is the end of their livelihood. I don’t know the Latin term for the logical fallacy at work here, but I think the English translation is something like this: bullshit being slung by greedy con artists. These are people with no more conscience or expertise than the barking guy with the Australian accent on the three a.m. informercial raving about a miracle degreaser or stain remover.
  2. This market, more than most, is a big fat bubble, ready to pop. This bubble is a cloistered biosphere of Teslas and beach houses, of con artists, kleptocrats, and financial sorcerers. It is rigorously insulated from the dolorous real economy inhabited by the 99 percent: declining living standards; stagnant real hourly wages; lousy service-industry jobs; debilitating consumer and student debt peonage; soaring medical insurance premiums and deductibles that render many people’s swiss-cheese policies unusable; crumbling cities and infrastructure; climate disasters of biblical proportions; and toxic food, water, and air. This stock-market bubble has been artificially inflated by historically low interest rates (so the suckers have to go into the market to get a return on their money) and Fed “quantitative easing,” a technocratic euphemism for a novel form of welfare for the one percent that has left untold trillions of “liquidity” sloshing around among the financial elites with which to play Monopoly with one another and pad their net worth by buying back shares of their own companies to inflate stock prices. Moreover, this bubble is even more perilous and tenuous than previous ones because the “air” inside is being pumped by unprecedented levels of consumer and institutional debt that will cause a deafening “pop” when some of the key players start to lose their shirts, and suddenly all the Peters start calling in the debts of all the Pauls who can’t pay.
  3. The end game is near. We can console ourselves that these latest innovations in financial prestidigitation and fraud are stretched about as far as they can go. The financial elites are out of three-card monte scams to suck the wealth out of the economy. The heroic productivist heyday of capitalism, celebrated by Marx himself, is over in this country—no more driven visionary builders of railroads, factories, skyscrapers, and highways to a better tomorrow: just endless financial skullduggery and hoarding at the top, and for the rest of us the cold comforts of cell phones, smart televisions, and the endless streams of plastic consumer junk circulating through Amazon and Walmart. What Baudrillard called “the mirror of production” is a prison for the planet earth and every species on it. All that is left for the bipartisan predator class of the United States is scavenging: massive tax breaks for the rich today and tomorrow, perhaps, no more Medicare, no more Social Security, no more public schools—if they have their way, and they probably will. Pop goes the stock market, the illusion of prosperity, the whole unsustainable carbon-poison “economy,” and pop goes the planet and the human race. But look at it this way: it’s a buying opportunity.

How Uncle Sam Launders Marijuana Money

In a blatant example of “do as I say, not as I do,” the US government is profiting handsomely by accepting marijuana cash in the payment of taxes while imposing huge penalties on banks for accepting it as deposits. Onerous reporting requirements are driving small local banks to sell out to Wall Street. Congress needs to harmonize federal with state law.

Thirty states and the District of Columbia currently have laws broadly legalizing marijuana in some form. The herb has been shown to have significant therapeutic value for a wide range of medical conditions, including cancer, Alzheimer’s disease, multiple sclerosis, epilepsy, glaucoma, lung disease, anxiety, muscle spasms, hepatitis C, inflammatory bowel disease, and arthritis pain. The community of Americans who rely on legal medical marijuana was estimated to be 2.6 million people in 2016 and includes a variety of mainstream constituency groups like veterans, senior citizens, cancer survivors, and parents of epileptic children. Unlike patented pharmaceuticals, which are now the leading cause of death from drug overdose, there have been no recorded deaths from marijuana overdose in the US. By comparison, alcohol causes 30,000 deaths annually, and prescription drugs taken as directed are estimated to kill 100,000 Americans per year.

Under federal law, however, marijuana remains a Schedule I Controlled Substance – a “deadly dangerous drug with no medical use and high potential for abuse” – and its possession remains a punishable offense. On the presidential campaign trail, Donald Trump said the issue of marijuana legalization “should be up to the states,” continuing the “hands off” policy established under President Obama. Under the 2013 Cole Memorandum, the Department of Justice said it would not prosecute individuals and companies complying with robust and well-enforced state legalization programs. But on January 4th, Attorney General Jeff Sessions rescinded that memo and gave federal prosecutors the authority to pursue marijuana cases at their own discretion, even in places where the herb is legal under state law. The action has made banks even more afraid to take marijuana cash, which can be prosecuted as illegal “money laundering,” an offense that can incur stiff criminal penalties.

The Government Has “Unclean Hands”

As explained by Dr. Richard Rahn, author of The End of Money and the Struggle for Financial Privacy:

Money laundering is generally understood to be the practice of taking ill-gotten gains and moving them through a sequence of bank accounts so they ultimately look like the profits from legitimate activity. Institutions, individuals, and even governments who are believed to be aiding and abetting the practice of money laundering can be indicted and convicted, even though they may be completely unaware that the money being transferred with their help was of criminal origin.

The law has focused on banks, but all sorts of businesses accept money without asking where it came from or being required to report “suspicious activity.” As Rahm observes, even governments can be indicted and convicted for money laundering. Strictly construed (as Attorney General Sessions insists when interpreting the law), that means the US government itself could be indicted. In fact, the US government is the largest launderer of marijuana cash in the nation. The IRS accepts this tainted money in the payment of taxes, turning it into “clean” money; and it is not an unwitting accomplice to the crime. Estimates are that marijuana business owners across the U.S. will owe $2.8 billion in taxes to the federal government in 2018. The government makes a massive profit off the deal, snatching up to 70 percent of the proceeds of the reporting businesses, as opposed to the more typical rate of 30 percent. It does this by branding marijuana businesses criminal enterprises which are not entitled to deduct their costs when reporting their income. This is not only a clear case of the unequal protection of the laws but is a clear admission by the government that it is knowingly accepting illegal funds. The government is a principal beneficiary of a business the government itself has made illegal.

Under those circumstances, both marijuana businesses and banks should be able to raise the “unclean hands” defense. As summarized in Kendall-Jackson Winery, Ltd. v. Superior Court (1999), 76 Cal.App.4th 970, 978-79:

The defense of unclean hands arises from the maxim, “He who comes into Equity must come with clean hands.” The doctrine demands that a plaintiff act fairly in the matter for which he seeks a remedy. . . . The defense is available in legal as well as equitable actions. . . . The doctrine promotes justice by making a plaintiff answer for his own misconduct in the action. It prevents a wrongdoer from enjoying the fruits of his transgression.

The government is enjoying the fruits of money it considers “dirty.” It has unclean hands, a defense against prosecuting others for the same crime.

Should “Money Laundering” Even Be a Crime?

In an article titled “Why the War on Money Laundering Should Be Aborted,” Dr. Rahn asks whether money laundering should even be a crime. It became a criminal activity in the US only in 1986, and in many countries it still is not a crime. Banks operating in the US must now collect and verify customer-provided information, check names of customers against lists of known or suspected terrorists, determine risk levels posed by customers, and report suspicious persons, organizations and transactions. The reporting requirements are so burdensome and expensive that they have caused many smaller banks to sell out to larger banks or close their doors. According to Dr. Rahn:

[I]t has failed to produce the advertised results and, in fact, has not been cost effective, has resulted in wholesale violations of individual civil liberties (including privacy rights), has violated the rights of sovereign governments and peoples, has created new opportunities for criminal activity, and has actually lessened our ability to reduce crime.

. . . Banks are required to supply the government with not only Currency Transaction Reports but also Suspicious Activity Reports. These reports impose huge regulatory costs on banks and require bank employees to operate as police officers. As a result, the total public and private sector costs greatly exceed $10,000,000 per conviction. This whole effort not only does not make any economic sense, but is clearly incompatible with a free society. The anti-money laundering laws allow almost complete prosecutorial discretion.

One small banker complained that banks have been turned into spies secretly reporting to the federal government. If they fail to comply, they can face stiff enforcement actions, whether or not actual money-laundering crimes are alleged. In 2010, one small New Jersey bank pleaded guilty to conspiracy to violate the Bank Secrecy Act and was fined $5 million for failure to file suspicious-activity and cash-transaction reports. Another small New Jersey bank closed its doors after it was hit with $8 million in fines over its inadequate monitoring policies. The cost of compliance and threat of massive fines for not complying have been major factors in the collapse of the community banking sector. The number of community banks has fallen by 40 percent since 1994 and their share of U.S. banking assets has fallen by more than half, from 41 percent to 18 percent.

“Regulation is killing community banks,” Treasury Secretary Stephen Mnuchin said at his confirmation hearing in January 2017. If the process is not reversed, he warned, we could “end up in a world where we have four big banks in this country.” That would be bad for both jobs and the economy. “I think that we all appreciate the engine of growth is with small and medium-sized businesses,” said Mnuchin. “We’re losing the ability for small and medium-sized banks to make good loans to small and medium-sized businesses in the community, where they understand those credit risks better than anybody else.”

If the goal of the anti-money laundering statutes is to identify and deter criminal activity, strictly enforcing the law could actually backfire in the case of state-legalized marijuana businesses. As noted in a January 9 article in The Daily Beast:

Marijuana businesses have to register and incorporate in states and that puts them on the IRS radar. . . . Sky-high federal taxes on top of state taxes can make it almost impossible to operate a legal business. . . . If the government fails to cut businesses a break, legal marijuana could be sold on the black market to dodge taxes.

On the black market, cash proceeds can be dispersed in a way that avoids banks and makes the money hard either to trace or to tax.

Federal Law Needs to Be Changed

With more than half the states legalizing marijuana for medical purposes, Congress needs to acknowledge the will of the people and remove this natural herb from the Schedule I classification that says it is a deadly dangerous drug with no health benefits. The Tenth Amendment gives the federal government only those powers specifically enumerated in the Constitution, and regulating medical practice is not one of them. Federal courts have held that the federal Controlled Substances Act does not allow the federal government to usurp states’ exclusive rights (pursuant to their inherent police powers) to regulate the practice of medicine.

H.R. 1227, the Ending Federal Marijuana Prohibition Act, sponsored by Virginia Republican Thomas Garrett and 15 cosponsors, would remove marijuana from Schedule I and eliminate federal penalties for anyone engaged in marijuana activity in a state where it is legal. Congress just needs to pass it.

In its zeal for eliminating burdensome, costly and ineffective regulations, the Trump administration might also consider lightening the heavy reporting burden that is killing community banks and the local businesses that have traditionally relied on them for affordable credit. On Tuesday, January 16th, a bipartisan coalition of state attorneys general sent a letter to leaders in Congress requesting advancement of legislation such as the Secure and Fair Enforcement (SAFE) Banking Act to “provide a safe harbor” for banks that provide financial products or services to state-legal marijuana businesses. If the government can accept marijuana money in the payment of taxes, banks should be able to accept it to keep track of it and prevent the crimes associated with storing and transporting large sums of cash.

When Your Bank Fails, Don’t Walk …Run!

So. The US economy is just fine. The post-recession 2010 Dodd-Frank legislation has cured all. Banks have lots of cash. Congress is your friend and that certain-to-pass Tax Cut and Jobs bill will finally allow you, your family and America to… MAGA.

Really?!

“I’m sorry, Sir. We are unable to cash this check,” were the ominous words delivered to me by a fresh-faced, none-too-friendly, Wells Fargo Bank manager. He had just kept me waiting ten minutes while in consultation about my requested transaction. Returning to his cubicle he sat down quickly, now looking at me intently through narrowed eyes.

Three feet away, between us and in front of him, were three forms of my personal identification face up. However, he gazed down glowering at two personal checks also laying before him, written to me by a client and drawn on his bank. Not being a “Wells” customer I had expected a shake-down, hence the multiple forms of ID.

These two checks totalled a seemingly paltry sum of almost US$8,000.00. Not expecting this much difficulty I insisted on a reason, to which he now looked up from considering the two checks and replied, “I’m sorry, but the bank does not have sufficient funds on-hand to cash these checks.”

Really?!

Naturally, like the majority of incorrectly indoctrinated US bank depositors I assumed that, as is traditional with banks, this one would have lots and lots of cash.

Au Contraire.

Unapologetically he informed me that he was “sorry” but he could only cash one of the checks at this time. Both checks were for about the same amount. I inquired if this was a new bank policy and was told that the bank simply did not have enough cash on hand, and, “no”, I could not come back at the end of the day after the bank had received the day’s cash deposits. However, if I went to a larger Wells branch they might be able to handle both checks.

This rather unique news seemed worthy of delving into further, so I declined his opening offer and left with my two onerous withdrawals. Being away from home, I decided to wait and stop by my home town’s main Wells Fargo branch office. For anyone following the factual and very dire condition of the world’s economy and its bank’s magnificent set of past, pending, future – and unpunished – financial crimes, my sojourn into the realm of Kafka would become a very cautionary tale.

Oh, those evil banks! The shadowy corporatist denizens of New York, London, and Brussels, all guilty of a staggering set of every-expanding frauds couched in the beneficent language of greedy short-term materialistic gain. Financial “crimes of the decade,” like the Savings and Loan meltdown, the Enron Collapse, and the Great Recession are nowadays reported almost monthly. With metered US justice amounting only to a monetary fine for the offending criminal bank – usually a small fraction of the money it previously stole, hypothecated, leveraged or manipulated – and with criminal prosecution no longer a possibility, these criminals continue to shovel trillions – not billions – into off-shore, non-tax paying accounts of the already uber-rich. There is never enough.

Just in time for Christmas, Americans received the “Tax Cut and Jobs Bill 2017” that, of course, contains not one word about jobs, but sounds so good to the ignorant who are still transfixed on the false mantra of MAGA.

LIBOR, FOREX, COMEX, which used high-speed program securities trading combined with insider manipulation, were the first serious examples of recent bank frauds. Since the Great Recession magically became the Great Recovery, Wachovia and HSBC banks plead guilty to laundering money for Mexican drug cartels, dictators, and terrorists. Wells Fargo and Bank of America were also guilty of defrauding 10’s of thousands of homeowners of their properties during the “robo-signing” scandal; that was a scandal…until Wells and BA paid the mortdita and all returned to business as usual. Example: In July 2017 it was revealed that more than 800,000 customers who had taken out car loans with Wells Fargo were charged for auto insurance they did not need.  Barely a month later, Wells was forced to disclose that the number of bogus accounts that had been created was actually 3.5 million, a nearly 70 percent increase over the bank’s initial estimate. Why not? When the predictable result will be a small percentage fine … and keep the rest. Now that’s MAGA!

If the individual retail – Mom and Pop – investor actually had a choice of where to put their cash money, then no one with better than a fifth-grade education would put a penny into the major stock markets. However, the goal of the many banking manipulations have had one goal: eliminate financial investment choices to one – stocks.

One choice, Gold and silver, the previous historical champion alternative in preserving one’s wealth, was deliberately eliminated from short-term, private investment. The banks, issued and sold massive amounts of worthless certificate gold and derivative gold (not bullion), and the same in silver, at a current ratio of 272 paper instruments to one measly ounce of real physical gold. All this has been leveraged against real precious metals, and next used to influence the price of gold-down- by selling huge tranches of these ostensibly worthless gold contracts (1 contract=100 paper ounces) within seconds when the spot price of gold begins to rise. The banks have done this so often that gold has not risen to levels it would likely reach without this manipulation. This has driven massive liquidity that would have gone to precious metals towards stocks. This is likely evidenced by the advent of the meteoric rise in the price of BitCoin, one that-like gold- escapes the bank’s control and a super-inflated stock market.

Similarly, thanks to the economic trickery that has been three rounds of Quantitative Easing, the other two conventional options; the bond market and personal bank savings accounts, have been manipulated to also produce a very low rate of return, driving these cash funds to stocks. It is this entire package of criminality – providing no other place for liquidity to go – that has performed as the plot to push a surging world stock market to obscene levels that have no basis in factually-based accounting or economic methods… or history.

Banks Are Ready for the Next Crash – You’re Not!

The banks know the next crash is coming. Like 2007, they have set in motion the next great(est) recession. Predator banks know that most people, thanks to the aforementioned financial control, media omission and an inferior education system, are “stupid,” especially regarding the nuances of financial fraud. As the majority of Americans and Europeans live in the illusion that their financial institutions will protect their savings, they miss their bank’s greedy preparations for the next stock market crash slithering through the halls of their Parliament or Congress. This already completed legislation states in plain English, and the language of endemic corruption, that your bank intends to steal your money directly from your savings account. And…your government will let them do this to you.

30,000 pages make up the Dodd-Frank post-recession legislation, authored by the banks in the aftermath of the Great Recession. The Dodd-Frank legislation was touted as eliminating the massive bail-outs the US gave virtually every ill-defined too big to fail worldwide bank and US corporation in 2008-9. In reality, Dodd-Frank was as much a fraud against Americans as LIBOR or COMEX manipulation, et al.

Title II of the media-acclaimed 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act provides the Federal Deposit Insurance Corporation (FDIC) with new powers and methods to again guarantee – first and foremost – the massively leveraged derivatives trade once this massive leverage plummets as it did with AIG in 2007-09. However, that collapse was singular. The next will include all banking sectors.

The bank’s paid-for politicians made sure a post-crash congress did not regulate derivatives via Dodd-Frank, and thereby encouraged a further increase in this financial casino betting, despite it being the root cause of the original problem. Thanks to Dodd-Frank and its predecessor, the 2005 Bankruptcy Act, Congress made sure these new fraudulent bets on stock market manipulation would surely be paid. But, not to worry; there would be no more “Bail Outs.” Next time, these banks would use their depositors’ savings, including yours. Meet: the “Bail-In.”

Really?!

All Americans recall the massive “Bail-Outs” of 2007-9 and how their corporately controlled Federal Reserve Bank and an equally controlled US Congress threw several trillions of US taxpayer dollars at US banks, dozens of foreign banks, and any corporation with enough political pull to be defined as “Too Big To Fail” (TBTF). In the aftermath a year later, the banks understood that Americans and European citizens had lost enthusiasm for any future government Bail-Out, most preferring instead that any institution suffering self-inflicted financial duress should enjoy the fruits of their crimes next time, via the reality of formal bankruptcy proceedings.

The will or financial safety of the public is, of course, no concern to criminal corporations, and so easily circumvented via congress and the president. So, the banksters have redefined their criminality using two newly defined methods, both rebranded to be far more palatable to the public.

Currently,“Too Big to Fail,” (TBTF) has a very fraudulent and elitist connotation just like, “Bail-Out.” To millions across the world who have lost their homes, pension funds, retirement plans, and dreams, this decade-old moniker for financial oppression and fraud has now been conveniently re-branded. The bailed-out TBTF banks now have a far more magnificent definition: TBTFs are now, “Globally Active, Systemically Important, Financial Institutions” (G-SIFI).

This sounds so much better.

But, “Bail-Out”? No… No. Would you not prefer a “Bail-In”? Not if you know the details.“Bail-Outs,” may have also lost their flavour but in the new world of the G-SIFI, the next one is actually just a “Bail-In,” away.

Yes, Bail-Ins, the new “systemically” correct term for publicly guaranteed bank fraud are already named as such in new national policies and laws, appearing in multiple countries. These finance laws, such as Dodd-Frank and its pending UK and European Union version, make upcoming Bail-Ins legal. These Bail-Ins allow failing G-SIFI banks to legally convert the funds of “unsecured creditors”(that’s you) into bank capital (that’s them). This includes “secured” creditors, like state and local government funds.

Really?!

With this in mind, I entered the main branch of Wells Fargo. The two checks in hand. On the way in I was greeted warmly, one after the other, by three more fresh-faced and eager proteges, all smartly uniformed to match the Wells décor, and who proffered, “Good morning, Sir!,” again, and again… and again. Certainly, these little fish were not in possession of authority enough to cash my mammoth checks, so I asked for bigger game, the Branch Manager.

Thus, I explained my plight to a very lovely lass who predicted she “would be glad to help me.”

“Cheryl,” patiently explained that I had come to the right place and she would be glad to cash both checks. Regarding my previous polite banking experience, she admitted that it was indeed bank policy to have limits on the availability of cash for withdrawals and that different branches had different limits. This was the main branch so my request here was meritorious. Further, she admitted that whatever daily cash coming into the branches in the form of deposits was not available for withdrawal, but was sent from the main branch for daily accounting at a central point common to all area Wells bank branches. Only a prescribed amount of cash was provided with each bank for daily customer cash withdrawals.

Really?!

“A couple of times your current request,” was her cautious response to my question about her branch’s limits on check cashing. Not to be put-off, I asked about a hypothetical US$25,000 check. She admitted this would be beyond her branches authority. “But,” she smiled, “Today, you’ve come to the right place.”

The financial law firm Davis Polk estimates the final length of Dodd-Frank, the single longest bill ever passed by the US government, is over 30,000 pages. Before passage, the six largest banks in the US spent $29.4 million lobbying Congress in 2010 and flooded Capitol Hill with about 3,000 lobbyists prior to Obama predictably signing its final unread version. No US congressman or senator had read it. But, the bank’s congressional minions were told to vote for it. And dutifully they did.

The major cause of the upcoming financial meltdown, as with the pre-2008 conditions, is globally systemic gambling against national economies, called derivatives. Derivatives are sold as a kind of betting insurance for managing fraudulent banking profits and risk. So, why fix systemic banking fraud when the final result allowed these same banks to make even more money in the aftermath of the national and personal financial destruction they originated in the first recession?

Instead, thanks to Dodd-Frank, derivatives suddenly have “super-priority” status in any bankruptcy. The Bank for International Settlements quoted global OTC derivatives at $632 trillion as of December 2012. Naked Capitalism states that $230 trillion in worthless derivatives are on the books of US banks alone. Applied to Dodd-Frank this means that all these bad bank bets on derivatives will be paid-off first… before you may have your savings cash. If there’s actually any cash left once you get to the teller’s counter.

Normally in a capital liquidation or bankruptcy proceeding, secured creditors such as a bank’s personal depositors are paid off first because these are hard assets, not investments, and thus normally have a mandated priority. Under these new “Bail-In” Dodd-Frank mandates, your government has re-prioritized your bank’s exposure and your cash deposit. Derivatives and other similar banking high-risk ventures are now more highly protected than bank depositor’s savings. In the 2013 example of Cyprus, Germany and the ECB also made depositors inferior to other bank holdings leaving depositors with, after many months, a small fraction of their deposits.

And then came Greece.

Selling the lie while using the language of Dodd-Frank, we are told by media whores that banks will not be given taxpayer bailouts next time. True. The preamble to the Dodd-Frank Act claims “to protect the American taxpayer by ending bailouts.” But how, then, to Bail-In the G-SIFIs without another taxpayer Bail-Out? No problem.

Enter the FDIC and another new banking term, “cross-border bank resolution.” As the sole US agency required to pay back depositors who lose savings up to $250,000, FDIC is armed with a paltry US$25 billion war chest to pay depositors. Under Dodd-Frank, the FDIC will be the mechanism to replace deposits lost or squandered by bank fraud. The public, however, has an estimated total US cash deposits of US$7.36 trillion so, once the banks steal your savings, FDIC will be just a little bit short of funds.  How to fix this mathematical shortfall?  With, of course, more of your money via emergency taxes or a massive new round of Quantitative Easing (QE). Either way, by the time this happens your money is long gone. And it gets worse.

Really?!

Say, “Goodbye” to your Savings- Two Greedy Methods

It’s [FDIC] already indicated that they will confiscate [savings] funds….

— US congressman Ron Paul

On December 10, 2012, a joint strategy paper was drafted by the Bank of England (BOE) in conjunction with the Federal Deposit Insurance Corporation (FDIC) titled, “Resolving Globally Active, Systemically Important, Financial Institutions.” Here the plot to steal depositor savings is clearly laid out.

The report’s “Executive Summary” states:

… the authorities in the United States (US) and the United Kingdom (UK) have been working together to develop resolution strategies…These strategies have been designed to enable [financial institutions] to be resolved without threatening financial stability and without putting public funds at risk.

Sounds good until you read the fine print; i.e., whose risk are they actually protecting?

While claiming to protect taxpayers, Title II of Dodd-Frank gives the FDIC an enforcement arm, the Orderly Liquidation Authority (OLA) which is similar to its British counterpart the Prudent Regulation Authority (PRA). Both now have the authority to punish the personal depositors of failing banking institutions by arbitrarily making their savings deposits subordinate – actually tertiary – to bank claims for the replacement value of their derivatives. Before Dodd-Frank savings deposits were legally senior and primary to these same claims in a routine bankruptcy.

With the US banks holding only $7 trillion in personal cash savings deposits compared to $230 trillion is US derivative obligations, FDIC’s $25 billion will not be enough. The creators of Dodd-Frank knew this before it was signed. As John Butler points out in an April 4, 2012, article in Financial Sense:

Do you see the sleight-of-hand at work here? Under the guise of protecting taxpayers, depositors… are to be arbitrary, subordinated… when in fact they are legally senior to those claims…Remember, its stated purpose [Dodd-Frank] is to solve the problem… namely the existence of insolvent TBTF institutions that were “highly leveraged with numerous and dispersed financial operations, extensive off-balance-sheet activities, and opaque financial statements.

Oh, but bank depositors can rest easy in the knowledge that replacing their savings will not come out of their pockets via another bank Bail-Out. Thanks to Dodd-Frank, the first line of defence will allow Congress to instead replace personal savings with a government paid for $7 trillion bail-in to FDIC to “replace” these savings.

But, that’s the good choice.

Worse, Dodd-Frank gives new powers to FDIC and its OLA that allow an even more powerful and draconian resolution: any deposited funds in a bank, from $1 to $250,000 (the FDIC limit), and everything above, can instead be converted to bank stock! FDIC has provisions so this can be done, via OLA, quite literally overnight.

Really?!

An FDIC report released in 2012 ago reads:

An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositor’s cash] into equity [or stock].

Additionally, per April 24, 2012 IMF report, conversion of bank debt to stock is an essential element of Bail-Ins included in Dodd-Frank.

The contribution of new capital will come from debt conversion and/or issuance of new equity, with an elimination or significant dilution of the pre-bail in shareholders. …Some measures might be necessary to reduce the risk of a ‘death spiral’ in share prices.

Really?!

For affected depositors to retrieve the value of what was formerly the depositor’s account balance, the stock must next be sold. When Lehman Brothers failed, unsecured creditors (depositors are now unsecured creditors) got eight cents on the dollar.

This type of conversion of deposits into equity already had another test-run during the bankruptcy reorganization of Bankia and four other Spanish banks in 2013. The conditions of a July 2012 Memorandum of Understanding resulted in over 1 million small depositors becoming stockholders in Bankia when they were sold without their permission — “preferences” (preferred stock) in exchange for their missing deposits. Following the conversion, the preferences were converted into common stock originally valued at EU 2.0 per share, then further devalued to EU 0.1 after the March restructuring of Bankia.

Canada has also stated they are planning a similar “Bail-In” program. The Canadian government released a document titled the Economic Action Plan 2013 which says, “the Government proposes to implement a “Bail-In” regime for systemically important banks.”

However, don’t be getting cute by hiding your cash, precious metals, or passport in a bank safe deposit box. There are no longer safe either. Dodd-Frank took care of that, too.

Under Dodd-Frank the FDIC, using the auspices of Dept. of Homeland Security (DHS) can legally, without a warrant, enter the bank vault, have the manager secretly open any and/or all safe deposit boxes and inventory, or seize the contents. Further, if the manager is honest enough to inform the depositor of the illegal incursion he is subject to criminal charges and termination from bank employ. Independent reports reveal that all of America’s safe deposit boxes have already been invaded and inventoried for future confiscation.

This already happened in Greece. Depositors who removed their jewellery or precious metals were met at the bank’s door by security, a metal detector and confiscation.

Really?!

The power of the now remaining G-SIFI banks and FDIC was further evident when, cash finally in hand, I headed to my bank, JP Morgan Chase, right next door to Wells Fargo. The manager confirmed that the cash withdrawal policy at Chase was in keeping with that at Wells; very little cash available on demand. I posed a slight untruth and inquired as to what I should do about my upcoming need for $50,000 in hard cash. No, her bank would not do that on demand, but arrangements could be made to have the cash transferred to her bank. That would only take “about two days.” Of course, I would need to fill out a few forms.

What a Difference a Congress Makes!

With the American and UK public again on the hook by law for the anticipated loss of the banks a distressed depositor might think the plot to defraud them now complete. Au Contraire.

In its rush to transfer further wealth upwards to off-shore bank accounts, US president Trump and his recently re-aligned republican bootlickers have left no stone unturned. First, Trump issued a memorandum that sets in motion his plan to scale back the provisions of Dodd-Frank and repeal the Fiduciary Rule.

It should be noted that the only voice of economic reason at the White House, Former Fed Chairman, Paul Volker, divorced himself from this growing scandal of basic mathematics very publicly. As head of Obama’s recession inspired, President’s Economic Recovery Advisory Board, Volker ran into the headwinds of fiscal insanity for too long, resigning in January of 2011 in disgust. His departure thus coincided with the renewal of the litany of criminal financial manipulation already discussed here. And now…

The House approved legislation on February 2, 2017, to erase a number of core financial regulations put in place by the 2010 Dodd-Frank Act, as Republicans moved a step closer to delivering on their promises to eliminate rules that they claim have strangled small businesses and stagnated the economy. Said Trump:

I have so many people, friends of mine, with nice businesses, they can’t borrow money, because the banks just won’t let them borrow because of the rules and regulations and Dodd-Frank.

Poor banks!

Never mind, of course, that these poor banks are holding derivative exposure thirty-five times the total cash deposits of US savers…nor that their ill-gotten riches – such as the UBS, Wells Fargo, Bank of America, RBS multi-billion dollar frauds – were taken off-calendar in Federal court for approximately 15% of the total crime. The banks kept the rest.

And they want more?!

“We expect to be cutting a lot out of Dodd-Frank,” Trump said further defining the mantra of MAGA. This will likely see the deterioration of the newly created Financial Stability Oversight Council (FSOC) and the Consumer Financial Protection Bureau (CFPB) since these agencies curb further excessive risk-taking and the existence of too-big-to-fail institutions on Wall Street.

Well, depositors, your extreme caution is required. The wording of these new, bank-inspired sets of legislation is silently waiting to be used by many nations to prioritize banks before their citizen’s. When the time comes, the race to the bank will be a short-lived event indeed.

With this in mind, I stepped into the bright sunshine outside the walls of JP Morgan/Chase bank, all but $100.00 of my day’s take stuffed deep- and securely- in my pocket, its final outcome no one’s business but my own.

However, for almost everyone else? Well… when YOUR bank fails, don’t walk, run!  YOU do not want to be second in line.

Really!

Student Debt Slavery II: Time to Level the Playing Field

This is the second in a two-part article on the debt burden America’s students face. Read Part 1 here.

The lending business is heavily stacked against student borrowers. Bigger players can borrow for almost nothing, and if their investments don’t work out, they can put their corporate shells through bankruptcy and walk away. Not so with students. Their loan rates are high and if they cannot pay, their debts are not normally dischargeable in bankruptcy. Rather, the debts compound and can dog them for life, compromising not only their own futures but the economy itself.

“Students should not be asked to pay more on their debt than they can afford,” said Donald Trump on the presidential campaign trail in October 2016. “And the debt should not be an albatross around their necks for the rest of their lives.” But as Matt Taibbi points out in a December 15 article, a number of proposed federal changes will make it harder, not easier, for students to escape their debts, including wiping out some existing income-based repayment plans, harsher terms for graduate student loans, ending a program to cancel the debt of students defrauded by ripoff diploma mills, and strengthening “loan rehabilitation” – the recycling of defaulted loans into new, much larger loans on which the borrower usually winds up paying only interest and never touching the principal. The agents arranging these loans can get fat commissions of up to 16 percent, an example of the perverse incentives created in the lucrative student loan market. Servicers often profit more when borrowers default than when they pay smaller amounts over a longer time, so they have an incentive to encourage delinquencies, pushing students into default rather than rescheduling their loans. It has been estimated that the government spends $38 for every $1 it recovers from defaulted debt. The other $37 goes to the debt collectors.

The securitization of student debt has compounded these problems. Like mortgages, student loans have been pooled and packaged into new financial products that are sold as student loan asset-backed securities (SLABS). Although a 2010 bill largely eliminated private banks and lenders from the federal student loan business, the “student loan industrial complex” has created a $200 billion market that allows banks to cash in on student loans without issuing them. About 80 percent of SLABS are government-guaranteed. Banks can sell, trade or bet on these securities, just as they did with mortgage-backed securities; and they create the same sort of twisted incentives for loan servicing that occurred with mortgages.

According to the Consumer Financial Protection Bureau (CFPB), virtually all borrowers with federal student loans are currently eligible to make monthly payments indexed to their earnings. That means there should be no defaults among student borrowers. Yet one in four borrowers is now in default or struggling to stay current. Why? Student borrowers are reporting widespread mishandling of accounts, unexplained exorbitant fees, and outright deception as they are bullied into default, tactics similar to those that homeowners faced in the foreclosure crisis. The reports reveal a repeat of the abuses of the foreclosure fraud era: many borrowers are unable to obtain basic information about their accounts, are frequently misled, are surprised with unexpected late fees, and often are pushed into default. Servicers lose paperwork or misapply payments. When errors arise, borrowers find it difficult to have them corrected.

Abuses and fraud in handling student loans have brought the Education Department’s loan contractors under fire. In January 2017, the Consumer Financial Protection Bureau sued Navient, one of the largest contractors, alleging that the company “systematically and illegally [failed] borrowers at every stage of [student loan] repayment.”

Getting a Fair Deal

The federal government could relieve these debt burdens, given the political will. A stated goal of the changes being proposed by the Trump Administration is to simplify the rules. The simplest solution to the student debt crisis is to make tuition free for qualified applicants at public colleges and universities, as it is in many European countries and was in some US states until the 1970s. If the federal government has the money to lend to students, it has the money to spend on their tuition (capped to curb tuition hikes). It would not only save on defaults and collections but could turn a profit on the investment, as demonstrated by the seven-fold return from the G.I. Bill. (See Part 1 of this article.)

Alternatively, the government could fund tuition costs and debtor relief with a form of “QE for the people.” Instead of buying mortgage-backed securities, as in QE1, the Fed could buy SLABS and return the interest to students, making the loans effectively interest-free (as were the $16+ trillion in loans made to the largest banks after the 2008 crisis). QE that targeted the real economy could address many other budget issues as well, including the infrastructure crisis and the federal debt crisis; and this could be done without triggering hyperinflation. See my earlier articles here, here and here.

Needless to say, however, the government is not moving in that direction. While waiting for the government to act, there are things students can do; but first they need to learn their rights. According to a new survey reported in November 2017, students are often in the dark about key details of their student loan debt and the repayment options available to them. To get started, see here and here.

Under the Borrower’s Defense to Repayment program, you can get your loans completely discharged if you can prove they were based on deception or fraud. That is one of the alternatives the Administration wants to take away, so haste is advised; but even if it is taken away, fraud remains legal grounds for contract rescission. A class action for treble damages against offending institutions could provide significant financial relief.

Students also have greater bankruptcy options than they know. While current bankruptcy law exempts education loans and obligations from eligibility for discharge, an exception is made for “undue hardship.” The test normally used is that paying the loan will prevent the borrower from sustaining a minimum standard of living, his financial situation is unlikely to change in the future, and he has made a good faith effort to pay his loans. According to a 2011 study, at least 40 percent of borrowers who included their student loans in their bankruptcy filings got some or all of their student debt discharged. But because they think there is no chance, they rarely try. Only about 0.1 percent of consumers with student loans attempted to include them in their bankruptcy proceedings. (Getting a knowledgeable attorney is advised.)

For relief as a class, students need to get the attention of legislators, which means getting organized. Along with degree mill fraud and contract fraud, a cause of action ripe for a class action is the student exclusion from bankruptcy protection, a blatant violation of the “equal protection” clause of the Fourteenth Amendment. If enough students filed for bankruptcy under the “undue hardship” exception, just the administrative burden might motivate legislators to change the law.

States to the Rescue?

If the federal government won’t act and individual action seems too daunting, however, there is a third possibility for relief – state-owned banks that cut out private middlemen and recycle local money for local purposes at substantially reduced rates. The country’s sole model at the moment is the Bank of North Dakota, but other states now have strong public banking movements that could mimic it. A November 2014 article in the Wall Street Journal reported that the BND was more profitable even than J.P. Morgan Chase and Goldman Sachs. The profits are used to improve education and public services.

According to its 2016 annual report, the BND’s second largest loan category after business loans is for education, with nearly a third of its portfolio going to student loans. As of December 2017, the BND’s student loan rates were 2.82% variable and 4.78% fixed, or about 2% below the federal rate (which ranged from 4.45% to 7% depending on the type of loan), and about 5% below the private rate (currently averaging 9.66% fixed and 7.81% variable interest). The BND also acts as the servicer of these loans, bypassing the third-party servicers abusing the system in other states.

In 2014, the BND launched its DEAL One Loan program, which offered North Dakota residents a unique option to refinance all student loans, including federal, into one loan with a lower interest rate and without fees. DEAL loans are fully guaranteed by the North Dakota Guaranteed Student Loan Program, which is administered by the BND.

The BND also makes 20-year school construction loans available at a very modest 2% interest. Compare that to the Capital Appreciation Bonds through which many California schools have been forced to borrow to build needed infrastructure, on which they have wound up owing as much as 15 times principal.

The BND’s loan programs have helped keep North Dakota’s student default rates and overall student indebtedness low. As of January 2017, the state had the second lowest student default rate in the country and was near the bottom of the list in student indebtedness, ranking 44th. Compare that to its sister state South Dakota, which ranked number one in student indebtedness.

The public banking movement is now gaining ground in cities and states across the country. A number of cities have passed resolutions to pull their money out of Wall Street banks that practice fraud as a business model. In New Jersey, Governor-elect Phil Murphy has made a state-owned bank the funding basis of his platform, with student loans one of three sectors he intends to focus on. If that succeeds, other states can be expected to follow suit.

We need to free our students from the system of debt slavery that has financialized education, turning it from an investment in human capital into a tool for exploiting the young for the benefit of private investors. State-owned banks can make the loan process fair, equitable and affordable; but their creation will be fought by big bank lobbyists. An organized student movement could be an effective counter-lobby. Historically, debt and austerity have been used as control mechanisms for subduing the people. It is time for the people to unite and take back their power.

Iran at Dangerous Crossroads

On 21 September 2017, the Supreme Leader of the Iranian Islamic Revolution, spoke to the head and the members of the Assembly of Experts with kind of a State of the Nation Speech.

He addressed many issues from internal affairs, competing factions within the Islamic Revolution, to external relations – and the economy. He also referred to The Joint Comprehensive Plan of Action (JCPOA), commonly called the Iran Nuclear Deal, the international agreement on Iran’s nuclear program, reached in Vienna, Austria, on 14 July 2015. The accord is barely two and half years old and already breached by one of the five main-sponsors, the United States of America. The agreement also refers to the P5+1, meaning the five permanent members of the United Nations Security Council (UNSC) – China, France, Russia, United Kingdom, United States – plus Germany and, of course, Iran. The European Union was also part of the agreement in an observer function.

With regard to the JCPOA, the Ayatollah said:

The problem that I had and continue to have with the nuclear negotiations – I have discussed this matter in private and in public with officials – is this: what I am saying is that it was alright to negotiate, there was nothing wrong with negotiating, but those negotiations should have been conducted with care and precision so much so that every short move by us will not be considered as the violation of the Bar-Jaam [the JCPOA], while this is not the case for every wrong move that the other side makes! This is wrong! This should not happen. This happens due to lack of trust in and attention to domestic power. This state of affairs happens due to reliance on the other side and on foreign elements.

I will tell you that we should not pin our hopes on foreigners. We should work with the world and I am not opposed to this. Working with the world naturally has certain requirements. We accept these requirements and we shoulder them; however, we are not relying on foreigners. This is because our enemies are too many outside the environment of society and the country. There is a front of enemies against us. Well, thankfully, we have delivered blows to this front until today. We have defeated it and pushed it back and this will be the case from now on too, but we should know that we are not faced with a single enemy, rather we are faced with a front of enemies.

The Supreme Leader clearly refers to the non-trustworthiness of the US of A and her vassal allies; i.e., the European Union and her member countries, foremost, Germany, France and the UK. And he is, of course, right. Western ‘partners’ are almost unilaterally not reliable. Washington, especially Trump and his generals, directed by their Deep State handlers, the most prominent of whom is Netanyahu, the Zionist-in-chief and close buddy of the Donald, actually so close that he and his cronies decide on US foreign policy; i.e., that Iran is a terror state and has to be ‘neutralized’. This means the nuclear deal negotiated under Obama should be declared nil. Trump has been doing this ever since he ascended to the throne, and even before, during his campaign.

Without the Zionists’ money (i.e. Wall Street), it may have been difficult for Trump’s dark handlers to catapult him into the Oval Office. In his Tweet-manners, Trump issues threats after absurd threats to Iran, all baseless and outright lies. Wake up, world, for those who still read and believe in Trump’s unfounded accusations, be it on Iran, North Korea, Syria or Venezuela – and, in fact, many more – tweet back, asking warrior Donald to stop his aggressions and seek peace instead. If We, the People, the 99.9%, send him this massive message, he may reconsider sending his “fury and fire” message around the globe, boasting of having his finger on the red nuclear trigger bottom. In reality, he doesn’t want to see himself and his multi-billion fortunes going up in flames. Yet, calling these threats ‘kindergarten speek’ would be dangerous, because this madman, much-much madder than the “Rocketman”, is totally unpredictable. Just listen to his speech at the UN’s General Assembly of last September and to the senseless utterings of his incompetent UN-delegate, Nikki Haley. Iran knows it. Hence, the Ayatollah’s call for caution, not just for Iran, but for the rest of the world, should be taken seriously.

Another important point the Ayatollah makes in his address to the Assembly of Experts is on Iran’s economy.

The issue of paying attention to reliance on domestic hands for the sake of solving the problems of the country should turn into a well-established idea in the people’s minds. This should be repeated, explained and clarified so many times until it turns into a definite discourse.

We have motivated youth and skilled individuals. We have good producers, good entrepreneurs, good laborers, good farmers, good teachers and good professors. Tasks should be improved by such individuals. It is these individuals who should eliminate the problems of the country. It is also they who should solve economic problems and various other problems related to business.

I am not saying that you should break off your relations with the world. This is not my opinion in any way. From the beginning of the Revolution, I have been among those individuals who insist on establishing relations – relations with the world. In the present time too, I have the same belief, but the point that I want to raise is this: we should not exchange our own powerful natural legs for a foreigners’ cane. If we rest on a foreigner’s cane instead of standing on our own feet and relying on ourselves, this is wrong.

This is a clear reference to an “Economy of Resistance” which Iran has embarked on during the past couple of years, including the principles of import substitution, local investments with local money, local research and development, trading with friends and neighbors, and – especially decoupling from the western dollar-economy which will also be a protection from US imposed sanctions.

These unfounded and totally illegal economic punishments by any standards of international law, should have been lifted after the nuclear accord. This was part of the deal. But they were not lifted. To the contrary, Washington under Trump and under Netanyahu’s direction, enforced them for no other reason than an absolutely groundless allegation, “Iran is funding terrorism throughout the world.”

For once, the EU and especially the EU leaders, Germany, France and the UK, did not heed Trump’s call for continued sanctions on Iran. Instead, especially France and Germany signed bilateral trade and technology exchange agreements with Iran in the billions of euros. But make no mistake, they wouldn’t have signed them, if they weren’t on the winning side of the deals. That’s predatory capitalism at its worst. That’s what the west knows best. The only good thing for Iran about these agreements is that they cement the nuclear deal. Money – billions of dollars – is stronger for the neoliberal capitalists than Trump’s toothless threats.

However, these deals with the west bear the danger and risks associated with further exposure to the western monetary system, further vulnerability to western threats and sanctions, as all international transactions in western currencies have to transit the US banking system – and can be stopped by a US judge, practically at will. Argentina is a case in point when, in 2014, US District judge, Thomas Griesa in Manhattan, stopped an Argentinian payment to creditors of US$ 500 million, blackmailing Buenos Aires into paying an illegal debt of US$ 1.6 billion to Paul Singer’s predatory Elliott hedge fund.  Iran beware of such risks!

Sanctions of the past, nonetheless have left a dent in Iran’s economy. They contributed to inflation and to shortages of mostly foreign goods – which in turn, combined with unemployment, may have been the main reason for last week’s non-violent protests that started on 28 December in Iran’s second largest city Mashhad. They then spread across the country and, inspired by outside forces, became violent, claiming the lives of at least 21 people. They are the most violent protests since those following the 2009 elections, disputing the victory of President Mahmoud Ahmadinejad. They were then said to be officially inspired by opposition candidates Mir-Hossein Mousavi and Mehdi Karroubi, but, in fact, they were largely influenced and promoted by Washington’s secret services.

Ayatollah Ali Khamenei on 1 January, according to Reuters, blamed Iran’s foes for fomenting the unrest. Though he didn’t specify who they were, the secretary of Iran’s National Security Council, Ali Shamkhani, said the United States, Britain and Saudi Arabia were behind the riots. He could have added Israel. There is no doubt he is right on the dot. The insurrections appear like well-orchestrated western Color Revolutions, or Arab Spring type upheavals, aiming at Regime Change – what else? Similar cases abound throughout the Middle East and the rest of the world.

It is true that neoliberal factions in Iran – the fifth column – is an instrument of the west, a driving force to keep Iran within the orbit of western influence and especially the western monetary system. Iran’s leadership better be aware – this can be fatal. It will likely bring more economic strangulations as similar dependences have brought to other nations that wanted to preserve their sovereignty instead of bending to the empire. People living under economic hardship can easily be manipulated and mobilized to raise against their government.

Iran has to walk a fine line. The Resistance Economy may require some initial sacrifices and may take time to take hold. But eventually it will. Russia has applied it fully, after the ‘western sanctions’. President Putin has repeatedly said that these sanctions were the best thing that could have happened to Russia since the fall of the Soviet Union, because they have prompted Russia to revive its agricultural sector, as well as industry and scientific research. He even said so to the Ayatollah during his last November visit to Iran, suggesting that de-dollarization of Iran’s economy might be a good thing.

Indeed, after Russia went through a couple of economically hard years, she is now on an ascending curve. This is witnessed by two years in a row as the world’s largest grain exporter – a renewed, modernized industrial park, largely replacing what Ukraine produced for Russia in the past, increased trade with the Central Asian former Soviet Republics – and especially, an economy almost completely decoupled from the dollar, working with China and the rest of the SCO on an own currency and trade exchange system; i.e., the petro-yuan, convertible in gold.

Iran could do the same, without bending over to France and Germany (and others in the corrupt EU) for billion dollar/euro trade and technology deals. France is not trustworthy, neither is Germany, they are just out there to take advantage – see Germany’s strangulation of Greece. They are vassals in Washington’s pockets. Their ‘leaders’ were put in place by Washington’s propaganda, Wall Street money and election manipulations.

My humble advice, if I may, to the Government of Iran for 2018 and beyond:

Continue pursuing the path of “Resistance Economy”, concentrating on “local production for local markets, with local currency and through local state-owned or public banking for the benefit of the national economy”. This is one of the principles of “Economy of Resistance”. It includes ‘import substitution’ at a large scale, including using Iran’s own science; i.e., ‘research and development’ (R&D) capacity.

Refrain to the extent possible from seeking trading/business/banking relations with the west – and stay away from the IMF and the World Bank.

Instead focus on the east, on the Shanghai Cooperation Organization (SCO) and on some of the BRICS countries for external business and trade, and on the Asian Infrastructure and Investment Bank (AIIB) for development assistance. The future is definitely in the East, and as a member of the SCO, Iran is already part of the East – China’s One Belt Initiative (OBI) includes Iran – it is a multi-trillion-dollar (equivalent) program that will dominate economics in the coming centuries.

Use your own money, not western currencies, especially not the US dollar or its off-spring, the euro. Follow the de-dollarization example of Russia and China, if need be, develop a national cryptocurrency, controlled by the government for external trade, to circumvent western sanctions – see Venezuela.

Finally, be always aware that Washington, masterminded by “the Deep Zion-State” – will never let go. This doctrine is engraved in the PNAC (Plan for a New American Century), largely conceived by Washington’s Zionist think-tanks. Once they decided on a target, like the Ayatollah so eloquently says; i.e., Iran, Syria, Lebanon,  and in Asia, North Korea and China, they will not let go. No matter whether there is a peace agreement, or whether they have made a promise, nothing, but nothing that Washington says, signs and promises can be trusted. The war in Syrian, for example, is not ”over’’ as Mr. Putin has made believe, when he said Russia will pull out their troops. Just look at the US military base at Al-Tanf in Syria – a US base established fully illegally in Syria. The US was never invited to set foot in Syria. Yet, they not only are enhancing their base, they are also training new Daesh/ISIS terror groups to fight Damascus.

Iran will prevail. Iran is not alone. Iran has a mighty eastern alliance, including Russia and China. Trump and his handlers know it.

Ensuring Justice In The Era Of Transformation

In our last article, we predicted that the 2020s will be an era of transformation.  We focused on the development of the movement since the “Take-Off” phase of the 2011 Occupy encampments, followed by Black Lives Matter, Fight for $15, Idle No More, carbon infrastructure protests, debt resistance, immigration protests and more. The 2020s will be a decade when the impacts of years of mismanagement of crisis situations, such as climate change, inequality and US militarism, become unavoidable requiring major transformations. What we do now to prepare will help determine the result.

Transformative Era will be Driven by Long Neglected Issues

For many of the issues the popular movement has been raising, the government has failed to act or taken counterproductive actions, putting the profits and interests of campaign donors ahead of the necessities of people and protection of the planet. The environment is being destroyed, the food supply is being poisoned by pesticides and the wealth divide is widening.

The massive threat of climate change has become more immediate and worse. In the last year, the scientific consensus has become more dire. The impacts are upon us now wildfires and superstorms, war brought on by drought, mass migrations and deaths.

At the same time multiple analyses and government reports point to a fading US empire. Since the end of World War II, the US has dominated the globe politically, economically and militarily becoming the largest empire in world history. That era is coming to an end.

In his new book, In the Shadows of the American Century, historian and chronicler of empire Alfred McCoy writes that US empire will end in the next decade. The US is falling behind in all spheres of influence. McCoy demonstrates how US spying on foreign governments and using torture in multiple countries have undermined the US’ moral authority, as have aggressive bullying for corporation-friendly trade deals, holding back climate agreements in the Obama era and pulling out of the climate agreement in the Trump era. He chronicles the rise of China, India and Russia, among other countries. The power dynamics of the world are changing with the US being left out of important decisions while China and Russia work in tandem in more areas.

McCoy describes various scenarios for how US empire will end, depending on how the current crises play out. No matter what happens, it is up to those of us living in the US to demand the US dismantles its empire in a way that causes the least harm. Paul Street writes, “the decline of the American Empire might be a good thing for ordinary people at home as well as abroad.” Ending empire is an opportunity for changes that move us toward being a cooperative nation in a multipolar world rather than hanging on to power through military might.

The end of empire will have many repercussions. Public investment in empire has meant a lack of investment on urgent needs; e.g., repairing failing and inadequate infrastructure, rebuilding cities that have been ignored, especially in black and brown communities, strengthening education from pre-school through post-graduate, to name a handful of many inadequately-funded areas. The empire economy helped create an unfair economy at home that pushed people into poverty, debt and homelessness. To reverse those impacts, the US must shift military spending to meet civilian needs and provide funding for a new democratized economy.

System-changing Issues

The credibility of the power structure that allowed these crises to fester will shrink. On each of the issues where the people’s movement has been growing, those in power have either denied reality and done nothing or have made matters worse through counterproductive policies. Multiple crisis situations barreling toward us require mobilization for system change, not simple reforms.

The US democracy crisis is due to the corruption of money in elections, laws that prevent challenges by third parties, media that warps coverage in favor of the duopoly, gerrymandering and more. The mirage of US elections has become evident to tens of millions of people resulting in both duopoly parties being unpopular and in disarray.

System failure is also a failure of the capitalist economic system, dominated by Wall Street, monopolies and massive transnational corporations. The kleptocrats in power are looting public treasures, monetizing and profiteering off our basic necessities such as water, energy and transportation. Increasing numbers of people agree we need a new economy based on economic democracy and the Commons where key sectors are socialized and under democratic control.

In Seymour Melman and the New American Revolution, Jonathan Feldman describes Melman’s ideas for dismantling empire and capitalism and shifting economic and political power to people through worker ownership and other democratized systems.

The movement must position itself for this coming era of transition by: (1) weakening the power structure by protest of mistaken policies and building alternatives to replace them; and (2) specifically defining the transformations we want so that the power holders cannot deceive us with false measures.

Opportunities to build movement power

Economic justice: Inequality in the United States is extreme and the world’s wealthy grow obscenely richer. Three people in the US have wealth equal to half the population while millions in urban areas have zero wealthtens of millions cannot handle a surprise $500 expense and an entire generation is entering adulthood in massive debt to a job market that will keep them in debt.

Over the last 40 years, CEO pay rose 937 percent while worker compensation remained stagnant. The recent tax cuts will add to all of these problems with increased debt caused by tax cuts for the rich causing cuts to social safety net programs like Medicaid and privatizing Social Security and Medicare. An economic crash seems almost inevitable as this decade comes to a close.

National consensus on issues like taxing the rich and building the economy from the bottom up will grow, creating opportunities for new economy programs; e.g., workers owning businesses, laws ensuring a livable wage, public banks, participatory budgeting where people decide public expenditures, a guaranteed income to ensure people can meet their basic needs and other programs giving people power in the economy. Not only should the recently-passed tax cuts be repealed, but an aggressively progressive income and wealth tax should be put in place along with a financial transactions tax to shrink the wealth divide and finance essential services.

Healthcare as a public good: Health care continues to be a top issue of concern as people cannot afford necessary care. Even with insurance, the deductibles and co-pays on top of high premiums are unaffordable and tens of millions of people cannot afford any insurance. To confront the healthcare crisis, the US most move from a system dominated by profits for insurance companies, Big Pharma and providers to a system where health care is a public good with equal access for all funded by a progressive tax. National improved Medicare for all has majority support and is poised to become a litmus test issue in upcoming elections.

Internet freedom with equal access for all and independent media: The attack on net neutrality has created a massive movement and national consensus that access to the Internet should be equal for all. People recognize that the Internet is essential to participate in the economy, politics and culture, resulting in calls to nationalize the Internet. The quality of Internet service must be improved so there is high speed Internet, as exists in other developed countries. We must create an Internet for the 21st Century.

Further concentration of media is limiting access to a diversity of views. Freedom of speech in the 21st Century requires protection of political speech on the Internet not only from government but from corporations; e.g., Google and Facebook, that control social media. Laws must protect independent and social media as democracy requires diverse information and robust debate.

Confronting climate change and reversing environmental degradation: There must be a rapid transition to a clean energy economy, which will create jobs for those who install solar, wind and other clean energy sources, construct efficient transit and housing, and conduct research to develop technology needed to remake the economy. The climate crisis will impact all aspects of life, including food, farming, water management, housing and more. Energy must be democratized so people who create more energy are compensated as producers and energy is socialized through public utilities. A carbon tax will encourage the change to clean energy and provide funds for the transition.

End of empire: There will be massive shifts in the economy at home and abroad and in foreign policy as empire comes to an end. The military-security state comprises a large and decentralized sector of the US economy. A just transition to a civilian peace economy will be required. The US will no longer have the power to coerce countries into signing trade deals, an economic arm of empire, that allow the exploitation of workers, communities and the environment. A new era of trade designed to protect people and planet will become possible. New international institutions will be needed to correct the weaknesses of the United Nations and allow governance that protects human rights and economic and racial equality. Mechanisms will be required to resolve conflicts between nations peacefully.

Systemic Racism: Through all these issues, racism, a hierarchy of power that allows one group of people to dominate another, is intimately intertwined. Institutions that perpetuate racism and inequality will need to be dismantled. This is not identity politics, as some have accused, nor does it negate the suffering and oppression of poor white people. It is a reality that must be faced if we are to create new systems that do not default to disparities between groups of people. Indigenous rights and sovereignty must be respected. Reparations must be paid for generations of stolen wealth.

The Task of Insuring Justice

While transitions are inevitable, it is not inevitable they will be made based on economic, racial and environmental justice and peace. It is our responsibility to educate ourselves and each other so people understand the root causes of the crises we face, build popular power and create alternative systems that have desirable results. This is not the time for reform or the belief that we just need to elect the right person. The current systems, including the electoral system, are rigged against us and we need to use popular power change them.

As Kevin Buckland writes in Roar Magazine:

If we fail to offer scalable discursive, tactical and structural alternatives to the extractivist logic that has created the climate crisis, capitalism may itself transform the coming wave of disruptions into its own benefit, exacerbating existent inequalities for every social and ecological ‘issue’ as it strengthens its stranglehold of the future on a rapidly destabilizing battleground.

Buckland focuses on the climate crisis, but the same is relevant for other crises. A crisis  provides an opportunity for change. Those who have solutions on hand and power will determine what type of change occurs.

We face formidable opponents. They have resources, money and tools that can thwart our efforts. But this is nothing new. All movements for social transformation have faced difficult odds, still they have prevailed. We outnumber our opponents and when we work together, though we may not have the money, we do have resources and tools. We also have allies.

At a recent family gathering, one of our relatives who does human rights work remarked that people in other countries feel that they should be able to vote in US elections because the US has such a significant global impact. While that isn’t going to happen, there are ways that the international community outside the US can have influence, and that is through boycotts, divestments and sanctions. This can happen at the individual level, through institutions such as universities and at the governmental level. Activists can call on their governments to target US institutions of military and economic dominance.

During the South African Apartheid, it was South African activists who called on other nations to boycott their country. This was a primary reason why apartheid ended. A decade ago, hundreds of Palestinians came together and called for boycott, divestment and sanctions (BDS) of Israel. The BDS movement is having such a great effect that Israel is fighting to stop it.

And while we are reaching out to our international allies, we can share information with each other about what systems work and don’t work so that we can create the new world we need more rapidly. Collectively, we have greater wisdom than individually.

We live in a difficult time, but it is also a time of opportunities to correct our mistakes and build something better. Change is coming. As we wrote in 2011, history is knocking. We must all decide in 2018 how we will answer it.

Runaway Train Towards Full Digitization of Money and Labor

The other day I was in a shopping mall looking for an ATM to get some cash. There was no ATM. A week ago, there was still a branch office of a local bank – no more, gone. A Starbucks will replace the space left empty by the bank. I asked around – there will be no more cash automats in this mall – and this pattern is repeated over and over throughout Switzerland and throughout western Europe. Cash machines gradually but ever so faster disappear, not only from shopping malls, also from street corners. Will Switzerland become the first country fully running on digital money?

This new cashless money model is progressively but brutally introduced to the Swiss and Europeans at large as they are not told what’s really happening behind the scene. If anything, the populace is being told that paying will become much easier. You just swipe your card – and bingo. No more signatures, no more looking for cash machines. Your bank account is directly charged for whatever small or large amount you are spending. And naturally and gradually a ‘small fee’ will be introduced by the banks. And you are powerless, as a cash alternative will have been wiped out.

The upwards limit of how much you may charge onto your bank account is mainly set by yourself, as long as it doesn’t exceed the banks’ tolerance. But the banks’ tolerance is generous. If you exceed your credit, the balance on your account quietly slides into the red and at the end of the month you pay a hefty interest; or interest on unpaid interest and so on. And that even though interbank interest rates are at a historic low. The Swiss Central Bank’s interest to banks, for example, is even negative; one of the few central banks in the world with negative interest, others include Japan and Denmark.

When I talked recently to the manager of a Geneva bank, he said, it’s getting much worse. ‘We are already closing all bank tellers, and so are most of the other banks’. Which means staff layoffs which, of course, makes it only selectively to the news. Bank employees and managers must pass an exam with the Swiss banking commission, for which they must study hundreds of extra hours within a few months to pass a test usually planned for weekends, so as not to infringe on the banks’ business hours. You got two chances to pass. If you fail you are out, joining the ranks of the unemployed. The trend is similar throughout Europe. The manager didn’t reveal the topic and reason behind the ‘retraining’, but it became obvious from the ensuing conversation that it had to do with the ‘cashless overtake’ of people by the banks. These are my words, but he, an insider, was as concerned as I, if not more.

Surveillance is everywhere. Now, not only our phone calls and e-mails are spied on, but our bank accounts are too. And what’s worse, with a cashless economy, our accounts are vulnerable to be invaded and robbed by the state, by thieves, by the police, by the tax authority, by any kind of authority, and, of course, by the very banks that have had your trust for all your life. Remember the ‘bail-in’, the infamous “hair-cut”, first tested in early 2013 in Cyprus? Bail-ins will become common practice for any bank that has abused its greed for profit and would go belly-up, if there wouldn’t be all those deposits from customers. Even shareholders are not safe. This has been quietly decided some two years ago, both in the US and also by the non-elected white-collar mafia, the European Commission, EC.

The point is, ‘banks über alles’ (“banks above everything”, following Hitler-Nazis’ battle cry “Deutschland Über Alles”). And which country would be better suited to introduce ‘cashless living’ than Switzerland, the epicenter – along with Wall Street – of international Zion-banking. Banks will call the shots in the future, on your personal economy and that of the state. They are globalized, following the same principles of deregulation worldwide. They are in collusion with globalized corporations. They will decide whether you eat or become enslaved. They are one of the tree major weapons of the 0.1 % to beat the 99.9% into submission. The other two at the service of the master hegemon’s Full Spectrum Dominance drive, are the war- and security industry and the ever more brazen propaganda lie-machine. Banking deregulation has become another little-propagated rule of the World Trade Organization (WTO). Countries who want to join WTO, must deregulate their banking sector, prying it open for the globalized money-sharks, the Zion-controlled banking conglomerates.

Retrenchment of personnel in the banking employment market is increasing. The news only selectively reports on it, when there are large amounts of jobs being eliminated. Statistics lie everywhere, in the EU as well as in Washington. Why scare people? They will be scared enough, when they are offered jobs at salaries on which they can barely survive. That’s happening already. It used to be a tactic applied for developing countries: Keep them enslaved by debt and low pay, so they don’t have time and energy to take to the streets to protest.  They have to look for food and work, whatever menial jobs they can get, to feed their families. It’s now hitting Europe, the West in general. Some countries way more than Switzerland.

Cashless trials are going on elsewhere, especially in Nordic countries, where selected department stores and supermarkets do no longer take cash. Another monstrous trial has been carried out in India a year ago, in the last quarter of 2016, where from one day to another 80% of the most popular money bills were eliminated, and could only be exchanged for new bills by banks and through bank accounts. And this in an almost pure cash country, where half the population has no bank account, and where remote rural areas have no banks. People were lied to so that the sudden introduction had maximum effect.

It caused massive famine and thousands of people died, as they had suddenly no acceptable cash to buy food – all instigated by the USAID Project ‘Catalyst’, in connivance with the Indian rulers and central bank. It was a trial. It was a disaster. If it works in India with 1.3 billion people, two thirds of whom live in rural areas and most of them have no bank account, the scam could be applied in any developing country. See also India – India, Death by Demonetization: “Financial Genocide”, The Crime of The Century.

What is going on in Switzerland is a trial with the high end of populations. How is the upper crust taking to such radical changes in our daily monetary routine?  So far not many protests have been noticed. There is a weak referendum being launched by a group of people who want the Swiss Central Bank be the only institution that can make money, like in the ‘olden days’. Though a very respectable idea, the referendum has no chance in today’s banking and debt-finance environment, where youth is being indoctrinated with the idea that swiping your card in front of an electronic eye is cool. Today, most money is debt-money, made by private banks, like elsewhere in Europe and the US. Worldwide banking deregulation, initiated by the Clinton Administration in the 1990s – today a rule for any member of the World Trade Organization (WTO) – has made this all possible.

Digitization and robotization is just beginning. Staffed check-out counters in supermarkets are disappearing; most of them are converted into automatic check-outs – and that happened within the last year. Where are the employees gone?  I asked an attendant who helped the customers through the self-checkout. ‘They joined the ranks of unemployed’, she said with a sad face, having lost several of her colleagues. ‘It will hit me too, as soon as they don’t need me anymore to show the customers on how to auto-pay.’

Bitcoins

Digitization also includes the cryptocurrencies, the blockchain moneys floating around – of which the most famous one is Bitcoin. It brings digitization of money to an apex. The system is complex and seems to lend itself only to ‘experts’. Cryptocurrencies are fiat money, based on nothing, not even on gold. Cryptos are electronic, invisible and highly, but highly, speculative, an invitation for gangsters and fraudsters. It looks as if cryptocurrencies were designed for crooks and speculators.

Bitcoin was allegedly invented by Satoshi Nakamoto which could be a pseudonym of a man or a group of people, suspected to live in the US. “Nakamoto’s” identity is believed to be commonwealth origin, due to the vocabulary used in his writings. One of his close associates is purportedly a Swiss coder, who is also an active member of the cryptocurrency community. He is said to have graphed the time stamp of each of Nakamoto’s more than 500 bitcoin forum posts. Such ‘forum posts’ exist in the thousands, worldwide. They form an elaborate network based on algorithms.

Bitcoin was formally created in January 2009 with a fix amount of 21 million ‘coins’, of which more than half are already in circulation, or ‘mined’ as the jargon goes, and 1 million, or about 4.75% (of the total) can be traced to Nakamoto. This, based on the current market value, corresponds to close to US$15 billion. Today’s overall Bitcoin market cap is more than US$ 315 billion. The market is highly volatile. Drastic daily fluctuations are common, especially within the last 12 months. If one of the major Bitcoin holders, like Nakamoto, would capitalize his profit by selling a big portion of his holdings, the Bitcoin price would be in free fall, functioning pretty similar to the regular stock exchange.

On 24 August 2010, when Bitcoin was first traded, its value was US$ 0.06. On 26 December 2017, the coin was worth US$ 15,770, an increase of more than 250,000%. In the last twelve months, its value increased from about US$ 800 in December 2016 to a peak of close to US$ 20,000 in mid-December 2017, an increase of nearly 2,500 %. However, in the last 7 days, after several ups and downs, the price has dropped by about US$ 680; i.e., by more about 4%, and the trend is uncertain. Perhaps a sign of quick profit-taking? This all shows how instable this cryptocurrency is, apparently much more so than trading corporate shares on the stock market. And certainly not apt as a every-day currency base.

The number of cryptocurrencies available over the internet as of 27 November 2017 is above 1300 and growing. A new cryptocurrency can be created at any time and by anybody. By market capitalization, Bitcoin is presently the largest blockchain network (database network, storing data in different publicly verifiable places), followed by Ethereum, Bitcoin Cash, Ripple and Litecoin.

Bitcoin may be the next bubble, bringing down a parallel economy which has already its fingers clawing into our regular western economy. Cryptocurrencies are officially forbidden in Russia and China, though stopping cryptocurrency dealings by individuals is hardly possible. They do not touch the traditional banking system. That’s why major banks hate them. They circumvent the banking suckers, prevent them from making ever higher profits from horrendous commissions, against which the people at large are powerless.

Here is Bitcoin’s positive side. It escapes bank and state controls. If countries’ economies were run on Bitcoins or another cryptocurrency, they would escape US sanctions which function only because western currencies are foster-children of the US-dollar, hence, subject to the dollar hegemony; meaning all international transactions have to pass through a US bank. A typical case is ‘banking blockades’, when Washington decides to stop all international transactions of a country until it submits to the wishes of the empire. It is blackmail; totally illegal, but unless there is a monetary alternative, the (western) world is subject to this system.

Argentina is a case in point. Buenos Aires was forced by a New York judge in June 2014 to pay a New York based Vulture Fund US$1.6 billion, an illegal ruling according to a UN Resolution. Argentina refused to pay, so the judge, interfering in a sovereign nation, blocked more than US$500 million of Argentina’s debt payment to creditors, bringing the country to the brink of a second bankruptcy in 13 years. Eventually, neoliberal Macri negotiated a deal with the Vultures and made a payment in excess of US$ 400 million.

This US blackmail would not have been possible had Argentina been able to make its foreign transactions in Bitcoins or another cryptocurrency. Venezuela has created the “petro”, a hydrocarbon and gold based national cryptocurrency to escape dollar-caused inflation and for some of its foreign transactions, thereby also escaping the sanctions stranglehold of Washington. Had Greek and Cyprus citizens had a cryptocurrency alternative to the euro, they would not have been subject to the cash control imposed by the European Central Bank.

On the other hand, funding of terror organizations, like ISIS, cannot be disrupted, if the terror group deals in cryptocurrencies.  This shows, for good or for bad, Bitcoins, or cryptocurrencies are for now unique in resisting censure and blackmail, or any kind of authoritarian outside interference in electronic money transactions.

Cashless Living

If Switzerland accepts the change to digital money, a country where until relatively recently most people went to pay their monthly bills in cash to the nearest post office, then we, in the western world, are on a fast track to total enslavement by the financial institutions. It goes, of course, hand-in-hand with the rest of systematic and ever faster advancing oppression and robotization of the 99.9% by the 0.1%.

We are currently at cross-roads, where we still can either decide to follow the discourse of a new electronic monetary era, with ever less to say by “We, the People” about the product of our work, our money; or whether, We, the People, will resist a banking/finance system that has full control over our financial resources, and which can literally starve us into submission or death, if we don’t behave. In order to resist we need an alternative monetary system or monetary network, away from the dollar-euro hegemony, and cryptocurrencies, as structured today, are no alternative.

All the more important is the ascent of another economy, another payment and transfer scheme which already exists in the East, the Chinese International Paymen System (CIPS), effectively a replacement of SWIFT, totally privately run and linked to the US-dollar and US banks. The world needs a multipolar currency system, based on the real economic output of a country or society, as is the case in China and Russia, not one based on fiat money as is the current western economy.

Will Switzerland, the stronghold of world finance, along with New York, London and Hong Kong, resist the temptation of increased profit, power and control, offered by digital money? We, the People, have still the chance to decide either for continuing rotting in a fraud economy, based on wars and greed for which digital money, exacerbated by cryptocurrencies, is a new tool for a new maximizing profit bonanza on the back of the common people; or do we opt for an honest future and for a life that leaves us free to take sovereign political and monetary decisions in a full cash society. For the latter we must wake up to see the propaganda fraud going on before our eyes, and to resist the robot and electronic money onslaught being unleashed on us.

Preparing For The Coming Transformation

The year 2017 has been another active year for people fighting on a wide range of fronts. The Trump administration has brought many issues that have existed for years out into the open where they are more difficult to deny – racism, colonialism, imperialism, capitalism and patriarchy and the crises they create. More people are activated and greater connections between the fronts of struggle are creating a movement of movements. These are positive developments, bright spots in difficult times. They are the seeds of transformative change that we can nurture and grow if we act with intention.

The crises we face have been building for decades. They are reaching a point of extremism that will create an even greater response by people. What that response is, where it goes and what it accomplishes are up to all of us to determine.

The overreach by the plutocrats in power may bring a boomerang effect, energizing the population to take action and demand the changes we desire and need. We may reach a moment, a turning point, when the movements for economic, racial and environmental justice, as well as peace, can win significant changes, beyond the comfort zones of those in power. The boomerang will only occur if we educate and organize for it, and its size will also depend on us.

We have no illusions that this work will be easy. Those in power will do all that they can to derail, misdirect and suppress our efforts. Our tasks are to resist their tactics and maintain our focus on our end goals. This requires understanding how social movements succeed and being clear in our demands for transformative change.

We see several key areas where people are energized to work for changes that are opportunities to expand the current movement of movements into a powerful force that will overcome the stranglehold by the corporate duopoly parties. This is the first of two articles to help prepare us for the work ahead. In the second article, we will describe these key issues in greater depth and what we need to do to create the transformative moment we need.

The Long Development of this Transformative Era

The era of transformation has been developing over many decades. If we view it through presidential administrations, a frame of reference used commonly in the United States, we see that both major parties represent the interests of the wealthy and corporations, not the majority of the population, and that they effectively divide and weaken popular movements.

After Bill Clinton’s administration loosened regulations on finance, setting the stage for the 2008 crash, brought in trade agreements like NAFTA and weakened the social safety net, and George W. Bush’s administration expanded military aggression around the world and the domestic security state, as well as further enriching the wealthy, people were hungry for change. Barack Obama effectively built his ‘hope and change’ campaign around this desire, vaguely but eloquently promising what people wanted. His words allowed people to imagine that a transformation was coming.

Obama raised expectations, but he did not fulfill them. His cabinet was made up of Wall Streeters from Citigroup. He continued and expanded foreign wars, the wealth divide grew and tens of millions went without healthcare even after his private insurance-based Affordable Care Act became law. The frustration that had been building during the Clinton-Bush years burst onto the scene with Occupy, Fight for $15, Black Lives Matter, debt resistance, immigration reform, Idle No More and other fronts of struggle.

After Occupy, the media told us the people’s struggle went away, but, as we show in the daily movement news reporting on Popular Resistance, all of those struggles expanded. The corporate media’s failure to cover the national mass protest movement does not change reality — the resistance movements continue, are growing and are impacting popular opinion and policies.

Where We Are and What We Must Do

In 2013, we wrote a two part series describing the status of the movement and what the movement must do. In the December 2013 article, “Closer than We Think” we described the eight stages of social movements, an analysis by long-time civil rights and anti-nuclear activist, Bill Moyer. The movement had gone through the “Take-Off”, Stage Four of the social movement when encampments covered the country, seemingly overnight, and brought the issues of the wealth divide, racist policing, climate change, student debt and other issues to the forefront. The meme of the 99% against the 1% illustrated the conflict between people power and the power holders. We passed through Stage Five, “the Landing,” where the encampments disappeared and people asked, “What happened? Did we accomplish anything?”

Our second article in January 2014 focused on the tasks of the movement and explained that we were now in Stage Six, the final stage before victory. This is a long-term phase that could last years where the goal is to build broad national consensus of 70% to 90% support among the public for the goals of the movement and to mobilize people as effective change agents.

During this phase, the contradictions in the system become more obvious to people. For example, as the United States and world experience the harsh realities of climate change in massive storms, widespread fires, droughts and famine, the government’s response is inadequate. When Obama was president his administration was an anchor on the world, weakening international climate and trade agreements. His secretary of state, Hillary Clinton, used her influence to promote fracking. The Trump administration has gone further, denying climate change, erasing words and phrases that describe it from government reports, silencing scientists and undermining the inadequate steps made to confront climate change that were put in place in the Obama era.

The inadequate response to the climate crisis is one example of many multiple crisis situations that exist in which the government does not respond, responds inadequately or even takes actions that make these crises worse. In some cases, the power holders go too far, as we see in the recently passed tax bill, designed to protect the donor class, and in abusive police practices as the racism and violence of our society are exposed. The overreaction in the end helps build the national consensus we need to achieve our objectives.

The contradictions arise because there are obvious solutions to each crisis we face, but those in power refuse to put them in place. National consensus for these solutions grows during this phase, and the failures of the money-dominated political system become more obvious.

As a result, a transformative moment is building now. It can be seen in the 2016 presidential campaigns where people showed frustration with both corporate parties. Electoral challenges inside the parties showed populist anger based on hundreds of millions of people struggling every day to survive in an unfair economy. Donald Trump built his campaign around economic insecurity from the right and Senator Bernie Sanders did the same from the left. Now, Trump is betraying conservative populists with economic and healthcare policies that add to their insecurity and with the wealthiest cabinet in US history serving the interests of Wall Street, the self-interest of elected officials and adding to the distrust of the DC duopoly. The realization of Trump’s betrayal is only beginning to show itself in the lives of those who supported him.

The Democrats have been struggling to come to grips with how they lost to Donald Trump. A large part of the party is in denial, blaming their failures on the fiction of Russiagate — claiming the Russians were responsible for their loss rather than a widely-disliked candidate who represented Wall Street and war for her entire career. The Democrats continue their internal divide: the divide between Wall Street donors who want the party to serve their interests and voters who want the party to represent their interests. Invariably the Democrats will be unable to turn their backs on their donors and will nominate a fake change agent who will spout popular progressive rhetoric and dash those hopes when in office.

It is critical for us to step out of the limitations of two and four year election cycles and recognize that social transformation does not arise by electing the perceived least evil. Social transformation occurs through a people-powered movement of movements that arises over decades of struggle and shifts the political reality so that the power holders must respond.

Issues Driving the Backlash 

There will be a backlash. It will look to the Democrats like a backlash against Trump’s extremism, but it will be broader. It will be a backlash against the extremism of the corporate duopoly. Their bi-partisan policies always put the wealthy and big business interests first. The boomerang will be built on the conflict between the necessities of the people and the planet vs. the greed of the wealthy.

There are a number of fundamental issues that are priorities for large majorities of the population, around which people are mobilizing and where national consensus is developing. They have the potential to connect our movements into a powerful force.

One of our tasks is to develop clear demands so that we cannot be side-tracked by false or partial solutions. If these fundamental issues are addressed through bold and transformative solutions, they will shift the political culture and our political system in a significant way towards the people-powered future we need. They will create change at the root causes of the crises we face.

These transformative issues include economic inequality, lack of access to health care, ensuring Internet freedom and a people’s media, confronting climate change and environmental disasters, ending US Empire and militarism at home, and addressing domestic human rights abuses, whether it is exploitation of workers, mass incarceration, racism or disrespect for Indigenous sovereignty. Throughout all of these issues there is a thread of racial injustice so our struggles must not just solidify around class issues, but must also solidify around the necessity of ending systemic racism.

We will address these issues and next steps in greater depth in the first newsletter of the new year. We wish all of you a peaceful week and hope you are able to spend time with loved ones. We are committed to being with you through the struggle and to doing all we can to stop the machine and create a new world.