by Marvin Ramirez

Marvin Ramirez

(We made a mistake in last week edition. Instead of publishing this second part of the “government “shutdown and the debt default” part 2, we printed another story. We apologize for the inconvenience. Here goes the correct article. Thank you for reading El Reportero).

NOTE FROM THE EDITOR: Much of what we read, watch ad hear in the mainstream media about the issues like the shutdown and the debt default, is what the so-called experts, and friends of Wall Street. Their comments are geared to make us believe that everything is OK. The following article, authored by Prof. Michel Chossudovsky, brings us the perspective we don’t get from the mainstream media. Due to its length, it will be published in two parts. This is Part 2.

The speculative endgame: the government “shutdown” and “debt default”, a multibillion bonanza for Wall Street

by Prof Michel Chossudovsky

Collapse of the Dollar?

Upward and downward movements of the US dollar in recent years have little do with normal market forces as claimed by the tenets of neoclassical economics.

Both JP Morgan Chase’s CEO Jamie Dimon and Deutsche Bank’s CEO Anshu Jain’s assertions provide a distorted understanding of the functioning of the US dollar market. The speculators want to convince us that the dollar will collapse as part of a normal market mechanism, without acknowledging that the “too big to fail” banks have the ability to trigger a decline in the US dollar which in a sense obviates the functioning of the normal market.

Wall Street has indeed the ability to “short” the greenback with a view to depressing its value. It has also has the ability through derivative trade of pushing the US dollar up. These up and down movements of the greenback are, so to speak, the “cannon feed” of financial warfare. Push the US dollar up and speculate on the upturn, push it down and speculate on the downturn.

It is impossible to assess the future movement of the US dollar by solely focusing on the interplay of “normal market” forces in response to the US public debt crisis.

While an assessment based on “normal market” forces indelibly points to structural weaknesses in the US dollar as a reserve currency, it does not follow that a weakened US dollar will necessarily decline in a Forex market which is routinely subject to speculative manipulation.

Moreover, it is worth noting that the national currencies of several heavily indebted developing countries have increased in value in relation to the US dollar, largely as a result of the manipulation of the foreign exchange markets. Why would the national currencies of countries literally crippled by foreign debt go up against the US dollar?

The Institutional Speculator

JPMorgan Chase, Goldman Sachs, Bank America, Citi-Group, Deutsche Bank et al: the strategy of the institutional speculators is to sit on their “inside information” and create uncertainty through heavily biased news reports, which are in turn used by individual stock brokers to advise their individual clients on “secure investments”. And that is how people across America have lost their savings.

It should be emphasized that these major financial actors not only control the media, they also control the debt rating agencies such as Moody’s and Standard and Poor.

According to the mainstay of neoclassical economics, speculative trade reflects the “normal” movement of markets.

An absurd proposition. Since the de facto repeal of the Glass-Steagall Act and the adoption of the Financial Services Modernization Act in 1999, market manipulation tends to completely overshadow the “laws of the market”, leading to a highly unstable multi-trillion dollar derivative debt, which inevitably has a bearing on the current impasse on Capitol Hill. This understanding is now acknowledged by sectors of mainstream financial analysis. There is no such thing as “normal market movements”.

The outcome of the government shutdown on financial markets cannot be narrowly predicted by applying conventional macro-economic analysis, which excludes outright the role of market manipulation and derivative trade.

The outcome of the government shutdown on major markets does not hinge upon “normal market forces” and their impacts on prices, interest rates and exchange rates. What has to be addressed is the complex interplay of “normal market forces” with a gamut of sophisticated instruments of market manipulation. The latter consist of an interplay of large scale speculative operations undertaken by the most powerful and corrupt financial institutions, with the intent to distorting “normal” market forces.

It is worth mentioning that immediately following the adoption of the Financial Services Modernization Act in 1999, the US Congress adopted the Commodity Futures Modernization Act CALENDAR from page 4 2000 (CFMA) which essentially “exempted commodity futures trading from regulatory oversight.”

Four major Wall Street financial institutions account for more than 90 percent of the so-called derivative exposure: J.P. Morgan Chase, Citi-Group, Bank America, and Goldman Sachs. These major banks exert a pervasive influence on the conduct of monetary policy, including the debate within the US Congress on the debt ceiling. They are also among the World’s largest speculators.

What is the speculative endgame behind the shutdown and debt default saga?

An aura of uncertainty prevails. People across America are impoverished as a result of the curtailment of “entitlements”, mass protest and civil unrest could erupt. Homeland Security (DHS) is the process of militarizing domestic law enforcement. In a bitter irony, each and all of these economic and social events including political statements and decisions in the US Congress concerning the debt ceiling, the evaluations of the rating agencies, etc. create opportunities for the speculator. Major speculative operations –feeding on inside information and deception– are likely take place routinely over the next few months as the fiscal and debt default crisis unfolds.

What is diabolical in this process is that major banking conglomerates will not hesitate to destabilize stock, commodity and foreign exchange markets if it serves their interests, namely as a means to appropriate speculative gains resulting from a situation of turmoil and economic crisis, with no concern for the social plight of millions of Americans.

One solution –which is unlikely to be adopted unless there is a major power shift in American politics– would be to cancel the derivative debt altogether and freeze all derivative transactions on major markets. This would certainly help to tame the speculative onslaught.

The manipulation through derivative trade of the markets for basic food staples is particularly pernicious because it potentially creates hunger. It has a direct bearing on the livelihood of millions of people.

As we recall, “the price of food and other commodities began rising precipitately [in 2006], … Millions were cast below the poverty line and food riots erupted across the developing world, from Haiti to Mozambique.”

According to Indian economist Dr. Jayati Ghosh: “It is now quite widely acknowledged that financial speculation was the major factor behind the sharp price rise of many primary commodities, including agricultural items over the past year [2011]… Even recent research from the World Bank (Bafis and Haniotis 2010) recognizes the role played by the “financialisation of commodities” in the price surges and declines, and notes that price variability has overwhelmed price trends for important commodities.”

(Quoted in Speculation in Agricultural Commodities: Driving up the Price of Food Worldwide and plunging Millions into Hunger By Edward Miller, October 05, 2011)

The artificial hikes in the price of crude oil, which are also the result of market manipulation, have a pervasive impact on costs of production and transportation Worldwide, which in turn contribute to spearheading thousands of small and medium sized enterprises into bankruptcy.

Big Oil including BP as well Goldman Sachs exert a pervasive impact on the oil and energy markets.

The global economic crisis is a carefully engineered.

The end result of financial warfare is the appropriation of money wealth through speculative trade including the confiscation of savings, the outright appropriation of real economy assets as well as the destabilization of the institutions of the Federal State through the adoption of sweeping austerity measures.

The speculative onslaught led by Wall Street is not only impoverishing the American people, the entire World population is affected.

Michel Chossudovsky is an award-winning author, Professor of Economics (emeritus) at the University of Ottawa, Founder and Director of the Centre for Research on Globalization (CRG), Montreal and Editor of the globalresearch.ca website.

He is the author of The Globalization of Poverty and The New World Order (2003) and America’s “War on Terrorism”(2005).

His most recent book is entitled Towards a World War III Scenario: The Dangers of Nuclear War (2011).

He is also a contributor to the Encyclopaedia Britannica. His writings have been published in more than twenty languages.

He can be reached at crgeditor@yahoo.com.

by Marvin Ramirez

Marvin Ramirez

NOTE FROM THE EDITOR: Much has been said about the little-by-little lost of freedoms in the United States since the coward killings on the 9/11 attacks, which gave life to the infamous Patriot Act, responsible for these lost of freedoms guaranteed by the Constitution. The following article, authored by Dr. Paul Craigs Roberts, explains that what really has happened is that the Constitutional government has ceased to exist via a coup d’eat and replaced by an international banking cartel. This is Part 2.

by Dr. Paul Craig Roberts

The speculative endgame: the government “shutdown” and the “debt default” a multibillion bonanza for Wall Street

The American people have suffered a coup d’etat, but they are hesitant to acknowledge it. The regime ruling in Washington today lacks constitutional and legal legitimacy. Americans are ruled by usurpers who claim that the executive branch is above the law and that the US Constitution is a mere “scrap of paper.”

An unconstitutional government is an illegitimate government. The oath of allegiance requires defense of the Constitution “against all enemies, foreign and domestic.” As the Founding Fathers made clear, the main enemy of the Constitution is the government itself. Power does not like to be bound and tied down and constantly works to free itself from constraints.

The basis of the regime in Washington is nothing but usurped power. The Obama Regime, like the Bush/Cheney Regime, has no legitimacy. Americans are oppressed by an illegitimate government ruling, not by law and the Constitution, but by lies and naked force.

Those in government see the US Constitution as a “chain that binds our hands.”

The South African apartheid regime was more legitimate than the regime in Washington. The apartheid Israeli regime in Palestine is more legitimate. The Taliban are more legitimate. Muammar Gaddafi and Saddam Hussein were more legitimate.

The only constitutional protection that the Bush/Obama regime has left standing is the Second Amendment, a meaningless amendment consider1ing the disparity in arms between Washington and what is permitted to the citizenry. No citizen standing with a rifle can protect himself and his family from one of the Department of Homeland Security’s 2,700 tanks, or from a drone, or from a heavily armed SWAT force in body armor.

Like serfs in the dark ages, American citizens can be picked up on the authority of some unknown person in the executive branch and thrown in a dungeon, subject to torture, without any evidence ever being presented to a court or any information to the person’s relatives of his/her whereabouts. Or they can be placed on a list without explanation that curtails their right to travel by air. Every communication of every American, except face-to-face conversation in non-bugged environments, is intercepted and recorded by the National Stasi Agency from which phrases can be strung together to produce a “domestic extremist.”

If throwing an American citizen in a dungeon is too much trouble, the citizen can simply be blown up with a hellfire missile launched from a drone. No explanation is necessary.

For the Obama tyrant, the exterminated human being was just a name on a list.

The President of the United States has declared that he possesses these constitutionally forbidden rights, and his regime has used them to oppress and murder US citizens. The president’s claim that his will is higher than law and the Constitution is public knowledge. Yet, there is no demand for the usurper’s impeachment. Congress is supine. The serfs are obedient.

The people who helped transform a democratically accountable president into a Caesar include John Yoo, who was rewarded for his treason by being accepted as a law professor at the University of California, Berkeley, Boalt school of law. Yoo’s colleague in treason, Jay Scott Bybee was rewarded by being appointed a federal judge on the US Court of Appeals for the Ninth Circuit. We now have a Berkeley law professor teaching, and a federal circuit judge ruling, that the executive branch is above the law.

The executive branch coup against America has succeeded. The question is: will it stand? Today, the executive branch consists of liars, criminals, and traitors.

The evil on earth seems concentrated in Washington. Washington’s response to Edward Snowden’s evidence that Washington, in total contravention of law both domestic and international, is spying on the entire world has demonstrated to every country that Washington places the pleasure of revenge above law and human rights.

On Washington’s orders, its European puppet states refused overflight permission to the Bolivian presidential airliner carrying President Morales and forced the airliner to land in Austria and be searched. Washington thought that Edward Snowden might be aboard the airliner. Capturing Snowden was more important to Washington than respect for international law and diplomatic immunity.

On July 12 Snowden met in the Moscow airport with human rights organizations from around the world. He stated that the illegal exercise of power by Washington prevents him from traveling to any of the three Latin American countries that have offered him asylum. Therefore, Snowden said that he accepted Russian President Putin’s conditions and requested asylum in Russia.

Insouciant Americans and the young unaware of the past don’t know what this means. During my professional life it was Soviet Russia that persecuted truth tellers, while America gave them asylum and tried to protect them. Today it is Washington that persecutes those who speak the truth, and it is Russia that protects them.

The American public has not, this time, fallen for Washington’s lie that Snowden is a traitor. The polls show that a majority of Americans see Snowden as a whistle blower.

It is not the US that is damaged by Snowden’s revelations. It is the criminal elements in the US government that have pulled off a coup against democracy, the Constitution, and the American people who are damaged. It is the criminals who have seized power, not the American people, who are demanding Snowden’s scalp.

The Obama Regime, like the Bush/ Cheney Regime, has no legitimacy. Americans are oppressed by an illegitimate government ruling, not by law and the Constitution, but by lies and naked force.

Under the Obama tyranny, it is not merely Snowden who is targeted for extermination, but every truth-telling American in the country. It was Department of Homeland Security boss Janet Napolitano, recently rewarded for her service to tyranny by being appointed Chancellor of the of the University of California system, who said that Homeland Security had shifted its focus from Muslim terrorists to “domestic extremists,” an elastic and undefined term that easily includes truth-tellers like Bradley Manning and Edward Snowden who embarrass the government by revealing its crimes. The criminals who have seized illegitimate power in Washington cannot survive unless truth can be suppressed or redefined as treason.

If Americans acquiesce to the coup d’etat, they will have placed themselves firmly in the grip of tyranny.