Friday, February 17, 2012

Why Big Oil & Big Banks and the Federal Reserve Are Driving Our Country into the Ditch

If I was running an oil company, I would want to make you desire my product as much as possible. its a limited resource globally, the price can only go up. It's like squeezing blood from a turnip.

(Buy oil stocks. Make their price go up so high that it bursts. So that every American starts to feel the pain so they will wake up and realize that we are under attack, in a war, and our monetary and foreign policy have been hijacked by foreign cartels. We are so blind to the truth because no one in the mass media will come out and say it. Why? Because the 5 major media companies in the US are owned in part by the same banker cartels that caused the crisis, got the bailouts, and are now laughing their ass off while we plunder into oblivion. If we let it go any further this will look much worse than World War II. This will generate riots greater and more fierce than after the Vietnam War. This will drive us further into debt until we are broke. And the last time a superpower went broke it was 1989. tianemen square, velvet revolution, fall of the berlin wall, romania, hungary, Panama, all fell to the American Empire that our presidential military industrial complex is running. Eisenhower warned of the Congressional military industrial complex but the president can assassinate with drones. He is showing off to the Pentagon with his CIA, covert, secret operations. Meanwhile our own military is telling us to GET OUT of the middle east but they cant make the decision. Only the president can. And we are in the middle east to protect Saudi Arabia and the banking cartels oil investment with Saudi Aramco. Was it on their behalf that we invaded Iraq? Or wa that just to provoke Iran into war? Wil the Iran war be a distraction from further financial rape here at home? Last time there was a war, Dick Cheney made $1.2 trillion dollars disappear from the Pentagon.

Then Hank Paulson and his Federal Reserve loaned domestic and international banks $26 trillion dollars. Much of which is now held at the central banks all around the world. As soon as they release that money to the market, it will be another boom.

And who got the MF Global customer money when they went bankrupt? JP Morgan. Who pays the attorneys that run the trustee and bankruptcy proceedings. And who losses? Minnesota Farmers? Jon Corzine, former governor and former head of Goldman Sachs knows EXACTLY how to steal and get away with it.

JP Morgan knows how to leverage Corzine to steal for them. And guess who benefited the most from processing government loans to students? JP Morgan. And guess who got the biggest bailout? JP Morgan. And guess who owns JP Morgan stock?

The same people that own Shell Oil stock. Don't you see? They have rigged our laws, our courts, our congress, our elections, our banking, our monetary and foreign policy. We have been occupied!

Our government and economy are being controlled by a small group of very savvy psychopaths that know how to make money betting on both sides of every battle.

Every time somebody comes out with the truth, they get ignored by the mass media. Which then makes it conspiracy theory, until knowledge of the truth crosses the chasm and reaches the tipping point of revolution.

We must convince Democrats, Republicans, and Independents to work together to take control of our country, or we will end up like Greece - a victim of financial rape. We should hope we can turn out like India and keep control of our money supply and defend our borders and reach enlightenment. Otherwise, we are likely to suffer much more than we already have. We may end up like Russia in 1914 or Libya in 2011 or Iraq in 2003, Syria in 2012, . Can't you see the world is already at war. this is the beginning of world war 3 and if we are not careful we could all end up dust in the wind.

Fed Secretly Gives $26 Trillion to Global Cartel That Rule the World

Look at this chart on consumer price inflation (USD Devaluation)

So how did that happen? Check the Congressman Alan Grayson’s summary of the Fed Audit of just 6 months of activity. Could this be related?

The total lending for the Fed’s “broad-based emergency programs” was more than $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each.

The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.

another $10,057,000,000,000 in “currency swaps.” - the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries….

...together, totaled more than $26 trillion. ... more than 7 years of federal spending — on the military, Social Security, Medicare, Medicaid, interest on the debt, and everything else. And around twice America’s total GNP….

Is there any possibility that an additional $26 trillion dollars floating around the world would cause inflation? ABSOUTELY!

Now Read this - the capitalist network that runs the world http://bit.ly/onkFR2 - See any of the same companies?

The top 50 of the 147 superconnected companies

1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE 29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc*
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company

* Lehman still existed in the 2007 dataset used

With leverage everything grows and declines proportionally. That’s why the global market was going to crash and they had to be bailed out. Because they OWN PRACTICALLY EVERYTHING!

Friday, February 10, 2012

the capitalist network that runs the world

Revealed – the capitalist network that runs the world

Updated 13:15 24 October 2011 by Andy Coghlan and Debora MacKenzie
Magazine issue 2835. Subscribe and save
For similar stories, visit the Finance and Economics Topic Guide

The 1318 transnational corporations that form the core of the economy. Superconnected companies are red, very connected companies are yellow. The size of the dot represents revenue (Image: PLoS One)

1 more image

AS PROTESTS against financial powersweep the world this week, science may have confirmed the protesters' worst fears.An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The study's assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York's Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world's transnational corporations (TNCs).

"Reality is so complex, we must move away from dogma, whether it's conspiracy theories or free-market," says James Glattfelder. "Our analysis is reality-based."

Previous studies have found that a few TNCs own large chunks of the world's economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy - whether it made it more or less stable, for instance.

The Zurich team can. From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company's operating revenues, to map the structure of economic power.

The work, to be published in PLoS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What's more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world's large blue chip and manufacturing firms - the "real" economy - representing a further 60 per cent of global revenues.

When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people controls the global economy, but rather its insights into economic stability.

Concentration of power is not good or bad in itself, says the Zurich team, but the core's tight interconnections could be. As the world learned in 2008, such networks are unstable. "If one [company] suffers distress," says Glattfelder, "this propagates."

"It's disconcerting to see how connected things really are," agrees George Sugihara of the Scripps Institution of Oceanography in La Jolla, California, a complex systems expert who has advised Deutsche Bank.

Yaneer Bar-Yam, head of the New England Complex Systems Institute (NECSI), warns that the analysis assumes ownership equates to control, which is not always true. Most company shares are held by fund managers who may or may not control what the companies they part-own actually do. The impact of this on the system's behaviour, he says, requires more analysis.

Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Sugihara says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.

One thing won't chime with some of the protesters' claims: the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. "Such structures are common in nature," says Sugihara.

Newcomers to any network connect preferentially to highly connected members. TNCs buy shares in each other for business reasons, not for world domination. If connectedness clusters, so does wealth, says Dan Braha of NECSI: in similar models, money flows towards the most highly connected members. The Zurich study, says Sugihara, "is strong evidence that simple rules governing TNCs give rise spontaneously to highly connected groups". Or as Braha puts it: "The Occupy Wall Street claim that 1 per cent of people have most of the wealth reflects a logical phase of the self-organising economy."

So, the super-entity may not result from conspiracy. The real question, says the Zurich team, is whether it can exert concerted political power. Driffill feels 147 is too many to sustain collusion. Braha suspects they will compete in the market but act together on common interests. Resisting changes to the network structure may be one such common interest.

When this article was first posted, the comment in the final sentence of the paragraph beginning "Crucially, by identifying the architecture of global economic power…" was misattributed.

The top 50 of the 147 superconnected companies

* Lehman still existed in the 2007 dataset used

Graphic: The 1318 transnational corporations that form the core of the economy

(Data: PLoS One)

Thursday, February 9, 2012

Bretton Woods II - China Leads the Way

Expect China to Shape the Next Bretton Woods Pact: Philip Coggan

Illustration by Josh Cochran

By Philip Coggan Feb 2, 2012 4:00 PM PT 14 Comments

When the world economy heads into crisis, the international currency system often breaks down. This occurs either because debtors can’t meet their obligations, or because creditors fear they are not being repaid in sound money. The first condition exists today in the euro zone; the second is likely to emerge in the China-U.S. relationship.

So how might these conditions change the system? Much discussion concerns whether the U.S. dollar will be replaced as the global reserve currency by the Chinese yuan or whether it will simply be one of a number of reserve currencies that includes the euro, yuan and yen.

The global reserve currency is the one that forms the largest proportion of the holdings of central banks. More broadly, it is also the currency most likely to be accepted by merchants worldwide. In my view, the debate about whether the dollar will be replaced by the yuan is a bit of a red herring because such a shift will not occur quickly.

As of 2010, about 60 percent of all foreign-exchange reserves were denominated in dollars, giving the U.S. currency a critical mass. Investors are still comfortable with holding it; despite the country’s fiscal problems, in times of crisis, the dollar is regarded as a haven. It will take a long while for international investors to become confident that a Communist-led government will always respect their rights.

China’s Enormous Economy

By 2020, if current trends are realized, China will become the world’s largest economy. The nation’s foreign-exchange reserves already give it significant power as a creditor nation. But even if foreigners wanted to hold yuan instead of dollars, there would be constraints on their doing so. And removing the constraints would probably cause the yuan to soar, something that the Chinese are keen to avoid.

So it seems unlikely that the next 10 years will see a yuan standard replacing a dollar standard. But might the present crisis conditions lead to some other sort of change? Might countries, for example, be driven to enter a new arrangement comparable to the 1944 Bretton Woods pact, in which the world’s major industrial states agreed to adhere to a global gold standard to stabilize international currencies?

At this juncture, an agreement on this scale would be very difficult. Bretton Woods was made possible because of the limited number of participants and the urgency of wartime. Much ofEurope was under Nazi occupation and could not take part; the Soviet Union had little intellectual input; and the developing world was consulted on a fairly cursory basis. The Americans were in charge, but listened to John Maynard Keynes out of respect for his intellect.

A modern agreement would have to get consensus from the U.S., China, the European Union,India, Brazil, and so on. This would be tricky. But perhaps there could be an arrangement less formal than Bretton Woods. In November 2010, Robert Zoellick, a former U.S. Treasury official who runs the World Bank, wrote of a concept in which countries would agree on structural reforms to boost growth, forswear currency intervention and build a “co- operative monetary system.” This system, he continued, “should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

Some saw this mild suggestion as a call for a return to the gold standard, which, barring desperate circumstances, is unlikely. But before we dismiss all ideas for reform, we should remember that the world operates under what some call a Bretton Woods II regime, with the Americans buying Chinese goods and the Chinese supplying the finance. The implications of this process are everlasting U.S. trade deficits and an ever-greater investment by the Chinese people in U.S. government debt.

Dollar Connection

The system may have suited the Chinese until now because they were eager to find manufacturing jobs for their rural population. At some point, however, the Chinese may feel the need to do something else with their trillions of dollars in reserves. Already they are looking to diversify by acquiring natural resources in the developing world. They have also criticized the U.S. for its economic policy, calling on the Americans to limit their budget deficit.

Despite the strength of this rhetoric, the Chinese will not abandon the dollar outright. They already own so much in the way of U.S. government debt that any indication of their intention to sell would cause a plunge in bond prices. The fates of creditor and debtor are locked together. So the answer might be some kind of managed deal, with the Chinese agreeing to let their currency strengthen and to limit their current account surplus while the Americans agree to tackle their budget deficit. The currencies would trade in a range while the deficit would have a target.

Timothy Geithner, the U.S. Treasury secretary, hinted at such a solution in October 2010, suggesting a limit on current account surpluses of about 4 percent of gross domestic product. A Group of 20 meeting of finance ministers nodded mildly in the direction of this proposal. But nothing will happen overnight. Neither the Chinese nor the Americans will want to accept constraints on their behavior.

The Chinese will change tack if they believe such a shift is in their own interest. This might be because they face losses on their government-bond holdings, or because they wish to shift to a consumption-based, rather than an export-led, model to court domestic popularity.

To some, the idea that the U.S. would accept constraints on the independence of its economic policy might seem a fantasy. It is hard enough for a president to get his own plans through Congress, let alone get approval for a set of policies dictated from abroad. As a result, one would expect a new system to arise only as part of a further crisis.

Savers and Spenders

In a speech in October 2010, Mervyn King, the governor of the Bank of England, called for a “grand bargain” among the major players in the world economy. “The risk,” he said, “is that, unless agreement on a common path of adjustment is reached, conflicting policies will result in an undesirably low level of world output, with all countries worse off as a result.”

The fundamental problem is the imbalance between the saving and the spending nations. In a sense, the situation resembles that of the late 1920s when the Americans and French owned a huge proportion of the world’s gold reserves; this time it is the Asian and OPEC countries that have too much squirreled away. What should naturally happen in such circumstances is for the exchange rates of the surplus nations to appreciate. But countries have been attempting to hold their currencies down, either by intervening in the markets or by imposing capital controls. All currencies, however, cannot fall; some must rise and risk deflation in the process.

Any target for exchange rates, or current-account surpluses, would have to be flexible. Fixed exchange rates require either subordination of monetary policy or capital controls to be effective. The Chinese, who already restrict investment, might favor capital controls, but it is hard to see the U.S., with its huge financial-services industry, agreeing to a worldwide restriction.

However, there is one factor that might persuade the U.S. government to change its mind: its debt burden. As has already been discussed, reducing debt via an austerity program is unpalatable, and outright default is almost unthinkable. But governments did manage to reduce their debt burdens after World War II, under the auspices of the Bretton Woods system.

Only with capital controls can government debt burdens be inflated away. Private savings can be more easily forced into public-sector debt.

How would a managed exchange-rate system work today? Even under Bretton Woods, after all, it eventually proved impossible to keep exchange rates pegged. But the system did work for a quarter of a century. And if an exchange-rate peg gives speculators a tempting target, the answer would be to curb the speculators. Again, if the Chinese set the rules, such a move would seem more likely. They regard Western governments as foolish for allowing their economic policies to be at the mercy of the markets.

If the U.K. set the terms of the gold standard, and the U.S. set those of Bretton Woods, then the terms of the next financial system are likely to be set by the world’s biggest creditor: China. And that system may look a lot different to the one we have become used to over the past 30 years.

(Philip Coggan is a columnist for the Economist. This is an excerpt from his book, “Paper Promises: Debt, Money and the New World Order,” to be published Feb. 7 by Perseus Books. The opinions expressed are his own.)

To contact the writer of this article: Philip Coggan at philipcoggan@economist.com

To contact the editor responsible for this article: Mary Duenwald at mduenwald@bloomberg.net