The Most Revolutionary Act

Uncensored Updates on World Events, Economics, the Environment and Medicine

We’re Moving!

Posted By on October 15, 2013

WE’RE MOVING!

Owing to increasing technical difficulties with this platform, The Most Revolutionary Act is relocating to a mirror site at http://stuartjeannebramhall.com/

Click on http://stuartjeannebramhall.com/ to read my latest post “The Collapse Has Already Started.”

photo credit: Kurt Komoda via photopin cc

The Coming Wall Street Crash

Posted By on October 12, 2013

wall street

The Storm Clouds Gathering video below lays out a strong case that Wall Street is headed for another crash – either in December or January.

According to the filmmakers, the rise in stock prices in 2013 is really a bubble about to burst. The main cause of the bubble is the $85 billion in Quantitative Easing (QE3) the Federal Reserve has been injecting into the economy every month. This money doesn’t go to American businesses or consumers, but to banks. They, in turn, invest it in the stock market. Whenever there are more buyers than sellers, stock prices go up.

The Schiller P/E Ratio

Current price indicators are virtually identical to past bubbles that have triggered crashes, as is the Schiller price to earning (P/E) ration. In a normal market, the rise in a stock’s price should reflect how well it’s performing. Once the Schiller P/E ratio passes a certain critical value, a “correction” (i.e. market crash) is inevitable.

Insiders Pulling Out

The most ominous sign of an imminent crash is all the Wall Street insiders (the 1%) pulling their money out of stocks and putting it into real estate and other tangible assets.

No One Can Predict the Exact Month

There are too many variables to predict the exact month the crash will occur. However the video offers a number of scenarios that could potentially trigger the crash, including a default on the US debt, a war in Syria or Iran, or a meltdown in the $700 trillion derivatives market.

Derivatives are a sophisticated form of gambling in which bankers bet on the future price of a stock or commodity. The derivatives bubble was $500 trillion when the meltdown started in 2007. Because $700 trillion is more than ten times the size of the world economy, the banks exposed to derivatives (all of them) would fail without massive government bail-outs.

Caveat

The only disappointment in the film is the shallow analysis of Quantitative Easing at the end. It seems to support a monetary system in which private banks are allowed to create money out of thin air, but not government. The problem with QE3 isn’t that the Fed is pumping new money into the economy. The problem is giving all $85 billion of it to banks. It should be used to help small businesses and ordinary families. See my last post An Australian Looks at the US Economy

Enjoy.

photo credit: nromagna via photopin cc

An Australian Looks at the US Economy

Posted By on October 10, 2013

dollars

How Private Banks (Not Government) Create Money

Australian economist Steve Keen (author of Debunking Economics) has an excellent 2009 article on his Debtwatch site explaining how Fractional Reserving Banking (FSB) supposedly works. The major premise of the article is that true FSB only exists in the minds of academic economists. Keen begins with a quote from Karl Marx (and a prominent photo) that was featured in a January 2009 article Investors Shortchanged  in the Sydney Morning Herald:  

karl marx

“Talk about centralisation! The credit system, which has its focus in the so-called national banks and the big money-lenders and usurers surrounding them, constitutes enormous centralisation, and gives this class of parasites the fabulous power, not only to periodically despoil industrial capitalists, but also to interfere in actual production in a most dangerous manner— and this gang knows nothing about production and has nothing to do with it.” (Das Kapital, Volume 3, chapter 33).

Although Marx was totally off base in predicting the imminent downfall of capitalism, he sure got it right about banks.

 The Fiction of Fractional Reserve Banking

In the academic model of Fractional Reserve Banking, a retail bank establishes reserves (with depositors’ money and funds borrowed from the Federal Reserve). They then create $90 in new money for every $10 they hold in reserve. Only it never works this way in real life. The Reserve Bank of Australia totally eliminated the reserve requirement in the 1990s.The Federal Reserve has no reserve requirement for business loans and the 10% reserve requirement for personal loans is full of loopholes.

Keen’s article goes on to present M0/M1 and M2 data showing that what academic economists are calling Fractional Reserve Banking is actually a Pure Credit Monetary System. In other words, private banks are totally free to issue as much money, in the form of new loans, as they choose. They also have total control of both the money created by the commercial system and the money created by government.

M0 (sometimes called M1) refers to the Base Money or fiat money created by the Federal Reserve. M2 refers to M0 plus new money created by banks as loans. The ratio of M2/M0 is called the “money multiplier” ratio.

What his graphs show is that credit money (M2) is created first and M0 or fiat money (the reserves to cover it) is created up to a year later. In a true FRB system, M0 or Base Money would increase first, and M2 would follow as banks issue new money based on their reserves. The other major problem is that combined public and private debt greatly exceeds M2. Under a true FRB system, total debt could never exceed the amount of fiat and bank money created.

Why Quantitative Easing Won’t Work

Keen’s paper also includes an interesting prediction that the Federal Reserve’s quantitative easing (increasing M0 by electronically “printing” $85 billion in new fiat money every month) will be vastly insufficient to bring about economic recovery. He gives four reasons for this:

  1. Instead of using the money the Fed loans them to lend to borrowers, private banks are allowing inactive reserves to rise.
  2. Consumers are too far in debt to take out new loans.
  3. Deflation will continue because retailers and wholesalers must deeply discount their products to keep from going bankrupt.
  4. “Deleveraging” (paying off debt) is massively suppressing consumer demand.

Keen predicts that quantitative easing will have little effect unless Federal Reserve Chairman Ben Bernanke pumps enough money into the economy to make a dent in the $42 trillion US debt. Deducting compound interest, he reckons $20 trillion would reduce it by about a quarter.

Ironically such a massive increase in government-issued Base Money (M0 ) would effectively replace our bank-controlled credit money system with a publicly controlled fiat money system. In other words it effectively restores the ability of the federal government to issue money, as Lincoln did (see The Role of Foreign Banks in US History).

Makes you wonder if this is Obama’s and Bernanke’s true agenda with all the electronic money they’re printing – to quietly nationalize America’s monetary system through the backdoor.

For more background on how private banks create the vast majority of US dollars (out of thin air), check out the free video The Secret of Oz:

Photo credits:  youkaine via photopin cc and photo credit: wolfgangfoto via photopin cc

The Phone Company That Said No to NSA

Posted By on October 8, 2013

 

nacchio-10-22click on image to enlarge

Former US West CEO Released from Prison

Former US West CEO Joseph Nacchio was released from prison last week after completing a four year insider trading sentence. He still claims the NSA framed him on the insider trading charges – after he refused to participate in their illegal phone surveillance program in 2001. US West was the only major telecommunication program that refused to spy on its customers. According to the Wall Street Journal, Nacchio feels vindicated by Edward Snowden’s recent revelations about NSA spying on Americans’ phone and email communications.

Nacchio was convicted of selling US West stock based on inside information about the company’s deteriorating financial health. He denies this, claiming he believed US West’s lucrative contracts with the federal government would continue. Instead his refusal to cooperate with the NSA resulted in the wholesale cancellation of  government contracts.

Nacchio had evidence supporting this claim. However the judge ruled it was classified and prevented his defense team from presenting it. The redacted NSA files were only made public after the former CEO was convicted and sentenced. However Harper’s and others have always supported Nacchio’s contention that he was prosecuted in retaliation for saying “no” to the NSA.

Whether or not Vlaccio is guilty of insider trading (all the legal arguments are summarized at Race to the Bottom), the most illuminating information in the redacted files is that the NSA was pressuring US West to spy on customers in February 2001. This was a good seven months before the 9-11 attacks, the supposed justification for curtailing Americans’ civil liberties.

 Image credit: Indict Dick Cheney

Originally published at Veterans Today

The Vanishing Farmer

Posted By on October 7, 2013

almanac-gold_1_

The US Farm Crisis

Americans rarely give much thought to where their food comes from. They should. Rapidly expanding cities mean the US loses two acres of fertile farmland every two minutes. The dwindling number of US farmers – now at 1.5 million – is even more concerning. At present the average American farmer is over 60 – only 5% of them are under 45.

The US government has been desperately trying to recruit more formers since 1992, when they first introduced a special loan program for beginning farmers. Owing to poor uptake, the 2008 Farm Bill greatly expanded the loan program, as well as introducing educational assistance and special training programs, commodities payments, conservation payments and crop insurance subsidies to new farmers. These programs were expanded even further in 2010, when US Secretary of Agriculture Tom Vilsack announced his goal of recruiting 100,000 new farmers in five years.

Corporate Welfare for Factory Farms

Although the number of loans to beginning farmers increased from 9,000 in 2008 to more than 15,000 in 2012, there’s growing skepticism about other aspects of the program. Commodities and crop insurance subsidies clearly benefit large corporate players –  factory farms and the private insurance companies – more than small farmers. Last week, GMO and pesticide manufacturer Monsanto bought into the crop insurance racket when they acquired ClimateCorp, a San Francisco based company that employs complex weather data to set prices for its crop insurance policies. At the same time speculative property development, which poses the most immediate threat to productive farmland, remains unaddressed.

Young Farmers are Pro-Organic and Anti-GMO

According to Reuters, the organic and healthy food movements have also been instrumental in inspiring urban youth in returning to the land, where they are supported by a number of national and state nonprofit organizations.

Greenhorns, a national membership organization of 6,000+, is one of the largest and most active. Founded in 2007, the group works to promote, recruit and support young US farmers by putting on events and workshops, networking, resource sharing, and the production of traditional and new media: radio, documentary film, blog, a book of essays, guidebooks, web-based tools. Their primary goals are to “retrofit” the corporate food system by building a thriving agricultural economy, based on solid business skills and sustainable farm practices.

Their website offers a phenomenal range of resources, with links to

  • Jobs
  • Agricultural training courses
  • Mentoring opportunities
  • Low cost food processing facilities
  • Core consumer groups wishing to start Community Supported Agriculture schemes*
  • Market managers seeking new producers
  • Marketing advice/assistance
  • Land for sale and lease
  • Legal services
  • Grants
  • Crowdfunding and community based fundraising opportunities
  • Political action groups

I was especially intrigued by the Greenhorns new documentary and their 2013 New Farmers Almanac. The latter is a new twist on the classic Old Farmers Almanac. Designed to appeal to healthy food advocates as well as farmers of all ages, it presents a collection of essays about adjusting to large scale urbanization and the mega population boom, as well as reclaiming a landscape dominated by monoculture, soil depletion. Available in paperback for $20 from AK Press

Here’s the trailer to the documentary, which can be purchased for $10 from their website:

*In Community Supported Agriculture schemes (CSAs) consumers subsidize a local farm by purchasing a subscription to weekly deliveries of fresh vegetables and/or fruit.

Solutions: Taking Back Our Power

Posted By on October 5, 2013

stuff

Nothing like a nice government shutdown to remind us that the federal government is hopelessly dysfunctional. Congress and the White House are so focused on the needs of their corporate donors that most of the laws they pass hurt ordinary Americans rather than helping them. Fortunately a growing number of local groups have discovered that the most meaningful form of political change happens outside of official political channels. Together with family, friends, and neighbors, they’re opting out of the “corporate” lifestyle and inventing more meaningful grassroots models for meeting human needs.

The Story of Solutions

Annie Leonard, who produced the world changing video They Story of Stuff in 2008, has just released a sequel The Story of Solutions. Like her first film, it challenges a society built on ever increasing economic growth and accumulating more stuff. However the focus of The Story of Solutions is more on community organizing to move our economy in a more sustainable and just direction. To quote from the film promo:

“In the current ‘Game of More’, we’re told to cheer a growing economy – more roads, more malls, more Stuff! – even though our health indicators are worsening, income inequality is growing and polar icecaps are melting. But what if we changed the point of the game? What if the goal of our economy wasn’t more, but better – better health, better jobs and a better chance to survive on the planet?”

The nine-minute video includes inspiring real-world examples of ways in which communities are mobilizing for change – through programs as simple as “tool-sharing” libraries. There’s absolutely no reason why every American needs to own their own lawnmower, power drill, and chainsaw.

Here’s the original The Story of Stuff for people who missed it when it first came out.

photo credit: net_efekt via photopin cc

Books to Prisoners

Posted By on October 3, 2013

The Political Importance of Literacy
books

Books to Prisoners is a Seattle-based, all-volunteer non-profit organization founded in 1973 under the sponsorship of Left Bank Books. BTP ships books to prisoners – at their request. Prisoners send them 1,200 – 1,300 book requests per month. BTP believes that books are important tools for learning and self-improvement. Moreover, as Brazilian educator and activist Paulo Freire taught, literacy and reading opens peoples’ minds to new ideas and possibilities.

In the US, which spends vastly more on the prison industrial complex than schools, prison is the primary anti-poverty program. American prisons house nearly 25% of the world’s prisoners – more than 2.2 million. The vast majority are from disadvantaged communities and are either African American or Hispanic. Most have been incarcerated for victimless drug crimes. Prison rehabilitation is a myth, especially as prison privatization and state cutbacks have greatly curtailed prisoners’ access educational and training opportunities.

BTP prefers monetary donations. However they do welcome books from the following categories provided they are in paperback (most prisons prohibit hard back books) – and preferably accompanied with a $35-70 donation to cover the cost of shipping them to prisons.

  • Dictionaries
  • Antiquarian books (these can be sold to cover postage)
  • Spanish books
  •   Legal self-help
  • Almanacs
  • Books on chess
  • Books on drawing
  • Vocational education
  • How-to Books
  • Textbooks
  • GED preparation books
  • African-American history
  • True crime
  • Paperback fiction: thrillers, mysteries, sci-fi, Westerns, fantasy, horror

Books (and donations) can be mailed to:

Books to Prisoners, c/o Left Bank Books, 92 Pike St. Box A, Seattle WA 98101

People can also donate via the BTP website: http://www.bookstoprisoners.net/donate/

The following video illustrates the profound effect this forty-year program has had on prisoners’ lives:

I have often reflected upon the new vistas that reading opened to me. I knew right there in prison that reading had changed forever the course of my life. As I see it today, the ability to read awoke in me some long dormant craving to be mentally alive – Malcolm X

photo credit: » Zitona « via photopin cc

Originally posted at Veterans Today

Where Women Rule

Posted By on October 1, 2013

rwanda
Below is a recent CCTV-English (Chinese state TV) documentary on low carbon development in Rwanda. It piqued my interest, mainly because Rwanda has the only parliament in the world where women are in the majority. Following recent elections*, women hold 56.3% of the seats. Former rebel leader Paul Kagame, credited with ending the Rwandan genocide, was re-elected president.
Rwanda, which also has the highest population density in Africa, was left in ruins by the brutal 1994 genocide, in which Hutu extremists butchered a million members of the Tutsi minority. The genocide ended when the Hutu government was overturned by RPF (Tutsi) rebels led by Kagame.
Although the Rwandan economy was virtually destroyed by the civil war, substantial Chinese investment has made it one of the fastest growing economies in Africa. Determined to end their dependence on foreign investment and imports, the Rwandan government has joined Korea, Denmark, and China in centering development around a low carbon economy.
Investing in Distributed and Renewable Energy
For example, instead of investing millions of dollars in an electrical grid to supply the countryside, the government is assisting rural villages in developing distributed  (i.e. grid-less) energy systems. To reduce their reliance on expensive fossil fuel imports, they’re assisting villager to produce their own power with solar panels, mini-hydroelectric generators**, and methane cogeneration systems***. They have also reduced national reliance on food imports by terracing and replanting hillsides that have been devastated by deforestation and landslides. (Wouldn’t it be great if the Obama administration subsidized distributed energy systems and reforestation – instead of defense contractors and oil, pharmaceutical and insurance companies?)

minihydropower

www.minihydropower.net

Exactly How “Free” is Rwanda?
Kagame’s zero tolerance for corruption is believed to be an essential factor in Rwanda’s phenomenal economic growth. However his critics complain that economic growth and security have come at the expense of freedom of expression. Although Rwanda has a constitution and holds regular elections, human rights groups raise legitimate concerns about restrictions Kagame places on opposition parties.
The clampdown on opposition groups seems to be a direct response to periodic bombings and sniper attacks by a rebel group called the Democratic Forces for the Liberation of Rwanda (FDLR). The FDLR, which operates from across the border in the Democratic Republic of Congo, includes remnants of the Hutu militia responsible for the 1994 genocide.
A 2009 UN Report reveals the FDLR is funded by a vast international network of Spanish charities, Ukrainian arms dealers, corrupt African officials, secret North Korean weapon suppliers, Indian gold dealers, and officials of the United Arab Emirates. This motley assortment of wheeler-dealers supply the FDLR arms in return for illicit Congolese gold and other minerals.
 Parallels with Syria
 Ironically Kagame’s situation is very similar that that of Syrian president Bashar al-Assad. Tutsis comprise 15% of the population, and Hutus 85%. A Tutsi monarch ruled Rwanda at the time of colonization, with the French institutionalizing Tutsi oppression with the colonial government they established. This would lead to deep-seated resentments resulting in the Hutu rebellion and genocide.
*In the Sept 13 election, there was a 98.8% turnout and Kagame won 76% of the vote.
**A friend of my manufactures PowerSpout mini-hydrogenerators (he made the first one out of old washing machine parts). Conventional hydropower depends on dams, which cause massive environmental and ecosystem destruction. All you need for mini-hydroelectric generation is a stream that flows downhill.
***A methane co-generation system converts methane from plant, animal, and/or human wastes to heat and power.
Enjoy.

photo credit: Gates Foundation via photopin cc

TV3 Tackles Income Inequality

Posted By on September 29, 2013

The American Pubic Broadcasting Service (PBS) used to have fabulous, hard hitting documentaries when public broadcasting first got going in the 1970s. Fast forward to 2013, and all the documentaries that seriously challenge the political establishment have all but vanished from free-to-air TV (except, perhaps, for Frontline and Bill Moyers’ specials).
 Although it first aired on commercial TV, the New Zealand documentary Mind the Gap reminds me a lot of the PBS documentaries I used to watch on Friday night in the late seventies. It dissects the alarming rate at which New Zealand’s wealthy elite are sucking up wealth from our working class families.
While New Zealand’s political and economic dynamics are somewhat different from those of the US, there are common factors at play. Moreover the New Zealand economy is somewhat easier to unpack. In addition to being smaller, for the most part it’s uncomplicated by taxpayer funded corporate subsidies.

Zombie Economics

Mind the Gap is highly critical of “neoliberalism” (I don’t think I’ve ever heard that word on American TV), which the program refers to as zombie economics. The presenter also briefly interviews John Quiggins, the author of the 2012 book Zombie Economics.
Neoliberalism is the technical term for Reaganomics and the New Zealand version Rogernomics. Mind the Gap describes, in gory detail, how Roger Douglas’s neoliberal reforms of the 1980s virtually destroyed New Zealand’s economy. It did so mainly by destroying this country’s manufacturing sector and offshoring the majority of our manufacturing jobs.
The documentary offers a number of potential solutions to New Zealand’s current “trickle up” economy. In my mind, all would go a long way towards ending America’s growing income divide.
Suggestions offered include a financial transaction on banks (aka the Robin Hood Tax), a fairer tax policy and a clampdown on tax evasion, an end to aggressive privatization of public resources, and more cooperatives and “social enterprises” (corporations formed for the good of society rather than profit).
Enjoy.

*”Mind the Gap” is an expression borrowed from the British tube (subway) system.

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UK Greens Call to End Debt-Based Money

Posted By on September 27, 2013

According to Positive Money, the Green Party of England and Wales has joined the US Green Party in proposing to strip private banks of the power to create money. The September 13 motion calls for this power to be placed with a democratically accountable National Monetary Authority at the Bank of England.
The US Green Party has recently adopted a similar plank in their Economic Justice Platform:
15. Nationalize the 12 Federal Reserve Banks, reconstituting them and the Federal Reserve Systems Washington Board of Governors under a new Monetary Authority Board within the U.S. Treasury. The private creation of money or credit which substitutes for money, will cease and with it the reckless and fraudulent practices that have led to the present financial and economic crisis.
16. The Monetary Authority, with assistance from the FDIC, the SEC, the U.S. Treasury, the Congressional Budget Office, and others will redefine bank lending rules and procedures to end the privilege banks now have to create money when they extend their credit, by ending what’s known as the fractional reserve system in an elegant, non disruptive manner. Banks will be encouraged to continue as profit making companies, extending loans of real money at interest; acting as intermediaries between those clients seeking a return on their savings and those clients ready and able to pay for borrowing the money; but banks will no longer be creators of what we are using for money.
The New Zealand Green Party is still debating whether to include a similar provision in their monetary reform policy.
Link to US Green Party: http://www.gp.org/
Link to British Green Party: http://www.greenparty.org.uk/