Operation Twist

On September 21st, 2011, Operation Twist was set in motion by the Federal Reserve. This measure, with precedents as early as 1961, was announced at the conclusion of a Federal Open Market Committee Meeting and, ostensibly, is one of the few rounds left in the once seemingly endless magazine of the fed pistol. With world markets standing precariously close to a metaphorical abyss, politics are beginning to play a larger role, even on an institution which is supposed to be an independent body. The bum that is the economy is getting closer and closer, but no matter how many bullets are shot into his raggedy-cloth covered chest, he will not relent. He has an evil grimace, a terrible redness in his eyes, and poor Bernanke looks on helpless, holding the firearm near his chest with the world looking on. He knows there is little more he can do, but to spare his own anxiety, he shoots again, knowing what the outcome will be. This is Operation Twist, the next stage of the Fed’s ongoing policy to stop the Apocalypse. The American economy truly is in dire straits. Unemployment stood at 9.1 percent in August 2011; however, real numbers actually could put it as high as 16 percent, and manufacturing in the U.S., measured by the P.M.I., is slowing down or even declining. Across America people are suffering and losing their jobs—jobs which will never come back. Is it no wonder the government has so much pressure put on it to act? People are naive, believing that the feds can have any “real” impact on the economy. The only thing they can do is manipulate, creating fiat currency, shifting wealth, and using propaganda. These are not actual things, they are puppet shows put on to distract and distort, but they have to do something. They have to act to get reelected and earn their keep with the lobbyists. America, the beautiful, home to the corporatocracy—the interweaving of government, banks, and multinational corporations. With external pressures like these, no wonder Bernanke is sweating like a clown at a cannibal convention.

A Wall Street Journal Article, “The Limits of Central Bank Policy” by Alen Mattich, claims the Fed’s recent move to try an ease the panic has caused equity markets to tumble. Mattich postulates that investors could be merely disappointed with the amount the Fed is willing to do and frustrated that the reserve bank is not being more aggressive in purchasing Treasury Bonds. However, it could be something more: investors may be losing faith in the financial institutions themselves and giving into the belief that “central banks are at the limits of [their] policy” (Mattich). Might this be the return of real economics and not hyper-finance on steroids? Mattich seems to suggest so. Real assets prices cannot be trusted in the market because they are manipulated by a private bank with no oversight—whether this is a good thing or not. Mattich ends the article by saying, “governments have to unleash the harshest ravages of capitalism. [...] At the end of it, people will feel less well off than they did at the height of the boom, especially the very rich who have benefited to an unconscionable degree from both the debt bubble and from the rescue afterwards. But they will feel less hopeless, more inclined to invest in their businesses and their futures and thus more able to lift themselves out of this financial disaster.” Is the Fed continuing a policy which will lead to more misery in the long run or is it maintaining morally justifiable measures in the face of economic Armageddon?

But first, what is Operation Twist? It is a suggested alternative to quantitative easing in which the Fed sells shorter-term United States debt for longer-term bonds. Its goal is to flatten their yield curves, lowering them further than they already are. Originally employed in 1961 by President Kennedy and named after a dance craze at the time, it was long thought of as having disappointing results. However, according to an Economist article titled “Twisted Thinking”, some economists are starting to question its failure. Eric Swanson, who works at the Fed Bank in San Francisco, says that the old studies did not “properly isolate” the Operation Twist influences, and that it may have had an overall positive effect on the macro-economy. With this in mind, the Fed announced on September 21st, 2011 that it was going to enlist a similar measure. The plan, according to the Fed website, is “to sell $400 billion of shorter-term Treasury securities by the end of June 2012 and use the proceeds to buy longer-term Treasury securities. This will extend the average maturity of the securities in the Federal Reserve’s portfolio” (Federalreserve.gov). This action, the Fed says, will reduce the amount of long-term treasuries and put “downward pressure” on their and other close substitute’s interest rates.

Operation Twist has several attractive features. First, it does not require printing money, which is a good thing for a country with a dangerously high inflation rate (when things like food and gasoline prices are taken into account), and second, the Fed does not have to add to its ever growing balance sheet. Lastly, and maybe most importantly, it gives the appearance that the government is trying to do something in the face of an increasingly irritated and unemployed populace who mistrust the bankers (Nasad). By pushing interest rates lower, ‘Twist’ should encourage spending rather than saving, and hopefully American citizens will want to borrow more. Therefore, the Fed hopes this stimulus will cause upward momentum in mortgage loans and home ownership. However, as seen in quantitative easing, actions like these have had little effect on things like unemployment and the real estate industry in the past. On top of previous statistics, respected economists are echoing the same line: Operation Twist will have little effect on the macro-economy. A Wall Street Journal article titled “Operation Twist: A Solution in Search of a Problem” by Mark Gongloff quotes Joel L. Naroff, a major economic advisor, as saying:

Clearly, the emphasis on driving down longer term rates is an attempt to get mortgage borrowing and capital spending going a lot faster. But businesses are flush with cash already and it isn’t rates that are stopping them from hiring or investing more. Companies are just uncertain about the direction of the economy and demand is not growing fast enough to require greater job growth. Households are reducing their debt, not adding to it, and as we saw from today’s National Association of Realtors existing home sales report, failed contracts are growing. That is more an issue of appraisals and cautious lending practices than rate levels.

Naroff suggests that the main problem is not that the interest rates are too high or that the economy is even fundamentally unsound. The real issue is a lack of consumer and producer confidence. The environment simply does not feel safe to spend, to buy a new home, a new car, expand a business, or go on a vacation to New York City. No matter how many incentives the government gives people, it is not working because there is something greater going on. Considering that in real economies interest rates would be low if lenders had high faith that they would get their money back, maybe it is not the average citizen being irrational. To be rational in an economic market like this would be to save, not to spend. People are not getting tricked into getting rid of their fiat cash on something frivolous, even though by saving it is decreasing the value over time. People have lost faith. It is why precious metals like gold and silver are rising so quickly. It is why the Fed’s continued measures are having no effect. It is why people are protesting near Wall Street, why the Tea Party has become a prominent political presence, and why both “leaders” in the government and the people they lead are becoming increasingly agitated with each other. To only prove its futileness, the day after Operation Twist was set in motion, stocks closed sharply lower, with the Dow Jones falling 391 points (3.51%), the S&P 500 plunging 37.20 points (3.19%), and the Nasdaq plummeting 82.52 (3.25%). It is clear that on top of news of banks getting downgraded in both Europe and America, bad manufacturing numbers coming out of China, and the ongoing Greek crisis in the EU, that a small thing like ‘Twist’ is not going to gain any traction in a market still reeling from global events (JeeYeon).

Operation Twist will have an insignificant impact on the market. Picture the world economy on a roller coaster ride going over 150 mph, and the Fed is trying to put up a barricade made up of plank. It is clear this is not going to work. Everyone knows it, but the charade must continue. The government is increasingly backing itself into a corner. It is like your favorite television program. They keep on laying on twist after twist until there is finally nowhere to go (perhaps ‘Twist’ is the right word after all). The country is growing anxious with the burden of an economy which will not improve. What can be done? There are fewer beacons of hope. Europe is in a debt quagmire. Japan is reeling from a devastating tsunami, not to mention an economy still stagnated from the ‘90s. Even China revealed disappointing numbers when it came to manufacturing (not to mention their persistent inflation problem and real estate bubble). The Fed is doing the only thing it can: trying to alleviate the terrible news coming in from around the globe, but there is little it can do.

But are its policies actually creating more problems than they are helping? Yes. By distorting the numbers, creating money from nothing, and doping it all up on steroids, the central bank is delaying a future collapse which will happen, and they are making it worse when it does. Tangentially, myths from the world over tell of a dying-and-rising god. Let us take Osiris of the Ancient Egyptians as an example. The sun god was killed every day by the darkness of night, represented by Set, but in the morning he always returned. He was also fertility god. Dionysus, Mithras, Adonis, Baal, Tammuz, the Green Man of the Celts, even Jesus—they died, but by doing so they could give birth anew. Metaphorically, this tale tells us that for there to be life there must also be death. An economy which cannot fail is a zombie, a dead thing lumbering about, and that is what Mattich is saying. For green shoots to really appear, first there must be a fire which burns down the forest. A government (socialist) institution such as the Fed is not saving anything; it is only preserving a dead thing.

References:

Gongloff, Mark. "Operation Twist: A Solutin in Search of a Problem." The Wall Street Journal. 21 Sept. 2011. Dow Jones & Company, Inc. Web. 25 Sept. 2011. http://blogs.wsj.com/marketbeat/2011/09/21/operation-twist-a-solution-in-search-of-a-problem/?mod=google_news_blog

"JFK and Quantitative Easing: Twisted Thinking." The Economist. 31 March 2011. The Economist Newspaper Limited. Web. 25 Sept. 2011. http://www.economist.com/node/18486271?story_id=18486271

Mattich, Alen. "The Limits of Central Bank Policy." The Wall Street Journal. 23 Sept. 2011. Dow Jones & Company, Inc. Web. 25 Sept. 2011.

"Maturity Extension Program & Reinvestment Policy." Board of Governors of the Federal Reserve System. 23 Sept. 2011. Web. 25 Sept. 2011. http://www.federalreserve.gov/monetarypolicy/maturityextensionprogram.htm

Nasad, Nick. "FOMC Does the 'Twist', But Markets Respond With Risk-Off and USD Strength." FX Times. 21 Sept. 2011. Market Access Media, LLC. Web. 25 Sept. 2011. http://www.fxtimes.com/fundamental-updates/fomc-does-the-twist-but-markets-respond-with-risk-off-and-usd-strength/

Park, JeeYeon. "Stocks End Sharply Lower on Recession Fears." CNBC. 22 Sept. 2011. CNBC LLC. Web. 25 Sept. 2011. http://www.cnbc.com/id/44624491

Weekly Update News August 7th - August 13th

China warned on Sunday that the dollar will be "gradually discarded" by the world, saying that the "gold old days" of lending to the U.S. are over and calling for a new, safer reserve currency. These public lashings by America's biggest creditor came after S&P downgraded the U.S.'s credit rating to an AA+ last week and later warned that the U.S. has a one in three chance of it happening again in the future. Moody's threatened Washington with similar measures if it did solve persisting budget problems. The Chinese agency, Dagong, also let the American's debt slide from an A+ to an A a few days before S&P, a clear indication of Beijing's fear of the engorged spending of the world's large economy. Whether there will be a flight from the American currency on Sunday from the Asian markets has many waiting with baited breath. This is a terrifying predicament, and one that cannot be easily worked out of, if at all. An early indication came from Israel on Sunday, with Tel Aviv stocks closing 7% less, showing that there may be a bloodbath on the American Stock Exchange Monday. World leaders are considering a statement to ease market tensions. However, this did not happen as of early this week, and Japan's Nikkei fell over 2%. Gold broke the $1,700 mark for the first time early Monday morning, showing that the markets are handling the downgrade and instability in Europe uneasily. The Dow fell 600 points on Monday, the worst showing since the crisis began in 2008, but wildly swung up again on Tuesday. However, the dollar tumbled to new lows against the Swiss Franc on the Fed's promise to keep interest rates low. On Wednesday, the Dow fell, erasing gains, and European stocks were down 3.5% on rumors of a French debt downgrade. The Bank of England announced that an interest rate hike was no longer in the foreseeable future on news that the country is considering lowering future quarter predictions. Gold hit $1,800 an ounce on the New York Mercantile Exchange. The UN has taken this opportunity to start promoting a one world currency which will save the industrial world from the abyss. Is this really that surprising to anyone paying attention?

In the Tottenham district of London, home to one of the city's largest black communities, riots broke out Saturday night after a man was shot dead by a police marksmen. Stores were looted, buildings were burnt, and bricks were thrown across the street as the large anti-police mob fell on the city. 26 police officers were wounded, but have already been released from the hospital. The family of the deceised man, Mark Duggan, condemned the violence, with the man's brother saying, "The family's devastated. We don't want Mark portrayed as some kind of gangster. He was a family man." Twitter feeds reported some calls for people to return to Tottenham, stoking fears of future riots, and by Monday, chaos was spreading to Birmingham, Bristol, Nottingham, Leeds, and Liverpool, with flames of burning buildings and vehicles in images across London. The UK responded by putting 16,000 police on duty in attempt to squelch the madness, with London prison cells filling to capacity. Scotland Yard reports that it will start using plastic bullets on rioters and others are calling for water cannons, and one Tory MP, Matrick Mercer is calling for even tougher policing, saying, "‘I find it strange that we are willing to use these sort of measures against the Irish yet when Englishmen step out of line and behave in this atrocious and appalling way, we are happy to mollycoddle them." Some looters have forced others to strip naked to steal their belongings. And on Wednesday, three were murdered trying to defend their homes from looters in Birmingham. As economic conditions get worse, mob mentality will take over--we have already seen it Europe and in Asia. A video shows a man forced to take off his clothes. In the States, Philadelphia enacted a youth curfew to try and halt the mob attacks which have been happening in the city by black youths. The mayor told the perpetrators that "you have damaged your own race" and asked hip hop artists for their support in fighting the random mobs. In Boston, Navy Seals trained overhead, with helicopters weaving in and out between buildings in a joint federal-military exercise. Is the U.S. government preparing for a possible riot scenerio where they will need to crack down on its own citizens?

Disaster struck in Afghanistan over the weekend, with 38 people killed aboard a CH-47 Chinook helicopter in the Wardak province. It was the most deadly attack in the 10-year-old war and proves there is still danger in the insurgent-riddled country, when the U.S. is preparing to pull out--several media outlets have reported that the 19 Navy Seals killed in the incident were part of the team which killed Osama bin Laden; however, none took part in the actual assassination. The destruction of the helicopter was a trap set by the Taliban who knew where it was going to fly, with some officials pondering if the missile which destroyed the aircraft was a higher class of warhead. Could it be from Iran? Obama said that the toll was a "'a reminder of the extraordinary sacrifices made by the men and women of our military and their families, including all who have served in Afghanistan.'' Next door in Pakistan, Nato tankers were bombed on their way to Afghanistan, with at least 16 now inoperable, but the U.S. is still vowing to "stay the course". WND is reporting that Iran is preparing to wage a cyber war on the U.S., including sabotaging its power grids, for tampering with the country's nuclear program. Wounds are still fresh in the Ayatollah-controlled nation, with Stuxnet destroying the nascent uranium enrichment in 2010, and nuclear scientists consistently being assassinated, the most recent being Dariush Rezai-Nejad on July 23rd.

Weekly Update News July 31st - Aug 6th

On Sunday, the Senate Minority Leader, Mitch McConnell, said that a deal was close between Congress and the Obama administration on the debt ceiling. This is relieving news, especially with the deadline fast approaching on August 2nd, albeit meaning very little. The negotiations took place Saturday night, and resulted in a plan which will require no new taxes. The bill will raise the ceiling by about $2.4 trillion in spending, the biggest increase in history, but also cut the same amount over a 10 year period ($917 billion in the first phase, another $1.5 trillion in the second). The second $1.5 trillion cuts will be decided by a group of Senators, House members, and president (who has the ultimate veto power). Some are calling this bipartisan committee the Council of 13 or Super Congress, with Ron Paul sounding the alarm on his web site. Judge Napolitano also warned in an interview that this council is unconstitutional because it doesn't permit "normal Congress" to change the bill, only to vote yes or no. Ergo the legislative branch essentially sold away their right to run the country. Measures in the bill delay most austerity measures to 2014--minimizing the impact the deal will have on the economy in the near future, especially with Obama's reelection coming up in 2012. The Bush tax cuts are also set to expire in 2012--a fact which the president hopes will cure the unease felt by some of his party members. Obama announced Sunday, "I want to urge members of both parties to do the right thing and support this deal with your votes over the next few days." With reports of a deal finally being finalized, stocks jumped on Monday but quickly plunged with industry numbers receding more than expected. The national factory activity was below the projected 54.9, resting at 50.9--a reading under 50 indicates negative growth. This was the weakest showing in two years. The dollar remained at a low against the Swiss Franc, with the rating agencies still contemplating downgrading the U.S.'s Aaa rating. Moody's confirmed the rating on Tuesday but also gave the country a negative outlook, warning that the politicians in Washington need to make further actions to curb the expanding debt. A downgrade would result in rising interests rates, that would increase borrowing costs to $100 billion each year. It would also make consumer debt more expensive. Perhaps more importantly, the Chinese rating agency Dagong lowered the U.S. to an A with a negative outlook. Washington is now anticipating the S&P will lower its debt grade. This does not bode well for longterm American debt. On Friday, the S&P officially downgraded the U.S. debt to Aa, sending the financial industry into unknown waters when the Asian markets open Sunday morning. Congressmen who didn't support the bill, namely the tea partiers, were called addicts and delusional by an MSNBC host, Martin Bashir, and Joe Biden declared that the conservatives were terrorists earlier this week. This demonization of people is dangerous. When we want to start attacking people, we make them less than people--this sort of rhetoric can lead to Nazi Germany.

Politicians in Washington were clearly wrong if they thought by raising the ceiling the financial situation would miraculously fix itself--with numbers from last quarter dead at 1.3%, and the growth of Q1 changed to 0.4%--leaving many Americans feeling like a double dip recession is here, if it ever ended. Factory growth also faltered in Europe and Asia in July, with China's PMI drifting to 50.7 from 50.9 in June and export orders dropping in sync. Some analysts see China walking a fine line between inflation and growth--its pegged currency and glut of real estate could foment a dangerous scenario. Even in Germany factory activities are stalling, while the UK is preparing for bad news on growth. Belgium, home of the capital of EU, Brussels, is facing troubles of its own, having lasted 400 days without a government, and Israel is readying for a debt downgrade, with S&P warning that there is 50% chance it will happen in 90 days (a similar threat that it gave the U.S.). Panic is hitting Greece as the country prepares to selectively default under EU guidance. People are trying to pull money out of banks as fast as they can as Athens begins to look like Argentina in 2001. Greeks that can leave their country are doing so in mass. They no longer trust their government is doing the right thing for their country and that it has sold out to an international banking cartel run by elites. The contagion is spreading quickly to countries like Spain and Italy, their bond yields reaching new highs--standing at 6.45 and 6.25% respectively, "their highest level in 14 years" and "Italy's stock index fell 2.5 percent to its lowest in more than 27 months, dragged down by banks that have heavy exposure to Italian debt. European shares hit a 9-month low amid worries that slowing economic growth will make it even harder to overcome the euro zone's debt troubles" (Vagnoni and Mackenzie - Reuters). Berlusconi failed to calm fears Wednesday after a speech, with the eurozone crisis teetering on the edge, and Italian prosecutors taking S&P and Moody's documents to investigate their ratings. The CIO of Guggenheim Partners, Scott Minerd, told CNBC Tuesday, that Europe is on the "brink of a major financial crisis" because its "basically doing the same thing thinking they're going to get a different outcome," and that we'll soon see a flight to US Treasury bills.

Ron Paul says the American debt deal, which is being touted as great news for the world economy, fixes nothing and that the cuts the government is making is like promising you won't buy a Lamborghini. Paul's suggestion would be to freeze spending, since the U.S. government takes in $2.2 trillion a year in revenue, but spends $3.7 trillion. He added in another opposition piece that the deal, instead of cutting debt, actually adds another $7 trillion because $10 trillion in spending is authorized over a ten year period, but only $2 trillion is required to be cut. Essentially, the plan is a blank check for the federal government. With thunderous applause, the House passed the bill, after some fear that it may not have enough votes. As if she was a reincarnated goddess returning from the underworld, Giffords emerged from the doors in support of the bill, after being shot in the head last year. "So this is how liberty dies... with thunderous applause" Padmé Amidala lamented in Episode 3 as the Republic signed away its power to a dictator. Images of the Animatrix also pops in my head, with skeletons clapping enthusiastically after agreeing to black out the skies. The debt bill was signed into law by Obama on Tuesday, giving the Treasury an immediate ability to borrow $400 billion, which officially brought the US debt to over 100% of its GDP, the first time since 1947. Even so, stocks slid over 1% the same day, with downgrade fears still persisting because the bill passed only promised to cut half of what the S&P and Moody's were demanding. Obama later reflected on the crisis, "Our economy didn't need Washington to come along with a manufactured crisis to make things worse. That was in our hands. It's pretty likely that the uncertainty surrounding the raising of the debt ceiling for both businesses and consumers has been unsettling and just one more impediment to the full recovery that we need and it's something we could have avoided entirely." Several prognosticators are predicting gold to rise to $3,000/oz and silver to $65/oz in the next 6 to 12 months because of the continuing uncertainty from Europe and America and heavy demand out of China. A Reuters article commented on South Korea's large purchases of the precious even in the face of record high prices. With the only real way out of current spiral being inflation resulting from the printing of more money, commodities are a great bet to secure your future, and many countries are doing just that, including Russia, Thailand, the aforementioned South Korea, China, India, and even Greece.

Obama is like a European king or Roman Caesar--he parties as the serfs suffer. I picture a court with jesters juggling, midgets dancing, and sword eaters eating swords--Obama sits on his golden throne, a high chair with spikes along the top to represent sun rays. A servant feeds him grapes as he laughs and cheers, clapping his hands in delight. Outside his castle, people are digging holes in the mud and shouting "bring out your dead!" The country is on fire and Obama is either out-of-tune with the average American's plight, or he simply doesn't care. His 50th birthday bash is being prepared in Chicago, with helicopters flying over the city Wednesday morning, and will take place in the Aragon Ballroom in Uptown. It will showcase Jennifer Hudson, Herbie Hancock and OK Go for $50 or a max donation of $35,800. It seems Obama is doing a bit of early campaigning--but how much at the expense of the taxpayer? The Aragon costs $40,000 a night, and you can pay an extra $10,000 to get a picture with you and the president! Pat Brady, a Illinoisan Republican chairman said on Tuesday, "We're nearing a double-dip recession. We've lost 125,000 jobs here in Illinois just since he took office." The GOP is lambasting Obama, saying that this expensive outing should instead be used to help Americans with unemployment and the only job Obama cares about his own. They are taking pot-shots at an easy target, like shooting fish in a barrel. For some reason, I can't get the image of Prince Ali making his way to the Sultan's court. He rides on an elephant, surrounded by women and magicians. He smiles and waves and the crowd swoons. Trumpets blare. Singers sing, "Make way for Prince Ali" like in the Disney film. And why shouldn't he be partying? He just made out with one of the biggest power grabs in American history as well as a blank check to spend as much as he wants before the 2012 elections. Perhaps the Eastern king symbol isn't too far off--the Russian president Dmitry Medvedev called Obama on Wednesday to wish him a happy birthday. One thing led to another, and they're talking about Russia joining the World Trade Organisation--another victory for globalisation! Party time!

On Thursday, the Dow sharply fell over 300 points to 11,589, a 2% slide and the worse since December 2008. Another laughable government statistic released showed that the number of weekly applications dipped to 400,000--this is after they adjusted the week prior's to 401,000 from 398,000--the tally has been over 400k for 17 straight weeks. The government can claim anything as long as they fix it sometime afterward it appears. Apparently these statistics are proving that the economy is recovering, when in fact, the stocks prices are showing otherwise. Across the nation, people are suffering, feeling the walls coming in around them, the despair of losing a job, of not having enough money to pay back a loved one's treatment. In Bellview, California, a renter took the AC from the home and sold the parts for $18. From reports these reports, it appears the Golden State really is receiving a beating. A bronze statue of a dog in nearby San Franscisco has some speculating it was stolen for a quick buck, and in Apple Valley, California, school bleachers were grabbed for their aluminum. Food stamp use has a record 45.8 million users, almost 1/6 of the U.S. population, and they tell us the economy is improving? The Postal Service is close to defaulting, warning that it wouldn't be able to pay obligations to the federal government soon. Gerald Celente warns in his Trends Journal for summer 2011 that it is only a matter of time before another terror attack happens in the US: "What will another major terror strike mean? Should an attack hit one of the major NATO nations, the effects, this time, will go global. Bank holidays will be called, the US and other fragile economies will crumble, gold and silver will soar, and already-troubled currencies will crash. Economic martial law will be declared. Introduced as a temporary measure, once in place it will remain in place (like the curfews and draconian security precautions installed by despots and dictators everywhere). Civil rights will be suspended and, particularly in America, Homeland Security, already intolerably intrusive, will achieve an Orwellian omnipresence." Could this Council of Six or Super Congress be just another step on the way to complete 1984-esque control of the country? The Obama administration is certainly stepping up gun grabbing, with the ATF demanding that gun shops report to them if someone buys more than one firearm in Texas, New Mex, Az, and Nev. This measure is, if not unconstitutional, illegal. There is no law written down that they can force any shop owner to do this. Shocking news from El Paso indicates that the feds may have let a drug cartel move cocaine for information on other gangs. The hypocracy of the government is disgusting. They can create strange new weapons like a pain ray, "screaming microwaves that pierce the skull, and "mobile biometrics", and facilitate arms and drugs crossing the Mexican border illegally, but they want to control our use of weapons.

An Infowars article by Kurt Nimmo reports that Michael Hayden, a former higher up in the NSA and CIA, is calling on a "Digital Blackwater" to patrol the internet. With groups like Anonymous and LulzSec calling all out war on elitist activities, even posting Nato communications after hacking a U.S. cyber supplier, and trying to shine the light on the Bohemian Grove last month, the higher ups are starting to get increasingly nervous of the power of the internet. Reports on Wednesday say that Governments, IOC, and UN were the victim of an unprecedented cyber attack, claims McAfee. This time the blame is falling China, which has denied such allusions in the past. Americans should worry that these attacks could be used as reasons for tighter controls on the internet from the Federal Government.

In Syria, 80 activists were killed in the city of Hama on Sunday when the regime tanks and snipers started firing on civilians. Countries in the West feigned horror, with Obama lamenting that "the reports out of Hama are horrifying and demonstrate the true character of the Syrian regime," and France and the UK also condemning the actions. Italy called for for a statement from the UN Security Council. However, countries like Russia, China, South Africa, India, and Brazil have so far blocked actions by the UN. They are afraid that by condoning such measures may give NATO the go ahead for military action like it did in Libya. The casualties in Hama are particularly significant because it was this city where Bashir's father, Hafez, crushed the resistance almost 30 years ago. One activist, Yasser Saadeldine, said, "Assad is trying to resolve the matter before Ramadan when every daily fasting prayer threatens to become another Friday (of post-prayer protests). But he is pouring oil on a burning fire and now the Hama countryside is rising in revolt." The attack on Hama continued on Monday and killed at least four more civilians, bringing the total to 84. According to DEBKAfile, an Israeli voice piece, Assad is now waging war on a 20,000 square kilometer area (about the size of Israel), on the "the 3.5 million inhabitants of Hama, Deir al-Zour, Homs, Idlib and Ar-Raqqah." The death toll of this expansive region Sunday was 150, with dark clouds rising over the dissident city of Hama. The article reports that Assad's confidence was bolstered by the resignation of Turkish Military Officials and the failure of the U.S. to act after a debt deal was made, with "urgent White House requests Sunday night to Turkish Prime Minister Tayyip Erdogan to send into northern Syria the Turkish units held ready on the border for two months to establish a protected zone for refugees and the growing number of Syrian army deserters seeking asylum. Operational plans for this incursion had been in place for some weeks, ready for execution as soon Assad launched a general offensive against the opposition" (Debka). Other Arab countries have remained silent on the Syrian bloothbath, except for the outspoken country Qatar, where al-Jazeera is based, which continued the freezing of the country's assets. Another Debka article reports that Russia has gone out of its way to defend Assad, but at the same time wishes to halt Iran's reach for a nuclear weapon, writing "Russia will block a strong UN Security Council resolution condemning its ally Syrian President Bashar Assad for his brutal crackdown on dissent, thereby shutting the door to approval of Libya-style outside military intervention. Tehran will reciprocate by cooperating with the Russian plan for solving the nuclear controversy along the lines proposed by Foreign Minister Sergey Lavrov in mid-May: '…each time when Tehran satisfactorily answers the questions or concerns of the International Atomic Energy Agency (IAEA), it should be encouraged, including some sanctions should be frozen,' he suggested" (Debka). The UN Security Council finally passed a resolution Wednesday, condeming Assad's actions against his own people, however sanctions can't be applied--the Council is not a stepping stone for future measures. The Syrian opposition claimed the measure was too little, too late. A leader of the demonstrators, Ausama Monajed, said, "After more than 2,100 people were killed, is this the language we want to see from the United Nations Security Council? Do we need to wait for a million people to be slaughtered on the streets of Syria before the international community takes action? We are watching another Rwanda take place, another Darfur, another Kosovo and the international community is doing nothing." A Thursday article reported that "people were being slaughtered like sheep" with young boy being run over by a tank on a motorcycle. The death tally may be as high as 250 killed this week.

The US and Saudi Arabia are looking into an "India-style" nuclear pact, with fears of Iran's growing influence in the region. Iran's arms are reaching around the Middle East's largest country, with the Persians waging a proxy war in Yemen and gaining more control in Iraq. The Saudis are growing increasingly fearful that Iran will obtain a nuclear weapon, forever changing the power dynamic between the two. This report is unsurprising, but it is also here where Osama in Laden hails and gave birth to many of the extremists responsible for 911. Iran, the country with the second largest oil capacity in Opec, has a growing role in the cartel. A commander in the Iranian revolutionary guards, Rostam Ghasemi, was made president of Opec. He has had sanctions on his head from the U.S., EU, and Australia. Some see this as a move by Admedinejad to heal ties between the Ayatollah, who controls the guard, and will also allow the guard unprecedented control over the cartel and the world's oils prices. In Egypt, the army broke up the protests in Tahir Square on Monday. The demonstrators, who are angry with the regime they see as a continuation of the former president's government and the delayed trials for officials and police who ordered and carried out the attacks on protesters in the winter and spring, also showed a more conservative element, making commentators worry that the country may start seriously considering Shia law. Mubarak himself has acknowledged that he will appear in court later this week and did on Wednesday. He was rolled out in a bed and placed in an iron cage on live television, a common practice in the Middle East. His sons, Alaa and Gamal, and several other accused officials were also with him. Mubarak denied the claims made against him. For the last few months the 83 year-old has been held in the resort town of Sharm el Sheikh by the Red Sea, but after the proceeding the judge said he would be transported to a hospital in Cairo. These trials are significant because it is the first public hearing of a leader who was ousted during the Arab Spring and was watched closely across the Middle East. In Libya, another country still realing from protests, Seif al-Islam el-Gaddafi, Muammar's son, said in an interview that he will try to form ties with Islamists. “The liberals will escape or be killed,” he said “We will do it together. Libya will look like Saudi Arabia, like Iran. So what?” Will the Arab Spring give birth to more liberal democracies, or will see Shia law gripping futher into the Muslim periphery?

In Russia, Putin blasted the US as a "parasite" on the world economy, living beyond its means, and capitalizing on the dollar monopoly. He called for a new reserve currency, on what many see as early campaigning before his run for presidency in 2012. Relations between the US and Russia had seen an improvement when Medvedev took over Putin's office in 2009; however, things have recently been souring with a bill in the US Congress condemning Russia's human rights record. The Eastern country has said it would stop cooperating with the US on Iran and Afghanistan if the bill passed, and even pulled back on its negotiations with Libya. A Washington Times article claims that the Russians have stepped up harassing U.S. diplomats in former Soviet countries, saying that some have "found their homes broken into and vandalized, or altered in ways as trivial as bathroom use; faced anonymous or veiled threats; and in some cases found themselves set up in compromising photos or videos that are later leaked to the local press and presented as a sex scandal" (Eli Lake - WT). Will the Arab Spring spread to Israel? Most municipalities in the Mediterranean country decided to recognize the protests as legitimate and declared a strike. The demonstrators are angry about the high price of housing. Netanyahu and the Israeli Treasury are at each other's throats about how to proceed, with the Finance Ministry Director Haim Shani resigning from his office. Israel is one of the last true bastions of stability in the Middle East, if it goes under, who knows where the dominoes will fall.

Weekly Update News July 24th - 30th

With debt negotiations stalling in Washington, gold is reaching new highs, standing at $1,622.49 an oz early Monday, while the USdollar is falling against the Swiss Franc and Yen. Investors are getting increasingly nervous with the debt ceiling dilemma still unresolved. The Dow Jones and S&P opened lower on Monday, with the only sign of life being companies like Apple. Moody's and the S&P are now saying that even if a short-term debt deal is passed, it may not be enough to stop a credit rating adjustment, and on Saturday warned that the "reductions of the magnitude now being proposed, if adopted, would likely lead Moody's to adopt a negative outlook on the AAA rating." Neither plan will save the United States. This is an ill omen for markets around the world, which have so far been unaffected by the crisis. Geithner, the Treasury Secretary, is trying to ease investor fears of default, saying, "We never do that. It's not going to happen." Reid and Boehner are writing their own bills, hoping that by presenting both that the talks would be reinvigorated. After being ditched on Sunday by members of Congress, Obama has decided to stay away, in a bid that his absence will breed results. However, on Monday he again called for a plan that would slash spending but also raise revenues (a nice word for taxes) for large corporations and the rich. I think Obama is correct in trying to incorporate measures from both parties, but the U.S. is still going to be left with obligations which it can't pay back, with a Chinese official saying the U.S. has already technically defaulted by weakening its dollar. On Wednesday, just six days before the deadline, both the Senate and the House had to scrap their plans and restart.

Members in Congress weren't just unable to come to an agreement between Democrats and Republicans, it was also hard on the individual party level. Boehner didn't have enough votes from his own party to pass his bill through the House on Tuesday, so he later placed a balanced-budget amendment into his plan, hoping that it would give it enough Tea Party support. However, the Senate Majority leader said he would kill the Republican bill in the Senate, mentioning “this is likely our last chance to save this nation from default.” None the less, he said that he would present something to the Senate on Friday--possibly some agreement between the two bills from both chambers. Jay Carney, a White House spokesman, lamented on the proposed plans, "We have a divided government. We have a two-party system. No party controls every branch of government. Compromise is the only option", but ironically, Boehner's bill was ridiculed and compared to the Grinch who stole Christmas by the White House because of its two-step process, saying “Happy Holidays America: Boehner plan would have the debt ceiling all over again during the holiday season, which is critical for the economy.” Insult slinging like this is one of the main factors in why a package hasn't been passed yet, with Carney calling the GOP "incredibly juvenile" and actively "trying to stick the President with default" on Fox News. Obama said he would veto the two-part bill if it managed to get through anyway. To show how far down the line we are getting, a group of House Democrats, led by Rep. James Clyburn (D-SC), are calling on the President to raise the debt limit if Congress can't pass one in time. They are invoking the 14th Amendment and the phrasing that the US government's debt validity "shall not be questioned". Clyburn later compared this measure to the Emancipation Proclamation, saying, "It was an Executive Order. We integrated the armed services by Executive Order. We integrated public schools by Executive Order. Sometimes executives must order that things get done." Obama has said in the past that he will not use the amendment to raise the ceiling, though lamented that is was "very tempting" at a La Raza conference last week. The crowds reaction to this creeps me out. As of Saturday, July 30th, Boehner's bill passed the house but was quickly killed by Reid in the Senate. Now it appears both bills are dead, with only three days left to go.

A Republican representative from Iowa, Steve King warned that Obama risked impeachment if a bill did not pass, and he may be right. Americans will be rioting in the streets if their Social Security and Medicare checks do not go out, a possible refreshing turnaround from peoples' normal boredom with real issues. And honestly, the president may deserve it. Earlier in the week, a Republican aide reported that a two-part bipartisan plan proposed by Reid and McConnell, which would raise the short-term debt and follow that by further conferences "to find long-term savings", was rejected by the White House. This is laughable, and goes to show that Obama does not hold the American people above his own stalwart beliefs. At the end of the week, we are still left without a solution, and Obama could have fixed it. In Europe, Moody's cut Greece's debt rating to Ca, bringing the country even closer to default, saying, "The announced EU programme... implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100%." This makes Athens' rating the lowest in the world and almost guaranteed to default. Fears are also burgeoning in the UK, with growth falling well below forecasts. The economy only grew by 0.2% in the second quarter, stoking accusations that the UK may also lose its Aaa standing. Healthcare rationing is now being ratcheted up in the country, with procedures like "hip replacements, cataract surgery, and tonsil removal" being held from the public. Meanwhile in Italy and Spain, bonds are declining with fear that the aid Europe provided for may not be enough. In Michigan, more populated sections of Detroit will be given higher levels of services, with "things like tree trimming, attracting businesses, code enforcement and public lighting will get more attention in the city's best neighborhoods" (CNBC). Sections will also be decided on their ability to survive into the future. Bank of America has plans in Detroit and other Midwest cities including Cleveland and Chicago to donate houses to a "local agency that manages blighted property," which then would destroy the properties. Detroit is dying, and we shall see it in our lifetime.

The West, which stood at the peak of civilization for almost 300 years, may finally be falling behind other nations beating them at the their own game. Both the dollar and the euro stand on precarious grounds, with the stock market falling in America on Friday upon news that growth slowed to an "anemic" pace because of the Japan disaster and the threat of a government shutdown in the first quarter, and actually was precariously near contracting into a recession. Second quarter growth fell well behind projections at 1.3%, and the first quarter was revised to 0.4% from 1.9%, with economists fixing the projected growth for the 4th quarter down to 2.3% from 3.1%. Buried at the bottom of the article linked above by Lucia Mutikani is that inflation in the US (not including food prices mind you) rose to 2.1%, higher than the Fed's sought after 2.0%. Inflation numbers have been baked for a long time by not including commodities like food, and focusing on real estate values. These numbers are scary, and with the debt talks still stalled in Washington are economy is fast approaching a cliff. It's easy to lose the confidence you have, and hard to get it back. Latest financial news show that Apple, the largest tech company in the world, has more cash than the United States Treasury. Matt Rosof in a Business Insider article reports that "in other words, the world's largest tech company has more cash than the world's largest sovereign government. That's because Apple collects more money than it spends, while the U.S. government does not."

The biggest municipal default in the history of the US is being prepared in Alabama's Jefferson County. Two county commissioners claim there is an 80% chance of defaulting. With a debt over $3 billion and the largest population in the state, the impact of this will be unprecedented. In the coming months and years watch this become common, for cities and states as well. According to a Washington Post-ABC New Poll, almost a third of Americans believe that the President is hurting the economy, and their lives, with his policies. The other side of the aisle was not left out of the peoples' scorn however, with an equal number blaming the Republicans for the current state of affairs. On jobs, they are even more angry, with 65% blaming the GOP and 52% Obama, with the overwhelming majority being down on the nation's economy and the ease of finding a job (90% and 80% respectively). The break down of the party structure is in its early stages. People no longer care who is in Washington, only that something is being done to help their lives (or stay out for us Libertarian minded persons). More critically perhaps, the president is losing the support of liberal Dems, including African Americans, with one article reporting that minorities have the largest wealth gap from whites in history. Even Bernie Sanders, an Independent Senator from Vermont who usually sides with the Dems on issues, said recently, "I think it would be a good idea if President Obama faced some primary opposition." If Obama is going to win the next election, he needs to regain support not only from the liberals, but also the independents who voted for him 2008, And he also has to work on job growth, which was at a 3-month high at the end of July--judged by how many people are applying for unemployment benefits. However, Bloomberg's Consumer Confident Index decreased to negative 46.3 and only six percent of people had faith that economy was in good shape.

While most of Congress worked to raise the debt ceiling, a secret committee met to talk about a surveillance bill which was passed during George W. Bush's tenure. It approves 16 spy agencies activities and was set to expire in 2012. The Obama administration has made it clear that it doesn't want that to happen. The surveillance state is spinning out of control. Soon there will no bastion of privacy left. The TSA is preparing new behavior detecting strategies for airports, with Pistole has said will involve more dialogue with passengers. These procedures have been quite effective in Israel; however, they involve more racial and religious profiling.

Europe is on high alert after Anders Breivik told a judge that there are two similar cells which exist within the EU. His lawyer, Geir Lippesad, says the killer is insane and was on drugs when he was shooting to make him more 'strong and efficient'. He is currently on suicide watch. Anders believed his terrorist actions were in attempt to save the Continent and Christendom from the danger of Islam after admitting to both incidents (in Oslo and on the massacre on Utoeya isle). He, however, denied committing in any criminal activities and any thing he did was in fact a way to stop the encroachment of "Marxists" and "Muslims" into European society. Gro Harlem Brundtland, the PM of Norway in the '80s and '90s and a member of the Labor party, was his "main target" because of her liberal policies which allowed more foreigners to enter the country. However, she had left Utoeya before he arrived because he was "delayed". According to his manifesto, the killer's intentions were to bring about a cultural revolution. In his mind, the huge threat of multiculturalism and Islam needs to be extirpated, wanting to drive out the invaders and remake a Christian Europe. Interestingly, in several pictures he appears in Free Mason garb and was a member of group proclaiming to be a new age Knights Templar. The alternative press are already declaring that this was an inside job akin to 911, 711, and Oklahoma City, with drills taking place in Oslo the day before the attack happened. Could Breivik's rampage be a distraction away from the imminent threat of Greece's default, and the spreading contagion across Europe? It also coincides with American propaganda warning about "White al-Qaeda". The DHS released a video last week which depicts white terrorists attempting to bomb American targets. Daniel Taylor of Infowars reports that western governments will now move inward against their own citizens to root out terrorism. Always be suspicious of these attacks. Who is to gain the most? Do their stories hold up after further scrutiny? No killing is commendable, ever--not by you, not by your government. It was reported by Alex Jones' Prison Planet on Monday that Anders' name was known by the police before they arrested him. This discrepancy is strange--why did they know his name? There has also been conspiracy theories bristling around why it took 90 minutes for the authorities to reach Utoeya, and that when they approached him, they asked him for him by name. Parts of his 1,500 page Manifesto have been directly plagiarised from the Unabomber's Manifesto, with only key words changed to match his ideology, it was discovered. The Western media has linked his choice to steal from Kaczynski without crediting him to his extremist beliefs. There has been some speculation that his Facebook and twitter profiles may have also been tampered with, changing his religion to Christian and politics to conservative after the shooting took place. In a WND article, there is even some question what religion he identified with. Breivik writes, "As this is a cultural war, our definition of being a Christian does not necessarily constitute that you are required to have a personal relationship with God or Jesus." Some see this attack as a possible globalist retaliation against Norway's support of Palestine in the coming September UN vote for recognition, and its planned leave of Libya airspace in August.

Russia warned the US Wednesday that if Congress passes legislation critical of Russia's human rights record it will no longer cooperate with the US on Iran and start selling dangerous materials to Afghanistan. Recent leaks have made the situation between the Americans and Russians more ice-y. It was revealed that the Eastern country may have played a part in the 2008 explosion at the American embassy in Georgia. It was not immediately clear why. The Federation has played in an intimate role recently in brokering negotiations with Libya. It also has a growing influence across the Mid East and fears the Americans are encroaching on its historical territory. As if also to spite Washington, Russian officials announed plans to end the International Space Station in 2020. Petulant politicians on the other side of the Pacific blasted Moscow for bluffing, as Putin mentioned he is thinking of returning to the presidency in 2012. In China, officials proclaimed its intentions to refit an imported Soviet aircraft carrier Wednesday, and that it would be attempting to build two of its own. This is an escalation of tension in the region, with the Chinese telling the Americans to keep its spy planes from its coast after a PRC jet 'repelled' a US craft near Taiwan last month. China has been stalking up on missiles and submarines and launched its largest amphibian dock landing warship, Jinggangshan, which can hold "1,000 soldiers, helicopters, armored fighting vehicles, boats and landing craft" recently. The Asians are increasing their military spending as America looks to pull back its. It appears that OPEC will soon be led by a member of Iran's Revolutionary Guard. Commander Rostam Ghasemi is on the fast track to head the cartel of oil producing nations. This is a strategical move by Mahmoud Ahmadinejad who is on razor's edge with the Ayatollah controlled Guard. By positioning the Commander at the seat of OPEC, he may ameliorate tensions between Khamenei and himself. Ghasemi himself has had sanctions placed on him from the U.S., EU and Australia. China and Iran have also been cozy-ing up to each other with their oil-goods swap talks. An alliance in the East may be a headache for the West, which is still threatened by Iran's increasingly brazen attempts at creating a nuclear warhead and proxy battles in Iraq, Afghanistan, Lebanon, and Yemen.

Iranian Qassem Suleimani, a man as illusive as Keyser Soze, is said to be the real honcho in charge in Iraq, with growing influence in the Muslim world, including Syria. His name is spoken with both reverence and fear inside the sectarian country--his deadly al-Quds force is responsible for all but two of the military deaths of Americans (under the guise of the Keta'ib Hezbollah and the Promised Day Brigades) in June and has been allied with Assad's force in Syria squelching unrest. A record number of Iranian weapons are being found in Iraq, proving the that the Shia country is trying to stoke unrest and keep Iraq in a stable form of chaos. The three-star army general, Mike Oates, said, “Their intent is to bleed U.S. forces on the way out of Iraq for some sort of moral victory, as well as to reestablish coercive control over Iraqi governors in the south by showing off their capacity to carry out these kinds of sophisticated attacks.” In Syria, a voice of the protests, a songwriter, was found with his throat carved out, a warning from the regime to scare its dissenters. Syria demonstrators are disappearing at a rate of one every hour, according to a Guardian article. 12,617 activists are still being held by the government. On the other side of the border, Turkey's military chiefs resigned in protest of Erdogan's treatment of other senior officers. Turkey needs to show a united front against the specter of Iran if they want to maintain their influence in the region. NATO has yet to comment on the incident. Protesters, including the Muslim Brotherhood and more conservative Islamic groups like the Salafists, poured into Tahir Square in Egypt this week, in protest of the delayed trials of Murbarak and police officers who shot demonstrators earlier in the year. A New York Times article reports that they want to overthrow the military regime, which they see as a continuation of the outed president's government, and implement Sharia law. A pipeline going into Israel from Egypt was attacked again. No one was killed, but it is a worrying sign that the post-revolution country may be sliding into anarchy, with one blogger calling the protests in Tahir Friday, “The Friday of Disunity: A carnival of reaction and bigotry.” NATO's campaign in Libya may also be falling apart, with a rebel leader Younes getting shot by people on his own side Thursday and the Obeidis, his tribe, declaring revenge on the perpetrators. Both the UK and the US were considering allowing the rebels to open an embassy in their capitals (laughable because of al-Qaeda's presence in the group), but the insurgency is losing ground and credibility in Libya.

Weekly Update News July 17th - July 23rd

Gold surged past $1,600 on Monday, highlighting investor's fear of fiat currencies and government bonds, with CNBC saying the precious metal could reach $1,700 by the end of year. Gas prices are also soaring, settling above $4 dollars in four states, as Obama officially vowed to veto spending cuts which the GOP congress may try to pass in a "cut, cap and balance" bill, which passed through the House Tuesday night. The White House said in a statement, that “instead of pursuing an empty political statement and unrealistic policy goals, it is necessary to move beyond politics as usual and find bipartisan common ground.” Wall Street is starting to feel jittery with the debt crisis still unresolved in Washington, the Dow falling almost 93 points on Monday, and Moody's suggesting the US eliminate the Debt Ceiling entirely to sedate bond holder anxiety. Moody's has threatened to reconsider the US's AAA rating if the limit isn't raised and suggested that the Americans consider a European style Maastricht rule which limits the government's debt from exceeding 60 percent of the GDP. The rating agency is also warning it might downgrade 5 states' debt--Maryland, New Mexico, South Carolina, Tennessee, and Virginia. The GOP in the House, for their part, have ignored the Thursday deadline which Obama set during a meeting, and forwarded the aforementioned bill Tuesday, which would "cut $111 billion in fiscal year 2012, cap spending at 18 percent of gross domestic product by 2021 and would authorize a $2.4 trillion increase in the debt limit after Congress passes a balanced budget amendment" (Bolton - The Hill). Obama is instead favoring a proposed bipartisan bill, titled the Gang of Six plan, drafted by three members of each party that would "cut the nation's debt by about $3.7 trillion over the next 10 years -- similar to the president's call for roughly $4 trillion in savings" and would "would create three tax brackets with rates from 8% to 12%, 14% to 22%, and 23% to 29%" (Silverleib, Cohen - CNN politics).

The New York Times said on Thursday that Obama and Speaker of the House Boehner are nearing a deal. The details of the negotiated package are still unknown, but they are believed to contain an adjustments to taxes and cuts to many programs (Medicare included). However, debt talks between the two broke down Friday, with Boehner deciding to end the negotiations, writing, "It has become evident that the White House is not serious about ending the spending binge that is destroying jobs and endangering our children's future. A deal was never reached, and was never really close." McConnell and Reid continue to work on a back up bill which would give the president complete power to raise the debt limit for the rest of his tenure. Obama said in a press conference that he is confident that Congress will pass a debt deal because they are not so irresponsible to inflict a wound on the economy. The two sides can't stop bickering and posturing for a minute to solve a crisis. Who will hurt the most when the dollar collapses? Not the elites who control Washington. Watch them crash the system in an cruel and unforgiveable way to get more power and money. They don't care about the Middle Class American trying to get by--they care about their purse, about the lobbyists and donors giving them money. The left and right are just a gameshow, a sports arena, to keep us entertained and ignorant towards what is really going on. I predict no bill will pass until the very end, and it will be McConnell and Reid's deal--a completely illegal powergrab by the executive branch. Meanwhile, Geithner met with Hank Paulson, his predessor, and fed officials on Friday, in preparation of the U.S.'s default on August 2nd, if a compromise cannot be made. Paulson said, “Failing to raise the debt ceiling would do irreparable harm to our credit standing, would undermine our ability to lead on global economic issues and would damage our economy.” Geithner might have a conscience (who knows? he might, he wants to leave; maybe he's feeling guilty), but do not trust anything he does. He sold his soul a long time ago. To add further bad taste in my mouth, according to some counterterrorism experts, the debt crisis could result in an attack from al-Qaeda. Infowars reports one official saying, “So you can understand why Al Qaeda, or any other terrorist organization motivated by the jihadist ideology, would see that America is highly vulnerable right now – perhaps more than it’s ever been — to an attack or attacks the impact or direct effect [of which] would be further depression of the US’s economy.” This is coincided with the Obama administration using increasingly alarmist language, painting a picture of biblical Armageddon. Backward terrorists in caves are again being used as the chief enemy--be it battles in Washington or in the Middle East. It should be disgusting to any American that fears for their own safety, and the safety of their family, are being played with my politicians.

One of the few honest politicians left in Washington, Ron Paul (R-Tx.), said that America will default "because the debt is unsustainable," and won't "be because we don't send out the checks. We will send out the checks. It will be defaulted on because people will get their money back, or they will get their Social Security checks and it won't buy anything," and that the debt talks are essentially rearranging chairs on the titanic. China, the largest holder of U.S. debt, urged the government to ease bond holder anxiety and pass a debt deal, with an official saying, "We hope the U.S. government will take responsible policies and measures to boost global financial market confidence and respect and protect the interests of investors," when prompted whether China would lower its investment in US bonds if the rating agencies cut its credit rating. Latin America has taken on both an air of boastfulness and fear at the U.S. and European's problems, with Brazil owning the fourth largest amount of the U.S.'s debt. However, after years of being lectured to by the self-righteous North Americans about their own debt, the South is celebrating. Argentina's President Cristina Fernandez raved, "When did the American dream become a nightmare?" after Washington's lackadaisical boredom towards her country's default in 2001. It was revealed by the Treasury Department Thursday that U.S. taxpayers lost $1.3 billion in Chrysler's bailout. It is yet to be seen whether the benefits will outweigh the costs in these huge money dumps; however, Reuters reported that factories were more active in July in the Mid-Atlantic, but jobless claims remained at the high of 421,250, which is 15 straight weeks of being over the 400k mark. In Europe, leaders met in Brussels to discuss a new bailout fund for Greece, lifting stocks around the world on Thursday, which also coincided with a debt deal looking likely in the U.S. However, with the markets still jittery in Europe on Friday and the breakdown of negotiations in the U.S., things could turn very badly indeed for the world economy. Thieves in Sacramento are stealing storm drain grates off of streets in a hopeful bid to sell them to copper recyclers, and elsewhere in California, farm commodities such as grapes, and even bees are being taken from farms. In Texas, ambulances have been subjected to robbers right outside the hospital doors. Times are getting tough across the nation. McDonalds' net income, which always does well during recessions, rose 15% in the second quarter of 2011. This is not a good sign. It shows people are sticking to cheap food and not feeling confident enough to eat out at more expensive restaurants.

Iran officials announced that the country would be installing new, more advanced centrifuges in a uranium enrichment plant Tuesday, angering Western upper brass. This move is seen as an acceleration of its nuclear program, with Tehrain claiming that the procedure could triple the rate of enrichment. The Islamic country has clearly been learning from its mistakes and set backs. After the Stuxnet attacks last year, Debka reports, the Persians decided to completely scrap the old machines, and replace them with new ones while the Arab Spring distracted the West. Now things appear to be heating up again, with the Iranian media outlet, Fars, claiming an American drone had been shot down over the Fordo nuclear plant in Qom on Wednesday. Lawmaker Ali Aqazadeh Dafsari said that this was only one "several" which have been brought down over the past seven years from Israel, Britain, and the U.S. doing reconnaissance missions on Iran's nuclear capabilities. On Saturday yet another Iranian nuclear scientist was assassinated in front of his house. As usual, this will probably get blamed on the Israeli Mossad, and rightly so. Robert Baer, an Ex-CIA officer who has worked in the Middle East for 21 years, warns that the war-hawk prime minister of Israel, Netanyahu, is gearing up for war against Iran in September before the vote on the Palestinian state takes place and wants to draw the U.S. into the conflict. The article by Tyler Durden of Zero Hedge, claims, "The Israeli air force would attack 'Natanz and other nuclear facilities to degrade their capabilities. The Iranians will strike back where they can: Basra, Baghdad', [Baer] said, and even Afghanistan. Then the United States would jump into the fight with attacks on Iranian targets. 'Our special forces are already looking at Iranian targets in Iraq and across the border [in Iran] which we would strike. What we’re facing here is an escalation, rather than a planned out-and-out war. It’s a nightmare scenario. We don’t have enough troops in the Middle East to fight a war like that.' Baer added, 'I think we are looking into the abyss'." These reports would make sense in light of Iran's recent threats of shutting down the Strait of Hormuz and shooting a missile into the Indian Ocean. Currently, the LHD 5 Bataan amphibian ship is anchored outside Tripoli, and the USS George H.W. Bush is moving into the Persian Gulf. DebkaFILE, an Israeli military voice piece, reported a few weeks back on Obama and Sarkozy's plan to settle the Palestinian-Israeli conflict by September after the Libya ground war, but it appears that the Libya conflict may get called off with Gaddafi expressing that he may exit if certain guarantees are met.

The attack on Iran may be diverted because the Israeli PM is quickly losing support, with only 4 of the 18 security chiefs (Mossad and Shin Bet) still independently support him. Tyler Durden laments that the Iranians also need an "external enemy" with their worsening economy and would welcome an attack by the Zionists now that the Americans plan to leave. It is important to remember that just five years ago Israel was embroiled in a proxy war with Hizbullah-controlled Lebanon. At the end of the 34 day skirmish, Hizbullah was not destroyed, and according to Caroline Glick's article "The Path to the Next Lebanon War", "Hezbollah has not merely refilled its depleted missile arsenals. It has tripled the size of its missile arsenals. In 2006, IAF strikes in the first 24 hours of the war knocked out all of Hezbollah’s long-range missiles. Today, not only have those stocks been replenished, Hezbollah’s arsenal includes missiles with ranges covering all of Israel, with larger payloads and many with guidance systems" (FSM). If Israel was to go to war again, Hizbullah will have gotten much stronger.

Syria also has the potential to be a greater threat, with Naharnet Newsdesk claiming that the U.N. was briefed on the nuclear activity in Syria in a closed door meeting last month. According to the International Atomic Energy Agency (IAEA), Israel destroyed a nuclear reactor in the country in September 2007. Who knows what weapons have been supplied to Assad's regime from Iran, China, and Russia? Syria delivered another devastating strike on pro-democracy protesters in the city of Homs on Wednesday, with 16 killed in the streets from those loyal the Assad regime. Included in those dead were people marching in a funeral procession for fallen demonstrators. Some of Assad's supporters are disgusting, with one Syrian tribal leader threatening to eat the U.S. ambassador to Syria, Robert Ford, if he stepped foot in his territory, warning, "We are known for having the best mutton in the world. For the first time, Allah willing, we will be eating American mutton. Whether his flesh is bitter or not, with salt or without salt—we will eat him up." The pressure is heating up further, with Qatar, the home of the al-Jazeera news agency and a former supporter of Assad, closing its embassy in Damascus Monday, and the EU saying it might increase sanctions. Investments in Syria from the Qataris is reported to be frozen after diplomats from the country were pelted with debris. Damascus has been angry with the Gulf country since the beginning for reporting on the protests. There was a fascinating but long article in the NYT Wednesday, "Yemen on the Brink of Hell", that the small state is becoming a proxy conflict between Iran and the Saudis. The country is approaching war, with al-Qaeda in the fertile south and tribes in the desert North coalescing into a madhouse similar to Gotham's Arkham, with Saleh, the president, being in a hospital in Saudi Arabia for several weeks after being injured by an explosion. The country stands on the precipice of all out civil war with former cultural hubs like Taiz caught in between.

Near Gaza, the Israeli navy intercepted an activist yacht on Tuesday, which was filled with aid and supplies. The French ship, claiming it was headed toward Egypt after other similar missions were stopped in Greece, was bound for the Hamas-controlled Gaza strip in protest of the Zionist's treatment of the Palestinian state. There were no casualties; however, the PM of Turkey, Tayyip Erdogan, is also preparing for a potential trip to Gaza in the coming months, angering Western officials. Washinton and its allies were trying to heal ties between the Turks and the Israelis, with the Syria conflict on both their borders. Debka reports thats a "visit by Erdogan to Gaza would further sour the climate between the two countries – especially now when missiles are again being fired almost daily from the Gaza Strip against Israeli civilian locations" (Debka). The PM's frustration may have been caused from feeling snubbed by Obama in the Libya affair, according to Debka. In other Middle Eastern news, Iran started selling high-grade oil on Kish Island this week. The move threatens America's monopoly on the commodity's pricing. China has shown an interest, which is the biggest danger in Iran's endeavor to the West--especially the New York and London exchanges. They are moving away from what the "petrodollar" and are trying to become globalist independent. That goal is commendable; however, this will not stand. Watch out for the tycoons which control Washington's interests to strike back. We saw what happened when something threatened Wall Street last time. I can't imagine this will be any different. An article by John Daly titled, "Iran Opens Oil Bourse - Harbinger of Trouble for New York and London?", ends with this warning: "If the Chinese decide to start paying for their Iranian purchases strictly in yuan, expect the trickle away from the dollar in energy pricing to become a stampede. That ought to give Washington politicos an issue to think about besides gay marriage" (Daly - OilPrice.com) An article posted Saturday on the Financial Times claims that China and Iran are planning to set up an oil bartering system, where Iranian fuel is exchanged for Chinese made goods as well infrastructure projects (anyone else getting a John Perkins' sort of feel from this?). This system works around the oil sanctions placed on the Persian country--if payments are made outside the USdollar, then further deals can be made. China and Iran's economic relationship is booming, up 40% since 2009. Are we seeing yet another nascent structure of a post-Western dominated world?

Norway was rocked by two apparently connected terrorist attacks on Friday. In Oslo, a bomb exploded near a government HQ, killing 7 people, and then shortly after, a man dressed as a police officer started shooting young Labour campers on a retreat, killing at least 80. Some see this act as being linked to Norway's involvement with NATO, including Afghanistan and Libya. However, it was not immediately clear as of Friday whether it was tied to any international organizations. On Saturday, it was reported by the New York Times that the killer, Anders Behring Breivik, was a 32 year-old, blond, blue-eyed Norwegian with far right and anti-jihadist views. He faces a maximum of 21 years in jail. The PM of Scandinavian country said in a speech, "The answer to violence is even more democracy, even more humanity, but never naïveté," and rightly so. These acts are disgusting and should be condemned. Violence is never the answer. The timing of this attack is strange, however, especially with the DHS releasing a new video this week which depicts white terrorists bombing American targets. Daniel Taylor of Infowars reports that western governments will now move inward against their own citizens to root out terrorism. Always be suspicious of these attacks. Who is to gain the most? Do their stories hold up after further scrutiny? No killing is commendable, ever--not by you, not by your government. Europe is on the brink of collapse--let's see where this leads us. Away from serious talk about deficits for sure.