Greek Chicken Souvlaki Kabuki

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Aired on the Doomstead Diner on February 17, 2015


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The Game Continues…

For you Rant Fans, I found a New Gear for this one, and got it into OVERDRIVE by about the 7 minute mark, channeling Peter Finch.  🙂  A little Charlton Heston for Spice too!

Also, be aware I started the script for this last Friday during the first meetings, so the first part is not about the stupidity today, but a preview of that stupidity.


…Well, a thoroughly anti-climactic day here in the Greek Souvlaki Kabuki, as DieselBoom and Souvlakis spent a whole day talking past each other, with absolutely no indication that anyone is going to give an inch here. The Can Kick for this now is back to the 'Deadline' date of next Monday and the ultimatum that the Greeks will be CUT OFF from their Euro Gold Card and left to twist in the wind.

So what's the chances that they can come up with a SOLUTION to the problem on Monday they couldn't come up with today? Slim & None of course, unless somebody capitulates, and neither side can do that. The market of course believes that this is just another one of the endless series of “Deadlines” that will be Can Kicked down the road once again, and that very well might happen. Or maybe not.

What will it take to get a reaction here? Basically, the day the Greeks finally declare a Bank Holiday and start printing New Drachmas. Then Mr. Market finally wakes up from the stupor and does a Charlton Heston Planet of the Apes scene.

You did it! You finally really did it! You Blew it all Up! Damn You! Damn you all the HELL! LOL…


For the rest, LISTEN TO THE RANT!!!


In case you missed them, here are the last 2 installments of Greek Kabuki…

From Minsk to Brussels, it’s all about Germany

Off the keyboard of Pepe Escobar
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Germany's Chancellor Angela Merkel (L) talks to France's President Francois Hollande during a meeting with the media after peace talks on resolving the Ukrainian crisis in Minsk, February 12, 2015. (Reuters / Grigory Dukor)

Germany’s Chancellor Angela Merkel (L) talks to France’s President Francois Hollande during a meeting with the media after peace talks on resolving the Ukrainian crisis in Minsk, February 12, 2015. (Reuters / Grigory Dukor)

Originally published in RT on February 13, 2015

Germany holds the key to where Europe goes next. A fragile deal may have been reached on Ukraine, but there’s still no deal with Greece. In both cases, there’s much more than meets the eye.

Let’s start with the grueling Eurogroup negotiation in Brussels over the Greek debt.

Greek officials swear they never received a draft of a possible agreement leaked by Eurogroup bureaucrats to the Financial Times. This draft, crucially, referred to an agreement “amending and extending and successfully concluding,” the current austerity-heavy bailout.

German Finance Minister Wolfgang Schaeuble cut off “amending”. This is the draft that was leaked. But then Greek Finance Minister Yanis Varoufakis called Prime Minister Tsipras – and the statement, still not signed, was rejected. So this was a top Tsipras decision.

Tsipras could not possibly balk – not after previously raising the stakes – as in promising to boost the Greek minimum wage and halt privatizations. He’s still betting the house that the Troika won’t allow a ‘Grexit’. Yet he may be wrong; the possibility of ‘Grexit’ is hovering around 35 percent to 40 percent, and it will be much higher if no deal is reached on the next crunch meeting, Monday.

Tsipras and Eurogroup President Jeroen Dijsselbloem at least agreed that Greek officials and the Troika (EC, ECB, IMF) should start talking “at a technical level.” Translation: they will be comparing the current austerity nightmare with new Greek proposals.

Athens essentially has only two choices. Either the Troika accedes to some form of debt repudiation – real or as a sleight of hand (that’s Syriza’s proposal – an arrangement that fosters growth); or ‘Grexit’ ensues, with Athens creating its own central bank and currency as an independent nation. There’s no third choice; a debt of 175 percent of Greece’s GDP is totally unpayable.

As much as the Troika and its institutional derivatives spin ‘Grexit’ won’t be a big deal, the fact is a Greek debt default could have a more devastating effect than the Lehman Brothers case. It was not the fundamentals at Lehman that caused widespread panic when it went down; but the fear that their derivative exposures would bring down the system.

And cutting through all the spin, what remains, essentially, is what European Commission President Jean-Claude Juncker told Le Figaro a few days ago; it’s out of the question to suppress the Greek debt and, most of all, “there can be no democratic option against European treaties.” There it is, crystal clear: EU institutions work against democracy.

Plan B remains a distinct possibility. Moscow has already invited Tsipras to meet with Putin. And Beijing has invited Tsipras to meet with Prime Minister Li Keqiang. These are the “R” and the “C” in BRICS in action.

It’s worth remembering Greek Defense Minister Panos Kammenos when he articulated if not a majority view, at least a substantial perception among Greek public opinion; “We want a deal. But if there is no deal, and if we see that Germany remains rigid and wants to blow Europe apart, then we will have to go to Plan B… We have other ways of finding money. It could be the United States at best, it could be Russia, it could be China or other countries.”

Alea jacta est. Troika or RC?

And it’s all about NATO

Greek Prime Minister Alexis Tsipras addresses a news conference after a European Union leaders summit in Brussels February 12, 2015. (Reuters / Francois Lenoir)

Greek Prime Minister Alexis Tsipras addresses a news conference after a European Union leaders summit in Brussels February 12, 2015. (Reuters / Francois Lenoir)

Then there’s Minsk. What was achieved after nearly 17 hours of a grueling marathon is not exactly, in French President Francois Hollande’s words, a “global” agreement and a “global ceasefire” in Ukraine.

There’s every possibility the ceasefire will be nullified only a few minutes after its implementation at midnight this Saturday – irony of ironies, at the end of Valentine’s Day. Significantly, the final statement bears no important signatures: Putin, Merkel, Hollande and Poroshenko.

German Foreign Minister Steinmeier was cautious, warning Minsk 2.0 is not exactly a breakthrough, but at least de-escalates matters. Merkel preferred to spin that Putin had to pressure the Eastern Ukraine federalists of the DNR and the LNR to agree to the ceasefire.

Predictably, like clockwork, even before the ceasefire, the IMF – under Washington’s orders – suddenly announced it would continue to rape, sorry, help bailout bankrupt, failed state Ukraine with a tranche of$17.5 billion, part of a large $40 billion, four-year “rescue” package. Translation: Kiev’s goons now have fresh cash to throw at a war they don’t want to give up on.

Poroshenko himself took no time to torpedo the ceasefire – spinning there’s no autonomy granted to the areas controlled by the federalists, and refusing to confirm Putin’s assertion that Kiev has agreed to terminate the vicious economic blockade of Donbass.

The precise contours of the demilitarized zone – bordering one frontline in September and a very different frontline five months later – remain a mystery. And Washington immediately turned the “withdrawal of foreign forces” clause into a joke. The Pentagon has already announced it will begin training Ukraine’s National Guard next month.

Minsk 2.0 hardly qualifies as a band-aid. Ukraine is unredeemable. It would only come back from the dead if a tsunami of cash – almost equivalent to the cost of German reunification – were poured in. Needless to add, no one in Europe wants to dish out even a few devalued euro.

This was, remains, and will continue to be, essentially about NATO expansion. Washington and the Kiev marionettes will never allow any constitutional reform that lets the Donbass block NATO embedded in Ukraine. So the ‘Empire of Chaos’, in a nutshell, won’t cease from using Ukraine to bully Russia. The ‘Empire of Chaos’ is not exactly in the business of nation building – quite the contrary.

Crossing the German bridge

And that brings us to the crucial role played by Germany – with France as sidekick.

Chancellor Merkel had to go to Moscow to negotiate with Putin because she saw which way the wind was blowing – counterproductive sanctions; Ukrainian economy in free fall; Kiev’s goons defeated on the battlefield. That was as much an imperative as a crucial demarcation away from the imperial NATO expansion obsession.

As Immanuel Wallerstein has observed Moscow is pursuing “a careful policy. Not totally in control of the Donetsk-Lugansk autonomists, Russia is nonetheless making sure that the autonomists cannot be eliminated militarily. The Russian price for real peace is a commitment by NATO that Ukraine is not a potential member.”

So Merkel may have defused the Obama administration’s drive to weaponize Kiev – but only for a moment. There’s no evidence – yet – that the Obama administration and its embedded neo-con cells have admitted that the self-proclaimed People’s Republics of Donetsk and Lugansk (DPR and LPR) are essentially “lost” to Kiev’s influence.

Hollande provided the perfect cover for Merkel. It was Hollande who publicly supported autonomy – as in federalization – for the DPR and the LPR. At the same time, both Merkel and Hollande know that Kiev will never de facto accept it (and even a substantial portion of the Donbass only accepts federalization as a stepping stone to eventual secession and union with Russia.)

Merkel – at least in terms of German public opinion – did manage to achieve her goal, emerging as a victor (“The world chancellor,” as the tabloid Bild coined it) after her frequent-flyer marathon. Putin also emerged a victor of sorts – as Merkel essentially rehashed proposals he made months ago. So yes, whichever angle we look at it, this was in fact a Moscow-Berlin deal.It’s easy to see who is extremely disgruntled and will do everything to bomb it; Washington, Kiev, London, Warsaw and the hysterical “Russia is invading” Baltic states.

Last but not least, let’s call attention to the monumental white elephant in the room. Minsk 2.0 was conducted in the total absence of the ‘Empire of Chaos’ and the (increasingly irrelevant) “special relationship” British minions.

Slowly but surely, public opinion across Europe – and especially Germany – is experiencing a tectonic shift. The obsession by the ‘Empire of Chaos’ to further weaponize Kiev has horrified millions – resurrecting the specter of a war in Europe’s eastern borderlands. Not only in Germany but also in France, Italy, Spain, there is a growing continental consensus against NATO.

Even at the height of a vicious Russia demonization campaign unleashed by virtually the whole German corporate media, a Deutschland Trend survey revealed that most Germans are against NATO troops in Eastern Europe. And no less than 49 percent would rather see Germany position itself as a bridge between East and West. The leadership in Beijing definitely took note.

So it’s tempting to hop on the Merkel/Hollande peace train as the heart of Europe finally exercising their sovereignty and frontally defying the ‘Empire of Chaos’. Perhaps that could be the embryo of a German-French partnership for peace in Europe and even beyond, from the Middle East to Africa.

That would frontally antagonize NATO’s screenplay – which implies the ’Empire of Chaos’ ruling uncontested over Europe, the Middle East and even across Eurasia, with continental European powers, especially Germany, France and yes, Russia, at the margins.

Sooner or later European politicians will have to wake up and smell the coffee; the notion of a German-French-Russian pan-European peace/trade partnership is way more popular than reflected in failed corporate media.

Now it’s up to Germany to clean up its act on Greece. The choice is stark. The EU may embark on a quadruple-dip recession as the ECB further destroys what is left of the European middle class. Or Germany, reflecting the thinking among its captains of industry, may tell the EU – Troika included – that the way to go is to shift the strategic, trade and political focus from West to the East. That would start by stuffing the corporate US-devised TTIP treaty – that’s NATO on trade. After all, this is going to be the Eurasian century – and this train has already left the station.


Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

Greek Debt Chicken Game

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Aired on the Doomstead Diner on February 6. 2015


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Diner Special Lunch Menu

Souvlaki                  or                    Strudle


…Once again, the Greeks have taken the Center Stage in the Collapse Kabuki theater, with the newly elected Syriza Goobermint under the leadership of Alex Tspiras attempting to follow through on their many promises to throw off the Debt Choke Hold held on them by the Brussel Sprouts.

The new “Rock Star” player in the game here is the new Greek FinMin, Yanis “Souvlakis” Varoufakis. Yanis is making a lot of headlines in the Econ blogosphere since Syriza took power, first with the threat to outright default and lately with some more creative phrasing of concotions like “perpetual bonds” in some kind of new game of debt musical chairs.

On the other side of this nonsense is Yanis’ Evil Twin, the Kraut FinMin Wolfgang “Strudle” Schauble. Wolfy won’t take any shit from Yanis, and has made it clear he thinks the Greeks are responsible for every penny of the debt that the ECB and by extension the Kraut population extended to the Greeks, despite of course the reality that the Krauts never had the money before the last Greek Goobermint of Bankster Sock Puppets signed for it…

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Prior Rants on the Greek Debt Kabuki Theater you may have missed:

Greek Souvlaki Redux

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Aired on the Doomstead Diner on January 7, 2015


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Snippet:…Back in 2012 when we opened the Diner for Bizness, one of the major Collapse stories of the day was the implosion of the Greek economy, the subsequent and continuing Bailouts by the IMF, and endless discussion across the blogosphereof whether the Greeks would Default, exit or be booted out from the Euro monetary union, etcetera.

3 years later here, after any number of rounds of bailouts (I have lost count), once again the Greeks are BACK in the Newz, since it looks increasingly likely that Alex Tsipras, Head of the Greek Syriza pretty far left party will wrest control from the quisling New Democracy Partyof Antonis Samaras which has followed the diktats of the hated “memorandum” forcing what is referred to in Newzspeak as “Austerity” down the throat of the Greek Population, Linda Lovelace style…

For the rest, LISTEN TO THE RANT!!!

Note: For Non-Native Speakers of English and people who prefer to read rather than listen, the transcript of this rant will be available inside the Diner HERE in a few days.

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Christmas Truce of 1914

Off the keyboard of Anthony Cartalucci

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Published on Land Destroyer on December 24, 2014


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The Christmas Truce of 1914 – Pinhole of Light Among a Nightmare of Madness

December 24, 2014 (Tony Cartalucci – LD) In the end, we have more in common with the furthest flung foreign common man than the closest corporate-fascist that presumes dominion over our lives.During the early 1900’s, Europe was locked in the first World War. Millions would perish – tens of thousands in a single day. On one brief occasion, a pinhole of light shined through this utter madness, revealing the truth of this man-made nightmare. The men in the trenches were being driven toward each other, not by some irreconcilable difference they had with one another, but by the greed of those ruling elite residing in their respective homelands.

If only the British and Germans realized it was the greed of their own banking houses and industrialists that had them in the trenches and not some irreconcilable difference amongst themselves…

Knowledge is power, ignorance literally can mean death. When will we start being leaders in our homes, communities, counties, and provinces – driving our own destiny rather than being driven? Shall we look upon the Christmas Truce of 1914 with wonder a century on, or look toward it as evidence something was and still is tragically wrong with human civilization and work this next year with renewed vigor to resolve it?

Naming Names: Your Real Government

When dark deeds unfold, point the finger in this direction.
by Tony CartalucciThis is your real government; they transcend elected administrations, they permeate every political party, and they are responsible for nearly every aspect of the average American and European’s way of life. When the “left” is carrying the torch for two “Neo-Con” wars, starting yet another based on the same lies, peddled by the same media outlets that told of Iraqi WMD’s, the world has no choice, beyond profound cognitive dissonance, but to realize something is wrong.What’s wrong is a system completely controlled by a corporate-financier oligarchy with financial, media, and industrial empires that span the globe. If we do not change the fact that we are helplessly dependent on these corporations that regulate every aspect of our nation politically, and every aspect of our lives personally, nothing else will ever change.The following list, however extensive, is by far not all-inclusive. However after these examples, a pattern should become self-evident with the same names and corporations being listed again and again. It should be self-evident to readers of how dangerously pervasive these corporations have become in our daily lives. Finally, it should be self-evident as to how necessary it is to excise these corporations from our lives, our communities, and ultimately our nations, with the utmost expediency.International Crisis Group
www.crisisgroup.orgBackground: While the International Crisis Group (ICG) claims to be “committed to preventing and resolving deadly conflict,” the reality is that they are committed to offering solutions crafted well in advance to problems they themselves have created in order to perpetuate their own corporate agenda.

Nowhere can this be better illustrated than in Thailand and more recently in Egypt. ICG member Kenneth Adelman had been backing Thailand’s Prime Minster Thaksin Shinwatra, a former Carlyle Group adviser who was was literally standing in front of the CFR in NYC on the eve of his ousting from power in a 2006 military coup. Since 2006, Thaksin’s meddling in Thailand has been propped up by fellow Carlyle man James Baker and his Baker Botts law firm, Belfer Center adviser Robert Blackwill of Barbour Griffith & Rogers, and now Robert Amsterdam’s Amsterdam & Peroff, a major corporate member of the globalist Chatham House.

With Thailand now mired in political turmoil led by Thaksin Shinwatra and his “red shirt” color revolution, the ICG is ready with “solutions” in hand. These solutions generally involve tying the Thai government’s hands with arguments that stopping Thaksin’s subversive activities amounts to human rights abuses, in hopes of allowing the globalist-backed revolution to swell beyond control.

The unrest in Egypt, of course, was led entirely by ICG member Mohamed ElBaradei and his US State Department recruited, funded, and supported April 6 Youth Movement coordinated by Google’s Wael Ghonim. While the unrest was portrayed as being spontaneous, fueled by the earlier Tunisian uprising, ICG’s ElBaradei, Ghonim, and their youth movement had been in Egypt since 2010 assembling their “National Front for Change” and laying the groundwork for the January 25th 2011 uprising.

ICG’s George Soros would then go on to fund Egyptian NGOs working to rewrite the Egyptian constitution after front-man ElBaradei succeeded in removing Hosni Mubarak. This Soros-funded constitution and the resulting servile stooge government it would create represents the ICG “resolving” the crisis their own ElBaradei helped create.

Notable ICG Board Members:

George Soros
Kenneth Adelman
Samuel Berger
Wesley Clark
Mohamed ElBaradei
Carla Hills

Notable ICG Advisers:

Richard Armitage
Zbigniew Brzezinski
Stanley Fischer
Shimon Peres
Surin Pitsuwan
Fidel V. Ramos

Notable ICG Foundation & Corporate Supporters:

Carnegie Corporation of New York
Hunt Alternatives Fund
Open Society Institute
Rockefeller Brothers Fund
Morgan Stanley
Deutsche Bank Group
Soros Fund Management LLC
McKinsey & Company


Background: Within the library of the Brookings Institute you will find the blueprints for nearly every conflict the West has been involved with in recent memory. What’s more is that while the public seems to think these crises spring up like wildfires, those following the Brookings’ corporate funded studies and publications see these crises coming years in advance. These are premeditated, meticulously planned conflicts that are triggered to usher in premeditated, meticulously planned solutions to advance Brookings’ corporate supporters, who are numerous.

The ongoing operations against Iran, including US-backed color revolutions, US-trained and backed terrorists inside Iran, and crippling sanctions were all spelled out in excruciating detail in the Brookings Institute report, “Which Path to Persia?” The more recent UN Security Council resolution 1973 regarding Libya uncannily resembles Kenneth Pollack’s March 9, 2011 Brookings report titled “The Real Military Options in Libya.”

Notable Brookings Board Members:

Dominic Barton: McKinsey & Company, Inc.
Alan R. Batkin: Eton Park Capital Management
Richard C. Blum: Blum Capital Partners, LP
Abby Joseph Cohen: Goldman, Sachs & Co.
Suzanne Nora Johnson: Goldman Sachs Group, Inc.
Richard A. Kimball Jr.: Goldman, Sachs & Co.
Tracy R. Wolstencroft: Goldman, Sachs & Co.
Paul Desmarais Jr.: Power Corporation of Canada
Kenneth M. Duberstein: The Duberstein Group, Inc.
Benjamin R. Jacobs: The JBG Companies
Nemir Kirdar: Investcorp
Klaus Kleinfeld: Alcoa, Inc.
Philip H. Knight: Nike, Inc.
David M. Rubenstein: Co-Founder of The Carlyle Group
Sheryl K. Sandberg: Facebook
Larry D. Thompson: PepsiCo, Inc.
Michael L. Tipsord: State Farm Insurance Companies
Andrew H. Tisch: Loews Corporation

Some Brookings Experts:
(click on names to see a list of recent writings.)

Kenneth Pollack
Daniel L. Byman
Martin Indyk
Suzanne Maloney
Michael E. O’Hanlon
Bruce Riedel
Shadi Hamid

Notable Brookings Foundation and Corporate Support:

Foundations & Governments

Ford Foundation
Bill & Melinda Gates Foundation
The Rockefeller Foundation
Government of the United Arab Emirates
Carnegie Corporation of New York
Rockefeller Brothers Fund

Banking & Finance

Bank of America
Goldman Sachs
H&R Block
Kohlberg Kravis Roberts & Co.
Jacob Rothschild
Nathaniel Rothschild
Standard Chartered Bank
Temasek Holdings Limited
Visa Inc.

Big Oil

Exxon Mobil Corporation
Shell Oil Company

Military Industrial Complex & Industry

General Dynamics Corporation
Lockheed Martin Corporation
Northrop Grumman Corporation
Siemens Corporation
The Boeing Company
General Electric Company
Westinghouse Electric Corporation
Raytheon Co.
Hitachi, Ltd.

Telecommunications & Technology

Google Corporation
Microsoft Corporation
Panasonic Corporation
Verizon Communications
Xerox Corporation

Media & Perception Management

McKinsey & Company, Inc.
News Corporation (Fox News)

Consumer Goods & Pharmaceutical

PepsiCo, Inc.
The Coca-Cola Company

Council on Foreign Relations

Background & Notable Membership: A better question would be, who isn’t in the Council on Foreign Relations? Nearly every self-serving career politician, their advisers, and those populating the boards of the Fortune 500 are CFR members. Many of the books, magazine articles, and newspaper columns we read are written by CFR members, along with reports, similar to Brookings Institute that dictate, verbatim, the legislation that ends up before the West’s lawmakers.

A good sampling of the most active wings of the CFR can be illustrated best in last year’s “Ground Zero Mosque” hoax, where CFR members from both America’s political right and left feigned a heated debate over New York City’s so-called Cordoba House near the 3 felled World Trade Center buildings. In reality, the Cordoba House was established by fellow CFR member Feisal Abdul Rauf, who in turn was funded by CFR financing arms including the Carnegie Corporation of New York, chaired by 9/11 Commission head Thomas Kean, and various Rockefeller foundations.

Notable CFR Corporate Support:

Banking & Finance

Bank of America Merrill Lynch
Goldman Sachs Group, Inc.
JPMorgan Chase & Co
American Express
Barclays Capital
Morgan Stanley
Blackstone Group L.P.
Deutsche Bank AG
New York Life International, Inc.
Prudential Financial
Standard & Poor’s
Rothschild North America, Inc.
Visa Inc.
Soros Fund Management
Standard Chartered Bank
Bank of New York Mellon Corporation
Veritas Capital LLC
Kohlberg Kravis Roberts & Co.
Moody’s Investors Service

Big Oil

Chevron Corporation
Exxon Mobil Corporation
BP p.l.c.
Shell Oil Company
Hess Corporation
ConocoPhillips Company
Marathon Oil Company
Aramco Services Company

Military Industrial Complex & Industry

Lockheed Martin Corporation
Airbus Americas, Inc.
Boeing Company,
DynCorp International
General Electric Company
Northrop Grumman
Raytheon Company
Hitachi, Ltd.
BASF Corporation
Alcoa, Inc.

Public Relations, Lobbyists & Legal Firms

McKinsey & Company, Inc.
Omnicom Group Inc.
BGR Group

Corporate Media & Publishing

Economist Intelligence Unit
News Corporation (Fox News)
Thomson Reuters
Time Warner Inc.
McGraw-Hill Companies

Consumer Goods

Nike, Inc.
Coca-Cola Company
PepsiCo, Inc.
Toyota Motor North America, Inc.
Volkswagen Group of America, Inc.
De Beers

Telecommunications & Technology

Google, Inc.
IBM Corporation
Microsoft Corporation
Sony Corporation of America
Xerox Corporation
Verizon Communications

Pharmaceutical Industry

Merck & Co., Inc.
Pfizer Inc.

The Chatham House

Background & Membership: The UK’s Chatham House, like the CFR and the Brookings Institute in America, has an extensive membership and is involved in coordinated planning, perception management, and the execution of its corporate membership’s collective agenda.

Individual members populating its “senior panel of advisers” consist of the founders, CEOs, and chairmen of the Chatham House’s corporate membership. Chatham’s “experts” are generally plucked from the world of academia and their “recent publications” are generally used internally as well as published throughout Chatham’s extensive list of member media corporations, as well as industry journals and medical journals. That Chatham House “experts” are submitting entries to medical journals is particularly alarming considering GlaxoSmithKline and Merck are both Chatham House corporate members.

No better example of this incredible conflict of interest can be given than the current Thai “red” color revolution being led by Chatham House’s Amsterdam & Peroff with consistent support lent by other corporate members including the Economist, the Telegraph and the BBC.

In one case, the Telegraph printed, “Thai protests – analysis by Dr Gareth Price and Rosheen Kabraji,” within which Price and Kabraji make a shameless attempt at defending the Western-backed, Maoist themed, violent protests. While the Telegraph mentioned that Price and Kabraji were both analysts for the Chatham House, they failed to tell readers that the Telegraph itself retains a corporate membership within the Chatham House as does the Thai protest leader’s lobbyist, Robert Amsterdam and his Amsterdam & Peroff lobbying firm.

Notable Chatham House Major Corporate Members:
Amsterdam & Peroff
Coca-Cola Great Britain
Goldman Sachs International
HSBC Holdings plc
Lockheed Martin UK
Merck & Co Inc
Mitsubishi Corporation
Morgan Stanley
Royal Bank of Scotland
Saudi Petroleum Overseas Ltd
Standard Bank London Limited
Standard Chartered Bank
Thomson Reuter
United States of America Embassy
Vodafone Group

Notable Chatham House Standard Corporate Members:

Amnesty International
Boeing UK
CBS News
Daily Mail and General Trust plc
De Beers Group Services UK Ltd
G3 Good Governance Group
Hess Ltd
Lloyd’s of London
McGraw-Hill Companies
Prudential plc
Telegraph Media Group
Times Newspapers Ltd
World Bank Group

Notable Chatham House Corporate Partners:

British Petroleum
Chevron Ltd
Deutsche Bank
Exxon Mobil Corporation
Royal Dutch Shell
Toshiba Corporation
Total Holdings UK Ltd
Unilever plc


These organizations represent the collective interests of the largest corporations on earth. They not only retain armies of policy wonks and researchers to articulate their agenda and form a consensus internally, but also use their massive accumulation of unwarranted influence in media, industry, and finance to manufacture a self-serving consensus internationally.

To believe that this corporate-financier oligarchy would subject their agenda and fate to the whims of the voting masses is naive at best. They have painstakingly ensured that no matter who gets into office, in whatever country, the guns, the oil, the wealth and the power keep flowing perpetually into their own hands. Nothing vindicates this poorly hidden reality better than a “liberal” Nobel Peace Prize wearing president, dutifully towing forward a myriad of “Neo-Con” wars, while starting yet another war in Libya.

Likewise, no matter how bloody your revolution is, if the above equation remains unchanged, and the corporate bottom lines left unscathed, nothing but the most superficial changes will have been made, and as is the case in Egypt with International Crisis Group stooge Mohamed ElBaradei worming his way into power, things may become substantially worse.

The real revolution will commence when we identify the above equation as the true brokers of power and when we begin systematically removing our dependence on them, and their influence on us from our daily lives. The global corporate-financier oligarchy needs us, we do not need them, independence from them is the key to our freedom.

For more information on alternative economics, getting self-sufficient and moving on without the parasitic, incompetent, globalist oligarchs:

The Lost Key to Real Revolution
Boycott the Globalists
Alternative Economics


Off the keyboard of John Ward

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Published on The Slog on December 3, 2014


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GREECE: Slog vindicated again as Athens calls for new €10bn bailout

It does strike me as very odd (as I’ve written many times before) than an old pro-am hack like me, hunkered down in the south west of France, seems able to understand the real Greek debt situation…..but most experts don’t. Or do, but don’t write about it – I’m never entirely sure.

Last January, I posted a long piece – “Mind the Gap” – pointing out with the use of simple maths that, without further bailout monies, Greece would default in May 2014; and even if they got that money, they’d be in trouble again during the Autumn and early winter.

So it proved. With the European elections as a handy distraction, I was nevertheless able to confirm on March 27th that the Samaras Coalition would be given €8.5bn toavoid default in May. The Wall Street Journal  ran a piece soon afterwards agreeing with the view. After some deliberate obfuscation, on 10th May Athens got the money it needed to make a dent in over €11bn of bond maturaties that became due.

The previous year, Angela Merkel had gone into the German elections and lied her fat head off about the Volk not being asked for any more money, and how the future was bright. She plodded home with ease, since when –  in general eurozone and specific Greek terms – things have gone from very bad to a whole lot worse.

Now Mish’s Global Analysis (which reblogged my January piece) reveals that, yes indeed, Athens needs more money. To be more exact, €10bn. Back in January, I said it would be €5.6bn….but then other targets were missed as the economy got worse and worse; and last week in Paris, the Troika up and mentioned that there were €2.5bn of cuts that the Greeks hadn’t fulfilled. So as I say, now it’s worse than ever.

One side of the devalued coin in this farcical saga is that – even allowing for the fact that Homo Kalamatus Antonikis Samaras has an olive stone where his brain should be – he has lied three times on national Greek television about the reality of the situation. So not surprisingly, Alexis Tsipras’s Party Syriza is now comfortably leading in the polls…..and with the Assembly vote for a new President coming up, Samaras possibly lacks the support required to carry the day. Technically, under the Greek constitution this is a resigning issue, and so we’ll get elections early next year rather than in 2016.

For Brussels, this has all the makings of the sort of nightmare in which a loose nuclear cannon is careering all over the eurozone and fomenting revolt. But sadly, Tsipras has toned down his rhetoric: today he claims that the loan package will have to be renegotiated, but he doesn’t want to dump the euro. Economically this is idiocy, but the Syriza leader knows he can only win the election by appearing ‘reasonable’…ie, he is – as David Cameron would say – a non-violent extremist.

I confess to being disappointed by Tsipras, and here’s why. If you look at the numbers involved in ‘saving’ Greece, then the four bailouts represent probably the most expensive face-saving exercise in history. To protect a potential original loss in the region of €40bn, the Troika threw confetti money at a debt write-off roughly equivalent to Cameron’s HS2 folly. As of this latest bailout, it will have poured €240bn of confetti money onto a debt conflagration that is raging like a Greek forest fire in August.

Do the Sprouts feel humble about this? They do not: “Greece is not in a position to negotiate“, they told the media last week. That is about as Betty Swollocks as Brussels fantasy gets: Although it has a huge debt, Greece at last has a current account surplus. If it renounces the debt, it could reverse the austerity nonsense, leave the euro and be quids in. Which is why I think Tsipras, if he does win the election, needs to play some serious hardball.

I posted at the weekend that 2 euros in 3 being ‘repaid’ by Greece are funny money. The truth is that – with most of the vultures having had their kilo of flesh – the ECB could write off two-thirds of the debt without losing any real money at all. Better that, I would’ve thought, than a defaulting defector with Italy now looming over the same horizon.

In licking the creditors like this, Tsipras is sending a signal to say he’ll be happy with a compromise. He says he wants “a €chunk” of the debt “forgiven”, whereas I think he should shout “fraud” and shoot for the Moon. It’s actually Brussels-am-Berlin that’s in no position to press too hard with the jackboot on this one.

Will Russia, Germany save Europe from war?

Off the keyboard of Pepe Escobar
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Originally published in Asia Times on December 1, 2014

Discuss this article here in the Diner Forum.

Are the United States, the North Atlantic Treaty Organization and Russia on a mad spiral leading to yet another war in Europe? Is it inevitable? Far from it.

The US-propelled vassal currently starring in the oligarch dance in Ukraine, Petro Poroshenko, last week advanced the proposition that Ukrainians in the near future, after his “reforms”, will be asked to vote on whether to join NATO.

Let’s be serious here. Many of you will be familiar with the concept of “shatter belt” – territories and peoples that historically have been squeezed between the Germanic Eagle and the Russian Bear.

As we stand, the whole shatter belt – apart from Ukraine and Belarus – has signed up to NATO. A new Berlin wall, this time US-built – from the Baltics to the Black Sea now runs through Kiev. Were Ukraine to become a NATO member in an albeit remote future, the shatter belt buffer zone would disappear. This means NATO – essentially the US – planted right on Russia’s western border.

Washington has just announced that it will be pre-positioning more military vehicles in Europe to be used in exercises or “potential military operations”. This is perfectly in tune with the relentless US Think Tankland spin that NATO and the US will be “forced” to balance their commitment to security in Eastern Europe against potential Russian “aggression”.

As Ukraine, the Baltic states and Poland persist in compounded hysteria about such “aggression”, the option of a post-MAD (Mutually Assured Destruction) US-Russia nuclear war, terrifying as it must be, is now – casually – back on the discussion table. At least there’s a countercurrent: strands of informed Americans are wondering why the US should be paying for Europe’s defense when European GDP is larger than that of the US.

Wanna play war, boy?
Now for the “threat” of nuclear war in Europe – bogus or otherwise. It’s pointless to compare the strategic nuclear capabilities of the US and Russia based on numbers, but not on quality.

Take the compounded GDP of US, Germany, France and the UK and compare it to Russia; it’s a victory by landslide. Then examine the strategic nuclear scenario, and it’s a totally different story. GDP alone does not “win” anything.

Washington/Wall Street elites are now deep into nuclear war paranoia. A Council on Foreign Relations study basically “found out” what Pravda had already reported. Other pieces such as this at least hint at the obvious – glaring US strategic shortcomings.

Consider some of the basics:

  • Russian ICBMs armed with MIRVs travel at about 18 Mach; that is way faster than anything in the US arsenal. And basically they are unbeatable.
  • The S-400 and S-500 double trouble. Moscow has agreed to sell the S-400 surface-to-air missile system to China. The bottom line is this will make Beijing impermeable to US air power, ICBMs and cruise missiles. Russia, for its part, is already focusing on the state-of-the-art S-500 – which essentially makes the Patriot anti-missile system look like a V-2 from World War II.
  • The Russian Iskander missile travels at Mach 7 – with a range of 400 kilometers, carrying a 700 kilogram warhead of several varieties, and with a circular error probability of around five meters. Translation: an ultimate lethal weapon against airfields or logistic infrastructure. The Iskander can reach targets deep inside Europe.
  • And then there’s the Sukhoi T-50 PAK FA. Talk about a real near-future game-changer.NATO clowns dreaming of a war on Russia would have to come up with an ironclad system to knock out the Iskanders. They don’t have any. Additionally, they would have to face the S-400s, which the Russians can deploy all over the spectrum.Think of a hefty batch of S-400s positioned at the enclave of Kaliningrad; that would turn NATO air operations deep inside Europe into an absolutely horrendous nightmare. On top of it, good ol’ NATO fighter jets cost a fortune. Imagine the effect of hundreds of destroyed fighter jets on a European Union already financially devastated and austerity-plagued to death.As if this was not enough, no one knows the exact extent of NATO’s strategic capabilities. Brussels is not talking. Extra-officially, these capabilities are not exactly a marvel. And Russian intelligence knows it.Still assuming those NATO clowns would insist on playing war, Moscow has already made it very clear Russia would use their awesome arsenal of 5,000-plus tactical nuclear weapons – and whatever else it takes – to defend the nation against a NATO conventional attack. Moreover, a few thousand S-400 and S-500 systems are enough to block a US nuclear attack.None of this hair-raising Apocalypse Now scenario is even taking into account the Russia-China alliance – the major, game-changing Eurasian story of the 2010s.Just in case the “pivoting to Asia” gang starts harboring funny ideas about the Middle Kingdom as well, China is massively investing in bouncing lasers off satellites; satellite-hitting missiles; silent submarines that surface beside US aircraft carriers without prior detection; and a made-in-China anti-missile missile that can hit a reentering satellite moving faster than any ICBM.

    In a nutshell, Beijing knows the US surface fleet is obsolete – and undefendable. And needless to add, all of these Chinese modernizing developments are proceeding way faster than anything in the US.

    A modest proposal
    The spin by the Washington establishment has been relentless: Russia is expanding towards a 21st century empire.

    Here, Russian Foreign Minister Sergey Lavrov explains in detail how this is undiluted rubbish. What has actually happened is that Moscow deftly called the Brzezinski-inspired bluff in Ukraine – with all its overtones. No wonder the Empire of Chaos is furious.

    And yet there is a solution to defuse the current, hysterical rush to war logic. Here I have examined in some detail how Washington is playing Russian Roulette. Now it’s time to advance a modest proposal – as it has been floated by a few concerned analysts from the US, Germany and Asia.

    Essentially, it’s very simple. It’s up to Germany. And it’s all about undoing Stalin.

    Stalin, at the outset of World War II, took East Prussia from Germany and moved the eastern part of Poland into Ukraine. Eastern Ukraine was originally from Russia; it is part of Russia and was given by Lenin to Ukraine.

    So let’s have East Prussia returned to Germany; the eastern part of Poland returned to Poland; and eastern Ukraine as well as Crimea – which Khrushchev gave to Ukraine – returned to Russia.

    Everyone get their share. No more Stalin. No more arbitrary borders. That’s what the Chinese would define as a “triple win” situation. Of course, the Empire of Chaos would fight it to death; there would be no more chaos manipulated to justify a crusade against bogus Russian “aggression”.

    The ball is in Germany’s court. Now it’s up to East Prussians to present the facts to Angela Merkel. Let’s see if she’s able to get the message.

    Pepe Escobar’s new book, just out, is Empire of Chaos. Follow him on Facebook.


Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007), Red Zone Blues: a snapshot of Baghdad during the surge (Nimble Books, 2007), and Obama does Globalistan (Nimble Books, 2009).

Germany & Japan Hit the Skids

Off the keyboard of Michael Snyder

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Published on The Economic Collapse on October 8, 2014

Pigs on the Wing in Japan & Germany

Pigs on the Wing in Japan & Germany

Discuss this article at the Economics Table inside the Diner

Serious Financial Trouble Is Erupting In Germany And Japan

Stock Market Collapse - Public DomainThere are some who believe that the next great financial crash will not begin in the United States.  Instead, they are convinced that a financial crisis that begins in Europe or in Japan (or both) will end up spreading across the globe and take down the U.S. too.  Time will tell if they are ultimately correct, but even now there are signs that financial trouble is already starting to erupt in both Germany and Japan.  German stocks have declined 10 percent since July, and that puts them in “correction” territory.  In Japan, the economy is a total mess right now.  According to figures that were just released, Japanese GDP contracted at a 7.1 percent annualized rate during the second quarter and private consumption contracted at a 19 percent annualized rate.  Could a financial collapse in either of those nations be the catalyst that sets off financial dominoes all over the planet?

This week, the worst German industrial production figure since 2009 rattled global financial markets.  Germany is supposed to be the economic “rock” of Europe, but at this point that “rock” is starting to show cracks.

And certainly the civil war in Ukraine and the growing Ebola crisis are not helping things either.  German investors are becoming increasingly jittery, and as I mentioned above the German stock market has already declined 10 percent since July

German stocks, weighed down by the economic fallout spawned by the Ukraine-Russia crisis and the eurzone’s weak economy, are now down more than 10% from their July peak and officially in correction territory.

The DAX, Germany’s benchmark stock index, has succumbed to recent data points that show the German economy has ground to a halt, hurt in large part by the economic sanctions levied at its major trading partner, Russia, by the U.S. and European Union as a way to get Moscow to butt out of Ukraine’s affairs. The economic slowdown in the rest of the debt-hobbled eurozone has also hurt the German economy, considered the economic locomotive of Europe.

In trading today, the DAX fell as low as 8960.43, which put it down 10.7% from its July 3 closing high of 10,029.43 and off nearly 11% from its June 20 intraday peak of 10,050.98.

And when you look at some of the biggest corporate names in Germany, things look even more dramatic.

Just check out some of these numbers

The hardest hit sectors have been retailers, industrials and leisure stocks with sports clothing giant Adidas down 37.7pc for the year, airline Lufthansa down 27pc, car group Volkswagen sliding 23.6pc and Deutchse Bank falling 20.2pc so far this year.

Meanwhile, things in Japan appear to be going from bad to worse.

The government of Japan is more than a quadrillion yen in debt, and it has been furiously printing money and debasing the yen in a desperate attempt to get the Japanese economy going again.

Unfortunately for them, it is simply not working.  The revised economic numbers for the second quarter were absolutely disastrous.  The following comes from a Japanese news source

On an annualized basis, the GDP contraction was 7.1 percent, compared with 6.8 percent in the preliminary estimate. That makes it the worst performance since early 2009, at the height of the global financial crisis.

The blow from the first stage of the sales tax hike in April extended into this quarter, with retail sales and household spending falling in July. The administration signaled last week that it is prepared to boost stimulus to help weather a second stage of the levy scheduled for October 2015.

Corporate capital investment dropped 5.1 percent from the previous quarter, more than double the initial estimate of 2.5 percent.

Private consumption was meanwhile revised to a 5.1 percent drop from the initial reading of 5 percent, meaning it sank 19 percent on an annualized basis from the previous quarter, rather than the initial estimate of 18.7 percent, Monday’s report said.

For the moment, things are looking pretty good in the United States.

But as I have written about so many times, our financial markets are perfectly primed for a fall.

Other experts see things the same way.  Just consider what John Hussman wrote recently…

As I did in 2000 and 2007, I feel obligated to state an expectation that only seems like a bizarre assertion because the financial memory is just as short as the popular understanding of valuation is superficial: I view the stock market as likely to lose more than half of its value from its recent high to its ultimate low in this market cycle.

At present, however, market conditions couple valuations that are more than double pre-bubble norms (on historically reliable measures) with clear deterioration in market internals and our measures of trend uniformity. None of these factors provide support for the market here. In my view, speculators are dancing without a floor.

And it isn’t just stocks that could potentially be on the verge of a massive decline.  The bond market is also experiencing an unprecedented bubble right now.  And when that bubble bursts, the carnage will be unbelievable.  This has become so obvious that even CNBC is talking about it…

Picture this: The bond market gets spooked by a sudden interest rate scare, sending a throng of buyers streaming toward the exits, only to find a dearth of buyers on the other side.

As a result, liquidity evaporates, yields soar, and the U.S. finds itself smack in the middle of another debt crisis no one saw coming.

It’s a scenario that TABB Group fixed income head Anthony J. Perrotta believes is not all that far-fetched, considering the market had what could be considered a sneak preview in May 2013. That was the “taper tantrum,” which saw yields spike and stocks sell off after then-Federal Reserve Chairman Ben Bernanke made remarks that the market construed as indicating rates would rise sooner than expected.

If the strength of our financial markets reflected overall strength in the U.S. economy there would not be nearly as much cause for concern.

But at this point our financial markets have become completely and totally divorced from economic reality.

The truth is that our economic fundamentals continue to decay.  In fact, the IMF says that China now has the largest economy on the planet on a purchasing power basis.  The era of American economic dominance is ending.  It is just that the financial markets have not gotten the memo yet.

Hopefully we still have at least a few more months before stock markets all over the world start crashing.  But remember, we are entering the seventh year of the seven year cycle of economic crashes that so many people are talking about these days.  And we are definitely primed for a global financial collapse.

Sadly, most people did not see the crash of 2008 coming, and most people will not see the next one coming either.

The Novorossiyan 300

Off the microphone of RE

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Aired on the Doomstead Diner on September 3, 2014


Don’t miss also the recent related Podcasts with Dmitry Orlov

Analysing Ukraine and MENA

Supply Chains, Population & Community

Discuss this Rant at the Podcast Table inside the Diner

300 movie image Gerard Butler

…However, for a while there the Ukies also had superior equipment, more artillery, tanks etc that were legacy gifts from Mother Russia from the Soviet era. So Novorossiyan  irregulars armed mainly with rifles and RPGs were on the retreat, consolidating inside their home region for a Final Battle for all the Marbles.

You all know the story of the 300 from the film by the same name, which was a fictionalized account of the Battle of Thermopylae in 480 BC. From Wiki:

“Both ancient and modern writers have used the Battle of Thermopylae as an example of the power of a patriotic army defending native soil. The performance of the defenders at the battle of Thermopylae is also used as an example of the advantages of training, equipment, and good use of terrain as force multipliers and has become a symbol of courage against overwhelming odds. “

You also may have heard the poem by Alfred Lord Tennyson, Charge of the Light Brigade. I will read it in full.

Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.
“Forward, the Light Brigade!
“Charge for the guns!” he said:
Into the valley of Death
Rode the six hundred.

“Forward, the Light Brigade!”
Was there a man dismay’d?
Not tho’ the soldier knew
Someone had blunder’d:
Theirs not to make reply,
Theirs not to reason why,
Theirs but to do and die:
Into the valley of Death
Rode the six hundred.

Cannon to right of them,
Cannon to left of them,
Cannon in front of them
Volley’d and thunder’d;
Storm’d at with shot and shell,
Boldly they rode and well,
Into the jaws of Death,
Into the mouth of Hell
Rode the six hundred.

Flash’d all their sabres bare,
Flash’d as they turn’d in air,
Sabring the gunners there,
Charging an army, while
All the world wonder’d:
Plunged in the battery-smoke
Right thro’ the line they broke;
Cossack and Russian
Reel’d from the sabre stroke
Shatter’d and sunder’d.
Then they rode back, but not
Not the six hundred.

Cannon to right of them,
Cannon to left of them,
Cannon behind them
Volley’d and thunder’d;
Storm’d at with shot and shell,
While horse and hero fell,
They that had fought so well
Came thro’ the jaws of Death
Back from the mouth of Hell,
All that was left of them,
Left of six hundred.

When can their glory fade?
O the wild charge they made!
All the world wondered.
Honor the charge they made,
Honor the Light Brigade,
Noble six hundred…

For the rest, LISTEN TO THE RANT!!!

AUGUST 4TH 2014: Oh Oh Oh what a Lovely War

Off the keyboard of John Ward

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Published on The Slog on August 4, 2014


Discuss this article at the Geopolitics Table inside the Diner Corporal Adolf Hitler (left) celebrates the Austrian declaration of war on Serbia in a Vienna crowd, 1914.

There is no thought too crass, no anniversary too sick, that the media and their friends in the political class won’t celebrate.

‘Celebrate’ is an odd word in the English language, because it can mean both ‘remember’ and ‘enjoy’. From what I’ve seen of the papers today and the Westminster soundbites, we are low in remembrance but high in enjoyment. Lots of tabloid pigs are grunting their fractured prose out into the environment today, because it is a century since the First World War began.

More than 65 million men from 30 countries fought in The Great War. Nearly 10 million died. That figure is greater than the population of Hungary, and much more than that of Austria.

More than 75% of Russian troops were wiped out. Thismay have something to do with the high preponderance of unarmed peasants involved.

French Second Lieutenant Alfred Joubaire wrote in his diary about WWI just before he died that “Humanity is mad! It must be mad to do what it is doing. What a massacre. What scenes of horror and carnage! I cannot find words to translate my impressions. Hell cannot be so terrible! Men are mad!”

Millions of soldiers suffered “shell shock,” or post-traumatic stress disorder, due to the horrors of trench warfare. Shell-shocked men often had uncontrollable diarrhea, couldn’t sleep, stopped speaking, whimpered for hours, and twitched uncontrollably. While some soldiers recovered, others suffered for the rest of their lives.

On Christmas Day 1914 (when the War was due to be over) troops along 2/3 of the Western Front declared a truce. In some places the truce lasted a week. A year later, sentries on both sides were ordered to shoot anyone who attempted a repeat performance.

During the Battle of the Somme, the British Army suffered 60,000 casualties in one day. Not one inch of territory was gained beyond the very short term.

On June 28, 1914, a Serbian separatist shot and killed Archduke Franz Ferdinand, heir to the Austro-Hungarian throne, and his wife. Austria-Hungary declared war on Serbia on July 28, 1914. Russia and France sided with Serbia, and Germany supported Austria-Hungary. Thanks to Edward VII’s Entente Cordiale, Britain came into the conflict on August 4th 1914.

Ten million deaths as the result of two obscure Royals being assassinated. Even madder than $23 trillion being spent thanks to the stupidity of perhaps 45,000 people in investment banking a century later.

Not only was there no idiocy with which Homo sapiens would refuse to engage in the pursuit of tribal pride in 1914, there is also no expense the human race will spare in order to bail out the clown élite who consider themselves superhuman in 2014.

Thus proving that we rarely make the same mistake twice; we simply choose to m1815ake different ones.

And this, it seems to me, is what the politico-media class wants us to celebrate.

Well, I don’t see why we should stop there: here are some other upcoming centenaries:

* Sunday, 18 June 1815 – Battle of Waterloo. Victory of European royal families over Napoleon Bonaparte, an early Republican.

* October 1716 – Austrians declare war on Turkey, desecrate Belgrade.

* Autumn 1720 – Japanese confirm the existence of Europe, begin process of producing very small things no European can work.

* Summer 1919 – foundation of the Nazi Party by locksmith Anton Drexler.

* February 18th 1921 British troops occupy Dublin, lots of Irish folks variously shot, starved, tortured etc etc.

* December 13th 1937 – Japanese massacre of 300,000 innocent Chinese in Nanking (Nanjing), the former capital of China.

There’s a lot to be proud of when it comes to humanity. But there’s an awful lot more that would be better forgotten. August 1914 should be remembered as an outstanding piece of lunacy. This sort of thing is sick:


World Cup Reality Check

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Aired on the Doomstead Diner on July 18, 2014


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…A few days ago, my partner in Doom Surly put up an article from Pepe Escobar, one of our cross posting bloggers who covers the Geopolitical scene on the ground as a roving free lance reporter and writer. The article was titled “The Fall of a Superpower

From the title and given Pepe’s general geopolitical focus, I figured this was going to be about the implosion of the FSoA Military.

Instead, its a Futbol Tragedy from the World Cup, held over the last month or so in Brasil, where Pele once roamed the fields and took on God-like status in the world of Futbol. As trivial as a sporting event might seem given the current kilotons of Death From Above being heaped on the Gaza Strip today, sporting events still capture the imagination and emotions of millions of people, and no matter hwo bad things might be in a given neighborhood, sportsfans will dwell on the fate of their favorite team. In some cases, you’ll even see Cease Fires in ongoing wars when a “Big Game” is on…

For the rest, LISTEN TO THE RANT!!!


The Anti-Empire Report #121 by William Blum

Off the Keyboard of William Blum

Published  in The Anti-Empire Report, October 7, 2013 


The War on Terrorism … or whatever.

“U.S. hopes of winning more influence over Syria’s divided rebel movement faded Wednesday after 11 of the biggest armed factions repudiated the Western-backed political opposition coalition and announced the formation of an alliance dedicated to creating an Islamist state. The al-Qaeda-affiliated Jabhat al-Nusra, designated a terrorist organization by the United States, is the lead signatory of the new group.” 1

Pity the poor American who wants to be a good citizen, wants to understand the world and his country’s role in it, wants to believe in the War on Terrorism, wants to believe that his government seeks to do good … What is he to make of all this?

For about two years, his dear American government has been supporting the same anti-government side as the jihadists in the Syrian civil war; not total, all-out support, but enough military hardware, logistics support, intelligence information, international political, diplomatic and propaganda assistance (including the crucial alleged-chemical-weapons story), to keep the jihadists in the ball game. Washington and its main Mideast allies in the conflict – Turkey, Jordan, Qatar and Saudi Arabia – have not impeded the movement to Syria of jihadists coming to join the rebels, recruited from the ranks of Sunni extremist veterans of the wars in Chechnya, Iraq, Afghanistan, and Libya, while Qatar and the Saudis have supplied the rebels with weapons, most likely bought in large measure from the United States, as well as lots of of what they have lots of – money.

This widespread international support has been provided despite the many atrocities carried out by the jihadists – truck and car suicide bombings (with numerous civilian casualties), planting roadside bombs à la Iraq, gruesome massacres of Christians and Kurds, grotesque beheadings and other dissections of victims’ bodies (most charming of all: a Youtube video of a rebel leader cutting out an organ from the chest of a victim and biting into it as it drips with blood). All this barbarity piled on top of a greater absurdity – these Western-backed, anti-government forces are often engaged in battle with other Western-backed, anti-government forces, non-jihadist. It has become increasingly difficult to sell this war to the American public as one of pro-democracy “moderates” locked in a good-guy-versus-bad-guy struggle with an evil dictator, although in actuality the United States has fought on the same side as al Qaeda on repeated occasions before Syria. Here’s a brief survey:

Afghanistan, 1980-early 1990s: In support of the Islamic Moujahedeen (“holy warriors”), the CIA orchestrated a war against the Afghan government and their Soviet allies, pouring in several billions of dollars of arms and extensive military training; hitting up Middle-Eastern countries for donations, notably Saudi Arabia which gave hundreds of millions of dollars in aid each year; pressuring and bribing Pakistan to rent out its country as a military staging area and sanctuary.

It worked. And out of the victorious Moujahedeen came al Qaeda.

Bosnia, 1992-5: In 2001 the Wall Street Journal declared:

It is safe to say that the birth of al-Qaeda as a force on the world stage can be traced directly back to 1992, when the Bosnian Muslim government of Alija Izetbegovic issued a passport in their Vienna embassy to Osama bin Laden. … for the past 10 years, the most senior leaders of al Qaeda have visited the Balkans, including bin Laden himself on three occasions between 1994 and 1996. The Egyptian surgeon turned terrorist leader Ayman Al-Zawahiri has operated terrorist training camps, weapons of mass destruction factories and money-laundering and drug-trading networks throughout Albania, Kosovo, Macedonia, Bulgaria, Turkey and Bosnia. This has gone on for a decade. 2

A few months later, The Guardian reported on “the full story of the secret alliance between the Pentagon and radical Islamist groups from the Middle East designed to assist the Bosnian Muslims – some of the same groups that the Pentagon is now fighting in “the war against terrorism”. 3

In 1994 and 1995 US/NATO forces carried out bombing campaigns over Bosnia aimed at damaging the military capability of the Serbs and enhancing that of the Bosnian Muslims. In the decade-long civil wars in the Balkans, the Serbs, regarded by Washington as the “the last communist government in Europe”, were always the main enemy.

Kosovo, 1998-99: Kosovo, overwhelmingly Muslim, was a province of Serbia, the main republic of the former Yugoslavia. In 1998, Kosovo separatists – The Kosovo Liberation Army (KLA) – began an armed conflict with Belgrade to split Kosovo from Serbia. The KLA was considered a terrorist organization by the US, the UK and France for years, with numerous reports of the KLA having contact with al-Qaeda, getting arms from them, having its militants trained in al-Qaeda camps in Pakistan, and even having members of al-Qaeda in KLA ranks fighting against the Serbs. 4

However, when US-NATO forces began military action against the Serbs the KLA was taken off the US terrorist list, it “received official US-NATO arms and training support” 5 , and the 1999 US-NATO bombing campaign eventually focused on driving Serbian forces from Kosovo.

In 2008 Kosovo unilaterally declared independence from Serbia, an independence so illegitimate and artificial that the majority of the world’s nations still have not recognized it. But the United States was the first to do so, the very next day, thus affirming the unilateral declaration of independence of a part of another country’s territory.

The KLA have been known for their trafficking in women, heroin, and human body parts (sic). The United States has naturally been pushing for Kosovo’s membership in NATO and the European Union.

Nota bene: In 1992 the Bosnian Muslims, Croats, and Serbs reached agreement in Lisbon for a unified state. The continuation of a peaceful multi-ethnic Bosnia seemed assured. But the United States sabotaged the agreement. 6

Libya, 2011: The US and NATO to the rescue again. For more than six months, almost daily missile attacks against the government and forces of Muammar Gaddafi as assorted Middle East jihadists assembled in Libya and battled the government on the ground. The predictable outcome came to be – the jihadists now in control of parts of the country and fighting for the remaining parts. The wartime allies showed their gratitude to Washington by assassinating the US ambassador and three other Americans, presumably CIA, in the city of Benghazi.

Caucasus (Russia), mid-2000s to present: The National Endowment for Democracy and Freedom House have for many years been the leading American “non-government” institutions tasked with destabilizing, if not overthrowing, foreign governments which refuse to be subservient to the desires of US foreign policy. Both NGOs have backed militants in the Russian Caucasus area, one that has seen more than its share of terror stretching back to the Chechnyan actions of the 1990s. 7

“Omission is the most powerful form of lie.” – George Orwell

I am asked occasionally why I am so critical of the mainstream media when I quote from them repeatedly in my writings. The answer is simple. The American media’s gravest shortcoming is much more their errors of omission than their errors of commission. It’s what they leave out that distorts the news more than any factual errors or out-and-out lies. So I can make good use of the facts they report, which a large, rich organization can easier provide than the alternative media.

A case in point is a New York Times article of October 5 on the Greek financial crisis and the Greeks’ claim for World War Two reparations from Germany.

“Germany may be Greece’s stern banker now, say those who are seeking reparations,” writes the Times, but Germany “should pay off its own debts to Greece. … It is not just aging victims of the Nazi occupation who are demanding a full accounting. Prime Minister Antonis Samarass government has compiled an 80-page report on reparations and a huge, never-repaid loan the nation was forced to make under Nazi occupation from 1941 to 1945. … The call for reparations has elicited an emotional outpouring in Greece, where six years of brutal recession and harsh austerity measures have left many Greeks hostile toward Germany. Rarely does a week go by without another report in the news about, as one newspaper put it in a headline, ‘What Germany Owes Us’.”

“The figure most often discussed is $220 billion, an estimate for infrastructure damage alone put forward by Manolis Glezos, a member of Parliament and a former resistance fighter who is pressing for reparations. That amount equals about half the country’s debt. … Some members of the National Council on Reparations, an advocacy group, are calling for more than $677 billion to cover stolen artifacts, damage to the economy and to the infrastructure, as well as the bank loan and individual claims.”

So there we have the morality play: The evil Germans who occupied Greece and in addition to carrying out a lot of violence and repression shamelessly exploited the Greek people economically.

Would it be appropriate for such a story, or an accompanying or follow-up story, to mention the civil war that broke out in Greece shortly after the close of the world war? On one side were the neo-fascists, many of whom had cooperated with the occupying Germans during the war, some even fighting for the Nazis. Indeed, the British Foreign Secretary, Ernest Bevin, acknowledged in August 1946 that there were 228 ex-members of the Nazi Security Battalions – whose main task had been to track down Greek resistance fighters and Jews – on active service in the new Greek army. 8

On the other side was the Greek left who had fought the Nazis courageously, even forcing the German army to flee the country in 1944.

So guess which side of the civil war our favorite military took? … That’s right, the United States supported the neo-fascists. After all, an important component of the Greek left was the Communist Party, although it wouldn’t have mattered at all if the Greek left had not included any Communists. Support of the left (not to be confused with liberals of course) anywhere in the world, during and since the Cold War, has been verboten in US foreign policy.

The neo-fascists won the civil war and instituted a highly brutal regime, for which the CIA created a suitably repressive internal security agency, named and modeled after itself, the KYP. For the next 15 years, Greece was looked upon much as a piece of real estate to be developed according to Washington’s political and economic needs. One document should suffice to capture the beauty of Washington’s relationship to Athens – a 1947 letter from US Secretary of State George Marshall to Dwight Griswold, the head of the American Mission to Aid Greece, said:

During the course of your work you and the members of your Mission will from time to time find that certain Greek officials are not, because of incompetence, disagreement with your policies, or for some other reason, extending the type of cooperation which is necessary if the objectives of your Mission are to be achieved. You will find it necessary to effect the removal of these officials. 9

Where is the present-day Greek headline: “What The United States Owes Us”? Where is the New York Times obligation to enlighten its readers?

The latest step in the evolution of America’s Police State

“If you’ve got nothing to hide, you’ve got nothing to fear.”

So say many Americans. And many Germans as well.

But one German, Ilija Trojanow, would disagree. He has lent his name to published documents denouncing the National Security Agency (NSA), and was one of several prominent German authors who signed a letter to Chancellor Angela Merkel urging her to take a firm stance against the mass online surveillance conducted by the NSA. Trojanow and the other authors had nothing to hide, which is why the letter was published for the public to read. What happened after that, however, was that Trojanow was refused permission to board a flight from Salvador da Bahia, Brazil, to Miami on Monday, September 30. Without any explanation.

Trojanow, who was on his way to speak at a literary conference in Denver, told the Spiegel magazine online website that the denial of entry might be linked to his criticism of the NSA. Germany’s Foreign Ministry says it has contacted US authorities “to resolve this issue”. 10

In an article published in a German newspaper, Trojanow voiced his frustration with the incident: “It is more than ironic if an author who raises his voice against the dangers of surveillance and the secret state within a state for years, will be denied entry into the ‘land of the brave and the free’.” 11

Further irony can be found in the title of a book by Trojanow: “Attack on freedom. Obsession with security, the surveillance state and the dismantling of civil rights.”

Director of National Intelligence James R. Clapper Jr., who oversees the NSA and other intelligence agencies, said recently that the intelligence community “is only interested in communication related to valid foreign intelligence and counterintelligence purposes.” 12

It’s difficult in the extreme to see how this criterion would apply in any way to Ilija Trojanow.

The story is a poignant caveat on how fragile is Americans’ freedom to criticize their Security State. If a foreigner can be barred from boarding a flight merely for peaceful, intellectual criticism of America’s Big Brother (nay, Giant Brother), who amongst us does not need to pay careful attention to anything they say or write.

Very few Americans, however, will even be aware of this story. A thorough search of the Lexis-Nexis media database revealed a single mention in an American daily newspaper (The St. Louis Post-Dispatch), out of 1400 daily papers in the US. No mention on any broadcast media. A single one-time mention in a news agency (Associated Press), and one mention in a foreign English-language newspaper (New Zealand Herald).


  1. Washington Post, September 26, 2013
  2. Wall Street Journal, November 1, 2001
  3. The Guardian (London), April 22, 2002
  4. RT TV (Moscow), May 4, 2012
  5. Wall Street Journal, November 1, 2001
  6. New York Times, June 17, 1993, buried at the very end of the article on an inside page
  7. Sibel Edmonds’ Boiling Frogs Post, “Barbarians at the Gate: Terrorism, the US, and the Subversion of Russia”, August 30, 2012
  8. Parliamentary Debates, House of Commons, October 16, 1946, column 887 (reference is made here to Bevin’s statement of August 10, 1946)
  9. Foreign Relations of the United States, 1947, Vol. V (U.S. Government Printing Office, 1971), pp. 222-3. See William Blum, Killing Hope: US Military and CIA Interventions Since World War II, chapter 3 for further details of the US role in postwar Greece.
  10. Associated Press, October 2, 2013
  11. Huffington Post, “Ilija Trojanow, German Writer, Banned From US For Criticizing NSA”, October 1, 2013
  12. Washington Post, October 5, 2013

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.


William Blum is an author, historian, and renowned critic of U.S. foreign policy. He is the author of Killing Hope: U.S. Military and CIA Interventions Since World War II and Rogue State: A Guide to the World’s Only Superpower, among others.

Any part of this report may be disseminated without permission, provided attribution to William Blum as author and a link to this website are given.

Waging Progress…

Off the keyboard of Steve from Virginia

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Published on Economic Undertow on September 24, 2013

Somme 1

Unknown photographer, the French town of Péronne after being mined and shelled by combatants during the Somme offensive, 1916.

Discuss this article at the Geopolitics table inside the Diner

It can be said that war begins as a lie and ends as a tragedy. The easiest lie and the most grotesque … is that war is easy, rather, the next war will be easier than any of the others … that the end will be quick, that the ‘boys will be home by Christmas …’ that the war will not cost anything or it will be profitable to our side … that you too can be a winner. There are other lies, of course, all of them are closely twined together so tightly that is almost impossible to separate the strands. If history tells us anything it is that war is never easy, that short glorious wars have echoes that reverberate decade after decade, that the shadows of the great wars never really clear. Another lie is that technology applied to war possesses a form of moral supremacy identical to the forms it takes elsewhere … that war is integral to the progress narrative: more war = more progress;

Bent double, like old beggars under sacks,
Knock-kneed, coughing like hags, we cursed through sludge,
Till on the haunting flares we turned our backs
And towards our distant rest began to trudge.
Men marched asleep. Many had lost their boots
But limped on, blood-shod. All went lame; all blind;
Drunk with fatigue; deaf even to the hoots
Of disappointed shells that dropped behind …

On the first of July, 1916, the British and French launched a combined offensive against the Germans along a twenty-mile stretch of front between the hamlets of Gommecourt and Rosières-en-Santerre. The Somme River divided the battlefield from east to west, where Allied armies joined; the British to the north and the French to the south. The offensive was intended to press upon the right- or northern flank of a broad salient in the German front lines that protruded toward Compiegne about 50 miles north of Paris.

In preparing for the offensive, the Allied leadership was divided. Early on, the British sought a rapid breakthrough of poorly tended German defenses leading to a rapid advance into the German rear. The French wished to draw German reserves away from the charnel house that was Verdun. The two allies were never able to completely agree; a breakthrough in the area would not expose German strategic vulnerabilities, nor was there a particular strategic aim for the offensive other than it was past time for one.

The slow pace of planning was overtaken by events. The Verdun battle that had begun in February forced the French to draw on all its available forces. In June the Russian army launched the Brusilov Offensive into Galicia. This drew German reserves to the east, preventing a spoiling attack against the English. Ultimately, the Somme offensive became part of the greater effort to boil away the opposing armies by attrition; a non-strategy of ‘Verdun everywhere’. Neither side on the Western Front had the imagination — or enough of a manpower or materiel advantage — to alter the military balance, only one side to bleed the other and hope for the best.

An eight-day long English preparatory barrage of 1,500 heavy guns signaled the beginning of the assault north of the Somme River. Artillery alerted the Germans without seriously denting their positions. The defenders retired to dugouts or withdrew out of range until the barrage ended. Many of the British shells were duds while others fell short or passed over their intended targets. Meanwhile, commanders over-estimated the effect of the barrage and ordered infantry to advance across the no-man’s land in close order with heavy packs in broad daylight leaving them easy targets for German machine gunners.

Simple errors compounded problems: British troops — particularly junior officers — were inexperienced with little ability to act on their own initiative. British command compensated by drafting a rigid timetable for the assault. The British neglected to remove wire entanglements in front of of their own lines; troops were forced to pass through single file where they were exposed to the Germans. The barrage failed to clear German wire. As the assault got underway, the British infantrymen were unable to reach the German first-line positions and silence withering small-arms fire.

July 1 was the worst day in British military history. The army suffered 57,470 casualties, of which 19,240 men were killed, most of them on a six mile stretch of front between Gommecourt and the Albert-Bapaume road. Reinforcements were held up by waves of wounded streaming back toward the British line. Aid stations and field hospitals were overwhelmed. For all the bloodshed and courage of the soldiers, very little in the way of ground was gained. By the end of the day the front had been advanced only a few hundred meters around Mametz and Montauban with small gains elsewhere.

In the French sector, the artillery preparation were less deliberate, more shells were fired over a shorter period which gave the Germans less time to react. French infantry was able to quickly capture German forward positions and consolidate them. French soldiers had more combat experience than new British recruits and employed better tactics; Poilus bypassed and isolated German outposts rather than assaulting them in slow moving human waves.

Over the next four months, the offensive deteriorated into a series of bloody piecemeal attacks. When it finally petered out in November, the Germans had been pushed back to the greatest depth of about six miles. The cost was stupendous; approximately 1.2 million dead and wounded on both sides.

The 450,000 British losses represented the flower of English society, of the country’s working- and middle classes. These were the recruits enlisted into the army immediately after the war began in 1914; the Somme represented their first appearance in the trenches. The professional soldiers who had polished their craft in Britain’s numerous colonial wars were gone. The lives thrown away carelessly at the Somme were England’s fittest, most determined, best-educated and idealistic young men. The cost to Britain’s society was incalculable. On the other side, the 450,000 losses to Germany represented the flower of the Kaiser’s army; the last of its elite, peace-time trained pre-war cohort. By the harsh calculus by which wartime outcomes are measured, the Somme was a tremendous Allied success, the turning point of the war. The Allies had traded some inexperienced youths for an equal number of Germany’s better trained, more experienced veterans.

After the battle, the Germans would fill its ranks with the sorts of men that now populated the trenches of its Eastern European adversaries, the kinds of soldiers it at the beginning did not want or need: the less fit, the un-healed wounded pressed back into duty, the too-old or too-young, the shirkers, the anarchists, bohemians and revolutionaries, the criminals removed from prisons; those passed over in the first flush of recruitment as being too small, too uncertain, the workers in war-factories replaced by women and children … all those previously deemed unlikely to obey orders without question. The new soldiers were prematurely aged, skinny, haggard, sunken-chested, hollow cheeked with bad teeth; stunted from poverty and chronic ill-health, combed from the industrial ghettos and press-ganged from the Balkan margins of the expanding German Reich; they were the flower of nothing, the laborers and porters, stupid peasants and farmers, long-term exiles from gainful employment, the inmates from asylums. These were conjoined to the battlefield survivors; damaged soldiers who had learned by experience to ignore orders they did not like along with officers who had learned not to give them …

The fit and brilliant young soldiers ready to laugh at privation and danger would not be seen on the European battlefields until the Americans arrived long after the combatants had destroyed themselves, late in 1917.

A consequence of less-than-able soldiery was mutinies in the ranks. The Poilus rebelled 1917; fed up with the pointless slaughter and the apparent unconcern of the the high command that drove them to their deaths. The Austro-Hungarian army unraveled due to the strains imposed by the Brusilov campaign which in turn ended with a Russian mutiny. The French rebellion was suppressed, that in the Russian army was not; in 1917 the Tsar gave way to Lenin and the Bolsheviks. Germany’s mutiny came in 1918 after victory in the east … and crushing defeat in the trenches; it terminated the Kaiser’s rule and with it his war.

The Somme battle is noteworthy for the late appearance of the armored fighting vehicle and the deployment of large numbers of aircraft in combat roles. World War One was a technological war; there was the continuous application of the fruits of science and mechanical invention. Along with tanks and aircraft were improved rapid fire artillery and machine guns, smokeless powder and high explosives, submarines, depth charges, hand grenades, flamethrowers, wireless communications and poison gases. Technology then, as it does now, offered chances for one side or the other to end the war quickly. On the battlefield, technology increased the ability of countries to wage war … rather, wage ‘progress’ against the other side.

Advantages gained by technology ware short-lived. As soon as one side produced an invention, the other copied it or developed countermeasures. The tanks at the Somme battle were not strategically important. They broke down or caught fire, their armor plating was thin and easily punctured with light artillery or even machine guns. The vehicles were large and unwieldy, hard to see out of … they got lost on the battleground or tipped into shell craters. On level ground they were unable to keep pace with infantry. More technology would be needed before the tank would be useful as a battlefield weapon … and more countermeasures.

The first appearance of lethal gas was a little over a year earlier, on April 22, 1915, during the Second Battle of Ypres, when German troops released 168 tons of chlorine gas from pressurized cylinders against French Territorial forces. The attack was successful in that the Algerian and Moroccan troops fled leaving behind 3,000 dead and a large gap in the Allied lines. The attack was a failure because the Germans were unprepared for their tactical success and had few reserves to exploit the opening which was soon blocked with a Canadian division. The Canadians countered the gas by urinating on pieces of cloth and using them as ad-hoc face masks.

As the war continued, so did the onslaught of gas; there were improvements in its lethality and the facility of its use. Along with improvements came systematic countermeasures, so that the effectiveness of the different forms were of diminished even as there were vastly increased amounts deployed. The primary chemical weapon of World War I was mustard gas discharged from artillery shells. Even though gas turned out to have minimal strategic importance, gas shells made up a large percentage of bombardments by both sides. Gas casualties were low — 3% or less of the total — cost to defenders was high as victims required more convalescent care at aid stations and in the rear than did other kinds of casualties. Gas also disproportionately effected morale, the bulky countermeasures were uncomfortable and confining. At the same time, properly equipped and trained soldiers were little effected by gas.

The gases used in the first world war were irritants or vesicants (blistering agents) that were lethal only when concentrated … at the impact point of a shell or at the bottom of a trench where the heavy compounds collected. Most effective as killers were not gases but diseases — including influenza which appeared in 1918 — infection of even minor wounds, artillery bombardments and fire from small arms especially machine guns.

GAS! Gas! Quick, boys!– An ecstasy of fumbling,
Fitting the clumsy helmets just in time;
But someone still was yelling out and stumbling
And floundering like a man in fire or lime.–
Dim, through the misty panes and thick green light
As under a green sea, I saw him drowning.
In all my dreams, before my helpless sight,
He plunges at me, guttering, choking, drowning.

After the war research began on the second generation of military gases which were designed to be lethal at once in very small quantities. At the same time governments looked to the accumulated date and measured the costs and benefits of using gas on the battlefield.

Chemical weapons were not controllable: operational success depended on the weather. Changes in the wind brought gas back onto the army that discharged it. Cold rendered some types of gas harmless. Non-persistent gases dissipated quickly leaving little time for the attacker to exploit the effects of the gas. Persistent gases left soldiers unable to advance into contaminated battlefields without casualties.

With gas weapons available, there was no way for a country to ‘opt out’ of gas warfare costs. Countries foreswearing chemical weapons would find it necessary to pursue costly countermeasures, leading to a chemical arms’ race. The scale of World War One was sobering, the numbers hard to comprehend: even a small country might field an army of a million men or more; each needing protective gear and special training … also millions or more convalescent beds. In a gas war, the care of long-term invalids would bankrupt the victors. Gas created disproportionate adverse effects on morale. Even minor exposure left soldiers incapacitated for long periods; the agonies of gas poisoning and terror behind the lines of both soldiers and civilians contributed to breakdowns in discipline and revolts. Even if the weapons themselves did not affect outcomes, the related costs did. Gas threatened to make war too expensive to fight, large countries would be unable to intimidate or invade smaller ones. There would be no victories, no conquests, no glory or spoils. A large reason for having governments in the first place would vanish, put into receivership by … chemists.

Technology such as railroads, steamships, tanks and aircraft expanded the ability of countries to wage war at lower unit cost and over a much broader scale. Chemical and biological weapons offered the revolutionary potential to disable war itself … to undermine the desire on the part of citizens to submit to military discipline or support war policies. Gas was disruptive technology carried to its logical conclusion; it wasn’t too destructive, it was too subversive. The more capable or deadly the gas arsenal the more costly and useless it would become. World War One gases were incapacitating, costs were high but survivable. Science would soon offer gases of unparalleled lethality … accompanied by infinite costs. Progress would work in reverse: unit costs would balloon, military force would be too costly to deploy, the option to wage war would narrow then disappear. In a series of treaties beginning with Versailles, the Americans and Europeans agreed to control if not prohibit outright the use of chemical and biological weapons. These agreements were not difficult to make as adversaries likewise agreed to limit the size and numbers of capital ships for similar reasons.

Chemists in Germany after the war began investigatng agents that included cyanide and organophosphates. Phosphate compounds were patented by the Germans in the early- to mid 1930s. Originally, these were intended as pesticides, their lethality suggested themselves as military weapons. The British and Russians synthesized their own varieties, all of which effect the nervous system leading to respiratory paralysis and asphyxiation. The pathway of nerve gas in the body is not limited to inhalation, the gases can be absorbed through the skin, protection is needed for the entire body. Organophosphate nerve gas analogs are commonly used today as insecticides.

In 1935, the Italians used small amounts of mustard gas against soldiers and civilians during their conquest of Abyssinia. Japan used unspecified war gases against the Chinese during the late 1930s along with biological weapons.

Once World War II began, Germany began manufacturing the phosphate gases Tabun, later Sarin and Soman in large quantities. The Germans did not use their war gases on the battlefield, they were uncertain as to the Allies capacity; they feared being inundated by Allied nerve gases.

Gases were deployed most effectively by Germany against against war prisoners, ‘undesirables’ and the infirm during WWII. The gases used were carbon monoxide from engine exhaust and cyanide/prussic acid fumigants; both were introduced into confined spaces packed with victims. The Germans built a comprehensive, systematic killing apparatus; euthanasia centers for the elderly, ‘T-4′ centers for invalids, ‘clinics’ and ‘infirmaries’ in concentration camps, gas vans, various ‘crematoria’ as adjuncts to ordinary concentration-and slave labor camps as well as purpose-built killing camps. Within the two great killing camps, at Birkenau and Treblinka in Poland more than three millions were murdered with gas. Nearly a million of these were asphyxiated by carbon monoxide at Treblinka, the rest by ‘Zyklon B’ at Birkenau. It is likely that the total number of gas deaths during the second world war were greater than all the gas casualties — killed and wounded — inflicted during the first world war.

By the harsh calculus by which wartime outcomes are measured, the German poison gas campaign against its own civilian population was a complete catastrophe. Even if Germany had been able to hold off the Allies, the consequence of mass murder and slave labor would have been diminished output and the collapse of the German regime from within … just as the same miscalculation fatally undermined the Soviet Union. In Germany, the returns on the ability to wage progress — to apply technology to solve the problem of how to kill others — had diminished to nothing. Using more gas and building more death camps would not have saved Germany from destruction, rather, doing so insured it.

After the defeat of the Axis powers in 1945, the Americans and Russians uncovered German nerve gas laboratories and stockpiles. Gases as well as bacteriological agents were soon produced in very large quantities in both countries in a sort of semi-clandestine arms’ race.

Chemical and biological agents have been used in war since the Third Century BC and perhaps earlier. Gas has been deployed against rebels in Morocco by the Spanish, against Eritreans by Ethiopia, by Iraq against Iran, by the US against the Vietnamese — and ourselves, by the Soviets against Afghan Mujeheddin, by Soviet proxies against Hmong tribesmen and Khmers in Southeast Asia, by Iraq against Kurds at Halabja and elsewhere in 1988 …

During the Vietnam War, the US dispersed thousands of tons of herbicide over large areas of South Vietnam, Laos and Cambodia. The purpose was not to kill outright but to remove cover for the enemy as well as destroy their food supply. The herbicide ‘Agent Orange’ was contaminated with dioxin and the ill effects were experienced by both civilians as well as American and Allied soldiers operating in these areas.

The more things change, the more they remain the same; a war begins as a lie. Poison gas appears to have been used recently against civilians in Syria. It is not clear who launched the gas attacks, yet the American establishment is quick to seize on this latest event as justification for a military intervention … to wage high-technology progress against unlucky Syrians. The establishment insists the world is outraged about Syrian gas which is false. What is being challenged is the bosses’ prerogative to bully smaller countries. American citizens are wise to say ‘enough!’ The establishment claims that a war in Syria would be easy; the failed US wars in Afghanistan and Iraq speak for themselves. Progress military-style has turned out to be a failure.

Here is another lie: that America has a moral responsibility to make bad matters worse in Syria … because worse is the only possible outcome.

If in some smothering dreams you too could pace
Behind the wagon that we flung him in,
And watch the white eyes writhing in his face,
His hanging face, like a devil’s sick of sin;
If you could hear, at every jolt, the blood
Come gargling from the froth-corrupted lungs,
Obscene as cancer, bitter as the cud
Of vile, incurable sores on innocent tongues,–
My friend, you would not tell with such high zest
To children ardent for some desperate glory,
The old Lie: Dulce et decorum est
Pro patria mori.

— Wilfred Owen; ‘It is sweet and glorious to die for one’s country … ‘ Owen was killed in France a week before the Armistice was to take effect, November 4, 1918.

The Running Game

Off the Keyboard of Steve from Virginia

Published originally on Economic Undertow on September 6th, 2012


– Unknown cinematographer ‘Titanic Scene’ (Paramount/20th Century Fox)


The ‘question du jour’ is — and has been for awhile — ‘when’?

‘When’ is the dam going to burst? ‘When’ will the coyote hanging in mid-air fall? ‘When’ is the decrepit status quo going to collapse?

‘When’ is so … yesterday! Coyotes have been dropping for five years. The process has been satisfactorily papered over to a large extent. Managers have learned a lot about crisis management since 1929 and 1973 and 1987. When there are difficulties the managers know to run out the shills. The public — and markets — are credulous. They want to believe. Nobody wants a Greater Depression and will do whatever is possible to avoid one.

There was no television in 1929. There was no Internet in 1973 or ’87. With modern media there are unlimited distractions that can be offered at near zero-cost. In order to divine reality one has to look for irretrievable actions on the part of managers themselves: you have to follow the running feet.

Here is some distraction right here:


Building the Next China

Stephen S. Roach (Caixin)

Concerns about the country’s economic situation are overblown and ignore a significant fact: urbanization will be the next engine of growth.

But the hype of the pessimists overlooks one of the most important drivers of China’s modernization: the greatest urbanization story the world has ever seen. In 2011, the urban share of the Chinese population surpassed 50 percent for the first time, reaching 51.3 percent, compared to less than 20 percent in 1980. Moreover, according to projections by the Organization for Economic Cooperation and Development, China’s already burgeoning urban population should expand by more than 300 million by 2030 – an increment almost equal to the current population of the United States. With rural-to-urban migration averaging 15 to 20 million people per year, today’s so-called ghost cities quickly become tomorrow’s thriving metropolitan areas.

Shanghai Pudong is the classic example of how an “empty” urban construction project in the late 1990′s quickly became a fully occupied urban center, with a population today of roughly 5.5 million. A study by international management consulting firm McKinsey & Co. estimates that by 2025 China will have more than 220 cities with populations in excess of one million, versus 125 in 2010, and that 23 mega cities will have a population of at least five million.

China cannot afford to wait and build its new cities until after newly migrated citizens have arrived. Instead, investment and construction must be aligned with the future influx of urban dwellers. The “ghost city” critique misses this point entirely.


See? Everything is going to be fine! Why? Because Roach says so! He’s a high-powered financier shill with fingers on the pulse. He makes the, “They aren’t making any more land,” argument. With more people and the limited amounts of build-able land certainly demand/prices/economies have nowhere to go but up, right?

Problem is nobody is making more people with money. The money trend is going in the wrong direction: the reality direction as James Howard Kunstler would put it. More people are going broke faster. What remains of money vanishes from circulation, lines of credit are cut off, putative apartment buyers are denied mortgages because they simply don’t earn enough to make the payments. The tens of millions of empty apartments that Steve Roach celebrates are mostly owned by a modest group of Chinese speculators with access to no-questions-asked, low-cost credit. These speculators are stranded, waiting for the horde of Chinese consumers who are never going to arrive. As in the West, the cost of credit … has become too high for individual buyers to afford.

The speculators are victims of their own greed. In order to sell and capture gains they must find buyers who are more successfully greedy than they are (or the government has to bail them out).

The 300 millions that Roach and the Chinese speculators are counting on are near-penniless rural peasants and sweatshop workers. Already these workers complain that urban housing is unaffordable. This worker-demand never really mattered, instead it was the supply of credit from overseas looking for yield. China has been at the end of a massive capital pipeline from the US and elsewhere. The Chinese narrative of perpetual real estate growth and ever-increasing prices is the same as the free-money narrative in America, UK, Dubai, Spain, Ireland and elsewhere. Credit flowed into real estate in all these countries at the same time. Meanwhile, economies were cutting workers’ earnings: something has to give.

There is more to economies than assuming can openers, they are sub-components of culture. What economies manage are cultural goods, not ‘things’ but surrogates for things. What makes China China are the cultural fetishes that represent Chinese ‘modernity’ with an accompanying narrative of American-style material progress.

What American commercial artists, television producers and advertising managers devise, the unimaginative Chinese instantly covet. Their defining idea of America is post-Dean Martin-Joey Bishop-Liberace-Bugsy Siegel Las Vegas: the entire country is turned into a cheesy version of The Strip. The ‘Old China’ that passed the test of centuries is swept away as rapidly and completely as possible. It is replaced with forests of vacant, brutalist 60 story concrete towers, freeways, rail networks, shipping terminals, shopping centers, airports and the rest of Sprawl-America automobile detritus. All of this rests uneasily alongside gigantic, Earth-destroying/polluting industrial complexes … collateral needed to propel the whole mess forward.

The China narrative has been offered as the improbable Horatio Alger communist-rags to riches story: gritty (fanatically xenophobic) workers compete with the rest of the world to make its shoes, pants, salad shooters, lawn furniture, oil tankers, catalytic crackers, CNC machines, automobiles, nuclear reactors, poison dog food and other consumer ‘durables’. According to the narrative, Chinese are ambitious, hard-working, enduring, risk-taking hyper-capitalists. The Chinese planned economy is well-managed. The Chinese don’t make foolish policy errors as do Americans or Europeans, they aren’t lily-livered softies, they crush anyone and anything who stands in the way of progress. They do whatever is necessary to become rich as fast as possible.

This is the establishment’s narrative, one of non-stop ‘sustainable growth’ … Despite hiccups, growth is assured to begin … tomorrow!

Tomorrow: if you have to ask how much it costs you cannot afford it, (BBC):


China city party chief ‘fled with money’

A Chinese report says billions of dollars have been stolen by corrupt officials in recent years

A former top official of a city in northeast China has fled the country – reportedly with millions of dollars, Chinese reports say.

Wang Guoqiang, who was party secretary of Fengcheng city in Liaoning province, left for the United States in April with his wife, the People’s Daily said.

Local officials said Mr Wang, who was being investigated for corruption, had been removed from his post, it said.

Several reports cited 200m yuan ($31.5m; £20m) as the amount taken.

The local officials did not elaborate on allegations that he had embezzled and transferred the funds to the US, where his family is believed to be.

A report released by China’s central bank last year said more than $120bn (£74bn) had been stolen by corrupt officials who fled overseas, mainly to the US.

Between 16,000 and 18,000 officials and employees of state-owned companies left China with the funds from the mid-1990s up until 2008, the report said.


Officials and other prominents taking wads of cash and going to another country is irreversible. Rather than happy multitudes goose-stepping toward prosperity and their very own high-rise apartments, the rats are fleeing from the sinking Chinese ship as fast they can.

Bruce Krasting asks:


If the Treasurer for the city of Las Vegas (Pop. 580,000) stole $30Mn of tax payer money and fled to Canada or Australia, the US FBI would have the Aussies and Canucks hunt them down and have them extradited back home. Why aren’t the Chinese doing the same thing? 

The authorities enacted a ban immediately to report on the case, and blocked Wang’s name in search engines. However, in blogs, the news spread faster than censors could delete it.


What matters is the sanctity of the narrative, who cares about the money? Under everyone’s noses, China is morphing from a capitalist paragon into (another) nose-diving coyote.

It’s not just the thievery and corruption, it is the business ‘slowdown’. Steel makers, ship builders, property developers, banks and finance guarantee companies and manufacturers are corpses floating down the river. It really is different this time: none of these enterprises are ‘coming back’.

China + modernity = business collapse is not the dynamic the bosses had in mind when the made the jump to the America Way. As such, the Chinese arrived at the party just as the last line of cocaine was being snorted: the US narrative has fallen apart, so has the hyper-snobbish stiff-little-finger bourgeois narratives of Americanized Europe and Japan. Perhaps the Chinese should have examined the old whore’s fake boobs and pustulent genitalia more carefully before deciding to jump in bed with her.



Join Up!

James Howard Kunstler

Meet the new third party in national politics: Reality.

Reality is the only party with an agenda consistent with what is actually happening in the world.


Heh heh … reality IS what’s happening in the world.


Reality doesn’t need to drum up dollar donations from anyone. Reality doesn’t have to pander to any interest group or subscribe to any inane belief system. Reality doesn’t even need your vote. Reality will be the winner of the 2012 election no matter what the ballot returns appear to say about the bids of Barack Obama and Mitt Romney to lead the executive branch of the government. In the vicious vacuum that national party politics has become, the Republicans and Democrats are already dead. They choked to death on the toxic fumes of their own excreta. They are empty, hollow institutions animated only by the parasites that feed on and squirm over the residue of decomposing tissue within the dissolving membranes of their legitimacy. Think of the fabled Koch brothers as botfly larvae and the Securities Industry and Financial Markets Association PAC (SIFMA PAC) as a mass of writhing maggots.


The Reality Party is something that can be gotten behind here at Economic Undertow. Where does one go with all this? Managers race out the door with whatever loot than can be stuffed into suitcases. Here is the Euro-style reality, by way of Mark Grant:


The central bank of Spain just released the net capital outflow numbers and they are disastrous. During the month of June alone $70.90 billion left the Spanish banks and in July it was worse at $92.88 billion which is 4.7% of total bank deposits in Spain. For the first seven months of the year the outflow adds up to $368.80 billion or 17.7% of the total bank deposits of Spain and the trajectory of the outflow is increasing dramatically. Reality is reality and Spain is experiencing a full-fledged run on its banks whether anyone in Europe wants to admit it or not.


Just like China only more so …


Between December of 2011 and the end of March 2012 the Spanish banks bought $109 billion of the Spanish sovereign debt. Much of this was facilitated by the ECB who lowered and lowered again the collateral rules and handed the money to the Spanish banks in such a size that bad things, very bad things will result if Spain hits the wall and defaults. Then since March, as forced by their own inadequate capital positions, the trend has reversed and the Spanish banks have sold $21.3 billion of Spanish sovereign debt with $11.7 billion in July alone as capital flees from the Spanish banks and the actuality of the balance sheets overcomes the “dynamic provisioning” that helped to cause the fantasy. The friendly “suggestions” by national governments in Europe are also getting a push back from European buyers. BNP recently imposed a $12.5 billion debt limit by country and many other banks in Europe are following suit. BNP has reduced their sovereign debt holdings by 35% since June 2011. In July, the aggregate of sovereign debt reduction for all of the French banks was $8.7 billion as they took advantage of the ECB speculation to lower their holdings.


When the central bank is insolvent because it makes leveraged/unsecured loans or appears to do so — there is no lender of last resort. No lender of last resort and there is no guarantor for deposits. If all institutions are insolvent the currency which represents these things is worthless.

Capital flow is from bank account => account at another bank => account in another country => account in another currency => out of currency into durable good/asset. Unsurprisingly, the gold price is increasing during a period of credit deflation.



Figure 1: Keep in mind there are also bank runs out of Greece, Italy, Portugal and Ireland. funds flow from Europe into Switzerland, the flow itself jeopardizes the viability of the Swiss franc as it becomes a proxy for the increasingly worthless euro … the reason to prop up the euro at some stable rate of exchange is to facilitate removing funds from one country to another.


Spanish Bank Runs and Struggling Deutsche Bank:

There is a fully fledge bank run ongoing in Spain that is not being adequately reported in the mainstream news media. In June $70 billion dollars left their system. In July it was $92 billion which is 4.7% of total banking deposits. This means that from January to July of this year $368 billion or 17.7% of total banking deposits has fled Spanish institutions. Previously this money was heading for Switzerland and Germany but with the truth filtering out concerning the weakness of German and Swiss banks alternative destinations are now being chosen. The emerging weakness of Deutsche Bank is a particular worry for the ECB and the situation is being exacerbated by a sharply contracting German economy. As reported in Spiegel today:

“Euro Crisis Starts to Bite. German Export Orders Fell Sharply in August.

Exports are a major pillar of the German economy, but now the sector is starting to feel the impact of the euro crisis and the global economic slowdown. German export orders fell in August by the highest rate in more than three years, the Markit financial information company announced Monday after conducting a survey of 500 industrial firms.

“Survey respondents commented on a general slowdown in global demand and particular weakness in new business inflows from Southern Europe,” the institute said. The firms hardest hit by declines are manufacturers of machinery and other investment goods as well as producers of intermediate goods such as chemicals.

In the first half of 2012, German exports had still grown thanks to demand from Japan, the United States and Russia. But it was already evident then that exports to crisis-hit countries were falling sharply, and that trend is now continuing.

Markit economist Tim Moore said the German industrial sector is going through its worst quarter — the three months to the end of September — in more than three years.

“The new orders figures are especially disappointing, with export work dropping at the fastest pace since April 2009 amid an ongoing deterioration in global demand,” he said in a statement.”


ECB Boss Mario Draghi is trapped. He needs to keep propping that euro even as doing so is fatal. Direct bond-buying by the bank will accelerate bank runs and there will be nothing to be done to stop them.

Building/not building more concrete towers in China is fatal. Germany selling/not selling more automobiles in Europe is fatal. Adding more carbon/not adding carbon to the atmosphere is fatal. As for the Americans, the running game has been underway since the crisis began. The smart money is long gone from speculative markets, all that remains is the dumb money milling around waiting for tomorrow to arrive.

Comes that happy day, there are runs out of currencies. The Chinese thieves, the Spanish depositors and the rest are voting with their feet. The game is over and they are taking their balls home. All of them. It’s every man for himself and devil take the hindmost.


GREECE & SPAIN: The real story

Published originally on The Slog on July 12th, 2012

In Clubmed, the guilty are protected and the innocent turn to violence. The Olympic Games are a sideshow.

Weapons of mass distraction are at work, but they will not work

The Daily Telegraph website’s ‘Hot Topics’ this morning read as follows:

Olympics: great moments Olympics: torch relay Olympics: Team GB Olympics: schedule Olympics: graphics

All fine and dandy if you like that sort of thing – despite the growing signs that its organisation is all over the place. But three things of late have conspired to ensure that Britain has its head firmly inserted up its backside at the moment: weather damage, the ‘Barclays scandal’,  and the Olympics.

The Government has awarded us the taxpayers the job of paying for the bad weather via our insurance premiums (another hidden bailout), the Libor scandal represents the glowing testicles of the global banking hyena (another scam to make us poorer), and the Olympics look set to be both the wettest in history – and a massive drain on our resources for no return (yet another legacy of Tony Blair).

But it would do no harm to remember where the Olympics started – and what its founder is still going through at the hands of Berlin am Brussels hypocrisy. And if we have an interest in sport (and for the vast majority, that doesn’t stretch to an Olympics covered in logos and sprinkled with puerile hype) then let us take our minds back to Spain, whose national football team is the envy of the world, and whose club side Barcelona just keeps on winning the Champions’ League – because it is the best and most stylish team of players ever assembled.

Yesterday, Senor Rajoy the Spanish Prime Minister raised VAT and cut social expenditure in a country already on its knees, and not surprisingly violence ensued. Despite the Troika’s Page One error of reducing demand, cutting output and demanding slavery in preference to debt forgiveness – and the EU’s continuing determination to deny that the euro has been a boon for some but a disaster for others – no amount of hard empirical evidence demonstrating the socio-economic disaster unfolding in the ClubMeds has made the slightest dent in the tin hats of Merkel, Schäuble, or Lagarde. The equally doubly-endowed standards of Nicolas Sarkozy have now been replaced by a dull Leftwing Establishment dweeb called Francois Hollande, but for all his greyness and lack of reforming instincts within France, the new President has at least put his hand up to say, “This is madness, and it must stop”.

Less remarked by the MSM yesterday, however, was this piece of news from Greece, published by respected title Kathimerini: (my emphasis)

‘In the shadow of another report on tax evasion – this one using
bank records – that shows tax cheats are robbing Greece blind of
critical revenues, seven retired and active tax officers, including four
high-ranking administrators, were sentenced to more than 70 years in
jail for embezzlement of up to 28 million euros  – then
promptly released on bail.’

This band of merry men first came under suspicion in 2001 after a retired inspector, Aliki Kyriakaki, made claims that she had come under pressure from certain members of the group to reduce tax fines against a large company she’d been auditing – and found to have arrears of 36 million euros, or $44.2million. She said they offered to write off the debts if they were paid bribes.
She said their tactics to keep her silent included having her disciplined numerous times on specious charges, for which she was
cleared completely by an administrative court. She had refused to work with her colleagues and become a whistle-blower to
reveal the corruption.

But her courage was all for nought, because the convicted felons were granted ‘conditional release’…although the authorities would not release their names. This despite the huge sums they had blackmailed and embezzled from taxpayers over the years. These low-lifers are thus now free to do the bidding of the gargoyles in Brussels and the IMF: and lest we forget, they will also be doing the work of the banks, speculators and pro-EU elites who caused all this mess in the first place. That is, they will continue to rob from the poor in order to ingratiate themselves with the rich.

The Greek legal system also allows convicted felons to buy themselves out of prison sentences for tax evasion. Naturally this usually means that the poor, minor dodgers rot in prison…and the troughers walk away. Most of the €70bn lost last year to the Hellenic Exchequer involves the latter: some 200 alleged tax cheats have been rounded up in recent months, but not one high-level business figure has been prosecuted….and as we’ve seen, by far the biggest heist in Greek tax history has resulted in the guilty being….let off.

As southern Gallic relaxez-vous stretches down to meet Mediterranean manana, the attitude held by the majority of taxpayers is thus very simple: “the government cheats me and hires blackmailers to rip me off, so I cheat them at every opportunity”. As my own woodman here in the Lot said to me six years ago, “I don’t pay tax m’sieur, it only encourages them”.

I have reached the stage with the Fiscal Union/Troika juggernaut where I no longer accept the thesis that Berlin am Brussels is simply inflexibly dumb. I think that particular axis of evil knows exactly what the problem is, and how it happened, viz: the EMU beyond northern Europe was always going to doom those who took it up, because it was of less than no use to them given the nature of their economies. And the fiscal rules would never suit Europe south of Bordeaux because the entire relationship between the citizen and the taxpayer is different.

This deserves some further elucidation.

Before they blagued their way into the eurozone on the back of EU hubris and graft, Greece and Spain were doing just fine thank you very much. Having at various times kicked out fascist colonels and a sclerotic Caudillo, both countries saw enormous growth through the liberalisation of capitalist mechanisms alongside generous welfare systems. Tax evasion was and remains endemic, because the elites are corrupt, and the tax collectors a bunch of blackmailers. But none of that mattered too much, because their primary ‘export’ was the country itself – the weather, the food, the culture, the olive oil, the glistening oceans and stunning offshore islands.

Above all, what Greece and Spain had going for them (when it came to attracting Nordeuropa holidaymakers) were high temperatures and low costs: meals, wine, beer, flights and hotels tended to be cheap. When I first went to Greece in 1970, you could bum around the islands on not much more than twenty quid a week. My first fortnight in Spain cost £50 – flights and apartment included. The sun shone, the ferries were sporadic, the people were gentle: it would be done manana, but in the meantime enjoy your yoghurt and honey, have some tapas with your La Ina, sleep it off on the beach, and then eat late with the locals and their children at the Taverna. With these two venues and Portugal, Europeans would never want for cheap, relaxing holidays.

But then along came the eurozone, and soon afterwards the plot was completely lost. Spain took advantage of cheap ECB and US bank money to invest in a second-home property bubble that could never sustain itself; and probably more than any other ezone founder, the Greeks swapped their wonderfully good value ‘drachs’ for an immediately inflationary euro…and its elites really began to dive fully-clothed into the money-trough. In this of course, the pols and bureaucrats were aided and abetted by Germany in general, and Siemens in particular. As vacation destinations, their problem was exacerbated by the growing realisation that other parts of south-eastern Europe, and intercontinental long-haul, were where one could now find excellent value and something a little more esoteric – be that Croatia or Thailand.

The foregoing is obviously a gross simplification of how we got to here, but it’s more or less fair. Given cheap loans by Trichet, an expensive currency made even more uncompetitive for exports by a successful Germany, and a spendaholic France, the ClubMeds saw their boom slowing down in real terms by 2004. But like everyone else in the world, they chose to borrow their way out of a changing balance of power between Europe and Asia.

Probably, sanity is at hand. As I predicted against the tide last month, the Karlsruhe Court isn’t rolling over, and Gauck is sticking to his guns. Schäuble-licken is bellowing that the sky will fall in if Germany ‘dithers’ further (it probably will) but both Bankfurt and the Opposition Parties can smell blood: they are starting to push a coordinated line – that Germany will be ruined by Merkel’s ego – and Fritz in the street is beginning to catch on. The longer things drag on, the more obviously inevitable the euro’s demise in its current form will become – which is, let’s face it, what Wolfgang Schäuble is really upset about. His dream of being Ubersturmbannfuhrerfinanz for the eurozone is fading rapidly.

As long as bonds spike and austerity rules, the euro will move even more rapidly towards its implosion. There are three options left today:

1. A Nordeuro is formed, led by Germany (and perhaps a Sudeuro by France)

2. Germany quits the euro completely

3. Insolvency events overtake the Sprouts, and the entire eurobanking system falls apart, immemdiately infecting the US.

If you can choose between them right now, than you’re a better man than I. Stay tuned.

Waste Based Society II: Vendor Financing & Planned Obsolescence

Discuss this article inside the Diner


Why do we run a Waste Based Economy (WBE)? It seems illogical on the surface, but there is a fundamental reason for it.

The reason is this: In a Conservation Based Economy, nobody gets OUTRAGEOUSLY rich!

In this post I am going to move away from the Glass Bottles and Jars to the most glaring example of waste we have been engaged in for the last century or so since the first Model Ts rolled off Henry Ford’s production line, the Automobile.

Let’s begin with the Car itself. Marvelous invention it was, the Horseless Carriage. Put a lot of Horses out of work of course, but they were quickly recycled as Dog Food. With Gas priced cheaper than Oats and one Engine capable of doing the work of a Hundred Horses or more, nobody is going to stick with Horses except some really stubborn Amish who don’t even shave!

So everybody enamored of progress and who ALSO wishes to actually SURVIVE in this new world of the Horseless Carriage wants one. You can’t compete if you have a Horse and Buggy and the next J6P has a Car and can get to the Jobsite faster than you can. If you are a Farmer, you can’t produce as much food as cheaply as the guy running a Tractor with your Team of Oxen. If you don’t get one of these New Fangled inventions, you are gonna be outta biz in no time, your farm Repoed and on your way to California to pick the Grapes of Wrath with the rest of your Okie buddies.

Your problem here is, you don’t have MONEY to buy one of these fancy new Tractors. No problem here of course, the Kindly Banksters who financed the Tractor Factory will ALSO finance you to buy one of these Tractors! POOF, lots of New Money is floating around here because massive loans have been made to Industry to gear up, and massive loans are made in aggregate to J6P to buy the products of that industry.

This seems GREAT at the beginning, but the problem here is that it cost a shit load of this new Money to build the Tractor and Car Factories, but unless they KEEP selling more of these cool inventions they won’t be able to pay off the 30 year Mortgage they took out to set the factory up.

Because the Production Line Henry Ford set up so efficiently produces GOBS of these new Carz and Tractorz, the market gets saturated pretty quickly. Everybody with a decent Credit rating buys the first ones off the line. These things are OVERBUILT for the most part and will last for YEARS, even Decades if well maintained. At the beginning also, they are simple enough in their design and construction that a handy sort of fellow can do all the maintenance on them himself. A decade down the line, you have all the guys you originally sold Carz and Tractorz to STILL using them! You can’t sell them a New One unless you make some truly revolutionary change that makes a new one way more efficient and better than the old one. Even then, unless the old one breaks down, its a pretty hard sell.

So at this point a few strategies are undertaken to keep selling Tractorz and Carz. First off you get your R&D departments where they do make some real improvements for a while, but these generally hit a plateau. Next you hit on Fashion and Comfort ad promote with Advertising. The NEW Carz/Tractorz have more comfortable seats and real SLEEK Lines. If you have the NEWEST John Deere Tractor, out there in the Corn Field it looks like something out of a Jules Verne Novel! Its a Farmer’s Rocket Ship! Farmer’s unlike Car Buyers though generally aren’t suckered by this stuff, if their Combine works, it works. It doesn’t need to look good, rust is OK if it is still working.

In the final stage, Planned Obsolescence and making the stuff so complicated nobody can fix it (not even “professionals”) means every one of these Big Ticket items which you take a 10 year Loan out on to buy generally only lasts 7 or 8 before you need to buy a New One.

If John Deere or any other manufacturer of Industrial Goods really sets themselves toward producing durable goods that last longer than the typical debt cycle of 10-30 years, they will put themselves out of Bizness in no time. The only way to KEEP SELLING is to keep expanding into New Markets and offering more Vendor Financig to each new market to buy your stuff. Which of course is what they kept on doing right up until they saturated the whole Global Market with the stuff and there actually are probably more perfectly serviceable engines and other parts sitting in Junkyards than there are new ones beig produced in China.

As the whole economy of selling this stuff slows down, Da Goobermint tries strategies like Cash for Clunkers to ENCOURAGE people to trash their old and still serviceable Carz for new even less durable Volts, which is gonna need a new Battery Pack probably in 5 years or less. A few people buy into this idea, but overall the number of people with a viable Credit rating to offer them Credit to buy a new Chevy Volt isn’t enough to justify the Production Line, and these folks keep driving their 20 year old Mazda MPVs.

Transfer this whole idea from this side of the Pond over to Krautland and it’s Client states of the PIIGS. Every time I read one of the MANY articles where Krauts are lauded as beig so “Industrious” and their client state Citizens “Lazy”, as was the case in a recent Der Spiegel Op-Ed, I want to Heave the Technicolor Yawn. The imbalance here has little to do with inherent qualities of “Industriousness” in Krauts and “Laziness” in Wops. The imbalance comes from roughly 70 years of Vendor Financing done by the Krauts to sell their Mercedes and BMWs to the rest of the Eurotrash in the aftermath of WWII. The Marshall Plan neatly rebuilt Kraut Industry at little cost to the Krauts, and then they proceeded to lever up on that by selling their Industrial Goods to all their neighbors. Kraut Banks made Big Profits and so did Kraut Industry. The Krauts REALLY got going well once they sold the Euro Currecy to their client states also, now they had a captive market that all had to use the Money they created through Loans. Sound Familiar? It is precisely what the Rockefellers did early on with the Dollar to sell their Oil to a captive market.

Which brings us back around here now to the original thesis of this argument, which is that you cannot get Outrageously Rich in a Conservation based economy. See , early on here John D. Rockefeller gained Monopoly over just about all Oil production and Distribution in the FSofA, but unless he could get everyone HOOKED on Oil and wanting to buy it from him using Debt Money he himself also created, he doesn’t get Richer that God. He has control over/owns all the Oil in the World, but if people don’t use it, waste it etc, it just sits in the ground and he doesn’t get RtG.

The way in which the .01% really got RtG here was through Commerce, and conserving the Energy or producing really Durable goods does not do that. The faster they get people to Consume it; the shorter the lifespan of anything you buy is; the richer they get. Since they control the Resources, the Monetary system AND the Political system, you got no choice in this, you get the Industrial culture they build to make themselves RtG.

The problem faced by these folks now is that basically they have nothing left to sell at a price anybody can afford to buy, even if somebody would Vendor Finance the buyers and nobody will now. All the OLD loans are already going south here and the Oil has become too scarce and valuable to offer up at Low, Low Prices Every Day on the Walmart shelves. Because of course that is what everything Walmart is selling really IS, it is all just OIL, transmuted into various Konsumer goods and Food, but still Oil in the end here.

So, the Monetary system being run is collapsing on itself as we speak, but the Power Structures developed over the Millenia have not yet collapsed. By shoving Austerity on the Debtor countries, the Illuminati continue to sieve the last of the remaining wealth out of all these places. In the end though, all they Repo here is basically worthless flotsam and jetsam of the Age of Oil, and once they can no longer support the Big Ass Military, they will be quite done here.

When they are done, it remains incumbent on those who do survive the Zero Point to set up a BETTER system than this, one based not on Consumption of Resource, but of Conservation of it. In such a system, nobody gets Richer than God, but its the only way for Homo Sapiens to continue onward with the Great Experiment of Human Sentience. In time, I believe we will achieve this goal, but not without much Pain and much Death in the intervening period. Through this time of Great Dieing, I remain convinced the only way to insure a Clean Kitchen in the aftermath is to make sure the Vermin are Extermintated FIRST here.

Bring on the Orkin Man.


Of God, Peak Oil and Turkeys…

Of God, Peak Oil and Turkeys …

Posted on Economic Undertow on March 12, 2012 by steve from virginia

Climate change- and Peak Oil deniers are like turkeys who gather in a corner of the farm convincing each other and the other turkeys that this mysterious circumstance called ‘Thanksgiving’ is a fraud. According to rumors that flare up like wildfires through the community then evaporate just as quickly, when this ‘giving of thanks’ event draws near The Great God stuffs the turkeys in a truck (whatever that is), takes them somewhere then has them all put to death! Turkey corpses are then wrapped in plastic (whatever that is) and shipped to supermarkets (whatever these might be). The rumors are highly disturbing to the turkeys even as some of the more perceptive among them notice that turkeys who leave the community never return.

“Pay no attention,” cry the deniers. “This obviously cannot be so: God is the turkeys’ best friend. Every day he brings more and more delicious food, as much as the turkeys can eat. The more food we eat the more we have available to eat. All this food and much more has been provided by God for as long as us turkeys can remember.”

“Certain as one day follows the next, this incredible bounty will go on forever. We dare not change anything or leave. To do so would have us … living like savages in caves!”

“Where are the old turkeys?” asks a thoughtful, young turkey. Where are they indeed: there are old turkeys and bold turkeys but no old, bold turkeys. Recently the climate denying-gobblers had a chance to see that the turkey-god is a farmer with an ax and a calculating mind. This came in the form of Senate testimony from the insurance industry.

It’s one thing for the pimply-faced teenaged brigade of energy company shills/morons to scorn scientists and for middle-American turkeys to believe them. It’s another thing altogether for the shills to smear the insurance industry. The warming-related disasters are costing the top insurance gangsters real money, these costs ricochet through related real estate and finance rackets:


Climate Change: Insurers Confirm Growing Risks, Costs

Stakeholders from the insurance industry met with members of the U.S. Senate to acknowledge the role global warming plays in extreme weather-related losses, and to issue a call for action.

Pat Speer

The politics of global warming have typically involved much debate as to the role climate change plays in growing weather-related risk.  Yesterday, however, at a Capital Hill a press conference on the cost of climate change, debate was not on the agenda. Pointing to a year of history-making, $1 billion-plus natural disasters, representatives of Tier 1 insurance companies took a definitive stance with members of the U.S. Senate to confirm that costs to taxpayers and businesses from extreme weather will continue to soar because of climate change.

Representatives from The Reinsurance Association of America, Swiss Re and Willis Re and Ceres, a nonprofit organization that leads a national coalition of investors, environmental organizations and other public interest groups working with companies to address a variety of sustainability challenges, joined Sens. Bernie Sanders (I-Vt.) and Sheldon Whitehouse (D-R.I.) yesterday to discuss the growing financial impact of global warming.


Reality about energy supplies begins to emerge and it’s as ugly for ‘Autoworld’ as Thanksgiving is for turkeys. Peak Oil has blitzed the Greek economy into the dumpster with stunning dispatch, so much so it seems beyond the ability of sensible Greeks to understand what happened to them. Greece isn’t a hedge fund or an over-leveraged investment bank peddling fubar MBS out of a back room but a modern, middle-class nation with a (semi)functioning government and a four-thousand year history: all that except for the history is gone … in a heartbeat. Fall asleep in Greece, wake up in Angola.

During the period of the Asian credit contraction or the Argentina default and crisis Latin America that took place during the late 1990s there were exceptions to malaise. The industrialized economies such as Japan and the US performed well. In 2012, the economy of entire world finds itself stuffed into the back of the truck heading for the freezer.

It really is different this time!

Forget the turkey gobble about ‘Peak oil in 2035′ or ‘energy self-sufficiency’. Without drastic change in attitude, the world is never going to get to 2015 in one piece. From an energy standpoint there is no difference between Germany and Greece … or Japan! Berlin (Tokyo) must sell cars to millions of turkeys or the lights go out. Peak oil drives a stake through the heart of the auto-sexy sales pitch. What happens next? Both Japan and Germany have carefully constructed the model post-modern energy-arbitrage value-added economy: Peak Oil destroys it. What rampages through Greece is getting ready to cum inside quivering Germany, possibly within months.

Ominously, fuel prices are rising to record levels even as the world slips into recession. This is a slowdown in credit expansion, without credit there are few funds available ‘on the sidelines’ to push up crude prices. What this means is that any spare change on the sideline is being burned up for nothing right now.

There are output declines in the UK, outliers in once-booming China, ongoing deflation as well as a new trade deficit in Japan, slowdowns in the countries which have depended on commodities sales to China and India: the EU is collapsing and the US is pincered between the need for more easing to keep debt costs under control and the steadily rising fuel prices amplified by more easing:

Figure 1: here is your Gasbuddy gift, red spreads across the US in the form of plus-four dollar gas prices. What sort of turkey will Gasbuddy bring in the future? Plus-five dollar gas or declining prices and faster declining ability to pay? Best to bet on declining employment and more poverty.


BRENT CRUDE FUTR  (USD/bbl.) 125.520 0.180 0.14% 20:00
GAS OIL FUT (ICE) (USD/MT) 1,030.000 1.750 0.17% 20:00
HEATING OIL FUTR  (USd/gal.) 325.400 1.110 0.34% 20:01
NATURAL GAS FUTR  (USD/MMBtu) 2.263 -0.006 -0.26% 19:58
GASOLINE RBOB FUT (USd/gal.) 333.630 1.330 0.40% 20:01
WTI CRUDE FUTURE  (USD/bbl.) 106.640 0.300 0.28% 20:00

Table from Bloomberg has Brent crude at a economy-crushing $125./barrel. The economic infrastructure has been built around an assumed $20./barrel forever. Crude costing more than $40 per barrel or so strands the entire fuel-wasting enterprise, this includes China. Meanwhile, the high fuel prices represent/require massively expanded credit. The reason for the credit in the first place was because there wasn’t enough cheap crude to satisfy all demand starting ten years ago! Credit access became a substitute for fuel and a way to ration it at the same time.

So far the current mini-spike hasn’t been able to push past last April’s high of $128./barrel for Brent. If the $128 level holds it indicates the world is too broke to afford higher prices. Prices pushing above that level indicate the turkeys’ best chances of buying their way past the consequences of their own waste are being hurled into the fire.

Greece’s oil problems were examined last June:



Figure 2: this chart is from Jonathan Callahan’s Energy Export Databrowser.Greece does not produce any petroleum energy to speak of: a few thousand barrels per day from offshore fields. It has to import fuel from overseas, mostly from Middle East producers such as Iran. Where does Greece get the hard currency to swap for petroleum overseas?From an energy standpoint Greece is insolvent. It once borrowed — euros — from banks to buy fuel. Now it has to borrow from new banks to pay off the old banks AND to buy the fuel. Greece is on the road to oblivion. It buys less fuel even as it falls further into debt. Without some drastic change Greece will not only default but collapse.Like the other countries, Greece obviously failed to earn enough from using the fuel to pay its energy bill otherwise it would not be insolvent.


Last Summer was really the EU’s last chance to put its energy house in order and get serious about conservation. It is too late when economies are stripped out there are no funds with which to ‘buy’ the saved btu’s. Greece from the ground:


“A harder Default To Come”

Wolf Richter

“We owed it to our children and grandchildren to rid them of the burden of this debt,” said Greek Finance Minister Evangelos Venizelos about the bond swap that had just whacked private sector investors with a 72% loss. While everyone other than the bondholders was applauding, the drumbeat of Greece’s economic horror show continued in its relentless manner.

In central Athens, a stunning 29.6% of the businesses ceased operations, up from 24.4% in August; in Piraeus 27.3%, a 10-point jump since March. The whole Attica region lost 25.6% of its businesses. “This worsening of the survival index in the commercial sector … shows that resistance is waning,” said Vasilis Korkidis, president of the National Confederation of Hellenic Commerce. “We must continue the battle of daily survival and keep our shops open,” he pleaded—while fourth quarter GDP was being revised down to -7.5% on an annual basis. The Greek economy has shrunk about 20% since 2008.

Unemployment is veering toward disaster. The overall rate of 21% in December, announced Thursday, was horrid enough, but youth unemployment rose to a shocking 51.1%, double the rate before the crisis. A record 1,033,507 people were unemployed, up 41% over prior year. Only 3,899,319 people had jobs—a mere 36.1% of a total population of 10.8 million!

No economy can service a gargantuan—and rapidly growing—mountain of debt when only 36.1% of its people contribute (by comparison, the US employment population ratio is 58.6%, down from 64.7% in 2000). Hence, another bout of red ink. The “cash deficit” at the end of 2011 hit €24.9 billion, 11.5% of GDP, far above the general budget deficit. Government-owned enterprises, such as the public healthcare sector, couldn’t pay their bills. Total owed their suppliers: €5.73 billion.


What a horror show! Richter doesn’t mention that the only way for Greece to escape its straitjacket is to either borrow more and roll over debt or to repudiate it. There is no way for Greece — or Germany — to repay Greece’s finance debts even if 100% of its citizens hold jobs. The debts are simply too enormous.


Greece Undergoes An Energy Cramdown.


Greece’s GDP has declined right along with energy consumption. This is no accident or coincidence. The fairy-tale increase in GDP that everyone loved so much was powered by credit expansion which leaked into fuel bourses. Credit enabled the virtuous cycle of bull markets and ever-rising asset prices. Customers could meet the cost of expensive fuel (and everything else) by taking on more debt. At the same time credit expanded — as it must — so that internal costs of that credit could be managed.

The problem is that expensive fuel is that it returns the same ‘nothing’ by its use as does the cheap stuff! $20 fuel is a bagatelle to waste, it subsidizes the $50,000 automobile and the $500,000 tract house. $125 per barrel crude oil is burning a Jackson Pollock in the fireplace. The mindless waste on a planet-wide scale digs a bottomless pit that economies are unable to climb out of. The automobiles and tract houses cease to be assets but become liabilities instead: ‘Welcome to Greece’.

Here is what the world’s economists ignore: that our Number One Investment for the past two-hundred years has been non-remunerative waste, paid for with an ‘asset’ that mandates its own ceaseless and perpetual increase. The beneficiaries of this waste have been a handful of very special turkeys. Like them, the economists insist that the waste is ‘productive’ and ‘progress’: that the wasting process is so fundamental to our way of life as to defy scrutiny.

Just like the turkey farmer, credit has been our best friend, the ready enabler of all our wants. The Credit God stuffed us with everything our hearts and stomachs desired, even as these became perverse then self-destructive. Waste for its own sake was elevated to a virtue, it became the basis of our economies.

With supply constrained relative to increasing worldwide demand, fuel costs rise until something important breaks, in 2008 it was the securitization industry and shadow banking, now looks to be repos and sovereign credit. The costs of fuel plus the debt needed to bid for it are breaking costs, countries can no longer borrow. Without credit there are vanishing chances of expanding GDP or to roll-over maturing debt … or to import fuel.

Here is the EU gas buddy (HT Zero Hedge):



Figure 3: Adding insult to injury: gasoline in Greece costs about $8.75 per US gallon, on the way to $50 per US gallon by way of black market profiteering and diminishing fuel supply. In the future, if Greeks want gas they will have to sell their children in order to afford it.

– Europe must borrow in order to obtain fuel even as the continent’s defective borrowing structure breaks down.

– The mercantile states such as Germany have been able to borrow against the accounts of their EU trading partners but now these partners are bankrupt. Unsurprisingly, the German economy is starting to contract.

– Europeans afford high priced fuel by cutting back on car purchases.

– Europe’s liabilities in euros are expanding dramatically along with the euro ‘rescues’ and bank bailouts. Germany has little choice but to exit the euro to escape mounting peripheral liabilities. Defending the euro would be suicide for Germany as would abandoning it: Germany chooses its poison.

– Euro-finance is a Ponzi-scheme, he who exits first escapes with something, the rest hold the bag. UK has exited the euro-concordat already, Spain looks to exit along with the Netherlands, France will exit after Sarkozy is ousted from his presidency. Germany cannot carry the bailout costs these other countries represent. As EU countries exit or default Germany will ditch the euro for the D-mark.

Germany is partially responsible for the multi-trillion euro ECB balance sheet. The collateral held by the ECB for its LTRO is deteriorating: there are margin calls. The central bank’s balance sheet is becoming largely unsecured debt. Germany encounters the First Law of Economics: the cost of managing surpluses becomes greater than the surpluses are worth. Selling all those cars turns out to be more than a dead loss.

Germany has been running persistent current account surpluses with the peripheral states since the introduction of the euro (click on for big).



Figure 4: Europeans have bankrupted themselves with their automobiles. Current accounts don’t lie, the credit imbalances are vendor financing within a fixed exchange rate regime, all for the benefit of German industrial firms. As European managers remain silent about the need to conserve energy, energy conservation as a natural consequence of credit breakdown is scything through the turkeys.

It is astounding that the Europeans would throw Greece into the pit, it is certain that they did not mean to do so, circumstances forced them to it. Too bad nobody is willing to face reality and throw the automobiles into the pit, instead.

Next goes Europe, itself. The Greek default closes the book on Europe in its current form, which is a lost cause. It is the end of the beginning: there is not going to be any ‘recovery’ or way back from the abyss that is now engulfing the continent. Some fragments here and there might save themselves for a little while, then like sparks from a bonfire be swept away by the wind. The crisis must now burn itself out: Europeans, look to yourselves and may your turkey-credit-God have mercy on your souls.

Knarf plays the Doomer Blues

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