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Will Russia’s Response to Washington’s Aggression Be to Release Black Swans?

Paul Craig Roberts - 7 hours 15 min ago

Will Russia’s Response to Washington’s Aggression Be to Release Black Swans?

King World News Interviews Paul Craig Roberts

http://kingworldnews.com/dr-paul-craig-roberts-12-20-14/

The post Will Russia’s Response to Washington’s Aggression Be to Release Black Swans? appeared first on PaulCraigRoberts.org.

Putin Is Right

LewRockwell.com - 14 hours 44 min ago

Global forecaster Gerald Celente said Russian President Vladimir Putin was right when he stated today that the West targeted Russia long before the current crisis with Ukraine. In fact, Celente reported almost a year ago that the U.S. had waged a propaganda and misinformation war against Russia.

Putin insisted today: “It’s not payback for Crimea. It’s the cost of our natural desire to preserve Russia as a nation, a civilization and a state.”

Celente agrees. He points to an extensive analysis in the Spring 2014 edition of his Trends Journal,”Stoking a war that can’t be won,” in which he wrote:

“Under the Obama Administration, U.S. conflict with Vladimir Putin’s Russia was part of a trend …”

Putin today also referenced the distorted, damaging way in which Western media covered the Olympic Games in Sochi last winter. Here, too, Celente agrees. Last spring, he wrote:

“Not willing to let an atrocity go to waste, on 29 December 2013, following a terrorist bombing in a train station in Volgograd, a Russian city several hundred miles from where the Sochi 2014 Olympics were to be hosted, headlines across America blared: ‘Terror Attacks Hit Russia Leading Into 2014 Winter Olympics.’ Week after week, leading up to the February games, government officials, ‘credible sources,’ and ‘intelligence experts’ warned Americans that travelling to Sochi was risky. From toothpaste bombs and shoe bombs to black widow bombers, the message was clear.”

And that message was fear. Never mind that none of those predictions came true, said Celente, because they were contrived as part of a larger campaign.

As he wrote in the Spring 2014 Trends Journal: “The fear campaign worked. Just days before the opening ceremony, a February 5 CNN poll showed that 57 percent of Americans believed terror would strike during the Sochi Games.”

Putin’s comments today are not empty, defensive remarks, said Celente. Taking a step back and looking at the larger picture, independent of the force-fed propaganda gushing out at the time, shows an orchestrated effort by the U.S. and its allies to diminish Russia’s standing in the world, he said. The Trends Research Institute concluded a year ago what Putin affirmed today: The crisis in Ukraine was created by the West. It was, indeed, a “virtual” Berlin Wall around Russia.

What’s the Big Deal?

LewRockwell.com - 14 hours 45 min ago

Recent polls show that, despite the Senate’s torture report, most Americans still support the Central Intelligence Agency’s use of torture on suspects. Obviously the mainstream media misinform the public, neglecting to tell them that such torture techniques do not even produce reliable information and are mainly used to extract false confessions from innocent detainees.

And on the National Security Agency’s spying on innocent Americans, people love it, and then they hate it, and now they’re back to loving it again. Alas, Most people are ignorant of the actual criminality being committed by the federal goons.

But one American who shows enthusiastic support for NSA intrusions, a Federal Appeals Court judge, says that privacy is “overvalued,” and that “much of what passes for the name of privacy is really just trying to conceal the disreputable parts of your conduct.” If some unauthorized individual intruded into his cell phone, one would find a picture of the judge’s cat and some emails.

“What’s the big deal?” Judge Richard Posner asked, contemptuously wisecracking, “Other people must have really exciting stuff. Do they narrate their adulteries, or something like that?”

So, yeah, he’s all for NSA spying on innocent people without any reason to suspect them of anything.

He is one of those, “well, if you have nothing to hide. . .” kinds of judges, so people should just let government goons have complete access into all their personal information. After all, it’s in the name of “security” and to protect us from “terrorism.”

Never mind the fact that the government and its enforcers having the power to search people’s cell phones, get information on their calls and emails or search their cars and homes is a power which makes the people less secure. And that is the kind of power which enables government tyrants to terrorize the people, as Michael Rozeff correctly noted.

But the obedient defenders of the State and its sick criminality seem to assume that the NSA and other State enterprises such as CIA,TSA, etc., really are protecting people from terrorism.

Like DC District Court Judge Rosemary Collyer, who rules based on not wanting to “second-guess” the CIA and its authoritarian judgments, Judge Posner believes that we needn’t second-guess the NSA, as its agents’ authority and judgment ought not be questioned.

So, what kinds of security-protecting deeds have the good folks at the NSA actually been doing that we shouldn’t be concerned about? Well, according to Glenn Greenwald, we know that the GCHQ (Britain’s NSA equivalent) presented the NSA with classified documents on GCHQ’s own sleazy tactics of posting false material on the Internet to destroy reputations and turn people against one another. And GCHQ’s main targets are not even alleged “terrorists” but private companies just doing business, and political activists.

That sure sounds like they are protecting us from terrorism, if you ask me.

And, according to James Ball of the U.K. Guardian, we know that NSA and GCHQ have been infiltrating online gaming networks such as Xbox Live and World of Warcraft to collect gamers’ buddylists, profile photos, geolocation information and chats. But Ball notes that there is no evidence that such gaming network infiltration has thwarted any terrorism plots or even that members of any terror groups actually use these kinds of gaming networks.

A main purpose of such warrantless Internet intrusions is to put together biometric information of gamers and others. Governments just love to have as much information on each individual as possible such as biometric information that includes facial recognition photos, location, personal associations, etc., despite the overwhelming number of false positive matches and incorrect facial recognition results those databases give officials. Such databases of personally identifying information are just as unreliable as fingerprint databases and DNA testing as well.

But Judge Posner says, “What’s the big deal?”

And according to Glenn Greenwald, the NSA uses a tool called XKeyscore to collect “nearly everything a user does on the Internet.” With XKeyscore all the NSA agent needs is a user’s email address or IP address, and is only required to fill out a form giving some general rationalization for such criminal intrusions that don’t even require a warrant. Greenwald notes that NSA agents “can also search by name, telephone number, IP address, keywords, the language in which the internet activity was conducted or the type of browser used.”

Obviously, Judge Posner is very comfortable with all this. He isn’t exactly doing a Danny Thomas spit-take when hearing about all this stuff. What could possibly go wrong? And there are many other Americans who don’t mind their personal lives being an open book for the government, despite so much potential for abuse, such as blackmail.

But the truth is, only the most naive and gullible could endorse such powers of intrusion wielded by the State. (Or someone who has been blackmailed, of course.)

As the ACLU has pointed out, J. Edgar Hoover and his FBI and the Chicago Police Department used private, personal information to intentionally blackmail politicians and members of religious and political organizations. I’m sure other law enforcement agencies and bureaus have been doing exactly that since the days of J. Edgar Hoover and 1970s Chicago Mayor Richard J. Daley.

From an interview with Peter B. Collins, Washington’s Blog quotes NSA whistleblower Russell Tice, stating that the NSA has been spying on and targeting “high-ranking military officers; they went after members of Congress … lawyers and law firms. All kinds of–heaps of lawyers and law firms. They went after judges. One of the judges is now sitting on the Supreme Court that I had his wiretap information in my hand. Two are former FISA court judges. They went after State Department officials. They went after people in the executive service that were part of the White House …”

And Washington’s Blog also quotes other government whistleblowers such as William Binney, Sibel Edmonds and Thomas Drake as to the various blackmail schemes of these criminal government spy agencies.

The NSA, FBI, CIA – the agents of all these bureaucracies take oaths and swear to obey the U.S. Constitution, which includes the Bill of Rights, yet they seem to violate such oaths every chance they can. (Oh, wait – CIA Director John Brennan took his oath of office using an early draft Constitution, without the Bill of Rights included. Never mind, as Emily Litella would say.)

But there are some CIA or NSA employees who really do believe in upholding their Constitutional oaths. Former CIA officer and torture whistleblower John Kiriakou is the only CIA officer in prison – not because of torturing people, but because of revealing information about the CIA’s torture.

But Kiriakou in an interview asserted that the CIA clearly didn’t care about his possibly revealing classified information, as they encouraged him to write op-eds and do interviews as a way to use such communications against him even though information he gave was cleared through the agency.

Kriakou concluded throughout his ordeal that “everyone is corrupt” in that agency. Or most everyone, that is. And the same thing is probably the case in all these other criminal agencies, NSA and so on.

I just can’t imagine anyone with a moral conscience actually inflicting the kinds of sick, deranged and sadistic torment on others as CIA agents have committed.

And I can’t imagine anyone, such as NSA personnel, with any moral conscience actually listening in on people, recording or videotaping them, breaking into their emails of phone calls or their cars or bedrooms without any suspicion, and “digging up some dirt” to use against innocent people including judges and military generals.

But “if you have nothing to hide …” as some judges have asserted, you should be okay with goons watching you and recording your actions. Alas, those who guard themselves against criminal intrusions and attempt to protect their private lives are labeled as “suspicious” in the eyes of the State and its statist defenders, toadies and dupes.

Sadly, “those who resist being inventoried present a problem for the state,” as Wendy McElroy observed.

Yes, honest and moral people are a problem for the State.

As McElroy points out, there should be one standard of morality. If it’s wrong for your neighbors to dig into your private life, it’s wrong for government agents.

To cure the problem, NSA whistleblower William Binney and several other well-intentioned government whistleblowers have presented 21 recommendations toward reforming the NSA. But the truth is, it is impossible to reform an agency that is part of a monopolistic governmental “security” apparatus, unless it is de-monopolized and we remove restrictions on free competition.

In any case, Future of Freedom Foundation President Jacob Hornberger has the best solution I’ve ever heard: Abolish the NSA.

And the CIA has outlived whatever usefulness it may have had after World War II, so we should get rid of that, too.

In fact, as Hornberger has suggested, it really is the entire evil National Security State that has long ago outlived whatever usefulness it may have had after World War II. So the real solution to restoring freedom and security is to thoroughly dismantle the entire National Security State apparatus, root and branch.

The Menace of Egalitarianism

LewRockwell.com - 14 hours 45 min ago

[This article is excerpted from the title essay and the introduction to the first edition of Egalitarianism as a Revolt Against Nature and Other Essays.]

This essay was delivered at a conference on human differentiation held by the Institute for Humane Studies at Gstaad, Switzerland, in the summer of 1972. A fundamental reason and grounding for liberty are the ineluctable facts of human biology; in particular, the fact that each individual is a unique person, in many ways different from all others. If individual diversity were not the universal rule, then the argument for liberty would be weak indeed. For if individuals were as interchangeable as ants, why should anyone worry about maximizing the opportunity for every person to develop his mind and his faculties and his personality to the fullest extent possible? The essay locates the prime horror of socialism as the egalitarian attempt to stamp out diversity among individuals and groups. In short, it reflects the grounding of libertarianism in individualism and individual diversity.

Murray N. Rothbard 1974

Egalitarianism as a Revolt Against Nature

For well over a century, the Left has generally been conceded to have morality, justice, and “idealism” on its side; the conservative opposition to the Left has largely been confined to the “impracticality” of its ideals. A common view, for example, is that socialism is splendid “in theory,” but that it cannot “work” in practical life. What the conservatives failed to see is that while short-run gains can indeed be made by appealing to the impracticality of radical departures from the status quo, that by conceding the ethical and the “ideal” to the Left they were doomed to long-run defeat. For if one side is granted ethics and the “ideal” from the start, then that side will be able to effect gradual but sure changes in its own direction; and as these changes accumulate, the stigma of “impracticality” becomes less and less directly relevant. The conservative opposition, having staked its all on the seemingly firm ground of the “practical” (that is, the status quo) is doomed to lose as thestatus quo moves further in the left direction. The fact that the unreconstructed Stalinists are universally considered to be the “conservatives” in the Soviet Union is a happy logical joke upon conservatism; for in Russia the unrepentant statists are indeed the repositories of at least a superficial “practicality” and of a clinging to the existing status quo.

Never has the virus of “practicality” been more widespread than in the United States, for Americans consider themselves a “practical” people, and hence, the opposition to the Left, while originally stronger than elsewhere, has been perhaps the least firm at its foundation. It is now the advocates of the free market and the free society who have to meet the common charge of “impracticality.”

In no area has the Left been granted justice and morality as extensively and almost universally as in its espousal of massive equality. It is rare indeed in the United States to find anyone, especially any intellectual, challenging the beauty and goodness of the egalitarian ideal. So committed is everyone to this ideal that “impracticality” — that is, the weakening of economic incentives — has been virtually the only criticism against even the most bizarre egalitarian programs. The inexorable march of egalitarianism is indication enough of the impossibility of avoiding ethical commitments; the fiercely “practical” Americans, in attempting to avoid ethical doctrines, cannot help setting forth such doctrines, but they can now only do so in unconscious, ad hoc, and unsystematic fashion. Keynes’s famous insight that “practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist” — is true all the more of ethical judgments and ethical theory.[1]

The unquestioned ethical status of “equality” may be seen in the common practice of economists. Economists are often caught in a value-judgment bind — eager to make political pronouncements. How can they do so while remaining “scientific” and value free? In the area of egalitarianism, they have been able to make a flat value judgment on behalf of equality with remarkable impunity. Sometimes this judgment has been frankly personal; at other times, the economist has pretended to be the surrogate of “society” in the course of making its value judgment. The result, however, is the same. Consider, for example, the late Henry C. Simons. After properly criticizing various “scientific” arguments for progressive taxation, he came out flatly for progression as follows:

The case for drastic progression in taxation must be rested on the case against inequality — on the ethical or aesthetic judgment that the prevailing distribution of wealth and income reveals a degree (and/or kind) of inequality which is distinctly evil or unlovely.[2]

Another typical tactic may be culled from a standard text on public finance. According to Professor John F. Due,

The strongest argument for progression is the fact that the consensus of opinion in society today regards progression as necessary for equity. This is, in turn, based on the principle that the pattern of income distribution, before taxes, involves excessive inequality.

The latter “can be condemned on the basis of inherent unfairness in terms of the standards accepted by society.”[3]

Whether the economist boldly advances his own value judgments or whether he presumes to reflect the values of “society,” his immunity from criticism has been remarkable nonetheless. While candor in proclaiming one’s values may be admirable, it is surely not enough; in the quest for truth it is scarcely sufficient to proclaim one’s value judgments as if they must be accepted as tablets from above that are not themselves subject to intellectual criticism and evaluation. Is there no requirement that these value judgments be in some sense valid, meaningful, cogent, true?

“It is rare indeed in the United States to find anyone, especially any intellectual, challenging the beauty and goodness of the egalitarian ideal.”

To raise such considerations, of course, is to flout the modern canons of pure wertfreiheit in social science from Max Weber onward, as well as the still older philosophic tradition of the stern separation of “fact and value,” but perhaps it is high time to raise such fundamental questions. Suppose, for example, that Professor Simons’s ethical or aesthetic judgment was not on behalf of equality but of a very different social ideal.

Suppose, for example, he had been in favor of the murder of all short people, of all adults under five feet, six inches in height. And suppose he had then written, “The case for the liquidation of all short people must be rested on the case against the existence of short people — on the ethical or aesthetic judgment that the prevailing number of short adults is distinctly evil or unlovely.” One wonders if the reception accorded to Professor Simons’s remarks by his fellow economists or social scientists would have been quite the same.

Or, we can ponder Professor Due writing similarly on behalf of the “opinion of society today” in the Germany of the 1930s with regard to the social treatment of Jews. The point is that in all these cases the logical status of Simons’s or Due’s remarks would have been precisely the same, even though their reception by the American intellectual community would have been strikingly different.

My point so far has been twofold:

  1. that it is not enough for an intellectual or social scientist to proclaim his value judgments — that these judgments must be rationally defensible and must be demonstrable to be valid, cogent, and correct: in short, that they must no longer be treated as above intellectual criticism; and
  2. that the goal of equality has for too long been treated uncritically and axiomatically as the ethical ideal.

Thus, economists in favor of egalitarian programs have typically counterbalanced their uncriticized “ideal” against possible disincentive effects on economic productivity; but rarely has the ideal itself been questioned.[4]

Let us proceed, then, to a critique of the egalitarian ideal itself — should equality be granted its current status as an unquestioned ethical ideal? In the first place, we must challenge the very idea of a radical separation between something that is “true in theory” but “not valid in practice.” If a theory is correct, then it does work in practice; if it does not work in practice, then it is a bad theory. The common separation between theory and practice is an artificial and fallacious one. But this is true in ethics as well as anything else. If an ethical ideal is inherently “impractical,” that is, if it cannot work in practice, then it is a poor ideal and should be discarded forthwith. To put it more precisely, if an ethical goal violates the nature of man and/or the universe and, therefore, cannot work in practice, then it is a bad ideal and should be dismissed as a goal. If the goal itself violates the nature of man, then it is also a poor idea to work in the direction of that goal.

“The goal of equality has for too long been treated uncritically and axiomatically as the ethical ideal.”

Suppose, for example, that it has come to be adopted as a universal ethical goal that all men be able to fly by flapping their arms. Let us assume that “proflappers” have been generally conceded the beauty and goodness of their goal, but have been criticized as “impractical.” But the result is unending social misery as society tries continually to move in the direction of arm flying, and the preachers of arm flapping make everyone’s lives miserable for being either lax or sinful enough not to live up to the common ideal. The proper critique here is to challenge the “ideal” goal itself; to point out that the goal itself is impossible in view of the physical nature of man and the universe; and, therefore, to free mankind from its enslavement to an inherently impossible and, hence, evil goal.

But this liberation could never occur so long as the anti-arm-fliers continued to be solely in the realm of the “practical” and to concede ethics and “idealism” to the high priests of arm flying. The challenge must take place at the core — at the presumed ethical superiority of a nonsensical goal. The same, I hold, is true of the egalitarian ideal, except that its social consequences are far more pernicious than an endless quest for man’s flying unaided. For the condition of equality would wreak far more damage upon mankind.

What, in fact, is “equality”? The term has been much invoked but little analyzed. A and B are “equal” if they are identical to each other with respect to a given attribute. Thus, if Smith and Jones are both exactly six feet in height, then they may be said to be “equal” in height. If two sticks are identical in length, then their lengths are “equal,” etc. There is one and only one way, then, in which any two people can really be “equal” in the fullest sense: they must be identical in all of their attributes. This means, of course, that equality of all men — the egalitarian ideal — can only be achieved if all men are precisely uniform, precisely identical with respect to all of their attributes. The egalitarian world would necessarily be a world of horror fiction — a world of faceless and identical creatures, devoid of all individuality, variety, or special creativity.

Indeed, it is precisely in horror fiction where the logical implications of an egalitarian world have been fully drawn. Professor Schoeck has resurrected for us the depiction of such a world in the British anti-utopian novelFacial Justice, by L.P. Hartley, in which envy is institutionalized by the State’s making sure that all girls’ faces are equally pretty, with medical operations being performed on both beautiful and ugly girls to bring all of their faces up or down to the general common denominator.[5]

A short story by Kurt Vonnegut provides an even more comprehensive description of a fully egalitarian society. Thus, Vonnegut begins his story, “Harrison Bergeron”:

The year was 2081, and everybody was finally equal. They weren’t only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.

The “handicapping” worked partly as follows:

Hazel had a perfectly average intelligence, which meant she couldn’t think about anything except in short bursts. And George, while his intelligence was way above normal, had a little mental handicap radio in his ear. He was required by law to wear it at all times. It was tuned to a government transmitter. Every twenty seconds or so, the transmitter would send out some sharp noise to keep people like George from taking unfair advantage of their brains.[6]

The horror we all instinctively feel at these stories is the intuitive recognition that men are not uniform, that the species, mankind, is uniquely characterized by a high degree of variety, diversity, differentiation — in short, inequality. An egalitarian society can only hope to achieve its goals by totalitarian methods of coercion; and, even here, we all believe and hope the human spirit of individual man will rise up and thwart any such attempts to achieve an ant-heap world. In short, the portrayal of an egalitarian society is horror fiction because, when the implications of such a world are fully spelled out, we recognize that such a world and such attempts are profoundly antihuman; being antihuman in the deepest sense, the egalitarian goal is, therefore, evil and any attempts in the direction of such a goal must be considered evil as well.

“If a theory is correct, then it does work in practice; if it does not work in practice, then it is a bad theory.”

The great fact of individual difference and variability (that is, inequality) is evident from the long record of human experience; hence, the general recognition of the antihuman nature of a world of coerced uniformity. Socially and economically, this variability manifests itself in the universal division of labor, and in the “Iron Law of Oligarchy” — the insight that, in every organization or activity, a few (generally the most able and/or the most interested) will end up as leaders, with the mass of the membership filling the ranks of the followers. In both cases, the same phenomenon is at work — outstanding success or leadership in any given activity is attained by what Jefferson called a “natural aristocracy” — those who are best attuned to that activity.

The age-old record of inequality seems to indicate that this variability and diversity is rooted in the biological nature of man. But it is precisely such a conclusion about biology and human nature that is the most galling of all possible irritants to our egalitarians. Even egalitarians would be hard put to deny the historical record, but their answer is that “culture” has been to blame; and since they obviously hold that culture is a pure act of the will, then the goal of changing the culture and inculcating society with equality seems to be attainable. In this area, the egalitarians slough off any pretense to scientific caution; they are scarcely content with acknowledging biology and culture as mutually interacting influences. Biology must be read out of court quickly and totally.

Let us ponder an example that is deliberately semifrivolous. Suppose that we observe our culture and find a common dictum to be, ”Redheads are excitable.” Here is a judgment of inequality, a conclusion that redheads as a group tend to differ from the nonredhead population. Suppose, then, that egalitarian sociologists investigate the problem, and they find that redheads do, indeed, tend to be more excitable than nonredheads by a statistically significant amount. Instead of admitting the possibility of some sort of biological difference, the egalitarian will quickly add that the “culture” is responsible for the phenomenon: the generally accepted “stereotype” that redheads are excitable had been instilled into every redheaded child from an early age, and he or she has simply been internalizing these judgments and acting in the way society was expecting him to act. Redheads, in brief, had been “brainwashed” by the predominant nonredhead culture.

While we are not denying the possibility of such a process occurring, this common complaint seems decidedly unlikely on rational analysis. For the egalitarian culture bugaboo implicitly assumes that the “culture” arrives and accumulates haphazardly, with no reference to social facts. The idea that “redheads are excitable” did not originate out of the thin air or as a divine commandment; how, then, did the idea come into being and gain general currency?

One favorite egalitarian device is to attribute all such group-identifying statements to obscure psychological drives. The public had a psychological need to accuse some social group of excitability, and redheads were fastened on as scapegoats. But why were redheads singled out? Why not blonds or brunettes? The horrible suspicion begins to loom that perhaps redheads were singled out because they were and are indeed more excitable and that, therefore, society’s “stereotype” is simply a general insight into the facts of reality. Certainly this explanation accounts for more of the data and the processes at work and is a much simpler explanation besides.

“The egalitarian world would necessarily be a world of horror fiction — a world of faceless and identical creatures, devoid of all individuality, variety, or special creativity.”

Regarded objectively, it seems to be a far more sensible explanation than the idea of the culture as an arbitrary and ad hoc bogeyman. If so, then we might conclude that redheads are biologically more excitable and that propaganda beamed at redheads by egalitarians urging them to be less excitable is an attempt to induce redheads to violate their nature; therefore, it is this latter propaganda that may more accurately be called “brainwashing.”

This is not to say, of course, that society can never make a mistake and that its judgments of group identity are always rooted in fact. But it seems to me that the burden of proof is far more on the egalitarians than on their supposedly “unenlightened” opponents.

Since egalitarians begin with the a priori axiom that all people, and hence all groups of peoples, are uniform and equal, it then follows for them that any and all group differences in status, prestige, or authority in societymust be the result of unjust “oppression” and irrational “discrimination.” Statistical proof of the “oppression” of redheads would proceed in a manner all too familiar in American political life; it might be shown, for example, that the median redhead income is lower than nonredheaded income, and further that the proportion of redheaded business executives, university professors, or congressmen is below their quotal representation in the population.

The most recent and conspicuous manifestation of this sort of quotal thinking was in the McGovern movement at the 1972 Democratic Convention. A few groups are singled out as having been “oppressed” by virtue of delegates to previous conventions falling below their quotal proportion of the population as a whole. In particular, women, youth, blacks, Chicanos (or the so-called Third World) were designated as having been oppressed; as a result, the Democratic Party, under the guidance of egalitarian-quota thinking, overrode the choices of the voters in order to compel their due quotal representation of these particular groups.

In some cases, the badge of “oppression” was an almost ludicrous construction. That youths of 18 to 25 years of age had been “underrepresented” could easily have been placed in proper perspective by a reductio ad absurdum, surely some impassioned McGovernite reformer could have risen to point out the grievous “underrepresentation” of five-year-olds at the convention and to urge that the five-year-old bloc receive its immediate due. It is only commonsense biological and social insight to realize that youths win their way into society through a process of apprenticeship; youths know less and have less experience than mature adults, and so it should be clear why they tend to have less status and authority than their elders. But to accept this would be to cast the egalitarian creed into some substantial doubt; further, it would fly in the face of the youth worship that has long been a grave problem of American culture. And so young people have been duly designated as an “oppressed class,” and the coercing of their population quota is conceived as only just reparation for their previously exploited condition.[7]

“Being antihuman in the deepest sense, the egalitarian goal is, therefore, evil and any attempts in the direction of such a goal must be considered evil as well.”

Women are another recently discovered “oppressed class,” and the fact that political delegates have habitually been far more than 50 percent male is now held to be an evident sign of their oppression. Delegates to political conventions come from the ranks of party activists, and since women have not been nearly as politically active as men, their numbers have understandably been low. But, faced with this argument, the widening forces of “women’s liberation” in America again revert to the talismanic argument about “brainwashing” by our “culture.” For the women’s liberationists can hardly deny the fact that every culture and civilization in history, from the simplest to the most complex, has been dominated by males. (In desperation, the liberationists have lately been countering with fantasies about the mighty Amazonian empire.) Their reply, once again, is that from time immemorial a male-dominated culture has brainwashed oppressed females to confine themselves to nurture, home, and the domestic hearth. The task of the liberationists is to effect a revolution in the female condition by sheer will, by the “raising of consciousness.” If most women continue to cleave to domestic concerns, this only reveals the “false consciousness” that must be extirpated.

Of course, one neglected reply is that if, indeed, men have succeeded in dominating every culture, then this in itself is a demonstration of male “superiority”; for if all genders are equal, how is it that male domination emerged in every case? But apart from this question, biology itself is being angrily denied and cast aside. The cry is that there are no, can be no, must be no biological differences between the sexes; all historical or current differences must be due to cultural brainwashing.

In his brilliant refutation of the women’s liberationist Kate Millett, Irving Howe outlines several important biological differences between the sexes, differences important enough to have lasting social effects. They are

  1. “the distinctive female experience of maternity” including what the anthropologist Malinowski calls an “intimate and integral connection with the child … associated with physiological effects and strong emotions”;
  2. “the hormonic components of our bodies as these vary not only between the sexes but at different ages within the sexes”;
  3. “the varying possibilities for work created by varying amounts of musculature and physical controls”; and
  4. “the psychological consequences of different sexual postures and possibilities,” in particular the “fundamental distinction between the active and passive sexual roles” as biologically determined in men and women respectively.[8]

Howe goes on to cite the admission by Dr. Eleanor Maccoby in her study of female intelligence that

it is quite possible that there are genetic factors that differentiate the two sexes and bear upon their intellectual performance…. For example, there is good reason to believe that boys are innately more aggressive than girls — and I mean aggressive in the broader sense, not just as it implies fighting, but as it implies dominance and initiative as well — and if this quality is one which underlies the later growth of analytic thinking, then boys have an advantage which girls … will find difficult to overcome.

Dr. Maccoby adds that “if you try to divide child training among males and females, we might find out that females need to do it and males don’t.”[9]

The sociologist Arnold W. Green points to the repeated emergence of what the egalitarians denounce as “stereotyped sex roles” even in communities originally dedicated to absolute equality. Thus, he cites the record of the Israeli kibbutzim:

The phenomenon is worldwide: women are concentrated in fields which require, singly or in combination, housewifely skills, patience and routine, manual dexterity, sex appeal, contact with children. The generalization holds for the Israeli kibbutz, with its established ideal of sexual equality. A “regression” to a separation of “women’s work” from “men’s work” occurred in the division of labor, to a state of affairs which parallels that elsewhere. The kibbutz is dominated by males and traditional male attitudes, on balance to the content of both sexes.[10]

Irving Howe unerringly perceives that at the root of the women’s liberation movement is resentment against the very existence of women as a distinctive entity:

For what seems to trouble Miss Millett isn’t merely the injustices women have suffered or the discriminations to which they continue to be subject. What troubles her most of all … is the sheer existence of women. Miss Millett dislikes the psychobiological distinctiveness of women, and she will go no further than to recognize — what choice is there, alas? — the inescapable differences of anatomy. She hates the perverse refusal of most women to recognize the magnitude of their humiliation, the shameful dependence they show in regard to (not very independent) men, the maddening pleasures they even take in cooking dinners for the “master group” and wiping the noses of their snotty brats. Raging against the notion that such roles and attitudes are biologically determined, since the very thought of the biological seems to her a way of forever reducing women to subordinate status, she nevertheless attributes to “culture” so staggering a range of customs, outrages, and evils that this culture comes to seem a force more immovable and ominous than biology itself.[11]

In a perceptive critique of the women’s liberation movement, Joan Didion perceives its root to be a rebellion not only against biology but also against the “very organization of nature” itself:

If the necessity for conventional reproduction of the species seemed unfair to women, then let us transcend, via technology, “the very organization of nature,” the oppression, as Shulamith Firestone saw it, “that goes back through recorded history to the animal kingdom itself.” I accept the Universe, Margaret Fuller had finally allowed: Shulamith Firestone did not.[12]

To which one is tempted to paraphrase Carlyle’s admonition: “Egad, madam, you’d better.”

Another widening rebellion against biological sex norms, as well as against natural diversity, has been the recently growing call for bisexuality by Left intellectuals. The avoidance of “rigid, stereotyped” heterosexuality and the adoption of indiscriminate bisexuality is supposed to expand consciousness, to eliminate “artificial” distinctions between the sexes and to make all persons simply and unisexually “human.”

Once again, brainwashing by a dominant culture (in this case, heterosexual) has supposedly oppressed a homosexual minority and blocked off the uniformity and equality inherent in bisexuality. For then every individual could reach his or her fullest “humanity” in the “polymorphous perversity” so dear to the hearts of such leading New Left social philosophers as Norman O. Brown and Herbert Marcuse.

That biology stands like a rock in the face of egalitarian fantasies has been made increasingly clear in recent years. The researches of biochemist Roger J. Williams have repeatedly emphasized the great range of individual diversity throughout the entire human organism. Thus

Individuals differ from each other even in the minutest details of anatomy and body chemistry and physics; finger and toe prints; microscopic texture of hair; hair pattern on the body, ridges and “moons” on the finger and toenails; thickness of skin, its color, its tendency to blister; distribution of nerve endings on the surface of the body; size and shape of ears, of ear canals, or semi-circular canals; length of fingers; character of brain waves (tiny electrical impulses given off by the brain); exact number of muscles in the body; heart action; strength of blood vessels; blood groups; rate of clotting of blood — and so on almost ad infinitum.

We now know a great deal about how inheritance works and how it is not only possible but certain that every human being possesses by inheritance an exceedingly complex mosaic, composed of thousands of items, which is distinctive for him alone.[13]

The genetic basis for inequality of intelligence has also become increasingly evident, despite the emotional abuse heaped upon such studies by fellow scientists as well as the lay public. Studies of identical twins raised in contrasting environments have been among the ways that this conclusion has been reached; and Professor Richard Herrnstein has recently estimated that 80 percent of the variability in human intelligence is genetic in origin. Herrnstein concludes that any political attempts to provide environmental equality for all citizens will only intensify the degree of socioeconomic differences caused by genetic variability.[14]

“At the heart of the egalitarian Left is the pathological belief that the world is a tabula rasa that can be changed at any moment in any desired direction by the mere exercise of human will.”

The egalitarian revolt against biological reality, as significant as it is, is only a subset of a deeper revolt: against the ontological structure of reality itself, against the “very organization of nature”; against the universe as such. At the heart of the egalitarian Left is the pathological belief that there is no structure of reality; that all the world is a tabula rasa that can be changed at any moment in any desired direction by the mere exercise of human will — in short, that reality can be instantly transformed by the mere wish or whim of human beings. Surely this sort of infantile thinking is at the heart of Herbert Marcuse’s passionate call for the comprehensive negation of the existing structure of reality and for its transformation into what he divines to be its true potential.

Nowhere is the left-wing attack on ontological reality more apparent than in the utopian dreams of what the future socialist society will look like. In the socialist future of Charles Fourier, according to Ludwig von Mises,

all harmful beasts will have disappeared, and in their places will be animals which will assist man in his labors — or even do his work for him. An antibeaver will see to the fishing; an antiwhale will move sailing ships in a calm; an antihippopotamus will tow the river boats. Instead of the lion there will be an antilion, a steed of wonderful swiftness, upon whose back the rider will sit as comfortably as in a well-sprung carriage. “It will be a pleasure to live in a world with such servants.”[15]

Furthermore, according to Fourier, the very oceans would contain lemonade rather than salt water.[16]

Similarly absurd fantasies are at the root of the Marxian utopia of communism. Freed from the supposed confines of specialization and the division of labor (the heart of any production above the most primitive level and hence of any civilized society), each person in the communist utopia would fully develop all of his powers in every direction.[17] As Engels wrote in his Anti-Dühring, communism would give “each individual the opportunity to develop and exercise all his faculties, physical and mental, in all directions.”[18] And Lenin looked forward in 1920 to the “abolition of the division of labor among people … the education, schooling, and training of people with an all-around development and an all-around training, people able to do everything. Communism is marching and must march toward this goal, and will reach it.”[19]

In his trenchant critique of the communist vision, Alexander Gray charges

That each individual should have the opportunity of developing all his faculties, physical and mental, in all directions, is a dream which will cheer the vision only of the simpleminded, oblivious of the restrictions imposed by the narrow limits of human life. For life is a series of acts of choice, and each choice is at the same time a renunciation.

Even the inhabitant of Engels’s future fairyland will have to decide sooner or later whether he wishes to be Archbishop of Canterbury or First Sea Lord, whether he should seek to excel as a violinist or as a pugilist, whether he should elect to know all about Chinese literature or about the hidden pages in the life of a mackerel.[20]

Of course one way to try to resolve this dilemma is to fantasize that the New Communist Man of the future will be a superman, superhuman in his abilities to transcend nature. William Godwin thought that, once private property was abolished, man would become immortal. The Marxist theoretician Karl Kautsky asserted that in the future communist society, “a new type of man will arise … a superman … an exalted man.” And Leon Trotsky prophesied that under communism

man will become incomparably stronger, wiser, finer. His body more harmonious, his movements more rhythmical, his voice more musical…. The human average will rise to the level of an Aristotle, a Goethe, a Marx. Above these other heights new peaks will arise.[21]

We began by considering the common view that the egalitarians, despite a modicum of impracticality, have ethics and moral idealism on their side. We end with the conclusion that egalitarians, however intelligent as individuals, deny the very basis of human intelligence and of human reason: the identification of the ontological structure of reality, of the laws of human nature, and the universe. In so doing, the egalitarians are acting as terribly spoiled children, denying the structure of reality on behalf of the rapid materialization of their own absurd fantasies. Not only spoiled but also highly dangerous; for the power of ideas is such that the egalitarians have a fair chance of destroying the very universe that they wish to deny and transcend, and to bring that universe crashing around all of our ears. Since their methodology and their goals deny the very structure of humanity and of the universe, the egalitarians are profoundly antihuman; and, therefore, their ideology and their activities may be set down as profoundly evil as well. Egalitarians do not have ethics on their side unless one can maintain that the destruction of civilization, and even of the human race itself, may be crowned with the laurel wreath of a high and laudable morality.

Notes

[1] John Maynard Keynes, The General Theory of Employment, Interest, and Money (New York: Harcourt, Brace, 1936), p. 383.

[2] Henry C. Simons, Personal Income Taxation (1938), pp. 18–19, quoted in Walter J. Blum and Harry Kalven, Jr.,The Uneasy Case for Progressive Taxation (Chicago: University of Chicago Press, 1953), p. 72.

[3] John F. Due, Government Finance (Homewood, Ill.: Richard D. Irwin, 1954), pp. 128–29.

[4] Thus:

A third line of objection to progression, and undoubtedly the one which has received the most attention, is that it lessens the economic productivity of the society. Virtually everyone who has advocated progression in an income tax has recognized this as a counterbalancing consideration. (Blum and Kalven, The Uneasy Case for Progressive Taxation, p. 21)

The “ideal” vs. the “practical” once again!

[5] Helmut Schoeck, Envy (New York: Harcourt, Brace, and World, 1970), pp. 149–55.

[6] Kurt Vonnegut, Jr., “Harrison Bergeron,” in Welcome to the Monkey House (New York: Dell, 1970), p. 7.

[7] Egalitarians have, among their other activities, been busily at work “correcting” the English language. The use of the word “girl,” for example, is now held to grievously demean and degrade female youth and to imply their natural subservience to adults. As a result, left egalitarians now refer to girls of virtually any age as “women,” and we may confidently look forward to reading about the activities of “a five-year-old woman.”

[8] Irving Howe, “The Middle-Class Mind of Kate Millett,” Harper’s (December, 1970): 125–26.

[9] Ibid., p. 126.

[10] Arnold W. Green, Sociology (6th ed., New York: McGraw-Hill, 1972), p. 305. Green cites the study by A.I. Rabin, “The Sexes: Ideology and Reality in the Israeli Kibbutz,” in G.H. Seward and R.G. Williamson, eds., Sex Roles in Changing Society (New York: Random House, 1970), pp. 285–307.

[11] Howe, “The Middle-Class Mind of Kate Millett,” p. 124.

[12] Joan Didion, “The Women’s Movement,” New York Times Review of Books (July 30, 1972), p. 1.

[13] Roger J. Williams, Free and Unequal (Austin: University of Texas Press, 1953), pp. 17, 23. See also by Williams Biochemical Individuality (New York: John Wiley, 1963) and You are Extraordinary (New York: Random House, 1967).

[14] Richard Herrnstein, “IQ,” Atlantic Monthly (September, 1971).

[15] Ludwig von Mises, Socialism: An Economic and Sociological Analysis (New Haven, Conn.: Yale University Press, 1951), pp. 163–64.

[16] Ludwig von Mises, Human Action (New Haven, Conn.: Yale University Press, 1949), p. 71. Mises cites the first and fourth volumes of Fourier’s Oeuvres Complètes.

[17] For more on the communist utopia and the division of labor, see Murray N. Rothbard, Freedom, Inequality, Primitivism, and the Division of Labor (chap. 16, present volume).

[18] Quoted in Alexander Gray, The Socialist Tradition (London: Long-mans, Green, 1947), p. 328.

[19] Italics are Lenin’s. V.I. Lenin, Left-Wing Communism: An Infantile Disorder (New York: International Publishers, 1940), p. 34.

[20] Gray, The Socialist Tradition, p. 328.

[21] Quoted in Mises, Socialism: An Economic and Sociological Analysis, p. 164.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

Report Police Abuse Without Fear

LewRockwell.com - 14 hours 45 min ago

This article by originally appeared April 5, 2012 in Reason.com. It’s been updated to include new information regarding recent rulings in favor of citizens’ right to record.

Last week the City of Boston agreed to pay Simon Glik $170,000 in damages and legal fees to settle a civil rights lawsuit stemming from his 2007 felony arrest for videotaping police roughing up a suspect. Prior to the settlement, the First Circuit Court of Appeals unanimously ruled that Glik had a “constitutionally protected right to videotape police carrying out their duties in public.” The Boston Police Department now explicitly instructs its officers not to arrest citizens openly recording them in public.

Slowly but surely the courts are recognizing that recording on-duty police is a protected First Amendment activity. But in the meantime, police around the country continue to intimidate and arrest citizens for doing just that. So if you’re an aspiring cop watcher you must be uniquely prepared to deal with hostile cops.

If you choose to record the police you can reduce the risk of terrible legal consequences and video loss by understanding your state’s laws and carefully adhering to the following rules.

Rule #1: Know the Law (Wherever You Are)

Conceived at a time when pocket-sized recording devices were available only to James Bond types, most eavesdropping laws were originally intended to protect people against snoops, spies, and peeping Toms. Now with this technology in the hands of average citizens, police and prosecutors are abusing these outdated laws to punish citizens merely attempting to document on-duty police.

The law in 38 states plainly allows citizens to record police, as long as you don’t physically interfere with their work. Police might still unfairly harass you, detain you, or confiscate your camera. They might even arrest you for some catchall misdemeanor such as obstruction of justice or disorderly conduct. But you will not be charged for illegally recording police.

Twelve states—California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania, and Washington—require the consent of all parties for you to record a conversation. But do not despair if you live in these states: All but 2 —Massachusetts and Illinois—have an “expectation of privacy provision” to their all-party laws that courts have ruled does not apply to on-duty police (or anyone in public). In other words, it’s technically legal in those 48 states to openly record on-duty police.

IMPORTANT UPDATES: As mentioned earlier, the First Circuit Court of Appeals covering Massachusetts declared the state’s ban on recording police to be unconstitutional. In May, The Seventh Circuit Court of Appeals covering Illinois also declared the state’s harsh recording ban unconstitutional, ordering authorities to stop enforcing it. In November, The Supreme Court of the United States rejected Illinois’ petition to appeal the Seventh Circuit Court’s ruling.

Rule #2 Don’t Secretly Record Police

In most states it’s almost always illegal to record a conversation in which you’re not a party and don’t have consent to record. Massachusetts is the only state to uphold a conviction for recording on-duty police, but that conviction was for a secret recording where the defendant failed to inform police he was recording. (As in the Glik case, Massachusetts courts have ruled that openly recording police is legal, but secretly recording them isn’t.)

Fortunately, judges and juries are soundly rejecting these laws. Illinois, the state with the most notorious anti-recording laws in the land, expressly forbids you from recording on-duty police. Early last month an Illinois judge declared that law unconstitutional, ruling in favor of Chris Drew, a Chicago artist charged with felony eavesdropping for secretly recording his own arrest. Last August a jury acquitted Tiawanda Moore of secretly recording two Chicago Police Internal Affairs investigators who encouraged her to drop a sexual harassment complaint against another officer. (A juror described the case to a reporter as “a waste of time.”) In September, an Illinois state judge dropped felony charges against Michael Allison. After running afoul of local zoning ordinances, he faced up to 75 years in prison for secretly recording police and attempting to tape his own trial.

The lesson for you is this: If you want to limit your legal exposure and present a strong legal case, record police openly if possible. But if you videotape on-duty police from a distance, such an announcement might not be possible or appropriate unless police approach you.

Rule #3: Respond to “Shit Cops Say” 

When it comes to police encounters, you don’t get to choose whom you’re dealing with. You might get Officer Friendly, or you might get Officer Psycho. You’ll likely get officers between these extremes. But when you “watch the watchmen,” you must be ready to think on your feet.

In most circumstances, officers will not immediately bull rush you for filming them. But if they aren’t properly trained, they might feel like their authority is being challenged. And all too often police are simply ignorant of the law. Part of your task will be to convince them that you’re not a threat while also standing your ground.

“What are you doing?”

Police aren’t celebrities, so they’re not always used to being photographed in public. So even if you’re recording at a safe distance, they might approach and ask what you are doing. Avoid saying things like “I’m recording you to make sure you’re doing your job right” or “I don’t trust you.”

Instead, say something like “Officer, I’m not interfering. I’m asserting my First Amendment rights. You’re being documented and recorded offsite.”

Saying this while remaining calm and cool will likely put police on their best behavior. They might follow up by asking, “Who do you work for?” You may, for example, tell them you’re an independent filmmaker or a citizen journalist with a popular website/blog/YouTube show. Whatever you say, don’t lie—but don’t let police trick you into thinking that the First Amendment only applies to mainstream media journalists. It doesn’t.

“Let me see your ID.”

In the United States there’s no law requiring you to carry a government ID. But in 24 states police may require you to identify yourself if they have reasonable suspicion that you’re involved in criminal activity.

But how can you tell if an officer asking for ID has reasonable suspicion? Police need reasonable suspicion to detain you, so one way to tell if they have reasonable suspicion is to determine if you’re free to go. You can do this by saying “Officer, are you detaining me, or am I free to go?”

If the officer says you’re free to go or you’re not being detained, it’s your choice whether to stay or go. But if you’re detained, you might say something like, “I’m not required to show you ID, but my name is [your full name].” It’s up to you if you want to provide your address and date of birth if asked for it, but I’d stop short of giving them your Social Security number.

“Please stop recording me. It’s against the law.”

Rarely is it advisable to educate officers about the law. But in a tense recording situation where the law is clearly on your side, it might help your case to politely present your knowledge of state law.

For example, if an insecure cop tries to tell you that you’re violating his civil liberties, you might respond by saying “Officer, with all due respect, state law only requires permission from one party in a conversation. I don’t need your permission to record so long as I’m not interfering with your work.”

If you live in one of the 12 all party record states, you might say something like “Officer, I’m familiar with the law, but the courts have ruled that it doesn’t apply to recording on-duty police.”

If protective service officers harass you while filming on federal property, you may remind them of a recently issued directive informing them that there’s no prohibition against public photography at federal buildings.

“Stand back.”

If you’re approaching the scene of an investigation or an accident, police will likely order you to move back. Depending on the circumstances, you might become involved in an intense negotiation to determine the “appropriate” distance you need to stand back to avoid “interfering” with their work.

If you feel you’re already standing at a reasonable distance, you may say something like, “Officer, I have a right to be here. I’m filming for documentation purposes and not interfering with your work.” It’s then up to you to decide how far back you’re willing to stand to avoid arrest.

Rule #4: Don’t Share Your Video with Police

If you capture video of police misconduct or brutality, but otherwise avoid being identified yourself, you can anonymously upload it to YouTube. This seems to be the safest legal option. For example, a Massachusetts woman who videotaped a cop beating a motorist with a flashlight posted the video to the Internet. Afterwards, one of the cops caught at the scene filed criminal wiretapping charges against her. (As usual, the charges against her were later dropped.)

On the other hand, an anonymous videographer uploaded footage of an NYPD officer body-slamming a man on a bicycle to YouTube. Although the videographer was never revealed, the video went viral. Consequently, the manufactured assault charges against the bicyclist were dropped, the officer was fired, and the bicyclist eventually sued the city and won a $65,000 settlement.

Rule #5: Prepare to be Arrested

Keene, New Hampshire resident Dave Ridley is the avatar of the new breed of journalist/activist/filmmaker testing the limits of the First Amendment right to record police. Over the past few years he’s uploaded the most impressive collection of first-person police encounter videos I’ve ever seen.

Ridley’s calm demeanor and knowledge of the law paid off last August after he was arrested for trespassing at an event featuring Vice President Joe Biden. The arresting officers at his trial claimed he refused to leave when ordered to do so. But the judge acquitted him when his confiscated video proved otherwise.

With respect to the law Ridley declares, “If you’re rolling the camera, be very open and upfront about it. And look at it as a potential act of civil disobedience for which you could go to jail.” It’s indeed disturbing that citizens who are not breaking the law should prepare to be arrested, but in the current legal fog this is sage advice.

“Shut it off, or I’ll arrest you.”

At this point you are risking arrest in order to test the boundaries of free speech. So if police say they’ll arrest you, believe them. You may comply by saying something like “Okay, Officer. But I’m turning the camera off under protest.”

If you keep recording, brace yourself for arrest. Try your best not to drop your camera, but do not physically resist. As with any arrest, you have the right to remain silent until you speak with a lawyer. Use it.

Remember that the camera might still be recording. So keep calm and act like you’re being judged by a jury of millions of your YouTube peers, because one day you might be.

Rule #6: Master Your Technology

A majority of Americans now own a smartphone of some kind. If you’re one of them, you should consider installing a streaming video recording and sharing app such as Qik or Bambuser. Both apps are free and easy to use.

Always Passcode Protect Your Smartphone

The magic of both apps is that they can instantly store your video offsite. This is essential for preserving video in case police illegally destroy or confiscate your camera. But even with these apps installed, you’ll want to make sure that your device is always passcode protected. If a cop snatches your camera, this will make it extremely difficult for her to simply delete your videos. (If a cop tries to trick you into revealing your passcode, never, never, never give it up!)

Keep in mind that Qik and Bambuser’s offsite upload feature might be slow or nonexistent in places without Wi-Fi or a strong 3G/4G signal. Regardless, your captured video will be saved locally on your device until you’ve got a good enough signal to upload offsite.

Set Videos to “Private”

Both apps allow you to set your account to automatically upload videos as “private” (only you can see them) or “public” (everyone can see them). But until police are no longer free toraid the homes of citizens who capture and upload YouTube videos of them going berserk, it’s probably wise to keep your default setting to “private.”

With a little bit of practice you should be able to pull your smartphone from your pocket or purse, turn it on, enter your passcode, open the app, and hit record within 10 seconds. Keep your preferred app easily accessible on your home screen to save precious seconds. But don’t try to shave milliseconds off your time by disabling your passcode.

Both apps share an important feature that allows your video to be saved if your phone is turned off put to sleep—even if you’re still recording. So if you anticipate that a cop is about to grab your phone, quickly tap the power button to put it to sleep. Without your passcode, police won’t be able to delete your videos or personal information even if they confiscate or destroy your phone.

With the iPhone 4 and Samsung Galaxy Android devices I tested, when the phone is put to sleep the Qik app immediately stops recording and uploads the video offsite. But if the phone is put to sleep while Bambuser records, the recording continues after the screen goes black.

This Bambuser “black out” feature is a double-edged sword. While it could easily trick cops into thinking you’re not recording them, using it could push you into more dangerous legal territory. As previously mentioned, courts have shown a willingness to convict citizens for secretly recording police. So if you’re somehow caught using this feature it might be easier for a prosecutor to convince a judge or jury that you’ve broken the law. It’s up to you to decide if the increased legal risk is worth the potential to capture incriminating police footage.

Other Recording Options

Cameras lacking offsite recording capability are a less desirable option. As mentioned earlier, if cops delete or destroy your footage—which happens way too often—you might lose your only hope of challenging their version of events in court. But if you can hold on to your camera, there are some good options.

Carlos Miller is a Miami-based photojournalism activist and writer of the popular Photography is Not a Crime blog. While he carries a professional-end Canon XA10 in the field, he says “I never leave home without a Flip camera on a belt pouch. It’s a very decent camera that’s easier to carry around.”

The top-of-the-line Flip UltraHD starts at $178, but earlier models are available for $60 on Amazon. All flip models have one-button recording, which allows you to pull it out of your pocket and shoot within seconds. The built-in USB then lets you upload video to YouTube or other sharing sites through your PC.

Small businessman and “radical technology” educator Justin Holmes recommends the Canon S-series line of cameras. In 2008, his camera captured a police encounter he had while rollerblading in Port Dickenson, New York. His footage provides an outstanding real-life example of how a calm camera-toting citizen can intelligently flex their rights.

“I typically carry a Canon S5-IS,” Holmes says. “But if I was going to buy one new, I’d go for the SX40-HS. If I were on a budget and buying one used, I’d go for S2-IS or S3-IS.” The features he regards as essential include one-touch video, high-quality stereo condenser microphones, fast zoom during video, and 180×270 variable angle LCD. But the last feature he regards as “absolutely essential.” With it the user can glance at the viewfinder while the camera is below or above eye level.

Rule #7: Don’t Point Your Camera Like a Gun

“When filming police you always want to avoid an aggressive posture,” insists Holmes. To do this he keeps his strap-supported camera close to his body at waist level. This way he can hold a conversation while maintaining eye contact with police, quickly glancing at the viewfinder to make sure he’s getting a good shot.

Obviously, those recording with a smartphone lack this angled viewfinder. But you can get a satisfactory shot while holding your device at waist level, tilting it upward a few degrees. This posture might feel awkward at first, but it’s noticeably less confrontational than holding the camera between you and the officer’s face.

Also try to be in control of your camera before an officer approaches. You want to avoid suddenly grasping for it. If a cop thinks you’re reaching for a gun, you could get shot.

Becoming a Hero

If you’ve recently been arrested or charged with a crime after recording police, contact a lawyer with your state’s ACLU chapter for advice as soon as possible. (Do not publicly upload your video before then.) You may also contact Flex Your Rights via Facebook or Twitter. We’re not a law firm, but we’ll do our best to help you.

If your case is strong, the ACLU might offer to take you on as a litigant. If you accept, your brave stand could forever change the way police treat citizens asserting their First Amendment right to record police. This path is not for fools, and it might disrupt your life. But next time you see police in action, don’t forget that a powerful tool for truth and justice might literally be in your hands.

Reprinted from Flex Your Rights.

Alcohol as Medicine?

LewRockwell.com - 14 hours 45 min ago

Those who eat a balanced and wholesome diet should seldomly become ill. Healthy people are usually able to combat minor infections without showing any symptoms. However, even healthy people become sick when their exposure to pathogens is persistent or they become too lax in their diets. Emotional stress can weaken the immune system too.

Our usual recommendations about the avoidance of most sugars, and a diet featuring vegetables should be disregarded during sickness. While these healthy habits may be ideal for preventing illness, they can actually slow a body’s recovery when an infection has taken hold. During sickness, normal digestion is essentially suspended, and it is very common for the intestinal yeast to overrun the beneficial bacteria that normally helps to digest the more challenging foods, like vegetables.

What the body needs most during routine illnesses are sugary, salty, and fatty foods. Most people crave junk foods when they are sick because the body needs the ingredients of these foods to repair and defend itself. Sugars are generally regarded as villains, but it is important to remember that sugar is what gives the body energy. When a body is busy fighting an infection, sugars will provide emergency energy that a body needs, and they also help the patient to be more active. Foods that are high in fat allow the body to defend the nervous system from attack, and some of the fat will be used for energy production.

Most health-conscious people consume only small amounts of salt due to the categorical slander of salt by the medical establishment. As a result, health-conscious people are often deficient in salt, and the trace minerals that accompany sea salt. Salt helps to defend the body against invaders. Because of this, those who eat processed foods regularly are ironically better protected against routine illnesses than the health conscious are; but of course, those with healthier lifestyles fare much better against serious diseases. The white, minerally-stripped, and processed table salts have contributed to our modern epidemics by lacking the important minerals that salt is supposed to contain, so stick with sea salt if possible. Increasing salt intake during sickness would be a wise approach.

Some processed foods will actually be better for a person who is sick than what we normally consider to be healthy foods. The wisest approach during sickness is to obey any food cravings that arise, because the body knows exactly what it needs.

Some of the people who read this section will assume that our recommendations are terrible because the recommendations will produce an acidic body pH. This is true. However, it is impossible to maintain an alkaline body pH during times of infectious illness. The pattern is so reoccurring that the human body might actually be designed to become more acidic, as a means of creating an inhospitable environment for pathogenic invaders. We certainly know that attempts to maintain an alkaline pH during an infection are futile and counter-productive. Thus, a patient should try to work with whatever the body is doing, instead of against nature. When wellness is obtained again, all of the rules revert back to normal.

The following supplements are anti-viral and anti-bacterial. They will help the body to fight an infection. The dosages provided are just estimates, and minor changes will not be harmful.

The Anti-Virals

  • Colloidal silver (3 fluid ounces 2-4 times a day)
  • Neem * (500 mg. per 125 lbs. of body weight)
  • Echinacea (400 mg. per 100 lbs. of body weight)
  • St. John’s Wort * (300 mg. per 150 lbs. of body weight)
  • Zinc (25 mg. per 100 lbs. of body weight)
  • Yarrow (300 mg. per 150 lbs. of body weight)
  • Goldenseal root (500 mg. per 120 lbs. of body weight)
  • American ginseng (panax ginseng)
  • Feverfew (250 mg. per 150 lbs. of body weight)
  • Vitamin C (1 gram / 1,000 mg. twice a day for adults, and half for children)
  • Alcohol (Explained later)

Read the rest of the article

Santa Bomb Is Coming to Town

LewRockwell.com - 14 hours 45 min ago

A “superbomb” storm is being predicted for Christmas Day in the Northeast United states according to WeatherBell Meteorologist Dr. Ryan Maue who has pointed out it looks to be reminiscent of the Cleveland Superbomb of 1978 aka the “Great New England Blizzard of 1978″.

This GFS forecast model for Christmas Day shows the depth of the low, poised to gather moisture from the Great Lakes and dump it into the Northeastern U.S. over the next 24-48 hours, potentially making Christmas and post-Christmas travel a nightmare, but … there is a twist.

Dr. Maue adds on his Twitter feed:

Exciting to see extreme weather forecasts with an item that requires dusting off the record books. 958 mb low

For reference, a 958 millibar low pressure system is as low as the central pressure for some tropical storms and nearly that of some hurricanes. For example Hurricane Sandy had a central pressure of 940 mbar or 27.76 inHg.

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To the State, We’re Economic Slaves

LewRockwell.com - 14 hours 45 min ago

Signing of Dodd-Frank – Now Virtually Repealed/Gutted

The NY money center Banks won again in Washington, the second time in a single month. They succeeded in repealing Dodd-Frank and have now succeeded in repealing the Volcker Rule, which it is officially put on “delay” that will be permanent. The Federal Reserve has repealed the Volcker Rule that will let the highly speculative banks hold onto billions of dollars in private-equity and hedge-fund investments for at least two more years until it is delayed again if not just forgotten about silently.

The Fed granted the delay yesterday after banks argued selling their vast positions quickly might force them to accept discount prices. The irony in this is that Goldman Sachs Group Inc. has $11.4 billion in private-equity funds, hedge funds and similar investments, while Morgan Stanley has $5 billion, securities current filings show. But Goldman became a “bank” only to get in line for bailouts. They are not a real bank with branch offices taking deposits from little old ladies. They became a “bank” to accept a bailout. Now as a bank, they are altering the entire banking system because they are traders – not bankers. JP Morgan want to be more and more like Goldman Sachs. This is destroying the entire banking system.

Speculating is NOT what a bank was supposed to do. Banks were to lend money to build the economy – not speculate for profit. Goldman Sachs should be returned to an investment bank and JP Morgan should be told to choose – sell all its branches and stop taking deposits becoming an Investment Bank or stop the speculation and be a damn bank.

These politicians are up for sale and that is the entire problem. Indeed, the banks virtually rent space on the floor of Congress. They own the building and almost everyone inside. Nobody gives a damn about the future of the economy and the nation just how much will the banks give them to keep office.

We are headed into another crisis of greater proportions because NY money center banks are no longer about “RELATIONSHIPS”but a free-for-all based solely on TRANSACTION oriented business. One deal to the next without any long-term strategy. We are headed into a vortex that may kill the dollar as the reserve currency on the next decline because the banks will blow up big time on this next round.

Reprinted from Armstrong Economics.

Could You Survive a Blizzard?

LewRockwell.com - 14 hours 45 min ago

How do you survive if you become trapped in your vehicle during a blizzard? With winter fast approaching, this is a good question.

The last few years have seen unseasonably cold and snowy winters in the U.S. Along with sustained cold temperatures, many regions experienced blizzard conditions including heavy snow fall and accumulation, combined with strong winds. Numerous areas were affected, including thousands of miles of roads ranging from major commuter highways down to narrow, twisty mountain roads. This became a recipe for motorists getting stuck in their vehicles during these tough weather conditions and they did.

Blizzards and winter storms are generally forecast by our nation’s weather services. What is not easily predicted is the true amount of snow, wind speeds, and the areas where snow and ice will accumulate.

This means that if you live in or are traveling through to an area that gets winter snow storms, regardless of whether it is urban, suburban or rural, you need to be prepared.

Here’s how.

Winterize Your Vehicle, personal gear and emergency equipment

Your Vehicle

  • Get your vehicle winterized including, engine, radiator and windshield washer fluids. Don’t forget new wiper blades as well.
  • Have your battery checked.
  • Get your tires checked. Do they have enough tread to last the winter or do you need to change them for all season or snow tires?
  • Put your tire chains or traction mats in the trunk.
  • Print out this free download of what you should keep in a vehicle emergency kit.

Emergency Equipment

  • Verify that you have a windshield scraper, tow rope, jumper cables, flares, or portable emergency roadway lights. If you have a larger vehicle, in particular, make sure your tow rope is up to the task. You don’t want a 10,000 lb. rated tow rope to pull out an Escalade, but you don’t need a 30,000 lb. one for a VW Bug.
  • Include a small folding shovel and bag of sand or cat litter (the old cheap kind, not the newer clumping kind) in case you get stuck and need to dig out or provide extra traction for your tires.
  • Check your first aid kit and replenish any used supplies.
  • Additional items can be found at  Ready.gov

Personal Gear

  • Winterize your emergency gear with a couple of space blankets as well as one wool blanket or sleeping bag. The cheap mylar space blankets are great to have, but they rip easily so you might want to splurge on the reusable, higher-quality ones to keep in your car.
  • Make sure your emergency kit includes, among other things, glow sticks, knife or multi-tool, duct tape, flashlight, extra batteries, a lighter, matches, candles for melting snow, pen and paper.
  • It’s important to have a metal cup or can for melting snow into water. Even an empty soup can will do, provided it’s metal. Most H2O containers will freeze once your vehicle cools down.
  • Store some extra water and high energy foods or snacks like protein bars in the vehicle.
  • Pack a small gear bag with extra clothing. Jacket, hat, socks, and gloves are a minimum – preferably wool or something high tech and waterproof. If you dress up for work, add a complete change of appropriate winter clothing, including snow boots. I also add in a couple packs of chemical hand and foot warmers.

If You Become Stranded

First and foremost, keep calm and stay focused on what you need to do to survive.

Stay With Your Vehicle

It is much easier to spot a vehicle than it is a person. Only leave to seek help if you have 100 yards (a football field) of visibility or more and you have a clear, visible objective to go for. Do not just get out and start walking along the road way hoping someone will find you. That is a good way to freeze to death, literally.

Make Your Car as Visible as Possible, Quickly!

Turn on your emergency flashers and dome lights while your engine is running. Tie something bright, like a bandanna, to your antenna or roof rack, if you have one, or hang something bright out a window. If you have glow sticks, put one in both your front and back windows. This will make your vehicle (and you) much more visible, even when it is snowing and blowing heavily. Finally, when the snow has stops, raise the hood of your car.

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No Need for Immigration

LewRockwell.com - 14 hours 45 min ago

Beginning in 2015 and escalating from then on, skilled workers from all over the world will have the digital equivalent of green cards. They will be legal to hire. They will flood into America’s middle-class job markets.

The last major barrier is coming down: the language barrier.

Mercantilism is about to get hammered in the world’s labor markets. The free market is about to score another victory. Skype will soon announce to the unemployed, college-educated, 20-something workers of the world: “Y’all come!”

From China, from India, from Singapore, from Latin America, from Spain, and from Greece they will come. They will offer their services to America’s businessemen. “Hire us. We speak fluent English — digitally.”

They will not be living inside America’s borders. So, they will not be illegal aliens. They will be legal aliens.

In flawless English, they will say three words: “I’ll work cheaper.”

There is no way to stop this. The genie is about to leave the bottle. Free trade in services is about to overcome the last great barrier to entry: language.

Those Americans who cry out against the 10 million or 20 million illegal aliens who it would take $500 billion to deport — illegal immigrants who fix roofs — will watch in impotent rage as legal aliens take away their middle-class jobs — legally.

The cries of outrage will be heard across the nationalist blogospshere. “This must be stopped!”

How? Be specific. Tell me how.

How will white-collar Americans compete against low-cost workers who can do their jobs at half the price, and who can speak face-to-face with American employers?

I’ll tell you how. By getting better trained. By working more efficiently. By lowering their prices. By American know-how. By market competition. By offering employers a better deal.

The horror!

With respect to all those people who demand federal protectionism in goods, and who have failed politically to get it for 45 years, protectionism in services is also about to go the way of all flesh.

As Joe Louis might put it regarding protectionists, “They can run, but they can’t hide.”

Advanced economies specialize in services, not manufacturing. America’s economy is a service-based economy. The labor unions are mostly gone. They cannot win elections in the profit-seeking service sector. Now what has happened to union members is about to happen to white-collar workers: wage competition.

Protectionists can scream. “It’s not fair!” Let them scream. Let them scream in a dozen languages on Skype. It’s all over but the screaming.

As a matter of fact, it is fair. It is morally fair. It is economically fair. It is the free market’s principle in action: the right to bid. It is the right to offer customers a better deal. It is liberty in action.

The right to bid. Protectionists hate this principle with every fiber of their being. But it will do them no good in the world that is coming.

The floodgates are about to open. Be prepared. Be prepared to supply a service locally that cannot be supplied over the Internet. Be prepared to compete if you do supply a service over the Internet.

Comprende, amigo?

2015: a Downhill Run for the Dollar?

LewRockwell.com - 14 hours 45 min ago

Rosy GDP numbers may have cheered the masses, but John Williams of ShadowStats.com says we’re a long way from prosperity. In this interview with The Gold Report, Williams debunks the myth of economic recovery and warns that we still have serious debts to settle. That is why he is recommending caution in 2015 to preserve purchasing power and maintain your standard of living.

The Gold Report: Your hyperinflation report predicted 2014 would be dominated by economic distress, financial crisis and panics. Were you surprised by the performance of the economy this year?

John Williams: No, at least not in terms of the actual performance. We’re getting some fantasy numbers, which I’ll be glad to address. The economic distress continued. If we look at the consumer conditions, generally median household income has continued to be stagnant at a low level of activity, below where it was in 1967 as adjusted by the Consumer Price Index (CPI). Even though the gross domestic product (GDP) supposedly rebounded in mid-2009—it’s 7% above where it was before the recession started in 2007—there’s very little that confirms that.

If the individual consumer is not out there buying, we don’t have good activity in the bulk of the U.S. economy. Over 70% of the GDP is tied to personal consumption expenditures, and another couple of percent on top of that is tied to residential investment. If we don’t have positive inflation-adjusted growth in income—I’m talking actual household income—we can’t possibly have an economy that will grow faster than income growth, other than for a temporary boost from credit expansion, and that is not happening.

Credit growth is very limited for the consumer. If we look at consumer credit outstanding, although those numbers have gained since the panic of 2008, all the growth there has been in federally owned student loans, not in the type of consumer loans that would usually go into buying washers and dryers and such. Basically, the consumer’s liquidity has been constrained. We are also seeing consumer confidence and sentiment numbers that are typical of a recession, not an economic boom. We have a lack of income growth, a lack of adequate credit availability and, generally, a low level of confidence.

Consider that GDP growth in Q3/14 adjusted for inflation was an annualized 3.9%, and 4.6% in Q2/14. That’s two back-to-back quarters of roughly four percentage points. This is the strongest economy in over a decade if you believe the government’s statistics, yet I’ll challenge you to find someone who thinks that this is that good of an economy. It’s just not there. There may be pockets of strength in Silicon Valley or such, but the average homeowner and the average consumer are not seeing it.

TGR: If there are all of these negative signs going on, why are the GDP numbers so high?

JW: When Lyndon Johnson was president, he would get to review the GDP numbers every quarter. If he didn’t like them, he’d send them back to the Commerce Department and keep sending them back until the Commerce Department gave him what he wanted. We don’t have anything quite that overt happening now, but the government understates inflation. The problem is if you use too low a rate of inflation when adjusting economic numbers for inflation, that tends to overstate economic growth. When there is a roughly 2% annual understatement of GDP inflation, it means that GDP is basically overstated by two percentage points. When we look at the current number, 4% annualized GDP growth, we’re seeing year-to-year growth of 2.4%. So if we take 2% out of that, you’re seeing 0.4% growth. That’s negligible.

As far as what happened in 2014, the economic data do not surprise me that much, because there are always problems with how it is reported. The ongoing problems with the economy continued. We did see a couple of flutters in the stock market. What did surprise me was the strength of the dollar. That’s where the risks run for the immediate future, particularly into 2015.

The dollar is unusually strong, the strongest it’s been in some time. If we look at the factors that drive it, the dollar is very vulnerable. Right now, our economy purportedly is booming, and the rest of the world is in recession. So that, on the surface, would tend to result in a strong dollar. I’ll contend, though, that our economic growth is not real. The numbers will weaken. Retail sales and industrial production actually have much higher credibility than the GDP in that we’ll see indications there of renewed recession. We’ve already seen a sharp slowing so far in the data for Q4/14.

TGR: How, in your view, did quantitative easing (QE) and tapering impact the dollar?

JW: QE was a fraud in how it was put forth. The idea here is that the Federal Reserve was doing this to help the economy. But even as he was expanding QE, Fed Chairman Ben Bernanke explicitly expressed that there is very little the Fed can do to stimulate the economy at this point. The systemic financial panic of 2008 brought the financial system, particularly the banking system, to the brink of collapse. That’s where it was headed. The Fed and the Treasury did whatever they had to do to prevent total collapse. They created whatever money they had to create. They lent whatever money they had to; they spent it; they bailed out whatever firms they had to; they guaranteed all deposits.

When QE was introduced, the Fed flooded the banking system with cash. Normally, banks would take that money and put it into circulation. If they let it go into the normal flow of commerce, we would have had things pick up in lending, and that would have helped turn the economy around. That didn’t happen. What the banks did was deposit the funds back into the Federal Reserve as excess reserves in the monetary base. It didn’t help businesses at all. This policy was designed to help banking. That’s the Fed’s primary function in life, to keep the banking system afloat.

Because of what happened during 2008, it wasn’t really a good idea politically to say, “Hey, we’re still bailing out the banking system.” So the Fed cloaked this policy as an attempt to stimulate the economy. And as the economy remained weak, it would use the weak economy as political cover for increasing the QE. It was helping the banks, but it did nothing to help the domestic economy other than by preventing a complete collapse of the financial system.

TGR: Is that why it didn’t have the effect on the dollar that everyone was predicting?

JW: It did have an effect on the dollar early on. Whenever there was a rumor that the Fed was going to have to ease more, the dollar would take a hit and gold would rally. When tapering was indicated, the dollar would rally and gold would sink. There was a very direct relationship there.

Some months back, the economic numbers all of a sudden started to take off in a manner not seen in a decade, not supported by any underlying fundamentals. Then the Fed said it would cut back on its tapering and eliminate its purchases of new Treasury securities, which was seen as a positive for the dollar because it meant the Fed was going to shy away from further, open debasement of the dollar.

But here’s where the risk comes: The U.S. economy has not recovered. It’s still in trouble. The numbers, as we move forward into 2015, are going to get much weaker. That’s going to, again, increase the speculation of a QE4. That will all be very negative for the dollar and very positive for gold.

Relative government stability is another big factor in a currency’s value. Over the last year, we’ve seen the domestic political circumstances go from bad to worse. I think the political situation is going to continue to deteriorate.

We can look at the domestic fiscal circumstances. Now, the cash-based federal deficit shrank this year to less than $0.5 trillion—supposedly good news, but what people don’t seem to be thinking about is that the Fed actually monetized 80% of that deficit through quantitative easing. The U.S. government wasn’t out there in the markets borrowing openly and honestly. Whatever it was borrowing was also being purchased and taken out of the market by the Fed.

If we look at the annual deficit using generally accepted accounting principles and account for unfunded liabilities for programs such as Social Security, that deficit increases by about $6 trillion ($6T) per year. On an aggregate basis, including roughly $18T worth of gross federal debt, total federal obligations right now are up around $100T in net present value. That’s what the government needs to cover its obligations. It doesn’t have that and never will. What that means is the federal government does not have a sustainable financial future. That’s the long-term fate of the system here.

TGR: Do you think the dollar is in a bubble right now and is going to crash?

JW: I guess you could call it a bubble. I do think it’s going to crash. With that crash will come a big spike in oil prices, a big spike in gold and silver prices. The Fed is going to have to ease again. A weak economy means more stress on the banking system, and the Fed is always looking to prop up the banking system.

What you have to keep in mind with inflation and deflation is that there are different ways of looking at them. I’m looking at inflation and deflation basically from the standpoint of consumer expenditures, what people see in the way of prices of what they’re purchasing, as opposed to asset inflation or deflation, where we’re looking at financial market values. We can also look at growth in the money supply as a measure of inflation and deflation. Money supply growth actually will start to pick up very sharply as the dollar comes under heavy selling pressure.

There are some major problems with how inflation is viewed. I’m talking now about practical, day-to-day household operations. How much did it cost me to live last year? How much is it going to cost me to live same way this year? However much that number increases—the cost of maintaining a constant standard of living—is the rate of inflation as far as the average person is concerned. That is the rate of inflation to use for targeting income growth or investment return. The government no longer reports it quite that way; the CPI does not measure inflation from the standpoint of maintaining a constant standard of living, or even from the standpoint of reflecting out-of- pocket expenses.

But central banks want to create inflation to prop up their economies and markets. Just blindly creating inflation, however, doesn’t make any sense.

The positive type of inflation is created by strong demand for products, and because of short supplies, prices rise, but production also will be increasing. That’s how the system would normally adjust for it. In this scenario, people are employed, their salaries are increasing, and the economy is growing. The Fed can’t create that kind of inflation, at present. They would like to, but they can’t. The central banks can’t create that type of inflation, certainly not by flooding the system with cheap money that’s not being lent to the consumer. They can only create the type of inflation that is driven by currency weakness.

I’m looking for the dollar to sell off sharply, actually suffer a massive decline, which, in turn, will be reflected in a very strong rise in commodity prices, pushing costs higher, pushing inflation higher, but not strengthening the economy. That’s what the central banks are pushing for, which is nonsensical.

TGR: I recently wrote an article based on comments from former Federal Reserve Chairman Alan Greenspan that he gave at the New Orleans Investment Conference. He denied that the Fed was responsible for the housing bubble and explained that bubbles are easy to see but difficult, if not impossible, to pinpoint when they will implode. Do you agree? What bubbles do you see out there?

JW: Greenspan is a very interesting character. He has a wonderful vocabulary and was certainly a very influential politician and Fed chairman over the years, but what you just said is largely nonsense. In fact, you can make a strong case for laying the problems that we have right now in the lap of the former Fed chairman.

There are two things at work here. One, starting about 1970, the U.S. embarked on all sorts of trade practices that encouraged sharp growth in the trade deficit and the weakening of the dollar. As the dollar fell and as domestic production increasingly moved offshore, higher-paying production jobs disappeared. If we look at the government’s numbers on the inflation-adjusted income of production workers in the U.S., it is 10–15% below where it was in 1970, and it’s been flat for the last couple of decades. This is where the problems developed with consumer income. We can’t build wealth on producing hamburgers and providing services. We’ve become a service-based economy. That does not build wealth as does, let’s say, manufacturing automobiles or tanks.

When I talk about manufacturing, I’m not talking about having an assembly plant. I’m talking about actually having all the subcontractors that make the parts. That’s disappeared, and that put the American consumer in a circumstance where he or she just could not support the economy. Alan Greenspan recognized that. So what he did was encourage debt expansion, particularly in areas such as home equity loans. And the debt expansion that followed was what provided the bulk of the growth in the U.S. economy for the decade before the panic in 2008.

TGR: The housing bubble.

JW: That was a deliberate policy decision at his end. Had the economy taken a hit much earlier, say back in the time of the 1987 stock market crash, there would have been a period of financial discomfort, but the system would have been cleansed of a lot of abuses that had built up over time, and we could have had positive growth going forward. What we did with the debt expansion was to borrow as much growth as we could from the future and pull it into the earlier periods. There had to be a day of reckoning there.

TGR: Have we had that cleansing? Did 2008 get all of that out of the system?

JW: No. All sorts of things are still at work there because the system was not allowed to collapse as it would have. As much as could be was pushed off into the future. We still don’t have a healthy, sustainable system. The panic of 2008 is still with us; it’s just been pushed a couple of years into the future. We’re coming up on it again.

But let me make one other point here because it’s an important one regarding Mr. Greenspan’s involvement. A lot of the bubble and its detrimental effects were created by all these derivative instruments—mortgage-backed securities and such—that were created as new investment vehicles and sold to the rest of the world. That area was highly touted by Alan Greenspan and by the Federal Reserve under his control as a way that the banks could spread risk. For example, insurance companies could take that risk by buying these derivative instruments. It was a way of distributing risk within the system.

The U.S. central bank can be credited with both encouraging an extraordinary debt bubble and in creating and encouraging the derivative instruments that were used to build debt leverage on top of debt leverage that resulted in the collapse in 2008. The Fed and the federal government never addressed the core of the economy’s problems, never addressed why is it suffering from a liquidity standpoint. What they did was look for how we could borrow economic growth from the future. They came up with some very creative ways of doing it. When you borrow things from the future, usually you have a period of payback. That’s what we’re seeing now. That’s why we can’t get the economy to grow.

TGR: Can you give us a picture of what we can expect in 2015 and how we can prepare for it?

JW: I’ll give you a couple of things to look for in 2015. Fundamental economic activity as measured in areas such as retail sales, industrial production, housing starts, payroll numbers and the broadest measure of unemployment—all those numbers are going to deteriorate. The economy is going to head down as we get into reporting in early 2015. Along with that will come renewed expectations of action by the Federal Reserve to accommodate the financial system, particularly the banking system, and the combination of those factors will, I believe, help to trigger a massive decline in the U.S. dollar. As a result of that, we will see spikes in commodity prices, such as oil. We will see a flight to quality in areas such as the precious metals—gold and silver. We will see the stock market and the bond market generally suffer some real selling pressure.

If interest rates go up, they would start to reflect in inflation numbers. Traditionally, long-term interest rates tend to move with inflation. You might see some upside movement there in the longer-term interest rates, which would depress the bond prices. A return to an accommodative mode for the Fed might rally stocks. But guess what? If we value those stocks in either inflation-adjusted dollars or in Swiss francs, we’ll find that the real value of the domestic stock market will be in contraction.

Even though the Dow could rally to new highs, I would shy away from stocks. I know gold and silver have taken tremendous hits in this last year, but I would suggest holding physical gold and silver as hedges against the loss of purchasing power in the U.S. dollar. If you can put your liquid assets into something like gold, which will preserve the purchasing power of those assets and continue to provide liquidity. Such an investment would likely help you to get through the inflation crisis and whatever crises follow that. When things settle down, you should still be able to function well, having maintained the purchasing power and liquidity of your assets and wealth.

It’s an extraordinary time. I did move my hyperinflation forecast from 2014 into 2015. But the dollar selling can start at any time, with little warning. And there are things that the central bank may do to try and prop up the dollar, but once heavy selling is in place, it’s going to be a downhill run for the dollar.

TGR: Thank you for sharing your insights with us.

Reprinted with permission from Streetwise Reports.

The Delirium Phase

LewRockwell.com - 14 hours 45 min ago

Virtually every day there is an eruption of lunacy from one central bank or another somewhere in the world. Today it was the Swiss central bank’s turn, and it didn’t pull any punches with regard to Russian billionaires seeking a safe haven from the ruble-rubble in Moscow or investors from all around its borders fleeing Mario Draghi’s impending euro-trashing campaign. The essence of its action was that your money is not welcome in Switzerland; and if you do bring it, we will extract a rental payment from your deposits.

For the time being, that levy amounts to a negative 25 bps on deposits with the Swiss Central bank—-a maneuver that is designed to drive Swiss Libor into the realm of negative interest rates as well. But the more significant implication is that the Swiss are prepared to print endless amounts of their own currency to enforce this utterly unnatural edict on savers and depositors within its borders.

Yes, the once and former pillar of monetary rectitude, the SNB, has gone all-in for money printing. Indeed, it now aims to become the BOJ on steroids—-a monetary Godzilla.

So its current plunge into the netherworld of negative interest rates is nothing new. It’s just the next step in its long-standing campaign to put a floor under the Swiss Franc at 120. That means effectively that it stands ready to print enough francs to purchase any and all euros (and other currencies) on offer without limit.

And print it has. During the last 80 months, the SNB’s balance sheet has soared from 100B CHF to 530B CHF——a 5X explosion that would make even Bernanke envious. Better still, a balance sheet which stood at 20% of Swiss GDP in early 2008—-now towers at a world record 80% of the alpine nation’s total output. Kuroda-san, with a balance sheet at 50% of Japan’s GDP, can only pine for the efficiency of the SNB’s printing presses.

As per the usual Keynesian folly, this is all being done in the name of protecting Switzerland’s fabled export industries.

Let’s see. During the most recent year, Switzerland did export $265 billion of goods, representing an impressive 41% of GDP. But then again, it also imported $250 billion of stuff. Accordingly, for every dollar of watches, ball point pens, (Logitech) mouses, top-end pharmaceuticals and state of the art high speed elevators it exported, it imported 95 cents worth of petroleum, raw and intermediate materials, semi-finished components and expensive German cars.

Accordingly, allowing the market to drive its FX rate below the magic 120 floor (i.e. appreciating the CHF) would not bring on Armageddon —just a reduction in its giant import bill to offset any loss of earnings from its export trades. Instead, however, the mad money printers at the SNB are pursuing an altogether different financial proposition. Namely, they are going massively and incorrigibly “long” the Euro, and, in fact, have already stuffed their bulging one-half trillion dollar balance sheet with vast emissions of the ECB’s unwanted euros.

Now why in the world would any rational investor want to get massively long the squabbling, dissembling monetary crackpots who run the ECB and the even worse gang of self-serving parasites who urge them on from Brussels?  Needless to say, that question doesn’t require much contemplation. The fact is, the SNB’s crazy money printing scheme to throttle CHF appreciation is just plain irrational.

Yet this very irrationality is part and parcel of the central bank race to the currency bottom that is driving the global financial system toward a monumental implosion. Prior to Mario Draghi’s accidental discovery in mid-2012 that by the mere emission of words (“whatever it takes”), he could temporarily park a $1.3 trillion chunk of his balance sheet with the fast money traders of London and New York (i.e. they and the various national banks front-ran the promised QE), the ECB’s balance sheet had expanded at a blistering pace, as well.

In fact, between 2007 and early 2012, the ECB printing presses had been working overtime, tripling their footings in a relative heart-beat of historical time.

Facing this tsunami of euro, the SNB simply responded in kind. After only a modest rise in the CHF exchange rate, it has launched  a veritable monetary rampage. Consequently, it has now committed what amounts to one-year’s output by the Swiss people to the dubious proposition that something will not go bump in the night among the German, French, Italian, Spanish, Greek, Dutch etc. patriots—–financially illiterate as they may be—who malinger in Frankfurt.

So add Thomas J. Jordan, Chairman of the SNB and PhD economist, to the rogue’s gallery of financial arsonists who are setting up the global financial system for a fiery conflagration. To nearly every last man and woman, these central bankers are now daily espousing pure monetary rubbish, making up theories as they go along to justify an out of control spiral of debt monetization and extreme interest rate repression.

To reprise, there is no “deflation” threat whatsoever in the Eurozone. It’s just made-up chatter among the financial apparatchiks based on the fact that the long-suffering citizens of these countries are finally enjoying a moment of price stability compared to the official 2% inflation “target” . Yet there is not a shred of proof that cutting the purchasing power of savings in half every working generation—–that’s what 2% compounds to over 30 years—-results in more growth and wealth.

Stated differently, the ECB is fixing to unleash a new round of QE based on mere ritual incantation. Buying the junk bonds of Italy, Spain, Portugal and Greece cannot possibly generate more productivity, enterprise or investment in the euro-zone. Interest rates are already at the zero-bound and households, business and banks are already saturated with “peak debt” and have been so since 2008.

What QE in the Eurozone will do is enable fiscal fraud in the peripheral countries and a further inflation of already lunatic valuations of sovereign debt. It is now an established fact that the Italian government, for example, cannot get out of its own way, and that its public debt is in a death spiral. Yet today the Italian 10-year is trading at a 1.9% yield because the fast money traders are happy to hold it on zero cost repo—- until the ECB takes it off their hands at an enormous windfall gain a few months down the road.

The above pictures are no more anomalous than today’s 35 bps yield on 10-year JGBs——the debt of a government which is hopelessly bankrupt and for which there is virtually not a single bid anywhere outside of the open market desk of the BOJ. Nor does it make any more sense than today’s heated rip on Wall Street based on the word “patient” at a point in the cycle where 71 months of free carry trade money has already inflated financial asset values to the nose-bleed section of history.

In short, the central banks of the world are embroiled in a group-think mania so extreme and irrational that it puts one in mind of the spasm of witchcraft trials that erupted in the Massachusetts Bay Colony nearly four centuries ago.  As a practical matter, this mania amounts to a race to the currency bottom and the final extinguishment of the price discovery mechanism in every financial market on the planet.

Flying blind, the financial markets are thus bubbling–in the delirium phase—-like never before. That is, until they don’t.

Reprinted with permission from David Stockman.

Shake Your Bottle of Champagne

LewRockwell.com - 14 hours 45 min ago

Most people hoping to celebrate with glass or two of champagne this festive season will probably try to avoid agitating their bottle of bubbly before serving.

Shaking bottles of champagne has become widely associated with flying corks and the kind of messy spraying of liquid normally restricted to the winners podium in Formula One.

But new research now suggests that actually giving your bottle of champagne a good shake before serving may help to reduce the risk of unwanted explosions upon opening.

French scientists have found that vigorously shaking a bottle of champagne can actually decrease the pressure that builds up inside the bottle.

The key, it seems, is waiting for the right amount of time before opening the bottle.

They found that although the pressure initially drops when champagne is shaken, huge numbers of ‘super critical’ bubbles form in the neck of the bottle.

This is what leads to the characteristic effervescence that occurs when a bottle is opened.

However, after around 40 seconds the number of bubbles in this state begins to decrease until they have completely disappeared 220 seconds – just over three and half minutes – after shaking.

At the same time, the pressure inside the bottle starts to increase again but plateaus around 0.1 bar less than the original value.

Professor Gérard Liger-Belair, who led the research at the University of Reims in Champagne-Ardenne, said: ‘A popular belief is that the pressure increases when a bottle is shaken and that is the reason for gushing of the liquid when the bottle is opened.

Read the rest of the article

The Science of Pain Is Changing Rapidly

Dr. Mercola - 14 hours 46 min ago

By Dr. Mercola

Pain is a widespread problem today, delivering serious blows to people's health, happiness, and productivity. The experience of pain is highly subjective—people feel pain differently. The pain process itself is a multifaceted phenomenon and understanding it has become a major focus of scientific inquiry.

The documentary The Secret World of Pain explores the biological, psychological, and genetic aspects of pain, including genetic mutations that interfere with pain signaling and even render certain individuals completely unable to experience pain—which can be quite dangerous.

Some of these rare individuals are featured in the film and are of great value to pain researchers. In addition to genetics, events in early childhood also help determine how you experience and respond to pain later in life.

The good news is that your pain response is not indelibly hardwired into you, in spite of your genetic predispositions and early childhood experiences. Studies show it's possible to distract or "manipulate" your brain into responding differently to pain—excellent news if you are a chronic pain sufferer.

With a few effective tools, you can manage pain effectively and reduce, if not eliminate, your reliance on painkiller drugs. This is important because these drugs introduce a whole new set of health risks, regardless of whether they are prescription or over-the-counter (OTC).

How Extensive Is the Pain Problem?

The latest statistics indicate that pain is a massive problem. According to the Institute of Medicine report, "Relieving Pain in America: A Blueprint for Transforming Prevention, Care, Education, and Research,"1 pain costs society between $560 billion and $635 billion annually—amounting to about $2,000 for every man, woman, and child living in the US.

Part of this cost is lost productivity. Overall, workers lose an average of 4.6 hours per week of productive time due to pain conditions, regardless of age. According to the American Academy of Pain Medicine, pain affects more Americans than diabetes, heart disease, and cancer combined.2

The global market for pain management is forecast to reach $60 billion by the year 2015,3 driven by our aging population, lifestyle trends, increasingly frequent surgical procedures, and escalating rates of chronic illness—such as arthritis and cancer.

Pain is an unfortunate sequela of many diseases, as well as their common medical treatments. Low back pain is the leading cause of pain in the US, according to NIH, followed headaches and migraines, neck pain, and facial pain.4 Back pain is also the leading cause of disability worldwide.5

Chronic Pain 'Defies Scientific Explanation'

Chronic pain is a particularly egregious problem, not only in the US but across the globe. As of 2011, at least 100 million adult Americans were estimated to suffer from chronic pain—a conservative estimate, as it didn't include acute pain conditions or children. According to the BBC documentary, chronic pain affects one in five people.

Globally, more than 1.5 billion people suffer from chronic pain, and about 3 to 4.5 percent of the world's population suffers from neuropathic pain, with incidence rates that increase with age.

In those with chronic pain, the pain response is flipped on—and stays on. For some reason, the feedback system is broken and repairing it is one of the greatest challenges facing medicine today.

Chronic pain, such as persistent pain after a stroke or the pain associated with fibromyalgia, is especially devastating because it serves no functional purpose and responds poorly to conventional treatments.

For chronic pain sufferers, pain signals fire incessantly, causing a cascade of changes to the nervous system that amplify these signals. This bombardment of your nervous system can significantly damage your brain, structurally and chemically. Brain scans show that chronic pain sufferers lose significant amounts of gray matter from their prefrontal cortex.

Determinants of Your Pain Experience

How can one person saw off his arm to escape entrapment and feel NO pain, while another may be in pain around the clock, absent of any pain stimuli?  Geneticists believe DNA explains how people experience pain differently. Hundreds of genes and millions of neurons are responsible for transmitting messages between your body and brain.

On the other hand, many psychologists believe how you experience pain as an adult is determined by your early childhood experiences, and your beliefs and perceptions about pain. Chances are, both geneticists and psychologists are correct!

Mutations on one gene—the SCN9A gene, involved in the regulation of sodium channels—are responsible for congenital insensitivity to pain. But different mutations on that same gene can cause "paroxysmal extreme pain disorder," a condition where pain signals are mercilessly amplified.6

But genes can't explain everything—key life experiences are just as important. Pain pathways formed in early childhood are intricately connected with touch pathways. In fact, a pain pathway can be thought of as an overstimulated touch pathway.

Preemies show stronger brain activity than normal babies, suggesting heightened sensitivity to pain. This is believed to be associated with their exposure to a greater number of painful procedures when their nervous systems are so immature, which affects the development of their pain pathways.

This doesn't happen to all preemies, but it does give powerful insight into how pain responses develop. Interestingly, pain receptors and responses differ between the genders. Studies show that women experience pain more acutely than men.7

A 2005 study showed that women have 34 nerve fibers per square centimeter of facial skin, compared to only 17 for men. Women also report more pain throughout their lives, in more areas of their bodies and for longer durations.8

Emotions Play a Significant Role in Pain Intensity

Every pain experience activates different parts of your brain, creating its own neural signature, and this determines how much something hurts. Emotions play a key role, including anxiety, happiness, and sadness.

In the documentary, brain-imaging studies reveals how participants' brains light up differently when pain is paired with different emotions. In fact, multiple regions of your brain are involved with every pain experience—sensory, attention, motivation, and decision-making areas all contribute to how much pain you feel. Each pain experience is a unique, shaped by mood and context.

Emotional pain activates the same pathways in your brain as physical pain, which is one reason why being rejected "hurts" so much! The term "broken heart" turns out to be much more than a metaphor, as emotional stress is linked to chronic inflammation, lowered immune function, increased tumor growth, and other serious health concerns.

No one understands the power of emotional pain more than those trained in torture. According to the CIA's "torture manual," the threat of inflicting pain triggers fears that are more damaging to the person than the pain itself, because people typically underestimate their capacity to withstand pain.9 This is an excellent example of how powerful your beliefs and expectations influence your experience of pain.

An interesting study at Duke University10 tested how expectations influence pain relief. Participants were given painful electrical shocks, then placebo pills. A placebo pill costing $0.10 alleviated pain for about 64 percent of the participants, but an identical placebo costing $2.50 reduced pain for 85 percent of the participants.

Prescription Painkillers Are Bad News

It is shocking just how little education physicians receive in medical school about pain management, despite the fact that pain is one of the most common and debilitating conditions they will face with their patients. Most European medical schools have no required courses on pain, and even when compulsory pain courses are in place, they represent just 12 hours of a six-year program. With few other tools in their tool bag, it's easy to see why physicians typically resort to prescription painkillers—and as a result, we have an epidemic of prescription drug abuse and related deaths.

Prescription painkillers typically work by binding to receptors in your brain to decrease your perception of pain—but they also create a feeling of euphoria that can easily lead to physical dependence or addiction. Painkillers can also result in allergic reactions, slowed breathing, and death, if too many are taken, and the risks are compounded if you add alcohol into the equation.

Painkiller addiction is at epidemic levels; in the UK, significantly more people are addicted to over-the-counter and prescription painkillers than to illegal drugs. In the US, it's a similar story. According to CDC, prescription painkiller overdoses killed nearly 15,000 Americans in 2008, which is more than three times as many as in 1999.11 Middle-aged adults have the highest prescription overdose rates. In 2010, there were four times more deaths among women from prescription painkiller overdoses than for cocaine and heroin deaths combined.12

Even if you don't become addicted to painkillers, long-term use can significantly increase your risk for depression. The drugs may reset your brain's reward pathway to a higher level, making it more difficult to experience pleasure from natural rewards like food. Seventy-seven percent of chronic pain sufferers who take opioid painkillers report symptoms of depression, and 86 percent report inability to sleep well, as well as other impairments to their quality of life.13

Even non-narcotic painkillers are risky. Non-steroidal anti-inflammatory drugs, or NSAIDs, are among the most widely used painkillers in the world. In the US, more than 70 million prescriptions for NSAIDs are written each year. And each year, an estimated 107,000 patients are hospitalized for NSAID-related gastrointestinal complications—at least 16,500 NSAID-related deaths occur each year among arthritis patients alone.

All NSAIDs, including aspirin and ibuprofen, are associated with potentially serious side effects such as atrial fibrillation, hypertension, and GI bleeding. The best way to avoid the downsides to painkillers is to avoid taking them in the first place. A better approach to pain is treating it with natural, drug-free strategies, before resorting to OTC or prescription drugs.

Embed this infographic on your website:

<img src="http://media.mercola.com/assets/images/infographic/nsaids.jpg" alt="NSAIDs: The Painful Truth Behind Painkillers Infographic" border="0" style="max-width:100%; min-width:300px; margin: 0 auto 20px auto; display:block;" /> <p style="max-width:800px; min-width:300px; margin:0 auto; text-align:center;">Non-steroidal anti-inflammatory drugs or <a href="http://www.mercola.com/infographics/nsaids.htm">NSAIDs</a> may offer temporary relief for chronic pain, but this comes with a list of side effects ranging from gastrointestinal problems to cardiovascular problems and premature death. Learn the painful truth about these painkillers by checking out this infographic on NSAIDs. Use the embed code to share it on your website or visit our infographic page for the high-res version.</p> <pre style="max-width:800px; min-width:300px; margin: 20px auto 0 auto; padding:10px; border:solid 1px #999999; background: #ffffff; white-space: pre-wrap; word-wrap:break-word;"><code>&lt;img src="http://media.mercola.com/assets/images/infographic/nsaids.jpg" alt="NSAIDS" border="0" style="max-width:100" min-width:300px; margin: 0 auto 20px auto; display:block;"&gt;&lt;p style="max-width:800px; min-width:300px; margin:0 auto; text-align:center;"&gt;Non-steroidal anti-inflammatory drugs or &lt;a href="http://www.mercola.com/infographics/nsaids.htm">NSAIDs</a> may offer temporary relief for chronic pain, but this comes with a list of side effects ranging from gastrointestinal problems to cardiovascular problems and premature death. Learn the painful truth about these painkillers by checking out this infographic on NSAIDs. Visit our infographic page for the high-res version.&lt;/p&gt;</code></pre>

Click on the code area and press CTRL + C (for Windows) / CMD + C (for Macintosh) to copy the code.

Study Shows Distracting Yourself May Cut Pain in Half

The good news is that you're not stuck with your genetics and old pain wiring—at least, not completely. As multiple studies have demonstrated, your pain pathways are plastic—they can be molded and transformed using a variety of approaches, because so many areas of your brain and nervous system are at play.

Researchers on the burn unit at Seattle's Harborview Medical Center are capitalizing on the fact that the brain's attention centers can be "distracted away" from a painful experience. Burn victims frequently undergo painful wound care procedures and debridement. Since we all respond strongly to visual stimuli, even the mere sight of wound care instruments can amplify pain for burn victims. So researchers developed an action video game, called "Snow World," that burn patients could engage in during wound care. The results have been astonishing—burn patients experience more than 50 percent less pain during their burn treatments when playing Snow World.

Your brain has limits to its processing power, so if you're highly engaged in an activity, your brain will not be able to process all of the pain signals. The net result is that you experience less pain. Similar studies show that when your mind is encouraged to "wander" away from painful stimuli, an opiate-rich region of your brain is stimulated, resulting in pain suppression.14

Another new technique that shows great promise for pain treatment is transcranial magnetic stimulation, or rTMS. Altering your brain activity with magnetic fields may indeed relieve chronic pain, but it's also been found useful for treating depression, obsessive-compulsive disorder, and Parkinson's disease. Unfortunately, the treatment is not yet widely available and is fairly pricey. According to Scientific American:15

"The magnetic field affects the electrical signaling used by neurons to communicate, but how exactly it improves symptoms is unclear—scientists suspect rTMS may redirect the activity of select cells or even entire brain circuits."

Medical Cannabis Is Typically Highly Effective for Pain Control

Download Interview Transcript

In California, medical marijuana has been legal for 18 years. Dr. Allan Frankel, a board-certified internist in California, has treated patients with medical cannabis for the past seven years. By and large, cannabis is highly favored by people across the US. According to Dr. Frankel, 85-95 percent of Americans are in favor of medical cannabis, and 58-59 percent are in favor of legalizing marijuana. The pharmaceutical industry strongly opposes medical cannabis, as it's their stiffest competition—particularly when it comes to treating pain, anxiety disorders, and seizures. Cannabis can take the place of a wide variety of synthetic drugs, and the last thing they want is a therapy that's going to take away from their bottom line.

Dr. Frankel has used cannabis to treat a variety of pain disorders, including degenerative neurological disorders like dystonia and multiple sclerosis. Although he has experienced many successes, he is reluctant to call it a panacea. Nevertheless, occasionally his patients will experience very dramatic results. Cannabis can be eaten, smoked, vaporized, or applied topically as a cream. Even eating raw cannabis—meaning, eating the leaves in a salad or juiced—can have healing effects, including pain relief, reduced anxiety, and improved sleep.

The effects are largely dose-dependent, but the dosing can be a bit tricky. Dr. Frankel shared that some patients may be taking 10 or even 100 times higher dosage than is really needed to treat their ailment. Access to medical cannabis remains a problem for many. At present, only 20 US states have legalized cannabis for medical purposes, but access is gradually expanding as more states vote in legalization. In states where medical cannabis is legal, you can join a collective, whose members have the legal right to grow and share cannabis medicines with each other.

Effective, Natural Pain Control Measures You Can Implement TODAY

Everyone's experience of pain is different, so you may have to do some experimenting to see what strategies work best for you. The following table lists many tried and true non-drug pain therapies that have stood the tests of time and scientific scrutiny.

NATURAL PAIN CONTROL Treatments Medical cannabis has a long history as a natural analgesic.16 Its medicinal qualities are due to high amounts (about 10-20 percent) of cannabidiol (CBD), medicinal terpenes, and flavonoids. As discussed in this previous article, varieties of cannabis exist that are very low in tetrahydrocannabinol (THC)—the psychoactive component of marijuana that makes you feel "stoned"—and high in medicinal CBD. The Journal of Pain,17 a publication by the American Pain Society, has a long list of studies on the pain-relieving effects of cannabis. Emotional Freedom Technique (EFT): Few people want to be told that their pain is psychological or emotional in origin, but there's quite a bit of evidence that backs this up. Underlying emotional issues and unresolved trauma can have an enormous influence on your health, particularly as it relates to physical pain. Dr. John Sarno, a psychiatrist who uses mind-body techniques to treat patients with severe low back pain, has experienced more than 80 percent success using EFT. Acupuncture: A novel experiment showed that acupuncture relieves pain by deactivating certain parts of the brain, particularly in the limbic system, which is involved with pain perception. Acupuncture stimulates the conduction of electromagnetic signals, which may cause your body to release natural pain-killing chemicals/endorphins. Other studies have found acupuncture more effective for chronic pain than drug treatment.18 Massage: Massage releases endorphins, which help induce relaxation, relieve pain, and reduce stress chemicals such as cortisol and noradrenaline. Latest studies suggest many people may not be getting massages frequently enough for pain relief—two or three 60-minute massages per week may be necessary. Chiropractic: According to a study published in the Annals of Internal Medicine19 and funded by the National Institutes of Health, patients with neck pain who used a chiropractor and/or exercise were more than twice as likely to be pain-free in 12 weeks, compared to those who took medication. Relearn proper posture: Foundation Training—an innovative method developed by Dr. Eric Goodman to treat his own chronic low back pain. The exercises are designed to help you strengthen your entire core and move the way nature intended. K-Laser: Laser therapy helps reduce pain and inflammation and enhances tissue healing—both in hard and soft tissues (muscles, ligaments, and bones). Laser therapy can be helpful for acute and chronic issues, alike. Mind-body approaches such as yoga, Tai Chi, biofeedback, breath work, and music therapy may be effective. Meditation can help you reduce stress-induced inflammation. Even holding hands with a loved one can relieve pain! Applying ice or heat, or alternating between the two, can provide relief and facilitate healing.20 Foods, Herbs, Creams, and Other Supplements Astaxanthin: One of the most effective fat-soluble antioxidants known, astaxanthin also has potent anti-inflammatory properties and in many cases works more effectively than anti-inflammatory drugs. Higher doses are typically required—you may need 8 mg or more per day to achieve this benefit. Ginger: This herb has potent anti-inflammatory activity and offers pain relief and stomach-settling properties. Fresh ginger works well steeped in boiling water as a tea or grated into vegetable juice. Curcumin: In a study of osteoarthritis patients, those who added 200 mg of curcumin a day to their treatment plan had reduced pain and increased mobility. A prior study also found that turmeric extract (rich in curcuminoids) blocked inflammatory pathways, effectively preventing the overproduction of a protein that triggers swelling and pain. Boswellia: Also known as boswellin or "Indian frankincense," this herb contains specific active anti-inflammatory agents. This is one of my personal favorites as I have seen it work well with many rheumatoid arthritis patients. Krill Oil: Many clinical studies have found the omega-3 fats EPA and DHA, contained in krill oil, to have anti-inflammatory properties beneficial for pain. Bromelain: This enzyme, found in pineapples, is a natural anti-inflammatory. Bromelain can be taken in supplement form, but eating fresh pineapple, including some of the bromelain-rich stem, may also be helpful. Cetyl Myristoleate (CMO): This oil, found in fish and dairy butter, acts as a "joint lubricant" and anti-inflammatory. I have used a topical CMO preparation myself to relieve ganglion cysts and a mildly annoying carpal tunnel syndrome that pops up when I type too much on non-ergonomic keyboards. Evening Primrose, Black Currant, and Borage Oils: These contain the essential fatty acid gamma linolenic acid (GLA), which is useful for treating arthritic pain. Capsaicin Cream: Capsaicin comes from dried hot peppers and has pain-relief and anti-inflammatory properties. Capsaicin depletes your body's supply of substance P, a chemical component of the pain signals your nerve cells transmit to your brain. It is available in pain-relieving creams and patches, and has shown promise for relieving shingles pain, osteoarthritis, psoriasis, and more.

Are Children Medicated for Convenience, or Necessity?

Dr. Mercola - 14 hours 46 min ago

By Dr. Mercola

Millions of children are taking powerful mind-altering drugs, often before they're even old enough to attend school. The long-term effects of psychotropic drugs on children are largely unknown, while serious short-term side effects are unfortunately common, including seizures, suicidal ideation, violent behavior and more.

According to WebMD,1 nearly five million American children have been labeled with some type of serious mental disorder. In any given year, 20 percent of children will be diagnosed with a mental illness.

The most common diagnosis for kids age 3 to 17 is ADHD, followed by behavioral problems, anxiety and depression,2 and many of these children are being prescribed powerful and potentially dangerous psychiatric drugs.

The BBC documentary "America's Medicated Kids" takes a look at several families with children on psychiatric medications. Journalist Louis Theroux gets a close look at some of these kids and their families by actually living with them for a time, hoping to understand what drives parents to put their kids on drugs.

Bad Behavior or Pathology?

Theroux identifies a fine line between ordinary bad behavior and pathology and poses the question of whether the latest drugs are taking the place of "good old-fashioned parenting."3

What happens to children when they are medicated at a very young age, during some key formative years? Do they grow up never knowing who they really are? What passions might they have developed were it not for the drug's influence?

Psychotropic agents can influence a child's brain development, and chronic drug exposure during sensitive periods can produce alterations of his or her nervous system that have unpredictable and potentially harmful effects.

Behavioral problems in children—including what might appear to be serious mental disorders—are frequently related to improper diet, emotional upset and exposure to toxins. These underlying issues should be resolved before suppressing symptoms with potentially dangerous medications.

The Diagnosis of Mental Illness in Children Is Subjective

The diagnosis of mental illness in children is far from an exact science. Modern psychiatry has expanded its reach to the point that even the most normal of emotions and mental states are now labeled as one "disorder" or another.

In many cases a child is labeled with a "disorder" such as ADHD (Attention Deficit Hyperactivity Disorder) based on subjective observations of behaviors that nearly all children exhibit at some time or another, such as excessive fidgeting or becoming angry after losing a game.

Ironically many of these behaviors are a result of forcing children into unhealthy patterns like sitting in a chair at their desk for 6-8 hours, which will not only contribute to the restlessness diagnosed as ADHD, but also increase their risk for a variety of diseases.

The Rampant Misuse of Psychiatric Drugs

Data from the National Health Interview Survey (2011-2012)4 revealed that 7.5 percent of American children ages 6 through 17 take a medication prescribed for emotional or behavioral difficulties.

In recent years, there has been a stunning increase in off-label use of atypical antipsychotics. While most are approved only for the treatment of serious mental illnesses such as schizophrenia, this class of drugs is now increasingly prescribed for children anxiety, insomnia, and/or behavior problems.

Children as young as 18 months are now receiving them, despite the fact that the diseases they're designed to treat rarely develop before adolescence.

Sales of antipsychotic drugs for children have increased eight-fold since 1993. Sales to teens have quintupled, while adult sales doubled in the same time frame. In 2008, an estimated $6 billion was spent on off-label antipsychotics in the US, of which $5.4 billion was for uses based on uncertain science.

Aggressive, and oftentimes illegal, marketing by drug companies is believed to be a major contributing factor to skyrocketing misuse of antipsychotic drugs in children. In recent years, a number of major manufacturers of atypical antipsychotics has been caught illegally marketing their drugs for unapproved uses in children and adolescents.

Foster children are prescribed psychotropics at a rate 12 times higher than other children on Medicaid. The high rates of psychotropic drug use among foster children and poor children are likely a direct result of drug company tactics that target doctors in the Medicaid program, influencing them to prescribe more drugs to this population.

ADHD Is Overdiagnosed and Overmedicated

ADHD seems to have become the catchall designation for children who do not "behave well," which is the subject of another excellent documentary, The Drugging of Our Children. One study5 estimated that 20 percent of children have likely been misdiagnosed, which amounts to nearly one million children in the US alone.

In 2010, the US Centers for Disease Control and Prevention (CDC) claimed that one in 10 American children had ADHD, representing a 22 percent increase since 2003.6

Many of these kids are diagnosed based on highly subjective observations of parents, teachers and guardians, and about two-thirds of those children were put on some form of prescription medication. In 2011, 48.4 million prescriptions for ADHD stimulants were written, up 39 percent from 2007.

ADHD drugs are indeed powerful mind-altering  hard-core drugs, regulated by the Drug Enforcement Agency (DEA) as controlled substances because they can lead to dependence.

ADHD drugs include amphetamines (Adderall) and stimulants (Ritalin and Concerta)7 with well-established risks, including heart attacks, strokes, and seizures. ADHD drugs can also stunt your child's growth or delay puberty.

It isn't just stimulants that have exploded in number—benzodiazepines (for anxiety) and narcotics (for pain) are on the rise as well, and all pose serious risks for children. Taking a narcotic painkiller for 180 days or longer can increase your risk of depression by 53 percent.

ADHD drugs, by definition, stimulate a child's central nervous system and may interfere with the intricate workings of his or her brain and personality. In 2011, ADHD drugs were responsible for nearly 23,000 emergency room visits, representing a 400 percent increase in just six years. For example, according to the US Food and Drug Administration (FDA),8 Ritalin's potential side effects include the following:

Sudden death in people who have heart problems or heart defects Stroke and heart attackIncreased blood pressure New or worse behavior and thought problemsNew or worse bipolar illnessNew or worse aggressive behavior or hostility, including suicidal thoughts and behaviors New psychotic symptoms (such as hearing voices, believing things that aren't true, paranoia)New manic symptomsIncreased heart rate Slowing of growth (height and weight) in childrenSeizuresEyesight changes or blurred vision Nutrition Is Often Overlooked in Children with Mental Health Issues

Total Video Length: 1:13:21

Download Interview Transcript

Behavioral problems clearly do exist, and do appear to be more prevalent among children today than in decades past. The question is, what's causing them? There are many contending culprits, including poor nutrition and environmental toxins ranging from food and vaccine additives to agricultural chemicals. Mental health therapy is certainly a preferable treatment to risky psychoactive drugs, but even that typically fails to address basic nutrition, which I believe is a key factor.

We know that the food choices of most children and adults today are incredibly poor, and how can you possibly expect a child to have normal behavior if he is eating refined grains, sugars, and chemical-laden processed foods that are largely devoid of nutrients? If your child struggles with emotional or behavioral difficulties—diagnosed with a mental disorder or not—I strongly recommend your addressing the following factors:

  • Too much sugar. Many studies have demonstrated the connection between a high-sugar diet and poor mental health. High sugar and starchy carbohydrates lead to excessive insulin release, which can result in falling blood sugar levels, or hypoglycemia. In turn, hypoglycemia causes your brain to secrete glutamate in levels that can cause agitation, depression, anger, anxiety, and panic attacks. Additionally, sugar fans the flames of chronic inflammation in your body.
  • Gluten sensitivity. The evidence is quite compelling that gluten sensitivity may be at the root of a number of neurological and psychiatric conditions, including ADHD. According to a 2011 study,9 celiac disease is "markedly overrepresented among patients presenting with ADHD," and a gluten-free diet has been shown to significantly improve behavior in children. The study went so far as to suggest celiac disease should be added to the ADHD symptom checklist.
  • Too few beneficial bacteria. As explained by Dr. Natasha Campbell-McBride, a medical doctor with a postgraduate degree in neurology, toxicity in your gut can flow throughout your body and into your brain, where it can cause symptoms of autism, ADHD, depression and numerous other mental disorders. Reducing gut inflammation is imperative when addressing mental health issues,10 so optimizing your child's gut flora is a critical step. There is even research underway to investigate whether Streptococcus bacteria, which cause strep throat, may also be responsible for OCD in children. To learn more, please see my previous article, "Are Probiotics the New Prozac?"
  • Inactivity. As previously mentioned, children are typically forced into very unhealthy and unnatural positions during the school day and are forced to remain seated. Typically young children are healthier than adults as their bodies haven't had years of abuse that many adults have. As a result, their body's still communicate clearly to them and tell them they need to get up and move to be healthy. When they listen to their body, they are not only reprimanded and told to sit down but drugged if they fail to comply. Ideally, children should be allowed access to stand-up desks and be allowed to move throughout the day.
  • Animal-sourced omega-3 deficiency. Research has shown that kids low in omega-3 fats are significantly more likely to be hyperactive, struggle with learning disorders, and display behavioral problems. Omega-3 deficiencies have also been linked to dyslexia, violence, and depression. In one study, fish oil was found to be more effective than Ritalin or Concerta for children with ADHD, and krill may be even more effective, as evidenced by other clinical studies. For example, a 2007 study11 examined the effects of krill oil on adults diagnosed with ADHD. By taking 500mg of krill for six months oil, this group experienced improvements in their ability to concentrate by more than 60 percent, their planning skills by 50 percent, and their social skills by nearly 49 percent.
  • Food additives and GMO ingredients. A number of food additives are thought to negatively affect mental health, and many have been banned in Europe. Potential culprits to avoid include Blue #1 and #2 food coloring; Green #3; Orange B; Red #3 and #40; Yellow #5 and #6; and sodium benzoate, a preservative. Recent research also shows that glyphosate, the active ingredient in Monsanto's herbicide Roundup which is used in large quantities on genetically engineered crops, limits your body's ability to detoxify foreign chemical compounds. As a result, the damaging effects of those toxins are magnified, potentially resulting in a wide variety of diseases, including brain disorders that have both psychological and behavioral effects.
  • EMF. Limit you and your child's exposure to radiofrequency microwave radiation, cell and portable phones, and electro-pollution. This is especially true for your sleeping environment where rest and repair occur.
  • Other Toxic Exposures. Avoid all known toxins as much as possible, such as MSG and artificial sweeteners including aspartame, mercury from "silver" amalgam fillings, and fluoride in the water supply, just to name a few.
Mental Health Challenges Require a Multi-Pronged Approach

Those who value drugs for your child's mental or behavioral problems do so primarily because they change behavior quickly (and if you have health insurance, for little cost). But while your child's behavior may be changed, he's learning that he is "sick" and in need of medication to act "normal." As illustrated in the documentary, many children come to depend on the drugs and, should they ever discontinue them, will lack the knowledge of how to effectively manage emotions and behaviors that have been masked by drugs.

Ultimately, this is a process that involves lifestyle changes combined with tools for learning new coping skills, sometimes with the help of a skilled therapist. Besides addressing your child's nutrition, as described above, I also recommend implementing the following strategies to help your child achieve optimal mental health:

  • Clear your house of dangerous pesticides and other commercial chemicals.
  • Avoid commercial washing detergents and cleaning products used on clothes, and replace them with naturally derived cleaning products free of added perfumes, softeners, etc.
  • Spend more time in nature. Researchers have found that exposing ADHD children to nature is an affordable, healthy way of controlling symptoms.
  • Exercise. Make sure your child gets plenty of exercise and outdoor playtime, remembering that midday sunlight provides the UVB wavelengths necessary to produce vitamin D3. Low vitamin D levels are associated with ADHD in children and adolescents.12 Exercise has also been found to significantly reduce the symptoms of ADHD, anxiety,13 OCD14 (obsessive compulsive disorder), depression, and other mental health issues.
  • Investigate sensory therapy and emotional wellness tools. Instead of looking for a quick fix, encourage kids to talk about their emotions. You may also want to consider energy psychology tools such as the Emotional Freedom Technique (EFT).
Give Your and Your Child the Gift of EFT

EFT (or "tapping") is a simple tool with powerful effects, and easy to learn by both adults and children. Recent research has shown that EFT significantly increases positive emotions, such as hope and enjoyment, and decreases negative emotional states, such as anger and shame. EFT has been shown to lower cortisol levels15 (one of your stress hormones), and can help your child "tap away" the stresses of his day.

EFT can also benefit you, as a parent, to cope with the stresses of having a challenged child. Studies show that parents of a child with a mental illness tend to have elevated stress hormone levels and are at increased risk of experiencing negative impacts to their own psychological health.16 Therefore, it's very important to address your own mental health needs if you are in this situation, and EFT is a great tool offering benefits for both you AND your child. Learning to regulate emotions helps children better manage their own moods and behaviors, improves self-esteem, and empowers them so that they feel and more "normal" and less stigmatized.

Ann Adams, Director of a rehabilitation center for emotionally disturbed children in Atlanta, Georgia, is one of the world's leading experts in using EFT with children. Through her work, she has found that even highly traumatized children from greatly disturbed homes usually respond amazingly well to EFT.17 You can learn the basics of tapping on your own and then teach the process to your kids, or you can recruit the help of a professional EFT practitioner. For more information, you can review the following resources that are specific to using EFT with children:

  • Ann Adams, tips for using EFT with children18
  • Article: "Teaching Your Kids to Tap" by Steve Wells19
  • Collection of tap-along videos by Brad Yates to help children learn EFT; Yates also has a children's tapping book, The Wizard's Wish20
  • Radio broadcast on EFT Radio entitled "Teaching Kids How to Overcome Anxiety," featuring Steve Wells and David Lake21
  • Short article about using EFT with children, "Helping Your Kids to Be Happy," Family Circle October 200322

The Burning Questions For 2015

Zerohedge - 16 hours 46 min ago
The Burning Questions For 2015

By Louis-Vincent Gave, Gavekal Dragonomics

With two reports a day, and often more, readers sometimes complain that keeping tabs on the thoughts of the various Gavekal analysts can be a challenge. So as the year draws to a close, it may be helpful if we recap the main questions confronting investors and the themes we strongly believe in, region by region.

1. A Chinese Marshall Plan?

When we have conversations with clients about China – which typically we do between two and four times a day – the talk invariably revolves around how much Chinese growth is slowing (a good bit, and quite quickly); how undercapitalized Chinese banks are (a good bit, but fat net interest margins and preferred share issues are solving the problem over time); how much overcapacity there is in real estate (a good bit, but – like youth – this is a problem that time will fix); how much overcapacity there is in steel, shipping, university graduates and corrupt officials; how disruptive China’s adoption of assembly line robots will be etc.

All of these questions are urgent, and the problems that prompted them undeniably real, which means that China’s policymakers certainly have their plates full. But this is where things get interesting: in all our conversations with Western investors, their conclusion seems to be that Beijing will have little choice but to print money aggressively, devalue the renminbi, fiscally stimulate the economy, and basically follow the path trail-blazed (with such success?) by Western policymakers since 2008. However, we would argue that this conclusion represents a failure both to think outside the Western box and to read Beijing’s signal flags.

In numerous reports (and in Chapters 11 to 14 of Too Different For Comfort) we have argued that the internationalization of the renminbi has been one of the most significant macro events of recent years. This internationalization is continuing apace: from next to nothing in 2008, almost a quarter of Chinese trade will settle in renminbi in 2014:

This is an important development which could have a very positive impact on a number of emerging markets. Indeed, a typical, non-oil exporting emerging market policymaker (whether in Turkey, the Philippines, Vietnam, South Korea, Argentina or India) usually has to worry about two things that are completely out of his control:

1)   A spike in the US dollar. Whenever the US currency shoots up, it presents a hurdle for growth in most emerging markets. The first reason is that most trade takes place in US dollars, so a stronger US dollar means companies having to set aside more money for working capital needs. The second is that most emerging market investors tend to think in two currencies: their own and the US dollar. Catch a cab in Bangkok, Cairo, Cape Town or Jakarta and ask for that day’s US dollar exchange rate and chances are that the driver will know it to within a decimal point. This sensitivity to exchange rates is important because it means that when the US dollar rises, local wealth tends to flow out of local currencies as investors sell domestic assets and into US dollar assets, typically treasuries (when the US dollar falls, the reverse is true).

2)   A rapid rise in oil or food prices. Violent spikes in oil and food prices can be highly destabilizing for developing countries, where the median family spends so much more of their income on basic necessities than the typical Western family. Sudden spikes in the price of food or energy can quickly create social and political tensions. And that’s not all; for oil-importing countries, a spike in oil prices can lead to a rapid deterioration in trade balances. These tend to scare foreign investors away, so pushing the local currency lower and domestic interest rates higher, which in turn leads to weaker growth etc...

Looking at these two concerns, it is hard to escape the conclusion that, as things stand, China is helping to mitigate both:

  • China’s policy of renminbi internationalization means that emerging markets are able gradually to reduce their dependence on the US dollar. As they do, spikes in the value of the US currency (such as we have seen in 2014) are becoming less painful.
     
  • The slowdown in Chinese oil demand, as well as China’s ability to capitalize on Putin’s difficulties to transform itself from a price-taker to a price-setter, means that the impact of oil and commodities on trade balances is much more contained.

Beyond providing stability to emerging markets, the gradual acceptance of the renminbi as a secondary trading and reserve currency for emerging markets has further implications. The late French economist Jacques Rueff showed convincingly how, when global trade moved from a gold-based settlement system to a US dollar-based system, purchasing power was duplicated. As the authors of a recent Wall Street Journal article citing Reuff’s work explained: “If the Banque de France counts among its reserves dollar claims (and not just gold and French francs) – for example a Banque de France deposit in a New York bank – this increases the money supply in France but without reducing the money supply of the US. So both countries can use these dollar assets to grant credit.” Replace Banque de France with Bank Indonesia, and US dollar with renminbi and the same causes will lead to the same effects.

Consider British Columbia’s recently issued AAA-rated two year renminbi dim sum bond. Yielding 2.85%, this bond was actively subscribed to by foreign central banks, which ended up receiving more than 50% of the initial allocation (ten times as much as in the first British Columbia dim sum issue two years ago). After the issue British Columbia takes the proceeds and deposits them in a Chinese bank, thereby capturing a nice spread. In turn, the Chinese bank can multiply this money five times over (so goes money creation in China). Meanwhile, the Indonesian, Korean or Kazakh central banks that bought the bonds now have an asset on their balance sheet which they can use to back an expansion of trade with China...

Of course, for trade to flourish, countries need to be able to specialize in their respective comparative advantages, hence the importance of the kind of free trade deals discussed at the recent APEC meeting. But free trade deals are not enough; countries also need trade infrastructure (ports, airports, telecoms, trade finance banks etc...). This brings us to China’s ‘new silk road’ strategy and the recent announcement by Beijing of a US$40bn fund to help finance road and rail infrastructure in the various ‘stans’ on its western borders in a development that promises to cut the travel time from China to Europe from the current 30 days by sea to ten days or less overland.

Needless to say, such a dramatic reduction in transportation time could help prompt some heavy industry to relocate from Europe to Asia.

That’s not all. At July’s BRICS summit in Brazil, leaders of the five member nations signed a treaty launching the US$50bn New Development Bank, which Beijing hopes will be modeled on China Development Bank, and is likely to compete with the World Bank. This will be followed by the establishment of a China-dominated BRICS contingency fund (challenging the International Monetary Fund). Also on the cards is an Asian Infrastructure Investment Bank to rival the Asian Development Bank.

So what looks likely to take shape over the next few years is a network of railroads and motorways linking China’s main production centers to Bangkok, Singapore, Karachi, Almaty, Moscow, Yangon, Kolkata. We will see pipelines, dams, and power plants built in Siberia, Central Asia, Pakistan and Myanmar; as well as airports, hotels, business centers... and all of this financed with China’s excess savings, and leverage. Given that China today has excess production capacity in all of these sectors, one does not need a fistful of university diplomas to figure out whose companies will get the pick of the construction contracts.

But to finance all of this, and to transform herself into a capital exporter, China needs stable capital markets and a strong, convertible currency. This explains why, despite Hong Kong’s pro-democracy demonstrations, Beijing is pressing ahead with the internationalization of the renminbi using the former British colony as its proving ground (witness the Shanghai-HK stock connect scheme and the removal of renminbi restrictions on Hong Kong residents). And it is why renminbi bonds have delivered better risk-adjusted returns over the past five years than almost any other fixed income market.

Of course, China’s strategy of internationalizing the renminbi, and integrating its neighbors into its own economy might fall flat on its face. Some neighbors bitterly resent China’s increasing assertiveness. Nonetheless, the big story in China today is not ‘ghost cities’ (how long has that one been around?) or undercapitalized banks. The major story is China’s reluctance to continue funneling its excess savings into US treasuries yielding less than 2%, and its willingness to use that capital instead to integrate its neighbors’ economies with its own; using its own currency and its low funding costs as an ‘appeal product’ (and having its own companies pick up the contracts as a bonus). In essence, is this so different from what the US did in Europe in the 1940s and 1950s with the Marshall Plan?

2. Japan: Is Abenomics just a sideshow?

With Japan in the middle of a triple dip recession, and Japanese households suffering a significant contraction in real disposable income, it might seem that Prime Minister Shinzo Abe has chosen an odd time to call a snap election. Three big factors explain his decision:

1)   The Japanese opposition is in complete disarray. So Abe’s decision may primarily have been opportunistic.

2)   We must remember that Abe is the most nationalist prime minister Japan has produced in a generation. The expansion of China’s economic presence across Central and South East Asia will have left him feeling at least as uncomfortable as anyone who witnessed his Apec handshake with Xi Jinping three weeks ago. It is not hard to imagine that Abe returned from Beijing convinced that he needs to step up Japan’s military development; a policy that requires him to command a greater parliamentary majority than he holds now.

3)   The final factor explaining Abe’s decision to call an election may be that in Japan the government’s performance in opinion polls seems to mirror the performance of the local stock market (wouldn’t Barack Obama like to see such a correlation in the US?). With the Nikkei breaking out to new highs, Abe may feel that now is the best time to try and cement his party’s dominant position in the Diet.

As he gets ready to face the voters, how should Abe attempt to portray himself? In our view, he could do worse than present himself as Japan Inc’s biggest salesman. Since the start of his second mandate, Abe has visited 49 countries in 21 months, and taken hundreds of different Japanese CEOs along with him for the ride. The message these CEOs have been spreading is simple: Japan is a very different place from 20 years ago. Companies are doing different things, and investment patterns have changed. Many companies have morphed into completely different animals, and are delivering handsome returns as a result. The relative year to date outperformances of Toyo Tire (+117%), Minebea (+95%), Mabuchi (+57%), Renesas (+43%), Fuji Film (+33%), NGK Insulators (+33%) and Nachi-Fujikoshi (+19%) have been enormous. Or take Panasonic as an example: the old television maker has transformed itself into a car parts firm, piggy-backing on the growth of Tesla’s model S.

Yet even as these changes have occurred, most foreign investors have stopped visiting Japan, and most sell-side firms have stopped funding genuine and original research. For the alert investor this is good news. As the number of Japanese firms at the heart of the disruptions reshaping our global economy – robotics, electric and self-driving cars, alternative energy, healthcare, care for the elderly – continues to expand, and as the number of investors looking at these same firms continues to shrink, those investors willing to sift the gravel of corporate Japan should be able to find real gems.

Which brings us to the real question confronting investors today: the ‘Kuroda put’ has placed Japanese equities back on investor’s maps. But is this just a short term phenomenon? After all, no nation has ever prospered by devaluing its currency. If Japan is set to attract, and retain, foreign investor flows, it will have to come up with a more compelling story than ‘we print money faster than anyone else’.

In our recent research, we have argued that this is exactly what is happening. In fact, we believe so much in the opportunity that we have launched a dedicated Japan corporate research service (GK Plus Alpha) whose principals (Alicia Walker and Neil Newman) are burning shoe leather to identify the disruptive companies that will trigger Japan’s next wave of growth.

3. Should we worry about capital misallocation in the US?

The US has now ‘enjoyed’ a free cost of money for some six years. The logic behind the zero-interest rate policy was simple enough: after the trauma of 2008, the animal spirits of entrepreneurs needed to be prodded back to life. Unfortunately, the last few years have reminded everyone that the average entrepreneur or investor typically borrows for one of two reasons:

  • Capital spending: Business is expanding, so our entrepreneur borrows to open a new plant, or hire more people, etc.
     
  • Financial engineering: The entrepreneur or investor borrows in order to purchase an existing cash flow, or stream of income. In this case, our borrower calculates the present value of a given income stream, and if this present value is higher than the cost of the debt required to own it, then the transaction makes sense.

Unfortunately, the second type of borrowing does not lead to an increase in the stock of capital. It simply leads to a change in the ownership of capital at higher and higher prices, with the ownership of an asset often moving away from entrepreneurs and towards financial middlemen or institutions. So instead of an increase in an economy’s capital stock (as we would get with increased borrowing for capital spending), with financial engineering all we see is a net increase in the total amount of debt and a greater concentration of asset ownership. And the higher the debt levels and ownership concentration, the greater the system’s fragility and its inability to weather shocks.

We are not arguing that financial engineering has reached its natural limits in the US. Who knows where those limits stand in a zero interest rate world? However, we would highlight that the recent new highs in US equities have not been accompanied by new lows in corporate spreads. Instead, the spread between 5-year BBB bonds and 5-year US treasuries has widened by more than 30 basis points since this summer.

Behind these wider spreads lies a simple reality: corporate bonds issued by energy sector companies have lately been taken to the woodshed. In fact, the spread between the bonds of energy companies, and those of other US corporates are back at highs not seen since the recession of 2001-2002, when the oil price was at US$30 a barrel.

The market’s behavior raises the question whether the energy industry has been the black hole of capital misallocation in the era of quantitative easing. As our friend Josh Ayers of Paradarch Advisors (Josh publishes a weekly entitled The Right Tale, which is a fount of interesting ideas. He can be reached at josh@paradarchadvisors.com) put it in a recent note: “After surviving the resource nadir of the late 1980s and 1990s, oil and gas firms started pumping up capex as the new millennium began. However, it wasn’t until the purported end of the global financial crisis in 2009 that capital expenditure in the oil patch went into hyperdrive, at which point capex from the S&P 500’s oil and gas subcomponents jumped from roughly 7% of total US fixed investment to over 10% today.”

“It’s no secret that a decade’s worth of higher global oil prices justified much of the early ramp-up in capex, but a more thoughtful look at the underlying data suggests we’re now deep in the malinvestment phase of the oil and gas business cycle. The second chart (above) displays both the total annual capex and the return on that capex (net income/capex) for the ten largest holdings in the Energy Select Sector SPDR (XLE). The most troublesome aspect of this chart is that, since 2010, returns have been declining as capex outlays are increasing. Furthermore, this divergence is occurring despite WTI crude prices averaging nearly $96 per barrel during that period,” Josh noted.

The energy sector may not be the only place where capital has been misallocated on a grand scale. The other industry with a fairly large target on its back is the financial sector. For a start, policymakers around the world have basically decided that, for all intents and purposes, whenever a ‘decision maker’ in the financial industry makes a decision, someone else should be looking over the decision maker’s shoulder to ensure that the decision is appropriate. Take HSBC’s latest results: HSBC added 1400 compliance staff in one quarter, and plans to add another 1000 over the next quarter. From this, we can draw one of two conclusions:

1)   The financial firms that will win are the large firms, as they can afford the compliance costs.

2)   The winners will be the firms that say: “Fine, let’s get rid of the decision maker. Then we won’t need to hire the compliance guy either”.

This brings us to a theme first explored by our friend Paul Jeffery, who back in September wrote: “In 1994 Bill Gates observed: ‘Banking is necessary, banks are not’. The primary function of a bank is to bring savers and users of capital together in order to facilitate an exchange. In return for their role as [trusted] intermediaries banks charge a generous net spread. To date, this hefty added cost has been accepted by the public due to the lack of a credible alternative, as well as the general oligopolistic structure of the banking industry. What Lending Club and other P2P lenders do is provide an online market-place that connects borrowers and lenders directly; think the eBay of loans and you have the right conceptual grasp. Moreover, the business model of online market-place lending breaks with a banking tradition, dating back to 14th century Florence, of operating on a “fractional reserve” basis. In the case of P2P intermediation, lending can be thought of as being “fully reserved” and entails no balance sheet risk on the part of the service facilitator. Instead, the intermediary receives a fee- based revenue stream rather than a spread-based income.”

There is another way we can look at it: finance today is an abnormal industry in two important ways:

1)   The more the sector spends on information and communications technology, the bigger a proportion of the economic pie the industry captures. This is a complete anomaly. In all other industries (retail, energy, telecoms...), spending on ICT has delivered savings for the consumers. In finance, investment in ICT (think shaving seconds of trading times in order to front run customer orders legally) has not delivered savings for consumers, nor even bigger dividends for shareholders, but fatter bonuses and profits for bankers.

2)   The second way finance is an abnormal industry (perhaps unsurprisingly given the first factor) lies in the banks’ inability to pass on anything of value to their customers, at least as far as customer’s perceptions are concerned. Indeed, in ‘brand surveys’ and ‘consumer satisfaction reports’, banks regularly bring up the rear. Who today loves their bank in a way that some people ‘love’ Walmart, Costco, IKEA, Amazon, Apple, Google, Uber, etc?

Most importantly, and as Paul highlights above, if the whole point of the internet is to:

a) measure more efficiently what each individual needs, and

b) eliminate unnecessary intermediaries,

then we should expect a lot of the financial industry’s safe and steady margins to come under heavy pressure. This has already started in the broking and in the money management industries (where mediocre money managers and other closet indexers are being replaced by ETFs). But why shouldn’t we start to see banks’ high return consumer loan, SME loan and credit card loan businesses replaced, at a faster and faster pace, by peer-to-peer lending? Why should consumers continue to pay high fees for bank transfers, or credit cards when increasingly such services are offered at much lower costs by firms such as TransferWise, services like Alipay and Apple Pay, or simply by new currencies such as Bitcoin? On this point, we should note that in the 17 days that followed the launch of Apple Pay on the iPhone 6, almost 1% of Wholefoods’ transactions were processed using the new payment system. The likes of Apple, Google, Facebook and Amazon have grown into behemoths by upending the media, advertising retail and entertainment industries. Such a rapid take- up rate for Apple Pay is a powerful indicator which sector is likely to be next in line. How else can these tech giants keep growing and avoid the fate that befell Sony, Microsoft and Nokia? On their past record, the technology companies will find margins, and growth, in upending our countries’ financial infrastructure. As they do, a lot of capital (both human and monetary) deployed in the current infrastructure will find itself obsolete.

This possibility raises a number of questions – not least for Gavekal’s own investment process, which relies heavily on changes in the velocity of money and in the willingness and ability of commercial banks to multiply money, to judge whether it makes sense to increase portfolio risk. What happens to a world that moves ‘ex-bank’ and where most new loans are extended peer-to-peer? In such a world, the banking multiplier disappears along with fractional reserve banking (and consequently the need for regulators? Dare to dream...). As bankers stop lending their clients umbrellas when it is sunny, and taking them away when it rains, will our economic cycles become much tamer? As central banks everywhere print money aggressively, could the market be in the process of creating currencies no longer based on the borders of nation states, but instead on the cross-border networks of large corporations (Alipay, Apple Pay...), or even on voluntary communities (Bitcoin). Does this mean we are approaching the Austrian dream of a world with many, non government-supported, currencies?

4. Should we care about Europe?

In our September Quarterly Strategy Chartbook, we debated whether the eurozone was set for a revival (the point expounded by François) or a continued period stuck in the doldrums (Charles’s view), or whether we should even care (my point). At the crux of this divergence in views is the question whether euroland is broadly following the Japanese deflationary bust path. Pointing to this possibility are the facts that 11 out of 15 eurozone countries are now registering annual year-on-year declines in CPI, that policy responses have so far been late, unclear and haphazard (as they were in Japan), and that the solutions mooted (e.g. European Commission president Jean-Claude Juncker’s €315bn infrastructure spending plan) recall the solutions adopted in Japan (remember all those bridges to nowhere?). And that’s before going into the structural parallels: ageing populations; dysfunctional, undercapitalized and overcrowded banking systems; influential segments of the population eager to maintain the status quo etc...

With the same causes at work, should we expect the same consequences? Does the continued underperformance of eurozone stocks simply reflect that managing companies in a deflationary environment is a very challenging task? If euroland has really entered a Japanese-style deflationary bust likely to extend years into the future, the conclusion almost draws itself.

The main lesson investors have learned from the Japanese experience of 1990-2013 is that the only time to buy stocks in an economy undergoing a deflationary bust is:

a)   when stocks are massively undervalued relative both to their peers and to their own history, and

b)   when a significant policy change is on the way.

This was the situation in Japan in 1999 (the first round of QE under PM Keizo Obuchi), 2005 (PM Junichiro Koizumi’s bank recapitalization program) and of course in 2013-14 (Abenomics). Otherwise, in a deflationary environment with no or low growth, there is no real reason to pile into equities. One does much better in debt. So, if the Japan-Europe parallel runs true, it only makes sense to look at eurozone equities when they are both massively undervalued relative to their own histories and there are expectations of a big policy change. This was the case in the spring of 2012 when valuations were at extremes, and Mario Draghi replaced Jean-Claude Trichet as ECB president. In the absence of these two conditions, the marginal dollar looking for equity risk will head for sunnier climes.

With this in mind, there are two possible arguments for an exposure to eurozone equities:

1)   The analogy of Japan is misleading as euroland will not experience a deflationary bust (or will soon emerge from deflation).

2)   We are reaching the point when our two conditions – attractive valuations, combined with policy shock and awe – are about to be met. Thus we could be reaching the point when euroland equities start to deliver outsized returns.

Proponents of the first argument will want to overweight euroland equities now, as this scenario should lead to a rebound in both the euro and European equities (so anyone underweight in their portfolios would struggle). However, it has to be said that the odds against this first outcome appear to get longer with almost every data release!

Proponents of the second scenario, however, can afford to sit back and wait, because it is likely any outperformance in eurozone equities would be accompanied by euro currency weakness. Hence, as a percentage of a total benchmark, European equities would not surge, because the rise in equities would be offset by the falling euro.

Alternatively, investors who are skeptical about either of these two propositions can – like us – continue to use euroland as a source of, rather than as a destination for, capital. And they can afford safely to ignore events unfolding in euroland as they seek rewarding investment opportunities in the US or Asia. In short, over the coming years investors may adopt the same view towards the eurozone that they took towards Japan for the last decade: ‘Neither loved, nor hated... simply ignored’.

Conclusion:

Most investors go about their job trying to identify ‘winners’. But more often than not, investing is about avoiding losers. Like successful gamblers at the racing track, an investor’s starting point should be to eliminate the assets that do not stand a chance, and then spread the rest of one’s capital amongst the remainder.

For example, if in 1981 an investor had decided to forego investing in commodities and simply to diversify his holdings across other asset classes, his decision would have been enough to earn himself a decade at the beach. If our investor had then returned to the office in 1990, and again made just one decision – to own nothing in Japan – he could once again have gone back to sipping margaritas for the next ten years. In 2000, the decision had to be not to own overvalued technology stocks. By 2006, our investor needed to start selling his holdings in financials around the world. And by 2008, the money-saving decision would have been to forego investing in euroland.

Of course hindsight is twenty-twenty, and any investor who managed to avoid all these potholes would have done extremely well. Nevertheless, the big question confronting investors today is how to avoid the potholes of tomorrow. To succeed, we believe that investors need to answer the following questions:

  • Will Japan engineer a revival through its lead in exciting new technologies (robotics, hi-tech help for the elderly, electric and driverless cars etc...), or will Abenomics prove to be the last hurrah of a society unable to adjust to the 21st century? Our research is following these questions closely through our new GK Plus Alpha venture.
     
  • Will China slowly sink under the weight of the past decade’s malinvestment and the accompanying rise in debt (the consensus view) or will it successfully establish itself as Asia’s new hegemon? Our Beijing based research team is very much on top of these questions, especially Tom Miller, who by next Christmas should have a book out charting the geopolitical impact of China’s rise.
     
  • Will Indian prime minister Narendra Modi succeed in plucking the low-hanging fruit so visible in India, building new infrastructure, deregulating services, cutting protectionism, etc? If so, will India start to pull its weight in the global economy and financial markets?
     
  • How will the world deal with a US economy that may no longer run current account deficits, and may no longer be keen to finance large armies? Does such a combination not almost guarantee the success of China’s strategy?
     
  • If the US dollar is entering a long term structural bull market, who are the winners and losers? The knee-jerk reaction has been to say ‘emerging markets will be the losers’ (simply because they were in the past. But the reality is that most emerging markets have large US dollar reserves and can withstand a strong US currency. Instead, will the big losers from the US dollar be the commodity producers?
     
  • Have we reached ‘peak demand’ for oil? If so, does this mean that we have years ahead of us in which markets and investors will have to digest the past five years of capital misallocation into commodities?
     
  • Talking of capital misallocation, does the continued trend of share buybacks render our financial system more fragile (through higher gearing) and so more likely to crack in the face of exogenous shocks? If it does, one key problem may be that although we may have made our banks safer through increased regulations (since banks are not allowed to take risks anymore), we may well have made our financial markets more volatile (since banks are no longer allowed to trade their balance sheets to benefit from spikes in volatility). This much appeared obvious from the behavior of US fixed income markets in the days following Bill Gross’s departure from PIMCO. In turn, if banks are not allowed to take risks at volatile times, then central banks will always be called upon to act, which guarantees more capital misallocation, share buybacks and further fragilization of the system (expect more debates along this theme between Charles, and Anatole).
     
  • Will the financial sector be next to undergo disintermediation by the internet (after advertising and the media). If so, what will the macro- consequences be? (Hint: not good for the pound or London property.)
     
  • Is euroland following the Japanese deflationary-bust roadmap?

The answers to these questions will drive performance for years to come. In the meantime, we continue to believe that a portfolio which avoids a) euroland, b) banks, and c) commodities, will do well – perhaps well enough to continue funding Mediterranean beach holidays – especially as these are likely to go on getting cheaper for anyone not earning euros!

*  *  *

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Gun Violence In America (In 6 Uncomfortable Charts)

Zerohedge - Fri, 12/19/2014 - 23:25

A recent report, The Annual Review of Public Health, summarizes the basic facts of firearm violence, a large and costly public health problem in the United States for which the mortality rate has remained unchanged for more than a decade. It presents findings for the present in light of recent trends. Risk for firearm violence varies substantially across demographic subsets of the population and between states in patterns that are quite different for suicide and homicide. Suicide is far more common than homicide and its rate is increasing; the homicide rate is decreasing. As with other important health problems, most cases of fatal firearm violence arise from large but low-risk subsets of the population; risk and burden of illness are not distributed symmetrically. Compared with other industrialized nations, the United States has uniquely high mortality rates from firearm violence.

SUMMARY POINTS

1. The overall fatality rate from firearm violence has not changed in more than a decade.

2. Suicide is the most common form of fatal firearm violence (64.0% of deaths in 2012) and is increasing. Homicide is decreasing.

 

3. Homicide risk is concentrated to a remarkable degree among Black males through much of the life span. Mortality rates from firearm violence are very high and unchanged in this group.

 

4. Suicide risk is highest among White males beginning in adolescence. They also account for most fatalities from firearm violence and have increasing mortality rates.

5. As compared with other industrialized nations, the United States has low rates of assaultive violence...

 

...but uniquely high mortality rates from firearm homicide and suicide.

 

Full report can be found here (PDF)








Russia can bring West down any time, Roberts tells KWN

GATA - Fri, 12/19/2014 - 22:52

9:55p ET Friday, December 19, 2014

Dear Friend of GATA and Gold:

Russia can bring the Western financial system down any time it wants to with a couple of policy changes, former Assistant U.S. Treasury Secretary Paul Craig Roberts tells King World News today:

http://kingworldnews.com/paul-craig-roberts-russia-unleash-ultimate-blac...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

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Vancouver Convention Centre West
1055 Canada Place, Vancouver, British Columbia, Cananda
Sunday-Monday, January 18-19,2015

http://cambridgehouse.com/event/33/vancouver-resource-investment-confere...

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