6/20/2012 - QE3: Federal Reserve to Start Pumping

Source: CNBC
The U.S. central bank will most likely ease monetary policy when it meets this week as recent data point to a worsening labor market and the crisis in Europe intensifies, Goldman Sachs said.

The Federal Open Market Committee will likely say it would buy assets such as mortgage-backed securities and U.S. Treasurys when it meets for a two-day meeting starting Tuesday, Jan Hatzius, the investment bank’s Chief U.S. Economist said in a report on Monday.

“We would be quite surprised if we saw no easing this week,” Hatzius wrote in the report.

The Federal Reserve may also extend Operation Twist, he added, although he does not find the “strategy very attractive.” The program – which involves the Fed selling medium-term bonds and using the proceeds to buy longer-term ones, such as 10-year Treasurys, effectively driving down longer-term interest rates – runs out at the end of June.

“We believe that an extension of Operation Twist could well be insufficient on its own and could thus be followed by additional easing action before long,” Hatzius said.

Instead, a “sufficiently large program” that involves mortgage-backed securities would help, he said, adding that while “it is unlikely to be very powerful, that doesn't mean Fed officials shouldn't do it.”

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6/20/2012 - The Biggest Myth Preventing an Economic Recovery

Source: WashingtonsBlog 

The Widespread Economic Myths Destroying the Economy

There are many widespread myths preventing an economic recovery, including the following myths:

• Military spending stimulates the economy

• The banks are acting more conservatively now than before the financial crisis

• We’ve got to prop up the big banks

• We’ve got to protect the bondholders against suffering big losses

• The government has prosecuted the financial fraud which it has discovered, butit’s hard to make out a case against most of Wall Street’s acts

• The economy always returns to equilibrium and stability by itself

Obama’s belief that unemployment is good for the economy, and Greenspan’s belief thattoo little debt is bad for the country are also ridiculous.But the most dangerous myth – because a lot of economic policy is based upon it, and because so few know that it is false – is the myth about how banks make loans.The Myth that Private Debt Doesn’t MatterBefore we can address the myth about how banks make loans – and as a way to understand the deadly effect of that misconception, we need to talk about debt.As economics professor Steve Keen documents in his must-read book, Debunking Economics: The Naked Emperor Dethroned, mainstream  economists – from both the left and the right – don’t even take debt into consideration in their models of what makes for healthy economies.As Keen noted in September:

The vast majority of economists were taken completely by surprise by this crisis—including not just … the ubiquitous “market economists” that pepper the evening news, but the big fish of academic, professional and regulatory economics as well.***Why did conventional economists not see this crisis coming, while I and a handful of non-orthodox economists did [?] Because we focus upon the role of private debt, while they, for three main reasons, ignore it:***They believed that the level of private debt—and therefore also its rate of change—had no major macroeconomic significance:***Finally, the most remarkable reason of all is that debt, money and the financial system itself play no role in conventional neoclassical economic models. Many non-economists expect economists to be experts on money, but the belief that money is merely a “veil over barter”—and that therefore the economy can be modeled without taking into account money and how it is created—is fundamental to neoclassical economics. Only economic dissidents from other schools of thought … take money seriously, and only a handful of them—including myself (Steve Keen, 2010; http://www.economics-ejournal.org/economics/journalarticles/2010-31)—formally model money creation in their macroeconomics.Even the most “avant-garde” of neoclassical economists … have only just begun to consider the role that debt might play in the economy ….

In other words, most economists think that debt – and our money system – don’t matter.(Don’t freak out … this essay does not argue for ruthless austerity for Mom and Pop on Main Street.  Virtually all of the economists we quote  stress that the bondholders bad debt must be written down. And this post also focuses on private – rather than public – debt.)For example, The economists who have the most influence over government policy – such as Ben Bernanke and Paul Krugman – think that the amount of private debt is  totally irrelevant to the health of the economy:

Fisher’s idea was less influential in academic circles, though, because of the counterargument that debt-deflation represented no more than a redistribution from one group (debtors) to another (creditors). Absent implausibly large differences in marginal spending propensities among the groups, it was suggested, pure redistributions should have no significant macro-economic effects… (Bernanke 2000, p. 24)

***Ignoring the foreign component, or looking at the world as a whole, the overall level of debt makes no difference to aggregate net worth — one person’s liability is another person’s asset…

In what follows, we begin by setting out a flexible-price endowment model in which “impatient” agents borrow from “patient” agents, but are subject to a debt limit. If this debt limit is, for some reason, suddenly reduced, the impatient agents are forced to cut spending… (Krugman and Eggertsson 2010, p. 3)

***People think of debt’s role in the economy as if it were the same as what debt means for an individual: there’s a lot of money you have to pay to someone else. But that’s all wrong; the debt we create is basically money we owe to ourselves, and the burden it imposes does not involve a real transfer of resources.

That’s not to say that high debt can’t cause problems — it certainly can. But these are problems of distribution and incentives, not the burden of debt as is commonly understood. (Krugman 2011)

Specifically, Bernanke and Krugman assume that huge levels of household debt don’t hurt the economy because more debt among households just means that savers have loaned them money … i.e. that it is a net wash to the economy.To make this assumption, they rely on the myth that banks can only loan as much money out as they have in deposits.  In other words, they assume that if bank customer John Doe has $100 in the bank, then the bank can loan that $100 to someone else.But as Keen notes, banks actually loan out money whether or not they have enough in deposits … and then borrow the shortfall from the Fed or other sources.Keen therefore says that it is not a wash … and that high levels of private debt are the cause of the current economic crisis.I wrote to L. Randall Wray to get his view on who is right.  Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City. Wray is one of the country’s top experts on money creation.Wray is the author of Money and Credit in Capitalist Economies, 1990, andUnderstanding Modern Money: The Key to Full Employment and Price Stability, 1998. He is also coeditor of, and a contributor to, Money, Financial Instability, and Stabilization Policy, 2006, and Keynes for the 21st Century: The Continuing Relevance of The General Theory, 2008.I asked Wray:

As you might have heard – Paul Krugman argues that banks only loan out based upon their deposits, while Steve Keen argues that loans are created through double entry bookkeeping, so that money is created endogenously [i.e. banks create their own money].For example, here is Scott Fullwiler’s (Associate Professor of Economics and James A. Leach Chair in Banking and Monetary Economics at Wartburg College) take on the debate:http://www.nakedcapitalism.com/2012/04/scott-fullwiler-krugmans-flashing-neon-sign.html Or summary here:http://unlearningeconomics.wordpress.com/2012/04/03/the-keenkrugman-debate-a-summary/As a leading expert on modern monetary theory, who do you think is right? Do banks need deposits before they can lend … or do they lend regardless of deposits, and only bounded by reserve and capital requirements (or access to Fed monies)?

Wray responded:

Bank deposits are bank IOUs; an IOU can only come from the issuer. Where do your IOUs come from? Do you borrow them? NO. [Professor] Scott [Fullwiler] is right, Krugman does not know what he is talking about.

Indeed, economics professor and money expert Fullwiler says that Krugman should wear a flashing neon sign saying “I don’t know what I’m talking about”, and explains:

As is well known, and by the logic of double-entry accounting, the bank does make a loan out of thin air—no prior deposits or reserves necessary.***[Krugman writes:]

And currency is in limited supply — with the limit set by Fed decisions.

This statement is simply mindboggling. It’s so wrong I don’t know where to begin. The Fed NEVER limits the supply of currency. Never. Ever. To do otherwise would be to violate its mandate in the Federal Reserve Act to provide for an elastic currency and maintain stability of the payments system.

Economics professor Michael Hudson also slams Krugman for having a blindspot on debt:

Mr. Krugman’s failure to see today’s economic problem as one of debt deflation reflects his failure (suffered by most economists, to be sure) to recognize the need for debt writedowns, for restructuring the banking and financial system, and for shifting taxes off labor back onto property, economic rent and asset-price (“capital”) gains. The effect of his narrow set of recommendations is to defend the status quo – and for my money, despite his reputation as a liberal, that makes Mr. Krugman a conservative. I see little in his logic that would oppose Rubinomics, which has remained the Democratic Party’s program under the Obama administration.***Mr. Krugman got lost in the black hole of banking, finance and international trade theory that has engulfed so many neoclassical and old-style Keynesian economists. Last month Mr. Krugman insisted that banks do not create credit, except by borrowing reserves that (in his view) merely shifts lending savings from wealthy people to those with a higher propensity to consume. Criticizing Steve Keen (who has just published a second edition of his excellent Debunking Economics to explain the dynamics of endogenous money creation), he wrote:

Keen then goes on to assert that lending is, by definition (at least as I understand it), an addition to aggregate demand. I guess I don’t get that at all. If I decide to cut back on my spending and stash the funds in a bank, which lends them out to someone else, this doesn’t have to represent a net increase in demand. Yes, in some (many) cases lending is associated with higher demand, because resources are being transferred to people with a higher propensity to spend; but Keen seems to be saying something else, and I’m not sure what. I think it has something to do with the notion that creating money = creating demand, but again that isn’t right in any model I understand.Keen says that it’s because once you include banks, lending increases the money supply. OK, but why does that matter? He seems to assume that aggregate demand can’t increase unless the money supply rises, but that’s only true if the velocity of money is fixed;

But “velocity” is just a dummy variable to “balance” any given equation – a tautology, not an analytic tool. As a neoclassical economist, Mr. Krugman is unwilling to acknowledge that banks not only create credit; in doing so, they create debt. That is the essence of balance sheet accounting. But … Krugman offers the mythology of banks that can only lend out money taken in from depositors (as though these banks were good old-fashioned savings banks or S&Ls, not what Mr. Keen calls “endogenous money creators”). Banks create deposits electronically in the process of making loans.***Said Krugman:

First of all, any individual bank does, in fact, have to lend out the money it receives in deposits. Bank loan officers can’t just issue checks out of thin air; like employees of any financial intermediary, they must buy assets with funds they have on hand.***There are vehement denials of the proposition that banks’ lending is limited by their deposits, or that the monetary base plays any important role; banks, we’re told, hold hardly any reserves (which is true), so the Fed’s creation or destruction of reserves has no effect.

***The problem with Mr. Krugman’s analysis is that bank debt creation plays no analytic role in Mr. Krugman’s proposals to rescue the economy. It is as if the economy operates without wealth or debt, simply on the basis of spending power flowing into the economy from the government, and being spent on consumer goods, investment goods and taxes – not on debt service, pension fund set-asides or asset price inflation. If the government will spend enough – run up a large enough deficit to pump money into the spending stream, Keynesian-style – the economy can revive by enough to “earn its way out of debt.” The assumption is that the government will revive the economy on a broad enough scale to enable the individuals who owe the mortgages, student loans and other debts – and presumably even the states and localities that have fallen behind in their pension plan funding – to “catch up.”Without recognizing the role of debt and taking into account the magnitude of negative equity and earnings shortfalls, one cannot see that what is preventing American industry from exporting more is the heavy debt overhead that diverts income to pay the Finance, Insurance and Real Estate (FIRE) sector. How can U.S. labor compete with foreign labor when employees and their employers are obliged to pay such high mortgage debt for its housing, such high student debt for its education, such high medical insurance and Social Security (FICA withholding), such high credit-card debt – all this even before spending on goods and services?In fact, how can wage earners even afford to buy what they produce?

Banks DO, In Fact, Create Money Out of Thin AirIf you’re still not convinced that banks create money out of thin air, without regard to whether or not they have deposits on hand, please note that the Fed has said as much.For example, a 1960s Chicago Federal Reserve Bank booklet entitled “Modern Money Mechanics” said:

[Banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts.

Moreover:

(1) William C. Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, said in a speech in July 2009:

Based on how monetary policy has been conducted for several decades, banks have always had the ability to expand credit whenever they like. They don’t need a pile of “dry tinder” in the form of excess reserves to do so. That is because the Federal Reserve has committed itself to supply sufficient reserves to keep the fed funds rate at its target. If banks want to expand credit and that drives up the demand for reserves, the Fed automatically meets that demand in its conduct of monetary policy. In terms of the ability to expand credit rapidly, it makes no difference.

(2) On February 10, 2010, Ben Bernanke proposed the elimination of allreserve requirements:

The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.

Under the current fractional reserve banking system, banks can loan out many times reserves. But even that system is being turned into a virtually infinite printing press for banks.Germany’s central bank – the Deutsche Bundesbank (German for German Federal Bank) – has also admitted in writing that banks create credit out of thin air.And there’s an overwhelming amount of additional proof:

As PhD economist Steve Keen pointed out recently, 2 Nobel-prize winning economists have shown that the assumption that reserves are created from excess deposits is not true:

The model of money creation that Obama’s economic advisers have sold him was shown to be empirically false over three decades ago.The first economist to establish this was the American Post Keynesian economist Basil Moore, but similar results were found by two of the staunchest neoclassical economists, Nobel Prize winners Kydland and Prescott in a 1990 paper Real Facts and a Monetary Myth.Looking at the timing of economic variables, they found that credit money was created about 4 periods before government money. However, the “money multiplier” model argues that government money is created first to bolster bank reserves, and then credit money is created afterwards by the process of banks lending out their increased reserves.Kydland and Prescott observed at the end of their paper that:Introducing money and credit into growth theory in a way that accounts for the cyclical behavior of monetary as well as real aggregates is an important open problem in economics.

In other words, if the conventional view that excess reserves (stemming either from customer deposits or government infusions of money) lead to increased lending were correct, then Kydland and Prescott would have found that credit is extended by the banks (i.e. loaned out to customers) after the banks received infusions of money from the government. Instead, they found that the extension of credit preceded the receipt of government monies.Keen explained in an interview Friday that 25 years of research shows that creation of debt by banks precedes creation of government money, and that debt money is created first and precedes creation of credit money.As Mish has previously noted:

Conventional wisdom regarding the money multiplier is wrong. Australian economist Steve Keen notes that in a debt based society, expansion of credit comes first and reserves come later.

This angle of the banking system has actually been discussed for many years by leading experts:“The process by which banks create money is so simple that the mind is repelled.”
- Economist John Kenneth Galbraith“[W]hen a bank makes a loan, it simply adds to the borrower’s deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposit; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.“
- Robert B. Anderson, Secretary of the Treasury under Eisenhower, in an interview reported in the August 31, 1959 issue of U.S. News and World Report“Do private banks issue money today? Yes. Although banks no longer have the right to issue bank notes, they can create money in the form of bank deposits when they lend money to businesses, or buy securities. . . . The important thing to remember is that when banks lend money they don’t necessarily take it from anyone else to lend. Thus they ‘create’ it.”
-Congressman Wright Patman, Money Facts (House Committee on Banking and Currency, 1964)“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented.”
- Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920s.“Banks create money. That is what they are for. . . . The manufacturing process to make money consists of making an entry in a book. That is all. . . . Each and every time a Bank makes a loan . . . new Bank credit is created — brand new money.”
- Graham Towers, Governor of the Bank of Canada from 1935 to 1955.

I’ve also noted:

In First National Bank v. Daly (often referred to as the “Credit River” case) the court found that the bank created money “out of thin air”:

[The president of the First National Bank of Montgomery] admitted that all of the money or credit which was used as a consideration [for the mortgage loan given to the defendant] was created upon their books, that this was standard banking practice exercised by their bank in combination with the Federal Reserve Bank of Minneaopolis, another private bank, further that he knew of no United States statute or law that gave the Plaintiff [bank] the authority to do this.

The court also held:

The money and credit first came into existence when they [the bank] created it.

(Here’s the case file).Justice courts are just local courts, and not as powerful or prestigious as state supreme courts, for example. And it was not a judge, but a justice of the peace who made the decision.But what is important is that the president of the First National Bank of Montgomery apparently admitted that his bank created money by simply making an entry in its book …

Moreover, although it is counter-intuitive, virtually all money is actually created as debt. For example, in a hearing held on September 30, 1941 in the House Committee on Banking and Currency, then-Chairman of the Federal Reserve (Mariner S. Eccles) said:

That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.

And Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, said:

If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.

Indeed, even Paul Krugman admits that “banks can create inside money”. Inside money is “debt that is used as money”.Why Is The Myth About Banks So Dangerous?Even if banks don’t really loan based on their deposits and reserves, who cares? Why is this such a dangerous myth?Because, if banks don’t make loans based on available deposits or reserves, that means:

(1) This was never a liquidity crisis, but rather a solvency crisis. In other words, it was not a lack of available liquid funds which got the banks in trouble, it was the fact that they speculated and committed fraud, so that their liabilities far exceeded their assets. The government has been fighting the wrong battle, and has made the economic situation worse.(2) The giant banks are not needed, as the federal, state or local governments or small local banks and credit unions can create the credit instead, if the near-monopoly power the too big to fails are enjoying is taken away, and others are allowed to fill the vacuum.

Indeed, the big banks do very little traditional banking. Most of their business is from financial speculation. For example, less than 10% of Bank of America’s assets come from traditional banking deposits.Time Magazine gave some historical perspective in 1993:

What would happen to the U.S. economy if all its commercial banks suddenly closed their doors? Throughout most of American history, the answer would have been a disaster of epic proportions, akin to the Depression wrought by the chain-reaction bank failures in the early 1930s. But [today] the startling answer is that a shutdown by banks might be far from cataclysmic.***Who really needs banks these days? Hardly anyone, it turns out. While banks once dominated business lending, today nearly 80% of all such loans come from nonbank lenders like life insurers, brokerage firms and finance companies. Banks used to be the only source of money in town. Now businesses and individuals can write checks on their insurance companies, get a loan from a pension fund, and deposit paychecks in a money-market account with a brokerage firm. “It is possible for banks to die and still have a vibrant economy,” says Edward Furash, a Washington banks consultant.

So we the government has been barking up the wrong tree by propping up  the big banks.Moreover, as discussed above, the fact that banks can create money means that the level of private debt does matter … and economists like Bernanke and Krugman who encourage massive levels of private debt are hurting the economy.As professor Keenexplains:

In a credit-based economy, aggregate demand is therefore the sum ofincome plus the change in debt, with the change in debt spending new money into existence in the economy. This is then spent not only goods and services, but on financial assets as well—shares and property. Changes in the level of debt therefore have direct and potentially enormous impacts on the macroeconomy and asset markets, as the GFC—which was predicted only by a handful of credit-aware economists (Bezemer 2009)—made abundantly clear.If the change in debt is roughly equivalent to the growth in income—as applied in Australia from 1945 to 1965, when the private debt to GDP ratio fluctuated around 25 per cent (see Figure 1)—then nothing is amiss: the increase in debt mainly finances investment, investment causes incomes to grow, and the economy moves forward in a virtuous feedback cycle. But when debt rises faster than income, and finances not just investment but also speculation on asset prices, the virtuous cycle gives way to a vicious positive feedback process: asset prices rise when debt rises faster than income, and this encourages more borrowing still.The result is a superficial economic boom driven by a debt-financed bubble in asset prices. To sustain a rise in asset prices relative to consumer prices, debt has to grow more rapidly than income—in other words, if asset prices are to rise faster than consumer prices, then rather than merely rising, debt has to accelerate. This in turn guarantees that the asset price bubble will burst at some point, because debt can’t accelerate forever. When debt growth slows, a boom can turn into a slump even if the rate of growth of GDP remains constant.This process is easily illustrated in a numerical example. Consider an economy with a GDP of $1 trillion that is growing at 10% per annum, with real growth of 5% and inflation of 5%, and in which private debt is $1.25 trillion and growing at 20% p.a. Total spending on both goods & services and financial assets is therefore $1.25 trillion: $1 trillion is financed by income, and $250 billion is financed by the 20% increase in debt.In the following year, if the growth of debt simply slows down to the same rate at which nominal GDP is growing (without affecting the rate of economic growth), then the growth in debt will be $150 billion (10% of the $1.5 trillion level reached at the end of the previous year). Total spending will therefore be exactly the same as the year before: $1.25 trillion, consisting of $1.1 trillion in GDP plus a $150 billion growth in debt. However, since inflation is running at 5%, this amounts to a 5% fall in the real level of economic activity—which would be spread across both commodity and asset markets.If instead the growth of debt stopped, then total spending the next year will be $1.1 trillion, a 15% fall from the level of the previous year in nominal terms, and 20% in real terms. This would cause a massive slump in demand for goods & services, assets, or both, even without a slowdown in the rate of growth of GDP.This hypothetical example is not far removed from the actual experience of the GFC. As the US experience illustrates most clearly, the switch from rising to falling private debt ushered in the biggest economic downturn since the Great Depression, a prolonged period of high unemployment, and sharp falls in asset markets—all of which are plotted in Figure 3.Figure 3This is why the shift from the Age of Leverage to the Age of Deleveraging was so dramatic, and yet so unforeseen by conventional economists: it was caused by a huge reduction in aggregate demand from a factor they ignore. This debt-induced reduction in aggregate demand will persist as long as private debt levels are falling—as they still are in the USA, though at a much reduced rate from the peak rate of fall in early 2010.

In 2008, the Bank for International Settlements (BIS) – often described as the central bank for central banks – said that failing to force companies to write off bad debts “will only make things worse”.Indeed, Bernanke, Krugman and other mainstream economists from the left and the right who encourage more private debt are only creating a debt trap … where people take on new debt to try to pay for the old debt, and end up in a worse situation than they started:

6/20/2012 - Russian ship believed to be carrying helicopters and missiles for Syria

Source:Testosterone Pit

The first summit of the G-20 in today’s configuration took place in November 2008 in Washington, DC, during the heady days after the Lehman collapse. Before, it was limited to finance ministers. Since then, twice a year, 19 heads of state, the President of the EU, finance ministers, the heads of the IMF and the World Bank, a gaggle of central bankers, and a whole slew of lesser characters get together to solve the problems of the world.
G-20 summits have a checkered history of accomplishments though they don’t lack in grandiose announcements. At the summit in London in April 2009, French President Nicolas Sarkozy announced with fanfare, “The era of bank secrecy is over.” Its big accomplishment: a blacklist of tax havens. And a whole new game of political football, namely deciding which country would get to see its name on the list and which wouldn’t. Yet, tax havens have since sprouted around the world far faster than President Obama’s “green shoots.”
But the crowning achievement was the G-20 summit in November last year in Cannes, France. At the beginning of the week, participants were still thinking that their sojourn in the ritzy town on the Côte d’Azur would be a relaxed affair of photo ops, handshakes (or stiff air kisses between German Chancellor Angela Merkel and Sarkozy), and fancy dinners, interrupted by rubber-stamping with great hoopla the previously negotiated Grand Plan to bail out Greece, or rather its public bondholders. It was its second bailout package, and it would be huge and solve all problems once and for all. And in between, attendees would also put Italy back on some kind of unspecified track though Prime Minister Silvio Berlusconi was mired up to his neck in legal problems while his country’s finances were spiraling out of control. And with the summit being heavily mediatized in France, Sarkozy would make it his jump-off platform for his reelection campaign, demonstrating panache, leadership, and crisis management skills.
Just then, Giorgios Papandréou, Prime Minister of Greece, who wasn’t even in the G-20, fired his bazooka. With a single sentence about letting Greeks decide via referendum whether or not they wanted that Grand Plan, he knocked the world’s financial markets into a vertigo-inducing tailspin—which blew up the summit.
The final communique was a bland slop that talked about a “worldwide strategy” for growth and employment, a “more resilient and stable monetary system,” and once again “reforming the financial sector.” It suggested that the world would need to get a grip on the “volatility of commodity prices,” as well as “promote agriculture,” and continue “the fight against climate change.” Meanwhile, the Eurozone had begun to disintegrate.
So they all arrived at the current G-20 summit in Los Cabos, Mexico, with their own agendas. While tiny Greece is still front and center, the summit has been escalated: bailing out Greece wouldn’t be enough. Now it would be about bailing out the entire 17-nation Eurozone and its currency. And even broader. President Obama made his agendaclear: he wanted everybody else to do “what’s necessary to stabilize the world financial system.”
But the finger-pointing already started. “Frankly, we are not coming here to receive lessons,” said European Union President Jose Manuel Barroso. Lest the most powerful man on earth should forget, Barroso added that the euro debt crisis “was originated in North America.” Presumably, if it hadn’t been for US subprime mortgages blowing up, Spain’s housing bubble could have continued ad infinitum, along with Greece’s profligate ways, and the debt crisis wouldn’t even exist. “But we are not putting the blame on our partners.”
Indeed, President Obama is going to be busy handing out lessons. There will be Russian President Vladimir Putin on Syria and Iran, Chinese President Hu Jintao on the yuan, and of course Merkel. Obama will push her to hand Greece unlimited amounts of money, bail out Spain and Italy while she is at it, and do whatever it takes to bail out the Eurozone as a whole. She would also have to calm the markets. But above all, she’d have to make sure that none of this euro effluent would cross the Atlantic and muck up his reelection chances.
Merkel, whose patience is running thin these days, has already preempted any unnecessary hopes Obama might have had by declaring, once again, for those who’d missed it the first 33 times, that the bailout terms wouldn’t be renegotiated and that the new Greek government would have to meet the commitments made to international lenders. And on the eve of the election, she’d expressed her exasperation with the Greek method of “making promises, breaking promises, and doing nothing.” It simply could not continue, she said, that those who didn’t fulfill their commitments could lead all others “by the nose through the ring.”
Even if Germany wanted to, it could not bail out teetering Eurozone countries to the extent needed to save the euro because the unstoppable juggernaut has built its recent success on a fragile and now shaking foundation. Read.... Relying on Fake German Strength.
But the world has other problems. As NATO-aided rebels in Libya overwhelmed Muammar Qaddafi’s forces, 36,000 Chinese engineers, tradesmen, and technicians fled Libya, leaving $20 billion in infrastructure and oil projects behind. China’s refusal to support the NATO attacks didn’t sit well with the rebels. Yet, less than one year later, China is back. Read.... The New Cold War.

6/20/2012 - Britain stops Russian ship carrying attack helicopters for Syria

Source: Telegraph
A Russian ship believed to be carrying helicopters and missiles for Syria has been effectively stopped in its tracks off the coast of Scotland after its insurance was cancelled at the behest of the British government.

The British marine insurer Standard Club said it had withdrawn cover from all the ships owned by Femco, a Russian cargo line, including the MV Alaed.

“We were made aware of the allegations that the Alaed was carrying munitions destined for Syria,” the company said in a statement. “We have already informed the ship owner that their insurance cover ceased automatically in view of the nature of the voyage.”

British security officials confirmed they had told Standard Club that providing insurance to the shipment was likely to be a breach of European Union sanctions against the Syrian regime.

They said they were continuing to monitor the ship, which has been the subject of a fierce international row since US Secretary of State Hillary Clinton last week revealed it was adding to the arsenal of weaponry available for Mr Assad to use against rebellious Syrian towns.

“We have various ways of keeping track of this ship and that is what we are doing,” a source told The Daily Telegraph.

Classified US satellite images last week indicated that loading work had begun on two amphibious landing vessels, the Nikolai Filchenkov and the Caesar Kunikov, at the Crimean naval base of Sebastopol.

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Study: Vaccinated children have up to 500% more disease than unvaccinate...

Published on Jun 19, 2012 by JoeyB613

link:
http://exaltedtruth.com/2012/06/19/vaccinated-children-have-up-to-500-more-di...
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ZOMBIE VIRUS COVER UP? Dozens of CDC and National Guard Trucks on route ...

Published on Jun 9, 2012 by PatrioticTruther

Dozens of CDC trucks, comprised of what looks like mobile hazmat cleansing trucks, long-haul rigs, and small tanker trucks were seen by our sky cam in a convoy; they appeared to be synchronized with the arrival of National Guard vehicles at the crossover of I-5 and Soledad Freeway. Note: compact tanker with special nozzle equipment and acid-proof container. As well as, San-Diego-bound transport of light armor urban tanks along I-5 and empty reinforced flatbeds heading north.

The U.S. Centers for Disease Control has sent investigators to California to look into a cluster of infections in victims on route 450.

TRACKING & REPORTING THE POTENTIAL GLOBAL EPIDEMIC COVER-UP.

The risk of an epidemic is now a certainty. The world's governments, along with the global media are in collusion to avoid the chaos that will ensure once the public understands the risks.

We are not.

5/24/2012 - Eurobonds: The Issue That Could Shatter Europe

Eurobonds: The Issue That Could Shatter Europe

Would you pool your debt with a bunch of debt addicts that have no intention of reducing their wild spending habits?  Of course you wouldn't.  But that is exactly what Germany is being asked to do.  Increasingly, "eurobonds" are being touted as the best long-term solution to the financial crisis in Europe.  These eurobonds would represent jointly issued debt by all 17 members of the eurozone.  This debt would also be guaranteed by all 17 members of the eurozone.  This would allow all countries in the eurozone to enjoy the same credit rating that Germany does, and borrowing costs for nations such as Greece, Portugal, Italy and Spain would plummet.  But borrowing costs for Germany would rise substantially.  In fact, it is being estimated that Germany could be facing an extra 50 billion euros a year in interest expenses.  So over ten years that would come to about 500 billion euros.  Needless to say, Germany is not thrilled about this idea.  But new French President Francois Hollande is pushing eurobonds very hard, and he has the support of the OECD, the IMF and many top Italian politicians.  In the end, this could be the key to the future of the eurozone.  If the Germans give in and decide that they are willing to deeply subsidize their profligate neighbors indefinitely, then the euro could potentially be saved.  If not, then this issue could end up shattering Europe.

It is easy to try to portray the Germans as the "bad guys" in all this, but try to step into their shoes for a minute.

If you had some relatives that were spending wildly and that had already run up $100,000 in credit card debt, would you be a co-signer on their next credit card application?
Of course not.

The recent elections in France and Greece made it abundantly clear that the populations of those two countries are rejecting austerity.

Instead, they want a return to the debt-fueled prosperity that they have always enjoyed in the past.
Unfortunately, they need German help to be able to do that.
That is why new French President Francois Hollande is pushing so hard for eurobonds.  He wants the rest of the eurozone to be able to "piggyback" on Germany's sterling credit rating so that everyone can return to the days of wild borrowing and spending.

But Germans greatly fear what a co-mingling of eurozone debt could eventually mean.  Not only would Germany's borrowing costs rise dramatically, but there is also a concern that the rest of the eurozone could eventually pull Germany down with them.

Austria, Finland and the Netherlands are also against eurobonds, but the key is Germany.
For now, Germany is not budging on the issue of eurobonds at all.  The following is a statement that German Chancellor Angela Merkel made during a recent speech in Berlin....

"It’s just about not spending more than you collect. It’s astonishing that this simple fact leads to such debates"

And she is right.

Why is it so controversial to insist that people not spend more than they bring in?
But this is the problem that is created when you create a false lifestyle fueled by debt that goes on for decades.  People become accustomed to that false standard of living and they throw hissy fits when that false standard of living begins to disappear.

The Germans don't want to make great sacrifices just so the Greeks, the French and the Italians can go back to borrowing and spending wildly.

Why would the Germans want to do that?

And as a recent CNN article noted, German politicians believe that eurobonds are explicitly banned under existing EU treaties anyway....

"There is no way of introducing them under the current [EU] treaties. Indeed, there is an explicit ban on them," one senior German official said, adding Berlin would not drop its opposition in the foreseeable future. "That's a firm conviction which will not change in June."

But politicians such as Hollande are complaining that austerity could seriously damage living standards throughout Europe.

And Hollande is right about that.
When you inflate your standard of living with borrowed money for many years, eventually there comes a time when you must pay a great price.

Anyone that has ever been in trouble with credit card debt knows how painful that can be.
It is shameful for the rest of Europe to be pleading and begging Germany to help them.
They should take care of themselves.

As I wrote about the other day, Greece would be much better off in the long run if it left the euro and created a new financial system based on sound financial principles.

But in the financial press all over the world there are calls for someone to come up with a "plan" to "rescue" Europe.  For example, the following is from a recent Wall Street Journal article....

There have been two main responses to the crisis: austerity, and kicking cans down roads. Austerity, in case you haven’t noticed, is so last year. It’s out. Which means that unless something else is found, some other comprehensive plan, the other main response, can kicking, is going to run out of road.
Just about everybody backed the idea of eurobonds, except for the Germans, and since they’re the ones with all the money, they’re kind of the only ones whose vote counts anyway. So, it’s time to go to plan B. Only there’s no Plan B, and there’s no time, either.

If Germany does not agree to subsidize the rest of the eurozone, will that ultimately mean that the eurozone will be forced to break up?

Probably.
And that would cause a huge amount of pain in the short-term.
But the euro never was a good idea in the first place.  It was foolish to expect a monetary union to work smoothly in the absence of fiscal and political union.
And to be honest, the entire world would be a better place with less European integration.  The EU has become a horrifying bureaucratic nightmare and it would be wonderful if the entire thing broke up.
But for now, the only thing that is in danger is the euro.

Increasingly, it is looking like Greece may be the first country to exit the euro.
This week, former Greek Prime Minister Lucas Papademos admitted that the Greek government is considering making preparations for Greece to leave the euro.

Not only that, Reuters is reporting that top officials in the eurozone are now working on "contingency plans" for a Greek exit from the euro....

Each euro zone country will have to prepare a contingency plan for the eventuality of Greece leaving the single currency, euro zone sources said on Wednesday.
Officials reached the consensus on Monday afternoon during an hour-long teleconference of the Eurogroup Working Group (EWG).
As well as confirmation from three euro zone officials, Reuters has seen a memo drawn up by one member state detailing some of the elements that euro zone countries should consider.

So obviously a Greek exit from the euro has become a very real possibility.
A recent Bloomberg article detailed how a Greek exit from the euro could play out during the 46 hours that global financial markets are closed over the weekend....

Greece may have only a 46-hour window of opportunity should it need to plot a route out of the euro.
That’s how much time the country’s leaders would probably have to enact any departure from the single currency while global markets are largely closed, from the end of trading in New York on a Friday to Monday’s market opening in Wellington, New Zealand, based on a synthesis of euro-exit scenarios from 21 economists, analysts and academics.
Over the two days, leaders would have to calm civil unrest while managing a potential sovereign default, planning a new currency, recapitalizing the banks, stemming the outflow of capital and seeking a way to pay bills once the bailout lifeline is cut. The risk is that the task would overwhelm any new government in a country that has had to be rescued twice since 2010 because it couldn’t manage its public finances.

Right now, nobody is quite sure what is going to happen next and panic is spreading throughout the European financial system.
At this point, everyone is afraid of what is going to happen if Greece is forced to start issuing drachmas again.  As CNBC is reporting, some big European corporations are already beginning to implement their own "contingency plans"....

Big tourism operators like TUI of Germany and Kuoni of Britain are demanding the addition of so-called drachma clauses to contracts with Greek hoteliers should the euro no longer be in use here. British newspapers are filled with advice columns for travelers worried about the wisdom of planning a vacation in Greece, or even Portugal and Spain, should the euro crisis worsen. Large multinational companies like Vodafone Group, Reckitt Benckiser and Diageo have taken to sweeping cash every day from euro accounts back to Britain to limit their exposure.

Sadly, this is probably only a small taste of the financial anarchy that is coming.
France is likely to keep pushing hard for the creation of eurobonds.
Germany is likely to keep fiercely resisting this.
At some point, a moment of crisis will arrive and a call will have to be made.
Will Germany give in or will political turmoil end up shattering Europe?
It will be interesting to see how all of this plays out.

 http://theeconomiccollapseblog.com/archives/eurobonds-the-issue-that-could-shatter-europe

Destruction of America (Full length movie)

Published on May 10, 2012 by TheJonathankleck

false flag destruction of U S New World Order is here and nothing will stop what's coming. Hidden images on U S currency reveal Satanic Plans for the destruction of America

5/18/2012 - We Are Watching The Greek Banking System Die Right In Front Of Our Eyes

Michael Snyder
The Economic Collapse

Money is being pulled out of Greek banks at an alarming rate, and if something dramatic is not done quickly Greek banks are going to start dropping like flies.  As I detailed yesterday, people do not want to be stuck with euros in Greek banks when Greece leaves the euro and converts back to the drachma.  The fear is that all existing euros in Greek banks would be converted over to drachmas which would then rapidly lose value after the transition.  So right now euros are being pulled out of Greek banks at a staggering pace.  According to MSNBC, Greeks withdrew $894 million from Greek banks on Monday alone and a similar amount was withdrawn on Tuesday.  But this is just an acceleration of a trend that has been going on for a couple of years.  It has been reported that approximately a third of all Greek bank deposits were withdrawn between January 2010 and March 2012.  So where has all of the cash for these withdrawals been coming from?  Well, the European Central Bank has been providing liquidity for Greek banks, but on Tuesday it was reported that the ECB is going to stop providing liquidity to some Greek banks.  It was not announced which Greek banks are being cut off.  For now, the Greek Central Bank will continue to provide euros to those banks, but the Greek Central Bank will not be able to funnel euros into insolvent banks indefinitely.
This is a major move by the European Central Bank, and it is going to shake confidence in the Greek banking system even more.
There are already rumors that the Greek government is considering placing limits on bank withdrawals, and many Greeks will be tempted to go grab their money while they still can.
Once strict currency controls are put in place, the population is likely to respond very angrily.  If people can’t get their money there is no telling what they might do.
We are reaching a critical moment.  Many fear that a full-blown “bank panic” could happen at any time.  The following is from a recent Forbes article….

The pressing problem isn’t a splintered legislature that may balk at delivering the reforms that the IMF and European Community are demanding in exchange for the next tranche of bailout money. It’s a disastrous, old-fashioned run-on-the bank. “For a year, Greeks have been sending their savings from Greek banks to foreign banks,” says Robert Aliber, retired professor of international economics from the University of Chicago. “Now, the flood has reached a crescendo.” Indeed on Monday alone, outflows from the Greek banks reached almost $900 million.

These banks would have collapsed already if not for the support of the European Central Bank and the Greek Central Bank.  This was described in a recent blog post by Paul Krugman of the New York Times….

But where are the euros coming from? Basically, banks are borrowing them from the Greek central bank, which in turn must borrow them from the European Central Bank. The question then becomes how far the ECB is willing to go here; is it willing, in effect, to lend enough money to buy up the entire balance sheet of the Greek banking sector, given the likelihood that this sector will be left insolvent by Greek default?
Yet if the ECB says no more, Greek banks stop operating — and it’s hard to see how they can be restored to operation except by ditching the euro and using something else.

That is why the announcement on Tuesday was so dramatic.  The ECB is starting to pull back and that is a very bad sign for the Greek banking system.
For the moment, the Greek Central Bank is continuing to support the Greek banks that the European Central Bank is no longer providing liquidity for.  A Reuters article explained how this works….

The ECB only conducts its refinancing operations with solvent banks. Banks which fail to meet strict ECB rules but are deemed solvent by the national central bank (NCB) concerned can nonetheless go to their NCB for emergency liquidity assistance (ELA).

But this emergency liquidity assistance is not intended to be a long-term solution as a recent Wall Street Journal articlenoted….

The ECB’s emergency-lending facility isn’t intended as a long-term fix. National central banks must get approval each month that they want to let their banks access the facility from the ECB’s governing council, which can veto use of the program.
If Greece installs an antibailout government that reneges on its austerity promises, it would almost certainly be cut off from ECB funding.

The truth is that we are heading for a financial tragedy in Greece.  If the flow of money out of Greek banks intensifies, the Greek banking system might not even be able to make it to the next election in June.  This point was underscored in an article that was published on Tuesday that was authored by renowned financial journalist Ambrose Evans-Pritchard….

Steen Jakobsen from Danske Bank said outflows are becoming unstoppable, not helped by open talk in EU circles of `technical’ plans for Greek withdrawal.
“This has a self-fulfilling prophecy built into it and I don’t think we can get to June. The fuse is burning and the only two options now are a controlled explosion where Germany steps in to ensure an orderly exit, or an uncontrolled explosion,” he said.

So what should we expect to see next?
Well, James Carney of CNBC says that he believes that it is inevitable that Greece is going to have to implement currency controls in order to slow the bleeding….

It looks increasingly likely that Greece will have to implement controls to prevent capital flight and a banking collapse. To my mind, the only real question is when this will occur.
The widespread talk about Greece possibly leaving the euro zone is likely to trigger withdrawal of bank deposits and other financial assets, by those who fear they might be redenominated into a drachma that would be worth far less than the euro.

The Greek government may soon announce a limit on the amount of money that can be withdrawn on a single day.
The Greek government may also soon announce a limit on the amount of money that can be moved out of the country.
Those would be dramatic steps to take, but if nothing is done we are likely to watch the Greek banking system die right in front of our eyes.
A Greek exit from the euro seems more likely with each passing day.  Such an exit would have a devastating impact on the Greek economy, but it would also dramatically affect the rest of the globe as well.  The following is from a recent articleby Louise Armitstead….

The Institute of International Finance has estimated that the global cost of a Greek exit could hit €1trillion. When Argentina defaulted in 2001, foreign debtors lost around 70pc of their investments.

That is a big hit for such a little country.
So what would it cost the globe if Spain or Italy left the eurozone?
That is something to think about.
Meanwhile, the United States continues to steamroll down the same road that Greece has gone.  According to the Republican Senate Budget Committee, the U.S. government is currently spending more money per person than Greece, Portugal, Italy or Spain does.
We are spending ourselves into oblivion, and we are heading for a national financial disaster.
Unfortunately, most Americans are totally oblivious to all of this.
Instead of getting educated about the horrific financial crisis heading our way, most Americans would rather read about why Jennifer Lopez is leaving American Idol.
But those that are listening to the warnings will be prepared when the storm hits.
Things in Europe look really, really bad.
You better get prepared while you still can.

5/18/2012 - Video: Armed MQ-1 Predator drone quietly flying at low altitude over Elgin, Illinois

Source: The Aviationist


Filmed in Elgin, Illinois about 40 miles from Chicago, the following video (uploaded to Youtube on May 13) shows what seems to be an MQ-1 Predator drone. Armed with AGM-114 Hellfire air-to-surface missiles.



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5/18/2012 - Security Services to Block Cell Phone Towers Ahead of NATO summit

Source: RT.com

Reports suggest local law enforcement agencies are considering shutting down cell phone services in the city over the weekend and while it will most likely be very effective, many are questioning if the move is legitimate.
The Daily Beast reports that the FBI and Secret Service have standing authority to jam signals and they can also push for the shutdown of cell towers, thanks to “Standard Operating Procedure (SOP) 303,” which lays out the nation’s official “Emergency Wireless Protocols.”
According to the National Communications System, the protocol details a “shutdown and restoration process for use by commercial and private wireless networks during national crises.” It was created after the London bombings in 2005, when federal security services shut off cellular networks in New York’s tunnel, fearing a similar attack. Since then, cell phone jammers have been used in situations like President Obama’s inauguration, with the Secret Service claiming there was a bomb threat, as well as a number of other cases.

Read full article

5/18/2012 - Prime Minister Medvedev Repeats Warning of Thermonuclear War: Obama Must Be Removed From Office Now!

FOR IMMEDIATE MASS DISTRIBUTION
On the eve of his trip to the United States, where he will meet with President Barack Obama, Russian Prime Minister Dmitri Medvedev delivered an unequivocal message to Obama and his NATO cohorts, who are threatening to intervene with regime-change operations in Syria, Iran, and elsewhere: Such actions can lead to "full-scale wars, even with nuclear weapons."
Medvedev's warning, delivered at an International Legal Forum in St. Petersburg, comes in the wake of similar warnings issued May 3 by Russian Chief of Staff Nikolai Makarov, that the U.S.-NATO policy of Ballistic Missile Defense in Europe could lead to a Russian pre-emptive strike, and by Medvedev himself last November.
The Russians are making it clear: attacks on national sovereignty will not be tolerated. Yet President Barack Obama, operating under the thumb of the British imperial strategy to crush all national sovereignty, has stuck to his provocative policy, pressing forward against Syria, Iran, and Russia itself. Thus, unless Barack Obama is removed from office, by Constitutional means, the world is headed toward thermonuclear war.
No, the Russians are not bluffing; they are deadly serious. The question is: are we? Can we face the reality that the exchange of nuclear weapons will likely exterminate all life on this planet? Can we fail to act when not only our family and posterity, but all civilization can be wiped from the face of the earth, because we tolerated a President who took his orders from Malthusian lunatics like Prince Philip and the Queen of England?
British puppet Obama has already provided ample cause for his removal by virtue of Section 4 of the 25th Amendment, or impeachment, through multiple violations of the Constitution. Every day he is in office, the situation worsens. But with the British Empire facing financial implosion, and going for end-game confrontation with Russia and China, Obama is now being pushed toward actions which will provoke thermonuclear war. The United States, and the world as a whole, stand in the clear and present danger of extinction, unless Obama is removed.
- Medvedev's Warning -
With U.S. Attorney General Eric Holder sitting behind him, Prime Minister Medvedev stated Russia's principled position:
"I would like to emphasise that we need to act in unison against such modern global challenges as the proliferation of weapons of mass destruction, international terrorism, organised transnational crime, drug trafficking, and the threat of natural and man-made disasters. We can achieve this only through the collective efforts of states based on undeviating respect for the supremacy of law. ...
"Particularly dangerous, in my view, are unilateral actions made in violation of the fundamental principles of the Charter of the United Nations, which is the main venue where the international community brings it problems. In fact, this is the only venue we have, even though some may not like it. But it truly is the only venue. And we understand that the UN Charter calls for respecting the supreme power of law and the sovereignty of states.
"One more thing that I believe is important, considering my experience in politics, is the concept of state sovereignty. It should not be undermined even if for the sake of achieving some immediate political gain, including an election to a particular post. Such attempts threaten global order. There have been many recent examples of the concept of state sovereignty being undermined. Military operations against foreign states bypassing the United Nations; declarations of illegitimacy of certain political regimes on behalf of foreign states rather than the people of the country involved and imposing various collective sanctions, again bypassing international institutions, are some of them. This does not improve the situation in the world, while rash military interference in the affairs of another state usually results in radicals coming to power. Such actions, which undermine state sovereignty, can easily lead to full-scale regional wars even—I am not trying to scare anyone here—with the use of nuclear weapons. Everybody should remember this especially when we analyse the concept of state sovereignty." (Emph. added)
Thus, when Obama threatens to repeat his unconstitutional Libya operation, this time against Syria, he is triggering not only a disastrous regional war, but a direct confrontation with the world's second greatest nuclear power, Russia. He ignores Russia's offers of cooperation, and presses on, toward death.
Some in Congress have stepped forward to try to stop Obama's insanity. Specifically, Rep. Walter Jones's HCR 107 declares that any president who launches war without Congressional approval would be immediately subject to impeachment. That's a first step, but unfortunately woefully few have had the guts to join him. Now Sen. Jim Webb in the Senate has put forward S. 3619, to try to stop a preemptive illegal war. So far, he too stands virtually alone.
There can no longer be any ambiguity as to what the consequences of allowing Obama to remain in office will be. Act now to politically remove Obama from office, or you will be culpable for an impending thermonuclear destruction of the planet. As of now, that destruction can be stopped. But only if you act.
Contact LPAC immediately at www.larouchepac.com or 800-929-7566 and join to oust Obama, and build a real future for mankind.

5/15/2012 - THE PHARMACEUTICAL INDUSTRIAL COMPLEX

By Susanne Posel
Occupy Corporatism

The US government will assist the pharmaceutical corporations in finding prescription drugs to treat new diseases.

The focus of this collaboration will identify new uses for drugs that have already been approved by the Food and Drug Administration (FDA). There may be need for new human trials, putting the general public at a health risk. Engaging in experimental trials to classify specific compounds to be utilized for unintended purposes is highly dangerous.

Genetic engineering has led researchers to discover over 4,500 diseases that need pharmaceutical drugs to combat.

'We need to speed the pace at which we are turning discoveries into better health outcomes,' said Dr. Francis Collins, of the National Institutes of Health (NIH). 'NIH looks forward to working with our partners in industry and academia to tackle an urgent need that is beyond the scope of any one organization or sector.'

The National Institutes of Health (NIH) will begin working with Pfizer Inc, AstraZeneca Plc and Eli Lilly and Co. in agreements to create compounds to be made available for trial use in a planned project.

'Americans are eagerly awaiting the next generation of cures and treatments to help them live longer and healthier lives,' Health and Human Services Secretary Kathleen Sebelius said in a statement. 'To accelerate our nation’s therapeutic development process, it is essential that we forge strong, innovative, and strategic partnerships across government, academia, and industry.'

The pharmaceutical corporations are able to manipulate the FDA because the regulatory agency does not conduct independent studies on trial results. They simply accept the findings of the drug companies on their own trials.

Currently, the vitamin industries, by order of the Codex Alimentarius (CA) are being attacked by the US government to justify the force outlawing of natural medicine use.

The CA is a creation of the World Health Organization (WHO) and the Food and Agriculture Organization of the United Nations. The CA seeks to enforce international standards and codes on nations in a securitization of the world’s food supply.

By controlling the means of food production, transportation and distribution, the CA will ensure the standards set forth by the UN are the basis for all national legislation.

Obama signed Executive Order (EO), Establishing the National Prevention, Health Promotion and Public Health Council in 2010.

Through this EO, Obama empowered the CA to enact the UN’s plan for worldwide food standards.

The National Prevention, Health Promotion, and Public Health Council was created to assist Obama in destroying the alternative health industry.

Congress fought the use of CA policy as the foundation for an attempt by the federal government to remove the American public’s ability to purchase vitamin supplements by deeming those remedies as “unscientific”. Since the FDA have consistently claimed that these alternatives have no medicinal value and decried their daily use a danger to a healthy lifestyle, social stigmas have served to aid Obama in declaring them useless. Obama suggests that their potency be changed to ultra-low levels in compound mixtures.

While the Obama administration seeks to wipe out the natural medicine industry, the US government is pouring money and resources into the genetic engineering of pharmaceuticals to combat disease.

When natural remedies are completely outlawed, the general public will be forced to take drugs rather than heal through diet and vitamins.

The medical agenda is clear.

The relationship between the US government and the drug corporations created by Obama has laid the foundation for medical tyranny.