Brazil, like Russia, Under Attack by Hybrid War

by Pepe Escobar / Op-Edge (March 28 2016)

Color revolutions would never be enough; Exceptionalistan is always on the lookout for major strategic upgrades capable of ensuring perpetual Empire of Chaos hegemony.

The ideological matrix and the modus operandi of color revolutions by now are a matter of public domain. Not so much the concept of Unconventional War (“UW”).

UW was spelled out by the 2010 Special Forces Unconventional Warfare manual {1}. Here’s the money quote:

The intent of US [Unconventional Warfare] UW efforts is to exploit a hostile power’s political, military, economic, and psychological vulnerabilities by developing and sustaining resistance forces to accomplish US strategic objectives … For the foreseeable future, US forces will predominantly engage in irregular warfare (“IW”) operations.

“Hostile” powers are meant not only in a military sense; any state that dares to defy any significant plank of the Washington-centric world “order” – from Sudan to Argentina – may be branded “hostile”.

The dangerous liaisons between color revolutions and UW have now fully blossomed as Hybrid War; a warped case of Flowers of Evil. A color revolution is nothing but the first stage of what will become Hybrid War. And Hybrid War can be interpreted {2} essentially as the weaponization of chaos theory – an absolute conceptual darling of the US military (“politics is the continuation of war by linguistic means”). My 2014 book Empire of Chaos essentially tracks its myriad manifestations.

This very well-argued three-part thesis clarifies {3} the central objective behind a major Hybrid War; “to disrupt multipolar transnational connective projects through externally provoked identity conflicts (ethnic, religious, political, et cetera) within a targeted transit state”

The BRICS – an extremely dirty word/concept in the Beltway/Wall Street axis – had to be the prime targets of Hybrid War. For myriad reasons. Among them; the push for trade and commerce in their own currencies, bypassing the US dollar; the creation of the BRICS development bank; the avowed drive towards Eurasia integration, symbolized by the now converging China-led New Silk Roads – or One Belt, One Road (“OBOR”), in its official terminology – and Russia-led Eurasia Economic Union (“EEU”).

This implies that Hybrid War sooner rather than later will hit Central Asia; Kyrgysztan, a prime lab for Exceptionalistan experiments of the color revolution kind, is the ideal candidate.

As it stands, Hybrid War is very much active in Russia’s western borderlands (Ukraine) but still embryonic in Xinjiang, China’s Far West, which Beijing micromanages like a hawk. Hybrid War is already being applied to prevent a crucial Pipelineistan gambit; the construction of Turkish Stream. And will also be fully applied to interrupt {4} the Balkan Silk Road – essential for China’s integrated trade/commerce with Eastern Europe.

As the BRICS are the only, real counter power to Exceptionalistan, a strategy had to be developed for each of the major players. Everything was thrown at Russia – from sanctions to full demonization, from a raid on its currency to an oil price war, even including (pathetic) attempts to start a color revolution in the streets of Moscow. For a weaker BRICS node, a more subtle strategy would have to be developed. Which brings us to the complexity of Hybrid War as applied to the current, massive political/economic destabilization of Brazil.

In the UW manual, swaying the perceptions of a vast “uncommitted middle population” is essential in the road to success, so these uncommitted eventually turn against their political leaders. The process encompasses everything from “supporting insurgency” (as in Syria) to “wider discontent through propaganda and political and psychological efforts to discredit the government” (as in Brazil). And as an insurrection escalates, so should the “intensification of propaganda; psychological preparation of the population for rebellion”. That, in a nutshell, has been the Brazilian case.

We Need our Own Saddam

Exceptionalistan’s utmost strategic objective is usually to have a merger of color revolution and UW. But Brazil’s civil society and vibrant democracy were too sophisticated for hardcore UW steps such as sanctions or R2P (“responsibility to protect”).

It’s no wonder that Sao Paulo was turned into the epicenter of the Hybrid War against Brazil. Sao Paulo, the wealthiest Brazilian state, also housing the economic/financial capital of Latin America, is the key node in an interlinked national/international power structure.

The Wall Street-centered global financial system – which rules over virtually the whole West – simply could not allow national sovereignty in full expression in a major regional actor such as Brazil.

The Brazilian Spring, in the beginning, was virtually invisible, an exclusive social media phenomenon – just as Syria in early 2011.

Then, in June 2013, Edward Snowden leaked those notorious NSA spying practices. In Brazil, the NSA was all over Petrobras. And suddenly, out of the blue, a regional judge, Sergio Moro, based on a single source – a currency exchange operator in the black market – had access to a major Petrobras document dump. Up to now, the two-year Car Wash corruption investigation has not revealed how they got to know so much about what they dub the “criminal cell” acting inside Petrobras.

What matters is that the color revolution modus operandi – a fight against corruption and “in defense of democracy” – was already in place. That was the first step of Hybrid War.

As Exceptionalistan coined “good” and “bad” terrorists wreaking havoc across “Syraq”, in Brazil surged the figure of the “good” and the “bad” corrupt.

Wikileaks also unveiled how Exceptionalistan doubted Brazil could design a nuclear submarine – a matter of national security. How construction company Odebrecht was going global. How Petrobras by itself developed the technology to explore the pre-salt deposits – the largest oil discovery of the young 21st century, of which Big Oil was excluded by none other than Lula.

Then, as a result of Snowden’s revelations, the Rousseff administration required all government agencies to use state-owned companies for their technology services. This would mean that US companies could lose as much as $35 billion in revenue over two years as they would be deprived of business in the seventh largest economy in the world – as research group Information Technology & Innovation Foundation discovered.

The Future is Happening Now

The march towards Hybrid War in Brazil had little do to with the political left or right. It was basically about mobilizing a few wealthy families that actually run the country; buy large swathes of Congress; control mainstream media; behave like nineteenth century slave plantation owners (slavery still permeates all social relations in Brazil); and legitimize it all via a hefty, yet bogus, intellectual tradition.

They would give the signal for the mobilization of the middle class.

Sociologist Jesse de Souza identified a Freudian “substitutive gratification” phenomenon under which the Brazilian middle class – with large swathes now clamoring for regime change – imitates the wealthy few as much as it’s ruthlessly exploited by them, via mountains of taxes and sky-high interest rates.

The wealthy 0,0001% and the middle classes needed an Other to demonize – Exceptionalistan style. And what could be more perfect for the judicial-police-media-old comprador elite complex than the figure of a tropical Saddam Hussein: former President Lula.

Ultra right-wing “movements” financed by the nefarious Koch Brothers suddenly popped up on social networks and street protests. The Brazilian attorney general visited the Empire of Chaos leading a Car Wash team to hand out Petrobras information that could prop up possible Department of Justice indictments.

Car Wash and the – immensely corrupt – Brazilian Congress, which will now deliberate over the possible impeachment of President Rousseff, revealed themselves as indistinguishable.

By then, the scriptwriters were sure that a regime change social infrastructure was already built into a critical anti-government mass, thus allowing the color revolution’s full bloom. The way to a soft coup was paved – without even having to resort to lethal urban terrorism (as in Ukraine). The problem was that if the soft coup failed – as it now seems at least possible – it would be very hard to unleash a hard coup, Pinochet-style, via UW, against the beleaguered Rousseff administration; that is, finally accomplishing Full Hybrid War.

On a socioeconomic level, Car Wash would only be fully “successful” if mirrored by a softening up of Brazilian laws regulating oil exploration, opening it up for US Big Oil. And in parallel, all social spending programs would have to be smashed.

Instead, what’s happening now is the progressive mobilization of Brazilian civil society against a white coup/soft coup/regime change scenario. Crucial actors in Brazilian society are now firmly positioned against the impeachment of President Rousseff, from the Catholic church to evangelicals; first tier university professors; at least fifteen state governors; masses of union workers and “informal economy” workers; artists; leading intellectuals; jurists; the overwhelming majority of lawyers; and last but not least, the “deep Brazil” that legally elected Rousseff with 54.5 million votes.

It ain’t over till some fat man in the Brazilian Supreme Court sings. What’s certain is that independent Brazilian academics are already laying down the theoretical bases to study Car Wash not as a mere, massive anti-corruption drive; but as the ultimate case study of Exceptionalistan’s geopolitical strategy applied to a sophisticated globalized environment dominated by infotech and social networks. The whole developing world should be fully alert – and learn the relevant lessons, as Brazil is bound to be analyzed as the ultimate case of Soft Hybrid War.







Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he’s been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of Globalistan (2007), Red Zone Blues (2007), Obama does Globalistan (2009), Empire of Chaos (2014), and 2030 (2015), all published by Nimble Books.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.


Always Attack the Wrong Country

by Dmitry Orlov

Club Orlov (March 29 2016)

Chor Boogie

There are numerous tactics available to those who aim to make problems worse while pretending to solve them, but misdirection is always a favorite. The reason to want to make problems worse is that problems are profitable – for someone. And the reason to pretend to be solving them is that causing problems, then making them worse, makes those who profit from them look bad.

In the international arena, this type of misdirection tends to take on a farcical aspect. The ones profiting from the world’s problems are the members of the US foreign policy and military establishments, the defense contractors and the politicians around the world, and especially in the EU, who have been bought off by them. Their tactic of misdirection is conditioned by a certain quirk of the American public, which is that it doesn’t concern itself too much with the rest of the world. The average member of the American public has no idea where various countries are, can’t tell Sweden from Switzerland, thinks that Iran is full of Arabs and can’t distinguish any of the countries that end in -stan. And so a handy trick has evolved, which amounts to the following dictum: “Always attack the wrong country”.

Need some examples? After 9/11, which, according to the official story (which is probably nonsense) was carried out by “suicide bombers” (some of them, amusingly, still alive today) who were mostly from Saudi Arabia, the US chose to retaliate by attacking [not Saudi Arabia but] Afghanistan and Iraq.

When Arab Spring erupted (because a heat wave in Russia drove up wheat prices) the obvious place to concentrate efforts, to avoid a seriously bad outcome for the region, was Egypt – the most populous Arab country and an anchor for the entire region. And so the US and Nato decided to attack [not Egypt but] Libya.

When things went south in the Ukraine, whose vacillating government couldn’t make up its mind whether it wanted to remain within the Customs Union with Russia, its traditional trading partner, or to gamble on signing an agreement with the EU based on vague (and since then broken) promises of economic cooperation, the obvious place to go and try to fix things was the Ukraine. And so the US and the EU decided fix the Russia, even though Russia is not particularly broken. Russia was not amused; nor is it a country to be trifled with, and so in response the Russians inflicted some serious pain on [not the Washington establishment but] farmers within the EU.

Who was at fault [became] exceedingly clear once the Ukrainians that managed to get into power (including some very nasty neo-Nazis) started to violate the rights of Ukraine’s Russian-speaking majority, including staging some massacres, in turn causing a large chunk of it to hold referendums and vote to secede. (Perhaps you didn’t know this, but the majority of the people in the Ukraine are Russian-speakers, and there is just one city of any size – Lvov – that is mostly Ukrainian-speaking. Mind you, I find Ukrainian to be very cute and it makes me smile whenever I hear it. I don’t bother speaking it, though, because any Ukrainian with an IQ above bathwater temperature understands Russian.) And so the US and the EU decided to fix things by continuing to put pressure on [not the Ukraine but] Russia.

When Russia started insisting on a political rather than a military resolution to the crisis in the Ukraine, and helped negotiate the Minsk agreements together with the Ukraine, France and Germany, a similar thing happened. These agreements obligated the Ukrainian government to pass constitutional reforms to grant autonomy to its Russian regions in the east. The Ukrainian government refused to abide by these agreements. As a result, the US and the EU decided to put pressure on the [not Ukrainian but] Russian government.

When a nasty terrorist group calling itself ISIS and composed of Islamic Salafi/Takfiri extremists started to seize power in large parts of Iraq, and then spread to Syria, something had to be done about it. These extremists were being financed by Turkey (which is still buying oil from them and sheltering them on its territory) and Saudi Arabia. And so the US and Nato decided to put some pressure on [not Turkey and Saudi Arabia but] Syria.

In response to all this foolishness, Russia up and decided to actually go and fix something that was broken: Syria. And now Syria is on the mend, and members the misdirectorate in Washington are left scratching their heads.

So far so good. But this method of pretending to be solving problems by making them worse has some definite downsides.

For one thing, eventually even the dimmest, most geographically challenged bulbs in the general population start to get a clue, and then they start refusing to vote for the establishment candidates. Then it becomes hard to continue with the misdirecting because the people doing the misdirecting are voted out, and (horror of horrors!) somebody who might actually try to fix a problem or two might get voted in.

For another, continually making problems worse by attacking the wrong country tends to eventually make the sheer number problems get completely out of hand. Take the recent massive terror attack in Brussels, down the road from Nato headquarters, for which ISIS took credit. Recently, Europe has been experiencing a large-scale influx of people from the Middle East and North Africa, who have been forced to flee their native lands because of all the previous acts of misdirection, and a fair number of these people are ISIS terrorists. And so, to protect itself, Nato is planning to fight ISIS in [not Europe but] Syria. Also, it is well known that the influx into Europe has been orchestrated by Turkey. In response, the EU has decided to [not put pressure on but] give billions of euros to Turkey and tell Turkey that it is welcome to join the EU.

Lastly, this pattern has an overall momentum that, over time, becomes harder and harder to break. It starts out as just one group of plutocrats doing incredibly vile, underhanded but profitable things; later on, an even bigger group of plutocrats is doing equally vile but now completely idiotic, self-defeating, embarrassing things; and right near the end a really huge group of plutocrats is doing things that are absolutely suicidal – but they can’t stop themselves. You should be able to decide for yourselves when that point in time arrives, but I doubt that it is too far in the future.

Robots Are Coming for Your Job

by Bryan Dean Wright

Los Angeles Times (March 28 2016)

Two women visit a newly opened robot-staffed store run by telecommunications and mobile phone carrier SoftBank Corporation in Tokyo, Japan on March 24. (Franck Robichon / EPA)

A viral video released in February showed Boston Dynamics’ new bipedal robot, Atlas, performing human-like tasks: opening doors, tromping about in the snow, lifting and stacking boxes. Tech geeks cheered and Silicon Valley investors salivated at the potential end to human manual labor.

Shortly thereafter, White House economists released a forecast that calculated more precisely whom Atlas and other forms of automation are going to put out of work. Most occupations that pay less than $20 an hour are likely to be, in the words of the report, “automated into obsolescence.”

In other words, the so-called Fourth Industrial Revolution has found its first victims: blue-collar workers and the poor.

The general response in working America is disbelief or outright denial. A recent Pew Research Center survey found that eighty percent of Americans think their job will still exist in fifty years, and only eleven percent of today’s workers were worried about losing their job to automation. Some – like my former colleagues at the CIA – insist that their specialized skills and knowledge can’t be replaced by artificial intelligence. That is, until they see plans for autonomous drones that don’t require a human hand and automated imagery analysis that outperforms human eyes.

Human workers of all stripes pound the table claiming desperately that they’re irreplaceable. Bus drivers. Bartenders. Financial advisors. Speechwriters. Firefighters. Umpires. Even doctors and surgeons. Meanwhile, corporations and investors are spending billions – at least $8.5 billion last year on artifical intelligence (“AI”), and $1.8 billion on robots – toward making all those jobs replaceable. Why? Simply put, robots and computers don’t need healthcare, pensions, vacation days or even salaries.

Powerhouse consultancies like McKinsey & Company forecast that 45% of today’s workplace activities could be done by robots, AI or some other already demonstrated technology. Some professors argue that we could see fifty percent unemployment in thirty years.

Deniers of the scope and scale of this looming economic upheaval point hopefully to retraining programs, and insist that there always will be a need for people to build and service these machines (even as engineers are focused on developing robots that fix themselves or each other). They believe that such shifts are many decades away, even as noted futurist Ray Kurzweil, who is also Google’s director of engineering, says AI will equal human intelligence by 2029. Deniers also talk about all the new jobs they assume will be created during this Fourth Industrial Revolution. Alas, a report from the 2016 World Economic Forum calculated that the technological changes underway likely will destroy 7.1 million jobs around the world by 2020, with only 2.1 million replaced.

With the future value of human labor (read: our incomes) in doubt, what do we do?

One way to cushion the economic blow is to reclaim something from the technology realm that we’ve been giving away for free: our personal data.

Companies that sell personal data should pay a percentage of the resulting revenue into a Data Mining Royalty Fund that would provide annual payments to US citizens, much as the Alaska Permanent Fund distributes oil revenues to Alaskans. This payment scheme would start with traditional data – customer, financial and social media information sold to advertisers – but would also extend to future forms of data like our facial expressions and other biometrics. If Google, Facebook or others were profiting from harvesting timber, oil, gold or any other public resource, it would be illegal and immoral for them not to pay for it. The same logic should apply to our data.

Profound changes lie ahead with implications beyond our paychecks, to be sure. Ethicists and philosophers already are debating what a world without work might look like. It’s clear that no one will escape the outcomes – negative and positive – of this economic and technological revolution.

A Data Mining Royalty Fund isn’t about helping just the unemployed factory worker who used to earn $20 an hour, the truck driver replaced by self-driving vehicles or the minimum-wage barista. It’s about taking steps to guarantee some minimum income to your family, or the one down the block, before any of us are automated into obsolescence.


Bryan Dean Wright is a former CIA covert operator who resides in Oregon. @BryanDeanWright

Also see:

Copyright (c) 2016, Los Angeles Times

The Coming Great Extinction …

… of jobs

by Editor

Fabius Maximus website (March 28 2016)

Summary: News of the coming great extinction has the chattering classes agog with fear. But they’re (as usual) looking the wrong way. The rapid evolution of algorithms, software, and robots will make many kinds of jobs as extinct as the Great Auk. This will reshape the world into a wonderland – or unleash disastrous social turmoil. It’s up to us.

The Great Auk, last seen 1852. Lots of jobs will go extinct, just as they did.

Great auks by John James Audubon, from “The Birds of America”(1827).

Yet another of these coordinated-looking propaganda barrages warn us of the danger. These are all from June 2015 …




These headlines are correct, but about the wrong subject. They are exaggerated speculation based on false claims about damage to the biosphere, for example {1}. The coming great extinction is of jobs. The drumbeat of automated has become background in the news, the unnoticed washing away of the foundation to American society. When it is seen, the job losses are often attributed to corporate oligarchies {2}, free trade, or massive immigration.

It has just begun. To more clearly see this trend I recommend following the few experts charting the path to this new world. Such as Martin Ford.


Traditionally, robots have been in factories, but I think that over the next ten to twenty, automation in the form of robots, smart software and machine learning is really going to invade pretty much across the board. It’s going to start impacting jobs at all skill levels. It’s not just going to be about low-wage people who don’t have lots of education. It’s really starting to impact also professional jobs.

… we’re in the midst of a transition where in the past, machines have always been tools that have been used by people and made those people more productive, but increasingly, the technology is really becoming a replacement or a substitute for more and more workers. That’s going to be a huge issue over the coming decade.

… On Wall Street, most trading is now done by algorithms. There have been lots and lots of jobs that have disappeared already, and again, the important thing is that in many cases, these are skilled jobs. It’s not about the skill level or how much education you have. The primary question is, is the job on some level routine, repetitive and predictable? In other words, can the actions that a worker undertakes in that field be predicted based on what they’ve done in the past?

If the answer to that is yes, then it’s going to be susceptible to machine learning, which is really the central technology that’s driving all of this. It’s a huge range of jobs, and it includes a lot of jobs that are good jobs that people need to go to school for. So that really kind of throws a wrench into our conventional thinking about how all of this has worked in the past.

We already see systems that are beginning to impact journalism that can crank out news stories based on data streams. We see the field of law being impacted, with algorithms that do document review taking over a lot of the more routine work that used to be done by lawyers and paralegals.

A lot of that is driven by machine learning, and is going to scale across a whole bunch of the knowledge economy. I can imagine that over the next couple of decades anyone who has a job sitting in front of a computer doing something that is some on level routine and predictable – cranking out the same analysis or the same report every month – that type of thing is going to be susceptible to this. That’s an enormous number of white-collar jobs out there. At the same time, there’s going to be a huge impact on many more routine, lower-skill jobs as well – areas like fast food, driving vehicles. So it’s really very, very broad-based. {3}


I suspect he underestimates the ability of technology to eliminate jobs. As in this …


Some of the safest jobs are going to be areas like … car mechanic because it’s really hard to build a robot that can do all of those things. {3}


The complex hydro-mechanical machinery of a car will always require mechanics. But in ever less amounts as technology replaces human diagnosis with computer analysis, and repairable mechanical parts are replaced by disposable electronics. The result might be somewhat like already seen in home electronics. We still have plumbers and electricians, but few home appliance repairmen.

The growing tsunami of stories about automation shows the real debate: how many jobs will the Great Extinction destroy? Next up: when will we begin to prepare for the coming social disruption?

“Almost half of US jobs may one day be automated. For some employees who worked at a free on-demand concierge, that day came last month” {4}.

“ROSS Intelligence Leverages IBM’s Watson To Make Sense Of Legal Knowledge” – A semi-intelligent legal research system that might revolutionize the practice of law {5}.

“Robots are better investors than people”. The investment revolution is here; people just have not felt it yet. {6}

“UK retail sector predicted to cut 900,000 jobs”. “British Retail Consortium says the sector will be much smaller in 2025, but remaining jobs will be ‘more productive and higher earning’ “. {7}

“The Robots are coming for Wall Street”. “Hundreds of financial analysts are being replaced by software”. {8}

“Next-Gen Robots Poised To Enter Industrial, Commercial Markets”. “These new robots are no longer just capable of performing simple, redundant tasks, but are now able to operate in advanced environments working alongside people”.

Watch a Team of µTug Microrobots Pulls a Car:

Automated Stores

CafeX unveils fully automated robotic cafe … companion iOS & Android app will allow users to order drinks prior to arrival. Cafe is about sixty square feet and  is open 24 hrs/day. {10, 11}

Also see Happy Meals: now made with twenty percent less people! {12}

An advertisement for IBM’s Watson to ease your worries about the robot apocalypse:


Day after day we get new stories about new software and new robots replacing people.This bonanza of productivity can make a better world – or create a nightmarish disaster as power and income concentrates in those who own the machines while jobs disappear and wages stagnate.

One solution is expanded welfare – a guaranteed minimum income – as recommended by Bryan Dean Wright in today’s Los Angeles Times op-ed “Robots are coming for your job” {13}.  That would bake high inequality into American society. Cake for the rich from technology; crumbs for everybody else.

We have fifty years of warnings about the new industrial revolution {14}. It’s here. Our decisions will determine if our future will be Jupiter Ascending or Star Trek {15}. The clock is running.

For More Information:

For more of Martin Ford’s insights see “Economic Growth Isn’t Over, but It Doesn’t Create Jobs Like It Used To” {16}. Also follow his Twitter feed {17}.

If you liked this post, like us on Facebook and follow us on Twitter. See all posts describing how the 3rd industrial revolution has begun {18}. Also see the posts about the evidence that we’ve entered a period of secular stagnation {19}. And especially see these:





For deeper analysis see these books:

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee (2014).

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford (2015).

The Future of the Professions: How Technology Will Transform the Work of Human Experts by Richard and Daniel Susskind (2016).





















New Legislation Permits …

… Authorities to Freeze Accounts and Use Them For Bail-ins

by Phoenix Capital Research

Zero Hedge (March 27 2016)

The world will soon be facing a tsunami of defaults on bad debts. This will include municipal or local government defaults, governments “defaulting” on promises they’ve made to the people (Social Security, Medicaid), a default on the social contract between society and politicians such as the one in Cyprus (a default on the notions of private property and Democracy), stealth defaults on debts in the form of inflation and finally, of course, outright sovereign defaults.

The sovereign defaults will come last; all other options will be tried first.

The reason for this is that sovereign bonds (think of US Treasuries, German Bunds or Japanese Government bonds) are the senior most collateral posted by banks for the hundreds of trillions of Dollars worth of derivatives bets they’ve made with each other.

The minute an actual sovereign default occurs in Europe, Asia or the US, then the large global banks will all be vaporized. End of story. As is now clear, the Central banks do not care about ordinary citizens. They only care about propping up the big banks.

This is why Cyprus {1} decided to default on the social contract with its people and steal their funds rather than simply instigating a formal default. And it’s why in general we’re going to see Governments implementing more and more theft in the form of “taxes” (Cyprus called its theft a tax) in the future.

Make no mistake, the words “wealth tax” mean freezing of assets and then taking some of your savings. Anyone with more than $100,000 in a bank account should be prepared for this.

This will be sold to the public as either an attempt to tax those with a lot of money because it’s only fair that they put in more to bailout the nation OR as a form of financial terrorism, for example “either you take a seven percent cut on your deposits and the bank stays afloat or the bank crashes and you lose everything”.

This will be spreading throughout the world, GUARANTEED.

Spain, Canada (which allegedly has the safest banks in the world), New Zealand and now even Germany are implementing confiscation schemes for depositors in the event of a banking crisis.

It can happen in the UK and the US as well. I am not writing that to simply scare people. The US Federal Deposit Insurance Corporation (“FDIC”), working with the Bank of England, published a paper proposing precisely these methods to deal with Systemically Important Financial Entities (“SIFIs”). The paper was published in December 2012. Below are some excerpts worth your attention:



This paper focuses on the application of “top-down” resolution strategies that involve a single resolution authority applying its powers to the top of a financial group, that is, at the parent company level. The paper discusses how such a top-down strategy could be implemented for a US or a UK financial group in a cross-border context…

These strategies have been designed to enable large and complex cross- border firms to be resolved without threatening financial stability and without putting public funds at risk …

Under the strategies currently being developed by the US and the UK, the resolution authority could intervene at the top of the group. Culpable senior management of the parent and operating businesses would be removed, and losses would be apportioned to shareholders and unsecured creditors. In all likelihood, shareholders would lose all value and unsecured creditors should thus expect that their claims would be written down to reflect any losses that shareholders did not cover. Under both the US and UK approaches, legal safeguards ensure that creditors recover no less than they would under insolvency.

An efficient path for returning the sound operations of the Global-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company into equity. In the US, the new equity would become capital in one or more newly formed operating entities. In the UK, the same approach could be used, or the equity could be used to recapitalize the failing financial company itself – thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution. Throughout, subsidiaries (domestic and foreign) carrying out critical activities would be kept open and operating, thereby limiting contagion effects. Such a resolution strategy would ensure market discipline and maintain financial stability without cost to taxpayers.

Title II of the Dodd-Frank Act provides the FDIC with new powers to resolve systemically important financial institutions (“SIFIs”) by establishing the orderly liquidation authority (“OLA”). Under the OLA, the FDIC may be appointed receiver for any US financial company that meets specified criteria, including being in default or in danger of default, and whose resolution under the US Bankruptcy Code (or other relevant insolvency process) would likely create systemic instability.

[In the US] Title II requires that the losses of any financial company placed into receivership will not be borne by taxpayers, but by common and preferred stockholders, debt holders, and other unsecured creditors, and that management responsible for the condition of the financial company will be replaced …

[In the UK] The introduction of a statutory bail-in resolution tool (the power to write down or convert into equity the liabilities of a failing firm) under the Directive on Bank Recovery and Resolution (“RRD”) is critical to implementing a whole group resolution of UK … But insofar as a bail-in provides for continuity in operations and preserves value losses to a deposit guarantee scheme in a bail-in should be much lower than in liquidation. Insured depositors themselves would remain unaffected. Uninsured deposits would be treated in line with other similarly ranked liabilities in the resolution process, with the expectation that they might be written down. {2}



So … if a large bank fails in the US, the FDIC steps in and takes over, replacing management, and works to shrink the bank by writing-down liabilities and converting debt into equity.

In other words … any liability at the bank is in danger of being written-down should the bank fail. And guess what? Deposits are considered liabilities according to US Banking Law and depositors are creditors.

So … if a large bank fails in the US, your deposits at this bank would either be “written-down” (read: disappear) or converted into equity or stock shares in the company. And once they are converted to equity you are a shareholder not a depositor … so you are no longer insured by the FDIC.

So if the bank then fails (meaning its shares fall)… so does your deposit.

Let’s run through this.

Let’s say ABC bank fails in the US. ABC bank is too big for the FDIC to make hold. So …

1. The FDIC takes over the bank.

2. The bank’s managers are forced out.

3. The bank’s debts and liabilities are converted into equity or the bank’s stock. And yes, your deposits are considered a “liability” for the bank.

4. Whatever happens to the bank’s stock, affects your wealth. If the bank’s stock falls at this point because everyone has figured out the bank is in major trouble … your wealth falls to.

Let’s say you have $1,000,000 in deposits at financial institutions ABC. When ABC fails, your deposits are converted into $1,000,000 worth of ABC’s stock (let’s say you get 1,000,000 shares valued at $1 each for $1,000,000).

Now let’s say ABC’s shares fall in value from $1.00 to $0.50.

You just lost $500,000 of your wealth.

This is precisely what has happened in Spain during the 2012 banking crisis over there.

And it is perfectly legal in the US courtesy of a clause in the Dodd-Frank bill.

This is the template for what’s going to be implemented globally in the coming months. When push comes to shove, it will be taxpayers [= depositors], NOT Central Banks who are on the hook for the next round of bailouts.

Indeed, we’ve uncovered a secret document outlining how the Feds plan to take hold of savings during the next round of the crisis to stop individuals from getting their money out.

We detail this paper and outline three investment strategies you can implement right now to protect your capital from this sinister plan. We are making 1,000 copies available for FREE the general public {3}.





Why America May Not …

… be Considered a “First World Country” Much Longer

by Chris Perrin via {1}

Zero Hedge (March 27 2016)

Before George Manuel published The Fourth World: An Indian Reality (1974), the idea that any real differences existed among population groups in fully developed countries was still taboo. At the time, Indigenous rights were still something of a political non-issue, a blemish on a relatively clean looking statistical sheet that First World countries paid lip service to all too infrequently. Since then, an increasing amount of scholarship seeks to understand the differences between Fourth World populations living inside First World countries.

The Fourth World {2}, basically, are populations living within a state who have little or no representation by that state {3}. These populations, from the standpoint of the First World, are generally impoverished {4} and would not fit the criteria for a “First World” country. They are, essentially and literally, the oppressed. It is what we see as the Third World when we are looking at Africa and South America, hidden within the First World just outside our doors. Unfortunately, the Fourth World is growing.

As Anthony J Hall points out in his book The American Empire and the Fourth World (2003), Indigenous populations are not the only peoples who are finding themselves marginalized within the North American Fourth World (page 283). The ongoing Flint Water Crisis {5} is just the most recent example of the state-sponsored expansion of the Fourth World, particularly as it looks so similar to something that might happen in the Third World {6}.

For African-Americans and Hispanic Americans, the Fourth World is an old reality with a new name. Since the economic collapse of 2008 {7}, Black and Hispanic populations have been increasingly marginalized, and the way the government once spoke about Indigenous populations must now be applied to other racial and ethnic groups. Where Indigenous peoples are confined to racially segregated Reservations, Black Americans are finding themselves increasingly limited to urban ghettos {8} where First World opportunities are equally non-existent. Moreover, as Flint and the #BlackLivesMatter movement indicate, African-Americans and Hispanics are less and less represented by the state, clearly placing them within the boundaries of the Fourth World – boundaries that are quickly moving beyond the typical racial norm.

The Occupy Movement represented a clear indication that the working poor, or precariat {9}, is no longer feeling represented by the First World state {10}. With this massive inclusion of a working-class, poor, ethnically diverse group, to the already and obviously marginalized, the population of Fourth World America at the very least rivals the population of First World America. And while the American government continues to nominally supply aid to the Third World, the Fourth World inside the US is slowly being forgotten.

While the First World criticises various governments in traditionally Third World continents as being unfair and corrupt {11} – calling them out for their ongoing human rights abuses {12} – the abuses being perpetrated on the Fourth World are constantly ignored, no matter how similar the two start to appear. Meanwhile, as the Governor of Michigan, Rick Snyder, defines the Flint issue as “a failure of government at all levels” {5}, those governments still claim to represent the citizens of Flint and their best interests.

If this is the representation a growing majority of people are subject to in America, then the way the First and Fourth World are understood needs to be reevaluated. More importantly, where the United States fits within the list must be reconsidered. Only when we begin to see our own situation from a new perspective can we learn how to fix it, or find a solution.















Japan’s Finance Minister Accidentally Reveals How It All Ends

by Tyler Durden

Zero Hedge (March 26 2016)

While this all started with a currency “war”, it seems – according to a stunningly candid transcript of Japan’s finance minister’s conversation with none other than Paul Krugman {1} – that the real endgame here is actual war. Aso remarked that



a similar [deflationary mindset] had occurred in the US in the 1930s. What solved the question? War! Because World War Two had occurred during the 1940s and that became the solution for the United States. [We] have to switch [the Japanese] mindset … we are looking for the trigger.




Japanese Prime Minister Shinzo Abe has been the most hawkishly militaristic prime minister of a generation {2}, shifting from the passive society to an aggressor, beginning around 2013. This has only been emboldened by rising nationalism and escalatuing tensions in the South China Sea.

We note this by way of background as just-released transcripts of a conversation between Japanese finance minister Aso and Uber-Keynesian Paul Krugman reveal perhaps the reality that Japan faces as its economic and social structure collapses …

Minister of Finance Aso:



During the 1930s, I remember that in the United States likewise there was a situation of deflation. And the New Deal policies have been introduced by then President Roosevelt. As a result, it worked out very nicely, but the largest issue associated with it is that for a long period of time entrepreneurs and managers of companies did not go to make a capital investment by receiving the loan. It had continued up until the late 1930s and that is the situation occurring in Japan too. The record high earnings have been generated by the Japanese companies but they would not spend in the capital investment. There are lots of earnings at hand on the part of the corporate in Japan. It should be used for wage hike or dividend payment or the capital investment, but they are not doing that. They are just holding onto their cash and deposits. Reserved earnings have kept going up.

A similar situation had occurred in the US in the 1930s.

What solved the question? War! Because World War Two had occurred during the 1940s and that became the solution for the United States. So, let’s look at the entrepreneurs in Japan. They are stuck with the deflationary mindset.

They have to switch their mindset and should start making capital investments. We are looking for the trigger. That is the utmost concern.



Professor Krugman:



The important point about the war from the macroeconomic point of view is that it was a very large fiscal stimulus. That fact that it was a war is very unfortunate. It was simply something that led to a fiscal stimulus that would not otherwise have happened.

In fact, the story in the 1930s was that the New Deal, Roosevelt backed off the fiscal stimulus in 1937, because then, as now, there were many calls for balancing the budget. That was a terrible mistake. It caused the major second recession.

Yes, obviously we are looking for ways to achieve something like that without war.



Obviously … though war would be handy eh? All that ammunition manufacturing and no inflationary pressure as everyone of them gets shot away. What could go wrong?

So here is 74 seconds of pure Krugmanism from the mouth of the man himself – Keynes 1939 (pre-war) radio address on the beginning of The Grand Experiment: