Saturday, March 1, 2014

CIA Helped Train Bin Laden, Ramzi Yousef and Other Islamic Terrorists Who Bombed World Trade Center

We Created Terrorists to Fight the Soviets in Afghanistan
Washington’s Blog
March 1, 2014
Top American officials admit that the U.S. armed and supported Bin Laden and the other Mujahadin– which later morphed into Al Qaeda – in the 1970s, in order to fight the Soviets.
cialogoJimmy Carter’s National Security Adviser Zbigniew Brzezinski admitted on CNN that the U.S. organized and supported Bin Laden and the other originators of “Al Qaeda” in the 1970s to fight the Soviets. Brzezinski told Al Qaeda’s forefathers – the Mujahadin:
We know of their deep belief in God – that they’re confident that their struggle will succeed. That land over – there is yours – and you’ll go back to it some day, because your fight will prevail, and you’ll have your homes, your mosques, back again, because your cause is right, and God is on your side.
Former Secretary of State Hillary Clinton agrees:
MSNBC reported in 1998:
As his unclassified CIA biography states, bin Laden left Saudi Arabia to fight the Soviet army in Afghanistan after Moscow’s invasion in 1979. By 1984, he was running a front organization known as Maktab al-Khidamar – the MAK – which funneled money, arms and fighters from the outside world into the Afghan war.
What the CIA bio conveniently fails to specify (in its unclassified form, at least) is that the MAK was nurtured by Pakistan’s state security services, the Inter-Services Intelligence agency, or ISI, the CIA’s primary conduit for conducting the covert war against Moscow’s occupation.
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The CIA, concerned about the factionalism of Afghanistan … found that Arab zealots who flocked to aid the Afghans were easier to “read” than the rivalry-ridden natives. While the Arab volunteers might well prove troublesome later, the agency reasoned, they at least were one-dimensionally anti-Soviet for now. So bin Laden, along with a small group of Islamic militants from Egypt, Pakistan, Lebanon, Syria and Palestinian refugee camps all over the Middle East, became the “reliable” partners of the CIA in its war against Moscow.
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To this day, those involved in the decision to give the Afghan rebels access to a fortune in covert funding and top-level combat weaponry continue to defend that move in the context of the Cold War. Sen. Orrin Hatch, a senior Republican on the Senate Intelligence Committee making those decisions, told my colleague Robert Windrem that he would make the same call again today even knowing what bin Laden would do subsequently. “It was worth it,” he said.
“Those were very important, pivotal matters that played an important role in the downfall of the Soviet Union,” he said.
Indeed, the U.S. started backing Al Qaeda’s forefathers even before the Soviets invaded Afghanistan. As Brzezinski told Le Nouvel Observateur in a 1998 interview:
Question: The former director of the CIA, Robert Gates, stated in his memoirs ["From the Shadows"], that American intelligence services began to aid the Mujahadeen in Afghanistan 6 months before the Soviet intervention. In this period you were the national security adviser to President Carter. You therefore played a role in this affair. Is that correct?Brzezinski: Yes. According to the official version of history, CIA aid to the Mujahadeen began during 1980, that is to say, after the Soviet army invaded Afghanistan, 24 Dec 1979. Butthe reality, secretly guarded until now, is completely otherwise Indeed, it was July 3, 1979 that President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. And that very day, I wrote a note to the president in which I explained to him that in my opinion this aid was going to induce a Soviet military intervention.
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Q: And neither do you regret having supported the Islamic fundamentalism, having given arms and advice to future terrorists?
B: What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Moslems or the liberation of Central Europe and the end of the cold war?
The Washington Post reported in 2002:
The United States spent millions of dollars to supply Afghan schoolchildren with textbooks filled with violent images and militant Islamic teachings …
The primers, which were filled with talk of jihad and featured drawings of guns, bullets, soldiers and mines, have served since then as the Afghan school system’s core curriculum. Even the Taliban used the American-produced books ….
The Council on Foreign Relations notes:
The 9/11 Commission report (PDF) released in 2004 said some of Pakistan’s religious schools or madrassas served as “incubators for violent extremism.” Since then, there has been much debate over madrassas and their connection to militancy.
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New madrassas sprouted, funded and supported by Saudi Arabia and U.S. Central Intelligence Agency, where students were encouraged to join the Afghan resistance.
And see this.
Veteran journalist Robert Dreyfuss writes:
For half a century the United States and many of its allies saw what I call the “Islamic right” as convenient partners in the Cold War.
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In the decades before 9/11, hard-core activists and organizations among Muslim fundamentalists on the far right were often viewed as allies for two reasons, because they were seen a fierce anti-communists and because the opposed secular nationalists such as Egypt’s Gamal Abdel Nasser, Iran’s Mohammed Mossadegh.
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By the end of the 1950s, rather than allying itself with the secular forces of progress in the Middle East and the Arab world, the United States found itself in league with Saudi Arabia’s Islamist legions. Choosing Saudi Arabia over Nasser’s Egypt was probably the single biggest mistake the United States has ever made in the Middle East.
A second big mistake … occurred in the 1970s, when, at the height of the Cold War and the struggle for control of the Middle East, the United States either supported or acquiesced in the rapid growth of Islamic right in countries from Egypt to Afghanistan. In Egypt, Anwar Sadat brought the Muslim Brotherhood back to Egypt. In Syria, the United States, Israel, and Jordan supported the Muslim Brotherhood in a civil war against Syria. And … Israel quietly backed Ahmed Yassin and the Muslim Brotherhood in the West Bank and Gaza, leading to the establishment of Hamas.
Still another major mistake was the fantasy that Islam would penetrate the USSR and unravel the Soviet Union in Asia. It led to America’s support for the jihadists in Afghanistan. But … America’s alliance with the Afghan Islamists long predated the Soviet invasion of Afghanistan in 1979 and had its roots in CIA activity in Afghanistan in the 1960s and in the early and mid-1970s. The Afghan jihad spawned civil war in Afghanistan in the late 1980s, gave rise to the Taliban, and got Osama bin Laden started on building Al Qaeda.
Would the Islamic right have existed without U.S. support? Of course. This is not a book for the conspiracy-minded. But there is no question that the virulence of the movement that we now confront—and which confronts many of the countries in the region, too, from Algeria to India and beyond—would have been significantly less had the United States made other choices during the Cold War.
In other words, if the U.S. and our allies hadn’t backed the radical violent Muslims instead of more stable, peaceful groups in the Middle East, radical Islam wouldn’t have grown so large.
Pakistani nuclear scientist and peace activist Perez Hoodbhoy writes:
Every religion, including Islam, has its crazed fanatics. Few in numbers and small in strength, they can properly be assigned to the “loony” section. This was true for Islam as well until 1979, the year of the Soviet invasion of Afghanistan. Indeed, there may well have been no 911 but for this game-changer.
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Officials like Richard Perle, Assistant Secretary of Defense, immediately saw Afghanistan not as the locale of a harsh and dangerous conflict to be ended but as a place to teach the Russians a lesson. Such “bleeders” became the most influential people in Washington .
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The task of creating such solidarity fell upon Saudi Arabia, together with other conservative Arab monarchies. This duty was accepted readily and they quickly made the Afghan Jihad their central cause…. But still more importantly, to go heart and soul for jihad was crucial at a time when Saudi legitimacy as the guardians of Islam was under strong challenge by Iran, which pointed to the continued occupation of Palestine by America’s partner, Israel. An increasing number of Saudis were becoming disaffected by the House of Saud – its corruption, self-indulgence, repression, and closeness to the US. Therefore, the Jihad in Afghanistan provided an excellent outlet for the growing number of militant Sunni activists in Saudi Arabia, and a way to deal with the daily taunts of the Iranian clergy.
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The bleeders soon organized and armed the Great Global Jihad, funded by Saudi Arabia, and executed by Pakistan. A powerful magnet for militant Sunni activists was created by the US. The most hardened and ideologically dedicated men were sought on the logic that they would be the best fighters. Advertisements, paid for from CIA funds, were placed in newspapers and newsletters around the world offering inducements and motivations to join the Jihad.
American universities produced books for Afghan children that extolled the virtues of jihad and of killing communists. Readers browsing through book bazaars in Rawalpindi and Peshawar can, even today, sometimes find textbooks produced as part of the series underwritten by a USAID $50 million grant to the University of Nebraska in the 1980′s . These textbooks sought to counterbalance Marxism through creating enthusiasm in Islamic militancy. They exhorted Afghan children to “pluck out the eyes of the Soviet enemy and cut off his legs”. Years after the books were first printed they were approved by the Taliban for use in madrassas – a stamp of their ideological correctness and they are still widely available in both Afghanistan and Pakistan.
At the international level, Radical Islam went into overdrive as its superpower ally, the United States, funneled support to the mujahideen. Ronald Reagan feted jihadist leaders on the White House lawn, and the U.S. press lionized them.
And the chief of the visa section at the U.S. consulate in Jeddah, Saudi Arabia (J. Michael Springmann, who is now an attorney in private practice) says that the CIA insisted that visas be issued to Afghanis so they could travel to the U.S. to be trained in terrorism in the United States, and then sent back to Afghanistan to fight the Soviets.
1993 World Trade Center Bombing
New York District Attorney Robert M. Morgenthau believed that the intelligence services could and should have stopped the 1993 bombing of the World Trade Center, but they were preoccupied with other issues cover. As well-known investigative journalist Robert I. Friedman wrote in New York Magazine in 1995:
Shiekh Omar Abdel Rahman commands an almost deified adoration and respect in certain Islamic circles. It was his 1980 fatwa – religious decree – condemning Anwar Sadat for making peace with Israel that is widely believed to be responsible for Sadat’s assassination a year later. (Rahman was subsequently tried but acquitted.)
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The CIA paid to send Abdel Rahman to Peshawar ‘to preach to the Afghans about the necessity of unity to overthrow the Kabul regime,’ according to Professor Rubin. By all accounts, Rahman was brilliant at inspiring the faithful.
As a reward for his services, the CIA gave the sheikh a one-year visa to the United States in May, 1990 – even though he was on a State Department terrorism watch list that should have barred him from the country.
After a public outcry in the wake of the World Trade Centre bombing, a State Department representative discovered that Rahman had, in fact, received four United States visas dating back to December 15, 1986. All were given to him by CIA agents acting as consular officers at American embassies in Khartoum and Cairo. The CIA officers claimed they didn’t know the sheikh was one of the most notorious political figures in the Middle East and a militant on the State Department’s list of undesirables. The agent in Khartoum said that when the sheikh walked in the computers were down and the Sudanese clerk didn’t bother to check the microfiche file.
Says one top New York investigator: ‘Left with the choice between pleading stupidity or else admitting deceit, the CIA went with stupidity.’
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The sheikh arrived in Brooklyn at a fortuitous time for the CIA. In the wake of the Soviet Union’s retreat from Afghanistan, Congress had slashed the amount of covert aid going to the mujaheddin. The international network of Arab-financed support groups became even more vital to the CIA, including the string of jihad offices that had been set up across America with the help of Saudi and American intelligence. To drum up support, the agency paved the way for veterans of the Afghan conflict to visit the centres and tell their inspirational war stories; in return, the centres collected millions of dollars for the rebels at a time when they needed it most.
There were jihad offices in Jersey City, Atlanta and Dallas, but the most important was the one in Brooklyn, called Alkifah – Arabic for ‘the struggle.’ That storefront became the de facto headquarters of the sheikh.
***
On November 5, 1990, Rabbi Meir Kahane, an ultra-right-wing Zionist militant, was shot in the throat with a .357 magnum in a Manhattan hotel; El-Sayyid Nosair was gunned down by an off-duty postal inspector outside the hotel, and the murder weapon was found a few feet from his hand.
A subsequent search of Nosair’s Cliffside Park, New Jersey home turned up forty boxes of evidence – evidence that, had the D.A.’s office and the FBI looked at it more carefully, would have revealed an active terrorist conspiracy about to boil over in New York.
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In addition to discovering thousands of rounds of ammunition and hit lists with the names of New York judges and prosecutors, investigators found amongst the Nosair evidence classified U.S. military-training manuals.
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Also found amongst Nosair’s effects were several documents, letters and notebooks in Arabic, which when eventually translated would point to e terror conspiracy against the United States. The D.A.’s office shipped these, along with the other evidence, to the FBI’s office at 26 Federal Plaza. ‘We gave all this stuff to the bureau, thinking that they were well equipped,’ says one source close to the D.A.’s office. ‘After the World Trade Centre, we discovered they never translated the material.’
According to other sources familiar with the case, the FBI told District Attorney Robert M. Morgenthau that Nosair was a lone gunman, not part of a broader conspiracy; the prosecution took this position at trial and lost, only convicting Nosair of gun charges. Morgenthau speculated the CIA may have encouraged the FBI not to pursue any other leads, these sources say. ‘The FBI lied to me,’ Morgenthau has told colleagues. ‘They’re supposed to untangle terrorist connections, but they can’t be trusted to do the job.’
Three years later, on the day the FBI arrested four Arabs for the World Trade Centre bombing, saying it had all of the suspects, Morgenthau’s ears pricked up. He didn’t believe the four were ‘self-starters,’ and speculated that there was probably a larger network as well as a foreign sponsor. He also had a hunch that the suspects would lead back to Sheikh Abdel Rahman. But he worried that the dots might not be connected because the U.S. government was protecting the sheikh for his help in Afghanistan.
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Nevertheless, some in the D.A.’s office believe that until the Ryder van exploded underneath New York’s tallest building, the sheikh and his men were being protected by the CIA. Morgenthau reportedly believes the CIA brought the sheikh to Brooklyn in the first place….
As far as can be determined, no American agency is investigating leads suggesting foreign-government involvement in the New York terror conspiracy. For example, Saudi intelligence has contributed to Sheikh Rahman’s legal-defence fund, according to Mohammed al-Khilewi, the former first secretary to the Saudi mission at the U.N.
Friedman notes that intelligence agents had possession of notes which should have linked all of these terrorists, but failed to connect the dots prior to 1993.
CNN ran a special report in 1994 called “Terror Nation? U.S. Creation?“, which noted – assummarized by Congressman Peter Deutsch:
Some Afghan groups that have had close affiliation with Pakistani Intelligence are believed to have been involved in the [1993] New York World Trade Center bombings.
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Pro-Western afghan officials … officially warned the U.S. government about Hekmatyar no fewer than four times. The last warning delivered just days before the [1993] Trade Center attack.” Speaking to former CIA Director Robert Gates, about Gulbuddin Hekmatyar, Peter Arnett reports, “The Pakistanis showered Gulbuddin Hekmatyar with U.S. provided weapons and sang his praises to the CIA. They had close ties with Hakmatyar going back to the mid-1970′s.”
This is interesting because it is widely-acknowledged that Gulbuddin Hekmatyar was enthusiastically backed by the U.S. For example, U.S. News and World Report says:
[He was] once among America’s most valued allies. In the 1980s, the CIA funneled hundreds of millions of dollars in weapons and ammunition to help them battle the Soviet Army during its occupation of Afghanistan. Hekmatyar, then widely considered by Washington to be a reliable anti-Soviet rebel, was even flown to the United States by the CIA in 1985.
CIA Trained Ramzi Yousef and Other Key Terrorists
Moreover, Jane’s Defense Weekly – a respected and widely-cited British military journal – reported in October 2001 that Ramzi Yousef and the other World Trade Center bombers were trained by the CIA and ISI (via the Internet Archive):
Pakistan’s sinister Inter Services Intelligence (ISI) remains the key to providing accurate information to the US-led alliance in its war against Osama bin Laden and his Taliban hosts in Afghanistan. Known as Pakistan’s ‘secret army’ and ‘invisible government’, its shadowy past is linked to political assassinations and the smuggling of narcotics as well as nuclear and missile components.
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The ISI chief, Lt Gen Mahmood Ahmed, who was visiting Washington when New York and the Pentagon were attacked, agreed to share desperately needed information about the Taliban with the Central Intelligence Agency (CIA) and other US security officials. The CIA has well-established links with the ISI, having trained it in the 1980s to ‘run’ Afghan mujahideen (holy Muslim warriors), Islamic fundamentalists from Pakistan as well as Arab volunteers by providing them with arms and logistic support to evict the Soviet occupation of Kabul.
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After the ignominious Soviet withdrawal from Kabul in 1989 the ISI, determined to achieve its aim of extending Pakistan’s ‘strategic depth’ and creating an Islamic Caliphate by controlling Afghanistan and the Central Asian Republics, began sponsoring a little-known Pathan student movement in Kandhar that emerged as the Taliban. The ISI used funds from Prime Minister Benazir Bhutto’s federal government and from overseas Islamic remittances to enrol graduates from thousands of madrassahs (Muslim seminaries) across Pakistan to bolster the Taliban (Islamic students), who were led by the reclusive Mullah Muhammad Omar. Thereafter, through a ruthless combination of bribing Afghanistan’s ruling tribal coalition (which was riven with internecine rivalry), guerrilla tactics and military support the ISI installed the Taliban regime in Kabul in 1996. It then helped to extend its control over 95 per cent of the war-torn country and bolster its military capabilities. The ISI is believed to have posted additional operatives in Afghanistan just before the 11 September attacks in the US. Along with Osama bin Laden, intelligence sources say a number of other infamous names emerged from the 1980s ISI-CIA collaboration in Afghanistan. These included Mir Aimal Kansi, who assassinated two CIA officers outside their office in Langley, Virginia, in 1993, Ramzi Yousef and his accomplices involved in the New York World Trade Center bombing five years later as well as a host of powerful international narcotics smugglers.
Ramzi Yousef was not only the mastermind of the 1993 World Trade Center bombing, but also a key member of the Bojinka Plot … the blueprint for 9/11.
Bosnia
As professor of strategy at the Naval War College and former National Security Agency intelligence analyst and counterintelligence officer John R. Schindler documents, the U.S. supported Bin Laden and other Al Qaeda terrorists in Bosnia.
2001
Former counter-terrorism boss Richard Clarke theorizes that top CIA brass tried to recruit the hijackers and turn them to our side, but were unsuccessful. And – when they realized had failed – they covered up their tracks so that the FBI would not investigate their illegal CIA activities , “malfeasance and misfeasance”, on U.S. soil.
And according to reports from Bloomberg, an ABC News investigative reporter and others, one of the main trainers of Bin Laden and Al Qaeda worked at various times for the CIA, FBI and Green Berets.
The bottom line, sadly, is that the U.S. has backed the world’s most dangerous and radical Muslim terrorists for decades. And see this.

Kremlin Clears Way for Force in Ukraine; Separatist Split Feared

New York Times
March 1, 2014

SIMFEROPOL, Ukraine — As Russian armed forces effectively seized control of Ukraine’s Crimean peninsula on Saturday, the Russian Parliament granted President Vladimir V. Putin the authority he sought to use military force in response to the deepening instability in Ukraine.
The authorization cited a threat to the lives of Russian citizens and soldiers stationed in Crimea and other parts of Ukraine, and provided a blunt answer to President Obama, who on Friday pointedly warned Russia to respect Ukraine’s territorial sovereignty.
Even before Mr. Putin’s statement in Moscow, scores of heavily armed soldiers had tightened their grip on the Crimean capital, Simferopol, surrounding government buildings, shuttering the airport, and blocking streets, where they deployed early Friday.
Read the entire article

Krauthammer’s Take: Obama Tells the World We Aren’t Going to Do Anything About Invasion of Ukraine

National Review
March 1, 2014




As reports are coming in that Russia has placed 2,000 troops in Crimea, within the borders of Ukraine, President Obama said that “the United States will stand with the international community in affirming that there will be costs for any military intervention in Ukraine.”
Charles Krauthammer responded on Special Report tonight saying, “The Ukrainians, and I think everybody, is shocked by the weakness of Obama’s statement. I find it rather staggering.”
Krauthammer thinks Obama’s statement is about “three levels removed” from actual action. He explained: Obama said “we will stand with the international community — meaning we are going to negotiate with a dozen other countries who will water down the statement — in affirming that there will be costs — meaning in making a statement not even imposing a cost, but in making a statement about imposing a cost — for any military intervention.”
 “What he’s saying is we’re not really going to do anything and we’re telling the world,” Krauthammer said.

Wednesday, February 26, 2014

Ron Paul:United States Pushing it's own Agenda in Ukraine - A Coup D' etat

SIC SEMPER TYRANNIS!!! News
Mark Matheny
February 26, 2014

Former Senator Ron Paul says the U.S. is pushing it's own agenda in the Ukraine...







Russia War Games Over Ukraine Prompts U.S. Warning

The Blaze
February 26, 2014

KIEV, Ukraine (AP) — Russia ordered 150,000 troops to test their combat readiness Wednesday in a show of force that prompted a blunt warning from the United States that any military intervention in Ukraine would be a “grave mistake.”
Vladimir Putin’s announcement of huge new war games came as Ukraine’s protest leaders named a millionaire former banker to head a new government after the pro-Russian president went into hiding.
The new government, which is expected to be formally approved by parliament Thursday, will face the hugely complicated task of restoring stability in a country that is not only deeply divided politically but on the verge of financial collapse. Its fugitive president, Viktor Yanukovych, fled the capital last week.
Russia War Games Over Ukraine Prompts U.S. Warning
Russian President Vladimir Putin heads the Security Council focused on Ukraine in Moscow’s Kremlin on Tuesday, Feb. 25, 2014. (AP Photo/RIA Novosti, Alexei Druzhinin, Presidential Press Service)
In Kiev’s Independence Square, the heart of the protest movement against Yanukovych, the interim leaders who seized control after he disappeared proposed Arseniy Yatsenyuk as the country’s new prime minister. The 39-year-old served as economy minister, foreign minister and parliamentary speaker before Yanukovych took office in 2010, and is widely viewed as a technocratic reformer who enjoys the support of the U.S.
Across Ukraine, the divided allegiances between Russia and the West were on full display as fistfights broke out between pro- and anti-Russia protesters in the strategic Crimea peninsula.
Amid the tensions, Putin put the military on alert for massive exercises involving most of the military units in western Russia, and announced measures to tighten security at the headquarters of Russia’s Black Sea Fleet on Ukraine’s Crimea peninsula.

Russian spy ship docked in Havana

Yahoo News
February 26, 2014

Havana (AFP) - A Russian warship was docked in Havana Wednesday, without explanation from Communist Cuba or its state media.
The Viktor Leonov CCB-175 boat, measuring 91.5 meters (300 feet) long and 14.5 meters wide, was docked at the port of Havana's cruise ship area, near the Russian Orthodox Cathedral.
The Vishnya, or Meridian-class intelligence ship, which has a crew of around 200, went into service in the Black Sea in 1988 before it was transferred seven years later to the northern fleet, Russian media sources said.
Neither Cuban authorities nor state media have mentioned the ship's visit, unlike on previous tours by Russian warships.
The former Soviet Union was Cuba's sponsor state through three decades of Cold War. After a period of some distancing under former Russian president Boris Yeltsin, the countries renewed their political, economic and military cooperation.
The ship is reportedly armed with 30mm guns and anti-aircraft missiles.
Its visit comes as isolated Havana's current economic and political patron, Venezuela, is facing unprecedented violent protests against President Nicolas Maduro's government.
Cuban President Raul Castro's Communist government is the Americas' only one-party regime.

Personal income faces first year-over-year drop since recession ended: As incomes collapse, spending via consumer credit begins to increase.

MyBudget360
February 26, 2014

There is little doubt that our economy runs on access to debt.  Not a tiny bit of debt.  But Himalayan mountains of debt.  The banking crisis was pitched to the public as one of liquidity but in reality, it was one of solvency.  The difference?  One is a temporary inability to repay debts while the other is a complete mathematical inability to support current debts based on income.  The Fed has done everything to increase access to debt to member banks to re-inflate their balance sheets.  Those that think inflation is non-existent need only look at housing values, college tuition, and healthcare costs and see how realistic that is based on their income growth.  This leads us to our current article in terms of personal income.  The latest reading shows that personal income had its first year-over-year drop since the recession ended.  This further underscores the massive disconnect between the stock market and regular American households.  A large part of boosting corporate profits involved slashing wages, benefits, and households making due with less.  This has increased the wealth and income inequality in our nation as the stock market reaches a new apex.  What is troubling is that now that banks are flooded with easy access to credit, they are starting to lend to cash strapped households in a fashion similar to our last credit bubble.
Personal incomes fall
I’m not sure if people are aware of how rare it is for personal income to fall on a year-over-year basis in a fiat system where inflation is championed. 
Inflation when it goes hand in hand with income growth is rarely felt by the public at large.  However, as we have discussed with the shrinking middle class, inflation with no subsequent wage growth translates to a declining standard of living.
Going back to data form the 1950s personal income never declined on a year-over-year timeframe.  That is until the Great Recession.  So this recent reading showing personal income declining year-over-year is notable:
personal income
It is rather clear what is going on here.  Starting in the late 1990s, we see that personal income was facing some severe constraints on growth.  That is, until the debt bubble of the 2000s papered over the reality of growing wealth and income inequality.  The public of course mistook access to debt as access to wealth.  Of course debt needs to be paid back and paid back with what?  Income.  This is why income and debt are two sides of the same coin.  Eventually reality catches up.  It may take a few years or a generation as we are witnessing, but at a certain point debt no longer has the underlying boosting impact it once did.  This is why we are seeing cheap mortgage rates not helping out regular income strapped home buyers in the housing market because large banks and investors are crowding out regular home buyers with cash strapped balance sheets.
Substituting income growth for debt growth
Banks have already gotten their fill from bailouts and very friendly accounting rules bending to assist a shadow bailout.  Yet the public has not benefitted since the Great Recession officially ended in the summer of 2009.
Now that banks have had their fill and the stock market makes new peaks, we see lending now coming back into the system for regular Americans.  But is this good if incomes are declining?
personal savings rate
The above chart is illuminating.  It shows that Americans are substituting saving for purchases with going into debt, once again.  Revolving debt took a hit during the Great Recession but only recently has it started to increase.  This wouldn’t be such an issue if incomes and good paying jobs were abundant but they are not.  Instead Americans to keep up with the rising cost of goods are now using an old trick of borrowing to make up where incomes are faltering.
Deep changes to economy
This Great Recession was no ordinary recession.  We now have nearly 48 million Americans on food stamps at the same time the stock market reaches a new peak.  Not that this helps many since most Americans don’t own stocks and recent corporate profits have been boosted by slashing wages, cutting benefits, and simply squeezing more out of current workers.  This is why we are seeing growing inequality.  You also see some major structural changes in terms of employment:
amount of time spent in unemployment
The average duration of unemployment is still incredibly high at over 35 weeks.  In previous recession, the high point was typically around 20 weeks and we’ve had some bad recession since 1940.  Nothing however, like this current economic shift.  Remember that this high average duration of unemployment is happening nearly five years after the official end of the Great Recession in the summer of 2009.  All this information simply points to a shrinking middle class and more inflation in items that matter for regular buyers (i.e., homes, cars, tuition, healthcare, etc).  You don’t need to be an economist to know that falling personal income in a consumer based economy is a bad sign.

Monday, February 24, 2014

Pentagon plans to shrink US Army to pre-WWII level

Yahoo News
February 24, 2014

Washington (AFP) - The Pentagon plans to scale back the US Army by more than an eighth to its lowest level since before World War II, signaling a shift after more than a decade of ground wars.

Saying it was time to "reset" for a new era, Defense Secretary Chuck Hagel recommended shrinking American forces from 520,000 active duty troops to between 440,000 and 450,000.
In a speech outlining the proposed defense budget, he said Monday that after Iraq and Afghanistan, US military leaders no longer plan to "conduct long and large stability operations."
If approved by Congress, the Pentagon move would reduce the army to its lowest manning levels since 1940, before the American military dramatically expanded after entering World War II.
The proposed 13 percent reduction in the army would be carried out by 2017, a senior defense official, who spoke on condition of anonymity, told AFP.

Sunday, February 23, 2014

Ukraine: Western Powers Sleepwalking Into Destructive Conflict

Paul Craig Roberts
Infowars.com
February 23, 2014
On the 100th Anniversary of World War 1, the Western powers are again sleepwalking into destructive conflict. Hegemonic ambition has Washington interfering in the internal affairs of Ukraine, but developments seem to be moving beyond Washington’s control.
Image: Ukraine Uprising (Wikimedia Commons).
Regime change in Ukraine for a mere $5 billion dollars would be a bargain compared to the massive sums squandered in Iraq ($3,000 billion), Afghanistan ($3,000 billion), Somalia, and Libya, or the money Washington is wasting murdering people with drones in Pakistan and Yemen, or the money Washington has spent supporting al Qaeda in Syria, or the massive sums Washington has wasted surrounding Iran with 40 military bases and several fleets in the Persian Gulf in an effort to terrorize Iran into submission.
So far, in Washington’s attempt at regime change in Ukraine large numbers of Americans are not being killed and maimed. Only Ukrainians are dying, all the better for Washington as the deaths are blamed on the Ukrainian government that the US has targeted for overthrow.
The problem with Washington’s plot to overthrow the elected government of Ukraine and install its minions is twofold: The chosen US puppets have lost control of the protests to armed radical elements with historical links to nazism, and Russia regards an EU/NATO takeover of Ukraine as a strategic threat to Russian independence.
Washington overlooked that the financially viable part of today’s Ukraine consists of historical Russian provinces in the east and south that the Soviet leadership merged into Ukraine in order to dilute the fascist elements in western Ukraine that fought for Adolf Hitler against the Soviet Union. It is these ultra-nationalist elements with nazi roots, not Washington’s chosen puppets, who are now in charge of the armed rebellion in Western Ukraine.
If the democratically elected Ukraine government is overthrown, the eastern and southern parts would rejoin Russia. The western part would be looted by Western bankers and corporations, and the NATO Ukraine bases would be targeted by Russian Iskander missiles.
It would be a defeat for Washington and their gullible Ukrainian dupes to see half of the country return to Russia. To save face, Washington might provoke a great power confrontation, which could be the end of all of us.
My series of articles on the situation in Ukraine resulted in a number of interviews from Canada to Russia, with more scheduled. It also produced emotional rants from people of Ukrainian descent whose delusions are impenetrable by facts. Deranged Russophobes dismissed as propaganda the easily verifiable report of Assistant Secretary of State Nuland’s public address last December, in which she boasted that Washington had spent $5 billion preparing Ukraine to be aligned with Washington’s interests. Protest sympathizers claim that the intercepted telephone call between Nuland and the US Ambassador in Ukraine, in which the two US officials chose the government that would be installed following the coup, is a fake.
One person actually suggested that my position should be aligned with the “sincerity of the Kiev students,” not with the facts.
Some Trekkers and Trekkies were more concerned that I used an improper title for Spock than they were with the prospect of great power confrontation. The point of my article flew off into space and missed planet Earth.
Spock’s mental powers were the best weapon that Starship Enterprise had. Among my graduate school friends, Spock was known as Dr. Spock, because he was the cool, calm, and unemotional member of the crew who could diagnose the problem and save the situation.
There are no Spocks in the US or any Western government and certainly not among the Ukrainian protesters.
I have often wondered if Spock’s Vulcan ancestry was Gene Roddenberry’s way of underlining by contrast the fragility of human reason. In the context of modern military technology, is it possible for life to survive humanity’s penchant for emotion to trump reason and for self-delusion to prevail over factual reality?
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.

CBO: Debt to Reach 80% of GDP in a Decade

News Max
February 23, 2014

An ominous new report from the Congressional Budget Office paints a bleak picture for America's future, projecting that entitlement spending will send the federal deficit soaring beyond previous estimates.
Federal entitlement spending is projected to rise at an average annual rate of 5.9 percent over the coming decade, increasing spending from $2.1 trillion this year to $3.7 trillion in 2024.

The CBO also projects that the federal budget deficit will rise to more than 4 percent of GDP in the latter part of the coming decade. From 2015 to 2024, the cumulative deficit will reach $7.9 trillion, $1 trillion higher than previously projected.

That would push debt held by the public to nearly 80 percent of GDP in 2024, "far above the post-war norm for the United States and perilously close to levels from which it is hard to recover," James C. Capretta noted in an article published by the Manhattan Institute's Economic Policies for the 21st Century.
But the actual economic situation could be far worse. The CBO projections assume an average annual growth rate in discretionary spending of only 1.8 percent. This would likely take defense spending as a percentage of GDP down to levels "not seen in the post-war era — at a time when global conflicts and potential threats are clearly on the rise," observed Capretta, a senior fellow at the Ethics & Public Policy Center and a visiting fellow at the American Enterprise Institute.

Looking further into the future, deficits are projected to rise even more sharply in years beyond the coming decade due to an aging population and healthcare inflation. The CBO expects debt held by the public to reach 190 percent of GDP by 2038. And that's assuming the nation will not experience another serious economic downturn.

What's more, the CBO projections don't include data on total state debt, which the Insider Report last week disclosed has already topped $5 trillion.

"At the beginning of the Obama presidency, the administration convened a fiscal responsibility summit during which there was a lot of talk about the need to finally address the ticking time bomb of runaway entitlement spending," Capretta wrote. "Suffice it to say that, in year 6 of the Obama presidency, people are not holding their breath that a breakthrough on entitlements is imminent."

He concluded: "It would be far better to take action now and head off the crisis before it ever happens than to wait for the crisis to hit and then attempt to scale back benefit commitments."

Comparing the inflated cost of living today from 1950 to 2014: How declining purchasing power has hurt the middle class since 1950.

MyBudget360
February 23, 2014

Inflation has a subtle eroding effect that impacts entire economies.  In the United States, we have been fortunate to have relatively stable rates of inflation for two generations.  Even in times of high inflation like the 1970s, people were able to adjust unlike places that experience uncontrolled inflation like Argentina is currently facing.  Also, wages rose in tandem which helped buffer the pain of higher costs.  Today however, inflation has eroded the purchasing power of the middle class.  Only when we look at longer periods of time do we see the large impact inflation has on our ability to buy real goods and services.  People found a piece comparing 1938 and 2013 prices on various goods and items to be enlightening.  Since our middle class did not fully emerge until the end of World War II, it might be useful to compare the price of items back from 1950 to where things stand today.  Has inflation had a big impact on our purchasing power since 1950?
1950 living versus that of 2014
It might be useful to first look at a few common items from 1950:
The average family income:        $3,300
The average car cost:                     $1,510
The median home price:               $7,354
These are three very important metrics when it comes to measuring purchasing power in the United States.  Since we consider having a car and a home as cornerstones to a middle class lifestyle, it is useful to look at these figures since we can easily grab these figures from reliable sources.
See below for source data:
average family income
Source:  US Department of Commerce
Then we can see the median home price:
1950 price of homes
Source:  US Census
A Ford car could be had with a price range of $1,339 to $2,262 depending on the model.  Income is an important measure because it gives us an insight into how well families are doing and how much money is being spent on certain items.  So let us derive ratios for each of the items for the 1950s:
Home price / income =  2.2
Car cost / income =         .45 
This is important here.  The typical home cost 2.2 times annual income while a car cost .45 times annual income.  Let us now fast forward to 2014 and see where these things stand:
The average family income:        $51,017
The average car cost:                     $31,252
The median home price:               $188,900
Let us show the data here:
median home price 2014
Source:  National Association of Realtors
average car cost 2014
Household income was pulled from Census data based on what the typical household earns.  Inflation has a subtle way of eroding purchasing power.  Let us pull some ratios here:
Home price / income =  3.7
Car cost / income =         .61
Housing has gotten dramatically more expensive.  The cost of a new car has gone up but not so noticeably when looking at inflation data.  Inflation has largely eaten away at income on other fronts like college tuition and healthcare.  These were much more affordable back in the 1950s relative to overall income.
For example, in 1950 at the University of Pennsylvania annual tuition was $600:
univ of penn 1950
We should run a ratio here as well:
Tuition / income = .18
Let us look at current tuition costs:
2014 tuition
Current tuition is over $40,000 per year.
Tuition / income = .79
This is a massive change.  In 1950, a family sending their child to the University of Pennsylvania would only spend 18 percent of their annual income (if they paid in cash) to send their kid to study.  Today it would consume 79 percent of gross annual income.  Even if we look at net take home pay a regular family in no way could send their child to school without going into massive student debt.
A good portion of inflation over this time has been masked by massive amounts of debt and financing.  Car purchases, mortgages, and college are now financed long-term.  Low rateshave masked this erosion but with rates reaching the lower bound of the range, the pain of inflation is now being felt by many households.

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