A tectonic shift may be taking place throughout the global markets, but you wouldn't know it from watching CNBC. When the tremors start, there'll be a rush to safe haven, which begs that fundamental question: paper or metal?

The Cycles Roll On

On an almost predictable, totally certain cyclic basis, financial market crises throw up one pat question, with only one pat answer. What does the survival of our current finance, monetary and economic system depend on? It depends on people preferring fiat money more than gold.

From the moment in 1971 when US president Nixon "broke the link with gold", the dollar floated free and made the cyclic attempts to demonetize gold a permanent feature of the financial market system, and the collateral cause of its regular and cyclic crises. To be sure, the banksters operating this permanent rearguard action fighting reality are not going to tell us when the next "reset" will happen - but it will be soon.

After the dollar was taken off the gold standard in 1971, bankers had to run harder and faster to keep fiat money assets performing better than precious metals, and during the cyclic crises they have to take off the gloves to beat down the rising value of gold against declining fiat money. Usually presented as a permanent struggle to only bolster and save the US dollar, it in fact concerns all fiat moneys and all financial assets and instruments. Related parts of the struggle include the permanent need to lie about inflation and "positively influence inflation expectations" now featuring the prevention of deflation from eating away confidence, on the other side of the mirror.

UK Gold Dump
As we know, extreme and laughable action is regularly taken, during cyclic crisis periods, to "destroy gold and save fiat". The UK's Gordon Brown, when finance minister at the turn of the century in 1999-2002 embarked on a no-holds-barred and officially proclaimed selling spree of UK gold reserves, when gold prices were at their lowest in 20 years. Brown was following the US Fed's strategy of pushing down gold prices by announcing the sales. There was no interest in "getting a good price" for gold, only the intention of bringing down its price as low as possible.

In less than 3 years over 17 auctions, Brown dumped about 400 tons of gold.

This was the trigger moment for a long and rabid growth of equity and commodity prices, in fact of any financial asset that could be invented and traded. The "historic low" for gold at the turn of the century ran back-to-back with what Wall Street veteran financial lawyer Jim Rickards called the "derivatization of financial markets", the creation of untold massive quantities of tradable paper which as Rickards says are "used to manipulate underlying physical markets such as oil, copper and gold" as well as equities, currencies, interest rates and anything else which can be traded. Soon, the market became much too big to beat, but also asphyxiated and drowned itself in paper.

As Rickards has many times described along with other experts, saving fiat and destroying gold opened the door to an exponential growth of both the size and variety pf what are politely called "off-balance-sheet instruments" hidden by all the major banks and impossible to quantify let alone monitor. And at all times able to implode.

The director of the Ministry of Health in Israel, Roni Gamzo, has issued a formal directive instructing that gynaecologists should stop injecting Ethiopian women with the contraceptive Depo-Provera without their knowledge or consent.

The directive, issued last week, comes after around 30 Ethiopian Jews who had emigrated to Israel said they had been told that they would not be allowed into the country without receiving the contraceptive drug.

Within Israel, Ethiopian Jews make up the majority of those given the drug, according to a report published in 2010 by Isha le'Isha, a women's rights organization; 57 percent of women who had received the drug in Israel are Ethiopian Jews, although they account for less than 2 percent of the overall population.

"We believe it is a method of reducing the number of births in a community that is Black," Hedva Eyal, the author of the report, told Israeli media. "It is indeed the first time that the state actually acknowledged that this procedure of injecting immigrant women with this drug, when they do not know the side effects and are given no other choice, is wrong."

The US House approved a five-year, nearly $1 trillion farm bill Wednesday reforming the federal government's crop subsidy system but cutting food stamps to pare the deficit.

The mammoth bill, which has been some three years in the making and endured more than one collapse in negotiations in 2013, enjoyed bipartisan support in passing 251-166.

It now heads to the Senate where it could be voted on as early as Friday. It is expected to pass.

The White House said Wednesday that President Barack Obama would sign the 959-page bill should it reach his desk.

"Overall, this legislation is a positive step forward that invests in rural development, bio-based energy, conservation, and agricultural research and that will provide certainty and stability for families in need, for farming communities, and for our commodity markets," senior House Democrat Steny Hoyer said.

The compromise bill reduces the US deficit by some $23 billion, far less than what was sought by dozens of House conservatives eager to dramatically slash federal spending.

As the public finally becomes outraged over the NSA's illegal spying, members of government and the corporate media wage an information war to misdirect that anger to issues of less importance.

To counteract this, a bold new citizen-led initiative to nullify the NSA is now gaining momentum around the United States.

This is the GRTV Backgrounder on Global Research TV.


One of the less-remembered parts of the Osama bin Laden fairytale was that the NSA had a hard time keeping track of his communications with his Al CIAda operatives. Why? Because, as General Michael Hayden told CBS News back in early 2001, bin Laden used standard encryption and off-the-shelf American telecommunication products.

Sound unbelievable? That's because it is. As they go on to admit in that very same report, they were tracking bin Laden's satellite phone after all, and as James Bamford and others have described in exhaustive detail, the NSA was monitoring Al Qaeda's "communications hub" in Yemen for years prior to 9/11, and purposefullly withholding most of that information from the CIA bin Laden unit. But the idea that the NSA just wasn't able to track bin Laden because of his dastardly technology was a key meme for the NSA to implant in the immediate wake of 9/11. That's why the Hayden interview was replayed on CBS less than 48 hours after the attacks, and that's why, as recently declassified documents show, the NSA used 9/11 as an official talking point to justify their illegal surveillance of Americans.

Last week, I explained how economists and policymakers destroyed our economy for the sake of short-term corporate profits from jobs offshoring and financial deregulation.

That same week Business Week published an article, "Factory Jobs Are Gone. Get Over It," by Charles Kenny. Kenny expresses the view of establishment economists, such as Brookings Institute economist Justin Wolfers who wants to know "What's with the political fetish for manufacturing? Are factories really so awesome?"

"Not really," Kenny says. Citing Eric Fisher of the Cleveland Federal Reserve Bank, Kenny reports that wages rise most rapidly in those states that most quickly abandon manufacturing. Kenny cites Gary Hufbauer, once an academic colleague of mine now at the Peterson Institute, who claims that the 2009 tariffs applied to Chinese tire imports cost US consumers $1 billion in higher prices and 3,731 lost retail jobs. Note the precision of the jobs loss, right down to the last 31.

Lawmakers in both chambers of US Congress have reportedly reached a deal to cut almost $9 billion from the food stamp program on which nearly 47 million Americans rely to afford food.

The cuts to the program, which will affect nearly a million households over the next decade, are part of multi-year farm bill which sets spending levels for federal agriculture and food policy.

The giant piece of legislation is expected to get a vote in the House of Representatives on Wednesday, after which it will be subject to a vote in the Senate.

The cuts are a compromise between nearly $40 billion in cuts to the program approved by the Republican-controlled House of Representatives and a $4 billion reduction approved by the Democratic-controlled Senate.

The Supplemental Nutrition Assistance Program (SNAP) has already undergone a $5 billion cut when a temporary increase in food stamp dollar expired on Nov. 1.

A household of three lost $29 in food aid per month as a result of the cuts that left each person to spend an average of $1.40 per meal.

"Epic in scale, unprecedented in world history."

That is how William K. Black, professor of law and economics and former bank fraud investigator, describes the frauds in which JPMorgan Chase (JPM) has now been implicated. They involve more than a dozen felonies, including bid-rigging on municipal bond debt; colluding to rig interest rates on hundreds of trillions of dollars in mortgages, derivatives and other contracts; exposing investors to excessive risk; failing to disclose known risks, including those in the Bernie Madoff scandal; and engaging in multiple forms of mortgage fraud.

So why, asks Chicago Alderwoman Leslie Hairston, are we still doing business with them? She plans to introduce a city council ordinance deleting JPM from the city's list of designated municipal depositories. As quoted in the January 14^th Chicago Sun-Times:

The bank has violated the city code by making admissions of dishonesty and deceit in the way they dealt with their investors in the mortgage securities and Bernie Madoff Ponzi scandals. . . . We use this code against city contractors and all the small companies, why wouldn't we use this against one of the largest banks in the world?

A similar move has been recommended for the City of Los Angeles by L.A. City Councilman Gil Cedillo. But in a January 19th editorial titled "There's No Profit in L A. Bashing JPMorgan Chase," the L.A. Times editorial board warned against pulling the city's money out of JPM and other mega-banks - even though the city attorney is suing them for allegedly causing an epidemic of foreclosures in minority neighborhoods.

"L.A. relies on these banks," says the Times, "for long-term financing to build bridges and restore lakes, and for short-term financing to pay the bills." The editorial noted that a similar proposal brought in the fall of 2011 by then-Councilman Richard Alarcon, backed by Occupy L.A., was abandoned because it would have resulted in termination fees and higher interest payments by the city.

You'd be forgiven for knowing very little about the unrest in Ukraine - the violence, the rioting on the streets, the armed protesters storming government buildings amidst plumes of thick black smoke rising from makeshift barricades. Most of the public have once again been Beibered by the mainstream media - the arrest of this precocious, spoilt physical embodiment of crass corporate culture proving newsworthy enough for an MSNBC host to interrupt an interview with a member of Congress discussing the true scale of NSA spying.

In this climate of superficial distractions and media inanity, you'd be equally forgiven for not really knowing why there is political unrest in Ukraine. Most of the explanations for the violence offered by the mainstream media present the information in simplistic soundbytes - talking points without the relevant wider political and historical context which renders current events coherent.

It would appear the fears of a global bank run are spreading. From HSBC's limiting large cash withdrawals (for your own good) to Lloyds ATMs going down, Bloomberg reports that 'My Bank' - one of Russia's top 200 lenders by assets - has introduced a complete ban on cash withdrawals until next week. While the Ruble has been losing ground rapidly recently, we suspect few have been expecting bank runs in Russia. Russia sovereign CDS had recently weakned to 4-month wides at 192bps.

You can imagine my surprise when I received this boarding pass yesterday...

That's right - the guy who sues, publicly humiliates, and fights before Congress the TSA now has TSA PreCheck, meaning that I'll personally almost never encounter a body scanner or pat-down again.

I never asked for it, never opted-in, and had no notice that I was included. I intentionally avoided it because I don't think it's fair that one should have to do anything to avoid being abused by their government. Their inclusion of me in this program is further ironic since in 2010, when I filed a motion for a preliminary injunction that would require the TSA not to scan or molest me, the TSA argued that such an "ad hoc" exclusion would devistate the TSA's inpenetrable fortress. But here we are in 2014, and the TSA has done just that.