Ever since the beginning of the financial crisis and Quantitative Easing, the question has been before us: How can the Federal Reserve maintain zero interest rates for banks and negative real interest rates for savers and bond holders when the US government is adding $1.5 trillion to the national debt every year via its budget deficits? Not long ago the Fed announced that it was going to continue this policy for another 2 or 3 years. Indeed, the Fed is locked into the policy. Without the artificially low interest rates, the debt service on the national debt would be so large that it would raise questions about the US Treasury's credit rating and the viability of the dollar, and the trillions of dollars in Interest Rate Swaps and other derivatives would come unglued.

In other words, financial deregulation leading to Wall Street's gambles, the US government's decision to bail out the banks and to keep them afloat, and the Federal Reserve's zero interest rate policy have put the economic future of the US and its currency in an untenable and dangerous position. It will not be possible to continue to flood the bond markets with $1.5 trillion in new issues each year when the interest rate on the bonds is less than the rate of inflation. Everyone who purchases a Treasury bond is purchasing a depreciating asset. Moreover, the capital risk of investing in Treasuries is very high. The low interest rate means that the price paid for the bond is very high. A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign.

The question is: when is sooner or later? The purpose of this article is to examine that question.

Let's start by laying down the baseline premise: inequality in America has been widening for dec­ades. We're all aware of the fact. Yes, there are some on the right who deny this reality, but serious analysts across the political spectrum take it for granted. I won't run through all the evidence here, except to say that the gap between the 1 percent and the 99 percent is vast when looked at in terms of annual income, and even vaster when looked at in terms of wealth - that is, in terms of accumulated capital and other assets. Consider the Walton family: the six heirs to the Walmart empire possess a combined wealth of some $90 billion, which is equivalent to the wealth of the entire bottom 30 percent of U.S. society. (Many at the bottom have zero or negative net worth, especially after the housing debacle.) Warren Buffett put the matter correctly when he said, "There's been class warfare going on for the last 20 years and my class has won."

So, no: there's little debate over the basic fact of widening inequality. The debate is over its meaning. From the right, you sometimes hear the argument made that inequality is basically a good thing: as the rich increasingly benefit, so does everyone else. This argument is false: while the rich have been growing richer, most Americans (and not just those at the bottom) have been unable to maintain their standard of living, let alone to keep pace. A typical full-time male worker receives the same income today he did a third of a century ago.

From the left, meanwhile, the widening inequality often elicits an appeal for simple justice: why should so few have so much when so many have so little? It's not hard to see why, in a market-driven age where justice itself is a commodity to be bought and sold, some would dismiss that argument as the stuff of pious sentiment.

Put sentiment aside. There are good reasons why plutocrats should care about inequality anyway - even if they're thinking only about themselves. The rich do not exist in a vacuum. They need a functioning society around them to sustain their position. Widely unequal societies do not function efficiently and their economies are neither stable nor sustainable. The evidence from history and from around the modern world is unequivocal: there comes a point when inequality spirals into economic dysfunction for the whole society, and when it does, even the rich pay a steep price.

Let me run through a few reasons why.

The United States and China are at odds over controlling the world's energy resources especially now that Washington is shifting its military focus to Asia, says Linh Dinh, Pennsylvania-based political analyst and writer.


To achieve their goal, the U.S. is using its "military might to intimidate" other nations in Europe, Africa and Asia, he said in an interview with the Press TV's U.S. Desk on Tuesday. But, he added, China is trying to advance its economic agenda throughout "diplomacy."

U.S. Defense Secretary Leon Panetta last week announced Washington's plan to deploy military warships and troops into Asian waters reportedly to counter a rising China. The decision faced Chinese opposition.

Dinh said the U.S. has made the decision to use its military force "to prevent China from moving more aggressively" into the European market.

Translated by SOTT.net

Georges Fenech is the president of an interministerial mission established on behalf of the Prime Minister: Miviludes, or Interministerial Mission for Monitoring and Combatting Cultic Deviances. Appointed to this position in 2008 by François Fillon, his position was renewed in 2011.

A former MP, Fenech is currently running as an UMP candidate for the legislative election in the Rhone department, against the incumbent MP, Raymond Durand, from the Nouveau Centre (New Center party).

The president of Miviludes was condemned for public defamation by the Paris Criminal Court on June the 1st, 2012.

Defamatory statements against an association of lay Catholics - la Societé Française de défense de la Tradition, Famille et Propriété (the French Society for the Defence of Tradition, Family and Property) - were published in the 2009 annual report of Miviludes.

Jesselyn Radack came into the Justice Department through the Attorney General's Honors Program and worked as an ethics adviser until she found herself embroiled in a scandal that arose because she dispensed advice senior political appointees didn't want to hear. The scandal became aggravated when Justice officials made false statements about her advice in representations to a federal judge. Radack, a recipient of the 2012 Hugh M. Hefner First Amendment Award, is now the director of national security and human rights at the Government Accountability Project, where she counsels and represents whistleblowers. I put six questions to her about her book, Traitor, and her career battling for ethics compliance at a powerful institution that sometimes takes the low road to success.

Six American families paid no federal income taxes in 2009 while making something on the order of $200 million each. This is one of many stunning revelations in new IRS data that deserves a thorough airing in this year's election campaign.

The data, posted on the IRS website last week, brings into sharp focus the debate over whether the rich need more tax cuts (Mitt Romney and congressional Republicans) or should pay higher rates (President Obama and most Democrats).

Leon Panetta, the over-his-head US secretary of defense, is in Afghanistan today after a day on which the greatest number of civilians were killed so far in 2012. But Hamid Karzai, the Afghan president, isn't there. He's in Beijing, meeting with the Shanghai Cooperation Organization, an all-Asian bloc led by China and Russia. The SCO, not surprisingly, is expressing a greater interest in building ties with Afghanistan as the United States begins its long, drawn-out drawdown to 2014. And Panetta, it seems, is trying to interest India, a rival to China, which is taking a greater interest in Afghanistan too. It's the Afghan endgame.

First, the civilian dead.

Karzai is charging that a NATO airstrike killed eighteen Afghan civilians, including woman and children, as part of a US-led ground operation in Logar province. Reported the AP: "Villagers displayed 18 bodies at the provincial capital on Wednesday, including five women, seven children and six men...."

For the past few weeks, I have been writing in this column about the government's use of drones and challenging their constitutionality on Fox News Channel where I work. I once asked on air what Thomas Jefferson would have done if -- had drones existed at the time -- King George III had sent drones to peer inside the bedroom windows of Monticello. I suspect that Jefferson and his household would have trained their muskets on the drones and taken them down. I offer this historical anachronism as a hypothetical only, not as one who is urging the use of violence against the government.

Nevertheless, what Jeffersonians are among us today? When drones take pictures of us on our private property and in our homes, and the government uses the photos as it wishes, what will we do about it? Jefferson understood that when the government assaults our privacy and dignity, it is the moral equivalent of violence against us. The folks who hear about this, who either laugh or groan, cannot find it humorous or boring that their every move will be monitored and photographed by the government.

France and Germany were prepared in spring 2005 to negotiate on an Iranian proposal to convert all of its enriched uranium to fuel rods, making it impossible to use it for nuclear weapons, but Britain vetoed the deal at the insistence of the United States, according to a new account by a former top Iranian nuclear negotiator.

Seyed Hossein Mousavian, who had led Iran's nuclear negotiating team in 2004 and 2005, makes it clear that the reason that offer was rejected was that the George W. Bush administration refused to countenance any Iranian enrichment capability, regardless of the circumtances.

Mousavian reveals previously unknown details about that pivotal episode in the diplomacy surrounding the Iran nuclear issue in memoirs published Tuesday.

Mousavian, now a visiting research scholar at Princeton University's Woodrow Wilson School, had been a top political aide to former president Hashemi Rafsanjani and head of the foreign relations committee of Iran's Supreme National Security Council during his political-diplomatic career in Iran.

The US and its Gulf allies are already fuelling sectarian conflict in their proxy war with Iran. The fallout could be disastrous

As Syria descends deeper into civil war and human misery, pressure for yet another western military intervention in the Arab world is growing. Last week, General Martin Dempsey, chairman of the US joint chiefs of staff, declared that the US might take the "military option" in Syria if it was "asked to do so". Barack Obama's Republican rival Mitt Romney is meanwhile demanding that the US government arm the Syrian opposition.

Today, Russian and Chinese leaders reaffirmed their opposition to forced regime change and support for UN envoy Kofi Annan's peace plan. But Susan Rice, US ambassador to the UN, has made clear western powers might act alone and take action "outside the authority" of the UN. Even the new French president François Hollande has said military intervention in his country's former colonial territory was "not to be ruled out".

The latest calls for action against Bashar al-Assad's regime follow the slaughter of 108 people, including 49 children, in Houla less than a fortnight ago. Opposition activists have blamed pro-regime "shabiha" sectarian militias for the massacre; the government al-Qaida terrorists. But there's no doubt that atrocities such as Houla - let alone killings on a larger scale - have the potential to turn intervention grandstanding into the real thing.