The Cosmic Microwave Background and U.S. Sanctions on Russia

Amidst the searching for a foreign 777 aircraft and the shooting at Fort Hood, there has been limited discussion if any regarding the response of Putin to the announcement on the pinprick sanctions Obama has levied against the former Soviet Union.

Though it is not often that I can take concepts of physics and apply them to the maladaptive reasoning and practices of U.S. foreign policy, when I do I try and take complete advantage of it. To start with in Physics, there is a concept called cosmic microwave background and it refers to the radiation in the universe that is around as a consequence of the Big Bang, assuming you accept the Big Bang. Also known as relic radiation, it is the oldest light in the Universe and for our purpose keeps in mind the word ‘relic.”

Now traditionally, the manner in which the U.S. and the west have approached international diplomacy and foreign policy can be compared to as a form of cosmic microwave background. Namely because the manner of our foreign policy and the way in which we practice it is not associated with any give nation (star), yet still it maintains the same background glow and radiation. Applying this to Russia one can assume that Russia is a star like no other, albeit we approach it as if what we enact with respect to Iran, Cuba and Syria for example, and worse, even think it will be just as effective and that as a nation (star) we are sagacious in doing such.

 

Since President Obama announced he would be attempting to pressure Russia via economic sanctions, one would hope he has observed that the practice of saying and doing the same thing regardless of if the light being targeted is from the star, or some other background manifestation is troubling and we all should be able to see such based on Putin’s response. Since Obama’s announcement several things have happened since then.  Not in any particular order, the first is that Russia has indicated that it may counter sanctions with a foreign real estateban for officials in their government. A high level Russian official has asked that the United Russia parliamentary caucus Lower House Committee for Security and Countering Corruption to complete an amendment to an earlier bill that will forbid top level Russian officials, both elected and appointed, to hold foreign bank accounts and possess shares in foreign companies.

In addition to this, after U.S. “to big to fail” bank J.P. Morgan Chase blocked a remittance from the Russian Embassy in Kazakhstan to an insurance agency, Putin ordered the Russian Central Bank (RCB) to start producing a 5 Ruble gold coins “containing .1244 Troy ounces of .900 pure gold” which Russia anticipates would become an alternative (and even worse the standard) for pursuing energy over the dollar and the Euro. This plan also includes the creation of a national payment settlement system completely new and outside of western oligarchical banks that could rival the Society for Worldwide Interbank financial Telecommunications (SWIFT) transactions, of which it is more than plausible that the other BRIC nations will join and applaud. Plus, none of the aforementioned includes the recent oil deal Russia inked with China for an estimated $85 billion or the multi-billion dollar oil for food deal they recently negotiated with Iran

Although I suspect President Obama knew that any mention of economic fiats against Russia would be bring back some push from Russia, I don’t know if he realizes that it will be impossible for him to get complete corporations with the world leaders of the largest national economies. Especially nations such as China, India and Brazil.

First India and Brazil are not interested in helping Washington punish a fellow BRIC member, especially given that India is mad about that little thang with their diplomat in New York and Brazil still fuming about the NSA spying allegations. Not to mention that historically, neither supported the U.S. actions in Libya (albeit they did not vote against it) and despises U.S. actions in Syria. Again, assuming all actions to light are the same, as if we expect other nations to take the same political position of the U.S. on all foreign policy matters.

Even at home, there are a few problems, mainly the fact that ExxonMobil and Russian Energy giant Rosneft are exploring for oil together as part of a $500 billion joint venture in the Artic. Of which Chairman and CEO of Exxon Mobil Rex Tillerson to let Russia be and not try and isolate them with sanctions. Then there is the difficulty the U.S. government finds itself in trying to get Europe to support even tougher sanctions.

Regardless of the prior fact, the point is that the laws of Physics always will defeat man made laws, views, beliefs and policies because they are natural laws and not contrived, Obama need to recognize, his sanctions don’t mean jack, even if he had Germany, Switzerland and Brittan with him, because there will always be a Cosmic Microwave Background in the Universe of international politics and foreign policy.

Federal Government Forgets I am a man

This week reminds me of why Martin Luther King, Jr. was in my home town when he met his untimely murder. It was because of the garbage strike, I suspect many folk don’t know about it to even care, or even understand its corollary with today’s US economic crisis.

Ask any Black person, and they will say the economy is growing. They will also say that it is all because of the policies of President Barack Obama. Ask the same folk how the dollar is doing in the world and the present US economic picture for employment prospects, and they will say he is doing his best and that it will take time, or that he is not just the President for Black Americans. But you never hear such pronouncements with respect to Jewish people, Gay or Lesbians or even Hollywood. They get mentioned and African Americans are conveniently left out of the conversation.

Now I am writing about the economic situation America finds itself in but I want to make this lucidly terse - I was objectively as critical about former commanders in chief starting with Regan and I will continue to be until my dying years as long as I can both read and write. But never have I been attacked prior (and I expected to be attacked) by my own folks for pointing out mathematical facts. For I know some uppity progressive, quasi-liberal, libertarian hating black political pundit will take aim and me and ridicule my suppositions, even if they don’t have facts on their side, all to protect the current Teflon President.

Again, proponents blinded by party affiliation will say the economy is growing and will give the President Props and if it is doing bad will blame it on the GOP. I think both are equally responsible but if it is so good, then tell that to the average African American or college student who is under employed or unemployed.

Fact is many recent college graduates are working at coffee shops and tend to be very skilled workers with higher degrees. In addition, each day they are increasingly ending up in lower-skilled jobs that don't really require a degree. This means they are making it even harder for unskilled workers who usually get such jobs out of the work force and yet, the present administration has offered no policy response to deal with this phenomenon. And by the way, the unskilled can be a synonym for the African American worker.

The US Labor Department reports that approximately 280,000 Americans with bachelor’s degrees and 37,000 with advanced degrees were working minimum-wage jobs in 2012 and that the number of college-educated Americans working such jobs has risen 70 percent in the past 10 years ( a figure double the number who worked minimum-wage jobs before the Great Recession).

The reality is that the high-wage, middle-skilled job — the thing that sustained the middle class in the past no longer exist. Although the mantra of the economy is getting better is batted around like a whiffle ball, the math shows us that the U.S. economy is in a bubble inflated by money created out of thin air by the federal reserve, and all of this money, instead of creating jobs, is going into the stock market by already well-off and wealthy folks. And this cannot and will not last. Obama’s approach is just as Regan’s economic approach - “trickle down.” When the Federal Reserve prints new money, it is basically reducing or stealing the value of the dollar (all the money you have in your bank accounts and wallet).

The math shows us that the Federal Reserve Bank is buying approximately $85 billion in assets every month, while at the same time keeping its key interest rate near zero. This does nothing to reduce unemployment or create jobs but rather only serves investors and big wig traders in the various stock and bond markets. This is why corporate profits and Stock prices are up. The question remains, why isn’t anyone hiring?

Fifteen percent of Americans are on food stamps according to the latest USDA report for November 2012. To put it plainly, in America, there are two economies - one for the rich, and the other for everyone else. The number of Americans on food stamps now exceeds the combined populations of "Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming." If one is lucky to have a job, it goes on deaf ears that the average worker’s hourly wages, after accounting for inflation, were nearly 2 percent lower this year than last year, and in total is taking home less than $800 a week.

As it stands one in four of every US citizens that is employed has a job that pays $10 an hour or less and for the first time ever, more than a million public school students in the United States are homeless. To top it all off, the U.S Dollar is losing its status as the world reserve currency. Just last week, five of the top ten economies in the world, decided to no longer use the dollar as an intermediary currency for trade. Last week the BRICS (Brazil, Russia, India, China and South Africa) agreed to set up a development bank to compete with the IMF, indicating it's gearing up to compete in a post-dollar world. In addition, Australia (the world's 12th-ranked economy), China (2nd behind the U.S.), Japan (3rd), Brazil (6th), India (9th), and Russia (10th), have agreed to bypass the dollar in bilateral trade with China.

President Obama and Geithner’s toxic asset plan has enabled one of the biggest transfer of wealth in history allowing for big banks to transfer their toxic debts from fraudulent activities to the American People. All the banks are doing is redistributing the nation’s wealth to shareholders and their top executives. This what President Obama has done, even with all his flossy rhetoric is assist the wealthy in get richer at everyone else’s expense. All of the monetary and economic policy of the last 3 years has helped the wealthiest and penalized everyone else. Wall Street is good but Main Street isn’t. How can it be when the richest 10% own 98.5% of all financial securities like stocks and bonds?

But for some reason or another, our economic prowess is always, or in most cases obviated by the inability to be critical of the current administration. For it seems as for most black folk, politics involved talking about President Obama and even his policies in the affirmative only, Trayvon Martin or the GOP. I don’t hear any of the TV propagandists of the African American community dare mention the president’s name in the same sentence with growing equity disparities, employment and poverty as a function of race. And you shole wont here nothing asserting that under the Obama administration, crony capitalism has gotten worse. As President, Obama is prosecuting fewer financial crimes than Bush, or his father, Clinton or even Ronald Reagan.

I recall of this as I said, on the week in which one of the greatest men to ever live was killed. King was in Memphis, marching with sanitation workers on strike for a living wage when he was killed. No one remembers the words he stated while delivering a speech a Stanford University a year before his death: “In this America people are poor by the millions. They find themselves perishing on a lonely island of poverty in the midst of a vast ocean of material prosperity.” And no one remembers how he frequently spoke about poverty and how that during his time, America had about 40 million people living in poverty. Obama seems to ignore that in America, the richest nation in the world today, there are almost 100 million people who are in poverty.

The sanitation strike in Memphis started because two sanitation workers, Echol Cole and Robert Walker died when they were crushed to death with the garbage and nobody noticed – crushed in the back of a garbage truck because during a sever rain storm, they were not allowed by the city to seek shelter from storms. Why because white folks in Memphis at the time didn’t like or want any of the all black sanitation workers to stop in their neighborhoods. Cole and Walker couldn’t fit inside of the truck, so they crawled in the back where the garbage was placed and a broom fell on the lever which resulted in them being crushed to death with the garbage.

I would wish that folks knew this and would never forget this, for this is where the slogan “I am a man. I am a man, not a piece of garbage" originated. It seems that the Federal Government in all of its aspects seems to forget that African Americans are people and that we are men, not the refuse and waste or cheap labor for the rich.

F*** you Pay Me (International Bankers Anthem)

There is a new law of the land that has the blessing of some of the most evil minds in the world – bankers. Along with their political flunkies, they have finally devised a way to get all of the money in the world not only from nation states but also the citizens of said nations. And the strange and sad part about it is that it was the bankers who created these problems. Like magic the result of their gross malpractice, out of thin air, similar to the manner in which the Federal Reserve Bank creates money, it has been decided that anyone who saves 100,000 euros is now considered rich. Thus a new era, an era in world finance and international banking where for the first time ever, a major banking system will take and steal from depositors to pay for the government/bank interactions that created the mess in the first place.

For an average mind such as mine, what has happened in Cyprus will not be a mere caduceus act, but eventually common practice. Eventually all citizens, of every nation with massive debt, no matter where you live, in particular in Europe, now no personal/private bank account anywhere in the world is safe. If the big wigs of the EU (Mario Draghi, the president of the European Central Bank (ECB), Christine Lagarde, the managing director of the International Monetary Fund (IMF), José Barroso, the president of the European Commission (EC) and Herman Van Rompuy, the president of the European Council), can pull this off, you can best believe some similar folk of status are meeting around the United States in the board rooms of the twelve Federal Reserve banks.

The precedent set by the Eurozone to go for depositors is a reflection of how uncertain the world of derivatives and complex papers is. What we see, what we understand, are the images of long lines in front of ATMs and for what – all to save the institutions that gave us the economic downturn, just to save the banks. Around the world, just in the US the banks are what are important and not the people even if they are the criminals, they only get larger and are even beyond incarceration [see JP Morgan Note below].

NOTE: [The U.S. Treasury’s Office of Foreign Assets Control found that JPMorgan had illegally aided dictatorships in Cuba, Sudan, Liberia and Iran, including transferring 32,000 ounces of gold bullion for an Iranian bank. Not to mention misleading investors, making fake and false trades, wrongfully foreclosed on soldiers charged veterans hidden fees for refinancing, illegally increased their collection of overdraft fees by processing large transactions before smaller ones or by switching its fixed-rate debt to variable helping push Jefferson County, Alabama into bankruptcy.]

Although under the guise of a bailout, what we see in Cyprus is an indication of things to come worldwide. If another bailout is need for another EZ nation, the likes of Spain and Italy, then the savings accounts of the citizens in Spain, Italy and other countries will be raided. Now some will say its different because in Europe, many nations are way over leveraged and that they are taking these steps to preserve the Euro by aiding insolvent and failing banks. I will agree but would ask how that is any different from the situation with the US dollar and “too big to fail banks?”

As during the time of the great depression and what America is dealing with now, it is common knowledge that excessive leverage was one of the primary causes of both – folk buying stocks and other complex papers on margin. And excessive leveraging undermines financial stability because the goal of the banker is to always transfer credit risk to those better able to absorb losses. When it is impossible to do the aforementioned, the financial sector becomes weak and breaks.

Ironic that I just finished reading Richard Bookstaber’s “A Demon of our own Making.” He describes this so aptly. He notes that new forms of investment strategies like portfolio insurance, based on the Black-Sholes formula of making it possible to set a price on an option and features such as “greenmail” gave us the crisis of not only the past but today.

Today the US banking system as a whole is leveraged at 13-to-1 compared to about 26-to-1 for the Banks of Europe. The US Federal Reserve has about $2.8 trillion in assets and only $52 billion in capital, meaning the US Central Bank is leveraged at 53 to 1 – worse than Europe. Just keeping it on the level, a recent report from the Comptroller of the Currency, noted that four U.S. banks have $235 trillion of OTC derivative leverage. As a nation, all the US banks are estimated to have a total OTC derivative exposure of $250 trillion.

When banking systems are or become excessively-leveraged, the risk that a crisis in one country will spread to another dramatically increases. Meaning that the reality is that the US financial system could come tumbling down the hill at any time because it is mathematically impossible for just the continuous printing of money alone can go on forever.

Another concern I have is that less than two years ago, all the banks of Europe were given stress test, which by all accounts were way harder than the stress test given to US big banks by the Treasury, and all the banks of Cyprus passed with flying colors. Now within the last two weeks we see such wasn’t the case since Cyprus’ two largest banks, the Bank of Cyprus and the Cyprus Popular Bank (the Laiki Bank), which hold half of all bank deposits in the country are the worse of the bunch, and if this is the case what can we interpret from the weak azz stress test the US Treasury implemented some few years back as well?

In addition to the math, the behavioral antecedents are clear as well – it’s all about the banks, fuck the people and the workers and the average family. The precedent of Cyprus is clear - nothing is safe from being seized by the state, no savings account, but also no house or apartment. The Germans experienced this after World War II, when they were charged an extra real estate tax in the form of compulsory mortgages. Governments have even banned the possession of gold during currency crises, forcing citizens to exchange the precious metal for the national currency.

Even with the aforementioned, the Federal Reserve, Wall Street and Washington Politicians always want to point the finger at the average citizen. Ben Bernanke let it out the hat when he advocated for the elimination of all reserve requirements: “The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.”

The simple reality is that no matter what happens, the majority of people will be significantly poorer. As it stands, not only in the US, but around the globe the continuous transfer of wealth from the bottom into the pockets of the wealthiest is a reality unavoidable. Here in America consequently, we must not be fooled by leaders regardless of party affiliation and their words of addressing economic equity because their actions never fit the actual goals they promulgate via their illustrious oratory. No matter what Obama for example says on the political stump, his policy continues to add to the economic inequity in America. For example, no matter what he says his policy will always aid in the disparity for example of the average CEO’s hourly wage of $5000 per hour compared to $7.00 an hour. The point is if in Europe, Cyprus to be more exact, any level of personal savings decided upon by bankers for confiscation, is basically the same as just stealing money from people’s bank accounts.

On top of all of this (and I won’t mention our debt to China) China and Brazil just signed a trade, currency deal ahead of BRICS summit that will allow them to bypass using the dollar by agreeing to trade in their own currencies the equivalent of up to $30 billion per year, moving to take almost half of their trade exchanges out of the US dollar zone. Thus there is a new world post the 1950s, Bretton Woods and the Marshall Plan when the US Dollar became the de facto global reserve currency.

Like the Euro, the reality is that the global exposure to the US Dollar remains by default rather than design and the global (at least European) sovereign debt crisis is placing the US Dollar at risk for the future. Just looking at Cyprus, it should be clear that oligarchs and plutocrats, who are protected by the elected elite, will always be considered over the average citizen. The Bankers (not the people or elected leaders) have decided that citizens, who had nothing to do with the national debt as individuals, will be forced without choice to pay for the faults of the elected elite which sets a truly alarming precedent for other debtor (all nations) around the world.

I am just asking the question and using basic match to formulate a possible answer. I mean there is only one answer, albeit multiple solutions to solve any equation. I just think this may become banking versions of reality TV, and if that show had a name, it would likely be called “F*** you, pay me (the international bankers anthem.)