Friday, December 12, 2014

Timely Rantings On CIA Torture, China, Russia, The Dollar, Gold And Oil

I was planning only one more post this month, but given the incredibly profound dynamics unfolding around long-time themes on here, I thought I would highlight some of them in an interim post.   Below is a set of related, unrelated and inter-related incoherent ramblings on a multitude of timely topics.

Headlines used as a basis for my ramblings below.

China turns away from the dollar

China clings to its socialist past.  China is still an inept buffoon state controlled by communist bureaucrats.

China’s crisis IS going to get a whole lot worse.  This is a look at reality rather than American capitalist-created propaganda about the virtues of capitalist China.  It is a cesspool of fraud, rot, corruption and the abject misery of state communism.  If you still believe China is anything other than a fraudulent Ponzi scheme, you owe it to yourself to read this.

Russia unveils ruble-based trade settlement system.  Russia is at an inflection point.  It will either yield to the pressure of empire or find an alternative, yet painful means to escape its clutches.

Russian exporter currency plan may signal capital controls.  Capital controls certainly are a rising trend that is clearly a predictable result of global capitalism.

American firms raise money from rich Chinese capitalists.  I want to know how this much money can escape a country without a convertible currency and with strict limits on how much money individuals can convert to other currencies while leaving the country.   Actually, it’s quite a common example of the massive fraud the ruling class in China is and has perpetuated on their own nation.  Remember a few years ago when the premiere of China’s communist party was found to have a billion dollar offshore account?   This is simply another form of aristocratic state violence meant to loot the people of China.  There will be hell to pay for this.  A long time theme on here is China is likely headed for revolution or war, be it economic or military or both, with the west.  At this point in time, I would be more inclined to say the masses are headed for revolution against their communist capitalist oppressors. 

OPEC sees demand drop to a 12 year low.  By the time this is all said and done, we could easily see demand fall to decades-long lows.  There is so much useless waste and slack in this global economic system that is going to disappear through the force of nature. 

CIA director defends rectal rehydration

Former CIA chief launches blitz against Senate report

Below are some links from Glenn Greenwald and other authors at The Intercept on the CIA and NSA.

Live coverage of CIA torture report from Glenn Greenwald

What bad, dirty, shameful behavior is judge hiding about U.S. secrecy

Lot of these Gomers didn’t know shit: Former CIA official on torture

For CIA truth was an existential threat

What we are witnessing around the world are massive power grabs by the state.    This is consistent with a theme on here that the control systems of corporate capitalism and the state require a greater and greater application of control to contradict their inherent instabilities.  The state may believe these power or control grabs are legitimate or in response to threats perpetuated against them, but one thing is very clear.  These are not power grabs on behalf of restoring power to humanity.  They are power grabs meant to enrich or perpetuate the state.    The responses to U.S. dollar hegemony are purely power grabs by other state actors.   This contention between states is consistent with a long-time theme on here that we were entering a war cycle.  And how accurate that theme has been as greater and greater violence has continued to unfold over the last handful of years.  Whether we see all-out global war is another issue.   I don’t see any evidence that an all-out war is a guaranteed outcome.   If state actors have their way, that remains a distinct possibility.  If humanity wins their battle with the state, it will not happen.  All of this violence is part of the contradictory pathology of state actors to perpetuate their own control at any cost.  It is contradictory because those power grabs are at the expense of humanity that the state is supposedly there to protect.   In other words, we are being exposed to the reality that the state is really nothing more than a protection racket – the state itself is the source of violence that it offers to protect humanity from.   In order to appreciate what is really happening today, it is very important for people to understand this.

(I keep harping on the point to follow in this paragraph for a reason.  That reason will become self-evident soon enough.  If you doubt any of this today, the day will come when you will look upon the world and wonder why you doubted the intent of your oppressor without anyone needing to remind you of anything.)  A major point of this protection racket dynamic is that other states that seek to end U.S. dollar empire do not do so out of virtue.  They do so because they want some of that good ole-fashioned American home cooking.  They want what the U.S. has.  That is, power, and more of it.   The ego’s primary intent is control and the state is an institution of the ego.    China, as an example, is following the same historical mercantilist practices of Europe and the U.S. in that grab for more power.  Remember, the barbarians that overthrew the Roman Empire didn’t do so out of virtue or out of its tyranny.  When they sacked Rome, they first looted it of its wealth.  Then they became the ruling class of plunderers and looters in Rome itself.   They became Romans.  China and Russia have dreams about returning their states to prior powerful glory.  Leaders in both countries have  clearly remarked of this objective and both state’s leaders are guilty of stoking fear-driven nationalism over and over again.  It has nothing to do with empowering their people or democracy.  It has everything to do with control.  The Chinese and Russian bureaucrat is no different than the American bureaucrat or the German bureaucrat.  All bureaucrats seek a primary intent of control for their own personal benefit and they use the state and its many institutions, including communism, socialism and capitalism, as tools to accomplish this.   Evil seeks power.  The organizational constructs of the state are the perfect institutions of the ego to wield that power.  The level of cruelty, corruption and poverty around the world, including in China and Russia, is just as great as the U.S. 

December continues the exposure of bizarro state behavior.  Russian central bankers continue to raise rates to stop capital flight and a currency collapse.  So far it isn’t working.  What comes next?  Will Russia simply allow the dollar-ruble relationship to collapse as I wrote could happen some time ago?   They are in a unique situation where that may be a possibility.  Or, if raising rates doesn’t stop the slide of private capital out of their economy, there really are only two options I am aware of.  One, employ gold on behalf of the ruble to bring confidence to the global, predatory private capital machine, or two, create their own internal capital.   I consider the latter to be low odds for the very reason the state exists in the first place.   As noted in prior posts, Russia has certainly seen how Iran has faired after being in a similar situation.  Iran saw massive inflation as their currency collapsed.  Iranian dollar reserves in short supply were then directed by a domestic currency board to ensure basic necessities were purchased first.  Iran has stabilized to some degree (before the collapse in oil) and seemingly is operating under a plan of becoming more economically self-reliant in order to ameliorate U.S. and European financial terrorism against the country. (I am not endorsing theocratic Iran as a legitimate state in this remark.)  Russia has an Iranian roadmap to follow if they so choose.   China has a substantially more difficult road in getting out from under the dollar being so reliant on private western capital. 

If these states fail in their efforts, and the U.S. dollar empire holds against external threats, these states will soon become net sellers of gold as noted on here many times.   We appear to finally be entering a very, very volatile period in the global trade settlement system.  I have written for the better part of the past decade that this was coming and it seems we are now finally here.   Now, as a part of that, gold is likely at or nearing a major inflection point too.  That next move could either be another collapse or a major move higher.  I suspect that move will be driven by the state.  But, there is a high likelihood of a gold squeeze coming.  Will that squeeze be for gold buyers or gold sellers?     Ultimately, none of this changes my original outcomes that gold will eventually collapse just as oil will.   China and Russia are broke and that means their demand for gold will eventually diminish, if not go to zero or even negative (net sellers).   In other words, their ability to create paper wealth needed to buy gold is getting closer and closer to an inflection point. 

The possibility does exist that a tipping point in the global trade settlement system can occur with a small fraction of global trade being settled beyond dollars.   But I remain dubious of this given how the world economy works.  There is no doubt that the dollar fealty or homage trade to the world’s neoliberal lord, the United States, by its vassal capitalist states is living on borrowed time.  Mostly because corrupt vassal states around the world are trying to gain greater control before their ineptitude and fraud leads to their own collapse.  Regardless of how it happens, it is almost certainly going to happen that we will see a trade settlement crisis.   And it will likely happen very rapidly once it metastasizes.    Unlike popular opinion with people who are driven by their emotions that includes a desire to see the dollar collapse confusing their ability to analysis the facts, the dollar does not need to collapse to have a global currency crisis.  And, that is born out that the mainstream thought that has expected a dollar collapse, is now looking at the highest dollar value in ten years.   That too was foretold of on here.  Remember, a long-time theme on here is that the U.S. empire will disappear by 2022.   The only question is how.   That doesn’t necessarily mean the dollar will lose its reserve status, per se although that is a distinct possibility.   Regardless of whether the world no longer has a concept of a reserve currency or whether it is through some other dynamic, we will have to wait and see.  But, as I noted on here in past posts, if the global economy is crashing, and that includes currencies crashing against the dollar, and thus, demand for international trade, be it in dollars, gold, yuan, rubles or bubble gum wrappers, falters, then effectively U.S. empire will experience some degree of substantial systemic failure.    This is a major difference with economic empire not shared by past examples of outright human subjugation by violent force of arms that we saw in the British and Roman Empires.   This empire requires the acceptance of dollars.  If the world no longer accepts dollars because it is collapsing, the macro outcome it creates in many ways is really no different than the dollar itself collapsing. 

All manipulation aside, and the entire world is manipulated by the state and its creations, oil is crashing because demand is crashing.   That demand is both financial and economic.  Demand for OPEC oil is at 12 year lows.  Those are their numbers.  That is because the global economy is crashing in spite of tens and tens and tens of failed central banker money printing in every capitalist nation on earth.   Don’t kid yourself that this is part of some master conspiracy led by the Saudis.  The Saudis are not going to cut their production if other OPEC nations don’t cut.  It may be a game of chicken right now but OPEC is damned if they do and damned if they don’t.  Cutting production will cut off the flow of much-needed dollars on a hope and a prayer that prices will rise.  Not cutting off production will produce a similar paradox.   I wrote half a dozen years ago this exact dynamic would come to pass and we are here.   OPEC lives and dies based on the failing global capitalist overproduction Ponzi scheme that is now in systemic failure.   History CLEARLY tells us that OPEC nations have always cheated on production quotas in order to maximize their own self-interested profit.  Even when prices are imploding.  Or, maybe I should say, especially when prices are imploding.  OPEC’s oligarchy is a paper tiger.  They have ZERO power over the price of oil.  It is an illusion that oil fiefdoms and their self-interested state actors believe.  That illusion is now shattering.  We will eventually see oil retest the 2008 collapse lows.  That may not be for a while or it may happen as early as next year.  I don’t know.  But the pricing action essentially guarantees a retest.  

Below is a three year chart of the Shanghai Composite Index.  In the last month alone we have seen this index roar higher by 30%.   In the last six months it is up over 50%.  An amazing parabolic rise.  Similar to the asset bubbles in the U.S., I consider this a portent of collapse.  Without convertibility, except through corruption afforded to the ruling class, endless yuan money printing has created a wall of useless money.  The capital bubble in China is collapsing and now the consumption bubble in China is collapsing.  Where is all of that useless money to go?  Just like in the U.S., where the same dynamic exists, it is headed into renter capitalist financial speculation.   Of course, this could all be helped along by the communists manipulating their stock market.


Finally, we have the announcement of the CIA torture report from Congress.  I really want to know what the political angle is for releasing this report.  There certainly is one after a decade of secrecy on the topic.  I could imagine it is the political trouncing the Democrats just took.  A calculated risk attempting to turn citizens against Republicans?  But it was these same Democrats that turned a blind eye to the criminal actions of the CIA.  And, let’s be clear.  It is clearly criminal and deserving of a tribunal in The Hague.  Or, a similar type of tribunal in the U.S.   Anyone who states that they support this type of violence against any human being, especially without due process, regardless of their suspected crimes, is operating from a place where God does not exist.   It’s just that simple.  These are not the actions of a free mind, and a free people.  These are the actions of evil.  The cruelty of the comments section in the first two links at The Hill above are telling.   Godlessness is not just the domain of class and hierarchy but those who have outsourced their own divinity to class and hierarchy by worshiping the state.

Before all of the insanity in this world was exposed, I noted quite a few times that tribunals could be coming to the U.S.   At the time, that seemed absurd but it clearly is not.  Our government is completely out of control.   Patton’s famous quote calling Hitler a paper-hanging son of a bitch applies to the paper shredding son of a bitches in Washington.  The CIA and NSA are trying to rid themselves of electronic and paper records of their crimes as I type this.   Just as the paper shredding of the Nazi war machine and its endless atrocities when they knew they were eventually going to get caught.  As noted in a recent post, both the CIA and Homeland Security are attempting to destroy or “shred” records associated with their wrongdoing with the assistance of Congress and the White House.     

posted by TimingLogic at 12:18 PM