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Surf’s up! The Navy appears to have achieved the Holy Grail of energy independence – turning seawater into fuel:

After decades of experiments, U.S. Navy scientists believe they may have solved one of the world’s great challenges: how to turn seawater into fuel.

The new fuel is initially expected to cost around $3 to $6 per gallon, according to the U.S. Naval Research Laboratory, which has already flown a model aircraft on it.

Curiously, this doesn’t seem to be making much of a splash (no pun intended) on the evening news. Let’s repeat this: The United States Navy has figured out how to turn seawater into fuel and it will cost about the same as gasoline.

This technology is in its infancy and it’s already this cheap? What happens when it’s refined and perfected? Oil is only getting more expensive as the easy-to-reach deposits are tapped so this truly is, as it’s being called, a “game changer.”

I expect the GOP to go ballistic over this and try to legislate it out of existence. It’s a threat to their fossil fuel masters because it will cost them trillions in profits. It’s also “green” technology and Republicans will despise it on those grounds alone. They already have a track record of trying to do this. Unfortunately, once this kind of genie is out of the bottle, it’s very hard to put back in.

There are two other aspects to this story that have not been brought up yet:

1. The process pulls carbon dioxide (the greenhouse gas driving Climate Change) out of the ocean. One of the less well-publicized aspects of Climate Change is that the ocean acts like a sponge for CO2 and it’s just about reached its safe limit. The ocean is steadily becoming more acidic from all of the increased carbon dioxide. This in turn poisons delicate ecosystems like coral reefs that keep the ocean healthy.

If we pull out massive amounts of CO2, even if we burn it again, not all of it will make it back into the water. Hell, we could even pull some of it and not use it in order to return the ocean to a sustainable level. That, in turn will help pull more of the excess CO2 out of the air even as we put it back. It would be the ultimate in recycling.

2. This will devastate oil rich countries but it will get us the hell out of the Middle East (another reason Republicans will oppose this). Let’s be honest, we’re not in the Middle East for humanitarian reasons. We’re there for oil. Period. We spend trillions to secure our access to it and fight a “war” on terrorism. Take away our need to be there and, suddenly, justifying our overseas adventures gets a lot harder to sell.

And if we “leak” the technology? Every dictator propped up by oil will tumble almost overnight. Yes, it will be a bloody mess but we won’t be pissing away the lives of our military to keep scumbags in power. Let those countries figure out who they want to be without billionaire thugs and their mercenary armies running the show.

Why this is not a huge major story mystifies me. I’m curious to see how it all plays out so stay tuned.

UPDATE:

People have been asking for more details about the process. This is from the Naval Research Laboratory’s official press release:

Using an innovative and proprietary NRL electrolytic cation exchange module (E-CEM), both dissolved and bound CO2 are removed from seawater at 92 percent efficiency by re-equilibrating carbonate and bicarbonate to CO2 and simultaneously producing H2. The gases are then converted to liquid hydrocarbons by a metal catalyst in a reactor system.

In plain English, fuel is made from hydrocarbons (hydrogen and carbon). This process pulls both hydrogen and carbon from seawater and recombines them to make fuel. The process can be used on air as well but seawater holds about 140 times more carbon dioxide in it so it’s better suited for carbon collection.

Another detail people seem to be confused about: This is essentially a carbon neutral process. The ocean is like a sponge for carbon dioxide in the air and currently has an excess amount dissolved in it. The process pulls carbon dioxide out of the ocean. It’s converted and burned as fuel. This releases the carbon dioxide back into the air which is then reabsorbed by the ocean. Rinse. Repeat.

http://www.addictinginfo.org/2014/04/12/navy-ends-big-oil/

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Global energy markets are jostling between the return of Libyan crude oil and lingering tensions over Ukraine. It’s domestic supply and demand issues, however, that are weighing on U.S. gasoline prices, AAA said Monday.

Prices waxed and then waned amid dueling overseas developments. Last week, Russian President Vladimir Putin warned European energy security was at risk because of Kiev’s debt obligations. The state-run oil firm in Libya, however, said the port of Zawiya and associated oil infrastructure were open and operating normally after protesters there ended their blockade.

West Texas Intermediate traded Monday morning at $103.74, up 0.34 cents from the previous session, while Brent crude, the global benchmark, traded down 0.13 cents to $107.33.

Crude oil prices account for about 70 percent of the price U.S. consumers pay for a gallon of gasoline. AAA reported a national average price for a gallon of regular unleaded gasoline of $3.64, up nearly 6 cents from last week.

Related Article: U.S. Oil Boom Makes Gas Cheaper, but not by Much

Michael Green, a spokesman for AAA, told Oilprice the national average price for Monday was the highest reported since July 27 because of domestic supply and demand issues. The U.S. Energy Information Administration reported gasoline stocks declined to 210 million barrels, the lowest since November. The onset of warmer temperatures after a long winter season, meanwhile, meant more people were taking to the roads.

“As a result, drivers now are paying more than a year ago with the national average 11 cents per gallon more expensive than last year,” Green said.

Last week’s increase was the largest since February and, while overseas issues were influencing global energy prices, the end of a period of seasonal refinery maintenance at home didn’t mean much for U.S. consumers looking to cure their cabin fever.

Green said most producers have got rid of their winter blend of gasoline stocks in order to make room for the summer blend, which is more expensive to produce. This has resulted in a depletion of gasoline supplies in some parts of the country.  California drivers paid more than $4 per gallon Monday, while Illinois drivers saw their state average go above the $3.90 mark.

Related Article: Spring Fever Could Lead to Increase in Gas Demand

“Unfortunately for drivers, supplies have dropped more precipitously than expected, which is sending prices higher,” said Green.

EIA later this week is expected to release its petroleum statistics, which could push gasoline prices even higher if supplies are shown to be limited. If the supply situation stabilizes, prices at the pump could start to ease, though Green warned international factors may still come into play.

“The U.S. petroleum market is never fully isolated from events overseas,” he said. “Crude oil is a globally traded commodity, which means that U.S. consumers often pay more at the pumps because of international political instability.”

By Daniel J. Graeber of Oilprice.com

http://oilprice.com/Energy/Gas-Prices/U.S.-Gas-Prices-Rise-but-not-because-of-Global-Factors.html

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Despite proclamations that the “economy is improving” and that “unemployment is down,” one thing is evident and that is – for a number of reasons – food costs are soaring, and as they do, those most vulnerable, like the poor, the elderly and those earning the lowest wages, are being hurt the most.

“We are sure the weather is to blame but what happens when pent-up demand (from a frosty east coast emerging from its hibernation) bumps up against a drought-stricken west coast unable to plant to meet that demand? The spot price (not futures speculation-driven) of US Foodstuffs is the best performing asset in 2014 – up a staggering 19 percent,” notes Tyler Durden over at Zero Hedge.

In February, the site gave voice to a sort of prelude to the aforementioned scenario, in publishing a post by Michael Snyder of The Economic Collapse blog:

Did you know that the U.S. state that produces the most vegetables is going through the worst drought it has ever experienced and that the size of the total U.S. cattle herd is now the smallest that it has been since 1951? Just the other day, a CBS News article boldly declared that “food prices soar as incomes stand still,” but the truth is that this is only just the beginning. If the drought that has been devastating farmers and ranchers out west continues, we are going to see prices for meat, fruits and vegetables soar into the stratosphere.

A number of factors are leading to price increases

Sure, prices are up because California’s drought is limiting supply. Some have even said that commodities prices are being pushed upward by speculators on Wall Street; that may be happening to an extent.

But there are a number of other factors that the government doesn’t report as having much of an effect at all on food prices (and remember, the government doesn’t include “volatile” food and energy prices in its monthly inflation reports).

Speaking of energy, the price of a gallon of fuel, especially diesel fuel, has a lot to do with the prices you pay at the grocery store. Historically, food supplies were more much more local; transportation costs, therefore, were much reduced (and that was during the era of much cheaper fuel). Not anymore; the impact on prices that California’s drought is having demonstrates how vast the U.S. food supply chain has become. With it has come higher transport costs.

Kimberly Amadeo, a U.S. Economy Guide at About.com notes:

Food prices rise in response to high gas prices. That’s because transportation is a large cost of food you buy at the store. When you notice prices at the pump rising, expect to see the same thing happen in about six weeks at the grocery store. High gas prices are, themselves, usually caused by high oil prices. Here again, it usually takes about six weeks for increases in oil futures to translate to the pump.

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BETHLEHEM (Ma’an) — US Congress members are calling for action to be taken against the Palestinian Authority in response to the applications to join 15 international treaties, Palestine’s envoy in Washington said Sunday.Maen Areikat told Ma’an that some pro-Israeli US representatives have voiced their demands to impose sanctions against the PA, which including ceasing financial aid.Areikat said the US administration realizes the importance of the PA’s role in the peace process and the importance of financial aid in the current stage.“We did not hear any indication by the US administration about taking action against the PA,” Areikat said, explaining that stopping financial would will have negative repercussions for US interests.

He also said they would not affect plans to seek international recognition.

Areikat highlighted that the Palestinians should remain on guard and make their positions clear to Congress members.

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Senate Majority Leader Harry Reid (D-Nev.), who was exposed last Friday as the mastermind behind the Bureau of Land Management’s persecution of Nevada rancher Cliven Bundy, can be seen in this March 2014 photo breaking ground for a new solar farm near the Bundy Ranch, emphasizing that the senator’s plan for solar projects in Nevada wasn’t just limited to the shelved solar farm near Laughlin.

Credit: First Solar Media press release via Business News

Signaling the first day of construction of the Moapa Southern Paiute Solar Project, which is about 35 miles from the Bundy homestead in Bunkerville, Nevada, Sen. Reid joined representatives from the Moapa Band of Paiutes, executives from First Solar, Inc. and the Los Angeles Department of Water and Power for the groundbreaking ceremony on March 21.

“First Solar is thrilled to celebrate this important milestone with Sen. Reid and distinguished guests, and honored to work with the Moapa Band of Paiutes on this landmark project,” Jim Hughes, the CEO of First Solar, said at the time.

The development of solar farms just like this one is exactly why Sen. Reid was using the BLM, whose director is Reid’s former senior advisor, to push Bundy out of the Gold Butte area his family has worked for over 140 years.

As we revealed last Friday in an article that became the #1 news story in the world for 24 hours, the BLM specifically stated that it wanted Bundy and his cattle out of the area as part of the agency’s “regional mitigation strategy for the Dry Lake Solar Energy Zone.”

The BLM attempted a cover-up by deleting documents exposing the plan from its web site, but fortunately contributors at the Free Republic were able to save them for posterity.

Others have attempted to whitewash the situation by suggesting that the solar farm development was only limited to the shelved 2012 deal between Sen. Reid and Chinese-owned ENN Energy Group in Laughlin, Nev., but by reading the BLM’s own documents it is quite obvious that this is not the case.

“The BLM’s current action builds on the Western Solar Energy Plan, a two-year planning effort conducted on behalf of the Secretary of the Interior and the Secretary of Energy to expand domestic energy production and spur development of solar energy on public lands in six western states,” the BLM announced in a March 14 press release. “The Western Solar Energy Plan provides a blueprint for utility-scale solar energy permitting in Arizona, California, Colorado, Nevada, New Mexico and Utah by establishing Solar Energy Zones with access to existing or planned transmission, incentives for development within those Solar Energy Zones, and a process through which to consider additional Solar Energy Zones and solar projects.”

“The Regional Mitigation Strategy for the Dry Lake Solar Energy Zone is the first of several pilot plans to be developed by the BLM,” the press release added.

In summary, the BLM, acting under Sen. Reid’s corrupt interests, wants Cliven Bundy out of the 600,000 acre Gold Butte area so the agency can use the land for future solar projects and de facto buffer zones surrounding the solar farms.

original link

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Film that includes clips from mainsteam media at the time, CBS etc. http://www.ncoic.com/clinton.htm ARKANSAS GOVERNOR BILL CLINTON PRESIDENT GEORGE BUSH CIA DRUGS FOR GUNS CONNECTION By Paul DeRienzo An independent group of researchers in Arkansas are charging that Governor Bill Clinton is covering up an airport used by the CIA and major cocaine smugglers in a remote corner of the Ozark mountains. According to Deborah Robinson of In These Times, the Inter mountain Regional Airport in Mena,Arkansas continues to be the hub of operations for people like assassinated cocaine kingpin Barry Seal as well as government intelligence operations linked to arms and drug smuggling. In the 1980′s, the Mena airport became one of the world’s largest aircraft refurbishing centers, providing services to planes from many countries.Researchers claim that the largest consumers of aircraft refurbishing services are drug smugglers and intelligence agencies involved in covert activities.In fact, residents of Mena, Arkansas, have told reporters that former marine Lt. Colonel Oliver North was a frequent visitor during the 1980′s. Eugene Hasenfus, a pilot who was shot down in a Contra supply plane over Nicaragua in 1986, was also seen in town renting cargo vehicles. A federal Grand Jury looking into activities at the Mena airport refused to hand down any indictments after drug running charges were made public.Deborah Robinson says that Clinton had “ignored the situation” until he began his presidential campaign.” Clinton then said he would provide money for a state run investigation of the Mena airport. But according to Robinson, the promise of an investigation was never followed up by Clinton’s staff. In fact, a local Arkansas state prosecutor blasted Clinton’s promise of an investigation, comparing it to “spitting on a forest fire.”

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John McCain and closest friend Charles Keating connected to Saving & Loan scandal in which Americans lost their life savings!!!!

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As the U.S. military withdraws from Afghanistan, it is leaving behind a deadly legacy: about 800 square miles of land littered with undetonated grenades, rockets and mortar shells.

The military has vacated scores of firing ranges pocked with the explosives. Dozens of children have been killed or wounded as they have stumbled upon the ordnance at the sites, which are often poorly marked. Casualties are likely to increase sharply; the U.S. military has removed the munitions from only 3 percent of the territory covered by its sprawling ranges, officials said.

Clearing the rest of the contaminated land — which in total is twice as big as New York City — could take two to five years. U.S. military officials say they intend to clean up the ranges. But because of a lack of planning, officials say, funding has not yet been approved for the monumental effort, which is expected to cost $250 million.“Unfortunately, the thinking was: ‘We’re at war and we don’t have time for this,’ ” said Maj. Michael Fuller, the head of the U.S. Army’s Mine Action Center at Bagram Airfield, referring to the planning.

There are a growing number of tragedies at these high-explosives ranges.

Mohammad Yusef, 13, and Sayed Jawad, 14, grew up 100 yards from a firing range used by U.S. and Polish troops in Ghazni province. The boys’ families were accustomed to the thundering explosions from military training exercises, which sometimes shattered windows in their village.

But as those blasts became less common — a function of the U.S. and NATO withdrawal — the boys started wandering onto the range to collect scrap metal to sell. They did not know that some U.S. explosives do not detonate on impact but can still blow up when someone touches them.

Last month, Jawad’s father, Sayed Sadeq, heard a boom and ran onto the range. He spotted his son’s bloodied torso.

“The left side of his body was torn up. I could see his heart. His legs were missing,” the father said.

One of the boys, it appeared, had stepped on a 40mm grenade, designed to kill anyone within five yards. Both teens died.

“If the Americans believe in human rights, how can they let this happen?” Sadeq said.

Since 2012, the United Nations’ Mine Action Coordination Center of Afghanistan has recorded 70 casualties in and around U.S. or NATO firing ranges or bases, and the pace of the incidents has been quickening. But the statistics do not paint a complete picture; The Washington Post found 14 casualties not included in the U.N. data, Yusef and Jawad among them.

Most of the victims were taking their animals to graze, collecting firewood or searching for scrap metal. Of the casualties recorded by the United Nations, 88 percent were children.

“We are anxious that the problem has arisen just as ISAF is leaving,” said Abigail Hartley, director of the U.N. mine center, referring to the U.S.-led International Security Assistance Force. “It would have been much better to have had it addressed during the last eight years.”

Costly, time-consuming task

Top U.S. military officials say they intend to remove the explosives from the firing ranges.

“It will take time and expense to complete this work, but it’s critical to the safety of the Afghan people and it is the right thing to do,” said Edward Thomas, a spokesman for Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff.

But even if Congress approves the hundreds of millions of dollars in cleanup costs, it will be extremely complicated to remove the munitions.

The U.S. military shuttered more than half of its 880 bases in Afghanistan and withdrew the bulk of its troops before crafting a plan for removal of the unexploded ordnance, said one American official, speaking on the condition of anonymity because he was not authorized to comment on the matter. Some of the ranges that are peppered with explosives were closed as long ago as 2004. Now there are fewer service members to help conduct surveys. And in some areas, there are no U.S. troops to provide security.

“There are less people to identify sites,” the U.S. official said. “And then if you decide you want to do the right thing and get them out there, how do you do it? Who protects them?”

U.S. explosives litter Afghan land, killing and maiming a rising number of Afghan children

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Evelyn Hockstein/For The Washington Post – Mary Grice of Takoma Park, MD, talks with her attorney Robert Vogel, at Vogel’s home in Rockville Maryland, April 5, 2014.

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.

Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters like the one Grice got, informing them that because of a debt they never knew about — often a debt incurred by their parents — the government has confiscated their check.

The Treasury Department has intercepted $1.9 billion in tax refunds already this year — $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service. The aggressive effort to collect old debts started three years ago — the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.

No one seems eager to take credit for reopening all these long-closed cases. A Social Security spokeswoman says the agency didn’t seek the change; ask Treasury. Treasury says it wasn’t us; try Congress. Congressional staffers say the request probably came from the bureaucracy.

The only explanation the government provides for suddenly going after decades-old debts comes from Social Security spokeswoman Dorothy Clark: “We have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due.”

Since the drive to collect on very old debts began in 2011, the Treasury Department has collected $424 million in debts that were more than 10 years old. Those debts were owed to many federal agencies, but the one that has many Americans howling this tax season is the Social Security Administration, which has found 400,000 taxpayers who collectively owe $714 million on debts more than 10 years old. The agency expects to have begun proceedings against all of those people by this summer.

“It was a shock,” said Grice, 58. “What incenses me is the way they went about this. They gave me no notice, they can’t prove that I received any overpayment, and they use intimidation tactics, threatening to report this to the credit bureaus.”

Grice filed suit against the Social Security Administration in federal court in Greenbelt this week, alleging that the government violated her right to due process by holding her responsible for a $2,996 debt supposedly incurred under her father’s Social Security number.

Social Security officials told Grice that six people — Grice, her four siblings and her father’s first wife, whom she never knew — had received benefits under her father’s account. The government doesn’t look into exactly who got the overpayment; the policy is to seek compensation from the oldest sibling and work down through the family until the debt is paid.

The Federal Trade Commission, on its Web site, advises Americans that “family members typically are not obligated to pay the debts of a deceased relative from their own assets.” But Social Security officials say that if children indirectly received assistance from public dollars paid to a parent, the children’s money can be taken, no matter how long ago any overpayment occurred.

“While we are responsible for collecting delinquent debts owed to taxpayers, we understand the importance of ensuring that debtors are treated fairly,” Treasury’s Schramek said in a statement responding to questions from The Washington Post. He said Treasury requires that debtors be given due process.

Social Security spokeswoman Clark, who declined to discuss Grice’s or any other case, even with the taxpayer’s permission, said the agency is “sensitive to concerns about our attempts to arrange repayment of overpayments.” She said that before taking any money, Social Security makes “multiple attempts to contact debtors via the U.S. Mail and by phone.”

Grice, who works for the Food and Drug Administration and lives in Takoma Park, in the same apartment she’s resided in since 1984, never got any notice about a debt.

Social Security officials told her they had sent their notice to her post office box in Roxboro, N.C. Grice rented that box from 1977 to 1979 and never since. And Social Security has Grice’s current address: Every year, it sends her a statement about her benefits.

“Their record-keeping seems to be very spotty,” she said.

Treasury officials say that before they will take someone’s refund, the agency owed the money must certify the debt, meaning there must be evidence of the overpayment. But Social Security officials told Grice they had no records explaining the debt.

“The craziest part of this whole thing is the way the government seizes a child’s money to satisfy a debt that child never even knew about,” says Robert Vogel, Grice’s attorney. “They’ll say that somebody got paid for that child’s benefit, but the child had no control over the money and there’s no way to know if the parent ever used the money for the benefit of that kid.”

Grice, the middle of five children, said neither of her surviving siblings — one older, one younger — has had any money taken by the government. When Grice asked why she had been selected to pay the debt, she was told it was because she had an income and her address popped up — the correct one this time.

Grice found a lawyer willing to take her case without charge. Vogel is exercised about the constitutional violations he sees in the retroactive lifting of the 10-year limit on debt collection. “Can the government really bring back to life a case that was long dead?” the lawyer asked. “Can it really be right to seize a child’s money to satisfy a parent’s debt?”

But many other taxpayers whose refunds have been taken say they’ve been unable to contest the confiscations because of the cost, because Social Security cannot provide records detailing the original overpayment, and because the citizens, following advice from the IRS to keep financial documents for just three years, had long since trashed their own records.

In Glenarm, Ill., Brenda and Mike Samonds have spent the past year trying to figure out how to get back the $189.10 tax refund the government seized, claiming that Mike’s mother, who died 33 years ago, had been overpaid on survivor’s benefits after Mike’s father died in 1969.

“It was never Mike’s money, it was his mother’s,” Brenda Samonds said. “The government took the money first and then they sent us the letter. We could never get one sentence from them explaining why the money was taken.” The government mailed its notice about the debt to the house Mike’s mother lived in 40 years ago.

The Social Security spokeswoman said the agency uses a private contractor to seek current addresses and is supposed to halt collections if notices are returned as undeliverable.

After hours on the phone trying and failing to get information about the debt Mike’s mother was said to owe, the Samondses gave up.

After waiting on hold for two hours with Social Security last week, Ted Verbich also concluded it wasn’t worth the time or money to fight for the $172 the government intercepted last month.

In 1977, Verbich, now 57, was in college at the University of Maryland when he took a full-time job in an accountant’s office. Because he was earning income, he knew he had to give up the survivor’s benefits his mother had received since his father died, when Verbich was 4. But his $70 monthly checks — “They helped with the car payment,” he said — kept coming for a short time after he started work, and Verbich was notified in 1978 that he had to repay about $600. He did.

Thirty-six years later, with no notice, “they snatched my Maryland tax refund,” said Verbich, a federal worker who has lived at the same address in Glendale, Md,. for 30 years and regularly receives Social Security statements there. The feds insisted that he owed $172 but could provide no documents to back up the claim.

Verbich has given up on getting his refund, but he wants a receipt stating that his debt to his country is resolved.

“I’ll put in the request,” a Social Security clerk told Verbich, “but in reality, you’ll never get anything.”

Grice was also told there was little point in seeking a waiver of her debt. Collections can only be halted if the person passes two tests, Clark said: The taxpayer must prove that he “is without fault, and [that] repayment of the overpayment would deprive the person of income needed for ordinary living expenses.”

More than 1,200 appeals have been filed on the old cases, Clark said; taxpayers have won about 10 percent of those appeals.

The Treasury initially held the full amount of Grice’s federal and state refunds, a total of $4,462. Last week, after The Washington Post inquired about Grice’s case, the government returned the portion of her refund above the $2,996 owed on her father’s account.

But unless the feds can prove that she ever received any of the overpayment, Grice wants all of her money back.

“Look, I love a good fight, especially for principle,” she said. “My mom used to say, ‘This country is carried on the backs of the little people,’ and now I see what she meant. This is really sad.”

Social Security, Treasury target taxpayers for their parents’ decades-old debts

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Professor Martin pursues the Jewish role in the African slave trade. A subject that has eluded most of us in “Higher Learning Institutions”.

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Dead banker number 13? Banking: The world’s most dangerous profession since Bush had a bunch of microbiologists deep-sixed who had been working on flu pandemics.

AMSTERDAM (Reuters) – A Dutch former top banker who came under fire for taking a large pay-off after the nationalisation of his troubled bank was found dead along with his wife and daughter on Saturday in what police called a family tragedy.

Jan Peter Schmittmann, 57, ran the domestic operations of Dutch bank ABN Amro between 2003 and 2007 and was widely criticized for landing an 8 million euro ($10.95 million) pay-off after the bank’s collapse and subsequent nationalization.

Police said they visited his house in the wealthy commuter town of Laren early on Saturday after being alerted by a family friend. There they found his body along with those of his 57-year-old wife and 22-year-old younger daughter.

A police spokeswoman said an investigation was underway but that all early clues pointed to a family drama having taken place. There was no indication that Schmittmann’s business dealings had played any role in the tragedy.

The daily Algemeen Dagblad said the three were found by Schmittmann’s elder daughter who had come to visit before departing for India, where she had been due to do an internship.

The elder daughter was in the care of wider family and the police victim care unit, police spokeswoman Leonie Bosselaar said.

Schmittmann paved the way for ABN Amro’s break-up and sale in 2007 to a consortium of the banks Royal Bank of Scotland, Fortis and Santander. After they came into difficulties during the global financial crisis, the Dutch government nationalized the core Dutch operations of ABN Amro.

When he left the bank after its nationalization in 2008, Schmittmann was contractually due a 16 million euro pay-off, a sum that was halved after then finance minister Wouter Bos described it as “exorbitant”.

original link

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Australia’s housing bubble is back in full swing. Prices rose almost 11 percent over the past year to record levels in absolute terms and near-record levels as a share of household income. Prices in Sydney rose 15 percent.

Household debt as a percent of income surpassed the previous record.

WAtoday reports Australia’s house prices ‘flashing red’, debt to income ratio at record levels.

Australian household debt has hit a record 177 per cent of annual disposable income while housing valuations are “flashing red”, according to Barclay’s chief economist, Kieran Davies.

“House prices now equate to 4.3 times annual income and 28 times annual rent, both within a fraction of their historic highs,” Mr Davies said.

Home Prices to Income

 

Household Debt as Percent of Income

 

In March RBA governor Glenn Stevens warned “we need to be alert to the possibility that the past year of strong rises in dwelling prices leads people to assume that this is the norm”.

“Were such an assumption to lead to increasing speculative activity, accompanied by a renewed increase in household leverage with all the associated risks to the housing market … that would be unwelcome,” Mr Stevens said.

That home prices and debt-to-income are back up at record levels is a sign that speculation is already back in full swing.

Is there any central bank governor anywhere that can spot speculative bubbles before they burst? Apparently not.

Mike “Mish” Shedlock
Read more at

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2014 Militaries Ranked
Global Firepower Compare Countries
MANPOWER:Total Populations
Available Manpower
Fit for Service
Reaching Military Age Annually
Active Military Manpower
Active Reserve Military Manpower


LAND SYSTEMS:
Tanks (MBT / Light)
Armored Fighting Vehicles
Self-Propelled Guns
Towed Artillery Pieces
Rocket Projectors (MLRS)


AIR POWER:
Total Aircraft
• Fighters/Interceptors
• Attack Aircraft
• Transport Aircraft
• Trainer Aircraft
Helicopters
• Attack Helicopters
Serviceable Airports


NAVAL POWER:
Total Strength
Aircraft Carriers
Frigates
Destroyers
Corvettes
Submarines
Patrol Craft
Mine Warfare

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NIXON’S BANKERS: When What Was Good for Wall Street Was Good for the President

Wall Street’s War

While the protests against the Vietnam War intensified in the first years of the Nixon administration, the financial elite was fighting its own war—over the future of banking and against Glass-Steagall regulations. National City Bank chairman Walter Wriston was a steadfast warrior in related battles, as he fought with Chase chairman David Rockefeller for supremacy over the US banker community and for dominance over global finance.

Rockefeller’s sights were set on a grander prize, one with worldwide implications: ending the financial cold war. He made his mark in that regard by opening the first US bank in Moscow since the 1920s, and the first in Beijing since the 1949 revolution.

Augmenting their domestic and international expansion plans, both men and their banks prospered from the emerging and extremely lucrative business of recycling petrodollars from the Middle East into third world countries. By acting as the middlemen—capturing oil revenues and transforming them into high-interest-rate loans, to Latin America in particular—bankers accentuated disparities in global wealth. They dumped loans into developing countries and made huge amounts of money in the process. By funneling profits into debts, they caused extreme pain in the debtor nations, especially when the oil-producing nations began to raise their prices. This raised the cost of energy and provoked a wave of inflation that further oppressed these third world nations, the US population, and other economies throughout the world.

Bank Holding Company Battles

When Eisenhower signed the 1956 Bank Holding Company Act banning interstate banking, he left a large loophole as a conciliatory gambit: a gray area as to what big banks could consider “financially-related business,” which fell under their jurisdiction. In practice, that meant that they could find ways to expand their breadth of services while they figured out ways to grow their domestic grab for depositors. On May 26, 1970, the “Big Three” bankers— Wriston and Rockefeller, along with Alden “Tom” Clausen, chairman of Bank America Corporation—appeared before the Senate Banking and Currency Committee to press their case for widening the loophole.

During the proceedings, Wriston led the charge on behalf of his brethren in the crusade. Tall, slim, elegantly dressed, and the most articulate of the three, he dramatically called on Congress to “throw off some of the shackles on banking which inhibit competition in the financial markets.”

The global financial landscape was evolving. Ever since World War II, US bankers hadn’t worried too much about their supremacy being challenged by other international banks, which were still playing catch-up in terms of deposits, loans, and global customers. But by now the international banks had moved beyond postwar reconstructive pain and gained significant ground by trading with Cold War enemies of the United States. They were, in short, cutting into the global market that the US bankers had dominated by extending themselves into areas in which the US bankers were absent for US policy reasons. There was no such thing as “enough” of a market share in this game. As a result, US bankers had to take a longer, harder look at the “shackles” hampering their growth. To remain globally competitive, among other things, bankers sought to shatter post-Depression legislative barriers like Glass-Steagall.

They wielded fear coated in shades of nationalism as a weapon: if US bankers became less competitive, then by extension the United States would become less powerful. The competition argument would remain dominant on Wall Street and in Washington for nearly three decades, until the separation of speculative and commercial banking that had been invoked by the Glass-Steagall Act would be no more.

Wriston deftly equated the expansion of US banking with general US global progress and power. It wasn’t so much that this connection hadn’t occurred to presidents or bankers since World War II; indeed, that was how the political-financial alliances had been operating. But from that point on, the notion was formally and publicly verbalized, and placed on the congressional record. The idea that commercial banks served the country and perpetuated its global identity and strength, rather than the other way around, became a key argument for domestic deregulation—even if, in practice, it was the country that would serve the banks.

The Penn Central Debacle

There was, however, a fly in the ointment. To increase their size, bankers wanted to be able to accumulate more services or branches beneath the holding company umbrella. But a crisis in another industry would give some legislators pause. The Penn Central meltdown, the first financial crisis of Nixon’s presidency, temporarily dampened the ardency of deregulation enthusiasts. The collapse of the largest, most diverse railroad holding company in America was blamed on overzealous bank lending to a plethora of non-railroad-oriented entities under one holding company umbrella. The debacle renewed debate about a stricter bank holding company bill.

Under Wriston’s guidance, National City had spearheaded a fifty-three-bank syndicate to lend $500 million in revolving credit to Penn Central, even when it showed obvious signs of imminent implosion.

Penn Central had been one of the leading US corporations in the 1960s. President Johnson had supported the merger that spawned the conglomerate on behalf of a friend, railroad merger specialist Stuart Saunders, who became chairman. He had done this over the warnings of the Justice Department and despite allegations of antitrust violations called by its competitors. With nary a regulator paying attention, Penn Central had morphed into more than a railroad holding company, encompassing real estate, hotels, pipelines, and theme parks. Meanwhile, highways, cars, and commercial airlines had chipped away at Penn Central’s dominant market position. To try to compensate,
Penn Central had delved into a host of speculative expansions and deals. That strategy was failing fast. By May 1970, Penn Central was feverishly drawing on its credit lines just to scrounge up enough cash to keep going.

The conglomerate demonstrated that holding companies could be mere shell constructions under which other unrelated businesses could exist, much as the 1920s holding companies housed reckless financial ventures under utility firm banners.

Allegations circulated that Rockefeller had launched a five-day selling strategy of Penn Central stock, culminating with the dumping of 134,400 shares on the fifth day, based on insider information he received as one of the firm’s key lenders. He denied the charges.

In a joint effort with the bankers to hide the Penn Central debacle behind a shield of federal bailout loans, the Pentagon stepped in, claiming that assisting Penn Central was a matter of national defense.5 Under the auspices of national security, Washington utilized the Defense Production Act of 1950, a convenient bill passed at the start of the Korean War that enabled the president to force businesses to prioritize national security–related endeavors.

On June 21, 1970, Penn Central filed for bankruptcy, becoming the first major US corporation to go bust since the Depression. Its failure was not an isolated incident by any means. Instead, it was one of a number of major defaults that shook the commercial paper market to its core. (“Commercial paper” is a term for the short-term promissory notes sold by large corporations to raise quick money, backed only by their promise to pay the amount of the note at the end of its term, not by any collateral.) But the agile bankers knew how to capitalize on that turmoil. When companies stopped borrowing in the flailing commercial paper market, they had to turn to major banks like Chase for loans instead. As a result, the worldwide loans of Chase, First National City Bank, and Bank of America surged to $27.7 billion by the end of 1971, more than double the 1969 total of $13 billion.

A year later, the largest US defense company, Lockheed, was facing bankruptcy, as well. Again bankers found a way to come out ahead on the people’s dime. Lockheed’s bankers at Bank of America and Bankers Trust led a syndicate that petitioned the Defense Department for a bailout on similar national security grounds. The CEO, Daniel Haughton, even agreed to step down if an appropriate government loan was provided.

In response, the Nixon administration offered $250 million in emergency loans to Lockheed—in effect, bailing out the banks and the corporation. To explain the bailout at a time when the general economy was struggling, Nixon introduced the Lockheed Emergency Loan Act by stating, “It will have a major impact on the economy of California, and will contribute greatly to the economic strength of the country as a whole.” After the bill was passed, not a single Lockheed executive stepped down.

It would take several years of political-financial debate and more bailouts to sustain Penn Central. One 1975 article labeled the entire episode “The Penn-C Fairy Tale” and condemned the subsequent federal bailout: “While the country is in the worst recession since the depression and unemployment lines grow longer every day, Congress is dumping another third of a billion dollars of your tax payer dollars down the railroad rat hole.” (The incident was prologue: Congress would lavish hundreds of billions of dollars to sustain the biggest banks after the 2008 financial crisis, topped up by trillions of dollars from the Fed and the Treasury Department in the form of loans, bond purchases, and other subsidies.)

More Bank Holding Company Politics

Despite the Penn Central crisis, the revised Bank Holding Company Act decisively passed the Senate on September 16, 1970, by a bipartisan vote of seventy-seven to one. The final version was far more lenient than the one that Texas Democrat John William Wright Patman, chair of the House Committee on Banking and Currency, or even the Nixon administration had originally envisioned. The revised act allowed big banks to retain nonbank units acquired before June 1968. It also gave the Fed greater regulatory authority over bank holding companies, including the power to determine what constituted one. Language was added to enable banks to be considered one-bank holding companies if they, or any of their subsidiaries, held any deposits or extended any commercial loans, thus broadening their scope.

President Nixon signed the bill into law without fanfare on New Year’s Eve 1970. In fact, his inner circle decided against making a splash about it. They didn’t think the public would understand or care. Plus, they realized that there was a prevailing attitude that the Nixon administration had favored the big banks, and though it had, this was not something they wanted to draw attention to.

The End of the Gold Standard

The top six banks controlled 20 percent of the nation’s deposits through one-bank holding companies, but second place in that group wasn’t good enough for Wriston, who noted to the Nixon administration that his bank was really the “caretaker of the aspirations of millions of people” whose money it held. Wriston flooded the New York Fed with proposals for expansion. His applications “were said to represent as many as half of the total of all of the banks.” The Fed was so overwhelmed, it had to enlist First National City Bank to interpret the new law on its behalf.

By mid-1971, the Fed had approved thirteen and rejected seven of Wriston’s applications. His biggest disappointment was the insurance underwriting rejection. The possibility of converting depositors for insurance business had been tantalizing. It would continue to be a hard-fought, ultimately successful battle.

Around the same time, New York governor Nelson Rockefeller (David Rockefeller’s brother) approved legislation permitting banks to set up subsidiaries in each of the state’s nine banking districts. This was a gift for Wriston and David Rockefeller, because it meant their banks could expand within the state. Each subsidiary could open branches through June 1976, when the districts would be eliminated and banks could merge and branch freely.

Several months later, First National City Bank was paying generous prices to purchase the tiniest upstate banks, from which it began extending loans to the riskiest companies and getting hosed in the process; a minor David vs. Goliath revenge of local banks against Wall Street muscle.

By that time, the stock market had turned bearish, and foreign countries were increasingly demanding their paper dollars be converted into gold as they shifted funds out of dollar reserves. Bankers, meanwhile, postured for a dollar devaluation, which would make their cost of funds cheaper and enable them to expand their lending businesses.

They knew that the fastest way to further devalue the dollar was to sever it from gold, and they made their opinions clear to Nixon, taking care to blame the devaluation on external foreign speculation, not their own movement of capital and lending abroad.

The strategy worked. On August 15, 1971, Nixon bashed the “international money speculators” in a televised speech, stating, “Because they thrive on crises they help to create them.”16 He noted that “in recent weeks the speculators have been waging an all-out war on the American dollar.” His words were true in essence, yet they were chosen to exclude the actions of the major US banks, which were also selling the dollar. Foreign central banks had access to US gold through the Bretton Woods rules, and they exercised this access. Exchanging dollars for gold had the effect of decreasing the value of the US dollar relative to that gold. Between January and August 1971, European banks (aided by US banks with European branches) catalyzed a $20 billion gold outflow.

As John Butler wrote in The Golden Revolution, “By July 1971, the US gold reserves had fallen sharply, to under $10 billion, and at the rate things were going, would be exhausted in weeks. [Treasury Secretary John] Connally was tasked with organizing an emergency weekend meeting of Nixon’s various economic and domestic policy advisers. At 2:30 p.m. on August 13, they gathered, in secret, at Camp David to decide how to respond to the incipient run on the dollar.”

Nixon’s solution, pressed by the banking community, was to abandon the gold standard. In his speech the president informed Americans that he had directed Connally to “suspend temporarily the convertibility of the dollar into gold or other reserve assets.” He promised this would “defend the dollar against the speculators.” Because Bretton Woods didn’t allow for dollar devaluation, Nixon effectively ended the accord that had set international currency parameters since World War II, signaling the beginning of the end of the gold standard.

Once the dollar was no longer backed by gold, questions surfaced as to what truly backed it (besides the US military). According to Butler, “The Bretton Woods regime was doomed to fail as it was not compatible with domestic US economic policy objectives which, from the mid-1960s onwards, were increasingly inflationary.”

It wasn’t simply policy that was inflationary. The expansion of debt via the joint efforts of the Treasury Department and the Federal Reserve was greatly augmented by the bankers’ drive to loan more funds against their capital base. That established a debt inflation policy, which took off after the dissolution of Bretton Woods. Without the constraint of keeping gold in reserve to back the dollar, bankers could increase their leverage and speculate more freely, while getting money more easily from the Federal Reserve’s discount window. Abandoning the gold standard and “floating” the dollar was like navigating the waters of global finance without an anchor to slow down the dispersion of money and loans. For the bankers, this made expansion much easier.

Indeed, on September 24, 1971, Chase board director and former Treasury Secretary C. Douglas Dillon (chairman of the Brookings Institution and, from 1972 to 1975, the Rockefeller Foundation) told Connally that “under no circumstances should we ever go back to assuming limited convertibility into gold.” Chase Board chairman David Rockefeller wrote National Security Adviser (and later Secretary of State) Henry Kissinger to recommend “a reevaluation of foreign currencies, a devaluation of the dollar, removal of the U.S. import surcharge and ‘buy America’ credits, and a new international monetary system with greater flexibility . . . and less reliance on gold.”

With the dollar devalued, investors poured money into stocks, fueling a rally from November 1971 led by the “Nifty Fifty,” a group of “respectable” big-cap growth stocks. These were being bought “like greyhounds chasing a mechanical rabbit” by pension funds, insurance companies, and trust funds. The Chicago Board of Trade began trading options on individual stocks in 1973 to increase the avenues for betting; speculators could soon thereafter trade futures on currencies and bonds.

The National Association of Securities Dealers rendered all this trading easier on February 8, 1971, when it launched the NASDAQ. The first computerized quote system enabled market makers to post and transact over-the-counter prices quickly. With the stock market booming again, NASDAQ became a more convenient avenue for Wall Street firms to raise money. Many abandoned their former partnership models whereby the firm’s partners risked their own capital for the firm, in favor of raising capital by selling the public shares. That way, the upside—and the growing risk—would also be diffused and transferred to shareholders. Merrill Lynch was one of the first major investment bank partnerships to go “public” in 1971. Other classic industry leaders quickly followed suit.

Meanwhile, corporations were finding prevailing lower interest rates more attractive. Instead of getting loans from banks, they could fund themselves more cheaply by issuing bonds in the capital markets. This took business away from commercial banks, which were restricted by domestic regulation from acting as issuing agents. But bankers had positioned themselves on both sides of the Atlantic to get around this problem, so they were covered by the shift in their major customers’ financing preferences. While their ability to service corporate demand was dampened at home, overseas it roared. Currency market turmoil also led many countries to the Eurodollar market for credit, where US banks were waiting. Thus, the credit extended through international branches of major US banks tripled to $4.5 billion from 1969 to 1972.

The market rally, cheered on by the media, was enough to bolster Nixon’s fortunes. In the fall of 1972, Nixon was reelected in a landslide on promises to end the Vietnam War with “peace and honor.” Wall Street reaped the benefits of a bull market, and more citizens and companies were sucked into new debt products. The Dow hit a 1970s peak of 1,052 points in January 1973, as Nixon began his second term.

Liquidation Channel

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