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[size=24pt]Is Homeland Security Preparing for the Next Wall Street Collapse?[/size]
Posted on October 7, 2013 by WashingtonsBlog

Guest post by Ellen Brown, http://www.WebofDebt.com.

Reports are that the Department of Homeland Security (DHS) is engaged in a massive, covert military buildup. An article in the Associated Press in February confirmed an open purchase order by DHS for 1.6 billion rounds of ammunition. According to an op-ed in Forbes, that’s enough to sustain an Iraq-sized war for over twenty years. DHS has also acquired heavily armored tanks, which have been seen roaming the streets. Evidently somebody in government is expecting some serious civil unrest. The question is, why?

Recently revealed statements by former UK Prime Minister Gordon Brown at the height of the banking crisis in October 2008 could give some insights into that question. An article on BBC News on September 21, 2013, drew from an explosive autobiography called Power Trip by Brown’s spin doctor Damian McBride, who said the prime minister was worried that law and order could collapse during the financial crisis. McBride quoted Brown as saying:

If the banks are shutting their doors, and the cash points aren’t working, and people go to Tesco [a grocery chain] and their cards aren’t being accepted, the whole thing will just explode.

If you can’t buy food or petrol or medicine for your kids, people will just start breaking the windows and helping themselves.

And as soon as people see that on TV, that’s the end, because everyone will think that’s OK now, that’s just what we all have to do. It’ll be anarchy. That’s what could happen tomorrow.

How to deal with that threat? Brown said, “We’d have to think: do we have curfews, do we put the Army on the streets, how do we get order back?”

McBride wrote in his book Power Trip, “It was extraordinary to see Gordon so totally gripped by the danger of what he was about to do, but equally convinced that decisive action had to be taken immediately.” He compared the threat to the Cuban Missile Crisis.

Fear of this threat was echoed in September 2008 by US Treasury Secretary Hank Paulson, who reportedly warned that the US government might have to resort to martial law if Wall Street were not bailed out from the credit collapse.

In both countries, martial law was avoided when their legislatures succumbed to pressure and bailed out the banks. But many pundits are saying that another collapse is imminent; and this time, governments may not be so willing to step up to the plate.

The Next Time WILL Be Different

What triggered the 2008 crisis was a run, not in the conventional banking system, but in the “shadow” banking system, a collection of non-bank financial intermediaries that provide services similar to traditional commercial banks but are unregulated. They include hedge funds, money market funds, credit investment funds, exchange-traded funds, private equity funds, securities broker dealers, securitization and finance companies. Investment banks and commercial banks may also conduct much of their business in the shadows of this unregulated system

The shadow financial casino has only grown larger since 2008; and in the next Lehman-style collapse, government bailouts may not be available. According to President Obama in his remarks on the Dodd-Frank Act on July 15, 2010, “Because of this reform, . . . there will be no more taxpayer funded bailouts – period.”

Governments in Europe are also shying away from further bailouts. The Financial Stability Board (FSB) in Switzerland has therefore required the systemically risky banks to devise “living wills” setting forth what they will do in the event of insolvency. The template established by the FSB requires them to “bail in” their creditors; and depositors, it turns out, are the largest class of bank creditor. (For fuller discussion, see my earlier article here.)

When depositors cannot access their bank accounts to get money for food for the kids, they could well start breaking store windows and helping themselves. Worse, they might plot to overthrow the financier-controlled government. Witness Greece, where increasing disillusionment with the ability of the government to rescue the citizens from the worst depression since 1929 has precipitated riots and threats of violent overthrow.

Fear of that result could explain the massive, government-authorized spying on American citizens, the domestic use of drones, and the elimination of due process and of “posse comitatus” (the federal law prohibiting the military from enforcing “law and order” on non-federal property). Constitutional protections are being thrown out the window in favor of protecting the elite class in power.

The Looming Debt Ceiling Crisis

The next crisis on the agenda appears to be the October 17th deadline for agreeing on a federal budget or risking default on the government’s loans. It may only be a coincidence, but two large-scale drills are scheduled to take place the same day, the “Great ShakeOut Earthquake Drill” and the “[url=http://www.bloomberg.com/video/-quantum-dawn-2-is-a-cyber-attack-bank-drill-%7EFFjng%7EnR9ir5OoFnRPLNw.html]Quantum Dawn 2 Cyber Attack Bank Drill[/url].” According to a Bloomberg news clip on the bank drill, the attacks being prepared for are from hackers, state-sponsored espionage, and organized crime (financial fraud). One interviewee stated, “You might experience that your online banking is down . . . . You might experience that you can’t log in.” It sounds like a dress rehearsal for the Great American Bail-in.

Ominous as all this is, it has a bright side. Bail-ins and martial law can be seen as the last desperate thrashings of a dinosaur. The exploitative financial scheme responsible for turning millions out of their jobs and their homes has reached the end of the line. Crisis in the current scheme means opportunity for those more sustainable solutions waiting in the wings.

Other countries faced with a collapse in their debt-based borrowed currencies have survived and thrived by issuing their own. When the dollar-pegged currency collapsed in Argentina in 2001, the national government returned to issuing its own pesos; municipal governments paid with “debt-canceling bonds” that circulated as currency; and neighborhoods traded with community currencies. After the German currency collapsed in the 1920s, the government turned the economy around in the 1930s by issuing “MEFO” bills that circulated as currency. When England ran out of gold in 1914, the [url=http://www.ukcolumn.org/sites/default/files/Bankers%20Bradbury%20and%20the%20carnage%20on%20the%20Western%20Front%21%2030:11:12.pdf]government issued “Bradbury pounds[/url]” similar to the Greenbacks issued by Abraham Lincoln during the US Civil War.

Today our government could avoid the debt ceiling crisis by doing something similar: it could simply mint some trillion dollar coins and deposit them in an account. That alternative could be pursued by the Administration immediately, without going to Congress or changing the law, as discussed in my earlier article here. It need not be inflationary, since Congress could still spend only what it passed in its budget. And if Congress did expand its budget for infrastructure and job creation, that would actually be good for the economy, since hoarding cash and paying down loans have significantly shrunk the circulating money supply.

Peer-to-peer Trading and Public Banks

At the local level, we need to set up an alternative system that provides safety for depositors, funds small and medium-sized businesses, and serves the needs of the community.

Much progress has already been made on that front in the peer-to-peer economy. In a September 27th article titled “Peer-to-Peer Economy Thrives as Activists Vacate the System,” Eric Blair reports that the Occupy Movement is engaged in a peaceful revolution in which people are abandoning the established system in favor of a “sharing economy.” Trading occurs between individuals, without taxes, regulations or licenses, and in some cases without government-issued currency.

Peer-to-peer trading happens largely on the Internet, where customer reviews rather than regulation keep sellers honest. It started with eBay and Craigslist and has grown exponentially since. Bitcoin is a private currency outside the prying eyes of regulators. Software is being devised that circumvents NSA spying. Bank loans are being shunned in favor of crowdfunding. Local food co-ops are also a form of opting out of the corporate-government system.

Peer-to-peer trading works for local exchange, but we also need a way to protect our dollars, both public and private. We need dollars to pay at least some of our bills, and businesses need them to acquire raw materials. We also need a way to protect our public revenues, which are currently deposited and invested in Wall Street banks that have heavy derivatives exposure.

To meet those needs, we can set up publicly-owned banks on the model of the Bank of North Dakota, currently our only state-owned depository bank. The BND is mandated by law to receive all the state’s deposits and to serve the public interest. Ideally, every state would have one of these “mini-Feds.” Counties and cities could have them as well. For more information, see http://PublicBankingInstitute.org.

Preparations for martial law have been reported for decades, and it hasn’t happened yet. Hopefully, we can sidestep that danger by moving into a saner, more sustainable system that makes military action against American citizens unnecessary.

Ellen Brown is an attorney, president of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt. In The Public Bank Solution, her latest book, she explores successful public banking models historically and globally. Her 200-plus blog articles are at [url]EllenBrown.com[/url].

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[size=24]‘Big lender’ China urges US to avoid bankruptcy[/size]
Published time: October 07, 2013 14:30

China's Vice Finance Minister Zhu Guangyao (Reuters)
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Budget, China, Crisis, Finance, Global economy, USA

As the Government shutdown in the US enters its second week, the country is just 10-days away from default, and the country’s main creditor China has urged Washington to take decisive steps to avoid bankruptcy and ensure safety of Chinese investments.

China, the US government's largest foreign creditor, is "naturally concerned about developments in the US fiscal cliff", as Reuters quoted Vice Finance Minister Zhu Guangyao giving the Chinese government's first public response to the Oct 17 US deadline for raising the debt ceiling.

China currently holds 22.85 percent of the US $16.7trln debt, which makes it the biggest US creditor.


Treasury Secretary Jacob Lew calculated the US would run out of money by October 17 and have less than $30 billion cash in hand if Congress fails to agree on its spending plans.

"We ask that the United States earnestly takes steps to resolve in a timely way before October 17 the political (issues) around the debt ceiling and prevent a US debt default to ensure safety of Chinese investment in the United States and the global economic recovery," Zhu said.

In 2011 a similar budget deadlock cost the US its triple-A rating, with Standard & Poors downgrading the country to AA+.

"We hope the United States fully understands the lessons of history," Zhu said.

The debt ceiling debate of 2011 resolved with a last minute decision following tough warnings over the economic catastrophe from the looming default.

This time around alarm bells are ringing again, with Treasury Secretary Jack Lew warning that the budget brinkmanship was "playing with fire" and imploring the Congress to pass legislation to re-open the government as well as increase the nation's debt limit.

The lack of accord in the US Congress could cost the US a default – the first in history - which would send the global economy into a financial crisis similar to 2008 or worse. The 2008 financial crisis plunged the country into the worst recession since the Great Depression of the 1930s.

Raising the debt ceiling is vital for the US itself and the global economy, but Republican House Speaker John Boehner insists the increase of the maximum allowed borrowing limit should come with terms. Boehner vowed on Sunday that there was "no way" Republican lawmakers would agree to a measure to raise the debt ceiling unless it included conditions to rein in deficit spending.

“The votes are not in the House to pass a clean debt limit, and the President is risking default by not having a conversation with us,” Boehner said.

The shutdown has put hundreds of thousands of workers off the job, closed national parks and museums and stopped an array of government services.

The one bright spot in a Washington deadlock is a significant chunk of the furloughed federal workforce is headed back to work. Defense Secretary Chuck Hagel ordered nearly 350,000 back on the job, basing his decision on a Pentagon interpretation of a law called the Pay Our Military Act.

Those who remain at home or are working without paychecks are a step closer to getting back pay once the partial government shutdown ends. The Senate could act this week on the measure that passed the House unanimously on Saturday.

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If the US is not careful and redirect its policies.it would crash.They're only basking in the pride of being the world's strongest Super-power,powers do change hand they forget.There are emerging econonmies in other world powers who have a less stiff and simpler approach to maintaining economic buoyancy.

It's evident. The U.S. adminstration is really getting ready for an apocalyptic uprising. But there seems to be more of growing distrust of fundamental Christian groups, probably because they are the main bane of the Conservatives.

The present administration is putting the noose on groups who oppose their programs like the LGBT protection, removal of religious symbols and words from national properties, Obamacre involving microchipping of Americans, spychecks on U.S. citizens, control of private ownership of guns, expensive foreign wars, reduction of gross support for Israel, globalization, mounting debt profile, involvement of Illuminati in government control and many others. Most of these groups opposing the administrstion are comprised of Bible believing Christians.

I'm envisaging a situation where soon, it's going to be riskier to be a Christian in the U.S. The authorities are suspect more because they believe that it is these people that could lead an uprising.