North-American Monetary Integration: Here Comes the Amero

North-American Monetary Integration: Here Comes the Amero

by Andrew G. Marshall

Global Research, January 20, 2008
http://www.globalresearch.ca/index.php?context=va&aid=7854


Many have now heard rumblings of the "amero", a proposed North American currency to replace the Canadian loonie, dollar and peso. However, most of the mentions of this concept, when discussed in the mainstream media tend to focus on suggesting that talk of an "amero", and in effect, the accompanying North American Union, is nothing but a conspiracy theory created by deluded xenophobes afraid of immigration and globalization. The Boston Globe recently wrote such a story, titled, "The Amero Conspiracy", which stated, "The SPP [Security and Prosperity Partnership] does exist, and its tri-national task forces continue to meet, but its members consider it a way for the United States, Canada, and Mexico to collaborate on issues such as customs, environmental and safety regulations, narcotics smuggling, and terrorism. The amero, on the other hand, appears to be purely theoretical." 1

However, despite being conveyed as "purely theoretical", a recent article in the national Canadian newspaper, the Financial Post, referred to the amero, not as a theoretical idea or conspiracy theory, but as a potential reality. The article entitled, Fix the Loonie, lays out the process to be undertaken before the adoption of a continental currency known as the Amero.

The article was written as a response to a previous article written in defense of Canada's flexible exchange rate system, to which it states, "David Laidler's recent defence of Canada's flexible exchange rate system misses completely the point made by Nobel Prize winning economist Robert Mundell in his famous article on optimum currency areas. Mundell's article has been widely credited with providing the intellectual base for the European Monetary Union and merits attention." 2 The article continued elaborating on the previous point made by Mundell, stating, "If flexible exchange rates are best for Canada on the grounds presented by Laidler, why would flexible rates not be best also for Alberta, Ontario or New Brunswick?" It continued, "Milton Friedman's response to Mundell was that he would not advocate flexible rates for every possible region."

The article contends that Canada is currently suffering from what the author refers to as the 'Dutch Disease', "which is named after the problems that developed in the 1960s when the Netherlands sold natural gas that had been discovered on its coast. The increases in Dutch exports of resources, like those of Canada in recent years, resulted in a strong appreciation of exchange rates, which was reinforced by interest rate policies of central banks and currency speculators." It further states that, "The disease manifests itself through the loss of domestic manufacturers' ability to compete abroad and with imports." The author then contends that, "The disease manifests itself through the loss of domestic manufacturers' ability to compete abroad and with imports," and that, "The Bank of Canada can keep interest rates low to discourage capital inflows and thus exchange rate increases, but at the cost of fuelling inflationary pressures."

The author then states that there is only one true cure for Canada's 'Dutch Disease', "inoculation of the system by fixing the exchange rate at a level that allows manufacturers to be competitive, perhaps at the rate the Bank of Canada research identifies as the long-run equilibrium, around US90¢." The author goes on to explain the reasoning behind this by giving the example that, "The Netherlands and Austria in the years before the introduction of the euro successfully operated such a system and enjoyed near perfectly stable exchange rates against the German currency. The essential ingredient in this success was the official commitment of the central banks of these two countries to maintain the same interest rate as that of the German central bank."

So if Canada were to do the same in relation to the US dollar, then Canadian interest rates would be subject to the rates set by the US Federal Reserve, with our Bank of Canada lock in step. The author goes on to say, "An analogous commitment by the Bank of Canada with respect to U.S. interest rates may not be credible, tested by speculators and therefore ultimately doomed to failure." Then the article continues, and makes a startling announcement:

"However, there is a solution to this lack of credibility. In Europe, it came through the creation of the euro and formal end of the ability of national central banks to set interest rates. The analogous creation of the amero is not possible without the unlikely co-operation of the United States.

This leaves the credibility issue to be solved by the unilateral adoption of a currency board, which would ensure that international payments imbalances automatically lead to changes in Canada's money supply and interest rates until the imbalances are ended, all without any actions by the Bank of Canada or influence by politicians.

It would be desirable to create simultaneously the currency board and a New Canadian Dollar valued at par with the U.S. dollar. With longer-run competitiveness assured at US90¢ to the U.S. dollar. [Emphasis added]."

In summation, what the author is proposing is to fix the Canadian loonie to the US dollar at US$0.90, create a currency board, which would be an unelected, unaccountable, group of people to handle our monetary policy, creating a route around using the publicly owned Bank of Canada, to ensure the creation of a 'New Canadian Dollar', which would be a prelude to the Amero. The author then explains that, "Fluctuations in global demand for natural resources will always result in competition for labour and capital among Canadian manufacturers and producers of resources. But, at least, the firms in these sectors would no longer have to concern themselves with exchange-rate fluctuations and policies of the Bank of Canada." The article finishes by stating, "There will also always be changes in the U.S. (and Canadian) dollar exchange rate against the euro and other major currencies. But these changes would have minor effects on the Canadian economy because 80% of the country's trade is with the United States."

The author of this article is Herbert Grubel, a professor of economics emeritus at Simon Fraser University, who also happens to be a Senior Fellow at the Fraser Institute, one of Canada's largest and most prominent pro-big business think tanks. 3 Other senior fellows at the Fraser Institute include Eugene Beaulieu, who sits on the Academic Advisory Council to the Deputy Minister of International Trade in the Department of Foreign Affairs and International Trade for the Government of Canada, Martin Collacott, former Canadian Ambassador, Tom Flanagan, ho is known as the "man behind Stephen Harper", and is a member of what is known as the 'Calgary School', which is an unofficial group of like minded thinkers who espouse neo-conservative views, and hold significant influence in the current Conservative government, even referring to Flanagan as the "Godfather of Canada's conservative movement." 4

Flanagan also used to work for Preston Manning, who is also a senior fellow at the Fraser Institute, a former Member of Parliament, and former leader of the opposition, and other senior fellows include Gordon Gibson, a former Assistant to the Minister of Northern Affairs and later Special Assistant to the Prime Minister, Wilf Gobert, former Director and Vice Chairman of Peters & Co. Limited, "an independent, fully integrated investment firm which has specialized for 35 years in investments in the Canadian oil, natural gas, and oilfield services industries," Michael Harris, former Conservative Premier of Ontario, Jerry Jordan, former President and CEO of the Federal Reserve Bank of Cleveland, Ralph Klein, former Premier of Alberta, Rainer Knopff, a professor and also a member of the 'Calgary School', and Brian Tobin, a former Industry Minister. 5

The author of the Financial Post article which mentioned the amero, Herbert Grubel, wrote a paper for the Fraser Institute in 1999, entitled, "The Case for the Amero: The Economic and Politics of a North American Monetary Union", in which he laid out the case for the creation of a regional currency for North America. 6 In this paper, Grubel wrote that, "The plan for a North American Monetary Union presented in this study is designed to include Canada, the United States, and Mexcio," and that, "The North American Central Bank, like the European Central Bank, will have a constitution making it responsible only for the maintenance of price stability and not for full employment." 7

In discussing the issue of sovereignty related to a monetary union, Grubel stated that he thinks that, "sovereignty is not infinitely valuable. The merit of giving up some aspects of sovereignty should be determined by the gains brought by such a sacrifice." 8 He continued in saying, "It is important to note that in practice Canada has given up its economic sovereignty in many areas, the most important of which involve the World Trade Organization (formerly the GATT), the North American Free Trade Agreement," as well as the International Monetary Fund and World Bank. 9 Despite admitting to several agreements and organizations of which strip Canadian sovereignty, Grubel suggests that losing sovereignty in these areas is still worth the benefits.

The introduction of the Amero is an integral aspect of the process of creating a North American Union, much like the European Union. This process is being undertaken through the implementation of the Security and Prosperity Partnership of North America (SPP), which was signed by the leaders of the three North American governments in March of 2005. This agreement is orchestrating the bureaucratic "harmonization" among the three North American nations to pave the way for a North American Community, akin to the previous European Community, and ultimately, a North American Union.

The push for this agenda is being driven by the US-based Council on Foreign Relations (CFR), the preeminent American think tank, and the Canadian Council of Chief Executives, as well as the Mexican equivalent, Consejo Mexicano de Asuntos Internacionales. In May of 2005, the three groups, as a result of their joining forces in a Task Force, released a report entitled, "Building a North American Community," in which they state that, "The Task Force offers a detailed and ambitious set of proposals that build on the recommendations adopted by the three governments at the Texas summit of March 2005. The Task Force's central recommendation is establishment by 2010 of a North American economic and security community, the boundaries of which would be defined by a common external tariff, and an outer security perimeter." 10

Thomas P. D'Aquino was the Canadian Co-Chair of the Task Force report and is also the President and CEO of the Canadian Council of Chief Executives, other Canadian members of the Task Force report include Allan Gotleib, former Canadian Ambassador to the United States, Pierre Marc Johnson, former Premier of Quebec, John Manley, former Deputy Prime Minister of Canada, and after 9/11, negotiated the Smart Border Agreement with the US Secretary for Homeland Security Tom Ridge, and Wendy Dobson, former President of the C.D. Howe Institute, another one of Canada's most prominent think tanks, and former Associate Deputy Minister of Finance in the Government of Canada. 11

The C.D. Howe Institute has on its board of directors, individuals from Imperial Oil Canada, a subsidiary of Exxon Mobil, General Electric Canada, BMO Financial Group, TD Bank Financial Group, Nortel Networks, Manulife Financial, Bank of Nova Scotia, Enbridge Gas Distribution, EnCana Corporation, Ford Motor Company of Canada, HSBC Bank of Canada, Astral Media, Merrill Lynch Canada, CIBC World Markets, and N M Rothschild and Sons Canada. 12

In 1999, the C.D. Howe Institute published a report entitled, From Fixing to Monetary Union: Options for North American Currency Integration. 13 In the paper, it is argued that, "The easiest way to broach the notion of a NAMU [North American Monetary Union] is to view it as the North American equivalent of the European Monetary Union (EMU) and, by extension, the euro." 14 It continued in discussing the issue of sovereignty, stating, "That a NAMU would mean the end of sovereignty in Canadian monetary policy is clear. Most obviously, it would mean abandoning a made-in-Canada inflation rate for a US or NAMU inflation rate." 15

The concept of a North American currency has not only been the object of discussion within powerful big-business think tanks, but has, in fact, been discussed in government positions. In May of 2007, Canada's then-Governor of the Bank of Canada, David Dodge, said that, "North America could one day embrace a euro-style single currency," the Globe and Mail reported. Further, the article stated that, "Some proponents have dubbed the single North American currency the 'amero'," and further, "Answering questions from the audience after a speech in Chicago, Mr. Dodge said a single currency was 'possible'." 16

In November of 2007, the Globe and Mail reported that, "Canada should replace its dollar with a North American currency, or peg it to the U.S. greenback, to avoid the exchange rate shifts the loonie has experienced, renowned money manager Stephen Jarislowsky told a parliamentary committee yesterday," and quoted Jarislowsky as saying, "I think we have to really seriously start thinking of the model of a continental currency just like Europe." 17 The article continued, "Mr. Jarislowsky, a former Canfor Corp. director, said the loonie's rise to above par with the U.S. dollar is destroying manufacturing and could devastate the forest sector," and that, "Mr. Jarislowsky said Canada could either aim for a common North American currency or peg the loonie to the U.S. greenback at about 80 cents (U.S.), allowing it to float within a small band." Jarislowsky, a billionaire often considered to be Canada's Warren Buffet, is a member of several corporate boards, and is also a member of the board of directors of the C.D. Howe Institute. 18

Appearing on Larry King Live recently, former Mexican President and initial signatory to the Security and Prosperity Partnership, Vicente Fox, when asked a question about whether or not it was possible to see a common currency for Latin America, responded by stating, "Long term, very long term. What we propose together, President Bush and myself, it's ALCA, which is a trade union for all of the Americas. And everything was running fluently until Hugo Chavez came. He decided to isolate himself. He decided to combat the idea and destroy the idea," to which Larry King interjected, "It's going to be like the euro dollar, you mean?" and Fox responded, "Well, that would be long, long term. I think the processes to go, first step into is trading agreement. And then further on, a new vision, like we are trying to do with NAFTA." 19

So clearly, there is a move on toward a regional currency for North America, in conjunction with the formation of a North American Union. Monetary sovereignty, and especially the power to create and issue money, is perhaps more central to the idea of a free, democratic and sovereign nation than the right to vote. If we do not have the power over the issuance of money, it does not matter whom we vote for. It's the Golden Rule: he who has the gold, makes the rules. We, as Canadians, and other peoples of their respective nations should never relinquish this sovereignty over to regional boards, private banks, or other unaccountable individuals. It is our right, not a privilege, and giving up such a right is akin to giving up the right to vote; it is anathema to democracy and a free society.

1 Drake Bennett, The Amero Conspiracy. The Boston Globe: November 25, 2007:

http://www.boston.com/bostonglobe/ideas/articles/2007/11/25/
the_amero conspiracy/?page=4

2 Herbert Grubel, Fix the Loonie. The Financial Post: January 18, 2008:

http://www.nationalpost.com/opinion/story.html?id=245165


3 Fraser Institute, Senior Fellows. Found at: http://www.fraserinstitute.org/aboutus/whoweare/staff/seniorfellows.htm

4 Marci McDonald, The Man Behind Stephen Harper. Walrus Magazine: October, 2004:

http://www.walrusmagazine.com/articles/
the-man-behind-stephen-harper -tom-flanagan/

5 Fraser Institute, Senior Fellows. Found at: http://www.fraserinstitute.org/aboutus/whoweare/staff/seniorfellows.htm

6 Herbert Grubel, The Case for the Amero. The Fraser Institute: September 1, 1999:

http://www.fraserinstitute.org/Commerce.Web/publication_details.aspx

?pubID=2512

7 Herbert Grubel, The Case for the Amero. The Fraser Institute: September 1, 1999,

Page 4:

http://www.fraserinstitute.org/Commerce.Web/
publication_details.aspx?pubID =2512

8 Grubel, Ibid, Page 17

9 Grubel, Ibid, Page 17

10 Council on Foreign Relations, Building a North American Community. Independent Task Force on the Future of North America: May, 2005, Page vii: http://www.cfr.org/publication/8102/

11 Council on Foreign Relations, Building a North American Community. Independent Task Force on the Future of North America: May, 2005, Pages 42-48. http://www.cfr.org/publication/8102/

12 C.D. Howe Institute, Board of Directors. Found at: http://www.cdhowe.org/display.cfm?page=board

13 Thomas Courchene and Richard Harris, From Fixing to Monetary Union: Options for North American Currency Integration. C.D. Howe Institute, June 1999:

http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999

14 Thomas Courchene and Richard Harris, From Fixing to Monetary Union: Options for North American Currency Integration. C.D. Howe Institute, June 1999, Page 22:

http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999

15 Thomas Courchene and Richard Harris, From Fixing to Monetary Union: Options for North American Currency Integration. C.D. Howe Institute, June 1999, Page 23:

http://www.cdhowe.org/display.cfm?page=research-fiscal&year=1999

16 Barrie McKenna, Dodge Says Single Currency 'Possible'. The Globe and Mail: May 21, 2007

17 Consider a Continental Currency, Jarislowsky Says. The Globe and Mail: November 23, 2007:
http://www.theglobeandmail.com/servlet/story/LAC.20071123.
RDOLLAR23/TPStory/?query=%22Steven%2BChase%22b

18 C.D. Howe Institute, Board of Directors. Found at: http://www.cdhowe.org/display.cfm?page=board

19 CNN, CNN Larry King Live. Transcripts: October 8, 2007: http://transcripts.cnn.com/TRANSCRIPTS/0710/08/lkl.01.html

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Recent Ascot Advisory, Great Read

Our January 20, 2008 Newsletter Edition

IN THE NEWS:

YOU HAVE EVERY RIGHT TO A SECOND PASSPORT
By Bob Bauman - January 8, 2008
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In all the news media ballyhoo before the Iowa caucuses and the New Hampshire primary, a disturbing, indeed radical proposal by Republican presidential candidate (and Iowa winner), Mike Huckabee, seems to have slipped by unnoticed. Huckabee claims to be for less government and more freedom, but his proposal is no less than Big Brother in action. The former Arkansas governor wants to impose a federal law that would deny American citizens the right to hold dual citizenship. Never mind the fact that the U.S. Supreme Court upheld this right in several cases decades ago. Huckabee actually claims he wants to make it a crime for a potential estimate of 40 million Americans, who now have a right to dual citizenship, even to use a foreign passport for travel or business purposes.
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In 1967, the U.S. Supreme Court upheld the right of U.S. citizens to hold a second, foreign passport in the case of Afroyim v. Rusk, 387 U.S. 253 (1967). Prior to this ruling, the official U.S. stance was that a person acquiring second nationality automatically lost U.S. citizenship. Since the 1967 ruling, the government must presume a U.S. citizen does not wish to surrender citizenship. The U.S. government has the burden of proof to show intentional abandonment of U.S. citizenship. This presumption is also set forth in a U.S. Department of State publication, Advice About Possible Loss of U.S. Citizenship and Dual Nationality, (1990). As a matter of policy, the U.S. Government now recognizes dual nationality but does not encourage it because of what the federal bureaucracy views as problems and conflicts that may result.
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http://www.sovereignsociety.com/offshore2423.html
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EDITORS NOTES: There still seems to be a large number of US citizens who are under the impression that dual citizenship is illegal, but this is not true, at least at the moment. Which is to say, one can speculate that as Americans possibly continue to expatriate at the rates they have been in the past (and take their money with them, which we tend to believe is the real concern), the politicians of course may certainly look to change things going forward as they become alarmed over the exodus. Heck, they might just enact some draconian measures for merely thinking about it (see below).
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THINKING FOR YOURSELF IS NOW A CRIME
By Paul Craig Roberts - January 4, 2008
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What was the greatest failure of 2007? President Bush's surge in Iraq? The decline in the value of the US dollar? Sub-prime mortgages? No. The greatest failure of 2007 was the newly sworn in Democratic Congress.
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On October 23, 2007, the House passed a bill sponsored by California Democratic congresswoman Jane Harman, chairwoman of a Homeland Security subcommittee, that overturns the constitutionally guaranteed rights to free expression, association, and assembly. The bill passed the House on a vote of 404-6. In the Senate the bill is sponsored by Maine Republican Susan Collins and apparently faces no meaningful opposition. Harman's bill is called the Violent Radicalization and Homegrown Terrorism Prevention Act. When HR 1955 becomes law, it will create a commission tasked with identifying extremist people, groups, and ideas. The commission will hold hearings around the country, taking testimony and compiling a list of dangerous people and beliefs. The bill will, in short, create massive terrorism in the United States. But the perpetrators of terrorism will not be Muslim terrorists; they will be government agents and fellow citizens.
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We are beginning to see who will be the inmates of the detention centers being built in the US by Halliburton under government contract. Who will be on the extremist beliefs list? The answer is: civil libertarians, critics of Israel, 9/11 skeptics, critics of the administration's wars and foreign policies, critics of the administration's use of kidnapping, rendition, torture and violation of the Geneva Conventions, and critics of the administration's spying on Americans. Anyone in the way of a powerful interest group--such as environmentalists opposing politically connected developers--is also a candidate for the list.
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http://www.counterpunch.org/roberts01042008.html
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BILL A THREAT TO CIVIL LIBERTIES - By Mike Hoeflich - January 2, 2008
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As the media daily reports government abuses of individual civil and constitutional rights in the name of the war against terrorism, and as the now Democratic-controlled Congress continues to hold public hearings on the worst of these abuses, a new threat to the civil liberties of Americans quietly wends its way through the halls of Congress. On April 19, 2007, Rep. Jane Harmon, Democrat of California, introduced H.R. 1955 onto the floor of the House of Representatives. On Oct. 24, 2007, this bill, named the Violent Radicalization and Homegrown Terrorism Prevention Act of 2007 was passed by a bipartisan majority by the House. Its Senate counterpart, S.1959, introduced by Sen. Susan Collins, Republican of Maine, is now in committee awaiting action. While it is good to see that Congress is still capable of bipartisan activity, one might have hoped that this cooperation would not have extended to this bill.
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H.R. 1955 and S. 1959 are designed to establish a new National Commission on the Prevention of Violent Radicalization and Ideologically Based Violence. This commission is given broad powers to investigate homegrown terrorism, ideologically based violence, and violent radicalization anywhere in the United States. The definitions provided for these activities are frighteningly broad and include both violence against individuals and property as well as coming quite close to creating what some in the media have referred to as thought crimes.
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http://www2.ljworld.com/news/2008/jan/02/bill_threat_civil_liberties/
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EDITORS NOTES: Why is this new legislation necessary and how many Americans are even aware of it? Just when you think they have already gone to the extreme in terms of abolishing civil liberties, they come up with something else.
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According to Mr. Marty Luster, commenting on this same new legislation in a January 9 article from the Ithaca Journal: The bill also raises the specter of government-imposed restrictions of access to Internet-provided information and greater surveillance of Internet users. Among its legislative findings is this: The Internet has aided in facilitating violent radicalization, ideologically based violence, and the homegrown terrorism process in the United States by providing access to broad and constant streams of terrorist-related propaganda to United States citizens (end of quote).
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The US Congresswoman, Ms. Jane Harman (D-Calif.), who sponsored this, is quoted as declaring back on Nov. 7, that the new National Commission to be set up will propose to both Congress and the secretary of homeland security, initiatives to intercede before radicalized individuals turn violent. Intercede based upon what? What someone may opine in a newspaper article, on-line bulletin board or blog? And what exactly does intercede mean? I thought Joe McCarthy was dead and buried? It was a nice country, once upon a time. Rather, it was a free country, once upon a time.
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Why is this so alarming and who cares? Well, for starters, the Internet indeed has become the last bastion of the interdependent media, plus free and unfettered thought (we can't have that, now can we?). Some of it good, stimulating, thoughtful and provocative. Some of it, rude, unpleasant and dare I say, politically incorrect. However, if you believe in a free society, then you believe in everyone's right to express an opinion regardless of however with all your might you may disagree. Also, in a modern society with hopefully educated citizenry, people can quickly make up their own minds what they wish to read, and agree with (or are we all that stupid, that we cannot think for ourselves anymore?).
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Democracy does not function in a vacuum, whereby the only ideas or information presented are solely of government origin. Also, there are hidden or undeclared outcomes, like termites you never see, that eventually tumble your house down. Calamity Jane (my new moniker for Rep. Jane Harman) will have you believe that access to information and ideas poses a grave and present danger. Funny how that is exactly what the totalitarian government in China believes also. The Chinese have become more like the US in terms of free market capitalism, and it would seem the US government is trying to become more like the Chinese in terms of government spying and censorship. I am not sure where this is all going, but I for one, would not interpret this as being a positive.
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On a similar note, a client sent in the following news item to us regarding even more invasion of privacy as it pertains to electronic communications (email, telephone). The article dated January 14, 2008 says: National Intelligence Director Mike McConnell is drawing up plans for cyberspace spying that would make the current debate on warrant-less wiretaps look like a walk in the park, according to an interview published in the New Yorker's print edition today. Ed Giorgio, who is working with McConnell on the plan, said that would mean giving the government the authority to examine the content of any e-mail, file transfer or Web search. The infrastructure to tap into Americans' email and web search history may already be in place. In November, a former technician at AT&T alleged that the telecom forwarded virtually all of its Internet traffic into a secret room to facilitate government spying. Whistleblower Mark Klein said that a copy of all Internet traffic passing over AT&T lines was copied into a locked room at the company's San Francisco office -- to which only employees with National Security Agency clearance had access -- via a cable splitting device.
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http://rawstory.com/news/2007/US_drafting_plan_to_allow_government_0114.html
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STANDING FOR OUR PRINCIPLES EVEN WHERE WE'RE TERRIFIED
By Leonard Pitts Jr. - January 6, 2008
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The authorities would just come into your home, grab your mother, your brother, your dad, and take them away. No warning, no warrant, no appeal. Thirty thousand people were disappeared that way, she told me. This was in an interview three years ago, and Ruth Cox was describing her childhood in Argentina under military dictatorship. Cox, a teacher in Charleston, S.C., said families never learned what happened to their loved ones. Or why. People were taken and that was it. The government was not accountable.
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My first response was a vague pride that those kinds of things can't happen here. My second response was to realize that my first response was naive. These last years have provided a jolting education in the sorts of things that can, indeed, happen here. Mass surveillance, detention without access to courts, no right to confront, or even know, the evidence against you, torture. And a government that is not accountable. And here, a line from a Bruce Springsteen song seems apropos. The flag flying over the courthouse means certain things are set in stone. Who we are, and what we'll do and what we won't. Sadly, the list of what we won't do has narrowed dramatically since 2001.
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http://seattletimes.nwsource.com/html/opinion/2004108070_pitts06.html
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CIVIL LIBERTIES UNDER THREAT IN MAJOR WESTERN COUNTRIES
January 1, 2008
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As the new year took hold, an international rights group said individual privacy was under threat in the United States and across the European Union, where surveillance and information-gathering measures had been increasing in an effort to secure and control borders. Privacy International, which surveyed 47 countries, said Greece, Romania and Canada had the best privacy records the surveyed countries, while Malaysia, Russia and China were ranked worst. The London based organization said both Britain and the United States fell into the lowest-performing group.
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http://story.malaysiasun.com/
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GASTARBEITER AND CRIME - January 9, 2008
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In politically correct Germany, even pointing out facts can be controversial, as Roland Koch discovered. We have too many foreign juvenile criminals, the governor of the state of Hesse told the daily Bild recently. He called for tougher punishments, including deportation. Mr. Koch's straight talk prompted his political opponents to accuse him of xenophobia -- a charge that stings in a country still haunted by its Nazi past. Mr. Koch, a Christian Democrat, is in a tough re-election race when voters in his state go to the polls on January 27. His Social Democrat opponents claim he is just trying to attract the bigot vote. Whatever his motives, the statistics back up Mr. Koch. In Berlin, for example, one recent study shows that 70% of repeat offenders are foreigners or children of immigrants. As in much of Europe, Germany is struggling to integrate its immigrants, especially Muslims, who constitute roughly 25% of the immigrant population.
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http://online.wsj.com/article/
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EDITORS NOTES: Make no mistake about it. One of the major problems facing Europe is the rash of immigrants who are placing pressures on the social welfare systems, and in some cases, contributing to the crime situation as well. This is not to say all immigrants are criminals, and the same can be said of Latin American or other immigrants in the United States as well. Meaning, many immigrants are hard working and law abiding people. However, the crime and welfare statistics do not lie. In Paris, it has been calculated that up to 40 percent of the Muslim immigrant population living there (both first and second generation immigrants) are bleeding the welfare system dry. Again, not a negative commentary about immigration per say or any particular group, but rather a comment regarding a state welfare apparatus that allows for the newly arrived to game the system. Can you blame them? Who would not want to move from a developing country whereby they might have been surviving on a few dollars a day in the past, to find that the new country allows for a mere pulse and signature alone to qualify for a government check representing a substantial increase in cash flow (from what they had before) or free housing, free medical care, etc. ? It's a good deal, but the problem is, can these countries continue to afford it?
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Someone is paying for all this, and we can surmise it is the honest, legally employed middle class doing so. The point is, both in terms of Europe and North-America, how much longer can this go on? With dramatically large numbers of so-called baby boomers coming into retirement and placing financial strains on the government payment schemes on both sides of the Atlantic, can these welfare states continue economically in this fashion? Many of our European and American clients have cited these concerns as one of the reasons that they are relocating, and we have to believe this will only continue (and get worse as a financial pressure point).
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BUSINESS IN 2008: A YEAR FOR THE BRAVE AND WEALTHY
By John Gapper - December 26, 2007
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Eleven years ago, Alan Greenspan, then chairman of the Federal Reserve, mused: How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? The answer was we do not; we only discover afterwards. But we do know when exuberance has turned to fear and that is the mood in which many businesses enter 2008.
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As this new year approaches, the US has had a perilous few months in markets and the rest of the world is realizing how bad the contagion could be. The UK is feeling the effects of the Northern Rock debacle and there are fears of both a housing market crash and a falling currency. The European Central Bank is still pouring liquidity into financial markets. Only the Middle East and Asia motor smoothly onwards, if anything faster. All of this brings varying degrees of uncertainty and worry to business leaders for 2008, depending on which industries and countries they are in. The common theme is that the landscape is more treacherous than a year ago. It could also be a year in which the brave and deep-pocketed thrive at others expense.
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http://www.ft.com/
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EDITORS NOTES: I take issue with the comment that: the brave and deep-pocketed thrive at others expense. After all, is it really true that the man (or woman) that did not live off of credit cards, foolishly use their home as an ATM, or otherwise got themselves into a negative financial situation can be said to have done so at the expense of someone else? We think not, and if anything, such persons probably denied themselves a newly leased BMW or some other such indulgence in the process of keeping their own personal finances in the black. However, this sort of thinking that the solvent is culpable, is what we are concerned about. Which is to say, an attack on the non-broke (or brave, to use the above journalists terminology) to remedy the issues of others who participated in so-called irrational exuberance. Once again, not a case of mean spiritedness or cold heartedness, but rather what is fair and honest. Should the pious person that gave up the new BMW and instead stayed put with the ten year old Toyota now be forced to suffer via higher taxation, inflation, or any other so-called remedies? The result is that some segment of the population is economically punished for sound behavior. Watch out for this theme of class warfare going forward as politicians possibly look to placate the foolish by plundering the so-called brave (and also as they look for more revenue to pay for the mess they have made).
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If history is any guide, we will now see in 2008, a repeat of the old political slogan: We Are All in This Together (misery loves company). Indeed we now see political hacks trying to figure out a way to legislate their way out of recession (as it would seem Ben Bernanke cannot do it alone - surprised?) by coming up with so-called financial stimulus money (and the call is for political bipartisanship, in other words, we are all in this together). Who is going to pay for this? They have already put the US government US$9 Trillion Dollars in debt and already continue to spend more money than they take in (in terms of tax revenues). Now they want to send out government checks with money they do not have? How much trouble are they in really, and who is going to pay? Will they try to borrow even more money from the Chinese or Arabs?
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Recessions are all part of the natural business cycle in a free market capitalistic economy. No one likes it, and it is not pleasant. But, it is sort of like a good spring cleaning when things go out of joint, and it signals a necessary change in behavior by business and consumers. Sort of like when your body all of a sudden develops a fever, it is a signal that you have an infection (and you should probably go see a doctor, or start taking care of your self). However, if you take fever reduction medication without finding out why you have an infection (so you can cure the problem instead of just masking the symptoms) then you are asking for more trouble later on, in terms of your health. So it is with economic policies as well.
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OUTLOOK WORST SINCE DOTCOM BUST
By Chris Giles and Delphine Strauss - January 2, 2008
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Britain this year faces the most difficult economic conditions since the Dot-com bubble burst, according to the Financial Times annual survey of leading economists. It shows deepening pessimism about the impact of the global credit squeeze. The survey of 55 top economists shows confidence has tumbled from a year ago. The experts also fear that compared with 2001-02, the scope for financial authorities to mitigate any downturn is far more limited. Nearly nine in 10 think public finances are not in good order so there is no leeway for discretionary tax cuts or increases in public expenditure. The third most-mentioned risk to the economy is inflation, limiting the ability of the Bank of England to cut interest rates. Nearly two-thirds of the economists - from the City, academia and including five former members of the monetary policy committee - thought house prices would fall this year (2008)
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http://www.ft.com/
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EDITORS NOTES: This is right about the time that the cheeky fellow who wrote the previous article in the Financial Times of early December (chastising the Americans for their foolish behavior, financially speaking) needs to take out his handkerchief (to wipe the egg off his face). Also from the article: Inflation is seen as a threat, but a majority hope the Bank of England will turn a blind eye to short-term inflationary risks and cut interest rates, since they believe that the slowdown will curb these pressures (end of quote). Say what? A majority of people want the Bank of England to let inflation run wild because they think it will solve the problem? Very surprising stuff coming from a country that was the birth place of some of the worlds leading economists over the last century.
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TOP ECONOMIST SAYS AMERICA COULD PLUNGE INTO RECESSION
By Suzy Jagger- December 31, 2007
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Losses arising from America's housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world's leading economists has told The Times. Robert Shiller, Professor of Economics at Yale University, predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years.
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http://business.timesonline.co.uk/tol/business/economics/article3111659.ece
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EDITORS NOTES: Could plunge, or already is in a recession? In a article by Greg Robb titled: January 5, 2008Economists Say 2008 Will Be A Year To Forget:
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Dean Baker, co-director of the Center for Economic and Policy Research says that The recession is likely to be a serious one, and he estimated losses in prime mortgages will be two to three times the $160-$200 billion hit seen in the sub-prime sector. This, he said, will lead to large losses at banks and difficulty for Fannie Mae and Freddie Mac. Alistair Milne, a professor at the City University of London's Cass Business School, says that the economy won't likely get back on track until 2010 and will require more capital from overseas.
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http://www.marketwatch.com/news/story/economists-say-2008-year-forget/
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EDITORS NOTES: Well, one very interesting thing is to take note of where all the bail-out money is coming from (note the quote from the above article that says: will require more capital from overseas). Why is it exactly that the money has to come from overseas? Is the US broke?
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Merrill Lynch recently reported cash infusions to the tune of about US$7 Billion, Citibank writes off US$18 Billion worth of bad debt - and the rescue money all coming from Singapore, Kuwait and Saudi Arabia (and not US entities). Nothing wrong with it, just an interesting thing to see and how this may affect politics, etc. Which is to say, instead of spying on US citizens, maybe the answer is to pressure the Saudi's to stop funding religious schools that preach hatred and the like. But wait, we cannot offend them, as we need their money to bail out the bankrupt banks and brokerage firms. Never mind. Hey, maybe the US can get an emergency loan from the IMF (if they can qualify via stipulated reforms and higher taxes).
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UNEMPLOYMENT SOUNDS WARNING ABOUT ECONOMY
By Peter S. Goodman and Michael M. Grynbaum - January 5, 2008
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The unemployment rate surged to 5 percent in December as the economy added a meager 18,000 jobs, the smallest monthly increase in four years, the Labor Department reported on Friday. Economists viewed the report as the most powerful indication to date that the United States could well be falling into a recessionary downturn. Evidence of widening unemployment heightened anticipation that the Federal Reserve would further cut interest rates this month, perhaps by an unusually large half a percentage point, in a bid to prevent the economy from sliding into the muck. The swift deterioration in the job market resonated as a warning sign that troubles once confined to real estate and construction are spilling into the broader economy, threatening the ability of American consumers to keep spending with customary abandon.
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http://www.nytimes.com/2008/01/05/business/05econ.html
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EDITORS NOTES: Well, it's not all bad. Recent statistics suggest that the new jobs are in the service industry, with health care leading (about 30 to 40 percent) followed by waitresses and bartenders (21 to 29 percent). So, if you can juggle a few bottles of Heineken on a platter or change a bedpan with lightning speed, you might be alright.
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PREPARE FOR A GLOBAL ECONOMIC DOWNURN BUT NOT A DISASTER
By Wolfgang Munchau - January 1, 2008
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North America remains the global economy's hub. Any assessment of the world economy in 2008 depends on the likelihood, depth and length of a US economic downturn and the magnitude of a global spillover. Any forecast is thus contingent on how we answer the following three questions. Will the financial crisis continue in 2008? Will inflation expectations rise further? Last, will there be a disorderly process of global rebalancing? If we answer all three questions with Yes, we should prepare for a global depression. If the answer is No, the world economy will have another good year. There are many intermediate scenarios as well. I would answer the first question with an unqualified Yes. The financial crisis will probably linger on for most of the year and may get worse before it gets better. This is not really a sub-prime or credit crisis, as it is frequently called. This is a banking crisis. Economic history has taught us time and again that banking crises do not simply go away.
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http://www.ft.com/
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EDITORS NOTES: Well the gentleman starts off well enough with the headline ending on a positive note, but then he goes to say: If we answer all three questions with Yes, we should prepare for a global depression. In which case he adds: I would answer the first question with an unqualified Yes. He also comments that: The housing markets in the US and several other economies are headed for a severe downturn. The second risk is inflation for two reasons. First, persistent high inflation could destabilize global government bond markets, a rare pillar of stability in an uncertain financial environment. Second, high inflation places constraints on monetary policy. This in turn could make the downturn harder and longer, and the banking crisis more severe. The problem for central banks is not the rise in headline inflation rates, but the rise in inflationary expectations (end of quote).
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Where do expectations comes from, if not from experience? In addition, is it true that central banks should not be concerned with the actual inflation they created? Whatever these people are smoking, I think I want some (must be good stuff). Regardless, we do agree with one thing, and that is, this housing mess is going to take years to work itself out. However, as long as these dingbats keep printing the money, or allowing cheap money to circulate by keeping the interest rates artificially low (which has the same effect) then who in their right mind would NOT have expectations for higher inflation? Where is Paul Volker when you need him?
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$100 OIL WILL HURT AT MORE THAN THE PUMP
By Brett Clanton - January 6, 2008 - Houston Chronicle
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From light bulbs to golf balls, items tied to petroleum may cost you extra. U.S. consumers are likely to feel the sting of $100 oil soon, and in perhaps more ways than they realize. More directly ominous for consumers, AAA reported Friday that the average price for a gallon of regular gasoline nationwide was $3.07, up from $2.32 a year ago. In Houston, the average price at the end of the week was $2.92, up from $2.18 last January. Higher gasoline prices likely will pinch consumers most as bigger crude costs are passed through to drivers, analysts said. Fuel costs also could push up airfares. But if oil prices stay up, Americans also may see higher prices for a host of other petroleum-derived products, from light bulbs and paint to golf balls and deodorant.
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http://www.chron.com/disp/story.mpl/front/5431391.html
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EDITORS NOTES: We surmise that the American Oil companies are trying to keep a lid on retail gasoline price increases temporarily, that is, in consideration of the current US Presidential election. With that said, they may have no choice but to bump up prices sometime in the second quarter, but regardless, with oil at US$90 or above, the retail price at the pump probably should be somewhere about US$7 per gallon. A January 6 article from the Courier Post (New Jersey) reported that: Between June and December, increased costs for fuel and food, due, in part to higher shipping expenses, drained a combined $45 billion in discretionary income from American households. Inflation is confiscation by stealth, it always has been, and always will be.
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DOUBLE OR NOTHING: TRADERS BET ON OIL REACHING $US200 A BARREL BY YEAR'S END. By Grant Smith - January 8, 2008
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The fastest-growing bet in the oil market these days is that the price of crude will double to $US200 a barrel by the end of the year. Options to buy oil for $US200 on the New York Mercantile Exchange rose 10-fold in the past two months to 5533 contracts, a record increase on any similar period. The contracts, the cheapest way to speculate in energy markets, have appreciated 36 per cent since early December, with crude oil futures reaching a record $US100.09 on January 3.
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While analysts at Merrill Lynch and UBS say the slowing US economy will lead to the biggest drop in prices since 2001, the options show some traders expect oil to rise for a seventh consecutive year. Demand will increase 2.5 per cent this year, the International Energy Agency (IEA) says. US oil inventories fell to a three-year low on December 28. Production from Mexico is declining and Saudi Arabia is behind schedule in opening its newest field.
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One hundred dollars a barrel is actually 14.9 cents a cup, so we're still talking about oil being remarkably cheap, said Matthew Simmons, the chairman of Simmons & Co International, an investment bank that focuses on energy. Inventories are tight as a drum and I don't see how we get out of this box, he said in an interview on Bloomberg television last week. Demand clearly isn't starting to slow down. World consumption will rise to 87.8 million barrels a day this year, 2.1 million more than last year, or about the amount that Nigeria supplies, says the IEA, which advises oil-consuming nations. Demand from China alone will rise 5.7 per cent to 8 million barrels a day as imports expand to support an economy that is likely to grow 11 per cent.
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http://business.smh.com.au/
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CITY RETIREMENT VILLAGE DOUBLES SENIORS FEES
By Alexandra Zabjek, The Edmonton Journal - January 5, 2008
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Life at a pioneering resort-style retirement community has turned into a financial disaster for dozens of seniors at a local condominium complex. Residents of the upscale Touchmark at Wedgewood, at 184th Street and Lessard Road in southwest Edmonton, were notified last week that their living expenses would jump as much as 100 per cent or more in the coming months. The cost increases have shocked and outraged many at the facility.
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The mental and emotional stress cannot be discounted, said Inese Clark, whose 92-year-old mother has lived at Touchmark since December 2006. People do budget planning and estate planning, they extrapolate the amount of money they have and say, Can I manage this even with reasonable increases? she said. Then a year later, to receive a 100-per-cent increase? That puts enormous hardship on people. More than 100 people -- many using canes, walkers, scooters and oxygen tanks -- attended a meeting Friday morning at Touchmark. However, it was the sons, daughters, nieces and nephews of residents who dominated the meeting with questions about the cost increases. One woman said her mother's expenses will rise 180 per cent. Another said her parents face a 225-per-cent increase. Another resident's living costs will go to $2,000 a month from about $1,000.
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http://www.canada.com/edmontonjournal/
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EDITORS NOTES: One of the top growth industries (if you want to call it that) in Mexico is nursing homes for elderly gringos. As cost of living, maintenance fees and the like escalate in the US and Canada, there is an outsourcing of sorts going on, regarding the aged heading south of the border and often enough, it is the children sending parents there as a cost effective alternative. However, there is a better way, although it involves expatriation just the same, but the result is that the family stays together and the children get to grow up with their grand-parents. In short, the idea involves the purchase of a 3,000 square foot home on a property in Ecuador, the Dominican Republic, or some similar locale, whereby you can have an entire household staff (cook, maid, chauffer, nanny) for what it costs to cover the monthly costs in these North-American based nursing homes. The kids live well for less, and the elderly parents are not alone in some institution located miles away. In summary, expatriating to another country is not about making a political statement, nor an act of treason. It is about economic survival, plain and simple.
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COST OF LIVING TO STRAIN AREA RESIDENTS
By Bonnie Pfister, Pittsburgh Tribune Review - January 1, 2008
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Everything's going up and up and up, except my salary, says Deborah Jomisko, who is trying to counter the rising cost of heating her Knoxville home. Soaring natural gas prices in the past two years have doubled the cost of heating her Knoxville home to $159 last month. Her 1970 Chevy Monte Carlo needs $2,000 worth of repairs, so she's relying on Port Authority buses, whose fares are about to go up. Jomisko said she lost her job as an optical technician when her boss closed his practice in March. Opportunities for a woman in her 50s have been scarce. Everything's going up and up and up, except my salary, said Jomisko, who worked through the holidays as a cashier at PPG Place ice rink. (Gasoline) is going up, and food is going up. Meat, milk, eggs; I'm buying the same things every week, but they're costing me more.
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http://www.pittsburghlive.com/x/pittsburghtrib/news/cityregion/s_545349.html
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COST OF LIVING IN SIOUX FALLS GOES UP - January 1, 2008
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With the new year, the cost of living in Sioux Falls is going up. Operating the city's utilities have become more expensive with the city's constant growth and higher fuel prices. Sioux Falls Public Works Director Mark Cotter says utility expenses for consumers will increase to just over a hundred dollars extra over the next year. Waste-water rates are going up by nearly 20%. In addition, the landfill-tipping fee is going up for the city by 22%. And if your electric bill is from the city, a 16% increase means you'll pay an extra $3.31 every month to keep your lights on.
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http://www.keloland.com/News/
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EDITORS NOTES: Ms. Anne Kates Smith has written a recent article for (personal finance magazine) whereby she reports that: Food and beverage prices are rising at a 4.4% annual rate. But Kiplingerdairy prices are up 13% (and 26% for a gallon of whole milk alone), thanks to price supports and brisk exports of powdered milk. Meanwhile, meat prices are up 6%, and bakery products are up 4.6% because corn is being converted into ethanol instead of animal feed, muffins and sweetener. We haven't seen an increase of this magnitude in grocery prices since 1990, says Bureau of Labor Statistics economist Patrick Jackman.
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Where is this all going? A severe skewing of incomes, with basically two tiers economically speaking. Meaning, some in the middle class are moving up, but a whole lot more are moving down. Couple that with increased tax collection (especially for social welfare programs, such as social security) and you can easily understand why those with a few dollars and common sense are heading for the exit sign. That in turn motivates politicians to try and stop people from leaving with their money (instead of trying to fix the reasons why people are leaving in the first place) and thus the vicious cycle ensues. Sort of like watching a movie whereby you already know the ending (because you read the book before they made it into a film).
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BUILDING BOOM FUELED BY DRUG MONEY
By Andrew Beatty - December 31, 2007
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The shiny skyscrapers that soar above Panama City's coast and loom over the small Central American capital give it a skyline more suited to an Asian powerhouse like Hong Kong or Singapore. While a sub-prime mortgage crisis batters the United States, construction has been booming in Panama. According to the most ambitious construction plans, Panama was to have been home to nine of Latin America's 10 tallest buildings by the end of the decade. But the lights are off in many of the luxury apartments, new buildings sit empty, and suspicion is growing that Panama's property boom may turn out to be a bubble built by speculators on South American drug money. Real estate agents say the large number of temporary residents in the country is the reason for the city's dim skyline at night. U.S. anti-drug officials say a more likely reason is that Colombian drug cartels use the real estate sector to launder money.
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Around 11,000 apartments are forecast to come on the market in Panama City before the end of the decade, according to estate agent Sam Taliaferro. More luxury apartments could be built in Panama over the next few years than the number built in Miami between 1995 and 2005. While Panama is a major shipping route and the canal is undergoing a $5 billion expansion, the country's economy remains small and few Panamanians say developers can justify the need for so many skyscrapers. The increasing numbers of Americans who retire in Panama head for the country's cooler mountain region, for instance. Even without the suspected drug money, real estate agents say speculators are creating a dangerous bubble that is pushing up rents throughout the country, where 40 per cent of the population lives on less than $2 a day, and could litter Panama City with half-finished, abandoned buildings.
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http://www.theglobeandmail.com/
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EDITORS NOTES: We call your attention to this news item for a few reasons, and NOT necessarily to agree with the Canadian journalist who wants to offer an explanation that Panama's growth in the real estate sector is from illicit funds (although if you want to be honest about it, Miami was certainly re-built on drug money in the 1980's and real estate always has been the number one venue for laundry operations, regardless of the location, and not the banking industry exclusively or necessarily).
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Which is to say, first off we wish to highlight our previous comments about speculation driving up the prices in some foreign real estate markets (as mentioned in our last newsletter) and to also call attention to whom the buyers are (foreigners). Local real estate agents in Panama stress that many of the residents are temporary or seasonal occupants (we can says speculators), where as US officials are of course quick to offer that vendors of unregistered recreational pharmaceuticals are to blame. Of course, that must be it. What else could it be? I mean, who in their right mind would want to invest or live in Panama other than those involved with the drug trade, right? Maybe, just maybe, it is not recreational pharmaceutical funds but rather all those Americans we told you about previously, who were playing Three Card Monty with home equity loans on their US real estate, who were speculating in real estate elsewhere. It seems to be a bit too timely or convenient that all of a sudden all this neatly corresponds with the sub-prime issues in the US. After all, I was always lead to believe that businesses involving drugs, prostitution and gambling were recession proof and uncorrelated to other things going on in the economy, but I could be wrong. Never the less, we do find the explanation to be a bit incredulous. However, assuming for just one moment that this comment about drug money is correct, once again we can revert back to our previous comments of the housing or building boom in these markets being funded with CASH. While there may very well be an excess of new buildings (and apartments by reasoning) we can at the same time predict NO credit crisis, mortgage crisis or rash of home foreclosures either. Cash is cash, regardless of where it comes from. It is borrowed money that always leads to problems.
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In any event, just to review the US real estate scenario for 2008, it is reported that in Santa Cruz County (California) foreclosures are up 250 percent and foreclosure sales, up 404 percent. In Monterey County, foreclosures are up 450 percent and foreclosure sales a whopping 916 percent. In San Benito County, foreclosures are up 300 percent. I wish these numbers were a mistake, but stuff like this you just couldn't make up no matter how vivid your imagination. Maybe that's all the fault of the drug peddlers too.

The SCAM of Diamonds

THE DIAMOND CONSPIRACY ...

SPELT ... D.E.B.E.E.R.S ...


Hello all ...

There's been a lot of publicity in the last few weeks about a movie called Blood Diamond with Leonardo DiCaprio and it has triggered much debate about the selling of diamonds to finance wars in Africa.

The film highlights the trade in these blood or 'conflict diamonds' in Sierra Leone to fund the civil war there in the late 1990s and there has been a similar situation in Angola, Liberia, and the Congo, formerly Zaire. The Ivory Coast was implicated in exporting these diamonds for Liberia and Sierra Leone.

But hold on a second here. All that glitters is not gold and all that sparkles is not rare and valuable. Not without gross manipulation, anyway. There is a lot more to know about the diamond trade and the 'blood' variety are only part of the story. I am not defending the sale of diamonds to finance war, for I do not defend war itself whatever the source of funding. But I keep hearing about the 'illegal' and 'illicit' trade in diamonds in the wake of this movie when virtually the entire diamond industry is a corrupt and contemptible con.

Massive marketing campaigns over many decades have sold the myth that diamonds are rare and therefore must be expensive. This is a lie. Diamonds are crystals of carbon and they can be found in great quantities all over the world. They are produced by heat and pressure some 1,200 miles below ground and they have been brought to the surface by volcanoes to be mined, most famously in Africa. But they are found in extinct volcanoes throughout Asia, America, Russia and Australia, and along riverbeds and shorelines are the 'alluvial diamonds', as they are called. Everywhere there is carbon there are diamonds.

The number one fact to know about them is that they are not rare and therefore should be a fraction of the cost that people and industry pay for them. They are so expensive, not because they are rare, but because one family, controlled by another family, manipulates the market on a scale, and through methods, that beggar belief. Well, unless you understand the mentality of those involved, that is. Then it's not even a surprise. As Edward Epstein, author of The Rise and Fall of Diamonds, said:

'What I learned was that the diamond business wasn't a business of extracting, as I originally expected, something of enormous value and then simply seeing how much of this object you could get out of the ground and selling it. That was what the business appeared to be when I started my venture.

'But their real business was restricting what came out of the ground, restricting what was discovered, restricting what got cut, restricting what actually found its way into the retail market and, at the same time, through movies, through advertising, through Hollywood, through the manipulation of perceptions, creating the idea that there was this enormous demand for these shiny little objects that they seemed to have in abundant supply.

'So I wound up on this voyage of discovery starting off with the idea that there was this object of great value, and it was just a question of how many could you get out, and I wound up discovering it was just the opposite.'

The family that controls and callously manipulates the diamond trade is called Oppenheimer and the family that controls them is called Rothschild. Their vehicle is the name synonymous with diamonds ... De Beers.

It all began in Kimberley, South Africa, in 1871 when a huge quantity of diamonds was found. Before that they had indeed been rare in the sense that comparatively few had been brought to market, mostly from India and Brazil. According to the records of the British East India Company, Jewish traders controlled virtually the entire world diamond traffic by the end of the eighteenth century. The Brazilian fields, however, were almost depleted of diamonds, and no more diamonds were coming out of India. But the find at Kimberly changed all that and the infamous Rothschild agent, Cecil Rhodes, seized the opportunity. His biggest coup was to pay £6,000 to a farmer called De Beer for his diamond-rich land and Rhodes set about bringing together all claim holders in the area into his company, which he called De Beers Consolidated Mines, formed in 1888. It was nothing short of a diamond cartel.

Then, in 1914, along came a German-born diamond dealer called Ernest Oppenheimer who discovered enormous qualities of diamonds in what was then called German South West Africa, now Namibia. It was the biggest diamond mine in history at that time and so abundant that black people were deployed with a tin can around their necks to simply go around on hands and knees and pick them up. Oppenheimer secured control of the land, but his report on the find was kept hidden from the public to keep secret the number of diamonds available. He called his company the Anglo American Corporation because of his investors in England (primarily the Rothschilds) and in America (the J.P. Morgan operation controlled by the Rothschilds).

In the 1920s Oppenheimer, supported by the Rothschilds, made his move on De Beers. He told them that if they did not make him chairman of the company he would flood the market with diamonds and crash the price. He became chairman in 1929 and the takeover of the global diamond trade was complete. It wasn't even truly a cartel because it was controlled by one family, the Oppenheimers, fronting for another, the Rothschilds. De Beers was owned by Anglo American and, through creative bookkeeping and management, Anglo American was owned by De Beers.

With diamonds so common throughout the world the entire trade is based on convincing people they are rare. To do this has involved indoctrination of the public, especially through television and Hollywood, and ensuring that the number of diamonds cut and available for sale is strictly limited. Marketing consultant Herbert Chao Gunther, said:

'Nobody's aware that diamonds and all the associations we have with diamonds is a product of a marketing strategy. It's completely invisible, transparent. If you measure it in terms of how all the myths associated with this advertising campaign have been deeply inculcated in people -- it's reached deeply into the popular imagination -- this is probably the most successful campaign in history.'

The Oppenheimers opened a Hollywood office that gave diamonds to film producers who would promote them in their movies. The aim was to associate diamonds as a token of true love and something that is given by the man as a surprise (so the woman is not in on the decision and chooses something else). Claudette Colbert and Merle Oberon were given special scenes to show off their De Beers diamonds and the film Diamonds Are Dangerous was retitled Adventure in Diamonds to suit the De Beers campaign. The song Diamonds Are a Girl's Best Friend, performed by Marilyn Monroe in the 1953 film Gentlemen Prefer Blondes, has been listed as the 12th most important movie song of all time. Jane Russell sang it in the same film and it has been endlessly performed by others since, including Nicole Kidman in Moulin Rouge in 2001.

The Oppenheimers also came to an arrangement with the British Royal Family to wear their diamonds at the expense of other gems and the whole marketing campaign peddled the blatant untruth that diamonds were rare and thus had to be expensive. Gifts to the already filthy rich Windsors included caskets embossed with coronets that contained a six-carat stone for Princess Elizabeth and a four-and-a-half-carat diamond for Princess Margaret.

Another De Beers marketing strategy was to say 'a diamond is forever' and should not be resold. This was designed to suppress the market in second hand diamonds to protect the price of the new ones. These guys don't miss a trick.

But selling the lie to the public is only one part of the Oppenheimer/De Beers strategy. They also have to stop the market being flooded with all the diamonds that really exist, in fact and potentially. This they have done coldly and ruthlessly. Fewer than 200 merchants are allowed to buy from De Beers. These are the so-called 'sightholders' who can hold and see the rough diamonds that De Beers is prepared to market from its headquarters at 17 Charterhouse Street in East London. Everyone else must buy from the sightholder.

Through this system De Beers controls how many diamonds are released for sale and this is vital to stop their scam collapsing. They distribute to the cutters what is in short supply on the market and horde what is abundant, a technique that fixes the price through supply and demand and keeps it artificially high. The sightholders can make requests for what they want, but De Beers decides if they get it. One of them, William Goldberg, said: 'I've been very angry and cussed a lot and been very upset, but that's - that's how the cookie crumbles. I have no - I have no options ...'

The Oppenheimers are constantly targeting new supplies of diamonds that they don't control and, big or small, their owners are bought out or threatened with consequences. Fouad Kamil, a former 'diamond detective' with the Anglo-American Corporation, said that competition did not suit his former employers. 'They wanted the whole plate for themselves', he said and this involved violence and intimidation against those operating outside the cartel:

'Diamonds going out of Sierra Leone and other African diamond markets were going to what Anglo American described as black markets, that is, Antwerp, Amsterdam, Germany, some parts of the United States and Israel. Now, these people were labelled black markets by Anglo American, but in their own countries, they were respectable diamond dealers.

'... those that had diamonds, I took them as prisoners. I interrogated them, got the information from them. I kept them as long as I wanted, week to week, some of them months, and released them when I wanted. There was beatings. There was punishments without food. We did everything we could to extort the information from them. There was a stage when no one dared to pass from there, diamonds or no diamonds. So to put it bluntly, we were a terrorist group. That's what it amounts to.'

Where 'alluvial diamonds' were being found washed up on riverbanks, De Beers sent out Oxford graduates into the jungle to buy them in the local currency, anything to stop them getting on the market. The Oppenheimers also secured their monopoly by doing deals with the colonial powers and, after 'independence', with the corrupt African leaders installed by the colonial powers. Those who were critical of the colonial mining system, like the Congo's first democratically elected leader, Patrice Lumumba, ended up dead in a coup backed by the CIA. The intelligence agency network connects with the transnational corporations like Anglo American and De Beers through the bloodline secret society nexus.

Others like Mobutu Sese Seko, the dictator when the Congo became Zaire, accrued immense riches after selling out his people to De Beers. A deal was struck by a De Beers middleman, an American called Maurice Tempelsman, as revealed in some declassified documents from the U.S. State Department. Tempelsman met with the State Department, the U.S. Embassy in Kinshasa, Mobutu and De Beers and what emerged was an exclusive contract for all Zaire's diamonds to be shipped to De Beers in London.

Mobutu and wife ...soul sellers

At least most of the coups, wars and slaughter in Africa have been manipulated by the Illuminati cartels to direct power and events for their own benefit and there is an endless supply of 'Mobutus' to help them in return for a substantial commission. On one occasion the secretary of Mobutu's wife was found at an airport to be carrying diamonds worth $6 million. Robert Mugabe in Zimbabwe is a perfect example today of the depth of sickness available for exploitation by these global corporations. Edward Epstein, author of The Rise and Fall of Diamonds, said of De Beers:

'Each time diamonds are found in an inconvenient place, they begin, the diamond cartel, through intermediaries, through law firms they hire, ways to think, how can we prevent these diamonds from reaching the market? And declaring something a national park, tying things up in litigation -- these are just the methods and there's an infinite number of different methods you could use, once you understand what the objective is. The objective is to prevent mines from being developed that are outside their control.'

According to Justice Department records, America's only diamond mine, at Murfreesboro in south west Arkansas, was closed after J.P. Morgan and Sir Ernest Oppenheimer from Anglo American/De Beers met with Sam Rayburn and other principals of the Arkansas Diamond Corporation. The mine has never reopened even though geological surveys showed it had great promise.

Even during the Second World War, the Oppenheimers would not release industrial diamonds for use in the American war effort until a deal was struck to ensure that De Beers controlled them at all times and they could not be sold when the conflict was over. Even then, it was later established that De Beers had overcharged the Americans for this supply while running an advertising campaign in the United States urging people to buy De Beer gems because they paid for the industrial diamonds that America needed to win the war. These characters simply have no shame.

But when it came to the Nazis there seemed to be no problem. They were being supplied with industrial diamonds 'smuggled' from an Oppenheimer-controlled mine in the Congo. One method was to load Belgian Red Cross parcels with the diamonds and send them to Nazi-occupied Belgium via Switzerland. The allies knew that without the Congo stones, Hitler would run out within eight months, but the Oppenheimers refused to do anything to stop this supply and a U.S. intelligence investigation into their actions was mysteriously terminated before its conclusion.

In the 1950s when diamonds were found in Siberia that threatened the cartel's control, De Beers could not directly do business with the Soviet Union. So they simply set up a separate operation owned by a U.K. merchant bank across the street from their offices and the Russian diamonds quietly found their way into the De Beers central selling system. Harry Oppenheimer's son-in-law was seen at the Bolshoi Ballet in Moscow when, given that he came from apartheid South Africa, he could not have had an entry visa. But all that stuff is for the people, not the elite.

A massive diamond find at the Ashton mine in Australia in 1979 was met with the usual Oppenheimer ruthlessness. They threatened to reduce diamond prices in the categories of stones the new mine would produce while at the same time the Oppenheimers bought stock in key Australian companies. Australian journalists were invited to South Africa, sponsored by De Beers, to promote the company and the pathetic Australian media began to support a De Beers takeover of the Ashton project. In the end, the cartel won and the Australian diamonds headed for the De Beers central selling system in London. Corporate Investigator Thomas Helsby said:

'The De Beers operation is essentially the control of the production of diamonds. They control the chain of supply of diamonds and that's the way in which they control the diamond market. If somebody were to try to go around the cartel, the concern that they would have to have is how long it would last, because of course, De Beers, in the past, has been very successful at bringing all the producers into the cartel.'

The Oppenheimers are so arrogant about their power and use such intimidation that when the U.S. Justice Department tried to serve an anti-trust notice on De Beers it took a long time to find a South African lawyer who would hand it over. When one eventually did a De Beers representative ripped the paper into shreds, stamped on it and then basically threw the guy out.

So the scandal of diamonds is far from confined to the 'blood diamonds' highlighted in the DiCaprio movie. In fact, keeping such diamonds off the market would suit the aims of the De Beers cartel in suppressing all sales that it doesn't control - unless, of course, it is making money out of them.

Down in Kimberley, the home of Harry Oppenheimer House, the main De Beers diamond sorting centre in southern Africa, some strange events were reported from around 2002. The diamond reserves in the area are supposed to be virtually worked out, but suddenly there was a renaissance. From a few carats a month, diggers began arriving with what was described as 'a small mine's production'. This made no sense and officials from the South African government diamond valuator (a company appointed by the government to value and monitor diamond exports) said they suspected that diamonds from countries to the north were being laundered through the small mining operations around Kimberley and sold through the De Beers sorting centre.

The conclusion is highly credible and if that is what has been going on the De Beers cartel would certainly know about it - but be sure they won't be telling anyone else.

Ten Reasons Why You Should Never Accept a Diamond Ring

1. You've Been Psychologically Conditioned To Want a Diamond
The diamond engagement ring is a 63-year-old invention of N.W. Ayer advertising agency. The De Beers diamond cartel contracted N.W. Ayer to create a demand for what are, essentially, useless hunks of rock.

2. Diamonds are Priced Well Above Their Value
The De Beers cartel has systematically held diamond prices at levels far greater than their abundance would generate under anything even remotely resembling perfect competition. All diamonds not already under its control are bought by the cartel, and then the De Beers cartel carefully managed world diamond supply in order to keep prices steadily high.

3. Diamonds Have No Resale or Investment Value
Any diamond that you buy or receive will indeed be yours forever: De Beers' advertising deliberately brain-washed women not to sell; the steady price is a tool to prevent speculation in diamonds; and no dealer will buy a diamond from you. You can only sell it at a diamond purchasing center or a pawn shop where you will receive a tiny fraction of its original "value."

4. Diamond Miners are Disproportionately Exposed to HIV/AIDS
Many diamond mining camps enforce all-male, no-family rules. Men contract HIV/AIDS from camp sex-workers, while women married to miners have no access to employment, no income outside of their husbands and no bargaining power for negotiating safe sex, and thus are at extremely high risk of contracting HIV.

5. Open-Pit Diamond Mines Pose Environmental Threats
Diamond mines are open pits where salts, heavy minerals, organisms, oil, and chemicals from mining equipment freely leach into ground-water, endangering people in nearby mining camps and villages, as well as downstream plants and animals.

6. Diamond Mine-Owners Violate Indigenous People's Rights
Diamond mines in Australia, Canada, India and many countries in Africa are situated on lands traditionally associated with indigenous peoples. Many of these communities have been displaced, while others remain, often at great cost to their health, livelihoods and traditional cultures.

7. Slave Laborers Cut and Polish Diamonds
More than one-half of the world's diamonds are processed in India where many of the cutters and polishers are bonded child laborers. Bonded children work to pay off the debts of their relatives, often unsuccessfully. When they reach adulthood their debt is passed on to their younger siblings or to their own children.

8. Conflict Diamonds Fund Civil Wars in Africa
There is no reliable way to insure that your diamond was not mined or stolen by government or rebel military forces in order to finance civil conflict. Conflict diamonds are traded either for guns or for cash to pay and feed soldiers.

9. Diamond Wars are Fought Using Child Warriors
Many diamond producing governments and rebel forces use children as soldiers, laborers in military camps, and sex slaves. Child soldiers are given drugs to overcome their fear and reluctance to participate in atrocities.

10. Small Arms Trade is Intimately Related to Diamond Smuggling
Illicit diamonds inflame the clandestine trade of small arms. There are 500 million small arms in the world today which are used to kill 500,000 people annually, the vast majority of whom are non-combatants.
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They want you to believe the TRUTH is irrelevant, while they hide, erase and cover up the evidence. But it´s evident, that somebody is hell-bent, on bringing forth a unified ONE WORLD GOVERMENT

This is from DAVID ICKE NEWSLETTER FEBRUARY 3RD 2007