- International Financial and economic aspects,
- Air Safety and,
- a video of Dr. Terry Jones at Dearborn Michigan (a public address).
As before topics intended for large screen overhead projection. The secretary elaborated on the first mentioned and shown in the Title (above) that numerous commentators would be questioned.
He said what we see can be compared with Australia. It was agreed to view the three as shown in the Title.
The two other proposed (Air Safety and Dr. T. Jones) were to be seen (and heard) at subsequent meetings.
People Power -- Part 1. Death of the Dollar
Introduced by Samah El-Shahat
1. Fall of the $US value 90% since 2003;
2. $US depreciates against European currencies;
3. OPEC wants Euros for its oil;
4. Q: How long will the US$ stand as an International Reserve currency(?)
Max Keiser (video production presenter), Paul Craig Roberts, Dr. Gerald Lyons and James Turk; all apparently recognised as creditable economists.
Following in Part 1. responses from the named to what is paraphrased, the intention is not to attribute any particular observation to any of the mentioned, only hoping that what's put down is true to intended meanings of the participants.
M. Keiser promotes notions on the "Death of the Dollar" the others seen and heard present supplementary elaboration. As a lead in a hospital scene, with MK asking staff where is the "sick dollar" -- ha, ha! Then the bilingual MK interviews a taxi driver in a taxi, presumed somewhere in the Third World what he thinks of the $US, the driver's answer was not gracious.
Then followed the "nitty gritty" provided by the protagonists;
(1) Trade deficits are caused by corporations going off-shore (either to import and/or manufacture), so what comes back is lost GDP to the nation importing and improved GDP of exporters.
(2) Coincidentally since 9/11 Americans have experienced a consumption craze, with government favouring consumers over savers.
(3) Foreign debt caused by billions of dollars -- " Two billion borrowed daily" -- being raise by US from foreigners; now this is not good for US labour (comment attributed to Dr. G. Lyons). Paul C. Roberts said "America living beyond its means".
(4) A continuation of this practice of borrowing can lead to loss of assets with loan default. Late in the presentation a Hans Reiker (also seen later) from nowhere, suggested the Feds. wanted to keep the (consumption) "party going" hoping austerity eventually would cause lenders to "flee".
(5) MK with the devaluation of the $US prices rise.
(6) Paul C. Roberts comments on the effect of cutting the value of the $US, this apparently causes a. Prices to rise AND b. By example he shows another effect: Vehicles brought from China become cheaper as a result this would distress the Chinese economy.
(6) Paul C. Roberts comments on the effect of cutting the value of the $US, this apparently causes a. Prices to rise AND b. By example he shows another effect: Vehicles brought from China become cheaper as a result this would distress the Chinese economy.
Part 2 -- Death of the Dollar
MK moves interest to the Middle East and potential for recession ... America. We were told due to the Vietnam War and its cost America moved off the gold standard in 1971 -- see (herein) later R. Turk explained this wasn't the first time.
There's ever increasing demand from China for Middle East oil, consequently its price has risen, whilst China was funding America's great amount of debt i.e., the $US losing its reserve currency standard. With the war in Iraq more petro. dollars -- presumed $US -- flooding into the Gulf region. From Hans Rediker again, flooding the Gulf with $US is causing inflation.
A question from MK, J. Turk's reply that Iraq revalued its currency as a result of the weak $US and inflation means imports cost less. Further J. Turk said that in future the oil producers are likely to accept a "basket of currencies".
Paul C. Roberts said Kuwait -- in keeping with the forgoing -- has reduced its holding of $US from 90% to 40% and has embarked on a policy of "diversification" of assets. MK by examples shows what happens between respective wealth funds:
If the Sovereign Wealth Fund U.S. is reduced this will advantage Sovereign Wealth Funds in oil producing regions. Once again J. Turk on the $US, when in the past the dollar assigned to what he termed "fiat grave yard" during the American War of Independence i.e. the "Continental" was created -- ref. Vietnam earlier -- and it was not backed by gold.
Paul C. Roberts claimed the U.S. has "blown it" with erosion of its standing in the World. MK and the World is shopping for a new reserve currency. Paul C. Roberts then compares what's happening "they did it to themselves" analogy with the demise of ancient Rome. S. El-Shahat closes this Al Jezeera program.
People Power -- Part 1. The Markets are Rigged
Samah El-Shahat opens the subject of the program with:
Pooled money of investors end-up in either Hedge Funds (intended for sophisticated investors -- unregulated) OR Mutual Funds (supposedly regulated to protect "small" investors).
Free markets are supposed to be fare in that nobody is to get advantage. But not so according to MK who questions whether markets are indeed rigged(?) His claim is the jargon of the markets, terms such as;
"cheque/check counting",
"bear rating",
"front running",
"back dating",
"wood pack trading",
"pump and dumping",
"wash sales",
"blank cheque/check IPOs",
"parking stock",
"painting the tape",
"market timing",
"plate trading",
"shearing",
"spring loading",
"bullet dodging" and
"Naked Trading"(sic);
are terms and stratagem used to defraud investors.
MK cites Amsterdam 1602 as the first stock market, by 1610 market insiders and manipulators started to work ways to gain advantage over others. He goes on to say by early last century fraudsters were so adapt at their activities they cause the Great Depression 1928/29.
As a result in America the Security Exchange Commission came into existence. Now over half a century later GARY GEREFFI's letter to the U.S. Senate punctuates MK's narration -- G. Gereffi credited with being an S.E.C. insider -- of the letter's content:
America facing the same condition as earlier due to market manipulation. It's the unregulated Hedge Funds that have "network" (edit. mean collude) that avoids scrutiny from S.E.C. and N.Y. Stock Exchange this according to J. Turk.
Hedge Funds are gigantic with something like $2 trillion (at that time) under management. A Robert Kirby at this juncture said U.S. regulators cannot control Hedge Funds, they are leveraged and if the funds go into trouble so will banks.
If you comprehend the colloquial "snake eyes" as used by MK, inferring fund managers cannot lose regardless of the way the market moves -- which comprises 50% of all trades. Also Hedge Funds allow institutions to off-load risk onto others prepared to take risk through brokering, thereby "sweeping (edit. potential consequence) under the carpet".
MK believes regulators and fund representatives are in "cahoots" and daily trade volumes distort the markets -- "little guys get hurt". He goes on to explain how Naked Short Selling works and why it's allowed. RK then questions who are involved in Naked Short Selling and the need for regulation.
JT states that N.S.S. originated in the 19th century, apparently with counterfeit paper as the holding of share certificate is not mandatory and it continues to that day, and why is it so?!?! Part 1. closed by S. El-Shahat.
Part 2. -- The Markets are Rigged
S. El-Shahat : "Markets are neither free nor fair with governments 'with their finger in the pie'".
MK Our attention turned to Mutual Funds and what's termed Late Trading, again small investors can be hurt. With this introduction more of G. Gereffi's letter to the U.S. Senate was text to screen.
Following the message conveyed by the letter, MK at a horse racing track somewhere, tried unsuccessfully to place a bet on a horse race that is over (Edit. No Late Trading there ...)
It's not only bankers and brokers but C.E.O.s of companies that are advantaged by backdating stock options, apparently this MK says "distorts the market".
JT Backdating of a stock that appreciates produces a profit that's "lock in". MK the amount of money involved as at 1996 $7.9 billion, now (over 10yrs later) possibly $100 billion due to backdating manipulation.
JT (Ans. to Q.) Granting options at a lower price disadvantages other investors in a company, their shares are "diluted". A public interest release from the F.B.I. has stated that corporation executives should not profit this way.
MK goes on to compare Soviet style Command and Control Economy to America's Capitalist (Edit. Controlled Eco.) More narration and text to screen from the letter to the Senate. MK during the years since to 2006 many executives have done "runners" to other jurisdictions,
"Apple" computer were caught up in this backdating option scam. Wall St. Journal noted that insiders after 9/11 were backdating options to then when the market was at a low point. He mentions the creation within the F.B.I. of "Plunge Protection Team".
Appears Catherine Austin Fitts to elaborate on the "P.P.T.". JT After 1987 market crash "The President's Group On Financial Markets" came into existence to bring order, but according to JT not so, to the contrary.
MK and "Long Term Capital Management" an initiative of the Federal Government, a fund managed by the best minds with $1 trillion at their disposal. Bailed out debts of private investors under President Clinton's occupation, but said MK government intervention of the kind in recent past was known as fascism.
JT On company failure: failures due to government intervention, this not conducive to market practice. CAF On General Motors suggested the P.P.T.(sic) not doing its duty, because at the time G.M. was not proifit rich and in a position to lead a market rally. [NB. P.P.T. i.e. Plunge Protection Team; Edit. Wasn't it for tracing/stopping market absconders?] RK suggests with the P.P.T. intervening in (all) markets, he questions "is this not central planning?" JT compares America's command monetary system with U.S.S.R.s command bureaucratic system, thus intervention not positive for free markets.
CAF (Edit. Here is when it becomes more confusing) "... we are watching a market where players have inside information because they are trading on behalf of the P.P.T.(sic) and they own the Central Bank, you are looking at the funds that are members of the N.Y. Feds ..." She said they control the currency and their position allows the making of money (edit. personally) legally and illegally?!?!
RK markets are manipulated and are neither free nor fair. The text of the Senate letter to screen with narration; [Edit. Gist of context: how those at the top know their friends and punish enemies.]. MK because of market manipulation, the P.P.T. all very corrupt, entrepreneurs become disenchanted and what comes of this "austere"(?) capitalism.
CAF advises not to put money into large but small ethical companies, move from the U.S. markets to more ethical opportunities elsewhere. MK here as earlier he used a gaming term and sums up: "little guy all risk, big guy all skill". S. El-Shahah closes the program with questioning of whether markets are free and fair, and should Hedge Funds be regulated(?)
People Power -- Part 1. Private Finance Initiatives
S. El-Shahat : Private Finance Initiatives (PFI) started during the government of John Major, understood to introduce efficiency that gov. couldn't match when it came to building infrastructure, money raised in the private sector and contractors remitted by gov. (public sector payment) annually.
MK governments throughout the World find it difficult to generate funding for infrastructure. Warwick Lightfoot, PFI the means whereby private sector raises money for gov. infrastructure and in turn gov. rents back the asset built. Lady (anony.) and the Unity Charge -- gov. guarantees payment by way of dividend (re. borrowings) plus a service charge and this has been known to go for 30yrs.
MK has something to say about private-public sector "swindle". WL apparently the Brit. gov. is well positioned to borrow but cost involved means competition between the two sectors in the Gilt Market. The private sector wins-out by enforced efficiencies and accountability. Lady (anony.) briefly talks how PFIs were introduced and who benefits.
MK because of 800 works then in progress estimated at £170 billion he seeks information from the Brit. Gov. Acct. Comm. Richard Bacon (Conservative MP -- Public Acct. Comm.) likens PFI advocates with Faith, zealots found in differing careers who promote the PFI concept as an alignment of gov. with the private sector. As comprehended, enormity of the scale of jobs "extraction 'of feit'" results [Edit. Self perpetuating and beyond bureaucratic control?!?!].
Lady (anony.) considers how a contract for work derives and is costed. Costs can escalate she says 3,4, and 5 times, then affordability comes a concern and infrastructure and services suffer -- private capital distorts what can be delivered, whilst big money is made by all involved. MK the first PFI project the Sky Bridge (somewhere in Brit.) eventually bought back by gov. because public complained toll charge loaded.
He then mentioned "refinancing" in relation to PFI companies. Lady (anony.) explained how venture capital works, after time risk disappears and financing of infrastructure management services and maintenance i.e. refinancing usually at lower interest rates commences.
RB public sector loses out with refinancing because contracts drawn-up exclude mention. Purposely omitted, creates "secret honey pot" beneficial to private sector.
Lady (anony.) both public and private sector participants are concealed from view due to commercial in-confidence and law/regulation.
Part 2. Private Finance Initiatives.
S. El-Shahat defines infrastructure and states private investors in PFI schemes bear an expense "rent" on borrowed money, but are paid a fee by the gov. for service and risk.
MK PFIs "a stupid way" of financing 800 projects.
WL gov. restricted by rules and regulations causing difficulty to obtain funding but not so for private initiative. In the early days few projects, reduced risk with John Major's guide-lines, then the Gordon Brown era 1997. Lady (anony.) with G. Brown's gov. contrary to general public expectation new legislation and continuation of PFI.
WL the gov. told by bureaucrats for new infrastructure it would have to be the "PFI route". MK "Not a level playing field" (Edit. public sector cannot compete) and PM Brown's attitude was to let the market decide.
Lady (anony.) goes into the process whereby projects are allocated, bidding for work where there's more than one bidder maybe competitive but can delay implementation and extra cost incurred. Even with "preferred" entity bid 2 to 3 yrs. to sign-off. RB Failure of Supply: costs involved in the 10's of millions multiplied by the number of bids these costs passed on to others afterwards, " .. big profits for bankers and consultants"
MK seeks comment from Public Acct. bureaucrat responsible for contract procurement -- introducing Edward Lee/Lea.
EL PFIs increase public investment i.e. capital investment, however he goes on to say this must be matched by current expenditure, examples furbishing, services and maintenance. From left field Geoff Martin on UCA Hospital (elaboration on foregoing) of how the PFI debt repayment disallowed partial occupation, risk caused by market forces (speculation and profit).
Lady (anony.) and Turn-around IT's, professionals with a brief to introduce efficiencies and cut costs. GM again cited Tunbridge Wells Hospital, the management overly occupied with financiers and speculators to the tune of £3.5 million, deaths caused because of lack of staff numbers.
MK then wanted info. from the Ministry of Health, it was not forthcoming. He then turned to asking why private financing compared to gov. bonds was a better option, Ans. Risk transfer!
WL doubts that "risk" is entirely transferable. MK on G. Brown's PFI 2003 upgrade of London's underground rail, two contracts awarded one to Metronet that went "bust" within 4 yrs. of 30 yr. cessation.
WL more on risk transfer, apparently there are other examples (not mentioned by WL), when the tax payers and gov. provided the cost short-fall. MK £ 2 billion pay out to investors due to Metronet failure. WL huge increases both to gov. expenditure and use of PFIs, cost exposure not necessarily in tax payers interest, and as with the underground (and Metronet) the instrument for financing has not stood the test of time.
RB to get things done, indicating public sector failure, the consequence that comes with PFI is profit maximisation. He indicates in hindsight long term contracts -- 30-35 yrs. -- changes do occur. MK suggests to RB a schism exists when it comes to gov. financing (long term) whilst private financing (short term);
RB answers gov. sector work should be financed via gilt-bonds, he says "the cheapest way", and good management selection. Program closes with MK questioning public cf. with private financing and S. El-Shahat asking the audience/viewers for opinion.
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