The Wall Street Bankster Blowing New Bubbles in the Commodity Markets.

It wasn't bad enough that the Wall Street Banksters caused the housing bubble and financial crash of 2008 that resulted in investors losing 14 trillion dollars and untold misery. Now they are working their criminal derivative schemes in food and fuel. If you are wondering why commodities are going through the roof and causing fuel and food prices to soar then read the following article. Right now gasoline is taking 9 percent of family budgets and the cost of food is on the rise as well. This is causing food riots already in the poorer countries along with political instability. Most people have no clue what is going on, all they know is they are running out of money trying to pay for fuel and food. But hey, what do the Wall Street Banksters care as long as they can make billions creating the commodity derivatives Ponzi scheme. This time there is a new hitch, the derivatives are long and double long only, no shorts allowed in this derivative scheme. Where do you think this is headed? Another train wreck, no it's worse than that, how about capitalistic suicide? 

Think about this, we are fighting three wars, which is costing hundreds of billions of dollars and thousands of lives. For what? Where is the real enemy?  In the fields of Afghanistan or in the buildings on Wall Street? Osama Ben Laden was just killed by the US and there was shouting in the street. But in the end who is really causing the more pain, suffering, death and destruction. The terrorists whose command and control is in the caves in Afghanistan and Pakistan carrying AK47's and RPG's or the Wall Street Banksters carrying their briefcases and IPHONES who engineer one financial disaster after another from their Wall Street Command and Control Centers? 

Are you reading about people in the US who are killing their families, their kids, their friends, their co-workers every week because they can't cope anymore due to the financial stress? According to a recent statistic 25 percent of people in the US have mental disorders. Why? Read the following and hopefully you will start to understand the magnitude of the problem. While the US Government has people living in fear and focused on fighting this war on terror, the real enemy is on Wall Street hard at work creating the next financial disaster as they line their pockets with billions in their latest terroristic Ponzi scheme. 

Victor

How Goldman Sachs Created the Food Crisis

Don't blame American appetites, rising oil prices, or genetically modified crops for rising food prices. Wall Street's at fault for the spiraling cost of food.

BY FREDERICK KAUFMAN | APRIL 27, 2011

Demand and supply certainly matter. But there's another reason why food across the world has become so expensive: Wall Street greed.

It took the brilliant minds of Goldman Sachs to realize the simple truth that nothing is more valuable than our daily bread. And where there's value, there's money to be made. In 1991, Goldman bankers, led by their prescient president Gary Cohn, came up with a new kind of investment product, a derivative that tracked 24 raw materials, from precious metals and energy to coffee, cocoa, cattle, corn, hogs, soy, and wheat. They weighted the investment value of each element, blended and commingled the parts into sums, then reduced what had been a complicated collection of real things into a mathematical formula that could be expressed as a single manifestation, to be known henceforth as the Goldman Sachs Commodity Index (GSCI).

For just under a decade, the GSCI remained a relatively static investment vehicle, as bankers remained more interested in risk and collateralized debt than in anything that could be literally sowed or reaped. Then, in 1999, the Commodities Futures Trading Commission deregulated futures markets. All of a sudden, bankers could take as large a position in grains as they liked, an opportunity that had, since the Great Depression, only been available to those who actually had something to do with the production of our food.

Change was coming to the great grain exchanges of Chicago, Minneapolis, and Kansas City -- which for 150 years had helped to moderate the peaks and valleys of global food prices. Farming may seem bucolic, but it is an inherently volatile industry, subject to the vicissitudes of weather, disease, and disaster. The grain futures trading system pioneered after the American Civil War by the founders of Archer Daniels Midland, General Mills, and Pillsbury helped to establish America as a financial juggernaut to rival and eventually surpass Europe. The grain markets also insulated American farmers and millers from the inherent risks of their profession. The basic idea was the "forward contract," an agreement between sellers and buyers of wheat for a reasonable bushel price -- even before that bushel had been grown. Not only did a grain "future" help to keep the price of a loaf of bread at the bakery -- or later, the supermarket -- stable, but the market allowed farmers to hedge against lean times, and to invest in their farms and businesses. The result: Over the course of the 20th century, the real price of wheat decreased (despite a hiccup or two, particularly during the 1970s inflationary spiral), spurring the development of American agribusiness. After World War II, the United States was routinely producing a grain surplus, which became an essential element of its Cold War political, economic, and humanitarian strategies -- not to mention the fact that American grain fed millions of hungry people across the world.

Futures markets traditionally included two kinds of players. On one side were the farmers, the millers, and the warehousemen, market players who have a real, physical stake in wheat. This group not only includes corn growers in Iowa or wheat farmers in Nebraska, but major multinational corporations like Pizza Hut, Kraft, Nestlé, Sara Lee, Tyson Foods, and McDonald's -- whose New York Stock Exchange shares rise and fall on their ability to bring food to peoples' car windows, doorsteps, and supermarket shelves at competitive prices. These market participants are called "bona fide" hedgers, because they actually need to buy and sell cereals.
On the other side is the speculator. The speculator neither produces nor consumes corn or soy or wheat, and wouldn't have a place to put the 20 tons of cereal he might buy at any given moment if ever it were delivered. Speculators make money through traditional market behavior, the arbitrage of buying low and selling high. And the physical stakeholders in grain futures have as a general rule welcomed traditional speculators to their market, for their endless stream of buy and sell orders gives the market its liquidity and provides bona fide hedgers a way to manage risk by allowing them to sell and buy just as they pleased.

But Goldman's index perverted the symmetry of this system. The structure of the GSCI paid no heed to the centuries-old buy-sell/sell-buy patterns. This newfangled derivative product was "long only," which meant the product was constructed to buy commodities, and only buy. At the bottom of this "long-only" strategy lay an intent to transform an investment in commodities (previously the purview of specialists) into something that looked a great deal like an investment in a stock --the kind of asset class wherein anyone could park their money and let it accrue for decades (along the lines of General Electric or Apple). Once the commodity market had been made to look more like the stock market, bankers could expect new influxes of ready cash. But the long-only strategy possessed a flaw, at least for those of us who eat. The GSCI did not include a mechanism to sell or "short" a commodity.

This imbalance undermined the innate structure of the commodities markets, requiring bankers to buy and keep buying -- no matter what the price. Every time the due date of a long-only commodity index futures contract neared, bankers were required to "roll" their multi-billion dollar backlog of buy orders over into the next futures contract, two or three months down the line. And since the deflationary impact of shorting a position simply wasn't part of the GSCI, professional grain traders could make a killing by anticipating the market fluctuations these "rolls" would inevitably cause. "I make a living off the dumb money," commodity trader Emil van Essen told Businessweek last year. Commodity traders employed by the banks that had created the commodity index funds in the first place rode the tides of profit.

Bankers recognized a good system when they saw it, and dozens of speculative non-physical hedgers followed Goldman's lead and joined the commodities index game, including Barclays, Deutsche Bank, Pimco, JP Morgan Chase, AIG, Bear Stearns, and Lehman Brothers, to name but a few purveyors of commodity index funds. The scene had been set for food inflation that would eventually catch unawares some of the largest milling, processing, and retailing corporations in the United States, and send shockwaves throughout the world.

The money tells the story. Since the bursting of the tech bubble in 2000, there has been a 50-fold increase in dollars invested in commodity index funds. To put the phenomenon in real terms: In 2003, the commodities futures market still totaled a sleepy $13 billion. But when the global financial crisis sent investors running scared in early 2008, and as dollars, pounds, and euros evaded investor confidence, commodities -- including food -- seemed like the last, best place for hedge, pension, and sovereign wealth funds to park their cash. "You had people who had no clue what commodities were all about suddenly buying commodities," an analyst from the United States Department of Agriculture told me. In the first 55 days of 2008, speculators poured $55 billion into commodity markets, and by July, $318 billion was roiling the markets. Food inflation has remained steady since.

The money flowed, and the bankers were ready with a sparkling new casino of food derivatives. Spearheaded by oil and gas prices (the dominant commodities of the index funds) the new investment products ignited the markets of all the other indexed commodities, which led to a problem familiar to those versed in the history of tulips, dot-coms, and cheap real estate: a food bubble. Hard red spring wheat, which usually trades in the $4 to $6 dollar range per 60-pound bushel, broke all previous records as the futures contract climbed into the teens and kept on going until it topped $25. And so, from 2005 to 2008, the worldwide price of food rose 80 percent -- and has kept rising. "It's unprecedented how much investment capital we've seen in commodity markets," Kendell Keith, president of the National Grain and Feed Association, told me. "There's no question there's been speculation." In a recently published briefing note, Olivier De Schutter, the U.N. Special Rapporteur on the Right to Food, concluded that in 2008 "a significant portion of the price spike was due to the emergence of a speculative bubble."

What was happening to the grain markets was not the result of "speculation" in the traditional sense of buying low and selling high. Today, along with the cumulative index, the Standard & Poors GSCI provides 219 distinct index "tickers," so investors can boot up their Bloomberg system and bet on everything from palladium to soybean oil, biofuels to feeder cattle. But the boom in new speculative opportunities in global grain, edible oil, and livestock markets has created a vicious cycle. The more the price of food commodities increases, the more money pours into the sector, and the higher prices rise. Indeed, from 2003 to 2008, the volume of index fund speculation increased by 1,900 percent. "What we are experiencing is a demand shock coming from a new category of participant in the commodities futures markets," hedge fund Michael Masterstestified before Congress in the midst of the 2008 food crisis.

The result of Wall Street's venture into grain and feed and livestock has been a shock to the global food production and delivery system. Not only does the world's food supply have to contend with constricted supply and increased demand for real grain, but investment bankers have engineered an artificial upward pull on the price of grain futures. The result: Imaginary wheat dominates the price of real wheat, as speculators (traditionally one-fifth of the market) now outnumber bona-fide hedgers four-to-one.

Today, bankers and traders sit at the top of the food chain -- the carnivores of the system, devouring everyone and everything below. Near the bottom toils the farmer. For him, the rising price of grain should have been a windfall, but speculation has also created spikes in everything the farmer must buy to grow his grain -- from seed to fertilizer to diesel fuel. At the very bottom lies the consumer. The average American, who spends roughly 8 to 12 percent of her weekly paycheck on food, did not immediately feel the crunch of rising costs. But for the roughly 2-billion people across the world who spend more than 50 percent of their income on food, the effects have been staggering: 250 million people joined the ranks of the hungry in 2008, bringing the total of the world's "food insecure" to a peak of 1 billion -- a number never seen before.

What's the solution? The last time I visited the Minneapolis Grain Exchange, I asked a handful of wheat brokers what would happen if the U.S. government simply outlawed long-only trading in food commodities for investment banks. Their reaction: laughter. One phone call to a bona-fide hedger like Cargill or Archer Daniels Midland and one secret swap of assets, and a bank's stake in the futures market is indistinguishable from that of an international wheat buyer. What if the government outlawed all long-only derivative products, I asked? Once again, laughter. Problem solved with another phone call, this time to a trading office in London or Hong Kong; the new food derivative markets have reached supranational proportions, beyond the reach of sovereign law.

Volatility in the food markets has also trashed what might have been a great opportunity for global cooperation. The higher the cost of corn, soy, rice, and wheat, the more the grain producing-nations of the world should cooperate in order to ensure that panicked (and generally poorer) grain-importing nations do not spark ever more dramatic contagions of food inflation and political upheaval. Instead, nervous countries have responded instead with me-first policies, from export bans to grain hoarding to neo-mercantilist land grabs in Africa. And efforts by concerned activists or international agencies to curb grain speculation have gone nowhere. All the while, the index funds continue to prosper, the bankers pocket the profits, and the world's poor teeter on the brink of starvation.

Here is a companion article that will even make you more disgusted!

Glencore: Profiteering from hunger and chaos

The world's largest commodities trader is issuing a stock sale, and critics say the firm causes spikes in food prices. Chris Arsenault May 9, 2011

Glencore controls more half the global copper market and almost ten per cent of the planet's wheat trade [Reuters] The rapid rise in prices for food, fuel and commodities has been disastrous for the world's poor, including Indonesian market vendor Lia Romi. But it's a bonanza for multinational trading firms such as Glencore. While Romi has trouble feeding her family, Glencore - the world's largest diversified commodities trader - is planning a US $11 billion share sale, likely the largest market debut ever seen on the London Stock Exchange. "The price for our daily food has at least doubled in the past two years," Lia Romi told Al Jazeera through a translator. "Food costs 100 per cent of my family's daily income [of about $3]. I have nothing saved and I owe [money] from my [market stall] business." While Romi, and millions like her, worry about feeding their families, the initial public offering from the commodity speculating giant will create at least four billionaires, dozens worth more than $100million and several hundred old fashioned millionaires. Chief Executive Ivan Glasenberg is set to make more than $9bn from the share sale. And speculating on food prices is an important part of his wealth. Controlling prices Valued at about $60billion, Glencore controls 50 per cent of the global copper market, 60 per cent of zinc, 38 per cent in alumina, 28 per cent of thermal coal, 45 per cent of lead and almost 10 per cent of the world's wheat - according to information the firm disclosed prior to its share sale. It also controls about one quarter of the world market in barley, sunflower and rape seed. "They are possibly one of very few mining companies that are price makers, rather than price takers," said Chris Hinde, editorial director of Mining Journal magazine. "They are the stockbrokers of the commodities business [operating] in a fairly secretive world. They are effectively setting the price for some very important commodities. The firm employs about 57,000 people, generated a turnover of $145billion in the past year and has assets worth more than $79billion. Glencore's media department refused our interview request. Lia Romi has had trouble feeding her family in Indonesia because of high food prices, which some analysts link to speculation [Credit: Oxfam] Based in Baar, Switzerland, where regulation is minimal, the company's sprawling interests span Bolivian tin mines, Angolan oil, zinc producers in Kazakhstan, Zambian copper mines and Russian wheat operations. "Glencore's vertical integration really is unprecedented," said Devlin Kuyek, a researcher with GRAIN, a non-profit international organisation working on food security. "Glencore owns almost 300,000 hectares of farm land and it is one of the largest farm operators in the world. They are engaging in speculation on the grain trade and have immense market power. Global food prices have climbed recently, returning close to their 2008 peak, when bread riots swept parts of the Middle East, Africa and the Caribbean.  "A disturbing amount of price increases, I fear, is being driven by speculative activity," Marcus Miller, a professor of international economics at the University of Warwick stated. "Bets [on future price rises or declines] can become self-fulfilling if you are big enough to affect the market." In March 2011, the World Bank's global food index was 36 per cent above levels from a year earlier, although prices for commodities have dropped in the past few weeks. Some analysts believe price increases have more to do with a growing global population and rising middle classes, particularly in India and China, who are eating more meat and thus driving up prices for corn and other animal feed. Duncan Green, the head of research at development organisation Oxfam Great Britain, said international markets for food and other commodities can be compared to the shape of a champagne glass. "There are a lot of people producing, and a lot of people consuming, but there is a pinch point in the middle, controlled by corporations who can walk away with the final value. "Many of the world's poor are -bizarrely - people growing food." In 2010, investment bank Goldman Sachs warned of "violent price spikes" in commodities markets, and that prediction has more or less come true. Knowledge and power To make money betting on food, metals and energy, Glencore – like other trading houses and hedge funds – relies on one crucial commodity: Information. "They have offices all over the world and unique access to information about production and distribution," said food security researcher Kuyek. "When the people who have that information are also the ones speculating, there is grave cause for concern; they can purchase forward contracts when they know prices are going up." Trading firms can capitalise on instability in world food markets [EPA] In August 2010, for example, Russia issued a ban on grain exports, after droughts ravaged crops. On August 3, the head of Glencore's Russian grain unit encouraged the government to halt exports. The government followed his advice on August 5, causing prices for cereals to rise 15 per cent in two days. "Days before the export ban went into place, Glencore made huge bets," said Kuyek. "They had some kind of information there; companies with information are in the best place to capture profits from volatility." Glencore, for its part, said it also lost money as a result of the ban, because it had to fulfill delivery obligations to clients outside Russia at the new, higher price. In addition to manipulating food prices – potentially with insider information - the trading giant appears to have broken laws on several continents. Prosecutors in Belgium charged Glencore employees with criminal conspiracy and corruption, alleging they illicitly sought confidential information on European export subsidies from a public official. The case will be heard in Brussels on May 12. Shady deals During Saddam Hussein's rule in Iraq, and the UN sanctions which accompanied its final years, Glencore made handsome profits marketing embargoed oil. In February 2001, Glencore bought 1million barrels of Iraqi crude oil destined for the US and diverted the black gold to Croatia, where it was sold for a premium of $3million, according to a UN Security Council report.  When the news broke, the Sunday Times newspaper in the UK headlined their investigation "Secretive Swiss trader links City to Iraq oil scam". Glencore's founder and lifelong commodities hustler Marc Rich was dubbed the "face of scandal", by Vanity Fair magazine. After founding the company in 1974, Rich rose to prominence by pioneering "combat trading" -aggressive deal making in countries facing turmoil. He traded oil for Ayatollahs when Iran was blacklisted by the US, did business with South Africa's apartheid government and skirted US trade embargoes on Cuba and Libya to make trades under the motto: Do whatever it takes. In Lia Romi's community, people have to choose between sending their kids to school and buying food               [Credit: Oxfam] "There will always be allegations that they [Glencore] are dealing with some unsavory folks," said Chris Hinde from Mining Journal magazine. "But I wouldn't say that makes them unusual for traders." Tony Hayward, the disgraced former BP CEO who presided over the worst oil spill in US history, has been approached by Glencore to become a non-executive director on the board of the company when it becomes public. While Rich sold the company in 1993, his take-no-prisoners approach to the commodities business lives on in today's traders and speculators, including the South African CEO Ivan Glasenberg, who gave Rich's trading empire the name Glencore. In a January interview with the Financial Times newspaper, his first in 20 years, Rich supported the share sale, although he acknowledged that it is "much more convenient" for a trader not to be a public company as mandatory disclosure and regulatory oversight "limits your activity". Perhaps, Glencore is going public to increase its size, allowing it to acquire large competitors, particularly the mining giant Xstrata. "They are so big now, that they cannot get any bigger unless they are listed," Hinde said, adding that some of the firm's 800 partners might want to take the company public with the hope of cashing out their millions over the next few years. Food insecurity Regardless of the firm's reasons, institutional investors from the US, East Asia and the Middle East have all committed to buying. Aabar, the sovereign wealth fund from the United Arab Emirates, controlled by Abu Dhabi's oil-rich monarchs, is expected to become the largest "cornerstone investor", pledging to buy about $1billion worth of stock. "It seems that they are buying a stake to strengthen the UAE's control over the global grain trade, for their own food security," said Kuyek. "In the absence of anything meaningful being done at the international level, - except for the same prescriptions of open markets and trade liberalisation." Food insecure countries in the Gulf, Northeast Asia, Korea and other regions are attempting to gain more direct control over food, as the market economy "can’t guarantee decent prices", he said. Back in her hut in Indonesia, on the front lines of the global food crisis, Lia Romi hasn't been following Glencore's stock flotation. She is worried about how to feed her three kids. "I've sacrificed several times not to buy books or clothes for my daughter and son, just for our daily food because I have no savings at all," she said. As Glencore's directors prepare to pocket their billions, it's unlikely that they will bet on Romi's future, as fluctuations in the global market could push her family over the edge. "Stability is to be prized," said Oxfam's David Green. And that is the last thing Glencore wants, as it's instability which is most profitable - for those who have the inside knowledge to exploit it.

Will We Learn from History or are we Doomed to Repeat the Past?

To all you seekers of truth.

I wrote this to a friend who I was exchanging emails with who stated this in one of his emails;

“I'm an optimist and do my best to believe in Obama whom I believe is sincere and human.  He's not perfect but I feel he is the best we've got and I pull for him.  All his decisions are under intense scrutiny as they should be -greed permeates all factions of life and it's disconcerting, but integrity and faith in the goodness of the human spirit must prevail or all will be lost.”

So I replied with the following and wanted to post it on my blog.

I know you have a great heart and are an Optimist and I respect that and it is commendable. I am neither an optimist or pessimist, I am a realist and I look at things the way they are and not the way I would like them to be. I also look to the past for guidance and insight into what the future might hold.

George Santayana stated the following in 1905:

"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it."  Winston Churchill is also credited with the variation: "Those that fail to learn from history, are doomed to repeat it" 

General Douglas MacArthur

Now let’s just take a look at what has happen in the past, which is governed by the following reality:

Dionysius, the ancient thinker, twenty centuries ago uttered these words: It is a law of nature, common to all mankind, which time shall neither annul nor destroy, that those that have greater strength and power shall bear rule over those who have less."

You have to look at things not through the lens of optimism or pessimism, but through the lens of realism. I could wax on and on about such realism and the truth I suspect would not penetrate the force field of optimism that comfortably surrounds you. So let me post the words of one of the truly great leaders of the past, a great visionary and one of the greatest military leaders in history, see if his realism can penetrate the walls of optimism that surround you.

Who is this person, it's General Douglas MacArthur. Now MacArthur's tenure as Army Chief of Staff ran from 1930 to 1935 and it was surely was one of the most trying times in his life. Despite his vigorous efforts, the tides of economic depression and isolationism proved overwhelming and under his stewardship the American armed forces reached all-time lows in strength. And as MacArthur repeatedly warned to anyone who would listen, allowing this to happen while autocratic, expansive regimes in Germany, Italy and Japan were gaining strength was doubly dangerous.

The following speech, delivered less than two months before the end of his tenure as Chief and at the time just prior to the rise of Adolf Hitler, was given at the annual reunion of MacArthur's Rainbow Division in Washington on July 14, 1935. The speech if filled with Prophetic wisdom that we will do well to listen and look at it as a small light that shines in a dark world. 

Now keep in mind this was before World War 11, the Korean War, Vietnam War, the Killing of 50 million Russians and Chinese by the communist regime that came after World War 11, the carnage in Africa, the Iraqi War and Afghanistan War that is still going on. So with this historical past to reflect upon can we garner anything from what the future might have in store?  Don't you think it would be wise to listen to words of wisdom from the past in the hopes of avoiding repeating the same mistake in the future? Read the following and try to turn off your force field of optimism and see if, for a brief moment, you can look at things through the eyes of history and learn the lessons it has to offer you. Wisdom and realism should be the treasure we seek from the following speech. I doubt there is anyone in America, or possibly the world today, that would have the spirit of the ages who could even come close to penning a speech like this today. So here it is, I hope you enjoy it, but more importantly I hope you get something out of it that will help you in the future and come to the understanding and knowledge of the truth.

“Mr. President and gentlemen of the Rainbow Division, I thank you for the warmth of your greeting. It moves me deeply. It was with you I lived my greatest moments. It is of you I have my greatest memories.

It was seventeen years ago -- those days of old have vanished, tone and tint; they have gone glimmering through the dreams of things that were. Their memory is a land where flowers of wondrous beauty and varied colors spring, watered by tears and coaxed and caressed into fuller bloom by the smiles of yesterday. Refrains no longer rise and fall from that land of used-to-be. We listen vainly, but with thirsty ear, for the witching melodies of days that are gone. Ghosts in olive drab and sky blue and German gray pass before our eyes; voices that have stolen away in the echoes from the battlefields no more ring out. The faint, far whisper of forgotten songs no longer floats through the air. Youth, strength, aspirations, struggles, triumphs, despairs, wide winds sweeping, beacons flashing across uncharted depths, movements, vividness, radiance, shadows, faint bugles sounding reveille, far drums beating, the long roll, the crash of guns, the rattle of musketry -- the still white crosses!

And tonight we are met to remember.

The shadows are lengthening. The division's birthdays are multiplying; we are growing old together. But the story which we commemorate helps us to grow old gracefully. That story is known to all of you. It needs no profuse panegyrics. It is the story of the American soldier of the World War. My estimate of him was formed on the battlefield many years ago and has never changed. I regarded him then, as I regard him now, as one of the world's greatest figures -- not only in the era which witnessed his achievements but for all eyes and for all time. I regarded him as not only one of the greatest military figures but also as one of the most stainless; his name and fame are the birthright of every American citizen.

The world's estimate of him will be founded not upon any one battle or even series of battles; indeed, it is not upon the greatest fields of combat or the bloodiest that the recollections of future ages are riveted. The vast theaters of Asiatic conflict are already forgotten today. The slaughtered myriads of Genghis Khan lie in undistinguished graves. Hardly a pilgrim visits the scenes where on the fields of Chalons and Tours the destinies of civilization and Christendom were fixed by the skill of Aetius and the valor of Charles Martel.

The time indeed may come when the memory of the fields of Champagne and Picardy, of Verdun and the Argonne shall be dimmed by the obscurity of revolving years and recollected only as a shadow of ancient days.

But even then the enduring fortitude, the patriotic selfabnegation, and the unsurpassed military genius of the American soldier of the World War will stand forth in undimmed luster; in his youth and strength, his love and loyalty, he gave all that mortality can give. He needs no eulogy from me or from any other man; he has written his own history, and written it in red on his enemy's breast. But when I think of his patience under adversity, of his courage under fire, and of his modesty in victory I am filled with an emotion I cannot express. He belongs to history as furnishing one of the greatest examples of successful and disinterested patriotism. He belongs to posterity as the instructor of future generations in the principles of liberty and right. He belongs to the present -- to us -- by his glory, by his virtues, and by his achievements.

The memorials of character wrought by him can never be dimmed. He needs no statues or monuments; he has stamped himself in blazing flames upon the souls of his countrymen; he has carved his own statue in the hearts of his people; he has built his own monument in the memory of his compatriots.

The military code which he perpetuates has come down to us from even before the age of knighthood and chivalry. It embraces the highest moral laws and will stand the test of any ethics or philosophies ever promulgated for the uplift of mankind. Its requirements are for the things that are right, and its restraints are from the things that are wrong. Its observance will uplift everyone who comes under its influence. The soldier, above all other men, is required to perform the highest act of religious teaching -- sacrifice. In battle and in the face of danger and death he discloses those divine attributes which his Maker gave when He created man in his own image. No physical courage and no brute instincts can take the place of the divine annunciation and spiritual uplift which will alone sustain him. However horrible the incidents of war may be, the soldier who is called upon to offer and to give his life for his country is the noblest development of mankind.

On such an occasion as this my thoughts go back to those men who went with us to their last charge. In memory's eye I can see them now -- forming, grimly for the attack, blue-lipped, covered with sludge and mud, chilled by the wind and rain of the foxhole, driving home to their objective and to the judgment seat of God. I do not know the dignity of their birth, but I do know the glory of their death. They died unquestioning, uncomplaining, with faith in their hearts and on their lips the hope that we would go on to victory.

Never again for them staggering columns, bending under soggy packs, on many a weary march from dripping dusk to drizzling dawn. Never again will they trudge ankle-deep through the mud on shell-shocked roads. Never again will they stop cursing their luck long enough to whistle through chapped lips a few bars as some clear voice raised the lilt of "Madelon." Never again ghostly trenches, with their maze of tunnels, drifts, pits, dugouts -- never again, gentlemen unafraid.

They have gone beyond the mists that blind us here and become part of that beautiful thing we call the Spirit of the Unknown Soldier. In chambered temples of silence the dust of their dauntless valor sleeps, waiting. Waiting in the chancery of Heaven the final reckoning of Judgment Day: "Only those are fit to live who are not afraid to die."

Our country is rich and resourceful, populous and progressive, courageous to the full extent of propriety. It insists upon respect for its rights, and likewise gives full recognition to the rights of all others. It stands for peace, honesty, fairness, and friendship in its intercourse with foreign nations.

It has become a strong, influential, and leading factor in world affairs. It is destined to be even greater if our people are sufficiently wise to improve their manifold opportunities. If we are industrious, economical, absolutely fair in our treatment of each other, strictly loyal to our government we, the people, may expect to be prosperous and to remain secure in the enjoyment of all those benefits which this privileged land affords.

But so long as humanity is more or less governed by motives not in accord with the spirit of Christianity our country may be involved by those who believe they are more powerful. Whatever the ostensible reason advanced may be -- envy, cupidity, fancied wrong, or other unworthy impulse may direct them.

Every nation that has what is valuable is obligated to be prepared to defend against brutal attack or unjust effort to seize and appropriate. Even though a man be not inclined to guard his own interests, common decency requires him to furnish reasonable oversight and care to others who are weak and helpless. As a rule, they who preach by word or deed "peace at any price" are not possessed of anything worth having, and are oblivious to the interest of others including their own dependents.

The Lord Almighty, merciful and all-wise, does not absolutely protect those who unreasonably fail to contribute to their own safety, but He does help those who, to the limit of their understanding and ability, help themselves. This, my friends, is fundamental theology.

On looking back through the history of English-speaking people, it will be found in every instance that the most sacred principles of free government have been acquired, protected, and perpetuated through the embodied, armed strength of the peoples concerned. From Magna Charta to the present day there is little in our institutions worth having or worth perpetuating that has not been achieved for us by armed men. Trade, wealth, literature, and refinement cannot defend a state -- pacific habits do not insure peace nor immunity from national insult and national aggression.

Every nation that would preserve its tranquility, its riches, its independence, and its self-respect must keep alive its martial ardor and be at all times prepared to defend itself.

The United States is a pre-eminently Christian and conservative nation. It is far less militaristic than most nations. It is not especially open to the charge of imperialism. Yet one would fancy that Americans were the most brutally blood-thirsty people in the world to judge by the frantic efforts that are being made to disarm them both physically and morally. The public opinion of the United States is being submerged by a deluge of organizations whose activities to prevent war would be understandable were they distributed in some degree among the armed nations of Europe and Asia. The effect of all this unabashed and unsound propaganda is not so much to convert America to a holy horror of war as it is to confuse the public mind and lead to muddled thinking in international affairs.

A few intelligent groups who are vainly trying to present the true facts to the world are overwhelmed by the sentimentalist, the emotionalist, the alarmist, who merely befog the real issue, which is not the biological necessity of war but the biological character of war.

The springs of human conflict cannot be eradicated through institutions but only through the reform of the individual human being. And that is a task which has baffled the highest theologians for 2,000 years and more.

I often wonder how the future historian in the calmness of his study will analyze the civilization of the century recently closed. It was ushered in by the end of the Napoleonic Wars which devastated half of Europe. Then followed the Mexican War, and the American Civil War, the Crimean War, the Austro-Prussian War, the Franco-Prussian War, the Boer War, the Opium Wars of England and China, the Spanish-American War, the Russo-Japanese War, and finally, the World War -- which, for ferocity and magnitude of losses, is unequaled in the history of humanity.

If he compares this record of human slaughter with the thirteenth century, when civilization was just emerging from the Dark Ages, when literature had its Dante; art, its Michelangelo and Gothic architecture; education, the establishment of the famous colleges and technical schools of Europe; medicine, the organization of hospital systems; politics and the foundation of Anglo-Saxon liberty, the Magna Charta -- the verdict cannot be that wars have been on the wane.

In the last 3,400 years only 268 -- less than 1 in 13 -- have been free from wars. No wonder that Plato, the wisest of all men, once exclaimed, "Only the dead have seen the end of war!" Every reasonable man knows that war is cruel and destructive. Yet, our civilization is such that a very little of the fever of war is sufficient to melt its veneer of kindliness. We all dream of the day when human conduct will be governed by the Decalogue and the Sermon on the Mount. But as yet it is only a dream. No one desires peace as much as the soldier, for he must pay the greatest penalty in war. Our Army is maintained solely for the preservation of peace -- or for the restoration of peace after it has been lost by statesmen or by others.

Dionysius, the ancient thinker, twenty centuries ago uttered these words: It is a law of nature, common to all mankind, which time shall neither annul nor destroy, that those that have greater strength and power shall bear rule over those who have less."

Unpleasant as this may be to hear, disagreeable as they may be to contemplate the history of the world bears ample testimony to their truth and wisdom. When looking over the past, or when looking over the world in its present form, there is but one trend of events to be discerned -- a constant change of tribes, clans, nations; the stronger ones replacing the others, the more vigorous ones pushing aside, absorbing covering with oblivion the weak and the worn-out.

From the dawn of history to the present day it has always been the militant aggressor taking the place of the unprepared. Where are the empires of old? Where is Egypt, once a state on a high plane of civilization, where a form of socialism prevailed and where the distribution of wealth was regulated? Her high organization did not protect her. Where are the empires of the East and the empires of the West which once were the shrines of wealth wisdom, and culture? Where are Babylon, Persia, Carthage. Rome, Byzantium? They all fell, never to rise again, annihilated at the hands of a more warlike and aggressive people: their cultures memories, their cities ruins.

Where are Peru and old Mexico? A handful of bold and crafty invaders, destroyed them, and with them their institutions, their independence their nationality, and their civilization.

And saddest of all, the downfall of Christian Byzantium. When Constantinople fell, that center of learning, pleasure, and wealth -- and all the weakness and corruption that goes with it -- a pall fell over Asia and southeastern Europe which has never been lifted. Wars have been fought these nearly five centuries that have had for at least one of their goals the bringing back under the Cross of that part of the world lost to a wild horde of a few thousand adventurers on horseback whom hunger and the unkind climate of their steppes forced to seek more fertile regions.

The thousand years of existence of the Byzantine Empire, its size, its religion, the wealth of its capital city were but added incentives and inducements to an impecunious conqueror. For wealth is no protection against aggression. It is no more an augury of military and defensive strength in a nation than it is an indication of health in an individual. Success in war depends upon men, not money. No nation has ever been subdued for lack of it. Indeed, nothing is more insolent or provocative or more apt to lead to a breach of the peace than undefended riches among armed men.

And each nation swept away was submerged by force of arms. Once each was strong and militant. Each rose by military prowess. Each fell through degeneracy of military capacity because of unpreparedness. The battlefield was the bed upon which they were born into this world, and the battlefield became the couch on which their worn-out bodies finally expired. Let us be prepared, lest we, too, perish.”

Are America's Best Days Behind Us?

An Insightful Article by Fareed Zakaria.

For those that have a vision and some insight you realize that we are living at the point in time of the Fall of the American Empire. Could it be stopped and turned around sure, just like the fall of the Roman Empire could have been turned around if the ruling elite would have taken the necessary steps to do it. They didn’t and Rome fell. The same is true today and I’m afraid the same fate is in store for the American Empire and Mr. Zakaria’s clarity on this in his following article is extremely enlightening.

If the politicians would read Mr. Zakaria's article and take it to heart and say look, we have to stop this madness and get America back on track and actually take the courageous actions that are necessary, then we could have a chance to save the empire. However, they will no more take that to heart than they took the Grace Commission report and the recent Simpson-Bowles commission report to heart. They say that during the time the Roman Empire fell they had just discovered lead and the ruling elite had cooking utensils, plate ware and goblets out of it and they all got lead poisoning and died. I think we all can agree that there is an insanity in Washington that is causing the ruling elite to run the country into the ground and run up trillions of dollars in debt in the process. 

Rest assured the fall will be a big one and will cause pain and suffering that no one has ever seen or experienced and it will make the great depression look like days of untold prosperity. In the process the dollar will be destroyed and the country will go through what we all see happening in the Middle East. It won’t be a pretty site. To get through this you will need more survival skills than knowing how to use a can opener and microwave. You have some time, but not much, so start preparing yourself now for the Fall of the American Empire. 

Are America's Best Days Behind Us?

By Fareed Zakaria Thursday, Mar. 03, 2011

I am an American, not by accident of birth but by choice. I voted with my feet and became an American because I love this country and think it is exceptional. But when I look at the world today and the strong winds of technological change and global competition, it makes me nervous. Perhaps most unsettling is the fact that while these forces gather strength, Americans seem unable to grasp the magnitude of the challenges that face us. Despite the hyped talk of China's rise, most Americans operate on the assumption that the U.S. is still No. 1.

But is it? Yes, the U.S. remains the world's largest economy, and we have the largest military by far, the most dynamic technology companies and a highly entrepreneurial climate. But these are snapshots of where we are right now. The decisions that created today's growth — decisions about education, infrastructure and the like — were made decades ago. What we see today is an American economy that has boomed because of policies and developments of the 1950s and '60s: the interstate-highway system, massive funding for science and technology, a public-education system that was the envy of the world and generous immigration policies. Look at some underlying measures today, and you will wonder about the future

The following rankings come from various lists, but they all tell the same story. According to the Organisation for Economic Co-operation and Development (OECD), our 15-year-olds rank 17th in the world in science and 25th in math. We rank 12th among developed countries in college graduation (down from No. 1 for decades). We come in 79th in elementary-school enrollment. Our infrastructure is ranked 23rd in the world, well behind that of every other major advanced economy. American health numbers are stunning for a rich country: based on studies by the OECD and the World Health Organization, we're 27th in life expectancy, 18th in diabetes and first in obesity. Only a few decades ago, the U.S. stood tall in such rankings. No more. There are some areas in which we are still clearly No. 1, but they're not ones we usually brag about. We have the most guns. We have the most crime among rich countries. And, of course, we have by far the largest amount of debt in the world.

The Rise of the Rest

Many of these changes have taken place not because of America's missteps but because other countries are now playing the same game we are — and playing to win. There is a familiar refrain offered when these concerns are raised: "We heard all this in the 1980s. Japan was going to dominate the globe. It didn't happen, and America ended up back on top." It's a fair point as far as it goes. Japan did not manage to become the world's richest country — though for three decades it had the second largest economy and even now has the third largest. It is also a relatively small country. To become the largest economy in the world, it would have to have a per capita GDP twice that of the U.S. China would need to have an average income only one-fourth that of the U.S. to develop an economy that would surpass ours.

But this misses the broader point. The Harvard historian Niall Ferguson, who has just written a book, Civilization: The West and the Rest, puts things in historical context: "For 500 years the West patented six killer applications that set it apart. The first to download them was Japan. Over the last century, one Asian country after another has downloaded these killer apps — competition, modern science, the rule of law and private property rights, modern medicine, the consumer society and the work ethic. Those six things are the secret sauce of Western civilization."

To this historical challenge from nations that have figured out how the West won, add a technological revolution. It is now possible to produce more goods and services with fewer and fewer people, to shift work almost anywhere in the world and to do all this at warp speed. That is the world the U.S. now faces. Yet the country seems unready for the kind of radical adaptation it needs. The changes we are currently debating amount to rearranging the deck chairs on the Titanic.

Sure, the political system seems to be engaged in big debates about the budget, pensions and the nation's future. But this is mostly a sideshow. The battles in state capitals over public-employee pensions are real — the states are required to balance their budgets — but the larger discussion in Washington is about everything except what's important. The debate between Democrats and Republicans on the budget excludes the largest drivers of the long-term deficit — Social Security, Medicaid and Medicare — to say nothing of the biggest nonentitlement costs, like the tax break for interest on mortgages. Only four months ago, the Simpson-Bowles commission presented a series of highly intelligent solutions to our fiscal problems, proposing $4 trillion in savings, mostly through cuts in programs but also through some tax increases. They have been forgotten by both parties, in particular the Republicans, whose leading budgetary spokesman, Paul Ryan, praises the commission in the abstract even though he voted against its recommendations. Democrats, for their part, became apoplectic about a proposal to raise the retirement age for Social Security by one year — in 2050.

Instead, Washington is likely to make across-the-board cuts in discretionary spending, where there is much less money and considerably less waste. President Obama's efforts to preserve and even increase resources for core programs appear to be failing in a Congress determined to demonstrate its clout. But reducing funds for things like education, scientific research, air-traffic control, NASA, infrastructure and alternative energy will not produce much in savings, and it will hurt the economy's long-term growth. It would happen at the very moment that countries from Germany to South Korea to China are making large investments in education, science, technology and infrastructure. We are cutting investments and subsidizing consumption — exactly the opposite of what are the main drivers of economic growth.

So why are we tackling our economic problems in a manner that is shortsighted and wrong-footed? Because it is politically easy. The key to understanding the moves by both parties is that, for the most part, they are targeting programs that have neither a wide base of support nor influential interest groups behind them. (And that's precisely why they're not where the money is. The American political system is actually quite efficient. It distributes the big bucks to popular programs and powerful special interests.) And neither side will even talk about tax increases, though it is impossible to achieve long-term fiscal stability without them. Certain taxes — such as ones on carbon or gas — would have huge benefits beyond revenue, like energy efficiency.

It's not that our democracy doesn't work; it's that it works only too well. American politics is now hyperresponsive to constituents' interests. And all those interests are dedicated to preserving the past rather than investing for the future. There are no lobbying groups for the next generation of industries, only for those companies that are here now with cash to spend. There are no special-interest groups for our children's economic well-being, only for people who get government benefits right now. The whole system is geared to preserve current subsidies, tax breaks and loopholes. That is why the federal government spends $4 on elderly people for every $1 it spends on those under 18. And when the time comes to make cuts, guess whose programs are first on the chopping board. That is a terrible sign of a society's priorities and outlook.

The Perils of Success

Why have our priorities become so mangled? Several decades ago, economist Mancur Olson wrote a book called The Rise and Decline of Nations. He was prompted by what he thought was a strange paradox after World War II. Britain, having won the war, slipped into deep stagnation, while Germany, the loser, grew powerfully year after year. Britain's fall was even more perplexing considering that it was the creator of the Industrial Revolution and was the world's original economic superpower.

Olson concluded that, paradoxically, it was success that hurt Britain, while failure helped Germany. British society grew comfortable, complacent and rigid, and its economic and political arrangements became ever more elaborate and costly, focused on distribution rather than growth. Labor unions, the welfare state, protectionist policies and massive borrowing all shielded Britain from the new international competition. The system became sclerotic, and over time, the economic engine of the world turned creaky and sluggish.

Germany, by contrast, was almost entirely destroyed by World War II. That gave it a chance not just to rebuild its physical infrastructure but also to revise its antiquated arrangements and institutions — the political system, the guilds, the economy — with a more modern frame of mind. Defeat made it possible to question everything and rebuild from scratch.

America's success has made it sclerotic. We have sat on top of the world for almost a century, and our repeated economic, political and military victories have made us quite sure that we are destined to be No. 1 forever. We have some advantages. Size matters: when crises come, they do not overwhelm a country as big as the U.S. When the financial crisis hit nations such as Greece and Ireland, it dwarfed them. In the U.S., the problems occurred within the context of a $15 trillion economy and in a country that still has the trust of the world. Over the past three years, in the wake of the financial crisis, U.S. borrowing costs have gone down, not up

This is a powerful affirmation of America's strengths, but the problem is that they ensure that the U.S. will not really face up to its challenges. We adjust to the crisis of the moment and move on, but the underlying cancer continues to grow, eating away at the system.

A crucial aspect of beginning to turn things around would be for the U.S. to make an honest accounting of where it stands and what it can learn from other countries. This kind of benchmarking is common among businesses but is sacrilege for the country as a whole. Any politician who dares suggest that the U.S. can learn from — let alone copy — other countries is likely to be denounced instantly. If someone points out that Europe gets better health care at half the cost, that's dangerously socialist thinking. If a business leader notes that tax rates in much of the industrialized world are lower and that there are far fewer loopholes than in the U.S., he is brushed aside as trying to impoverish American workers. If a commentator says — correctly — that social mobility from one generation to the next is greater in many European nations than in the U.S., he is laughed at. Yet several studies, the most recent from the OECD last year, have found that the average American has a much lower chance of moving out of his parents' income bracket than do people in places like Denmark, Sweden, Germany and Canada.

And it's not just politicians and business leaders. It's all of us. Americans simply don't care much, know much or want to learn much about the outside world. We think of America as a globalized society because it has been at the center of the forces of globalization. But actually, the American economy is quite insular; exports account for only about 10% of it. Compare that with the many European countries where half the economy is trade-related, and you can understand why those societies seem more geared to international standards and competition. And that's the key to a competitive future for the U.S. If Olson is right in saying successful societies get sclerotic, the solution is to stay flexible. That means being able to start and shut down companies and hire and fire people. But it also means having a government that can help build out new technologies and infrastructure, that invests in the future and that can eliminate programs that stop working. When Franklin Roosevelt launched the New Deal, he spoke of the need for "bold, persistent experimentation," and he shut down programs when it was clear they didn't work. Today, every government program and subsidy seems eternal.

What the Founding Fathers Knew

Is any of this possible in a rich, democratic country? In fact it is. The countries of Northern Europe — Denmark, Sweden, Norway, Finland — have created a fascinating and mixed model of political economy. Their economies are extremely open and market-based. Most of them score very high on the Heritage Foundation's Index of Economic Freedom. But they also have generous welfare states and make major investments for future growth. Over the past 20 years, these countries have grown nearly as fast as, or in some cases faster than, the U.S. Germany has managed to retain its position as the world's export engine despite high wages and generous benefits.

Now, America should not and cannot simply copy the Nordic model or any other. Americans would rebel at the high taxes that Northern Europeans pay — and those taxes are proving uncompetitive in a world where many other European countries have much lower rates and Singapore has a maximum personal rate of 20%. The American system is more dynamic, entrepreneurial and unequal than that of Europe and will remain so. But the example of Northern Europe shows that rich countries can stay competitive if they remain flexible, benchmark rigorously and embrace efficiency.

American companies are, of course, highly efficient, but American government is not. By this I don't mean to echo the usual complaints about waste, fraud and abuse. In fact, there is less of those things than Americans think, except in the Pentagon with its $700 billion budget. The problem with the U.S. government is that its allocation of resources is highly inefficient. We spend vast amounts of money on subsidies for housing, agriculture and health, many of which distort the economy and do little for long-term growth. We spend too little on science, technology, innovation and infrastructure, which will produce growth and jobs in the future. For the past few decades, we have been able to be wasteful and get by. But we will not be able to do it much longer. The money is running out, and we will have to marshal funds and target spending far more strategically. This is not a question of too much or too little government, too much or too little spending. We need more government and more spending in some places and less in others.

The tragedy is that Washington knows this. For all the partisan polarization there, most Republicans know that we have to invest in some key areas, and most Democrats know that we have to cut entitlement spending. But we have a political system that has become allergic to compromise and practical solutions. This may be our greatest blind spot. At the very moment that our political system has broken down, one hears only encomiums to it, the Constitution and the perfect Republic that it created. Now, as an immigrant, I love the special and, yes, exceptional nature of American democracy. I believe that the Constitution was one of the wonders of the world — in the 18th century. But today we face the reality of a system that has become creaky. We have an Electoral College that no one understands and a Senate that doesn't work, with rules and traditions that allow a single Senator to obstruct democracy without even explaining why. We have a crazy-quilt patchwork of towns, municipalities and states with overlapping authority, bureaucracies and resulting waste. We have a political system geared toward ceaseless fundraising and pandering to the interests of the present with no ability to plan, invest or build for the future. And if one mentions any of this, why, one is being unpatriotic, because we have the perfect system of government, handed down to us by demigods who walked the earth in the late 18th century and who serve as models for us today and forever.

America's founders would have been profoundly annoyed by this kind of unreflective ancestor worship. They were global, cosmopolitan figures who learned and copied a great deal from the past and from other countries and were constantly adapting their views. The first constitution, the Articles of Confederation, after all, was a massive failure, and the founders learned from that failure. The decision to have the Supreme Court sit in judgment over acts of the legislature was a later invention. America's founders were modern men who wanted a modern country that broke with its past to create a more perfect union.

And they thought a great deal about decline. Indeed, it was only a few years after the Revolution that the worrying began in earnest. The letters between Thomas Jefferson and John Adams, as the two men watched America in the early 19th century, are filled with foreboding and gloom; you could almost say they began a great American tradition, that of contemplating decay. Americans have been concerned about the health of their country for much of its existence. In the 1950s and '60s, we worried about the Soviet Union and its march toward modernization. In the 1980s, we worried about Japan. This did us no harm; on the contrary, all these fears helped us make changes that allowed us to revive our strength and forge ahead. Dwight Eisenhower took advantage of the fears about the Soviet Union to build the interstate-highway system. John Kennedy used the Soviet challenge in space to set us on a path toward the goal of getting to the moon.

What is really depressing is the tone of our debate. In place of the thoughtful concern of Jefferson and Adams, we have its opposite in tone and temperament — the shallow triumphalism purveyed by politicians now. The founders loved America, but they also understood that it was a work in progress, an unfinished enterprise that would constantly be in need of change, adjustment and repair. For most of our history, we have become rich while remaining restless. Rather than resting on our laurels, we have feared getting fat and lazy. And that has been our greatest strength. In the past, worrying about decline has helped us avert that very condition. Let's hope it does so today.