June 5th combat SITREP update by “Juan”

“You do not know how moronic government Poland has and how corrupt.”

06 June, 2014 00:07 Indeed Poland was my first guess for ‘replacements’, BOTH AIRCRAFT AND CREWS. The Baltic states have ground crews but are unlikely to have enough pilots as I doubt they still fly the Su-25/Mi-24. Only Poland would have sufficient manpower for both to keep the Ukrainian Air Force fighting after heavy losses. The Poles also don’t have the language barrier as there are plenty of Polish-speaking interpreters from Lviv unlike say, with Lithuanians or Estonians where the common language would have to be either Russian for older pilots/maintenence crews or English translated by the Ukrainian side!

Despite the DDR having lots of Mi-24s/MiGs stockpiled at the time of its annexation by West Germany these air frames would not be in much better shape even in storage than Ukraine’s own ample stocks of these gunships and Su-25s.

The real shortage is not immediately air frames though Ukraine probably has already lost 10-15% of its prewar flyable fleet of Mi-24s and Su-25s if you consider how many aircraft likely were shot up and had to crash land at base.

The real issue is pilots killed or wounded, plus maintaining adequate ground crews. Which is also where the Poles come in as I simply don’t think Ukraine even with Ukrainian ingenuity has enough ground crews to maintain the current sortie levels, which already seem to have dropped off from the day of the downtown Lugansk air strike. Either at least a handful of pilots have deserted under threat from GRU of personal retaliation by DNR/LNR forces over the war crime their comrade conducted (if the underground can get to one of Poroshenko’s aides they most certainly can shoot dumb bastard Ukrainian pilots in their home towns) or foreign pilots have been brought in to relieve the exhausted Ukrainian pilots.

Nothing does wonders for a pilot’s morale like still smelling the blood & guts of a wounded or departed comrade in the cockpit when starting up rotors or engines after a refitting. The MANPADs won’t have that effect if the pilots can safely eject without catching shrapnel in the legs from engine explosions but ZSUs most definitely can penetrate the armor around the cockpits of Su-25s and Mi-24s hence their switch to higher altitude bombing or rocket launching runs rather than low level strafing.

Sorry to sound so bloody minded, but I don’t have any sympathy left for cretins who shoot rockets at Lugansk civil servants and murdered that woman.

American Kulak

Last links for tonight:

http://www.twitlonger.com/show/n_1s21jfc
DNR/LNR sources (Strelkov?) say dozens of UKR dead piling up around Krasny Liman, losses were heavy in trying to storm that town and the effort apparently failed with UKR Nazi Guard retreating. Combatant casualties tend to be wildly inflated by both sides but consider UKR news story about Kiev hiding its dozens of wounded being flown in daily and that would be consistent with the type of ambush and run fighting described above.

Kidnapping local men and using them as either human shields or Shanghai’d reluctant combatants or in a bid to terrorize the locals would be just like the Death Squad tactics used in Central America/Colombia’s dirty wars.

https://twitter.com/akarlin88/status/474676569974505472

1,500 regular Ukrainian army troops reportedly mutiny, refuse orders to advance in Dnepropetrovsk. Not all is well in Ihor K’s fiefdom and he may very well have to call back Right Sector minions to quell the insurrection and shoot a few UKR Army troops pour encourager les autres.

https://twitter.com/gbazov/status/474689747558752256
Strelkov says UKR heli losses continue to mount with 3 downed and 1 seriously damaged into emergency landing (2 Mi-24s shot down and 1 Mi-8 forced landing), plus two Su-25 ground attack jets. I think at this rate with the IGLA S deadly UV equipped seeker heads doing their grisly work it’s only a matter of time before somebody starts reporting a rumor about dead or seriously injured Polish pilots back in Warsaw or Krakow.

Strelkov also somewhat amusingly urged the LNR reinforcements to get on with heading his way, he jokingly suggested they were too busy making YouTube videos about training their new recruits. Me thinks Strelkov is again projecting weakness in hopes that the bigger stuff that just rolled in from Russia including BTRs and Kamaz trucks that can tow NAF arty will arrive sooner rather than later driving by night.

American Kulak

By the way BOPOH, whatever you said about Novorissia, right or wrong, if Mr. Putin and his advisers did not thought about it, or some thing similar as a possibility before he open his big mouth, then, they are incompetent.

@American Kulak,

Thank you for rebutting Andrew’s posts. Something didn’t sound right about his comments, although he was smooth.

I am not the brightest, but I do understand reality, and a debt based economy is doomed to failure, because infinte growth in a finite system is NOT possible. There is always a new game in town, but eventually the bill comes due. Extend and pretend which the U.S. has been engaged in since 2008, only leads to a more severe reckoning.

I still read on popular blogs they are toying with the “trillion dollar coin” theory. I will drive to Florida and start swimming towards Cuba, should they implement that idea.

Andrew lost me when he claimed America would rebuild and restart its manufacturing base. Can you say “Detroit”? I don’t think America makes anything anymore except war and propaganda. Here in Alabama, we have Honda plants. So I agree that U.S. manufacturing will not resume until we have been driven to 4th world wages and working conditions. I don’t think even the American Sheeple will stand for that. (was in line at the grocery today and a girl was complaining about having to spend her money on food cuz she ran out of food stamps….)

A lot of Americans are truly stupid, but even more are simply misinformed.

It is coming, Americans are going to face a reality check of extreme consequence. Many will die, rightly so if you believe Darwin.

I don’t want to stay off topic because I respect Saker’s work here, but economically speaking, the parasites who create nothing have been feasting too long, and the working/struggling class have been fools to let them. The bill will come due and the bill will be paid.

Also, “Hi Nora”. :)

The Wend,
I found the original Russian text by Alexander Dugin that was referred to here: http://www.odnako.org/blogs/vvedenie-voysk-i-semantika-russkogo-vremeni/

From the way he is framed in the beginning in the link you provided (https://www.facebook.com/TruthfromUkraine/photos/a.1462094710680543.1073741828.1452285018328179/1507859116104102/?type=1&theater ) one could get the impression that Dugin is a pessimist which believes in Russia and Putin’s inevitable doom. That is not his position. Yes, he thinks the situation now is risky, and that Russian military intervention is necessary, but he also believes there will be an intervention, and that there will be a favorable outcome.

A newer text by Dugin, that further clarifies his views about Putin and the choices facing him now is published here (In Russian): http://evrazia.org/article/2536

For an English introduction to Dugin’s thoughts about the ideological dimension of the Ukrainian crisis I can recommend this link:
http://4pt.su/en/content/war-russia-its-ideological-dimension

Nora wrote: “I thought Dugin was pretty much a misinformation artist. No?”

No. There is a lot of misinformation about Alexander Dugin, so it’s a good idea to read the original sources if one wants to understand his position. Dugin is a traditionalist and philosopher, with principles organically connected together in a firm world view, who often expresses himself in unexpected and polemical ways that collides with the politically correct discourse. It’s not very difficult to copy and paste some of his words and create one’s own (often scary and misleading) stories out of them. Understanding him demands a bit more, but it is well worth the time.
One can disagree with Dugin’s weltanschauung, goals, or strategy, but if one spends some time reading his actual words there should not be any question about his intellectual honesty.

Thanks a lot Juan, stay safe and total respect for those on the front lines against the nwo.

One tactic I think Russia should consider is the old US trick of offering lots of money to defecting pilots. (assuming the pilots are Ukrainian and not Polish or something else) Offer citizenship and asylum for the pilot and their families.

This should have a strong effect as I doubt the Junta trusts their troops. They will have to take all sorts of precautions and threaten families, which can only make moral spiral lower. And if some pilots do defect, the propaganda victory would be priceless.

A more aggressive, perhaps too risky, tactic would be to pull an Erdoghan and shoot down a Ukie plane claiming it “violated Russian airspace.” It creates a defacto no fly zone close to the Russian border.

I agree that overt intervention is too costly and risky and Russia has to conserve its resources for what will be a long struggle against the Anglo-Zionist NWO. At the same time, we really need Russia to win in Ukraine.

American Kulak wrote: “A sovereign that prints it’s own money can’t go bankrupt, you say? Tell that to Weimar Germany. The Fed would never lose control, you say? Russia and China would never dump their Treasuries and take a bath on their value you say? Then tell us who if not Russia dumped $110 billion worth of Treasuries in the last 3 months that was scooped up by Belgium. Yes, Belgium, home of NATO and the European Commission/Parliament, and likely straw buyer for the Fed, just like Japan.”

Doesn’t this prove the point? Dumping treasuries requires a buyer. So the impact is never going to be that large to begin with, although admittedly a mass sell-off would affect the exchange rate. Still, to whatever extent dumping treasuries affects the value of the dollar, all this accomplishes is a shift in the domestic economy away from imports and towards exports, as the latter become more desirable (cheaper) to the rest of the world. And for the reasons Andrew explained, China has no interest in dumping treasuries, precisely because it desires to sell goods to the American market rather than compete against it. As long as China wants to sell to the US, then it must receive dollars. And if it receives dollars, it must do something with those dollars, which is why it buys treasuries to begin with. Americans are the beneficiaries of this scheme. We receive real goods and the Chinese receive green bits of paper (which they then exchange for a “treasury,” another bit of paper).

It is absolutely true that the US cannot go financially bankrupt, and this is an important point for anybody to understand no matter what their politics because it is empirically true. It is correct to say that a country can render its currency worthless, but the US is in absolutely no danger of that. Most, if not all, instances of hyperinflation in the word are a result of sharp and sudden declines in productive capacity and not, contrary to popular belief, “printing” money. If anything, the US is not printing (i.e., spending) enough money to keep its domestic economy at full employment. It has spending capacity, and mass treasury dumps (1) aren’t going to happen and (2) even if they do, aren’t going to change that.

American Kulak wrote: “The US economy is too productive to experience true hyperinflation? The Fed is too disciplined? Perhaps so, but that outcome can likely only be avoided with a ‘one-time’ shock devaluation. You’re forgetting that a Great Depression 2.0 deflation in prices while the monetary base is devalued (30% bath on all gold FDR’s Fed ordered citizens on pain of arrest to surrender) is the alternative to massive money printing.”

The US is not on a gold standard, which is what your reasoning implies. All of its money is “printed.” And it is in fact economically desirable for the amount that is “printed” not to remain steady but to increase over time (as the population and economy grow). Even if the US began to experience inflation, which there is no reason to believe it will now or anytime in the foreseeable future, it can curb inflation through simple tax increases. (Spending money = money creation; taxing money = money destruction.) The US does not need to undergo devaluation precisely because it uses a fiat monetary system that floats on an exchange. It controls the amount of dollars in the system at any given time and can spend more (“print”) dollars or tax more (“destroy”) dollars as economic circumstances dictate. This flexibility is exactly what the European nations who joined the European Monetary Union foolishly gave up. (The EMU is a neoliberal scheme designed to destroy European welfare states by imposing financial constraints on governments.)

-ee

Nora,

1) “Now, re: more economics. I can remember debating the gold standard with my father 50 years ago — and I still don’t understand it worth beans.” I think this sentence accurately describes where most Americans are.

Most Americans inherently understand that contra Andrew, there is no ‘something for nothing’ and the act of government spending by itself does not create wealth. Nor are dollars guaranteed to be accepted just for existing so long as the USA exists — there is at some point a breaking point!

Otherwise why should anybody bother to pay income taxes if the Fed could just buy enough Treasuries every year to cover the entire national debt and spending minus land use fees, federal excise taxes (like on cellphone service, for example, thank you Al Gore) and customs duties?

We can’t say exactly when it will happen but I’m convinced with Dmitry Orlov and others the Western monetary fiat-based system collapse is a matter of years not decades. 2008 was the first hiccup, the next crisis we have in late 2014 or more likely 2015-16 entering the presidential election year will be the decisive inflection point. Ukraine and the desperate effort to develop Ukrainian shale gas even if ethnic cleansing is required on top of it is yet another desperate effort by the NWO to forestall this reckoning and blame it on global conflicts with Russia and China (and Brazil too, get ready for a flood of bad publicity about the World Cup that would make a hardcore fake photo tweeting Sochi trashing propagandist blush).

American Kulak

I want to thank Hermit for the link to an essay entitled…The War on Russia in its Ideological Dimension by Alexandr Dugin. Here is a short excerpt….

“We need to consciously counter any provocation to frame Russia as a pre-liberal power. We need to refuse to allow the liberals to save themselves from their fast-approaching end. Rather than helping them to delay it, we need to accelerate it. In order to do this, we need to present Russia not as a pre-liberal entity but as a post-liberal revolutionary force that struggles for an alternative future for all the peoples of the planet. The Russian war will be not only be for Russian national interests, but will be in the cause of a just multipolar world, for real dignity and for real, positive freedom – not (nihilistic) freedom from but (creative) freedom for. In this war, Russia will set an example as the defender of Tradition, conservative organic values, and will represent real liberation from the open society and its beneficiaries – the global financial oligarchy. This war is not against Ukrainians or even against part of the Ukrainian populace. Nor is it against Europe. It is against the liberal world (dis)order. We are not going to save liberalism, per their designs. We are going to kill it once and for all. Modernity was always essentially wrong, and we are now at the terminal point of modernity. For those who rendered modernity and their own destiny synonymous, or who let that occur unconsciously, this will mean the end. But for those who are on the side of eternal truth and of Tradition, of faith, and of the spiritual and immortal human essence, it will be a new beginning, Absolute Beginning. – See more at: http://4pt.su/en/content/war-russia-its-ideological-dimension#sthash.1oWCTdHM.dpuf“

Nora & American Kulak, I’ve been a long-time reader & contributor to Vineyard’s analysis

American Kulak, I like your military analysis posts but Andrew & ee are correct in their economics –most people in believe in many myths that apply to a gold-standard but not to fiat ones now

Also, there’s a HUGE difference between owing money in currency you do NOT control & can’t create, such as Weimar Germany owing $21+ BILLION per year in war reparations payable only in gold or hard goods or British pounds or French francs (which were all on a gold-standard)
vs.
owing debt in fiat dollars that the US gov can create at the push of a button
&
by law,
all bank debts, loans, mortgages, credit, etc in the US is payable in US dollars –US banks MUST accept US dollars as payment for all credit/debts/mortgages/autoloans, which help keep value & demand for the US dollar up
in
addition to the need for US dollars to pay US taxes, tariffs, & fees

read the short PDF: ‘Seven Deadly Frauds of Economic Policy’ http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf by Bank CEO/economist & billionaire-bond trader Warren Mosler who explains bond & bank monetary operations from the insider’s view of how things really work that dispels myths of economics believed by most –
– from
http://MoslerEconomics.com/ -Daily Insightful & Most Accurate Verifiable Economics Analysis –he’s billions from being middle-class following his own MMT economics advice

And to back up what he writes, verifiable empirical evidence shows NO relationship between interest rates, deficits, nor inflation(which includes food & energy) –from S&P, Bloomberg, CNBC, FoxBUsiness chief economist/analyst Mike Norman http://mikenormaneconomics.blogspot.com/2011/03/govt-spending-deficits-inflation-and.html

What really gives a currency value is the production of that nation, and that nation requires it’s currency to buy it’s products

(regardless of reserve currency status –EUROs, yen, yuan, etc all have value because their countries produces things people want & need
&
you need their currency to buy their products from or in their countries) as well as that nation’s currency is needed to pay for taxes & paying off loans/debts, which adds to the currency’s value.

A currency’s value is given value because taxes have to be paid in that currency AND it is based on
&
backed by the production of what the currency can buy, just like gift cards & gift certificates value are based on what the business issuing them produces or sells

That’s why Walmart & Best Buy currency aka as gift cards/gift certificates has the highest value on Ebay vs. some small business that produces things few people want.

Example: in practice in the real world, any currency is backed by the production of what products it can buy..

You could create your own fiat Kulak dollars out of thin air (print Kulak ‘gift certificates’) but no one would want them & no would accept them..

BUT if you invented a potion of youth/immortality that everyone would want
&
you only accepted your fiat Kulak dollars you created as payment for your potion of youth/immortality,
your fiat Kulak dollars now have value that everyone wants since they need it to buy your potion of youth/immortality.

People will want your fiat Kulak dollars & will trade you their goods/services for your fiat Kulak dollars that you spend into existence as you buy their goods.

. you get their goods, they get your Kulak dollars that u paid with… now they have Kulak dollars that they can buy your potion of immortality

ie, your Kulak dollars are backed by the production of your potion of youth/immortality

ie, welcome to the world of currency markets & international trade

ie, What really gives a currency value is the production of that nation that that nation requires to buy it’s products

What really gives a currency value is the production of that nation that that nation requires to buy it’s products —

P.S. Just a note, our US dollar value does NOT rely on being the ‘world reserve’ currency nor the ‘petrodollar’ –ie, oil is traded & bought in EUROs as well as rubles/Chinese yuan without using the US dollar–countries don’t need US dollars to buy oil.

Additionally, the British pound, EUROs, & Japanese yen all have value without them being the world reserve currency because they produce trillions of dollars of products/services that people want & need

thus, the US dollar is backed by the $16+ trillion in products/services it produces/exports from food to medicine, pharmaceuticals to weapons to electronics to computers to software, etc
as
well as the fact that u need it to pay off debts/mortgages/credit cards & pay off taxes in addition to the need of US dollars to buy locally produced goods (ever tried to buy groceries with British pounds in the US?)

The US dollar has value because it actually is still the LARGEST country exporter of food & manufacturer of goods (from Intel chips, Microsoft Windows/Office, to Hollywood movies/music) that the world wants.

–China depends on the US for imports of wheat, soybean, rice, corn. See charts below –btw, Russia & China stopped using the US dollar for trade between them.. the US dollar didn’t lose/drop in value nor collapse nor hyperinflate

http://mjperry.blogspot.com/2011/12/un-data-china-is-now-worlds-no-1.html

why US fiat dollar (and even EURO) has value, backed by world’s greatest production/export of food:

http://www.mapsofworld.com/world-top-ten/world-top-ten-agricultural-exporters-map.html

http://in.reuters.com/article/2008/04/18/trade-wto-food-idINL1835607720080418

The US doens’t need nor needed Braetton Woods’ Accord to be ‘world reserve’ currency… that’s just a formality that happened after the fact because the US for years prior was the world’s greatest exporter (you need US dollars to buy US goods)
&
producer of goods and still the leading nation as biggest exporter of FOOD after WW2 (making the US dollar valuable),
&
then world’s biggest importer (by ‘exporting’ fiat US dollars as nations exported to the US to accumulate US dollars because they wanted US dollars to buy US goods/services) which is how it became & is still ‘world reserve’ currency (which it doesn’t even need to be)

P.S. Weimar Germany’s hyperinflation was caused by shortages caused by 90% drop in it’s production when almost all their industrial/manufacturing workers went on strike for 8+ months to protest French/Belgian invasion of Germany to confiscate German industrial goods (coal, steel, manufactured goods,etc) for war reparations &
Germany’s gov printed money to buy foreign currency because it’s $21 billion war reparations could only be paid foreign gold-backed currency or hard goods
&
it also paid the striking German industrial workers to stay on strike & NOT produce, circumventing the normal increase in production that would otherwise arise from increased spending
&
from economics professor Bill Mitchell:
http://bilbo.economicoutlook.net/blog/?p=3773

Zimbabwe’s hyperinflation was mostly caused by shortages caused by drops of 30%-57%
of it’s production sectors(food, textiles, manufacturing,etc) due to Mugwabe after years of civil war won
&
confiscated most lands of the white landowners(who then did a mass exodus out of Zimbabwe & made up most of the educated, skilled, professional, managerial class & employed most of the population)
&
gave their land/assets to his revolutionaries who were mostly armed peasants who had no idea how to run a farm, agribusiness, nor factory & unemployment then skyrocketed to 80%+

“The Reichsmark was inflated away trying to obtain the gold and foreign money need to pay the reparations.” respectfully this doesn’t make any sense, particularly once the hyperinflation reached its terminal stage where infamously Germans stole the wheelbarrow and left the worthless marks, since those same worthless marks would not be good for buying any francs or ‘sterling’ or dollars that still had value then except in massive quantities at the banker level. They certainly had no use at the individual level which is why barter and prostitution both became rampant.

Once again, I neither subscribe to the ‘only a hard gold standard’ can save us theory (where do you set the price to establish equilibrium or price stability, $5,000, $10,000, $20,000 an oz?) nor the LaRouchian or modern monetary theory summed up by the Monopoly rule that ‘the [central] bank never goes bankrupt’. The mere fact that human beings can exchange entries on a computer for goods and services or at least nominal paper like Treasuries versus debasing coinage like the Roman Empire did 1,800 years ago has not changed human nature. Monetary order will be restored, undoubtedly, but in the ordo ab chao method whereby the U.S. elite stops fighting the Eurasian Economic Order after the dollar is finished and instead tries to unify the trade dollar, the domestic-only $hiess dollar as Jim Willie calls it that no one in the rest of the world will want (not unlike Argentine or Venezuelan currency now), and whatever synthesis of the ruble-yuan-euromark basket Eurasia will use into one currency to rule them all. And one throne upon which that one global monetary unit imposing leader to rule them all will sit. That’s where all of this destruction is headed.

Respectfully,
American Kulak

[here it continues…]

The anti-Russian nationalists of Eastern and Central Europe are a very rare breed of dumb, short-sighted people. The Zionist West has as a deep-rooted ideology the destruction of the Indo-European peoples, whereas Russia have not. Russia can compromise with real European nationalists, America cannot (except in rare circumstances, as in Eastern Europe today, which they do for strategic reasons, i.e. Russia presents a real threat to their hegemonic goals than small Eastern European countries, which are only useful in encircling Russia with hostile governments, the Zionists have no love for these countries’ nationalisms or peoples, but for a ‘greater good’, they tolerate it).

Primer on MMT with charts of empirical data/evidence:

MMT: the most important fact is that ALL spending is income for someone else –and that all gov spending is income for the private sector (that’s just regular accounting –someone’s debit is someone else’s credit)…
&
that the vast majority of the money supply is made up of money creation(aka as loans/credit by fractional reserve lending) by private banks.

About 97% of the total money supply in the world is actual fiat money created by private for-profit banks -chart of M1 (about $2 trillion) & M2 (about $10 trillion)

As long as the economy is not already at full employment, there is NO ‘crowding out’ because banks get any & all fiat funding from the federal reserve/central bank (NOT FROM A LIMITED SUPPLY of gold nor foreign currency)

&
the people hired are just idle unemployed & the resources used are also idle.

Private for-profit banks are responsible for most of the money creation in the US $15+ trillion dollar
economy
because they create $6-$7 TRILLION per year in the US economy to fund spending/demand & hiring are responsible for most of the money creation

When private-for profit banks reduce loans/credit/money creation, recessions happen because there’s not enough money to fund spending, demand,
&
hiring so businesses then cut production
&
cut supply which keeps prices high & layoff workers & the effects ripple outwards to other businesses

Thus, it’s up to gov to counteract the money supply contraction with gov money creation (aka ‘deficit spending).
–which
shows why taxes should be cut
&
gov money creation(aka ‘deficit spending’) increased during stagnant economies to fund increased hiring, spending
&
demand because
recessions are caused by CONTRACTIONS in money supply due to banks reducing their money creation aka as loans/credit

US dollar value is determined by US production just like the value of a – card/certificate to a department store is worth what the department store sells/produces, which is why gift cards/certificates
to
Best Buy, Walmart, etc are worth the most on Ebay while those to Ayn Rand’s book store is worthless–

but any & all gift cards would have no value if their shelves were empty & never restocked with products to buy.

Inflation is reduced & offset because the increased spending increases production/hiring & supply of goods, which offsets the increased money supply

..as long as the economy is not already at full maximum employment/maximum production & there is no supply shock nor monopoly, there is little inflation

–the only real limit is NOT tax revenue or debt/deficit levels but the actual maximum production of the nation

(ie, evidenced as unemployment rate below 2%-4%, maximum production by factories at full maximum production & maxed hiring, etc)

..and that because a nation that creates it’s own currency
&
has almost all it’s debt in it’s own currency can always pay it’s debts & spending regardless
&
that interest rates are really targeted
&
set by the Federal Reserve/central bank in that the market floats towards
whatever interest rate the central bank targets, regardless of debt, nor deficit levels, nor Credit Ratings, which
is
why interest rates are near 0% despite record debt/deficit levels & lowered credit ratings, which is why
Japan/Singapore
are
also
at
near 0% interest rates, 0% inflation, 4% to 5% unemployment rate, & deficit/debt levels (200%+) twice that of the of US for the past 10-15+ years

“Any time the US wants to “pay off” the debt, it just needs to credit bondholders with newly created dollars.” True ever since 1971, but just as the world monetary order suddenly changed at that inflection point due to the costs of the Welfare/Warfare State (Great Society and Vietnam/Cold War) what happens if we have another global monetary reset, this time forced on the U.S. not by France, Japan and Europe but by the BRICS? What happens when the biggest bondholder of all, China, demands something tangible rather than more little green pieces of paper or book entries on a ledger or computer somewhere? Are we going to have more Bundy ranch standoffs when cowboys say ‘hell no are you putting a ChiCom oil well or solar farm on this land?’

“Since bonds are the equivalent of cash, no new money is created by this operation – the money was created when it was spent and covered by bond issuance.” This assumes the Fed and Treasury can continue their ‘no net money entering the system’ Ponzi to kingdom come. They cannot and if you haven’t noticed both economic and population growth in terms of domestic births have slowed dramatically in the U.S. Hence the terrible urgency on the part of our elites to import new people including children now dumped by their desperate parents at our southern Border.

“As long as the US sticks to this system, it cannot by definition go bankrupt, since it always has the ability to create dollars to pay off or service debt.” Until the rest of the productive world no longer wants those dollars, regardless of all the draconian measures the US may take to keep merchants accepting the $heissdollar and EBT cards filled no matter what. If you doubt this, check out FATCA and the radical extra territoriality of it as the first step to real capital controls on all Americans and accounts owned by them abroad (save for maybe the really big boys like Soros or Ted Turner, as usual).

American Kulak

Nora:

Did you actually lease your land and if so when, or did you buy stock in a shale extraction firm?

We leased our land for drilling and collected a very large check, and I invested my portion of that check into limited partnerships in the fossil fuel business (but not shyster firsm like Chesapeake Energy) and made back all the money I owed in taxes on the lease bonus in the first two years.

There hasn’t been any drilling yet for the obvious reason that it is not economical given that prices are $4 and they need around $6 to sell it into the market. It will become economical for the leaseholder (Shell) once they have their petrochemical plant up and running, because the gas feedstock from their own wells will be an extremely cheap input producing very valuable plastics and they won’t need to deal with transaction and long distance shipping costs. However if they don’t drill soon, they owe us another lease bonus, or we can negotiate a new contract with another firm who themselves will owe a lease bonus. From my perspective, I don’t really care if it is ecnomical or not for the driller. I own the mineral rights, and if someone wants to try to extract them, they can pay me. if they don’t, well, I still own the mineral rights and at some point somebody is going to want to try to get the resource out. I’m patient.

I’m well aware of the crap going into and out of the ground in the process and frankly don’t care too much – all the “pollutants” involved all came out of the earth to begin with and are simply being returned to it. I’ve listened to people rattle on about the waste water being dumped into rivers without them providing the perspective that the total amount (assuming it is all dumped directly in a river without treatment or recycling, which doesn’t happen) is the equivalent of getting one teaspoon on your head in the course of a ten minute shower. The land holding is extremely large, and we use it for hunting and farming. The wellpad will be off in a corner well away from where we do anything. I’ll be glad to listen to the opinion on this of any opponent who chops their own wood for heat in the winter and rides a horse to get around. Anyone who heats their home with fossil fuels or drives a car and then starts preaching about the evils of oil and gas extraction is just a hypocrite.

The biggest objection is “what about inflation or devaluing US dollar?”

Inflation is offset/reduced by increasing production that normally increases when there is increased spending(stimulus) unless there is a shortage or supply shock or monopoly/oligopoly because competition & increased supply keeps prices down.

A currency’s value is given value because taxes have to be paid in that currency AND it is based on
&
backed by the production of what the currency can buy, just like gift cards & gift certificates value are based on what the business issuing them produces or sells

That’s why Walmart & Best Buy currency aka as gift cards/gift certificates has the highest value on Ebay vs. some small business that produces things few people want.

The US dollar has value because it actually is still the LARGEST country exporter of food & manufacturer of goods (from Intel chips, Microsoft Windows/Office, to Hollywood movies/music) that the world wants.

–China depends on the US for imports of wheat, soybean, rice, corn. See charts below –btw, Russia & China stopped using the US dollar for trade between them.. the US dollar didn’t lose/drop in value nor collapse nor hyperinflate

http://seekingalpha.com/article/165958-u-s-still-the-world-s-largest-manufacturer

why US fiat dollar (and even EURO) has value, backed by world’s greatest production/export of food:

http://www.mapsofworld.com/world-top-ten/world-top-ten-agricultural-exporters-map.html

http://in.reuters.com/article/2008/04/18/trade-wto-food-idINL1835607720080418

The US doens’t need nor needed Braetton Woods’ Accord to be ‘world reserve’ currency… that’s just a formality that happened after the fact because the US for years prior was the world’s greatest exporter (you need US dollars to buy US goods)
&
producer of goods and still the leading nation as biggest exporter of FOOD after WW2 (making the US dollar valuable),
&
then world’s biggest importer (by ‘exporting’ fiat US dollars as nations exported to the US to accumulate US dollars because they wanted US dollars to buy US goods/services) which is how it became & is still ‘world reserve’ currency (which it doesn’t even need to be)

P.S. Weimar Germany’s hyperinflation was caused by shortages caused by 90% drop in it’s production when almost all their industrial/manufacturing workers went on strike for 8+ months to protest French/Belgian invasion of Germany to confiscate German industrial goods (coal, steel, manufactured goods,etc) for war reparations &
Germany’s gov printed money to buy foreign currency because it’s $21 billion war reparations could only be paid foreign gold-backed currency or hard goods
&
it also paid the striking German industrial workers to stay on strike & NOT produce, circumventing the normal increase in production that would otherwise arise from increased spending
&
from economics professor Bill Mitchell:
http://bilbo.economicoutlook.net/blog/?p=3773

Zimbabwe’s hyperinflation was caused by shortages caused by drops of 30%-57%
of it’s production sectors(food, textiles, manufacturing,etc) due to Mugwabe after years of civil war won
&
confiscated most lands of the white landowners(who then did a mass exodus out of Zimbabwe & made up most of the educated, skilled, professional, managerial class & employed most of the population)
&
gave their land/assets to his revolutionaries who were mostly armed peasants who had no idea how to run a farm, agribusiness, nor factory & unemployment then skyrocketed to 80%+

be4real:

Andrew lost me when he claimed America would rebuild and restart its manufacturing base. Can you say “Detroit”? I don’t think America makes anything anymore except war and propaganda.

That is an extraordinarily ignorant opinion.

If the US doesn’t make anything, you have to wonder what the hundreds of thousands of factories around the country are doing.

I think what you are saying is that the US doesn’t make cheap consumer goods you buy at Wlmart or Bed Bath and Beyond. You are correct there. We make very few socks and t-shirts, we don’t make cheap utensils, and we don’t make cheap toys for kids.

On the other hand, the US manufactures a tremendous amount of complex transportation equipment, pharmaceuticals, petrochemicals. It also has a big manufacturing business converting naural resources like food, minerals, and such into higher value products. There are also tens of thousands of small factories making all manner of niche products. Possibly you don’t see this because you live in a de-industrialized are like New England which due to land and salary prices and taxes and logistics is not competitive with middle America. If you want to go see places that are making lots of things, try driving around Chicago or Houston or the LA Inland Empire. Float along the Delaware between PA and New Jersey or the Mississippi between Baton Rouge and New Orleans, or down the Ohio through Pittsburgh. You will see lots of factories, and lots of ships and trains and trucks moving lots of goods.

Saker,

In Juan’s list of the victims of the Lugansk Administration Building massacre, I do not see the name of Inna Kukurudza

http://robinwestenra.blogspot.com/2014/06/nato-junta-war-crimes.html

https://www.facebook.com/southfronteng/posts/635012069924085:0

Perhaps the “unidentified woman” in Juan’s list is Inna Kukurudza? Saker, if possible and when time permits, could you ask Juan about this? This woman’s face will be deeply etched on me for the rest of my life. To the extent possible, this and the other victims of the neo-Nazis must not become anonymous. Naming and knowing the victims is the first step in the legal/medicolegal process of working back from the immediate cause (the pilot), up through the chain of command to the proximate cause, to obtain some justice for the victims and punish the perpetrators.

American Kulak

Well, for gosh sakes, your “soft” gold standard is the point I was making all those years ago! And I totally agree with you about oligarchy and greenback dollars.

And yes, I’ll blame the Great Depression on the Fed and major international banking, uh, errors. But I will disagree with you regarding the “panics” of the 19th century (history being more my forte): those things seem to be built into a laissez-faire (i.e., unregulated) economy and the net effect tended to benefit the haves and devastate everyone else — until the Great Depression, where for the first time people of all classes were greatly affected in very large numbers. And I’m pretty sure you’ll find these fighting words, but Keynesian spending programs instituted to keep us from going Socialist or Communist helped immeasurably bc all that make-work did pump money back into the economy; when Roosevelt cut back, the system reverted and it took mobilization/WWII to get us out from under. More fighting words: the system of regulation of securities and banks developed as a result of the Great Depression kept us from those 30-year panic/wipe-out cycles until — thank you Trilateral Tool Jimmy Carter and every president since then — we went bonkers dismantling it and deregulating everything in sight. I loathe bureaucrats and over-regulation, but it sure would be nice to see some Smart Regulations. We’d have to have leaders who care about people though — or at least who can be made to listen and follow our wishes. Fat chance anytime soon.

I would add other factors to your last paragraph though: blind arrogance, some craziness, a whole lot of greed and what used to be called a lust for power come to mind but I’m sure there are more than that. Oh, and a certain little country in the Middle East…

Славянск. Отъезд беженцев. Хунта, будь ты проклята! / Slavyansk.Refugees departure.Damn you,Junta!

http://www.youtube.com/watch?v=EDdam2uzmVs

“Published on Jun 5, 2014

#SaveDonbassPeople
#SaveDonbassSkyFromNazi

The Kiev Junta offense. A war crime. Neo-Nazi crimes against humanity.

Slavyansk. Refugees departure. Damn you, Junta!

Parents say goodbye to their kids, they had to leave, so that children can live in safety. There is an ongoing combat. The sounds of air bombing and artillery strikes are hearing while parents crying of their children. Women and mothers’re saying: “We will curse Turchinov until end of life! Tell this him!”

“Leolo Lazone said…
Saker,
In Juan’s list of the victims of the Lugansk Administration Building massacre, I do not see the name of Inna Kukurudza”

Inna Corn is on the list. How her last name got translated in to English on that list I have no idea but Saker can ask Juan about it.

‘Kукуруза’ is what it should be on the list.

Опрос на немецком ТВ: Haben Sie Verständnis für Putins Kurs?

http://a30001.rimg.info/icon/11961400028786548daf173b718f0a9cf0741461d.jpg