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Economic News Update
(Stolen Swiss Bank Accounts!)

Within a month the US Treasury must rule whether China is a "currency manipulator", triggering sanctions under US law. This has been finessed before, but we are in a new world now with America's U6 unemployment at 16.8pc.

"It's going to be really hard for them yet again to fudge on the obvious fact that China is manipulating. Without a credible threat, we're not going to get anywhere," said Paul Krugman, this year's Nobel economist.

China's premier Wen Jiabao is defiant.

"I don’t think the yuan is undervalued. We oppose countries pointing fingers at each other and even forcing a country to appreciate its currency," he said yesterday. Once again he demanded that the US takes "concrete steps to reassure investors" over the safety of US assets.

"Some say China has got more arrogant and tough. Some put forward the theory of China's so-called 'triumphalism'. My conscience is untainted despite slanders from outside," he said

Days earlier the State Council accused America of serial villainy. "In the US, civil and political rights of citizens are severely restricted and violated by the government. Workers' rights are seriously violated," it said.

"The US, with its strong military power, has pursued hegemony in the world, trampling upon the sovereignty of other countries and trespassing their human rights," it said.

"At a time when the world is suffering a serious human rights disaster caused by the US subprime crisis-induced global financial crisis, the US government revels in accusing other countries." And so forth.

Is the Politiburo smoking weed?

I let others discuss the rights and wrongs of this, itself a response to the US report card on China. Clearly, Beijing is in denial about is own part in the global imbalances behind the credit crisis, specifically by running structural trade surpluses, and driving down long rates through dollar and euro bond purchases. No doubt the West has made a hash of things, but the Chinese view of events is twisted to the point of delusional.

What interests me is Beijing's willingness to up the ante. It has vowed sanctions against any US firm that takes part in a $6.4bn weapons contract for Taiwan, a threat to ban Boeing from China and a new level of escalation in the Taiwan dispute.

In Copenhagen, Wen Jiabao sent an underling to negotiate with Mr Obama in what was intended to be - and taken to be - a humiliation. The US President put his foot down, saying: "I don't want to mess around with this anymore." That sums up White House feelings towards China today.

We have talked ourselves into believing that China is already a hyper-power. It may become one: it is not one yet. China is ringed by states - Japan, Korea, Vietnam, India - that are American allies when push comes to shove. It faces a prickly Russia on its 4,000km border, where Chinese migrants are itching for Lebensraum across the Amur. Emerging Asia, Brazil, Egypt and Europe are all irked by China's yuan-rigged export dumping.

Michael Pettis from Beijing University argues that China's reserves of $2.4 trillion - arguably $3 trillion - are a sign of weakness, not strength. Only twice before in modern history has a country amassed such a stash equal to 5pc-6pc of global GDP: the US in the 1920s, and Japan in the 1980s. Each time preceeded depression.

The reserves cannot be used internally to support China's economy. They are dead weight, beyond any level needed for macro-credibility. Indeed, they are the ultimate indictment of China's dysfunctional strategy, which is to buy $30bn to $40bn of foreign bonds every month to hold down the yuan, refusing to let the economy adjust to trade realities. The result is over-investment in plant, flooding the world with goods at wafer-thin export margins. China's over-capacity in steel is now greater than Europe's output.

This is catching up with China, in any case. Professor Victor Shuh from Northerwestern University warns that the 8,000 financing vehicles used by China's local governments to stretch credit limits have built up debts and commitments of $3.5 trillion, mostly linked to infrastructure. He says the banks may require a bail-out nearing half a trillion dollars.

As America's creditor - owner of some $1.4 trillion of US Treasuries, agency bonds, and US instruments - China can exert leverage. But this is not what it seems. If the Politburo deploys its illusiory power, Washington can pull the plug on China's export economy instantly by shutting markets. Who holds whom to ransom?

Any attempt to retaliate by triggering a US bond crisis would rebound against China, and could be stopped - in extremis - by capital controls. Roosevelt changed the rules in 1933. Such things happen. The China-US relationship is no doubt symbiotic, but a clash would not be "mutual assured destruction", as often claimed. Washington would win.

Contrary to myth, the slide to protectionism after the 1930 Smoot-Hawley Tariff Act did not cause the Depression. Trade contracted more slowly in the 1930s than this time. The Smoot-Hawley lesson is that tariffs have asymmetrical effects. They devastate surplus countries: then America. Deficit Britain did well by retreating into Imperial Preference.

Barack Obama has never exalted free trade. This orthodoxy is, in any case, under threat in the West. His top economic adviser Larry Summers let drop in Davos that free-trade arguments no longer hold when dealing with "mercantilist" powers. Adam Smith recognized this too, despite efforts by free-trade ultras to appropriate him for their cause.

China's trasformation has been remarkable since Deng Xiaoping unleashed capitalism, but as ex-diplomat George Walden writes in China: a Wolf in the World? you cannot feel at ease with a regime that still covers up Mao's murderous nihilism. He reminds us too that China has never forgiven the humilations inflicted by the West when the two civilizations collided in the 19th Century, and intends to exact revenge. Handle with care.

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U.S. Politicians Better Not Upset China
http://inflation.us

In a move that demonstrates just how clueless politicians in Washington are about the U.S. economy, a group of U.S. senators introduced legislation this week in an attempt to make the Obama administration take action against China over its currency policy. The so-called "currency manipulation bill" being proposed would seek penalties against countries that fail to address misaligned currencies. Concurrently, 130 congressmen from both sides have signed a letter asking Treasury Secretary Timothy Geithner to take action on the issue.

These politicians are criticizing China for keeping their currency at artificially depressed levels, which they say gives China an unfair advantage in the global trade market and is causing the U.S. to have huge trade deficits. They fail to realize it is China's artificially low yuan and their willingness to accept the inflation that we export to them, which allows the U.S. to import cheap goods and Americans to live beyond their means. We should be kissing China's feet and thanking them for allowing us to consume the goods they produce in return for a worthless piece of paper that we print. Instead, we are blaming them for the problems that our politicians created.

Nobody in Washington understands just how fragile the U.S. dollar is. It's absurd for Congress to say they are going to penalize China, when China has the power to make the U.S. dollar collapse overnight using words alone. Although a collapse in the U.S. dollar would cause China to lose close to $1 trillion, their resilient manufacturing-based economy would quickly recover. On the other hand, without China, U.S. citizens would be forced to consume the goods we produce in this country.

The last thing the U.S. should do is upset its largest creditor. Think about all of the products in your home that were made in China. Imagine if all of these goods suddenly disappeared and you had to replace them with goods that were made in the U.S. Years ago we had U.S. companies like RCA and Zenith that produced televisions. RCA went bankrupt and Zenith was acquired by a Korean company LG Electronics. Today, there are no American television manufacturers left.

Up until the 1850s, Americans made all of their clothing at home on their own. With the invention of the sewing machine in the 1850s, the production of clothing became industrialized. By the end of the 1860s, Americans bought nearly all of their clothes from clothing manufacturers. By 1900, clothing trade became the largest industry in New York, with more than triple the output of its second largest industry, sugar refining. In 1910, 70% of U.S. women's clothing and 40% of U.S. men's clothing was produced in New York.

Today, the textile industry in New York is nearly nonexistent. 34.5% of the clothing purchased in the U.S. is imported from China. With the federal minimum-wage laws that are currently in place, it is impossible for an American company to profitably produce affordable clothing in this country.

The reason for our huge trade deficit is the lack of a real manufacturing base in the U.S. It is impossible for the U.S. to rebuild its manufacturing base without savings and it is impossible for Americans to save with the Federal Reserve artificially suppressing interest rates at 0%-0.25% and the government running record budget deficits. China inevitably will allow the yuan to strengthen and the U.S. trade deficit will shrink. However, a decrease in the trade deficit won't come from rising U.S. exports. The trade deficit will decline because we will no longer be able to afford imported goods from China.

It was just announced this week that China reduced their U.S. treasury holdings for a third straight month in January by $5.8 billion to a six-month low of $889 billion. NIA expects China to remain a net seller of U.S. treasuries, especially now that Washington is antagonizing them. It won't be long before the Federal Reserve is the only buyer of U.S. treasuries.

It's no coincidence that the Canadian dollar just reached a new 52-week high, less than two weeks after the Canadian government announced a plan to balance its budget by 2016. The U.S. will never achieve a balanced budget ever again and by 2016, it's possible that half of U.S. tax receipts will be needed to pay the interest on our national debt. We pray that all NIA members are accumulating gold and silver.

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Health Care 2010- Fuzzy Math

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Two disturbing news reports

From - ALLIANCE FOR HUMAN RESEARCH PROTECTION
http://www.ahrp.org

1.UK Daily Telegraph reports about a covert CIA experiment on French civilians during the Cold War era: their bread was spiked with LSD.

2. Bloomberg News reports that President Obama threatens to Veto the Intelligence Budget Bill to prevent independent investigations of intelligence agencies. The Administration opposes a proposed independent probe of the anthrax-laced letter attacks by the Inspector General arguing that it would "undermine public confidence" in a Federal Bureau of Investigation probe of the attacks "and unfairly cast doubt on its conclusions."

In August 1951, nearly 500 people in a little French village were suddenly stuck down with mass insanity and terrifying hallucinations--at least five people died and dozens were interned in psychiatric asylums. The cause has been a mystery for 60-years until an American investigative journalist, HP Albarelli Jr, the author of "A Terrible Mistake: The Murder of Frank Olson and the CIA's Secret Cold War Experiments" uncovered evidence showing that the cause was a covert LSD experiment conducted by the CIA, working in concert with the Swiss pharmaceutical company, Sandoz, on unwitting French civilians.

All these years, a bogus cover-up explanation was promulgated: the hallucinations were blamed on contaminated bread and / or mercury poisoning. Albarelli says that the scientists who manufactured the bogus cover-up explanations--to deflect from the real source of the events--worked for the Sandoz, which was then secretly supplying both the US Army and CIA with LSD for research.

According to Albarelli, this top secret experiment was directed by the CIA and the US Army's top-secret Special Operations Division (SOD) at Fort Detrick, Maryland, in an effort to find out if LSD could be used as an offensive weapon.

According to Albarelli, the US army also drugged over 5,700 unwitting American servicemen between 1953 and 1965.

Albarelli uncovered the evidence about the LSD experiment on French civilians while researching the bizarre circumstances of Frank Olson's death in 1953. Olson was a high level Fort Detrick scientist, who worked for the Army's top-secret Special Operations Division at Fort Detrick, where he developed bioweapons and experimented with mind-control drugs. However, he had grown increasingly disillusioned, raising serious ethical questions about the work of SOD. There is speculation that during a trip abroad, Olson had discovered the CIA was conducting lethal experiments on prisoners similar to those carried out in wartime Germany and Japan where dissections were performed on live subjects who had been exposed to anthrax. http://www.petersnewyork.com/anthrax080813.html

Olson had been given LSD without his knowledge, whereupon he jumped--or (many believe) he was pushed--to his death out of a closed window on the 10th floor in a NYC hotel room.
http://www.crimemagazine.com/olson.htm
and http://www.crimemagazine.com/olson2.htm
and http://www.frankolsonproject.org/Articles/BaltSun/FatherLost.html

Sixty years later, Fort Detrick is implicated in the mystery surrounding the identity of the perpetrator of the anthrax laced letters which targeted civilians.

Scott Shane, an investigative reporter (formerly with the Baltimore Sun, now with The New York Times) has written numerous reports about highly secret US biowarfare experiments conducted by Fort Detrick scientists. After the anthrax letter attacks killed five civilians, Shane's 2001 article, "Army Harvested Victims' Blood to Boost Anthrax," reported that "the Army collected anthrax from the bodies or blood of workers at Fort Detrick who were accidentally infected with the bacteria."

"The use of human accident victims to boost the killing power of the nation's germ arsenal is a macabre footnote to a top-secret program designed to destroy enemy troops with such exotic weapons as botulism, smallpox, plague and paralytic shellfish poison. The offensive bioweapons program was launched during World War II and ended by President Richard M. Nixon in 1969."
http://www.frankolsonproject.org/Articles/VictimsBlood.html

Shane reported that in 1973 the CIA destroyed all of its records on MKNAOMI (LSD experiments) and its work with Fort Detrick's Special Operations Division.

In 1975 the Washington Post reported that Rockefeller Commission examination of CIA domestic operations uncovered the Frank Olson case. The following day, Dick Cheney, then White House deputy staff director, sent a memo to his boss, then Chief of Staff, Donald Rumsfeld, concerning the need to keep classified information secret. The Olson family would later find the memo at the Ford Presidential Library.

President Gerald Ford invited the Olson family to the White House, apologized to the widow and her children, and promised a full accounting. CIA Director William Colby then invited Olson's widow and her oldest son, Eric, to lunch in his office and gave them a redacted CIA file on Frank Olson.
A wealth of information about the Frank Olson case are available the website of the FrankOlsonProject
http://www.frankolfsonproject.org

In 2004, Shane wrote: "Now, after the Sept. 11 attacks, the anthrax mailings and a steady stream of government warnings on terrorism, the fears of the 1950s have returned -- and the experiments of Fort Detrick's covert bioweapons makers suddenly resonate in a new era. In the biological realm, there is little that any terrorist group could concoct that Fort Detrick's "dirty tricks department," as veterans call it, didn't think up decades ago. But because of the division's scant recordkeeping and the fast-disappearing ranks of its aged scientist-warriors, the knowledge it acquired is being lost to history."

Although more than 50 years separates them, disturbing parallels have been drawn between the "suicides" of two biowarfare scientists at Fort Detrick--Frank Olson and Bruce Ivins.
http://www.petersnewyork.com/anthrax080813.html

On March 15, 2010, Bloomberg News reported that President Obama has threatened to veto legislation authorizing money for US intelligence agencies "if it resulted in more scrutiny and less money for spy operations."

Peter Orszag, director of the White House Office of Management and Budget indicated that: "While not prompting a veto, a provision calling for a new investigation into the 2001 anthrax attacks also is objectionable. A proposed probe by the intelligence agencies' inspector general "would undermine public confidence" in a Federal Bureau of Investigation probe of the attacks "and unfairly cast doubt on its conclusions."

So, the Barak Obama administration is lending its support for covert actions "dirty tricks" prohibited under the US Constitution--much as had been the policy during the Cold War. And, much like the Bush administration, the Obama administration is attempting to prevent Congress from performing its Constitutionally mandated role of providing oversight over the executive branch (and its agencies), by concentrating all power in the hands of the executive.

Is the enshrining of widely condemned Cold War intelligence tactics--such as the covert use of deadly biological weapons on civilian populations, and their subsequent cover-ups--the change that American citizens had fervently sought when voting for Barak Obama?

Contact: Vera Hassner Sharav
veracare@ahrp.org
212-595-8974

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akfiiQUzbMVg#
Bloomberg News

Obama Veto Is Threatened on Intelligence Budget Bill
By Jeff Bliss

March 15 (Bloomberg) -- President Barack Obama probably would veto legislation authorizing the 2010 budget for U.S. intelligence agencies if it resulted in more scrutiny and less money for spy operations, an administration official said.

The White House objects to provisions that would require all members of Senate and House intelligence committees to receive briefings on matters that now are disclosed only to senior congressional leaders known as the "gang of eight," said Peter Orszag, director of the White House Office of Management and Budget.

He wrote the comments in a letter to leaders of the House and Senate Intelligence committees.

The administration additionally opposes letting the General Accountability Office, Congress's auditing arm, conduct investigations of spy activities, he said.

The White House also doesn't want the measure to set aside less money for the 2010 fiscal year, which began Oct. 1, than was already approved in previous spending legislation, Orszag said.

The House version of the measure would authorize $65 million less for the Office of the Director of National Intelligence Dennis Blair. The Senate version would allow some funding only if the FBI completes a report on the plan for its National Security Branch, Orszag said.

"The president's senior advisers would recommend that he veto the bill" unless these aspects of the legislation are revised, he said.

While not prompting a veto, a provision calling for a new investigation into the 2001 anthrax attacks also is objectionable, Orszag said.

Undermine Confidence
A proposed probe by the intelligence agencies' inspector general "would undermine public confidence" in a Federal Bureau of Investigation probe of the attacks "and unfairly cast doubt on its conclusions," Orszag wrote.

On Feb. 19, the Obama administration released a 92-page summary of the FBI probe that said the late Bruce Ivins, a government scientist, was behind the attacks. Lawmakers including Representative Rush Holt, a New Jersey Democrat, have questioned the thoroughness of the investigation.

Anthrax-laced letters sent to lawmakers and news outlets nine years ago infected 22 people, killing five.

The House and Senate are preparing to meet to resolve differences between their versions of the budget legislation.

To contact the reporter on this story: Jeff Bliss in Washington jbliss@bloomberg.net.

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http://www.telegraph.co.uk/news/worldnews/europe/france/7415082/French-bread-spiked-with-LSD-in-CIA-experiment.html
DAILY TELEGRAPH

French Bread Spiked With LSD In CIA Experiment
11 Mar 2010
By Henry Samuel in Paris

A 50-year mystery over the 'cursed bread' of Pont-Saint-Esprit, which left residents suffering hallucinations, has been solved after a writer discovered the US had spiked the bread with LSD as part of an experiment.

An American investigative journalist has uncovered evidence suggesting the CIA peppered local food with the hallucinogenic drug LSD

In 1951, a quiet, picturesque village in southern France was suddenly and mysteriously struck down with mass insanity and hallucinations. At least five people died, dozens were interned in asylums and hundreds afflicted.

For decades it was assumed that the local bread had been unwittingly poisoned with a psychedelic mould. Now, however, an American investigative journalist has uncovered evidence suggesting the CIA peppered local food with the hallucinogenic drug LSD as part of a mind control experiment at the height of the Cold War.

The mystery of Le Pain Maudit (Cursed Bread) still haunts the inhabitants of Pont-Saint-Esprit, in the Gard, southeast France.

On August 16, 1951, the inhabitants were suddenly racked with frightful hallucinations of terrifying beasts and fire.

One man tried to drown himself, screaming that his belly was being eaten by snakes. An 11-year-old tried to strangle his grandmother. Another man shouted: "I am a plane", before jumping out of a second-floor window, breaking his legs. He then got up and carried on for 50 yards. Another saw his heart escaping through his feet and begged a doctor to put it back. Many were taken to the local asylum in strait jackets.

Time magazine wrote at the time: "Among the stricken, delirium rose: patients thrashed wildly on their beds, screaming that red flowers were blossoming from their bodies, that their heads had turned to molten lead."

Eventually, it was determined that the best-known local baker had unwittingly contaminated his flour with ergot, a hallucinogenic mould that infects rye grain. Another theory was the bread had been poisoned with organic mercury.

However, H P Albarelli Jr., an investigative journalist, claims the outbreak resulted from a covert experiment directed by the CIA and the US Army's top-secret Special Operations Division (SOD) at Fort Detrick, Maryland.

The scientists who produced both alternative explanations, he writes, worked for the Swiss-based Sandoz Pharmaceutical Company, which was then secretly supplying both the Army and CIA with LSD.

Mr Albarelli came across CIA documents while investigating the suspicious suicide of Frank Olson, a biochemist working for the SOD who fell from a 13th floor window two years after the Cursed Bread incident. One note transcribes a conversation between a CIA agent and a Sandoz official who mentions the "secret of Pont-Saint-Esprit" and explains that it was not "at all" caused by mould but by diethylamide, the D in LSD.

While compiling his book, A Terrible Mistake: The Murder of Frank Olson and the CIA's Secret Cold War Experiments, Mr Albarelli spoke to former colleagues of Mr Olson, two of whom told him that the Pont-Saint-Esprit incident was part of a mind control experiment run by the CIA and US army.

After the Korean War the Americans launched a vast research programme into the mental manipulation of prisoners and enemy troops.

Scientists at Fort Detrick told him that agents had sprayed LSD into the air and also contaminated "local foot products".

Mr Albarelli said the real "smoking gun" was a White House document sent to members of the Rockefeller Commission formed in 1975 to investigate CIA abuses. It contained the names of a number of French nationals who had been secretly employed by the CIA and made direct reference to the "Pont St. Esprit incident." In its quest to research LSD as an offensive weapon, Mr Albarelli claims, the US army also drugged over 5,700 unwitting American servicemen between 1953 and 1965.

None of his sources would indicate whether the French secret services were aware of the alleged operation. According to US news reports, French intelligence chiefs have demanded the CIA explain itself following the book's revelations. French intelligence officially denies this.

Locals in Pont-Saint-Esprit still want to know why they were hit by such apocalyptic scenes. "At the time people brought up the theory of an experiment aimed at controlling a popular revolt," said Charles Granjoh, 71.

"I almost kicked the bucket," he told the weekly French magazine Les Inrockuptibles. "I'd like to know why."

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http://www.theoneclickgroup.co.uk/documents/ME-CFS_docs/3FrenchGovernmentOfficialQuerytoUSGov1950(2).pdf

Major Diplomatic Scandal Erupts As USA LSD Killer Experiment On 1950's
France Exposed
F. William Engdahl, Author

As Albarelli notes, a Department of Justice website on the dangers of LSD states that in the early 1950s, "the Sandoz Chemical Company went as far as promoting LSD as a potential secret chemical warfare weapon to the US Government. Their main selling point in this was that a small amount in a main water supply or sprayed in the air could disorient and turn psychotic an entire company of soldiers leaving them harmless and unable to fight."

He claims that the CIA entertained a number of proposals from American scientists concerning placing a large amount of LSD into the reservoir of a medium-to-large city, but, according to former agency officials, "the experiment was never approved due to the unexpected number of deaths during the operation in France."

Indeed, Albarelli has discovered once secret FBI documents that reveal that the Fort Detrick's Special Operations Division, a year prior to the Pont St. Esprit experiment, had targeted New York City's subway system for a similar experiment. States an August 1950 bureau memo, "[The] BW [biological warfare] experiments to be conducted by representatives of the Department of the Army in the New York Subway System in September, 1950, have been indefinitely postponed." The memo goes on to cite FBI concerns about "poisoning of food plants" and the "poisoning of the water supply" of large cities in the U.S.

In an interview with this author, Albarelli described how he developed the shocking details of the CIA secret drug programs: "My first tip-off was a 1954 CIA document that detailed an encounter between an official of the Sandoz chemical company (the producers of LSD) and a CIA official in which 'the secret of Pont St. Esprit' was referenced. The Sandoz official went on to say, 'It was not the ergot at all.'"

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It's Just Common Sence

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Rachel Corrie: Justice Delayed Is Justice Denied
theuglytruth.com

I sat down seven years ago this month with my son Adam and told him about the tragic death of a brave American woman named Rachel Corrie. As I informed him who she was, where and how she died, he stared at her two photographs in the paper and said, “Daddy, I will name my first daughter Rachel.” Adam was only nine years old, and I couldn’t have been more proud of him.

Rachel Corrie