Monthly Archives: October 2012

Former CIA Clare Lopez on the Benghazi Gun Running

Jerusalem Post: Interview with Clare M. Lopez, V-P of the Intelligence Summit, and Professor at the Centre for Counterintelligence and Security Studies

GA: Do you believe that this was a cover up from the very beginning?
CL: Oh yes, the gun running of course, that was the thing.
GA: That was my next question; do you believe that this administration is smuggling weapons to Al-Qaeda?
CL: Well, not… I mean… The short answer is yes. They were working with the very same Al-Qaeda linked relationships in Libya to gather up and buy back and collect weapons from Gaddafi’s stock pile that were missing from the revolution in Libya last year and what it looks like is that they were shipping them onwards to Syria.
GA: Some of those weapons have already shown up in the Sinai on the southern border of Israel.
CL: Yes, they’ve gone to the Sinai and they’ve also gone to Mali and to other places in western Africa and they’ve also gone to Syria. That was the operation, that’s what they were doing.

GA: If the truth of all this ever does come out, what do you think should happen to all those involved? And when I say involved that includes President Obama.
CL: A complete investigation. Congressional hearings and an investigation.


Currency Wars and Gold

A currency war in the simplest form is basically when there is too much debt and not enough growth.
– James Rickards, Currency Wars: The Making of the Next Global Crisis

Currency wars are real wars. But they are waged with currencies, stocks, bonds, derivatives, commodities, rather than guns and other kinetic weapons.

In a currency war, countries try to manipulate their own currency to gain an unfair trade advantage. There is a currency war when one country tries to devalue its currency relative to others in order to promote exports and create jobs.

Let’s take an example. Some countries manufacture jet aircraft. The United States has Boeing, Europe has Airbus, Brazil has Embraer and there are a few others. Now imagine you are Thailand. You want to buy aircrafts for your airline industry, but you don’t make them yourself. You have to go shopping. But where are you going to go? The theory behind the practive of currency war is that if the US cheapen the Dollar, it will make the Boeing aircraft a little more attractive than an Airbus or an Embraer. Boeing would sell more planes and create more jobs.

But once you go down that road, you quickly invite RETALIATION. In return, other countries will devalue their own currency too. There are unintended consequences. It creates a spiral of retaliations that ends up with a contraction in world trade, a GLOBAL DEFLATION. And in this context, the temptation to steal growth from your trading partners by trashing your own currency becomes overwhelming.

Suppose you are a Chinese manufacturer. You sell goods to the United States. They pay you in dollars and you take those dollars back to China. When you exchange those dollars into Yuans (¥), that’s going to drive UP the value of the Yuan. But instead of that happening, the value of the Yuan stays the SAME… You do exchange those dollars for Yuans, but the Chinese central bank prints Yuans TO BUY those dollars, so as to keep their currency where it is. By doing this however, China is importing INFLATION from abroad.

The USA are also doing the same thing. They are cheapening the Dollar to increase exports, by making export prices less expensive. The problem here is that a country like China or the US does not just export, it also IMPORTS. The USA for instance import more than it exports. So if the Federal Reserve cheapens the Dollar, the price of those imports is going to go UP, which will bring inflation into the United States from abroad. The American people will be paying much more for iPads and iPhones and flat-screen TVs and French wine and vacations in Italy and clothes made in Korea. It brings inflation into a country, and that’s why a currency war is always a losing game.

And when you devaluate your currency that way, it generates retaliation from other countries. China reacted to the devaluation of the Dollar by trashing the Yuan in return. (Weaker countries who can not do that develop measures of capital control, such as freezing the assets of foreign investors for extended periods, which can trigger trade wars.)

Growth (gross domestic product) = consumption + investment + government spending + net exports

There is too much debt around the world now: sovereign debt, corporate debt, consumer debt, individual debt, student loans, car loans, etc. Too much debt that can’t be paid, and won’t EVER be paid.

Individuals can default, corporations can go bankrupt, but governments usually don’t. The US government is not going to default on its $16 trillion debt. It will just print the money, and pay the debt with severely devalued, virtually worthless “money.” Governments who print their own currency don’t have to default. They can just inflate their way out of their debt.

The US governement and the Federal Reserve want higher inflation in the USA because the dominant force in the global economy nowadays is deflation. Widespread debts lead to generalized deflation.

So to fight deflation and to boost exports, the USA began in 2009 to “print” a lot of money. A LOT. By “printing money,” we mean that the Federal Reserve buys Treasury bonds from the market in exchange of dollars. The Fed credits bank accounts electronically. We are talking about computerized entries into the Federal Reserve’s ledger. The Fed literally types in an addition of X billion or Y trillion dollars into its balance sheet, creating dollars out of thin air that exist as zeroes and ones on a computer server, and then use those new dollars to purchase US Treasury bonds. In this way, by INFLATING the supply of dollars, the Fed devaluates the Dollar. It has debased the US dollar by roughly one half the total GDP in less than four years.

But why are not the prices out of control in the USA yet, despite the Fed having increased the money supply by several trillion dollars?

First, a lot of inflation (US dollars) went to China.

Second, the VELOCITY of money is very low now. Velocity is the turnover of money, how quickly money turns over: do I take it and spend it, or do I stick it in the bank.

The Fed can increase or decrease the money supply, but it can not control how it is being spent or saved.

Well, if I take my friends out to dinner and you know, the restaurant owner uses the money to buy some new equipment or whatever, that money starts to have velocity, which means it’s getting used; but if I take it and stick it in the bank, or if I take it and buy gold, that money has a velocity of zero because it’s not being used.

The Fed can not control how money is being spent. It’s behavioral, it depends on how I feel and how you feel and how everybody feels. And frozen money does not affect prices.

The government has to affect behavior in order to control the velocity of money, which means they have to make the people worry about inflation, or scare you into spending your money. They think that by holding “interest rates” low, they can encourage inflation. And they bet on the people, spooked by inflation, will get out and buy cars or houses before the prices go up. The US government also tries to increase “lending” because it wants to get inflation ABOVE the interest rates. If borrowing rates are two percent and inflation is four percent, that’s a NEGATIVE interest rate. Which means that you can pay back the loan in cheaper money. So it’s actually not only a low interest rate, it’s FREE MONEY. The bank is PAYING you to borrow because you can pay them back in cheaper dollars, in dollars of lesser purchasing power.

And that is precicely what is happening. The US and many other countries want to do pay back their debt in a severely devalued currency. It’s called “monetizing” the debt.

They’re doing so by cutting interest rates to near zero, and by printing money. Printing money de facto creates negative interest rates because the value of the dollar is eroded by this inflation of the money supply.

In this world of negative interest rates, we need to FIGHT inflation, in order to preserve our wealth. If you put your money in a bank at zero or one percent interest rate, and you get 3, 4, 5 percent inflation, the value of your money is going to be cut in half in 15 years. Savers or investors are actually in a difficult position because the Fed is trying to drive the economy off of consumption, rather than investment.

With investment, you get growth when you make the investment. And then you get MORE growth down the road because you improve productivity as a result of that investment. Not so with consumption. Consumption is a one time thing. You buy something, you consume it. But investment pays off year after year, after year.

Higher interest rates encourage people to save. And that attracts investment from around the world. And that can drive growth. But in context of negative interet rates, many savers think they have no choice but to go into the stock market or the property market, which are very risky and volatile assets. They feel they are being forced to spend, to consume, to gamble, rather than to save.

But we the people can RESIST by buying gold or anything of physical value that can not be trashed by massive inflation, in order to store and preserve our wealth.

Because inflation is lethal for a lot of unprepared folks. You need to be prepared. There are winners and losers. The losers are the savers and retirees, people on a pension. They are going to see their wealth erode every year quickly.. The winners are banks, hedge funds, speculators, people who got into gold. Because of that, gold is nowhere near a bubble. People are underinvested in gold. Institutional allocations are anemic. They are investing a lot in stocks, in bonds, in hedge funds and so forth, and a skinny little one percent in gold. If institutions just doubled their allocation from say one-and-a-half percent to say three percent, there’s not enough gold in the world at these prices to absorb that kind of inflow.
Gold is volatile though. But it preserves your pruchasing power in a world of high inflation and negative interest rate.

There WAS a Rescue Operation on the Way to Benghazi

Did Obama refuse to grant CROSS-BORDER AUTHORITY to Secretary of Defense Panetta in the Oval Office at the 5h00 p.m. meeting on September the 11th 2012? If so, on what basis? It was about 10h30 p.m. in Benghazi, and the attack was far from being over.

We know for sure that there was a military rescue operation IN PROGRESS, triggered almost as soon as Ambassor Stevens was in danger. We do know, because when an Ambassador is in danger or missing, the default order is an IMMEDIATE rescue. Once the alarm is sent from Benghazi, dozens of Head Quarters are notified and are in the loop in real time WITHOUT WAITING FOR ORDERS. The very minute they see that the consulate is under attack — when critical incident ALARM messages start ringing — military steps happen on AUTOPILOT in real time, regulated by *standing* orders and *standard* operating procedures. And the rescue operation becomes TOP TOP TOP priority.

So why did they turned back?

The Quick Reaction Force in Tripoli, up to AFRICOM (the Africa Command) and EUCOM (the Europe Command) began planning and executing Rescue Operations, including getting AIR support over Benghazi as soon as possible.
 Everybody in the Navy and the Air Force chain of command swang into a crisis contingency plan mode. 
What destroyers are closest? Blackhawks? Marines? Delta Force happens to be training in Germany? Get them moving RIGHT NOW. Where is closest? The Sigonella Air base in Sicily, Italy, just 480 miles away. It’s NATO, no permission needed, JUST FLY.

At the lieutenant colonel level, and at the colonel level of all the different Head Quarters, at the State Department, everybody was saying something like, “Let’s GO GO GO! Let’s get boots on the ground, planes in air. Let’s kick these savages’ asses, and get our Ambassador and our people.
Airborne tankers are coming into position. U.S. Navy ships are sailing in position to “lilypad” helicopters for long over-water flights. Special Operation Force forces in Sigonella are going over their gear for different contingencies, as officers keep checking in again and again with operational commanders.

THERE WAS a big rescue air armada flying toward Libya right away after the alarm got to the United-States Garrisan Stuttgart and AFRICOM. And yet it stopped. Yet it STOPPED. WHY?

The rescue air-armada of C-17sC-130s and Special Operations Forces helicopters like MH-47 Chinooks and Pave Hawks cannot proceed DIRECTLY to Libya without CROSS-BORDER AUTHORITY being granted by the President, so they had to land at the Sigonella Air Base, in Sicily.
Crossing an international border with a military force, without permission of the nation invaded, is ONLY up to the President. Always, and every time.
“Hold in place, no rescue yet. We can’t find the President,” say the colonels to the majors and captains.

Every Special Operations Force officer and Operations officer all the way up to General Ham of AFRICOM is pondering this very question.
Some sort of authorization would have been sent from President Obama to Secretary of Defense Leon Panetta, to Secretary of State Hillary Clinton, to Chairman of the Joint Chiefs of Staff Martin Dempsey, to General Ham at AFRICOM in Stuttgart, Germany, who was in charge of the forces staging in Sigonella.

All of this would have beed LOGGED. General Ham either has this authorization, or not. The authority would be given verbally to General Ham, but it would immediately be backed up in OFFICAL message traffic for the official record. And without it, General Ham would not be able to send the rescue air-armada into Libyan air space.

Obama needs to respond to this.  Did he or did he not grant CROSS-BORDER AUTHORITY?

The real critical issue is the president says that he immediately ordered all available assets to help. The military would have put out an order from the president. There’s no question about that… What I’m asking is, “Show us the order!
– former Assistant Secretary of Defense Bing West

“Give me control of a nation’s money and I care not who makes the laws”- Amschel Rothschild

There is a problem with the actual banking paradigm. Banks are required to keep from zero percent to ten percent of customer deposits on hand as reserves, and can loan the rest of the money out.
This banking paradigm is called fractional reserve banking. If a customer deposits $100 in Bank A, $90 is lent out and $10 remains as reserve (and this is the CONSERVATIVE version). Whoever borrowed the $90 then deposits it in Bank B. Bank B then lends out $81 and keeps $9 in reserve. And so on, and so forth. If you go through ten cycles this way, you end up with the original $100 being leveraged into $686.19 of deposits backed by only the original $100. This is what they call “MONEY CREATION.” With a 10% reserve requirement on a $100 initial deposit sum, the limit terminates at $1000. With a 5% reserve requirement on $100, the limit terminates at $2000. With a zero percent reserve requirement, the limit is obviously infinite.

A reasonable, non-zero reserve ratio is workable, but only so long as banks are required to carry one dollar of reserves for every one dollar they lend out. These reserves can be either in the form of the bank’s own capital, OR in the form of FAIRLY VALUED booking of the assets purchased with the loan. All unsecured lending must stop. This means that all home mortgages must be marked-to-market every single day, and if the home is worth less than the loan outstanding, the bank must post its own capital against the shortfall. This also means that credit cards, which are totally unsecured because they are used to purchase mostly non-assets, such as meals, gasoline, vacations and pure service commodities, must be backed by bank capital dollar-for-dollar. The bank could sell bonds to raise capital if it wants to make unsecured loans and then would be arbitraging the spread between the interest rate it must pay on the bonds and the interest rate plus default risk on the credit cards.

In this way, the worst that could possibly happen, namely every unsecured credit line totally defaulting, would result in the bank owners and investors losing their money – but the customer deposits would be safe because all of the loans against hard assets, which would be properly valued and marked-to-market, could be sold to other banks in the market, and that revenue would fully cover all customer deposits.

If you only loan against actual asset values there is no systemic risk possible; if you get in trouble you simply sell down the assets until you no longer are.  Since you’ve never “created money” there’s no systemic risk that can arise. Ever.

In not posting capital against unsecured loans, the banks are indeed naked short selling our currency – and it matters not whether that currency is gold-backed or not. The credit card customer is promising to pay back (deliver) a loan with money that they do not have and does not exist, and they won’t be able to borrow. So, the bank and the customer together are colluding in the naked short sale. The long on the other side is the citizen and taxpayer who will subsidize the inevitable “need” to print more dollars to “bail out” both the bank and the customer. Taxes will be raised and the currency will be further debased, causing price inflation – a one-two punch to the citizen. This is EXACTLY what is happening today.

That is functionally the precise same act as a naked short. You put into circulation that which does not exist “on the come” that it will in the future. In the case of stock that is naked shorted you’re counterfeiting the stock of the corporation in question – you’re representing that you have something to deliver (the stock) but only the company in question has the right to create (by issuance in exchange for capital) that stock.

In the case of naked credit creation unbacked by an asset the bank is effectively naked shorting the currency, betting “on the come” that production will in the future cause the government to issue actual currency with which to make the bet good!

Banks are both writing massive quantities of unsecured loans and doing nothing on their side to balance the ledger, AND they are failing to honestly and realistically book the values of their hard-asset loans. The big banks are still booking home values at their original purchase price – not the fair market value today. Given the housing bubble, most mortgages today are underwater and are worth far, far less than the principal balance to say nothing of interest. This is why the major banks are not just totally insolvent, they are insolvent multiple times over. If the banks actually had to comply with the law, the entire system would implode into a singularity tomorrow.
Continue reading


The key to Benghazi is the 5pm DC-time meeting in the Oval Office with Secretary of Defense Panetta and Vice-President Biden. Obama could not have said only “Do all that you can.” It is not enough. Panetta would return with something like, “So, you are granting the military CROSS-BORDER AUTHORITY to conduct the rescue mission?”
It’s a yes-no question on CROSS-BORDER AUTHORITY. Did he give it, or not?
CROSS-BORDER AUTHORITY is a scepter of authority that only the President carries, nobody else.
Panetta would not be told, “Check with my politicos.” Panetta would not be left with ambiguous orders. He would not walk out of the Oval Office without explicit instructions, explicity granting or not granting CROSS-BORDER AUTHORITY.

And there is a record of it. These guys go everywhere with aides. At the very least formal level, Panetta, to protect himself, walks out of the Oval Office and tells his aides and the generals flocking to him for instructions, “The President has granted you CROSS-BORDER AUTHORITY. Save our consulate.”

This waving of the CROSS-BORDER AUTHORITY scepter is a historic, critical moment. There is NO ambiguity about it. It is given, or withheld. No middle ground.
Crossing an international border with a military force, without permission of the nation invaded, is ONLY up to the President. Always, and every time.

We still don’t Know if the Predators were Armed

We still do not know if the Predators were armed over Benghazi, or if there was an AC-130 gunship. We still do not know if the two Predators over Benghazi came from outside of Libya, or from inside. We do not know about the Rule of Engagement, if they were determining the drones would take off armed or unarmed. We do know however that the CIA might have Rule of Engagement to state that Predator recon flights are unarmed, unless the National Command Authority orders otherwise.

In regards to the InfraRed Laser Aiming Device used by ex-SEAL Ty Woods on the CIA compound rooftop, it might have been a typical Dual Beam Aiming Laser type device on his personnal M-4. Not necessarily a ground laser designator, synched with the weapon system/designator of a Predator drone or a gunship. In conjunction with a Night Observation Device (such as a PVS-14), the former SEAL could have used his Dual Beam Aiming Laser to make accurate shots, and to designate a target such as a mortar team.

Was Ambassador Stevens Running Guns and Armaments?

The Obama Régime has been running guns and armaments and ammunitions, including including heat-seeking shoulder-launched surface-to-air missiles designed to shoot down commercial jetliners, to the Muslim Brotherhood. The American Diplomatic Mission in Libya was trying to buy back man-portable anti-aircraft missiles that the Obama Régime sold or gave to the Muslim Brotherhood and then went “missing.” They were also trying to buy back weapons previously owned by the Gaddafi Régime that spread everywhere after the “revolution.”

Peter Bouckaert, Human Rights Watch emergencies director, told CNN he has seen the same pattern in armories looted elsewhere in Libya, noting that “in every city we arrive, the first thing to disappear are the surface-to-air missiles.” He said such missiles can fetch many thousands of dollars on the black market. “We are talking about some 20,000 surface-to-air missiles in all of Libya, and I’ve seen cars packed with them.” he said.
[…] The United States has spent hundreds of millions of dollars trying to buy them back […]
“The rebels came from all over the western mountains, and they just took what they wanted,” said Riyad, a supervisor of the ruined arsenal’s small contingent of rebel guards.

report by the UN Support Mission in Libya (PDF) said that Gaddafi had accumulated a large stockpile of MANPADs, and that although thousands were “destroyed” during the 2011 military intervention in Libya, there were “increasing concerns over the looting and likely proliferation of these portable defence systems, as well as munitions and mines, highlighting the potential risk to local and regional stability.”

As soon as islamic organizations outside Libya realized that there were Manpads available, they tried to get them.

When the Obama Régime discovered that thousands of MANPADs had “disappeared” and were “on the loose in Libya” it turned around and stuck a LOT of cash in the CIA outpost-cum-“safehouse” in order to BUY those weapons back. This CIA “safehouse” containing weapons (assault rifles, machine guns, rocket-propelled grenades), a lot of money, and a case files containing the names of the folks who were assisting the USA in the recovery of the missing weapons and of the “looted Libyan arms” was obviously a VERY high-value target. Two SEALs died on its roof.

Ambassador Chris Stevens and the CIA were somehow, some way running (or heavily involved in) this armament pipeline..

one of Stevens’ main missions in Libya was to facilitate the transfer of much of Gadhafi’s military equipment, including the deadly SA-7 [MANPADs] to Islamists and other al Qaeda-affiliated groups fighting the Assad Regime in Syria.
Aaron Klein states that Stevens routinely used our Benghazi consulate (mission) to coordinate the Turkish, Saudi Arabian and Qatari governments’ support for insurgencies throughout the Middle East.
Stevens played a “central role in recruiting Islamic jihadists to fight the Assad Regime in Syria.”
Fox News tracked down a ship carrying arms from Libya to a Turkish port, just 35 miles from the Syrian border. Arms were going to Turkey from Libya. Ambasador Stevens was apparently trying to transfer weapons away from Libyan jihadists to Syrian jihadists.

This is Fast-and-Furious to arm al-Qaeda and the Muslim Brotherhood instead of Mexican drug cartels. Ghadaffi was overthrown to create a chaotic, destabilized Libya as the doorway to the Caliphate to get the arms in for distribution to Syria, Yemen, Jordan, Egypt and eventually Saudi Arabia.


No Cross-Border Authorisation Needed?

“For the United States military to say that they were 480 miles away and they couldn’t do anything, and they couldn’t move one aircraft in 8 hours? I’d say it’s time to relieve a lot of people in the chain of command… If your ambassador has been either killed or captured, and is missing at the hands of terrorists, you do not ask any country for “Mother may I?” before you come across the border to save your own.”
-Former Assistant Defense Secretary Bing West to FOX News

I think he is wrong. Because the military CAN NOT cross an international border without explicit orders from the President. It’s a big “red line.”
The President alone can grant cross-border authority. Otherwise, the entire rescue that is already in progress must stop in its tracks. Ships must loiter on station, and planes must be redirected to an air base to await the President’s decision on granting CROSS BORDER AUTHORITY. If it never comes, the assets in Behghazi must rely only on assets already “in country” in Libya.
So if Obama said “No outside military action,”then THAT IS IT. Nobody in the chain of command below him can countermand his “standing orders” not to send military forces from outside of Libya into Libyan air space.