Congresspedia Preview: This Week in Congress (Sept. 27 - Oct. 4, 2008)

By Congresspedia assistant editor Avelino Maestas

Monday was supposed to be the day the House approved a $700 billion rescue/bailout plan for the U.S. financial services sector. With Congress set to adjourn after approving the rescue and a few other bills, the week was shaping up to be a quick one.

However, with the House’s defeat of the bailout measure Monday, the legislative calendar has been thrown into upheaval. Rather than vote on tax package, it appears the House will reconvene Thursday in order to give the rescue bill another try.

Confusion seems to be running the day. Democratic leaders in the Senate, including Majority Leader Harry Reid (D-Nev.) and Banking Committee Chairman Sen. Chris Dodd (D-Conn.) have signaled they still want to work towards a vote on the measure. There is no agreement, however, as to what changes should or could be made to the bill, or whether the House or Senate should take up the revised legislation first.

The Senate, meanwhile, is working on a number of legislative goals. That body appears prepared to approve an Amtrak funding and rail-safety bill on Wednesday. Senators are also holding out for House consideration of a comprehensive tax package, though that appears unlikely. A number of popular provisions, including a fix for the alternative minimum tax, renewable energy tax credits, and disaster-relief rebates are in the package.

Also this week, the trial of Alaska Sen. Ted Stevens (R) continues, after the trial judge refused to declare a mistrial or dismiss the criminal case. The defense had sought a dismissal after accusing the prosecution of withholding evidence in the case.


Dear Member of Congress:

I am extremely outraged by Bush's attempt to defraud the American public. Please kill the Bailout. It's nothing more than a Ponzi scheme to enrich Bush's friends and backers. What cupidity-- helping "rescue” his cronies while the homeowners whose homes are being foreclosed, are left twisting in the wind.

Bush lied to us about the Iraq war. Shame on him. He is lying to us now about the need for the bail out. Shame on us if we are again gullible. It is unconscionable and immoral for Congress to replace the lost “play money” of the millionaire and billionaire investors while at the same time refusing to materially and immediately help the hard working American families keep a roof over their heads.

Not only kill the bill, but kill the idea and investigate who is really behind the plot to rob us of not billions, but trillions.

Here's a quote from your fellow Congressman:

“Elsewhere, Rep. Michael Burgess (R-TX) said that the only information he had received about the bailout was what talking points to use on the American people and that he had been thrown out of meetings for not blindly supporting the bill.”

We don't need talking points, we need action points. Bail out home owners who are facing evictions and loss of home equities - which equities have thus far driven the US overconsumption economic engine. If you want to see a real depression in both the economic and psychological sense, just FAIL to help the home owners out of their financial mess.

The huge hedge funds, REIT's and mortgage backed security holders are investors. They can afford to lose their investments -- they took a risk in making their investments. The US Treasury is not an insurance company against risky events happening to rich investors' investments. The cries from Wall Street are way out-shouted by cries from our home owners on a scale of 100 (homeowner) to one (Wall Street). Congress needs to undo the Bear Sterns deal and recover all money and credits GIVEN the failed financial institutions at taxpayers' expense.

I want you and your fellow Congress members to take effective action in favor of the home owners and let us know by email exactly what action your took -- we don't need platitudes -- we need bills passed with money attached, to help the home owner -- not the financial institutions which knowingly took the risks.

Rep. Peter DeFazio has the solution. Congress should enact a transaction tax on each transfer of publicity traded shares on all of the exchanges. Peter suggests 0.02 percent (¼ of one percent or 25 cents on a $100 share). That money would be used to pay off our national debt. Congress should also require and fund very strong oversight regulations of the investment houses. Had such action and oversight occurred, Wall Street investors would not be shedding tears. Since lobbiests for Big Money most likely have been “successful” in defeating any meaningful regulation of the investment industry, now let them reap what they have sown.

James E. Miller, JD

-- The good news is we can see it coming.
By Jim Miller

The wolf pack is not yet at the door, but we can see it coming. The prediction of looming disaster by Richard Heinberg is based on the U.S. Foreign policy which for decades has funneled taxpayer money, labeled as “foreign aid” to wealth U.S. corporations doing business with foreign regimes supported by the U.S. with money and arms. This form of corporate welfare is not without disastrous consequences.

“The US portrays itself as the global cop keeping order in an otherwise chaotic and dangerous world, but in reality America uses its military might primarily to maintain dominance over the world's resources.
This policy is unjust, futile and dangerous. It is futile because the resources in question are limited in extent and their exploitation cannot continue indefinitely and because, by becoming ever more dependent on them, Americas are ensuring their own eventual economic demise.”

Richard Heinberg, The Party's Over – Oil, War and Fate of Industrial Societies, p. 229.

The U.S. Crude oil production peaked in 1976 or so and we've been on the hunt for new sources of crude since them. These sources are now on the global “endangered list”. We launched a take-over of the oil fields of Iraq on the lies fabricated by the Bush administration and presided over by Robert M. Gates who was rewarded with the Secretary of Defense job. This last summer Bush put in place the allocation of oil field concessions to the major world oil companies which had been worked out 30 days after his 2001 inauguration, but put on hold until the Bush administration could find pretext t invade Iraq. 9/11 gave Bush the pretext, although a false one.

George F. Kennan, the American Ambassador to Moscow noted shortly after WWII:

“We have 50 percent of the world's wealth, but only 6.3 percent of its population. In this situation, our real job in the coming period is to devise a pattern of relationship which permits us to maintain this position of disparity. To do so, we have to dispense with all sentimentality – we should cease thinking about human rights, the raising of the living standards and democratization.” Id.

Kennan's remarks are directly out of the play book of the Traverstock Institute, a global consortium of the extremely rich families, tribes and companies, lead by the primogenitor – first born males – of the households. This doctrine holds sway in both Republican and Democratic parties. The “vital U.S. Interests” being “protected” by our military and economic engagement, are the exploitation of the resources in foreign lands by U.S. companies so that they can generate huge profits by exploiting the U.S. population and taxpayers.

Heinberg opines that this policy puts us on a collision course with much of the rest of the world, leading to all-out competition for dwindling resources. Were the U.S. to scale back its military-supported acquisition of foreign resources, our economy would shrink dramatically – and the pack of wolves would be at our door. The issue before us is not whether we want to or should scale back, but when will the scale back begin and how rapidly will it proceed?

This scenario argues for two major courses of action:

1.Scale back our extraction of foreign resources along with scaling back our foreign military aid and bribes to the foreign power governmental, financial and commercial power structures.
2.Develop, at an accelerated pace, our own resources in food, fuel, water and nutritive soils.

While technology can be of some help, our main sources of self-sufficiency will be:

Voluntary reduction of population growth
Development of renewable energy sources with small carbon footprints.
Reduction of travel and transportation by taking vehicles from the road to the recycling yards.
Clustered, affordable, energy efficient housing
Construction of intentional communities where folks “Live where we work, and work where we live.”
A change in mind set from “It's all about me.” to “It's all about us.”
Vastly improved soil management to prevent loss of top soil to the seas and the enrichment of the cropland soils with biochar, organic amendments and addition of soil critters.
Become stewards of the land rather than exploiters.

We now have the means and technology, but barely enough lead time to effect the needed changes in our behavior. If we wait long enough, our land, air and water resources will be greatly impaired, thus increasing the cost of cure, our capital funds will have been exhausted and our population increased. The combined effect is “assured self-destruction”. Instead of a nuclear winter, we will have a never-ending rolling disaster.


Dear Members of Congress:

The current “liquidity crisis” is not what it is touted to be. The article below by “Popi and Tom” plays the music for the “crisis” and the “rescue”. However, the real, underlying economic forces are being orchestrated by members of the Travistock Institute, a world-wide organization of the wealthiest tribes in the world, run exclusively by the male members. My comments are in bold blue [half-way down]. I have also attached my paper on the Travistock Institute. PLEASE, please, read this letter and the paper before Congress falls into the trap set by the members of the Travistock Institute.

--- On Fri, 10/3/08, Popi and Tom
From: Popi and Tom
Subject: Financial and Corporate System Is in Cardiac Arrest
To: "James E. Miller"
Date: Friday, October 3, 2008, 7:58 AM
[Mr. Miller, than you for your letter to the editor in today's
Corvallis Gazette Times. Reading it, we thought you might
like to see today's article by a prominent economist who
has stated that the current Congressional legislation that pertains to
the "bail-out" is "totally flawed." Popi and Tom.]
Financial and Corporate System Is in Cardiac Arrest: The Risk of the
Mother of All Bank Runs
by Nouriel Roubini / Nouriel Roubini's Global EconoMonitor / 3 October 2008

It is now clear that the US financial system - and now even the system
of financing of the corporate sector - is now in cardiac arrest and at
a risk of a systemic financial meltdown. I don't use these words
lightly but at this point we have reached the final 12th step of my
February paper on "The Risk of a Systemic Financial Meltdown: 12 Steps
to a Financial Disaster" (Step 9 or the collapse of the major broker
dealers has already widely occurred).

Yesterday Thursday a senior market practitioner in a major financial
institution wrote to me the following:

"Situation Report: So far as I can tell by working the telephones this

"LIBOR bid only, no offer.
"Commercial paper market shut down, little trading and no issuance.
"Corporations have no access to long or short term credit markets --
hence they face massive rollover problems.
"Brokers are increasingly not dealing with each other.
"Even the inter-bank market is ceasing up.

"This cannot continue for more than a few days. This is the economic
equivalent to cardiac arrest. Then we debated what is necessary to
restart the system.

"I believe that the government will do another Hail Mary pass, with
massive guarantees to the short-term commercial credit system and wide
open short-term lending by the Fed (2 or 3 times expansion of the Fed
balance sheet). If done on a sufficient scale this action will
probably work for a while. But none of these financial measures
affects the accelerating recession -- which will in turn place more
pressure on the financial sector."

Another senior professional in a major global financial institution wrote to

"Today, in our trading room, I could see the manifestations of a
lending freeze, and the funding hiatus for banks and companies, with
libor bid only, the commercial paper market closed in effect, and a
scramble for cash - really really scary.

"Do you think this is treatable without a) a massive coordinated
liquidity boost and easing of monetary policy and b) widespread
nationalisation of some banks, gtess to others AND a good bank/bad
bank policy where some get wiped along with their investors? The
Treasury Tarp plan is an irrelevance if we are at a major funding

And to confirm the near systemic collapse of the system of financing
of both financial firms and corporate firms Warren Buffet declared
yesterday, as reported by Bloomberg:

"the U.S. economy is 'flat on the floor' after a cardiac arrest as
companies struggle to secure funding and unemployment increases.

"'In my adult lifetime I don't think I've ever seen people as
economically, as they are now,' Buffett said today in an interview
with Charlie Rose to be broadcast tonight on PBS. 'The economy is
going to be getting worse for a while.' …The credit freeze is
blood'' from the U.S. economy, Buffett said."

We are indeed at the cardiac arrest stage and at risk of the mother of
all bank and non-ban runs as:

- The run on the shadow banking system is accelerating as: even the
surviving major broker dealers (Morgan Stanley and Goldman Sachs) are
under severe pressure (Morgan losing over a third of its hedge funds
clients); the run on hedge funds is accelerating via massive
redemptions and a roll-off of their overnight repo lines; the money
market funds are experiencing further withdrawals in spite of
government blanket guarantee.

- A silent run on the commercial banks is underway. In Q2 of 2008 the
FDIC reported $4462bn insured domestic deposits out of $7036bn total
domestic deposits; thus, only 63% of domestic deposits are insured.
Thus $ 2574bn of deposits were not insured. Given the risk that many
banks – small, regional and national – may go bust (as even large ones
such as WaMu and Wachovia went recently bust) there is now a silent
run on parts of the banking system. Deposit insurance formally covers
only deposits up to $100000. Thus any individual, small or large
business and/or foreign investor or financial institution with more
than $100000 in a FDIC insured bank is now legitimately concerned
about the safety of its deposits. Even if as likely the deposit
insurance limit will be temporarily raised to $250000 by Congress
there will still be a whopping $1.9 trillion of uninsured deposits (or
73% of total deposits); thus, a huge mass of uninsured deposits will
remain at risk as even small businesses have usually more than $250K
of cash while medium sized and large firms as well as any domestic and
foreign financial institution or investor with exposure to US banks
has average exposure in the millions of dollars. Particularly at risk
are the cross border mostly short term interbank lines of US banks
with their foreign counterparties that are estimated to be close to
$800 billion.

- A run on the short term liabilities of the corporate sector is also
underway as the commercial paper market has effectively shut down with
little trading and no issuance or rollover of such debt while
corporations have no access to long or short term credit markets and
they are therefore facing massive rollover problems (over $500 billion
of rollover of maturing debts in the next 12 months). Indeed, the
market for commercial paper plummeted $94.9 billion to $1.6 trillion
for the week ended Oct. 1 (and down over $200 billion in the last
three weeks). Especially banks and insurers were unable to find buyers
for the short-term debt: financial paper accounted for most of the
decline, plunging $64.9 billion, or 8.7 percent in the last week; but
now even non-financial corporations are also experiencing severe
roll-off in the CP market. Discount rates for investment-grade
non-financial commercial paper spike to 599bp for 60 day maturities.
More companies are borrowing against or tapping their revolving credit
lines. This is largely due to the dislocation caused in the money
markets by the failure of Lehman and the subsequent withdrawals from
money market funds, which are some of the biggest providers of
liquidity in the short term funding/commercial paper. Even the largest
corporations are at severe stress: AT&T last week was forced to rely
on overnight funding for its treasury operations, as lenders were
unwilling to provide more long term financing due to fears in money
market funds over investor redemption. The CEO said "It's loosened up
a bit, but it's day-to-day right now. I mean literally it's day-to-day
in terms of what our access to the capital markets looks like,''
Things are much worse for non-investment grade corporations and for
small and medium sized businesses. As reported today by Bloomberg:
Almost 100 U.S. corporate treasurers gathered for an emergency
conference call yesterday to warn each other that banks are using any
excuse to charge more to renew lines of credit. ``Capital is fleeing
to safety,'' said Edward E. Liebert, treasurer of Rohm & Haas Co.,
took part in the 90-minute call organized by the National Association
of Corporate Treasurers. ``Interbank lending is not free-flowing any
more,'' said Liebert, 56, chairman of the Reston, Virginia-based trade
group. One bank charged a participant in the call 80 basis points to
renew a routine $25 million credit line, according to Liebert, who
wouldn't identify the speaker or the company. Rohm & Haas, based in
Philadelphia and rated BBB by Standard & Poor's, is paying 8 basis
points for a $750 million revolving line of credit provided by 13
banks, the treasurer said. A basis point is 0.01 percentage point. As
the U.S. House of Representatives prepares to vote on a $700 billion
bailout bill passed by the Senate, global credit markets are being
squeezed by banks afraid to lend to each other and to even some
investment-grade corporate clients. Treasurers are struggling to keep
credit lines open so they can pay employees, fund pension benefits and
purchase raw materials. ``The banks are really starting to play
hardball,'' said Jeff Wallace, managing partner at Greenwich Treasury
Advisors, a financial consultant in Boulder, Colorado. ``They don't
want to give out any more money to people because they don't have
enough capital". Banks are demanding renegotiation of interest charges
or lending terms when ``routine'' amendments are requested on lines of
credit, said Thomas C. Deas Jr., treasurer of Philadelphia- based FMC
Corp. and an association board member.

- The money markets and interbank markets have shut down as - despite
the Senate passing the bail-out bill - yesterday USD Overnight Libor
was still at 268bp after reaching an all-time high of 6.88%; the USD
3m Libor-OIS spread widened to record 270 basis points; EUR 3m
LIBOR-OIS spread is at record 130bp; the TED spread is at record
360bps (TED was 11bps one month ago); Money and credit markets are
dysfunctional also in emerging markets ; and agency bond spreads are
also at highs again.

So we are now facing:

- a silent run on the huge mass of uninsured deposits of the banking
system and even a run on some insured deposits are small depositors
are scared;

- a run on most of the shadow banking system: over 300 non bank
mortgage lenders are now bust; the SIVs and conduits are now all bust;
the five major brokers dealers are now bust (Bear and Lehman) or still
under severe stress even after they have been converted into banks
(Merrill, Morgan, Goldman); a run on money market funds; a serious run
on hedge funds; a looming refinancing crisis for private equity firms
and LBOs);

- a run on the short term liabilities of the corporate sector as the
commercial paper market has totally frozen (and experiencing a
roll-off) while access to medium terms and long term financings for
corporations is frozen at a time when hundreds of billions of dollars
of maturing debts need to be rolled over;

- a total seizure of the interbank and money markets.

This is indeed a cardiac arrest for the shadow and non-shadow banking
system and for the system of financing of the corporate sector. The
shutdown of financing for the corporate system is particularly scary:
solvent but illiquid corporations that cannot roll over their maturing
debt may now face massive defaults due to this illiquidity. And if the
financing of the corporate sectors shuts down and remains shut down
the risk of an economic collapse similar to the Great Depression
becomes highly likely.

So what needs to be done? Even several hundreds of billion dollars in
emergency liquidity support to the financial system by the Fed and
other central banks in the last week alone have not been enough to
stop the seizure of liquidity in interbank markets and the shut down
of financing for the corporate sector as counterparty risk is now
extreme (no one trusts any more in this crisis of confidence even the
most reputable and trustworthy financial and corporate

Thus, emergency times where we are at risk of a systemic meltdown
require emergency measures. These include:

- a temporary six-month blanket guarantee on all US deposits (not just
those below $250k) combined with a rapid triage between insolvent
banks that should be quickly closed and distressed but solvent –
conditional on liquidity and capital injections – banks that should be
rescued. To stop the silent run on the banking system you do need now
such blanket guarantee on all (insured and uninsured) deposit
regardless of their size. To minimize lender moral hazard from such
action the blanket guarantee needs to be followed by a very rapid
triage and shut-down of insolvent institutions. Of course the
currently uninsured deposits of such insolvent institutions will need
to be made whole once such banks are shut down (otherwise the run
would continue); once the rotten apples (insolvent banks) that are
infecting the good apples (the solvent banks) are eliminated the
blanket guarantee will be lifted as the uninsured depositors of
surviving banks can be assured that the remaining banks (the good
apples) will not go bust. The extra fiscal cost of bailing out the
uninsured depositors of failed banks can be addressed with FDIC
recapitalization or increase in deposit insurance premia or by
whacking further unsecured creditors of failed banks as the government
should have first claim on the remaining assets of failed banks if
uninsured depositors are made whole in such banks. Anything short of
this blanket guarantee cum triage will not be enough as the silent run
on the banks will soon become a roaring tsunami of an open run.
Solution a la Korea 1997 - where the cross border interbank run was
solved via a bail-in rather than a bailout of the foreign cross border
interbank creditors of Korean banks via an effectively forced
conversion of short term interbank lines into one to three years
claims guaranteed by the Korean government – would be too risky as
such effective capital controls and coercive stretching of maturities
of cross border interbank lines would dramatically scare foreign
investors placing funds in US banks.

- Extension of the emergency liquidity support of the Fed (both TSLF
and PDCF) to a broader range of institutions in the shadow banking
system, especially those directly providing credit to the corporate
sector. The TSLF and PDCF are already available to some non banks (the
broker dealers that are primary dealers of the Fed). But two of such
broker dealers are gone (Bear and Lehman) and the other three are
under stress. Goldman Sachs, Morgan Stanley, the other primary dealers [TRAVISTOCK INSTITUTE members: Read the attached paper]]
and the banks that have access to the TSLF and PDCF (and discount
window) have massively used these facilities in the last few weeks;
but they are hoarding such liquidity and not relending it to other

The Travistock Institute investors have been and are gaining mountains of cash and gold, to purchase assets from “failed” banks and companies at bankruptcy liquidation prices of about ten cents on the dollar. They already have massive reserves of cash and Treasury notes with which to trade to the Treasury and other sellers which now has control of the mortgages owned by the Freddy's. Those mortgages will be sold by Resolution Trust or sold directly by the Freddy's to the Travistock investors at bargain prices. This is what happened in South America during the privitization exploits of the Travistock investors regime. Those efforts were “trial runs” for the take-over of the U.S. Economy.

This process has been carefully thought-out by the Travistock investors for many years. Their system worked in South America in the 70's and 80's and is now being applied to the U.S economy. The financial meltdown is just the first part of the total economic meltdown-- the trigger-- which is being implemented by Morgans, Rockefellers, Fords and other long-time members of the Travistock Institute.

In conducting this “raid” on the U.S. Treasury, they are further bankrupting the U. S. government, making it's debt (all currency is debt) less valuable. By the time the Travistock Institute investors have completed this round, they will own most of the valuable hard assets in the U.S. And will have vaults filled with gold as their 'liquidity”.

Instead of lending money to the needy corporations, and making a six to ten percent return, the Travistock Investors will be buying hugely undervalued property (because of lack of liquidity) at ten cents on the dollar, holding it for a while, then reselling it (after the “liquidity” problem is solved), at 600 percent profit, or so. The buyers will be the mostly the Chinese and the Middle-eastern oil kingdoms who hold massive amounts of Treasury debt instruments which they will be desperate to unload. The Travistock Investors will eventually be in the position of owning most of the working assets in the U.S., thus calling the shots on the U.S. Economy, and massive amounts of Treasury debt instruments, thus calling the shots on the U.S. Government – thus they will have achieved the “One World Order”.

The above analysis is not original with me, but is found in many books and articles about Travistock Institute. Do your own research and you'll come to the same conclusion as I have.] to the thousands of the other members of the shadow banking
system and to the corporate sector as they need such liquidity and
don't trust any counterparty. Thus the transmission mechanism of
credit policy (the non-traditional Fed liquidity lines) is completely
shut down now. Thus, on an emergency basis the TSLF and PDCF need to
be extended to other non-bank financial institutions, especially those
directly providing credit to the corporate sector such as non-bank
finance companies and leasing companies. To ensure that this liquidity
support is effective the Fed may require the borrowing institutions to
maintain their level of exposure to the corporate sector (avoid the
roll off of commercial paper, of short term credits to corporate and
alike). A similar requirement may need to be imposed on all other
financial institutions (banks and non bank primary dealers) that are
now shutting down or rolling off their exposure to the corporate
sector. Of course a crucial triage of the corporate sector is also
necessary: those firms that would have ended up into Chapter 11 or 7
even under less extreme financial conditions should not be rescued and
thus allowed to go into bankruptcy court.

- Some members of the shadow banking system will not receive such
liquidity support of the Fed (hedge funds and private equity funds) as
– fairly or unfairly - there is no political sympathy for such
institutions. This means that the demise of hundreds – and possibly
thousands – of hedge funds will occur as redemptions and roll off of
overnight repo financing for leveraged investments will cause a
massive liquidity – and thus solvency – crisis for such institutions.
If hundreds of smaller hedge funds collapse the systemic consequences
would be limited (even if in the aggregate hedge funds provide
significant financing to the corporate sector). If larger and
systemically important hedge funds were at risk of failing the Fed
will have to engineer a massive private sector bail-in of such hedge
funds (a larger scale rescue a la LTCM) where the prime brokers of
such funds are forced to maintain repo exposure to such funds rather
than be allowed to shut off such exposure. This is a radical
suggestion but the alternative of a Fed liquidity bailout of
systemically important hedge fund is not politically feasible given
the little sympathy that such funds enjoy in Congress. The refinancing
crisis of private equity firms and their LBOs is a longer fuse run as
covenant-lite clause and PIK toggles will postpone such financing
crisis but make the harder the fall as zombie corporations that
postpone restructuring will have a bigger collapse once the financing
crisis eventually occurs. But since many of these LBOs should have
never occurred in the first place any financing crisis for such
buy-outs should be dealt with in bankruptcy court; no public funds
should be used to rescue such LBOs and the reckless private equity
firms that designed such schemes.

- Direct lending to the business sector from the Fed via extension of
the PDCF and TSLF to the non financial corporate sector. This could
include Fed purchases of commercial paper from corporations and other
forms of financing of the short term liabilities of the corporate
sector. This could also include emergency loans from the Small
Business Administration to small businesses secured in appropriate
ways. Given the collapse of the corporate CP market and the banking
system reluctance to provide loans to the corporate sector (credits
lines are being shut down) the only alternative to the Fed becoming
directly the biggest emergency bank for the corporate sector would be
to force the banking system to maintain its exposure to the corporate
sector, possibly in exchange for further Fed provision of liquidity to
the banking system. The former option may be better than the latter to
deal with the looming illiquidity of the corporate sector.

- Have a coordinated 100bps reduction in policy rates by all major
advanced economies central bank and, possibly, even some emerging
market economies central banks.

- Redesign the Treasury TARP rescue plan to make it effective,
efficient and fair: this implies that in addition to the government
purchase of toxic assets, a triage between insolvent and illiquid and
undercapitalized but solvent banks should be made; the debt burden of
household sector should be reduced across the board; and a
recapitalization of solvent bank should be done via public injection
of preferred shares and matching contributions by current shareholders
of the banks.

The suggested policy actions are extreme and radical but the times and
conditions in financial markets and the corporate sector are also
extreme. Thus, to avoid another Great Depression radical and
unorthodox policy action needs to be taken now. This credit crisis is
both a crisis of confidence and illiquidity and a crisis of credit and
solvency. But while the insolvent institutions should go bust we have
now reached a point where many financial institutions and now non
financial firms may become insolvent because of pure illiquidity; and
this would lead to an extremely severe economic contraction similar to
an economic depression rather than a mild recession. At this point we
will experience an ugly recession and an ugly financial and banking
crisis regardless of what we do. What radical policy action can
prevent is preventing what will now be an ugly and nasty two year
recession and financial crisis from turning into a systemic meltdown
and a decade long economic depression. END
Best regards,
Jim Miller
In transition to justice, harmony, productivity, and right living:

“It's understandable, isn't it, that workers who come of age in an autocratic, authoritarian, paternalistic environment become reflections of it. It took some time for Camarão to adjust to the innovating, democratic, participative atmosphere at Semco.”

MAVERICK, The Success Story Behind the Worlds Most Unusual Workplace, Richardo Semler, Warner Books, 1993, p. 180; ISBN 0-446-51696-1


What we are struggling against is far better organized, financed, and disciplined than we are, and is well on its way toward the creation of a global power structure which is privately owned, but operates through governments, the military/police/prisons and financial institutions. The head of this Global Consortium is Travistock Institute, a collection of the world's most powerful men (no women), headquartered in the UK. These men own and/or control vast empires of wealth and property. They control governments and the banking system. They control commerce and currency. They can create wealth or poverty with a stoke of a pen. Travistock Institute is the champion of the “New World Order”.

They finance and order the CIA's covert gang which can install or eliminate a dictator in a foreign country. They decide on when and where wars will be fought and how the spoils will be divided. See John Coleman's book, Conspirators Hierarchy, The Committee of 300, reviews at:

They, along with the oil barons and the “seven sisters” (seven major oil companies) are creating extreme wealth for themselves while creating chaos in the streets for the average citizen. The reasons and the intended results are clearly set forth and document in The Shock Doctrine by Naomi Klein. Watch her series of video clips on YouTube:

Their purpose in creating the chaos in the streets is to reduce the power of the public to organize or resist the taking of their lives and properties. The methods are: Raise prices so as to cause purchasing power of the dollar to drop, thus forcing many small business to fold. By increasing costs, large companies will shed employees and increasingly move their production and purchasing operations to low wage countries. Meanwhile back in the States, jobs disappear, renters are evicted and mortgages are foreclosed. The effect is to create a massive shift in wealth from the individuals to the banks. The banks fail and the Resolution Trust Corporation will auction off 100 million blocks of property to the super rich who will then own most of the world's developed real estate. They can charge lower rents, having bought the real estate for ten cents on the dollar, and thus bankrupt the surviving real estate landlords, who then suffer foreclosure. The cycle of accumulation of wealth by the Travistock men thereby gains more momentum. These events happened during President Regan's administration when there was a massive collapse of the Federally insured savings and loan industry. Today, it is happening again with massive foreclosures on homes, then businesses, followed by bank failures. These events are not accidents. They are planned by the Traverstock boys and executed by their hencemen.

Meanwhile, we have huge concentrations of homeless folks who, deprived of jobs , are at the sub-poverty, near starvation level. Local and state governments sit on their hands, dumbfounded as to what to do. Not only do we have homeless folks, but folks with accumulated health issues which overwhelm the few operating hospitals.

All this while, government officials make pious statements and, as usual, do nothing. The controlled mass media whips up hatred of the homeless and working poor. The “Archie Bunker” mentality is promoted. This growing division accelerates. This Travistock policy is the intended effect of the “divide and conquer” approach. The point is to isolate individuals, families and destroy any attempt they might mount to organize. Without assets, a place to live, a job or source of income, and destitute, they can be easily led and intimidated by the police/military/private army controlled by the Travistock men.

We can now see that the war in Iraq is surely a grab by the seven sisters for huge oil reserves since we have crossed over the peak of the Peak Oil crisis. That plan is just now being executed by Bush/Cheney. The war in Afghanistan now allows the Travistock men to control the heroin trade – which is very lucrative. We used millions of gallons of herbicide (Agent Orange) in Vietnam, but not a drop in Afghanistan to kill the poppy fields. Guess why.

Now, what do we do about Travistock, the seven sisters and our national and state governments? We bypass them. Simple as that. Boycott. Don't spend any of our money or time or assets with them. Kill them off by denying them cash flow. Remember, we, presently, are a cash flow society. We gave up barter and self-sufficiency a hundred years ago with the industrial revolution and its cousin, the fossil fuel-based transportation revolution. Now it is our time to revolt and start the ecovillage (or permaculture or intentional community) revolution. We need our own banking system (member-owned credit unions) and our own medium of exchange (debit cards) and our own currency (suggest we call them “leaves”, “stems”, “roots”).

We need to read deeply in to Spiral Dynamics since that book really explains the various epochs were are experiencing. See: We start by learning all we can from existing permaculture villages and intentional communities. We need to organize and stay focused on creating our own economy within our networked community economies. However, we still need to sell our goods and services into the cities and towns for needed profits. Remember, we will be in a transition mode for probably fifty years or more, so we will have to continue to deal with the those entities which are strictly based on cash flow and not barter. We will do this with great care, doing business only with “green” companies which practice economic justice in the workplace.

We will support and encourage the formation of worker cooperatives. This approach has been very successful in South America. Read Sin Patron published by See also:
Over the course of the last four years, I have accumulated a sizable library of books, articles, webpages and such which I am willing to post on a web site, free for members to use. We need to organize and create a sustained outreach effort.

We need to start our ecovillages as intentional communities. We need our owned land and resources put to good use.

Jim Miller,