Sunday, August 26, 2012


I believe there is a perfect storm brewing and strategic analysts are well aware of it. 

Millions of Americans were impoverished by the financial crisis and still millions more fell out of the middle class. The Labor Department just reported that only 56% of Americans laid off from Jan 2009 to Dec 2011 found jobs by the start of 2012 (Rugaber, 2012). College graduates are moving back home for lack of jobs paying living wages.

Now we are facing global food shortages because of widespread crop failures. People in the developing world will starve. People in America will experience “food insecurity” and malnutrition. See my posts below on looming hunger.

Meanwhile, another financial panic is brewing. The shadow (derivative) banking system has been hit by consecutive crises in 2012 and is in danger of imploding. SEC Chairman Schapiro is publicly warning that the $2.6 trillion in money market funds is unsecured and at risk. The Eurozone continues to shudder.

In November 2008 the Strategic Studies Institute issued a report titled “Known Unknowns: Uncoventional ‘Strategic Shocks’ in Defense Strategy Development.” This report outlined domestic shocks that would warrant military intervention:

Threats of context might include but are not limited to contagious un- and under-governance; civil violence; the swift catastrophic onset of consequential natural, environmental, and/or human disaster; a rapidly expanding and uncontrollable transregional epidemic; and the sudden crippling instability or collapse of a large and important state…

Paths to domestic civil violence that would require the DoD to reorient priorities “to defend basic domestic order and human security” include deployment of “unforeseen economic collapse, loss of functioning political and economic order, purposeful domestic resistance or insurgency,” etc (p. 32). 

We’ve just experienced massive economic collapse and another financial storm may be brewing. We are now seeing the beginnings of the sudden crippling of a large and important state: Japan. Its exports are gradually collapsing in part because the world fears contaminated goods.

We know the military has been planning for civil unrest. The ACLU reports that DoD terrorism training materials currently employed describe public protests as “low level terrorism.” In 2008 the Washington Post reported that the Pentagon plans to have 20,000 uniformed trained troops inside the U.S. by 2011, purportedly to help state and local officials respond to a terrorist attack or some other domestic catastrophe. 

The growing surveillance-industrial complex needs threats to justify its existence. The US Dept. of Homeland Security sees returning veterans "radicalized" by wars in Middle East as sources of domestic unrest (see sources).

The ceaseless expansion of wars by the US points to the fundamental instability at the heart of the country's governance. It is an instability veering towards madness.

There is a perfect storm brewing. Its winds are thrashing all in their path. Will the full strength of the hurricane be unleashed?


ACLU. “ACLU Challenges Defense Department Personnel Policy To Regard Lawful Protests As ‘Low-Level Terrorism.’”ACLU. 10 June 2009. 24 June 2009
Bank of International Settlements (2012, June). Amounts of Outstanding Over-the-counter derivatives. BIS Quarterly Review,

Freier, Nathan. “Known Unknowns: Unconventional ‘Strategic Shocks’ in Defense Strategy Development.” Strategic Studies Institute November 2008. 12 December 2008

Hsu, Spencer S., and Ann S. Tyson. “Pentagon to Detail Troops to Bolster Domestic Security.” The Washington Post 1 December 2008: A1.

Japan exports slump on Europe, China; raise global demand worries. Reuters.

Rugaber, C. (2012, Aug 25). Laid-off workers find work at less pay. The Arizona Republic, D1. 

Schapiro, Mary. (2012, August 22). Statement of SEC Chairman Mary L. Schapiro on Money Market Fund Reform

U.S. Department of Homeland Security. “Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment” U.S. Department of Homeland Security 7 April 2009. 3 May 2009 


No net for money markets

Killed by the financial crisis

Hunger in the future

Hungry kids in American Schools

On looming financial crisis


Regulators to Ease a Rule on Derivatives Dealers. The New York Times. By BEN PROTESS. Feb 17, 2012.
[excerpted] "As federal regulators put the finishing touches on an overhaul of the $700 trillion derivatives market, a major provision has been tempered in the face of industry pressure.

On Wednesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission are expected to approve a rule that would exempt broad swaths of energy companies, hedge funds and banks from oversight. Firms would not face scrutiny if they annually arrange less than $8 billion worth of swaps, the derivative contracts tied to interest rates and commodities like oil and gas.
The threshold is a not-insignificant sum. By one limited set of regulatory data, 85 percent of companies would not be subject to oversight...
Under the rule, companies can exclude the swaps they use to hedge their business against risk like, say, interest rate fluctuations. And the rule would apply only to a company’s swaps transactions, so firms would not need to count their other varieties of derivatives, like forwards and options. The Commodity Futures Trading Commission also scrapped a strict provision that would have prevented companies that are exempt from the rules from arranging more than 20 swap contracts in one year, regardless of the dollar amount.

As a result, some large banks and other players are expected to avoid regulatory scrutiny in swaps, based on data from the Office of the Comptroller of the Currency."

1 comment:

  1. Majia, I think you have hit on key points, now, not just the lying of the nuke industry.

    For those with the following skills, I have a base camp setup. We have full water, sewer, and energy systems in place.

    shooting, dressing deer, dressing wounds, growing crops.


Note: Only a member of this blog may post a comment.