Politics,Economics and The Struggle To Survive In America

The time is now, the revolution is upon us. Our childrens, children need our resolve in this fight. Take the blinders off and get out of the"Matrix". By JJP 

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Russia To Cut Dependence On U.S. Dollar, Payment Systems

Posted by Jerrald J President on September 18, 2017 at 10:55 AM Comments comments (0)

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  The collapse of the "Petro-Dollar" is here, get ready America. The illusion of wealth and power are becoming a "REALITY"! By JJP

   

Russia To Cut Dependence On U.S. Dollar, Payment Systems

  Russia will speed up work on reducing its dependence on U.S. payment systems and the dollar as a settling currency in response to U.S. sanctions, Deputy Foreign Minister Sergei Ryabkov said on Monday.

 

Quoted by Reuters, Ryabkov said that "we will of course intensify work related to import substitution, reduction of dependence on U.S. payment systems, on the dollar as a settling currency and so on. It is becoming a vital need." The reason for that is that "the US is using its dominating role in the monetary and financial system to impose pressure on foreign business, including Russian companies.”

 

As a reminder, three years ago the MasterCard payment system stopped serving clients of seven Russian banks without warning after Washington imposed its first set of sanctions on Moscow in 2014. In response, the Russian government ordered the creation of a national payment system. With the support of the country's banking system, the Mir charge card was introduced in 2015, although there is no information on what its adoption rate has been in the following years.

 

As we discussed previously, as part of the latest set of Russian sanctions the US has imposed new restrictions on the Russian banking and energy sectors: the ban targets already sanctioned Russian firms, limiting the financing period for them to 14 and 60 days. Additionally, the new law will punish individuals for investing more than $5 million a year or $1 million at a time in Russian energy export pipeline projects or providing such enterprises with services, technology or information support, a provision that has drawn strong condemnation from Washington's European allies.

 

US energy companies criticized the tightening of already existing sanctions as damaging for business. At the same time, the European Union expressed concerns the new penalties may undermine the bloc’s energy security. European Commission head Jean-Claude Juncker pledged to prepare an “adequate” response and “within days” if the measure hurt the interests of European companies. So far Europe has to elaborate on what, if any, retaliation to the sanctions it will unveil.

 

 


Venezuela publishes oil prices in Chinese currency to shun U.S. dollar

Posted by Jerrald J President on September 18, 2017 at 10:45 AM Comments comments (0)

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  The stars are in place for the United States to conduct yet another coup. You think this is a game? By JJP

 

Venezuela publishes oil prices in Chinese currency to shun U.S. dollar

 

CARACAS (Reuters) - Venezuela published the price of its oil and fuel in Chinese currency on Friday in what it called an effort to free the socialist-run country from the “tyranny of the dollar,” echoing a plan recently announced by President Nicolas Maduro.

 

Maduro last week said his government would shun the dollar after the United States announced sanctions that blocked certain financial dealings with Venezuela on accusations that the ruling Socialist Party is undermining democracy.

 

The global oil industry overwhelmingly uses the dollar for pricing of products.

 

A weekly Oil Ministry bulletin published on Friday listed September prices in yuan, while including prices from previous weeks and months in dollars.

 

“This format is the result of the announcement made on Sept 7 by the president ... that Venezuela will implement new strategies to free the country from the tyranny of the dollar,” the ministry wrote in a statement released after the bulletin.

 

Venezuela’s yuan-based prices appear to be the result of multiplying dollar prices by the dollar/yuan exchange rate.

 

The price per barrel for the week ending Friday was 306.26 yuan, equivalent to $46.76 based on the exchange rate listed in a footnote. That is up from the previous week’s price of 300.91 yuan, or $46.15 based on the corresponding exchange rate.

 

The ministry did not respond to an email seeking additional details.

 

“Nobody is changing contracts for now,” said one oil trader consulted about the issue who asked not to be identified.

 

“Oil is a commodity that is traded almost exclusive in dollars. PDVSA’s debts, for example, are still denominated in dollars ... and that’s how they’ll have to pay bondholders,” the trader said, referring to the state oil company.

 

Venezuela’s Dicom currency system on Wednesday temporarily suspended the sale of dollars in order to incorporate other currencies.

 

Late socialist leader Hugo Chavez during his 14-year rule repeatedly vowed to back away from the dollar, which he said was being printed indiscriminately and was destined to lose its place as the world’s dominant currency.

 

But Venezuela remains dependent on the greenback given that it conducts ample commercial trade with the United States both through exports of oil and imports of U.S. food and consumer products.

 

Sanctions by the administration of President Donald Trump blocked U.S. citizens from buying new debt from Venezuela or its state oil company, but did not directly interrupt import and export operations.


US Threatens To Cut Off China From SWIFT If It Violates North Korea Sanctions

Posted by Jerrald J President on September 18, 2017 at 10:40 AM Comments comments (0)

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Introduction to SWIFT

SWIFT is a global member-owned cooperative and the world’s leading provider of secure financial messaging services.

 

We provide our community with a platform for messaging, standards for communicating and we offer products and services to facilitate access and integration; identification, analysis and regulatory compliance.

 

Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories. Whilst SWIFT does not hold funds or manage accounts on behalf of customers, we enable our global community of users to communicate securely, exchanging standardised financial messages in a reliable way, thereby facilitating global and local financial flows, and supporting trade and commerce all around the world.

 

As their trusted provider, we relentlessly pursue operational excellence and continually seek ways to lower costs, reduce risks and eliminate operational inefficiencies. Our products and services support our community’s access and integration, business intelligence, reference data and financial crime compliance needs.

 

SWIFT also brings the financial community together – at global, regional and local levels – to shape market practice, define standards and debate issues of mutual interest or concern.

 

Headquartered in Belgium, SWIFT’s international governance and oversight reinforces the neutral, global character of its cooperative structure. SWIFT’s global office network ensures an active presence in all the major financial centres.


US Threatens To Cut Off China From SWIFT If It Violates North Korea Sanctions

  In an unexpectedly strong diplomatic escalation, one day after China agreed to vote alongside the US (and Russia) during Monday's United National Security Council vote in passing the watered down North Korea sanctions, the US warned that if China were to violate or fail to comply with the newly imposed sanctions against Kim's regime, it could cut off Beijing’s access to both the US financial system as well as the "international dollar system."

 

Speaking at CNBC's Delivering Alpha conference on Tuesday, Steven Mnuchin said that China had agreed to "historic" North Korean sanctions during Monday's United Nations vote. "We worked very closely with the U.N. I'm very pleased with the resolution that was just passed. This is some of the strongest items. We now have more tools in our toolbox, and we will continue to use them and put additional sanctions on North Korea until they stop this behavior."

 

In response, Andrew Ross Sorkin countered that "we haven't been able to move the needle on China, which seems to be the real mover on this, in terms of being able to apply the real pressure. What do you think the issue is? What is the problem?"

 

The stunner was revealed in Mnuchin's answer: "I think we have absolutely moved the needle on China. I think what they agreed to yesterday was historic. I'd also say I put sanctions on a major Chinese bank. That's the first time that's ever been done. And if China doesn't follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system. And that's quite meaningful."

 


And to underscore his point, the Treasury Secretary also said that "in North Korea, economic warfare works. I made it clear that the President was strongly considering and we sent a message that anybody that wanted to trade with North Korea, we would consider them not trading with us. We can put on economic sanctions to stop people trading."

 

 

In other words, to force compliance with the North Korean sanctions, Mnuchin threatened Beijing with not only trade war, but also a lock out from the dollar system, i.e. SWIFT, something the US did back in 2014 and 2015 when it blocked off several Russian banks as relations between the US and Russia imploded.

 

Of course, whether the US would be willing to go so far as to use the nuclear option, and pull the dollar plug on its biggest trade partner, in the process immediately unleashing an economic depression domestically and globally is a different matter. So far Washington has been reluctant to impose economic sanctions on China over concerns of possible retaliatory measures from Beijing and the potentially catastrophic consequences for the global economy. Washington runs a $350 billion annual trade deficit with Beijing, while the PBOC also holds over $1 trillion in US debt.

 

Ironically, the biggest hurdle to the implementation of the just passed sanctions may be the president himself. “We think it’s just another very small step, not a big deal,” Trump told reporters at the start of a meeting with Malaysian Prime Minister Najib Razak. "I don’t know if it has any impact, but certainly it was nice to get a 15-to-nothing vote, but those sanctions are nothing compared to what ultimately will have to happen,” said Trump who has vowed not to allow North Korea to develop a nuclear ballistic missile capable of hitting the United States.

 

Separately, at a hearing of the House Foreign Affairs Committee on Tuesday, Republican Chairman Ed Royce said the U.S. should target major Chinese banks, including Agricultural Bank of China Ltd. and China Merchants Bank Co., for aiding Kim’s regime. Russia also came in for criticism. Assistant Treasury Secretary Marshall Billingslea said in prepared remarks to the committee that North Korean bank representatives “operate in Russia in flagrant disregard of the very resolutions adopted by Russia at the UN.”

 

While China and Russia supported the latest UN sanctions, officials made clear they were troubled by Haley’s comments in the Security Council that the U.S. would act alone if Kim’s regime didn’t stop testing missiles and bombs. They emphasized the world body’s resolution also emphasized the importance of resolving the crisis through negotiations. “The Chinese side will never allow conflict or war on the peninsula,” Foreign Ministry spokesman Geng Shuang said in a statement on Tuesday.

 

In a soundbite late on Tuesday, Japan's Nikkei quoted prime minister Shinzo Abe who said that "in the end, [the North Korean] problems should be solved through diplomatic dialogue," adding that Japan will "work together with the international community to apply maximum pressure, so that North Korea commits to perfect, verifiable and irreversible denuclearization." For Japan to engage with the regime, he stressed it would have to be "on the condition that North Korea commits to" this complete denuclearization."

 

Which, of course, won't happen: “sanctions of any kind are useless and ineffective,” Russian President Vladimir Putin told reporters earlier this month at a summit in Xiamen, China. “They’ll eat grass, but they won’t abandon their [nuclear] program unless they feel secure.”

 

Predictably, North Korea's Foreign Ministry slammed the sanctions saying it “condemns in the strongest terms and categorically rejects” the United Nations adding more sanctions, North Korea’s state-run KCNA reported on Wednesday morning. Instead, North Korea warned it “will redouble efforts to increase its strength” as it seeks to establish “practical equilibrium” with U.S.

 

And so, not only is the entire geopolitical circle jerk back at square one, but the ball is again back in North Korea's court, while the decision on whether or not to launch another ICBM really depends on whether China will give it the quiet go ahead; a China which responds notoriously poorly to being threatened in the global financial arena, like for example when the US threatens to kick it out of the global dollar system...


Wisconsin Legislature passes $3 billion Foxconn incentive package, sends to Walker

Posted by Jerrald J President on September 15, 2017 at 8:20 PM Comments comments (0)

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  This is "Tax Payer" money going to a "Foreign" company. Welfare on a global scale! By JJP


 Wisconsin Legislature passes $3 billion Foxconn incentive package, sends to Walker

The Wisconsin Assembly sent a $3 billion incentive package for Taiwan-based Foxconn to Gov. Scott Walker on Thursday, signing off on a deal to lure the electronics giant to the state with the biggest subsidy to a foreign company in U.S. history.

 

The bill approved on a bipartisan 64-31 vote would make $2.85 billion available to Foxconn Technology Group in cash payments if it invests $10 billion and hires 13,000 workers. The Senate approved the proposal Tuesday.

The Republican governor was in South Korea on a trade mission at the time of the vote but pledged to sign the incentives package into law soon.

 

Walker, who negotiated the deal and is its lead champion, joined President Donald Trump in announcing Foxconn's plans to build in Wisconsin at a White House event in July, heralding it as a game-changer for American manufacturing.

 

Assembly Democrats, who didn't have the votes to stop it, slammed the proposal Thursday as being unfairly rigged to benefit Foxconn at the expense of taxpayers. But Republican Assembly Speaker Robin Vos defended it as an unprecedented opportunity for the state and country.

 

"What's rigged is the deal for the taxpayer, the workers, the families and ultimately those of us who have the good foresight to realize when a good deal is put in front of you," Vos said.

 

Foxconn is the largest contract manufacturer of electronics, best known for making iPhones, but with a long list of customers including Sony Corp., Dell and BlackBerry. The Wisconsin plant would construct liquid crystal display panels for televisions, computers and other uses.

 

Wisconsin won Foxconn factory, but Illinois won't lose out

The total incentive package is 10 times larger than anything ever approved in Wisconsin and would be the biggest state subsidy to a foreign company in the United States.

 

Foxconn issued an unsigned statement thanking Wisconsin, saying the incentives "will help us move forward with our plans to build the state-of-the-art advanced display manufacturing campus." It also pledged to make extensive use of the supply chain in the state to make Wisconsin "a center of worldwide high-tech manufacturing."

 

Critics have warned that there aren't enough protections for taxpayers to recover payments to Foxconn if it automates production and fires workers. They've also said more needs to be done to guarantee that Wisconsin workers and businesses get preference during the construction phase of the plant, and once it's up and running. Foxconn has said it hopes to open the plant in 2020 with 3,000 workers, but that the workforce could grow to 13,000.

 

The Assembly passed the bill with all Republicans and four Democrats in support. Two Republicans joined all other Democrats against.

 

Wisconsin's offer to Foxconn increased substantially, handwritten deal shows

Opponents objected to a provision that would allow the Wisconsin Supreme Court to take appeals of certain lawsuits related to Foxconn, skipping the appeals court. No other business in the state is provided such an expedited route to the Supreme Court.

 

Under the bill, the company would have 15 years to access the maximum $2.85 billion in cash payments tied to meeting the investment and hiring numbers. They can also receive $150 million in sales tax exemptions on construction equipment.

 

The Walker administration is charged with negotiating minimum hiring numbers to trigger the payments in the contract with Foxconn which has not been finalized. Foxconn has also not selected the exact location for the plant, but it has focused on property in Racine County in between Milwaukee and Chicago.

 

Democrats have also raised alarms about exemptions under the bill that waive requirements for Foxconn to first develop an environmental impact statement before constructing what could be a 20-million-square-foot campus. Foxconn would also be allowed to build in wetland and waterways.

 

Copyright © 2017, Chicago Tribune


Median Wealth Of Black And Latino Families Could Hit Zero By The Middle Of The Century

Posted by Jerrald J President on September 15, 2017 at 6:50 PM Comments comments (0)

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" From 1983 and 2013, the wealth of median Black and Latino households decreased by 75% (from $6,800 to $1,700) and 50% (from $4,000 to $2,000), respectively, while median White household wealth rose by 14% (from $102,200 to $116,800)". Stop allowing Entertainer's and Athletes to make you think we've made it! By JJP

  Median Wealth Of Black And Latino Families Could Hit Zero By The Middle Of The Century

  Income inequality has been getting worse, which suggests that the wealthiest, typically meaning Whites, are getting wealthier. According to a new study, the imbalance will shift so far that median Black and Latino households will lose the little relative wealth they have by about the time people of color form a majority of households in the U.S.

 

 

 

By 2053, Black households will have a median wealth of zero. It will take Latino households another 20 years to drop to the same level, according to an analysis by non-profits Prosperity Now (formerly CFED) and the Institute for Policy Studies.

 

As I’ve mentioned before, income inequality often captures attention, but wealth inequality is even more insidious.

 

 

 

That wealth becomes the head start in a race, like setting putting someone on the putative starting line and another, on the 90 meter mark in a 100-meter dash. By talking almost completely about income inequality, the country essentially pretends that a problem made over decades can be addressed on a single year’s scale. It can’t mathematically work.

 

Talking of wealth inequality in terms of a footrace is unfair. The race is over in a matter of seconds; only a few if someone is that far down the line. Wealth inequality lasts generations — forever, for all practical considerations.

 

 

 

One problem is that when wealth inequality increases much faster than the economy, the extra wealth has to come from somewhere. Someone loses it. I understand people don’t like hearing this, but it comes down to basic arithmetic. If the economy grows at 2%, for example, and someone’s share grows at 5%, the extra is something that otherwise would have gone to another.

 

The two factors — wealth transfer and the advantages wealth provides — come together in ugly ways. We typically describe middle class status in terms of income. But, if you change the definition to wealth, meaning you’d need between $68,000 and $204,000 in household wealth — middle quintile White households have nearly 8 times as much wealth as median Black households and 10 times as much as Latino households. Black and Latino families now have to earn two to three times as much as White families to catch up.

 

And then the time value of wealth comes into play:

 

Between 1983 and 2013, the wealth of median Black and Latino households decreased by 75% (from $6,800 to $1,700) and 50% (from $4,000 to $2,000), respectively, while median White household wealth rose by 14% (from $102,200 to $116,800). If current trends continue, by 2020 median Black and Latino households stand to lose nearly 18% and 12%, respectively, of the wealth they held in 2013. In that same timeframe, median White household wealth would see an increase of 3%. Put differently, in just under four years from now,median White households are projected to own 86 and 68 times more wealth than Black and Latino households, respectively.

 

These trends over time show the power of compound interest, whether positive or negative. Should the trends continue as they are, in absence of anything to reduce their power or even increase it, Black and Latino households will have nothing other than current income to call their own.

 

 

 

A number of practices contribute to and support these trends. One is the tax code. Many popular practices, like deductions for mortgage interest and lower taxes on capital gains, benefit Whites far more than Blacks and Latinos.

 

 

Another has been allowing predatory practices, like usurious interest rates by payday loan companies that make it difficult to impossible for people to get ahead. Again, these practices, focusing on the poor, have an outsized impact on Blacks and Latinos. The Consumer Financial Protection Bureau has begun to address these issues, but many want to kill off the agency.

 

Without programs specifically targeting people who don’t have wealth and need to build it, the country could become even more polarized by wealth inequality. Aside from its obvious inherent issues, such a direction could undermine the economy. If the median wealth of a majority of Americans is zero, there will be little to drive the economy as a whole, and that is a bad prospect for everyone.


The demise of the dollar

Posted by Jerrald J President on September 12, 2017 at 6:35 PM Comments comments (0)

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  Smoke and Mirror's or Prophecy? By JJP

 

The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

 

 

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

 

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

 

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

 

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

 

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

 

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

 

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

 

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

 

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

 

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

 

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

 

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

 

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

 

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.


China sees new world order with oil benchmark backed by gold

Posted by Jerrald J President on September 12, 2017 at 6:30 PM Comments comments (0)

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It's not a coincidence America has "Strategically" positined itself on the Korean peninsula. Iraq, Libya tried this and you know what the outcome was. By JJP

China sees new world order with oil benchmark backed by gold

Yuan-denominated contract will let exporters circumvent US dollar


 DENPASAR, Indonesia -- China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry.

 

The contract could become the most important Asia-based crude oil benchmark, given that China is the world's biggest oil importer. Crude oil is usually priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars.

 

China's move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong.

 

"The rules of the global oil game may begin to change enormously," said Luke Gromen, founder of U.S.-based macroeconomic research company FFTT.

 

The Shanghai International Energy Exchange has started to train potential users and is carrying out systems tests following substantial preparations in June and July. This will be China's first commodities futures contract open to foreign companies such as investment funds, trading houses and petroleum companies.

 

Most of China's crude imports, which averaged around 7.6 million barrels a day in 2016, are bought on long-term contracts between China's major oil companies and foreign national oil companies. Deals also take place between Chinese majors and independent Chinese refiners, and between foreign oil majors and global trading companies.

 

Alan Bannister, Asia director of S&P Global Platts, an energy information provider, said that the active involvement of Chinese independent refiners over the last few years "has created a more diverse marketplace of participants domestically in China, creating an environment in which a crude futures contract is more likely to succeed."

 

China has long wanted to reduce the dominance of the U.S. dollar in the commodities markets. Yuan-denominated gold futures have been traded on the Shanghai Gold Exchange since April 2016, and the exchange is planning to launch the product in Budapest later this year.

 

Yuan-denominated gold contracts were also launched in Hong Kong in July -- after two unsuccessful earlier attempts -- as China seeks to internationalize its currency. The contracts have been moderately successful.

 

The existence of yuan-backed oil and gold futures means that users will have the option of being paid in physical gold, said Alasdair Macleod, head of research at Goldmoney, a gold-based financial services company based in Toronto. "It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either," Macleod said.

 

Yuan-denominated gold contracts have significant implications, especially for countries like Russia and Iran, Qatar and Venezuela, said Louis-Vincent Gave, chief executive of Gavekal Research, a Hong Kong-based financial research company.

 

These countries would be less vulnerable to Washington's use of the dollar as a "soft weapon," if they should fall foul of U.S. foreign policy, he said. "By creating a gold contract settled in renminbi [an alternative name for the yuan], Russia may now sell oil to China for renminbi, then take whatever excess currency it earns to buy gold in Hong Kong. As a result, Russia does not have to buy Chinese assets or switch the proceeds into dollars," said Gave.

 

Grant Williams, an adviser to Vulpes Investment Management, a Singapore-based hedge fund sponsor, said he expects most oil producers to be happy to exchange their oil reserves for gold. "It's a transfer of holding their assets in black liquid to yellow metal. It's a strategic move swapping oil for gold, rather than for U.S. Treasuries, which can be printed out of thin air," he said.

 

Market share

 

China has been indicating to producers that those happy to sell to them in yuan will benefit from more business. Producers that will not sell to China in yuan will lose market share.

 

Saudi Arabia, a U.S. ally, is a case in point. China proposed pricing oil in yuan to Saudi Arabia in late July, according to Chinese media. It is unclear if Saudi Arabia will yield to its biggest customer, but Beijing has been reducing Saudi Arabia's share of its total imports, which fell from 25% in 2008 to 15% in 2016.

 

Chinese oil imports rose 13.8% year-on-year during the first half of 2017, but supplies from Saudi Arabia inched up just 1% year-on-year. Over the same timeframe, Russian oil shipments jumped 11%, making Russia China's top supplier. Angola, which made the yuan its second legal currency in 2015, leapfrogged Saudi Arabia into second spot with an increase of 22% in oil exports to China in the same period.

 

If Saudi Arabia accepts yuan settlement for oil, Gave said, "this would go down like a lead balloon in Washington, where the U.S. Treasury would see this as a threat to the dollar's hegemony... and it is unlikely the U.S. would continue to approve modern weapon sales to Saudi and the embedded protection of the House of Saud [the kingdom's ruling family] that comes with them."

 

The alternative for Saudi Arabia is equally unappetizing. "Getting boxed out of the Chinese market will increasingly mean having to dump excess oil inventories on the global stage, thereby ensuring a sustained low price for oil," said Gave.

 

But the kingdom is finding other ways to get in with China. On Aug. 24, Saudi Vice Minister of Economy and Planning Mohammed al-Tuwaijri, told a conference in Jeddah that the government was looking at the possibility of issuing a yuan-denominated bond. Saudi Arabia and China have also agreed to establish a $20 billion joint investment fund.

 

Furthermore, the two countries could cement their relationship if China were to take a cornerstone investment in the planned initial public offering of a 5% state in Saudi Aramco, Saudi Arabia's national oil company. The IPO is expected to be the largest ever, although details on the listing venue and valuation are yet scant.

 

If China were to buy into Saudi Aramco the pricing of Saudi oil could shift from U.S. dollars to yuan, said Macleod. Crucially, "if China can tie in Aramco, with Russia, Iran et al, she will have a degree of influence over nearly 40% of global production, and will be able to progress her desire to exclude dollars for yuan," he said.

 

"What is interesting is that China's leadership originally planned to clean up the markets next year, but brought it forward to this year. One interpretation of that change is that they have brought forward the day when they pay for oil in yuan," said Simon Hunt, a strategic adviser to international investors on the Chinese economy and geopolitics.

 

China is also making efforts to set other commodity benchmarks, such as gas and copper, as Beijing seeks to transform the yuan into the natural trading currency for Asia and emerging markets.

 

Yuan oil futures are expected to attract interest from investors and funds, while state-backed oil majors, such as PetroChina and China Petroleum & Chemical (Sinopec) will provide liquidity to ensure trade. Locally registered entities of JPMorgan, a U.S. bank, and UBS, a Swiss bank, are among the first to have gained approval to trade the contract. But it is understood that the market will be also open to retail investors.


Americans Are Poorly Informed About Basic Constitutional Provisions

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    I know your not surprised America? By JJP

   

 

Americans Are Poorly Informed About Basic Constitutional Provisions


 

Many Americans are poorly informed about basic constitutional provisions, according to a new national survey by the Annenberg Public Policy Center.

 

The annual Annenberg Constitution Day Civics Survey finds that:

 

More than half of Americans (53 percent) incorrectly think it is accurate to say that immigrants who are here illegally do not have any rights under the U.S. Constitution;

More than a third of those surveyed (37 percent) can’t name any of the rights guaranteed under the First Amendment;

Only a quarter of Americans (26 percent) can name all three branches of government.

“Protecting the rights guaranteed by the Constitution presupposes that we know what they are. The fact that many don’t is worrisome,” said Kathleen Hall Jamieson, director of the Annenberg Public Policy Center (APPC) of the University of Pennsylvania. “These results emphasize the need for high-quality civics education in the schools and for press reporting that underscores the existence of constitutional protections.”

 

Illegal immigration and constitutional rights

 

The APPC survey, conducted Aug. 9-13 among 1,013 adults in the United States, finds that 53 percent think that people who are here illegally do not have any rights under the Constitution. That incorrect belief is especially strong among self-identified political conservatives – 67 percent think it is accurate, compared with 48 percent of moderates and 46 percent of liberals.

 

In fact, immigrants who are in the United States illegally share some constitutional protections with U.S. citizens. More than a century ago, in Yick Wo v. Hopkins (1886), a case involving an undocumented Chinese immigrant, the Supreme Court ruled that non-citizens were entitled to due process rights under the 14th Amendment’s equal protection clause. (For more on Yick Wo, see this video on Annenberg Classroom’s website.)

 

Most respondents, though not all, know that under the Constitution, U.S. citizens who are atheists or Muslim have the same rights as all other citizens. Seventy-nine percent of respondents know it is accurate to say that U.S. citizens who are atheists have the same rights as other citizens, and 76 percent know it is accurate to say that citizens who are Muslim have the same rights as other citizens.

 

What does the First Amendment say?

 

Nearly half of those surveyed (48 percent) say that freedom of speech is a right guaranteed by the First Amendment. But, unprompted, 37 percent could not name any First Amendment rights. And far fewer people could name the other First Amendment rights: 15 percent of respondents say freedom of religion; 14 percent say freedom of the press; 10 percent say the right of assembly; and only 3 percent say the right to petition the government.

 

The First Amendment reads:

 

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

 

Contrary to the First Amendment, 39 percent of Americans support allowing Congress to stop the news media from reporting on any issue of national security without government approval. That was essentially unchanged from last year. But the survey, which followed a year of attacks on the news media, found less opposition to prior restraint (49 percent) than in 2016 (55 percent).

 

Many don’t know the branches of government

 

Only 26 percent of respondents can name the three branches of government (executive, judicial, and legislative), the same result as last year. People who identified themselves as conservatives were significantly more likely to name all three branches correctly than liberals and moderates. The 26 percent total was down significantly from APPC’s first survey on this question, in 2011, when 38 percent could name all three.

 

In the current survey, 33 percent could not name any of the three branches, the same as in 2011.

 

The phone survey, conducted for APPC by the research firm SSRS, has a margin of error of ±3.7 percent. For more on the methodology and questions click here.

 

Constitution Day and the Civics Renewal Network

 

APPC’s Annenberg Classroom, presented by the Leonore Annenberg Institute for Civics, has created a series of free, award-winning videos for educators and the public, including Yick Wo and the Equal Protection Clause, The Role of the Courts, and Freedom of the Press: New York Times v. United States.

 

Annenberg Classroom has joined with 30 other nonpartisan organizations to create the Civics Renewal Network, which offers free, high-quality educational materials online. Among CRN’s partners are the Library of Congress, the National Archives, the National Constitution Center, the U.S. Courts, the NEH’s EDSITEment Project and iCivics.

 

Constitution Day (Sept. 17) will be celebrated Monday, Sept. 18. To mark it, the U.S. Courts are holding naturalization ceremonies nationwide and educators will lead students in the “Preamble Challenge,” celebrating the Preamble to the Constitution.


Wells Fargo uncovers more fake accounts in drawn-out scandal

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  What do you think would have happened if the name was Jamal or Latasha? Remeber, Wells Fargo created 3.5Million fake bank accounts and not 1 person went to "JAIL"! Gangster Party... By JJP


Wells Fargo uncovers more fake accounts in drawn-out scandal

  (Reuters) - Wells Fargo & Co hiked the tally of accounts that were potentially opened without customers’ knowledge by over a million on Thursday after an expanded review of improper sales practices.

 

The revelation is the latest chapter in a year-long scandal at the San Francisco bank and puts it back in the crosshairs of lawmakers as they prepare to return to Congress next week.

 

Democratic U.S. Senator Elizabeth Warren, a leading voice on consumer finance issues, tweeted “Unbelievable” after Wells Fargo said it had found an additional 1.4 million accounts were potentially opened without permission, bringing the total estimate to about 3.5 million.

 

She repeated her call for the bank’s top brass to appear before the Senate Banking Committee.

 

“Every new disclosure seems to expand the scope of the bank’s troubles, which creates the perception that the scandal is getting bigger rather than going away,” said Jaret Seiberg, an analyst with Cowen Washington Research Group.

 

“We believe the political and regulatory spotlight will continue to shine brightly on Wells Fargo. That is likely to limit the ability of the bank to grow aggressively.”

 

The scandal over phony accounts first erupted last September, when Wells Fargo reached a $190 million settlement with regulators over the matter. That led to the departure of its veteran chief executive John Stumpf, a divisive shareholder meeting and disclosures of other sales practice problems ranging from unwanted auto insurance to improper mortgage fees.

 

Once lauded on Wall Street for its ability to sell more products to customers than any of its big-bank rivals, Tim Sloan, who took over as chief executive last year, faces a long slog to revive the bank’s reputation.

 

The problems reported on Thursday came after a third party hired by Wells Fargo examined accounts stemming back to 2009, a broader timeframe than a review conducted last year. The bank previously disclosed the expanded review in a quarterly securities filing, but not its results.

 

FILE PHOTO - A Wells Fargo Bank is shown in Charlotte, North Carolina, U.S. on September 26, 2016. REUTERS/Mike Blake/File Photo

Wells will return $2.8 million to customers who appear to have had consumer and small business accounts opened without permission. It also uncovered about 528,000 potentially unauthorized online bill pay enrollments, a newly disclosed problem, and will return $910,000 to customers who were affected.

 

The bank also faces multiple regulatory probes and private lawsuits.

 

A pending settlement for one private lawsuit led Wells to review accounts dating back to 2002, Sloan said on a conference call with reporters.

 

“With the expanded analysis now complete, we will focus on remediation and making things right for our customers,” he said.

 

The unauthorized online billpay fees were small, Sloan said, often $1. They resulted from branch employees setting up accounts in order to achieve product sales goals that have since been eliminated. The bank has refunded these amounts.

 

Wells Fargo shares were down 0.8 percent in early afternoon trading, underperforming the S&P Financial which was flat.

 

The additional refunds amount to a tiny fraction of the bank’s quarterly earnings, but investors who spoke to Reuters in recent weeks said they were less worried about the hard costs than a degradation of the bank’s once-pristine brand.

 

They also expressed concern about Wells becoming an easy political target going into the midterm elections.

 

Warren Buffett, who runs Wells Fargo’s largest investor, Berkshire Hathaway Inc, said this week he still considers it a great bank despite selling some of his holdings. But he acknowledged the bank will likely find more problems now that it is shining a light in dark places.

 

“There’s never just one cockroach in the kitchen,” he said on CNBC.


Canada Reportedly Wants the U.S. to Scrap Its Right-to-Work Laws as Part of a New NAFTA Deal

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  Why do you think states located in the south are Right To Work and other states are enacting Right To Work legislation. The Lewis Powell memohttp://law2.wlu.edu/deptimages/Powell%20Archives/PowellMemorandumTypescript.pdf) is now Standard Operating Procedure in America. By JJP 


Canada Reportedly Wants the U.S. to Scrap Its Right-to-Work Laws as Part of a New NAFTA Deal


  Canadians are apparently sick of competing with nonunionized foreign workers South of the border. According to the Globe & Mail, the country’s negotiating team is asking the United States to scrap its anti-union right-to-work laws as part of an updated North American Free Trade Agreement, presumably in order to prevent poorly paid Americans from undercutting organized Canadian labor on wages. Obviously, this is not what the Trump administration had in mind when it demanded our neighbors return to NAFTA’s negotiating table.

 

Right-to-work statutes allow employees to opt out of paying fees to the unions that represent them in collective bargaining. These laws are frequently blamed for draining organized labor of financial resources and have likely contributed to the decline of union organizing over the past several decades. States are permitted to enact the laws under the Taft-Hartley Act of 1947, a landmark piece of union-busting legislation that congressional Republicans passed over President Harry Truman’s veto. Canada, which like the U.S. is seeking to strengthen NAFTA’s labor protections overall, would reportedly appreciate it if Washington would pass new federal legislation banning right-to-work provisions.

 

 

“I’m very pleased with the position the Canadian government is taking on labour standards,” Jerry Dias, president of Canada’s largest private-sector union, told reporters outside of this weekend’s NAFTA talks. “Canada’s got two problems: The low wage rates in Mexico and the right-to-work states in the United States.”

 

To be clear, there is zero chance that a Republican White House would agree to do away with right-to-work laws as part of a trade deal. Breaking the power of organized labor is a key piece of the party’s long-term agenda, and relinquishing that goal in order to appease our lefty neighbors would cause an uproar among the GOP donor class. Canada almost surely knows this, and is staking out an extreme negotiating position in order to signal that it’s treating these talks seriously and is prepared to ask for major concessions.

 

 

It’s also an ironic way to throw the Trump administration’s protectionist rhetoric back in its face, which seems like part of the point.

 

Our president of course loves to complain about cheap foreign labor undercutting American factory workers. And now and then, he has a point. Mexico, for instance, more or less lacks independent labor unions, and partly as a result, wages there have barely risen over the past 15 years, even as auto manufacturing has flourished within the country’s industrializing north. For this reason, the fact that the original NAFTA lacked basic, enforceable labor standards cutting across the U.S., Canada, and Mexico is widely looked at as a mistake, which both the Trump administration and Canada are looking to rectify in the current renegotiations. The Trump administration’s official NAFTA wish list includes enshrining the “Freedom of association and the effective recognition of the right to collective bargaining” among all three countries.

 

But Canada’s right-to-work jab is a reminder that, for all our talk of raising the rest of the world to our own labor standards, America’s record on workers’ rights isn’t exactly pristine, and that much of the developed world may see a nonunion factory in Alabama much the way we see car plants in San Luis Potosi. In other words, we’re not always the ones being taken advantage of.

 

 


Strategies for Improving the U.S. Payment System Federal Reserve Next Steps in the Payments Improvement Journey

Posted by Jerrald J President on September 12, 2017 at 1:45 PM Comments comments (0)

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  The Cashless Society is on the way America. By JJP

 

 

Strategies for Improving the U.S. Payment System

Federal Reserve Next Steps in the

Payments Improvement Journey


Two and a half years ago, the Federal Reserve issued a call to action in the Strategies for Improving the U.S.

Payment System (Strategies) paper, asking stakeholders to come together in pursuit of a better payment system

for the future.1 The call was answered, with hundreds of organizations and individuals collaborating to support

progress on achieving the five desired outcomes shared by the Federal Reserve and industry for speed, security,

efficiency, international payments and collaboration outlined in the paper. These desired outcomes continue to

reflect the shared vision of the Federal Reserve and a broad spectrum of payment system stakeholders in the

United States. The Federal Reserve recognizes the tremendous contributions of leadership, time, and effort to

date, and seeks continued stakeholder commitment to the desired outcomes that remain the guiding

framework for U.S. payment system improvements.


Most homes in Tropical Storm Harvey's path don't have flood insurance

Posted by Jerrald J President on August 29, 2017 at 9:25 PM Comments comments (0)

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   More than 80 percent of the citizens of Houston do not have Flood Insurance. Do you really think Senator Ted Cruz or President Donald Trump will help the citizens of Houston, Texas? Think again, they are going to do what America always does. Help the "RICH"!!! By JJP


Most homes in Tropical Storm Harvey's path don't have flood insurance

Most homes in the path of Tropical Storm Harvey don't have the flood insurance that owners would need to rebuild if their homes are damaged or destroyed.

Standard homeowners insurance policies cover damage from the high winds that are associated with a hurricane, but they don't cover damage from rain or flood waters, such as storm surges or overflowing rivers. But the National Hurricane Center is forecasting up to 35 inches of rain in some locations by the middle of next week due to the storm, which could bring flooding far beyond the Texas coastline.

Figures from the National Flood Insurance Program show that only 15% of homes in Harris Country, which includes Houston, have flood insurance, while only 20% of homes in Nueces County, where the coastal city of Corpus Christie is located, are covered. Coverage rates are higher in the area's flood zones, but many homes still aren't covered.

"If the homeowner is not required to buy flood insurance by their mortgage lender, they often chose not to," said Michael Barry, spokesman for the Insurance Information Institute, a consumer education group funded by the insurance industry. He adds that there is a widely-held misconception that homeowners who aren't in floodplains can't get coverage. "Almost all homeowners can get coverage," he said.

Related: Hurricane Harvey could hit the Texas economy

The federal flood insurance program is facing its own challenges, beyond the payments it might have to make for Harvey. The problem is that the premiums that homeowners pay simply don't cover the cost of the claims that have to be paid out.

"The National Flood Insurance Program's exposure to major floods is on the rise, as evidenced by Hurricanes Katrina and Sandy," the program director Roy Wright said earlier this year in a blog post. "These events generated claims of approximately $24.6 billion, leaving the NFIP $23 billion in debt to the U.S. Treasury."

Bills have been introduced in Congress to close the funding gap by hiking premiums. But lawmakers worry about angering homeowners who are required to buy flood insurance, and that expensive policies would only discourage other people from buying them.


Trump Rescinds Obama Ban on Giving Military Gear to Police

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  Now who do you think this message being relayed to? It's definetly not for the individuals holding torches and brandishing weapons in "Charlottesville, Virginia". It's for the young men and women whose ancestors where "SLAVES"! The modern day slave patrols are ready to capture those descendants once more! Mr Trump is fulfilling his promise of " Making America What It Always Has Been" A MYTH OF LIES! By JJP

Trump Rescinds Obama Ban on Giving Military Gear to Police

  

 U.S. President Donald Trump undid another Obama-era initiative, lifting his predecessor’s ban on giving local police departments military-grade equipment like armored vehicles, search-and-rescue equipment and grenade launchers.

 

An executive order that Trump issued Monday rescinds restrictions put in place in May 2015. That move by former President Barack Obama followed a national uproar over the police shooting of an unarmed man in Ferguson, Missouri, in August 2014, and the local police department’s response to protests and rioting by deploying armored trucks and military weaponry.

 

Attorney General Jeff Sessions led the charge to reverse the ban and announced the executive order earlier Monday during a speech in Nashville, Tennessee.

 

“We will not put superficial concerns above public safety,” Sessions said, according to a copy of his prepared remarks. “The executive order the president will sign today will ensure that you can get the lifesaving gear that you need to do your job and send a strong message that we will not allow criminal activity, violence, and lawlessness to become the new normal. And we will save taxpayer money in the meantime.”

Surplus Military Gear

 

Trump’s order restores a program created in the 1990s to recycle Defense Department gear no longer needed by the military, including clothing, small arms, ammunition, armored vehicles, riot shields, rescue equipment and computers. The so-called 1033 program has resulted "in the transfer of more than $5.4 billion in surplus military gear to state, local, and tribal law enforcement agencies," according to the Justice Department statement.

 

State and local police also will be able to acquire military-grade equipment through other federal programs under the new executive order. The Justice Department said the equipment has been used to save lives, protect law enforcement officers and improve community relations.

 

"Much of the equipment provided through the 1033 program is entirely defensive in nature, such as armored vehicles that protect officers in active shooter scenarios and other dangerous situations," the Justice Department said in a statement. "By recycling that surplus gear, law enforcement agencies are able to do more with their limited budgets, including more training, community policing, intelligence sharing, and other key public safety functions."

 

When Obama announced the ban in May 2015, along with new rules for holding police departments accountable, he said doing so would “make sure police departments are being smart about crime and there’s enough data for them to be accountable as well.”

 

‘Occupying Force’

 

“We’ve seen how militarized gear can sometimes give people a feeling like there’s an occupying force,” Obama said at the time, adding that the heavy equipment could “alienate and intimidate local residents.”

 

Lifting the ban is "exceptionally dangerous and irresponsible," said Janai Nelson, a lawyer with the National Association for the Advancement of Colored People Legal Defense and Educational Fund Inc.

 

 

"Just a few summers ago, our nation watched as Ferguson raised the specter of increased police militarization," Nelson said in a statement. "This action puts more fire power in the hands of police departments that remain largely untrained on matters of racial bias and endangers the public. Inviting the use of military weaponry against our domestic population is nothing short of recasting the public as an enemy."

 

 

  

America's Biggest Problem Is Concentrated Poverty, Not Inequality

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  This is what happens when you compound 300 plus years of SLAVERY and 100 years of legal SEGREGATION! By JJP

 



America's Biggest Problem Is Concentrated Poverty, Not Inequality

RICHARD FLORIDA AUG 10, 2015

Addressing income inequality is important, but worsening economic segregation has far more compounding effects.

Thanks to New York Mayor Bill de Blasio, economist Thomas Piketty, and, of course, the Occupy Movement, inequality is firmly on the national agenda. While income inequality has worsened considerably over the past couple of decades, America and its cities face a far deeper problem of increasing racial and economic segregation, along with concentrated poverty. Urban sociologists like Harvard’s Robert Sampson and NYU’s Patrick Sharkey have shown how concentrated neighborhood poverty shapes everything from higher crime rates to limited social mobility for the people—and especially the children—who live in these neighborhoods.

 

As my Atlantic colleague Alana Semuels has detailed, a new Century Foundation study from Paul Jargowsky, director of the Center for Urban Research and Urban Education at Rutgers University, reveals the devastating growth of geographically concentrated poverty and its connection to race across America. To get at this, Jargowsky used detailed data on more than 70,000 Census tracts from the American Community Survey and the decennial Census to track the change in concentrated poverty between 1990 and 2013. Concentrated poverty is defined as neighborhoods or tracts where 40 percent or more of residents fall below the federal poverty threshold (currently $24,000 for a family of four). The study looks at this change across the nation as a whole and within its major metropolitan areas.

 

The Statistics

The number of people living in concentrated poverty has grown staggeringly since 2000, nearly doubling from 7.2 million in 2000 to 13.8 million people by 2013—the highest figure ever recorded. This is a troubling reversal of previous trends, particularly of the previous decade of 1990 to 2000, where Jargowsky’s own research found that concentrated poverty declined.

 

Concentrated poverty also overlaps with race in deeply distressing ways. One in four black Americans and one in six Hispanic Americans live in high-poverty neighborhoods, compared to just one in thirteen of their white counterparts.

 

 

The table below shows the percentage of inhabitants in high-poverty neighborhoods by age, as well as race and poverty status. Jargowsky finds that poor children are even more likely to live in high-poverty neighborhoods than poor adults. Poor black children under six years of age demonstrate the widest gap in poverty concentration (28 percent). In contrast, poor white children were less likely to live in high-poverty neighborhoods than poor white adults, and saw only a 6.2 percent gap in poverty concentration.

 

 

The report delves deeply into the geography of concentrated poverty. The Midwest (or North Central region), hard hit by deindustrialization and the economic crisis, has seen by far the largest increases in concentrated poverty, as the graph below from the report shows. Jargowsky notes that concentrated poverty more than tripled in Detroit, where the number of high poverty neighborhoods or tracts grew from 51 in 2000 to 184 by 2013. Over this time, concentrated poverty spilled out of the city and into the suburbs.

 

 

The map below tracks changes in the black concentration of poverty since 2000. On the map, dark red signifies an increase of 10 percent or more in the concentration of poverty, while light grey signifies a ten percent decrease in poverty concentration. Red is splayed across a good deal of the map, indicating that concentrated poverty has grown in neighborhoods across the country.

 

 

While we think of ghettos and barrios as the province of big urban centers, concentrated poverty grew much faster in small and medium sized metros of 500,000 to a million people, as shown on the graph below. Concentrated black poverty has increased the fastest in places like Syracuse, New York; Dayton, Ohio; Gary, Indiana; and Wilmington, Delaware, while it has actually declined in larger metros like New York, Los Angeles, Atlanta, and Washington, D.C.

 

 

The graph below shows the metros with the highest levels of concentrated black poverty. These are mainly all Rustbelt metros. Syracuse, New York, tops the list, followed by the Detroit metro area; Toledo, Ohio; and Rochester, New York.

 

 

The next one shows the metros with the highest levels of Hispanic concentrated poverty. Syracuse tops this list as well, followed by Philadelphia; McAllen, Texas; and Detroit.

 

 

The last one shows the metros with the highest levels of concentration of non-Hispanic white poverty. This time, McAllen tops the list, followed by Detroit; Poughkeepsie, New York; and Toledo, Ohio.

 

 

But all three lists are troublingly similar. McAllen, Buffalo, Cleveland, Milwaukee, and Rochester are on two of the lists, while Detroit and Syracuse appear on three. Racially concentrated poverty strikes hardest at economically distressed Rustbelt metros.

 

Housing Reform and More

As Jargowsky sees it, the rise of concentrated poverty is the consequence of deep and fundamental changes in the spatial organization of America, and the sorting of its population across cities and suburbs. As he explains it:

 

“Suburbs have grown so fast that their growth was cannibalistic: it came at the expense of the central city and older suburbs. In virtually all metropolitan areas, suburban rings grew much faster than was needed to accommodate metropolitan population growth, so that the central cities and inner-ring suburbs saw massive population declines. The recent trend toward gentrification is barely a ripple compared to the massive surge to the suburbs since about 1970.”

He then adds, “Public and assisted housing units were often constructed in ways that reinforced existing spatial disparities.”

 

As a consequence, the geography of concentrated poverty is no longer the exclusive province of the urban core, but has spread to the suburbs as well. The geography of concentrated poverty also reflects the rise of an increasingly spiky and uneven geography of economic growth, with small and medium-sized metros in the Midwest and parts of the Sunbelt being left furthest behind.

 

Jargowsky notes that concentrated poverty is not inevitable, but rather the result of “choices” our society makes. To deal with it, he suggests two broad changes. On the one hand, he urges higher levels of government to implement controls over suburban development that can ensure that new housing construction is in line with the growth of a metro population. On the other, he suggests that these controls also ensure that new housing development matches the income distribution in the metropolitan area as a whole. “To some, this suggestion may seem like a massive intervention in the housing market,” Jargowsky writes. “In fact, exclusionary zoning is already a massive intervention in the housing market that impedes a more equitable distribution of affordable housing.”

 

In addition to these critical housing reforms, I would add three things. First, we not only need to build more housing, but to build affordable housing in increasingly unaffordable urban centers—something that is in line with Jargowsky’s suggested reforms. Second, we need to act on the income side of the affordability equation by raising the minimum wage to reflect local living costs, while working hard to upgrade the wages and working conditions of the nation’s more than 60 million poorly paid service workers. And third, we need to invest in transit to connect disadvantaged areas in both the urban center and the suburbs to areas of jobs and opportunity.

 

In short, concentrated poverty is deepening. Far more troubling than simple income inequality, our nation is being turned into a patchwork of concentrated advantage juxtaposed with concentrated disadvantage. The incomes and lives of generation after generation are being locked into terrifyingly divergent trajectories. Now more than ever, America is in need of new 21st century urban policy.


Libor Funeral Set for 2021 as FCA Abandons Scandal-Tarred Rate

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  "$350 trillion in securities" and counting and yet the American people have no idea; the city of London owns America... By JJP



 

Libor Funeral Set for 2021 as FCA Abandons Scandal-Tarred Rate

By Suzi Ring

July 27, 2017, 4:00 AM EDT July 27, 2017, 8:30 AM EDT

Bank lending no longer ‘sufficiently active’ to sustain Libor

FCA’s Bailey says decision not linked to past manipulation

 


Andrew Bailey, chief executive officer at Financial Conduct Authority, explains the decision to end Libor in 2021 in favor of a more-reliable system. He speaks with Bloomberg's Francine Lacqua on 'Bloomberg Surveillance.' (Source: Bloomberg)

Libor, the nearly 50-year-old global borrowing benchmark that became a byword for corruption, is headed for the trash heap of history.

 

The U.K. Financial Conduct Authority will phase out the key interest-rate indicator by the end of 2021 after it became clear there wasn’t enough meaningful data to sustain the benchmark that underpins more than $350 trillion in securities, Andrew Bailey, the head of the regulator, said in a speech Thursday at Bloomberg’s London office.

 

The end of the London interbank offered rate, or Libor, is welcome on many levels for regulators. It was tied to some of the banking industry’s biggest scandals, leading to about $9 billion in fines and the conviction of several bankers for manipulating the rate. Relying on the opinions of industry insiders to set the daily estimates based on interbank lending -- some in markets that saw fewer than 20 transactions annually -- was unacceptable, Bailey said.

 

"Libor is trying to do too many things: it’s trying to be a measure of bank risk and it’s trying to substitute for interest-rate risk markets where really it would be better to use a risk-free rate," said Bailey in an interview with Bloomberg News before the speech. "It’s had to come to a conclusion."

 

 

Bailey said setting a firm schedule will help banks and finance companies manage the transition from Libor, which is behind securities including student loans and mortgages.

 

Read more: What Is Libor and Why It Will Soon Be History

 

The benchmark is the average rate a group of 20 banks estimate they’d be able to borrow funds from each other in five different currencies across seven time periods, submitted by a panel of lenders every morning. Its administration was overhauled in the wake of the scandal, with Intercontinental Exchange Inc. taking over from the then-named British Bankers’ Association with the aim of making the rate more transaction-based.

 

But the 58-year-old Bailey said the market supporting Libor -- where banks provide each other with unsecured lending -- was no longer "sufficiently active" to determine a reliable rate and alternatives must be found. For one currency and lending period there were only 15 transactions in 2016, he said.

 

Serious Question

 

"The absence of active underlying markets raises a serious question about the sustainability of the Libor benchmarks," said Bailey, who is widely seen as a candidate to be the next governor of the Bank of England. "If an active market does not exist, how can even the best run benchmark measure it?"

 

The search for a new benchmark may lead to tighter swap markets, lower rates and richer attorneys as contracts need to be rewritten and adjusted to remove Libor.

 

“The impact of this decision from the FCA is to put uncertainty into all Libor-based swap rates,” said Peter Chatwell, head of European Rates Strategy at Mizuho International Plc in London. “The market will need guidance as to what a replacement could be and this will lead to increased volatility and possibly reduced liquidity in the near term.”

 

The FCA only started regulating Libor in 2013, the same year legislation was passed making it a criminal offense to take any misleading action in relation to financial benchmarks.

 


 

The FCA chief said the regulator has spent a lot of time persuading banks to continue submitting rates, something the agency has the power to enforce, but the lack of liquidity makes this impossible to maintain and leaves it open to manipulation.

 

However, he told Bloomberg Thursday the proposed change didn’t excuse the abuse of the benchmark that has seen five former bankers jailed in the U.K. and a number of others convicted in the U.S.

 

"The issues that we’re dealing with today do not in any sense excuse or mitigate what went on," Bailey said. "Those who say that this demonstrates that what went on in the past is somehow understandable because the system was broken, I’m afraid that is not an argument that this justifies at all."

 

The FCA has spoken to the panel banks over recent months about ending the use of Libor and how much time it would take to wind-down, Bailey said. While it would be tough, most said it could be done in four or five years, and the FCA has asked banks to continue submitting rates until the end of 2021.

 

Push from Authorities

 

Bailey said he could see a situation where there is more than one benchmark, with some including bank credit risk while others exclude that data. While discussions with banks and other users of Libor are at early stages, he said it may take a “push” from authorities to move the process forward at times.

 

“We’ve had no conversations about using capital tools,” Bailey said in response to questions after his speech. “But you can take it for granted that if we don’t see the progress that we need to see to hit this time scale, then in the broader sense there will be a ‘push’ from authorities.”

 

The development comes as a number of groups have been considering alternatives to Libor.

 

 

Bank of England Governor Mark Carney said earlier this month that Libor is no longer suitable. The central bank said in April that a swaps-industry working group had proposed replacing Libor in contracts with the Sterling Overnight Index Average, or Sonia, a near risk-free alternative derivatives reference rate that reflects bank and building societies’ overnight funding rates in the sterling unsecured market.

 

The bank had no further comment when contacted on Thursday.

 

Concerns have mounted in the euro area over Euribor, the benchmark interest rate for $180 trillion a year of intra-bank lending, as banks pull out of rate-setting panels in the wake of the Libor-rigging scandal. The European Central Bank acknowledges the shortcomings of the mechanism but wants the financial industry to take the lead in finding a solution.

 

In June, a U.S. government body, the Alternative Reference Rates Committee, recommended replacing Libor with a new, broad Treasuries repo rate, linked to the cost of borrowing cash secured against U.S. government debt.

 

Switzerland is replacing its own key swaps rate, TOIS, with a new benchmark on Dec. 29.

 

Asked whether this transition away from Libor should have happened earlier, Bailey said it would have been hard to predict five years ago that the world would still be in an environment of quantitative easing and low interest rates.

 

"I’m not criticizing the reforms, they were done with good intent and with a view that the market would return," Bailey told Bloomberg. "We are where we are."

 

 


Exchange Stabilization Fund

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 The Man behind the Man. By JJP

 

Exchange Stabilization Fund

The Treasury Department's Exchange Stabilization Fund (ESF) buys and sells foreign currency to promote exchange rate stability and counter disorderly conditions in the foreign exchange market.

The ESF is used to provide short-term credit to foreign governments and monetary authorities and to hold and administer Special Drawing Rights.

ESF operations are normally conducted through the Federal Reserve Bank of New York in its capacity as fiscal agent for the Treasury Department.

The Exchange Stabilization Fund (ESF) of the United States Treasury was created and originally financed by the Gold Reserve Act of 1934 to contribute to exchange rate stability and counter disorderly conditions in the foreign exchange market. The Act authorized the Secretary of the Treasury, to deal in gold, foreign exchange, securities, and instruments of credit, under the exclusive control of the Secretary of the Treasury subject to the approval of the President.

When the United States adopted the revised articles of agreement of the International Monetary Fund (IMF) in 1978, Congress amended the Gold Reserve Act to provide that the dealings of the ESF were to be consistent with U.S. obligations to the IMF. The ESF also may provide short-term credit to foreign governments and monetary authorities. These ESF "bridge loans" are financed through swaps. That is, the dollars held by the ESF are made available to a country through its central bank in exchange for the same value of that country's currency.

The ESF is used to hold and administer Special Drawing Rights (SDRs), which are assets created by the IMF that the IMF lends to countries that need help to finance balance-of-payment deficits. SDRs were created to increase international liquidity and are permanent resources of the ESF after they are allocated to, or otherwise acquired by, the United States Treasury.

The Federal Reserve and the ESF

ESF operations are conducted through the Federal Reserve Bank of New York in its capacity as fiscal agent for the Treasury. The New York Fed, which executes foreign operations on behalf of the Federal Reserve System and the Treasury, acts as an intermediary for the parties involved when the ESF provides short-term financing to foreign governments. However, it neither guarantees, nor profits from, the loans.

Several times each day, the foreign exchange trading desk of the New York Fed provides current information on market conditions to the Treasury. Whenever necessary, the trading desk buys or sells foreign currencies on behalf of the Treasury, through the ESF, for intervention purposes. Treasury and Federal Reserve foreign exchange operations are closely coordinated and typically are conducted jointly. Operations on behalf of the Treasury are made under the legal authority of the Secretary of the Treasury and those for the Federal Reserve System under the legal authority of the Federal Open Market Committee, the central bank's policy-making group. The ESF does not provide financing to the Federal Reserve System for foreign exchange operations. Rather, the Federal Reserve participates with its own funds. The Treasury reimburses the New York Fed for expenses incurred in carrying out Treasury actions.

Since 1963, the Federal Reserve occasionally engaged in "warehousing" transactions with the ESF. In warehousing a transaction, the ESF sells foreign currencies to the Federal Reserve for dollars and simultaneously arranges to repurchase them, typically within a year. The dollars are immediately credited to the Treasury's account at the New York Fed, and the Federal Reserve invests the warehoused foreign currency, separate from its regular accounts, to earn a market rate of return. Any effect warehousing has on domestic bank reserves is offset by open market operations.

ESF accounts and activities are subject to Congressional oversight. The Treasury provides monthly reports on U.S. intervention activities and a monthly financial statement of the ESF to Congress on a confidential basis. In addition, the quarterly report to Congress by the New York Fed's manager of foreign operations, covering Treasury and Federal Reserve foreign exchange operations, is issued publicly by the New York Fed.

ESF Financing

The ESF was structured to be self-financing. Its resources, which are held in both dollars and foreign currency, include its original Congressional appropriation and retained earnings. The Gold Reserve Act of 1934 initially funded the ESF with resources resulting from the devaluation of the dollar, in terms of gold. Congress appropriated $2 billion of the resulting valuation gain to the ESF; $1.8 billion of that was later used to fulfill the initial U.S. quota subscription to the IMF.

Currently, the New York Fed invests ESF foreign currency balances in instruments that yield market-related rates of return and have a high degree of liquidity and credit quality, such as securities issued by foreign governments. In addition to interest earned on assets, the ESF's balance sheet also includes gains or losses on exchange operations.

As of March 31, 2007, total assets were $45.9 billion and included $20.8 billion in foreign currencies, $9 billion in SDRs, and $16.1 billion in U.S. Government securities.

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1934-1968: FHA Mortgage Insurance Requirements Utilize Redlining

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A typical covenant included the following:


“…hereafter no part of said property or any portion thereof shall be…occupied by ay person not of the Caucasian race, it being intended hereby to restrict the use of said property…against occupancy as owners or tenants of any portion of said property for resident or other purposes by people of the Negro or Mongolian race.”

 

1934–1968: FHA Mortgage Insurance Requirements Utilize Redlining

Race and ethnicity are used to determine mortgage eligibility in communities such as Roxbury, Dorchester and Hyde Park, thus perpetuating housing segregation.


The Federal Housing Administration (FHA) Institutionalizes Racism

Through an overt practice of denying mortgages based upon race and ethnicity, the FHA played a significant role in the legalization and institutionalization of racism and segregation. The Underwriting Manual established the FHA’s mortgage lending requirements, ultimately institutionalizing racism and segregation within the housing industry. The following presents information about the national context of redlining and is not specific to Greater Boston.


The FHA was instrumental in alleviating the home ownership crisis. However, despite it’s positive impact, the FHA also had significant negative effects. FHA insurance often was isolated to new residential developments on the edges of metropolitan areas that were considered safer investments, not to inner city neighborhoods. This stripped the inner city of many of their middle class inhabitants, thus hastening the decay of inner city neighborhoods. Loans for the repair of existing structures were small and for short duration, which meant that families could more easily purchase a new home than modernize an old one, leading to the abandonment of many older inner city properties.

 

Redlining

The FHA also explicitly practiced a policy of “redlining” when determining which neighborhoods to approve mortgages in. Redlining is the practice of denying or limiting financial services to certain neighborhoods based on racial or ethnic composition without regard to the residents’ qualifications or creditworthiness. The term “redlining” refers to the practice of using a red line on a map to delineate the area where financial institutions would not invest (see residential security maps).


The FHA allowed personal and agency bias in favor of all white suburban subdivisions to affect the kinds of loans it guaranteed, as applicants in these subdivisions were generally considered better credit risks. In fact, according to James Loewen in his 2006 book Sundown Towns, FHA publications implied that different races should not share neighborhoods, and repeatedly listed neighborhood characteristics like “inharmonious racial or nationality groups” alongside such noxious disseminates as “smoke, odors, and fog.” One example of the harm done by the FHA is as follows:


In the late 1930’s, as Detroit grew outward, white families began to settle near a black enclave adjacent to Eight Mile Road. By 1940, the blacks were surrounded, but neither they nor the whites could get FHA insurance because of the proximity of an inharmonious racial group. So, in 1941, an enterprising white developer built a concrete wall between the white and black areas. The FHA appraisers then took another look and approved the mortgages on the white properties.


1920s-1948: Racially Restrictive Covenants

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The practice of using racial covenants became so socially acceptable that in “1937 a leading magazine of nationwide circulation awarded 10 communities a ‘shield of honor’ for an umbrella of restrictions against the ‘wrong kind of people’.1 The practice was so widespread that by 1940, 80% of property in Chicago and Los Angeles carried restrictive covenants barring black families.2  This is the America that's never talked about !!!! By JJP

 

1920s–1948: Racially Restrictive Covenants

Used nationwide to prevent people of color from purchasing homes in white communities.

 

Although it is unclear how widespread the practice of racial covenants was in Massachusetts specifically, the following presents a national context.

 

What is a racially restricted covenant?

A covenant is a legally enforceable “contract” imposed in a deed upon the buyer of property. Owners who violate the terms of the covenant risk forfeiting the property. Most covenants “run with the land” and are legally enforceable on future buyers of the property.

 

Racially restrictive covenants refer to contractual agreements that prohibit the purchase, lease, or occupation of a piece of property by a particular group of people, usually African Americans. Racially restrictive covenants were not only mutual agreements between property owners in a neighborhood not to sell to certain people, but were also agreements enforced through the cooperation of real estate boards and neighborhood associations. Racially restrictive covenants became common after 1926 after the U.S. Supreme Court decision, Corrigan v. Buckley, which validated their use.

 

How did racial covenants originate?

The practice of private, racially restrictive covenants evolved as a reaction to the Great Migration of Southern blacks and in response to the 1917 Court ruling (see Buchanan v. Warley) which declared municipally mandated racial zoning unconstitutional. Buchanan dealt only with legal statutes, thus leaving the door open for private agreements, such as restrictive covenants, to continue to perpetuate residential segregation.

 

A typical covenant included the following:

 

“…hereafter no part of said property or any portion thereof shall be…occupied by ay person not of the Caucasian race, it being intended hereby to restrict the use of said property…against occupancy as owners or tenants of any portion of said property for resident or other purposes by people of the Negro or Mongolian race.”

 

The practice of using racial covenants became so socially acceptable that in “1937 a leading magazine of nationwide circulation awarded 10 communities a ‘shield of honor’ for an umbrella of restrictions against the ‘wrong kind of people’.1 The practice was so widespread that by 1940, 80% of property in Chicago and Los Angeles carried restrictive covenants barring black families.2


Iran 1953: State Department Finally Releases Updated Official History of Mosaddeq Coup

Posted by Jerrald J President on August 14, 2017 at 2:20 PM Comments comments (0)

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64 Years Later, CIA Finally Releases Details of Iranian Coup

Posted by Jerrald J President on August 14, 2017 at 2:05 PM Comments comments (0)

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  "They hate "US" because of our VALUES!!!! Really America? By JJP

 

64 Years Later, CIA Finally Releases Details of Iranian Coup

 

New documents reveal how the CIA attempted to call off the failing coup — only to be salvaged at the last minute by an insubordinate spy.

 

Declassified documents released last week shed light on the Central Intelligence Agency’s central role in the 1953 coup that brought down Iranian Prime Minister Muhammad Mossadegh, fueling a surge of nationalism which culminated in the 1979 Iranian Revolution and poisoning U.S.-Iran relations into the 21st century.

 

The approximately 1,000 pages of documents also reveal for the first time the details of how the CIA attempted to call off the failing coup — only to be salvaged at the last minute by an insubordinate spy on the ground.

 

Known as Operation Ajax, the CIA plot was ultimately about oil. Western firms had for decades controlled the region’s oil wealth, whether Arabian-American Oil Company in Saudi Arabia, or the Anglo-Iranian Oil Company in Iran. When the U.S. firm in Saudi Arabia bowed to pressure in late 1950 and agreed to share oil revenues evenly with Riyadh, the British concession in Iran came under intense pressure to follow suit. But London adamantly refused.

 

So in early 1951, amid great popular acclaim, Mossadegh nationalized Iran’s oil industry. A fuming United Kingdom began conspiring with U.S. intelligence services to overthrow Mossadegh and restore the monarchy under the shah. (Though some in the U.S. State Department, the newly released cables show, blamed British intransigence for the tensions and sought to work with Mossadegh.)

 

The coup attempt began on August 15 but was swiftly thwarted. Mossadegh made dozens of arrests. Gen. Fazlollah Zahedi, a top conspirator, went into hiding, and the shah fled the country.

 

The CIA, believing the coup to have failed, called it off.

 

“Operation has been tried and failed and we should not participate in any operation against Mossadegh which could be traced back to US,” CIA headquarters wrote to its station chief in Iran in a newly declassified cable sent on Aug. 18, 1953. “Operations against Mossadegh should be discontinued.”

 

That is the cable which Kermit Roosevelt, top CIA officer in Iran, purportedly and famously ignored, according to Malcolm Byrne, who directs the U.S.-Iran Relations Project at the National Security Archive at George Washington University.

 

At least “one guy was in the room with Kermit Roosevelt when he got this cable,” Byrne told Foreign Policy. “[Roosevelt] said no — we’re not done here.” It was already known that Roosevelt had not carried out an order from Langley to cease and desist. But the cable itself and its contents were not previously published.

 

The consequences of his decision were momentous. The next day, on August 19, 1953, with the aid of “rented” crowds widely believed to have been arranged with CIA assistance, the coup succeeded. Iran’s nationalist hero was jailed, the monarchy restored under the Western-friendly shah, and Anglo-Iranian oil — renamed British Petroleum — tried to get its fields back. (But didn’t really: Despite the coup, nationalist pushback against a return to foreign control of oil was too much, leaving BP and other majors to share Iran’s oil wealth with Tehran.)

 

Operation Ajax has long been a bogeyman for conservatives in Iran — but also for liberals. The coup fanned the flames of anti-Western sentiment, which reached a crescendo in 1979 with the U.S. hostage crisis, the final overthrow of the shah, and the creation of the Islamic Republic to counter the “Great Satan.”

 

The coup alienated liberals in Iran as well. Mossadegh is widely considered to be the closest thing Iran has ever had to a democratic leader. He openly championed democratic values and hoped to establish a democracy in Iran. The elected parliament selected him as prime minister, a position he used to reduce the power of the shah, thus bringing Iran closer in line with the political traditions that had developed in Europe. But any further democratic development was stymied on Aug. 19.

 

The U.S government long denied involvement in the coup. The State Department first released coup-related documents in 1989, but edited out any reference to CIA involvement. Public outrage coaxed a government promise to release a more complete edition, and some material came out in 2013. Two years later, the full installment of declassified material was scheduled — but might have interfered with Iran nuclear talks and were delayed again, Byrne said. They were finally released last week, though numerous original CIA telegrams from that period are known to have disappeared or been destroyed long ago.

 

Byrne said that the long delay is due to several factors. Intelligence services are always concerned about protecting “sources and methods,” said Byrne, meaning the secret spycraft that enables them to operate on the ground. The CIA also needed to protect its relationship with British intelligence, which may have wished some of the material remain safeguarded.

 

Beyond final proof of CIA involvement, there’s another very interesting takeaway in the documents, said Abbas Milani, a professor of Iranian studies at Stanford University: New details on the true political leanings of Ayatollah Abol-Ghasem Kashani, a cleric and leading political figure in the 1950s.

 

In the Islamic Republic, clerics are always the good guys. Kashani has long been seen as one of the heroes of nationalism during that period. As recently as January of this year, Iran’s supreme leader praised Kashani’s role in the nationalization of oil.

 

Kashani’s eventual split from Mossadegh is widely known. Religious leaders in the country feared the growing power of the communist Tudeh Party, and believed that Mossadegh was too weak to save the country from the socialist threat.

 

But the newly released documents show that Kashani wasn’t just opposed to Mossadegh — he was also in close communication with the Americans throughout the period leading up to the coup, and he actually appears to have requested financial assistance from the United States, though there is no record of him receiving any money. His request was not previously known.

 

On the make-or-break day of Aug. 19, “Kashani was critical,” said Milani. “On that day Kashani’s forces were out in full force to defeat Mossadegh.”

 

Clarification, June 21, 2017: This piece has been clarified to state that at least one person was in the room when Roosevelt received the August 18 cable, and that the cable was unpublished until now.

 



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