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The ECB Blasts Governmental Fear-Based Racketeering, Questions Keynesianism, Believes The Fed's Powers Are Overestimated
In what could one day be seen by historians as a seminal speech presented before the Paul Volcker-chaired Group of Thirty's 63rd Plenary Session in Rabat, the ECB's Lorenzo Bini Smaghi had two messages: a prosaic, and very much expected one: of unity and cohesion, if at least in perception if not in deed, as well as an extremely unexpected one, in which the first notable discords at the very peak of the power echelons, are finally starting to leak into the public domain. It is in the latter part that Bini Smaghi takes on a very aggressive stance against not only the so-called "inflation tax", or the purported ability of central bankers to inflate their way out of any problem, but also slams the recently prevalent phenomenon of fear-mongering by the banking and political elite, which has become the goto strategy over the past two years whenever the banking class has needed to pass a policy over popular discontent. The ECB member takes a direct stab at the Fed's perceived monetary policy inflexibility and US fiscal imprudence, and implicitly observes that while the market is focusing on Europe due to its monetary policy quandary, it should be far more obsessed with the US. Bini Smaghi also fires a warning shot that ongoing divergence between the ECB and Germany will not be tolerated. Most notably, a member of a central bank makes it very clear that he is no longer a devout believer in that fundamental, and false, central banking religion - Keynesianism.
First, a quick read through the "prosaic" sections of Bini Smaghi's letter.
Bini Smaghi, who is a member of the executive board of the ECB, has a primary obligation to defend the ECB's public image in this time of weakness and complete lack of credibility. And so he does. When discussing the ECB's response to the Greek fiasco and contagion, he is steadfast that the response, although delayed and volatile, was the right one. Furthermore, he claims that the hard path Europe has set on is the right one, as it will ultimately right all the fiscal wrongs, even without the benefit of individual monetary intervention. Ultimately, the ECB is convinced that not letting Greece fail, either in the form of union expulsion or partial default, was the right decision, as "this sill force euro area countries to address their fiscal positions earlier. It’s not easy. But it will be done, because it can be done and it has to be done in any case. And, last but not least, because there are no alternatives." Alas, while we agree that admission is the first step on the road to recovery, the subsequent steps will prove to be insufficient. The imbalances in Europe are of such great magnitude that hoping that countries eventually grow into their balance sheets by way of austerity is simply a ridiculous assumption, and as such does not merit extended overviews. We note this with irony, because apparently the ECB, contrary to elementary school rule #1, favors quantity over quality. As the ECB board member says:
Let me consider the arguments put forward by those who regard a Greek default as unavoidable.
Their first argument is economic. The adjustment programme is too harsh, given the level of the debt-to-GDP ratio reached in Greece. It will produce a debt spiral which will lead the country into a recession and deflation. The problem is made worse by the loss of competitiveness suffered by Greece over the last decade and the impossibility of devaluing the currency. Their reasoning is generally no more sophisticated than that. Some analysts have put together a few numbers to show that they are aware of the problem. But I have not seen a serious analysis of the 120-page report produced by the IMF which looks at the various aspects of the programme, including the impact of the structural measures on growth, the sustainability analysis or other features of the programme. Not one review of the realism of the assessments made by the staff of the IMF and the Commission. In fact, I suspect most market analysts have not even looked at the adjustment path for the primary surplus which is embedded in the programme, which aims to reach 6% of GDP in 2015, a level no different from the ones that other countries in the past have implemented to consolidate their public finances. It’s a level that a number of other countries – including some outside the euro area – will have to achieve if they want to stabilise their debt. Most market analysts and other observers have probably not even looked at the structural measures that are embedded in the programme, affecting for instance the labour market, or at several liberalisations, and their impact on economic growth. The inefficiencies in the tax collection system, which have been aggravated before the elections, have also been overlooked. The perception that the Greek programme will not work looks more like an assumption than the result of a serious assessment.
To summarise, I wonder which analysis is more serious and credible: the many one-pagers, very well publicised – I must admit – which probably aim to influence the rest of the market; or the IMF’s 120 pages of rather tedious analysis describing the contents of the programme, together with its risks.
To this we ask: if a collective brain trust is charged with the goal seeked, and well compensated by taxpayers, duty to put together a 1,200 page report that confirm the primary tenets of the trust itself, will Mr. Smaghi give it 10 times the credibility of the ECB's report? Or how about one million typewriter-armed monkeys putting together 1,200,000 page "analyses" claiming that the Greek default is inevitable? We hope someone has the facilities to conduct just such an experiment. Perhaps the futility of such a simplistic act is the very reason why not more than a one-pagers is required to refute the central bank dogma.
Thus the key axis of contradiction emerges: the ECB is willing to set off on the "demonstratedly" arduous journey of forcing its member states to right their fiscal (income statement) evils, yet while not acknowledging that the key missing link, balance sheet restructuring, is not necessary but critical. There is a reason why plain vanilla restructurings focus on the balance sheet, and not on the income statement: a company with a fresh start balance sheet can grow its income statement without its debts being a hindrance, on the other hand, rarely if ever, do income statements allow companies to grow into untenable balance sheets. This is the main flaw in the ECB's plan. And it is these very contradictions that force the European populace to lose its credibility in the ECB, a concern which even the central bank is all too aware of.
The balance of the "prosaic" part of the speech is along the same lines: merely a defense of the ECB's line of actions, driven primarily by a direct response to the market, and thus a very short-sighted and reactive, instead of proactive, policy response, which merely invites the market to test out the ECB's lack of resolve. And once again, the ECB is not naive and is fully aware of this, yet it redirects attention to other source of "market-test" weakness: "Financial markets are testing each country, one by one, to see whether they are willing to adopt the necessary budgetary measures, starting with those which seem to be facing the greatest hurdles to consolidation." Bini Smaghi is right and wrong here: the market will continue testing country by country, but not to determine fiscal resolve, only to take advantage of the lack a monetary one. And so from crisis to crisis, the market will continue reaching deeper until it finally tests the very core of the eurozone: Germany.
And speaking of Germany, this brings us to the other part of Bini Smaghi's letter. In one of the first open shots of public confrontation, we see that the ECB has been very much displeased not only by rampant fear-mongering, but by the words of Germany's Angela Merkel, whose recent repeat declarations that Greece could be allowed to leave the union, have undermined the bedrock of the ECB. Furthermore, as the WSJ reports, "in a rare show of defiance for the consensus-driven ECB, Germany's
central bank head Axel Weber told the German newspaper Börsen-Zeitung
that he viewed the bond-buying decision "critically" and that it
carried "substantial stability risks." Is this the type of rancorous infighting between Europe's two main powers, that will seal the fate of the Eurozone experiment far more certainly than parliamentary stormings in Athens?
We read in Bini Smaghi's letter the first fingerpointing of displeasure by an ECB official aimed squarely at Germany:
A further dimension, in the European context, is the difference in cultures and sensitivities. They affect how issues are communicated within countries, in particular between politicians and their electorates. These are differences which totally disconcert financial markets. For instance, in one large euro area country it was thought that public support for swift action could be achieved only by dramatising the situation, for instance, by telling the public that “the euro is in danger” or by considering the possibility of expelling a country from the euro area. But it was not realised that, in the midst of a financial upheaval, such words are like fanning the flames and that the cost of the support package could only increase following such dramatic declarations. By contrast, in other countries, leaders want to be seen as being in control of the situation and taking all sorts of initiatives to reassure their electorates. The media, of course, have a field day reporting on such apparently inconsistent activities.
We hope that the ECB's displeasure by the kind of racketeering that Americans have grown to know and loathe, as it is performed either openly by politicians who directly threaten with end of the world scenarios every time they wish to get their way, or indirectly, such as when the market crashes a 1,000 points when it appears that the Fed is on the verge of losing its secrecy, is espoused by more individuals and organizations. On the other hand, we will closely follow the now open feud between German and Europe's Central Bank - if past experience is any indication, infighting between these two will only lead to mutual weakening, and result in an even faster forced reorganization of peripheral European countries, and, eventually the euro.
In this regard, perhaps Bini Smaghi's speech created far more damage than damage control: now that the public's, and more importantly, the market's, attention is be drawn to the duel between Germany and the ECB, this will merely destabilize the monetary union even more, now that monetary and political unions, and conflicts, are synonymous, a point not lost on the ECB executive himself: "As I said earlier, monetary union is de facto a political union."
And now that European monetary "politics" are the center stage, we find two other pearls in Bini Smaghi's speech.
Not too surprisingly, the ECB is now directly pointing a finger at the Fed, where conventional wisdom has long held the belief that due to its ability to determine independent monetary policy, backed by the world's reserve currency, the Fed can and always will easily inflate its way out of any complication.
To believe that an inflation tax can solve the problem posed by the mounting public debt is an illusion that some people like to cultivate. For several reasons. First, people are less naïve than some might think – they dislike an inflation tax as much as other forms of fiscal adjustment. Second, it’s not so easy to generate inflation, in particular ‘surprise’ inflation, without provoking a more-than-proportional increase in interest rates, also in light of the short average maturity of public debt in most countries. Third, a rise in inflation, and inflation expectations, would produce a major upward shift in the yield curve, inflicting major losses on the banks and financial institutions which have been heavily investing in these markets, potentially undermining the recovery.
This is probably the best encapsulation of the threats, or rather threat, that another QE episode by the Fed will bring with it. In essence the ECB is saying that should the Fed pursue another QE episode, the imminent explosion in short-end interest rates will lead to a solvency crisis within the US itself, monetary policy or not. Bini Smaghi points out one very critical truth: in not having a reserve currency, and thus protected by the belief that the ECB can inflate its way out of complication, it is forced to pursue fiscal reform, much sooner than the US will, which will only result in a much greater crisis in the US, once it becomes clear that the marginal influence of monetary policy will be drowned out by a sea of fiscal imprudence. And for the one true shining example of the latter, look no further than the CBO's 10 year budget deficit estimates.
In short, the impossibility of resorting to an inflation tax is forcing euro area countries to tackle the burden of public debt sooner rather than later. In other countries the illusion of being able to resort to the inflation tax might delay the adjustment, but the longer the treatment is postponed the harsher it’s likely to be. End of digression.
Was this the first shot across the bow in the the transatlantic central bank wars? Too bad the ECB will be insolvent overnight if the Fed decides to truly escalate and pull all its swap lines tomorrow. Why risk retaliation? This is easily the most important question needing answering over the next several weeks.
Last, but not least, are the following zingers that have no other intent than to poke at the ever larger holes appearing in the fabric of that one modern false economic religion known as Keynesianism.
In the aftermath of the Lehman failure, governments around the world seemed to rediscover Keynes. They injected huge amounts of borrowed money – public funds – to stabilise the economy after the shock of the Lehman failure. These policies worked, and averted a global depression. The success of those policies has led governments – encouraged by international organisations – to continue using expansionary fiscal policies to try pulling the economy out of the recession and getting it back to the pre-crisis level.
The strategy is based on a model which may turn out to be inappropriate in the current conjuncture. Let me discuss some of the underlying assumptions of the model. First, the initial fiscal impulse was successful in avoiding a depression because it helped to coordinate agents’ expectations, in the Keynesian or Knightian way of reducing uncertainty, thereby avoiding a vicious circle of recession and deflation. The direct impact on domestic demand may have been more modest, as shown in countries where the size of the fiscal stimulus was more contained but nevertheless fared equally well. Second, potential growth might have been severely affected by the crisis. As a result, the pre-crisis level of output, achieved in a bubble economy, would not represent a sustainable objective over the policy-relevant horizon. Third, the level achieved by the public debt in many countries may have impaired the effectiveness of further expansionary fiscal policy.
To sum up, while the fiscal expansion was successful immediately after the Lehman crisis, it may not be sustainable over time and may have to be corrected rapidly. Financial markets seem to be giving increasing attention to this hypothesis. And they have started to test it.
Is this the last degree of "religious" doubt before outright revulsion set in and the oligarchic heretics emerge? More so than the question of whether or not the euro is viable, is whether the beginning of the end for Keynesianism is approaching? If so, the imminent revolution in Western world economic thought will be unprecedented, and the resulting global reset will lead to a world where daily news will no longer be dominated by headlines about more record banker theft going unpunished, co-opted and facilitated by a cheaply purchased legislative, executive and judicial system.
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Much appreciated
.
All the EU banks suck but perhaps a few German banks! So when does the electronic bank run commence?
You missed the memo? Sorry.
whatever good, whatever bad, whatever claptrap comes from the mouth of a central banker it is to maintain the hegemony of the bankster class.....this cb is simply trying to salvage a highly attenuated ecb and eu in the presence of his sociopathic frat boy fraternity....
the fed could crush europe in a heartbeat....the ecb is simply attempting to maintain a pretense of independence...europe lacks the will of independence and wouldn't know how to achieve it if someone shoved it up its ass....
a central bank is ipso facto flawed....
-------Cheeky Bastard
Never bet against a sociopath [individual, corporation or government] for his judgement is not clouded by morality and emotions. He is determined, resourceful and intelligent. He is a machine operating on pure reason. This is just a little FYI I know from personal experience. Mind you; this is a good form of sociopathy with no urge or will to employ violence. As I said; operating on pure reason with no ambiguity to cloud his actions.-------
Always enjoy your writing. You got this one way wrong. Violence is only a justified action, if necessary. Pure reason is not the primary, me, me, me is the primary.
well put looker. Its the me, me, me. Ego supreme.
Zen describes the ego as a hand trying to grasp itself.
Show me this voice in your head. What is it that makes your decisions?
Most would say that they (I, Id, whatever) do, but they would be wrong.
It is a question of values. A sociopath values what his ego desires, a Buddhist values peaceful existence (extinguish karma.)
Sociopaths are dangerous precisely because their emotions and (lack of) empathy don't prevent their worst volition.
Yeah but buddhists don't invent useful shit.
Hate the west, hate the whites, hate the sociopaths, whatever, I'll take climate control and modern medicine and electric power, thanks
Not all Buddhists are monks, many educated western atheists are Buddhist.
Therfore, many educated western atheists are not monks... Wait, what?
Trav7777 seemed to suggest that the set of Buddhists and the set of Western Innovators were mutually exclusive. This is not the case. I tend to be overly terse, let me know if you'd like me to extrapolate on any of this for you.
im kinda interested. maybe too late, now.
i have never thought about this, before and not sure i understand what both of you are saying.
plus, you said something about sociopaths below on thread. i don't think i have ever had a conversation about this subject. but now i have googled it, i am sure i know a lot of people with this condition. i was probably their target sure of it, and didn't know they were bad like this. jeeze, waking up at least late in life is better to have never awoken.
Volition in a Buddhist sense is similar to the 'will to power' that Nietzsche taught. Volition is 'you' imposing your will. When you do this you create karma. The mind fuck is that 'you' really don't control this, you have no free will. Buddhists boot strap the problem by reducing/eliminating volition. This is done by reducing the effect emotions have on their actions (equanimity is a tool for keeping constant emotion in any situation.) Sociopaths are similar to Buddhists in this regard as their actions are not controlled by emotions (this isn't exactly true as there would be no action if there were no emotions, the emotions that move them are not the same as the emotions that drive you, that's why their motives are tough to figure out.) The main difference is that in Buddhism, empathy is rule number one, to a sociopath you are meat. This is how I understand it, obviously I not really qualified to discuss this.
oh that was really nice to read. i could follow you.
v o l i t i o n is a beautiful word, that i haven't used enough.
i see your comparision between the two. nicely said.
boy, guess im no buddhist, cause im emotional nut ball†
but im going to try real hard in my next life, not to be so emotional.
this is my new mantra.
i am planting a garden because i believe in tomorrow.
I have a friend that practices / meditates all the time and is very thoughtful and considerate. He thinks he's a bad Buddhist because he eats meat.
Reason without emotion is just as much a 'one-eyed man' as emotion without reason; sociopaths fail to see the externalities in their actions and are thus ignorant of the long-term consequences of same to their selfish selves.
Not the smart ones! Beware the intelligent sociopath. The dumb ones are easy to spot.
Because of the US debt size, new and churn, we will experience a monetary crisis before prolonged open inflation (QE) due to market capacity and interest sensitivity.
This is why I have been organizing my plans based on when the FED openly buys Treasuries on an ongoing basis so as to balance Treasury outlays. When this is announced or is uncovered, I will exit my US Dollar and equity holdings.
Time to leave.
Goodbye to you, US.
http://www.youtube.com/watch?v=_50-gOeBilc&feature=related
Mark Beck
The EU is like what the US would be if the slugs at one end didn't have the voting bloc power to enforce redistribution from productive to nonproductive.
The Germans really essentially ARE saying fuck you Greece, you bunch of chump slacker lowlife cretins.
Why should Germany suffer an iota for what a bunch of low IQ club Med countries have done? That is the sentiment of the populace. They don't have an EU federal authority like we have who can come in and force Montana to pay for blue state profligacy.
Everywhere I look I see Govts that have painted themselves into a corner, busily loading up their paint brushes, because it's the only solution that they believe in!
Hmmmm...let's check your assumptions, shall we?
Montana...SDP: $26B ($26k/capita), $60M shortfall ($60/capita...-.23% SDP), $4721/capita fed tax
CA...SDP $1.5T($42k per capita), $20B shortfall ($555/capita...-1.3% SDP), $8590.18/capita fed tax
Who is supporting whom, again?
If Montana doesn't like it, I'm pretty sure we'd be as willing to let them secede as Germany is to let Greece out of the EU.
CA leads the nation in bullshit production and GDP heavily stilted by real estate.
BTW, I never mentioned CA, because it is a 2-part state, one producer/exporter, and the other a libtard clusterfuck.
Say what you will about Ayn Rand, she did supply one nugget of truth -- principles are important and must be followed to their logical conclusion(s).
The Economy is in a shambles because the majority chose to believe in a free lunch, with no care about who was paying. Now, the socialists are out of other people's currency (or should this be money?)
http://www.americanthinker.com/2010/05/the_end_of_democratic_socialis.html
Where were all you clowns when Chimpy was running deficits to send kids into the sand and espousing cheap drugs for old farts?
Did you complain when Clinton repealed Glass-Steagall and cemented the lack of regulation of OTC derivatives?
Where were you when Reagan and Bush I were blowing money out their asses during the cold war and bailing out S&Ls?
But please do continue your ignorant refrains about 'socialism' while ignoring the real users of OPM (hedge funds, institutional investors, and investment banks).
We'll direct them to that champion of free-lunch socialism, "we've proven deficits don't matter", Dick Cheney.
ayn rand yes her name and books are very popular..with millions of readers .. and form the basis of a popular form of freedom economics, and famous quotes ,, who is john galt
as an aside all the posters here on zero hedge are known by 10's or maybe less l. depends how many in the family lol .. the most famous saying known to the family is "whats for lunch"
How many know Stalin's name? Was he right too?
Great thread. Fichte, among many others (Romans 7), struggled with these issues. I for one could have agreed with any one of you at different times in my life. I am at once, shocked by my inconsistency and yet accepting of it. The sociopathic I, and the empathetic I, coexist at fluctuating degrees. The struggle never resolves.
Fichte's account proceeds from the general principle that the I must set itself up as an individual in order to set itself up at all, and that in order to set itself up as an individual it must recognize itself as it were to a calling or summons (Aufforderung) by other free individual(s) — called, moreover, to limit its own freedom out of respect for the freedom of the other...
According to Fichte, transcendental philosophy can explain that the world must have space, time, and causality, but it can never explain why objects have the particular sensible properties they happen to have or why I am this determinate individual rather than another. This is something that the I simply has to discover at the same time that it discovers its own freedom, and indeed, as a condition for the latter...
Fichte also developed a theory of the state based on the idea of self-sufficiency. In his mind, the state should control international relations, the value of money, and remain an autarky. Because of this necessity to have relations with other rational beings in order to achieve consciousness, Fichte writes that there must be a 'relation of right,' in which there is a mutual recognition of rationality by both parties...
http://en.wikipedia.org/wiki/Johann_Gottlieb_Fichte
Hey re-Bob... you ever read Spinoza?
Yes. I have had a lot of time to explore over the last 23 years. In the end, I would agree with Spinoza's criticism of religious dogma, but in contrast to Spinoza, I am a monotheist. I would also agree with him that all attributes of God are not known to us, but in contrast to him believe that God's personality attributes are accessible to us. I find agreement with the mystics within monotheistic religions.
Mystics in the four prominent monotheistic religions cut right through semantics and hypocrisy for a personal relationship with the Spirit of God. “Spiritual drunkards” are the Sufi Muslims called because they are so under the influence of the Spirit. Ephesians 5:18 correlates, “Do not get drunk with wine, for that is dissipation, but be filled with the Spirit.” Hitpaalut is the Hasidic rapture following contemplative prayer. Higher consciousness and union with God follow making japa for Hindus. Out of three violently different semantics (excluding the nonviolent dogma of the Hindus) rise a group of mystics from each that join with other mystics of the world born of the Spirit to claim a soul to soul love experience with the Spirit of God as what is expected of them by God; and a secure expectation for eternity. This love experience with the Spirit of God compels praise out of gratitude (public and private) and good works out of gratitude, not dogma and conversions. No trouble here.
Because of this relationship, I am able to accept my duplicity for this life, knowing that love is conquering my self-centeredness. Not in the physical realm, but in the soul realm. Gravity, or self-centeredness, rules the physical. Levity, or love, rules the soul realm. The real battle is in the spiritual realm.
But, I will stop here because I am sure it is already TMI! But, thanks for asking:>)
bob resurrected
Ever read the OAHSPE?
No, I had not. But after a quick look, I would have a problem with any cosmological cycle theory because of cosmic microwave background radiation and the increasing expansion rate of the universe as per Hubble observations. And, it doesn't address first cause. Thanks for pointing it out to me.
bob resurrected
Ever read Gurdjieff or Ouspensky? Meetings with Remarkable Men is a very inspiring work.
I like this part:
Distrusting "morality", which he describes as varying from culture to culture, often contradictory and superficial, Gurdjieff greatly stressed the importance of conscience. This he regarded as the same in all people, buried in their subconsciousness, thus both sheltered from damage by how people live and inaccessible without "work on oneself".
However, what I have discovered in me is that when I tried to work on myself, another problem popped up somewhere else. Only when I took my hands off and simply kept my antenna up (remain aware of my conscience) was I able to enjoy the fruits of the Spirit in increasing measure. My love relationship with the Spirit of God is through my conscience. But, I also no longer beat myself up if I pull in my antenna. Instead, I wait, the Spirit of God always drags me back, sometimes as I am kicking and screaming!
bob resurrected
Gurdjieffs self work really is no different than Zen or even the Eightfold Path.
All he is doing is instilling awareness of self.
I read that Zen monks can perceive the ticking of a clock, they never become acclimated and allow the noise to fade into the background.
In the end it is only up to the individual to achieve self knowledge. If you meet the Buddha on the road kill him.
I personally believe there is no personal ego/soul, so Spinoza was a breath of fresh air. I apprecate your willingness to share your beliefs.
http://www.youtube.com/watch?v=cZeyIbcsuPE
He is three
One's in the middle unmoved
Waiting
To show what he sees
To the other two
To the one attacking--so afraid
And the one that keeps trying to love and trust
And getting himself betrayed
In the plan--oh
The divine plan
God must be a boogie man!
One's so sweet
So overly loving and gentle
He lets people in
To his innermost sacred temple
Blind faith to care
Blind rage to kill
Why'd he let them talk him down
To cheap work and cheap thrills
In the plan--oh
The insulting plan
God must be a boogie man!
Which would it be
Mingus one or two or three
Which one do you think he'd want the world to see
Well, world opinion's not a lot of help
When a man's only trying to find out
How to feel about himself!
In the plan-oh
The cock-eyed plan
God must be a boogie man!
Fascinating account. Doesn't mean much of course, only that much of what's long been said around here will come to pass.
And btw, why meet in Rabat of all places? Is the EU looking for new peripheral members?? That's exactly the kind of presumptuousness that got the French and often hapless Germans into this jam in the first place.
Any rumor mongers care to comment on this?
http://fellowshipofminds.wordpress.com/2010/05/27/washington-insider-oba...
Washington Insider: Obama Member of Chicago Gay Man’s Club
May 27, 2010 · 37 Comments
Design by BKeyser: http://www.cafepress.com/RTKArtistry
The Wayne Madsen Report (WMR) is a mainly subscription news site ($7/month for “individual reader” subscribers) that claims to provide news ”from deep inside the Washington beltway.” Its editor is Wayne Madsen, a former US Navy officer, Washington, DC-based investigative journalist, author and syndicated columnist, with an impressive c.v.
On May 24, 2010, WMR had a blockbuster report for subscribers only, which claims that Obama is a long-time member of a gay man’s club in Chicago, of which his Chief of Staff Rahm Emanuel is also a member.
I first saw this story 3 days ago on Rense.com in an article titled “Madsen Is Vindicating Larry Sinclair.” [Note: Sinclair is a gay man who claims he had 2 sexual encounters with Obama in Chicago.] The article had a short excerpt from the WMR. I did not post it here on Fellowship at the time because I wanted to think about it.
I went back to Rense for the article today, but when I clicked “Obama’s Gay Club,” the article is no longer there, no doubt because its excerpt from WMR violated WMR’s pay-for-view policy. Instead, clicking “Obama’s Gay Club” brought me to the website of the man’s bath house club referenced in the WMR article – Man’s Country club in Chicago. Located at 5015 N. Clark St
Chicago, IL 60640 (phone: 773-878-2069), the club describes itself as:
“a private membership club for men 18 years and older. Man’s Country Chicago is a clean, safe place to hang out, meet guys who share the same interests as you, socialize, make friends, watch porn and play! Man’s Country Chicago / Where real men meet.”
The club’s motto “Play hard, Play safe” and logo (below right) leave little doubt that it’s a gay club. If you still have doubts, take a look at the club’s “Photos” page, with 8 photos of “the hottest dancers in Chicago” — all men, such as this one (below left):
Fortunately, thanks to alert Fellowship member Tina, the entire WMR article is now posted on The JagHunter blog. Here it is!
Obama and Emanuel: Members of same gay bath house in Chicago
President Obama and his chief of staff Rahm Emanuel are lifetime members of the same gay bath house in uptown Chicago, according to informed sources in Chicago’s gay community, as well as veteran political sources in the city.
The bath house, Man’s Country, caters to older white men and it has been in business for some 30 years and is known as one of uptown Chicago’s “grand old bathhouses.” WMR was told by sources who are familiar with the bath house that it provides one-year “lifetime” memberships to paying customers and that the club’s computerized files and pre-computer paper files, include membership information for both Obama and Emanuel. The data is as anonymized as possible for confidentiality purposes. However, sources close to “Man’s Country” believe the U.S. Secret Service has purged the computer and filing cabinet files of the membership data on Obama and Emanuel.
Members of Man’s Country are also issued club identification cards. WMR learned that Obama and Emanuel possessed the ID cards, which were required for entry.
Obama began frequenting Man’s Country in the mid-1990s, during the time he transitioned from a lecturer at the University of Chicago Law School to his election as an Illinois State Senator in 1996. Emanuel, reportedly joined Man’s Country after he left the Clinton White Hosue and moved back to Chicago in 1998, joining the investment firm of Wasserstein Perella and maintaining his membership during his 2002 campaign for the U.S. 5th District House seat vacated by Rod Blagojevich, who was elected governor.
Man’s Country appears to be a “one stop shopping” center for gay men. The club’s website advertises steam rooms, “fantasy rooms,” bed rooms, male strippers, adult movies, and lockers.
However, Man’s Country was not the only location for Obama’s predatory gay sex activities. The Chicago gay community is aware that Obama often made contacts with younger men at his famous “pick-up basketball” games. It was at these “pick up” matches where Obama first met Emanuel and a young Democratic campaign worker and senior bank vice president named Alexi Giannoulias. Currently running for Obama’s old U.S. Senate seat now occupied by Roland Burris, Giannoulias successfully ran for Illinois Treasurer in 2006 after being drafted for the run by Chicago’s Democratic machine.
The Blagojevich trial: “Sex, Lies, and Audio tapes” — Fitzgerald’s US Attorney’s Office part of White House cover-up of gay sex in the Second City
Giannoulias was a vice president and senior loan officer for his father’s bank, Broadway Bank, from 2002 to 2006. Broadway Bank made real estate loans to Antoin “Tony” Rezko, the chief of Rezmar Corporation. On May 13, 2008, Rezko was found guilty, after being indicted by a grand jury at the behest of the U.S. Attorney for Northern Illinois Patrick J. Fitzgerald, of six counts of wire fraud, six counts of mail fraud, two counts of corrupt solicitation, and two counts of money laundering. Rezko has been in solitary confinement at the Metropolitan Detention Center at Van Buren and Clark in Chicago since June 2008. However, Rezko has not yet been officially sentenced to a federal prison. A Syrian-American, Rezko is considered to be a flight risk, even though his one-time fortune of $50 million has been reduced to zero.
One Republican politician in Chicago told WMR that Rezko will be a prime witness for Blagojevich’s defense. “Figure it this way, Rezko’s been in solitary confinement in the city jail since June 0f 2008 . . . if he is released to appear at Blagojevich’s trial as the primary witness, everyone expects him to squeal like a pig,” said the Republican politico.
In 2005, Rezko reportedly engaged in a complicated real estate “flip” through which his wife Rita and Obama agreed to split an empty lot adjoining a home that Obama bought in Chicago’s Kenwood district. The deal saw Obama buy the home for $1.65 million, which was $300,00 below market value. Obama then bought a strip of the adjoining property from Mrs. Rezko, a speculative deal that stood to make Obama a handsome profit. Since Rezko’s conviction, the property has has reportedly gone into bankruptcy. Giannoulias’s Broadway Bank was seized by the Illinois Department of Financial and Professional Regulation on April 23, 2010, reportedly as Secretary of Treasury Tim Geithner was on his way to Chicago to present the bank with a bailout check. Geithner quickly changed his plans.
Giannoulias, Broadway’s then-senior loan officer, has denied being involved in the decision to loan money to Rezko.
Last month, Blagojevich’s trial judge, U.S. District Court judge James Zagel, a crony of former Illinois Republican Governor Jim Thompson, ruled that all 500 hours of phone calls intercepted and taped by Fitzgerald could not be played during Blagojevich’s trial as demanded by Blagojevich and his defense lawyers. Blagojevich demanded that Fitzgerald “show up in court and explain to everybody . . . why you don’t want those tapes that you made played in court.”
WMR has learned that the tapes may contain salty references Obama’s and Emanuel’s private lives.
WMR attempted to interview Blagojevich’s senior defense lawyer Sam Adam to no avail but other informed sources told us that the tapes, if played, would highlight the corruption of not only Obama, Emanuel, and other member of Obama’s Chicago “brain trust” but also Fitzgerald himself. WMR was told that Fitzgerald’s tactics have included providing sex and drugs to imprisoned felons to get them to provide perjured testimony at federal trials.
It is exactly the type of federal prosecutorial misconduct by Fitzgerald that former Republican Governor said was used by state prosecutors when he commuted the death sentences of Illinois’s death row population. Ryan was indicted by Fitzgerald for fraud and he is currently serving out a federal prison sentence.
Blagojevich’s trial is scheduled to begin on June 3 and Fitzgerald’s main interest is to keep the trial focused on Blagojevich, especially after he managed to “flip” Blagojevich’s former chief of staff John Harris to testify against the impeached and ousted governor. WMR learned from informed sources that one lawyer on Harris’s defense team is involved in a gay partner scandal that was discovered by the attorney’s wife.
Some of the wiretaps may reveal that it was not Valerie Jarrett, Obama’s longtime friend and current White House policy adviser who was Obama’s top candidate to fill his U.S. Senate seat, but the young 32-year old “pick up basketball” friend of Obama, Giannoulias, then serving his second year as state Treasurer. However, Obama has avoided campaigning for Giannoulias in Illinois and there are indications that the president has “thrown Giannoulias under the bus,” according to some Democratic political circles in Chicago.
Mutiple Chicago sources report that Republicans who see Giannoulias’s Obama connections as providing an edge in his Senate race this year should not celebrate prematurely. Giannoulias’s GOP opponent, U.S. Representative Mark Kirk, a Naval Reserve intelligence officer, has also been identified as a closeted gay man. Kirk divorced his wife last year after an eight-year marriage. They had no children.
In addition, U.S. Representative Aaron Shock, who took over the House seat vacated by Obama’s Republican Transportation Secretary Ray LaHood, is, according to Chicago Boy’s Town sources, a habitué of Minibar, a noted gay bar in Chicago’s gay district. For an extremely young first term member of the House, observers were surprised when GOP Minority Whip Eric Cantor of Virginia named Shock as a Deputy Minority Whip.
Man’s Country, one of Chicago’s “grand old bathhouses” and located at 5015 North Clark Street in Chicago’s “Boystown,” was a frequent hangout for State Senator Obama and Rahm Emanuel
Sources in Chicago’s gay community report that Obama was attracted to Man’s Country’s older white clientele because he generally enjoys being fellated by older white men. Obama would regularly be seen at Man’s Country on Wednesdays.
Obama reportedly has never engaged in reciprocal activity. The sources also confirm the allegations made during the 2008 campaign by Larry Sinclair, a Chicago visitor who revealed that in 1999 he engaged in such oral sex activity and crack cocaine use with then-State senator Obama on two occasions, once in the back of a Chicago limousine operated by Five Star Limousine Service, and the other at a Chicago area motel, the Comfort Suites in Gurnee, Illinois.
After revealing details of the encounter at a press conference at the National Press Club in Washington, Sinclair was arrested by Washington Metropolitan Police on a fugitive warrant issued by Delaware Attorney General Beau Biden, the son of Obama’s vice presidential running mate, Senator Joe Biden. Sinclair was charged with a misdemeanor count of theft of money orders, however, the state of Delaware declined prosecution. Beau Biden later declined to run for his father’s old Senate seat because of his duties to prosecute a major pedophilia case involving Lewes, Delaware pediatrician Dr. Earl Bradley. There are reports that Biden’s office helped to cover up Bradley’s activities, including failing to authorize search warants for Bradley’s office and computer.
Chicago’s “DLC” — not the Democratic Leadership Council but the “Down Low Club” — a gay matchmaking service
WMR spoke to several well-placed sources in Chicago who reported that Jeremiah Wright, the pastor of Obama’s former church of 20 years, Trinity United Church of Christ (TUCC) on Chicago’s south side, ran what was essentially a matchmaking service for gay married black professional members of the church, including lawyers and businessmen, particularly those with children. The matchmaking club was called the “Down Low Club” but references to it over the phone and email simply referred to the group with the code phrase “DLC.” The ruse, according to our sources, was to make anyone who was eavesdropping on the communications believe that the references were to the Democratic Leadership Council, also known as the DLC.
The gay DLC’s services were intended to keep ensure TUCC’s gay members avoided posting solicitations on web services like Craig’s List and refrain from cruising gay bars. The strategy was to protect them from getting busted and being “outed.”
Among the members of the gay “DLC” were Obama and TUCC’s choir director, Donald Young, an openly gay man who reportedly had a sexual relationship with Obama. Two other gay members of the church were Larry Bland and Nate Spencer. Young and Bland were brutally murdered, execution style, in late 2007. Bland was murdered on November 17, 2007 and Young on December 24, 2007. The latter was killed by multiple gunshot wounds. Spencer reportedly died on December 26, 2007, official cause of death: “septicemia, pneumonia, and HIV.”
“DLC” members often went on camping trips arranged by TUCC. Wright reportedly was the head of the “DLC” matchmaking services and ensured that its members protected each other.
The “DLC’s” clientele included Obama and other gay members of TUCC, including, reportedly Young, Bland, and Spencer. Fox 32 Chicago reported that Bland’s mother, Josephine Bland, was so upset at her son inviting men into their home as a result of contacting them through gay web sites like “Adam4Adam,” she moved out.
The gay community in Chicago knows to keep away from the TUCC and “DLC” stories because of the “creepiness” of the operation and the suspicious deaths of the three TUCC gay black men.
Although Obama protected his alternate life style through the secretiveness of the “DLC,” he was not so careful when he proclaimed he was a state senator while frolicking at Man’s Country in uptown Chicago.
Love: Obama’s personal trainer
Reggie Love, a former Duke basketball and football player and unsuccessful National Basketball hopeful, currently serves as Obama’s personal trainer and White House “special assistant” — he has been called Obama’s “body man” — who receives a salary of $104,000 a year. Love is also reportedly one of Obama’s regular gay sex partners. Love joined Obama’s Senate staff in a senior staff position in 2006.
Media General’s tabloid, the National Enquirer, proffered a story last year about Michelle Obama being furious about the relationship between her husband and his “body man.” TheEnquirer’s sister tabloid, The Globe, later floated a story about Obama having a relationship with a Democratic campaign official named Vera Baker. WMR has been told that this relationship was a clever ruse to throw off speculation about Obama’s actual past sex partners. Baker has apparently left the United States for relatively more obscurity in Martinique. Media General’s tabloids have scooped the mainstream media on sex scandals involving Bill Clinton and Gennifer Flowers and Monica Lewinsky, Tiger Woods, and John Edwards and Rielle Hunter.
WMR’s Chicago sources believe the Secret Service records of presidential candidate Obama’s activities in Chicago would show that Obama regularly arrived at Love’s Chicago residence at 9:00 am and departed at 9:15 am. Sources told WMR that while 15 minutes is much too short for a personal training exercise, it is ample time for fellatio.
Bill Frist, “Brokeback Mountain,” and Obama
In 2006, after Obama became the junior senator from Illinois, WMR’s sources in the Congressional Black Caucus reported that there were persistent rumors of gay trysts between Obama and then-GOP Senate Majority Leader Bill Frist of Tennessee. The allegations at the time seemed unbelievable.
However, based on Obama’s penchant for receiving fellatio from older white men, a column written by The Washington Post’s “In the Loop” columnist Al Kamen on April 7, 2006, some four months into Obama’s Senate term, may have expanded relevance. Kamen reported he received an invitation to attend Frist’s “5th Annual VOLPAC ’06 Weekend” in Nashville from April 21st to 23rd and that the invitation card required one to “unbuckle the cowboy’s pants and look inside to see what this was all about.” Kamen opined that the invitation seemed “a bit too ‘Brokeback Mountain.’”
The invitation advertised that the shindig would feature “one-of-a-kind music and special friends,” although Kamen said there was no indication what made the “friends” so “special.” Kamen then wrote, “The back of the card shows the cowboy from behind with a red flowered handkerchief sticking out of his right pocket. Wait a minute — wasn’t there something about how this used to be some kind of code in the gay community years ago? A way to signal each other in crowded, noisy bars? So we checked the GayCityUSA.com’s Hanky Codes. Sure enough, there it was in the chart explaining what they mean: red hanky in right pocket. Oh, dear.”
Rumors about Obama and Frist ran amok in Congressional Black Caucus circles in 2006.
Although Frist ran on the pledge of only serving two terms, he became Senate Majority Leader with all the perks of the office. WMR’s sources in Chicago’s gay community revealed that Frist’s Majority Leader predecessor, Senator Trent Lott of Mississippi, was also known to seek the services of male prostitutes. Frist, who said he planned to run for President in 2006, decided against a run for the White House and also declined a run for Tennessee governor in 2010.
With the rumor mill running at full speed in 2006, it is obvious why Frist abandoned politics so quickly for the medical business. Frist later endorsed Obama’s health care proposals. A year later, when GOP Senator Larry Craig was arrested while soliciting for sex in a men’s toilet stall at Minneapolis-St. Paul International Airport, he changed his mind about immediately resigning his Senate seat. Knowing about his colleagues’ behavior, he dug in his heels and completed his term in January 2009.
Rahm the “Sugar Daddy”
Obama’s chief of staff Emanuel, who won a scholarship to the Joffrey Ballet but turned it down to attend college, is married and, like Obama, has children, in Emanuel’s case, a son and two daughters.
However, Emanuel, who is 50, also travel frequently with a male companion, a wealthy Chicago real estate developer, some five to six years his senior. WMR has learned from Chicago’s gay community as well as political sources that Emanuel and his friend have gone together on a trip to India, skiing vacations, and soon plan a vacation in Florida, sans Mrs. Emanuel and the kids.
In Chicago’s gay community, Emanuel is known as “sugar daddy,” promising young men with perks and lucrative positions if they sleep with him. On occasion, Emanuel has been with older men, such as his travel companion, but his preference is young, according to WMR’s sources. Emanuel also often uses bicycling and basketball venues to make his approaches. Being an Emanuel “basketball buddy” is a key to professional success.
WMR spoke to one member of the gay community in Chicago who had first hand knowledge of one of Emanuel’s bed partners, an older man who runs a non-profit symphony organization.
Obama’s other sex partners
WMR has previously reported on Obama’s past trysts with Alabama Democratic U.S. Representative Artur Davis, a current primary candidate for governor of Alabama. Although not in the same class, Obama and Davis attended Harvard Law School during an overlap of their attendance at the law school.
The information on Davis and Obama was gathered by opposition researchers for former Alabama Representative Earl Hilliard, who Davis defeated in the 2002 Democratic primary. Recently, WMR was informed by sources in Alabama that Attorney General Eric Holder traveled three days ago to Alabama to inform Davis that if he loses his primary race, he would be nominated by Obama to fill the job of U.S. Attorney for the Middle District of Alabama, a position still held by Bush-appointee Leura Canary, one of the main prosecutors of convicted and jailed former Alabama Democratic Governor Don Siegelman.
Chicago sources also informed WMR of another past gay partner of Obama, Massachusetts Democratic Governor Deval Patrick.
Men who have reportedly had sexual relations with Barack Obama
* Donald Young, TUCC Choir director
* Larry Sinclair, gay escort
* Reggie Love, White House presidential assistant and Obama’s “body man”
* Artur Davis, US Representative from Alabama and gubernatorial candidate
* Bill Frist, former GOP Senate Majority Leader
* Deval Patrick, Governor of Massachusetts
The Clear and Present Blackmail Threat
Leading secret alternate life styles, Obama and his chief of staff provide classic blackmail threats. Considering Obama’s choice for the Supreme Court, Elena Kagan, who is reputedly a semi-open lesbian, the question must be posed how much Obama’s and Emanuel’s own covert life styles led to the decision to nominate Kagan, someone with no experience on a judicial bench. Similarly, the fact that so much is known about Obama’s and Emanuel’s trysts in Chicago begs another important question. If politicians, gay community activists, and journalists in the Windy City are aware of Obama’s and Emanuel’s highly blackmailable gay life styles, the same can certainly hold true for the executives of one of Chicago’s corporate headquarters — that of BP America’s Production Operations.
Throw in the intelligence agencies of America’s allies, friends, enemies, and the situation becomes a clear and present danger to the national security of the United States.
***End of article from JagHunter blog***
Obama is leaving today for an extended Memorial Day weekend vacation in Chicago, returning to Washington, D.C. on Monday. No doubt it is a mere coincidence that the Man’s Country club will have a special event during the weekend: an International Mr. Leather 2010 contest!
If you live in Chicago and find yourself in Man’s Country this weekend, be sure to say “hi” to the Commander Teabagger-in-Chief!
~Eowyn
Gully
I could not care less if Barry kisses peepees or scarfs pussy. What matters is that he is a lousy leader, was bought off by Hank and Goldman in the fall of 08, and thinks that economics is a distasteful subject best left to others to sort out.
Obama should be replaced as soon as possible. But with whom...
Remocrat or Depublican- they are all sleazy, bought off traitors to the American People.
Hey mouse- come out of your hole.
Updated DOW charts :
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
"is whether the beginning of the end for Keynesianism is approaching?"
As the esteemed philosopher, Elmer Fudd, said, as he peered down the barrel of his shot gun after several unsuccesful trigger pulls: "No more buwwets?"
Following the KABOOM to the face, that inevitably followed one last pull on the trigger, his life long nemesis, Bugs Bunny, remarked: "One more buwwet!"
Cheers,
Death to Keynes, long live the king (Austrian School of Economics)
I have been waiting a long time to say that.
Hate to have to tell you this Hustler, but Johns already dead, been dead for a long time.
You're complicating it.
Inflation is a necessary to cover the interest portion of existing debts.
What the original poster probably does not realize is that all the money that exists does so as a result of a loan from a bank. That is, for every $1 that exists, someone borrowed $1 from a bank. And for ever $1 borrowed, the bank expects $1 + interest to be paid back. But if all the money that exists does so as a result of a loan, and if banks only issue the principal value of the loan and not principal + interest, where does the money come from to cover the interest? It comes from subsequent loans. In order for people to be able to pay back their loans *with interest*, banks need to issue an ever-increasing amount of money. That's inflation.
"In order for people to be able to pay back their loans *with interest*, banks need to issue an ever-increasing amount of money. That's inflation."
Also isn't that why they want economic growth so that the increased money ahs somewhere to go without causing high inflation?
On a somewhat different note, one of the more lucid takes on the so-called EU bailout fiasco, courtesy of Sol Palha. http://www.financialsense.com/fsu/editorials/ti/2010/0528.html
I am not an economist, I'm a scientist and engineer but I had to take a few economics courses at university. I wanted to learn about finance and economics for a long time but I could never figure it out. That's because I was listening to the mainstream media, these people are such a bunch of idiots. They WANT people to be confused, they don't want the average person to understand how it works. Never in schoold do they teach people where money comes from.
Now that I've found this network of blogs on the internet I'm finally figuring it out and I'm able to shoot down the garbage in mainstream media. This blog has helped a lot, and CHris Martenson's crash course was very good in laying down the fundamentals. And FOFOA and the youtube videos on "Money as Debt" parts I and II are very illuminating.
Chart of Charts indicates that a big move may be coming, this would be down in all liklihood.
Tricky, so tricky. Euro says US equities ought to rally.
Credit spreads say that the poop is about to hit the fan.
Chart of Charts is implying Armageddon starting now.
Please comment
http://oahutrading.blogspot.com/2010/05/chart-of-charts.html