sabato 29 dicembre 2012

Destroying U.S. Economy Now in Congress’s Hands


The Borowitz Report

DECEMBER 28, 2012

AL QAEDA DISBANDS; SAYS JOB OF DESTROYING U.S. ECONOMY NOW IN CONGRESS’S HANDS

fiscal-cliff-al-qaeda-465.jpg
WASHINGTON (The Borowitz Report)—The international terror group known as Al Qaeda announced its dissolution today, saying that “our mission of destroying the American economy is now in the capable hands of the U.S. Congress.”
In an official statement published on the group’s website, the current leader of Al Qaeda said that Congress’s conduct during the so-called “fiscal-cliff” showdown convinced the terrorists that they had been outdone.
“We’ve been working overtime trying to come up with ways to terrorize the American people and wreck their economy,” said the statement from Al Qaeda leader Ayman al-Zawahiri. “But even we couldn’t come up with something like this.”
Mr. al-Zawhiri said that the idea of holding the entire nation hostage with a clock ticking down to the end of the year “is completely insane and worthy of a Bond villain.”
“As terrorists, every now and then you have to step back and admire when someone else has beaten you at your own game,” he said. “This is one of those times.”
The Al Qaeda leader was fulsome in his praise for congressional leaders, saying, “We have made many scary videos in our time but none of them were as terrifying as Mitch McConnell.”
As for the future of Al Qaeda, the statement said that it would no longer be a terror network but would become “more of a social network,” offering reviews of new music, movies and video games.
In its first movie review, Al Qaeda gave the film “Zero Dark Thirty” two thumbs down.
Photograph by Scott J. Ferrell/Congressional Quarterly/Getty.


Read more: http://www.newyorker.com/online/blogs/borowitzreport/2012/12/al-qaeda-disbands-says-job-of-destroying-us-economy-now-in-congress-hands.html#ixzz2GQQBmmxM

venerdì 28 dicembre 2012

The Magic of Money

The Magic of Money

The FBI vs. Occupy: Secret Docs

Democracy Now / By Juan GonzalezAmy Goodman

The FBI vs. Occupy: Secret Docs Reveal "Counterterrorism" Monitoring of OWS from Its Earliest Days

The FBI agents coordinated with businesses, local police agencies and universities.

JUAN GONZÁLEZ: We begin with a look at newly revealed documents that show the FBI monitored the Occupy Wall Street movement from its earliest days last year. Internal government records show Occupy was treated as a potential terrorism threat when organizing first began in August of 2011. Counterterrorism agents were used to track Occupy activities despite the internal acknowledgment that the movement opposed violent tactics. The monitoring expanded across the country as Occupy grew into a national movement, with FBI agents sharing information with businesses, local police agencies and universities. One FBImemo warned that Occupy could prove to be an "outlet" through which activists could exploit "general government dissatisfaction." Although the documents provide no clear evidence of government infiltration, they do suggest the FBI used information from local law enforcement agencies gathered by someone observing Occupy activists on the ground.
AMY GOODMAN: The heavily redacted FBI records were obtained by the Partnership for Civil Justice Fund through a Freedom of Information Act request. We invited the FBI to join us on the program to discuss the latest revelations, but they declined. Instead, spokesperson Paul Bresson issued a written statement saying, quote, "The FBI cautions against drawing conclusions from redacted FOIAdocuments." He also said, quote, "It is law enforcement’s duty to use all lawful tools to protect their communities."
Well, for more, we’re joined by Mara Verheyden-Hilliard. She’s executive director of the Partnership for Civil Justice Fund, which obtained the documents showing how the FBI monitored Occupy Wall Street, joining us now from Washington, D.C.
Welcome to Democracy Now!, Mara. Tell us what you found. We’ve got time. Tell us what you found in these documents.
MARA VERHEYDEN-HILLIARD: Well, the documents, as you stated, show that the FBI and American intelligence agencies were monitoring and reporting on Occupy Wall Street before the first tent even went up in Zuccotti Park. The documents that we have been able to obtain show the FBI communicating with the New York Stock Exchange in August of 2011 about the upcoming Occupy demonstrations, about plans for the protests. It shows them meeting with or communicating with private businesses. And throughout the materials, there is repeated evidence of the FBI and Department of Homeland Security, American intelligence agencies really working as a private intelligence arm for corporations, for Wall Street, for the banks, for the very entities that people were rising up to protest against.
AMY GOODMAN: Interesting that they came out on Friday before Christmas?
MARA VERHEYDEN-HILLIARD: Well, we certainly thought so. We have been trying to get these documents for more than a year. The Partnership for Civil Justice Fund filed original FOIA demands with federal agencies as well as municipalities and police departments all around the United States, and we did so in the fall of 2011, when there was evidence of a coordinated crackdown on Occupy all around the country. And we wanted to get the documents out to be able to show what the government was doing. And the FBI has stonewalled for a year, and we were finally able to get these documents. They came to us, you know, as you said, the Friday before the holiday weekend. And we wanted to get them out to people right away. We assumed the FBI was expecting that, you know, it would just get buried. And instead, I have to say, it was, you know, great to be able to get these up and have people around the United States be able to see what theFBI is doing.
JUAN GONZÁLEZ: And Mara, what about the issue of actual infiltrators, either paid or sent in by law enforcement or the FBI into the Occupy groups?
MARA VERHEYDEN-HILLIARD: Well, the documents are heavily redacted. There is a lot of material that, on the pages themselves, we cannot see. And the documents also, in terms of the breadth and scope of the production, we believe that there is a lot more that’s being withheld. Even when you go through the text of the documents, you can see that there’s a lot more in terms of meetings and memos that must exist. And we are filing an appeal to demand and fight for more material to be released.
But even in these heavily redacted documents, you can see the FBI using at least private entities as a proxy force for what appears to be infiltration. There is—there are documents that show the Federal Reserve in Richmond was reporting to theFBI, working with the Capitol Police in Virginia, and reporting and giving updates on planning meetings and discussions within the Occupy movement. That would appear, minimally, that they were sending undercovers, if not infiltrators, into those meetings.
There is another document that shows the FBI meeting with private port security officers in Anchorage, Alaska, in advance of the West Coast port actions. And that document has that private port security person saying that they are going to go attend a planning meeting of the demonstrators, and they’re reporting back to theFBI. They coordinate with the FBI. The FBI says that they will put them in touch with someone from the Anchorage Police Department, that that person should take the police department officer with him, as well.
And so these documents also show the intense coordination both with private businesses, with Wall Street, with the banks, and with state police departments and local police departments around the country.
AMY GOODMAN: We’re going to go to break and then go specifically to several of the documents you got under the Freedom of Information Act. We’re talking to Mara Verheyden-Hilliard, who is the executive director of the Partnership for Civil Justice Fund, which got the documents under the Freedom of Information Act, has been trying to get them over the past few years. This is Democracy Now! Back in a minute.
[break]
AMY GOODMAN: We go back right now to Mara Verheyden-Hilliard, executive director of the Partnership for Civil Justice Fund, which released documents showing how the FBI monitored Occupy Wall Street. I want to turn right now to one of the documents. I’m Amy Goodman, with Juan González. I want to turn to part of a memo dated October 19, 2011, from the FBI’s field office in Jacksonville, Florida. The document is titled, quote, "Domain Program Management Domestic Terrorism." It shows the FBI was concerned the Occupy movement, quote, "may provide an outlet for a lone offender exploiting the movement for reasons associated with general government dissatisfaction." In particular, the document cites certain areas of concern in Central Florida where, quote, "some of the highest unemployment rates in Florida continue to exist." Mara, can you talk about this idea of a lone offender threat?
MARA VERHEYDEN-HILLIARD: I think that that is very much a measure of box checking by the FBI. I don’t believe—and their documents show that they did not believe—that this was a movement that posed a threat of violence. Now, throughout the documents, they’re using their counterterrorism resources and counterterrorism authorities, they are defining the movement as domestic terrorism and potentially criminal in nature. But the fact is, they also throughout the documents say that they know that this is a peaceful movement, that it is organized on a basis of nonviolence. And by that logic, of course, you can investigate everyone in every activity in the United States on the grounds that someone might do something sometime. And, in fact, think about the tea party rallies. The tea party was having rallies all around the United States where their members come carrying weapons—they’re open carrying—including at events where the president of the United States was speaking. But the FBI is turning its attention to this movement.
And when they reference the locations in Florida, I think that’s actually a political analysis, a recognition that this is a movement whose time has come. And whether it’s in hibernation right now, it is based on an organic reality of the economic situation in the United States. And the FBI is referencing the high level of unemployment, the needs that people have, and it’s a recognition, too, of the dynamism and the dynamic nature of the people of the United States, the people all over the world, when they organize and come together. That’s the threat that we believe the FBI and Department of Homeland Security are truly focused on, not a threat of violence.
JUAN GONZÁLEZ: Well, Mara, I’d like to turn to another document from the FBI’s New York field office that shows FBI personnel met with representatives of the New York Stock Exchange on August 19th, 2011, to discuss the Occupy Wall Street protests that were set for the following month. The memo describes the meeting, saying, quote, "Discussed was the planned anarchist protest titled 'Occupy Wall Street,' scheduled for September 17, 2011. The protest appears on anarchist websites and social network pages on the internet." The memo goes on to say, quote, "Numerous incidents have occurred in the past which show attempts by anarchist groups to disrupt, influence, and or shut down normal business operations of financial districts." Talk about these meetings between law enforcement and the parties targeted by Occupy Wall Street, Mara.
MARA VERHEYDEN-HILLIARD: Well, again, the documents throughout show that they know that the movement is nonviolent. And the FBI routinely uses reference to anarchists and demonizing anarchists or a political ideology as if it’s an—identical with criminal behavior. And so, they often reference anarchists in these materials and other materials that we’ve gotten over the years in our litigation, even where they know there are not acts of violence. And we also know how frequently the police themselves, you know, mask up and infiltrate demonstrate demonstrations, posing themselves as the anarchists that they’re always saying that they’re worried about.
But those documents again show the FBI working with private industry, with the banks. They’re not bringing evidence of real threats of violence. They’re talking about political uprising. And I think we can be sure that if they had evidence of criminal activity, they wouldn’t have redacted it. They would have been happy to produce that. But they don’t have it. And over and over again, you have the FBI, the Department of Homeland Security basically conducting themselves in a form of police statism in the United States against the people of the United States.
JUAN GONZÁLEZ: And what about the historical precedent here, the history of the FBI’s involvement in monitoring, surveiling and sometimes disrupting peaceful, dissident activity in the United States?
MARA VERHEYDEN-HILLIARD: Well, exactly. This is just part and parcel of the long history of the FBI. And this is not the first incident, it is not going to be the last, and it’s not the worst, to be honest. We all know that. It’s not—you know, theFBI has a long history — ’50s, ’60s, ’70s — of mass surveillance, of targeting of people based on political ideology, of efforts to disrupt the movements for social justice, for efforts to shut down black liberation movement, the antiwar movement. And in the ’70s, of course, there were these great revelations about the abuses of the FBI, of the CIA, of other security agencies. And there were the Church Committee hearings. There were supposedly protections put in place. But we can see, you know, decade after decade, with each social justice movement, that theFBI conducts itself in the same role over and over again, which is to act really as the secret police of the establishment against the people.
AMY GOODMAN: Mara, a document from October 2011 indicates law enforcement from the Federal Reserve in Richmond, Virginia, was giving the FBIinformation about Occupy Wall Street. It says the Federal Reserve source contacted the FBI to, quote, "pass on information regarding the movement known as occupy Wall Street." Interestingly, the memo also notes that Occupy Wall Street, quote, "has been known to be peaceful but demonstrations across the United States show that other groups have joined in such as Day Of Rage and the October 2011 Movement," it says. The memo describes repeated communications to, quote, "pass on updates of the events and decisions made during the small rallies." Can you talk about the significance of this document, Mara?
MARA VERHEYDEN-HILLIARD: That document is one of the ones that would indicate the FBI was minimally using private entities or local police departments as proxy forces for infiltration, for undercover operations, to monitor, surveil, collect information. And that document, too, and the series of documents also showed the breadth of the reporting. So you have individuals on the ground with the Federal Reserve Bank, with the state police agencies, apparently monitoring and collecting information on the planning discussions of protests in Richmond, reporting them into the FBI and also reporting them into state fusion centers and to other intelligence and domestic terrorism data centers.
Now, the data warehousing in the United States, the mass collection of data on the people of the United States, is of great concern. And you can see, through these documents, the FBI is collecting a lot of information on completely lawful activities, on the activities of people who are not alleged to have committed criminal acts, are not planning criminal acts, who actually are engaged in cherished, First Amendment-protected activities. And yet, it’s being collected under the imprimatur of domestic terrorism or criminal activity and being entered into these mass databases, which have a huge level of dissemination and access and which are virtually unregulated.
AMY GOODMAN: We want to thank you very much, Mara Verheyden-Hilliard, for joining us, executive director of the Partnership for Civil Justice Fund, which released the documents showing how the FBI monitored Occupy Wall Street. This is Democracy Now!, democracynow.org, The War and Peace Report.

Juan Gonzalez is the co-host of the nationally syndicated radio news program, Democracy Now!.

The Biggest Wall Street Scandal of 2012


  ECONOMY  

Matt Taibbi on the Biggest Wall Street Scandal of 2012

16 biggest banks in the world fixing global interest rates -- that's hard to beat.
Rolling Stone's Matt Taibbi has skewered his fair share of financial faux pas and corporate bigwigs throughout 2012. Yet his prize for the Biggest Wall Street Story of the Year goes to the massive—but little understood—Libor scandal.
“If it’s true that the 16 biggest banks in the world were fixing global interest rates, then it’s hard not to argue that that’s not the biggest financial corruption case in history,” Taibbi says in a web exclusive forCurrent TV. “I fully expect that we’ll find out in the end that American banks were involved in this scandal.” (Watch video below)
At the heart of the Libor scandal is the simple, primary function of banks: facilitating the borrowing and lending of money. They do this job and still turn a profit using a nifty little trick called interest rates, which essentially means if I borrow money from a bank, I pay back a little extra for their service. Simple? Sort of, except once again the banks have fixed this simple game so that--as in a casino--the house always wins.
How is this interest rate determined? We trust that the banking system is setting today’s rate based on its best guess about the future worth of the money. And we assume that guess is based, in turn, on the cumulative market predictions of countless lenders and borrowers all over the world about the future supply and demand for the dough.
But suppose our assumption is wrong. Suppose the bankers are manipulating the interest rate so they can place bets with the money you lend or repay them – bets that will pay off big for them because they have inside information on what the market is really predicting, which they’re not sharing with you.
That would be a mammoth violation of public trust. And it would amount to a rip-off of almost cosmic proportion – trillions of dollars that you and I and other average people would otherwise have received or saved on our lending and borrowing that have been going instead to the bankers. It would make the other abuses of trust we’ve witnessed look like child’s play by comparison.
….
This is insider trading on a gigantic scale. It makes the bankers winners and the rest of us – whose money they’ve used to make their bets – losers and chumps.
Watch Taibbi announce his #1 financial scandal of 2012:
Laura Gottesdiener is a freelance journalist and activist in New York City.

mercoledì 26 dicembre 2012

The Euro can be saved by using local currencies


To Save the Euro, Establish Dual Currencies

This article is by Mazen A. Skaf, a partner and managing director with Strategic Decisions Group, a consultancy in strategic decision-making, risk management, and shareholder value creation.
The powerful European Central Bank [ E C B ] i...
Headquarters of the European Central Bank, in Frankfurt, Germany.
Time is fast running out on the euro. With record high unemployment in the euro zone, failing austerity measures, and restive populations in southern Europe, the E.U. may soon have to consider a far more radical long-term solution to the crisis: the introduction of dual currencies.
This solution of last resort would allow member countries such as Greece or Spain to introduce a new local currency—the new drachma or the new peseta, for instance. This national currency would be used for domestic transactions, pension benefits, and the salaries of public sector employees. All external debts denominated in euros would continue to be honored in euros. Similarly, all existing bank deposits in euros would be maintained in euros, preventing bank runs.
The local currency could be devalued based on an agreed upon schedule or allowed to float within a specified range in order to restore competitiveness and economic growth in the local market. The European Central Bank would provide loans to support the member countries through the transition but would not extend any support for a member country’s primary expenses. Those expenses would be financed with the member country’s new local currency and be subject to the country’s budgetary policy.
This dual-currency system would help circumvent the structural weaknesses that will remain—and that will cause more zone-wide economic crises in the future even if the ECB somehow manages to alleviate the debt crisis in the short term.
Under current arrangements, member countries simply lack the ability to stimulate their economies, as monetary policy resides solely in the hands of the ECB. Economic shocks affect different countries differently and require different responses, yet the only tool they have for influencing their economies is fiscal policy—their budgets. And that tool is severely limited by the E.U.’s stability and growth pact, essentially an E.U. rule requiring members to keep their budget deficits below 3% of gross domestic product. So the flexibility usually enjoyed by a sovereign country to run budget deficits in a recession to counterbalance the business cycle is virtually nonexistent.
The current situation is like trying to control the temperature of a 16-story building with a single thermostat, and then telling the tenants that they can’t use a space heater or a portable air-conditioning unit when the temperature leaves the comfortable range. Under a dual-currency system, member countries would continue to enjoy the benefits of the euro while increasing their maneuvering space to drive monetary and fiscal policy on a local basis.
Other remedies to these structural weaknesses have been proposed. One is greater fiscal integration, including a joint fiscal authority, the issuing of common bonds, and the ability to make fiscal transfers to regions hit disproportionately hard by recession. The level of additional fiscal integration required may prove daunting and require considerable time to achieve. Currently, the budget of the E.U. cannot exceed 1.27% of the European Union’s gross national product.(In 2011, the E.U. budget was €141 billion, or about 1% of the EU’s total GDP of more than €12.6 trillion. By contrast the U.S. federal budget in 2011 stood at 40.1% of GDP. That may be too high, but the comparison provides a rough estimate of the order of change in fiscal integration required  to deliver any meaningful impact.
Greater fiscal integration, even if achieved, would be insufficient. The private sector needs more flexibility across the euro zone, including greater labor mobility and a unified labor market, to respond to economic shocks.
Still, the odds are stacked heavily against these approaches to the problem. Greater fiscal integration requires the upfront and ongoing commitment of voters and officials across member countries and increases the risk of moral hazard like free riding and breaking of covenants in the future, especially from member states that would be required to execute tough reforms. And greater labor mobility is likely to run up against existing government regulations as well as cultural and language barriers that discourage the movement of workers across borders.
Structural weaknesses have led to economic imbalances. Since 2000, productivity-adjusted wages have increased by about 5% in Germany while rising between 25% and 40% in other E.U. member countries. This has led to a divergence in competitiveness, in growth of exports, in overall economic growth, and in employment among the member countries.
Correcting these imbalances by implementing austerity measures—the tack taken so far—or by pursuing the somewhat higher inflation that some economists have called for, is not easily achievable. If these imbalances persist and there is resistance to greater fiscal integration, greater labor mobility, and more private sector flexibility, the E.U. may be faced with a stark choice: Continue the half-measures that are driving the euro zone ever deeper into recession, or allow the introduction of dual currencies to preserve the euro. Because if the euro goes, the single market may go with it, and likely the half-century-old dream of a unified and uniformly prosperous continent.

Merry Christmas to all from AMI !


Dear Friends of the American Monetary Institute,

We wish you a merry Christmas, and Happy Holidays! We hope you are well this evening.

The year 2012, saw a very important development for the advancement of AMI's monetary reform work!

You know that HR2990, was introduced into the U.S. House of Representatives on September 21st, 2011 by Congressman Dennis Kucinich of Cleveland, Ohio, co-sponsored by Congressman John Conyers of Detroit Michigan. So you know our nation owes these two men a very deep gratitude for their foresight, courage and action. You can read the act, with videos, at http://www.monetary.org/wp-content/uploads/2011/11/HR-2990.pdf .

Then a major development occurred in August, 2012.
Dr. Michael Kumhof and Dr. Jaromir Benes, of the International Monetary Fund (IMF) wrote an IMF Working Paper titled "The Chicago Plan Revisited." Dr. Kumhof is Deputy Division Chief of the Modeling research Dept. of the IMF. His paper is sweeping the economic world like a storm; with talks already sponsored at The Bank of England, various Universities here and in Europe, and at the Federal Reserve System itself. You can read the paper at http://www.monetary.org/wp-content/uploads/2012/08/ChicagoPlanRevisited.pdf
Dr. Kumhof realized that certain adjustments to the Chicago Plan were necessary, to assure its workability, and he made them.

The importance of this is that HR 2990 is also based on the Chicago Plan, and its' two main elements: nationalization of the Federal Reserve, and ending whats known as fractional reserve banking, come directly out of the Chicago Plan. In crafting HR 2990, several years ago, we also realized that adjustments were necessary. The adjustments we devised, had the effect of not using any debt for money at all, and we figured out how to convert all such debt into real money at the inception of the plan. In this way we devised a simplified form of the Chicago Plan, and Congressman Kucinich introduced it into the Congress. Any questions? Send them in!

Dr. Kumhof is the first, and only economist to do his duty toward my book, The Lost Science of Money. He did this in a magnificent two sentence review of my book:

"The historical debate concerning the nature and control of money is the subject of Zarlenga (2002), a masterful work that traces this debate back to ancient Mesopotamia, Greece and Rome..., he shows that private issuance of money has repeatedly led to major societal problems throughout recorded history..." (P. 13, The Chicago Plan Revisited)

Thank you Dr. Kumhof.
Friends, Now We Need Your Help
And now Friends of the American Monetary Institute, I must ask for your assistance. Can you please make a year end contribution to our operations?
The coming year, 2013, is an important one. Our most important task is to get an HR2990 equivalent introduced into the 113th Congress, which begins in January. Your donations will make this work possible.
We express our deep appreciation for your interest during past years, especially to those who have read our book, the Lost Science of Money, and have supported us with your financial contributions. You can still give in 2012, if your donation is postmarked by December 31st; if you send it in January, it will count toward 2013.

To donate, please see http://www.monetary.org/contribute

We do depend on those - they make our activities and existence possible. Thanks in large part to you, our nation is now getting closer than ever in our entire history to enacting a real, workable monetary reform program. Your donation can also take the form of ordering my book at http://old.monetary.org/lostscienceofmoney.html
Any questions, please call 224-805-2200.
Thank you all - A Very Merry Christmas - and Happy New Year -
Stephen Zarlenga
Director,
American Monetary Institute
P.S. The American Monetary Institute will continue to present monetary education materials at our home page, http://www.monetary.org We recommend that those who want to become more involved in reform go there and sign up in the red arrows box. By doing that you make it easy for us to communicate with you.
-- 
"Over time, whoever controls the money system
controls the nation."
Stephen Zarlenga
Director
American Monetary Institute
To receive notices for free AMI materials,
sign up for our email list at www.monetary.org
(224) 805-2200

martedì 25 dicembre 2012

U.S. “Christmas Present” to private lenders...


“Christmas Present”: U.S. Senate Votes $631 Billion Military Budget

budget
by Valentin Zorin
The US Senate has unanimously approved a $631bln defense budget for 2013. The draft budget has evoked no objections from the White House. As he ran for president four years ago, Barack Obama promised to cut defense programs and put an end to the arms race which drained the US economy. The Obama administration has failed to stabilize the economy.
The country’s state debt is growing at a fast rate. And judging by the newly approved 2013 budget, Washington has no intention of ending the arms race. At present, the US military expenditure exceeds combined military spending of all other countries.
Experts attribute the current difficulties experienced by the US economy to the fact that it cracked under the burden of military spending, which proved too heavy for it, if not outright intolerable. According to the US Treasury Department, the unprecedented $17 trillion debt will increase to $19 trillion in the foreseeable future and exceed 100% of the country’s current GDP. On top of that, Boston University Professor Laurence Kotlikoff has established that the US budget deficit is larger than that officially reported, amounting to a whopping $200 trillion.
Trillions of dollars of state debt that are ruining the American economy did not come out of nowhere. The war in Iraq which was unleashed by the Bush administration cost US taxpayers $3 trillion, another half a trillion dollars have been spent on the military operation in Afghanistan, also started by the Republican government. An end to this spending is nowhere in sight. The Republican majority in the US Congress is pushing for so-called “nuclear modernization” which envisages the creation of 80 new types of nuclear warheads. Even though Congressmen keep mum on the cost of the program, it’s clear that it will require billions of dollars.
It’s the fifth US administration that has set its mind on promoting a missile defense program, despite the failures and costs associated with it. In accordance with the most modest estimates, more than $2 trillion have already been invested in the program and hundreds of billions will still be needed to pursue it.
The hefty sums channeled for financing military programs lead to a further increase in the US state debt. Unlike abortive missile tests, they don’t dissolve in the boundless expanses of outer space but land on specific accounts of specific individuals. These individuals are Pentagon clients and are part of military-industrial concerns, or what President Eisenhower described as the “military-industrial complex”.
The military-industrial complex has turned the arms race into an endless source of profit for weapons manufacturers and dictates policies to those in power. All hopes and election pledges on the part of aspiring politicians drown in this striving for profit which gains the upper hand, defying people’s interests and the requirements of common sense.
Ordinary Americans have to pay for it. According to an official report of the US Census Bureau, 15% of the population live below the poverty line. The position of other people whose lives are far from easy as well is not disclosed.
The generous present – the 2013 military budget – is not for them.

lunedì 24 dicembre 2012

The strange case of Grilli's house....


Italy Minister Chasing Evaders Shows Home Value Below Market

Italian Finance Minister Vittorio Grilli, appointed by Prime Minister Mario Monti to spearhead a drive to prevent tax evasion, purchased his 14-room home in Rome at a price less than the reported market values in his neighborhood and dwarfed by his mortgage, according to records of the 2004 transaction.
Documents signed by Grilli and filed with the Italian land registry say he paid 1.065 million euros ($1.42 million) for the ground-floor apartment with a garden in the hilltop Parioli quarter. Government archives show he obtained a mortgage of 1.5 million euros, or 41 percent more than the registered purchase price.
Documents signed by finance minister Vittorio Grilli and filed with the Italian land registry say he paid 1.065 million euros for the ground-floor apartment with a garden in the hilltop Parioli quarter. Photographer: Alessia Pierdomenico/Bloomberg
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Italian property sales often are reported to be less than the actual price paid to reduce taxes or skirt controls on money laundering, according to the website of the finance police, which reports to Grilli. Monti picked Grilli in November 2011 to help shore up the nation’s finances. Grilli’s crackdown has included inspections of yachts at marinas and checks of Lamborghini and Ferrari sport cars at the Cortina d’Ampezzo ski resort. Grilli increased the collection of delinquent taxes by 9 percent to 5.79 billion euros in the first 10 months of 2012 from a year ago.
Grilli, 55, said in a statement that the matter of his home purchase “at best could be considered local unfounded gossip.” He said he’s involved in divorce litigation and that allegations about the value of his assets may interfere with the case. His wife, Lisa Lowenstein, who lives in New York, declined to comment on Grilli’s statement.

‘Unprofessional and Wrong’

“It is unprofessional and wrong to criticize the financial arrangements related to the purchase of a property without knowing anything about the other standard aspects of typical client/bank relationship that underlies any commercial transactions involving loans and guarantees,” Milan-born Grilli said in an emailed statement sent Dec. 3.
“All the money related to that or any other transaction I have ever been involved is perfectly legal,” Grilli wrote. “I have never been involved in money laundering operations of any sort.”
Banca Monte dei Paschi di Siena SpA, the bank he originally borrowed from, said in an e-mailed statement that it doesn’t lend funds that exceed a purchase price. In 2004, the Siena- based bank offered loans that were capped at 95 percent of a purchase, the company said in a written response to generic questions about loan policy, before being told the query was for a story about Grilli. The bank declined to comment on Grilli’s loan.
Milan-based Intesa Sanpaolo SpA (ISP)Italy’s second-biggest bank, has held the mortgage since 2010, the records show.

Banking Association

Italian banking regulations limit mortgages to 80 percent of a home’s value unless the borrower puts up collateral, which raises the cap to no more than 100 percent, according to the Bank of Italy. Loans exceeding 80 percent of a home’s value comprised 1.7 percent of mortgages outstanding in Italy at the end of 2006, according to the central bank.
The Rome-based Italian Banking Association said legal restrictions on mortgages have prevented it from advising member banks to lend more than 100 percent of a property’s value.
Underreporting a home sale price doesn’t necessarily reduce taxes, in part because property levies are based on separate tax-roll numbers that are generally lower than market values, according to the finance police website. At the same time, “the only lawful and proper behavior is to declare the entire agreed price in the sale documents,” the site says.
Transactions have been rife with idiosyncratic reporting. Buyers sometimes agree to pay a portion of the purchase on the side in exchange for a discount, said Luca Dondi, head of the real estate research unit at Bologna-based institute Nomisma.

‘Bad Habit’

Such side payments can allow a buyer to channel previously undeclared funds into a property, according to Dondi, who wasn’t commenting specifically on Grilli’s transaction.
Senator Elio Lannutti submitted an “urgent” written query to Monti today in the Rome-based parliament, asking whether Grilli “fell into the bad habit of declaring a purchase price that is lower than the one actually paid.” If that was the case, “Grilli would be more similar to the average Italian, while his behavior would distance him from the one required by a state representative.”
Grilli has decried financial shenanigans and taken personal responsibility for leading Italy’s crackdown, which is employing new software to find anomalies in residents’ transactions.
“This government changed the rule of the game,” he said in a Nov. 7 speech in Munich. “We have our I.R.S., the internal revenue service, that depends on me, on my ministry. We now have full tools to monitor all financial activities, so your bank accounts, your transfers, everything.”
The apartment in Parioli, an embassy-filled enclave north of Rome’s ancient walls, measures 310 square meters (3,336 square feet), according to Grilli’s financial disclosure on the Italian Treasury’s website. The ceilings are 3.46 meters high, or about 11 feet, 4 inches, blueprints in the property records show. The 14 rooms include a kitchen and four bathrooms, according to the documents.

Price Range

In the first half of 2004, the value of homes in the neighborhood classified as “ordinary” -- excluding luxury properties or those in a degraded state -- ranged from 4,800 euros to 5,800 euros per square meter, according to a finance ministry database. An apartment the size of Grilli’s would have been worth between 1.49 million euros and 1.8 million euros by that measure.
For luxury properties in Parioli, declared prices in 2004 were as high as 7,340 per square meter, according to Nomisma. At 1.065 million euros, Grilli’s declared price was less than half that, at about 3,435 euros per square meter.
“There is no doubt that such a price is quite low for that part of Rome,” says Nomisma’s Dondi, who was told the apartment’s address, measurements and date of purchase. At his request, he wasn’t told the name of the owner.

‘Below Street’

The seller of the property was Massimo Tosato, executive vice chairman of London-based fund manager Schroders Plc (SDR) and a member of the board of overseers at Columbia Business School in New York. Tosato’s assistant at Schroders in London said he declined to comment.
Grilli said in his statement that it’s “wrong to speculate about the 2004 value of a property without having detailed knowledge of what the property was back then and of its past state and conditions. For example, my home lies below street level, needing substantial structural and architectural work to bring it proper living conditions.”
Raffaele De Paola, lead agent for Parioli at the Tecnocasa network of real estate agencies, said that even if the apartment “needed a total renovation, that price is low.” He said the value of the apartment was at least 2 million euros in 2004.
De Paola was shown an architectural drawing of Grilli’s apartment and told the address. At his request, he wasn’t told the name of the owner.

Declared Assets

Grilli, who has spent most of his career in civil service, bought the apartment in Rome after returning to government work from London, where was a managing director and head of Italianinvestment banking at Credit Suisse (CSGN) First Boston for about a year from 2001 through 2002.
The apartment is one of the few assets Grilli declared in his financial disclosure posted on the Treasury website. He reported that he had a life insurance policy and owned no stocks or mutual funds. His other assets included three automobiles --a 2009 Rover, 1994 Jaguar and 1975 Volkswagen --and a 9.6-meter sport boat.
Grilli worked at the Italian Treasury from 1993 through 2000 before joining Credit Suisse First Boston. After returning to Rome in 2002 to serve as Italy’s general accountant, he became head of the Treasury under the governments of Silvio Berlusconi and Romano Prodi, helping to craft an emergency budget last year. In the Monti administration, Grilli first served as deputy finance minister and then replaced Monti as finance minister in July when the premier decided he wanted someone dedicated full-time to the post.
Grilli, who holds a doctorate in economics from the University of Rochester in New York, said in October that he won’t seek a government post or a Treasury position after Italy holds its general elections, which are due in February.