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TBR News August 11, 2018

Aug 11 2018

The voice of him that crieth in the wilderness, Isaiah 40:3-8 

Washington, D.C. August 11, 2018:” “Heinrich Müller, born April 28, 1900, was allegedly killed in the street fighting in Berlin in 1945 when the Soviet Army seized the German capital.

In a Berlin cemetery there is a grave with a headstone, claiming that Heinrich Müller was buried underneath it. The memorial stone did not indicate that Müller had been an SS-Gruppenführer and a Lieutenant General in the German Police and that since 1935, was the head of the German Gestapo or the Secret State Police.

On September 25, 1963, the body was exhumed for identification.

The exhumation had been requested by the West German Ludwigsburg Center that dealt with ex-Nazis sought for prosecution. This Center had information that Müller was not dead and was, in fact, gainfully employed by a foreign government. One of the first steps in proving this was to ascertain whether the corpse in the grave was that of Heinrich Müller who had been issued a death certificate from the Death Bureau of Berlin-Center numbered 11 706/45.

A subsequent pathological examination proved that there were the remains of three different men in the grave, none of whom were Heinrich Müller.

The man being sought was the son of a minor official, had completed a primary school education, had taken technical training in aircraft engines, worked for the BMW factory, building aircraft engines and in June of 1917 had joined the German Army. Because of his background, after his preliminary training, Müller was assigned to Flieger Ausbildung Abteilung 287 in April of 1918. In the seven months remaining before the war ended, Müller was promoted to NCO in August of 1918 and won the Iron Crosses First and Second Class. He was also awarded the Bavarian pilot’s badge and after injuring his leg in an aircraft accident, the retired Bavarian pilot’s badge. Müller served on the Western Front throughout the war.

When the war was over, Müller joined the Munich Police in 1919 as a junior assistant. He passed his entrance examination and became a police officer. He was promoted to Police Secretary in 1929 and was in Section VI of the Bavarian State Police, a unit that dealt with Communist activity. In 1934, Müller and a number of his associates were transferred to the Gestapo in Berlin and joined the SS as a Sturmführer on April 20, 1934. In 1935, Müller was head of Department II (Gestapo). In 1936, he was head of the Gestapo division of the headquarters of the Security Police (Sicherheitspolizei). In 1937, he was promoted to senior police official (Kriminalrat) and in 1939, to the rank of Reichskriminaldirektor or Director of Police.

In May of 1945, Heinrich Müller was last seen in Hitler’s Berlin bunker.  Shortly after the city fell lto the Russians, the body of a senior SS officer, his wife and three children  at the Air Ministry complex. The body was identified as SS General Heinrich Müller of the Main Security Office, the RSHA. This, however was not the head of the Gestapo. He was Dr. Heinrich Müller of the RSHA legal department. Gestapo- Müller was born April 28, 1900, and his SS number was 107 043 while the Müller found in Berlin was born June 7, 1896 and his SS number was 290 396 (Source:  ‘Dienstalteresliste der Schutzstaffel der NSDAP, Berlin 1944,  pps 11-12)

Immediately following the war, in May of 1945, Gestapo- Müller was put on the American Intelligence CROWCASS (Central  Registary of War Crimes and Security Suspects) list of war criminals sought for arrest and prosecution.

In 1946, U.S. CIC reported that Gestapo-Müller had escaped to Switzerland using the name Schwartzer. (Source:  U.S. Army Intelligence file on Heinrich Müller XE 23 55 39 WJ p. 126)

In 1948, the CIA had taken over the intelligence organization being formed by the former Wehrmacht General, Reinhard Gehlen who worked prior to this for the U.S. Army. The organization was led by Lt. Colonel James Critchfield and was stationed at Pullach, south east of Munich.

At this time, Colonel Critchfield’s top recruiter was one Willi Krichbaum, then resident at Bad Reichenhall. Although Critchfield denied it later, Krichbaum was a Senior Colonel (Oberführer) in the Gestapo and Müller’s former deputy. He was born May 7, 1896 and his SS number was 107 039. During the war, Krichbaum was commander of the Geheime Feld Polizei of the Wehrmacht. (Source: Dienstalteresliste der Schutzstaffel der NSDAP, Berlin 1944,  p. 29)

Müller, had been working for Swiss intelligence under Paul Masson as an expert on Communist infiltration, was put in contact with Colonel Critchfield by Krichbaum and in August of 1948, interviewed at his home in Geneva, Switzerland by James Speyer Kronthal, the CIA’s station chief in Bern, Switzerland.

As the result of inquiries into the postwar survival of Heinrich Müller and his employment, in the United States, by the CIA and the U.S. Army, the German government’s main legal center wrote, in a report dated January 31, 2000, that although Müller was reported to have died in Berlin in 1945, their report (110 AR 1619/97, stated that Müller had escaped to Switzerland and had gone to work for the American CIA and was settled, under a false name, in Washington, was a member of the U.S. Army and died in 1973. (Source: Zentrale Stelle der Landesjustizverwaltugen Report no. 110 AR 346/.2000)

Because the hiring of Heinrich Müller was considered to be a potential serious public relations disaster, some effort has been made to strongly distance the CIA from this employment by claiming that Müller may have survived the war but never was employed by the United States government in any capacity. Photographs of Müller in the uniform of the U.S. Army’s General Staff, taken by the U.S. Army Signal Corps, show him at a White House conference in 1949.

In 1967, a series of articles on Heinrich Müller appeared in the German media, claiming he was living in Panama but it was subsequently proven that the man, who bore slight resemblance to Müller, was an expatriate American.”

The Table of Contents

  • Erdogan warns of ‘economic war’ as Turkish lira carnage spooks global markets
  • Tensions Between Turkey and U.S. Soar as Trump Orders New Sanctions
  • Turkey warns partnership with US in ‘jeopardy’
  • Saudi Arabia’s Crown Prince Picks a Very Strange Fight with Canada
  • U.S. lawmaker charged with insider trading halts re-election bid
  • Trump adviser Stone’s associate held in contempt in Russia probe: reports
  • A Dying Empire
  • The American theft of German gold

 

Erdogan warns of ‘economic war’ as Turkish lira carnage spooks global markets

The Turkish lira crash is threatening to turn into a debt and liquidity crisis with no end in sight. Instead of acting, the Turkish leadership has warned of an “economic war,” and hit back at a “currency plot.”

August 11, 2018

by Chase Winter

DW

Turkey is in the throes of a full-blown currency crisis, with little sign that the government has a plan to deal with one of the worst emerging market currency meltdowns in recent history.

The crisis threatens to throw the world’s 18th-largest economy into a downward spiral of bankruptcy and trigger contagion in emerging markets and Europe.

In a keynote speech on Saturday in the Black Sea city of Rize, President Recep Tayyip Erdogan described the currency’s fall as a “currency plot.” He said those who move the currency on financial markets think they can destroy Turkey.

He pushed back against pressure to hike interest rates which he said “should be kept to a minumum because they are a tool of exploitation that makes the poor poorer and the rich richer.”

Currency carnage

The Turkish lira fell as much as 22 percent Friday, before paring losses back to 17 percent, extending a rout in the currency from earlier this week. It stood at 6.47 to the US dollar at 1900 UTC. The lira has lost nearly 40 percent of its value since the start of the year and nearly 30 percent since Erdogan took over the office with new sweeping powers in June.

The currency carnage was pushed along on Friday by US President Donald Trump’s administration, which announced the United States would increase tariffs on Turkish steel and aluminum imports.

The tariffs themselves are minor and impact around $1 billion (€875 million) in trade, but they weighed on market confidence in the vulnerable Turkish economy.

“Their currency, the Turkish lira, slides rapidly downward against our very strong dollar,” Trump wrote on Twitter. “Our relations with Turkey are not good at this time.”

In an op-ed published in The New York Times, Erdogan said, “The United States has repeatedly and consistently failed to understand and respect the Turkish people’s concerns,” and added that “unless the United States starts respecting Turkey’s sovereignty and proves that it understands the dangers that our nation faces, our partnership could be in jeopardy.”

The continued imprisonment of US pastor Andrew Brunson has weighed heavily on relations between the United States and Turkey, leading to a series of escalations. Ties between the two NATO allies have also nosedived over American support for Syrian Kurdish forces, Ankara’s plans to buy a Russian missile system and Turkey’s demand that Washington extradite US-based Islamic cleric Fethullah Gulen, whom Erdogan blames for the failed July 2016 coup attempt. There is also an impending showdown in November over US sanctions on Iran, a major oil and gas supplier to Turkey.

More than US-Turkish tensions

While souring relations between the Washington and Ankara have added to Turkey’s economic woes, they are only a proximate cause of the market mayhem.

Observers have seen a vulnerable economy for months, something that has been exacerbated by political developments and Erdogan’s government.

Umit Akcay, a professor of economics at the Berlin School of Economics and Law, wrote on Twitter: “The warnings we have issued for months are unfortunately happening. Turkey is experiencing a currency crisis. We are entering a very difficult period. The government is responsible.”

Turkey has traditionally suffered from yawning current account deficits, which it has filled through external borrowing in foreign currency. Driven by a search for higher yields, external funds entered the Turkish economy to finance deficits, massive government spending and company borrowing. Credit-fueled growth, especially in the construction sector, helped the Turkish economy grow.

However, investors have pulled back money from the Turkish market in recent months as the US Federal Reserve raises interest rates and cuts back on asset holdings from quantitative easing in response to a robust American economy.

This has caused the dollar to increase in value, the lira to lose value and Turkish bond yields to rise. Meanwhile, inflation has jumped to over 15 percent, reaching a 14-year high.

The lira sell-off has raised concerns that Turkish firms and banks that took out loans in dollars and euros will be unable to repay their debts after years of borrowing. The currency crisis is turning into a debt and liquidity crisis.

“Turkey is threatened by a financial crisis, whereby loans are not repaid, companies file for bankruptcy and this then hits the banks. We are heading in this direction,” Turkish economist Korkut Boratav told DW.

Erdogan’s unorthodox economic policy

The pressure on Turkey is reflective of broader trends in emerging market currencies, although the lira is by far the worst performer.

That’s because investors have lost confidence in the Turkish economy under Erdogan, who believes in unorthodox economic policy, demands low interest rates and constantly assails “the interest rate lobby.”

After winning a June election that cemented expanded presidential powers, Erdogan spooked markets when he tightened his control over the central bank.

Instead of appointing technocrats like Mehmet Simsek, the former finance and economy minister, in whom international investors had faith, Erdogan appointed his son-in-law Berat Albayrak to lead the newly empowered Finance Ministry. This has raised concerns over the central bank’s independence.

Erdogan has not inspired confidence in responding to the economic meltdown. He and some of his ministers are speaking of “economic war” and a vague “campaign” waged by nefarious external powers designed to weaken Turkey.

On Friday, he again urged Turks to exchange their gold and dollars for lira. That call came as Albayrak delivered a much-touted economic plan, which fell flat and failed to address the current economic crisis.

Timothy Ash, an economist covering emerging markets, commented on Twitter that Turkey needs to act quickly instead of suggesting that the country can wait until the next monetary meeting in September.

“Turkey – reflecting on the Albayrak performance today he gave zero indication of actual policy. And he expects the market to wait till September until the MTP. That is miles away. Turkey needs policy ACTION now if it is going to manage through this,” he wrote.

Instead of taking quick and drastic action to shore up confidence, such as raising interest rates or going to the International Monetary Fund (IMF), the government is couching itself in nationalistic rhetoric of sacrifice and an escalating war of words.

On Thursday, Erdogan told supporters: “Various plots are ongoing. Don’t pay attention to these campaigns. They have the dollar, (but) we have our people … and Allah.”

Meanwhile, in his outline of Turkey’s economic plan, Albayrak tied the economic situation to the easy credit the government has used to boost growth and gain political support.

“We need to cut our external expenditures. If our salary is 2,000 lira ($300) a month, how are we buying a 5,000 lira iPhone with installment payments?”

 

 

Tensions Between Turkey and U.S. Soar as Trump Orders New Sanctions

August 10, 2018

by Carlotta Gall and Jack Ewing

The New York Times

ISTANBUL — A worsening dispute between the United States and Turkey reverberated through the global economy on Friday, hastening a broad flight of money from emerging markets and sowing instability throughout the Middle East as relations between the NATO allies neared a breaking point.

The immediate crisis — accelerated by a hostile tweet from President Trump — flared over Turkey’s continued detention of an American pastor, Andrew Brunson, who was jailed 21 months ago in a widespread crackdown after a failed coup in Turkey.

But the outsize effect reflected deepening concerns over Turkey’s economic management by President Recep Tayyip Erdogan, who was re-elected in June with near-authoritarian powers. It also increased the risk that the problems in Turkey, which borders Iran, Iraq and Syria, could destabilize economies well beyond the region.

Turkey’s economy is only the 17th largest in the world, but its problems are worsening as Mr. Trump’s trade war is rattling global commerce, damaging longtime alliances and threatening economic growth worldwide.

There is also widespread fear among foreign investors that the populist, authoritarian government of Mr. Erdogan is pursuing irresponsible economic policies while undercutting the independence of the central bank. That, analysts fear, is preventing the country from taking the necessary steps to put the economy on a more stable footing.

Turkey’s currency, the lira, which traded at 4.7 to the dollar a month ago, weakened to 6.4 to the dollar on Friday — the first time ever that it took more than 6 lira to buy a dollar. The lira has lost more than 30 percent of its value this month — roughly half of it this week.

Seeming to sense vulnerability, Mr. Trump piled on pressure and announced additional economic sanctions — doubling tariffs on imported Turkish steel to 50 percent and on aluminum to 20 percent — after having already penalized two Turkish government ministers last week.

The move effectively priced Turkish steel out of the American market, which accounts for 13 percent of Turkey’s steel exports.

“Our relations with Turkey are not good at this time!” Mr. Trump wrote.

The deepening standoff raised questions of whether the two strong-willed leaders were risking even broader chaos as they vied for the upper hand in a widening diplomatic dispute largely focused on individual personalities.

An evangelical preacher, Mr. Brunson, who has lived in Turkey for 23 years, is one of about 20 Americans, including a NASA scientist and chemistry professor from Pennsylvania, who have been swept up in Mr. Erdogan’s crackdown since the failed coup two years ago.

Mr. Erdogan says the coup was orchestrated from the United States, and specifically by a Muslim cleric, Fethullah Gulen, from his self-imposed exile in Pennsylvania. Turkish authorities have demanded that he be extradited, something American officials have dismissed, and the detained Americans are widely seen as bargaining chips.

Mr. Erdogan has shown no sign of backing down. He sounded defiant in two speeches to supporters on Friday, railing against foreign powers that he accused of orchestrating Turkey’s economic crisis, and vowing not to bow to Western pressure.

“Those who believe they can make us kneel by economic manipulation, have never understood this nation at all,” he told a crowd in Gumushane, a province on Turkey’s northern Black Sea coast. “They can’t use threatening language, blackmailing language against this nation. Especially bullying will not cut it with our nation.”

After watching Mr. Erdogan on live television, Asli Aydintasbas, senior fellow with the European Council on Foreign Relations, said, “They have no deal, their positions have hardened.”

The breakdown was surprising, she said, because Mr. Trump had appeared to reach the outlines of an agreement for the pastor’s release with Mr. Erdogan on the sidelines of the NATO summit last month.

In exchange, the United States agreed to arrange for the Turkish banker, Mehmet Hakan Atilla, who is serving a 32-month prison term in the United States, to be returned to serve the remainder of his sentence in Turkey.

After his meeting with Mr. Erdogan, Mr. Trump even threw in an extra favor, asking Israel to release a Turkish detainee, Ebru Ozkan, who was quickly freed.

Washington wanted Mr. Brunson released immediately, but the formalities of the Turkish banker’s transfer were expected to take two or three weeks, according to Ms. Aydintasbas.

The deal has not happened, she said, as Turkey has held out for further guarantees, including the lowering of a fine by the United States Treasury against the state-owned Turkish bank Halkbank for conspiring to violate United States sanctions against Iran, and a promise to cease any further prosecutions.

According to one American official, Turkey had been given a deadline to release Mr. Brunson, who is now under house arrest at his home in the Turkish coastal city of Izmir, by 6 p.m. Wednesday.

Turkey had seemed to be trying to stave off the crisis by scrambling a delegation to travel to Washington for more talks that day.

The talks did not go well, said a second American official.

“The conversations continue,” said Heather Nauert, the State Department spokeswoman, after the discussions.

By Friday Mr. Erdogan seemed determined to tough it out. He called on Turks to sell their gold and dollars and buy lira to bolster the Turkish currency.

“Those who have dollars, euros, gold under their pillows, should go and change them in our banks for the Turkish Lira,” he said. “This is a national struggle.”

“Erdogan has made a decision,” Ms. Aydintasbas said. “His speech was clearly very defiant.”

Yet Turkey’s economic situation looked increasingly fragile.

The lira’s plunge has sent shudders through financial markets because it has raised doubts about investing in Turkish securities. The yield on Turkish 10-year bonds has risen sharply, to more than 20 percent, which means traders are demanding much higher returns for what they see as an increasingly risky investment.

The anxiety extended to doubts about Asian and European banks that have heavily invested in Turkey, and it contributed to declines in stock markets around the world. As with the financial crisis set off by Greece in 2010, Friday’s events were the latest example of how troubles in a nation with a midsize economy but world-class problems could threaten financial stability further afield.

“In financial markets everything is interlinked,” said Bart Hordijk, a market analyst in Amsterdam at Monex Europe, a foreign exchange firm. “You don’t know if one bank has huge exposure to the Turkish lira.”

As a result, Mr. Hordijk said, “People scramble to safer assets.”

In power for 15 years already, Mr. Erdogan’s popularity has depended greatly on his ability to bring Turks continued economic growth. It has created a middle class beholden to him, even as he has trimmed civil liberties, jailed opponents, and constrained traditional and social media alike.

He called snap elections this year, a year and a half ahead of schedule, driven in part by signs that the economy was faltering. Yet the  lira plunged even in the midst of his re-election campaign.

The economic trouble has only worsened in the weeks since Mr. Erdogan acquired sweeping executive powers after his re-election to a newly enhanced presidential system in June.

The currency’s sharp decline has reflected concerns about the fundamentals of Mr. Erdogan’s economic model, which has depended on a voracious construction industry that his opponents say has enriched his inner circle while heaping debt on the country.

The even steeper fall in the lira since Mr. Erdogan’s re-election is now fueled by worries that he is ever more insulated and is taking no one’s economic advice but his own.

In an example of his increased role, he has resisted calls for a rise in interest rates to curb inflation and to ease pressure on the lira.

Berat Albayrak, Mr. Erdogan’s son-in-law, who has been appointed to the combined post of Treasury and Finance Minister, attempted to calm markets with a briefing to the news media.

He insisted that Turkey would respect the independence of the Central Bank even as Mr. Erdogan’s interference in monetary policy has been one of the causes of the fall of the lira, and that its economy would even show positive growth this year.

“Turkey will go further with its friends and with those who say ‘We are for winning with Turkey,’” he said. “Turkey has a very strong banking sector, it is well prepared to these kind of scenarios with its capital structure.”

Turkey also announced that Mr. Erdogan had held a telephone call with Russia’s president, Vladimir V. Putin, on Friday to discuss economic ties amid the market turmoil, The Associated Press reported. Mr. Erdogan, who has often touted his relationship with Russia as a signal that he has an alternative to relations with the West, said they discussed Russian tourism to Turkey.

The minister of trade, Ruhsar Pekcan, reacted the news of the new sanctions in measures tones, pleading for a return to negotiations.

“Turkey is deeply disappointed by the U.S. Administration’s decision to double steel and aluminum tariffs,” he said in a statement. “The tariffs were groundless when they were announced in June, and remain so now.”

“The effects of this ill-advised action by the U.S. Administration will not only impact Turkey, but will prove detrimental to American companies and workers as well.”

“We implore President Trump to return to the negotiating table — this can and should be resolved through dialogue and cooperation.”

Carlotta Gall reported from Istanbul, and Jack Ewing from Frankfurt, Germany. Gardiner Harris and Adam Goldman contributed reporting from Washington.

 

Turkey warns partnership with US in ‘jeopardy

President Erdogan says Ankara could start looking for new allies as relations with NATO partner sink to a new low.

August 11, 2018

AlJazeera

President Recep Tayyip Erdogan said Turkey’s partnership with the United States is in jeopardy, warning Ankara could start looking for new allies.

Relations between the NATO allies have sunk to their lowest point in decades over a number of issues, including the detention of US pastor Andrew Brunson on terrorism-related charges, prompting the Turkish lira to hit record lows against the dollar.

The embattled lira tumbled 16 percent against the dollar on Friday, with US President Donald Trump saying he doubled steel and aluminium tariffs on Turkey – comments that contributed to the currency’s further slide.

In a New York Times opinion piece on Saturday, Erdogan warned Washington not to risk relations with Ankara otherwise his country would look for “new friends and allies”.

“Unless the United States starts respecting Turkey’s sovereignty and proves that it understands the dangers that our nation faces, our partnership could be in jeopardy,” he wrote.

“Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives.”

‘Total disgrace’

In a tweet, Trump announced the doubling of the tariffs in new punitive actions against Turkey, saying: “Our relations with Turkey are not good at this time!”

Erdogan downplayed the currency crisis in a speech on Friday, advising Turks not to be worried over exchange-rate fluctuations.

He also said Turkey had alternatives “from Iran, to Russia, to China and some European countries”.

The arrest of Brunson in October 2016 soured deeply delicate relations with Washington. Trump has described the American’s detention as a “total disgrace” and urged Erdogan to free him “immediately”.

In Saturday’s op-ed, Erdogan said: “Attempting to force my government to intervene in the judicial process is not in line with our constitution or our shared democratic values.”

‘Shameful’

Iran’s Foreign Minister Mohammad Javad Zarif waded into the intensifying dispute between Ankara and Washington on Saturday, accusing the US of an “addiction to sanctions and bullying”.

Trump’s “jubilation in inflicting economic hardship on its NATO ally Turkey is shameful”, Zarif wrote on Twitter.

“The US has to rehabilitate its addiction to sanctions [and] bullying or the entire world will unite – beyond verbal condemnations – to force it to,” he warned.

“We’ve stood with neighbours before and will again now.”

The lira has lost more than 40 percent this year. It hit a record low after Trump announced he authorised higher tariffs on imports from Turkey, imposing duties of 20 percent on aluminium and 50 percent on steel.

Erdogan, who said a shadowy “interest rate lobby” and Western credit ratings agencies are attempting to bring down Turkey’s economy, appealed to his countrymen’s patriotism.

“If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks. This is a national, domestic battle,” he told a crowd in the northeastern city of Bayburt on Friday.

“Some countries have engaged in behaviour that protects coup plotters and knows no laws or justice,” he said. “Relations with countries who behave like this have reached a point beyond salvaging,” said Erdogan, who warned of “economic war”.

 

Saudi Arabia’s Crown Prince Picks a Very Strange Fight with Canada

August 8, 2018

by Robin Wright

The New Yorker

By social-media standards these days, a tweet sent last Thursday by Canada’s Foreign Minister, Chrystia Freeland, was hardly surprising—or a deviation from what other Western governments have said for years about Saudi Arabia’s egregious human-rights record. Her tweet addressed the case of siblings—Samar Badawi, a women’s-rights activist honored by the Obama Administration as a “woman of courage,” and her brother, Raif, a blogger who has been imprisoned since 2012, after chastising the Saudi monarchy for things like banning Valentine’s Day. Freeland tweeted, “Very alarmed to learn that Samar Badawi, Raif Badawi’s sister, has been imprisoned in Saudi Arabia. Canada stands together with the Badawi family in this difficult time, and we continue to strongly call for the release of both Raif and Samar Badawi.” The Canadian Foreign Ministry followed up with a tweet that called for the release of “all peaceful #humanrights activists” held by the Gulf monarchy. The Canadian Embassy in Riyadh then tweeted the message in Arabic.

The desert kingdom erupted in fury. Over the weekend, it expelled the Canadian Ambassador, recalled its own envoy, froze all new trade and investment, suspended flights by the state airline to Toronto, and ordered thousands of Saudi students to leave Canada and get their education in other countries. Its Foreign Ministry counter-tweeted, “The Canadian position is an overt and blatant interference in the internal affairs of the Kingdom of #SaudiArabia and is in contravention of the most basic international norms and all the charters governing relations between States.” Further, it issued a warning: “Any further step from the Canadian side in that direction will be considered as acknowledgment of our right to interfere in the Canadian domestic affairs.”

Canada stood its ground. “Let me be very clear, Canada will always stand up for human rights in Canada and around the world,” Freeland said, in Vancouver, on Monday.

The flap underscores the volatility—and potentially even the fragility—of the Saudi government under Crown Prince Mohammed bin Salman, the youthful and increasingly autocratic leader, who has been enthusiastically embraced by President Trump and has been consolidating power since his surprise appointment, a year ago. At thirty-two, he is one of the youngest leaders in the Middle East. His ailing father, King Salman, has the final word, but bin Salman rules political, economic, military, and diplomatic affairs day to day. M.B.S., as he’s widely known, has been increasingly intolerant of criticism at home and—now—from major foreign powers, according to Bruce Riedel, a former C.I.A., Pentagon, and National Security Council staffer, who is now at the Brookings Institution. “He is very thin-skinned,” Riedel told me.

President Trump’s support, and a personal connection to Trump’s son-in-law, Jared Kushner, may have caused M.B.S. to feel that he has impunity to do as he pleases on the global stage. Trump’s first stop on his inaugural foreign trip as President was in Saudi Arabia, a visit orchestrated—with much fanfare—by the crown prince. Unlike the government in Canada, the Trump Administration has shied away from invoking human-rights issues with the Saudis, despite a graphic State Department report, released in April, detailing the sweeping scope of violations in the kingdom. The section on Saudi Arabia in the State Department’s 2017 Human Rights Report runs long—more than fifty pages. It cites the most significant abuses as torture; arbitrary arrest; unlawful killings; execution without requisite due process; restrictions on freedom of expression, religion, and peaceful assembly; trafficking in persons; violence and discrimination against women; criminalization of same-sex sexual activity; and the inability of its people to choose a government through free and fair elections.

Jamal Khashoggi, a former Saudi editor, now in exile in Washington, said that the crown prince has already become more authoritarian than any of the previous six kings who have ruled since 1953, when Ibn Saud, the founder of modern Saudi Arabia, died. “Today, he is in charge of Saudi Arabia. He thinks everyone should treat him as such,” Khashoggi told me.

During the past year, M.B.S. has run an intensive charm offensive in the United States and Europe—courting political leaders, tech titans, celebrities, society names, and academics. At the same time, the crown prince is behind the most aggressive foreign policy since Ibn Saud conquered rival tribes on the Arabian Peninsula to create the current kingdom. The gambits in international affairs by M.B.S., who is the first member of the royal family’s third generation to be chosen as heir, have been widely criticized.

“The Canadian campaign is the latest in a series of disastrous foreign-policy initiatives from M.B.S.,” Riedel told me. In 2015, in the role of Saudi Defense Minister, the crown prince launched a costly military intervention in Yemen, in turn producing the worst humanitarian crisis in the world. Twenty-two million Yemenis—eighty per cent of the population—now depend on humanitarian aid for daily survival. Sixteen million people lack access to fresh water. Eight million are believed to be on the brink of starvation. Yemen is also suffering the largest outbreak of cholera in recent history—more than a million cases.

In 2017, M.B.S. masterminded the air, sea, and land blockade of Qatar, a small neighboring sheikdom, which the crown prince reportedly wanted to invade. A few months later, M.B.S. summoned Lebanon’s Prime Minister, Saad Hariri, and pressured him to resign—on Saudi television.

“They are all hasty and uncalculated decisions,” Khashoggi told me. “The crown prince is a poor decision-maker with a track record of incompetence,” Riedel said.

M.B.S. is also daring to confront Western nations, including countries important to Saudi security and economic development. In 2015, the year his ailing father ascended the throne, Saudi Arabia recalled its Ambassador to Sweden—also in a dispute about the case of the human-rights activist Raif Badawi. The young blogger had been sentenced to ten years in prison, a thousand lashes, and a fine of more than a quarter million dollars for mocking the kingdom’s rigid social restrictions on his Saudi Liberal Network Web site. Saudi officials charged the father of three with undermining national security. The lashes were supposed to be spread out—fifty per week for twenty weeks—though they were suspended after the first round. Sweden’s Foreign Minister, Margot Wallström, called the sentence “medieval” and suggested that the Royal House of Saud was a dictatorship.

Tensions deepened with Germany, too, in November, after Sigmar Gabriel, then the Foreign Minister, criticized “adventurism” in the Middle East in remarks that the kingdom took as a reference to its intervention in Yemen and as a suggestion that the Lebanese Prime Minister was being held in Saudi Arabia against his will. In January, Germany suspended arms exports to the Saudis, citing the war in Yemen. In May, M.B.S. decreed that no more government contracts were to be awarded to German companies, Der Spiegel reported.

The same impulsive anger triggered the response to the initial Canadian tweet—and translation into Arabic—of the Foreign Minister’s message, Khashoggi said. “It is the pattern of behavior that has been dictating Saudi foreign policy since M.B.S. came to power,” he said. “It was taken as an offense on M.B.S.’s own turf. He saw it as an insult to his ability to control the Saudi masses.”

M.B.S.’s motive may also be part of a strategy to challenge nations that advocate a U.N.-led inquiry into Saudi abuses in Yemen, including air strikes that killed civilians. “Timing of Saudi crown prince’s lashing out at Canada for protesting his repression suggests his real aim is to dissuade governments next month from continuing the UN investigation of Saudi-led war crimes in Yemen,” Ken Roth, the executive director of Human Rights Watch, tweeted, on Tuesday. “Time to redouble support for the UN probe.” The U.N. General Assembly, attended by dozens of heads of state, opens next month in New York.

The crown prince’s actions belie the image he is trying to create. He has grandiose plans for diversifying the kingdom economically, beyond the oil industry, but since last fall the government has arrested dozens of leading business figures. He has talked about “moderate Islam” even as some moderate clerics have been detained. And, as he opened the way, this month, for women to be allowed to drive, his government arrested several women’s-rights activists, including the lawyer Samar Badawi. She has challenged cultural restrictions, including rules that require women to get a male guardian’s permission to get advanced education, a job, or a passport to travel abroad.

Unlike Trump, Canadian leaders have consistently supported the Badawi family. In 2013, a year after Raif Badawi’s arrest, Prime Minister Stephen Harper, of the Conservative Party, granted Badawi’s wife and children political asylum in Canada. This summer, under Prime Minister Justin Trudeau, of the Liberal Party, Canada granted them citizenship. After Canada called for the release Saudi Arabia’s peaceful activists, Marie-Pier Baril, a spokesperson for the Foreign Ministry, vowed, “Our government will never hesitate to promote these values.”

 

 

U.S. lawmaker charged with insider trading halts re-election bid

August 11, 2018

by Susan Cornwell

Reuters

WASHINGTON (Reuters) – U.S. Representative Chris Collins, an ally of President Donald Trump charged with taking part in an insider trading scheme, halted his campaign for re-election on Saturday, as Republicans sought to minimize the damage from his case ahead of November’s midterm elections.

Collins said in a statement his decision was in the best interest of his constituents in New York, as well as the Republican Party and “President Trump’s agenda.”

Collins was charged earlier this week with taking part in an insider trading scheme involving an Australian biotechnology company, Innate Immunotherapeutics LTD, on whose board he served. He has denied the charges.

Collins, 68, said he would fill out the remaining few months of his term in office. “I will also continue to fight the meritless charges brought against me and I look forward to having my good name cleared of any wrongdoing,” he said in the statement posted on Twitter.

Republican leaders backed Collins’ move.

“I respect Chris Collins’ decision to step down while he faces these serious allegations. As I’ve said before, Congress must hold ourselves to the highest possible standards,” said Representative Steve Stivers, chairman of the National Republican Congressional Committee, which works to elect Republicans to the House of Representatives.

Republicans are nervous about their prospects for retaining their majorities in Congress in the Nov. 6 election, in which all 435 House seats and 35 of the 100 Senate seats will be up for grabs. Democrats need to pick up 23 seats to take control

of the House.

Collins, who was one of Trump’s earliest supporters in Congress, had been seeking a fourth two-year term in the solidly Republican 27th congressional district in the western part of New York.

Non-partisan analysts had predicted Collins would win re-election, but his indictment put Republicans on the defensive.

House Democratic Leader Nancy Pelosi called Collins’ decision to halt his campaign too little, too late and said he should resign. “Speaker (Paul) Ryan must call on Congressman Collins to resign,” she said in a statement.

Democrats have said the charges against Collins are an example of a “culture of corruption” under Trump, pointing to ethics scandals that have ensnared several cabinet members and to the trial of Trump’s former campaign chairman Paul Manafort on bank and tax fraud charges.

REPLACING A CANDIDATE

Although Collins has said he is halting his campaign, New York state law restricts political candidates from being easily replaced on ballots, unless a candidate dies, moves out of state or is nominated for another office.

“The only way he (Collins) can be replaced is if the Republicans are brazen enough to run him for another office,” said Jerry Goldfeder, special counsel at Stroock, a law firm in New York.

One Republican operative said it was likely local officials will nominate Collins to a clerkship, so as to remove him from the House ballot. Erie County Comptroller Stefan Mychajliw said on Saturday on Twitter that if this happens, he will seek the nomination for the Republican Party to run against Democrat Nate McMurray for the House seat.

Republicans were also given cause for concern about November after their underwhelming showing on Tuesday in a special election for a House seat in a reliably conservative district of Ohio. Republican Troy Balderson appeared to eke out a victory against Democrat Danny O’Connor, but that is not yet certain, as he had a tiny margin, and state officials must still count thousands of provisional and absentee ballots.

The indictment issued on Wednesday charged Collins, his son, Cameron, and Stephen Zarsky, the father of Cameron Collins’ fiancee, with securities fraud, wire fraud and other crimes. All three defendants pleaded not guilty.

Reporting by Susan Cornwell; Editing by Steve Orlofsky and Frances Kerry

 

Trump adviser Stone’s associate held in contempt in Russia probe: reports

August 10, 2018

Reuters

WASHINGTON (Reuters) – An associate of U.S. President Donald Trump’s longtime adviser Roger Stone was found in contempt on Friday after refusing to appear as a witness before a grand jury convened as part of U.S. Special Counsel Robert Mueller’s Russia probe, U.S. media reported. Andrew Miller’s refusal to comply with the subpoena from Mueller’s office prompted a sealed hearing before a federal judge, who then made the ruling, the Washington Post and CNN reported.

In a related development, another Stone associate, comedian and talk show host Randy Credico confirmed that he had been subpoenaed by the special counsel’s office, which is probing alleged Russian interference in the 2016 U.S. presidential election.

Credico told Reuters that he had been summoned to testify before a grand jury on September 7. CNN first reported the subpoena.

CNN also reported that Kristin Davis, another Stone ally and one-time Manhattan madam, was scheduled to appear before the grand jury on Friday.

The latest witnesses in Mueller’s probe appear to suggest it is focusing at least in part on Stone, an early Trump backer with a reputation as an aggressive political operative.

Russia has denied any meddling in the election. Trump has repeatedly said there was no collusion between his campaign and Russia and has called Mueller’s investigation a witch hunt.

Stone, who has denied any wrongdoing, has previously said that eight of his associates have been contacted by Mueller but that the special counsel’s team has not contacted him.

Mueller issued a subpoena to Miller earlier this year, making him the third Stone associate to be identified as having been contacted by Mueller’s investigators.

Miller’s lawyer had sought to quash the subpoena.

That challenge was rejected, however, and U.S. District Chief Judge Beryl Howell on Friday found Miller in contempt but stayed the order pending appeal, the Post reported.

Jason Sullivan, a social media expert who worked with Stone, has testified to the grand jury. John Kakanis, an assistant and driver for Stone, has also been subpoenaed.

Mueller’s outreach may mean he is focusing in part on whether Stone may have had advance knowledge of material detrimental to Trump’s 2016 Democratic opponent Hillary Clinton that U.S. intelligence agencies have concluded was obtained by Russia through hacking

Mueller’s outreach may mean he is focusing in part on whether Stone may have had advance knowledge of material detrimental to Trump’s 2016 Democratic opponent Hillary Clinton that U.S. intelligence agencies have concluded was obtained by Russia through hacking.

The U.S. Senate intelligence panel, which is among several congressional committees conducting Russia probes, is also investigating Wikileaks’ role.

Reporting by Mark Hosenball; Writing by Susan Heavey Editing by Paul Simao

 

A Dying Empire

August 11, 2018

by Christian Jürs

There has recently appeared in intelligence circles inside the Beltway, a highly classified report by a German intelligence agency giving a horrifying report on burgeoning American social and economic problems. I have a copy of this but there is no way I would print it in toto. But from it, I learn that 1,652,832 Amercans are now homeless. This documented report speaks to those unfortunates now living on the streets, in cars, in homeless shelters, or in subsidized transitional housing . Of that number, 582,348 were family groups, 582,981 were individuals, and a quarter of the entire group were children under the age of ten.

135,592 individuals, or 15% of the homeless population, are considered “chronically homeless.” Chronic homelessness is defined as an individual who has a disability and has experienced homelessness for a year or longer, or and individual who has a disability and has experienced at least four episodes of homelessness in the last three years (must be a cumulative of 12 months).

Families with at least one adult member who meets that description are also considered chronically homeless and the greater number of these tend to have high rates of behavioral health problems, including severe mental illness and substance use disorders; conditions that may be exacerbated by physical illness, injury, or trauma.”

47,725, or about 18% of the homeless population, are veterans.

Homeless veterans have served in several different conflicts from WWII to the recent wars in Afghanistan and Iraq. The nation’s capital has the highest rate of veteran homelessness in the nation (282.7 homeless veterans per 10,000). 45% of homeless veterans are black or Hispanic. While less than 10% of homeless veterans are women, that number is seen to be sharply rising.

1.4 million veterans are at risk of homelessness. This is partially due to poverty, overcrowding in government housing, and a wide spread lack of governmental support networks. This report  indicates that those who served in the late Vietnam and post-Vietnam era are at greatest risk of homelessness. War-related disabilities or disorders often contribute to veteran homelessness, including physical disabilities, Post Traumatic Stress Disorder (PTSD), traumatic brain injury, depression and anxiety, and addiction.

821,000 unaccompanied, single youth and young adults under the age of 24 experience a homelessness episode of longer than one week. Approximately 531,000 of that total are under the age of 18.

Accurately counting homeless children and youth is particularly difficult.

270,000 LGBTQ youth in the U.S. are homeless. This is one of the most vulnerable homeless populations. A substantial number of young people who identify as LGBTQ say that they live in a community that is not accepting of LGBTQ people. In fact, LGBTQ youths make up 20% of runaway youths in the United States today. Family rejection, physical and sexual abuse, and parental and societal neglect are major reasons LGBTQ youth end up on the streets.

Additionally, homeless LGBTQ youth are substantially more likely than heterosexual homeless youth to be victims of sexual assault and abuse. LGBTQ homeless youth are twice as likely to commit suicide compared to heterosexual homeless youth.

Sixty-two percent of the homeless population are over the age of 50. These individuals often face additional health and safety risks associated with age. They are more prone to injuries from falls, and may suffer from cognitive impairment, vision or hearing loss, major depression, and chronic conditions like diabetes and arthritis.

There is no doubt this highly negative report is accurate and wherever possible, I have been able to verify the depressing and potentially very dangerous numbers.

Unless the government agencies make a sincere effort to address these growing and worsening problems, there is very rough sailing ahead for complaisant and corrupt Washington.”

Although it would be impossible to ascertain actual figures from any official American institution, nevertheless, figures found on many other business and other sources show that America has over 90 millions of unemployed citizens, 41.97 million on food stamps, 48 million without health insurance, with 43.1 million Americans existing below the official poverty level.

Taxpayers monies given to the government could provide significant assistance to these people but most of the money goes to an enormous, and not publicized, military budget.

The figures for this expenditure are carefully concealed from the public and official estimates are deliberately kept as low and obscure as possible. In actuality, there are more unemployed, by percentage, that were out of work at the height of the 1929 economic collapse in 1938.

Official figures and statements from government sources and from government-friendly media sources are never truthful and are designed to deliberately mislead the public.

For example, many media stories that proclaim the United States as the world’s largest source of oil are pure fiction.

Russia is the world’s leading source, followed by a number of MidEast countries.

Stories that “shale oil” production is vitally important are untrue.

Shale oil must be heavily refined before it can be used and is very expensive to produce.

The American public is no longer as reliant on print media news as it once was and the most important American newspapers are all teetering on the edge of economic collapse, as witness their “pay walls” and hysterical efforts to get readers to subscribe to their online fabrications.

Official Washington does not like to admit it but millions of self-employed Americans don’t pay income taxes and their government is frantically trying to force foreign banks to search for, and deliver to Washington, hidden American assets.

An empire in decline always manages to have excellent law enforcement and domestic intelligence agencies ready and willing to suppress and extract money from their increasingly impoverished citizens.”

 

The American theft of German gold

Since before World War II, Fort Knox, America’s delegated repository for gold, served as the safe haven for much of the gold legally belonging to foreign nations.

In the 1930s, fears that Europe would be overrun by Hitler’s Wehrmacht sent the gold from Eastern Europe, France, and Great Britain to Fort Knox for safekeeping.

Those same fears mounted during the Cold War era.

There was exactly the same scenario with the German, French, Dutch, British or Belgian gold during the created threat of Soviet military units overrunning Europe.

This gold was sent across the Atlantic for safekeeping by the US Treasury.

However, instead of storing it in Fort Knox secure vaults, the American

Treasury gave it instead to the Federal Reserve as collateral for the loans (currently $19.5 trillion) which the private Federal Reserve Corporation made to the US Treasury, in exchange for which the Treasury issued IOUs in the form of T-Bills to be held by the Federal Reserve.

The bullion vault at Fort Knox, Kentucky, an American military installation, has indeed held a large amount of the U.S. gold reserves in the past, but now the Federal Reserve Bank of New York holds the prize as the world’s biggest known stockpile of gold, some 550,000 bars, buried deep into the bedrock of lower Manhattan. That’s $203.3 billion worth of gold in a single place.

Just 2% to 5% of it is owned by the U.S. government, though. The rest is owned by foreign countries.

The New York-based, privately owned, Federal Reserve has been acting as the guardian and custodian of the gold on behalf of account holders, which include the US government, foreign governments, other central banks and official international organizations.

Federal Reserve is not an official American government bank but is an amalgam of twelve private banks.

America’s private central bank began taking foreign gold deposits when it opened in 1924.

Gold custody is one of several financial services the Federal Reserve Bank of New York provides to central banks, governments and official international organizations on behalf of the Federal Reserve System.

Currently, The Federal Reserve is holding 7.4 million ounces, or $6.8 billion, worth of gold and 134.9 million ounces, or $2.2 billion, of silver in storage.

None of the gold stored in the vault belongs to the New York Fed (or the Federal Reserve System.) The New York Federal Reserve acts as the guardian and custodian of the gold on behalf of account holders, which include the U.S. government, foreign governments, other central banks, and official international organizations. No individuals or private sector entities are permitted to store gold in the vault.

Holdings in the gold vault continued to increase and peaked in 1973, shortly after the United States suspended convertibility of dollars into gold for foreign governments. At its peak, the vault contained over 12,000 tons of monetary gold. Since that time, gold deposit and withdrawal activity has slowed and the vault has experienced a gradual but steady decline in overall holdings. However, the vault today remains the world’s largest known depository of monetary gold.

98 percent of Gold at Federal Reserve Bank of New York is owned by central banks of foreign nations and 2 percent is owned by United States of America.

As of 2017, the vault houses approximately 508,000 gold bars, with a combined weight of approximately 6,350 tons.

The vault is able to support this weight because it rests on the bedrock of Manhattan Island, 80 feet below street level and 50 feet below sea level.

The largest foreign gold holder at the New York Federal Reserve gold vaults is the International Monetary Fund, with a holding of over 2,000 tons.

The next largest gold holder has been the Deutsche Bundesbank, which at the end of 2015 reported that it held 1,347.4 tons in the New York vaults.

After this, the Banca d’Italia says that it holds a substantial amount of gold in New York, estimated to be over 1,000 tons.

The Dutch central bank, De Nederlandsche Bank, holds 190 tons of its gold with the New York Federal Reserve.

In total, the IMF, Bundesbank, Banca d’Italia and De Nederlandsche Bank officially could hold more than 4,700 tons of gold in New York, which would account for approximately 80% of the total gold held in the Federal Reserve Bank vaults.

As to whether all of this gold is actually in the main and auxiliary vaults is another matter entirely.

In November 2014, the Dutch central bank, De Nederlandsche Bank (DNB) announced that it had repatriated approximately 122 tons of its gold from the New York Fed. This would leave the DNB with approximately 190 tons of gold still left in New York.

Other central bank gold customers of the New York Fed include the following.

  • The Swedish Riksbank holds 13.2 tons of gold (10.7% of its 125.7 gold reserves) at the Federal Reserve Bank of New York.
  • The Central Bank of Finland holds 8.8 tons of its gold reserves (18% of its 49,5 tons total) with the New York Federal Reserve.

Other gold account customers of the FRBNY include

  • the Bank of Greece
  •  the Bank for International Settlements (BIS),
  • the European Central Bank (ECB),
  • Banque du Liban (Lebanon),
  • Central Bank of Afghanistan,
  • and the Bank of Ghana.

As a result of increasing concerns expressed by a number of German politicians and Germany’s financial policeman, its National Audit Office, the Bundesbank is to check up on Germany’s gold reserves, an estimated two-thirds of which are stored outside Germany. The Bundesbank has also revealed that a physical check of Germany’s gold has never been carried out.

A large proportion of Germany’s gold reserves is stored abroad in vaults in the US, Britain and France. The gold bars have not been inspected by German officials for decades, prompting German federal auditors to call for a long overdue stock-take.

As the European single currency zone crisis rumbles on from one summit to the next with no resolution in sight, Germany’s National Audit Office and some of the country’s politicians have become increasingly edgy about the country’s gold serves, nearly three quarters of which are held outwith Germany.

There are historical reasons for Germany not having its own Fort Knox. The quid pro quo for (West) Germany was allied troops being stationed in West Germany long after the Second World War had ended.

With only about 30% of Germany’s gold reserves being held in German custody and the remainder far away from Frankfurt, Germany’s National Audit Office – the organisation independent of government that keeps an eye on Germany’s finances – has queried whether the German central bank, the Bundesbank, has been regularly keeping tabs on German gold bullion.

The National Audit Office is concerned that no physical checks have been carried out.

The Bundesbank reacted to the National Audit Office’s demands emphasising it does not doubt ‘the integrity, reputation and safety’ of foreign storage sites, relying on documentation and procedures in place to provide proof and traceability of German gold reserves stored abroad over past decades.

Nonetheless, to allay audit office concerns, the Bundesbank made arrangements to repatriate some of Germany’s gold reserves and test the gold for purity. The Bundesbank had agreed to ship 150 tons of gold currently stored at the New York Federal Reserve to Germany.

German concerns mounted after a delegation of German federal politicians requested an inspection of German gold reserves stored at the Banque de France, France’s central bank, in Paris. The group were turned away by officials who said there were no visiting facilities at their vaults.

Now, the official view in Germany is that the Bundesbank has no reason to doubt that all German gold reserves stored in foreign countries can be properly accounted for.

On January 16, 2013 Germany’s central bank, the Bundesbank, said it would ship back home all 374 tons it had stored with the Banque de France in Paris, as well as 300 tons held in Manhattan by the US Federal Reserve, by 2020.

That having been said, the Federal Bank of Germany has only managed to bring home a paltry 37 tons of gold.

And only 5 tons of that came from the US, the rest coming from Paris. The US Fed holds 45% or roughly $635 billion of the total 3,396 tons of gold Germany has in reserve, the world’s second largest hoard.

Needless to say this prompted renewed questions as to whether Germany’s gold still exists in those Manhattan vaults or if it has been sold to others.

Ending talk of repatriating the world’s second-biggest gold reserves removes a potential irritant in U.S.-German relations.

It’s also a political rebuff to critics including the anti-euro ‘Alternative for Germany’ party, which says all the gold should be returned to Frankfurt so it can’t be impounded to blackmail Germany into keeping the currency union together.

As an enforced NATO partner of the U.S. during the Cold War, many German institutions were heavily infiltrated by American agents, such as CIA personnel, and the current German government does not wish to create serious problems by antagonizing the United States.

In sum, the Merkel government is willing to cover up the theft of their gold by the Amereicans for political reasons.

German gold is also held at The Bank of England which stores 13% in London, while the Bank of France in Paris has 11% in total and the remainder is held at the Bundesbank’s headquarters in Frankfurt.

The gold that was claimed to have been returned to Germany at Frankfurt was never shown to the public but was said to have been melted down immediately to  “bring the bullion to the current bar standard.” Germany holds more than 3,000 tons of gold bullion, which represents more than 75 percent of its foreign currency reserves.

It is well-known in the American banking community that the U.S. Treasury will never be able to repay $19.5 trillion which is owes to the Federal Reserve banks for loans, based on the gold the Federal Reserve has held as security for their loans to the U.S. government. Because the U.S. Treasury was unable to repay these loans the Federal Reserve sold all the gold to the Chinese government and they regard the the promissory notes from the Treasury (the T-Bills) as so much worthless paper.

The US Government will most certainly never have the money to redeem $19.5 trillion out of the taxes it collects, so the only way to repay the Federal Reserve is to borrow more money from the Federal Reserve to repay the older loans, with, of course the interest.

Thus, the Federal Reserve will never have to give back the gold to the Treasury, and has paid the U.S. Treasury debt and has kept some of the gold to cover itself.

When the foreign depositors, such as Germany, come to the US Government Treasury and ask for their gold back, the US Government does not have it, and has not had it in its possession in Fort Knox since soon after the end of WWII.

The final conclusion is that the U.S. Government has converted hundreds of trillions of other nations’ gold to act as collateral for its own borrowing and profligate spending, on endless wars, political corruption, bribery, and baldfaced theft.

 

 

 

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