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Spring Issue • 2013

TH E TE M P LE O F TH E M O N EY LE N D E R S

Eugene Gregan

Vol. XXI, No. 34


The Obituary for Democracy Editor and Publisher Gerald Celente

It’s official. In the West, democracy is dead. “Elected” governments are a front. Politicians are little more than wiseguys for the Money Mafia. On April 17, “The Paper of Record,” The New York Times wrote Democracy’s obituary:

Executive Editor John Anthony West Senior Editor Alex Silberman Contributing Editors Dr. Paul Craig Roberts Bennett Daviss Eldad Benary

Subscriptions Manager Emily Arter Cover Art Eugene Gregan Illustrations Anthony Freda / Dan Zollinger Photo Michael Bloom Design Norgaard Advertising & Design

All rights reserved. For information on permission to reproduce or translate material from The Trends Journal ®, please contact The Trends Research Institute. The Trends Journal (ISSN 1065-2094) is published quarterly by The Trends Research Institute. ©2013. Globalnomic, Trends Journal , Trend Alert, Trends in The News and History Before it Happens are registered trademarks of the Trends Research Institute.

The Trends Research Institute P.O. Box 3476, Kingston, NY 12402 845 331-3500 www.trendsresearch.com

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michaelbloomphoto.com

Consulting Editor Lynn Hazlewood

Euro Zone Crisis Has Increased I.M.F.’s Power FRANKFURT — When Wolfgang Schäuble, the German finance minister and war horse of European politics, celebrated his 70th birthday at a theater in Berlin last September, two of the most powerful women in the world offered warm words in his honor. One was Chancellor Angela Merkel. The other, delivering the keynote speech, was Christine Lagarde, the managing director of the International Monetary Fund. Ms. Lagarde’s presence reflected her close, longtime friendship with Mr. Schäuble. But it also was a confirmation of the enormous stature that Ms. Lagarde and the I.M.F. have acquired in Europe as a result of the euro crisis. The I.M.F. has more say over crisis management than many euro zone members, and Ms. Lagarde has become a quasi head of state, whose views carry more weight than those of many elected leaders. Indeed, without the I.M.F.’s money and advice, the euro zone might have fallen apart by now. Besides the money the I.M.F. has provided … the organization has played the role of outside expert, aloof from national politics. In the absence of a strong federal government in Europe, Ms. Lagarde helps impose order on quarreling national leaders. According to the Times, it is Christine Lagarde, La Donna of the International Mafia Federation (aka The I.M.F.) who, as “quasi head of state,” wields the power to keep the “quarreling” Euro-wiseguys in line. To varying degrees, it’s the same throughout the West: The Federal Reserve, European Central Bank, The City of London and all those “too big to fail” banks and financial institutions also “impose order” and “carry more weight than many elected leaders.” They make the rules, write the laws and the political wiseguys make sure their “soldiers” (goon squads) enforce the laws. While the Times makes it clear who’s in charge, they camouflage the takeover in White Shoe Boy lingo, implying how beneficial it is to have the money powers in control. Democracy is dead! Viva la Mafia. Can the Money Mafia be defeated? Can Democracy be restored? Yes! In this Trends Journal, not only do we identify the seemingly insurmountable obstacles, we provide insights and strategies on how to overcome them and, in doing so, create a civilization worthy of the name. While we point the way, in the end, the future really depends upon you.

Gerald Celente Publisher

The Trends Journal • Spring 2013


Holding the Future For Ransom FROM HERE TO TIMBUKTU

The Fiscal Cliff, wars, the economy … and preempting it all, in the United States, was the “call to arms” to disarm. Eleven days before Christmas, 20 year old Adam Lanza The Old Year ended with the United States, the world’s largwent out of his mind and gunned down 20 school children est economy, teetering on the edge of the Fiscal Cliff. and seven adults, including his mother. While gun violence Would it go over? If it did, what would happen? Could in America is as old as its history, the massacre of little chilAmerica be saved? dren propelled the nation into a gun control frenzy. Just when all seemed lost, suddenly, from out of nowhere, While everyone was horrified by the slaughter, from “Sequestration” galloped to the rescue. the White House to Town Hall, politicians across AmerNobody really knew what a “sequester” was, but it ica ramped up the “we can never let this happen again,” sounded important and, it was claimed, could prevent the rhetoric. And the Presstitute media, setting the bar at a nation from going over the cliff. And, we were warned, snake-level low, put microphones in front of the faces of if “sequestration” wasn’t quickly and expertly performed, shocked little kids asking them how they felt about their the nation was doomed. playmates and schoolmates being murdered. The other news making the news as the New Year began Yet, absent from the fervent gun control debate was was the French invasion of Mali and the deadly hostage a simple question: was Adam Lanza, like so many of the massacre in Algeria that immediately followed, the “payother deranged kids before him back” promised by Malian forces who had committed ghastly in retaliation for the French in“ … was Adam Lanza, like so many of mass murders, whacked out on vasion. (See, “War or Peace,” the other deranged kids before him who psychotropic drugs? It was a Trends Journal, Winter 2013). taboo topic that couldn’t be adAccording to the Western had committed ghastly mass murders, dressed on US network and cable Presstitutes, France, in the whacked out on psychotropic drugs?” news programs sponsored by Big name of “Liberty, Equality Pharma, nor debated by a US and Fraternity,” had been duty Congress so lavishly enriched and heavily lobbied by the bound to invade its former colony (once known as Frenchdrug industry. Sudan) to save the impoverished, freedom-loving people of Mali from radical Islamic fundamentalists with ties to ONGOING LUNACY Al Qaeda. And besides, the Malian government had reAnother month another massacre, another day another quested the invasion, at least according to France. disaster. On April 15, two homemade bombs killed three That the current Malian government had come to powand injured scores at the finish line of the Boston Marer by overthrowing a democratically elected government, athon. Tragedy piled atop tragedy, most of it man (and that the coup leaders were trained by the United States woman) made. and that Mali’s gold production had risen from 43 tons in Name a country, pick a place, chose a category – eco2011 to 50 tons in 2012 were minor details excluded from nomic, geopolitical, social, military, environmental – the the official “why the French invaded” fairy tale. scope of disasters was growing exponentially and, in the As Spring sprung, tensions were again rising between brave new Internet and iPhone world, daily doses of madChina and Japan as a result of the ongoing territorial disness and dysfunction were instantly transmitted in raw pute over islands in the East China Sea, and the familiar and living color. This was New Millennium news, reported ritual of North Korea and the United States calling each on the scene, at the moment, unfiltered. other nasty names and making serious threats climbed The events ringing out the old year, ringing in the back into the headlines. new, and sprouting with the spring, were not aberrations On the global economic front, the general sentiment or rare moments of madness. They were simply the latest was that the worst of the financial crisis was over. What episodes in the ongoing lunacy. What was different? The was new, however, was that, after five years of central bank pace of the madness was escalating, as was its magnitude. money pumping to stimulate sagging economies, there Could anything or anyone change it or stop it, or was was a growing belief that near-zero-interest-rate cheap the future a fait accompli? money schemes were only a temporary fix.

The Trends Journal • Spring 2013

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Anthony Freda / Dan Zollinger

I Don’t Want to Hear It

Yesterday, Today and Tomorrow What

will it take to create a brighter future? Can it be done? Is it possible? If so, why has it not already happened? What’s holding it back? Until recently, polls in developed countries (most notably, the United States) invariably showed that people believed the future would be brighter than the past; that the children of each new generation would be better off than their parents. The polls no longer show that. Look around the world. How many countries are wracked by economic crises? Youth unemployment averages between 15 and 55 percent in many advanced economies. Young people with college degrees are deep in student debt and can’t find jobs. And, more often than not, those who do find jobs find that they don’t pay a living wage. Most young people are cynical. Few hope for a brighter future. Look around the world! There are the legions of unemployed and underemployed people who, having worked all their lives, are losing everything or barely making ends meet. Virtually everywhere, the middle class is under siege and disappearing. Polls now show that vast numbers of potential retirees, with little or no savings, with pensions and benefits slashed, expect to work until they drop. The longer they work, the fewer job openings there will be for the young who would normally be replacing them. Or, conversely, when the young are hired to replace skilled

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and experienced elders, they are required to carry twice the work load, at half the pay. In a blink of the cosmic eye, the past now looks brighter than the present, and a lot brighter than the future. Yet, even though the polls are reflecting what people feel, and though straitened real-life circumstances are validating their cynicism and pessimism, there is a curious and almost inexplicable disconnect between what people feel and know, and what they are willing to hear. Note: The following represents a sampling of some typical exchanges between Gerald Celente and Trends Journal subscribers. The correspondent, “Frank,” relates his experience when trying to present hard facts and harsh realities to friends and family who “just don’t want to hear it.” We’ve put this into a conversational format that conveys the spirit of the dialogue. We call it:

THE GREAT “I DON’T WANT TO HEAR IT” TREND Frank: You know Gerald, it’s getting to the point where I can’t stand people who won’t wake up. Their hypocrisy is so in your face that it’s laughable. Anytime I confront them with information and facts that make them uncomfortable, they say, “I don’t want to hear it.” GC: I know, we hear that all the time. Frank: People say, “I don’t want to hear about what’s going on, if what’s going on is going to upset or depress me.” GC: We hear that all the time.

The Trends Journal • Spring 2013


Frank: People say, “Since there’s nothing that I can do about it anyhow, why should I listen?” GC: We hear it all the time. Frank: I try to wake up my friends and my family but they don’t want to hear it. GC: Just what is it that they don’t they want to hear? Frank: n They don’t want to hear that things are getting worse … even though they know it. n They don’t want to hear that big corporations control the politicians who control their lives … even though they know it. n They don’t want to hear that their government keeps taking away their freedoms … even though they know it. n They don’t want to hear that the good jobs are gone, and they’re not coming back … even though they know it. n They don’t want to hear about drone attacks, civil wars, foreign wars and uprisings worldwide, since they’re a world away. n They don’t want to hear that the politicians, policy makers, generals and bankers who created the problems will never be able to fix the problems they created. n They don’t want to hear that their food, water, air and land is poisoned and polluted. GC: What do they say to you when you point this out to them? Frank: They say that I’m negative, a gloom-and-doomer. They say I should look on the brighter side of things. That I should take a deep breath and relax. And they think I’m a conspiracy theorist when I tell them the government is destroying our nation. They say I shouldn’t talk about problems unless I have solutions. But when I offer them solutions they don’t like or that run against their belief systems, they get angry, they walk away, they don’t want to hear it. GC: What do they want to hear? Frank: n They want to hear that despite everything they see around them, everything is going to be all right. n Even though most say they don’t trust the mainstream news, apparently they want to hear the mainstream news since that’s what they listen to. n They want to hear what business commentators, political pundits, talk show hosts and TV comedians – who support and reinforce their personal belief systems – tell them. GC: What will it take to get them to stop listening to what they are listening to, and start listening to what they don’t want to hear? Will it take personal misfortune or collective disaster before people realize that what they have always listened to and believed was a lie, a deception or propaganda?

The Trends Journal • Spring 2013

They were told “Saddam Hussein has weapons of mass destruction and ties to al-Qaeda.” They were told “Go back to your offices, the fire in the North Tower is under control.” They were told “The fundamentals of the economy are sound.” No matter how often the people are lied to, they continue to believe what they are told by “authorities.’” As Nietzsche observed, “Everything the State says is a lie, and everything it has it has stolen.” And the State keeps on lying and stealing. Frank: What do you think will change it, Gerald? Must things get worse before they get better? GC: Not necessarily. Sometimes they get better after it gets worse, but other times things just keep getting worse. Frank: Then, if things keep getting worse, is a point reached where things cannot get better? GC: Yes, you bet – “All Aboard: Next Train to Auschwitz.” It was the cover of our Spring 2012 Trends Journal. Frank: Wow, that’s really negative. I respect your work, and subscribe to The Trends Journal, and I remember that cover. Even I found it offensive. GC: What did you find offensive? The cover art, created by award-winning artist Anthony Freda and Dan Zollinger, graphically and poignantly encapsulates an extremely important message regarding the direction in which America is trending and how dire the consequences will be. Frank: I agree, but using the image of Auschwitz is offensive. It demeans the tragedy of the Holocaust.” GC: Not to me. It does no such thing. It applies the memory of that terrible tragedy to what’s going on today. We obviously used the boxcars as a vivid metaphor. Back then, Jews were literally herded into boxcars, without fighting back, and sent off to their doom. This time, a subservient populace allows itself to be herded into figurative “boxcars.” Read that Spring 2012 Trends Journal again. We present the facts, supportive data and analyses of legislation, Executive Orders, Supreme Court rulings, and government guidelines that portend a quasi-fascist dictatorship for the country that still bills itself as the “Land of the Free and the Home of the Brave.” Nor is America alone. Other so-called “democracies” are also descending into censorship: government censorship, citizen censorship, and self-censorship, which is politely called “being politically correct.” Imagine! Entire societies brainwashed into believing that every utterance, every thought, every phrase has to be cleansed, scrubbed and sanitized (i.e., censored) so that it offends no one. The phrase itself should be suspect. It’s an oxymoron to associate “political” with “correct.” Will you rise up, stand up, speak out and fight for your freedom? Or are you afraid someone will be offended?

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Will “We the People” continue to cower before political clowns and uniformed bullies and submissively board the “Next Train to Auschwitz?” Frank: Come on Gerald, don’t be so dramatic. Don’t be so negative. Think positive. Have faith, your government would never do that. GC: It happened before and it’s happening again. The preparations are all in place. It’s not only the United States Constitution that’s been gutted, it’s happening around the world. As economies decline, and poverty worsens, the natives get restless. What you see in the streets of Spain, Slovenia, Greece, Portugal and Italy is a confirmation of my maxim, “When people lose everything and there is nothing left to lose, they lose it.” They’ve lost it and governments are taking whatever measures they deem necessary to beat the protestors into submission, retain power, protect themselves and protect the powerful. It may not come to putting people in boxcars or sending them to FEMA camps, but given governments’ current iron-fisted suppression of dissent, the trend toward national police states worldwide is unmistakable. After all, why in God’s name would Homeland Security purchase 1.5 billion rounds of ammunition, including hollow-point bullets that are forbidden by international law to be used in war? What is Homeland Security going to do with 2,700 armored personnel carriers? Is it Homeland or Fatherland Security? Who are they securing us against? But remember, the polizei are only enforcers for the political and financial crime bosses. They’re just following orders. If you listen closely to what Mario Draghi, current European Central Bank Chairman (and former Vice Chairman of Goldman Sachs) recently said, you will hear “Fascism.” But maybe you don’t want to hear it? Speaking in deceptive White Shoe Boy language, Draghi called for a Europe in which “a monetary union needs to be complemented by a financial union, a fiscal union, a genuine economic union and eventually a deeper political union.” That’s fascism! Certainly your friends and family won’t want to hear that, even if you spell it out and add it up for them. Because the way it’s packaged, advertised and sold makes it sound like a people-friendly product that will restore prosperity, create jobs and provide a better future for all.

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Think about it. Notice, amid all the Draghi talk calling for financial, monetary and political unions, there is no call for “a people union,” to say nothing of a workers’ union. God forbid anybody but “they” should decide what’s best for “us.” The New World Order Union is strictly a political/financial union – a merger of state and corporate powers – which is, by definition, fascism. Frank: Gerald, is that trend inevitable? It seems irreversible. Can it be stopped? GC: It won’t be stopped by those who tamely submit to authority and who say, when presented with all the evidence, “I don’t want to hear it.” But yes, it can be stopped. Why should those who “tamely submit” and who lack the courage to speak for themselves or think for themselves speak and think for the rest of us? And you’re one of “us!” Trends Journal subscribers are a unique group and, for the most part, eager to hear me “tell it like it is.” The letters that come in are 99-to-one positive and supportive. They thank me for waking them up. My favorite ones are from subscribers who write: “You inspire me to better myself as a person in all ways that I can.” My firm belief is that only by betting on yourself and bettering yourself can the cycle of inaction be broken and the negative-trend trajectory we’re on be reversed. But it won’t be easy! While our 99-to-one subscriber ratio is encouraging, the fact is that the one percent of our subscribers who don’t “get” or like our message constitute a majority nationwide; they are the ones who don’t want to hear it. The following recently received letter is typical of what’s holding back a brighter future: To Gerald Celente; “The reason I cancelled my subscription and will not renew it any time soon is because I got tired of being bombarded with futile negativities on a daily basis. It is one thing to provide constructive, practical criticism of world leaders, but to shine the spotlight only on the negative side without acknowledging the realities of life - that life is all about conflicts - is an exercise in self-torment, I do not wish to pay for. Dismantling the corrupt portion of the political, financial and security structures that support an arrogant elite in the USA (and elsewhere) is a desirable goal and it is a big part of your mission as I see

The Trends Journal • Spring 2013


it. For this I commend you. But that does not mean I have to subject myself to a daily barrage of ‘the glass is half empty’ kind of communication. Not everything that is done is done with malicious intent. But it is true that since the 1960s a trend in the USA (and elsewhere) has been one of loss of respect for authority. The public is increasingly becoming aware of the fact that most (not all) of those elected to political leadership are not the brightest, but the most cunning and deceitful. The system has to change in a way that will prevent corrupt and incompetent egomaniacs from attaining political power. The world needs higher quality leaders. And to have such higher quality leaders – the quality of education has to be raised, substantially. And for this to happen, there has to be a way to remove radical ideologues from any role in the education system. Education has to be about facts and truth – not political, religious, or any other kind of ideologies. About a subscription, I might change my mind in the future, but for now, I’ve had enough negativities already. All the best, and I wish you to continue to have a growing audience and well wishers – even if not all of them are subscribers.” Best Regards The following is our response: “It would appear that you are reading your Trends Journal wearing selectivity glasses, since it is you who “shines the spotlight only on the negative side.” There is no Trends Journal issue in which we do not talk about a Renaissance, an Awakening, the advantages and possibilities inherent in Direct Democracy, the advantages of Secession, and the potential for a viable Third Party in the US. We write about Whole Health Healing, Safe Foods, New Millennium Education. All of these are potential game changers to, let’s say, negate the “negativities.” You have evidently skipped over those substantial essays. As for our accentuating the negatives, we do not create the prevailing conditions, we simply report them. If the future was coming up roses, and peace and harmony prevailed, we’d be delighted to report that. But that is not the case. Thus, we spend a lot of time un-spinning the media/political spin, and we “shine the spotlight” to reveal the hypocrisies and blatant lies. Victory can be best achieved (over anything) with full knowledge of the opponent. As for the glass being ‘half empty’ rather than

The Trends Journal • Spring 2013

half full, as we see it, the glass is 99 percent empty. Nor have we ever claimed that everything is done with ‘malicious intent.’ Some of it is just stupidity and/or hubris. In any event, ‘By their fruits you shall know them.’ As for your prescriptions for change, we respectfully disagree that ‘The system has to change in a way that will prevent corrupt and incompetent egomaniacs from attaining political power.’ As it stands, ‘The system’ is unfixable, it has to be replaced. That is why we call for a Renaissance, an Awakening, why we a push for Direct Democracy, Secession, a viable Third Party in the US. You seem to have read right past those Trends Journal passages.” This former subscriber’s letter is a variation on the “I don’t want to hear it” theme. There are those who don’t want to hear it at all, and those, like him, who only want to hear what they want to hear. While not renewing his subscription is certainly his prerogative, by tuning out the highlights, he exemplifies, both the problem and challenge. The problem is: “I don’t want to hear it.” The challenge is: What will it take to persuade him and others like him to listen to what they don’t want to hear? When they go to a doctor and are told something they’d rather not hear, do they tell the doctor, “I don’t want to hear it?” What will it take to get them to understand that their lives, their livelihoods, their future and their children’s future are on the line? There can be no Renaissance or Great Awakening, or any other meaningful change, until enough people are willing to “hear.” Or will they wait until the only thing left to hear is, “All Aboard, Next Train to Auschwitz.”

Trend Forecast Is it inevitable that societies on the road to ruin stay on that path? Does the public, does the individual, have no other option than to surrender to the will of the money junkies and the power mad? If power continues to reside in the hands of those currently wielding power, we forecast a grim future that fulfills the cynical expectations of the Millennial Generation: declining living standards limited job opportunities n social tensions n geopolitical unrest n intolerance of dissent, abrogation of rights and suppression of freedoms. n n

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Anthony Freda / Dan Zollinger

The vast majority of the “I don’t want to hear it” will never hear it. Their ignorance is their bliss. But from what we hear, what we see, from the comments on social media and from the correspondence we receive, we know there is a groundswell of millions of people of all ages and professions who want to hear us “tell it like it is.” They are among the advance guard. They are individuals who think for themselves and refuse to join the march to madness our “leaders” are taking us on. Yet all face the same obstacles in trying to make the “I don’t want to hear it” crowd, hear it. It’s not a matter of winning an argument or determining who’s right or wrong. It’s a matter of many things being very wrong. And if they are not confronted or addressed, conditions will deteriorate to a point beyond repair, until it is literally a matter of life and death. The “Think for Yourself” advance guard is determined to enjoy the life they have and to make it better. Partly out of self-preservation, they refuse to follow leaders or obey “authorities” whose policies have only led to failure up to now, and if pursued, will only lead to more destruction. These are the reasons why those with “an ear that hears and an eye that sees” may also feel honor-bound to

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do their part. The following comment, posted in response to Gerald Celente’s Trends in the News® video segment, expresses both altruism and self-preservation. “First of all, Gerald, I want to thank you from the bottom of my heart. It has/had been pretty lonely out here among my family who refuse to see what is going on. And, while my family is still blissfully living in the dark, I would like to report that I am finding more and more people who DO “get it!” In fact, just today I found another aware person who is deeply concerned (along with her husband) and I recommended your site. I told them that your news service is indispensable. Since this person is in contact with many people each day, I am hoping that I planted a small seed that will eventually harvest many subscribers. Let’s hope! YES to Yousif’s comment: “In a world of universal deceit, telling the truth is a revolutionary act!” [Note: This refers to a previous comment from another subscriber in reaction to the video segment.] So, we all need to keep talking and making people aware because, frankly, that is our only hope! I know that oftentimes people don’t want to hear

The Trends Journal • Spring 2013


what we have to say, and it can be hard to speak to them under these circumstances, but, hey, this is not a high school popularity contest. This is a fight for ourselves, our children and our country. I recall that only 30 percent of the colonists were for the American Revolution. Apparently, 30 percent were Loyalists and 30 percent were apathetic. So, we don’t need 100 percent of Americans to understand. We only need whatever critical mass will turn the tide. Thank you Gerald!”

Fruitless? Or Will it Bear Fruit? Our relent-

less campaign to “tell it like it is,” is bearing fruit. Our Trends Journal subscriber reports his success at “… finding more and more people who DO ‘get it!’” Not only did he plant a seed, it was sown with someone “who is in contact with many people each day.” Thus the seed may be sown in ever-more spacious and fertile fields. There are those who are capable of hearing and those who cannot and will not hear, regardless of how loud, obvious and insistent the alarms. However, when enough of those capable of “hearing” join forces, there will be a breakthrough. It is a process analogous to breeching the portcullis of a Medieval castle (e.g., White House, 10 Downing Street, Palais de l’ Elysées) with a battering ram. With a “critical mass” behind the ram battering repeatedly, at some point, the portcullis is breeched, the castle is stormed and the “tide” has turned. What represents “critical mass?” During the American Revolution, it was estimated some 20 percent (not 30 percent as suggested above) of the population remained “loyalists” faithful to the Crown while the patriots (revolutionaries) received active support from an estimated 40 to 45 percent. Is there any possibility of mounting a Second American Revolution at a time while the majority are still “loyalists?” Is there the desire? Is revolution in the air? Are secession movements a harbinger of revolution to come? The revolutionaries of the past put their lives on the line. The revolutionaries of the present must put their “lies” on the line. “Lies” on the line? What does that mean? It means that “loyalists” who continue to profess allegiance to their flag are lying to themselves – because at some level, given all the evidence at their disposal, they must know their political gods are false prophets and their political religion is superstition. There can be no revolution until they “confess” they are living a lie.

The Trends Journal • Spring 2013

People Power As it so often does, history is repeat-

ing itself. While historically, every revolution is different in terms of the trigger points and issues that set them off, fundamentally they are all the same: Too few wield too much power and a very few control most of the wealth. At a certain point, the poor and the powerless, with nothing left to lose, revolt. Now, in 2013, from Europe to Asia, the Middle East to Africa, the USA to Russia, many people have lost or are losing what little political faith they still had. In February, the Bulgarian and Tunisian governments fell. In Bulgaria, massive nationwide protests over rising electricity prices, corruption and worsening living standards resulted in bloody clashes with the police and forced the resignation of Prime Minister Boiko Borisov. But the resignation did little to placate the public, whose average monthly salary of $534 had not increased for years. In cities throughout the country, protesters blocked traffic and held demonstrations denouncing the “economic domination of the mobsters,” while activists demanded sweeping radical change to their entire political structure. Tunisia, the cradle of the “Arab Spring” that first bloomed in December 2010, had served as the blueprint for the Arab uprisings that would follow: long-time authoritarian regimes characterized by political repression, high unemployment, massive corruption and declining standards of living were being toppled. But Tunisia would also serve as a model for why the Arab Spring failed to produce the promised transition to constitutional democracy. Tunisia, a little place on the map, looms large when considering the trend of recent history: The country’s five-decade-long secular dictatorship falls, only to be replaced by a Muslim Brotherhood dictatorial government. Instead of the promised prosperity, unemployment rises, corruption continues, and political repression is replaced by religious repression. With conditions deteriorating and pent-up social anger growing against the Islamist regime, Tunisia’s prominent secular opposition leader, Chokri Belaid, was assassinated. But while they killed the messenger, they could not kill the message. Hundreds of thousands of mourners took to the streets demanding, as they had in 2010, “Bread, freedom and social justice.” To a broad sector of the population, the attack was more than the death of one man, it symbolized the potential death of all who opposed the ruling regime. Swelling crowds resisted all attempts to suppress or calm them, declaring, “The people want a new revolution … the people want the downfall of the regime.” After two weeks of relentless protests, Tunisian Prime Minister Hamadi Jebali resigned. In what was taken as a

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Anthony Freda / Dan Zollinger

conciliatory measure, Mr. Jebali said he was stepping down to “save the country and stop the violence” and called for a neutral government, “free from political fights.” Rather than heed Jebali’s appeal for neutrality and cooperation, just days later, his Islamist Ennahda party picked a hardliner to replace him.

Trend Forecast Tiny Tunisia can be viewed as a Petri dish containing all the active socioeconomic and political elements active in nations currently caught in the throes of depression, re-

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cession, corruption, and repression. On their own, without the support of an organized opposition or political party, the Tunisian people were the first to overthrow their entrenched government. Two years later, with economic conditions worsening, unemployment rising and disenchanted with their new government for giving a “green light” to hard-line Islamists, they effectively forced the incumbent prime minister to resign following the murder of a respected secular opposition figure. Once again, by forcing out its new leader, Tunisia set an example for Arab Spring nations and others controlled

The Trends Journal • Spring 2013


by ruling autocrats. Though Chokri Belaid had only a modest political following, his assassination carried both intellectual and philosophical implications. His death represented more than the murder of one man, it was taken as a death threat to every citizen who dared oppose the government and/ or supported what Belaid stood for. “We are all Chokri Belaid,” chanted the thousands that took to the streets. It was a re-statement of Ben Franklin’s famous call for unity at the signing of the Declaration of Independence: “We must all hang together, or assuredly we shall all hang separately.” But there the comparison to 1776 America stops. Tunisia’s Ennahda ruling party replaced the outgoing “moderate” prime minister with the former minister of the interior, Ali Larayedh, an uncompromising hard-line Islamist. Widely held responsible for turning a blind eye to violent Salafist attacks upon many aspects of Western ways, women’s rights and popular culture, his selection as prime minister augured an even harsher Islamist line. Under such circumstances, Tunisia will surely erupt in violence again; the economy will continue to contract; tourism, one of its main revenue streams, already hard hit by the unrest and uncertainty, will all but disappear; and unemployment, currently at 18 percent, will rise.

Publisher’s Note What applies to Tunisia applies to all people of all nations. Whether it’s radical Islamists imposing their religious beliefs upon everyone, radical bankers imposing austerity measures in conformity with their economic dogma, or radical politicians in so-called democracies depriving everyone of constitutional or personal rights in order to establish a fascistic doctrine, there is a common thread: a small power elite, intent upon imposing its will and maintaining its position against the will of the people. Money, religion, war – the issues are different but the motive is the same – many will be forced to pay for, pray for, and fight for what will satisfy the needs, greed and delusions of the few – unless the many, everywhere throughout the world, understand that they are all Chokri Belaid. But in 2013, particularly in “I don’t want to hear it” America, that message could not be delivered. Not only did the American people not know or care who or what Chokri Belaid was, even if the Tunisian news made the news, the message was beyond comprehension. The Presstitute media of Dumfukistan had more important “news” to communicate. On February 21, with the world descending into darkness and economies hurtling off fiscal cliffs, these were the top stories on CNN’s website:

The Trends Journal • Spring 2013

n Gunfire,

crash kill 3 in Las Vegas identified as disabled N.C. girl’s n 3 young sisters found dead in well n Plane in Georgia crash hit utility pole n Tebow cancels speech at Texas church n ‘A Different World’ actor dies n Skull

Gunfire, skull, 3 young sisters dead in a well – it works perfectly. With real news out of sight, and on a diet of junk food, junk news, and junk entertainment, people have lost their minds, spirit and soul. Even their basic survival instincts. Brainwashed and brain dead, the overwhelming majority – from the top one percent on down through the bottom 99 percent – of the general public have become too fearful to speak their minds and/or have been conditioned not to, regardless of the humiliations heaped upon them by the stupid and arrogant enforcers of their fascist, repressive, autocratic State.

Man or Mickey Mouse? The setting was Hol-

lywood perfect: A blond, blue-eyed, All-American Midwest family off to their perfect mid-winter Disney World vacation. But before they could fly the friendly skies, their three-year-old-daughter, suffering from spina bifida, aroused the suspicions of alert TSA protectors of das Amerikanische Homeland. This two-minute CNN video is a testament to the dramatic decline of a once-proud nation, founded upon a Declaration of Independence, to a cowering country pledging allegiance to a Declaration of Subservience. More than just epitomizing the futility, indignity and utter wastefulness of the squalid TSA pat-down, x-ray, takeoff-your-coat-and-shoes ritual that squanders billions and defies even a modicum of common sense, the CNN video is representative of the myriad indignities and humiliations imposed upon the public by elected politicians and the bureaucratic systems they create. Q. In what civilized nation would uniformed goons take away stuffed animals and grope a crippled, crying three-year-old girl in a wheelchair? A. Only in Dumfukistan. Q. In what civilized nation would a self-respecting father admit that he “didn’t know the rules” and therefore stood by while Homeland Security Gestapo patted down his little girl? A. Only in Dumfukistan. Q. In what civilized nation would a self-respecting father, having had his child molested and his family held up for 30 minutes by the Gestapo, describe this grotesque violation of their rights and their dignity as “not being worth it” just “so everybody feels a little bit better”?

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A. Only in Dumfukistan Q. In what civilized nation would a self-respecting father stipulate on national television that he would permit a stranger to grope his daughter, but only if “there was a really good reason?” A. Only in Dumfukistan. Q. In what civilized nation would any self-respecting parent, having suffered through this unwarranted ordeal, then fail to use this rare national TV forum to retaliate but rather, after making their firm stand on Jell-O, go on to enthuse about the wonderful time the family had at Disney World? A. Only in Dumfukistan. No outrage, no defiance, no blame, no berating the authorities, not a word about the loss of civil rights or the uncivilized behavior of their government. The three-year-old child pat-down was a madefor-TV reality episode of “Happy Boy and the Presstitutes.” And it was pitched to the public as little more than a minor inconvenience with a Hollywood-perfect happy ending. But it carried an ominous message for all Americans: know your place, don’t stand up for your rights and leave your courage, dignity and respect at Disney World. Underlying it all was, get ready for more! Q. How can any self-respecting person tolerate such levels of indignity routinely imposed by squads of uniformed bottom-feeders wielding power bestowed upon them by higher authorities? A. How? Complain and you’re off the plane, detained for hours, fined, prosecuted or worse. That’s how! “All Aboard, Next Train to Auschwitz!”

A World Away Tunisia, Bulgaria, Cyprus, Roma-

nia, Slovenia, countries around the world that the average John or Jane Doe couldn’t find on the map were trapped in economic depression and, unwilling to accept their fate, were simmering with dissatisfaction or rebelling. More populous and more popular destinations such as Spain, Greece, Portugal and Italy, similarly beset and wracked by financial and political scandals, were also on the brink of revolution. Among those countries holding elections, the people were given choices of voting for: more of the same, someone decidedly worse or someone, at best, not much better. The travesty passing itself off as “democracy” deceived the voting public into believing their votes would make a difference, when in reality the differences between the ruling party candidates were superficial. Whichever side

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won would maintain the status quo. And that status quo, since the Panic of ’08 struck, involved blaming the general public for spending beyond their means, buying homes they could not afford (even though governments encouraged them to do so while rapacious banks loaned them money they were not qualified to borrow), and reaped lavish social benefits that states could not afford. No, it wasn’t the banks’ fault for loaning money to borrowers they knew were unqualified or for rigging the Libor rates; nor could it have been all those derivatives, collateralized debt obligations, synthetic collateralized debt obligations, enhanced structured investment vehicles, complex mortgage securities, credit spreads, auction rate securities, leveraged buyouts and all those other “esoteric financial instruments” that funneled trillions out of the system and into the pockets of the moneymen. No! It was the fault of the people who, because of the unions and labor laws, earned too much, worked too little and enjoyed pensions and benefits so generous that they bankrupted the system. And while there were elements of truth to the accusations, it was small change compared to the wholesale pillage, rape and plunder carried out by the banking bandits, the Wall Street Gang, the City of London Pirates and a cabal of international financial Mafiosi. In the winter of 2013 there was much despair and, in most bank-robbed nations, little hope: Ahead of Election in Cyprus, Gloom and Voter Apathy Tied to Financial Woes LIMASSOL, Cyprus — Evagoras Georgiou will go to the polling station at the Tsireio middle school in the St. John neighborhood here for Sunday’s presidential election. But he will leave his ballot blank, voting for neither of the two candidates in the runoff for Cyprus’s most powerful political office. Both candidates have promised to abide by a deal with international lenders that promises to help the country service its debts but that will bring harsh austerity and recession with it. Mr. Georgiou, 28, studied business management in Britain and returned almost a year ago to look for work. He has yet to find a job and says he believes that a deal with the European Commission, the European Central Bank and the International Monetary Fund — known collectively as the troika — will only make matters worse.

The Trends Journal • Spring 2013


“They both have the same policies but find a way to make the public believe they disagree,” Mr. Georgiou said of the two candidates. “We see that any country with a troika agreement is ridden with debt and has high unemployment of youth.” What many Cypriots find most frustrating is that their crisis … was concentrated in the banks. There is no sovereign debt crisis and, before the banking collapse, their economy was relatively healthy. Why, they wonder, should they suffer for the misdeeds of a few bankers? Why cover losses that should be borne, at least in part, by private investors? (The New York Times, 23 February 2013)

The Trends Journal • Spring 2013

Anthony Freda / Dan Zollinger

Wall Street crime syndicate for financial crimes, Attorney General Eric Holder decreed, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.” In the Wizard of Oz world of Washington, the Federal Bureau of Investigation had a primary role in hunting down bank robbers and bringing them to justice, but when the banks were doing the robbing, according to the Justice Department, they were too-bigto-jail. Since the Panic of ’08, governments have robbed trillions from taxpayers to bail out banks Domestic Terrorist and financial institutions. The Q. “Why should they suffer for the misdeeds of a few results are undeniable. Their schemes only enriched the bankers?” rich, provided none of the benefits promised to the public A. Why shouldn’t they? What makes them so special? Cyand were, in fact, no more than a giant welfare check for prus, Greece, Italy, Spain, Portugal, Ireland, United Kingthe biggest of the bloated banks: dom, United States … What makes this year different from Why Should Taxpayers Give every other year? From the time of Jesus Christ to James Big Banks $83 Billion A Year? Madison, to the world today, the names have changed but the money changers’ crimes are the same. On television, in interviews and in meetings with investors, executives of the biggest U.S. banks – BEHOLD THE MONEY CHANGERS! notably JPMorgan Chase & Co. Chief Executive How can it be denied? What more proof is needed? What Jamie Dimon – make the case that size is a comwill it take for the people to understand what is being done petitive advantage. It helps them lower costs and to them? Jesus scourged the money changers out of the vie for customers on an international scale. LimitTemple, but they were like cockroaches. Even the Prince ing it, they warn, would impair profitability and of Peace couldn’t exterminate them. As James Madison weaken the country’s position in global finance. observed, “History records that the money changers have So what if we told you that, by our calculations, used every form of abuse, intrigue, deceit, and violent the largest U.S. banks aren’t really profitable at means possible to maintain their control over governall? What if the billions of dollars they allegedly ments by controlling money and its issuance.” earn for their shareholders were almost entirely a Two centuries later the money changers still use “every gift from U.S. taxpayers? form of abuse, intrigue, deceit, and violent means possible Granted, it’s a hard concept to swallow. It’s also to maintain their control over governments by controlling crucial to understanding why the big banks presmoney and its issuance.” In “control over governments,” ent such a threat to the global economy. they’re in control over the law. Justifying the Obama adLet’s start with a bit of background. Banks have (Continued on page 19) ministration’s failure to prosecute senior executives of the

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ROBBER BARONS ARE STEALING PENSIONS, BANK DEPOSITS AND DEMOCRACY by Dr. Paul Craig Roberts

The Trends Journal predicted and for decades has been chronicling the growing gap between the rulers and the ruled. In the European Union (EU) the fissure between the people and the government has been most apparent in the ability of financial elites to recoup their losses from the pockets of ordinary citizens.

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n Greece, wages, salaries, employment, pensions and social services were cut in order to pay for a bailout by the European Central Bank (ECB) and International Monetary Fund (IMF) of German, French, and Dutch banks that bought Greek government bonds. Traditionally, debt that cannot be repaid is written down to amounts that debtors can pay, but no more. In an unprecedented usurpation of the role of government, bankers have now gained the power to make ordinary people cover the banks’ losses. The crisis was precipitated by private banks lending more to the Greek government than the government could service. Therefore, the Greek government could not borrow more in order to cover the deficit in its budget. In exchange for European Central Bank and International Monetary Fund loans to operate the Greek government and pay its obligations to the private banks, the Greek government was coerced into forcing austerity measures on the Greek people. The measures had a two-fold purpose. One purpose was to reduce the ratio of Greek public debt to Greek GDP. The other was to reduce government expenditures so that revenues would be available to repay the ECB and IMF loans. Austerity forced down the economy, the ratio of debt to GDP rose and the policy failed. More important than the failure of the economic policy was the failure of democracy. When the Greek prime min-

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Bank Holiday

ister said that he would put the bailout deal to a vote by the Greek people, the French and German leaders, acting on behalf of the banks, forced him to resign. (See “Climax Time,” Trends Journal, Winter 2012) The banksters then appointed Lucas Papademos, a former vice president of the European Central Bank, as prime minister of Greece. Greece, a Western democracy, was seized by financial pirates who appointed one of their own to rob the Greek people on their behalf. Democracy was thrown out the window. What was important was that the banksters not lose any money. As The Trends Journal reported, the theft of democracy was repeated in Italy where an elected prime minister was forced out and a former European commissioner and international advisor to Goldman Sachs, Mario Monti, was appointed head of the Italian government. Typical of the international news and financial coverage of the events, the BBC’s account ignored the amazing development of two Western democracies being turned over to appointed prime ministers imposed from outside the democratic system. The BBC described the murder of democracy as follows: “Former European Central Bank vice-president Lucas Papademos has been named as Greece’s new prime

The Trends Journal • Spring 2013


minister, following days of negotiations.” The BBC did not say who had chosen Papademos to be prime minister and evidently did not think it important that the Greek people had an unelected prime minister foisted upon them for the explicit purpose of selling out the Greek people to the bankers. To the presstitute media, the importance of the story was that now Greece would have “the stability to get them through their debt crisis.” Note: The sovereign debt crisis is the result of the com-

mon currency, the euro. Most member countries of the European Union no longer have their own currency. This means their central banks cannot function as creditors to the governments and create money to support a country’s debt obligations. In order to finance budget deficits, EU member countries without their own currencies have to rely on loans from private banks. The European Central Bank is prohibited by its charter from financing EU member country budget deficits, although this prohibition has been “relaxed” in the current sovereign debt crisis. Germany, however, has put limits on how many euros can be printed by the ECB in order to achieve bailouts of troubled sovereign debt of EU member states. These limits, so far, have been sufficiently tight that austerity in some form has been imposed on the populations of the countries with problem sovereign debts. Countries with their own currencies, such as the US and the UK, can create the money to service their debts. A country without its own currency is at the mercy of outside authorities. The EU has proved to be a trap for those countries who abandoned their currencies for the common currency, the euro. The poorer EU members have to accept austerity imposed from without, and the tax payers of the rich countries within the eurozone have to pay the difference for the poor ones.

Death of Democracy One might think that such a blatant attack on the Western democratic tradition would cause alarm and force authorities to draw back. Instead, the attack metastasized into raiding bank deposits. The troika of the EU, ECB, and IMF demanded in exchange for a bailout of the Cyprus banks a downpayment from depositors’ funds in the banks. The Cyprus banks were instructed to hand over 6.5 percent of insured deposits and 9.9 percent of deposits over the insured amount. People took to the streets in protest, and the Cyprus legislature voted it down. The attempt to rob depositors led to a run on the banks. The banks had to be closed, and depositors were allowed only daily limited withdrawals. Chastened by having almost collapsed the Cyprus banks in the effort to bail them out, the troika came up with a new deal. Only deposiThe Trends Journal • Spring 2013

tor funds above the insured amount and only two banks, Laiki and the Bank of Cyprus, would be subject to theft, with 40 percent or perhaps more to be deducted from the accounts. Moreover, this time there could be no vote. The president of Cyprus, Nicos Anastasiades, discovered that an outside troika of the EU, the European Central Bank, and IMF – not himself – was running Cyprus. The president even asked the troika, not the Cypriot people, if he should resign. Perhaps it occurred to Anastasiades that resignation would be a superfluous act, since decision-making power no longer rested in the Cypriot government. The president of the country was reduced to a cipher: “Do as you are told!” “That’s a good boy.” The Dutch minister of finance, who appears to be something of a moron, announced that the theft of depositor accounts in Cyprus is the template for future bank bailouts. This stunning statement had to be quickly retracted in order to avoid bank runs throughout Europe. To calm jittery populations, the new line is that Cyprus is a special case. THE GOLDMAN GANG

Mario Draghi, a former Goldman Sachs vice chairman and managing director who was appointed president of the European Central Bank, disavowed any responsibility of the ECB, the EU or the IMF for the bank deposit theft. So, if not the troika, then who devised the plan that Draghi now says was “not smart”? Somewhere a wicked witch waved a wand, and the plan appeared? Draghi, like all banksters, doesn’t want any responsibility for any failure. According to the BBC, Draghi said that it is up to the eurozone governments to solve the region’s debt crisis and that it was not a European Central Bank responsibility. Draghi said “We cannot replace lack of capital in the banking system or the lack of actions by governments. The most stimulative measure is to pay the arrears.” Draghi’s statement is nonsensical. Eurozone governments do not have central banks that can create money. Only the ECB can create euros. All Draghi needs to do is to create enough money to recapitalize the private banks after they write down the “arrears.” This would not be inflationary, because the money would merely replace the lost money and prevent deflation. Simply replacing what is lost does not add to the total. Surely Draghi understands that the problem is that the over-indebted governments cannot “pay the arrears.” So what could he possibly mean when he says the solution is for the governments to “pay the arrears?” The only thing he could mean is that the solution to the sovereign debt problem is for eurozone governments to steal bank de-

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Anthony Freda / Dan Zollinger

posits, impose austerity on their fected. Uninsured deposits would citizens and sell off national asbe treated in line with other sets in order to raise money for similarly ranked liabilities in the banks so that bankers do not the resolution process, with the have to write down bad debts. expectation that they might be Instead of banks being put into written down.” The document bankruptcy in order to save deemphasizes that one key to keeppositors, depositors are being ing a failed bank open is to reasbankrupted in order to save sure depositors: “To achieve this, banks. the authorities recognize the In other words, Draghi, a need for effective communication former Goldman Sachs official, to depositors, making it clear that says that what Europeans have their deposits will be protected.” belongs to the banks. Thus, Commentators have also reDraghi confirms Matt Taibbi’s ported that both Canada and portrait of Goldman Sachs as New Zealand have prepared the “a giant vampire squid wrapped groundwork for seizing some part around the face of humanity, of bank deposits. The Canadian relentlessly jamming its blood document cited (Click here) does funnel into anything that smells not support this conclusion. like money.” The New Zealand document To further reassure the peocited by commentators is not ple, the story was put out that a government document but a it was mainly rich Russian olisubmission by the New Zealand garchs using Cyprus as a tax Bankers’ Association to the Rehaven who lost deposits. This serve Bank of New Zealand on Up in Smoke story was contradicted by other the Open Bank Resolution. This reports that large depositors document speaks of a “haircut” had advance notice and took their money out of London for “all unsecured creditors,” which seems to include branches of Cyprus banks that someone forgot to close. “term deposits,” if not demand deposits. This treatment These aspects of the story are unimportant. What matseems at odds with the purpose of the Open Bank Resoluters is that European political leaders have abandoned tion, which is to keep the banks open and functioning by the democratic tradition and rule of law. If a bank loses reassuring depositors. money, it just steals someone else’s. The section on “term deposits” (short-term with maturiHas a new precedent been established? Will it spread, ties ranging anywhere from a month to a few years) says: and will it be applied to Americans? With the Cyprus Affair roiling equity markets, the In“The banking industry still needs to determine ternet and alternative media exploded with speculation whether they can agree on an industry protocol that bank depositors were at high risk in other countries for applying a haircut to the interest component as well. Citing a joint study by the Federal Deposit Insurof a term deposit.” An illustrative table showing ance Corporation and the Bank of England (Click here), a examples has about 20% of term deposit principal number of commentators concluded that depositors have “frozen,” and a footnote says: “Table assumes full been defined as unsecured creditors whose bank deposhaircut is recorded as frozen principal.” its are risk capital that can be used to recapitalize failed banks. However, I believe that this conclusion is mistaken. In making the case to support their conclusion that deThe FDIC and Bank of England document is about positors of a bank are unsecured creditors, some comhow to keep failed banks open and avoid both liquidamentators have cited text based on a 19th century court tion and taxpayer bailouts by requiring those who own the ruling that predates deposit insurance. Obviously, deposit bank’s stocks and bonds to absorb the loss. The document insurance does not leave depositors unsecured. does not define insured depositors as unsecured creditors Commentators also cite an article by Edward Harrison and explicitly states in paragraph 34: (Click here). “Insured depositors themselves would remain unafHarrison states that depositors are creditors of a bank,

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The Trends Journal • Spring 2013


In my opinion, the reason to “particularly in Europe where “Who wants to hold dollars and worry about your bank deposits they are often legally pari passu is not theft to cover bank losses. with other unsecured credidollar-denominated financial assets If a general policy of stealing tors.” Harrison cites “an ECB when the dollar faces such obvious bank deposits is adopted, no expert on bank resolution” who one will use banks. The bankcontradicts Harrison’s stateexchange-rate risk?” ing system as we know it would ment: cease to exist. This is not in the “A depositor preference rule bankers’ nor the authorities’ interest. requires that in the insolvency of a bank the claims of deThe real concern about US bank deposits is that they positors enjoy a privileged status. This is a powerful form of are denominated in US dollars, and the supply of new doldepositor protection . . . A majority of G-20 countries have lars has been increasing by about $1,000 billion per year some form of depositor preference rule . . . Most countries for the last several years. The demand for dollars has not impose some limitations on their depositor preferences, been increasing by the same amount. Indeed, as more and such as a limit linked to the guarantee limit under the demore countries implement measures to settle their trade posit guarantee.” balances in their own currencies, the demand for dollars DEPOSITORS, DON’T DESPAIR! is falling. When the supply increases and the demand falls, the What can we conclude? Are your bank deposits at risk of price falls. The exchange value of the dollar in terms of seizure? The answer is that insured deposits would not be other currencies has escaped sharp declines because of at risk if the purpose of seizure was to recapitalize banks. the dollar’s traditional role as world reserve currency and Even in Cyprus the seizure was limited to uninsured desafe haven and because the sovereign debt crisis in Euposits of two banks. rope has caused flight from the euro to the dollar. The The Cyprus case is inconsistent with the Open Bank Japanese, the Saudis and the oil emirates have large dolResolution approach set out by the FDIC and Bank of Englar holdings and no interest in destabilizing the dollar. land. The ill-considered approach taken in Cyprus shook The Chinese (who also have large holdings) attitude the confidence of depositors. In order to avoid bank runs toward the dollar could be adversely affected by Washingby panicked depositors, the authorities have had to limit ton’s aggressive “Pivot Asia” policy of surrounding China depositor withdrawals, and this further impairs depositor with military bases. trust. The scheme has proved to be a failure, because it Nevertheless, the world is watching, and the world sees has destroyed depositor confidence in the banks. only feeble efforts by Congress and the White House to The FDIC and Bank of England document suggests balance the $1,000 billion annual operating deficit, a defthat authorities are learning two lessons. One is that taxicit that will rise if the economy turns down. The world payer-funded bailouts create public anger and should be sees the monetization of $1,000 billion in Treasury debt avoided. The other is that depositor confidence is essential and the banks’ mortgage-backed derivatives per year. The to keeping a failed bank open while it is recapitalized. question is unavoidable: Who wants to hold dollars and These are lessons that are important for the authorities to dollar-denominated financial assets when the dollar faces learn. That they are learning the right lessons means that such obvious exchange-rate risk? there is hope. Not all is darkness. Some question the reality of deposit insurance. The The Golden Question The movement out of dolfunds at the FDIC’s disposal including its line of credit lars has begun. If the trickle becomes a torrent, a sharp to the US Treasury are small compared to total insured drop in the dollar’s exchange value will push up import deposits. The way I see it is that if the Federal Reserve can prices, raising domestic inflation and destroying the Fedcreate $16 trillion to lend to banks, it can create all the eral Reserve’s control over interest rates. This risk leads to money needed to bail out depositors. the conclusion that the Federal Reserve has been shorting But wouldn’t printing money to make depositors whole gold and silver in the paper bullion market in order to procause inflation? Unlikely in my view. Replacing lost or detect its policy of Quantitative Easing. stroyed money and wealth simply restores the status quo. When gold prices hit $1,917.50 an ounce on August It does not add to the supply and therefore would be no 23, 2011, a gain of more than $500 an ounce in less than more inflationary than if the status quo was inflationary. 8 months, capping a rise over a decade from $272 at the By preventing the shrinkage of bank deposits and, thereend of December 2000, the Federal Reserve panicked. by, the money supply, keeping depositors whole prevents With the US dollar losing value so rapidly compared to deflation. The Trends Journal • Spring 2013

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the world standard for money, the Federal Reserve’s policy of printing $1,000 billion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. The dollar’s exchange rate in relation to other currencies becomes untenable when the dollar collapses in value in relation to gold and silver. As sharply rising bullion prices are a threat to the Fed’s policy, the Fed has shorted the bullion market in order to suppress prices. As the dollar loses its role as the currency of international payments, the Fed’s debt monetization will collapse the dollar’s exchange value in currency markets. Continued printing would drive the dollar down further, which means domestic inflation would rise higher. The Fed would have to stop printing. Note: The Fed’s ability to print can have a longer life than one might think. Recognizing the dollar’s vulnerability from the printing press, Washington has convinced the Japanese government to help protect the dollar by printing yen and is lobbying the ECB to print more euros. To prevent sharp appreciation in the franc, the Swiss have had to print francs in order to absorb inflows of dollars and euros. Indeed, the Fed’s debasement of the dollar forces other countries to print also in order to protect their export markets. When so many countries print money, it takes the pressure off the dollar. What it means is that so much money is being created that the final blowout will result in a world inflation. Unless the Chinese join the printing in order to protect their export markets, China will be set to take over the reserve currency role. (Printing a currency causes it to depreciate relative to other currencies. If all currencies are printed, there is no relative change.) In that event, what would finance the federal budget deficit? Now desperate, authorities might seize bank deposits, not in order to bail out bankers but to bail out the federal government. After bank deposits are pillaged, the remaining source of wealth to be plundered would be private pensions, or what is left of them after rising domestic inflation and interest rates collapse the bond, stock, and real estate markets.

Let us be sure we understand how risks for the once masterful US economy became so great. The main cause of America’s demise is the offshoring of manufacturing and professional service jobs. This deprived the US economy of consumer income and state, local, and federal governments of tax base. When the offshored production comes to the US to be marketed, it drives up the trade deficit. The result is larger surpluses in the hands of foreigners, who use the dollars to purchase income-earning US assets. Consequently, this income also flows out of American

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hands into foreign hands. Drained of consumer purchasing power, the US economy faltered. The Federal Reserve decided to substitute an increase in consumer debt as a substitute for the missing growth in consumer income in order to keep a consumption-driven economy alive. Interest rates were lowered to unrealistic levels, igniting a real estate boom. Rising housing prices produced equity in debt-financed homes. Homeowners refinanced their mortgages, taking out the equity and spending it, thus keeping the economy alive. Deregulation was a partner in the rising catastrophe. Under the Clinton administration, the sensible GlassSteagall Act, put in place during the Great Depression, was repealed. This allowed commercial and investment banking to be under one roof and allowed the use of bank deposits for unregulated speculative purposes. The position limit on speculators was removed, allowing speculators to dominate commodity markets. Debt leverage was “liberalized,” allowing irresponsible debt leverage ratios. Greed and ideology (“markets are selfregulating”) mixed with incredible stupidity and incompetence to produce a financial disaster for an economy already weakened by offshoring its GDP to other countries in order to increase capital gains for shareholders and performance bonuses for executives. When the dollar declines, the Federal Reserve will lose control over interest rates. When that happens, the cost of entitlements (Social Security and Medicare) will be dwarfed by interest payments on new debt issued to finance the federal budget deficit. The policy of not letting the “banks too big to fail” fail and the policy of sending American jobs abroad in order to maximize shortrun corporate profits could result in the destruction of the American economy. This possible outcome could be closer at hand than most people realize.

Trendpost At a certain point, when the Japanese, US and eurozone stimulus pumps have so debased their currencies that further pumping would prove futile, gold, silver, platinum and possibly diamonds will again be regarded as safe haven assets. Attempts by central banks and high-stakes speculators to manipulate markets may produce temporary violent price fluctuations, but in the long term they will fail to drive down prices or tarnish their safe haven luster. o About the author: Former associate editor of the Wall Street Journal and columnist for Business Week, Dr. Paul Craig Roberts served on personal and committee staffs in the House and Senate, and served as Assistant Secretary of the Treasury for Economic Policy during the Reagan Administration.

The Trends Journal • Spring 2013


(Continued from page 13)

a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail. Lately, economists have tried to pin down exactly how much the subsidy lowers big banks’ borrowing costs. Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz put the number at about 0.8 percentage point. Big Difference Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected. The top five banks – JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. – account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits. In other words, the banks occupying the commanding heights of the U.S. financial industry – with almost $9 trillion in assets, more than half the size of the U.S. economy – would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders. Neither bank executives nor shareholders have much incentive to change the situation. On the contrary, the financial industry spends hundreds of millions of dollars every election cycle on campaign donations and lobbying, much of which is aimed at maintaining the subsidy. The result is a bloated financial sector and recurring credit gluts. Left unchecked, the superbanks could ultimately require bailouts that exceed the government’s resources. Picture a meltdown in which the Treasury is helpless to step in as it did in 2008 and 2009. (Bloomberg, 20 February 2013)

“Banks on Welfare Rake in Billions. Public Pays” should have been the screaming headline across the front pages of every “responsible” newspaper and a lead feature on every financial show. Instead the story was relegated to a few carefully understated and forgettable paragraphs on

The Trends Journal • Spring 2013

the Bloomberg web site. Why, in the language of the Bloomberg editors, was it a “Hard concept to swallow”? Banksters as Gangsters? For well over 2,000 years, from the time of Jesus Christ to James Madison to today, money changers, bankers, loan sharks – call them what you will – they have been exposed for who and what they are – parasites insatiably sucking the life blood out of the public. Back in 2007, Gerald Celente predicted the Panic of ’08. When it hit, we had no problem swallowing the “concept.” We accurately called the bailouts “the biggest bank robbery in history and the banks are doing the robbing.” But in those days, Bloomberg and the rest of the financial media were selling the public on the merits of robbing the public to pay for the crimes committed by the banks and financiers. Bloomberg? CNBC? The Wall Street Journal? The Financial Times? These proud champions of capitalist free enterprise? In capitalism, there is no such thing as “too big to fail.” In reality, by their continual drumbeat of support for bank bailouts, and their demonizing the few that dared speak out against it, they were championing fascism. Because only in fascism – the merger of state and corporate powers – is the public forced to pay the bad debts of private enterprises.

THE MEDIA DOESN’T MATTER When would people stop depending upon the mainstream media for agenda-free, meaningful information and stop imagining that entrenched political systems could solve their nation’s problems? What is it that allows adults to look to politicians with track records of unrelieved failure and still entertain the hope that the same parties that created the problems could fix them? How much failure would citizens have to endure and how many promises would have to be broken before they would rise up and take the future into their own hands? When would enough become enough? In Italy, in 2013, enough finally became enough. Adesso basta rang loud and clear in February when the austerity-ravaged Italian public cast only 10 percent of their votes for Mario Monti, the technocrat who had been installed in the Winter of 2011, following the resignation of the embattled Silvio Berlusconi. Yet, in the barrage of press devoted to the Italian election, and its repudiation of the Monti government, there was not one single reference to the effusive praise and high hopes that, in 2011, had been lavished by the financial media and world leaders upon the undemocratic technocrat takeovers in both Italy and Greece:

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Anthony Freda / Dan Zollinger

Wolf … in Sheep’s Clothing

Greece and Italy Seek a Solution From Technocrats ROME — Under the white-hot pressure of the bond markets and the glare of European leaders, both Greece and Italy snapped into action on Thursday, looking to technocratic leaders to pull them back from the brink of chaos. Greece named Lucas Papademos, a former vice president of the European Central Bank, interim prime minister of a unity government charged with preventing the country from default. In Italy, momentum was building behind Mario Monti, a former European commissioner, to replace the once-invincible Prime Minister Silvio Berlusconi as early as Monday. The question now, in both Italy and Greece, is whether the technocrats can succeed where elected leaders failed — whether pressure from the European Union backed by the whip of the financial markets will be enough to dislodge the entrenched cultures of political patronage that experts largely blame for the slow growth and financial crises that plague both countries.

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Some said there was cause for optimism. “First, the mere fact that they have been asked in such difficult circumstances means that they have a mandate,” said Iain Begg, an expert on the European monetary union at the London School of Economics. Granted, it’s not a democratic one, but it flows from disaffection with the bickering political class.” (NYT, 10 November 2011) Boasting diplomas from top White Shoe Boy universities, having served lifetimes in executive “service” in the most prestigious public and private sector institutions, and with impeccable pedigrees, surely the technocrats would salvage the economies left in ruins by impotent and incompetent politicians. The consensus of the business news coverage was that Monti and Papademos were more than just two run-of-the-mill outstanding guys who would restore euro zone integrity. They were “well respected,” “distinguished” technocrats who brought “legitimacy” and “credibility” to the task. And, to guarantee they would fix their failing economies, they filled their cabinets with fellow technocrats who could be relied upon to do what was financially,

The Trends Journal • Spring 2013


rather than politically, expedient: Europe Pulls Back From Brink

Greece Swears in New Leader as Italy Moves Austerity Plan Forward; U.S., European Markets Jump

Greece and Italy—whose fiscal and political crises have set off ever-bigger scares among global investors—took concrete steps toward budgetary austerity Friday, helping soothe markets for the moment. Mr. Berlusconi, who tried to tackle the crisis with tax increases and spending cuts, has pledged to step down as soon as the measures are approved by the lower house, which will vote on the matter Saturday. “Hope for better management in Greece and Italy is causing the market to breathe a bit of a sigh of relief,” said Tom Samuelson, chief investment officer at First Allied Asset Management. (The Wall Street Journal, 12 November 2011) However, while the press and their pundits waxed optimistic, our analysis of economic conditions led us to totally different conclusions. Thus, while the equity markets celebrated, in our Winter 2012 Trends Journal we identified “Technocrat Takeover” as a Top Trend that would prove a windfall for bailed-out banks and creditors, but a disaster for the public that was being forced to finance the bailouts. One year later, the “Technocrat Takeover” proved to be the failure we had predicted. When Mario “Three Card” Monti took the helm, Italy’s debt-to-GDP ratio stood at 120 percent. After a year of “better management” the debt-to-GDP ratio stood at 127 percent. In Italy, Greece, Spain, Portugal, the eurozone recession deepened, unemployment rose, and along with it so did social tensions: Euro-Area Unemployment Climbs to Record on Recession The euro-area jobless rate rose to a record in January as austerity measures taken to counter the debt crisis deepened the currency bloc’s recession. Unemployment in the 17-nation euro area rose to 11.9 percent from a revised 11.8 percent in December, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995. “The situation is very serious,” said Alexander Krueger, chief economist at Bankhaus Lampe in Dusseldorf. “There’s no support any more from Germany. It’s more or less a sideways movement which I expect to continue. Other economies like Italy,

The Trends Journal • Spring 2013

Spain and Portugal are very bad at the moment, so in the end the unemployment rate can only climb.” The euro-area economy recorded its worst performance in four years in the fourth quarter with a contraction of 0.6 percent. Today’s report showed that 18.998 million people were unemployed in the euro area in January, up 201,000 from the previous month. The data also showed that youth unemployment is at 24.2 percent, with Spain’s rate more than double that, at 55.5 percent. Italy’s unemployment rate rose to 11.7 percent from 11.3 percent, while Germany’s held at 5.3 percent. French unemployment edged higher to 10.6 percent. At 26.2 percent, Spain had the highest jobless rate in the currency bloc among those countries reporting January data, while Austria had the lowest rate at 4.9 percent. (Bloomberg, 1 March 2013) Further, following earlier optimistic EC forecasts that austerity measures would lead to economic growth, in February, the most recent figures revealed that eurozone GDP actually contracted in 2012: Eurozone recession deepened at end of 2012 The economy of the 17 nations in the euro shrank by 0.6% in the fourth quarter, which was worse than forecast. It is the sharpest contraction since the beginning of 2009 and marks the first time the region failed to grow in any quarter during a calendar year. It followed news that the economies of Germany, France and Italy had all shrunk by more than expected. A recession is usually defined as two consecutive quarters of contraction. In the first three months of 2012 the eurozone economy failed to grow, but then in the second quarter of the year it contracted by 0.2% and it shrank by 0.1% in the third quarter. Carsten Brzeski from ING said: “These are horrible numbers, it’s a widespread contraction, which does not match this positive picture of stabilisation and positive contagion.” But he added: “We still expect growth to return in the course of 2013 but any return of growth will be very small which means that the social impact of this recession, especially in the peripheral countries will be still a very severe one.” (BBC, 14 February 2013)

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LET THEM EAT NOTHING

Yet, despite the undeniably dismal data, the policy of impoverishing the people to pay off the bankers – with the avowed expectation that it would reverse recessions, encourage growth and restore prosperity – was the lunatic notion that remained “official” policy. Olli Rehn, the European commissioner for economic and monetary affairs demanded the EU member states “stay the course of reform and avoid any loss of momentum.” In his official role as cheerleader for the banks and financial interests, Rehn warned that easing off austerity measures “could undermine the turnaround in confidence that is underway” in the equity markets and among investors. It was, in the truest sense, a parallel universe: The investor world and the rest of the world. More than just a “Let them eat cake” moment, this was a “Let them eat nothing” moment. Who but an incurable money junkie could overlook the pain and suffering already inflicted upon millions of people as a result of the financial sector’s terrible addiction? And who but a money junkie could remain oblivious to the inescapable consequences that must follow if governments were callous enough to “stay the course” in order to “avoid any loss of momentum.” Commenting upon the violent protests still sweeping Bulgaria following the fall of its government, the Financial Times, on February 20th, warned that “… in today’s low-growth Europe, social unrest can break out with sufficient force to topple governments even in countries not directly hit by crisis.” Yes it could and yes it did. Five days later, Italy’s political system was broadsided by Beppe Grillo’s people-powered attack, which not only rattled the entrenched powers but shook the world equity markets. It would make history, but while history was being made, it wasn’t being written. Most of the world and most of the media missed the meaning of the upstart political movement.

Trend Forecast Yes, “The Media No Longer Matters and Beppe Grillo Proved It.” The spectacular showing by Beppe Grillo’s Movimento 5 Stelle, which won more votes in Italy’s general election than any other single party, represents a brand new, powerful, double-barreled trend that will re-shape the way political campaigns are run and, in so doing, will reshape the future. Taking 180 of Parliament’s 630 seats, Grillo’s party amassed enough votes to not only deny front runner Pier Luigi Bersani the clear majority needed to form a working government, but also sent a loud message to the entire

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eurozone: Adesso basta! – enough is enough! Faced with the prospect of still-higher taxes and more German-inspired austerity-as-usual, the Five Star Movement’s anti-establishment/anti-austerity populist showing far exceeded the predictions of the media, pollsters and politicians. The resurgence of the embattled and disgraced media tycoon Silvio Berlusconi was also unanticipated. But his strong showing was less a sign of popular support than the consequence of the mogul’s overt multimedia-votebuying campaign, promising amnesty for tax evaders and a $5 billion tax refund to property owners. TREND 1: MEDIA DOESN’T MATTER TREND Beppe Grillo, unlike all other candidates, spurned Italian TV and instead built his personal presence and party strength via a 73-stop barnstorming tour and a brilliantly orchestrated Internet campaign. Nine months ago he was polling only 5 percent nationally. With the largest social media following of any politician in Europe, Grillo’s “head on the Internet, feet on the ground” rise to prominence was generated through his one million Facebook and Twitter friends and followers. This is the trend of the future! It is also a new millennium megatrend that Gerald Celente forecast, in detail, as far back as the December 1999 Trends Journal. Moreover, in terms of presence, platform and personality, it is as though Beppe Grillo had been invented for the role of the Italian version of the “Internet Candidate” Celente envisaged: The Internet Candidate Starting in 1999, the opening salvos will be fired in the battle against the hegemony of America’s two-party political system. A combination of technological advances and seething public opinion has set the stage for the Internet candidate – a political newcomer beholden to no one and able to reach everyone. Free At Last No longer bound by conventional political rules of engagement, freed from the necessity to raise mega-millions to wage campaigns and no longer solely reliant on media approval for coverage, the Internet candidate will be a new-millennium voice speaking a new-millennium language that appeals to the politically disenchanted and disgusted. Just as the advent of television changed political campaign strategies forever, so the Internet will shortly revolutionize the entire political process.

The Trends Journal • Spring 2013


The potential Internet candidacy awaits its real-life Internet candidates… . (The Trends Journal, Winter 1999) Moreover, while The New York Times (and the rest of the mainstream media) now maintain that “Few experts anticipated the depth of anger displayed by Italian voters over the austerity” measures imposed by the Technocrat Monti, the fact is that, nearly a year before the election, Gerald Celente not only anticipated the “anger,” he singled out Beppe Grillo as the man who would give voice to it and transform that anger into a coherent force. (Gerald Celente on CJAD, Montreal Canada, 29 May 2012)

Italy election deadlock: Comedian Beppe Grillo wins 25% of vote (Mirror, UK) n

Those were his headline credentials. In the absence of substantive analysis, those repeated references amount to brainwashing, meant to lead the public to regard Grillo as only a comedian, a joker, with the implicit message: jokers are not to be taken seriously. On the other hand, when a candidate from one of the political ruling parties seeks office, regardless of track record or credentials, the language is never condescending. Imagine front page US headlines reading: “Former Peanut Farmer to Steer US Ship of State” “B-Movie Actor Takes Presidency.” n “Body Builder Wins Big in California.” n “Failed Baseball Team Owner Becomes President.” n “Unsuccessful Community Organizer Wins Second Presidential Term.” n “Draft-Dodging, Former Mormon Missionary Loses Bid for White House.” n

TREND 2: THROW THE BUMS OUT! The dire political conditions that made it possible for Grillo’s ascendance in Italy also prevail in countries big and small around the world. The “politically disenchanted and disgusted” citizenry Celente postulated as a pre-condition for the trend he predicted all those years ago has essentially become the norm: polls report that 88 percent of Italians distrust political parties, as do 80 percent of the British, while 85 percent of Americans distrust their government … and so on around the world. Standard, entrenched political systems everywhere – democratic, autocratic, left-wing, right-wing or monarchical – are ripe for revolution, non-violent or otherwise. The Internet Candidate is an “idea whose time has come.” Adesso basta! the message from Italy, will be heard around the austerity-ravaged world. Perhaps it is no more than coincidence, but Italy, where the European Renaissance first took root and flourished, may be the breeding ground for Renaissance 2.0.

Trend Lesson Around the world, virtually all the media coverage of Beppe Grillo, both prior to and after the Italian election, ran headlines or news features labeling him a “comedian”: n

Comedian’s Party Is Wild Card (WSJ)

n Italy election: A former comedian runs circles around

a former EU commissioner (Telegraph) n Ex-comedian Beppe Grillo votes in Italian election (AFP) n Gridlock Fear Rises in Italy As Comedian Rejects Deal. (NYT) n No laughing matter: How a comedian’s election is upending Italy (Christian Science Monitor) n Beppe Grillo: Clown prince takes Italian election by storm - CNN.com n Italian Comedian Wins Votes In Local Elections On Wave Of Discontent (International Business Times)

The Trends Journal • Spring 2013

n

Absent from the tremendous barrage of press generated by the Italian election was a single article or news broadcast that mentioned what each of the “stars” in the Five Star Movement (M5S) Grillo had founded in 2008 stood for. Even more astonishing, when the question “what does each star of Beppe Grillo’s Five Star Movement represent” is “Googled,” dozens of entries have to be scrutinized to learn they stand for public water, sustainable mobility, development, connectivity, and environmentalism. Plentiful clean water, affordable and efficient transportation, an unpolluted environment. How quaint! Yes, plenty to laugh at! What a joke. Only a comedian could think up anything so outrageously funny.

Trend Forecast Direct Democracy! The Future is Now! In a sign of the times, Beppe Grillo, a champion of Direct Democracy, (long advocated by The Trends Research Institute and The Trends Journal), has called for an online voting referendum in which the Italian people, not the Italian government, decide whether to stay with the euro or return to the lira. But Grillo’s call for Direct Democracy (DD) has, so far, not been taken seriously by the media and has been essentially sloughed off as the ranting of a malcontent. Living in the past, and committed to the status quo, rather than evaluate DD as a potentially positive measure capable of restoring democratic principles to a nation where democracy now exists in name only, the media continues to misread the temper of the times and misleads the public as

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a voice that could not be sito where the future is heading. “If we get into parliament we would lenced. What applies to Italy – a M5S established the preccorrupt, rotting, inefficient bring the old system down, not because edent for outflanking the staand entrenched political syswe would enjoy doing so but because tus quo of political and media tem that serves only the needs monopolies. This was no fluke; of those in power – applies, in the system is rotten … ” it was a watershed event; it different forms and to differwas to politics-as-usual what ent degrees, in Spain, Ireland, the automobile had been to the horse and carriage, or Greece, Portugal, Bulgaria, the US, the UK and the mathe commercial jet plane to the ocean liner. Grillo’s apjority of nations that pretend they are representative deproach promises to do to politics what the Internet has mocracies. done to newspapers and the publishing industry. While Further, Grillo’s ultimatum, “If we get into parlianewspapers and books still exist, they’ve been greatly rement we would bring the old system down, not because duced in number, have been forced to go digital and have we would enjoy doing so but because the system is rotseen their influence diminished. What M5S now portends ten,” is neither an idle boast, nor a threat. His nonparwas inconceivable within the framework of the establishtisan disdain not only resonated with many of his counment’s perception, and therefore neither Washington nor trymen, it may also serve as a model for the numerous most governments around the world understood it. other countries whose citizens share the Italian sense A week after the Italians went to the polls, the Portuof deep alienation, oppression and powerlessness. The guese took to the streets: only time anything is going to change for the better (be it in politics, education, religion, health care, ecoHundreds of thousands march nomics, etc.) is when the “rotten” systems in place have against austerity in Portugal been replaced. Hundreds of thousands of people took to the Protest movements are erupting around the planet. streets of Lisbon and other Portuguese cities SatMillions upon millions are taking to the streets, often to urday to protest against the government’s austerbe dispersed with tear gas, riot police, rubber bullets, real ity measures aimed at rescuing the debt-hit eurobullets, and martial law. Grillo’s M5S campaign, with its zone nation. DD platform, represents an ingenious, even enlightened, The rallies were organised by a non-political non-violent and probably more effective recipe for real movement which claimed 500,000 marched in the and lasting change. country’s capital and another 400,000 in the main northern city of Porto. There have been no official Campaigns 2.0 Beppe Grillo has proved that elecestimates of the crowds. tions can be won without any of the modern day ingrediBut the mood of the crowd was clearly political, ents found on the usual political supermarket shelves; no calling for new elections with banners declaring campaign strategists, no war chest, no speech writers, no “Portugal to the polls!” and “If you fall asleep in polling, no media presence, no dragging the wife and kids a democracy, you wake up in a dictatorship”. along on the campaign trail, no phony, staged photo ops Another banner showed a picture of centre… and above all, no teleprompters. right Prime Minister Pedro Passos Coelho with While it was big news in Italy that M5S was refusing the caption: “Today I am in the street, tomorrow to work with the established parties to form a new govit will be you.” ernment, a week after the elections, Grillo and his party Finance Minister Vitor Gaspar has said the were still being laughed off and left out of the US press. economy is expected to contract around two perAnd there were no “official” statements from the White cent this year, double an earlier forecast. House on the elections, nor anything from Washington The organisers of Saturday’s march are galvanpoliticians. ised by their opposition to the so-called troika of Seemingly oblivious to the danger posed by M5S to public creditors – the European Union, the Eupolitical establishments worldwide, they did not recognize ropean Central Bank and the International Monthat Italy was not an aberration, but a model, a template etary Fund – who bailed out Portugal. for revolution. Grillo’s rise to prominence signified that “This demonstration is a clear sign that ‘the today’s politicians would soon become as obsolete as the troika’ and the government are not wanted in campaigns they ran. In Italy, popular disgust with the this country,” said Joao Semedo, the leader of a political system and the politicians running it now had

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The Trends Journal • Spring 2013


far-left bloc. After cutting salaries and pension benefits in 2012, the government this year has declared a general tax increase and expects to impose further cuts of some four billion euros. (France 24, 2 March 2013) Many of those who had voted in Coelho’s pro-austerity government in June 2011 – with its promise to ease the financial crisis and restore economic growth – now having lost everything, and with nothing left to lose, were losing it: “Today I am in the street, tomorrow it will be you,” was their threat. The tone had turned ugly. If the chant, “If you fall asleep in a democracy, you wake up in a dictatorship” couldn’t be heard as a warning to Coelho, the crowd’s wearing carnations in commemoration of the “Carnation Revolution,” of 1974 (which brought down the SalazarCaetano dictatorship), and singing “Grandola, Vila Morena” (the song that galvanized that revolution), should have been. But it wasn’t.

The Movement, Not The Protest In Tu-

nisia and Egypt, popular protests had forced out corrupt secular autocratic regimes, only to see them replaced by religious autocratic regimes. And, in each instance, the protestors responsible for taking down the old government were excluded from participation in the new one. The mass protests in Tunisia and Egypt are broadly comparable to the other protests that have erupted around the world following the Panic of ’08 and the Great Recession/ Depression, and there is a lesson to be learned from them: At best they prove marginally effective: governments fall, new elections are held, and voters are given the choice between more of the same or something not much different. n At worst, mass protests either accomplish nothing or make a bad situation worse: The people take to the streets and those in power ignore them or beat them into submission, and – as in Russia, the United States and North Korea – clamp down, severely restrict and/ or entirely forbid protests. n

The lesson is: “protest” is an outmoded model. The new millennium model is the “movement.” And the Five Star Movement is the model.

Grillo’s Guerillas It was Margaret Mead who said,

“Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.” Beppe Grillo and his movement colleague

The Trends Journal • Spring 2013

Gianroberto Casaleggio have proven that saying true. While it is passion that generates the protests and provides an outlet for the anger, both are soon dissipated without a movement to contain and express them. In Tunisia and Egypt, while there was enough organization to get the people into the streets, there was no established movement and no coherent, directed force to vote them into office. When those governments fell, the vacuum was filled by the long-established Muslim Brotherhood, which had stood by as the protests raged, but gained control of their respective governments once the hated regimes were toppled. And in both instances, those who galvanized the protests and took to the streets, having no powerbase of their own, and neither a unified message nor a single voice to express it, were denied any role in the new governments. On the other hand, Grillo’s M5S, founded in 2009, was a true movement with a clear message, a marketing strategy, a charismatic messenger, and four years’ worth of momentum behind it. It was neither a flash mob nor a flashin-the-pan “Occupy Movement,” bringing out protestors but, lacking a structure, quickly burning out without accomplishing anything.

Publisher’s Note In our Top Trends 2012 Trends Journal, we identified the Occupy Movement as a top trend whose time had come and we forecast it would grow and spread. We believed that the movement would find its focus as it gathered strength. In retrospect, however, the criticism leveled against the Occupy Movement from the onset, by both supporters and detractors, proved valid: It had no message, no method, no messenger and no clear platform, which, taken all together, proved to be its undoing. In the months following our forecasts, after several “Occupy” camps were violently uprooted by police and winter moved in, the protests dissipated and never re-coalesced. The Occupy Movement was not a true “movement.” It was a “protest!” But M5S has put together the basic recipe for a future that is not “more of the same or something not much different.” Like most basic recipes, different “chefs” will likely find creative ways to combine and cook the ingredients. And as with all meaningful threats to the establishment (be it politics, science, scholarship, even the arts), the paradigm police will do whatever is necessary to attack, discredit and demonize anyone and anything that challenges the status quo. So with Grillo. No sooner had he been promoted from “comedian” to “kingmaker” by the media than an attack was launched. “Italy kingmaker causes alarm abroad with anti-Semitic rants.” (AP, 7 March 2013). True to form, as with anyone who dares voice disap-

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Anthony Freda / Dan Zollinger

proval of Israel for its treatment of Palestinians, and confiscation of their land in violation of International Law, Grillo was accused of anti-Semitism for having said, among other things, “Israel is frightening. Its behavior is irresponsible.” A substantial AP article largely devoted to Grillo’s putative anti-Semitism quoted spokesmen for the Anti-Defamation League at length, as well as other Jewish groups and a “Rome-based American journalist,” as though they spoke for world Jewry. But when closely read, Grillo’s negative remarks were clearly not at all anti-Semitic. They were anti-Israeli government policy. As such, they were in fact, far less strident than criticisms leveled at Israel’s policy by eminent Jewish and Israeli critics such as Noam Chomsky, Gideon Levy, Uri Avnery and Norman Finkelstein, who are routinely published in Haaretz and other Israeli publications.

Publisher’s Note Israel is a Jewish state. It is a nation, not a religion. Yet, when anyone, myself or any other non-Jew, dares criticize the actions taken by the Israeli government, we are instantly labeled anti-Semites by “Israel can do no wrong” lobbyists and supporters. Yet, when I criticize the present Egyptian government, I am not called anti-Muslim. When I excoriate the United States for its unjust wars, the raping of the Constitution, destruction of the economic system to enrich the multinationals, I am never taken to task as anti-American. When I rail against France for initiating the murderous wars against Libya and invading Mali, no one calls me a Francophobe. When I wrote about Britain’s brutal sup-

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pression of the Tottenham riots and the grotesque sentences meted out to protesters for minor violations, no one called me Anglophobic. But say one thing about Israel’s decades-long, on-going theft of Palestinian land or any of its other innumerable violations of international law, and you’re an anti-Semite! As well as the charges of anti-Semitism that will continue to be leveled against Grillo, opponents (domestic and international) will seize upon anything pejorative they can find or concoct to defame him and undercut his support. Already, he is being painted as a neo-Mussolini or a Castro of the Mediterranean. And, as history has repeatedly demonstrated, any serious threat to the established political/financial order carries with it the threat of assassination.

THE INTEREST RATE RECOVERY For most Americans, the name Beppe Grillo remained an unknown. And even if he were to acquire greater notoriety, the US public – with dumbed-down News From Dumfukistan print, network and cable outlets – would be kept ignorant. The States’ only real interest in the Italian elections was evidenced in the business media, when the fallout from the surprise success of M5S briefly roiled the European and US equity markets. Two weeks later, with the Grillo-Effect dissipated and little concern that the stillunresolved fate of the Italian government would impact the financial markets, the Dow hit new highs, markets around the world surged, gold prices continued to slump and the word on the Street was “recovery.” Yes, apart from deepening depression in already depressed nations, in the US, economic data was showing “better than expected” growth. The good news was that 236,000 new jobs were created in February and unemployment declined from 7.9 percent in January to 7.7 percent. The bad news was that 130,000 more people dropped out of the workforce, bringing the total number of people in the nation’s labor force to the lowest level in three decades. In 2009, the newly elected President Obama told the nation that under his $900 billion bailout plan, the unemployment rate would fall to 7.2 percent by 2010.

The Trends Journal • Spring 2013


IT’S ONLY MAKE BELIEVE

The politicians promised, but the numbers didn’t lie. Of the 9 million jobs lost since the Panic of ’08, only 5.7 million had been re-created. And all there was to show for the tens of trillions lavished on banks, businesses and brokerages across the nation and around the world was nearly $3 trillion more added to the Fed’s balance sheet, while Uncle Sam sunk $16.4 trillion deeper into the hole. Yet, even if February’s rate of job growth were to continue, the US economy would not get back to the pre-recession level of unemployment until 2017. With a promise to keep interest rates near zero until unemployment went down to 6.5 percent, the Fed added another $45 billion in Treasuries to its $40 billion a month mortgage-backed, bond-buying scheme it began in September. Home prices were rising, inventories in February were down 23 percent from a year earlier, and the demand for increased housing spurred construction industry hiring, adding 48,000 jobs, the most in six years. Along with the building rebound and consumers spending more on remodeling and landscaping, home-improvement retailer Home Depot added 80,000 temporary jobs (up 14 percent from a year ago), while its competitor, Lowe’s, said it would take on 45,000 temps and add 9,000 permanent employees. Payrolls climbed at retailers, professional and business services such as temporary help firms, while factories hired 14,000 new workers. And with car and truck sales running close to the best pace in five years, the prospects were good for even more factory hiring in coming months. Reaching an annualized rate of 15.4 million cars and trucks, auto sales rose 1.1 percent after a 0.4 percent January increase. While short of the recent peak of nearly 17 million in 2005, the up-trend in auto sales was strong when compared to the anemic 10.4 million recorded during the recession in 2009. With money cheap, and markets on the upward move, the vulture capitalists were back in the buyout business. In a near repeat of the go-go pre-Panic of ’08 frenzy, private-equity firms were paying price-to-cash-flow ratios at the elevated levels of 2006. As for the fears that bonds would get crushed when interest rates eventually rose, the feeling on the Street was that rates would go up as a result of the economy improving and defaults would remain minimal. By mid March, the S&P broke its record 1,565 close, set in 2007, and the Dow was on its longest winning streak

The Trends Journal • Spring 2013

since 1996, with stocks on track for their best first quarter since 1998. On Wall Street optimism was in full bloom. On Main Street it was a different story: Consumer sentiment tumbles in March Consumer confidence fell in early March to its lowest level since December 2011, according to a University of Michigan/Thomson Reuters survey out Friday. The survey said the decline was mostly due to frustration with budget wrangling in Washington and ongoing fears about layoffs and a scarcity of available jobs. The index, based on a survey that gives a reading of consumer sentiment, fell to 71.8 from 77.6 in February. Economists had expected the index to rise to 78. A record-high 34% of survey respondents made unfavorable references to government fiscal policies, beating January’s prior record of 31%. “The frustrations expressed by consumers essentially involve how little consideration has been given to how the government’s inability to reach a compromise affects people’s economic situation,” Richard Curtin, director of the survey, said in a statement. A measure of current economic conditions fell to 87.5 from 89, while a measure of consumer expectations over the next few months plunged to 61.7 from 70.2, its weakest since November 2011. Nearly a third of consumers, 30%, said they expect economic growth to slow this year. That’s up from 22% who held that view in January. And 38% said they believe the unemployment rate will rise, far higher than 27% of survey respondents who held that view in January. (USA, 15 March 2013) It was the great divide. On one side was the infamous “one percent.” Owning more than 40 percent of the nation’s wealth and over 50 percent of stocks, bonds and mutual funds, it was they who ran the corporate world, owned the media world, and “owned” the political world. (For example, to buy access to quarterly meetings with President Obama, “donors” for Organizing for Action, the lobbying group set up to promote the President’s and Democratic party’s agenda, were asked to raise or contribute $500,000).

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MAGIC VS. REALITY

Thus, the image of America – socially, economically, geopolitically – is a creation of an elite corporate/political/ media “troika” that bears little relationship to the “real world” of the 99 percent living on the other side of the great divide. Aware of the statistics and apprised of the facts, even if well intentioned, the one percent were far removed from the pains and problems plaguing so much of the population. As James Madison noted in 1795, “The man who is possessed of wealth, who lolls on his sofa or rolls in his carriage, cannot judge the wants or feelings of the daylaborer.” The parents of the troika elite were not among the elderly with no income. Without pensions or benefits, and with no money to pay property taxes and school taxes, the next-to-last resting place of these once upwardly mobile Americans who worked hard all their lives and now had nothing was out on the street. According to The Employee Benefit Research Institute’s 2013 Retirement Confidence Survey, only 13 percent of workers were very confident and 38 percent somewhat confident that they would have enough savings or income for a comfortable retirement. Twenty eight percent said they had saved less than $1,000 toward retirement, while 57 percent said the total value of their household savings and investments (excluding the value of home and pensions if they had any) was less than $25,000. So cash-strapped was the indebted society that only half of the workers polled said they could come up with $2,000 if an unexpected need arose in the next month. TAKEOVER

While the statistics were dutifully, if sparsely, reported, the faces of the homeless, foreclosed, working poor, the notworking-at-all and the legions of maimed, destitute and suicidal vets went unrecognized, while the true depths of pain and suffering remained papered over by the press. Yes, there was economic improvement. It wasn’t all illusion. It was fact. And while relatively few were benefitting from it, the implied consensus from Washington, the media, and Wall Street was that growth and prosperity were there for all who had bootstraps to pull themselves up by, didn’t mind putting in a hard day’s work, sang the Star Spangled Banner at sporting events and knelt down at night to say their prayers. Bootstraps? Kids out of college were lucky to find a job at Footlocker. Hard day’s work? Where? Sam’s Club? Walmart? Olive Garden? Staples? Home Depot? CVS? All dead-end jobs with no real future and no pride of ownership, no creativity … soul-sapping, life-sapping, gotta-doit-even-though-I-hate-it-and-it-pays-next-to-nothing jobs.

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That was the real America. Main Street had been eviscerated by the big chains and near-monopolies. Little guy and gal shops, Mom and Pop stores – it all sounded nice, especially spewing out of the mouths of politicians at election time, but in reality the enterprising entrepreneur stood little chance in a United States run by the too-bigto-fails for the “too big to jail.” In fact, everything was OK as long as it was OK for them. For the one percent.

Half a World Away The news out of China was not so great but not so bad. Industrial output had the weakest start since 2009 yet, compared to the rest of the world, weak for them would be sensational for most. Production rose 9.9 percent and retail sales rose 12.3 percent in the first two months. Although imports lagged, China’s exports increased 21.8 percent in February from a year earlier, beating the 8.1 percent median estimate by economists in a Bloomberg survey. While most central banks remained on the cheap money/stimulus/bond-buying binge, in China, with inflation rising 3.2 percent and home prices soaring, central bank governor Zhou Xiaochuan signaled a tighter monetary stance. “In the past some of us thought it was no big deal if inflation was a little bit high, growth will be a little faster and we can control inflation afterwards. But international experience and our own experience here show that this thinking might not be correct. It requires careful attention to maintain low inflation,” he said. In an effort to rein in runaway property prices, the government levied a 20 percent capital gains tax on real estate transactions to thwart speculators. And the central bank started withdrawing cash from the economy via its open-market operations. But with China signaling that it would apply the brakes, how would resource-rich exporters such as Australia fare? Thanks to a surge in exports, it closed out 2012 by registering 21 years of continuous GDP growth, a feat unmatched by any other OECD economy over that period. Australia, Bolivia, Brazil, Russia, Chile, Canada and all those other natural-resource-rich suppliers would be adversely affected by a China slow down. Weeks earlier, Moody’s downgraded the UK’s creditworthiness from AAA to AA1 and, citing the indecisive Italian elections, the deep recession and rising debt burden, Fitch downgraded Italy to BBB+, just three notches above ‘junk’ grade. Overall, however, there was a mood of cautious economic optimism that served to counter the bleak economic news, wars, uprisings and uncertainty that prevailed throughout many other parts of the world. The Trends Journal • Spring 2013


Trend Forecast What was being called “banking” was, in practice, nothing more than a global pump-and-dump Ponzi scheme. Most of the “industrialized” world was sinking deeper in debt. The deeper it sank and the more the economy deteriorated, like a patient dying of cancer while on lifesupport, the mad financial doctors kept increasing their doses of monetary chemotherapy: ECB rates to stay low ‘as long as needed’ Draghi expects gradual eurozone upturn

The European Central Bank yesterday said it would maintain an easy monetary policy stance “as long as needed” while the eurozone battled record unemployment and shrinking economic activity. “Our monetary policy will remain accommodative as long as needed,” Mario Draghi, ECB president, said. Barclays analysts said in a note: “This commitment to an ‘open-ended’ policy is something new, showing the ECB’s desire to see market rates remain close to zero despite the ongoing improvement in financial markets’ confidence towards the euro area.” Although some on the 23-member governing council had sought a cut of the main refinancing rate from 0.75 per cent, the ECB kept rates on hold for the eighth consecutive month. Mr Draghi has consistently struck a gently upbeat tone on eurozone prospects, despite saying repeatedly that risks to the outlook “remain on the downside”, adding: “The recovery path is by and large unchanged. Later in 2013, economic activity should gradually recover, supported by a strengthening of global demand.” (FT, 8 March 2013) There was no “recovery path.” It was nothing more than a glib, manipulative con job from the mad central bank scientists. Eurozone GDP growth had been downgraded by the central bank from a 0.3 percent decline just a few months earlier to a projected contraction of 0.5 percent this year. Newly released data showed unemployment in France, the eurozone’s second largest economy, hit 10.6 percent in the fourth quarter, its highest level since 1999. And then there was that little story with the little headline about Lisbon down on the bottom of page 4 of the Financial Times: Portugal sharply cuts economic forecasts Portugal’s centre-right government expects the economy to plunge deeper into recession this year,

The Trends Journal • Spring 2013

announcing deeply pessimistic forecasts that will fuel growing anti-austerity sentiment in the country. The cut in estimates on Friday comes after concluding a tough round of talks with international lenders. The government said the deeperthan-expected downturn in Europe meant the Portuguese economy would shrink by 2.3 per cent this year, more than twice as much as the previous government forecast, as export growth slowed to 0.8 per cent. Unemployment in Portugal is forecast to soar to 19 per cent by December and not fall below 17 per cent for four years, amid painful austerity measures and a deepening recession in Europe. “The government has failed at every level,” said the centre-left Socialists, the main opposition party. Other opposition parties described the jobless forecast as “shocking” and called for the resignation of Pedro Passos Coelho, the prime minister. (FT, 16 March 2013) Year after year, country after country and time after time, the scam was essentially the same: The IMF/EC/ECB troika forced nations to swallow bitter austerity medicine as a snake-oil prescription for long-lasting economic relief. Then, as conditions deteriorate, the dosage is upped, the time table for recovery pushed forward and never, not once, in any of the major media is it called what it was: Terminal Depression. Except for China’s recent move to curb inflation, most other central banks pledged to keep interest rates low, pretending that the bonds and treasuries they were buying would yield profit and stimulate long-term growth. In essence, they were pledging to keep rigging the markets. As with all Ponzi schemes, the system is destined to collapse and the victims will be all those who believed their governments and were holding currencies that were being systematically debased. The economic growth could not last and would not last. The rising equity markets were direct beneficiaries of the record low interest rates and central bank stimulus and would plummet as soon as the money pumps were turned off. The only difference between this Ponzi scheme and the one that Bernie Madoff is serving a 150-year sentence for was that Bernie had hoodwinked his clients into believing he was an ace investor making money with their money. By contrast, with the Grand Central Bank Ponzi scheme there is no pretense of wise investments making money. They were just printing money, and everyone knew it! The only question remaining was: How near was the end? o

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THE SEARCH FOR AN OIL-FREE FUTURE by Bennett Daviss

The current boom in the United States in gas and oil production from shale is spreading world-wide, but it comes with a price: political and military strife, environmental degradation, and the collateral economic damage that global dependence on oil causes. (See Trends Journal, Winter 2012)

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oncurrently, however, the search for alternatives to petroleum continues unabated and technological explorers are showing us glimpses of a different future that’s both possible and practical.

Self-fueling Cars Imagine owning a car that never needs to stop at a gas station or be plugged into an electric socket. Now imagine having a choice of two vehicles that fill that bill. Within ten years, you might have just that choice. It is a trend in the making. One self-fueling technology is being developed by Air Fuel Synthesis Ltd. (AFS) a private firm in England. The plan: take carbon out of the air and transform it into “drop-in” replacement fuels for gasoline, diesel and jet fuel that are identical in chemistry and performance to their fossil-derived siblings. More than just hypothesis, AFS has successfully tested a workable process and fashioned a demonstration plant out of two shipping containers. The process pulls carbon dioxide from both ambient air and “point sources” (such as breweries and other generators of carbon-rich waste gases) and converts it to fuel. So far, the plant has produced methanol and gasoline, and is at work developing other fuels while improving the efficiency of the process. There are some elements of “breakthrough science” involved here, about which the company is mum, but this development is predominantly a matter of a clever use of existing technologies. In part, it’s a variation on a process that’s been used to distill carbon from various sources for almost a century. In World War II, when Allied bombers denied Nazi armies access to Romania’s oil fields, the German war machine turned to a refining technique created by Franz Fischer and Hans Tropsch, two chemists working at the KaiserWilhelm-Institut for Chemistry in the 1920s. Because Germany has little oil but an abundance of coal, Tropsch and Fischer devised a way to use a combination of carbon monoxide and hydrogen to convert coal into liquid hydrocarbon fuels. They discovered that 30

heating coal to between 150ºF and 300ºF in the absence of oxygen turns the coal to a dirty gas heavy in hydrocarbons. Under the right temperatures and pressures, and in the presence of certain chemical catalysts, the gas can then be condensed and refined into a usable form of crude oil. South Africa’s Sasol chemical conglomerate still uses the process to make most of this oil-poor country’s diesel fuel. AFS has taken a page from the Fischer-Tropsch process and from the process of a New Zealand group working to turn those islands’ abundant coal into methanol. The new venture blows air through an alkaline mist and carbon dioxide in the air reacts with the lye to form sodium carbonate, also known as soda ash. An electric current is shot through the soda ash, a step that separates out the CO2, which is then captured and stored. Water from the mist can be extracted and combined with water from other sources; then an electric current splits the water molecules into hydrogen and oxygen. RENEWABLE FUEL, RENEWABLE HOPE

The captured hydrogen and CO2 are then combined to form hydrocarbons. The process yields different fuels depending on the temperature, pressure and catalysts used in the reaction. Although teasing C02 from ambient air is a relatively inefficient process, “we’ve done it because we think it will be commercial at some point,” says Graham Truscott, the company’s director of marketing and investor relations. “Also, we wanted to prove the concept of recovering CO2 from the atmosphere and doing something useful with it, which humanity needs to do.” In the shorter term, AFS is capitalizing on the wealth of carbon dioxide being sloughed off by those rich industrial sources. To recycle those wasted hydrocarbons, the company is engineering a commercial plant that will consume about 29 megawatt-hours of electricity to produce a ton of fuel every 24 hours. The plants can be easily transported and set down adjacent to any source of carbon-rich gas, such as the smokestack of a coal-burning electric generation plant. Unlike most boards in which directors are appointed from a variety of business fields unrelated to a company’s core mission, the AFS board includes engineers and entrepreneurs highly knowledgeable in all aspects of energy, both traditional and renewable. They also know that

The Trends Journal • Spring 2013


Anthony Freda / Dan Zollinger

The Trends Journal • Spring 2013

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wind farms, solar electricity es, seems to generate more elec“Aviso claims to be drawing ‘ambient installations, and other renewtricity than it uses. The go-kartable sources often sell their like runabout’s single 12-volt energy’ from the air through an antenna excess electrons back to the battery powers an 11-kilowatt on the vehicle that channels energy to electric grid for a few pennies electric motor. In driving tests, per unit because they have no the car has been stopped perithe lone battery.” easy way to store the energy odically along its route to meathey create. But, as Truscott sure the battery’s charge. Startexplains, “…if we use that electricity to make liquid fuel, ing and accelerating gulp a lot of energy, but test results the fuel can be sold for upwards of 80 pence per unit. If indicate that the battery continually stays fully charged, we use it to make the specialized fuel needed in motor even though the motor should drain the battery of all sports, the electricity could be worth up to 600 pence power in a matter of seconds. per unit.” Aviso claims to be drawing “ambient energy” from Indeed, because the motor sports industry is eager to the air through an antenna on the vehicle that channels reduce its carbon load, it presents the first ready market energy to the lone battery. He says that the aerial draws for AFS products. The company’s advantage lies in the fact energy from signals in the range of 750 megahertz to 1.2 that conventional fossil fuels are “refined down.” They’re gigahertz, a span of frequencies that’s home to both raextracted from petroleum in a process that unavoidably dio and light waves. By tuning his proprietary receiver to brings a measure of petroleum’s dirt and contaminants that range of frequencies, he says, “any signal within that with it. But AFS fuels are “refined up” – made from pure range will be collected to boost the power of the battery,” hydrocarbon and infused with only the additives that cusenabling the battery to continually recharge even as it’s tomers want. discharging to run the car. The car also takes advantage of a phenomenon called FERRARI-FRIENDLY FUEL “back EMF (electromagnetic force).” In an electric moThe result is not only cleaner, but also more powerful tor, a spinning rotor creates an equal and opposite elecfuels; AFS’s first attempt at refining produced 94 octane tromagnetic force to the one it’s generating. Usually, that gasoline and the company believes it can easily produce force simply dissipates as inefficiency. Various inventors, fuel in the 120 octane range. The motor sports industry is including Aviso, have claimed the ability to harness this lining up to buy. “waste current” to do work or charge batteries. Aviso Indeed, selling pricey fuels to the waiting motor sports creates back EMF in his power system by opening and market will pay back a ton-a-day plant’s estimated £4-milclosing electrical circuits in his propulsion system tens of lion capital cost within five or six years, the company thousands of times each second, then captures it and reprojects, using a source of free CO2. AFS thinks that its deploys it to run the car. first commercial plant, producing 1,200 liters a day, can Tesla 2.0 The idea of powering a vehicle by harbe filling petrol tanks within 24 months of being funded. vesting “ambient energy” has been one of the grails of Once the practicality of the process is proven, AFS will alternative energy research since 1932, when electrical build plants with partners or license the technology to technology pioneer Nicola Tesla reputedly used “energy third parties. from the aether” to drive a Pierce Arrow for extended Visionaries foresee AFS’s technology being miniaturperiods at up to 90 miles an hour. The car’s gasoline enized to a size that could fit in a car’s engine compartment gine had been replaced by an electric motor, powered by and distill fuel from the CO2 in air. a small box full of circuits and vacuum tubes that Tesla The company’s concept and initial designs have been had assembled and connected to a five-foot-long antenna reviewed favorably by Britain’s Institution of Mechanical inside the car. Tesla refused to explain how his black box Engineers but is still living on angel investments totalpowered the motor, the car disappeared and no record of ing more than a million pounds. “We’re still a few million its existence has been found. The person who told the pounds short of commercial production and would love to story of riding in the car with Tesla claimed to be Tesla’s hear from investors,” Truscott says. nephew – but no record of a Tesla relative with that perThe second potential choice of a self-fueling car may son’s name has been found. As a result, many think the be powered by way of an electrical quirk harnessed by Isstory is apocryphal. mael Aviso, an entrepreneurial electrical engineer in the However, Tesla did expound on his idea that the sun Philippines. and Earth were like poles of a magnet, with the Earth’s Aviso has demonstrated an electric car that, as it cruis-

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The Trends Journal • Spring 2013


atmosphere acting as an insulator between the two. He’s said to have demonstrated a system by which the minute electrical charges of cosmic rays bombarding the planet could be collected and channeled to produce power. Current-day supporters believe that this might be the mechanism that fueled Tesla’s car – if it existed at all – and Aviso’s as well. While others have claimed to replicate Tesla’s apparent miracle, Aviso has gained an important imprimatur: in 2011, his technology garnered favorable results in tests performed by the Invention Development Division of the Philippine government’s Technology Application and Promotion Institute, a part of the country’s Department of Science and Technology. In the test, the electric motor in Aviso’s vehicle was run on electricity from a standard wall plug and was measured to be operating at about 45 percent efficiency. When unplugged from the wall and run as part of Aviso’s automotive power system, the motor was gauged at 133 percent efficiency – generating more electricity than it used, a theoretical impossibility but measured, remeasured, and verified by the independent lab’s standard equipment. His work has been supported by a cadre of private investors who will need patience as well as cash; Aviso still faces formidable engineering challenges. For example, his car can only run for about 30 minutes before the motor’s coils overheat and burn out. But he claims that, when commercial, his power system could be retrofitted into a petroleum-powered vehicle for about US$3,000 – less than the cost of 18 months’ worth of gasoline or diesel for the average car.

Editor’s Note For more information and updates, see the Aviso page at Pure Energy Systems at http://peswiki.com/energy/ Directory:Ismael_Aviso_Self-Charging_Electric_Car. More details and videos at: www.avisoenergy.com www.keelynet.com/avisotech.html www.youtube.com/watch?v=wC6aglJ6a_8 www.youtube.com/watch?v=_HFkBeUB4kQ

Nickel+hydrogen=steam Andrea Rossi, the maverick Italian inventor of the “E-Catalyzer” (Trends Journal, Autumn 2011), was the first to unveil a device that reputedly derives abundant, radiation-free nuclear energy by combining hydrogen gas with powdered nickel. Last fall, Rossi delivered yet another version of his invention to an unnamed “military partner” for testing. But Rossi’s former partners at Defkalion Green Technologies aren’t waiting for more tests. They’re ready to make products. The Trends Journal • Spring 2013

Defkalion was formed in Greece in 2009 to commercialize this as-yet-mysterious reaction: a combination of powdered nickel, hydrogen gas and a few proprietary catalysts under precise combinations of pressures and temperatures that produce heat to make steam. Rossi’s calculations indicate that as much as 20 times as much energy, as heat, comes out of the device than is used to run it – far more than a chemical reaction could generate. Also, the reaction among the materials doesn’t produce radiation but leaves behind copper isotopes and bits of iron in quantities not present before the reactor was turned on. This indicates that the process transmutes some elements in the reaction chamber into others, a signature of a nuclear event. Many observers believed Rossi’s device was poised to become the first commercial device able to capitalize on clean or “low energy” nuclear reactions to deliver cheap, abundant, pollution-free energy. REVENGE OF THE QUIRKS

But Defkalion and the notoriously quirky Rossi disagreed over both scientific and business ideas and divorced early in 2011. In the interim, several of Rossi’s early supporters have wearied of his string of unmet promises of public demonstrations and commercial products. Now Defkalion’s technology may overtake Rossi’s as the first venture to market nickel-hydrogen devices, as it unveils two inventions of its own. Alex Xanthoulis, Defkalion’s CEO, is quick to emphasize that the company’s products differ sharply from Rossi’s. An unnamed “major US organization,” he says, has compared Rossi’s and Defkalion’s devices on 14 points. “It found only two the same – the use of hydrogen and the use of nickel,” he says. “Otherwise, the two are completely different.” There are other points of departure. Rossi’s early devices, like the inventor himself, also were quirky. The temperatures they would reach weren’t predictable; they produced only a few watts of excess energy; and, when shut off, took varying lengths of time to stop producing heat. In contrast, Defkalion’s machines reportedly produce heat at precise temperatures that customers require and can be shut off within a few seconds. The devices also produce energy up to 10 kilowatt-hours, not single watts as others have. The nickel-hydrogen fuel modules can easily be pulled out and replaced when depleted, a task that should need to happen only every few months. Defkalion’s first product is called “Hyperion” and will enter the market early next year. A cube about 20 inches on a side, it will be marketed as a heater or boiler for homes and light industry needing up to five megawatts of power.

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The second product is a larger-scale reactor that can be used to drive turbines or even cars, trains, ships, space satellites, and planes. Defkalion reports fielding inquiries from hundreds of companies around the world and has chosen to partner with at least 10 large ones – including three vehicle manufacturers, a utility company, telecommunications firms, and a maker of aircraft – to continue research and development. Some of the companies already are testing commercial devices using the reactor as a power source. If Defkalion’s figures are right, the economic case is compelling. The cheapest electricity is generated from nuclear fuel at a cost of about US$.045 per kilowatt-hour. In contrast, Defkalion calculates that it can make electricity for US$0.0035 cents, less than a tenth as much. Xanthoulis notes that setting up a five-megawatt photovoltaic array in Greece, with 120,000 square meters of solar panels delivering full power for about seven hours a day, would cost US$10 million. Defkalion, however, maintains that its reactor, capable of providing the same amount of energy, would be only 20 feet long, cost $1.5 million, and deliver full power 24 hours a day. In practical terms, an ocean freighter, for example, spends around $27,000 a day on diesel at current prices, needs to make port for refueling, spews sooty exhaust, and risks polluting the seas in case of a fuel spill. Swapping the contents of a ship’s engine room for a Defkalion reactor would call for four 20-foot containers and fuel costs of about $400 a day. Refueling could be done at sea every six months and the risk of air and ocean pollution falls to zero. Defkalion will conduct a public demonstration of its reactor at the International Cold Fusion Conference during the third week of July 2013 at the University of Missouri in Columbia, and another at NIWeek, the National Instruments Conference in Austin, Texas, to be held August 5 – 8 this year. What the company won’t do is attempt to explain how its devices work. Defkalion is purely a business entity, Xanthoulis points out. While other ventures in low-energy nuclear reactions have been led by scientists intent on making new physics, Defkalion’s purpose is to make products. “We don’t operate on the principle of chemical reactions or nuclear reactions,” he says. “We operate on the principle of Mrs. Maria.” Mrs. Maria was a family friend who lived in the same apartment building in Greece as Xanthoulis. When Greece’s economic calamity struck, Mrs. Maria’s pension was cut by 40 percent and she couldn’t pay for heat. The building’s manager confided in Xanthoulis, who agreed to pay the old woman’s heating bill and swore the man-

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ager to silence. In the spring, Mrs. Maria told Xanthoulis how clever she’d been: the apartments all around her were heated, so she stayed warm even though she didn’t pay for heat. “Mrs. Maria didn’t know why she had heat and we can’t explain why our products create heat,” Xanthoulis says. “Our priority is not to explain what atoms are doing. Our priority is to make sure that Mrs. Maria stays warm. Of course we want a scientific explanation, but publishing scientific papers is not our first priority.” So far, Defkalion has survived on capital supplied by a small group of partners. Now that the company is ready to grow, it’s also ready to talk with investors. It shuns venture capitalists and banks, but has entered discussions with a few corporations and individuals and is ready to hear from others.

Editor’s Note For more information, contact: Defkalion Green Technologies 1140 Homer Street, Vancouver, BC Canada V6B 2X6 phone: 604 683 5555 email: info@defkalion-energy.com www.defkalion-energy.com

Trendpost Should these novel technologies emerge as viable alternative energy sources, not only will they prove to be spectacular investment opportunities, they will transform the current, fossil-fuel based geopolitical landscape. As we predicted in Trends 2000 (Warner Books, 1997), the future energy revolution will dwarf improvements in solar, wind or geothermal technologies. We wrote: “The energy revolution will be the single biggest investment opportunity of the 21st century. Its ramifications will extend to practically every aspect of human and planetary life.” Whether it will be the next generation or the generation following, given these recent developments, it is entirely conceivable that a time will come when there will be no gas, oil or electric bills. Geopolitically, these new energy sources will take a heavy socioeconomic toll on countries whose economies depend wholly or substantially upon oil exports, while rebalancing the balance of power. Foreign policy toward current strategic alliances will be reconfigured when “national interests” no longer mean oil interests. Vast amounts of money currently being spent on energy will be redirected toward reinvigorating stagnant economies, boosting home-grown power, industrial production, building and repairing infrastructures. On the grand scale, a cheap, clean, efficient, new energy source may prove to be the magic elixir for an ailing global economy. o

The Trends Journal • Spring 2013


THE RISE OF NEW MILLENNIUM EDUCATION by Bennett Daviss

If there’s a single adage that characterizes the last 100 years, it’s “work smarter, not harder.” For the most part, however, that notion doesn’t apply to the nation’s schools.

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rom factory floors to accounting firms to medical practices, labor-intensive inefficiencies have been replaced by digital intelligence or better approaches as enterprises undergo serial revolutions in search of excellence and peak performance. But if a teacher manages to raise the achievements of the 15 or 25 or 40 students in his or her class – each with different learning styles, interests, and abilities – it’s because he or she has worked harder, not smarter. This dedicated teacher stays late, cajoles parents, and ransacks literature and materials to find new ways to help focus the attention of students who are hard to reach – all of which sometimes comes at a cost of giving up a life apart from work. After a few years of that, even the most talented and dedicated teachers may burn out and even self-destruct. Now, for schools in the US and several other western countries, a range of economic, demographic and political forces are combining to demolish the old-school paradigm and re-cast the education system from the ground up: Taxpayers are tapped out. Low paying jobs, deep in debt, out of work, barely making ends meet, elderly, infirm, pensions lost, name the reason and the result is the same: Large segments of the public are either no longer willing or able to pay bills for public education. Adding insult to lost income, as taxes rise each year, students’ academic success fails to rise in tandem. n Faced with lost revenues, school districts across the country are forcing more students into a shrinking number of schools, with fewer teachers. It is becoming commonplace to pack 40 or more kids into a classroom with a single teacher who’s lucky to keep order for an hour, let alone impart knowledge to students. n The demands of employers can no longer be disregarded. Mid-level jobs that require mid-level math, computer and programming skills necessary to operate modern machinery go begging because workers don’t have them. Lower level service jobs are often filled with workers who can’t spell or do simple arithmetic in their heads. The 21st century technologically advanced job market demands that every child, not

The Trends Journal • Spring 2013

Anthony Freda / Dan Zollinger

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just a few “naturals,” be equipped with the sophisticated skills required to keep a digitized economy running. n Teachers are fed up. They complain that budgetary pressures are depriving them of money and resources they need to engage and educate their students; then

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they’re blamed when they scrambling to put a digital tabcan’t transform a roomful of “These videos can be created and uploaded let in the hands of every student, distracted students into high often without a clear notion of by individual teachers, customized for their performers. They consider how to use the tools effectively. own classes or small groups of students themselves underpaid for the But the idea of integrating within their classes … “ work they do, are hobbled by technology into the classroom local, state and federal rules, misses the larger meaning of and are generally unapprecithe digital revolution: technolated by the public. ogy won’t simply blend with conventional classroom patn Reams of studies emphasize that a good teacher is terns and structures, it will transform them. the single biggest determinant of a child’s success in For example, technology has introduced the “flipped school. But many teachers claim they cannot live up classroom,” spurred largely by the instant success of the to the promise that this research holds out because of Khan Academy (www.khanacademy.org). In traditional outdated textbooks, inadequate Internet/technology schools, the teacher is a repeater station of information, support and time constraints that prohibit them from giving lectures and PowerPoint presentations to impart devoting more than a few minutes a day of personal information or processes to students who then go home to attention to each child. wrestle alone with exercises and equations that apply the n Research has shown that students who don’t learn principles the teacher showed them. (“If Jimmy has three well from books and worksheets can still learn as efgumballs and Sally has five gumballs …”). fectively as their “book-smart” peers. In contrast, the flipped classroom capitalizes on stuGovernment standardization demands that all childents’ fascination with technology and videos. At home, dren be taught the same courses the same way. Thus, a students watch web-based videos that explain facts and child who doesn’t “get” fractions by working problems principles; then, in school, they work individually or in in a one-size-fits-all exercise book may be dismissed as small groups with their teachers – who function more as dumb. Yet that same student might easily master abcoaches and resources than as encyclopedias of facts – to stract concepts about fractions if given a set of blocks solve real-world problems that show them the relevance to to handle instead of a worksheet. their own lives of what they’re learning. This means that, to effectively educate each child, a The flipped classroom jolts students out of their trateacher needs to individualize teaching based on the ditional passive classroom role, a role in which they’re learning aptitude of each child – which, in turn, reforced to sit still, be quiet, and try to concentrate on a quires that each student receive more individual atsingle speaker and subject for an extended length of time. tention and thought from the teacher. But, with taxInstead, in the flipped classroom, students spend their payers taxed out, where will those extra resources and class time talking to each other, moving around, using teacher-hours come from? tools, bouncing ideas off each other, making judgments, teaching each other, and calling on the teacher when they Faced with these difficult realities and challenges, there get stuck. The flipped classroom allows students to disis, however, one force in play that can both revolutionize cover for themselves the personal meaning of what they’re and evolutionize the entire moribund school system. studying. Educational technology has now evolved to the point The use of video is also flipping, and otherwise shakthat it can actually enhance what teachers do, freeing ing up, college education. MOOCs – massive open on-line them to do what they can do best – teach. courses – started out as video lectures coupled with onWith traditional structures and teaching patterns line forums where students could ask questions, share crumbling, educators will integrate ever-advancing techreflections and insights, and help each other. On-line nologies to develop a more sophisticated New Millennium lectures allow more students to enroll in the class, espeteaching/learning system that caters to the individual’s cially those who live too far from a campus to commute. learning needs rather than the rigid standardized system Both students and universities have seized on MOOCs as that has, by any standard, failed so dismally. an easy way to cut college costs while making degree programs accessible to more students. Beyond “Technology Integration” The Now, entrepreneurs such as Coursera are planning to concept of “technology integration” is already being emturn MOOCs into education empires. The private combraced in the educational system. After decades of laborpany, launched by two Stanford academics, has collected ing to bring computers into schools, educators now are more than 300 courses from 60-plus universities and 36

The Trends Journal • Spring 2013


makes them available on-line. So far, according to Coursera, more than three million students have signed up for courses ranging from “Probablistic Graphical Models” to “The Future of Humanity.” Most classes carry small or no fees and students earn a “certificate of accomplishment” if they finish a course. Other players include edX, a nonprofit partnership of Harvard University and the Massachusetts Institute of Technology, and Udacity, founded by a trio of individuals led by Sebastian Thrun, a computer guru who developed Google’s self-driving car. While it’s not currently possible to assemble a degreeearning program out of MOOCs alone, more and more accredited institutions will begin to grant credit for specific MOOCs that students complete. Teachers at any level can use these videos to engage individual students by matching them to students’ interests. Educators also can use the videos in conventional class groups, pausing to explain fuzzy concepts or ignite discussions around complex issues. These videos can be created and uploaded by individual teachers, customized for their own classes or small groups of students within their classes, and even marketed to other teachers. Alternatively, teachers can choose among a growing library of Internet videos created by master teachers and other entrepreneurs. Currently, the Khan Academy is the best-known source of these snippets (usually no longer than 15 or 20 minutes). But this promises to be one of the great growth areas of educational technology. Over time, educators will not only create a broader catalogue of these videos – with a full range of subjects for all age levels – but also more specialized videos for students with differing learning styles and abilities. Within five years it is anticipated that gaming will join simple videos in widespread classroom use. The idea of “games” can summon images of students spending their school days shooting imaginary aliens out of the sky. But corporations and the military already make extensive use of gaming to train workers and prepare them to handle complex situations. For example, physics students could be presented with a flight simulator. They’re told that they’re the cabin crew on a flight from London to Rio. Halfway over the Atlantic, they discover a slow leak in the fuel tanks. They have to calculate the speed at which they need to fly to conserve enough fuel to reach land safely. The students would have to calculate the rate of fuel loss, the effect of wind speed and direction on flight times and fuel consumption, and other factors to set the optimum speed. The computer’s screen would become the aircraft’s dashboard, with gauges showing speed, the amount of fuel, and so on. The com-

The Trends Journal • Spring 2013

puter also would be the students’ work station, recording their steps to solving the problem so they and the teacher could review the work at a later time.

Digital Teaching Platforms The flipped classroom reflects elements of what are called “learning management systems.” These are interactive software programs that function as digital tutors. The learning management software tells the student whether his or her answer to a math problem or history question is right or wrong and, based on that, decides whether to go back over the material, add supplementary material, or pose a different problem or question. At the same time, the software is compiling a record of the student’s answers that will allow the teacher to track the student’s thought processes, note his or her strengths, and spot areas in which the student needs remedial help. While students are being guided by software, a teacher can spend time helping those who need a human touch. The problem with learning management software systems is that their abilities are limited. They can tell students if answers are right or wrong, but the software isn’t smart enough to coach the student in ways to improve. It’s only one automated step forward from rote teaching and learning. The next generation will be what forward-looking educators call “digital teaching platforms.” While learning management systems put computers at the center of learning, digital teaching platforms put the teacher at the core. In this approach, students use integrated software to work individually or in teams. The students’ computers are linked to the teacher’s digital dashboard, probably on a hand-held or mobile device, which registers how students are progressing in their tasks. The dashboard might flag students as green for “progressing nicely,” yellow for “encountering some difficulty,” or red for “needing help right now.” The teacher can cruise among the students and groups, dropping a suggestion for students needing a nudge and devoting more time to those requiring focused help. Meanwhile, the software maintains records providing moment-by-moment assessments of each student’s or team’s performance. In whole-class sessions, students can use their computers or mobile devices to post questions anonymously on the room’s interactive whiteboard; this ensures that a student fearing ridicule for asking a stupid question can remain unidentified but still get an answer. Also, this instant feedback lets a teacher discover and correct misunderstandings on the spot, rather than waiting until next week’s quiz to find out that half the class didn’t understand a key concept. Digital teaching platforms allow the teacher to customize instruction and focus more individual 37


attention on each student while shire made a plan to scrap the “In whole-class sessions, students still managing a full classroom Carnegie Unit. The state called of diverse individuals. on every high school to estabcan use their computers or mobile devices Digital teaching platforms lish standards of competence to post questions anonymously on the will blossom over the next deor mastery for every course and room’s interactive whiteboard … “ cade, adding and integrating not to pass students who can’t the elements needed to support demonstrate mastery of those a teacher and students with standards – not just familiara range of abilities and interests in tackling a specific ity or moderate understanding but competence borne of subject at a specific grade level or series of grades. The genuine understanding. platforms also will integrate subjects – for example, sciBut individual teachers don’t have the time or skill to ence and literacy – so students gain abilities in both areas coach every student to mastery in every subject. So New during a single lesson. Hampshire also now gives credit toward graduation for “extended learning opportunities” – learning, for examBreaking out of “School Jail” A national ple, that occurs outside of the schoolroom when a student movement is underway to free learning from “school jail” takes a class at a local dance studio, works as a sound and let students earn credit for things they learn “any tech for a band, or pursues an independent project with time, any place, any how.” The movement was sparked a recognized expert. Credit isn’t given randomly, though. by Fred Bramante, who, as a youngster, was a mediocre These projects, experiences and programs are designed by student who was told he was “not college material.” the teacher and student in collaboration with an individBramante not only went on to graduate from college, ual, business, nonprofit organization, or any other entity but also became a high-school teacher who later founded that the school will approve. a chain of music stores that made him a fortune. But his These out-of-school-jail courses are carefully strucpassion remained education. He spent years as the chair tured to ensure that the student not only masters knowlof the New Hampshire State Board of Education, where edge and skills specified by state education standards but he asked a question that began the movement: what also can clearly demonstrate mastery. States are beginwould happen if mastery, not time, became the inflexible ning to explore ways of training, credentialing, and paying standard of education? these “community educators” to ensure that they know Old-school schooling is based on the clock, the calenhow to guide students to achieve targeted educational outdar, and something called the Carnegie Unit. By local or comes. Retired Baby Boomers, are you listening? state law, students are required to spend a certain numFor its efforts, New Hampshire won the US Department ber of days in school. A school day begins at a fixed time of Education’s Frank Newman Award for State Innova(usually while students are still half-asleep) and proceeds tion in 2012. The award also recognized New Hampshire’s in fixed chunks separated by bells or buzzers. remarkable reduction in the high-school dropout rate, The object is to ensure that students accumulate Carnachieved in part by crediting on-line and out-of-school egie Units: a certain number of hours studying a certain learning experiences for students who would otherwise subject gives a student one Carnegie Unit and a certain have walked away from structured education. Instead of number of units must be accumulated to graduate from insisting the student fit into the school, Bramante’s revohigh school. lution calls for school to accommodate itself to the stuWhile these time units are fixed, a student’s degree dent. Maryland and Oregon are among the states that have of success is not; students can compile Carnegie Units joined the movement. with straight As or acceptable Cs or even Ds. This sysAmong the key partners that Bramante has recruited temic indifference to students’ degree of success could is Tom Carroll, president of the National Commission on survive in a world where an assembly line could always Teaching and America’s Future. Carroll’s group has estabuse another person to turn a wrench. But those days are lished “learning studios” in high schools to test and refine gone – and, Bramante argues, so is the usefulness of Bramante’s concept. schooling based on time. The studios divide the school day roughly into thirds. In one third, students study in groups with teachers, much DOWN WITH THE CARNEGIE UNIT! as they do now. This venue still works best for subjects Bramante spent years making his case, winning allies such as history, which lend themselves to give-and-take in state government, business, and education circles and discussions around facts and events. brought his plan to fruition in 2005. That year, New HampAnother third of the day is given to intensive, comput-

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The Trends Journal • Spring 2013


er-based, individual instruction for each student. Effective software that teaches everything from algebra to Japanese can pace itself to a student, respond to a student’s mistakes or weaknesses, and gather data about students’ performance that teachers can use to grade work and decide how best to lead the student forward. The day’s final third may be used for long-term projects involving students in teams or working off-campus on those “anywhere, any time, any how” projects. While this new model acknowledges that a student doesn’t have to be confined to a school to get an education, it also recognizes that schools themselves will not be rendered obsolete. Rather they will remain at the center of teaching and learning to ensure and to certify that both have been accomplished effectively.

What Being a Teacher Means New Millen-

nium Education, with its reliance on software and community educators, may well redefine the role of “teacher.” The old-time teacher – often little more than a repeater of information delivering the same series of lectures or lessons every year – will become obsolete. Today’s and tomorrow’s educators need to be tutors and coaches able to apply sophisticated knowledge of educational psychology and teaching techniques to work with students to create those “lightbulb moments” that learning is supposed to be about. However, a potential roadblock to this redefinition lies in today’s college programs that train teachers. Because college faculty members tend to be older, they’re less conversant with digital technology and its potential than their students are. Also, technology is evolving so fast that teacher educators have difficulty grasping its implications and incorporating it into their programs. Still, teacher educators understand that the need is crucial and are scrambling to refashion their programs, curricula, and internships. The new programs will place more emphasis not only on technology, but also on practical understanding of the psychology of learning and on assembling a spectrum of tools and techniques to use to reach students with different learning styles. Over the next five to seven years, teacher education will undergo a revolution of its own, as the old school is scrapped to prepare teachers for New Millennium Education.

The Rise of the “Edupreneur” As educa-

tion opens itself to new technologies and structures, it also creates a new role for “edupreneurs.” The greatest number of these opportunities will be for community educators – artists, corporate specialists, retired professionals or anyone willing to become credentialed so they can be paid to create and conduct credit-earning educational

The Trends Journal • Spring 2013

experiences for students outside of school. The range of these experiences is limited only by the imaginations of those who explore and define this new role. But other opportunities will open within the teaching profession itself. A new universe of research-based educational software is being created. Teachers who understand how children learn and the realities of the classroom can partner with skilled software developers to create effective programs and videos – both to teach students and also to help teachers become more effective in their work. There will be a special demand for teacher-trainers who can show an earlier generation of teachers how to capitalize on new technologies to improve learning for all students, especially those hard to reach by conventional methods. (The website PD360.com is an example – a growing library of how-to videos-on-demand for teachers by teachers, allowing each teacher to focus on areas of personal interest or need any time, any place.) Edupreneurs who know marketing better than they know education will team with teachers to aggregate and integrate the best teaching software into digital teaching platforms (or something similar). At first, this market sector will probably resemble the early days of cars or personal computers, with a range of brands jostling for market position. By 2025, most will either fade or be absorbed by others to leave a few dominant brand names. As technology evolves, so will the markets and opportunities for edupreneurs.

Trendpost Technology and the advent of not only life-long but also life-wide learning will free teachers from the prison of lecture and repetition to allow them to become learning guides and coaches who apply their special knowledge to boost the achievement of each student. The breakdown of the old school also creates new career paths for professional educators to become software developers and designers of new forms of educational experiences for students. Other entrepreneurs can aggregate and integrate the creations of these educators and market them as whole-school solutions, as digital teaching platforms, or to a wider public, as Coursera and edX do. Public education will remain in various forms of turmoil for at least a decade, as entrenched interests will fight to maintain the status quo and their positions within it. But, already, new directions and possibilities, born out of the right combination of necessity and opportunity, are showing that, by 2025, education’s new normal will be a school without walls or buzzers, a place where students and teachers function more as creative partners and where the community itself is the school. o

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The Powell Prescription for a Positive Future As evidenced by the facts, data and analyses cited in this Trends Journal, the future is lining up to be much worse than the present. If continued, the policies put in place by the people wielding political, financial and military power will produce the outcome we have been predicting. But the future is created through force of will, not simple predestination. And as we have frequently reiterated, the future is in your hands: when you create a more positive future for yourself, the world around you changes. And when a critical mass of individuals creates a more positive future for themselves, the world changes. The following letter proves that we can choose to have a positive future. Like the hundreds of others we receive, it validates our purpose in writing the Journal. We provide the trends and forecasts to help subscribers take the future into their own hands. Dear Mr. Celente: I am writing this email simply to thank you. As a younger guy of 27, it’s been very difficult over the years to find people to look up to. As you know there are not a lot of role models out there, especially for a generation such as mine that is so confused with everything happening. Your message of “things won’t change until the individual changes” struck me in a way that changed many aspects of my life and motivated me to be the change I want to see in the world. I have gotten in great shape. I’m growing much of my own food and buy organic food whenever possible. I stopped eating out unless it is quality food that I am purchasing. I stand up for myself more than ever. As a nurse, I have taken this philosophy into the workplace and I’m now a better advocate for my patients. The fear that I felt over the last few years over everything has decreased because the confidence in myself has increased dramatically. You, along with a small group of other people, have helped this change to occur. Keep doing what you are doing and know that people are listening—people like myself. What should excite you is that everyone around me has seen the changes I have made and they are making the same changes. My girlfriend, her family, my family, many of my friends – they are all learning and changing every day. I don’t know why, but I had a sudden urge to write this to you right now. Again, thank you! Keep fighting the good fight! Dan Powell, RN Vancouver, WA I sent Dan Powell’s letter to a colleague who, in response, cited a powerful passage from Balancing Heaven and Earth, an autobiography by the famous Jungian analyst, Robert Johnson. Recollecting a meeting with Dr. Jung, Johnson described a long lecture by him on why changing yourself matters and trying to change the world doesn’t: “People used to ask Dr. Jung, ‘Do you think we will make it? Will civilization survive?’ He invariably answered, ‘If enough people will be conscious.’ This is our task, not only individually but collectively – to become more conscious. We cannot wait for heaven to save us; each of us must be responsible for the birth and rebirth of the hero and savior within and realize the Golden World through our acts in the earthly world.” Dan Powell, Robert Johnson, Carl Jung, you, me, we’re all in this together; and together we can avert the future that madmen and crazy women are creating, and, instead, create a future of our choice. o

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