Article By: John Schettler

Americans know that “Head-On” is applied directly to the forehead, and that it’s available without a prescription. They know that getting auto insurance from Geico is so simple a Caveman could do it, and the Cavemen, apparently the last oppressed and downtrodden racial group in America, now have their own sitcom so we can all share the angst.  Americans are indeed well informed. They know that the Hayatt  Gold Passport just got more rewarding, and that they can choose from six dinner combinations starting at $6.99 at Ruby Tuesday. They can also get unlimited calls, digital TV, and wireless broadband internet all from AT&T for just $99.99. In fact, Americans are well aware of the fact that a 40 year old man can get $100,000 worth of coverage in life insurance for as little as $14.99, and that the call is free, the quote is free, and there is absolutely no obligation. Of course, old J.G. Wentworth wants to make sure they also know that they can get CASH today for their structured settlement or annuity, because its our money, and we should use it when we need it, by God.

It’s amazing how much Americans can learn, over and over again, just by watching a 5 minute TV commercial segment. With nearly 20 minutes of advertising in every hour of programming now, it is simply impossible for typical viewers not to know all these things, the insistent and urgent mantras broadcast at great expense by corporations hungry for our consumer dollars. That aside, when they check their email each morning, people also learn about 15 different ways they can increase their male member’s size, or to quote one message title directly: “A real man should have a real penis. Here it is.”  Apparently the mail sender, Terry H. Goldberg in this iteration of the ubiquitous spam promising male enhancement, is now threatening to ship you just what you need. (Here it is?)

So with all this information being broadcast at us 24 hours a day, it would seem that Americans should be the most well informed people on the planet. Yet ask them who their congressmen or senators are, and about 10% can tell you the answer. CNN made sure we all knew that Dog the Bounty Hunter was back in the dog house again, as the story of his indelicate racial speech topped their morning news on Nov 1. It is revealing that the top searches listed on the popular search engine Yahoo for Nov 1 were: Pierce Brosnan, Brett Favre, Nicole Kidman, The Exorcist, Daylight Savings Time, Bobby Darin, Mashed Potatoes, Alex Rodriguez and Sabrina Bryan. The 5.6 Bay Area Earthquake also made the top ten. Apparently the impending oil crisis, global warming and climate change, financial shenanigans, plummeting stocks, the Iraq war, the demise of the dollar and other inconvenient major news is of no real interest to Americans on Yahoo. And the staggering news from Mexico is glossed over in a 10 second newsbyte. Massive flooding, whole provinces under water, half a million homes destroyed, one of the largest cities on earth in danger of being 7 feet under water.

In Pakistan the man who originally seized that government in a coup is making sure that democracy does not threaten his rule further. Musharaf suspended the constitution, rounded up 3000 protesting attorneys and placed judges, including the nation’s chief justice,  under house arrest. The attorneys will be tried in “special courts” and they are being accused of “terrorism.” With the Judiciary strong armed by the army, the media has also been shut down--all classic and well tried tactics used by dictators throughout the modern era. I might note that the US also has special courts, and a president who can declare anyone he chooses an “enemy combatant of the state.” But who cares...more Americans will watch the painted nail biting competition between would-be Dallas Cowboy Cheerleaders than the fleeting coverage on Pakistan as it unravels--the world’s 8th nuclear armed state, and the current home of Bin Ladin himself.

These things don’t rate compared to any of the celebrity names that made the day’s top search list on Yahoo. And they are by no means as important as finding out when Daylight Savings Time ends…and the earthshaking significance of… mashed potatoes? David Penner of Counterpunch summed up the disconnect between reality and the things typical Americans give their energy to this way: “Listen to what people are talking about on TV, on the streets, and in restaurants, and it is clear the American people are pathologically disconnected from reality. This disconnection from reality is particularly pronounced in both the media and academia, where the most critical issues of our time are either completely ignored, or drowned in a barrage of hyperbole and euphemistic blather. It is as if, due to so many decades of brainwashing, Americans are no longer capable of reason, no longer capable of independent thought.”

Is it any wonder then that the major news outlets pepper their broadcast with chatty, smiley coverage of celebrities, nonsense stories, and entertainment?

Speaking of entertainment, in the American President  Michael Douglas, in the role of our Commander in Chief, is told by his vehement Press Secretary that Americans are hungry for leadership, and that they would crawl across a desert like thirsty men seeking water in the hopes of finding it, even drinking the sand when they find a mirage instead. “They don’t drink the sand because they are thirsty for leadership,” Douglas returned, remarking that they have elected presidents who have difficulty putting two sentences together. (Sound familiar?) “They drink the sand because they don’t know the difference.”

Do we know the difference in this country between what is really important and the trivial idiocy that is so often served up to us on our “news” stations? While Americans know who the next Idol will likely be, and all the intimate details of the Britney Spears meltdown, the typical US television viewer would be hard pressed to tell you anything about the Arctic meltdown, or why oil recently hit $97 a barrel, if they even picked up on that little headline at all. The things Americans don’t know are apparently irrelevant compared to that $6.99 offer from Ruby Tuesday or the travails of the bounty hunter, who will land a coveted invitation to the Larry King Show for his racial expletives. Americans don’t know that oil production, as measured in real barrel output, peaked in late 2005 and has been trending down ever since. They don’t know that every major oil field on earth is also past peak production and is now in decline. How’s that for a news item? Hear anything about it on CNN or FOX lately? That’s right, every major oil field currently in production is now in decline: Ghawar in Saudia Arabia is wheezing away under intense seawater infusion to keep the well pressure up, Cantarell in Mexico is losing 11% per year now in real production, Burgan in Kuwait is well past peak and trending down. The North Sea rig output is abysmal, and even Chevron reported a 26% drop in profits due to their operations there. Now UK is desperately looking elsewhere for oil, along with the burgeoning economies of China, India and, of course, the US.

The Gulf States, seeing that the jig is up where oil is concerned, are busy investing all those petro -dollars into massive amusement parks, sky scraping hotels, and trendy new real estate resorts. Have a look at what the Arabs have been building in this artist rendition of  Dubai, all currently well protected by CENTCOM, of course. It makes Las Vegas look like a dusty desert ghost town by comparison, and includes a big amusement theme park twice the size of Disneyland in Orlando.  Clearly the Arabs know they cannot drink sand when the oil revenues run dry.

What we are talking about here is the primary fuel that powers all our cars and trucks, and heats a large percentage of our homes each year. Oil is the foundation of our high tech consumer/car driven society, and everything we have built these last 50 or 60 years has flowed from a vast supply of cheap petroleum. 15 years ago it was under $12 a barrel. The $97. high the last week of October represented a 55% increase over the price just one year ago, and it will go higher still.

James Kunstler is certainly correct when he writes: “When historians glance back at 2007 through the haze of their coal-fired stoves, they will mark this year as the onset of the Long Emergency – or whatever they choose to call the unraveling of industrial economies and the complex systems that constituted them.”

And if the unraveling of our industrial economy seems a bit harsh, then you simply haven’t been paying attention to the financial news in recent months. With trillions in leveraged debt still unaccounted for, an amount double the GDP of the entire US, the stormy financial news of August and September that came to be called the “Credit Crunch” is just getting started. The bad loans all these investment vehicles rest on will not see their rate hikes peak until April of 2008. The fraud and accounting deception that has been playing a shell game with all this heavily leveraged real estate debt will eventually have to be reckoned with. Citigroup, ready to take an $11 billion dollar ‘writedown,’ has been stashing it off shore in the Cayman Islands to keep it  off the accounting books here. Pam Martens reports: “According to Standard &  Poor's Structured Finance research reports, Citigroup is managing the following Structured Investment Vehicles (SIVs), incorporated in the Cayman Islands and not consolidated on Citigroup's balance sheet: Centauri Corp., Beta Finance Corp., Sedna Finance Corp., Five Finance Corp., and Dorada Corp. (1) In addition, according to press reports, Citigroup created two more SIVs as recently as November 2006: Zela Finance Corp. and Vetra Finance Corp. (2) These SIVs contain approximately $80 Billion in what is increasingly being viewed as toxic debt.”

That’s a lot of sand, and the game was simply to pass the bucket along to the next chump, but that game is over. Now the big financial institutions are simply hiding their losses, and the CEOs are jumping these sinking ships like rats. Traders are nervous, fleeing to commodities, or gold, or playing the stock hopping game. (Gold pushed through $800 an ounce to a 27 year high on Nov 6th). But the reality of the financial situation we are facing is that so many of these securities were falsely rated AAA when they were really worth little more than a bucket of sand. And another 25 basis point Fed cut did little to change the situation. Eric Fry, reporting on Rude Awakening put it this way: “ The rate cut did not make everything all better. It did not make anything better…because it can't. A rate cut cannot convert a defaulted subprime mortgage into a valuable asset. It cannot convert a AAA-rated CDO full of toxic, overpriced garbage into an actual AAA security…and most of all, a rate cut cannot convert liars into truth-tellers.” I might add that it cannot convert sand into water either, or create an informed public that knows the difference between truth, reality, and the falsehood and deception of the world we are shown by our corporate controlled media institutions.

So it was no surprise that November opened with a bear market getting more bad news from Citigroup , J. P. Morgan, AIG, and Credit Suisse, and stocks plummeted, with the Dow was down 362 at the close of the day, and down again the following morning. It rallied, fell, rallied, then fell another 371 points on Nov 7th. The Fed injected another $41 billion into the monetary system on Nov 1st, like a doctor trying to save a dying patient by giving him a blood transfusion. Nervous traders were looking to October’s non-farm payroll reports  for signs of hope that the street economy was not being threatened by their devious investment mirage. All those jobs that  have been created, like ticket takers, product demonstrators, waiters, dishwashers, are supposed to prove the economy is “strong.” You see, they drank the sand too, by the thousands, and now bank after bank is busy drawing thick red lines through printouts of expected loan revenues, realizing it is all just one big liability, and they are desperately struggling to find ways of keeping the bad loans off their accounting books. How they get away with this amazes me. Try keeping a bad entry off your credit report, and see how the system fights you to retain the bogus information. But banks and financial institutions go merrily about multi-billion dollar “writedowns” as if it was a good business practice. GM blithely announced a staggering $37 billion dollar loss for the 3rd quarter. The system has simply institutionalized fraud and graft.

Mish Shedlock pegged the trauma hitting the banking system as he watched stocks fall: “Notice today's selloff in Bank of America (BAC), Citigroup (C), Countrywide (CFC), JP Morgan Chase (JPM), Washington Mutual (WM), Corus Bank (CORS), Bank United (BKUNA), etc. This selloff is not over a possible dividend cut at Citigroup, profit taking, diminished odds of further rate cuts or any other thing the talking heads might be saying. Solvency is the issue here, and I am not just talking about Citigroup. I am talking about solvency of the system itself. Rate cuts fueled this mess. Rate cuts cannot be the answer.” Citigroup alone, he commented, currently lists over $2.2 trillion in liabilities. A mere 5.4% drop in assets would make the bank insolvent. Charles Hugh Smith agrees in his excellent post on the issue: “If their bad bets were marked to market, Citicorp and Merrill Lynch would be declared insolvent. Why? Because they are insolvent--right now. The meaning of insolvency is straightforward: their losses exceed their capital. Recall that these firms list assets of $100 billion (or whatever) but their actual net capital is on the order of 2.5% - 5% --a mere sliver of their stated assets. In other words: a 5% loss of their stated assets wipes them out. And once those leviathans fall, what other dominoes will they strike down?”

Everything is fine as long as there is someone else that you can pass the bucket of sand to in a CDO or fradulently rated security. Now investors wonder who will be left standing with all that bad debt? Who will be left with the worthless paper so cleverly constructed by financial fraudsters? The market is starting to ask this hard question. And what will the public do when they realize, at long last, that their nest egg has fallen, like Humpty Dumpty, and they will have no retirement, no home when the foreclosure man comes calling? Foreclosures were up 30% last month, and 1 of every 196 home mortgages is now in default.

Meanwhile the dollar we all struggle to earn each day continues to plummet in value against other world currencies. It has lost a third of its value in just the last five years. Amazingly, the Canadian dollar is now stronger than the old Greenback. You need $1.06 US to buy one these days. This means that all those goods  we import each year are going to cost more and more. This will cause inflation, and it silently saps the vitality of an economy until it dies.

All this will indeed be shocking news to most Americans, because they continue to go about their business as if nothing was wrong. They falsely believe that America is the richest country on earth—while the reality is that we are the world’s greatest debtor. They feel the pressure of this unacknowledged truth on their pocketbooks, however. Their weakening dollar buys less and less each month, and they have been simply going to the plastic to rack up more credit card debt to get by. Consumer debt is now a staggering $915 billion dollars. And the banks are starting to worry that it will go the way of CDOs, leveraged securities, or other hocus pocus instruments of credit cooked up in the last ten years—into the reality of complete default.

An article in reformer.com spelled out the true scale of what we are facing this way: “We are rapidly approaching a time of reckoning. What happens when the American people discover that our nation will soon be fighting with Asia and Europe for control of a rapidly dwindling supply of petroleum? When they discover the dollar is becoming an increasingly worthless currency on the world markets? When they discover that other countries are tiring of lending America money to prop up a bankrupt government? When they discover that most of the wealth created over the past decade is based on fraud? When they discover that our current way of life is unsustainable in a world of scarcer resources caused by the double whammy of peak oil and climate change? You won't find the candidates running for president from either party talking about these things.”

And after five or six debates from the Republican or Democratic candidates what have we heard about any of the real issues threatening this country? They think Americans can't handle the truth, can’t drink real water. So they offer up sand, with debates over immigration, abortion, gay rights or the mega -threat posed by the “terrorists,” who have not harmed a single soul in this country for over 6 years. (More people have drowned in their bathtubs than the death toll from terrorism. In fact, death by drowning in your bathtub is by far the more series threat, statistically.) Instead of real leadership,  candidates scramble to find the most inoffensive and non-committal ground possible. Hilary Clinton, the current Democratic front runner, is a master of bobbing, weaving, and taking no real position that might alienate voters in any way. On the latest debate, as the trailing pack of hopefuls challenged her to speak clearly, Clinton rambled on, saying virtually nothing of substance. Finally Obama hit the nail on the head when he said: “One of the things that we have to do in this country is to be honest about the challenges that we face…She has not been honest and clear.”

Heaven forbid that we ever stop the entertainment and shopping in this country and be honest about what we face, for the crisis that is coming will bring unprecedented challenges. It means the end of the automobile as our primary means of transport. Yes, the end of that long love affair with your car that the auto makers have associated with your personal freedom. You will drive only when absolutely necessary, because the fuel will be too expensive to afford. Gasoline inventories are now using a JIT model. (“Just In Time” delivery to the pumps.) They will soon be forced to switch to a new model: JNT, or “Just Not There.”) We’ve seen it before, with gas shortages, odd-even buying days, but the shortages looming ahead will be profound by comparison. We’re presently on track to see oil production decline 4 to 7% per year. This means it will move from 81 million barrels per day to … .something considerably less by 2020, perhaps 58 million barrels. Look closely at those numbers. In that difference of 23 million barrels of production per day we will see the fall of the “American Way Of Life.” It is a difference that encompasses a vast darkness—war, famine, the demise of the social freedoms we have enjoyed.

The end of cheap, endless food, and even competition for clean running water, is also at hand. That difference of 23 million barrels of oil per day will require the complete restructuring of our society, from the way we move and work in our cities, to the way we feed ourselves, if we can. Like the Titanic, no one wants to believe that we are, indeed, on the sinking ship of fatally declining oil production, and the life boats will likely only have room for a privileged few. We’ve hit the berg, and are now just playfully kicking the ice shards about on the upper deck.  If the “powers that be” know these things, why are they not busily engaged in restoring our waterways and rail systems for the primary mass transport we will so desperately need? Instead, they pursue business as usual, salted by the wil ‘o the wisp of “Alternative Fuels” in an effort to hold onto the motorcar model of America. But all alternative energies combined can provide no more than  5% of our energy needs today. It will take time, and I mean 20 years or more, before that can rise to as much as 15%.

Another dark truth about all this is that the powers that be do know what is coming, but instead of planning and advocating the radical restructuring of our economy, they are war gaming scenarios of catastrophe. Matthew Savinar reported: “Washington insiders are game-planning for future oil market crises. Former Treasury Secretary Bob Rubin, White House Press Secretary Mike McCurry, Deputy Secretary of State Richard Armitage and CENTCOM Commander John Abizaid next week join in a simulation of deepening energy crisis. Their "Oil Shockwave" exercise, staged by two energy policy groups, involves a 2009 scenario where oil prices reach $160 a barrel with Iran in turmoil.”

The last time such a scenario was run, in 2005, the Washington Post covered it with this headline: “Outcome Grim at Oil War Game: Former Officials Fail to Prevent Recession in Mock Energy Crisis.” Things have only gotten worse as the last weeks of 2007 slide away toward the all important “holiday shopping season.” But my guess is that Americans will soon be hard pressed just to keep food on the table, with little room on the plastic to jump on Wal-Mart’s deeply discounted DVD players. The Pentagon has been running games of their own—on how the American public will react to food shortages, and what PSYOPS (propaganda and deception posing as “news”) would be useful in such an event. They are filling their buckets with sand.

Americans don’t want to think about these awkward truths, even if they do hear about them. The Pentagon won’t really have to work that hard on their PSYOPS. The news media is not about finding and exposing the truth, or informing us on vital issues so we can take appropriate action. It is about selling us things, distracting us, entertaining us,  protecting the advertiser’s status quo and precious bottom line profits. Instead of much needed truth, we are served up a bundle of false assumptions about the world that most people have come to accept without question.  The greatest of these “Big Lies” put forward endlessly by our media is that we are now engaged in something  called a “War on Terror.”  It was supposedly started by a bunch of crazy radicals with 6 hours of flight training in a piper cub. Americans now  believe, as Tim O’Shea of rense.com put it, that: “An airliner can be flown with professional precision by a group of crazed amateurs into a 100-storey building and can cause that building to collapse on its own footprint. Twice.” (Not to mention the third building that collapsed, (WTC-7), from the top down, when it wasn’t even struck at all, and while no fire ever reached the top floors where the collapse clearly begins.) And to put icing on that cake, most Americans still falsely believe that the Iraqis attacked the World Trade Center, not 19 men from our dear friend Saudi Arabia , as we were told before the dust had settled over the ruin of the World Trade Center. Soon, perhaps, they will be persuaded that it was actually Iranians who did the dastardly deed. Because they seem to be accepting, without question, that the Iranians are now the ones busily manufacturing WMDs—not Saddam as we were told before the invasion of Iraq. Oh well, I guess the media is just busy doing what it does best,  shoveling sand, and the viewers just don’t know the difference.

The saddest thing about all of this is that if we really had leadership, as opposed to the corporate serving cabal in charge now, we could revolutionize this country in a vital way. We could build cars that get well over 100mpg, the Germans rolled out a prototype that got 362 mpg earlier this year. That alone would not solve our energy problem, but it would sure help. We could build out light, high-speed rail to connect all our cities and reduce freeway madness, creating millions of jobs in the process. We could revitalize our waterways, promote river traffic, and begin planning for different ways of growing and distributing food locally as opposed to having it travel 1800 miles in a diesel truck to reach our dinner plates. But all this means the existing game of big box corporate stores and their centralized warehouse distribution models has to end. Heaven forbid we ever do something for the benefit of the American people as opposed to the benefit of American corporations. So I’m afraid that it will all just have to collapse on us before we truly get the message that we cannot live the way we do any longer. “The American Way Of Life” is negotiable, Mr. Cheney.  Get a clue.

But perhaps that is the plan after all. Why do all this building and remodeling when you can watch the house burn down and collect the insurance? Someone is getting very rich off the pain. The arms dealers, pharmaceuticals, mercenaries, shifty CEOs, have all been cashing in. Frankly, I pity the next president. Should Hilary win the election, she will preside while it all falls apart. And then the same devious men who have brought us to the edge of this crisis will be waiting with the final chapter of their plan as her disastrous first term concludes. The plan was laid long ago. It is called “Project Endgame: 2012,” and when everything really starts to fall apart, when the truth about the world finally penetrates the fog of entertainment programming in this country, the people will be so hungry for leadership, for anyone who can lead them out of the crisis, and they will drink sand. Some figure will emerge in 2012, from the neo -con right, and promise us all that salvation is at hand…but there will have to be a few changes, a few harsh measures instituted…a few laws discarded.

I hope you’ve been saving up all your hard earned cash. Maybe it will buy you a ticket to Dubai and a weekend in one of those swank hotels when it all falls apart.

Article By: John Schettler, November, 2007

  Dubai, Development in progress.

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