Goldman’s Top 100 Charts Of 2013 – Part 1

We present the first half of Goldman’s 100 best charts for 2013.  As compilation creator Hugo Scott-Gall notes, “they reflect the interweaving links between key investment themes, and the implications of these for companies, sectors and countries. They include the widening disparity in relative energy costs, the rising cost of growth in emerging markets, the increasing ubiquity of technology in most sectors, the disruptive technologies that are changing how things are made and consumed, the growing influence of governments, and also, the twin challenges of fewer jobs and longer lives.” Among the core themes is the flow of people, goods, ideas and capital around the world. “There are common threads that run through these ideas including the potency of innovation that can disrupt business models and blur sector boundaries, falling rents to labour, and the broadly disinflationary consequences of many of these themes.”

And now, without further ado, we present the shape of the global economy which is ever-changing…

 

The US is set to enjoy a rising energy price advantage…

 

…relative to Europe…

 

…and the rest of the world

 

Can energy efficiency be a part of the solution?

 

China’s evolution has broad implications for the world…

 

China’s changing needs are evident in what it has been buying around the world

 

What has this meant for global trade?

 

With demand for foreign investment in China falling, capital needs to find new homes

 

Consumer behaviour is changing too… both the young and the old

 

Learned differences?

 

The job market takes time to adapt

 

The globalisation of labor

 

East to West

 

More in part two….


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-BTmwsc79ek/story01.htm Tyler Durden

Guest Post: How the Paper Money Experiment Will End

Submitted by Philipp Bagus via the Ludwig von Mises Institute,

A paper currency system contains the seeds of its own destruction. The temptation for the monopolist money producer to increase the money supply is almost irresistible. In such a system with a constantly increasing money supply and, as a consequence, constantly increasing prices, it does not make much sense to save in cash to purchase assets later. A better strategy, given this scenario, is to go into debt to purchase assets and pay back the debts later with a devalued currency. Moreover, it makes sense to purchase assets that can later be pledged as collateral to obtain further bank loans. A paper money system leads to excessive debt.

This is especially true of players that can expect that they will be bailed out with newly produced money such as big businesses, banks, and the government.

We are now in a situation that looks like a dead end for the paper money system. After the last cycle, governments have bailed out malinvestments in the private sector and boosted their public welfare spending. Deficits and debts skyrocketed. Central banks printed money to buy public debts (or accept them as collateral in loans to the banking system) in unprecedented amounts. Interest rates were cut close to zero. Deficits remain large. No substantial real growth is in sight. At the same time banking systems and other financial players sit on large piles of public debt. A public default would immediately trigger the bankruptcy of the banking sector. Raising interest rates to more realistic levels or selling the assets purchased by the central bank would put into jeopardy the solvency of the banking sector, highly indebted companies, and the government. It looks like even the slowing down of money printing (now called “QE tapering”) could trigger a bankruptcy spiral. A drastic reduction of government spending and deficits does not seem very likely either, given the incentives for politicians in democracies.

So will money printing be a constant with interest rates close to zero until people lose their confidence in the paper currencies? Can the paper money system be maintained or will we necessarily get a hyperinflation sooner or later?

There are at least seven possibilities:

1. Inflate. Governments and central banks can simply proceed on the path of inflation and print all the money necessary to bail out the banking system, governments, and other over-indebted agents. This will further increase moral hazard. This option ultimately leads into hyperinflation, thereby eradicating debts. Debtors profit, savers lose. The paper wealth that people have saved over their life time will not be able to assure such a high standard of living as envisioned.

2. Default on Entitlements. Governments can improve their financial positions by simply not fulfilling their promises. Governments may, for instance, drastically cut public pensions, social security and unemployment benefits to eliminate deficits and pay down accumulated debts. Many entitlements, that people have planned upon, will prove to be worthless.

3. Repudiate Debt. Governments can also default outright on their debts. This leads to losses for banks and insurance companies that have invested the savings of their clients in government bonds. The people see the value of their mutual funds, investment funds, and insurance plummet thereby revealing the already-occurred losses. The default of the government could lead to the collapse of the banking system. The bankruptcy spiral of overindebted agents would be an economic Armageddon. Therefore, politicians until now have done everything to prevent this option from happening.

4. Financial Repression. Another way to get out of the debt trap is financial repression. Financial repression is a way of channeling more funds to the government thereby facilitating public debt liquidation. Financial repression may consist of legislation making investment alternatives less attractive or more directly in regulation inducing investors to buy government bonds. Together with real growth and spending cuts, financial repression may work to actually reduce government debt loads.

5. Pay Off Debt. The problem of overindebtedness can also be solved through fiscal measures. The idea is to eliminate debts of governments and recapitalize banks through taxation. By reducing overindebtedness, the need for the central bank to keep interest low and to continue printing money is alleviated. The currency could be put on a sounder base again. To achieve this purpose, the government expropriates wealth on a massive scale to pay back government debts. The government simply increases existing tax rates or may employ one-time confiscatory expropriations of wealth. It uses these receipts to pay down its debts and recapitalize banks. Indeed the IMF has recently proposed a one-time 10-percent wealth tax in Europe in order to reduce the high levels of public debts. Large scale cuts in spending could also be employed to pay off debts. After WWII, the US managed to reduce its debt-to-GDP ratio from 130 percent in 1946 to 80 percent in 1952. However, it seems unlikely that such a debt reduction through spending cuts could work again. This time the US does not stand at the end of a successful war. Government spending was cut in half from $118 billion in 1945 to $58 billion in 1947, mostly through cuts in military spending. Similar spending cuts today do not seem likely without leading to massive political resistance and bankruptcies of overindebted agents depending on government spending.

6. Currency Reform. There is the option of a full-fledged currency reform including a (partial) default on government debt. This option is also very attractive if one wants to eliminate overindebtedness without engaging in a strong price inflation. It is like pressing the reset button and continuing with a paper money regime. Such a reform worked in Germany after the WWII (after the last war financial repression was not an option) when the old paper money, the Reichsmark, was substituted by a new paper money, the Deutsche Mark. In this case, savers who hold large amounts of the old currency are heavily expropriated, but debt loads for many people will decline.

7. Bail-in. There could be a bail-in amounting to a half-way currency reform. In a bail-in, such as occurred in Cyprus, bank creditors (savers) are converted into bank shareholders. Bank debts decrease and equity increases. The money supply is reduced. A bail-in recapitalizes the banking system, and eliminates bad debts at the same time. Equity may increase so much, that a partial default on government bonds would not threaten the stability of the banking system. Savers will suffer losses. For instance, people that invested in life insurances that in turn bought bank liabilities or government bonds will assume losses. As a result the overindebtedness of banks and governments is reduced.

Any of the seven options, or combinations of two or more options, may lie ahead. In any case they will reveal the losses incurred in and end the wealth illusion. Basically, taxpayers, savers, or currency users are exploited to reduce debts and put the currency on a more stable basis. A one-time wealth tax, a currency reform or a bail-in are not very popular policy options as they make losses brutally apparent at once. The first option of inflat
ion is much more popular with governments as it hides the costs of the bail out of overindebted agents. However, there is the danger that the inflation at some point gets out of control. And the monopolist money producer does not want to spoil his privilege by a monetary meltdown. Before it gets to the point of a runaway inflation, governments will increasingly ponder the other options as these alternatives could enable a reset of the system.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/dae3HpRhYnc/story01.htm Tyler Durden

Iran Quits Nuclear Talks After US Expands Blacklist Sanctions

“We are evaluating the situation and will make the appropriate response,” is how Iran’s lead negotiator Abbas Araqchi reacted after accusing Washington on Friday of going against the spirit of a landmark agreement reached last month by expanding its sanctions blacklist. As AFP reports, Iranian negotiators quit the implementation talks late on their fourth day Thursday after Washington blacklisted a dozen companies and individuals for evading US sanctions. US Secretary of State Kerry, ever the optimist we presume, said “we’re making progress, but I think we’re at a point in those talks where folks feel a need to consult, take a moment,” but Araqchi’s comments on State TV give them little room for compromise, America’s move “is by no means constructive and we are seriously critical of it.

 

Via AFP,

Iran has quit nuclear talks with world powers, accusing Washington on Friday of going against the spirit of a landmark agreement reached last month by expanding its sanctions blacklist.

 

 

Iran’s chief nuclear negotiator Abbas Araqchi said the US move went against the spirit of the deal struck in Geneva under which the powers undertook to impose no further sanctions for six months.

 

Tehran was now weighing the “appropriate response”, he said.

 

“America’s move is against the spirit of the Geneva deal,” Araqchi told the Fars news agency as his team headed back to Tehran from Vienna.

 

“We are evaluating the situation and will make the appropriate response.

 

“Such a measure is by no means constructive and we are seriously critical of it,” Araqchi later said on state television.

 

 

“The negotiations were halted by Iranian delegation because of new American sanctions. The Iranian negotiating team has halted the talks at this stage and are headed back to the capital due to America’s lack of commitment to the agreement,” Mehr reported.

 

Kerry said it was now time for consultations.

 

 

The blacklisting of a dozen additional foreign firms and individuals for evading US sanctions was widely seen as a way to head off moves in Congress to impose additional sanctions that would be in clear breach of the Geneva agreement.

 

Administration officials insisted the timing was entirely coincidental.

 

But just hours afterwards, Senate banking committee chairman Tim Johnson and the committee’s top Republican Michael Crapo agreed with the White House that Washington should not introduce new sanctions, warning they could “rupture” international unity against Tehran’s nuclear programme.

 

The comments virtually assured that no new sanctions legislation would pass Congress before the year-end break, although lawmakers could controversially introduce a new sanctions bill within the next week.

 

Those blacklisted on Thursday included the Singapore-based Mid Oil Asia and Singa Tankers, both companies accused of helping Iran transfer badly needed funds to a foreign bank on behalf of the National Iranian Tanker Company.

 

Well that didn’t last long did it?


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/z_KX5onFZn8/story01.htm Tyler Durden

Is The Consumer Slowing Down?

Submitted by Lance Roberts Of STA Wealth Management,

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/aIlvP2XfsgQ/story01.htm Tyler Durden

China's Colonization Of London Hits Ludicrous Speed, And Now: It's Detroit's Turn

Earlier today, Brits were greeted with some good news: London house prices rose to a record in November, “as strengthening demand pushed values higher in all regions of England and Wales” according to Acadametrics. Bloomberg reported that values increased 0.6 percent from October to an average 238,839 pounds ($390,900), and that prices reached an all-time high in London, soaring 9.2% in the quarter, and parts of the southeast as average values climbed 4.9 percent from a year ago. “The trajectory is clearly upward,” said David Brown, commercial director of LSL Property Services. “Competition is strong as a result of rising demand and supply of new instructions not growing, a factor that will continue to prop up prices in the long term.” As usual, much was left unsaid, such as where demand is coming from. The answer, as is the case virtually everywhere else in the world, is simple: China.

According to another Bloomberg report citing Jones Lang LaSalle, Chinese investment in London between 2010 and Q3 of this year has risen by a “ludicrous speed” comparable 1,500%, or from a frugal GBP54 million to over GBP 1 billion! And boy do the Chinese love London – according to the same report, over 50% of European property investment by Chinese buyers is now in London.  As a result, China is now the third-largest overseas purchaser in U.K. behind Germany and U.S., which invested GBP 1.2 billion and GBP 1.1 billion respectively. “We expect the pool of investors from China targeting London to grow significantly in the coming years. They will consider everything from urban regeneration sites through to trophy assets,” Damian Corbett, JLL’s head of Central London office investment, said in statement.

In other words, as London real estate becomes ever more unaffordable to orinary UK citizens, who instead are forced to rent out shipping containers, Chinese buyers will buy pretty much anything in the UK, with no regard for cost, since ever more of that ~$200 billion in monthly credit created by the government, which as we showed before blows both the Fed and BOJ money creation out of the water, is parked outside of China, which is aggressively trying to stop its own domestic housing bubble, and in the process blowing housing bubbles everywhere else around the world.

Which brings us to point number two: the latest target of the Chinese hot money colonization is none other than bankrupt Detroit.

Forbes explains:

Detroit, broke with almost no prospects for recovery, is the fourth most popular U.S. destination for Chinese real estate investors.  In fact, it was bad news—the city’s July 18 bankruptcy filing—that triggered renewed interest.  “While the bankruptcy is viewed as a bad thing elsewhere, it raised the exposure level of Detroit’s real estate market in China,” says Evonne Xu, a Michigan attorney catering to Chinese purchasers.  Middle Kingdom, meet Motown.

 

Chinese shoppers can’t resist a bargain.  Where else can you buy a two-story home in the U.S. for $39?  China Central Television, the state broadcaster, in March reported that two houses in Detroit cost the same as a pair of leather shoes.  No wonder a poster on Sina Weibo, the Twitter-like service, asked, “Seven-hundred thousand people, quiet, clean air, no pollution, democracy—what are you waiting for?”

 

Who says the Chinese are waiting?  Dongdu International Group of Shanghai bought, sight unseen, two downtown icons, the David Stott building for $4.2 million and the Detroit Free Press building for $9.4 million, both at auction this September.

 

Moreover, Chinese purchasers are making bulk purchases of “inexpensive properties”—those selling for $25,000 or less—in the rings surrounding the city center.  “They’re banking on the downtown resurgence spiraling out into those rings,” explains Kelly Sweeney of Coldwell Banker Weir Manuel.  Mainland parties often buy at tax and foreclosure sales, hold their property, and patiently wait for appreciation.

 

 

The Chinese are coming, but what are they doing?  Dongdu International will make a big contribution to downtown by redeveloping the Detroit Free Press building, turning it into a retail and residential complex, but that ambitious plan appears to be the exception.  China’s rich are investing in the Motor City like they invest in their own country, where they buy multiple units at a time.  In China, like here, they often keep their acquisitions vacant, treating new properties like stores of value.

As we have been repeating for the past three years, all China’s intrepid real estate investors are doing, is parking China’s record hot money – one of the three pillars of the so-called US housing recovery – abroad. In this case, in a broke city.

The Chinese buy-and-hold tactics in Detroit suggest patience, but that’s not the whole story.  The bigger story is that the parking of wealth offshore indicates capital flight.  The Chinese have only 13% of their wealth outside China, according to Oliver Williams of WealthInsight, while the global average is 20% to 30%, so some of transfers of wealth abroad are normal for a developing society.

There may be more, however, and as China prepares to liberalize its financial and social policies, the wealthiest part of the population may be considering outright getting the hell out of dodge, and taking trillions with it.

But it’s not just money that is fleeing.  A study conducted by Bank of China and Hurun found that more than half of China’s millionaires have taken steps to emigrate or are considering doing so.  This statistic tells us the transfers of cash out of China are not just normal diversification.

 

There is substantial disagreement as to how much Chinese individuals have already stashed offshore.  Boston Consulting Group estimates they
hold $450 billion in assets outside their country, and WealthInsight believes the number to be $658 billion. 

 

Yet everyone agrees that the figure, whatever it is, will go up fast.  Boston Consulting, for instance, predicts offshore assets will double in three years.  CNBC late last month called the movement of Chinese capital “one of the largest and most rapid wealth migrations of our time: hundreds of billions of dollars, and waves of millionaires flowing out of China to overseas destinations.” 

Forbes’ conclusion is accurate: Detroit is not an investment destination as much as it is a safe(r) place to park cash which may or may not have been procured by legal means, but which thanks to the epic cash creation tsunami emanating from the Middle Kingdom will be sure to continue for the foreseeable future: “So the Chinese buying up Detroit says less about the prospects of Motown than what they think of their own country.  It’s not like the Motor City is a good place to invest.  It has what is surely the worst housing market in the U.S.  “I’ve been in the Detroit area for 35 years,” says Chen, the broker from Troy.  “Thirty-five years ago downtown Detroit was like this, and it’s not getting better.” But that doesn’t matter – there is money to be parked outside of China, and any place will do. After all, in a globalized monetary system, money is instantly fungible to any corner of the globe, especially when facilitated by such “dumbest banks of 2013” who defy all money-laundering regulations, as RBS.

The conclusion:

As grim as the future is for Motown, it is evidently better than China’s, at least according to many Chinese.  They are pouring their cash into Detroit.  

So yes: the colonization of the world’s premier, and not so premier, metropolitan centers by China will continue, until the liquidity spigot is finally turned off. In the meantime recall that this is nothing new: after all Japan experienced an identical liquidity-driven colonization of the developed world in the 1980s, when it seemed Japan would buy up Manhattan. That didn’t work out too well for them. With China, this time won’t be any different either.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/jLDblZTCvlo/story01.htm Tyler Durden

China’s Colonization Of London Hits Ludicrous Speed, And Now: It’s Detroit’s Turn

Earlier today, Brits were greeted with some good news: London house prices rose to a record in November, “as strengthening demand pushed values higher in all regions of England and Wales” according to Acadametrics. Bloomberg reported that values increased 0.6 percent from October to an average 238,839 pounds ($390,900), and that prices reached an all-time high in London, soaring 9.2% in the quarter, and parts of the southeast as average values climbed 4.9 percent from a year ago. “The trajectory is clearly upward,” said David Brown, commercial director of LSL Property Services. “Competition is strong as a result of rising demand and supply of new instructions not growing, a factor that will continue to prop up prices in the long term.” As usual, much was left unsaid, such as where demand is coming from. The answer, as is the case virtually everywhere else in the world, is simple: China.

According to another Bloomberg report citing Jones Lang LaSalle, Chinese investment in London between 2010 and Q3 of this year has risen by a “ludicrous speed” comparable 1,500%, or from a frugal GBP54 million to over GBP 1 billion! And boy do the Chinese love London – according to the same report, over 50% of European property investment by Chinese buyers is now in London.  As a result, China is now the third-largest overseas purchaser in U.K. behind Germany and U.S., which invested GBP 1.2 billion and GBP 1.1 billion respectively. “We expect the pool of investors from China targeting London to grow significantly in the coming years. They will consider everything from urban regeneration sites through to trophy assets,” Damian Corbett, JLL’s head of Central London office investment, said in statement.

In other words, as London real estate becomes ever more unaffordable to orinary UK citizens, who instead are forced to rent out shipping containers, Chinese buyers will buy pretty much anything in the UK, with no regard for cost, since ever more of that ~$200 billion in monthly credit created by the government, which as we showed before blows both the Fed and BOJ money creation out of the water, is parked outside of China, which is aggressively trying to stop its own domestic housing bubble, and in the process blowing housing bubbles everywhere else around the world.

Which brings us to point number two: the latest target of the Chinese hot money colonization is none other than bankrupt Detroit.

Forbes explains:

Detroit, broke with almost no prospects for recovery, is the fourth most popular U.S. destination for Chinese real estate investors.  In fact, it was bad news—the city’s July 18 bankruptcy filing—that triggered renewed interest.  “While the bankruptcy is viewed as a bad thing elsewhere, it raised the exposure level of Detroit’s real estate market in China,” says Evonne Xu, a Michigan attorney catering to Chinese purchasers.  Middle Kingdom, meet Motown.

 

Chinese shoppers can’t resist a bargain.  Where else can you buy a two-story home in the U.S. for $39?  China Central Television, the state broadcaster, in March reported that two houses in Detroit cost the same as a pair of leather shoes.  No wonder a poster on Sina Weibo, the Twitter-like service, asked, “Seven-hundred thousand people, quiet, clean air, no pollution, democracy—what are you waiting for?”

 

Who says the Chinese are waiting?  Dongdu International Group of Shanghai bought, sight unseen, two downtown icons, the David Stott building for $4.2 million and the Detroit Free Press building for $9.4 million, both at auction this September.

 

Moreover, Chinese purchasers are making bulk purchases of “inexpensive properties”—those selling for $25,000 or less—in the rings surrounding the city center.  “They’re banking on the downtown resurgence spiraling out into those rings,” explains Kelly Sweeney of Coldwell Banker Weir Manuel.  Mainland parties often buy at tax and foreclosure sales, hold their property, and patiently wait for appreciation.

 

 

The Chinese are coming, but what are they doing?  Dongdu International will make a big contribution to downtown by redeveloping the Detroit Free Press building, turning it into a retail and residential complex, but that ambitious plan appears to be the exception.  China’s rich are investing in the Motor City like they invest in their own country, where they buy multiple units at a time.  In China, like here, they often keep their acquisitions vacant, treating new properties like stores of value.

As we have been repeating for the past three years, all China’s intrepid real estate investors are doing, is parking China’s record hot money – one of the three pillars of the so-called US housing recovery – abroad. In this case, in a broke city.

The Chinese buy-and-hold tactics in Detroit suggest patience, but that’s not the whole story.  The bigger story is that the parking of wealth offshore indicates capital flight.  The Chinese have only 13% of their wealth outside China, according to Oliver Williams of WealthInsight, while the global average is 20% to 30%, so some of transfers of wealth abroad are normal for a developing society.

There may be more, however, and as China prepares to liberalize its financial and social policies, the wealthiest part of the population may be considering outright getting the hell out of dodge, and taking trillions with it.

But it’s not just money that is fleeing.  A study conducted by Bank of China and Hurun found that more than half of China’s millionaires have taken steps to emigrate or are considering doing so.  This statistic tells us the transfers of cash out of China are not just normal diversification.

 

There is substantial disagreement as to how much Chinese individuals have already stashed offshore.  Boston Consulting Group estimates they hold $450 billion in assets outside their country, and WealthInsight believes the number to be $658 billion. 

 

Yet everyone agrees that the figure, whatever it is, will go up fast.  Boston Consulting, for instance, predicts offshore assets will double in three years.  CNBC late last month called the movement of Chinese capital “one of the largest and most rapid wealth migrations of our time: hundreds of billions of dollars, and waves of millionaires flowing out of China to overseas destinations.” 

Forbes’ conclusion is accurate: Detroit is not an investment destination as much as it is a safe(r) place to park cash which may or may not have been procured by legal means, but which thanks to the epic cash creation tsunami emanating from the Middle Kingdom will be sure to continue for the foreseeable future: “So the Chinese buying up Detroit says less about the prospects of Motown than what they think of their own country.  It’s not like the Motor City is a good place to invest.  It has what is surely the worst housing market in the U.S.  “I’ve been in the Detroit area for 35 years,” says Chen, the broker from Troy.  “Thirty-five years ago downtown Detroit was like this, and it’s not getting better.” But that doesn’t matter – there is money to be parked outside of China, and any place will do. After all, in a globalized monetary system, money is instantly fungible to any corner of the globe, especially when facilitated by such “dumbest banks of 2013” who defy all money-laundering regulations, as RBS.

The conclusion:

As grim as the future is for Motown, it is evidently better than China’s, at least according to many Chinese.  They are pouring their cash into Detroit.  

So yes: the colonization of the world’s premier, and not so premier, metropolitan centers by China will continue, until the liquidity spigot is finally turned off. In the meantime recall that this is nothing new: after all Japan experienced an identical liquidity-driven colonization of the developed world in the 1980s, when it seemed Japan would buy up Manhattan. That didn’t work out too well for them. With China, this time won’t be any different either.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/jLDblZTCvlo/story01.htm Tyler Durden

European Stocks Slump To 2-Month Lows (Biggest 2-Week Drop In 6 Months)

Quietly, while no one was watching, European stocks have been pummeled lower in the last 2 weeks. Since the start of December, Spanish and Italian stock markets are down 6% and the broad-based Bloomberg 500 Index is down 4.75% – its biggest such drop in 6 months – to 2-month lows. With the EUR testing multi-year highs against the USD, and the earnings picture fading dismalling into the dark, it seems all those “believers” in a European recovery (on the basis of some “soft” surveys) have been proved wrong (or early?).

 

European stocks are at 2-month lows…

 

As Earnings hope collapses….

 

Led by Spain and Italy…

 

as stocks catch down to macro reality?

 

Intrestingly, European stocks caught up to the region’s improve dmarket-based credit risk perception… but has disconnected lower in recent weeks (as bonds remains under the control of the ECB…)

 

 

Charts: @Not_Jim_Cramer and Bloomberg


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/z5ge7IXgNjc/story01.htm Tyler Durden

The NSA’s “Lone Wolf” Justification for Mass Spying Is B.S.

Bonus:

General Electric Knew Its Reactor Design Was Unsafe … So Why Isn’t GE Getting Any Heat for Fukushima?

The NSA’s main justification for Constitution-shredding mass surveillance on all Americans is 9/11.

In reality:

  • American presidents agree
  • The chairs of the 9/11 Commission say that the spying has gone way too far (and that the Director of National Intelligence should be prosecuted for lying about the spying program)
  • Top officials say that the claim that the government could only have stopped the attacks if it had been able to spy on Americans is wholly false

But we want to focus on another angle:  the unspoken assumption by the NSA that we need mass surveillance because “lone wolf” terrorists don’t leave as many red flags as governments, so the NSA has to spy on everyone to find the needle in the haystack.

But this is nonsense. The 9/11 hijackers were not lone wolves.

The former Chair of the Senate Intelligence Committee, outside adviser to the CIA, and Co-Chair of the congressional investigation into 9/11 – Bob Graham – says:

I have personally talked to the other cochair of the Congressional Joint Inquiry, a man who was a very distinguished congressman and, later, director of the CIA [Porter Goss], I have talked to the two chairs of the … 9/11 Commission, asking them, what do you think were the prospects of these 19 people being able to plan, practice, and execute the complicated plot that was 9/11 without any external support?

 

All three of them used almost the same word: “Implausible”. That it is implausible that that could have been the case.

 

Yet that has now become the conventional wisdom to the aggressive exclusion of other alternatives.

 

Indeed, it is pretty clear that 9/11 was state-sponsored terror … although people argue about which state or states were responsible (we personally believe that at least two allied governments were involved. Zero Hedge readers:  Which governments do YOU think were involved?).

Indeed, Graham – unlike with 9/11 Commissioner and former Senator Bob Kerrey – said in sworn declarations that the Saudi is linked to the 9/11 attacks.  They’re calling for either a “permanent 9/11 commission” or a new 9/11 investigation to get to the bottom of it.

An FBI report implicates the Saudi government.

And many other top U.S. counter-terrorism officials say that the government’s explanation of the 9/11 hijackers being “lone wolves” connected only to Al Qaeda is ridiculous. See this and this.

If this sounds implausible,  remember that Saudi Prince Bandar – head of Saudi intelligence – helped to arm the Mujahadeen in Afghanistan, and is now arming Al Qaeda in Syria. (Background).   Respected financial writer Ambrose Evans-Pritchard says that Prince Bandar admitted that Saudi Arabia carries out false flag terror.

Indeed, the Joint Congressional Inquiry into 9/11 found that the Saudi government supported the 9/11 attacks,  but the Bush administration classified the 28 pages of the report which discussed the Saudis.

Bipartisan Bill to Publicly Release Report on Saudi Involvement In 9/11

A bipartisan bill – introduced by  congressmen Walter B. Jones (Republican from North Carolina) and Stephen Lynch (Democrat from Massachusetts)  would declassify the 28 pages of the Joint
Inquiry which implicate the Saudi government.

Some assume that passage of the bill is assured …

But both the Bush and Obama administrations have fought to keep Saudi involvement under wraps for more than 10 years.

Remember, the U.S. government allowed members of Bin Laden’s family – and other suspicious Saudis – hop on airplanes and leave the country right after 9/11 without even interviewing them, even though air traffic was grounded for everyone else.

Additionally, a Saudi FBI informant hosted and rented a room to Mihdhar and another 9/11 hijacker in 2000.

Investigators for the Congressional Joint Inquiry discovered that an FBI informant had hosted and even rented a room to two hijackers in 2000 and that, when the Inquiry sought to interview the informant, the FBI refused outright, and then hid him in an unknown location, and that a high-level FBI official stated these blocking maneuvers were undertaken under orders from the White House.

As the New York Times notes:

Senator Bob Graham, the Florida Democrat who is a former chairman of the Senate Intelligence Committee, accused the White House on Tuesday of covering up evidence ….The accusation stems from the Federal Bureau of Investigation’s refusal to allow investigators for a Congressional inquiry and the independent Sept. 11 commission to interview an informant, Abdussattar Shaikh, who had been the landlord in San Diego of two Sept. 11 hijackers.

 

In his book “Intelligence Matters,” Mr. Graham, the co-chairman of the Congressional inquiry with Representative Porter J. Goss, Republican of Florida, said an F.B.I. official wrote them in November 2002 and said “the administration would not sanction a staff interview with the source.” On Tuesday, Mr. Graham called the letter “a smoking gun” and said, “The reason for this cover-up goes right to the White House.”

The government obstructed the 9/11 Commission in every way possible.  During both the Joint Congressional Inquiry into 9/11 and the 9/11 Commission investigation, government “minders” intimidated witnesses and obstructed the investigation.

Obama has been no better.  Obama’s Department of Justice filed an amicus brief in the U.S. Supreme Court arguing that the lawsuit brought by the families of victims killed in the 9/11 attacks against Saudi Arabia should be thrown out of court (it was).

And Graham said that he’s lobbied Obama for years to release the 28 pages and to reopen the investigation, but Obama has refused.  The former Chair of the Senate Intelligence Committee and 9/11 investigator has even resorted to filing Freedom of Information requests to obtain information, but the Obama administration is still stonewalling:

Graham said that like the 28 pages in the 9/11 inquiry, the Sarasota case is being “covered up” by U.S. intelligence. Graham has been fighting to get the FBI to release the details of this investigation with Freedom of Information Act (FOIA) requests and litigation. But so far the bureau has stalled and stonewalled, he said.

Still Urgent Today

Ancient history, you say?

Graham notes:

Although it’s been more than a decade ago when this horrific event occurred, I think [the questions of who supported the attacks] have real consequences to U.S. actions today.

For example, the U.S. might not want to support – let alone launch joint military adventure alongside – a regime which supported the 9/11 hijackers.

As Graham told told PBS last year:

[Question]: Senator Graham, are there elements in this report, which are classified that Americans should know about but can’t?

 

SEN. BOB GRAHAM: Yes … I was surprised at the evidence that there were foreign governments involved in facilitating the activities of at least some of the terrorists in the United States.

 

I am stunned that we have not done a better job of pursuing that to determine if other terrorists received similar support and, even more important, if the infrastructure of a foreign government assisting terrorists still exists for the current generation of terrorists who are here planning the next plots.

 

To me that is an extremely significant issue and most of that information is classified, I think overly-classified. I believe the American people should know the extent of the challenge that we face in terms of foreign government involvement. That would motivate the government to take action.

 

[Question]: Are you suggesting that you are convinced that there was a state sponsor behind 9/11?

 

SEN. BOB GRAHAM: I think there is very compelling evidence that at least some of the terrorists were assisted not just in financing — although that was part of it — by a sovereign foreign government and that we have been derelict in our duty to track that down, make the further case, or find the evidence that would indicate that that is not true and we can look for other reasons why the terrorists were able to function so effectively in the United States.

 

[Question]: Do you think that will ever become public, which countries you’re talking about?

 

SEN. BOB GRAHAM: It will become public at some point when it’s turned over to the archives, but that’s 20 or 30 years from now. And, we need to have this information now because it’s relevant to the threat that the people of the United States are facing today.

And – most importantly – if the entire mass spying program is based on the “lone wolf” theory of 9/11, it is unnecessary and counterproductive.

Postscript:  Ironically, the U.S. government has in the past alleged state sponsorship of 9/11 when it suited its purposes.  Specifically, people may not remember now, but – at the time – the supposed Iraqi state sponsorship of 9/11 was at least as important a justification for the Iraq war as the alleged weapons of mass destruction.  This claim that Iraq is linked to 9/11 has since been debunked by the 9/11 Commission, top government officials, and even – long after they alleged such a link – Bush and Cheney themselves.  But 70% of the American public believed it at the time, and 85% of U.S. troops believed the U.S. mission in Iraq was “to retaliate for Saddam’s role in the 9-11 attacks.”


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/XObfDHUNqPQ/story01.htm George Washington