Turkish Forum

Category: Business

  • Fethullah Gulen: Turkey’s Eroding Democracy

    Fethullah Gulen: Turkey’s Eroding Democracy

    04gulen articleLarge

     

    SAYLORSBURG, Pa. — It is deeply disappointing to see what has become of Turkey in the last few years. Not long ago, it was the envy of Muslim-majority countries: a viable candidate for the European Union on its path to becoming a functioning democracy that upholds universal human rights, gender equality, the rule of law and the rights of Kurdish and non-Muslim citizens. This historic opportunity now appears to have been squandered as Turkey’s ruling party, known as the A.K.P., reverses that progress and clamps down on civil society, media, the judiciary and free enterprise.

    Turkey’s current leaders seem to claim an absolute mandate by virtue of winning elections. But victory doesn’t grant them permission to ignore the Constitution or suppress dissent, especially when election victories are built on crony capitalism and media subservience. The A.K.P.’s leaders now depict every democratic criticism of them as an attack on the state. By viewing every critical voice as an enemy — or worse, a traitor — they are leading the country toward totalitarianism.

    The latest victims of the clampdown are the staff, executives and editors of independent media organizations who were detained and are now facing charges made possible by recent changes to the laws and the court system. The director of one of the most popular TV channels, arrested in December, is still behind bars. Public officials investigating corruption charges have also been purged and jailed for simply doing their jobs. An independent judiciary, a functioning civil society and media are checks and balances against government transgressions. Such harassment sends the message that whoever stands in the way of the ruling party’s agenda will be targeted by slander, sanctions and even trumped-up charges.

    Turkey’s rulers have not only alienated the West, they are also now losing credibility in the Middle East. Turkey’s ability to assert positive influence in the region depends not only on its economy but also on the health of its own democracy.

    The core tenets of a functioning democracy — the rule of law, respect for individual freedoms — are also the most basic of Islamic values bestowed upon us by God. No political or religious leader has the authority to take them away. It is disheartening to see religious scholars provide theological justification for the ruling party’s oppression and corruption or simply stay silent. Those who use the language and symbols of religious observance but violate the core principles of their religion do not deserve such loyalty from religious scholars.

    Speaking against oppression is a democratic right, a civic duty and for believers, a religious obligation. The Quran makes clear that people should not remain silent in the face of injustice: “O you who believe! Be upholders and standard-bearers of justice, bearing witness to the truth for God’s sake, even though it be against your own selves, or parents or kindred.”

    For the past 50 years, I have been fortunate to take part in a civil society movement, sometimes referred to as Hizmet, whose participants and supporters include millions of Turkish citizens. These citizens have committed themselves to interfaith dialogue, community service, relief efforts and making life-changing education accessible. They have established more than 1,000 modern secular schools, tutoring centers, colleges, hospitals and relief organizations in over 150 countries. They are teachers, journalists, businessmen and ordinary citizens.

    The rhetoric used by the ruling party repeatedly to crack down on Hizmet participants is nothing but a pretext to justify their own authoritarianism. Hizmet participants have never formed a political party nor have they pursued political ambitions. Their participation in the movement is driven by intrinsic rewards, not extrinsic ones.

    I have spent over 50 years preaching and teaching the values of peace, mutual respect and altruism. I’ve advocated for education, community service and interfaith dialogue. I have always believed in seeking happiness in the happiness of others and the virtue of seeking God’s pleasure in helping His people. Whatever influence is attributed to me, I have used it as a means to promote educational and social projects that help nurture virtuous individuals. I have no interest in political power.

    Many Hizmet participants, including me, once supported the ruling party’s agenda, including the 2005 opening of accession negotiations with the European Union. Our support then was based on principle, as is our criticism today. It is our right and duty to speak out about government policies that have a deep impact on society. Unfortunately, our democratic expression against public corruption and authoritarianism has made us victims of a witch-hunt; both the Hizmet movement and I are being targeted with hate speech, media smear campaigns and legal harassment.

    Like all segments of Turkish society, Hizmet participants have a presence in government organizations and in the private sector. These citizens cannot be denied their constitutional rights or be subjected to discrimination for their sympathy to Hizmet’s ideals, as long as they abide by the laws of the country, the rules of their institutions and basic ethical principles. Profiling any segment of society and viewing them as a threat is a sign of intolerance.

    We are not the only victims of the A.K.P.’s crackdown. Peaceful environmental protesters, Kurds, Alevis, non-Muslim citizens and some Sunni Muslim groups not aligned with the ruling party have suffered, too. Without checks and balances, no individual or group is safe from the ruling party’s wrath. Regardless of their religious observance, citizens can and should unite around universal human rights and freedoms, and democratically oppose those who violate them.

    Turkey has now reached a point where democracy and human rights have almost been shelved. I hope and pray that those in power reverse their current domineering path. In the past the Turkish people have rejected elected leaders who strayed from a democratic path. I hope they will exercise their legal and democratic rights again to reclaim the future of their country.

    Fethullah Gulen is an Islamic scholar, preacher and social advocate.

  • Muslims Discovered Mercedes!

    Muslims Discovered Mercedes!

    by Burak Bekdil
    Hürriyet Daily News
    December 17, 2014

    821Although 64 different Quran verses instruct Muslims to follow the path of “modesty,” Turkish Religious Affairs Directorate President Mehmet Görmez has other ideas.

    Turkish President Recep Tayyip Erdoğan argues that the American continent was discovered by Muslim sailors some 300 years before Christopher Columbus – and that Muslims had even built a mosque atop a hill near the Cuban shore. Science and Technology (Science!) Minister Fikri Işık claims that Muslim scientists working around 1,200 years ago (some 700-800 years before Galileo Galilei) were the first to determine that the Earth is a sphere. These are all controversial theories. But the luxury car Mercedes is discovered by Muslims every day, most recently by the top Turkish clergy.

    Professor Mehmet Görmez, the president of the Religious Affairs Directorate (Diyanet), is the inventor of the theory that Christians should celebrate when Muslims (Ottomans) capture Christian lands, as this is a merry event and they are lucky because their hearts and minds will be “conquered” by Islam. All the same, when non-Muslims take back the lands they lost to Muslims this amounts to the sinful act of “occupation.”

    According to this theory, Professor Görmez should be feeling sorry for the Viennese, because in 1683 they lost the chance of pure happiness of having their minds and hearts conquered. It’s never too late; the Viennese are smart people. But apparently, 2014 is no good time for the Muslim conquest of Christian lands by the force of the sword; but luckily sophisticated methods exist in the times of Turkish science. Professor Görmez may have given up on Vienna, but he sure knows how to conquer and win hearts and minds in Bavaria – where the Germans build Mercedes cars for the world’s richest.

    A couple of weeks ago, Hürriyet ran a story that claimed a foundation run by Diyanet had decided to purchase a top class Merdeces S500, with a nice price tag of $400,000, to drive around Professor Görmez. Diyanet vehemently denied this absurd claim. No, it said, the money was not paid from the foundation’s money but was paid from Diyanet’s own budget; and the price was “lower.” Curiously, Diyanet was too shy to disclose “how much lower.” Hürriyet’s bad reporting had been unmasked. The money came from Diyanet’s budget, not from a foundation it runs. So, the story was merely “slander.”

    Diyanet’s 2015 budget is 1.4 times bigger than that of the Interior Ministry, 2.7 times bigger than that of the Foreign Ministry, [and] 5.1 times bigger than that of the National Intelligence Agency.

    Worse, Hürriyet‘s slander had been so smartly timed that the story ran on the page only a few days after news reports said Pope Francis, during his visit to Turkey, had insisted to be driven in a $20,000 Renault Clio. Diyanet thinks that the two stories combined were put on the page in order to “manipulate public perceptions.” What Diyanet’s long denial statement did not say was that “a Mercedes S500 for Professor Görmez was not, is not being or would ever be purchased from whatsoever fund or source.”

    If, Professor Görmez must have reasoned, the president of the country deserves to spend nearly $800 million on his new presidential palace and private jet, this modest administrative leader of Turkey’s more than 70 million Muslims should deserve a chauffeur-driven S500 which even comes at a price “lower than $400,000.” He could have applied an alternative logic to justify the fancy S500.

    Diyanet’s 2015 budget is 1.4 times bigger than that of the Interior Ministry; 2.7 times bigger than that of the Foreign Ministry; 5.1 times bigger than that of the National Intelligence Agency (MİT); 6.1 percent bigger than that of the Prime Ministry (to which it reports); 12.1 percent bigger than that of the Health Ministry; 19.7 percent bigger than that of the EU Ministry (most understandable of all); and 35.4 percent bigger than that of the Court of Appeals. Since all of those ministers, the head of the MİT, and the president of the Supreme Court are being driven in cars equally fancy as an S500, why should Turkey’s top Muslim cleric not go for one too? Right? Right.

    Unless, of course, Professor Görmez was the administrative (if not spiritual) leader of more than 70 million national adherents of a religion whose holy book instructs its worshippers – in 64 different verses – to follow the path of “modesty.”

    Burak Bekdil, based in Ankara, is a columnist for the Turkish daily Hürriyet and a fellow at the Middle East Forum.

    Related Topics:  Turkey and Turks  |  Burak Bekdil

  • Poor Richards Report

    Poor Richards Report

    Chapter 21 Ted Butler Research LLC.
    This is a research report is from Ted Butler who is often quoted in various internet articles and has been quoted in the Financial Times.

    The Congressional solution to this problem is for Congress to enact a law where the fines go to reduce Social Security debt and the division fined is spun off to a competing financial institution. The former employees and supervisors and banned from the industry.

    With both houses of the same party in the United States, I foresee in the near future(3-6 months) a Congressional investigation.

    Please read Ted Butler’s letter with interest.- ed

    It has now been 14 years since I first started writing articles on silver for Investment Rarities, a precious metals dealer in business for more than 40 years. It was an association I originally assumed would last a couple of months. In mid-2000, I received a call from James Cook, the president of IRI. There had been a surge in precious metals sales for a number of years preceding Y2K and when no great disaster befell the world’s computers at the start of the millennium, sales fell dramatically. Cook had gotten my name from a friend of his who told him that I had been writing on the Internet about reasons to buy silver different than what others were writing.

    After discussing silver from how I viewed its supply/demand fundamentals to how I had tried to end its price manipulation for the past 15 years (up until then) and seeing how bullish I was for the future price, Cook asked me if I would write something that he could send his clients. I told him that my prime purpose was to end the manipulation, but since I didn’t see how getting people to buy silver (then under $5) would be counterproductive to my main objective, I agreed to write an article or two. The first articles did persuade enough folks to buy silver and 14 years then went by in a flash. The amazing thing is that the issues I wrote about on the Internet before my association with Cook’s company are essentially the same as the issues I’ve written about up until today.

    Over the years, since I wrote so many articles for IRI, Cook took it on himself (but certainly with my approval) to produce booklets from time to time which were compiled of various previous articles of mine and he offered them to his prospective clients. A year ago, Cook compiled a new booklet, the title of which is “How JPMorgan Manipulates and Controls the Gold and Silver Market.” Having run out of published copies, he’s contemplating publishing another batch and asked me if I thought an update would be appropriate. Considering the momentous changes in the silver market over the past year, particularly concerning JPMorgan’s role, I told him a postscript was certainly in order.

    What follows is my proposed postscript for the booklet. Afterwards, I’ll comment on recent market activity.

    Postscript – December 2014

    This book has been a compilation of previously published articles, some dating back more than a decade. My discovery of the silver price manipulation goes back much further than that – almost 30 years. All market manipulations must have a kingpin or main player. While the title of this book is centered on JPMorgan, it was not until late 2008, that I discovered that this bank was the prime silver manipulator, by virtue of the Bear Stearns takeover. Since that discovery, I have focused extensively on the actions of JPMorgan in the silver market.

    JPMorgan has dominated and controlled the silver market to an extent that I may have actually underestimated. Recent actions by the bank indicate the long expected end to the silver manipulation may be at hand. Not only is it consistent that the prime manipulator would be most responsible for prolonging a market manipulation that has lasted longer than any other in history, no such manipulation could end absent the role of the central player.

    As much as I would have preferred a different outcome, the flow of data suggests that JPMorgan not only profited mightily on the historic silver price decline from nearly $50 in 2011 to under $15 recently; the bank is now positioned to reap the rewards of a soaring silver price. Simply put, over the last three and a half years, JPMorgan has completely reversed its previous position of being the world’s largest silver short holder to now being, in my opinion, the largest silver long in history.

    I would have preferred, in a fair or just world, JPMorgan being punished either by the market or by the market regulators for manipulating the price of silver to such depressed levels, but instead it appears that the bank has avoided any reprisals for pushing prices first lower and will profit immensely on any upside move. What flow of data can I point to that would back up my assertions?

    My primary data source is the government published Commitments of Traders Report (COT) which is released weekly. Along with the companion monthly Bank Participation Report, what the data show is that JPMorgan over the past nearly seven years, increased its massive concentrated short position in COMEX silver futures whenever silver prices advanced and closed out much of its short position on silver price declines. That may sound like plain old-fashioned good trading, but that description doesn’t apply when you hold such a large and controlling short position in a market so as to manipulate prices. Manipulation, after all, is nothing more than dominating and controlling prices.

    Since JPMorgan never bought back its COMEX silver short positions as prices rose, but only when prices fell, its control of the market was complete and it always and only bought back shorts at a profit. At the extreme, on a number of occasions JPMorgan held more than 40,000 contracts of COMEX silver futures net short, the equivalent of 200 million ounces of silver. As a result of what only can be called market control, JPMorgan has closed out enough shorts to whittle down its silver short position to less than 7500 contracts. Clearly, even though JPMorgan has reduced its COMEX silver short position by more than 80%, that’s a far cry from the bank being long silver, to say nothing of being the world’s largest silver long.

    One must look away from the COMEX to understand how JPMorgan could be the world’s largest silver long (owner) since the data indicate that the bank still holds a short position on the exchange, albeit the smallest such short position in 7 years. The evidence suggests that JPMorgan used its control of silver prices by virtue of its dominant COMEX market share to depress prices, not only to accrue profits on its short position, but even more for the express purpose of accumulating physical silver on the cheap. What evidence?

    The evidence lies in the intentionally poor price performance of silver over the past nearly 4 years and the fact that the world has produced as many as 300 million ounces of new silver that has been excess to total fabrication demand. This extra silver had to be bought by the world’s investors and those investors did not appear to be aggressive buyers. In other words, someone had to buy the silver and since the world’s investors did not appear to be ready buyers, the metal was most likely bought by a non-traditional buyer. JPMorgan most closely fits that description for two reasons. One, buying physical silver was the most practical and efficient manner of closing out JPM’s documented COMEX short position and two, the silver purchases would be kept confidential since no reporting requirements attach to physical ownership. By buying physical silver, JPMorgan could cover its massive COMEX short position absent prying eyes.

    Based upon deposit/withdrawal patterns in the world’s largest silver ETF, SLV, a pattern of physical silver accumulation emerges. In the big silver price takedown beginning in May 2011, some 60 million ounces of silver were redeemed from the trust as investors reacted to sharply falling prices by selling shares. The silver sold at this time was, obviously, bought by someone else; as there must be a buyer for every ounce sold. Who better a buyer than the world’s largest short holder at that time, JPMorgan? And over the past three and a half years, JPMorgan, by continuing to hold, albeit at a declining rate, the largest short silver holder becomes the de facto logical buying candidate.

    Additionally, over the past 4 years, an unusually large amount of Silver Eagles have been produced and sold by the US Mint, some 160 million ounces, in a steadily declining price environment. Nearly as many Silver Eagles were sold by the US Mint over the past 5 years as were sold in the previous 23 years of the program. For the past four years, the Mint struggled to keep up with demand for Silver Eagles and frequently resorted to rationing coins. However, consistent reports from the retail dealer community indicated a falloff in broad retail demand for Silver Eagles.

    The only plausible answer to this conundrum of record Silver Eagle sales and tepid retail demand was that a large entity or entities were behind the buying demand. Based upon the above, JPMorgan appears to me to the big buyer, accounting for 60-75 million coins over the past four years. All told, based upon SLV transaction, Silver Eagles and other forms of silver that could have been purchased, it is my guesstimate that JPMorgan could have accumulated 300 million oz of physical silver over the past four years; or three times what the Hunt Brothers were said to have bought by 1980. And please remember – there was a heck of a lot more silver in the world in 1980 than exists today; approximately 3 billion oz back then versus close to a billion oz today.

    What this means is that the Hunt Brothers were found to have manipulated the price of silver by holding roughly 3% of the world’s silver bullion inventory, while JPMorgan has accumulated close to 25% of the world’s visible silver bullion inventory (adjusting for the 400 million Silver Eagles in existence). The Hunt Brothers buying caused silver prices to rise nearly ten-fold, while JPMorgan’s buying has been on steadily declining prices as much as 70% off the price peak of 2011. In my opinion, this could only be accomplished through an intentional downward price manipulation and by having the power and political connections of an organization like JPMorgan.

    The intent of this postscript is to describe how JPMorgan has now gone full circle, by manipulating the price of silver lower for nearly 4 years for the designed purpose of profitably closing out its massive short position and of accumulating the largest physical silver position in history. As and when the bank has purchased what it feels is all silver it can accumulate, it follows the price should rise mightily. Certainly, if I am close to being correct about the amount of silver accumulated by JPMorgan, the potential profit to the bank is potentially epic. At $50, JPMorgan would be ahead by $10 billion compared to current prices; at $100, the bank would gain another $15 billion on top of that.

    I confess to having some mixed feelings about JPMorgan owning as much physical silver as I suspect because there is a possibility that I may have (inadvertently) influenced them in their accumulation. After all, I have sent them more than 500 of my articles over the past six years in which I openly alleged that JPMorgan was the big silver manipulator. Of course, I did this to be upfront and give the bank every opportunity to object to or disagree with anything I had written. I’ve never heard back from JPMorgan.

    As is always the case, the timing of the coming liftoff in silver prices is unknowable. But the odds of a big silver move up in time are overwhelming. And to all the favorable supply/demand realities that make up the odds, if my speculation about JPMorgan is correct, the most bullish factor of all has just been added to the mix.

    End of postscript.

    There have been a number of developments over the past few days that I’d like to comment on. First, sales of Silver Eagles from the US Mint continued to surge and yesterday it was reported that more than 43 million of the one ounce coins were sold this year, the most in the program’s 28 year history. The daily run rate increased (despite my observations on Saturday) and the Mint announced it will be ending sales for this year, probably by next week. As I indicated above, I still think JPMorgan has been the big buyer this year and for the past few years.

    The new short interest report for stocks indicated a reduction of 2 million shares in the short positions of both SLV, the big silver ETF and in GLD, the big gold ETF. The cut-off date for the short report was Friday, Nov 28, when silver and gold prices fell sharply on high trading volume. I won’t call it a prediction, but in the weekly review of Nov 29, I wondered aloud if the sell-off that day might be related to short covering and the new report would seem to conform to that thought. In any event, it’s always good, as far as I’m concerned when the short positions in the hard metal ETFs goes down. https://shortsqueeze.com/?symbol=slv&submit=Short+Quote%99

    I’m pretty sure that those of you who tuned into the CFTC’s public hearings yesterday on position limits came away fairly underwhelmed. The meeting wasn’t so much about position limits but more about specific agricultural issues related to position limits. As I remarked on Saturday, this is somewhat odd, seeing as position limits have been firmly in place in agricultural futures contracts, in some cases for more than 80 years. The main concern with Dodd Frank was getting position limits in place for the 28 physical commodity futures currently not subject to position limits, but nothing was covered in the meeting pertaining to that. However, this was a meeting of the agricultural committee (in which the US Secretary of Agriculture put in an appearance) and was advertised as such.

    A number of readers have asked for direction in how to respond to the CFTC’s solicitation for public comments, seeing how we’ve been down this road before. My reading of the situation is that the CFTC is only interested in comments related to agricultural position limits and would most likely disregard comments on silver. I may change my mind, but I’m not inclined to submit a comment at this time and I’d like to explain why. It has nothing to do with the issue not being as important as I’ve represented in the past and everything to do with the signals the Commission has been sending on position limits.

    Five years ago, I could hardly contain myself on the issue because it seemed that every time I turned around there was Gary Gensler, the former CFTC chairman, giving a speech or holding town hall meetings on the matter of position limits on the 28 markets lacking such limits. In contrast, today it seems the agency is just going through the motions. Whereas Gensler (correctly) hammered the issue to death, the current chairman seems to only include position limits as one issue among many more important issues. Judge for yourself with the prepared testimony of Chairman Massad today before a Senate committee.

    I continue to believe that the issue of position limits in the 28 physical commodities will be resolved, but that it will have nothing to do with public comments. As I said, let me think it over as I may change my mind.

    The price of gold and silver surged yesterday and held those gains through today’s trading. In silver, it was the first upside penetration of the important 50 day moving average in six months. I would imagine there was further technical fund buying, including both additional short covering and most likely new buying as well. The key question, of course, is who were the sellers and more specifically, how much additional short selling occurred by the 4 and 8 largest commercial shorts in both silver and gold. Because yesterday was the cutoff for the reporting week, this Friday’s COT should go a long way to answering the question.

    While I’m resigned to some disappointment in increased concentrated short selling by the big commercials, I am still more interested in what has occurred over the past five reporting weeks, namely, the unprecedented outcome of the technical funds cashing in massive profit chips on the short side of silver and a good number of commercial longs (raptors) tapping out. Nothing close to this has occurred previously and I’m still convinced that this shocking turnabout portends important changes ahead, including a potential loss of trading liquidity. A loss of liquidity generally translates into bigger price moves and yesterday’s large price moves in gold and silver would tend to support my conclusion.

    Even if the big gold and silver commercial shorts added aggressively to short positions yesterday that doesn’t mean they will be as successful as they have been in the past in capping prices, if as much commercial liquidity has been lost as I believe. Despite the rally, silver prices are still stupid cheap and destined to move sharply higher. Concentrated and manipulative additional short selling may create some serious price bumps (up and down) ahead, but at current depressed price levels for silver, there is a much greater risk of worrying about minor selloffs from here and missing the big move to come. If ever there was a time to hold a full load of silver and damn the torpedoes, that time would appear to be at hand. In any event, COMEX futures positioning remains the prime price determinant.

    Ted Butler
    December 10, 2014
    Silver – $17.15
    Gold – $1229
    http://www.butlerresearch.com

  • Poor Richards Report Chapter 15

    Poor Richards Report Chapter 15

    POOR RICHARDS REPORT
    Chapter 15
    Ringing the Bell or Trumpets are Blowing
    Or How to Survive to Coming Panic
    The Federal Reserve Act of 1913 is probably the most important law of the 21st century. We must follow the guidelines that were followed by the members of Congress who voted for this to be law.
    The reforms that I suggest will send the market into a temporary tailspin, but if they are followed completely only the speculators will crash.
    For openers, the banks who have been hording all the QE distributions must now share them with their depositors and give a greater portion to the younger depositors because they need it the most. They will also spend their portion, which will kick start the economy.
    Next, the Congress should form a standing committee of 16 members to review all the reforms to our financial system. The members should be equally divided from each party and have the highest respect among their peers. Seniority or power should not be considered. Ethics should be of the highest order.
    Finally they should have a unanimous vote before it comes before the entire house. This was a stipulation when the committees met for the Federal Reserve Act of 1913. It took them 6 months. The Congress voted December 22, 1913: 298 yeas and 60 no’s and 76 not voting. On December 23, 1913 in the morning vote, there were 43 yeas and 25 no’s with 27 no votes. (Back then there were only 95 senators).
    That afternoon President Woodrow Wilson signed the act into law.
    1. The Federal Reserve shall raise All Margin rates to 100% for a period of 6 months to a year.
    2. The Security Exchange Commission (SEC) shall ban all corporate share buybacks. (All this does is increasing the earnings per share and enables the officers to receive a higher price for their options).
    Instead, the monies should be distributed to the shareholders so all can share the wealth – not a privileged few.
    This should create new buyers that should offset the sellers.
    3. “Banks” should start returning the QE funds they have been hording over the past few years to their depositors. This should be done with the younger ones with families receiving a greater portion. Then staggered depending upon one’s earning power. The higher the earning power the less money received. This should increase the velocity or turnover of money. Some corporations will fail while others will prosper due to some changes in buying patterns.
    4. Ban High Frequency Trades (HFT’s) entirely. They break all the rules for fair play and only benefit the owners. The public be damned; damn them.
    5. Derivative trades are set up for fees and is a form of gambling. Most derivative trades are hard to follow and most financial disappoints (a nice word) evolve some forms of derivatives. The best way out of this mess is to just let them mature.
    6. Trash the Dodd- Frank ACT and make the new one simple to understand.
    7. Trash the Investment Company Act of 1940. It covers mutual funds. Exchange Traded Funds (ETF’s) have quietly been replacing mutual funds. With computers and their size most of these laws are anachronisms.
    8. Clean up the ads. Most ads today give the hint of casino gambling. Insert a clause for risk.
    9. Go back to the fraction system for stocks. This will allow the market maker to support his market during normal times and also kill off HFT’s and stop firms offering the first “free” trades.
    10. Reinstate the Short Sell Rule. This is very important because it will stop gambling and stop computer hacking in the market place.
    To do a legitimate Short sale one must first get permission from the back office of the firm one is doing business with. (They have the security to deliver to a buyer when you sell short). Then one must wait for an uptick in the price of the stock before the sale can take place. The order is also marked “Short Sale”.
    Today I believe short sales are made willy nilly and no uptick is involved. I also believe that after a sale is done they look for stock to deliver.
    These reforms that I have listed so far will cause all hell to break loose among the heels of the business. They will be the losers while the public will gain confidence in the system and regain some of their tax dollars.
    Investors will be able to make intelligent decisions based upon facts and knowledge instead of charts and soothsayers and false prophets.

  • A PIECE OF CHINA FOR A PIECE OF TURKEY

    A PIECE OF CHINA FOR A PIECE OF TURKEY

    A PIECE OF CHINA FOR A PIECE OF TURKEY

    • Tal Buenos
    A piece of China for a piece of Turkey

    World historiography and politics have yet to catch up with post-colonial times. However, the following discovery may push further toward international recognition of political realities that are strongly linked with a history of Western imperialism: there is documentation to show that the ones who sought to tear up the Ottoman Empire in the late 19th century are the same people who spoke freely of carving up China.

    The crossing paths of Western imperialism in China and Turkey are exposed in a letter that was sent on May 16, 1895 to James Bryce in London from Robert Stein of the U.S. Department of the Interior in Washington.

    At the time of receiving this letter, Bryce held a cabinet position in the British government under the title of President of the Board of Trade. Armenian-centered accounts of World War I that are published in the U.S. typically offer narrow and misleading descriptions of a compassionate and fair Bryce in order to legitimize the citing of his wartime propaganda, the Blue Book, against the Ottoman state as evidence of the Armenian experience from 1915 to 1916. Such accounts do not mention that already in 1876 Bryce began to spearhead a decades-long political campaign for Armenian independence that would pave the way for his personal ascent in British politics as an expert on foreign affairs, advance British imperial interests through moral pretense and tragically mark the eventual long road of suffering for many Armenians. His efforts included declaring that the Ottoman Empire was dead, arguing that Muslims are not fit to rule, stating that Armenians were racially superior to Turks, claiming that an Armenian state on Ottoman ground was the best possible development in eastern Anatolia for Britain’s continued colonization of India, organizing the national Armenian leadership and advocating for an Armenian armed rebellion despite the clear incapability of Armenian communities to protect themselves from violent reprisals.

    Stein wrote to Bryce in his official capacity within the U.S. Geological Survey agency of the U.S. government using official letterhead. Considering the title of his office, Stein’s involvement in international affairs would not appear to be an obvious one, but if one considers that during those days the U.S. claimed to be following a foreign policy of non-interference, as Stein himself mentioned in his letters to Bryce, then it would make sense that the correspondence with Bryce on imperialist matters would be done without openly involving the State Department.

    Furthermore, Stein’s letters reveal an American method to affect the conditions in Ottoman territories by mobilizing Christian organizations, thereby finding non-governmental means of imperialist influence and adding a moralistic spin to justify it. Accordingly, the religious identity of Christian minorities turned into a political identity as these groups were bent on promoting an imperialist agenda and delegitimize the Ottoman government. As a result, they were perceived as hostile political groups by the Ottoman authorities, which then treated them as a fifth column.

    In the spirit of the game of Risk, Stein essentially suggested to Bryce that it would serve Britain well if a piece of China would be exchanged for a piece of Turkey. Identifying the Russian position as the main obstacle standing in the way of appointing a European to govern a big piece of Ottoman land on an Armenian pretext, Stein figured that the Russians would be placated if offered “a piece of China.” Stein wrote that, ideally, he “would have all uncivilized countries placed under the control of England,” but to be practical, “the next best thing” was “to place Manchuria and Mongolia, and perhaps Korea and the Tarim basin [Xinjiang] under Russian control.” While he did not have a favorable view of the Russian government, he claimed that “it is infinitely better than the Chinese.”

    This imperialist plan carried within it an emphatic display of racism and greed: “The division of China would practically place the earth under the control of the white race – a consummation devoutly to be wished, which would fitly close the nineteenth century.” According to this vision, “England will be practically the mistress of Turkey and Persia, which, together with Egypt, will constitute the focus of the world’s commerce in the next two centuries.”

    These are the people who operated from behind the scenes of Anglo-American imperialism, and this is how they achieved their goals by dividing pieces of China, shaping an Armenian national identity in order to take over Asiatic Turkey and by throwing ideas of bartering between such assets.

    This letter is available for view in MS. 196, leaves 113-115, among the James Bryce papers, which are kept by the Department of Special Collections in Bodleian Library at Oxford University.

    The plan that was articulated in the letter for such action in China may have suited the U.S., but Britain had its own agenda. In “English Lessons: The Pedagogy of Imperialism in Nineteenth-Century China” (2003), James Hevia of the University of Chicago noted that the political situation in China was such that Britain, France, Germany, and Russia had actual spheres of influence in Qing dynasty territory, but for the U.S., which had no physical hold there, the main interest was to maintain a European balance of power in China so that it could exploit an open Chinese market. Indeed, Stein stressed in the letter to Bryce: “As regards trade, the condition ought to be inserted in the treaty of partition that all the territory thus divided should be free to the trade of all nations.” Hevia illustrated in his book how Britain’s goal in its dealings with China after the two Opium Wars was not to establish a full colonial rule as in India, but to have a semi-colonial control of it through the imposition of a pedagogical project under the threat of using force, which was “itself a form of colonization” to prepare China for subordination to other empires, meaning the Chinese were force-fed narratives that were convenient to Western imperialism, and these narratives have had a lingering effect.

    Much like China, the Ottoman state was also designated by the British to suffer a form of imperialist domination that was to facilitate the all-important colonization process in India. However, while in China a didactic agenda was implemented, in the Ottoman territories the British looked to weaken the Ottoman government by generating national excitement among imperialist-friendly Christian minorities and thereby destroy the existing internal structures within the Ottoman Empire so that it could be replaced by accommodating states.

    In other words, both the Qing and Ottoman governments, though known as having been empires themselves, were suffering from foreign imperial designs, and yet the long term consequences of this domination have not been consolidated into one shared narrative to offer a coherent explanation of the complex process of recovery and growth that was necessary for these subordinated empires.

    While the recent emergence of scholarly work in the U.S. has led to nuanced interpretations of the colonial discourse in East Asia, the politically driven gravitation to the Armenian tragedy in discussions about the Ottoman decline has stifled a similar progression in describing the Western imperial agenda in the semi-colonization of Ottoman territories. The manipulations applied to the Qing and Ottoman territories were different, but both cases were semi-colonization efforts in the sense that they were of the same British purpose to sustain the full colonization of India.

    Studying this letter and others like it may bring into view a critical juncture through which to bring together historically significant truths that are concealed in their detached and decontextualized condition in the Western historiography that is both the result and remnant of Western imperialism. The perception of an Islamic peril in Western societies has followed the same patterns of production as that of the Yellow Peril.

    At this point there are narratives whose very existence in Anglo-American circles is tantamount to adding insult to the old injuries of imperialism against countries such as China and Turkey. It is a double offense to first intentionally tamper with the ways in which people govern their affairs and then criticize them over a century later for having to negotiate between individual freedoms and the protection of government from a recurrence of foreign interference. Do known burglars dare to rebuke previously burglarized homeowners for locking their doors? This double offense may be addressed through historical facts. Neither China nor Turkey has to stand alone in the efforts to recover from “post-semi-colonial” trauma and rescue historical narratives from the colonial discourse.

    * The author has a Master’s degree in Theological Studies from the Harvard Divinity School and is currently a Ph.D. candidate in Political Science at the University of Utah

  • Germany Fights on Two Fronts to Preserve the Eurozone

    Germany Fights on Two Fronts to Preserve the Eurozone

    Geopolitical Weekly

    Tuesday, September 30, 2014 – 03:01 Print Text Size

    Stratfor

    By Adriano Bosoni and Mark Fleming-Williams

    The European Court of Justice announced Sept. 22 that hearings in the case against the European Central Bank’s (ECB) bond-buying scheme known as Outright Monetary Transactions (OMT) will begin Oct. 14. Though the process is likely to be lengthy, with a judgment not due until mid-2015, the ruling will have serious implications for Germany’s relationship with the rest of the eurozone. The timing could hardly be worse, coming as an anti-euro party has recently been making strides in the German political scene, steadily undermining the government’s room for maneuver.

    The roots of the case go back to late 2011, when Italian and Spanish sovereign bond yields were following their Greek counterparts to sky-high levels as the markets showed that they had lost confidence in the eurozone’s most troubled economies’ ability to turn themselves around. By summer 2012 the situation in Europe was desperate. Bailouts had been undertaken in Greece, Ireland and Portugal, while Italy was getting dangerously close to needing one. But Italy’s economy, and particularly its gargantuan levels of government debt, meant that it would be too big to receive similar treatment. In any event, the previous bailouts were not calming financial markets.

    Click to Enlarge
    As Spain and Italy’s bond yields lurched around the 7 percent mark, considered the point where default becomes inevitable, the new president of the European Central Bank, Mario Draghi, said that the ECB was willing to do whatever it took to save the euro. In concert with the heads of the European governments, the ECB developed a mechanism that enables it to buy unlimited numbers of sovereign bonds to stabilize a member country, a weapon large enough to cow bond traders.

    ECB President Mario Draghi never actually had to step in because the promise of intervention in bond markets convinced investors that eurozone countries would not be allowed to default. But Draghi’s solution was not to everyone’s taste. Notable opponents included Jens Weidmann, president of the German Bundesbank. Along with many Germans, Weidmann felt the ECB was overstepping its jurisdictional boundaries, since EU treaties bar the bank from financing member states. Worse, were OMT ever actually used, it essentially would be spending German money to bail out what many Germans considered profligate Southern Europeans.

    In early 2013, a group of economics and constitutional law professors from German universities collected some 35,000 signatures and brought OMT before the German Constitutional Court. During a hearing in June 2013, Weidmann testified for the prosecution. In February 2014, the court delivered an unexpected verdict, ruling 6-2 that the central bank had in fact overstepped its boundaries, though it also referred the matter to the European Court of Justice. Recognizing the profound importance of this issue, the court acknowledged that a more restrictive interpretation of OMT by the European Court of Justice could make it legal.

    The German judgment suggested that three alterations to OMT would satisfy the Constitutional Court that the mechanism was lawful. Two of the three changes, however, are problematic at best. One alteration would limit the ECB to senior debt, a change that would protect it against the default of the sovereign in question but also risk undermining the confidence of other investors who would not be similarly protected. The second alteration would make bond buying no longer “unlimited,” constraining the bank’s ability to intimidate bond traders by leaving it with a rifle instead of a bazooka.

    A New German Political Party

    The group of academics who organized the petition kept busy while the court deliberated. The Alternative for Germany, a party founded in February 2013 by one of their number, economics professor Bernd Lucke, and frequently known by its German acronym, AfD, has made significant gains in elections across Germany. Founded as an anti-euro party, the party came very close to winning a seat in the Bundestag, the lower house of the German parliament, in the September 2013 general elections, a remarkable feat for a party founded just six months before. It made even larger gains in 2014, winning 7.1 percent of the vote in European Parliament elections in May and between 9.7 and 12.2 percent in three regional elections in August and September.

    Germany is currently ruled by a grand coalition, with German Chancellor Angela Merkel’s center-right Christian Democratic Union party (and its sister party, the Bavaria-based Christian Social Union) sharing power with the center-left Social Democratic Party. This has resulted in the Christian Democratic Union being dragged further to the center than it wanted to be, creating a space to its right that the Alternative for Germany nimbly entered.

    Originally a single-issue party, the Alternative for Germany has begun espousing conservative values and anti-immigration policies, a tactic that worked particularly well in elections held in eastern Germany in the summer. Its rise puts Merkel, a European integrationist, in a quandary that will become particularly acute if the Alternative for Germany proves capable of representing Germans uncomfortable with the idea of the country financially supporting the rest of Europe.

    Since the beginning of the European crisis, Merkel has proved masterful at crafting a message that combines criticism of countries in the European periphery with the defense of bailout programs for those same countries. But while Merkel has become accustomed to criticism from left-wing parties over the harsh austerity measures the European Union demanded in exchange for bailouts, she had not counted on anti-euro forces mounting serious opposition in Germany. Merkel is not alone in this, of course: center-right parties across Europe, from David Cameron’s coalition in the United Kingdom to Mark Rutte’s People’s Party for Freedom and Democracy in the Netherlands, have seen Euroskeptical populism emerge to their right, eating into their traditional voter platforms.

    This anti-ECB sentiment in Germany has swelled during 2014, as Draghi’s attempts to increase the eurozone’s low inflation have departed further and further from economic orthodoxy. German conservatives have greeted each new policy with displeasure. The German media has called negative interest rates “penalty rates,” claiming they redistribute billions of euros from German savers to Southern European spenders. On Sept. 25, German Finance Minister Wolfgang Schauble spoke in the Bundestag of his displeasure with Draghi’s program to buy asset-backed securities. Judging from the German hostility to even “quantitative easing-lite” measures, the ECB’s attempts to rope Germany into further stimulus measures could prove troublesome indeed.

    Institutional and Political Challenges for Berlin

    All of the measures the ECB has announced so far, however, are mere appetizers. Financial markets have been demanding quantitative easing, a broad-based program of buying sovereign bonds in order to inject a large quantity of money into the market. Up to this stage, three major impediments have existed to such a policy: the German government’s ideological aversion to spending taxpayers’ money on peripheral economies; the political conception that quantitative easing would ease the pressure on peripheral economies to reform; and the court case that has been hanging over OMT (the only existing mechanism available to the ECB for undertaking sovereign bond purchases). Notably, the OMT in its original guise and quantitative easing are not precisely the same thing. In the original conception of OMT, the ECB would offset any purchases in full by taking an equivalent amount of money out of circulation, (i.e., not increasing the money supply itself). Nonetheless, any declaration that OMT is illegal would severely inhibit Draghi’s room for maneuver should he wish to undertake full quantitative easing.

    This confluence of events leaves Merkel nervously awaiting the decision of the European Court of Justice. In truth, she is in a no-win situation. If the Luxembourg court holds OMT illegal, Draghi’s promise would be weakened, removing the force that has kept many sovereign bond yields at artificially low levels and permitting the desperate days of 2011-2012 to surge back. If the European Court of Justice takes up the German court’s three suggestions and undercuts OMT to the extent that the market deems it to be of little consequence, the same outcome could occur. And if the European Court of Justice rules that OMT is legal, a sizable inhibitor to quantitative easing will have been removed, and the possibility of a fully fledged bond-buying campaign will loom ever closer, much to the chagrin of the German voter and to the political gain of the Alternative for Germany.

    When analyzing the significance of this case, it is important to bear in mind that Germany is an export-driven power that must find markets for its exports to preserve cohesion and social stability at home. The eurozone helps Germany significantly — 40 percent of German exports go to the eurozone and 60 percent to the full European Union — because it traps its main European customers within the same currency union, depriving them of the possibility of devaluing their currencies to become more competitive.

    Since the beginning of the crisis, Germany has managed to keep the eurozone alive without substantially compromising its national wealth, but the moment will arrive when Germany must decide whether it is willing to sacrifice a larger part of its wealth to save its neighbors. Berlin has thus far been able to keep its own capital relatively free of the hungry mouths of the periphery, but the problem keeps returning. This puts Germany in a dilemma because two of its key imperatives are in contradiction. Will it save the eurozone to protect its exports, writing a big check as part of the deal? Or will it oppose the ECB moves, which if blocked could mean a return to dangerously high bond yields and the return of rumors of Greece, Italy and others leaving the currency union?

    The case will prove key to Europe’s future for even deeper reasons. The European crisis is generating deep frictions in the Franco-German alliance, the main pillar of the union. The contrast between Germany, which has low unemployment and modest economic growth, and France, which has high unemployment and no growth, is becoming increasingly difficult to hide. In the coming months, this division will continue to widen, and Paris will become even more vocal in its demands for more action by the ECB, more EU spending and more measures in Germany to boost domestic investment and public consumption.

    This creates yet another dilemma for Berlin, since many of the demands coming from west of the Rhine are deeply unpopular with German voters. But the German government understands that high unemployment and low economic growth in Europe are leading to a rise in anti-euro and anti-establishment parties. The rise of the National Front in France is the clearest example of this trend. There is a growing consensus among German political elites that unless Berlin makes some concessions to Paris, it could have to deal with a more radicalized French government down the road. The irony is that even if Berlin were inclined to bend to French wishes, it would find itself constrained by institutional forces beyond its control, such as the Constitutional Court.

    Germany has managed to avoid most of these questions so far, but these issues will not got away and in fact will define Europe in 2015; the Alternative for Germany, for example, is here to stay. Meanwhile, the Constitutional Court will keep challenging EU attempts at federalization even if this specific crisis is averted, and the Bundesbank and conservative academic circles will keep criticizing every measure that would reduce German sovereignty to help France or Italy. Though it is impossible to predict the European Court of Justice’s final ruling, either way, the dilemma will continue to plague an increasingly fragile European Union.

    Editor’s Note: Writing in George Friedman’s stead this week are Stratfor Europe Analyst Adriano Bosoni and Economy Analyst Mark Fleming-Williams.