Monthly Archives: February 2012

The Occupy Movement Needs a Grand Strategy

As the Occupy movement matures, it will need to clarify its overall objectives and develop a grand strategy for achieving them. It will perhaps find guidance in the work of Dr. Gene Sharp.

Gene Sharp is widely regard as “the world’s foremost expert on non-violent revolution,” but few people have ever heard of him. His book, From Dictatorship to Democracy: A Conceptual Framework for Liberation (1993), has reportedly been translated into more than 30 languages, and can be freely downloaded from the web. He has recently been written up by Thom Hartman (Gene Sharp’s Peaceful Revolution Techniques) and the BBC (Gene Sharp: Author of the nonviolent revolution rulebook).

Sharp’s book provides a large arsenal of “non-violent weapons.” Here is some of his advice:

  • Develop a strategy for winning freedom and a vision of the society you want
  • Overcome fear by small acts of resistance
  • Use colours and symbols to demonstrate unity of resistance
  • Learn from historical examples of the successes of non-violent movements
  • Use non-violent “weapons”
  • Identify the dictatorship’s pillars of support and develop a strategy for undermining each
  • Use oppressive or brutal acts by the regime as a recruiting tool for your movement
  • Isolate or remove from the movement people who use or advocate violence


Public Banking Institute gains momentum; announces April conference

Since its founding little more than a year ago, the Public Banking Institute has become a significant force that is helping to turn banking and finance away from fraud and predation back toward their intended objectives of promoting general prosperity and the common good. According to the PBI website,

PBI’s vision is to establish a distributed network of state and local publicly-owned banks that create affordable credit, while providing a sustainable alternative to the current high-risk centralized private banking system.

The current PBI newsletter features important news items and impressive articles by Ellen Brown and yours truly. It also announces PBI’s inaugural conference on, Public Banking in America, to be held in April in Philadelphia. I”m proud to be among the group of distinguished speakers slated to give presentations at this event.

You won’t want to miss it.–t.h.g.

Newsletter – late winter, 2012

In this issue

  • David Cobb, Creating Democracy & Challenging Corporate Rule
  • Catherine Austin Fitts, The global financial system and the power of people to overcome it.
  • Camilo Ramada, Can the Latin American C3 Model of Complementary Currency work also in the USA?
  • Occupy how?
  • The U.S. is already at war with Iran
  • Investing in yourself and your communities
  • Building our social capital
  • My 2012 U.S. Tour


Hanging out in the San Francisco Bay area has provided me some great opportunities for networking and enrichment. Over the past few weeks I‘ve had the privilege of hearing three excellent presentations. One of these was by David Cobb, titled Reversing Citizens United: Amending the Constitution to abolish corporate personhood. David is a lawyer and a fiery speaker who ran for President in 2008 on the Green Party ticket and has been traveling the country telling people about the history of corporations and how they have managed to usurp the political rights of real people. It is unfortunate that his presentation was not recorded, but you can get more information at the website,, and you can get involved, and perhaps find a group in your area by going to Amending the Constitution is one strategy for reigning in the power of corporations over our lives, but there are others that we can take directly that may have more immediate results. We first need to recognize our dependence upon corporations, then act to lessen it. We can also take concerted action to pressure them into being more responsible through organized boycotts and local ordinances, and we can work to get our pension fund manages to vote our corporate share holdings in ways that promote the public interest. None of these is a panacea, but as we the people unite to change the status quo, we will come up with even more creative approaches.

Another excellent spokesperson on this issue is Bill Quigley, a law professor at Loyola University. I highly recommend his article, Occupy Corporations: How to Cut Corporate Power.

Another recent event was a fascinating presentation by Catherine Austin Fitts. Catherine is an investment advisor and entrepreneur who once held a high level position in the federal government, having served from 1989 to 1990 as Assistant Secretary for Housing, responsible for the operations of the Federal Housing Administration during the first Bush administration. Her experience close to the center of power in Washington gave her a unique vantage point from which to view government malfeasance at the highest levels. She has some amazing stories to tell.

Here are a few important sound bites from Catherine’s presentation:

  • Over the past three decades, America has experienced a “financial coup d’état.”
  • The financial system is actually a centralized control system.
  • Americans have a traditional respect for individual rights. We need to globalize our covenant with one another regarding that.
  • Money follows trust.
  • Life is more valuable than metal (gold, silver, etc.)
  • “The beginning is near.”
  • The most likely economic and financial scenario is not sudden collapse, but a “slow burn.”
  • Invest your time in things that are both fun and productive.
  • Invest in things that provide a positive return to the commonwealth.
  • Some of the Occupy tactics have had a negative return to the commonwealth.

Catherine is the publisher of the Solari reports. I highly recommend Catherine’s website, and her blog. These can help you to cut through establishment propaganda and provide critical financial planning information.

Still another major event was a presentation on January 30 by Camilo Ramada at the Foundation for the Future in Palo Alto. Camilo is central figure in a Dutch non-profit called STRO, The Social Trade Organization. STRO has projects in various countries around the world and has a history of developing effective models for local economic development. Camilo gave a description of “C3,” a local currency project that has been operating successfully, with government support, in Uruguay. The Commercial Community Circuit (C3) creates a digital means of payment that is fully backed by cash reserves, financial guarantees and/or credit insurance.

Here is the official description of C3.

This digital currency is managed through the Cyclos software that offers all the functionalities of traditional on-line banking software:

  • a set of accounts through which users can make and receive payments
  • payments through Internet, cards or text messages
  • wide array of functionalities for users and administrators

The C3 works as a set of contracts between key partners that focus on their specialties. It does not require new skills or departments.

In a C3, a partner such as a community bank offers digital credit to be used locally as a means of payment. This digital credit will be more flexible because it does not require an immediate outlay of cash. It is cheaper than cash credit because it can charge less interest.

Entities with designated budgets for particular purposes, such as foundations, public agencies, and large construction projects can channel their budgets through a C3 to increase its local multiplier effect.

The C3 is self sustaining through transaction fees that, once costs are covered, can be reinvested in local social projects.

STRO’s websites are:


Cyclos software project site

Camilo’s presentation was recorded and you can view the complete proceedings at

Occupy how?

I’ve recently posted several important items that relate to the Occupy movement on my blog,, which I encourage you to read. The latest of these is: The Occupy movement at risk from violent protesters A key point that I make in that post is that, “The real threat to the powers that be, (and the most promising path toward our goals) is intelligent, non-violent, empowering actions that make them and their systems irrelevant. The way forward, as I see it, is to assert our fundamental rights and to organize better ways of providing for our basic needs.”

Other recent posts that may be of interest are:

*   The 100% solution: non-violent organizing for the common good

*   Taking Cashless Trade to a Higher Level

Just scroll down until you find them, or enter a portion of the titles in the search box.

The U.S. is already at war with Iran

There are many ways to fight a war that don’t require air strikes or military invasion. As Jim Rickards points out in his article, Iran, The Dollar And Financial Warfare (Tue, Feb 7), “The U.S. has applied financial and economic sanctions to Iran for over 30 years,” but what is new is President Obama’s recent move to prevent international banks from doing business with Iran’s central bank. “The result,” Rickards says, “was an immediate isolation of Iran from the dollar system and an acute shortage of dollars in Iran. The Iranian currency, the rial, crashed in value 40% against the dollar in a few days. Since many goods in Iran are imported, local prices doubled as merchants demanded more rials in order to acquire whatever dollars might be available on the black market to buy imported goods. Iranian banks responded by raising local interest rates to over 20% in order to keep rials from flooding out of the Iranian banking system.

In a matter of days, the U.S. had isolated Iran from the world banking system, destroyed the exchange value of Iran’s currency, injected hyperinflation into the local economy and caused a stratospheric increase in interest rates.”

But that’s not the end of the story. Rickards article also mentions the sabotage and assassinations that the west has recently carried out against Iran. But Iran may have some weapons of its own, and they have nothing to do with nuclear weapons. Please read the entire article. I don’t know Rickards, but he seems to be uncommonly knowledgeable and insightful in the realm of money and international finance. He is the author of Currency Wars: The Making of the Next Global Crisis, and author of numerous articles, two of which are:

The Real Agenda Behind The Fed’s Easing.

The Pending Currency War And What We Can Do About It.

Investing in yourself and your communities

I’ve been reading a pre-publication copy of Michael Shuman’s book, Local Dollars, Local Sense which is due to be released within the next few weeks. This book is a valuable addition to the literature about local investing and community empowerment. You can order it from Chelsea Green Publishing, but in the meantime, check out Michaels article, 5 Ways to Make Your Dollars Make Sense, in the February issue of YES! Magazine.

Building our social capital

We should all be working to build social capital in our communities because it is the social fabric that provides the foundation for political and economic empowerment. How to do that in our highly mobile and impersonal society is a crucial question. One example given by Bill McKibben in his best-selling book, eaarth, is that of a couple in Burlington, Vermont who printed up 400 flyers that they distributed throughout their neighborhood. The flyers invited people to use an email forum they created to inform one another of their news, events, problems, needs, etc. The emails would be assembled periodically and sent out as a single message to everyone on the list. Participation grew steadily and eventually reached 90% of the neighbors. McKibben relates some remarkable things that occurred as a result. Now the idea is spreading quickly and gave rise to that within two years “reached thirteen thousand households, participating in more than a hundred neighborhood forums…” That number has now grown to 33,000 households. FrontPorchForum describes itself as a free community-building service. Your neighborhood’s forum is only open to the people who live there. It’s all about helping neighbors connect. FrontPorchForum  makes it easy for anyone to create a forum for their own neighborhood or group.

My 2012 U.S. Tour

I’m planning a tour of the U.S. that will begin sometime in March and take me through the southern tier of states from California to Florida, then up the eastern seaboard. I hope to balance work with leisure and will be conducting a few workshops, presentations, and consultations along the way.

I’ll be spending some time in Tucson, then commence the tour from there. On the docket so far are a presentation and workshop to be held in San Diego, March 19 and 20, and a presentation at the Public Banking in America Conference in Philadelphia, April 27–28. That event is a “response to the growing demand for monetary and banking reform in the public interest,” and is being sponsored by The Public Banking Institute.

If you would like me to consider making a stop in your area, please contact me.

Let’s make 2012 the breakthrough year we’ve all been hoping for.

#     #     #

No more Freedom Watch on Fox News-Judge Napolitano fired

Judge Andrew Napolitano has been a champion for freedom and the Constitution, and an outspoken critic of the government which has far overstepped its bounds. That seems to have been too much for the oligarchs and their corporate minions at Fox News. Watch this video.


The Occupy movement at risk from violent protesters

In a previous post (Who Will occupy Whom? A Warning for OWS) I warned about threats to the occupy movement and suggested a general strategy for achieving popular empowerment, peace, justice, and personal freedom. That post was prompted by, and included, an insightful article by Richard K. Moore. This one is stimulated by an article by Chris Hedges that highlights a more immediate threat that has recently developed in Oakland and elsewhere. That threat appears in the form of violent mob action that goes under the rubric of The Black Bloc. According to Wikipedia, “The Black Bloc is sometimes incorrectly reported as being the name of a specific anarchist group. It is, rather, a tactic that may be adopted by groups of various motivations and methods.” Those methods include violent confrontation with authority and destruction of property, tactics that play right into the hands of domineering oligarchs intent of preserving their privilege and hold on power. No doubt, the actions of many Black Bloc protesters are motivated by their ardently held, though misguided, ideology, but it seems likely that there are among their leadership agents provocateur who are intent on helping to maintain the present power structure by discrediting any opposition to it.

The media have generally characterized these anarchist actions as being part of the Occupy movement, but as Chris Hedges points out in his article, The Cancer in Occupy, The Black Bloc is no friend to the Occupy movement which began as peaceful expressions of discontent with the status quo, and is hopefully maturing into a progressive movement toward popular empowerment. Hedges calls the Black Bloc anarchists “the cancer of the Occupy movement,” and I’m inclined to agree. One feature of the Black Bloc protesters, and the basis for the name, is that they dress in black clothing and use ski masks, scarves, sun glasses, and other means to obscure their faces. But anonymity and concealment are antithetical to civil society and are more likely to enable criminal and anti-social activity rather than protection for the legitimate assertion of people’s rights.

Any movement will eventually develop factions that diverge on the basis of philosophy, goals, strategies and tactics. The mainstream of the Occupy movement must find ways to distance itself from such groups and tactics because, as Hedges points out, “Once the Occupy movement is painted as a flag-burning, rock-throwing, angry mob we are finished. If we become isolated we can be crushed.” One way to preserve the legitimacy of the movement is to insist on openness and transparency. If that can be expressed strongly enough, it might preserve in the public mind the identity of Occupy as a benign and creative force.

I believe that the ends are inherent in the means and that, “we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.” (Ephesians 6:12, KJV). The Occupy movement must move toward disciplined organization and employ tactics that are at once compassionate and effective, tactics that even progressives who work within the establishment can embrace. It must be a form of organization that relies not on power hierarchies, but on solidarity and consensus within small communities of peers organized into large networks than can enable concerted action.

The real threat to the powers that be, (and the most promising path toward our goals) is intelligent, non-violent, empowering actions that make them and their systems irrelevant.

The way forward, as I see it, is to assert our fundamental rights and to organize better ways of providing for our basic needs. Yes, there will be adverse consequences, but ultimately right will prevail. I am reminded of a scene from the film Gandhi, in which the mahatma leads a large number of people on a march to the sea—to make salt. Why was that a revolutionary act? Because the British government had a “legal” monopoly that forced people in India to buy their salt from that single source. What a patent absurdity, to tell people that they are prohibited from making their own salt. What a gross infringement of basic human rights!

But people everywhere today suffer under equally absurd “laws” that force people to rely upon banking cartels to provide government-approved forms of money to enable the exchange of the goods and services we all need. In some places, competing forms of currency and financing alternatives are prohibited outright, in others they are impeded by onerous taxation and reporting requirements. But ultimately, the people will reclaim the credit commons and free themselves from oppressive systems of money and finance. I urge you again to heed the prescriptions outlined in my book, The End of Money and the Future of Civilization.

Viva la revolución pacífica!


Another (more honest) take on the economy

In his recent article that appeared in Counterpunch, Paul Craig Roberts, tells the story of the American economy as it really is.–t.h.g.

February 01, 2012

The Emperor Has No Clothes.  Economics 101


Last Friday (January 27) the US Bureau of Economic Analysis announced its advance estimate that in the last quarter of 2011 the economy grew at an annual rate of 2.8% in real inflation-adjusted terms, an increase from the annual rate of growth in the third quarter.

Good news, right?

Wrong.  If you want to know what is really happening, you must turn to John Williams at

What the presstitute media did not tell us is that almost the entire gain In GDP growth was due to “involuntary inventory build-up,” that is, more goods were produced than were sold.

Net of the unsold goods, the annualized real growth rate was eight-tenths of one percent.

And even that tiny growth rate is an exaggeration, because it is deflated with a measure of inflation that understates inflation. The US government’s measure of inflation no longer measures a constant standard of living.  Instead, the government’s inflation measure relies on substitution of cheaper goods for those that rise in price. In other words, the government holds the measure of inflation down by measuring a declining standard of living. This permits our rulers to divert cost-of-living-adjustments that should be paid to Social Security recipients to wars of aggression, police state, and banker bailouts.

When the methodology that measures a constant standard of living is used to deflate nominal GDP, the result is a shrinking US economy. It becomes clear that the US economy has had no recovery and has now been in deep recession for four years despite the proclamation by the National Bureau of Economic Research of a recovery based on the rigged official numbers.

A government can always produce the illusion of economic growth by underestimating the rate of inflation. There is no question that a substitution-based measure of inflation understates the inflation that people experience. More proof that there has been no economic recovery is available from those data series that are unaffected by inflation. If the economy were in fact recovering, these date series would be picking up. Instead, they are flat or declining, as John Williams demonstrates.

For example, according to the government’s own data, payroll employment in December 2011 is less than in 2001. Meanwhile, there has been a decade of population growth. The presstitute media calls the alleged economic recovery a “jobless recovery,” which is a contradiction in terms. There can be no recovery without a growth in employment and consumer income.

Real average weekly earnings (deflated by the government’s CPI-W) have never recovered their 1973 peak. Real median household income (deflated by the government’s CPI-U) has not recovered its 2001 peak and is below the 1969 level. If earnings were deflated by the original methodology instead of by the new substitution-based methodology, the picture would be bleaker.

Consumer confidence shows no recovery and is far below the level of a decade ago.

How does an economy recover without a recovery in consumer confidence?

Housing starts have remained flat since 2009 and are  below their previous peak.

Retail sales are  below the index level of January 2000.

Industrial production remains  below the index level of January 2000.

To repeat, the only indicator of economic recovery is the GDP deflated with an understated measure of inflation.

The US economy cannot recover, because the US economy depends on consumer expenditures for more than 70% of its activity. The offshoring of middle class jobs has stopped the rise in middle class income and caused a drop in consumer spending power.

The Federal Reserve under Alan Greenspan compensated for the absence of US consumer income growth with a policy of easy credit and a policy of driving up home prices with low interest rates. This policy allowed people to refinance their homes and to spend the inflated equity in their homes that Greenspan’s policy created.

In other words, an increase in consumer indebtedness and dissavings drove the economy in the place of the missing growth in consumer incomes.

Today, consumers are too indebted to borrow, and banks are too insolvent to lend. Therefore, there is no possibility of further debt expansion as a substitute for real income growth. An offshored economy is a dead and exhausted economy.

The consequences of a dead economy when the government is wasting trillions of dollars in wars of naked aggression and in bailouts of fraudulent financial institutions is a government budget that can only be financed by printing money.

The consequence of printing money when jobs have been moved offshore is an inflationary depression. This catastrophe could begin to unfold this year or in 2013. If Europe’s problems worsen, flight into dollars could delay sharp rises in US inflation until 2014.

The emperor has no clothes, and sooner or later this will be recognized.

PAUL CRAIG ROBERTS was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury.  His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached through his website