The Exact Moment the United States Congress Took a Knee


Posted originally on the CTH on April 8, 2023 | Sundance

Read this as many times as needed to contemplate the nature of our problem.

Former FBI Director James Comey openly admitted to Congress on March 20, 2017, how the FBI, FBI Counterintelligence Division, DOJ and DOJ-National Security Division, together with the Office of the Director of National Intelligence (ODNI) and the CIA, had been conducting independent investigations of Donald Trump for over a year without informing Congress [the Gang of Eight]. When asked the question, Comey winced, then justified the lack of informing Go8 oversight by saying, “um, because of the sensitivity of the matter?

Stupidly, Congress never pressed James Comey on that issue. The arrogance of Comey was astounding, and the acceptance by Congress was infuriating. However, that specific example highlighted just how politically corrupt the system had become. In essence, Team Obama usurped the entire design of congressional oversight…. and Congress just brushed it off.

This event, and everything in the background as outlined within the James Comey admission, factually happened.  It is on the record, admitted and nothing about the reality of what took place is subject to conjecture or refute.

Yet somehow, we, specifically our Congress, just moved on as if what FBI Director James Comey outlined and admitted wasn’t a total usurpation of the U.S. Constitution and a collapse in the structure of our coequal branches of government.

We cannot fight our way through the issues until we first realize what lies at the root of the problem.

Barack Obama and Eric Holder did not create a weaponized DOJ and FBI; the institutions were already weaponized by the Patriot Act.  What Obama and Holder did was take the preexisting system and retool it, so the weapons of government only targeted one side of the political continuum.

This point is where many people understandably get confused.

Elevator Speech:

(1) The Patriot Act turned the intel surveillance radar from foreign searches for terrorists to domestic searches for terrorists.

(2) Obama/Biden then redefined what is a “terrorist” to include their political opposition.

In the era shortly after 9/11, the DC national security apparatus, instructed by Vice President Dick Cheney, was constructed to preserve continuity of government and simultaneously view all Americans as potential threats. The Department of Homeland Security (DHS) and the Office of the Director of National Intelligence (ODNI) were created specifically for this purpose.

After 9/11/01, the electronic surveillance system that was originally created to monitor threats from abroad was retooled to monitor threats inside our country.  That is when all of our electronic ‘metadata’ came under federal surveillance.

That inflection point, and the process that followed, was exactly what Edward Snowden tried to point out.

What Barack Obama and Eric Holder did with that new construct was refine the internal targeting mechanisms so that only their political opposition became the target of this new national security system.

The problems we face now as a country are directly an outcome of two very distinct points that were merged by Barack Obama. (1) The post 9/11 monitoring of electronic communication of American citizens; and (2) Obama’s team creating a fine-tuning knob that it focused on the politics of the targets.  This is very important to understand as you dig deeper into this research outline.

Washington DC created the modern national security apparatus immediately and hurriedly after 9/11/01.  The Department of Homeland Security came along in 2002, and within the Intelligence Reform and Terrorism Prevention Act of 2004, the Office of the Director of National Intelligence (ODNI) was formed.

When President Barack Obama and Attorney General Eric Holder arrived a few years later, those newly formed institutions were viewed as opportunities to create a very specific national security apparatus that would focus almost exclusively against their political opposition.

The preexisting Federal Bureau of Investigation (FBI) and Dept of Justice (DOJ) were then repurposed to become two of the four pillars of the domestic national security apparatus – a domestic surveillance state. However, this new construct would have a targeting mechanism based on political ideology.

The DHS, ODNI, DOJ and FBI became the four pillars of this new institution. Atop these pillars is where you will find the Fourth Branch of Government.

We were not sleeping when this happened, we were wide awake. However, we were stunningly distracted by the economic collapse that was taking place in 2006 and 2007 when the engineers behind Obama started to assemble the design. By the time Obama took office in 2009, we sensed something profound was shifting, but we can only see exactly what shifted in the aftermath. The four pillars were put into place, and a new Fourth Branch of Government was quietly created.

As time passed, and the system operators became familiar with their new tools, technology allowed the tentacles of the system to reach out and touch us. That is when we first started to notice that something very disconcerting was happening. Those four pillars are the root of it, and if we take the time to understand how the Fourth Branch originated, questions about this current state of perpetual angst will start to make sense.

If we take the modern construct, originating at the speed of technological change, we can also see how the oversight or “check/balance” in our system of government became functionally obsolescent.

After many years of granular research about the intelligence apparatus inside our government, in the summer of 2020 I visited Washington DC to ask specific questions. My goal was to go where the influence agents within government actually operate, and to discover the people deep inside the institutions no one elected, and few people pay attention to.

It was during this process when I discovered how information is purposefully put into containment silos; essentially a formal process to block the flow of information between agencies and between the original branches. While frustrating to discover, the silo effect was important because understanding the communication between networks leads to our ability to reconcile conflict between what we perceive and what’s actually taking place.

After days of research and meetings in DC during 2020; amid a town that was serendipitously shut down due to COVID-19; I found a letter slid under the door of my room in a nearly empty hotel with an introduction of sorts. The subsequent discussions were perhaps the most important. After many hours of specific questions and answers on specific examples, I realized why our nation is in this mess. That is when I discovered the fourth and superseding branch of government, the Intelligence Branch.

The Intelligence Branch is an independent functioning branch of government, it is no longer a subsidiary set of agencies within the Executive Branch as most would think. To understand the Intelligence Branch, we need to drop the elementary school civics class lessons about three coequal branches of government and replace that outlook with the modern system that created itself.

The Intelligence Branch functions much like the State Dept, through a unique set of public-private partnerships that support it. Big Tech industry collaboration with intelligence operatives [Google, Microsoft, Facebook, Meta, Instagram, Twitter, etc] is part of that functioning, almost like NGOs. However, the process is much more important than most think. In this problematic perspective of a corrupt system of government, the process is the flaw – not the outcome.

There are people making decisions inside this little known, unregulated and out-of-control branch of government that impact every facet of our lives.

None of the people operating deep inside the Intelligence Branch were elected; and our elected representative House members genuinely do not know how the system works. I assert this position affirmatively because I have talked to House and Senate staffers, including the chiefs of staff for multiple House & Senate committee seats. They are not malicious people; however, they are genuinely clueless of things that happen outside their silo. That is part of the purpose of me explaining it, with examples, in full detail with sunlight.

We begin….

In April of 2016, the FBI launched a counterintelligence operation against presidential candidate Donald Trump. The questioning about that operation is what New York Representative Elise Stefanik cites in March of 2017, approximately 11 months later (First Two Minutes).

Things to note:

♦ Notice how FBI Director James Comey just matter-of-factly explains no one outside the DOJ was informed about the FBI operation. Why? Because that’s just the way things are done. His justification for unilateral operations was “because of the sensitivity of the matter“, totally ignoring any constitutional or regulatory framework for oversight; because, well, quite simply, there isn’t any. The intelligence apparatus inside the DOJ/FBI can, and does, operate based on their own independent determinations of authority.

♦ Notice also how FBI Director Comey shares his perspective that informing the National Security Council (NSC) is the equivalent of notifying the White House. The FBI leadership expressly believe they bear no responsibility to brief the Chief Executive. As long as they tell some unknown, unelected, bureaucratic entity inside the NSC, their unwritten responsibility to inform the top of their institutional silo is complete. If the IC wants to carve out the Oval Office, they simply plant information inside the NSC and, from their perspective, their civic responsibility to follow checks-and-balances is complete. This is an intentional construct.

♦ Notice how Comey obfuscates notification to the Director of National Intelligence (DNI), by avoiding the fact James Clapper was the DNI from outset of the counterintelligence operation throughout the remainder of Obama’s term. When I get deeper into the process, we will understand how the Intelligence Branch has intentionally used the creation of the DNI position (established post 9/11/01) as a method to avoid oversight, not enhance it. Keeping an oblivious doofus like James Clapper in position held strategic value [Doofus Reminder HERE].

That video of James Comey being questioned by Elise Stefanik was the first example given to me by someone who knew the background of everything that was taking place preceding that March 20, 2017, hearing. That FBI reference point is a key to understand how the Intelligence Branch operates with unilateral authority above Congress (legislative branch), above the White House (executive branch), and even above the court system (judicial branch).

Also, watch this short video of James Clapper, because it is likely many readers have forgotten, and likely even more readers have never seen it. Watch closely how then White House national security adviser John Brennan is responding in that video. This is before Brennan became CIA Director, this is when Brennan was helping Barack Obama put the pillars into place. WATCH:

[Sidebar: Every time I post this video it gets scrubbed from YouTube (example), so save it if you ever want to see it again.]

The video of James Clapper highlights how the ODNI position (created with good national security intention) ended up becoming the fulcrum for modern weaponization, and is now an office manipulated by agencies with a vested interest in retaining power. The Intelligence Branch holds power over the ODNI through their influence and partnership with the body that authorizes the power within it, the Senate Select Committee on Intelligence (SSCI).

Factually, the modern intelligence apparatus uses checks and balances in their favor. The checks create silos of proprietary information, classified information, vaults of information that work around oversight issues. The silos, which include the exploitation of the Foreign Intelligence Surveillance Court (FISA Court, or FISC) are part of the problem.

Ironically, the Office of the Director of National Intelligence was created in the aftermath of 9/11/01 expressly to eliminate the silos of information which they felt led to a domestic terrorist attack that could have been prevented. The ODNI was created specifically upon the recommendation of the 9/11 commission.

The intent was to create a central hub of intelligence information, inside the Executive Branch, where the CIA, NSA, DoD, DoS, and DIA could deposit their unique intelligence products and a repository would be created so that domestic intelligence operations, like the DOJ and FBI could access them when needed to analyze threats to the U.S. This, they hoped, would ensure the obvious flags missed in the 9/11 attacks would not be missed again.

However, the creation of the DNI office also created an unconstitutional surveillance system of the American people.  The DNI office became the tool to take massive amounts of data and use it to target specific Americans.  Weaponizing the DNI office for political targeting is now the purpose of the DNI office as it exists.

The illegal and unlawful nature of the surveillance creates a need for careful protection amid the group who operate in the shadows of electronic information and domestic surveillance. You will see how it was critical to install a person uniquely skilled in being an idiot, James Clapper, into that willfully blind role while intelligence operatives worked around the office to assemble the Intelligence Branch of Government.

• The last federal budget that flowed through the traditional budgetary process was signed into law in September of 2007 for fiscal year 2008 by George W. Bush. Every budget since then has been a fragmented process of continuing resolutions and individual spending bills.

Why does this matter? Because many people think defunding the Intelligence Community is a solution; it is not…. at least, not yet. Worse yet, the corrupt divisions deep inside the U.S. intelligence system can now fund themselves from multinational private sector partnerships (banks, corporations and foreign entities).

• When Democrats took over the House of Representatives in January 2007, they took office with a plan. Nancy Pelosi became Speaker, and Democrats controlled the Senate where Harry Reid was Majority Leader. Barack Obama was a junior senator from Illinois.

Pelosi and Reid intentionally did not advance a budget in 2008 (for fiscal year 2009) because their plan included installing Barack Obama (and all that came with him) with an open checkbook made even more lucrative by a worsening financial crisis and a process called baseline budgeting. Baseline budgeting means the prior fiscal year budget is accepted as the starting point for the next year budget. All previous expenditures are baked into the cake within baseline budgeting.

Massive bailouts preceded Obama’s installation due to U.S. economic collapse, and massive bailouts continued after his installation. This is the ‘never let a crisis go to waste’ aspect. TARP (Troubled Asset Recovery Program), auto bailouts (GM), and the massive stimulus spending bill, the American Recovery and Reinvestment Act (ARRA, ie. those shovel ready jobs) were all part of the non-budget spending. The federal reserve assisted with Quantitative Easing (QE1 and QE2) as congress passed various Porkulous spending bills further spending and replacing the formal budget process.

Note: There has never been a budget passed in the normal/traditional process since September of 2007.

• While Obama’s radical ‘transformation‘ was triggered across a broad range of government institutions, simultaneously spending on the U.S. military was cut, but spending on the intelligence apparatus expanded. We were all distracted by Obamacare, and the Republican Party wanted to keep us that way. However, in the background there was a process of transformation taking place that included very specific action by Eric Holder and targeted effort toward the newest executive agency the ODNI.

The people behind Obama, those same people now behind Joe Biden, knew from years of strategic planning that ‘radical transformation’ would require control over specific elements inside the U.S. government. Eric Holder played a key role in his position as U.S. Attorney General in the DOJ.

AG Holder recruited ideologically aligned political operatives who were aware of the larger institutional objectives. One of those objectives was weaponizing the DOJ-National Security Division (DOJ-NSD) a division inside the DOJ that had no inspector general oversight. For most people the DOJ-NSD weaponization surfaced with a hindsight awakening of the DOJ-NSD targeting candidate Donald Trump many years later. However, by then the Holder crew had executed almost eight full years of background work.

• The second larger Obama/Holder objective was control over the FBI. Why was that important? Because the FBI does the domestic investigative work on anyone who needs or holds a security clearance. The removal of security clearances could be used as a filter to further build the internal ideological army they were assembling. Additionally, with new power in the ODNI created as a downstream consequence of the Patriot Act, new protocols for U.S. security clearances were easy to justify.

Carefully selecting fellow ideological travelers was facilitated by this filtration within the security clearance process. How does that issue later manifest? Just look around at how politicized every intelligence agency has become, specifically including the FBI.

• At the exact same time this new background security clearance process was ongoing, again everyone distracted by the fight over Obamacare, inside the Department of State (Secretary Hillary Clinton) a political alignment making room for the next phase was being assembled. Names like Samantha Power, Susan Rice and Hillary Clinton were familiar on television while Lisa Monaco worked as a legal liaison between the Obama White House and Clinton State Department.

Through the Dept of State (DoS) the intelligence apparatus began working on their first steps to align Big Tech with a larger domestic institutional objective. Those of you who remember the “Arab Spring”, some say “Islamist Spring”, will remember it was triggered by Barack Obama’s speech in Cairo – his first foreign trip. The State Department worked with grassroots organizers (mostly Muslim Brotherhood) in Egypt, Syria, Bahrain, Qatar and Libya. Obama leaned heavily on the organizational network of Turkish President Recep Erdogan for contacts and support.

Why does this aspect matter to us? Well, you might remember how much effort the Obama administration put into recruiting Facebook and Twitter as resources for the various mideast rebellions the White House and DoS supported. This was the point of modern merge between the U.S. intelligence community and Big Tech social media.

In many ways, the coordinated political outcomes in Libya and Egypt were the beta test for the coordinated domestic political outcomes we saw in the 2020 U.S. presidential election. The U.S. intelligence community working with social media platforms and political operatives.

Overlaying all of that background activity was also a new alignment of the Obama-era intelligence apparatus with ideological federal “contractors“. Where does this contractor activity manifest? In the FISA Court opinion of Rosemary Collyer who cited the “interagency memorandum of understanding”, or MOU.

Hopefully, you can see a small part of how tentacled the system to organize/weaponize the intelligence apparatus was. None of this was accidental, all of this was by design, and the United States Senate was responsible for intentionally allowing most of this to take place.  The tools the government used to monitor threats were now being used to monitor every American.  WE THE PEOPLE were now the threat the national security system was monitoring.

That’s the 30,000/ft level backdrop history of what was happening as the modern IC was created. Next, we will go into how all these various intelligence networks began working in unison and how they currently control all of the other DC institutions under them; including how they can carve out the President from knowing their activity.

♦ When Barack Obama was installed in January 2009, the Democrats held a 60-seat majority in the U.S. Senate. As the people behind the Obama installation began executing their longer-term plan, the Senate Select Committee on Intelligence was a tool to create the Intelligence Branch; it was not an unintentional series of events.

When Obama was installed, Dianne Feinstein was the Chair of the Senate Select Committee on Intelligence (SSCI), and Democrat operative Dan Jones was her lead staffer. Feinstein was completely controlled by those around her including Senate Majority Leader Harry Reid. The CIA was in the process of turning over personnel following the Bush era, and as a result of a massive multi-year narrative of diminished credibility (Iraq WMD), a deep purge was underway. Obama/Holder were in the process of shifting intelligence alignment and the intensely political Democrat Leader Harry Reid was a key participant.

THE TRAP – Many people say that Congress is the solution to eliminating the Fourth and superseding Branch of Government, the Intelligence Branch. This is an exercise in futility because the Legislative Branch, specifically the SSCI, facilitated the creation of the Intelligence Branch. The SSCI cannot put the genie they created back in the bottle without admitting they too are corrupt; and the background story of their corruption is way too intense to be exposed now.

Every member of the SSCI is compromised in some controlling manner. Those Senators who disliked the control over them; specifically disliked because the risk of sunlight was tenuous and, well, possible; have either left completely or stepped down from the committee. None of the SSCI members past or present would ever contemplate saying openly what their tenure involved.

[Note: You might remember when Vice Chairman Mark Warner’s text messages surfaced, there was a controlled Republican SSCI member who came to his defense in February of 2018. It was not accidental that exact Senator later became the chair of the SSCI himself. That Republican Senator is Marco Rubio, now vice-chair since the Senate re-flipped back to the optics of Democrat control in 2021.]

All of President Obama’s 2009 intelligence appointments required confirmation from the Senate. The nominees had to first pass through the Democrat controlled SSCI, and then to a full Senate vote where Democrats held a 60-vote majority. Essentially, Obama got everyone he wanted in place easily. Rahm Emmanuel was Obama’s Chief of Staff, and Valerie Jarrett was Senior Advisor.

Tim Geithner was Treasury Secretary in 2010 when the joint DOJ/FBI and IRS operation to target the Tea Party took place after the midterm “shellacking” caused by the Obamacare backlash. Mitch McConnell was Minority Leader in the Senate but supported the targeting of the Tea Party as his Senate colleagues were getting primaried by an angry and effective grassroots campaign. McConnell’s friend, Senator Bob Bennett, getting beaten in Utah was the final straw.

Dirty Harry and Mitch McConnell saw the TEA Party through the same prism. The TEA Party took Kennedy’s seat in Massachusetts (Scott Brown); Sharon Angle was about to take out Harry Reid in Nevada; Arlen Spector was taken down in Pennsylvania; Senator Robert Byrd died; Senator Lisa Murkowski lost her primary to Joe Miller in Alaska; McConnell’s nominee Mike Castle lost to Christine O’Donnell in Delaware; Rand Paul won in Kentucky. This is the background. The peasants were revolting…. and visibly angry Mitch McConnell desperately made a deal with the devil to protect himself.

In many ways, the TEA Party movement was/is very similar to the MAGA movement. The difference in 2010 was the absence of a head of the movement, in 2015 Donald Trump became that head figure who benefited from the TEA Party energy. Trump came into office in 2017 with the same congressional opposition as the successful TEA Party candidates in 2011.

Republicans took control of the Senate following the 2014 mid-terms. Republicans took control of the SSCI in January 2015. Senator Richard Burr became chairman of the SSCI, and Dianne Feinstein shifted to Vice-Chair. Dirty Harry Reid left the Senate, and Mitch McConnell took power again.

Republicans were in control of the Senate Intelligence Committee in 2015 when the Intelligence Branch operation against candidate Donald Trump was underway. [Feinstein’s staffer, Dan Jones, left the SSCI so he could act as a liaison and political operative between private-sector efforts (Fusion GPS, Chris Steele) and the SSCI.] The SSCI was a participant in that Fusion GPS/Chris Steele operation, and as a direct consequence Republicans were inherently tied to the problem with President Trump taking office in January of 2017. Indiana Republican Senator Dan Coats was a member of the SSCI.

Bottom line…. When it came to the intelligence system targeting Donald Trump during the 2015/2016 primary, the GOP was just as much at risk as their Democrat counterparts.

When Trump unexpectedly won the 2016 election, the SSCI was shocked more than most. They knew countermeasures would need to be deployed to protect themselves from any exposure of their prior intelligence conduct.  Immediately Senator Dianne Feinstein stepped down from the SSCI, and Senator Mark Warner was elevated to Vice Chairman.

Indiana’s own Mike Pence, now Vice President, recommended fellow Hoosier, SSCI Senator Dan Coats, to become President Trump’s Director of National Intelligence (ODNI). [Apply hindsight here]

• To give an idea of the Intelligence Branch power dynamic, remind yourself how House Permanent Select Committee on Intelligence (HPSCI), Chairman Devin Nunes, tried to get access to the DOJ/FBI records of the FISA application used against the Trump campaign via Carter Page.

Remember, Devin Nunes only saw a portion of the FISA trail from his review of a Presidential Daily Brief (PDB) previously given to President Obama. Chairman Nunes had to review the PDB at the White House SCIF due to compartmented intelligence, another example of the silo benefit.

Remember the massive stonewalling and blocking of the DOJ/FBI toward Nunes? Remember the back-and-forth battle over declassification surrounding the Nunes memo?

Remember, after Nunes went directly to House Speaker Paul Ryan for help (didn’t get any), the DOJ only permitted two members from each party within the HPSCI to review the documents, and only at the DOJ offices of main justice?

Contrast that amount of House Intel Committee railroading by intelligence operatives in the DOJ, DOJ-NSD and FBI, with the simple request by Senate Intelligence Vice Chairman Mark Warner asking to see the Carter Page FISA application and immediately a copy being delivered to him on March 17th 2017.

Can you see which intelligence committee is aligned with the deepest part of the deep state?

Oh, how quickly we forget:

The contrast of ideological alignment between the House, Senate and Intelligence Branch is crystal clear when viewed through the prism of cooperation. You can see which legislative committee holds the power and support of the Intelligence Branch. The Senate Intel Committee facilitates the corrupt existence of the IC Branch, so the IC Branch only cooperates with the Senate Intel Committee. It really is that simple.

• The Intelligence Branch carefully selects its own members by controlling how security clearances are investigated and allowed (FBI). The Intelligence Branch also uses compartmentalization of intelligence as a way to keep each agency, and each downstream branch of government (executive, legislative and judicial), at arm’s length as a method to stop anyone from seeing the larger picture of their activity. I call this the “silo effect“, and it is done by design.

I have looked at stunned faces when I presented declassified silo product from one agency to the silo customers of another. You would be astonished at what they don’t know because it is not in their ‘silo’.

Through the advice and consent rules, the Intelligence Branch uses the SSCI to keep out people they consider dangerous to their ongoing operations. Any appointee to the intelligence community must first pass through the Senate Select Committee on Intelligence, before they get a full Senate vote. If the SSCI rejects the candidate, they simply refuse to take up the nomination. The president is then blocked from that appointment. This is what happened with President Trump over and over again.

• Additionally, the Intelligence Branch protects itself, and its facilitating allies through the formal classification process. The Intelligence Branch gets to decide unilaterally what information will be released and what information will be kept secret. There is no entity outside the Intelligence Branch, and yes that includes the President of the United States, who can supersede the classification authority of the Intelligence Branch. {Go Deep} and {Go Deep} This is something 99.9% of the people on our side get totally and frustratingly wrong.

No one can declassify, or make public, anything the Intelligence Branch will not agree to. Doubt this? Ask Ric Grenell, John Ratcliffe, or even President Trump himself.

• The classification process is determined inside the Intelligence Branch, all by themselves. They get to choose what rank of classification exists on any work product they create; and they get to decide what the classification status is of any work product that is created by anyone else. The Intelligence Branch has full control over what is considered classified information and what is not. The Intelligence Branch defines what is a “national security interest” and what is not. A great technique for hiding fingerprints of corrupt and illegal activity.

[For familiar reference see the redactions to Lisa Page and Peter Strzok text messages. The Intelligence Branch does all redactions.]

• Similarly, the declassification process is a request by an agency, even a traditionally superior agency like the President of the United States, to the Intelligence Branch asking for them to release the information. The Intelligence Branch again holds full unilateral control.

If the head of the CIA refuses to comply with the declassification instruction of the President, what can the president do except fire him/her? {Again, GO DEEPHow does the President replace the non-compliant cabinet member? They have to go through the SSCI confirmation. See the problem?

Yes, there are ways to break up the Intelligence Branch, but they do not start with any congressional effort. As you can see above, the process is the flaw – not the solution. Most conservative pundits have their emphasis on the wrong syllable. Their cornerstone is false.

For their own self-preservation, the Intelligence Branch has been interfering in our elections for years. The way to tear this apart begins with STATE LEVEL election reform that blocks the Legislative Branch from coordinating with the Intelligence Branch.

The extreme federalism approach is critical and also explains why Joe Biden has instructed Attorney General Merrick Garland to use the full power of the DOJ to stop state level election reform efforts. The worry of successful state level election control is also why the Intelligence Branch now needs to support the federal takeover of elections.

Our elections have been usurped by the Intelligence Branch. Start with honest elections and we will see just how much Democrat AND Republican corruption is dependent on manipulated election results. Start at the state level. Start there…. everything else is downstream.

♦ COLLAPSED OVERSIGHT – The modern system to ‘check’ the Executive Branch was the creation of the legislative “Gang of Eight,” a legislative oversight mechanism intended to provide a bridge of oversight between the authority of the intelligence community within the Executive Branch.

The Go8 construct was designed to allow the President authority to carry out intelligence operations and provide the most sensitive notifications to a select group within Congress.

The Go8 oversight is directed to the position, not the person, and consists of: (1) The Speaker of the House; (2) The Minority Leader of the House; (3) The Chair of the House Permanent Select Committee on Intelligence, HPSCI; (4) The Ranking Member (minority) of the HPSCI; (5) The Leader of the Senate; (6) The Minority Leader of the Senate; (7) The Chair of the Senate Select Committee on Intelligence, SSCI; and finally (8) the Vice-Chair of the SSCI.

Example: When the Chief Executive (the President) initiates an intelligence operation on behalf of the United States, the President triggers a “finding memo.” In essence, the instruction to the intel agency or agencies to authorize a covert operation. When that process takes place, the Go8 are the first people notified. Depending on the sensitivity of the operation, sometimes the G08 are notified immediately after the operation is conducted. The notification can be a phone call or an in-person briefing.

Because of the sensitivity of their intelligence information, the Gang of Eight hold security clearances that permit them to receive and review all intelligence operations. The intelligence community are also responsible for briefing the Go8 with the same information they use to brief the President.

~ 2021 Gang of Eight ~

The Go8 design is intended to put intelligence oversight upon both political parties in Congress; it is designed that way by informing the minority leaders of both the House and Senate as well as the ranking minority members of the SSCI and HPSCI. Under the concept, the President cannot conduct an intelligence operation; and the intelligence community cannot carry out intelligence gathering operations without the majority and minority parties knowing about it.

The modern design of this oversight system was done to keep rogue and/or corrupt intelligence operations from happening. However, as we shared in the preview to this entire discussion, the process was usurped during the Obama era. {GO DEEP}

Former FBI Director James Comey openly admitted to Congress on March 20, 2017, that the FBI, FBI Counterintelligence Division, DOJ and DOJ-National Security Division, together with the Office of the Director of National Intelligence (ODNI) and the CIA, had been conducting independent investigations of Donald Trump for over a year without informing the Go8. Comey justified the lack of informing Go8 oversight by saying, “because of the sensitivity of the matter.”

Stupidly, Congress never pressed James Comey on that issue. The arrogance was astounding, and the acceptance by Congress was infuriating. However, that specific example highlighted just how politically corrupt the system had become. In essence, Team Obama usurped the entire design of congressional oversight…. and Congress just brushed it off.

Keep in mind, Comey did not say the White House was unaware; in fact he said exactly the opposite, he said, “The White House was informed through the National Security Council,” (the NSC). The unavoidable implication and James Comey admission that everyone just brushed aside, was that President Obama’s National Security Advisor, Susan Rice, was informed of the intelligence operation(s) against Donald Trump. After all, the NSC reports to the National Security Advisor.

Does the January 20, 2017, Susan Rice memo look different now?

Again, no one saw the immediate issue. What Comey just described on that March Day in 2017 was the usurpation of the entire reason the Gang of Eight exists; to eliminate the potential for political weaponization of the Intelligence Community by the executive branch. The G08 notifications to the majority and minority are specifically designed to make sure what James Comey admitted to doing was never supposed to happen.

Team Obama carried out a political operation using the intelligence community and the checks-and-balances in the system were intentionally usurped. This is an indisputable fact.

Worse still, the entire legislative branch of Congress, which then specifically included the Republicans that now controlled the House and Senate, did nothing. They just ignored what was admitted. The usurpation was willfully ignored.

The mechanism of the G08 was bypassed without a twitch of condemnation or investigation…. because the common enemy was Donald Trump.

This example highlights the collapse of the system. Obama, the Executive Branch, collapsed the system by usurping the process; in essence the process became the bigger issue, and the lack of immediate Legislative Branch reaction became evidence of open acceptance. The outcomes of the usurpation played out over the next four years, Donald J. Trump was kneecapped and lost his presidency because of it. However, the bigger issue of the collapse still exists.

The downstream consequence of the Legislative Branch accepting the Executive Branch usurpation meant both intelligence committees were compromised. Additionally, the leadership of both the House and Senate were complicit. Think about this carefully. The Legislative Branch allowance of the intelligence usurpation meant the Legislative Branch was now subservient to the Intelligence Branch.

That’s where we are.

Right now.

That’s where we are.

Term-3 Obama is now back in the White House with Joe Biden.

NOTE: Former Obama National Security aide and counsel to the President, Lisa Monaco, is in her current position as Deputy Attorney General, specifically to make sure all of these revelations do not become a legal risk to Barack Obama and the people who created them.  The SSCI confirmed Monaco for this purpose because the Senate is just as much at risk.

Term-1 and Term-2 Obama usurped the ‘check and balance‘ within the system and weaponized the intelligence apparatus. During Trump’s term that weaponization was covered up by a compliant congress, complicit senate intelligence committee, and not a single member of the oversight called it out. Now, Term-3 Obama steps back in to continue the cover up and continue the weaponization.

Hopefully, you can now see the scale of the problem that surrounds us with specific citation for what has taken place. What I just explained to you above is not conspiracy theory, it is admitted fact that anyone can look upon. Yet….

Have you seen this mentioned anywhere? Have you seen this called out by anyone in Congress? Have you seen anyone in media (ally or adversary) call this out? Have you seen any member of the Judicial Branch stand up and say wait, what is taking place is not okay? Have you seen a single candidate for elected office point this out? Have you seen anyone advising a candidate to point this out?

This is our current status. It is not deniable. The truth exists regardless of our comfort.

Not a single person in power will say openly what has taken place. They are scared of the Fourth Branch. The evidence of what has taken place is right there in front of our face. The words, actions and activities of those who participated in this process are not deniable, in fact most of it is on record.

There are only two members of the Gang of Eight who have existed in place from January 2007 (the real beginning of Obama’s term, two years before he took office when the Congress flipped). Only two members of the G08 have been consistently in place from January of 2007 to right now, today. All the others came and went, but two members of the Gang of Eight have been part of that failed and collapsed oversight throughout the past 15 years, Nancy Pelosi and Mitch McConnell.

♦ TECHNOLOGY – On a global scale – the modern intelligence gathering networks are now dependent on data collection to execute their intelligence missions. In the digital age nations have been executing various methods to gather that data. Digital surveillance has replaced other methods of interception. Those surveillance efforts have resulted in a coalescing of regional data networks based on historic multi-national relationships.

We have a recent frame of reference for the “U.S. data collection network” within the NSA. Through the allied process the Five Eyes nations all rely on the NSA surveillance database (U.K, Australia, Canada, New Zealand and U.S.) The NSA database provides the digital baseline for intelligence operations in defense of our allies. The portals into the NSA database are essentially an assembly of allies in like-minded ideological connection to the United States.

Unfortunately, there have been some revelations about the NSA database being used to monitor our allies, like in the example of Germany and surveillance on Angela Merkel’s phone. As long as “the good guys” are operating honorably, allies of the United States can feel confident about having protection from the NSA surveillance of global digital data. We warn our friends if we detect something dangerous etc.

The U.S. has nodes on communication pipelines to intercept and extract data. We have also launched hundreds, perhaps thousands, of satellites to conduct surveillance and gather up data. All of this data is fed into the NSA database where it is monitored (presumably) as a national security mechanism, and in defense of our allies.

However, what about data collection or data networks that are outside the NSA database? What do our enemies do? The NSA database is just one intelligence operation of digital surveillance amid the entire world, and we do not allow access by adversaries we are monitoring. So what do they do? What do our allies do who might not trust the United States due to past inconsistencies, ie. the Middle East?

The answers to those questions highlight other data collection networks. So, a brief review of the major players is needed.

♦ CHINA – China operates their own database. They, like the NSA, scoop up data for their system. Like us, China launches satellites and deploys other electronic data collection methods to download into their database. This is why the issues of electronic devices manufactured in China becomes problematic. Part of the Chinese data collection system involves the use of spyware, hacking and extraction.

Issues with Chinese communication company Huawei take on an added dimension when you consider the goal of the Chinese government to conduct surveillance and assemble a network of data to compete with the United States via the NSA. Other Chinese methods of surveillance and data-collection are less subversive, as in the examples of TicTok and WeChat. These are Chinese social media companies that are scraping data just like the NSA scrapes data from Facebook, Twitter and other Silicon Valley tech companies. [ Remember, the Intelligence Branch is a public-private partnership. ]

♦ RUSSIA – It is very likely that Russia operates their own database. We know Russia launches satellites, just like China and the USA, for the same purposes. Russia is also very proficient at hacking into other databases and extracting information to store and utilize in their own network. The difference between the U.S., China and Russia is likely that Russia spends more time on the hacking aspect because they do not generate actual technology systems as rapidly as the U.S. and China.

The most recent database creation is an outcome of an ally having to take action because they cannot rely on the ideology of the United States remaining consistent, as the administrations ping-pong based on ideology.

 SAUDI ARABIA – Yes, in 2016 we discovered that Saudi Arabia was now operating their own intelligence data-gathering operation. It would make sense, given the nature of the Middle East and the constant fluctuations in political support from the United States. It is a lesson the allied Arab community and Gulf Cooperation Council learned quickly when President Obama went to Cairo in 2009 and launched the Islamist Spring (Arab Spring) upon them.

I have no doubt the creation of the Saudi intelligence network was specifically because the Obama administration started supporting radical Islamists within the Muslim Brotherhood and threw fuel on the fires of extremism all over the Arab world.

Think about it., What would you do if you were Saudi Arabia, Egypt, Bahrain, Kuwait, the UAE, Jordan, Oman or Yemen and you knew the United States could just trigger an internal uprising of al-Qaeda, ISIS and the political arm of the Muslim Brotherhood to seek your destruction?

Without a doubt, those urgent lessons from 2009, 2010, 2011 triggered the formation of the Arab Intelligence Network as a network to defend itself with consistency. They assembled the network and activated it in 2017 as pictured above.

 Israel – Along a similar outlook to the Arab network, no doubt Israel operates an independent data collection system as a method of protecting itself from ever-changing U.S. politics amid a region that is extremely hostile to its very existence. Like the others, Israel launches proprietary satellites, and we can be sure they use covert methods to gather electronic data just like the U.S. and China.

As we have recently seen in the Pegasus story, Israel creates spyware programs that are able to track and monitor cell phone communications of targets. The spyware would not work unless Israel had access to some network where the phone meta-data was actually stored. So yeah, it makes sense for Israel to operate an independent intelligence database.

♦ Summary: As we understand the United States Intelligence Branch of government as the superseding entity that controls the internal politics of our nation, we also must consider that multiple nations have the same issue. There are major intelligence networks around the world beside the NSA “Five-Eyes” database. China, Russia, Saudi Arabia and Israel all operate proprietary databases deploying the same tools and techniques for assembly.

The geopolitical conflict that has always existed has now shifted into a digital battle-space. The Intelligence Agencies from these regions are now operating as the backbone of the government that uses them and has become dependent on them. [<- Reread that].

Once you accept the digital-era intelligence apparatus of China, Russia, Saudi-Arabia, The United States and Israel, are now the primary national security mechanisms for stabilization of government; then you accept the importance of those intelligence operations.

Once you understand how foundational those modern intelligence operations have become for the stability and continuity of those governments…… then you begin to understand just how the United States intelligence community became more important than the government that created it.

From that point it is then critical to understand that domestic intelligence operations are underway to monitor the electronic communication of American citizens inside our own country.  YOU are under surveillance.  The parents who confront school boards are under surveillance.  The political operatives inside the FBI are monitoring everyone who comes onto the radar, that is why the National School Boards Association asked the White House, then the DOJ, to have the FBI start targeting parents.  Are things making sense now?

♦ Public Private Partnership – The modern Fourth Branch of Government is only possible because of a Public-Private partnership with the intelligence apparatus. You do not have to take my word for it, the partnership is so brazened they have made public admissions.

The biggest names in Big Tech announced in June their partnership with the Five Eyes intelligence network, ultimately controlled by the NSA, to: (1) monitor all activity in their platforms; (2) identify extremist content; (3) look for expressions of Domestic Violent Extremism (DVE); and then, (4) put the content details into a database where the Five Eyes intelligence agencies (U.K., U.S., Australia, Canada, New Zealand) can access it.

Facebook, Twitter, Google and Microsoft are all partnering with the intelligence apparatus. It might be difficult to fathom how openly they admit this, but they do. Look at this sentence in the press release (emphasis mine):

[…] “The Group will use lists from intelligence-sharing group Five Eyes adding URLs and PDFs from more groups, including the Proud Boys, the Three Percenters and neo-Nazis.”

Think about that sentence structure very carefully. They are “adding to” the preexisting list…. admitting the group (aka Big Tech) already have access to the the intelligence-sharing database… and also admitting there is a preexisting list created by the Five Eyes consortium.

Obviously, who and what is defined as “extremist content” will be determined by the Big Tech insiders themselves. This provides a gateway, another plausible deniability aspect, to cover the Intelligence Branch from any oversight.

When the Intelligence Branch within government wants to conduct surveillance and monitor American citizens, they run up against problems due to the Constitution of the United States. They get around those legal limitations by sub-contracting the intelligence gathering, the actual data mining, and allowing outside parties (contractors) to have access to the central database.

The government cannot conduct electronic searches (4th amendment issue) without a warrant; however, private individuals can search and report back as long as they have access. What is being admitted is exactly that preexisting partnership. The difference is that Big Tech will flag the content from within their platforms, and now a secondary database filled with the extracted information will be provided openly for the Intelligence Branch to exploit.

The volume of metadata captured by the NSA has always been a problem because of the filters needed to make the targeting useful. There is a lot of noise in collecting all data that makes the parts you really want to identify more difficult to capture. This new admission puts a new massive filtration system in the metadata that circumvents any privacy protections for individuals.

Previously, the Intelligence Branch worked around the constitutional and unlawful search issue by using resources that were not in the United States. A domestic U.S. agency, working on behalf of the U.S. government, cannot listen on your calls without a warrant. However, if the U.S. agency sub-contracts to say a Canadian group, or foreign ally, the privacy invasion is no longer legally restricted by U.S. law.

What was announced in June 2021 is an alarming admission of a prior relationship along with open intent to define their domestic political opposition as extremists.

July 26 (Reuters) – A counterterrorism organization formed by some of the biggest U.S. tech companies including Facebook (FB.O) and Microsoft (MSFT.O) is significantly expanding the types of extremist content shared between firms in a key database, aiming to crack down on material from white supremacists and far-right militias, the group told Reuters.

Until now, the Global Internet Forum to Counter Terrorism’s (GIFCT) database has focused on videos and images from terrorist groups on a United Nations list and so has largely consisted of content from Islamist extremist organizations such as Islamic State, al Qaeda and the Taliban.

Over the next few months, the group will add attacker manifestos – often shared by sympathizers after white supremacist violence – and other publications and links flagged by U.N. initiative Tech Against Terrorism. It will use lists from intelligence-sharing group Five Eyes, adding URLs and PDFs from more groups, including the Proud Boys, the Three Percenters and neo-Nazis.

The firms, which include Twitter (TWTR.N) and Alphabet Inc’s (GOOGL.O) YouTube, share “hashes,” unique numerical representations of original pieces of content that have been removed from their services. Other platforms use these to identify the same content on their own sites in order to review or remove it. (read more)

The influence of the Intelligence Branch now reaches into our lives, our personal lives.

In the decades before 9/11/01 the intelligence apparatus intersected with government, influenced government, and undoubtedly controlled many institutions with it. The legislative oversight function was weak and growing weaker, but it still existed and could have been used to keep the IC in check. However, after the events of 9/11/01, the short-sighted legislative reactions opened the door to allow the surveillance state to weaponize against domestic enemies.

After the Patriot Act was triggered, not coincidentally only six weeks after 9/11, a slow and dangerous fuse was lit that ends with the intelligence apparatus being granted a massive amount of power.  Simultaneously the mission of the intelligence community now encompassed monitoring domestic threats as defined by the people who operate the surveillance system.

The problem with assembled power is always what happens when a Machiavellian network takes control over that power and begins the process to weaponize the tools for their own malicious benefit. That is exactly what the network of President Barack Obama did.

The Obama network took pre-assembled intelligence weapons (we should never have allowed to be created) and turned those weapons into political tools for his radical and fundamental change. The target was the essential fabric of our nation.

Ultimately, this corrupt political process gave power to create the Fourth Branch of Government, the Intelligence Branch. From that perspective the fundamental change was successful.

This is the scale of corrupt political compromise on both sides of the DC dynamic that we are up against.  Preserving this system is also what removing Donald Trump is all about….  The targeting of President Trump in order to preserve the system, the system that was weaponized during the Obama administration, is what the actions of the DOJ and FBI are all about.

What would powerful people in DC do to stop the American people from finding this out?

…. Including an FBI raid on Mar-a-Lago.

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FIAT – What is it Really!


Armstrong Economics Blog/Foreign Exchange Re-Posted Apr 2, 2023 by Martin Armstrong

QUESTION: Governments create their own sovereign fiat currency, to facilitate trade, among other reasons. So counterfeit is punishable, in some countries, by death, & at minimum, incarceration. Currency is supposed to be sacrosanct, created under the most exacting conditions. So what to do when your own gov’t engages in what is essentially officially endorsed counterfeit? I mean, the “money” has become almost meaningless, unless you’re on the receiving end. For non-insiders like me…buy PM.

HS

ANSWER: I have trouble with this misinformation always about the only money is gold and paper dollars are worthless fiats, which have rebuilt the world many times over since 1861 and the introduction of the paper dollar.

The propaganda of the goldbugs which has led so many to lose so much has been this nonsense that gold is the hedge against inflation. When the gold coin was money during the 19th century, it rose and fell in purchasing power no different than any paper currency. These people sell fiction like a used car salesman just to sell their product.  It honestly does not matter what money is. It always is just a derivative of barter. I give you this for that. You will accept paper money because you know that others will accept it from you. A woman tried to spend a $20 gold coin at Walmart and they refused to accept it because they did not know what it was. She then took them to the back and exchanged them for $20 bills.

Try going to Starbucks and spending a $20 gold coin and asking for change. Unless the salesperson knows what it is, they will refuse.MONEY has always been nothing more than a belief system. That’s all!

FIAT simply means by arbitrary decree. Just because a currency is gold or even silver, does NOT make its value intrinsic. Governments have debased their coinage and reduced the weight declaring its value shall be whatever they say. I have written about how Japan did that and eventually, the people refused to accept Japanese coins and they stopped minting them for 600 years.

The Romans reduced the weight of their silver coinage from 6.5 grams to 4 grams and only because they defeated the Greeks, the Roman monetary system became standard.

During the American Revolution, people accepted the Continental Currency. Money has always simply been predicated upon what people will accept.

Gold has no value whatsoever unless the other person also believes it has value. Gold or silver has no value intrinsically any more than a paper dollar or a bag of rice unless there is an unspoken agreement among people that it is a valuable medium of exchange.

This is the truth. All else is propaganda. Money has been many things throughout thousands of years from seashells to cattle and even slave girls.

StPatrick-tokens

Saint Patrick in the 5th Century AD upon his arrival in Ireland, found that MONEY was expressed in human slave girls. He wrote in his Confession, “I think that I have given away to them no less than the price of fifteen humans.” This passage shows something very important. First, MONEY is not defined as the Medium of Exchange exclusively. It also serves the purpose of a Unit of Account. This becomes the true function of MONEY even more so than what it is. MONEY is a language of value.

FIAT is when the government dictates what something is and that will be Digital Central Bank Currency. But if everyone accepts it, then it becomes the medium of exchange.

Earn Six Figures Without Working


Armstrong Economics Blog/Politics Re-Posted Mar 31, 2023 by Martin Armstrong

The US government has been on a spending spree over the past few years and there is absolutely no way they can ever pay the bill. Federal spending hit $4.45 trillion in 2019 in the wake of the pandemic, according to the Congressional Budget Office (CBO). That figure hit $6.21 trillion as of the latest report, marking a 40% uptick in four years. What has changed?  

 This goes far beyond the Ukraine fiasco. While defense spending rose 18% over the past four years, nondefense spending shot up 43% to $941 billion. Spending on Social Security and retirement increased 33% from 2019 to 2023 as the Baby Boomer generation began to exit the workforce. Retirement has become a luxury with the current cost of living and many are opting to continue working rather than retire. Yet, the mentality of hard work paying off is dwindling. The effects of the pandemic can still be felt as the workforce dynamic has changed. The supplemental unemployment income distributed freely during the pandemic has had disastrous consequences. 

Spending on food stamps has increased by 102% from $63 billion in 2019 to $127 billion in 2023. Welfare support rose 50% as well from $32 billion to $48 billion. Unemployment costs have increased 32% over the past four years, despite the record-low unemployment rate. The US spent $53 billion on educational pandemic aid and $71 billion to help failing PBGC plans. The CBO now foresees a federal budget deficit of $1.4 trillion in 2023, and this number is expected to rise. 

Biden’s Build Back Better Act pushed for the largest welfare spending in US history. It pays NOT to work in Biden’s America. According to the Heritage Foundation

"Total government spending on the average poor family will rise from $65,200 per year to more than $76,400. When limited private earnings are added to this massive government spending, combined total resources will reach nearly $94,600 per year for the average poor family."

Biden repealed some of the reforms issued by the Clintons to boost reliance on government aid. People who choose not to work are eligible for unconditional cash grants funded by working taxpaying citizens. “Taxpayers would be required to pay larger sums to support welfare recipients, but recipients would have no reciprocal obligations,” the Heritage Foundation continued. Those who decide to marry receive less funding. Mothers who have children by multiple fathers receive more funding. Traditional values are punished. Why rely on family when you have the government? 

Some states pay six figures to “low-income” families through benefits and subsidiaries. A family earning nearly a quarter million per year could still qualify for ObamaCare subsidies, and in some states, families earning $300,000 annually still qualify. Unemployment benefits plus ObamaCare subsidies for a family of four are equivalent to the national median income in 24 states. Some states offer more than others. In New Jersey, a family of four can receive benefits up to $108,000 even if no one is working.  

Welfare was supposed to be a tool to help people during times of need. It should incentivize people to get back to work. Biden is giving your money to foreign countries. He is giving your money to US citizens who chose not to work. This is clearly socialism at play, as it does not pay to work in Biden’s crumbling America. 

Are Markets Irrational or Analysts?


Armstrong Economics Blog/Forecasts Re-Posted Mar 27, 2023 by Martin Armstrong

QUESTION: Mr. Armstrong; Who is being irrational? The markets or the analysts?

KE

ANSWER: That’s simple. It is the analysts. The markets are ALWAYS correct. When you have bank failures unfolding, people will withdraw money out of caution. It is the very same reason there are ancient hoards of coins. You find coins in times of economic stress and uncertainty. This is a purely RATIONAL human response to uncertainty. It consistent for thousands of years. For any analyst to claim the markets are acting “irrationally” only proves they should look for another profession.

Sir Thomas Gresham began his career in 1543 working at Mercers’ Company at the age of 24 years old. He left England for Antwerp/Amsterdam which was the financial center of the day much like Wall Street. That was where he became a merchant businessman which was where banking existed in those days. He became an agent for King Henry VIII in the Antwerp/Amsterdam market. He became a trader and in so doing, he began to observe how capital moved.

The interesting aspect was that he was called in as a sort of crisis manager as I have been during financial upheavals. In 1551, Sir William Dansell, who was King’s Merchant there in the markets, ended up putting the English Government into a financial crisis thanks to his mismanagement.  The English turned to Gresham for advice since he became quite astute at trading. They adopted his proposals. It was then that Gresham proposed a very ingenious tact. He advocated a FOREX intervention to push the pound higher on the Antwerp change. His intervention proved so successful that in just a few years King Edward VI had discharged almost all of his debts. By pushing the pound higher, he was able to repay the previous debts by devaluing them.

Therefore, the English Crown sought Gresham’s advice in all their finances until Mary came to the throne in 1553. Gresham was instantly pushed aside for  Alderman William Dauntsey, who lacked trading experience and quickly sent the Crown into financial stress. Gresham was called back to deal with the mess once again.

Under Queen Elizabeth’s reign (1558–1603), he continued as a financial agent of the Crown and also became the Ambassador Plenipotentiary to the Governor of the Netherlands. This was the period of civil unrest in Antwerp which compelled him to return to England in 1567. This is also when the English had the founding of the Royal Exchange to compete with the Netherlands. It was Gresham who made the proposal to build, at his own expense, a bourse or exchange. This demonstrated that Gresham was a trader and understood how capital flowed.
Apart from some small sums to various charities, Gresham bequeathed the bulk of his property (consisting of estates in London and around England giving an income of more than 2,300 pounds a year) to his widow and her heirs, with the stipulation that after her death his own house in Bishopsgate Street and the rents from the Royal Exchange should be vested in the Corporation of London and the Mercers Company, for the purpose of instituting a college in which seven professors should read lectures, one each day of the week, in astronomy, geometry, physic, law, divinity, rhetoric and music.[1] Thus, Gresham College, the first institution of higher learning in London, came to be established in 1597.

Gresham’s Law (stated simply as: “Bad money drives out good“). He concluded this from his observations that foreign exchange back then was based on the metal content and weight of the coinage. Therefore, as debasement took place, people would hoard the old coinage of higher quality and spend the debased.  Thus, the bad money drove out the good and actually shrunk the money supply in circulation.

He urged Queen Elizabeth to restore the debased currency of England. In so doing, you got to repay old debts with debased currency. Governments to this day practice that same trick. Repaying a 30-year bond today the bondholder cannot buy what the money was once worth 30 years ago. The interest does not really compensate for the loss of purchasing power over long periods of time.

the 1933 Bank Holiday – Can it Happen Again?


Armstrong Economics Blog/Banking Crisis Re-Posted Mar 23, 2023 by Martin Armstrong

QUESTION: Marty there are a lot of people who seem to be trying to create a panic. Some are claiming the stock market will plunge by 50%. Others are saying nothing will survive other than gold. It seems like none of these people have any sense of what is really unfolding. They were saying the same thing for different reasons before the banking crisis. Can you offer any historical perspective?

Thank you. You seem to be the only real source these days.

Pete

ANSWER: The Bank Holiday took place the first week of March 1933. It began with governors closing down the banks in their states. Once one began, like COVID rules, they quickly jumped on the bandwagon. As reported by March 4th, 1933, some 41 states had already declared a banking holiday. Back then, the president took office in March – not January. Thus, Roosevelt was sworn in on March 4th, 1933. As the new president, FDR delivered what is arguably his best-known speech.

“So, first of all, let me assert my firm belief that the only thing we have to fear is…fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and of vigor has met with that understanding and support of the people themselves which is essential to victory. And I am convinced that you will again give that support to leadership in these critical days.”

The following day, Roosevelt declared a national banking holiday on March 5th, 1933. Then Congress responded by passing the Emergency Banking Act of 1933 on March 9th, 1933. This action was combined with the Federal Reserve’s commitment to supply unlimited amounts of currency to reopened banks. Back then, they effectively created a de facto 100% deposit insurance and this was before the FDIC was created.

However, what the history books have omitted because it revealed the real reason for the major banking crisis, was the confiscation of gold precisely as Germany did in December 1922 seizing 10% of all assets which unleashed hyperinflation in 1923.

In Herbert Hoover’s memoirs (1951), he documents the fact that Franklin D. Roosevelt (FDR) played a very dirty game of politics. There were rumors that FDR would confiscate gold in 1932 BEFORE the election. These rumors spread and people ran to banks to withdraw their funds. The night before the election in 1932, FDR denied that he would do such a thing. After FDR won the election, the real bank panic began. FDR would not take office until March 1933.

The run on banks began as the Great Depression started. In 1929 alone, 659 banks closed their doors due to mismanagement and speculation. Ironically, to save money on paper, it was also in 1929 when the currency was reduced in size to save money. This time, they want to move to digital and save 100% on printing money. Here in 2023, the failures are due to the WOKE agenda which has deprived the banks of risk management rather than speculation.

However, as the 1931 Sovereign Debt Crisis hit, the number of bank failures skyrocketed. Goldman Sacks and others were selling foreign bonds to Americans in small denominations., As Europe began to default, US banks holding foreign debt and individuals in need of cash led to a banking panic for external reasons. Here is a chart showing the listing of bonds on the NYSE. We can easily see the collapse in the bond market thanks to the 1931 Sovereign Debt Crisis.

By 1932, an additional 5,102 banks went out of business. Families lost their life savings overnight. Thirty-eight states had adopted restrictions on withdrawals in an effort to forestall the panic. By March 4th, 41 states had declared a bank holiday shutting down banks. Bank failures increased in 1933, and Franklin Roosevelt deemed remedying these failing financial institutions his first priority after being inaugurated.

However, it was actually the election of FDR that started the banking crisis post-1931. Hoover pleaded with FDR to please come out and address the gold confiscation rumors. People had been hoarding their gold coins fearing the rumored confiscation. Despite Hoover’s plea for FDR to come out and deny the rumors after the election, he remained silent. Given FDR’s manipulation of Japan and the attack on Pearl Harbor which he appeared to instigate with sanctions confiscating Japanese assets in the USA, denying the sale of any energy to Japan, and then threatening to use the fleet to block them from buying fuel from anywhere else, They Japanese attacked Pearl Harbor. There were Senate investigations afterward about FDR’s role because the US had already broken the Japanese code and knew in advance about the attack on Pearl Harbor. He did that to force the US into World War II.

It was in his character to remain silent and create the worst banking crisis in history before he was sworn in as president. FDR was a radical socialist and many viewed that he admired Lenin. If it were not for Mr. Jones exposing the truth behind Stalin, even the corrupt New York Times journalist promoting Stalinism was meeting with FDR. The run on the banks became massive when FDR won the election on November 8th, 1932. FDR allowed the banking system to implode with people rushing to withdraw the money in gold coins.

At 1:00 a.m. on Monday, March 6th, 1933, President Roosevelt issued Proclamation 2039 ordering the suspension of all banking transactions, effective immediately. Roosevelt had taken the oath of office only thirty-six hours earlier.

The terms of the presidential proclamation specified:

[N]o such banking institution or branch shall pay out, export, earmark, or permit the withdrawal or transfer in any manner or by any device whatsoever, of any gold or silver coin or bullion or currency or take any other action which might facilitate the hoarding thereof; nor shall any such banking institution or branch pay out deposits, make loans or discounts, deal in foreign exchange, transfer credits from the United States to any place abroad, or transact any other banking business whatsoever.

For an entire week, Americans would not have access to banks or banking services. They could not withdraw or transfer their money, nor could they make deposits. The entire economy ran simply on cash in your pocket.

While the first phase of the banking crisis unfolded after 1929 due to speculation losses (hence Glass–Steagall Act), then the second phase was the 1931 Sovereign Debt Crisis, it was the third phase with the election of FDR that led to thousands of banks failing as there was a mad rush to withdraw your gold coin. But a new round of problems that began in early 1933 placed a severe strain on New York banks, many of which held balances for banks in other parts of the country. About 4,000 banks failed during this period alone bringing the total to over 9,000.

Much to everyone’s relief, when the institutions that could reopen for business on March 13th, 1933 saw depositors standing in line to return their stashed cash to neighborhood banks. Within two weeks, Americans had redeposited more than half of the currency that they had withdrawn post-FDR’s election on November 8th, 1932. This would prove to be a sneaky trick of FDR to get people to redeposit all the gold coins they had withdrawn – as we are about to explore.

The stock market was also ordered closed when FDR came to power. With the cleverness of a real con artist operating a Ponzi Scheme to gain the confidence of the people, FDR needed the gold coin to be deposited for Phase 4 of the banking crisis. On March 15th, 1933, (The Ides of March), the stock market was allowed to reopen. On the first day of trading, the New York Stock Exchange recorded the largest one-day percentage price increase ever.

The week before the closure, the Dow Jones Industrials fell to 49.68. The week following the closure, the Dow rallied to 64.56 – a percentage gain of virtually 30% over the banking holiday. The shorts who were better on the collapse of the market once it reopened were devastated. It was a major short-covering rally.

With the benefit of hindsight, the nationwide Bank Holiday and the Emergency Banking Act of March 1933, ended the bank runs that had plagued the Great Depression, but it also set the stage for the confiscation of gold. What you have to understand is that Franklin Delano Roosevelt’s (FDR) actions in 1933 were not directed simply at gold. He was embarking on what he called the New Deal, which was a Marxist Agenda that was very popular at the time. His New Deal would end austerity, whereby they were maintaining a balanced budget in the belief that they needed to inspire confidence in the currency.

It was this balanced budget philosophy that also inspired John Maynard Keynes who argued that in times of economic distress when the demand has collapsed, that is when the state needs to run a deficit and increase the money supply. There was a simultaneous international flight of capital from Europe to the United States in the face of European sovereign debt defaults.  That capital flight lasted for nearly two years until FDR won the election in 1932. There was much concern that Roosevelt would do what Germany did in 1922 in confiscating assets. That was the rumor about the possible confiscation of gold.

Milton Friedman criticized the Fed because the capital flows poured into the US but they refused to monetize it. We can see that as Europe defaulted on its debts in 1931, the capital rushed head-first into the dollar. Then we see that the dollar peaked in November 1932 with the election of FDR fearing that would weaken the dollar and exploit the economy. All this gold came to the USA pushing the dollar higher, but the Fed refused to monetize it, was Milton’s criticism. The backing of gold behind the dollar doubled in supply between 1929 and 1931.

So, you must separate gold and the devaluation of the dollar to comprehend what the issue was all about. FDR could have simply abandoned the gold standard, as did Britain, and not confiscated gold. However, that would have also been sufficient to end austerity. But the bankers would have profited and sold the gold overseas at higher prices. Roosevelt in his confiscation of gold was intended to deprive the private sector of profiting from his devaluation of the dollar which was rising the price of gold from $20 to $35. You must keep in mind that he even degraded Pierre du Pont (1870-1954) and called him the “Merchant of Death” because he produced arms for World War I and made a profit off of that war demand. Many saw Roosevelt as a traitor to his own class.

ExecutiveOrder-Gold-Confiscation

The confiscation of the gold was for two reasons. First, FDR was changing the monetary system from one where there was no distinction domestically from internationally to a two-tier system. Gold would freely circulate without restriction only internationally. Therefore, the confiscation of gold was altering the monetary system moving to a two-tier monetary system with gold only used in international transactions.

Consequently, FDR confiscated gold to move to a two-tier system and to deprive Americans of any profit from his devaluation. What FDR then did was confiscate gold from all institutions ordering them to turn over whatever they had. Ironically, this move was intended to target bankers rather than the public. FDR did not have people knocking on every door demanding all their gold. That is why there are plenty of US gold coins that have survived. If individuals possessed them rather than an institution, then they kept what they owned

Therefore, Roosevelt was able to seize whatever gold existed in banks. He declared all contracts void that had gold provisions for payment. It was in Perry v. United States – 294 U.S. 330 (1935) that the US Supreme Court ruled that Congress, by virtue of its power to deal with gold coin as a medium of exchange, was authorized to prohibit its export and limit its use in foreign exchange. Hence, the restraint thus imposed upon holders of gold coins was incidental to their ownership of it, and gave them no cause of action. id/P. 294 U. S. 356.

The Supreme Court held that it could not say that the exercise of this power by Congress was arbitrary or capricious. id/P. 294 U. S. 356. They held that even if the Government’s repudiation of the gold clause in the government bonds was unconstitutional, it did not entitle the plaintiff to recover more than the loss he has actually suffered, and of which he may rightfully complain. id/P. 294 U. S. 354. Therefore, the Joint Resolution of June 5, 1933, held:

“insofar as it undertakes to nullify such gold clauses in obligations of the United States and provides that such obligations shall be discharged by payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts, is unconstitutional. id/P. 294 U. S. 349.

Yet, swapping gold for dollars created no loss that was cognizable even though the taking of gold was unconstitutional. Clearly, the Supreme Court did not consider the loss in terms of foreign exchange. The Court reasoned:

“Plaintiff has not attempted to show that, in relation to buying power, he has sustained any loss; on the contrary, in view of the adjustment of the internal economy to the single measure of value as established by the legislation of the Congress, and the universal availability and use throughout the country of the legal tender currency in meeting all engagements, the payment to the plaintiff of the amount which he demands would appear to constitute not a recoupment of loss in any proper sense, but an unjustified enrichment.”

In my understanding of the law, those who argued before the Court made purely a domestic argument. A dollar was still a dollar in domestic terms so there was no cognizable loss and the Court did not reach the constitutional question. Had they argued that their loss was with respect to some debt owed in British pounds, they there was a loss. Purely domestically, the only loss would have been to inflation and the Court would never rule against the government on such an issue.

All of that said, there does not appear to be any historical precedent for the stock market to collapse by 50%, all tangible assets to turn to dust, and only gold will survive given a banking crisis where Biden and Yellen sit on each other’s hands and do nothing. Trust me. Every major Democratic donor will be screaming. And as for those claiming the Fed will reverse its position, say inflation is suddenly no longer a problem, and monetize everything in sight, this is even too big for the Fed. have to create QE and absorb all the debt, there to things have changed. If the Fed does that, it will also lose all credibility. It squarely understands that inflation comes from handing Ukraine a black check to the most corrupt government in the world. The Fed raised rates yesterday for it cannot back down. It is choreographing the best it can but the bankers do not listen.

If they simply stand behind all the deposits, then there will be no panic. That is what they did in 1933 and the market rallied in confidence thereafter.

The Fed Does Not Back Down


Armstrong Economics Blog/Interest Rates Re-Posted Mar 22, 2023 by Martin Armstrong

COMMENT: Marty, it’s refreshing to have Socrates that is totally unbiased. It projected continued rising rates into next year and the Fed just proved its point. It is not backing down.

Thank you. Socrates is very enlightening.

GS

ANSWER: I know there were a lot of talks that surely the Fed had to lower rates and start QE all over again. Most of those sorts of comments have no real experience in markets. They just mouth a lot of hot air. Perhaps instead of putting masks on cows, we should do that on the shills. The Federal Reserve had no choice but to raise interest rates although it was just by a quarter point. Not to do so and the Fed would lose all credibility and the market would then not take them seriously.

You MUST understand that this crisis has unfolded because too many banks were wrapped up in WOKE culture and hired people who were UNQUALIFIED to run risk management. Some were more excited about cross-dressing as a woman and winning the Rainbow award in banking than actually protecting the bank from the risk of rising interest rates.

In a statement released at the conclusion of the meeting, Fed officials acknowledged that recent financial market turmoil is weighing on inflation and the economy, though they expressed confidence in the overall system. “The US banking system is sound and resilient.” They had no choice but to make this statement.

“Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring and inflation. The extent of these effects is uncertain.”

The Fed is saying that their rise in rates will in fact reduce inflation and economic activity. The banks have this yield curve risk and that is different from the 2007-2009 crisis where the debt was based on fraud. Here, the debt is US Treasuries so they are not going bankrupt from that aspect, but it is a liquidity crisis.

If these people who scream loudly but know nothing really about finance keep up the nonsense, they will only add to the uncertainly. This inflation is accelerating thanks to the war.

Cash Not Accepted


Armstrong Economics Blog/The Hunt for Taxes Re-Posted Mar 16, 2023 by Martin Armstrong

There once was a time when cash was the undisputed king. Merchants preferred cash payments over credit, and there were often incentives for paying with paper. I recall receiving lower gas prices when paying with cash, for example. It is increasingly common to see “no cash accepted” signs at establishments as the world moves toward a cashless society. At the Federal level, there are no laws protecting consumers who wish to pay in cash. The Federal Reserve stated on its website:

There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.

"Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency [including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks] are legal tender for all debts, public charges, taxes, and dues." This statute means that all U.S. money as identified above is a valid and legal offer of payment for debts when tendered to a creditor."

Yet, the Federal Reserve also recognizes that as of 2021, 4.5% of US households were “unbanked.” This means that 5.9 million households are unable to pay by card. This is the lowest unbanked rate since the Fed began keeping track in 2009. The most common reason for not having an account, reported by 21.7% of unbanked households, is that they do not meet minimum balance requirements. The second most reported reason (13.2%) is that people simply do not trust banks, while the third most cited reason (8.4%) was the desire for privacy.

If merchants refuse to accept cash, these people cannot participate in consumerism. Their legal tender is simply not accepted. Unbanked households are more likely to contain persons with lower levels of education, lower incomes, disabilities, single mothers, and minorities. As the Fed reported:

“Differences in unbanked rates between Black and White households and between Hispanic and White households in 2021 were present at every income level. For example, among households with income between $30,000 and $50,000, 8.0 percent of Black households and 8.4 percent of Hispanic households were unbanked, compared with 1.7 percent of White households.”

If cash is legal tender, then it should be accepted everywhere. Numerous merchants not only refuse cash but they charge an additional fee for using credit. Tennessee, Arizona, Delaware, District of Columbia, Idaho, Maine, Massachusetts, Michigan, Mississippi, New York, North Dakota, Oklahoma and Pennsylvania, New Jersey, Rhode, Colorado, and Connecticut have laws at the state level protecting cash payments. Some cities such as Washington D.C., Berkley, Chicago, New York City, Philadelphia, and San Francisco also have laws in place. However, I can assure you that many retailers in these areas still do not accept cash.

Washington wants to move us toward a cashless society to tax everyone, even those with the least to give, on every transaction we make.

Action Alert – List of States Where “Money” Is Being Redefined and Non Govt Issued Cryptocurrency Is Being Banned


Posted originally on the CTH on March 14, 2023 | Sundance 

Last week, South Dakota Governor Kristi Noem broadcast a warning on the Tucker Carlson show about a bill that passed her State House and Senate that she was forced to veto because it changed the definition of money and banned non-govt-issued cryptocurrency like Bitcoin. {Broadcast Warning Here}

The bill stems from the generally innocuous Uniform Commercial Code (UCC), which Daniel Horowitz describes as, “a set of standards to facilitate interstate sales and commercial transactions such that all definitions pertaining to such commerce are uniform and clearly understood.”  It looks like Horowitz was the first to transmit the public warning, as identified by two members of the South Dakota House Freedom Caucus, and then Kristi Noem became aware – thus the veto.

Governor Noem warned that the bill was already passing through several states, and if you look at the UCC Amendment tracking page [DATA HERE], she is correct.  The states in green on the map below are states where the UCC revision bill has already been introduced.

As Daniel Horowitz notes in his initial warning dated March 2, 2023:

“The revisions to Article I are very clear now that Bitcoin will not be money, because even though the definition provides for electronic money … it says that an asset that is adopted by a government as its medium of exchange will not qualify as money … if the electronic asset, such as Bitcoin, existed before it was adopted by the government. So Bitcoin, of course, exists today; it existed before El Salvador adopted it as its currency … so it will never be money for UCC purposes. The same for other kinds of crypto currencies.” So there you have it. Officials clearly mean to pave the way for CBDC while explicitly barring all competition. (more)

This is obviously alarming.

Additionally, with the timing of this national revision taking place very quietly; and with the failure of SVB and Signature Bank following a few weeks later; and with specific impacts to the cyptocurrency market; one is left wondering if the current bank “failure” and Biden team intervention was not an intentional crisis with a motive to push government controlled central bank digital currencies into the mainstream.

In essence, was the SVB banking collapse, a designed crisis?  And as a result, was the federal government response predetermined and just waiting to be triggered?

When asked last week why her legislature would do this, Noem responded the state politicians likely did not read the bill as it was constructed by lobbyists.  Noem is exactly correct and hits on a subject we have discussed here frequently {GO DEEP}.  However, one of the more alarming aspects to Noem’s discussion of the issue is that around 20 other states are considering similar legislation.  WATCH:

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