In 2010, China and Russia agreed to stop trading together in dollars and Japan agreed to do the same with China just last week. Moves like that coming from these major economic players only can spell doom for those who rely on the strength of the dollar.

With commodities like food and oil still trading in weakening dollars, it puts further pressure on the soaring prices of these essentials. All signs seem to indicate that the cost of living in dollar-based economies will likely rise dramatically in 2012 as well.

Additionally, just as Western populations find themselves broke and without jobs, their governments are also on the brink of bankruptcy and are reducing domestic spending, while continuing to print endless gobs of money for fraudulent banks and endless wars. The notion of reversing this trend is not promising.

Since 2012 will likely be another tumultuous year for at least over half the American population who are already sliding on the razor’s edge of poverty, it’s important to prepare accordingly.

Here are 10 things to do in 2012 that will help you survive economic fluctuations and even full-blown collapse:

1. Learn New Skills: The best insurance you can take out for an economic downturn is learning new skills. Skills to produce something beautiful or beneficial to humans is the only true form of wealth that no one can take from you. Examples of skills to survive economic collapse can be organic gardening, food storage, food preparation, animal husbandry, construction, sewing, candle and soap making, first aid and natural medicine, hunting and fishing, alternative energy, mechanics, and anything else that fills basic human necessity.  Many other skills are viable as well should society not deteriorate completely such as writing, communicating, organizing, software coding, etc. Note: These skills are beneficial to have regardless of economic conditions.

2. Improve Your Health: Yes, this is everyone’s cliche New Year’s resolution.  But in times of great uncertainty, especially economically, taking care of your health is ultra important.  When each week may be make-or-break financially, very few can afford to lose a week or more of productivity because of illness.  Additionally, great stress is likely facing everyone in 2012.  Thus, full spectrum health of body, mind and spirit will be vital to survive and thrive in tumultuous times.

3. Store Backup Food: The overall global food price index increased by 33% from January 2010 to January 2011. Did your income rise by that much in 2011?  Did the value of your investments increase by that much in 2011? If not, storing extra food is far more practical than maintaining a savings or investment account.  And in terms of withstanding a possible collapse of the dollar or economy in general, you’ll be in much better shape than if your resources are in a banking institution.

4. Create a How-To Library:  There is no way to learn all of the things that may be useful in times of severe economic distress.  Many of us rely on the Internet as an immediately accessible library of how-to information. However, if something were to happen to Internet access in 2012, which is clearly under threat of censorship and control, it’s important to build your own personal library of useful how-to knowledge; books, ebooks, videos etc.  Get an external hard drive and start downloading books and videos that may prove priceless in times of need.

5. Start a Side Business: Waiting for the government or anyone to “create” jobs is futile and foolish.  The West has clearly entered an age of prolonged economic downturn where manufacturing jobs are unlikely to return with any significance.  It’s time to focus on creating something for yourself, whether you’re currently employed or not.  Learn to forage for deals and small earnings. Learn to create. Start a small side business and build the foundation for an additional stream of income with something you’re passionate about. Start a blog, write a book, teach or take a class — anything that you can sink your teeth into.

6. Gather Trade-able Goods:  If things go from bad to worse, besides food, there are many things that will be valuable to have stored up.  First consider your personal needs and overbuy those items. Things like toothbrushes, toothpaste, soap, wet wipes, baking soda (countless uses), Q-tips, first aid products, alcohol, and medicine. There are also several survival goods that you should backstock like; water filters, fuel, lighters, lighter fluid, seeds, weapons, common ammunition, batteries, and hand tools. These are regularly used in daily life and won’t ever go to waste, but they also have great trade value should times get tough.  All of these items can be picked up very inexpensively if you keep your eye on deals and buy in bulk.

7. Build Community Alliances:  Everyone needs a supporting tribe when times get tough. Inform your family and friends of your plans to prep for the worst and the new business ventures you’re engaged in. Encourage them to get involved with you in any capacity that makes sense. Seek others in your community already doing these things and collaborate with them. Support local businesses and local food cooperatives. Go to your town hall or city council meetings and suggest community activities that increase self-sufficiency of the area to cushion any disruption.

8. Alternative Energy: Having any source of alternative energy is just plain smart for any circumstance. A backup generator, whether solar-powered or gas, is imperative for those who live in cold climates (along with a wood stove or fireplace) prone to electric outages in the winter.  But imagine if the lights go out for an extended period of time. Solar hot water, a solar-powered chest freezer, a solar oven and a small generator will provide a high level of self-reliance for energy with minimal investment.

9. Water Purification: Clean water is so vital to your health and survival that you should acquire several ways to purify water. First, before disaster strikes, test your water now. You may be surprised to discover that disaster or not, your water may already be contaminated with countless toxins including sanctioned additives like fluoride.  There are several affordable options for turning unhealthy water into crisp fresh water from portable hand-pumped units, table-top setups, faucet attachments, to pills and bleach drops.  It’s recommended to have more than one option, so research and find the best that you can afford that suits your needs.

10. Love & Appreciate: One of the most important intangible things you can do to survive 2012 is to love and appreciate more.  Make it a daily action item: express love to your friends, family, neighbors, and even strangers.  What you put out into the world is what you’ll get in return. Appreciate what you do have every day.  Don’t be disappointed because others may have more, because there are always others with far less.  Your genuine appreciation for the little things will attract the bigger things you need and desire.

This article originally post at:

http://www.activistpost.com/2012/01/10-things-to-do-to-survive-2012.html

If you woke up in five days and there was no electricity, no internet, no cell phones, what would you do? As for me, I’ll answer that question at the end of this article. But why worry, it’s not going to happen. But it could and I’ll explain it briefly.

In five days, a large “benevolent monster” of a sunspot is turning to face the Earth. The most active part of the entire sun since 2005. And “it’s still growing,” according to Jess Whittington, a forecaster at the federal Space Weather Prediction Center. This “benevolent monster” of a sunspot will only be facing our planet for two weeks.

The consequences of this is dire, if you only understand what happens if this “benevolent monster” of a sunspot unleashes it’s full fury upon our small planet. Let’s go back in time to 1859.

From August 28 until September 2, 1859, the earth faced a similar scenario such as what is occurring in five days. On September 1, 1859, the largest flare came unleashed a coronal mass ejection straight at the Earth. And just 18 hours later, the largest recorded geomagnetic storm hit the Earth.

In Boston, the light was so bright that even at 1:00 AM, people could read the newspaper without any other light sources around them. The currents in long Telegraph wires in both the United States and Europe experienced induced ElectroMagnetic Force. Fires broke out in the telegraph offices and even shocked the telegraph operators. Auroras were seen in Hawaii, Mexico, Cuba and Italy. This was the 1859 solar superstorm.

In five days, the electric grid to the United States could be virtually destroyed in the northern Half of the United States. With 130 million people without electricity for 4 to 10 years as 350 transformers are destroyed. The entire Alaska Pipeline could erupt into a fireball. All land line telephones could be destroyed.

So in five days, if a solar superstorm such as the one that hit the Earth in 1859 hits the Earth again, then I’ll calmly sit back and open my Bible and read it under the 1:00 AM lights.

Read the rest of the story here: http://endoftheamericandream.com/archives/the-prepper-movement-why-are-millions-of-preppers-feverishly-preparing-for-the-end-of-the-world-as-we-know-it

Read the rest of the story at: Silver Doctors

The following information was released by the Heritage Foundation:

Abstract : An electromagnetic pulse (EMP) over the United States could end modern life in America overnight. Whether caused by an enemy attack (a nuclear device detonated above the atmosphere) or by a natural phenomenon (a geomagnetic storm), an EMP can cause entire regions of the country to lose electricity-permanently. Despite the EMP Commission’s recommendations in 2004 and 2008, hardly any progress has been made in protecting the country from an EMP attack and its catastrophic results. The U.S. must prepare to deal with an EMP-now.

While the ability of an electromagnetic pulse (EMP) to inflict catastrophic damage on U.S. infrastructure has been a known fact for decades, insufficient efforts have been taken to mitigate the threat. A survey of congressional, federal, state, local, and international measures to deal with the threat reveals more complacency than action.

In order to prevent the catastrophic destruction that could result from either a nuclear missile detonated at high altitudes or intense solar eruptions that send blasts of radiation towards the Earth, initiatives are needed at all levels-from bilateral partnerships that focus on shared infrastructure to national leadership to state and local action.

Why Worry?

In July 1962, a high-altitude nuclear test dubbed Operation Starfish, conducted 400 kilometers above Johnson Island in the Pacific Ocean, first raised widespread concerns over electromagnetic pulses. During the course of the test, the recording instruments continually malfunctioned and affected electrical equipment more than 1,400 kilometers away in Hawaii.[1] The root cause of the problem? An electromagnetic pulse. This discovery led the U.S. military to harden many of the country’s strategic defense systems, such as missile silos, against EMP effects, but little was done to implement measures to protect civilian infrastructure. That practice has remained virtually unchanged despite the ever-increasing proliferation of nuclear weapons and ever-increasing U.S. military and civilian dependence on electricity-based infrastructure.

An EMP is a high-intensity burst of electromagnetic energy caused by the rapid acceleration of charged particles. Nuclear weapons, non-nuclear weapons (radio-frequency weapons), or geomagnetic storms (often called space weather) can power an EMP, and the resultant changing magnetic field in the Earth’s atmosphere can disrupt electrical systems.[2] An EMP has three main components: (1) An electromagnetic shock disrupts electronics, such as communication systems; (2) an effect similar to lightning rapidly follows and compounds the first component; and (3) the pulse flows through electricity transmission lines, overloading and damaging transmission distribution centers, fuses, and power lines.[3]

The State of Play

The U.S. government has made some efforts to address these threats. Current initiatives span prevention, protection, and recovery:

Congressional Action. Shortly before 9/11, Congress established the Commission to Assess the Threat to the United States from Electromagnetic Pulse (EMP) Attack. The EMP Commission’s charter required the commission to assess:

the nature and magnitude of potential high-altitude EMP threats to the United States from all potentially hostile states and non-state actors that have or could acquire nuclear weapons and ballistic missiles, enabling them to perform a high-altitude EMP attack against the U.S. within the next 15 years;

the vulnerability of the United States military and especially civilian systems to an EMP attack, giving special attention to vulnerability of the civilian infrastructure as a matter of emergency preparedness;

the capability of the United States to repair and recover from damage inflicted on U.S. military and civilian systems by an EMP attack; and

the feasibility and cost of hardening select military and civilian systems against EMP attacks.[4]

Members of the EMP Commission testified before the House Armed Services Committee in July 2002, releasing a partially classified five-volume report on the United States’ vulnerability to a potential EMP attack.[5] The EMP Commission concluded that the United States was extremely vulnerable to a catastrophic EMP attack, finding “[o]ur increasing dependence on advanced electronics systems results in the potential for an increased EMP vulnerability of our technologically advanced forces, and if unaddressed makes EMP employment by an adversary an attractive asymmetric option.”[6] The commission proposed a five-year plan aimed at protecting critical infrastructure from potential EMP attack.

The National Defense Authorization Act for fiscal year 2006 reestablished the EMP Commission to continue its efforts “to monitor, investigate, and make recommendations, and report to Congress on the evolving threat to the United States from electromagnetic pulse attack resulting from the detonation of a nuclear weapon or weapons at high altitude.”[7]

The goals of the renewed commission were to assess the threats to U.S. critical infrastructure and provide recommendations to address vulnerabilities. This new commission released its final findings in 2008 through the publication of the Critical National Infrastructure Report, as well as testimony before the U.S. House Armed Services Committee. The commission concluded that an EMP attack on the United States would be devastating:

Should significant parts of the electrical power infrastructure be lost for any substantial period of time, the Commission believes that the consequences are likely to be catastrophic, and many people may ultimately die for lack of the basic elements necessary to sustain life in dense urban and suburban communities. In fact, the Commission is deeply concerned that such impacts are likely in the event of an EMP attack unless practical steps are taken to provide protection for critical elements of the electric system and for rapid restoration of electric power, particularly to essential services.[8]

The commission offered recommendations to improve U.S. preparedness for an EMP attack or a geomagnetic storm in 10 critical areas of national infrastructure including the electrical grid, food infrastructure, and U.S. space systems. The commission strongly urged the Department of Homeland Security (DHS) to “make clear its authority and responsibility to respond to an EMP attack” by developing contingency plans in cooperation with appropriate federal, state and local agencies, and industry.[9] Furthermore, the commission recommended that DHS develop response protocols for an EMP attack and regularly practice this response through exercises with relevant government agencies and industry groups. The commission urged DHS to work with the Department of Energy and industry groups to identify and address vulnerabilities in the U.S. electrical infrastructure. The commission advised that the cost of critical infrastructure improvement should be split between government and industry.[10]

Congress has not yet passed comprehensive legislation addressing EMP vulnerabilities. Numerous bills have been introduced, but none were passed out of committee.

Following the 2008 EMP Commission report, legislation was introduced to address the threat of an EMP attack on the United States. In April 2009, H.R. 2195, “A Bill to Amend the Federal Power Act to Provide Additional Authorities to Adequately Protect the Critical Electric Infrastructure Against Cyber Attack, and for Other Purposes,” was introduced in the House, sponsored by Representative Bennie G. Thompson (D-MS).[11] The bill cites the 2008 commission report on critical national infrastructures, notes the vulnerabilities of Supervisory Control and Data Acquisition (SCADA) components, and calls for the EMP Commission to consult with the Secretary of Homeland Security to identify such systems in the United States and “issue”such rules or orders as are necessary to protect critical electric infrastructure against vulnerabilities or threats.”[12] H.R. 2195 was referred to the House Subcommittee on Emerging Threats, Cybersecurity, and Science and Technology, but never made it past that committee.[13]

H.R. 4842, the Homeland Security Science and Technology Act of 2010, included provisions for the establishment of a commission on the Protection of Critical Electric and Electronic Infrastructures, which would continue the work of the EMP Commission. Although approved by the House, the Senate did not vote on H.R. 4842.[14]

In June 2010, H.R. 5026, the Grid Reliability and Infrastructure Defense (GRID) Act, sponsored by Representative Edward Markey (D-MA), was received in the Senate after passing the House in a voice vote.[15] The GRID Act would amend the Federal Power Act to allow the Federal Energy Regulatory Commission (FERC) to issue new industry standards to protect critical infrastructure from cyber or EMP attacks. It defines “defense critical electric infrastructure vulnerability” as “a weakness in defense critical electric infrastructure that, in the event of a malicious act using electronic communication or an electromagnetic pulse, would pose a substantial risk of disruption of those electronic devices or communications networks”; an EMP is identified as a “grid security threat.”[16] The Secretary of Homeland Security is called upon to work with other agencies in order to “develop technical expertise in the protection of systems for the generation, transmission, and distribution of electric energy against geomagnetic storms or malicious acts using electronic communications or electromagnetic pulse.”[17] The President is to compile a list of defense-critical facilities not exceeding 100 in number that are vulnerable to electrical disruption.[18] Finally, the owners or operators of large transformers are required to ensure the availability of replacements to restore the operation of the bulk-power system in the event that a given transformer is destroyed or disabled.[19] The GRID Act was never put to a vote in the Senate.

During the final days of the 111th Congress, Representative Doug Lamborn (R-CO) sponsored H.R. 6471, “A Bill to Require the Director of National Intelligence to Submit a Report on the Foreign Development of Electromagnetic Pulse Weapons.”[20] Each country with an EMP weapons program was to be identified and its program assessed in detail, specifically focusing on whether a country’s incorporation of EMP weapons into its national security and military strategies “assume[s] that an EMP weapons attack can achieve effects similar to a direct nuclear attack, but not be subject to the deterrence calculations normally applied to nuclear weapons.”[21] Instructions for classifying potential hostile EMP delivery platforms and assessing vulnerability of identified countries to an EMP attack are also outlined.[22] The bill was introduced in the House on December 1, 2010, but never made it past the Intelligence Committee to which it had been reported.

On February 11, 2011, Representative Trent Franks (R-AZ) introduced H.R. 668, the Secure High-voltage Infrastructure for Electricity from Lethal Damage (SHIELD) Act.[23] The act essentially allows the FERC to enable emergency measures to protect the reliability of bulk-power systems and defense-critical electric infrastructure via directive of the President amid an imminent grid security threat. The act prescribes implementation procedures and cost-recovery measures. It also directs FERC to order the Electric Reliability Organization to submit reliability standards regarding these bulk-power systems from geomagnetic storms or EMPs. Furthermore, it directs the Secretary of the Department of Energy to establish a program to develop expertise on the protection of electric energy systems and to share the findings with owners, operators, and users of the systems.[24] Several provisions of the GRID Act appear word-for-word, including the definition of “defense critical electric infrastructure vulnerability,” the list of no more than 100 defense-critical vulnerable facilities, and the measure requiring the availability of spare large transformers.[25] The SHIELD Act has been referred to the Committee on Energy and Commerce, as well as to the Committee on the Budget.

A full committee hearing of the Senate Committee on Energy and Natural Resources on May 5, 2011, discussed the issue of the vulnerability of U.S. critical infrastructure to cyber and EMP attacks. Some witnesses testified before this committee against legislation to mandate increased EMP preparedness standards. Yet, these witnesses are in the minority and do not represent the consensus view of various congressional and government commissions, nor the overwhelming bulk of the expert community on the subject.

The purpose of congressional commissions, like the EMP Commission, is to establish official consensus on the severity of threats and appropriate solutions-which the EMP Commission did. The EMP Commission’s report represents the consensus view of the defense and intelligence communities as well as the nuclear weapon labs.

Moreover, the Congressional Commission on the Strategic Posture of the United States independently re-examined the EMP threat, and concurred with the assessment and recommendations of the EMP Commission.[26] So, too, did the National Academy of Sciences, the DOE-NERC report,[27] and the FERC interagency report.[28] In all, five commissions and major independent U.S. government studies have independently concurred with the EMP Commission’s threat assessment and recommendations. Not one official commission or U.S. government study dissents from this consensus.

Providing for an Uncommon Defense

In April 2005, the Defense Science Board Task Force published a report on Nuclear Weapon Effects Test, Evaluation, and Simulation that describes how the armed forces formed requirements based on nuclear threats, such as EMP. It concluded that the U.S. Army has strongly considered nuclear survivability during the development of its new programs. The U.S. Army Nuclear and Chemical Agency (USANCA) is the agency that makes recommendations for the nuclear survivability requirements for the new systems in the U.S. Army.[29] The U.S. Army War College hosted a workshop in September 2010 to explore the threats, vulnerabilities, and preparedness related to an EMP attack.[30]

In contrast, the U.S. Navy has had outdated directives and instructions pertaining to nuclear survivability since the early 1990s. However, the Navy’s critical systems do maintain nuclear survivability and nuclear hardening requirements, which protect against EMP threats.

The U.S. Air Force’s Nuclear Criteria Group Secretariat was inactivated in 1994, and it currently does not have a designated group that is responsible for creating and implementing nuclear survivability requirements.[31] However, the strategic platforms within the U.S. Air Force still assess nuclear survivability; likewise with the U.S. Navy. The Department of Defense recognized the necessity of transitioning from requirements to capabilities-based acquisition in the protection of America against EMP threats in 2003. The implementation of an evolutionary acquisition strategy would increase the nation’s preparedness against EMP attacks. The Department of Defense and the Department of Energy maintain facilities that support EMP simulators that calculate the impact of an EMP wave on an electrical system.[32] Data from EMP simulators and nuclear tests gathered over 50 years led to the conclusion that any nuclear weapon can pose an EMP threat to the United States because the electric grid is fragile.[33] The conclusion can be helpful for considering which efforts should be undertaken against EMP at all levels of government.

The House Committee on Armed Services issued a report on H.R. 5136, the National Defense Authorization Act for Fiscal Year 2011, in which it expressed “concern about the vulnerability of Department of Defense critical infrastructure to electromagnetic pulse (EMP) attack.”[34] Section 225 of the bill would require the Secretary of Defense to contract with an independent entity to “conduct an assessment of Department of Defense plans for defending the territory of the United States against the threat of attack by ballistic missiles, including electromagnetic pulse attacks.”[35] An entire section is devoted to the vulnerability of defense critical infrastructure to EMP, in which the Comptroller General is directed to review assessments of the threat of EMP attack, taking into consideration the findings of the EMP Commission.[36]

The Army’s Research, Development, Test and Evaluation Justification Book for FY 2012 includes a project justification for a Mobile Tower System (MOTS) for use by Air Traffic Control.[37] The completion of developmental testing, “including high altitude electromagnetic pulse testing,” is listed under FY 2010 Accomplishments for MOTS.[38] A special congressional addendum to the Defense Logistics Agency’s Microelectronics Technology Development and Support Project lists electromagnetic shielding as a “critical enabler” for 3-D electronics arrays, and increased the allocation for that project from $2.394 million in FY 2009 to $4.775 million for FY 2010.[39]

The Air Force’s Physics project in Defense Research Sciences “increased research into the susceptibility to upset of various electronic circuits when exposed to suitable electromagnetic waveforms,” and received an additional $5 million for FY 2011, for a total allocation of $50.47 million.[40] An Air Force Materials Project for Structures, Propulsion, and Subsystems received increased allocation between FYs 2010 and 2011, from $18.810 million to $22.109 million, respectively.[41] This Materials project “Develops novel materials for electromagnetic interactions with matter for electromagnetic pulse (EMP), high power microwave, and lightning strike protection” for aircraft, spacecraft, launch systems, and missiles.[42] Funding was transferred to this program in FY 2011 from Project 2100, an EMP suitcase developed for testing systems vulnerabilities by Applied Physical Electronics (APE); the EMP suitcase’s production was “driven by input from DoD groups,” according to APE’s Web site.[43]

Other Air Force systems whose electronic protection functions are being actively improved are aerospace sensors, including advanced sensor arrays.[44] The Radio-Frequency Warning and Countermeasures Technology Project “conducted research on the synergy between electronic protection and electronic attack technologies to realize more effective jamming” in FY 2010, and seeks to “provide active electronic protection architecture concepts” in the coming years.[45] Electromagnetic interference testing was part of FY 2010′s B-52 Modernization project, and one of the planned upgrades for B-2 squadrons is EMP Hardening Testing.[46] The F-22 Modernization Project, whose budget was nearly doubled for FY 2012, includes improvements to electronics protection, as does the justification for F-16 squadrons.[47] The E-4B Airborne National Ops Center will be subjected to EMP testing “to validate the E-4B fleet compliance with updated EMP protection Military Standards.”[48]

New F-15 radar enhancements will emphasize electronic protection, a new project for FY 2012.[49] The FY 2011 Plans for the Airborne Warning and Control System (AWACS) will “incorporate classified Electronic Protection measures.”[50] The integrated Command and Control Intelligence, Surveillance and Reconnaissance (C2ISR) capability for the Global Hawk aircraft is provided by the Multi Platform-Radar Technology Insertion Program (MP-RTIP) sensor, whose future studies and development include the implementation of electronic protection.[51] Finally, the space segment of the Nuclear Detonation Detection System (NUDET NDS) incorporates an EMP sensor into GPS systems.[52]

Department of Defense (DOD) standards regarding EMP preparedness have been robustly updated in recent years. A Standard Practice for Shipboard EMP Mitigation document was updated in September 2009 for the first time since 1996.[53] The document gives EMP protection requirements precedence over standard electromagnetic interference protocol.[54] On December 1, 2010, the DOD updated the Interface Standard for Electromagnetic Environmental Effects Requirements for Systems, which “establishes interface requirements and verification criteria for airborne, sea, space, and ground systems, including associated ordnance.”[55] The document states that a system “shall meet its operational performance requirements after being subjected to the EMP environment.”[56] This EMP environment is detailed in the classified document “MIL-STD-2169: High-Altitude Electromagnetic Pulse (HEMP) Environment.”[57]

In October 2010, the Defense Science Board (DSB) Task Force on the Survivability of DOD Systems and Assets to Electromagnetic Pulse (EMP) and Other Nuclear Weapons Effects held a meeting closed to the public.[58] The stated purpose of the meeting was “To obtain, review and evaluate information related to the Task Force’s mission focus to assess implementation of the DoD Instruction covering nuclear survivability including EMP.”[59] The Task Force received, reviewed, and discussed “presentations from the military services and other Defense Department agencies and organizations on the implementation to the meeting’s date of DoD Instruction 3150.09.”[60] This Instruction is the Chemical, Biological, Radiological, and Nuclear (CBRN) Survivability Policy, last updated in August 2009.[61] The document directs the Secretaries of the military departments and the chairman of the Joint Chiefs of Staff to “ensure that doctrine and training to support the DoD CBRN Survivability Policy (including electromagnetic pulse (EMP)) are reflected in force-on-force simulations” and, in the case of the latter, in war games.[62] The chairman of the Joint Chiefs is also directed to “establish mandatory key performance parameters (KPP) for nuclear survivability (including EMP hardening)” for CBRN mission-critical systems.[63]

Michael J. Frankel, executive director of the EMP Commission, testified before the Senate Judiciary Committee in August 2010.[64] In that testimony, Frankel noted that the commission’s final report presented 19 findings and made 17 recommendations to the DOD, all of which were classified, but that “the reaction of the Department may be characterized as positive”much of this positive effort redounds to the great credit of DoD management, the Office of the ATSD (Nuclear Matters), and the proactive leadership of US Strategic Command.”[65]

DOD continues to invest in hardening these critical strategic assets. For example, the FY 2012 budget includes $22.1 million in additional funding to harden Minuteman missiles against EMP attacks.[66] The military’s general purpose forces, however, remain vulnerable to the effects of an EMP attack. Those forces’ increasing reliance on high technology in fact makes an EMP attack an attractive option for potential enemies.

The U.S. military has increasingly incorporated civilian technology not designed to resist EMP attack into its systems. The 2004 EMP Commission concluded that although the U.S. military possesses many EMP-hardened assets, an EMP attack would still severely degrade the ability of fielded forces to operate effectively.[67] The Defense Science Board Task Force on Nuclear Weapon Effects Test, Evaluation and Simulation supported these conclusions in a 2005 report. The task force concluded that “The bottom line is that commanders and planners cannot be assured that today’s weapons platforms, command and control (C2), intelligence, surveillance and reconnaissance (ISR), and associated support systems will be available should a nuclear detonation occur.”[68]

DOD has also published “Mil-Standard 188-125,” which describes methods for protecting against a high-altitude electromagnetic pulse for ground-based command and control facilities.[69] However, not all military systems are currently hardened against EMP. In addition, some DOD systems rely on commercial facilities, such as communications satellites and ground-based stations, to support military operations.

In April 2005, the Defense Science Board Task Force on Nuclear Weapon Effects (NWE) Test, Evaluation and Simulation published a report for DOD describing current and emerging threat environments. This included a CRS-15 comprehensive evaluation of future DOD capabilities for successful operation in nuclear environments. The DSB findings were independent, “but are highly consistent with, the findings and recommendations of the Congressionally mandated Electromagnetic Pulse (EMP) Commission.”[70]

In protecting against a high-altitude EMP (HEMP) from a nuclear-tipped ballistic missile, the most important resources that DOD provides are missile defenses. The importance of these programs, however, has been downgraded in recent years. The Obama Administration made large-scale cuts to the missile defense program in FY 2010, and its proposed budgets for FY 2011 and FY 2012 will not make up the lost ground. Similarly, the Administration has cancelled or sharply curtailed promising missile defense programs and joint projects with U.S. allies, including the Airborne Laser (ABL) and the “third site” missile defense system in Poland and the Czech Republic. Furthermore, the President signed, and the Senate consented to ratification of, the New Strategic Arms Reduction Treaty (New START) with Russia, which imposes sweeping restrictions on U.S. missile defense options.[71]

Not Protecting the Homeland

The Department of Homeland Security has a set of 15 National Planning Scenarios as an element of its risk analysis mission.[72] The scenarios describe possible high-consequence threat scenarios, such as terrorist attacks or natural disasters, but an EMP attack is not included. The EMP Commission has tried to convince the Department of Homeland Security to add it.

In 2008, under the National Defense Authorization Act for FY 2008, the Department of Homeland Security was required “to coordinate efforts with the [EMP] Commission for work related to electromagnetic pulse attack on electricity infrastructure, and protect against such an attack.”[73] Therefore, efforts were made to create inter-agency cooperation on such a critical threat to U.S. homeland security. Despite the grave dangers posed by an EMP attack, an EMP threat scenario has yet to be incorporated into the National Planning Scenarios.[74]

In an August 2010 testimony, Michael Frankel, who served as executive director of the EMP Commission from its 2001 inception until its final 2009 classified report before the oversight committees, pointed out that the commission provided 75 unclassified recommendations, most of which were aimed at DHS, “intended to mitigate vulnerability and increase resilience of the nation’s critical infrastructures.”[75] Said Frankel: “Unlike the response of the DoD, there has been no detectable resonance as yet out of the DHS”As a result, the Commission’s recommendations seem to have simply languished.”[76] Indeed, the only recent DHS activity in which EMP was addressed was at a Critical Infrastructure Partnership Advisory Council Joint Sector Meeting held June 8, 2010, in which there was a 10-minute “Electromagnetic Pulse Update” from 2:40 p.m. to 2:50 p.m.[77]

DHS inactivity regarding the threat of EMP attack is surprising, given that many provisions within the EMP Commission reports and proposed relevant congressional legislation are aimed at DHS in some capacity. Indeed, Washington State’s Department of Health Office of Radiation Protection offers more information to the public on EMP than does the DHS Web site, which merely contains a link to a 2004 Federal Emergency Management Agency preparedness manual.[78]

No Energy at the Department of Energy

The Department of Energy (DOE) has tentatively begun to identify and take appropriate corrective action to protect the U.S. bulk-power system from EMP attacks or other electromagnetic disturbance. Like DHS, DOE has not moved past the theoretical stages to protect the bulk-power system of the United States. In July 2009, DOE collaborated with the North American Electric Reliability Corporation (NERC), the DOE-designated industry group responsible for enforcing reliability standards for the U.S. bulk-power system, to host a workshop on high-impact low-frequency events. The workshop included approximately 110 attendees representing NERC, DOE, DHS, DOD, the Department of Health and Human Services, the EMP Commission, and the FERC. The workshop focused on three threats: (1) a coordinated cyber attack on the energy infrastructure, (2) a pandemic, (3) and natural geomagnetic disturbances and electromagnetic pulses.[79] The members of the workshop explored the threat of an EMP attack in depth. The workshop members concluded that

An E1 HEMP [the first blast of energy from a high-altitude magnetic pulse] event could simultaneously (within one power cycle) create malfunctions of electronic control equipment over thousands of kilometers. Traditional probabilistic planning and operating criteria do not provide sufficient protection from such a widespread, simultaneous impact. Restoration may also be complicated by the amount of equipment available to replace damaged assets.[80]

The members of the workshop recommended that the efforts to mitigate the risks of an EMP attack should focus on the recommendations of the EMP Commission. Namely, given the infeasibility of hardening the whole system to EMP attack, preparations for an EMP attack should focus on minimizing the net impact of an attack. That is that government and industry should create plans to reduce the time needed to restore power after a crippling attack.[81] The members offered this specific recommendation for future action:

Specifically, NERC should create a task force to continue these efforts and build consensus around appropriate mitigation options for industry. The task force could consider developing a full “defense plan” for these risks-covering all considerations from system design implications to hardening existing assets to system restoration. The task force should also consider the need for mandatory standards on its findings, whether related to equipment specifications or Reliability Standards.[82]

Along with urging the creation of a “defense plan” for the bulk-power system, the members of the workshop repeatedly urged DOE and DHS to work with their Canadian counterparts on the interlinked U.S. and Canadian infrastructure.[83] Although DOE in partnership with NERC has identified the threat posed by EMP attacks, the agency has not taken any further steps. Like DHS, DOE’s planning for the threat of an EMP attack remains modest.

National Space Weather Infrastructure

The National Weather Service provides space weather alerts and warnings. Assessments are made by the National Oceanic and Atmospheric Administration’s (NOAA) Space Weather Prediction Center. NOAA maintains a space weather scale for each type of event. The ratings on the scale range from minor to extreme. Hazards are described in terms of potential effects on humans, space-based assets (such as satellites), and terrestrial infrastructure. Accurately predicting space weather is still an evolving science.

Other federal agencies also provide essential support for predicting space weather. NASA provides science data from its research satellites. The U.S. Air Force provides observational data from the Solar Optical Observing Network and Radio Solar Telescope Network. The U.S. Geological Survey provides ground-based data on the effects of solar electro-magnetic emissions.

Information from the Space Weather Prediction Center is provided to electric power grid operators, space-system managers, telecommunications operators, aviation and navigational systems operators, and surveying and drilling operations. Given sufficient warning, many of these users can implement mitigation measures to limit the effects of adverse space weather on their operations. Improving the means to develop and disseminate reliable long-term weather forecasts and minimize “false alarms” would greatly facilitate the implementation of cost-effective mitigation measures.

State and Local Efforts

State and local governments have also made efforts to defend the United States against EMP threats. An EMP does not only pose a threat to computers and electronics, but also to critical infrastructures, such as communications, transportation, banking and finance, and food and water supply, because they depend on electronics or electricity.[84] Therefore, an EMP event could cause great damage within a county or state. A few enlightened state and local governments have formulated plans in the case of an EMP event.

An example is Alaska. The Alaska State Emergency Response Commission added preparation for an EMP attack involving integration, implementation, and survivability measures to the state’s emergency response plan in 2007.[85] Additionally, many county-wide and state-wide municipal organizations in New York have passed resolutions to request immediate action to protect the citizens against threats of EMP. The state has passed a bill to create the New York State EMP Critical Infrastructure Protection Commission. The commission has several duties including: educating itself about EMP and EMP threats to the state’s infrastructures; gathering facts; making recommendations to state authorities informing local agencies and governments about the hazards of natural EMP events and man-made EMP events; analyzing the dangers of EMPs; and developing a plan to protect the state from an EMP event, respond to the aftermath, and recovery after the event.[86]

Within the New York State Assembly, bill A4303-2011 was introduced by State Assembly Member for the 142nd District Jane Corwin and four co-sponsors. This act is currently attempting to establish a commission on EMP infrastructure protection within the State Assembly. The act intends for the commission to study findings and recommendations from national commissions regarding EMP defense with respect to New York’s critical infrastructure systems and develop and recommend preparation and protection plans.[87] As it stands currently, the act has been referred to the Governmental Operations Committee. In addition, both the Erie County Association of Governments and the State of New York Association of Towns have drafted resolutions recommending this commission (Erie County’s resolution also calls for support for EMP-related action from New York’s federal representatives.).[88]

Overall, however, state and local governments remain poorly prepared for an EMP attack. A 2007 survey of state adjutant generals, the officials responsible for overseeing National Guard units, found that few states were prepared for an EMP attack. The survey, conducted by the Institute of the North in conjunction with the Claremont Institute, found that although 96 percent of adjutant generals surveyed indicated that they were concerned with the threat posed by an EMP attack, few had analyzed the actual impact details of an EMP attack. Furthermore, few of the adjutant generals surveyed indicated that they had made preparations, such as training, EMP hardening of systems, and the creation of formal emergency response plans for an EMP attack.[89] Overall, most states have not taken action to address vulnerabilities to EMP attacks.

International Efforts

There has not been much international cooperation related to EMP attack preparedness. NATO did release an EMP response report in 2009, but it contained few recommendations or proposals, largely focusing on providing a description of various EMP applications and attacks, with little to no mention of defense or counter measures. Beyond NATO, it seems there will be little cooperation between the U.S. and other countries, some of which (Iran, Russia, and China) have likely considered the military application of EMP against the United States and its allies.

At the same time, national and international advocacy groups have emerged, focusing on EMP defense. One such group is EMPact America, a non-partisan and non-profit group devoted to implementing the EMP Commission’s recommendations to protect infrastructure and educate the American people on the threat of EMP attacks and the potential solutions.[90] Another group, more international in scope, is the Electric Infrastructure Society (EIS) Council. The council’s proclaimed role is to examine the future destructive potential of geomagnetic storms and EMP attacks from a global perspective. It aims to establish itself as an effective government-NGO partnership by enhancing education and international planning on these issues. Its board of advisers features various experts in the energy field, as well as current and retired U.S. policymakers.[91]

NATO has been updating key EMP-related documents of late. In January 2011, NATO revised its Allied Environmental Conditions and Tests Publication on Electrical and Electromagnetic Environmental Conditions.[92] Contained in this publication is “Leaflet 256-Nuclear Electromagnetic Pulse,” which describes EMP origin and effects on military platforms and systems.[93] A 2009 May report of the Applied Vehicle Technology Panel Hybrid Vehicle Rating Criteria Task Group listed nuclear EMP as a threat for which vehicle vulnerability must be tested for survivability.[94]

On November 14, 2010, Avi Schurr, the president of the EIS Council, made a presentation before the NATO Parliamentary Assembly on EMP and related risks to critical infrastructures.[95] In the presentation, Schurr described the threat posed by nuclear EMP strikes above the earth’s atmosphere as “potentially immense, but not yet sufficiently acknowledged.”[96] Schurr echoed the EMP Commission’s 2008 report when he warned that “electricity could be out for months or years because the grid would need to be assembled completely anew since its components would melt.”[97]

Schurr went on to declare that potential damage of a severe EMP strike was too significant to ignore preventive measures, but that thanks to recent U.S. studies the threat is now better understood as preventable-so long as the upgrading and protection of the national electric grids ensues.[98] The summary of the presentation described a recently increased awareness of electric infrastructure security on a political level, and in September 2010 an inaugural summit was held “to set up a new security framework for the U.S. and Europe.”[99]

Where We Are-Where We Need to Be

America-at all levels of governance-is unprepared for an EMP attack. Despite the clear recommendations of both the 2004 and 2008 EMP Commissions, U.S. government agencies have not taken planning for their response to an EMP attack out of the theoretical stages. This is especially alarming considering the official consensus on the severity of the threat and on appropriate solutions as articulated by the EMP Commission, the other aforementioned commissions, and the overwhelming majority of the expert community. DHS and DOE have both independently identified the United States’ vulnerability to an EMP attack, but have neither created emergency management plans nor taken action to better protect critical U.S. infrastructure from attack. DOD has begun to adopt the recommendations of the 2004 EMP Commission, but U.S. forces still remain vulnerable. State and local governments remain unaware and unprepared for the threat of an EMP attack.

Current priorities for the U.S. are:

Build Comprehensive Missile Defenses. Maintaining the capacity to interdict nuclear-tipped missiles is the most effective measure to guard against a HEMP attack. The U.S. missile defenses are not keeping pace with the proliferation of threats. It is time to reverse course. Establishing a robust ballistic missile defense is the most effective means of addressing the future threats to the U.S. and its allies resulting from the proliferation of missile technology and weapons of mass destruction. The U.S. must pursue missile defense programs that can intercept missiles in the boost and ascent portions of flight. Among these programs are the Airborne Laser, which is a modified air-to-air interceptor missile, future versions of the Navy’s Standard Missile-3 (SM-3) interceptor, and, above all, reviving the development and deployment of space-based interceptors.

Develop a national plan to respond to space weather emergencies. As a 2008 report by the National Academies, “Severe Space Weather Events-Understanding Societal and Economic Impacts,” makes clear, “Modern society depends heavily on a variety of technologies that are susceptible to the extremes of space weather-severe disturbances”driven by the magnetic activity of the sun.” The first step in addressing this issue must be educating the public and policy communities at the federal, state, and local levels about the risks and response options. Additionally, any effective plan will require enhanced, reliable long-range space weather forecasts.

Forge a bipartisan consensus in Congress to act on this issue. The response to the EMP Commission’s findings has been uneven within the United States government, with the Department of Defense taking the initiative and the Department of Homeland Security apparently sitting idle. Congressional inaction has contributed to this uneven response.

Establish bilateral partnerships with other nations. If the unthinkable happens, the U.S. and other developed nations must be able to accept foreign aid in the event of catastrophes. The U.S. should consider hosting international disaster exercises to increase the ability of countries friendly with the United States to readily accept aid from one another when disaster strikes. For some critical infrastructure the U.S. should promote establishing an industry-led, multinational rapid-response capability. Such a capability should be able to respond worldwide. Further, this could provide an effective mechanism to share best practices and integrate responses. This capability should be funded and controlled by the private sector to respond to threats to shared international critical infrastructure, such as telecommunications and the Western Hemisphere electrical grid.

An EMP disaster is the catastrophe that should never happen. The means to address and mitigate the dangers to critical infrastructure are at hand. The United States needs a greater understanding of the danger-and the determination to act.

- James Jay Carafano, Ph.D. , is Deputy Director of the Kathryn and Shelby Cullom Davis Institute for International Studies and Director of the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Davis Institute, at The Heritage Foundation. Baker Spring is F. M. Kirby Research Fellow in National Security Policy in the Douglas and Sarah Allison Center for Foreign Policy Studies, at The Heritage Foundation. Richard Weitz, Ph.D. , is Senior Fellow and Director of the Center for Political-Military Analysis at the Hudson Institute.
Copyright 2011 States News Service
States News Service

This article originally posted at: http://www.militaryaerospace.com/index/display/wire-news-display/1479617531.html

Around the world, starting Monday, all eyes are on the markets. The tension is palpable. The uncertainty is ample. And anger is heavy in the air. As predicted, the debt ceiling deal was not only NOT enough to assuage economic fears, it actually exacerbated them, triggering a flight from the Dow, and creating a decisive opportunity for ratings agency S&P to cut the once perfect U.S. credit rating from AAA to AA+.

At Alt-Market, we often talk about points of balance, and how certain moments in history become highly visible indicators of balance lost. If we pay close attention, and know what we are looking for, these moments can be recognized, allowing us time to shield ourselves from the explosion and the resulting financial shrapnel. The past two weeks have culminated into one of these defining events that tell us the tide has fully turned, and something new and dangerous is just over the horizon. The question now is; what should we expect?

The nature of the credit downgrade situation is not necessarily “unprecedented” in history, but it is surely unprecedented on the scale we see currently in the U.S. It is difficult to predict how exactly the investment world will react. Some consequences, though, are probable, if not inevitable. Let’s examine the events we are likely to see in the coming weeks as well as the coming months, as nations attempt to adjust to America’s final plunge…

1) Ratings Agencies Under Attack

This has already begun. Italian authorities have raided the offices of S&P and Moody’s, apparently perturbed that their credit rating is not under their control. The U.S. is accusing S&P of making “accounting mistakes” and jumping the gun on the American downgrade. The battle between insolvent governments and the ratings agencies from here on will escalate quickly. More offices will be investigated and raided. The mainstream media will try to assert that the downgrades are “not that important”, and that the U.S. will recover quite nicely without a perfect score. Eventually, as the collapse becomes more evident, ratings agencies will fill the role as the go to scapegoat / economic hitman at which all governments will point accusing fingers.

“S&P is gonna’ cut you man! S&P’s a blade-man, man!”

In my view, it’s all theater. First, let’s set aside the recent ratings cuts altogether and look at the facts. The U.S. should have been downgraded years ago, especially after the Federal Reserve decided to begin purchasing U.S. Treasury Bonds in place of dwindling foreign interest and turned to monetizing our debt to the point of rampant inflation. Italy and numerous other EU members should have been downgraded to junk status a long time ago as well. If anything, the ratings agencies over the past few years have been PROTECTING the credit reputations of many countries which in no way deserve it. The recent downgrades are long overdue…

Second, suddenly governments and MSM pundits feel it necessary to point out the large part ratings agencies played in the derivatives bubble and subsequent credit crisis? Please! They were perfectly content with S&P or Moody’s giving fraudulent top ratings for toxic garbage securities, and even defended agency actions after the bubble burst! Now, after they finally start doing their jobs by downgrading bad debt, governments want an investigation?

Third, ratings agencies were not alone in the creation of the derivatives bubble. The private Federal Reserve artificially lowered interest rates and flooded the markets with cheap fiat. International banks used this fast money to create the easy mortgage groundswell and the derivatives poison that was fed it into the system. Ratings agencies went along with the scam and graded the worthless securities as AAA. The federal government and the SEC allowed all of this to take place by purposely ignoring the crime and refusing to apply existing regulations in investigating the fraud.

The Bottom line? You CANNOT create an economic crisis like the one we face today without collusion between big business, government, regulatory bodies, and ratings agencies. The Obama Administration is well aware of this, and the attacks on S&P are nothing more than a show. S&P is not to blame for the downgrade this past weekend. They are ALL to blame.

2) Increased Borrowing Costs

While the mainstream will attempt to downplay the effects of a U.S. downgrade, they cannot deny that our country’s borrowing costs have just gone up. This causes several unfortunate circumstances to develop. Our ability to continue funding our liabilities is now greatly diminished, unless we turn to the Federal Reserve even more in the purchasing of treasury bonds. If investors and central banks can’t get AAA protection for their money in America, they will simply turn to other countries that still retain a top credit rating. The safety of dollars and treasuries already held by other countries will come under question. In response to the S&P downgrade, China, our largest creditor, has openly stated that U.S. securities can no longer be trusted, and that the dollar must be replaced as the world reserve currency. If the dollar does not take an immediate dive starting this week, it certainly will over the course of the Fall season. There are, indeed, many direct consequences in light of a U.S. downgrade. Anyone who says otherwise is living in dreamland.

3) European Union Feeling The Pain

The EU is on a direct interception course with disaster, just as we are, however, being that the U.S. dollar is a widespread world reserve currency, all nations will be affected by our particular downgrade, as opposed to the Greek downgrade, for example, whose effects were minor in comparison.

The European Central Bank has initiated its own TARP measures, and due to the quickening implosion of Spain and Italy, is fully prepared to print fiat Euros in a desperate attempt to control the damage. European reliance on the American consumer has proved fatal. The result is an ever expanding avalanche of fiat on both sides of the Atlantic in an insane race to the bottom between our respective currencies. This development fits perfectly with the IMF plan to introduce Special Drawing Rights (the SDR) as the new global reserve currency, though I’m sure it’s all just a coincidence…

The ECB is also facing serious resistance from Germany, which has been shelling out the largest portion of bailout funds for countries like Greece, Ireland, and Portugal. Germany is tired of playing sugar daddy to the EU, which could conceivably lead to a breakup of the union itself, even with the implementation of fiat injections.

4) Blame Game Overdrive

The blame game is about to get ugly. When economic catastrophe is on the line, civility goes out the window. Who will be the primary target besides ratings agencies? Why fiscal conservatives, of course! Obviously, the Tea Party is full of “terrorists”, and real conservatives are the true culprit behind the collapse because we have this annoying tendency of pointing out that our spending addicted government is dragging us hogtied on a speedboat to Hades.

Please, America, don’t blame the Federal Reserve for feeding the derivatives bubble and destroying our currency. Don’t fret over global banks like Goldman Sachs that deliberately conjured the credit crisis. Don’t attack the government for lending a helping hand to these entities in their quest for complete financial centralization. Instead, shoot the messenger. We love that…

5) Drastic Measures

An announcement by the Fed of yet a third QE stimulus package is a certainty. If the market reaction is especially negative this week, an announcement could even be made before this month is out. I have no doubt, QE3 will be the undoing of this country. Any further devaluation of the dollar will NOT be tolerated by creditor nations who have much to lose if the process of U.S. inflation continues. Treasuries will be dumped. The dollar will be dumped. And, America will have little choice but to hyperinflate to keep up with rising debt burdens.

Those who believe that the U.S. is not expendable in terms of the world economy, and believe that foreign nations will continue pouring money into our coffers because they “have to”, are kidding themselves. We are dealing with an engineered global shift. For central bankers, the U.S. economy is no less expendable than an aging sports car. It can easily be replaced with something newer, shinier, and more compact. Something that will get more girls. The call for “international regulation” of U.S. finances will become the rallying cry of elites across the planet, as well as the largest holders of our exponential debt. The current system will be sacrificed to make way for an IMF controlled body of unaccountable economic overseers.

This is not theory. This is not conjecture. This is reality. The credit downgrade of the U.S. is a concrete trigger point that sets all of the above proceedings in motion.

People will ask for hypotheses on time frames for the events above. I don’t have any, though this week’s market attitudes will be revealing as to the speed that events will take shape. So many interacting factors are present that any specific time predictions on the progress of collapse would be unrealistic. For the short term, watch Federal Reserve activity carefully. Introduction of new QE will be extraordinarily volatile. For the long term, watch wholesale and retail prices of goods, along with treasury auctions and foreign flights from U.S. bonds. One thing is certain, the final half of 2011 will be remembered as a historical turning point for us all.  That said, the trials ahead were never the issue. That which is most important is how we RESPOND in these moments. How we adapt. How we function. How we fight back. Disasters do not make history. We make history. As overwhelming as the currents of such events may feel, in the end, they are subservient to the actions of resolved men. Nothing is fated. The conclusion depends upon us.

This article was originally published here:

http://www.alt-market.com/articles/214-america-makes-the-cut–so-what-happens-next

It was a great way to connect with some like minded people and gain some new information.

I hope these types of events start occurring across the globe. People need to wake up to prudent and proper preparation for their families and communities. If you cannot find a local expo like this, consider developing one in your area – I was amazed at the attendance – there were several hundred people through the door during the couple of hours I was there. I am sure the event coordinators made a decent profit on this event.

Food is one of those funny things it’s hard to live without. We all tend to take it for granted that our local supermarket will continue to offer whatever we wish, in abundance, at affordable prices or nearly so. Yet living without adequate food is the growing prospect facing hundreds of millions, if not billions, of us over the coming years.

In a sense it’s a genuine paradox. Our planet has everything we need to produce nutritious natural food to feed the entire world population many times over. This is the case, despite the ravages of industrialized agriculture over the past half century or more.

Then, how can it be that our world faces, according to some predictions, the prospect of a decade or more of famine on a global scale? The answer lies in the forces and interest groups that have decided to artificially create a scarcity of nutritious food. The problem has several important dimensions.

Eliminating Emergency Reserves

The ability to manipulate the price of essential foods worldwide at will — almost irrespective of today’s physical supply and demand for grains — is quite recent. It is also scarcely understood.

Up until the grain crisis of the mid-1970s there was no single “world price” for grain, the benchmark for the price of all foods and food products.

From the time of the earliest traces left by Sumerian civilization some two thousand years before Christ, in the region between the Tigris and Euphrates rivers in today’s Iraq, almost every culture had the practice of storing a reserve stock of a grain harvest – right up to the most recent times. Wars, droughts and famines were the reason. When properly stored, grain can be safely stored over a period of about seven years, enabling reserve stocks in case of an emergency.

After the Second World War, Washington created a General Agreement on Tariffs and Trade (GATT) to serve as a wedge to push free trade among major industrial nations, especially the European Community. During initial negotiations, agriculture was deliberately kept off the table at the insistence of the Europeans, especially the French, who regarded political defense of Europe’s Common Agriculture Policy (CAP) and European agriculture protections as non-negotiable.

Beginning in the 1980s with the political crusades of Margaret Thatcher and Ronald Reagan, the extremist free market views of Chicago’s Milton Friedman became increasingly accepted by leading European power circles. Step-by-step the resistance to the Washington agriculture free trade agenda dissolved.

After more than seven years of intense horse-trading, lobbying and pressure, the European Union finally agreed in 1993 to the GATT Uruguay Round, requiring a major reduction of national agriculture protection. Central to the Uruguay Round deal was agreement on one major change:  national grain reserves as a government responsibility were to be ended.

Under the new 1993 GATT agreement, formalized with the creation of a World Trade Organization to police the agreements with enforceable sanctions against violators, ‘free trade’ in agriculture products was for the first time an agreed priority of the world’s major trading nations, a fateful decision to put it mildly.

Henceforth, grain reserves were to be managed by the ‘free market,’ by private companies, greatest among them the US Grain Cartel giants, the behemoths of American agribusiness. The grain companies argued that they would be able to fill any emergency gaps more efficiently and save governments the cost. That ill-advised decision would open the floodgates to unprecedented grain market shenanigans and manipulations.

ADM (Archer Daniels Midland), Continental Grain, Bunge and the primus inter pares, Cargill—the largest privately-held grain and agribusiness trading company in the world—emerged the great winners of the WTO process.

The outcome of the GATT agriculture talks was very much to the liking of the people at Cargill. That was no surprise to insiders. Former Cargill executive Dan Amstutz played the key role in drafting the agriculture trade section of the GATT Uruguay Round.¹ In 1985 D. Gale Johnson of the University of Chicago, a colleague of Milton Friedman, co-authored a seminal report for David Rockefeller’s Trilateral Commission that was the blueprint for what they called “market-oriented” agricultural reform. It provided the framework for the US position in the coming GATT Uruguay Round negotiations. The Rockefeller group and its think tanks were the architects of ‘agricultural reform,’ as with so much in our post-1945 world.

The process of eliminating government grain reserves in major producing countries took time, but with the passage of the 1996 Farm Bill, the US had virtually eliminated its grain reserves. The EU followed soon after. Today, among major agriculture producing countries, only China and India still hold to a strategic security policy of nationally held grain reserves. ²

Wall Street Smells Blood

The elimination of national grain reserves in the USA and EU and other major OECD industrial countries set the stage for the next step in the process—elimination of agricultural commodity derivatives regulation, allowing unbridled unchecked speculative manipulations.

Under the Clinton Treasury (1999 – 2000) the elimination of grain reserves was formalized by the Commodity Futures Trading Commission (CFTC)—the government body charged with supervising derivatives trade in exchanges such as the Chicago Board of Trade or NYMEX— and in legislation drafted by Tim Geithner and Larry Summers at Treasury. As will be shown below, it was no accident that Wall Street pushed Geithner, former President of the NY Federal Reserve, to become Obama’s Treasury Secretary in 2008, amid the worst financial debacle in history. Something to do with having foxes guard henhouses.

When Henry Kissinger was Secretary of State in 1972-1973, acting in league with the Department of Agriculture and major US grain trading companies, he orchestrated an unprecedented 200% jump in the price of grain. The price hike was triggered at that time by the US signing a three-year contract with the Soviet Union that had just gone through a disastrous harvest failure.

The US-Soviet deal hit amid global drought and severely reduced harvests worldwide, hardly a prudent time to sell the entire US grain cupboard to an ostensible Cold War opponent. The sale took place amid a major world grain harvest shortfall leading to the explosive price rise. Critical voices in US press at the time appropriately dubbed it the Great Grain Robbery. Kissinger had even arranged for much of the cost of shipping US grain to the Soviets to be paid by US taxpayers. Cargill and company laughed all the way to the bank. ³

Around the same time, the big American grain companies—Cargill, Continental Grain, ADM, Bunge—began what would be a twenty-year process of transforming world grain markets into venues for controlling essential human and animal nutrition by manipulating grain prices regardless of supply.

The twenty-year process of the US’ gaining control of world grain markets and prices took a giant leap forward in the 1980s with the advent of financial commodity index trading and other derivatives.

The Summers-Geithner-Wall Street new versoin of the earlier grain robbery especially after 2006 would eventually pale anything Kissinger and friends had engineered in the 1970s.

In 1999, at the urging of major Wall Street banks such as Goldman Sachs, JP Morgan, Chase Manhattan and Citibank, the Clinton Administration drafted a statute that would fundamentally alter grain-trading history. It was called the Commodity Futures Modernization Act and was made law in 2000.

The two key architects of Clinton’s new law were a former Goldman Sachs consultant and Clinton’s Treasury Secretary Larry Summers, and his Assistant at Treasury Tim Geithner, friend of Wall Street and today Obama’s Treasury Secretary. Secretary Summers was also a key player in preventing efforts to regulate financial derivatives in commodities and financial products.⁴

The Summers-Geithner recommendations were contained in a November 1999 Report to Congress from the President’s Working Group on Financial Markets, the infamous “Plunge Protection Team.” ⁵

At the time, the Commodity Futures Trading Commission (CFTC) proposed also to deregulate trading in derivatives between major banks or financial institutions, including derivatives of grain and other agricultural commodities.⁶

The historic and unprecedented deregulation opened a massive hole in Government supervision of derivatives trading, a gaping hole that ultimately facilitated the derivatives games leading to the 2007 financial collapse. It also formed the deregulation free-for-all that is behind much of the recent explosion in grain prices.

Some years earlier in 1991 Goldman Sachs had rolled out its own commodity “index,” which was to go on to become the global benchmark for derivatives trading of all commodities, including food and oil. The Goldman Sachs Commodity Index or GSCI was a new derivative that tracked the prices of some 24 commodities — from corn to hogs to coffee to wheat to precious metals and energy. From the point of view of Wall Street, the idea was brilliant. It let speculators gamble on the future price of an entire range of raw materials in one step, a kind of Wall Street version of a “one-step” gambling mall…

With the CFTC deregulation of commodity trading in 1999 Goldman Sachs was positioned to reap sweet financial rewards with its GSCI. Now bankers and hedge funds and other high-profile speculators were able to take huge positions or bets on the future grain price with no need to take delivery of actual wheat or corn at the end.

The price of grain was now run by the new casino masters of grain supplies — from Wall Street to London and beyond — who traded grain futures and options in Chicago, Minneapolis, Kansas City. No longer was future price a form of hedging limited to knowledgeable active participants in the grain industry, whether farmers or millers or large grain end-users – the individual traders who had relied on futures contracts for more than a century to insulate themselves from risks of harvest failure or disasters.

Grain had become a new speculative field for anyone willing to risk investors’ capital, high stakes gamblers such as Goldman Sachs or Deutsche Bank or high-risk offshore hedge funds. Grain, like oil before it, had now been almost entirely decoupled from everyday supply and demand in the short term. The price could be manipulated for brief periods through rumor rather than fact. ⁷

Unlike directly involved parties like millers or farmers or large restaurant chains, speculators neither produced nor took delivery of the corn or wheat they gambled with. They could hardly take delivery of 10 tons of hard red winter wheat and store it. Their game was a complex new form of arbitrage where the only rule was to buy low and sell high. Derivative instruments and US Government laissez faire regulatory negligence allowed the players’ potential profits from the game to be leveraged often many-fold.

But there was another perverse twist: Goldman Sachs’ GSCI was structured so that investors could only buy the contract. It was, as the industry calls it, “long only.” No one could bet on a fall in grain prices with it. You only stood to profit from an ever-rising grain price and that happened as ever more innocent investors were suckered into high-risk commodity speculation creating a kind-of self-fulfilling prophesy.⁸

That long-only feature was done to encourage bank clients to leave their money with the bank or fund for the long term and let the bankers play with other people’s money, with huge potential windfall profits to the bankers — while any losses fell to the clients.

The fatal flaw was that the GSCI structure did not allow “short selling” that would force prices down in times of grain surplus. Investors were lured into a system that required them to buy and keep buying once grain prices rose for whatever reason. Soon other banks, including Barclays, Deutsche Bank, Pimco, JP Morgan Chase, AIG, Bear Stearns, and Lehman Brothers, floated their own commodity index funds.⁹ For the first time, high-risk commodity investing — including into grain and other agriculture products — became a financial product for the “little man” who knew little if anything about what he was getting into, just that his banker or fund adviser was urging him to invest in it. The banks as usual played with “other people’s money” – at the expense of  ‘other people.’

In a detailed analysis of the grain price bubble of 2007-2008, Olivier de Schutter, a UN Special Rapporteur on the Right to Food, recently concluded that “a significant portion of the increases in price and volatility of essential food commodities can only be explained by the emergence of a speculative bubble.” ¹⁰ The timing of that bubble was notable as it conveniently offset huge losses of those same mega-banks that were under water with their excesses in securitized home mortgages and other Wall Street casino madness. Schutter added,

In particular, there is a reason to believe that a significant role was played by the entry into markets for derivatives based on food commodities of large, powerful institutional investors such as hedge funds, pension funds and investment banks, all of which are generally unconcerned with agricultural market fundamentals. Such entry was made possible because of deregulation in important commodity derivatives markets beginning in 2000. ¹¹

Following the collapse of the dot.com stock bubble in 2000, as Wall Street and other major financial players began seeking alternatives, commodities and high-risk derivatives based on baskets of commodities became a major speculative investment theme for the first time.

Since 2000 the totality of dollars invested in various commodity index funds –Goldman Sachs’ GSCI being the largest — has risen from some $13 billion in 2003 to a staggering $317 billion during the oil and grain speculation bubble in 2008. This was documented in a study by Lehman Brothers shortly before Treasury Secretary Henry Paulson made them a sacrificial lamb in order to bail out his Wall Street cronies.¹²

Since 2008 with some fluctuation, investor funds have continued to pour into various commodity funds, keeping food prices high and rising. From 2005 to 2008, the worldwide price of food rose 80 percent — and has kept rising. In the period from May 2010 through May 2011 the price of wheat rose again some 85%. “It’s unprecedented how much investment capital we’ve seen in commodity markets,” said Kendell Keith, president of the National Grain and Feed Association, in a recent interview. ¹³

The Food and Agriculture Organization of the UN estimates that since 2004, world food prices on average have soared by an unprecedented 240%. The offering of food commodities as a speculative alternative by the large banks and hedge funds exploded in 2007 when the US sub-prime financial tsunami first hit. Since then, speculation in food commodities has only gathered more momentum as other investments in stocks and bonds became highly dangerous. One result has been a predictably rapid rise in starvation, hunger and malnutrition in poorer populations around the world.

The FAO calculates that food-deficit countries will be forced to spend fully 30% more on importing food — with a world value of a staggering $1.3 trillion. Three decades ago, that international market was tiny; today it is overwhelmingly dominated by a small handful of US agribusiness giants. Agribusiness, like military exports, is a core US strategic sector, long supported to extraordinary lengths by Washington. It is part of a larger and rather private agenda shaped decades ago under the aegis of the Rockefeller and Ford Foundations and their eugenics advocates. ¹⁴

Importing food is today the rule rather than the exception as cheap, globalized agribusiness products, often under IMF pressure, are being forced onto populations across the developing world, including formerly self-sufficient food-producing societies now rendered dependant on imported food. This is done in the name of  ‘free trade’ or what is often called ‘market-oriented agriculture.’ Left unsaid is that the so-called ‘market’ is colossally inefficient and unhealthy, literally and financially. Imported food dependency is artificially created by huge multinational conglomerates such as Tyson Foods, Smithfield, Cargill or Nestle, corporate giants whose last concern seems to be the health and well-being of those of us who must consume their industrial food products.

The cheap agribusiness imports often undercut the prices of locally grown crops, driving millions from their land into overcrowded cities in desperate search of jobs.

Today the price of wheat derivatives, or ‘paper wheat,’ controls the price of real wheat as speculators like Goldman Sachs, JP Morgan Chase, HSBC, Barclays or numerous offshore hedge funds — with little interest in grains other than as a profit source — now outnumber bona-fide agriculture industry hedgers four-to-one.

That is a complete reversal of the situation that dominated grain prices for the past hundred years or more. For some 75 years, the CFTC had imposed limits on how much of certain agricultural commodities — including wheat, cotton, soybeans, soybean meal, corn, and oats — can be traded by non-commercial players who are not part of the food industry. So-called ‘commercial hedgers,’ like farmers or food processors, previously could trade unlimited amounts in order to manage their risk. Not so with pure speculators.

Those limits were designed to prevent manipulation and distortion in what are relatively small markets. With the passage of the Summers-Geithner Commodity Modernization Act of 2000 and the infamous ‘Enron Loophole’ — allowing exemption from government regulation — the fast and loose trading in energy derivatives was rapidly expanded to include food commodities. The dam broke in 2006 when Deutsche Bank asked for and was granted CFTC permission to be exempt from all trading limits. The regulatory authorities assured them that there would be no penalties for exceeding the limits. Others followed, lemming like. ¹⁵

For some two billion people in the world who spend more than half of their income on food, the effects have been horrifying. During the speculation-driven grain price explosion in 2008, more than a quarter billion people became what the UN terms “food insecure,” or a total of one billion human beings, a new record. ¹⁶

That need never have occurred had it not been for the diabolical consequences of the US Government deregulating grain speculation, with support from the US Congress over the past decade or more. By early 2008, upwards of 35% of all US arable land was being planted with corn to be burned as biofuel under the new Bush Administration incentives. In 2011 the total is more than 40%.  Thus, the stage was set for the slightest minor market shock to detonate a massive speculative bubble in grain markets, as was then being done by the use of the same GSCI index games as are played with oil.

Editor’s Note: This editorial will continue with Part 2 – Agribusiness as a Long-Term Strategy [1] and be concluded June 30, 2011.

Resources

1. F. William Engdahl, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, www.GlobalResearch.ca [2], Montreal, 2007, pp. 216-219.
2. Sophia Murphy, Strategic Grain Reserves In an Era of Volatility, Institute for Agriculture and Trade Policy, Minneapolis, October 2009.
3. Anon., Another Soviet Grain Sting, Time, November 28, 1977, http://www.time.com/time/magazine/article/0,9171,919164,00.html#ixzz1NMsb5yQY [3]
4. PBS, The Warning, Public Broadcasting System, October 20, 2009, accessed in http://www.pbs.org/wgbh/pages/frontline/warning/view/#morelink [4].
5. Lawrence Summers et al, Over-the-Counter Derivatives Markets and the Commodity Exchange Act: Report of The President’s Working Group on Financial Markets, Washington, D.C., November 1999.
6. Cadwalader, Wickersham & Taft LLP, CFTC Releases Plan for Market Deregulation, March 1, 2000, accessed in http://library.findlaw.com/2000/Mar/1/128962.html [5].
7. Frederick Kaufman, How Goldman Sachs Created the Food Crisis, Foreign Policy, April 27, 2011, accessed in http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis [6].
8. Amine Bouchentouf, et al, Investing in Commodities via the Futures Markets, accessed in http://www.dummies.com/how-to/content/investing-in-commodities-via-the-futures-markets.html#ixzz1PdYxiCqD [7].
9. Ibid.
10. Olivier de Scheutter, Food Commodities Speculation and Food Price Crises, Briefing Note 02, September  2010, accessed in http://www.srfood.org/images/stories/pdf/otherdocuments/20102309_briefing_note_02_en_ok.pdf [8]
11. Ibid.
12. Frederick Kaufman, The Food Bubble: How Wall Street starved millions and got away with it, July 2010, Harper’s Magazine, pp. 32, 24.
13. Frederick Kaufman, How Goldman Sachs Created the Food Crisis, Foreign Policy, April 27, 2011, accessed in http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis [6]
14. Neena Rai, et al, High Food Prices Pose Threat to Poor Nations, The Wall Street Journal, June 8, 2011.
15. Global Labour Institute, Food Crisis—Financializing Food: Deregulation, Commodity Markets and the Rising Cost of Food, Geneva, June 7, 2008, accessed in http://www.globallabour.info/en/2008/07/financializing_food_deregulati.html [9]
16. Ibid.

About the Author

Recently, my wife’s debit card got damaged so it would not swipe anymore. To use the card she needed to have the merchant manually enter the number to complete every transaction – so it was time for a new card. She called the bank and explained the situation, the customer service agent put her on hold and after he returned he informed her that her old card was cancelled and a new card was on the way which would take about 10 days. “Wait!” she said, “I do not want to cancel my card, I simply want a replacement!”. His response was “Oh, sorry – it is already done and cannot be reversed”. After speaking to his supervisor, we discovered that he clicked the wrong button and there was not any reversing of the process – we were now left without a debit card (access to cash) for 10 days. (they did offer to FedEx it quicker, but would still take 5 days). So here we are, heading into the 4th of July weekend without access to cash.

This got me thinking – why would I allow some institution the power to allow or disallow access to something that belongs to me – especially money, which is something we need to function almost every day. A simple click of a button by mistake and I am stranded cash wise. (being the prepper that I am, I do have other options – so I am not really stranded, but it still got me thinking).

I have another account at a separate bank – which was setup with this very situation in mind. (yes – preps do pay off!).

Here are some tips to avoid being cash stranded:

• Open another account at a separate bank. This spreads things out  – if one bank has “issues”, the 2nd one will more than likely be OK.
• Start using cash more on a daily basis. Wean yourself from electronic transactions. Yes, this is not as easy on a daily basis, but you will find that you probably end up spending less. Something psychologically happens when spending cash vs. handing over plastic.
• Keep cash savings at home. You should keep a significant amount of cash in a safe place – both safe from theft and fire. I suggest at least 2 weeks worth of expenses.

The bottom line is – have a plan where you can still stay functional if your financial institution clicks a wrong button, or something worse (closes). Our banks are FDIC insured, but that can take months (or years) to regain access to your money.