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Friday, July 16, 2010

The terror lurking below

BP claims to have sealed the well, but it's likely that the wellhead has been damaged to the point it can't contain potential leaks. The pressure at the new well cap may fall within tolerable thresholds because it's coming out somewhere else. The absence of information about what's happening on or around the wellhead on the sea floor makes the extent of secondary leaks unknown by anyone outside the BP/Fedgov response team.

I'm guessing that this story is far from over. In part I do this based on the apparent ease with which this gusher has been stopped. I wish I could say I was wrong, but the evidence of a far worse and perhaps worsening problem is compelling.
BP wants to mask the worst case scenarios out of self-interest. It could be removed from the crisis response team and lose control over the PR effort that is attempting to minimize the political costs and fines associated with the spill.

Wait a second! We've got BP still in control of the clean-up despite the fact that they're facing a fine per barrel of oil leaked. This means the company has every incentive to disguise the scale of the disaster. And that motive has likely guided the choice of dispersants.

An EPA study deemed that Corexit 9500 is safe based on a 96-hour testing timeframe using shrimp larvae and river fish. The tests are also conducted at temperatures far below the Gulf's. With all that oil in the Gulf, it's possible Corexit could have far more toxic effects. A petition to stop the use of solvents (Corexit 9500 can be classified as this) is circulating on the Web here: Stop Using Solvents In Our Oceans Petition.

As I've said before, the Corexit reduces the size of the oil molecules to that which can be airborne, meaning oil can be carried in the rain. See YouTube - Breaking: BP Gulf Oil Spill Toxic Rain Falls on Cars, Ground, Central Texas; I also saw some disturbing videos from the Miami area, where evidence of chemical burns appears on vegetation. It could be the oil, or the dispersant, or some chemicals emitted by ruptures on the sea floor.

Another nasty potentiality is a hurricane strengthened by the higher water temperatures created by the abundance of oil in the water. We don't know how much warmer the Gulf is but we can be certain a hurricane would be strengthened.

There are rumors that the Coast Guard is actually spraying bleach on beaches to cover up the oil there. We do know that extensive efforts to cut off public access to beaches have been made. Reporters and media people appear to be singled out for special treatment and arrest. Just what is it that has BP and the authorities so concerned? Possibly it's the images of stricken wildlife like these that could sufficiently enrage the population. Perhaps if enough people get angry enough, the current response would appear inadequate and new more drastic actions taken.

Now BP and the powers-that-be do have a reason to keep beach-goers away due to the toxicity of the oil. Amazing it is to me that anyone would go near the oil. This isn't refined crude! The oil is toxic and corrosive. Additionally volatile and caustic effects on boat hulls and skin have been recorded. If the oil can eat through a boat's hull, your accidental tourists should hardly let the kids play in it.

Then there are the toxic gases emerging alongside the oil. Industry expert Matt Simmons has been interviewed in a number of media outlets (a six-part interview on Christian radio is here; Simmons was on Dylan Ratigan show briefly yesterday (link here.) [Ratigan has a great rant against the financial industry--I'll link to it in a future post perhaps.]

Benzene is one of the major threats, alongside methane. The possibility that a giant methane gas bubble is building has many people scared. Should the methane deep under the ocean floor melt (it's currently locked into solid form), the sea floor could rise, bulge and erupt. Methane, when brought to the surface, would make all surface ships sink due to a loss of buoyancy. It's suspected in Bermuda Triangle disappearances.

A leak large enough could doom the whole world to a Permian-type event, at least according to one article in The Guardian. Methane is a greenhouse gas that heats the atmosphere; I read that the Gulf spill has put more methane gas in the atmosphere than any other documented event in the modern era.

Then there's the possible tsunami created by a massive undersea displacement of seawater as the methane bursts forth. I'd consider this possibility narrow, but utterly catastrophic due to the size of the tsunami, which could be large enough to cross Florida.

A hurricane could accomplish the same type of damage, albeit on a more limited area of effect. All the toxins associated with the leaking oil could be blasted deep into the interior where they could pollute inland lakes and waterways. Not an appealing prospect.

Finally, I wanted to link to a comment I made at OpEdNews concerning the Gulf oil spill. I come down a little hard on the article author, who's genuinely concerned about the pattern of ecological abuse inflicted on people in the Gulf region. As much as I want to be sympathetic, at this point I believe that:
the effectiveness of their message can be diluted by worthy but irrelevant social justice and green energy issues. The Gulf tragedy is best messaged as an economic event, because that's what our capitalism-based political system recognizes and will respond to, not the plight of the "small people." Call it realpolitick, or whatever, but the top priority needs to be getting the spill stopped.

In no way do I want to distract the public from the gravity of the threat, and as important as the longer-term trends are, the blogosphere has a much more urgent priority in watchdogging this tragedy and its response.

7-18 Addendum
Keith Olbermann continues to assert threats posed to First Responder safety. See this video episode from MSNBC.

He brings up the toxicity of the dispersants and offers the link, www.BPmakesmesick.com

Olbermann's guest, Marylee Orr of the Lousisiana Environmental Action Network, says that over 7 million gallons of dispersants have been used, a jump over the "hundreds of thousands" of gallons claimed in the intro part of the video segment.

The fact we don't know how much has been used exposes the ulterior motive of BP to disguise the toxicity of its response. BP's unwillingness to let clean up workers wear masks show they're hypersensitive to bad PR which could emerge once facts about the scale of the disaster and the health dangers caused by BP's response are exposed.

The severity and frequency of First Responder sickness should be a source of concern for regulators and government but isn't. Halfway down this page is an older Olbermann video from June on this major health threat called T.I.L.T. Toxicant-Induced Lost Tolerance.

Can we trust BP? And Fedgov delegates oversight to the company, can we trust FedGov? If you're a clean-up worker, I'd hire a good lawyer for the class actions that will come. I guess we could see a replay of the 9/11 First Responder tragedy, where no one is willing to help with the medical costs. Meanwhile responders must choose between wearing masks or feeding their families. Like the 9/11 First Responders, many will die--their sacrifice on our behalf remembered only by their families.

Like Nixon and Watergate, it's the coverup and lying that provides evidence of an underlying crime.

I'm going to take a contrarian viewpoint here and predict that the well is still leaking (although perhaps not at the top). Would BP tell us that the capping process can't seal the multiple subsurface leakS, if they've expanded across the sea floor? I suspect that BP will use the capping procedure as a legal defense to claim the other leaks aren't its fault. The story about all those other capped, abandoned wells strewn about the Gulf could support that lie.

Sources (more recent first):
1) Dispersant facts
2) ah, mephistophelis.: More Dispersant Used Than Oil Spilled In Any Previous Accident
3) Oil Spill - BP Trying To Hide Toxic Oil with Corexit Chemical Dispersant Agent?
4)BP Looks to Profit from Oil Salvaged from Gushing Well | CommonDreams.org
5) Underwater Oil Plumes In Gulf EXPOSED By ABC News (VIDEO)
6) Gulf oil spill: BP has a long record of legal, ethical violations - More News - MiamiHerald.com

Gulf Oil Spill Tracker


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Thursday, July 01, 2010

A new struggle for Independence begins

I'm afraid America's fallen off track, perhaps irrevocably so. Humpty Dumpty fell off the wall kind of stuff. We're getting beat by the Chinese, who are working for less. Our leaders have abandoned domestic employment for offshoring and outsourcing. Worst of all, there appears to be no end in sight to the draining of the American economy.

Now for quite some time wages have been falling in real terms. "Real" is defined in economic terms as the true purchasing power of the dollars that we earn. If prices go up, and our wages go up a corresponding amount, then income gains are cancelled out.

Most Americans are woefully ignorant about the present value of money--the concept that our money loses value over time. Instead, prices are said to be going up while in fact it's the dollar that's going down. Nowhere has this been clearer than with the price of gold. Speculation drives prices up, yes, but it's ultimately the weakening purchasing power of the dollar that makes commodity prices rise.

If Americans really knew how the current banking system was set up to devalue their currency, they'd grab their pitchforks and storm the castle. Ignorance therefore plays a vital role in perpetuating the myth that the dollar is a store of value when it's really designed to lose value, 96% of it as a matter of fact since the inception of the Federal Reserve.

So if you had bought dollars in 1913, put them in your mattress and pulled them out, they'd be worth four cents in today's money (excepting of course the value of the physical currency to collectors.) Perhaps a better example would be the penny. So devalued has the penny become that Congress actually had to pass a law to prevent pennies from being melted down for scrap--the copper in them is worth more than one cent. Eventually our currency will be so devalued that a penny might only be worth a quarter of a cent, an eighth, and so on until its copper value becomes too expensive to justify its use in the coin. Perhaps you've seen the cheap foreign currencies made from aluminum.

So the penny is a proxy for our weakening currency. Yet most Americans ignore the constant devaluation of their currency. I say "their" because it is the people's money. Their representatives in Congress--at least they should be "theirs" according to the Constitution--have the exclusive right to control the issuance of money. Every year, Congress grants the Federal Reserve the right to distribute money. Not surprisingly, every year the Federal Reserve brings into existence more money, meaning the money out there is worth less.

Say the Federal Reserve expands the money supply by 100%. Instead of, let's say, $5 trillion in circulation, there's $10 trillion. Imagine if a corporation did that with their stock, doubling the amount issued every year. What would happen to the poor saps who bought last year's stock? Where would the price go? Well unless the company had a banner year, the stock price would likely fall, perhaps by half. Why? The ownership shares which the company issues in the form of its stock get diluted. More shares: existing shares worth less.

Now the same is true with your money. The government upon which people depend to preserve the value of their savings is actually working against them. It's diluting the value of existing dollars by printing or distributing more of them.

Now of course the Treasury and the banks that constitute the Federal Reserve have their little tricks...well, ok, maybe not so little...to conceal the massive increases in money supply. First, they abandoned tracking the amount of money in circulation a few years back. A valuable statistic called M3 was no longer made public. As a result of the change, following the real quantity of dollars out there became more challenging, subject to more subjective analysis, and therefore harder to pinpoint.

Why did the government abandon tracking? Well, you could say they have something to hide. Something called shadow banking. Shadow banking is a system of loans and securitization of debts that allows banks to create money in the present from debts payable in the future. By lending amongst themselves, banks can convert a stream of future payments--a mortgage payout, let's say--into what's called a "present value". The present value is of course dependent on how certain the debt is to be repaid. As we saw in the mortgage crisis, the level of debt repayment uncertainty rises, so too does the risk premium, or amount that lenders charge borrowers, goes up. Perhaps way up, to the point the funds from investors simply aren't available, except at usurious rates.

Now the problem with securitization of all those mortgages--securitization means the process of converting future payments into a present day value--is that assumptions have been built into the value of the debt, assumptions that may not be true, or subject to changing conditions.

As the uncertainty of mortgage borrowers ability to repay climbs, the appetite for risk among the banks declines. You end up with a situation a lot like you see today, where lenders are hesitant to lend, or at least stop lending cheaply.

Now the purpose of my explanation here is not to review the reasons for the mortgage crisis. Instead, I wanted to offer as full an explanation of why the US economy is about to experience a second meltdown.

History often repeats itself. If the causes for the meltdown in 2008 (and the decline in stocks through 2009) still exist today, then the probability of a reoccurrence remains. And the magnitude of the correction could be even larger if the causes of the past meltdown haven't been reduced or eliminated.

I could go over the conduct of companies which had a key role in the mortgage meltdown--either profiting from it, or exploiting it and/or the subsequent bailout, but that's not relevant really for a couple of reasons. All that really matters is the system that allowed the mortgage crisis to occur still remains.

If you've read anything that I've been saying over the past four years, you'll surely know that I'm predicting a major crisis at this point. And it won't be an economic cause. Whatever our nations struggle with international competition, the reality is that our financial system is completely demolished. The regulatory bodies failed the American people in 2008 haven't been repaired. The so-called financial reform, as far as I can tell, doesn't go far enough in preventing the kind of abuses that made the 2008 crisis possible.

Former bank regulator Bill Black has blamed the collapse on mortgage fraud. Fraud is an important word. It essentially means to employ deceit or trickery. The truth represents a threat to the fraudsters; they operate using a opaque screen to cover their misdeeds. And our government, which should be regulating the financial entities, has been compromised utterly by their political influence.

We've reached a point of no going back. The relationship between cronies within/into/out of government, and corporation and government have become too strong. The democratic will of people--as established in the vital preamble to the Constitution--has been violated. As a result, I can go on no longer in placing my faith in the operation of government, or its role in regulating the currency.

In my opinion, the lack of regulatory enforcement is a window into the murky cross-relationship between those with money and those in power. The only way to end such a relationship is to let the economy go where it must--where the pain of going as as we do exceeds the pain of change.

Of course the ramifications of no change will continue to grow, and manifest themselves in the state of our economy, and in other troubling ways. Catherine Austin Fitts has labelled the system built around making profit from misery a tapeworm economy. The Military Industrial Complex and the Banking Establishment have grown so powerful that they now control our nation's policies at the highest level, no matter their popularity or acceptance. And the two-party system avoids accountability, by exchanging twiddleedee with twiddleedum every so often, in periods long enough to capitalize on the American public seeming mystifying inability to remember.

Why do I write this? Not to depress you, the reader, but rather to warn you of the need to take action. Protect yourself from the constant devaluation of the currency. And unfortunately I must recommend you divest yourself of the American stock market until such time as the Republic--and its controls over the corporate sphere--have been reestablished.

I'm not expecting miracles overnight. It will take a great deal of courage and strength to contest the status quo. Absent resistance to the order, it's likely the economy will slide into ever worsening stagnancy, with constant devaluation of our savings and lethargy in the stock market or worse. The need for real lasting political change overshadows now whatever confidence remains in the system, a system so corrupt and rotten it can only be removed in entirety. Pull the root, and don't hack at its branches.

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