Content Industry War on Sharing Claims Another Victim

LendInk, an innovative site dedicated to helping readers share their legally purchased ebooks with one another, has chosen to shut down in the face of legal intimidation. Despite the fact that the site was apparently operating within the terms of service of the Amazon Kindle and the Barnes & Noble Nook, its hosting company was targeted with "hundreds of threats," including cease-and-desist letters.

LendInk didn't even host any ebooks itself: it simply connected users seeking a particular title with other users who had a legally-purchased ebook to lend. The site planned to eventually make money by providing links to purchase books through the Amazon affiliate program, but for the past year it had been operating without income.

This shutdown sets a dangerous precedent for the future of innovation in the ebook world. It creates confusion for consumers about what behaviors are actually legal and will likely have a chilling effect on entrepreneurs that could otherwise create new businesses — and new profit centers for the publishers. In an interview with Digital Media Machine, LendInk's owner Dale Porter expressed his disappointment in having to shutter his business:

I am simply a hard working guy that was trying to provide a legit service. ... Sadly, it appears that my American Dream has been left as road kill at the hands of misguided individuals.

That those misguided individuals were able to target his site so effectively is a potent reminder that free speech is only as strong as the weakest link. In this case, the threats took the form of cease-and-desist letters to his hosting service — and as a result, he hasn't even had the opportunity to review the notices himself. As he told Digital Media Machine, it's not even clear yet whether the notices are from authors, publishers, or both.

But it's clear that the individuals are misguided, because LendInk only enabled activities that had already been approved by the rightsholders. In fact, all of the lending enabled by the site took place through the built-in Kindle and Nook lending features, which are extremely limited in comparison to a traditional book. Not only is it limited to ebooks that have been explicitly "lending-enabled," but each copy of the ebook may also only be lent exactly once for a total of 14 days. Loans can only be initiated by a user in the United States, but may be unsuccessful if the recipient is in a country with additional geographic restrictions.

Of course, these barriers come from contracts, not from limitations in the technology. It's clear that while ebooks could in theory be more flexible and versatile than paper books, prohibitive licenses have prevented that from happening.

As author and EFF Fellow Cory Doctorow has put it, "Everyone knows that it's a bug and not a feature that if one person is reading a book, someone else can't." Instead of trying to patch the bugs that afflict traditional books, publishers use DRM software and restrictive licenses to suppress the potential new features.

Some of these efforts even attempt to unravel the first sale doctrine, which has long been a cornerstone of U.S. copyright law. That principle means that "if you buy it you own it," and it's the way used bookstores can exist. Indeed, it is essential to real-world book-sharing communities like BookCrossing and BookMooch.1

The legal threats against service like LendInk are not about sales. Rather, they are just the latest efforts in a wrongheaded campaign to crush any segment of the content distribution chain that lies outside of the rightsholders' traditional direct control. The same mindset drove Warner Brothers to sue Redbox, the kiosk-based DVD rental operation, even though it was perfectly legal under the first sale doctrine. It's led Capitol Records to sue an emerging marketplace for "second-hand" digital music, even though used music sales have existed for decades. It's even behind the Association of American Publishers' stubborn opposition to a treaty that could end the "famine" of accessible books that devastates the visually impaired community.

Needless to say, this mindset can only result in less innovation. And that's bad for readers, it's bad for platform developers, and in the end it's bad for publishers, too.

Source: EFF

Microsoft and Bloomberg Collaborate on Sophisticated Pre-Crime Technology

Michael Bloomberg, Mayor for New York and Raymond Kelly, police commissioner, are collaborating with Microsoft to create pre-crime and counterterrorism technology to aid federal intelligence and local law enforcement agencies domestically and internationally.

The Domain Awareness System (DAS) will be a very sophisticated software technology that aggregates and analyzes public information in real time that will produce comprehensive reports to be used by NYPD to ascertain potential threats and pre-crime activity.

By utilizing smart cameras and license plate readers, combined with Microsoft technologies, NYPD personnel can search suspects, allegedly suspicious packages, and any other information at their disposal to control possible criminal action in NY.

Graphical interface, environmental sensors and law enforcement databases will be interlaced so that crime analysis can effectively allocate proper man-power and improve response to potential situations. This creates an aggregate of information for the NYPD to use in real-time.

Over 3,000 CCTV cameras will be connected to the DAS that are spread throughout NYC.

As part of the agreement, 30% of the revenue on Microsoft’s future sales of DAS will be redirected to fund more pre-crime efforts by NYC. In addition, the NYPD will confer with Microsoft on their use of the DAS and any innovative revisions of the software that comes from real-time use. This shared knowledge is meant to consistently improve the technology; which makes the NYPD a beta-testing ground for the future of Big Brother surveillance technology.

In a formal statement, Bloomberg said that to justify this use of pre-crime technology he will be “devoting considerable resources to counter-terrorism. . . our heavy investment in technology and our willingness to develop new, cutting-edge solutions to keep New Yorkers safe.” The DAS software provided by Microsoft will “allow police officers and other personnel to more quickly access relevant information gathered from existing cameras, 911 calls, previous crime reports and other existing tools and technology. It will help the NYPD do more to prevent crimes from occurring.” Bloomberg also added that the revenue generated from the sale of DAS will “fund more new crime-prevention and counter-terrorism programs.”

Kelly added that the development of the DAS was “by police officers for police officers.”

The real-time analytics and situational awareness DAS generates is touted to improve public safety for New York residents. The New York Wireless Network, which is a high-speed, mission-critical wireless broadband infrastructure, will aid DAS to extend the ability of officers to survey average citizens on the streets.

The DAS will allow the NYPD to:

• Gain real-time access to video feeds and all citizens arrest records as well as any 911 call wherein the potential suspect was named.
• Chronological and geospatial maps of citizen’s criminal history and patterns.
• Track cars related or associated with potential suspects.
• Retrieve information from various databases for appropriate deployment of resources.
• Review video feeds where potentially harmful packages are delivered.
• Connection to radiation detectors throughout the city and immediately alert the Lower Manhattan Security Initiative command center.

In the interest of fighting terrorism, the Department of Homeland Security (DHS) created the Future Attribute Screening Technology project (FAST) that utilizes sensor technology to detect cues “indicative of mal-intent” defined as intent or desire to cause real harm.

By monitoring psychological and behavioral cues that are entered into real-time algorithms FAST can predict the probability of a crime being committed by any person. FAST was reported to be 70% accurate, according to field test research. However, the conclusions of the study are deceptive and reliant on the researcher’s foreknowledge of the intent of the individual being monitored.

In a DHS privacy impact assessment, FAST was tested on volunteers that were pre-sorted into groups wherein one group was “explicitly instructed to carry out a disruptive act, so that the researchers and the participant (but not the experimental screeners) already know that the participant has mal-intent.”

This fact lends to the strong possibility that FAST could be used to generate false positives that would make criminals out of average Americans.

In June of 2010, DHS admitted in a document that data mining is being conducted on all members of the American public in conjunction with FAST. They also state that in initial trials of FAST, DHS employees were used as test subjects.

Source: Activist Post

Occupy Corporatism
August 9, 2012

Vaccines being created now are done so with patented GMOs mixed with human DNA which creates broken information that are read by the cells of the body and directly translates to disease in the body.

The pandemic fear surrounds such genetically engineered bio-weapons such as the bird flu H5N1 that continually changes its make-up which is not a naturally occurrence. A propaganda study led by Ron Fouchier, professor from Erasmus Medical Center, researched which viruses would cause pandemics so that the pharmaceutical industry could get to work on focused vaccines and pressure governments to push them onto the general population.

Fouchier claimed that he proved H5N1 mutated naturally, although scientists analyzing the virus found that it is 3 different types of flu spliced together.

Global propaganda surrounding vaccine necessity is evident in the Peak Body Childcare Queensland that kept illegal files on unvaccinated children. According to Gwynn Bridge, Childcare Queensland’s chief executive, “Maintaining a current list of children who are not immunized is vital as these children must be excluded if there is any outbreak of a disease (that can be immunized against).”

Those parents who choose to have their children vaccinated receive financial kickbacks under the guise of “controlling infectious diseases”.

The scientific community is mounting evidence that vaccines are directly causational to the appearance of superbugs and bacteria that threaten the future of the human race. And what these researchers are calling for – more vaccines .

Scientists are finding that the whooping cough vaccine contributes to the colorization of the bacteria in the lungs. In real world observation, we are seeing a rise in whooping cough, despite the increased inoculations.

Recently the Centers for Disease Control and Prevention (CDC) have come forward to war people about the dangers of pigs, contact with pigs and a new strain of swine flu that is most likely to affect children in the US.

The new strain is derived from the original virus which came to light in 2009. This shows the new type has been engineered; as it is an amplified version of the first.

The justification for boys having the HPV protecting Gardasil vaccine was that it supposedly demonstrated protection to the unvaccinated. A study to be in Pediatrics this month will apparently prove this point. However before the findings are released to the public, the pharmaceutical industry have begun their campaign to inoculate as many boys as possible.

The National Cancer Institute, holder of the patent and financial beneficiary of HPV vaccines assisted drug corporations having their inoculant approved by the FDA that would then be pressured onto the general public.

Studies were suppressed that showed the HPV vaccines enhanced cervical cancer incidents.
Merck, manufacturer of Gardasil, has been recently caught falsifying results of its MMR vaccine so that the CDC would continue to provide funding. The German pharmaceutical corporation began as a bio-weapons firm in 1942 and specialized in weaponizing bacteria and viruses.

In the 1990s, Merck began playing with the vaccine test results to reflect 95% efficiency to keep their federal funding contracts for the MMR inoculations. Merck added animal antibodies to assist in the falsified results while continuing to spread contagion in their vaccine.

In Italy, a court awarded the parents of a boy who developed autism immediately after receiving the MMR vaccine at 15 months old. Although the pediatrician refused the parent’s suspicions that the inoculation caused the drastic change in behavior, the Italian Health Ministry disagreed.

The Public Readiness and Emergency Preparedness Act of 2006 (PREP) allowed the federal government the power to declare a national emergency for any infectious disease that was believed to be spreading throughout the general population. It also required that vaccinations be made mandatory in the US.

Testing for the efficiency of inoculations goes back to German concentration camps where IG Farben (the drug cartel consisting of BASF, Bayer and Hoechst) and pharmaceutical and chemical corporations that used these people in experimentation to create a master race.

Chemical laced foods and vaccines were forced onto the populations of concentration camps to test and record the reactions of the human body to such an assault. Vaccines contain many ingredients that are toxic and cause cancer. Adverse effects and fatalities are becoming the norm.

• Trial results for vaccines are mostly based on animal testing
• Vaccines contain thimersol, a mercury-based preservative
• Squalene is an adjuvant that causes inflammation of the nervous system
• Genetically modified bacteria compromises the immune system, causing a Cytokine storm that blocks passageways in the lungs

Vaccinations cause more harm than good. The push of the medical industry to vilianize natural medicine has been a long battle. In modern times, censoring of alternative medicine by the medical “professionals” is fronted by an Australian group of scientists called Friends of Science in Medicine (FSM). They are demanding that natural medicine be classified as a pseudo-science and made invalid. The FSM is supported by Gustav Nossal, biologist and creator of cervical cancer vaccines.

There focus is on homeopathy, naturopathy, iridology, chiropractic studies.

FSM, headed by John Dwyer, emeritus professor of medicine at the University of New South Wales, calls for the UK government and health insurance corporations to stop financially supporting their customers use of alternative medicine.

Not only is the assault against alternative medicine, but it is intended to eradicate the public’s ability to use natural remedies. The relationship between the pharmaceutical industry and governments is quite strong. Propaganda has successfully changed the social meme and created generations dependent on drugs to keep them healthy; although the evidence shows that they do more harm than good.

As recently as the beginning of the 20th century saw the prevailing use of natural medicine; in a time before drug corporations had convinced the general public that medical treatment could not be effective without them. However, this lie was purveyed simply to make the use of pharmaceuticals more prevalent than natural medicine because this way sickness could be managed and maximized for profit’s sake.

Source: Occupycorporatism

Sudan’s Mass-murdering Tyrant May Join UN “Human Rights” Council

Opponents and liberty-minded activists are up in arms over the fact that the genocidal mass-murderer ruling over Sudan, Islamist Omar al-Bashir, is set to be elected to the United Nations Human Rights Council. Observers said the move will further discredit an institution that has already become a laughing stock around the world for appointing so many communist and Islamic dictatorships as supposed guardians of human rights.

Critics from across the political spectrum are already protesting the latest development. But analysts say that with the broad support of governments in the region and backing from the so-called “African Union,” the Sudanese war criminal’s appointment to the UN so-called “human rights” entity is now virtually assured without a massive wave of opposition.

Ironically, the UN resolution that created the dubious global rights body stated that "members elected to the Council shall uphold the highest standards in the promotion and protection of human rights." Even using the UN’s own questionable definitions of “human rights” — completely alien to American notions of individual rights — the council’s membership makes an absolute mockery of the resolution and the idea of protecting human rights.

Other regimes represented on the global council include some of the most repressive and totalitarian dictators on the planet: Cuba’s communists, for example, Saudi Arabia’s autocratic Islamists, the mass-murdering communist dictatorship ruling over mainland China, and many more. Less than a decade ago, the body was actually chaired by the autocratic regime of Libyan strongman Muammar Gadhafi.

Still, Sudan’s genocidal maniac, who seized power in coup more than two decades ago, might represent a new low for the almost-comically discredited UN council, according to commentators. Al-Bashir, who purports to be a “president,” has a warrant out for his arrest by the International Criminal Court (ICC) on charges of war crimes, genocide, and crimes against humanity.

The brutal Sudanese dictator is actually the first sitting head of state to be the subject of an ICC arrest warrant. And since the international process was initiated over the genocidal plans al-Bashir "masterminded and implemented" in the Darfur region, the mass murderer has continued carrying out barbaric atrocities against Christians, the people of the Nuba mountains, and other groups.  

“Just a year after the human rights council sought to exorcise the ghosts of its past by suspending Col. Muammar Qaddafi’s Libya — which infamously chaired the body in 2003, and was reelected a member in 2010 — it is now set to replace him with a tyrant wanted for genocide by the International Criminal Court,” said UN Watch Executive Director Hillel Neuer, who compared the development to putting Jack the Ripper in charge of a women’s shelter. “For how long must we have the inmates running the asylum?”

UN Watch, a Geneva-based watchdog that monitors the global institution, called on the U.S. government and the European Union to help defeat al-Bashir’s candidacy by promptly announcing their opposition. It also said that the UN and the cause of human rights would be “severely damaged” if the genocidal tyrant was able to secure a seat on the council. 

Even the U.S. government, which has been providing taxpayer-funded aid and even “security” assistance to the Sudanese regime as part of its terror war, already decried the preposterous candidacy of the infamous mass-murderer. But while American lawmakers continue to debate a complete withdrawal of the U.S. government from the UN Human Rights Council, the Obama administration offered only a tepid condemnation of al-Bashir’s bid.

"Sudan, a consistent human rights violator, does not meet the Council’s own standards for membership," explained Kurtis Cooper, a deputy spokesman for the U.S. Mission to the UN. "It would be inappropriate for Sudan to have a seat on the Council while the Sudanese head of State is under International Criminal Court indictment for war crimes in Darfur and the government of Sudan continues to use violence to inflame tensions along its border with South Sudan."

The Obama administration re-joined the controversial UN council in 2009 after it underwent changes in 2006 supposedly aimed at making harder for despots to acquire seats. But the battle over U.S. membership is still underway, with numerous lawmakers calling for withdrawal – and the latest developments will certainly play a role in future debates.

A broad coalition of African and international human rights groups have blasted Sudan’s potential appointment as well. In a letter sent to the continent’s national foreign ministers, the 18 organizations urged political leaders and the African Union to withdraw their support from the candidacies of the rulers of Sudan and Ethiopia. 

“The Sudanese army has been responsible for arbitrary detentions, extrajudicial killings, and indiscriminate bombardment,” the open letter stated, citing a long list of crimes and terror perpetrated by al Bashir’s genocidal regime. “Sudanese human rights defenders have even faced reprisals for their participation at the Human Rights Council.” 

Other controversial candidates for the council likely to be appointed include the socialist regime of Venezuelan strongman Hugo Chavez, the U.S.-funded terror-supporting government of Pakistan, the rulers of Ethiopia, and several others with dire human rights records. The brutal Assad regime in Syria is set to run next year, according to news reports.

“Think for a moment about just how outrageous this is: the genocidal Sudanese regime, and the dictatorship in Venezuela which models itself after Fidel Castro, are both poised to join a UN organization responsible for preventing human rights abuse and punishing the abusers,” said U.S. Rep. Ileana Ros-Lehtinen (R-Fla.), the chair of the House Foreign Affairs Committee who has long been a critic the absurdly titled UN body. “The Obama administration should stop making excuses for the UN Human Rights Council, which remains as dictator-friendly as ever, despite three years of U.S. membership and funding.”

The UN Council recently came under fire for criticizing the United States in the wake of the Trayvon Martin shooting earlier this year as well. The global entity’s so-called “High Commissioner for Human Rights,” a South African named Navi Pillay whose prominence stems from an appointment by the communist-dominated African National Congress (ANC), revealed her ignorance for the whole world to see.

"As High Commissioner for Human Rights, I call for an immediate investigation," she told the press after the Florida shooting, apparently unaware that local, state, and federal investigations were already well underway to determine the facts in the case. She also questioned U.S. self-defense rights, the “Stand Your Ground” law, and the judicial process, sparking widespread outrage and ridicule among liberty-minded Americans.

The UN itself is also under fire from all sides for a seemingly never-ending parade of scandals. Among the more recent outrages: allowing its “peace keeping” troops to continue engaging in systematic sex crimes worldwide; handing U.S. technology to the regimes ruling Iran and North Korea; criticizing the United States and Canada for bogus abuses; fabricating climate hysteria to justify its power grabs; using U.S. taxpayers’ money on forced abortions in China; and much more.

Critics say it has become increasingly clear that the lawless UN cannot be reformed. According to opponents, the time has come for the U.S. government to permanently defund and withdraw from the “dictators club” before it does any more damage. However, it remains unclear how many more scandals American lawmakers will tolerate before finally putting their foot down once and for all.  

Source: The New American

Google to $22.5M fine for latest privacy breakdown

The US Federal Trade Commission fined Google $22.5 million for violating the privacy of people who used Apple's Safari web browser even after pledging not to do so.

Google is paying a $22.5 million fine to settle the latest regulatory case questioning the Internet search leader's respect for people's privacy and the integrity of its internal controls.

The penalty announced Thursday by the Federal Trade Commission matches the figure reported by The Associated Press and other media outlets last month. It's the most that the FTC has ever fined a company for a civil violation.

The rebuke resolves the FTC's allegations that Google Inc. duped millions of Web surfers who use Apple Inc.'s Safari browser.

Google had assured people that it wouldn't monitor their online activities, as long as they didn't change the browser settings to permit the tracking.

Google broke that promise, according to the FTC, by creating a technological loophole that enabled the company's DoubleClick advertising network to shadow unwitting Safari users. That tracking gave DoubleClick a better handle on what kinds of marketing pitches to show them.

The FTC concluded that the contradiction between Google's stealth tracking and its privacy assurances to Safari users violated a vow that the company made in another settlement with the agency in October.

The latest settlement doesn't affect a separate FTC inquiry over whether Google has been abusing its dominant position in Internet search to highlight its own services over rivals and drive up online advertising prices. The settlement also doesn't come with any admission from Google of wrongdoing.

The company has acknowledged that DoubleClick was tracking Safari users, but insists the monitoring wasn't by design.

All Google wanted to do, according to the company, was create a way for Safari users to press on a button to signal they recommended an ad. Google said it didn't realize its tinkering altered Safari's automatic privacy settings in a way that allowed for broader surveillance.

After the circumvention was publicized in February by a graduate student at Stanford University, Google stopped the tracking on Safari. The company says it never collected any personal information.

"We set the highest standards of privacy and security for our users," Google said Thursday.

Google's actions, though, have cast doubts about the sincerity of its commitment.

The Safari intrusion is the latest privacy stumble at Google, whose dominant Internet search engine and popular email service provide valuable peepholes into people's minds.

In 2010, Google set up a social networking service called Buzz that exposed people's email contacts. Following an FTC investigation, Google agreed to 20 years of oversight and a pledge not to mislead consumers about privacy issues. That's the pledge that the FTC says Google broke with Safari.

Google also got in trouble for collecting personal data transmitted over unprotected Wi-Fi networks as Google cars cruised neighborhoods around the world taking pictures for the company's online mapping service.

The FTC didn't take action against Google for scooping up the Wi-Fi data, although the Federal Communications Commission fined the company $25,000 earlier this year for impeding its investigation into the matter.

As it did with the secret tracking on Safari, Google has framed those privacy breaches as inadvertent slips.

That defense is wearing thin, according to David Vladeck, the director of the FTC's bureau of consumer protection.

"In some ways, as a regulator, it's hard to know which answer is worst: 'I didn't know' or 'I did it deliberately.' Both are bad," Vladeck told reporters on a Thursday conference call.

The FTC hopes the fine will force Google to pay better attention to its practices.

"It's a big company," Vladeck said. "It's grown very quickly, but the social contract is if you are going to hold on to people's most private data, you have got to do a better job of honoring your privacy commitment."

Those terse remarks underscore Google's increasingly tense relationship with regulators around the world. Both the FTC and the European Commission are engaged in broad antitrust investigations of Google. The company, which is based in Mountain View, California, has submitted a list of concessions in an attempt to settle Europe's probe, while the FTC's inquiry remains open.

Although the $22.5 million fine is a record for the FTC, it won't leave much of a financial dent at Google. The company had $43 billion in cash at the end of June and generates $22.5 million in revenue roughly every four hours.

"This record fine will send a signal to a lot of Internet companies, but there's still some question whether the FTC has the authority and resources to rein in an entity as big and powerful as Google," said Carl Tobias, a Richmond University law professor who followed the Safari case.

Bad publicity may be the bigger blow for Google, which takes so much pride in its scruples that it has adopted "Don't Be Evil" as its corporate motto.

"This has to sting. They don't want to lose too much goodwill," said Justin Brookman, director of consumer privacy for the Center for Democracy & Technology.

The FTC's willingness to settle with Google without an admission of wrongdoing troubled one of the agency's own commissioners, J. Thomas Rosch. He voted against the settlement because he didn't believe the agreement was in the public interest without Google admitting liability.

But the FTC's four other commissioners voted in favor of the settlement.

"We don't get anything out of an admission other than a good headline," Vladeck said. "It is not of any practical value to us."

The fine surpasses a nearly $19 million penalty that the FTC slapped on a telemarketer accused of duping people into believing they were donating to charities.

Without providing specifics, the FTC said the Google fine represents several times more than what Google made from the targeted ads that it distributed through Safari.

Consumer Watchdog, a California group that has emerged among Google's most strident critics, said it may challenge the settlement unless Google admits it broke the privacy promise made with the Buzz settlement.

"The commission has allowed Google to buy its way out of trouble for an amount that probably is less than the company spends on lunches for its employees and with no admission it did anything wrong," Consumer Watchdog complained.

News of the FTC's fine didn't faze investors as Google shares added 12 cents to close Thursday at $642.35. Although it was modest, the gain was still enough to boost Google's market value by about $39 million, nearly twice the amount of the fine.

Source: Phys.org

Greece Prints Euros To Stay Afloat, The ECB Approves, The Bundesbank Nods, No One Wants To Get Blamed For Kicking Greece Out

A lot of politicians in Germany, but also in other countries, issue zingers about a Greek exit from the Eurozone and the end of their patience. Yet those with decision-making power play for time. They want someone else to do the job. Suddenly Greece is out of money again. It would default on everything, from bonds held by central banks to internal obligations. On August 20. The day a €3.2 billion bond that had landed on the balance sheet of the European Central Bank would mature. Europe would be on vacation. It would be mayhem. And somebody would get blamed.

So who the heck had turned off the dang spigot? At first, it was the Troika—the austerity and bailout gang from the ECB, the EU, and the IMF. It was supposed to send Greece €31.2 billion in June. But during the election chaos, Greek politicians threatened to abandon structural reforms, reverse austerity measures already implemented, rehire laid-off workers....

The Troika got cold feet. Instead of sending the payment, it promised to send its inspectors. It would drag its feet and write reports. It would take till September—knowing that Greece wouldn’t make it past August 20. Then it let the firebrand politicians stew in their own juices.

It’s easy to blame the Troika, and it can take the heat. History searches for the person who is responsible. But the Troika doesn’t have one. It was designed that way: a combo of multi-layered, undemocratic structures. And the Troika inspectors, though despised in Greece, are career technocrats, not decision makers.

So Chancellor Angela Merkel became a substitute. Greek tabloids treated her like a Nazi heir, with Hitler mustache and all. But she’s not the decision maker in the Troika, though she is a contributor. And she—though still unwilling to water down the bailout memorandum—consistently stated that Greece should remain in the Eurozone. She doesn’t want to be blamed.

In early July, the inspectors returned to Athens to chat with the new coalition government and check on progress in implementing the agreed-upon structural reforms. Soon it seeped out that their report would paint an “awful picture.” [read.... Greece Flails About, Merkel Draws A Line, German Industry & Voters Back Her: It’s Almost Over For Greece].

In late July, the inspectors returned to Athens yet again and left on Sunday. After another visit at the end of August, they’ll release their final report in September. A big faceless document on which people of different nationalities labored for months; a lot of politicians can hide behind it. Even Merkel. And the Bundestag, which gets to have a say each time the EFSF disburses bailout funds.

Alas, August 20 is the out-of-money date. September is irrelevant. Because someone else turned off the spigot. Um, the ECB. Two weeks ago, it stopped accepting Greek government bonds as collateral for its repurchase operations, thus cutting Greek banks off their lifeline. Greece asked for a bridge loan to get through the summer, which the ECB rejected. Greece asked for a delay in repaying the €3.2 billion bond maturing on August 20, which the ECB also rejected though the bond was decomposing on its balance sheet. It would kick Greece into default. And the ECB would be blamed.

But the ECB has a public face, President Mario Draghi. He didn’t want history books pointing at him. So the ECB switched gears. It allowed Greece to sell worthless treasury bills with maturities of three and six months to its own bankrupt and bailed out banks. Under the Emergency Liquidity Assistance (ELA), the banks would hand these T-bills to the Bank of Greece (central bank) as collateral in exchange for real euros, which the banks would then pass to the government. Thus, the Bank of Greece would fund the Greek government.

Precisely what is prohibited under the treaties that govern the ECB and the Eurosystem of central banks. But voila. Out-of-money Greece now prints its own euros! The ECB approved it. The ever so vigilant Bundesbank acquiesced. No one wanted to get blamed for Greece’s default.

If Greece defaults in September, these T-bills in the hands of the Bank of Greece will remain in the Eurosystem, and all remaining Eurozone countries will get to eat the loss. €3.5 billion or more may be printed in this manner. The cost of keeping Greece in the Eurozone a few more weeks. And on Tuesday, Greece “sold” the first batch, €812.5 million of 6-month T-bills with a yield of 4.68%. Hallelujah.

“We don’t have any time to lose,” said Eurogroup President Jean-Claude Juncker. The euro must be saved “by all available means.” And clearly, his strategy is being implemented by hook or crook. Then he gave a stunning interview. At first, he was just jabbering about Greece, whose exit wouldn’t happen “before the end of autumn.” But suddenly the floodgates opened, and deeply chilling existential pessimism not only about the euro but about the future of the continent poured out. Read..... Top Honcho Jean-Claude Juncker: “Europeans are dwarfs”

Source: Testosterone Pit