A couple of interesting stories read over the weekend about how–not to beat a dead horse (because this horse is very much alive)–everything is rigged, from the “economy” to war.

First a great one from Ellen Brown regarding interest-rate swaps, which were sold to investors (such as the county where I live–Riverside County) on the idea that by buying these swaps, the investors could get cheaper loans with variable interest rates and the swaps would have the effect of making the variable interest rates behave as more or less fixed interest rates thereby supposedly giving the investor the best of both worlds.  Brown explains:

“Interest-rate swaps are sold to parties who have taken out loans at variable interest rates, as insurance against rising rates. The most common swap is one where counterparty A (a university, municipal government, etc.) pays a fixed rate to counterparty B (the bank), while receiving from B a floating rate indexed to a reference rate such as LIBOR. If interest rates go up, the municipality gets paid more on the swap contract, offsetting its rising borrowing costs. If interest rates go down, the municipality owes money to the bank on the swap, but that extra charge is offset by the falling interest rate on its variable rate loan. The result is to fix borrowing costs at the lower variable rate.“

As usual, however, the banks found a way to violate this agreement and make it pay for them while simultaneously  causing grievous financial harm to the investors.  The banks’ method?  Rig the interest rates–chiefly LIBOR.  Brown quotes an explanation from a CNN writer:

“In 2008 and 2009, Libor rates, in general, fell much faster than the Sifma rate. At times, the rates even went in different directions. During the height of the financial crisis, Sifma rates spiked. Libor rates, though, continued to drop. The result was that the cost of the swaps that municipalities had taken out jumped in price at the same time that their borrowing costs went up, which was exactly the opposite of how the swaps were supposed to work.“

The exact opposite of how the swaps were supposed to work.  In other words, the ol’ bait and switch.  There’s the way they lead you to believe the world works, and then there’s the way the world actually works, which leads us to the next story, from Empire Burlesque.

Seymour Hersh, Syria, false flags

The Empire Burlesque piece is a commentary on a Seymour Hersh article in the London Review of Books (which is discussed in the video above).  The Empire Burlesque writer Chris Floyd states the obvious:

“And that’s another valuable aspect of the Hersh story: it shows, once again, how the world is really run — in almost total secrecy, behind thin facades of hype, hypocrisy and auto-hypnosis that have little or no connection to the reality of power’s operations. Almost nothing we are told is true; yet billions of words are poured out every year in earnest disquisitions on the meaning and import of the dumb shows and distractions our betters put on for us while they pick our pockets and set our world on fire.“

Floyd goes on to point out how all foreign policy is essentially a false flag:

“There is much more in the Hersh piece, including more details on how the administration of the Peace Prize laureate has assiduously pushed policies that it knew, beyond a shadow of a doubt, would result in deadly weapons getting into the hands of some of the most virulent religious extremists on earth. It’s odd, isn’t it? In order to overthrow a repressive regime in Syria, the Peace Laureate allies himself in clandestine gun-running and the fomenting of sectarian violence with a regime, the Saudis, whose repression makes Assad’s Syria look like Haight-Ashbury in the Sixties. And while telling us that al Qaeda is such a deadly foe to all human values that our fight against it requires us to give up our own freedoms, violate our constitution, institute death squads, set up all-pervasive surveillance, and wage overt and covert wars all over the earth — the same Laureate is ensuring that groups openly allied with al Qaeda are being crammed full of weapons so they can spread sectarian violence across the Middle East and Africa.“

Hard to sum up the state of the world any more concisely or poetically than that–our “betters” pick our pockets and set our world on fire–from the unwarranted war of aggression against Iraq to the bailout and other financial frauds such as the foreclosure crisis and LIBOR-rigging, the idea is to leave us broke debt-slaves in a constant state of panic.  It’s 1984 all over again.

(h/t to Max Keiser for the above)