lewrockwell--2020-07-31--The Eurozone’s Financial Disintegration

The Eurozone’s Financial Disintegration

The Euro Crisis Monitor ( above ) shows the increasing imbalances in the TARGET2 settlement system between all its members : the ECB ( itself with a €145bn deficit ) and the national central banks in the Eurozone .
Other than minor differences reflecting net cross-border trade not matched by investment flows going the other way , these imbalances should not exist .
But following the Lehman crisis and as the Eurozone developed its own series of crises , imbalances arose .
Commentators have grown used to them , so have more or less given up pointing them out .
@ @ @ @ @ @ @ the apparent flight into the Bundesbank ( €995,083m surplus ) has gathered pace , as have the deficits for Italy ( €536,722m ) and Spain ( €451,798m ) .
It is time to take these rising imbalances seriously again .
EcoNugenics u2013 Pect ... Buy New $ 104.53 ( $ 6.58 / Ounce ) Target2 is the settlement system for transfers between the national central banks .
The way it works , in theory , is as follows .
A German manufacturer sells goods to an Italian business .
The Italian business pays @ @ @ @ @ @ @ bank via the Italian central bank through the Target2 system , crediting the German manufacturer ’ s German bank through Germany ’ s central bank .
But since the Lehman crisis , and more noticeably the last eurozone crisis , capital flows appear to have gravitated from Portugal , Italy , Greece and Spain ( the PIGS — remember them ? )
to principally Germany , Luxembourg , Netherlands and Finland in that order .
Before 2008 , the balance was maintained by trade deficits in Greece , for example , being offset @ @ @ @ @ @ @ the eurozone bought Greek bonds , other investments in Greece and the tourist trade collected net cash revenues .
In this sense , it would be wrong to suggest that trade imbalances have led to Target2 imbalances .
But part of the problem must be put down to the failure of private sector investment flows to recycle .
Then there is the question of “ capital flight ” , which is not capital flight as such .
The problem is not that residents in Italy and Spain are opening bank accounts in Germany @ @ @ @ @ @ @ , but more an example of the tragedy of the commons .
The origin of this phrase applied to common grazing rights , where everyone in the parish can graze their livestock on common ground , but no one has the incentive to ensure it is properly managed , not overgrazed , and maintained free of gorse and bracken .
Consequently , the ground becomes less productive over time .
Similarly , the national central banks that are heavily exposed to potentially bad loans know that their losses , if materialised in a @ @ @ @ @ @ @ being shared throughout the central bank system , according to their capital keys .
The capital key relates to the national central banks ’ equity ownership in the ECB , which for Germany , for example , is 26.4 % of the total .
If Target2 collapsed for any reason , the Bundesbank , to the extent the bad debts in the Eurosystem are shared , could lose a significant part of the trillion euros owed to it by the other national central banks .
But it would be a step too far @ @ @ @ @ @ @ , such as those of Spain and Italy , are gaming the system .
It appears to be a problem that simply arises as an unintended consequence of Target2 .
Vegan Superfood Daily ... Buy New $ 39.95 ( $ 7.55 / Ounce ) If one national central bank runs a Target2 deficit with the other central banks , it is almost certainly because it has loaned money on a net basis to its commercial banks to cover payment transfers , instead of them progressing through the settlement system .
Those loans appear @ @ @ @ @ @ @ bank ’ s balance sheet , which is offset by a liability to the ECB ’ s Eurosystem through Target2 .
But under the rules , if something goes wrong either with its own lending or another NCB ’ s lending , the costs are shared out by the ECB on the pre-set capital key formula .
In theory , it is therefore in the interest of a national central bank to run a greater deficit in relation to its capital key by supporting its own banks .
It is not necessarily a @ @ @ @ @ @ @ Italia or the Banco de España to make dodgy loans to their commercial banks ; it is just how the system works , and the consequence of national pressures .
To understand how and why the problem arises , we must go back to the earlier crises following Lehman , which have informed national regulatory practices .
If the national banking regulator deemed loans to be non-performing , the losses would become a national problem .
Alternatively , if the regulator deems them to be performing , they are eligible for the national @ @ @ @ @ @ @ A commercial bank can then use the questionable loans as collateral , borrowing from the national central bank , which spreads the loan risk with all the other national central banks in accordance with their capital keys .
Insolvent loans are thereby removed from the Italian and Spanish banking systems and dumped on the Eurosystem .
In Italy ’ s case , the very high level of non-performing loans peaked at 17.1 % in September 2015 but has now been reduced to 6.9 % .
As PWC Italia wryly put it , “ @ @ @ @ @ @ @ regulatory pressure have halved the total stock of non-performing loans to €135bn in 2019 ( vs €341bn in 2015 ) and at the same time they have set up their NPL platform and organisational controls that will allow to manage non-performing loans more quickly and efficiently and thus to face the incoming economic crisis in a more resilient way.
” [ i ] Given the incentives for the regulator to deflect the non-performing loan problem from the domestic economy into the Eurosystem , it would be a miracle if much of the reduction @ @ @ @ @ @ @ member states with negative Target2 balances such as Italy there has been a trend to liquidity problems for legacy industries , rendering them insolvent .
With the banking regulator incentivised to remove the problem from the domestic economy , loans to these insolvent companies have been continually rolled over and increased .
The consequence is that new businesses have been starved of bank credit , because bank credit in the member nation ’ s banks is increasingly tied up supporting businesses that should have gone to the wall long ago .
Officially , @ @ @ @ @ @ @ ECB and all the national central bank Target2 positions net out to zero , and the mutual sharing of liabilities between the national central banks keeps it that way .
To its architects , a systemic failure of Target2 is inconceivable .
But , because some national central banks end up using Target2 as a source of funding for their own balance sheets , which in turn funds their own dodgy commercial banks , some national central banks have mounting potential liabilities not of their own making , but rather the making of @ @ @ @ @ @ @ D ... Buy New $ 19.97 ( $ 0.06 / Count ) The Eurosystem member with the greatest problem is Germany ’ s Bundesbank , now owed close to a trillion euros through Target2 .
And the risk of losses is now accelerating both in their quantity , and given the economic consequences of Covid-19 , the quality of the underlying loan-assets is rapidly deteriorating as well .
The main culprits , the national central banks of Italy and Spain , at the same time are seeing their deficits increase rapidly .
The @ @ @ @ @ @ @ directors will be aware of the problem , particularly since it is now in the public domain .
[ ii ] One may ask how this “ mythical surplus ” fits in with the Bundesbank ’ s own balance sheet .
As an asset , the surplus was about half of the Bundesbank ’ s total assets at 31 December 2019 , and it finances , among other things , current accounts and deposit facilities of €560bn for its own risk-averse commercial banks .
[ iii ] The Bundesbank ’ s silence in @ @ @ @ @ @ @ position for commercial banks in the eurozone , to say the least , is extremely fragile .
For years , they have operated in the strait jacket of negative interest rates imposed by the ECB , which operate as a tax on the commercial banks ’ liquidity .
They can only offset it by buying government and other bonds with less of a negative yield , or with a positive yield .
Alternatively , they can lend revolving capital to business customers and consumers for positive margin .
And lastly , they can @ @ @ @ @ @ @ , which given underlying fundamentals is becoming a likely source of credit contraction .
One would have thought lending bank credit into the real economy would be the most urgent objective of monetary policy , but as we have seen , the increasing support for zombie corporations to prevent national write-offs precludes other lending for economic benefit .
And the ECB ’ s policy objectives are divorced from this problem , which is the responsibility of the national central banks .
The ECB operates on a higher plain .
The real consideration that @ @ @ @ @ @ @ policy is different : it needs to nurse the finances of insolvent member state governments .
It does this through various asset purchase programmes , which allow the ECB to set and supress the cost of funding national deficits .
Under its charter the ECB is not allowed to fund member states directly , but it can buy bonds in the secondary market .
By buying government bonds , almost entirely from commercial banks , balance sheet space is created for the banks to buy further new issues of government bonds , thus @ @ @ @ @ @ @ face of it , this is a win-win for the governments which are now being paid to borrow , and also for the banks .
The yield on national government debt is always set to ensure that a positive return is obtained for the banks by subscribing for new bonds and selling them to the ECB at what amounts to a guaranteed price .
But this zero-risk business comes with wafer-thin margins , which encourages excessive balance sheet expansion to compensate .
Deutsche Bank , for example , has a ratio of total @ @ @ @ @ @ @ , Credit Agricole 28.1 times , BNP Paribas 20.1 times , and Société Generale 21.4 times .
These high rates of leverage can only be borne by banks who can demonstrate very low rates of non-performing loans , a situation that will have changed fatally for all Eurozone banks as a consequence of COVID-19 lockdowns .
Other banks , such as UniCredit in Italy , have lower asset to equity ratios ( 14.4 ) and Santander in Spain ( 15.2 ) , reflecting higher lending risks on their balance sheets as well as @ @ @ @ @ @ @ ratios are still far too high in the context of a contracting European and global economy .
Even though the flood of money unleashed by the ECB and other central banks in response to the coronavirus has broadly remained in the financial economy and therefore is puffing up share prices everywhere , the market ’ s rating of the equity value of eurozone banks is very low .
Table 1 shows how this affects balance sheet gearing from a shareholder ’ s point of view in the global systemically important banks in the @ @ @ @ @ @ @ they permit them to be outrageously high , the regulators focus on total asset to equity ratios becomes positively frightening when the true value of balance sheet equity judged by the market is taken into account .
For the eurozone ’ s banking regulators to ignore the market ratings for these banks is a negation of their primary responsibility , to protect the public from bad banking practice .
The whole regulatory thing is a giant banking sham .
As far as the ECB is concerned , the role of the commercial banks @ @ @ @ @ @ @ funding of member states ’ budget deficits .
But that problem has escalated suddenly in recent months putting additional strains on the whole Eurosystem .
Yet the ECB continues to drive the commercial banks into the ground by forcing them towards yet higher ratios on the slimmest of margins in its quest to fund member government deficits .
NatureBell Quercetin 1 ... Buy New $ 28.95 ( $ 0.12 / Count ) To summarise the problems now faced through the creation of the Eurosystem : • The national central banks in the PIIGS @ @ @ @ @ @ @ as a means of their own balance sheet funding in excess of their capital key , which has the effect of burdening the central banks of Germany , Luxembourg , Finland and the Netherlands with excess liabilities in the event of a partial or complete systemic failure .
• Instead of non-performing loans being dealt with at a national level , banks are encouraged to continually finance them and carry them on their balance sheet as being solvent .
These loans are then used as collateral for funding from the Italian and Spanish @ @ @ @ @ @ @ Portugal and Greece , which are in turn financed through Target2 imbalances .
• This situation surely should not be tolerated by the Bundesbank in particular , being exposed to close to a trillion euros in a settlement system that is being progressively corrupted by its users .
• Funding government deficits , being the ECB ’ s primary and now exclusive objective , has led to extreme levels of operational gearing for the eurozone ’ s commercial banks , which can only result in an eventual collapse of the whole system .
@ @ @ @ @ @ @ GSIBs are in effect trying to discount this outcome .
• The Eurosystem is unsuited to deal with a systemic shock on the scale it now faces and , on its realisation , can be expected to collapse .
The underlying problem for the eurozone and the ECB is government spending deficits will continue to grow , and no attempt is being made to address this problem .
In the process , events have corrupted the banking and settlement systems , setting national central banks against each other as debtors and creditors , @ @ @ @ @ @ @ by not writing off bad debts .
We should be in no doubt the financial system of the eurozone is heading towards an eventual crisis which will destroy it .
Before COVID-19 , the ECB might have been expected by its critics to continue on its path towards financial oblivion for a few more years yet .
After all , top-down control systems can persist for decades despite everything , as long as the control is strong enough .
But we should be in no doubt that lockdowns have had an undermining impact @ @ @ @ @ @ @ into more immediate question .
Table 2 , which is of the relevant national statistics for Italy and Spain with the addition of highly indebted France , illustrates the problem emanating from lockdowns .
Forecasts for GDP in 2020 are consensus from Focus Economics .
Debt to GDP statistics and their forecasts are from Trading Economics .
From these , we can derive the economic effect on national private sectors .
It is not widely appreciated that headline GDP numbers are bolstered by extra government spending , which when stripped out leaves the @ @ @ @ @ @ @ GDP on seemingly Panglossian forecasts .
Thus , a 10.5 % fall in consensus GDP expectations for Italy this year , after increased public spending in connection with the virus , translates into a fall of 28 % in private sector GDP .
The effect on the Italian economy will simply lead to a new round of bankruptcies for all levels of Italian business , accumulating on the balance sheets of Italian banks .
Similarly , we see Spain ’ s private sector contracting by 22.5 % , and France ’ s by @ @ @ @ @ @ @ , consensus forecasts for 2021 are for significant recoveries , conforming to a V-shape .
With a second round of lockdowns increasingly likely , those forecasts are vulnerable to reality .
The Optimal Dose : Rest ... Judson Somerville MD Best Price : $ 9.96 Buy New $ 9.98 Forecasters are almost all Keynesian in that they expect government spending to stimulate economic recovery .
But in reality , all that extra government spending can be expected to achieve is a statistical appearance of recovery through the creation of more bank credit to @ @ @ @ @ @ @ banking system commandeered to provide inflationary finance for governments and already having over-leveraged balance sheets ( Table 1 ) , prospects for economic recovery are remote .
As soon as it becomes clear that the recovery is going to take longer than anticipated we can expect the fragile confidence , that the ECB can continue to keep the show on the road , to evaporate .
That is if , and not before , one or more of those highly leveraged eurozone banks does not face bankruptcy itself .
The consequences of financial @ @ @ @ @ @ @ Target2 settlement system has concealed the rotten core of the Eurosystem .
The consequences of imbalances , always dismissed by the authorities , are poorly understood and therefore ignored by financial commentators .
But as we have seen , the Eurosystem and its Target2 settlement structure have fostered the concealment of bad debts at the national level , transferring them into the national central bank network .
The principal losers are Germany , Luxembourg , the Netherlands and Finland .
Excepting Luxembourg , which can be expected to just go with the flow @ @ @ @ @ @ @ to form the nucleus of a new currency area ; but they are unlikely to do so before the Eurosystem implodes .
To do so would actively destroy it , and the balance sheets of their own central banks as well .
The collapse of the Eurosystem would bankrupt the PIGS , and possibly other member states , cutting off all monetary financing .
One would doubt , that even in such a crisis , there would emerge the political leadership with the strength , skill and determination to take these nations out @ @ @ @ @ @ @ force , Brussels is utterly useless and will have lost all credibility .
Furthermore , the collapse of the Eurosystem would mean the end of the euro as circulating money , so currency replacements , presumably on national lines , would have to emerge .
The ending of the euro will not be mourned .
Those which it disciplined through its strength regretted the loss of a money they could print for themselves .
And those who end up paying for its failure will have sacrificed all their peoples ’ hard-won savings .
@ @ @ @ @ @ @ Steve Hickey , Andrew W ... Best Price : $ 8.91 Buy New $ 12.47 For the moment , the euro is strong against the world ’ s reserve currency .
This strength comes partly from its moderate international trade surplus compared with the enormous US trade deficit , and the fact that the dollar is over-owned by foreigners while the euro is not .
But in terms of purchasing power both currencies are on their different trajectories to purchasing power destruction .
The Fed ’ s policy of tying in the dollar @ @ @ @ @ @ @ is one form of currency destruction , but the euro will be destroyed if , and when , the flawed Eurosystem falls apart .
[ ii ] See Evergreening in the euro area ; Steinkamp , Tornell and Westermann , working paper No .
113 July 2018 , which describes how zombie companies are being kept afloat and their loans ending up as Target2 collateral .
[ iii ] Available in English , here : https : //www.bundesbank.de/resource/blob/826448/e4325b7ad7d02b2d5720bf564aee4490/mL/2020-02-28-geschaeftsbericht-2019-bilanz-data.pdf .
There are errors in the translation , for example the date of the balance @ @ @ @ @ @ @ .
The translation of the previous year ’ s contains even more errors !
The views and opinions expressed in this article are those of the author ( s ) and do not reflect those of Goldmoney , unless expressly stated .
The Best of Alasdair Macleod

Introduction
The Euro Crisis Monitor (above) shows the increasing imbalances in the TARGET2 settlement system between all its members: the ECB (itself with a €145bn deficit) and the national central banks in the Eurozone. Other than minor differences reflecting net cross-border trade not matched by investment flows going the other way, these imbalances should not exist. But following the Lehman crisis and as the Eurozone developed its own series of crises, imbalances arose. Commentators have grown used to them, so have more or less given up pointing them out. But in the last few months, the apparent flight into the Bundesbank (€995,083m surplus) has gathered pace, as have the deficits for Italy (€536,722m) and Spain (€451,798m). It is time to take these rising imbalances seriously again. EcoNugenics u2013 Pect... Buy New $104.53 ($6.58 / Ounce) (as of 03:48 UTC - Details)
Target2 — the ECB’s flexible friend
Target2 is the settlement system for transfers between the national central banks. The way it works, in theory, is as follows. A German manufacturer sells goods to an Italian business. The Italian business pays by bank transfer drawn on its Italian bank via the Italian central bank through the Target2 system, crediting the German manufacturer’s German bank through Germany’s central bank.
But since the Lehman crisis, and more noticeably the last eurozone crisis, capital flows appear to have gravitated from Portugal, Italy, Greece and Spain (the PIGS — remember them?) to principally Germany, Luxembourg, Netherlands and Finland in that order. Before 2008, the balance was maintained by trade deficits in Greece, for example, being offset by capital inflows as residents elsewhere in the eurozone bought Greek bonds, other investments in Greece and the tourist trade collected net cash revenues.
In this sense, it would be wrong to suggest that trade imbalances have led to Target2 imbalances. But part of the problem must be put down to the failure of private sector investment flows to recycle.
Then there is the question of “capital flight”, which is not capital flight as such.
The problem is not that residents in Italy and Spain are opening bank accounts in Germany and transferring their deposits from domestic banks, but more an example of the tragedy of the commons. The origin of this phrase applied to common grazing rights, where everyone in the parish can graze their livestock on common ground, but no one has the incentive to ensure it is properly managed, not overgrazed, and maintained free of gorse and bracken. Consequently, the ground becomes less productive over time. Similarly, the national central banks that are heavily exposed to potentially bad loans know that their losses, if materialised in a general banking crisis, will end up being shared throughout the central bank system, according to their capital keys.
The capital key relates to the national central banks’ equity ownership in the ECB, which for Germany, for example, is 26.4% of the total. If Target2 collapsed for any reason, the Bundesbank, to the extent the bad debts in the Eurosystem are shared, could lose a significant part of the trillion euros owed to it by the other national central banks. But it would be a step too far to say that some national central banks, such as those of Spain and Italy, are gaming the system. It appears to be a problem that simply arises as an unintended consequence of Target2. Vegan Superfood Daily ... Buy New $39.95 ($7.55 / Ounce) (as of 04:42 UTC - Details)
If one national central bank runs a Target2 deficit with the other central banks, it is almost certainly because it has loaned money on a net basis to its commercial banks to cover payment transfers, instead of them progressing through the settlement system. Those loans appear as an asset on the national central bank’s balance sheet, which is offset by a liability to the ECB’s Eurosystem through Target2. But under the rules, if something goes wrong either with its own lending or another NCB’s lending, the costs are shared out by the ECB on the pre-set capital key formula. In theory, it is therefore in the interest of a national central bank to run a greater deficit in relation to its capital key by supporting its own banks. It is not necessarily a deliberate act of the Bank d’Italia or the Banco de España to make dodgy loans to their commercial banks; it is just how the system works, and the consequence of national pressures.
To understand how and why the problem arises, we must go back to the earlier crises following Lehman, which have informed national regulatory practices. If the national banking regulator deemed loans to be non-performing, the losses would become a national problem. Alternatively, if the regulator deems them to be performing, they are eligible for the national central bank’s refinancing operations. A commercial bank can then use the questionable loans as collateral, borrowing from the national central bank, which spreads the loan risk with all the other national central banks in accordance with their capital keys. Insolvent loans are thereby removed from the Italian and Spanish banking systems and dumped on the Eurosystem.
In Italy’s case, the very high level of non-performing loans peaked at 17.1% in September 2015 but has now been reduced to 6.9%. As PWC Italia wryly put it,
“Italian banks in response to market and regulatory pressure have halved the total stock of non-performing loans to €135bn in 2019 (vs €341bn in 2015) and at the same time they have set up their NPL platform and organisational controls that will allow to manage non-performing loans more quickly and efficiently and thus to face the incoming economic crisis in a more resilient way.”[i]
Given the incentives for the regulator to deflect the non-performing loan problem from the domestic economy into the Eurosystem, it would be a miracle if much of the reduction in NPLs is genuine.
In the member states with negative Target2 balances such as Italy there has been a trend to liquidity problems for legacy industries, rendering them insolvent. With the banking regulator incentivised to remove the problem from the domestic economy, loans to these insolvent companies have been continually rolled over and increased. The consequence is that new businesses have been starved of bank credit, because bank credit in the member nation’s banks is increasingly tied up supporting businesses that should have gone to the wall long ago.
Officially, there is no problem, because the ECB and all the national central bank Target2 positions net out to zero, and the mutual sharing of liabilities between the national central banks keeps it that way. To its architects, a systemic failure of Target2 is inconceivable. But, because some national central banks end up using Target2 as a source of funding for their own balance sheets, which in turn funds their own dodgy commercial banks, some national central banks have mounting potential liabilities not of their own making, but rather the making of national bank regulators. High Potency Vitamin D... Buy New $19.97 ($0.06 / Count) (as of 11:23 UTC - Details)
The Eurosystem member with the greatest problem is Germany’s Bundesbank, now owed close to a trillion euros through Target2. And the risk of losses is now accelerating both in their quantity, and given the economic consequences of Covid-19, the quality of the underlying loan-assets is rapidly deteriorating as well. The main culprits, the national central banks of Italy and Spain, at the same time are seeing their deficits increase rapidly. The Bundesbank should be very concerned. Its directors will be aware of the problem, particularly since it is now in the public domain.[ii]
One may ask how this “mythical surplus” fits in with the Bundesbank’s own balance sheet. As an asset, the surplus was about half of the Bundesbank’s total assets at 31 December 2019, and it finances, among other things, current accounts and deposit facilities of €560bn for its own risk-averse commercial banks.[iii] The Bundesbank’s silence in this matter is increasingly untenable.
Commercial banks are in deep trouble
The position for commercial banks in the eurozone, to say the least, is extremely fragile. For years, they have operated in the strait jacket of negative interest rates imposed by the ECB, which operate as a tax on the commercial banks’ liquidity. They can only offset it by buying government and other bonds with less of a negative yield, or with a positive yield. Alternatively, they can lend revolving capital to business customers and consumers for positive margin. And lastly, they can deploy balance sheets for purely financial purposes, which given underlying fundamentals is becoming a likely source of credit contraction.
One would have thought lending bank credit into the real economy would be the most urgent objective of monetary policy, but as we have seen, the increasing support for zombie corporations to prevent national write-offs precludes other lending for economic benefit. And the ECB’s policy objectives are divorced from this problem, which is the responsibility of the national central banks.
The ECB operates on a higher plain. The real consideration that sets the ECB’s interest rate policy is different: it needs to nurse the finances of insolvent member state governments. It does this through various asset purchase programmes, which allow the ECB to set and supress the cost of funding national deficits. Under its charter the ECB is not allowed to fund member states directly, but it can buy bonds in the secondary market. By buying government bonds, almost entirely from commercial banks, balance sheet space is created for the banks to buy further new issues of government bonds, thus resolving the funding problem.
On the face of it, this is a win-win for the governments which are now being paid to borrow, and also for the banks. The yield on national government debt is always set to ensure that a positive return is obtained for the banks by subscribing for new bonds and selling them to the ECB at what amounts to a guaranteed price. But this zero-risk business comes with wafer-thin margins, which encourages excessive balance sheet expansion to compensate. Deutsche Bank, for example, has a ratio of total 2019 assets to equity of 21.4 times, Credit Agricole 28.1 times, BNP Paribas 20.1 times, and Société Generale 21.4 times. These high rates of leverage can only be borne by banks who can demonstrate very low rates of non-performing loans, a situation that will have changed fatally for all Eurozone banks as a consequence of COVID-19 lockdowns.
Other banks, such as UniCredit in Italy, have lower asset to equity ratios (14.4) and Santander in Spain (15.2), reflecting higher lending risks on their balance sheets as well as problems with non-performing loans. But these ratios are still far too high in the context of a contracting European and global economy. Even though the flood of money unleashed by the ECB and other central banks in response to the coronavirus has broadly remained in the financial economy and therefore is puffing up share prices everywhere, the market’s rating of the equity value of eurozone banks is very low. Table 1 shows how this affects balance sheet gearing from a shareholder’s point of view in the global systemically important banks in the eurozone — the GSIBs.
Even though they permit them to be outrageously high, the regulators focus on total asset to equity ratios becomes positively frightening when the true value of balance sheet equity judged by the market is taken into account. For the eurozone’s banking regulators to ignore the market ratings for these banks is a negation of their primary responsibility, to protect the public from bad banking practice.
The whole regulatory thing is a giant banking sham. As far as the ECB is concerned, the role of the commercial banks is to act as agents in its funding of member states’ budget deficits. But that problem has escalated suddenly in recent months putting additional strains on the whole Eurosystem. Yet the ECB continues to drive the commercial banks into the ground by forcing them towards yet higher ratios on the slimmest of margins in its quest to fund member government deficits. NatureBell Quercetin 1... Buy New $28.95 ($0.12 / Count) (as of 04:29 UTC - Details)
To summarise the problems now faced through the creation of the Eurosystem:
• The national central banks in the PIIGS are now using the Target2 settlement system as a means of their own balance sheet funding in excess of their capital key, which has the effect of burdening the central banks of Germany, Luxembourg, Finland and the Netherlands with excess liabilities in the event of a partial or complete systemic failure.
• Instead of non-performing loans being dealt with at a national level, banks are encouraged to continually finance them and carry them on their balance sheet as being solvent. These loans are then used as collateral for funding from the Italian and Spanish central banks as well as those of Portugal and Greece, which are in turn financed through Target2 imbalances.
• This situation surely should not be tolerated by the Bundesbank in particular, being exposed to close to a trillion euros in a settlement system that is being progressively corrupted by its users.
• Funding government deficits, being the ECB’s primary and now exclusive objective, has led to extreme levels of operational gearing for the eurozone’s commercial banks, which can only result in an eventual collapse of the whole system. Share prices for the region’s GSIBs are in effect trying to discount this outcome.
• The Eurosystem is unsuited to deal with a systemic shock on the scale it now faces and, on its realisation, can be expected to collapse.
National solvency issues
The underlying problem for the eurozone and the ECB is government spending deficits will continue to grow, and no attempt is being made to address this problem. In the process, events have corrupted the banking and settlement systems, setting national central banks against each other as debtors and creditors, and encouraging commercial banks into unsound practices by not writing off bad debts. We should be in no doubt the financial system of the eurozone is heading towards an eventual crisis which will destroy it.
Before COVID-19, the ECB might have been expected by its critics to continue on its path towards financial oblivion for a few more years yet. After all, top-down control systems can persist for decades despite everything, as long as the control is strong enough. But we should be in no doubt that lockdowns have had an undermining impact that calls the survivability of the Eurosystem into more immediate question.
Table 2, which is of the relevant national statistics for Italy and Spain with the addition of highly indebted France, illustrates the problem emanating from lockdowns.
Forecasts for GDP in 2020 are consensus from Focus Economics. Debt to GDP statistics and their forecasts are from Trading Economics. From these, we can derive the economic effect on national private sectors. It is not widely appreciated that headline GDP numbers are bolstered by extra government spending, which when stripped out leaves the private sector exposed to significant falls in GDP on seemingly Panglossian forecasts. Thus, a 10.5% fall in consensus GDP expectations for Italy this year, after increased public spending in connection with the virus, translates into a fall of 28% in private sector GDP.
The effect on the Italian economy will simply lead to a new round of bankruptcies for all levels of Italian business, accumulating on the balance sheets of Italian banks. Similarly, we see Spain’s private sector contracting by 22.5%, and France’s by 24%. In all three cases, consensus forecasts for 2021 are for significant recoveries, conforming to a V-shape. With a second round of lockdowns increasingly likely, those forecasts are vulnerable to reality. The Optimal Dose: Rest... Judson Somerville MD Best Price: $9.96 Buy New $9.98 (as of 06:05 UTC - Details)
Forecasters are almost all Keynesian in that they expect government spending to stimulate economic recovery. But in reality, all that extra government spending can be expected to achieve is a statistical appearance of recovery through the creation of more bank credit to bolster government spending. But with the banking system commandeered to provide inflationary finance for governments and already having over-leveraged balance sheets (Table 1), prospects for economic recovery are remote.
As soon as it becomes clear that the recovery is going to take longer than anticipated we can expect the fragile confidence, that the ECB can continue to keep the show on the road, to evaporate. That is if, and not before, one or more of those highly leveraged eurozone banks does not face bankruptcy itself.
The consequences of financial dislocation
The developing situation embodied in the Target2 settlement system has concealed the rotten core of the Eurosystem. The consequences of imbalances, always dismissed by the authorities, are poorly understood and therefore ignored by financial commentators. But as we have seen, the Eurosystem and its Target2 settlement structure have fostered the concealment of bad debts at the national level, transferring them into the national central bank network.
The principal losers are Germany, Luxembourg, the Netherlands and Finland. Excepting Luxembourg, which can be expected to just go with the flow, the others could be determined enough to form the nucleus of a new currency area; but they are unlikely to do so before the Eurosystem implodes. To do so would actively destroy it, and the balance sheets of their own central banks as well.
The collapse of the Eurosystem would bankrupt the PIGS, and possibly other member states, cutting off all monetary financing. One would doubt, that even in such a crisis, there would emerge the political leadership with the strength, skill and determination to take these nations out of the crisis. As a centralising force, Brussels is utterly useless and will have lost all credibility. Furthermore, the collapse of the Eurosystem would mean the end of the euro as circulating money, so currency replacements, presumably on national lines, would have to emerge.
The ending of the euro will not be mourned. Those which it disciplined through its strength regretted the loss of a money they could print for themselves. And those who end up paying for its failure will have sacrificed all their peoples’ hard-won savings. Vitamin C: The Real St... Steve Hickey, Andrew W... Best Price: $8.91 Buy New $12.47 (as of 10:10 UTC - Details)
For the moment, the euro is strong against the world’s reserve currency. This strength comes partly from its moderate international trade surplus compared with the enormous US trade deficit, and the fact that the dollar is over-owned by foreigners while the euro is not. But in terms of purchasing power both currencies are on their different trajectories to purchasing power destruction.
The Fed’s policy of tying in the dollar to the fortunes of financial asset values is one form of currency destruction, but the euro will be destroyed if, and when, the flawed Eurosystem falls apart.
—
[i] See pwc.com/it/it/publications/npl-market.html
[ii] See Evergreening in the euro area; Steinkamp, Tornell and Westermann, working paper No. 113 July 2018, which describes how zombie companies are being kept afloat and their loans ending up as Target2 collateral.
[iii] Available in English, here: https://www.bundesbank.de/resource/blob/826448/e4325b7ad7d02b2d5720bf564aee4490/mL/2020-02-28-geschaeftsbericht-2019-bilanz-data.pdf. There are errors in the translation, for example the date of the balance sheet is unaltered from the previous year. The translation of the previous year’s contains even more errors!
The views and opinions expressed in this article are those of the author(s) and do not reflect those of Goldmoney, unless expressly stated.
Reprinted with permission from Goldmoney.
The Best of Alasdair Macleod


lewrockwell--2020-07-31--The Fed Doesn’t Have Another Rabbit in Its Hat

Gold has rallied above its previous all-time record high this week .
But can it sustain this bull run ?
Peter Schiff thinks it can and will .
It ’ s not about the coronavirus , as many mainstream analysts seem to think .
It ’ s the government and central bank response to the pandemic — the borrowing , the spending , and the money printing .
Peter believes that ultimately the Fed ’ s monetary policy is going to collapse the dollar and it will lose its reserve status .
In this podcast , he talked about what @ @ @ @ @ @ @ he doesn ’ t think the Fed can kick the can down the road again .
Peter has been talking about a looming dollar collapse for years .
He admits he was wrong on the timing .
He thought it would happen a lot sooner than this .
But he doesn ’ t think he is wrong now just because he was wrong back then .
Donald Trump Gold Coin ... Buy New $ 5.95 Looking back , gold ’ s first major rally was in the 1970s when the price went from @ @ @ @ @ @ @ .
At the time , Fed Chair Paul Volker ’ s willingness to get out of the way and allow interest rates to rise sharply to wherever the market was going to take them stopped that rally and kicked off a 20-year bear market in gold .
“ The Fed did what it took , ” Peter said .
“ They did the right thing.
” The second gold rally started after the dot-com bubble popped and ended after gold set its previous record high just over $ 1,900 back in 2011 .
@ @ @ @ @ @ @ to pull back from $ 1,900 ?
Somehow , they were able to convince the world and everybody who was worried that QE would end in disaster and that zero percent interest rates would be a failure – the Fed was able to convince everybody that the programs worked , and because they worked , they were temporary and would be ended , and that the Fed was going to start normalizing interest rates and shrink the balance sheet back down to pre-2008 crisis levels .
And the market actually believed it.
” @ @ @ @ @ @ @ to raise rates to stop the gold rally .
It just had to convince the world that it would raise rates .
Of course , the Fed never did normalize because it couldn ’ t normalize .
When the central bank finally tried to slowly notch rates up , it broke the stock market in the fall of 2018 .
That led to the “ Powell Pause ” followed by three rate cuts in 2019 and the launch of a quantitative easing program that the Fed refused to call quantitative easing .
The @ @ @ @ @ @ @ up was the rest of the world slashing interest rates and running their own quantitative easing programs .
The dollar got a lot of help from bad monetary policy abroad that made US policy look not as bad in comparison .
As Peter put it , “ We were the cleanest dirty shirt in the hamper.
” So here we are now .
We have another big rally in gold that actually started in 2015 at just over $ 1,000 an ounce .
Peter asks the operative question : what rabbit is the @ @ @ @ @ @ @ hat to stop the gold rally this time ?
2020 1/2 oz Gold Ameri ...
Check Amazon for Pricing .
Peter said that the Fed can ’ t raise rates like it did in 1980 .
The country can ’ t afford it .
There is too much debt .
There isn ’ t enough savings .
And the Fed can ’ t pretend it ’ s going to raise rates like it did in 2008 .
Nobody will believe it .
So what are they going to do ?
Nothing .
There @ @ @ @ @ @ @ , is there something that I haven ’ t thought of ?
I don ’ t know .
Maybe .
But obviously , since I can ’ t think of it , I can ’ t discuss it .
So , is it possible that there ’ s a rabbit in there that I can ’ t see ?
Maybe .
And so that ’ s why we ’ re not going to go all in .
Because you don ’ t know what you don ’ t know .
So , it @ @ @ @ @ @ @ to kick this can down the road again .
I just can ’ t see it .
But the bottom line is we don ’ t have to go all in .
There is so much opportunity in the foreign markets , in the emerging markets , that just having an allocation in gold and gold stocks is all you need.
” Peter went on to talk about the mainstream talking points about this gold rally and the fact that people are actually starting to talk about the dollar losing its reserve status @

Gold has rallied above its previous all-time record high this week. But can it sustain this bull run? Peter Schiff thinks it can and will.
It’s not about the coronavirus, as many mainstream analysts seem to think. It’s the government and central bank response to the pandemic — the borrowing, the spending, and the money printing. Peter believes that ultimately the Fed’s monetary policy is going to collapse the dollar and it will lose its reserve status. In this podcast, he talked about what this portends. He also explained why he doesn’t think the Fed can kick the can down the road again.
Peter has been talking about a looming dollar collapse for years. He admits he was wrong on the timing. He thought it would happen a lot sooner than this. But he doesn’t think he is wrong now just because he was wrong back then. Donald Trump Gold Coin... Buy New $5.95 (as of 06:23 UTC - Details)
The problems are so much bigger now than they were a decade ago, and therefore, I think our ability to kick the can down the road again, I think is gone. I mean, yes, I underestimated that ability before, but at this point, it’s impossible. And so I don’t really see how the US government, the Federal Reserve, is going to stop gold from going up.”
Looking back, gold’s first major rally was in the 1970s when the price went from around $35 to over $800. At the time, Fed Chair Paul Volker’s willingness to get out of the way and allow interest rates to rise sharply to wherever the market was going to take them stopped that rally and kicked off a 20-year bear market in gold. “The Fed did what it took,” Peter said. “They did the right thing.”
The second gold rally started after the dot-com bubble popped and ended after gold set its previous record high just over $1,900 back in 2011. What stopped that? What caused gold to pull back from $1,900?
Somehow, they were able to convince the world and everybody who was worried that QE would end in disaster and that zero percent interest rates would be a failure – the Fed was able to convince everybody that the programs worked, and because they worked, they were temporary and would be ended, and that the Fed was going to start normalizing interest rates and shrink the balance sheet back down to pre-2008 crisis levels. And the market actually believed it.”
In effect, the Fed never had to raise rates to stop the gold rally. It just had to convince the world that it would raise rates.
Of course, the Fed never did normalize because it couldn’t normalize. When the central bank finally tried to slowly notch rates up, it broke the stock market in the fall of 2018. That led to the “Powell Pause” followed by three rate cuts in 2019 and the launch of a quantitative easing program that the Fed refused to call quantitative easing.
The other thing that kept the dollar propped up was the rest of the world slashing interest rates and running their own quantitative easing programs. The dollar got a lot of help from bad monetary policy abroad that made US policy look not as bad in comparison. As Peter put it, “We were the cleanest dirty shirt in the hamper.”
So here we are now. We have another big rally in gold that actually started in 2015 at just over $1,000 an ounce. Peter asks the operative question: what rabbit is the Fed going to pull out of its hat to stop the gold rally this time? 2020 1/2 oz Gold Ameri... Check Amazon for Pricing.
I think the hat’s empty. There are no more rabbits in there.”
Peter said that the Fed can’t raise rates like it did in 1980. The country can’t afford it. There is too much debt. There isn’t enough savings. And the Fed can’t pretend it’s going to raise rates like it did in 2008. Nobody will believe it.
So what are they going to do? Nothing. There is nothing they can do. Now, is there something that I haven’t thought of? I don’t know. Maybe. But obviously, since I can’t think of it, I can’t discuss it. So, is it possible that there’s a rabbit in there that I can’t see? Maybe. And so that’s why we’re not going to go all in. Because you don’t know what you don’t know. So, it is possible that there is a way to kick this can down the road again. I just can’t see it. But the bottom line is we don’t have to go all in. There is so much opportunity in the foreign markets, in the emerging markets, that just having an allocation in gold and gold stocks is all you need.”
Peter went on to talk about the mainstream talking points about this gold rally and the fact that people are actually starting to talk about the dollar losing its reserve status.
Reprinted from SchiffGold.com.


CIA Project MK-ULTRA

This essay is an edited and abridged version , with content reformatted , of that originally posted here .
It is updated with some new material and full references .
A list of the most important references is at the end of the essay , before the notes .
I deleted the small portion on P. W. Botha because I was unable to locate my primary reference which was text extracted from the Truth and Reconciliation hearings held in South Africa .
The content was testimony by one of Botha ’ s underlings at a hearing that Botha refused to @ @ @ @ @ @ @ the validity of statements , I deleted that section .
The United States government funded and performed countless psychological experiments on unwitting humans , especially during the Cold War era , perhaps partially to help develop more effective torture and interrogation techniques for the US military and the CIA , but the almost unbelievable extent , range and duration of these activities far surpassed possible interrogation applications and appear to have been performed from a fundamental monstrous inhumanity .
To simply read summaries of these , even without the details , is almost @ @ @ @ @ @ @ T ... Jacobsen , Annie Best Price : $ 9.51 Buy New $ 12.83 In studies that began in the late 1940s and early 1950s , the US Military began identifying and testing truth serums like mescaline and scopolamine on human subjects , which they claimed might be useful during interrogations of Soviet spies .
These programs eventually expanded to a project of vast scope and enormous ambition , centralised under the CIA in what would come to be called Project MK-ULTRA , a major collection of interrogation and mind-control projects .
Inspired @ @ @ @ @ @ @ , the CIA began thousands of experiments using both American and foreign subjects often without their knowledge or against their will , destroying countless tens of thousands of lives and causing many deaths and suicides .
Funded in part by the Rockefeller and Ford foundations and jointly operated by the CIA , the FBI and the intelligence divisions of all military groups , this decades-long CIA research constituted an immense collection of some of the most cold-blooded and callous atrocities conceivable , in a determined effort to develop reliable techniques of controlling the @ @ @ @ @ @ @ for a large number of clandestine activities that formed part of the CIA ’ s psychological warfare research and development , consisting of about 150 projects and sub-projects , many of them very large in their own right , with research and human experimentation occurring at more than 80 institutions that included about 50 of America ’ s best-known colleges and universities , 15 or 20 major research Foundations including Rockefeller , dozens of major hospitals , a great many prisons and mental institutions , and many chemical and pharmaceutical companies .
At @ @ @ @ @ @ @ part of this program , as were many thousands of physicians , psychiatrists , psychologists and other similar .
Many of these institutions and individuals received their funding through so-called “ grants ” from what were clearly CIA front companies .
In 1994 a Congressional subcommittee revealed that up to 500,000 unwitting Americans were endangered , damaged or destroyed by secret CIA and military tests between 1940 and 1974 .
Given the deliberate destruction of all the records , the full truth of the MK-ULTRA victims will never be known , and certainly @ @ @ @ @ @ @ inspector general of the US Army later stated in a report to a Senate committee : “ In universities , hospitals and research institutions , an unknown number of chemical tests and experiments … were carried out with healthy adults , with mentally ill and with prison inmates.
” According to one government report , “ In 149 separate mind-control experiments on thousands of people , CIA researchers used hypnosis , electroshock treatments , LSD , marijuana , morphine , Benzedrine , mescaline , seconal , atropine and other drugs.
” Test subjects @ @ @ @ @ @ @ object – prisoners , mental patients and members of minority groups – but the agency also performed many experiments on normal , healthy civilians without their knowledge or consent .
Mind Wars : A History o ... Flaxman , Larry Best Price : $ 8.15 Buy New $ 12.43 There were 149 subprojects listed under the umbrella of MKULTRA .
Project MONARCH has not been officially identified by any government documentation as one of the corresponding subprojects , but is used rather , as a descriptive “ catch phrase ” by survivors , @ @ @ @ @ @ @ .
MONARCH may in fact , have culminated from MKSEARCH subprojects such as operation SPELLBINDER , which was set up to create “ sleeper ” assassins ( i.e .
“ Manchurian candidates ” ) who could be activated upon receiving a key word or phrase while in a post-hypnotic trance .
Operation OFTEN , a study which attempted to harness the power of occult forces was possibly one of several cover programs to hide the insidious reality of Project MONARCH .
There were also operations BLUEBIRD , ARTICHOKE , MKNAOMI , and MKDELTA @ @ @ @ @ @ @ consisted of a network of CIA locations to which prostitutes on the CIA payroll would lure clients where they were surreptitiously plied with a wide range of substances including LSD , and monitored behind one-way glass .
Several significant operational techniques were developed in this theater , including extensive research into sexual blackmail , surveillance technology , and the possible use of mind-altering drugs in field operations .
In the 1970s , as another part of its mind control program , the CIA conspired with Eli Lilly and Company to produce one hundred @ @ @ @ @ @ @ , enough to send almost everyone in the United States on a trip.No explanation was ever given as to what the CIA did with a hundred million doses of acid but , since much of this activity was exported , reviewing international political events during this period may bring interesting possibilities to mind .
Another part of the CIA mind-control project was aimed at finding a “ truth serum ” to use on spies .
Test subjects were given LSD and other drugs , often without their knowledge or consent , and some @ @ @ @ @ @ @ or were killed – as a result of these experiments , and an unknown number of government employees working on these projects were murdered for fear they would tell what they had seen , perhaps the best-known being Frank Olson whose death I have described below .
The project was steadfastly denied by both the government and the CIA , but was finally exposed after investigations by the Rockefeller Commission .
When this information became known , the US government paid many millions of dollars to settle the hundreds of claims and lawsuits @ @ @ @ @ @ @ that these programs had never been terminated .
Project Stargate and R ... Best Price : $ 16.91 Buy New $ 21.21 As already noted , MK-ULTRA and its brethren grew out of Operation Paperclip in which more than 10,000 Japanese and some German scientists of all stripes were smuggled into the US after the Second World War , to provide the government with information on torture and interrogation techniques .
It isn ’ t widely known but , as part of Operation Paperclip , the CIA recruited for MK-ULTRA Shiro Ishii , @ @ @ @ @ @ @ 731 which conducted some of the most horrendous human atrocities in history , including the live vivisection of children .
It also imported at the same time at least ten thousands of the staff from Unit 731 , housed them on US military bases and gave them full immunity from prosecution for their war crimes and crimes against humanity .
It is for this reason almost no Japanese faced trial for their crimes : they were all in America , contributing their skills to MK-ULTRA .
The CIA also imported some Germans who @ @ @ @ @ @ @ isn ’ t widely-known , but this entire project had its birth not in the US but at The Tavistock Institute of Human Relations in the UK , an institute with an exceptionally cold-blooded past .
I will return to Tavistock in later chapters .
The CIA leadership had concerns about discovery of their unethical and illegal behavior , as evidenced in a 1957 Inspector General Report , which stated : The CIA ’ s MK-ULTRA activities continued until well into the 1970s when CIA director Richard Helms , fearing that they would @ @ @ @ @ @ @ the project terminated and all of the files destroyed .
However , a clerical error had sent many documents to the wrong office , so when CIA workers were destroying the files , some of them remained and were later released under a Freedom of Information Act request by investigative journalist John Marks .
Nevertheless , because the records have almost all been destroyed , the numbers and identities of the victims will never be known .
The Stanford Research Institute ( SRI ) describes its mission as “ creating world-changing solutions to @ @ @ @ @ @ @ more productive.
” Wikipedia tells us the trustees of Stanford University established SRI in 1946 as “ a center of innovation to support economic development in the region ” .
I have no evidence that SRI has made anyone safer or more productive and , whatever the original purpose of this institution , supporting economic development of the region wouldn ’ t appear to have been very high on the list .
From my research , there are few institutions in America that have had their histories more thoroughly sanitised than SRI .
@ @ @ @ @ @ @ CIA ’ s MK-ULTRA and other inhuman projects have evaporated from the narrative .
In August of 1977 , the Washington Post exposed some of these projects ; there were likely many more .
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Best Price : $ 1.34 Buy New $ 12.55 One of SRI ’ s past activities involved contracts awarded by the CIA and the US Navy to research and develop long-distance mind control using radio waves .
The CIA had already funded MK-ULTRA projects at Honeywell for “ @ @ @ @ @ @ @ ’ s mind and control his brain waves over long distance ” .
In the 1960s , then-Director of the CIA , Richard Helms , was excited about what was termed “ biological radio communication ” , and the Washington Post published concrete evidence that electronic mind control was a major object of study at SRI at the time .
The theory was that extremely low frequency electromagnetic waves from the brain could be used to control individual subjects , sometimes called “ empaths ” , a great many of whom ( inexplicably @ @ @ @ @ @ @ ‘ s Church of Scientology .
Experiments also under the SRI , in what was sometimes called “ Stargate Research ” , done entirely with a military biotechnology focus , the American Institutes of Research ( AIR ) in Washington was also involved in researching and evaluating what was called “ remote viewing ” or the potential use of psychic phenomena ( ESP ) in military and domestic applications .
For all of this , declassified government files disclosed the vastness of several series of mind control and behavior modification experiments conducted in @ @ @ @ @ @ @ 1950 through the early 1970s , with about 45 institutions and laboratories engaged in this secret and inhumane brain research , of which SRI was an integral part .
The project was under the direct command of a Dr. Sidney Gottlieb and received undisclosed but almost unlimited millions of dollars for hundreds of experiments on human subjects at hundreds of locations across the United States , Canada and Europe , the eventual budget for this program apparently having exceeded $ 1 billion per year .
The evil in some of these MK-ULTRA documents @ @ @ @ @ @ @ from 1955 stating openly of a search for “ substances which will cause ( temporary or ) permanent brain damage as well as loss of memory ” .
Part of the intent was to develop “ techniques that would crush the human psyche to the point that it would admit anything ” .
In a US government memo from 1952 , a program director asked , “ Can we get control of an individual to the point where he will do our bidding against his will and even against fundamental laws of nature @ @ @ @ @ @ @ also listed the wide range of horrid abuses to which the victims would be subjected .
These people were not bashful about their intent .
The Seventh Sense : The ... Buchanan , Lyn Best Price : $ 13.87 Buy New $ 14.00 The mechanics included primordial sex programming for women in attempts to eliminate learned moral convictions and stimulate primitive sexual instinct devoid of inhibitions , to create a kind of sex machine – the ultimate prostitute for diplomatic espionage .
Several researchers have claimed the sexual appetite of these women was @ @ @ @ @ @ @ through constant incest with a government employee who had been deliberately developed as a father figure to the girls .
In part , these programs involved conditioning the human mind through torture , with one portion of this program intended to train special agents as fearless terrorists lacking self-preservation instincts and who would willingly commit suicide if caught .
They even experimented with electronic implants , inaudible sounds , messages embedded in the subconscious mind , mind altering drugs and much more .
One portion of this extensive operation involved an attempt to @ @ @ @ @ @ @ if it were possible to kidnap a national in another country , conduct hypnosis and other techniques , then return them home to assassinate their leaders .
There was also a Dr. John Gittinger who was Sidney Gottlieb ’ s protégé and who developed an astonishing complex of personality and psychological tests that were apparently quite accurate in guiding the CIA in determining the best approach toward manipulating and compromising individuals , including turning patriots into spies , as well as converting housewives , nurses , and high-priced fashion models into very effective @ @ @ @ @ @ @ much more .
Gittinger was so successful the CIA built him a special party room walled with one-way mirrors where CIA psychologists could watch these compromised people at work .
Gittinger was apparently a “ specialist ” at making his victims lose touch with external reality , no doubt in conjunction with Gottlieb ’ s LSD .
He also was apparently quite expert at identifying those individuals who could be easily hypnotised , those who would quickly go into a trance compared to those who would not , and also those who would @ @ @ @ @ @ @ suggestions and experience total amnesia afterward .
Perfect assassins .
Gittinger applied his “ personality ” tests to at least 30,000 people , since he had files on at least that many , so this was not a trivial exercise for the CIA .
And , since this was the CIA , he was especially interested in deviant personalities , or those that could be made deviant , those with vices or with weaknesses that could be further programmed , especially to become traitors , and those who would be most susceptible to @ @ @ @ @ @ @ worked closely with Harris Isbell , who ran the MKULTRA mind-control drug program at the Lexington , Kentucky detention hospital , who would send him hundreds of people who could be pushed to “ uncontrollable urges ” , especially of a sexual or a murderous nature .
Or both .
This was one main use of the party room with the one-way mirrors .
Ironically , it was Gittinger who inadvertently put the wheels in motion for the impeachment and resignation of then-US President Richard Nixon .
When Daniel Ellsberg released the Pentagon @ @ @ @ @ @ @ s personal assistant , arranged for the CIA to break into the office of Ellsberg ’ s psychiatrist to obtain a copy of Gittinger ’ s personality and emotional test on this man , meant to be used by the CIA “ as a kind of psychological road map to compromise Ellsberg ” , just as they did in exploiting the weaknesses of so many others .
Unfortunately , the burglars bungled the job .
The Seven Sins of Memo ... Schacter , Daniel L. Best Price : $ 3.52 Buy New $ @ @ @ @ @ @ @ an American nurse who , after completing her training by Gottlieb and Gittinger , “ had volunteered her body for her country ” , and who was being programmed as the personal Mata Hari of a particular Russian diplomat and either get him to defect to the US or to become so compromised they could blackmail him into becoming an American spy .
And , when necessary , “ terminate ” him .
A great many of these encounters with what were called “ recruitment targets ” occurred in the room with the @ @ @ @ @ @ @ , one part of the sexual technology developed in the CIA safe houses in San Francisco as part of Operation Midnight Climax .
Gottlieb ’ s Technical Services staff apparently amassed quite a wealth of experience and an abundance of “ volunteers ” in these sexual entrapment operations , claiming , “ We had women ready – call them a stable ” , who were quite adept at not only seduction but all manner of sexual activity and murder for the national security of their country .
Another portion of this same program @ @ @ @ @ @ @ I was sent to deal with the most negative aspects of the human condition .
It was planned destructiveness .
First , you ’ d check to see if you could destroy a man ’ s marriage .
If you could , then that would be enough to put a lot of stress on the individual , to break him down .
Then you might start a minor rumor campaign against him .
Harass him constantly .
Bump his car in traffic .
A lot of it is ridiculous , but it may @ @ @ @ @ @ @ , according to Gittinger ’ s personality tests , was that the creation of sufficient stress from destructive personal loss , combined with other programming including the application of psycho-chemical drugs , would either turn an enemy or render him totally neutralised .
The CIA did all of these not only in America , but around the world , using Gittinger ’ s personality profiles to identify those military and other leaders in nations the US wanted to control .
The psychological testing , combined with all the other dirty tricks of the @ @ @ @ @ @ @ , housewives and models who could be persuaded to develop “ uncontrollable urges ” to “ volunteer her body for her country ” , greatly assisted the US government in placing into power those who could be counted on to obey their colonial master .
South Korea and Japan are two good examples of this , as are many countries in Latin America .
The CIA , with the immense assistance of Gottlieb and Gittinger , could always spot those “ who were most likely to succumb ” .
Louis Jolyon ( Jolly @ @ @ @ @ @ @ ) was a well-known Los Angles psychiatrist who served as the chair of UCLA ’ s Department of Psychiatry and as director of the UCLA Neuropsychiatric Institute from 1969 to 1989 .
He was an expert on cults , coercive persuasion ( “ brainwashing ” ) , alcoholism , drug abuse , violence , and terrorism , not in preventing these but in causing them .
His “ Violence Project ” is famous .
The Magician : John Mul ... Robinson , Ben Best Price : $ 18.83 Buy New $ 18.52 From @ @ @ @ @ @ @ excited about the possibilities in these experiments at SRI that a great many millions of dollars were diverted to these projects , augmented by parapsychology experiments simultaneously undertaken at Fort Meade by the NSA .
Medical oversight for this enormous range of experiments was under the control of yet another CIA pervert , Dr. Louis Jolyon West , then a professor of psychiatry at UCLA , one of the most notorious CIA mind-control specialists in the country .
It is difficult to avoid the conclusion that these people were all crazy , since @ @ @ @ @ @ @ and military intelligence ( and of course the Church of Scientology ) all cooperated with SRI in research that included Tarot cards , the channeling of spirits , communing with demons , and more .
But according to SRI itself , Dr. West ’ s work included not only radio waves and parapsychology , but the creation of dissociative personalities “ that enabled the subjects of mind-control conditioning to adapt to trauma ” .
West referred to these people as “ changelings ” who produced alternate but actually schizophrenic insane mental states ( @ @ @ @ @ @ @ to deal with what was termed “ prolonged environmental stress ” , i.e .
forced drug injections , physical , mental and sexual abuse , and psychic programming , all usually utilising large dosages of LSD , Gottlieb ’ s chemical of choice .
There is adequate documentation that many individuals who were subjected to this CIA-sponsored “ research ” , developed multiple personalities , many of which were forcibly induced at a young age .
There are documented stories by a few survivors who tell of enormous abuse of every kind being @ @ @ @ @ @ @ years of age , and of having to deal with the terror of what appeared to be many different people living inside their minds .
Dr. Jolyon West became a kind of research expert in these dissociative states and much of his work for the CIA ’ s MK-ULTRA program centered on their creation .
The records reveal success in creating amnesia , false memories , altered personas , pseudo-identities , and much more , all horrifying and tragic to the individuals involved , all from West ’ s research in methods to @ @ @ @ @ @ @ personality ” , and render people totally subject to remote control .
In Sid Gottlieb ’ s group there were also scientists who implanted electrodes into human and other brains in yet more mind-control experiments , even done on children as young as four or five years of age , all with the intention of creating a perfect ‘ Manchurian Candidate ’ , as well as erasing memories and creating artificial ones and , of course , total control of the individual .
This research into electrode implants was funded by the CIA @ @ @ @ @ @ @ of US Naval Research , and mostly supervised by our famous Dr. West .
In fact , West began what was called the “ UCLA Violence Project ” at the Vacaville Prison where Donald Defreeze was apparently programmed .
The projects received a great deal of funding , as I recall , much of it including West .
Many early interrogation studies were conducted by the Cornell University Medical School under the direction of a Dr. Harold Wolff who requested from the CIA any information regarding “ threats , coercion , imprisonment , @ @ @ @ @ @ @ brainwashing ’ , ‘ black psychiatry ’ , and hypnosis , or any combination of these , with or without chemical agents ” .
According to Wolff , the research team would then : “ …assemble , collate , analyze and assimilate this information and will then undertake experimental investigations designed to develop new techniques of offensive/defensive intelligence use … Potentially useful secret drugs [ and various brain damaging procedures ] will be similarly tested in order to ascertain the fundamental effect upon human brain function and upon the subject ’ s mood @ @ @ @ @ @ @ rather chillingly , wrote , “ Where any of the studies involve potential harm of the subject , we expect the Agency to make available suitable subjects and a proper place for the performance of the necessary experiments.
” Among the many other prominent universities and institutions participating in this travesty was Tulane University where both the CIA and the US military had funded what appeared to be very large-scale programs of trauma-based mind control experiments on children .
In 1955 , the US Army reported on studies in which their researchers had @ @ @ @ @ @ @ patients to assess the effects of LSD and a host of other untested drugs .
It was at Tulane that some of the earliest sensory-deprivation experiments were conducted , isolating individuals in these chambers where they would be helplessly hallucinating for as long as one week at a time while being injected with drugs and bombarded them with taped messages , to see if individuals could be “ converted to new beliefs ” .
These were all helpless victims who had no idea of what was happening to them .
There is a @ @ @ @ @ @ @ and hospitals that participated in similar human destruction , all of which have carefully santised their histories .

Note to readers:
This essay is an edited and abridged version, with content reformatted, of that originally posted here. It is updated with some new material and full references. A list of the most important references is at the end of the essay, before the notes. I deleted the small portion on P. W. Botha because I was unable to locate my primary reference which was text extracted from the Truth and Reconciliation hearings held in South Africa. The content was testimony by one of Botha’s underlings at a hearing that Botha refused to attend. Rather than leave questions about the validity of statements, I deleted that section.
CIA Project MK-ULTRA
The United States government funded and performed countless psychological experiments on unwitting humans, especially during the Cold War era, perhaps partially to help develop more effective torture and interrogation techniques for the US military and the CIA, but the almost unbelievable extent, range and duration of these activities far surpassed possible interrogation applications and appear to have been performed from a fundamental monstrous inhumanity. To simply read summaries of these, even without the details, is almost traumatising in itself. Operation Paperclip: T... Jacobsen, Annie Best Price: $9.51 Buy New $12.83 (as of 05:25 UTC - Details)
In studies that began in the late 1940s and early 1950s, the US Military began identifying and testing truth serums like mescaline and scopolamine on human subjects, which they claimed might be useful during interrogations of Soviet spies. These programs eventually expanded to a project of vast scope and enormous ambition, centralised under the CIA in what would come to be called Project MK-ULTRA, a major collection of interrogation and mind-control projects. Inspired initially by delusions of a brainwashing program, the CIA began thousands of experiments using both American and foreign subjects often without their knowledge or against their will, destroying countless tens of thousands of lives and causing many deaths and suicides. Funded in part by the Rockefeller and Ford foundations and jointly operated by the CIA, the FBI and the intelligence divisions of all military groups, this decades-long CIA research constituted an immense collection of some of the most cold-blooded and callous atrocities conceivable, in a determined effort to develop reliable techniques of controlling the human mind.
MK-ULTRA was an umbrella for a large number of clandestine activities that formed part of the CIA’s psychological warfare research and development, consisting of about 150 projects and sub-projects, many of them very large in their own right, with research and human experimentation occurring at more than 80 institutions that included about 50 of America’s best-known colleges and universities, 15 or 20 major research Foundations including Rockefeller, dozens of major hospitals, a great many prisons and mental institutions, and many chemical and pharmaceutical companies. At least 200 well-known private scientific researchers were part of this program, as were many thousands of physicians, psychiatrists, psychologists and other similar. Many of these institutions and individuals received their funding through so-called “grants” from what were clearly CIA front companies. In 1994 a Congressional subcommittee revealed that up to 500,000 unwitting Americans were endangered, damaged or destroyed by secret CIA and military tests between 1940 and 1974. Given the deliberate destruction of all the records, the full truth of the MK-ULTRA victims will never be known, and certainly not the death toll. As the inspector general of the US Army later stated in a report to a Senate committee: “In universities, hospitals and research institutions, an unknown number of chemical tests and experiments … were carried out with healthy adults, with mentally ill and with prison inmates.” According to one government report, “In 149 separate mind-control experiments on thousands of people, CIA researchers used hypnosis, electroshock treatments, LSD, marijuana, morphine, Benzedrine, mescaline, seconal, atropine and other drugs.” Test subjects were usually people who could not easily object – prisoners, mental patients and members of minority groups – but the agency also performed many experiments on normal, healthy civilians without their knowledge or consent. Mind Wars: A History o... Flaxman, Larry Best Price: $8.15 Buy New $12.43 (as of 01:10 UTC - Details)
There were 149 subprojects listed under the umbrella of MKULTRA. Project MONARCH has not been officially identified by any government documentation as one of the corresponding subprojects, but is used rather, as a descriptive “catch phrase” by survivors, therapists, and possible “insiders”. MONARCH may in fact, have culminated from MKSEARCH subprojects such as operation SPELLBINDER, which was set up to create “sleeper” assassins (i.e. “Manchurian candidates”) who could be activated upon receiving a key word or phrase while in a post-hypnotic trance. Operation OFTEN, a study which attempted to harness the power of occult forces was possibly one of several cover programs to hide the insidious reality of Project MONARCH. There were also operations BLUEBIRD, ARTICHOKE, MKNAOMI, and MKDELTA.
Another CIA Operation called Midnight Climax consisted of a network of CIA locations to which prostitutes on the CIA payroll would lure clients where they were surreptitiously plied with a wide range of substances including LSD, and monitored behind one-way glass. Several significant operational techniques were developed in this theater, including extensive research into sexual blackmail, surveillance technology, and the possible use of mind-altering drugs in field operations. In the 1970s, as another part of its mind control program, the CIA conspired with Eli Lilly and Company to produce one hundred million doses of the illegal drug LSD, enough to send almost everyone in the United States on a trip.No explanation was ever given as to what the CIA did with a hundred million doses of acid but, since much of this activity was exported, reviewing international political events during this period may bring interesting possibilities to mind.
Frank Olson Project
Another part of the CIA mind-control project was aimed at finding a “truth serum” to use on spies. Test subjects were given LSD and other drugs, often without their knowledge or consent, and some were tortured. Many people died – or were killed – as a result of these experiments, and an unknown number of government employees working on these projects were murdered for fear they would tell what they had seen, perhaps the best-known being Frank Olson whose death I have described below. The project was steadfastly denied by both the government and the CIA, but was finally exposed after investigations by the Rockefeller Commission. When this information became known, the US government paid many millions of dollars to settle the hundreds of claims and lawsuits that resulted. There exists much evidence that these programs had never been terminated.
Unit 731
Project Stargate and R... Best Price: $16.91 Buy New $21.21 (as of 03:53 UTC - Details) As already noted, MK-ULTRA and its brethren grew out of Operation Paperclip in which more than 10,000 Japanese and some German scientists of all stripes were smuggled into the US after the Second World War, to provide the government with information on torture and interrogation techniques. It isn’t widely known but, as part of Operation Paperclip, the CIA recruited for MK-ULTRA Shiro Ishii, the head of Japan’s Unit 731 which conducted some of the most horrendous human atrocities in history, including the live vivisection of children. It also imported at the same time at least ten thousands of the staff from Unit 731, housed them on US military bases and gave them full immunity from prosecution for their war crimes and crimes against humanity. It is for this reason almost no Japanese faced trial for their crimes: they were all in America, contributing their skills to MK-ULTRA. The CIA also imported some Germans who had performed human experimentation. It also isn’t widely-known, but this entire project had its birth not in the US but at The Tavistock Institute of Human Relations in the UK, an institute with an exceptionally cold-blooded past. I will return to Tavistock in later chapters.
The CIA leadership had concerns about discovery of their unethical and illegal behavior, as evidenced in a 1957 Inspector General Report, which stated:
“Precautions must be taken not only to protect operations from exposure to enemy forces but also to conceal these activities from the American public in general. The knowledge that the agency is engaging in unethical and illicit activities would have serious repercussions in political and diplomatic circles”.
The CIA’s MK-ULTRA activities continued until well into the 1970s when CIA director Richard Helms, fearing that they would be exposed to the public, ordered the project terminated and all of the files destroyed. However, a clerical error had sent many documents to the wrong office, so when CIA workers were destroying the files, some of them remained and were later released under a Freedom of Information Act request by investigative journalist John Marks. Nevertheless, because the records have almost all been destroyed, the numbers and identities of the victims will never be known.
The Stanford Research Institute
The Stanford Research Institute (SRI) describes its mission as “creating world-changing solutions to make people safer, healthier, and more productive.” Wikipedia tells us the trustees of Stanford University established SRI in 1946 as “a center of innovation to support economic development in the region”. I have no evidence that SRI has made anyone safer or more productive and, whatever the original purpose of this institution, supporting economic development of the region wouldn’t appear to have been very high on the list. From my research, there are few institutions in America that have had their histories more thoroughly sanitised than SRI. Certainly all references to participation in the CIA’s MK-ULTRA and other inhuman projects have evaporated from the narrative. In August of 1977, the Washington Post exposed some of these projects; there were likely many more. Memory’S Ghost: ... Hilts, Philip J. Best Price: $1.34 Buy New $12.55 (as of 03:53 UTC - Details)
One of SRI’s past activities involved contracts awarded by the CIA and the US Navy to research and develop long-distance mind control using radio waves. The CIA had already funded MK-ULTRA projects at Honeywell for “a method to penetrate inside a man’s mind and control his brain waves over long distance”. In the 1960s, then-Director of the CIA, Richard Helms, was excited about what was termed “biological radio communication”, and the Washington Post published concrete evidence that electronic mind control was a major object of study at SRI at the time. The theory was that extremely low frequency electromagnetic waves from the brain could be used to control individual subjects, sometimes called “empaths”, a great many of whom (inexplicably) were drawn from L. Ron Hubbard‘s Church of Scientology.
“Stargate Research”
Experiments also under the SRI, in what was sometimes called “Stargate Research”, done entirely with a military biotechnology focus, the American Institutes of Research (AIR) in Washington was also involved in researching and evaluating what was called “remote viewing” or the potential use of psychic phenomena (ESP) in military and domestic applications. For all of this, declassified government files disclosed the vastness of several series of mind control and behavior modification experiments conducted in prisons, mental hospitals and campuses from 1950 through the early 1970s, with about 45 institutions and laboratories engaged in this secret and inhumane brain research, of which SRI was an integral part.
MK-Programs Leadership and Scope
The project was under the direct command of a Dr. Sidney Gottlieb and received undisclosed but almost unlimited millions of dollars for hundreds of experiments on human subjects at hundreds of locations across the United States, Canada and Europe, the eventual budget for this program apparently having exceeded $1 billion per year. The evil in some of these MK-ULTRA documents is almost palpable, one such document from 1955 stating openly of a search for “substances which will cause (temporary or) permanent brain damage as well as loss of memory”. Part of the intent was to develop “techniques that would crush the human psyche to the point that it would admit anything”. In a US government memo from 1952, a program director asked, “Can we get control of an individual to the point where he will do our bidding against his will and even against fundamental laws of nature, such as self-preservation?” It also listed the wide range of horrid abuses to which the victims would be subjected. These people were not bashful about their intent. The Seventh Sense: The... Buchanan, Lyn Best Price: $13.87 Buy New $14.00 (as of 03:53 UTC - Details)
The mechanics included primordial sex programming for women in attempts to eliminate learned moral convictions and stimulate primitive sexual instinct devoid of inhibitions, to create a kind of sex machine – the ultimate prostitute for diplomatic espionage. Several researchers have claimed the sexual appetite of these women was developed in young girls their formative years through constant incest with a government employee who had been deliberately developed as a father figure to the girls. In part, these programs involved conditioning the human mind through torture, with one portion of this program intended to train special agents as fearless terrorists lacking self-preservation instincts and who would willingly commit suicide if caught. They even experimented with electronic implants, inaudible sounds, messages embedded in the subconscious mind, mind altering drugs and much more. One portion of this extensive operation involved an attempt to create an assassins program, to learn if it were possible to kidnap a national in another country, conduct hypnosis and other techniques, then return them home to assassinate their leaders.
Dr. John Gittinger
There was also a Dr. John Gittinger who was Sidney Gottlieb’s protégé and who developed an astonishing complex of personality and psychological tests that were apparently quite accurate in guiding the CIA in determining the best approach toward manipulating and compromising individuals, including turning patriots into spies, as well as converting housewives, nurses, and high-priced fashion models into very effective espionage prostitutes, killers, and so much more. Gittinger was so successful the CIA built him a special party room walled with one-way mirrors where CIA psychologists could watch these compromised people at work. Gittinger was apparently a “specialist” at making his victims lose touch with external reality, no doubt in conjunction with Gottlieb’s LSD. He also was apparently quite expert at identifying those individuals who could be easily hypnotised, those who would quickly go into a trance compared to those who would not, and also those who would faithfully comply with any and all post-hypnotic suggestions and experience total amnesia afterward. Perfect assassins.
Gittinger applied his “personality” tests to at least 30,000 people, since he had files on at least that many, so this was not a trivial exercise for the CIA. And, since this was the CIA, he was especially interested in deviant personalities, or those that could be made deviant, those with vices or with weaknesses that could be further programmed, especially to become traitors, and those who would be most susceptible to the influence of psychedelic drugs. He worked closely with Harris Isbell, who ran the MKULTRA mind-control drug program at the Lexington, Kentucky detention hospital, who would send him hundreds of people who could be pushed to “uncontrollable urges”, especially of a sexual or a murderous nature. Or both. This was one main use of the party room with the one-way mirrors. Ironically, it was Gittinger who inadvertently put the wheels in motion for the impeachment and resignation of then-US President Richard Nixon. When Daniel Ellsberg released the Pentagon Papers, John Ehrlichman, Nixon’s personal assistant, arranged for the CIA to break into the office of Ellsberg’s psychiatrist to obtain a copy of Gittinger’s personality and emotional test on this man, meant to be used by the CIA “as a kind of psychological road map to compromise Ellsberg”, just as they did in exploiting the weaknesses of so many others. Unfortunately, the burglars bungled the job. The Seven Sins of Memo... Schacter, Daniel L. Best Price: $3.52 Buy New $11.00 (as of 03:53 UTC - Details)
There was one documented story of an American nurse who, after completing her training by Gottlieb and Gittinger, “had volunteered her body for her country”, and who was being programmed as the personal Mata Hari of a particular Russian diplomat and either get him to defect to the US or to become so compromised they could blackmail him into becoming an American spy. And, when necessary, “terminate” him. A great many of these encounters with what were called “recruitment targets” occurred in the room with the one-way mirrors and all recorded on film, one part of the sexual technology developed in the CIA safe houses in San Francisco as part of Operation Midnight Climax. Gottlieb’s Technical Services staff apparently amassed quite a wealth of experience and an abundance of “volunteers” in these sexual entrapment operations, claiming, “We had women ready – call them a stable”, who were quite adept at not only seduction but all manner of sexual activity and murder for the national security of their country.
Another portion of this same program designed to control individuals totally, “I was sent to deal with the most negative aspects of the human condition. It was planned destructiveness. First, you’d check to see if you could destroy a man’s marriage. If you could, then that would be enough to put a lot of stress on the individual, to break him down. Then you might start a minor rumor campaign against him. Harass him constantly. Bump his car in traffic. A lot of it is ridiculous, but it may have a cumulative effect.” The theory, according to Gittinger’s personality tests, was that the creation of sufficient stress from destructive personal loss, combined with other programming including the application of psycho-chemical drugs, would either turn an enemy or render him totally neutralised.
The CIA did all of these not only in America, but around the world, using Gittinger’s personality profiles to identify those military and other leaders in nations the US wanted to control. The psychological testing, combined with all the other dirty tricks of the trade, and certainly including the nurses, housewives and models who could be persuaded to develop “uncontrollable urges” to “volunteer her body for her country”, greatly assisted the US government in placing into power those who could be counted on to obey their colonial master. South Korea and Japan are two good examples of this, as are many countries in Latin America. The CIA, with the immense assistance of Gottlieb and Gittinger, could always spot those “who were most likely to succumb”.
Dr. Louis Jolyon West
Louis Jolyon (Jolly) West, M.D. (1924-1999) was a well-known Los Angles psychiatrist who served as the chair of UCLA’s Department of Psychiatry and as director of the UCLA Neuropsychiatric Institute from 1969 to 1989. He was an expert on cults, coercive persuasion (“brainwashing”), alcoholism, drug abuse, violence, and terrorism, not in preventing these but in causing them. His “Violence Project” is famous. The Magician: John Mul... Robinson, Ben Best Price: $18.83 Buy New $18.52 (as of 03:53 UTC - Details)
From the reports, the CIA was so excited about the possibilities in these experiments at SRI that a great many millions of dollars were diverted to these projects, augmented by parapsychology experiments simultaneously undertaken at Fort Meade by the NSA. Medical oversight for this enormous range of experiments was under the control of yet another CIA pervert, Dr. Louis Jolyon West, then a professor of psychiatry at UCLA, one of the most notorious CIA mind-control specialists in the country. It is difficult to avoid the conclusion that these people were all crazy, since the CIA, NSA and even INSCOM and military intelligence (and of course the Church of Scientology) all cooperated with SRI in research that included Tarot cards, the channeling of spirits, communing with demons, and more.
But according to SRI itself, Dr. West’s work included not only radio waves and parapsychology, but the creation of dissociative personalities “that enabled the subjects of mind-control conditioning to adapt to trauma”. West referred to these people as “changelings” who produced alternate but actually schizophrenic insane mental states (multiple induced personalities) to permit them to deal with what was termed “prolonged environmental stress”, i.e. forced drug injections, physical, mental and sexual abuse, and psychic programming, all usually utilising large dosages of LSD, Gottlieb’s chemical of choice. There is adequate documentation that many individuals who were subjected to this CIA-sponsored “research”, developed multiple personalities, many of which were forcibly induced at a young age. There are documented stories by a few survivors who tell of enormous abuse of every kind being inflicted upon them from four or five years of age, and of having to deal with the terror of what appeared to be many different people living inside their minds. Dr. Jolyon West became a kind of research expert in these dissociative states and much of his work for the CIA’s MK-ULTRA program centered on their creation. The records reveal success in creating amnesia, false memories, altered personas, pseudo-identities, and much more, all horrifying and tragic to the individuals involved, all from West’s research in methods to “disrupt the normally integrative functions of personality”, and render people totally subject to remote control.
UCLA VIOLENCE Project
In Sid Gottlieb’s group there were also scientists who implanted electrodes into human and other brains in yet more mind-control experiments, even done on children as young as four or five years of age, all with the intention of creating a perfect ‘Manchurian Candidate’, as well as erasing memories and creating artificial ones and, of course, total control of the individual. This research into electrode implants was funded by the CIA and MKULTRA in conjunction with the Office of US Naval Research, and mostly supervised by our famous Dr. West. In fact, West began what was called the “UCLA Violence Project” at the Vacaville Prison where Donald Defreeze was apparently programmed. The projects received a great deal of funding, as I recall, much of it including West.
Dr. Harold Wolff
Many early interrogation studies were conducted by the Cornell University Medical School under the direction of a Dr. Harold Wolff who requested from the CIA any information regarding “threats, coercion, imprisonment, deprivation, humiliation, torture, ‘brainwashing’, ‘black psychiatry’, and hypnosis, or any combination of these, with or without chemical agents”. According to Wolff, the research team would then: “…assemble, collate, analyze and assimilate this information and will then undertake experimental investigations designed to develop new techniques of offensive/defensive intelligence use … Potentially useful secret drugs [and various brain damaging procedures] will be similarly tested in order to ascertain the fundamental effect upon human brain function and upon the subject’s mood …”. He further, and rather chillingly, wrote, “Where any of the studies involve potential harm of the subject, we expect the Agency to make available suitable subjects and a proper place for the performance of the necessary experiments.”
Among the many other prominent universities and institutions participating in this travesty was Tulane University where both the CIA and the US military had funded what appeared to be very large-scale programs of trauma-based mind control experiments on children. In 1955, the US Army reported on studies in which their researchers had implanted electrodes into the brains of mental patients to assess the effects of LSD and a host of other untested drugs. It was at Tulane that some of the earliest sensory-deprivation experiments were conducted, isolating individuals in these chambers where they would be helplessly hallucinating for as long as one week at a time while being injected with drugs and bombarded them with taped messages, to see if individuals could be “converted to new beliefs”. These were all helpless victims who had no idea of what was happening to them. There is a long list of other famous American universities and hospitals that participated in similar human destruction, all of which have carefully santised their histories.
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