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The difference between true education and vocational training has been cleverly blurred. Here are a few tips on how smart people can control other people. If any of this rings a bell - Well, then wake up!

The first principle of people control is not to let them know you are controlling them. If people knew, this knowledge will breed resentment and possibly rebellion, which would then require brute force and terror, and old fashioned, expensive and not 100 % certain method of control.

It is easier than you think to control people indirectly, to manipulate them into thinking what you want them to think and doing what you want them to do.

Educated people are not as easy to manipulate. Abolishing public education or restricting access to education would be the direct approach. That would spill the beans. The indirect approach is to control the education they receive.

It's possible to be a Ph.D., doctor, lawyer, businessman, journalist, or an accountant, just to name a few examples, and at the same time be an uneducated person. The difference between true education and vocational training has been cleverly blurred in our time so that we have people successfully practicing their vocations while at the same time being totally ignorant of the larger issues of the world in which they live.

The most obvious symptom is their absence of original thought. Ask them a question and they will end up reciting what someone else thinks or thought the answer was. What do they think Well, they never thought about it. Their education consisted of learning how to use the library and cite sources.

That greatly simplifies things for the controller because with lots of money, university endowments, foundations, grants, and ownership of media, it is relatively easy to control who they will think of as authorities to cite in lieu of doing their own thinking.

Another technique is to keep them entertained. Roman emperors did not stage circuses and gladiator contests because they didn't have television. We have television because we don't have circuses and gladiator events. Either way, the purpose is to keep the people's minds focused on entertainment, sports, and peripheral political issues. This way you won't have to worry that they will ever figure out the real issues that allow you to control them.

Just as a truly educated person is difficult to control, so too is an economically independent person. Therefore, you want to create conditions that will produce people who work for wages, since wage earners have little control over their economic destiny. You'll also want to control the monetary, credit, and banking systems. This will allow you to inflate the currency and make it next to impossible for wage earners to accumulate capital. You can also cause periodic deflation to collapse the family businesses, family farms, and entrepreneurs, including independent community banks.

To keep trade unions under control, you just promote a scheme that allows you to shift production jobs out of the country and bring back the products as imports (it is called free trade). This way you will end up with no unions or docile unions.

Another technique is to buy both political parties so that after a while people will feel that no matter whether they vote for Candidate A or Candidate B, they will get the same policies. This will create great apathy and a belief that the political process is useless for effecting real change.

Pretty soon you will have a population that feels completely helpless, and thinks the bad things happening to them are nobody in particular's fault, just a result of global forces or evolution or some other disembodied abstract concept. If necessary, you can offer scapegoats.

Then you can bleed them dry without having to worry overly much that one of them will sneak into your house one night and cut your throat. If you do it right, they won't even know whose throat they are cutting.

"The sophisticated exercise of control utilises the ability to keep people oppressed yet contented. Much better to make them think it was their idea to go to the gallows" Anon

The underlying theme of all you have read is the manipulation of the human mind. You cannot control billions of people with tanks in the streets and soldiers at the door. You can only do it by divide and rule - and by programming the mass consciousness (public opinion) into believing that what you want to do is a good idea or the only option.

This is crucial to both understanding how the manipulation works and to thinking on a more street-wise vibration which will make it far more difficult for us to be misled. For example, say that you want to introduce cameras in the streets, an armed and more authoritarian police force, and the erosion of personal freedoms. You don't want the public to oppose these policies, indeed you want them to demand that you introduce them. What do you need for this to happen? More high profile, violent crime, which creates enormous fear in the community. Achieve that and people will be knocking on your door demanding that you put cameras in their streets and give more guns and power to the police.

Problem-reaction-solution. And what better way to induce more crime than to create a society of 'haves' and 'have nots' dependent on welfare payments and then start dismantling the welfare state? You give people a choice of going without basic needs or of taking someone else's money and property. And when they do the latter, the victims of the crime and the mass of the people who see the reports of the crime demand that "something must be done".

All aspects of society are being used to promote this mental coup d'état. The 'education' system is not there to inform children and young people, it is there to indoctrinate them; the same with the media and advertising. The tax exempt foundations coordinate the Elites's 'education' policy in the United States schools and universities, and in the United Kingdom this is done, in part, by a secret clique known as the All Souls Group. This meets three times a year at (most appropriately) Rhodes House at Oxford University. Such education policies are designed to turn out clones of the system and world government supporters, although the overwhelming majority of people in the teaching profession will not realise this.

I included in The Robots' Rebellion an extract from a document found, apparently by accident, in 1986 called Silent Weapons For A Quiet War. Another version is reported to have been in the hands of U.S.Naval Intelligence in 1969. It is a wonderful explanation of the technique of mass brainwashing. The version I have was found inside an IBM photocopier bought at a second hand sale in America and it describes a policy of mass mind control. This lengthy and detailed document was dated 1979, but it outlines a policy that has been implemented since the 1950s. The document says that: "The quiet war was ... declared by the international elite at a meeting held in 1954". The Bilderberg Group first met in 1954. It is likely that the methods laid out in the document will be inspired by the Tavistock Institute of Human Relations in London and its interconnecting offshoots. Here is a flavour of the content:

"Experience has proven that the simplest method of securing a silent weapon and gaining control of the public is to keep them undisciplined and ignorant of basic systems principles on the one hand, while keeping them confused, disorganised, and distracted with matters of no real importance on the other hand.

1. disengaging their minds; sabotaging their mental activities; providing a low-quality programme of public education in mathematics; systems design and economics, and discouraging technical creativity.

2. engaging their emotions, increasing their self indulgence and their indulgence in emotionalphysical activities by:

a) unrelenting emotional affrontations and attacks (mental and emotional rape) by way of a constant barrage of sex, violence, and wars in the media - especially the TV and the newspapers.

b) giving them what they desire - in excess - "junk food for thought" - and depriving them of what they really need.

c) rewriting history and law and subjecting the public to the deviant creation, thus being able to shift their thinking from personal needs to highly fabricated outside priorities.

These preclude their interest in, and discovery of, the silent weapons of social automation technology. The general rule is that there is profit in confusion; the more confusion, the more profit. Therefore the best approach is to create problems and then offer solutions.

Keep the adult public attention diverted away from the real social issues, and captivated by matters of no real importance.

Keep the young public ignorant of real mathematics, real economics, real law, and real history.

Keep the public busy, busy, busy, with no time to think; back on the farm with the other animals."

That doesn't describe today's world, does it? All the main aspects of the coup d'état are there and we can see this strategy at work every day. When a government is planning to introduce legislation against a target group as part of the plan to enforce conformity and remove freedoms, the process of softening up public opinion against that target group through propaganda and engineered events. When the legislation is finally presented, the potential opposition is already either greatly reduced or destroyed altogether.

Take the example of the Criminal Justice Bill introduced by the British government in 1994. It was a dreadful piece of work and a tremendous strike against basic freedoms, but it sailed through Parliament with virtually all-party support. One of its many targets were the 'travellers', the groups of people who live in mobile homes of many kinds and move between various places throughout the year. They have been dubbed 'New Age' travellers by the media. The travellers are not perfect - who is? - but it will be enlightening to look at how they were treated. In the year to eighteen months before the Criminal Justice Bill was announced, you could hardly open a newspaper or watch the TV news without seeing a story which suggested that travellers were a 'problem' in need of a 'solution'. Police were stopping and harassing the traveller convoys as they moved from site to site; councils were refusing to allow them to cross their borders; conflicts were breaking out between travellers and police as the anger and frustration mounted. All was captured and broadcast on the main television news bulletins. Agents provocateurs connected to British Intelligence were in there stirring up just as the cameras were on the spot, in the way such agencies operate all over the world.

Once negative events and propaganda have been projected at public opinion, out go the opinion-polling organisations with their clipboards. The people who ask the questions on the street don't know what they are involved in. They are just asking the questions they are told and paid to ask. But opinion polls are not there to measure public opinion so the people can be given what they desire. They are there to direct public opinion, often using loaded questions to attract the desired reply. Tell people that 80% of the population believe something and those of the sheep - baa, baa - mentality will quickly conform and believe the same. Eighty per cent of people cannot be wrong, can they? Oh yes they can, if they have given their minds away.

The other role of opinion polls is to check if the propaganda against a target group is working. Once the opinion polls say that a sufficient majority now believe the target group is a problem and "something must be done", the legislation (the solution) is taken out of the file and put before Parliament. This approach has another advantage in that the potential political opposition, what little there is, fears the electoral consequences of opposing laws to 'solve' a 'problem' about which the public has now been programmed to believe that "something must be done". Therefore highly controversial legislation like the Criminal Justice Bill (which removes basic freedoms) goes through Parliament and into law virtually on the nod.

Once this Bill was making its way into law, suddenly all the "travellers are a problem" stories disappeared and at the time of this writing, have never reappeared. They will only return when even more harsh legislation against them is being planned. Until then, public opinion will go on being softened up to accept legislation against other target groups on the Elite's hit list and the public will go on reacting like robots in exactly the way required. Unless we choose to take control of our own minds.

Organisations like the Tavistock Institute of Human Relations (and their brothers and sisters in the United States such as the Stanford Research Institute, and the Rand Corporation) research into how people will react., individually and collectively, to events, changes, and 'buzz words'. It was Tavistock, according to research that I've read, which devised the policy of 'future shocks', the means by which the collective human mind is bombarded with so many changes, events, and contradicting information that it overloads, switches off, and becomes subservient. This is happening all over the world today, most obviously in the United States and Japan, where the population is being given one event after the other to fill them with fear and insecurity. The aim is to destabilise Japanese society and break its resistance to fundamental change.

Many of the so called 'spontaneous' trends that are taken on by the young are introduced by these and other organisations and then hyped into a frenzy by advertising and the controlled media. People talk about the "latest craze" and very few stop to ask, "Where did this start and who was behind it?" We hear about the "craze that's sweeping America" and that's all. The 'Flower Power' period of the 1960s was hijacked and directed by this same mind manipulating force. The CIA and British Intelligence were experimenting with the effects of the drug, LSD, in the 1950s before it was unleashed on the market and destroyed any possibility of substantial positive change emerging from that time. In 1953, the CIA commandeered the entire supply of LSD tablets from the Swiss manufacturers, Sandoz (which was owned by S.G. Warburg of London). Later they did the same with Eli Lilly when it began to produce LSD in the United States. People were so doped and duped that they thought LSD was a weapon of 'freedom'. Some still do. I'm not sure the CIA and British Intelligence had that in mind, somehow.

All that I am talking about here comes under the heading of 'diversion'. This is one of the most effective of the mind manipulation weapons used against the human psyche. It takes many forms. If you are being held captive, one way to escape is to start a diversion. It may be an argument or a fight among fellow prisoners. Once the trouble starts, everyone's attention, including that of the guards, focuses on the incident. This gives you the opportunity to slip away unseen. The bull-fighter's technique is another obvious form of diversion as he focuses the attention of the bull on his cape, so allowing himself to avoid injury.

In the world of propaganda and public mind manipulation, we are constantly being subjected to this. Accusations of anti-Semitism against New World Order investigators is a classic example of diversion. You concentrate attention on the issue of the messenger's alleged racism and divert attention from what he or she is saying about their research. We have the strategy of infiltrating 'moderate' wings of political parties while covertly following an extreme game plan. This is a diversion which stops extremists being identified while they, themselves, denounce their legitimate opposition as extremists. We hear from time to time of 'revelations' about intelligence agencies, gut how many are real revelations and how many are systematically leaked to divert people from what is really going on?

An example: publish a book by a 'spy' who names certain people as foreign agents. Hype it up through your controlled media and get the government to vehemently oppose it, so adding to its credibility. Persuade people to accept that the names revealed by the 'whistle-blower' are correct and those who were really involved are in the clear. If you want to introduce controversial legislation or a government is being forced to reveal unpleasant information about itself, then under the rules of diversion, this should be done on a day you know another major story is going to break. This lessens the space and prominence given to what you say because of the massive media coverage of the other big story.

On the day the British Home Secretary, Michael Howard, announced the introduction of identity cards, the Loyalist Paramilitary groups in Northern Ireland announced a ceasefire in line with the one agreed by the Republican IRA. This reduced by a tremendous amount, the coverage and reaction in the media to Michael Howard's identity cards. I do not believe this was a coincidence, especially since the paramilitaries and the British government are in regular contact through the secret society network and other channels, no matter what they may say publicly. Indeed, the secret communication between the IRA and their 'enemy', the British government, has been publicly exposed.

The attempts to blame two Libyans for the bomb on Pan Am Flight 103 which killed 270 people at Lockerbie, Scotland, in December 1988 is another case of diversion. None of the evidence points to Libya. That is a convenient scapegoat to move attention from what really happened and to undermine the Gaddafi regime. The evidence of independent studies and documentaries clearly points to other Middle East connections, the CIA, and other intelligence agencies. The Lockerbie crash site was swarming American agents, as locals and journalists have pointed out. Police surgeon, David Fieldhouse, said he issued death certificates after examining 59 bodies, but later found that police records contained details of only 58 bodies. What happened to the missing body, no-one seems to know. Could it just have been the body that would have shed some light on what happened and who did it? And if the authorities didn't know what was going to occur, why were 'VIPs' warned not to take that flight after their seats had been booked? Among them were Pik Botha, the South African minister, and others accompanying him, including the head of BOSS, the South African intelligence agency (which has close ties with the CIA and Mossad). They cancelled their reservations on Flight 103 shortly before departure after a tip-off from intelligence sources. Pik Botha told the British businessman, Tiny Rowlands, that these sources were the kind that "couldn't be dismissed".

Libya has been used as a diversion for years. Colonel Gadaffi was portrayed as a monster of monsters, until it became more useful to give that title to George Bush's old friend, Saddam Hussein. The bombing of Tripoli by U.S. planes flying from British bases in 1986 was part of this. Dozens of Libyan civilians, including children, were murdered by the Americans (with British support) in retaliation for "Libyan terrorism" at a disco in West Berlin, for which, again, there was no evidence as later conceded by German investigators. The man who wrote the paper for Ronald Reagan which proposed a campaign to destroy the Gaddafi regime with lies and disinformation was (by his own admission) the CIA operative, Vincent Cannistraro. He worked for three years on the campaign with Oliver North and this led to the bombing of Tripoli. Who was the man appointed to head the CIA 'investigation' into Lockerbie which decided that two Libyans were responsible? It couldn't be,? Yes it could: Vincent Cannistraro. Part of the CIA campaign against Libya included the murder by the CIA of the British policewoman, Yvonne Fletcher, in St. James Square, London on April 17th 1984.

This murder was blamed on the staff at the Libyan People's Bureau. In fact she was shot by a CIA marksman for 8 St. James Square, close to the Bureau, say some researchers. This building had been occupied from only a few months before by a company with known CIA connections.

Despite this information and the fact that no evidence points to an involvement by Libya in the Lockerbie bombing, the United Nations (Global Elite) continue to impose sanctions on that country! And the British prime minister has refused to allow a trial of the two Libyans to take place in a neutral country. Either the British government at the highest levels is breathtakingly dumb or they know more about Lockerbie than they are prepared to reveal to the people who elected them. The United States and the Elite use the create-a-monster technique all the time to divert attention from the fact that they are installing and pulling the strings of far more extreme regimes throughout the world.

There was no talk of monsters and terrorism in 1988 when the USS Vincennes fired a missile 'by accident' to shoot down an Iranian passenger jet with 290 on board. The Vincennes was in the Persian Gulf to support Saddam Hussein, then America's friend and ally in the Iraqi war with Iran. The commander of the ship was 'severely punished': he was awarded the Legion of Merit Award by George Bush for "exceptionally meritorious conduct in the performance of outstanding service" and for the "calm and professional atmosphere" under his command during the period the jet was destroyed.

The stepping-stones strategy is another diversion. The Elite know the goal they are aiming for and the stepping-stones required to manipulate public opinion towards that end. But if they are going to persuade people to accept those stepping stones, each one must be presented in isolation. If once they are seen by the general public as links in a chain leading towards a global centralised tyranny, obviously the game is up.

If you want barcoded human beings linked to a central computer, you must first get them to accept credit and identity cards. You can be even more subtle by announcing first of all that the identity cards will not be compulsory, as Michael Howard did at the Conservative Party Conference in 1994. Shouts of dismay from the audience who want them to be compulsory make you look positively moderate in comparison, and initial opposition from the civil liberties groups is diluted because the government says, "But they are not compulsory and then go on to barcoding, but the stepping-stones diversionary approach demands that this be done in distinct stages, so that people in general don't realise what is going on. These tactics are used at all levels of society.

If you want to develop an area of unspoilt, isolated land, and you announce plans to build a housing estate or industrial complex, it would attract enormous opposition. Instead, the first stage is to propose a road to allow people greater 'access' to the area. Once this has been achieved a few buildings begin to appear, then more and more, until you have built, in stages, what you intended all along. This is one reason why the information in this book and others like it is so important. Once you know the ultimate aims, the stepping-stones towards them become so easy to see.

None of this mind manipulation could happen without the media. Again, only a few people in the media know they are playing a key role in programming the human mind to walk the road to a global tyranny. The overwhelming majority of journalists have no idea how they are being used. I would go further. From my experience inside the media for many years and more recently on the other side of the microphone and notebook, I believe the two least knowledgeable and streetwise professions - in general - are journalism and politics. As I suggested earlier, they are two aspects of the same illusion.

The politicians act as if they rule the world and the media report events as if politicians are the global decision makers. Thus, the real controllers can stay in the shadows, unreported and unidentified. There are exceptions when you meet a very bright journalist who can see behind the façades. They know they are imprisoned within a media structure which severely limits what they can say and do. But they take every opportunity to get across as much information as they can. I have met a few of those people and they're a joy to talk to. If only that were true of the rest. Most journalists on local and regional papers and local radio are either time-servers, who are programmed to turn out the same old establishment line without question while thinking their years in the profession make them streetwise, or they are youngsters fresh out of university who have no experience of the world and the manipulation that goes on. There are, I stress, exceptions, but I am speaking generally here. I don't say this out of condemnation, but as this mindset stands between the events in the world and the way the information about them is communicated to the public, it is important that we know the nature of the filters and the filtering that goes on.

I remember talking in Southern England one night in the terms I have outlined in this book. There was one person in the audience who seemed to have a permanent question mark above her head. This turned out to be the local journalist. When I saw her report, it was headlined "Icke's old theory about the New World Order". I was intrigued. "Old theory?" Had this newspaper talked about the global conspiracy before, then? No, as it happens. The headline referred to the reporter's contention that what I said that night about the nature of the New World Order was not new because George Bush had used the same words before! If that was an isolated example of the thought processes which provides our news, it wouldn't be a problem. But it isn't. I could fill another book with stories of my experiences with people bravely claiming to be journalists who have asked questions and written articles that would make a two-year-old look like the peak of maturity.

At the national and international level, the number of journalists knowingly manipulating the human mind is far greater than the local and regional media, but it is still a relative few. The rest just conform to the traditional structure and approach and allow themselves to be manipulated to manipulate their audience. I worked in BBC Television national newsroom for years and everyone around me appeared to be extremely genuine. Most of them were very nice people who loved their children and would not wish them to face a centralised global dictatorship. But every day they turn out stories which feed millions of viewers the line the Elite want them to see and hear.

To manipulate the world, you don't need to have people running around all the time, like one of those stage performers trying to keep a dozen plates spinning on the end of a stick. Once you have created the structure, anyone coming into that organisation, say a newspaper or television newsroom, has to conform to what is already there. If you can get your representatives into the positions which appoint others into that organisation, it is even better, because you can then fill the place with clones of your own attitudes.

Also, journalists are there to report events. If you can engineer significant events, the journalists will report them. You don't have to control every journalist to do this; the event will be reported anyway. Most of the time, the background information and explanation of that event will come from official sources. Watch a television news bulletin today if you can, and see where the words the reporter is speaking are overwhelmingly coming from: official sources. So without even manipulation a single journalist, your engineered event, be it a "terrorist bomb" or "economic problem", is both reported and explained in the way you want.

The coverage of the horrific bombing in Oklahoma City in April 1995 was yet another example of puppet-strings journalism. Whatever official statements were issued, the media jumped on them immediately and accepted them as fact, without question. I listened to the BBC's Radio Five at that time and they introduced a lady from an organisation I had never heard of in America. There was not one question about what her organisation represented, who funded it, or what its background was. The interviewer just fed her questions and allowed her, unchallenged, to give her 'expert' opinion on the people she believed had carried out the attack. And they call themselves 'journalists'. It's unbelievable.

When you are looking at the news, make a note of how short the individual items are. There is usually only enough time, even in major stories, to say this is what has happened and this is the (official) explanation. I was laughed at by millions when I questioned that the figure I was seeing on the television news was the real Saddam Hussein back in 1991. There was this man on the screen and the reporter or newsreader was saying it was Saddam. We were told whom he had met that day, and, on one occasion, how he had swum across a river to show his people he was alive and well after the Gulf War. Now we know from a defector from Iraq that it was not the real Saddam, but his stand-in lookalike. The media is being conned day by day and it then cons its audience. Ask 99% of journalists about the Bilderberg Group, the Council on Foreign Relations, the Trilateral Commission, and the Elite in general, and they will look at you in bewilderment. They won't even have heard of them, let alone know what their role is.

But there are some journalists in strategic positions who do know and support what those organisations are doing. The media is such a vehicle for the coup d'état that if it ever got into the hands of the Elite, the potential would be limitless. But we don't have to worry because, as we are told so often, we have an independent media. Ummm. Independent of what and whom? In the August/September 1993 edition of the Netherland's based magazine, Exposure, details were published of the controlling boards of the three television networks in the United States, NBC, CBS, and ABC. These networks are supposed to be in 'competition' and it is this very 'competition' that is part of the 'independence' which ensures we enjoy unbiased news. That's the theory, anyway.

The Exposure research came from the work of the American New World Order investigator, Eustace Mullins. From what I read, Eustace and I would have very little in common on most things, but either the people he names were controlling the networks at the time of the article, or they were not. The following is provable fact: the NBC is a subsidiary of RCA, a media conglomerate which appears regularly on the career details of a number of people named throughout this book. Among the NBC directors named in the Mullins article were: John Brademas, a director of the Rockefeller Foundation; Peter G. Peterson, former head of Kuhn, Loeb, and Co. (Rothschild), and a former Secretary of Commerce; Robert Cizik, chairman of RCA and of First City Bancorp, which was identified in Congressional testimony as a Rothschild bank; Thomas O. Paine, president of Northrup Co. (the big defence contractor) and director of the (Elite-controlled) Institute of Strategic Studies in London; Donald Smiley, a director of two Morgan Companies, Metropolitan Life and U.S. Steel; Thornton Bradshaw, chairman of RCA, director of Rockefeller Brothers Fund, Atlantic Richfield Oil, and the Aspen Institute of Humanistic Studies (both of the latter headed by 'environmentalists' and elite Bilderberger, Robert O. Anderson). Clearly the NBC board has considerable Rockefeller-Rothschild-Morgan influence.

Another American TV network, ABC, had on its board of directors: Ray Adam, director of J.P. Morgan, Metropolitan Life (Morgan), and Morgan Guaranty Trust; Frank Cary, chairman of IBM, and director of M.P. Morgan and Morgan Guaranty Trust; Donald C. Cook, general partner of Lazard Freres banking house; John T. Connor of the Kuhn, Loeb (Rothschild) law firm, Gravath, Swaine and Moore, former Assistant Secretary of the Navy, U.S. Secretary of Commerce, director of the Chase Manhattan Bank (Rockefeller/Rothschild), General Motors, and chairman of the J. Henry Schroder Bank and Schroders Inc, of London (see the funding of Hitler); Thomas M. Macioce, director of Manufacturers Hanover Trust (Rothschild); George Jenkins, chairman of Metropolitan Life (Morgan) and Citibank (which has many Rothschild connections); Martin J. Schwab, director of Manufacturers Hanover (Rothschild); Alan Greenspan, chairman of the Federal Reserve, director of J.P. Morgan, Morgan Guaranty Trust, Hoover Institution, Time magazine, and General Foods; Ulric Haynes Jr, director of the Ford Foundation and Marine Midland Bank (owned by the Hong Kong and Shanghai Bank).

Again, we see the same Rockefeller-Rothschild-Morgan lineup on the board of the ABC network which, we are told, is independent of NBC. The ABC company was taken over by Cities Communications, whose most prominent director is Robert Roosa, senior partner of Brown Brothers Harriman, which has close ties with the Bank of England. Roosa and David Rockefeller are credited with selecting Paul Volcker to chair the Federal Reserve Board.

Which brings us to CBS, the third of the 'independent' networks. Its financial expansion was supervised for a long time by Brown Brothers Harriman and its senior partner, Prescott Bush who was a CBS director. CBS banks through the Morgan Guaranty Trust and reports of CBS connections with the CIA and British Intelligence are legion among New World Order researchers.

Some know it as the Conspiracy Brainwashing System. On the CBS board are: William S. Paley, the chairman (for whom Prescott Bush personally organised the money to buy the company); Harold Brown, executive director of the Trilateral Commission, and former Secretary of the Air Force and Defence; Roswell Gilpatric, from the Kuhn, Loeb (Rothschild) law firm, Cravath, Swaine, and Moore, and former director of the Federal Reserve Bank of New York; Henry B. Schnacht, director of the Chase Manhattan Bank (Rockefeller/Rothschild), the Council on Foreign Relations, Brookings Institution, and Committee for Economic Development; Michel C. Bergerac, chairman of Revlon, and director of Manufacturers Hanover Bank (Rothschild); James D, Wolfensohn, former head of J. Henry Shcroder Bank, who has close links with the Rothschilds and the Rockefellers, (in 1995, Bill Clinton successfully nominated him to head the World Bank); Franklin A. Thomas, head of the Ford Foundation; Newton D. Minow, director of the Rand Corporation and, among many others. the Ditchley Foundation, which is closely linked with the Tavistock Institute in London and the Bilderberg Group. People connected with research into how the public mind reacts to events and information are on the board of a United States television network? What?

Again with CBS, we are looking at the same names at the helm, and all three networks are closely interlocked with the Council on Foreign Relations and the Trilateral Commission. How can it possibly be claimed that the three television networks in America, through which the overwhelming majority of Americans get their news, are independent? They are controlled or strongly influenced by the same people!

Look at the potential for recruiting only those producers, journalists, and editors who support your views and aims, and for sacking those who challenge your interference in what is and isn't shown. Look at the potential for selling a common line on events and news stories to ensure the American people have no other explanations than those you want them to believe. In July 1995, ABC was merged with the Walt Disney empire and the giant Westinghouse Electric made its move to buy CBS. The concentration of power gathers pace.

The same familiar elites control the three television networks and America's main newspapers, like the New York Times, the Washington Post, and the Los Angeles Times. This is without even mentioning all the other media outlets and international news agencies (like Reuters) which the Elite control and the agencies run by the major newspapers which feed a common line to the smaller papers via the wire machines and syndicated columnists.

The mind manipulation possibilities this offers are just incredible. Scores of leading U.S. journalists and editors are members of the Council on Foreign Relations and the Trilateral Commission and they are covertly working to that party line in their selection, dissection and presentation of news and information. Typical was a 'report' by the famous CBS News anchorman, Walter Cronkite, into the wealth and power of the Rockefellers. He closed by saying that if any family had to have as much power and money as the Rockefellers, it was a good thing it was the Rockefellers. Violin, anyone? I am grateful for the research into UK media ownership in the early 1990s by Colonel Barry Turner, which he published in 1992 as a paper entitled "Control of the Communications Media and Conditioning of the Public Mind". Much of the following information about names and newspapers is thanks to his painstaking work.

The leading 'quality' newspaper in the UK is The Daily Telegraph. This is owned through the Hollinger Group by the Canadian, Conrad Black. The group owns more than 200 newspapers and magazines in the United Kingdom, the United States, Canada, and Israel. Conrad Black is a member of the elite Steering Committee of the Bilderberg Group, a Trilateralist, and a member of the Institute for Strategic Studies. The senior international advisors to the Hollinger Group are Henry Kissinger (CFR. TC. Bil. RIIA) and Lord Carrington (TC, RIIA, Bil). Some members of the Hollinger International Supervisory Board are Zbigniew Brzezinski (CFR, TC, Bil); Giovanni Agnelli (Bil, Black Nobility); David Brinkley, news commentator with ABC News; Paul Volcker (CFR, TC, Bil), the chairman of the Federal Reserve Board responsible for Reaganomics and Thatcherism; Lord Rothschild, chairman of Rothschild Holdings; and Lord Hanson, chairman of Hanson plc. On the board of The Daily Telegraph is Evelyn de Rothschild, chairman of the N.M. Rothschild merchant bank. N.M. Rothschild are merchant bankers to the Hollinger Group to complete the cosy relationship.

A former editor-in-chief and board member at The Daily Telegraph is Andrew Knight, another member of the Bilderberg Group Steering Committee and the Ditchley Foundation, and formerly of The Economist magazine (director, Evelyn de Rothschild), a publication set up to press for an end to the Corn laws and promote the principle of 'free trade'. Knight moved on to become executive chairman of Rupert Murdoch's News International which owns The Sun, Today, The News of the World, and The Time and Sunday Times. Murdoch owns newspapers, magazines, and television networks that are estimated to have a potential audience of three billion people. That is without his interests in the film industry. He is now linking in with a global telephone and communications network, MCI, and has made a bid for parts of the vast Berlusconi media empire in Italy. According to The European newspaper, he is also planning to substantially increase his media interests across Europe. In a feature in The Spotlight newspaper headed: "What is Murdoch UP To And Who Is Backing Him?" the writer Dan McMahan linked the rise of this media mogul to names like Harry Oppenheimer (South Africa, Anglo-American, De Beers), Armand Hammer (Occidental Petroleum), the Bronfman family, and the Rothschilds.

It is not the front men we need to look at so much as who is behind them pulling their strings. It is they who make the money available and manipulate the politicians to allow great media takeovers and cartels to emerge. With unbelievable hypocrisy, Conrad Black's Daily Telegraph said of Murdoch's domain: "This is a huge and potentially dangerous concentration of media power..." And the Telegraph owner's empire is not?

The controlled media can feed the same basic messages to the public and hypnotise the collective mind to accept them. And if the same messages are coming from apparently unconnected media outlets, it must be true because "they are all saying it". Just as we have a One Party political state, so we have a One Media State. In the UK. you would think that Murdoch Sun and the Independent or Guardian were miles apart and offering different opinions. But if you analyse what they are all agreed on and the way they operate, none are vehicles for a radical alternative to what we have. They actually say the same. They just say it differently.

The least radical newspaper in Britain is the one claimed to be most radical: The Guardian, the tome of the mindset I call the Robot Radicals. The founding editor of The Guardian's 'rival', The Independent, was Andreas Whittam Smith. He was a member of the Trilateral Commission during his eight years at the top of that newspaper. The political 'choice' is an illusion and so is the media 'choice'. Indeed the two are indivisible.

When I started to have more and more success in making this suppressed information available to the public, the campaign to discredit me was stepped up. I was delighted in a way, because it proved I am twitching a few nerve ends among those who wish to control the human kind. The Jewish Chronicle, which parrots words like freedom and truth, began to write outrageous misrepresentations of what I am saying and doing. I was having conversations with the press officer of the Board of Deputies of British Jews - a lovely woman - who was speaking to one David Icke, whille she was reading about a very different David Icke in the Jewish Chronicle. Understandably she was confused. I wasn't because what was happening was so predictable. The sight of a paper like the Chronicle, posturing its morality while lying through its teeth is not a pretty one.

However, it was the Guardian, the daily house magazine of the Robot Radical mindset, that I found most interesting. One of its 'reporters', a Paul Brown, arrived at a meeting in Glastonbury and built an article around one man who had not read my books, yet was handing out leaflets opposing them! The anti-Icke piece came from a newspaper which claims to represent freedom. Excuse me while I fall down, laughing hysterically. In the article were the (barely) one-dimensional clichés about 'disciples' and other childish nonsense, but nowhere was there a mention of the Bilderberg Group and its RIIA, CFR, TC network which I had spent much of the evening talking about.

"All our newspapers will be of all possible complexions - aristocratic, republican, revolutionary, even anarchical - for so long, of course, as the constitution exists...Like the Indian idol, Vishnu, they will have a hundred hands, and every one of them will have a finger on any one of the public opinions required. When a pulse quickens these hands will lead opinion in the direction of our aims, for an excited patient loses all power of judgement and easily yields to suggestion. Those fools who will think they are repeating our opinion or any opinion that seems desirable for us. In the vain belief that they are following the organ of their party, they will in fact follow the flag which we hang out for them." Protocol 12

And most journalists, probably including Mr Brown, will not have a clue about how they are being used. Someone wrote to me who had read The Robots' Rebellion and was a daily reader of The Guardian because he thought it had the integrity that others lacked. He was stunned to read Brown's article, which he said was a gross misrepresentation of what I am saying and doing. "I thought I could trust The Guardian" he said. You can't. You can't trust any of them. From where do the public get their information about political parties at election time? The controlled media. If the media will not support you, or are vehemently against you, it is virtually impossible to be elected. If you are a politician looking to win or stay in power, you have to listen to what the media is demanding. If you don't, they will turn against you and even reveal some unpleasant information which they have long known about, but have kept under wraps while you were playing their game. When Rupert Murdoch began to make positive statements about the British Labour leader Tony Blair (Bil) following the 'untimely' and sudden death of his predecessor, John Smith, this was considered highly significant for Blair's chances of becoming prime minister. The sad thing is that it was.

The media have to keep the banks and advertisers happy. That's where the power really lies. The Global Elite pyramid coordinates major advertisers into pressurising papers into following or not following, a particular weapon. But, of course, we have the media 'watchdogs' which are there to protect us from media abuse. The chairman of the newspaper 'watchdog', the Press Complaints Commission, is Lord Wakeham, the former cabinet minister, who controversially went from government to the board of N.M. Rothschild. And while Lord Rees Mogg (Bil), the former editor of The Times, was chairman of the television and radio 'watchdog', the Broadcasting Complaints Commission, he was also a Rothschilds' director, Sir Zelman Cowan, another former chairman of the old complaints body, the Press Council, was involved in 1991 with the takeover of the Australian Fairfax Group by Conrad Black's Hollinger Group. Lord Armstrong, the former head of the Civil Service and cabinet secretary (who went on to become a director of N.M. Rothschild) also joined the board of Carlton Television, which broadcasts to London and the 'Independent' television network in the UK.

I could go on and on across the UK media, revealing the interconnections between certain names and companies. Rest assured, however, there is really nothing to worry about. AS the then Home Secretary, Douglas Hurd, said in The Financial Times on January 19th 1989: "Broadcasting will not be run by tycoons." Phew, that's a relief! I rather prefer the opinion on the true state of affairs within the media of John Swinton, a journalist on the New YorkTimes, who is reported to have told his staff at his retirement dinner:

"There is no such thing as a free press. You know it and I know it. There is not one of you who would dare to write his honest opinions. The business of the journalist is to destroy truth, to lie outright, to pervert, to vilify, to fawn at the feet of Mammon, and to sell himself, his country, and his race, for his daily bread. We are tools and vassals of rich men behind the scenes. We are jumping jacks; they pull the strings, we dance; our talents, our possibilities, and our lives are the property of these men. We are intellectual prostitutes."

But here again, we come back to the same theme. The media is our creation. It reflects the collective mind of humanity and if it did not, it could not survive and prosper as it does. We can debate which came first, the collective mind's attitudes or the programming of those attitudes, but if you read the average tabloid newspaper and then spend an hour in the average bar, you will see that the thought patterns of the paper and the people are largely the same. Vast numbers of people think and act like a tabloid newspaper. They have allowed themselves to become tabloid thinkers with tabloid minds. We now have tabloid radio and tabloid television, too, which follows from the success of the tabloid newspapers. They all want it short, incredibly superficial, and with each item full of either mockery, condemnation, instant judgements, the official line, and/or defence of the status quo. Oh yes, and if you can get lots of tits and bums in there at every opportunity, so much the better, because women are only her to lust after.

Have I just described the content of a tabloid newspaper or the content of a conversation you will hear in almost any bar when 'the lads' get together? Both. And that's the point. Those thought patterns in the collective mind created the reality we call the media. Tabloid newspapers reflect, and programme, the thoughts of great tracts of humanity in an ever-downward spiral. The more our thoughts are programmed, the more open we become to even more severe programming. The media wont change until the collective mind changes and that will result only from changes in individual thinking. We create our own reality and the media is no different.

Whatever dominates the thought patterns of the collective mind will be the physical reality. The human race in general want someone else to do their thinking for them, and they have allowed their minds to close to the point where they do not want to discuss anything that isn't superficial or full of mockery and instant judgements of others. Hence the media we have today. We have thought that into existence, too. When we change, it will change.

The media's greatest effect on the human mind is not so much its detail, but the mass hypnosis created by the same basic themes occurring over and over. Most people don't pick up detail from newspapers, let alone the broadcast media where you get one chance to hear something and there is no way you can go back and hear it again, let alone extract more detail from it.

These themes include the criteria for how we should judge ourselves and each other; for what is credible or incredible, sane or insane. This background bombardment of our subconscious with a common 'party line' of information plays a major part in the way the conscious and subconscious sees itself and the world. As a result, we are allowing the sum total of the media to programme our thought patterns and create our reality.

I learned so much about this process when I was the focus of unbelievable national ridicule in the early 1990s. Most of what the media said about me was 100% the opposite of what I was saying and writing, but the people overwhelmingly believed what the media told them and I was ridiculed by millions for things I wasn't saying and didn't believe. This is happening to other people every day. The mass hypnosis has also turned millions into spectators of the world, rather than participants. We allow others to do, while we observe and sit in the stand, watching the few play the game which decides the future of the human race...our human race. This is symbolised by sport, and the endless television soaps in which we are spectators of the manufactured lives of overwhelming cardboard, one-dimensional characters. We often live their lives instead of our own. I love sport and there are soaps that I enjoy, too, but the danger comes when that is all we have in our lives.

"In order that the masses themselves may not guess what they are about we further distract them with amusements, games, pastimes, passions, people's palaces...Soon we shall begin through the press to propose competitions in art, in sport of all kinds: these interests will finally distract their minds from questions in which we should find ourselves compelled to oppose them. Growing more and more unaccustomed to reflect and form any opinions of their own, people will begin to talk in the same tone as we, because we alone shall be offering them new directions of thought...of course through such persons as will not be suspected of solidarity with us." Protocol 13

We think of hypnotism only in terms of a single person lying down on a couch and listening to the words of a hypnotist speaking softly into the ear. Or we may think of the stage hypnotist who has a group of people doing silly things in front of a guffawing audience. Some even demand that this should be banned because it is dangerous. These are obvious forms of hypnosis. But we don't realise that we are subtly being hypnotised and encouraged to do and think silly things every day of our lives. Instead of lying on the couch listening to the soft words of the hypnotist, we sit in the chair listening to newsreaders, film stars, advertising voice overs, and sundry presenters. The messages pound our conscious and subconscious mind and we are programmed to think the way the controllers who own the media, the banks, the drub companies, the armament companies, the oil companies, ad infinitum, want us to think. Is there anyone left reading this book who still believes that the idea of a global conspiracy with the tiny few controlling the vast majority is a fantasy, and impossible? Surely not.

The esoteric knowledge about the nature of the human psyche is used to great effect. While those in the spiritual movement are laughed at for their explanations of the human mind-spirit, this same knowledge is being used by the manipulators to covertly hypnotise us and program our subconscious. Doctor Wilson Bryan Key, a professor of journalism, made a study of these techniques and wrote three books, Media Sexploitation, The Clam Plate Orgy, and Subliminal Seduction. He discovered that millions of dollar are being spent by advertisers for the subliminal [programming of the subconscious] manipulation and indoctrination of audiences. Dr Key revealed the existence of the Tachistoscope, a film projector with a high speed shutter which flashes messages every five seconds for 1/3000th of a second. These messages could not be seen by the naked eye, but were absorbed by the subconscious. The message would then filter down from the subconscious to the conscious level as a thought, desire, or opinion, which the person believes is their own. Years ago, a flash-frame picture of a Coca-Cola bottle used to be inserted into a cinema film just before the interval. The audience couldn't see it, but their subconscious could. Sales of Coca-Cola during cinema intervals went up significantly.

Through the 1950s and 60s the experimentation into this subliminal interaction with the subconscious expanded rapidly. In 1962 and 1966, Doctor Hal C. Becker patented subliminal devices which increased the potential of such technology. He operated a successful weight reduction clinic in New Orleans using subliminal messages directed at the subconscious and his anti-theft programme was operated in department stores in Canada and the United States. Messages which were inaudible to the ear were broadcast across the stores, saying "don't steal". Thefts from the stores were reduced. In 1986, a more advance security system emerged which broadcast its messages under piped music. A computer ensured that the sound of the message went up and down with the loudness of the music. These subliminal messages have been shown to work. So what else are they being used for?

Some years ago there was a furore in France when the picture of François Mitterand was seen to flash into view on the opening titles to the news. This was when Mitterand was running for president. It was a mistake by the TV company, for sure. But what kind of mistake? An error in putting the flash picture in the titles at all, or a mistake in leaving it in for too long, so that the conscious and as well as the subconscious saw it? The potential for subliminal messages to affect the outcome of elections and to direct the thinking of the mass population is simply fantastic.

If they can make more people buy bottles of Coca-Cola with these techniques, why can't they make more people vote for the party and the candidate they want? They can. Of course they can. And given what you have read up to now, do you think they would use that potential to manipulate the public minds or would they refuse to do that because it was undemocratic? Once the technology and the knowledge is available, there is nothing that can't be communicated to the subconscious through this technique of mass hypnosis.

Once more, we come back to the esoteric knowledge. The manipulators know how the psyche works and how it is possible to programme responses without the conscious level of awareness knowing it is happening. The technology now exists which can be set up near a television or radio transmitter and will send out messages which lock in to the wavelength of the television broadcast as a 'carrier wave', a carrier of the subliminal message. These subliminal messages are coming out of the television set without even the television station knowing it is happening. The messages can tell people how to vote, who they should love and who they should hate, what they should buy, and what they should think. Say you want to start a riot. Send out subliminal messages to the area for a while, and then produce one or two agents provocateurs and an event to focus anger. In no time you will have the people, already primed subliminally, going absolutely crazy. Then you say you need more power for the police and the military to 'solve' this 'problem'.

The television has become the greatest tool of mind manipulation and it starts with children only a few years old. Some researchers believe children are especially susceptible to this form of programming. Most people watch the television as if mesmerised by the screen. Conversation is destroyed. Instead of talking to people, we are talked at by the television set. Our lives are conditioned by the themes and indoctrination pouring from the screen. We are told what is right and wrong, good and bad, success and failure, in and out. It is our resident hypnotist in the corner of the room.

Many people fall asleep in front of the television because their minds are bombarded to the point of overload by the incessant flow of opinions and information. What does a hypnotist do before he or she begins to make those subconscious suggestions? They put their clients into a state of relaxation, a dozy half-sleep, because that is when the conscious mind is quiet and the subconscious can be most effectively accessed. What better way, therefore, to programme television viewers with subliminal messages than to have them half asleep in the chair. In fact, people could even be put into that state by the subliminal messages coming from the set.

And what is the real effect of the computer games and virtual reality technology that turns some children into zombies? Virtual reality is a good name because the whole system is designed to encourage the human race to accept a virtual reality and call it life. Dr Wilson Bryan Key, the investigator of these matters, said that subliminal technology can so affect many people that they can be programmed to start eating and drinking too much, change their sexual habits, and embark on an almost endless list of other manifestations of extreme behaviour. The subconscious is programmed with thought patterns and it creates that physical reality. These techniques are becoming more sophisticated and developed all the time. Susan Bryce highlighted one development in her article in Exposure magazine in the June/July 1993 issue:

"Data on the relationship between heartbeats and suggestibility reveals that music or voice timed to the rhythm of the human heart of 72 pulses per minute, can affect human behaviour...Experimental commercials prepared using 72 beats per minute as pacing for drumbeats, music and voice have been tested in a special theatre with a random audience of housewives and husbands. The advertisement was for a new analgesic [headache potion]. Results showed that had the analgesic commercial been broadcast to the roughly 30 million people watching NBC Evening News, five million would have developed headaches within three hours of viewing it."

The technology has been developed to send out messages as microwaves and extremely low frequency waves (ELFs) which can speak to the mass subconscious and cause physical illness. It is important to appreciate that the knowledge held secretly about the human mind and body is far more advanced than anything we are allowed to see in the public arena. Again, it is part of the "need to know" policy. If someone has knowledge and technology which most people do not realise exists, the potential for manipulation is enormous. The esoteric knowledge passed through the secret society network across the years has been a major factor in the creation of this two-speed science. The public is told about a limited and intentionally flawed science which goes back to Darwin and others, while the fare more advanced version remains hidden.

The mind-spirit, the eternal part of us, is a series of interconnecting and interacting magnetic energy fields. These react with other magnetic energy fields and this is why people who live under electricity power lines are more prone to certain illnesses. The electromagnetic field thrown out by the power lines imbalances the magnetic mind-spirit of the people living nearby. This imbalance is passed through the multiple levels of our being to the physical body where it manifests as cancer or some other disease. It can also directly affect cellular functioning to create physical illness. Therefore, if the manipulators can broadcast waves at certain frequencies, they can imbalance our cellular and non-physical magnetic levels and cause physical, mental, and emotional illness.

Former FBI agent, Ted Gunderson, has said that magnetic radioactive discs have long been used covertly as cancer-inducing "silent killers" to remove unwanted politicians and others. These can cause cancers which grow at astonishing speeds. Experiments on the effects of ILF waves and chemical warfare substances are routinely carried out on unsuspecting populations around the world. We hear about these things on the news with reports of a "strange and unexplained plague/disease" which has broken out over a small area of a country. I am told that an area of New Mexico is plagued by a "hum" that no-one can explain, which causes headaches and illness in susceptible individuals.

Some people find it hard to believe that messages can be broadcast to the subconscious. But what is television and radio? They are words and pictures which are broadcast in wave form and decoded back into words and pictures by technology. When you think of the advanced knowledge that is secretly known about the nature of the human brain/psyche, is it too much of a mental leap to see that it is possible to broadcast messages on wavelengths designed to communicate with the subconscious? In fact, as I explain at length in The Robots' Rebellion, the existence of such technology is provable.

Experiments have shown that if people are subjected to these waves for little more than a minute, they begin to react as the messages tell them to. In their minds, these messages appear to be their own thoughts, when in reality they are tuning into wavelengths broadcast from outside of their psyche. In such a situation, these people are fully-paid-up robots.

Two such techniques are called Radio Hypnotic Intracerebral Control and Electronic Dissolution of Memory. Researchers say that these can remotely induce an hypnotic trance, deliver suggestions, and erase all memory of both the instructions and whatever it is the person has done in response to those instructions. What a tool if you want to assassinate a 'troublemaker'; create some terrible event to discredit a group or person; abduct someone and blame it on 'aliens'; or produce a problem-reaction-solution situation. In 1975, the journalist James Moore claimed to have secured a 350-page manual on the subject from CIA sources. Part of that document said:

"Medically, these radio signals are directed at certain parts of the brain. When a part of your brain receives a tiny electrical impulse from outside sources, such as vision, hearing, etc, an emotion is produced - anger at the sight of a gang of boys beating an old woman, for example. The same emotion of anger can be created by artificial radio signals sent to your brain by a controller. You could instantly feel the same white hot anger without any apparent reason.!

It makes you wonder about some of the messages being received by mediums and channellers. Psychically sensitive people are consciously tuning into other wavelengths of reality. It is possible, indeed probable, that some are tuning into wavelengths broadcast from technology on this planet. In the world of secret science, they know it is possible for chanellers to communicate with other wavelengths of reality. They know how it is done and they use mediums/channellers in their experiment.

According to the books on the mind control and advanced science establishment at Montauk in the USA in the 1970s, the Elite scientists were able to produce the image on a computer screen of what their psychic was thinking. They later broadcast his thought waves from a transmitter at the base and found that people in the area had been affected in their own minds by the thoughts being broadcast. The manipulators know also that more and more people are listening to what channellers say. What a great opportunity to use this process to further manipulate. Once again, our protection is to think for ourselves and accept no information on face value without thinking hard about it and checking the facts as best you can. That includes what you read in this book.

Alongside the development of mass mind control techniques have come those aimed at specific individuals. The most notorious is the MKUltra programme run by the CIA. Other offshoots and variations on this have been programmes known as Bluebird, Artichoke, MKDelta, and MKNaomi. Their even more advanced successors still go on today and the victims have often hit the global headlines as 'lone assassins'. MKUltra began in the 1950s under the Canadian-based Scottish psychiatrist, Doctor Ewen Cameron, who became a close friend of CIA chief Allen Dulles after Cameron served as the Canadian/United States psychiatrist at the Nuremberg war Trials. Cameron was one of the psychiatrists who examined Rudolph Hess. That was an appropriate appointment because what Cameron did to his 'patients' under CIA's MKUltra programme mirrored some of what the Nazis did to their victims, too.

Under the supervision of people like the Dulles brothers and other members of the U.S. establishment, many of the Nazi mind control experts and leading scientists were secretly removed from Germany, as the Allies closed in. They were taken to the United States to continue their work into mind control and what we would call flying saucers, anti-gravity technology. Some estimate that as many as 10,000 active Nazis escaped, leaving the farce of the Nuremberg War Trials to deal out 'justice' to those who had often been guilty of far less terrible crimes than the ones the Americans had helped to escape. Yes, the Nazis carried out horrible experiments on people, including children. Of that I have no doubt. But does anyone really think that is not continuing in the underground establishments in America and elsewhere today? The Nazi mentality did not end in 1945. It just changed locations and, literally, went underground.

The CIA was formed out of the wartime OSS, the Office of Strategic Services. This formation of the new Central Intelligence Agency was done under the supervision of British Intelligence, which had centuries of accumulated experience in covert operations. Many of the key personnel in the CIA were Nazis who had served under Hitler. One, Reinhard Gehlen of the SS, was employed by Allen Dulles to set up the CIA network in Europe after the war. I say 'employed'. In fact Gehlen has said that it was more like a partnership between the CIA (headed by the Hitler-supporting Allen Dulles) and the worldwide Nazi network. Gehlen said that the collaboration with Dulles was a "gentlemen's agreement" which "for a number of reasons was never set out in black and white...such was the element of trust that has been built up between the two sides during...intensive personal contact, that neither had the slightest hesitation in founding the entire operation on verbal agreement and a handshake".

The 'verbal agreement' wouldn't have anything to do with the danger of written evidence seeping out and blowing the story, I suppose. Writer and researcher, Noam Chomsky, says that Gehlen set up a secret U.S.-Nazi army, which extended it operations to Latin America (where it supported the Nazi-type regimes imposed on the people by the United States). The CIA was formed by Nazis, for Nazis, to promote the Nazi mentality. British Intelligence was a major instigator because it, too, is a Nazi organisation, at its core.

The CIA, under Allen Dulles, funded psychiatrist Ewen Cameron from the early 1950s on, as documents released in 1977 under the U.S. Freedom of Information Act have confirmed. Most of the documents were destroyed or not released, but there were enough to offer just a glimpse of the nightmare that was MKUltra. The project included the use of drugs (like LSD) and grotesque mind manipulation techniques known as 'depatterning' and 'psychic driving'. The CIA admitted supporting research into human mind and behaviour control at 150 institutions and these included hospitals, prisons, drug companies, and 44 universities. At least 185 scientists were involved. Like the Nazis' experiments, the targets were largely those considered 'lesser human beings' such as prostitutes, foreigners, people with non-white skins, and drug addicts.

Thousands of prisoners were also forced to take part, and hospital and mental patients were used without their consent as experiment-fodder for these crazy people. Let no-one tell me this is not still happening today all over the world, including the UK. Soldiers in the U.S. forces were used, too. Thousands were given LSD in the 1970s while being told they were testing gas masks and other protective gear. This puts in a new light the severe damage to the health of soldiers given vaccinations during the Gulf War, who are now demanding compensation.

The CIA funded Ewen Cameron through an organisation called the Society for Human Ecology, yet another CIA front, which was connected to Cornell University in New York. Cameron and Dulles wanted to develop forms of drugs, electronic stimulation, and hypnosis which would remove a person's personality and replace it with an 'improved one'. Another major aim was to preprogram people to carry out assassinations which could then be written off as the work of some 'lone nutter'. This goal was quite quickly achieved. In 1969, the CIA psychologist, José Delgado, published his book, Physical Control of the Mind: Toward a Psychocivilised Society. He wrote:

"Physical control of brain functions is a demonstrated fact...it is even possible to create and follow intentions, the development of thoughts and visual experiences. By electrical stimulation of specific cerebral structures, movements can be induced by radio command, hostility may appear and disappear, social hierarchy can be modified, sexual behaviour may be changed, and memory, emotions, and the thinking process may be influenced by remote control...".

Speaking in 1966, Delgado said that his experiments "...support the distasteful conclusion that motion, emotion, and behaviour can be directed by electrical forces and that humans can be controlled like robots by push buttons".

Which is precisely what happened to the killers of people like John Lennon, the would-be assassin of President Reagan, and, almost certainly, the assassin of King Feisal of Saudi Arabia, who was shot dead in 1975. The King, who routinely had free copies of the Protocols distributed to foreign tourists, was murdered by a relative who travelled from America to do it. This technique is also used to program people who run into streets or restaurants shooting in all directions, and to carry out the most awful crimes which add to the fear and the "something must be done" mentality. This demands - and gets - harsher laws and sentences, a more armed police force, and cameras in the streets.

LSD was widely used in the Cameron experiments. It creates confusion, a key aspect of mind control. One of the early victims was Frank Olsen, a chemist specialising in air-borne disease. He was given LSD while suffering from "depression and paranoia" and two weeks later threw himself to his death from the window of a New York hotel. The CIA funded a series of 'safe houses' for experimentation in San Francisco and New York. Here MKUltra operatives observed through two-way mirrors how the clients of CIA-hired prostitutes responded after being secretly given LSD. At Ewen Cameron's headquarters, the Allan Memorial Institute in Montreal, Canada, he 'treated' unsuspecting people for a variety of mental problems and systematically dismantled their personalities in MKUltra experiments.

In the Observer magazine of October 16th 1994, writer Elizabeth Nickson told the stories of many of Cameron's victims, including her own mother. One patient, a woman from Vancouver, was suffering from post-natal depression and fatigue. She was kept in a drug-induced sleep for 86 days by Cameron and when he was finished with her, she had lost all memory of her life, including the ability to read and write. She even needed toilet training. As a result of this pressure on her family, she lost her husband and six children. This was the same Ewen Cameron who was fêted by his fellow psychiatrists and mad president of the string of leading psychiatric bodies, including the World Psychiatric Association. The president of the New York Hospital-Cornell Medical Centre and the head of the Smithsonian Institute. This was the establishment top brass, not some mad professor working alone.

One of Cameron's techniques links in with what I said earlier. He used a tape machine called the Cererophone which was placed under the pillow of the sleeping victims to repeat messages over and over. He would also record a key phrase used by the victim became obsessed with the phrase and could not think about anything else. Such was the emotional result that drugs would be used to sedate the person. Psychic driving, the input of the "new" personality, often followed electro-therapy, the destruction of the natural personality. This was called the "depatterning" process.

Cameron used a technique called the Page-Russell shock treatment, named after the two British doctors who developed it. The victims would be given an initial electric shock, followed by five to nine smaller ones, two or three times a day for up to thirty days. Hospital workers at the time have reported that the screaming echoed around the hospital. The 'patients' would try to escape from this horror. Once this depatterning was completed and the victim thoroughly confused, a helmet would be clamped on their heads and negative messages would be repeated into the victim's mind for maybe twenty hours a day. These messages would repeat phrases like "My mother hates me, my husband hates me, I am a failure", and so on, using recordings of the victim's own voice. Cameron would also wire their legs and give them an electric shock after the completion of each message.

With the old personality now destroyed, the process would be used to build a new one in Cameron's image. And this, lest we forget, was funded by the CIA with taxpayers' money at the behest of Allen Dulles, the man who , with others, controlled the Nuremberg War Trials that sentenced scores of lower-ranked Nazis to death for doing far less than he and Cameron were doing. All of this continues in a much more advanced way today. I have been told of mind control research of a similar kind in some UK universities and if you know more, please tell me.

Most people have no idea how easy the law makes it for you to be imprisoned in a mental institution. It really is so easy. A friend of mine who was going through a traumatic spiritual awakening (he was seeing the world for what it really is) was pressured by his family to agree to attend a private mental hospital. He chose to go for their sake. But when he decided to leave the hospital after chatting with the doctors, he was forcibly stopped. He was also forced to take drugs. What the staff of that hospital were doing was perfectly legal. Once you agree to have treatment at such a place, you lose all your rights to leave if the staff decide that you should not. As the doctors at that level of the profession largely have no idea about the nature of the psyche, despite being called 'psychiatrists', they can imprison you and force you to take drugs to 'treat' quite natural phenomena.

If we are not vigilant, the excuse of 'mental illness' will be used to intern those who say they can communicate with other frequencies ['schizophrenia'] and those who claim there is a global conspiracy ['paranoia']. Someone like me who talks about both becomes a 'paranoid schizophrenic', which is exactly how they imprisoned dissenters in the psychiatric hospitals of the Soviet Union.

Eventually, at the start of the Bush presidency, the CIA settled out of court with nine of the victims of MKUltra for the largest sum of money possible without the approval of the Attorney General. Another 69 are still battling for compensation. This is not helped by the admission of Richard Helms, the CIA chief at the time of Watergate, that he destroyed most of the MKUltra documents in 1973. What we are looking at here is the sharp end of the policy to turn the human race from unique and free-thinking expressions of creation into a herd of sheep and robots. It is a combination of technology, engineered events, and control of both politics and (crucially) the media. Behind it is the familiar roll call.

The document Silent Weapons For A Quiet War reveals the input of the Rockefeller Foundation in funding research through Harvard University into the potential for computers to control human thinking. The aim is to have physical money replaced entirely by credit card electronic money, and then to replace credit cards and identity cards with a microchip just under the skin. Intel Corporation was awarded a five-year contract in 1994, to develop just such a device at its Rio Rancho, New Mexico, facility. This chip would be linked to a global computer using the excuse that all financial transactions had to be registered at the new world central bank. The computer would know everything there is to know about us at all times and would be able to send messages the other way, from the computer to us, feeding us messages and programming our consciousnesses. Robots would be exactly the word.

This prospect is nothing new. CIA psychologist Dr José Delgado said in 1966 that the day would come when brain control could be turned over to non-human operators, by establishing two-way communication between the implanted brain and a computer. In the 1970s, Sweden was stunned to hear that microchips were being implanted into hospital patients without their knowledge, as part of a mind control experiment. This was sanctioned by Olof Palme, the Bilderberg Prime Minister of Sweden. The dangers are so potent and so obvious. As Senator Sam J. Ervin, the head of a Senate subcommittee on behaviour modification, said in 1973:

"...behavioural technology...in the United States today touches upon the most basic sources of individuality, and the very core of personal freedom. To my mind the most serious threat...is the power this technology gives one man to impose his views and values on another...If our society is to remain free, one man must not be empowered to change another man's personality and dictate the values, thoughts, and feelings of others."

Throughout the Silent Weapons document and the Elite philosophy in general, we see the desire to do exactly that. We see the theme of the chosen elite controlling the 'stupid herd' in all areas of our lives. It starts with the children in the schools and the young people in the universities. Get 'em young and you have got them for good.

I never cease to wonder when I speak at universities how the majority of students are already programmed to think like clones of the system by the age of seventeen and eighteen. Their inability to think for themselves is quite stunning, with very honourable exceptions. Silent Weapons For A Quiet War emphasises to its own agents the importance of controlling what children and young people are told. The teachers are trained to think in a certain way and to believe that the information they are communicating is true. Even if they doubt it, the authorities insist that it is taught anyway. "If you don't like it Mr or Mrs Teacher, get out and we will replace you with someone who will do as they are told." As the rock group, Pink Floyd, say in their well-known song, children are programmed by the education system to be "Just another brick in the wall". But how much debate goes on about these matters?

Teachers, parents, the teaching unions, and the politicians go on endlessly about the funding of schools and the shortage of school books. Where is the concern about what is actually taught in the schools and what is written in those books? And yet there is no other subject on Earth that is more important than the programming of the human mind. From that all else comes.

The Silent Weapons document describes the mind-controlling technique brilliantly.

"It shoots situations, instead of bullets; propelled by data processing, instead of grains of gunpowder; from a computer, instead of a gun; operated by a computer programmer, instead of a marksman; under the orders of a banking magnate, instead of a military general. It makes no obvious physical or mental injuries, and does not obviously interfere with anyone's daily social life.

"Yet it makes an unmistakable 'noise', causes unmistakable physical and mental damage, and unmistakably interferes with daily social life, i.e., unmistakable to a trained observer, one who knows what to look for. The public cannot comprehend the weapon, and therefore cannot believe they are being attacked and subdued by a weapon.

"The public might instinctively feel that something is wrong, but because of the technical nature of the silent weapon, they cannot express their feeling in a rational way, or handle the problem with intelligence. Therefore, they do not know how to cry for help, and do not know how to associate with others to defend themselves against it.

"When a silent weapon is applied gradually, the public adjusts/adapts to its presence and learns to tolerate its encroachment on their lives until the pressure [psychological via economic] becomes too great and they crack up. Therefore the silent weapon is a type of biological warfare. It attacks the vitality, options, and mobility of the individuals of a society by knowing, understanding, manipulating, and attacking their sources of natural and social energy, and their physical, mental, and emotional strengths and weaknesses."

In other words, divide and rule, and introduce your global dictatorship via the stepping-stones approach and few will realise what is really going on until it is too late. In fact, many will even laugh at or condemn those who point out what is happening. Well the readers of this book, and many others like it, do know what is really going on. And if we are truly committed to a better world and to freedom of thought and expression, the information is impossible to ignore. The work we all have to do to break the hold the programmers have on so many human minds is considerable, but it is perfectly achievable - and will be achieved - if we are prepared to get involved. There is nothing more powerful than a human mind determined to think and act for itself. Such a phenomenon is a manipulator's nightmare and, like everyone on this planet, you have the power.

The 90s boom rested on three unsustainable bubbles:

"One of them, the stock bubble, has already burst.

The other two bubbles â€“ the dollar bubble and the

housing bubble â€“ are still with us. The dollar bubble

is starting to deflate, and the housing bubble is

perhaps just now reaching its peak. These bubbles

created the basis for the 2001 recession and the

economy's continuing period of stagnation."

-Dean Baker, Director

Center for Economic and Policy Research

Bursting Bubbles

By Dean Baker, In These Times
May 28, 2003

In 2000, President Clinton could legitimately boast of the "best economy in 30 years." Unemployment was low, wages were rising at all income levels, and the poverty rate was headed downward at a rapid pace. But after President Bush took office in 2001, the economy fell into recession, shedding jobs and causing real wage growth to slow and eventually stop altogether.

A convenient story explains this sharp economic reversal. According to the script, Clinton eliminated the deficit through progressive tax increases and spending restraint. This deficit reduction lowered interest rates and spurred an investment boom, which was the basis for the extraordinary growth of the late '90s. Then Bush came into office and quickly squandered the surplus with his tax cuts to the rich and military build-up. As a result, the deficit skyrocketed and the economy tanked.

It's a good story, but the reality is quite different. The Clinton boom was built on three unsustainable bubbles. One of them, the stock bubble, has already burst. The other two bubbles â€“ the dollar bubble and the housing bubble â€“ are still with us. The dollar bubble is starting to deflate, and the housing bubble is perhaps just now reaching its peak. These bubbles created the basis for the 2001 recession and the economy's continuing period of stagnation.

The basic facts of the economy's rapid deterioration over the last two years are widely known. After creating an average of more than 3 million jobs a year from 1996 to 2000, the economy has lost more than 2 million jobs since March 2001. This reversal has been associated with a rise in the unemployment rate from an average of 4 percent in 2000 to 6 percent today. The increase among African-Americans has been even larger, rising from 7.6 percent in 2000 to 10.9 percent in April, and larger yet for African-American teens, with the unemployment rate rising from just over 24 percent in 2000 to peaks as high as 35 percent in March. While real wages were growing at close to a 2 percent annual pace in 2000, wage growth has recently fallen to zero for most workers.

The economy's reversal was associated with a plunge in the stock market. The S&P 500 fell from a peak of more than 1,500 in March 2000, to lows of less than 800 in the past year. The tech-heavy Nasdaq took an even sharper plunge, falling from a peak of more than 5,000 in March 2000 to under 1,200 last summer. Adding to this picture is the reversal in the budget situation. The surplus of $236 billion in 2000 has given way to a deficit that may reach $500 billion in 2003.

Of course, the stock market downturn should not be included among the economic failings of the last two and a half years. That downturn really was just a healthy return to reality. The long stretch of new peaks that the market hit in the '90s should have been a warning of bad times ahead to anyone paying attention. Instead the boom was widely celebrated as evidence of a new era of unbounded prosperity. The failure by the Federal Reserve Board or the Clinton administration to take actions to stem the growth of the stock bubble laid the grounds for a train wreck; the only question up in the air was when it would hit.

While the day-to-day, or even month-to-month, movements of the market are erratic and unpredictable, there is an underlying relationship between the stock market and the economy. In principle, the stock market is putting a price on the future profits of corporate America. While no one can know the future with certainty, economists can plausibly forecast how high profits can go over a long horizon â€“ say 10 to 15 years.

When the market was hitting its peaks in 2000, the ratio of stock prices to corporate earnings exceeded 30-to-1, more than twice its historic average. No plausible explanation could ever have justified this sort of valuation. In order for the stock market peaks of 2000 to have made sense, it would have been necessary for profits to grow at close to twice their historic pace.

In short, any serious economic analyst should have been able to recognize the stock bubble of the late '90s. The fact that those in positions of responsibility either failed to recognize the bubble or chose to ignore it was a mistake with enormous consequences.

The stock market bubble added more than $8 trillion of paper wealth to the economy. This stimulated the economy in two ways. First, when families see the value of their stock portfolios rise, they spend more, since they feel less need to put money aside for retirement or their kids' education. Just as the textbooks would predict, consumption boomed and savings fell through the floor in the late '90s and 2000.

The stock bubble also stimulated the economy through its effect on investment. Contrary to myth, firms rarely finance new investment by issuing shares of stock. However, the '90s boom was an exception to this rule. With Internet start-ups able to raise billions of dollars by selling shares on the Nasdaq, companies were using stock to finance new investment in a big way. Soaring stock prices fed directly into an investment boom concentrated in telecommunications and other high-tech sectors. Investment in equipment and software rose by more than $300 billion between 1996 and 2000, an increase of more than 45 percent.

The bursting of the bubble threw this process into reverse. This was seen most clearly with investment, which in both 2001 and 2002 was down by more than $140 billion from its peak in 2000. As we now know, much of the tech investment of the boom years was wasted on wild schemes that will never prove profitable. The tech sectors continue to have vast amounts of overcapacity, which will depress investment in semiconductors, telecommunications, and related sectors for years to come.

Consumption has fallen back somewhat, but not as much as might have been expected, given the loss of more than $8 trillion in paper wealth in the stock market. Consumption has stayed strong in the post-crash world because of a second asset bubble. As was the case in Japan in the '80s, the stock market bubble of the late '90s was accompanied by a housing bubble. The rise in home prices since 1995 has outpaced the overall rate of inflation by more than 30 percentage points. This sort of run-up in home prices has no precedent in the post-war era. The surge in home prices has created more than $3 trillion in new housing wealth, as compared to a situation in which home prices had just kept pace with inflation.

Like stock wealth, housing wealth also spurs consumption. Families see the rising value of their homes as a source of wealth that they can draw upon to meet their needs. They have been drawing on this wealth with a vengeance in the past two years, as plunging interest rates have led to an unprecedented surge in mortgage borrowing. As a result, the ratio of mortgage debt to home equity is at near-record highs.

This situation is frightening for two reasons. First, as a short-run matter, if housing prices fall sharply in some of the areas where the effects of the bubble are largest (for example the Boston, New York, Washington, and San Francisco areas), new home buyers (and those who recently refinanced their mortgages and took money out) could find they have negative equity in their homes. If someone borrows $270,000 to buy a $300,000 home, and the price falls by one-third, this leaves them owing $70,000 more than the home is worth. When this happens, there is a huge incentive to just let the mortgage holder foreclose on the home. If this were to happen on a large scale, the survival of many banks and financial institutions would be at risk.

The current high levels of mortgage debt are a problem for another reason. The population is aging, and many families are getting near retirement. With the front end of the baby boomers approaching 60, many homeowners should be near to paying off their mortgage. The demographics indicate that mortgage debt should be lower than it has been in prior decades. But on the contrary, many baby boomers are likely to hit retirement â€“ after having just lost much of the wealth in their 401(k)s due to the stock market crash â€“ and discover that their homes are worth much less than they had expected. These older baby boomers really need to be saving to ensure themselves a sufficient income in retirement, but the illusory wealth created by the housing bubble is preventing them from recognizing this fact.

While the housing bubble has its own logic, it is an outgrowth of the stock bubble. It began as a result of people using their newly created stock wealth to purchase better homes. This started home prices on an upward path, leading people to buy homes in anticipation of continually rising prices. The bubble will persist as long as people expect home prices to rise. When they lose this expectation, housing prices will fall back to more normal levels.

The '90s stock bubble is also partially responsible for other recent problems. One is the switch from surpluses to deficits at both the federal and state levels. The federal government collected almost $120 billion in capital gains tax revenue at the peak of the stock bubble in 2000, most of which came from gains on stock sales. When stock prices plunged, capital gains revenue did also. It is now projected at $51 billion in 2003. Many states, especially California, were similarly affected by the stock crash.

The wave of corporate accounting scandals was also an outgrowth of the bubble. In an era in which corporations were routinely putting out profit projections that defied common sense, it was virtually inevitable that some executives would take the additional step to outright fraud. This was entirely predictable, since every prior speculative bubble has also been accompanied by large-scale financial fraud.

The Price of Greenspan's Success (Parts 1 &2) - By Aaron L. Task / TheStreet.com 06/06/2003 07:07 AM EDT

The Price of Greenspan's Success

By Aaron L. Task
Senior Writer
06/06/2003 07:07 AM EDT
Click here for more stories by Aaron L. Task

Alan Greenspan's Comeback Tour (PART 1)
By Aaron L. Task
Senior Writer
06/05/2003 07:15 AM EDT
URL: http://www.thestreet.com/markets/aarontaskfree/10091586.html

Months after he was written off by many as ineffective, a political hack or even approaching senility, Alan Greenspan is having a quiet revival. Not only has he secured an appointment for another term as Federal Reserve chairman, but Greenspan is once again pulling the strings that control the global economy.

Moreover, he's doing so with great skill, much to the surprise of his many critics. Despite a popular belief the Fed chieftain has become toothless in the postbubble era, recent history suggests the "maestro" is proving to be a puppet master, too.

"I would say [Greenspan's] been very clever," said Paul Kasriel, chief U.S. economist at Northern Trust and an unabashed Fed critic. "He's getting what he wants."

What Greenspan wants, in simplest terms, are higher equity prices, to curtail the decline in household wealth and re-establish business confidence, and low mortgage rates, to keep housing and refinancing activity strong in order to bolster consumer confidence and spending.

Following Wednesday's action, the S&P 500 is up 27% since its October lows and the Nasdaq Composite has risen by a whopping 47%. Meanwhile, the benchmark 10-year Treasury is yielding 3.29%, its lowest level since 1958, while the Mortgage Bankers Association reported record levels of both refinancing and new-mortgage applications.

Greenspan also desires risk-taking and wants disincentives for individuals and businesses to keep their cash. Rock-bottom money market rates and big gains in many small-cap and speculative stocks, often mutually exclusive, suggest that wish is coming true, too.

Not bad for a guy supposedly all washed up.

Buoyed by such successes, even if he's not roundly credited with them, Greenspan seems to be getting greedy. Some observers suspect his hints at another rate cut in Tuesday's speech were aimed mainly at the European Central Bank, whose rate-setting body meets Thursday. Greenspan wants his European counterparts to stop dawdling and loosen monetary policy.

"We expect the ECB to opt for the more aggressive 50-basis-point easing action," in part because of "rising expectations that the U.S. interest rate disadvantage will be further [led] by the Fed's resilience to combat deflationary pressures," Ashraf Laidi, chief currency strategist at MG Financial, commented Wednesday. (Spurred, perhaps, by Greenpan's bluff, the ECB did opt for a more aggressive 50 basis point rate cut on Thursday.)

Heading into Thursday's meeting, the ECB's short-term rate was 2.50%, double the fed funds target rate. The 125-basis-point differential between the two has helped spur the euro's 24% rise vs. the dollar in the past year, including its record high above $1.19 on May 27. But the euro's strength has started to crimp European exporters, something the ECB is being forced to address.

In addition to placing greater onus on the ECB to ease, Greenspan also wants a weaker dollar to help U.S. manufacturers and put upward pressure on import prices, which fights deflationary pressures -- real or imagined.

Sailing Away to Key Largo

The irony is Greenspan is having it all at a time when his reputation is arguably at its nadir since he became chairman in 1987.

Notably, "monetary policy" is far down the list of reasons even the most bullish equity market participants cite for the market's recent surge. Recent tax cuts, improving corporate profitability, the relatively quick end to the war, the absence of more terror attacks on American soil, even prospects for peace in the Middle East are often mentioned as reasons for the rally before the Fed's policies.

"People are betting we're going to maneuver through despite him," said Jim Bianco, president of Bianco Research in Chicago. "He's like the popular baseball player in the twilight of his career. That's how the pros [on Wall Street] feel about Greenspan: His best days are behind him."

Bianco, a longtime critic, said Greenspan's fall from grace was sealed by his flip-flop on the issue of tax cuts and ham-handed defense of his failure to identify the equity bubble in a speech at Jackson Hole last August.

More practical reasons explain why many market participants see Greenspan more like Cal Ripken, who struggled at the end of an otherwise stellar career, vs. Barry Bonds, the San Francisco slugger who seems to improve with age. First, Fed rate cuts beginning in January 2001 failed to stop the marauding bear market in equities. Second, the Fed chairman has been speaking for almost a year now about how "the fundamentals are in place for a return to sustained healthy growth," as he testified before Congress last July. To date, healthy growth remains elusive. Understandably, many have concluded Greenspan has lost the magic touch, even if his prognosticating abilities were always suspect.

A more forgiving explanation goes as follows: Monetary policy arguably didn't become truly aggressive until after the Sept. 11, 2001, terror attacks. Rate cuts beginning in January of that year sparked false hopes for a stock market recovery, but really only "got us away from tightness," as described by Brian Wesbury, chief economist at Griffin, Kubik, Stephens & Thompson in Chicago.

Notably, MZM -- the broadest measure of U.S. money supply -- had been dropping steadily in 2001 until after Sept. 11, when the Fed opened the liquidity spigots, setting the stage for record-setting home and auto sales in the months that followed. (Money supply fell again in early 2002, perhaps contributing to last year's falling equity prices and sluggish economy, but that's another story.)

The stock market apparently bottomed 13 months after Sept. 11, a bit longer than the normal six-to-nine-month lag. But that's close enough for quasi-government policy, considering the corporate scandals that erupted during the period and other postbubble overhangs, as well as fears of more terror attacks. Such factors, as well as the crippling overcapacity after the capital spending boom in the 1990s, also help explain the economy's ongoing reluctance to respond to rate cuts.

The Fed's easing campaign was on hold from November 2001 until November 2002, when the Federal Open Market Committee eased by 50 basis points, bringing the fed funds rate to its current 1.25% level. The November 2002 rate cut was soon followed by a now infamous speech by Fed Governor Ben Bernanke, which detailed how the Fed would use "whatever means necessary to prevent significant deflation in the U.S."

While many decried the irresponsibility of Bernanke's "printing press" comments, others took it as a signal from the Fed that "'we're not going to let this thing go down,'" as Bert Dohmen, founder of Dohmen Capital Research in Los Angeles, recalled. "Bernanke rang a bell [and] I think they'll keep it glued together until the elections" in 2004.

Since last November, various Fed officials have become increasingly emboldened in talking about deflation risks. On Tuesday, Greenspan said the Fed will "lean over backwards" to prevent what he described as "corrosive deflation" vs. a less-onerous decline in prices.

Once again, Alan Greenspan got what he wanted. Those comments fueled further gains in stocks, as equity traders took solace knowing the Fed is vigilant against deflation, and lower bond yields, as fixed-income traders surmise the Fed may buy long-dated securities as part of the same effort.

In sum, while many traders wave Greenspan voodoo dolls in public, more are once again genuflecting to him, albeit silently.

Denouement

Longtime readers will recall I've been a critic of Greenspan since long before it was popular. This column doesn't signal a change of heart. However, it's interesting that as Greenspan's "stock" has fallen, his talents as Fed chairman may have never been sharper.

Of course, there are risks to all this, including risks of blind faith in the Fed, even of the unconscious variety. More important, there are risks to the Fed's policies themselves, as we'll discuss in Part 2 of this story.

The Taskmaster - TSC
The Price of Greenspan's Success (PART 2)
By Aaron L. Task
Senior Writer
06/06/2003 07:07 AM EDT
URL: http://www.thestreet.com/markets/aarontaskfree/10091902.html

Even if he's not widely credited for it, Alan Greenspan has been successful recently in sustaining strength in housing, boosting stock and Treasury market prices, and weakening the dollar.

But acknowledging that Greenspan is getting what he wants is not the same as condoning his actions. Many observers worry Greenspan's short-term successes are going to cause major long-term headaches. Although the chairman is hoping rapid money-supply growth -- M2 has risen at an annualized rate of 13.4% in the last eight weeks -- will continue to fuel higher asset prices, critics contend this overly accommodative monetary policy threatens to unleash dangerous speculation in equities, reminiscent of the late 1990s, as well as grossly inflated Treasury and housing markets.

Broadly speaking, Greenspan is betting strength in the housing market -- and more recently stocks -- will spur consumer spending to keep the economy afloat until business expenditures revive. Despite a 42-year-low in the fed funds rate, corporate executives remain reluctant to spend because the 1990s spending boom generated poor returns and created overcapacity that remains onerous today. (Yes, many executives also are distracted by new accounting regulations and other oversight issues.)

"Do you really need more [capital spending] when capacity utilization rates are so low?" wondered John Lonski, senior economist at Moody's Investors Service. "You have to be patient and work your way out of this sluggish state."

Ahh, but we live in impatient times. In this world of instant gratification (yes, Dad, you were right), investors, policymakers and certainly politicians are loathe to contemplate slogging through years of sluggish growth. Trouble is, many economists believe Greenspan is prescribing the wrong medicine for what ails the economy.

A Lender and a Borrower Be

By keeping the fed funds rate at 1.25% since November 2002, and threatening to ease more, Greenspan has pushed Treasury yields to levels unseen since the 1950s and spurred record mortgage and refinancing activity. Concurrently, the Fed has encouraged rabid lending activity by giving banks a veritable license to print money via the so-called carry trade, whereby institutions borrow at the rock-bottom fed funds rate and lend at higher rates along the yield curve.

With debt being the drug and the Fed being the pusher, Paul Kasriel, chief U.S. economist at Northern Trust, compared American households and business to heroin addicts. "If you give a heroin addict a fix, he'll function better in the short run then if he went cold turkey," Kasriel said. "But if you keep giving him fixes, ultimately he's going to die."

On the corporate side, $70 billion of debt was issued in May, while an additional $14.1 billion was raised through convertible bond offerings, according to Morgan Stanley. Total outstanding credit market debt totaled $32 trillion at the end of 2002 vs. $13 trillion in 1990, according to Doug Noland, financial markets strategist at David Tice & Associates in Dallas.

In the household sector, refinancing activity has lowered borrowing costs and helped Americans replace "bad debt" with good. Still, households' total liabilities relative to total assets were a record 18.3% in the fourth quarter and personal bankruptcies were at an all-time high as of March 31, Kasriel noted.

To his many critics, it is as if Greenspan has facilitated a migration from one bubble in equities to another in housing, with a Treasury bubble thrown in for good measure. The equity bubble, of course, ended with one of the worst bear markets in American history. Some foresee the risk of repeats in housing and fixed income, with perhaps even more devastating effects to the real economy.

"Indeed, never has a financial system been more vulnerable to higher interest rates, emanating from the highly over-borrowed consumer and corporate sectors, as well as the egregiously exposed financial and 'speculator' arenas," Noland recently wrote. "And there is absolutely no escape."

On a less draconian note, Lonski fears ever-lower mortgage rates could trigger a true housing bubble, much as the Fed's aggressive easing in 1998 spurred wild speculation in equities.

Although there are currently pockets of insanity in housing, Lonski referred to even more excessive speculation and overbuilding, akin to what occurred in the 1980s. That cycle ended, in part, because of the stock market crash in 1987. Notably, the Fed today is pursuing policies consistent with a weaker dollar, a major trigger of the '87 crash. Skeptics worry that weakness in the greenback will turn into a rout, prompting the Fed to tighten monetary policy. Higher rates will curtail economic growth and have devastating consequences for both housing and Treasuries.

"Rates will turn fast and end refinancing activity," said Brian Wesbury, chief economist at Griffin, Kubik, Stephens & Thompson in Chicago. "It can be vicious when [an easing cycle] comes to an end."

Wesbury recalled the bond market's heavy losses in 1994, after the Fed abruptly ended an easing campaign and started tightening. The bond market is "in the same can of worms today," he said, suggesting the Fed is "too easy" today and "you can't play that game forever."

Should rates rise and/or home prices fall dramatically, for whatever reason, homeowners will be unable to extract equity via refinancings. Also, many homeowners may find themselves "upside down" on their mortgages, meaning they'll owe more than their homes are worth and delinquencies may rise. Given commercial banks' exposure to mortgage debt -- of all stripes -- any trouble in the housing sector will have serious repercussions for the financial sector; ominously, mortgage foreclosures hit a 30-year high in the fourth quarter, as reported previously.

Furthermore, no matter how low mortgage rates fall, it's going to be hard for most Americans to make their mortgage payments if they're out of work.

Laboring Over Jobs

Labor markets will be the center of attention Friday. The May jobs report is expected to show nonfarm payrolls falling by 30,000, while the unemployment rate rises to 6.1% from 6%, according to Briefing.com. Greenspan's description of the labor market as "exceptionally weak" on Tuesday provides ample cover for the Fed to ease again at its policy meeting on June 24-25, if not sooner, if the jobs report proves much weaker than expected (Payrolls fell by a less-than-feared 17,000 and the unemployment rate was 6.1%, as expected. Stocks rallied early Friday in reaction and Treasury prices fell as expectations for a 50-basis point Fed ease this month diminshed.).

"A weak-enough reading on May employment might very well tilt the odds overwhelmingly in favor of another rate cut," Lonski agreed. "Beyond that, I don't see a compelling reason [indicating] another rate cut is required."

In addition to the "record-smashing" pace of mortgage applications, the Institute for Supply Management reported higher-than-expected surveys for both manufacturing and services this week, the economist noted. Meanwhile, equities have rallied sharply, corporate bond spreads have narrowed and the dollar has fallen markedly in the past year. In addition, Moody's index of industrial metals is up 12.5% year to date and "not warning of deflation at all," he continued. Notably, that index excludes crude prices, which are hovering around $30 per barrel, a level few associate with deflationary pressures.

So if deflation really isn't a threat, why do Greenspan & Co. keep talking about it? In fairness, many believe the risks are real, citing deflationary pressures emanating most prominently from Japan and China, and more recently Germany. By their own admission, Fed officials have never dealt with deflation in the real world, so it's best for them to be overly aggressive in preventing its onset.

However, some believe the Fed waited too long to address the deflation threat and "the delay has weakened the system and potentially imperiled the economy to such an extent that it will be far more vulnerable to extraneous shocks," as Dave Hunter, chief market strategist at Kelley & Christensen, warned. "I think history will record that his recent shift to a more accommodative policy" -- meaning faster monetary growth and not just lower rates -- "was 'too little, too late.'"

In other words, Greenspan emerging victorious isn't guaranteed, even if he's ahead of the game right now.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to Aaron L. Task.

///////////////// DEFINITIONS /////////////////

money supply

Money supply is measured in a variety of ways, but the most widely cited measurements are M1, M2 and M3 -- the "monetary aggregates." M1 is chiefly currency in circulation and bank checking accounts. M2 is M1 plus savings accounts, CDs under $100,000, retail money-market fund shares and overnight repurchase agreements. M3 is M2 plus CDs over $100,000, institutional money-market funds and term repurchase agreements.

The Fed sets target ranges for the growth rates of M2 and M3. The 1999 ranges are the same as 1998's: 1% to 5% for M2, and 2% to 6% for M3. In 1998, M2 grew 8.5%, while M3 grew 10.9%. In 1999, M2 is growing at a 3.4% pace, while M3 is growing at a 3.7% pace.

Money-supply growth depends on interest rates, specifically the fed funds rate. Raising the fed funds rate curbs money supply growth, while cutting the rate accelerates it.

From 1979 to 1982, monetary policy focused on achieving a certain rate of M1 money supply growth. Changes in demand for money (loan demand) were allowed to influence the fed funds rate. For example, if money supply growth outpaced the target rate, the Fed would raise the fed funds rate to curb it. This reflected the monetarist tenet that the money supply is the main determinant of economic activity.

The Fed stopped targeting money supply growth and started targeting the fed funds rate because, it explains, "the combination of interest rate deregulation and financial innovation disrupted the historical relationships between M1 and the objectives of monetary policy." In other words, the development of new types of financial products complicated measurement of the money supply.

Fed funds rate

The fed funds rate -- short for federal funds rate -- is the interest rate at which banks lend to each other overnight. As such, it is a market interest rate. But the Fed sets a target for the fed funds rate, and keeps the rate on target via open market operations. Unless otherwise specified, references to the fed funds rate are actually to the fed funds rate target (on any given day, the actual rate may differ from the target rate slightly).

The fed funds rate target is set by the Federal Open Market Committee, the Fed's monetary policy committee. As the U.S. short-term benchmark, it influences market interest rates throughout the world.

federal reserve

The Federal Reserve, commonly referred to with no disrespect as the Fed, is the central bank of the U.S. It conducts monetary policy, regulates banks, maintains the stability of the financial system, and provides financial services to U.S. banks, foreign governments and the public.

The Federal Reserve System consists of a seven-member Board of Governors headquartered in Washington, D.C. and 12 Reserve Banks located in major cities throughout the country. The District Feds, as they are called, are in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco. Each Federal Reserve Bank serves financial institutions and the public in a multistate district. A map on the Fed's Web site shows the 12 districts.

Fed governors are nominated by the president, who nominates two governors to serve as Fed chairman and vice chairman.

The Fed conducts monetary policy through its Federal Open Market Committee, which sets a target for the fed funds rate. The Fed then keeps the fed funds rate on target through open market operations.

The Fed's purposes and functions are spelled out in much greater detail on its Web site.

To make matters worse, a third bubble from the '90s is also still with us â€“ the dollar bubble. The Clinton administration deliberately pursued a "strong dollar" policy. This had the desirable short-term effect of restraining inflation and raising domestic living standards by making imports cheaper for people in the United States. (An undesirable short-term effect was the devastation of U.S. manufacturing.) However, in the long-term, the strong dollar policy is unsustainable. As a result of its massive bill for imports, the United States is currently borrowing more than $550 billion a year from abroad (approximately 5.3 percent of GDP), since it is buying much more from abroad than it is selling. This borrowing is paid for by selling off U.S. assets. If the trade deficit remains at its current level, within a decade foreigners will own the entire stock market, much of the government debt and many of our homes.

At some point, the dollar will have to fall significantly to bring the deficit down to a sustainable level. When this happens, the resulting rise in import prices will contribute to a rise in the inflation rate and a deterioration in domestic living standards. If the Federal Reserve Board raises interest rates to prevent an increase in the inflation rate, then the impact of the falling dollar will be especially painful, as higher unemployment, which accompanies higher interest rates, will be an inevitable result.

The triple bubble economy of the late '90s presents the most difficult set of economic problems since the Great Depression. The solutions are neither simple nor painless, but â€“ just as was the case with the New Deal â€“ big problems can open the door to big solutions.

This is the first of a special two-part series by In These Times on the economy that explains how related bubbles in the property and currency markets have yet to burst, and how that prospect could severely hamper our quality of life for years to come.

Dean Baker is the co-director of the Center for Economic and Policy Research. He also is the author of the Economic Reporting Review, a weekly online commentary on the economic reporting in the New York Times and Washington Post, available at www.cepr.net.

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