The Unbearable Lightness of the Buck – Bonner & Rajiva on the Declining Dollar on 7/20/2007 (reprinted)

THE UNBEARABLE LIGHTNESS OF THE BUCK
by Bill Bonner and Lila Rajiva

It was the Chinese who invented paper “money” around the beginning of the ninth century A.D. Because it was so light it would blow out of their hands, they called it “flying money.”

The ancient Chinese were right about the lack of substance of paper currency. The greenback seems to have less substance every day. But we do not wonder why the greenback seems to be dying. We wonder why it isn’t dead already.

In search of an answer, we look back, to a case brought by the First National Bank of Montgomery, Minnesota, against one Jerome Daly in 1969.

The bank had lent Mr. Daly $14,000 in a mortgage loan. Then it tried to get its money back by foreclosing on Daly’s house. Daly took to the courts with a defense so ingenious even a Chinese banker might wish to emulate it.

You can’t enforce a mortgage contract, said he, when there was no contractual obligation. And there was no valid obligation because no “consideration” had been given by the bank. Having gotten nothing from the bank, he had nothing give back.

In support of his testimony, Mr. Daly, a lawyer, called the bank president to the stand and demanded to know if the bank had actually handed him a wad of $20 bills.

“Isn’t it true,” he began, or words to that effect, “that the bank did not actually give me a stack of $20 bills? In fact, the bank didn’t give me any bills of any sort, right?”

“Well, yes…but…” the bank president must have replied.

“Nor did the bank convey any property to me…or give me gold coins…or any other valuable, tangible thing…right?”

“Well, yes…but…” came the next reply, also cut off by Mr. Daly’s next question.

“And isn’t it true that the bank did not go out and borrow extra money so it could lend it to me…nor did it draw down its depositors’ accounts in order to give me money?”

“Yes, that is correct.”

“In fact, the so-called mortgage loan was, from your point of view, just a bookkeeping entry. Is that not right? And is it not true that the ‘money’ never existed at all…at least not in the sense that most people think of money…and that this ‘money’ was actually ‘created out of thin air’ as the economist John Maynard Keynes once described it?”

“Well, yes…but…”

By this time, both judge and jury were nodding their heads, sure that they had a combination of Charles Ponzi, John Law and Kenneth Lay on the witness stand.

“Fraud!” concluded Justice Mahoney and went on to rule that the bank had given Daly no lawful consideration, had created $14,000 out of nothing, and had done so without the backing of any U.S. law or statute.

Therefore, it followed, the bank was obliged to let Mr. Daly keep his house. And, thus it was that Mr. Daly kept his house.

Whether the reasoning behind this case was right or wrong is not at issue here. Our questions are more numerous but much simpler.

We want to know why there are not more Dalys demanding to keep their houses today. And why there are not more Mahoneys around to let them.

Why did one small court adopt this argument while it left no mark otherwise on American jurisprudence? Despite Justice Mahoney, U.S. courts have rejected every other attempt to argue that the U.S. dollar is not the lawful, valuable money everyone thinks it is. But just how valuable the U.S. dollar is, is a question not for the courts, but for the markets.

The euro, the pound, the Canadian dollar, oil and gold have been pronouncing a judgment of their own this week – all soared against the dollar. And yet not a whimper is to be heard from the great American masses. The dollar may be in trouble abroad, but at home its reputation is still spotless. Gas may cost more, heating bills may be higher, but so far milk, eggs, and beer have not soared beyond the budget of the masses. The people may have mortgaged their futures for the roof over their heads and sold their souls for a mess of credit, but with home prices still holding up and stocks pushing at all time highs, the devil has not come around for repayment yet.

Helping to postpone the day he does, the government also quietly stopped reporting M3 money in March 2006. M3 is the broadest measure of the “money supply” in the U.S. economy. As the supply of money increases, typically, consumer prices go up. Independent analysts who keep an eye on these things tell us that the green stuff is being pumped in at one of the highest rates ever – 12% per year, or four times the rate of GDP growth.

“Then why has it not gone to swell the prices of groceries yet?” you might ask.

The answer is that the people with the most money are spreading it around in places far distant from the local Superfresh. The ersatz money is circulating these days in art houses and auctions, in exotic vacation houses and rental properties, in retirement funds and pensions. Securitized and derivatized, packaged and repackaged, it is lent from one end of the globe to the other, forcing central bankers all over the world to work their own printing presses night and day to keep up with it. The resulting global “liquidity” is the bilge upon which asset prices float and make this boom so great for asset owners.

But this liquidity is no different from the non-existent “consideration” that Mr. Daly received from the First National Bank of Montgomery. It was this shaky credit that was packaged into new debt instruments like CDOs that are so intricate that teams of mathematicians cannot fathom all the ramifications and complications thereof. In a miracle rivaling any by the Galilean, these same oily pretzels of debt were twisted into Triple A rated bonds and sold to pension funds and institutional investors. Now the buyers are finding that the grease has turned rancid: Last week, the three leading rating agencies downgraded debt linked to the shakiest part of the housing market – the subprime loans. And following swiftly, one hedge fund at Bear Stearns took ill and passed away altogether while a third gave up 91% of its returns.

Ben Bernanke would like to boost rates to support the dollar and help American tourists, but faced with a liquidity crisis in the $500 trillion derivatives market, he’ll have to think thrice before doing so. But rates are going up with or without him. Lenders are finally growing wary.

Afraid of the poisonous debt packages, buyers are passing up another helping. “All but one of the 15 ABX indexes fell to a record low,” says Bloomberg news. Offers for CDOs are said to be going “no bid.” And several major debt offerings had to be withdrawn or rescheduled as promoters were afraid that they, too, would go “no bid.”

We don’t know if the First National Bank of Montgomery still exists. But if it does, we wouldn’t be surprised to learn that it is growing more cautious about lending. And dollar holders all over the world are tightening their grip, fearing that their flying money might fly away.

Bill Bonner and Lila Rajiva

From The Daily Reckoning

Part III A Scoop at the Daily Reckoning – the IMF Gold Fix 6/8/2006 (reprinted)

And here’s a note I did for the Daily Reckoning on gold price manipulation at the IMF (scroll down for the note)

Thu, June 08, 2006 01:29:50 PM

From:

The Daily Reckoning

Subject:

Today’s Daily Reckoning
Black Sheep in the Marketplace

The Daily Reckoning

London, England

Thursday, June 08, 2006

———————

*** The worldwide sell-off…Bernanke talks the talk, but he’ll never walk
Volcker’s walk – not even with lifts…

*** GATA is looking saner everyday…being a central bank means never
having to say you’re short…

*** Always helps to have friends in high places…unwinding in Japan…and
more!

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And more thoughts:

*** Daily Reckoning correspondent, Lila Rajiva, finds a scoop…in India:

“After years of being called crackpots in tin – or gold – foil hats, GATA
(the U.S.-based Gold Anti-Trust Action Committee) seems to look saner by
the day, next to the thorough-going loopiness of the financial
establishment. The latest evidence is an IMF report that shows how IMF
rules wink – if they do not actually blow kisses – at central banks that
double-count the gold reserves they’ve lent out for sale in the open
market. Apparently, being a central bank means never having to say you’re
short.

“Aha, says GATA, which has charged all along that the IMF along with the
U.S. Federal Reserve and other central banks have tried to hold down gold
prices. The shady rules suggest that when they lent gold out for cash, the
banks actually got to double their reserves by counting the leased gold as
an asset on their books, as well as the cash. That was pretty sweet both
for the lenders – the central banks, who got a small return for their gold
– and for the borrowers, the bullion banks who got to sell and reinvest
the proceeds for a higher return in what’s called a ‘carry trade.’

“Even the IMF report admits, delicately, that IMF rules have encouraged
‘overstating reserve assets because both the funds received from the gold
swap and the gold are included in reserve assets.’ But except for a lone
article yesterday in The Financial Express in India, (Sangita Shah, Double
counting of gold may have aided the price suppression, June 7, 2006), the
mainstream media has ignored the story.”
Continue reading

Empire of deadbeats: have title, keep house….

Feb. 22 (Bloomberg) — Joe Lents hasn’t made a payment on his $1.5 million mortgage since 2002.

That’s when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents’s mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.

“If you’re going to take my house away from me, you better own the note,” said Lents, 63, the former chief executive officer of a now-defunct voice recognition software company….”

More at Bloomberg.com

Comment:

Note the following:

The borrower was once the CEO of a company.

Note that his loan was for over a million.

Note that he didn’t make one solitary payment on it.

Does that sound like an impoverished, innocent, hornswoggled victim in need of charity to bail him out?

Sounds more like a speculator who never intended to make good on the loan…..

Torture files: CIA on those non-existent UK torture flights post-9-11…..oops..

“LONDON – CIA Director Michael Hayden acknowledged Thursday that two rendition flights carrying terrorism suspects refueled on British territory, despite repeated U.S. assurances that none of the secret flights since the Sept. 11 attacks had used British airspace or soil.

Hayden told agency employees that information previously provided to the British “turned out to be wrong.”

The spy agency reviewed rendition records late last year and discovered that in 2002 the CIA had in fact refueled two separate planes, each carrying a terrorism suspect, on Diego Garcia, a British island territory in the Indian Ocean….”

“Turned out to be wrong”? This is a news story? Or a PR release from the Agency?

And turns out Diego Garcia in the Indian Ocean may after all have been used as a torture site.

We said it back in November 2005 in our book, “The Language of Empire, Abu Ghraib and the American Media” (Monthly Review Press). but it bears saying again: we are living in the early beginnings of a global police state run for financiers and bankers.

 

Financial Follies: Gvt’s chief auditor resigns citing looming budget crises

“David M. Walker, the U.S. comptroller general and head of the Government Accountability Office, announced Friday that he will resign in March to lead a new foundation focused on long-term public policy challenges.

GAO serves as Congress’ chief investigative and audit arm, probing waste and fraud in government programs and detailing the long-term budget problems facing the government. Walker has headed the agency, which has more than 3,100 employees and a budget of nearly $500 million, since November 1998. His 15 year-term was not set to end until 2013.

Walker, 56, has repeatedly warned that the government faces a long-term fiscal crisis as the baby-boom generation retires, driving up spending on Medicare, Medicaid and Social Security.

He will continue to raise the alarm as president and chief executive of the newly established Peter G. Peterson Foundation, set up by the co-founder and senior chairman of The Blackstone Group, who served as Commerce secretary in the Nixon administration. Peterson has pledged to contribute at least $1 billion to the foundation.

“I have been around a very long time, and I have never seen so many simultaneous challenges that I would describe as undeniable, unsustainable and virtually untouchable politically,” Peterson, 81, said in a release announcing the foundation.”

More at Congressional Quarterly.

Media-trix: New book confirms we live in a propaganda state

Monday, 11 February 2008

 

“On the morning of 9 February 2004, The New York Times carried an exclusive and alarming story. The paper’s Baghdad correspondent, Dexter Filkins, reported that US officials had obtained a 17-page letter, believed to have been written by the notorious terrorist Abu Musab al Zarqawi to the “inner circle” of al-Qa’ida’s leadership, urging them to accept that the best way to beat US forces in Iraq was effectively to start a civil war.

The letter argued that al-Qa’ida, which is a Sunni network, should attack the Shia population of Iraq: “It is the only way to prolong the duration of the fight between the infidels and us. If we succeed in dragging them into a sectarian war, this will awaken the sleepy Sunnis.”

Later that day, at a regular US press briefing in Baghdad, US General Mark Kimmitt dealt with a string of questions about The New York Times report: “We believe the report and the document is credible, and we take the report seriously… It is clearly a plan on the part of outsiders to come in to this country and spark civil war, create sectarian violence, try to expose fissures in this society.” The story went on to news agency wires and, within 24 hours, it was running around the world.

There is very good reason to believe that that letter was a fake – and a significant one because there is equally good reason to believe that it was one product among many from a new machinery of propaganda which has been created by the United States and its allies since the terrorist attacks of September 2001.

For the first time in human history, there is a concerted strategy to manipulate global perception. And the mass media are operating as its compliant assistants, failing both to resist it and to expose it.

The sheer ease with which this machinery has been able to do its work reflects a creeping structural weakness which now afflicts the production of our news. I’ve spent the last two years researching a book about falsehood, distortion and propaganda in the global media.

The “Zarqawi letter” which made it on to the front page of The New York Times in February 2004 was one of a sequence of highly suspect documents which were said to have been written either by or to Zarqawi and which were fed into news media.

This material is being generated, in part, by intelligence agencies who continue to work without effective oversight; and also by a new and essentially benign structure of “strategic communications” which was originally designed by doves in the Pentagon and Nato who wanted to use subtle and non-violent tactics to deal with Islamist terrorism but whose efforts are poorly regulated and badly supervised with the result that some of its practitioners are breaking loose and engaging in the black arts of propaganda.

Like the new propaganda machine as a whole, the Zarqawi story was born in the high tension after the attacks of September 2001. At that time, he was a painful thorn in the side of the Jordanian authorities, an Islamist radical who was determined to overthrow the royal family. But he was nothing to do with al-Q’aida. Indeed, he had specifically rejected attempts by Bin Laden to recruit him, because he was not interested in targeting the West.

Nevertheless, when US intelligence battered on the doors of allied governments in search of information about al-Q’aida, the Jordanian authorities – anxious to please the Americans and perhaps keen to make life more difficult for their native enemy – threw up his name along with other suspects. Soon he started to show up as a minor figure in US news stories – stories which were factually weak, often contradictory and already using the Jordanians as a tool of political convenience.

Then, on 7 October 2002, for the first time, somebody referred to him on the record. In a nationally televised speech in Cincinnati, President George Bush spoke of “high-level contacts” between al-Q’aida and Iraq and said: “Some al-Q’aida leaders who fled Afghanistan, went to Iraq. These include one very senior al-Q’aida leader who received medical treatment in Baghdad this year, and who has been associated with planning for chemical and biological attacks.”

This coincided with a crucial vote in Congress in which the president was seeking authority to use military force against Iraq. Bush never named the man he was referring to but, as the Los Angeles Times among many others soon reported: “In a speech [on] Monday, Bush referred to a senior member of al-Q’aida who received medical treatment in Iraq. US officials said yesterday that was Abu al Musab Zarqawi, a Jordanian, who lost a leg during the US war in Afghanistan.”

Even now, Zarqawi was a footnote, not a headline, but the flow of stories about him finally broke through and flooded the global media on 5 February 2003, when the Secretary of State, Colin Powell, addressed the UN Security Council, arguing that Iraq must be invaded: first, to stop its development of weapons of mass destruction; and second, to break its ties with al-Q’aida.

Powell claimed that “Iraq today harbours a deadly terrorist network headed by Abu Musab al Zarqawi”; that Zarqawi’s base in Iraq was a camp for “poison and explosive training”; that he was “an associate and collaborator of Osama bin Laden and his al-Q’aida lieutenants”; that he “fought in the Afghan war more than a decade ago”; that “Zarqawi and his network have plotted terrorist actions against countries, including France, Britain, Spain, Italy, Germany and Russia”.

Courtesy of post-war Senate intelligence inquiries; evidence disclosed in several European trials; and the courageous work of a handful of journalists who broke away from the pack, we now know that every single one of those statements was entirely false. But that didn’t matter: it was a big story. News organisations sucked it in and regurgitated it for their trusting consumers.

So, who exactly is producing fiction for the media? Who wrote the Zarqawi letters? Who created the fantasy story about Osama bin Laden using a network of subterranean bases in Afghanistan, complete with offices, dormitories, arms depots, electricity and ventilation systems? Who fed the media with tales of the Taliban leader, Mullah Omar, suffering brain seizures and sitting in stationery cars turning the wheel and making a noise like an engine? Who came up with the idea that Iranian ayatollahs have been encouraging sex with animals and girls of only nine?

Some of this comes from freelance political agitators. It was an Iranian opposition group, for example, which was behind the story that President Mahmoud Ahmadinejad was jailing people for texting each other jokes about him. And notoriously it was Iraqi exiles who supplied the global media with a dirty stream of disinformation about Saddam Hussein.

But clearly a great deal of this carries the fingerprints of officialdom. The Pentagon has now designated “information operations” as its fifth “core competency” alongside land, sea, air and special forces. Since October 2006, every brigade, division and corps in the US military has had its own “psyop” element producing output for local media. This military activity is linked to the State Department’s campaign of “public diplomacy” which includes funding radio stations and news websites. In Britain, the Directorate of Targeting and Information Operations in the Ministry of Defence works with specialists from 15 UK psyops, based at the Defence Intelligence and Security School at Chicksands in Bedfordshire.

In the case of British intelligence, you can see this combination of reckless propaganda and failure of oversight at work in the case of Operation Mass Appeal. This was exposed by the former UN arms inspector Scott Ritter, who describes in his book, Iraq Confidential, how, in London in June 1998, he was introduced to two “black propaganda specialists” from MI6 who wanted him to give them material which they could spread through “editors and writers who work with us from time to time”.

In interviews for Flat Earth News, Ritter described how, between December 1997 and June 1998, he had three meetings with MI6 officers who wanted him to give them raw intelligence reports on Iraqi arms procurement. The significance of these reports was that they were all unconfirmed and so none was being used in assessing Iraqi activity. Yet MI6 was happy to use them to plant stories in the media. Beyond that, there is worrying evidence that, when Lord Butler asked MI6 about this during his inquiry into intelligence around the invasion of Iraq, MI6 lied to him.

Ultimately, the US has run into trouble with its propaganda in Iraq, particularly with its use of the Zarqawi story. In May 2006, when yet another of his alleged letters was handed out to reporters in the Combined Press Information Centre in Baghdad, finally it was widely regarded as suspect and ignored by just about every single media outlet.

Arguably, even worse than this loss of credibility, according to British defence sources, the US campaign on Zarqawi eventually succeeded in creating its own reality. By elevating him from his position as one fighter among a mass of conflicting groups, the US campaign to “villainise Zarqawi” glamorised him with its enemy audience, making it easier for him to raise funds, to attract “unsponsored” foreign fighters, to make alliances with Sunni Iraqis and to score huge impact with his own media manoeuvres. Finally, in December 2004, Osama bin Laden gave in to this constructed reality, buried his differences with the Jordanian and declared him the leader of al-Q’aida’s resistance to the American occupation.”

More at the Independent confirming the thesis of “The Language of Empire” — some 3 years after I first wrote it….

This was the same Al Zarqawi who was supposed to be the master- mind behind the Nick Berg killing.

Check out Language of Empire on this site..

Drinking from a poisoned well: Bernanke and Dumbledore…

“At some point, all the losses—both for borrowers and lenders—are going to be ‘socialised,’ i.e. foisted off on American taxpayers. We’re just not sure what the mechanism is going to be. For some reason it brings to mind a scene in the Harry Potter books where Dumbledore is forced to drink a well-full of poison in order to reach a treasured item at the bottom. The poison nearly kills him. But someone had to do it. Ben Bernanke’s beard is shorter than Dumbledore’s…but he sure could use some magic right now…”

More here

by Dan Denning, editor of Strategic Investments, and author of the idea-packed best-seller, The Bull Hunter, in the Daily Reckoning, Australia.

Colonies: Romance versus reality….

The recent PBS documentary “Pocahontas Revealed” – on TV tonight – rewrites the romantic Disney version, as this interview with historian David Silverman of George Washington University shows.

“In Disney’s recent version of the Pocahontas story, as in countless iterations before it, John Smith appears as a dashing romantic hero, smitten by the Indian “princess.” Their relationship symbolizes the bridging of two cultures, and more particularly, shows how Indians could enlighten Europeans to the wisdom of the natural world. It’s a fantasy that appeals to Americans today in part, perhaps, because it obscures an ugly truth: the relationship between Smith and Pocahontas, and more broadly between the Jamestown colonists and Pocahontas’s people, was one of betrayal and dashed hopes, as this interview with historian David Silverman of George Washington University makes clear.

Q: Why did John Smith and his English compatriots journey to Chesapeake Bay in 1607?

David Silverman: The first Jamestown colonists were fundamentally part of a business venture, a venture designed to produce wealth for its investors. What form that wealth would take they weren’t sure. The Spanish example in South America and Central America taught the English that around the next corner, in the American interior, might be a great Indian empire rich in gold and silver. But the colonists also had more modest goals: perhaps they might find iron or copper, or they could grow crops like citrus fruits. They also wanted to find a waterway that would give them an easy passage to Asia and all of its riches in the form of porcelain, silks, and spices.

Q: When the colonists first landed, what was foremost on their minds, finding riches or finding a way to sustain themselves?

Silverman: The main directive they had was to find wealth. Now, how to do that while also sustaining the colony was the great question. They expected to raise some amount of food, but they didn’t expect this colony to be entirely self-sufficient, not in its first years. The Spanish model and the English example of Roanoke in the 1580s, even though that colony failed, taught that Europeans might depend upon native people for sustenance. And indeed, that’s the strategy they intended to follow.

Q: How much did they know about the Powhatan people before they arrived?

Silverman: Europeans had been exploring the North American Atlantic coast for the better part of a century before the founding of Jamestown. So the English had information about native people on the coast: about how their polities were organized, about their economies, about what they would trade for European goods. What they didn’t know was what Indians were like in the interior. Was there [something like] an Inca kingdom in the interior? They desperately wanted to know that.

Q: What were the Indians’ preconceptions about the English?

Silverman: The Indians knew two big things through their previous experience with Europeans. The first was, these people were potentially very dangerous, very treacherous. They were armed to the teeth. They could turn on native people in the blink of an eye and for reasons that the natives couldn’t fathom.

But secondly, these English possessed goods that the natives craved. Now, some of these goods were things that we might consider bobbles and beads, worthless trinkets, ribbons, and the like. But there were other items, too, that could vastly improve their quality of life: metal cutting tools, axes and swords, awls and scissors, metal needles (which were a radical improvement over the bone needles or stone needles that native peoples used), brightly colored cloth, metal kettles that native women could place directly over the fire—quite unlike their own clay or wooden pots. And so even though they knew the English were dangerous, the Indians were drawn to them.

[Editor’s Note: The Indian people the Jamestown colonists encountered were known by the same name as their chief, Powhatan.]

Q: According to John Smith’s account of the famous event—when Pocahontas allegedly rescued him from execution—her father, Powhatan, let Smith live but also expected something in exchange. What was it?

Silverman: John Smith thought, and I believe he was right, that Powhatan spared his life because Smith was more valuable to him alive than dead. Powhatan wanted Smith to broker trade relations between the English and the Powhatan people.

Q: And was Pocahontas a part of this decision?

Silverman: If John Smith’s account, written in the 1620s, can be believed, Pocahontas was at the center of her father’s decision to spare his life and then to set him up as a cultural broker, as a trade broker between the Indian and English communities.

Q: Several historians now see what took place between Powhatan and Smith in terms of an adoption. What would Powhatan’s perception of this adoption have been?

Silverman: We know that Powhatan called Smith “son” after freeing him from captivity at Werowocomoco. Well, what would a son’s responsibilities have been to his father? First and foremost, to provide reciprocal hospitality, meaning that Indian visitors to Jamestown, just like English visitors to the Indian communities, would receive food, lodging, and good treatment. It meant that these visitors would leave their weapons outside the village boundaries. The Indians would say that kin don’t need to guard one another against kin.

Secondly, family members provide for one another’s needs. How do you do that? Through trade would have been the Indian answer. The Indians would provide the English with food and military protection, and the English would provide the Indians with what they needed: copper, bells, beads, cloth. And over and over and over again, the Indians asked for weapons.

Q: How did Smith fare as a son?

Silverman: Initially, Smith fulfilled Powhatan’s expectations in terms of brokering trade. But he fell short of Powhatan’s expectations as a son in several respects. First, Powhatan essentially ordered Smith to move Jamestown to a new site within Powhatan’s dominions, where the English could be kept under closer watch. Smith refused to do this. Powhatan also expected Smith’s community to be subordinate to his, to be subject to his rule, and probably to pay him tribute. They did not. Smith was willing to set up a relationship of rough equality while Jamestown got its footing, but Smith’s plan was for the English to seize the superior position as soon as they could.

And thirdly—and I’m basing this opinion on inference, on what we know about other native peoples—Powhatan might have expected intermarriage. Marriage between the groups, and the production of mixed children, would give them a mutual interest in keeping the peace and ensuring prosperity. If the Powhatan Indians did indeed expect large-scale intermarriage between peoples or even just between the elites of both communities, they were sorely disappointed.

Q: What happens to John Smith after he is released and returns to Jamestown?

Silverman: John Smith returns from his captivity in Werowocomoco. He has a large native escort. He has set up relations between Jamestown and the Powhatan chief. He has set up the basis for trade relations. These are remarkable accomplishments. So what does he receive for his efforts? He’s clapped in jail. Why? For his mismanagement of the venture that got him captured in the first place. Moreover, the leaders of Jamestown suspect he is trying to set himself up as the supreme leader through his alliance with the Powhatans.

Q: So he came back with a threatening power?

Silverman: The English leadership deeply feared that John Smith would try to set himself up as the dictator of Jamestown by manipulating Indian military strength.

Q: But after a short time, Smith’s let out. And then comes what has been described as a “golden interlude” of peace. Is that right?

Silverman: The period of several months after Smith’s return to Jamestown has often been called a golden age in English-Indian relations. I think the term is vastly overstated, but there was a steady if uneasy peace. Trade was taking place during this time. Indians were coming and going from Jamestown on a fairly routine basis. And one of those Indian visitors was Pocahontas herself. She would show up at Jamestown, sometimes as part of official Indian delegations, sometimes just to visit, perhaps to visit John Smith.

Q: So here’s the inevitable question: What was the nature of their relationship?

Silverman: Well, we do know that there was a relationship between John Smith and Pocahontas. We know that she was present at Jamestown at least several times in the months after John Smith’s return from Powhatan captivity. She shows up in a Powhatan word list, a list of phrases that Smith compiled. But what was the nature of their relationship? Was it romantic? Unlikely, but we can’t be sure. Some colonists suspected that it might be romantic. Was it political? Absolutely. We know that John Smith wanted to take the lead in English relations with the Indians, and Pocahontas was one of his allies, it would appear, in that effort. Did Pocahontas view John Smith as a relative? Perhaps. Her father called John Smith “son,” and so the implication is that he was like her brother.

We also know that Pocahontas was a special kind of person. She did not abide by the normal rules set up for a teenage Indian girl during this period. Here she is, in a potentially hostile environment, in a fort of foreigners populated almost exclusively by men in their late teens and early twenties, armed to the teeth, with a history of engaging in hostilities with native people. Yet there she is, with or maybe even without her father’s permission and knowledge. We know that she accompanied and perhaps even headed up Indian delegations to the English to bring them food and eventually to free Indian captives being held at Jamestown fort. And she was her father’s favorite. She was a special person: bold, vivacious, obviously very, very smart, and savvy in intercultural relations.

Q: Why did the Indians stop trading food to the English?

Silverman: There are two points of stress. First, the English had traded so much copper to the Indians that the Indians were now unwilling to trade plentiful amounts of food for small bits of copper, like they once did. The second point of stress was that the English arrived in Virginia in the midst of a serious, serious drought unlike any that had been seen by generations of Indians. The Indians simply didn’t have enough of a surplus of corn, beans, and squash to trade to the English and feed themselves at the same time.

Now, the Indians were willing to trade their corn for one item: over and over and over again they demanded weapons—swords and firearms—something John Smith in particular and the English generally were unwilling to provide.

Q: What is Smith’s response to the food supply drying up?

Silverman: Smith’s primary response is to seize that food, to force the natives to trade at gunpoint, and if the natives won’t trade, to attack native villages and simply take what he and the English want. So we find armed English military expeditions to native communities, which are resulting in bloodshed and the rather ironic development of the English burning down cornfields after they’ve taken all the food they can carry away.

Q: Were they burning down the villages too?

Silverman: Sometimes. What we have, in essence, are the beginning stages of a war.

Q: But in the midst of this warfare, Smith records that Pocahontas actually acts to save his life, is that right?

Silverman: Yes. Among the strong-armed efforts to force the Indians to trade food was an English expedition to Werowocomoco. The Indians, as usual, insisted the English leave their weapons at the edge of the village, which the English were unwilling to do. In the midst of negotiations, all of a sudden Chief Powhatan disappeared. The English were fairly certain they were about to come under attack. And indeed, Pocahontas herself, according to John Smith, came and gave him a warning that he and his men were in peril. And so the English beat a hasty retreat.

Q: But why would she do that?

Silverman: We simply can’t know Pocahontas’s intent. Now, it might very well be that she empathized with the English, that she had feelings toward Smith and didn’t want to see him die. It also might be that this was an act of political theater in which Powhatan sent Pocahontas to give what amounted to a warning to the English, to say, “If I wanted to cut you off I could. Reform your behavior. Act the way I expect you to act.” Such warnings are consistent with Indian ways of diplomacy and war. We have contradictory signals; we can’t sort them out through the meager historical record.

Q: Then what horrible thing happens to Smith?Silverman: Well, essentially a keg of gunpowder lying between his legs explodes.

Q: Talk about excruciating pain.

Silverman: Yes, excruciating pain, absolutely.

Q: And was it an accident?

Silverman: Contemporaries said that this explosion was an accident, and yet there are conspicuous hints that suggest it was deliberate, that someone within the English community was trying to kill or to hurt Smith and remove him from power. We do know that the rivalry between John Smith and other English elites at Jamestown was at an absolute pitch during this time. Smith, always bold, was being even more aggressive at trying to dictate English-Indian policy. And suddenly, this explosion occurs, and Smith’s forced to return home.

Q: So it’s safe to say that some people were happy to see him go.

Silverman: More than a few Englishmen were happy to see John Smith go. They didn’t like his overbearing manner, his rising above his class station in life. Now he was gone, and yet the Indians and the English needed him to serve as an ambassador between their communities more than ever.

Q: What is Pocahontas told?

Silverman: Pocahontas is not told that John Smith is injured and is going back to England to recover; she is told that Smith is dead.

Q: What then happens to the colonists?

Silverman: The English enter a severe period of starvation in which they lose most of their numbers. Almost everyone at Jamestown is sick. They’re malnourished. They’re coming down with a variety of diseases, including dysentery and salt poisoning. And they’re psychologically depressed. They’re under intermittent siege by native people whom they deeply, deeply fear. They feel isolated. They feel at risk. And they turn inward, almost collapsing upon themselves, and they refuse to do the basic functions that people need to perform in order to survive.

Q: But the colony does survive. Some years pass. Pocahontas is captured. Can you jump us ahead to that point?

Silverman: In April of 1613, the English capture Pocahontas and hold her as a bargaining chip in their diplomacy with Powhatan, offering to return her in exchange for peace. Over and over again the Powhatan chief rebuffs them. He might have been thinking that Pocahontas could learn their ways, learn their language, cultivate their leaders, and try to broker a truce between the peoples. If that was his strategy, it was a very, very savvy one, because that’s exactly how things played out.

During her captivity at Jamestown, Pocahontas falls in love with an English settler, John Rolfe. Was this coincidence or was it strategy? It’s hard to know. What we do know is that the marriage between Pocahontas and John Rolfe is a key step in establishing an uneasy truce between the Powhatan and English peoples in early Virginia.

Q: A few years later, Pocahontas travels with Rolfe to England. What does she find out about John Smith?

Silverman: Among the shocks that Pocahontas receives while visiting England in 1616 is that John Smith, whom she had been told was dead, is indeed alive and well. It crushed her to learn this news. It crushed her not only that the English had been lying to her all along but that John Smith, a man with whom she had a personal relationship of some sort or another, had done absolutely nothing to contact her, to contact her people, to contact her father, who called Smith his son.

Q: Can you imagine how she would have felt when she finally met Smith?

Silverman: However Pocahontas was feeling when she finally saw John Smith—whatever heartache she was feeling, whatever fury she was feeling—she behaved with dignity. She reminds him that her father called Smith “son.” And the implication is, “We were supposed to be like family. We were responsible for one another.” The implication is, “Do you know what has been happening back in Virginia to my people by your people since you left?” The implication is that Smith could have made a difference and did not.

Q: Why is the story of Smith and Pocahontas of profound importance to us, to American history?

Silverman: The Pocahontas story, the Pocahontas myth, has traditionally been told to make Americans feel better about the evils of colonization. Pocahontas seemed to acquiesce to English colonization, to willingly adopt Christianity and “civility.” But I think the larger lesson of Pocahontas’s life and her experience with Smith and the English is that there was a potential in the early relationships between Indians and colonists to set up something mutual. To set up, as the Indians would have it, a relationship of kin in which the two peoples help to meet each other’s needs and live as a single people.

Those expectations were sorely dashed. They were sorely dashed in the mind of Pocahontas, sorely dashed for the Powhatans, and sorely dashed for Indian peoples across the continent over the course of three centuries of colonization by European powers in the United States. That’s the basic lesson of the Pocahontas story and the story of early Jamestown.”

If he only had a heart: Cheney’s battery runs down…

FOX is reporting that Cheney’s been diagnosed with a heart condition called atrial fibrillation that may require electroshock treatment shortly.

This isn’t major, but the Veeps’ on blood thinners, and he’s had “four heart attacks, quadruple bypass surgery, two artery-clearing angioplasties and an operation to implant a defibrillator six years ago. In July he had surgery to replace the defibrillator…..

“The type of defibrillator Cheney has is used to prevent sudden death from a very different type of irregular heartbeat that starts in the bottom of the heart. The atrial fibrillation, in contrast, requires a different type of treatment.

In 2005, Cheney had six hours of surgery on his legs to repair a kind of aneurysm, a ballooning weak spot in an artery that can burst if left untreated. In March, doctors discovered that he had a deep venous thrombosis in his left lower leg.”

More from AP.