Welcometothe3rdworld

Obama's Banking Dictatorship ..The Fed (Infowars)

2009-06-19T10:44:00.000-07:00

President Obama’s plan to give the privately-owned and unaccountable Federal Reserve complete regulatory oversight across the entire U.S. economy, which is likely to be enacted before the end of the year, will officially herald the beginning of a new form of government in the United States - an ultra-powerful banking dictatorship controlled by a small gaggle of shadowy and corrupt elitists.

The new rules would see the Fed given the authority to “regulate” any company whose activity it believes could threaten the economy and the markets.

This goes a step further than the centrally planned economies of the Soviet Union or Communist China, in that the Federal Reserve is not even accountable to the U.S. government, it is a private entity that according to former Fed chairman Alan Greenspan, is accountable to nobody but the banking families that own it.

Obama’s regulatory “reform” plan is nothing less than a green light for the complete and total takeover of the United States by a private banking cartel that will usurp the power of existing regulatory bodies, who are now being blamed for the financial crisis in order that their status can be abolished and their roles handed over to the all-powerful Fed.

According to an Associated Press report today, Democratic leaders have committed to enacting the plan before the end of the year and Republicans in both the House and Senate have indicated that they won’t stand in the way of the overhaul.

“The final plan….is expected to sidestep most jurisdictional disputes and simply impose across the board standards to be applied by all financial regulators, according to administration and industry sources, ” reports the Washington Times.

In other words, the Fed, which is already totally unaccountable to Congress, is to be placed in complete control of the entirety of the U.S. financial system, to do as it wishes without repercussion.

As the LA Times reports, the government, in conjunction with the private Federal Reserve, would effectively have the clout to simply seize and take over any company it desires.

In order to appease those opposed to the plan, such as Sen. Christopher J. Dodd, chairman of the Committee on Banking, Housing and Urban Affairs, the Obama administration has agreed to create a “watchdog” council of regulators to “advise the Fed”.

However, as former chairman Alan Greenspan has most recently pointed out, given that the Fed is an independent entity, and therefore accountable to no one, it will have the power to simply reject and overrule any advice it is offered.

Pointing out the flagrant conflict of interest in empowering the Federal Reserve to essentially regulate itself, Professor of public affairs at the University of Texas at Austin Robert Auerbach writes, “The Federal Reserve has massive conflicts of interest that make it ill suited for its present regulatory functions and certainly for an expanded regulatory reach. The officials leading the Fed today preside over an organization that is run in substantial part by the bankers they regulate. Bank regulation begins at its 12 district Federal Reserve Banks, each governed by a nine-member board of directors, two-thirds of whom are elected by the bankers in the district.”

As economic author Nomi Prins highlights, Obama’s plan does nothing whatsoever to fix the excesses of financial institutions blamed for the financial collapse, it only ensures their continued operation and an expansion of the practices that contributed to the economic crisis in the first place.

“The ’sweeping overhaul’ of the financial system detailed by Geithner on behalf of the Obama administration does not overhaul the system at all,” writes Prins, “giving the Fed a bigger role, creating a ‘council of regulators’ to oversee the existing oversight bodies and allowing the biggest Wall Street players to maintain their status, leaves the system intact.”

“The Federal Reserve is not a fully public entity. It has amassed a set of $7.87 trillion worth of facilities and other entities through which it has lavished cheap loans in return for questionable collateral from the banking system. It has kept the true nature of these transactions a secret despite numerous FOIA requests. And, it has actively promoted the creation of bigger institutions in a chaotic environment, rather than putting the brakes on the creation of these giants,” concludes Prins.

Proof that the agenda of implementing overt financial dictatorship is being carefully coordinated can be seen in the fact that an almost identical scheme is also being set up in the United Kingdom, where “The governor of the Bank of England has called for greater powers to allow it to fulfil its new role of promoting financial stability,” according to a BBC report.

* A d v e r t i s e m e n t
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Just as in the U.S., King is calling for traditional independent regulatory bodies to be all but abolished and replaced by the Bank of England itself, which just like the Federal Reserve is a private outfit with no accountability to the government whatsoever.

The mainstream media, for the most part, has reported the oversight plan as a much needed regulatory crackdown on those responsible for the financial crisis. However, the details of the plan constitute almost exactly what lobbyists for leading bankers have been pushing for over the past few weeks.

“All derivatives contracts will be subject to regulation and all derivatives dealers subject to supervision,” Treasury Secretary Timothy F. Geithner said at a Time Warner Economic Summit in New York on Monday, also noting “When you have too many people involved, there’s an accountability problem.”

As we reported earlier this month, heads of nine of the biggest banks in the derivatives market, including JP Morgan Chase, Goldman Sachs, Citigroup and Bank of America, secretly lobbied to keep derivatives under Federal Reserve “oversight” and away from real scrutiny.

As reported by The New York Times, they all met secretly to discuss how to use the lax regulation and institutional secrecy of the NY Fed to shield their credit-default swaps business from prying eyes and attempts at regulation.

The banks formed a lobby– the CDS Dealers Consortium– only weeks after accepting TARP funds in October 2008 to protect its interests. Heading this effort was Edward Rosen, who previously helped fend off derivatives regulation. Rosen wrote and circulated a “confidential memo” to the Treasury Department and leaders on Capital Hill, making their agenda clear, the Times reported.

Rosen and his backers propose that derivatives be “traded in privately managed clearinghouses, with less disclosure,” according to the Times. The clearinghouse of choice for the big banks in Rosen’s CDS Consortium is ICE U.S. Trust, which is in turned regulated only by the Federal Reserve system.

So the upshot of all this is that the bankers get what they want, are allowed to carry on as they were, while at the same time the fractional reserve banking system and the federal government are both greatly expanded and empowered, and the compliant corporate media ludicrously tells us that a strict crackdown is underway.

This kind of activity is exactly what some leading representatives have warned of in recent weeks.

A fortnight ago, the Democratic Chairman of the Agriculture Committee, Collin Peterson, announced to the press that “The banks run the place,” in reference to the US Congress.

While Peterson is also pushing for legislation to regulate derivatives trading, his proposed bill would limit derivatives trading to public exchanges, rather than private clearinghouses, which are managed by banks.

Peterson’s warning mirrors that of Democratic Senator Dick Durbin, who just a few weeks before uttered the same rarely acknowledged truth.

“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” Durbin said.

How simultaneously dangerous and ridiculous it is that the Federal Reserve is given more authority to oversee the economy. This is the same privately run entity that refused to comply with congressional demands for transparency and disclose the destination of trillions dollars in bailout funds. It is the same privately owned entity that has withheld internal memos, in spite of freedom of information act requests. It is the same private entity, run for the most part by European banking elites, that has arrogantly refused to tell Senators and Congressmen which banks were in receipt of government loans.

The government is ready to hand over everything to a monolithic private corporation and a gaggle of bastard banker offspring, that have gobbled up an amount close to the entire GDP of the country in taxpayers’ money and figuratively stuck the middle finger up regarding questions over where that money has gone.

It can be no more apparent than at this time that legislation to audit, repeal and eventually end the Federal Reserve, must be supported by Americans if they want to see their children and their grandchildren grow up without indentured debt and entrenched servitude to a fascistic marriage of private banks and hugely inflated government.

Strange Trails in the Sky, Sky King Adventure Episode 2

2009-06-06T14:32:00.000-07:00

Take it Back (Song)

2009-06-03T16:21:00.001-07:00

Even the Russians Think We're Going Red

2009-05-30T11:24:00.000-07:00

American capitalism gone with a whimper

27.04.2009 Source: Pravda.Ru URL: http://english.pravda.ru/opinion/columnists/107459-american_capitalism-0

It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.

True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists.

Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.

First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their "right" to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our "democracy". Pride blind the foolish.

Then their faith in God was destroyed, until their churches, all tens of thousands of different "branches and denominations" were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the "winning" side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the "winning" side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America.

The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America's short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.

These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?

These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties and powers of the American congress (parliament). Again, congress has put up little more then a whimper to their masters.

Then came Barack Obama's command that GM's (General Motor) president step down from leadership of his company. That is correct, dear reader, in the land of "pure" free markets, the American president now has the power, the self given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions.

So it should be no surprise, that the American president has followed this up with a "bold" move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK's Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our "wise" Anglo-Saxon fools find out the folly of their own pride.

Again, the American public has taken this with barely a whimper...but a "freeman" whimper.

So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set "fair" maximum salaries, evaluate performance and control how private companies give out pay raises and bonuses? Senator Barney Franks, a social pervert basking in his homosexuality (of course, amongst the modern, enlightened American societal norm, as well as that of the general West, homosexuality is not only not a looked down upon life choice, but is often praised as a virtue) and his Marxist enlightenment, has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive.

The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left.

The proud American will go down into his slavery with out a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.

Stanislav Mishin

The article has been reprinted with the kind permission from the author and originally appears on his blog, Mat Rodina

Watching Freedom Die

2009-05-17T18:46:00.001-07:00

HOW MUCH TIME DO WE HAVE?

2009-05-12T10:00:00.000-07:00

A good doctor is one who will tell his patient what ails him, no matter how bad the news... A good doctor begins by making a correct diagnosis of his patient's condition. A bad doctor, however, either cannot make a proper diagnosis (because he lacks expertise) or, worst still, he hides the truth afrom his patient...

When a dread disease patient is told what he is suffering from, before actually accepting the envitable he first goes through the stages of disbelief and denial. There's disbelief when we hear the patient say "this is not right: the doctor's made a mistake!". But when the dignosis of his illness is confirmed, then in dispair he goes info full denial saying "Impossible! This can't be happening to me!!".

A good doctor helps his patient weather this painful process, guiding him towards acceptance of his predicament. Only then can the healing begin. Something similar happens - albeit more abstractly -, when the People are hit by social turmoil as a consequence of severe crises arising from what Carl G. Jung called "epidemics of the mind and soul".

Below, we address some key issues that we feel reflect the fact that a cycle is coming to an increasingly abrupt end in the whole world, even though the global media may be looking the other way (i.e., hiding the truth and generating smoke screens), most politicians hardly understand what is going on (on account of their ignorance), the bulk of the population in all countries see and feel this but cannot rationalize what's happening (disbelief), and some intelectuals may actually understand what's going on and where we're being dragged, but find it too hard to accept (i.e., denial).

In our communiqué No. 52 of October 3, 2008 dealing with the Global Financial "crisis" that had then just broken out, we said that there was no such "crisis". Rather, what began Monday, September 15, 2008 was the beginning of a terminal and irreversible collapse of the global financial system, which is part of a controlled Model through which other objetives will be achieved. Those objective go far beyond merely financial goals: rather, they seek to advance towards the next geopolitical stage in the "New World Order" (NWO). And this is nothing more and nothing less than the enthronement of a WORLD GOVERNMENT. At that time, we also described the NWO Elite's three basic "Plans", i.e.,:

- Plan "A" seeks to resolve the on-going financial "crisis" through merely financial measures. It's not working....
- Plan "B" will seek to resolve the "crisis" by a comprehensive overhaul of the global financial system, which among other factors will include introducing a New Dollar, backed by "foolproof" gold bullion. This will allow the global elites to transfer the bulk of Wall Street and European bankers' losses to other geographies (amongst them, China, which is one of the focus of present crisis, as well as Latin America), and
- Plan "C" that will seek to "kick the chessboard", so to speak, triggering a planetary war.

We believe that these three "Plans" are presently in different stages of implementation: Plan "A" is almost dead. Plans "B" and "C" are about to be activated. Let's see where we stand at present....

1) WORLD GOVERNMENT -
First, we must understand that "New World Order (NWO)" is not an actual "stage" in the global political structure but, rather, it's a generic term. Thus, we had several "New World Orders" over the past century:
- in 1919, when World War I ended and the Council on Foreign Relations (New York) and Royal Institute of International Affairs (London) were created, as geopolitical controlling and planning organizations bent on promoting Anglo-American-Zionist interests throughout the world.
- in 1945, when the Post-World War II Bipolar World was designed: i.e., Bretton Woods, Yalta, the UN, the "cold war".
- in 1991, after the USSR was thrown into the dust bin of History to make way for NWO "globalization", as announced by George HW Bush, Sr. (on 11-Sept.-1991!), and
- in 2008, when now ambiguous and dying "globalization" begins phasing out, to be replaced by something far more ambitous: an authoritarian and mandatory World Government, as announced in the London "Financial Times" on December8, 2008 by Gideon Rachman.

Today we are undergoing the violent stage just prior to imposition of World Government. Amongst its goals:
- Disolution and destruction of all National Sovereignties (the demise of the Nation-State promoted by the CFR, Trilateral and Bilderbergers)
- The Twilight of the United States of America as the "indispensable" superpower (ergo, Obama was allowed into the Oval Office)
- Drastic depopulation of the world (pendemic hysteria)
- Total electronic surveillance and control of surviving citizenry (Psywar drills that increasingly lower people's resistance to inocculation), and
- Monolithic centralization and strict comprehensive control over politics, the economy, finance, the military, culture, the media, technology and even religious activities.
All of this CANNOT be achieved without war. Thus, Plan "C" has just been activated.

2) CONFRONTATION WITH RUSSIA AND CHINA -
Over the past months, China has been looking at the US and the Wall Street parasites with an increasingly fixed and unblinking gaze...
They want to know what is going to happen with the 1.7 Trillion Dollar-denominated Reserves that they are holding on to (some Washington observers call this "The Chinese Nuclear Bomb"). The US is not answering because they simply don't have any answer to give...
Were China to make a "strong move" (such as changing their US Dollar-denominated Reserves into Euros on very short notice), the effect would lead to the collapse the US Dollar (for this Contingency they have Plan "B" as described).
Actually, one of the main sources of financing of American public deficits is, in fact, China which until recently had been soaking up huge tranches of American Public Debt (today these needs are running as high as u$s 170 billion a week!!).
The recent mysterious fly-over of Air Force One, low over Manhattan in New York City, triggering panic and the evacuation of the World Financial Center and other Manhattan skyscrapers, seems to be linked to this: it appears that Obama and some from his team had decided to meet with Trustees and representatives from China and other foreign powers to try to reach some agreement/solution. But Obama did not properly consult with "those upstairs who have the final say", who then decided otherwise and ordered Air Force One to land in Washington DC, doing that with a more than threaterning demeanor. Fearing the worst, the Air Force One pilot decided to protect his plane by having it "seen by millions" over the skies of New York City, in such a way that the two F16 fighter jets "escorting" him could do nothing "strange" (see the incredible low fly-by videos on YouTube). Later on, the missions of these foreign creditors of the US - Chinese included - were involved in a confussing shoot-out with FBI operatives that left several agents dead...

3) THE ISRAELI DETONATOR -
The State of Israel continues moving forward with its announced plans of unilateral attack on Iran. We have been informing about this for more than two years now. This will be a premeditated, unjustified, unilateral attack perpetrated by the State of Israel, the only country in the Middle East that wields Weapons of Mass Destruction - 400 nuclear artefacts ceded by the US -, and shows an unequivocable willingness to use them. Naturally, their excuse is Iran's nuclear program. The London "Times" newspaper, in its April 18,2009 edition informs that the Israeli Air Force is fully ready to attack and are only waiting to receive the green light from the new ultra-right wing Israeli primer minister Benjamin Netanyahu, his even more ultra-right wing foreign minister Avigdor Lieberman, and the IDF high command (see article "Israel stands ready to bomb Iran's nuclear sites").
THAT will be the trigger for generalized war involving WMD's - biological, chemical and nuclear. Israeli sources say that they will attack Iran with or without the Obama Administration's green light, knowing full well that Zionist power in America is above any Administration, whether Democrat or Republican. Netanyahu will meet with Obama on May 18th. Either way, once Israel attacks and Iran retailiates, the Obama Administration will be FORCED by Zionist power structures in control of the US, to fight for them (see "The Israel Lobby and US Foreign Policy", Stephen Walt & John Mearsheimer). This was just been ratified by "The Daily Telegraph" of 7th May.
Alas, as former Malaysian prime minister Mohamed Mahatir declared in 2003, "Jews rule the world by proxy: they get others to fight and die for them.”

4) GEOPOLITICS FOR A WORLD GOVERNMENT -
This "Israeli Detonator" goes hand in hand with the repositioning of the US military along the lines suggested by Zbigniew Brzezinski's geopolitical strategic thought, which calls for the US detaching from the Iraqui mess and focusing on Afghanistan, Pakistan, the Taliban and the Caspian Sea oil fields. Afghanistan is in a horrific mess, with the Taliban having recovered the better part of that country. Today, they stand a mere 160 kms from Islamabad, in Pakistan, which too is in a horrific crisis. US bombs fall on Afghanistan and Pakistan daily without their puppet governments doing anything about it.
From their respective viewpoints and interests and with varying criteria and levels of alarm, Iran, Russia and China closely observe these threatening maneouvers (supplemented by NATO's dangerous encircling strategy against Russia in Poland and other parts of Europe). The three, however, recognize that they have the same adversaries: The US (for Russia and China), Israel and the US (for Iran). A truly explosive formula, but a necessrary risk for the NWO elite bent on enthroning World Government.
This ought to be a wake-up call for all countries around the world. Red lights should be blinking and alarm bells ringing in every nation, because World Government will not leave any country out; and any country not wanting to "voluntarily join" this World Government geared on US, UK and Israeli global interests, will be automatically branded a "Rogue State", "antidemocratic", "contrary to humanity", "anti-Semitic", and when that happens, we all know what comes next...

5) MORE AND MORE BANKRUPTCIES: UNEMPLOYMENT AND POVERTY FOR MILLIONS OF WORKERS -
US and European banks are bankrupt, many major industries are bankrupt (Chrysler being the latest to fall), global insurers and reinsurers are technically broke, whilst most all financial institutions are technically unsound, at best, and unviable at worst. First World Governments must bail out company after company. Yet more proof that, when left to its own dynamics, Extreme Capitalism leads to a Soviet-like system in which the State takes over corporations ("too large to fail", naturally) and runs the economy to protect the bankster Nomenklatura...
Time and again, we see the same cycle: first come decades of privatizing huge profits which flow straight into the pockets of bankers, "investors", speculators and parasites of all sorts, types and shapes, and then when the whole System comes crashing down as happens now, the ensuing and predictable gigantic losses are socialized by way of government funded bail-outs with taypayer money, and irresponslble money printing to save those who should sit in jail. Everybody else is left high and dry, and on their own.
The US-Dollar has been technically hyperinflated, even though no one is saying "the king is nude!!"... Not yet, anyway...
We now learn that recession in the US, Europe and Asia is "much worse than thought and expected", so say the experts...
Millions loose their jobs and livelihood, millions loose their homes and assets, millions loose their pensions and life's savings, millions start taking to the streets: manifestations, "tea parties"... Social War... Reprisal and repression.

6) FRAUD AND MORE FRAUD -
"Wall Street Inversor" Bernard Madoff (ex-president of NASDAQ y director of Yeshiva Univerrsity in Tel Aviv) has become a symbol of the white collar Banker Mega-fraud which is an integral part of the Extreme Capitalist system (using the Ponzi Scheme Pyramid as its basic model), with his 70 billion dollars stolen from other "investors" (ha!...they now seem to have fallen into a modern version of cannibalism, taking bites amongst themselves..!).
We should, however, be "kinder" to Bernie Madoff because he's taking all the blame and getting all the bad "Ponzi Schemer" headlines, whilst the the truth is that the ENTIRE global financial system is one vast Ponzi pyramid. This is how CitiCorp (William Rhodes, Robert Rubin), Bank of America, Goldman Sachs (Henry Paulson, Timothy Geithner), Morgan Stanley, AIG (Maurice Greenberg) and most all other global banks and insurers operate all the time.
To get a better idea of what's really happening behind the scenes, take a look at Freddie Mac whose recently appointed 41 year old Chief Financial Officer David Kellermann "commited suicide". Russian intelligence sources, however, point to a more credible cause of death linked to the fact that Kellermann appeared to have discovered that Freddie Mac had syphoned over 50 billion dollars to Zionist and Israeli interests and organizations, and he was about to become a whistleblower going public with that explosive information... Bear in mind that when Freddie Mac collapsed late last year, one if its directors was Rahm Emanuel, today president Obama's dual-citizenship (Israeli and US) chief-of-staff, also suspected of being an Israeli Military Intelligence operative.

7) H1N1 SWINE FLU "EPIDEMIC" -
This would seem to be yet another smoke screen imposed on the world media's headlines, in order to keep the above dramatic events as much out of the front pages and newscasts, as possible. So far, there are only around 2000 H1N1 cases globally; of the 160 Mexican deaths originally reported by FoxNews a couple of weeks ago, we are now down to around 30... The same goes for the rest of the world. The media have gone into Hysteria Over-drive, generating what one major risk consultancy has labelled "pandemic hysteria", to the great joy of major Pharmaceutical Labs who are having near record sales of "Tamiflu" and other Influenza medications. The NWO people were also able to test and assess results of their PsyWar Operations, geared on controlling large masses of people by instilling fear, so they can be willingly inocculated. Face masks, quarantines, mass vaccinations, cancelled flights, the whole circus of a global drill... as occured with the Bird Flu scare, back in 2004 and 2005 (whatever became of that??).
At some point, they will no doubt let loose some synthetic "selective" virus which will target increasingly focused social groups and types (was HIV a precursor?), because one of the key objetives of World Government is to trigger intensive depopulation of the world, as recommended by Henry Kissinger's National Security Strategic Memoranum 200, back in 1974.

Finally, the seven issues we address above should not be seen as isolated and unconnected. Rather, they are inter-related and should be viewed holistically, as part of a much vaster strategy geared on imposing World Government, one way or another... Addressing these and other factors jointly, and projecting their medium- and long-term effects will allow us to begin to understand what is really happening in the world; which is a very different story than what we hear on CNN, FoxNews, the BBC, The New York Times, Washington Post, Daily Telegraph, ABC, CBS or NBC...

In short, the key question we must ask should become increasingly obvious to us all, everywhere: How much time do we have left? How much time do we really have in the US, in Europe, in Argentina, in the whole world?

You be the judge... you make your own choice. You can either be a Homer Simpson-like couch potato, zapping on your TV remote control, or... we can all start getting a grip on this whole disaster - no matter where each of us is - and start doing something about it....

Whatever we do, we had better start doing it fast!
Argentine Second Republic Movement

Movimiento por la Segunda República Argentina (MSRA)

Adrian Salbuchi www.asalbuchi.com.ar

---------------------------------------------------------

OUR VIDEOS ARE AVAILABLE IN ENGLISH ON YouTube:

1) Global Meltdown: What We Can and Should Do...
Part One: http://www.youtube.com/watch?v=aj-_YU09NLc
Part Two: http://www.youtube.com/watch?v=zqs5ljEOTvg
2) Obama: Things Are Not Always What They Seem...
Part One: http://www.youtube.com/watch?v=HwkM4Ey4ph0
Part Two: http://www.youtube.com/watch?v=fYXCA2AvHGQ
3) The New World Order: Will It Be World Government?
Part One: http://www.youtube.com/watch?v=dEp1D5hAGO8
Part Two: http://www.youtube.com/watch?v=X4pDIwMukA8

4) The Global Financial Collapse: Planned Implosion Model
Part One: http://www.youtube.com/watch?v=UlDNMB6wYmI
Part Two: http://www.youtube.com/watch?v=78ddURofMWs

Please share this with friends, family and colleagues Contact: msra@fibertel.com.ar

Orwells 1984... Livin the Dream

2009-05-05T20:20:00.000-07:00

Swine Flu History (60 Minutes)from Dr.Carley

2009-05-05T07:13:00.000-07:00

Read this transcript from a 1979 episode of 60 Minutes where Mike
Wallace talks to President Ford, Judy Roberts (injured by the 1976 swine
flu vaccine, paralyzed similar to Gardasil injury) Dr. David Sencer and
others about the Swine Flu vaccine of 1976. Note the admitted lack of
safety and informed consent to the public, even as TV ads frightened
American citizens into getting a shot. Think anything has changed today?

60 MINUTES, Sunday Nov 4, 1979

"SWINE FLU"

MIKE WALLACE: The flu season is upon us. Which type will we worry about
this year, and what kind of shots will we be told to take? Remember the
swine flu scare of 1976? That was the year the U.S. government told us
all that swine flu could turn out to be a killer that could spread
across the nation, and Washington decided that every man, woman and
child in the nation should get a shot to prevent a nation-wide outbreak,
a pandemic.

Well 46 million of us obediently took the shot, and now 4,000 Americans
are claiming damages from Uncle Sam amounting to three and a half
billion dollars because of what happened when they took that shot. By
far the greatest number of the claims - two thirds of them are for
neurological damage, or even death, allegedly triggered by the flu shot.

We pick up the story back in 1976, when the threat posed by the swine
flu virus seemed very real indeed.

PRESIDENT GERALD FORD; This virus was the cause of a pandemic in 1918
and 1919 that resulted in over half a million deaths in the United
States, as well as 20 million deaths around the world.

WALLACE: Thus the U.S. government's publicity machine was cranked into
action to urge all America to protect itself against the swine flu
menace. (Excerpt from TV commercial urging everyone to get a swine flu
shot.) One of those who did roll up her sleeve was Judy Roberts. She was
perfectly healthy, an active woman, when, in November of 1976, she took
her shot. Two weeks later, she says, she began to feel a numbness
starting up her legs.

JUDY ROBERTS: And I joked about it at that time. I said I'll be numb to
the knees by Friday if this keeps up. By the following week, I was
totally paralyzed.

WALLACE: So completely paralyzed, in fact, that they had to operate on
her to enable her to breathe. And for six months, Judy Roberts was a
quadriplegic. The diagnosis: A neurological disorder called
"Guillian-Barre Syndrome" - GBS for short. These neurological diseases
are little understood. They affect people in different ways.

As you can see in these home movies taken by a friend, Judy Roberts'
paralysis confined her mostly to a wheelchair for over a year. But this
disease can even kill. Indeed, there are 300 claims now pending from the
families of GBS victims who died, alledgedly as a result of the swine
flu shot. In other GBS victims, the crippling effects diminish and all
but disappear. But for Judy Roberts, progress back to good health has
been painful and partial.

Now, I notice that your smile, Judy, is a little bit constricted.

ROBERTS: Yes, it is.

WALLACE: Is it different from what it used to be?

ROBERTS: Very different, I have a - a greatly decreased mobility in my
lips. AndI can't drink through a straw on the right-band side. I can't
blow out birthday candles. I don't whistle any more, for which my
husband is grateful.

WALLACE: It may be a little difficult for you to answer this question,
but have you recovered as much as you are going to recover?

ROBERTS: Yes. This - this is it.

WALLACE: So you will now have a legacy of braces on your legs for the
rest of your life?

ROBERTS: Yes. The weakness in my hands will stay and the leg braces will
stay.

WALLACE: So Judy Roberts and her husband have filed a claim against the
U.S. government. They're asking $12 million, though they don't expect to
get nearly that much. Judy, why did you take the flu shot?

ROBERTS: I'd never taken any other flu shots, but I felt like this was
going to be a major epidemic, and the only way to prevent a major
epidemic of a - a really deadly variety of flu was for every body to be
immunized.

WALLACE: Where did this so called "deadly variety of flu", where did it
first hit back in 1976? It began right here at Fort Dix in New Jersey in
January of that year, when a number of recruits began to complain of
respiratory ailments, something like the common cold. An Army doctor
here sent samples of their throat cultures to the New Jersey Public
Health Lab to find our just what kind of bug was going around here. One
of those samples was from a Private David Lewis, who had left his sick
bed to go on a forced march. Private Lewis had collapsed on that march,
and his sergeant had revived him by mouth-to-mouth resuscitation. But
the sergeant showed no signs of illness. A few days later, Private Lewis
died.

ROBERTS: If this disease is so potentially fatal that it's going to kill
a young, healthy man, a middle-aged schoolteacher doesn't have a prayer.

WALLACE: The New Jersey lab identified most of those solders' throat
cultures as the normal kind of flu virus going around that year, but
they could not make out what kind of virus was in the culture from the
dead soldier, and from four others who were sick. So they sent those
cultures to the Federal Center for Disease Control in Atlanta, Georgia,
for further study. A few days later they got the verdict: swine flu. But
that much-publicized outbreak of swine flu at Fort Dix involved only
Private Lewis, who died, and those four other soldiers, who recovered
completely without the swine flu shot.

ROBERTS: If I had known at that time that the boy had been in a sick
bed, got up, went out on a forced march and then collapsed and died, I
would never have taken the shot.

DR DAVID SENCER: The rationale for our recommendation was not on the
basis of the death of a - a single individual, but it was on the basis
that when we do see a change in the characteristics of the influenza
virus, it is a massive public-health problem in the country.

WALLACE: Dr David Sencer, then head of the CDC - the Center of Disease
Control in Atlanta - is now in private industry. He devised the swine
flu program and he pushed it.

You began to give flu shots to the American people in October of '76?

DR SENCER: October 1st.

WALLACE: By that time, how many cases of swine flu around the world had
been reported?

DR SENCER: There had been several reported, but none confirmed. There
had been cases in Australia that were reported by the press, by the news
media. There were cases in -

WALLACE: None confirmed? Did you ever uncover any other outbreaks of
swine flu anywhere in the world?

DR SENCER: No

WALLACE: Now, nearly everyone was to receive a shot in a public health
facility where a doctor might not be present, therefore it was up to the
CDC to come up with some kind of official consent form giving the public
all the information it needed about the swine flu shot. This form stated
that the swine flu vaccine had been tested. What it didn't say was that
after those tests were completed, the scientists developed another
vaccine and that it was the one given to most of the 46 million who took
the shot. That vaccine was called "X-53a". Was X-53a ever field tested?

DR SENCER: I-I can't say. I would have to -

WALLACE: It wasn't

DR SENCER: I don't know

WALLACE: Well, I would think that you're in charge of the program

DR SENCER: 1 would have to check the records. I haven't looked at this
in some time.

WALLACE: The information form the consent form was also supposed to warn
people about any risk of serious complications following the shot. But
did it?

ROBERTS: No, I had never heard of any reactions other than a sore arm,
fever, this sort of thing.

WALLACE: Judy Roberts' husband, Gene, also took the shot.

GENE ROBERTS: Yes, I looked at that document, I signed it. Nothing on
there said I was going to have a heart attack, or I can get Guillain
Barre, which I'd never heard of.

WALLACE: What if people from the government, from the Center for Disease
Control, what if they had indeed, known about it, what would be your
feeling?

JUDY ROBERTS: They should have told us.

WALLACE: Did anyone ever come to you and say, "You know something,
fellows, there's the possibility of neurological damage if you get into
a mass immunization program?"

DR SENCER: No

WALLACE: No one ever did?

DR SENCER: No

WALLACE: Do you know Michael Hattwick?

DR SENCER: Yes, uh-hmm.

WALLACE: Dr Michael Hattwick directed the surveillance team for the
swine flu program at the CDC. His job was to find out what possible
complications could arise from taking the shot and to report his
findings to those in charge. Did you know ahead of time, Dr Hattwick
that there had been case reports of neurological disorders, neurological
illness, apparently associated with the injection of influenza vaccine?

DR MICHAEL HNITWlCK: Absolutely

WALLACE: You did?

DR HATIWICK: Yes

WALLACE: How did you know that?

DR HATrwICK: By review of the literature.

WALLACE: So you told your superiors - the men in charge of the swine flu
immunization program - about the possibility of neurological disorders?

DR RATTWICK: Absolutely

WALLACE: What would you say if I told you that your superiors say that
you never told them about the possibility of neurological complications?

DR HAJTWICK: That's nonsense. I can't believe that they would say that
they did not know that there were neurological illnesses associated with
influenza vaccination. That simply is not true. We did know that.

DR SENCER: I have said that Dr Hattwick had never told me of his
feelings on this subject.

WALLACE: Then he's lying?

DR SENCER: I guess you would have to make that assumption.

WALLACE: Then why does this report from your own agency, dated July
1976, list neurological complications as a possibility?

DR SENCER: I think the consensus of the scientific community was that
the evidence relating neurologic disorders to influenza immunization was
such that they did not feel that this association was a real one.

WALLACE: You didn't feel it was necessary to tell the American people
that information

DR SENCER: I think that over the - the years we have tried to inform the
American people as - as fully as possible.

WALLACE: As part of informing Americans about the swine flu threat, Dr
Sencer's CDC also helped create the advertising to get the public to
take the shot. Let me read to your from one of your own agency's memos
planning the campaign to urge Americans to take the shot. "The swine flu
vaccine has been taken by many important persons," he wrote. "Example:
President Ford, Henry Kissinger, Elton John, Muhammad Ah, Mary Tyler
Moore, Rudolf Nureyev, Walter Cronkite, Ralph Nader, Edward Kennedy"
-etcetera, etcetera, True?

DR SENCER: I'm not familiar with that particular piece of paper, but I
do know that, at least of that group, President Ford did take the
vaccination.

WALLACE: Did you talk to these people beforehand to find out if they
planned to take the shot?

DR SENCER: I did not, no.

WALLACE: Did anybody?

DR SENC ER: I do not know.

WALLACE: Did you get permission to use their names in your campaign?

DR SENCER: I do not know.

WALLACE: Mary, did you take a swine flu shot?

MARY TYLER MOORE: No, I did not.

WALLACE: Did you give them permission to use your name saying that you
had or were going to?

MOORE: Absolutely not. Never did.

WALLACE: Did you ask your own doctor about taking the swine flu shot?

MOORE: Yes, and at the time he thought it might be a good idea. But I
resisted it, because I was leery of having the symptoms that sometimes
go with that kind of inoculation.

WALLACE: So you didn't?

MOORE: No, I didn't.

WALLACE: Have you spoken to your doctor since?

MOORE: Yes.

WALLACE: And?

MOORE: He's delighted that I didn't take that shot.

WALLACE: You're in charge. Somebody's in charge.

DR SENCER: There are -

WALLACE: This is your advertising strategy that I have a copy of here.

DR SENCER: Who's it signed by?

WALLACE: This one is unsigned. But you--you'll acknowledge that it was
your baby so to speak?

DR SENCER: It could have been from the Department of Health, Education
and Welfare. It could be from CDC. I don't know. I'll be happy to take
responsibility for it.

WALLACE: It's been three years now since you fell ill by GBS right?

ROBERTS: Right.

WALLACE: Has the federal government, in your estimation, played fair
with you about your claim?

ROBERTS: No, I don't think so. It seems to be dragging on and on and on,
and really no end in sight that I can see at this point.

JOSEPH CALIFANO: With respect to the cases of Guillain Barre...

WALLACE: Former Secretary of HEW Joseph Califano, too was disturbed that
there was no end in sight. So a year and a half ago, he proposed that
Uncle Sam would cut the bureaucratic red tape for victims suffering from
GBS and would pay up quickly.

CALIFANO: We shouldn't hold them to an impossible or too difficult
standard of proving that they were hurt. Even if we pay a few people a
few thousand dollars that might not have deserved it, I think justice
requires that we promptly pay those people who do deserve it.

WALLACE: Who's making the decision to be so hard-nosed about settling?

CALIFANO: Well, I assume the Justice Department is.

WALLACE: Griffin Bell, before he left?

CALIFANO: Well, the Justice Department agreed to the statement I made.
It was cleared word for word with the lawyers in the Justice Department
by my HEW lawyers.

CALIFANO: That-that statement said that we should pay Guillain Barre
claims without regard to whether the federal government was negligent,
if they - if they resulted from the swine flu shot.

GENE ROBERTS: I think the government knows its wrong.

JUDY ROBERTS: If it drags out long enough, that people will just give
up, let it go.

GENE ROBERTS: I-I am a little more adament in my thoughts than my wife
is, because I asked - told Judy to take the shot. She wasn't going to
take it, and she never had had shots. And I'm mad with my government
because they knew the fact, but they didn't realise those facts because
they - if they had released them, the people wouldn't have taken it. And
they can come out tomorrow and tell me there's going to be an epidemic,
and they can drop off like flies to - next to me, I will not take
another shot that my government tells me to take.

WALLACE: Meantime, Judy Roberts and some 4,000 others like her are still
waiting for their day in court.

Sound familiar? Don't doom yourself to repeating history; as I am sure "they" are planning another "swine" flu vaccine program in late summer/early fall. THE VACCINE WILL BE WHAT KILLS MILLIONS, JUST LIKE IN 1918. If you did not hear "What's Ailing America" on www.republicbroadcasting.org last Sat (5/2), I strongly suggest you listen to the archive. One of my guests, Jane Burgermeister from Austria, describes how she has filed criminal charges against Baxter Int'l for release of the bird flu virus into Europe. Also discussed was that packages of the "Mexican" flu were sent to Switerland, and exploded on subway cars with dry ice bombs. They are right in our face with their genocidal crimes against humanity, and people are waking up BIGTIME. I have done 15 shows this past week, with many more are scheduled about this bioweapon attack on the people of the world.

On an extreme "up" note, I have joined forces with ex-Marine Drew Raines, his website is http://www.amd.elequity.com/. Listen to the archives of his show on 4/24 and 5/1 where I was his guest, and he had to do all kinds of fancy footwork to keep me on the air. Majors, colonels, enlisted soldiers all over the world and veterans were listening and asking questions. THE MILITARY IS NOW REALIZING THAT THE ENEMY IS WITHIN AND THEY ARE BEING KILLED OFF WITH INOCULATIONS. When this realization reaches critical mass, the enemy will have a problem.

I will be on his show again on 5/15 from 5-7 EST, and he will be my guest this Saturday. Take heart, because for me to form an alliance with the military is the enemy's worst nightmare. If you know anyone in the armed forces, please forward them this e-mail.

Sempre Fi,

Dr Carley

Great New Swine Flu Job with UN

2009-05-02T11:04:00.000-07:00

Black, White, Left Right ,Fight Evil

2009-04-25T13:13:00.000-07:00

Swine Flu Kills 20 in Mexico-Cases in TX , CA

2009-04-24T05:12:00.000-07:00

Chemtrails Real? Harmful? News Report

2009-04-21T20:58:00.000-07:00

NBC Story on RFID Chip

2009-04-19T09:06:00.000-07:00

Great New DEPRESSION, Millions Could Starve

2009-04-17T20:18:00.000-07:00

Florida Debtors Prison?

2009-04-15T12:36:00.001-07:00

Debtors' prison— again

Published Monday, April 13, 2009

--------------------------------------------------------------------------------

In a little-noticed trend blamed on the state's hard economic times, several courts in Florida have resurrected the de facto debtor's prison — having thousands of Floridians jailed for failing to pay assessed court fees and fines. The shortsighted plan threatens to run afoul of the U.S. Constitution. It appears to generate little additional revenue relative to the misery it causes, and it should be stopped.

A recent report by the nonprofit Brennan Center at New York University School of Law highlights the difficulty of trying to get what one researcher called "blood from stone." In Leon County's Collection Court, defendants who fail to pay their court-ordered costs and fines — often hundreds of dollars — are notified to appear at Collections Court and later arrested if they don't show. In the 12 months studied, there were 838 arrests for not appearing in court or failing to pay what was owed. Most people spent hours in jail, but some were held for a week or more.

At $53 per day of incarceration, it is an expensive way to try to collect from people who generally are struggling to meet the expenses of daily living. The center calculated that those incarcerated cost the system $62,085 to bring in $80,450 in debts.

Jail time for being broke is no way to help people get back on their feet after a run-in with the legal system. Judges should be exercising the option in state law that allows them to convert court-ordered obligations into community service. But with the Florida Legislature looking for revenue to fund the courts and other state services, judges are under pressure to wring every available penny out of those who owe.

The nonpayment problem is only likely to worsen. In Tallahassee, lawmakers are debating raising court fees and fines even further to raise general revenue for the state. Meanwhile, the state's rising unemployment rate will make it tougher for Floridians with a criminal record to find a decent job. Do we really want our jails filled with people whose only "crime" is that they are poor?

About a third of Florida counties use collections courts, but even those without them jail people for their debts. In Pinellas, Hillsborough and Hernando counties, collection agencies are used to extract the overdue fines and fees. But defendants who violate their probation by failing to pay can find themselves in jail if a judge believes they have not coughed up what they can.

Author Charles Dickens familiarized his readers with England's system of squalid debtors' prisons. Dickens' father was imprisoned in Marshalsea for debts and Dickens set Little Dorrit there. But that country saw the light in the mid 19th century and outlawed jail for debtors.

In the United States, it is unconstitutional to incarcerate someone solely for failing to pay a debt. Florida officials get around this by claiming the defendants are going to jail not for their debts but for violating a court order. That is what you would call a self-serving technicality. The truth is that Florida has enthusiastically resurrected debtors' prison. How Dickensian is that?

FEMA CAMP-KATRINA SPA & CARBON RECYCLING CENTER

2009-04-13T20:49:00.000-07:00

Glenn Beck ,FEMA Camps and Hearst Corporation

2009-04-06T12:44:00.000-07:00

Our Guns Gone Sept. 09 , Former Govt. Officials Tell Russian Prez

2009-04-04T18:08:00.000-07:00

OBAMA Census GPS ing Your Front Door

2009-04-03T19:53:00.000-07:00

Census Bureau Adopts GPS to Find American Homes
by Dan Charles

Mapping to save lives: Intense mapping of Delaware County helped Shoreh Elhami assemble this flood map. The red dots show the locations of homes in low-lying areas of Delaware County that were expected to flood.

All Things Considered, July 31, 2006 · Two-and-a-half years from now, in early 2009, the Census Bureau plans to send an army of 100,000 temporary workers down every street and dusty, dirt road in America. They will be armed with handheld GPS devices.

Robert LaMacchia, head of the Census Bureau's geography division, says they'll capture the latitude and longitude of the front door of every house, apartment and improvised shelter they find.

"We will actually knock on doors and look for hidden housing units," he says. "We will find converted garages; from the outside, it may not look like anybody lives there."

But census workers will add each dwelling, legal or not, to the Census Bureau's Master Address File.

Recent proposed budget cuts have put part of this plan in jeopardy. But if Congress restores the money, the census will end up with the geographic coordinates — accurate to within 10 feet — for about 110 million residences.

But the Census Bureau can't, by law, share that list with anyone, even local governments. LaMacchia says the information has to be treated as confidential. Otherwise, people might lie, and the census wouldn't be accurate.

"People would not tell us about hidden housing units," LaMacchia says. "People would not respond to the questionnaire if they believed that that information would be turned over to law enforcement or code enforcement and become public information."

Mapping Might Save Lives

Shoreh Elhami, director of Geographic Information Systems in Delaware County, Ohio, says this sort of information can save lives.

"Having a geographic dataset that is accurate, comprehensive and current is priceless," Elhami says.

Her passion and devotion have made Delaware County, a fast-growing area just north of Columbus, one of the most meticulously mapped areas of the country.

At her computer, with a few clicks of the mouse, Elhami can pull up a complex, multi-layered picture of Delaware County. Standard commercial software lets her highlight sewer lines, flood plains or real estate tracts. She can pick any address and retrieve pictures of that building from overhead and from the street, along with information about its owner.

The map can answer questions you never expected to ask, she says. Last year, a big storm came through. A reservoir on the Olentangy River, just upstream from the town, was in danger of overflowing, and authorities thought they might have to release water through the dam.

Nobody knew how many people in the town of Delaware might be flooded out of their homes. Elhami rushed to her electronic map. She added a new layer to the picture — an image she'd received from the Army Corps of Engineers showing low-lying areas that would end up under water.

The image showed the outline of the "inundation zone," and within it, lines and clusters of little red dots. Each of those dots was a house that lay within the potential flood zone.

"The software allows you to do a count of every one of those residences and produce a file of those addresses," she says.

Elhami delivered that file to emergency managers, and they quickly called the people at each address. Fortunately, the storms subsided, and no flood came.

Every address in the county is in a database, complete with geographic coordinates so it will show up accurately on a map.

Assembling that data is a time-consuming effort. On one recent summer morning, Caleb Gutshall and Sheri Feasel trudged down North Winter Street, in Delaware, checking each address on this commercial strip and making sure that the county's list of occupants was accurate. They also take pictures of any new buildings. One door was unnumbered and locked. Gutshall peered in the window, but learned nothing. "It doesn't look like anybody's in there," he said.

Now the Census Bureau is planning to undertake much the same kind of effort, on a massive scale, covering the entire country. Elhami says that the Master Address File could be a priceless resource for many counties that don't have the resources to collect that information on their own.

Private Companies Push for Data

Pressure is growing to change the law and make this information available. Demand for geographic data is booming.

Private companies would love to get their hands on the Census Bureau's data. Web sites like Mapquest.com or maps.google.com, usually show addresses within the correct city block, but they will point to the correct house less than half the time.

Don Cooke, an executive from the mapping company TeleAtlas, says the Census Bureau's database would immediately solve that problem, and he'd like to use it.

"The laws basically say the intellectual property that's generated by the government belongs to us citizens, so I'd like to get it," he says. "Because I don't want to spend the money to go out and compile it!"

Related NPR Stories
March 27, 2000
The US Census

Welcome Slaves, OBAMA officially Gave Away Your Freedom

2009-04-03T09:20:00.000-07:00

G-20 Shapes New World Order With Lesser Role for U.S., Markets

By Rich Miller and Simon Kennedy

April 3 (Bloomberg) -- Global leaders took their biggest steps yet toward a new world order that’s less U.S.-centric with a more heavily regulated financial industry and a greater role for international institutions and emerging markets.

At the end of a summit in London, policy makers from the Group of 20 yesterday delivered a regulatory blueprint that French President Nicholas Sarkozy said turned the page on the Anglo-Saxon model of free markets by placing stricter limits on hedge funds and other financiers. The leaders also pledged to triple the resources of the International Monetary Fund and to hand China and other developing economies a greater say in the management of the world economy.

“It’s the passing of an era,” said Robert Hormats, vice chairman of Goldman Sachs International, who helped prepare summits for presidents Gerald R. Ford, Jimmy Carter and Ronald Reagan. “The U.S. is becoming less dominant while other nations are gaining influence.”

A lot was at stake. If the leaders had failed to forge a consensus -- Sarkozy this week threatened to quit the talks if they didn’t back much tighter regulation -- it might have set back the world’s economy and markets just as they’re showing signs of shaking off the worst financial crisis in six decades.

That’s what happened in 1933, when President Franklin D. Roosevelt torpedoed a similar conference in London by rejecting its plan to stabilize currency rates and in the process scotched international efforts to lift the world out of a depression.

More Conciliation

Seeking to avoid a repeat of that historic flop, President Barack Obama junked the at-times go-it-alone approach of his predecessor, George W. Bush, and adopted a more conciliatory stance toward his fellow leaders.

“In a world that is as complex as it is, it is very important for us to be able to forge partnerships as opposed to simply dictating solutions,” Obama told a press conference at the conclusion of the summit.

Stock markets rose in response to the steps taken by the G-20 leaders. The Standard & Poor’s 500 Index climbed 2.9 percent to 834.38. The Dow Jones Industrial Average added 216.48 points, or 2.8 percent, to 7,978.08. Both closed at their highest levels since the second week of February.

In an effort to promote harmony, Obama soft-pedaled earlier U.S. demands that the summit agree on a specific target for fiscal stimulus in the face of opposition from France and Germany. Instead, he settled for a vague pledge that the leaders would do whatever it takes to revive the global economy.

Repudiation of Past

The president also signed on to a communiqué that Nobel Laureate Joseph Stiglitz said repudiated the previous U.S.-led push to free capitalism from the constraints of governments.

“This is a major step forward and a reversal of the ideology of the 1990s, and at a very official level, a rejection of the ideas pushed by the U.S. and others,” said Stiglitz, an economics professor at Columbia University. “It’s a historic moment when the world came together and said we were wrong to push deregulation.”

In bowing to that view, the leaders conceded in a statement that “major failures” in regulation had been “fundamental causes” of the market turmoil they are trying to tackle. To make amends and to try to avoid a repeat of the crisis, they pledged to impose stronger restraints on hedge funds, credit rating companies, risk-taking and executive pay.

“Countries that used to defend deregulation at any cost are recognizing that there needs to be a larger state presence so this crisis never happens again,” said Argentine President Cristina Fernandez de Kirchner.

Financial Stability Board

A new Financial Stability Board will be established to unite regulators and join the IMF in providing early warnings of potential threats. Once the economy recovers, work will begin on new rules aimed at avoiding excessive leverage and forcing banks to put more money aside during good times.

German Chancellor Angela Merkel, who had unsuccessfully sought to convince the U.S. and Britain to sign on to similar steps before the crisis began in mid-2007, hailed the communiqué as a “victory for common sense.”

The U.S. did, though, take the lead in getting the summit to agree on an increase in IMF rescue funds to $750 billion from $250 billion now. Japan, the European Union and China will provide the first $250 billion of the increase, with the balance to come from as yet unidentified countries.

“This will provide the IMF with enough resources to meet the needs of East European nations and also provide back-up funding to a broader set of countries,” said Brad Setser, a former U.S. Treasury official who’s now at the Council on Foreign Relations in New York.

IMF Allocation

The G-20 also agreed to an allocation of $250 billion in Special Drawing Rights, the artificial currency that the IMF uses to settle accounts among its member nations. The move is akin to a central bank such as the Federal Reserve effectively creating money out of thin air, except it’s on a global scale.

The increase in Special Drawing Rights will allow countries to tap IMF money without having to accept changes to economic policies often demanded as a condition of aid. The cash is disbursed in proportion to the money each member-nation pays into the fund. Rich nations will be allowed to divert their allocations to countries in greater need.

The G-20 said they would couple the financing moves with steps to give emerging economic powerhouses such as China, India and Brazil a greater say in how the IMF is run.

Emerging Markets Benefit

Citigroup Inc. economists Don Hanna and Jurgen Michels called the summit agreement “a boon to emerging markets” in a note to clients yesterday.

Mexico said Wednesday it will seek $47 billion from the IMF under the Washington-based lender’s new Flexible Credit Line, which allows some countries to borrow money with no conditions.

Emerging-market stocks, bonds and currencies rallied yesterday on speculation other developing nations will follow Mexico’s lead. Gains in Polish, Czech and Brazilian stocks helped push the MSCI Emerging Markets Index up 5.6 percent to 613.07, the highest since Oct. 15.

In a bid to avoid another mistake of the depression era, G-20 leaders repeated an earlier pledge to avoid trade protectionism and beggar-thy-neighbor policies that could aggravate the decline in the global economy.

The Paris-based Organization for Economic Cooperation and Development predicted this week that global trade will shrink 13 percent this year as loss-ridden banks cut back on credit to exporters and importers.

Trade Finance

To help combat that, the G-20 said they will make at least $250 billion available in the next two years to support the finance of trade through export credit agencies and development banks such as the World Bank.

The summit took place amid speculation among investors that the deepest global recession in six decades may be abating. Data released yesterday showed orders placed with U.S. factories rose in February for the first time in seven months, U.K. house prices unexpectedly gained in March and Chinese manufacturing increased. Still, a report today is forecast to show U.S. unemployment at its highest in a quarter-century.

“If the economy turns more favorable, this meeting will probably be viewed as a milestone,” said C. Fred Bergsten, a former U.S. official and director of the Peterson Institute for International Economics in Washington.

The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union. Officials from Spain and the Netherlands were also present.

Privacy in Our Police State

2009-03-31T11:32:00.000-07:00

Transportation Security Administration (TSA) undated handout image shows a composite of 4 separate scans, a female in the left two and a male in the right two, from a whole body scan machine, or millimeter wave machine being used at a security check point at the Salt Lake International Airport in Salt Lake City, Utah. The new machine developed by New York based L3 Communications is in use for the first time today by passengers and takes a whole body scan penetrating clothing. This is a pilot program by the TSA to test the machines in a live setting for the first time at Salt Lake International Airport March 10, 2009. REUTERS/TSA (Transportation Security Administration)/Handout (UNITED STATES TRANSPORT BUSINESS

Don't Let Them Steal Everything!

2009-03-31T08:04:00.000-07:00

Pretty Green Slavery..The New Carbon Taxes

2009-03-28T21:12:00.000-07:00

Good News Flower Hour 3/27

2009-03-27T19:47:00.000-07:00

This Passed the Senate , Soon It will be law

2009-03-24T18:03:00.000-07:00

Our Congress Has Gone Over to the Dark Side of Mob Rule , IBD Editorial

2009-03-20T18:52:00.000-07:00

Mob Rule In D.C.
By INVESTOR'S BUSINESS DAILY

The Law: Of all the alarming things going on in Washington these days nothing is as shocking, or disheartening, as the collapse in respect for the rule of law and the Constitution. Just look at the flap over AIG's bonuses.

Like most Americans, we found ourselves angry and perplexed that a company that took $173 billion in bailout aid because it had failed to run its affairs competently would hand out $165 million in "bonuses" to its top employees.

Yet, as with many things, the tale is a bit more complex than the sound bite. For one, Congress authorized the bonuses to be paid — at the direct instigation of Sen. Chris Dodd, D-Conn., who took $103,100 from AIG during the 2008 political cycle.

And while letting AIG pay some employees retention bonuses might seem wrong or even immoral to some, it wasn't illegal.

Yet Congress, which created the problem in the first place, acted with consummate cowardice by trying to "claw back" the money through a punitive, 90% retroactive tax, one specially levied on those who work at AIG. It wants to do the same thing with recipients of TARP money, too.

Why the big change? Public anger. Welcome to mob rule.

A measure to impose the 90% tax passed by more than a two-thirds majority, 328 to 93, in the House. Only problem is, it's almost certainly unconstitutional.

Our Founding Fathers, those towering thinkers who today get little but scorn from our elites for their brilliance, foresaw such shenanigans and warned against it. They knew the law could be used for political purposes, and wanted to make sure it couldn't.

That's why they put into the Constitution a provision against "bills of attainder" — attempts to legislate punishment for a specific group or person for past actions without benefit of a trial.

As James Madison wrote in the Federalist No. 44, "Bills of attainder, ex post facto laws and laws impairing the obligation of contracts are contrary to the first principles of the social compact and to every principle of sound legislation." They were explicitly made illegal by the Constitution, with Article I, Section 9 saying, "No bill of attainder or ex post facto law shall be passed."

The AIG tax is an ex post facto law, it is a bill of attainder and it definitely impairs the obligation of contracts. Three strikes.

We wish this was all, but it isn't. Democrats who routinely bashed President Bush for his supposed breaches of the law now show shockingly little respect for it themselves.

One sees it in House Speaker Nancy Pelosi's recent comment that enforcing U.S. immigration laws is "un-American," one of the most astonishing utterances from a politician's mouth in decades.

One sees it too in the unilateral abrogation of the North American Free Trade Agreement by the White House, working in cahoots with Democrats in Congress and unions. The decision to ignore our treaty obligations by ending a NAFTA program that let a small number of Mexican trucks haul freight on U.S. roads has led Mexico to slap tariffs of up to 45% on U.S. goods, costing us 40,000 jobs.

And one sees it in the plan to take away workers' right to a secret union ballot in the Democrats' card-check legislation.

All these measures show the rest of the world that America, once a beacon of respect for the rule of law and a global leader in jurisprudence, is capable of extraordinary hypocrisy when it comes to the law.

You don't have to like or agree with the AIG bonuses to understand that Congress is doing something it shouldn't under the Constitution. Once a precedent is set, Congress will be able to go after anyone or any group, at any time, for any reason.

This bill is bad and unconstitutional. It was passed — let's face it — because Congress fears the people's wrath. The bill doesn't stand up to legal scrutiny. But then, neither does this Congress.

Your Daily Scare , The Dollar Doom

2009-03-20T09:49:00.000-07:00

FEMA Camps are Real! , Beck

2009-03-18T16:52:00.000-07:00

Tent Cities Spring Up

2009-03-15T16:30:00.001-07:00

Why I Fear Obama

2009-03-15T08:34:00.000-07:00

Is It Time to Go Gault ? Atlas

2009-03-05T16:05:00.000-08:00

Age of the PORKULAS Music Video , by Marmosets lol

2009-03-03T17:38:00.000-08:00

Browns Global New Deal -1 World Government

2009-03-01T16:08:00.000-08:00

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From The Sunday TimesMarch 1, 2009

Brown woos Obama on global deal
Jonathan Oliver, Political Editor
GORDON BROWN hopes to forge a partnership with President Barack Obama in Washington this week, to call for a “global new deal” to lift the world out of recession.

As he prepares for his first White House visit since the president’s inauguration, the prime minister has hinted that he is ready to make further tax cuts to boost the UK economy.

Brown will meet Obama on Tuesday and address a joint session of Congress on Wednesday. Aides say he has both to demonstrate to a sceptical British public that he commands the respect of the president, and to persuade the American political establishment that global action is needed to rescue the US economy.

Brown is under pressure to persuade American political leaders to sign up to bold aims for the G20 summit of industrial and leading developing nations, which is to be held in London next month.

Many US politicians believe economic policy should put America first, and have shown little interest in concerted global action. Brown will argue for a renewal of the transatlantic relationship, with the two powers working together to solve global economic problems.

The prime minister will borrow from the rhetoric of Franklin Roosevelt, who introduced the government-financed New Deal to tackle the US Depression of the 1930s. He will argue that his 21st century “global new deal” will also require public spending on a huge world-wide scale.

Writing in The Sunday Times today, Brown calls for “universal action to prevent the crisis spreading, to stimulate the global economy and to help reduce the severity and length of the global recession”.

His stress on continued economic “stimulation” will increase speculation about next month’s budget. No 10 sources said that, while no final decision had been taken about further tax cuts, the prime minister would do “whatever it took” to pull the UK out of recession.

Cheap Universial Cure for Any Infection?

2009-02-26T05:10:00.000-08:00

House Prices Fall, Murder Rates Rise, Waiting List Shrink

2009-02-22T08:33:00.000-08:00

This financial crisis is now truly global
The financial crisis has moved from Wall Street to all streets, as the economic shock causes strains and suffering in every part of the world economy.

By Adrian Michaels
Last Updated: 9:11PM GMT 20 Feb 2009

In Florida, a state devastated by tumbling house prices and repossessions, the inhabitants are arming themselves against recession, with requests for concealed weapon permits up 42 per cent in the past 45 days. In Moscow, the murder rate has climbed by 16 per cent. At Tetsuya's – the most exclusive and expensive restaurant in Sydney – the waiting list has shrunk from three months to 24 hours.

Over the past few months, we were told that we were caught in the worst economic crisis for 20 years, then 30, then 80, then 100. It can't be long before someone points out that really, all things considered, the Black Death was comparatively pleasant. But beyond the hyperbole, one thing is clear: what began as a financial problem in certain debt-soaked nations is battering the economies of dozens of others, as well as millions of people working in almost every trade. It will change behaviour and alter the pecking order of the world's economies. There will be social unrest and changes of regime. Received wisdom, whether about the benefits of free trade, globalisation or European integration, may be cast on to a bonfire of recrimination. Estimates of how long the pain will last range from a year to a decade. Bring out your dead.

Among the most significant developments has been the realisation that the most prudent countries – such as Germany, Japan and China – will suffer as badly as the spendthrifts, or even worse. Despite the whiff of hubris that wafted from Berlin when the banks of Britain and America went into meltdown, Germany's economy contracted by two per cent in the last quarter of 2008, compared with 1.5 per cent for Britain's. The problem was that the Chinese and Germans were too thrifty: their countries' growth was reliant on sales of goods to countries that were borrowing. Now that Americans can't afford its products, China's exports have collapsed, down 17.5 per cent in January from a year earlier.

Americans can't spend because their house prices have crumpled, their shares have plummeted and their banks will not – or cannot – lend them any money. Insecurity is also forcing cutbacks: January saw the highest monthly jump in unemployment in 34 years. The equally worried Chinese seem to want to save still more: imports into China fell 43 per cent in January compared with the year before. Yet if no one at home or abroad wants to buy their goods, the result will be massive unemployment: some 20 million people are already said to have lost their jobs. As they head home from the coastal manufacturing belt, their government is trying to force-feed them consumer goods; 80 per cent of all white goods sold in December were subsidised.

As demand dries up, the arteries of global trade are hardening. Lufthansa's air freight division is putting 2,600 staff on short-time working, while cargo ships have so many empty containers that shipping rates are a tenth of what they were at last year's peak. The knock-on effects are complex, but painful. "For Rent" signs dot empty storefronts on the once sought-after stretch of New York's Madison Avenue, where the vacancy rate rose by 50 per cent in 2008. Rents have dropped by a third as the ladies who lunch think twice about coffee at Barneys, or frocks from Versace. This falling appetite for luxury goods helps explain why half of India's 400,000 diamond workers have lost their jobs. More than 40 have committed suicide.

Or take car sales, which Carlos Ghosn, the chief executive of Renault-Nissan, estimates could fall by 21 per cent across the world this year. Car companies are begging governments for handouts – but that won't shift their products from showrooms. Among other things, lower car sales mean fewer catalytic converters, which means that platinum does not need to be mined so intensively. The price of platinum has fallen by half, and the world's largest producer, Anglo Platinum, which operates mostly in South Africa, is axing 10,000 jobs.

And so the rural Chinese are not the only ones heading home. Thanks largely to a construction boom, Spain was responsible for a third of the new jobs created in the eurozone in 2006 and 2007, but is now losing 40,000 a week, and is offering subsidies for migrants to leave (some immigrants are instead digging in, selling home-cooked food at illegal markets around Madrid). Thai factories and farms used to rely on Burmese expats; aid workers report that thousands of them are now being rounded up and sent home. Malaysia has banned the hiring of foreigners in certain sectors, while the Philippines, which has 10 per cent of its population working abroad, is braced for family incomes to tumble. Remittances from overseas are a lifeline for the world's poorest: Africans working in the developed world have been sending back $40 billion a year to support their impoverished relatives, but the World Bank predicts that this could drop substantially this year.

Even when the crisis is not causing outright misery, it is transforming behaviour. In Britain, employers seem to be choosing to fire women rather than men – but in America, more than 80 per cent of those losing their jobs have been male; as a result, women are making up an increasing percentage of the workforce. Of course, not every extraordinary trend or statistic can be blamed on the economic crisis – but it is certainly true that cheap, home-based pursuits are making a comeback, and frippery is out. Australians spent 13 per cent less on eating out in the last quarter of 2008, while a Manhattan dentist is pitching his teeth-whitening services with the phrase "Make me an offer".

The challenge is to come up with a political response that does not make things worse. Western countries used to preach openness, free movement of people, the breaking down of barriers. Now the instinct is to raise the shutters and protect voters' livelihoods. Social unrest is spreading; particularly at risk are the nations of central and eastern Europe, which fervently embraced the free market after the Berlin Wall came down. As their workers headed west, their businesses loaded up on debt to fuel breakneck expansion; now, they can't meet their obligations, especially as the region's biggest banks were sold to Italians and Austrians, who might repatriate cash to focus on domestic demands. "The mess in central and eastern Europe is a clear result of globalisation," says Hans Redeker, a strategist at European bank BNP Paribas. "It should be no surprise to see [Western] banks acting increasingly locally while trying to please domestic governments."

The world's leaders promise to stop protectionism, but their actions speak differently. A joint statement this week from Gordon Brown and Silvio Berlusconi, Italy's prime minister, said: "Protectionist measures reduce worldwide growth, deny us the benefits of global trade and confine millions to poverty." Yet both countries are propping up their car industries. Congress wants to protect the American steel industry; the French government is spending more on newspaper advertising.

However restless they are, electorates need to remember that a lack of protectionism lay behind a huge increase in prosperity for millions of people. That is not easy when jobs are being lost. A cleaned-up banking system is a top priority – but the debate has only just started about how our banks are to look, who will run them and how they will be regulated. "The history of financial crises," warns Michael Pettis, professor of finance at Peking University, "shows a mismanagement of the regulatory framework that comes out of them."

Above all, consumers are somehow going to have to change their behaviour. Americans are certain to be more prudent during the immediate crisis, but they need to maintain that more hostile attitude to debt when it is over. It will be just as hard to persuade the Chinese, Japanese and Germans to start spending, in order to supplement export-led growth with domestic demand. "The world doesn't need more stuff to sell," explains Prof Pettis. "It needs more buyers."

As they mature, Asian economies will in time have better pension and health systems, which will help persuade people that there is a safety net for hard times, and tease money out from under the mattress. "Surplus countries have to spend their income and enjoy themselves," says Charles Dumas, an analyst at Lombard Street Research. "The purpose of an economy is to consume." Right now, though, the main objective is survival.

Jim Sinclair's Warning - ITS RED ALERT TIME

2009-02-15T08:47:00.000-08:00

I sent you a certain few emails that I consider to be the most important communications issued in my career that started in 1958.

I am the son of what I know to have been the greatest Lone Wolf trader in Wall Street history ever, Bertram J. Seligman. He was a past master at his business and believed to be a market sensitive. I apprenticed to him, learned from him and inherited some of his ability, not all however.

From this background of experience understanding and sensitivity the following flows.

The emails of note:

1. Said, "This is it."
2. Said, "It is now."

This communication is to inform you as of 2/13/09, "It is totally out of control." There is no longer any means of reversal of the beginning of the final phase of the downward spiral now solidly set in motion.

For your sake, protect yourselves immediately.

Be prepared for disruptions in distribution common to hyperinflation.

1. You should have already distanced yourself from your financial agents. If you haven't you are headed for significant displeasure and strain.

2. Make sure you stay three months ahead on necessary items that could experience distribution delays such as prescribed medicine and preferred foods.

3. Even though real estate is far from a buy, if you can afford a second home outside of major cities it would serve a good purpose.

4. Own gold.

5. Consider that good gold shares of non-US companies incorporated in a non-US country operating in third country, traded on multiple exchanges are a means of money expatriation legally and in broad daylight if required.

6. For currencies, all you can do is own a spread held by a true custodial ship wherever that might be.

Simply said, as of Friday February 13th, 2009 the situation is in confirmed "Out of Control" mode as this well engineered downward spiral enters into a terminal phase.

The motive was profit and degree of the disintegration caused in the pursuit of this goal was not anticipated.

The key event was when Lehman was flushed - all hell broke loose. The hell cannot be contained in any practical manner.

I seek nothing of you but the protection of yourselves.

Respectfully yours,
Jim

IT''S OVER..US Obligations Exceed World's GDP!

2009-02-14T08:47:00.000-08:00

WorldNetDaily Exclusive
Federal obligations
exceed world GDP
Does $65.5 trillion
terrify anyone yet?

--------------------------------------------------------------------------------
Posted: February 13, 2009
11:35 pm Eastern

By Jerome R. Corsi

--------------------------------------------------------------------------------
WorldNetDaily

As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the "2008 Financial Report of the United States Government" as released by the U.S. Department of Treasury.

The difference between the $455 billion "official" budget deficit numbers and the $5.1 trillion budget deficit cited by "2008 Financial Report of the United States Government" is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.

But the numbers in the 2008 report are calculated on a GAAP basis ("Generally Accepted Accounting Practices") that include year-for-year changes in the net present value of unfunded liabilities in social insurance programs such as Social Security and Medicare.

Under cash accounting, the government makes no provision for future Social Security and Medicare benefits in the year in which those benefits accrue.

"As bad as 2008 was, the $455 billion budget deficit on a cash basis and the $5.1 trillion federal budget deficit on a GAAP accounting basis does not reflect any significant money [from] the financial bailout or Troubled Asset Relief Program, or TARP, which was approved after the close of the fiscal year," economist John Williams, who publishes the Internet website Shadow Government Statistics, told WND.

Find out what's behind the chaos at the White House, in the No. 1 best-seller "Obama Nation"

"The Congressional Budget Office estimated the fiscal year 2009 budget deficit as being $1.2 trillion on a cash basis and that was before taking into consideration the full costs of the war in Iraq and Afghanistan, before the cost of the Obama nearly $800 billion economic stimulus plan, or the cost of the second $350 billion in TARP funds, as well as all current bailouts being contemplated by the U.S. Treasury and Federal Reserve," he said.

"The federal government's deficit is hemorrhaging at a pace which threatens the viability of the financial system," Williams added. "The popularly reported 2009 [deficit] will clearly exceed $2 trillion on a cash basis and that full amount has to be funded by Treasury borrowing.

"It's not likely this will happen without the Federal Reserve acting as lender of last resort for the Treasury by buying Treasury debt and monetizing the debt," he said.

"Monetizing the debt" is a term used to signify that the Federal Reserve will be required simply to print cash to meet the Treasury debt obligations, acting in this capacity only because the Treasury cannot sell the huge of amount debt elsewhere.

The Treasury has been largely dependent upon foreign buyers, principally China and Japan and other major holders of U.S. dollar foreign exchange reserves, including OPEC buyers purchasing U.S. debt through London.

"The appetite of foreign buyers to purchase continued trillions of U.S. debt has become more questionable as the world has witnessed the rapid deterioration of the U.S. fiscal condition in the current financial crisis," Williams noted.

"Truthfully," Williams pointed out, "there is no Social Security 'lock-box.' There are no funds held in reserve today for Social Security and Medicare obligations that are earned each year. It's only a matter of time until the public realizes that the government is truly bankrupt and no taxes are being held in reserve to pay in the future the Social Security and Medicare benefits taxpayers are earning today."

Calculations from the "2008 Financial Report of the United States Government" also show that the GAAP negative net worth of the federal government has increased to $59.3 trillion while the total federal obligations under GAAP accounting now total $65.5 trillion.

The $65.5 trillion total federal obligations under GAAP accounting not only now exceed four times the U.S. gross domestic product, or GDP, the $65.5 trillion deficit exceeds total world GDP.

"In the seven years of GAAP reporting, we have seen an annual average deficit in excess of $4 trillion, which could not be possibly covered by any form of taxation," Williams argued.

"Shy of the government severely slashing social welfare programs, federal deficits of this magnitude are beyond any hope of containment, government or otherwise," he said.

"Put simply, there is no way the government can possibly pay for the level of social welfare benefits the federal government has promised unless the government simply prints cash and debases the currency, which the government will increasingly be doing this year," Williams said, explaining in more detail why he feels the government is now in the process of monetizing the federal debt.

"Social Security and Medicare must be shown as liabilities on the federal balance sheet in the year they accrue according to GAAP accounting," Williams argues. "To do otherwise is irresponsible, nothing more than an attempt to hide the painful truth from the American public. The public has a right to know just how bad off the federal government budget deficit situation really is, especially since the situation is rapidly spinning out of control.

"The federal government is bankrupt," Williams told WND. "In a post-Enron world, if the federal government were a corporation such as General Motors, the president and senior Treasury officers would be in federal penitentiary."

Dirtiest Hotels in USA

2009-02-13T06:54:00.000-08:00

It's Good to Know: The Dirtiest Hotels in the U.S.

You are doing a little research online before making reservations for your upcoming vacation, and you find a great rate. But before you book that room, you might want to check out TripAdvisor.com's recently released list of Top 10 Dirtiest Hotels in the United States. The results were based on guest ratings over the past year.

1. Hotel Carter, New York, NY
2. Continental Bayside Hotel, Miami Beach, FL
3. New York Inn, New York, NY
4. Eden Roc Motel, Wildwood, NJ
5. Days Inn Cleveland Airport, Brook Park, OH
6. Days Inn Airport/Stadium Tampa, Tampa, FL
7. Travelodge Bangor, Bangor, ME
8. Velda Rose Resort Hotel, Hot Springs, AR
9. Ramada Plaza Hotel JFK International Airport, Jamaica, NY
10. Days Inn & Suites Gatlinburg, Gatlinburg, TN

In many cases, for a few dollars more, you can stay at a nearby hotel that was highly rated by TripAdvisor.

(Source: Tripadvisor.com and USA Today]

*

Banking System Insolvent?

2009-02-13T06:36:00.000-08:00

Large U.S. banks on edge of insolvency, experts say
By Steve Lohr

Friday, February 13, 2009
Some of the large banks in the United States, according to economists and other finance experts, are like dead men walking.

A sober assessment of the growing mountain of losses from bad bets, measured in today's marketplace, would overwhelm the value of the banks' assets, they say. The banks, in their view, are insolvent.

None of the experts' research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are insured by the U.S. government. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.

But without a cure for the problem of bad assets, the credit crisis that is dragging down the economy will linger, as banks cannot resume the ample lending needed to restart the wheels of commerce. The answer, say the economists and experts, is a larger, more direct government role than in the Treasury Department's plan outlined this week.

The Treasury program leans heavily on a sketchy public-private investment fund to buy up the troubled mortgage-backed securities held by the banks. Instead, the experts say, the government needs to plunge in, weed out the weakest banks, pour capital into the surviving banks and sell off the bad assets.

It is the basic blueprint that has proved successful, they say, in resolving major financial crises in recent years. Such forceful action was belatedly adopted by the Japanese government from 2001 to 2003, by the Swedish government in 1992 and by Washington in 1987 to 1989 to overcome the savings and loan crisis.

"The historical record shows that you have to do it eventually," said Adam Posen, a senior fellow at the Peterson Institute for International Economics. "Putting it off only brings more troubles and higher costs in the long run."

Of course, the Obama administration's stimulus plan could help to spur economic recovery in a timely manner and the value of the banks' assets could begin to rise.

Absent that, the prescription would not be easy or cheap. Estimates of the capital injection needed in the United States range to $1 trillion and beyond. By contrast, the commitment of taxpayer money is the $350 billion remaining in the financial bailout approved by Congress last fall.

Meanwhile, the loss estimates keep mounting.

Nouriel Roubini, a professor of economics at the Stern School of Business at New York University, has been both pessimistic and prescient about the gathering credit problems. In a new report, Roubini estimates that total losses on loans by American financial firms and the fall in the market value of the assets they hold will reach $3.6 trillion, up from his previous estimate of $2 trillion.

Of the total, he calculates that American banks face half that risk, or $1.8 trillion, with the rest borne by other financial institutions in the United States and abroad.

"The United States banking system is effectively insolvent," Roubini said.

For its part, the banking industry bridles at such broad-brush analysis. The industry defines solvency bank by bank, and uses the value of a bank's assets as they are carried on its books rather than the market prices calculated by economists.

"Our analysis shows that the banks have varying degrees of solvency and does not reveal that any institution is insolvent," said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, a trade group whose members include the largest banks.

Edward Yingling, president of the American Bankers Association, called claims of technical insolvency "speculation by people who have no specific knowledge of bank assets."

Roubini's numbers may be the highest, but many others share his rising sense of alarm. Simon Johnson, a former chief economist at the International Monetary Fund, estimates that the United States banks have a capital shortage of $500 billion. "In a more severe recession, it will take $1 trillion or so to properly capitalize the banks," said Johnson, an economist at the Massachusetts Institute of Technology.

At the end of January, the IMF raised its estimate of the potential losses from loans and other credit securities originated in the United States to $2.2 trillion, up from $1.4 trillion last October. Over the next two years, the IMF estimated, United States and European banks would need at least $500 billion in new capital, a figure more conservative than those of many economists.

Still, these numbers are all based on estimates of the value of complex mortgage-backed securities in a very uncertain economy. "At this moment, the liabilities they have far exceed their assets," said Posen of the Peterson institute. "They are insolvent."

Yet, as Posen and other economists note, there are crucial issues of timing and market psychology that surround the discussion of bank solvency. If one assumes that current conditions reflect a temporary panic, then the value of the banks' distressed assets could well recover over time. If not, many banks may be permanently impaired.

"We won't know what the losses are on these mortgage-backed securities, and we won't until the housing market stabilizes," said Richard Portes, an economist at the London Business School.

Raghuram Rajan, a professor of finance and an economist at the University of Chicago graduate business school, draws the distinction between "liquidation values" and those of calmer times, or "going concern values." In a troubled time for banks, Rajan said, analysts are constantly scrutinizing current and potential losses at the banks, but that is not the norm.

"If they had to sell these securities today, the losses would be far beyond their capital at this point," he said. "But if the prices of these assets will recover over the next year or so, if they don't have to sell at distress prices, the banks could have a new lease on life by giving them some time."

That sort of breathing room is known as regulatory forbearance, essentially a bet by regulators that time will help heal banking troubles. It has worked before.

In the 1980s, during the height of the Latin American debt crisis, the total risk to the nine money-center banks in New York was estimated at more than three times the capital of those banks. The regulators, analysts say, did not force the banks to value those loans at the fire-sale prices of the moment, helping to avert a disaster in the banking system.

In the current crisis, experts warn, banks need to get rid of bad assets quickly. The Treasury's public-private investment fund is an effort to do that.

But many economists and other finance experts say that the government may soon have to move in and take on troubled assets itself to resolve the credit crisis. Then, they say, the government could have the patience to wait for the economy to improve.

Initially, that would put more taxpayer money on the line, but in the end it might reduce overall losses. That is what happened during the savings and loan crisis, when the troubled assets, mostly real estate, were seized by the Resolution Trust Corporation, a government-owned asset management company, and sold over a few years.

The eventual losses, an estimated $130 billion, were far less than if the hotels, office buildings and residential developments had been sold immediately.

"The taxpayer money would be used to acquire assets, and behind most of those securities are mortgages, houses, and we know they are not worthless," Portes said.

Sinclair Paints Future

2009-02-10T06:30:00.000-08:00

Save the file linked below. Each time you need me to hold your hand read this first. You will no longer need me.

I have in chapter and verse outlined to you what is coming and why.

This article is a maximus opus in line and verse, outlined in time and form and absolutely correct in content.

I met Mr. Armstrong in the early 80s. I know his story better than most. This is a man who has been persecuted for his knowledge. He is a modern day Livermore. Armstrong is the only true genius in finance. No one can qualify to tie his shoes.

He was incarcerated because of his talent by an all but now forgotten jurist. The why is forgotten. All that is remembered is someone's belief he cost the IRS a large chunk of money.

Armstrong Economics:
The Coming Great Depression.
Why Government Is Powerless

It is frustrating to read so many comparisons of our current situation with 1929 while watching policy be set-in-motion to create spending on infrastructure. Everyone has their hand out looking for a bailout like a bunch of street burns pleading for money so they can get drunk or stay drunk. Almost nothing of what I have read is close to being accurate. The scary part is depressions are inevitably caused by politicians who may be paving the road with good intentions, but are relying upon analysis so biased, we do not stand a chance.

The stock market by no means predicts the economy. A stock market crash does not cause a Depression. The Crash of 1903 was properly titled - "The Rich Man's Panic." What has always distinguished a recession from a Depression is the stock market drop may signal a recession, but the collapse in debt signals a Depression. This Depression was set in motion by (1) excessive leverage by the banks once more, but (2) the lifting of usury laws back in 1980 to fight inflation that opened the door to the highest consumer interest rates in thousands of years and shifted spending that created jobs into the banks as interest on things like credit cards. As a percent of GDP, household debt doubled since 1980 making the banks rich and now the clear and present danger to our economic survival. A greater proportion of spending by the consumer that use to go to savings and creating jobs, goes to interest and that has undermined the ability to avoid a major economic melt-down.

The crisis in banking has distinguished depression from recession. The very term "Black Friday" comes from the Panic of 1869 when the mob was dragging bankers out of their offices and hanging them in New York. They had to send in troops to stop the riot. A banking collapse destroys the capital formation of a nation and that is what creates the Depression. The stock market is not the problem despite the fact it is visible and measurable and may decline 40%, 60% or even 89% like in 1929-32. But the stock market decline is normally measured in months (30-37) whereas the economic decline is measured in years (23-26). Beware of schizophrenic analysis that is often mutually contradictory or often antagonistic in part or in quality for far too often people think they have to offer a reason for every daily movement.

Our fate will not be determined by the stock market performance. Neither can we stimulate the economy by increasing spending on infrastructure any more than buying your wife a mink coat, will improve the grades of your child in school. We are facing a Depression that will last 23-26 years. The response of government is going to seal our fate because they cannot learn from the past and will make the same mistakes that every politician has made before them. Even if the Dow Industrials make new highs next week (impossible), the Depression is unstoppable with current models and tools.

Stocks & Consumers vs. Investment Banks

Let us set the record straight. The Stock Market is a mere reflection of the economy like looking at yourself in a mirror. It is not the economy and does not even provide a reliable forecasting tool of what is to come economically. We are headed into the debt tsunami that is of historical proportions unheard-of in history. There have been the big debt crisis incidents that have hobbled nations, toppled kings, and set in motion economic dark ages. It is so critical to understand the difference between the economy and the stock market, for unless you comprehend this basic and root distinction between the two, survival may be impossible.

To the left I have provided the Economic Confidence Model for the immediate decline. You will notice I did not call this the "stock market model" nor a model for gold, oil, or commodities. I used the word "economic" with distinct and clear purpose. I have stressed it does not forecast the fate, of a particular market or even a particular economy. It is the global economic cycle some may call even a business cycle. Please note that what does line-up and peaks precisely with this model often even to the specific day that was calculated decades advance is the area of primary focus. Yet the US stock market reached a high precisely with this model and then rallied to a new high price 8.6 months later. In Japan, the NIKKEI 225 peaked precisely on February 26th, 2007. This is not a very good omen. But there was something profound that turned down with the February 27th, 2007 target - the S&P Case-Shiller index of housing prices in 20 cities. February 2007 was the peak for this cycle in the debt markets - not the US stock market.

The stock market always bottoms in advance of the economic low. In fact, we will see new highs in the now even in the middle of a Great Depression. At least the 1929 cycle was more of a bubble top in stocks than what we have in place currently in the US stock market. We still had the bubble top in the NASDAQ back in 2000, but this illustrates the point. There was a major explosive speculative boom. The bubble burst in 2000 and there was a moderate investment recession into 2002, but there was no appreciable economic decline that was set in motion because of that crash. Currently, we have a major high in 2007, but it was not a bubble top because it was not the focus of speculation.

The real concentration of capital that created the bubble top, took place in the debt markets. This is the origin of the economic depression - not stocks and not the displacement of farmers because of a 7 year drought created by the Dust Bowl that invoked the response of the Works Progress Administration (WPA) in 1935. Keep in mind the stock market bottomed in the mid summer of 1932 when unemployment was not excessive from a historical perspective. The 25% level of unemployment came after the major 1932 stock market low that was followed by both the banking crisis after the election of FDR and before his fateful inauguration. The Banking Crisis came about because of rumors that Roosevelt was going to confiscate gold. Herbert Hoover published his memoirs showing letters written to Roosevelt pleading with him to make a statement that the rumors were false. He did not.

Let the Big Banks Fail and save our nation

2009-02-09T16:29:00.000-08:00

Brain Drain Gross Worm

2009-02-05T17:06:00.000-08:00

Good Bye DUBAI Economy , too

2009-02-04T19:19:00.000-08:00

Weird Bird Stories

2009-01-29T08:11:00.000-08:00

Pray for Survival

2009-01-28T09:41:00.000-08:00

Have you noticed people are really afraid? They are confused and panicked about the future of themselves and their families. Bad news is pumped out by the media faster than any normal person could tolerate.

Where do we go from here? We are all on a journey for survival. We need each other and Gods hand to steady our nerves and strengthen our resolve to continue our Republic.

It’s fight of flight time. Our glands are pumping out adrenaline to push us to decisions that may change the history of our beloved country. The pressure is great to pretend everything is alright and cooler heads will prevail but deep down you know things are bad and going to get much worse.

Say a prayer for your neighbor, your family and your country’s safety. May God helps us find our way.

Survive the Crash , A Russian View

2009-01-26T17:56:00.000-08:00

Stress!

2009-01-14T11:23:00.000-08:00

Save the Republic, Drink KANGEN

2009-01-09T08:32:00.000-08:00

BOE Ex exec Warns of Dollar Collapse

2009-01-06T15:06:00.000-08:00

Willem Buiter warns of massive dollar collapse
Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.

By Edmund Conway, Economics Editor
Last Updated: 3:05PM GMT 06 Jan 2009

MPC founder member Willem Buiter. Photo: CHRISTOPHER COX The long-held assumption that US assets - particularly government bonds - are a safe haven will soon be overturned as investors lose their patience with the world's biggest economy, according to Willem Buiter.

Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.

The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency's prospects, as well as sparking fears about the sustainability of President-Elect Barack Obama's mooted plans for a Keynesian-style increase in public spending to pull the US out of recession.

Writing on his blog , Prof Buiter said: "There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place."

He said that the dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" - an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.

"The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally," he said. "Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed."

He said investors would, rightly, suspect that the US would have to generate major inflation to whittle away its debt and this dollar collapse means that the US has less leeway for major spending plans than politicians realise.

Walmart, both Good and Bad

2009-01-05T14:28:00.000-08:00

In America, the Wal-Mart way sweeps competition aside
While rivals flounder, the giant retailer is getting stronger than ever as thrifty shoppers go back to basics. James Doran reports from New York

James Doran, Sunday 4 January 2009

On America's "Black Friday", the day after Thanksgiving and normally the busiest shopping day of the year, New York's Fifth Avenue was unusually quiet. So quiet, in fact, that television news reporters were filming outside Saks department store and predicting the end of the world as we know it.

A couple of miles away in Valley Stream, Long Island, however, the crowds waiting to get into Wal-Mart at 5am on the same day were so big and so eager that an employee was trampled to death when the doors were opened.

The stampeding herd of shoppers was after one of Wal-Mart's so-called "door-buster" deals - a giant flat-screen TV at a bargain basement price, or an Xbox games console at an equally unbelievable discount. Few imagined that shoppers would take the chain at its word and literally break down the door in an effort to get their hands on consumer durables at prices only Wal-Mart has the wherewithal to offer.

The post-Thanksgiving scene in Valley Stream was gruesome indeed. But the sheer number of shoppers looking for bargains at this lower end of the high street compared with the growing absence of shoppers at the more up-market end is a growing trend across the Unites States. [demand for cheap Chinese goods is holding steady, but demand everything for everything else (made in America) is tanking.]

"The American consumer is survival mode right now," says Howard Davidowitz, chairman of Davidowitz and Associates, a retail consultancy and investment banking concern based in New York. "Americans are $14 trillion in debt with no savings. Unemployment is exploding and is expected to continue to rise. I think we will see 10 per cent unemployment by December 2009. If you include the number of people we expect to be forced out of full-time employment into part-time employment next year, that number could rise to 14 per cent. The negative wealth effect is just huge. Add all that up and you have a historically bad environment for retail."

But Wal-Mart, with its "pile it high, sell it cheap" ethos, is managing [after helping outsource America's economy] to capitalise on America's economic collapse.

It is the largest food retailer in the US and, because of its size and global reach, has the power to offer the cheapest prices in the market. It is also one of the largest retailers of clothes, electronics and toys, and has a hand in hardware, homewares and just about anything else a family might want to buy in any given week.

"When people are falling behind on their loans and watching their retirement accounts and investments lose all their value, they are not going to buy anything but the basics. And Wal-Mart is the cheapest place to buy the basics," Davidowitz says.

Other discount chains - such as Family Dollar, Dollar Tree, wholesale club BJ's and drugstore chain CVS - are also doing quite well out of America's consumer downturn.

"There is virtually no discretionary spending going on right now," Davidowitz adds. "Look at Macy's. Macy's is doing terrible because it relies 100% on discretionary spending. They are not going to go out of business in the next year but they are probably going to have their worst year on record. Same for Sears, same for Kmart. This is all discretionary spending and Americans are just not going to be able to do that for the foreseeable future." [made in America is too expensive]

But Macy's, Saks, Sears and the rest of those blighted by the consumer downturn still have to shift the goods on their shelves and so are being forced to slash prices by as much as 75% just to keep up with Wal-Mart and the other discount players. "The American consumer has changed," Davidowitz says, "and the retailers are going to have to change too if they want to stay in business."

A look at America's Christmas sales figures shows how Wal-Mart is dominating the retail sector. The company, founded in Arkansas in 1962 by the legendary Sam Walton, was the only American retailer to show a rise in same-store sales in December. Wal-Mart was expected by most analysts to show a rise in such sales of about 2.8% for the month. Compare that with the 6-7% drop expected across the rest of the sector and Wal-Mart's position seems insurmountable.

The chain is planning a number of openings next year and is even reported to be in talks with Russian retailers and government entities about expanding there. The rest of the American retail sector, meanwhile, is expected to retract significantly next year: the International Council of Shopping Centers, a US retail industry body, believes more than 148,000 store branches will shut down in 2008, the largest number since 2001, when 151,000 closed.

With the recession and the abrupt halt in US consumerism it should come as no surprise that those retailers with publicly traded shares had one of the worst years in history. The S&P 500 Retailing Index lost more than 30% this year. Wal-Mart, which is not a member of the index, closed 2008 up 15% at $56.06.

So next time you plan a transatlantic bargain binge don't bank on getting everything in Manhattan: jump on the Long Island Rail Road and see if Wal-Mart has the jeans, trainers and jewellery you are looking for. Chances are they will. Just be careful of the crowds.

My reaction: This article should give hope to anyone who is worried about how China will hold up through this downturn. The American economy might be imploding spectacularly, but demand for Wal-Mart's cheap Chinese goods is stronger than ever. So while things might be looking bad in China with exports being down 2%, Chinese can take comfort in this knowledge: things will be much worst in America.

Warning: Absolutely do not invest in Wal-Mart! Wal-Mart's business model depends on the strong dollar and cheap yuan. When the dollar starts crashing against the yuan in the very near future, Wal-Mart is going to go the way of the dodo bird (extinct).

Wal-Mart Nightmare Scenario: Seriously though, this is a disaster. Americans are becoming more dependent than ever on Wal-Mart, and the day when Wal-Marts around the country close their doors is getting closer every day.

Free trade was sold to Americans based on the idea that, although outsourcing was costing America thousands of jobs, Americans were better off because we could buy cheap foreign imports. Well soon, Americans won't have those cheap imports either. No jobs, no goods, no economy.

Remember, the instant gold hits 1000 again, start stockpiling food and basic supplies, because that will be the warning that Wal-Mart ain't going to be around much longer.

Sinclare, Dollar is going to tank like never before

2009-01-04T16:23:00.000-08:00

Move Over Mugabe!
Posted: Jan 04 2009 By: Jim Sinclair Post Edited: January 4, 2009 at 6:02 pm

Filed under: General Editorial

Dear CIGAs,

Ok, I am not shy. Mugabe move over, here comes the US Federal Reserve.

Zimbabwe will happen in the US. The dollar is going to tank like never before!!!

Consequences, consequences, consequences. They are unavoidable.

The US dollar is not worth a Continental. This is just how Zimbabwe today started!

Fed has abandoned monetary policy, critic says
Sat Jan 3, 2009 9:58pm EST

SAN FRANCISCO (Reuters) - The Federal Reserve has embarked on a campaign of unsupervised industrial policy to end the country’s financial crisis, a move that could undermine its independence, a former top U.S. official said on Saturday.

John Taylor, who was under secretary of treasury for international affairs from 2001 to 2005, said the explosive growth of the Fed’s balance sheet since September was "unbelievable."

"This doesn’t really seem like quantitative easing in the sense of finding a growth rate in the money supply," he told a panel discussion during the annual meeting of the American Economics Association.

"What you are looking at now is really being determined by other considerations. How much should we buy of mortgage-backed securities? How much should we loan to foreign central banks? This is really more like an industrial policy," he said.

The Fed’s balance sheet has more than doubled in size to over $1.2 trillion in recent months as it has tried to shield the U.S. economy from the worst financial crisis since the Great Depression by supporting key credit markets.

This has included direct purchases of mortgage-backed bonds by the Fed and support for top-rated non-financial borrowers in the crucial commercial paper market, as well as hundreds of billions of dollars lent to banks on the basis of collateral.

"If you have a situation where the Fed is borrowing to invest in all these sectors it seems to me you have a huge governance issue…that demands a lot of thought," Taylor said.

Taylor said the U.S. Congress has a legitimate right to demand a say in who the Fed lends money to. The outcome would be "radical reform" that would risk monetary policy independence, he said.

This concern was echoed somewhat by the president of the St Louis Federal Reserve Bank, James Bullard, who also took part in the panel discussion. He said the close collaboration between the Fed and U.S. Treasury in fighting the crisis could have unintended consequences.

"We are blurring the institutional arrangements a little," Bullard said. "I am concerned about independence. Fed independence is very important," he told reporters.

Is Your Cell Phone Bugged?

2009-01-04T09:12:00.000-08:00

Mall Fight in San Antonio

2009-01-02T20:08:00.000-08:00

If the Government Collapsed Today...What would you do?

2009-01-02T08:33:00.001-08:00

Predictions for 2009 -STUPID ECONOMY

2009-01-01T08:31:00.000-08:00

The Final Countdown and 2009 Predictions
By Chuck
As traders on the floor of the NYSE have their shovels ready and waiting to bury what was 2008 they think that by doing so 2009 wil be better.

CNNMoney.com is running a story this morning titled “2009: Nowhere to go but up”. Really? There is no chance that conditions can contiue to get worse? CNN is being overly optomistic, as many people are. Just because the calendar on the wall changes to a new year does not mean that everything that occured in 2008 can’t carry into 2009, and even get worse.

As my site slogan says [...] Slightly Rebellious. I say that because I don’t just give in to what Government and/or mainstream media wants me to think. In 2007 when stock picking web sites and others in the media were calling for the DOW to continue screaming upwards I said “no”. When professional Wall Strreet analysts said the credit crisis would not spread I said “no”. And when the Government said the problems would not spread I said “bullcrap”. Yes, I am rebellious, it is not to just be different, it is to be realistic and saying it like I see it.

When it comes to 2009 I will go against many in the mainstream media once again and tell you that nothing has changed for the better yet. The unfreezing of the credit markets is essentially being done at gunpoint by the Government. And what is worse is that it is being done with the sovereignty of the U.S. credit rating at risk now because the bullets in the gun are made out of tax dollars.

The economy has collapsed. You may not want to hear that but that is what has happened. The only thing that has kept it going over the past decade was ‘credit growth’, the constant making of money on money that did not exist in the first place. Now that the Government’s ponzi scheme has been exposed, and all market bubbles are deflating it will be quite a few years before any organic growth can be realized within the economy. The problem is that the United States does not have any major industry anymore that can carry the economy upwards and onwards. The last time this nation saw a substantial organic growth period was following the last World War. Industrial production and manufacturing flourished and technical innovation created some of the best manufacturing sectors this country has ever seen.

But most of that has been lost and the United States has become a nation of buying iPods, Xbox games, and televisions which are all made in other countries. We are a nation of scientists, doctors, engineers, coffee barasters, and Wal-Mart greeters. Our industrial powerhouse status is long gone. And because of this; growth of the nations economy had become entirely dependent on the need to make money on existing money, i.e. CREDIT. And it is when credit availability got out of control that bubbles get created and they are not sustainable as we have been witness to. The United States must reclaim its status as an industrial powerhouse, we must make goods that the world wants again. Jobs must be created in sectors that are not directly tied to the ‘need’ for free money (credit growth). 70% of consumer spending makes up the nations GDP, that is a number that is way too high. Something has to take the burden off of the American people being so responsible for GDP growth. And more credit is not the solution!

Now that the credit markets have collapsed it has revealed just how deeply tied the economy is connected to credit. And it was a scary discovery to find out just how deep in had gone. The economy of the United States is like having one oil well that creates all the necessary needs for the entire nation and the oil well busted. The government is trying like heck to get that one oil well pumping again instead of looking for new wells to tap into for sustaining (and growing) the economy. All of the tax payer dollars being thrown at the economy is an attempt to get that one lonely oil well pumping again.

Now that people are catching on to the Governments ‘one oil well economy’ they are becomming more relecuent to spend what money they have. Personal savings rates are inching back up off of the zero line. This is a good thing, but the Government does not want that. They NEED you to go buy more things. They NEED you to take on more debt so that money can be made on your money, and they NEED you to beleive that they will do what is right to restore the economy.

We Americans have been made ‘chumps’ to the Governments biggest ponzi scam of all time. My personal recommendations:

Save cash, stay in FDIC insured institutions and keep the amount you save at any particular institution under the FDIC limits. Maybe even spread some of it around into CD’s with guaranteed rate of return.

Get out of debt… as quickly as you can.

And when it comes to the stock market you have to put aside the notion of ‘buy and hold’, that investing technique has been shown to be hazardous to ones wealth. You need to be an active investor… a rebel trader.

My predictions for 2009 and beyond is that attempts to re-inflate the bubbles will eventually be short lived and fail. This will destroy confidence in the market even further and coroporate earnings will begin another descent. This time the markets will drop to levels even lower than what we have witnessed so far. I’m not saying this because I’m being rebellious, I’m saying this because this is what I see and beleive.

I want the markets and economy to improve like everyone else. But, one thing I will NEVER do is sit here and tell you how something looks like a pretty rose when it is actually a dead flower with thorns.

DOW going to 15,000 in 2009? - NO

DOW going to 10,000 - Likely

DOW going to 6000 - YES, over the next two years

Just as the case in 2007 when I discussed the growing problems and the impending bear market I’m sure there will be people once again who will disagree. That’s is OK. At least you know where I see the market going and it is not through rose colored glasses… it is through clear eyes and an open mind.

New Years Greetings from Peter Schiff

2008-12-31T08:35:00.000-08:00

US to Spilt in to 6 Parts?

2008-12-30T14:15:00.000-08:00

End of the USA?

2008-12-29T16:25:00.001-08:00

By ANDREW OSBORN
MOSCOW -- For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument -- that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. -- very seriously. Now he's found an eager audience: Russian state media.

Igor Panarin
In recent weeks, he's been interviewed as much as twice a day about his predictions. "It's a record," says Prof. Panarin. "But I think the attention is going to grow even stronger."

Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry's academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russia relations.

But it's his bleak forecast for the U.S. that is music to the ears of the Kremlin, which in recent years has blamed Washington for everything from instability in the Middle East to the global financial crisis. Mr. Panarin's views also fit neatly with the Kremlin's narrative that Russia is returning to its rightful place on the world stage after the weakness of the 1990s, when many feared that the country would go economically and politically bankrupt and break into separate territories.

A polite and cheerful man with a buzz cut, Mr. Panarin insists he does not dislike Americans. But he warns that the outlook for them is dire.

"There's a 55-45% chance right now that disintegration will occur," he says. "One could rejoice in that process," he adds, poker-faced. "But if we're talking reasonably, it's not the best scenario -- for Russia." Though Russia would become more powerful on the global stage, he says, its economy would suffer because it currently depends heavily on the dollar and on trade with the U.S.

Mr. Panarin posits, in brief, that mass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar. Around the end of June 2010, or early July, he says, the U.S. will break into six pieces -- with Alaska reverting to Russian control.

In addition to increasing coverage in state media, which are tightly controlled by the Kremlin, Mr. Panarin's ideas are now being widely discussed among local experts. He presented his theory at a recent roundtable discussion at the Foreign Ministry. The country's top international relations school has hosted him as a keynote speaker. During an appearance on the state TV channel Rossiya, the station cut between his comments and TV footage of lines at soup kitchens and crowds of homeless people in the U.S. The professor has also been featured on the Kremlin's English-language propaganda channel, Russia Today.

Mr. Panarin's apocalyptic vision "reflects a very pronounced degree of anti-Americanism in Russia today," says Vladimir Pozner, a prominent TV journalist in Russia. "It's much stronger than it was in the Soviet Union."

Mr. Pozner and other Russian commentators and experts on the U.S. dismiss Mr. Panarin's predictions. "Crazy ideas are not usually discussed by serious people," says Sergei Rogov, director of the government-run Institute for U.S. and Canadian Studies, who thinks Mr. Panarin's theories don't hold water.

Mr. Panarin's résumé includes many years in the Soviet KGB, an experience shared by other top Russian officials. His office, in downtown Moscow, shows his national pride, with pennants on the wall bearing the emblem of the FSB, the KGB's successor agency. It is also full of statuettes of eagles; a double-headed eagle was the symbol of czarist Russia.

The professor says he began his career in the KGB in 1976. In post-Soviet Russia, he got a doctorate in political science, studied U.S. economics, and worked for FAPSI, then the Russian equivalent of the U.S. National Security Agency. He says he did strategy forecasts for then-President Boris Yeltsin, adding that the details are "classified."

In September 1998, he attended a conference in Linz, Austria, devoted to information warfare, the use of data to get an edge over a rival. It was there, in front of 400 fellow delegates, that he first presented his theory about the collapse of the U.S. in 2010.

"When I pushed the button on my computer and the map of the United States disintegrated, hundreds of people cried out in surprise," he remembers. He says most in the audience were skeptical. "They didn't believe me."

At the end of the presentation, he says many delegates asked him to autograph copies of the map showing a dismembered U.S.

He based the forecast on classified data supplied to him by FAPSI analysts, he says. He predicts that economic, financial and demographic trends will provoke a political and social crisis in the U.S. When the going gets tough, he says, wealthier states will withhold funds from the federal government and effectively secede from the union. Social unrest up to and including a civil war will follow. The U.S. will then split along ethnic lines, and foreign powers will move in.

California will form the nucleus of what he calls "The Californian Republic," and will be part of China or under Chinese influence. Texas will be the heart of "The Texas Republic," a cluster of states that will go to Mexico or fall under Mexican influence. Washington, D.C., and New York will be part of an "Atlantic America" that may join the European Union. Canada will grab a group of Northern states Prof. Panarin calls "The Central North American Republic." Hawaii, he suggests, will be a protectorate of Japan or China, and Alaska will be subsumed into Russia.

"It would be reasonable for Russia to lay claim to Alaska; it was part of the Russian Empire for a long time." A framed satellite image of the Bering Strait that separates Alaska from Russia like a thread hangs from his office wall. "It's not there for no reason," he says with a sly grin.

Interest in his forecast revived this fall when he published an article in Izvestia, one of Russia's biggest national dailies. In it, he reiterated his theory, called U.S. foreign debt "a pyramid scheme," and predicted China and Russia would usurp Washington's role as a global financial regulator.

Americans hope President-elect Barack Obama "can work miracles," he wrote. "But when spring comes, it will be clear that there are no miracles."

The article prompted a question about the White House's reaction to Prof. Panarin's forecast at a December news conference. "I'll have to decline to comment," spokeswoman Dana Perino said amid much laughter.

For Prof. Panarin, Ms. Perino's response was significant. "The way the answer was phrased was an indication that my views are being listened to very carefully," he says.

The professor says he's convinced that people are taking his theory more seriously. People like him have forecast similar cataclysms before, he says, and been right. He cites French political scientist Emmanuel Todd. Mr. Todd is famous for having rightly forecast the demise of the Soviet Union -- 15 years beforehand. "When he forecast the collapse of the Soviet Union in 1976, people laughed at him," says Prof. Panarin.

1/3 of Banks will Fail?

2008-12-25T08:32:00.000-08:00

http://www.cnbc.com/id/15840232?video=975644719

Only Government Can Prolong the Pain of Depression

2008-12-23T17:45:00.000-08:00

Gov't Solutions Only Deepened '30s Downturn
By THOMAS SOWELL | Posted Tuesday, December 23, 2008 4:20 PM PT

With both Barack Obama's supporters and the media looking forward to the new administration's policies being similar to President Franklin D. Roosevelt's policies during the 1930s depression, it may be useful to look at just what those policies — and more important, their consequences — were.

The prevailing view in many quarters is that the stock market crash of 1929 was a failure of the free market that led to massive unemployment in the 1930s — and that it was the intervention of Roosevelt's New Deal policies which rescued the economy.

It is such a good story that it seems a pity to spoil it with facts. Yet there is something to be said for not repeating the catastrophes of the past.

Let's start at square one, with the stock crash in October 1929. Was this what led to massive unemployment? Official government statistics suggest otherwise. So do new statistics on unemployment by two current scholars, Richard Vedder and Lowell Gallaway, in their book "Out of Work."

The Vedder and Gallaway statistics allow us to follow unemployment month by month. They put the unemployment rate at 5% in November 1929, a month after the stock market crash. It hit 9% in December — but then began a generally downward trend, subsiding to 6.3% in June 1930.

That was when the Smoot-Hawley tariffs were passed, against the advice of economists across the country, who warned of dire consequences. Five months after the Smoot-Hawley tariffs, the jobless rate hit double digits for the first time in the 1930s.

This was more than a year after the stock market crash. Moreover, the unemployment rate rose to even higher levels under both Presidents Herbert Hoover and Roosevelt, both of whom intervened in the economy on an unprecedented scale.

Before the Great Depression, it was not considered to be the business of the federal government to try to get the economy out of a depression. But the Smoot-Hawley tariff — designed to save American jobs by restricting imports — was one of Hoover's interventions, followed by even bigger interventions by FDR.

The rise in unemployment after the stock market crash of 1929 was a blip on the screen compared with the soaring unemployment rates reached later, after a series of government interventions.

For nearly three consecutive years, beginning in February 1932, the unemployment rate never fell below 20% for any month before January 1935, when it fell to 19.3%, according to the Vedder and Gallaway statistics. In other words, the evidence suggests that it was not the "problem" of the financial crisis in 1929 that caused massive unemployment, but politicians' attempted "solutions."

Is that the history that we seem to be ready to repeat?

The stock market crash, which has been blamed for the widespread suffering during the Great Depression of the 1930s, created no unemployment rate that was even half of what was created in the wake of the government interventions of Hoover and FDR.

Politically, however, Roosevelt could not have been more successful. After all, he was the only president elected four times in a row. He was a master of political rhetoric.

If Barack Obama wants political success, following in the footsteps of FDR looks like the way to go. But people concerned about the economy need to take a closer look at history. We deserve something better than repeating the '30s disasters.

There is yet another factor that provides a parallel to what happened during the Great Depression. No matter how much worse things got after government intervention under Roosevelt's New Deal policies, the party line was that he had to "do something" to get us out of the disaster created by the failure of the unregulated market and Hoover's "do nothing" policies.

Today, an increasing number of scholars recognize that FDR's policies were extensions of interventions begun under Hoover. Moreover, the temporary rise in unemployment after the market crash was nowhere near the massive and long-lasting unemployment after government interventions.

Barack Obama already has his Herbert Hoover to blame for any and all disasters that his policies create: George W. Bush.

Worse than Depression

2008-12-23T11:26:00.000-08:00

Where did TRILLIONS GO?

2008-12-21T07:41:00.000-08:00

Internet Down?

2008-12-19T10:40:00.000-08:00

Is the internet going down? Undersea sub-cables have just broken...

Breaking news: something's happening to the internet, right now. We're just not quite sure what.

Interoute, the internet networks company, reports that three of the four internet sub-cables that run from Asia to North America have been damaged.

These carry more than 75 per cent of traffic between the Middle East, Europe and America. It's hard to gather what this actually means - is it that the internet is down or (more likely) significantly slower than usual between the Middle East and America? (If you're reading this, let's face it, the internet has not shut down altogether)

But, according to the company, there is a domino effect taking place. Interoute says it is:

hearing that offices have lost their entire private network connectivity. As a result, users are unable to do their daily job over the internet and are turning to their mobile phones to communicate across the globe. This is having a knock on effect on the domestic voice networks, which are getting a surge of calls needing to be routed internationally. These calls need to be routed onto international gateways that pass voice traffic in longer directions around the world to avoid the cable breaks – causing more quality issues and risk more call failures, in turn causing more calls to be placed and increasing the pressure on local voice networks.

What (I think) this means is that companies' private internet services have gone down. So, if they can get access, they have had to go on the public internet and mobile phones, like the rest of us average joes, to get their work done. That results in more strain on mobile phone networks, which means more phone calls go down and the internet becomes slower.

Here's the big problem right now:

Finance companies [are] looking to settle trades on European and American exchanges. This cable outage means there is no real-time access to, for example, trading ticker services. This means branch offices are compromised when trying to place trades. As private networks are being affected, these organisations are forced to rely on public internet services that may have more latency and may not update as quickly. The loss of time even precious seconds is hugely important to trading exchanges. These public internet services are now struggling to cope with peak in demand – leading to increased latency, and further compromising the integrity of the trading data.

I'm told that these major sub-sea cables break once a year. So companies have developed a fall-back plan. If one sub-sea cable is out, traffic is re-routed onto a second cable. In theory, a dual break, where both cables go out at once, is incredibly rare. Prior to January this year, it had not happened before.

The problem with all of this is that it's hard to see the impact, or its significance, until something disastrous happens. So, we're keeping an eye on it and like we said, er, something's happening to the internet.

Credit Card Pains

2008-12-18T17:29:00.000-08:00

Credit-Card Users Feel Pain as U.S. Banks Reap Gain (Update2)

By Elizabeth Hester and Ari Levy

Dec. 18 (Bloomberg) -- Credit-card companies, facing an increase in defaults and a decline in consumer spending, are raising some rates, adding fees and cutting credit lines as the Federal Reserve makes the most sweeping changes to the industry in 30 years.

The provisions, approved by the Fed today and effective July 1, 2010, may curtail lenders’ ability to raise interest rates on current balances, require they apply payments to charges with higher interest rates first and extend the time customers have to pay bills before incurring late fees. The Office of Thrift Supervision, which regulates savings and loans, and the National Credit Union Administration approved the rules today.

The new rules come on the heels of a $700 billion federal bailout of the financial system, including $125 billion invested in the nine largest U.S. banks. Recent moves by JPMorgan Chase & Co., Citigroup Inc. and other firms to add charges and decrease the amount of money cardholders can borrow at the same time they’re taking taxpayer dollars have angered some customers.

“People are totally confused,” said Mark Zandi, chief economist at Moody’s Corp.’s Economy.com. “The taxpayer is essentially a big owner in JPMorgan, Bank of America and Citigroup, and these are the folks who make credit-card loans. Many are asking, ‘So why is it that my credit-card loan got pulled? Why am I being charged a higher rate?’”

A decline in spending by consumers and a rising number of defaults are leading Citigroup, JPMorgan and other lenders to increase fees and interest rates for some customers and cut the amount others can borrow. The changes are intended to reduce risk and raise revenue.

New Charges

Among the new charges are those for transferring balances from one credit card to another. Many lenders cap the amount they charge for this service. Now some are doing away with that limit and charging a percentage of the total, said Bill Hardekopf, chief executive officer of Lowcards.com, a Web site for consumers. Some banks are increasing fees for making purchases abroad.

Financial institutions also are expected to slash $2 trillion in credit-card lines in the next 18 months, Oppenheimer & Co. analyst Meredith Whitney wrote in a Nov. 30 report.

The changes are angering customers like Craig Marx, who has had a Chase card for 10 years and recently saw his minimum monthly payments climb to 5 percent from 2 percent and a monthly $10 service charge added to his bill. The bank also raised his rate from 3.99 percent above prime to 7.99 percent for the next two years, after which time it would become variable.

Angry Customer

“I’m incensed,” the 52-year-old Palo Alto, California, resident said. “I feel like they’re making a calculated decision to make me go away as a customer.”

Stephanie Jacobson, a spokeswoman for JPMorgan’s card unit, declined to comment on a specific customer. In general, the situation Marx described involved a choice of either accepting the rate change or the service fee, she said.

JPMorgan, which received a $25 billion capital infusion from the Treasury Department in October, says its credit-card lending increased by 3 percent in the third quarter from the previous quarter. CEO Jamie Dimon, 52, said in a Dec. 11 interview on CNBC that the company was using government money to “do exactly what they want us to do, make more loans, help the economy grow.”

Citigroup spokesman Samuel Wang said in an e-mailed statement that the bank is adjusting rates for customers who haven’t been repriced in at least two years and that cardholders can choose not to accept the changes. If they do so, the bank can take the card away when it expires.

Fed Rules

The Fed rules, proposed in May, were offered in response to criticism from Congress that the central bank was neglecting its authority to prevent abusive lending and strengthen consumer protections. It mirrors congressional efforts to curb practices that lawmakers say are harming consumers. Plans have been introduced by Senate Banking Committee Chairman Christopher Dodd and Representative Carolyn Maloney, a New York Democrat.

Rules curtailing some of the lending practices could hurt bank performance. Although many banks have other sources of revenue, a decrease in credit-card income “would seriously weaken a bank’s ability to absorb other shocks,” Gregory Larkin, senior banking analyst at Innovest Strategic Value Advisors in New York, wrote in an October 2008 research report.

“Fees are a very, very important part of how issuers make money,” Hardekopf of Lowcards.com said. “Issuers make over a third of their money on the fees that are charged.”

Innovest said that credit-card charge-offs could hit $18.6 billion in the first quarter of next year, and $96 billion by the end of the year, forcing banks to search for other ways to generate revenue from customers.

Unpaid Balances

Delinquencies tend to follow unemployment, which were 554,000 first-time claims in the week ended Dec. 13, near a 26- year high reached the week before. Net worth for U.S. households and nonprofit groups fell $2.81 trillion from July to September, the most since tracking began in 1952. That means consumers are more strapped for cash, contributing to a slowdown in spending, which accounts for two-thirds of the economy.

“Banks are getting hit on several fronts right now from the losses in their investments, losses around mortgages and even generally from a consumer-confidence perspective,” said Eva Weber, an analyst at Aite Group LLC in San Antonio who follows bank regulatory and compliance issues. “Banks will need to reconfigure their business strategies and their risk-management strategies to account for the losses that they’re going to incur from the rules on interest rates and fees.”

American Express

Cardholders had $962 billion in unpaid balances on general purpose and proprietary cards at the end of 2007, an 8.6 percent increase from the previous year, according to the Nilson Report, an industry newsletter. That figure is expected to climb to $1.2 trillion by the end of 2012, or $6,373 per cardholder.

“Credit card rules, which we all understand address consumer concerns, the Fed recognizes that it will decrease the amount of credit available,” Edward Yingling, chief executive officer of the American Bankers Association, said in an interview yesterday.

Three analysts in the past week have recommended selling shares of American Express Co., while only four of 24 analysts have “buy” ratings, according to Bloomberg data. Friedman Billings Ramsey & Co. analyst Scott Valentin lowered his share- price target on Dec. 16 and reiterated his “underperform” rating, in part, he wrote, because of a “regulatory burden from increased oversight.”

Transaction Fees

American Express spokeswoman Joanna Lambert said that while the new rules will have an impact on the company’s business, only 20 percent of its sales come from interest on loans. Most of its revenue is generated by fees from transactions between consumers and merchants and from commissions, which aren’t being addressed by the Fed.

“We are in a better position than many of our competitors because we are less reliant on the credit end of our business,” Lambert said in an interview.

Some say the Fed rules will be good for credit-card companies as well as consumers.

“It will force them to be smart about who they make credit available to,” said Chris Armbruster, an analyst at Al Frank Asset Management in Laguna Beach, California, which oversees about $550 million, including shares of JPMorgan, Citigroup, America Express, Capital One Financial Corp. and Advanta Corp. “It should, over time, create fewer nonperforming assets, fewer charge-offs.”

Lou Dobbs on North American Union

2008-12-18T06:50:00.001-08:00

4000 AZ Police Being Trained for Civil Unrest

2008-12-17T16:41:00.000-08:00

Arizona Police Trained for Economic Civil Unrest

Kurt Nimmo
Infowars
December 17, 2008

Mike Sunnucks, writing for the Phoenix Business Journal, reports that Arizona state and local police “say they have broad plans to deal with social unrest, including trouble resulting from economic distress. The security and police agencies declined to give specifics, but said they would employ existing and generalized emergency responses to civil unrest that arises for any reason.”

A recent report by the U.S. Army War College discusses the possibility of Pentagon resources and troops being used in the event of civil unrest due to the economic crisis.

The Phoenix Police Department told the newspaper it has a Tactical Response Unit that trains “continually and has deployed on many occasions for any potential civil unrest issue,” according to Phoenix Police spokesman Andy Hill. Scottsdale Police spokesman Mark Clark said his department has similar plans “in place for such civil unrest.”

The Phoenix Business Journal notes Clark, Hill and other local police officials said the region did plenty of planning and emergency management training for the Super Bowl in February in Glendale. The training at the Super Bowl included personnel and resources from the Department of Homeland Security and the Northern Command, which coordinated with Arizona officials.

As Infowars and Prison Planet have documented, Northern Command is specifically tasked with implementing martial law under Continuity of Government. The Military Commissions Act of 2006 voided restrictions placed on the military to support civilian administration by the Posse Comitatus Act, the latter restricting the military from working with local law enforcement. In addition to the Military Commissions Act of 2006, a 1994 U.S. Defense Department Directive (DODD 3025) allows military commanders to take emergency actions in domestic situations.

A recent report by the U.S. Army War College discusses the possibility of Pentagon resources and troops being used in the event of civil unrest due to the economic crisis, “such as protests against businesses and government or runs on beleaguered banks,” according to the Phoenix Business Journal.

On December 16, Steve Watson and Paul Watson detailed the U.S. Army War College report, entitled Known Unknowns: Unconventional Strategic Shocks in Defense Strategy Development.

“Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security,” writes [Ret.] Lt. Col. Nathan Freir for the U.S. Army War College. “Deliberate employment of weapons of mass destruction or other catastrophic capabilities, unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters are all paths to disruptive domestic shock.” (Emphasis added.)

In other words, any organized political response to the engineered bankster economic crisis will be considered “resistance or insurgency” and will be dealt with by the military and militarized local law enforcement, the former trained to kill people and break things.

On December 16, the International Monetary Fund Managing Director Dominique Strauss-Kahn warned of economic riots and widespread civil unrest if the financial crisis is not addressed.

Last month Gerald Celente, the CEO of Trends Research Institute, renowned for his accuracy in predicting future world and economic events, predicted a depression of a magnitude worse than the Great Depression of the 1930s, tax rebellions, and possibly a popular revolution against the government. On December 15, Paul Joseph Watson reported Celente updating his prediction by stating “that America will see riots similar to those currently ongoing in Greece and that the cause will be a hyper-inflationary depression, leading to the inevitable use of troops and mercenaries to deal with the crisis as Americans are incarcerated in internment camps.”

The fact that a corporate media newspaper such as the Phoenix Business Journal is now telling us police are trained with the assistance of Northcom and the Department of Homeland Security to respond to civil unrest spawned by economic unrest should be a wake-up call to all Americans that the government is planning to institute martial law.

Bye .. Bye.. Dollar, May Not be too late

2008-12-17T08:43:00.000-08:00

Bye bye dollar, bye bye Treasuries...
by Eric deCarbonnel

GoldSeek says "Bye bye dollar, bye bye Treasuries...": (I added a little note to the first image.)

(emphasis mine)

Bye bye dollar, bye bye Treasuries...
By: Clive Maund
-- Posted Tuesday, 16 December 2008

Over the past several days the dollar has gone into a severe decline, and this drop does not look like a reaction within an ongoing uptrend, as was the case in September, for as we can see on the 6-month chart it follows the development of a Head-and-Shoulders top area, a distribution pattern that took nearly 2 months to form. It looks like the dollar has broken down from an important reversal pattern. We had correctly identified the Head-and-Shoulders top back when the dollar index was high in the Right Shoulder of the pattern, when a Dollar Special update was posted on the site on 5th December, warning of a probable imminent dollar breakdown.

As we know, the dollar spike was not the result of positive fundamentals for the currency, rather it was largely the result of across-the-board forced liquidation of commodities and stocks due to deflation fears, with the tidal wave of released funds gushing into US Treasuries as a safe haven, which first necessitated the purchase of dollars. A fortuitous aspect of the panic for the US government and Fed was that the dollar spike gave them the leeway to embark on a bender of money creation to finance an orgy of bailout largesse, especially for the benefit and banks and cronies on Wall St, although clearly the auto industry does not enjoy such favored status. This has greatly exacerbated the downside danger to the dollar once the driver of Hedge Fund and other liquidation of commodities and stocks etc abates, which now appears to be happening as the market begins to perceive the hyperinflationary implications of the recent enormous money creation. Thus, once the dollar spike is seen to have ended we could witness an all-out panic out of the dollar, and market participants would do well to remember that that which rises steeply can drop even more quickly, which means that the dollar could well plunge vertically. We may be on the point of this now. In the event of the dollar plunging potential buyers and holders of US Treasuries are likely to get "cold feet" leading to a "buyers's strike" and possibly wholesale dumping of Treasuries by overseas holders. As the United States is in the unfortunate situation of being totally bankrupt, the choking off of foreign capital inflows can be expected to lead to an immediate and severe funding emergency, with the direst of consequences. Holders of US dollars and Treasuries should therefore liquidate all positions immediately, the best possibly destination for the freed funds being physical gold and silver - if you can get it.

Footnote: the dollar plunge of recent days is thought to be solely related to the factors described above, and not due to the President of the United States having a pair of size 10's thrown at him in Iraq.

My reaction: Could not have said it better myself.

IMF Fears Civil Unrest

2008-12-16T20:21:00.000-08:00

The head of the International Monetary Fund urged governments to step up action to stem the global economic crisis or risk delaying a recovery and sparking violent unrest on the streets.

Using a speech last night in Madrid to issue his stark warning, Dominique Strauss-Kahn argued that government efforts to tackle the economic downturn so far have been uncertain and largely insufficient, which could lead to severe consequences. He singled out the eurozone nations as he attacked the inadequate global response.

His hard-hitting coments came as fears of a prolonged slumped intensified after China showed signs that its economy could be in more trouble than initially expected next year. Factory output in the rapidly growing economy registered the weakest growth in almost a decade last month.

The IMF's managing director said such news signalled that a world recovery may not take place until late next year or into 2010 unless swift action is taken.

"A lot remains to be done, and if this work is not done it will be difficult to avoid a long-lasting crisis that everyone wants to avoid," he said.

Governments in leading economies have been called upon by the IMF to commit a combined 2% of global GDP, equivalent to £1.075bn, to try combat the dangers of a global recession. But the IMF chief blamed governments, saying they were unwilling or unable to use more public funds to jump-start economic activity.

"If we are not able to do that, then social unrest may happen in many countries - including advanced economies," Strauss-Kahn said.

He added that violent protests could break out in countries worldwide if the financial system was not restructured to benefit everyone rather than a small elite.

Revealing his concerns of a deeper economic slowdown, he said that the IMF would probably cut world growth next year from its current forecast of 2.2%. He also predicted that China's once red-hot economy will rapidly run out of steam.

"We started with China at 11% growth ... China will probably grow at 5 or 6% [next year]," he said. "The possibility of a global recession is real. We realise something must be done."

Strauss-Kahn's comments were in sharp contrast to Jean-Claude Trichet, president of the European Central Bank, who yesterday told European leaders they should stick to EU's controversial Stability and Growth Pact, which limits government borrowing and total debt. But Strauss-Kahn said that existing rules should be scrapped to allow governments to deliver essential economic stimulus packages.

"We are facing an unprecedented decline in output and we have evidence of substantial uncertainty limiting the effectiveness of some fiscal policy measures," he said, "What was decided by Brussels ... 1.5% of GDP in the form of stimulus, is a bit below what we need."

His views reflect the continued clashes between European governments on how they should react to the crisis.

Germany has been uncertain about injecting large amounts of public money into economies to encourage growth and resisted pressures to join in with a more coordinated EU effort.

Georgia Warning Against Marshall Law

2008-12-16T05:27:00.000-08:00

Ecuador Defaults It's Debt

2008-12-16T05:15:00.000-08:00

By INVESTOR'S BUSINESS DAILY | Posted Monday, December 15, 2008 4:20 PM PT

Latin America: Ecuador lived up to its reputation as a banana republic Monday by defaulting on sovereign debt it easily could have paid. It looks like the real plan may be to bankrupt its own private sector.

On its face, Ecuador's default on $3.8 billion in bonds looks like rank stupidity. Sovereign defaults, after all, are rare, and almost always the result of a nation running out of cash. Not Ecuador. Monday's default is its second in eight years, and its seventh in 178 years as a nation.

But unlike other defaults, Monday's stiffing of investors is based on unwillingness, not inability, to pay. Flush from high oil earnings, the tiny Andean state has $5.6 billion in reserves and public debt at only 33% of GDP. It could easily pay if it wanted to.

The problem is President Rafael Correa, a radical leftist with a Ph.D. in economics from the University of Illinois at Urbana-Champaign. His aim is total state control. By defaulting, he's trying to end Ecuador's use of the dollar and shut down the private sector by depriving it of investment. Both bode ill for the country's future.

Correa scurrilously claims that the debt is "immoral" and the lenders are "monsters." His thin reed of reasoning is that the debt was illegally contracted, and he says he'll see them all in court.

That could take decades. What won't take that long is the impact of the default on Ecuador's private sector and its 300,000 or so businesses that export fish, shrimp, coffee, flowers and other goods.

They'll lose access to international credit for trade financing, based on the knock-on effect of sovereign default across a country.

Whole supply chains will be disrupted for exporters. Importers will lose their 45-day window for payments and be forced to pay in advance. Ecuador is already rated by the World Bank as one of the world's lousiest places to do business, ranking 136th out of 181 economies in its 2008 survey, and this will make things worse.

Larger companies can reincorporate in better-run countries like Peru and Colombia, but small entrepreneurs will go under. On top of this, Ecuador is in line to lose duty-free export access to the U.S. due to Correa's refusal to cooperate in the war on drugs.

Defaulting also damages Ecuador's ability to use the dollar as its currency because it lessens the income stream of export cash.

"To keep dollarization working, you need foreign currency from commodity exports, as well as remittances and trade finance," Edgar Teran, Ecuador's former foreign minister, told IBD from Quito. "If you close off any of these sources of income, you will spend more dollars than you draw into Ecuador and the government will say, 'We won't use dollars anymore.' "

Fiat currencies and devaluation are next, he said, which is what Ecuadoreans fear most.

This will isolate Ecuador from the world. Correa has enough reserves to keep the government going for a while. He's also sidling up to global troublemakers Iran and Venezuela for additional sponsorship.

This only makes sense if the aim is to get rid of the private sector. This is about par for a Marxist who wants to nationalize an economy and create an all-powerful state. But it's also a road to ruin.

Bailouts & Seasons Greetings from Fred Thompson, LOL

2008-12-15T18:19:00.000-08:00

Hope & Change .. Coming to Your Neighborhood

2008-12-15T09:18:00.000-08:00

Back of the Bus, US

2008-12-15T08:37:00.000-08:00

By Joshua Goodman

Dec. 15 (Bloomberg) -- Latin American and Caribbean leaders gathering in Brazil tomorrow will mark a historic occasion: a region-wide summit that excludes the United States.

Almost two centuries after President James Monroe declared Latin America a U.S. sphere of influence, the region is breaking away. From socialist-leaning Venezuela to market-friendly Brazil, governments are expanding military, economic and diplomatic ties with potential U.S. adversaries such as China, Russia and Iran.

“Monroe certainly would be rolling over in his grave,” says Julia Sweig, director of the Latin America program at the Council of Foreign Relations in Washington and author of the 2006 book “Friendly Fire: Losing Friends and Making Enemies in the Anti-American Century.”

The U.S., she says, “is no longer the exclusive go-to power in the region, especially in South America, where U.S. economic ties are much less important.”

Since November, Russian warships have engaged in joint naval exercises with Venezuela, the first in the Caribbean since the Cold War; Chinese President Hu Jintao signed a free-trade agreement with Peru; and Brazil invited Iranian President Mahmoud Ahmadinejad for a state visit.

“While the U.S. remains aloof from a region it no longer sees as relevant to its strategic interests, other countries are making unprecedented, serious moves to fill the void,” says Luiz Felipe Lampreia, Brazil’s foreign minister from 1995 until 2001. “Countries in the region are more aware than ever that they live in a globalized, post-American world.”

A Castro Triumph

The two-day gathering, called by Brazil at a beach resort in Bahia state, is also a diplomatic triumph for Cuban President Raul Castro, making his first trip abroad since taking over from his brother Fidel two years ago. The communist island was suspended from the hemisphere-wide Organization of American States in 1962 over its ties with the former Soviet Union.

“A lot of this is designed to stick it in the eye of the U.S.,” says Peter Romero, the U.S. assistant secretary of state for the Western Hemisphere from 1999 to 2001. “But underlying the bluster, there’s a genuine effort to exploit the gap left by a distant and distracted U.S.”

The effort is most evident in the bloc of countries allied with the anti-American president of Venezuela, Hugo Chavez.

Bolivian President Evo Morales last month expelled the Drug Enforcement Administration, alleging that DEA agents were conspiring to overthrow him; U.S. President George W. Bush dismissed the charges as absurd and suspended trade privileges for the Andean nation.

Drug-War Defeat

In Ecuador, meanwhile, President Rafael Correa has refused to renew the lease on the U.S.’s only military outpost in South America, a critical platform for the U.S. war on drugs.

For Brazil, tomorrow’s summit caps a decade-long diplomatic drive to use its growing economic and political stability to play a bigger role in the world.

While little concrete action is expected from the first-ever Latin American and Caribbean Summit on Integration and Development, the fact that the U.S. wasn’t invited has symbolic importance, says Lampreia.

The summit reinforces such regional initiatives as the Union of South American Nations, which was formed in May by 12 countries to mediate conflicts such as political violence in Bolivia, bypassing the U.S.-dominated OAS.

Thomas Shannon, the top U.S. diplomat for Latin America, says the nature of American influence is only changing, not declining, as the region matures.

No Invitation Sought

The U.S. “didn’t ask to be invited” to the summit, he says, although it had discussed with Brazil and Mexico ways the meeting’s agenda could be used during the U.S.-backed Summit of the Americas, in April in Trinidad and Tobago.

“We don’t subscribe to the hydraulic theory of diplomacy that when one country is up, the other is down -- that if China and Russia are in the area our influence has somehow waned,” Shannon said in a telephone interview.

The fact that “there’s no warfare, weapons proliferation, suicide bombers or jihadists” in Latin America may make its issues “less urgent,” though no less important, Shannon said. The U.S. remains the region’s dominant investor and trading partner: Foreign aid to Colombia to fight drug traffickers and Marxist rebels totals $700 million a year, and remittances from Latin Americans living in the U.S. totaled $66.5 billion last year.

Monroe’s Doctrine

The Monroe Doctrine, which dates back to 1823, declared Latin America off-limits to European powers. Whether welcomed by the region or not, it has been invoked whenever real or imagined security threats to U.S. interests arise, says Gaddis Smith, a retired Yale University historian of American foreign policy.

“Its essence is unilateralism; no Latin American country had any say in it,” says Smith, whose more than a dozen books on American foreign policy include “The Last Years of the Monroe Doctrine.”

The real battle is for a larger share of the region’s abundant resources and expanding economies, and China has led the way.

Two-way trade with the region shot up 12-fold since 1995 to $110 billion last year, according to the Inter-American Development Bank. China’s share of the region’s imports also jumped, to 24 percent from 9.8 percent in 1990, while the U.S. share shrunk to 34 percent from 43 percent. Two years after reaching a bilateral free-trade agreement, China’s demand for copper made it Chile’s biggest export market in 2007, replacing the U.S.

Hu’s Trips

Since making his first of three trips to Latin America in 2004, China’s President Hu Jintao has spent more time in the region than Bush -- 22 days to 20 for the U.S. president. In October, as the global credit crunch dried up lending in the region, China joined the Inter-American Development Bank with a $350 million loan to finance small businesses. This month it pledged $10 billion in loans to state-controlled Petroleo Brasileiro SA so Brazil can develop the Western Hemisphere’s largest oil discovery since 1976.

“The Chinese play up the development side of diplomacy so much better than the Americans,” says William Ratliff, a research fellow at Stanford University’s Hoover Institution who has a Ph.D. in Chinese and Latin American history. “Deals come with none or very few strings attached.”

Even Colombia, which is spending $115,000 a month lobbying the U.S. Congress to approve a stalled free-trade pact, signed an investment treaty last month with China. During this year’s U.S. campaign, President-elect Barack Obama said he opposed the accord over concerns that Colombia isn’t doing enough to stamp out violence against labor organizers.

Colombian President Alvaro Uribe today canceled his plans for the summit to monitor rescue efforts involving 200,000 people affected by flooding over the weekend.

Arms Deals

Changing relationships are also evident in arms deals. Chavez turned to Russia for at least $4.4 billion in weapons after the U.S. blocked sales of aircraft parts. Brazil, the region’s largest economy, is also shopping around: Defense Minister Nelson Jobimsaid in Washington this month that his government will only buy weapons from countries that agree to transfer technology for local production.

Plans to purchase 36 new fighter jets, in which Boeing’s F- 18 is competing for a contract against Stockholm-based Saab AB and France’s Dassault Systemes SA, “can only be justified politically if they contribute to national development,” Jobim said.

Brazil may sign a deal with France for four nuclear submarines intended to help secure its oil basins in the Atlantic when French President Nicolas Sarkozy visits Brazilian President Luiz Inacio Lula da Silva this month.

Reactivating a Fleet

The U.S. plan to reassert its naval presence by reactivating the Fourth Fleet after 58 years to patrol the Caribbean has triggered negative reactions ranging from Chavez’s threat to sink the convoys to the more-diplomatic Lula’s demand for explanations from the Bush administration.

Latin American leaders are looking to Obama to restore relations after the Bush presidency’s initial pledges of greater engagement gave way to a focus on the 9/11 terror attacks and wars in Iraq and Afghanistan. Yet the honeymoon with Obama may be short-lived, says Michael Shifter, vice president of the Inter- American Dialogue in Washington. He says that the issues that have dominated Latin American relations -- including Cuba, immigration and U.S. trade barriers on agricultural products -- may remain in dispute.

“Latin America wants the U.S. to be engaged, but in very different terms that it has in the past,” says Shifter. “In any case, they’re not waiting around for the U.S. to change its mindset.”

Google New World Order

2008-12-15T06:44:00.000-08:00

The celebrated openness of the Internet -- network providers are not supposed to give preferential treatment to any traffic -- is quietly losing powerful defenders.

Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content, according to documents reviewed by The Wall Street Journal. Google has traditionally been one of the loudest advocates of equal network access for all content providers.

At risk is a principle known as network neutrality: Cable and phone companies that operate the data pipelines are supposed to treat all traffic the same -- nobody is supposed to jump the line.

One major cable operator in talks with Google says it has been reluctant so far to strike a deal because of concern it might violate Federal Communications Commission guidelines on network neutrality.

"If we did this, Washington would be on fire," says one executive at the cable company who is familiar with the talks, referring to the likely reaction of regulators and lawmakers.

Separately, Microsoft Corp. and Yahoo Inc. have withdrawn quietly from a coalition formed two years ago to protect network neutrality. Each company has forged partnerships with the phone and cable companies. In addition, prominent Internet scholars, some of whom have advised President-elect Barack Obama on technology issues, have softened their views on the subject.

The contentious issue has wide ramifications for the Internet as a platform for new businesses. If companies like Google succeed in negotiating preferential treatment, the Internet could become a place where wealthy companies get faster and easier access to the Web than less affluent ones, according to advocates of network neutrality. That could choke off competition, they say.

For computer users, it could mean that Web sites by companies not able to strike fast-lane deals will respond more slowly than those by companies able to pay. In the worst-case scenario, the Internet could become a medium where large companies, such as Comcast Corp. in cable television, would control both distribution and content -- and much of what users can access, according to neutrality advocates.

The developments could test Mr. Obama's professed commitment to network neutrality. "The Internet is perhaps the most open network in history, and we have to keep it that way," he told Google employees a year ago at the company's Mountain View, Calif., campus. "I will take a back seat to no one in my commitment to network neutrality."

Barack Obama
But Lawrence Lessig, an Internet law professor at Stanford University and an influential proponent of network neutrality, recently shifted gears by saying at a conference that content providers should be able to pay for faster service. Mr. Lessig, who has known President-elect Barack Obama since their days teaching law at the University of Chicago, has been mentioned as a candidate to head the Federal Communications Commission, which regulates the telecommunications industry.

The shifting positions concern some purists. "What they're talking about is selling you the right to skip ahead in the line," says Ben Scott, policy director of Free Press, a Washington-based advocacy group. "It would mean the first part of your business plan would be a deal with AT&T to get into their super-tier -- that is anathema to a culture of innovation."

Advocates of network neutrality believe it has helped the Internet drive the technology revolution of the past two decades, creating hundreds of thousands of jobs.

The concept of network neutrality originated with the phone business. The nation's longtime telephone monopoly, nicknamed Ma Bell, and its regional successors were prohibited from giving any public phone call preference in how quickly it was connected. When the Internet first boomed in the 1990s, content largely traveled via telephone line, and the rule survived by default.

'Dumbpipes'
The carriers picked up the unflattering nickname "dumbpipes," underscoring their strict noninterference in the Internet traffic surging over their networks. The name heightened resentment among the carriers toward the soaring wealth of the content providers, such as Amazon.com Inc., that couldn't exist without the networks of the telecom and cable companies.

In August 2005, amid a deregulatory environment, the FCC weakened network neutrality to a set of four "guiding principles." The step had the effect of making the FCC's power to enforce network neutrality subject to interpretation, emboldening those looking for ways around it.

Stirring the waters further, major phone companies including AT&T and Verizon announced they intended to create new fast lanes on the Internet -- and would charge content companies a toll to use it. They claimed Internet companies had been getting a free ride.

That unleashed a firestorm of criticism. A diverse group including Internet companies Google, Microsoft and Amazon joined the likes of the Christian Coalition, the National Rifle Association and the pop singer Moby in what they characterized as a fight to "save the Internet." The coalition claimed such steps could endanger freedom of speech.

Advocates of network neutrality also claimed that dismantling the rule would be the first step toward distributors gaining control over content, since they could dictate traffic according to fees charged to content providers. The fortunes of a certain Web site, in other words, might depend on how much it could pay network providers, rather than on its popularity.

That concern would grow if the carriers themselves offer content, which some have tried, with mixed success. AT&T, the country's largest broadband provider, recently launched its own online video service, called VideoCrawler, to compete with YouTube and others.

"One way AT&T can win that competition is to give their own video service preferential treatment on their network," says Robert Topolski, a networking engineer based in Portland, Ore. An AT&T spokesman says the company has no plans to give VideoCrawler preferential treatment on its network.

Mr. Topolski discovered that Comcast was slowing a video file-sharing service called BitTorrent. That discovery eventually led to sanctions against Comcast by the FCC. Comcast has appealed the decision, arguing the FCC did not have the authority to make such a ruling.

In 2006, Microsoft felt strongly enough about the issue that it wrote Congress to declare that saving network neutrality "could dictate whether the U.S. will continue to lead the world in Internet-related technologies."

The debate eventually reached a stalemate. Legislation to codify network neutrality failed to pass, and carriers backed off their plans for a tiered Internet.

During his presidential campaign, Mr. Obama spoke frequently about the Internet, which was a critical tool in his grass-roots effort to reach new voters, and the importance of network neutrality. "Once providers start to give privilege to some Web sites and applications over others, then the smaller voices get squeezed out," he told Google employees a year ago when he campaigned at the company. "And then we all lose."

Obama Advisers
But some of those who advise the new president on technology have changed their view on network neutrality. Stanford's Mr. Lessig, for one, has softened his opposition to variable service tiers. At a conference, he argued that carriers won't become kingmakers so long as the faster service at a higher price is available to anyone willing to pay it.

"There are good reasons to be able to prioritize traffic," Mr. Lessig said later in an interview. "If everyone had to pay the same rates for postal service, than you wouldn't be able to differentiate between sending a greeting card to your grandma versus sending an overnight letter to your lawyer."

Some telecom experts say that broadband is the most profitable service offered by phone and cable companies, and they are simply trying to offset declining revenue from their traditional phone business.

In the two years since Google, Microsoft, Amazon and other Internet companies lined up in favor of network neutrality, the landscape has changed. The Internet companies have formed partnerships with phone and cable companies, making them more dependent on one another.

Microsoft, which appealed to Congress to save network neutrality just two years ago, has changed its position completely. "Network neutrality is a policy avenue the company is no longer pursuing," Microsoft said in a statement. The Redmond, Wash., software giant now favors legislation to allow network operators to offer different tiers of service to content companies.

Microsoft has a deal to provide software for AT&T's Internet television service. A Microsoft spokesman declined to comment whether this arrangement affected the company's position on network neutrality.

Amazon's popular digital-reading device, called the Kindle, offers a dedicated, faster download service, an arrangement Amazon has with Sprint. That has prompted questions in the blogosphere about whether the service violates network neutrality.

"Amazon continues to support adoption of net neutrality rules to protect the longstanding, fundamental openness of the Internet," Amazon said in a statement. It declined to elaborate on its Kindle arrangement.

Amazon had withdrawn from the coalition of companies supporting net neutrality, but it recently was listed once again on the group's Web site. It declined to comment on whether carriers should be allowed to prioritize traffic.

Yahoo now has a digital subscriber-line partnership with AT&T. Some have speculated that the deal has caused Yahoo to go silent on the network-neutrality issue.

An AT&T spokesman said the company should be able to strike any deal it sees fit with content companies. Yahoo said in a statement that carriers and content companies "should find a consensus on how best to ensure that Americans have access to a world-class Internet."

Google Connections
Google, with its dominant market position and its perceived ties to the Obama team, may hold the most sway. One of President-elect Obama's most visible supporters during the campaign was Eric Schmidt, Google's chief executive officer. Mr. Schmidt remains an adviser during the transition.

Eric Schmidt
Google's proposed arrangement with network providers, internally called OpenEdge, would place Google servers directly within the network of the service providers, according to documents reviewed by the Journal. The setup would accelerate Google's service for users. Google has asked the providers it has approached not to talk about the idea, according to people familiar with the plans.

Asked about OpenEdge, Google said only that other companies such as Yahoo and Microsoft could strike similar deals if they desired. But Google's move, if successful, would give it an advantage available to very few.

The matter could come to a head quickly. In approving AT&T's 2006 acquisition of Bell South, the FCC made AT&T agree to shelve plans for a fast lane for 30 months. That moratorium expires in the middle of next year. A Democratic lawmaker has already promised new network-neutrality legislation early in 2009. And a new chairman of the FCC could take a stricter position on forcing companies to comply with network neutrality.

Richard Whitt, Google's head of public affairs, denies the company's proposal would violate network neutrality. Nevertheless, he says he's unsure how committed President-elect Obama will remain to the principle.

"If you look at his plans," says Mr. Whitt, "they are much less specific than they were before."

Fraud upon Fraud, World Seeks Scapegoats

2008-12-15T06:28:00.000-08:00

Top world financial groups on Monday revealed massive potential losses from an alleged scam run by Wall Street trader Bernard Madoff, admitting they were fooled by a classic pyramid investment fraud.
British, French, Japanese and Spanish banks and funds said investments totalling billions of dollars (euros) could be wiped off their balance sheets by a scandal that is set to affect some of the richest people in the world.

Royal Bank of Scotland said it could lose about 400 million pounds (598 million dollars, 444 million euros), joining a growing list of banks and investors in Europe, Asia and the United States struck by the scandal.

Shares in Santander, the biggest bank in Spain and the second largest in Europe after HSBC , plunged after the lender said it had an exposure of more than three billion dollars to Madoff Investment Securities in New York.

France's Natixis investment bank, already brought low by subprime losses, put its maxiumum exposure at 450 million euros (606 million dollars). Retail banking giant BNP-Paribas revealed potential losses of 350 million euros.

Japanese financial giant Nomura said it could lose up to 303 million dollars and officials in South Korea said financial institutions there a total exposure of some 95 million dollars to Madoff's scandal-hit investment scheme.

Madoff, a 70-year-old Wall Street veteran, was arrested last Thursday.

He is alleged by US prosecutors to have confessed to defrauding investors of 50 billion dollars in a long-running scam that collapsed after clients asked for their money back as a result of the global financial crisis.

Banks around the world have rushed to disclose potential losses from the scandal in an apparent bid to avert any deepening of the suspicion which has frozenh credit markets, and in stark contrast to widespread reticence in recent months as the subprime mortgage crisis unfolded.

US authorities allege that Madoff delivered consistently strong returns to clients by secretly using the principal investment from new investors to pay out to other investors in the scheme, a version of what is known as "pyramid fraud".

The scheme apparently worked as long as he could attract new investors but seems to have unravelled when some of Madoff's clients asked to withdraw their principal -- only to discover that his seemingly brimming coffers were empty.

This fraud is also known as a "Ponzi scheme" after a US swindler from the 1920s, Charles Ponzi, who cheated thousands of mostly small-time investors of their savings by promising returns of 40 percent by means of foreign exchange arbitration on international reply-paid postage stamps.

British investment fund Bramdean Alternatives Limited, which said it had put about 31.2 million dollars in Madoff's company, said that the scandal raised "fundamental questions" about the American financial regulatory system.

"It is astonishing that this apparent fraud seems to have been continuing for so long, possibly for decades, while investors have continued to invest more money into the Madoff funds in good faith," the firm said in a statement.

Britain-based hedge fund manager Man Group said it had invested 360 million dollars in Madoff Securities. The fund said in a statement that "it appears that a systematic and comprehensive fraud may have been committed."

Property magnate Vincent Tchenguiz, one of Britain's richest people, was reported to be potentially affected to the tune of millions of pounds by the scam, which the Wall Street Journal says has also hit wealthy US investors.

Meanwhile Britain's HSBC declined to comment on a report in the Financial Times that it had potential exposure of 1.5 billion dollars. A spokesman for HSBC in Hong Kong said he had "no comment" to make on the report.

Spain's El Pais newspaper reported that the country's second-biggest bank, BBVA, could lose hundreds of millions of euros in the scam. The report said "some managers put the figure at around 500 million."

French insurance giant Axa on Monday said that its potential losses were below 100 million euros and top banks Societe Generale and Credit Agricole each said that their exposure was under 10 million euros.

Italy's biggest bank, UniCredit, said its exposure was around 75 million euros but added that an investment unit Pioneer Investments may also have been indirectly affected without giving any further details.

Banco Popolare said its exposure amounted to 68 million euros.

In Switzerland, Geneva private banks could lose up to five billion dollars (3.7 billion euros) in the scam, Swiss newspaper Le Temps reported, while private bank Reichmuth & Co said it may have lost 328 million dollars.

Sweden's Nordea banking group said its exposure was 48 million euros.

Germany's Deutsche Bank and Commerzbank have declined to comment on the effects of the Madoff scam. A spokesman for Commerzbank told AFP that there would be no comment on particular investments because of "banking secrecy."

Peter Schiff .. Again

2008-12-14T14:40:00.000-08:00

Celente , US Goes to 2 Class State

2008-12-13T15:32:00.000-08:00

Things Gotto Change

2008-12-12T19:36:00.000-08:00

Sen DeMints Warns of Civil Unrest Over Bailouts

2008-12-11T16:52:00.000-08:00

Business & Media Institute
12/11/2008 1:28:37 PM

Time and again we’ve heard about the lost jobs and economic impact of failing to bail out the beleaguered American auto manufacturers. But little mention has been made of the consequences of going through with the bailout, and how such an action would be viewed by other Americans.

In an interview following a Dec. 10 press conference where he and four other senators aired their opposition to the proposed bailout deal struck by congressional leaders and the White House (and approved by the U.S. House of Representatives 237-170 that evening), Sen. Jim DeMint, R-S.C., warned that the perception that some industries are being bailed out and some aren’t could lead to violence.

“We’re going to have riots. There are already people rioting because they’re losing their jobs when everybody else is being bailed out. The fairness of it becomes more and more evident as we go along. The auto companies may be hurting,” he said, but “there are very few companies that aren’t hurting and they’re going to hurt. We don’t have enough money to bail everyone out.”

DeMint blamed the unions for pushing this issue as far as it has gotten. The senator said the notion that reorganization under bankruptcy would not work was generated by the unions for fear of losing their power.

“The primary driver behind this is the unions, because bankruptcy allows the auto companies to basically restructure all their contracts in a way that a bankruptcy judge says will make them sustainable,” DeMint said. “And if they do that, then essentially the unions lose all their leverage. It’s the unions that have brought them to the brink. So definitely, I think the reason they want a political solution and a car czar is because a car czar can protect the unions through this whole process at the expense of the taxpayer.”

The result of the bailout culture that now exists on Capitol Hill will be incredibly high rates of inflation down the road as the economy picks back up and prices reflect the amount of new money circulating through the economy.

“There is no question this will result in inflation,” DeMint said. “The amount of money we’ve borrowed, the amount of money we’ve printed has put us in a more dangerous situation than we’ve ever been in as a country. We may not see the inflation as long as the economy is slow. But, I’ve talked to some economic experts and once the economy starts picking up with so much money in the money supply and so much debt, we’re likely to see very high interest rates and very high inflation rates.”

DeMint went as far as to say that General Motors (NYSE:GM), one of the big three auto manufacturers lobbying for bailout money, was better off than the nation that’s debating whether to rescue it..

“If you look at where we’re going, we’re not on a sustainable course as a country,” DeMint said. “Frankly, GM is in a better financial situation than we are as a country. The only difference is we can print money. But as other countries around the world lose confidence in the value of a dollar – that’s going to come home very shortly.”

Asset Stripping the US

2008-12-11T11:08:00.000-08:00

Peter Schiff on HYPERINFLATION

2008-12-10T15:03:00.000-08:00

Santa's Big Brother

2008-12-09T18:30:00.000-08:00

T-BILL's Go Negative!

2008-12-09T16:05:00.000-08:00

By Daniel Kruger and Cordell Eddings

Dec. 9 (Bloomberg) -- Treasuries rose, pushing rates on the three-month bill negative for the first time, as investors gravitate toward the safety of U.S. government debt amid the worst financial crisis since the Great Depression.

The Treasury sold $27 billion of three-month bills yesterday at a discount rate of 0.005 percent, the lowest since it starting auctioning the securities in 1929. The U.S. also sold $30 billion of four-week bills today at zero percent for the first time since it began selling the debt in 2001.

“It’s the year-end factor,” said Chris Ahrens, an interest-rate strategist in Greenwich, Connecticut, at UBS Securities LLC, one of the 17 primary dealers that trade directly with the Federal Reserve. “Everyone wants to be in bills going into year-end. Buy now while the opportunity is still there.”

The benchmark 10-year note’s yield tumbled 11 basis points, or 0.11 percentage point, to 2.63 percent at 4:48 p.m. in New York, according to BGCantor Market Data. The 3.75 percent security due in November 2018 gained 31/32, or $9.69 per $1,000 face amount, to 109 23/32. The yield touched 2.505 percent on Dec. 5, the lowest level since at least 1962, when the Fed’s daily records began.

The two-year note’s yield fell 10 basis points to 0.84 percent. It dropped to a record low of 0.77 percent on Dec. 5.

If you invested $1 million in three-month bills at today’s negative discount rate of 0.01 percent, for a price of 100.002556, at maturity you would receive the par value for a loss of $25.56.

‘Horrible Year’

Indirect bidders, a group that includes foreign central banks, bought 47.2 percent of the four-week bills, compared with 31.7 percent in the prior auction. Primary dealers bought 52.1 percent, while direct bidders such as individual investors purchased 0.7 percent.

“It’s been such a horrible year people want to show they have the good stuff on their balance sheets, not the bad stuff, but with yields already so low it pushes these even lower,” said Theodore Ake, the head of Treasury trading in New York at Mizuho Securities USA Inc., another primary dealer.

The rate on four-week bills peaked at 5.175 percent on Jan. 29, 2007. The government began issuing the four-week bills in July 2001, according to Stephen Meyerhardt, a spokesman for the Bureau of Public Debt in Washington. The bills are intended to reduce the government’s reliance on irregularly issued cash management bills.

Meyerhardt wasn’t aware of the three-month bill ever trading at a negative rate before.

Housing Slump

Treasuries of all maturities have returned 11.4 percent this year, according to Merrill Lynch & Co.’s U.S. Treasury Master Index. That compares with a 39 percent loss in the Standard & Poor’s 500 Index, including reinvested dividends.

Bonds have surged as the U.S. housing slump pushed up the cost of credit globally, causing equity markets to tumble. The world’s biggest financial companies incurred almost $1 trillion in writedowns and credit losses since the start of last year, helping push the major economies into recession.

Treasuries rallied today as stocks snapped a two-day winning streak after companies from FedEx Corp. to Danaher Corp. forecast earnings that disappointed investors as the deepening recession crimps sales. The S&P 500 lost 2.3 percent.

‘The Bottom Line’

“The bottom line is there’s still a good amount of cash on the sidelines, and people are trying to figure out how they want to allocate that capital,” said Richard Bryant, a trader of 30- year bonds at primary dealer Citigroup Global Markets Inc. “The answer is still Treasuries for a lot of people.”

The National Association of Realtors’ index of signed purchase agreements, or pending home resales, fell a less-than- forecast 0.7 percent to 88.9 from a revised 89.5 in September, according to a report from the group today in Washington.

Futures contracts on the Chicago Board of Trade show 100 percent odds t the Fed will lower its 1 percent target rate on overnight loans between banks to 0.25 percent on Dec. 16. The probability was 38 percent a week ago.

Rate predictions based on the futures are not considered as accurate as they once were because the central bank hasn’t sought to bring the daily effect rate to the level of its target.

Mutual Funds

Money-market mutual funds that buy mostly Treasuries are starting to turn away new investors as the record low yields pull down returns for shareholders and squeeze managers’ fees.

At least three Treasury money-market funds run by JPMorgan Chase & Co., Evergreen Investments and Allegiant Asset Management recently stopped taking outside cash, according to Web site notices and regulatory filings. Barring new customers protects returns for investors already in the funds because managers don’t have to buy as many new Treasuries with yields lower than current holdings. Higher fund yields also prop up management fees.

The record low borrowing costs for the Treasury Department may turn out to benefit President-elect Barack Obama as he faces a widening budget deficit while pledging to embark on the biggest U.S. public works plan since the 1950s to stimulate the economy.

The U.S. is headed toward $1.5 trillion in debt sales as the budget deficit approaches $1 trillion in the 2009 fiscal year according to Bank of America Corp. The deficit this year was $455 billion.

The Treasury will sell $28 billion of three-year notes tomorrow and $16 billion of 10-year notes the following day. The $44 billion total is about $3 billion more than expected by Wrightson ICAP LLC.

Emu Breeders , Bailouts and Gold

2008-12-08T19:08:00.000-08:00

Filed under: Trader Dan Norcini

Dear CIGAs,

The selling pressure at the Comex gold let up for a bit this morning as US equity markets were all going ga-ga over the proposed infrastructure expenditure program being discussed by the incoming administration next year. After all, what’s another $trillion here or there when you are already talking about bailing out anything that once moved and no longer does. Now we have the states lining up to get their share of the public dole from the feds. I am waiting for the catfish farms… seems like no one wants to eat fried catfish these days. And what about all those US Emu growers and the guys selling Alpacas?

Personally I like the Aussie model where they just print money and send it directly to the citizenry. I sent them a request by Fed-Ex this morning! Think about all those plasma TV’s and Ipods you can buy with that kind of money. Heck, with gasoline prices dropping closer to $1.00 gallon again, maybe some folks will spring for a Yamaha 4 wheeler. OPEC would love that. I am thinking that we should get some bumper stickers printed up – you know the ones that say; “I did my civic duty and voted – how about you?”… ours could read, “I did my civic duty and spent what I don’t have, how about you?”

By the way, OPEC might be gambling with the markets and deliberately trying to squash all the alternative energy source planning with cheap crude. That is about the only thing that I can come up with to explain the kind of eerie silence coming from them as crude drops lower and lower. Maybe they figure that cheap gasoline prices will dissuade politicians from subsidizing bio-fuels, wind and nuclear power startups which will compete with their product in the long run.

Once again we have the same old same ol’ as far as the gold market goes. The equities go up, the dollar goes down. Gold goes up and so does the commodity world. Tomorrow, who knows? One thing is certain – the hedge funds are out of control and the continued liquidation is causing horrific conditions as far as liquidity issues go. There are simply too many air pockets both over and the under the markets. It takes hardly anything in the way of an order size to move them.

Sure enough – as we have come to see over and over again – the usual price capping goons showed up at the Comex to knock it down off its best levels of the session. As I write this part of the commentary, gold is down $14 off its session high. The only answer to this is to continue taking delivery of the physical gold and getting it out of the Comex warehouses. We had a decent day of deliveries assigned this morning, along that line, with another 255 occurring. That brings the total deliveries for the month of December to 12,419 or 1.24 million ounces of gold. Warehouse totals remain relatively unchanged for the registered category at around 2.9 million ounces so we are close to 43%. The biggest stopper today, as was the case last Friday is HSBC. Bank of Nova Scotia was a net seller of 105 contracts. I am waiting to see a drop off in that registered category to see if the gold for these deliveries is actually leaving the warehouses.

Open interest continues to disappear - more deleveraging and index fund redemptions. I am hopeful that the worst will be over when the calendar changes to 2009. An open interest collapse of nearly 56% is simply humungous in any market.

Technically, February gold hit its session high right on the 50 day moving average. It will take a close above former resistance near $790 to spark more short covering and perhaps bring in some fresh buying. First support is at last Friday’s session low near $740.

The HUI ran up and into resistance at the 10 day moving average near the 225 level. That level closely corresponds to horizontal resistance near the 224-226 which are the swing highs make back in early November. A close above this level would be constructive for the mining shares as it would put them back above the 50 day moving average. Next resistance comes in at 250. Support is last Friday’s low near the 191 level. By the way, with today’s up move, the HUI has the 10 day and the 20 day both back above the 40 and 50 day moving averages. That is definitely NOT BEARISH. The 40 day looks like it might just be giving a hint of finally turning higher after moving lower since the battle of Thermopylae.

Bonds are having quite a schizophrenic-like trading day. I was quite stunned to see them trading higher right alongside of the equity markets earlier this morning. Overnight they were down as could be expected with money moving back into equities. No where but New York! Trying to explain the bonds is pointless anymore.

How Hyperinflation Kills, The German Model

2008-12-06T14:42:00.000-08:00

by Eric deCarbonnel

Here is a reprint of a 1970 report on Germany's hyperinflation. If you read one thing on this site, it should be this.

(emphasis mine, my comments in [blue brackets])

The Nightmare German Inflation
from a NEWS & VIEWS SPECIAL REPORT

"The ones who fared best were the small minority who had the foresight to exchange marks into foreign money or gold very early, before new laws made this difficult and before the mark lost too much value."

Foreword: The many parallels between 1924 Germany and present-day United States are cause for concern. Though the U.S. has not yet reached the depths to which Germany descended in that era, few can look at the constant depreciation of the dollar since the early 1970's and fail to be alarmed. It seems contemporary America differs from 1924 Germany only in the duration between cause and effect. While the German experience was compressed over a few short years, the effects of the American inflation have been more drawn out.

In my view, this has occurred for two good reasons:

First, American central bankers have learned enough from the German experience to delay and extend the consequences of printing too much fiat money.

Second, Germany was a small state isolated from the rest of the world, a pariah nation of sorts following World War I. As a result, it had a difficult time finding a market for its government bonds. German deficits had to be financed internally -- a difficulty which greatly accelerated the printing of fiat currency.

Up until recently, the United States enjoyed a strong world-wide demand for its government paper. Thus, the negative affects of government deficits have been subdued. Now, with consistently low interest rates, and a growing fear globally that U.S. deficits may have run out of control, foreign support for the U.S. bond market has faltered. In the absence of international buyers, the Fed could be forced to monetize an ever larger portions of the debt -- the modern equivalent of printing money.

Whether or not the situation will slip out of control is a matter for debate. The trend, however, is alarming. The largest annual contribution to the outstanding public debt during the Nixon years was $30.9 billion; Ford - $87.2 billion; Carter - $81.2 billion; Reagan - $302 billion; Bush(Sr.) - $432 billion; Clinton - $347 billion; GW Bush - $596 billion. [as you can see, this foreword is severely out of date. GW Bush's annual contribution to outstanding public debt will vastly exceed $596 billion.]

As this report points out, the correlation between deficits and inflation is sacrosanct -- deficits lead to inflation and uncontrolled deficits lead to uncontrolled inflation. Whether or not there will be a Nightmare American Inflation remains to be seen. Let it be said though that the trend is not favorable.

The survivors of the German debacle did so by purchasing gold early in the process. As a citizen and an investor, the best you can do is prepare, and then hope that it doesn't happen here. This report of Germany's hyperinflation, originally published in 1970 by Scientific Market Analysis, could play an important part in your preparation process. There is little doubt it will affect your thinking. - Michael J. Kosares

Introduction

If history teaches anything, it is that government cannot be trusted to manage money. When currency is not redeemable in gold, its value depends entirely on the judgment and the conscience of the politicians. (That is the situation in this country today.)

Especially in an economic crisis or a war, the pressure to inflate becomes overwhelming. Any alternative may seem politically disastrous. Whether it be the Roman emperors repeatedly debasing their coinage, the French revolutionary government printing a flood of assignats, John Law flooding France with debased money, or the Continental Congress issuing money until it was literally "not worth a Continental," the story is similar. A government in financial straits finds its easiest recourse is to issue more and more money until the money loses its value. The entire process is accompanied by a barrage of explanations, propaganda and new regulations which hide the true situation from the eyes of most people until they have lost all their savings. In World War I, Germany -- like other governments -- borrowed heavily to pay its war costs. This led to inflation, but not much more than in the U.S. during the same period. After the war there was a period of stability, but then the inflation resumed. By 1923, the wildest inflation in history was raging. Often prices doubled in a few hours. A wild stampede developed to buy goods and get rid of money. By late 1923 it took 200 billion marks to buy a loaf of bread.

Millions of the hard-working, thrifty German people found that their life's savings would not buy a postage stamp. They were penniless. How could this happen in a highly civilized nation run at the time by intelligent, democratically chosen leaders? What happened to business, to wages and employment? How did some people manage to save their capital while a few speculators made fortunes?

The Years 1914-1921

When the war broke out on July 31, 1914, the Reichsbank (German Central Bank) suspended redeemability of its notes in gold. After that there was no legal limit as to how many notes it could print. The government did not want to upset people with heavy taxes. Instead it borrowed huge amounts of money which were to be paid by the enemy after Germany had won the war, Much of the borrowing was discounted and monetized by the Reichsbank. As explained later, this amounted to issuing straight printing press money.

By the end of the war, the amount of money in circulation had increased four-fold. In view of this, the extent of inflation was less than one might have expected. The consumer price index had risen 140% by December 1918. This was equal to the inflation during the same time in England, a little more than in the United States, but less than in France. Yet the floating debt of the Reichsbank had increased from 3 billion to 55 billion marks!

Why was inflation kept within bounds? For the same reason that it got off to a slow start in the Unites States during World War II. Necessities were rationed and luxury goods were not easily available. Millions of men were at the front and not in the market for goods. Civilians worked hard and had little leisure for spending. People saved money against peace time, and in some cases to evade taxes. But the fuel for inflation was accumulating in the form of vast hoards of money.

The harsh reparation payments imposed on Germany led the mark to depreciate against foreign currencies. Also, the new democratic socialist leaders had promised the people all types of bounties--increased wages, reduced hours, an expanded educational system, and new social benefits. [these promised benefits sound a lot like what Obama has been promising] But all this meant a vastly increased demand on a limited production capacity.

For these reasons inflation resumed after the peace until by February 1920 the price level was five times as high as it had been at the armistice. Yet during this same time the amount of currency in circulation had only doubled. Prices were in fact rising much faster than the rate at which money was being printed. Therefore, reasoned the officials, the price inflation could hardly be blamed on the government. Actually, as we shall see, the ebb and flow of confidence can play a big role in the short-term trend of prices. Confidence in the mark had weakened. At the same time, and as a consequence, billions of hoarded marks came out of hiding and entered the marketplace. The accumulated fuel was burning.

By February 1920 this inflationary episode had run its course. For the next fifteen months the price index held stable. The mark actually gained in value against foreign currencies, so that prices of imported goods fell by some 50%. Here was a golden opportunity to establish a stable currency. However, during these fifteen months the government kept issuing new money. The currency in circulation increased by 50% and the floating debt of the Reichsbank by 100%, providing fuel for a new outbreak. [Again, this calm before the hyperinflationary storm seems very familiar]

In May 1921, price inflation started again and by July 1922 prices had risen 700%. The Reichsbank continued printing new currency, although more slowly than the rate at which prices were rising. In fact, all through this period the issue of currency proceeded at a fairly smooth steady rate, while the price index moved up in great surges, interspersed by periods of stability.

After July 1922 the phase of hyperinflation began. All confidence in money vanished and the price index rose faster and faster for fifteen months, outpacing the printing presses which could not run out money as fast as it was depreciating.

Wholesale Price Index

July 1914
1.0

Jan 1919
2.6

July 1919
3.4

Jan 1920
12.6

Jan 1921
14.4

July 1921
14.3

Jan 1922
36.7

July 1922
100.6

Jan 1923
2,785.0

July 1923
194,000.0

Nov 1923
726,000,000,000.0

The Years 1922-1923 -- Hyperinflation!

From Mid-1922 to November 1923 hyperinflation raged. The table above tells the story. Seemingly Reichsbank officials believed that the basic trouble was the depreciation of the mark in terms of foreign currencies. In late 1922 they tried to support the mark by purchasing it in the foreign exchange markets. However, since they continued printing new currency at a feverish rate, the attempt failed. They merely succeeded in buying worthless marks in return for valuable gold and foreign exchange.

All hope of checking the collapse of the mark vanished in January 1923 when the French--alleging treaty violations--occupied Germany's key industrial district, the Ruhr. Germany subsidized the occupied companies and financed an expensive program of "passive resistance." New billions of marks were printing to finance these heavy new costs. By late 1923, 300 paper mills were working top speed and 150 printing companies had 2000 presses going day and night turning out currency.

Under the forced draft of inflation, business was now operating at feverish speed and unemployment had disappeared. However, the real wages of workers dropped badly. Unions obtained frequent increases, but these could not keep pace. Workers --domestics, farm workers and various white collar groups-- fared especially badly. They had no unions to fight for pay boosts for them, and often they were reduced to hunger. Many people showed visible signs of malnutrition. Skilled workers, writers, artisans and professionals found their wages lagging until they reached the unskilled worker level, which often meant the bare minimum needed to support life.

Businessmen began to abandon their legitimate occupations to speculate in stocks and in goods. Thousands of small businessmen tried to eke out a living by speculating in fabrics, shoes, meat, soap, clothing--in any produce they could obtain. Each fall in the mark brought a rush to the shops. People bought dozens of hats or sweaters.

By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. Food riots broke out. Parties of workers marched into the countryside to dig up vegetables and to loot the farms. Businesses started to close down and unemployment suddenly soared. The economy was collapsing.

[***Key point***] Meanwhile, middle-class people who depended on any sort of fixed income found themselves destitute. [***Key point***] They sold furniture, clothing, jewelry and works of art to buy food. Little shops became crowded with such merchandise. Hospitals, literary and art societies, charitable and religious institutions closed down as their funds disappeared.

Then by a mere effort of will, the government stepped in and stabilized the currency overnight.

Throughout the "miracle of the Rentenmark" the depreciation halted in its tracks, business revived, the inflationary spree was ended although, as we shall see, there was a nasty hangover yet to come.

Millions of middle-class Germans--normally the mainstay of a republic--were ruined by the inflation. They became receptive to rabid right wing propaganda and formed a fertile soil for Hitler. Workers who had suffered through the inflation turned, in many cases, to the Communists. The biggest beneficiaries of this enormous redistribution of wealth were feudalistic industrial leaders who distrusted the democracy and who proved willing to deal with Hitler, thinking that they could control him. The democratic parties and the labor unions lost their capital and were weakened. The liberal democratic regime was discredited.

What caused the inflation?

Our thesis is simple: The inflation was caused by the government issuing a flood of new money, causing prices to rise. Then, as the inflation gained momentum, events seemed to demand the printing of larger and larger issues of currency. [exactly where we are today] To half the process would have taken political courage, and this was lacking. As usual, the true facts were hidden behind a barrage of excuses, explanations and propaganda laying blame on everyone except the true culprit.

First, it would be wrong to think that everyone was opposed to inflation. Many big business leaders accepted it cheerfully. It wiped out their debts. They knew how to protect themselves and even profit--by speculating in foreign exchange, by converting money into goods and fixed plant, by borrowing money from the bank and using it to buy up cheap stocks and competing companies. Their wage costs, in true value, decreased, swelling their profits. Yet many workers also thought that they were benefiting, at least in the earlier stages of the inflation. Their wages were increased, and it took time before they recognized that, with prices soaring even faster, they were actually suffering a cut in true income.

A crew of speculators arose who traded in goods and foreign exchange, they had a vested interest in continued inflations. And the government could not help realizing that the inflation was wiping out its burden of debt and would ease its financial problems.

Above all, it became an article of faith among the political leaders and most ordinary citizens that the inflation was really due to the burden of reparation payments imposed by the peace treaty. This meant, so the argument ran, that Germany would be stripped of its gold, foreign exchange and wealth; it would be bankrupt. Hence, the mark fell in value in terms of gold or dollars. This drop in the foreign exchange value of the mark was said to be the true reason for the inflation.

The German leaders felt that the collapse of the mark was proving how impossible it was for Germany to pay the reparations which were demanded. Stabilization of the mark would have spoiled this "proof." Especially after France occupied the Ruhr in January 1923, it was felt that the destruction of the mark was somehow a blow against the hated occupier--the only patriotic response available to disarmed Germany.

Finally, inflation seemed to bring prosperity. In 1921, when the rest of the world was in a severe post-war recession, production indices in Germany rose sharply. Late in 1921 the mark stabilized temporarily, and business promptly weakened. By early 1922 the mark was sliding again, and business immediately revived. People were buying goods as fast as they obtained money; companies rushed to expand plants and turn money into fixed investment. Germany was actually envied for its "prosperity" by many foreigners. [Does this sound like the last few years here in modern-day America, albeit with people spending on stocks in addition to goods?]

The mechanism of inflation was simple. The government issued paper promises to pay, and the Reichsbank issued money on the security of these promises. When a government spends more than its income, it must borrow. If it merely borrows money from its citizens by selling them bonds, there need be no inflation. Instead of that money being spent or invested by the citizen, it is borrowed and spent by the government, but the total amount of money is not increased.

When the government needs more money than its people are able or willing to lend it, it monetizes the debt. [this is the quantitative easing the fed is hinting about (fed buys treasuries)] That is what happens in this country when the government runs a big deficit. The Federal Reserve (our central bank) "buys" as many bonds as necessary to stabilize the market. It prints money on the security of these bonds. Despite the facade of the government supposedly "borrowing," the net result is the creation of printing press money. (Actually these days the money is created in the form of new bank deposits--checkbook money--but the net result is exactly the same as if bills were printed.)

This is what happened in Germany. The government issued notes which were promptly discounted by the Reichsbank, i.e., the bank issued money on the "security" of these worthless notes. To compound the evil, the bank failed to raise its interest rate sufficiently. Businessmen found it very profitable to borrow money from the bank and buy up goods, shares and companies. Their debt was wiped out within weeks by the rapid inflation, and the businessman remained holding the valuable assets he had bought. The net result was a huge "private inflation" caused by the rapid expansion of credit. Even foreign exchange was bought with borrowed money, so that the Reichsbank actually financed speculation against its own currency. Yet the bank refused to raise interest rates, arguing that this would only add to the cost of business and thus would increase inflation!

The tax system virtually broke down. Businessmen found that by merely delaying tax payments, the depreciation in the mark would virtually eliminate their true value. But the government, lacking adequate income, felt forced to resort more and more to creating money. By October 1923, 1% of government income came from taxes and 99% from the creation of new money.

But the main force which gave inflation its momentum was the steady decrease in the true value of money in circulation. This has been observed in all past rapid inflations and it is vital to understand it if inflation is to be coped with. During the war, as we saw, the price inflation lagged behind the rate at which money was issued. But now, as people lost confidence, prices began jumping much faster than the government could generate new money. Thus the total circulating currency fell drastically when measured in terms of its true value. One economist stated that, "In proportion to the need, less money circulates in Germany now than before the war. This statement may cause surprise but it is correct. The circulation is now 15-20 times that of pre-war days, whilst prices have risen 40-50 times." In fact, the total currency when calculated in gold value fell from 7428 million marks in January 1920 to a mere 168 million by July 1923.

Despite the proliferating billions of trillions of marks, the average citizen found it harder and harder to get enough money for necessities. Banks, short of money, could not honor checks. Businessmen were strapped for money to buy materials and meet payrolls. [just like what is happening today due to credit crisis!] The government faced the same problem. It appeared that there was not too much money around, but rather much too little. The clamor for more money grew on all sides. [just like today's bailouts!] It seemed that any halt to the printing presses would bring business to a standstill and throw millions of workers out on the street. [just like fears of big three bankruptcy!] The government itself would be unable to carry on. Riding a tiger, it dared not dismount. On October 25, 1923, the Reichsbank noted that it had that day printed 120,000 trillion marks. Unfortunately, the day's demand had been for one million trillion. However, it announced that it was expanding production and the daily issue would soon be 500,000 trillion! [PROOF POSITIVE: during the greatest period of hyperinflation in history, the money supply was contracting (deflation). So all the deflationists that think treasuries are safe are in for one hell of a nasty surprise]

Once people lose confidence in a currency, they try to get rid of it. As Lord Keynes pointed out, this makes circulation speed up enormously, and hence prices rise faster than the government can print new money. Marshall, studying this process, concluded that, "The total value of an ' inconvertible paper currency cannot be increased by increasing its quantity; any increase in quantity which seems likely to be repeated will lower the value of each unit more than in proportion to the increase."

Customarily, however, governments blame everyone and everything except themselves for inflation. When inflation lags behind issue of money, as it did in the war, they say that this shows that the issue of money is not dangerously high. Later, when confidence vanishes, and prices soar ahead of currency issues, that again is taken to prove that the government is not to blame--it is only reluctantly issuing money that is desperately needed in view of rising prices.

We will conclude this discussion with a quotation from Dr. Milton Friedman's book, Dollars and Deficits. Friedman notes that after the Russian revolution, the Bolsheviks introduced a new currency. They printed huge amounts of it and soon it became almost worthless. At the same time some of the older Czarist currency still circulated and maintained its value in terms of goods. It appreciated enormously in terms of the new money. Why? This money was not redeemable. Nobody expected the Czarist government to return. Why did this currency hold up? "Because," says Friedman, "there was nobody to print any more of it."

Effects of Inflation on Business

As inflation proceeded, people rushed to buy goods and get rid of their depreciated money. For similar reasons, businessmen hastened to buy machinery, to build new factories, to buy huge stocks of coal, steel and other raw materials. Those who had access to credit borrowed heavily for these purposes, and inflation wiped out their debt. There was a tremendous conversion of working capital into fixed investments. Business was booming and unemployment virtually vanished until the last stages of the inflation.

Farmers got rid of currency by heavy purchases of equipment, and later many were left holding large supplies of useless machinery. Shipbuilding was expanded beyond all market needs. Marginal mines were opened leading to serious overproduction later on. But while basic industries prospered, there was a severe depression in consumer goods industries such as textiles, meat, beer, sugar and tobacco. Too many workers and persons on fixed incomes had lost their purchasing power.

There was a tremendous move toward concentration of industry. Large firms or combinations found it much easier to raise prices, to obtain raw materials and above all to obtain bank credit. Also, they could issue "notgeld" or emergency money which more and more came to replace the paper mark as a medium of exchange. Some of these new industrial combinations were rational and efficient, but many were purely speculative operations. A new breed of financier arose.

Earlier the great German industrial leaders--men like Krupp, Thyssen and Siemens--had developed basic new ideas in technology or in organization. But now the rising stars were those of shrewd speculators and manipulators geared to quick trading and to jumping from deal to deal and from company to company. The most successful were those who saw the trend of events early, who borrowed to the hilt and bought up goods, shares and companies at bargain prices. Conglomerates sprung up forty years before the heyday of the conglomerate movement in the U.S. Perhaps the biggest operator of the day, Hugo Stinnes, formed a giant conglomerate including companies in oil, coal, steel, shipyards, electrical works, insurance, newspapers and hotels. He died in 1924, just before his empire fell apart in the cold winds of the stabilization period. Most of these new mushroom combinations and conglomerates were speculative bubbles which were only able to survive as long as they benefited from ongoing inflation.

Beneath the surface of prosperity there was enormous waste and inefficiency. Much of the new capital plant proved inefficient or unneeded. Middlemen multiplied like locusts, and more and more time and energy went to speculation and to endless paperwork generated by currency fluctuations, new tax law regulations and labor disputes. Speculation caused banks to multiply; there were 100,000 bank workers in 1913 and 375,000 in 1923. Labor became much less productive. Workmen were pre-occupied with their own problems of trading, getting wage boosts, and staying ahead of inflation. With paper wages rising rapidly and full employment, they were less inclined to work hard. Despite the surface boom, net production was really much less than before the war.

Bewildering fluctuations in costs prices and wages made it impossible to allocate resources and production rationally. More and more, the businessman became a speculator in goods and currencies. However, very few businesses failed, since their debts were constantly wiped out by inflation. Bankruptcies had run to 815 per month in 1913; by late 1923 they were 10 per month.

Finally, however, in the last stages of the inflation, the economy began to collapse. Retailers could not get goods or else could not sell at a profit. The money they received was depreciating too fast. Farmers stopped selling their produce. More and more stores became empty. Now unemployment began to soar.

Some economists argued that inflation may have helped Germany by stimulating the building of capital plant and the rationalization of industry. But much of this investment proved to have no value except in the dream world of inflation. Most of the inflation combinations fell apart after stabilization. On the whole, much energy and wealth was wasted in unproductive channels--speculation, paperwork and unprofitable equipment. The working capital of industry was largely dissipated, making that much harder the eventual process of economic rebuilding and rationalization.

Stabilization--The Rentenmark Miracle

In November 1923, a currency reform was undertaken. A new bank, the Rentenbank, was created to issue a new currency--the Rentenmark. This money was exchangeable for bonds supposedly backed up by land and industrial plant A total of 2.4 billion Rentenmarks was created, and each Rentenmark was valued at one trillion old paper marks. From that moment on the depreciation stopped--the Rentenmarks held their value; even the old paper marks held stable. Inflation ceased.

What was the secret of the "miracle of the Rentenmark"? After all, the new currency was not redeemable in anything. Its backing by real property was a fiction, since there was no way by which property could be foreclosed or distributed. Further, there we have the government distributing a vast new supply of money--2.4 billion trillion in terms of the old mark. Ought that not have led to a new wild inflation?

To understand this, we must recall that the real value of the money circulating in late 1923 was small--equal to a mere 168 million pre-war gold marks. The continued depreciation at this point was due to utter lack of confidence--to the belief that the printing presses would run indefinitely. But actually there was a great shortage of and need for money. New money could be introduced without price inflation if only people had confidence in it. How was confidence developed?

First, the government announced that the new currency would be "wertbestaendig"--stable in value. In their hunger for usable money people accepted this, at least until it should be proven false. Then the property backing seemed to give the currency value. True, the Assignats of the French Revolution, backed by fixed property, had depreciated, but still the backing helped.

Second, and certainly most important, the government limited strictly the amount of Rentenmarks which could be issued and it halted the issue and discounting of notes and the creation of paper marks. Finally, after April 1924, the Reichsbank stopped the expansion of credit to businesses which had been stimulating inflation. Businessmen were required to repay loans in gold marks, equal to the original value of the loan. Thereafter, incentive was gone to borrow except for legitimate needs.

In August 1924 the reform was completed by introduction of a new Reichsmark, equal in value to the Rentenmark. The Reichsmark has a 30% gold backing. It was not redeemable in gold, but the government undertook to support it by buying in the foreign exchange markets as necessary. Drastic new taxes were imposed, and with the inflation ended, tax receipts increased impressively. In 1924-1925 the government had a surplus.

After the stabilization, most companies found that they were critically short of working capital. Their funds had been dissipated or converted into goods and plant, and cash was very short. They could no longer rely on a stream of incoming capital at the cost of bond holders and workers. Taxes were again a serious burden, as were wage agreements that had been made under the inflation.

In other ways the business climate changed. Now there was a huge demand for consumer goods, but the capital goods industries which had so overexpanded in the inflation were depressed. Huge stocks of coal, steel and other materials which had been accumulated were a drug on the market. Agriculture and building, however, flourished.

Many of the speculative and conglomerate companies which had been formed in the inflation were unable to survive. They failed, or split up into their original components. In 1923 there had been only 263 bankruptcies; in 1924 there were 6,033. Most of the great inflation speculators were ruined or faded from the business scene. However, strong, well-organized companies like Krupp and Thyssen which had resisted overexpansion and speculation were able to weather the stabilization period and to thrive.

How Investments Fared

At the start it is important to understand how hard it was to obtain real income during the inflation. Professionals, skilled workers and others used to enjoying good income found their real salaries disastrously cut. Those who depended on savings, pensions or investment income for a living faced a terrible situation.

Interest from bonds or savings deposits soon depreciated to where they had no real value. Stocks paid meager dividends or none at all; corporate managements needed the money for working capital, or used it for capital building and speculation. Owners of rental property fared no better; the government froze rents, which soon meant that tenants were occupying premises virtually rent-free. Dipping into capital led to big losses, since cash, bonds and even stocks quickly shrunk drastically in value. The urgent need for income had important effects on the true prices of various types of property and investments.

Cash: Money held in cash lost value rapidly and soon became completely worthless. Of all investment forms, this was the most disastrous.

Bank Deposits: In theory, bank deposits became as worthless as cash. However, after the stabilization the government decreed partial reimbursement, and sums in the range of 15-30% of the original deposit value were repaid. Naturally, however, the great majority of depositors withdrew their funds at some time during the inflation, after much of the value had been lost, and exchanged them for goods. Few Germans held money in deposits through the entire period.

Bonds, Mortgages: As usual in an inflation, bonds and mortgages fell in value even faster than cash. [In other words, US treasuries are the worst possible investment you can make right now] After the stabilization, some restitution was provided by law. Holders of government bonds were reimbursed to the extent of 2.5% of the original bond values. Mortgage holders also received some repayment, while a 1925 law provided for 15-25% reimbursement of corporate bondholders, though the payment was delayed for some years. Here again, few investors held bonds or mortgages throughout the entire period; most holders got rid of them for whatever pittance they would bring during the inflation.

Real Estate: Farmers and holders of urban property seemed to benefit if their property was mortgaged; the inflation soon wiped out the mortgage debt. However, they received no income, as noted above, since rents were frozen. After the stabilization, heavy new taxes and the urgent need for cash forced most holders to remortgage their property, often more heavily than originally, so that their gains were illusory. Still, those who held real estate throughout managed to save the capital thus invested. However, those who sold during the inflation (often through desperate need for cash) fared poorly. Because it brought no income, real estate sold at extremely low real price levels during inflation.

Foreign Exchange: Those who held funds in dollars, pounds or other stable currencies, or in gold, saved their capital. The government set up rigid exchange controls as the inflation proceeded. As usual under such conditions, a black market flourished. The ones who fared best were the small minority who had the foresight to exchange marks into foreign money or gold very early, before new laws made this difficult and before the mark lost too much value.

Personal Property: Capital was preserved by those who early changed it into objects of lasting value--rare coins, stamps, jewelry, works of art, antiques--or into merchandise such as clothing, fabrics, etc. Of course, most people did not understand the advantage of accumulating such property until the inflation was well along. By that time the prices of all goods had risen so much that they seemed outrageously bad bargains. In the event, however, cash proved an even worse bargain.

Common Stocks: In an inflation, common stocks are generally considered a desirable hedge to protect against or even to profit from the rise in prices. In practice, it is not so simple. In this country stock prices have been known to fall violently just when inflation was most evident (1946, 1957, 1966, 1969). Market fluctuations--the rise of exciting new speculative stocks, waves of fear or greed--all make it much too easy to buy or to sell at the wrong time or to go into the wrong stocks.

Getting down to specifics, we can say that those who bought a well-diversified list of stocks in solid, well-established companies quite early in the inflation and who held on throughout the period and also through the stabilization crisis saved much or all of their capital. However, there were many pitfalls along the wayside for the greedy, the fearful and the over-clever. Those who did best were investors with a certain unemotional, stolid character, a basic confidence that strong, well-managed companies would come through, and an immunity to excitement, anxiety and speculative temptations.

Many very sharp but brief advances and declines in the market led to widespread speculation, and well-intentioned investors often wound up as traders. Naturally most of them did as badly as amateur speculators generally do. Many decided that speculation was the only sensible approach; when the entire economy and financial structure was visibly crumbling, who could wait patiently with confidence in the long-range value of anything?

My reaction: Amazingly useful article. I absolutely recommend using it to prepare for what lies ahead.

Cow Gas Tax , too

2008-12-05T20:23:00.000-08:00

No Cash in CA by March

2008-12-05T18:13:00.000-08:00

SAN FRANCISCO (Reuters) – California is on track to run out of cash in February or March and faces a $15 billion cash shortage by the end of its fiscal year in June unless officials plug an $11.2 billion budget gap, according to the state's budget director.

Additionally, if Gov. Arnold Schwarzenegger and lawmakers fail to close the current fiscal year's budget shortfall soon, California, the most populous U.S. state, may in March delay payments to its vendors or hand them notes promising payment, according to a December 1 letter to top lawmakers from the director of the Department of Finance, Michael Genest.

A copy of the letter was obtained on Friday by Reuters.

"Specifically, it now appears certain that available cash reserves from all sources will fall below the cash cushion target of $2.5 billion in February and that the state will begin delaying payments or paying in registered warrants in March," Genest said in his letter.

"To reduce this threat, the administration is also proposing legislation to increase internal borrowable cash resources," Genest added. "However, even with this cash solution the state will not be able to pay all of its bills in the absence of quick action on the budgetary solutions."

The last time California, the world's eighth biggest economy and the largest issuer of U.S. public debt, issued payment promises to vendors was in the early 1990s.

"We're going to be very slim in February and absent any action we go into a negative cash balance in March and that means clearly we're not going to be able to pay all of our bills," said H.D. Palmer, Schwarzenegger's spokesman on state finances. "We need to take very real action to address the immediate crisis ... We're in extraordinary fiscal circumstances."

Legislative leaders were not immediately available for comment on Genest's letter, which came on the heels of Schwarzenegger calling lawmakers into a special session to close the budget shortfall.

The state's revenues have been weakening more than expected, reduced by a lengthy housing slump, sagging retail sales, turmoil in financial markets and rising unemployment.

Schwarzenegger, a Republican, is urging the Democrat-led legislature to back his plan for closing the budget shortfall with a combination of spending cuts and new revenues, including cash from raising the state's sales tax.

Democrats oppose spending cuts and the legislature's Republican minority opposes tax increases, resulting in routine stalemates on spending plans.

Those delays and budgets often tipping into deficit are major reasons why California's general obligation debt rating is paired with Louisiana's at the bottom of Wall Street's state rankings. Standard & Poor's and Fitch Ratings currently have 'A+' ratings on the debt, while Moody's Investors Service has an 'A1' rating on the bonds.

Investors are growing increasingly concerned about the state's finances. Spreads between California general obligation debt and the benchmark triple-A curve for 20- and 30-year maturities are at their highest level of the decade, topping even those when California's GO debt rating fell to 'BBB' in 2003, according to Muni Market Data, a service of Thomson Reuters.

The Bailout Side Show

2008-12-05T14:37:00.000-08:00

Isn’t it fun to watch “Corporate Types” beg for bailouts? It’s classic theater but lousy democracy. You can watch the bailout show while the bankers pick through the remaining carcass of the US economy. The bankers are dividing up the remaining assets in your retirement account and planning how to buy up the country’s remaining net worth for 10 cents on the dollar with their government bailout money. You’re watching GM, Ford and Chrysler drive to Washington and leaving behind their G-5’S.

Just like at the poker table if you can’t tell who the mark is, it’s you! Please don’t become confused by the wheeling and dealings of the Federal Reserve. Understanding the workings of the World’s economy is beyond your ability to comprehend and after all it’s only your future and the future of the free world. How does it feel to have your life’s work being harvested while you watch helplessly?
Hey it’s Christmas. Charge another gift on the credit card and drink some eggnog. You’ll feel better knowing that God’s gift of America is being squandered and divided up by the devils minions.

I and a number of smarter folks than me have been warning you about what’s going on. Our economy has been deliberately destroyed and actions by the Federal Reserve, The Bush Administration and Members of Congress are insuring we won’t be getting back our American Lifestyles for a long time. You and I didn’t do this but we allowed it to happen. Everything you have in dollar based assets will be almost worthless by next summer.

Our government knows as soon as you figure what’s happened you will be plenty pissed. That’s why they are bringing in troops to control you. Our Constitution is being ignored. Our government for the most part is totally corrupt. Your life as an American Free Citizen is quickly coming to an end.

WHAT ARE YOU GOING TO DO ABOUT IT?

Bullets for Currency

2008-12-04T15:03:00.000-08:00

Ammo, the new Dollar

2008-12-04T14:26:00.000-08:00

Star Exponent reports that Fears fueling firearms sales:

(emphasis mine)

Fears fueling firearms sales
By GREG WELTER - Staff Writer
Posted: 12/04/2008 12:19:07 AM PST

Some Butte County residents may find a surprising gift under the Christmas tree this year: a firearm.

Like elsewhere in the U.S., gun sales locally are skyrocketing, reportedly based on fears that President-elect Barack Obama will crack down on the right to bear arms, possibly prohibiting some types of firearms altogether.

A more realistic fear — a spike in the crime rate due to economic hard times — is also playing a role.

The run on gun shops has reportedly been growing since Obama became the Democrat nominee, and heated further just after the election.

At the Tackle Box, on East Park Avenue in Chico, owner Richard Peeples said he can't keep firearms in stock.

"We're back-ordered on just about everything," he said.

Peeples noted that home defense weapons, like shotguns with shorter barrels that are easier to maneuver in a tight space, are especially popular.

"This is all thanks to the election," Peeples said, adding that his customers feel that way.

At Huntington's Sportsman's Store in Oroville, employee Craig Bentley said gun sales have increased dramatically in the past few months.

He suspects that at least some of them are being purchased as Christmas gifts. "On Friday (the day after Thanksgiving) we had our best day ever," Bentley said. "We sold over $40,000 worth of firearms."

But he noted hunting rifles outsold handguns, whose primary purpose is home protection. Among handguns, he said the more potent pistols —

9 mm, .40-caliber and .45-caliber — were the most in demand.

My reaction: Now isn't that reassuring: Gun sales are booming! It isn't a coincidence that there are shortages of both gold and guns. It is a sign that confidence in our economy is rapidly deteriorating.

This brings me to a question I have been wondering: what do you get when you combine an economic collapse, probable shortages of food/gas, and an oversupply of guns? I don't know, but it will not be pretty.

Understanding Rising China , Jim Rogers

2008-12-04T06:02:00.000-08:00

PANIC !

2008-12-02T18:34:00.000-08:00

Schwarzenegger declares fiscal emergency

2008-12-01T16:52:00.000-08:00

Gov. Arnold Schwarzenegger orders the new Legislature into work on its first day to deal with California's dire finances. The state may run out of cash by February or March.
By Jordan Rau and Patrick McGreevy

1:18 PM PST, December 1, 2008

Reporting from Sacramento — Gov. Arnold Schwarzenegger ordered the new Legislature into work on its first day, declaring a fiscal emergency in response to the state's deteriorating finances.

"Without immediate action, our state is headed for a fiscal disaster where everyone will be hurt," Schwarzenegger said at a news conference this afternoon in his Los Angeles office. He urged Californians to press lawmakers to "get off their rigid ideologies."

The state projects a $28-billion deficit by mid-2010, but at the current rate is on track to run out of cash by February or March.

Schwarzenegger called lawmakers back to Sacramento after they adjourned in August to deal with the same set of issues. But that emergency session ended unsuccessfully last Tuesday when a Democratic proposal to cut billions of dollars from schools, healthcare, welfare and other state services and triple vehicle license fees failed to win Republican votes necessary for passage.

Fiscal measures require the approval of two-thirds of both the Senate and Assembly, in effect giving the GOP minority veto power. But the November elections changed little in the partisan standoff: Democrats picked up two seats in the 80-member Assembly, bringing their majority to 51.

No seats changed hands in the Senate, where there are only 24 sitting Democrats because Mark Ridley-Thomas was elected to the Los Angeles Board of Supervisors, leaving a vacancy.

Of the 120 legislators, only 28 are new, and several of those have served before. "There may be a very few that are really new," Schwarzenegger said.

The fiscal emergency Schwarzenegger declared today requires the Legislature to take action within 45 days. If the lawmakers do not, they are not allowed to take action on anything else. However, as a practical matter, it is easy for lawmakers to take some minimal action to meet that threshold.

Rau and McGreevy are Times staff writers.

Forbidden Deployment-Glenn Beck

2008-12-01T12:52:00.001-08:00

GLENN: You know, I was going to talk a little bit about India and Pakistan but I want to change because there's a breaking headline now on Drudge. While the rest of the world is going to pay attention today to Barack Obama and Senator Hillary Clinton and they are going to make this the big story, the big story today, at least for those people that are following the world, should be Pentagon to deploy 20,000 troops inside the U.S. for domestic security.

I told you this story two months ago? Was it two months ago, Joe, when I first found this story. And I said on the air this cannot be true. It can't be true. The only source I could find on that day was in Stars and Stripes and I knew that Stars and Stripes wasn't going to print something about the troops that wasn't true, and I brought that story to you. Now, these guys are being deployed for security for chemical, biological, terrorist activity, natural disaster. But this is what the National Guard is for. The reason why our founding fathers said there would be no standing army is because the federal government has no place in your town. The power to order troops, the power to be able to have people with weapons in your neighborhood must not ever be in the hands of the President or the congress. It must be in the hand of the individual governors. Our founders knew this. 20,000 -- this is a battalion. This is something entirely new.

Now let me ask you this question: Why? They are going to give you all kinds of stories. If anybody really rises up and says anything, if anybody in the media is anything but mindless sheep, they will see exactly what this is but they'll -- I'm sure. I mean, they will go after, you know, they will go after the most ridiculous stories on the planet but when it really comes down to it, they seem to not understand. They seem just to buy the government's excuses on so many things.

When I'm at these book signings, we had a bunch of Constitutions. I bought a bunch of Constitutions from the Constitution Center in Philadelphia and I'm handing them out to anybody who is in the Service and I've signed each one of them and they are little pocket Constitutions and they come up to me. And if they mention the service or I ask people before the book signings, if you are in the Service, introduce yourself. I give them a Constitution and I shake their hand and I look them right straight in the eye and I say, we are counting on you to know this. This is for domestic security. Well, what exactly is domestic security and how many steps does it take before you say domestic security is for martial law? What has to happen? Does anybody see the powder keg that we're sitting on? We are sitting on a powder keg. All that somebody has to do is do something stupid and the place goes up like a match. And I'm telling you our government knows. No one is telling you the truth, but I'm telling you I know what I know, and I know that I know and these people -- I'm not the smartest guy in the bunch. I'm not the sharpest knife in the drawer. I'm not some war gamer. I'm not some, you know, somebody who is -- they would never hire me to put puzzles together, for the love of Pete, at a puzzle store and somehow or another I can see all of these pieces come together and no one else can? Bullcrap. They see it and this is why 20,000 troops are being deployed here in the United States of America. Gang, I warn you fascism is coming and it has nothing to do -- listen to me carefully. It has nothing to do with Barack Obama. Remember this has happened under George Bush's watch. I am not a conspiracy nut. I don't believe in the Star Chamber. I don't believe that there are things going on where these dark meetings are happening. I don't believe any of that. People just keep taking steps one after another because we have to do this. Somebody knows that we are sitting on a powder keg in this country. Somebody knows that we better take precautions because this thing, with the economy -- I'm telling you, I am telling you, I hope to God I'm wrong. I hope in twelve months, A, I'm still on the air; and B, that I can come to you -- mark this -- Stu, you have your calendar. Put this in your calendar.

STU: Okay.

GLENN: That I hope I can come to you today and say -- I mean a year from today I want to be able to go on the air and say I was wrong about the economy; it looks exactly the same as it did last year. I hope to God I can say that to you, but I'm telling you alarm bells are going off in me and they are getting louder and louder and louder and I don't think you are going to recognize this country or its economy next year. And when the economy starts to go, people are going to get more and more desperate, more and more hungry, more and more worried, more and more into conspiracy theories. You have something like what happened over in India a year from now and I think even today, this country has a possibility of turning on itself and we must root ourself in the Constitution. And listen to me and please preach this, say this as much as you can to anyone that listens. This is not a Democrat/Republican thing. This is not Barack Obama is the bad guy and George Bush was the savior. George Bush is the guy who started this ball rolling and Barack Obama is going to continue rolling it. This is a Democrat/Republican political parties both taking us down the same damn road. This is both of them. This is not a problem with the Republicans, it is not a problem with the Democrats. It is an American problem, and Americans will need to solve it. Americans are going to have to solve it by standing their ground. Americans are going to have to say "Excuse me?" And you will not be able to do that unless you are -- unless, A, you know what we are, you know who we are, you know what we're founded on, you know what the Constitution says. Gang, eternal repercussions if we lose liberty. Eternal repercussions. It is in our -- this is our watch. You are a watchman on the tower if you see it coming. The blood of everyone who you could have woken up and said "Storm coming" will be on your hands. If you ring the bell, if you say to people "Prepare, find who you are, find out what we are, keep peace in our heart. Please don't tear each other apart. When an event happens, be a peacemaker." If you don't do those things, all those that you could have alerted, their blood, going to be on your hands for eternity. Those people who won't wake up, you did your job. You've got to move on and wake up others. And I know there are a lot of people that are listening right now and saying to me, "Oh, Glenn, you are such a fearmonger. Oh, Glenn, oh, please, the sky is falling, the sky is falling." Let me tell you something. I wish you could stand in line and meet the people that I have met in the last three weeks as I go from city to city and shake their hand in these bookstores and time and time and time and time again people come up to me: "I saved my savings, I saved $10,000, I saved $20,000." One guy told me last night, "I saved $350,000 because of you. I would have lost $350,000, but you know what? I was listening to you and something in my gut said, you know what, you better take that seriously. I did, and I got my money out. While everyone else was saying, oh, no, stay in, oh, no, invest more." You pray on it. Don't take my word for it. You've got to do your own homework, but you must understand the people in the media, they don't get it. The people in the media, they are not looking at the bigger picture.

You know what, for so many people in the media, their agenda is either liberalism or on the other side I believe their agenda is the parties, the Republican party or the Democratic party. And for those that don't have an agenda, it's just a job, man. It's just a job. I'll tell you why I'm in it. Because believe me, I don't want to be in it. I've told you before I'm ready, man. I'm ready to go live in the side of a mountain, you know, and have a farm and raise some cows and, ooof, all the stuff I swore I never wanted to do, I want to do it. I just want to raise my kids and just have a nice life and just lead a normal life. That's what I want to do. I ain't doing it because I know what time we live in. And if you know what time you live in, you've got to do the hard things. And just because of the times we're living in, let me be very clear on what those things are. If you hear any message other than "Be a peacemaker," if you hear any message that leads you in any direction of hatred, you're on the wrong path. It's a new day, gang, and you're about to enter a new world. Yesterday's thoughts I don't believe apply. What you thought your life was going to be like in five years, I really don't believe it applies anymore. That doesn't mean you stop. I'm still planning on all kinds of things for the next few years. I'm still planning on doing these things and that thing. We're working on projects and we're doing everything because you know what? As I said at the beginning, I hope to God that I'm wrong, and with God's grace and with Americans being Americans and Americans really saying, "Okay," without the tragedy, because this tragedy comes, whatever it is, God help us all, it is going to change things in the blink of an eye, if we can just be those September 12th people, before the tragedy. We're going to be fine. We're going to be fine. But we are so fragile right now, and I don't care what they tell you. They ain't preparing for another Hurricane Katrina. The Pentagon is deploying 20,000 troops inside the U.S. for domestic security. I'm sorry, but I'm trying to figure out how that one works exactly, and that's not Barack Obama doing it. That's George Bush doing it. How exactly are we deploying those troops? Are they under the President's power? Because I don't want George Bush or Barack Obama, I don't want Ronald Reagan controlling the troops inside the country. You don't do that, period. The federal government does not deploy troops for domestic security. The governor does it with the National Guard. They answer to the states. You cannot allow them to have that control. If our federal government, God forbid we get our hands on a dictator, God forbid -- and I know people said to me ten years ago, "Oh, Glenn, we'll never..." gang, we're on the eve of it. I'm not saying it's Barack Obama. Hell, it could be Sarah Palin in four years that does it. But I'm telling you we're on the eve of fascism. And if you give these people power now or in the next two weeks, the next four years, the next eight years, I'm telling you, you get the wrong person in there and you get a crisis situation and that person can grab power. And it is what many people have wanted to happen since Mussolini was in office. A benevolent dictator. Because capitalism, this republic doesn't really work. Read the words of some former Presidents including Wilson and FDR that everybody loves so much. Prepare. Prepare your heart and prepare your mind and prepare your children. Know what you know, know who you are and know that it is essential that you're a peacemaker today.

20,000 Troops- Unconstitutional

2008-12-01T08:25:00.000-08:00

The U.S. military expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe, according to Pentagon officials.

The long-planned shift in the Defense Department's role in homeland security was recently backed with funding and troop commitments after years of prodding by Congress and outside experts, defense analysts said.

There are critics of the change, in the military and among civil liberties groups and libertarians who express concern that the new homeland emphasis threatens to strain the military and possibly undermine the Posse Comitatus Act, a 130-year-old federal law restricting the military's role in domestic law enforcement.

But the Bush administration and some in Congress have pushed for a heightened homeland military role since the middle of this decade, saying the greatest domestic threat is terrorists exploiting the proliferation of weapons of mass destruction.

Before the terrorist attacks of Sept. 11, 2001, dedicating 20,000 troops to domestic response -- a nearly sevenfold increase in five years -- "would have been extraordinary to the point of unbelievable," Paul McHale, assistant defense secretary for homeland defense, said in remarks last month at the Center for Strategic and International Studies. But the realization that civilian authorities may be overwhelmed in a catastrophe prompted "a fundamental change in military culture," he said.

The Pentagon's plan calls for three rapid-reaction forces to be ready for emergency response by September 2011. The first 4,700-person unit, built around an active-duty combat brigade based at Fort Stewart, Ga., was available as of Oct. 1, said Gen. Victor E. Renuart Jr., commander of the U.S. Northern Command.

If funding continues, two additional teams will join nearly 80 smaller National Guard and reserve units made up of about 6,000 troops in supporting local and state officials nationwide. All would be trained to respond to a domestic chemical, biological, radiological, nuclear, or high-yield explosive attack, or CBRNE event, as the military calls it.

Military preparations for a domestic weapon-of-mass-destruction attack have been underway since at least 1996, when the Marine Corps activated a 350-member chemical and biological incident response force and later based it in Indian Head, Md., a Washington suburb. Such efforts accelerated after the Sept. 11 attacks, and at the time Iraq was invaded in 2003, a Pentagon joint task force drew on 3,000 civil support personnel across the United States.

In 2005, a new Pentagon homeland defense strategy emphasized "preparing for multiple, simultaneous mass casualty incidents." National security threats were not limited to adversaries who seek to grind down U.S. combat forces abroad, McHale said, but also include those who "want to inflict such brutality on our society that we give up the fight," such as by detonating a nuclear bomb in a U.S. city.

In late 2007, Deputy Defense Secretary Gordon England signed a directive approving more than $556 million over five years to set up the three response teams, known as CBRNE Consequence Management Response Forces. Planners assume an incident could lead to thousands of casualties, more than 1 million evacuees and contamination of as many as 3,000 square miles, about the scope of damage Hurricane Katrina caused in 2005.

Last month, McHale said, authorities agreed to begin a $1.8 million pilot project funded by the Federal Emergency Management Agency through which civilian authorities in five states could tap military planners to develop disaster response plans. Hawaii, Massachusetts, South Carolina, Washington and West Virginia will each focus on a particular threat -- pandemic flu, a terrorist attack, hurricane, earthquake and catastrophic chemical release, respectively -- speeding up federal and state emergency planning begun in 2003.

Last Monday, Defense Secretary Robert M. Gates ordered defense officials to review whether the military, Guard and reserves can respond adequately to domestic disasters.

Gates gave commanders 25 days to propose changes and cost estimates. He cited the work of a congressionally chartered commission, which concluded in January that the Guard and reserve forces are not ready and that they lack equipment and training.

Bert B. Tussing, director of homeland defense and security issues at the U.S. Army War College's Center for Strategic Leadership, said the new Pentagon approach "breaks the mold" by assigning an active-duty combat brigade to the Northern Command for the first time. Until now, the military required the command to rely on troops requested from other sources.

"This is a genuine recognition that this [job] isn't something that you want to have a pickup team responsible for," said Tussing, who has assessed the military's homeland security strategies.

The American Civil Liberties Union and the libertarian Cato Institute are troubled by what they consider an expansion of executive authority.

Domestic emergency deployment may be "just the first example of a series of expansions in presidential and military authority," or even an increase in domestic surveillance, said Anna Christensen of the ACLU's National Security Project. And Cato Vice President Gene Healy warned of "a creeping militarization" of homeland security.

"There's a notion that whenever there's an important problem, that the thing to do is to call in the boys in green," Healy said, "and that's at odds with our long-standing tradition of being wary of the use of standing armies to keep the peace."

McHale stressed that the response units will be subject to the act, that only 8 percent of their personnel will be responsible for security and that their duties will be to protect the force, not other law enforcement. For decades, the military has assigned larger units to respond to civil disturbances, such as during the Los Angeles riot in 1992.

U.S. forces are already under heavy strain, however. The first reaction force is built around the Army's 3rd Infantry Division's 1st Brigade Combat Team, which returned in April after 15 months in Iraq. The team includes operations, aviation and medical task forces that are to be ready to deploy at home or overseas within 48 hours, with units specializing in chemical decontamination, bomb disposal, emergency care and logistics.

The one-year domestic mission, however, does not replace the brigade's next scheduled combat deployment in 2010. The brigade may get additional time in the United States to rest and regroup, compared with other combat units, but it may also face more training and operational requirements depending on its homeland security assignments.

Renuart said the Pentagon is accounting for the strain of fighting two wars, and the need for troops to spend time with their families. "We want to make sure the parameters are right for Iraq and Afghanistan," he said. The 1st Brigade's soldiers "will have some very aggressive training, but will also be home for much of that."

Although some Pentagon leaders initially expected to build the next two response units around combat teams, they are likely to be drawn mainly from reserves and the National Guard, such as the 218th Maneuver Enhancement Brigade from South Carolina, which returned in May after more than a year in Afghanistan.

Now that Pentagon strategy gives new priority to homeland security and calls for heavier reliance on the Guard and reserves, McHale said, Washington has to figure out how to pay for it.

"It's one thing to decide upon a course of action, and it's something else to make it happen," he said. "It's time to put our money where our mouth is."

Middle Class Squeeze

2008-11-30T06:43:00.000-08:00

Deivatives $ 50 Quaddrillion or 20 Years of Planets GDP

2008-11-29T13:49:00.000-08:00

Prediction : Breakup of US by 2011

2008-11-29T08:31:00.000-08:00

Now 8.5 Trillion!

2008-11-28T18:45:00.000-08:00

by Eric deCarbonnel

Four days ago, I highlighted that the 'U.S. Financial System Bailout Mushrooms to $7.4 Trillion'. That number is no longer correct.

Paul Joseph Watson from Prison Planet.com reports that the cost of bailout hits $8.5 trillion:

(emphasis mine)

Cost Of Bailout Hits $8.5 Trillion
Total sum represents 60 per cent of GDP
Paul Joseph Watson
Prison Planet.com
Wednesday, November 26, 2008

The total cost of funds committed to the bailout in its various guises has now hit $8.5 trillion dollars, up from $7.7 trillion in just two days after the federal government committed an additional $800 billion to two new loan programs on Tuesday.

The total amount of funds now committed equals a figure that represents 60 per cent of the U.S. gross domestic product.

Millions of Americans with savings accounts and pensions will ultimately pay the price because, as the San Francisco Chronicle admits today, “The Fed lends money from its own balance sheet or by essentially creating new money.”

You’ll also find this little snippet in the article, “Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in “unusual and exigent circumstances,” to other financial institutions.

Just another reminder that the private, run for profit, Federal Reserve has the printing presses cranked on overdrive in order to bailout Wall Street and the big banks, while the homeowner and the middle class see their savings devalued out of existence.

“If you print money all the time, the money becomes worth less,” warns Diane Lim Rogers, chief economist with the Concord Coalition, but its an empty threat to delirious traders and investors drunk on a record stock market rally after the government pumped more fake liquidity into the bloated bubble.

Veteran investor Jim Rogers echoed the sentiment, predicting the dollar is “going to lose its status as the world’s reserve currency,” adding, “It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency.”

“They think that if you drive down the value of your money, it makes you more competitive, now that has never worked in history in the long term,” said Rogers.

How long will it be before Americans realize the looming specter of hyperinflation spells disaster for their life savings? How long will it be before we see rioting in the streets on a par with the scenes witnessed in Iceland over the weekend, where the Icelandic krona has lost half its value in a matter of weeks?

Meanwhile, over in the UK, the government assured the vast majority of the population that they will “tax the rich” in order to pay for the bailout on the other side of the Atlantic, with whopping 61 per cent tax bands being levied on those earning over £100,000 a year.

Since when was £100,000 a year “rich”? After tax, even if someone was able to save half of their remaining income, it would take them around 30 years to save a million pounds, adjusting for inflation. That is not rich.

The reality of course is that it is the middle class who will once again foot the bill for everything, leaving the elite to prolong their con game of fiat money and imaginary credit , once again suckering the poor in for a lifetime of indentured financial servitude.

My reaction: The deflation is dead. Long live hyperinflation! Seriously though, the dollar's purchasing power is about to head to zero at a ferocious rate. By the time the Average American figures out what is going, backwardation will have destroyed the futures market, and the dollar will be leading all fiat (paper) currencies into the abyss. Buy physical gold where/if you can find it.