Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Wednesday 09.29.2010

America on the brink of a Second Revolution
2010 elections guarantee gridlock, anti-capitalist class war
By Paul B. Farrell, MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) -- "What's distinctive about the Tea Party is its anarchist streak -- its antagonism toward any authority, its belligerent self-expression, and its lack of any coherent program or alternative to the policies it condemns," warns Jacob Weisberg in Newsweek. But why not three cheers for the Tea Party Express?
Admit it, something historic is brewing. And yes, it's good for America, even the anarchy. Revolution is renewal. Tea-baggers want to take on both parties, "restore honor" and "take back the country." Bring it on, the feeling's mutual.

THE TIME HAS ARRIVED: IS REBELLION AT HAND?
By Greg Evensen - NewsWithViews.com
The countdown clock and the last chance for "The Founder's Legacy" of patriotic Americans willing to lay it all on the line for a new Republic, has hit 0:00. Rebellion is no longer an option, a late night "what if" discussion around a bottle of good wine and snacks. It is now the mandated response of oath keeping citizens and Constitutional defending men and women who have heard Paul Revere in 2010. That "watchman," who made the most famous call to prepare for rebellion in the history of the world, has come again, through all of us who have been riding across our land for several years and warned of the arrival of this most critical moment. It did not materialize lightly or without a desperate realization that it was on the way, and when it did appear at the horizon, life has not and will not ever be the same. Whether you accept this assessment or not, you will be involved in its reality, prepared or not, on board with the need to reclaim this country for freedom's sake or not, courageous enough to muster with the band of the free and brave or not, you WILL still be counted among those who stood and fought with your countrymen, or posterity will judge you as cowards unworthy to live free.

The United States is a dead man walking
By Sheriff Jim R. Schwiesow, Ret. - NewsWithViews.com
The story is that when a condemned convict has finally exhausted his appeals, stays, and pre-execution pleas and is making that final walk to the execution chamber his last faltering steps are marked by these echoing words, "Dead man walking." The words are chilling and at the same time prophetic as they mark with a certainty that soon - very soon - the vital physical functions that sustain life and animate the being will be terminated and he will go from life to death and exist only as a memory.
It occurs to me that nations and civilizations are like men in that they live and function, establish relationships, make enemies and friends, inhabit a temporary space as an infinitesimal speck in a boundless universe, enter into a terminal stage and die, are mourned for a while, and then exist only as a memory. Some live longer than others, some are more prominent than others, some are more benevolent than others, some are more evil than others, but all enter into that final stage and ultimately perish.

States Are Poised to Be Next Credit Crisis for US: Whitney
By: Jeff Cox - CNBC.com Staff Writer
Crippling debts and deficits are about to make individual states the next casualty of the credit crisis, analyst Meredith Whitney told CNBC.
Speaking as her firm, Meredith Whitney Advisory Group, just released a lengthy report on the state of the states, the noted financial analyst compared the looming explosion to the collapse of the financial system in 2008 and 2009.
"The similarities between the states and the banks are extreme to the extent that states have been spending dramatically and are leveraged dramatically," she said. "Municipal debt has doubled since 2000, spending has grown way faster than revenues."

Gold soars above $1,300 an ounce
Yellow metal back at record high; silver also returns to 30-year peak - By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) - Gold cast off initial weakness to settle at a fresh record high above $1,300 an ounce Tuesday, thanks to a weaker dollar and the worst reading on U.S. consumer confidence in seven months.
It was quite a comeback for gold, which started the day in the red but managed to finish above the key psychological mark of $1,300 an ounce.

China set to take centre stage in gold market
By Jan Harvey - Berlin
(Reuters) - The easing of restrictions on China's gold imports should boost its influence on global bullion trade as Chinese investors turn to the open market to satisfy their hunger for the metal, the World Gold Council said.
Chinese gold demand is expected to show at least single digit percent growth this year at a time when high prices are curbing buying in other major physical markets like India, the WGC's Far East managing director Albert Cheng said on Tuesday.

Gold prices set record high on investor worries
By Sandy Shore, Associated Press
Gold prices settled at a record high Tuesday as investors looked for a safety net after sorting through a batch of mixed economic news.
Gold also got a helping hand from a weaker dollar as it rose $9.70 to settle at $1,308.30 an ounce. Earlier in the day, it reached $1,311.80 an ounce.
It's the latest in a series of recent record-setting days for gold as investors seek alternatives to the jittery stock market as prospects for the economy remain uncertain. Many analysts expect the price to continue to climb.

Gold rallies to another record high
By Ben Rooney
NEW YORK (CNNMoney.com) -- Gold prices continued to push higher Tuesday, reaching another record high, amid ongoing concerns about the economy.
Gold futures for December delivery rose $9.70 to settle at $1,308.30 an ounce, topping Monday's all-time closing high of $1,298.60 an ounce.
The metal has hit a series of record highs in recent weeks, including a new all-time trading high of $1,311 an ounce earlier Tuesday.
Gold is up 4.7% over the last month, and has gained more than 30% so far this year.

Is the Gold Rally Strictly a US Dollar Phenomenon?
JESSE'S CAFÉ AMÉRICAIN
One sometimes hears that 'gold is only rallying in US dollars.'
One can always point out that since the US dollar is still the world's reserve currency, it affects everything and everyone that hold it in their reserves or their assets on deposit. A good part of the recent crisis in Europe was caused by the severe deterioration in dollar denominated financial assets held on deposit in commercial banks by private customers, who started to demand their money, in dollars. This precipitated a dollar squeeze and a liquidity crisis.
There is clearly a safe haven trade in gold denominated in US dollars.

Gold well supported by Central Bank buying
By Dan Denning - CommodityOnline.com
The two biggest members of the former Communist/Red/Central Planning club yesterday finalised a deal yesterday to send 300,000 barrels a day of Russian oil to the Chinese city of Daqing for the next twenty years. It's a $26 billion loan-for-oil agreement that comes with an actual oil pipeline between eastern Siberia and north-east China.
--Why wasn't this story front page news? Because gold is making new highs and oil is not. Oil is a jilted commodity at the moment. Traders remember what it did to them in 2008 after the bubble popped. But if you're a contrarian, you want to pay attention to the stories that are not making headlines. Hence, oil.

Stay in Cash and Gold; don't buy stocks at all
The Gold Report: The National Bureau of Economic Research announced last week that not only are we out of the recession but that in fact, it ended in June 2009. They did note that it was the longest recession since the Great Depression. Did this announcement surprise you?
Porter Stansberry: On one hand, I expected the authorities to come out and say everything is getting better at some point, and I also expected that pumping enough money into the economy could stimulate some economic activity. So, I guess in that way, I was expecting it.

John Paulson's Scary Speech:
Double Digit Inflation By 2012, Gold At $4,000
by Courtney Comstock - businessinsider.com
John Paulson scared the pants off of a packed audience at New York's University Club recently as he warned them of huge changes in the economic environment in the years to come.
Forbes' Bob Lenzer reports Paulson's saying:
"If you don't own a home buy one."
"If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home."
Paulson has been bullish on housing for a while now (he runs a housing recovery fund), but this is him hitting super-bull territory. His reasoning is that home prices are great, the bond market is dead, and commodities like gold, which he also has a big prediction for, are on the rise.

US Mint working to finalize 2011 Buffalo Gold Coin plans;
2010 sales suspended
By Allen Sykora of Kitco News - CommodityOnline.com
(Kitco News) - The U.S. Mint is working to finalize plans to produce 2011 American Buffalo one-ounce gold bullion coins after sales of the 2010 coins were halted last week.
The agency sent a memorandum to authorized dealers, dated Sept. 23, announcing that the inventory of 2010 American Buffalo one-ounce gold bullion coins was depleted. No additional ones will be manufactured.
Sales for the year to date were 209,000, said Tom Jurkowsky, director of public affairs for the U.S. Mint. The 2010 coins were first offered April 29. The figure is up from 200,000 of the coins sold in 2009, when they were only available for the October-December period.

Money transfers could face anti-terrorism scrutiny
By Ellen Nakashima - Washington Post Staff Writer
The Obama administration wants to require U.S. banks to report all electronic money transfers into and out of the country, a dramatic expansion in efforts to counter terrorist financing and money laundering.
Officials say the information would help them spot the sort of transfers that helped finance the al-Qaeda hijackers who carried out the Sept. 11, 2001, attacks. They say the expanded financial data would allow anti-terrorist agencies to better understand normal money-flow patterns so they can spot abnormal activity.

Shut Down the Fed (Part II)
By Ambrose Evans-Pritchard - Telegraph.co.uk
I apologise to readers around the world for having defended the emergency stimulus policies of the US Federal Reserve, and for arguing like an imbecile naif that the Fed would not succumb to drug addiction, political abuse, and mad intoxicated debauchery, once it began taking its first shots of quantitative easing.
My pathetic assumption was that Ben Bernanke would deploy further QE only to stave off DEFLATION, not to create INFLATION. If the Federal Open Market Committee cannot see the difference, God help America.

Markets could correct in October-November: Marc Faber
IndiaTimes.com
You are known as Mr Contrarian in India. You always like to advise the reverse of what the global consensus is. The current global consensus is 'buy emerging markets and sell US bonds'. What is your take?
That's correct and there in general, I am still positive about economic growth in the emerging world. But what disturbs me at the present time is that in late August, sentiment was very negative worldwide and people said that Dow will drop to 1000 and so forth and so on. Suddenly now, the consensus is that you have to be in equities, you have to be in gold, you have to be in assets because central banks around the world will print money. That is correct, they will print money. But sentiment has become so universally bullish that about all assets, including especially emerging economies - in US dollar terms - are up. The Indian market this year is already up 19%, Malaysia 28%, the Philippines, Indonesia and Thailand each over 40%.

Debtflation
By David Galland, Managing Editor, The Casey Report
.... First off, I want to congratulate the reader for trying to anticipate the conditions that might mark the end of the gold bull market. Because, make no mistake, the gold bull market will come to an end - and when it does, it's not going to be pretty for those who stubbornly stay too long at the party.
As to the possible triggers for gold's big sell-off, the reader's contention is directionally correct when he points out that this could occur when real interest rates (T-bill rates minus CPI) become high enough. At that point, as a non-yielding asset, gold will become less attractive to investors looking for income. And, gold will fall.
However, the situation today is significantly different than during Volcker's term as the head of the Fed.

U.S. House Likely to Urge China to Raise Its Currency
By SEWELL CHAN - NYTimes.com
WASHINGTON - The House is expected to give the Obama administration another tool in its diplomatic pouch to pressure China to let its currency rise in value, reflecting growing concern