Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Friday 07.29.2011
Cantor's Treasury short... Eric Cantor's glaring conflict of interest He's the GOP's chief debt ceiling negotiator. He's also invested in a fund that will skyrocket if there's a default
BY JONATHAN EASLEY - Salon.com
When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations -- it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.
Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively "shorts" long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)
US municipal bonds may tip cities into bankruptcy
• Jefferson County, Alabama, poised to default on loans
• Downgrade threat to Maryland, New Mexico, South Carolina, Tennessee and Virginia
By Phillip Inman - Guardian.co.uk
Alabama's Jefferson County was last night poised to become the largest municipal bankruptcy in US history after a three-year battle with creditors over a $3.2bn (£1.9bn) loan.
The local authority, possibly the first of many US counties and cities to default on loans, convened a special session to consider terms for a settlement or a 30-day extension to talks. Councillors were also asked to assess whether bankruptcy is the best option after a failure to find a settlement since 2008.
Deal or No Deal, Our AAA Rating Is Toast
By Howard gold - SeekingAlpha.com
It’s been a hot summer, and it’s been even hotter in Washington, D.C., where Democrats and Republicans have been burning down the House with a pitched battle over the debt ceiling, the cap that Congress puts on the national debt.
Usually it’s a mundane bit of legislative business barely worthy of C-Span. Congress hikes spending, and then authorizes an increase in the debt ceiling to pay for it. It’s happened 78 times since 1960. But this year it will likely cause the US’s prized AAA credit rating to go up in smoke.
Could the U.S. Print Its Way Out of the Debt Crisis?
ByCatherine New - DailyFinance.com
By mid-August the government coffers could be running dry if there isn't someupward adjustment to the federal debt ceilingmade by Congress in the next few days. One proposal to deal with the issue: Print more money.
Butprinting more money can mean several different thingsin government-speak. The first way for the nation to make money is to literally print it up at one of themoney factoriesin Washington, D.C., or Fort Worth, Texas. Currency is printed year-round to meet both for increasing demand for more bills and to replace those that wear out and are pulled from circulation. Last December, the Fed placed its 2011 order for 6.7 billion new notes at a value of more than $214 billion.
Global slump warnings if US triggers 'insane' default A chorus of global banks has warned that Washington risks triggering a global slump and may suffer permanent loss of credibility by flirting with default on America's $14.3 trillion (£8.8 trillion) federal debt. - By Ambrose Evans-Pritchard, Telegraph.co.uk
The dangers are almost as great if the US fails to lift the debt ceiling and avoids default by enacting the most drastic fiscal squeeze in modern history.
"Default would be an act of collective insanity," said Willem Buiter, Cititgroup's chief economist. "Even if a default were cured promptly, it would severely dent the credibility of the US as a global financial player and the provider of the world's leading reserve currency. There would be an immediate repricing of the dollar and an increase in medium and long-term nominal and real interest rates. Asset, credit, and funding markets in the US and the world as a whole would likely suffer and a global recession would likely result, centred in the US, but not restricted to it."
US debt crisis: Wall Street warns feuding politicians Chief executives of major banks write to the White House warning that failure to break deadlock would be 'very grave'
By Larry Elliott, Phillip Inman and Graeme Wearden - The Guardian
Wall Street's stark message to President Barack Obama on Thursday was that failure to end the war between Democrats and Republicans over US debt would smash business confidence, cripple the economy and send financial markets plunging.
Chief executives of all the major banks wrote to the White House warning that a continued deadlock over raising the debt ceiling "would be very grave".
With the 2 August deadline rapidly approaching and a vote in the House of Representatives scheduled on Thursday night, the bankers said they wanted to see "meaningful and concrete steps to put our nation on a sound fiscal footing".
Debt deal or not, weak economy is likely to suffer
By Paul Wiseman And Christopher S. Rugaber, AP - AOLNews.com
WASHINGTON -No matter how the debt crisis ends, the economy will probably take a hit. The question is how big.
Failing to raise the federal borrowing limit would force the government to slash spending immediately and possibly cause a default, frightening financial markets and sending interest rates up.
If Washington reaches a deal and does raise the limit, it will probably include long-term spending cuts. The cuts would withdraw government stimulus at a time of weak economic growth and damage the already feeble recovery, at least in the short term.
"Pick your poison," says Ben Herzon, senior economist at Macroeconomic Advisers, an economic forecasting firm.
Re: Obama's Deficit Strategy in April.
I Wouldn't Change a Word Now
By Jim Sleeper - TPMCafe.TalkingPointsMemo.com
The following was posted on April 13, when President Obama gave his big deficit-reduction speech. What would you change here to distinguish his leadership of the past three weeks from the following characterization of it in regard to the same matters four months ago? For an elaboration on what he was confronting then and now, see this post of last week.
President Obama drew luminous lines in the heavens in his speech on deficit reduction today, vowing to defend Medicaid as we know it and to re-open the unmentionable-in-Washington expectation that rich people give back "a little," as he put it, to the society that enabled them to become rich.
The speech was inadequate almost to the point of being empty because, once again, Obama could not or would not tell enough truth to "raise a standard to which the wise and honest can repair," as George Washington put it.
Boehner Pulls Debt Limit Bill Again, With Days Left Before Default
By Brian Beutler - TalkingPointsMemo.com
What was originally described as a brief snafu has turned into a stunning rebuke of House Republican leaders, who were unable Thursday to round up the minimum number of votes to pass Speaker John Boehner's debt limit bill.
The vote, originally scheduled for 6 p.m., was delayed at the last minute, when Boehner and his leadership team finally faced the harsh reality: despite a swing of momentum in their direction over the previous 24 hours, they didn't have the votes. And with no Democrats there to help them, they needed 217 Republicans to be on board. They were not.
GOP Faces Civil War Over Debt
by Kent Hoover - Portfolio.com
Urging his fellow Republicans to "get your ass[es] in line," House Speaker John Boehner is fighting to keep alive his bill to raise the debt ceiling by committing to deep spending cuts and caps.
In the game of chicken over raising the debt ceiling, Republicans today tried to end a cockfight among themselves.
In this morning’s meeting of House Republicans, House Speaker John Boehner spoke bluntly to his caucus: "Get your ass in line," he said, according to Politico. Boehner is struggling to keep conservative Republicans from opposing his bill, which would raise the debt ceiling in two stages, in return for spending cuts and an eventual vote on a balanced budget amendment to the constitution.
He was forced to rewrite his bill today after the Congressional Budget Office concluded the legislation's initial round of cuts would reduce the federal deficit by $850 billion over the next 10 years, not the $1.2 trillion he advertised.
What Happens if We Don't Raise the Debt Ceiling?
By Megan McArdle - TheAtlantic.com
So the tone of my posts railing against default seems to have conveyed one of two false impressions to many of my readers: that I believe there is now a 100% chance that we will fail to increase the debt ceiling; and/or that I believe a failure to raise the debt ceiling will be a catastrophe on par with 6-mile asteroids and volcanic eruptions the size of modern Iran.
Since neither of these is the case, I thought it was probably time to write down what might unfold over the next few days.
I'll start by saying, however, that I have no idea whether we'll get a deal or not. There is one thing I'm sure of: Obama is indeed bluffing with the veto threat, and badly. They could send him a repeal of Obamacare attached to a debt ceiling increase, and he'd sign it. He is not going to endanger our credit rating, or social security checks, in order to prove a point.
The Road to a Downgrade A short history of the entitlement state.
Opinion - WSJ.com
Even without a debt default, it looks increasingly possible that the world's credit rating agencies will soon downgrade U.S. debt from the AAA standing it has enjoyed for decades.
A downgrade isn't catastrophic because global financial markets decide the creditworthiness of U.S. securities, not Moody's and Standard & Poor's. The good news is that investors still regard Treasury bonds, which carry the full faith and credit of the U.S. government, as a near zero-risk investment. But a downgrade will raise the cost of credit, especially for states and institutions whose debt is pegged to Treasurys. Above all a downgrade is a symbol of fiscal mismanagement and an omen of worse to come if we continue the same habits.
Digitizing Money Inflation Changes Nothing
Mises Daily: by Pete Kerr
In preparing for class this past spring, I encountered a video on the Fed's website that obfuscates the fact that the Fed prints money. The six-minute video (posted in January 2011) features economist Steve Meyer, senior advisor to the Federal Reserve Board of Governors.
In discussing the Fed's most recent expansion, QE2, Meyer states,
You may wonder how the Fed pays for the bonds and other securities it buys. The Fed does not pay with paper money. Instead, the Fed pays the seller's bank using newly created electronic funds, and the bank adds those funds to the seller's account. The seller can spend the funds or can simply leave them in the bank. If the funds stay in the bank, then the bank can increase its lending, purchase more assets, or build up the reserves it holds on deposit at the Fed. More broadly, the Fed's securities purchases increase the total amount of reserves that the banking system keeps at the Fed. Whether the Fed's purchases lead to an increase in the amount of money circulating in the economy depends on what banks do with the new reserves and on what sellers do with the funds they receive. As it happens, the money supply has not grown unusually rapidly since the Fed began its first round of asset purchases. If anything the money supply has been growing more slowly than normal.
'Debt limit debate sign of deeper dysfunction'
CommodityOnline.com The Gold Report: Unless Congress approves and President Obama signs an increase in the $14.29 trillion debt ceiling, the U.S. Treasury is set to begin defaulting on payments starting August 2. That threat launched months of competing big deals to cut spending and/or raise taxes. To add to the pressure, in mid-July the credit rating agencies Moody's and Standard & Poor's threatened to downgrade the U.S. credit rating from its historic AAA status if the debt limit isn't raised in time to avoid defaulting on interest and bond payments. That could raise interest rates for the government and trickle down to consumer mortgage loan and credit card payments. John, what kind of deal would be good enough to satisfy bond rating agencies and avoid a double-dip recession? John Williams: First of all, the chances are nil that the government actually will default. There is some talk that if the debt ceiling were not raised by the August 2 deadline, the government could avoid default for a while by playing games with its payments — pay interest and debt first instead of paying other obligations. That could trigger a rating downgrade, if one had not occurred otherwise.
Gerald Celente on Ed Taylor Radio 26 July 2011
Between a Rock and a Hard Place: U.S. Fiscal Policy
By Rodrigo Valdes, Senior Advisor in the Western Hemisphere Department at the IMF - SeekingAlpha.com
The United States faces two pressing challenges to fiscal policy: Raise the debt ceiling and begin the arduous process of reducing deficits and debt.
And, right now, this leaves U.S. fiscal policy between a rock and a hard place. How much savings should be found and in what form are crucial questions. So is when to put those savings in effect.
Simply Unsustainable
By the end of this year, federal debt held by the public will represent 70% of the U.S. economy, almost double the 36% it was in 2007. The federal fiscal deficit will be 9.3% of GDP this year. That, quite simply, is not sustainable.
If left on automatic pilot, debt would continue to increase faster than the economy, until financial markets say “no more.” Credit rating agencies have issued their warnings and, as part of the debt ceiling discussions, the political system has been trying to decide where to find the savings.
Could the Fed Rescue US From the Debt Ceiling?
By: John Carney, Senior Editor, CNBC.com
The Federal Reserve maybe able to fund the U.S. government if no deal to raise the debt ceiling is reached.
The Fed currently owns about $1.63 trillion of Treasurys. It can sell these through its open market operations. All Fed income that exceeds the Fed’s costs are remitted to the U.S. Treasury Department. Which means that the revenues from selling Treasurys could be used to fund government operations instead of borrowing.
Sales of Treasurys by the Fed would not violate the debt ceiling laws, because the debt has already been issued. It is already counted against the debt ceiling.
The U.S. government borrows around $125 billion each month. This means that, at least in theory, it is possible for the Fed to fully fund the borrowing needs of the U.S. government for nearly a year.
Debt ceiling deadlock: Who will get paid?
By Jeanne Sahadi @CNNMoney
NEW YORK (CNNMoney) -- Who will get paid and who won't?
That's the $14.3 trillion question as each day ticks closer to next week's debt ceiling deadline and Congress shows no sign of brokering a deal.
If lawmakers fail to raise the ceiling by Tuesday, the Treasury Department has said it will no longer be able to guarantee that it can pay all the country's bills in full and on time.
That's because Treasury will not be taking in enough revenue to cover all the bills coming due in August. And without a debt ceiling increase, it will be prohibited from borrowing new money in the bond market to make up the difference.
Heading for a 'Haircut' U.S. Default or Downgrade Could Cost Repo Borrowers;
Debt-Ceiling Anxiety
By MATT PHILLIPS, BEN LEVISOHN and SERENA NG - WSJ.com
[article free pass - Google the title and click WSJ url]
The debt stalemate in Washington is creating stress in a little-known but vital corner of the bond market, increasing the risk that banks, hedge funds and other investors will have to pay billions of dollars in additional costs if the U.S. defaults or is downgraded.
Rates are rising for repurchase agreements, or repos— a roughly $4 trillion market that greases the wheels of the U.S. financial system — as officials in Washington feud over how to bring down the nation's debt. And Wall Street is now calculating the damage that could ensue if the nation was forced to default on its debt early next month or, more likely, loses its triple-A credit rating.
Debt ceiling deadlock could lower interest rates
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- The nation is just days away from the debt ceiling deadline, and no one knows exactly what will happen when the borrowing limit is reached. But even in the worst case scenarios, many experts think investors will flock to U.S. Treasuries.
That possibility would mean lower borrowing costs for the government, not the spike in interest rates that many were expecting.
"Intuitively, this might not make sense because you would think there would be selling of Treasuries, but instead the Treasury market is well-supported," said Richard Bryant, head of Treasury trading at MF Global.
The experts admit they're not sure how markets will react if there is no solution by the Aug. 2 deadline. But many believe that stocks will suffer more in the uncertainty caused by a debt ceiling crisis.
How gold,silver react if US defaults
By Julian D W Phillips - CommodityOnline.com
Last Friday we were led to believe that the debt-ceiling crisis would be over by the start of Asia’s business on Monday. The weekend has gone and so the deal. The markets are very nervous and beginning to worry that a deal will not be made. This is merely a political game to earn a name because one or the other gives-in first. But the two leaders represent national parties and not themselves; therefore, the sensitivity needed to back down just in time isn't there. The structure of politics doesn't allow it. Not only that, but it takes a few days to implement the ceiling change.
Are we now certain to see a default by the U.S. government? If so just what will that mean to precious metals?
Grubb: Gold a Double-Edged Sword Against Inflation AND Deflation
SeekingAlpha.com interview
The World Gold Council this month released a study it commissioned from Oxford Economics, "The Impact of Inflation and Deflation on the Case for Gold." The study found gold performs relatively well compared to other assets in a high-inflation scenario as well as in a deflationary period, among other findings. World Gold Council Managing Director of Investment Marcus Grubb talked from the council’s London offices with Hard Assets Investor Managing Editor Drew Voros about the study and its meaning for investors. Hard Assets Investor: Why don't we start off by having you briefly just tell us about the Oxford Economics report.
Marcus Grubb: Absolutely. With the current backdrop of financial crises in a number of places around the world, we started to see there are a lot of investors looking at different scenarios of strong recovery, weak recovery, inflation, disinflation, stagnation or even deflation. We felt that there was a real opportunity to commission research that would deliver powerful insights into what kinds of scenarios investors might be facing this year, going into 2012 and beyond, and then adding gold into that mix.
"I have not sold any gold, I have bought more gold. If gold goes down I'll buy more. The price of gold is going to go much, much higher over the next decade."
-- Jimmy Rogers
I suspect that the capping on gold and silver will continue into the month end tomorrow, and quite likely into some resolution of the debt ceiling discussions which will probably occur next week. They might not, and that will indeed be interesting. The Mad Hatter and his Merry Pranksters think that a 'little default' might be a good thing to make the country more malleable to their non-negotiable demands.
On a deal, the first impulse will be for stocks to rally sharply and the metals get beaten, in the usual 'risk on' trade. However, depending on the resolution of the debt ceiling, when people think of it after they have had their jollies in the first reaction, they may realize that absolutely nothing has really been fixed. The US financial system will still be corrupt and broken, and the politicians have openly stopped caring about the voting public and their opinions, in their desire to put on the corporate feedbag.
Keiser Report: Ghettofication of America (E168)
Time to Sell Gold Comes After a New World Order Emerges
By Simit Patel - SeekingAlpha.com
Famed trader Jesse Livermore advised that the best way to make money is to find long-term bull markets, and to simply hold a position for the bulk of that market; to “sit tight and be right.” For those coming from that perspective (and I include myself in those ranks) the gold market (or inversely, the US dollar market) favors that strategy, as it has rallied for over a decade on an annual basis. And indeed, I believe it has much further to go. But when will it be time to exit? What will the exit signs look like?
The main sign will be a resolution to the global sovereign debt crisis. This means some type of a formal acknowledgement that large parts of the existing global debt supply cannot be re-paid; it is junk debt. This is a resolution that must result from central bankers and the political economies they manage; it is not a national affair, but rather an international affair. In the event of global hyperinflation, currency systems managed by non-state networks may play a greater role, and thus their trade agreements and perspectives on gold will affect the value of gold and thus the exit strategy of its holders.
A new bottom may be emerging for silver in upper $30 level
By Dr Jeffrey Lewis
The commitment of traders is released each Friday by the futures market regulator, the CTFC. Whereas there are plenty of concerns with the CTFC’s involvement in the futures market, generally the COT data proves to be a very important tool in understanding market highs and lows.
The real function of the futures market, outside of finance, is to allow buyers and sellers to exchange fungible products (commodities) on a central exchange. Buyers and sellers can also hedge their future purchases, thus keeping the namesake of the futures market.
COT Momentum
In each release, there are three types of traders listed. These are commercial traders, noncommercial speculators, and the non-reportables, which are too small to meet regulatory expectations.
3 Reasons Silver Should Head Higher Than $50 Now
By Galileo Russell - SeekingAlpha.com
Silver is up 20% in the last month alone and looks to be headed for an explosive breakout similar to the one we saw in late April. But this time silver could see prices way higher than the previous $50 an ounce high because of three new factors that weren't in place several months ago.
European Debt Struggles Have Gotten Worse
Bond yields for Portugal, Italy and Greece have soared through the roof in recent weeks signaling we are closer than ever for at least one country to start defaulting. The 2 year yields on Portuguese, Italian and Greek bonds now are all well above 10%. Rising bond yields give more incentives for investors to switch to concrete assets such as gold and silver. Recently silver has been trading very similarly to gold with the exception of having a significantly higher beta. If any more bad news comes from Europe, gold will surely climb and silver will climb even more.
The Debt Ceiling, Quantitative Easing and Silver's Pending Rise
By Ashraf Laidi - SeekingAlpha.com
As risk currencies become quickly overcrowded and range-bound, equity indices remain the territory of traders rather than investors, and silver once again appears as the notable gainer, characterized by richly similar fundamentals to gold. The only thing is that silver is trading 20% below its record high.
Here are three general reasons to our renewed preference for silver.
Gold has always preceded silver in hitting new record highs (due to liquidity and popularity of investing options to the public). But silver's subsequent catch-up has rendered this pattern an attractive investment reality. This has especially been the case since summer 2010. It is important to remember the main reason for silver's severe underperformance relative to gold in April/May was artificial interference (exchanges quadrupled he margin requirements).
GE CEO Jeffrey Immelt,
The Head Of Obama's Jobs Council,
Is Moving Jobs And Economic Infrastructure
To China At A Blistering Pace
TheEconomicCollapseBlog.com
Jeffrey Immelt, the head of Barack Obama's highly touted "Jobs Council", is moving even more GE infrastructure to China. GE makes more medical-imaging machines than anyone else in the world, and now GE has announced that it "is moving the headquarters of its 115-year-old X-ray business to Beijing". Apparently, this is all part of a "plan to invest about $2 billion across China" over the next few years. But moving core pieces of its business overseas is nothing new for GE. Under Immelt, GE has shipped tens of thousands of good jobs out of the United States. Perhaps GE should change its slogan to "Imagination At Work (In China)". If the very people that have been entrusted with solving the unemployment crisis are shipping jobs out of the country, what hope is there that things are going to turn around any time soon?
UW, 8 local governments face downgrade threat
Puget Sound Business Journal - by Mwiza Kalisa
Moody's Investors Service may downgrade the Aaa bond ratings of theUniversity of Washington and eight local governments in King County if the rating agency lowers its bond outlook for the U.S. government.
Local governments put under the downgrade watch are: the cities of Bellevue and Seattle; King County; and the Seattle, Mercer Island, Bellevue, Issaquah and Lake Washington school districts, the rating agency announced Thursday.
UW was the only university in the nation that Moody’s placed under review for possible downgrade. All of the local agencies that Moody’s put on its watch list have Aaa ratings.
Finally, a Study That Explains Everything Are people capable of evaluating their leaders fairly and objectively? Researchers say no.
By Andrew Cohen - TheAtlantic.com
University of Southern California academics Dan Simon and Nicholas Scurich couldn't have known months ago that they would be unveiling the results of their "exploratory" study, "Lay Judgments of Judicial Decision-Making," smack dab in the middle of a furious debate over the nation's debt and deficit. But it turns out that their timing is impeccable. For here, in one place at one time, we are (again) reminded why government so often seems so broken to so many of us.
It's human nature, folks. Our founding documents and governing institutions may aspire to Locke, but hundreds of years later we're still chock full of Hobbes. We respect officials when they do what we want them to do. We disrespect them when they don't. We are far less objective and justifiable than we think are with the rationales we endorse and employ. And everyone is looking out for themselves. No wonder there is so much cynicism toward law and politics. It's not just coming from the top down, as angry citizens like to claim -- it's coming from the bottom up, too.
The American Dream Film - Full Length
Middle Class: It’s NOT the Economy…
PracticalDad.com
There's been much written on the decline of the American Middle Class, facing it's worst time perhaps since the Great Depression. The statistics point out falling income, insufficient assets to support the classic American notion of 'retirement' and a significant number of people who owe more on their house - their largest asset - than it could ever possibly again be worth. But while everyone is focusing on the economic aspects, as though the number of bedrooms is paramount, what's being overlooked is that the true danger to the American middle class lies in the political realm. It's a misdirection that has to be corrected since we've long ago crossed from the purely economic into the political realm and I'm not certain that many realize that fact. The protests in Greece and Spain demonstrate that there comes a point at which the consequences of 'economic' decisions are addressed in a purely political manner as the governments in power attempt to fend off the masses to continue in power.
Why Americans Are So Angry
By Senator Bernie Sanders
The rich are getting richer. Their effective tax rate, in recent years, has been reduced to the lowest in modern history. Nurses, teachers and firemen actually pay a higher tax rate than some billionaires. It's no wonder the American people are angry.
Many corporations, including General Electric and Exxon-Mobil, have made billions in profits while using loopholes to avoid paying any federal income taxes. We lose $100 billion every year in federal revenue from companies and individuals who stash their wealth in tax havens off-shore like the Cayman Islands and Bermuda. The sum of all the revenue collected by the Treasury today totals just 14.8% of our gross domestic product, the lowest in about 50 years.
Stress!
TheEconomicCollapseBlog.com
Has anyone else noticed that the level of stress in this country appears to be extremely high right now? Today, it seems like our federal government, our state governments and most American families live in a constant state of crisis. Everywhere you look there are major problems. Right now everyone is stressed out because of the "debt ceiling deadline". Earlier this year everyone was freaked out about the possibility of a "government shutdown". If by some miracle Barack Obama and the Republicans are able to reach a deal in the next few days that will not help the national stress level for long. Another gut-wrenching "national crisis" will almost certainly come along very quickly. Meanwhile, average American families are feeling more stress than ever. There are millions of ordinary Americans that either cannot find jobs or are working as hard as they can and yet cannot seem to pay their mortgages and provide the basics for their families. We are a nation that is really stressed out right now, and as things continue to unravel the level of stress is only going to increase.
The New Foreign Policy Frontier A rapidly changing world requires news ways of thinking, and new tools for understanding and engaging with societies as well as governments - By Anne-Marie Slaughter - TheAtlantic.com
The frontier of foreign policy in the 21st century is social, developmental, digital, and global. Along this frontier, different groups of actors in society -- corporations, foundations, NGOs, universities, think tanks, churches, civic groups, political activists, Facebook groups, and others -- are mobilizing to address issues that begin as domestic social problems but that have now gone global. It is the world of the Land Mines Treaty and the International Criminal Court; global criminal and terrorist networks; vast flows of remittances that dwarf development assistance; micro-finance and serial entrepreneurship; the Gates Foundation; the Arab spring; climate change; global pandemics; Twitter; mobile technology to monitor elections, fight corruption, and improve maternal health; a new global women's movement; and the demography of a vast youth bulge in the Middle East, Africa, and parts of Asia.
FBI Surveillance Geeks Fear, Love New Gadgets
By Kim Zetter - Wired.com
Can't wait for 4G to become the ubiquitous standard for mobile communication? On the edge of your seat for the unveiling of Microsoft’s secret Menlo Project and Greenfield application?
You're not the only one watching the growth of these and other new technologies with rapt attention. According to an internal FBI document (.pdf), the law enforcement agency has a keen interest in evaluating each new technology for its surveillance possibilities and challenges.
The FBI fears, for example, that 4G will require agencies to "deal with significantly higher data rates than in current wireless network intercepts," according to the document. "Managing this ‘fire hose’ of data is complicated by the lack of buffering or reliable delivery requirements. … These higher data rates could place a greater emphasis on the filtering of data to identify specific content."
U.S. and Russia Weighing Joint Missile Defense Program The Obama Administration is courting Moscow in hopes of developing collaborative missile warning systems
Diane Barnes, Global Security Newswire - TheAtlantic.com
U.S.-Russian discussions on potential collaborative mechanisms to warn of impending missile attacks could prove "very, very positive," President Obama's nominee to become the next chairman of the Joint Chiefs of Staff said at his confirmation hearing on Tuesday.
The Obama administration has reportedly courted Moscow's interest in establishing two jointly operated sites--one to cooperatively examine and assess radar and other monitoring data, and another for the development of military responses to various missile threats--in a bid to win Moscow's support for a unified European antimissile framework. The missile-shield plan, adopted formally at a 2010 summit in Lisbon, Portugal, would enhance and connect individual NATO member states' missile operations while augmenting those defenses with increasingly advanced land- and sea-based missile interceptors fielded by the United States.
Qassem Suleimani: the Iranian general 'secretly running' Iraq Martin Chulov reports on the elusive Iranian with so much Iraqi influence that Baghdadis believe he is controlling the country
By Martin Chulov in Baghdad - Guardian.co.uk
There's a story that the new CIA director, David Petraeus, likes to tell which harks back to his days as a four-star general in Iraq.
Early in 2008, during a series of battles between the US and Iraqi army on one side and the Shia militias on the other, Petraeus was handed a phone with a text message from the Iranian general who had by then become his nemesis.
The message came from the head of Iran's elite al-Quds Force, Qassem Suleimani, and was conveyed by a senior Iraqi leader. It read: "General Petraeus, you should know that I, Qassem Suleimani, control the policy for Iran with respect to Iraq, Lebanon, Gaza, and Afghanistan. And indeed, the ambassador in Baghdad is a Quds Force member. The individual who's going to replace him is a Quds Force member."
China's economic miracle may be about to come off the rails Largely invisible on a radar screen dominated by concerns over the US and eurozone debt crises, the Chinese economic miracle, one of the few apparent bright spots that remains in a world beset by trouble, has in recent weeks also been showing unnerving signs of strain. Indeed, it may even be about to come off the rails entirely – quite literally. -- By Jeremy Warner - Telegraph.co.uk
Last weekend, one of China's new bullet trains, a showcase of the country's growing economic prowess, rammed into the back of another, killing 39 passengers and injuring nearly 200 more.
The accident has raised questions, not just about the safety of China's vaunting ambition in high-speed rail, but about the sustainability of the country's break-neck pace of economic development in the round.
As Shen Minggao, chief China economist at Citi, has observed: "High-speed rail in some sense represents China's fast growth. When you care so much about speed, you sometimes pay less attention to the quality of the growth."
The Age of Transitions (full length documentary)
Reagan's ALIEN speech to UN
National Geographic Area 51 declassified full documentary
TRANSHUMANISM Tom Horn Full Length
Part Human/Part Animal Hybrid Monsters
Are Being Created By Scientists All Over The Planet
EndOfTheAmericanDream.com
Crazed scientists all over the globe are "playing god" with the very building blocks of life. Today, thanks to extraordinary advances in the field of genetic modification, scientists are now able to do things that were once unthinkable. Part human/part animal hybrid monsters are being created by scientists all over the planet and it is all perfectly legal. Scientists justify mixing the DNA of humans and animals by claiming that it will help them "cure diseases" and "feed the world", but the reality is that all of this genetic modification is a tremendous threat to the human race. It is only a matter of time before humans start allowing themselves to be genetically-modified in order to "fight illness" or to "enhance" their abilities. The temptation to insert the genes of animals or plants into people in order to create "super soldiers" or a "superior race" will certainly prove to be much too tempting. Unless something is done to hold all of this back, it seems almost certain that genetic hell will be unleashed on the human race. Once genetically-modified humans start breeding with normal humans there will be no putting the genie back into the bottle. Eventually, we could get to the point where there are very few "100% humans" left.
Tom Horn / Doug Woodward Interview
TRANSHUMANISM (Full):
Techno-eugenics for the neo-feudal age
California takes out insurance against US debt deal failure State raises $5.4bn bridging loan from banks to cover 'drastic consequences' of missing 2 August deadline
By Ed Pilkington in New York - Guardian.co.uk
The continuing deadlock over raising the United States' debt ceiling is prompting drastic action across the nation, as individual states prepare for the worst.
California has taken out a $5.4bn bridging loan as an insurance policy should agreement over a deficit reduction package not be reached by the 2 August deadline.
The state has borrowed from eight banks, led by Goldman Sachs and Wells Fargo, as an emergency stop-gap. Normally in August it would sell $5bn of short-term bonds to keep itself afloat, but California's treasury officials are fearful that failure to reach a deal in Washington could cut the state off from the bond markets.
Flee to Mars if America commits worst error since 1931
By Ambrose Evans-Pritchard - Telegraph.co.uk
President Obama has categorically ruled out a constitutional challenge to the US debt ceiling since I wrote yesterday’s blog.
Spokesman Jay Carney said the White House cannot invoke the 14th Amendment, which stipulates that US federal debt "shall not be questioned".
"It's not available. The Constitution makes clear that Congress has the authority, not the president, to borrow money and only Congress can increase the statutory debt ceiling. That is just a reality," he said.
That is questionable, but let us move on.
Obama had previously been vague about this, saying White House lawyers were "not persuaded that is a winning argument". It is a revealing turn of phrase. This is indeed about winning arguments, not abiding by constitutional law.
Are you kidding me
$100 Billion: The Cost to Taxpayers of a U.S. Debt Downgrade Prolonged deficit deal bickering
will make deficit cutting even harder
By Daniel Indiviglio - TheAtlantic.com
We can finally put a price tag on Washington's partisan politics. If it fails to compromise on a plan to raise the debt ceiling and cut the deficit to satisfy the rating agencies, it could cost taxpayers $100 billion. This is an estimate of how much the nation's borrowing costs will rise if its debt is downgraded. Let's consider the significance of this sum. Where the $100 Billion Estimate Comes From
First, where did this estimate come from? It was calculated by Terry Belton, JPMorgan Chase's global head of fixed income strategy. He revealed the projection on a conference call organized by Securities Industry and Financial Markets Association on Tuesday. So this isn't political activist talking: it's Wall Street's assessment.
US debt crisis:
hardline revolt puts more pressure on Republican leader
By Ewen MacAskill in Washington
and Dominic Rushe in New York - Guardian.co.uk
Congress remained deadlocked over the debt crisis on Wednesday, with House Republicans unable to muster the votes needed to pass emergency legislation before next week's deadline.
Faced with a revolt by hardline members of his own party, House leaderJohn Boehner was having to hastily rewrite a bill he proposed earlier in the week to cut $3 trillion (£1.83tn) in federal government spending.
Boehner hopes to put his new bill to the vote on Thursday after being forced to cancel a planned vote because of lack of numbers.
US debt crisis:
failure to tackle debt sends global markets into tailspin Global stockmarkets fell sharply amid fears
that politicians on both sides of the Atlantic
were losing their grip on sovereign debt crises.
By Louise Armitstead - Telegraph.co.uk
Shares fell by more than 1 per cent in Britain, Germany, France and Spain as traders lost confidence in Europe's €159 billion (£140 billion) bail-out package for Greece, less than week after it was unveiled.
Traders were also rattled by the continuing deadlock between President Barack Obama and the Republican leaders of the House of Representatives over how to raise the US "debt ceiling". The politicians have until Tuesday to broker a deal or America will be unable to pay the interest on its $14.3 trillion (£8.8 trillion) debts.
Boehner, other GOP leader
ramp up pressure on Republicans to pass debt plan
By Paul Kane and Lori Montgomery - WashingtonPost.com
House GOP leaders mounted a furious bid Wednesday to win support for legislation designed to ease the nation’s debt crisis, delivering a tongue-lashing to their most conservative lawmakers and casting Thursday’s roll call as nothing less than a vote of confidence in their stewardship of the chamber.
House Speaker John A. Boehner (Ohio) began Wednesday by ordering his fellow Republicans to fall in line and continued pushing for support throughout the day. He and his lieutenants repeatedly warned rank-and-file Republicans that Boehner’s plan was their only alternative to a Democratic option offered by Senate Majority Leader Harry M. Reid (Nev.) or the financial calamity that could be precipitated by a government default.
Debt Ceiling Set For Progressive Repealing
By Michael Hudson
Mr. Obama's scare tactics to get Democrats to vote for his Republican Wall Street plan
The Wall Street bailout melodrama should be viewed as a dress rehearsal for today's debt-ceiling non-crisis.
You know that the debt kerfuffle is as melodramatically staged as a World Wrestling Federation exhibition when Mr. Obama makes the blatantly empty threat that if Congress does not "tackle the tough challenges of entitlement and tax reform," there won’t be money to pay Social Security checks next month. In his debt speech last night (July 25), he threatened that if "we default, we would not have enough money to pay all of our bills – bills that include monthly Social Security checks, veterans' benefits, and the government contracts we’ve signed with thousands of businesses."
This is not remotely true. But it has become the scare theme for over a week now, ever since the President used almost the same words in his interview with CBS Evening News anchor Scott Pelley.
The Political Theater and the Debt Ceiling Crisis:
Are We Being Had?
Dr. Paul Craig Roberts - Infowars.com
In my last column I suggested that an unintended outcome of the debt ceiling impasse could be Congress' loss of the power of the purse. In this column I suggest an intended outcome that the ongoing political theater might be designed to produce.
President Obama has said that he will not resort to the various powers open to him to keep the government running should Congress fail to deliver a debt ceiling increase. This is a suspicious statement, as it is not credible that a president would leave troops at war unpaid and without supplies, Social Security checks unsent and stand aside while the US dollar collapses and the credit rating of the US government is destroyed.
Debt Downgrade, Not Default, is the Problem
By Greg Hunter's USAWatchdog.com
Watching the debt negotiations is like watching two stubborn people headed over a waterfall. Both are too blockheaded to steer the boat towards land on the left or the right. So, both go over the edge and will see how long the other can hold his breath. Both, of course, drown in this story, right along with the rest of the country. Yesterday, Speaker Boehner said he wanted to call the President’s bluff and not give him a "blank check." The President, on the other hand, has said (many times) he’s going to veto any plan that doesn’t raise the debt ceiling past the 2012 presidential election. I know many think there is going to be a last minute deal before the August 2nd deadline, but I just don't see it. If the Republican bill from the House makes it past the Democrat-controlled Senate and there is only an increase in the debt ceiling to make it for 6 months or so—veto here we come. Or maybe, there is no bill that can get through Congress, and nothing even makes it to the President’s desk by the August 2nd deadline.
The Road to a Downgrade A short history of the entitlement state.
WSJ.com
Even without a debt default, it looks increasingly possible that the world's credit rating agencies will soon downgrade U.S. debt from the AAA standing it has enjoyed for decades.
A downgrade isn't catastrophic because global financial markets decide the creditworthiness of U.S. securities, not Moody's and Standard & Poor's. The good news is that investors still regard Treasury bonds, which carry the full faith and credit of the U.S. government, as a near zero-risk investment. But a downgrade will raise the cost of credit, especially for states and institutions whose debt is pegged to Treasurys. Above all a downgrade is a symbol of fiscal mismanagement and an omen of worse to come if we continue the same habits.
President Obama will deserve much of the blame for the spending blowout of his first two years (see the nearby chart). But the origins of this downgrade go back decades, and so this is a good time to review the policies that brought us to this sad chapter and $14.3 trillion of debt.
Obama Strikes Fear Into Americans While Reassuring Big Banks Administration hypes depression and collaps
if debt deal not reached, tells banks the opposite
By Paul Joseph Watson - Prison Planet.com
While publicly fearmongering about a new great depression, the sun failing to rise, and the sky falling if the debt ceiling is not hiked, the Obama administration has been secretly telling big banks that there’s no chance of a default, echoing how the 2008 bailout was sold on hyped threats and intimidation of lawmakers.
The rhetoric was heightened yesterday when White House Communications Director Dan Pfeiffer warned that the GOP's inability to compromise "could potentially put us towards a depression," adding, "we are seven days away from an unprecedented financial event in this country’s history."
Obama warns of 'dangerous game'
in stand-off as US debt battle continues Obama says US people cannot become collateral damage to Washington's political warfare as national debt battle escalates
By Ewen MacAskill in Washington - Guardian.co.uk
The battle between Barack Obama and the Republicans over the national debt reached a new level on Monday night when both claimed slices of prime-time television to blame one another for the looming crisis.
Obama, in a 15-minute address to the nation, finally took the option that his Democratic colleagues have long urged on him to identify as central to the problem the hardcore Republican members of Congress backed by the Tea Party movement. He portrayed them as ideologues who ran counter to the long American political tradition of compromise.
Federal employees are worried,
angry about potential government default
By Joe Davidson - WashingtonPost.com
Angry. Disappointed. Worried. Terrified. Furious. Afraid. Disgusted.
These are among the words we can print that federal employees used when we asked them to describe their feelings about a potential government default.
With the help of Ryan Y. Kellett, a Washington Post interactivity producer, federal employees from around the country responded to a series of questions. In many cases, they did not want their names used, but we do indicate their agencies and locations. Here is some of what they had to say.
As a federal employee, describe how you feel about the possibility of a default.
Debt ceiling: The trillion dollar mystery
By Charles Riley @CNNMoney
NEW YORK (CNNMoney) -- The two calamity-avoiding debt ceiling measures under consideration in Congress have something in common.
House Speaker John Boehner says his bill has $1.2 trillion in discretionary spending cuts over ten years. Senate Majority Leader Harry Reid says his bill has about the same level of such cuts.
If either bill is adopted, the cuts would easily be some of the biggest in history.
Here's the problem: Nobody knows which federal programs are on the chopping block.
Tick tock: US National Debt Clock waiting for Washington
By Fiona Walsh - Guardian.co.uk
Talks on raising the debt ceiling may have stalled in Washington, but the famous National Debt Clock on Time Square is poised like a coiled spring. Now all it needs is for the politicians to get their act together.
The clock is managed by New York real estate developer Durst Oganization Inc., which first installed an electronic screen displaying the debt in 1989 in the hope that the glare of public attention might force Washington to cut the deficit, then a mere $2.7tn (£1.64tn).
More Debt for Your Money
By Bill Bonner - DailyReckoning.com
07/27/11 Vancouver, British Columbia – We're here in Vancouver at Addison's "Fight or Flight" investment symposium. More on that as the week progresses…
Yesterday, stocks went down another 90-some points on the Dow. Oil stayed just under $100. And gold is still hitting records.
According to the papers, investors are on the edge of their seats. They're waiting to see what happens in Washington. Everybody knows that a default would be disastrous. That’s why everybody also doesn't worry about it; 'they won’t let it happen,' they say to themselves.
"Neither side budging," is a subhead from yesterday's New York Times.
S&P, Moody's pass on debt impasse for now
By Jennifer Liberto @CNNMoney
WASHINGTON (CNNMoney) -- Rating agency officials declined to rate competing political plans to allow the United States to borrow more and cut deficits during a congressional hearing Wednesday.
Lawmakers grilled top officials from Standard & Poor's and Moody's at a House Financial Services subcommittee meeting, asking whether they'd downgrade U.S. credit rating under competing plans that Democrats andRepublicans are working on.
Congress is locked in a political stalemate over how and whether to raise the cap on U.S. borrowing while cutting long-term deficits.
Louise Yamada:
Gold to skyrocket to $5200; Silver to hit $85
LONDON (Commodity Online): Will Silver price skyrocket to $85 per ounce? Can Gold surge to $5200 per ounce? Gold and silver prices at these astronomical levels may seem unrealistic and without fundamentals. But renowned technical analyst on bullion Louise Yamada says the hot precious metals gold and silver could go to these whopping price levels in the years to come.
In an interview to King World News (KWN), Yamada said on silver: "We hit part of our silver targets at $50, (expect) $65, even $80, $85 over time. We had an 88% rally in a very short period of time from January and a one third retracement, 34% down, so that was pretty normal. We saw some support at $33 and would loved to have seen it go sideways a little bit longer to be honest with you."
What Didn't Change When Nixon Cut the Gold Link
By Ben Traynor - DailyReckoning.com
07/27/11 "Let me lay to rest the bugaboo of what is called devaluation," Richard Nixon told his fellow Americans on August 15, 1971.
The 37th President had just announced the US would "temporarily" close the gold window – ending the convertibility of Dollars into gold that had been key to the postwar Bretton Woods system.
What didn't change in 1971, though, was every bit as important as what did. Because the Dollar remained the world's reserve currency – a "privilege" that, four decades on, looks increasingly like a curse.
When he made his address, Nixon was keen to allay fears he was undermining the Dollar's value by cutting the link to gold – especially given the apocalyptic warnings (both in the press and inside the White House) of how disastrous such a move would be.
The World According to Gold – Literally
By James West - MidasLetter.com
Every time I write a "World According to Gold" piece, gold is setting a new record, among a new crop of bubble-callers, and still the world hesitates to pile into gold for fear of getting burned. Many of those who have doubled or tripled their money have since died, retired, or simply kept on making money investing, succumbing to the addictive quality of wealth. The only other consistency with the new old record and another eponymous article, is that there is yet again more fiat capital in the system. But now, the rate at which capital fabrication is increasing is itself increasing. In other words, larger sums are required just to keep the international circle-jerk in motion.
The Republican congressman John Boehner, feverishly, we are led to believe, developing his own alternative plan to the Democrat sponsored plan, suggests raising the debt ceiling in two stages. First, he proposes raising it by $1 trillion, and then by another $1.4 trillion next year. Does that mean we’re going to need an additional $2.4 trillion in debt over the next 18 months?
Dollar Default to Change Gold & Silver Markets
BY JULIAN PHILLIPS - FinancialSense.com The Overall Consequences
Bear in mind that the U.S. is not the hub of the global gold market. In fact, in terms of jewelry, bar and coin demand, the entire North America is only responsible for 8% of global demand. Europe and Russia is responsible for another 13%. In other words, these markets are not driven by the financial affairs of the developed world.
The developed world is responsible for the provision of the distribution networks and the markets of the gold world. Physical supplies primarily come into London and bullion banks, sent from the refineries that refined gold and silver, which the mines supply. Then the bullion banks –mainly through the London gold Fixing — supply investors, manufacturers, industry and central banks with the gold they want.
Dollar recovers on stock sell-off Notches all-time lows against Swissie,
Aussie and Singapore dollar
By Sue Chang and Deborah Levine, MarketWatch
SAN FRANCISCO (MarketWatch) — The U.S. dollar skidded to all-time lows against several currencies on Wednesday but rebounded as U.S. stocks reeled on the back of the debt-ceiling stalemate.
The greenback's recovery against the euro was also aided by a high-ranking German official who threw cold water on last week’s rescue plan for Greece.
The dollar index DXY +0.02%, which tracks the U.S. unit's performance against a basket of six other currencies, traded at 74.088, up from 73.501 late Tuesday.
Europe's hot summer as Italy and Cyprus join sick list Fears of recession in Italy and the Germans' reluctance to back the EU's bail-out fund with real muscle have set off fresh eurozone tremors, pushing yields on Southern European bonds back to levels seen before last week's emergency summit.
By Ambrose Evans-Pritchard - Telegraph.co.uk
News that Moody's had downgraded Cyprus two notches from A2 to Baa1 due to "fractious politics" and exposure to Greece compounded fears Europe's crisis is far from resolved.
The darkening picture in Cyprus raises concerns that a fourth eurozone country might soon need some sort of rescue, exhausting bail-out tolerance in Germany, Holland, Finland and Slovakia, where a wing of the coalition has denounced the EU accord.
Pressure builds on Spain and Italy over debts Just five days after European authorities unleashed a €159bn (£141bn) aid package designed to prop up the eurozone, Spanish and Italian bond yields yesterday soared on concerns over sovereign debt. -- By Louise Armitstead - Telegraph.co.uk
Spain's short-term cost of borrowing hit three-year highs. At an auction of Spanish government debt demand fell, while yields at a sale of six-month Italian paper hit their highest since late 2008.
By late afternoon, the yield on Italian 10-year bonds dropped back from 5.72pc to 5.63pc as Italy cancelled a debt auction scheduled for August. Traders said the move "provided some relief" to volatile markets. Spanish bonds also dropped to 5.96pc having hit 6.07pc earlier.
But the price of German Bunds, the benchmark of the eurozone debt market, was back up to levels seen before the aid package. Traders said the markets were now unconvinced that the authorities have done enough to prevent a meltdown of the euro.
Internal Doc Reveals GMAC Filed False
by Paul Kiel - ProPublica
GMAC, one of the nation's largest mortgage servicers, faced a quandary last summer. It wanted to foreclose on a New York City homeowner but lacked the crucial paperwork needed to seize the property.
GMAC has a standard solution to such problems, which arise frequently in the post-bubble economy. Its employees secure permission to create and sign documents in the name of companies that made the original loans. But this case was trickier because the lender, a notorious subprime company named Ameriquest, had gone out of business in 2007.
Beyond Debt Ceiling,
Housing Market Still Greatest Threat to Financial Stability
ABC News' Amy Bingham reports:
With only one week left before the Treasury Department’s Aug. 2 debt ceiling deadline, fears of another financial meltdown are reverberating through the country. Those are the very fears the Financial Stability Oversight Council are seeking to quell.
The council, which was established under the Dodd-Frank financial reform act, released its first annual report today showcasing how the Dodd-Frank Act has already increased stability in the financial market and identifying areas that are still vulnerable to another financial crisis.
But regardless of what reforms are put in place, Treasury Secretary Timothy Geithner stressed that the number one issue threatening financial markets right now is the debt ceiling.
Once Unthinkable,
Breakup of Big Banks Now Seems Feasible
by Jesse Eisinger, ProPublica - 247WallSt.com
What was made can be unmade.
JPMorgan Chase and Wells Fargo may have venerable names, but they and the pseudo-venerable Citigroup and Bank of America are all products of countless mergers and agglomerations.
There is no rule of markets that requires a financial system dominated by four cobbled-together, lumbering behemoths.
Lawmakers and regulators have failed to remake our system with smaller, safer institutions. What about investors?
Big bank stocks have been persistently weak, making breakups that seemed politically impossible no longer unthinkable.
America's Fiscal Isolationism
By Christopher Hill - ProjectSyndicate.com
DENVER – Patience might be a virtue, but not necessarily when it comes to American foreign policy.
Consider "the long war," a bold concept embraced a few years ago to describe the continuing struggle against terrorism, the grudging progress that could realistically be achieved, and the enormous financial burden that it would impose for years to come. It was also a realpolitik acknowledgement of the setbacks to be expected along the way (the "slog," as then Defense Secretary Donald Rumsfeld put it).
Above all, the term was an effort to communicate to Americans, accustomed to waging war with speed and decisiveness (and insistent on it since Vietnam), the long-term sacrifice and commitment needed to win a war of survival. Its proponents also understood that the war would not be limited to weapons, but would need to be a sustained effort, involving, as they put it, the "whole of government," with civilian agencies marshaled behind military – or paramilitary – objectives.
FDIC Chairwoman:
Mortgage Industry 'Didn't Think Borrowers Were Worth Helping
by Lois Beckett - ProPublica.org
Outgoing Federal Deposit Insurance Corporation Chairwoman Sheila C. Bair'srevealing exit interview by the New York Times' Joe Nocera has generated plenty of buzz. But while the interview provided a comprehensive look at Bair's role from 2006 to 2011, what caught our attention was her characterization of the foreclosure crisis.
Bair said that the mortgage's industry's reluctance to provide mortgage modifications stems in part from the industry's "disdain for borrowers."
After Norway
EU Declares Fight Against Right-Wing Extremism
Spiegel.de
The European Union has pledged to address far-right extremism following the deadly attacks in Norway motivated by hatred of Muslims. While a number of populist groups initially spoke out against such violence, two right-wing leaders have since defended part of the ideology behind the massacre.
Following the horrific attacks that left 76 dead in Norway last week, many European leaders have been asking questions about the dangers of right-wing radicalization in the region. In recent years European Union member countries have seen growing support for right-wing populist groups -- but the attacks confessed to by Anders Behring Breivik took their anti-Islam, xenophobic ideology to an entirely new and deadly level.
Norwegian Police Unable to Find Link
Between Breivik and "Far Right"
By Kurt Nimmo - Infowars.com
Police in Norway are unable to establish a link between Anders Behring Breivik and the English football hooligan group infiltrated by British intelligence.
Janne Kristiansen, director of the Norwegian Police Security Service, told the BBC no proof has yet been found to link the English Defense League to Breivik.
"I can tell you, at this moment in time, we don't have evidence or we don't have indications that he has been part of a broader movement or that he has been in connection with other cells or that there are other cells," she said.
NORWAY MASSACRE -
Gunmans Manifesto Of Hate To Spark More False Flag Ops
Jackson Lee at Radical Islam Hearing:
Let's 'Have a Hearing on Right-Wing Extremists, Ideologues'
By Penny Starr
(CNSNews.com) – At a hearing of the House Committee on Homeland Security today about the radicalization of young Somali American Muslims by the al-Shabaab terrorist group, Rep. Sheila Jackson Lee (D-Texas) said the committee should hold a hearing on "right-wing extremists" in the United States.
Jackson Lee used much of her allotted five minutes to question panelists with expertise on radicalization about the alleged hacking into telephones of 9-11 victims by the now-closed News of the World tabloid in England.
NORWAY FALSE FLAG CLUE
POLICE HELICOPTER STAND DOWN!
Norway Terror Attacks a False Flag:
More Than One Shooter on Island;
Oslo Police Drilled Bomb Blasts;
Was It NATO’s Revenge for Norway’s Decisio
to Stop Bombing Libya?
by Webster G. Tarpley, Ph.D. - TARPLEY.net
Washington DC, July 24, 2011 – The tragic terror attacks in Norway display a number of the telltale signs of a false flag provocation. It is reported that, although the world media are attempting to focus on Anders Behring Breivik as a lone assassin in the tradition of Lee Harvey Oswald, many eyewitnesses agree that a second shooter was active in the massacre at the Utøya summer youth camp outside of Oslo. It has also come to light that a special police unit had conducted drills or exercises near the opera house in downtown Oslo which involved the detonation of bombs during 2010– exactly what caused the bloodshed a few hundred meters away this Friday. Further research reveals that United States intelligence agencies had been conducting a large-scale program of recruiting retired Norwegian police officers with the alleged purpose of conducting surveillance inside the country. This program, known as SIMAS Surveillance Detection Units, provided a perfect vehicle for the penetration and subversion of the Norwegian police by NATO.
Muslim Group Says Norwegian Mass Killer
Was Inspired by Critics of Global Jihad
By Penny Starr
(CNSNews.com) – The controversial Council on American-Islamic Relations is accusing outspoken U.S. critics of global jihad of promoting the kind of “Islamophobia” which it claims led to last Friday’s massacre in Norway.
Anders Behring Breivik, 32, is accused of bombing a government building in the Norwegian capital, Oslo, killing eight people, and shooting dead 68 more at a summer camp, most of them youths. No reports have said whether Muslims are among the victims.
CAIR national communications director Ibrahim Hooper noted that Robert Spencer – an expert on Islam and anti-global jihad activist – and others who are critics of Islamic extremism and of groups like CAIR were referenced in Breivik’s lengthy manifesto posted online.
Abbas not deterred by U.S. threats
regarding Palestinian state recognition
By Maher Abukhater in Ramallah, West Bank - LATimes.com
Mahmoud Abbas, president of the Palestinian Authority, does not seem deterred by U.S. threats of financial cuts or political castigation if he proceeds with plans to ask the U.N. for recognition of a Palestinian state in September.
Abbas Wednesday summoned his Palestine Liberation Organization’s Central Council, a 120-strong legislative body in exile, to ask its blessings for his plans.
He complained that he had tried every avenue possible to resume negotiations, stressing that negotiations was his first and foremost option for resolving the decades old Palestinian-Israeli conflict. But when everything failed, he was left with no other choice but to go to the U.N.
Debtpocalyse for Money Markets? Don't Bet on It Let's say the ratings on short-term U.S. government securities get cut? Does that trigger a mandatory sell-off? Probably not.
By John Carney - TheAtlantic.com
Money market funds are required by law and by their own charters to hold only high-quality securities. So if the ratings agencies downgrade the credit of the United States, will they have to sell their Treasury holdings?
This is a question that quite rightly has investors nervous. Money market funds are major holders of U.S. Treasuries. If they were all forced to suddenly dump their Treasury bonds because of a downgrade, the market would be flooded, prices would tumble and markets would become quite chaotic.
Fortunately, this fear is overblown. The SEC's regulations for money market funds do include a rating requirement for money market fund investments--but that requirement is so loose that it is unlikely to trigger a forced sell-off.
Federal Reserve won't solve debt ceiling crisis
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- If Congress doesn't come together on a debt ceiling deal by next week and markets start tumbling, don't expect the Federal Reserve to come riding to the rescue.
The central bank won't sit idly by if the financial system starts to meltdown in the aftermath of the federal government running out of authority to borrow. But experts say stabilizing bond or stock prices will likely be beyond the Fed's control.
"They don't have the power to dictate what the markets are going to do," said Dan Seiver, a finance professor at San Diego State University. "If the Fed tried to stem the tide, they couldn't do it. They'd be spitting into the wind."
Betting $4.8 billion on a U.S. default
By Annalyn Censky @CNNMoney
NEW YORK (CNNMoney) -- With its winners and losers, Wall Street is often likened to a big casino for obvious reasons. And even when it comes to a possible U.S. default next week, at least a few financial players are looking to cash in on such a bleak turn of events.
A small camp of investors are betting that the U.S. government will default on its debt, and they're putting $4.8 billion of their chips on the table.
In the event of a default, that's how much financial firms will have to pay out to investors who bought credit default swaps against the U.S. government, according to figures from the Depository Trust and Clearing Corp.
Donald Trump recommends default to prevent Obama's re-election
By Tony Pierce | McClatchy Tribune News Service
LOS ANGELES — Donald Trump has some advice for the Republican Party. The New York real estate tycoon went on "Fox & Friends" Monday morning and told the hosts that if the GOP wants to ensure that President Barack Obama isn't re-elected, all it has to do is not make any deals with Democrats and default on Aug. 2.
Trump seems to think that using the country's sparkling AAA credit rating as a sacrificial lamb and letting the nation default would damage Obama, who has been willing to put everything including entitlements on the table, more than it would hurt Republicans, who have refused to raise revenues on the richest Americans and companies during the debt ceiling negotiations.
U.S. likely to lose top rating: economists
By Pedro da Costa and Andy Bruce
(Reuters) - The United States will lose its top-notch AAA credit rating from at least one major rating agency, according to a Reuters poll that also found wrangling over the debt ceiling has already damaged the economy.
A small majority of economists -- 30 out of 53 -- surveyed over the past two days said the United States will lose its AAA credit rating from one of the three big ratings agencies -- Standard & Poor's, Moody's or Fitch.
Respondents saw a 20 percent chance of a new recession over the next year, a prospect that some economists say has been compounded by the acrimonious political fight over what is normally a procedural legislative vote on the debt.
U.S. Credit Rating
Published by Ian R. Campbell - StockResearchPortalBlog.com
I commented yesterday on the 'U.S. Continued Debt Ceiling Debate'. I said "I think that irrespective of outcome, assuming political compromise and with expected ongoing significant U.S. Federal deficits for the foreseeable future, I think it likely U.S. Debt will face a debt ratings downgrade, albeit likely a limited one. If this doesn't happen immediately, I anticipate it will happen in subsequent months, not years".
Yesterday an article was published titled 'Analysis: United States gets closer to losing its AAA rating' – reading time 3 minutes. The article says that even if a U.S. Debt Ceiling agreement is reached:
that "The ratings agencies Fitch, Moody’s and S&P have said the top-notch U.S. rating will only be safe if they see a credible plan from Congress and President Barack Obama to address the country’s growing debt burden", and,
"the ratings agencies have suggested that deficit-reduction measures of some $4 trillion over 10 years could allow the U.S. to retain its current rating, though that also depends on a healthy pace of economic growth".
Debt ceiling fight: What a downgrade would mean
By Charles Riley @CNNMoney
NEW YORK (CNNMoney) -- Even if lawmakers manage to avoid a self-inflicted calamity by raising the debt ceiling, another economic scourge is lurking just around the corner.
It's not the nastiest of "D" words -- default. Rather, it's "downgrade."
The contentious political theater playing out in Washington is increasing the risk of a rating agency slashing the U.S. credit rating.
Rating agencies -- Standard & Poor's, Moody's and Fitch -- analyze risk and give debt a "grade" that reflects the borrower's ability to pay the underlying loans.
With Call to Action, Obama Brings Down the House Congressional servers crashed and phone lines were overloaded, thanks to an outpouring of response to the president -- and a fragile tech infrastructure
By Nancy Scola - TheAtlantic.com
Americans interested in responding posthaste to President Obama's primetime call Monday to "make your voice heard" on the debt ceiling debate risked disappointment, as the power of the bully pulpit met a federal communications infrastructure that's long struggled to keep pace. The Capitol Switchboard rang and rang, and scores of congressional websites crashed last night following Obama's speech and the televised response from House Speaker John Boehner.
Sites crashed seemingly without regard to party or leadership status. Republican Speaker Boehner's site went down, as did those of Senator Minority Leader Mitch McConnell (R-Ky.), House Energy and Commerce ranking member Rep. Henry Waxman (D-Calif.) and rank-and-file Sen. Mark Warner (D-Va.). But Democratic House Minority Leader Nancy Pelosi's site stayed up, as did Senate Majority Leader Harry Reid's, and House Oversight chair Darrell Issa's. "If you want a balanced approach to reducing the deficit, let your member of Congress know," encouraged Obama. "If you believe we can solve this problem through compromise, send that message." For his part, Boehner dismissed Obama's "balanced approach" as Washington-speak for "we spend more, you pay more."
Two cheers for Boehner’s two-step plan
By James Pethokoukis - Reuters.com
Now is not time to let the perfect be the enemy of the good. Neither the Reid budget plan nor the Boehner budget plan packs the fiscal wallop of Cut, Cap and Balance. But significant progress on cutting debt can still be made before the Aug. 2 (or is it Aug. 8 or 10 or …) debt ceiling deadline. And by that measure, the Boehner plan is not only far better than the Reid plan, it is a pretty darn good plan in and of itself. While both plans would cut some $1.2 trillion in discretionary spending over a decade, Reid would then close up shop until 2013. The only other major cuts would be to future defense spending that no one really expects to happen.
Keiser Report: Mass Psychosis (E167)
Europe's Contagion Effect:
Prepare for a Global Economic Collapse
By Nuno Monteiro, Thomas Wright - SilverBearCafe.com
Europe is on the brink of a major financial disaster. Moody's has downgraded Irish and Portuguese debt to junk, a status until now reserved for Greece. This in turn has led interest rates on Spanish and Italian debt to spike. Contagion of these two major economies is now imminent. If it happens, the global economy will plunge into a crisis that will make the 2008 bankruptcy of Lehman Brothers look like a cakewalk.
For the past two years, the EU has treated the debt crisis in its periphery as a liquidity problem. As Greece, Ireland, and Portugal were forced out of the credit markets by high interest rates, the EU has stepped in, lending them more money. By 2014, Greek, Irish and Portuguese debt is projected to reach, respectively, 180 percent, 145 percent and 135 percent of GDP. At the same time, EU bailout plans have forced troubled countries to implement severe austerity measures that produced recessionary spirals, decreasing the chances that they will be able to meet skyrocketing obligations. Today, Europe's periphery is all but insolvent.
Lawrence Summers on the Euro Crisis 'It Was Always Understood the European System Would Evolve'
Spiegel.de
In a SPIEGEL interview, Lawrence Summers, 56, Harvard economist and former advisor to United States President Barack Obama, discusses the way forward for Europe's stricken common currency and a debt crisis and budget battle in the United States that has baffled many a European. SPIEGEL: Professor Summers, the European Union has just adopted another set of emergency measures to save the euro and the European currency union. Is this just another Band-Aid or is it a sustainable path toward recovery? Summers: Some significant steps were taken at the summit in Brussels and a number of fundamental issues were addressed: Sustainability of debt, provision of support to banks, preventive support for some countries. But saying fundamental issues were addressed does not mean they were resolved. Clearly, there is still much that needs to be done in terms of crisis resolution and mechanisms assuring liquidity and fiscal responsibility.
Ron Paul Talks on The Federal Reserve's
Manipulation of US Dollar & The Tyranny of the TSA
Is Gold in a bubble? No!
CommodityOnline.com
The Gold Report: When you last spoke with The Gold Report in May of 2010, you gave Laurentian Securities' price forecasts for gold that turned out to be pretty conservative pretty quickly. What are you predicting for gold prices now?
Eric Lemieux: I was quite conservative, and obviously, I underestimated gold's momentum. I think right now the price of $1,600/oz. is set to go even higher in light of the increasing global economic turmoil. The U.S. debt ceiling and credit rating will fuel gold's price rise to even greater heights.
Add in the European bankruptcy threats and you have the catalysts to justify gold's further appreciation. Demand is largely based upon the view that gold is effectively a monetary instrument and a "valeur refuge" (store of value). Together, I think they explain the gold price action in the last year, which has been quite remarkable, but based on good fundamentals.
PRECIOUS-Gold hits record on U.S. debt impasse
By Rujun Shen
SINGAPORE, July 27 (Reuters) - Spot gold hit an all-time high on Wednesday, for the sixth time in two weeks, as a
deadlock in U.S. debt ceiling talks continued to drive up safe-haven buying in bullion.
Spot gold rose as high as $1,622.66 in early Asian trade, before easing to $1,621.99 by 0058 GMT. It was up in 16
of this month's 19 trading sessions so far.
U.S. gold GCcv1 gained 0.3 percent to $1,622.30. It set a record of $1,624.3 on Monday.
Who says gold is not a productive asset
By Owais Siddiqui Jr
Many wealthy people we come across are accumulating substantial Gold assets in their portfolios because they know how to own Gold and they know that it is the best way to invest your money. They look at the long-term fundamentals of the U.S. economy and do not like what they see.
Consequently they are building up gold as prevaricate and to some extent a capital gains play. There are many tables of the gold price available on the Internet over the past five years.
Chairman Bernanke, Is Gold Money?
Mises Daily: by Rod Rojas
Last week, when Ron Paul asked the question, "Do you think gold is money?" Fed chairman Bernanke's answer was a resounding no. So, what is money, anyway?
In the simplest terms, money is a commonly used medium of exchange — one that is widely accepted and that serves as an intermediary for trade. As I explained in a previous article,
If you are a plumber, you don't really need money to live (you can't eat money); money just makes it possible for you toindirectly exchange your plumbing services for groceries. If money weren't there, each time you needed food you would have to find a grocer that was in need of plumbing services so that you could barter your services for food.
The factors that pushed gold to record highs
LONDON (Commodity Online): After a lacklustre performance in the past few months, the yellow metal has suddenly shot to record highs in the past week which has not surprised those who were consistently bullish on gold. "My forecast earlier this year..of $1700 Gold by year-end 2011 now seems within easy reach," Precious Metals economist and Managing Director of American Precious Metals Advisors said in a note.
What is more surprising is that gold rally has taken place at a time when 'seasonal weakness' should actually keep prices subdued.
Silver May Rebound to Test $100 Level,
Citigroup Says: Technical Analysis
By Sungwoo Park - SilverBearCafe.com
Silver may more than double to $100 an ounce if the current bull market follows similar patterns seen between 1971 and 1980, according to technical analysis by Citigroup Global Markets Inc.
The attached chart shows spot silver had "two legs up" with an interim corrective move down in the last major bull market from November 1971 through January 1980, Citigroup analysts led by New York-based Tom Fitzpatrickwrote in a report. In the current uptrend that started in November 2001, the metal jumped 5.8 times through March 2008 before slipping 60 percent, they said. The price then rebounded and tested the 1980 high earlier this year, they said.
David Morgan: Silver, Gold And The US Dollar - July 23
Real Prices Indicate Trouble Ahead
BY STEVE SAVILLE - GreenFaucet.com
Let's step back and review some 'big picture' inflation-adjusted (IA) charts. These charts show monthly prices in June-2011 dollars, using our own inflation index to adjust historical data for the estimated loss over time in the US dollar's purchasing power. Our inflation index is based on the assumption that the rate at which a currency loses purchasing power over the long term will be roughly equal to the rate of increase in its supply minus the rates of growth in productivity and population.
The Fed’s Killing the US Dollar Behind the Scenes
Submitted by Phoenix Capital Research - ZeroHedge.com
Things have gotten very ugly for the US Dollar.
Up until last week, the US Dollar looked as though it might be staging some kind of a rally with a series of higher lows. However, we never quite made it above resistance but have taken out the multi-month trendline instead.
Worse still, we’ve seen a new lower low formed, which indicates the upward momentum (however small) has been broken. We now have only two lines of support standing between the US Dollar and all time lows:
Financial Suicide
By Dr. Mark Sircus - TheIntelHub.com
Treasury Secretary Timothy Geithner says it’s "unthinkable" that there would be a time when the U.S. couldn't pay its bills.
That's why he says he's confident of a deal to raise the government's borrowing limit before an August 2 default deadline. He says the U.S. has a top credit rating and that despite all the rhetoric, there are signs that both sides are coming closer to an agreement. But he says the legislative process needs to get started by Monday night.
We are going to talk a lot about insanity in this essay and these declarations by Geithner are a good place to start. Look at this chart from the Office of Management and Budget. That's a graphic image of the United States government's swan dive into oblivion.
Sound Money - The Guardian of Liberty
Doug Tjaden - SilverBearCafe.com
Implementation would reduce the size of government
Liberty is a subject discussed today by many who feel that government entities, (Federal in particular) have overstepped their constitutional jurisdiction. Rightly so. They have. Misguided politicians today use law to dictate their vision of what they feel will provide Americans with "equal opportunity."
Our republican form of government and Constitution place limits on our elected officials, giving them no such mandate. As Americans come to understand this truth, they seek to heed Thomas Jefferson's words and "bind them down from mischief by the chains of the Constitution." Their strategy thus far is to invest huge sums of human and monetary capital in an attempt to prove agencies such as the TSA, NSA, FDA, EPA, NEA, et al. are operating outside of constitutional authority.
The Federal Reserve ADMITS that Its 12 Banks Are PRIVATE -
Not Government - Entities
George Washington's Blog
Much of the tens of trillions in bailout money and "easy" money from quantitative easingwent to foreign banks (and see this, this and this).
Indeed, Ron Paul noted recently that one-third of all fed bailout loans - and essentially100% of loans from the New York Fed - went to foreign banks.
The New York Fed is the most important Fed bank. As Bloomberg pointed out in 2009:
The New York Fed is one of 12 regional Federal Reserve banks and the one charged with monitoring capital markets. It is also managing $1.7trillion [now up to at least $1.9 trillion] of emergency lending programs [and accepting collateral from the banks in return].
"It is well enough that people of the nation do not understand our banking and monetary system,for if they did,I believe there would be a revolution before tomorrow morning." -Henry Ford
While the world waits with bated breath on the Contrived Drama of the Debt Ceiling,the real show has already been played out,secretly and behind the scenes. The first audit of the privately owned and foreign owned Federal Reserve by the GAO,has turned up $16 Trillion dollars of loans all over the world to prop up the global fiat empire. This massive money creation is over and above Hank Paulson’s $700 billion dollar heist of the American public. It is also in addition to QE1 and QE2 that resulted in an illusionary recovery of the economy. All of this money printing has done nothing to create any economic growth and it never will. The scary part is that this was done with no oversight or accountability . (Thank God we have someone like Ron Paul to hold these Elite accountable and expose their crimes before the collapse.)
100 Basis Points to Armageddon
By Bill Bonner - SilverBearCafe.com
Is there a fender anywhere in Christendom that the financial authorities have not dented yet?
They are lost without a compass. They are up the river without a paddle. At the automatic teller without a pin number. They have no theory that has not been discredited. They have no experience which does not contradict them.
In 2006, they couldn't see the crisis coming. In 2008, they couldn't understand it. In 2009-2011, they couldn't fix it. Their theory told them they couldn't spot a bubble; it was obvious to just about everyone else. Even here on the back page, we warned readers. Then, the financial elite mistook the problem for a lack of ready cash. Practically every American household knew what the real problem was: too much debt. And then, while everyone else knows you can't fix a problem of too much debt by adding more debt, the authorities missed the point entirely. Since they began applying their fixes, the national debt of Italy grew $360 billion. Japan's national debt rose $1.1 trillion. And the US added more than $2 trillion. They may have successfully 'kicked the can down the road'; but now it is a bigger can. Last week, they tripped on it again.
Greenspan's Fatal Conceit
Mises Daily: by Jonathan M. Finegold Catalan
In a recent interview for Bloomberg Businessweek, Alan Greenspan was asked about his role in the creation of the 2008 financial crisis. He flatly denied any responsibility.[1] Coming to his own defense, he pointed to his explanation of the financial crisis in a 2010 paper for the Brookings Institution, offering a challenge for others to disprove him.
In the aftermath of the 2008 collapse, Alan Greenspan received a great deal of criticism from almost every direction. Some were wary of Greenspan's monetary policy, and many became skeptical after his failure to predict the housing bubble and the subsequent meltdown (despite his claims to the contrary). Many more were critical of Greenspan's support of the "deregulation" of the banking industry during the 1990s and early 2000s. Given his political and economic ideology — he was a follower of Ayn Rand in his earlier years — and the influence he projected over American public policy, perhaps Greenspan made an easy target.
Super Congress Will KILL Real Congress
Job Destruction Makes Us Richer
by Walter E. Williams - LewRockwell.com
Here's what President Barack Obama said about our high rate of unemployment in an interview with NBC's Ann Curry: "The other thing that happened, though – and this goes to the point you were just making – is there are some structural issues with our economy, where a lot of businesses have learned to become much more efficient with a lot fewer workers," adding that "you see it when you go to a bank and you use an ATM; you don't go to a bank teller. Or you go to the airport and you're using a kiosk instead of checking in at the gate." The president's statements suggest that he sees labor-saving technological innovation as a contributor to today's high rate of unemployment. That's unmitigated nonsense. Let's see whether technological innovation causes unemployment.
In 1790, farmers were 90 percent, out of a population of nearly 3 million, of the U.S. labor force. By 1900, only about 41 percent of our labor force was employed in agriculture. By 2008, fewer than 3 percent of Americans were employed in agriculture. Through labor-saving technological advances and machinery, our farmers are the world's most productive. As a result, Americans are better off.
"There will be, in the next generation or so, a pharmacological method of making people love their servitude, and producing dictatorship without tears, so to speak, producing a kind of painless concentration camp for entire societies, so that people will in fact have their liberties taken away from them, but will rather enjoy it, because they will be distracted from any desire to rebel by propaganda or brainwashing, or brainwashing enhanced by pharmacological methods. And this seems to be the final revolution."- Aldous Huxley
Researchers at the University of Texas recently published a study about why men buy or lease flashy, extravagant, expensive cars like a gold plated Porsche Carrera GT. There conclusion was:
"Although showy spending is often perceived as wasteful, frivolous and even narcissistic, an evolutionary perspective suggests that blatant displays of resources may serve an important function, namely as a communication strategy designed to gain reproductive rewards."
An Economy Destroyed: The Enemy Is Washington
Dr. Paul Craig Roberts - SilverBearCafe.com
Recently, the bond rating agencies that gave junk derivatives triple-A ratings threatened to downgrade US Treasury bonds if the White House and Congress did not reach a deficit reduction deal and debt ceiling increase. The downgrade threat is not credible, and neither is the default threat. Both are make-believe crises that are being hyped in order to force cutbacks in Medicare, Medicaid, and Social Security.
If the rating agencies downgraded Treasuries, the company executives would be arrested for the fraudulent ratings that they gave to the junk that Wall Street peddled to the rest of the world. The companies would be destroyed and their ratings discredited. The US government will never default on its bonds, because the bonds, unlike those of Greece, Spain, and Ireland, are payable in its own currency. Regardless of whether the debt ceiling is raised, the Federal Reserve will continue to purchase the Treasury's debt. If Goldman Sachs is too big to fail, then so is the US government.
America's Fiscal Folly and Squandering of the "Reserve Fund"
By Richard Ebeling - SilverBearCafe.com
The economic crisis through which the United States and much of the rest of the world are now passing is not another supposed instance of the "failure" of unrestrainedcapitalism. It is the failure of the government's own policies. In other words, it is a crisis of the Interventionist State.
The recession has been the inevitable outcome of the prior artificial investment boom and housing bubble, which were caused by the misguided and highly expansionary monetary policy of the Federal Reserve between 2003 and 2008. The money supply was increased by nearly 50 percent during this five-year period, and key interest rates, when adjusted for inflation, were at or below zero. Investment and housing decisions were radically out of balance with available real savings to sustain such long-term financial commitments. Consumers and homeowners were induced by low interest rates and easy mortgage policies to get in way over their heads.
Great Recession Created a Historic Racial Wealth Gap
BySheryl Nance-Nash - DailyFinance.com
The twin demons of the housing market crash and the Great Recession have created historic wealth gaps among ethnic and racial groups in America, according to newPew Researchanalysis: The median wealth of white households is 20 times that of black households, and 18 times that of Hispanic households.
From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, but declined just 16% among whites, says Pew.
USA: Foreigners Can't Use Credit Cards in Embargoed Countries
by P. T. Freeman - LewRockwell.com
Do you think that the U.S. Treasury has the right to tell non-U.S. citizens with no connection whatsoever to the United States in what countries they can use their credit cards? The U.S. Treasury agency called the Office of Foreign Assets Control (OFAC) says that it does.
A few days ago, a letter was sent from RBC Financial (Caribbean) Limited’s head office in Port of Spain, Trinidad. All of the banks’ credit card holders throughout the Caribbean received the same form letter, of which I obtained a copy. It says:
Dear Valued Client:
Your credit card is accepted virtually anywhere you travel throughout the world, except in certain countries that are subject to economic and trade sanctions imposed by regulatory bodies and otherwise.
The 400 Richest Americans Pay An 18% Tax Rate
By Robert Lenzner - Forbes.com
The 400 richest Americans used to pay 30% of their income on the average to Uncle Sam. Today, they pay 18% on the average, according to Steve Rattner, a Wall Street financier, who just presented these figures on Mornings With Joe, MSNBC.
The main reason for the drop in their tax rate of some 40% is the tax cuts by George Bush in 2003, taking the rate paid on dividends and capital gains down to 15%. This reduction in the investment class’s taxes powered the bull market in stocks from the fall of 2003 until the fall of 2007.
Real House Prices and Price-to-Rent
by CalculatedRisk
Case-Shiller, CoreLogic and others report nominal houseprices. However it is also useful to look at house prices in real terms (adjusted for inflation), as a price-to-rent ratio, and also price-to-income (not shown here).
Below are three graphs showing nominal prices (as reported), real prices and a price-to-rent ratio. Real prices are back to 1999/2000 levels, and the price-to-rent ratio is also back to 2000 levels.
Twice the height of the Empire State Building... EnviroMission plans massive solar tower for Arizona
By Loz Blain - SilverBearCafe.com
An ambitious solar energy project on a massive scale is about to get underway in the Arizona desert. EnviroMission is undergoing land acquisition and site-specific engineering to build its first full-scale solar tower - and when we say full-scale, we mean it! The mammoth 800-plus meter (2625 ft) tall tower will instantly become one of the world's tallest buildings. Its 200-megawatt power generation capacity will reliably feed the grid with enough power for 150,000 US homes, and once it's built, it can be expected to more or less sit there producing clean, renewable power with virtually no maintenance until it's more than 80 years old. In the video after the jump, EnviroMission CEO Roger Davey explains the solar tower technology, the Arizona project and why he couldn't get it built at home in Australia.
EnviroMission building massive solar tower in Arizona
Raising The Medicare Eligibility Age
By Megan McArdle - TheAtlantic.com
Raising the eligibility for Medicare is not exactly the most obvious solution for the program. With Social Security, it makes some sense: Social Security benefits are the same no matter how old you are, and the longer people keep working, the more you collect from them in payroll taxes. But with Medicare, people are much less expensive between the ages of 65-67; it's later that the costs start to escalate. Sure, you'll save some money on doctor's visits, and of course some people will die before they enroll. But overall, it's not much of a fix--particularly since many of those people will simply end up on subsidized insurance through the exchanges.
So why is this proposal gaining currency? The progressive answer is that Obama is evil, or craven; the conservative answer is that they've got him on the run. Tyler Cowen suggests more plausible possibilities:
New Tests for Newborns, And Dilemmas for Parents
By AMY DOCKSER MARCUS - WSJ.com
The familiar heel prick that newborns receive is revealing more about a baby's health than ever before. But, as technology opens the possibility of screening newborns for hundreds of diseases, there is controversy over how much parents need to know.
Within days of an infant being born, a few drops of blood are taken from the baby's heel and tested for signs of more than two dozen different conditions, including congenital hypothyroidism and sickle-cell diseases. In many places, babies also are given tests to identify the likelihood of hearing or vision disorders.
4 Million Lost: Here Are the Workers Consumers Can't Rescue Economists say that more spending will create jobs,
but it could be a decade or more before some key sectors
hire back the workers they've cut
By Daniel Indiviglio - TheAtlantic.com
In June 2009, the U.S. unemployment rate was 9.5%. In June 2010, it was 9.5%. In June 2011, it was 9.2%. That's it? In two years, the unemployment rate has fallen by just 0.3%? If it falls by that amount each year, we won't see unemployment dip below 6% for over a decade. And that ignores the millions of unemployed Americans not even accounted for in the official statistic for technical reasons. Why is hiring so slow?
At this point, we know that the unemployment problem is unyielding. Although we've heard lots of ideas for ways to try to create jobs, even the best ones would have a modest short-term impact. A few hundred thousand jobs here or there would be great, but they aren't going to get us back to full employment anytime soon. The U.S. needs about 6 million jobs just to get the unemployment rate back to near 6% -- not including the 125,000 or so new jobs needed each month just to maintain the current unemployment rate. In 2011, the economy is averaging just 126,000 new jobs per month.
It's coming from the sorrow in the street,
the holy places where the races meet;
from the homicidal bitchin' that goes down in every kitchen to determine who will serve and who will eat.
From the wells of disappointment where the women kneel to pray for the grace of God in the desert here and the desert far away Democracy is coming to the U.S.A.
- Leonard Cohen: Democracy
Ilargi: I've left the American debt ceiling debate be for the most part so far because I’m not that interested in people jockeying for election time positions while engaging in kindergarten level "fights". Now that the August 2 deadline is just one week away, we’ll look at the specifics a bit more over the course of the coming days. But not with a focus on what the Washington elite is actually saying; that stuff just bores me.
Instead, I want to shift towards what the inevitable last-minute agreement will mean for the people on the ground. And that will not be pretty. It will be harsh austerity, even if US politicians -and likely media too- will shy away from using the term. Let them. Let them reserve it for what happens in Greece and Ireland if that makes them feel better. A rose by whatever name and all that. Just don't let that fool you.
Unemployed baby boomers are struggling to get by
By Anita Creamer | The Sacramento Bee
Brian Blaschke thought he had positioned himself well to survive the economic downturn. A construction industry veteran, he switched careers in 2007 into construction defect investigation for an insurance company. Fourteen months later, he was laid off anyway.
He hasn't brought home a full-time salary or benefits since November 2008.
"I've picked up bits and pieces of work," said Blaschke, 54, who lives in West Sacramento. "I had a six-month contract with a company. But mostly, I've done handyman services. I put a flier out, and I work a day here and a day there. I make ends meet."
Thousands of Post Offices Face Budget Ax
ByDouglas McIntyre - DailyFinance.com
The Postal Regulatory Commission, which oversees the Postal Service, has suggested that the USPS will release a list Tuesday of 3,653 post offices it will consider shuttering, according to anumber of media outlets. A message on the commission'swebsitefrom Chairman Ruth Y. Goldway read, in part: "The Postal Service has indicated that it intends soon to file a request for an Advisory Opinion on a nationwide plan to review post office facilities for closure."
UPDATE, 12:30 p.m.:Around midday Tuesday, the USPS formally announced its proposalto examine about 3,700 of its 32,000 post offices for closure. The Postal Service also proposed a retail-replacement option for affected communities.
Lenders foreclose on Ritz-Carlton at Northstar-at-Tahoe
By Dale Kasler - SaBee.com
The foreclosure at the Ritz-Carlton luxury hotel is the latest sign of economic distress in the Sierra resort industry.
A group of banks took ownership of the hotel Monday after the developer of the Ritz defaulted on a $165 million loan last year. The property will continue to operate as the Ritz under a 25-year management contract.
Opening to great fanfare in late 2009, the Northstar Ritz quickly fell victim to the recessionary climate that enveloped California and the tourism industry.
Peaceful Republic or Police State- Freedom Watch
Soros Exits And Takes A Cheap Shot At Regulators
By Halah Touryalai - Forbes.com
George Soros is not a casualty of Dodd-Frank, and his decision to stop managing investors’ money shouldn't be blamed on new financial rules.
Billionaire hedge fund managerGeorge Soros announced he is bowing out of the business and will no longer manage other investors' money. In a letter to investors today the Hungarian hedge fund titan explained his decision saying it is "an unfortunate consequence" of new financial reform regulations. That's an odd reason for one of the world's most successful hedge fund managers to stop winning money for investors.
Hungary Destroys All Monsanto GMO Maize Fields
UK.IBTimes.com
In an effort to rid the country of Monsanto's GMO products, Hungary has stepped up the pace. This looks like its going to be another slap in the face for Monsanto. A new regulation was introduced this March which stipulates that seeds are supposed to be checked for GMO before they are introduced to the market. Unfortunately, some GMO seeds made it to the farmers without them knowing it.
Almost 1000 acres of maize found to have been grown with genetically modified seeds have been destroyed throughout Hungary deputy state secretary of the Ministry of Rural Development Lajos Bognar said. The GMO maize has been ploughed under, said Lajos Bognar, but pollen has not spread from the maize, he added.
Muslim Brotherhood Is Deeply Unpopular in Egypt
By Max Fisher - TheAtlantic.com
Is the Muslim Brotherhood, Egypt's conservative religious political party, poised to sweep the country's first-ever free elections and establish an Islamist caliphate in the Arab world's most populous country? It's not just Fox News warning us that the group is set to take over Egypt -- columnists and journalists from across the English-speaking world seem to take the Muslim Brotherhood's coming dominance as inevitable.
But does the Muslim Brotherhood actually have that kind of popular support? For most of Egypt's 50-year modern history, we've never had a way to know because political restrictions made polling so difficult. But with President Hosni Mubarak gone, major polling firms have been able to survey the Egyptian public three times now: in February by the Washington Institute for Near East Policy, in May by Gallup, and this week by Newsweek. Here's what they found about public approval for the Muslim Brotherhood:
Iran Grows Bold While America's Fortunes Wane
By Peter Huessy - FamilySecurityMatters.org
According to a former member of the Iranian Revolutionary Guard Corps, the mullahs in Iran see "this [as] the century of the Islamic awakening” when they areable to control the world’s economy through the control of oil and the world’s strategic passages. Tragically, proposals now on the table to slash the US defense budget by hundreds of billions may make this nightmare scenario come true.
Now living in the United States, he writes: "The Iranian leaders also believe that as long as the U.S. is financially weak, as long as oil prices remain high, and as long as it is involved on too many fronts it will not dare confront Iran. That is why they have made a decision to continue on with their nuclear program in spite of four sets of UN sanctions. They’ve even gone so far as to mock the U.S. for the ineffectiveness of those sanctions."
The North Korean Threat Intensifies The intensifying menace reveals a lot about the U.S. and China.
BY JEREMIAH JACQUES - theTrumpet.com
Remember North Korea, the angry, little rogue nation nestled inside of the protective armpit of China? Although news of Pyongyang’s belligerency has not filled the headlines as much in recent months, the North Korean menace has far from passed and provides sobering indications about the direction of both the United States and China.
North Korea "may be more dangerous than ever," according to Mark Fitzpatrick, director of the Non-Proliferation and Disarmament Program International Institute for Strategic Studies. Writing for the Telegraph on June 21, Fitzpatrick said, "Even though long economic slide and inferiority in conventional weapons technology make an invasion of South Korea less credible than in the past, Pyongyang can—and does—inflict harm in many other ways."
Trading Nuclear Weapons for Hamburgers
President Obama, House Speaker Boehner
present dueling debt-limit plans to nation
By Paul Kane and Lori Montgomery - WashingtonPost.com
A new House Republican proposal to raise the federal debt ceiling was met with deep misgivings Monday by conservatives who consider its spending cuts insufficient, leaving Congress at a standstill a week before the government risks its first default.
As House Speaker John A. Boehner (R-Ohio) tried to rally support for his two-step plan to cut $3 trillion in spending, Senate Majority Leader Harry M. Reid (D-Nev.) offered a strikingly similar proposal for increasing the debt limit before the Aug. 2 deadline. The two leaders, however, remained bitterly divided over Boehner’s demand to hold another vote next year to further expand the government’s borrowing authority.
Can Obama Raise the Debt Ceiling Alone?
In debt ceiling stalemate, one common ground:
American pessimism
By Gov. Mitch Daniels - WashingtonPost.com
Pundits and pollsters pay close attention these days to the American people’s level of faith in their government and its leaders. Yet an even more critical factor for the nation's future will be the reverse: the degree of faith our leaders have in the American people. We’ll see this play out in 2012, arguably the most pivotal election of modern times, and we're seeing it play out even now with our political stalemate over the debt ceiling.
On one side of our national debate are leaders who have never had confidence in the average American's ability to cope with the complexities of modern life or to choose policies that are just and humane. Leadership, as this group sees it, consists of "Benevolent Betters" making wise choices for the rest of us, lest we be victimized by predatory private interests, or just our own gullibility or incompetence. Absent their Betters' tender ministrations, ordinary citizens are too prone to choose the wrong mortgage, the wrong health insurance, the wrong credit card, the wrong school for their child or even the wrong light bulb.
Obama Warns U.S. Debt Threatens 'Serious' Damage
By Margaret Talev and Julianna Goldman - Bloomberg.com
President Barack Obama warned that the nation’s burgeoning debt threatens to do "serious" damage to the economy and that Congress must compromise to address future deficits.
"If we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy," Obama said in a prime-time address from the White House.
He called on lawmakers to put politics aside to reach a deal on a "balanced" approach and blamed the current stalemate on a group of Republicans in the House who are insisting on budget cuts and no tax increases.
Default Clock Ticking at Wash Post;
'Running Out of Runway,' Geithner Says
By Susan Jones
(CNSNews.com) – TheWashington Post Web site is ticking down the days, hours, minutes and seconds to the debt ceiling deadline – the moment on August 2nd when the Obama administration says the U.S. government will be forced to default on its legal obligations.
In fact, it will be up to President Obama to choose which bills to pay and which not to pay. Default is an option, but it’s unlikely the administration would refuse to pay the interest on the national debt.
Peter Schiff Responds to Timothy Geithner on Debt Ceiling
"He's just making this stuff up!"
The obvious compromise between the Reid and Boehner plans
By Ezra Klein - WashingtonPost.com
When it comes to cutting the deficit, the plans proposed by Senate Majority Leader Harry Reid (read it here) and House Speaker John Boehner (read it here) are much more similar than they are different. It’s when they come to raising the debt ceiling that the consensus cracks apart.
Both plans call for $1.2 trillion in cuts to discretionary spending. Both plans envision the formation of a bipartisan "Supercommittee" that will try to find consensus on a larger deficit-reduction package that, if it wins a majority on the Supercommittee, will be immune to amendments and filibusters and be fast-tracked for an up-or-down vote in the House and the Senate.
Pimco's El-Erian Says U.S. Vulnerable to Downgrade
Even If Default Avoided
By Rita Nazareth - Bloomberg.com
The U.S. government may lose its AAA credit rating even if lawmakers reach a plan to avoid a default, said Mohamed A. El-Erian, whose Pacific Investment Management Co. is the world’s largest manager of bond funds.
"In most likelihood, a last-minute political compromise will avoid a default but will leave the AAA rating extremely vulnerable," El-Erian, 52, the Newport Beach, California-based chief executive officer and co-chief investment officer at Pimco, wrote in an e-mail. "Stock markets around the globe will look to price in a greater uncertainty premium on account of political squabbles in the world’s largest economy and the increasing risk that it may lose its sacred AAA rating."
The Looting Of America:
The Federal Reserve Made $16 Trillion In Secret Loan
To Their Bankster Friends And The Media
Is Ignoring The Eye-Popping Corruption That Has Been
EndOfTheAmericanDream.com
A one-time limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act has uncovered some eye-popping corruption at the Fed and the mainstream media is barely even covering it. It turns out that the Federal Reserve made $16.1 trillion in secret loans to their bankster friends during the financial crisis. You can read a copy of the GAO investigation for yourself right here. These loans only went to the "too big to fail" banks and to foreign financial institutions. Not a penny of these loans went to small banks or to ordinary Americans. Not only did the banksters get trillions in nearly interest-free loans, but the Fed actually paid them over 600 million dollars to help run the emergency lending program. The GAO investigation revealed some absolutely stunning conflicts of interest, and yet the mainstream media does not even seem interested. Solid evidence of the looting of America has been put right in front of us, and yet hardly anyone wants to talk about it.
After the Debt-Ceiling Fiasco
By E.J. Dionne, Jr. - Truthdig.com
Hours before the negotiations on the debt limit between President Obama and House Speaker John Boehner collapsed, political reporters received a missive from Mitt Romney’s presidential campaign that served as a reminder of how irrelevant this kerfuffle might feel next year.
The headline read, "Romney for President Launches New Web Video: Obama Isn't Working: Where are the Jobs?"
The video spoke to the difficulties that new college graduates are having finding work in a brutal job market. This bit of campaign propaganda went straight at the core of Obama’s political base - young Americans who volunteered for him by the tens of thousands in 2008 and powered him to victory in state after state. If joblessness disillusions enough of them, the president will be in trouble.
The $1 Billion Armageddon Trade
Placed Against the United States
BY JACK BARNES, Contributing Writer, Money Morning
Someone dropped a bomb on the bond market Thursday - a $1 billion Armageddon trade betting the United States will lose its AAA credit rating.
In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world.
The massive trade wasn't placed in bonds themselves; it was placed in the futures market.
The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03 and 3,100 Treasury bond futures executed at 125-01.
The value of the trade was about $850 million dollars. In simple terms, if that was a direct bond buy, no one would be talking about it.
The Super Congress Will Be -
Like the Federal Reserve - a Non-Constitutional Committee:
"The Super Congress Amounts To An Institutionalization
Of The Gang Structure That Exists Informally ..."
George Washington's blog
Ryan Grim has an update on his story about the "Super Congress", which I discussed yesterday:
The Super Congress amounts to an institutionalization of the gang structure that exists informally in the Senate, where a small number of lawmakers write legislation behind closed doors and then announce it to the public.
Legislation written by the Super Congress would be extremely difficult for individual members of Congress to stop.
No wonder both liberals and conservatives hate the proposal.
Indeed, the Founding Fathers' vision of prosperity has been destroyed - and we've gone from the "wealth of nations" to the "debt of nations" - at least in part because our political system has been subverted by non-Constitutional committees and entities.
Credit Rating Downgrade
Could Happen Before August 2 [FOX 7-23-2011]
US Politicians Take Financial Markets Back To the Edge Again
By: Peter Cooper, Arabian Money - GoldSeek.com
The battle royal between the Republicans and Democrats over the extension of the US debt ceiling above $14.3 trillion, or a historic 100 per cent of GDP, reaches its conclusion this week.
Markets will fall as the debate heats up and brinksmanship takes over. But equally predictable is the rally when the politicians make a deal, rather like the eurozone crisis of the past few weeks and months.
High stakes
However, what is at stake is far more than the need to secure enough funds to stop the US federal government running out of money and a debt default on August 2nd.
A government debt of more than 100 per cent is a classic alarm signal. It is only right that this is debated in a public forum and the issues aired now.
With default threat looming,
Treasury asks investors to buy $99 billion in new bonds
By Tom Petruno - LATimes.com
The U.S. Treasury may not have enough money to pay interest on its debt and other bills come Aug. 2, but it still wants to raise $99 billion selling new bonds over the next three days.
The government will auction $35 billion in two-year notes on Tuesday, $35 billion in five-year notes on Wednesday and $29 billion of seven-year notes on Thursday.
Democrats and Republicans haven't agreed on a plan to raise the $14.3-trillion debt ceiling ahead of the Aug. 2 deadline set by the Treasury, with the GOP holding out for deeper long-term spending cuts.
Without a higher ceiling by next week’s deadline the Treasury says it risks defaulting on debt payments or other obligations such as Social Security payments.
The Pesky Neighbor and the Debt Ceiling
By: Dr. Ron Paul, U.S. Congressman - GoldSeek.com
Imagine you had a pesky neighbor who somehow took out a mortgage on his house in your name and by some legal trickery you were obligated to pay for it. Imagine watching this neighbor throw drunken parties, buy expensive cars, add more rooms to the house, and hire dozens of people to wait on him hand and foot. Imagine that he also managed to take out several credit cards in your name. One by one, he would max them out and then use your good name and credit to obtain another credit card, then another and then another. Each time, this neighbor would claim that he needed the new credit card to pay interest on the other maxed out credit cards. If he defaulted on those cards, your credit score would be hurt and when you wanted to buy something for yourself, it would be more difficult to get a loan and the interest you paid would be higher. Imagine that you mulled this over, and time after time, said nothing as he filled out more credit applications so he would not have to default on the other debt taken out in your name. Meanwhile, another shiny new Mercedes appears in his driveway. At what point do you think you might get tired of this game? And, even though you are left with no really good options, do you think you might eventually tell him to go ahead and default, just stop spending your money!
Debts Make a Deal
By Bill Bonner - DailyReckoning.com
07/22/11 Paris, France – Yesterday, we thought we made a breakthrough. For a second, it seemed as if the clouds had lifted. We had an illusion of comprehension; we thought we saw clearly what was going on.
After a certain point, debt becomes toxic – for a household as well as for a nation. For a nation, Professors Reinhart and Rogoff put that ‘point of no return’ at 90% of GDP. Greece, Japan, and the US – all are beyond that point. America’s gross debt is 100% of GDP. Greece has debt of 120% of GDP. And Japan is off the charts, at 229%.
Reinhart and Rogoff say that once you get past 90% your GDP growth declines by 1%. Sure enough, the US used to run at about 3% annual GDP growth. Now it is down around 2%. Greece, the last time we looked, would be lucky to get any growth at all this year. And Japan, the biggest debtor of all, is actually going backwards…with negative growth.
Greece default 'virtually 100 percent'
By Howard Schneider - WashingtonPost.com
Moody's Investors Service again downgraded Greece's credit standing Monday, setting the stage for a likely declaration that the country is in default as a newly approved rescue planmoves forward.
In the first review by a ratings agency of the plan approved by European leaders last week, Moody's cast doubt on the long-term impact on the conditions under which heavily indebted euro zone countries will be able to borrow money.
The ratings service said the plan does improve Greece's financial prospects for the next few years and probably will stop the problems in that country from undermining confidence in weaker nations such as Ireland and Portugal — diminishing the risk that Europe's financial troubles will spiral into a broader crisis.
The Dynamics of Doom:
Why the Eurozone Fix Will Fail (July 25, 2011)
by Charles Hugh Smith
The only way out of the Eurozone end-game is massive debt forgiveness and a return to national currencies. The first will destroy the banks, the second will destabilize the German export economy. "Extend and pretend" is an endgame, not a fix.
Despite having described why the Eurozone is doomed on numerous occasions, I missed certain dynamics of the EU's endgame. At the risk of overwhelming you, here are a few of my Eurozone-related stories over the past two years:
.... Let's dig into the dynamics of doom:
1. The consequences of austerity. The kleptocratic "fix" is to divert more of the debtor nations' national incomes to debt service. In other words, money that once went to labor (wages) and social services now goes to debt repayments and interest.
What are the consequences of this massive diversion of income? The economy shrinks. Less income means less spending, which means negative growth.
Fiat Currency Is The Bubble, Not Gold
By Jeff Berwick, The Dollar Vigilante - GoldSeek.com
There are countless reasons, which we've shown in our public and subscription-based writings over time, why gold is not in a bubble.
Aside from all the empirical data, however, probably the most obvious sign that gold is not in a bubble is the fact that the media and the government keep proclaiming it to be in a bubble. The media and the government never see bubbles coming.
Just look at Mike Norman, the Chief Economist for John Thomas Financial in 2006, nearly choke on his own tongue laughing at the thought the US housing market was going to collapse on Fox News (fast forward to the final minute).
Gold Holds Near Record
as Obama Says Default Would Trigger Economic Crisis
By Glenys Sim and Susan Li - Bloomberg.com
Gold traded within 0.6 percent of an all-time high as U.S. lawmakers remained deadlocked on how to tackle the country's debt crisis and avert a default before an Aug. 2 deadline, stoking demand for a protection of wealth.
Immediate-delivery bullion was little changed at $1,614.38 an ounce at 9:45 a.m. in Singapore after President Barack Obama said that the nation’s burgeoning debt levels threatened to do serious damage to the economy. Spot gold, which has rallied 7.8 percent in the past month, hit a record $1,624.07 yesterday.
Obama, in a televised address, called on lawmakers to cut the deficit while raising the debt ceiling with a "balanced" approach, blaming the stalemate on a group of Republicans in the House who insist on budget cuts and no tax increases. In response, House Speaker John Boehnersaid that the president had created a "crisis atmosphere" surrounding the debt issue.
Gold Daily and Silver Weekly Charts
JESSE'S CAFÉ AMÉRICAIN
Gold and silver look particularly good in times of thuggery, deception, and the willful arbitrariness of the powerful to promote their own interests, the public be damned.
However, the markets are still clearly signalling that they believe that cooler heads will prevail, and there will be a fresh opportunity to game the market and steal from the many.
The US made a tragic mistake in not pursuing real reform earlier on, and speaking out for it forcefully when they had the momentum and opportunity. Co-opting the reform movement and turning it into a tool of the monied interests was a stroke of genius.
The best lack all conviction, while the worst are filled with passionate intensity.
Tomorrow is option expiration on the Comex. I hear that there are quite a few call options open around the 1600 strike. So we would expect the price of gold to get hammered down below 1600 sometime this week.
Gold Surges to Record on Haven Demand Amid U.S. Debt Deadlock
By Pham-Duy Nguyen and Nicholas Larkin - WashingtonPost.com
July 25 (Bloomberg) -- Gold futures climbed to a record $1,624.30 an ounce as U.S. lawmakers failed to reach an agreement on raising the federal debt limit, boosting demand for the metal as a haven investment.
Republicans and Democrats are preparing separate plans to raise the debt limit to avoid a default as early as Aug. 2. Greece’s credit rating was cut three notches by Moody’s Investors Service. Europe’s debt woes drove gold to all-time highs in euros and pounds last week.
"Gold is feeding off the uncertainty of the debt negotiations," Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. "Gold is in a 'can't lose' situation with the debt negotiations because regardless of the outcome, the dollar is going to suffer."
A Nervous New World
By: Theodore Butler - SilverSeek.com
For more than 25 years, I have closely studied the silver market from a supply/demand and market structure perspective. For almost 15 years before that, I traded silver, along with other commodities, as a commodity and stock broker. In all those 40 years, I have tried to avoid analyzing silver in the context of it being an asset of last resort in a world financial crisis. Not because silver is not an asset of last resort but because that attribute has always been widely accepted and written about. I have always strived to uncover new and unique aspects to silver; there was no real value added in me writing about what was already known.
Crude Oil Could Rise to $120/Barrel by Year's End
247WallSt.com
When futures options for crude oil predict that prices will rise to $120/barrel by the end of the year, and industry analysts are looking at prices closer to $101/barrel, it’s tough to know whom to believe. The difference is important because a price of around $120 will snip about 0.5% off global GDP compared with a price of around $100.
The World Bank puts 2010 global GDP at about $63 trillion, and the IMF estimates world GDP growth of 4.3% in 2011. That’s a difference of more than $300 billion. That lost growth goes to pay for more transportation fuel, fertilizer, and other products that use petroleum as a feed stock. Essentially the entire $300 billion is divvied up among oil producing nations and private oil companies.
China And Iran To Bypass Dollar,
Plan Oil Barter System, And A Deeper Dive
Into The Iranian Oil Bourse
Submitted by Tyler Durden - ZeroHedge.com
One of the more notable events in the past week was the previously discussed reopening of the Iranian Oil Bourse, an attempt by Iran to launch a venue that bypasses US sanctions against Iran which has prevented payment in the world's reserve currency for Iranian goods. "Big deal", some will say, this is not the first time Iran has attempt to upstage the Great Satan. Well, true, although as OilPrice said last week, "what it would take for Iran’s new exchange to survive and flourish are some heavy-duty customers that Washington would be wary of picking a fight with, and Tehran already has one – China... China, the world's largest buyer of Iranian crude oil, has renewed its annual import pacts for 2011. In 2010 Iran supplied about 12 percent of China's total crude imports. According to the latest report of the China Customs Organization, Iran's total oil exports to China stood at 8.549 million tons between January and April 2011, up 32 percent compared with the same period last year. Iran is currently China's third largest supplier of crude oil, providing China with nearly one million barrels per day." Still, the perceived provocation to Uncle Sam should China go ahead and slap America in the face by accepting the existence of the Kish exchange, would echo around the world. Which is why many don't think much if anything will happen. Until today, that is: according to the FT, China has decided to commence an barter system in which Iranian oil is exchanged directly for Chinese exports. The net result: not only a slap for the US Dollar, but implicitly for all fiat intermediaries, as Iran and China are about to prove that when it comes to exchanging hard resources for critical Chinese goods and services, the world's so called reserve currency is completely irrelevant. The implications of this are momentous, especially for US debt, whose indomitability is only predicated upon the continued acceptance of the currency it backs as a global reserve. If China is now openly admitting to the world that it does not need US monetary intermediation, and by implication, the "debt" backing said intermediation, what then? And who will follow China next?
Regulators Close Three Banks;
US Bank Closures Reach 58 In 2011
(RTTNews) - The Federal Deposit Insurance Corp. or FDIC announced Friday the shuttering of two banks in Florida, and one in Colorado, taking the count of U.S. bank closures in 2011 to 58, after the 157 bank closures in 2010.
The three banks were closed on Friday by the regulators, with the assets of the failed banks beings assumed by other banks in an FDIC assisted transaction. The FDIC estimates that the costto the Deposit Insurance Fund or DIF, by the three bank closures will be a total of $256.3 million.
Tampa, Florida-based American Momentum Bank acquired the banking operations, including all the deposits, of two Florida-based banks, Southshore Community Bank (SSHC.OB) in Apollo Beach, and LandMark Bank of Florida in Sarasota. Meanwhile, Kansas City, Missouri-based Bank Midwest, National Association, will assume all of the deposits of Greeley, Colorado-based Bank of Choice from FDIC.
Bankruptcy: From Greece to Rhode Island
By Frederick Sheehan - DailyReckoning.com
07/25/11 Central Falls, Rhode Island faces a plight that should be studied for its application elsewhere. It is nearly out of money. This is common news today, whether in Greece or California. The various parties are assumed to possess a means to carry on. This is assumed because it is generally so. The banks had the Fed; General Electric had the Fed and the FDIC; Greece has the ECB; California is prepared to launch a bridge loan.
Despite the band-aids, the trend towards insolvency continues. Central Falls has reached a dead end.
Quoting The New York Times (July 11, 2011): "The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers' pension fund will probably run out of money in October…"
Foreclosuregate: Banks Seek Immunity from Civil Lawsuits States negotiating immunity for banks over foreclosures
By Scot J. Paltrow - MortgageNewsDaily.com
(Reuters) - State attorneys general are negotiating to give major banks wide immunity over irregularities in handling foreclosures, even as evidence has emerged that banks are continuing to file questionable documents.
A coalition of all 50 states' attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks.
U.S. Can Avoid Default Until September: Silvia
By Jillian Berman and Betty Liu - Bloomberg.com
The U.S. government can avoid a default for at least a month after the Aug. 2 deadline to lift the debt ceiling set by the Treasury Department, said John Silvia, chief economist at Wells Fargo Securities LLC.
"The Federal Reserve and the Treasury can work together to generate enough cash probably for the next two or three months to avoid any kind of automatic default on the Treasury debt," Silvia, who is based in Charlotte, North Carolina, said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. "There's a way of getting around this issue for at least another month or two."
THE REAL CAUSE OF AMERICA'S DEBT CRISIS
By ARK - Truthdig.com
Over the past century, America's rich made their millions and billions through the use of public assets shared by everyone. By virtue of those profits, they have not only a moral, but a rational obligation to pay more for the upkeep of public services.
For example, a rich corporation running a thousand heavy trucks gets more use out of America’s roadways than the average citizen. As the working condition of those roads is necessary for the corporation's profits, shouldn't it pay for their maintenance accordingly?
Who Rules America?
An Investment Manager Breaks Down the Economic Top 1%,
Says 0.1% Controls Political and Legislative Process
By G. William Domhoff - AmpedStatus.org
I sit in an interesting chair in the financial services industry. Our clients largely fall into the top 1%, have a net worth of $5,000,000 or above, and if working make over $300,000 per year. My observations on the sources of their wealth and concerns come from my professional and social activities within this group.
Work by various economists and tax experts make it indisputable that the top 1% controls a widely disproportionate share of the income and wealth in the United States. When does one enter that top 1%? (I'l use "k" for 1,000 and "M" for 1,000,000 as we usually do when communicating with clients or discussing money; thousands and millions take too much time to say.) Available data isn't exact. but a family enters the top 1% or so today with somewhere around $300k to $400k in pre-tax income and over $1.2M in net worth. Compared to the average American family with a pre-tax income in the mid-$50k range and net worth around $120k, this probably seems like a lot of money. But, there are big differences within that top 1%, with the wealth distribution highly skewed towards the top 0.1%.
Tom Woods on Stossel 07/22/11
Sustaining the Unsustainable
By George Will - PatriotPost.com
WASHINGTON -- The tea party, the most welcome political development since the Goldwater insurgency in 1964, lacks only the patience necessary when America lacks the consensus required to propel fundamental change through our constitutional system of checks and balances. If Washington's trajectory could be turned as quickly as tea partyers wish -- while conservatives control only one-half of one of the two political branches -- their movement would not be as necessary as it is. Fortunately, not much patience is required.
The Goldwater impulse took 16 years to reach fruition in the election of Ronald Reagan. The tea party can succeed in 16 months by helping elect a president who will not veto necessary reforms. To achieve that, however, tea partyers must not help the incumbent achieve his objectives in the debt-ceiling dispute.
USDA Closing Roads to Public Lands
While Opening Doors for the United Nations
By Debbie Coffey - Investigative reporter/PPJ
Where? - Colorado - Oregon - Utah - Montana - Idaho (see details in article).... The USDA (a member of the new Rural Council and the IUCN, an organization that promotes U.N.'s Agenda 21) used your tax dollars to send David Ferrell, Director of Law Enforcement and Investigations, to Canada for the 9th Conference of theInternational Network for Environmental Compliance and Enforcement (INECE) where "… environmental compliance and enforcement experts from over 50 countries gathered to identify new actions to promote enforcementcooperation to…support the shift to sustainable development…"
On INECE's website, it states: "Agenda 21: An international mandate for building compliance and enforcement capacity as an essential element of environmental management… Agenda 21, Chapter 8, Section 8.21. Each country should develop integrated strategies to maximize compliance with its laws and regulations relating to sustainable development. Does this seem like the Forest Service might "promote enforcement" to make U.S. citizens comply with Agenda 21? It's important to know what the USDA is "participating" in:
America's Coming Infrastructure Crash Forget about "shovel-ready" projects.
We need bigger, better thinking
about moving people and products across the country
By Michael Mandel - TheAtlantic.com
But as all attention is focused on the debt ceiling battle, here's what's happening on the infrastructure front. Highway, street, and bridge construction jobs through the first five months of 2011 are running 18% below 2007 levels, and the stimulus money is fading. House Republicans are proposing to cut future federal infrastructure funding by roughly one-third. And any defaults among state and local governments would raise borrowing costs for infrastructure bonds across the country and in some cases make the bonds unsellable.
In short, a difficult infrastructure situation is about to turn worse. The U.S. seems likely heading for an infrastructure crash that will terribly damage both our prospects and those of our children.
Heat wave sets new records in US and Canada
Tucone.com
Many parts of the US eastern seaboard, along with parts of Canada, are suffering an exceptional heat wave at present with little sign of temperatures abating.
Across both countries, temperature records have been shattered by the oppressive heat, with temperatures in New Jersey on Friday reaching 108 degrees F (42 degrees C), the highest temperatures ever recorded in the city.
Across the US, half the population of the country is under a heat advisory warning from the government as they try to continue their day-to-day living in the scorching temperatures.
So far, 220 heat records have tumbled across the US and so far at least 22 deaths have been blamed on the heat, although there are fears that this could rise significantly unless there is a break in the weather shortly.
Blackberry maker Research in Motion
to cut 2,000 jobs, names 2 executives to COO roles
By Associated Press - WashingtonPost.com
NEW YORK — Faced with tough competition and falling profits, BlackBerry maker Research In Motion Ltd. is cutting 2,000 jobs as part of a cost savings plan announced last month and is shuffling some senior executives.
The job cuts amount to about 10 percent of the company’s work force. The company said Monday it will notify affected employees this week. It expects to give more information on the layoffs when it reports fiscal second-quarter results on Sept. 15.
The Housing Market Is Worse Than You Think
By Daniel Indiviglio - TheAtlantic.com
Has the state of the housing market gotten better or worse since the first quarter of 2009? To answer this, you have to define what you mean by the state of the housing market. If you mean sales alone, then the state of the market hasn't changed much: existing home sales are up a little from that time, while new home sales are down a bit. But assessing the inventory of defaulted, unsold homes in the market probably provides a better measure of health.
The following chart created by Laurie Goodman, a housing market expert at Amherst Securities, shows the ominous rise of shadow foreclosure inventory. It was part of a slide in a presentation she recently gave at an event last week at the American Enterprise Institute on how the Dodd-Frank financial regulation bill is stifling mortgage credit. Click to enlarge:
The worst may still be ahead for housing – 3 million homes foreclosed on in the last three years with another 5 to 7 million foreclosures in the pipeline. One third of homeowners believe they are underwater.
DoctorHousingBubble.com
Ignoring a problem might bring temporary relief but ultimately a day of reckoning must occur. The underlying problems with housing have been swept under the rug for many years like dust trying to be ignored. Yet the dust is still there and it will ultimately need to be cleaned up. The housing market is simply in a temporary lull yet more troubles are ahead. Take for example the HAMP program that was designed to help 3 to 4 million homeowners. As of the first quarter of 2011 only 634,000 loans have been modified. Why was this program such a major failure? Simply put the program sought to fix an issue that was temporary in nature yet the reality was that the housing collapse is much more systemic than a temporary problem. It was a massive bubble embedded in our banking system. Perspective is important here. Over the last three years some 3 million loans have fallen to foreclosure. Yet some in the industry are projecting another 5 to 7 million foreclosures by the end of 2012. If we figure that foreclosure is the ultimate sign of housing failure then the worse may still be ahead for housing.
Busy Day Tomorrow: Case-Shiller and New Home Sales
by CalculatedRisk
The Asian markets are mostly green tonight, with the Hang Seng up 0.75%.
From CNBC: Pre-Market Data and Bloomberg futures: the S&P 500 is off about 4 points, and Dow futures are off about 25 points. Tuesday ...
9:00 AM: S&P/Case-Shiller Home Price Index for May. Although this is the May report, it is really a 3 month average of March, April and May. The consensus is for flat prices in May, however I expect prices to increase NSA.
FAA in partial shutdown; air traffic unaffected A political dispute in Congress
holds up a funding extension for the agency.
By Christine Mai-Duc, Washington Bureau - LATimes.com
Reporting from Washington— The Federal Aviation Administration was forced into a partial shutdown Monday after Congress failed to temporarily extend its funding. The agency was ordered to furlough thousands of employees and freeze $2.5 billion in airport construction money.
The nation's air travel network remained unaffected, with air traffic controllers and other employees deemed "essential" ordered to work. But nearly 4,000 of the agency's 32,000 employees were put on abrupt unpaid leave.
"The fact that Congress can't work this out is exactly why the American people are fed up with Washington," Transportation Secretary Ray LaHood said in a conference call Monday.
Postal Service aims to shut down 3,600 offices
By Laurie Segall, staff reporter @CNNMoney
NEW YORK (CNNMoney) -- The U.S. Postal Service on Tuesday will release a list of 3,653 post offices that could be shut down.
These locations will be studied for possible closure, according to U.S. Postal Service spokeswoman Sue Brennan. Most of the post offices that are on the chopping block have "lower foot traffic and revenue," she said, and the majority of them are in smaller communities.
In its release, the Postal Service will also outline what it calls a replacement strategy that will have local post offices partner with third party businesses in those smaller communities to create alternative options.
Dow, Saudi Aramco
Approve $20 Billion Joint Petrochemical Plant in Jubail
By Anthony DiPaola - Bloomberg.com
Dow Chemical Co. and Saudi Arabian Oil Co. will build a $20 billion petrochemical plant at the Saudi port of Jubail as the world’s largest crude exporter aims to process more-valuable products from its reserves.
The venture, Sadara Chemical Co., will have capacity to make more than 3 million metric tons of chemicals a year and reach $10 billion in annual sales "within a few years of operation," the companies said today in a statement.
US military spending-The Real Deal-07-24-2011
GE moves X-ray HQ to Beijing
The Business Journal
General electric Co. said Monday that it is moving the headquarters for its global X-ray business from Waukesha to China.
The move of the leadership team is not expected to result in any layoffs in the United States, according to the Wall Street Journal. The X-ray division has 120 employees in Wisconsin, according to the report.
Fairfield, Conn.-based GE (NYSE: GE) said the headquarters move to Beijing will help the division better understand and meet the needs of high-growth markets, particularly China. The move is also designed to serve the Chinese government’s health care reform efforts and consolidate all business operations for the unit in one country.
UAW wants bigger cut of Detroit's newfound profits
LancasterOnline.com
To help American carmakers stay in business, autoworkers grudgingly gave up pay raises and some benefits four years ago.
Now that General Motors, Ford and Chrysler are making money again, workers want compensation for their sacrifice. Just how much they get is the central question hanging over contract talks that start this week between Detroit and one of the nation's largest and most powerful unions.
The negotiations, the first since Chrysler and GM took government aid and emerged from bankruptcy, will set wages and benefits for 111,000 members of the United Auto Workers, including those at Ford, which avoided bankruptcy by taking out massive private loans. The UAW's four-year contracts with the Detroit Three expire on Sept. 14.
Fannie Mae Downgrades Housing Outlook. Again
BY JANN SWANSON - MortgagenewsDaily.com
Fannie Mae's Economic and Mortgage Market Analysis for July describes second quarter economic data received so far as "discouraging," and forecasts growth will likely end up at about the same anemic pace as in the first quarter, an annualized rate of 1.9 percent. While the main culprits responsible for the restrained growth are higher gasoline prices and the supply chain disruptions growing out of the cascading disasters following the Japan earthquake, the tepid housing recovery is another reason for the modest pace of economic growth.
"During the two years of the current economic expansion, residential investment has yet to make a contribution to economic growth, the Analysis states." This is unlike other recessions when typically by this point in the recovery housing has added significantly to growth.
The wisdom of walking away from your mortgage The question is not why homeowners are strategically defaulting.
It's why more aren't.
By Mary Winter
In 2010, John Adams walked away from his Castle Rock house and its $435,000 mortgage. The 49-year-old software architect left the keys in a kitchen drawer and moved his family of five to a less expensive rental.
Another Coloradan who defaulted was a Boulder County mail carrier with three children under the age of 5. He rents now, saving $250 a month.
Both men owed more on their homes than they were worth, and they feared they would be indebted the rest of their lives.
They had much in common with 12,000 Coloradans whose homes are in foreclosure. But unlike many, they made a plan and voluntarily walked away from their mortgages. They asked their lenders for lower payments, and when their lenders refused — in part because both men still had jobs and were healthy — the men stopped payments.
Bernie Sanders, a Violin and the Disappearing Middle Class
Truthdig.com
In December, Sen. Bernie Sanders, I-Vt., made a noble attempt to filibuster against the extension of the Bush tax cuts. Predictably, his effort failed, and President Obama and members of the 111th Congress assumed responsibility for $858 billion in public money lost over the following two years.
Sanders’ testament serves as a rare archive of grim and disgusting statistics rarely mentioned by U.S. politicians and the mainstream press. Fortunately, Nation Books published his eight-and-a-half-hour speech in March, and excerpts have appeared in numerous articles and videos all over the Internet, includingthis especially moving piece by multimedia artists Nora Ligorano and Marshall Reese. —ARK
The American Scream: Going Hoarse Without Speaking
By Christopher Ketcham - Truthdig.com
It is clear that nowhere in American commercial life, save perhaps the graveyard, is there a space not polluted by electronic voices. Every bar and restaurant, every airport lounge, bus depot, train station, every doctor’s or real estate agent’s office, every schoolchild’s welcome in the cafeteria, perforce, is larded over with the tin drum and tap and pan-banging and squeaking-squalling-keening of idols, the caviling of news-clowns, the gibberishing of marketeers. Everywhere is the grin-voice of the announcer, salesman, pitchman, sentimentalist, guffawer, crooner, rabble-rouser, tit-wagger, offering always information that leaves one dumber upon hearing. The world as presented in this mosh of nonsense is endless goof and boof, pratfall, infantilizations, the tin cans of the latest news gonged. It is the great horror of the modern, and to resist it is the duty of civilized men.
Will a Palestinian state be recognized?
Middle East Today-07-22-2011
Why the European Right Can't Be Blamed
for the Attacks in Norway Debates over representation and cultural difference rarely spill into violence. To understand the shooter, we must look beyond politics. -- By Joshua Foust - TheAtlantic.com
The terrorism in Norway is appalling, unforgivable, and shocking. Anders Behring Breivik was deeply involved in a growing movement in European politics, as activist Bruce Bawer notes, becoming well-known in right wing groups and circles "concerned... with the Islamization of Norway." But what does that mean? It would be easy to react against all right-wing movements, but that is, in fact, a mistake. It is also rather unfortunate hypocrisy.
Jeffrey Goldberg is absolutely right to push back on the clutched-pearls reaction by several writers here at The Atlantic who complained the world was too quick to assume al-Qaeda was behind the vicious acts of Norwegian terrorism.
NORWAY’S HORROR: ANTI-SEMITISM BECOMES ISLAMOPHOBIA
By Barry Lando - Truthdig.com
A few days ago, before the terrifying bloodshed in Norway, I received an email from the U.S. denouncing the alarming rise of anti-Semitism in France: "Will the world say nothing—again—as it did in Hitler’s time?" The author cataloged a list of attacks against Jewish targets in France over the past few months. He called for a boycott of France and French products: "Only the Arab countries are more toxically anti-Semitic and, unlike them, France exports more than just oil and hatred."
I’ve been getting such emails now for years since I moved to France. In my view, the major reason for the attacks on Jewish targets is political rather than racial. The leadership of the Jewish community in France (which does not represent the majority of French Jews) has been outspoken in supporting the right-wing policies of the current Israeli government.
Norway rampage culprit calmly tells court
2 other terror cells remain; held in isolation
By Associated Press - WashingtonPost.com
OSLO, Norway — The self-described perpetrator of Norway's deadly bombing and shooting rampage was ordered held in solitary confinement Monday after calmly telling a court that two other cells of collaborators stood ready to join his murderous campaign.
Anders Behring Breivik, who has admitted bombing the capital and opening fire on a youth group retreat on an island resort, told authorities he expects to spend the rest of his life in prison. Declaring he wanted to save Europe from "Muslim domination," he entered a plea of not guilty that will guarantee him future court hearings and opportunities to address the public, even indirectly.
Geithner: House GOP 'praying for default' on debt
By Tim Devaney - The Washington Times
The Treasury Department on Sunday accused House Republicans of "praying for default," because they seem unwilling to raise the debt ceiling.
"Some of them are praying for default," Treasury Secretary Timothy Geithner told "Fox News Sunday."
But House and Senate Republicans blamed Democrats for the deficit. House Speaker John A. Boehner, speaking on "Fox News Sunday," warned the "spending binge has to stop."
"Everybody's talking about the symptoms of our problem, rather than the disease," Sen. Tom Coburn, Oklahoma Republican, added on NBC’s "Meet the Press." "The problem is we're spending way too much money."
U.S. debt ceiling debate must be settled now, Geithner says
By the CNN Wire Staff
Washington (CNN) -- Congress must reach a deal now to raise the federal debt ceiling through 2012 because "you don't want politics messing around with America's faith and credit," Treasury Secretary Tim Geithner told CNN on Sunday.
"The most important thing is that we remove this threat of default from the country for the next 18 months," Geithner said in an interview with CNN's "State of the Union" program. "You want to take this out of politics."
Geithner acknowledged the decision on increasing how much money the government can borrow in order to avoid defaulting on its obligations already has been politicized, saying, "They have taken this a little too far, frankly."
Where's the public legislative DEBATE in this process? Americans have the right to know what is being planned and voted upon...
'Super Congress':
Debt Ceiling Negotiators Aim To Create New Legislative Body
By Ryan Grim - HuffingtonPost.com
WASHINGTON -- Debt ceiling negotiators think they've hit on a solution to address the debt ceiling impasse and the public's unwillingness to let go of benefits such as Medicare and Social Security that have been earned over a lifetime of work: Create a new Congress.
This "Super Congress," composed of members of both chambers and both parties, isn't mentioned anywhere in the Constitution, but would be granted extraordinary new powers. Under a plan put forth by Senate Minority Leader Mitch McConnell (R-Ky.) and his counterpart Majority Leader Harry Reid (D-Nev.), legislation to lift the debt ceiling would be accompanied by the creation of a 12-member panel made up of 12 lawmakers -- six from each chamber and six from each party.
Legislation approved by the Super Congress -- which some on Capitol Hill are calling the "super committee" -- would then be fast-tracked through both chambers, where it couldn't be amended by simple, regular lawmakers, who'd have the ability only to cast an up or down vote. With the weight of both leaderships behind it, a product originated by the Super Congress would have a strong chance of moving through the little Congress and quickly becoming law. A Super Congress would be less accountable than the system that exists today, and would find it easier to strip the public of popular benefits. Negotiators are currently considering cutting the mortgage deduction and tax credits for retirement savings, for instance, extremely popular policies that would be difficult to slice up using the traditional legislative process.
As deadline looms, both parties craft debt plans Coburn: Short-term deal the 'only answer'
By Stephen Dinan - The Washington Times
With no debt deal done and both sides racing an Aug. 2 deadline, Democrats and Republicans on Sunday readied separate backup plans to try to raise the government’s borrowing limit and cut spending.
House Speaker John A. Boehner, Ohio Republican, pitched his colleagues on a plan to raise the borrowing limit by about $1 trillion and match that with similar sized spending cuts — enough to last through the rest of the year, and leaving for later the heavy lifting on taxes and bigger spending items.
Secretive Banking Cartels Enslave Us
By Ron Paul - LewRockwell.com
The debt ceiling debate is providing plenty of opportunity for political theater in Washington. Proponents of raising the debt ceiling are throwing around the usual scare tactics and misinformation in order to intimidate opponents into accepting more debt and taxes. It is important to distinguish the truth from the propaganda.
First of all, politicians need to understand that without real change default is inevitable. In fact, default happens every day through monetary policy tricks. Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away. The dollar has lost nearly 50% of its value against gold since 2008. The Fed claims inflation is 2% or less over the past few years; however economists who compile alternate data show a 9% inflation rate if calculated more traditionally. Alarmingly, the administration is talking about changing the methodology of the CPI calculation yet again to hide the damage of the government's policies. Changing the CPI will also enable the government to avoid giving seniors a COLA (cost of living adjustment) on their social security checks, and raise taxes via the hidden means of "bracket creep." This is a default. Just because it is a default on the people and not the banks and foreign holders of our debt does not mean it doesn't count.
Ron Paul and Neil Cavuto July 23rd 2011
Debt-limit talks at a standstill
as separate strategies take shape in House, Senate
By Lori Montgomery - WashingtonPost.com
House and Senate leaders were threatening Sunday to pursue different approaches to avert a government default, leaving negotiations over the federal debt limit at a standstill and teeing up a dramatic legislative showdown this week.
In a conference call with House Republicans, Speaker John A. Boehner (R-Ohio) called for the party to unify behind a plan that he promised to detail when lawmakers return to the Capitol on Monday. Aides in both parties said they expected Boehner to press ahead with a two-stage strategy that would give the Treasury only about $1 trillion in additional borrowing authority, forcing another battle over the debt ceiling early next year when the parties are embroiled in the heat of the 2012 presidential campaign.
SP 500 and Gold Futures On Sunday Evening
JESSE'S CAFÉ AMÉRICAIN
The apparent lack of a viable debt deal sent stocks dropping and gold soaring in Sunday evening NY trade.
Gold needs to break out from here, or risk a correction back down to support. The reverse is the story for broad equities.
Notice how the SP futures dropped right down to key support at 1322, to mark it firmly. While stocks remain above the 1320 level, Wall Street does not seriously believe that a budget impasse will prevail.
If stocks break down below 1300 we could be in for a Nantucket sleigh ride on the world market.
I thought all along that the teenage drama queens in Washington would take this into last minute sturm and drang to impress their constituents that they are major players with serious concerns and must be appreciated.
Gridlock for Debt Talks Parties Remain Split as Deadline Looms,
Adding Jitters to Global Markets
By CAROL E. LEE And NAFTALI BENDAVID - WSJ.com $$
Republicans and Democrats on Capitol Hill moved along separate tracks Sunday toward a deal to increase the U.S. government's borrowing authority, setting America's gridlocked political system on a collision course with jittery financial markets around the world.
The two camps remained split over how much to increase the debt limit—enough to get past the 2012 election or not—and how much to cut spending. A break in the impasse is needed to ensure the government won't run out of cash to pay its bills after Aug. 2.
Behind economic hard times, fear of the new
By Robert J. Samuelson - WashingtonPost.com
We are witnessing "the crisis of the old order." The phrase, coined by the late historian Arthur Schlesinger Jr. to describe the failure of unfettered capitalism in the late 1920s, also applies to the present, despite different circumstances. Everywhere, advanced nations face similar problems: overcommitted welfare states, aging populations, flagging economic expansion. These conditions define the global crisis and explain why it struck the United States, Europe and Japan simultaneously. We need to move beyond daily partisan fireworksto see this larger predicament.
The old order, constructed by most democracies after World War II, rested on three pillars. One was the welfare state. Government would protect the unemployed, aged, disabled and poor. Capitalism would be tamed. A second was faith in economic growth; this would raise everyone’s living standards while permitting income redistribution. Growth was ordained, because economists had learned enough from the 1930s to cure periodic recessions. Finally, global trade and finance served countries’ mutual interests.
Asian Shares Fall Amid Concerns Over Gridlock On US Debt Talks
By Leslie Shaffer - Of DOW JONES NEWSWIRES - WSJ.com $$
SINGAPORE (Dow Jones)--Asian markets fell Monday, weighed by concerns over stalled negotiations on raising the U.S. debt ceiling, which spurred the safe-haven yen higher and pressured shares of Japan's exporters.
"With just days to go now before the Aug. 2 deadline, investors who had previously written the impasse off as political games are now going to seriously consider the possibility of a default," GFT Global Markets director of global dealing operations Martin Slaney said. "No doubt there will be some midnight oil burnt between President Obama and Democrat leaders, but even were a deal to be cobbled together, the risk-reward of staying long at this late stage is evaporating."
US debt crisis threatens global markets
as Congress is locked in blame game Congressional talks fail to make progress
after Obama's fall-out with House leader John Boehner
By Ewen MacAskill in Washington - Guardian.co.uk
Democrats and Republicans are locked into a dangerous game of seeing who will crack first over the national debt crisis, with the White House warning that the next few days could be stressful for world markets and Americans.
With time running out, congressional leaders from both sides met on Saturday after the dramatic collapse of negotiations between Barack Obama and the House Republican leader, John Boehner, on Friday. But the congressional talks broke up late on Saturday night after failing to make progress.
Barack Obama accuses the US Congress
of risking a global banking catastrophe as debt talks collapse Angry president lashes out after Republicans walk away
from talks on borrowing limit, raising the spectre of US default
By Paul Harris in New York - The Observer.Guardian.co.uk
Talks to stave off a potentially catastrophic US default on debt payments were in crisis as Republicans and Democrats struggled to avert a disaster that could trigger a global economic crisis.
Both sides agree that the US needs to pass legislation to raise its debt limit above its current level of $14.3 trillion (£8.7tn). But negotiations collapsed in acrimony late on Friday over details of a package of spending cuts and tax rises that would help to pay for such a move.
U.S. Debt Ceiling Deadlock, Default & the Markets
By: PhilStockWorld - MarketOracle.co.uk
EU Black Debt Crisis in Remission
On Thursday, Euro-area leaders stepped up their efforts to resolve the ongoing Greek debt crisis, announcing €159Bn ($229Bn) in new aid for Greece. They arranged for bondholders to foot part of the bill and expanded the power of the €440Bn Euro rescue fund to buy debt across stressed European nations - "after a market rout last week sparked concern the crisis was spreading. The fund can also aid troubled banks and offer credit-lines to repel speculators." The Euroland leaders hope to construct a financial "firewall" around struggling countries like Spain and Italy, while assuaging fears that the debt crisis is spreading. French President Sarkozy compared the transformation of the bailout fund to the creation of a "European Monetary Fund." (EU Leaders Offer $229 Billion in New Greek Aid)
Financial Armageddon is Looking Better and Better
By: Bill Bonner - MarketOracle.co.uk
Is there a fender anywhere in Christendom that the financial authorities have not dented yet?
They are lost without a compass. They are up the river without a paddle. At the automatic teller without a pin number. They have no theory that has not been discredited. They have no experience which does not contradict them.
In 2006, they couldn't see the crisis coming. In 2008, they couldn't understand it. In 2009-2011, they couldn't fix it. Their theory told them they couldn't spot a bubble; it was obvious to just about everyone else. Even here on the back page, we warned readers. Then, the financial elite mistook the problem for a lack of ready cash. Practically every American household knew what the real problem was: too much debt. And then, while everyone else knows you can't fix a problem of too much debt by adding more debt, the authorities missed the point entirely. Since they began applying their fixes, the national debt of Italy grew $360 billion. Japan's national debt rose $1.1 trillion. And the US added more than $2 trillion. They may have successfully 'kicked the can down the road'; but now it is a bigger can. Last week, they tripped on it again.
Europe's ideologues took the whole world to the brink of disaster Champions of the European Project
can claim a dubious vindication.
By Ambrose Evans-Pritchard - Telegraph.co.uk
They never wavered in their faith that EU states would yield sovereignty to save the euro if push came to shove, that monetary union would force the pace towards joint EU government.
So it proves to be, for now. But let us not forget that Europe's ideologues have achieved this only by pushing the world to the brink of catastrophe and holding parliaments to ransom with their great gamble, just as the West's financial elites held parliaments to ransom in the banking crash of October 2008.
German taxpayers are being asked to socialise Europe's debts
By Jeremy Warner - Telegraph.co.uk
We showed 'em. You thought we couldn't do it, you thought we’d chicken out and choose disintegration over further integration. But in the end, the unshakeable resolve and will of political leaders has triumphed over the scepticism of markets.
There was no disguising the smug sense of self satisfaction among Europe's policymaking elite on Thursday night after agreement was reached on a further bailout for Greece and the effective establishment of joint liability for eurozone sovereign debt. It was all smiles and mutual back slapping.
"Today was game changing", Christine Lagarde, the newly appointed managing director of the IMF, gushed. "It was amazing to see heads of government come together and say what happens to one could happen to another and act collectively". Europe had demonstrated, she went on, a collective resolve to support and help its members until they were able to regain access to markets.
Angela Merkel faces revolt in Germany over rescue deal German Chancellor Angela Merkel is facing a storm of protest at home after yielding to EU calls for radical action to shore up Spain and Italy, raising doubts over her ability to implement the package. -- By Ambrose Evans-Pritchard - Telegraph.co.uk
Frank Schäffler, finance chair for the Free Democrats (FDP) in the ruling coalition, said the summit deal threatened "the castration of Germany's parliament" by shifting budget power to Europe.
Jens Weidmann, the Bundesbank's chief, said the accord exposes Germany and other creditor states to "sizeable risks" and greatly alters the EU's constitutional landscape.
"The euro area has taken a big step toward a collectivisation of risks. This weakens the foundations of a monetary union where each is responsible for its own budget.
Brussels fiddles while Rome burns
By Jeremy Warner - Telegraph.co.uk
Euro leaders still don't seem to get it. Apparently, France and Germany have resolved their differences on what to do about Greece, with some kind of an announcement on a new bailout, how it is to be funded and haircuts for private investors expected after Thursday’s summit in Brussels.
This is all well and good (or maybe not depending on your point of view) but unfortunately for them, the crisis is now a much bigger one than the immediate problem of Greece. Whatever euro leaders choose to do about Greece, it's going to have virtually no impact on the single currency's wider existential crisis.
The Greek Canary Sings Are Gold, Silver and Natural Resource Investors Listening?
BY JEB HANDWERGER - FinancialSense.com
Are Gold, Silver and Natural Resource Investors Listening?
The market wires are ablaze recently with news that all is well in the relationship between Athens and the elites of the Euro-Zone. The Greek bailout is a fait accompli. The markets are responding with a relief rally that has taken the pressure off of stock and commoditymarkets internationally since the beginning of July.
All is quiet on the Western Front, one would think. The nagging question is: where is all this money to bailout debtor nations going to come from? Indeed, the Greek Canary is singing. Perhaps we should pay attention to its song as he is being accompanied by the melody of the steady beat of the printing presses.
Gold hits fresh record as U.S. debt talks grind on
By Virginia Harrison, MarketWatch
SYDNEY(MarketWatch) — Gold futures hit a fresh record in electronic trading Monday, as U.S. debt-ceiling talks to avert a default continued, with no apparent progress toward a deal.
Gold for August delivery GC1Q +0.69% gained $16.30, or 1.0% to $1,617.70 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours.
Last week gold reached a nominal record of $1,602.50 an ounce.
Adjusted for inflation, gold would have to settle at around $2,400 an ounce to supplant a record around $850 an ounce reached in January 1980.
There is abundant evidence that a well designed, well managed, gold standard is better adapted than a monetary standard managed at the discretion of elite civil servants to maintain price stability and strong economic growth.
~ Ralph Benko
Mr. Benko supports the creation of a government-designed, government-run, and government-enforced gold standard. I do not. This is because there is abundant evidence that such a gold standard always turns into the central-bank fiat money standard that Keynesian economists and monetarist economists insist is the only possible way to maintain long-term economic growth. Fiat money is dishonest money.
Rising Chinese Redback Could Overtake Debased Greenback Could Money Printing in the U.S.
Speed the Rise of the Chinese Currency?
BY DAN COLLINS - FinancialSense.com
Could Money Printing in the U.S. Speed the Rise of the Chinese Currency?
A major tectonic shift in global finance and economics is happening as we speak and it could affect geopolitics and global finance for decades to come. That shift is the rise of the Redback, or the renminbi. The Chinese currency is being powered by massive government and trade surpluses coming out of China as well as a high growth economy.
On the other side of the hill is the U.S. dollar being dragged down by massive U.S. government deficits, endless trade deficits, and rapid dollar debasement through the Federal Reserve printing press.
The Chinese currency, the renminbi or what some people call the “Redback” is rapidly becoming a new global reserve currency and in the future could replace the Dollars position as the preeminent global reserve currency faster than we can imagine.
'Too big to fail' bank law seen as too weak to work S&P skeptical of bailout ban
By Patrice Hill - The Washington Times
A year after the enactment of a sweeping Wall Street reform law, evidence is growing that it failed in its main mission of ending taxpayer bailouts of global banks considered "too big to fail."
Despite an outright ban on bailouts written into the legislation, Wall Street investors and credit agencies remain skeptical that the government will not step in again to prevent any downfall of major banks such as Bank of America, Citigroup or JP Morgan. Those financial goliaths have only grown in size and power, making it more certain that they would bring down much of the financial system with them.
Taxing and Spending, in Balance
By ROBERT J. SHILLER - NYTimes.com
THE fight over the debt ceiling has deflected attention from the serious problems of fixing the economy and finding jobs for the 14 million unemployed. Worse, it has created strong negative feelings about fiscal policy, just when other policy measures seem incapable of restoring economic health.
The very term "fiscal stimulus" has become tainted. John Boehner, the House speaker, refers to a "misguided 'stimulus' spending binge." It's a label that reflects how many people have come to think of government expenditures to stimulate the economy — as a binge, maybe like an overdose of amphetamines. For amphetamines, the aftereffects are mental fatigue and depression. For fiscal stimulus, it is the headache of national debt — or at least that is the all-too-common view.
Broke! 10 Facts About The Financial Condition Of American Families That Will Blow Your Mind
TheEconomicCollapseBlog.com
The crumbling U.S. economy is putting an extraordinary amount of financial stress on American families. For many Americans, "flat broke" has become a permanent condition. Today, over half of all American families live paycheck to paycheck. Unemployment is rampant and those that do actually have jobs are finding that their wages are rising much more slowly than prices are. The financial condition of average American families continues to decline and this is showing up in all of the recent surveys. For example, according to a new Gallup poll, "lack of money/low wages" is the number one financial concern for American families. To make ends meet, many American families are going into even more debt and more American families than ever are turning to government assistance. Right now, more Americans than at any other point since World War II are flat broke and have lost hope. Until this changes, the frustration level in this country is going to continue to grow.
The following are 10 facts about the financial condition of American families that will blow your mind.....
Only 58 percent of Americans have a job right now.
Only 56 percent of Americans are currently covered by employer-provided health insurance.
The median yearly wage in the United States is $26,261.
The average American household is carrying $75,600 in debt.
Casino Shooting Near Seattle Wounds Seven: Police
HuffingtonPost.com
AUBURN, Wash. — A man went to a casino near Seattle early Sunday looking for a woman, found her on a crowded dance floor with another man, shot them both and continued firing, wounding five others before being tackled by a security guard, authorities said.
All seven victims were hospitalized, at least two with critical injuries, Auburn Police Commander Jamie Sidell said. Two others received minor injuries while trying to flee the scene.
Sidell said the shooting happened at about 1:30 a.m. at a crowded nightclub inside the Muckleshoot Casino in Auburn, about 30 miles south of Seattle.
Gunman Kills Self, 5 Others At Texas Roller Rink
HuffingtonPost.com
GRAND PRAIRIE, Texas -- A gunman shouted at the children to leave his son's birthday party at a Texas roller rink before fatally shooting his estranged wife and four of her relatives and then killing himself as others panicked and some fled screaming in their skates, police and witnesses say.
Police said the couple had been having ongoing marriage problems that investigators believe led to the shootings about 7 p.m. Saturday at Forum Roller World in Grand Prairie, about 20 miles west of Dallas. No young children or rink employees were killed. Some people at nearby businesses said they watched as adults and children spilled from the rink in horror.
9 Wounded In House Party Shooting In Central Florida
HuffingtonPost.com
APOPKA, Fla. -- A suspect fired several shots from a handgun after fighting erupted among teenagers at a birthday party at a central Florida home, leaving nine people wounded, authorities said Sunday.
After the shooting, a suspect left the house party where some 30 teenagers had gathered near Apopka, authorities said, adding a gray SUV carrying that person was stopped afterward and the person was undergoing questioning.
Orange County Sheriff's Cpl. Susan Soto, speaking with The Associated Press, said she had no further information on the person and whether charges were expected. She added of the suspect: "He was identified by other witnesses and it is believed he was the only shooter."
[NOTE: we don't write the video titles! -
more discussion of timely topics than title suggests]
DR BILL DEAGLE -
GULF LOOP CURRENT CAUSING HEATWAVE (1/3)
Speculation about possible reasons for Norway bombing - Oslo accord/Palestinian state; John Moore on earthquakes/tsunami/Elenin
DR BILL DEAGLE -
GULF LOOP CURRENT CAUSING HEATWAVE (2/3)
.... heatwave and UV affect on crops and danger to people
DR BILL DEAGLE -
GULF LOOP CURRENT CAUSING HEATWAVE (3/3)
dangerous UV / ozone destroying crops and starting fires; collapse of thermosphere; food crisis possible
The Terrorist Threat We're Ignoring
By David Sirota - Truthdig.com
According to the U.S. government, the list of known bogeymen working to compromise American national security is long, and getting longer by the day. By my back-of-the-envelope count, we have shoe bombers, underwear bombers, dirty bombers and car bombers. Now, we are being told to fear "implant bombers" who will surgically attach explosives to their innards.
All of these threats are indeed scary. But the fear of individual attacks has diverted attention from a more systemic threat of terrorists or foreign governments exploiting our economy’s penchant for job-offshoring. How? By using our corresponding reliance on imports to stitch security-compromising technology into our society's central IT nervous system.
Layoffs, Layoffs Everywhere You Look There Are Layoffs
TheEconomicCollapseBlog.com
The competition for jobs in the United States is absolutely brutal right now, and it is about to get worse. A new wave of layoffs is sweeping across America. During tough economic times, Wall Street favors companies that are able to cut costs, and the fastest way to "cut costs" is to eliminate employees. After a period of relative stability, the employment picture in the U.S. is starting to get bleaker again. New applications for unemployment benefits have now been above 400,000 for 15 straight weeks. Finding a good job is kind of like winning the lottery in this economy. Our federal government and the state governments have made it incredibly complicated and extremely expensive to have employees on the payroll. It is getting harder and harder to get a large enough return to justify the time and expense that hiring employees requires. So many firms now find themselves trying to do more with the employees that they already have. Other companies are turning to temp agencies as a way to reduce costs and increase workplace flexibility. A lot of the big corporations are sending as much work as they can overseas where the wages are far lower and where the regulatory environment is much simpler. All of this is really bad news for American workers that just want good jobs that will enable them to provide for their families.
Social Security Checks Aug. 3rd
Posted on July 18, 2011 by a12iggymom
Just heard Mark Levine on WGST (Atlanta) talk radio. He is a Constitutional lawyer. He quoted from a U.S. House committee investigative session where it was discovered that the U. S. Treasury will have sufficient funds to pay Social Security and Veterans benefits for the month of August 2011. So the head of the Social Security Administration was questioned as to how these benefits would not be paid (Obama had threatened to stop Social Security payments on 3 Aug.). The committee found that Social Security does not have the authority to issue checks. The Social Security checks are issued by the Treasury Department headed by Timothy Geithner. Even Geithner does not have the authority to not issue Social Security unless he is directed by President Obama to not issue the checks. Pres.Obama "alone" will be responsible if Social Security checks are not issued starting on August 3, 2011
Had enough change yet?
TV Home Shows Flip Scripts Amid Real-Estate Bust,
Reality Programs Turn Attention to Foreclosure Deals
By LAUREN A. E. SCHUKER - WSJ.com
Where are the hundreds of thousands of foreclosed homes in the U.S. ending up? On reality television.
This summer and fall, several TV networks are unveiling reality shows about buying foreclosed houses as a way to reinvent the popular "house flipping" formula, which proliferated in cable programming alongside the real-estate boom.
In September, Viacom Inc.'s Spike TV will premiere a new show called "Flip Men" about an entrepreneurial duo living in Salt Lake City who try to make big bucks in the foreclosure market. Later this summer, Bravo's hit reality show about house-flipper-turned-designer Jeff Lewis, called "Flipping Out," takes a personal turn in its fifth season when it shows Mr. Lewis wrangling with lenders in a quest to buy a foreclosed house to live in. A&E Television Networks, a joint venture among Walt Disney Co., Hearst Corp. and Comcast Corp.'s NBC Universal, recently tapped a former "Survivor" contestant to star in a new show later this year about flipping houses—some foreclosed—in Houston. And DIY Network, a division of Scripps Networks Interactive Inc., has a show in development about flipping foreclosed houses that could air in 2012.
Bankruptcy threat to Jefferson County, Alabama Jefferson County could become first US local authority to declare bankruptcy since California's Orange County went bust in 1994
By Phillip Inman - Guardian.co.uk
Once famous for civil rights marches, Jefferson County, Alabama, could become the first US local authority to declare bankruptcy since California's Orange County went bust in 1994.
Amid concerns that many states and local councils could opt for bankruptcy in the face of budgetary pressures, officials are poised to trigger the biggest public sector insolvency in US history, according to a meeting notice from the county commission seen by the Bloomberg news agency.
No Healthy Deals Why are Washington's debt dealmakers
ignoring fundamental entitlement reform?
By Peter Suderman - Reason.com
Earlier this year, Sen. Tom Coburn (R-Okla.) left the so-called Gang of Six, an independent team of senators who took it upon themselves to negotiate a proposed debt deal apart from the administration and congressional leadership. But this week, to coincide with the release of the $3.7 trillion deficit reduction plan, the gang wooed Coburn back. According to an anonymous source quoted inPolitico, the senator, known for his keen interest in entitlement reform, only rejoined after "ferocious" negotiations over cuts to federal health spending. Coburn reportedly held out until the other members agreed to $116 billion in additional cuts to Medicare and Medicaid.
He should've held out longer. The health care policy tweaks that elbowed their way into the final G6 plan won't restrain the growth of federal health spending enough to make a long-term difference.
Agents could lose thousands in salary CBP proposal may spur exodus
By Jerry Seper - The Washington Times
Officials at U.S. Customs and Border Protection (CBP) have proposed a new salary plan for Border Patrol agents that could cost them an average of $7,000 a year in lost pay and spark what some say would be an exodus of veteran agents to higher-paying agencies.
The still-pending proposal by CBP to convert Border Patrol agents from a pay program known as "Administratively Uncontrollable Overtime (AUO)" to an alternative plan called "Law Enforcement Availability Pay (LEAP)" has been described by rank-and-file agents as "unwarranted" and comes at a time the agency has significantly increased its presence along the Southwest border to combat skyrocketing crime by brutal drug cartels.
The Green Police Are No Longer A Joke –
The UN May Create An Army Of "Green Helmets"
To Fight Climate Change
EndOfTheAmericaqnDream.com
Up until now, most people had considered the idea of "green police" to be something of a joke. Well, the time for laughter is over. It is actually being proposed that the UN should create an army of "green helmets" to fight climate change. An article in The Guardianrecently reported that a special meeting of the UN Security Council will be asked to consider the concept of "a new environmental peacekeeping force – green helmets – which could step into conflicts caused by shrinking resources." But we have all seen how a lot of "peacekeeping" and "humanitarian" missions often turn out. The truth is that UN forces have a long track record of brutality, and surely the "green helmets" would be no exception. In fact, someday we may see "green helmets" on American soil enforcing the radical green agenda of the international community.
Audi 2010 Green Car Super Bowl Commercial
Norway dealing with worst massacre since World War II Country tries to come to grips with events
that took at least 93 lives
By Valeria Criscione - Special to The Washington Times
OSLO — Norwegians spent the weekend trying to overcome the shock from the deaths Friday of 93 people in a huge bomb blast in the country’s capital and then a massive shooting spree at an island retreat for young people.
Police arrested a 32-year-old Norwegian man who, in an Internet manifesto, ranted against Muslim immigration in Europe and "indigenous Europeans" whom he accused of "treasonous acts" for violating their heritage.
Norwegian police believe that Anders Behring Breivik may have acted alone in the two attacks Friday afternoon.
Flags flew at half staff, flowers and candles were placed on street corners, and police barricades and military personnel marked the otherwise peaceful city of Oslo, which was irreversibly transformed by the twin attacks.
U.S. trucking funds reach Taliban,
military-led investigation concludes
By Karen DeYoung - WashingtonPost.com
A year-long military-led investigation has concluded that U.S. taxpayer money has been indirectly funneled to the Taliban under a $2.16 billion transportation contract that the United States has funded in part to promote Afghan businesses.
The unreleased investigation provides seemingly definitive evidence that corruption puts U.S. transportation money into enemy hands, a finding consistent with previous inquiries carried out by Congress, other federal agencies and the military. Yet U.S. and Afghan efforts to address the problem have been slow and ineffective, and all eight of the trucking firms involved in the work remain on U.S. payroll. In March, the Pentagon extended the contract for six months.
The Oslo Terrorist in His Own Words:
Bomber Predicted "Europe soon will burn once again"
By James S. Robbins - WashingtonTimes.com
Suspected Norwegian terrorist Anders Behring Breivik, in custody following a shooting and bombing rampage on July 22 that left 92 people dead, believes that the number of Muslims in Western Europe is "reaching critical mass" and that "there is a core of Cultural Communist elites in Western Europe who really want to destroy Western civilization, European traditions, national solidarity and Christianity." But he believes an impending economic meltdown will generate armed grassroots resistance in Europe. He spelled out his beliefs in what he saw as the threats to the European identity posed by radical Muslims and multiculturalists in a series of messages obtained exclusively by The Washington Times. The messages were sent to a source who corresponded with Mr. Breivik on Facebook in July 2009.
US military spending-On the Edge with Max Keiser -07-22-2011
Pro-Russia policy stalls Afghan copters Moscow demands sole-source role
By Bill Gertz - The Washington Times
A Pentagon program to rush 21 helicopters to Afghan military forces in time for this summer’s fighting season was derailed by the Obama administration’s conciliatory policy toward Russia and by Armyprocurement missteps amid allegations of corruption, according to current and former defense officials and military contractors.
Four Russian-made Mi-17 dual-use civilian-military helicopters were sent to Afghanistan in September 2009 under a competitively bid Navycontract that delivered the aircraft in a record 45 days.
But eight other helicopters that were painted in Afghan National ArmyAir Corps colors are now sitting in a warehouse in Slovakia because their delivery was blocked last November by the Russian government. The reason: Moscow demanded the Pentagon use the state arms traderRosoboronexport as the sole-source contractor for the helicopters.
China's spectacular real estate bubble is about to go pop
By Jeremy Warner - Telegraph.co.uk
So you thought that UK housing was unaffordable. Try Beijing and Shanghai, where as can be seen from the graphic below, prices are off the scale relative to income, the commonly used yardstick for measuring affordability. OK, so these are the boom cities of the Chinese economic miracle, but even on a nationwide basis, affordability is no lower than in the UK.
*****
China building electromagnetic pulse weapons
for use against U.S. carriers
By Bill Gertz-The Washington Times
China's military is developing electromagnetic pulse weapons that Beijing plans to use against U.S. aircraft carriers in any future conflict over Taiwan, according to an intelligence report made public on Thursday.
Portions of a National Ground Intelligence Centerstudy on the lethal effects of electromagnetic pulse (EMP) and high-powered microwave (HPM) weapons revealed that the arms are part of China's so-called "assassin's mace" arsenal - weapons that allow a technologically inferiorChina to defeat U.S. military forces.
EMP weapons mimic the gamma-ray pulse caused by a nuclear blast that knocks out all electronics, including computers and automobiles, over wide areas. The phenomenon was discovered in 1962 after an aboveground nuclear test in the Pacific disabled electronics in Hawaii.
WEBSTER TARPLEY - JULY 23 2011 -
WORLD CRISIS RADIO (1/6)
WEBSTER TARPLEY - JULY 23 2011 -
WORLD CRISIS RADIO (2/6)
WEBSTER TARPLEY - JULY 23 2011 -
WORLD CRISIS RADIO (3/6)
WEBSTER TARPLEY - JULY 23 2011 -
WORLD CRISIS RADIO (4/6)
WEBSTER TARPLEY - JULY 23 2011 -
WORLD CRISIS RADIO (5/6)
WEBSTER TARPLEY - JULY 23 2011 -
WORLD CRISIS RADIO (6/6)
Federal Reserve making plans for US debt default The Federal Reserve has started making contingency plans should the US government default on its debt – as talks in Washington over raising the country's debt ceiling dragged on for another day. -- By Richard Blackden - Telegraph.co.uk
With the US unable to pay all its bills unless the $14.3 trillion (£8.8 trillion) ceiling is raised by August 2, financial regulators in the US are working through the possible consequences, according to a senior official at the central bank.
"We are in contingency planning mode," Charles Plosser, president of the Philadelphia Federal Reserve Bank, told Reuters. "We are all engaged ... It's a very active process."
Despite repeated warnings of the financial disruption that's likely to ensure from a default, The White House, and both parties in Congress, appear no closer to striking a deal as this week draws to an end. President Barack Obama and the Republicans and Democrats are trying to reach an agreement on how to cut America's long-term deficit as a condition of raising its debt ceiling.
U.S. Is Bankrupt and We Don’t Even Know It CBO data .... a fiscal gap of $202 trillion
By Laurence Kotlikoff - Aug 10, 2010 - Bloomberg.com
Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.
What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.
Last month, the International Monetary Fund released its annual reviewof U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: "Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP."
US Is Bankrupt and We Don't Even Know It:
Laurence Kotlikoff - August 10, 2010
Laurence Kotlikoff on the US Fiscal Meltdown
and Potential Rise of a Third Party [audio] Kotlikoff also assesses the political demagoguery
of the Medicare debate, and offers an alternative plan
By James J Puplava CFP with Laurence J Kotlikoff - FinancialSense.com
Professor Laurence Kotlikoff joins Jim Puplava on Financial Sense Newshour to discuss the US fiscal crisis as well as the Medicare debate turning into "MediScare" through political demagoguery.
Professor Kotlikoff is a William Fairfield Warren Professor at Boston University, a Professor of Economics at Boston University, a Fellow of the American Academy of Arts and Sciences, a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research, and President of Economic Security Planning, Inc., a company specializing in financial planning software. Professor Kotlikoff received his B.A. in Economics from the University of Pennsylvania in 1973 and his Ph.D. in Economics from Harvard University in 1977. Professor Kotlikoff publishes extensively in newspapers, and magazines on issues of deficits, generational accounting, the tax structure, social security, Medicare, health reform, pensions, saving, insurance, and personal finance.
Raising The Debt Ceiling Does Not Fix The Problem
By Jim Sinclair
My Dear Friends,
The idea that an increase in the debt ceiling is a solution to anything is nonsense. The event would be simply a can kick forward for a very short period of time. Increasing debt is not a solution to a debt problem. It actually makes the problem worse It is an act of extending your Federal credit card borrowing line so you can use it to pay your mortgage.
Calling increasing the debt ceiling a solution to a debt problem is too stupid to be stupid. The unwind is deeply entrenched since the failure of OTC derivatives in 2008. There has been no meaningful intervention in this economic downward spiral at the level of the cause. The downward spiral therefore continues unabated.
All downward spirals go to zero unless an intervention takes place at the level of the cause of the problem in the first place. OTC derivatives are what turned a four year correction into the greatest economic accident in human history.
OTC derivatives only go one way in size and that is up. Changing the way nominal value is determined does not solve the problem. All that does is add camouflage to the problem. It does not solve it.
Debt Crisis Being Used as Shock Doctrine
to Steal More Money from the American People
to Give to the Richest 1%
George Washington's Blog
I noted in 2008:
The powers-that-be have used the "Shock Doctrine" to pass anti-American, fascist legislation while the public was in a state of shock.
This applies to economic shocks, as well as physical attacks like 9/11.
Indeed, right now, Paulson and Bernanke are using the shock doctrine to try to ram through legislation that would help out the fat cats at the expense of taxpayers, and give the government control over the free market.
But there is some resistance. For example, Senator Leahy and the New York Times are questioning Paulson's use of shock and awe:
• Senator Leahy said "If we learned anything from 9/11, the biggest mistake is to pass anything they ask for just because it's an emergency"
• The New York Times wrote:
"The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress."
The Half-Trillion Plan
By Charles Krauthammer - WashingtonPost.com
The debt ceiling looms. Confusion reigns. Schemes abound. We are deep in a hole with only three ways out: the McConnell Plan, the G6 Plan and the Half-Trillion Plan.
— The McConnell essentially punts the issue till after Election Day 2012. A good last resort if nothing else works.
— The G6, proposed by the bipartisan Gang of Six senators, reduces 10-year debt by roughly $4 trillion. It has some advantages, even larger flaws.
— The Half-Trillion raises the debt ceiling by that amount in return for an equal amount of spending cuts. At the current obscene rate of deficit spending — about $100 billion a month — it yields about five months’ respite before the debt ceiling is reached again.
Dr. Webster Tarpley:
Washington D.C. Drives US Towards Catastrophic Default!! 1/2
Dr. Webster Tarpley:
Washington D.C. Drives US Towards Catastrophic Default!! 2/2
Corporate Tax Holiday in Debt Ceiling Deal: Where's the Uproar?
By Matt Taibbi - RollingStone.com
Have been meaning to write about this, but I'm increasingly amazed at the overall lack of an uproar about the possibility of the government approving another corporate tax repatriation holiday.
I've been in and out of DC a few times in recent weeks and one thing I keep hearing is that there is a growing, and real, possibility that a second "one-time tax holiday" will be approved for corporations as part of whatever sordid deal emerges from the debt-ceiling negotiations.
I passed it off as a bad joke when I first saw news of this a few weeks ago, when it was reported that Wall Street whipping boy Chuck Schumer was seriously considering the idea. Then I read later on that other Senators were jumping on the bandwagon, including North Carolina's Kay Hagan.
Euro leaders agree second Greece bailout and overhaul of rescue fund
EUOBSERVER / BRUSSELS - Following weeks of political and market turbulence, eurozone leaders on Thursday undertook radical steps to safeguard the single currency agreeing the beginnings of a European Monetary Fund and a fresh bailout for Greece.
With the one-day emergency summit representing something of a make-or-brake gathering for the 17-nation eurozone, leaders were quick to underline the far-reaching and "credible" nature of the agreement.
"For the first time, the politics and the markets are coming together," said European Commission president Jose Manuel Barroso, with markets having to date doubted the fundamental commitment of leaders to saving the eurozone.
Euro in Crisis: Will the Latest Deal Restore Confidence?
By Megan McArdle - TheAtlantic.com
Forget the bickering over the debt ceiling in the US; that's a side show to the main event right now, which is the attempt of the eurozone to fix its markets before the whole currency zone melts down. The results of today's much-awaited European financial summit are now out, and they're . . . underwhelming.
Basically, both the Greek bonds owned by banks and insurers, and the loans Greece has received from the European stabilization fund, will have their terms extended as far as possible. The ratings agencies are going to call this a selective default (only the ratings of bonds which are part of the private debt swap will be affected), which for reasons that are not clear to me, is supposed to only last a few days before the debt swap actually starts to raise their credit rating. The European Central Bank will waive its rules against accepted defaulted collateral, so hopefully, the Greek banking system will not melt down. The austerity plan will go forward as previously outlined.
20 Banks That Are Praying For The European Bailout To Work
Simone Foxman - BusinessInsider.com
Banks have the most to lose if the PIIGS (Greece, Italy, etc.) go belly up.
Despite reassurances from EU leaders that they would step in to ensure the viability of banks and even Greek bonds -- and the surging Euro markets -- it is quite possible that all that will go down the drain if the now inevitable "selective default" goes awry.
So who's in the most trouble.
We took a list of the largest European banks by assets and compared their market cap, common equity, and total exposure to PIIGS debt (thank you for the bank statistics, EBA!). Then we calculated exposure to PIIGS debt (sovereign and private) as a percentage of the banks' common equity. (Notice that HSBC, ING, and even Societe Generale are all absent from this list.)
Democrats Balk at Potential U.S. Debt-Limit Deal
By Julie Hirschfeld Davis and Laura Litvan - Bloomberg.com
Democrats reacted angrily to reports that the White House is cutting a deal with House Republicans to boost the U.S. debt ceiling and reduce deficits by about $3 trillion over 10 years without immediate revenue increases.
President Barack Obama’s team has told congressional leaders it is pursuing such a deal, according to two officials familiar with the talks, as the White House and House Speaker John Boehner of Ohio denied one was at hand.
The officials, who described outlines of the plan on condition of anonymity, said the leaders were told it would cut spending while calling for a future tax overhaul that could raise $1 trillion in additional revenue.
Debt-limit talks:
As Obama, Boehner rush to strike deal,
Democrats are left fuming
By Lori Montgomery and and Paul Kane - WashingtonPost.com
President Obama and House Speaker John A. Boehner rushed Thursday to strike agreement on a far-reaching plan to reduce the national debt but faced a revolt from Democrats furious that the accord appeared to include no immediate provision to raise taxes.
With 12 days left until the Treasury begins to run short of cash, Obama and Boehner (R-Ohio) were closing in on the most ambitious plan to restrain the national debt in at least 20 years. Talks focused on sharp cuts in agency spending and politically painful changes to cherished health and retirement programs aimed at saving roughly $3 trillion over the next decade.
S&P Reiterates Warning of 50% Chance
of U.S. Downgrade Within Three Months
By Dave Liedtka - Bloomberg.com
Standard & Poor’s reiterated that there is a 50 percent chance that it will lower the U.S. credit rating within three months as lawmakers struggle to reach agreement over raising the nation's debt ceiling and deficit reduction.
Erica Payne on FBN's Freedom Watch
With Judge Napolitano 07-14-2011
Greece to default as EU agrees €159bn bailout Greece set to lead the eurozone's first-ever default
as deal paves way for economic integration.
By Louise Armitstead, and Bruno Waterfield - Telegraph.co.uk
Greece is set to lead the eurozone's first-ever default as European leaders agreed that the private holders of Greek debt will take a hit of €50bn over three years.
Breaking weeks of deadlock, the heads of the 17 eurozone governments conceded that a "controlled" failure was the only way to prevent the collapse of the single currency and a global financial rout.
As part of the deal Greece will also receive another bailout package - from Europe, the International Monetary Fund and the private sector - worth €159bn. The second bail-out, which follows the €110bn rescue funds agreed last May, will cut Greece’s debt by a quarter. The private sector will provide €49.6bn via a variety of measures in the next three years including a €12.6bn debt buy-back programme. The fresh rescue attempt has been agreed to "decisively improve the debt sustainability and refinancing profile of Greece".
Bailed out – again. Eurozone throws Greece €109bn lifeline
Bailout fund turned into much more ambitious instrument in deal hatched following months of dithering
By Ian Traynor in Brussels - Guardian.co.uk
European leaders have sealed a new €109bn bailout for Greece and erected defences against the debt crisis spreading to Italy and Spain by turning the eurozone's 15-month-old bailout fund into a much more ambitious instrument resembling an infant European monetary fund.
The deal, hatched at an emergency summit in Brussels of eurozone leaders, following months of dithering and division, also entailed large losses for Athens' private creditors, making it almost certain that Greece would become the first eurozone country to be deemed to be in some form of default on its sovereign debt.
Erdogan Boom Under Threat
as Greek Crisis Exposes Turkey's Financing Risk
By Steve Bryant and Maria Petrakis - Bloomberg.com
The boom that turned Turkey into Europe's fastest-growing economy may be imperiled by the debt crisis in neighboring Greece, the continent's worst performer.
Prime Minister Recep Tayyip Erdogan hailed Turkey's 11 percent first-quarter expansion as "magnificent" on June 30. It hasn't prevented the lira from sliding to a two-year low against the dollar and a record to the euro, as the country's trade deficit widens on surging demand for imports. Turkey needs increasing flows of cash to finance the gap -- just as investors take alarm at the risk of default in Greece, where output shrank 5.5 percent.
European crisis summit: 'Marshall plan' emerges for Greek economy Stock markets and the euro rallied on Thursday after a draft agreement emerged from a crucial summit taking place in Brussels
By Julia Kollewe, Graeme Wearden and Ian Traynor - Guardian.co.uk
Stock markets and the euro rallied on Thursday after European leaders moved closer to hammering out a new rescue plan, including a "Marshall plan" to stimulate the Greek economy.
The euro gained more than one and a half cents to $1.433, after a draft agreement emerged from a crucial summit taking place in Brussels. This plan would give Greece, Ireland and Portugal more time to repay the money loaned to them through their recent bailouts.
Europe steps up to the plate Europe's leaders have grasped the nettle. Faced with a spiralling bond crisis in Italy and Spain and the greatest threat to the EU project for 50 years, they have ripped up their bail-out strategy and taken a large stride towards a "liability union".
By Ambrose Evans-Pritchard - Telegraph.co.uk
The three rescued countries of Greece, Ireland and Portugal have in turn been offered a lifeline out of crippling debt-deflation.
The tetchy negotiations dragged on for hours, with an irascible Finland at one point demanding that Greece offer the Parthenon, the Acropolis and its islands as collateral for the second €159bn rescue package.
France and its allies abandoned their long struggle to prevent a Greek default, opening the way for the first sovereign insolvency in Western Europe since the Second World War. Objections from the European Central Bank were swept aside. Germany has obtained its fig leaf concession: burden-sharing for bankers.
Relax: it’s not all under control
by Roderick Parkes - EUObserver.com
The Danes are jumpy about immigration from North Africa. The Germans and Austrians worry about Polish plumbers. The French are dead set against Romania joining the EU’s Schengen Area. The headlines may be exaggerated, but one thing is certain: the merest hint that immigration is not under rigid control makes Europeans nervous.
Recent developments in Denmark show why. Membership of the EU’s passport-free travel area means individual governments can’t control migration in the same way as they used to, but there’s a good reason – the Schengen Area is a cornerstone of the EU’s prosperity and political cohesion.
The Debt Crisis and the War Cycle
BY CLIF DROKE - FinancailSense.com
Many books have been written in recent years on the problems facing us due to our nation’s enormous debt. Indeed, many more could be written before the full scope of the debt problem and its consequences have been exhausted. One of the best books I’ve read which describes the debt problem in its simplest and most fundamental terms was written by one Richard Hoskins, entitled War Cycles/Peace Cycles.
I recently had the privilege of speaking with Mr. Hoskins about this, his most famous book, which was first published in 1985. His book anticipated by many years the infamous credit crisis of 2007-2008. Hoskins' intimate knowledge of U.S. monetary and economic history, as well as that of his native Virginia, makes him uniquely qualified to analyze our nation’s current monetary and economic problems since, in his words, "The things that are going to happen in the future have already happened in the past."
***** going to war *****
CVN 77 G.H.W. Bush Enters Persian Gulf
As CIA Veteran Robert Baer Predicts September Israel-Iran War
Tyler Durden - SilverBearCafe.com
One look at the most recent naval update maps shows that in addition to global insolvency (courtesy of the broke European dominoes and a potentially technically broke US), a UK on the verge of a parliamentary scandal courtesy of a media baron whose empire is crumbling, and not to mention yet another downward inflection point in the global economic slowdown courtesy of the end of QE2 and no replacement yet, market watchers may have to start factoring in geopolitical risk yet again. While the fact that Syria, Yemen, Egypt, Tunisia, and now Turkey, are ever more increasingly on edge is apparently something Mr. Market has managed to internalize, when it comes to geopolitics everyone stops to listen when renewed Iran-Israel rumblings reappear. Which may just be the case.
Debt ceiling: What happens if Congress doesn't raise it?
By Jeanne Sahadi and Charles Riley @CNNMoney
NEW YORK (CNNMoney) -- What happens if lawmakers fail to raise the debt ceiling by the Aug. 2 deadline?
Well, it's hard to say, because lawmakers have never before put the United States in a position where it can't pay all its bills.
But it wouldn't be pretty. A failure to raise the debt ceiling would likely send shockwaves through the underpinnings of the financial system -- and possibly ripple out to individual investors and consumers.
The federal government would be forced to prioritize its payments. It would risk defaulting on its financial obligations. And if that happens, credit rating agencies would downgrade U.S. debt.
An Open Letter to John Boehner
THE PLAIN TRUTH by Judge Napolitano 7/13/11
Could U.S. debt default ding money market funds?
By John Waggoner, USA TODAY
Talking about the risks of money market mutual funds is a bit like talking about the Death Panda or the Fluffy Kitten of Doom. Money funds aren't supposed to have risks. Or not many, anyway.
And, at the moment, they don't. But a U.S. government default could make money funds far riskier than they are now.
A default isn't the same as cutting up your credit cards. It's more like buying a car and refusing to pay the dealer. If the U.S. declines to pay Social Securityrecipients, or doctors, or its other legal obligations, those obligations don't go away. They simply add to the debt — and reduce the nation's trustworthiness.
Gold has been around for thousands of years so there is plenty of investment research. The more research available, the better chance you have of assessing an asset's prospects.
If you buy gold there is no VAT to pay on the purchase. However, Silver and other precious metals are not VAT exempt so you're 20% down before you've even started with those.
The gold market has evolved into a highly competitive and efficient arena. So the bid/offer spread (or difference where a dealer will buy and sell gold) is relatively tight (perhaps 5-10%). This means the market doesn't have to move up much for you to enjoy profits.
Gold edges up but may fall after Europe talks
SINGAPORE (Commodity Online): Gold edged higher ahead of the crucial European leaders meet as spot gold hovered near $1601 an ounce in Asian trade Thursday.
Gold for immediate delivery was seen trading at $1601.97 an ounce at 1.00 p.m Singapore time while US gold for August delivery was seen trading at $1602.81 an ounce on the comex division of Nymex.
Analysts said investors are looking forward to euro zone leaders meeting scheduled for later Thursday and also on the outcome of deficit talks in the US.
Yen's Hidden Global QE Signal and Gold Breakout
Jim Willie CB - SilverBearCafe.com
Take a short break from all the hubbub in the United States over the faltering USEconomy, the reckless politicians pretending to come to a USGovt budget agreement (small or large), and the tacit admission by USFed Chairman Bernanke that indeed QE3 is very likely. The June Jobs Report confirmed my forecast of a moribund economy in deterioration. The Republicans will not budge on their refusal to approve tax increases. The Democrats will not budge on their refusal to approve entitlement cuts. The Pentagon through hidden pressures has managed to keep the sacred war off the table for discussion, even though it stands as the largest factor in the federal deficits. But the queer item is that President Obama spent most of his time in the last six weeks raising $86 million for his re-election campaign. His taking the high road in the budget discussion reeks of hypocrisy.
Gold to move heavily after Europe talks
BRUSSELS (Commodity Online): Investors are looking forward to the meeting of European leaders later today as the outcome could decide the future direction of gold.
Failure to reach agreement could cause economic damage to the global economy, the head of the European Commission warned.
"A positive resolution to either the Greek debt problem or a deal by U.S. lawmakers, or both, will likely undermine gold, targeting $1,550 and $1,500 in the short term," said a Singapore-based trader. "A failure will push Gold back into overdrive with upside technical targets around $1,640-$1,650 and then $1,700."
Silver Update 7/19/11 Caught in the act
Has the Gold and Silver Market Topped?
BY JULIAN PHILLIPS - FinancialSense.com
It is this implication that is lodged deep in investor's minds, particularly in the developed world. It seems to be the case going right back to the 1800’s when what we know as 'markets' in the financial world really developed. Most markets have gone through these two phases more than once. Why are they given these titles? A 'bull' market is called such because when a bull attacks he throws his head upwards catching his victim on his horns and tossing it. It’s called a 'bear' market because when a bear attacks he claws his victim in a downward thrust. We look at whether the gold market is open to these phases to find the answer to our question. Money or Commodity
If gold is a commodity then it rises and falls as a result of the ebb-and-flow of the economies that use it. If so, it will move in synch with the financial markets cycles and remain subject to their dominance. But when it comes to gold and silver, nothing is that simple!
Massive short squeezing on the way for Silver
(Commodity Online): Is a massive short squeezing potential seen on the horizon for Silver?, Yes, says James Turk, founder and president of Goldmoney.
If Gold and silver were to achieve prices north of $1,600 and $40, respectively, and hold above these benchmarks for a day, or two, many of the oversized number of short contracts will have to cover to cut losses from the adverse move higher—a move, said Turk, that could rival the monster rally of August through April.
"I wouldn’t be surprised to see $2,000 (gold) very quickly," Turk speculated in an interview to KWN.
Hong Kong Metals Exchange Opens Silver Contract Friday!
By Chris Duane - SilverBearCafe.com
This is the news that I have been waiting for and is probably the reason why silver has been so strong the past couple of days
The HKME is starting its silver contract this Friday July 22nd! This officially breaks the Anglo American monopoly on silver. This will be the first time that Asians can buy and take future delivery of silver in Asia. No longer can the CME raise margins close to 100% in 8 days. (Then refuses to lower them despite a 30%+ drop in 5 days.) The extended hours should also stop the 10 am smack down since traders can now access the HKME.
The silver shorts should be fearing the hundreds of millions of Asians that will be entering this small market.
Living Through a Currency Devaluation
Lone Ranger Silver - SilverBearCafe.com
In 1976 I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn't want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion.
David Morgan on Silver Price Manipulation,
Delivery Default and Supply Shortage Risks
BY CHRIS MARTENSON PHD - FinancialSense.com Chris Martenson: I am really pleased to have you here today and very interested in your views on silver, of course, naturally for you. The first thing I would like to start with: there is a lot of talk out on the internet, on my blog and at other blogs where people are wondering what is going on with the silver market. Is it a fair and free market? I guess this could be asked about the larger precious metals markets as well; and maybe the commodities markets, too, which people are concerned about. But with your experience and what you have seen: you have been looking at the silver market for a long time, tell me how you think the market currently is constructed and whether you think it is free and fair. David Morgan: Okay, well, it is definitely not a free market in the true since of the word, and it is manipulated but probably not at the level that a lot of people consider it to be manipulated. This question comes up fairly often. One of the more recent times it came up was in a very large public forum at the Silver Summit in 2009. The Silver Summit was actually a creation of mine and one of the mining guys in the Silver Valley that is fairly close to where I live in Spokane. The Silver Valley is in the Coeur d'Alene mining district in Idaho, and I am about an hour and a half from there. Anyway, we started Silver Summit several years ago, and it grows every year. And 2009 had a pretty good turnout. I am going to guess probably 800 to 1,000 people. And during one of the intermissions, Al Korelin, who has his own radio show, gathered us as the MC. Us meaning myself, Bill Murphy from GATA, Roger Wiegand, Trader Rog, and Jeff Christian from CPM Group, and I believe that was it, those four. It might have been one more, and if I am leaving someone out, forgive me, but…and I wanted to get the debate going between manipulation and non-manipulation.
The Keiser Report 166
The Gang of Six’s $3 trillion tax hike
By Marc A. Thiessen - WashingtonPost.com
Sen. Kent Conrad is claiming that if the Congressional Budget Office scored the "Gang of Six" deficit reduction plan, "it would find net tax relief of approximately $1.5 trillion." This is deeply misleading. Far from a net tax cut, the Gang of Six plan would result in a massive tax hike of as much as $3 trillion. Democrats understand this — which is why President Obama was so quick to embrace the plan.
When normal people judge what constitutes a tax increase, they compare what they will pay tomorrow to what they are paying today. If that number goes up, it's a tax increase. That is not how the Gang of Six did its tax calculations. The Gang of Six's assumptions are based on current law, not current policy. Big difference. Current policy assumes Americans will continue to pay what they are paying right now. Current law assumes that, over the next decade, taxes will go up by some $4.5 trillion dollars because of tax cut expirations. The Gang of Six reduces this $4.5 trillion tax increase by $1.5 trillion — and calls it a tax cut. But the practical result is really a $3 trillion tax increase over what Americans pay today. Consider:
The Fed Is Now More Leveraged That Lehman Brothers Was
By Graham Summers - SilverBearCafe.com
The 2008 Crisis occurred when private US banks became so distrustful of one another's balance sheet risk that interbank liquidity dried up triggering a systemic implosion in the unregulated derivatives market, particularly in Credit Default Swaps (which was a $50-60 trillion market at the time).
The Federal Reserve dealt with this situation by suspending accounting policies (permitting banks to lie about their true balance sheet risk), offering to backstop those banks with the greatest derivative exposure (JP Morgan, Bank of America, Goldman Sachs, and Citigroup), shifting trillions of dollars' worth of toxic debt to the US balance sheet and then funneling trillions of new dollars into the banks most at risk of a derivative collapse (the banks I listed before).
Retirement Accounts & The Coming Tax Code Revolution
Daniel R. Amerman, CFA - SilverBearCafe.com Overview
Let's say that you live in a capital city under siege, that is surrounded by revolutionary armies. While you don't know the timing, you do believe that the overthrow of the current regime is close to a 100 percent certainty. So you take your life savings and enter into a series of binding contracts with the current regime, under advantageous terms for you. The revolutionary armies enter the capital city, the current regime is overthrown, the new regime repudiates the contracts of the previous regime - and you are left penniless.
Is your impoverishment a matter of pure bad luck - or is it just possible you could have made some better decisions along the way?
Avoiding the "Mistakes" of the Depression
BY PAUL NOLTE - FinancialSense.com
The much anticipated earnings season has begun, with blow-out quarters from the likes of IBM, Apple and Coke. The markets did rise based upon the news, however remains mired in the twists and turns of Washington and Europe as each tries to figure out their own debt issue. Like sausage making, knowing how to "make" debt go away is a very messy process and one that the markets evidently don't like, given the declines associated with announcements from both sides of the pond. Earnings are nice, but where is the beef in the economy? Many of the economic figures domestically as well as around the world remain well below where we "should be" at this point – two years into an economic recovery. Yet, two years in, bond yields remain well below "normal" – in fact stuck near zero out a ways on the yield "curve" (more like a line from near zero out to 3-4 years, then straight up to 3% at 10 years). Is this the new normal, will the economy ever get back to "normal" or is normal now being spoken of in historic terms – "remember when things were normal?" The next few paragraphs I'll discuss some of the points in this recovery and where things may be headed over the next few years.
What Does the Country Want? Will there be a deal? Will the U.S. default if there isn't one?
Who to trust in Washington? And what do the people say?
By Chris Good - TheAtlantic.com
America is slated to default on its debt on Aug. 2 unless Congress agrees to raise the debt ceiling, and Republicans and Democrats are having trouble agreeing on a deal to forestall that outcome. Everyone seems to agree that, in a perfect world, we'd cut some spending. Nobody likes the trillion-dollar deficits incurred in each of the last two years. Beyond that, there seems to be little agreement. President Obama and Congress could decide to:
raise the debt limit, no strings attached, as the White House called for in April
lower the deficit by $4 trillion over 10 years, including about $1 trillion in revenue raised by tightening the corporate tax code and raising taxes on higher incomes, as Obama called for recently
cut about $2 trillion, without raising taxes on anyone, as House Speaker John Boehner proposed two weeks ago
America: Why Aren’t You Protesting?
Written by Andrew Smolski - OilPrice.com
As noted by Richard Heinberg on June 22nd, 2011, the media has lacked the ability to connect the economic situations in the Middle East and their uprisings to what is happening in Europe. I would avoid the word "Revolution" in the case of the Middle Eastern uprisings, seeing as no dramatic systemic changes have taken place, only the ousting of dictators. Same as I would avoid the words of social upheaval in the case of European protests, which have been quite calm and only demanding to maintain the social safety nets produced through years of labor struggle. Rather, the odd occurrence is the ostensibly quiet population of the United States who are in many cases having the same economic problems and austerity based government solutions. This is a place where the media does want to ask the public the question, "Why aren't you protesting?"
Jordan Maxwell & Jeff Rense -
Democracy Equals Enslavement [RenseRadio]
U.S. Consumer Confidence Stagnates
By Shobhana Chandra - Bloomberg.com
Consumer confidence stagnated last week as Americans’ optimism over their current finances clashed with growing pessimism about the state of the economy.
The Bloomberg Consumer Comfort Index was minus 43.3 in the period to July 17, the highest since April, compared with minus 43.9 the prior week. The monthly gauge of the economic outlook improved from a two-year low.
Unemployment at 9.2 percent in June, the smallest payroll gain in nine months, and a foreclosure-ridden housing market are weighing on the outlook for growth. Gasoline prices are rising again after declining in May and June, threatening to further limit consumer purchases, the biggest part of the economy.
Obama Redefining 'Poverty'
By David Paulin - AmericanThinker.com
What does it mean to be poor in America today? For typical "poor" households -- as defined by the government -- it means cable television, two color television sets, and two or more cars.
As for housing, it means living in air-conditioned comfort -- in decent accommodations with even more space than "average" Europeans have. (Not poor Europeans, to be sure, but "average" Europeans.) Moreover, most "poor" Americans get the medical care they need, and they eat enough -- in fact, they eat too much.
In short, the lifestyles of most "poor" Americans are vastly at odds with dire government statistics about poverty in America -- statistics that invariably send liberals and media pundits into hand-wringing fits and moralistic outrage. Now comes an antidote to this absurdity -- a report released on Monday by the Heritage Foundation that is appropriately titled: "Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?"
Back-to-school sales expected to be down slightly from last year
By Andrea Chang - LATimes.com
The all-important back-to-school shopping season is threatening to slow the retail industry's recent momentum.
As retailers roll out fresh back-to-school merchandise and tout early deals, a "shadow of insecurity" tied to the nation's slow economic recovery still looms over many consumers and could hamper their spending, according to the National Retail Federation.
The retail trade group said in a report Thursday that families with children in kindergarten through high school would spend an average of $603.63 on apparel, school supplies and electronics, down slightly from $606.40 during last year's back-to-school season.
California will borrow $5 billion from banks
to bypass U.S. debt drama
By Tom Petruno - LATimes.com
California will seek $5 billion in short-term loans from banks and other financial institutions next week, hoping to avoid the risk of being locked out of the markets if Congress fails to raise the federal debt ceiling by Aug. 2.
Treasurer Bill Lockyer had planned to sell at least $5 billion in so-called revenue anticipation notes to investors in August. The state typically sells such notes at this time of year to bridge the gap between its cash needs and the arrival of tax revenue later in the fiscal year.
But Lockyer’s office said Thursday he opted to raise cash more quickly by borrowing from banks to guard against "potential financial fallout from a debt ceiling impasse."
For the Elite Rich cutting Medicare is hilariously fun
Here's How to Tell if Housing Has Bottomed Housing has been propped up by Central State intervention. As that ends, Phase II of the retrace to pre-bubble valuations is at hand. -- BY CHARLES HUGH SMITH - FinancialSense.com
Has housing bottomed? Here is the sure-fire way to tell:
Stories titled "Has housing bottomed? Here's how to tell" have vanished for lack of interest.
The absence of stories about the bottom in housing will mark the final nadir, because the real bottom can only be reached when everyone has abandoned housing as a pathway to easy money. Only when the public and investor class alike have completely lost interest in real estate as a "sure-fire" investment can the real trough be reached.
This destruction of long-held habits and beliefs takes a long time. The closest analogy might be the stock market in the last secular Bear market. Stocks topped out in 1966, though the economy lumbered on until 1969 before faltering. Stocks then meandered for 13 years of stagflation, losing 66% of their inflation adjusted value in 1966 by 1982.
Consumers in U.S. Relying on Credit as Inflation Erodes Incomes
By Anna-Louise Jackson and Anthony Feld - Bloomfield.com
Consumers in the U.S. are increasingly using credit cards to pay for basic necessities as income gains fail to keep pace with rising food and fuel prices.
The dollar volume of purchases charged grew 10.7 percent in June from a year ago, while the number of transactions rose 6.8 percent, according to First Data Corp.’s SpendTrend report issued this month. The difference probably represents the increasing cost of gasoline, said Silvio Tavares, senior vice president at First Data, the largest credit card processor.
"Consumers, particularly in the lower-income end, are being forced to use their credit cards for everyday spending like gas and food," said Tavares, who's based in Atlanta. "That's because there's been no other positive catalyst, like an increase in wages, to offset higher prices. It's a cash-flow problem."
Record highs broken in slew of cities
By the CNN Wire Staff
(CNN) -- The blistering heat wave that has brought stifling conditions to much of the United States broke 55 record highs on Wednesday, the National Weather Service said Thursday. That's more than 1% of all temperature records in the country.
Another 60 records were tied Wednesday, the weather service said.
As many as 22 deaths are blamed on the heat, the service said.
Excessive heat and humidity are "expected to expand into the Ohio Valley and East Coast states for the remainder of the week," the weather service said in its forecast Thursday.
The highest heat index values -- how hot it feels -- "are expected across parts of the Midwest, Ohio Valley and Mid-Atlantic, where they are forecast to be between 105 and 115 degrees through Friday, with locally higher values possible," the forecast said.
Secret Papers Reveal: There is No Chinese E-Bomb. Yet.
By Noah Shachtman - Wired.com
First, the good news: Beijing is not building a microwave weapon to zap you into submission. Now, the bad: the Chinese are kind of interested in using electromagnetic radiation to fry your computers. Especially if you happen to live in Taiwan.
Those are the conclusions for a pair of secret reports, recently declassified and unearthed by theNational Security Archive.
For years, a determined caucus of doomsayers in the U.S. have done their best to raise the alarm about the dangers of a king-sized electromagnetic pulse (EMP) wiping out American electronics. The result: a return, if not quite to the Stone Age, then to the Mad Men Era.
Vehicle-Mounted Active Denial System (V-MADS)
Why Apple, Soros Fund are Hoarding Almost $100 Billion in Cash
By Hao Li - IBTimes.com
Apple is hoarding $76 billion in cash. George Soros' hedge fund (run by Keith Anderson) is nearly holding $20 billion in cash, or 75 percent of the assets under management, reported Bloomberg, citing unnamed sources. Combined, they have nearly $100 billion.
Why on earth would a company need so much money? And why would a hedge fund, which makes money by deploying money, not use 75 percent of its firepower?
Bloomberg said Soros and other hedge fund managers are looking for clarity on global situations like the European debt crisis, China's monetary tightening, and the U.S. debt ceiling.
Soros himself said the current global economy is "baffling" and unpredictable.
DARPA project seeks immortality, suspended animation Shot? Blown up? Chill out until you reach hospital
By John Oates - TheRegister.co.uk
The Defense Advanced Research Projects Agency (DARPA) is offering money to researchers looking at identifying and controlling timing mechanisms in cells, including those of the human body.
The blue sky gazing loon-collective notes that no single "master switch" has been found to control genes' activities.
But it hopes that the "Biochronicity" programme will find a way to understand and predict "temporal features of biological systems".
The four-year programme will start by identifying "episequences and validation in experimental biological systems".
Spheres move over San Jacinto while military jets seem to respond
By Roger Marsh, UFO Examiner.com
A San Jacinto, CA, couple report watching and photographing a "black sphere" in the sky that appeared to stop and move again as they observed the object between 7 and 9 minutes, according to July 18, 2011, testimony from the Mutual UFO Network (MUFON) witness reporting database.
They said there were military jets in the area of the sphere immediately after it disappeared.
When they moved the video to their computer, they observed multiple white-colored spheres as well.
"When I played it back it shocked me and scared me because the white spheres were going in and out of the clouds and some even left a trail when they came out from the clouds," the reporting witness stated. "They are different sizes and there are more than 30 or 40 spheres and they move so fast. And if you go frame by frame you can see them going in and out and some stop. And you can see that they are white round spheres."
Understanding would go a long way towards ending terrorism
By Robert Hamburger - HamburgersStand.com
A terrorist is defined as someone who uses or advocates the use of violence and/or threats to intimidate, coerce, or influence, for political purposes. In current day American rhetoric, a terrorist is usually assumed to be of Arabic or Islamic descent and is one who supports or is engaged in the destruction of the United States and/or other Western nations.
Many of today’s terrorists have grown up in lands that have been occupied or controlled by the United States. These lands that we meddle in are rich with minerals (crude oil) beneath the surface. Americans benefit, and U.S. corporations profit, from our meddling. Meddling is official United States policy – even though it goes unacknowledged.
Iran Opens Oil Bourse -
Harbinger of Trouble for New York and London?
John C.K. Daly - SilverBearCafe.com
The last three years of global recession have dealt a major blow to American capitalist ideas trumpeted throughout the world on the value of "free markets." Wall St has been revealed as a form of casino economy, with the bankster insiders gambling with other people's, and eventually, the government's money in the form of bailouts. As the Republicans in Congress, scenting victory in the 2012 presidential elections, hold a gun to the Obama administration's head and rating agencies consider downgrading U.S. government bonds in light of Washington's possible defaulting, many ideas around the world that previously seemed implausible because of the dominance of the U.S. economy are garnering renewed interest.
An Intransigent President
By George Neumayr - The American Spectator.org
The politicians most responsible for America's debt crisis are portrayed by the media as "grown-ups" while those least responsible for it are dubbed "intransigent." Veteran profligate spenders have been credited in recent days with a "balanced approach" to the crisis, even as Tea Partiers in Congress with no fingerprints on the debt have been cast as recklessly indifferent to it.
The mainstream media exclusively defines "intransigence" as conservative opposition to non-negotiable liberal demands. Hence, President Obama's willingness to risk default rather than drop his insistence on tax increases isn't considered intransigent and reckless but principled and mature.
Biden's Burden: Last One Standing in Afghanistan Policy Wars
By Steve Clemons - TheAtlantic.com
Now that General David Petraeus has mothballed his uniforms, turned the ISAF command in Afghanistan over to General John Allen, and taken Leon Panetta's chair at the CIA, the next to last big name who fought for primacy in DC's Afghanistan policy wars is, for the most part, off to other pastures.
At the start of the Obama administration, the two arenas that mattered when it came to political power -- the issues defining who was "big" in Obama Land -- were either the global financial crisis or the Afghanistan War.
Should the U.S. Support Regime Change in Syria? Hillary Clinton has said Bashar al-Assad no longer has "legitimacy" -- By Micah Zenko - TheAtlantic.com
On July 11, when asked about Syrian President Bashar al-Assad's government, Secretary of State Hillary Clinton answered: "From our perspective, he has lost legitimacy, he has failed to deliver on the promises he's made," adding that "we would like to see even more countries speaking out as forcefully as we have."
Proponents of a low-cost regime change in Damascus seized upon Clinton's use of the phrase "lost legitimacy" to press the case for the Obama administration to see through Assad's removal. The Washington Post editorial board, in a piece titled "The U.S. has Gotten Tough with Syria; Now it Needs to Get Tougher," noted that it was "good that the Obama administration has finally spoken that truth" but that "now it must act on its words."
Fed planning for potential default
By Kristina Cooke and Tim Ahmann - Reuters.com
(Reuters) - The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government's $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday.
Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank has for the past few months been working closely with Treasury, ironing out what to do if the world's biggest economy runs out of cash on August 2.
"We are in contingency planning mode," Plosser told Reuters in an interview at the regional central bank's headquarters in Philadelphia. "We are all engaged. ... It's a very active process."
Plosser said his "gut feeling" was that President Barack Obama and Congress will come to an agreement to increase the Treasury's borrowing authority in time to avert a default on government obligations.
Who Would You Stop Paying First If Debt Ceiling Isn't Raised?
By Catherine New - DailyFinance.com
The debt ceiling debatecontinues to rage inside the Beltway, but are Americans tuning it out?
New results from theChicago Booth/Kellogg School Financial Trust Indexshows that 46% of people surveyed have no opinion on the issue. However, of those who are following the issue, more than two-thirds are against raising the debt ceiling and one-third favored raising it.
Half of the survey respondents were also asked about the potential financial consequences if the debt ceiling is not raised by theAug. 2 deadline. The majority responded that the U.S. Treasury debt holders should be the first group the government defaults on, followed by nonmilitary government employees.Only 10% of respondents said the government should cut back on paying the Army, and even fewer, 7%, said Social Security recipients. The survey was conducted in a telephone poll of 1,003 people between June 15 to June 23.
German-French Harmony on Greece Compromise on Bondholders' Role
Clears Path for a New Bailout Deal
By MARCUS WALKER - WSJ.com - $$
BERLIN—German Chancellor Angela Merkel, under mounting pressure in and outside Germany to show stronger leadership in the euro-zone debt crisis, reached a late-night compromise with France over a fresh bailout for Greece ahead of a crucial European summit planned for Thursday.
The chancellor's six-hour meeting with French President Nicolas Sarkozy, which European Central Bank President Jean-Claude Trichet also joined, managed to find a mutually acceptable formula for how to involve Greece's bondholders in the expected new rescue package, according to a senior official present at the talks.
The official didn't give details of the joint proposal, which will be presented to Thursday's meeting in Brussels of all 17 euro-zone national leaders.
Germany and France reach Greek accord
By Peter Spiegel in Brussels, Quentin Peel in Berlin
and Patrick Jenkins in Paris - FT.com $$
Germany and France appeared to settle their differences late on Wednesday over a new rescue package for Greece.
No immediate details were available but Steffen Seibert, a spokesman for Angela Merkel, the German chancellor, said "a common German-French position" had been agreed and discussed with Jean-Claude Trichet, president of the European Central Bank, and Herman van Rompuy, president of the European Union.
The breakthrough came after Nicolas Sarkozy, French president, rushed to Berlin to hammer out a Greek rescue plan that could include €71bn (£63bn) in bail-out funds from global lenders and a €50bn tax on eurozone banks, proceeds from which would be used to buy back 20 per cent of Greece's €350bn in outstanding debt.
Euro reaches eleventh hour as Angela Merkel
and Nicolas Sarkozy hold crisis talks Angela Merkel and Nicolas Sarkozy held crisis talks in Berlin amid warnings that a failure to break the debt crisis deadlock within 24 hours would send shockwaves around the global economy.
By Louise Armitstead, and Bruno Waterfield - Telegraph.co.uk
Late on Wednesday night it was announced that both parties were close to a deal to bail out Greece.
The German chancellor and the French president were barraged with pleas from political and financial leaders to reach an agreement – or risk the collapse of the single currency.
The leaders have been told that Thursday's crucial summit in Brussels (see interactive graphic above) was the "last chance saloon" for the euro project.
Mr Sarkozy decided to travel to Berlin after the pair repeatedly failed to agree on how to get private bondholders to share the costs of a new €115bn (£101bn) bail-out for Greece.
Treasuries Fall for Second Day After Merkel,
Sarkozy Meeting on Greek Debt
By Wes Goodman - Bloomberg.com
Treasuries fell for a second day as talks between German ChancellorAngela Merkel and French President Nicolas Sarkozy raised optimism the European Union will help Greece avoid a default.
The longest maturities led the decline after a spokesman for the German chancellor said Merkel and Sarkozy had reached a "joint position on Greece’s debt" before a summit of European leaders today. The U.S. is scheduled today to sell $13 billion of 10-year Inflation Protected Securities.
"The improving situation in Europe will hurt the Treasury market," said Sungjin Park, who helps oversee the equivalent of $58.8 billion as head of the fixed-income division in Seoul at Samsung Asset Management Co., South Korea's largest private bond investor. "It will encourage growth in the global economy."
Three questions the Greek debt summit must answer
By Pierre Briançon - Reuters.com
LONDON — The best signal that the euro zone may be nearing a Greek debt deal is that its leaders have decided to hold a summit. With investors questioning Europe’s determination to tackle its debt problems, ending the high-profile meeting on an inconclusive note would be unconscionable. But how should success be gauged? That depends on the answer to three key questions.
First, does Greece get some relief? The goal is to come up with a package that lightens the country’s debt burden and provides it with funding for the next three to four years. A bond buyback programme could allow Athens to take advantage of its distressed debt status by buying back some bonds. This could be done by the European Financial Stability Facility, or by the European Central Bank, supported by a euro zone government guarantee. At the same time, the interest rate on the existing bailout should be lowered, and the maturity of the loans extended.
Franco-German axis loses its wheels French President Nicolas Sarkozy has swooped into Berlin to secure a "clear, clean and precise response" from Chancellor Angela Merkel to the dramatic crisis engulfing the eurozone. He is unlikely to get one. - By Ambrose Evans-Pritchard - Telegraph.co.uk
French and German leaders typically meet on the eve of crucial EU summits to reach a pact that can be imposed as a fait accompli on their peers. In doing so, they reinforce the Franco-German axis that has been the driving force of Europe’s Project, and leverage their combined power. But this time the chemistry is particularly sulphurous.
The Chancellor has not disguised her irritation at being bounced into a summit that she never wanted, and which looks to many Germans like an attempt to ensnare the country in an EU fiscal union and limitless bail-outs.
Britain's deleveraging nightmare threatens its triple A rating
By Jeremy Warner - Telegraph.co.uk
As the eurozone lurches from one crisis to the next, UK gilts have become seen as something of a safe haven asset. The yield on ten year gilts is not quite at Germany or US levels, but it’s not far off. Everything is relative; compared to some parts of the eurozone, our economic woes seem trivial. Or do they?
Paradoxically, confidence in Britain’s triple A sovereign debt rating has hardened even as the country’s growth prospects have deteriorated. This is scarcely logical. The Chancellor, George Osborne, likes to think of this phenomenon as a vote of confidence in his deficit reduction programme, and up to a point he’s right. By taking tough and decisive action, he’s headed off the sort of sovereign debt crises that have engulfed the eurozone periphery.
IMF Urges Boosting of Yuan
By BOB DAVIS - WSJ.com
WASHINGTON—Inflation, real-estate bubbles and weak monetary controls pose "significant risks to financial and macroeconomic stability" in China, and Beijing should boost the value of its currency to combat those threats, the International Monetary Fund said.
The IMF used its annual review of China's economy to lay out a broad agenda of change for China—including a stronger currency, higher interest rates, reduced advantages for big state-owned enterprises and a liberalized financial sector. Such changes were necessary, the IMF argued to improve Chinese living standards and reduce conflict with its trading partners.
'The Eye of the Storm' -
Gerald Celente on The Social Collapse of the West
The impact of U.S. credit rating downgrade
James Pethokoukis - Reuters.com
It does not appear to be as frightening as I might have assumed. Here is a bit (via Business Insider) from a Goldman Sachs conference call this morning where the impact of a AAA downgrade is discussed
11:23 It has to do with the magnitude of the downgrade. If we went to AA, directionally it would be negative but it’s suprising the modest effect it could have on, IE:
– Money market mutual funds are front of mind when thinking about a downgrade. Reqired to hold 97% of their assets in AAA
In terms of the rating that matters – it’s the short-term rating, not the long-term rating. And the S&P has implied that it would only downgrade the long-term, so money market funds wouldn’t be affected. They hold between 300 and 350 billion in treasuries. Probably not as much of a risk.
More Thought Turning to Short-term Solution Until Bigger Debt Plan
By Billy House - NationalJournal.com
President Obama and House Republicans are taking a harder look at a possible short-term debt ceiling increase to bide time until a bigger deal gets worked out.
Obama and congressional leaders continued scrambling on Wednesday for an endgame to resolve the country’s impending debt crisis. And as they did, the White House floated for the first time that Obama might be willing to go along with a short-term compromise and a House Republican leadership aide said the idea is emerging as a real possibility.
(RELATED: What Key Players Are Saying about Gang of Six Plan)
"There is no way to reach the August 2 deadline," said the aide, adding that a short-term solution extending until September may be the compromise until a larger deal is worked out.
Obama Open to Short-Term Debt Increase
By Kate Andersen Brower and Julie Hirschfeld Davis - Bloomberg.com
The Obama administration signaled it may accept a short-term increase in the U.S. debt limit only if lawmakers need a few days to finish work on a broader agreement to cut the deficit.
President Barack Obama "must have a firm commitment to something big" on cutting the deficit before he would sign a short-term rise in the debt ceiling, White House spokesman Jay Carney told reporters at a briefing. He released a written statement later saying Obama "does not support a short-term extension" unless "a few days" are needed “for a bill to work its way through the legislative process."
The president called congressional leaders to the White House today as the Aug. 2 deadline for raising the $14.3 trillion debt limit nears.
Debt fight may already be hurting U.S. economy
Goldman Sachs links decline in consumer confidence to impasse
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The fight in the nation’s capitol over the U.S. debt might already be hurting the economy, a Wall Street firm says.
Goldman Sachs said the budget standoff in Washington likely is a "contributing factor" behind a plunge in consumer confidence over the past month. In a report, economist Andrew Tilton said the drop in confidence coincided with wider coverage of the budget battle.
Last week, a survey by the University of Michigan and Thomson Reuters showed that U.S. consumers' confidence sank to a reading of 63.8 in July from 71.5 the month before — a decline much sharper than expected that put the index at the lowest in more than two years.
Fed hits Wells Fargo with $85 million fine
By Ben Rooney @CNNMoney
NEW YORK (CNNMoney) -- The Federal Reserve announced a record $85 million fine Wednesday against Wells Fargo for allegedly pushing borrowers with good credit into expensive mortgages and falsifying loan applications.
The Fed accused the nation's fourth largest bank by assets of steering potential borrowers who could have qualified for prime rates into more expensive subprime loans.
The authorities also claimed that employees of Wells Fargo Financial, a non-bank subsidiary closed last year, doctored income information on mortgage applications to push through borrowers that would not have qualified for based on income.
Banks in Arizona need cash
by Russ Wiles - The Arizona Republic
Continuing financial problems could lead to more failures of Arizona-based banks and hasten further industry consolidation, according to a new analysis.
"Community banks are still facing enormous pressure," said Kamal Mustafa, chairman of Invictus Consulting Group, a New York-based bank-research firm that conducted the study.
The specter of rising interest rates, whether from a federal debt default in early August or from other reasons down the road, could trigger new problems for small banks.
The Two Sides of Precious Metals Propaganda
By Jeff Nielson - Implode-o-Meter
As we witness another "sudden", "unexpected", and temporary reversal in the prices of gold and silver, no doubt most precious metals bulls are surprised by this lurch lower in prices. In this respect, I will claim to be less surprised than most of my peers – as I had been noting the "clues" as to how and when the next "sell-off" (i.e. ambush) of gold and silver would occur.
Sophisticated gold and silver bulls are attuned to the bearish/negative propaganda released by the anti-gold banking cabal (through their "emissaries" in the mainstream media). While we are not influenced by it, we take note of it in order to determinehow gold and silver are being manipulated lower, and when gold and silver will turn higher (or rather what condition will trigger that move).
'Gold set to go $2000, silver may breach $50'
MUMBAI(Commodity Online): If the current bull run in Goldand Silver would continue, gold can reach $2000, and silver can cross $50, James Turk, an analyst, was quoted by King World News (KWN) as saying.
His logic is that if gold and silver prices rule above $1600 and $40, it is highly likely that investors short on gold may opt for a stop-loss measure and do some short-covering. They too may opt for long positions. This is deemed to drive the precious metals up. If that be the case, a monster rally is in the offing!
Gartman reduces gold exposure as too many join the rally
NEW YORK (Commodity Online): Dennis Gartman , economist and editor of Gartman Letter said he has reduced his Gold positions by about a half as he thinks "too many people have joined the trade."
Gartman, a graduate in economics came into huge media attention after he correctly forecasted the 2008 commodities slump.
He said that he will buy more gold when the price of the metal falls between $1500 and $1525.
Gold has had an impressive 11 day unbroken run due to Eurozone concerns and US debt ceiling issues and has appreciated by more than 12% this year, heading for an 11th consecutive annual gain, the longest streak since 1920 London.
Gold above $1600;
correction seen if US reaches debt-ceiling deal
By Allen Sykora - CommodityOnline.com
(Kitco News) - Gold has enough factors working in its favor at the moment that analysts say it would likely suffer no more than a temporary correction if one of the props—the U.S. debt-ceiling impasse—was resolved.
The yellow metal moved above $1,600 an ounce for the first time ever Monday, even though summer is normally a seasonally slow period for gold, and extended its nominal record high Tuesday. Gold for August delivery traded as high as $1,610.70 an ounce on the Comex division of the New York Mercantile Exchange, a record for a most-active contract.
"It seems as though the stars have lined up for the gold market," said Mike Zarembski, senior commodities analyst with optionsXpress.
Gold and silver due for a short term pullback
By JW Jones - CommodityOnline.com
Currently risk assets are in a constant crossfire stemming from multiple forms of headline risk. The price action as of late has been choppy as the news flow is directly impacting the tape. I have been reluctant to accept any significant risk recently and I would point out that cash has certainly outperformed the S&P 500 over the past 6 – 7 trading sessions.
The news flow and economic event risk is reminiscent of 2008 when traders were sitting on edge waiting for the next piece of information detailing which investment bank would fail next. Economic reports were dismal, earnings disappointed, and structural unemployment reports spewed from the media. The fear was palpable and the current backdrop within the financial market construct feels eerily the same way.
Gold in a Deflationary Period
Published by Ian R. Campbell - StockResearchPortalBlog.com
I suggest you read and think about what is said in a recent article: 'How gold performs in deflation' – reading time 4 minutes – thinking time longer. On its face, the article suggests that physical gold benefits in periods of both hyper-inflation and hyper-deflation, and when reaching that conclusion implies (at least as I read the article) that the price of physical gold is likely to rise under either scenario.
From the extensive reading, thinking, and writing I have done on the subject of physical gold over the past four years, my overview conclusion is that the author of the article is right if what he is saying is that history suggests holders of physical gold are benefited in periods of both hyper-inflation and hyper-deflation, but wrong if he thinks it is certain that the price of physical gold will increase in both scenarios. From my perspective, the correct way to explain the advantage to holders of physical gold in both scenarios is to link physical gold and ‘purchasing power’, not physical gold and 'the price of physical gold'. To me, physical gold is nothing more or less than 'real money' which over time retains its purchasing power – that is, if an ounce of gold would buy a suit in 1870, it ought to buy a suit of that same quality in 2011. Timing differences may result in an imperfect equation, but over time that equation should, on average, come 'into balance'. Stated differently, where there is inflation I would expect the price of physical gold to trend higher – and much higher if there was hyper-inflation. Conversely, where there is deflation I would expect the price of physical gold to trend downward, and trend more significantly downward if there was hyper-deflation.
Peter Schiff: We're in Depression, Dollar Crisis Coming
Books, Borders and Beyond: How Digital Tech Is Changing Retail The demise of Borders made us wonder:
If book and music stores were the first logical casualty
of the digital revolution in retail, what's next?
By Derek Thompson - TheAtlantic.com
In 1971, on the 200 block of South State Street in Ann Arbor, Michigan, two brothers, Tom and Louis Borders, opened a small bookstore. They called it Borders Book Shop. Within ten years, they had built an inventory software system that was the envy of the industry. Within 25 years, Borders Group Inc., had gone public on the New York Stock Exchange. Within 30 years, they had opened dozens of stores across the world, from London to Singapore.
And now, 40 years after Borders Book Shop opened, Borders Inc. is closing, undone by a perfect storm of book digitization, the growth of Amazon, and an inability to turn a brick-and-mortar company into a zeros-and-ones business. The book chain announced this week it is liquidating 400 stores and laying off 11,000 employees.
R.I. releases Central Falls pension information
ProJo.com
PROVIDENCE —
These are not the members of the $100,000-pension club.
They are the retired police officers and firefighters in a tiny Rhode Island city on the brink of bankruptcy, with pensions ranging from a low of $452 a year to the $52,055 paid the widow of the city’s longtime Fire Chief Rene Coutu, who died in December at age 60, after serving in the department for 39 years, 25 of those as chief.
And they have been asked by a state-appointed receiver to voluntarily agree to forgo up to 50 percent of their pensions to save the City of Central Falls from financial ruin.
Under the plan laid out Tuesday by the receiver, former Supreme Court Justice Robert G. Flanders Jr.: "No pension currently being received shall be reduced by more than 50 percent … nor shall the benefit be reduced if your current pension is less than $10,000 a year."
Central Falls retirees asked to accept pension cuts
By W. Zachary Malinowski - ProJo.com
CENTRAL FALLS -- The state-appointed receiver seeking to rescue Central Falls from financial ruin told about 100 retired firefighters and police officers on Tuesday that their pensions must be slashed in half to save the city $2.5 million annually or face the possibility of bankruptcy, an alternative that could leave them with a lot less.
Receiver Robert G. Flanders Jr., a retired Supreme Court justice, calmly told the group of retirees in the steamy auditorium at Central Falls High School that difficult times call for drastic actions to tackle an estimated $25 million in deficits for the city over the next five years.
FTC mails $108 million in refund checks to Countrywide borrowers
by JON PRIOR - HousingWire.com
The Federal Trade Commission will mail 450,177 refund checks totaling $108 million to homeowners allegedly overcharged on their mortgage by Countrywide Financial Corp.
"It's astonishing that a single company could be responsible for overcharging more than 450,000 homeowners," said FTC Chairman Jon Leibowitz. "Countrywide’s unconscionable behavior harmed American consumers on a massive scale, and we are proud to be getting every single dollar back to hundreds of thousands of struggling consumers who can least afford to lose the money."
The FTC struck a settlement with Countrywide in June 2010 after alleging the subprime mortgage giant collected excessive fees from delinquent homeowners. The refunds will go to borrowers whose loans were serviced by Countrywide between Jan. 1, 2005, through July 1, 2008, and were subject to the allegedly illegal practices.
New Effort to Prevent a Million Foreclosures Takes Shape
By Daniel Indiviglio - TheAtlantic.com
Last week, we learned that the Obama administration is considering other alternatives to stop foreclosures. Today, we have some color on what one of these efforts might look like. It would encourage servicers to reduce struggling borrowers' mortgage balance. Although banks have fought such efforts in the past, it seems that the program could benefit everyone involved. And the best part: it wouldn't take any taxpayer dollars.
How is this possible you ask? Rich Miller at Bloomberg explains:
Of the residential mortgage-backed securities outstanding, about $1.3 trillion are so-called private label notes that were issued by banks and other financial institutions, according to data from the Securities Industry and Financial Markets Association. "That's where a lot of the trouble is sitting," Lockhart said.
U.S. Moves Toward Home 'Rentership Society,'
Morgan Stanley Says
By John Gittelsohn - Bloomberg.com
The U.S. homeownership rate has fallen below 60 percent when delinquent borrowers are excluded, a sign of the country's move toward a "rentership society," Morgan Stanley said in a report today.
The national rate, which stood at 66.4 percent at March 31, would be 59.7 percent without an estimated 7.5 million delinquent homeowners who may be forced into renting, according to Morgan Stanley analysts led by Oliver Chang. The lowest U.S. homeownership rate on record was 62.9 percent in 1965, the first year the Census Bureau began reporting the data.
The homeownership rate reached an all-time high of 69.2 percent in 2004 as relaxed lending standards fueled home sales and President George W. Bush promoted an "ownership society." Mortgage delinquencies, foreclosures and tighter credit for housing loans are reducing property buying, Chang said.
Existing-Home Sales in U.S. Unexpectedly Fall 0.8%
to a 4.77 Million Rate
By Bob Willis - Bloomberg.com
Sales of previously owned U.S. homes unexpectedly declined in June to a seven-month low as the industry struggled to overcome rising unemployment and foreclosures.
Purchases dropped 0.8 percent to a 4.77 million pace, data from the National Association of Realtors showed today in Washington. The median projection in a Bloomberg News survey called for a gain to 4.9 million. Inventories increased, more contracts were canceled and 30 percent of transactions last month were of distressed dwellings, the figures showed.
So Many Ideas, So Few Jobs:
Why Experts Can't Solve Unemployment Most suggestions have little hope
of helping America's unemployed any time soon
Chris Danello - The Atlantic.com
Over the past week, this space has hosted a substantial number of thinkers proposing solutions to America's job crisis. And, let's face it, the Atlantic isn't alone. From Businessweek to Newsweek, it's easy to find ideas to improve the moribund economy. If they don't repeat themselves word-for-word, at least they rhyme. Raise immigration, reduce regulation, reform taxation, reinvigorate education.
But like a blood-brain barrier for job solutions, the ideas floating around Washington think tanks can't seem to travel into the central economy. They're either too radical to be practical, too expensive to be possible, too far-sighted to make a difference today, or too small to make much of a difference, period.
Teach Job Creation at Our Business Schools
By Richard Florida - TheAtlantic.com
What's the single best idea to jumpstart job creation?
Behind every job is a growing company. And behind every successful company is a startup that made it big. New businesses, according to a recent study by the Kauffman Foundation and others, account for three out of five new jobs. To support job growth, we have to support startups.
Sometime ago, I was having lunch with a Danish colleague Uffe Elbaek who, among other things, is the founder of KaosPilots. Elbaek told me participants in the KaosPilots program are taught that it's not enough for their graduates to learn how to get a job. Their mission is to create jobs, both for themselves and for other people.
Layoffs Deepen Gloom
By CONOR DOUGHERTY - WSJ.com
Companies are laying off employees at a level not seen in nearly a year, hobbling the job market and intensifying fears about the pace of the economic recovery.
Cisco Systems Inc., Lockheed Martin Corp. and troubled bookstore chain Borders Group Inc. are among those that have recently announced hefty cuts, while recent government numbers underscore how companies have shifted toward cutting jobs.
The increase in layoffs is a key reason why the U.S. recorded an average of only 21,500 new jobs over the past two months, far below the level needed to bring down unemployment, which now stands at 9.2%.
2012: The End of the World As We Know It
By Peter Ferrara - The American Spectator.org
Like a replicating amoeba, America is pulling apart into two separate cultures. One is strongly committed to the birth of an even more robust, pro-growth, entrepreneurial capitalism. The other thinks Che Guevara and Karl Marx had important social insights relevant to America today, and wants to follow the path of Juan Peron's Argentina, if not Hugo Chavez's Venezuela. This is the stark choice facing the American people in 2012.
This is also why the vast majority of the American heartland feels more cultural affinity with the people of New Zealand and Australia than with the people of San Francisco and Seattle, at least as reflected by the majority of those two benighted cities. But the replicating amoeba analogy is not apt, because amoebas split into two equal new entities. What the American people are about to demonstrate in 2012 is that the heartland's vision of a booming economy restoring America's traditional world-leading prosperity and superpower might is shared by far more citizens than you might think, and that the long outdated socialist vision of the "progressive" American Left, for whom that traditional American prosperity and superpower status is a moral embarrassment, is fading into oblivion.
Computers Are Weapons of War
By Jed Babbin - The American Spectator.org
In the spring of 2007, Russian computer experts hacked into Estonia's government computer networks, blocked them from functioning, and brought the Estonian government to a standstill.
On August 8, 2008, Russian tanks invaded the disputed South Ossetia region between Russia and Georgia, a former Soviet satellite state. One day before the tanks rolled in, Russian cyber attacks defaced Georgian government websites and then made what are called "distributed denial of service" attacks, which effectively blocked the use of the computers by overwhelming the computer servers with a volume of traffic too great for them to handle and causing them to cease functioning. Russian cyberwarriors also managed to hack into Georgian servers to plant malicious software. "Malware," as computer security experts call it, modifies a computer’s software to either prevent it from functioning or to revise its functions to benefit the attacker.
The Ultimate Knock-Off: A Fake Apple Store
WSJ.com - China Real time
A blogger in Kunming posted photos on Wednesday of a local store which, from a distance, looked just like one of the consumer electronics giants' iconic full-service retail stores. It featred a glass exterior, pale wood display tables, a winding staircase and giant posters displaying the iPad 2 and other Apple products, plus a neatly organized accessories wall.
"This was a total Apple store ripoff—a brilliant one," the blogger, BirdAbroad, wrote. She called it "the best ripoff store we had ever seen." Photos show employees in blue shirts and Apple-emblazoned name tags similar to those worn by Apple Store employees in Beijing and Shanghai.
Police to begin iPhone iris scans amid privacy concerns
By Zach Howard - Reuters.com
(Reuters) - Dozens of police departments nationwide are gearing up to use a tech company's already controversial iris- and facial-scanning device that slides over an iPhone and helps identify a person or track criminal suspects.
The so-called "biometric" technology, which seems to take a page from TV shows like "MI-5" or "CSI," could improve speed and accuracy in some routine police work in the field. However, its use has set off alarms with some who are concerned about possible civil liberties and privacy issues.
Sorry Elizabeth, Wall Street Said No
By Robert Scheer - Truthdig.com
So much for the meritocracy. Despite an elite education, effusive charm and brilliant wit, Barack Obama, like Bill Clinton before him, has ended up betraying his humble origins by abjectly serving the most rapacious variant of Wall Street greed. They both talk a good progressive game, but when push comes to shove—meaning when the banking lobby weighs in—big money talks and the best and the brightest fold.
The defining moment of Clinton’s capitulation was his destruction of Brooksley Born, the one member of his administration with the courage and prescience to warn him about the unregulated derivatives trading that ultimately led to the housing collapse. For Obama, it is his decision not to nominate Elizabeth Warren to run the new Consumer Financial Protection Bureau, which she fought so hard to create.
Arizona starts raising funds for Mexico border fence
By Tim Gaynor - Reuters.com
(Reuters) - Anyone with cash in their pockets and a concern about security on the porous Arizona-Mexico border can make a donation to help the state build its own fence as of Wednesday.
An Arizona law that went into effect July 20 allows the desert state to build the barrier, provided it can raise enough private donations and persuade public and private landowners to let them build it on their land.
Steve Smith, the Republican state senator who sponsored the law, hopes to raise $50 million. Donations are being taken through a website -- www.buildtheborderfence.com --- which went live at midnight.
FREE BIRTH CONTROL POSSIBLE WITH HEALTH CARE OVERHAUL
Truthdig.com
Health insurance companies may soon be required to provide women with free birth control, among other services, as part of the health care law passed last year.
The law requires that health insurance plans provide a given set of preventive health services to patients without co-payments or deductibles, and Tuesday an independent panel of health specialists released its recommendation of what those services should include for women.
Ron Paul "Republicans NEVER Say ANYTHING About Cutting These Military Occupations Around The World"
Study: China Getting Fatter, But Not Like U.S.
WSJ.com - China Real Time
Obesity rates in China have surged over the years, leading some to think China is starting to look a lot more like the U.S these days.
A deeper look says otherwise.
According to a recent study published in the American Journal of Health Behavior, the difference between obese people in China and those in the U.S. is striking, suggesting that assumptions about obesity patterns in the West can’t be applied to China's increasingly overweight population.
Researchers of the study, "Correlates of Overweight Status in Chinese Youth: an East-West Paradox," zoned in on China's adolescent population, looking at the relationship between such factors as sleep, diet, exercise and income on obesity among young people.
What they found: Chinese children raised in families with higher incomes and advanced education levels are more likely to become obese.
House approves balanced-budget bill
By Lori Montgomery and Rosalind S. Helderman - WashingtonPost.com
The Republican-controlled House defied a presidential veto threat Tuesday night in approving a bill to amend the Constitution to require a balanced federal budget. But Speaker John A. Boehner acknowledged that a backup plan is needed, and a Senate GOP leader said he expects such an alternative to win his chamber’s approval.
The House voted 234 to 190 in favor of the "Cut, Cap and Balance Act," which the White House has said will be vetoed in the unlikely event it passes the Senate and reaches President Obama’s desk. Faced with those prospects, Boehner told reporters that it would also be responsible to consider a backup plan for raising the federal debt ceiling and thus averting a potentially disastrous default on U.S. obligations.
Floor Speech on Debt Ceiling July 19 2011
Slouching Toward Default, on Both Sides of the Atlantic
By Megan McArdle - TheAtlantic.com
You'll have to pardon me. I did mean to live blog thisgeneration'sWatergatehearingsthesecondDreyfusstrial Rupert Murdoch's fumbling appearance before British politicians, but I got distracted by less pressing events, such as the seeming stalemate over the US debt ceiling, and the ever widening gap between the bond spreads of Europe's center, and Europe's periphery. I do eventually hope to get back to the real story of the day, but I hope you'll permit me this small digression.
William D. Cohan, whose House of Cards is required reading about the crisis, sums up the disquiet in global markets:
Here are the facts: The yield on Greek sovereign debt is now at record highs for the euro era. Last week's state-managed bond auction in Italy almost failed. And, while few seem to have noticed, the overnight repurchase market -- for short-term, secured, corporate debt obligations -- nearly seized up amid what Combs described as "an almost panicky scramble" for less- risky paper.
Default 'Off the Table,' Debt Deal Will Be Struck: Geithner
By: CNBC.com
Treasury Secretary Tim Geithner told CNBC Monday that he is certain that congressional leaders will strike a deal to raise the federal debt ceiling prior to the Aug. 2 deadline to avoid default.
"Each side has said definitively that default is not an option," he said, "They’re not going to play around with this."
"If the United States of America were to default it would be catastrophic for the American economy, for the American financial system, for the average American people, it would be a substantial unfair tax on all Americans and it would bring the world economy … to the edge of recession again," he said. "There’s no alternative for Congress raising the debt limit and that’s why you’re seeing Republicans as well recognize that reality and take default off the table."
Obama backs 'Gang of Six' debt plan
By Sean Lengell and Kara Rowland-The Washington Times
President Obama seized on a new debt-reduction plan by a bipartisan group of senators that calls for a mix of entitlement reforms and tax revenues, as the clock winds down to an early August deadline to raise the nation's debt ceiling.
The president's endorsement Tuesday of the "Gang of Six" plan came hours before the Republican-led House was poised to pass a mostly symbolic debt-reduction measure that included a balanced-budget constitutional amendment.
Mr. Obama, addressing reporters in the White House briefing room, reiterated his threat to veto the House Republican proposal to "cut, cap and balance" the nation's budget and raise the $14.29 trillion debt ceiling by $2.4 trillion.
HOW TO RAISE THE DEBT CEILING BY $1.6 TRILLION
WITHOUT CONGRESS
BY STEVEN HAYWARD - PowerLineBlog.com
A couple of weeks ago I took notice here of the trial balloon coming out of the White House about how the debt ceiling might be unconstitutional, based on a strained reading of a clause in the 14th Amendment, and therefore simply ignored by President Obama and the Treasury Department. Lots of lefty law profs rushed in to give the idea credence, several Democrat senators declared the idea "intriguing," and The New Republic magazine was all over the idea for the better part of a week. Word around town last week was that the White House had dropped the idea.
But this might not be the end of their possible bag of tricks. At lunch today my AEI colleague Alex Pollock, who once served as president of the Federal Home Loan Bank of Chicago, laid out a possible means by which the Treasury could circumvent the statutory debt ceiling. He dilated the idea to me in an e-mail just now as follows:
Keiser Report: Debts & Ratings Theater (E165)
IMF says euro under 'a shadow,'
signals that currency union may be in jeopardy
By Howard Schneider - WashingtonPost.com
ROME — The International Monetary Fund said Tuesday that the euro, a currency born a decade ago out of the post-World War II urge to knit Western European nations more closely together, was under "a shadow" and hinted it might not survive the current battle over government debt.
With European leaders struggling to agree how to divide the costs of another Greek rescue program, the IMF said there was "no consistent road map ahead, leaving both orderly and disorderly outcomes on the table. . . . The reaction by national authorities and economic agents has been one of retrenchment, threatening to turn back the clock on economic and financial integration, the very foundation" of the Economic and Monetary Union (EMU).
Greek Crisis Poses Serious Contagion Risk
Even Without Default, IMF Says
By Gabi Thesing and Sandrine Rastello - Bloomberg.com
Greece’s sovereign-debt crisis risks contaminating the rest of the euro region even if officials avert a default, the International Monetary Fundsaid.
Both the European Commission and the European Central Bank "considered that a sovereign default or a credit event would likely trigger contagion to the core euro-area economies with severe economic consequences," according to an IMF staff report on the region’s economy released yesterday. "Staff however also saw serious risks of contagion, even under a strategy which tries to avoid default or credit events."
Greece Threatened with Widespread, Long-Term Poverty
By Manfred Ertel in Athens - Spiegel.de
Greece is tightening its belt -- and the number of people living in poverty is surging as a result. Thousands line up in front of food banks and resort to rifling through rubbish bins. The country's financial crisis is rapidly turning into a social one -- while wealthy tax evaders manage to get off scot-free.
This time, the fight for survival last exactly 29 minutes. At precisely 3 p.m., Father Andreas, a 37-year-old Greek Orthodox priest, opens the doors of the food bank in downtown Athens. At this hour, the line of hungry people stretches all the way across the large square outside and into the street. Needy people of all ages are waiting patiently -- pensioners, unemployed people, mothers with children, immigrants, asylum seekers. "We can't let these people starve," the priest says. "They are already suffering so much. They should at least not go without food."
CrossTalk ft. Jim Rogers: Euro Jitters
The Talmud and Greek Debt
Mario I. Blejer - ProjectSyndicate.com
BUENOS AIRES – There are two ways to look at Greece’s majestically unsustainable sovereign-debt mountain. There is, first, a pragmatic and short-term perspective, which focuses on ensuring some form of orderly restructuring (possibly for other vulnerable European states as well) without bringing down the eurozone. And there is a "moral" perspective, which focuses on the nature of debt and on the long-term economic consequences of failing to honor it.
Neither perspective is wrong; on the contrary, the problem is how to reconcile them. Indeed, failure to do so appears to explain why the official response to the Greek debt crisis has been so inadequate.
Europe Update: Next Key Meeting on Thursday
by CalculatedRisk
The next emergency EU summit is scheduled for this coming Thursday.
Wolfgang Münchau is very concerned, from the Financial Times: Plan D stands for default and death of euro
The biggest single danger in the eurozone crisis now is that events are moving too fast ... It was a huge mistake to postpone an emergency EU summit until Thursday this week.
excerpt with permission
This is a key meeting. If there is no agreement on how to proceed, the markets could really panic.
Gold to Extend Record Rally If U.S. Increases Debt Limit: Chart of the Day
By Sungwoo Park and Saeromi Shin - Bloomberg.com
Gold may rally further from this month’s record if President Barack Obama wins lawmakers’ agreement to raise the U.S.’s debt ceiling, weakening the dollar and boosting demand for the precious metal as a store of value, according to Korea Investment & Securities Co.
The CHART OF THE DAY shows the spot gold price in dollars has climbed along with increases in the U.S.'s statutory debt limit over the past 16 years. Immediate-delivery gold reached a record $1,610.10 an ounce yesterday, as concerns that debt crises in Europe and the U.S. will roil global financial markets boosted demand for the precious metal as a haven.
Central Banks Unanimously Prefer Gold Over Paper
Implode-o-Meter Blog
After the Western banking cabal engineered the "crash" of the global gold market in 1980, Western central banks spent more than a quarter-century perpetrating the lie that gold was a "barbarous relic" – which was supposedly "inferior" to the worthless, un-backed paper they were cranking out (in record amounts) on their privately-owned printing presses.
Their incentive was obvious. In getting the entire world to believe that lie, they were able to enrich themselves by $10's of trillions of dollars. This was done by creating those $10's of trillions ("out of thin air"), pretending that this paper actually represented real wealth – and then getting people all over the world to give them $trillions more paying interest on worthless paper which never represented any real wealth in the first place.
Gold rally to continue after a pause
SINGAPORE (Commodity Online): Gold prices eased, from record overnight gains, Tuesday but likely to scale new heights during the day, analysts said.
US gold for August delivery was seen trading at $1602.32 an ounce at 12.30 p.m Singapore time while Silver for September delivery was at $40.25 an ounce.
Analysts said the yellow metal is likely to climb back to higher territory and likely to create new highs during the day.
They said investors are likely to remain on the edge until the US debt ceiling issue is resolved.
Where Will Silver Prices go from Here?
Written by Stuart Burns - OilPrice.com
The rise and fall of the silver price this year had much more to do with speculative exuberance than any fundamental change in supply or demand. With a foot in both the industrial and investment markets, silver has always lived a dual life. Either pulled up or depressed by a rising or falling gold price and likewise supported by improving global macro economic trends suggesting industrial demand improvement. Sometimes this pushes silver counter cyclically to gold. Occasionally both factors coincide to encourage a high level of speculative interest in the metal.
Rense & Celente - Stop The Debt Sellers
Bonds, Inflation Expectations, and QE3
BY STEVE SAVILLE - GreenFaucet.com
The difference in yield between the standard 10-year Treasury Note and the 10-year TIPS (Treasury Inflation Protected Security) is what we call the Expected CPI. The Expected CPI is not a realistic measure of the market's inflation expectations, but the direction in which it trends should be the same as the direction in which the market's inflation expectations are headed. The Expected CPI can therefore be useful, provided that we focus on its trend rather than its value. With this in mind, let's now take a look at weekly charts of the Expected CPI and T-Note futures. Both charts are compliments of Fullermoney.com.
If US Loses Triple-A Rating, Almost Anything's Possible
By: Reuters
For those who think a deeply indebted United States has begun its long, slow fade as the world's dominant financial power, the loss of the country's gold-plated AAA credit rating would seem poetic justice.
That's because characteristics blamed for volatile markets in countries like Italy — high debt levels, slow economic growth, and government gridlock — fairly describe the United States now.
The debt ceiling has been the chief source of market angst lately, but that's a short-term problem.
A Trillion of revenue is on the plate Any of this money yours?
Submitted by Bruce Krasting - ZeroHedge.com
We’re coming down to the wire on the debt limit. "Hard" deals are now being put on the table. The Republicans have said all along they don't want any new taxes. But only a fool could think this can be done without a significant amount of revenue increase. So if we’re to get a deal what has to give? Easy. Rather than increase taxes the government can phase out deductions.
This data looks at individual deductions. This come to a whopping $950 billion. You tell me, are you on this list? Have a mortgage? Pay state or property taxes? School debt? Health care costs? Charity? Kids? Veterans? At one point or another every American is on this hit list.
Dow soars 200 points on 'Gang of Six' debt plan
By Annalyn Censky - CNN.com
NEW YORK (CNNMoney) -- The Dow industrials staged their strongest one-day rally of the year Tuesday after President Obama's indication that lawmakers are closer to reaching an agreement on raising the debt ceiling gave stocks a shot in the arm.
The Dow Jones industrial average (INDU) gained 202 points, or 1.6%. Of its 30 components, 27 were in the black.
Obama Embraces Senators' Deficit-Cutting Plan
By Julie Hirschfeld Davis and Julianna Goldman - Bloomberg.com
President Barack Obama embraced a $3.7 trillion debt-cutting plan by a bipartisan group of senators that would combine tax increases and spending cuts, saying it could offer a way out of the congressional deadlock over raising the U.S. borrowing limit.
"We now are seeing the potential for a bipartisan consensus," Obama said today at the White House. He called the proposal by the so-called Gang of Six "broadly consistent" with what he has sought and "a very significant step" in so far fruitless negotiations between Republicans and Democrats over boosting the nation's $14.3 trillion borrowing authority before a threatened default on Aug 2.
Jackson Lee Plays Race Card:
Congress is Challenging Obama On Debt Ceiling
Because He Is Black
Iran Opens Oil Bourse -
Harbinger of Trouble for New York and London?
Written by John Daly - OilPrice.com
The last three years of global recession have dealt a major blow to American capitalist ideas trumpeted throughout the world on the value of "free markets." Wall St has been revealed as a form of casino economy, with the bankster insiders gambling with other people's, and eventually, the government's money in the form of bailouts. As the Republicans in Congress, scenting victory in the 2012 presidential elections, hold a gun to the Obama administration's head and rating agencies consider downgrading U.S. government bonds in light of Washington's possible defaulting, many ideas around the world that previously seemed implausible because of the dominance of the U.S. economy are garnering renewed interest.
IMF: Debt threatens to engulf Europe
Ben Rooney @CNNMoney
NEW YORK (CNNMoney) -- The debt crisis engulfing Europe poses a significant risk to the global economy and the European Union must take decisive action to stop the spread of contagion, the International Monetary Fund said Tuesday.
In a review of euro zone financial policies, the IMF said the economic recovery is "solid" in most EU nations.
But the fund warned thatunresolved fiscal problems in Greece, Ireland and Portugal could "spill over" into other nations and threaten the global economy.
18 Signs That Global Financial Markets Smell Blood In The Water
TheEconomicCollapseBlog.com
Can you smell it? There is blood in the water. Global financial markets are in turmoil. Banking stocks are getting slaughtered right now. European bond yields are absolutely soaring. Major corporations are announcing huge layoffs. The entire global financial system appears to be racing toward another major crisis. So could we potentially see a repeat of 2008? Sadly, when the next big financial crisis happens it might be worse than 2008. Back in the middle of 2008, the U.S. national debt was less than 10 trillion dollars. Today it is over 14 trillion dollars. Back in 2008, none of the countries in the EU were on the verge of financial collapse. Today, several of them are. This time if the global financial system starts falling apart the big governments around the world are not going to be able to do nearly as much to support it. That is why what is happening right now is so alarming. As signs of weakness spread, the short sellers and the speculators are starting to circle. They can smell the money.
Only Germany can save EMU as contagion turns systemic Europe's leaders have finally run out of time. If they fail to agree on some form of debt pooling and shared fiscal destiny at Thursday's emergency summit, they risk a full-fledged run on South Europe's bond markets and a disorderly collapse of monetary union.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"We are heading towards fiscal union or break-up," said David Bloom, currency chief at HSBC. "Talk is no longer enough as the fire threatens to leap over the firebreak into Spain and Italy.
"What the market is worried about is Germany's long-term committment to the euro project. If we see unreserved and absolute backing from the political establishment of Germany, that will be a soothing balm."
Chancellor Angela Merkel seemed in little hurry on Tuesday to convey such a message. There will be no "spectacular step" at the Justus Lipsius building on Thursday; just a "controlled process of gradual steps and measures", she said with unflappable calm. Given the simmering wrath from top to bottom of German society, it may be impossible for her to do much more.
Soros Goes To 75% Cash As Fed No Longer Telegraphing Trades
Submitted by Tyler Durden - ZeroHedge.com
Earlier today we saw what happens to investment banks when the Fed no longer clearly telegraphs its intentions vis-a-vis which asset has to be frontran (see Goldman post earlier). It is not just banks. In the absence of the Fed semaphore, it turns out even such "legendary" hedge funds as Soros' $25 billion Quantum are about as clueless as everyone else. Bloomberg reports that "the fund is about 75 percent in cash as it waits for better opportunities, said the people, who asked not to be identified because the firm is private." The reason: "“I find the current situation much more baffling and much less predictable than I did at the time of the height of the financial crisis,” Soros, 80, said in April at a conference at Bretton Woods organized by his Institute for New Economic Thinking. “The markets are inherently unstable. There is no immediate collapse, nor no immediate solution."
Marc Faber - financial Sense Newshour 15 july 2011
Mastering the Machine How Ray Dalio built the world’s richest and strangest hedge fund.
by John Cassidy - The New Yorker
Ray Dalio, the sixty-one-year-old founder of Bridgewater Associates, the world's biggest hedge fund, is tall and somewhat gaunt, with an expressive, lined face, gray-blue eyes, and longish gray hair that he parts on the left side. When I met him earlier this year at his office, on the outskirts of Westport, Connecticut, he was wearing an open-necked blue shirt, gray corduroy pants, and black leather boots. He looked a bit like an aging member of a British progressive-rock group. After a few pleasantries, he grabbed a thick briefing book and shepherded me into a large conference room, where his firm was holding what he described as its weekly "What’s going on in the world?" meeting.
Of the fifty or so people present, most were clean-cut men in their twenties or thirties. Dalio sat down near the front of the room. A colleague began describing how the European Central Bank had just bought some Greek bonds from investors at a discount to their face value—a move that the speaker described as a possible precursor to an over-all restructuring of Greece's vast debts. Dalio interrupted him. He said, "Here's where you are being imprecise," and then explained at length what a proper debt restructuring would entail, dismissing the E.C.B.'s move as an exercise in "kicking it down the road."
Moody's eyes possible credit downgrade on 5 states
By Alex Veiga, Associated Press - USA Today.com
Moody's Investors Service warned Tuesday that it probably will lower the credit rating on five states if it downgrades the U.S. government's credit rating.
The credit rating agency said it has placed on review for possible downgrade the triple-A bond ratings of Maryland, New Mexico, South Carolina, Tennessee and Virginia.
A triple-A rating is the highest for debt and tells investors an institutional borrower presents a minimal credit risk.
Sam on the Dylan Ratigan Show Deficit Panel (7/18/11)
EMPTY WALLETS
by George Packer - The New Yorker
In the midst of the debt crisis in Washington, D.C., Danny Hartzell backed a Budget rental truck up to a no-frills apartment building that is on a strip of motels and pawnshops in Tampa, Florida. He had been laid off by a packaging plant during the financial crisis of 2008, had run through his unemployment benefits, and had then taken a part-time job stocking shelves at Target in the middle of the night, for $8.50 an hour. His daughter had developed bone cancer, and he was desperate to make money, but his hours soon dwindled to four or five a week. In April, Hartzell was terminated. His last biweekly paycheck was for a hundred and forty dollars, after taxes. "It's kind of like I've fallen into that non-climbable-out-of rut," he said. "If you can't climb out, why not move?"
Elizabeth Warren Makes It Personal Relieved from the day to day responsibilities of running the Consumer Financial Protection Bureau, she seems to be embracing a newfound freedom
By Nancy Scola - TheAtlantic.com
Elizabeth Warren is ready to name and shame. After 10 long months spent crafting a brand-new federal agency in her image and likeness, years before that willing the institution into statutory existence, only to be passed over on Sunday in favor of Richard Cordray just as the new Consumer Financial Protection Bureau is moving out of beta, Warren, on a press call late yesterday afternoon, was eager to share her clarity on who's to blame for the especially precarious position the new federal-friend-to-the-American-consumer now finds itself in.
Obama erred in dropping Elizabeth Warren to head agency He sacrificed his top pick to run the Consumer Financial Protection Bureau after Republican lawmakers said they wouldn't support her nomination. But his second choice may face a battle as well. -- By David Lazarus - LATimes.com
President Obama shouldn't have backed down.
In announcing Monday that he's nominating former Ohio Atty. Gen. Richard Cordray to run the new Consumer Financial Protection Bureau, Obama clearly hoped to leapfrog over opposition to his original pick: Harvard professor Elizabeth Warren.
Warren had drawn fire from the financial-services industry and its friends in the Republican Party for her passionate and unyielding commitment to consumer protection. They rightly perceived her as someone who would no longer accept banks' business as usual as business as usual.
On Track for Record Low Housing Completions in 2011
by CalculatedRisk
As I mentioned earlier, the U.S. is on pace for a record low number of multifamily completions in 2011. That is just part of the story ... the U.S. is on pace for a record low number of total completions, and the fewest net housing units added to the housing stock, since the Census started tracking completions.
Here are some excerpts from Tom Lawler today:
The Commerce Department reported that US manufactured housing shipments ran at a seasonally adjusted annual rate of 48,000 in May, up slightly from April’s 46,000, but still an incredibly low pace by historical standards.
Some federal workers more likely to die than lose jobs
By Dennis Cauchon, USA TODAY
Federal employees' job security is so great that workers in many agencies are more likely to die of natural causes than get laid off or fired, a USA TODAY analysis finds.
Death — rather than poor performance, misconduct or layoffs — is the primary threat to job security at theEnvironmental Protection Agency, the Small Business Administration, the Department of Housing and Urban Development, the Office of Management and Budget and a dozen other federal operations.
Dylan Ratigan MSNBC exposes Federal Reserve Con Part 1
Dylan Ratigan MSNBC exposes Federal Reserve Con Part 2
Minnesota shutdown nearer to an end
By Tami Luhby @CNNMoney
NEW YORK (CNNMoney) -- It's almost over.
Minnesota lawmakers will take up the state budget Tuesday afternoon, the latest step in ending the nation's longest government shutdown in recent years.
Lawmakers will vote on 12 bills that were drawn up in accordance with the budget deal that Governor Mark Dayton and Republican legislative leaders reached last Thursday.
The special session to approve the budget is scheduled to end Thursday morning, but the vote should take place before then. If the bills are approved, they will be sent to the governor for his signature, at which point the shutdown should conclude.
Israel's Boycott Bill and the U.S.-Israel Alliance Is Israel's step away from free speec
also a step away from its most important ally?
By Michael J. Koplow - TheAtlantic.com
The vote last week by the Israeli Knesset to pass the "boycott bill," which subjects anyone calling for a boycott of Israel or the settlements to lawsuits and severe penalties, was intended, according to its sponsor, Likud member Zeev Elkin, to make it easier to fight back against those seeking to delegitimize Israel and to ensure Israel's accepted place in the global community. Prime Minister Benjamin Netanyahu insisted on Wednesday that the ban on calls for a boycott is not a violation of democratic principles and does not tarnish Israel's reputation. He called the condemnations of Israel over the law unfair "attacks on a democracy's attempt to draw a line between what is acceptable and what is not." Netanyahu and the law's supporters may indeed believe that banning Israeli citizens from calling for boycotts will strengthen Israel's standing in the world by eliminating what they see as a potential fifth column of enemies within, but the unfortunate reality is that this law will have the exact opposite effect of that which Elkin intended. By enacting a law with such anti-democratic overtones, and that explicitly embraces the settlements as equivalent with Israel proper, Israel is putting its global status in peril by endangering its crucial support from the United States.
PALESTINIAN TERRITORIES:
Financial crisis causing public concern
By Maher Abukhater - LATimes.com
The Palestinian Authority has until July 26 to come up with a plan on how it intends to pay salaries, without interruption, to more than 150,000 of its civil and military personnel. Otherwise, the employees may go on an open-ended general strike.
This was the warning the Union of Public Employees conveyed to the Palestinian Authority on Monday following a meeting of its board members to discuss the authority's financial crisis and its claim that it may not be able to pay salaries anymore.
And the members of public employees union, who have lately been receiving late or half salaries and who took bank loans during a preceding period of relative financial stability, are also up in arms, worried about whether next month's salary will be paid and if they will be able to make the loan payments.
Israeli navy takes over Gaza-bound French ship
By AMY TEIBEL, Associated Press
JERUSALEM (AP) — Israeli naval commandos on Tuesday seized control of a French ship attempting to break Israel's sea blockade of the Gaza Strip and towed it into port, reporting no resistance during the takeover in international waters.
The takeover was the latest in a series of run-ins on the high seas between the Israeli navy and pro-Palestinian activists trying to breach the blockade. In the most contentious incident, nine Turkish activists were killed in a clash with Israeli commandos last year.
Former Chilean President Allende's death confirmed as suicide
By the CNN Wire Staff
(CNN) -- Chile's Legal Medical Service confirmed Tuesday that the cause of President Salvador Allende's death in 1973 was suicide. A judge had ordered exhumation of the body as part of a human rights investigation.
Official accounts had described the leftist leader's death as a suicide, saying that he shot himself -- with a gun that was reportedly a gift from Fidel Castro -- as Gen. Augusto Pinochet's troops closed in on the presidential palace during a coup.
But some of Allende's supporters had long doubted that account.
"The analysis confirmed the cause of death established earlier, the manner of death (suicide) and the circumstances in which events happened in the context of the bombing of the La Moneda (presidential) Palace," the medical service, known as SML, said in a statement.
As The Dollar And The Euro Continue To Collapse,
How High Is That Going To Push The Price Of Gold?
EndOfTheAmericanDream.com
Right now, the global financial system is facing a crisis that is really unprecedented. The reserve currency of the world (the U.S. dollar) is collapsing and the second most powerful currency on the planet (the euro) is also collapsing. As the major paper currencies of the globe crumble, the hunger that investors around the world have for gold continues to grow. Today, the price of gold hit an all-time record of $1607.90 an ounce. But that record surely will not live for long. The truth is that gold has been steadily climbing for quite some time now. A year ago, the price of gold was hovering around $1200 an ounce and and many "mainstream economists" scoffed at the idea that the price of gold could go significantly higher. Well, nobody is laughing now. As colossal debt loads continue to crush both Europe and the United States, the euro and the dollar are going to continue to collapse. There are going to be more bailouts and central banks are going to be doing more money printing. So how high is all of this going to push the price of gold?
Deflation and the Gold Price Trajectory
By Bill Bonner - The DailyReckoning.com
07/18/11 Paris, France – What happened last week?
The Great Correction gave notice: it’s not going away.
On Friday, the Dow rose 42 points. The gold price advanced towards $1,600. Oil seems to be headed for $100.
With gold over $1,600, is it time to sell? Nah…not even close. It will have to go to $2,500 just to reach the high – adjusted for inflation – set 30 years ago.
But a lot of water has gone under the bridge in the last 3 decades. And almost every drop of it gurgles to us: Gold will go higher.
There’s much more debt than there was 30 years ago…and much more ‘funny money.’ What’s more, Paul Volcker is no longer at the Fed. This time, America’s central bank is run by Ben Bernanke…who has made it very clear what his response to crisis will be – print more money!
Gold creates another history, breaks $1600 mark
LONDON (Commodity Online) : Gold prices Monday created history by breaking the coveted $1600 an ounce barrier in early European trade as debt crisis escalated in the continent.
The precious yellow metal climbed up to $1,600.4 per troy ounce before falling back to $1,599 while Spot Silver had earlier risen to $39.95, its highest level since 4 May.
Euro zone ministers will meanwhile meet on Thursday to discuss the financial stability of the euro area.
Euro zone debt crisis, which has already sunk Greece, Ireland and Portugal, showed signs of spreading to Italy and Spain.
Gold and Silver Ready for Big-Time Run
as Global Breakdown Begins
By: Jordan Roy Byrne - MarketOracle.co.uk
An important shift in global markets is taking place and it bears introspection. Gold has broken to a new high while Silver has established a bottom. Precious metals stocks have rebounded significantly from support. At the same time, important global stock markets are in the early stage of a technical breakdown. We don’t foresee a repeat of 2007-2008, yet odds are good that global stock markets are beginning a cyclical bear market and unlike the last cycle this is coming at a time when precious metals are set to accelerate to the upside.
Gold's Historic Rally Fuelled
by Negative Interest Rates and Euro Disintegration
By: Gary Dorsch - MarketOracle.co.uk
The Federal Reserve has just ended its $600-billion Treasury bond-buying program, known as QE-2, and already, traders are trying to figure what new tricks the Fed might have up its sleeve, in order counter a significant correction in the US-stock market in the second half of 2011. Including QE-1 and QE-2, the Fed pumped $2.35-trillion into the coffers of the Wall Street Oligarchs. Together with near-zero interest rates, and the printing of trillions of dollars the Fed fueled a speculative stampede into the commodity and stock markets, enabling traders to record bumper profits, while doing little to reduce the jobless rate.
Earnings Season Kicks Off, Gold Reaches New All-Time High
BY THOMAS J SMITH CFA - FinancialSense.com
Second quarter earnings season kicks off in earnest this week. Reported earnings will be important, but not as impactful as forward guidance. Leaders from all sectors will be reporting this week so we’ll get a good feel for what management teams are seeing globally.
The market was weak again last week but did not break down through range support. There is still a potential head and shoulders formation building in the S&P 500. We’ll need to see 1344 taken out on the index in order to avoid that pattern from developing.
Speculators take big long positions in gold: CFTC
By Debbie Carlson - CommodityOnline.com
(Kitco News) - Speculators snapped up significant bullish U.S.Gold futures and options, according to U.S. government data released late Friday.
In both the disaggregated and legacy weekly commitment of traders reports issued by the Commodity Futures Trading Commission, the managed-money and larger trader speculative non-commercial accounts greatly increased their net-long positions in the yellow metal. The data is for the trade date ended July 12 and encompasses both the futures and options activity combined at the Comex division of the New York Mercantile Exchange.
Comex Gold hits new record high above $1,600;
Silver pushes above $40
By Jim Wyckoff - CommodityOnline.com
(Kitco News) - Comex Gold and Silver futures prices are trading higher Monday morning on more safe-haven investment demand amid the debt crises playing out in Europe and the U.S. The debt problems on both sides of the ocean have rattled most of the world's currency markets, and gold is now standing out as the "currency" of the world, in many investors' eyes. August gold last traded down up $12.30 at $1,602.40 an ounce. Spot gold last traded up $7.20 an ounce at $1,601.75. December Comex silver last traded up $1.274 at $40.365 an ounce.
There is still keen trader and investor nervousness on the European Union sovereign debt front and on the U.S. debt-ceiling debate. Despite efforts on both sides of the Atlantic to resolve or control those situations, the market place on Monday morning is still viewing the matters with anxiety. European banks' stress test results on Friday were about as expected but have failed to assuage traders and investors. The U.S. congress and the president are still at loggerheads over raising the U.S. debt ceiling that will be hit in early August. Such has invited still more buying demand for the precious metals markets.
Gold buying by central banks rise sharply this year
LONDON (Commodity Online): A day, the yellow metal created another milestone by breaking the $1600 barrier, WGC said Gold buying by central banks across the world in the first six months of this year already overtake the entire figure of last year.
In its latest report, World Gold Council said emerging market banks continue to be the main driving force, led this quarter byMexico's 100-tonne increase in its gold reserves. Meanwhile, European central banks have significantly cut gold sales in the wake of the region's sovereign debt crisis.
Data released by WGC and research group GFMS shows global central banks' net gold sales reached 235 tons in 2008, but fell to just 34 tons in 2009.
Silver is the new gold
MUMBAI (Commodity Online): Consider the fact that Silveroutperformed Gold almost 2.5:1 at India's Multi Commodity Exchange (MCX) till this year and you will understand why silver is the new gold.
Silver grew by more than 26% since January this year compared to just over 11% for Gold. Silver prices rose from 46250 from January to 58473 as of July 16, an increase of 26%. During the same period, Gold rose from 20740 to 23071, an increase of just about 11%.
Here are five reasons why you should invest in silver:
Dollar landslide imminent; commodities can go up
By Chris Vermeulen - CommodityOnline.com
The dollar is and has been in a strong down trend for many years and I feel as though it’s getting close to another major land slide. It could take place any time in the next month or so according to my weekly chart analysis.
The general rule is if the dollar falls in value then we tend to see both stocks and commodities rise. The inverse relationship at times can be tick for tick meaning if the dollar ticks down one increment then we see the broad market or specific commodities move in the opposite direction at the same time.
Doing The Global Currency Shuffle
By Brandon Smith, Alt-Markets.com
In mainstream financial circles, the concept of a global currency is often spoken of only with an atmosphere of caution. It is approached always in hypothetical terms. It is whispered of as some far off dream; a socio-economic moon landing in the far reaches of fiscal space. Perhaps in 2015, or 2020, or maybe 2050, but certainly never just over the horizon, or right around the corner posing as an innocuous trade asset created over 40 years ago and used only on rare occasions. Unfortunately, the development of a centralized global security representing the creation of a supranational economic body is much closer than many would care to admit…
Debt Worries Roil Markets Investors Fear Contagion of Greek Crisis,
Washington Stalemate Over Deficit
By TOM LAURICELLA, MATTHEW PHILLIPS
and E.S. BROWNING - WSJ.com
Worries about government debt rocked capital markets on both sides of the Atlantic Monday, as fears that the Greek crisis will spread combined with concerns at the standoff over the U.S. debt ceiling.
The selloff started in Europe, hitting bonds and stocks in countries regarded as vulnerable to contagion from Greece, and spread to the U.S. where the Dow Jones Industrial Average ended at its lowest level since late June after a wild session.
Debt Ceiling Drama
Ron Paul - Infowars.com
The debt ceiling debate is providing plenty of opportunity for political theater in Washington. Proponents of raising the debt ceiling are throwing around the usual scare tactics and misinformation in order to intimidate opponents into accepting more debt and taxes. It is important to distinguish the truth from the propaganda.
First of all, politicians need to understand that without real change default is inevitable. In fact, default happens every day through monetary policy tricks. Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away. The dollar has lost nearly 50% of its value against gold since 2008. The Fed claims inflation is 2% or less over the past few years; however economists who compile alternate data show a 9% inflation rate if calculated more traditionally. Alarmingly, the administration is talking about changing the methodology of the CPI calculation yet again to hide the damage of the government's policies. Changing the CPI will also enable the government to avoid giving seniors a COLA (cost of living adjustment) on their social security checks, and raise taxes via the hidden means of "bracket creep." This is a default. Just because it is a default on the people and not the banks and foreign holders of our debt does not mean it doesn't count.
Too Big To Fail?:
10 Banks Own 77 Percent Of All U.S. Banking Assets
TheEconomicCollapseBlog.com
Back during the financial crisis of 2008, the American people were told that the largest banks in the United States were "too big to fail" and that was why it was necessary for the federal government to step in and bail them out. The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill. Congress was told that if the "too big to fail" banks did not receive bailouts that there would be chaos in the streets and this country would plunge into another Great Depression. Since that time, however, essentially no efforts have been made to decentralize the U.S. banking system. Instead, the "too big to fail" banks just keep getting larger and larger and larger. Back in 2002, the top 10 banks controlled 55 percent of all U.S. banking assets. Today, the top 10 banks control 77 percent of all U.S. banking assets. Unfortunately, these giant banks are also colossal mountains of risk, debt and leverage. They are incredibly unstable and they could start coming apart again at any time. None of the major problems that caused the crash of 2008 have been fixed. In fact, the U.S. banking system is more centralized and more vulnerable today than it ever has been before.
The Head Of The World's Biggest Hedge Fund
Sees "Economic Collapse" Due To Money Printing By Early 2013
Submitted by Tyler Durden - ZeroHedge.com
As part of its most recent issue the New Yorker has released a must read interview with Ray Dalio - head of the world's biggest hedge fund, Bridgewater. Dalio's fund, which according to some may now be as large as $80 billion, continues to outperform even in this problematic environment, indicating that unlike various other managers who shall remain nameless, and whose wealth is built up almost exclusively on one trade (and that belonging to someone else in the first place), Dalio, despite rumors that he is preparing to leave his current position and is actively seeking a replacement, is still keenly able to adapt to changing macro conditions. Which is why his warning about future rounds of QE, which he sees as a certainty, should be heeded. Especially since it conforms 100% with the warnings of Zero Hedge - Dalio believes that future inevitable money printing will "lead to a collapse in currencies and bond markets." Dalio is even kind enough to give a time frame. "I think late 2012 or early 2013 is going to be another very difficult period." He is, to say the least, quite diplomatic.
Defaulting to Big Government
Simon Johnson - ProjectSyndicate.com
WASHINGTON, DC – Leading United States congressmen are determined to provoke a showdown with the Obama administration over the federal government’s debt ceiling. Ordinarily, you might expect House Republicans to blink at this stage of the negotiations, but there is a hardline minority that actually appears to think that defaulting on government debt would not be a bad thing.
These representatives – with whom I've interacted at three congressional hearings recently – are convinced that the US federal government is too big relative to the economy, and that drastic measures are needed to bring it under control. Depending on your assessment of "Tea Party" strength on Capitol Hill, at least a partial debt default does not seem as implausible as it did in the past – and recent warnings from ratings agencies reflect this heightened risk.
What the Debt Limit Battle Is All About
By Michael Barone - PatriotPost.com
It's hard to keep up with all the arguments and proposals in the debt limit struggle. But what's at stake is fundamental.
The bedrock issue is whether we should have a larger and more expensive federal government. Over many years, federal spending has averaged about 20 percent of gross domestic product.
The Obama Democrats have raised that to 24 or 25 percent. And the president's budget projects that that percentage will stay the same or increase far into the future.
In the process, the national debt as a percentage of gross domestic product has increased from a manageable 40 percent in 2008 to 62 percent this year and an estimated 72 percent in 2012. And it's headed to the 90 percent level that economists Kenneth Rogoff and Carmen Reinhart have identified as the danger point, when governments face fiscal collapse.
Don't Fumble the Debt Ceiling
By Jed Babbin - The American Spectator.org
Republicans haven't gone wobbly on the debt ceiling debate, but in the House they are laying a trap for themselves that will leave them holding the bag for any downgrade or default on America's sovereign debt.
President Obama, as he indicated Friday, still demands that significant tax hikes be a part of any debt ceiling deal. But as Senate Minority Leader Mitch McConnell said on Thursday, "Republicans will not be reduced to being the tax collectors for the Obama economy ... We won't be seduced into calling a bad deal a good one." So far, so good.
The problem with 'Cut, Cap and Balance'
By Jeanne Sahadi @CNNMoney
NEW YORK (CNNMoney) -- It sounds so ... sensible. Force Congress to cut spending, cap it going forward, and balance the damn budget. Seriously, in an age of fiscal crazy, what's not to love?
A lot, actually.
The Cut, Cap and Balance Act that the House will likely pass on Tuesday could end up exacerbating rather than curing budget problems.
For starters, since the bill isn't expected to go anywhere in the Senate, lawmakers are wasting precious time needed to pass a debt ceiling increase before Aug. 2. Without an increase, the largest economy in the world would put itself at risk of default and further economic decline.
U.S. Approaching Greek Style Debt Trap
BY RUSS WINTER - FinancialSense.com
At least one mainstream media outlet, the Washington Post (which is turning into a legitimate news source) conducted an interview with the top ratings mucky muck at Standard and Poors who laid out their actual view on the fiscal deal. The bottom line here is that the gravy train of no accountability, no consequences spending is over.
S&P managing director John Chambers said in an interview … even if the parties agree to raise the debt ceiling, it may not be enough to avert a downgrade. Chambers said the country must implement a plan to reduce the annual budget deficit by roughly $4 trillion over 10 years, which makes the debt manageable over the long term. The White House and Congress have discussed a plan that big,but negotiations have more recently centered on a smaller deal, at $2 trillion or less. "That could still lead to a downgrade," Chambers said.
Portugal's Prime Minister Pedro Passos Coelho
discovers 'colossal' budget hole Portugal's new leader Pedro Passos Coelho has told the nation to brace for further austerity measures after his government discovered a "colossal" €2bn (£1.7bn) hole in the public accounts left by the outgoing Socialists.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Yields on two-year Portuguese debt rose to a fresh record of 20.3pc on Monday, reflecting fears by investors that the country would struggle to pull itself out of downward spiral without some form of debt restructuring.
Mr Passos Coelho also appeared to caution the European authorities that his government will not tolerate heavy-handed interference in the country.
"We want to take part in an ambitious European project and make our contribution so Europe can confront its problems in the most ambitious way, but as prime minister I will not stand by and let Europe govern Portugal," he told a party gathering.
Portugal Loses Patience With Europe
By Ambrose Evans-Pritchard - Telegraph.co.uk
At last, some raw emotional Gaulliste patriotism from the victims of Europe's Maquina Infernal?
Portugal's new premier Pedro Passos Coelho — a free marketeer — began to growl over the weekend. "We want to take part in an ambitious European project and make our contribution so Europe can confront its problems in the most ambitious way, but as prime minister I will not stand by and wait for Europe to govern Portugal," he told the party faithful.
The Eurozone’s Last Stand
Nouriel Roubini - ProjectSyndicate.com
NEW YORK – The eurozone crisis is reaching its climax. Greece is insolvent. Portugal and Ireland have recently seen their bonds downgraded to junk status. Spain could still lose market access as political uncertainty adds to its fiscal and financial woes. Financial pressure on Italy is now mounting.
By 2012, Greek public debt will be above 160% of GDP and rising. Alternatives to a debt restructuring are fast disappearing. A full-blown official bailout of Greece’s public sector (by the International Monetary Fund, the European Central Bank, and the European Financial Stability Facility) would be the mother of all moral-hazard plays: extremely expensive and politically near-impossible, owing to resistance from core eurozone voters – starting with the Germans.
A Critical Difference Between U.S. and Europe
BY DAVID KOTOK - FinancialSense.com
In Friday's FT, James Mackintosh illustrated a critical difference between Europe and the United States. He noted that the Italian debt auction had an interest rate of 4.93% on 5-year government debt. That was a full percentage point higher than last month. He contrasted the Italian auction with the US auction of $5 billion of 2-week debt at an interest rate of zero. As Mackintosh said, with great politeness, "The fundamentals of the two countries do not justify either the optimism over the US, or the pessimism about Italy."
Iranian currency revamp Iran's central bank is running a poll in which the country's citizens can vote on a possible new name for Iranian currency
7Days - AE.Zawya.com
Iran's central bank is asking citizens their opinions on new names for the country's currency. Visitors to the bank's website can choose from several names, including rial - the current name - toman, parsi and derik.
In the online survey, the bank also asks respondents how many zeros should be removed from the currency.
Four Charts: Shanghai, S&P 500, U.S. Dollar and the Dow
BY CHARLES HUGH SMITH - FinancialSense.com
Four charts cast a skeptical light on the Status Quo "stories" of endlessly rising equities and the doomed dollar.
Here are the Status Quo's most important investment "stories:"
China will continue booming for decades
U.S. equities will continue soaring as profits continue rising
The U.S. dollar will continue heading down because Bernanke wills it to do so
I would love to believe these magical tales, but the charts cast a skeptical pall on the happy stories. Beauty and uptrends alike are in the eye of the beholder, so maybe you see uptrends in equities here; I don't.
Interest on U.S. Debt – Big Problem!
Published by Ian R. Campbell - StockResearchPortalBlog.com
This commentary is titled 'Interest on U.S. Debt – Big Problem! It might have better been titled 'Simply explained: Why the U.S. Federal Reserve must keep interest rates lo'.
An article titled 'The Debt: 2011 Is Different Than 1995 In One Huge Way' – reading time 1 minute – sets out a chart which shows U.S. interest payments on U.S. Federal Debt as a % of U.S. GDP from 1995 to the end of 2010. There is virtually no text with this article, and no conclusion, so one is left to conclude (or so I think) that the thrust of this article is to suggest that the current level of U.S. National Debt is not a problem.
The Critical Flaw in Keynes's System
Mises Daily: by Robert P. Murphy
As part of my Mises Academy class Keynes, Krugman, and the Crisis, I have reread large portions of The General Theory. In his masterpiece, Keynes erects an impressive framework on one crucial assumption: left to its own devices, the free market can get stuck in an equilibrium with very high unemployment.
Although Keynes's whole edifice and critique of the "classical economists" rests on this belief, he devotes surprisingly little time to supporting it. In the present article I'll point out the weakness in his view. If it turns out that the free market does naturally move toward full employment in the labor market, then the entire Keynesian "general theory" falls apart.
Goldman says recession risk rising
By Colin Barr - CNN.com
A recession is "clearly a possibility," the bank that until recently was America's biggest booster said in cutting its economic growth forecasts yet again.
Goldman Sachs, which just seven months ago was the loudest voice for a stronger than expected U.S. recovery, now expects U.S. output to creep ahead at a snaillike 1.5% clip in the second quarter and a less than vigorous 2% in the third.
Friday's call stands as quite a comedown for economist Jan Hatzius, who in May forecast a 2% expansion in the second quarter and a 3.25% gain in the third quarter – numbers that themselves represented a retreat from the firm's bullish start-of-the-year forecast.
Steve Wynn Annihilates Barack Obama:
"This Administration Is The Greatest Wet Blanket
To Business And Job Creation In My Lifetime"
Submitted by Tyler Durden - ZeroHedge.com
During the just completed Wynn earnings calls we witnessed what is without doubt the most blistering and scathing critique of Obama's administration to date by anybody in the public domain.
From the call transcript:
I believe in Las Vegas, I think its best days are ahead of it, but I'm afraid to do anything in the current political environment in the United States. You watch television and see what's going on on this this debt ceiling issue. And what I consider to be a total lack of leadership from the President, and nothing will get fixed until the President himself steps up and wrangles both parties in Congress. But everybody is so political, so focused on holding their job for the next year, that the discussion in Washington is nauseating.
The US Tax Burden Falls Disproportionately
On Individuals and Small Business
JESSE'S CAFÉ AMÉRICAIN
Although the nominal US corporate tax rate of 35% seems high, and especially so given all the corporate funded propaganda promoting more tax cuts and givebacks, in fact the realized corporate rates are relatively low both in terms of historical experience and other countries. This is because of the many loopholes, subsidies, and accounting gimmicks available to its more influential corporate citizens from the corporate friendly government.
One could make the case that the tax burden is falling disproportionately on smaller businesses and individuals that do not have the infrastructure and latitude to take advantage of the loopholes available to the bigger business lobby companies.
It's About Jobs
By Ken Blackwell - The American Spectator.org
America has a growth deficit. As the latest job report shows unemployment reached 9.2% -- the highest rate of 2011 -- investors and employers continue to react negatively to this bad news.
During the three years of the Obama administration, in this dismal economy millions of Americans have been forced to take jobs that they are overqualified for or they have simply given up looking for work entirely. If you include those workers, the real unemployment rate is higher than 16.2% by conservative estimates.
These numbers are far worse depending on geography, with the most glaring examples of misguided economic policies being in poor urban communities.
What Happened to the $2.6 Trillion Social Security Trust Fund?
By Merrill Matthews - Forbes.com
Here’s how President Barack Obama answeredCBS’s Scott Pelley’s question about whether he could guarantee that Social Security checks would go out on August 3, the day after the government is supposed to reach its debt limit: "I cannot guarantee that those checks [he included veterans and the disabled, in addition to Social Security] go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it."
And Treasury Secretary Timothy Geithner echoed the president on CBS’s Face the Nation Sunday implying that if a budget deal isn’t reached by August 2, seniors might not get their Social Security checks.
Well, either Obama and Geithner are lying to us now, or they and all defenders of the Social Security status quo have been lying to us for decades. It must be one or the other.
POVERTY, AMERICAN STYLE
BY JOHN HINDERAKER - PowerLineBlog.com
The Census Bureau tells us that more than 30 million Americans are living in poverty. This is routinely denounced by liberals, and sometimes even by conservatives, as a great moral scandal. However, hardly anyone knows what living conditions are characterized, these days, as poor. Robert Rector and Rachel Sheffield of the Heritage Foundation point out that in 21st century America, most "poverty" is what would until very recently have been considered "wealth."
This is partly because the Census Bureau grossly undercounts the financial resources available to poor families:
[T]he Census report massively undercounts the economic resources provided to poor people. The Census asserts that a household is poor if its "money income" falls below a specified threshold. In 2009, the poverty income threshold for a family of four was $21,756. However, in counting the money income of households, the Census ignores virtually the entire welfare state. For example, there are over 70 means-tested welfare programs that provide cash, food, housing, medical care, and social services to poor and low-income persons. Major means-tested welfare programs include Temporary Assistance for Needy Families; Supplemental Security Income; the Earned Income Tax Credit; food stamps; the Women, Infants, and Children food program; public housing; and Medicaid. (Social Security and Medicare are not means-tested welfare programs.)
More Bidders at Foreclosure Auctions
by CalculatedRisk
Note: There are various reports that the servicers are still filing documents with robo-signing. Geesh!
From Eric Wolff at the North County Times:Foreclosure auctions getting pricey
Competition at foreclosure auctions has become fierce in 2011 as more bidders battle over fewer properties, according to analysts and pricing data.
The number of bidders ballooned this spring, as small-time investors entered the market and institutional investors started buying more ...
Borders Forced to Liquidate, Close All Stores
By MIKE SPECTOR And JEFFREY A. TRACHTENBERG - WSJ.com
Borders Group Inc. said it would liquidate after the second-largest U.S. bookstore chain failed to receive any offers to save it.
Borders, which employs about 10,700 people, scrapped a bankruptcy-court auction scheduled for Tuesday amid the dearth of bids. It said it would ask a judge Thursday to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group.
The company said liquidation of its remaining 399 stores could start as soon as Friday, and it is expected to go out of business for good by the end of September.
Facebook Foreclosure Notices
Are The New Notification System For Lenders
By James Johnson - Inquisitr.com
Mortgage lenders in Australia, Canada, New Zealand and England have begun serving foreclosure notices to homeowners through Facebook, a practice that has been endorsed by banks, lawmakers and in some cases even borrowers in those parts of the world.
According to lenders in some cases they are able to receive immediate responses fromFacebook users when other more traditional forms of communication have failed, responses that allow them to move forward with foreclosure proceedings at a faster rate.
Another Dust Bowl?
By Brian Resnick - TheAtlantic.com
After a spring filled with reports of devastating floods and tornadoes, another climatological disaster is taking shape. Fourteen states across the south, particularly Texas, are facing a lethal combination of record heat and low precipitation. The Office of the Texas State Climatologist reports that this past June was the hottest June in recorded history. Twenty-five Texan cities broke heat records. Meanwhile, water supplies are drying up and crops are dying. Meteorologist say a strong La Niña -- abnormal cooling of Pacific waters -- is to blame.
According to experts, this is no ordinary drought. It's a large-scale crisis that some are comparing to the Dust Bowl of the 1930s. Brian Fuchs, a climatologist at the National Drought Mitigation Center, told me that this is a once- or twice-in-a-lifetime event. "Most all the data is falling in the driest one or two years on the records," he said. And some of that data stretches back for 100 years.
Daily brief: Report - bin Laden wanted 9/11/11 attack
BY ANDREW LEBOVICH - AFPAK.ForeignPolicy.com
Siobhan Gorman reports that information recovered from Osama bin Laden's Abbottabad compound indicates that the slain terrorist leader was in the initial stages of planning an attack for the 10th anniversary of the 9/11 attacks with his "operations chief" Attiyah Abd al-Rahman (WSJ). Bin Laden and Rahman were discussing names of operatives to be involved, according to the seized documents; Gorman also notes that most analysts have finished their review of the documents, but have found little actionable intelligence.
The organization Médecins Sans Frontières lashed out at the CIA's use of a vaccination program as cover in the hunt for bin Laden, as U.S. officials defended the operation as necessary to track down the al-Qaeda leader (Guardian, CNN). And Pakistan's Inter Services Intelligence Directorate (ISI) has reportedly offered custody of top al-Qaeda-linked terrorist Umar Patek, who was arrested in January in Abbottabad, to the Philippines (AP).
GAZA STRIP: Israeli military warns Gazans in leaflet drop
By Rushdi Abu Alouf - LATimes.com
Israeli aircraft dropped leaflets over the Gaza Strip for the first time since the end of a 22-day assault more than two years ago.
The leaflets, dropped late Sunday and early Monday, written in Arabic and signed by the "Israel Defense Forces," warned residents not to come near the border with Israel in the northern part of the territory, witnesses said.
The leaflets warned citizens against approaching within 300 yards of the border. "Anyone approaching the buffer zone will put himself in danger," one leaflet read.
15,000 US Troops to Remain In Iraq, Renamed "Diplomats" Role will be to occupy military bases and protect oilfields
Paul Joseph Watson - Prison Planet.com
At least 15,000 US troops will stay in Iraq beyond the December 31 deadline which the Obama administration promised would bring a complete withdrawal of American forces. The majority of the troops will receive a "cover designation" and be labeled "diplomats," but their job will be to protect oilfields and serve four giant military bases that will ensure the occupation remains permanent.
Confirming our earlier reports, the Israeli intelligence news source DebkaFile released a briefing to its subscribers this past weekend entitled, Four Big Air Bases, 15,000 Troops: For Defending Baghdad and Oil, and Facing Iran, which detailed how the occupation would be prolonged under false pretenses, with the Obama administration categorizing active duty US troops as "military trainers, expert advisers and diplomats."
THE QUIET COUP: The implementation of Agenda 21
Debbie Coffey /Investigative Reporter/PPJ
People have noticed the 25 government agencies on Obama's new White House Rural Council. And, they’re questioning what might be the need for all of them.
What people may not have noticed yet, is that the government agencies in this council are also on other councils. These councils, as well as the individual government agencies, are implementing international laws that have taken effect through Executive Orders, Memorandums of Understanding, agreements and regulations that most Americans don't even know about. These have bypassed Congress. And, it also seems they have completely bypassed the Constitution.
The devil is in the details
These agencies and councils are forming "partnerships" with members and groups other than the American people. However, our tax dollars pay for their salaries and for the programs.
Regulators Shut Four Banks
By DREW FITZGERALD And TOM BARKLEY - WSJ.com
Regulators shut four banks, two in Georgia and one each in Florida and Arizona. Of 55 bank failures so far this year, 16 have been in Georgia and seven in Florida.
In Georgia, regulators shut High Trust Bank of Stockbridge and One Georgia Bank of Atlanta. Florida regulators shut First Peoples Bank of Port St. Lucie. Arizona regulators shut Summit Bank of Prescott, the second bank failure in that state this year.
One Georgia is the third recipient of federal bailout money to have failed this year, having received $5.5 million from the Treasury under the Troubled Asset Relief Program in May 2009. First Peoples is the fourth TARP beneficiary; its holding company received $5.8 million in TARP money in 2008. Overall, 11 TARP recipients have failed so far, and dozens more are considered at risk, according to an analysis by The Wall Street Journal.
Premier American Bank gets failed First Peoples Bank
South Florida Business Journal - by Brian Bandell
Miami-based Premier American Bank grabbed its eighth failed bank in its short history as it acquired Port St. Lucie-basedFirst Peoples Bank.
The Florida Office of Financial Regulation on Friday shut down First Peoples Bank, which had six branches, $228.3 million in assets and $209.7 million in deposits. The failure is expected to cost theFederal Deposit Insurance Corp. $7.4 million.
Get Ready for a 70% Marginal Tax Rate Some argue the U.S. economy can bear higher pre-Reagan tax rates. But those rates applied to a much smaller fraction of taxpayers than what we're headed for without spending cuts.
By MICHAEL J. BOSKIN - WSJ.com
President Obama has been using the debt-ceiling debate and bipartisan calls for deficit reduction to demand higher taxes. With unemployment stuck at 9.2% and a vigorous economic "recovery" appearing more and more elusive, his timing couldn't be worse.
Two problems arise when marginal tax rates are raised. First, as college students learn in Econ 101, higher marginal rates cause real economic harm. The combined marginal rate from all taxes is a vital metric, since it heavily influences incentives in the economy—workers and employers, savers and investors base decisions on after-tax returns. Thus tax rates need to be kept as low as possible, on the broadest possible base, consistent with financing necessary government spending.
If The U.S. Government Loses Its AAA Rating
It Could Potentially Unleash Financial Hell Across The United States
TheEconomicCollapseBlog.com
For decades, the U.S. government has had a AAA rating. On the scales used by the big three credit rating agencies, that is the highest credit rating that a government can get. Moody's scale actually uses lettering that is a little different from the other two big agencies ("Aaa" instead of "AAA"), but you get the point. Right now, the U.S. government is closer than ever to losing its AAA rating. The threat of a rating downgrade is going to continue to grow regardless of how the political theater that we are watching unfold in Washington D.C. plays out. The truth is that the federal government has accumulated a debt that is so vast that it will never be paid back. In fact, we are rapidly approaching the point when this debt will no longer be serviceable. If the credit rating of the U.S. government is not slashed right now, it will be soon enough. In fact, the truth is that the U.S. government is such a financial mess that it should have been done long ago. But whenever the United States does lose its AAA rating, we could potentially see financial hell unleashed because it will also mean that there will almost certainly be a wave of credit rating downgrades from coast to coast.
Should We Worry About a AAA-Rated Debt Bubble? Investor love risk-free bonds
but is it possible to have so many of them?
By Daniel Indiviglio - TheAtlantic.com
If demand for an asset ballooned by 300% in a decade, then you might smell a bubble. This describes the rise of AAA-rated debt. In 1999, about $1.5 trillion AAA-rated securities were issued globally. In 2009, AAA-rated issuance peaked at over $6 trillion. Are we in bubble territory?
Check out the following chart from a report by the BIS and Basel Committee's joint forum: [see chart]
Tracy Alloway at the Financial Times Alphaville blogs says that this could be the most important chart in the world right now. Is this a clear indication that the rating agencies and investors are both out of their minds? The chart shows two things. First, AAA-rated security issuance has grown at an extremely rapid pace over the past decade. Second, the portion of bonds that are AAA-rated has also grown significantly, to more than 50% of all fixed-income bonds issued, from around 20% in 1991.*
U.S. credit: Raising debt ceiling isn't enough
By Jeanne Sahadi @CNNMoney
NEW YORK (CNNMoney) -- If only lawmakers would raise the debt ceiling before Aug. 2, the United States will get to keep its top-notch credit rating. Right?
Yes, but not necessarily for long.
Two key ratings agencies have said they are expecting policymakers to not only raise the debt ceiling but to agree to meaningfully reduce the debt.
Moody's Investors Services said Wednesday it would likely change its outlook on the AAA rating to "negative" from "stable" unless "substantial and credible agreement is achieved on a budget that includes long-term deficit reduction."
If the debt limit isn't raised ... what's next? Total economic catastrophe or a hobbled government?
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — What happens if Congress doesn't raise the debt ceiling? Would it cause a devastating economic collapse in the U.S.? Would it result in a government limping along, meeting only its most important obligations? Or would it ultimately turn into a constitutional crisis?
Here's a guide to what the major players in the debt and deficit debate are saying about possible scenarios.
The sky will fall
The Obama administration says failure to raise the $14.3 trillion debt limit would be an unprecedented event that would lead to default and economic catastrophe. The Treasury Department says U.S. borrowing authority will run out Aug. 2. The president says he and congressional leaders from both parties will meet again Sunday at the White House after having a "constructive" meeting Thursday, adding that there will be political pain on both sides. Read related story on Social Secury’s role in the deficit negotiations.
How the US debt ceiling could hit your finances
By Angela Wu - CNN.com
Washington may reach a deal to raise the debt ceiling by Aug. 2, the date after which Treasury Secretary Timothy Geithner says the US will no longer be able to meet its debt obligations through accounting tricks.
But what happens if the $14.3 trillion debt ceiling, which places a legal cap on the amount the country can borrow — and which the U.S. actually hit on May 16 — isn't raised?
"Frankly, no one knows," says Matt Slaughter, a professor at Dartmouth's Tuck School of Business. "There's no historical precedent for what happens if the US defaults on part of its outstanding debt obligations."
But it's clear the outcome won't be good, Slaughter says.
Senate Debt Plan Promises Months of Budget Wrangling
By JANET HOOK And DAMIAN PALETTA - WSJ.com
With few signs of movement over the weekend on negotiations to raise the federal borrowing limit, Senate leaders are planning this week to unveil a back-up plan that would force more budget wrangling before the end of the year.
Washington seems rudderless just two weeks before an Aug. 2 deadline for Congress to increase the $14.29 trillion borrowing authority or risk having some government bills go unpaid. White House budget director Jacob Lew used the word "Armageddon" three times on Sunday talk shows, saying a default could lead to a financial crisis that would send interest rates rising and drive up the cost of credit for all Americans.
Will debt ceiling hit businesses?
Dayton Business Journal - by DBJ Staff
As the politicians in Congress and the White House bicker over a potential deal to raise the United States' debt ceiling, businesses are waiting to see what impact it will have on Corporate America.
So we thought it would be worth asking readers what you think the outcome of the debt limit talks will be in terms of any impact on businesses on Main Street, and not just those on Wall Street.
There is a large group of business leaders who are concerned about the outcome of the talks.
Republicans edge US nearer debt crisis As deadline nears, Republican party is still blocking President Obama's compromise package, including $1tn from higher taxes
By Ed Pilkington in New York - Guardian.co.uk
A week of high brinkmanship on Capitol Hill opened today with neither side in the impasse over the US debt ceiling prepared to budge and with the US just days away from a potentially catastrophic default.
The White House called a temporary cessation of hostilities, with meetings that have been going on almost solidly for more than a week suspended over the weekend to allow tempers to cool. But despite the hiatus, there was no sign from either the Republicans or Democrats that they were preparing to compromise.
Wall Street will not let Republicans pull the debt ceiling trigger It is absurd to think that Republicans in Congress would force big spending cuts by taking Wall Street hostage with the debt ceiling
By Dean Baker - Guardian.co.uk
The tension is building in the budget talks as the calendar closes in on the August 2 drop-dead date. According to Treasury Secretary Geithner, this is the date where the government would no longer have the money to pay its bills and a default on the debt would be looming.
As many have noted, including me, a default on the debt would be an absolute disaster for the financial system. We would see the same sort of freeze-up of lending as we did after the collapse of Lehman in September of 2008, although this time would almost certainly be much worse.
Faber: Ben Bernanke doesn’t understand international economics
FinancialSense.com Jim Puplava: Marc Faber, the editor of the Gloom, Boom & Doom Report joins us on the program. And Marc, in a recent newsletter, you talked about getting together with some prominent economists; many of whom have been lifelong friends of yours such as Gary Shilling and David Rosenberg. Now, those two were deflationists. Two of you at the get-together were in the inflation camp yourself and Eddie Ardini. I’ve always found it amazing how economists can look at the same data and come to opposite conclusions. Marc, what is it in your backgrounds and line of thinking that makes you come to different conclusions? Marc Faber: Yeah, that’s a good question. I mean, I think that deflationists, they all have families. They go shopping, their families go shopping, they pay educational cost, they pay healthcare cost, insurance cost and they see the fees on local government services increasing, taxes generally increases. Then I find this hard to believe that they would endorse the concept of deflation. But obviously, they may think that the economy may collapse and that as a result of that, we may have deflation and that, therefore, you should buy long term US government bonds. And my view is, particularly in the deflationist scenario, where you would have like Prechter said the Dow Jones below a thousand. In that scenario, you wouldn’t want to be in US government bonds and in cash for the simple reason that in that scenario, the fiscal deficits -- in other words, spending -- would exceed tax revenues even more than if you were actually optimistic about the economy. Just consider -- if the Dow Jones went below a thousand, what kind of an economic environment would we be in? We would be in a total credit collapse. We would be in a total economic collapse.
The True Elephant In The Room Appears:
Trillions In Commercial And Industrial Loans
To Europe's Insolvent Countries
Submitted by Tyler Durden - ZeroHedge.com
With the market's attention over the past year exclusively focused on bank holdings of insolvent European sovereign debt, which as is now well known had been declining for months, many if not all forgot that banks also have credit exposure via far simpler conduits: retail and commercial debt. And as an analysis of the full disclosure in the EBA's second stress test exposes, banks are on the hook for literally trillions in various plain-vanilla commercial and retail loans to individuals and businesses. WSJ's David Enrich summarizes it best: "Friday's test results shed light on another potential problem for Europe's banks: huge piles of residential mortgages, small-business loans, corporate debt and commercial real-estate loans to institutions and individuals from ailing countries. As those economies struggle, the odds of rising defaults grow." Oops.
European stress tests:
banks set for 'chaos Monday' after nine fail European banks are set for a day of "chaos" on Monday as investors and analysts derided the latest round of industry stress tests as "inadequate".
By Harry Wilson, and Philip Aldrick - Telegraph.co.uk
The nine banks that failed the European Banking Authority’s (EBA) stress tests will have to raise just €2.5bn (£2.2bn) between them to meet their capital shortfall.
City analysts and investors said the criteria used by the EBA were overly optimistic and failed to capture the severity of the current sovereign debt crisis sweeping across the eurozone.
"If the European Union could monetise the value of the credibility it has destroyed it would be the richest organisation on earth," said one major credit manager.
Why The Latest European Bailout,
Aka "The Debt Buyback" Plan Is Also DOA,
And Why The CDO At The Heart Of The Eurozone
Is About To Become Extremely Toxic
Submitted by Tyler Durden - ZeroHedge.com
Over time many have wondered why the ECB, in order to "extend and pretend", does not simply do an episode of QE and monetize bonds outright? Well, in addition to Germany's flashbacks to hyperinflation which have so far kept Trichet from pursuing an all too aggressive bond buyback program in the primary market, the ECB does have the Securities Market Programme (SMP) which however since inception has bought only €74 billion (this week the number is expected to rise, or, if it doesn't, it confirms that now China is directly buying European bonds in the secondary market). The problem with the SMP is that it was conceived as a modest marginal debt buying program, never intended to surpass much more than a few dozen billion in debt. Alas, by now it is becoming all too clear that the ECB will need to monetize hundreds of billions of insolvent PIIGS debt in order to extend and pretend forcefully enough so that a new bailout is not needed every other week. But how to do it without monetizing debt on the ECB's books?
Germany says Greek debt hit 'unavoidable' One of Angela Merkel’s key economic allies has opened the door to an agreement on Greece's debt crisis by saying it is "unavoidable" that investors in the country’s ballooning debt will have to forfeit some repayments and interest.
By Amanda Andrews - Telegraph.co.uk
Wolfgang Franz, the head of the German Chancellor's council of economic advisers, said investors could swap Greek debt for discounted bonds issued and guaranteed by the European Financial Stability Facility.
It has also emerged that a Greek bond buyback financed by the European Financial Stability Facility could help reduce the country’s debt by €20bn (£17.5bn), Der Spiegel reported, citing calculations by the German finance ministry. The buyback is "one of a number of alternatives" that are being tested on behalf of finance minister Wolfgang Schaeuble, the magazine said.
Clinton: U.S. backs tough Greek austerity measures
By Matthew Lee-Associated Press - WashingtonTimes.com
ATHENS (AP) — U.S. Secretary of State Hillary RodhamClinton, in Athens on Sunday, voiced strong American support for financially troubled Greece's economic recovery plans and urged the nation to forge ahead with painful reforms that have sparked unrest.
In and after meetings with senior Greek officials, Mrs. Clintonunderscored Washington’s backing for their deficit and debt reduction programs that have hit the country hard, even as the Obama administration grapples with a similar issue at home. She acknowledged the reforms were “strong medicine” that are difficult to swallow, but said the United States had complete confidence in the Greeks.
A modest proposal for eurozone break-up The eurozone can in theory still be saved, if two sets of conditions are fulfilled; if the leaders of Germany, Austria, Finland, and the Netherlands accept fiscal union and a common pooling of debt, and can persuade their parliaments and courts to ratify such a revolution. -- By Ambrose Evans-Pritchard - Telegraph.co.uk
If the Germanic bloc agrees to tear up the mandate of the European Central Bank, letting it switch from inflation-targeting to job-targeting ("Unemployment must not exceed 10pc in two or more EMU states, or some such formula), effectively instructing the ECB to embark on Fed-style stimulus for three to five years.
This might allow Spain to work off a total debt load now topping 300pc of GDP without having to deflate wages and tip further into a Fisherite debt-deflation spiral. It might allow Italy at 250pc of GDP to claw back lost competitiveness without self-defeating perma-slump.
Nervousness on global economy to support gold this week
By Debbie Carlson - CommodityOnline.com
(Kitco News) - Gold prices will continue to find strength next week as the debt-ceiling talks in the U.S. drag on and investors fret about the chances for default for some European economies.
If an agreement is reached on lifting the U.S. debt ceiling, prices could pull back, but buying interest under the market will limit the downside for gold prices, market watchers said.
These concerns, plus thoughts that the U.S. Federal Reserve has left the door open to another potential round of fiscal stimulus if the U.S. economy falters, pushed gold prices to record levels this week.
Bernanke doesn't think gold is money... Bernanke's Nightmare
By: Brady Willett - MarketOracle.com
The Great Ron Paul (no factiousness intended as Dr. Paul is truly one of a kind), has once again stymied the not-so-great Bernanke. After listening to Bernanke ramble on about people buying precious metals because of tail risks*, Mr. Paul finally interrupted and asked Bernanke point blank: 'Do you think gold is money'? Bernanke’s answer, after an awkward pause, was as follows: "No"
And what, prê tell, is money Mr. Bernanke? Is it seen in the unbacked fiat experiments that after a mere 40-years of floating freely are already showing signs of sinking? Or perhaps ‘money’, as Bernanke might define it, is whatever someone in his position can debase at a press of a button? Like a chorus acquiring added meaning with each repetition in song, consider, once again, Bernanke’s 2002 words:
Big Move Coming for Precious Metals in 2nd Half - Part 1
BY CHRIS PUPLAVA - FinancialSense.com
One theme I hope to convey in my writing is flexibility, which is crucial to long-termsuccessful investing. Being a perma-bull worked from 1982 to 2000, as did the buy-and-hold investment philosophy. However, since then a more adaptive strategy to the business cycle and investing in general has worked best, being able to sell when economic prospects deteriorate materially (2000, 2007) and being able to buy when the economy and stock market is improving (2003, 2009). If one holds to their investment philosophy and mentality without moving with the markets they are either missing out on big gains and/or suffering big losses. Flexibility has not only been vital to investors in the stock market, but also niche investing areas such as precious metals investing. While precious metals have outperformed the US stock market over that past ten years, investors in the sector have suffered tremendous volatility along the way with 2008 being the greatest example. Given global central banks continue to debase their currencies and increase money supply growth rates while deficits continue to spiral upwards, the secular bull market for precious metals is still intact. That said, investment flexibility can help precious metal investors avoid volatility and headache.
How Gold Performs In Deflation
By: Clif Droke - GoldSeek.com
Despite the undue attention that has been paid to the chimera of inflation this year, it should be clear by now that deflation is the far greater structural problem. One clue that deflation, not inflation, is the main issue can be seen in the biggest form of savings and investment among the U.S. middle class, namely real estate.
Real estate is an excellent asset to own during the inflationary phase of the long-term cycle of inflation/deflation but it’s one of the worst assets to own during hyper deflation. As an illiquid asset, housing prices tend to depreciate in the final years of the deflationary winter season, as many have discovered. This is one of the biggest proofs that the economic long wave, or Kondratieff Wave, is still in its deflationary phase and hasn’t bottomed yet.
Michael Berry predicts $1,700 gold by year-end
CommodityOnline.com The Gold Report: Dr. Berry, you are going to go before the Federal Reserve and meet with Congressional representatives on July 18. Could you give our readers a Coles Notes version of what you plan to say? Michael Berry: I go before the Federal Reserve twice a year. In this presentation on Monday, I'll talk about the geopolitics of growth in emerging countries and issues related to the dollar, gold, convergence of the rest of the world and the weak global recovery.
Monday afternoon, I'll head over to the House and meet with the Chairman of the House Natural Resources Committee and Senator Lisa Murkowski's (R-Alaska) natural resource staff to discuss extractive resource policy, natural resource exploration in the U.S., critical metals and what's really happening in the rest of the world regarding resource nationalism.
Jim Grant still can't figure out why the dollar has held up so long
By: Chris Powell, Secretary/Treasurer, GATA - GoldSeek.com
.... "The 'fiat' dollar, he adds ruefully, 'is one of the world's astounding monetary creations. That a currency of no intrinsic value is accepted as money the world over is an achievement that no monetary economist up until not so many decades ago could have imagined. It'll be 40 years next month that the dollar has been purely faith-based. I don't believe for a moment it's destined to go on much longer. I think the existing monetary arrangements are so precarious, so ill-founded, and so destructive of the economic activity they are supposed to support and nurture that they will be replaced by something better.'"
How has the world been ruled for so long by a currency stuck with a negative real interest rate, which Grant acknowledges is a matter of government manipulation of the market? The evidence suggests powerfully that the answer is market manipulation by central banks that is far more extensive and surreptitious than the manipulation Grant acknowledges, manipulation directed particularly against the natural, impartial, and former world reserve currencies, the precious metals, gold and silver.
Credit Suisse Is 'Target' of Inquiry
By DEBORAH BALL, LAURA SAUNDERS and THOMAS CATAN - WSJ.com
U.S. prosecutors are ratcheting up the pressure on Credit Suisse Group AG as part of an escalating tax-evasion probe.
Credit Suisse disclosed Friday that the U.S. Justice Department had notified the bank that it was a formal target of a criminal investigation into how Swiss financial institutions allegedly helped U.S. citizens avoid paying U.S. income tax.
The move significantly raises the stakes for Zurich-based Credit Suisse, one of the world's largest banks, because "targets" of criminal probes are those under direct scrutiny from grand juries that consider whether to hand up indictments. No major U.S. bank has ever survived criminal charges.
World Wide Bailout
By Warren Bevan - GoldSeek.com
The big talk these days is of the debt ceiling in the US having to be raised. The US is lucky they can do this unlike other countries such as Spain, Portugal, Greece, Ireland and others who need to be bailed out or pass huge austerity measures.
Unfortunately the perpetually increasing debt of the US is what’s going to be their downfall. It simply cannot last forever and the only way out now is a devaluation of the US dollar which has been and is occurring, but so far it’s been orderly.
It's impossible to ever pay off the US debt.
If you do any shopping at all you know prices have been going higher and in many cases at an accelerating rate.
Do not be fooled by the snails pace of the devaluation. A cursory look through history will show you that this is always how the fall of a currency occurs. Slowly at first, then it picks up some steam but is still manageable but when the big fall happens, it’s almost an over night phenomenon.
"The last duty of a central banker is to tell the public the truth."
~ Alan Blinder
"When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe, he has prepared himself for the commission of every other crime."
~ Thomas Paine
As the US Federal Reserve System approaches its 100th Anniversary in a few years, and as central banks and their political allies around the world promote the bailout and enrichment of the biggest banks and wealthiest individuals, to be paid for by the impoverishment and sacrifice of the people, it might be well to remember the lessons of history with regard to a fiat currency controlled by private corporations under the guise of an 'independent monetary authority.'
Federal Land Up for Budget Grabs
By LAURA MECKLER - WSJ.com
White House and congressional negotiators, hunting for savings in the federal budget, recently came upon a juicy target: a 387-acre tract of land in the heart of ritzy West Los Angeles. It could be worth billions.
For 25 years, wealthy locals and veterans groups—backed by California's congressional delegation—have successfully resisted efforts to sell or develop the land, delighting in the open space and fearing the consequences of development.
But during a June meeting, none of that mattered. According to officials familiar with the talks, the White House suggested the government could raise $12 billion by selling unneeded federal land, with as much as $5 billion coming from this one Los Angeles property. "Sell it," said Rep. Eric Cantor, the No. 2 House Republican, adding that any business would do the same. No one in the room, from either party, disagreed.
A Short History of US Credit Defaults
Mises Daily: by John S. Chamberlain
On July 13th, the president of the United States angrily walked out of ongoing negotiations over the raising of the debt ceiling from its legislated maximum of $14.294 trillion dollars. This prompted a new round of speculation over whether the United States might default on its financial obligations. In these circumstances, it is useful to recall the previous instances in which this has occurred and the effects of those defaults. By studying the defaults of the past, we can gain insights into what future defaults might portend. The Continental Currency Default of 1779
The first default of the United States was on its first issuance of debt: the currency emitted by the Continental Congress of 1775. In June of 1775 the Continental Congress of the United States of America, located in Philadelphia, representing the 13 states of the union, issued bills of credit amounting to 2 million Spanish milled dollars to be paid four years hence in four annual installments. The next month an additional 1 million was issued. A third issue of 3 million followed. The next year they issued an additional 13 million dollars of notes. These were the first of the "Continental dollars," which were used to fund the war of revolution against Great Britain. The issues continued until an estimated 241 million dollars were outstanding, not including British forgeries.
History of Economic Recession in America
BY THOMAS LISACK - FinancialSense.com
President Harry S. Truman once quipped, “When a neighbor loses a job it’s a recession; when you lose your job it’s a depression.” Although Truman’s words were spoken more than a half of a century ago, its relevance to the lives of Americans living in the early 21st century is tangible, evident in all reaches of society. An economic recession is not someone else’s problem. Economic Recession Definition
A recession is described as a decline in a country’s gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year. According to a recent article on CNNMoney.com, the recession of 2007-2009, at 18 months, was the longest in the history of this country. Recessions of November 1973 to March 1975 and July 1981 to November 1982 lasted 16 months each. And although many may have long ago grown weary of economic forecasters and news anchors punctuating their remarks with expressions such as "In these challenging economic times," who can question the appropriateness of the sentiment?
S&P upgrades Ohio rating, warns on U.S. debt
Dayton Business Journal - by Joe Cogliano, DBJ Senior Reporter
Standard & Poor's Ratings Services upgraded Ohio's debt rating just one day after it put the United States on "creditwatch negative" on what it calls a rising risk of policy stalemate in the debt limit negotiations.
For Ohio, the rating was revised from "negative" to "stable" after Gov. John Kasich signed a new budget the ratings agency says will essentially balance the state's finances for the next two years. S&P also said Ohio is experiencing a modest economic recovery which has stabilized revenue.
In making the upgrade, the agency also assigned a "AA+" long-term rating to Ohio's $416.75 million general obligation bonds.
Gerald Celente- Jeff Rense Radio - 14 July 2011
'US riding second wave of depression'
The United States is witnessing the 'second wave' of economic depression as pressure grows on the US administration to hammer out a deal to avoid a debt default that could have global ramifications.
Press TV talks with Dr. Webster Griffin Tarpley, an author and historian in Washington, for his insights on the US economic situation and the potential risks of a default. Press TV: If we look at this in context of tough economic times, can it be argued these negative sentiments are natural in such trying times?
Tarpley: Well, the negativity is fully justified. We are in a world economic depression as in the 1930s, it comes in waves. We had the first wave in 2008 were the bankruptcy of Bear Stearns [Companies], Lehman Brothers [Holdings] and really all of Wall Street. We are no going through the second wave of the depression, on the one side, the European debt and banking crises, or the euro crises, but that is now joined by these really unnecessary crises around the dollar and the US public debt. We have a mass of fanatics inside the Republican Party; this is known as Tea Party [movement]. These are reactionaries. They are founded by extreme right-wing business men, like the Koch brothers [of Koch Industries], they want the United States to go bankrupt, they want the US to default because they figured that if the United States can no longer borrow, they would be able to destroy the social safety net that we have had left over from the new deal, that is to say Medicare, Medicaid, social security and so forth.
NUGENT: You have the right to remain stupid Fedzillacrats are oblivious to self-evident truths
By Ted Nugent-The Washington Times
You have the right to remain stupid, and what you say and do can and will be used against you in the court of public opinion. Unfortunately, the court of public opinion is expanding into a stupid-is-as-stupid-does joke. And it has a president and gang of thieves in the United States government to represent it.
So goes the sheeping of America. Welcome to Euro II.
With the level of dishonesty, fraud, abuse of power, corruption, rampant irresponsibility, downright criminal behavior and vehement refusal to be accountable, our government has clearly lost its collective mind - and its soul.
10 Signs That The American People
Are Starting To Freak Out
About The Condition Of The Economy
TheEconomicCollapseBlog.com
All over America, restlessness and frustration are growing. It has now been almost three years since the great financial crash of 2008, and yet the U.S. economy is still a complete and total mess. In fact, there are all sorts of signs that things are about to get even worse, and the American people are just about fed up. Virtually every major poll, survey and measure of consumer confidence shows that the American people are becoming more pessimistic about the economy. Millions of hard working Americans that worked their fingers to the bone for their employers and that did everything "right" are sitting at home on their couches tonight staring blankly at the television. Many of them still have a hard time believing that they were laid off and that there is nobody out there that wants to give them a good job. There are millions of other Americans that won't get much sleep tonight because they will spend much of the night rolling around in bed wondering how they are possibly going to be able to pay the mortgage. We have never faced such an extended economic downturn in modern U.S. history, and a lot of people are starting to freak out about the condition of the economy. As Gerald Celente likes to say: "When people lose everything and have nothing left to lose - they lose it."
Latest reports from the epicenter of crisis due
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The latest postcards from the epicenter of the economic crisis are due to arrive and are unlikely to entice anyone to visit.
The coming week will be dominated by the latest readings on the health of the housing market, which Federal Reserve Chairman Ben Bernanke dubbed the "epicenter" of current economic malaise.
While the market seems to have hit bottom, economists have little else positive to say.
"The housing remains depressed and will likely remain depressed for the next couple of years at least," said Yelena Shulyatyeva, U.S. economist at BNP Paribas in New York.
Employer-Provided Health Insurance Costs
By Ryan Morris - NationalJournal.com
Most Americans who get health insurance through their employers just take coverage for themselves, according to new government data published on Thursday.
Just over 51 percent of workers enrolled only themselves in employer-sponsored health insurance plans, the Agency for Health Research and Quality found. Average premiums were $4,940 for one person; $9,664 for employee plus-one coverage; and $13,871 for family coverage.
******* Stop the FDA! *******
USDA trying to run organic leafy green growers out of business
by: Ethan A. Huff, staff writer - NaturalNews.com
(NaturalNews) Results of the passage of S. 510, the FDA Food Safety Modernization Act, are beginning to come into play -- and in this case the US Department of Agriculture (USDA), rather than the FDA, has decided to take the helm.
A recent Action Alert posted by the Cornucopia Institute (CI) warns that current efforts by handlers and marketers of green leafy vegetables are attempting to formulate one-size-fits-all "food safety" standards for the entire industry that threaten to put small, organic growers at a competitive and economic disadvantage. They may even put small, family-scale growers out of business.
Mike Adams & Alex Jones: The FDA's End Game!! 1/3
Mike Adams & Alex Jones: The FDA's End Game!! 2/3
Mike Adams & Alex Jones: The FDA's End Game!! 3/3
'Exchange' You Can't Believe In The HHS rule for state health markets will mean fewer choices.
Opinion - WSJ.com
Maybe the most unknowing moment from President Obama's debt-limit press conference the other day was when he said that "I'd rather be talking about stuff that everybody welcomes, like new programs." Define everybody—and, please, let us know when the new programs are going to stop.
The latest to roll out are ObamaCare's insurance "exchanges," which will go live in 2014. On Monday the Health and Human Services Department released draft regulations telling the states how they must run these organizations, which are the core of the new entitlement and are where people will receive heavily subsidized coverage. HHS Secretary Kathleen Sebelius and the rest of the Obamacrats are using the language of choice and flexibility to sell their handiwork, but this is the triumph of euphemism over reality.
Keepin' It Cool: How the Air Conditioner Made Modern America Air conditioning hasn't just cooled our rooms -- it's changed where we live, what our houses look like, and what we do on a hot summer night -- By Rebecca J. Rosen - TheAtlantic.com
Hot damn. In a week that's seen temperatures around the country reach into and above the 90s, staying inside has seemed like the natural thing to do. But of course, the chilly indoor summer climate is anything but natural, an artificial oasis of cool brought to you by your friend, the air conditioner.
We often think of air conditioners as just that, a machine that conditions (i.e., cools) the air around us. But the effects of air conditioners reach far beyond atmospherics to the ways we build our houses, where in the country we live, and how we spend our time. Air conditioners are the enablers of modern American life.
Police Shut Down Lemonade Stands And Cookie Stands
Run By Kids All Over America - Is There Anything We Are Stil
Free To Do Without Government Permission?
EndOfTheAmericanDream.com
If you plan on using the bathroom before you get done reading this article, you might want to check with the government to see if you are still allowed to do that. There are very, very few things that Americans still have the freedom to do today without government permission. Back in the old days, if young kids wanted to earn some extra money they would set up a little stand outside and sell some lemonade or some cookies. For many little kids, this was their very first practical experience with making money. Once upon a time, you would see lemonade stands all over the place during the summer in America. In fact, "lemonade stands" became such a part of American culture that people knew exactly what you were talking about the moment you mentioned them. Even up until a couple of decades ago, nobody would have ever dreamed that little kids would need the permission of the government in order to set up a little stand to sell some lemonade or some cookies. But today, everything has completely changed. If you are a little kid and you try to sell some lemonade in "Amerika" today, the authorities will swoop in and shut you down in a heartbeat.
Fraud! FCC Takes Aim at the Scammers
Secretly Padding Your Phone Bill
By Bruce Watson - DailyFinance.com
A little over two years since it took on the credit card industry, the federal government has found a fresh villain: telecommunications fraudsters. Earlier this week, the Federal Communications Commission proposed new rules designed to crack down on "phone cramming," a widespread, illegal practice that robs billions of dollars from phone users.
Officially,the FCC defines crammingas "the illegal placement of an unauthorized fee onto a consumer's monthly phone bill." Often ranging from $1.99 to $19.99 apiece,these chargesare designed to be overlooked. While they sometimes have names like "psychic," "membership," or "mail server," they more often have innocuous titles like "service charge," "minimum monthly usage fee" or "other fees." For the third-party companies that tack these expenses onto your bill, the goal is to create a name that sounds vaguely official and will be ignored by most customers. To this end, many companies also tuck the fees in with a long list of other, more legitimate charges.
House Votes to Block Light-Bulb Efficiency Bill
By RYAN TRACY
WASHINGTON—The U.S. House voted Friday to block a federal standard that would push many less-efficient light bulbs off the market starting in 2012.
The measure, attached to a broader bill on energy spending, could prevent the Energy Department from implementing the efficiency standards during the budget year that begins in October. It will now be part of final negotiations between House and Senate lawmakers charged with negotiating a final energy spending bill. It faces resistance in the Democrat-controlled Senate, and the White House, which supports the efficiency standards, opposes the measure.
The clash over light bulbs has stoked anger among a swath of conservatives who argue that the government should not have a hand in what light bulbs Americans can buy.
OBAMA SELLS GUNS TO TERRORIST DRUG GANGS
Los Zetas Kingpin Says
A New Egypt on the Brink of Being Born
By Lauren Unger-Geoffroy - Truthdig.com
"No [political] parties, no Muslim Brotherhood! The Egyptian people are in the square! La ahzab, la Ikhwan! Al-Sha’b al-Misri fi al-Maydan!"
"The blood of the martyrs won't be wasted," the crowds chanted.
And variations on chants from the 18 days: “Mish hanemshi elmagless yemshi," "We’re not leaving, the council is leaving" and "Down with the military rule!"
Considering the surprising lack of American press coverage of the ongoing events in Egypt, I will bring you up to speed here. Days are dense with evolution as Egypt flies through to the next era with the Middle East and the world following in the pull of its momentum.
CIA veteran: Israel to attack Iran in fall The Israeli security establishment is increasingly worried
by Netanyahu's bellicose stance towards Iran.
By MJ Rosenberg - Al Jazeera
A longtime CIA officer who spent 21 years in the Middle East is predicting that Israel will bomb Iran in the fall, dragging the United States into another major war and endangering US military and civilian personnel (and other interests) throughout the Middle East and beyond.
Earlier this week, Robert Baer appeared on the provocative KPFK Los Angeles show Background Briefing, hosted by Ian Masters. It was there that he predicted that Israeli Prime Minister Binyamin Netanyahu is likely to ignite a war with Iran in the very near future.
Granger, Lowey:
Palestinian Statehood Push Could End U.S. Funding
By JTA - Forward.com
WASHINGTON — The U.S. House of Representatives’ top Republican and Democratic appropriators for foreign assistance warned the Palestinian Authority that it is jeopardizing funding by pursuing statehood outside of talks.
The July 11 letter from Rep. Kay Granger (R-TX), the chairwoman of the foreign operations subcommittee of the Appropriations Committee, and Rep. Nita Lowey (D-NY), the subcommittee’s senior Democrat, to Palestinian Authority President Mahmoud Abbas noted that both the House and the Senate had in recent weeks overwhelmingly passed resolutions making such warnings.
------- NWO and the near future -------
DR BILL DEAGLE - JULY 15TH 2011 -
YELLOWSTONE READY TO ERUPT? (1/3)
DR BILL DEAGLE - JULY 15TH 2011 -
YELLOWSTONE READY TO ERUPT? (2/3)
DR BILL DEAGLE - JULY 15TH 2011 -
YELLOWSTONE READY TO ERUPT? (3/3)
Return of the Gold Standard as world order unravels As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability. The spot price surged to an all-time high of $1,594 an ounce in London, lifting silver to $39 in its train. -- By Ambrose Evans-Pritchard - Telegraph.co.uk
On one side of the Atlantic, the eurozone debt crisis has spread to the countries that may be too big to save - Spain and Italy - though RBS thinks a €3.5 trillion rescue fund would ensure survival of Europe's currency union.
On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between the Congress and the White House over the US debt ceiling has compelled Moody's to warn of a "very small but rising risk" that the world's paramount power may default within two weeks. "The unthinkable is now thinkable," said Ross Norman, director of thebulliondesk.com.
Fed chair Ben Bernanke confessed to Congress that growth has failed to gain traction. "Deflationary risks might re-emerge, implying a need for additional policy support," he said.
Why the U.S. could use a strategic default A modest proposal on debt: Let the government close
By Jeff Reeves
ROCKVILLE, Md. (MarketWatch) — It is a sad situation when hard-working CEOs and money managers who make this country great must watch a bloated federal budget waste our hard-earned money.
Millions of Americans claim they are old, sick or laid off — and, instead of working for an honest livelihood, employ all their time begging for a government handout. They drive up the national debt with their dependence, and they are responsible for the current budget mess we are in.
I think it is agreed by all parties that this prodigious spending is deplorable. So amid the current debate over the debt ceiling, I feel compelled to offer my Modest Proposal to fix our free-spending ways: a strategic default on our debt.
US debt ceiling talks deadlocked as Moody's warns on AAA rating City experts warn that lack of progress in Washington over the debt ceiling fans fears that the world's biggest economy might default on some of its debt - By Graeme Wearden - Guardian.co.uk
America's debt crisis reached a critical stage on Thursday as lawmakers remained deadlocked over whether to raise the US debt ceiling, and Moody's threatened to downgrade the country's credit rating.
The dollar lost ground against most major currencies after Moody's and Chinese ratings agency Dagong both put the US on negative watch. Reports, later denied, that President Obama had walked out of debt negotiations with top Republicans added to the drama.
Debt Ceiling Charade a Move to the Right
Congress Can't Have More Time: Geithner
By Kevin Costelloe and Cheyenne Hopkins - Bloomberg.com
U.S. Treasury Secretary Timothy F. Geithner said today there is "no way to give Congress more time" on lifting the debt ceiling.
After meeting with Democratic lawmakers on Capitol Hill, Geithner said that "it’s time we move." Geithner has repeatedly said the U.S. borrowing authority will end on Aug. 2 unless Congress acts.
"We've looked at all available options and we have no way to give Congress more time to solve this problem and we're running out of time," he said. "The eyes of the country are on us and the eyes of the world are on us and we need to make sure we stand together and send a definitive signal that we are going to take the steps necessary to avoid default."
Boehner rejects Camp David meeting
by Stephen Dinan - WashingtonTimes.com
House Speaker John A. Boehner has told President Obama he sees no need to go to Camp David this weekend to continue debt talks.
The White House was floating the idea as talks have grown increasingly tense and a deadline looms, but a spokesman for Mr. Boehner, Ohio Republican, told reporters that it's a no-go.
House Minority Leader Nancy Pelosi, California Democrat, also said she doesn't think that moving the debt talks to Camp David would be a good idea.
Bernanke rejects alternatives to raising debt ceiling
By Cezary Podkul - WashingtonPost.com
Federal Reserve Chairman Ben S. Bernanke on Thursday rejected various alternatives to raising the country's borrowing limit and urged Congress to come up with a "strong, credible plan" for doing so while cutting spending — or risk a making "self-inflicted wound" to the fragile economic recovery.
Bernanke's remarks, delivered to the Senate Banking Committee, marked the latest warning of economic catastrophe if Congress doesn't raise the federal government’s debt ceiling by Aug. 2. On Wednesday, Moody's Investors Service, a major credit-rating agency, delivered a similar warning when it moved closer to downgrading the government’s top-notch credit rating.
US debt standoff threatens to turn crisis into catastrophe
By Chris McGreal in Washington - Guardian.co.uk
The US faces the prospect of a "catastrophe" as President Barack Obama stands firm against Republican demands for deep spending cuts without any tax increases as the condition for raising the country's borrowing limit and avoiding a debt default.
With Washington gripped by a growing sense that it may be too late to avert a crisis, the president has said he will give the increasingly rancorous negotiations until the end of next week to reach agreement on the terms for raising the US's $14.3 trillion (£8.9tn) debt ceiling.
Debt Ceiling Charade: S&P places U.S. on Credit Watch Negative, Possible Debt Deal taking shape
by CalculatedRisk.com
From MarketWatch: S&P warns on U.S. debt, 50% chance of downgrade
Standard & Poor's Ratings Services said late Thursday it has placed U.S. sovereign credit ratings on watch for possible downgrade, saying the action "signals our view that, owing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days."
Ezra Klein has some details on The debt deal that’s taking shape, and its drawbacks
I still think something will be worked out, but this interview with Stan Collender is a little scary. First on a meeting he had with some new representatives back in February:
What I took from that was, first, that the debt ceiling was going to be a lot more trouble than anyone realized. They did not want a negotiation there. There was a religious-like fervor on that point: Voting for the debt ceiling was a sin, and you can't just sin a little.
Bernanke Says Failure to Raise Debt Limit
Would Be 'Self-Inflicted Wound'
By Craig Torres - Blooomberg.com
Federal Reserve Chairman Ben S. Bernanke warned lawmakers that they would cause a "self- inflicted wound" should they prompt a credit-rating downgrade by failing to raise the $14.3 trillion U.S. debt ceiling.
Congress should recognize it’s "tremendously important that we have the confidence of the world in terms of willingness to hold Treasuries, to trade in Treasuries, to maintain a liquid market in Treasuries," he said today in testimony to the Senate Banking Committee. "It’s a very important asset and losing that credit rating is, again, I think a self-inflicted wound."
The Fed chairman, responding to lawmakers' questions, urged Congress to reach a solution on the debt ceiling and a broader fiscal deal before U.S. borrowing authority expires Aug. 2. He warned of higher unemployment and the risk of global financial market instability, while noting that a lower credit rating would increase borrowing costs, further widening the deficit.
Why Bernanke And Pals Will Soon Need a New Pair of Pants
Graham Summers - SilverBearCafe.com
The Fed must literally be about to pee itself.
The $600 billion in QE 2 bought at best roughly three months' worth of improved economic data. Granted, it was heavily massaged economic data (US economic data is now largely a work of fiction), but for simplicity's sake, we'll say that the Fed got roughly one month's worth of improved economic data for every $200 billion it spent.
However, QE 2 ALSO blew up food and energy prices up: between 2010 and 2011 gas rose 33% while ground beef, cheese, and vegetables were all up in the double digits as well.
Bernanke: No Plans Now for Bond Purchases
By Jeannine Aversa and Joshua Zumbrun - Bloomberg.com
Federal Reserve Chairman Ben S. Bernanke told Congress that the central bank isn't currently ready to embark on a third round of government bond-buying to stimulate the economy.
"We're not prepared at this point to take further action," Bernanke said today, in response to a question from Senate Banking Committee Chairman Tim Johnson, a Democrat from South Dakota. Johnson asked Bernanke why the Fed wasn't immediately starting a new stimulus program given the weak economic recovery and rising unemployment.
Moody's: Raising the Debt Ceiling Might Not Prevent Downgrade A long-term deficit reduction compromise is needed to satisfy the market's concerns -- By Daniel Indiviglio - TheAtlantic.com
Time is running out for Washington to get its act together on the debt ceiling. On Wednesday, credit rating agency Moody's put the U.S. debt rating on review for possible downgrade. It had warned that a formal review announcement would come if the debt ceiling dispute wasn't resolved by July. The firm says that it will downgrade the U.S. in August if the government misses a debt payment. But the rating agency also clearly states that raising the debt ceiling alone won't give it any confidence in the U.S.'s ability to tackle its broader deficit problem. Here's the key section from Moody's statement:
If the debt limit is raised again and a default avoided, the Aaa rating would likely be confirmed. However, the outlook assigned at that time to the government bond rating would very likely be changed to negative at the conclusion of the review unless substantial and credible agreement is achieved on a budget that includes long-term deficit reduction. To retain a stable outlook, such an agreement should include a deficit trajectory that leads to stabilization and then decline in the ratios of federal government debt to GDP and debt to revenue beginning within the next few years.
Gerald Celente - Barbara Simpson KSFO 7/10/11
PIIGS, Presstitutes, and the Global Meltdown
by Gerald Celente - LewRockwell.com
Read All About It!" You couldn’t not read all about it! The media was full of reports about how happy stock market days were here again. After a stormy start, June closed and July began with US benchmark indexes racking up their biggest weekly gains in two years on good news: the US manufacturing index had unexpectedly risen, and the beleaguered debt-burdened Greeks were bailed out yet again – piling un-payable new debt on top of un-payable old debt.
Yes, there was some concern, but, as The New York Times reported on June 25th, "Two years into the official recovery, the economy is still behaving like a plane taxiing indefinitely on the runway. Few economists are predicting an out-and-out return to recession … analysts generally expect the economy to pick up in the second half."
Europe descends into monetary madness Perhaps it’s crisis fatigue,
but monetary policy in Europe
seems to have descended into madness.
By Jeremy Warner - Telegraph.co.uk
With much of the eurozone (inflation rate 2.7pc) flirting with insolvency, the economy visibly slowing and money growth barely positive at all, Jean-Claude Trichet and the rest of the European Central Bank governing council think the time is right for another hike in interest rates.
Meanwhile, in Britain (inflation rate 4.5pc and rising), the Bank of England is sticking rigidly to the idea that the spike in prices is temporary and that the current zero interest rate policy should therefore be maintained.
Should it not be the other way around? A visitor from Mars would make Sir Mervyn King and Jean-Claude Trichet swap jobs, and then we might see sense prevail in both economic jurisdictions.
"The constraints imposed by market forces [on government deficits inside a single-currency union] might either be too slow and weak, or too sudden and disruptive." - The Delors Committee report on European monetary union, getting it exactly right in 1989
GREEK BONDS have lost half to three-quarters of their face value. Six national strikes have all ended in violence already this year. In the three months to April, public investment spending fell 4bi2% from the start of 2010, but total spending still rose – and tax revenues sank – forcing the budget deficit still wider as the economy shrank 5.5% year-on-year.
What to do? Greece's debt cannot be serviced, much less repaid. Everything says default – stop paying, write it down or write it off, with or without the lenders' consent. Default is certain, and history (that old balls-ache) says it would be better for creditors if the "restructuring" came before Greece misses a payment.
Greece a Dress Rehearsal for United States
Italy money supply plunge flashes red warning signals Monetary experts are increasingly disturbed by the pace of money supply contraction in Italy and most recently France, fearing that it could prove a leading edge of a sharp economic slowdown over the winter.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"Real M1 deposits in Italy have fallen at an annual rate of 7pc over the last six months, faster than during the build-up to the great recession in 2008," said Simon Ward from Henderson Global Investors.
Such a dramatic contraction of M1 cash and overnight deposits typically heralds a slump six to 12 months later. Italy's economy is already vulnerable – industrial output fell 0.6pc in May, and the forward looking PMI surveys have dropped below the recession line.
"What is disturbing is that the numbers in the core eurozone have started to deteriorate sharply as well. Central banks normally back-pedal or reverse policy when M1 starts to fall, so it is amazing that the European Central Bank went ahead with a rate rise this month," Mr Ward said.
Italian Senate passes key austerity package
AP - Independent.co.uk
The Italian Senate approved a crucial €70 billion ($99 billion) austerity package aimed at convincing investors that the eurozone's third-largest economy won't be swept into the debt crisis.
The government had fast-tracked approval of the package and increased its size after markets plummeted this week on worries over the country's financial stability.
The measures were passed 161-135 in a vote of confidence called by Premier Silvio Berlusconi's government. They are due for a final vote in the lower house of parliament on Friday.
Jamie Dimon Explains Why No One On Wall Street
Cares About The Debt Ceiling
By Courtney Comstock - BusinessInsider.com
Jamie Dimon just said on JPMorgan's quarterly conference call that the market expects that the debt ceiling will be raised.
That explains why everyone we've asked says they're not concerned about the debt ceiling -- they just assume it's all politics and it'll work out.
This sums up what we're hearing from people on the street when we ask about the debt ceiling (we ask questions like, Are you concerned that the U.S. will hit the debt ceiling without a deal? Are you preparing for the possibility that it will?):
"Nah, it's all [political] posturing." -- Hedge fund manager
The Fed has a noose around your neck... The Road to Perdition
By David Galland interviews Terry Coxon - LewRockwell.com David Galland: You were involved with Harry Browne during the last great inflation in the U.S. How does the increase in the money supply that kicked off in 2007-2008 compare in terms of scale to what went on leading up to the inflation in the ’70s? Terry Coxon: The comparison is pretty muddled. In terms of the M1 money supply – the total of checkable deposits and hand-to-hand currency – we haven’t yet gotten near the persistently high growth rate that occurred in the 1970s. But the growth in the monetary base has been far more rapid than what happened in the 1970s. There is some time delay between growth in the monetary base and growth in M1, but to make the picture really cloudy, I'm afraid the comparison turns out not to be very useful. Unlike in the 1970s, the Federal Reserve is now paying interest to banks on their reserves.
In other words, the effect is that much of the increase in the monetary base gets locked up and sequestered because banks want to earn the interest on the reserves rather than lending the reserves out or buying investments and increasing the money supply. DG: You are referring to the excess reserves banks have left on deposit with the Fed? TC: Yes.
Keiser Report: Oligarchy Propaganda (E164)
Fed Dissatisfied with Current Pace of Economic Recovery
Written by Top Stock Portfolios - OilPrice.com
The minutes from the June Fed meeting provided a little something for everyone as Fed officials discussed both an exit strategy and… drum roll please… the possibility of more quantitative easing (dubbed as QE3).
A quick review of the minutes shows that the Fed is clearly in a reactive mode at the present time and that there is a great deal of "discussion" taking place about what ought to be done next. For example, some of the FOMC members appear ready to provide more monetary easing if the economic recovery stalls further while others argue that if inflation doesn’t moderate soon, the Fed should begin tightening rates.
The Dangers of Legal Tender
By Gareth - Dont-Tread-On.me
The US constitution states quite clearly that only gold and silver can be used as lawful currency. Along with numerous other constitutional violations happening throughout the world,the concept of 'lawful currency' has been exploited, hi-jacked,and used by the parasitical class in their attempts to enslave the entire human race. Although it’s assumed the founding fathers of the US were acting in a benevolent fashion when composing monetary constitutional law ,the concept that lawful currency should exist leaves-the-door-open for the elite to hitch-a-ride on the fruits-of-our-labor,and act as a parasite upon humankind.
Lawful currency,whether introduced in a benevolent or malevolent fashion opens-up a critical window for the parasitical classes – taxation. Once only certain types of currency are designated as legal tender,the government can then be coerced ,honey-trapped, bribed, threatened, or simply charmed or paid into acting on behalf of the parasites,instead of the people they should be representing – their constituents. From subsidizing selected components of the economy to creating complex taxation laws, the elite set-out a myriad of difficult choices for humankind, in the hope they’ll confuse and scare us into submission. The medium-of-exchange is fundamental to man’s ability to run even a small-scale economy and should be treated as-sacred-as-liberty-itself. To be free, the medium-of-exchange must also be free.
Gold extends gains in Europe as dollar weakens
CommodityOnline.com
LONDON (Commodity Online) : Gold extended gains in European trade Thursday as the dollar weakened after Moody’s warning while Fed hints of a policy easing also helped the yellow metal.
Gold for immediate delivery was seen trading at $1592.47 an ounce at 11.00 a.m London time while U.S. gold futures for August delivery was seen trading at $1,593.42 an ounce on the comex division of Nymex.
Among other precious metals, Silver rose 2.4 percent to $39.16 an ounce, building on the previous session's 5.6 percent rise, its best one-day performance since May 9.
Gold May Extend Gains on Fed Stimulus Signal
Debt Concern, Survey Shows
By Nicholas Larkin - Bloomberg.com
Gold may extend gains from a record as concern about more U.S. economic stimulus and debt woes in the country and Europe boost demand for a protection of wealth, a survey found.
Twenty-four of 27 traders, investors and analysts surveyed by Bloomberg, or 89 percent, said bullion will rise next week. One predicted lower prices and two were neutral. Gold for August delivery was up 2.9 percent for this week at $1,586 an ounce by 11:08 a.m. yesterday on the Comex in New York after earlier in the day touching a record $1,594.90.
Federal Reserve Chairman Ben S. Bernanke this week said the central bank is prepared to take additional action, including buying more government bonds, to boost the economy, while President Barack Obama and congressional leaders have as yet failed to reach a compromise on reducing deficits and raising the debt ceiling. Moody’s Investors Service put the U.S. under review for a credit downgrade and Fitch Ratings slashed Greece’s rating and said that a default is a "real possibility."
Unforeseen Demand Coming In The Physical Gold And Silver Markets
By Courtney Comstock - SilverBearCafe.com
Andrew Maguire, a former trader with Goldman Sachs and a vocal spokesman about what he suspects is market manipulation in the gold and silver markets, has been saying for awhile that there's a huge unforeseen amount of demand coming in the physical gold and silver market. Here's why: The Pan Asia Gold Exchange
Maguire explains why he predicts that the new exchange will usher in a new demand for physical gold and silver in a new interview with King World News, which we've pulled key parts from and transcribed below.
"The Pan Asia Gold Exchange is going to send shockwaves through the mechanisms for the price discovery for both gold and silver. It's backed by China's state administration for foreign exchange and also the Chinese security regulatory commision. But the biggest bombshell is the offer of an RMB gold contracts for international investors.
11 Mentality Shifts of Silver Investors
By Silver Shield - Dont-Tread-On.Me
We are going to see a huge shift in silver investor mentality. (By the looks of today’s action it could be today.) Silver buyers will no longer be “nerdy”guys talking about Austrian Economics or “momentum monkeys”trying to make a quick buck trading metals. It will be wide eyed panic buying as people wake up to the fact they everything they have ever worked for is being destroyed by the massive money creation from the world’s central banks. Once people see that the only answer the bankers have is to print more money and that the only answer the politicians have is to spend more money, they will see that there is no safe place on earth to store their wealth other than real tangible assets. And of course the best real tangible asset is silver.
Silver Dealer Inventory Continues to Spiral to New Lows
at the Comex - Pax Goldmana
JESSE'S CAFÉ AMÉRICAIN
The deliverable dealer silver inventory at the Comex dropped to another new low of 27.37 million ounces.
If the Comex runs into troubles with a temporary inability to deliver on contracts and approaches a de facto default, most of the regulators and pundits will say they 'never saw it coming.'
Well, here it is.
Hard to miss an almost 70% drop in deliverable inventory like this in a little over two years.
Silver use in healthcare grows exponentially:
The Silver Institute
WASHINGTON (Commodity Online): Silver usage has grown exponentially in medicine and health-related products, notes The Silver Institute based here, which has been tracking its increased usage.
The high efficiency of silver – its effective concentration is in parts per million or less, the difficulty microorganisms have in developing resistance to silver, and its long history of use as an antimicrobial are all highly positive factors for predicting increased growth in the use of products containing silver for healthcare, explained Michael DiRienzo, Executive Director of the Silver Institute. He said that silver’s use in hygiene and medicine is expected to reach over six million ounces by 2015 – up from nearly one million ounces in 2010 – according to a recent Silver Institute report entitled, The Future of Silver Industrial Demand, which represents a fivefold increase.
We Give Up!
John Rubino - SilverBearCafe.com
The idea that there were pain-free solutions to the mountain of debt the world has taken on was always a delusion. But it was one that the leaders of the US and Europe in particular have clung to ferociously. Until now. In just the past few days they've all, it seems, been forced to recognize the futility of their situation, and have simply given up. Consider: Greece
A Greek default has been portrayed as a practical impossibility because it would tear the Eurozone apart and break several of the continent's largest banks. But now that Italy has begun to implode, the EU and ECB have decided that Greece is, relatively speaking, expendable.
Dollar Falls Versus Euro
After S&P Puts U.S. on Review
for Possible Cut
By Candice Zachariahs and Monami Yui - Bloomberg.com
The dollar weakened against most major peers after Standard & Poor’s Ratings Services became the second ratings company this week to say it may downgrade the U.S.'s top credit grade.
The U.S. currency dropped against the euro after S&P said there was at least a 50 percent chance it will lower the AAA rating within 90 days, citing the risk of a stalemate enduring beyond any near-term agreement to raise the nation’s debt ceiling. The yen and Swiss franc extended this week's gains against a majority of their most-traded counterparts as investors sought the safest assets.
Scary Times Ahead
A Fight Broke Out for My Dinner Tab in Greece
by Simon Black - LewRockwell.com
I went to dinner last night in an upmarket area of Thessaloniki. It wasn’t a touristy part of town at all, nearly everyone there was local.
As we walked down a narrow cobblestone path flanked by traditional Greek restaurants, all the various hostesses and proprietors ran out to greet us and pitch their menus.
"We have the freshest seafood!"
"We have the cheapest prices!"
"We offer free drinks and dessert!"
Within seconds, outright calamity ensued with each thrusting menus in our faces, pulling at our shirtsleeves, and shouting over the competition. Then a shoving match… and then finally an all out physical altercation, literally coming to blows over what amounted to a $20 dinner tab.
The Only 6 Choices In Your Russian Roulette Future
By Harley - Dont-Tread-On.me
I've been on a crash course in economics and our monetary and banking systems. It was Don't Tread On Me and sites like it as well as some very close friends that finally got my attention as to the current and truly woeful state of affairs in this country. The saying where "once I was blind,but now I see" has never been more true for me now that I GET IT! The kicker for me was in coming to the conclusion that I really had no choice but to 1) invest heavily in precious metals (first silver, and now in gold), and 2) take active measures to protect myself and my family should the SHTF (prepping). When I methodically looked at all my options, here is the logic train that helped me come to that inescapable conclusion: In the end, we as individuals and families really have only six different options regarding our future economic survival, and indeed, perhaps for the preservation of our very lives.
Executive Order # 13575:
The theft of rural and agricultural lands for UN Agenda 21
By Marti Oakley - PPJGazette
Obama recently signed EO 13575, establishing the White House Rural Council. The council is a list of the most aggressive agencies and departments in the US government. The all inclusive council members represent the very agencies and departments most dedicated to forcing the subjugation of the US to United Nations control. In fact, many of the agencies, departments and organizations listed as Council members are in fact creations of the UN; created for no other purpose than to give the United Nations direct access to the United States.
IMPORTANT! Executive Order 13575 = UN Agenda 21
MillerCoors must pull beer from Minnesota shelves
By Melissa Korn - MarketWatch.com
NEW YORK (MarketWatch) -- Minnesota's government shutdown found an unlikely victim as MillerCoors, a joint venture between Molson Coors Brewing Co. (TAP) and SABMiller PLC (SAB.JO, SBMRY), was told it must remove its 39 brands of beer from shelves across the state because the company's brand license renewals weren't processed before the state's shutdown.
MillerCoors, whose brands include Coors Light, Blue Moon and Miller High Life, said it sent in the necessary paperwork on time and even received notification from the state that it had overpaid. The government shut down on June 30, three days after a check for the correct amount -- $1,170, or $30 per brand-- was received, the company said.
Minnesota Leaders Reach Deal to End State Shutdown
By THE ASSOCIATED PRESS - NYTimes.com
ST. PAUL, Minn. (AP) — Minnesota's Democratic Gov. Mark Dayton and Republican legislators struck a deal Thursday to end a budget impasse that led to the longest state government shutdown in recent history.
The deal came after a three-hour negotiating session that followed major concessions by Dayton. If details are worked out and approved by state legislators, it would end a two-week shutdown.
The two sides agreed on a proposal that would raise $1.4 billion in new revenue, half by delaying state aid checks to school districts and the other half by selling tobacco payment bonds.
15 Examples That Show Many Americans
Have Become So Desperate That They Will Do
Just About Anything For Money
TheEconomicCollapseBlog.com
More Americans than ever are desperate for money and many of them will do just about anything to get it. The crumbling U.S. economy has pushed millions of ordinary Americans to the brink of utter desperation. When it comes time to choose between being able to survive or breaking the law, many people are choosing to break the law. These days it seems like Americans will do just about anything for money. All over the country, there are areas where just about anything that is not bolted down is being stolen. A lot of people have resorted to making money however they can - selling drugs, selling their bodies, shoplifting, invading homes, taking bribes, running credit card scams and even stealing from their own family members. You will have a hard time believing some of the things that you are about to read below. When people have their backs pushed up against the wall, often they find that they are willing to do things that they never imagined that they would do. Things are getting crazy out there on the streets of America, and as the economy continues to decline things are going to get a lot crazier.
More Layoff Carnage: UBS Slashing 5,000 Jobs
By Katya Wachtel - BusinessInsider.com
The layoff carnage is well and truly back on Wall Street. Yesterday, it was revealed that Morgan Stanleywas "running layoff scenarios into several thousand folks."
Now, the Swiss banks are facing similar horrible scenarios.
"UBS is set to cut around 5,000 jobs to save 1 billion Swiss francs... while rival Credit Suisse is planning to axe about 1,000 staff, Swiss newspapers reported on Thursday," according to Reuters.
The firm is planning on shuttering 27 offices in Zurich alone.
Outcasts: Tonight Tens Of Thousands
Of Formerly Middle Class Americans
Will Be Sleeping In Their Cars,
In Tent Cities Or On The Streets
TheEconomicCollapseBlog.com
Economic despair is beginning to spread rapidly in America. As you read this, there are millions of American families that are just barely hanging on by their fingernails. For a growing number of Americans, it has become an all-out battle just to be able to afford to sleep under a roof and put a little bit of food on the table. Sadly, there are more people than ever that are losing that battle. Tonight, tens of thousands of formerly middle class Americans will be sleeping in their cars, even though that is illegal in many U.S. cities. Tens of thousands of others will be sleeping in tent cities or on the streets. Meanwhile, communities all over America are passing measures that are meant to push tent cities and homeless people out of their areas. It turns out that once you lose your job and your home in this country you become something of an outcast. Sadly, the number of "outcasts" is going to continue to grow as the U.S. economy continues to collapse.
Why Are Governments So Stupid?
California may join probe of Wall Street's role in mortgage meltdown New York's and Delaware's investigation could lead to criminal charges against financial executives. 'California was disproportionately harmed by the mortgage crisis, and our homeowners badly need relief,' the state's attorney general says.
By Nathaniel Popper and Alejandro Lazo, Los Angeles Times
Reporting from New York and Los Angeles— California is considering joining New York and Delaware in a wide-ranging investigation into Wall Street's role in the mortgage meltdown that could lead to criminal charges against financial executives.
California Atty. Gen. Kamala Harris met with New York Atty. Gen. Eric Schneiderman on Thursday in San Francisco to discuss cooperating on the investigation, which is already one of the broadest to probe how banks encouraged the financial crisis through the creation of risky financial instruments backed by mortgages.
Why an Economic Downturn Begets a Technological Renaissance
By Eric Fry - DailyReckoning.com
07/13/11 Laguna Beach, California – The Old World is looking older by the day, as most European stock markets fell yesterday for the sixth time in seven days. Here in the New World, the Dow Jones Industrial Average tried to buck the trend, but did not succeed.
Around midday in New York, the Federal Reserve issued fresh assurances that it stands at the ready – if the economy continues struggling – to do even more of what hasn't worked. The Dow jumped about 70 points on the news, but failed to hold its gains. By day’s end, the Dow was down 59 points at 12,447.
According to the newswires, the Dow fell late in the day because Moody’s downgraded Ireland’s credit rating to "junk" – making the Emerald Isle the third of the five PIIGS nations to suffer this particular ignominy. Moody's downgraded Portugal to junk about one week ago and downgraded Greece about two months ago.
Folding a solar cell into an airplane
Imperial Decline:
Multi-Billion-Dollar Terrorists and the Disappearing Middle Class
James Petras - SilverBearCafe.com
The US government (White House and Congress) spends $10 billion dollars a month, or $120 billion a year, to fight an estimated "50 -75 'Al Qaeda types' in Afghanistan ", according to the CIA and quoted in the Financial Times of London (6/25 -26/11, p. 5). During the past 30 months of the Obama presidency, Washington has spent $300 billion dollars in Afghanistan , which adds up to $4 billion dollars for each alleged 'Al Queda type'. If we multiply this by the two dozen or so sites and countries where the White House claims 'Al Qaeda' terrorists have been spotted, we begin to understand why the US budget deficit has grown astronomically to over $1.6 trillion for the current fiscal year.
During Obama's Presidency, Social Security's cost-of-living adjustment has been frozen, resulting in a net decrease of over 8 percent, which is exactly the amount spent chasing just 5 dozen 'Al Qaeda terrorists' in the mountains bordering Pakistan .
Psychology of the Political Class
Mises Daily: Thursday, July 14, 2011 by Frank Chodorov
It is a gross exaggeration to say that all politicians are "crooked." The percentage of dishonesty — the sense in which the derogatory word is used — is no greater among those who engage in politics than it is among merchants, doctors, or farmers. I daresay that corporation officials are more likely to yield to the temptation of an easy dollar than are office holders, simply because only stockholders are affected and they are not likely to make a fuss over minor peculations if they are receiving their dividends regularly. On the other hand, if a newspaperman gets hold of the fact that the female relative of the public official accepted so much as a mink coat from a tax delinquent, the ensuing headlines give the impression that you cannot trust anybody in public life with a piggy bank. This is not true; you most assuredly can.
GUN OWNER DATABASE UNDER EXECUTIVE ORDER 12425 !!!
INTERPOL TO SPY ON AMERICANS !!!
DoD: 24,000 files swiped in March from military contractor systems
By Larry Dignan - ZDNet.com
Department of Defense Deputy Secretary William Lynn said that 24,000 files were taken in March from military contractor systems. That data leakage is increasingly common in the military complex. The good news? The DoD has a plan to fix its defenses.
Lynn didn’t provide further details on the attack or the contractor. On Thursday, the DoD released its strategy for operating in cyberspace.
The strategy boils down to:
Treat cyberspace as a domain to organize, train and equip the military.
Deploy new defense operating concepts to protect military systems.
Partner with government departments and the private sector.
Work with allies to boost security.
Leverage U.S. technical prowess and innovation.
Israel Bans Boycotts Against the State
By ISABEL KERSHNER - NYTimes.com
JERUSALEM — The Israeli Parliament on Monday passed contentious legislation that effectively bans any public call for a boycott against the state of Israel or its West Bank settlements, making such action a punishable offense.
Critics and civil rights groups denounced the new law as antidemocratic and a flagrant assault on the freedom of expression and protest. The law’s defenders said it was a necessary tool in Israel’s fight against what they called its global delegitimization.
Passage of the law followed a string of efforts in the rightist-dominated Parliament to promote legislation that is seen by the more liberal Israelis as an erosion of democratic values.
Tajikistan, A Frail Nation-State Amidst the New Great Game
Written by John Daly
U.S. involved in an updated version of the 19th century's "Great Game" for mastery in Eurasia over the debris field of the former USSR.
Not surprisingly, Moscow regards its former colonial fiefdoms as part of its "near abroad," a "Monroeskii Doktrin" variant of U.S. interest in Central and Latin American, where a priori interests rule.
U.S. interests in the post-Soviet Eurasian space since 1991 have fixated first on the region’s immense but underdeveloped energy resources, while the post-9/11 environment added a second dimension – military bases, handily useful for monitoring both the Russian bear and a rising China.
"Marxism in America" by Lt. Gen. (Ret.) W.G. Boykin - OAK
The Basics of Shariah Law Lt. Gen. (Ret.) W.G. Jerry Boykin
"The Church Must Rise Up" by Lt.Gen. (Ret.) W.G. Jerry Boykin
Fed's Ben Bernanke opens door to further economic stimulus Federal Reserve Chairman Ben Bernanke tells Congress that he expects no quick improvement in the weak job market, and says the central bank is prepared to take steps to aid the economy if necessary. But he suggests nothing is imminent.
By Don Lee, Los Angeles Times
Reporting from Washington— Federal Reserve Chairman Ben S. Bernanke sought to reassure lawmakers and the nation that the central bank stood ready to spring into action if the economy stumbled further as the deadline loomed on the nation's debt limit, Europe's financial problems worsened and U.S. job growth stagnated.
The Fed chief's remarks to Congress came hours before Moody's Investors Service Inc. put its top rating of U.S. debt on review for possible downgrade, an action Moody's previously said it would take in mid-July if there was no significant movement on raising the debt ceiling.
As Talks Stall, New Debt Plan Offered McConnell Breaks GOP Ranks, Says the President Should Be Given Authority to Raise the Borrowing Limit on His Own
By CAROL E. LEE, DAMIAN PALETTA, NAFTALI BENDAVID - WSJ.com
Negotiations over a deficit-reduction agreement spiraled downward Tuesday as the White House and congressional leaders dug in even as anxiety mounted that they could wait too long to reach a deal to avoid a government default.
In one sign that top leaders worry they won't reach a deal in time, Senate Minority Leader Mitch McConnell (R., Ky.) unveiled a proposal that would allow President Barack Obama to raise on his own the federal borrowing limit by $2.4 trillion in three installments before the end of 2012, unless two-thirds of Congress votes to block it.
Debt-Limit Harakiri Mitch McConnell isn't selling out Republicans.
WSJ.com
Republican Senate leader Mitch McConnell said yesterday he's concluded that no deal to raise the debt ceiling in return for serious spending restraint is possible with President Obama, and who can blame him? We've never thought the debt ceiling was the best leverage for a showdown over the entitlement state, and now it looks like Mr. Obama is trying to use it as a way to blame the GOP for the lousy economy.
This may have been the President's strategy all along: Take the debt-limit talks behind closed doors, make major spending cuts seem possible in the early days, but then hammer Republicans publicly as the deadline nears for refusing to raise taxes on business and "the rich."
Obama "Abruptly" Walks Out Of Debt Negotiations
Submitted by Tyler Durden - ZeroHedge.com
OBAMA: "THIS MAY BRING MY PRESIDENCY DOWN BUT I WILL NOT YIELD ON THIS" -- REPUBLICAN AIDE; Perhaps Obama may want to put the country ahead of his own interests this one time...
Here is the relevant section in the 14th Amendment that the Constitutional scholar is likely about to invoke. The bolded section is what is largely being ignored.
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
Odd how the debt inccured for payment of pensions is being nicely trampled to make way for debt incurred for payment of Federal worker bonuses...
Obama Owns the Debt-Ceiling Fiasco It doesn't help that he's declared high-speed rail and even unspent stimulus funds as untouchable.
By KARL ROVE - WSJ.com
President Barack Obama and Congress face a mess if the federal government hits the debt ceiling Aug. 2. The Bipartisan Policy Center, a Washington think tank, projects that the government will receive $172 billion in revenues between Aug. 3 and Aug. 31, but it is on the hook to spend $306 billion, leaving a shortfall of $134 billion.
On Tuesday, Mr. Obama told Scott Pelley of CBS News that "there may simply not be the money in the coffers" to issue Social Security, veterans and disability checks after Aug. 3.
Not so. The $172 billion in revenues collected over the rest of the month can pay the $29 billion interest charges on the national debt, Social Security benefits ($49 billion), Medicaid and Medicare ($50 billion), active duty military pay ($2.9 billion), Department of Defense vendors ($31.7 billion), IRS refunds ($3.9 billion), and about a quarter of the $12.8 billion in unemployment checks due that month.
Debt ceiling: Moody's puts U.S. on notice
By Jeanne Sahadi @CNNMoney
NEW YORK (CNNMoney) -- The public pressure on lawmakers to raise the debt ceiling was ratcheted up Wednesday when a major rating agency said it would put the sterling bond rating of the United States on review for possible downgrade.
Moody's Investors Services said it had initiated the review because of "the rising possibility" that Congress will fail to raise the debt ceiling by Aug. 2 -- something that could lead to a U.S. default on its debt.
Moody's Places US Government Bond Rating
on Review for Possible Downgrade
CalculatedRisk.com
From Moody's: Moody's Places US Aaa GovernmentBond Rating and Related Ratings on Review for Possible Downgrade
Moody's Investors Service has placed the Aaa bond rating of the government of the United States on review for possible downgrade given the rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on US Treasury debt obligations. On June 2, Moody's had announced that a rating review would be likely in mid July unless there was meaningful progress in negotiations to raise the debt limit.
Moody’s Places U.S. on Review for Downgrade As Debt Talks Stall
By John Detrixhe - Bloomberg.com
Moody’s Investors Service put the U.S. under review for a credit rating downgrade as talks to raise the government’s $14.3 trillion debt limit stall, adding to concern that political gridlock will lead to a default.
The Aaa ratings of financial institutions directly linked to the U.S. government, including Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks, were also put on review for cuts, Moody’s said in a statement today.
The U.S., rated Aaa since 1917, was put on review for the first time since 1995 on concern the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes even though the risk remains low, Moody’s said. The rating would likely be reduced to the Aa range and there is no assurance that Moody’s would return its top rating even if a default is quickly cured.
Debt-ceiling talks continue as Moody’s warns Boehner on U.S. default :'Nobody wants to go there'
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — A rare showing of praise for a political rival was joined by a warning from a rating agency Wednesday as the deadline to raise the debt ceiling grows nearer.
The rating agency Moody’s Investors Service late Wednesday said it placed the U.S. government’s triple-A bond rating on review for possible downgrade because it fears “a small but rising risk” of a short-lived default. Read more in After Hours coverage
The politicians who are in position to prevent a default meanwhile inched forward on a deal to raise the $14.3 trillion debt ceiling and reduce the deficit.
Greece Gets World’s Lowest Rating From Fitch
in Catch-up Downgrade to CCC
QBy Lorenzo Totaro and Marcus Bensasson - Bloomberg.com
Greece's credit rating was cut three levels to Fitch Ratings' lowest grade for any country in the world as the company followed rivals and said that a default is a "real possibility."
The move to CCC from B+ "reflects the absence of a new, fully funded and credible" program by the International Monetary Fund and the European Union, the ratings company said yesterday in a statement in London. It also reflects "heightened uncertainty surrounding the role of private creditors in any future funding, as well as Greece's weakening macroeconomic outlook."
German Banking Expert on Euro Crisis 'Punishing Italy Is a Rational Thing to Do'
Spiegel.de
Italy is currently under massive pressure on the finance markets. Are greedy speculators to blame? Not at all, argues German banking expert Hans-Peter Burghof. In an interview with SPIEGEL ONLINE, he explains why he considers the markets' response to be entirely reasonable. SPIEGEL ONLINE: The markets are yet again in turmoil, the euro on Monday fell considerably and the risk premiums on Italian state bonds have climbed to a record level. How dangerous has the situation become for the country? Burghof: What Italy is experiencing at the moment is a massive shot across the bow. But it was also overdue. The country is not innocent when it comes to its decline. In particular, it was Prime Minister Silvio Berlusconi's reckless chatter that led to this market reaction. SPIEGEL ONLINE: In what way? Burghof: Berlusconi publicly questioned the austerity drive of his finance minister, Giulio Tremonti, the very man who stands most credibly for a solid Italian finance policy.
Italy teeters on edge of escalating debt crisis
By Anthony Faiola, Howard Schneider - Sidney Herald News
LONDON: Europe's debt crisis is on the verge of engulfing its biggest victim, Italy, the world's seventh-largest economy, whose size could thwart any international attempt to bail it out.
Italy's woes have generated investor panic amid concerns of political infighting in Rome over budget cuts. More than anything else, investors appear to be losing confidence in the ability of bickering European leaders to come up with a lasting solution to the 20-month-long debt crisis, triggering a spread of the region's financial woes from small nations such as Greece to the far larger economies of Spain and now Italy.
Ireland's debt junked as euro crisis spreads
By Michael Day in Milan - Independent.co.uk
Europe's debt woes escalated yesterday as Ireland's credit rating was cut to junk status, and the crisis threatened to engulf its biggest victim yet in Italy. Moody's Investors Service cut Ireland's ratings by one notch to Ba1 from Baa3 and kept a negative outlook.
It added that there was a danger that the country will need more bailout aid in late 2013 when the current European Union-International Monetary Fund support program ends.
Italy and Spain both insisted last night that their economies, and with them the future of the euro, were secure from the debt crisis that has already floored Greece.
Ireland downgraded to 'junk' in spiralling euro-crisis Euro-crisis: France could be the next in line after Italy and Spain
By VALENTINA POP
EUOBSERVER / BRUSSELS - US-based credit rating agency Moody's on Tuesday (11 July) downgraded Ireland's debt to junk status, amid growing market concerns about the stability of the eurozone as the debt crisis reaches Italy and Spain.
Citing the "growing possibility" that Ireland may need a second bailout at the end of 2013 and the "increased" likelihood that this bailout will require private sector participation, Moody's downgraded the country's rating by one notch to Ba1 status - meaning that its bonds are now considered "non-investment grade" and pensions funds, for instance, are no longer allowed to purchase them.
Dominoes
Published by Ian R. Campbell - StockPortalResearchBlog.com
On Monday morning, in advance of seeing any report arising from the emergency meeting called by the European Council President, I read two articles that caused me to focus on the role Rating Agencies might play in a Sovereign Debt driven financial crisis. The two articles are 'Uh Oh – Italy Is Coming Apart Like A 20 Dollar Suit' – reading time 3 minutes, and 'Italy and Spain must pray for a miracle' – reading time 4 minutes.
The articles report that on July 8 investors began selling Italian financial assets, and that Italy’s five largest banks have as a group lost 27% of their value since January 1. Italian national debt is said to be 120% of Italian GDP. There is a maxim that I have drawn from all that I have read about country debt, being that a country’s ability to deal with high debt/GDP levels is a direct function of interest rates. Simply stated, the lower the interest rate on a country’s debt, the greater is that country’s ability to maintain a high relationship of debt to GDP. Reciprocally, the higher the interest rate on a country’s debt, the less able is that country’s ability to maintain a high relationship of debt to GDP.
The World Says China Will Overtake America But not many are cheering.
By ANDREW KOHUT - WSJ.com $$
[free article pass - Google the title; follow link]
In the past decade, anti-Americanism grew around the world. This was in response to concerns about the unchecked global power of the U.S., when it invaded Iraq in the face of very wide international opposition. In sharp contrast, today America is seen as on its way to losing its status as the dominant global superpower.
A new Pew Global Attitudes survey released today finds that while the U.S. is better regarded around the world now than it was in the Bush years, in 15 of 22 nations surveyed most say that China either will replace or already has replaced America as the world's "leading superpower." This view is especially widespread in Western Europe, where at least six in 10 respondents in Britain, France, Germany and Spain see China eventually overtaking the U.S.
Ron Paul vs Bernanke: Is Gold Money? - July 13, 201
Gold hits new high,
dollar sinks as Bernanke hints at more stimulus
By Tom Petruno - LATimes.com
Commodity markets are flying Wednesday as investors and traders exhibit a Pavlovian-like response to the idea of more Federal Reserve stimulus for the economy.
Gold rose to a new record high, topping $1,585 an ounce, and silver also rocketed. Of the 19 commodities in the ThomsonReuters/Jefferies CRB index, just copper and sugar were lower.
Fed Chairman Ben S. Bernanke, testifying before Congress, made clear that the central bank could -- not would, but could -- provide more stimulus for the economy if the outlook worsened.
That was good enough for investors and traders who figure raw materials could be big beneficiaries if the Fed decides to try to pump more money into the financial system.
A Dramatic Juncture for the US Economy
BY RICHARD RUSSELL - FinancialSense.com
Up to now it's been obvious that the "safe haven" money has gone into the Dow, gold, Treasuries and the dollar. But Monday the Dow was the "odd man out". Why? I wonder, was the Dow left out in the cold? Could it be that the economy is starting to deteriorate even further? Could it be that the stock market is following in the footsteps of the great stock market rally of 1929-1930 -- at a time when the economy declined all during the great advance?
As matters stand, I'm concentrating on RISK. The US dollar and Treasuries have been doing quite well, but I see risk in both of them (as does Bill Gross of giant PIMCO). Today there's risk in everything from commodities to T-bills, but I sense that the least risk lies in gold.
Gold Thoughts
BY NED W SCHMIDT - FinancialSense.com
Coins always have to sides. We all are familiar with well-worn story of heads I win and tails you lose. Maybe this time the coin may be far more desirable. Perhaps it is now heads we win, tails the politicians lose. Maybe the markets are telling us that indeed the era of Keynesian socialism is now becoming part of history. Another chapter in the book of dead and failed economic and political ideologies may be in the process of being written.
June 2010 was Peak. Down 100 tonnes since then. [see chart]
In the above chart of GLD’s holdings of Gold we can find no rush to buy policies to insure against possible debt defaults by Greece, Spain, Portugal, Italy, U.S. et al, until this week. On Tuesday, panic buying developed on the Street. Such panic buying by the lemmings of the Street never happens at a bottom.
How China Intends to Take Down the Comex
by Dominique de Kevelioc de Bailleul, Beacon Equity.com:
Andrew Maguire, the man who in Nov. 2009 told U.S. authorities of a silver manipulation scheme in progress led by the Fed through its primary dealers JP Morgan and HSBC, said China’s new Pan Asia Gold Exchange will overwhelm the manipulators in the gold and silver market and create a historic short squeeze in those markets.
In an interview with King World News, Maguire said he believes the rapid rise of China’s middle class will force the pricing mechanism in the precious metals markets to shift to the PAGE, and away from the Comex, where the manipulation continues.
"The launch of this new gold and silver exchange has flown under the radar, but certainly has my attention," said Maguire. "I firmly believe we are marking a pivotal point that will in very short order affect current precious metals price discovery dynamics."
CHINA OPENS NEW GOLD EXCHANGE:
PAN ASIA GOLD EXCHANGE, AN ALTERNATIVE TO U.S.COMEX
MediaTakeout.com
This morning London whistleblower Andrew Maguire told King World News that the launch of the new gold and silver exchange in China will destroy the remaining gold and silver shorts. Maguire stated, "The launch of this new gold and silver exchange has flown under the radar, but certainly has my attention. I firmly believe we are marking a pivotal point that will in very short order affect current precious metals price
discovery dynamics. We now have an additional factor to be vended into the supply demand equation. This factor will ultimately destroy the remaining short positions in both gold and silver."
Maguire continues: "China is keen to diversify their cash holdings and is also encouraging citizens to make investments in gold and silver. The Pan Asia Gold Exchange is another step in this direction by opening up ease of access to physical gold and silver to their bank
customers. This physical backed exchange is going to be a big game-changer. Just look at the scale of this to get an idea of how massive this game-changer will be, The Agricultural Bank of China has over 320 million retail customers and 2.7 million corporate customers and has integrated its customer account information system with this platform.
Gold hits record high on Bernanke, euro worries
By Frank Tang - Reuters
Gold prices hit a record $1,580.70 an ounce on Wednesday as concerns over the euro zone debt crisis deepened, and after minutes to the Federal Reserve's June meeting suggested some members were pondering the need for additional monetary easing.
Spot gold was up 0.8 percent at $1,578.10 an ounce at 1359 GMT. It has risen 11 percent so far this year and has more than doubled in price in the last four years.
Gold is set for an eighth consecutive day of gains, something it has not achieved since mid-October 2006, when it rose for nine days in a row.
US Mint to release final 5-oz Silver Bullion Coins
CommodityOnline.com
(Kitco News) - The U.S. Mint is preparing to release the fifth and final five-ounce Silver bullion coin in its 2011 series, the Mint said Tuesday.
It will begin accepting orders from participating silver authorized purchasers on July 18 for the Chickasaw National Recreation Area, the fifth coin in the 2011 America the Beautiful silver bullion coin series. The coins will be offered on an allocation basis, divided equally among participating silver authorized purchasers, which is how the Mint distributes its bullion coins.
The Mint has been issuing the 2011 America the Beautiful silver bullion coin program in substantially higher quantities than it did for the 2010 program. An initial quantity of 126,700 coins for the Chickasaw National Recreation Area issue will be released, the Mint said in a memo to its authorized purchasers.
Vladimir Putin Calls Bernanke A Hooligan,
Angry At American Money Printing
Tyler Durden, ZeroHedge.com
Who would have thought that Ron Paul's ideological ally in his quest to take down the Chairsatan would be none other than the Russian dictator-in-waiting (or rather, in actuality), Vladimir Putin. In a speech before the of economic experts at the Russian Academy of Sciences, the Russian prime minister had the following to say: "Thank God, or unfortunately, we do not print a reserve currency but what are they doing? They are behaving like hooligans, switching on the printing press and tossing them around the whole world, forgetting their main obligations." What appears to have angered the former KGB spy is the end of QE2. According to RIAN: "Putin's comments came in the wake of the completion of the US' quantitative easing (QE) 2 program on June 30, in which the Federal Reserve bought $600 billion worth of its Treasury bonds. The Fed's first round of QE, which ended in March last year, amounted to less than half the size of QE2." We can't wait to hear what expletive Putin will usher once Bernanke launches QE3.
Bernanke: Fed will help if economic weakness persists Fed chief lays out 3 options to boost econom
including another round of bond buying
msnbc.com news services
WASHINGTON — Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank is ready to ease monetary policy further if the economy weakens and inflation moves lower, suggesting policymakers are actively mulling further stimulus.
"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying aneed for additional policy support," Bernanke said in prepared testimony before the House of Representatives Financial Services Committee.
Bernanke laid out three options the central bank would consider. He said the Fed could launch another round of Treasury bond buying, the third such effort since 2009. It could cut the interest paid to banks on the reserves they hold as a way to encourage them to lend more.
US Default Inevitable: Fund Manager
By: Shai Ahmed - Associate Web Producer, CNBC.com
A U.S. default isn't a matter of "if" but "when," David Murrin, chief investment officer at Emergent Asset Management, told CNBC.
"It's inevitable that the U.S. will default—it's essentially an empire which is overextended and in decline—and that its financial system will go with it," he said.
The question is: Does the U.S. default when it is forced to by the outside world, probably the Chinese, or does it take the option to default on its own terms in such a way that it may have a strategic advantage, Murrin said.
Republicans and Democrats are currently locked in a debate on how to cut the U.S. budget deficit, and on whether the $14.3 trillion debt ceiling should be raised. Both parties need to come to a consensus by Aug. 2, otherwise the country will be in a state of technical default.
Judge Napolitano on the 14th Amendment,
Raising the Debt Ceiling & Big Government LYING TO US
The Road to Perdition
BY DAVID GALLAND - FinancialSense.com
David Galland: You were involved with Harry Browne during the last great inflation in the U.S. How does the increase in the money supply that kicked off in 2007-2008 compare in terms of scale to what went on leading up to the inflation in the '70s?
Terry Coxon: The comparison is pretty muddled. In terms of the M1 money supply – the total of checkable deposits and hand-to-hand currency – we haven’t yet gotten near the persistently high growth rate that occurred in the 1970s. But the growth in the monetary base has been far more rapid than what happened in the 1970s. There is some time delay between growth in the monetary base and growth in M1, but to make the picture really cloudy, I'm afraid the comparison turns out not to be very useful. Unlike in the 1970s, the Federal Reserve is now paying interest to banks on their reserves.
In other words, the effect is that much of the increase in the monetary base gets locked up and sequestered because banks want to earn the interest on the reserves rather than lending the reserves out or buying investments and increasing the money supply.
Frustration Bubbles Up in Minnesota With No Sign of Progress on Shutdown,
Governor Finds Sympathetic Audience —
But One That Wants a Compromise
By AMY MERRICK And JACK NICAS - WSJ.com
ST. CLOUD, Minn.—Gov. Mark Dayton headed 75 miles northwest of the deadlocked capital Tuesday to talk about special-education funding before a largely sympathetic audience. But frustration over the longest state shutdown in recent U.S. history—12 days so far—was never far from view.
Jim Golombecki, who repairs vending machines stocked by legally blind workers as part of a state program, was among the furloughed state workers in the standing-room-only crowd of about 150 at Apollo High School.
"I think Dayton's got to budge a little bit," said Mr. Golombecki, 57 years old. "I don't totally disagree with him, but the state's got to go back to work. I've lost enough wages to cover a house payment, so I'm having to scrape."
Falling Home Equity Spurs Fear of Strategic Default
By: Diana Olick - CNBC Real Estate Reporter
Yesterday a lot of folks, including myself, were slightly incensed at the announcement by mortgage insurer PMI that it is launching a pilot program offering cash bonuses to borrowers who stay current on their mortgage payments.
I went on a tirade about how ridiculous it is to pay people to meet their legal, contractual obligations, how it enables bad behavior. Don't get me wrong, I still believe that.
Today, however, I learned something that made me understand a bit more why the mortgage insurers, and the lenders and investors participating in a similar bonus program, are running so scared:
Social Security: Why Seniors Are Mad as Hell
BySheryl Nance-Nash - DailyFinance.com
Today, Fran Liotta has two harsh words for the U.S. government, "unconscionable, outrageous!"
The 77-year-old retiree says she had to read President Obama's warning twice. She couldn't believe that the federal government was saying it couldn't guarantee that Social Security checks will be mailed Aug. 3 if Congress doesn't take action on the debt ceiling.
"I won't be able to pay my rent or eat if I don't get my check. They can't work this out on the backs of senior citizens. Raise the taxes on the wealthy. I don't know what I will do if this happens," says Liotta.
What's Behind the Dismal Jobs Picture
By: Patti Domm - CNBC Executive News Editor
An increase in layoffs may be the culprit behind the weak employment picture, rather than a decrease in hiring.
Goldman Sachs economists, in a note, point to data from the Bureau of Labor Statistics that shows the lack of jobs growth in May was caused mainly by more layoffs, rather than a reduction in hiring. Monthly employment data released Friday was revised to show that a total of just 25,000 non farm payrolls were added in May, and that just 18,000 were added in June.
They note the Job Openings and Labor Turnover Survey report showed that during May, hiring increased by 64,000 while non-layoff separations, or people quitting positions or retiring increased by 39,000. "Private payroll growth actually decelerated by 168,000 (from 241,000 to 73,000) because of an increase in layoffs: private sector gross firing activity increased by 194,000 in May, the largest month-over-month increase in a year," they wrote.
'Ghetto loans':
Obama's Eric Holder forces banks to lower standards for credit
By Devonia Smith - Examiner.com
From released court documents, today, we learn that the Obama administration is bringing back "Ghetto loans,", a term coined by Wells Fargo in the 80s for subprime loans made to minority communities whose bad credit kept them from qualifying. At that time, Wells Fargo employees also had another derogatory label for those who qualified for the "Ghetto loans" calling them "The Mud People", resulting in a lawsuit by the NAACP.
However court documents reveal that the loans are being resurrected and will now include even including "public assistance" as "income" which begs the question: If banks are again forced to give loans to folks with bad credit and incomes that don't qualify, will the racial slurs follow? Which comes first, the loans or the slurs?
Where Have America's Jobs Gone? Hiring at McDonald's;
Wireless Networks' Job-Killing Effect;
One Machine Doing The Work of Three
By JUSTIN LAHART And JAMES R. HAGERTY - WSJ.com
There are many reasons U.S. companies give for their lack of robust hiring—from weak consumer spending to uncertainty over the direction of government policies on debt and spending.
But a closer look at hiring provides a more nuanced picture. Some industries have significantly boosted employment over the past year while others continue to shed workers. To be sure, even those adding jobs are hiring far fewer than would be needed to put America's 14.1 million unemployed back to work.
Drought in 14 states means disaster for many Desperate ranchers likely to cull cattle herds —
which could raise meat prices
By Kim Severson and Kirk Johnson - MSNBC.com
COLQUITT, Ga. — The heat and the drought are so bad in this southwest corner of Georgia that hogs can barely eat. Corn, a lucrative crop with a notorious thirst, is burning up in fields. Cotton plants are too weak to punch through soil so dry it might as well be pavement.
Farmers with the money and equipment to irrigate are running wells dry in the unseasonably early and particularly brutal national drought that some say could rival the Dust Bowl days.
"It's horrible so far," said Mike Newberry, a Georgia farmer who is trying grow cotton, corn and peanuts on a thousand acres. "There is no description for what we've been through since we started planting corn in March.
Repeal of Light-Bulb Mandate Fails to Pass House
By RYAN TRACY - WSJ.com
WASHINGTON—A measure to repeal a 2007 federal law that would push many traditional incandescent light bulbs off the market failed to win two-thirds support needed to pass in a House vote Tuesday.
A 233-193 majority of the House backed the measure proposed by Rep. Joe Barton (R. Texas), would have repealed a federal mandate that light bulbs meet certain efficiency standards by next year. But the bill was brought up under a procedure requiring that it receive two-thirds vote for passage.
The debate over the light bulb standards has inflamed conservative commentators and a swath of Americans who hold it up as a symbol of government overreach. The standard was part of an energy law signed in 2007 by President George W. Bush that received support from many Republicans at the time. Now a majority of House Republicans want to walk it back.
Ron Paul: 'I don’t think I was cut out to be in politics'
By Tony Pierce - LATimes.com
Ron Paul was an accidental congressman, the long-time Texas conservative and current GOP presidential hopeful said Wednesday, making his decision to retire from Congress "not too difficult."
"I don’t think I was cut out to be in politics. I sort of won by accident," Paul, 75, told the Fox Business Network in an interview scheduled to air Wednesday night. "When I was here for four terms early on, I was anxious to go home and go back to medicine. I have been pushing hard to hang around and do my best."
Paul said that his descion to not seek reelection to Congress while simultaneously taking his third stab at president was rooted in his experience in 2008 when he lost the GOP nomination to Sen. John McCain.
"I did that four years ago and I think it deserved some criticism. I think you should only run for one thing. One way or another, I am not going to stay in the House of Representatives,” Paul said.
Robin Hood in Reverse
By William Pfaff - Truthdig.com
By far the strangest thing about the American debate concerning national economic policy, currently concentrated on whether a law lifting the present limit on the deficit will or will not be passed, is that it has been conducted without discussion of the largest item in the budget. This is the aggregate cost of running military interventions of one or another kind in Afghanistan, Pakistan, Iraq, Libya, Somalia and sundry other unhappy and unlucky sites in the non-Western world, and that includes the global program of illegal individual assassinations by drones or dedicated military or civilian killer teams—all in democracy’s name. Cut that, even merely its blatant excesses, and the budget problem would disappear.
Obama's Secret Wars
How Our Shady Counter-Terrorism Policies
Are More Dangerous Than Terrorism Obama should be held accountable for vastly expanding the military establishment's worldwide license to kill.
By Fred Branfman - AlterNet.org
Although President's Obama's partial Afghan troop withdrawal announcement has received more attention, his June 29 "National Strategy for Counterterrorism" is of far greater long-term significance. This remarkable document states that the U.S. government intends to "disrupt, dismantle, and eventually defeat al-Qa'ida and its affiliates and adherents," in the following "areas of focus": "The Homeland, South Asia, Arabian Peninsula, East Africa,Europe, Iraq, Maghreb and Sahel, Southeast Asia (and) Central Asia."
This assassination strategy is already operational in six Muslim countries with a combined population of 280 million: Pakistan, Afghanistan, Iraq, Yemen, Somalia and Libya, which has become a laboratory experiment for urban drone assassinations. The London Sunday Times reported a year ago that "President Obama has secretly sanctioned a huge increase in the number of US special forces ... with American troops now operating in 75 countries." There are presently 60,000 Special Operations forces worldwide, with 7,000 U.S. assassins unleashed upon Afghanistan and 3,000 in Iraq. Lt.-Col. John Nagle (ret.), an enthusiastic assassination supporter, has correctly called these operations "an almost industrial-scale counterterrorism killing machine."
The GOP’s Sick Priorities
By Robert Scheer - Truthdig.com
How deceptive for politicians to stress "entitlements" when they talk about gutting Social Security and Medicare, two programs long paid for by their beneficiaries. The Republicans make it sound as if they're doing us a favor, cutting government waste by seeking to strangle America's two most successful domestic programs. And now Barack Obama seems poised to join their camp in undermining the essential lifeline for most of the nation's seniors, many of whom lost their retirement savings in the banking meltdown.
These threatened programs are not government handouts to a privileged class, like defense contractors and bailed-out bankers, who do feel eminently entitled to pig out at the federal trough. On the contrary, Social Security and Medicare have been funded by a regressive tax that falls disproportionately on working middle-class income earners, while caps in the system leave the wealthy—most notably the hedge fund hustlers who helped cause today's economic crisis—largely untaxed.
CIA Veteran Robert Baer Warns That Israel Likely to Attack Iran
Truthdig.com
Robert Baer, the veteran CIA operations officer whose book was the basis for the film “Syriana,” says an Israeli attack on Iran is likely and warns that the U.S. could be drawn into yet another conflict. [listen to radio briefing]
Soldier Suicides and the Politics of Presidential Condolences
By Amy Goodman - Truthdig.com
President Barack Obama just announced a reversal of a long-standing policy that denied presidential condolence letters to the family members of soldiers who commit suicide. Relatives of soldiers killed in action receive letters from the president. Official silence, however, has long stigmatized those who die of self-inflicted wounds. The change marks a long-overdue shift in the recognition of the epidemic of soldier and veteran suicides in this country and the toll of the hidden wounds of war.
The denial of condolence letters was brought to national prominence when Gregg and Jannett Keesling spoke about the suicide of their son, Chancellor Keesling. Chance Keesling joined the Army in 2003. After active duty in Iraq, he moved to the Army Reserves, and was called back for a second deployment in April 2009. The years of war had taken a toll on the 25-year-old. As his father, Gregg, told me: "He was trained for the rebuilding of Iraq. He was a combat engineer. He operated big equipment and loved to run the big equipment. Finally, he was retrained as a tactical gunner sitting on top of a Humvee. Because there was really very little rebuilding going on."
Syrian opposition tells EU that Assad will fall in 'weeks'
MAEBH MCMAHON AND ANDREW RETTMAN
EUOBSERVER / BRUSSELS - A leading Syrian dissident has told EU institutions the days of Syrian President Bashar Assad are numbered. But there is little the union can do to influence events.
"In maybe a couple of weeks, we will be the winners and the regime will fall down - they are finished now," Hatham Maleh - a 79-year-old lawyer, human rights activist and former prisoner of conscience - told EUobsever in Brussels on Wednesday (12 July).
Putting numbers on the violence, he said Assad's forces have killed 2,000 people, imprisoned over 15,000 and driven another 15,000 out of the country. About 1,500 people remain unaccounted for and there are 3,000 tanks deployed across Syria.
------- exposing the new world order -------
Adrian Salbuchi
Understanding global politics, govenments of the rich, fundamentialist, racist political ideology to be imposed upon a nation state - Zionism (not Judiasm or Jewish people), and history of Argentina.
Just what is the federal debt ceiling? President Obama and Congress are tussling over how to strike a deal to raise the federal debt ceiling. But what does the term 'debt ceiling' mean -- and what would happen if no deal is reached? -- By a Times staff writer - LATimes.com Question: Just what is the federal debt ceiling?
In 1917, as the U.S. entered World War I, Congress authorized the Treasury to issue long-term bonds to finance the war, but placed a limit on the amount of debt that the government could issue. That limit, known as the debt ceiling, has been raised repeatedly -- and lowered a few times -- since then. Congress often balks at raising the limit, and the confrontations are always worse when control of the government is divided between the two parties. The limit currently stands at $14.3 trillion dollars -- a ceiling that the government reached in May.
US Federal Reserve faces split if economy fails to pick up The Federal Reserve risks a split over what to do should the US economy fail to regain momentum during the rest of the year, minutes of its last meeting suggest.
By Richard Blackden - Telegraph.co.uk
The minutes of June's gathering of the Federal Open Market Committee (FOMC) – the body that sets interest rates in the US – show that some officials believe fresh stimulus may need to be considered while others estimate that the risk of stoking inflation is now too high for such actions.
The FOMC last month ended its controversial policy of quantitative easing, which saw the central bank buy $600bn (£377bn) of government bonds from banks and insurance companies in an effort to keep long-term interest rates low.
Ben Bernanke, the chairman of the Fed, indicated in April that a further bout of QE would risk triggering inflation.
Fed: The Recovery Has Stalled, but We Won't Help What we can learn from new details released Tuesday on the central bank's June meeting
By Daniel Indiviglio - TheAtlantic.com
The Federal Reserve just isn't sure what's going on. Although the minutes from its June meeting make some broad assertions about the U.S. economy, the economists appear to be squinting at a future clouded by uncertainty. Rather than dwell on any one thing the Fed concludes, here are ten takeaways from the discussion notes released Tuesday afternoon. 1. The Recovery Has Softened
We already knew this, but the Fed affirms our fears. It cites that pretty much every sector was having trouble in the second quarter, from housing to retailers to government to industrial firms. Its economists remain adamant that the recovery is moving forward, they just believe that the pace has weakened due to transitory factors. They didn't expect this, which is why their projections weakened.
Fed Officials Divided on Further Stimulus
By Joshua Zumbrun and Jeannine Aversa - Bloomberg.com
Federal Reserve policy makers disagreed on whether additional monetary stimulus will be needed even if the outlook for economic growth remains weak, minutes of their meeting last month showed.
"A few members noted that, depending on how economic conditions evolve, the committee might have to consider providing additional monetary stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run," theFederal Open Market Committee said in the minutes of its June 21-22 meeting, released today in Washington.
"On the other hand, a few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant” the FOMC “taking steps to begin removing policy accommodation sooner than currently anticipated."
Federal Reserve Needs QE3 to Boost Economic Growth,
Berkeley’s DeLong Says
By Joe Ragazzo and Tom Keene - Bloomberg.com
The Federal Reserve should engage in another round of quantitative easing as growth in the U.S. economy remains slow and inflation concern remains low, according to Bradford DeLong of the University of California at Berkeley.
"I don't see any argument against QE3," Delong said during an interview on Bloomberg Television's "Surveillance Midday" with Tom Keene. "The worry is always that it will destabilize inflation expectations, that they’ll lose their anchor, and yet when you look out as far as you can at the prices of the TIPS and of the 30-year Treasuries, you see no sign at all that there's been any loss of confidence that the Fed will keep inflation under control."
Fed chairman Bernanke faces firestorm
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- Federal Reserve Chairman Ben Bernanke heads to Capitol Hill this week in the center of many storms swirling around Washington and Wall Street.
The debate over whether to raise the U.S. debt ceiling rages in Washington.
Worries over the risk of European sovereign debt default are pummeling stocks on Wall Street.
"He'll definitely have a full plate," Dean Baker, co-chairman of the Center for Economic and Policy Research, said of the Fed chairman. "Obviously these are all in his purview."
The question and answer period that follows Bernanke's remarks is likely to focus on those hot-button topics.
Bernanke 'Lays Down Law'
on Fed Public Statements Before Policy Meetings
By Jeannine Aversa - Bloomberg.com
Federal Reserve Chairman Ben S. Bernanke offered this communications tip to his central bank colleagues: Watch what you say.
The Fed, in a document released today, provided some parameters on talking about the business of the central bank.
The guidelines called for Fed policy makers to refrain from characterizing the views of other members of the Federal Open Market Committee, the central bank's main decision-making group, and from publicly discussing the contents of meetings beyond what is eventually published in minutes of the closed-door sessions.
The guidelines also called on Fed officials to observe a "blackout period" during which they will not offer their views on monetary policy and economic conditions. The time span will begin on Tuesday the week before scheduled Fed meetings, and end on the Thursday following the gatherings.
Schiff: US debt ceiling talks in deadlock
Pimco reverses course on US government debt
By Dan McCrum in New York - FT.com
[free article pass - Google the title]
Bill Gross has reversed course, with the manager of the world’s largest bond fund scaling back bets against the value of US government debt in June as investors sought safety in Treasuries.
Pimco’s $244bn Total Return fund increased its holdings of government debt for the second consecutive month and returned its overall position in what it terms "government-related securities" to zero for the first time since February, according to a report issued by the company on Tuesday.
Obama: Debt-limit impasse could halt Social Security checks
By James Oliphant, Washington Bureau - LATimes.com
A failure to raise the nation’s debt ceiling could result in some seniors not receiving Social Security checks, President Obama said in an interview with CBS News that will air Tuesday evening.
"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it," Obama told "CBS Evening News" anchorScott Pelley.
The assertion marks the latest attempt by the White House to frame the stakes in the sometimes abstract debt-ceiling debate in terms the American public can grasp, while placing increasing pressure on congressional Republicans.
Europe steps back from the abyss, for a day The European Union has reached "crunch time" in the words of George Papandreou, Greece's despondent premier. Its leaders can longer allow themselves the luxury of "indecisiveness, errors and tactical politics" as the debt crisis engulfs 40pc of the eurozone's economy and almost half its population.
By Ambrose Evans-Pritchard - Telegraph.co.uk
"Let us be clear: if there is no relief we are going straight into the abyss," said Romano Prodi, Italy's ex-premier and former head of the European Commission.
Relief came just in the nick of time at 9.15 on Tuesday morning when somebody – most likely the European Central Bank (ECB) – intervened in the Spanish and Italian debt markets. Systemic contagion has been halted. A global crash has been averted. At least for a day.
Willem Buiter, Citigroup's chief economist, said the survival of monetary union now depends on the Spartan fortitude of the ECB, preferably before Italy's crucial bond auction on Thursday. "Nothing stands in the way of multiple sovereign defaults except the ECB: they are the only game in town, there is nothing else," he said. "Contagion has spread from the periphery to the soft core. That is a game-changer. It is existential for Euroland and, indeed, for the EU."
Why the euro is not worth saving This crisis has exposed the fact that – unlike the EU itself – the eurozone's monetary union was always a rightwing project
By Mark Weisbrot - Guardian.co.uk
The euro is crashing to record lows against the Swiss franc, and interest rates on Italian and Spanish bonds have hit record highs. This latest episode in the eurozone crisis is a result of fears that the contagion is now hitting Italy. With a $2tn economy and $2.45tn in debt, Italy is too big to fail and the European authorities are worried.
Although there is currently little basis for the concern that Italy's interest rates could rise high enough to put its solvency in jeopardy, financial markets are acting irrationally and elevating both the fear and the prospects of a self-fulfilling prophesy. The fact that the European authorities cannot even agree on how to handle the debt of Greece – an economy less than one sixth the size of Italy – does not inspire confidence in their capacity to manage a bigger crisis.
The Beginning of the End of Europe
By Gonzalo Lira
Yesterday, the European contagion spread to Italy and Spain. The sovereign debt of those two countries swooned—for no discernible reason.
No discernible reason whatsoever: The Italian and Spanish bond markets just sort of . . . plopped, like when a learning-to-walk toddler suddenly plops on his behind? Exactly like that: For no reason whatsoever.
The only conclusion that I can draw from this Monday swoon is that we've hit the tipping point: This is the start of the eurozone endgame. It is now only a matter of time before the eurozone breaks apart. Therefore, get back in your seats, buckle up, and brace yourselves good— 'cause it's gonna be a bumpy ride.
Uh Oh – Italy Is Coming Apart Like A 20 Dollar Suit
TheEconomicCollapseBlog.com
Did anyone really think that Italy would be able to get through this thing without needing a bailout? Just when you thought that things in Europe could get back to normal for a little while, here comes Italy. On Friday, there was a bit of a "mini-panic" as investors started dumping Italian financial assets. European officials are concerned that the sovereign debt crisis that has ravaged Greece, Ireland and Portugal will now put the Italian economy through the wringer. European Council President Herman Van Rompuy has called an emergency meeting for Monday morning. He is denying that the meeting is about Italy, but everyone knows that Italy is going to be discussed. European Central Bank President Jean-Claude Trichet and European Commission President Jose Manuel Barroso along with a host of other top officials will also be at this meeting. If it does turn out that Italy needs a bailout, it is going to change the entire game in Europe.
As Italy sinks, France is leaking
By Ilargi: The Automatic Earth
After having maintained for the past few years that Greece neither could nor would be allowed to default, EU leaders have finally given in. Of course, the word now is that this can be a default that doesn't trigger a credit event, in which payments on credit default swaps come due. Good luck with that. The credibility of Europe in the financial markets is shot. Gone. Trillions more in taxpayer funds will be thrown at the issues, but it doesn't matter anymore.
Not coincidentally, the change in attitude on Greece comes at a time when Italy has come under intense pressure. It's time to cut losses. Getting Greece done will open up space and time to "save" Italy. Or so undoubtedly goes the reasoning. It's not going to work.
Bob Chapman RADIO - Radio Liberty - July 11, 2011
Defaulted Greece May Have to Rescue Trichet
By Gabi Thesing - Bloomberg.com
European Central Bank President Jean-Claude Trichet might need to rely on Greece for assistance if the nation defaults.
Trichet’s threat to refuse defaulted Greek bonds as bank collateral for ECB liquidity remains in force after European finance ministers failed to agree on measures to stem the region’s debt crisis. In a default, Greek lenders could instead get Emergency Liquidity Assistance, a short-term loan program by national central banks in use in Ireland, said economists at Deutsche Bank AG, Barclays Capital, and BNP Paribas.
That would leave the Greek central bank to firefight a banking crisis that Trichet has staked the ECB’s credibility on keeping clear of. The danger of such an event has gained prescience as persisting speculation on the prospect of Greece defaulting transformed into regional contagion that sent bond yields soaring and stocks plunging from Portugal to Italy.
Irish bonds cut to junk status on bail-out worries Ireland's beleaguered economy has suffered another blow after its credit rating was cut to junk status on fears that it will need further bail-outs.
By Philip Aldrick and Amanda Andrews - Telegraph.co.uk
The country joins Portugal and Greece to become the third euro-area nation to be reduced to non-investment grade. The downgrade by Moody's came as it emerged European leaders will hold an emergency summit on Friday in an effort to contain fallout from the sovereign debt crisis sweeping the Continent.
Ireland's rating was lowered to Ba1 from Baa3 on Tuesday night. The country, which had a top Aaa rating just over two years ago, lost its investment status after the once booming property market imploded, causing banking collapses requiring huge bail-outs that saw the country's debt surge.
A Bad Mood Has Descended On World Financial Markets
TheEconomicCollapseBlog.com
Have you noticed that a really bad mood seems to have descended on world financial markets? Fear and pessimism are everywhere. The global economy never truly recovered from the financial crisis of 2008, and right now everyone is keeping their eyes open for the next "Lehman Brothers moment" that will send world financial markets into another tailspin. Investors have been very nervous for quite some time now, but this week things seem to be going to a whole new level. Fears about the spread of the debt crisis in Europe and about the failure of debt ceiling talks in the United States have really hammered global financial markets. On Monday, the Dow Jones Industrial Average dropped 151 points. Italian stocks fared even worse. The stock market in Italy fell more than 3 percent on Monday. The stock markets in Germany and France fell more than 2 percent each. On top of everything else, the fact that protesters have stormed the U.S. embassy in Syria is causing tensions to rise significantly in the Middle East. Everywhere you turn there seems to be more bad news and large numbers of investors are getting closer to hitting the panic button. Hopefully things will cool down soon, because if not we could soon have another full-blown financial crisis on our hands.
Federal Tax Revenues Have Exceeded Interest Payments20-Fold — Since U.S. Hit Debt Limit
By Terence P. Jeffrey - CNSNews.com
(CNSNews.com) - President Barack Obama said last Friday that the administration and Congress need to cut a deal by Aug. 2 to increase the legal limit on the federal debt "to make sure that America does not default."
Yet, the actual accounting done by the U.S. Treasury Department shows that federal tax revenues have exceeded interest payments on the federal debt by 20-fold since the Treasury announced on May 16 that the federal government had hit the current legal limit on the national debt.
In fact, since the government hit the debt limit on May 16, the ongoing flow of federal tax revenue has been more than sufficient to cover the combined costs of federal spending on interest payments, Medicare, Medicaid, Social Security, the Veterans Affairs department and federal workers wages and insurance benefits (including wages and insurance benefits for military personnel).
Big Banks Waging Warfare Against the People of the World
George Washington's Blog
Michael Hudson is a highly-regarded economist. He is a Distinguished Research Professor at the University of Missouri, Kansas City, who has advised the U.S., Canadian, Mexican and Latvian governments as well as the United Nations Institute for Training and Research. He is a former Wall Street economist at Chase Manhattan Bank who also helped establish the world’s first sovereign debt fund.
Hudson says:
The European debt crisis is really financial warfare by the banks
Indeed, the banks are in warfare against the rest of society In a separate interview, Hudson says:
What's going on in Greece is exactly what's going to happen in America in a couple of weeks.
The big banks are forcing their bad debts on government
They are also forcing governments to sell off national assets so the banks can install a "neo-feudalism":
Keiser Report: Europe's Neo Feudalism (E162)
Fed worries about job market, considers more stimulus
By Martin Crutsinger, Associated Press - USAToday.com
WASHINGTON — Federal Reserve officials at their last meeting expressed concerns that the weakening job market might hold back the recovery. But members were divided over whether the Fed should take additional steps to help the economy.
In June, the Fed agreed to end on schedule its program to boost the economy through the purchase of $600 billion in Treasury bonds.
Some members said the Fed should consider new stimulus measures if growth failed to pick up enough to "meaningfully" reduce the employment rate, according to minutes of the Fed's June 21-22 meeting released Tuesday.
Raising the debt ceiling is critical for small business
By Rhonda Abrams - USAToday.com
There's an important day coming for small businesses: August 2. That's the day the national debt ceiling must be raised, or the U.S. will officially default on its debt.
Now you may have heard a bit about the debt ceiling debate and thought, "This is just another stupid political discussion. Why should I care?" But raising the ceiling on the debt limit isn't just a theoretical issue. It can - and will - directly affect your ability to grow and operate your small business.
If the debt ceiling isn't raised, and raised soon, you're going to find that it will be tougher - far tougher - to get or any kind of credit. If you do get credit, you'll pay higher — much higher — interest rates.
Gold hits record high on debt fears and chance of more Fed stimulus
By Tom Petruno - LATimes.com
Gold closed at a record high Tuesday, surpassing its previous high set in May, as some investors ran back to the classic haven amid global financial markets' latest turmoil.
The metal also got a boost as the minutes of the Federal Reserve’s last meeting showed some policymakers were willing to push for a new monetary stimulus program if the economy failed to show significant job growth.
That could mean a resumption of the Fed’s bond-buying program, which critics say has helped fuel inflation, particularly in commodities. Fears of higher inflation often drive more investors to gold as a hedge.
The Fed is "thinking about more free money," said Frank Lesh, a commodities analyst at FuturePath Trading in Chicago. "The first place it goes is into the markets."
Gold attains fresh record in euro and sterling
By Jack Farchy in London - FT.com
[free article pass - Google the title]
Gold prices leapt to within reach of a new record peak on Tuesday as the eurozone crisis once again convulsed global markets and burnished the appeal of bullion.
The precious metal rose to a high of $1,566.36 a troy ounce by early afternoon in New York, a level only surpassed on two occasions and approaching the nominal record of $1,575.79 touched in April.
The rally came in spite of a jump in the value of the dollar. Gold also touched fresh records in euro and sterling terms. It rose to €1,118.58 a troy ounce as concerns over contagion in the eurozone caused a slide in the value of the single currency at the same time as driving investors to gold. It is up 9.1 per cent in euro terms since the start of last week. In sterling terms, the metal touched a new record of £982.84.
Gold and Silver Summer Trend Update
By: Peter Degraaf - MarketOracle.co.uk
Historically the precious metals prices drift lower during the summer months, with a bottom in July, although sometimes not until August. At this time of year demand from India is less because the festivals are over and demand from jewelers is low because of summer holidays. Investment demand is also down because buyers are expecting a correction.
This historical precedence (low summer prices), has been nourished by a number of analysts. (Any connection between the names used in this essay and living persons is purely coincidental). ‘Low-price Larry’ has predicted a collapse in the gold price since early this year. ‘Oriental Steve’ predicted on May 7th that gold and silver would drop to their 200 day moving averages by July 7th. In 2009, ‘craptal Dave’ predicted that silver would drop sharply. (The price rose instead). He called for a major long term top at the end of his 64 month cycle to occur in February of 2011. Gold refused to comply and has risen 10% since then. Last we heard of ‘craptal Dave’ he shorted gold at the end of June at $1515, hoping for a drop to $1462. It has been rumored that he considers his craptal system to be more effective than fundamentals.
Central banks pull most gold in a decade from BIS
By Jack Farchy in London - FT.com
Central banks have pulled 635 tonnes of gold from the Bank for International Settlements in the past year, the largest withdrawal in more than a decade.
The move, disclosed in the BIS’s annual report, marks a sharp reversal from the previous year when central banks added to deposits of gold at the so-called "bank for central banks" rather than lending it directly to the private sector amid growing concerns over counterparty risk.
Central banks and other official institutions collectively hold about 30,000 tonnes of bullion in their reserves, and many seek to earn an income on their gold by lending it out, just as any other currency.
Why the U.S. Should Return to the Gold Standard –
Even Though it Won't
BY DAVID ZEILER, Associate Editor, Money Morning
Should the U.S. return to the gold standard?
It's a question that has taken on new relevance during a time of soaring deficits and sky-high national debt.
Many of the world's most successful governments, from ancient Rome to the British Empire, enjoyed centuries of economic stability by adhering to a gold standard. And some economists credit the period of prosperity at the end of the 19th century to a global gold standard.
"The period of 1870 to 1914 recorded the highest real growth rates worldwide and was among the most peaceful ones in history," says a report on gold released earlier this month by European bank Erste Group. "Most of the budgets were balanced, and there was a free flow of capital across borders. The only job of the central banks was to exchange gold for paper or vice versa."
Even former Federal Reserve Chairman Alan Greenspan has noted the historical benefits of the gold standard.
Macro-economic factors still support gold as safe-haven asset
By Chirag Mehta - CommodityOnline.com
Gold prices saw a sharp sell off during the month of June 2011, but ended with an 11th consecutive quarterly gain. However, with the authorization of an austerity plan which involved budget cuts and asset sales to reduce the crisis in Greece, and to qualify for the bailout made by Greek lawmakers, Gold prices slumped as a safe-haven appeal at the end of the month.
Also, markets exited the US Federal’s bond‐buying program and since then, the Central Bank is yet to come up with additional monetary stimulus. Thus, with the plans of rescuing Greece from its crisis and with the end of QE2, gold was prone to a speculative sell off on lack of triggers to pull gold prices higher.
Gold Dreamtime, The Euro And Other New Moneys
By: Andrew McKillop - TheMarketOracle.biz
Once upon a time there was the Eurozone and its all-new hard money, the euro. It got off to a good start with a monstruously high forced surrender cash-in rate for the national moneys it replaced: depending on country, around 15 to 25 percent above the euro's real worth. This yielded several years in the early 2000's when it wasn't even necessary to doctor the official inflation numbers, but through a penchant for old ways and traditions, national economic agencies, the European Commission, the ECB and other rightly named players kept on doing it. This made sure the economic data was absolutely fake, an important aid to launching a now-floundering cuckoo money. KEEPING THE MONEY STRONG
The 1956 Treaty of Rome and subsequent treaties like Maastricht and Nice lectured that governments must leave their central banks alone and not force them to liquidate gold assets. They could play around with SDRs and paper gold behind closed doors at the IMF, but in their home patch the central bank's role is currency and money supply management, not government financing woes. Making this a lot less than sure by creative intepretation of the founding texts, the creation of the ECB and operation of the Eurozone, recently expanded to 17 countries, included the Protocol of the European System of Central Banks and European Bank, with "ESCB" being is the correct name for the Euro zone.
Silver Poised for Powerful Rally
By: The Gold Report - MarketOracle.co.uk
Opportunities abound in small- and mid-cap silver companies, according to Sprott Inc. Chairman Eric Sprott. In this exclusive interview with The Gold Report, Eric Sprott and Sprott Money Ltd. President Larisa Sprott say the fundamentals that drive the price of silver are as strong now as before the spring selloff—maybe even stronger—even though volatility is causing buyers to hold back a bit.
The Gold Report: The Greek economy is making headlines again, with the Greek Parliament recently voting in extreme austerity measures that include budget cuts of $40B plus a selloff of $72B in assets. When we spoke in March, Eric, you were quite worried about collapses in Greece, Ireland and Iceland. Do you see these new austerity measures as another step toward collapse, or do they signal a reprieve?
Eric Sprott: It's the European troika advancing the money that's really preventing the collapse, from the financial market point of view. The austerity program will create a collapse in Greece economically, but it at least gives them the opportunity to get the troika bailout. I refer to the troika as the ECB (European Central Bank), the IMF (International Monetary Fund) and maybe the BIS (Bank for International Settlements).
Marc Faber Money losing purchasing power
How Globalism Has Destroyed Our Jobs,
Businesses And National Wealth In 10 Easy Steps
EndOfTheAmericanDream.com
As most Americans stand around waiting for the U.S. economy to return to "normal", there is a never ending parade of jobs, businesses and wealth heading out of the United States. The jobs and businesses that are leaving are gone for good and will not be coming back. This is causing unemployment to soar and government debt to skyrocket but our politicians are doing nothing about it. Instead, politicians from both parties keep insisting that they will solve all of our problems if we will just give them our votes. Meanwhile, American families continue to fill up their shopping carts with cheap plastic crap made on the other side of the world. Globalism is slowly destroying the greatest economic machine that the world has ever seen and most Americans don't even realize it. Today, the U.S. government has surrendered massive amounts of economic sovereignty to global organizations such as the WTO, the IMF and the World Bank. The United States has also entered into a whole host of very damaging "free trade agreements" such as NAFTA that are costing our economy huge numbers of jobs. Our politicians always promised us that globalism would bring us to a new level of prosperity, but instead that "giant sucking sound" that you hear is the sound of the U.S. economy being hollowed out.
Conservative Ben Stein Calls For Tax Hike
on Millionaires, Billionaires
By James Zilenziger - CNSNews.com
(CNSNews.com) -- Ben Stein, an economist, actor, and conservative writer, said taxes should be raised on millionaires and billionaires to help reduce the federal deficit.
"I am in favor of greatly raising the taxes on very wealthy people, millionaires and billionaires. I wouldn't raise the taxes on people making $250,000 a year," said Stein in a June 29 interview on The O’Reilly Factor, guest-hosted by Laura Ingraham.
Earlier, on June 25, Stein had told Cavuto on Business, "We've got to raise taxes. There's just no way around it. The deficit situation is so serious that while I wish we did not have to raise taxes, we just can't cut spending enough. I wish we could. We can't. We have to raise taxes."
The Center on Budget and Policy Priorities
Thinks We're Still in the Bush Era
By Megan McArdle - TheAtlantic.com
Another day, another chart from the "non-partisan" Center on Budget and Policy Priorities on what "accounts" for the public debt. At some level, these exercises are silly: all prior legislation could be equally said to "account" for public debt, including, of course, Social Security and Medicare. These charts are usually just a dog-whistle where we pick out the programs we don't like and show that without them, things wouldn't be so bad!
US trade deficit tops $50bn on rising oil prices The US trade deficit widened sharply in May, topping $50bn for the first time since October 2008, helped by surging oil prices, official data showed on Tuesday.
AFP - Telegraph.co.uk
The trade gap expanded to a seasonally adjusted $50.2bn from a downwardly revised $43.6bn in April, according to figures released by the Commerce Department.
Most analysts had expected the gap to increase only marginally in May, to around $44bn, after the April deficit shrank to the lowest level of the year, reflecting the impact on US supply chains of Japan's earthquake and tsunami disaster.
But figures showed imports rose 2.6pc in May, led by a 9pc surge in oil imports as crude oil prices spiked.
The world's largest oil-consuming country bought foreign oil at an average price of $108.70 a barrel, the highest level since August 2008, a month after oil prices had hit an all-time peak.
Something to Squawk About
By Eugene Robinson - Truthdig.com
Washington has many lazy habits, and one of the worst is a reflexive tendency to see equivalence where none exists. Hence the nonsense, being peddled by politicians and commentators who should know better, that "both sides" are equally at fault in the deadlocked talks over the debt ceiling.
This is patently false. The truth is that Democrats have made clear they are open to a compromise deal on budget cuts and revenue increases. Republicans have made clear they are not.
Put another way, Democrats reacted to the "grand bargain" proposed by President Obama and House Speaker John Boehner by squawking, complaining and highlighting elements they didn’t like. This is known throughout the world as the way to begin a process of negotiation.
Failing Liberty 101
By Walter E. Williams - CNSNews.com
A recent Superman comic book has the hero saying, "I am renouncing my U.S. citizenship" because "truth, justice, and the American way -- it's not enough anymore."
Though not addressing Superman's statement, Stanford University professor and Hoover Institution senior fellow William Damon explains how such a vision could emerge today but not yesteryear. The explanation is found in his article "American Amnesia," in Defining Ideas (7/1/2011), based upon his most recent book, "Failing Liberty 101: How We Are Leaving Young Americans Unprepared for Citizenship in a Free Society."
The National Assessment of Educational Progress reports that only 1 in 4 high-school seniors scored at least "proficient" in knowledge of U.S. citizenship. Civics and history were American students' worst subjects. Professor Damon said that for the past 10 years, his Stanford University research team has interviewed broad cross sections of American youths about U.S. citizenship.
The Keiser Report 163
Another credit union bites the dust...
Vensure Federal Credit Union of Mesa, Arizona, has been liquidated by the National Credit Union Administration (NCUA) for insolvency.
The National Credit Union Administration (NCUA) liquidated Vensure Federal Credit Union of Mesa, Ariz., today. Member deposits are federally insured by the National Credit Union Share Insurance Fund up to $250,000. NCUA’s Asset Management and Assistance Center will issue checks to individuals holding verified share accounts in the credit union within one week.
Sebelius: Obamacare's Penalty on Small Businesses
a 'Great Incentive' for Growth
By Nicholas Ballasy - CNSNews.com
(CNSNews.com) - Health and Human Services Secretary (HHS) Kathleen Sebelius told CNSNews.com on Monday that a provision in President Barack Obama's health-care law that requires small businesses to begin buying health insurance for their workers when they hire their 50th employee--or otherwise pay a penalty to the federal government--"will actually be a great incentive" for businesses to grow.
CNSNews.com asked Sebelius, "Part of the health care law requires small businesses that grow to over 50 employees to provide health insurance to their employees or face a penalty [starting in 2014]. Do you think that may affect their incentive to grow--small businesses--to above 50 employees?"
"I hear, frankly, just the opposite from small business owners ... where they say the way that they retain and recruit the best possible employees is with a benefit package that is solid; that often they lose good employees because they can't provide affordable health coverage, they go down the street or around the corner, even though businesses like Frager's are a family--absent that protection that people have for their employees," Sebelius said at a press conference about the Affordable Care Act's insurance exchanges at Frager's Hardware on Capitol Hill in Washington, D.C.
Fannie Mae changes all-cash financing options
By Diana Olick, CNBC.com
Remember how we all blamed investor/flippers using faulty financing for the housing crash?
You know, these are all the bad guys who ran up home prices to their own profit, with no concern for the inevitable fallout; they colluded with overzealous, borderline blind, lenders who gave anybody and everybody a loan with no attention paid to their ability to repay said loan.
That's all over now. You can't get a loan without pledging your first born in collateral, and if you're an investor, you rank somewhere just below Angelo Mozilo.
Or do you? Last month Fannie Mae made a little change in the rules for all-cash buyers to apply for mortgages. I don't recall a press release, and I'm quite sure I'm on their mailing list. But there it is, "Announcement SEL-2011-5," a "Selling Guide Update:"
California companies fleeing the Golden State
By Tami Luhby @CNNMoney
NEW YORK (CNNMoney) -- Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State.
And governors around the country, smelling blood in the water, have stepped up their courtship of California companies. Officials in states like Florida, Texas, Arizona and Utah are telling California firms how business-friendly they are in comparison.
Companies are "disinvesting" in California at a rate five times greater than just two years ago, said Joseph Vranich, a business relocation expert based in Irvine. This includes leaving altogether, establishing divisions elsewhere or opting not to set up shop in California.
'South California' for 51st state? Fed up with Sacramento, a Riverside County politician seeks to break 13 counties away to form a state called South California
By Phil Willon, Los Angeles Times
Accusing Sacramento of pillaging local governments to feed its runaway spending and left-wing policies, a Riverside County politician is proposing a solution: He wants 13 mostly inland, conservative counties to break away to form a separate state of "South California.''
Supervisor Jeff Stone, a Republican pharmacist from Temecula, called California an "ungovernable'' financial catastrophe from which businesses are fleeing and where taxpayers are being crushed by the burden of caring for welfare recipients and illegal immigrants.
Connecticut employees get layoff notices
By Tamil Luhby @CNNMoney
NEW YORK (CNNMoney) -- The layoffs are starting in Connecticut.
The state has begun sending layoff notices to its public employees two weeks after union members failed to approve Governor Dannel Malloy's proposal to save $1.6 billion in concessions and savings.
The governor is also reviewing proposals for deeper budget cuts within state agencies this week. He'll submit his plan to lawmakers on Friday.
Union members began receiving the notices Monday, said Matt O'Connor, spokesman for the State Employees Bargaining Agent Coalition, which covers all 15 unions representing roughly 45,000 state employees. More were delivered Tuesday.
The Unemployed Worker's New Friend: Outsourcers Job Hunters Pay Firms to Launch Résumé Blitz
By JOE LIGHT - WSJ.com
Last summer, Mel Moomjean was unemployed and looking for a job as a sales director, but without meaning to he also applied for work as a receptionist, manicurist and fitness coach. His résumé, which highlights more than 20 years' experience managing sales teams, even landed at the beauty salon his wife goes to. It was looking for a stylist.
Gary Bauer, the salon's owner, thought Mr. Moomjean was joking. "I talked to his wife, and we had a good laugh about it."
It wasn't a joke. Mr. Moomjean had outsourced his job hunt.
Central Falls, RI stares down 'painful' bankruptcy
By ERIKA NIEDOWSKI Associated Press - Houston Chronicle
CENTRAL FALLS, R.I. — At the community center in Central Falls, the subsidized lunch for seniors is no longer being served. The pool has been drained. Health screenings have been cancelled. The locks to the building were changed last week, and not even the acting director is allowed inside.
The public library has gone dark too, a sign on the door at the top of the stone steps telling patrons to return books elsewhere — indefinitely.
Rhode Island's most distressed city is on the cusp of declaring bankruptcy — a relatively rare step for municipalities even in tough financial times. Since 1980, only about 46 cities or towns in the United States have filed for federal bankruptcy protection, and some of those petitions have been dismissed, according to James Spiotto, an attorney in Chicago who is an expert in municipal bankruptcies.
Gerald Celente on topic His Days Are Numbered?
Today's Special at Wal-Mart: Something Weird
With Many Stores, Lots Happens; Pranks, Dancing,
'Norman' Behind the Coke Rack
By MIGUEL BUSTILLO - WSJ.com
Somewhere, something weird is going to go down this week at a Wal-Mart. And next week. And the next.
Maybe a man dressed in a cow suit, crawling on all fours, will steal 26 gallons of milk from a Wal-Mart and hand them out Robin Hood-style to patrons in a parking lot, as allegedly occurred in Stafford, Va. in April.
Perhaps a glazed-eyed 20-year-old will take a truck filled with 338 boxes of Krispy Kreme doughnuts from a Wal-Mart before police find him drowsy and in possession of a bag of marijuana, as authorities say took place in Ocala, Fla., in March.
Or perchance a rapper named Mr. Ghetto will shoot an unauthorized, sexually suggestive music video paean to picking up women in the aisles of a Wal-Mart, full of ladies shaking their hindquarters in ways hindquarters typically don't shake, as happened in New Orleans in May.
Hedge-Fund Investors Scout Out Web Firms
By SPENCER E. ANTE - WSJ.com
Spurred by their appetite for technology companies and seeking higher returns, a growing number of hedge-fund managers have started to invest more in private Internet companies.
When daily-coupon website LivingSocial Inc. said it raised $400 million in April, the firms putting up cash included hedge-funds Tiger Global Management, Lone Pine Capital and Brookside Capital, people familiar with the matter say. Tiger's name popped up again in late June, when the New York firm grabbed a piece of the $100 million financing round for Square Inc., a mobile-payments start-up led by Twitter co-founder Jack Dorsey.
A handful of hedge funds already had a history of such investments, but the activity has increased recently as investors try to cash in on the surging valuations of Facebook Inc., LinkedIn Corp., Zynga Inc., Groupon Inc. and a smattering of smaller companies.
Google Makes Facebook Look Socially Awkward
By ROLFE WINKLER - WSJ.com
Mark Zuckerberg might want to fast-track Facebook's initial public offering.
In what appeared to be a hasty response to the launch of Google's rival social-networking product, called Google+, Mr. Zuckerberg on Wednesday unveiled Facebook's new video-chatting feature. He called it "super awesome." Too bad Google made the same feature available in 2008. Indeed, Facebook suddenly looks vulnerable. This could be bad news for investors who have recently paid top dollar for stock in Facebook in private sales.
Rule No. 1 when launching a social network: Make everyone wait in line. Exclusivity was how, in its early days, Facebook built buzz. For more than two years, you couldn't get in unless you had an email address ending in .edu. Google is using a similar strategy with Google+.
The 20 Most Successful Projects in Kickstarter History
By Alyson Shontell - TheAtlantic.com
You can't make money without money, and there are a lot of ways to get cash for a venture.
Kickstarter is a startup that helps other startups get crowdsourced funding. People post their ideas and others can contribute as little or as much as they like to support the projects.
We found 20 projects on Kickstarter that raised hundreds of thousands of dollars from thousands of people. The most popular projects were documentaries and iPhone accessories.
One project raised nearly $1,000,000 from 13,000 people.
Ebay and marketplace sites may be liable for trademark abuse European court says online marketplaces can be held responsible for the infringement of trademarks on counterfeit goods they promote, following a series of cases brought by L'Oreal to defend its brand -- By Rebecca Smithers - Guardian.co.uk
Online shopping sites such as eBay may be liable for trademark infringements if they play an "active role" in promoting counterfeit goods,Europe's top court ruled today.
In an eagerly awaited ruling with huge implications for e-commerce, the European court of justice in Luxembourg said national courts could order online retailers to stop such infringements and prevent similar incidents in the future.
The verdict followed a series of cases brought by cosmetics and beauty giant L'Oreal across the EU to defend its brand name.
Light bulb ban riles up lawmakers
By Steve Hargreaves @CNNMoney
NEW YORK (CNNMoney) -- The so-called light bulb ban, set to begin in 2012, has become a rallying point for conservatives, libertarians, and various free-market activists who deride what they see as unnecessary government interference in the marketplace.
A bill calling for light bulbs to become gradually more efficient beginning in 2012 and ending in 2020 -- what critics are calling a ban -- passed in 2007 with bipartisan support and was signed into law by then-President George W. Bush.
Because of those higher standards, traditional bulbs will probably be phased out, to be replaced with more efficient incandescent bulbs, compact fluorescents and LEDs.
NRA Will Sue Obama Administration Over New Gun-Control Measure
By Susan Jones - CNSNews.com
(CNSNews.com) - The National Rifle Association plans to sue the Obama administration over its new gun-reporting requirement in four states bordering Mexico.
On Monday, the Justice Department said it would require firearms dealers in Arizona, California, New Mexico, and Texas to report multiple sales of certain semi-automatic rifles to the same person within a five-day period. The goal is to stop the illegal flow of weapons to Mexican drug cartels, said Deputy Attorney General James Cole.
The new reporting requirement applies to semi-automatic rifles with detachable magazines and calibers greater than .22. Such weapons, Cole said, "are highly sought after by dangerous drug trafficiking organizations and frequently recovered at violent crime scenes near the Southwest Border."
Partisan divide on debt talks growing deeper;
Obama says he won't accept stopgap plan
By Lori Montgomery - WashingtonPost.com
Talks between President Obama and congressional Republicans grew increasingly contentious on Monday, as GOP leaders flatly rejected his call to raise taxes on the wealthy as part of a bipartisan agreement to restrain the nation's mounting debt.
Dueling news conferences by Obama and House Speaker John A. Boehner (R-Ohio) served as a testy prelude to an afternoon bargaining session that only emphasized the partisan divide, according to people on both sides with knowledge of the closed-door discussions.
U.S. debt default could be 'real nasty'
By AP - WashingtonTimes.com
The International Monetary Fund’s new chief foresees "real nasty consequences" for the U.S. and global economies if the U.S. fails to raise its borrowing limit.
Christine Lagarde, the first woman to head the lending institution, said in an interview broadcast Sunday that such a failure would cause interest rates to rise and stock markets to fall.
That would threaten an important IMF goal, which is preserving stability in the world economy, she said.
The U.S. borrowing limit is $14.3 trillion. Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2.
U.S. Mired in Quicksand?
Published by Ian R. Campbell - StockResearchPortal.com
Toronto's Globe and Mail had a front-page reference last Friday that says 'What's the worst that could happen? The U.S. has an 'extraordinarily dangerous problem.' How missing the debt deadline could sink the nation', and an article in its Business Section titled 'In debt fight, a nation on the brink' – reading time 5 minutes. Most of what is in this article likely is 'old hat' to you by now, but the link makes it available if you want to read it.
What occurred to me as I scanned both the front-page reference to the article and the article itself, is a level of undercurrent that I had thought of, but not focused on. Simply put, in the face of how the partisan politicians in Washington currently are behaving, how much real hope can there be that the U.S. can ever successfully work its way out of the fiscal quicksand it currently is mired in. I am increasingly concluding 'Not Much'!
Geithner: "[For A Lot of People] It's Going to Feel Very Hard,
Harder than Anything They've Experienced in Their Lifetime
Now,
For a Long Time to Come"
George Washington's blog
AP notes:
Many Americans will face hard times for a long time to come.
***
Geithner says will be some time before many people feel like the country is recovering.
Geithner tells NBC's "Meet the Press" that it's a very tough economy. He says that for a lot of people "it's going to feel very hard, harder than anything they've experienced in their lifetime now, for a long time to come."
Of course, Geithner is a large part of the reason that it will be so hard.
The Financial Landscape:
Italy Under Stress; U.S. Social Safety Net In Danger
ByEamon Murphy - DailyFinance.com
The Boot Gets Kicked:As the eurozone sovereign debt crisis continues, focus is shifting to Italy -- the continent's third-largesteconomy-- as the next potential victim. "In what Italian media dubbed 'Black Friday,'"CNNMoney reports, "Italian stocks and bond yields plummeted at the end of last week, and trading was suspended for some Italian bank stocks following sharp sell-offs." The chaos resumed on Monday, "amid fears that those banks won't be able to pass eurozone stress tests -- the results of which will be published Friday."
Debt Contagion Threatens Italy
By LIZ ALDERMANand RACHEL DONADIO - NYTimes.com
Throughout Europe's debt crisis, Italy has largely managed to steer clear of the troubles that have engulfed its profligate Mediterranean neighbors.
But the contagion that started in the euro zone's smaller countries is suddenly moving to some of its largest. As Greece teeters on the brink of a default, the game has changed: Investors are taking aim at any country suffering from a combination of high debt, slow growth and political dysfunction — and Italy has it all, in spades.
In recent days, Italy has become Europe’s next weak link after Greece, Ireland, Portugal and Spain, harmed in particular by a power struggle between Prime MinisterSilvio Berlusconi and his finance minister, Giulio Tremonti. The dispute threatens to turn the euro zone’s third-largest economy, after Germany and France, into one of its biggest liabilities.
The economic pain grows in Italy Divisions at the heart of government
are costing Italy the confidence of the world.
By James Walston - Telegraph.co.uk
For those of us not versed in the dark arts of accounting or international finance, there is little more solid than money; I have it or I don't, I can borrow it or lend it and measure it down to the last penny. But confidence is an altogether different commodity, far more abstract and difficult to gauge. This week, Italy is trying to persuade us that the world should have confidence in both its political and its financial stability. It will not be easy.
The ratings agencies' evaluation of a country's creditworthiness are one measure of stability; another is investor confidence in the bond markets about Italy's solvency. On both scores, the omens are getting worse for Italy day by day.
German 'Nein' leaves Italy and Spain in turmoil Italian and Spanish bond yields soared to post-EMU highs in a fresh day of credit turmoil after Germany blocked any meaningful measures to defuse the crisis.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Chancellor Angela Merkel called for more "frugality" in Italy, sticking to her script that Rome can solve its woes with an austerity budget. Her finance minister Wolfgang Schäuble said any boost to the EU's €500bn (£440bn) bail-out machinery was "out of the question".
Mr Schäuble denied reports that Berlin was ready to empower the fund to purchase Spanish and Italian bonds pre-emptively on the open market, a move seen by experts as vital to halt dangerous contagion to the larger economies.
Are French Banks Next On The Block After Italy?
(EWQ, FTE, BNPQY, EEA, FEZ, IEV)
By JON C. OGG - 247wallst.com
By now, the term "PIIGS" is rather well-known due to debt woes and economic woes of Portugal, Ireland, Italy, Greece, and Spain. French banks have been considered as having above-average exposure to Greece. What if the "Pigs" by pronunciation is soon to become the "Figs" by pronunciation? We at least want our readers to think about some possibilities here. It is at least possible that the "PIIGS" could become the "PFIIGS" if Credit Suisse’s concerns from Monday begin to take hold.
24/7 Wall St. does not want to draw too much immediate cause and effect into light, but unfortunately that is the way of the world. This sort of news builds, then it builds some more, and then there is a sudden concern that was not previously considered. If you look at the whole string of the most recent sovereign downgrades from the ratings agencies you will see how much is simply cause and effect rather than being due to an internal smoking gun or flash-point.
Euro Falls to 4-Month Low
Versus Yen on Concern Debt Crisis to Reach Italy
By Candice Zachariahs and Monami Yui - Bloomberg.com
The euro declined to a four-month low against the yen as soaring yields on Italian government bonds stoked concern the region’s sovereign-debt crisis is spreading to its largest economies.
The 17-nation currency fell to a record versus the Swiss franc before the Italian Treasury sells one-year bills today and as much as 5 billion euros ($7 billion) of bonds on July 14. The yen rose against most of its major counterparts as Asian stocks extended a worldwide equity slump, spurring demand for safer assets. The dollar maintained a two-day drop versus the yen before the Federal Reserve releases minutes from its June meeting amid signs the U.S. recovery is faltering.
China on its Way to the Leading Global Currency?
Written by Ronald Stoeferle - OilPrice.com
The open criticism of the US policy is getting more vociferous by the day. For example, a former central bank advisor pointed out that in the medium to long term US Treasuries were "not safe". In order to further diversify China has now stepped up its bond purchases from the European stabilisation fund EFSF. China will also launch a new investment fund, which will invest a part of the almost USD 3bn worth of foreign exchange reserves in energy and precious metals. PBoC advisor Xia recommended holding only USD 1bn worth of foreign exchange reserves, while the rest should be employed for strategic investments . He also suggested a gradual increase in gold reserves and recommended following a "buy the dip" strategy over an extended period of time. He proceeded to advise the PBoC to add silver to the official reserves while advising the US government to sell some of its gold reserves. An official of the Chinese Chamber of Commerce said China should step up its gold reserves to as much as 8,000 tonnes. We therefore expect China to gradually accumulate gold, and we also believe that the country holds substantially larger reserves than the official record of 1,054 tonnes suggests.
Why China's Heading for a Hard Landing, Part 5:
By A. Gary Shilling - Bloomberg.com
The hard landing that I foresee for China will probably prick the global commodity bubble, which is already showing signs of topping out.
Agricultural product prices have jumped, the result of robust demand, bad weather last year in Russia, recent floods in Australia, and dry and hot La Nina conditions in Argentina.
Industrial metals such as copper were on a tear. So were precious metals, such as silver.
But much of the leap in commodity prices was due to investors and other speculators. Exchange-traded funds had already tied up much of the physical supplies of gold and other precious metals. Futures contracts held by speculators were up 12 percent in 2010 through October, with sharp increases in bullish bets on crude oil, copper and silver. Volatility forced futures exchanges to raise margin requirements on a number of commodities.
Comex Gold ends higher on fresh safe-haven demand
amid ongoing EU debt crisis
By Jim Wyckoff - CommodityOnline.com
(Kitco News) - Comex Gold futures prices ended the U.S. day session higher and hit a fresh three-week high on fresh safe-haven buying interest as the European Union debt crisis drags on. Gains in gold were limited and Silver prices were pressured by bearish "outside markets" that included a sharply higher U.S. dollar index and sharply lower Crude Oil prices. August gold last traded up $7.60 at $1,549.20 an ounce. Spot gold last traded up $4.40 an ounce at $1,549.00. December Comex silver last traded down $0.815 at $35.745 an ounce.
The ongoing European Union sovereign debt crisis supported gold Monday, on safe-haven demand due to the uncertainty over the issue. Early this week the focus is on Italy and some upcoming stress tests on its financial institutions. Credit default swap spreads have hit record levels early this week as worries have intensified that the EU debt problems could morph into a debt contagion in Europe or beyond. The Euro currency was under strong selling pressure Monday on the EU concerns. Last week the EU debt crisis focus was on Portugal, amid fresh credit agency rating downgrades and warnings. The week before that it was Greece. Next week, it may be a different EU country in the debt crisis spotlight.
The Italian effect: Gold and U.S. dollar rise
By Ivan Hoff, StockTwits - CNN.com
NEW YORK (CNNMoney) -- The euro slid to a new 30-day low on concerns that Italy might be the next victim of the European sovereign debt crisis.
The yields on Italian bonds continue to expand and the country's stock market is in a free fall. As a result, Italian market regulators requested short sellers to disclose their positions if they exceed 0.2% of a company's capital.
All equity sectors are down across the board.
Gold to climb as fresh debt concerns hit Europe
SINGAPORE (Commodity Online) : Gold remained steady in Asian trade Monday but could gain as the day progresses on renewed concerns that more nations in Europe might face debt crisis.
Gold for immediate delivery was seen trading at $1544.07 an ounce eat 1.00 p.m Singapore time while US gold for August delivery was at $ 1541.64 an ounce on the comex division of Nymex.
Analysts said the yellow metal is on the way towards north as worries over US economy also offering support to it as investors sought the metal as a safe haven.
The weaker-than-expected payrolls data last Friday dampened hopes that the U.S. economy would bounce quickly from a slowdown in the first half of the year, and helped gold stage a 3.9-percent weekly rise, its best week since November 2009.
Financial Guru Jim Rogers aboudt Gold and Silver.
Gold backing monetary system in the making?
By Mark Puustinen
The Gold price has now stayed above $1500 since late April and is expected to reach $1600 this year and then continue to rise the following year due to growing demand from Asia. Indian demand for gold has been a major source of investment for years but now China is also acquiring gold at a rapidly fast pace. Combined with the growing demand from central banks you have a globally, long-term, uncontrollable physical gold demand.
Economists believe 20 year anniversaries are important and we have now had four of these anniversaries since 1931 when effectively the monetary system last collapsed after Austria became bankrupt, followed by Germany and then Great Britain. The similarities between then and now are clear to see so, could we see a return to a gold standard system in 2014, 100 years after the last collapse?
Oxford Economics Looks At The Role Of Gold
Under Inflation And Deflation,
Finds Average Gold Holdings Should Be At Least 5% Of AUM
Submitted by Tyler Durden - ZeroHedge.com
Predicting the future in general is a fool's game, while anticipating inflection points, we have often said, is for market oracles and dummies. That said, one can easily anticipate general themes. The inevitable implosion of an unsustainable economic model is one of them. The only question is how does one hedge best for an event like this. In the past 3 years, precious metals, primarily gold, have served as arguably the best hedge to the absolute loss of purchasing power of the global fiat system. And with increasing global instability, the prominence of gold will only rise. A just released must read analysis by Oxford Economics titled "The impact of inflation and deflation on the case for gold" finds just that, and culminates with the dramatic conclusion that "gold's optimum share of a portfolio to be around 5% in a base long-term case for the UK featuring 2.25% growth and 2% annual inflation. This is higher than levels found in typical mainstream investment portfolios, although this may be in part because the analysis does not include other assets such as index-linked bonds, foreign securities and other commodities." Based on anectodal analyses, gold holdings on average at the institutional level are about 1% or less.
Commercial Traders Covering Short Positions on Silver
BY CHRIS MARCHESE - FinancialSense.com
While it is impossible to know what direction any commodity is heading in the near-intermediate future, there are, however, various market signals which provide important insights regarding market sentiment. One influential signal is the actions of the largest commercial traders. Although I have discussed this ad nauseam, the importance of such vast structural changes in the silver market can’t be stressed enough. While many understand the game of cat and mouse the large commercial traders have been playing for several decades, it is for the most part, known by very few. While I have discussed the manipulation in the futures market for silver numerous times in the past, I will again discuss the importance of the structural changes in this small market, which have been on-going for approximately nine months.
Best Currency Forecasters Say
Dollar Slump Coming to an End as Index Falls
By Garth Theunissen and Allison Bennett - Bloomberg.com
The best currency forecasters say the dollar’s 12 percent slide over the past year is coming to an end as Europe’s deepening debt crisis discourages bets against the world’s reserve currency.
Led by Schneider Foreign Exchange Ltd., the five most- accurate firms during the six quarters through June 30 as measured by Bloomberg see the dollar trading at $1.42 per euro on average by year-end, compared with $1.43 on July 8. Against the yen, they predict the greenback will rise to 83 from 80.64.
The Biggest Fed Money Pump Since Lehman Went Under...
Submitted by Phoenix Capital Research - ZeroHedge.com
… happened on the week of June 27 2011. If you're looking for a reason that stocks have been ramped so much higher in the last two weeks. This is it.
Indeed, for the week ended June 27, the Fed flooded the financial system with $76 BILLION in liquidity. Bill King of the King Report puts that number into perspective noting that it’s BIGGEST increase since September 22, 2008 right after Lehman Brothers collapsed.
That's right, the Fed just juiced the system as much as it did when Lehman Brothers went under. While a shockingly large single money pump, the Fed's generally been flooding the system with liquidity at a pace equal to that of 2008 since the beginning of the year.
Treasuries Snap Two-Day Gain
as U.S. Prepares to Sell $66 Billion on Debt
By Wes Goodman - Bloomberg.com
Treasuries snapped a two-day gain as the U.S. prepared to sell $66 billion of notes and bonds this week, starting with a $32 billion three-year auction today.
The government also intends to offer $21 billion of 10-year debt tomorrow and $13 billion of 30-year bonds on July 14. Treasury yields may rise after the Federal Reserve completed its $600 billion bond-purchase program in June, Bank of America Merrill Lynch, one of the 20 primary dealers authorized to trade directly with the central bank, wrote in a report.
"The auctions this week may support higher yields," said Tomohisa Fujiki, an interest-rate strategist at BNP Paribas Securities Japan Ltd. in Tokyo. BNP's U.S. unit is another primary dealer.
Defaulting on the Fed's Bonds
Mises Daily: by Robert P. Murphy
Ron Paul recently made (another) splash among economic pundits with his suggestion that the Treasury simply cancel the $1.6 trillion in its debt held by the Federal Reserve. Many of Paul's longstanding critics seized on the proposal as reckless and said it was further evidence that Paul doesn't understand financial markets. However, Paul received unexpected praise from the progressive economist Dean Baker.
In the present article I'll explain the basics of Dr. Paul's proposal. It's hard to say what its ultimate impact would be if enacted, because the analysis depends on our assumptions. Even so, we can sketch some of the main considerations to at least build a framework for evaluating his suggestion.
Ron Paul's Modest Proposal...
Recession proves asset price bubbles should be popped:
San Francisco Fed
by KERRI PANCHUK - HousingWire.com
Central banks should consider using the Great Recession as a justification for popping future asset price bubbles before they lead to future meltdowns, Federal Reserve Bank of San Francisco analyst Kevin Lansing said in a report released Monday.
Lansing's report, which is titled "Gauging the Impact of the Great Recession," concludes the 2001 recession was short-lived due to families tapping into home equity and an influx of home sales driven by unsophisticated buyers who were able to obtain cheap credit.
The downside to the quick-turnaround in the early part of the decade is the fact a hyper-focus on housing inflated asset prices, creating an unsustainable bubble that eventually led to a much larger downturn in the latter part of the decade,the report contends.
"Wall Street banks have cut back on small business lending… [by] more than double the cutback in overall lending.… [Small business] options just keep disappearing." -- Elizabeth Warren, Chair of the TARP Congressional Oversight Panel, quoted in Judd and McGhee, "Banking on America"
The Wall Street bailout of 2008 has radically altered the banking business. The bailout was supposed to keep credit flowing to Main Street, but it has wound up having the opposite effect. Small and medium-sized businesses have traditionally been the main engines for increasing employment, and they need bank credit for their working capital; but today credit to local businesses has collapsed nearly everywhere.
That's why so many states—the total is now fourteen—are considering turning to state-owned banks to get local credit flowing again.
Understanding Unintended Consequences
Submitted by Expected Returns - ZeroHedge.com
As you get older and start thinking more, you realize there are more layers to even seemingly straightforward problems. When you are young, solutions are simple: If drugs are bad, we should make them illegal and put people in jail for using them. Or if we need to raise revenue, we should raise taxes on everyone, especially the rich. Perhaps this is the logic behind the saying, "If you are young and not liberal, then you have no heart; but if you are old and not conservative, then you have no brain." Once you've been around the block and seen enough shenanigans, you realize things aren't so simple. When you're young, you're what I like to call a do-gooder; you don't even realize there is such a thing as unintended consequences.
PMI to pay underwater borrowers to stay put
by JACOB GAFFNEY - HousingWire.com
Private mortgage insurer PMI Group (PMI: 1.34 -11.26%) will offer cash incentives to some homeowners in negative equity to help prevent mortgage defaults.
PMI subsidiary, Homeowner Reward is working withLoan Value Group, to administer the pilot program, called Responsible Homeowner Reward.
The program launched Monday and will start in select real estate markets where falling house prices left borrowers owing significantly more on their mortgage than what the property is worth.
Fidelity settles with HUD over mortgage kickback claims
by JON PRIOR - HousingWire.com
The Department of Housing and Urban Development struck a $4.5 million settlement withFidelity National Financial over claims the title company paid real estate brokers kickbacks and referral fees in violation of the Real Estate Settlement Procedures Act.
Section 8 of RESPA prohibits anyone from giving or receiving anything of value in exchange for referring settlement service business. HUD claimed FNF and it subsidiaries paid real estate brokers for referring services such as home warranties and title insurance for several years.
FNF denied the allegations, claiming payments were made for the use a software platform and that no charges were passed on to consumers.
Newest Line of Business for Big Banks: Slumlording
ByDan Radovsky - DailyFinance.com
The nation's biggest bailed-out banks have unintentionally entered a new line of work: slumlording. In some cases, major banks have created whole neighborhoods of abandoned and deteriorating foreclosure properties -- and a blight on local municipalities.
Now, Los Angeles has decided to do something about it, by naming the German banking giantDeutsche Bank(DB) the city's biggest slumlord.
L.A. is suing the lender, claiming that it has illegally evicted tenants and allowed foreclosed homes to deteriorate. The city's also considering suingUS Bancorp(USB), BNY Mellon (BK), andHSBC(HBC) for not keeping up their own foreclosed properties. There Goes the Macro-Neighborhood
Minnesota shuts down — to Pawlenty's benefit?
By Michael A. Fletcher - WashingtonPost.com
Minnesota’s government shutdown is into its second week, paralyzing all but essential state government services, leaving 20,000 employees out of work and sullying the state’s reputation for bipartisan cooperation.
So why is Tim Pawlenty happy?
The former two-term Minnesota governor is seizing on the shutdown to boost his struggling presidential campaign.
Pawlenty (R) is shrugging off critics who accuse him of not repairing Minnesota's structural budget problems during his tenure, and using the shutdown to highlight his gubernatorial record of balancing budgets without raising taxes.
No, We Can't? Or Won't?
By PAUL KRUGMAN - NYTimes.com
If you were shocked by Friday's job report, if you thought we were doing well and were taken aback by the bad news, you haven’t been paying attention. The fact is, the United States economy has been stuck in a rut for a year and a half.
Yet a destructive passivity has overtaken our discourse. Turn on your TV and you’ll see some self-satisfied pundit declaring that nothing much can be done about the economy’s short-run problems (reminder: this "short run" is now in its fourth year), that we should focus on the long run instead.
This gets things exactly wrong. The truth is that creating jobs in a depressed economy is something government could and should be doing. Yes, there are huge political obstacles to action — notably, the fact that the House is controlled by a party that benefits from the economy's weakness. But political gridlock should not be conflated with economic reality.
Fed chief to face grilling after weak jobs report
By Paul Wiseman - AP - AOLNews.com
WASHINGTON -Federal Reserve Chairman Ben Bernanke may feel surrounded when he testifies before Congress this week.
From his left, Democrats will demand to know what the Fed can do to create jobs, especially after the government reported last week that unemployment rose to 9.2 percent in June and the economy generated just 18,000 net new jobs.
From his right, Republicans will likely question the Fed's complicity in high energy and food prices.
"The Fed has become a very convenient whipping post for members of Congress," says Sarah Binder, a George Washington University political scientist who has studied the Fed's relations with Congress.
But Bernanke won't just play defense.
Here's Why Small Business Isn't Hiring, and Won't be Hiring The reasons why small businesses aren't hiring are structural;
the dearth of jobs is not temporary, and this is not a "soft patch,"
it is quicksand.
BY CHARLES HUGH SMITH - FinancialSense.com
The low job growth in the U.S. isn't a "soft patch," it's a sea of quicksand. In a nutshell, here's the situation: 2/3 or more of all job growth comes from small businesses starting up and expanding; only a third or less of new jobs come from Corporate America or government expansion.
As recent reports have shown, Corporate America has been on a hiring spree--overseas. From the point of view of globalized Corporate America, why hire anyone in a slow-growth market like the U.S.? It makes sense to hire new employees in fast-growing markets where the corporation is reaping its growth and most of its profits.
As for government hiring: the game of expansion based on explosively rising debt or Federal stimulus spending is over. To live within their means, local goverment and related agencies will have to shed jobs, as labor accounts for 80% of government expenses.
Jobs numbers underscore dilemma over agreement
By Patrice Hill-The Washington Times
The economy’s sudden downshift in growth and employment in recent weeks has increased the urgency for President Obama and Congressto reach a debt-reduction deal at the same time it has made their task more difficult.
A steep drop in job growth in May and June to less than a tenth of the monthly rates of more than 200,000 jobs earlier this year, as seen in Friday’s report, means that the 2-year-old economic recovery, rather than gathering steam as economists widely expected this year, suddenly has become halfhearted and vulnerable to shock from a sharp pullback in federal spending.
Just 58.2% of American Adults Are Employed
By Daniel Indiviglio - TheAtlantic.com
One of the many startling results in Friday's unemployment report for June was how few American adults are currently employed. Even though the unemployment rate is technically 9.2%, the employment-population ratio fell to 58.2%, matching its recession low. But it might help to put this number into perspective: just how bad is it?
Here's the historical chart for the employment population ratio (green), with the unemployment rate also plotted (red) using the right axis: [see chart]
Prior to this recession, the unemployment-population ratio hasn't been this low since 1983. At that time, it actually dropped all the way down to around 57%. But it didn't have as far to fall, having maxed out at just 60% in the years prior. Prior to the recent recession, the ratio was above 63%.
What Happened to the Jobs?
BY JOHN MAULDIN - FinancialSense.com
The US jobs report came out this morning, and it was simply dismal. This week we look at not only the jobs report but also "what-if" proffers for the US and global economies. There's a lot to cover, so let’s jump in.
First, there were only 18,000 jobs created in June, the lowest since September 2010. While private employment rose by 57,000, government workers dropped by 39,000, continuing a trend as governments at all levels work to cut their budgets. Long-time readers know I think it is important to look at the direction of the revisions, and we got no help. May was revised down by 29,000 jobs and April a further down 15,000.
A Wile E. Coyote Market
BY JOHN HUSSMAN PHD - FinancialSense.com
Friday's employment report, showing an increase of 18,000 in non-farm payrolls and a jump in the unemployment rate to 9.2% was widely viewed as a "shocker." Frankly, I don't understand the surprise. Between February and April, weekly new claims for unemployment(4 week average) dipped below 400,000, which was associated with a few months of nice growth in non-farm payroll employment. Since then, weekly unemployment claims have moved higher, and have been running at an average near 425,000 new claims weekly. Historically, that's a level that's fairly well correlated to roughly zero growth in non-farm payrolls. The data is certainly very choppy from month-to-month, which is enough to produce surprises around that average, but the errors also tend to mean-revert, meaning that unexpected job growth figures one month tend to be corrected in the opposite direction (where the "expectation" is taken on the basis of the weekly claims figures).
Cisco Said to Be Cutting as Many as 10,000 Jobs
By Ashlee Vance, Olga Kharif and Zachary Tracer - Bloomberg.com
Cisco Systems Inc. (CSCO), the largest networking-equipment company, may cut as many as 10,000 jobs, or about 14 percent of its workforce, to revive profit growth, according to two people familiar with the plans.
The cuts include as many as 7,000 jobs that would be eliminated by the end of August, said the people, who asked not to be identified because the plans aren’t final. Cisco, based in San Jose, California, is also providing early-retirement packages to about 3,000 workers who took buyouts, the people said.
Southwest: Layoffs not part of merger
Dallas Business Journal - by By Matt Joyce, Staff Writer
Bob Jordan, the Southwest Airlines executive charged with leading AirTran Airways during the merger of the two airlines, said the combined company does not intend to lay off any employees.
Southwest appointed Jordan as president of AirTran in May, shortly after Southwest bought the Orlando-based airline for $1.4 billion.
Southwest is now working through the process of merging the two companies with a target completion date of mid-2014, Jordan said. The combined company has about 43,000 employees, including 35,000 from Southwest and 8,000 from AirTran.
"There’s no target head count," Jordan said in an interview with the Dallas Business Journal.
Survey finds small businesses not ready to hire
Cite sales, regulations, uncertainty
By Tim Devaney-The Washington Times
A majority of U.S. small businesses fear the economy is on the "wrong track" and do not plan to increase hiring in the coming year, according to a new survey from the U.S. Chamber of Commerce Monday.
"In other recoveries, growth came roaring back and so did jobs," U.S. Chamber of Commerce President Tom Donohue told business leaders at a jobs summit the Washington-based group held on Monday. "But that’s not happening this time."
The study found that 64 percent of small businesses are afraid to make new hires in the near future, although only 12 percent plan to cut jobs.
The Chamber study follows last week’s dismal jobs report from theLabor Department that found hiring has stalled for the second straight month and the unemployment rate has ticked up to 9.2 percent.
Amazon to put fourth facility in Phoenix
Phoenix Business Journal - by Lynn Ducey
Amazon.com will build a fourth facility in the Phoenix area, the continuation of the Seattle-based company’s business in the state and a reflection of the Internet giant’s sales tax problems with other states.
Leaders made the announcement on Thursday regarding the fourth facility during a gathering to celebrate Amazon's third Valley facility, which opened about a year ago.
35% of Americans own a smartphone
Dallas Business Journal -
by Cromwell Schubarth, Silicon Valley/San Jose Business Journal
About 35 percent of Americans own a smartphone, with the highest adoption among the financially well-off and well-educated, non-whites and those under the age of 45.
Those are the conclusions of a new Pew Research Center report released on Monday.
About 87 percent of smartphone owners told Pew that they access the Internet or email on their handheld, with two-thirds saying they do so on a typical day.
Promenade in Scottsdale sells for $110 million
Phoenix Business Journal - by Jan Buchholz
Excel Trust Inc. purchased the Promenade in Scottsdale for $110 million. The blockbuster sale is one of the largest commercial transactions in the Valley in several years.
Lucescu Realty in Newport Beach, Calif., announced in a press release that the sale closed today. Excel Trust (NYSE: EXL) is a publicly traded real estate investment trust based in San Diego.
Carlos Montes and the Security State: A Cautionary Tale
By Chris Hedges - Truthdig.com
On May 17 at 5 in the morning the Chicano activist Carlos Montes got a wake-up call at his home in California from Barack Obama’s security state. The Los Angeles County sheriff’s SWAT team, armed with assault rifles and wearing bulletproof vests, as well as being accompanied by FBI agents, kicked down his door, burst into his house with their weapons drawn, handcuffed him in his pajamas and hauled him off to jail. Montes, one of tens of thousands of Americans who have experienced this terrifying form of military-style assault and arrest, was one of the organizers of the demonstrations outside the 2008 Republican National Convention in St. Paul, Minn., and he faces trial along with 23 other anti-war activists from Minnesota, as well as possible charges by a federal grand jury.
The widening use of militarized police units effectively nullifies the Posse Comitatus Act of 1878, which prohibits the use of the armed forces for civilian policing. City police forces have in the last few decades amassed small strike forces that employ high-powered assault rifles, armored personnel carriers, tanks, elaborate command and control centers and attack helicopters. Poor urban neighborhoods, which bear the brunt of the estimated 40,000 SWAT team assaults that take place every year, have already learned what is only dimly being understood by the rest of us—in the eyes of the state we are increasingly no longer citizens with constitutional rights but enemy combatants. And that is exactly how Montes was treated. There is little daylight now between raiding a home in the middle of the night in Iraq and raiding one in Alhambra, Calif.
NEW DEFENSE SECRETARY SPREADS BUSH’S LIES ABOUT IRAQ
Truthdig.com
Leon Panetta seems to be confusedabout what administration he works for. On a world tour of America's endless wars, the new defense secretary said to a gathering of troops in Iraq, "The reason you guys are here is because on 9/11 the United States got attacked." And one of the reasons Panetta’s boss is in the White House is because he took a more realistic view.
Panetta later said, "I wasn't saying, you know, the invasion—or going into the issues or the justification of that. It was more the fact that we really had to deal with al-Qaida here; they developed a presence here and that tied in."
China's top general calls U.S. naval exercises inappropriate
By Shaun Waterman-The Washington Times
Beijing's top military leader on Monday called for U.S. forces to halt joint naval exercises with China's neighbors in the South China Sea and issued a string of complaints about U.S. policy after meeting his U.S. counterpart.
"It's not a proper time for the United States to conduct military drills in the region with the Philippines and Vietnam," said Gen. Chen Bingde, chief of the general staff of the People's Liberation Army during a news briefing with Adm. Mike Mullen, chairman of the Joint Chiefs of Staff.
Gen. Chen also criticized U.S. military spending and economic policies in unusually candid remarks.
Webster Tarpley World Crisis Radio 07-09-2011 Pt. 1
Webster Tarpley World Crisis Radio 07-09-2011 Pt. 2
Webster Tarpley World Crisis Radio 07-09-2011 Pt. 3
Webster Tarpley World Crisis Radio 07-09-2011 Pt. 4
Webster Tarpley World Crisis Radio 07-09-2011 Pt. 5
Webster Tarpley World Crisis Radio 07-09-2011 Pt. 6
Webster Tarpley World Crisis Radio 07-09-2011 Pt. 7
Webster Tarpley World Crisis Radio 07-09-2011 Pt. 8
Regulators Close Three Banks; Failure Toll Rises To 51 In 2011
RTTNews.com
(RTTNews) - The Federal Deposit Insurance Corp. or FDIC on Friday announced the failure of three banks, bringing the bank failure toll to 51 in 2011. Regulators shut a bank in Illinois and two in Colorado on Friday and the FDIC estimates that the cost to the Deposit Insurance Fund or DIF, by the three bank closures will be a total of $590.4 million. First Chicago Bank & Trust of Chicago, Illinois, had about $959.3 million in total assets and $887.5 million in total deposits, was closed, the FDIC stated.... Colorado Capital Bank of Castle Rock, Colorado, was closed and First-Citizens Bank & Trust Company of Raleigh, North Carolina, would assume its deposits....
Another Colorado bank, Signature Bank of Windsor was closed and the Points West Community Bank of Julesburg, Colorado, will assume the failed bank's deposits.
Debt Talks Back to Square One Deficit Negotiators Hit Reset Divisions on Spending Cuts and Tax Increases Remain
as Debt-Limit Clock Ticks
By CAROL E. LEE, JOHN D. MCKINNON
and NAFTALI BENDAVID - WSJ.com
The White House and Republican leaders in Congress embarked on a new effort Sunday to cut the federal deficit, one that now appears to have been shorn of its most ambitious elements, including revamping the tax code and significantly reducing growth in benefit programs.
President Barack Obama and the top eight congressional leaders from both parties met at the White House for 75 minutes Sunday night in attempt to piece together a scaled-down package. It wasn't clear if the leaders made progress on reaching a deal that could win support from conservatives opposed to tax increases and liberals opposed to Medicare cuts.
Aides to two leaders in the meeting said the group tentatively plans to meet again Monday.
A Ceiling We Can't Wish Away We Cannot Pretend the Debt Ceiling Is Unconstitutional
By LAURENCE H. TRIBE,
a professor
of constitutional law at Harvard - NYTimes.com
ON May 16, the United States hit its legal debt limit of $14.3 trillion. Unless that limit is raised, the Treasury will, on Aug. 2, be unable to pay its bills. It will then have to either stop spending money on government programs, or default on paying the nation’s creditors.
The White House and Congressional Republicans agree in principle that the debt ceiling needs to be raised, but they are at an impasse on how to constrain the deficit’s rapid growth. Meanwhile, some people have theorized that there’s a way to get around the debt limit.
Several law professors and senators, and even Treasury Secretary Timothy F. Geithner, have suggested that section 4 of the 14th Amendment, known as the public debt clause, might provide a silver bullet. This provision states that “the validity of the public debt of the United States, authorized by law ... shall not be questioned.” They argue that the public debt clause is sufficient to nullify the ceiling — or can be used to permit the president to borrow money without regard to the ceiling.
Geithner Wants Biggest Budget-Deficit Cut Possible Now,
No Short-Term Deal
By Ian Katz and Susan Decker - Bloomberg.com
Treasury Secretary Timothy F. Geithner said the Obama administration wants the most comprehensive deficit-cutting deal possible and reiterated that failing to raise the debt limit could have "catastrophic" consequences.
"We have to find a way to pass an agreement, but the president is going to keep working toward the largest deal we can do, because that’s the right thing for the country," Geithner said today on NBC's "Meet the Press" program.
Obama and congressional leaders are seeking a deficit- slashing deal to pave the way for a vote in Congress to increase the government's $14.3 trillion debt limit, a move the Treasury Department says is needed by Aug. 2 to avert a default on the nation’s financial obligations.
U.S. Default Would Be 'Catastrophic'
But It Won't Happen, Geithner Says
FoxNews.com
Treasury Secretary Timothy Geithner said Sunday that a failure to raise the debt ceiling by Aug. 2 would be "catastrophic" to the economy, though he and other top officials expressed confidence that lawmakers would ultimately vote to lift the $14.3 trillion cap in time.
Geithner spoke in depth about the consequences of missing the early August deadline. Noting that the government writes about 80 million checks a month, he said everything from Medicaid payments to checks for U.S. troops could be in jeopardy. He said interest rates could rise the closer the country gets to Aug. 2 without a deal and that if the debt ceiling is not increased by then, credit rating agencies could follow through on threats to downgrade the United States' sterling credit rating.
The Sovereign Debt Crisis Is Never Going To End
Until There Is A Major Global Financial Collapse
ThEconomicCollapseBlog.com
In the past, there certainly have been governments that have gotten into trouble with debt, but what we are experiencing now is the first truly global sovereign debt crisis. There has never been a time in recorded history when virtually all of the governments of the world were drowning in debt all at the same time. This sovereign debt crisis is never going to end until there is a major global financial collapse. There simply is no way to unwind the colossal web of debt that we have constructed in an orderly fashion. Right now the EU and the IMF have been making "emergency loans" to nations such as Greece, Ireland and Portugal, but that is only going to buy those countries a few additional months. Giving more loans to nations that are already drowning in red ink may "kick the can down the road" for a little while but it isn't going to solve anything. Meanwhile, dozens more nations all over the globe are rapidly approaching a day of reckoning.
Boehner to Seek Smaller $2 Trillion Deal
By CAROL E. LEE and COREY BOLES - WSJ.com
WASHINGTON--House Speaker John Boehner (R., Ohio) said the White House and congressional leaders have stopped pursuing the major deficit-reduction deal tackling entitlement programs and an overhaul of the tax code that he and President Barack Obama had been seeking.
A statement from Mr. Boehner issued late Saturday, after a conversation with Mr. Obama, said efforts by both parties to reach a deal to reduce the federal deficit by $4 trillion over the next decade reached an impasse this weekend over the issue of taxes. Mr. Boehner said negotiators will instead work toward an agreement closer to $2 trillion.
"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," Mr. Boehner said. "I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase."
Boehner's Obama Gamble
WSJ.com - opinion
A tax increase now for the promise of tax reform later won't fly.
By President Obama wants Congress to raise the $14.3 trillion national debt limit, which means he needs House Republican votes. Yet Mr. Obama and the Washington chorus are insisting that in return for doing him the favor of voting to raise that limit, Republicans must also do him another favor by raising taxes.
That's the larger political context for the news that House Speaker John Boehner and Mr. Obama have agreed to go for a big bang debt-limit deal that cuts spending and raises taxes far more than everyone expected. The target is now said to be $4 trillion over 10 years, though that's far less important than the details, which are still murky.
Obama: Debt deal or danger within 10 days President to continue talks with Boehner, others about 'big' idea
By Sean Lengell-The Washington Times
President Obama continued his ongoing budget talks with congressional leaders at the White House on Sunday evening, saying "we need to" broker a deal to increase the nation’s debt ceiling within 10 days or risk another financial crisis.
The meeting broke up after about 75 minutes, according to a White House pool report. No participants made any announcements immediately, though aides had told reporters that the meetings would continue Monday.
House Speaker John A. Boehner attended the meeting after saying a day earlier that he wouldn't accept the president's call for a large-scale debt-reduction package without tax increases, fueling speculation the Ohio Republican may boycott the talks.
Economic Collapse 101 for Dummies
Taxes Upon Taxes Upon . . . Obama wants $1 trillion in taxes
on top of what he's already signed.
WSJ.com - opinion
So the fondest Washington hopes for a grand debt-limit deal have broken down over taxes. House Speaker John Boehner said late Saturday that he couldn't move ahead with a $4 trillion deal because President Obama was insisting on a $1 trillion tax increase, and the White House quickly denounced House Republicans for scuttling debt reduction and preventing "the very wealthiest and special interests from paying their fair share."
How dare Republicans not agree to break their campaign promises and raise taxes when the jobless rate is 9.2% and President Obama's economic recovery is in jeopardy?
We think Mr. Boehner is making the sensible choice. No one wants to reform the tax code more than we do, but passing a $1 trillion tax increase first on the promise of tax reform later is a political trap. If the President were really sincere about reform and a willingness to keep the top tax rate at or below 35%, he'd negotiate that at the same time he does a debt deal. Mr. Boehner will have a hard enough time getting any debt-limit increase through the House, much less one that raises tax rates.
The West is in for a rude awakening
after years of abusing 'risk-free' debt The global economy faces a unique double threat. The eurozone, of course, remains on the brink of a major, perhaps terminal, crisis. Then there's the small matter of the US Congress possibly "closing down" the government of the largest economy on Earth.
By Liam Halligan - Telegraph.co.uk
Although separate, these dangers are intimately related. Both have their roots in grotesque and utterly unsustainable levels of government debt. For it's the massive sovereign liabilities not just of the eurozone "periphery", but some of the "core" nations too, that could yet cause the single currency to break up – an end-game "cranks" like me have been predicting for almost 20 years, but which now even the most slavish Europhiles must accept is possible. A "euroquake", were it to happen, would send financial shockwaves across the world.
Similarly, it is the possible refusal of American lawmakers to raise their country's sovereign debt ceiling that could yet cause a "run" on US Treasuries. This outcome too, were it to take place, would seriously undermine global markets given the habit, nay culturally conditioned reflex in some cases, of so many big institutional investors to use Uncle Sam's IOUs as a "safe haven" to park their funds.
The next, worse financial crisis Ten reasons we are doomed to repeat 2008
By Brett Arends, MarketWatch
BOSTON (MarketWatch) — The last financial crisis isn’t over, but we might as well start getting ready for the next one.
Sorry to be gloomy, but there it is. Why? Here are 10 reasons.
1. We are learning the wrong lessons from the last one. Was the housing bubble really caused by Fannie Mae, Freddie Mac, the Community Reinvestment Act, Barney Frank, Bill Clinton, “liberals” and so on? That’s what a growing army of people now claim.There’s just one problem. If so, then how come there was a gigantic housing bubble in Spain as well? Did Barney Frank cause that, too (and while in the minority in Congress, no less!)? If so, how? And what about the giant housing bubbles in Ireland, the U.K. and Australia? All Barney Frank? And the ones across Eastern Europe, and elsewhere? I’d laugh, but tens of millions are being suckered into this piece of spin, which is being pushed in order to provide cover so the real culprits can get away. And it’s working.
Gerald Celente - RTTV 07 July 2011
The first cut always the deepest
America turning into a 3rd world country and still not a single politician out there talking about these issues except for maybe one or two.
I think sometimes the calamity must hit in order for the sleeping people to wake up.
To me the root problem is zionism. 1 trillion $ wars in mideast is for them. Then you have all the aipac appointed politicians who have money for israel but not the town she mentioned in texas & the other states in need.
Italian sell-off prompts emergency euro zone meet
By MarketWatch
SAN FRANCISCO (MarketWatch) — Top officials of the European Council, the European Central Bank and the European Commission will hold an emergency meeting Monday to discuss the possibility that the debt crisis could spread to Italy from Greece, according to a media report Sunday.
The meeting comes in the wake of the sharp sell-off in Italian assets on Friday, Reuters reported, citing three unnamed official sources.
On Friday, Italian government bond yields jumped, as did the cost of insuring Italian sovereign debt against default, as worries grew over Finance Minister Giulio Tremonti’s possible exit.
Italy and Spain must pray for a miracle Once again Europe's debt crisis has metastasized, and once again the financial authorities face systemic contagion unless they take immediate and dramatic action.
By Ambrose Evans-Pritchard - Telegraph.co.uk
If the ECB's Jean-Claude Trichet is right in claiming that Europe was on the brink of a 1930s financial cataclysm a year ago - and I think he is - it is hard see how the threat is any less serious right now.
Fall-out from Greece flattened Portugal and Ireland last week. It is engulfing Spain and Italy, countries with €6.3 trillion of public and private debt between them.
Yields on Italian 10-year bonds hit a post-EMU high of 5.3pc on Friday. This is not just a theoretical price: the Italian treasury has to roll over €69bn (£61bn) in August and September; it must tap the markets for €500bn before the end of 2013. The interest burden on Italy's €1.84 trillion stock of public debt is about to rise very fast.
Top EU officals meet over Italy debt contagion fears Top European Union officials will meet in Brussels on Monday morning to discuss the growing eurozone debt crisis amid fears that Italy could be the next country to be affected.
By James Hall - Telegraph.co.uk
They will also "coordinate their positions" on the second Greek rescue package as Europe's debt crisis threatens to deteriorate further.
The meeting comes as the Financial Times reported that leaders are prepared to accept that Athens should default on some of its bonds. The newspaper said the move would be part of a new bail-out plan for Greece that would put the country’s overall debt levels on a sustainable footing. The plan could also include new concessions by Greece’s European lenders to reduce Athens’ debt, such as further lowering interest rates on bail-out loans and a broad-based bond buyback programme.
Italy is the region's third largest economy and after Greece has the second highest sovereign debt ratio in the eurozone relative to its overall economy.
EU calls emergency meeting as crisis stalks Italy
By Luke Baker - BRUSSELS
(Reuters) - European Council President Herman Van Rompuy has called an emergency meeting of top officials dealing with the euro zone debt crisis for Monday morning, reflecting concern that the crisis could spread to Italy, the region's third largest economy.
European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region's financeministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters.
Van Rompuy's spokesman Dirk De Backer said: "It's a coordination, not a crisis meeting." He added that Italy would not be on the agenda and declined to say what would be discussed.
Lessons of Argentina crisis ignored in handling of Greece For a vision of how the Greek debt meltdown is going to end, look no further than the International Monetary Fund's post mortem into a similar crisis that came to a head almost exactly a decade ago - Lessons From The Crisis In Argentina.
By Jeremy Warner - Telegraph.co.uk
Originally published in October 2003, this policy review document was signed off by a then relatively unknown IMF official called Tim Geithner, now the US Treasury Secretary no less.
Strangely enough, he seems entirely to have forgotten about this eight-year-old tome, whose candid and illuminating account of Argentina's descent into economic and fiscal chaos, and the not inconsiderable role the IMF played in the process, provides an object lesson in how not to proceed.
Greece Gets Approval for $4.6 Billion
IMF Disbursement Under Joint Bailout
By Sandrine Rastello - Bloomberg.com
Greece won approval from the International Monetary Fund for a 3.2 billion-euro ($4.6 billion) payment under a joint loan with the European Union, buying policy makers time to craft a second rescue package and avert the first sovereign default in the euro region.
Greek commitments made to secure the loan are "delivering important results," IMF Managing Director Christine Lagarde said yesterday in statement from Washington. Still, "a durable fiscal adjustment is needed, lest the deficit get entrenched at an unsustainably high level, and productivity-enhancing reforms should be accelerated, lest growth fail to recover."
Max Keiser report 162.
More Informed news of the Banker Occupation.
EU stance shifts on Greece default
[free article pass - Google the title]
By Peter Spiegel in Brussels and Patrick Jenkins in London
European leaders are for the first time prepared to accept that Athens should default on some of its bonds as part of a new bail-out plan for Greece that would put the country’s overall debt levels on a sustainable footing.
The new strategy, to be discussed at a Brussels meeting of eurozone finance ministers on Monday, could also include new concessions by Greece’s European lenders to reduce Athens’ debt, such as further lowering interest rates on bail-out loans and a broad-based bond buyback programme. It also marks the possible abandonment of a French-backed plan for banks to roll-over their Greek debt.
The Greek B.I.S. Currency Gold Swap What of Greece's 111 tonnes of gold?
BY JULIAN PHILLIPS - FinancialSense.com
It is pure conjecture on our part to link the gold holdings of three of the Eurozone’s financially weakest members to the B.I.S.
In the first quarter of 2010 the B.I.S. recorded the jump in gold holdings that it had acquired. Four years prior to that Portugal and Spain had sold gold through the Central Bank Gold Agreement on the open market. So we do not link sales under that agreement with these B.I.S. transactions.
The B.I.S. acquired this gold though a set of Currency / Gold arrangements the details of which have not been made public. But it was at about this time that the Eurozone debt crisis reared its ugly head. In advance of any rescue plans, when the respective central banks probably first began discussions on the matter it would have been deemed prudent to make a collateral arrangement using the asset of last resort, gold, to secure their gold against any future bailout package being offered.
Euro Falls to Two-Week Low on Debt Concern
By Candice Zachariahs and Monami Yui - Bloomberg.com
The euro fell to a two-week low against the dollar and yen on concern that Europe’s sovereign- debt crisis may spread to Italy as policy makers remain divided on how to structure aid for Greece.
The euro dropped against most of its major peers after Die Welt reported that the European Central Bank is seeking to expand a fund to include help for Italy, following a coordinated rescue for Greece by the European Union and International Monetary Fund. Higher-yielding currencies including Australia's dollar fell amid concern China will take further action to cool growth. Malaysia’s ringgit declined before data that may show industrial production slid for a second month.
Fed on Hold Longest Since 1940s
By Daniel Kruger - Bloomberg.com
The Federal Reserve may keep interest rates at record lows for the longest period since World War II as the economic slowdown that sparked a four-month bond rally worsens, according to Treasury market signals.
The 3 percentage point gap between yields for three-month and 10-year Treasuries indicates the economy may grow 1.1 percent in the 12 months ending June 2012, a study by the Fed Bank of Cleveland says. That’s less than half the central bank’s current forecast, and may delay any rate increase from the zero- to-25 basis point range held since December 2008.
Gold is now in transition from commodity to currency $1850 gold still possible this year;
don't rule out $10000 long term - Hommelberg
CommodityOnline.com The Gold Report: Metals and commodities guru, Jim Sinclair, says that gold is acting as a barometer of economic anxiety at the moment. Do you agree with that assessment? Eric Hommelberg: I am more apt to call gold a barometer of our financial system's health. When things get out of control and people start losing confidence in what governments and central banks are doing, then gold will start to outperform all fiat currencies in the world. That's the transition from gold as a commodity to gold as currency. Today, gold has already reasserted itself as currency of choice since gold has outperformed all world currencies already for quite some time now.
Gold and silver as money - reasons and relevance today Why is gold - and perhaps to a lesser extent silver - considered as money? Ronald Stoeferle examines the historical reasons and why they are still just as valid today.
Author: Ronald Stoeferle - MineWeb.com
The need for a stable means of exchange is as old as mankind. Cigarettes, seashells, salt, goats, dried fish, or paper all fulfilled that role at some point. Their scarceness in relation to annual production made them bad items of value storage; most commodities come with an annual flow that outweighs the stock by a long shot. Therefore in the long run only gold and silver prevailed.
MISES EXPLAINS HOW MONEY WAS CREATED
The regression theorem that Ludwig von Mises postulated in "The Theory of Money and Credit" is a pivotal piece when it comes to our understanding of the monetary character of gold. It says that the expectation with regard the future purchase power of money depends crucially on the knowledge about today's purchase power of money. . Today's evaluation of purchase power in turn is derived from yesterday's purchase power.
Negative Real Interest Rates
Continue to Provide Gold With a Perfect Environment
Written by Ronald Stoeferle - OilPrice.com
Inflation has never been the primary driver of the gold sector on its own. Given that gold, as is well known, does not pay interest, the real interest rates equal the opportunity costs. During the 20 years of the gold bear market in the 1980s and 1990s, real interest rates were about 4%. They were negative in only 6.7% of the months. The situation was completely different in the 1970s. Real interest rates were negative in 54% of the months. Since 2000 real interest rates have been negative in 47% of the months, which constitutes an optimal environment for gold.
Firmer outlook for Gold as US debt-ceiling talks continue
CommodityOnline.com
(Kitco News) - The outlook for Gold prices next week is moderately bullish as gold analysts say ongoing political wrangling regarding an increase in the U.S. debt ceiling will likely prove supportive to the yellow metal.
While the short-term bias for gold is bullish, overall analysts don't expect the market to break out of the recent two-month plus trading range.
August gold futures on the Comex division of the New York Mercantile Exchange settled Friday at $1,541.60 an ounce, up 4%, for the week. September Silver prices settled at $36.543 an ounce up 8%, from the prior week’s close.
Gold price to go bullish next week
CommodityOnline.com
Safety buying on worries about the U.S. economy and the ongoing European debt saga are likely to underpin Gold prices next week, most participants in Kitco News’ weekly gold survey said.
In the Kitco News Gold Survey, out of 34 participants, 23 responded this week. Of those, 16 see prices up, while four see prices down and three see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.
Gold was higher in the early part of this week, largely on worries about ongoing European debt issues, then got an added boost Friday from a softer-than-forecast U.S. employment report.
The Silver Platter Opportunity
BY JIM WILLIE - FinancialSense.com
Every few years, a tremendous opportunity arises. The autumn months of 2007 and the autumn months of 2008 offered such an opportunity to buy silver. That $11 silver price is long gone. Many smart folks seized it. Whatever can be said on such silver platters applies almost equally to gold. The silver sprint gains are typically much larger than the gold steady gains. The coming autumn months will feature a gaggle of supposed financial analyst experts backpeddling in their hasty damage control. They have been broadcasting a wide assortment of low level propaganda posing as competent analysis, as they attempt to make the point that the anti-USDollar trade is done, the gold trade is over, the silver trade is spent. They are so wrong. A comedy of clumsy oafs and dolts on the Wall Street payroll awaits the public in a grand chapter on stage. They will struggle to explain the move in silver over $50 on its way to $80 per ounce. They will struggle to explain the move in gold over $1600 and then $1700 per ounce. The mainstream news has been deeply involved in a delicate balancing act. They must report the news, but it is almost all very bullish for the precious metals. A new financial mini-disaster unfolds almost every week. Last two weeks were Greece. The next week might be Portugal. They must report the news, but it paints a picture of a broken monetary system with debased currencies. They must report the news, but it openly provides the gory blow by blow details of ruined sovereign debt. The United States debt situation is Greece times one hundred.
OBAMA TRASHES LAND SOVEREIGNTY !!!!
EXECUTIVE ORDER 13575
(401)k law actually hurts savings
Dayton Business Journal - by George Donnelly
A law that permits companies to automatically enroll employees into 401(k) retirement plans is backfiring for many workers, according to a report in the Wall Street Journal.
The 2006 401(k) law has widened the participation in 401(k)s, creating a default mechanism to enroll new workers. But the law has actually led to less money going into 401(k) plans for about 40 percent of enrollees, according to research commissioned by the Wall Street Journal.
Credit Cards Stage a Comeback! Time to Worry? Revolving balances jumped 5.1% in May, the most in three years
By Daniel Indiviglio - TheAtlantic.com
On Friday, everyone was so consumed by the ugly unemployment numbers that another economic report went mostly unnoticed. Credit card balances in May rose at the annualized rate of 5.1%. That's the fastest they've grown in three years. Unfortunately, this is likely more bad news.
To see the significance of May's increase in credit card balances, here's some history from the Federal Reserve's data: [chart]
The only other month since September 2008 when balances rose was in December 2010, which may have been a temporary increase due to holiday shopping. As you can see, consumers quickly erased that gain the following month, paying off their card purchases.
US unemployment data and how it will impact gold, silver
By Jeb Handwerger - CommodityOnline.com
At times such as these the economy reminds us of the inscription that Dante read posted to the gates to hell, "Abandon Hope, All Ye Who Enter Here." Gold Stock Trades takes a different view of this grim admonition. At the risk of sounding pollyanish we should look for the Silver lining instead of succumbing to panic.
Can the economy get any worse from here? Perhaps, yet the situation brings to mind an old aphorism, "The worse things were...the better they got." The Gershwin Brothers put the same thought another way- "With gloom to Lead the way, I've seen more skies of gray, then any Russian play can guarantee." The time to buy stocks is when the lumpen are terrified, instead of euphoric.
For Small Businesses, Recession Isn't Over
By DANA MATTIOLI And SARAH E. NEEDLEMAN - WSJ.com
Many big public companies are likely to report strong second-quarter profits, but that isn't the story on Main Street, where small businesses are grappling with jittery customers, rising costs and tight credit.
The owners of many small businesses say economic uncertainty and inflationary pressures have led them to delay hiring and capital expenditures. Seventy percent have no plans to expand their staffs over the next 12 months, according to a recent U.S. Bancorp survey of 1,004 U.S. companies with annual revenue of $10 million or less.
Small Businesses Decry Regulation
By SARAH E. NEEDLEMAN - WSJ.com
Federal regulations are designed to protect workers, the public and the environment from unsafe or unfair business practices. But they can sometimes have the unintended consequence of stifling growth.
According to research released last year from the Small Business Administration's Office of Advocacy, it costs about $2,830 more for firms with less than 20 employees than those with 500 or more employees to comply with government regulations on a per-employee basis. In specific areas such as tax and environmental compliance, firms with 20 to 499 employees also pay significantly more than large firms.
Truck Firms Gird for New Limits Calculating Human, Business Costs of a Shorter Driving Day
By ANGUS LOTEN - WSJ.com
Keith Tuttle manages a fleet of trucks he says is making a narrow profit hauling empty aluminum cans from manufacturers in northwest Ohio to beer and soda makers in New Jersey, a 550-mile trip that takes 11 hours of driving for next-day deliveries. The trucks return with full cans for retailers in Ohio.
But under proposed federal rules aimed at improving highway safety by limiting daily driving hours for commercial truckers, Mr. Tuttle's drivers would get only about as far as Harrisburg, Pa., about 60 miles short of their destination, before having to take a break for the day.
Gerald Celente - Adam vs The Man 07 July 2011
Gerald Celente - China's Spring And The 1st Great War Of The 21st Century - Adam vs The Man . Gerald Celente, publisher of The Trends Journal, gives insight into what may be the 1st great war of this century.
How the bubble destroyed the middle class Sluggish growth is no mystery: No one has any money
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — A lot of people say they are deeply puzzled by the slow recovery in the U.S. economy. They look at the 9+% unemployment rate and the mediocre growth in national output, and they scratch their heads and wonder: Where is the boom that inevitably follows a deep bust, such as we experienced in 2008 and 2009?
But there is no mystery. What other result would you expect from the financial ruin of the once-great American middle class?
And make no mistake, the middle class has been ruined: Its wealth has been decimated, its income isn’t even keeping pace with inflation, and its faith in the American economy has been shattered. Once, the middle class grew richer each year, grew more comfortable, enjoyed a higher living standard. It was real progress in material terms.
Economy Faces a Jolt as Benefit Checks Run Out
By MOTOKO RICH - NYTimes.com
An extraordinary amount of personal income is coming directly from the government.
Close to $2 of every $10 that went into Americans' wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government.
By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year.
Behind the Dismal Employment Numbers, Rogue Wave Coming
By Lee Adler - WallStreetExaminer.com
In the Treasury Update that I posted yesterday in the Wall Street Examiner Professional Edition I warned that regardless of what the government numbers would show, the jobs situation was deteriorating badly. Based on real time Federal withholding tax data, there have been virtually no job gains since last year.
Here’s an excerpt from the July 7 Professional Edition Treasury update:
Month to date withholding taxes as of the end of June were down 4.6% from last year. Some of that was due to a calendar anomaly of a payment date for a biweekly and semimonthly pay period last year coming on June 1. That resulted in June receipts last year being inflated, making this June look worse than it was. A 4.6% drop would imply an economic collapse. In actuality it’s more of a stall, although I expect it to spiral down from here.
Rampant Unemployment = The Death Of The Middle Class
40 Facts That Prove The Working Class
Is Being Systematically Wiped Out
TheEconomicCollapseBlog.com
Without an abundance of good jobs, the middle class in the United States is going to shrivel up and die. Right now, rampant unemployment is absolutely killing communities all over America. Hopelessness and poverty are exploding and many are now wondering if we are actually witnessing the slow death of the middle class. There simply are not nearly enough "good jobs" to go around anymore, and even many in the mainstream media are referring to this as a "long-term structural problem" with the economy. The only thing that most working class Americans have to offer in the marketplace is their labor. If nobody will hire them they do not have any other ways to provide for their families. Well, there is a problem. Today wealth has become incredibly centralized. The big corporations and the big banks dominate everything. Thanks to incredible advances in technology and thanks to the globalization of our economic system, the people with all the money don't have to hire as many ordinary Americans anymore. They can hire all the labor they want on the other side of the globe for a fraction of the cost. So the rich don't really have that much use for the working class in America anymore. The only thing of value that the working class had to offer has now been tremendously devalued. The wealthy don't have to pay a lot for physical labor anymore. Thousands of our factories and millions of our jobs have been shipped overseas and they aren't coming back. The big corporations are thriving while tens of millions of ordinary Americans are deeply suffering. Almost all of the wealth being produced by our economy is going to a very centralized group of people at the very top of the food chain. The rich are getting richer and the working class is being systematically wiped out.
Thieves In Chatham Targeting Air Conditioners
CBS Chicago
CHICAGO (CBS) – Residents of the Chatham neighborhood have been put on notice to keep an eye on their air conditioners.
Thieves have been sneaking into back yards and crawling onto rooftops to steal entire central air conditioning units.
As CBS 2’s Kristyn Hartman learned, a rash of central air theft on the South Side prompted one neighborhood to put out a warning.
One Chatham resident, who asked to be identified only as "Randi" is using not one lock, but three, to protect her new air conditioner after thieves made off with her old one.
Asked if she ever thought someone would walk away with a central air unit, Randi said, "not in my wildest dreams."
She said whoever stole the air conditioner was obviously very professional, because they didn’t leave any bolts or screws behind and she didn't hear a thing.
The Handwriting Is on the Wall Learning cursive is going the way of the quill pen.
It's only the end of civilization as we know it
By THEODORE DALRYMPLE - WSJ.com
Fifty years from now, no one in Indiana—or at least, no one born and raised in Indiana—will be able to write cursive. On the other hand, everyone there will be able to type, and by then technology might have made the ability to sign your name redundant. If it has not, perhaps you will be able to hire an out-of-stater or immigrant to sign your will or marriage certificate for you.
State officials recently announced that Indiana schools will no longer be required to teach children to write longhand, so that students can focus on typing. This is because writing by hand is so very—well, so very 4000 B.C. to A.D. 2010. We have now entered a new era: A.H., After Handwriting.
New Flare-Up in Light-Bulb Wars Critics of Greater Federal Regulation
Push a Fresh Challenge to 2007 Law
By RYAN TRACY And STEPHANIE GLEASON - WSJ.com $$
[for a free article pass - Google the title]
The light-bulb wars are back on.
Energy Secretary Steven Chu came out swinging Friday against a House bill that would repeal a 2007 federal law effectively outlawing older forms of incandescent bulbs—an effort at energy conservation that has inflamed a wide swath of Americans who don't care for the more expensive alternatives.
In a conference call with reporters, Mr. Chu said the more-efficient bulbs required would save consumers money over the life of the product, even if the up-front price is higher.
"We are taking away a choice that continues to let people waste their own money," he said.
The 10 Scariest GOP Governors:
Bringing a Radical Right-Wing Agenda To a State Near You The 2010 election saw a right-wing sweep of many state governor's races, and those governors haven't been shy about pushing their conservative shock treatment.
By Sarah Jaffe - AlterNet.org
Ranking the worst Republican governors is next to impossible. Since the Tea Party sound and fury swept the Class of 2010 into power in swing states and even true-blue states like New Jersey, it's been more like a horse race between the main contenders. One will propose a law that seems so terrifying it could never make it through the legislature, let alone be topped. Then it passes, and in the blink of an eye another state's trying to outdo it.
These governors all have some things in common. Most of them were elected in 2010 while progressive turnout was depressed and conservative anger, particularly the virulent anti-government type springing from the Tea Party movement, spilled over at the polls. Many of them took over swing states from Democratic administrations. Most of them did not run on promises to take away collective bargaining from workers, slash pensions and health care and outlaw abortion. Instead, they focused on jobs—and, admittedly, their own solution to creating jobs, which is, of course, cutting taxes.
U S Dept. of Justice Accused of Racketeering Cover Up
FBI STEPS UP RAIDS ON ACTIVISTS’ HOMES
By ARK - Truthdig.com
In May, Los Angeles County Sheriff’s Department SWAT officers broke into the home of 63-year-old Carlos Montes, a prominent anti-war activist and organizer for working class causes, and arrested him on suspicion of illegal possession of a firearm. The occurrence of similar arrests suggests the FBI is staging a low-profile witch hunt.
The raid on Montes’ home is one of many that has taken place in the last year, in which suspects seem to be targeted for their political associations. The nearly two dozen individuals mentioned in the article below whose homes have been raided since September were involved in an anti-war protest at the 2008 Republican National Convention.
Rupert Murdoch's News Corp could face $100m bill
for US investigation into 'police payments' Rupert Murdoch's News Corporation empire could face a bill of more than $100m (£62m) if US authorities launch an investigation into corruption following allegations that the News of the World routinely made payments to police officers totalling more than £100,000. -- By Katherine Rushton - Telegraph.co.uk
If convicted the company would face a fine many times that size, lawyers have warned.
The Department of Justice (DOJ) and the Securities Exchange Commission (SEC) have been increasingly aggressive in bringing cases against corporations under America's Foreign Corrupt Practices Act (FCPA). They have so far imposed penalties as high as $800m on companies – such as Siemens – where there has been evidence of persistent and unaccounted for bribery.
FCPA experts told The Telegraph it would be "very surprising" if the DOJ didn't take action against News Corp, and would be likely to do so this week. Any FCPA probe against News Corp would damage its reputation and could further destabilisie James Murdoch's position as Rupert Murdoch's heir apparent.
Flash Mob at Cape Cod Stop and Shop - Spirit of America
Los Angeles braced for 'car-mageddon
as roadworks close the interstate 405 Closing the San Diego freeway for a weekend
for bridge rebuilding could bring
an already congested LA to a standstill
By Andrew Gumbel in Los Angeles - The Guardian
Other cities have traffic jams. Los Angeles is gearing itself up for "car-mageddon".
The City of Angels, already infamous for bumper-to-bumper extravaganzas that have inspired whole movies, is taking the unprecedented step of ordering the total closure of what is perhaps the most emblematic stretch of congested roadway in North America for one nightmarish weekend.
For 53 hours, from 7pm on the evening of Friday 15 July to the early hours of Monday 18 July, the San Diego freeway – referred to by local people, usually with a shudder, as 405, its interstate number – will be off limits between the San Fernando valley and the main LA basin.
Could Energy Resources Cause Russia
to Spark a Naval War in the Caspian?
Written by John Daly - OilPrice.com
In the past three decades the Islamic Republic of Iran has developed a well-earned sense of paranoia. First, in September 1980 Saddam Hussein invaded Iran in what he thought would be a quick military victory, but which quickly turned into an eight-year bloody slugfest, leaving an estimated 500,000-1,000,000 dead before the guns fell silent.
More recently Iran has been subjected to increasingly militant rhetoric from both Tel Aviv and Washington over its civilian nuclear energy program, with thinly veiled threats of possible military action if Tehran does not abandon its efforts, even though they are completely complaint under the terms of the Nuclear Non-Proliferation Treaty (NPT), which Iran has signed.
Now however, potential is brewing for Iran from an unexpected direction – the north.
US tax dollars remodeling mosques overseas
US suspends Pakistan military aid as diplomatic relations worsen Decision to withhold $800m taken as relations become increasingly fraught following the killing of Osama bin Laden
By Saeed Shah in Islamabad - Guardian.co.uk
The Pakistan military declared it did not need US military aid as the White House confirmed that it would withhold some $800m (£498m) in assistance to the country's armed forces.
The row will worsen the already poisonous relationship between the two "allies", which since the unilateral US raid to kill Osama bin Laden in May has lurched towards breakdown.
Pakistan recently expelled US military trainers from the country, limited the ability of US diplomats and other officials to get visas, and restricted CIA operations on its territory. "The Pakistani relationship is difficult but it must be made to work over time. But until we get through these difficulties we will hold back some of the money that the American taxpayers have committed to give them," William Daley, the White House chief-of-staff, told ABC News on Sunday.
U.S. debt crisis might be on fast track
By James Pethokoukis - Reuters.com
One of the outside economic-analysis firms that the White House likes to quote is Macroeconomic Advisers. Here’s what the firm said yesterday about where the U.S. economy is heading (bold is mine):
Assuming current fiscal policies remain in force, our economic model suggests that interest rates will rise considerably over the next decade, with the yield on the 10-year Treasury note reaching nearly 9% by 2021.
Private interest rates will rise as federal borrowing competes for saving that might otherwise finance private investment.
In addition, yields could rise if there is growing risk associated with current fiscal policy. If such risk is systemic, it raises yields generally. If it reflects a growing probability of sovereign default, it raises Treasury yields relative to private yields.
Rising rates would be a precursor to something worse: a full-fledged fiscal crisis with further sharp increases in yields, declines in stock prices, and a plummeting dollar.
This is bad. Really bad. The official budget forecasts ones typically hears about in the media are from the Congressional Budget Office. And those forecasts assume Uncle Same can borrow at low interest rates, like, forever. The super-cautious CBO baseline predicts the U.S. government will add an additional $6.8 trillion in debt over the next decade, bringing cumulative debt held by the public to $18.2 trillion. Debt as a share of the economy would be 76.7 percent. The forecast also assumes short-term interest rates average 3.3 percent, long-term 4.8 percent.
Brzezinski: Middle Class Unrest To Hit U.S.
By Paul Joseph Watson - Infowars.com
Zbigniew Brzezinski, who forty years ago wrote of a highly controlled future society where the population would be subjugated by a technocratic elite, appeared on MSNBC’s Morning Joe yesterday to predict that middle class unrest caused by economic disenfranchisement would soon hit America.
"I don't want to be a prophet of doom — and I don't think we are approaching doom — but I think we’re going to slide into intensified social conflicts, social hostility, some forms of radicalism, there is just going to be a sense that this is not a just society," Brzezinski said, adding that civil unrest would begin when the lower middle class becomes severely affected by the economic fallout and rising unemployment.
Checklist: America meets 90% of Karl Marx's demands
By Kirk Elliott - WorldNetDaily.com
I recently re-read "TheCommunistManifesto" written by Karl Marx in 1848.
What I read was a bit shocking. Marx had "10 planks" that this evil manifesto was based upon and he advocated the use of any means to accomplish these socialist goals including violent revolutions. The planks are listed bellow, followed by my comment on how it applies to America today: 10 planks of communism by Karl Marx
1. Abolition of private property in land and application of all rents of land to public purpose.
Dr. Elliott's Comment: This is where eminent domain comes into the picture, and even property taxes. Once you own your property outright by paying off your mortgage, you still don't technically own it because the government could jack up property taxes so high that it makes it unaffordable to remain.
2. A heavy progressive or graduated income tax.
Dr. Elliott's Comment: Marginal tax rates increasing as income goes up IS a graduated income tax. This is in opposition to a more fair tax like a national sales tax or flat tax where a person is not taxed at a higher rate the more income they earn.
3. Abolition of all rights of inheritance.
Dr. Elliott's Comment: In the U.S. these can be seen as estate taxes (i.e. the death tax).
The Economy Cannot Recover
As Long As Inequality Continues to Skyrocket ...
But Government Policy Is INCREASING Inequality
George Washington's Blog
The Economist noted in January:
Hu Jintao, David Cameron, Warren Buffett and Dominique Strauss-Kahn ... have all worried, loudly and publicly, about the dangers of a rising gap between the rich and the rest.
A new survey by the World Economic Forum, whose annual gathering of bigwigs in Davos begins on January 26th, says its members see widening economic disparities as one of the two main global risks over the next decade (alongside failings in global governance).
Numerous prominent economists in government and academia have all said that large inequalities can cause - or at least contribute to - financial crises, including:
Zombie America The Day QE2 Ended
by Bill Bonner, Daily Reckoning - LewRockwell.com
Americans had something to celebrate this Independence Day. QE2 – the Feds' $600 billion money-printing program – ended on Friday. And guess what? The world didn’t end with it.
Instead, the stock market gave a loud "yahoo!" The Dow rose 168 points. If QE2 is going to be the death of the US economy, the stock market doesn't see it.
Not that stock market investors always have 20/20 vision. These were the same people who were buying Lehman Bros. and mortgage lenders stock just before the company collapsed.
So, we're not saying that today's prices will necessarily be the same as tomorrow's. The market may know the price of everything at every moment. But it doesn’t know the value. So, as it discovers value, it changes its mind about the price.
US will enter second recession
if debt limit is not raised, warns President Barack Obama President Barack Obama has warned that if the US Congress fails to raise the US debt ceiling it risks triggering a new recession in the world's largest economy.
AFP - Telegraph.co.uk
Not raising the $14.29 trillion (£9 trillion) debt ceiling would lead to "a whole new spiral into a second recession or worse", Obama said as he answered questions on the short-messaging service during a "Twitter Town Hall" being streamed live from the White House.
The debt ceiling "is something that we shouldn't be toying with", Obama warned, saying if the limit is not hiked "the Treasury will run out of money".
"It will not be able to pay the bills that are owing and potentially the entire world capital markets could decide, you know what, the full faith and credit of the United States doesn't mean anything.
Washington Dysfunction: A Scorecard
By E.J. Dionne, Jr.
Here’s why getting to a deal on the debt ceiling is so complicated.
President Obama’s main goal is to get through this fight with the government still running and his support from the political center intact, even if this means substantial concessions to Republicans.
House Republican leaders want to get by without inciting a revolt among right-wing tea partiers, which means they’re having trouble accepting Obama’s concessions.
And the Senate—well, the Senate resembles the Balkans without a peacekeeping force. Poor Harry Reid. The Democratic leader’s caucus sprawls from ardent progressives to moderates from conservative states absolutely petrified of casting votes that might endanger their seats in 2012. Senate Republican leader Mitch McConnell senses that a GOP majority is just around the corner, and wouldn’t mind dragging this struggle out.
Buffett sees risks in failing to hike debt ceiling 'You're playing with fire when you don't need to play with fire'
By JOSH FUNK, AP - MSNBC.com
OMAHA, Neb. — Billionaire investor Warren Buffett said Thursday Congress is playing a dangerous game by considering not raising the U.S. debt ceiling.
The CEO and chairman of the conglomerate Berkshire Hathaway Inc. said on the cable TV network CNBC that there is no way to tell what might happen if the debt limit is not increased, but it's a dangerous idea.
Buffett compared the debate over raising the debt limit to a game of "Russian roulette" with one bullet in a revolver.
He said refusing five times out of six to raise the debt limit might not be dangerous, but the sixth time could have catastrophic consequences.
Political math makes a debt deal harder
By E.J. Dionne Jr. - WashingtonPost.com
Here’s why getting to a deal on the debt ceiling is so complicated.
President Obama’s main goal is to get through this fight with the government still running and his support from the political center intact, even if this means substantial concessions to Republicans.
House Republican leaders want to get by without inciting a revolt among right-wing Tea Partyers, which means they’re having trouble accepting Obama's concessions.
And the Senate — well, the Senate resembles the Balkans without a peacekeeping force. Poor Harry Reid. The Democratic leader's caucus sprawls from ardent progressives to moderates from conservative states absolutely petrified of casting votes that might endanger their seats in 2012. Senate Republican leader Mitch McConnell senses that a GOP majority is just around the corner, and he wouldn't mind dragging this struggle out.
A constitutional trump card? Obama, Democrats not ready
to play 14th Amendment card with debt ceiling
By Zachary A. Goldfarb - WashingtonPost.com
Law professors, Democratic senators and liberal commentators have recently raised a tantalizing possibility for ending the congressional wrangling over raising the federal limit on borrowing:
President Obama could simply declare the debt ceiling unconstitutional and be done with it.
Advocates of this approach cite the 14th Amendment of the Constitution, which states that the "validity of the public debt of the United States . . . shall not be questioned."
COVER-UP: New York Fed Officials Pressured The SEC
To Grant 'National Security' Status
To Hide AIG's $62 Billion Gift To Banks
The DailyBail.com
The AIG cover-up is unravelling. Tomorrow's hearings with Geithner due to testify will be raucous. Still no word on when or even if Stephen Friedman will appear.
NEW YORK (Reuters) - U.S. securities regulators originally treated the New York Federal Reserve's bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.
The request to keep the details secret were made by the New York Federal Reserve -- a regulator that helped orchestrate the bailout -- and by the giant insurer itself, according to the emails.
Russia, Iceland & Afghanistan Stand Alone
As The Only Nations With International Arrest Warrants Out
For Bankers Who Committed Fraud
by Stacy Herbert - MaxKeiser.com
Stacy Summary: This is in response to trolls on our Keiser Reports the last two episodes, who claim for some reason that by not covering the Bank of Moscow bailout on our tv show we are somehow avoiding the story because the show airs on a Russian financed broadcaster. Well, the story for the most part, reflects nicely on Russia so I don't get their argument that there is some sort of conspiracy: From what I can tell, Russian authorities protected depositors, have isolated the bad loans while keeping the good part operating AND MOST IMPORTANTLY – have an international arrest warrant out for the banker responsible! Can you say the same of Dick Fuld? Jimmy Cayne? Angelo Mozilo? Lloyd Blankfein? Sean Fitzpatrick? Fred Goodwin? Etc. Etc.
The fact is that Russia now joins Iceland and Afghanistan as the ONLY nations to have international arrest warrants out for banking thieves. This is our single most urgent concern in all the banking disasters around the world – justice. Without justice, these banking crime waves will not stop. The Bank of Moscow fraudster is hiding out in London and will no doubt live it large there thanks to London’s safe haven status. Icelandic bankers are also hiding out in London after fleecing their country with 'loans' to close friends and family.
Team Bernanke's QE17: A Glimpse of America in 2015
BY MARTIN HUTCHINSON, Contributing Editor, Money Morning
At the end of last month, the U.S. Federal Reserve brought down the curtain on its $600 billion "quantitative easing" initiative, a U.S. Treasury-bond-purchase program that investors liked to refer to as "QE2."
Fed Chairman Ben S. Bernanke has indicated that he does not intend to carry out a follow-up "QE3" program.
But here's the reality: The U.S. federal deficit is running at about $1.6 trillion, meaning we need to sell a lot of Treasury bonds to finance the shortfall. So if the Treasury-bond market gets a case of "indigestion" - meaning there aren't enough buyers to fulfill our massive financing needs - many folks believe that Bernanke will have to step in with the-much-talked-about "QE3" bond-buying program.
But Ben, please be forewarned: If you do this, our future is clear ... A Glimpse of Our Future
Yes, Coins Too
By BINYAMIN APPELBAUM
Several readers have asked a good question about my article in today’s newspaper, which reports that the government is printing less paper currency: What about coins?
The simple answer: Yes, coins too.
The U.S. Mint produced about 5 billion pennies, nickels, dimes and quarters in 2010, less than one-third of the average annual production over the last 30 years.
Just like paper currency, right? Well, not quite.
People clearly are using fewer coins.
But there’s something else too. Call it The Coinstar Effect.
In 1992, three Stanford University graduate students convinced four Bay Area supermarkets to let them install a new machine designed to count spare change. The concept was rather brilliant, like a slot machine with a guaranteed payout. There’s nothing quite like the sound and sight of money — your money — being counted. And as the company grew, the technology began to change the basic physics of change.
Peru elections and its significance for precious metals industry
By Jeb Handwerger - CommodityOnline.com
The elections in Peru of Humala, an avowed radical socialist, is an ongoing development of great significance for precious metals and mining investors. It is not an event that has gone unnoticed by experienced speculators. Mining investors (GDX) worldwide are watching July 28th when the new regime takes control. So far in 2011 investors have sold off mining assets in Peru and buying the underlying metal.
What we are witnessing is no less than the ongoing sophistication of the third world. Peru is only the latest development in this continuum. "Nationalistas" are raising the ante around the negotiating tables, Chavez in Venezuela, Morales in Bolivia and Lula's successor and protégée, Dilma Rousseff in Brazil. One can not help but wonder who is next? Mining investors are increasingly aware of civil unrest and geopolitical uncertainty.
India to import 350 tons of gold, 1200 tons of silver
NEW DELHI (Commodity Online): India's state-owned trading company—Minerals and Metals Trading Corporation (MMTC)—said on Thursday that it would import 350 tons of Gold and 1,200 tons of Silver in 2011-12 as demand for the precious metals is rising fast.
"We plan to 350 tons of gold and 1,200 tons of silver in the 2011-12 fiscal as the domestic demand for these metals are fast rising," MMTC Marketing Director Ved Prakash told reporters.
India is one of the largest importers and consumers of gold and silver in the world. As the domestic production of these precious metals is negligible compared to their rising consumption, India has been importing hundreds of tons of gold and silver every year.
Keiser Report: Europe's Neo Feudalism (E162)
Europe, Free Speech, and the sinister repression
of the Rating Agencies
By Ambrose Evans-Pritchard - Telegraph.co.uk
Before we all join the chorus of abuse against the robber agencies, let us not lose sight of what is happening in the eurozone. The EU authorities are attempting to muzzle free opinion, first by threatening Fitch, Moody’s, and S&P with vague retribution, and then by drafting restrictive laws to prevent them from publishing unwelcome messages.
It is financial repression, pure and simple. The same will be done to the press in due course. Then to you, dear reader.
"We must break the oligopoly of the rating agencies," says German finance minister, Wolfgang Schäuble. By "we", of course, he means the EU apparatus of coercion.
The European Commission has already created a pan-EU oversight body with binding powers to breathe down the necks of these agencies. It will draft restrictive legislation by the end of the year. The Portuguese downgrade ensures that it will be even nastier. "Developments since the sovereign-debt crisis show we need to take a further look at reinforcing our rules," said Commission chief Jose Manuel Barroso.
The Euro: Its Inevitable End
Mises Daily: by Juraj Karpis
The political project of the euro is in deep trouble. It seems that Friedman's curse is beginning to materialize. Despite the European Union and International Monetary Fund's pledging three-quarters of a trillion of our euros to put out the debt-crisis wildfire, interest rates on troubled sovereign debts are even higher than before the announcement of the bailout funds. Not that this is a surprise to anyone.
Another loan to an already overindebted country is not a real solution to its problems — something private investors know very well. It's just a very expensive buying of time for those who happened to own the bonds and wonder what to do now. During this bought time, one can pretend that the problem will disappear thanks to sudden and miraculous economic growth. Ireland got bailed out. Portugal got bailed out. For Greece, one bailout was not enough.
Europe's central bank gives helping hand to Portugal ECB chief Trichet defends the 'credibility'
of his institution despite recent policy turns
VALENTINA POP - EUOBSERVER / BRUSSELS
In a move similar to the Greek case, the European Central Bank (ECB) on Thursday (7 July) suspended a minimum rating requirement for Portuguese bonds after one of the major credit rating agencies earlier this week downgraded Portugal to 'junk status'.
In response to the downgrade announced by Moody's on Tuesday, the European Central Bank has decided to suspend "until further notice" the minimum rating threshold required for Portuguese bonds, ECB chief Jean-Claude Trichet said during his monthly press conference in Frankfurt.
This means the ECB will continue to buy Portuguese bonds regardless of the rating given to them by private agencies - a move also made for Greece.
Portugal and the macro-economic madhouse called the EU
By Timothy Bancroft-Hinchey - Pravda.ru
The game is on - Moody's has reduced Portugal's credit rating to junk status, meaning that if Fitch and Standard and Poor's follow suit, Lisbon will be faced with a crisis. Another one. What sort of a system is this where tangible results can be visited upon a sovereign nation and its people by an unregulated agency on the other side of the Ocean?
Suppose Portugal told Moody's to .... clear off?
True, Portugal is in trouble because generations of politicians mismanaged the country since the revolution in 1974, either through crass stupidity or more often through lack of vision and the inability to plan strategically. The years that followed the adhesion to the EC in 1986 saw Portugal modernise greatly in terms of infra-structure but lose tremendously through trade-offs which saw the farmers paid not to produce, which saw Portugal's industry and fisheries destroyed, as quotas went elsewhere.
Keiser Report: Robbed and Securitised (E161)
Tax Increases Are the Price of Doing Business with Democrats
By W. James Antle, III - The AmericanSpectator.org
Spectator alum Phil Klein makes a number of important points in thispost, but the main one is this: "Tax increases aren't required, but Republicans are being told they must accept them because they're the price of doing business with Democrats." But by 2035, federal spending's share of GDP will be 13 points ahead of the postwar, Clinton-era peak in tax revenues as a percentage of GDP.
Get Ready for $150 Oil
By GENE EPSTEIN - Remington-Work Blog
AFTER A DECLINE THIS SUMMER, CRUDE'S PRICE IS LIKELY TO RISE SHARPLY BY NEXT SPRING. IT WILL HURT THE ECONOMY, BUT IT WON'T BE A DISASTER.
The U.S. economy is never completely ready for higher oil prices, which is one reason they take a nasty economic toll when they arrive. But readiness can be enhanced by awareness of the likely outlook for petroleum prices–and the outlook today is relatively grim, although probably not disastrous.
Despite the recent 20% decline from April highs, new highs on crude, heating oil, diesel fuel, jet fuel and gasoline seem likely over the next 12 months.
Following some further easing over the summer, the second leg of the long-term bull market in petroleum–the first occurred in 2007-08–probably will begin this fall.
U.S. housing recovery stymied by government Fannie Mae and Freddie Mac have boosted loan standards,
making it more difficult for borrowers to qualify.
By Bloomberg News - Crain's New York Business
(Bloomberg) - Sue Stamper, a business owner in Sacramento, Calif., wants to buy a home. After mortgage-financiers Fannie Mae and Freddie Mac imposed the strictest loan standards in more than a decade, she doesn't qualify.
Pam Crawford of Lyon Real Estate is trying to sell a three-bedroom bungalow on Sacramento's east side for $179,000, a third less than what it went for in 2004. She hasn't found a buyer even after cutting the asking price by $10,000 two weeks ago.
The two women, who haven't met, illustrate the deadlock crippling the U.S. housing market five years into the crash: While a record share of Americans want to buy homes, U.S. policies, often working at cross-purposes, are making it more difficult. Government-controlled Fannie Mae and Freddie Mac have boosted standards so high that some people previously considered prime borrowers no longer qualify. That's limiting a real estate rebound that also has been damped by a state attorney's general probe into foreclosure practices and an Obama administration loan-modification program that has fallen short of expectations.
FHA gives jobless homeowners one-year break Qualified appicants would not
have to make mortgage payments during that time
By DEREK KRAVITZ - AP - MSNBC.com
WASHINGTON — The Obama administration is making it easier for out-of-work homeowners to stay in their homes, as it tries to revamp its troubled foreclosure-prevention program.
Starting Aug. 1, the Federal Housing Administration will extend the period for unemployed homeowners to miss mortgage payments to a full year from three or four months. That will allow qualified homeowners to go without making a monthly payment for 12 months before the foreclosure process begins.
The extended grace period only applies to FHA-backed loans, which are usually given to low- and middle-income borrowers and represent about 14 percent of all active mortgages and roughly 25 percent of new mortgages, and homeowners in the government's foreclosure-prevention program. About 10,000 homeowners in the foreclosure program and 3,500 FHA-backed homeowners per month would be eligible, officials said.
More consumers getting behind on their bills First quarter report shows delinquencies
on credit cards, other debts rise
By Dave Clarke, Reuters - MSNBC.com
WASHINGTON — More consumers had trouble making payments on credit cards and other debts during the first three months of the year due to higher food and gas prices, an industry report said on Thursday.
The American Bankers Association said the data showed a downturn from prior quarters and described the most recent quarter as a "soft patch."
"Consumers are feeling insecure about the economy and whether their financialresources can carry them through until conditions improve," ABA chief economist James Chessen said in a statement.
Killing Old People Is Fiscally Responsible
by David Swanson - GlobalResearch.ca
"The fiscal good has to outweigh the pain," a nameless Democrat told the Washington Post regarding President Obama's latest proposal to massively cut Social Security, against the wishes of the vast majority of Americans, in order to fund a military 670% larger than the next largest in the world, keep in place tax cuts for billionaires, fail to tax corporations or estates or investments or carbon, and balance a budget that nobody gives a rat's ass about balancing when Wall Street comes asking for handouts.
Not to put too fine a point on it, Mr. President, but f--- your fiscal good. Whose fiscal good is it? And whose pain? Last week the New York Times said you hoped by hacking away at Medicare to inflict some pain on your base. That way, supposedly, the Republicans would inflict some pain on their base. Then we'd all feel better. Assuming we're all Wall Street banksters. But what if we're actually, almost all of us, the people you criminals call your bases? You, Captain Peace Prize, propose slashing Medicare and Social Security. And, in exchange, according to the Washington Post, Eric Cantor has proposed more tax cuts for free loaders who don't work for a living. What a deal!
Obama faces heat from the left over Social Security
By Michael A. Memoli - ChicagoTribune.com
The political left is steaming amid reports that President Obama is offering changes to Social Security and Medicare as part of a grand compromise to raise the nation's debt ceiling.
A series of statements from liberal groups Thursday came as the president acknowledged that "there is going to be pain involved politically on all sides" as negotiators try to hammer out a deal by Aug. 2.
Sen. Bernie Sanders of Vermont, an independent who caucuses with Democrats, said in a statement that he was "disturbed that the president is considering cuts in Social Security." He quoted Obama from the 2008 campaign, when he said that John McCain's campaign suggested cutting cost-of-living adjustments or raising the retirement age and then proclaimed that he "will not do either."
Should We Abolish the Jury System?
By Ben Shapiro - CNSNews.com
On Tuesday, a Florida jury found Casey Anthony not guilty of first-degree murder in the death of her 2-year-old daughter, Caylee Marie. As so often happens in high profile cases, the jury was wrong.
Casey clearly murdered her daughter. Her mom, Cindy, reported that Caylee was missing on July 15, 2008. Casey's cover story was unbelievably ridiculous. When Casey's mom, Cindy, confronted Casey at Casey's boyfriend's apartment, Casey actually claimed that a random baby sitter nobody had ever met had taken Caylee away over a month beforehand.
Our Founding Fathers Would Not Have Put Up with Gun Control
by Arnold Vintner - FortLiberty.org
Our nations founding fathers fought gun control — by killing the who the people who tried to enforce it. Paul Revere’s famous ride started because Dr. Joseph Warren believed that government troops were marching on Concord to confiscate the arms stored there. Dr. Warren later died defending his right to carry arms at the Battle of Bunker Hill. His last recorded words were “These fellows say we won’t fight! By heaven, I hope I shall die up to my knees in blood!” The good doctor was clearly not a man who was willing to make compromises in the name of political expediency.
Please read the following quotes from our founding fathers and ask yourself if you are living up to the legacy which they have given us:
"When firearms go, all goes – we need them every hour." — George Washington
"A free people ought not only to be armed and disciplined, but they should have sufficient arms and ammunition to maintain a status of independence from any who might attempt to abuse them, which would include their own government." — George Washington
"Laws that forbid the carrying of arms… disarm only those who are neither inclined nor determined to commit crimes… Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than to prevent homicides, for an unarmed man may be attacked with greater confidence than an armed man." — Thomas Jefferson
Gerald Celente - Adam vs The Man RTTV - 07 July 2011
"We must make our election between economy and liberty, or profusion and servitude." --Thomas Jefferson
This week, we celebrated 235 years ofAmerican Liberty. Conversely, on the eve of our Independence Day, the Red Chinese celebrated the 90th year of tyranny under the Communist Party.
A few decades ago, the contrast between the economies of the United States and China was stark. More recently, however, the Chinese Communist government has allowed the "liberalization" of their economy whileAmerican Socialists have subjected ours to ever more collectivist regulation, oppressive taxes and intervention. Consequently, the once-colossal contrast between our economies, while still vast, has greatly diminished.
Ai Weiwei’s "release" is a smoke screen used to daze the West. The truth is that the repression in China is continuing and, indeed, worsening. Large multinationals, which have sold the human rights of Chinese people and their own values for cash, are co-conspirators. The denunciation of the great Chinese dissident.
Washington (AsiaNews) - Recently, once again, the Chinese human rights issue has become an international hot topic. This interest is because of the recent escalation of human rights violations by the Chinese Communist regime. Especially important was the illegal detention of Ai Weiwei, which the international community could not accept. Artists and the media once again got angry, which influenced the entire public to be angry about the human rights situation in China. It also forced people to recall the fact that the Communist authoritarian regime will not allow political progress to naturally follow economic development. To the contrary, the Chinese Communist Party will become even more arrogant, more reactionary, and more inhuman.
End of the space shuttle programme spells disaster for local economy When the space shuttle Atlantis returns to Earth, 2,000 Kennedy Space Centre employees will be laid off, bringing job losses from the shuttle programme close to 10,000
By Richard Luscombe, Cape Canaveral - Guardian.co.uk
As landlord of the nearest pub to the Kennedy Space Centre, Bill Grillo is proud of his highbrow crowd of regulars.
For three decades, astronauts, rocket scientists, engineers, technicians and mission managers have kept the till at Shuttles sports bar and grill ringing. Every American who has blasted into space from a nearby launchpad has taken a meal there, and had his or her framed picture placed prominently on a wall.
But all that will change this month when the time bell rings for Nasa's iconic space shuttle programme.
No More Privacy:
Smart Meters Are Surveillance Devices
That Monitor The Behavior In Your Home
Every Single Minute Of Every Single Day
EndOfTheAmericanDream.com
Have you heard about the new "smart meters" that are being installed in homes all across America? Under the guise of "reducing greenhouse gas emissions" and "reducing energy bills", utility companies all over the United States are forcing tens of millions of American families to accept sophisticated surveillance devices in their homes. Currently, approximately 9 percentof all electric meters in the U.S. have been converted over to smart meters. It is being projected that by 2012, the number of smart meters in use will rise to 52 million, and the federal government is spending a lot of money to help get these installed everywhere. Eventually the goal is to have these smart meters in all of our homes and if that ever happened there would essentially be no more privacy. Once installed, a smart meter monitors your home every single minute of every single day and it transmits very sophisticated data about your personal behavior back to the utility company.
It's not all white:
The cocktail of up to 20 chemicals in a glass of milk
By DAVID DERBYSHIRE - DailyMail.co.uk
A glass of milk can contain a cocktail of up to 20 painkillers, antibiotics and growth hormones, scientists have shown.
Using a highly sensitive test, they found a host of chemicals used to treat illnesses in animals and people in samples of cow, goat and human breast milk.
The doses of drugs were far too small to have an effect on anyone drinking them, but the results highlight how man-made chemicals are now found throughout the food chain.
the highest quantities of medicines were found in cow's milk.
Risk-Free And Above The Law: U.S. Globalizes Drone Warfare
by Rick Rozoff -GlobalResearch.ca
Last week the Washington Post, the New York Times and other major American newspapers reported that the U.S. launched its first unmanned aerial vehicle (drone) missile attack inside Somalia.
The strike was the first acknowledged Pentagon military attack inside the Horn of Africa nation since a helicopter raid staged by commandos in 2009 and the first use of an American drone to conduct a missile strike there. Drones had earlier been used in the country in their original capacity, for surveillance, including identifying targets for bomb and missile attacks, one being shot down in October of 2009. But as Britain's The Guardian reported on July 30, the strike in Somalia marked "the expansion of the pilotless war campaign to a sixth country," as the remote-controlled aircraft have already been employed to deadly effect in Afghanistan, Iraq, Pakistan, Yemen and most recently Libya.
New China Will Be Red and Expert
By Dan Siegel - Truthdig.com
China may be returning to the days when its ideal communist was both "Red and expert," and The Wall Street Journal is worried. In a recent article, thenewspaper profiled one of China's rising new leaders, Bo Xilai, Communist Party chief of Chongqing and a likely candidate next year for a position on the party’s Politburo Standing Committee. If chosen, Bo may help bring about a new synthesis of the political trends that have shaped China for the past six decades. The Journal is concerned that the ascendancy of new leadership may retard what it describes as the liberal economic policies that have fueled China's growth since the end of the Cultural Revolution and the ascendancy of Deng Xiaoping in the late 1970s.
China's economic development was on full display during a recent visit. The country is exploding with new construction, apartment blocks going up everywhere, highways that rival the best in Europe, and the world’s most modern railroad system. Nine hundred million of China’s 1.3 billion people use cellphones, including young hipsters in the cities and farmers tending water buffalo in the beautiful Dragon’s Backbone rice terraces in northern Guangxi province. The government says that the poverty rate is down to 5 percent, and wealthy Chinese are the world’s greatest consumers of handbags by Prada.
The March of the Brotherhood
By Brad MacDonald - theTrumpet.com
Day by day, month by month, Egypt is gravitating toward Iran and the radical Islamists.
Remember the "Arab awakening" that swept through Egypt earlier this year? As it unfolded we were told that a tyrannical regime was being ousted and an era of liberal democracy, of peace and prosperity, was being born in Egypt.
Alas, we were horribly misled.
Egypt today is not only not peaceful or prosperous, but there is no evidence that peace or prosperity will lay hold of the country anytime soon. Sure, democracy is at work. But in case you haven't noticed, the democratic process is facilitating the rise of a large and powerful anti-democratic, anti-peace Islamic organization whose mission is to commit "grand jihad in eliminating and destroying Western civilization."
If you thought Hosni Mubarak's Egypt was ugly, wait till the entity now forming manifests itself!
Syrian regime is scrambling Syrian crackdown underscores new vulnerability
for Assad regime, officials say
By Joby Warrick - WashingtonPost.com
A renewed police assault on the key Syrian city of Hama this week has exposed deep cracks in the government of President Bashar al-Assad, according to U.S. officials who say the regime is struggling to contain protests in multiple cities while simultaneously grappling with a rapid fall-off in allies, resources and cash.
After abandoning Hama for nearly three weeks, security forces made a hasty return to the country’s fourth-largest city early Monday to clamp down on protests that were drawing the largest crowds seen since the start of the uprising nearly four months ago. But while opposition leaders decried yet another round of arrests and shootings, U.S. officials said the events underscored a growing disarray within the Syrian government, which just weeks earlier had been forced to withdraw troops from Hama and other cities to deal with unrest in towns along the Syrian border with Turkey.
The Coming "New World Order" Revolution: How Things Will Change In The Next 20 Years -
A Kondratieff Cycle Perspective
Submitted by Tyler Durden - ZeroHedge.com
SocGen has published a fantastic, must read big picture report, which compares the world in the 1980/1985-2000/2005 time period and juxtaposes it to what the author, Veronique Riches-Flores predicts will happen over the next two decades years, the period from 2005/2010 to 2025/2030. Unlike other very narrow and short-sighted projections, this one is based not on trivial and grossly simplified assumptions such as perpetual growth rates, but on a holistic demographic approach to perceiving the world. At its core, SocGen compares the period that just ended, one in which world growth was driven by an expansion in supply, to one that will be shaped by an explosion of demand. And, unfortunately, the transformation from the Supply-driven to the Demand-driven world will not be pretty. Summarizing this outlook: "Over the last three decades strong growth in the working-aged population across Asia and the opening-up of world trade have led to considerable expansion in global production capacities. These factors created a highly competitive and disinflationary environment of plentiful supply, which was characterised by low interest rates, a credit boom and, in the financial markets, exuberant appetite for risky assets. As the demographic cycle progresses, we are seeing the emergence of an aging population, which is less favourable to productive investment. Meanwhile the rise in living standards among the emerging population heralds an unprecedented level of growth in demand. The world supply/demand balance is dramatically changing against a backdrop of resource shortages which are likely to favour shorter cycles, increased government intervention in economic affairs and inflation." In other words, contrary to what you may have read elsewhere, the future is about to get ugly. And topping it all off is a Kondratieff cycle chart: what's not to like. Read on.
This article first appeared in two parts in Investment Insights for August and September 1984. Man has always yearned to know his future. And, since it is an economic law that demand tends to create supply, there have always been gurus and mountebanks to meet that need, people who claim to have a special handle on all that the future may hold in store. Soothsayers, palm-readers, astrologers, crystal-ball gazers have poured in to take advantage of the credulous and the gullible.
Forecasting and Soothsaying
Techniques of soothsaying or prophesying have changed over the centuries, but the basic tactics and strategy have remained the same. In the more frankly mystical atmosphere of the Middle Ages, it became common for gurus to arise and predict the Second Coming and the end of the world, with seemingly stunning precision. If the guru was shrewd enough, he made the date of the final days near enough to whip up excitement, but not so near that it would actually arrive and he would be caught out. Thus, the most famous of all these forecasters of doom, Joachim of Fiore, who lived in the late 12th century, predicted with absolute assurance that the day would come about fifty years afterward. That was close enough to develop a mighty movement of followers, but far enough away not to prove an embarrassment.
But suppose that the predicted day arrives and nothing happens? There have been various classical techniques to deal with that problem. The most obvious but the shakiest is to say, oops, I miscalculated, but now I have corrected my calculations and the precise day of the end of the world is eleven years and five months hence. Straightforward, but a bit desperate, and it is risky for the guru ever to admit error, for then his all-important aura of absolute self-confidence and infallibility will have begun to slip. Far better to use a fudge factor, which maintains one's air of omniscience and adds profundity to boot. "No, you see," the guru will reply loftily to his critics, "I was absolutely right; the end of the world has begun, we have now entered the period of the last days." If the guru is lucky enough, that period can last another century or so. And who is there to say him nay? The idea is to reinterpret for the faithful what had previously seemed to be clear and unmistakable language; a "day" has simply become an eon or two.
Rule lets board recover pay from failed bank execs
AP - LATimes.com
WASHINGTON — Federal regulators will be able to take back two years of pay from executives held responsible for a large bank's failure.
Executives deemed "negligent" and "substantially responsible" for a big bank's failure can lose all of their compensation from the previous two years under a rule approved Wednesday by the board of the Federal Deposit Insurance Corp.
Banks objected to an earlier version of the rule, saying it would induce key executives to depart at the first sign of trouble rather than risking their compensation.
Lehman Borrowed $18B From Secret Fed Program
By Linda Sandler and Bob Ivry - Bloomberg.com
Lehman Brothers Holdings Inc. (LEHMQ)’s brokerage borrowed as much as $18 billion in four separate loans from a previously secret program of the U.S. Federal Reserve in June 2008, three months before its parent filed the biggest bankruptcy in U.S. history.
Goldman Took Biggest Loan in Fed Program
By Bob Ivry and Bradley Keoun - Blooomberg.com
Goldman Sachs & Co., a unit of the most profitable bank in Wall Street history, took $15 billion from the U.S. Federal Reserve on Dec. 9, 2008, the biggest single loan from a lending program whose details have been secret until today.
The program, which peaked at $80 billion in loans outstanding, was known as the Fed’s single-tranche open-market operations, or ST OMO. It made 28-day loans to units of 19 banks between March 7, 2008, and Dec. 30, 2008. Bloomberg reported on ST OMO in May, after the Fed released incomplete records on the program. In response to a subsequent Freedom of Information Act request for details, the central bank disclosed borrower names, amounts borrowed and interest rates.
Five big banks near $20 billion settlement
Dayton Business Journal - by Adam O'Daniel, DBJ Contributor
At least five big banks are close to a $20 billion settlement with government prosecutors, according to a Bloomberg report Wednesday afternoon.
Citing two people briefed on the matter, Bloomberg says Bank of America ,JPMorgan Chase & Co. , Citigroup Inc. , Ally Financial Inc. and Wells Fargo & Co. are involved in the talks over the massive settlement. All of those banks have operations in the Dayton region, except Ally Financial.
The report indicates the banks are close to a deal that would settle state and federal claims over the banks' foreclosure and mortgage-servicing practices. The banks have been under investigation since last year related to allegations of wrongful foreclosures and failing to modify loans for struggling borrowers.
Greek Austerity, Greece Bailout.
Max Keiser, Nigel Farage, Gerald Celente.
Greeks Buy Time for Insolvent Bankers and Delusional Politicians
By: John Browne, Euro Pacific Capital - GoldSeek.com
Last week, the Greek parliament voted by a narrow margin to pass an economically crippling austerity plan of some $40 billion in return for some $159 billon of fresh liquidity injections. Although many hailed the event as a needed first step on a long road to recovery, I believe the austerity program will make a bad situation worse. It is a flawed solution that stems from a false premise: that Greece should continue to be part of the euro zone, and continue to use the euro as its currency.
To return to national economic viability Greece must abandon its use of the euro currency, which has become a financial straight jacket. Nevertheless, Greek politicians may have agreed secretly to accept the austerity in name only, in return for a liquidity bailout that will buy time for European unity to solidify. Once political unity is restored, we should expect more massive financial transfers from northern countries, present day Germany and Britain, to the subsidized southern regions.
Greece must sell off assets East German-style Greece must privatise assets on a scale similar to the sell-off of East German companies at the fall of the Berlin Wall to rebuild its finances, the chairman of the Eurogroup of finance ministers said on Sunday. -- By Matthew Holehouse - Telegraph.co.uk
"The sovereignty of Greece will be massively limited," Jean-Claude Juncker, who is also prime minister of Luxembourg, told Germany'sFocus magazine.
On Saturday finance ministers signed off the release of the latest €12bn (£11bn) tranche of aid, rewarding the Greek government's victory in a parliamentary vote on austerity measures.
These included setting up a privatisation agency at the insistence of the European Union and the IMF.
Eurozone split over new Greece bailout
By Heather Stewart - Guardian.co.uk
Eurozone finance ministers are sharply divided over how to handle the spiralling Greek debt crisis, Dutch finance minister Jan Kees de Jager revealed as he attacked France's plans for a new rescue package.
Speaking in London after a meeting with the chancellor, George Osborne, de Jager said it was "illusory" to hope that Europe's banks would voluntarily bear their fair share of the costs of a new bailout for Athens, and that President Sarkozy's current proposals let Greece's private sector creditors off too lightly.
Europe declares war on rating agencies A chorus of policy-makers from Europe and across the world have denounced Moody's drastic downgrade of Portuguese debt as an act of financial vandalism, accusing the "Anglo-Saxon" rating agencies of driving states into bankruptcy and destabilising the global system. -- By Ambrose Evans-Pritchard - Telegraph.co.uk
Wolfgang Schauble, German finance minister, said there was no justification for the four-notch downgrade or for warnings that Portugal might need a second bail-out. "We must break the oligopoly of the rating agencies," he said.
Heiner Flassbeck, director of the UN Office for World Trade and Development, said the agencies should be "dissolved" before they can do any more damage, or at least banned from rating countries.
Moody's downgrade late on Tuesday set off immediate contagion to Ireland, with dangerous ripple effects across southern Europe. Yields on Irish two-year bonds surged above 15pc of the first time. Italian borrowing costs reached levels not seen since the aftermath of the Lehman crisis in late 2008. Yields on Spain's 10-year bonds jumped 12 basis points to 5.59pc.
Portugal's credit rating downgraded to junk status
By Ian Traynor in Brussels and Helen Pidd in Berlin - Guardian.co.uk
A dangerous and novel phase in the eurozone crisis has opened up on Tuesday after the ratings agency Moody's downgraded Portugal to junk status and voiced strong pessimism about the prospects for its €80bn (£71.8bn) bailout by the EU and International Monetary Fund only two months ago.
The bleak prediction followed Monday's statement by Standard and Poor's that the terms for a new bailout being negotiated by the eurozone for Greece would be judged a default, possibly sparking a Greek banking collapse and a European banking crisis.
Interview With PETER SCHIFF ~ On China and the USA
Eric Sprott - Paper Markets Are A Joke:
Prepare for Bullion Prices to Go Supernova
by Adam - ChrisMartenson.com
"I think that the prices will continue higher. I mean the amount of money printing is unbelievable. I just think you have to take that initial stand in terms of buying it. I use the James Turk analogy: just keep dollar averaging. We have gone up eleven years in a row, this year it looks like it will be no exception; I would certainly think next year will be no exception. If we ever have QE3 announced, I think gold and silver will just go absolutely bonkers here. And so I just think you have got to step in there and own it; we’ve had these fears all the way along. You know, $400, and $500 and $700 and $800 dollar gold, everyone was afraid it was a one-time thing. I don’t think it is a one-time thing, I think it is a secular thing. It’s going to carry on for quite a while here until we find some resolution of these problems. And the resolution probably will be some form of default where people just have to expunge debts that cannot be repaid. So, you have got to be in some asset which will not be affected by that."
"Jesting is the third-best disguise. The second-best: sentimentality. But weirdly, the best and safest disguise is still the blatant, naked truth. Nobody will believe that."
The debt of the USA currently amounts to USD 14.3 trillion . Debt in terms of economic output is 93%, i.e. the highest ratio since the end of the 1940s. The new debt taken out since 2008 alone accounts for more than 40% of the aggregate government debt amassed in the past 240 years. Inclusive of the debt and entitlements of the States, authorities, pension funds etc. the situation is dramatic, painting a picture of vastly excessive debt. The fiscal gap amounts to USD 200 trillion, i.e. 14 times GDP. According to the IMF in order for the gap to be filled, a yearly adjustment of 14% would have to be implemented.
2,300 gold now a conservative target The world economy is currently long in questions but short in answers. In what is now our fifth Gold Report we want to explain why our long-term target of USD 2,300, set for the first time three years ago, could prove conservative.
Author: Ronald Stoeferle - MineWeb.com
VIENNA (ERSTE BANK) -
old is a highly emotional topic. It seems there are only two opposing fronts here: people who love gold (aka gold bugs), and people who hate it. There are only very few shades of grey between these two fronts, and people are extremely hesitant to defect from one to the other. It seems as if we were faced with something like "aurophobia"[1], especially in the financial sector. This pathological fear of, or aggression towards, gold does not seem to exist for any other commodity. After all, we have not heard of such a profound aversion against copper, we do not know "bond haters", nor are militant property bashers a popular concept. We regard ourselves as analysts rather than psychotherapists, which is why we do not really want to dwell on the reasons for that strong aversion. Instead we would like to continue substantiating with data, historical comparisons, and facts why we believe that gold should be a central module of the portfolio.
Gold Special Report:
Erste Group Says Foundation Of A Return To Sound Mone
Has Been Laid, Expects Gold To Hit $2,300
Submitted by Tyler Durden - ZeroHedge.com
Erste Group's Ronald Stoeferle has released another must read report on gold, recapping all the recent developments in the space, and more importantly putting the recent price moves in context. While there are numerous key observations which we leave to readers to uncover on their own, arguably the key fact is the following: "The possession of gold is tantamount to pure ownership without liabilities. This also explains why it does not pay any ongoing interest: it does not contain any counterpart risk. Along with the International Exchange and the Chicago Mercantile Exchange, JPMorgan now also accepts gold as collateral. The European Commission for Economic and Monetary Affairs has also decided to accept the gold reserves of its member states as additionally lodged collateral. We also regard the most recent initiatives in Utah and in numerous other States as well as in Malaysia, and the planned remonaterisation of silver in Mexico as a clear sign of the times. The foundation of a return to “sound money” seems to have been laid." And as the currency basket vs gold since 1999 chart below demonstrates, the key feature of fiat money is that is most certainly has liabilities, paradoxically in the form of central bank assets which collateralize it. The more worthless "assets" that are taken up by central banks to match the balance sheet expansion, the more worthless the actual currency in the form of actual circulating paper and reserves...
Gold Experiencing a Renaissance as an Investment Class
Written by Ronald Stoeferle - OilPrice.com
The (financial) world is at the moment long in questions but short in answers. We believe that gold is one of the right answers in times of chronic uncertainty. It is said that "trust is a delicate flower; once destroyed, it will not return easily" . We believe that the trust lost in the past years will not be regained any time soon, and that the situation will actually still get worse. The Eurozone is going through a breaking test, and the US dollar is gradually losing its status as the leading global currency.
The global expansion of monetary supply should continue to provide gold investments with a positive environment. The reaction to the current crisis is already feeding into the next crisis. Trying to resolve a crisis with the very same instruments that caused it (i.e. an expansive monetary policy) would seem to be clutching at straws. The driving forces of wealth are savings and investments, not consumption and debt. The weak US dollar is a logical consequence of the quantitative loosening, which from our point of view is just a euphemism for printing money.
Silver: It's All About Inventories
By Jeff Nielson - Implode-O-Meter Blog
While I have long since given up the "hunt" for intelligent analysis from the mainstream media on the silver sector, I have also become somewhat frustrated with much of the commentary I've seen from the more reliable/better informed commentators within the silver sector. Two "camps" seem to have emerged, separated by what I can only describe as a logical disconnect.
On the one hand, we have a group of very vigilant and bullish commentators who are squarely focused on the melodrama of 'evaporating' inventories now taking place in the Comex exchange (and any/every other warehouse where significant amounts of silver can still be found). Their reporting, while insightful, is almost surreal.
BIS Changed Silver Data
(From $203 to $93 Billion in Silver Liabilities?)
By: Jason Hommel - SilverSeek.com
The Bank of International Settlements (BIS) has changed, or revised, their silver derivatives data in their derivatives reports. The change took place between their June, 2010 report, and their December, 2010 report, for the period of June, 2009. The change was from $203 billion in "other precious metals" liabilities, changed down to $93 billion.
The change took place, in Table 22A: Amounts outstanding of OTC equity-linked and commodity derivatives, By instrument and counterparty, in the category of "other precious metals", for June, 2009, Notional amounts outstanding.
The Ideological Crisis of Western Capitalism
Joseph E. Stiglitz - ProjectSundicate.com
NEW YORK – Just a few years ago, a powerful ideology – the belief in free and unfettered markets – brought the world to the brink of ruin. Even in its hey-day, from the early 1980’s until 2007, American-style deregulated capitalism brought greater material well-being only to the very richest in the richest country of the world. Indeed, over the course of this ideology’s 30-year ascendance, most Americans saw their incomes decline or stagnate year after year.
Moreover, output growth in the United States was not economically sustainable. With so much of US national income going to so few, growth could continue only through consumption financed by a mounting pile of debt.
10 Hard Facts About America's Economic Recovery
By Eamon Murphy - DailyFinance.com
As President Obama took part in his first-ever Twitter-facilitated town hall event Wednesday, a spokesman for House Speaker John Boehner toldDailyFinance,"He's got a lot of questions to answer -- starting with, 'Where are the jobs?'"
The nonpartisan Economic Policy Institute took up much the same question in a conference call with reporters.
First, staff economist Heidi Shierholz outlined 10 facts about the recovery (which, you'll recall, officially began two years ago):
1. The real gap in the labor market is now around 11 million jobs.
"The economy currently has 6.9 million fewer jobs than when the recession started. But because the working-age population is naturally increasing all the time, in the three years and five months since the recession started we should have added around 4.1 million jobs to keep pace with population growth."
If Washington Worked, Here's How We'd Fix the Budget Seven months after the president's deficit commission released its report, Washington is embroiled in a self-destructive fight over the debt ceiling. The commission's associate director wonders: What if D.C.'s business were bipartisanship, not brinksmanship? Maybe we'd get this. -- By Marc Goldwein - TheAtlantic.com
This might have been the front-page story of a national newspaper today. But that's in a parallel universe. Instead of announcing a plan which would begin to reduce our medium-term debt and bring entitlement growth under control, much of Washington is participating in a dangerous game of chicken with the debt ceiling -- a game where failure would destroy our credit rating, rather than preserve it.
David Stockman: Ben Bernanke is finished!
In debt talks, Obama offers Social Security cuts
By Lori Montgomery - WashingtonPost.com
President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue.
At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action.
As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.
Why Big Business Loves Deficits Large corporations will only oppose government spending
if it isn't in their favor
By Daniel Indiviglio - TheAtlantic.com
Wall Street and big business desperately want the debt ceiling raised. They understand that a U.S. default would be catastrophic to the economy. But saying that they want the debt ceiling raised is different from saying that they want the U.S. to close its deficits and pay down the national debt. They don't. This might seem surprising to some, but it shouldn't be.
Big business' love of deficits was the subject of David Leonhardt's column today in the New York Times. He says big business lobbyists are part of the reason why cutting the deficit has been so difficult: they don't want the spending cuts that Republicans demand -- and they certainly don't want higher taxes.
White House official: 'No other path' on debt crisis
By: CNN's Ashley Killough
(CNN) - America will face economic calamity if Congress fails to raise the nation’s debt ceiling and the government defaults on its obligations, White House Communications Director Dan Pfeiffer said Wednesday on CNN's "The Situation Room."
President Barack Obama will meet with congressional leaders on Thursday to discuss a deficit reduction deal that Republicans are linking to their support for increasing how much money the government can borrow.
When asked by CNN's Candy Crowley about a backup plan for getting the debt ceiling raised, Pfeiffer said there was "no other path" than for the limit on government borrowing to be increased by the August 2 deadline.
Jesse Ventura on Freedom Watch
with Judge Napolitano 4 6 2011
Without Low Interest Rates, The U.S. Financial System Dies
TheEconomicCollapseBlog.com
Right now, interest rates are near historic lows. The U.S. government is able to borrow gigantic mountains of money for next to nothing. U.S. consumers are still able to get home loans, car loans and student loans at ridiculously low interest rates. When this low interest rate environment changes (and it will), it is going to absolutely devastate the U.S. economy. Without low interest rates, the U.S. financial system dies. When it comes to borrowing money, it is the rate of interest that causes the pain. If you could borrow as much money as you wanted at a zero rate of interest for the rest of your life you would never, ever have a debt problem. But when there is a cost to borrowing money that changes things. The higher the rate of interest goes, the more painful debt becomes.
16 Reasons To Feel Really Depresse
About The Direction That The Economy Is Headed
EndOfTheAmericanDream.com
If you do not want to feel really depressed, you might not want to read this article. The U.S. economy is coming apart at the seams, and there are a whole lot of indications that things are about to get even worse. After a time of relative stability, the pace of job cuts is starting to pick up again, inflation is rising but paychecks are not, the U.S. housing crisis shows no signs of ending, millions of American families are drowning in debt and all of the recent polls show that the faith of the American people in our economy is eroding. As you read the statistics in this article, try to keep in mind that there are scores of families from coast to coast that are barely surviving from month to month. It can be a soul-crushing experience to work as hard as you can and yet justbarely be able to pay the mortgage and put food into the mouths of your kids. The reason why so many Americans believe that we are in a "recession" or a "depression" is because that is what they feel like they are living through every single day.
What's next for economy: Slow growth, weak hiring
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- Almost no one is satisfied with the current state of the U.S. economy. But economists say the outlook is pretty bleak too.
Sluggish economic growth will continue into 2012, if not beyond, with only modest hiring and high unemployment, according to a CNNMoney survey of 27 economists.
The economists predict that gross domestic product, the broadest measure of the nation's economic health, will grow at only a 2% annual rate in the second quarter, little improved from the 1.9% growth rate in the first three months of the year.
Bob Chapman & Alex Jones:
The Command Destruction Economy 1/3
Bob Chapman & Alex Jones:
The Command Destruction Economy 2/3
Bob Chapman & Alex Jones:
The Command Destruction Economy 3/3
Why Pensions are Underfunded
By Megan McArdle - TheAtlantic.com
Because people don't understand what these obligations cost:
This table uses after inflation numbers, which makes the returns appear small. In reality, CalPERS, CalSTRS, and most other pension funds, project a long-term rate of inflation of 3.0%. This means that the nearly best case scenarios here, 7.5% before inflation (showing as 4.5% after inflation on the table), are representative of the current official long-term projections used by most pension funds. Based on the official rates of projected returns for pension fund investments, a 30 year veteran, retiring on a "3.0% at 50″ pension, will collect 90% of their salary in retirement, and they will need to contribute 32.5% of their pay into their pension fund every year they work. On that basis, 9% is less than one-third what will be necessary to fund their retirement pension. But what if the pension funds return less than 4.5% (7.5% before inflation) per year?
Job Concerns Soar Among Employed and Unemployed Alike
ByDouglas McIntyre - DailyFinance.com
Employee concerns about layoffs have moved sharply higheraccording to a new surveyby online jobs company Glassdoor. The percentage of those who are worried rose sharply to 22% in the second quarter, up from 17% in the first three months of the year. The firm pointed out that figure had reached its highest level since the third quarter of 2009, in the heart of the recession.
Other key results of the survey are that 48% of those polled do not expect a raise in the next year, and 31% of workers "believe it is unlikely they would be able to find a job matched to their experience and compensation levels in six months if they lost theirs." Of those unemployed but looking, 36% believe it's unlikely they will be able to find a job in the next six months, the survey reported.
Why a Sprint iPhone Is on the Way — Analyst Explains
By Christina Bonnington - Wired.com
Sprint may be next in line to join Apple's iPhone ranks.
It's highly probable that a Sprint iPhone will debut before the year's end, according to Shing Yin, an industry analyst at Citadel Securities.
Because Verizon is ending its unlimited data plans Thursday, and because Sprint features cheaper pricing for comparable plans on AT&T and Verizon, the carrier "could offer an attractive proposition for more price-conscious users (a demographic that we think is increasingly important to Apple following the rise of Android)," and "could be a relatively stronger seller than the Verizon iPhone," according to Yin.
Yin's report is careful to mention that he doesn't think the actual device will be priced less than an iPhone from a competing carrier — just that Sprint's service plans cost less.
Blistering, blinding weed creeps toward a city near you
Keith Srakocic / ASSOCIATED PRESS - MSNBC.com
Do not try this at home: Pennsylvania Department of Agriculture agent Michael Zeller stands beside a flowering a giant hogweed plant before cutting it down and spraying it on a farm in McKean, Pa. Experts recommend calling an agriculture hotline to find out how to safely remove one of the weeds without getting injured.
By Linda Dahlstrom
Forget the blob: There's another horrific, flesh-eating creature dripping toxic goo creeping toward New York – a really pretty plant.
Giant hogweed has blooms the size of umbrellas, but don't be fooled. The noxious weed's sap can cause third-degree burns and scar those who come into contact with it and then are exposed to sunlight, reports the New York Observer. The massive weed can also cause blindness if the sap gets in your eyes.
Al-Qaida could use hidden 'belly bombs'
to attack passenger planes, US warns Airlines told of terrorists developing 'surgically implanted' explosive compounds in effort to beat airport security
By Dominic Rushe in New York - Guardian.co.uk
American officials have warned airlines that they believe al-Qaida is developing "belly bombs" to beat airport security and allow suicide bombers to launch terror attacks on board passenger planes.
The department of homeland security has sent a bulletin to airline executives saying it has identified a potential threat from terrorists who could "surgically implant explosives or explosive components in humans".
Although many airports use advanced imaging technology that can "see" through people's clothing, the technology might not pick up a bomb which is hidden inside a body.
Ron Paul's on Texas Straight Talk:
Abolish the TSA, Privatize Airport Security!
US and Russia stir up political tensions over Arctic Heavy-hitting US politicians enter debate about the future of the far north, fuelling concerns about a new cold war
By Terry Macalister - Guardian.co.uk
The seventh ministerial meeting of the Arctic Council in May looked set be a mundane affair, with its focus on signing a new search-and-rescue agreement and handover of the chairmanship to Sweden.
But the atmosphere in Nuuk, the capital of Greenland, was electrified by the first visit to such a forum by the United States, courtesy of the secretary of state, Hillary Clinton, secretary of the interior Ken Salazar, and a host of other heavy-hitters.
Rush for Arctic's resources provokes territorial tussles US, Canada, Russia, Denmark and Norway are becoming embroiled in disputes over boundaries on land and at sea
By Terry Macalister - Guardian.co.uk
Two nations on opposite sides of the Nato military alliance divide –Russia and Norway – have signed a deal over who owns what in the Barents Sea. But there are plenty of other territorial tussles going on – some between good friends.
The United States and Canada still disagree on the setting of the boundaries in the Beaufort Sea – an area of intense interest to oil drillers.
Similarly, Canada has yet to resolve a dispute with Denmark over the ownership of Hans Island and where the control line should be drawn in the strait between Greenland (whose sovereignty remains with Denmark) and Ellesmere Island.
Germany Selling 200 Battle Tanks to Saudi Arabia
theTrumpet.com
According to reports published July 3, Germany has agreed to sell 200new Leopard battle tanks to Saudi Arabia, Saudi security sources said. The German government has not officially confirmed the deal, but if true it shows a major change in German arms export policy.
"So far, Saudi [Arabia] has bought 44 tanks from Germany and … in total wants to buy 200 tanks from Germany," one of the security sources told Reuters.
The deal to buy the most modern Leopard tanks, the Type 2A7+, was approved in principle by the German security council last week, according toDer Spiegel.
The tanks are built by Krauss-Maffei Wegmann and Rheinmetall and a large number of them will be made in Germany.
Stalemate on Hill grants Obama free hand on Libya
Means NATO airstrikes can go on
By Stephen Dinan-The Washington Times
Capitol Hill is keen to shape or even halt President Obama’s troop deployment to Libya, but lawmakers’ own inability to settle on a unified stance is undermining their efforts and leaving the president with a free hand to pursue the war his own way.
The House stalemated two weeks ago, failing to pass limits on Mr. Obama’s actions in Libya. Meanwhile, in the Senate, Democratic leaders canceled a Libya debate planned for this week and instead turned to symbolic tax legislation.
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Exposing the New World Order
identifying the global elite...
Global Elite William Engdahl Coast to Coast am 06-29-2011
7 reasons U.S. needs a Good Depression now Don't raise debt ceiling, save us from worse later
By Paul B. Farrell, MarketWatch.com
SAN LUIS OBISPO, Calif. (MarketWatch) — No, do not raise the debt-ceiling. You heard me: Block the debt ceiling vote. Don't raise it. America’s out-of-control. A debt addict. Time to detox. Deal with the collateral damage before it’s too late.
We need to fix America’s looming credit default, failing economy and our screwed-up banking system. Now, with a Good Depression. If we just kick the can down the road one more time, we’ll be trapped into repeating our 1930's tragedy, a second Great Depression.
Yes, depression. Spelled: d-e-p-r-e-s-s-i-o-n. Wake up America, recessions do not work. Won't work in the future. Remember that 30-month recession after the dot-com crash? Didn’t work. Why? Because in the decade since that 2000 peak, Wall Street’s lost an inflation–adjusted 20% of America’s retirement money.
Gold ends with a gain of more than $30 an ounce Investors seek a safe haven amid China, Greece worries
By Myra P. Saefong and William L. Watts, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures rallied Tuesday as ongoing concerns about global debt problems fed investment demand for the precious metal, lifting prices by more than $30 an ounce — their biggest one-day dollar gain in eight months.
Gold for August delivery GC1Q +0.04% rose $30.10, or 2%, to close at $1,512.70 an ounce on the Comex division of the New York Mercantile Exchange. That was the biggest one-day dollar and percentage gain for gold futures since Nov. 4, 2010, as well as the highest closing level since June 23.
The contract had lost $27.80 over the previous two regular trading sessions. Monday was a holiday.
Debt problems in the U.S. and Europe continue to support gold prices along with currency volatility and political instability all over the world, said Frank Lesh, a broker with Future Path Trading in Chicago.
Want Free money to pay overdue mortgage payments (at taxpayer expense)? EHLP is on the way... still time to apply.
What's the EHLP?
CNBC's Diana Olick explains how 30,000 homeowners who are at least 3 months behind in mortgage payments with a drop of 15% in income will get $50,000. They will NOT have to repay the loan IF they keep current with payments for five years. See her video report.
New Loan Program Aims to Prevent Foreclosure
By: Paige Calhoun - WDIO.com
For homeowners--making mortgage payments is a must to keep your house, but if you're in danger of foreclosure, a new federal program could help. It's called the Emergency Homeowners Loan Program (EHLP), and it could be the extra push that people need to prevent foreclosure.
The program caters to homeowners who have seen a 15 percent drop in income--due to underemployment, unemployment, or a medical condition. About 1400 Minnesotans will be selected at random--and those who are chosen could get up to $50,000 in interest-free loans for 2 years.
HUD Emergency Homeowners' Loan Program (EHLP)
HUD.gov How Does EHLP Work?
The Emergency Homeowners Loan Program will offer a zero interest, forgivable bridge loan to homeowners who have experienced a substantial loss of income (a reduction of at least 15%) due to unemployment or underemployment caused by adverse economic conditions or medical condition. Approved homeowners are eligible to receive one-time EHLP assistance to pay certain arrearages to bring them current, as well as ongoing monthly assistance to help them to make their monthly first lien mortgage payments (including payments of principal, interest, taxes, and insurances). Assistance is limited to a maximum duration of 24 months, or up to a maximum loan amount of $50,000 in mortgage payment assistance, whichever occurs first. The EHLP loan is secured by a junior lien against the approved homeowner's principal residence and is forgivable over a 5-year principal reduction period.
Emergency Homeowners' Loan Program (EHLP)
EHLP.NW.org How to Apply for EHLP
The U.S. Department of Housing and Urban Development anticipates a high amount of demand for the Emergency Homeowners' Loan Program (EHLP). In order to ensure that program funds are made available in a fair and impartial manner, homeowners interested in applying must first complete a Pre-Applicant Screening Worksheet (see below). If there are more potentially eligible homeowners than there are funds available to assist them, these worksheets will be entered into a randomized selection process. EHLP counseling agencies will evaluate completed screening worksheets to make an initial, informal pre-determination of household eligibility. Homeowners whose completed worksheets meet this standard will be randomly selected, and these homeowners will be invited to apply for an EHLP loan in the order they are selected. Unfortunately, due to the limited amount of resources available through the EHLP, some qualified homeowners will not be selected to complete an application. Furthermore, some homeowners will complete an application but not will not ultimately be approved to receive assistance if their applications are incomplete or if they do not otherwise meet all of the program's eligibility criteria.
More bank branches closing Weak economy, tighter rules prompt decision
By Todd Wallack - Boston.com
For the first time in 15 years, banks across the United States are closing branches faster than they are opening them, eliminating locations in Massachusetts, other parts of New England, and the rest of the country.
Bank of America, the nation’s largest bank, plans to close 1 in 10 branches nationwide by 2014, including some in Massachusetts. Webster Bank of Waterbury, Conn., plans to close a half-dozen branches, including one in Mansfield, in October. Rockland Trust and Community Bank of Brockton are each closing three branches.
Overall, banks have eliminated more than 1,400 US locations in the past two years. And almost every week, more branches go dark.
Regulators causing bank failures Returning banks to free market would strengthen economy
By Richard Rahn-The Washington Times
Beware Greeks bearing debt - or any other country that has too much of it. Despite ever-increasing government regulation of banks, which often are required to hold government debt as reserves, the systemic risk of a failure in the global financial system is growing rather than diminishing. There are solutions that require less, rather than more, regulation.
Some banks have been around for a couple of centuries or more, particularly in Switzerland, and yet they continue to thrive without government help. Only one Swiss bank out of 350 required state intervention in the financial crisis of the past few years. If you look at the big banks that have been in trouble or the banks that regulators and others worry about being in financial trouble, you will notice that virtually all of them have a corporate form of ownership and are heavily regulated. They also increasingly are being forced to be tax collectors for governments. Yet banks that are organized as general partnerships, such as Swiss private banks, where the owners of the banks have unlimited liability, have, in almost all cases, avoided failure or having to go to the government for a bailout.
Bank Nightmare Lives On
By Stephen Rosenman - SeekingAlpha.com
If at first you don't succeed, fail, fail, and fail again. That was the motto for the banking industry in 2008, 2009 and 2010. Pressured by the economy's near collapse, banks folded at an alarming rate. There were 25 bank failures in 2008, 140 in 2009, and 157 in 2010; a drastic change from the single digit failures normally seen. An alarming $634 billion in bank assets were seized during this three year period.
For over three years, the FDIC put teeter-tottering financials out of their misery, staking these so-called "zombie" banks, before turning over their assets and deposits to solvent firms. U.S. Bancorp (USB), BB&T Corporation (BBT), New York Community Bancorp (NYB), and Home BancShares (HOMB) grabbed some of these failed banks, for example.This year promised to be yet another sequel to the movie Night Of The Living Dead. In its December report, the FDIC announced that it had a list of 884 problem banks, 182 more than at the start of 2010, a list exceeding that of each of the preceding 17 years. The magnitude of the list potentially heralded a flood of bank failures.
Commercial Banks to Cover Their Silver Short Positions
BY CHRIS MACK - FinancialSense.com
Commercial Banks to Cover Their Silver Short Positions After an extended period of consolidation, the price of silver launched from $17 in August 2010 to just under $50 in April 2011. The fuel behind this move was not speculative buying, but instead short covering by large commercial short traders including JP Morgan.
As short covering buyers pushed the silver price up to its all time historic high of $50, several factors led to the large selloff in May. A breakout of $50 would remove technical resistance and attract fast money speculative traders that could quickly spike the price of silver to $100. Knowing this, JP Morgan likely hit the panic button. Readers can fill in the blanks, but what is public knowledge is that the CME embarked on an unprecedented series of increases in margin hikes which forced a liquidation of leveraged traders positions before they had the chance to put up more capital. One round of margin hikes was actually made on a Sunday.
Our Politicians Are Selling Off
Pieces Of America
To Foreign Investors –
And Goldman Sachs Is Helping Them Do It
EndOfTheAmericanDream.com
All over the United States, politicians are selling off key pieces of infrastructure to foreign investors and big Wall Street banks like Goldman Sachs are helping them do it. State and local governments across the country that are drowning in debt and that are desperate for cash are increasingly turning to the "privatization" of public assets as the solution to their problems. Pieces of infrastructure that taxpayers have already paid for such as highways, water treatment plants, libraries, parking meters, airports and power plants are being auctioned off to the highest bidder. Most of the time what happens is that the state or local government receives a huge lump sum of cash up front for a long-term lease (usually 75 years or longer) and the foreign investors come in and soak as much revenue out of the piece of infrastructure that they possibly can. The losers in these deals are almost always the taxpayers. Pieces of America are literally being auctioned off just to help state and local governments minimize their debt problems for a year or two, but the consequences of these deals will be felt for decades.
The Fed Rearranges the Deck Chairs on the Titanic Economy
By Bob Chapman - TheINternatinoalForecaster.com
World markets and especially US markets are in a state of uneasiness and it is only a matter of time before they degenerate further. The real question is will everything break loose between now and the end of the year? The answer in part is yes, and it is currently in process.
"The President’s Working Group on Financial Markets," along with elitist insiders normally have the ability to make the stock and bond markets do what they want them to. That is, at least on a short-term basis. We believe the market is being deliberately taken down by them in order to impress upon politicians that if they do not extend the short-term cash debt limit that the market will fall even further and that in turn will reduce their ability to get reelected. If you do not think that is possible then you have no idea what is going on. At the present time with about a month to the August 2nd deadline the two political parties are nowhere near an agreement. As we draw closer to the deadline investors will become more and more concerned and the market will trend lower.
How the Federal Reserve continues to conduct shadow bailouts
for the banking beasts and sets the world economy on FIRE. Fed balance sheet now at a record $2.84 trillion
as wages decline and banking profits soar.
Fed balance sheet now equivalent to 20 percent of U.S. GDP.
MyBudget360.com
The Federal Reserve is primarily concerned with one thing and that is to protect the interests of the banking industry. The Fed has no desire or need to protect the underlying economy. If they can get away with allowing banks to jump from one bubble to another they will do so. The success of the overall economy is only consequential if it aligns with the deeper interests of the banking cabal. This weekend former Fed Chair Alan Greenspan mentioned that simply bailing out Greece was a temporary measure. When pressed he went back into "Greenspeak" and rambled on in his typical obtuse language. The reason why global banks fear Greece is not because of the country itself, but because the country has billions of dollars in debt that global banks hold. These banks do not want to pay for their bad bets and would rather shift the cost to the overall population in general. The Fed balance sheet here in the U.S. is now up to $2.84 trillion, another record that gets no airtime in the press. The Federal Reserve continues with clandestine bailouts only to protect the interests of the banking elite.
Ron Paul Suggests Using Fed to End Run Debt Ceiling Impasse
by Yves Smith - NakedCapitalism.com
The only reason to think Republicans are serious about their threat to have the Federal government default rather than raise the debt ceiling is that they have an undue fondness for apocalyptic outcomes. I suppose I should actually favor this sort of thing; I’ve long thought the only hope for getting the US freed from rule by financiers was another financial crisis, provided it came soon enough and it was big enough. This one might fit the bill on those scores.
However, with the immediate trigger being pigheaded Congressmen, the banks might look like innocent victims, when the ballooning of public debt around the world was the direct result of their recklessness and the resultant global economy near-death experience. So a debt-ceiling-row-induced great big financial dislocation would probably not produce the opportunity to break the power of banks that yours truly and many others are looking for.
What Can the Treasury Legally Do if the Debt Ceiling Isn't Raised?
By Megan McArdle - TheAtlantic.com
Jonathan Zasloff ponders the question:
Unlike Grossman, however, McConnell has an answer for what the Public Debt Clause means: if the President can't issue new debt, how can he ensure that the government doesn't go into default? Easy, says McConnell: he can make unilateral spending reductions in order to pay off the bondholders:
At most, it means that paying the public debts and pension obligations of the United States, as they become due, has priority over all other spending. Each month, the Treasury takes in about $175 billion in new revenues. These are more than sufficient to pay principal and interest when due, as well as pension obligations...
If we reach the debt limit, the Treasury will be compelled to reduce spending (other than payments on the public debt and pensions) to bring current expenditures in line with current receipts, just as a family has to do when it has maxed out on its credit cards.
If Default Is So Bad for the GOP, Why Aren't the Democrats in Favor? The first comment to my previous post asks a good question:
By Megan McArdle - TheAtlantic.com
Based on the argument that the Democrats will get everything they want if we default (Obama re-elected, more Democrats in Congress, higher taxes, more programs), why would they (Democrats) settle for anything less than default?
I think some version of this question is going through many conservative minds. But it commits a fundamental error: it assumes that this is some sort of zero-sum game. Republicans frequently accuse Democrats of behaving as if the economy is zero-sum, and economic output is a fixed pie. Now they're committing the same error.
What the people asking this question are missing is that the budget needn't be zero-sum: it can be negative-sum. It is possible for the Democrats to lose without the Republicans winning. Both sides can end up worse off. Leave aside the naive thoughts that Democrats might be trying to avoid default because they, like, care something about the honor of their nation. They might not be willing to suffer themselves just because doing so will make the GOP suffer even more. No matter what you may have heard on the radio, spite and envy are not their sole political motivations.
Pat Buchanan: Is a U.S. Default Inevitable?
By Patrick J. Buchanan - CNSNews.com
As President Bush prepared to invade Iraq in September 2002, the head of his economic policy council, Lawrence Lindsey publicly estimated such a war could cost $100 billion to $200 billion.
Lindsey had committed candor, and the stunned Bushites came down on him with both feet.
"Baloney," said Donald Rumsfeld. The likely cost would be $60 billion, said Mitch Daniels of the Office of Management and Budget. We can finance the war with Iraqi oil, said Paul Wolfowitz.
By year's end, Lindsey was gone, back, in Ronald Reagan's phrase, "testing the magic of the marketplace."
And the cost of the Iraq War? It has passed $1 trillion.
Germany's judges hold the euro's fate in their hands Whether or not Europe's monetary union survives in its current form, shrinks to a Carolingian core, or shatters, depends as much on abstruse legal arguments put forward on Tuesday in Germany's constitutional court as it does on the parallel drama unfolding on Greek streets.
By Ambrose Evans-Pritchard - Telegraph.co.uk
If the eight judges in Karlsruhe rule that Europe's €500bn bail-out machinery breaches of Germany's Basic Law – or Grundgesetz – in any significant way, they risk knocking away the central prop beneath the debt edifice of Southern Europe.
The judges have distilled a plethora challenges to the Greek, Irish, and Portuguese bail-outs into three complaints. These include one by a group of professors who argue that the Greek loans subvert the Bundestag, violate the "no bail-out" clause of the Lisbon Treaty, and amount to the creation of a fiscal transfer union, by stealth, without the requisite changes in the German Grundgesetz, and "strike a blow at the constitutional foundations of our state and our society".
S&P Warns Greek Bailout Plan Constitutes Default;
Greece at Risk of Missing June Target;
Spoon Feeding will Continue Until Greece Dies
By Mike Shedlock
Before receiving the next bailout tranche, Greece May Have Missed June Primary Balance Target
Greece is at risk of missing a key budget target in June, European Union experts said in a report, a sign of the uphill struggle the country faces as it tries to get its deficit reduction plans back on track.
The report, prepared by European Commission budget experts with input from European Central Bank officials and published over the weekend, says that Greece could miss its June target for its primary budget balance, a measure of the government deficit that excludes interest payments on outstanding debt.
Theater Of The Absurd:
Greece Has Already Missed Its June Budget Target
Submitted by Tyler Durden - ZeroHedge.com
The 5th Greek bailout tranche has not been delivered yet, under the very, verystrict condition that the country adhere to the terms of its pillaging by European banks, and already Greece, which has proven beyond a reasonable doubt that a country that refuses to do work, and conducts full day strikes on a whim actually does not grow, has just fallen behind a critical monthly Troica benchmark. From Dow Jones: "Greece is at risk of missing a key budget target in June, European Union experts said in a report, a sign of the uphill struggle the country faces as it tries to get its deficit reduction plans back on track. The report, prepared by European Commission budget experts with input from European Central Bank officials and published over the weekend, says that Greece could miss its June target for its primary budget balance, a measure of the government deficit that excludes interest payments on outstanding debt." And here is why the last thing anyone in Europe cares about is actual Greek growth: "Government revenue faces "significant" shortfalls that have only partially been offset by lower spending and delayed payments, the report says. "As a result, the quarterly performance criterion on the primary balance could be missed already in June." June. As in before the disbursement of cash contingent on the primary balance being met...
After Greece, Portugal
BY JOHN RUBINO - FinancialSense.com
Now that Greece has been kicked down the road, it’s time for the other PIIGS countries to start lining up for similar deals. Portugal looks to be next, after its most recent deficit report:
Portugal’s 1Q Budget Deficit Higher Than Expected
LISBON (Dow Jones)–Portugal’s budget deficit for the first quarter of the year came in higher than suggested by the previous government, forcing the new one to step up efforts to control the country’s accounts.
Portugal’s statistics agency said the deficit for the first quarter was at 8.7% of grossdomestic product. Although it was an improvement from 9.2% of GDP in the fourth quarter, it is still much higher than the 5.9% Portugal must reach by the end of the year under a EUR78 billion bailout program.
Portugal’s Debt Rating Cut to Junk by Moody’s
By DAVID JOLLY and LIZ ALDERMAN - NYTimes.com
Moody’s Investors Service cut Portugal’s debt rating to junk status on Tuesday, ratcheting up the pressure on euro zone governments to work out a lasting solution to their financial woes.
Moody’s cut its rating on Portugal's long-term government bonds to Ba2 from Baa1 and said the outlook was negative, suggesting more downgrades might be in store.
Even though Portugal negotiated a $116 billion rescue package in May, the ratings agency cited the risk that the country would need a second bailout before it could raise funds in the bond markets again and that private sector lenders would have to share the pain.
Treasurys extend gains after Portugal downgrade
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices extended gains on Tuesday, pushing 10-year yields down for the first day in six, as renewed worries about the multiple European countries struggling to support their debt load fueled a shift in demand for the relative safety of U.S. debt.
Moody's Investors Service cut its rating on Portugal on a day when the viability of a second bailout of Greece came under more scrutiny from ratings companies.
Yields on 10-year notes 10_YEAR +0.35% , which move inversely to prices, fell 6 basis points to 3.12%. A basis point is 1/100th of a percentage point.
Yields on 2-year notes 2_YEAR +3.75% declined 6 basis points to 0.43%, after trading around 0.45% prior to the downgrade.
The Chinese Black Swan
BY VITALIY KATSENELSON - FinancialSense.com
Party rulers in China are trapped in a position that chess players deeply fear — zugzwang — where any move made puts you at disadvantage. In China, the potential cost of both action and inaction is economic collapse.
China is slowly starting to face the consequences of its actions — loans grew over 30% a year over the last few years — and inflation is rising fast. Inflation in developed countries is unpleasant, but it is tolerable. For a developing country — and China, despite its size, is still a developing country — it can be catastrophic. In developed countries, we spend two or three times less on food as a percentage of our income as do people in developing countries. Therefore, though food inflation is unpleasant, we have a much greater tolerance (margin of safety) for it. While food inflation the US can mean fewer trips to restaurants or no summer vacation, food inflation in China leads to hunger.
Get Ready for $150 Oil After a decline this summer, crude's price is likely to rise sharply by next spring. It will hurt the economy, but it won't be a disaster.
By GENE EPSTEIN - Barrons.com
The U.S. economy is never completely ready for higher oil prices, which is one reason they take a nasty economic toll when they arrive. But readiness can be enhanced by awareness of the likely outlook for petroleum prices–and the outlook today is relatively grim, although probably not disastrous.
Despite the recent 20% decline from April highs, new highs on crude, heating oil, diesel fuel, jet fuel and gasoline seem likely over the next 12 months. Following some further easing over the summer, the second leg of the long-term bull market in petroleum–the first occurred in 2007-08–probably will begin this fall.
The Financial Landscape: U.S. Has an Economic Spilt Personality
By Eamon Murphy - DailyFinance.com
Let The Good Times Roll?:Profits Thrive In Weak Recovery,declaredThe Wall Street Journalin a front-page headline Monday: "While the U.S.economystaggers through one of its slowest recoveries since the Great Depression, American companies are poised to report strongearningsfor the second quarter -- exposing a dichotomy between corporate performance and the overall health of the economy." Although the recession officially ended two years ago, economic indicators like unemployment, bank lending, andhome pricesstill look grim. Corporate earnings, on the other hand, are shaping up quite handsomely -- the total profits of S&P 500 companies "are projected to rise 13.6% from a year ago for the second corner," theJournalreports. Reasons given for this state of affairs include "demand from emerging markets" and, more irksomely, "cost cutting during the recession," which "helped improve productivity and profitability."
The New War of Independence - Against Corporate Politics
by: Richard (RJ) Eskow - Truth-Out.org
This is the age of corporatized politics. That means we may admire our leaders, but we can't depend on them. We're paying the price for Thomas Jefferson's unfulfilled desire to "crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country."
This July 4th, politics is too important to be left to the politicians. The stakes are too high and the system is too broken. Citizen action is everyone's job now, and it will be as long as our political debate focuses on misplaced austerity and ignores the majority's yearning for jobs, growth, and those things that government does best.
Gov. Walker: 'Not a lot of courage' in Washington to cut spending
By Meghashyam Mali - TheHill.com
Wisconsin Gov. Scott Walker (R) called Sunday for Congress and the president to show "courage" in debt negotiations and push for structural changes to the budget as part of any agreement to raise the country’s debt ceiling.
"If they fail to do something in response to this debt-ceiling limit to structurally change where they're headed, we're in real trouble with the economy," said Walker on CBS News's "Face the Nation."
Bill Clinton calls for corporate tax cut
By MIKE ALLEN | Politico.com
ASPEN, Colo. — President Bill Clinton says the nation's corporate tax rate is "uncompetitive" and called for a lower rate as part of a "mega-deal" to raise the debt ceiling.
"When I was president, we raised the corporate income-tax rates on corporations that made over $10 million [a year]," the former president told the Aspen Ideas Festival on Saturday evening.
"It made sense when I did it. It doesn’t make sense anymore — we've got an uncompetitive rate. We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay. But how can they do that by Aug. 2?"
Market Still Shrugging Its Head and Shoulders
BY BILL FLECKENSTEIN - FinancialSense.com
Over the July 4th holiday world markets were mixed and rather uneventful. The early going today in America was essentially a complete snooze, as the indices drifted around unchanged for the first half of the day. Beneath the surface, many of the high-flyers were strong, but other than that there wasn't a whole lot going on.
We won't get much corporate news this week, but we certainly will next week as earningsseason commences. I expect to see some disappointment when it comes to third quarter (and second half) guidance, particularly in the tech arena, but possibly from other sectors as well.
Number One?
20 Not So Good Categories
That The United States Leads The World In
TheEconomicCollapseBlog.com
Is the United States "number one"? Many Americans take deep pride in their nation and the truth is that the U.S. has a lot going for it. The United States has the largest economy in the world. The United States also has the most powerful military on the entire planet. The United States has produced most of the greatest movies that the world has ever seen. But the United States is also number one in a lot of categories that are not go great. If we ever want to turn this country around, we need to be very honest with ourselves. We need to take a long, hard look in the mirror and realize that it is not a good thing that we are number one in divorce, drug addiction, debt, obesity, car thefts, murders and total crimes. We have become a slothful, greedy, decadent nation that is exhibiting signs of advanced decay. Until we understand just how bad our problems really are, we won't be able to come up with the solutions that we need.
Gallup: In No Month of Obama Presidency
Has Majority Believed Economy Improving
By Terence P. Jeffrey - CNSNews.com
(CNSNews.com) - Barack Obama has now been president for more than 29 months, yet in none of those months has a majority of Americans believed the nation’s economy is getting better rather than worse, according to the Gallup poll.
In fact, in no month of Obama’s presidency has belief that the economy is getting better exceeded 41 percent among American adults, a peak it reached in April 2010 and again in January 2011.
In the most recent three day-period reported by Gallup—July 1-July 3—only 31 percent of Americans said they believed the economy was getting better. Meanwhile, 63 percent said they believed it was getting worse.
Fourth of July marks home-sellers' scramble to get into new homes
By Melissa Preddy - BusinessJournalism.org
Hard to believe the Fourth of July weekend is behind us already.
It's sad for summer-lovers who see Labor Day speeding toward us and it’s even sadder for desperate home-sellers who thought this would be the season they finally unloaded their gridlocked house or condo.
It's a casual rule of thumb that motivated home buyers generally want to strike a deal in time to be moved in before the new school year starts before a summer-eased workload revs up again for employed adults and before winter holidays loom. That window of opportunity is shrinking daily, which makes this a good time for another look at distressed sellers and how they might be coping with underwater loans, high variable payments and the threat of foreclosure.
Family Remains Vital Part of Colorado Town's Fabric
By KIRK JOHNSON - NYTimes.com
STEAMBOAT SPRINGS, Colo. — Frank and Carrie Light and their eight children came here around 1900 to what was just a wide spot of a few hundred people. Then the town’s story and the family’s got intertwined. Now it is hard to tell where one begins and the other leaves off.
Wildfire or flood here in north-central Colorado? One of their great-grandsons is in charge at the county Office of Emergency Management. Going skiing? The Steamboat resort, which is about as famous as the town, was developed in the 1960s by a granddaughter and her husband. Vacation-home shopping? Two other great-grandsons became developers.
The Rising Cost of At-Home Tech As we move closer to relying entirely on the Internet,
the free information services of the past are being eliminated,
extending the divide between the haves and have-nots
By Peter Osnos - TheAtlantic.com
A recent rundown we conducted on our monthly bills for communications, home entertainment and digital information was striking. The bill for Cablevision in Connecticut was $232.64, covering cable (including HBO and Showtime) and broadband for our PCs. Our BlackBerrys were another $84.18 and $81.28. The two land lines were a relative bargain at $32.11 and $57.16. The best deal was a phone card for overseas calls (mainly to Beijing) at two cents a minute.
Now, there are extenuating circumstances. As a consultant, my wife often works from a home office, and I do a lot of work (this piece, for example) at home also. Except for the cable bill, however, it is hard to separate the purely business from the personal calls and emails in what has become for so many of us a 24/7 rhythm of interaction with friends, families and colleagues. But add it all up and home technology has become a significant item in the household budget. As recently as the mid-1990s, dial-up AOL was about $20, and we probably had basic cable, but television was essentially still free, and cell phones were just for calls and, with a two-year contract, the devices mainly were provided gratis.
Syria's President Bashar al-Assad sacks senior figure President Bashar al-Assad of Syria has sacked another
senior lieutenant as he prepares for potentially ground-breaking
negotiations with opposition figures.
By Richard Spencer - Telegraph.co.uk
A day after hundreds of thousands of protesters took over the centre of the city of Hama, a key flash-point, President Assad announced he had removed the governor of the province of which it is the capital, Dr Ahmad Khaled Abdel Aziz.
The dismissal was announced on Syria's state news agency, with no details as to whether he was sacked as a concession to the demonstrators or as punishment for letting their rally get out of hand.
But activists posting on Twitter claimed that Dr Abdel Aziz had been liked by the protesters and claimed he had been reluctant to order shootings.
Hillary Clinton: Time is running out for Assad
Telegraph.co.uk
Amid continued violence between government authorities and anti-regime protesters in Syria, the US secretary of State says there is no question that President Bashar al-Assad is "running out of time."
Speaking on a visit to Lithuania Mrs Clinton criticised the regime's incoherence in authorising an opposition meeting while continuing to crack down on political dissent.
"It doesn't appear that there is a coherent and consistent message coming from Syria. Allowing one meeting of the opposition in Damascus is not sufficient."
She said that unless Syrian authorities allowed a "serious political process", they would "continue to see increasingly organised resistance".
US Senate drops Libya resolution to focus on national debt The US Senate hastily dropped plans to vote Tuesday
on a symbolic resolution authorising the US role in Libya
amid a Republican insurrection to demand action
instead on the national debt.
Telegraph.co.uk
Harry Reid, the Democratic Senate Majority leader, said: "We've agreed, notwithstanding the broad support for the Libyan resolution, the most important thing for us to focus on this week is the budget."
His comments came after several angry speeches from Republicans who complained that Libya was the wrong measure at the wrong time and noted Mr Reid had cancelled an annual week-long recess to make progress in stalled debt talks.
"The most important national security issue facing the United States of America is the national debt," said Republican Senator Roger Wicker, a member of the Senate Foreign Relations Committee.
Col Muammar Gaddafi 'offers to give up power in Libya' Col Muammar Gaddafi has offered to give up power
for the first time, but only if his hated son is allowed to stand
as his successor, a Russian official claimed on Tuesday.
By Adrian Blomfield - Telegraph.co.uk
Western powers are seriously considering the proposal, which would include a guarantee of amnesty from prosecution for the Libyan leader, a senior official in the Russian leadership was reported as saying.
"The colonel has sent signals that he is ready to relinquish power in exchange for security guarantees and such guarantees are on the table," the official told Russia's respected Kommersant newspaper.
The purported offer comes amid speculation that Col Gaddafi is seeking to make a face-saving exit amid growing fears that shortages and poverty in the Libyan capital Tripoli were making his position untenable.
The U.S. Debt Owed by Each American Throughout History As Congress debates deficit reduction, we should consider how much more the nation is borrowing now than it has in the past
By Daniel Indiviglio - TheAtlantic.com
The U.S. government owes its creditors an awful lot of money. As of May 31, 2011, $14,344,668,281,211.01 in public debt was outstanding, according to the Treasury's "to the penny" calculation. But the U.S. government is just an extension of the American people. So really, that more than $14 trillion dollars is owed by all taxpayers. How does the amount owed break down per person?
This question is answered with some simple division. According to Federal Reserve estimates, the U.S. population at the end of May was 312.25 million. That's everyone -- not just adults and civilians. If you divide the total debt owed by the total number of Americans, you find that each one owes $45,939.
U.S. Needs More Monetary Stimulus: Roubini
By Benjamin Harvey - Bloomberg.com
The U.S. economy needs more fiscal stimulus in the short term because the economy remains weak, followed by measures to "deal with fiscal problems or you're going to have a fiscal train wreck," Nouriel Roubini said.
"The right solution would be to commit to a program of trying to control spending and raised taxes gradually over the next five years," Roubini, co-founder of Roubini Global Economics, said in an interview with Bloomberg Haberturk television on the sidelines of the Aspen Ideas Festival in Aspen, Colorado.
"The trouble is we're doing short-term drag rather than stimulus and we’re not committing to anything in the medium term, so the policy in the U.S. is not optimal," he said.
Tensions rise on Capitol Hill as America runs out of money A revitalised Barack Obama is battling to raise the US legal debt limit in the face of fierce Republican opposition
By Dominic Rushe - The Observer, via Guardian.co.uk
Not so long ago, the Onion, America's satirical "newspaper", ran a story about what had happened to the real Barack Obama. You know, the one who was all about change and "the audacity of hope". Apparently, he had been kidnapped by an imposter bent on destroying the president by turning him into a "wishy-washy loser". But with another election looming, and a new financial crisis brewing across the Atlantic, the old Obama seems to be back.
By 2 August the US must raise the legal limit on its $14.3 trillion debt or face dire consequences, and Republicans and Democrats have been locked in battle on Capitol Hill. With the crunch deadline approaching, Obama hit out at Republicans last week, saying they favoured corporate jet owners over children and the elderly. Those high-flying fat cats got six mentions in a speech that set out the president's combative stance.
Soros: Weaker Countries will soon be allowed to Abandon the E.U.
Written by Top Stock Portfolios - OilPrice.com
Billionaire businessman and prominent philanthropist, George Soros reportedly told Bloomberg that it is probable a country will exit the euro, as strategies are being implemented to allow economically weaker nations to abandon the European Union.
Many economists are speculating whether the Eurozone may eventually split and if the currency can survive the present turmoil, resulting from political leaders’ unwillingness to take the necessary steps to address underlying factors.
Soros, who previously generated over 30% while running the Quantum fund and proved his expertise in currency speculation when he made $1 billion by betting against the British pound in 1992, said that the survival of the EU is of "vital interest to all," but is in desperate need of restructuring before it disintegrates entirely.
Greece's Last Stand: S&P Rejects Bank Rollover
By Douglas A. McIntyre - 24/7 Wall St
The will of Greece's parliament to institute austerity measures was tested to the break point last week. Plans to reduce the deficit carried by a razor thin margin. It turns out that the margin may not be enough. Parliament will probably need to offer more concessions, which is unlikely in the present environment. The chance to salvage Greece looks closer to impossible again.
A "rollover" of Greek debt held by private banks is essential to the cure of its sovereign obligation trouble. S&P has deemed that action as tantamount to a default.
The credit rating agency writes:
In summary, the growing risk that the Hellenic Republic might engage in a distressed debt restructuring was one of the reasons we lowered its rating on June 13 While we would likely view the Federation Bancaire Francaise proposal, if it proceeds in its current form, as an effective default, we recognize that it is just one of a number of proposals attempting to address the Greek government's 2011-2014 financing needs and the sustainability of its future debt burden.
Gerald Celente: 'IMF - International Mafia Federation'
Greek Sovereignty to be "Massively Limited" by EU/IMF Vultures Economic Bondage:
The price to pay for failing to resist globalist debt slavery
By Paul Joseph Watson - PrisonPlanet.com
The cost of a decision last week to allow globalist vultures to metaphorically hog-tie Greece while the EU and IMF commences a good old fashioned economic pillaging of her state assets is a total evisceration of the country’s sovereignty, according to Eurogroup chief Jean-Claude Juncker.
"The sovereignty of Greece will be massively limited," Juncker told Germany’s Focus magazine, adding that "experts" are now descending on the country to oversee a huge fire sale of state assets to private companies, likening the situation to post-collapse East Germany when 14,000 East German firms were sold off between 1990 and 1994.
How Greece's debt crisis affects U.S. investors and consumers The biggest threat would be a drying up of credit worldwide if Greece defaulted on its debt. As banks and other lenders are hit with losses, they could drastically rein in lending activity.
By Walter Hamilton, Los Angeles Times
The prospect of a resolution to the Greek debt crisis, bolstered by Greek lawmakers' approval of a sweeping austerity plan, has buoyed investor spirits: After falling for much of the last two months, in part out of concern about Europe's debt troubles, the stock market rallied each day last week, with the Dow Jones industrial average jumping 5.4% to close within 228 points of its late April high.
Still, important issues need to be resolved for the Greek aid package to go forward. And fear remains that the underlying problems afflicting Greece and some of its European counterparts are being swept under the rug. That means the countries eventually could have to restructure their debts, and bondholders could be forced to accept some losses.
6/29/2011
Peter Schiff On FXBIZ: Summer Of "Euro" Discontent
Gold Special Report:
Erste Group Says Foundation Of A Return To Sound Mone
Has Been Laid, Expects Gold To Hit $2,300
Tyler Durden - ZeroHedge.com via PrisonPlanet.com
Erste Group's Ronald Stoeferle has released another must read report on gold, recapping all the recent developments in the space, and more importantly putting the recent price moves in context. While there are numerous key observations which we leave to readers to uncover on their own, arguably the key fact is the following: "The possession of gold is tantamount to pure ownership without liabilities. This also explains why it does not pay any ongoing interest: it does not contain any counterpart risk. Along with the International Exchange and the Chicago Mercantile Exchange, JPMorgan now also accepts gold as collateral. The European Commission for Economic and Monetary Affairs has also decided to accept the gold reserves of its member states as additionally lodged collateral. We also regard the most recent initiatives in Utah and in numerous other States as well as in Malaysia, and the planned remonaterisation of silver in Mexico as a clear sign of the times.The foundation of a return to "sound money" seems to have been laid."
Gold Advances in London Trading
on Decline to Six-Week Low, Weak Dollar
By Nicholas Larkin and Chanyaporn Chanjaroen - Bloomberg.com
Gold gained for the first time in three days in London as some investors bought the metal after its drop to a six-week low and as a weaker dollar spurred demand for an alternative asset.
The dollar was little changed after earlier today touching a three-week low versus the euro on speculation the European Central Bank will raise interest rates this week. European finance ministers on July 2 authorized an 8.7 billion-euro ($12.6 billion) loan payout to Greece by mid-July after the nation’s parliament passed austerity measures.
The rise of gold and the fall of money
By Patrick Dewhurst - Cyprus-mail.com
INSPECT any British bank note and you will see in small letters the words “I promise to pay the bearer on demand the sum of... pounds”
The words allude to the days gone by when notes were a substitute for gold, and when the Bank of England would honour the note by handing over pieces of the metal.
Sadly this is no longer done, and currencies have no tangible basis - instead their value is based on trust and price stability: both of which are threatened by current economic climate.
In response to this, and the failing Greek economy, many Cypriots are turning to gold for security, giving rise to hundreds of gold retail, brokering and storage firms.
Keiser Report: The Counterattack! (E160)
Caveat Venditor!
By: Eric Sprott & Andrew Morris
The recent bear raid on silver has left many concerned about the sustainability of its historic run. Silver, being a relatively obscure market for most mainstream commentators, attracted much attention in the ensuing days following the May 1 takedown. Indeed, though the 30% drop in silver occurred over only four days, seemingly all eyes were on silver, with commentators who could’ve cared less about the silver market only a couple of months ago, suddenly tripping all over one another to make the bubble call. Silver bubble 2.0? Hardly. Anyone who has been fortunate to have been invested in silver over the past few years would unfortunately be used to such blatant takedowns. The Chinese don’t call it the "Devil’s Metal" for no good reason. With so much talk these days about the risks of investing in silver, we think that perhaps it may be timely for us to weigh in on the matter. The silver market is riskier than ever, but for reasons the vast majority of pedestrian commentators have failed to grasp.
Oil Trades Near Two-Week High in New Yor
After EU Authorizes Greek Loan
By Sherry Su and Ben Sharples - Bloomberg.com
Oil in New York traded near a two- week high after the European Union authorized a loan payout for Greece, easing speculation the country's debt crisis will derail the region’s economic recovery.
Futures climbed as much as 0.6 percent after European finance ministers approved an 8.7 billion-euro ($12.6 billion) aid payment to Greece on July 2. Brent crude gained as much as 0.4 percent after Goldman Sachs Group Inc. said the "downside risk" to oil would be "reduced proportionately" as sales of stockpiles from members of the International Energy Agency might be less than announced.
Saudi prince proposes oil war with Iran
UPI.com
DUBAI, United Arab Emirates, June 30 (UPI) -- Underlining the escalating cold war between Saudi Arabia and its rival Iran, former intelligence chief Prince Turki al-Faisal proposes the kingdom use its oil power to drive down prices to batter the Islamic Republic's sanctions-hit economy.
That would ratchet up tensions in the Persian Gulf and the wider Middle East at a time of unprecedented political upheaval.
Iran and other hawks in the Organization of Petroleum Exporting Countries blocked Saudi-led efforts to boost oil production to bring down prices, driven up sharply by the region-wide turmoil, at the cartel's summit in Vienna June 8.
Small Business and the Jobless Recovery
Mises Daily: by Fred Buzzeo
If we listen to most economists, we are told that the recession is over and we are in a period of recovery. In fact, the National Bureau of Economic Research(NBER), the official voice on this matter, tells us that the recovery began in June 2009.
Fortunately, most Americans focused on making a living see right through this illusion. For example, a recent New York Times/CBS poll indicates that Americans are becoming increasingly disillusioned with the performance of the US economy. An astonishing 70 percent of respondents said that the country is moving in the wrong direction.
Ron Paul's Surprisingly Lucid Solution to the Debt Ceiling Impasse
By Dean Baker - The New Republic
Representative Ron Paul has hit upon a remarkably creative way to deal with the impasse over the debt ceiling: have the Federal Reserve Board destroy the $1.6 trillion in government bonds it now holds. While at first blush this idea may seem crazy, on more careful thought it is actually a very reasonable way to deal with the crisis. Furthermore, it provides a way to have lasting savings to the budget.
The basic story is that the Fed has bought roughly $1.6 trillion in government bonds through its various quantitative easing programs over the last two and a half years. This money is part of the $14.3 trillion debt that is subject to the debt ceiling. However, the Fed is an agency of the government. Its assets are in fact assets of the government. Each year, the Fed refunds the interest earned on its assets in excess of the money needed to cover its operating expenses. Last year the Fed refunded almost $80 billion to the Treasury. In this sense, the bonds held by the Fed are literally money that the government owes to itself.
Credit agencies warn about debt-payment delay Inaction could trigger drop in rating
By Patrice Hill-The Washington Times
With signs multiplying that debt-reduction talks between the White House and Congress are at an impasse, Wall Street credit agencies are stepping up their warnings that even a temporary delay in making payment on the government’s $14.3 trillion of debt will result in a significant cut in the nation’s perfect credit rating.
In unusually frank statements about the consequences of congressional inaction last week, Moody’s Investors Service said it anticipates a cut from AAA to AA if the impasse leads to even a brief suspension of debt payments after the Treasury effectively reaches its borrowing limit Aug. 2. And Standard & Poor’s warned that it would go further and plunge the U.S. rating to the lowest possible rung — a "D" for default.
The Fifth Option:
Is This how Governments Will Fix Their Debt Problems?
Written by Gail Tverberg - OilPrice.com
We have all read about the standard "fixes" for a governmental debt problem – (1) inflate your way out of the problem, (2) cut programs and/or raise taxes, and (3) restructure debt, perhaps delaying repayment and giving bondholders a "haircut" on promised payouts.
A fourth one seems to circulate through peak oil circles, namely "debt jubilee". It seems to me that there is really a fifth option as well, and that is the one that may actually get used more this time around, at least in some parts of the world. The fifth one is "do a disappearing act." The government in question folds up, and maybe a new government is formed, or maybe not. If debt is really a problem, the new government would not take on the obligations of the previous government.
pot calling the kettle black.... Even Greenspan Knows We're Screwed
Submitted by Phoenix Capital Research - ZeroHedge.com
In case you missed it, Alan Greenspan just set a new world record for hypocrisy stating that the Fed’s stimulus has had little impact on the US economy.
As a brief reminder, it was Alan Greenspan who created both the Tech and the Housing bubbles by maintaining loose money policies. It was also Greenspan who helped Wall Street to dismantle regulation related derivatives, leverage, and more.
Put another way… pretty much every single problem with the financial system today was created or at least greatly aided by Alan Greespan and his policies. And if you think Greenspan was just an ignorant dupe, you should consider that as early as 1999 he stated in private that derivatives could "implode" the market.
All the perplexities, confusions, and distresses in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation. – John Adams, letter to Thomas Jefferson (1787-08-25), The Works of John Adams
If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. - Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, 1934 foreword to 100% Money, by Irving Fisher. Fisher was a Yale economist whose proposal for monetary reform lost to Keynes’ deficit spending plan during the Great Depression.
Homeowners association board
can hike assessments without vote by owners Regular assessments can be raised as much a 20% a year, and special assessments of up to 5% of the association's budgeted gross expenses may be approved without titleholders' input.
By Stephen Glassman and Donie Vanitzian - LATimes.com Question: Our board keeps imposing assessment increases and owners can't afford it. Regular monthly assessments are raised indiscriminately. Owners have no say in these increases. When board members are questioned they say the association attorney told them they could raise the assessments whenever they want. Can they do this and what are owners' rights? Answer: Boards can increase assessments without a titleholder vote as long as they follow the law.
Civil Code section 1366 provides for such increases. Regular assessments may be increased up to 20% a year, and special assessments of up to 5% of the association's budgeted gross expenses may be approved without a vote by owners. Increases without a vote can happen only if the board has distributed all the documents required by Civil Code section 1365 for the prior year.
Social Security Ponzi Scheme The Missing Money
by Thomas Sowell - LewRockwell.com
One of my earliest memories of revulsion against war came from seeing a photograph from the First World War when I was a teenager. It was nothing gory. Just a picture of a military officer, in an impressive uniform, talking to a puzzled and forlorn-looking old peasant woman with a cloth wrapped around her head.
He said simply: "Don't you understand, madam? The village is not there any more."
To many such people of that era, the village was the only world they knew. And to say that it had been destroyed in the carnage of war was to say that there was no way for them to go back home, that their whole world was gone.
Americans Now Think A 40-Hour Work Week Is "Part Time"
By Patricia Laya - businessinsider.com
Americans consider a 40-hour work week as "part time" in most professional jobs and as a sign of a stagnant career, according to a recent study by the Center for American Progress.
The financial reward for working longer hours has increased substantially in the past 30 years, especially for professional men.
The study, "The Poor, the Professionals, and the Missing Middle" says:
"The long-hours premium is particularly apparent in job categories with the largest earnings inequality within a given group. In other words, hours have spiraled up as men strive to ensure they don’t end up as 'losers.'"
A TALE OF TWO SHUTDOWNS
BY JOHN HINDERAKER - PowerLineBlog.com
Minnesota's government shutdown has made national news, in part because it foreshadows, in some respects, the battle that will play out in Washington over the next month on the debt ceiling. What has happened in Minnesota is clearcut: our Republican legislature passed a budget for the next two years, consisting of nine spending bills. Our Democratic governor, Mark Dayton, didn't think the legislature spent enough money, so he vetoed them. As a result of Dayton's vetoes, state agencies ran out of funding as of July 1 and, with the exception of certain critical functions, the state’s government shut down.
Dayton's claim that the legislature didn't want to spend enough money will resonate only on the far left, given that the nine bills appropriated more money than Minnesota has ever spent in any two year period. But put that fact to one side: it is simply indisputable that the legislature appropriated funds for parks, roads, schools, drivers' license bureaus, etc. If those agencies have shut down, it is solely because of Governor Dayton's vetoes. In this context, for the Democrats to claim that Republicans somehow shut down the state's government is ludicrous.
Laws are for the little people, not President Obama
Jeannie DeAngeli - AmericanThinker.com
An ad to raise campaign funds has now made it official: Whatever rule applies to 300 million Americans does not and will never apply to the once-in-a-millennia exception to any rule that applies to all living entities: Barack Obama.
Based on his behavior, it's apparent the president views himself as a man so lofty in vision and skill that he's exempt from the decrees imposed on the little people. Could it be that Obama perceives legalistic edicts as necessary tools to herd lowlifes? If that were not the case, why would he be mentalizing which pair of golf shoes and what cologne to include in his ditty bag for a weekend at Camp David while chiding Congress for daring to take a break in the midst of a budget crisis?
Who would follow Geithner?
By Chris Isidore @CNNMoney
NEW YORK (CNNMoney) -- Timothy Geithner said Thursday that he plans to stay on as Treasury Secretary for the foreseeable future. But that hasn't stopped speculation about who might take his place later this year.
Sources told CNN and other news outlets Thursday that Geithner is considering leaving the Obama administration later this year, oncenegotiations on raising the government's debt ceiling and cutting the budget deficit are complete.
Geithner's family is moving back to the New York suburbs where they lived before he took office so his son can finish high school there. And as the head of Treasury through the worst financial crisis in a generation, and the last key member of President Obama's original economic team still on the job, a desire to leave wouldn't be a shock.
BMW layoffs exemplify the evisceration of the middle class Every working American should be dismayed by —
and afraid of — what BMW is doing.
By Michael Hiltzik - LATimes.com
By all accounts, BMW's parts distribution warehouse in Ontario was one of the jewels of the company's system.
Supplying dealer service departments throughout Southern California, Arizona and Nevada, it received gold medals from BMW for its efficiency and employed several of the top-ranked workers in the country. In the roughly 40 years its workers had been represented by the Teamsters union, there had never been a labor stoppage.
Times being what they are, when a Teamsters committee came to the plant in early June to open negotiations over a new contract to start Sept. 1, they thought they might be asked to accept minuscule wage increases and maybe some givebacks on health coverage.
Money, war and 2012
Medicare is Lousy Health Insurance
By John C. Goodman - Townhall.com
How many people do you know who pay three health insurance premiums to three plans? The only ones I know have gray hair.
They pay one premium to Medicare itself, another for Medigap insurance (to plug many of the holes in Medicare), and a third for drug coverage (Part D).
Even after all that, senior citizens still do not have the health insurance coverage the average person under age 65 has. The elderly and the disabled on Medicare potentially face bankrupting medical bills if they need expensive drugs or if they have a long hospital stay.
Ibuprofen and aspirin linked to irregular heart rhythm Commonly used painkillers including ibuprofen are increase the risk of developing an irregular heart rhythm by up to 40 per cent, according to a new study.
By Nick Collins - Telegraph.co.uk
The anti-inflammatories, which are widely available in supermarkets and pharmacies, have been previously linked to a higher chance of heart attacks and strokes.
But a new study has shown for the first time a connection between the drugs and atrial fibrillation, also known as irregular heart rhythm or flutter.
The condition is more common than heart failure and stroke, and is linked to a higher long-term risk of developing both.
Experts examined the records of 32,602 patients with flutter between 1999 and 2009 and compared each to ten randomly selected control patients.
Getting Used to Life Without Food, Part 2
Agribusiness as a Long-Term Strategy
BY WILLIAM ENGDAHL - FinancialSense.com
The record rise in grain and food prices in recent years is not a mere Wall Street profit gimmick, although obscene profits are being made. Rather, it is apparently an integral part of a long-term strategy whose roots go back to the years just after World War Two when Nelson Rockefeller and his brothers tried to organize the global food chain along the same monopoly model they had used for world oil. Food would henceforth become just another commodity like oil or tin or silver whose scarcity and price could ultimately be controlled by a small group of powerful trading insiders.
At the same time the Rockefeller brothers were expanding their global business reach from oil to agriculture in the developing world through their technology-driven Green Revolution scheme after the war, they were also financing a little-noticed project at Harvard University. The project would form the infrastructure for their plan to globalize world food production under the central control of a handful of private corporations.
Obama's Final Solution
By James Lewis - AmericanThinker.com
President Barack Obama is the most dogmatic and dangerous leftist we have ever seen in this country. He is not hard to understand. Obama is very simple. All his ideas were frozen in concrete a hundred years ago by Marxist-Leninism around 1920. In Dreams from My Father, Obama celebrates third-world Socialism, but that's just Marxist-Leninism with a racial overlay. Obama's ideas are all old and discredited. They have failed from the Soviets to Cambodia. North Korea is facing another mass famine today, so terrible that it can't even feed its own army. That is yet another failure of Marxist-Leninism. Over and over and over again. For radicals it doesn't matter. You have to break a lot of eggs to make that omelet.
Just as Jimmy Carter kicked over the Shah, a crucial pillar of support for American and Israeli security thirty years ago, Obama has just done with Egypt. By forcing Mubarak to resign, Obama has sabotaged the Egypt-Israel peace treaty of the last 30 years.
Turkey has also radicalized, and nobody in the American media seems to be taking notice. They must know the facts, but they are not telling us.
The Purposeful Flooding of America's Heartland
By Joe Herring - AmericanThinker.com
The Missouri River basin encompasses a vast region in the central and west-central portion of our country. This river, our nation's longest, collects the melt from Rocky Mountain snowpack and the runoff from our continents' upper plains before joining the Mississippi river above St. Louis some 2,300 miles later. It is a mighty river, and dangerous.
Some sixty years ago, the U.S. Army Corps of Engineers (USACE) began the process of taming the Missouri by constructing a series of six dams. The idea was simple: massive dams at the top moderating flow to the smaller dams below, generating electricity while providing desperately needed control of the river's devastating floods.
What you our founding fathers say, on the 4th? "A Founding Fathers' Independence Day Celebration"
By Terry Paulson - Townhall.com
Looking for some engaging guests for your 4th of July celebration? Imagine a few of our Founding Fathers dropping by!
Host: "What a surprise and an honor to have you visit. Our economy is struggling, people can't find jobs, and people are losing their homes. Some citizens are wondering if the American Dream is still alive. Do you have any thoughts for us in these tough times?"
Benjamin Franklin: "Always liberty. In pursuit of liberty we pledged to each other our lives, our fortunes and our sacred honor. Liberty was more important to us than material prosperity. Prosperity is a fruit of freedom, not its root."
Independence Day Propaganda
by Anthony Gregory - LewRockwell.com
Libertarians often insist Independence Day is really our holiday, which statists have no right to celebrate with a straight face. But perhaps this whole approach is misguided. Maybe the lovers of freedom should be the ones loath to bring out the fireworks.
Surely, conservatives who cherish the Fourth of July while cheering today’s wars have a high tolerance for cognitive dissonance. The American Revolution was, at best, a revolt against empire. The taxes at issue were being used to finance Britain's national security state. The colonial rebels didn't "support the troops" – they resented them. And they resented Britain’s status as the hypocritical world power, which closely resembled the modern United States – an empire claiming the mantle of liberty while smashing its colonial subjects. Today's conservatives would have likely been partisans of King George. In our own time, true independence would mean Washington, DC, releasing control of its satellites and colonies worldwide.
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