Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Thursday 01.26.2012
Gold ends atop $1,700; Fed extends low-rate pledge Silver leads gains in metals,
ends at highest since mid-November
By Myra P. Saefong and V. Phani Kumar, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold prices finish sharply higher Wednesday, topping $1,700 an ounce, as the Federal Reserve’s monetary-policy committee extended its pledge to keep interest rates at exceptionally low levels till late 2014, which will help boost demand for the precious metal as an inflation hedge.
Silver futures led the percentage gains among the major metals, with prices settling at their highest since mid-November.
Silver is on the way to break $50/oz in 2012
Interview with David Morgan - CommodityOnline.com Hard Assets Investor: Silver is starting out 2012 strongly. Is it following Gold or is it blazing its own path? David Morgan: Silver is following gold, but if you study silver carefully, there are times when silver leads and gold lags.
A quick example was last year. We saw silver basically double from around the $25level to $48, in a matter of months. That ended about May 1. Gold did a similar parabolic move, but not quite the percentage gain that silver outlined, but it did it later in the year. So who went parabolic first, silver or gold? Well, in this case, silver did.
Paper Money Collapse The Folly of Elastic Money and the Coming Monetary Breakdown
Detlev S Schlichter with James J Puplava - FinancialSense.com
All paper money systems in history have ended in failure. Either they collapsed in chaos, or society returned to commodity money before that could happen. Drawing upon novel new research, Paper Money Collapse conclusively illustrates why paper money systems—those based on an elastic and constantly expanding supply of money as opposed to a system of commodity money of essentially fixed supply—are inherently unstable and why they must lead to economic disintegration.
Peter Schiff, "Europe is the Warm Up,
but America is the Main Event"
Davos 2012: George Soros warns
'debt crisis could destroy European political union' George Soros, the billionaire investor, has warned that the eurozone debt crisis could destroy European political union.
By Richard Fletcher - Telegraph.co.uk
"The measures introduced by the European Central Bank ... have relieved the liquidity problems of European banks but they did not cure the financing disadvantage from which the highly indebted member states suffer.
"Half a solution is not enough. It leaves the weaker members of the eurozone relegated to the status of third world countries that become highly indebted in a foreign currency," he added.
Germany he said was now acting as the "taskmaster", instead of the IMF imposing tough fiscal discipline.
George Soros Has Hard Words for European Union
By: Reported by Geoff Cutmore, Written by Ted Kemp - CNBC.com
Billionaire investor George Soros on Wednesday minced no words on the financial troubles faced by the Europe Union, as he addressed the future of the currency block before an audience in Davos.
Soros said that Europe is mired in a "spiral of decline" that reinforces itself, adding that, as things stand, "Weaker members of the euro zone are being left as Third World countries that borrowed in foreign currencies."
George Soros Talks of Economic Collapse in the West
BY ALEX NEWMAN - TheNewAmerican.com
Billionaire investor George Soros, infamous for his lavish funding of big-government and globalist causes, dropped several bombshells during a recent interview with Newsweekincluding a bold forecast of potential Western economic collapse, massive civil unrest, and the end of what he likes to paint as the "free market." He also sees the emergence of one of the most dangerous periods in modern history, describing it as a time of "evil."
George Soros remarks at the World Economic Forum, 2012
Davos Takes Lessons From China and Latin America WEF speakers warned that as the West's crisis lingers, there is a risk that different models of capitalism, such as the form practiced in China, may win out
by Massoud Hayoun - TheAtlantic.com
A Modest Proposal to Solve Global Economic Woes: The China Model
Scrambling to boost the economy before the 2012 presidential elections, Obama has failed to explore one potential response to a recession that Davos experts are saying may last for years--a China-style economic dictatorship with free market tendencies.
China has come out of the global economic recession with a slowed growth rate, but remains relatively unscathed. Why? Beijing's one party has no heavy-handed congress through which it must pass legislation to recover the Chinese economy.
Will financial elite determine the future in Davos?
World Economic Forum in Switzerland:
Global Elites Celebrating Hypocrisy
BY BOB ADELMANN - TheNewAmerican.com
Global elites — many of the 2,500 of them billionaires — are spending a few days in Davos, Switzerland, attending the World Economic Forum (WEF), a group founded in 1971 "committed to improving the state of the world."
The state of the world doesn't appear too rosy. The recent downgrades of major economies, the clamor over perceived income inequality, the crisis in the eurozone, and other concerns are weighing heavily on the participants. Vikas Oberoi, chairman of India's second-largest real estate developer, observed, "Many who will be in Davos are the people being blamed for economic inequalities. I hope it’s not just about glamour and people having a big party." Azim Premji, chairman of India’s third-largest software company, was equally somber: "We have seen in 2011 what ignoring this aspect can result in. If we don’t take cognizance of it and try to solve this problem, it can create a chaotic upheaval globally."
IMF's Lagarde: combining ESM, EFSF would boost confidence
(Reuters) - IMF Managing Director Christine Lagarde said on Wednesday that combining the European Union's temporary EFSF rescue fund with its permanent ESM mechanism would help restore confidence in the flagging region and provide a solid firewall to the Greek crisis.
"If the two of them could make a common European pot, that would send a very strong sign of confidence in Europe," Lagarde told Europe 1 radio.
German Chancellor Angela Merkel has resisted calls to let the two funds to operate simultaneously, rather than allowing the ESM to replace the EFSF as originally planned. France is in favor of the measure.
IMF Urges ECB to Expand Its Balance Sheet to Tame Crisis
By Ian Talley - WSJ.com
The International Monetary Fund is urging the European Central Bank to expand its balance sheet as part of a multitrillion-dollar effort to tame the euro-zone debt crisis.
The IMF’s comments, made to the Group of 20 largest industrialized and developing economies, is a controversial call for stronger ECB intervention than the IMF has previously made public.
The IMF has said the ECB’s role has been essential in preventing a cascade of defaults and bank failures. It has said the central bank should continue its crisis-fighting efforts of providing cheap cash to the banking system and buying the bonds of ailing euro-zone countries to keep borrowing costs down until leadership is able to boost the size of its bailout facilities.
Marc Faber - Bloomberg Tv 22 Jan 2012
Roubini: Europe Needs 'Massive Monetary Easing'
By: Antonia Oprita - CNBC.com
Europe needs "massive monetary easing" to get out of its debt crisis, otherwise Greece will likely abandon the euro in a year and a half, famous economist Nouriel Roubini told CNBC on Wednesday.
Private creditors who lent Greece money, such as banks and investment funds, are meeting in Paris after talks on a debt swap that would change shorter maturity Greek bonds for longer maturity ones to give the country more chances to reduce its debt were inconclusive last week and earlier this week.
Greek Debt Talks to Resume in Athens
as Policy Makers Squabble on Haircut
By Nicholas Comfort and Sonia Sirletti - Bloomberg.com
Talks on a debt swap to avert a Greek default resume today as international policy makers squabble over the mounting cost of the rescue.
Charles Dallara and Jean Lemierre, negotiating on behalf of private creditors, return to Athens today after European finance ministers insisted bondholders take bigger losses on their Greek debt. TheInternational Monetary Fund further roiled the discussions by suggesting that public holders of Greek bonds might also have to increase support.
Angela Merkel defiant as IMF leads attack on Germany German Chancellor Angela Merkel has defied calls for a radical shift in strategy to lift Europe out of crisis but is increasingly isolated as the International Monetary Fund and key global bodies join ranks to force her hand.
By Ambrose Evans-Pritchard and Louise Armitstead - Telegraph.co.uk
Mrs Merkel said it was folly to think that a deep problem built up over many years could be solved "at one fell swoop" and dismissed talk of doubling or tripling of the EU bail-out fund as senseless chatter.
"I ask myself, how long would that remain credible? What we don't want is a situation where we promise something we can't back up, because if markets then attack hard, Europe's flank really will be exposed," she told the World Economic Forum in Davos.
Croatia Votes to Join EU After Pensions Threatened
BY ALEX NEWMAN - TheNewAmerican.com
After an intense pro-European Union tax-funded lobbying campaign warning of disaster, Croatians voted by an almost two-to-one margin to join the troubled EU despite a debt crisis which threatens to sink the region’s single currency and an increasingly authoritarian tone emanating from Brussels.
The nation’s political class furiously prodded voters into backing membership in the supranational regime, threatening economic doom if voters rejected the bid. Foreign Minister Vesna Pusic, for example, said voting against the EU "would be like shooting yourself in the foot."
Mixed reviews for Obama speech among Davos mighty
By Ben Hirschler and Emma Thomasson
(Reuters) - The rich and powerful were divided at their annual huddle on Wednesday over Barack Obama's threat to raise their taxes, with some saying it could hurt growth, but others arguing he was right to address capitalism's imbalances.
Obama's State of the Union address focused on channeling middle class anger at inequality, including a call for a 30 percent minimum tax on millionaires that could make the wealth of Republican rival Mitt Romney a central election issue.
Jobs Are Biggest Issue of Next Decade: Pandit, Others
By: Catherine Boyle - CNBC.com
Employment is the most important issue facing the world over the next decade, Vikram Pandit, chief executive of Citigroup, along with the other co-chairs of the World Economic Forum, told journalists in Davos Wednesday.
The world needs 600 million new jobs in the next decade to cope with a rising population and the effects of the financial crisis, according to figures released earlier this week by the International Labor Organization.
Buffett: I'll Go $1 for $1 with GOP to Pay Down Debt
By BEN BERKOWITZ and DAVID LAWDER, Reuters - TheFiscaltimes.com
Warren Buffett is willing to put his money where his mouth is, if only congressional Republicans would join him.
The American billionaire investor, in the new issue of Time magazine, says he would donate $1 to paying down the national debt for every dollar donated by a Republican in Congress. The only exception is Senate Republican leader Mitch McConnell, for whom Buffett said he would go $3-to-$1.
Obama disconnected from the state of the union?
* * * * *
Geithner: I won't serve second term
By Peter Schroeder - TheHill.com
Treasury Secretary Timothy Geithner does not anticipate serving a second term under President Obama.
Geithner said in an interview with Bloomberg Television that he is "pretty confident" the president would not ask him to stay on if he is reelected.
"I'm confident he'll be president. But I'm also confident he's going to have the privilege of having another secretary of the Treasury," he said, adding that he planned to do "something else."
Geithner: Obama Wouldn’t Ask Me to Stay in a Second Term
By Cheyenne Hopkins and Trish Regan - Bloomberg.com
Treasury Secretary Timothy F. Geithner, the last remaining member of the Obama administration’s original economic team, said he doesn’t expect the president to ask him to stay in office if re-elected.
"He’s not going to ask me to stay on, I’m pretty confident," Geithner said in an interview with Bloomberg Television today. "I’m confident he’ll be president. But I’m also confident he’s going to have the privilege of having another secretary of the Treasury."
Geithner Says Europe’s Woes Tougher to Solve Than U.S. Crisis
By Ian Katz - Bloomberg.com
U.S. Treasury Secretary Timothy F. Geithner said Europe is "making some progress" in combating a financial crisis that’s more difficult to solve than what the U.S. faced in 2008.
"If you look back over the last three months or so, they are starting to engender more confidence," Geithner told business executives today in Charlotte, North Carolina. "They’re going to get their arms around this and contain it."
Mystery Men of the Financial Crisis
By Lehman author William D. Cohan
Now that we have pulled back sufficiently far from the near "destruction of the modernfinancial system" — as the former Treasury Secretary Henry Paulson described the events of 2008 in his new memoir, "On The Brink" — to focus on how to prevent such a calamity from recurring, the time has come to hear from those players in the drama who really know what happened and why.
The State of Freedom in America - Judge Napolitano
What the State of the Union means for your wallet
By John Wasik
(Reuters) - While Americans might get a little break in their payroll taxes through the end of this year, greater financial relief for workers will be elusive. After the State of the Union speech by President Obama on Tuesday night, it's clear that the wizard will still be hiding behind the curtain.
The best evidence of this was when President Obama invoked the progressive intent of the proposed Buffett rule to tax millionaires at a minimum 30 percent rate marginal rate - about twice the effective rate that Mitt Romney, the GOP presidential candidate, has paid in recent years.
The True State of the American Union
The Real State of the Union
Bernanke: Long haul remains for recovery
By Peter Schroeder - TheHill.com
The Federal Reserve threw cold water on growing hopes that the economic recovery might be gaining momentum, indicating Wednesday that it expects the economy to take longer to get back on its feet.
The policy-setting arm of the central bank announced that it was pushing back, by a year and a half, how long it expects the economy to take before interest rates need to be increased from their near-zero levels. The Fed now expects it will keep those bottom-barrel rates until the end of 2014, up from the mid-2013 expectation of last year, as it struggles to "support a stronger economic recovery."
Is the United States in a Liquidity Trap?
Mises Daily: by Frank Shostak
....The Origin of the Liquidity-Trap Concept
In the popular framework of thinking that originates from the writings of John Maynard Keynes, economic activity is presented in terms of a circular flow of money. Thus, spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual's earnings.
Recessions, according to Keynes, are a response to the fact that consumers — for some psychological reasons — have decided to cut down on their expenditure and raise their savings.
US Federal Reserve to keep interest rates near zero until 2014 Federal Reserve Bank's pessimism indicates the economy may not fully recover from the recession for another two years
By Dominic Rushe - Guardian.co.uk
The US Federal Reserve expects to keep short-term interest rates close to zero "at least through late 2014" – longer than previously indicated – chairman Ben Bernanke said as he expressed concerns about the pace of the recovery.
The decision means the Fed fears the economy will not fully recover from the recession that started in 2008 for at least another two years. "I don't think we're ready to declare that we've entered a new, stronger phase at this point. We'll continue to look at the data," Bernanke said at a press conference.
GOP prepares bill to replace
Obama's Supreme Court-bound healthcare law
By Sam Baker - TheHill.com
House Republicans will be ready with a plan to replace President Obama’s healthcare law once the Supreme Court determines the law’s fate this summer, Rep. Joe Pitts (R-Pa.) told reporters Wednesday.
Republicans have made good on their promise to try to repeal Obama’s healthcare law, but the "replace" part of their "repeal and replace" strategy has proved more difficult. Pitts said Republicans will be ready for the opening a Supreme Court ruling will provide — no matter what the justices decide.
Bird-Flu Virus Engineered in Wisconsin Lab
Isn’t Fatal, Scientist Says
By Molly Peterson - Bloomberg.com
An airborne strain of avian flu engineered in Wisconsin isn’t lethal and can be blocked with existing medicines, the study’s lead scientist said.
While the mutated virus was contagious among laboratory ferrets, it didn’t kill any of them, said Yoshihiro Kawaoka, a professor of virology at the University of Wisconsin at Madison. There’s an urgent need for more research on transmissible bird- flu strains, Kawaoka said in a commentary published online today in the Journal Nature.
Boeing faced with strong headwinds Repeating stellar year will be tall task
By Tim Devaney-The Washington Times
Aerospace giant Boeing announced Wednesday it had posted its best year ever in 2011, but it faces a tough time repeating the performance in 2012.
The Chicago-based plane-maker announced a 20 percent increase in earnings and record revenue gains in 2011. Earnings per share improved to $5.34, up from $4.45 the previous year. Revenue from deliveries hit a record high of $68.7 billion, up from $64.3 billion in 2010 and $68.3 billion in 2009. The company also increased its backlog of future sales.
Boeing Financing May Get Government Boost Before Costs Rise
By Andrea Rothman - Bloomberg.com
Boeing Co. (BA) commercial aircraft financing may get more government backing in 2012 than last year as airlines rush to take advantage of funding costs that will rise in 2013, a senior executive said.
Kostya Zolotusky, managing director for leasing and capital markets at the Chicago-based company’s Boeing Capital Corp., said revised rules on the cost of getting loans backed by U.S. guarantees will go into effect in 2013, after the 2011 renegotiation of the Organization for Economic Cooperation and Development’s agreement on export credits for civil aircraft.
Indiana House Approves ‘Right to Work’ Measure
AP - NYTimes.com
INDIANAPOLIS (AP) — Indiana is poised to become the first right-to-work state in more than a decade after the Republican-controlled House passed legislation on Wednesday banning from collecting mandatory fees from workers.
It is yet another blow to organized labor in the heavily unionized Midwest, which is home to many of the country's manufacturing jobs. Wisconsin last year stripped public sector unions of collective bargaining rights.
Watchdog requests documents from Gingrich ethics probe
By Alicia M. Cohn - TheHill.com
Citizens for Responsibility and Ethics in Washington (CREW) filed requests on Wednesday seeking access to documents uncovered in an ethics investigation into former House Speaker Newt Gingrich that took place in the 1990s.
The group filed Freedom of Information Act (FOIA) requests with the Internal Revenue Service and the Department of Justice requesting access to any documents provided between 1996 and 1997 by the House Ethics Committee relating to the investigation.
Business giants take note of EU internet rights bill
BY NIKOLAJ NIELSEN - EUObserver.com
BRUSSELS - The EU commission has unveiled a single EU-wide law on internet privacy that could see overseas firms hit with multi-million-euro fines.
EU justice commissioner Viviane Reding told press at the launch event in Brussels on Wednesday (25 January) that "personal data is the currency of the digital market and it must be stable and trustworthy." She also called data protection "a fundamental right for all Europeans."
The draft regulation updates an old law from 1995 and comes at a time when 250 million EU citizens log on every day.
Newt Threatens China and Russia With Cyberwar
By Noah Shachtman - Wired.com
Newt Gingrich isn’t the only politician who’s freaked out by China and Russia’s online spying. But the new Republican presidential frontrunner may be the highest-profile political figure all but openly calling for cyberwar with Moscow and Beijing.
"I think that we have to treat state-based covert activities as the equivalent of acts of war," Gingrich said in response to a question about countries that target U.S. corporate and government information systems. "And I think that we have to respond to that and create a level of pain which teaches people not to do it."
America's New Strategy: Endless War(s)
By Robert Wright - TheAtlantic.com
Quick: How many countries was America at war with last year?
If you accept the old fashioned notion that to drop a bomb on a country is to be at war with it, the answer is, oh, half a dozen or so. As Peter W. Singer points out in a New York Times opinion piece, since the beginning of last year we've conducted drone strikes in six countries: Afghanistan, Pakistan, Iraq, Yemen, Somalia... and... and... well, Singer doesn't list them, so I'm not sure what the sixth one is.
EU sanctions on Iran peppered with exemptions
BY ANDREW RETTMAN - EUObserver.com
BRUSSELS - New sanctions on Iran could prove hard to enforce after EU countries peppered them with derogations to help Greece find alternate suppliers, to protect trade in non-oil sectors and to give Tehran-based embassies access to cash.
Details of the measures - designed to stop an alleged nuclear weapons programme - came out in the bloc's Official Journal on Tuesday (24 January).
The sanctions ban buying or shipping of crude oil, petrol and petro-chemical products, as well as supply of financial services, insurance, equipment and training for Iranian energy companies or the buying of new shares in energy firms.
How the U.S. and Iran
Keep Failing To Find a Peace They Both Want A grand bargain would serve everyone, which is why both countries have tried to put aside tensions and strike a deal. So why are the U.S. and Iran perpetually stuck in confrontation?
By Trita Parsi - TheAtlantic.com
The 30-year-old U.S.-Iran enmity is no longer a phenomenon; it is an institution. For three decades, politicians and bureaucrats in both countries have made careers out of demonizing each other. Firebrands in Iran have won political points by adding an ideological dimension to an already rooted animosity. Shrewd politicians, in turn, have shamelessly used ideology to advance their political objectives. Neighboring states in the Persian Gulf and beyond have taken advantage of this estrangement, often kindling the flames of division.
War Abroad; Austerity at Home
by PAUL CRAIG ROBERTS - CounterPunch.com
The US government is so full of self-righteousness that it has become a caricature of hypocrisy. Leon Panetta, a former congressman who Obama appointed CIA director and now head of the Pentagon, just told the sailors on the USS Enterprise, an aircraft carrier, that the US is maintaining a fleet of 11 aircraft carriers in order to project sea power against Iran and to convince Iran that "it’s better for them to try to deal with us through diplomacy."
If it requires 11 aircraft carriers to deal with Iran, how many will Panetta need to project power against Russia and China? But to get on with the main point, Iran has been trying "to deal with us through diplomacy." The response from Washington has been belligerent threats of military attack, unfounded and irresponsible accusations that Iran is making a nuclear weapon, sanctions and an oil embargo. Washington’s accusations echo Israel’s and are contradicted by Washington’s own intelligence agencies and the International Atomic Energy Agency. Why doesn’t Washington respond to Iran in a civilized manner with diplomacy? Really, which of the two countries is the greatest threat to peace?
U.S. eyes expanded military role in Philippines Philippines may allow
greater U.S. military presence in reaction to China’s rise
By Craig Whitlock - WashongtonPost.com
Two decades after evicting U.S. forces from their biggest base in the Pacific, the Philippines is in talks with the Obama administration about expanding the American military presence in the island nation, the latest in a series of strategic moves aimed at China.
Although negotiations are in the early stages, officials from both governments said they are favorably inclined toward a deal. They are scheduled to intensify the discussions Thursday and Friday in Washington before higher-level meetings in March. If an arrangement is reached, it would follow other recent agreements to base thousands of U.S. Marines in northern Australia and to station Navy warships in Singapore.
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