Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.

Tuesday 01.31.2012

The Upcoming Hyper-inflationary Great Depression
By David Schectman - SilverBearCafe.clom
On Friday morning I had a long conversation with my friend, Jim Cook. I went to work for Jim in 1983 at Investment Rarities and we quickly developed a friendship apart from work. Jim is a well-learned man, a true Libertarian and a student of Ludwig von Mises. During our conversation, for the first time ever, he told me that he was afraid things had gone beyond the point where they could be fixed, beyond the point of no return.
I have maintained for the last year that the problems could no longer be fixed, that it was a mathematical certainty that were on the path toward the destruction of the dollar and the most likely course of events would be a hyper-inflationary Great Depression.

What Made Gold Break Out?
By: Julian D. W. Phillips - GoldSeek.com
Last week, gold broke through heavy overhead resistance, as did silver, to look very positive for the days ahead. Many technical analysts didn’t feel that gold had that kind of momentum but then came the break. It wasn’t a struggling break; it was robust sweeping resistance aside as though it wasn’t even there.
You’re probably saying now that it was the announcement from the Fed that interest rates would be held at current levels for another year more, through to the end of 2014. The superficial assumption is that this means that the dollar will earn nothing, so risk assets should outperform dollar deposits. That’s true, but a great deal more was implied in their statement (as we detailed in the latest issues of the Gold Forecaster & Silver Forecaster). The Fed pointed to long rates rising to above 4% over time, while inflation remained at 2% –and could fall further. Why?

Gold Is The Hottest Currency In The World
By Robert Lenzner, Forbes Staff
The price of gold is roaring back from its latest temporary correction, sending the bears into full withdrawal. If you sold your gold in December as it fell to $1525 an ounce, you’re probably feeling foolish at the incredible $210 rise to $1735– a 15% move in no time at all.
Gold, you see, is not a commodity like oil and copper and wheat. It is rather an alternative currency– one that finds buyers when paper currencies like the Euro are being hugely increased in supply by the ECB to forestall a sovereign cum bank crisis in Europe. There’s $650 billion in European bank and sovereign debt coming die before March 31, 2012 which can be sopped up by the $650 billion gift from ECB to the banks at the bargain rate of 1%. And more available from the European central bank– Europe’s very own Quantitative Easing program.

Silver and Gold will win the currency wars
By Greg Canavan
On Wednesday, Federal Reserve boss Ben Bernanke promised speculators he would keep interest rates low until 2014:
'To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.'

Behold the central banks gold holding
By Adrian Ash - CommodityOnline.com
Yes, central banks are holding more gold. But they're holding very much more wood-pulp on top.
The Gold price on Wednesday broke up through the downtrend starting at last summer's record high. Or so a technical analyst studying the price chart would tell you.
But just as in late 2007 - from where gold began a 55% run inside 6 months - this week the price of gold bullion jumped on news that is fundamental: the price of money, specifically Dollars, the world's #1 currency for trade and central-bank reserves.

Failed Fed Policies Prolong the Agony
By: Dr. Ron Paul, U.S. Congressman - GoldSeek.com
The Federal Reserve's interest rate price-setting board, the FOMC, met last week. They will continue to set the federal funds rate at well below 1%, and plan to keep it low until the end of 2014. That's a year and half longer than they planned when they met just last month. Chairman Bernanke says they are keeping interest rates so low for so long because the economic outlook warrants it.

Silver looks more bullish than gold in near term: Deutsche Bank
LONDON (Commodity Online): Silver prices could outperform Gold in the near-term but in longer-term the persistence of negative real interest rates will sustain the appeal of holding precious metals, said Deutsche Bank in a research note. Fed announcement resulted in a strong positive move in the silver price.
According to Deutsche Bank, precious metals advanced as the Fed statement led to a weak USD against the Euro. Bank believes that renewed USD weakness could be exacerbated near-term by an unwinding of Euro-short positions and this, in addition to a moderation in deflationary or growth fears, could underpin a further rise in gold prices.

The Coming Paradigm Shift in Silver
By Steve St. Angelo - SilverSeek.com
The biggest problem for investors today in trying to forecast the future price of silver is the enormous amount of contradictory analysis on the Internet. There are bulls, bears, paper traders, physical buyers, technical analysts, hedge funds, commercial banks and silver manufacturers all trying to play a part in this highly volatile silver market. Trying to sift through the huge volumes of silver analysis on the internet can be extremely frustrating. In addition, some of this information is not meant to inform, but rather to confuse or mislead the investor.

European Bailout Infographic: Presenting The Truckloads Of Cash Needed To Rescue The Insolvent PIIGS
Submitted by Tyler Durden - ZeroHedge.com
...No, literally truckloads. Our friends at demonocracy.info have been kind enough to put together an infographic that explains the European bailout in simple, visual terms, that even the most innocent of FTL truckers can grasp without much exertion, for the simple reason that it shows all the bailouts amounts in terms of trucks of cash. And here is the kicker: one would need a 13 lane highway, filled with trucks bumper to bumper, stretching for about 3 kilometers to represent the €2.91 trillion in total amounts owed by the PIIGS and their citizens (whether voluntarily or not... actually make that involuntarily) to Europe's largest banks.

EU leaders agree on permanent bailout fund
Jan 30 (Reuters) - EU leaders reached agreement at a summit on Monday on the introduction of a permanent euro zone bailout mechanism from July 2012, with a treaty governing the fund to be signed at a later date, three EU officials told Reuters.
The European Stability Mechanism, which will have a lending capacity of 500 billion euros, will take over from the European Financial Stability Facility, a temporary mechanism that has so far been used to bail outIreland and Portugal.

European Leaders Agree to New Budget Discipline Measures
By STEPHEN CASTLE and JAMES KANTER - NYTimes.com
BRUSSELS — All but two European Union countries agreed Monday to new and tougher measures to enforce budget discipline in the euro zone, but the bloc still showed few signs of producing a comprehensive solution for the sovereign debt crisis or a credible plan to revive fragile economies across Europe’s weakened Mediterranean tier.
The meeting of 27 European Union heads of state and government here in Brussels was aimed at completing the text of a so-called fiscal compact for the 17 nations relying on or intending to join the euro zone — with only Britain and the Czech Republic opting not to adopt the measures.

Most EU nations to sign treaty to stop overspending
Pledge to boost growth, employment
By Sarah DiLorenzo
and Gabriele Steinhauser - AP - WashingtonTimes.com
BRUSSELS — All European Union countries except Britain and the Czech Republic agreed Monday to sign a new treaty designed to stop overspending in the eurozone and put an end to the bloc’s crippling debt crisis, while EU leaders also pledged to stimulate growth and employment.
The new treaty, known as the fiscal compact, was agreed on at a summit of European leaders in Brussels on Monday. It includes strict debt brakes and makes it more difficult for deficit sinners to escape sanctions. The 17 countries in the eurozone hope the tighter rules will restore confidence in their joint currency and convince investors that all of them will get their debts under control.

Portuguese storm gathers as EU leaders fight over Greece
Surging borrowing costs in Portugal have raised the spectre of a second full-fledged contagion crisis in the eurozone, eclipsing the latest efforts by European Union leaders in Brussels to agree on Europe's bail-out machinery and a strategy for Greece.
By Ambrose Evans-Pritchard - Telegraph.co.uk
Yields on Portuguese 10-year bonds hit a fresh record of 17.38pc on Monday even though the country is already shielded by a €78bn (£65.2bn) package from the EU, European Central Bank (ECB) and International Monetary Fund "troika" and does not have to tap the markets this year.
Reports also emerged on Monday night that European banks were gearing up to ask the ECB's emergency funding scheme for up to twice as much in funds as the central bank supplied in its debut €489bn auction last month.

Banks Tightening Credit to Europe: Fed
By Pedro da Costa - FOXNews.com
More than two thirds of banks in a Federal Reserve survey of senior loan officers said they had tightened credit to European financial firms in January, underscoring the continent's severe banking crisis.
The survey, published on Monday, also found U.S. banks snapping up business from their beleaguered European competitors, countering the notion that new regulations are hurting Wall Street's competitiveness.
"About half of the respondents who reported competing with European banks noted such an increase in business," The Fed said.

BBC Source - Merkel: "Greece Will Default"
BY CHRIS CIOVACCO - FinancialSense.com
As we outlined in the past, the levels of debt in Europe relative to tax revenues and capital needs for insolvent banks produce an unsustainable situation. Any additional funds given to Greece will most likely have similar outcomes to a flush of a toilet in the coming months. According to Bloomberg (01/28/2012), the Germans seem to agree:
Lawmakers from German Chancellor Angela Merkel’s coalition rejected increasing aid for Greece, Der Spiegel said, citing members of the parliament in Berlin. There can be no further aid if Greece doesn’t implement the agreed adjustment programs, the magazine said, citing Horst Seehofer, chairman of the Christian Social Union, the Bavarian sister party of Merkel’s Christian Democratic Union.

Angry Over Austerity Measures, Belgian Workers Go On Strike
By STEPHEN CASTLE - NYTimes.com
BRUSSELS — Belgium was paralyzed by a national strike Monday as unions, angry over austerity measures, timed the protest to coincide with a one-day meeting of European Union leaders here in the capital.
The rail network was shut down and flights were severely disrupted, with the airport at Charleroi, a hub for the low-cost carrier Ryanair, closed by the first general strike in Belgium since 1993.
Tram, bus and metro services in Brussels were suspended, transportation officials said. High-speed international trains, like the Eurostar from London and Thalys from Paris, were among those canceled.

This Is Europe's Scariest Chart
Submitted by Tyler Durden - ZeroHedge.com
Surging Greek and Portuguese bond yields? Plunging Italian bank stocks? The projected GDP of the Eurozone? In the grand scheme of things, while certainly disturbing, none of these data points actually tell us much about the secular shift within European society, and certainly are nothing that couldn't be fixed if the ECB were to gamble with hyperinflation and print an inordinate amount of fiat units diluting the capital base even further. No: the one chart that truly captures the latent fear behind the scenes in Europe is that showing youth unemployment in the continent's troubled countries (and frankly everywhere else). Because the last thing Europe needs is a discontented, disenfranchised, and devoid of hope youth roving the streets with nothing to do, easily susceptible to extremist and xenophobic tendencies: after all, it must be "someone's" fault that there are no job opportunities for anyone. Below we present the youth (16-24) unemployment in three select European countries (and the general Eurozone as a reference point). Some may be surprised to learn that while Portugal, and Greece, are quite bad, at 30.7% and 46.6% respectively, it is Spain where the youth unemployment pain is most acute: at 51.4%, more than half of the youth eligible for work does not have a job! Because the real question is if there is no hope for tomorrow, what is the opportunity cost of doing something stupid and quite irrational today?

20 Signs That Europe Is Plunging
Into A Full-Blown Economic Depression
EndOfTheAmericanDream.com
An economic nightmare is descending on Europe. With each passing month, the economic numbers across Europe get even worse. At this point it is becoming extremely difficult for anyone to deny that Europe is plunging into a full-blown economic depression. In fact, some parts of Europe are already there. In Spain the overall unemployment rate is over 22 percent, and in Greece one out of every five retail establishments has already been closed down. All over Europe, economic activity is rapidly slowing down, unemployment is skyrocketing and bad debts are unraveling. It isn't even going to take a default by a nation such as Greece or a collapse of the euro to push Europe into an economic depression. All Europe has to do is to stay on the exact path that it is on right now and it will get there. Normally, European governments would respond to an economic slowdown by increasing government spending. But this time most of them are already drowning in debt. Instead of increasing government spending, most governments in Europe are actually cutting back. All over Europe, national governments are being encouraged to implement even more tax increases and even more budget cuts. The hope is that all of this austerity will help solve the nightmarish sovereign debt crisis that Europe is facing. But unfortunately, all of these tax increases and budget cuts are also going to involve a tremendous amount of economic pain.

Davos 2012: Now it's the West's turn
to listen to wise words from the East
With his immaculately tailored suits and signature dicky bow, Donald Tsang, chief executive of Hong Kong, makes an unlikely prophet.
By Jeremy Warner - Telegraph.co.uk
But here in Davos, he's been talking more sense on the eurozone debt crisis than the entire massed ranks of Europe's policymaking elite put together.
So much so that I only half in jest propose that he swaps his job in Hong Kong to become head of the eurozone until the crisis is finally over.
Back in the 1990s, when Asia was enveloped by its own financial crisis, Asian leaders were plied with Western advice on the importance of swift and decisive action. The region acted accordingly and is now booming, with abundant reserves, strong growth, a robust banking system and, in Hong Kong at least, virtually non-existent unemployment.

Is the West finished? Perhaps not quite
For me, the defining image from Davos this year was the sight of Christine Lagarde, managing director of the International Monetary Fund, holding up an expensive-looking, designer leather holdall and saying: "I am here with my little bag to collect a bit of money."
By Jeremy Warner - Telegraph.co.uk
Nothing could be more representative of the shift from a West paralysed by debt and indecision to a fast-growing East than this faintly ridiculous piece of theatre, for what she was indeed doing at the World Economic Forum in Davos last week was trying to persuade the still comparatively poor developing world to contribute more to the IMF so it can bail out the relatively rich eurozone.

Fed's Plosser wanted more optimistic outlook
By Jonathan Spicer
(Reuters) - A top Federal Reserve official on Monday said he would have preferred a more optimistic statement on the U.S. economy, after the central bank last week painted a grim picture of the recovery and forecast ultra-low interest rates until late 2014.
"I thought it was a little bit pessimistic. I would have preferred a little more optimism in the outlook," Philadelphia Fed President Charles Plosser said on CNBC.
"It's not that we're going to take off like a sky rocket going into this year, but I do think things are looking better," he said, citing a drop in the unemployment rate to 8.5 percent, which is still historically high.

If The Economy Is Improving….
TheEconomicCollapseBlog.com
Everywhere you turn these days, someone is proclaiming that the economy is improving. Barack Obama is endlessly touting the "improvement" in the economy, the mainstream media is constantly talking about "the economic recovery" and an increasing number of Americans seem to be buying into this line of thinking. A new NBC/Wall Street Journal poll found that 37 percent of Americans believe that the economy will improve over the next year, while only 17 percent of Americans believe that it will get worse. But is the economy actually improving? Not really. At the moment things are relatively stable. Some economic statistics are improving slightly and some continue to get even worse. However, it is very important to keep in mind that one of the biggest reasons why things have stabilized is because the federal government is pumping more than a trillion dollars a year into the economy that it does not have.

Congress to subject itself to harsher penalties on insider trading
Congress expected to pass bill that would impose restrictions on the use of nonpublic information for personal benefit
AP - Guardian.co.uk
Congress hope to regain some sense of trust by policing itself with tougher penalties for insider trading and requiring they disclose stock transactions within 30 days.
A procedural vote Monday would allow the Senate later this week to pass a bill prohibiting members of Congress from using nonpublic information for their own personal benefit or "tipping" others to inside information that they could trade on.

MF Global: Money on Foreign Exchanges Remains Frozen
By Aaron Lucchetti - WSJ.com
While many MF Global customers grapple with the harsh reality that they may never get all their money back, there are some who are even worse off.
The bankruptcy trustee of MF Global’s U.S. brokerage unit has returned about 72% of the money in customer’s U.S. accounts when the New York firm filed for bankruptcy at the end of October.
By contrast, all the money of U.S. customers invested on foreign exchanges remains frozen.

MF Global: A Despicable State of Affairs
JESSE'S CAFÉ AMÉRICAIN
Much of the financial press picked up this story from the Wall Street Journal, Money From MF Global Feared Gone. Much of the mainstream media in the US and the UK these days is just a conduit for sound bites from the monied interests.
"Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.

CBO says federal employees rake in much more pay
Comparison with private sector likely to heat up debate over ending freeze
By Stephen Dinan-The Washington Times
Buoyed by generous benefit packages, federal workers earn significantly better compensation than similarly educated workers in the private sector, according to a report released Monday from Congress‘ chief scorekeeper that threatens to reignite at the national level last year’s state battles over public-employee rights.
Overall, federal workers earn 16 percent more in total compensation — including wages and benefits — than comparable private-sector employees, according to the Congressional Budget Office. Only private-sector workers with the highest levels of education, such as doctors and lawyers, earn more than their public counterparts.

Are Most Federal Workers Overpaid? CBO Says Yes
By Jordan Weissmann - TheAtlantic.com
The less educated you are, the better it is to work for the federal government -- at least when it comes to your paycheck.
That's more or less the finding of a new study by the Congressional Budget Office, which compared federal workforce compensation to the private sector using data from 2005 through 2010. The big headline figures, sure to make the rounds in conservative media, are that government employees made 2% more in wages, and 16% more in overall compensation, than their private sector counterparts. But as the graph below shows, there were vast variations between education levels.

Waist Deep in the Big Muddy
By Peter Schiff - 321Gold.com
With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow. The signposts are easily understood: the Fed will stop at nothing in pursuing its goals of creating phantom GDP growth, holding down unemployment, propping up stock and housing prices, and monetizing government debt. To do so, it will continue to pursue a policy of negative interest rates, while ignoring the collateral damage of unsustainable debt, virulent inflation, misallocated resources and credit, suffering yield-dependent retirees, and a devalued U.S. currency.

U.S. consumers fizzle out even as incomes rise
By Lucia Mutikani
(Reuters) - U.S. consumer spending was flat in December as households put the largest rise in income in nine months into their savings, potentially signaling slower consumption early in 2012.
It was the weakest reading on spending since June, the Commerce Department said on Monday, and it followed two tepid gains in October and November.
Still, economists were cautiously optimistic that rising wages as labor markets improve will keep demand supported.

Making Money On Poverty: JP Morgan Makes Bigger Profits When The Number Of Americans On Food Stamps Goes Up
TheEconomicCollapseBlog.com
How would you feel if someone told you that one of the largest banks on Wall Street makes more money whenever the number of Americans on food stamps goes up? Unfortunately, this is something that is actually true. In the United States today, one out of every seven Americans is on food stamps. In fact, the number of Americans on food stamps has increased by a whopping 14 million since Barack Obama entered the White House. All of this makes JP Morgan very happy, because JP Morgan has been making money by the boatload on food stamps. Right now, JP Morgan Chase issues food stamp debit cards in 26 U.S. states and the District of Columbia. The division of JP Morgan Chase that issues these debit cards made an eye-popping 5.47 billion dollars in net revenue during 2010. JP Morgan is paid per customer, so when the number of Americans on food stamps goes up, they make more money. But doesn't this give JP Morgan an incentive to try to keep the number of Americans on food stamps as high as possible? Of course it does. JP Morgan is interested in making money as rapidly as possible. If JP Morgan can get more Americans enrolled in the food stamp program and keep them enrolled in it for as long as possible, that is good for business.

Florida's housing crisis:
'There's not a politician out there willing to help'
Years after the housing bubble burst, residents in the Sunshine State continue to face the heartbreak of home foreclosure
By Karen McVeigh - Guardian.co.uk
At the county court in downtown Miami, a stooped, elderly man smartly dressed in a light suit jacket, stands in front of the judge's bench as he tries to cancel the imminent sale of his house.
"I spoke to the bank, they gave me papers" he said.
"You'll have to file notice and notice on the day is not enough," the judge replies. "I wish there was some way I could help, I'm sorry."
Asked later what will happen, the man shrugs. "I've lost the apartment. Which I gave $85,000 in cash for."

Freddie Mac’s Crimes Against Homeowners
are NOT an Isolated Incident
By Martin Andelman - ML-Implode
ProPublica is reporting that Freddie Mac has been placing “multi-billion dollar bets designed to only pay off when homeowners remain “trapped” in high interest rate loans, and that the government-owned mortgage monster began increasing such bets late in 2010, which they say is, "the same time Freddie was making harder for homeowners to get out of high-interest mortgages."
Now, the ProPublica story goes on to say…

"No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are “walled off” from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules."

Outrageous! The Government Is Giving Out Free Cell Phones And Free Cell Phone Minutes To Welfare Recipients
TheEconomicCollapseBlog.com
Did you know that the federal government is giving out free cell phones and free cell phone minutes to welfare recipients? It may be hard to believe, but it is true. Right now, there are companies that are running advertisements specifically targeted at low income Americans informing them of the fact that all they have to do is sign up and they can get a free cell phone and hundreds of free cell phone minutes every single month and it will all be paid for by the federal government. Some have referred to this as "The Obama Phone", but that is not exactly accurate. The outrageous federal programs that are paying for this were initiated before Barack Obama entered the White House. But the fact that welfare recipients have been receiving free cell phones and free cell phone minutes under both the Bush and Obama administrations has been confirmed as being true by Snopes. All of this is paid for by "the federal Universal Service Fund". That is one of those annoying little taxes that you may have noticed on your phone bill. So what is essentially happening is the federal government is taking money from all of us so that they can provide free cell phone service for welfare recipients every single month.

FCC to reform telephone subsidies,
could eliminate Link Up to fight corruption
By Tim Devaney-The Washington Times
The Federal Communications Commission is considering big changes in two telephone subsidy programs for low-income customers that would combat corruption and make room for a new broadband Internet subsidy.
The FCC could eliminate Link Up, a one-time $30 credit that covers the cost of the installation fee for landlines or activation fee for cellphones, Commissioner Robert McDowell, the group’s lone Republican, told The Washington Times. Thecommission is also looking to weed out fraudulent customers from its sister program, Lifeline, which provides a $10 monthly credit to subsidize phone service.

Ill. nuclear reactor loses power, venting steam
BYRON, Ill. (AP) -- A nuclear reactor at a northern Illinois plant shut down Monday after losing power, and steam was being vented to reduce pressure, according to officials from Exelon Nuclear and federal regulators.
Unit 2 at Byron Generating Station, about 95 miles northwest of Chicago, shut down at 10:18 a.m., after losing power, Exelon officials said. Diesel generators began supplying power to the plant, and operators began releasing steam to cool the reactor from the part of the plant where turbines are producing electricity, not from within the nuclear reactor itself, officials said.

BIG BROTHER INTERNET
By Paul Craig Roberts - PaulCraigRoberts.org
Dear friends: I am pleased to bring to you Gerald Celente’s assessment of the threats posed to Internet freedom. Celente’s Trends Journal is one of the most insightful publications of our era. PCR
Do you remember the Safe-Cyber instructions they taught you in the mandatory Computer Ed class (operated by the National Institute of Standards and Technology)? First you fire up your Secured Computing Device (SCD) and its hardware token authenticator.
Then you enter the six-digit algorithmically generated password displayed (a new one flashes every 60 seconds) and are asked to supply your biometric identifier. You place your thumb on the built-in fingerprint pad, click, and wait for the Internet connection to begin. But it doesn’t.

Quietly, U.S. Moves to Block Lawsuits by Military Families
Why is the Justice Department trying to make it more difficult for service members and their families to sue the government for medical malpractice?
By Andrew Cohen - TheAtlantic.com
Politicians and bureaucrats of all persuasions typically trip over themselves when it comes to praising the values and virtues, the courage and the sacrifice, of America's military families. East Coast. West Coast. Red State. Blue State. Democrats. Republicans. It doesn't matter. Everyone wants to stand up in public and say that brave and stoic military families should get the best that America can offer (cue the applause). Take the First Lady herself, Michelle Obama, who has worked consistently with and for these families since 2009.

Regarding Social Programs and Government Outlays:
The Money Simply Isn't There
By Graham Summers - GoldSeek.com
The coming years will be marked by a seismic change in the economic landscape in the US. Firstly and most importantly, we are going to see economic growth slow down dramatically. Jeremy Grantham, an asset manager I respect, believes we’ll see global growth at 2% over the next seven years. Personally I believe it could be even lower than that.
The reasons for this slow down are myriad but the most important are:

1) Age demographics: a growing percentage of the population will be retiring while fewer younger people are entering the workforce.
2) Excessive debt overhang.
3) A return to more frugal "common sense" spending patterns in the developed world.
4) Political and Geopolitical uncertainty.

What You Need to Know Before Investing in Facebook
Posted by Gerri Willis - FOXBusiness.com
The social networking site, Facebook, goes public this week in what could be the biggest ever IPO, and a lot of people are going to get rich.
But while insiders and friends of bankers will make a mint, individual investors, well, forget about it.
In fact, I believe the IPO market is stacked against regular investors.
IPOs are exhibit number one when we talk about an uneven playing field for individual investors in today's equities markets.

In Victory for the West,
W.T.O. Orders China to Stop Export Taxes on Minerals
By KEITH BRADSHER - NYTimes.com
HONG KONG — The appeals panel of the World Trade Organizationruled on Monday that China must dismantle its system of export taxes and quotas for nine widely used industrial materials.
The legal setback for Beijing could set a precedent for the West to challenge China’s export restrictions on other natural resources, including rare earthmetals that are crucial to many modern technologies, trade experts said.

U.S. Drones Patrolling Its Skies Provoke Outrage in Iraq
By ERIC SCHMITT and MICHAEL S. SCHMIDT - NYTimes.com
BAGHDAD — A month after the last American troops left Iraq, the State Department is operating a small fleet of surveillance drones here to help protect the United States Embassy and consulates, as well as American personnel. Some senior Iraqi officials expressed outrage at the program, saying the unarmed aircraft are an affront to Iraqi sovereignty.
The program was described by the department’s diplomatic security branch in a little-noticed section of its most recent annual report and outlined in broad terms in a two-page online prospectus for companies that might bid on a contract to manage the program. It foreshadows a possible expansion of unmanned drone operations into the diplomatic arm of the American government; until now they have been mainly the province of the Pentagon and the Central Intelligence Agency.

Americans barred from leaving Egypt
seek refuge at US embassy in Cairo
Three US citizens move into embassy as tensions mount over Egyptian crackdown on pro-democracy and human rights groups
By Ben Quinn and agencies - Guardain.co.uk
Three Americans barred by Egyptian authorities from leaving the country have sought refuge at the United States embassy in Cairo. Tensions between the two states have escalated following unprecedented raids by security forces on a number of human rights and pro-democracy organisations working in Egypt.
Organisations targeted during the December raids included the US-government funded National Democratic Institute (NDI) – founded by former secretary of state Madeleine Albright – and the International Republican Institute (IRI), whose chairman is Republican senator John McCain.

Clinton to attend U.N. meeting on Syria
By Karen DeYoung - WashingtonPost.com
Secretary of State Hillary Rodham Clinton condemned “in the strongest possible terms” the escalation of Syrian government attacks on opposition protesters and said she would voice American concerns at a U.N. Security Council meeting on the subject Tuesday.
The intensified diplomacy came amid ongoing fighting between government and opposition forces on the outskirts of Damascus. In skirmishes throughout Monday, forces loyal to President Bashar al-Assad appeared to have pushed back rebel soldiers fighting for the Free Syrian Army from districts on the eastern edge of the capital.

Fighting Escalates in Syria as Opposition Rejects Russian Plan
By NEIL MacFARQUHAR and KAREEM FAHIM - NYTimes.com
UNITED NATIONS — As Syrian forces continued to fight rebel forces on the doorstep of Damascus on Monday, some of the world’s top diplomats converged on the United Nations to try to press President Bashar al-Assad to leave office through a Security Council resolution.
Much of the attention was focused onRussia, which strongly opposes an Arab League proposal, backed by Western and Arab diplomats, that calls for Mr. Assad to cede power as part of a transition to democracy.

Support grows for Syrian peace plan
UK, US and France to push Security Council to back Arab proposal
By James Blitz and Roula Khalaf in London,
and Charles Clover in Moscow - FT.com
Britain, France and the US will be making their most forceful push yet for a political transition in Syria at the UN Security Council this week, lending support to an Arab plan that they hope will overcome Russian opposition.
As Syrian forces move to assert their control over Damascus suburbs that have fallen into the hands of the opposition in the more than 10-month uprising, the foreign ministers of France, the UK and the US will be in New York on Tuesday to listen to a briefing from senior Arab officials.

Navy wants commando ‘mothership’ in Middle East
By Craig Whitlock - WashingtonPost.com
The Pentagon is rushing to send a large floating base for commando teams to the Middle East as tensions rise with Iran, al-Qaeda in Yemen and Somali pirates, among other threats.
In response to requests from U.S. Central Command, which oversees military operations in the Middle East, the Navy is converting an aging warship it had planned to decommission into a makeshift staging base for the commandos. Unofficially dubbed a “mothership,” the floating base could accommodate smaller high-speed boats and helicopters commonly used by Navy SEALs, procurement documents show.

* * * * *

State of Denial in Coming War Catastrophe
By Greg Hunter’s USAWatchdog.com
The world economy is in the tank, and the Federal Reserve’s decision to extend its zero interest rate policy to, at least, the end of 2014 proves it. What will happen if the fragile world economy also has to deal with a war with Iran? That should have been the big headline coming out of the World Economic Forum in Davos, Switzerland, but what was reported was concern over slow or no growth in the world. All the signs are that the West is careening towards war with Iran, and there is not a peep about it from world leaders. Are they in a state of denial in a coming war catastrophe? I say yes.
One of the first shots fired by the EU was in the form of increased sanctions to boycott Iranian oil in about five months. The second shot looks like it will be fired by the Iranians who won’t wait for sanctions to kick in and will move to cut off oil exports of around 600,000 barrels a day to the Eurozone. (Click here for more on this story.) The Iranians have not yet cut off the oil. MSNBC reported yesterday, "The Islamic Republic declared itself optimistic about a visit by U.N. nuclear experts that began on Sunday but also warned the inspectors to be "professional" or see Tehran reducing cooperation with the world body on atomic matters. The International Atomic Energy Agency (IAEA) inspection delegation will seek to advance efforts to resolve a row about nuclear work which Iran says is for making electricity but the West suspects is aimed at seeking a nuclear weapon."

Imagining a "Clean Break" with Israel…Over Iran
by GARY LEUPP - CounterPunch.com
The world of science acknowledges matter-of-factly that Iran is not pursuing a nuclear weapons program. There is simply no evidence for one. The UN’s International Atomic Energy Agency, staffed by specialists on nuclear power and maintaining a tight watch on Iran’s civilian facilities, finds no evidence of a military program. Two successive reports (National Intelligence Estimates) produced in 2007 and 2010 by all 16 U.S. intelligence agencies have declared with confidence that there is no operative weapons program. U.S. Defense Secretary Leon Panetta and even Israel’s Defense Minister Ehud Barak have both recently stated or let it slip that Iran is not currently attempting to build nuclear weapons.

The Onus is on Washington, as Usual
Fingers Itch for a War on Iran
by VIJAY PRASHAD - CounterPunch.com
If you ask Iranians, they will tell you that the war against Iran has already begun. Some will take you back to 1953, when the US fired its first shot across the bow, taking out a democratically elected government in a CIA coup. Others will point to the political and financial subvention given to Saddam Hussein by the Atlantic states and the Gulf emirs to invade Iran and crush the Iranian Revolution of 1979. Millions died in that futile war, whose conclusion left a battered Saddam turning to the Gulf Arabs, an unpaid bill in hand. It was the Gulf Arab reticence to pay up that led to Iraq’s invasion of Kuwait, and the full-scale entry of US troops into Saudi Arabia (which enraged Osama Bin Laden and his minions) and into a decades long war against Iraq (1991-2011). This is all true as context: there has been a long-standing animosity between the Atlantic powers and Iranian democratic ambitions.

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