What If Companies Don’t Hire People Back?

It is normal for businesses to hire people back after a recession. The improvement in employment usually lags GDP recovery, but the trend is part of a normal cycle that comes at the end of an economic downturn.

The current recession has been so brutal that a number of normal trends may not apply.

The Wall Street Journal reports “According to a new survey, 52% of companies expect to employ fewer people in three to five years than they did before the recession began.” The study was conducted by Watson Wyatt this month and covered 179 companies.

The economy will suffer two body blows if the information is accurate. Unemployment is supposed to top 10% by the end of this year and could remain in double digits for much of 2010. Economists hope that the stimulus package and the normal rebound in business and consumer spending that cause a rebound help drive improved employment. The damage from this downturn may be great enough that many businesses elect to get by with less while they take what may be years to rebuild their fortunes. That, in turn, may lead to a permanent elimination of some jobs.

There are a number of reasons that this recession will not end as quickly as optimists expect or that a recovery will be nothing more than a 1% to 2% GDP improvement that goes on for the next few years. That would be quite different from the 4% to 5% GDP improvement that the Administration is forecasting for 2010 and the years beyond. It would almost certainly cause a widening deficit because there will be fewer and fewer people to tax as a way to offset government spending, much of it being done in the name of rebuilding the job base.

A lack of sharp GDP increases and an unemployment rate that could stay above 9% for a number of quarters may be labeled a recovery, but it is simply stagnation which is no recovery at all.

by Douglas A. McIntyre

US Stocks Down In Early Trading After Grim World Bank Report

A grim economic forecast from the World Bank put pressure on stocks and commodities prices on Monday and increased demand for Treasurys and the dollar.

Shortly after the opening bell, the Dow Jones Industrial Average was lower by about 97 points. The S&P 500-stock index fell 1.6% and the Nasdaq Composite Index declined 1.6%.

The World Bank added to the market's unease about the economic outlook as it said that the global economy will shrink by 2.9% this year. That is worse than the body's previous forecast for a 1.7% contraction.

Commodities prices, which have risen sharply in recent months on hopes for an economic turnaround, declined. The front-month crude-oil futures contract sank more than $1 to under $68 a barrel in recent trading.

Treasury yields declined as investors snapped up government debt despite an upcoming meeting of the Federal Reserve and the expected sale of $104 billion in notes this week. The benchmark 10-year note climbed 16/32 to yield 3.71%. The dollar gained against the euro but declined against the yen, in a pattern that has frequently emerged when traders grow nervous about the outlook.

The Fed is expected to leave interest rates unchanged, but traders are looking for any indication that the central bank intends to rein in some of its monetary stimulus. Fed-fund futures are pricing in at least four quarter-point increases in a year's time, though many economists view an increase in the Fed's target rate as unlikely before the central bank has reined in other extraordinary measures it took to boost the economy and financial markets during the worst of the credit crisis.

Among stocks to watch, U.K. mining company Anglo American jumped 5% on reports that it received a merger offer from Xstrata in a deal that, if accepted, would create the world's No. 3 miner. Peers Rio Tinto and BHP Billiton fell 6% and 3% respectively.

Apple gained 1% after The Wall Street Journal reported that Steve Jobs, who has been on medical leave since January, received a liver transplant two months ago. The company said that it sold more than one million of its new iPhone 3G S handsets over the device's debut weekend.

Markets in Asia were generally stronger, with the Nikkei 225 closing 0.4% higher in Tokyo. Markets in Europe were weaker

翁詩傑：限制車速‧不規定長巴旅巴鎖油門

（吉隆坡）交通部長拿督斯里翁詩傑表示，政府未打算規定所有長途巴士及旅遊巴士須鎖上油門，以限制車速。

“政府已通過商用車輛執照局（LPKP），自去年8月18日起規定所有新長巴安裝地理位置定位系統（GPS）。有關系統讓長巴業者監督及控制巴士司機是否超速。”

他在國會下議院回答公正黨雙溪大年區國會議員佐哈里阿都的提問時指出，在2000至2008年涉及長巴和旅遊巴士的死亡意外，分別是661宗及97宗。

他指出，商用車輛執照局目前正在探討長巴是否適合安裝“車速限制儀器”（Speed limiter device），因為交通業者須承擔安裝儀器的成本。

他說，長巴及旅遊巴士在高速公路的最高車速分別是每小時90及80公里，違例者將被罰款不超過300令吉。

佐哈里在提出附加問題時指出，一輛長巴在凌晨12時零3分從雙溪大年駛往吉隆坡只是用了3小時45分；根據每小時110公里的車速，從雙溪大年駛往吉隆坡其實須要4小時30分。

他建議交通部規定所有長途巴士及旅遊巴士須鎖上油門，及進行巴士打卡制，以監督巴士的行駛速度。

林冠英：發揮孝親敬老‧養育父母或有獎勵

（檳城）檳州政府為鼓勵子女養育父母，有意發出至少1000令吉獎勵子女，但這筆款項只在父母過世後才會發給他們指定的子女。

檳州首席部長林冠英指出，州政府推展的回饋樂齡人士計劃中，在表格上要求樂齡人士填上受益人，以便州政府把上述款項交給他們指定的人士。

不過，林冠英強調，州政府只在財力許可的情況下發出上述款項。

他週日（6月21日）晚上出席檳城慧音社主辦的“第29屆敬老慈幼慈善晚會”時，在致詞中宣佈上述新措施。

視州政府財力而定

當記者詢問州政府是否已經成立基金會，以及是否已在州行政議會通過上述建議時，林冠英強調，這項獎勵措施視州政府的財務狀況而定。

他說：“我是以首席部長身份提出這項建議。就像推選州秘書的人選，首席部長可以提出建議。”

他表示，州政府這項措施是鼓勵子女養育父母，發揮孝親敬老的精神。如果有關樂齡人士沒有填上受益人的名字，他們逝世後，這筆款項將交給樂齡人士曾經寄宿的養老院或看護中心。

他也強調，所有在明年3月8日之前填妥表格的樂齡人士會有其他方式的回饋，作為感謝樂齡人士為檳州的貢獻。

他無法提出具體的回饋方式，只表示州政府還在研究回饋樂齡人士的方法。

除懸賞1萬‧或擢升揭發者

檳州首席部長林冠英週日（6月21日）晚上出席喬治市獅子會308B2區所舉辦的慈善宴會時宣佈，經過州政府的確認之後，首個“廉潔獎”的得主名單將於6月24日正式公佈。不過，他並沒有在會場上透露該得主是因何事獲獎。

“這位揭弊的公務員，貫徹了我們的‘貓´原則，樹立了廉潔的良好榜樣，因此，我們決定將這個獎項頒發給他。”

這項由檳州政府在6月2日為州內公務員設下的“廉潔獎”，主要是鼓吹廉潔風氣，只要有公務員檢舉政府部門內涉及貪污、賄賂或舞弊的1員，經查證後屬實，就能立刻獲得懸賞1萬令吉；而且，州政府也會就此事考慮擢升這名揭發者。

為州政府節省資源林冠英也強調，這項“廉潔獎”志在提昇公務員的表現，同時也為州政府節省資源。

他以“陳合裕土地案”

為例，若是公務員能夠及時揭穿這起案件，州政府就不用賠償那麼多錢了。

“無論是之前的‘創意革新獎´或是現在‘廉潔獎´，這都是檳州政府領先全國、首設對公務員的獎掖。我希望所有的公務員都能好好珍惜這個機會，努力表現自己。”

林冠英亦補充，“廉潔獎”的額度並沒有所謂的上限，簡言之，今年若有20宗投報，州政府就會賞出20萬令吉；若1宗也沒有，州政府則一分錢也不必撥出來。

“中央撥款是國陣的錢”‧農長拒反對黨參與農理會

（吉隆坡）農業及農基工業部長拿督諾奧馬以“中央撥款是國陣的錢，應全由國陣議員來執行大選承諾”為由，拒絕讓反對黨議員參與國會農業理事會會議，引起行動黨華都牙也議員馮寶君強烈不滿，與諾奧馬展開罵戰。

諾奧馬在總結2008年動物食物法案二讀辯論時表示，由於國會農業理事會主要是負責農業行政和執行政策的事務，因此他只會委任國陣議員參與該理事會。

“因為中央撥款是國陣的錢，國陣必須履行大選時所許下的承諾，所以只有國陣議員才能加入！”

諾奧馬的言論引起馮寶君不滿，並反駁諾奧馬將課題政治化，因為前任農業及農基工業部長拿督慕斯達法邀請反對黨議員參與該理事會，並一起交流及解決問題，但是諾奧馬上任後卻馬上指示官員制止反對黨議員參與。

馮寶君：這是納稅人的錢

“而且這不是國陣的錢！這是納稅人的錢！慕斯達法可以邀請我們參與，但是新部長上任後卻把理事會政治化。”

諾奧馬回應時否認有關指責，並說他的做法是以人民為先。

不過，他的回應引起馮寶君反彈。她強調：“這不是國陣的錢！這是人民的錢！不要用人民的錢來政治化課題！

如果我的選區（華都牙也）的選民拒絕了國陣候選人，就應該將撥款交由我們處理惠及人民。”

諾奧馬這時馬上回應：“所謂國陣的錢，就是政府的錢！而且民聯在執政霹靂時，也一樣撤換國陣支持者擔任官職！”

Asian Markets Rise on Optimism About China

LONDON (AP) -- European stock markets fell Monday despite gains in Asia as investors remained cautious about the U.S. economic outlook ahead of a key policy decision and statement from the U.S. Federal Reserve later in the week.

The FTSE 100 index of leading British shares was down 49.51 points, or 1.1 percent, at 4,296.42 even though shares of mining company Anglo American PLC surged more than 6 percent after Xstrata PLC's merger approach, which at current market prices would value a merged company at just over 40 billion pounds.

The biggest loser in London was British Airways PLC, which fell more than 7 percent, after Richard Branson, the boss of bitter rival Virgin Atlantic, suggested that the flag carrier was worthless.

Germany's DAX fell 63.67 points, or 1.3 percent, to 4,775.79 while the CAC-40 in France was 19.51 points, or 0.6 percent, lower at 3,201.76.

Investors have been in a cautious mood for most of June amid mounting concerns that the recent economic news has not been quite good enough to justify the share rally in stock markets since the middle of March. The FTSE ended last week down 2 percent, while the CAC closed 3 percent lower and the DAX 4 percent down. In the U.S., the Dow Jones industrial average lost 3 percent, while the broader Standard & Poor's 500 index sank 2.6 percent

The stock market rally around the world since March had been fueled by hopes that the U.S. economy will recover from recession sooner than anticipated. As equities usually start rising 6 to 9 months before actual recovery emerges in the official data, this suggests investors believed the massive sell-off in markets during the most acute phase of the financial crisis was overdone. Some of the world's major equity indexes are now in positive territory for 2009.

That optimism has dissipated somewhat despite some encouraging data at the end of last week. Analysts say investors need clearer evidence that the world economy and company earnings are recovering to make sense of stock valuations. In March, many investors saw valuations around the world as particularly cheap and started buying into the market.

Interest rates, particularly on U.S. government bonds have been rising steadily over recent weeks on expectations that the U.S. Federal Reserve will raise borrowing costs sooner than previously anticipated. Meanwhile, oil prices have more than doubled over the past couple of months on hopes that a global economic rebound will boost demand for crude.

''Until now markets have been able to find support from the fact that the global economy was not about to fall off a cliff and financial markets were not going to implode. Now markets need more,'' said Mitul Kotecha, an analyst at Calyon Credit Agricole.

The highlight this week will the U.S. Federal Reserve's rate-setting meeting on Wednesday. Though the benchmark rate is widely expected to be kept in the range of zero to 0.25 percent, investors will be interested to see what the Fed says about current economic prospects and how long it expects to keep monetary policy as accommodating as it is.

Most analysts think the Fed has a difficult balancing act -- expressing the view that the worst of the recession is over at the same time as not spooking investors into thinking that interest rates will rise any time soon.

''I think that with the real economy stabilizing at best and with the consumer still cautious, the best line for the Fed to take this week is simply to say that it will keep interest rates low for as long as it takes,'' said Neil Mackinnon, chief economist at ECU Group.

The unsettled tone was expected to continue at the U.S. open later, with Dow futures down 47 points, or 0.6 percent, at 8,429 and the S&P 500 futures 6.2 points, or 0.7 percent, lower at 909.50.

Earlier in Asia, optimism about China's economic outlook helped shares advance, with Japan's Nikkei 225 stock average closing up 40.01 points, or 0.4 percent, to 9,826.27, and Hong Kong's ending 138.62 points, or 0.8 percent, higher at 18,059.55.

Premier Wen Jiabao was quoted by state media over the weekend as saying China's economy was beginning to recover steadily and that Beijing will maintain an easy credit policy to support growth.

Elsewhere in Asia, South Korea's Kospi climbed 1.2 percent to 1,399.71 and Australia's benchmark added 0.5 percent to 3,918.2.

Oil slipped further below $70 a barrel, with benchmark crude for July delivery down $1.37 at $69.18 a barrel. On Friday, it fell $1.82 to $69.55.

In currencies, the dollar fell 0.4 percent to 95.92 yen while the euro declined 0.7 percent to $1.3844.

--------

AP Business Writer Joe MacDonald in Beijing contributed to this report.

World Bank Cuts Forecast for Developed Economies

HONG KONG — Companies in Japan and Germany may have become less gloomy about their prospects in recent months, as surveys showed Monday, but neither they nor businesses elsewhere have much to cheer about as the world economy remains mired in a recession that could see it shrink by about 2.9 percent this year.

Forecasts from the World Bank on Monday highlighted just how painful the recessions will be in various regions, despite mounting signs that the very worst of the downturn may be over.

The bank earlier this month said it expected a deeper global recession, forecasting a 2.9 percent contraction in gross domestic product for this year, rather than 1.7 percent, as it projected as recently as March.

More detailed forecasts released Monday showed that much of this pain will be in high-income areas like the euro zone, the United States and Japan. The bank said that it expected economies in high-income nations to contract a total of 4.2 percent this year.

It expects the U.S. economy to shrink 3 percent and the euro zone 4.5 percent, rather than the 2.4 percent and 2.7 percent it forecast in March. For Japan, the World Bank now projects contraction of as much as 6.8 percent this year — significantly higher than the 5.3 percent it forecast three months ago.

A survey of big Japanese manufacturers released by the government Monday showed sentiment improving in the April-to-June period, to minus 13.2, from minus 66.0 during the previous quarter. And in Germany, the closely watched Ifo business confidence index rose for the third consecutive month in June, to 85.9 from 84.3 in May.

Both readings echoed other encouraging data from around the world in recent weeks that show the pace of decline is at least slowing, but they fall well short of showing actual recovery at this stage, economists caution.

The World Bank’s forecasts Monday echoed this caution: “While the global economy is projected to begin expanding once again in the second half of 2009, the recovery is expected to be much more subdued than might normally be the case,” the bank said in its report. “Unemployment is on the rise, and poverty is set to increase in developing economies, bringing with it a substantial deterioration in conditions for the world’s poor.”

Likewise, the chief economist of the International Monetary Fund, Olivier Blanchard, said Monday that the U.S. economy would see a sustainable recovery only if exports rose substantially, and that this might require an adjustment in the dollar’s exchange rate.

Developing nations will still see growth in 2009, the World Bank said, but this will be slim — 1.2 percent overall, after 8.1 percent in 2007 and 5.9 percent in 2008 — mainly because of the dynamic economies of China and India. Stripping out those two countries, where growth is expected to be 7.2 percent and 5.1 percent in 2009, developing nations will contract 1.6 percent, the bank projects.

Economies in Brazil and Russia — the other two nations in the so-called BRIC quartet of large, and once fast-growing, developing nations — are expected to shrink by 1.1 and 7.5 percent, respectively. The bank had previously expected Brazil to eke out 0.5 percent growth this year, and Russia to shrink by 4.5 percent.

Developing nations have been hit hard by plummeting demand for their exports in the United States and Europe. The recession and financial-market fragility also has caused private capital inflows to developing countries to fall drastically, to $707 billion in 2008, from a peak of $1.2 trillion in 2007, the World Bank said Monday.

Emerging Europe and central Asia have been hit hardest by the crisis, as many countries there had large current account deficits and were especially vulnerable to the abrupt drop-off in capital flows and exports the crisis brought.

GDP in these regions is projected to fall by 4.7 percent in 2009, recovering to grow by about 1.6 percent in 2010.

Many parts of developing Asia suffered mainly because of collapsing exports, but South Asia and the East Asia and Pacific regions are forecast to grow 4.6 percent and 5 percent, respectively.

The World Bank expects global growth to rebound to 2 percent next year and 3.2 percent by 2011. In developing countries, growth is expected to be higher, at 4.4 percent in 2010 and 5.7 percent in 2011.

Hawaii Unfazed by Missile Threat

POLIHALE STATE PARK, Hawaii -- In Washington, officials are keeping a close eye on Hawaii amid concerns that North Korea will fire a missile at the state.

But in Hawaii itself, Paula Rego isn't worrying. As she sits on a beach here on the westernmost point on the island of Kauai -- Hawaii's closest publicly accessible spot to North Korea, which is 4,500 miles northwest -- the 37-year-old resident has more pressing concerns. One is comforting Noah, her sobbing 2-year-old son, who was just whacked with a toy lightsaber by his older brother.

Mrs. Rego and her family are part of a group of 21 people from five families who camped at this state park for Father's Day. "By the time you know you're in an earthquake, it's too late to do anything about it," says Mrs. Rego, a former California resident. "It's the same thing with a missile."

Reports that North Korea is planning to test-fire a missile with a 4,000-mile range toward Hawaii around July 4 have prompted U.S. officials to beef up defenses around the islands, a sign of the escalating tensions between the U.S. and North Korea over Pyongyang's recent moves to restart its nuclear-weapon program. But on Hawaii, many residents are indifferent, going about their daily lives and expressing more concern about issues such as the state's weak economy.

The islands' laid-back culture gets partial credit for the nonchalance about the missile. "There's a saying on this island," says Andrew Rego, Paula's husband and a Kauai native. "If can, can. If no can, no can." Translation: There's no point in fretting over what is beyond control.

Many residents don't believe North Korea will risk a missile launch for fear of American retribution. Some say they think the country lacks the technological know-how to send a missile across half the Pacific Ocean, given previous missile-test failures. North Korean long-range missiles have failed three tests in the past 11 years.

Though the North Korean missiles don't carry warheads, the U.S. nonetheless doesn't want any country -- let alone a hostile one -- to fire its missiles toward American territory. And some U.S. officials favor shooting down an incoming missile to demonstrate American capabilities in case of actual hostilities as a deterrent.

Residents are confident the U.S. military is taking measures to protect Hawaii, especially given that the state's Pearl Harbor was attacked in World War II. Maj. Gen. Robert G.F. Lee, who as Hawaii's adjutant general directs the state's Army and Air National Guard, says Hawaiian residents and tourists aren't in danger. "I'd encourage visitors to visit our state," he says. "You will not be at risk."

That President Barack Obama hails from the islands is also reassuring to some residents. "It would be suicide" for North Korea to shoot a missile, says 49-year-old Martin Steinhaus, a Kauai resident who was camping with the Rego family. He adds that Hawaii "is dear to [Obama], so he's going to find an amicable solution."

Hawaii residents have other concerns, such as finding or keeping jobs. The state's tourism industry has been slammed by dual recessions in the U.S. and Japan. Unemployment in the state is at a 30-year high of 7.4% and rising. To close a massive budget deficit, Hawaii's governor has proposed cutting state employees' salaries 14% by furloughing them for three Fridays a month.

At the beach, the Regos were holding a Father's Day campout with four other families. The families knew of the missile threat, but that didn't deter them from setting up beach umbrellas and a half-dozen tents. "We're defying him," Mr. Rego jokingly says of North Korean leader Kim Jong Il.

As the sun sinks toward the horizon, Mr. and Mrs. Rego sit on the sand with Lissa Lang and Lisa Lewis to watch the sky turn a brilliant orange. They joke about facing annihilation as they look west toward North Korea. "At least we'll be at ground zero and we'll be done with quickly," Ms. Lang says. "We'll have a good sunset."

Property Shares Lift Hang Seng

Asian markets ended mostly higher Monday, with bargain-hunting in the property sector helping lift Hong Kong's benchmark index, while the Nikkei edged up 0.4%.

Many markets saw sharp gains fade in late trade on caution ahead of the Federal Reserve's decision on interest rates Wednesday and uncertainty over the health of the economy in the second half.

Japan's Nikkei 225 ended 0.4% higher at 9826.2, Hong Kong Hang Seng ended up 0.8% and South Korea's Kospi added 1.2%. Australia's S&P/ASX 200 rose 0.5%, and Shanghai's Composite index gained 0.6%.

In late trading, Singapore shares were flat and India's benchmark index was down 1.3%.

"Investors still lack incentives to chase up stocks," said Marco Mak, head of research at Tai Fook Securities. He said some of the gains were a rebound from declines last week that saw markets such as Tokyo slide 3.5%, marking its worst weekly performance in three months.

"The economy may have hit bottom, but there's still a question mark about third-quarter demand," said Taiwan International Securities' Andrew Teng.

Nissan Motor rose 5.6% after the Nikkei reported the car maker plans to mass produce electric cars in the U.S. by 2012. But oil and commodity stocks fell in Tokyo with Inpex down 2.4%, Itochu off 1.5% and Nippon Yusen 1.2% lower.

Tachibana Securities analyst Kenichi Hirano said the stock market's two major concerns were "whether the real economy can catch up with share prices and whether the current liquidity can continue."

In Hong Kong, debutante China Metal Recycling ended up 22% from its IPO price. Analysts said the share benefited from reinvigorated investor appetite for new listings and an upbeat view on the company's prospects, given its market-leader status.

"The market focus is now on newly listed companies," said Alex Tang, head of research at Core-Pacific Yamaichi in Hong Kong.

Monday also saw a successful IPO from furniture maker Hing Lee Holdings, which placed 35 million shares.

Bargain-hunting spurred gains in the Hong Kong real-estate sector. Cheung Kong rose 3.4% after falling 5.9% in the past five sessions, and Sino Land ended 1.6% higher after shedding 6.4% over the same period.

Sun Hung Kai Properties rose 3.4% after the Standard reported the company generated 100 million Hong Kong dollars (US$12.8 million) over the weekend from the sale of five premium residences at Sky One, the second phase of its Peak One project.

In Sydney, shares of BHP Billiton were up 1.6%, Fortescue up 5.4%, Origin Energy 1.3% higher and Rio Tinto down 1.4%.

National Australia Bank gained 1.8%. The company said Monday it had agreed to buy Aviva's Australian wealth management business for A$825 million.

Technology shares supported gains in Korea after a rise in their U.S. peers Friday, with Samsung Electronics up 2.3% and LG Electronics up 2.2%.

In currency trading, the euro was lower against the U.S. dollar and the Japanese yen. The euro was at $1.3862 from $1.3948 late in New York on Friday, though off a low of $1.3886. Against the yen, the dollar was trading at 95.94 yen, from 96.23 yen.

Spot gold was down $2.10 cents from New York on Friday, at $931.60 a troy ounce. "Gold is in a lull, and might go lower," said Jonathan Barratt, managing director at Commodity Broking Services.

Still, analysts at UOB KayHian said there were signs economic activity in the OECD could be about to turn upward, and this should drive the next phase of metals restocking, as early as the third quarter of 2009. "Although there is likely to be a period of weakness in commodity prices from potentially weaker China imports, early signs of recovery in the developed economies will likely trigger a new round of re-stocking, particularly when interest rates remain low."

July Nymex crude, which expires Monday, was down 37 cents at $69.18 a barrel on Globex, having fallen $1.82 Friday.

Crude was likely to trade a range from the high $60s to the low $70s in the early part of the week, before taking its cue from the U.S. weekly petroleum report, said David Moore, a strategist at Commonwealth Bank of Australia. "Prices have been a bit soft, which is surprising as there's been some news around that probably would have been supportive of oil at other times."

By CHRIS OLIVER, ROSALIND MATHIESON and KATE O'KEEFFE

新加坡‧旅客投訴進了黑店‧花7000買寶石只值數百

（新加坡）獅城出現珠寶黑店？有旅客投訴以3000元（7200令吉）買下的祖母綠寶石，竟是最多只值300元（720令吉）的人造石。

《聯合晚報》記者上網搜尋資料時也發現，過去3年，已有百多名中國旅客或向當地媒體或上博客申訴，在獅城珠寶店買到假寶石戒指、項鏈吊墜等，不少人更是在買祖母綠寶石時破財。

陸先生申訴，他的中國朋友數月前在惹蘭勿剎一帶的珠寶店，花了近5000元買寶石和手表，但回國檢驗後發現，皆是贗品。

陸先生受訪時說，朋友是參加旅遊團到獅城，並由新加坡導遊帶到這間珠寶店購物，店員聲稱祖母綠寶石是哥倫比亞天然寶石，開價5000多元，討價還價後以3000元成交。他同時也買了一隻1000多元的瑞士表。

黑店存在20多年

但他回山西驗貨後發現，寶石竟是人造的，上面鑲的6粒小鑽和鍍金，並不值錢，頂多300元。那只瑞士表的表芯，則是中國製造，折合最多值100元。

旅遊業者透露，珠寶黑店早已存在20多年，近2年瞄準有錢的中國客。

記者在北京、深圳等地的旅行社網站上，發現遊新馬泰5日只需1650人民幣（約351新元），行程包括去珠寶店。

行內人士透露，這些珠寶店或是旅行社開的，只做遊客生意，以賺回不足的團費。

珠寶商：要看清收據

新加坡金鑽珠寶工會會長何乃全提醒遊客，買珠寶要注意收據和門面。

他說，祖母綠是很貴重的寶石，純天然的可要價幾千甚至上萬，視大小而定。

“買珠寶最重要是看清商家開的收據，如果是假的，應注明costume（人造）或imitation（仿制），如果寫natural（天然）卻賣假的，能以公平交易法起訴對方”。

他說，旅客如果發現珠寶店不做門市生意，就應小心，寧願不買。

旅遊局提醒旅客及國人，購物時應貨比三家，購買珠寶等貴重物品時，記得索取鑒證卡。

新加坡‧迎娶外地年輕女子‧老夫少妻越來越多

（新加坡）新加坡越來越多老牛娶嫩草！

根據國家人口秘書處上週公佈的最新數據顯示，年齡在40歲以上的新加坡男子娶外籍新娘的百分比，已從1998年的18%上升至去年的35%。

在這些異國通婚的個案中，80%的新娘是在40歲以下，超過90%是來自亞洲國家和地區。

53歲的離婚公司董事葉福順就是一個典型的例子，他在今年2月娶19歲越南女子吳（Ngo）小姐為妻。

年齡差距不影響婚姻

雖然是老夫少妻，葉福順和新婚妻子的生活不受年齡相差34年的影響。

葉福順是一家電子公司的董事，他在5年前離婚，育有2名年齡分別是21歲和23歲的兒子。他和吳小姐是通過婚姻介紹所認識的，他說，他和少妻的年齡雖然相差34年，但是這個差距並沒有影響他們的新婚生活。

葉福順也鼓勵朋友娶外國女子，他說︰“因為她們不像新加坡女子那麼多要求，對婚姻的期望也沒有這麼高。”

他說︰“每當我和妻子到咖啡店用餐，周圍的人都會投來異樣的眼光，但我一點也不介意，這表示我的妻子漂亮嘛！”

葉福順的一些朋友還甚至把他的少妻當作他的女兒。可是他一點也不覺得尷尬。

他們2人和葉的93歲高齡母親，同住在實龍崗的一個共管公寓單位，家中有一名女傭。

如果葉福順年紀越來越大，吳小姐嫌他太老要離他而去時，這麼辦？他只是淡淡的說︰“如果她不要我，我就換另一個女人。”

个人看法 : 年齡相差太大没有影響是因为老子有金钱, 你說对吗?

日航不堪虧損 日政府將提供千億日圓融資

（中央社東京22日路透電）日本財務金融兼經濟財政大臣與謝野馨（Kaoru Yosano）今天表示，日本政府準備金援全球經濟危機導致航空業不景氣，因而虧損連連的日本航空公司（Japan Airlines Corp）。

　　與謝野馨表示，已收到來自監督航空業的國土交通大臣金子一義（Kazuyoshi Kaneko）的要求，由「日本政策投資銀行」（DBJ）提供日航貸款。日航是日本規模最大的航空公司。

　　與謝野馨在內閣會議結束後的記者會上表示：「我的回答是，我們希望透過DBJ貸款合作，我也會把這個請求傳達給他們。」

　　一名DBJ高層主管表示，DBJ可能會提供日航1000億日圓（約10億美元）左右的緊急融資。

　　日航公布，日航在今年3月結束的上一會計年度，虧損達509億日圓，並警告在明年3月結束的本年度，虧損可能達到590億日圓。

日本大企業對經濟不如過去悲觀

（中央社東京22日法新電）日本政府今天公布的調查指出，日本大型企業對今年第2季經濟不如上季悲觀。

根據日本財務省和內閣府的聯合調查，第2季大型企業信心指數為-22.4，遠低於1到3月的-51.3。

指數計算方式是認為經濟開始復甦的企業百分比，扣掉認為還在衰退的企業百分比。

去年7到9月指數為-2.6，不過10到12月上升到8.7。

這些數據的改善使外界重燃希望，認為日本銀行定7月1日公布的「短觀調查」，很可能宣布日本已從二戰後最嚴重的經濟衰退觸底反彈。

台5月份失業率5.82% 高居亞洲榜首

行政院主計處今天公佈，5月失業人數為63萬3千人，較上月增加8千人；失業率為5.82%，較上月上升0.06個百分點，較上年同月亦升1.98個百分點。 主計處表示，受畢業生投入勞動市場影響，5月就業人數1,024萬1千人，較上月增加1萬5千人或0.15%；較去年同月則減17萬2千人或1.65%。台灣失業率仍然高於亞洲主要國家及地區。 世界主要國家（地區）最新失業率為，美國9.4%，加拿大8.4%，德國8.2%，英國7.2%，香港5.3%，日本5.0%，韓國3.9%，新加坡3.2%。 主計處說，5月失業人數為63萬3千人，較上月增加8千人，其中因工作場所業務緊縮或歇業與初次尋職而失業者分別增加4千人與3千人，因對原有工作不滿意而失業者則減少1千人。 主計處表示，與去年同月比較，失業人數計增21萬7千人。1至5月平均失業人數為61萬8千人，較上年同期增加20萬2千人。失業人口中，45至64歲年齡者平均失業人數為13萬8千人，較上年同期巨幅增加5萬4千人或64.21％，為各年齡層之冠。

澳洲‧在大馬上空遇亂流‧澳航急降7人傷 7 slightly injured as Qantas plane hits turbulence

（澳洲‧悉尼）澳洲航空公司透露，一架A330型客機從香港飛往柏斯途中，在馬來西亞上空遭遇亂流，飛機陡降，造成7人輕傷。但否認這次事件與其他同型客機最近發生的事故有任何關聯。

這架澳航空中巴士A330客機，載著206名乘客和13名機員。飛機起飛約4小時後，於週日（6月21日）深夜，在馬來西亞婆羅洲島上空，遭遇強大亂流，飛行高度突降，6名乘客和1名機員受輕傷。

機長通報塔台，說機艙內頂板有些許損傷，2個氧氣罩落下，一名乘客說飛機瞬間降低高度前，他聽到一聲巨響。

女乘客整個人飛起來

當時，一名女乘客正在等廁所，她整個人飛起來，頭撞到機艙頂部，艙內物品飛散，由於傷者情況輕微，飛機繼續航程。

一名叫約翰的乘客告訴Fairfax電台說：“當時我們遇上的應該是正常氣流，但機身卻在半空中急跌。”

另一名乘客凱斯說：“我們猶如從30層樓高的建築往下墜。”

有乘客說，機員告訴她飛機驟降了30公尺。

客機已於當地時間今日（週一，6月22日）上午7時30分降落在柏斯國際機場。

6月1日，法國航空公司一架同型號的客機發生離奇失事，造成機上228人全部罹難。

去年10月，澳航一架A330型客機也曾在澳洲上空2度急墜，造成多人重傷、要緊急降落。但澳航強調，今次事件與上次無關，事故原因是遇上強烈氣流。

A Qantas flight struck turbulence over Malaysia and suddenly lost altitude, leaving seven people with minor injuries, the airline said Monday. The Airbus A330 with 219 passengers and crew aboard was flying from Hong Kong to the Australian west coast city of Perth overnight when it struck "severe turbulence" over Malaysian Borneo, Qantas said in a statement. Six passengers and a crew member were treated for minor injuries on board as the airliner continued to Perth, Qantas corporate affairs manager David Epstein said. The captain reported minor damage to two overhead panels in the cabin, and two oxygen masks were dislodged, he told Fairfax Radio. An uninjured passenger, who identified himself only as John, said he heard a loud bang before the jet suddenly lost altitude. "I was sitting at the exit door and I had this lady, (who) was waiting at the restroom and she flew up and hit the ceiling and came crashing down to the floor," John told Fairfax Radio. "It was just a matter of a few seconds, but it (the turbulence) was really sudden and things went flying," he added. Australian government safety officials were investigating the incident. Qantas said there is not reason to link the incident to other recent in-flight incidents involving A330 aircraft. A computer malfunction on a Qantas A330 flying from Singapore to Perth on Oct. 7 last year caused the jet to nose-dive twice, leaving 12 passengers and crew seriously injured. The Australian airline underwent a safety review last year after a series of problems, including an oxygen tank explosion on a Boeing 747-400 that ripped a hole in the jet's fuselage last July, forcing it to make an emergency landing in the Philippines. No one was injured.

英國‧激光導航技術驚人‧汽車跟隨前車自動行駛

英國‧倫敦）有沒有想過在開車途中，看書、看電視甚至小睡一會？

有車廠就研發一種激光導航技術，讓汽車能跟隨前車以時速112公里自動行 駛。技術驚人之處，在於能同時容許10輛車組成一列無人駕駛的“車龍”，並做出繞彎爬頭等高難度動作。新系統由富豪車廠研發。安裝特製感應器的車輛，只要 連結其中一部“領頭車”，就能將操盤、剎車的工作交給領頭車的專業司機。車主只要支付每2.6公里10便士（約馬幣0.7令吉）的價錢，便可在指定時間及 路段使用“自動導航”服務。富豪希望在明年底為新系統開始進行測試，並預計2018年在歐洲廣泛使用。

Honest VS Dishonest Money

The bailout is one way the elite transfer wealth from our hands to theirs. But it is certainly not the only way, nor is it the most sophisticated. Perhaps the cleverest scam of all is the actual “money” they’ve created for us to use. Just like the fraudulent mechanisms we’ve outlined in previous chapters, our money has theft built right in. By design, it enables wealth to be secretly transferred from those who’ve earned it, to those who create and control it.

Few know the history of money or the many different forms money can take. Some forms of money are more prone to fraud than others and our ignorance of this fact works to the advantage of those running the scam. They’re more than happy to make us believe only they are smart enough to understand the “complex nature of money.” Our monetary policy, so they say, is best left to the experts; we should just trust them. …Knowing the ultimate goals of those who created our monetary system, we could hardly make a more dangerous mistake.

Defining money

To accurately define what money is, we can’t simply hold up a US Dollar (or a Russian Ruble, or a Mexican Peso) and say “This is money.” We’re better off to start by defining the overall purpose of money. …What does money do? In the simplest terms, money enables us to purchase products and services from other people. Using this basic description, we might go on to say: Money can be anything that is widely accepted as “payment” for products and services.

Having defined money in this way, it will be easier to explain the different forms of money and why some are far superior to others. However, before we actually get into the different forms of money, it’s a good idea to touch on what existed before money. It was known as barter.

Barter

To “barter” basically means to pay for something you want with products or services instead of paying for what you want with money. As an example, imagine you grow tomatoes and your neighbor grows corn. It’s possible to imagine a scenario where you and your neighbor agree to trade 25 pounds of your tomatoes for 25 pounds of his corn. In this scenario, you have each paid for what you want with something other than money.

Although barter provides an opportunity to engage in trade with others, this type of trade is far more limited than what we’re used to today. To illustrate: What if your neighbor also grows wheat and you need 25 pounds of that too? You offer him another 25 pounds of tomatoes but he declines. (He has no use for any more tomatoes.) Now what do you do?

You might try to find another person who grows wheat and trade with them. Or, you might find somebody who has something that your wheat growing neighbor wants, trade them your tomatoes for that item, and then trade that item for the wheat…but clearly none of these options are as convenient as simply trading your neighbor “money” for his wheat, his corn or anything else he might be willing to part with. As you can see in this example, barter was far from ideal.

Even though barter was limited in its usefulness, it played a major role in developing the concept of money. While trading with each other, people realized certain commodities were always in demand. For instance, they eventually discovered corn was so high in demand it could be traded for almost any other product or service. From that point forward, corn took on a value that exceeded its “consumption value.” In other words, even though your neighbor already had all the corn he needed; he would continue to grow (or acquire) more because he knew the corn would be “accepted as payment” for the products and services of others. The more corn he had, the more purchasing power he had. In this way, many different commodities (corn, wheat, animals, etc.) eventually evolved into reliable forms of commodity money.

Now, with that brief explanation of how barter eventually led to “commodity money,” let’s move on to…

Commodity money

Cows, sheep, corn, wheat; all of these commodities had intrinsic value, were highly “in demand” and, as such, individuals were nearly guaranteed to accept them in trade. For this reason, they became some of the earliest forms of “commodity money.” But just as barter was limited, so too was the ability to easily “buy” using indivisible items like a cow. Perishable food items had their limitations as well.

When mankind discovered metal and learned to craft it into tools and weapons, the metals themselves soon took on the role of commodity money (superior to the other commodities in many ways.) For starters, metal didn’t need to be fed, watered and cleaned up after. And, unlike wheat and corn, you didn’t have to worry about metal going bad, becoming contaminated with bugs or mold, etc.

Perhaps best of all, metal was easily divisible. Compare the flexibility of purchasing something with a cow versus purchasing something with iron. Assuming a cow is equal in value to 100 pounds of iron, and an item is for sale valued at 10 pounds of iron, (or 1/10^th of a cow) the individual buying with iron has a distinct advantage; he can easily produce the exact amount of money needed. The same cannot be said for the man trying to purchase the same item using his cow. Sure, he can divide the cow into 10 pieces, but the other 9 wouldn’t be worth much for very long.

“The value of metal ingots was originally determined by weight. Then, as it became customary for the merchants who cast them to stamp the uniform weights on the top, they eventually were valued simply by counting their number…in this form they became, in effect, primitive but functional coins.” -Ed Griffin, The Creature from Jekyll Island

Just as barter led to the concept of commodity money, and that led to “metal” becoming the commodity of choice, centuries of experimenting with different kinds of metals produced a clear favorite around the world: Gold. Gold’s ability to function as a stable form of money is unmatched. (Silver runs a close second.) When it comes to “monetary stability,” the Federal Reserve System has failed miserably compared to gold and silver. –But knowing the real aims of those who crafted the system, we shouldn’t be surprised.

A common argument against using gold as money today is: “There simply isn’t enough of it to go around.” Initially, this argument seems reasonable, but taking a closer look reveals its flaws. The truth is “having more gold” is NOT necessary. Whatever the supply of gold is, the market will set values based on that supply. So, if there are only 10 million ounces of gold circulating in an economy, its price (and purchasing power) per ounce will be higher than if there are 100 million ounces in circulation. This basic economic truth applies to all money, regardless of the form it takes.

Explaining further: The more money there is circulating in an economy (whether we’re talking corn, sheep, gold or paper) the less purchasing power that money will have. For example, if we create a community from scratch and give everyone an equal amount of money, (say $10,000 each) prices for products and services within that community will be set based on the available money supply. If instead we give each person $100,000, the same thing will happen; prices will be set based on the available money supply. If we give them all 10 million dollars, it’s no different…the fact everyone has $10 million in our third example will not make any of them any “wealthier” than if they’d each been given only $10,000. More money chasing after the same amount of products and services only bids prices up.

The same thing happens if you start a community with a set money supply and then begin “inflating” the amount of money in existence. So, the first year everyone starts with $10,000 and prices are set according to the total money supply. If the following year, you give another $10,000 to each person (without an increase in newly available products and services) the flood of new money will only bid prices up.

Not long ago, when somebody used the term “inflation,” they were referring to the actual act of “inflating/increasing” the money supply. Not today. Now the term is almost always used to describe the illness that monetary inflation causes (rising prices.) This works out great for those causing the problem. Instead of blaming the real culprits, the public tends to blame the greedy businessmen who “keep raising their prices.” Well, it isn’t an issue of businesses “raising their prices.” It’s more an issue of the purchasing power of the currency going down. As the value of each Dollar is driven down, the number of Dollars it takes to purchase products and services goes up. (The same is true with any currency; Russian Ruble, Mexican Peso, British Pound, etc. Dilute the value of the monetary unit, and the number of monetary units it takes to purchase products and services will rise.)

I’m getting ahead of the story a little bit, but here is an important point to consider. Imagine for a moment you are an unscrupulous (yet highly intelligent) banker given the legal authority to control the amount of money in the community we just mentioned. Can you think of a way you might be able to use your inflationary power to your advantage? I’ll provide an example.

Let’s say the community begins with a total combined money supply of $50 million. As a banker, you earn money by making loans and charging interest on those loans. So, you begin making loans to the community’s inhabitants. Per the current fraudulent banking system, the money for your “loans” is created out of thin air…they cost you nothing. All you’ve got to do is enter “$100,000” (or whatever the amount may be) into a borrower’s checking account and poof, you just created the money for the loan.

Unfortunately, by creating this money for the loan you also add $100,000 (or whatever the loan amount might be) to the total money supply. You do this over and over and before long, the community’s money supply doubles from $50 million to $100 million. Soon, the effects of inflating the money supply start to take their toll; prices are rising, people who actually saved money prior to the inflation are having “purchasing power” stolen from every dollar they earned, ¹ and people on fixed incomes are finding it increasingly difficult to get by. But you’re doing just fine earning interest on the $50 million in “loans” that you’ve put into the community.

But why stop there? Being the unscrupulous (yet highly intelligent) banker that you are, you have an idea. You notice real estate prices have doubled from the inflation…some might even call the massive rise in prices a “bubble.” You wonder what would happen if you “pop” that bubble. You wonder what would happen if you begin to DECREASE the amount of money in circulation. (But you don’t really wonder…you know exactly what will happen. The purchasing power of each dollar will begin to rise and as a result, prices will begin to fall.)

Specifically, all the real estate prices that had been “bid up” when there was $100 million in circulation will begin to “correct downward.” …Ah, but the mortgages on all those properties aren’t going to “correct downward,” no sir. The people who borrowed $200,000 from you to buy their home when the bubble was at its peak will still owe you $200,000. This despite the fact, with the money supply tightening, they’d be lucky to sell their home for $150,000. And a couple months from now (caught in the ensuing panic of people trying to sell before their home loses more value) they might not be able to sell it for $100,000!

And that isn’t all they’ve got to worry about. Payments on a $200,000 mortgage were much easier to make when hourly wages in the community were based on a total money supply of $100 million. With only $50 million to go around, it’s becoming nearly impossible to earn enough to keep up with (what are now) ridiculously high monthly mortgage payments. And if they are lucky enough to stay employed and earn enough to actually pay off their mortgage, their big reward is they’ll end up paying double what the home is actually worth. Many will have little choice but give up their homes and try to find another place to live. But is that such a “bad deal” for you, the unscrupulous (but highly intelligent) banker who created the money for the loans out of nothing? Probably not.

Let’s see: First you earned millions in interest payments on “loans” that were made with money created out of thin air. Now you get to seize real physical assets (people’s homes) because that “money” (keystrokes in a computer) wasn’t paid back. …And those millions of dollars you earned when people were able to make their payments will now buy twice as much in the economy you just crashed. What a great time to go bargain hunting for new assets, no? Looks like a win/win/win. (Or a lose/lose/lose, depending on which side of the game you’re on.)

Would anyone in their right mind want to give a banker (or bankers) this kind of control over their community’s money supply? No? Ok, then it certainly doesn’t make any sense to give that kind of power to a banker (or bankers) over our entire nation’s money supply. But that is exactly what our elected officials have done.

If you ever find yourself wondering why the bankers got a TRILLION dollar bailout (even when over 90% of the people were against it) now you know. In short: The bankers own the exclusive right to create or destroy our money supply. They OWN every single dollar that exists in our economy...and if the government doesn't keep them happy, they can bring our nation to its knees.

“If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”– Thomas Jefferson

It doesn’t get any more “straight forward” than that.

Returning now to the original point of all this: The argument against gold (that there isn’t enough to go around) is fraudulent. The real reason our banker friends don’t want an honest monetary system (one that prevents them from “creating money out of nothing”) is because of what it would do to their wealth and power. When they insist our “modern economic reality” requires an elastic money supply to function properly (elastic meaning, they can inflate or deflate as much as they like) they are actually telling us the truth. That is, our modern economic reality of endless “bubbles” and “bursts,” steady inflation, bailouts, inescapable debt and the covert transfer of wealth from our hands to the hands of others really does require the system they’ve created to “function properly.” The problem is our modern economic reality is unacceptable. It wasn’t created to serve our needs; it was created to serve the needs of those who lied it into existence.

On the issue of needing an elastic money supply, professor of economics, Murray Rothbard, writes:

“There is no need whatever for any planned increase in the money supply, for the supply to rise to offset any condition, or to follow any artificial criteria. More money does not supply more capital, is not more productive, does not permit “economic growth.”

The idea of making money more elastic isn’t new. Even under the discipline of a gold coin monetary system, unscrupulous individuals figured out how to inflate the money supply. By shaving off a small portion of each gold coin that passed through their hands, merchants and kings were able to amass piles of gold shavings which were then melted down and cast into new coins. By now you can surely predict how this affected the economy. Those who created the money would spend it at “full value” and as the newly created coins began to inflate the existing money supply, (driving down the value of existing coins) the number of coins it took to purchase products and services went up.

“As governments became more brazen in their debasement of the currency, even to the extent of diluting the gold or silver content, the population adapted quite well by simply “discounting” the new coins. That is to say, they accepted them at a realistic value, which was lower than what the government had intended. This was, as always, reflected in a general rise in prices…

Governments don’t like to be thwarted in their plans to exploit their subjects. So a way had to be found to force people to accept these slugs as real money. This led to the first legal-tender laws. By royal decree, the “coin of the realm” was declared legal for the settlement of all debts. Anyone who refused it at face value was subject to fine, imprisonment, or, in some cases, even death.” -The Creature from Jekyll Island (–Emphasis added; the paper money we use today has been declared “legal tender” for a reason.)

The King’s legal tender laws forced individuals to accept coins that they would have otherwise rejected or, at the very least, discounted heavily. As an example, imagine an economy where all trade is conducted using gold coins. Suddenly, the king decides to start minting coins made of wood. By “royal decree” he demands his new one-ounce wooden coins be accepted at the same rate as one ounce of gold. He declares them legal tender. What would the people do?

Well, there is no need to guess. We can simply look at what citizens actually did do in response to the first legal tender laws. They began hoarding their truly valuable gold coins. After all, if you were forced to accept junk coins as payment, would you (out of the “kindness of your heart”) continue making your payments in gold?

The same thing happened in America in the 1960s when silver dimes, quarters and half-dollars were replaced with new coins made out of a mixture of copper and nickel. Within months, a good percentage of the silver coins had already been stashed away. Sure, the new “cupronickel” quarters said they were worth the same as the old quarters (.25 cents) but that didn’t mean they really were.

To put it in perspective; a role of 40 quarters has a stamped face value of $10.00 whether the quarters are made out of silver or the cupronickel of today. However, the real value of a role of silver quarters (based on the weight of the silver alone) is currently over $100.00. So which would you rather have? Would you trade a role of silver quarters for a role of cupronickel quarters?

Of course, today our rulers have more sophisticated ways to debase our currency. Rather than shaving coins, or replacing solid coins with “plated coins,” or intentionally diluting the purity of the gold or silver content, they instead achieve what they want through our modern banking system. Alan Greenspan spoke out against the consequences of this practice in 1966. Ironically, about 20 years later, he was elected Chairman of the Board of Governors of the Federal Reserve! “Even the wisest of men can be corrupted by power and wealth.” –Griffin. Nevertheless, in 1966 Mr. Greenspan laid out the truth in no uncertain terms. He wrote:

“The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit…

The law of supply and demand is not to be conned. As the supply of money…increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value…

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. …Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

And on that note, even if gold isn’t the absolute perfect choice for our monetary system, it surely beats the blatant fraud and exploitation inherent in the system we have today.

So far we’ve seen how trade first began as barter, and from barter came the discovery that certain commodities were always in demand. Those commodities, (sheep, wheat, corn, etc.) became the first form of commodity money; widely accepted as payment for -other products and services. Commodity money evolved, eventually -leading to the use of metal coins and then finally to the use of gold (and silver) as the most widely sought and accepted coins.

But these coins also had their limitations. First, they were heavy. Today, we take for granted that we can carry $1,000 in paper money as easily as we can carry $1. This wasn’t the case in a silver or gold coin economy…$1,000 worth of coins weighed 1,000 times more than $1 worth. Also, if you accumulated any significant amount of wealth, you had to seriously worry about how to keep that wealth “safe.” (Lugging a large quantity of gold and silver around with you wasn’t practical and trying to find a truly secure hiding place wasn’t so great either.) Receipt money emerged as the solution to these problems. Receipt money, as it first began, is an example of a legitimate form of paper money. Here is how it came into being.

Receipt Money is born

Goldsmiths handled large stockpiles of gold and silver in their trade. Logically they needed a safe place to store those stockpiles and, for this purpose, they built very strong and well-guarded vaults. Citizens eventually figured out there was no need to worry about hiding their own coins because, for a small fee, they could simply store them in the goldsmith’s vault. The goldsmiths happily agreed to the arrangement as it was a way to earn some easy extra money.

As a citizen renting space in the goldsmith’s vault, you would take in your supply of gold coins (say $1,000 worth) and you would be given a receipt as proof of your deposit. The receipt would state the value of the gold coins you’d deposited (in this case $1,000) and it would be stamped payable on demand. This meant, whenever you decided to present the receipt to the goldsmith, he was required to take it from you and, in exchange, give you back your gold. However, it was rare for people to withdraw their gold. (They would just need to find another place to store it if they did.) Instead, most just continued making deposits and collecting receipts as proof of each deposit they’d made.

Soon enough everyone was walking around with these paper receipts in their pockets. Because the paper receipts literally were “good as gold,” people began using the receipts to purchase products and services. As an example, if you wanted to purchase an item for $1,000, rather than go to the goldsmith to withdraw your gold coins you’d simply give the seller your $1,000 receipt. This not only made it easier on you, it was easier on the seller too. (If you had paid in gold coins, chances are the seller would have just taken the coins right back to the goldsmith for safe storage.)

This paper “receipt money” (100% backed by gold) was a huge improvement in the evolution of money. It was improved even further when different denominations of receipts where made available at the time of deposit. For instance, if you brought $1,000 worth of coins to the goldsmith, you could now ask for (10) $100 receipts or (20) $50 receipts (etc.) instead of just a single $1,000 receipt. This of course led to the receipts themselves being exchanged for different denominations. (If you had a $100 receipt, you could easily exchange it for (10) $10 receipts, so on and so forth.) It was honest money at its best. …But it didn’t last long.

Fractional Money is born

Receipt money made trading with others easier than ever. It was light, easily divisible, didn’t need food or water, never “went bad,” and was backed 100% by a commodity preferred by all. As a result of its use, communities flourished and individuals prospered. But just as so many before them, the goldsmiths could not resist their temptation to corrupt the money supply in pursuit of illegitimate profits.

As noted, it was very rare for individuals to “cash in” their receipts and withdraw actual coins. The goldsmiths realized at any given time, 90% or more of all coin deposits were left untouched. This sparked an idea. Why leave all that gold gathering dust in the vault when instead it could be loaned out (at interest) to earn a profit? Where once the goldsmith was limited to loaning out what belonged to him (a tiny amount of what was held in the vault) he now could earn ten times as much, or more, loaning out what belonged to others. It would be a profitable little secret known only to him and others in his trade.

This of course was pure fraud. Every coin in the vault had an equivalent “receipt” which was held by the coin’s rightful owner. Those who had accepted these receipts in exchange for their coin deposits and those in the community who accepted these receipts as payment for their products and services believed them to be no different than receiving the actual coins themselves. Instead, unbeknownst to the receipt holders, the receipts they held were now only backed by a fraction of the value stamped on their face. What began as “receipt money” had now evolved into a new form; it was now fractional money.

To easily understand the problem, imagine I ask you to sell me a one-ounce gold coin. To purchase the coin, I pay you with receipt money equal in value to the coin itself. (The receipt represents one ounce of gold sitting safely in the goldsmith’s vault – or so you think.) In reality, what I’ve given you is a receipt that is only partially backed by gold…no different than if I traded you half of a coin for a whole coin. Would you knowingly agree to such a “deal?” Would you ever trade half a coin for a whole coin? Of course not.

But you would agree to the deal if you didn’t know any better, and that was the problem. Nobody knew the coins (supposedly backing each receipt 100%) were being loaned to others. And when the people finally did discover their coins were being loaned (without their permission) they still didn’t comprehend the seriousness of the problem. Sure, they were outraged, but not because they understood the dangers or inherent fraud of fractional money; no, they were upset because the goldsmiths were getting rich loaning out their coins!

Well, making tons of money had never been so easy for the goldsmiths. The last thing they wanted was to see it end. So, to calm their depositors (and continue earning big bucks loaning coins that didn’t belong to them) they made the following offer: Depositors could now store all their coins in the vault free of charge AND (as if that generous offer weren’t enough) depositors would also be paid a percentage of the value of the coins they kept in storage! (Let’s say 5 %.)

This was a very clever solution. Not only would tons of gold start flowing into the goldsmith’s vault, it was even less likely that depositors would ever withdraw any of their coins because to do so would only reduce their own earnings.

The average citizen’s view was a little less sophisticated than that of the goldsmith. They were certain they’d hammered out a great deal. (1) They’d get to continue using their convenient paper/receipt money, (2) they’d no longer have to pay a storage fee for their coins AND (3) they’d earn some extra money on the side. The goldsmith, all of a sudden, “wasn’t such a bad guy after all…”

While it’s true the people had solved the problem of “the goldsmith earning all the money” on their coin deposits, two bigger problems (the inflation of the money supply and the threat that posed to their wealth) had not been solved. Nor were either of these two problems understood by the general public. Let’s briefly cover them both:

Inflation

Assume a depositor places $1,000 worth of gold coins in the goldsmith’s vault and, in exchange, receives $1,000 worth of receipts. The community’s money supply will not change as a result of this transaction. (Where there once was $1,000 in gold coins circulating in the economy, there is now $1,000 in receipts. And if the receipt holder returns to withdraw his coins, he must surrender his $1,000 worth of receipts to the goldsmith. Any way you slice it, there will be either $1,000 in gold coins circulating or $1,000 in receipts, not both.)

However, under the “fractional money” system something different happens. Our depositor still comes in with $1,000 in gold coins, and he still receives $1,000 in receipts. No problem there. But an hour later, another man comes in. He doesn’t want to make a deposit; he wants to borrow $1,000. The goldsmith agrees to the loan and issues the borrower $1,000 worth of NEW receipts. In our first example the money supply did not change, but in this example the money supply has doubled. (There is now $2,000 worth of receipts circulating in the economy backed by only $1,000 in gold coins.)

Threat to Depositor’s Wealth

Aside from the inflation, there is also another big problem. Say the borrower takes his “newly printed” $1,000 worth of receipts and spends them at a local store. And say the store owner decides he’d rather have the actual gold coins instead of the paper. No problem there. The store owner can take the receipts to the goldsmith, cash them in for coins and be on his way.

But what happens if an hour later the man who made the original deposit shows up to withdraw his coins? Let’s say he decided he’d rather just store his gold himself. Too bad for him, his gold walked out the door an hour earlier. This is a highly simplified example, but it illustrates what happens when a banker/goldsmith makes more promises to “pay on demand” than he can honor. The banker/goldsmith cannot produce the coins, he is bankrupt, and he takes the depositor down with him.

Now in the simplified example above, the goldsmith got into trouble by pushing his reserves down to 50%. (The goldsmith held $1,000 in coins to “back” the $2,000 in receipts he issued. That puts the fraction of reserves at 50 %.) However, it’s very unlikely he’d ever get into trouble at that level.

In reality, there are hundreds or thousands of depositors and the vast majority of them are happy to leave their coins in the vault earning interest. Additionally, those who receive the receipts in commerce aren’t likely to come in and request coins either -because the paper receipts are much more convenient to carry and use. The goldsmith knows this. He’s seen first hand that customer demand for actual coins is very low. So what inevitably happens is, the goldsmith/banker continues to push down the reserves more and more; always walking closer to the edge of insolvency. Why? Because every time he “creates more receipts” and loans them out, he earns more money.

Returning to our simplified example, consider the following: A man deposits $1,000 in coins with the goldsmith and receives $1,000 in receipts. In addition, the goldsmith has agreed to pay the man a percentage of the value of his deposit. We’ll assume that percentage is 5% per year. To earn the money to pay this 5%, the goldsmith prints up an extra $1,000 in receipts and loans them out at say 8% interest. That leaves the goldsmith a profit of 3% on money he “created out of nothing.” (The goldsmith earns 8% on the newly created receipts; he pays the original depositor 5%, and that leaves a 3% profit.)

But in this example, the goldsmith has only doubled the money supply. He still has 50% reserves and that is far more than he needs, so the game continues. What if he quadruples the money supply? Instead of earning just 3% per year on the original $1,000 deposit, the goldsmith’s profits soar to 19%! That is over 6 times as much profit as he earned originally, and he is still only down to a 25% reserve ratio.

Here is the math: Instead of creating a single $1,000 loan, this time the goldsmith creates a total of three $1,000 loans. Add the original $1,000 worth of receipts (issued to the depositor) to the $3,000 worth of receipts loaned to borrowers, and you get $4,000 in total receipts backed by only $1,000 worth of coins. (That puts the reserve ratio at 25%.) As in our first example, the first $1,000 loan only produces a profit of 3% for the goldsmith (8% minus 5% paid to the depositor.) However, EACH of the next two loans generates a full 8% for the goldsmith. So, 3% profit on the first loan, plus 16% total on the next two loans means the goldsmith earns 19% on money he created out of nothing.

But the goldsmith still has far more reserves than he feels he needs. From what he can tell, he thinks he can push his reserves down to 10% and still be OK. So he decides to expand the money supply some more, A LOT MORE. If he multiplies the money supply by 8 times, he still will have reserves of 12.5%, and his profits will soar to 51%! ² Sure, the money supply is being diluted, inflation is wreaking its havoc, and the depositors are blissfully unaware how close they are to losing everything; but the goldsmith is literally making money by simply “creating it” out of thin air! Who would want to interrupt something as marvelous as that?

If the goldsmith can charge more for his loans, all the better. Imagine how much more exciting things become. Even a small increase in the loan rate increases profits significantly. For instance, with his reserves at 12.5% and loaning at 8%, he earns more than a 50% annual profit on every $1,000 of his depositor’s money. But if he loans at an interest rate of 10%, he earns more than 60%! And at 15%, he earns nearly 100%!! At that rate, for every $1 million he attracts in deposits, he can earn nearly $1 million for himself!

But wait; maybe he can inflate the money supply even more. Maybe he can get by with driving reserves down to only 6.25%, more than DOUBLING his profits yet again. Maybe 3%, maybe even 1%!!! …The game is intoxicating and it always leads to disaster for depositors. Inevitably, the scam collapses when people realize the receipts they’re holding are only worth a small fraction of what is printed on them. A one-ounce gold receipt might only be backed by a tenth of an ounce of gold (or less.) When the truth is discovered, a “run on the bank” ensues and only the first few in line are able to withdraw gold. All the rest, the vast majority, are left holding worthless paper.

One would think, after witnessing the aforementioned disaster unfold repeatedly, that bankers would realize the error of their inflationary ways. One would think they’d devise an honest monetary system. A system that permits them to earn legitimate profits without exploiting (if not completely ruining) the people who depend on it. One would think… Instead, they set out to devise a sort of “banker’s utopia” where they could expand their fraud, operate with ZERO reserves of gold and silver, and shift any losses they might incur on to others. And that brings us to the final form of money we’ll be discussing in this chapter: Fiat money.

Once the idea of fractional money is accepted, the fraction is inevitably pushed down to zero, at which point the money becomes nothing more than pure fiat. Fiat money is money backed by absolutely nothing. It’s the equivalent of the “wooden coins” mentioned earlier; inherently worthless. And because fiat money is inherently worthless, the people must be forced to accept it via legal tender laws.

Fiat Money

“The American Heritage Dictionary defines fiat money as “paper money decreed legal tender, not backed by gold or silver.” The two characteristics of fiat money, therefore, are (1) it does not represent anything of intrinsic value and (2) it is decreed legal tender. Legal tender simply means that there is a law requiring everyone to accept the currency in commerce. …when governments issue fiat money, they always declare it to be legal tender under pain of fine or imprisonment. The only way a government can exchange its worthless paper money for tangible goods and services is to give its citizens no choice.

…The first recorded appearance of fiat money was in thirteenth century China, but its use on a major scale did not occur until colonial America. The experience was disastrous, leading to massive inflation, unemployment, loss of property, and political unrest.” -The Creature from Jekyll Island

The first paragraph above provides a perfect definition of fiat money, so let’s expand on the second paragraph; the track record of fiat money in colonial America.

Fiat money first appeared in Massachusetts following a failed military campaign against Quebec in 1690. Previous expeditions had been successful, but this time Massachusetts had seized nothing of value and, as such, could not pay her troops. Raising taxes would have been very unpopular; a risky proposition. However, ignoring the obligation to pay her troops what they’d been promised was even riskier. Desperate to discharge her debt, the government of Massachusetts decided to simply print the money. Other colonies watched in amazement and before long, they too were enjoying the magic of printing their own cash (and the citizens enjoyed the consequences.)

As the printing presses inflated the money supply, legal-tender laws were instituted to ensure the worthless paper was accepted. Predictably, gold and silver coins disappeared from circulation in the colonies. (Why pay with real money when all you could expect was fiat paper in return?) The only time gold and silver coins were spent was with foreigners who demanded real money as payment for their products and services. This steadily drained the colony’s total supply of gold and silver. As the supply of gold and silver dwindled, international trade nearly ceased. (Foreigners had no interest in trading their products for fiat paper; who could blame them?)

As the inevitable problems of an inflationary “fiat money system” began to surface, the colonial governments took steps to fix the problems. In 1703, South Carolina threatened citizens who refused its paper with fines “double the value of the bills so refused.” That didn’t work, so in 1716 it increased fines to “treble the value.” Some colonies began printing new money to soak up some of the old. For instance, in 1737 Massachusetts traded its citizens $1 of new fiat money for $3 worth of their old money, with the added promise the new money would be fully redeemable in gold or silver in five years. (A promise that wasn’t kept.)

“By the late 1750s, Connecticut had prices inflated by 800%. The Carolinas had inflated 900%. Massachusetts 1000%. Rhode Island 2300%. Naturally, these inflations all had to come to an end and, when they did, they turned into equally massive deflations and depressions. It has been shown that, even in colonial times, the classic booms and busts which modern economists are fond of blaming on an “unbridled free market” actually were direct manifestations of the expansion and contraction of fiat money which no longer was governed by the laws of supply and demand.” -TCFJI

This downward spiral was temporarily brought to a halt by, of all things, British intervention. The Bank of England, using its influence with the Crown, sought to force the American Colonies to use its paper money. The Bank got its way in 1751 when the British Parliament began putting heavy pressure on the colonies to withdraw their currency from circulation. The pressure was increased until, in 1764, the British Parliament passed the “Currency Act” which made it illegal for the colonies to issue paper currency in any form.

Despite major opposition, the Currency Act actually ended up working to the benefit of the colonies. Rather than accept Bank of England money as a primary medium of exchange, the colonists simply returned to a true commodity-based monetary system. The remaining gold and silver coins began to circulate again and other commodities, like tobacco, also served as money. Returning to an honest money system produced immediate results.

“Trade and production rose dramatically and this in turn attracted an inflow of gold and silver coin from around the world, filling the void that had been created by years of worthless paper. …After the colonies had returned to coin, prices quickly found their natural equilibrium and then stayed at that point…” -TCFJI

Unfortunately, the recovery was short-lived.

The Colonies Declare Their Independence – Fiat Money Returns

Wars are very expensive and it’s rare for them to be fought using existing government funds. The American War for Independence was no exception. Faced with a shortage of money, the leaders of the revolution had the usual options available to finance the war:

•  They could look to borrow the funds, but that would put them at the mercy of their lenders. Even if the colonies were heavily favored to win their battle against Great Britain, there would be limits to how much lenders could produce or would be willing to risk. –And, up against the most dominant military in the world, the colonies were anything but “heavily favored to win.”

•  They could try to raise the money via taxation but (as is often the case) taxes sufficient to fully fund the war would have been severe. Support for this approach would have been very difficult to sustain.

• Finally, there was the path of least resistance, the printing press. Arguably, this approach ends up costing the most, but as G. Edward Griffin explains:

“By artificially increasing the money supply…the real cost is hidden from view. It is still paid, of course, but through inflation, a process that few people understand.” -TCFJI

Between 1775 and 1779, the central government expanded the total money supply from just $12 million to a whopping $425 -million. That’s an increase of more than 3,500%. In addition, the individual states were busy doing the same thing. It’s been estimated, in just five years, the total expansion reached 5,000%.

“The first exhilarating effect of this flood of new money was the flush of apparent prosperity, but that was quickly followed by inflation as the self-destruct mechanism began to operate. In 1775, paper Continentals were traded for one dollar in gold. In 1777, they were exchanged for twenty-five cents. By 1779, just four years from their issue, they were worth less than a penny…it was in that year George Washington wrote, “A wagon load of money will scarcely purchase a wagon load of provisions.” -TCFJI

Fiat money might provide instant purchasing power for those who create it, but it does so at the expense of those who are forced to use it. Every dollar worth of products and services it buys is extracted from the citizens via the hidden tax of inflation. As stated in chapter one, it makes little difference whether the government takes $3,000 worth of your purchasing power by direct taxation, or takes $3,000 of your purchasing power through an inflationary policy; the effect on your wealth is the same. You’re $3,000 weaker in either case. That said, there are many aspects that make inflation a far more insidious tax:

• Those on fixed incomes or who have actually saved their money are hit the hardest.

• Whereas normal taxation cannot be hidden from the people (placing firm limits on its use) inflation allows purchasing power to be confiscated secretly. Like theft, there isn’t even the illusion of an agreement between those who are taking the money and those who are surrendering it. –Purchasing power taken from the citizenry in this fashion is abusive in and of itself. That so few understand the process only makes it easier for the abusers.

• So long as the citizens are forced to use the fiat currency, there is nothing they can do to stop the confiscation of their money. $10,000 under the mattress today might only be worth $5,000 in actual purchasing power next month. (Consider the case of the Continentals. At the end of four years, what began as $10,000 worth of purchasing power deteriorated to only $100! That’s no different than looking under your mattress to find somebody took $9,900 of what you had saved.)

The massive inflation caused economic chaos and that was soon followed by attempts to fix the problems. (Sound familiar?) As prices went through the roof ($5,000 for a pair of shoes, $1 million for a suite of clothes, etc.) the colonies instituted wage and price controls. When that wasn’t enough, severe legal tender laws were enacted to further encourage people to be good patriots. According to this law, refusing the worthless currency was tantamount to treason:

“If any person shall hereafter be so lost to all virtue and regard for his Country as to refuse to receive said bills in payment…he shall be deemed, published, and treated as an enemy in this Country and precluded from all trade or intercourse with the inhabitants of these colonies.” -TCFJI

And as night follows day, the chaos of inflation was followed by the chaos of deflation. As the bubble burst, unemployment, bankruptcies, foreclosures, even riots and insurrection, appeared in its wake. The full costs would finally be counted.

“Prices fell drastically, which was wonderful for those who were buying. But, for the merchants who were selling or the farmers who had borrowed heavily to acquire property at inflated wartime prices, it was a disaster.

The new, lower prices were not adequate to sustain their fixed, inflated mortgages, and many hard-working families were ruined…Idleness and economic depression also led to outbursts of rebellion and insurrection. George Washington wrote: “If…any person had told me that there would have been such formidable rebellion as exists, I would have thought him…a fit subject for a madhouse.” -TCFJI

When our founding fathers drafted our Constitution, the pain and suffering of fiat money was still fresh in their minds. They firmly resolved to rid our nation of it once and for all. As a result, the United States of America became the most powerful economic force the world had ever seen.

But the wisdom of our nation’s founders was lost with the passage of time, allowing those who benefit from “fractional reserve” and / or purely “fiat / debt money” systems to steal their way back into power.

Today, there isn’t a single ounce of gold or silver backing our currency…it is pure fiat money. But it isn't just fiat money, it is actually worse. How? Today, ALL of our dollars must first be "borrowed" into existence from the bankers. In other words, every single dollar in circulation is inextricably tied to debt. What we’re forced to use today is WORSE than fiat money (money created out of thin air) it is debt money (DEBT created out of thin air.)

Our entire monetary system, as it now stands, is based on nothing but debt. Every physical dollar in existence (as well as every digital bank account balance) came into existence as a loan to somebody. So long as our entire money supply is made up of this debt money, the bankers are guaranteed to earn interest on every single dollar, every moment it exists. It also means our debt is inescapable. To pay off every loan would reduce our "money supply" to zero…it can’t be done.

“Robert Hemphill was the Credit Manager of the Federal Reserve Bank in Atlanta. In the foreword to a book by Irving Fisher, entitled 100% Money, Hemphill said this:

“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. This is a staggering thought. 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 situation is almost incredible—but there it is.”

So the bankers not only profit from this debt money system, they’ve structured their business in such a way that we (operating within the rules of the system) can never escape it. Who in their right mind would hand over this kind of power and control to an unelected group of financial elites? It’s nothing short of economic slavery.

It’s important to remember, we’re in this mess not just because of the “unscrupulous but highly intelligent” individuals who conspired to gain control of our nation’s money supply, but also because of our elected officials who handed it over and continue to support (and benefit from) the arrangement.

Footnotes:

1.   If it costs $1.00 for a loaf of bread and you have saved $100.00, you might reasonably assume that you’ve got enough money to buy 100 loaves of bread. However, if due to inflation the cost of bread is driven up to $2.00 per loaf, that $100.00 under your mattress will now only buy half as much. (The purchasing power of your savings has been cut in half.) The end result, regarding what you “have the money to buy,” is no different than if somebody stole $50.00 of your savings. Click Here to return to previous point on page

2.   The math: The original depositor is issued $1,000 in receipts for his gold. $7000 in additional receipts are created for the purpose of lending. The first loan of $1,000 generates only 3% profit, but the remaining 6 loans earn a full 8% each! This adds up to a total profit, on money created out of nothing, of 51%! (3% on the first loan + 48% total on the other six.) Click Here to return to previous point on page

-End of free excerpt

Note: For more details on how the Federal Reserve System “creates money out of thin air” and then “loans it” to the rest of us, and for more information on how this system harms our country (and the world), see: Dishonest Money: Financing the Road to Ruin