Jim Rogers on the Next 10 Years

I’m moving to China … possibly to live in a bunker. At least that was my inclination after listening to a presentation by Jim Rogers yesterday.

Now don’t get me wrong – Mr. Commodities wasn’t all doom and gloom. In fact, his talk was both informative and highly entertaining. But Rogers doesn’t sugarcoat things – he’s very matter-of-fact about his concerns and projections for the future. And most of them don’t bode well for the U.S.

I’ll be posting an interview with Jim Rogers on the site in the coming week, but for now, I just wanted to offer some highlights from his speech at ETF Securities' mini-conference and the Q&A that followed.

1. The 21st century belongs to China

According to Rogers, the 19th century was the era of the British Empire and the 20th century was the U.S.’ heyday. But the 21st century is China’s (though the rest of Asia is definitely going to get a boost too).

The reasons for this are many, but some points brought up by Rogers include the following:

1. The Chinese want to live like we do;
2. They are more eager to work;
3. They are better at saving;
4. There are 1.5 billion Chinese citizens (and 3 billion people in all of Asia), and we owe them money. They are, according to Rogers, “among the best capitalists in the world.”

There will be some setbacks, of course, Rogers says, but these are opportunities. “If you see setbacks in China, you should pick up the phone and get more involved,” he advised, before adding his favorite refrain, “The best advice of any kind that I can give you is to teach your children and grandchildren Chinese.”

China’s path to world domination started with Deng Xiaoping’s capitalist programs in 1978, and there hasn’t been any looking back since. Rogers views China’s dominance as nigh-on unstoppable except for one little thing: its water problem. There are parts of the country that are running out of water, and when the water disappears, Rogers points out, so does civilization. However, the country is acting aggressively to combat the problem, and he doesn’t view it as that much of a threat.

2a. Jim Rogers is not a Ben Bernanke fan

Yep, it’s a fact. No “Team Bernanke” shirts for Jim Rogers (who said to scattered applause during the Q&A session that if he was in charge of the U.S. economy he would “abolish the Fed and resign.”).

Rogers is appalled by the government’s actions – Bernanke’s in particular. The U.S. government’s strategy calls for the debasement of the dollar, he says, calling it a “horrible policy.” While he concedes it can work in the short term, it NEVER works in the mid- or long-term.

“He’s going to run those printing presses until we run out of trees, because that’s the only thing he knows,” Rogers said of Bernanke.

Add that on top of the country’s rapidly growing astronomical debt, and Rogers believes you’ve got a recipe for disaster.

2b. The U.S. dollar is screwed

Consider this a corollary to point 2a. Its status as a reserve currency is teetering on a precipice, in Rogers’ opinion, and he’s not alone. In fact, so many people are selling dollars right now that he’s sitting tight, waiting for a possible – and ultimately unsustainable – rally in order to exit the market. Of course, if it fails to rally and just drops again …

“I’ll just have to panic and sell like everyone else,” Rogers said.

Read the rest of the article

im Rogers has taught finance at Columbia University's business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.

It wasn't Muslims

It wasn't Muslims who trained their cameras on the World Trade Center Towers prior to the first aircraft impact

It wasn't Muslims who trained their cameras on the World Trade Center Towers prior to the first aircraft impact, who danced and celebrated with high fives prior to the second impact as most onlookers still believed it had been a terrible accident rather than terrorism, and who were caught with foreign passports, $4,700 in cash hidden in a sock, maps highlighting certain places in the city, and a van that tested positive for traces of explosives; it was Israelis Sivan Kurzberg, Paul Kurzberg, Yaron Shmuel, Oded Ellner, and Omer Marmari, several of whom have been confirmed as Mossad agents, as part of their job in "documenting the event".

It wasn't Muslims who were caught on 9/11/01 operating in teams with vans full of explosives, including one team who attempted to blow up the George Washington Bridge with a truck packed with tons of explosives, and another who blew up a van between 6th and 7th on King Street with a mural painted of a remote controlled airplane diving into New York and blowing up; it was Israelis, which is why the authorities did their best to ignore and bury these reports which included a suspected van bomb driven into the WTC basement and exploded to weaken the structure.

It wasn't Muslims who set up an "al Qaeda cell" in Palestine; it was the Israeli Mossad.

It wasn't Muslims who were caught shortly after midnight on May 7, 2002 very close to the Whidbey Island Naval Air Station, Oak Harbor, Wash., (where the Navy conducts explosive ordnance training for bomb disposal mobile units to the consternation of local marine life) with a rental truck that tested positive for TNT and RDX plastic explosives; it was Israelis whose cover story was of "delivering furniture" but regarded by authorities as dubious because of the early morning hour, and the authorities' subsequent claim that the dog's reaction and initial tests for explosives were wrong is so full of holes that it merely demonstrates the power of the Israeli lobby.

It wasn't Muslims who provided two hours' advance warning of an attack on the World Trade Center via an instant messaging company based in Herzliya; it was Israelis.

It wasn't a Muslim who fled the US on September 14, 2001; it was Dominick Suter of "Urban Moving Systems" who fled to Israel.

It isn't Muslim countries that have a massive spy ring in the USA capable of tapping into much of the telecoms network and using information obtained to blackmail Americans; it is Israel.

It wasn't Muslims who received advance warning on Monday September 10, 2001, against flying the next day; it was San Francisco Mayor Willie Brown, and a group of top Pentagon officials.



It wasn't Muslims who acquired a 99-year lease on the World Trade Center's Twin Towers, Buildings Four and Five and approximately 400,000 square feet of retail space, and insured for billions of dollars against terror attacks a mere six weeks before terror attacks did in fact occur, and then employed (to press for the insurance claim) a 'structural engineer' who misleadingly asserts that steel loses half its strength at "400 degrees"; it was - in a deal negotiated by Lewis Eisenberg of the Port Authority - Benjamin Netanyahu's (and Ariel Sharon's and Ehud Barak's) friend Larry Silverstein and his partner Australian billionaire and "Holocaust survivor" Frank Lowy who fought "in the Jewish underground", was embroiled in a high-level bank corruption scandal with Israeli Premier Ehud Olmert and found to be making payments to Lord (Michael Abraham) Levy who was arrested several times in relation to a "cash for honors" scandal, Levy being a "tennis partner" and advisor of Tony Blair.

It wasn't a Muslim who went on TV within hours of the attacks to tell everyone that "It... certainly has the fingerprints of somebody like bin Laden" and the World Trade Center had collapsed because of "the velocity of the plane" and "intense heat probably weakened the structure as well", and who reportedly on that very day advised the White House to take Cipro, an effective antibiotic against anthrax, seven days before the commencement of an anthrax letters terror campaign targeted at Democratic U.S. Senators and news media offices, who on 9/11/01 was a managing director of the crisis and consequence management group at Kroll Associates, who was an advisor to the Council of Foreign Relations (CFR) regarding "epidemiological surveillance" and national security advisor at the National Institute of Health (NIH), and who gave his 'friend' John O'Neill a job as Head Of Security at the World Trade Center; it was Jerome Hauer. (The same former FBI agent John O'Neill that had been sent home from Yemen when he was investigating the attack on the USS Cole and had developed leads that pointed towards Israeli involvement)

It wasn't Muslims who were caught and arrested inside the Mexican Congress chamber on October 10, 2001 in possession of guns, grenades, dynamite, detonators and wiring while posing as "press photographers"; it was Mossad agent Salvador Guersson Smecke and Israeli illegal immigrant Saur Ben Zvi at the very time that Zionists would obtain maximum benefit from a false-flag terror attack that would mobilize support for the war on "Muslim terrorists" in Afghanistan that had been launched only three days previously.

Rich Uncle Pays Your Mortgage

The economic meltdown has put the country on the fast track to socialism, but through a series of tiny steps. One need only to examine the supposed victories in the war on depression to see how this is happening. The latest is the claim that the Obama administration has successfully renegotiated many mortgage obligations in a way that allows people to keep their homes.

Before looking at the program, we have to ask, is this really a victory? If people are in over their heads, drowning in debt, it is a far wiser path to lift them out rather than hand them a snorkel through which to breathe. The answer for most of the sad cases of people with homes larger and more expensive than they can afford is to move to a new abode. I don’t know why or how such thoughts became unthinkable: we not only have a right to a home now, but we have a right to live forever in a discounted home.

If people would move to cheaper places, their debt problems would be solved in shorter order. If many people bailed out of expensive homes, their prices would go down and approach reasonable levels, and perhaps then the people who are living beneath their means could actually ramp up their standard of living by buying from the glut out there. And isn’t this something that has been a national priority for several decades, providing better housing for the poor? Here it is within our grasp: let the prices fall!

In any case, how was the Obama administration able to accomplish the miracle of letting people continue to live in lifestyles they can’t afford? They offer to pay $1,000 for every loan that a mortgage company could renegotiate. Why didn’t they just agree to pay the mortgages? It’s unclear. Seems like that would have been an easier path from A to B. Instead, they wanted the mortgage companies in on the deal.

And where is this money coming from? You can use all the fancy words you want, but in the end government has no money. Everything government has it gets from you. That is the most fundamental lesson of political economy, without which no clear thinking takes place. And yet it seems to be the most covered-up truth of our times. So if you know this one point, you will be leagues ahead of almost everyone else in thinking about these issues: one way or another, you will pay.

How will you pay? It can happen through the old-fashioned method of taxation. Or it can happen through more debt that will have to be paid in the future. Or it can happen when the Fed creates new money that eventually shows up in the form of dollar depreciation, and this is the most insidious method there is. This is, of course, how the current crew believes it can make the magic happen. It’s a form of counterfeiting.

It’s not compassion to steal from some to give to others. It is using violence to accomplish your ends, which, in this case, only delays necessary pain. No new wealth is created. It is merely shuffled around from spot to spot by force. It is you who are being robbed to pay for the mistakes of these homebuyers. Even Americans who didn’t participate in the boom are being punished, made to cover the bad purchases of others.

Thus can we see that there is no amazing thing taking place here; no genius policies nor dazzling acts of the supernatural. This is old-fashioned redistribution, to sustain the unsustainable.

It’s odd to watch the ethos of public affairs these days. Everyone seems to agree that mistakes were made in the past. People lived beyond their means. The boom created nutty financial arrangements in which people with no money and no jobs and no prospect of paying were able to enter into massive credit obligations lasting decades. Everyone seems to understand that there is something wrong here.

Where the split occurs is what to do about it. The party in power is under the belief that the way to fix a problem is to continue the practices that caused the problem in the first place, and delay for as long as possible the correction that must take place. On the other side are people who believe that reality needs to reassert itself, and the sooner the better.

Take note that I’m not talking about the need for blood in the streets or for lives to be shattered. I’m talking about moving to a different neighborhood, possibly renting rather than “owning,” and generally downscaling. Is that really too much to ask? Not really, so the question appears: why is the government not insisting on this? I think the answer comes down to the banks and institutions that continue to hold bad assets. They don’t want them repriced because that would be liquidation, and they are powerful enough to concoct policies that prevent that, for now.

So what appears to be this glorious favor to the American middle class is in actual fact another form of bailout for the banking system, however temporary it might be. But mark my words: home prices will fall, and these mortgages will eventually be re-priced. There is not enough financial trickery available to postpone this. And when stage two of the great meltdown happens, we will once again be suffering regret. Then there will be yet another chance to do the right thing.

Let the market speak. It is the only institution that seems willing to tell us the truth anymore.

by Lew Rockwell

Goldman Sachs 2009 bonuses to double 2008’s; $23 billion could send 460,000 to Harvard, buy insurance for 1.7 million families

Yesterday, we brought you the insurance company that wouldn't insure a 17-pound infant because he was too heavy. Today, we bring you the investment bank that manages to double its bonuses during the worst recession since the Great Depression.

On Thursday, Goldman Sachs will announce the firm's bonus payments for 2009. Analysts expect the bonus pool to mushroom to $23 billion -- double the bonus pool paid to employees in 2008. Earlier this year, Goldman Sachs said that it had put aside $11.4 billion for bonuses during the first half of the year.

“The absolute size of compensation payouts will rise significantly,” Keith Horowitz, an analyst at Citigroup, wrote in a note to clients two weeks ago, highlighted by Andrew Sorkin in The New York Times' dealbook column Tuesday.

How much is $23,000,000,000?

For one thing, it's enough to send 460,000 full paying students to Harvard University for one year, or 115,000 for four years.

It's enough to pay the health insurance premium for the average American family ($13,375) 1.7 million times.

It's enough to upgrade 191 million computers to Windows 7 operating system (priced at $119.99), or to buy 115 million iPhones at $199.99 (provided the recipient was willing to sign a two-year contract).

Or, apparently, it's enough to reward the employees of Goldman Sachs for a bonanza trading year, at a firm where average employee compensation was recently $622,000 -- and likely to be greater this year.

The $23 billion figure could leave some American taxpayers woozy -- the US government bailed out Goldman Sachs with a multi-billion payment last year, which the firm has since repaid.

But while Goldman is likely to pay its biggest bonuses ever to employees, the firm pays very little in taxes worldwide. In 2008, the company was said to have paid just $14 million in taxes worldwide, and paid $6 billion in 2007.

The firm's corporate tax rate? About 1 percent. According a prominent tax lawyer, “They have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions.”

Sorkin says Goldman's CEO is trying to hold off criticism by making a big charitable donation.

"Now there’s talk inside Goldman that it is considering making a huge charitable donation — perhaps more than $1 billion — as a way to help deflect the criticism," Sorkin says. "Such a donation would be a welcome gesture that would no doubt benefit many needy organizations. But it would most likely be seen for what it is: a one-time move to draw attention away from where most of the money is really going. A large charitable donation also raises questions about the company’s fiduciary duty to its shareholders; it could be seen as giving away profits that ostensibly belong to them."

By John Byrne

Rep. Alan Grayson: “Hank Paulson Had a $700M Conflict of Interest”

Federal Reserve Exposed by Richard Belzer on Bill Maher

Check this link ..... http://bit.ly/h3gDl

Three heroes of 9/11 die of cancer in five days

Robert Grossman, a police officer who worked at Ground Zero following 9/11, died of cancer on Friday.

A firefighter and two cops who worked at Ground Zero in the days and weeks after Sept. 11 have died of cancer in the past five days, the Daily News has learned.

Family members and advocates are blaming their deaths on toxins released into the air after the twin towers collapsed - and they're urging Congress to act on a bill that would help pay for their medical care.

"Everybody is denying that this stuff is connected to 9/11, but it is," said Stephen Grossman, whose son Robert died of cancer on Friday at the age of 44.

Robert Grossman was a police officer in Harlem who worked at Ground Zero for several weeks after Sept. 11.

"He never once said he was sorry he went down there," Grossman said. "None of them walked away even though they all knew it was really dangerous."

The day after Grossman passed away, Firefighter Richard Mannetta, 44, died of cancer. And last Wednesday, 37-year-old Police Officer Cory Diaz died of cancer.

Firefighter John McNamara, 44, died of cancer last month.

"Unfortunately, it's just going to happen more and more," Stephen Grossman said. "I hope next week there isn't four."

Grossman said even though his son lost his battle, there are still many more first responders who are sick.

"This country just says, 'That's fine. We'll just wait another 15 to 20 years and you'll all be dead and we'll all be sorry,'" he said. "This country is better than that."

The James Zadroga 9/11 Health and Compensation Act - named after an NYPD detective who died from his post-9/11 ailments - is still sitting in Congress, and Grossman and others are urging lawmakers to act now.

"These three deaths are proof that we need this bill passed today - not a year from now," said John Feal, founder of the FealGood Foundation.

The bill would provide $10 billion for medical care for hundreds of first responders who have since become ill. But doctors haven't directly linked these illnesses to the World Trade Center.

"The facts are indisputable," said Kenny Specht, 40, a firefighter who worked for the NYPD on Sept. 11 and was diagnosed with thyroid cancer three years ago. "This week alone proves what we've been saying is absolutely occurring."

Feal said the deaths of Grossman, Diaz and Mannetta in a span of five days is hard to ignore.

"How do you get this high cluster of serious cancer in just people that worked the pile? he said. "That isn't a coincidence."

FORECLOSURES ACCELERATE AS BANKERS LUXURIATE

Bankers have greedily taken their bonuses and are literally walking away from a new tsunami of foreclosures which may lead to a fiscal doomsday for America: Allen L Roland

As Martin Weiss, Money and Markets, reported on October 5th ~ " Last year, banks provided new credit at the annual pace of $472.4 billion in the first quarter and $86.7 billion in the second. This year, they're not providing ANY new credit ~ they're actually LIQUIDATING loans at the rate of $857.2 billion in the first quarter and $931.3 billion in the second. So if you're running a business, you may want to think twice before asking your bank for more money. Instead, they may decide to TAKE BACK the money they've already loaned you ! "

Ditto for mortgages. " Last year, mortgages were being created at the annual clip of $522.5 billion and $124 billion in the first and second quarters, respectively. This year, on a net basis, mortgages haven't been created at all. Quite the contrary, the Fed reports that, on a net basis, they've been liquidated at an annual pace of $39.3 billion in the first quarter and $239.5 billion in the second."

http://www.moneyandmarkets.com/three-government-reports-point-to-fiscal-doomsday-4-35722

Watch this two minute You tube Video of Bill Moyer interviewing Ohio Democratic Congresswoman Nancy Kaptur who shares her experience, as a Representative of the people of her district, to get the attention of and help from James Diamond ( CEO J.P.Morgan Chase ) who literally ignores her plight regarding the accelerating mortgage foreclosures in her district.

http://www.iptv.org/video/detail.cfm/5308/bmjl_20091009_preview_simon_johnson_2

If you're not outraged ~ you're on life support.

Allen L Roland

http://blogs.salon.com/0002255/2009/10/12.html

Freelance Online columnist Allen L Roland is available for comments, interviews and speaking engagements ( allen@allenroland.com )

Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.net

Cartoon courtesy of Tom Toles / Washington Post

Jim Rogers "Quite Sure" Gold Will Hit $2000, Dollar Will Lose Reserve Status

Famed investor Jim Rogers is "quite sure gold will go over $2000 per ounce during this bull market."

Rogers' confidence gold will continue to rally stems from a view the U.S. dollar is on its way to losing status as the world's reserve currency.

"Is it going to happen? Yes," Rogers says. "I don't like saying it [and] I'm extremely worried about it but we have to deal with the facts. America is not getting better [and] the dollar is going to be replaced just like pound sterling [was]."

Rogers didn't offer a timetable, and it's likely gold would exceed $2000 per ounce if the dollar were to lose its reserve status.

Still, "I wouldn't buy gold today," Rogers says. "I think I'll make more money in other commodities, which are cheaper," as discussed in more detail here.

Among many others, Rogers is "worried about the fact the U.S. government is printing huge amounts, spending gigantic amounts of money it doesn't have," the investor and author says. "People are very worried [and] skeptical about paper money [and] looking for places to protect themselves. The best way is to buy real assets. [That] has always protected one during currency turmoil, and it will again."

Cubs file for bankruptcy as expected

NEW YORK -- The Chicago Cubs filed for Chapter 11 bankruptcy protection Monday, a step that will allow their corporate parent to sell the team in an $845 million deal.

The filing in Wilmington, Del., was anticipated and is expected to lead to a brief stay in Chapter 11 for the Cubs. A hearing on the case was scheduled for Tuesday.

It comes as part of the Tribune Co.'s plans to sell the team, Wrigley Field and related properties to the family of billionaire Joe Ricketts, the founder of Omaha, Neb.-based TD Ameritrade.

Tribune, which also owns the Chicago Tribune and the Los Angeles Times, filed for bankruptcy protection in December, but the Cubs were not included in the filing. The team's run through Chapter 11 is expected to protect its new owners from potential claims by Tribune creditors.

Tribune bought the Cubs in 1981 for $20.5 million from candymaker Wm. Wrigley Jr. Co. It announced plans to sell the franchise in 2007, but got tripped up by the recession and the collapse of the credit markets.

It has agreed to sell the Ricketts family a 95 percent stake in a deal that tops the record $660 million paid for the Boston Red Sox and its related properties in 2002. Tribune Co. is keeping the remaining 5 percent.

The sale still needs approval from three-quarters of Major League Baseball's 30 team owners.

The Cubs' bankruptcy filing is not the first for a baseball team. The Baltimore Orioles were sold in a bankruptcy auction in 1993 after owner Eli Jacobs filed for Chapter 11. The same happened to the Seattle Pilots after the 1969 season. The new owners moved the team to Milwaukee and changed the name to the Brewers.

The National Hockey League's Phoenix Coyotes, a franchise that has yet to make a profit since moving from Winnipeg, Manitoba, in 1996, filed for Chapter 11 protection in May.

Copyright 2009 by The Associated Press

Dollar Collapse Plunges S&P 500 Back To 1996

And here you were thinking that the market's collapse had taken only six years or so off the value of your nest egg.

After all, the S&P is back to 1,100, about the same level as late 2003.

Silly you!

As we've noted often in recent days, since your government is quietly destroying the value of the dollar (ostensibly to save your ass), the actual dollar-adjusted value of the S&P 500 is back to 1996 levels. Even after the recent 60% recovery!

Here, from the FT, is the S&P 500 plotted after adjusting for the dollar's move relative to a broad currency index:

And here's the FT's take on it:

Another extract from Diapason Commodities’ latest note, courtesy of author Sean Corrigan. According to Corrigan, the chart — which is set to a logarithmic scale — shows the extent to which money illusion has boosted the apparent performance of US equities. As he explains:

Strip out the effect of the sickly greenback (by multiplying by the TWI) and we see that this bust has clearly spelt doom for a three-decade uptrend; that we are both hovering dangerously at the 50% mark of that whole move and also threatening to fail at the previous 2003 low. were that to occur, it could mean a much deeper unwind of the post-Tequila bubble era range.

The REAL Battle Over America's Banking System

The battle to reform the American banking system needs to include reimposing the barrier between investment banking and depository banking (Glass-Steagall), pay incentives based on what is best for Americans and not just the top executives, the end of too big to fail, and other changes which are frequently discussed by financial writers. These are vital issues.

But there is more to the battle for reform than you might know.

New York Versus the Rest of the Country

If you are happy with the banking system, and don't think it needs to be reformed, then you probably work for one of the banks headquartered in New York.

Indeed, the banks outside of New York have acted much more conservatively, used more conservative capital ratios and less leverage and gotten less involved in credit derivatives and other speculative investments.

Buy a banker in the Midwest a drink, and he will probably rail against the giant New York banks for causing the financial crisis, costing the smaller, better run banks a lot of money and huge fees, and driving many smaller banks out of business.

And even within the Federal Reserve, what the New York Fed and Bernanke are saying is wholly different from what the heads of the regional Fed banks are saying. The Fed banks in Philadelphia and Kansas City and Dallas and elsewhere disagree with what the New York Fed and Fed's Open Market Committee are doing. See this and this.

So the battle isn't between bankers versus outsiders. It is between the giant New York money-centered banks and the rest of the country.

Reserve Requirements

Congresswoman Kaptur said last week:

We used to have capital ratios. We need to get back to them. Ten to one. For every dollar in your bank, you can lend ten. You know what J.P. Morgan did? A hundred to one. And then with derivatives, who knows how much?

Remember, Milton Friedman - the monetary economist worshipped as the guy with all of the answers in the latter part of the 20th century - advocated for 100% reserves.

Friedman has been deified as the economist to follow. But his views on reserve requirements have been completely ignored.

Goldman Using Taxpayer Dollars to Buy Stock in China?

As everyone knows, Goldman became a "bank holding company" in September, to be able to access funds from the Fed at essentially zero percent interest.

But in a new interview with Bill Moyers, Simon Johnson noted that in August of 2009, Goldman switched again - to a "financial holding company".

What's the difference?

Johnson says that being a financial holding company means that Goldman can borrow money from the Fed at essentially no cost, and then invest it in any thing it wants. For example, Johnson says that Goldman has bought a large share of the stock of a Chinese automaker. Johnson says that if the investment succeeds, Goldman will reap the profits; but if it fails, the taxpayers are on the hook.

Banks Have the Power to Create Money

Congresswoman Kaptur also said last week:

Banks have the power to create money. And decide how much that is worth.

What is Kaptur talking about?

Here Comes the Judge

Well, in First National Bank v. Daly (often referred to as the "Credit River" case) the court found that the bank created money without having the reserves:

[The president of the First National Bank of Montgomery] admitted that all of the money or credit which was used as a consideration [for the mortgage loan given to the defendant] was created upon their books, that this was standard banking practice exercised by their bank in combination with the Federal Reserve Bank of Minneaopolis, another private bank, further that he knew of no United States statute or law that gave the Plaintiff [bank] the authority to do this.

The court also held:

The money and credit first came into existence when they [the bank] created it.

(Here's the case file).

Nobel Economists, Congressmen, the Fed and Treasury Agree

Still confused?

Well, let's hear from some top economists.

As PhD economist Steve Keen pointed out recently, 2 Nobel-prize winning economists have shown that the assumption that reserves are created from excess deposits is not true:

The model of money creation that Obama’s economic advisers have sold him was shown to be empirically false over three decades ago.

The first economist to establish this was the American Post Keynesian economist Basil Moore, but similar results were found by two of the staunchest neoclassical economists, Nobel Prize winners Kydland and Prescott in a 1990 paper Real Facts and a Monetary Myth.

Looking at the timing of economic variables, they found that credit money was created about 4 periods before government money. However, the “money multiplier” model argues that government money is created first to bolster bank reserves, and then credit money is created afterwards by the process of banks lending out their increased reserves.

Kydland and Prescott observed at the end of their paper that:

Introducing money and credit into growth theory in a way that accounts for the cyclical behavior of monetary as well as real aggregates is an important open problem in economics.

In other words, if the conventional view that excess reserves (stemming either from customer deposits or government infusions of money) lead to increased lending were correct, then Kydland and Prescott would have found that credit is extended by the banks (i.e. loaned out to customers) after the banks received infusions of money from the government. Instead, they found that the extension of credit preceded the receipt of government monies.

Keen explained in an interview Friday that 25 years of research shows that creation of debt by banks precedes creation of government money, and that debt money is created first and precedes creation of credit money.

As Mish has previously noted:

Conventional wisdom regarding the money multiplier is wrong. Australian economist Steve Keen notes that in a debt based society, expansion of credit comes first and reserves come later.

This angle of the banking system has actually been discussed for many years by leading experts:

“[Banks] do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts."
- 1960s Chicago Federal Reserve Bank booklet entitled “Modern Money Mechanics”

“The process by which banks create money is so simple that the mind is repelled.”
- Economist John Kenneth Galbraith

[W]hen a bank makes a loan, it simply adds to the borrower's deposit account in the bank by the amount of the loan. The money is not taken from anyone else's deposit; it was not previously paid in to the bank by anyone. It's new money, created by the bank for the use of the borrower.
- Robert B. Anderson, Secretary of the Treasury under Eisenhower, in an interview reported in the August 31, 1959 issue of U.S. News and World Report

“Do private banks issue money today? Yes. Although banks no longer have the right to issue bank notes, they can create money in the form of bank deposits when they lend money to businesses, or buy securities. . . . The important thing to remember is that when banks lend money they don’t necessarily take it from anyone else to lend. Thus they ‘create’ it.”
-Congressman Wright Patman, Money Facts (House Committee on Banking and Currency, 1964)

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented.
- Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920s.

Banks create money. That is what they are for. . . . The manufacturing process to make money consists of making an entry in a book. That is all. . . . Each and every time a Bank makes a loan . . . new Bank credit is created -- brand new money.
- Graham Towers, Governor of the Bank of Canada from 1935 to 1955

Monetary reformers argue that the government should take the power of money creation back from the private banks and the Federal Reserve system.

Indeed, PhD economist and candidate for Florida governor Farid Khavari wants to create a Bank of the State of Florida, to create credit without burdening the state and its citizens with high interest charges by private banks.

The state of North Dakota already has such a bank.

The bottom line is that monetary reformers argue that letting banks create credit and money and then charge high interest rates creates massive levels of debt for states and taxpayers. They argue that the power to create money should be reclaimed by the government and taken away from the private banks.

Personally, I agree with the monetary reformers. But even for those who think this is too radical a proposition, the question is whether a system where debt has to constantly and continually expand to keep the economy afloat is sustainable.

The Ever-Expanding Bubble

In a hearing held on September 30, 1941 in the House Committee on Banking and Currency, then-Chairman of the Federal Reserve (Mariner S. Eccles) said:

That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.

Indeed, Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, said:

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 position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.

America's banking system needs to be fundamentally reformed.

菲律賓‧應付洪災後糧食需求‧將進口25萬公噸白米

（菲律賓‧馬尼拉）全球最大白米進口國菲律賓週一（10月12日）表示，已訂購25萬公噸白米，以應付洪水過後的糧食需求量。

菲律賓在過去2週先後遭到颱風“凱薩那”和“芭瑪”重創，許多農田和道路遭摧毀，並導致超過650人死亡。

菲律賓北部碧瑤市上週末發生大面積山體滑坡，奪走至少275條人命，由於道路中斷，救急物資無法及時送到重災區，導致當地出現油糧耗盡、缺乏棺木的困境；數千名絕望的居民週一在山體滑坡後的懸崖邊，艱難地攀爬，試圖找到出路，或尋求支援。（圖：美聯社）

農業部長黃嚴輝在接受電台訪問時表示，洪水對農作物和農耕地所造成的損失高達110億比索（約馬幣8億零900多萬），但他稱，菲律賓並沒有面對白米短缺的問題。

此外，官員也表示，許多道路和橋樑也被洪水摧毀，損失高達47億7000萬比索（約馬幣3億4800多萬）。

菲國北部最大的城市碧瑤也因為山洪爆發，引發山體滑坡，造成四週的道路被完全切斷，救援人員週一試圖以炸藥疏通道路，以便運送食品、飲用水及其他物資到山體滑坡的倖存者手中。

此市市長包蒂斯塔稱，此市不但食品與汽油儲量告急，連棺木亦所剩無幾。

據當地警方統計，此地區的死亡人數迄今已上升至275人。

中國‧致函新華社更正內容‧演講出錯溫家寶道歉

（中國‧北京）中國總理溫家寶週一（10月12日）向新華社總編室致更正信，就新華社在週日（10月11日）發表他《教育大計，教師為本》講話中的內容作出更正，並向讀者致歉。

做為中國總理有這一動作，除了顯示溫家寶重視輿論之外，也相當重視教育的細節。

溫家寶在講話中提及開闊學生思想時，講到岩石的分類，溫家寶當時說的是沉積岩、岩漿岩、火山岩。

溫家寶於週一深夜發出親筆信函，全文為：“新華社總編室，貴社週一播發我的《教育大計，教師為本》一文，其中岩石學的分類，應為沉積岩、岩漿岩（也可稱為火成岩）、變質岩。特此更正，並向廣大讀者致以歉意。”

在溫家寶作出更正後，新華社即於週二（10月13日）刊出溫家寶當日的講話全文。

溫曾在地質局工作

溫家寶是在9月4日到北京35中學聽課後發表8000字講話，當中提及有學生提問時脫離教師講課主題，稱喜歡岩石，但教師直接將問題扭過去，做法不好；應該因勢利導，而簡單舉幾種岩石名，啟發學生興趣。

溫家寶1960年代在北京地質學院畢業，主修地質構造；之後在甘肅地質局以及前地質礦產部工作，直到1985年調任中央辦公廳。

中國‧共40項歷來最大規模‧中俄簽118億貿易協議

（中國‧北京）俄羅斯副總理茹科夫透露，中俄週二（10月13日）簽署了約40項、總值達35億美元（約馬幣118億7200萬令吉）的歷來最大規模商業合同及協議。

正陪同俄羅斯總理普汀華的茹科夫表示，普汀較後與中國總理溫家寶會晤時，將簽署更多協議。

據報導，兩國將簽署多項能源合作的協議，涉及石油、天然氣和其他戰略資源。

天津煉廠有望正式簽約

其中，最受外界關注的項目之一，是中俄合資修建的天津煉廠項目有望正式簽約。美聯社引述來自中國的消息報導，兩國將確保這一管道於2010年底建成投產，並於2011年開始供油。

在中俄總理會談前，兩國企業已在第4屆中俄經濟工商界高峰論壇期間，率先簽署了約40項、總值35億美元的各類商業合同及協議，涉及建築業，俄羅斯道路網絡和鐵路建設，以及興建與能效相關的企業。

茹科夫稱：“這或許是俄羅斯與中國企業首次簽署數量如此龐大的商業合同。”

雙方還商討了使用中俄貨幣取代美元和歐元結算貿易的計劃。

新加坡‧性教育缺情感輔導‧或是更多青少年懷孕原因

（新加坡）本地學校推行的性教育內容缺乏情感方面的教育，這可能是導致更多青少年發生性行為或早孕的原因。

安全套公司杜蕾斯在全球26個國家進行“性健康全球調查”，最新一部份的調查內容是“知識和教育”。結果顯示，只有12%的新加坡人表示在學校的性教育課程包括了“性的情感部份”，也就是指愛、尊敬和分享愉悅。

54%的新加坡人希望性教育包括更多情感教育，這個數字比澳洲的66%低，但比中國的37%和日本的36%高。

調查也顯示，在學校受過性教育的人當中，有46%表示他們沒有學有關懷孕的知識，57%的人說他們沒有被教過有關性病的內容。

在獲取性知識的來源方面，54%的受訪者從學校性教育課程獲取性知識，61%的人從雜誌瞭解相關內容，還有52%的人把網絡視為主要信息來源。

60%人滿意性健康

60%在學校受過性教育的新加坡人表示，他們對自己整體的性健康感到滿意，但只有47%的男性和39%的女性認為他們有足夠的建議和信息，從兩人的關係中獲得最好的結果。

35%的新加坡人對自己的性健康非常滿意，認為滿意程度還可以通過花更多時間與伴侶共處和注入更多浪漫元素提高。

也有59%的新加坡人在未來10年將在性生活中有更多新的嘗試，67%的人表示他們會更早有性愛初體驗。

新加坡‧魚尾獅在1965年絕種？世姐被轟常識零蛋

（新加坡）將代表新加坡到南非參加“世界小姐選美賽”的第3名世姐琵拉阿蘭多被指有美貌無智慧，竟說神話動物魚尾獅是真的，還猜魚尾獅是在1965年絕種的。

“世界小姐選美賽”主辦單位ERM World Marketing 4天前宣佈，世姐亞軍李函穎（22歲）因自稱受傷，無法長時間站立，所以決定由瑟拉代表新加坡出征。

但在消息傳出後，熱心網民又開始挖阿蘭多的底，並在網上指責她知識零蛋。

網民以“2009年世姐琵拉阿蘭多的可笑訪問錄影︰魚尾獅幾時絕種的”為題，寫琵拉在大賽前，接受Razor TV的訪問，以調查她對新加坡的認識時，她竟說出魚尾獅是在1965年絕種的。

而在大決賽當晚，原本是大熱門的琵拉，也因為在問答環節表現欠佳，最後只得到季軍。

據報導，當時司儀問她如果得到冠軍，要在1分鐘致詞裡說甚麼時，她支吾了半天，才擠出幾句要感謝父母、家人、兄弟、朋友及支持者的感謝詞，令人大跌眼鏡。

已向記者表示魚尾獅虛幻

琵拉今日（週二，10月13日）早上受訪時說，她在彩排時都對答如流，只是參賽當晚失水準。

有關魚尾獅的訪問，她聲稱在接受訪問時，已經向記者表示“魚尾獅不是虛幻的嗎？”

但記者卻慫恿她猜一猜。

她說，之後她有向選美主辦單位的負責人反映，那個訪問似乎有嘲笑佳麗的意味，而她自己也感覺被侮辱了。

你知道嗎？
魚尾獅是虛構動物

魚尾獅是一個神話動物，是本地旅遊局在1964年推出，魚尾獅結合了獅子頭和魚身的動物，代表新加坡是獅子城市，也是一個島嶼。

新加坡‧金融海嘯衝擊‧百萬富翁減21.6%

（新加坡）金融大海嘯使到新加坡的百萬富翁在去年減少了21.6%，人數剩下6萬1000人，而他們的總資產2720億美元，也銳減29.4%。

這些所謂的百萬富翁，也是“高淨資產人士”，是指擁有至少100萬元淨資產的個人，這些資產並不包括住宅和消費物品。

美林資產管理以及凱捷咨詢公司，今日（週二，10月13日）早上聯合發佈第4份“亞太資產報 告”，宣佈了這方面數據。報告也指出，新加坡“高淨資產人士”，或者百萬富翁人數的大縮水，主要是受到經濟放緩和股市下跌的影響。不過，報告指出說，在經 歷金融大海嘯後，亞太區域預料將有較快的經濟復甦，而新加坡將繼續是亞太區域一個主要的資產管理中心。

新加坡‧捕到100公斤大龍躉‧船夫以為是浮屍

（新加坡）船夫出海釣魚，卻意外捕到超過100公斤重的巨大龍躉魚時，還一度以為是浮屍！

週一（10月12日）早上10時30分左右，陳阿弟（54歲，船夫）和朋友在德光島一帶的海域捕魚。

“我隱約看到海面上漂浮著一團黑黑的東西，懷疑是髒東西，即死屍，就叫朋友朝前方看看。”

兩人仔細觀察了數秒，赫然發現那並不是甚麼浮屍，而是活生生的一條巨大石斑魚（或稱龍躉）。

陳阿弟形容，巨大石斑魚有大約1.5米長，光是嘴巴，就比一般小石斑魚大好幾十倍。

6男聯手搬動

“我們當下利用捕魚網套在它身上，困住它，不讓它游走。但由於實在太重了，我們撈不上來，只好一路拖回樟宜村的碼頭。”

當時在海上，陳阿弟也第一時間聯絡了幾家魚類批發商，請他們介紹酒樓處理龍躉。

“好不容易才找到樟宜村的德光海鮮樓餐館，他們願意接收處理。”

陳阿弟後來連同5名壯漢，成功將巨大石斑魚從下岸的樟宜碼頭抬進德光海鮮樓的廚房。

德光海鮮樓負責人施女士（47歲）說，她估計巨大石斑魚超過百公斤，畢竟需要6名男子才搬得動。

出動大斧砍魚

施女士說，她們甚至不敢用平時秤鯊魚肉的儀器來秤，怕將儀器弄壞。

“我們還得請朋友從別的地方，拿來特別的大斧頭，將魚砍成小塊，預計處理整條魚，需要至少三四鐘頭，相當耗體力和耗時。”

施女士估計，大龍躉的市場價格應該是1000元左右。

The Next Stage Of Deleveraging Means Return Of The Great Depression

At the FT, economist Thomas Palley goes metaphor crazy arguing that we're heading for a double dip, and that the possibility of a Second Great Depression should not be written off.

Deleveraging can be understood through a metaphor in which a car symbolises the economy. Borrowing is like stepping on the gas and accelerates economic activity. When borrowing stops, the foot comes off the pedal and the car slows down. However, the car’s trunk is now weighed down by accumulated debt so economic activity slows below its initial level.

With deleveraging, households increase saving and re-pay debt. This is the second step and it is like stepping on the brake, which causes the economy to slow further, in a motion akin to a double dip. Rapid deleveraging, as is happening now, is the equivalent of hitting the brakes hard. The only positive is it reduces debt, which is like removing weight from the trunk. That helps stabilise activity at a new lower level, but it does not speed up the car, as economists claim.

Unfortunately, the car metaphor only partially captures current conditions as it assumes the braking process is smooth. Yet, there has already been a financial crisis and the real economy is now infected by a multiplier process causing lower spending, massive job loss, and business failures. That plus deleveraging creates the possibility of a downward spiral, which would constitute a depression.

Such a spiral is captured by the metaphor of the Titanic, which was thought to be unsinkable owing to its sequentially structured bulkheads. However, those bulkheads had no ceilings, and when the Titanic hit an iceberg that gashed its side, the front bulkheads filled with water and pulled down the bow. Water then rippled into the aft bulkheads, causing the ship to sink.

The US economy has hit a debt iceberg. The resulting gash threatens to flood the economy’s stabilising mechanisms, which the economist Hyman Minsky termed “thwarting institutions”.

So basically, we've lifted our foot off the accelerator, slowed down, then slammed on the breaks, and if that weren't bad enough, we hit an iceberg too. Sounds like we're screwed.

by Joe Weisenthal

Alan Watt on Alex Jones Tv:Divide & Conquer

infowars.com

pt 1/2 Gerald Celente on the The Gary Null Show 07 Oct 2009

Check this link ...... http://tinyurl.com/ygt66vf

The September Employment Rate is 90%

The U.S. Department of Labor Official Employment rate in September 2009 is now 90% (Unofficial rate is 75%).

And for those Americans who are still employed, they will find it harder to get that sweet deal on a new car because auto dealers won’t be competing with each other now that Brian Deese, special assistant to president Obama for economic policy made the decision (not the Chrysler bankruptcy judge), to close dealerships without regard to profitability.

Deese, age 31, in his first government position, shuffles back and forth from the West Wing to the Treasury Department dismantling the US Auto Industry and rewriting the rules of American “capitalism”. [1]

Deese’s first rule: Withdraw Credit and Liquidity.

Result – Catch 22:

The pullback in spending causes companies to cut back on inventory and staff – Creating unemployment.

Which causes spending to fall and companies to cut back on inventory and staff -Creating more unemployment.

Causing spending to fall even further, forcing companies to cut back on inventory and staff – Creating even more unemployment…263,000 jobs eliminated in September.

Full Un-Employment is on Track for 2012

The world is engulfed in a global economic crisis of staggering ferocity.

Making matters worse, a government “by and for” the American people may not be prepared for the social dislocation, economic despair and breakdown in law and order that is likely to ensue.

The Los Angeles Times Reports on the Current Un-Employment Situation: In addition to the 15.1 million people counted as officially unemployed, the number of people so discouraged that they have quit looking for jobs is 9.2 million.

Is the total number of unemployed now 24,300,000?

No.

The newly defined “de-facto” unemployment rate does not include all the categories of people who are no longer in the labor force, in other words, the under-employed, the marginally employed, and the part time job seekers who can no longer find work.

Data from The McKinsey Global Institute estimates the real de facto unemployment rate in the United States would be 24.78%.

Thus, there are almost 39 million, not 15.1 million, or even 24.3 million Americans who are no longer working or looking for work, and that figure is before the Federal Reserve kicks Brian Deese into high gear. [2]

Since there is not enough police, National Guard or military to keep order when 39 million people panic, Barack Obama will restore order by telling his followers standing in lines that this nation, unlike in the past, will put its hands on “the arc of history and bend it once more toward the hope of a better day.”

As a president elected in a landslide by young and old, rich and poor, Democrat and Republican, black, white, Hispanic, Asian, Native American, gay, straight, disabled and not disabled, Obama will lead the nation out of its unsustainable American Dream and into a great new depression.

Even with evidence to the contrary, Americans believe government is suppose to take care of them because “it’s their job.” In an environment of homelessness, poverty and suffering, millions of unemployed Americans will forget their 60 years of unprecedented prosperity–at the expense of the Third World and the environment–and look for someone to blame.

But they won’t find a Bush, Clinton or even a Ronald Reagan in Washington. Instead, sitting in the Oval Office will be King Barack Obama, telling us to return to our homes, cars or tent cities.

The newest leader will, in fact, be followed because this time Americans believe their dreams came true in 2008 when Barack Obama was elected the 44th President of the United States.

We hope and pray Obama wants to put us back to work and reclaim the American Dream but the new rules of capitalism call for an American Nightmare.

Barack Obama, an unknown senator four years ago, is not one of “us.” He travels in the same circles as other members of the super-secret Skull & Bones society of Yale University who pretend to be running for president every four years. The decision to make Obama Commander in Chief of the collapse was made four years ago; the November election was a formality [3].

To believe otherwise is to ignore the Bradley/Palin effect, the voting machines that flipped ballots before the voter left the booth, and the decision by John McCain to wait until his concession speech to shed the image of a nasty “grumpy old man.”

In September 2008, when the Obama campaign seemed to be slumping and their candidate’s long-standing lead in the polls had evaporated, the senator’s supporters openly worried that a potential victory might be slipping away. Then providence joined the campaign: the failure of the giant investment bank Lehman Brothers followed by a global financial meltdown which began in the month of October. [4]

“If there is anyone out there who still doubts that America is a place where all things are possible, who still wonders if the dream of our founders is alive in our time, who still questions the power of our democracy,” on Nov. 4, 2008 you received your answer: It did not matter who you voted for because it was already written: Barack Obama would be the President of the United States by a landslide.

Instead of being the “most dangerous man in America”, the Candidate for Change and Hope will be the “most remarkable leader the world has ever seen”–intellectual, oratorical, governmental and a genius who will guide us through the greatest calamity the world has ever seen.

Thanks to Barack Obama, a 21st century Martin Luther King, there will be chaos, but not anarchy.

The really inconvenient truth is this: The 600 detention centers built by the Halliburton subsidiary KBR do not have the capacity to hold the 39 million Americans who will be out of work, out of home and out of food.

Will they be out of hope?

Robert Singer is an Entrepreneur and the author of a forthcoming book on the Federal Reserve. His articles cover politics and the financial and environmental implications of our consumer society. The articles have been main headlined and can be found on numerous popular websites: Marketoracle, Silverseek, Silver Bear Café, Goldseek, Daylife, LAprogressive, Canadafreepress, Opednews, Daily.pk and many of the Wordpress sites. Richard Daughty, The Mogambo Guru, proclaimed him a Junior Mogambo Ranger (JMR).

Dem Bones is Connected To De Debt Bone by Robert Singer, an analysis of the Federal Reserve, can be found on numerous popular websites including G. Edward Griffin’s Unfiltered News. Edward Griffin is the author of the definitive work on the Federal Reserve, The Creature from Jekyll Island.

Meat, Milk and Motors: The New China Syndrome by Robert Singer, an essay about China first released in February 2009 has been widely posted and read on the Internet. Quotes from the article can be found in The Wall Street Journal Digital Network and was the Top World Story on the Pakistan Daily website for over a week.

Footnotes:

[1] The 31-Year-Old in Charge of Dismantling G.M. by David E. Sanger, The New York Times: May 31, 2009

[2] We don’t want your tired, poor, huddled masses yearning to trash the planet:

The Federal Reserve, 2009 by Robert Singer

[3] Why Joseph Biden will be the Next Vice President of the United States by Robert Singer

[4] October Crashes, Black Monday 10/28/1929, Black Monday 10/18/1987, Soviet Union Black Friday 10/18/1991 and Black Tuesday 10/29/2008

Confidential Memos Indicate Oil SDR Pricing Shift Would Be "Most Damaging" To United State

A recently declassified, formerly Confidential, 30 year old memo prepared by Henry Owen for President Jimmy Carter's eyes only, highlights the perils facing the United States if oil were to be priced in SDRs instead of dollars, a topic which is all the rage today as rumors are swirling that this is an imminent transition to be "put" upon the United States.

In response to your request, we have considered, and discussed with other agencies, whether the US should favor use of SDRs instead of dollars, to pay for cure oil... I have concluded that dollar pricing should be maintained -- a view that is shared by State, Treasury and CEA.

The reasons:

1. An announcement that dollars were no longer being used as the unit of account in paying for oil would trigger selling of dollars on the foreign exchange markets. So we would suffer.

2. I don't see any offsetting gain, since OPEC would probably raise prices in SDR terms, as necessary to recover revenue losses if the SDR appreciated relative to the dollar.

And the conclusion:

We might be able to persuade the OPEC countries to make the shift if the dollar weakened but that's precisely when the move would be most damaging to us.

Poor Mr. Owen- little did he realize that a mere 3 decades after this memo was penned, the administration would be consumed by a bunch of Wall Street pandering, middle class extortionists, who seek nothing else than to inflate the trillions of toxic "asset" loans that make up the broken backbone of the American financial system. It would come as no surprise if the move is now in fact spearheaded by the same administration which has no other purpose in life than to destroy what little savings Americans have and to throw all their cash to prop up artificially inflated equity prices so that insiders can sell their stock at agreeable levels, and so the toxic companies can use the run up to issue follow on offerings, moderating their untenable debt holdings.

Even more troubling, in another declassified memo, former Undersecretary of the Treasury and President of the New York Fed, Anthony Solomon, reaches this damning conclusion:

The choice of the unit of account for oil pricing is basically under the producing countries' control. There is no particular economic reason why a shift from the dollar would be contrary to U.S. interest -- unless the dollar were to depreciate significant in relation to the currencies in the pricing basket. But there could be major psychological effects. Given the unsettled conditions in the foreign exchange market [TD: so true today, 30 years later], such a step at this time could be interpreted as a lack of confidence in the dollar and as presaging a shift in OPEC investment policy away from the dollar. It could precipitate a serious market reaction.

Alas, even President Carter, seen by many as one of the worst American president in American history was smart enough to not bury his own middle class at the expense of landed Wall Street interests. It is a pity that his current incarnation, advised by the Bernanke-Summers-Geithner think tank, has such diametrically opposing motivations.

h/t Geoffrey Batt for document procurement

Submitted by Tyler Durden

Govt unveils huge asset sale to cut debt

LONDON (AFP) – Prime Minister Gordon Brown announced on Monday a 16-billion-pound sale of state assets including a high-speed railway and a betting service to cut soaring debt caused by the economic crisis.

Brown -- facing a likely election defeat next year by David Cameron's Conservative Party -- wants to halve Britain's deficit in four years.

But opposition politicians derided the asset sale as a political gimmick and compared it to a "national car boot sale" and "selling the family silver."

The planned disposals, which also include a 33-percent stake in European uranium consortium URENCO and the Student Loan Company.

"We plan a sale of assets to deal with our debt issues and... 16 billion of assets will be sold within the next two years," Brown told financiers during a speech in central London.

The public deficit increased after an expensive bailout of the troubled banking sector.

The deficit is widely forecast to strike 175 billion pounds this year as the nation's finances also face pressure from a recession which has slashed taxation revenues.

As well as announcing the sale, Brown's speech was also a bid to seize back the political initiative on the issue from the Conservatives, who are well ahead in the opinion polls with a general election due by June.

It included a string of attacks on Conservative policies, a taste of the electioneering flavour which is likely to dominate political debates in the coming months.

"Some people would withdraw the cooperation that is necessary with our European partners and the rest of the world to enable the only way that the global economy can function in the future -- the international cooperation is necessary," Brown said.

"I will fight over the next few months for what I believe."

Cameron says he could hold a referendum on the European Union's Lisbon Treaty reforms if he wins office and they have not been ratified by the Czech Republic, the only EU state yet to do so.

Brown said there was a "fundamental divide" in British politics over how to tackle the economic problems and said the Conservatives wanted to stop quantitative easing and would fail to invest.

In response, Conservative Treasury spokesman Philip Hammond called on Brown's government to start taking "tough decisions."

The 16-billion-pound figure was equivalent to only a weeks' worth of borrowing at current levels, he said, adding: "Selling the family silver will not solve the crisis in public finances".

Vincent Cable, Treasury spokesman for the Liberal Democrats, said the sale was like a "national car boot sale."

In a twin-pronged attack on Britain's recession, the Bank of England has slashed interest rates to a record low of 0.50 percent and launched a radical quantitative easing programme to boost lending.

The central bank will keep its key lending rate at 0.50 percent until at least 2011 as the economy recovers, an independent economics consultancy forecast on Monday.

The centre for economics and business research (cebr) added that British borrowing costs would remain below two percent up until 2014.

The BoE has so far pumped out 175 billion pounds of new money under quantitative easing, whereby it creates funds by buying bonds from commercial institutions.

by Katherine Haddon