Saturday, June 19, 2010

Gold rises as U.S. dollar falls

The price of gold hit $1,261.90 on Friday, a record high.
The price of gold reached $1,261.90 on Friday, its highest price level.

The euphoria which has sent gold rocketing began to simmer at the week's end as the U.S. dollar rally finally appeared to be waning.

Gold is priced in U.S. dollars so the price tends rise when the currency falls. The euro, quoted at near 1.18 not more than a week ago, was flirting with 1.24 Friday.

Gold is regarded as a safe-haven asset and its demand has been boosted by recent sovereign debt concerns particularly in Europe.

The precious metal was quoted near its record-high at $1,256.65 an ounce at 3:20pm Friday, a $13.25 gain on the previous day's close.

"I think it is a case of gold's ability to compete with both credit and equity markets for investments. Competing with credit markets has been in play for a long time, because of low interest rates and low opportunity cost of holding gold," Tom Pawlicki, precious metals analyst at MF GLOBAL in Chicago told Reuters Thomson.

"The (economic) data yesterday from initial claims and Philadelphia Fed was another thing indicating to investors that the economic recovery will be subpar compared with other recession recoveries. That makes gold more attractive," he said.

Gold is up nearly 15% this year. "Sovereign debt worries, central banks raising their holdings and record low interest rates keep attracting new buyers to gold," Saxo Bank senior manager Ole Hansen was quoted as saying by Reuters Thomson.

"The Goldilocks scenario continues. Risk-off helps gold through safe haven (buying), risk-on helps it as well through a weaker dollar."

Medvedev Pushes Ruble Reserve Currency to Cut Dollar Dominance

June 19 (Bloomberg) -- Russia wants the ruble to be one of the world’s reserve currencies as President Dmitry Medvedev renews his push to reduce the dollar’s dominance and make Moscow a global financial hub.

“Only three, five years ago it seemed like a fantasy” to create a new reserve currency, Medvedev said yesterday in a speech in St. Petersburg, Russia. “Now we are seriously discussing it.”

Medvedev, who has repeatedly called for a supranational currency to match the dollar, said discussions with China are continuing on broadening the global options. Russia sold U.S. Treasuries for a fifth consecutive month in April, the U.S. Treasury Department said June 15. The world may need as many as six reserve currencies, Medvedev said.

“It’s something that’s obviously needed,” he said at the St. Petersburg International Economic Forum. “Developing a financial center in Moscow will considerably help to strengthen the ruble’s position as one of the reserve currencies.”

Medvedev’s comments underline Russia’s ambition to reassert its global power following the financial crisis. Gross domestic product shrank 7.9 percent last year, the worst contraction since the fall of communism in 1991, after the credit crunch sent commodity prices plunging.

If a country wants to alter the world economic order, including the number of reserve currencies, it must become an international financial center, Bank of Israel Governor Stanley Fischer said in an interview yesterday.

‘Don’t Emerge by Fiat’

“For a currency to be a reserve currency, you have to have capital markets in which you can sell it and buy it very easily,” Fischer said. “New reserve currencies don’t emerge by fiat. They emerge as countries change.”

Medvedev said he envisages a new economic hierarchy allowing emerging-market giants such as Russia and China to drive the global agenda as the world emerges from the first global recession since the 1930s.

“We really live at a unique time, and we should use it to build a modern, prosperous and stron Russia, a Russia that will be a co-founder of the new world economic order,” he said.

The BRIC countries -- Brazil, Russia, India and China -- were net sellers of U.S. assets in April, driven mainly by Russian divestments, Brown Brothers Harriman & Co. Senior Currency Strategist Win Thin said in a June 15 note.

Russia may add the Australian and Canadian dollars to its international reserves as the central bank diversifies the world’s third-largest stockpile away from the greenback, central bank First Deputy Chairman Alexei Ulyukayev said in a June 16 interview.

Though Russia is “very carefully monitoring what’s happening in the euro zone,” the emergence of the euro as a currency to rival the dollar’s dominance helped soften the impact of the global crisis, Medvedev said.

“If the world depended completely on the dollar, the situation would have been more difficult,” Medvedev said.

--Editors: Tasneem Brogger, Willy Morris.

How the ultimate BP Gulf disaster could kill millions

Disturbing evidence is mounting that something frightening is happening deep under the waters of the Gulf of Mexico—something far worse than the BP oil gusher.

Warnings were raised as long as a year before the Deepwater Horizon disaster that the area of seabed chosen by the BP geologists might be unstable, or worse, inherently dangerous.

What makes the location that Transocean chose potentially far riskier than other potential oil deposits located at other regions of the Gulf? It can be summed up with two words: methane gas.

The same methane that makes coal mining operations hazardous and leads to horrendous mining accidents deep under the earth also can present a high level of danger to certain oil exploration ventures.

Location of Deepwater Horizon oil rig was criticized

More than 12 months ago some geologists rang the warning bell that the Deepwater Horizon exploratory rig might have been erected directly over a huge underground reservoir of methane.

Documents from several years ago indicate that the subterranean geologic formation may contain the presence of a huge methane deposit.

None other than the engineer who helped lead the team to snuff the Gulf oil fires set by Saddam Hussein to slow the advance of American troops has stated that a huge underground lake of methane gas—compressed by a pressure of 100,000 pounds per square inch (psi)—could be released by BP's drilling effort to obtain the oil deposit.

Current engineering technology cannot contain gas that is pressurized to 100,000 psi.

By some geologists' estimates the methane could be a massive 15 to 20 mile toxic and explosive bubble trapped for eons under the Gulf sea floor. In their opinion, the explosive destruction of the Deepwater Horizon wellhead was an accident just waiting to happen.

Yet the disaster that followed the loss of the rig pales by comparison to the apocalyptic disaster that may come.

A cascading catastrophe

According to worried geologists, the first signs that the methane may burst its way through the bottom of the ocean would be fissures or cracks appearing on the ocean floor near the damaged well head.

Evidence of fissures opening up on the seabed have been captured by the robotic submersibles working to repair and contain the ruptured well. Smaller, independent plumes have also appeared outside the nearby radius of the bore hole itself.

According to some geological experts, BP's operations set into motion a series of events that may be irreversible. Step-by-step the drilling

Greenspan Says U.S. May Soon Reach Borrowing Limit

Former Federal Reserve Chairman Alan Greenspan said the U.S. may soon face higher borrowing costs on its swelling debt and called for a “tectonic shift” in fiscal policy to contain borrowing.

“Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt challenge, Greenspan wrote in an opinion piece posted on the Wall Street Journal’s website. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80, he said.

Greenspan rebutted “misplaced” concern that reducing the deficit would put the economic recovery in danger, entering a debate among global policy makers about how quickly to exit from stimulus measures adopted during the financial crisis. U.S. Treasury Secretary Timothy F. Geithner said this month that while fiscal tightening is needed over the “medium term,” governments must reinforce the recovery in private demand.

“The United States, and most of the rest of the developed world, is in need of a tectonic shift in fiscal policy,” said Greenspan, 84, who served at the Fed’s helm from 1987 to 2006. “Incremental change will not be adequate.”

Rein in Debt

Pressure on capital markets would also be eased if the U.S. government “contained” the sale of Treasuries, he wrote.

“The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.”

Yields on U.S. Treasuries have benefitted from safe-haven demand in recent months because of the European debt crisis, a circumstance that may not last, said Greenspan, who now consults for clients including Pacific Investment Management Co., which has the world’s biggest bond fund.

Benchmark 10-year Treasury notes yielded 3.20 percent as of 12:11 p.m. in Tokyo today, down from the year’s high of 4.01 percent in April and compared with as high as 5.32 percent in June 2007, before the crisis began. Yields have remained low “despite the surge in federal debt to the public during the past 18 months to $8.6 trillion from $5.5 trillion,” Greenspan said.

The swing in demand toward American government debt and away from euro-denominated bonds is “temporary,” he said.

“Our economy cannot afford a major mistake in underestimating the corrosive momentum of this fiscal crisis,” Greenspan said. “Our policy focus must therefore err significantly on the side of restraint.”

Hyperinflation or Deflation? Dramatic Fiscal Austerity Measures: "Deficit Terrorists" Strike in the UK -- The USA is Next

Last week, England’s new government said it would abandon the previous government’s stimulus program and introduce the austerity measures required to pay down its estimated $1 trillion in debts. That means cutting public spending, laying off workers, reducing consumption, and increasing unemployment and bankruptcies. It also means shrinking the money supply, since virtually all “money” today originates as loans or debt. Reducing the outstanding debt will reduce the amount of money available to pay workers and buy goods, precipitating depression and further economic pain.

The financial sector has sometimes been accused of shrinking the money supply intentionally, in order to increase the demand for its own products. Bankers are in the debt business, and if governments are allowed to create enough money to keep themselves and their constituents out of debt, lenders will be out of business. The central banks charged with maintaining the banking business therefore insist on a “stable currency” at all costs, even if it means slashing services, laying off workers, and soaring debt and interest burdens. For the financial business to continue to boom, governments must not be allowed to create money themselves, either by printing it outright or by borrowing it into existence from their own government-owned banks.

Today this financial goal has largely been achieved. In most countries, 95% or more of the money supply is created by banks as loans (or “credit”). The small portion issued by the government is usually created just to replace lost or worn out bills or coins, not to fund new government programs. Early in the twentieth century, about 30% of the British currency was issued by the government as pounds sterling or coins, versus only about 3% today. In the U.S., only coins are now issued by the government. Dollar bills (Federal Reserve Notes) are issued by the Federal Reserve, which is privately owned by a consortium of banks.

Banks advance the principal but not the interest necessary to pay off their loans; and since bank loans are now virtually the only source of new money in the economy, the interest can only come from additional debt. For the banks, that means business continues to boom; while for the rest of the economy, it means cutbacks, belt-tightening and austerity. Since more must always be paid back than was advanced as credit, however, the system is inherently unstable. When the debt bubble becomes too large to be sustained, a recession or depression is precipitated, wiping out a major portion of the debt and allowing the whole process to begin again. This is called the “business cycle,” and it causes markets to vacillate wildly, allowing the monied interests that triggered the cycle to pick up real estate and other assets very cheaply on the down-swing.

The financial sector, which controls the money supply and can easily capture the media, cajoles the populace into compliance by selling its agenda as a “balanced budget,” “fiscal responsibility,” and saving future generations from a massive debt burden by suffering austerity measures now. Bill Mitchell, Professor of Economics at the University of New Castle in Australia, calls this “deficit terrorism.” Bank-created debt becomes more important than schools, medical care or infrastructure. Rather than “providing for the general welfare,” the purpose of government becomes to maintain the value of the investments of the government’s creditors.

England Dons the Hair Shirt

England’s new coalition government has just bought into this agenda, imposing on itself the sort of fiscal austerity that the International Monetary Fund (IMF) has long imposed on Third World countries, and has more recently imposed on European countries, including Latvia, Iceland, Ireland and Greece. Where those countries were forced into compliance by their creditors, however, England has tightened the screws voluntarily, having succumbed to the argument that it must pay down its debts to maintain the market for its bonds.

Deficit hawks point ominously to Greece, which has been virtually squeezed out of the private bond market because nobody wants its bonds. Greece has been forced to borrow from the IMF and the European Monetary Union (EMU), which have imposed draconian austerity measures as conditions for the loans. Like a Third World country owing money in a foreign currency, Greece cannot print Euros or borrow them from its own central bank, since those alternatives are forbidden under EMU rules. In a desperate attempt to save the Euro, the European Central Bank recently bent the rules by buying Greek bonds on the secondary market rather than lending to the Greek government directly, but the ECB has said it would “sterilize” these purchases by withdrawing an equivalent amount of liquidity from the market, making the deal a wash. (More on that below.)

Greece is stuck in the debt trap, but the UK is not a member of the EMU. Although it belongs to the European Union, it still trades in its own national currency, which it has the power to issue directly or to borrow from its own central bank. Like all central banks, the Bank of England is a “lender of last resort,” which means it can create money on its books without borrowing first. The government owns the Bank of England, so loans from the bank to the government would effectively be interest-free; and as long as the Bank of England is available to buy the bonds that don’t get sold on the private market, there need be no fear of a collapse of the value of the UK’s bonds.

The “deficit terrorists,” however, will have none of this obvious solution, ostensibly because of the fear of “hyperinflation.” A June 9 guest post by “Cameroni” on Rick Ackerman’s financial website takes this position. Titled “Britain Becomes the First to Choose Deflation,” it begins:

“David Cameron’s new Government in England announced Tuesday that it will introduce austerity measures to begin paying down the estimated one trillion (U.S. value) in debts held by the British Government. . . . [T]hat being said, we have just received the signal to an end to global stimulus measures -- one that puts a nail in the coffin of the debate on whether or not Britain would ‘print’ her way out of the debt crisis. . . . This is actually a celebratory moment although it will not feel like it for most. . . . Debts will have to be paid. . . . [S]tandards of living will decline . . . [but] it is a better future than what a hyperinflation would bring us all.”

Hyperinflation or Deflation?

The dreaded threat of hyperinflation is invariably trotted out to defeat proposals to solve the budget crises of governments by simply issuing the necessary funds, whether as debt (bonds) or as currency. What the deficit terrorists generally fail to mention is that before an economy can be threatened with hyperinflation, it has to pass through simple inflation; and governments everywhere have failed to get to that stage today, although trying mightily. Cameroni observes:

“[G]overnments all over the globe have already tried stimulating their way out of the recent credit crisis and recession to little avail. They have attempted fruitlessly to generate even mild inflation despite huge stimulus efforts and pointless spending.”

In fact, the money supply has been shrinking at an alarming rate. In a May 26 article in The Financial Times titled “US Money Supply Plunges at 1930s Pace as Obama Eyes Fresh Stimulus,” Ambrose Evans-Pritchard writes:

“The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of institutional money market funds fell at a 37pc rate, the sharpest drop ever.

“’It’s frightening,’ said Professor Tim Congdon from International Monetary Research. ‘The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly,’ he said.”

Too much money can hardly have been pumped into an economy in which the money supply is shrinking. But Cameroni concludes that since the stimulus efforts have failed to put needed money back into the money supply, the stimulus program should be abandoned in favor of its diametrical opposite -- belt-tightening austerity. He admits that the result will be devastating:

“[I]t will mean a long, slow and deliberate winding down until solvency is within reach. It will mean cities, states and counties will go bankrupt and not be rescued. And it will be painful. Public spending will be cut. Consumption could decline precipitously. Unemployment numbers may skyrocket and bankruptcies will stun readers of daily blogs like this one. It will put the brakes on growth around the world. . . . The Dow will crash and there will be ripple effects across the European union and eventually the globe. . . . Aid programs to the Third world will be gutted, and I cannot yet imagine the consequences that will bring to the poorest people on earth.”

But it will be “worth it,” says Cameroni, because it beats the inevitable hyperinflationary alternative, which “is just too distressing to consider.”

Hyperinflation, however, is a bogus threat, and before we reject the stimulus idea, we might ask why these programs have failed. Perhaps because they have been stimulating the wrong sector of the economy, the non-producing financial middlemen who precipitated the crisis in the first place. Governments have tried to “reflate” their flagging economies by throwing budget-crippling sums at the banks, but the banks have not deigned to pass those funds on to businesses and consumers as loans. Instead, they have used the cheap funds to speculate, buy up smaller banks, or buy safe government bonds, collecting a tidy interest from the very taxpayers who provided them with this cheap bailout money. Indeed, banks are required by their business models to pursue those profits over risky loans. Like all private corporations, they are there not to serve the public interest but to make money for their shareholders.

Seeking Solutions

The alternative to throwing massive amounts of money at the banks is not to further starve and punish businesses and individuals but to feed some stimulus to them directly, with public projects that provide needed services while creating jobs. There are many successful precedents for this approach, including the public works programs of England, Canada, Australia and New Zealand in the 1930s, 1940s and 1950s, which were funded with government-issued money either borrowed from their central banks or printed directly. The Bank of England was nationalized in 1946 by a strong Labor government that funded the National Health Service, a national railway service, and many other cost-effective public programs that served the economy well for decades afterwards.


In Australia during the current crisis, a stimulus package in which a cash handout was given directly to the people has worked temporarily, with no negative growth (recession) for two quarters, and unemployment held at around 5%. The government, however, borrowed the extra money privately rather than issuing it publicly, out of a misguided fear of hyperinflation. Better would have been to give interest-free credit through its own government-owned central bank to individuals and businesses agreeing to invest the money productively.

The Chinese have done better, expanding their economy at over 9% throughout the crisis by creating extra money that was mainly invested in public infrastructure.

The EMU countries are trapped in a deadly pyramid scheme, because they have abandoned their sovereign currencies for a Euro controlled by the ECB. Their deficits can only be funded with more debt, which is interest-bearing, so more must always be paid back than was borrowed. The ECB could provide some relief by engaging in “quantitative easing” (creating new Euros), but it has insisted it would do so only with “sterilization” – taking as much money out of the system as it puts back in. The EMU model is mathematically unsustainable and doomed to fail unless it is modified in some way, either by returning economic sovereignty to its member countries, or by consolidating them into one country with one government.

A third possibility, suggested by Professor Randall Wray and Jan Kregel, would be to assign the ECB the role of “employer of last resort,” using “quantitative easing” to hire the unemployed at a basic wage.

A fourth possibility would be for member countries to set up publicly-owned “development banks” on the Chinese model. These banks could issue credit in Euros for public projects, creating jobs and expanding the money supply in the same way that private banks do every day when they make loans. Private banks today are limited in their loan-generating potential by the capital requirement, toxic assets cluttering their books, a lack of creditworthy borrowers, and a business model that puts shareholder profit over the public interest. Publicly-owned banks would have the assets of the state to draw on for capital, a clean set of books, a mandate to serve the public, and a creditworthy borrower in the form of the nation itself, backed by the power to tax.

Unlike the EMU countries, the governments of England, the United States, and other sovereign nations can still borrow from their own central banks, funding much-needed programs essentially interest-free. They can but they probably won’t, because they have been deceived into relinquishing that sovereign power to an overreaching financial sector bent on controlling the money systems of the world privately and autocratically. Professor Carroll Quigley, an insider groomed by the international bankers, revealed this plan in 1966, writing in Tragedy and Hope:

“[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.”

Just as the EMU appeared to be on the verge of achieving that goal, however, it has started to come apart at the seams. Sovereignty may yet prevail.


Ellen Brown is a frequent contributor to Global Research. Global Research Articles by Ellen Brown

FDIC flashes code red

Banking system insolvent and expecting more bank failures. Since 2008 247 banks with $616 billion in assets have failed. History of Federal Reserve designed to protect the big banks.


The FDIC which technically supports the nation’s banking system is for all practical purposes insolvent. I’m not sure the magnitude of this problem has sunk into the psyche of the American public. The FDIC insures accounts at banks that include checking, saving, and CD accounts from a bank failure. This has occurred with regular frequency since the recession started 29 long months ago. Some 247 banks have failed since 2008 with a total asset base of $616 billion. The government has tried to calm the unsettled waters by raising the regular deposit coverage from $100,000 to $250,000 even though the FDIC deposit insurance fund is in the negative. This seems to have calmed the nerves of people since the days of long lines at IndyMac Bank in California but nothing has really changed at least at the core of the financial system. To the contrary things have worsened for the banking system.

The list of troubled banks continues to grow:

Source: Fortune, FDIC

This chart tells us that we should be gearing up for another round of bank failures. The increase of deposit insurance from $100,000 to $250,000 is largely a charade. 1 out of 3 Americans have absolutely no savings whatsoever. We have 17 percent unemployed or underemployed and another 20 to 25 percent working in the low paying service sector. Nearly 50 percent of Americans have nowhere close to $100,000 in liquid assets to insure, so increasing the insurance to $250,000 is merely a public relations move to show strength.

The current amount of assets at troubled banks is over $400 billion but since the FDIC doesn’t list all troubled banks this is much larger:

Source: FDIC

Now the above survey only goes up to the end of 2009. Since the start of the year another 82 banks have failed and the FDIC is probably at some undisclosed location somewhere in the United States right now getting ready to close another few banks since Fridays have become synonymous with bank closings. The list of troubled banks increasing is a reflection of the massive amount of troubled loans. These loans wouldn’t be in such deep trouble if the economy was healthy and Americans were servicing their loans. But the middle class isn’t really participating in this shadow recovery.

A recent survey by none other than the FDIC shows that a good portion of Americans don’t even participate in the banking system:

A substantial percentage of lower-income households are unbanked. Nearly 20 percent of lower income U.S. households—almost 7 million households earning below $30,000 per year—do not currently have a bank account. Households with earnings below $30,000 account for at least 71 percent of unbanked households.

Not having enough money to feel they need an account is the most common reason why unbanked households are not participating in the mainstream financial system.

Do these people care that accounts are insured up to $250,000? Who are we really protecting here? You also need to ask how we are going to pay for all these additional bank failures if the deposit insurance fund is already in the negative. That is where the Federal Reserve and U.S. Treasury step in with more of your taxpayer money.

The Federal Reserve attempts to paint this image as a government agency but they are not. They serve the purpose to protect the banking system. Even the Fed website gives us a nice little history on this:

“(Fed history) From December 1912 to December 1913, the Glass-Willis proposal was hotly debated, molded and reshaped. By December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law, it stood as a classic example of compromise—a decentralized central bank that balanced the competing interests of private banks and populist sentiment.”

There is much more back history to this but suffice it to say that this move helped consolidate the power of banks into a few hands instead of having many more banks competing for your business. Keep in mind when this past, the public was heavily against it just like the public was against TARP when this crisis rolled around. Yet the Fed listens to their big banks and protects them at all costs even if it means robbing the public blind (a sort of reverse Robin Hood). In the end after nearly 100 years of the Federal Reserve, the main purpose is nearly accomplished:

“The top 4 banks of Bank of America, JP Morgan Chase, Wells Fargo, and Citibank make up 55 percent of all banking assets.”

And banking assets across the country are enormous. The FDIC backs 8,000 banks that carry over $13 trillion in assets. These big four banks have their hands in over 50 percent of this amount. Who controls the wealth in this country controls the levers of political power. The way the system is currently setup we find that the banks have an incredible amount of power. Actually, it is the biggest banks that have the big power since they are fine with hundreds of little bank failures since that opens up the market for bigger banks to step in and open up shop. Smaller banks don’t have access to the easy money Federal Reserve window and certainly did not get handouts like many of the biggest banks did.

Foreclosures remain at record levels and this means banks are facing more and more loans that enter into default. This costs money. As we have mentioned, the FDIC is insolvent so where is this money coming from?

“(US Banker) Treasury likes it, the Federal Deposit Insurance Corp. likes it, and the banking industry likes it—that is, S. 541, introduced last week by Sen. Chris Dodd (D-Conn.) The bill would permanently increase the FDIC’s ability to borrow from the Treasury for its Deposit Insurance Fund, raising the cap to $100 billion from $30 billion, the limit set back in 1991. The Depositor Protection Act would also temporarily allow the FDIC to borrow up to $500 billion after consultations with Treasury, the Federal Reserve, and the President.

FDIC chairman Sheila Bair voiced enthusiasm in a letter to Dodd, noting “the FDIC believes it is prudent to adjust the statutory line of credit proportionally to leave no doubt that the FDIC can immediately access the necessary resources to resolve failing banks and provide timely protection to insured depositors.” Passage of the increased borrowing ability “would give the FDIC flexibility to reduce the size of the recent special assessment, while still maintaining assessments at a level that supports the DIF with industry funding.”

And there you have it. I am certain that the banks are spending large amounts of money creating a way to couch this additional bailout as a helping hand for middle class Americans but in the end if we don’t change the system, the money will flow through the same rivers as of those from the last decade. With so many bank failures lined up because of horrible commercial real estate and residential loans, we can expect to bailout indirectly failed casinos in Las Vegas and owning shopping malls in random parts of the country. The FDIC is flashing code red and they are lining up with hat in hand for taxpayer money. If after 29 months you still haven’t gotten it, this money is likely to funnel up to the top 1 percent in an incredibly unbalanced fashioned.

In jail for being in debt


You committed no crime, but an officer is knocking on your door. More Minnesotans are surprised to find themselves being locked up over debts.

As a sheriff's deputy dumped the contents of Joy Uhlmeyer's purse into a sealed bag, she begged to know why she had just been arrested while driving home to Richfield after an Easter visit with her elderly mother.

No one had an answer. Uhlmeyer spent a sleepless night in a frigid Anoka County holding cell, her hands tucked under her armpits for warmth. Then, handcuffed in a squad car, she was taken to downtown Minneapolis for booking. Finally, after 16 hours in limbo, jail officials fingerprinted Uhlmeyer and explained her offense -- missing a court hearing over an unpaid debt. "They have no right to do this to me," said the 57-year-old patient care advocate, her voice as soft as a whisper. "Not for a stupid credit card."

It's not a crime to owe money, and debtors' prisons were abolished in the United States in the 19th century. But people are routinely being thrown in jail for failing to pay debts. In Minnesota, which has some of the most creditor-friendly laws in the country, the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009, a Star Tribune analysis of state court data has found.

Not every warrant results in an arrest, but in Minnesota many debtors spend up to 48 hours in cells with criminals. Consumer attorneys say such arrests are increasing in many states, including Arkansas, Arizona and Washington, driven by a bad economy, high consumer debt and a growing industry that buys bad debts and employs every means available to collect.

Whether a debtor is locked up depends largely on where the person lives, because enforcement is inconsistent from state to state, and even county to county.

In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January, a judge sentenced a Kenney, Ill., man "to indefinite incarceration" until he came up with $300 toward a lumber yard debt.

Global warming book withdrawn

Millard Public Schools will stop using a children's book about global warming -- but only until the district can obtain copies with a factual error corrected.

A review committee, convened after parents complained, concluded that author Laurie David's book, "The Down-to-Earth Guide to Global Warming," contained "a major factual error" in a graphic about rising temperatures and carbon dioxide levels.

Mark Feldhausen, associate superintendent for educational services, this week sent a letter to parents who complained, including the wife of U.S. Rep. Lee Terry of Nebraska, outlining the committee's findings.

"Although the authors have pledged to correct the graph in subsequent editions, the committee recommends that this correction be made to all MPS-owned texts before using it with students in the future," Feldhausen wrote.

Corrected versions will continue to be used in Millard's sixth-grade language arts curriculum, he wrote.

However, the district will cease to use a companion video about global warming, narrated by actor Leonardo DiCaprio, he wrote.

The committee found the video "without merit" and recommended that it not be used.

Robyn Terry, the congressman's wife, had described the video as a "political commercial."

Lee and Robyn Terry released a statement saying they were pleased with the decision and "impressed" by the district’s handling of the case.

"We are pleased with their decision not to use the politically natured global warming video as a classroom instruction tool and that they have set a standard that information-based texts must be factually correct to be put in front of our children," they wrote.

A committee of five middle school parents, three teachers and one administrator met to determine whether the book and video served a proper purpose within the curriculum.

The book, new to the Millard curriculum this year, was part of "Plugged in to Non-Fiction," a collection of books on a variety of subjects. Parts of the book were required reading for sixth-graders in Millard reading and language-arts classes.

Three parents, including Robyn Terry, complained to the district. The Terrys’ 12-year-old son attended Beadle Middle School last year. Mrs. Terry said that the materials used in his class portrayed global warming as fact when scientists disagree.

In the video, DiCaprio attributes global warming to mankind’s "destructive addiction" to oil. He says "big corporations" and politicians gained too much money and power "on our addiction," making them "dangerously resistant to change."

In the letter to parents, Feldhausen said the committee recognized there are "multiple viewpoints" on global warming. The committee recommended that all teachers using the book "make students aware of both sides of the global warming theory," he said.

Nearly one million US workers cut off unemployment benefits

With 12 Democrats joining a unanimous Republican bloc, the US Senate voted Wednesday to defeat a proposed extension of unemployment benefits for workers who have been jobless for nearly two years. The bill would have extended unemployment benefits for those out of work more than six months, until November 30.

In the two and a half weeks since June 1, when the last extension expired, some 903,000 workers have seen their benefits cut off. By June 26, that number will top 1.2 million.

Meanwhile, the Labor Department reported that the number of new claims for unemployment compensation jumped to 472,000 last week, the highest figure in several months.

The result is that a Congress that rushed through a $700 billion bailout of Wall Street in October 2008 in a matter of days, and authorized a further financial windfall to the banks and speculators five months later, cannot bring itself to support even the most meager subsistence for the unemployed workers who are the victims, not the perpetrators, of the economic crisis.

The vote was taken under Senate rules, not to pass the legislation itself, but to “waive budgetary discipline” and allow passage by a simple majority rather than 60 votes out of 100. The result was 45 in favor and 52 against, with three senators absent. Senate Majority Leader Harry Reid had already abandoned an effort to adopt a cloture motion, closing debate, for lack of the necessary 60 votes. Three months ago a similar extension bill passed the Senate easily.

The unemployment extension is part of a larger bill that includes additional aid to state governments to cover Medicaid, the healthcare program for the poor, and to offset a potential 21 percent cut in reimbursements to doctors who treat Medicare patients.

The House of Representatives passed a version of the bill May 28 costing $113 billion, but without the Medicaid assistance to the states. The Senate version includes the Medicaid support, and costs a total of $140 billion, which sparked the unanimous no vote of the Republicans, as well as the opposition of the 12 Democrats, mainly conservatives, but including liberals like Russ Feingold of Wisconsin.

According to press reports, leading Senate Democrats are seeking to win votes from the bill’s opponents by eliminating a $25 a week increase in jobless benefits that was part of the 2009 stimulus package. In other words, either all 10 million jobless workers would see a $25 cut in benefits, from checks averaging $309 a week, or benefits for the 5.7 million long-term unemployed would be cut off completely. Either way, those deprived of work by the economic crisis of capitalism, the most vulnerable section of the working class, will be made to pay.

One of the dozen right-wing Democrats who voted against the bill, Senator Ben Nelson of Nebraska, reiterated his opposition to Capitol Hill reporters. He cited concerns about the federal deficit, after rejecting a new version of the bill that would cost $20 billion less.

“Borrowing and deficit spending at the point of an economic crisis—and we were in a severe one in late 2008 and early 2009—is one thing,” Nelson said. “But when you’re in an economic recovery, as we are today, borrowing and deficit spending is another thing.”

Another Democratic “no” vote, Senator Mary Landrieu of Louisiana, told Fox News through a spokesman that she was particularly opposed to a provision in the bill that would have raised taxes on the oil and gas industry from 8 cents a barrel to 49 cents, raising $18.3 billion to replenish the Oil Liability Trust Fund.

Besides the oil industry tax, there is enormous business opposition to a proposed increase in the tax on the compensation of hedge fund managers—much of it currently taxed not as income but at the much lower capital gains rate—as well as a tax increase on investment partnerships. Lobbying against this provision was said to be especially heavy on the part of companies like Blackstone.

A Republican alternative, introduced by Senator John Thune of South Dakota, would have extended jobless benefits and selected tax credits for business, but at the price of a 5 percent across-the-board cut in all federal discretionary spending (with the military-intelligence apparatus excluded, of course). This was defeated by a 41 to 57 margin.

Big business politicians of both parties have expressed their disdain for the unemployed, suggesting that extended unemployment benefits, now set at 99 weeks, are encouraging jobless workers to stay home and not look for work. Georgia Republican Congressman John Linder said that extended benefits were “too much of an allure.”

Senator Diane Feinstein, a multi-millionaire Democrat from California, complained, “We have 99 weeks of unemployment insurance. The question comes, how long do you continue that before people just don’t go back to work at all?” California has a 12.6 percent unemployment rate, with 880,000 workers unemployed for 27 weeks or more, and receiving extended benefits.

Senator Claire McCaskill, a Missouri Democrat with particularly close ties to the White House, voted against the unemployment extension and backed the $25 a week cut. “This is not something that can go on indefinitely,” she said. Otherwise, “it begins to look like a brand-new level of entitlement program, which is something that we really can’t afford to do right now.”

Reports in the corporate-controlled media invariably cite mass popular opposition to higher federal deficits as the reason for the shift by a section of the Democratic Party to opposing extended unemployment benefits. However, the claim that working people are up in arms over deficit spending is a spurious one, identifying the media-promoted antics of the Tea Party and other right-wing groups as a genuine popular movement.

The same polls that document overwhelming popular hostility to the bailout of Wall Street and the Obama administration’s kid-glove treatment of BP show that the vast majority believe that jobless benefits should be extended and that emergency measures should be taken to provide jobs for the unemployed.

While the White House and Congress wrangle over the smallest of subsistence measures for the jobless, neither party nor the corporate elite as a whole propose to do anything to provide jobs for the unemployed. The Wall Street Journal reported last week that American corporations have increased their cash reserves to $1.84 trillion, the highest figure in history.

In other words, big business and the banks, after an unprecedented bailout by the public treasury, are hoarding the funds that could put millions back to work. The cash reserves of major corporations have jumped 26 percent in one year, the largest percentage increase in nearly 60 years. The cash reserves of working people, and particularly the unemployed, have not been so fortunate.

While the treatment of the unemployed is the most glaring expression of the callousness and indifference of the wealthy, the opposition to the Medicaid assistance to the states is not far behind. Medicaid, which pays for medical care for the poor, is the largest single budgetary item in most states, with 80 percent of the cost borne by the federal government and 20 percent by the states.

Most US states must balance their books for a fiscal year that ends June 30, and many have already included the promised Medicaid assistance as part of their financial planning. After the House stripped the Medicaid spending from its version of the bill, Obama sent a letter to House and Senate leaders on June 13, urging them to restore the aid to the states and warning that without it there would be “massive layoffs of teachers, police and firefighters.”

According to the National Governors Association, total state government spending has dropped for two years in a row, the first time such a decline has been recorded. State governments eliminated $300 billion in cumulative deficits over this two-year period, through a combination of spending cuts and tax increases, usually in regressive sales and excise taxes.

A report issued by the Center on Budget and Policy Planning, a liberal Washington study group, warned that without federal aid, as many as 34 states could impose drastic and unprecedented budget cuts beginning July 1, cutting as many as 900,000 jobs in education and other public services.

Already, 28 states have ordered across-the-board budget cuts, 22 states have imposed payless furloughs on employees, and 25 states and Puerto Rico have laid off state workers.

‘HOLOCAUST INDUSTRY’ UNDER ATTACK

HATE SPEECH OR TRUTH?
And just who is doing the hating??


German legislator: Stop ‘thriving Holocaust industry’

Extreme right leader carries hate speech against Israel; calls to cut ties, issue economic sanctions

Dor Glick


BERLIN “Stop cooperation with the state of Jewish scoundrels”, “Don’t give in to the thriving Holocaust industry.” These statements were not said in the Tehran parliament, but in the German city of Dresden, during a parliament meeting in the state of Saxony.

Leader of the extreme right National Democratic Party (NPD) Holger Apfel stirred up a storm in the parliament on Thursday when he carried a speech titled “no to cooperation with scoundrel countries – and end cooperation between Saxony and Israel.”

Most parliament members urged Apfel to change the title, fearing it would damage Saxony’s image – but to no avail. Apfel, a former neo-Nazi, stepped up to the podium and carried out his hate speech, while being booed by other parliament members.

Even after his time was up, Apfel refused to step down from the stage and continued to denounce the “Jewish terror state.” His speech was finally stopped after the chairman turned off his microphone and instructed ushers to escort Apfel out of the hall.

President of the Saxony Parliament Matthias Roessler instructed to keep Apfel out of parliament hearings until December.

This is not the first time Apfel has expressed his harsh feeling toward Israel, and the need to cut ties with it. On NPS’ official website, the former neo-Nazi published his reaction to the recent flotilla incident, saying: “Today’s attack, with at least 10 fatalities, demonstrates a new ‘characteristic’ of ‘state terror’ employed by Israel.

“Since the establishment of the state in 1948 and the expulsion of millions of Palestinians – the history of Israel has been accompanied by bloodshed.”

Apfel called to “cut off Germany’s political ties with Israel and issue economic sanctions against it.”


NOTE FROM DESERTPEACE…..

The above in no way is meant to applaud the neo nazi that uttered those words…. it is posted here to point out the EVEN the neo nazis in Germany and elsewhere, who have until now been ardent supporters of the zionist state no longer do because of the policies practiced in Israel.

Visualizing the BP Oil Spill Disaster

Click this link ..... http://tinyurl.com/2u5rfu7

The “Snowball” Scenario Sinks Sovereigns

A blockbuster draft report from the European Commission saw the light of day recently, thanks to some reporting from Bloomberg. It highlights an incredibly dangerous Catch-22 facing many sovereign nations — the “Snowball Scenario.”

Let me give you an example how this works …

Suppose country A’s economy goes into the tank. The government responds by borrowing boatloads of money and spending like mad on stimulus packages.

The markets allow it to go on for a while. But then investors start to get antsy about all the debt being added to the government’s balance sheet. So they start dumping its bonds, driving prices lower and rates higher. That, in turn, forces the country to implement austerity measures to get its debt and deficit under control.

The problem?

Those moves send the economy BACK into the crapper! Government spending has to rise yet again to pay for things like unemployment insurance, new stimulus packages, and so on … at the same time tax revenues fall. That drives debts and deficits even higher.

The end game in this snowball scenario? A sovereign default!

And that’s not just a theory. In fact …

Snowballs Are Already Rolling Downhill in Spain, Greece, and Portugal

Spain is trying to slash its budget deficit from 11.2 percent to 9.3 percent in 2010 and 6 percent in 2011. Portugal wants to cut its deficit from 9.4 percent to 7.3 percent this year and 4.6 percent next year. They plan to do so by some combination of pension freezes, wage cuts, new taxes, and other measures.

But the European Commission, which is the executive arm of the European Union, says that probably won’t be enough. Its conclusion?

“While the newly announced measures are significant and the targets imply impressive budgetary consolidation, more measures are needed to meet those targets.”

The EU has told Spain and Portugal to get their budgets back in shape.
The EU has told Spain and Portugal to get their budgets back in shape.

In plain English, the message is “Get even tougher! Crack down more! Slash spending! Raise taxes!”

But as the Commission admits, the governments it is counseling face “low GDP growth, poor competitiveness, stable or declining prices and wages and high real interest rates.” So it’s virtually impossible to avoid a “snowball effect on the government debt.”

Stay Cautious! Stay Safe!

Bond traders aren’t dumb. They can see this coming from a mile away. Yields on Spanish 2-year notes shot up recently, then eased a bit. But now they’re rallying yet again — hitting a new cycle high just this week.

Spanish borrowing costs have skyrocketed from 1.51 percent in March to 3.29 percent, the highest in 17 months! It now costs more on a relative basis for Spain to borrow than it does the euro-area’s main economy, Germany. And it’s the highest that the 10-year Spanish/German yield spread has been since 1999 — when the euro currency debuted.

Portugal is seeing costs rise, too. It’s paying 5.58 percent to borrow money for 10 years, up from 4.15 percent back in April.

Reports are surfacing that Spain may need a 250 billion euro ($307 billion) credit line from the International Monetary Fund, the European Union, and possibly the U.S. Treasury.

Naturally, policymakers are denying that anything is in the works. But what do you expect them to do? These guys said the same thing about Greece, claiming it wasn’t at risk of defaulting. Then they pushed through a $135 billion bailout!

Use market rallies as selling opportunities.
Use market rallies as selling opportunities.

In short, this sovereign debt crisis is playing out just like the private credit market crisis did before. It comes in waves — with periodic sharp drops triggered by some event, then some kind of bailout that makes everybody breathe a temporary sigh of relief, and finally yet another plunge as another hole appears in the dike.

My advice?

Don’t get suckered in by the short-term rallies. This sovereign debt crisis is nowhere near over, and that means you have to stay cautious and safe in your investments.

Consider using inverse ETFs to hedge risk, keeping positions small, and dumping stocks into sharp rallies if you’re lucky enough to get them.

Until next time,

Mike

Medvedev Says He ‘Cannot Rule Out’ Collapse of Euro (Update3)

(Updates with comments quote on BP in seventh paragraph. Click EXT5 for more on the St. Petersburg forum.)

By Lyubov Pronina

June 18 (Bloomberg) -- Russian President Dmitry Medvedev says he can’t rule out the collapse of the euro as the European Union struggles to contain the sovereign debt crisis.

Asked if the emergency could threaten the single currency, Medvedev said, “So far, no. But one cannot rule out this danger because at least a unique situation has emerged,” according to the text of an interview with the Wall Street Journal that was provided by the Russian government.

Russia will help lead the effort to recast the world economic hierarchy after the global financial crisis, Medvedev said today at the St. Petersburg International Economic Forum. The government will use tax incentives and other free-market economic policies to attract investment, he said, as Russia seeks to diversify its economy away from natural resources.

“We really live at a unique time, and we should use it to build a modern, prosperous and strong Russia, a Russia that will be a co-founder of the new world economic order,” Medvedev told an audience that included Citigroup Inc. Chief Executive Officer Vikram Pandit and French Economy Minister Christine Lagarde.

Medvedev, 44, travels to the U.S. next week for talks with U.S. President Barack Obama before heading to Canada for a meeting of the Group of 20 nations. The Wall Street Journal interview touched on issues ranging from the BP Plc oil spill in the Gulf of Mexico to Iran and recent violence in Kyrgyzstan.

BP Concerns

The Russian president suggested the oil spill, which forced London-based BP to set aside $20 billion for potential damages, could lead to the breakup of the company and said he wanted to make sure the interests of Russian shareholders in TNK-BP are safeguarded, according to the interview text. TNK-BP, which accounts for almost a quarter of BP’s output, is half-owned by Russian billionaires, including Viktor Vekselberg.

“How they will be able to digest these losses, whether it will lead to annihilation of the company itself, to its break up, this is a feasibility issue,” Medvedev said of BP. “We would like, speaking frankly, the interests of Russian investors that created a joint business with BP to somehow be ensured.”

Medvedev backed the sanctions against Iran that were passed by the UN Security Council on June 9. The measures, which call for a tighter arms embargo, authority to seize cargo that could be used in nuclear weapons, and restrictions on financial transactions with Iran, represent a balanced approach, he said.

“The sanctions that have been imposed are strict enough, yet at the same time they do not harm the Iranian people,” Medvedev said in the interview. “They may push the Iranian leadership to, at some point, take a decision on closer cooperation with the global community” and the International Atomic Energy Agency.

‘Unilateral Sanctions’

The U.S. and EU have further than the UN resolution, with European leaders approving penalties that target the oil and gas industry, including the prohibition of new investment, technical assistance and technology transfers.

“Unilateral sanctions, be it U.S. sanctions or those of the EU or any other countries, would worsen the situation because they are not agreed upon with anyone,” Medvedev said.

Medvedev also said that the U.S. air base in Kyrgyzstan, a key installation for American operations in Afghanistan, should be closed down once its job is done.

Kyrgyzstan, a former Soviet republic, has been the scene of sporadic violence since April, when President Kurmanbek Bakiyev was ousted and replaced by an interim government. At least 189 people have died in fighting between Kyrgyz and Uzbek groups in the Central Asian nation over the past seven days.

If the base “is needed for fighting terrorism, for bringing order, then OK,” Medvedev said. “But it is obvious, and it is my position and I speak openly about it, that it should not exist forever. It should, in my opinion, resolve concrete tasks and complete its work.”

--With assistance from Lucian Kim in St. Petersburg. Editors: Willy Morris, John Simpson

Standard & Poor's downgrades Miami bond rating by two notches

Shaky municipal finances prompted Standard & Poor to slash the rating by two notches, meaning interest rates to build parking facilities at Marlins Ballpark will rise

A key agency has downgraded cash-strapped Miami's bond credit rating, a shift that will leave the public footing a higher bill for big-ticket projects, including parking garages for the new Marlins ballpark.

Standard & Poor's Ratings Services dropped two of the city's critical bond credit ratings by two notches, making it more expensive for Miami to borrow money at a time the city is scrambling to keep its budget afloat.

``That will have a significant impact on the cost of projects,'' said Tom Tew, a Miami securities attorney who has represented the city in the past. ``This is just another straw on the camel's back.''

Standard & Poor's lowered the rating for general obligation bonds -- usually backed by property taxes -- from A+ to A-, and the rating for bonds backed by other revenues from A to BBB+. The rating agency cited the city's climbing employee pension costs and unwillingness to raise taxes as reasons for its negative credit outlook.

``They have skepticism of the ability of the city to reduce expenses,'' City Manager Carlos Migoya said Thursday.

``I feel very confident that we'll be able to do that,'' he added -- possibly through employee union negotiations or layoffs.

The most immediate fallout: Funding for the city to build surface parking lots and four garages at the Marlins' new home in Little Havana.

Miami plans to float $104 million in bonds next month to finance the garages. Because of the lower bond rating, it will cost the city $15 million more to pay off those bonds over the next 30 years, the city manager estimated.

Migoya said that is about $15 million less than the garages would have cost over three decades if the city were building during boom times with higher construction prices.

The bonds will be paid off with money from a variety of sources, including a convention development tax generated by hotel sales and the average $10 the Marlins will pay the city to buy almost all of the parking spaces.

The manager said the credit downgrade should not delay construction. Work began this month after the city borrowed $3 million from a capital fund and received a $20 million bridge loan. The Marlins hope to begin play at the new ballpark on Opening Day in April 2012.

The rating downgrade is the latest dark financial cloud over the city.

Two months ago, another agency, Moody's Investors Service, shifted the city's credit outlook from a stable to a negative position, an indication that Miami's bond rating was poised to take a hit.

Miami leaders have had to raid the city's reserves to plug budget holes, including using $54 million from the rainy-day fund earlier this year to balance the 2009 budget.

The U.S. Securities and Exchange Commission continues to scrutinize whether the city hid its financial troubles from investors over the past three years, a review with potentially far-reaching budget implications.

Last week, city leaders discussed a controversial doomsday scenario: laying off more than 1,100 employees to fill a $100 million budget hole. Commissioners have sounded wary of raising taxes to cover the shortfall.

Against this backdrop, credit agencies are under pressure across the country to redo municipal bond ratings as home sales and property taxes -- local governments' main source of revenue -- tumble in the slumping economy.

Standard & Poor's noted Miami's historical difficulty with cutting expenses, and said cutbacks probably would not be enough without structural changes to labor contracts.

``The city's financial flexibility has been greatly reduced by growing fixed costs and limited tax-raising flexibility and willingness,'' the agency's report said, adding that the absence of ``considerable expenditure reductions could lead to further credit deterioration.''

Officials Worried About The Gulf Cleanup Materials Sent To Their Landfills

cleanupwaste_942d5.jpg

They have good reason to worry. Even though BP claims otherwise, we just don't know for sure and you shouldn't just dump it anywhere (although I suspect they will, anyway):

About 35,000 bags — or 250 tons — of oily trash have been carted away from this beach, said Lt. Patrick Hanley of the Coast Guard, who is stationed at Port Fourchon. And as of Monday, more than 175,000 gallons of liquid waste — a combination of oil and water — had been sent to landfills, as had 11,276 cubic yards of solid waste, said Petty Officer Gail Dale, also of the Coast Guard, who works with at the command center in Houma.

Michael Condon, BP’s environmental unit leader, said that tests have shown that the material is not hazardous, and can safely be stored in landfills around the region that accept oil industry debris. The checklist and procedures involved, Mr. Condon said, are part of a process “we do very well and have done for a long time.”

But some local officials, environmental lawyers and residents who live near landfill sites are not convinced.

“There’s no way that isn’t toxic,” said Gladstone Jones III, a New Orleans lawyer who has spent much of his career trying to get compensation for plaintiffs he says have been harmed by exposure to toxic waste.

In fact, waste from oil exploration and production falls into a regulatory no man’s land, neither exactly benign nor toxic on its face. The compounds in oil most dangerous to human health — like benzene, a carcinogen — are volatile and tend to dissipate when crude oil reaches the ocean surface, or soon thereafter. But some toxicologists say it is impossible to know whether the toxic chemicals are entirely gone.

The FCC’s Grand Plan to Control Your Internet, TV, and Phone?

This Thursday, the FCC opens up comments on its proposal regulate the Internet. While no one is quite sure all that it will contain, Scott Cleland (a long-time telecom policy expert and insider) has pieced together recent FCC filings from Google to outline how Net Neutrality regulations could be part of a grand plan to control how virtually all media enters your home. Here's a brief summary:

Under the guise of “Net Neutrality” and “consumer protection” the FCC would begin regulating Internet access for the first time under a completely new regulatory scheme (even though they lack the authority to create it). Meanwhile, the FCC would push regulations – cloaked in the heart-warming language of competition and innovation – mandating that your cable box (known as a set-top box) become a “broadband gateway device” controlling access to your Internet, TV, and phone. The FCC has already started looking at set-top box regulations in their National Broadband Plan.

The FCC would then begin setting rates for the total cost of all three services. Chairman Genachowski said he does not intend to set prices for Internet access. However, the legal maneuvering is so tenuous and the desire from left-wing groups so strong that a mere promise to “forbear” from rate setting is certainly no guarantee. On top of this, it would open the door for the FCC to begin monitoring or censoring content on the Internet (in addition to your TV), something Free Press and other progressives, as well as the White House regulatory czar advocate. The Songwriters Guild of America has a great op-ed on why government censorship is entirely possible if the Internet becomes regulated.

This plan outlines a dark hypothetical world that would effectively destroy any future competition for services and turn our nation’s networks into “dumb pipes” under government centralized control. Everyone will buy an Internet/TV/Phone connectivity box that the government approves. Everyone will pay rates for service that the government sets. And everything passing through your Internet, TV, or phone would become subject to the FCC’s consistent regulatory whim.

Worst of all, this extreme case of political favoritism for Google’s business model (which is developing set-top boxes and carrying all content to users for "free") is not out of the realm of possibility. Both Google and the socialist organization Free Press have long pushed for such regulations and both are arguably the closest groups to FCC Chairman Julius Genachowski. They are also strong supporters of President Obama who are calling for their payoff. The former head of Google’s policy shop is now Chief Technology Officer at the White House and Free Press’s former press director is the FCC’s spokesperson.

There are a lot of hurdles for the FCC should they choose this horrendously anti-free market route to take over the nation’s Internet networks and control the flow of media. Already facing severe bipartisan opposition from Congress and the court, the FCC would certainly invite another legal challenge. But if it works, Internet, phone, and TV service will simply become Google Chrome, Android/Google-Voice, and Google TV.

New video shows evolution of Deepwater Horizon Oil Spill, April 20-June 13

Click this link ..... http://www.youtube.com/watch?v=cqSoLW2_CPg

OIL SPILL FOOTAGE FROM CNN SHOWS POSSIBLE FRAUD OR HOAX AT 5000FT UNDER THE SEA

Click this link ...... http://www.youtube.com/watch?v=Y7IZ6ETAn4w

Gates: Iran Might Attack Europe With ‘Hundreds of Missiles’

In what must be among the wildest speculations of the Obama Administration, Secretary of Defense Robert Gates sought to defend a massive US missile defense system in Europe by guessing that Iran might fire “scores or even hundreds of missiles” at Europe.

The number given is based on estimates of the size of Iran’s long range missile arsenal, and the fact that the best of Iran’s missiles has a maximum range which would allow them, if fired from Iran’s western border, to reach the southeastern tip of Europe.

This would hypothetically allow Iran to really put a hurting on a nation like Croatia or Macedonia, though why on earth this is even a topic of discussion is unclear, as Iran has no conceivable reason for doing so.

Still, this sort of idle speculation is more than enough for the administration to sell the enormously expensive missile defense and its dubious utility, even in the midst of a budget crisis.

Absent from all of this, of course, is that the US hasn’t put its missile defense in southeastern Europe, but well outside of Iran’s missile range, along the Russian border.

Which of course is the other reason for wild speculation about the Iranian “threat.” Russia isn’t too keen on the US putting so many missiles along their frontier, and the Obama Administration is struggling to convince people, beyond all reason, that the missiles have something to do with Iran, not Russia.

BREAKING: Banks In Oaxaca, Mexico No Longer Accept American Dollars 6/17/10

Banks In Oaxaca, Mexico No Longer Accept American Dollars
SoCal Martial Law Alerts
June 17, 2010



FRESNO, California -- SoCal Martial Law Alerts (SCMLA) interviewed Lee, an American who discovered while on a recent (Christian) mission trip to Oaxaca, Mexico, that Mexican banks will no longer exchange American dollars for Mexican pesos.

Lee said that, when he first arrived in Oaxaca two weeks ago, the banks would still exchange American dollars for Mexican pesos, but then when he accompanied a friend to a Mexican bank approximately one week ago, that's when he discovered the policy change regarding dollar-to-peso currency exchanges.