Monday, May 16, 2011

On-duty cop accused of sex with prostitute in squad car

DETROIT - Detroit police are investigating allegations that an on-duty officer had sex in his squad car with a prostitute, officials said Friday.

Details were scarce, but police said internal affairs investigators are looking into the allegations that the officer engaged in sex acts with the prostitute in his police cruiser about two weeks ago while it was parked somewhere in the Northeastern District. The officer is assigned to the department's Western District, police said.

The officer was on duty when other officers approached the car and found him engaged in sexual activity, police said.

"Right now the officer is suspended with pay," said Officer Dan Donakowski, a police department spokesman. "It is under investigation."

The Board of Police Commissioners, which has civilian oversight over officers, is aware of the allegations.

The Rev. Jerome Warfield, the police commission's chairman, said a cop having sex with a prostitute "certainly could lead to termination, if the allegation is true."

Police spokeswoman Sgt. Eren Stephens said Chief Ralph Godbee Jr. will seek to have the officer's pay suspended while the issue is investigated.

Stephens said Godbee would not comment further on the matter. But Godbee told WJBK-TV that he would take quick action.

"Certainly, the allegations relative to the misconduct, even from an administrative standpoint, are troubling enough to where I think we should take very swift action as a police department," Godbee told the station.

Exclusif : « Je regrette d’avoir dissuadé ma fille de porter plainte contre DSK »

Anne Mansouret, conseillère générale de l’Eure et régionale de Haute-Normandie, candidate aux primaires socialistes pour l’élection présidentielle de 2012, confirme ce dimanche que sa fille aurait été victime d’une tentative d’agression sexuelle de la part de Dominique Strauss-kahn en 2002, comme elle l’a révélé en 2007 dans une émission de Thierry Ardisson. Aujourd’hui, la mère de Tristane Banon regrette d’avoir dissuadé sa fille à porter plainte.

Dominique Strauss-Kahn, directeur du Fond monétaire international, candidat possible à l’investiture socialiste pour l’élection présidentielle de 2012, a été arrêté et inculpé à New York pour « agression sexuelle, tentative de viol et séquestration ». Une plainte a été déposée à son encontre samedi par une femme de chambre de 32 ans travaillant à l’hôtel Sofitel, situé dans la 44e Rue Ouest, au cœur de Manhattan. Des faits qu’il conteste. Son avocat a déjà prévenu qu’il allait plaider non-coupable.

Ce n’est pas la première fois que l’ancien ministre de l’Economie et des Finances de Lionel Jospin est accusé d’avoir commis une agression sexuelle sur une femme. Tristane Banon, journaliste et romancière, a affirmé en 2007 dans une émission de Thierry Ardisson que DSK a tenté de la violer. Sans toutefois le citer nommément. Dans « 93, faubourg Saint-Honoré », un programme télévisé disparu, elle évoque un « chimpanzé en rut ».

« J’ai dit le mot « viol » pour lui faire peur, ça ne lui a pas fait peur »

En 2002, pour l’écriture de son premier livre « Erreurs avouées… au masculin » (paru chez Anne Carrière), la jeune femme, aujourd’hui âgée de 31 ans, avait souhaité le rencontrer. Il l’avait invité dans « un appartement vide, avec un magnétoscope, une télé, un lit au fond, des poutres apparentes ». La victime présumée raconte : « Il a voulu que je lui tienne la main pour répondre, puis le bras… On a fini par se battre, on s’est battu au sol, j’ai donné des coups de pied, il a dégrafé mon soutien-gorge, il a essayé d’enlever mon jean. Quand on se battait, j’ai dit le mot « viol » pour lui faire peur, ça ne lui a pas fait peur ».

Tristane Banon n’a cependant pas porté plainte. « Je suis allée très loin, j’ai constitué le dossier, je suis allée voir un avocat, mais je ne suis pas allée jusqu’au bout », explique la jeune femme qui, par ailleurs, connaît bien Dominique Strauss-kahn puisqu’elle est l’une des meilleures amies de Camille, l’une des filles de l’homme politique. Elle est la filleule de la seconde épouse de DSK. « Je ne voulais pas être jusqu’à la fin de mes jours la fille qui a eu un problème avec un homme politique », poursuit-elle dans son interview accordée à Thierry Ardisson.

C’est sa mère, Anne Mansouret, conseillère générale de l’Eure et régionale de Haute-Normandie, candidate aux primaires socialistes pour l’élection présidentielle de 2012, qui l’aurait dissuadée d’intenter une action en justice contre, à l’époque, le futur directeur du FMI. Contactée ce dimanche, l’élue normande a des remords : « Aujourd’hui, je regrette d’avoir dissuadé ma fille de porter plainte contre DSK. je porte une lourde responsabilité. Après les faits, on a discuté, beaucoup parlé. Et finalement, elle a décidé, on a décidé, de ne pas lancer de procédure. Vous savez ma fille était très mal, mais Tristane est la filleule de la seconde femme de Dominique. C’était délicat pour des raisons familiales et amicales ». « Ce que je peux vous dire, précise encore l’élue normande, c’est que ma fille, malgré les années qui passent, est toujours bouleversée par ces faits. Cette nuit, je suis allée la voir à Paris pour la réconforter. C’est très dur pour elle ».

« Pour moi, Dominique Strauss-Kahn est malade »

Sur ces nouvelles accusations venues d’Outre-Atlantique qui valent au patron du FMI d’être inculpé ce dimanche, Anne Mansouret dit ne pas être surprise : « Pour moi, Dominique Strauss-Kahn est malade . Ce n’est pas une injure de dire cela , il a un vrai problème: une addiction au sexe , comme d’autres ont des soucis avec l’alcool, la drogue ou le jeu. Il est malade. Sur les faits eux-mêmes, je ne peux pas me prononcer, je n’y étais pas. Mais pour moi, c’est très plausible que cette femme a été agressée sexuellement. En revanche, je suis formelle, il a bien tenté d’abuser de Tristane ». Des accusations lourdes, mais « fondées » selon l’élue socialiste, qui refuse qu’un lien soit fait entre sa candidature aux primaires de son parti et ses propos. « Certes, je me présente, mais il faut être raisonnable. Je ne me fais guère d’illusion. Je veux simplement faire entendre mes opinions politiques, mes projets pour la France ».

Pour l’heure, Tristane Banon ne souhaiterait pas s’exprimer. Elle a contacté son avocat ce matin et devrait dans les prochains jours tenir une conférence de presse. Anne Mansouret confie que sa fille réaffirmera ses accusations contre Dominique Strauss-Kahn. Si ce témoignage est avéré, les choses pourraient encore se compliquer pour DSK, car la justice française, cette fois-ci, pourrait s’emparer de ce dossier. Les faits ne sont pas prescrits.

CHART: Who Funds The IMF?

The correct answer is... you.

This chart explains in simple terms why you often hear that U.S. taxpayers are bailing out foreign nations - because we provide approximately 17% of IMF funds.

Meanwhile, the IMF makes no secret of their desire to abandon the dollar and create their own world reserve currency. See this story...

Military Pay Cut in 1/2 after Killing Osama bin Laden

U.S. Soldiers Report Paychecks Cut In HALF After KILLING Osama bin Laden

ALERT: While all of America was rejoicing over the news that Osama bin Laden had finally been KILLED by U.S. Soldiers...

Barack Obama was already trying to get those soldiers' paychecks CUT IN HALF -- and was threatening to hold their ENTIRE paychecks back, if he didn't "get his way" on his budget-busting plan to put America trillions of dollars deeper in debt!

Obama, of course, is taking the credit for killing bin Laden. And Americans are graciously willing to give him a pass on that, because we're just so dang glad we finally got that S.O.B.

But let's be clear on this: Barack Hussein Obama did NOT kill Osama bin Laden -- an American soldier did. Obama just happened to be the one in office when our soldiers finally found bin Laden and took him out. This is NOT an Obama victory -- it's an AMERICAN victory.

And that American soldier, who risked his life to ensure ours was safe... is now in danger of having his PAY held hostage by Barack Obama and Harry Reid, if they don't get the increased DEBT limit they are demanding, so they can spend TRILLIONS MORE DOLLARS that America doesn't have!

You read that right: Obama wants the power to BANKRUPT AMERICA, or else he'll HOLD THE PAY OF OUR MILITARY! And he's already started by holding half their paychecks!


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College Conspiracy - California Prison Academy Is Better Than a Harvard Degree

Thank the student loan industry for out-of-control costs at U.S. universities. As a point of reference, I started my first year at the University of Virginia in September 1984. Tuition was $7,000 per year for out of state students and $7800 4 years later when I graduated. I was also accepted at Stanford in 1984 where tuition was $15,000. In 2011, UVa tuition for out of state students will be approximately $33,000 per year and Stanford $50,000.

What used to cost a nice car now costs a home. When any smart 18 year-old with a pulse can get $200k in student loans in exchange for her signature, is it any surprise that college tuition rates have skyrocketed.

Meanwhile...

Prison guards can retire at the age of 55 and earn 85% of their final year's salary for the rest of their lives. They also continue to receive medical benefits.

Roughly 2,000 students have to decide by Sunday whether to accept a spot at Harvard. Here's some advice: Forget Harvard. If you want to earn big bucks and retire young, you're better off becoming a California prison guard.

The job might not sound glamorous, but a brochure from the California Department of Corrections and Rehabilitations boasts that it "has been called 'the greatest entry-level job in California'—and for good reason. Our officers earn a great salary, and a retirement package you just can't find in private industry. We even pay you to attend our academy." That's right—instead of paying more than $200,000 to attend Harvard, you could earn $3,050 a month at cadet academy.

It gets better.

Training only takes four months, and upon graduating you can look forward to a job with great health, dental and vision benefits and a starting base salary between $45,288 and $65,364. By comparison, Harvard grads can expect to earn $49,897 fresh out of college and $124,759 after 20 years.

As a California prison guard, you can make six figures in overtime and bonuses alone. While Harvard-educated lawyers and consultants often have to work long hours with little recompense besides Chinese take-out, prison guards receive time-and-a-half whenever they work more than 40 hours a week. One sergeant with a base salary of $81,683 collected $114,334 in overtime and $8,648 in bonuses last year, and he's not even the highest paid.

Sure, Harvard grads working in the private sector get bonuses, too, but only if they're good at what they do. Prison guards receive a $1,560 "fitness" bonus just for getting an annual check-up.

Most Harvard grads only get three weeks of vacation each year, even after working for 20 years—and they're often too busy to take a long trip. Prison guards, on the other hand, get seven weeks of vacation, five of them paid. If they're too busy racking up overtime to use their vacation days, they can cash the days in when they retire. There's no cap on how many vacation days they can cash in! Eighty officers last year cashed in over $100,000 at retirement.

The cherry on top is the defined-benefit pension. Unlike most Harvard grads working in the private sector, prison guards don't have to delay retirement if their 401(k)s take a hit. Prison guards can retire at the age of 55 and earn 85% of their final year's salary for the rest of their lives. They also continue to receive medical benefits.

So you may be wondering what it takes to become a prison guard. For one, you have to be a U.S. citizen with a high-school diploma or equivalent. Unfortunately, you can't have any felony convictions, but don't worry, possession of marijuana is only an infraction in California.

Continue reading...

Dominique Strauss-Kahn, Tim Geithner And The IMF

Source - Muckety Maps

2 related links...

In a speech to a closed gathering at the Lowy Institute in Sydney on Thursday, Paul Keating gave a starkly different account of Geithner's record in handling the Asian crisis: "Tim Geithner was the Treasury line officer who wrote the IMF [International Monetary Fund] program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis."

In other words, Geithner fundamentally misdiagnosed the problem. And his misdiagnosis led to a dreadfully wrong prescription.

Geithner thought Asia's problem was the same as the ones that had shattered Latin America in the 1980s and Mexico in 1994, a classic current account crisis. In this kind of crisis, the central cause is that the government has run impossibly big debts.

The solution? The IMF, the Washington-based emergency lender of last resort, will make loans to keep the country solvent, but on condition the government hacks back its spending. The cure addresses the ailment.

But the Asian crisis was completely different. The Asian governments that went to the IMF for emergency loans - Thailand, South Korea and Indonesia - all had sound public finances.

The problem was not government debt. It was great tsunamis of hot money in the private capital markets. When the wave rushed out, it left a credit drought behind.

But Geithner, through his influence on the IMF, imposed the same cure the IMF had imposed on Latin America and Mexico. It was the wrong cure. Indeed, it only aggravated the problem.

Keating continued: "Soeharto's government delivered 21 years of 7 per cent compound growth. It takes a gigantic fool to mess that up. But the IMF messed it up. The end result was the biggest fall in GDP in the 20th century. That dubious distinction went to Indonesia. And, of course, Soeharto lost power."

Exactly who was the "gigantic fool"? It was, obviously, the man who wrote the program, Geithner, although Keating is prepared to put the then managing director of the IMF, the Frenchman Michel Camdessus, in the same category.

Worse, Keating argued, Geithner's misjudgment had done terminal damage to the credibility of the IMF, with seismic geoeconomic consequences: "The IMF is the gun that can't shoot straight. They've been making a mess of things for the last 20-odd years, and the greatest mess they made was in east Asia in 1997-98, so much so that no east Asian state will put its head in the IMF noose."

China, in particular, drew hard conclusions from the IMF's mishandling of the Asian crisis. It decided that it would never allow itself to be dependent on the IMF, or the US, or the West generally, for its international solvency. Instead, it would build the biggest war chest the world had ever seen.

Keating continued: "This has all been noted inside the State Council of China and by the Politburo. And it's one of the reasons, perhaps the principal reason, why convertibility of the renminbi remains off the agenda for China, and it's why through a series of exchange-rate interventions each day that they've built these massive reserves.

"These reserves are so large at $US2 trillion as to equal $US2000 for every Chinese person, and when your consider that the average income of Chinese people is $US4000 to $US5000, it's 50 per cent of their annual income. It's a huge thing for a developing country to not spend its wealth on its own development."

Is this some flight of Keatingesque fancy? The former deputy governor of the Reserve Bank of Australia, Stephen Grenville, doesn't think so: "After the Asian crisis, the countries of east Asia decided that they would never go to the IMF again. The IMF is taboo in east Asia. Look at the evidence. The revealed preference of the region is that no one has gone to the IMF since, even when they needed the money."

And Asian capitals know that they have no real influence over the IMF - while European governments enjoy 40 per cent of the voting power on the IMF, Japan, China and the rest of east Asia put together have only about 16 per cent. This is an artefact of the immediate postwar power structure, when the IMF was set up.

Keating urges that the fund should be decapitated, with control passing to the governments of the Group of 20 countries whose leaders are to meet in London on April 2. The summit, which is to include China, India and Indonesia as well as Australia, is meeting to consider solutions to the global crisis.

As for The New York Post's claim that Geithner was the hero who cajoled those quarrelsome Asians into agreeing to a $US200 billion rescue, the key fact burned into the minds of Asian elites is that the US was deaf to requests for funds. Washington did not contribute a cent of its own money to any of the emergency packages. Japan and Australia were the only nations that made loans to all three of the stricken Asian countries.

Keating went on to argue that, by frightening the Chinese into building their vast $US2 trillion foreign reserves, Geithner was responsible for the build-up of tremendous imbalance in the world financial system. This imbalance, in turn, according to Keating, contributed to the global financial crisis which has since devastated the world economy.

China invested most of its reserves in US debt markets. Keating again: "So we have this massive recycling of funds into the system by [the former US Federal Reserve chairman Alan] Greenspan's monetary policy so even if you are greedy Dick Fuld [the former head of the collapsed investment bank Lehman Brothers] or you are hopeless Charles Prince at Citibank, you're being told there's an endless supply of money at a low interest rate and no inflation. So of course the system geared up to spend it.

"That is the fundamental cause of the problem - the imbalance is the fundamental cause."

If Keating's opinion of Geithner had circulated in the US, the Americans would not have been so surprised and disappointed with their new Treasury Secretary. They quickly learned that he had failed to pay $43,000 in taxes owing.

Then, when he announced his much-anticipated plan to rescue the US banking system, share prices slumped by 4 per cent immediately and a new round of weakness in the financial sector began. The pundits turned savagely against him: "So much for the saviour-based economy," wrote Maureen Dowd of The New York Times. Senator Shelby changed his mind: "Aggravating economic problems by contributing to marketplace uncertainty about what steps the Government will take - is that what this is?" he fumed.

US bank stocks weakened so much that nationalisation seems to be the only remaining option to put them quickly out of their misery.

Australia's banks, by contrast, are strong, said Keating, because of his decision as Treasurer to create the "Four Pillars" policy. This requires that the four big banks remain separate, barred from taking each other over. This prevented them "cannibalising each other", in Keating's words. As protected species, they had no need to mount risky takeovers to bulk themselves up defensively.

Their strength certainly wasn't due to the brilliance of their managers, whom Keating described as "counterhopping clerks" who had managed to work their way up the bank hierarchies. A further source of the soundness of the Australian banks, he said, was that they had learned well the lessons of risky speculative lending as a result of "the recession we truly did have to have".

In sum, Tim Geithner is a gigantic fool, the IMF the gun that can't shoot straight, Alan Greenspan a bungler. The big US banks were run by the greedy and the hopeless, the Australian banks by counterhopping clerks. It's a world of many villains. And only one hero.

How to Keep a Damaged Financial and Economic System Afloat?

The elitists who run America from behind the scenes have serious problems in trying to keep a badly damaged financial and economic system afloat. Ironically, these same characters are the ones responsible for the system and the condition that it is in today. It is not only confined to the US, but it prevails in England, Europe and other countries as well. Central bankers are all in constant touch with each other to employ tactics that will extend the current system in the hope that something they are doing will turn into at least a temporary solution. The US maintains virtually zero interest rates and floods the economy with money and credit. The European Central Bank, the ECB, raises interest rates, but continues injecting money and credit into the system. In Europe the higher interest rates are supposed to offset the inflation caused by the increase in money and credit. On the short term it isn’t going to work. On the long term much higher rates will work, if the increase in money and credit is lowered or stopped. The unpalatable problem with that is this medicine will collapse their economies. All these parties should have purged the system in the early 1990s when they had the chance, or just three years ago, when they had another chance to do so. The result is the inflation we see today, 6% in Europe, 12% in Britain and 10% in the US. The path these bankers have laid out will lead to hyperinflation and ultimately to deflationary depression. The approaches employed by both the US and Europe won’t work and the elitists know they won’t work. Historically these conditions are nothing new. We have seen them over and over again. More often the solution is to have another war, which can take the blame for the monetary, fiscal and economic profligacy and at the same time relieve the world of copious useless eaters.


Real inflation is now at about 10% based on earlier formulas, as opposed to present official government doctored figures. These are close to the numbers of the1980s. Officially those numbers were 10%, but we were there and the numbers were 14%. We expect real inflation of 14% or more by the end of the year as QE1 and stimulus 1 effects play havoc with consumer purchasing power. Presently the PPI, the Producer Price Index, is 10% and that same figure applies to the cost of imported goods as well. As long as interest rates remain at zero and the creation of money and credit continues, inflation will climb ever higher. The Fed tells us that there will be no change in rates until after September. The Fed just observed the ECB raising rates. The next rise was set for June and we have already been told that won’t happen. Except for Germany all of the EU, not just the euro zone, is faltering. Europe and the US may not see higher rates until inflation exceeds 25% next year. As long as interest rates remain below the real rate of inflation little will be accomplished to bring inflation under control. These numbers are all within the confines of QE1 and QE2 and stimulus 1 & 2. We see no way to avoid QE3. Who will buy the Treasury’s debt? That being the case inflation three to four years out could reach 50%. Needless to say, rates would have to exceed 50% to slow down the economy and that would eventually entail a deflationary depression. During such a process as rates reached a peak, commodity prices would falter and begin to reverse. Gold and silver would lose their assisting inflationary impetus, and their course would depend on the strength of currencies. Both could strongly represent the only real money as they have in the past. We won’t know the final outcome until we get there, because many other factors could enter the equation, such as world war.


Higher oil and food prices cannot go on indefinitely nor can the creation of money and credit. Much higher prices would collapse demand and higher rates might not be needed. We are sure of one thing world trade will diminish as all this goes forward and we believe it is only a matter of time before the un-level playing field of trade prompts congressional action to institute tariffs on goods and services. China is a major exporter to the US, but they have tariffs. As an example, they have a 30% to 50% advantage in the sale of luxury boats. That is certainly deliberate and such action can only invite retaliation eventually. China has had it all their way for 15 years due to US debt problems. Now that China is reducing its US dollar-denominated position they have lost a great deal of leverage. If they indiscriminately dump dollars they will shoot themselves in the foot.


China already has very strong inflation. Raising bank reserves and interest rates have yet to arrest inflation, but at the same time such actions strengthen the yuan, China’s external currency. China also has its problems. They have made many of the same mistakes that the US and Europe have made. China, even though they are deeply involved in the use of commodities, will become victims of their higher prices that will be passed on in the form of inflation and higher export prices. China will as well become a major exporter of inflation. The question then arises, will commodities rise too quickly and will they collapse, which would stem inflation? The answer is we don’t know. If prices rise at a moderate pace that might not happen. We won’t know until we get there. As you should know economics is not an exact science, it is an art form.


The US then has the issue of 22% unemployment, much of which consists of permanently unemployable and discouraged workers who are existing on welfare of one kind or another. We have lost nine million jobs over the past 11 years to free trade, globalization, offshoring and outsourcing. Many of those companies and jobs would return to America. It is not a cure-all, but it would certainly help. In many instances time has raced ahead of many of the unemployed and their skills are no longer in demand, or technology has left them behind. The evolutionary process has been interrupted deliberately by shipping some of the best jobs overseas for profit for transnational conglomerates, who pay no taxes on those profits and destroy the structure of manufacturing and services.


Wages are increasing in baby steps as price inflation rages at 10%. Except in certain areas in certain countries inflation is high in most countries and very high in some, like the UK and the US. The Fed says such inflation is temporary. Three years ago it was 14%. Inflation fell to 6% and now at 10% it is climbing to 14% by yearend and that is only the effect of QE1 and stimulus 1. Next year we’ll see the inflation of QE2 and stimulus 2 taking it to 25% to 30%. A QE3 could take inflation to 50%. What do workers do then - starve while Wall Street and banking scoop up billion dollar bonuses? Purchasing power will not expand to augment these conditions. The government and banking will not be unhappy as debt will be repaid with deeply depreciated dollars as those dollars plunge in value not only versus other currencies, but more importantly versus gold and silver. Keynesians live in cloud coo-coo land. Purchasing power will not expand and commodities have not and will not increase in cost at a moderate rate, but at an exponential rate. We could very well be looking at another Weimar experience, only time will tell. To think that official inflation will peak at 10% is totally irresponsible. We are already at 10% via the 1980 formula.


As a result of massive debt there is a weak dollar. A reflection of that is the threat that over the next two years the US could lose its AAA rating. S&P says there is a 1/3 chance that they’ll lower the rating after the next election. The collusion between S&P, Washington, banking and Wall Street is simply criminal. This is the same S&P that was never indicted for bond fraud regarding the false ratings they put on mortgage securities.


The answer from Treasury’s Mr. Geithner as he spoke at the Council on Foreign Relation, CFR, was that there was no risk of downgrading. He has instructed congressional leaders to bring down the budget deficit and set it on a declining path. The problem is that won’t happen until 2015, three and a half years from now. Most Americans and most investors worldwide didn’t read or hear about what Mr. Geithner had to say because little is reported to the outside world of what goes on in the inner sanctum of the nefarious CFR. Mr. Geithner, “Our policy has been and will always be for a strong dollar that is in the best interest of America.” He said, we will never weaken our currency to gain economic advantage at the expense of our trading partners. Of course that is not true, but on the other hand other nations, since WWII have all deliberately depreciated their currencies to gain economic and export advantage. The US never said much regarding such cheating until recently regarding China. The cheaters bought the US’s massive debt so it tended to be an even swap. In recent years it has been secret policy to force the dollar lower. This is the Orwellian world we live in. All nations are equal, but some are more equal than others. This is the stamp of realization that government has become dictatorial socialism. The Fed is supposed to have a policy of stability and maximum employment. All the Fed does is save the financial sector from insolvency and purchase government debt with money created out of thin air, unemployment is still 22% and inflation is 10%. That doesn’t sound like a successful policy to us. Stability has proved elusive with oil up 23% and the CRB commodity index up almost 9%. A good part of higher prices for petroleum products has been a lower dollar, which has fallen more than 7% as of late. This is a reflection of the corporate fascist model, which unfortunately is practiced in most every nation today. Government is married to corporations and all policy serves those corporate interests. The crumbs are thrown to the people. All in that realm are too big to fail. Thus, the tightening noose of totalitarianism engulfs the people as you are now seeing in the US. This control planning gives Wall Street and banking a big advantage in competing with the public. They do not use inside information; they create it. That is how brokers can go three months without losing money in trading. They know what is going on inside, others do not. These interests own 95% of Congress, so corporations have stimulus programs on demand. Then there are the sweetheart loans from the Fed to the banks, and the purchase of toxic waste mortgage bonds from these lending institutions. This process had led to instability and massive inflation and will continue to do so.


Many think Wall Street and banking depend upon government. The truth is that they control government. They own the Fed and the Treasury and policy is what they say it will be. The victims are small and medium sized businesses and the public. The public generally knows what is going on, but doesn’t know what to do about it. Politicians believe government spending is their entitlement and part of their reelection process along with bribes - that is campaign contributions, to return them to Congress where they believe is where they belong. Thus, in America there will be little austerity and light tax increases, as we close in on the next presidential election.


The short-term government debt extension has to be at least $2.2 trillion to fund basic necessities by debt government. The Republicans want $300 billion cut from the Budget. Those decisions are to be made in July.


The Federal Reserve continues to strive to gain or to keep the confidence of the average American. That is not easy to do when Mr. Bernanke has to tell consumers that the official government inflation is 1.9%, when they know it is really 10%. Everyone shops so they know what is going on. This is far from price stability. This past month U6 unemployment rose back to 15.9% from 15.7%. That puts real unemployment at 22.2% if you eliminate the birth/death ratio. These both are Fed mandates and the fed has failed miserably in supplying the American public with policies that will bring about stability and growing employment.


Faith in the system has tenuously been maintained by creating a colossal amount of money and credit. First they were injected into the financial sector and then used to support the Treasury market. Such usage may have kept the financial system from failure, but it has done little to help Americans. As a result perhaps 60% of the people are hoping the Fed can hold it all together. The other 40% are far more skeptical and most believe the system is in serious trouble. The public is tired of the subterfuge and wants much better performance. Little do they realize the Fed is trapped. Perpetual creation of money and credit is the only avenue left open to them. That is why they have to support the financial sector, fund the Treasury and keep the stock market afloat, while suppressing commodity, gold and silver prices.


We don’t see higher official interest rates for at least a year and probably much longer. As a result of QE3, or whatever it will be called, we see an increase in money and credit of at least $1.5 trillion and by perhaps as much as $2.5 trillion by June 2012. Not only will 80% of Treasuries and Agencies have to be funded, but so will the economy. We see no help coming from Congress, which hopes to cut costs. The last two sets of stimulus coming from Congress were $850 billion and $862 billion.


As a result of such programs the USDX shows an 8% fall in the dollar this year. We believe that is somewhat misleading because we believe that the US dollar was deliberately allowed or forced to go lower to provide a higher euro, as a buffer for the possible default of Greece. That doesn’t mean the dollar is not headed lower, it is. All that monetized money and credit is coming home to roost in the form of monetization and much higher inflation. Most say they don’t know what will happen next, we do. The Fed will print until it cannot anymore. We will go to hyperinflation and then to the worst deflationary depression in the last 300 years.


Bob Chapman is a frequent contributor to Global Research. Global Research Articles by Bob Chapman

Former Circle System Execs Charged With Defrauding Schools Of Millions

School Fraud

First Posted: 05/14/11 01:21 PM ET Updated: 05/15/11 02:17 PM ET


Two former executives of a Pennsylvania athletic equipment supplier were arrested Wednesday on charges that they fraudulently collected millions of dollars from more than 100 schools, reports The New York Times.

Mitchell Kurlander was the chief financial officer of Circle System Group, Inc., a company that sold and reconditioned athletic equipment, uniforms and apparel, often to middle and high schools; his father-in-law, Alan Abeshaus, was the company's largest shareholder. They have been accused of executing a decade-long scheme involving billing for work that was never done, inflating prices and collecting duplicate payments.

The indictment states:

Throughout the course of the conspiracy, Circle received more than 500 duplicate payments from the Schools that collectively were worth more than approximately $970,000. Rather than return these duplicate payments, defendant KURLANDER instructed Circle employees to deposit the money into Circle's bank account.

The defendants allegedly achieved this by issuing monthly statements that were virtually identical to their billing invoices.

Both have been charged with conspiracy, and Kurlander faces an additional 21 counts of wire and mail fraud.

The indictment lists 22 New Jersey high schools, the Newark and Jersey City school systems, and Rutgers and Monmouth Universities as those the government said participated or were victimized in the fraud.

According to NorthJersey.com, Circle has been under investigation since 2006, when the head of a reconditioners' group accused it of misreporting helmet-testing data. The company's troubles escalated in 2008.

Dec. 22, 2008 -- In federal court, [David] Drill admits that, as president of Circle, he participated in a scheme that defrauded unnamed school districts by submitting inflated invoices, creating phony bid documents and retaining overpayments. Drill tells investigators that aspects of the scheme often involved the knowing participation of unnamed school officials. He also says the company had misreported helmet-testing data in order to lower costs and increase profits.
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The indictment charges that Circle presented school officials with "gifts," including computers, televisions and tickets to sporting events -- but then invoiced the schools for unrelated equipment and expenses that the schools never actually received.

Former Long Branch High School athletic director Charles Ferrara, Jr. and former Elizabeth High School official Robert Firestone have previously admitted to accepting such gifts and telling Circle to submit falsified bills to their schools to cover them up. Stories have started to come out in The Jersey Journal and NorthJersey.com about school officials who may have been involved this time around.

'Libya is US, China's battleground' - Paul Craig Roberts - 15/5/2011

Goldman Sachs Goes PE On China, EU Says Greece Needs More Austerity, Ron Paul Makes It Official For 2012 (LINKS)

Goldman and Morgan Stanley are reportedly planning to set up yuan-dominated private equity funds in China.

The IMF and Usury: Crime Without Punishment (7/11/05)

"Blaming the International Monetary Fund (IMF) for the difficulties faced by a country in times of crisis is like blaming the doctor for the patient's disease". This statement and others like "the IMF does not represent the interests of the G7" are part of an outrageous manual that teaches the organization's officers how to reply to the uncomfortable questions asked by the press. Perhaps, the text became effective after a reporter asked Anne Krueger - First Deputy Managing Director of the IMF - if her organization was responsible for the increasing poverty in Argentina, while he attempted to place before her eyes the photograph of a malnourished child, Krueger escaped like someone trying to avoid leprosy.

After the Second World War, the International Monetary Fund was created to promote international monetary cooperation, to foster economic growth and high levels of employment, and to provide temporary financial assistance for countries to help ease the balance of payments.

But, as Nobel Prize-winner economist Joseph Stiglitzs denounced in several journalistic interviews, the IMF acts as a usurer that disables the growth of emerging countries, and insists on using recipes that have failed.

According the World Bank's data, the Committee for the Annulment of Third World Countries' Debt and the Economic Conference for Latin America, the "Third World" as a whole, together with the countries of Eastern Europe, paid more than US$ 4 billion in the last 20 years. This means credit entities received resources for an amount six times higher than the original sum.

"These countries' coffers sink through a significant black whole in their budgets, which every year allocate an important part of their funds to pay interest on their respective debts" says Eric Calcagno, an economist and consultant to the intergovernmental Latin American Economic System.
"Latin America has already paid 1.4 billion dollars since 1982, which represents almost five times its original debt, but it still owes three times more", he adds.

It is enough to X-ray the actions of the International Monetary Fund to understand the impact of the payment of poor countries' foreign debt:

-In 1982, Mexico owed US$ 57 billion to credit entities. Two decades later it owes US$ 152 billion, an amount that triples what it has already paid. According to official data, this country has 55 million poor people, almost half of its total population.

-Colombia's Finance Minister stated that the country's national budget for the next year is 35, 361 million dollars, one third of which will be used to pay the principal interest on the debt. Meanwhile, 62 percent of the Colombian children are poor or indigent.

-Brazil, one of the most unequal countries on Earth in terms of income distribution, owes 223 billion dollars.

-Over half of African countries spend more of their budget to pay their foreign debt than their health care. As a direct consequence, Sub-Saharan Africa will have more than 18 million orphans in 2010 because of AIDS.

- Military dictatorships in Latin American countries received enormous loans from the IMF as well. Do they promote democracy?

Argentina: A Leading Case

During the 90s, Argentina's government - by coincidence, the most corrupt in its history - decided to follow word for word each and every instruction issued by the IMF. State companies were privatized in exchange for a derisory amount; one of the main sources for public financing built by pension contributions was disrupted and sent to international banks; for 10 years an absurd foreign exchange policy based on convertibility was strictly maintained. This was a forced system establishing that one Argentine peso was equal to one US dollar.

This situation brought about the two basic pillars of poverty: the cheap dollar prevented Argentine companies from exporting, and in turn, the internal market purchased all kinds of imported goods whose price was lower than that of locally manufactured items. In the meantime, the foreign debt rose from 50 billion dollars to 150 billion dollars in only ten years.

The result is that in a country that in 1984 had an extremely low unemployment rate (below 6 percent), one of the highest literacy rates in the world, and an industrial and cultural project with no precedents in Latin America, 20 years later, more than half of its population is below the poverty line.

During neo-liberalism's golden age, the IMF used to praise Argentina's economic policies and highlighted the country as an example of the good results its recipes had.

When the Argentine crisis broke out in December 2001 (the banking system blew up and the government was ousted after a bloody clash in the streets, as a result of a paralyzed economy and an unprecedented crisis), the IMF "punished" the nation by depriving it of funds and demanding stronger belt tightening measures.

Apparently, during the 10 previous years, it had never noticed that unemployment and poverty advanced in giant steps, that foreign banks transferred funds abroad thereby emptying the financial system. Meanwhile private investors took advantage of the situation by purchasing Argentine debt bonds at a 10 percent monthly rate, which was obviously impossible to pay.

When Argentina took its first loan in the 60s, the state was able to finance itself. However, the establishment induced countries to fall into indebtedness as a gesture of "good will" towards the international community.

Nowadays, Argentinean President Néstor Kirchner's government decided to openly confront the IMF and disobey some of its recommendations. Thanks to this, the Argentine economy experienced a record growth in the last 12 months.

Crime Without Punishment

The Center for Economic and Policy Research (CEPR) proposes establishing a criterion to monitor the performance of senior IMF officials in such a way that it is possible to determine when a dismissal is to be applied.

"The IMF does not have the solution. They are not experts. They are representatives of specific private interests", said Alan Freeman, the great economist who acts as an advisor to London's mayor Ken Livingtone, and who supports Argentina in its quest for a fair solution to the debt problem.
Freeman has a good point: the IMF has such a degree of interference in internal policy that it issues opinions on the dollar exchange rate, public utility rates, and especially, it makes very "useful" forecasts. What actually happens is exactly the opposite of what they predict. For example, when Argentina left the 1 to 1 convertibility system, the IMF predicted the dollar exchange rate would soar to 10 Argentine pesos or more, and an unstoppable 10% annual inflation would lash the nation. None of this happened.
But the idea that spreads like wildfire in poor countries does not consider half measures. The external debt is irrecoverable. Today, there is no present in poor countries, and if debts are paid, there will be never be a future.

Elizabeth Levy Sad is a journalist based in Buenos Aires, the magical & mystery capital city of Argentina. Her writing has appeared in Underground Focus, In-Lan, Profile, 13 Minutes, Página/12 newspaper & Elle. She works with the translator David Epstein, a genius who always finds the right word at the right moment. She thinks that another world is possible.

Sources of Interviews:
Committee for the Annulment of Third World Countries Debt, journalist Alejandro Bercovich, and Canal Solidario.

Update: DSK Now In Police Custody; IMF Head Dragged Off A Plane, Arrested Following Hotel Maid Allegations Of Forced Head

Update 2: DSK is now in police custody:

IMF Managing Director Dominique Strauss-Kahn was taken into custody on Saturday at JFK airport in New York and was being questioned in regard to a sexual assault, a New York police spokesman told Reuters.

Spokesman Paul Browne said the woman who filed the complaint against Strauss-Kahn, 62, was a 32-year-old chambermaid who fled the room after the incident.

Strauss-Kahn, a possible Socialist candidate in the French presidential election next April, left the hotel after the incident and boarded an Air France aircraft scheduled to depart for Paris, the police spokesman said.

"The NYPD realized he had fled, he had left his cell phone behind," Browne said. "We learned he was on an Air France plane. They held the plane and he was taken off and is now being held in police custody for questioning."

Browne said Strauss-Kahn had not been charged.

Police said the alleged incident took place at the upscale Sofitel hotel on West 44th Street near Times Square.

The chambermaid "was brought by EMS (emergency medical services) to the Roosevelt Hotel, where she was treated for minor injuries," Brown said.

Strauss-Kahn took over the International Monetary Fund in November 2007. Before that, he was a member of the French National Assembly and a professor of economics at the Institut d'Etudes Politiques de Paris.

The IMF declined to comment and board officials said they had not been informed officially of the incident.

In October 2008, Strauss-Kahn apologized for "an error of judgment" in an affair with a subordinate, but denied he had abused his position.

Strauss-Kahn apologized to employees, the woman he had the affair with, Piroska Nagy, and his wife, French television personality Anne Sinclair, for the trouble it had caused.

Update 1: Strauss Khan to be taken to Police Service Area 5 at 221 East 123rd Street

If there was any threat that the IMF would launch an SDR alternative to the USD, it is all over now. According to the NYPost, IMF head Dominique Strauss-Khan (no Bob Pisani, it is not a she) was just arrested on board the first class cabin (thank you taxpayers) of a New York-Paris flight as it was about to take off. And here is where the story gets surreal: "Around noon today, a maid at the hotel [the Sofitel by Times Square] knocked on the door of Strauss-Khan’s room. After letting the maid in, Strauss-Khan allegedly threw the maid on the room’s bed and forced her to perform oral sex on him, said police sources. Strauss-Khan let the maid leave — and soon afterward, headed off to Kennedy Airport for his flight to Paris." Of course this will not be the first sexual misconduct for the head of the world's global pseudo bail out organization: as a reminder back in 2008 the IMF hired a law firm to investigate whether its chief had an improper relationship with a female employee, Piroska Nagy. Back then he got off. This time he won't (even though he did... in a way), and it appears that the IMF is about to lose its head, meaning the fate of literally unlimited bailout funding is now up in the air. Also, it appears that being head of major bureaucracy does not automatically mean getting head on an ad hoc, and involuntary basis. Lastly, we are stunned it was not Herman Von Rompuy or G-Pap on the receiving end.

More from the Post:

His arrest tonight could force him to postpone a planned meeting in Berlin on Sunday with German chancellor Angela Merkel.

Strauss-Khan, a leader of France’s Socialist Party, is the leading rival to President Nicholas Sarkozy in the 2012 election.

Sarkozy was said in a news report yesterday to have begun a smear campaign against his rival that focused on his lavish lifestyle — including Strauss-Khan’s purchase of suits from the same tailor who clothes President Obama.

But Strauss-Khan seems able to find trouble on his own. In 2008, he publicly admitted to "an error of judgment" for having an affair with an IMF subordinate.

In France’s 2007 vote, Strauss-Khan lost the Socialist Party nomination to Segolene Royal, who in turn fell to defeat against Sarkozy, leader of the right-wing Union for a Popular Movement.

But Sarkozy, who still sees Strauss-Khan as his likeliest electoral rival, is believed in France to have maneuvered him out of France by backing him to head the Washington-based International Monetary Fund.

Strauss-Khan is married to New York-born Anne Sinclair, a leading French TV journalist.

Naturally, being in charge of the IMF requires one to be not only a sexual deviant, but a thief:

[Strauss-Khan] was Minister of Economy and Finance from 1997 to 1999, when he resigned to battle charges he was paid for consulting work he never did. But judges decided he really did the work, and prosecutors were forced to admit they had no evidence of fraudulent motive.

Next up: we expect a letter from the IMF disclosing how the world will end if charges are pursued and if, heaven forbid, the IMF head is thrown in jail.

In the meantime, the website of the Smoking Gun must be on fire with one million bored Burssels bureaucrats awaiting the release of the IMF head's mugshot.

Lastly, here is an advance preview of the statement to be released by the IMF head (no pun intended): "If questioned about this matter in the future, I will simply refer the questioner back to this release."

IMF boss calls for global currency

Dominique Strauss-Kahn, head of the International Monetary Fund, thinks a new world currency would calm economic instability and curb the dollar's power

IMF managing director Dominique Strauss-Kahn
IMF managing director Dominique Strauss-Kahn thinks the fund's Special Drawing Rights could be used as a global currency. Photograph: Larry Downing/REUTERS

Dominique Strauss-Kahn, managing director of the International Monetary Fund, has called for a new world currency that would challenge the dominance of the dollar and help curb future financial instability.

In a speech in Washington, Strauss-Kahn argued that the reserves that member countries held with the fund could be used, instead of the dollar, to price international trade. These so-called special drawing rights (SDRs) could also act as an alternative to the dollar in central banks' foreign currency reserves.

"Using the SDR to price global trade and denominate financial assets would provide a buffer from exchange rate volatility," he said, while "issuing SDR-denominated bonds could create a potentially new class of reserve assets".

The IMF published a policy paper backing Strauss-Kahn's views as it gathered top-level economists for discussions on the future of the international monetary system.

Strauss-Kahn, who has been tipped as a contender for the French presidency next year, also argued that the way SDRs were valued, which is currently based on a basket of currencies – the dollar, sterling, the euro and the yen – be broadened to include others such as the Chinese yuan.

International policymakers have become increasingly concerned about the threat of currency wars as struggling governments try to hold down their own exchange rates as they clamber out of recession.

Strauss-Kahn admitted that there were formidable hurdles to achieving a greater role for SDRs, but he warned that without urgent action, the simmering conflicts in the international financial system could tip the world back into chaos.

"Global imbalances are back, with issues that worried us before the crisis—large and volatile capital flows, exchange-rate pressures, rapidly growing excess reserves – on the front-burner once again. Left unresolved, these problems could even sow the seeds of the next crisis," he said.

China, which holds much of its $2.85 trillion mountain of reserves in US Treasury bonds, has repeatedly expressed unease about the value of the dollar, while American politicians have complained that Beijing gains an unfair advantage by keeping its own currency cheap.

The idea of SDRs emerged in 1969, to support the Bretton Woods fixed exchange rate system, but when that collapsed a few years later, the role of SDRs was largely forgotten. They allow IMF members the right to swap their own reserves for foreign currencies in times of need.

However, at the London G20 meeting in 2009, in the midst of the credit crunch, world leaders agreed a dramatic $250bn boost to SDRs, sparking speculation that they could play a growing role in the global monetary system.

Strauss-Kahn said the IMF was also examining ways of strengthening international policy co-ordination, and monitoring international imbalances.

Mississippi floods highlight decay of US infrastructure

As floodwaters swell past record levels in the Mississippi River and its tributaries, the US Army Corps of Engineers is preparing to throw open a floodway north of Baton Rouge. The opening of the Morganza Floodway, planned for as soon as this weekend, will impact 25,000 mainly poor rural residents and flood three million acres of prime Louisiana farmland.

The action is a bid to prevent catastrophic flooding of the capital Baton Rouge and the state’s largest city, New Orleans. Some levees, particularly in New Orleans, are at risk of collapsing if the water pressure is not relieved upriver. The city’s levees are designed to withstand a 20-foot crest, but the force of the water may undermine the earthen barriers at their base, causing the levees to slide into the river. Entire parishes in the below-sea-level city, especially those devastated by Hurricane Katrina in 2005, would again be submerged.

Thousands of residents in Illinois, Missouri, Kentucky, Tennessee, Arkansas, and Mississippi have been flooded, including low-lying neighborhoods in Memphis and entire small towns further south. (See, “Mississippi towns submerged in floodwaters.”)

While the Army Corps has repeatedly asserted that the flood management system is sound, disaster response has been chaotic and borne primarily by state and local agencies. Louisiana Governor Bobby Jindal has dispatched a regiment of the state’s National Guard to hastily construct a f lood barrier at the confluence of the Atchafalaya and Mississippi rivers. The regiment has been ordered to work around the clock. Impoverished municipalities in the Delta region have struggled to sandbag against newly developed sand boils, or seepages at the bases of levees, along the Yazoo River.

The historic flooding in the Mississippi watershed casts a spotlight on the crumbling and patchwork state of America’s physical infrastructure. An aged and unsound levee system is the only defense against disaster for hundreds of thousands of people.

The Army Corps of Engineers has reported that nine percent of the levees it maintains are expected to fail in a flood event.

In a recent report on the state of US infrastructure, the American Society of Civil Engineers (ASCE) found that “there is no definitive record of how many levees there are in the US, nor is there an assessment of the current conditions and performance of those levees.” Grading the nation’s levee system a “D-,” or on the brink of total failure, the ASCE warned that “43 percent of the US population lives in counties with levees.”

The federal government does not oversee all of the levees, and there is no assessment of the many privately-maintained floodwalls along the Mississippi. Similarly, the Army Corps regulates only one-tenth of the county’s dams, many of which are considered at high risk of collapse by the ASCE.

In addition to the flood management system, the country’s roads, bridges, water and sewage systems are all increasingly dilapidated and under-funded. Overall, the ASCE report gave US physical infrastructure a grade of D.

American roads were given a D-. The ASCE graded US bridges at a C, concluding that “more than 26 percent, or one in four of the nation’s bridges, are either structurally deficient or functionally obsolete.”

The resources required to address the nation’s burgeoning inventory of deteriorating bridges have far outstripped the stagnant levels of funding made available. The Federal Highway Administration (FHWA) estimated in 2009, the last time such an estimate was made, that it would require $70.9 billion to address the nation’s deteriorating bridges. Congress appropriated only $5.2 billion that year to the Federal Highway Bridge Program, which is tasked with repairing and replacing deficient bridges throughout the country.

Five states have more than one in five of their bridges in need of significant maintenance. Pennsylvania ranked worst with 26.5 percent of its bridges considered structurally deficient. The situation is only expected to worsen as a greater proportion of the federal bridge inventory exceeds the typical expected 50-year lifespan. At present the average lifespan of an American bridge is 42 years. As of last year, nearly one in three of the nation’s bridges was over 50 years old.

The sheer recklessness of the neglect of infrastructure is evident in the fact that every day, an average of 282,672,680 vehicles pass over one of the nation’s 69,223 deficient bridges.

Last week marked the bicentennial of the National Road—the first federally funded road in the US. The National Road linked Cumberland, Maryland, across the Appalachian Mountains into the heartland of Illinois, ending initially at the city of Vandalia, the state capitol at the time. Conceived of as a means of unifying the young and expanding country, the National Road was established through congressional legislation in 1806 and signed by President Thomas Jefferson.

Public works projects of the 20th Century transformed the US into a modern, mass society by connecting far-flung cities, electrifying rural regions, and mitigating the dangers of the environment. Half a century ago, the government undertook “the greatest public works project in history”—the Interstate System, declared by President Eisenhower to be “essential to the national interest.”

In however limited a form, the ruling class of this earlier period viewed infrastructure as essential for economic development. The ruling elite of today shares no such commitment. On the contrary, in the midst of mass unemployment and tattered social conditions, the Obama administration has explicitly refused to undertake any public works program to mitigate the crisis. Instead, the political establishment has starved the country’s infrastructure, like every other social resource including education, health care, libraries and cultural institutions.

The attack finds its expression in the refusal to upgrade life-saving levees around New Orleans, the drive to “right-size” industrial cities such as Detroit, and many other aspects of social conditions affecting the day-to-day lives of millions of people.

A recent report in Minneapolis/St. Paul Star Tribune entitled “Making a rural comeback: The old gravel road,” for example, details the growing practice of tearing up paved roads in rural America, especially the Midwest, for lack of resources to maintain them. In Michigan, 100 miles have already been converted back to gravel, while South Dakota has torn up 120 miles. The practice is spreading throughout the Midwest, including Iowa, North Dakota, and Minnesota, where communities have seen 40-year-old roadways ripped out.

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Money-hungry US to hit borrowing cap

© AFP/File Shawn Thew
AFP

WASHINGTON (AFP) - The debt-laden US government's credit card will hit its limit Monday, creating a cash crunch that puts the country's credit standing at risk as politicians battle over its long-term deficit.

Reaching the $14.29 trillion ceiling set by Congress will not have an immediate impact on government finances, because the Treasury has found about ten weeks of wiggle-room in short-term adjustments and an unexpected April jump in tax revenues.

But with Republicans refusing to increase the ceiling without massive future spending cuts, the longer the fight over bridging the country's deficit goes on, the higher the stakes will get.

If nothing is done by about August 2, there is a chance the United States, which has always merited a top-grade credit rating, could do the unthinkable -- default on its debt payments.

Few think it will get that far, as the White House leads behind-the-scenes talks on a grand strategy on the deficit -- with Republicans insisting on spending cuts and Democrats demanding tax increases as well.

Still, some liken the fight to a game of chicken being played with the country's credit standing at stake.

"Using the debt limit as a bargaining chip is quite risky," Ben Bernanke, the chairman of the US Federal Reserve, warned politicians on Thursday.

"At minimum the cost will be an increase in interest rates that will actually worsen our deficit," he said.

"The worst outcome would be one in which the financial system was again destabilized... which of course would have extremely dire consequences for the US economy."

Bond analysts -- who are closest to those who fund the debt -- called a default unthinkable.

"The severity of the outcome is why people are not believing that it will happen," said Aaron Kohli, a US Treasuries specialist at Nomura Securities.

"It's the financial equivalent of a nuke going off."

"As far as (US bond) yields are concerned, they are much lower than they were a month ago. So, the market is acting as if there's no problem," said Scott Atkinson of Briefing.com.

Even so, the numbers are worrying. As of Thursday, the government had another $38 billion to borrow before striking the ceiling, and the settlement of bonds auctioned during the week would take it there on Monday.

Meanwhile, the government has to bridge a monthly funding deficit of $120 billion.

Short-term spending cuts and higher-than-expected revenues will permit the government to operate just under the ceiling through August 2, when higher borrowing becomes unavoidable.

The ceiling has been raised or lowered 74 times in the last 50 years, usually without political acrimony. But Republicans have drawn a line in the sand over the issue this time.

"Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase," the powerful Republican leader of the House of Representatives, John Boehner, said on May 6.

"We're not just talking about billions here. We should be talking about trillions," said Boehner, while ruling out tax hikes as a part of the mix.

Pressure on the deficit has mounted from others as well.

On April 18 Standard & Poor's cut the outlook on US sovereign debt to "negative," the first time the ratings agency has ever placed such a warning on the US's gold-standard AAA rating.

S&P said it did not see Washington agreeing on a plan for its debt before the November 2012 presidential election.

The International Monetary Fund has urged the country to "urgently" address its problems, casting doubt on its resolve.

But bond markets -- usually the first sign of concern over a country's financial health -- have actually moved in the other direction, with yields on US debt falling last week, mainly as money moved out of falling commodities and stocks.

"I don't think much will happen. They can continue to operate through August" while talks continue, said S&P's chief economist, David Wyss.

"There's obviously no danger of debt default" before then, and after August 2, the government would prefer to cut spending rather than default.

"They will prioritize debt service payments," he said.

Kohli said the market might react if there is no deal by the end of July.

"As we near the do-or-die date ... then you could have pretty severe consequences" on US debt sales.

"The debt ceiling is really window dressing -- spending is what the fight is really over. From that aspect, this discussion is a good thing," said Briefing.com's Atkinson.

A "technical default" in August could spark a sell-off as some investors panic, he said.

"We believe any sell-off would be greeted opportunistically by buyers. The odds of the US eventually not paying its debt is about zero."

© AFP -- Published at Activist Post with license

Geithner Sends Doomsday Letter To Congress Predicting Double-Dip Recession If Debt Ceiling Not Raised

The global Ponzi must go on! Taking his cue from fellow terrorist Hank Paulson, Tim Geithner threatens Congress with all manner of disaster and destruction if they refuse to raise the debt ceiling.

Below is Geithner's letter to Senator Michael Bennet of Colorado.

“A default would inflict catastrophic far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment...Even a short-term default could cause irrevocable damage to the economy. A default on Treasury debt could lead to concerns about the solvency of the investment and financial institutions that hold Treasury securities in their portfolios, which could cause a run on money market mutual funds and the broader financial system. A default would call into question the status of Treasury securities as a cornerstone of the financial system, potentially squandering this unique role and the economic benefits that come with it."

Get details here...

Further reading...

"Luca Brasi Sleeps With The Fishes" - Deutsche Bank Goes Gangster On Foreclosure Litigant

Lynn Szymoniak is the lawyer and foreclosure fraud expert who defeated Deutsche Bank in court when they tried to foreclose on her. Apparently they had jacked up the rate on her adjustable-rate mortgage, but did so outside the allotted time period allowed by the terms of the mortgage. Szymoniak complained and they demanded the higher rate anyway, contract be damned. She refused, so they sued her. When Deutsche Bank couldn't prove they even owned the mortgage (natch), the judge tossed the case and Szymoniak won.

Well, now Deutsche Bank is suing her again -- and this time they're also suing her son, a poetry grad student in New York who has absolutely no connection to the mortgage on his mom's house. Now, either the bank's lawyers are simply incompetent, which is possible, or they've just decided to go ganster and intimidate anyone, and their family, who dares to f^ck with them. I now see that it's perfectly appropriate that Senator Jim Bunning used to pronounce it "Douche Bank."

Zach Carter has the full story at Huffington Post...

Video - Lynn Szymoniak on 60 Minutes - April 3, 2011

Strauss-Kahn hotel sex case delayed for tests; maid ID'd him in lineup

The court date for a French political big-shot accused of sexually assaulting a hotel maid was put off until tomorrow while authorities examine him at a hospital for evidence.

Lawyers for International Monetary Fund head Dominique Strauss-Kahn, who was yanked off a jet and arrested in the alleged sodomy attack of a hotel maid yesterday, said their client agreed to a "scientific and forensic examination" that will be conducted tonight.

The 62-year-old had been expected to be arraigned tonight on charges a criminal sex act, attempted rape and unlawful imprisonment.

IMF head Dominique Strauss-Kahn is taken out of a police station tonight. Hefaces charges he sexually assaulted a Manhattan hotel maid.
AFP/Getty Images
IMF head Dominique Strauss-Kahn is taken out of a police station tonight. Hefaces charges he sexually assaulted a Manhattan hotel maid.

"Our client willing consented to a scientific and forensic examination tonight at the request of the government," said one of Strauss-Kahn's attorneys, Bill Taylor. His client is "tired, but he's fine."

Earlier today, the maid identified Strauss-Kahn out of a police lineup, cops said. His lawyers say Strauss-Kahn denies any wrongdoing and will plead not guilty.

Strauss-Kahn was arrested last night for allegedly sodomizing the hotel maid yesterday -- hauled off an Air France flight just moments before takeoff from Kennedy Airport, police sources said.

Three Port Authority detectives pulled Strauss-Kahn from the plane's first-class cabin just two minutes before it was due to depart for Paris, according to the police sources.

Strauss-Kahn -- who was expected to challenge French President Nicholas Sarkozy in the 2012 election -- was turned over to NYPD officers and brought to the Special Victims Unit's uptown squad room.

FRENCH POL A WOMANIZER

AGENCY'S GLOBAL MONEY MISSION

The trouble began at around 1 p.m. yesterday when a 32-year-old housekeeper entered Strauss-Kahn's $3,000-a-night suite at the luxury Sofitel on West 44th Street -- apparently unaware he was still inside.

The married Strauss-Kahn was in the bathroom, and emerged naked, chased her down a hallway and pulled her into a bedroom, where "he jumps her," a source said.

"She pulled away from him and he dragged her down a hallway into the bathroom where he engaged in a criminal sexual act, according to her account to detectives," Browne said. "He tried to lock her into the hotel room."

Soon afterward, Strauss-Kahn got dressed and headed off to JFK for a flight to Paris.

When he was approached on the plane by Port Authority cops, he said, "What is this about?" sources said. He was taken off the aircraft without handcuffs.

Two law-enforcement sources said Strauss-Kahn was trying to flee authorities. Police said he left his cellphone and other personal items in the room.

"It looked like he got out of there in a hurry," Browne said.

Strauss-Kahn, who had a meeting planned for today with German Chancellor Angela Merkel in Berlin, has an arrangement with Air France that allows him to get on any flight and sit in first class, the sources said. He was traveling alone.

Browne said Strauss-Kahn does not have diplomatic immunity. He was expected to be brought to court today.

The victim was taken to Roosevelt Hospital, where she was treated for trauma.

The shocking arrest came hours after a Socialist Party ally of Strauss-Kahn accused Sarkozy of kicking off a smear campaign against his longtime rival -- focusing on his lavish lifestyle, including his preference for suits from the same tailor favored by President Obama.

"There is now a totally structured and orchestrated campaign, which has already been announced by Mr. Sarkozy and his closest allies, to attack the character of Strauss-Kahn," Socialist politician Jean-Marie Le Guen told Europe 1 radio.

Strauss-Kahn's stint at the helm of the IMF in Washington does not officially end until September 2012, several months after the scheduled date of France's presidential vote.

But the French political world has been buzzing with speculation that the man popularly known as "DSK" would bring a premature end to his tenure and throw his hat in the ring.

And some opinion polls suggested he would win.

In France's 2007 elections, Strauss-Kahn lost the Socialist nomination to Segolene Royal, who in turn was defeated in the general election by Sarkozy, leader of the right-wing Union for a Popular Movement.

But Sarkozy, who still sees Strauss-Kahn as his likeliest electoral rival, is believed to have maneuvered Strauss-Kahn out of France by backing him to head the Washington-based IMF.

A spokeswoman for the State Department had no comment, nor did a spokesperson for the French Embassy.

Caroline Atkinson, an IMF spokeswoman, issued a statement this morning that said the agency would have no comment on the New York case. She referred all inquiries to Strauss-Kahn’s personal lawyer and said the “IMF remains fully functioning and operational.“

with AP

CIA - Country Comparison :: Current account balance

Country Comparison :: Current account balance
This entry records a country's net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments (such as pension funds and worker remittances) to and from the rest of the world during the period specified. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.


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Rank
country Current account balance Date of Information
1 China
$ 272,500,000,000
2010 est.
2 Japan
$ 166,500,000,000
2010 est.
3 Germany
$ 162,300,000,000
2010 est.
4 Russia
$ 68,850,000,000
2010 est.
5 Norway
$ 60,230,000,000
2010 est.
6 Saudi Arabia
$ 52,030,000,000
2010 est.
7 Switzerland
$ 49,350,000,000
2010 est.
8 Netherlands
$ 46,690,000,000
2010 est.
9 Singapore
$ 44,080,000,000
2010 est.
10 Taiwan
$ 39,000,000,000
2010 est.
11 Kuwait
$ 38,200,000,000
2010 est.
12 Korea, South
$ 36,350,000,000
2010 est.
13 Malaysia
$ 34,140,000,000
2010 est.
14 Nigeria
$ 27,770,000,000
2010 est.
15 Venezuela
$ 22,070,000,000
2010 est.
16 Sweden
$ 21,680,000,000
2010 est.
17 Qatar
$ 20,110,000,000
2010 est.
18 Hong Kong
$ 18,070,000,000
2010 est.
19 Azerbaijan
$ 15,960,000,000
2010 est.
20 Libya
$ 15,530,000,000
2010 est.
21 Denmark
$ 14,350,000,000
2010 est.
22 Thailand
$ 12,290,000,000
2010 est.
23 Austria
$ 9,900,000,000
2010 est.
24 Iran
$ 9,760,000,000
2010 est.
25 Philippines
$ 9,510,000,000
2010 est.
26 Indonesia
$ 8,532,000,000
2010 est.
27 Brunei
$ 7,024,000,000
2008 est.
28 Kazakhstan
$ 6,993,000,000
2010 est.
29 Argentina
$ 6,976,000,000
2010 est.
30 Israel
$ 6,269,000,000
2010 est.
31 Macau
$ 6,230,000,000

32 Uzbekistan
$ 5,588,000,000
2010 est.
33 Finland
$ 4,696,000,000
2010 est.
34 Algeria
$ 3,959,000,000
2010 est.
35 Bangladesh
$ 3,734,000,000
2010 est.
36 United Arab Emirates
$ 3,409,000,000
2010 est.
37 Luxembourg
$ 3,396,000,000
2010 est.
38 Trinidad and Tobago
$ 3,363,000,000
2010 est.
39 Turkmenistan
$ 3,081,000,000
2010 est.
40 Oman
$ 2,724,000,000
2010 est.
41 Iraq
$ 2,715,000,000
2010 est.
42 Angola
$ 2,089,000,000
2010 est.
43 Latvia
$ 1,620,000,000
2010 est.
44 Lithuania
$ 1,231,000,000
2010 est.
45 Timor-Leste
$ 1,161,000,000
2007 est.
46 Chile
$ 1,033,000,000
2010 est.
47 Bolivia
$ 690,200,000
2010 est.
48 Burma
$ 652,000,000
2010 est.
49 Syria
$ 649,000,000
2010 est.
50 Ukraine
$ 603,000,000
2010 est.
51 Gabon
$ 591,000,000
2010 est.
52 Bahrain
$ 589,000,000
2010 est.
53 Cote d'Ivoire
$ 534,000,000
2010 est.
54 Egypt
$ 270,000,000
2010 est.
55 Estonia
$ 265,000,000
2010 est.
56 Bhutan
$ 164,000,000
2008 est.
57 British Virgin Islands
$ 134,300,000
1999
58 Cook Islands
$ 26,670,000
2005
59 Suriname
$ 24,000,000
2007 est.
60 Palau
$ 15,090,000
FY03/04
61 Comoros
$ 8,000,000
2007 est.
62 Guinea-Bissau
$ -6,000,000
2007 est.
63 Tuvalu
$ -11,680,000
2003
64 Bulgaria
$ -12,800,000
2010 est.
65 Kiribati
$ -21,000,000
2007 est.
66 Tonga
$ -23,000,000
2007 est.
67 Samoa
$ -24,000,000
2007 est.
68 Micronesia, Federated States of
$ -34,300,000
FY05 est.
69 Iceland
$ -42,000,000
2010 est.
70 Anguilla
$ -42,870,000
2003 est.
71 Vanuatu
$ -60,000,000
2007 est.
72 Sierra Leone
$ -63,000,000
2007 est.
73 Dominica
$ -72,000,000
2007 est.
74 Sao Tome and Principe
$ -73,000,000
2010 est.
75 Central African Republic
$ -77,000,000
2007 est.
76 Cuba
$ -87,000,000
2010 est.
77 Gambia, The
$ -90,000,000
2010 est.
78 Zambia
$ -99,000,000
2010 est.
79 Papua New Guinea
$ -99,000,000
2010 est.
80 Lesotho
$ -125,000,000
2010 est.
81 Burundi
$ -136,000,000
2010 est.
82 Grenada
$ -138,000,000
2007 est.
83 Solomon Islands
$ -143,000,000
2007 est.
84 Saint Vincent and the Grenadines
$ -149,000,000
2007 est.
85 Belize
$ -151,000,000
2010 est.
86 Saint Kitts and Nevis
$ -163,000,000
2007 est.
87 Mauritania
$ -184,000,000
2007 est.
88 Namibia
$ -187,000,000
2010 est.
89 Laos
$ -195,000,000
2010 est.
90 Saint Lucia
$ -199,000,000
2007 est.
91 Kyrgyzstan
$ -210,000,000
2010 est.
92 Antigua and Barbuda
$ -211,000,000
2007 est.
93 Eritrea
$ -212,000,000
2010 est.
94 Liberia
$ -224,000,000
2007
95 Barbados
$ -254,000,000
2007 est.
96 Bahamas, The
$ -283,200,000
2009 est.
97 Cape Verde
$ -286,000,000
2010 est.
98 Guyana
$ -311,000,000
2010 est.
99 Malawi
$ -315,000,000
2010 est.
100 Niger
$ -321,000,000
2007 est.
101 Macedonia
$ -328,000,000
2010 est.
102 Tajikistan
$ -330,000,000
2010 est.
103 Togo
$ -339,000,000
2010 est.
104 Seychelles
$ -351,000,000
2010 est.
105 Djibouti
$ -352,000,000
2009 est.
106 Malta
$ -362,800,000
2010
107 Swaziland
$ -374,000,000
2010 est.
108 Uruguay
$ -377,000,000
2010 est.
109 Mongolia
$ -378,800,000
2010 est.
110 Paraguay
$ -391,000,000
2010 est.
111 Guinea
$ -434,000,000
2010 est.
112 Mali
$ -446,000,000
2007 est.
113 Nepal
$ -449,000,000
2010
114 Maldives
$ -463,000,000
2010 est.
115 Burkina Faso
$ -486,000,000
2010 est.
116 Rwanda
$ -489,000,000
2010 est.
117 Fiji
$ -507,000,000
2007 est.
118 Botswana
$ -552,000,000
2010 est.
119 Moldova
$ -565,000,000
2010 est.
120 Congo, Republic of the
$ -569,000,000
2010 est.
121 Benin
$ -582,000,000
2010 est.
122 Slovenia
$ -598,000,000
2010 est.
123 Madagascar
$ -600,000,000
2010 est.
124 Ecuador
$ -692,000,000
2010 est.
125 Haiti
$ -781,000,000
2010 est.
126 Uganda
$ -784,000,000
2010 est.
127 Nicaragua
$ -819,000,000
2010 est.
128 Cameroon
$ -826,000,000
2010 est.
129 El Salvador
$ -907,000,000
2010 est.
130 Cambodia
$ -918,000,000
2010 est.
131 Mauritius
$ -949,000,000
2010 est.
132 Jordan
$ -975,000,000
2010 est.
133 Mozambique
$ -1,028,000,000
2010 est.
134 Serbia
$ -1,046,000,000
2010 est.
135 Senegal
$ -1,046,000,000
2010 est.
136 Honduras
$ -1,048,000,000
2010 est.
137 Montenegro
$ -1,102,000,000
2007 est.
138 Belgium
$ -1,129,000,000
2010 est.
139 Armenia
$ -1,138,000,000
2010 est.
140 Bosnia and Herzegovina
$ -1,175,000,000
2010 est.
141 Albania
$ -1,245,000,000
2010 est.
142 Guatemala
$ -1,345,000,000
2010 est.
143 Costa Rica
$ -1,349,000,000
2010 est.
144 Jamaica
$ -1,382,000,000
2010 est.
145 Tunisia
$ -1,389,000,000
2010 est.
146 Georgia
$ -1,404,000,000
2010 est.
147 Kenya
$ -1,414,000,000
2010 est.
148 Congo, Democratic Republic of the
$ -1,470,000,000
2010 est.
149 Equatorial Guinea
$ -1,477,000,000
2010 est.
150 Zimbabwe
$ -1,503,000,000
2010 est.
151 Tanzania
$ -1,523,000,000
2010 est.
152 Sri Lanka
$ -1,784,000,000
2010 est.
153 Ghana
$ -1,871,000,000
2010 est.
154 Slovakia
$ -1,930,000,000
2010 est.
155 Hungary
$ -2,128,000,000
2010 est.
156 Yemen
$ -2,181,000,000
2010 est.
157 Ethiopia
$ -2,232,000,000
2010 est.
158 Croatia
$ -2,312,000,000
2010 est.
159 Peru
$ -2,315,000,000
2010 est.
160 Afghanistan
$ -2,475,000,000
2009 est.
161 Cyprus
$ -2,500,000,000
2010 est.
162 Panama
$ -2,523,000,000
2010 est.
163 Sudan
$ -2,595,000,000
2010 est.
164 Chad
$ -2,600,000,000
2010 est.
165 Pakistan
$ -2,641,000,000
2010 est.
166 Kosovo
$ -2,716,000,000
2010 est.
167 Ireland
$ -3,191,000,000
2010 est.
168 Dominican Republic
$ -3,862,000,000
2010 est.
169 New Zealand
$ -4,504,000,000
2010 est.
170 Belarus
$ -5,062,000,000
2010 est.
171 Colombia
$ -5,946,000,000
2010 est.
172 Czech Republic
$ -5,956,000,000
2010 est.
173 Lebanon
$ -6,972,000,000
2010 est.
174 Mexico
$ -7,000,000,000
2010 est.
175 Morocco
$ -7,922,000,000
2010 est.
176 Romania
$ -7,934,000,000
2010 est.
177 Vietnam
$ -12,220,000,000
2010 est.
178 Poland
$ -12,330,000,000
2010 est.
179 South Africa
$ -16,510,000,000
2010 est.
180 Greece
$ -17,100,000,000
2010 est.
181 Portugal
$ -19,030,000,000
2010 est.
182 India
$ -26,910,000,000
2010 est.
183 Australia
$ -35,230,000,000
2010 est.
184 Turkey
$ -38,820,000,000
2010 est.
185 Canada
$ -40,210,000,000
2010 est.
186 United Kingdom
$ -40,340,000,000
2010 est.
187 Brazil
$ -52,730,000,000
2010 est.
188 France
$ -53,290,000,000
2010 est.
189 Italy
$ -61,980,000,000
2010 est.
190 Spain
$ -66,740,000,000
2010 est.
191 United States
$ -561,000,000,000
2010 est.