Monday, June 20, 2011

Record Food Prices Linked to Biofuels

Reports from the WTO and USDA show that corn supplies are influenced by biofuel subsidies and mandates.
The biofuels industry is being blamed for record food prices and high price volatility. Earlier this month a report from the World Trade Organization and other international agencies recommended that governments cut support for biofuels to ease that volatility. On the heels of that report, the U.S. Department of Agriculture issued its corn forecast; it suggested that corn supplies will be very tight this year because bad weather has limited planting and because the share of corn going to ethanol is increasing. After the report, corn prices shot to record highs, reaching $8 a bushel. Then on Friday, the Organization for Economic Cooperation and Development released a report predicting that food prices will remain high for the next decade.
Many experts say the unprecedented prices are at least partially driven by government subsidies and mandates that have led to fourfold increases in production of ethanol biofuel and tenfold increases in production of biodiesel between 2000 and 2009 worldwide. In the United States, multiple bills and amendments have been introduced to scale back subsidies as a way of trimming the federal budget, and on Thursday the Senate voted to end tax credits for ethanol that amounted to nearly $6 billion. (The program won't be killed unless the House passes its own law ending it.)
The WTO report cited many reasons for the high prices and volatility, including changes in demand for food, bad weather, low stock, and the recent high cost of oil. Oil prices directly affect the production costs of food by raising the price of tractor fuel and fertilizers. If oil is expensive enough, it can also increase demand for biofuels, which drives up the price of crops such as corn and sugarcane.
The WTO report also cited government biofuel mandates as a significant problem. Not only do these requirements drive up demand for crops such as corn, increasing prices, but they limit the ability of markets to respond to price changes, increasing volatility. "We've lost a lot of our ability for our agricultural system to be buffered from price shocks from weather and other things that affect production," says Jason Hill, a professor of bioproducts and biosystems engineering at the University of Minnesota.
Worldwide, 8 percent of corn produced is used for biofuels. In the United States, according to the new USDA report, 35 percent of corn in the growing season ending in 2010 went to the production of biofuels; this growing season it is predicted to be 37 percent; it is expected to be 38 percent in 2012.
Representatives for the ethanol industry say that the share of corn used for ethanol is typically overstated. After processing in an ethanol plant, one-third of the corn used, by weight, can still be used as feed, decreasing the amount of feed that ethanol displaces, according to the Biotechnology Industry Organization. The Renewable Fuels Association argues that other factors, such as the price of oil, have a far greater impact than ethanol production on the price of food.
Copyright Technology Review 2011.

Peter Schiff - Merkel caves on Greece, Gross on QE3...

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Kmart Shoplifter Commits Suicide After Being Caught By Loss Prevention

Afghanistan facing insolvency within a month, say officials

IMF rejection of proposals over Kabul Bank crisis, $820m bailout debts and suspension of aid leaves country in deepening crisis


Afghanistan-financial-crisis-kabul-bank
Afghanistan is facing a deepening financial crisis after the IMF rejected proposals to resolve the Kabul Bank scandal. Photograph: Shah Marai/AFP/Getty Images
The Afghan government will struggle to pay its bills "within a month" after the International Monetary Fund rejected proposals for resolving the Kabul Bank scandal, western officials have warned.
Although the war-torn country's biggest bank nearly collapsed last September, the government of Hamid Karzai and the international community are still at loggerheads over plans to fund an $820m (£507m) bailout as well as how the disgraced former managers and shareholders who helped themselves to hundreds of millions of dollars should be prosecuted.
As long as the IMF declares the plans to be inadequate, many countries, including Britain, are legally barred from pumping money into a government that is almost completely reliant on foreign cash to pay civil servants' salaries.
It was reported by Reuters that the IMF has now formally rejected the Afghan government's proposals, meaning aid disbursements will remain on hold. The failure to reach a deal by a deadline of last Saturday also meant a $70m payment from the World Bank's Afghan reconstruction trust fund was automatically withheld.
Two senior western officials said the government will face a cash crisis in the coming weeks and could struggle to pay staff bills, although one predicted this would be avoided by cutting other spending priorities.
Last month, Omar Zakhilwal, the country's finance minister, told the Guardian that suspension of aid payments "has already had an effect on us, no doubt about it". He insisted that the Afghan government had done "95% of what was asked of us" by the IMF, including effectively nationalising Kabul Bank, stripping the shareholders of their rights and putting all unrecovered loans into receivership.
But although he claimed the remaining issues "were inconsequential to Kabul Bank" the IMF sees two aspects as vitally important. Firstly, an agreement that Afghan taxes, not foreign aid, will repay the $820m taken out of central bank reserves last year to prop up the bank. Second, they want serious criminal investigations against managers and shareholders, many of whom enjoy high level political support, who illegally borrowed huge sums of interest-free cash from the bank.
Although the finance ministry has drawn up plans to increase its tax-raising efforts in order to pay off the bailout in annual instalments, horrified MPs have already rejected one budget request for $73m and is also likely to reject a supplemental budget due to be presented by Zakhilwal soon.
"The IMF tells me, this is our demand, give me condition by this date the parliament must approve this line in the budget," explained Zakhilwal. "I am a minister, can I chose the parliament timeline? On these issues the international community totally disregards the legal processes of Afghanistan."
Many MPs argue that the money should be found by simply selling off the assets illegally bought by shareholders and managers, including a gas distribution company, an airline and luxury villas in Dubai.
Although a $10m forensic audit by Kroll may help identify many deliberately hidden assets, most western experts doubt more than half of the outstanding $910m will be recovered. So far just $61m has been retrieved.
Zakhilwal also argued that prosecutions could only be handled by the attorney general and warned that the complicated inquiry cannot be rushed.
"The attorney general can arrest people, but after 15 days with not case they have to be acquitted – that would be even more embarrassing for us," Zakhilwal said.
Although the finance minister insisted the attorney general was "absolutely committed" to a thorough investigation, the international community is sceptical, not least after Afghanistan's top law officer threw out a case last year against one of Karzai's key aides who had been wire-tapped soliciting a bribe.
One alternative plan is for a special court of handpicked judges deemed to be reasonably honest and well-versed in finance to hear the case.
Credible prosecutions are vital, not just to appease public anger, but also because many of Kabul Bank's assets are in Dubai. Under United Arab Emirates law it is impossible to seize properties until criminal investigations have begun.
Not only does Afghanistan face a cash crunch, the showdown with the IMF also threatens to derail plans, pushed hard by Hamid Karzai, for a far greater proportion of international aid to be spent through official channels, rather than on projects outside the control of the government.
A key element of the "transition" strategy by which the foreign intervention in Afghanistan will be greatly reduced by the end of 2014, the international community last year agreed that 50% of spending will go through the government by 2012.
But it is now feared that if the Afghan government continues to be considered unworthy of international investment by the IMF the country will have to return to patchwork of bilateral funding agreements.

Greek PM warns against default as Europe meets on aid

ATHENS/LUXEMBOURG (Reuters) – Prime Minister George Papandreou asked Greeks on Sunday to support austerity steps and avoid a "catastrophic" default, as European finance ministers discussed extending tens of billions of euros of aid to Athens.
Addressing the Greek parliament, Papandreou appealed for the nation to accept deeply unpopular tax hikes, spending cuts and privatisation plans which international donors have demanded as a condition for the aid.
"The consequences of a violent bankruptcy or exit from the euro would be immediately catastrophic for households, the banks and the country's credibility," Papandreou said at the start of a confidence debate on his new crisis cabinet.
Greek officials have said the country will face default in mid-July if the European Union and the International Monetary Fund do not hand over a 12 billion euro tranche of emergency loans by then.
Euro zone finance ministers began a two-day meeting in Luxembourg on Sunday evening to decide whether to disburse that tranche, part of a 110 billion euro ($156 billion) bailout of Greece launched in May last year. They will also discuss proposals for a second bailout that could be worth some 120 billion euros and keep Greece funded through 2014.
Spain's economy minister told reporters on the sidelines of the meeting that ministers hoped to reach agreement on Sunday night on disbursement of all of the next loan tranche to Greece.
"We're still discussing... We hope (to have a deal). That's why we are here tonight," Elena Salgado said.
The finance minister of Germany, where political opposition to spending taxpayers' money on bailing out Greece has been rising, was more equivocal.
"We will work today and tomorrow so that we get as far as possible," Wolfgang Schaeuble said. "Greece must fulfill all the necessary preconditions so that it can be paid out on time. Europe will do its part.
OPPOSITION
Facing public protests and dissent in his Socialist party, which has a slim majority in parliament, Papandreou reshuffled his cabinet last week and called a confidence vote for next Tuesday in an effort to push his reforms through the legislature this month.
Political analysts think he is likely to succeed, but public opposition means it is unclear if he can stick to austerity over the long term. Over 10,000 people protested in front of parliament on Sunday, chanting: "We won't pay! We won't pay" and thrusting their open hands forward in a traditional insult.
Opposition leader Antonis Samaras demanded in parliament that Papandreou quit to pave the way for early elections and a renegotiation of the terms of Greece's current bailout.
Greece, with a public debt worth more than 150 percent of its annual economic output and rising, missed debt targets in its initial bailout plan partly because of a deep recession.
In the proposed new bailout scheme, private investors would for the first time share the burden, pledging to maintain their exposure to Greece by voluntarily buying about 30 billion euros of sovereign bonds as their current holdings matured.
But such a debt rollover would be complex and controversial, financially and legally. Key details have not been worked out, and euro zone finance ministers are expected to discuss them in Luxembourg.
Yields on bonds of indebted euro zone states rose sharply last week as markets speculated Greece might fail to obtain more aid. Many investors think that even if it does, its debt problem is so large that a more radical solution is needed, such as imposing deep losses on its creditors.
The head of Pimco, the world's largest bond fund, said in an interview published on Sunday that Europe risked wasting more money for nothing if it kept pumping billions into the weak Greek economy.
"After a year, every indicator has unfortunately worsened, despite the incredible quantity of financial assistance," Mohammed El-Erian told Italy's Corriere della Sera daily.
"All of this has terrible human consequences and it's associated with a transfer of liabilities from private creditors to European taxpayers. Why? Very little is being done to deal with the excess of public debt, and the conditions for higher growth are not being put in place.
"Further on, if this approach is kept up, more money will be wasted to save private creditors and the risk of a disorderly restructuring of the debt will be greater.
EUROPE
There were signs across Europe on Sunday of tensions over austerity measures and economic reforms.
In Madrid, tens of thousands of people marched against the government's handling of an economic slump and the "Euro Pact," which was agreed by euro zone politicians to improve competitiveness across the bloc and has led in Spain to reforms giving companies greater power to hire and fire.
In Dublin, which obtained an 85 billion euro bailout last year, the Sunday Times quoted an unnamed European Central Bank source as criticising Finance Minister Michael Noonan's call to impose losses on senior bond holders in two failed banks.
"It was a good soundbite for the cameras ... Considering the Greek situation, it was the worst possible time for him to make an impression," the source was quoted as saying. The ECB has opposed making those bond holders pay on the grounds that it might destabilise financial markets.
"By the time it comes to paying back the bonds next autumn, Greece may have defaulted. If Greece defaults, Ireland is next," the source said.
In Milan, Prime Minister Silvio Berlusconi said Italy would take the measures it considered right to keep its public finances in order. On Friday, credit rating agency Moody's warned it might cut Italy's rating out of concern over Rome's ability to reduce its heavy public debt burden.
(Writing by Andrew Torchia; Editing by Andrew Heavens)

SNB's Jordan: Worse euro crisis may hit Swiss: report

(Reuters) - Big Swiss banks have very little direct exposure to Greece but Switzerland may be affected if a Greek default destabilizes the whole financial system, the Swiss National Bank's vice chairman told a newspaper on Sunday.
In remarks similar to those he made at the SNB's monetary policy review on Thursday and in the SNB's annual Financial Stability Report, Thomas Jordan said a domino effect brought about by a Greek debt restructuring likely would cause further upwards pressure on the Swiss currency.
Concerns about debts in peripheral euro zone countries have repeatedly pushed the safe-haven Swiss franc to record peaks against the euro this year. Swiss exporters have complained their margins are suffering and the SNB has decided to leave rates ultra-low to keep a lid on the rising currency, running the risk of a bubble in the real estate market.
"So long as only the peripheral countries are affected, the risk is limited," Thomas Jordan told the newspaper Der Sonntag. "But the big Swiss banks necessarily have many investments abroad, in particular in countries with big financial markets. If the whole financial system were affected, that would naturally have severe consequences for Switzerland."
Switzerland had to bail out UBS during the financial crisis after it suffered big writedowns and the government is now pushing tough capital standards for UBS and rival Credit Suisse that exceed the Basel III standards.
In its report, issued last Thursday, the SNB said the banks' direct exposures to peripheral euro zone countries were relatively low, falling to 46 billion francs in 2010 from 60 billion in 2009, but they could face "considerable losses" if the contagion worsened.
Echoing remarks made by SNB Chairman Philipp Hildebrand last year, Jordan said it was in Europe's interest to solve the debt problem quickly and effectively.
"We're convinced that the European institutions will take appropriate measures that will prevent an escalation of the crisis," he said.
Switzerland is not a member of the European Union but has funded part of the IMF's loan to Greece.
"But also Switzerland has a big interest in the debt crisis not escalating. Via the exchange rate and demand for our exports we're very much affected by these developments."
Between March 2009 and June 2010 the SNB intervened in markets to prevent an excessive appreciation of the franc against the euro. As a result of its interventions, the SNB ran up its biggest annual loss last year and Hildebrand has faced calls for his resignation.
The SNB holds just over 80 percent of its foreign currency reserves in government fixed income. Of its bond holdings, 83 percent are in paper rated AAA, 14 percent in debt with a AA rating, 1 percent has only an A rating and 2 percent is in a category called 'other,' the SNB's website shows.
In a separate article, Der Sonntag said the SNB held a very small amount of Greek debt.
In January the SNB stopped accepting Irish government debt as collateral in its money market operations and stopped accepting Greek debt more than a year ago.
(Reporting by Catherine Bosley; Editing by Andrew Callus)

Empire or Republic. How the Empire Destroys its Own People

On May 29, 2011, President Obama visited Joplin, Missouri , the site of a devastating tornado that killed 140 and pronounced it a terrible "tragedy". But were the deaths the inevitable result of 'natural events' beyond the human intervention?
Coincidentally the same week Afghan President Karzai condemned the killing of a family of 14 by a NATO fighter bomber, running the total to several hundred civilians killed so far this year and thousands over the decade.
The relation between the civilian deaths in Joplin and Afghanistan raises fundamental questions about the priorities, character and direction of the US Empire and the future of the American republic.
Geography of Tornados
Every year at least 20 major violent tornadoes – with winds exceeding 200 mph – hit "tornado alley" and beyond, including central Texas, northern Iowa, central Kansas, Nebraska, western Ohio, Missouri, Indiana, Mississippi, Louisiana and Alabama. Each and every year at least sixty are killed and several hundred are maimed and injured. This year, through May 2011, over 519 have been killed, 25% of whom were in mobile homes, almost three times as many as those in standard houses.
In other words, these tornado-related deaths are predictable, annual, and region-specific and have a higher incidence among low income households. Government agencies and academics have compiled data banks and time series information mapping the route, frequency and impact of tornadoes.
Information about the nature of killer tornadoes is plentiful. Nevertheless deaths mount from year to year. Fear and insecurity stalks the region's most susceptible to the violent whirlwinds, even as the Congress and White House have increased personnel and funding for 'Homeland Security' twenty fold over the decade .The current budget is over $180 billion. If we add the deaths caused by other 'natural' disasters like the flooding of New Orleans , the numbers of deaths are staggering. What explains this perverse relation between huge public funding for 'homeland security' and the increased insecurity of vulnerable Americans in clearly identified danger zones?
The reason is clear: 'Homeland Security' (HS) is an Orwellian misnomer. The agency is not concerned with domestic, civilian, American security. HS is part of a military-police response to imagined overseas threats, which have not materialized or at least have not produced deaths comparable to tornadoes and floods in the last 11 years.
HS spends billions and employs thousands to investigate, spy and harass citizens engaged in legal-constitutional activities. HS and the Pentagon spend tens of billions on overseas infrastructures – buildings, bases, camps -and over 900 billion in arms. HS and the Defense Department forcefully intervene militarily throughout the world via overt and clandestine operations.
To be precise HS intervenes offensively overseas, attacking civilian targets, while it fails to engage domestically to protect American civilians who are left defenseless in the face of predictable natural disasters.
HS and the Pentagon's sustained violent overseas operations are rejected and regarded as a hostile imperial intervention by the civilians in those countries adversely affected. In contrast, defenseless citizens in the US would welcome large-scale intervention in the form of community shelters, which would provide survival, security, life-saving protection and financial aid for rebuilding their lives. Moreover, Pentagon and HS spending on overseas infrastructure, bases and bombs results in deficits, whereas investments in tornado and flood shelters would stimulate jobs, growth and investment in the US .
The current activity of HS destroys lives abroad and neglects survival at home: It has nothing to do with our "homeland" and even less with our "security". Five percent of HS budget would have prevented many of Joplin 's 'tragedy' (and saved us from Obama's gaseous oratory!) and the other 400 deaths from this year's crop of tornadoes.
Systemic Bases of Perpetual Domestic Neglect
Death from 'natural' events raises a fundamental POLITICAL question: Why is the budget of Homeland Security and the Pentagon directed overseas, toward destructive, offensive, military activity rather than to domestic, constructive, defensive activity to protect American lives and productive economic activity?
The problem is systemic not due to some personal flaw or political idiosyncrasy of the moment. The structures of the US economy and military institutions are oriented 'outwardly' to conquering foreign financial markets and building a military empire. The ideology which informs strategic policymakers is imperial-centered not republican: They do not speak of developing and deepening the economy and security of ' middle America '. Every member of the political and corporate elite talks of 'world' or 'global' leadership – a thinly veiled euphemism for the drive to sustain world dominance. Within the imperial framework the entire 'security' budget is directed toward maintaining offensive military supremacy. No wonder there is a steep decline in all spheres of domestic security – natural, social, personal, health and employment –a phenomenon that proceeds with little public debate. The only exception is when threats to security impinge most directly and forcefully on a significant sector of the population. For example, witness the storm of protest from those directly affected when the politicians moved to privatize social security and Medicare.
Nevertheless, the entire political spectrum, the two parties, the Congress and the White House over the past 30 years, have created an artificial consensus in which overseas wars, foreign aid to patrons (Israel) and clients (Pakistan and Egypt) absorbs the greatest percentage of budgetary spending. No political or economic leadership has stepped forward to articulate the obvious connection between global expansion and domestic decay; to forcefully state that the deterioration of the republic is a direct product of the vast resources channeled into military and economic empire building. Who on New York City 's Wall Street or Washington 's Pentagon is going to even look at or consider a 'security plan' with regard to the geography of catastrophes – tornado alley covering a dozen states and the floods and deaths that overwhelm the lowlands from Montana to Louisiana ?
Listen America
Their message is loud and clear:
Small towns and trailer parks do not count! You have your 2nd amendment (the 'right to bear arms'), you have your 'small government', and you have your flags: 'Wav 'em and weep' as tornadoes blow down your houses and your sons and daughters return wrapped in flags to the Battle Hymn of the Empire!
Conclusion
One might argue that community storm shelters won't break the Treasury or reverse the empire. More to the point, their absence, from the federal, state and local political agenda, is emblematic of the total subordination of domestic America to imperial Washington . The 'cost' of building community shelters at the strip malls and trailer parks in Joplin , Missouri is less than a regional training outpost in Kandahar , Afghanistan . It is not a question of money.
Conquering Afghanistan villages enhances the prestige of the Generals, the Joint Chiefs of Staff and NATO officials. Can saving 145 lives in Joplin , Missouri match that in terms of world politics or the politics of imperial leadership? For Afghanistan , Washington builds a thousand military shelters and bomb proof bunkers .For the Americans living in tornado alley and the flood plains of the Mississippi people must make do.
When you hear the tornado warning, it's up to you. As a proud, free American you can find a rock to crawl under and say your prayer: the Federal government and Homeland Security have the Endless, World-wide War against Terror to fight and cannot be bothered by a Joplin , Missouri nursing home in the path of a tornado.
We exaggerate: Obama will jet in and speak before the cameras in solemn terms of the 'tragedy' and 'courage' of the people of Joplin … But will any local politician stand up and speak truth to power? Most of these deaths and (many more to come) are avoidable; under a democratic American republic, the government 'intervenes' to provide protection, health and employment for its people.
In the meantime, as the empire continues to grow it destroys its own people, just like the sow that devours its offspring.
* James Petras' latest books, Global Depression and Regional Wars (Atlanta, Clarity Press, 2009) is the third in a series, including Zionism, Militarism and the Decline of US Power (Atlanta, Clarity Press 2008) and The Power of Israel in the United States (Atlanta, Clarity Press 2006), analyzing the influence of militarism and Zionism in American foreign policy.
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House Republicans Cut Food Assistance For Low-Income Families While Protecting Azaleas

WASHINGTON -- If you're an azalea at the National Arboretum, you're in luck -- a Republican on the House Appropriations Committee is looking out for you. If you're a woman, infant or child, however, you're on your own.
Slipped into the FY 2012 agriculture appropriations bill that the House is expected to take up today is an unusual provision on page 13 requiring the National Arboretum to maintain a very specific portion of its azalea collection.
"The Committee directs the National Arboretum to maintain its National Boxwood Collection and the Glenn Dale Hillside portion of the Azalea Collection," reads the bill. "The Committee encourages the National Arboretum to work collaboratively with supporters of the National Arboretum to raise additional funds to ensure the long-term viability of these and other important collections."
While azaleas are being carefully tended to, the bill would cut $832 million from a program that provides food assistance to low-income mothers and children. The Center for Budget and Policy Priorities estimates that the reduction could result in as many as 475,000 people being turned away from the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) if food prices continue to rise.
“Everyday people across the country leave their homes in search of work, only to return at the end of the day with more worries and less hope," said Rep. Sam Farr (D-Calif.), the agriculture subcommittee's ranking member. "At a time that people continue to struggle to make ends meet, Republicans want to cut funding to food programs that are helping put food on the tables of those most in need."
"Governing is about choices. It is clear where the House majority’s priorities lie -- and it is not with those of the American people," said Rep. Rosa DeLauro (D-Conn.), a strong WIC advocate, in a statement. "These cuts are unconscionable and will not only hurt families trying to survive, but also hurt our economy."
"We understand that we have an obligation to get our fiscal house in order," added Farr. "And Democrats are ready to work with our friends across the aisle to make that happen, but not by discriminately targeting those most in need.”
Azalea upkeep isn't the only unusual measure in the bill:
Animal Welfare Act doesn’t Apply to Movie Sets: "APHIS is using vital animal welfare resources to regulate the pets of extras in filmed entertainment. While the Animal Welfare Act’s intent is to establish minimally acceptable standards in the treatment of animals in research, exhibition, transport, and by dealers, the law was not aimed at regulating companion animals used as extras in the background of movies and television productions. The Committee urges the agency to use the Secretary’s discretionary authority to seek alternative means of meeting its statutory mandate, including the option of issuing exemptions or master exhibitor licenses to these pet owners." [p. 19] Extra Money For Wolf Control: "Wildlife Damage Management – The Committee provides $72,500,000 for Wildlife Damage Control, approximately $4 million above the President’s request. ... Special emphasis should be placed on those areas such as livestock protection...predator control, and other threats to agriculture industries.” [p. 20]
Less Money To Investigate Performance Enhancing Drugs: “The Committee is deeply troubled about the expenditure of scarce appropriated funds investigating alleged use of performance enhancing drugs. The Committee can discern no prudent interest for the FDA to investigate allegations that unapproved drugs may have been used outside the United States." [p. 54]
It's not clear who is responsible for the azalea provision, and the office of Rep. Jack Kingston (R-Ga.), Chairman of the House Subcommittee on Agriculture, did not return a request for comment.
National Arboretum Director Colien Hefferan was equally confused when contacted by The Huffington Post on Monday.
"We did not request the specific language in the bill, either through the Arboretum or the Department of Agriculture as a whole," she said. "I presume some stakeholders were eager to ensure that the azalea collection, as well as the boxwood collection, are protected at the Arboretum and probably requested through a congressman, but I don't really know the source. ... To my knowledge, there has not been an unfunded direction to the arboretum that's come in the appropriations bill previously."
Additionally, the Arboretum has already committed to preserving the azalea collection. In fact, there's a message on this issue on the front page of the institution's website.
Last year, The Washington Post reported that the financially strapped Arboretum was considering removing some of the beloved shrubs to deal with budget shortfalls, including the loss of private donations.
After public outcry and a $1 million endowment gift from an anonymous donor, the Arboretum announced in February that it was reversing its decision.
Several current and former members of Congress and staffers sit on the board of the Friends of the National Arboretum (FONA) and used to work or serve on the Appropriations Committee. They all told The Huffington Post that they were not responsible for the appropriations bill provision and had no idea who was.
"I am prohibited by law from having any contact with the House or Senate for 2 years -- ethics reform trumps the Bill of Rights -- so, no, that was not my request," emailed back former Utah senator Bob Bennett, commenting on the fact that he's not allowed to lobby Congress.
Former Missouri senator Kit Bond's office simply replied, "In response to your question, the answer is 'no.'"
Rep. Rodney Frelinghuysen's (D-N.J.) spokesman also said the congressman did not make the request.
Charles Flickner, a former staff director for the Appropriations Committee, said that as far as he could tell, no one on the FONA board requested the provision and it was likely inserted by staff or members who are simply azalea fans.
"From the email traffic, we're all quite astonished to see it, because I don't think anybody from the [FONA] government affairs committee, which I'm not a part of...requested it," said Flickner. "I do know that the staff, at least in the House, are well familiar with the issue. There are people who know about the arboretum and appreciate it."
This story was updated with response from Frelinghuysen.

"Abolish The Fed" - Yahoo Finance - Jim Rogers: Economic Outlook

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Thousands of protesters occupy Puerta del Sol square in Madrid

Demonstrators gather and shout slogans in Madrid's famous landmark Puerta del Sol, against politicians, bankers and authorities' handling of the economic crisis
With tents, mattresses, a kitchen, a workshop and even a pharmacy, a protest camp in Madrid has grown into a real 'urban village' for thousands of young people. Under blue plastic tarpaulins, demonstrators have gathered in the landmark Puerta del Sol square in the centre of the Spanish capital,. Many of them have spent several days and nights there, to decry politicians who left Spain with a 21 per cent unemployment rate. Calling for "Real Democracy Now," the protests popularly known as M-15 began on May 15, lamenting Spain's economic crisis, politicians in general, and corruption. 




UK banks abandon eurozone over Greek default fears

UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a “Lehman-style” event connected to a Greek default. 

Senior sources have revealed that leading banks, including Barclays and Standard Chartered, have radically reduced the amount of unsecured lending they are prepared to make available to eurozone banks, raising the prospect of a new credit crunch for the European banking system.
Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks.
Barclays has also cut its exposure in recent months as senior managers have become increasingly concerned about developments among banks with large exposures to the troubled European countries Greece, Ireland, Spain, Italy and Portugal.
In its interim management statement, published in April, Barclays reported a wholesale exposure to Spain of £6.4bn, compared with £7.2bn last June, while its exposure to Italy has fallen by more than £100m.
One source said it was “inevitable” that British banks would look to minimise their potential losses in the event the eurozone crisis were to get worse. “Everyone wants to ensure that they are not badly affected by the crisis,” said one bank executive.

Moves by stronger banks to cut back their lending to weaker banks is reminiscent of the build-up to the financial crisis in 2008, when the refusal of banks to lend to one another led to a
seizing-up of the markets that eventually led to the collapse of several major banks and taxpayer bail-outs of many more.
While the funding position of UK banks is far stronger now than it was back in 2008, the banking systems of several other major European countries, including Spain, Germany and Italy, are showing increasing signs of weakness.
Analysts at UBS have warned that eurozone banks are “particularly exposed” having not done enough since the crisis to cut their reliance on the wholesale funding markets and remain acutely sensitive to the withdrawal of liquidity from the inter-bank market.
Simon Adamson, a banks analyst at CreditSights, said it was clear many eurozone banks had been having trouble funding themselves for several months.
“Clearly there are some banks that are finding it difficult to access markets. I think this is a long term sign of the way the markets are going,” he said.
Spanish banks have become the main focus of market concerns with the latest European Central Bank (ECB) figures showing that Spanish banks have been forced to increase their use of ECB lending facilities and borrowed a total of €58bn (£51bn) in May, up from €44bn in April.
“We have been amazed at the ability of Spanish banks to find ways to fund themselves, but it is clear they are running out of options,” said one senior analyst at a major investment bank.

 

SPANISH REVOLUTION-English (Muse Uprising)& IT BEGINS ,COME ON EUROPE GE...

Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15

One small step toward Executive Order 6102 part 2, and one giant leap for corruptcongressmankind.
From: FOREX.com
Date: Fri, Jun 17, 2011 at 6:11 PM
Subject: Important Account Notice Re: Metals Trading
To: xxx

Important Account Notice Re: Metals Trading

         
We wanted to make you aware of some upcoming changes to FOREX.com’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.

In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.

We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated.

We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team.

Sincerely,
The Team at FOREX.com      
So far we have only received this warning from Forex.com. We are waiting to see which other dealers inform their customers that trading gold and silver over the counter will soon be illegal.
It appears that Forex.com's interpretation of the law stems primarily from Section 742(a) of the Dodd-Frank act which "prohibits any person [which again includes companies]from entering into, or offering to enter into, a transaction in any commodity with a person that is not an eligible contract participant or an eligible commercial entity, on a leveraged or margined basis."
Some prehistory from Hedge Fund Law Blog:
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”) has changed a number of laws in all of the securities acts including the Commodity Exchange Act.  Two specific changes deal with certain transactions in commodities on the spot market.  Specifically, Section 742 of the Act deals with retail commodity transactions.  In this section, the text of the Commodity Exchange Act is amended to include new Section 2(c)(2)(D) (dealing with retail commodity transactions) and new Section 2(c)(2)(E) (prohibiting trading in spot forex with retail investors unless the trader is subject to regulations by a Federal regulatory agency, i.e. CFTC, SEC, etc.).  According to a congressional rulemaking spreadsheet, these are effective 180 days from the date of enactment.

We provide an overview of the new sections and have reprinted them in full below.

New CEA Section 2(c)(2)(D) – Concerning Spot Commodities (Metals)

The central import of new CEA Section 2(c)(2)(D) is to broaden the CFTC’s power with respect to retail commodity transactions.  Essentially any spot commodities transaction (i.e. spot metals) will be subject to CFTC jurisdiction and rulemaking authority.  There is an exemption for commodities which are actually delivered within 28 days.  While the CFTC wanted an exemption in which commodities would need to be delivered within 2 days, various coin collectors were able to lobby congress for a longer delivery period (see here).

It is likely we will see the CFTC propose regulations under this new section and we will keep you updated on any regulatory pronouncements with respect to this new section.

New CEA Section 2(c)(2)(E) – Concerning Spot Forex

The central import of new CEA Section 2(c)(2)(E) is to regulate the spot forex markets.  While the section requires the CFTC to finalize regulations with respect to spot forex (which were proposed earlier in January), it also, interestingly, provides  oversight of the markets to other federal regulatory agencies such as the CFTC.  This means that in the future, different market participants may be subject to different regulatory regimes with respect to trading in same underlying instruments.  A Wall Street Journal article discusses the impact of this with respect to firms which engage in other activities in addition to retail forex transactions.  The CFTC’s proposed rules establish certain compliance parameters for retail forex transactions, requires registration of retail forex managers and requires such managers to pass a new regulatory exam called the Series 34 exam.  We do not yet know whether the other regulatory agencies will adopt rules similar to the CFTC or if they will write rules from scratch.
Next, from Henderson & Lyman:
The prohibition of Section 742(a) does not apply, however, if such a transaction results in actual delivery within 28 days, or creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver, and accept delivery of, the commodity in connection with their lines of business. This may be problematic as in most spot metals trading virtually all contracts fail to meet these requirements. As a result, although the courts’ interpretation of Section 742(a) is unknown, Section 742(a) is likely to have a significantly negative impact on the OTC cash precious metals industry. Here too, it is essential that those who offer to be a counterparty to OTC metals transactions seek professional help to discuss possible operational and regulatory contingency plans.
The actual rule language exempts a transaction if it "results in actual delivery within 28 days or such other longer period as the Commission may determine by rule or regulation based upon the typical commercial practice in cash or spot markets for the commodity involved;" Alas, the commission has decided not to intervene and keep the exemption status window so small as to affect virtually all exchanges which transact in the gold and silver spot market.
More here:
Elimination of OTC Forex
Effective 90 days from its inception, the Dodd-Frank Act bans most retail OTC forex transactions. Section 742(c) of the Act states as follows:
…A person [which includes companies] shall not offer to, or enter into with, a person that is not an eligible contract participant, any agreement, contract, or transaction in foreign currency except pursuant to a rule or regulation of a Federal regulatory agency allowing the agreement, contract, or transaction under such terms and conditions as the Federal regulatory agency shall prescribe…

This provision will not come into effect, however, if the CFTC or another eligible federal body issues guidelines relating to the regulation of foreign currency within 90 days of its enactment. Registrants and the public are currently being encouraged by the CFTC to provide insight into how the Act should be enforced. See CFTC Rulemakings regarding OTC Derivatives located at the following website address, under Section XX – Foreign Currency (Retail Off Exchange). It is essential that OTC forex participants seek professional help to discuss possible operational and regulatory contingency plans.
Elimination of OTC Metals
As for OTC precious metals such as gold or silver, Section 742(a) of the Act prohibits any person [which again includes companies]from entering into, or offering to enter into, a transaction in any commodity with a person that is not an eligible contract participant or an eligible commercial entity, on a leveraged or margined basis. This provision intends to expand the narrow so called “Zelener fix” in the Farm Bill previously ratified by congress in 2008. The Farm Bill empowered the CFTC to pursue anti-fraud actions involving rolling spot transactions and/or other leveraged forex transactions without the need to prove that they are futures contracts. The Dodd-Frank Act now expands this authority to include virtually all retail cash commodity market products that involve leverage or margin – in other words OTC precious metals.
The prohibition of Section 742(a) does not apply, however, if such a transaction results in actual delivery within 28 days, or creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver, and accept delivery of, the commodity in connection with their lines of business. This may be problematic as in most spot metals trading virtually all contracts fail to meet these requirements. As a result, although the courts’ interpretation of Section 742(a) is unknown, Section 742(a) is likely to have a significantly negative impact on the OTC cash precious metals industry. Here too, it is essential that those who offer to be a counterparty to OTC metals transactions seek professional help to discuss possible operational and regulatory contingency plans.
Small Pool Exemption Eliminated
Pursuant to Section 403 of Act, theprivateadviserexemption, namelySection 203(b)(3) of the Investment Advisers Act of 1940 (“Advisers Act”), will be eliminated within one year of the Act’s effective date (July 21, 2011). Historically, many unregistered U.S. fund managers had relied on this exemption to avoid registration where they:
(1) had fewer than 15 clients in the past 12 months;
(2) do not hold themselves out generally to the public as investment advisers; and
(3) do not act as investment advisers to a registered investment company or business development company.
At present, advisers can treat the unregistered funds that they advise, rather than the investors in those funds, as their clients for purposes of this exemption. A common practice has thus evolved whereby certain advisers manage up to 14 unregistered funds without having to register under the Advisers Act. Accordingly, the removal of this exemption represents a significant shift in the regulatory landscape, as this practice will no longer be allowable in approximately one year.
Also an important consideration, the Dodd-Frank Act mandates new federal registration and regulation thresholds based on the amount of assets a manager has under management ("AUM"). Although not yet underway, it is possible that various states may enact legislation designed to create a similar registration framework for managers whose AUM fall beneath the new federal levels.
Accredited Investor Qualifications
Section 413(a) of the Act alters the financial qualifications of who can be considered an accredited investor, and thus a qualified as eligible participant (“QEP”). Specifically, the revised accredited investor standard includes only the following types of individuals:
1) A natural person whose individual net worth, or joint net worth with spouse, is at least $1,000,000, excluding the value of such investor's primary residence;
2) A natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with spouse in excess of $300,000 in each of those years and a reasonable expectation of reaching the same income level in the current year; or
3) A director, executive officer, or general partner of the issuer of the securities being offered or sold, or a director, executive officer, or general partner of a general partner of that issuer.
Based on this language, it is important to note that the revised accredited investor standard only applies to new investors and does not cover existing investors. However, additional subscriptions from existing investors are generally treated as requiring confirmation of continuing investor eligibility.
On July 27th, 2010, the SEC provided additional clarity regarding the valuation of an individual’s primary residence when calculating net worth. In particular, the SEC has interpreted this provision as follows:
Section 413(a) of the Dodd-Frank Act does not define the term “value,” nor does it address the treatment of mortgage and other indebtedness secured by the residence for purposes of the net worth calculation…Pending implementation of the changes to the Commission’s rules required by the Act, the related amount of indebtedness secured by the primary residence up to its fair market value may also be excluded. Indebtedness secured by the residence in excess of the value of the home should be considered a liability and deducted from the investor’s net worth.
h/t Ryan

20 Tips For Surviving Economic Meltdown

As difficult as it may be to fathom, the current lousy economy may not be the worst case scenario. All I have to do is look around and be observant to see that there is a strong likelihood that another, more significant economic meltdown is imminent.

Why? Here are some of the reasons:
  • Continued lack of employment opportunities for those that are currently unemployed of underemployed
  • Freakish storms and other natural disasters affecting the viability of farmland resulting in increased food prices
  • Out of sight fuel costs affecting transportation and heating costs
  • Rising costs of healthcare
  • Devaluation of homes and real property
  • An increase is crimes against persons (knifings, murders, even road rage) indicate a barometer of frustration and malcontent among the populace
These are just a few indicators that an economic meltdown of horrific proportions could be on its way. (And since I am an economics knucklehead, I won’t get into the technical reasons having to do with the way monetary policies affect the economy. To me, the anecdotal and real-time experiences with real people are good enough).

Oh sure, there are pockets of economic growth here and there. But for the most part, I see and sense a feeling of helplessness and hopelessness when it comes to money and matters relating to the economy. As much as I hate to admit it, even I feel that the middle class life I have known most of my adult years will never be the same. Pretty depressing when you think about it.

Prepping and learning to be self-sufficient are a good start. The problem, though, is that you can store water and food, stow away some cash or even gold, and insulate yourself from short-term off the grid situations. But what happens if the economic meltdown lasts longer than the six months or the year you have prepared for?

I feel that the only solution is to embrace a lifestyle where consumption is kept to a minimum. And to that end, here are some tips that I have been noodling around (in no particular order).

1. Reduce housing costs: This may mean taking in borders or sharing your home with extended family members. Are you renting a large home or large apartment? Take it down a notch.

2. Manage food costs: Stock up when you see a great sale. For example, I just purchased 10 cake mixes for 89 cents each. I saved over a buck a piece. I know, $10 may not seem like a lot but it adds up.

3. Create a mini-store in your own home and shop from your own supplies: Your pantry will become your friend when money or supplies are short. Don’t forget sundry items and personal items as well as food when it comes to stocking your home based mini-market.

4. Only purchase foods that you will eat: This is related to #3 above. Don’t purchase canned Spam if you will not eat it. That is just silly.

5. Limit eating out: For years, eating out has been a special occasion for Survival Husband and myself. That has been a preference that has now become a necessity. Eating out, to me, is one of the biggest money rat holes out there.

6. Reduce the number of vehicles you own: Do you really need a fleet with the associated costs of insurance and maintenance? Instead of an expensive vehicle, get yourself a scooter or motorcycle as a second vehicle and be smug at getting 60 mpg. Better yet, walk or bike instead of driving your car.

7. Purchase used goods: You can find some steals on Craigslist or Ebay. Or, if that is not your thing, go to garage sales and thrift shops. I am not suggesting that you purchase everything used, but think about your purchases and when practical, buy used and pocket the change.

8. Become self-entertaining: Read (use the library for heaven’s sake), watch videos (same thing, use the library as a great source of DVDs), find some puzzles you enjoy, hike, bike, dance. There are many things you can do to entertain yourself while spending very little money.

9. Reduce communications costs: Now tell me, do you really need 100 cable channels? And what about that smartphone that is costing $150 a month. Scale back as test – you can always add the extra services – and costs – back later if you simply have-to-have them.

10. Earn extra income: Sell your unused stuff on Ebay. Get a part time job if you have a skill. Flip burgers. Become a sales clerk or a barista. Anything to bring in a few extra bucks.

11. Barter your time for goods or services: Walk dogs, water plants, help out with someone’s garden. Be creative.

12. Grow food: This does not take up a lot of space (as I have recently learned). Practice Square Foot Gardening and you will be amazed at how much you can grow in a tiny area.

13. Use what you have: Become Mr. Fix-it and make repairs instead of buying new. Find new uses for old things.

14. Avoid debt: If cash is short this week, wait until next week. Live within your means even it means that you will eat beans and rice for a few days. Put a moratorium on clothing purchases for one season.

15. Secure the homestead: Firearms, weapons, pepper spray or even a baseball bat. The choice is yours. Don’t brag about what you have and do everything you can to make sure you and your supplies are safe.

16. Have an escape plan: I am a big believer in the concept of shelter in place but if you need to evacuate, be ready. Have a plan so all family members know how to communicate with each other and where to meet. Learn about escape routes in your area and practice getting out of dodge.

17. Stay healthy: Eat good food and not a lot of junk. Get physical exercise and try to maintain a decent weight. (I recently read that a good rule-of-thumb guideline is to take you height and divide it by two. Your waistline should be no larger than the resulting number.) Overweight? Try the Dukan Diet to quick start your long term weight loss plan.

19. Recognize that frugal is not a dirty word: It is a smart word. Frugal is not being cheap, it is being sensible. Being frugal now will allow you to get the most mileage out of your funds with something left over for a rainy day – or for the day when an economic meltdown occurs.

20. Prepare your mindset: If you plan for the worse and it never happens, be joyful. On the other hand, if you plan for the worse and you are prepared, you will reduce the possibility of panic in the short term and depression in the long term.

Frugal as a Lifestyle Design

So there you have it. This is the lifestyle design that I have currently embraced not so much because I am worried and afraid, but because I don’t want to be worried and afraid. I want to be able to enjoy life and plan to do so by learning to do things not buy things, learning to smell the roses, and learning to enjoy the simple pleasures provided by a walk along the water with my husband and my dog.

Our world and our society is changing. Don’t be left behind because you forgot to prepare for a time when frugality becomes the norm.


Enjoy your next adventure, wherever it takes you through common sense and thoughtful preparation! -- Gaye


Gaye Levy, the SurvivalWoman, grew up and attended school in the Greater Seattle area. After spending many years as an executive in the software industry, she started a specialized accounting practice offering contract CFO work to emerging high tech and service industries. She has now abandoned city life and moved to a serenely beautiful rural area on an island in NW Washington State. She lives and teaches the principles of a sustainable, self-reliant and stylish lifestyle through emergency preparation and disaster planning through her website at BackdoorSurvival.com. SurvivalWoman speaks her mind and delivers her message with optimism and grace, regardless of mayhem swirling around us.

Clarke and Dawes ask the million dollar questions ABC News Australian ...

Rep. Walter Jones DEMANDS A Complete Fed Audit To Fed Counsel's Face: "The Federal Reserve Is NOT Held In High Esteem By Many People In This Country!"


Video - Congressional Hearings - June 6
Jones speaks and assails Scott Alvarez in the first 30 seconds, then Ron Paul changes course to Gold held (or not) by the Fed.
Read more here:
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AUDIT THE FED - SIGN THE PETITION

How Miserable? Index Says the Worst in 28 Years

When it comes to measuring the combination of unemployment and inflation, it doesn’t get much more miserable than this.
In fa
Getty Images

ct, misery, as measured in the unofficial Misery Index that simply totals the unemployment and inflation rates, is at a 28-year high, reflective of how weak the economic recovery has been and how far there is to go.
The index, first compiled during the soaring inflation days of the 1970s by economist Arthur Okun, is registering a nausea-inducing 12.7—9.1 percent for unemployment and 3.6 percent for annualized inflation—a number not seen since 1983. The index has been above 10 since November 2009 and had been under double-digits from June 1993 through May 2008.
The good news, of course, is that the Fed-led Paul Volcker embarked on a highly successful inflation-slaying campaign that brought the level of misery down sharply through the rest of the ’80s recovery decade.
The bad news, of course, is all the bad news.
Put another way, by Paul Dales at Capital Economics:
“The good news is that other measures suggest conditions aren't quite that bad and over the next 18 months the gloom should lift a little,” the firm’s chief US economist wrote in a Misery analysis. “The bad news is that households won't be in the mood to boost their spending significantly for several more years.”
Dales says all the misery may not be as bad as it appears. An alternative measure, put forth in 1999 by Robert Barro, encompasses a wider swath of misery, measuring employment against the so-called “natural rate” and compares inflation against the previous 10 years. The Barro measure also looks at whether gross domestic product is below its “potential” and compares yields on the 10-year Treasury note against the yields of the previous 10 years.
With all that rolled in, Dales says the Barro index is indicating that while things aren't expected to get dramatically better, the level of misery is probably at a peak and should roll back over the next 18 months.
“The upshot is that Americans might not be quite as miserable as the Okun misery index appears to suggest,” Dales said. “And as inflation falls back, some of the gloom will lift.”
Still, the level of misery, whatever the measure, is high, with many unconvinced that inflation is, as Fed Chairman Ben Bernanke suggests, transitory, or that the economy is in a mere soft patch that will fade.
Investor sentiment continues to fall. The latest Investors Intelligence survey, a weekly poll of newsletter authors, points to bulls outnumbering bears by just a 37 percent to 26 percent margin. Yes, it does indicate more people believing the market is heading higher than lower, but the bullishness is around financial crisis levels.
The survey includes a smattering of comments from participants.
One of the more common that represents the bearish perspective looks at how much optimism there had been in the market prior to the May 2 highs.
“Frankly, we have been stunned by the disconnect that we see between these optimistic calls over the past six to nine months and the reality of what is occurring in the global economy,” wrote Boston-based Hans P. Black in the Interinvest Review & Outlook.
Conversely, misery is not universal, with Elliott F. Gue’s Personal Finance Newsletter making the case for the optimists that one should not “fall prey to the panic fanned by the usual fear-mongering doomsayers,” a group that presumably includes those unemployed or bewildered by inflation and, thus, in misery.