BP gets OK to dump mercury into Lake Michigan

By Bobby Carmichael, USA TODAY

A BP (BP) refinery in Indiana will be allowed to continue to dump mercury into Lake Michigan under a permit issued by the Indiana Department of Environmental Management.

The permit exempts the BP plant at Whiting, Ind., 3 miles southeast of Chicago, from a 1995 federal regulation limiting mercury discharges into the Great Lakes to 1.3 ounces per year.

The BP plant reported releasing 3 pounds of mercury through surface water discharges each year from 2002 to 2005, according to the Toxics Release Inventory, a database on pollution emissions kept by the Environmental Protection Agency that is based on information reported by companies.

The permit was issued July 21 in connection with the plant's $3.8 billion expansion, but only late last week began to generate public controversy. It gives the company until at least 2012 to meet the federal standard.

The action was denounced by environmental groups and members of Congress.

"With one permit, this company and this state are undoing years of work to keep pollution out of our Great Lakes," said Rep. Rahm Emanuel, D-Ill., co-sponsor of a resolution overwhelmingly approved by the House last week that condemned BP's plans.

Studies have shown that mercury, a neurotoxin, is absorbed by fish and can be harmful if eaten in significant quantities, particularly by pregnant women and children. Each of the eight Great Lakes states warns residents to avoid certain kinds of fish or limit consumption.

The permit comes as the states, working with the federal government, are trying to implement the $20 billion Great Lakes Regional Collaboration Strategy, an umbrella plan to restore the health of the lakes signed in late 2005.

Indiana officials said the amount of mercury released by BP was minor.

"The permitted levels will not affect drinking water, recreation or aquatic life," Indiana Department of Environmental Management Commissioner Thomas Easterly told the Chicago Tribune.

BP said it doubted that any municipal sewage treatment plant or industrial plant could meet the stringent federal standards.

"BP will work with (Indiana regulators) to minimize mercury in its discharge, including implementation of source controls," the company said, according to the Tribune.

Part of the concern is that the Great Lakes have only one outlet — the St. Lawrence River.

"Lake Michigan is like a giant bathtub with a really, really slow drain and a dripping faucet, so the toxics build up over time," said Emily Green, director of the Great Lakes program for the Sierra Club.

EU Unveils Bank-Failure Plan in Face of German Opposition

Excerpt:

The European Union’s executive arm is heading for a showdown with Germany over its blueprint for shuttering or restructuring failing banks, a plan intended to complement the European Central Bank’s oversight of lenders.

Michel Barnier, the EU’s financial-services chief, will unveil the European Commission’s proposal for a single bank resolution mechanism today in Brussels,

a day after German Finance Minister Wolfgang Schaeuble urged restraint if the bloc is to avoid conflicts with its basic laws.

“I would strongly ask the commission in its proposal for an SRM to be very careful, and to stick to the limited interpretation of the given treaty,” Schaeuble said yesterday.

“We have to stick to the given legal basis, as otherwise we risk major turbulence.”

EU leaders last month reiterated their support for setting up the resolution mechanism as an integral part of a planned banking union, without specifying how it should work.

At issue is how much authority the new European entity would possess, and what recourse national governments would have to dispute its decisions.

“From a political point of view, the conferral of a power to wind up banks on the commission is arguably the greatest transfer of sovereignty in the history of the EU and points towards a fiscal,

as well as economic and monetary, union,” Alexandria Carr, a lawyer in the London office of Mayer Brown, said by e-mail.

Game Over - “It’s All A Farce, The Fed & German Gold Is Gone”

Game Over - “It’s All A Farce, The Fed & German Gold Is Gone”

Today one of the savviest and well connected hedge fund managers in the world shocked King World News by taking us once again on a trip down the rabbit hole that was nothing short of breathtaking.  Outspoken Hong Kong hedge fund manager William Kaye spoke with KWN about the missing Fed and German gold, where it has gone, and how much gold the People’s Bank Of China (PBOC) really owns.  This interview is going to stun readers around the world.  Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, and also ran money for George Soros, had this to say in part I of his remarkable interview.

Kaye:  “Global hegemony (leadership or dominance) is changing in a way that most people don’t fully comprehend.  This area of the world, the Asia-Pacific, China in particular, is positioning itself to be the leading global power as we look out over the next five to ten years.

My sources tell me that contrary to the public numbers that are available, China has anywhere between 4,000 to possibly 8,000 tons of (physical) gold....

“They are not only the world’s largest producer of gold, but they are the largest importer of gold in the world.

This is an ongoing process for China.  This is a strategic initiative.  So China is massively accumulating the gold that is being extricated from the West at a very rapid pace.  The dynamics here are very geopolitical, and the Far-East is being elevated by this.  

In the ‘New World Order,’ which will ensue when this raid ends, China’s position, Russia’s position, Brazil’s position, will be greatly enhanced.  The position of the United States, as well as Europe and the UK, will be greatly reduced.  Those are the major consequences.”

Eric King:  “Bill, you say China has over 4,000 tons of gold already, possibly as high as 8,000 tons.  Where do you see them heading in terms of their overall ownership of gold?”

Kaye:  “Well, they’re not done yet.  Gold has been leased out, and we do know this (takes place) because it’s been admitted to by the major central banks.  The Fed has admitted it, the European Central Bank has admitted it, the Bank of England has admitted it.  They’ve all admitted that they engage in wholesale leasing of gold to the market.   

In practice how that (leasing) works is the Fed would contact their agent, typically JP Morgan, sometimes Goldman Sachs, and they would say, ‘OK, the gold price needs to be capped, so here is 20, 30, 40, 50 tons (of gold) that we’re going to lease out to you as our agent.  But in theory we can call it back.’  

That’s a great theory, but in reality it’s nonsense because once JP Morgan and Goldman Sachs get the gold they sell it into the market.  So these bullion banks then become net-short gold.  And the Fed says, ‘Well, we still have a contract where in theory we can claim the gold.  So we’re going to report that we still own it in the official documents.’

But in reality the gold has been sold into the market.  That gold winds up in places like Beijing.  But before it gets to Beijing it frequently goes through Hong Kong.  And when it goes to Hong Kong, it goes to our refiner, the same people we use.  And by the way, Eric, we may own some of the gold that Germany thinks that they own.  But Germany will never see that gold because it’s safely stored in my account (and) for our investors at the Hong Kong International Airport.

Regarding that gold, which could have had the symbol of the Bundesbank on it when it arrived in Hong Kong, a leading refiner, one of the biggest in the world that deals with the People’s Bank of China (PBOC), certified that, ‘Yes, we’ve got gold available that we can deliver.  We’ve melted it down, we’ve tested it.  It may have had the Bundesbank symbol on it when it arrived, but now it’s melted down .9999 (fine) gold.’

That’s how it works in practice.  So the Fed gold, that Americans think is theirs, is gone.  The gold that the Germans have been told they will get back in 7 years, they’ll never get back because it doesn’t exist anymore (at the Fed).  I own it.  The People’s Bank of China owns it.  The Reserve Bank of India owns it.  The central bank of Russia owns it.  But the people of Germany (and America) don’t own it.”

Eric King:  “So they (the refiner) have admitted then that the Bundesbank gold, they get those bars in and they just melt them down?”

Kaye:  “What they’ve done is confirmed that everything I’ve told you is correct.  They get gold (bars) from all over the place, including major central banks, including the symbol of the central bank on them, and they melt them down.”

Eric King:  “But they’ve confirmed the Western central bank gold is where it comes from in many cases?”

Kaye:  “Reading between the lines, and you don’t have to read too much between the lines, it’s all a farce.  The gold is gone.  It’s been hypothecated and rehypothecated.  It’s gone.  Not only do the Fed and the U.S. Treasury not own 8,000+ tons, they probably own nothing.”

The Corporation (Full Version)

2003 – THE CORPORATION is a Canadian documentary film written by Joel Bakan, and directed by Mark Achbar and Jennifer Abbott. The documentary examines the modern-day corporation, considering its legal status as a class of person and evaluating its behavior towards society and the world at large as a psychiatrist might evaluate an ordinary person. This is explored through specific examples. Bakan wrote the book, The Corporation: The Pathological Pursuit of Profit and Power, during the filming of the documentary.
Corporations now have more legal rights than people, and people hide behind their corporations to protect themselves from liability and avoid personal accountability.  In a world without risk of tarnishing your reputation or losing your wealth via litigation, are we creating a society where irresponsibility, corruption and immorality is rewarded?  The dehumanization of business spells the death of personal freedom.

Who Decided There Are No Crimes in MF Global Collapse?

Jon Corzine didn’t ask where the money came from and didn’t do anything else about it.

.The New York Post reports that there will be no criminal charges against Jon Corzine over the billion dollars of customer money used to keep MF Global afloat for a few extra days. The Post quotes “federal investigators” as saying there is no evidence of lawbreaking. Some of the evidence is detailed in the complaint filed by the CFTC recently, which you can read here.
The complaint says what happened to the money. It says that Edith O’Brien took the money out of customer accounts, knowing that this was unlawful. ¶ 62(d) For months, these federal investigators were saying that the big problem was foul-ups and mistakes in a mad rush in the back office. That is now inoperative.
The Complaint explains that Corzine knew that the firm was “undersegregated”, meaning it was using for its own business money belonging to customers that the law requires to be segregated. The Complaint says that on Thursday, October 27, 2011 Corzine and O’Brien received documents showing that the firm was undersegregated. ¶ 63(f)

Actually, the true customer segregated balances were even lower than reflected on the documents sent to Corzine and O’Brien, because $415 million in wire transfers from customer segregated accounts had not been properly recorded on Wednesday, which meant that MF Global’s customer segregated accounts, in fact, were under-segregated by more than $298 million. ¶63(f)

The complaint says that the firm filed false segregated funds reports with the CFTC on Friday, October 28, but it doesn’t say who signed off on the reports. Early in that day, Corzine told O’Brien to pay off $134 million in overdrafts to JPMorgan, MF Global’s lender. O’Brien made the payment by transferring money from customer accounts at JPMorgan to a proprietary account at JPMorgan, and then transferring the money from the proprietary account to pay JPMorgan. The Chief Risk Officer at JPMorgan told Corzine that this had happened, and asked for assurances that it was legal. O’Brien responded to an inquiry by Corzine by showing the second transaction. ¶64(k). Corzine didn’t ask where the money came from and didn’t do anything else about it. The Complaint says that:

Corzine also failed to halt multiple subsequent transfers of funds from customer segregated accounts that were made for proprietary purposes. Corzine failed to implement any controls or take any steps to ensure that customer segregated funds were not and would not be unlawfully used. ¶64q

And then there’s this:

Corzine knew on Friday morning that MF Global had transferred $175 million to MFGUK even though he thought MF Global had immediate access to only $82 million in proprietary cash. He further learned from JPM shortly before 2:00 p.m. ET on Friday that the funds were used to pay the overdraft referred to in paragraph 64 above and were in fact transferred from a customer segregated account.

I’m sure there is some reasonable explanation as to why responsible officials do not think any crime was committed. Perhaps I have misread the facts, or maybe whatever happened doesn’t constitute a crime, or something else. Somebody who knows should come forward and provide that explanation. It isn’t enough to send a couple of “federal investigators” out to leak this story.
Where is Preet Bharara, the US Attorney for the Southern District of New York?
Where is Eric Holder, the Attorney General?
Where are Gary Gensler and Bart Chilton, two CFTC commissioners?
If this isn’t a crime, then you need to say why and suggest statutory amendments. If you stay silent, people will just assume you are part of Wall Street corruption.
Photo by Tony the Misfit under Creative Commons license

Fed’s quantitative easing equates to Cypriot government stealing wealth

Wealth confiscation by governments is not new. Over the years it takes different forms and the politics surrounding it comes in various guises.
Recently we’ve seen some interesting examples; Government agents JP Morgan confiscating wealth from MF Global customers is an updated version of scams on Wall St. decades old - going back to the ‘bucket shop’ days. Another recent example has been the confiscation of wealth by the Cypriot government, grabbing money out of people’s bank accounts is a classic example of a greedy government stealing from its own citizens.
Today we also have the Federal Reserve’s QE (Quantitative Easing) program as a stand out. In this scheme, the government prints record amounts of money; trillions of dollars in fact, and effectively deposits that money into the bank accounts of real estate and stock speculators instead of allowing it to circulate.
We know this for a fact as the measure of M2 - a broad based measure of ‘velocity’ of money is signaling a multi-decade low. Because virtually none of this money enters the ‘real’ economy, GDP continues to stagnate and tax revenues shrink - and the same government that gifts trillions to a few supporters also simultaneously imposes austerity measures - while building a record number of prisons and fighting dozens of wars to pick up the slack. 
To put this in perspective, let’s revisit the gold confiscation by FDR in 1933 in America. The government went door-two-door and took people’s gold in the name of the US government. (Actually, they forced them to sell their gold at $20.67 - and then raised the price of Gold to $35 - devaluing money by 40%). The rationale for the gold confiscation was to give the Government a way to crash the value of the dollar (against gold) and then repay its onerous debt burden with cheaper dollars. They inflated their way out of their debts, in other words. 

AFP Photo / Michal Cizek

Imagine if FDR had confiscated that gold and instead of putting it into Fort Knox (a new gold storage facility built for the purpose of storing the confiscated gold) in the name of the people, simply handed it over to his closest supporters; kleptocrats and monopolists who had caused the country to fall in Depression to begin with. Now you have a better idea of Fed policy in America today.
The Fed, by artificially lowering interest rates down to zero and keeping them there (as part of their ZIRP (Zero Interest Rate Policy), has effectively confiscated hundreds of billions worth of savings from people and handed it over to the Fed’s supporters; speculators, market riggers, drug money laundering bankers and influence peddlers.
Meanwhile, in the Gold market to keep the price of Gold from blowing the whistle on this nightmare; the same folks on Wall St. and the City of London who committed brazen acts of fraud with AIG, Lehman, Bernie Madoff, the ‘London Whale,’ Libor rigging, Forex rigging, derivatives rigging, major accounting firms fraud, rating agency fraud, hedge fund fraud, and terrorism financing - have flooded the market with counterfeit ‘sell’ orders (in the form of illegal 'wash trades') on various gold exchanges to force the price lower despite a global surge in demand that has drained Gold warehouses of most of their inventory.

A change is coming

For thirty years the Fed's crime spree has been financed with lower interest rates that are the by-product of reinvestment back into the bond market of the money printed by the Fed and gifted to society’s worst killers and outlaws. But now, the tide has turned. The thirty year bull market in bonds has hit a secular inflection point and no amount of money printing will ever bring rates down to where they were last year when they hit a 300 yr. low in Britain and a 238 yr low in America. 
Cruelly, things are about to get even worse for the average Joe because when these assassins and thieves can’t make their billions abusing Fed policy any more manipulating markets will resort to the more common form of mayhem by making random arrests and throwing people in jail as a way to steal whatever cash and jewelry that might be available.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

The Decline Of Breadwinner Jobs Has Resulted In The Longest Bread Lines In American History

by Michael Snyder

As the number of good jobs continues to decline, the number of Americans that cannot take care of themselves without government assistance continues to explode.  On Friday, we learned that the U.S. economy added “195,000 jobs” last month.  But when you look deeper at the numbers, another story emerges.  Last month, the U.S. economy actually lost 240,000 full-time jobs.  Overall, the U.S. economy has only added 130,000 full-time jobs in 2013, but it takes about 90,000 full-time jobs a month just to keep up with population growth.  So we are losing quite a bit of ground as far as full-time jobs are concerned.  Meanwhile, the U.S. economy has added more than 500,000 part-time jobs so far this year.  Unfortunately, there are very, very few part-time and temp jobs that can be considered “breadwinner jobs”.  Part-time jobs are great for teenagers, university students and elderly people that only want to work a limited number of hours, but what most Americans need are good paying full-time jobs with benefits that will allow them to take care of their families.  Unfortunately, those jobs are continually becoming a smaller part of our economy.
As David Stockman has noted, the U.S. economy has only regained 200,000 of the 5.6 million breadwinner jobs that were lost during the last recession…

By September 2012, the S&P 500 was up by 115 percent from its recession lows and had recovered all of its losses from the peak of the second Greenspan bubble. By contrast, only 200,000 of the 5.6 million lost breadwinner jobs had been recovered by that same point in time. To be sure, the Fed’s Wall Street shills breathlessly reported the improved jobs “print” every month, picking and choosing starting and ending points and using continuously revised and seasonally maladjusted data to support that illusion. Yet the fundamentals with respect to breadwinner jobs could not be obfuscated.

This is a big problem.  As I wrote about the other day, the quality of jobs in America is falling very fast.  Only 47 percent of all adults in the United States have a full-time job at this point, and 53 percent of all American workers make less than $30,000 a year.
Meanwhile, the number of part-time jobs has hit an all-time record high, and the number of temp jobs is absolutely exploding.
Incredibly, the number of temp jobs has increased by more than 50 percent since the end of the recession.  Approximately 10 percent of the jobs lost during the last recession were temp jobs, but close to 20 percent of the jobs gained since then have been temp jobs.
We are witnessing a fundamental shift in our economy.  Full-time jobs are on the decline.  Part-time and temp jobs are on the rise.
In fact, the second largest employer in the United States is now a temp agency.  Kelly Services has become the second largest employer in the country after Wal-Mart.
But it is really hard to pay the bills stocking shelves at Wal-Mart or working temp jobs for Kelly Services.
Unfortunately, these days millions of American workers find themselves having to take whatever they can find.  We live during a period of chronic unemployment.  In fact, according to John Williams of shadowstats.com, unemployment in the United States is now higher than it was at any point during the last recession after you factor in discouraged workers and workers that have taken part-time jobs for economic reasons.
So why don’t more Americans go out and start businesses and create their own jobs?

Unfortunately, thanks to the federal government, state governments and local governments, the environment for small businesses in America today is incredibly toxic.  In fact, the percentage of self-employed workers in this country is at an all-time record low.
As a result of everything that I have discussed above, more Americans than ever find that they cannot take care of themselves without government assistance.
I have often written about the fact that the number of Americans on food stamps has skyrocketed in recent years.  In the year 2000, there were only 17 million Americans on food stamps.  Today, there are more than47 million Americans on food stamps.
But the number of Americans that are dependent on our “modern day bread lines” is actually far higher than that.
According to a recent CNS News article, a total of 101 million Americans are enrolled in food assistance programs.  The following are some of the staggering numbers for some of these programs…

The National School Lunch program provides 32 million students with low-cost or no-cost meals daily; 10.6 million participate in the School Breakfast Program; and 8.9 million receive benefits from the Woman, Infants and Children (WIC) program each month, the latter designed for low-income pregnant, breastfeeding, and postpartum women, as well as children younger than 5 years old.
In addition, 3.3 million children at day care centers receive snacks through the Child and Adult Care Food Program.
There’s also a Special Milk Program for schools and a Summer Food Service Program, through which 2.3 million children received aid in July 2011 during summer vacation.
At farmer’s markets, 864,000 seniors receive benefits to purchase food and 1.9 million women and children use coupons from the program.

Yes, there is some overlap in some of these programs.  So the actual number of Americans receiving food assistance is going to be less than 101 million.
But clearly something has gone horribly wrong.  Our economy is not producing enough good jobs, and more Americans than ever cannot take care of themselves as a result.
This is not normal.  What we are witnessing is the slow-motion collapse of the middle class.  The number of Americans that are dependent on the government for their daily bread is so large that it is difficult to comprehend.  The following are a few statistics from my recent article entitled “21 Facts About Rising Government Dependence In America That Will Blow Your Mind“…
-Back in the 1970s, about one out of every 50 Americans was on food stamps.  Today, about one out of every 6.5 Americans is on food stamps.
-Today, the number of Americans on food stamps exceeds the entire population of the nation of Spain.
-According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
You can read the rest of that article right here.
So what is the solution?
Well, we need a lot more full-time “breadwinner jobs” that will enable men and women to be able to take care of their families.
Unfortunately, we continue to ship millions of good jobs overseas, and our politicians continue to pursue policies which are making the business environment in this country very toxic.
There is not going to be any easy way to fix all of this.  We should have seen a nice bounce in the employment numbers during this so-called “recovery”, but that did not happen.  And now the next wave of the economic collapse is rapidly approaching, and the employment crisis in this country is going to become a lot more painful.

Inflation and housing!!! I am seeing sellers pulling their house off and relisting it higher!!

This market has turned into a massive sellers market… Sellers are getting 2006 prices… all this and rates going higher!!! It looks like smart money knows massive inflation coming… Thoughts? A rerun of 2008 is coming?
The housing-recovery myth
Commentary: A rebound for a wealthy few — and the banks

One of the biggest reasons for the recent stock-market surge is the turnaround of the housing market.

It’s said that there’s never been an economic recovery without a rebound in real estate. And for investors desperate for any sign of a housing rebound, the past year has been a tonic.

You’ve read the headlines: This is a great time to be a home buyer.

Interest rates are still near historic lows. Real-estate prices have edged up, but only slightly when compared with the long-term trend. Some markets — such as San Jose, Calif.; Las Vegas; and Phoenix — possibly are overheating.

That’s the good news. The bad: Very few homeowners are seeing the benefits.

In other words, the housing recovery is bogus.

• Breaking-news alerts: Get free email alerts the instant news breaks

Here’s why: While it’s true that housing appears to be a great investment, it’s only a good investment for a select few — namely, those with access to ample credit and those who aren’t tied down to expensive housing purchases made in the years before the financial crisis.

http://www.marketwatch.com/story/the-housing-recovery-myth-2013-07-09

SIMON LAMBERT: House prices could be about to take off again – and that’s the last thing the UK economy needs
The great property market reflation appears to be gathering a head of steam.
The architects of what may not be Plan B, but definitely looks like Plan A-and-a-half are probably rubbing their hands at the statistics that hint at this.
Stung by the failure of all other attempts to revive Britain’s moribund economy, the Government rolled the dice on the property market again.
On the surface that appears to be paying off.
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2325007/House-prices–thats-thing-need.html#ixzz2Ya59D4CF
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MaxMad

Sprott Money Managers Share the Secret for Surviving the ‘Bernanke Put’

by Zig Lambo of The Energy Report (7/9/13)
The “Bernanke Put,” or promises of quantitative easing, has become the standard government response to economic uncertainty. But while the powers that be insist everything’s fine, Sprott Resource Corp. Founder Kevin Bambrough and COO Paul Dimitriadis see financial deterioration around the globe. Only one thing is for certain: Taking the contrarian view provides the best opportunities to buy low and sell high. In this interview with The Energy Report, they explain why they expect energy assets to perform better in the long haul, cluing us in on a few names they are considering for big returns.
The Energy Report: How would you characterize the current economic background? Are things really looking better in your view?
Kevin Bambrough: Markets typically peak when fear is low and complacency is high, and bottom when fear is rampant and people are extremely worried. The U.S. markets in general have performed quite well this year, but the U.S. bond markets have started to see a lot of hiccups. The European debt market still remains on very shaky ground. The Chinese debt market is now showing major problems in the banking system and the Japanese are still trying to find a solution to their debt woes with increased monetization, and have started an aggressive currency devaluation exercise. Debt levels for governments and individuals around the world are still at unsustainably high levels relative to GDP or individual incomes.
Bankers and governments continually lie to the public and pretend that things are better than they are. If they told the truth, no one would own a bond or keep money idle in cash. These days, the government guarantees and what people have referred to as a “Bernanke put” are the only reason rates are low and the bond market doesn’t crash. The Federal Reserve must talk tough from time to time and pretend it’s going to curtail its quantitative easing. The fact is it can’t.
Curtailing quantitative easing would force interest rates back up significantly, increase the government debt burden and raise the deficit. At the same time, it would crush the housing market and over-levered consumers already struggling to pay off their mortgages. The increased debt burden would bankrupt governments, individuals and the entire financial system.
TER: So realistically we’re stuck with low interest rates for the foreseeable future?
Paul Dimitriadis: There’s no way that rates, in my view, are going to rise anytime soon. The Federal Reserve knows it can’t allow them to rise materially. Americans may have an egocentric view that everything is fine because the S&P 500 is at a new high. Globally, the situation is not that great. The emerging markets have performed terribly this year and we’re starting to see unrest in a number of places around the world as social situations deteriorate rapidly, mainly in Brazil, Turkey, Egypt and such. All is certainly not well and I don’t expect the situation to get better anytime soon.
TER: When will everybody realize this is all a big charade?
KB: I often try to predict the catalyst that breaks the bond bubble. Government bonds are primarily held by mega funds, and sovereign banks. The banks around the world do it because they can lever up and play the carry-trade game. Most governments do it to keep their currencies low and support their export economies.
If interest rates rose, banks would be bankrupt, so they have no interest in seeding their demise. Governments try to pretend that deficits are going to eventually be brought under control, and continually make statements that there is no inflation, so they can prevent their currencies and bond markets from collapsing. Whenever economies slow as a result of higher interest rates, consumer confidence drops and interest rate-sensitive sectors like housing slow. Central bankers, or shall we say central planners, will become more aggressive with quantitative easing and bring the rates down to try to kick-start the economy again. That’s the delicate game they have to continue playing.
I expect this will continue for many years until the systemic U.S. trade deficit stops being funded by foreigners. It could be a few months from now or a few years, but eventually foreigners will come to understand the stupidity of buying U.S. government bonds to try to help their economies. I believe this is the Achilles heel of the system, and the U.S. dollar reserve-based global financial system’s days are numbered. The U.S. dollar will lose its reserve currency status when the Chinese, Japanese, Koreans and other major purchasers of U.S. bonds decide it’s not in their best interest to continue doing so. For the longest time, China and other countries have viewed purchasing U.S. bonds as an effective way to keep their currencies relatively stable. But at some point they’re going to give up on the foolishness of supporting the U.S. trade deficit and focus more on their domestic economy, rather than on competitive devaluation to support exports. The fact is, they collectively have been giving the U.S. over $500 billion worth of goods and services per year for over a decade. They will recoup little from these “loans” in the future. When they try to cash in their bond holdings, they will find there is no buyer other than the Federal Reserve, which will deliver them freshly printed currency that will only be accepted in the U.S.A. because no foreigner will want to accumulate more. When the trillions sent overseas come home to the U.S., inflation will explode and trade restrictions will rise.
TER: So how do we convert this into an investment strategy from a contrarian viewpoint?
KB: It is difficult to try to determine the best asset class to own. You also have to pick a time horizon and focus on what the world is going to look like 10–20 years from now and evaluate the asset classes that could give the best rate of return. Ultimately, we always come back to what we believe—that food, energy and other base and precious metals will do better in the long run. The key to investing in cyclical resource sectors is buying when they’re depressed. Now we’ve got a situation where they’re extremely depressed in many sectors.
TER: What are you doing at Sprott to deal with the current market environment for energy-related investments? Has your approach changed since your last interview?
KB: Precious metal equity values have come down substantially this year and we’re starting to see some very good value and opportunities in that sector. As for base metals, we still think there’s more potential downside.
We’re quite optimistic on developments in the natural gas market. Last year’s injection season marked the smallest inventory increase in the modern history of the natural gas market. The withdrawal season was also the third largest on record, and that was with relatively average winter weather. At around $4 per thousand cubic feet ($4/Mcf), demand is going to continue to grow faster than supply and that price will eventually be pushed higher. That will create value for companies like Long Run Exploration Ltd. (LRE:TSX), which we own, and which has significant natural gas exposure as well as stable profitability from its oil production.
PD: Purely gas-focused drilling activity is almost down to zero. We need to see higher prices to generate drilling demand from producers, which I think we will begin to see this year.
KB: Another sector that’s been quite depressed is coal, mostly as a result of low natural gas prices. A lot of mines have had to close or go through a restructuring. It looks like we’re getting closer to a historic bottom in coal equity valuations and so we’re looking around for opportunities to get some long-term exposure to that sector.
PD: As an example, Arch Coal Inc. (ACI:NYSE) is down from $28 to below $4 in the past two years. It was up over $70 around five years ago before the financial crisis.
KB: During a boom in any sector, a lot of the big companies are tempted to take on debt and continue acquisitions. Arch Coal still has a significant amount of debt. There are other coal companies that will certainly survive. We may not be incentivized to bring a new coal mine into production today, but there’sgreat incentive for us to buy coal mines that have long life reserves and wait.
TER: You mentioned Long Run, which we talked about during your last interview. Where do you think that one’s going?
PD: The company merged last fall (Guide Exploration Ltd. and WestFire Energy Ltd. combined to form Long Run) and recently completed its first couple of quarters as a new entity. Production is going well and cash flow is meeting expectations. It’s focusing on oil production exclusively this year due to the oil and gas pricing environment. There’s a lot of room to pay a dividend later this year or next perhaps, which both we and the market would welcome seeing. Long Run’s gas reserves are significant, so there is huge optionality on the gas side. Overall, it’s a solid story and it’s discounted to its peers, probably because it’s a new name and there’s currently a lack of fund flows into the general Canadian energy market.
Looking at the various metrics relative to its peer group, you can safely conclude that it’s trading at a 30–40% discount. If the sector gets revalued because money starts flying back into it, things can go higher from there. The optionality in the gas market could take the stock even higher.
TER: Sprott Resource Corp. completed that nice deal on its Waseca Energy Inc. holdings last year when it sold out to Twin Butte Energy after four years.


KB: We were very pleased with the performance of that company. Again, we stuck with our strategy of investing in a sector while it was depressed. We bought into heavy oil when it was no bid in Canada, formed the company and ultimately were able to monetize it when margins were significant and the company had grown from zero production into a +4,000 barrels per day company. That delivered another big win for our shareholders with a nearly $70 million profit.
PD: Along that same vein, we’ve invested in a drilling company based out of Houston, Texas called Independence Contract Drilling just over a year ago. It drills shale formations and, again, we invested in the sector when it was generally out of favor, and built the company up from book value to probably having above 12 rigs in production by the end of next year. I expect that at that time we will be able to capitalize on its strong cash flow and look for some sort of monetization, whether it’s an IPO or sale of the business.
TER: Another area we haven’t talked about yet is uranium. I know you’re into Virginia Energy Resources Inc. (VUI:TSX.V; VEGYF:OTCQX). What’s the update on that name?
KB: The uranium market is similar to coal. Natural gas has weakened valuations and demand in all energy sectors. Fukushima also really upset the short-term demand and created a very negative sentiment in the nuclear space. But demand for physical uranium for nuclear power production is going to grow over the next decade or two and mine supply will fall short with $40 per pound ($40/lb) uranium. When we look at overall planned, permitted nuclear facility growth and as well as extensions of the existing facilities, we see robust demand and we see very little supply coming on the market.
PD: We will see large supply shortfalls emerging in the next few years. The market’s going to have to catch up on funding mines, because funding has been scarce over the last few years. We believe a uranium price north of $75/lb is going to be required to balance supply. Although the Commonwealth of Virginia has not yet passed legislation that would provide a framework for permitting uranium mining projects, we are hopeful it will in the near future. At that point the company would be greatly positively revalued.
KB: Regardless of the uranium market, Virginia Energy Resources is one of the largest undeveloped uranium projects in the United States, and major producers will likely try to take out Virginia Energy Resources when the permitting framework is in place.
TER: Where you see opportunities in the fertilizer/potash markets?
PD: Potash prices have softened a bit lately. We’ve invested in one potash company that produces SOP potash, called Potash Ridge Corp. (PRK:TSX; POTRF:OTCQX). It is developing a project in Utah, we think has very favorable economics based on the preliminary economic assessment. A prefeasibility study is expected in the next couple of months, which should give greater clarity on that project. The project’s key benefits are the byproducts in the deposit, which lower the production cost dramatically. It should be one of the lowest-cost producers of SOP potash, which is a growing market globally. We’re optimistic that someone is going to have an interest in an offtake agreement and perhaps assist with the financing in the next 12–18 months.
The phosphate market has been more stable than the potash side. In the U.S., there is some risk for domestic producers due to potential shortfalls in their mines over the coming year. The phosphate market could be in very good shape over the next five years as those companies seek to replace their production. We’re quite optimistic about one of our investments in a company called Stonegate Agricom Ltd. (ST:TSX, SNRCF:OTCPK), which is developing its potash project in Idaho. That should come into production in late 2014 or 2015.
TER: Do you have any final thoughts you’d like to leave with us?
PD: The resource sector, generally, is probably the most out-of-favor it has been in a long, long time. If you’re ever going to put money to work in this sector, right around now would probably be an opportune time to do so.
KB: This is the kind of market that really allows those who are willing to step up and invest to make a lot of money.
TER: Thank you gentlemen, for your updates and insights today.
Kevin Bambrough founded Sprott Resource Corp. in September 2007. He is a seasoned financial executive with more than a decade of investment industry experience and is a recognized leader in the commodity investing space. Since 2009, he also has served as president of Sprott Inc., one of Canada’s leading asset managers, which has more than $8 billion in assets under management. Between 2003 and 2009, he held a number of positions with Sprott Asset Management, including market strategist, a role in which he devoted a significant portion of his time to examining global economic activity, geopolitics and commodity markets in order to identify new trends and investment opportunities for Sprott Asset Management’s team of portfolio managers.
Paul Dimitriadis is Chief Operating Officer for Sprott Consulting and Sprott Resource Corp., where he evaluates and structures transactions, coordinates and conducts due diligence and is involved in the oversight of subsidiaries and managed companies. He serves on the board of directors of two of Sprott Resource Corp.’s subsidiaries, Stonegate Agricom Ltd. and Long Run Exploration Ltd. Prior to joining the Sprott group of companies, he practiced law at Blake, Cassels & Graydon LLP. Dimitriadis holds a Bachelor of Laws degree from the University of British Columbia and a Bachelor of Arts degree from Concordia University.
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DISCLOSURE:
1) Zig Lambo conducted this interview for The Energy Report and provides services to The Energy Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Energy Report: Virginia Energy Resources Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Kevin Bambrough: I or my family own shares of the following companies mentioned in this interview: Sprott Resource Corp. I personally am or my family is paid by the following companies mentioned in this interview: Sprott Resource Corp. My company has a financial relationship with the following companies mentioned in this interview: Sprott Resource Corp. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Paul Dimitriadis: I or my family own shares of the following companies mentioned in this interview: Sprott Resource Corp. I personally am or my family is paid by the following companies mentioned in this interview: Sprott Resource Corp. My company has a financial relationship with the following companies mentioned in this interview: Sprott Resource Corp. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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How much do Americans earn? How the other half lives and examining income growth and median income for US households in 2013.

How much do Americans earn?  Such an important and pivotal question is rarely examined in the mainstream press.  It almost appears to be a forbidden topic of discussion.  You would think that this question would warrant deeper examination given that income is the driving force of our consumer hungry economy.  Yet many people are driven to spend money they don’t have regardless of income because of the booming debt market.  Household income growth is the critical issue when it comes to maintaining a vibrant middle class.  You rarely get a straight answer when it comes to income growth because talking about incomes is taboo and actually is offensive in real life.  Try asking someone how much they make at a party and find out how quickly unpopular you will become.  Yet the data is frigid and cold but tells us many things about our economy.  What Americans earn sheds a deeper perspective as to how well households are doing in the current economy.  So how much do Americans earn at this stage in this so-called economic recovery?

US Household Income

Source:  Census, ACS
The best breakdown of income is from the US Census ACS data that breaks down household gross incomes.  The above chart is fairly clear.  The median household income in the US is $50,500 based on the latest data.  Given that this is the perfect splitting point of 114 million households, you get a better idea of how the other half is living here.
What is fascinating when we dig into Social Security records is that the average per capita wage is $26,000 so this lines up nicely with the predominant two-income household trend we have been seeing over the last few decades.  What I find intriguing however is that most regular television ads seem to cater to the idea that every family is making more than $100,000.  If you look above, only about 20 percent of all US households make that much.  This is why we are in the massive debt problem that we currently have.  We as a nation and at a family level are spending way beyond our means simply by going into massive debt.
Looking at the income distribution in another light might be helpful:

Looked at from a different perspective, we realize how rare it is for households to make more than $100,000.  I always find it fascinating when you have pundits come on TV and act as if $150,000 is middle class.  Look at the raw data.  Unless the definition of middle has changed, the middle is now $50,000.  Instead of arguing that $150,000 is little, they should be discussing why income growth for most of the country has gone cold in the midst of a recovery.  Also, we have over 47 million Americans on food stamps.  These are the families at the other side of the income chart.
Real Income Growth
So what has happened to income growth over the last decade?

The real median US household income is now down to levels last seen in 1995.  For most people, income growth has been virtually non-existent.  In real terms, most families are in a financially tougher position than they were in the mid-1990s.
The peak above is somewhat deceptive however.  In 2007, the peak was reached by a massive debt induced bubble and many tied to this bubble where making inflated wages (similar to the tech boom where simply putting up a website nearly entitled some to million dollar paydays).
Inflation is a sinister beast when it comes to income growth.  If inflation is outpacing wage growth, we get what we are seeing in the charts above.  Your purchasing power erodes and then people wonder why it costs so much to go to college, buy a car, or even a home.
When we adjust for inflation, we see that real income growth only occurred for a small portion of families:

Over the last couple of decades, you would have to be in the top quintile of household incomes to see some true growth.  The top five percent have done exceptionally well but that is only a tiny portion of our country.
Yet if you look at the other 80 percent of households, income growth has flat-lined.
If we break up income growth by age brackets, we also see that younger Americans have taken it particularly hard:

Source:  Dshort
What the above chart doesn’t reflect is the amount of debt that is saddled on young Americans since the cost of going to college since 2000 has gone on a ridiculous bender.  From 2000 to the present, total student debt went from $200 billion to over $1 trillion becoming the second largest consumer debt market only behind mortgage debt.
Economy and Income
So you might be asking how can Americans spend at these levels if incomes are back to 1995 levels:

This is the answer.  While incomes are stuck, debt has massively expanded.  The total debt market is now over 3 times the size of our annual GDP.  Since the crisis hit in 2007, households have been in a process of deleveraging but thanks to low rates, Wall Street and large financial institutions are back to speculating in the markets and injecting tons of digitally printed money back into the economy.  Yet as we have seen with household income data, very little has trickled down to regular families and most of the gains remained at the top.
How much do Americans earn?  The numbers are rather clear.  The typical US household makes $50,500.  With even our modest headline inflation number (of course the CPI understates other items like college debt and home prices) this is problematic because wages are simply not growing.  The above income figures reflect a primary reason why most Americans don’t feel this as a recovery.

World’s Largest Debt Collector To Pay $3.2 Million Penalty For Harassing Consumers

It’s highly possible you’ve never heard of Expert Global Solutions, but it’s the largest debt-collection operation in the world. It also is the subject of a recent Federal Trade Commission complaint alleging that the company and its subsidiaries violated federal law by harassing consumers.
You may remember this list of 23 things that debt collectors are forbidden from doing. According to the FTC, Expert Global — through subsidiaries ALW Sourcing, NCO Financial Systems, and Transworld Systems — disregarded that list and, among other alleged violations, called consumers multiple times per day, even after being asked to stop, called early in the morning or late at night, called consumers’ workplaces even when told that the employers prohibited such calls, and left phone messages that disclosed the debtor’s name, and the existence of the debt, to third parties.
In addition to these allegations, the FTC claims that collectors for Expert Global would continue collection efforts without verifying the debt, even after consumers said they did not owe it.
The company will pay $3.2 million to settle these charges, the FTC’s largest ever action against a third-party debt collector. Of course, when you consider that Expert Global took in at least $1.2 billion last year, the penalty is a pittance. To put it into real-world money, this would be like assessing a $133 parking ticket to a person making $50,000 year; enough to make him grumble about it, but perhaps not enough to stop him from doing it again.
There are of course non-financial stipulations to the settlement. Expert Global must stop violating the Fair Debt Collection Practices Act and the FTC Act by falsely representing that it will not call a number to collect a debt, or by harassing, oppressing, or abusing a consumer while attempting to collect a debt.
Starting one year after the settlement goes into effect, the company must also record at least 75% of its debt collection calls and retain the recordings for 90 days after they are made.
Additionally, if a consumer disputes the validity or the amount of an alleged debt, Expert Global must either close the account and end collection efforts, or suspend collection until it has conducted an investigation and verified that its information about the debt is accurate and complete.

FIAT EMPIRE: Why the Federal Reserve Violates the U.S. Constitution

Some feel the “Fed” is a “bunch of organized crooks” (as John Adams put it) and others feel some of its practices “are in violation of the U.S. Constitution.” Discover why experts agree the Fed is a banking cartel that benefits mainly bankers and their clients in need of “easy money” and bailouts.

Economic Data Spells Disaster – It Is 2007/2008 All Over Again

Links
http://www.wideawakenews.com/
http://www.rense.com/
ATTACHED
15 Signs That The Quality Of Jobs In America Is Going Downhill Really Fast
http://theeconomiccollapseblog.com/ar…
http://www.nationaljournal.com/congre…

This Has Never Happened Before…

by Phoenix Capital Research

The economic recovery hit another record yesterday.
We’ve already had an incredible record setting streak for food stamp usage. Now we can add high unemployment to the mix. The US economy just posted its 54th straight month at which unemployment was north of 7.5%.
This has never happened before. And the worst part is that unemployment is in fact much worse than this indicates. Indeed, the Feds implement multiple gimmicks to maneuver the unemployment number down. As I’ve told Private Wealth Advisory subscribers, the most nefarious is simply not counting those who haven’t looked for a job recently as unemployed.
BOOM! Suddenly a lot of the people who are in fact unemployed don’t count and the unemployment rate drops. After all, one cannot help but wonder how one in five US households is on food stamps, while unemployment is down near 7.5%.
A much better measure of unemployment which I’ve shared with Private Wealth Advisory subscribers, is U6 unemployment, which measures those unemployed plus those who are unemployed and have looked for work in the last 12 months and those who are working part-time for economic reasons.
When you use this measurement, the unemployment rate is closer to 14.3%.



Against this backdrop of weak employment analysts continue to believe that the US economy will pick up in the second half of 2013. This is absolutely impossible. Weak employment means lower incomes. Lower incomes means lower consumer spending. Lower consumer spending means lower economic growth.

I warned Private Wealth Advisory subscribers in our most recent issue that the stock market was on borrowed time. The markets tend to stage summer rallies into the Fourth of July weekend, but with interest rates rising and the bond bubble beginning to burst, things are going to get much worse in a hurry.

This could easily become truly catastrophic. The world is in a massive debt bubble and the Central banks are now officially losing control. The stage is now set for a collapse that could make 2008 look like a joke.
If you are not preparing in advance for this, the time to get started is NOW.

For more market insights and commentary, visit us at:
www.gainspainscapital.com
Best Regards
Graham Summers

Russia’s Gokhran May Resume Gold, Silver Purchases Next Year

Today’s AM fix was USD 1,252.00, EUR 972.58 and GBP 840.95  per ounce.
Yesterday’s AM fix was USD 1,225.50, EUR 954.22 and GBP 822.70 per ounce.
Gold rose $14.80 or 1.21% yesterday and closed at $1,236.50/oz. Silver climbed 1.06% and closed at $19.06.
 
Support and Resistance Chart - (GoldCore)
Gold is over 1% higher in all currencies today. The gains are being attributed to data which showed that China’s inflation accelerated more than estimated in June, boosting demand for the precious metal as a hedge against inflation, in what will become the world’s largest buyer of gold this year.
The Russian State Precious Metals and Gems Repository Gokhran may resume gold purchases in 2014, Bloomberg and Reuters reported citing Russian state news services.
Gokhran, the State Precious Metals and Gems Repository, is a state institution under the Russian Ministry of Finance, responsible for the State Fund of Precious Metals and Precious Stones of the Russian Federation, is set to start buying gold again on the domestic market in 2014 after a two-year break.
Annual purchases by state repository Gokhran may also include palladium and silver.
State-run news service reported, citing an unidentified official with knowledge of the matter, that Gokhran may buy 7 to 10 tonnes (225,050-321,500 troy ounces) of gold in addition to purchases of the Bank of Russia, the Russian central bank.
RIA, The Russian State News Agency, reported that the resumption of purchases depends on approval of amendments by lawmakers during the Duma fall session.
Gokhran's holdings are not part of Russia's more than $500 billion in gold and foreign exchange reserves held by the central bank, which include 32.0 million troy ounces of gold, according central bank data as of May 1.

Cross Currency Table - (Bloomberg)
In 2009, Gokhran sold 30 tonnes of gold to the central bank, in a deal valued at $1 billion that covered part of a budget deficit resulting from the 2008 global financial crash and subsequent recession.
The repository used to buy 3-5 tonnes of gold by advance payment to domestic producers.
Gokhran could face challenges returning to the gold market as it would have to compete with commercial banks which are buying gold on the domestic market and to offer miners better terms, said Sergei Kashuba, the head of the Russian Gold Industrialists' Union.
Russia's 2013 gold production is likely to rise by 3.5%, year-on-year, to 233.8 tonnes.
While the source did not specify how much palladium Gokhran may buy from the market, its sales of the metal from stocks have helped keep the global palladium market in surplus for eight of the last 10 years. These stocks are almost depleted now, according to platinum refiner Johnson Matthey.
Has Gold's 'Bubble' Burst Or Is This A Golden Opportunity?   
Our recent well attended webinar has been uploaded to YouTube.
Topics covered in the webinar included:
* Outlook For Gold And Silver This Year and Coming Years
* Learning From 1970s Bull Market & 1975/76 Price Collapse
* Safest Way To Own Gold And Silver
* Paper and Digital Gold
* Knowing When To Reduce Allocations Or Sell
* Safest Way To Own Gold And Silver
* Extremely Negative Sentiment Towards Gold

Walker's World Euro crisis returns

By MARTIN WALKER, UPI Editor Emeritus

PARIS, July 8 (UPI) -- For the beleaguered small countries of Europe, the euro crisis has become a form of torture, a death by a thousand cuts.
The Portuguese government stumbles on but was weakened by the resignation of the finance minister and the foreign minister.
The former admitted that he had underestimated how deeply his spending cuts would bite into overall economic output and therefore of tax revenues. The latter leads one of the parties in the governing coalition and in his departing speech said that the austerity imposed by Portugal's eurozone partners couldn't go on.
The next tranche of Greece's bailout money has been held up because the Greek government wasn't meeting its pledges to cut the number of state employees and to privatize state assets.
Ironically, some of the same European governments that insist on the cuts were also those that complained when the government announced the closure of its state broadcasting service to save money. Greece's Supreme Court then said the government had no powers to close it, which simply makes the funding gap all the wider.
The Irish economy is back in recession after a brief period of hope. New car registrations in May were down 11 percent on the previous year and the bad loans ratio is 25 percent, the same as in Greece.
The release of tape recordings of Irish bankers, boasting to each other of the way they had tricked the government into bailing them out, has soured the public mood, already depressed after five years of crisis.
The country's budget deficit this year looks to be 7.5 percent of gross domestic product, the worst in the European Union, and public debt is forecast to reach 123 percent of GDP by the end of the year.
This level of debt is dismaying since interest rates are creeping up, after the Federal Reserve in the United States hinted that the days of cheap money could be drawing to a close, with its monthly bond purchases under review.
If interest rates climb, business in the European countries still in recession will cut back in investment. And governments like Ireland will find the burden of debt all the more onerous. Portugal, for example, looks to be reaching a public debt level of 134 percent of GDP.
At least these countries have become more competitive. Unit labor costs in Spain, Ireland and Portugal have fallen more than 5 percent since the crisis began but at a cost of achingly high unemployment. But in Italy, unit labor costs have risen 5 percent, even as the economy stagnates.
And now a new challenge has arisen. Interpol, the international bureau that coordinates crime fighting efforts, says organized crime has expanded dramatically since the recession with 3,600 criminal syndicates active across Europe. As well as narcotics and human trafficking, the new crime boom covers money laundering, counterfeit medicines, online and credit card fraud. Fraud in value-added tax alone is estimated at $128 billion a year in Europe.
"[Organized crime] is having a particularly negative effect on government's attempts to recover from the economic recession by draining away these resources in taxpayer's revenue," Europol Director Rob Wainwright said.
Interpol recently concluded a 2-year study of organized crime in Italy, where the Calabrian Ndrangheta are estimated to generate illicit revenues of up to $56 billion a year.
"The Italian Mafia-style groups are among the most threatening in Europe and in order to fight them, a pan-European approach is needed. Those of us in the law enforcement community need to step up our cooperation in tackling the most dangerous criminal groups," adds Wainwright.
The euro crisis isn't as desperate as it was when the interest rates that Spain and Greece had to pay to borrow money were spiking into double-digits, thanks to the pledge of European Central Bank President Mario Draghi to buy as many sovereign bonds as required. But his ability to continue doing so could be limited by the verdict expected from the German constitutional court, which has been asked to rule whether the bank has the legal right to land Germany with the resulting debt and possible losses.
And the bill is mounting. Adding together the direct bailouts of Greece and the packages issued to Ireland and Portugal, plus purchases of Spanish and Italian bonds and bank support package for Spain, the total is now $870 billion.
And there is no end in sight.

Read more: http://www.upi.com/Top_News/Analysis/Walker/2013/07/08/Walkers-World-Euro-crisis-returns/UPI-80171373256120/#ixzz2YcqLcE00

The U.S.'s Stealth Fighter Is Too Heavy and Slow, So the Pentagon Made Its Performance Tests Easier

The Pentagon's pursuit of the Lockheed Martin F-35 stealth fighter jet has been a heartbreaking one. If you're a tax payer, the program's estimated $1 trillion price tag probably breaks your heart a little bit. If you're an aviation enthusiast, the constant whittling away of the do-it-all aircraft's features, which in many cases actually amounts to adding weight and taking away maneuverability, must hurt a little bit, too.
If you're just an everyday American, though, you should be downright shattered that after a decade and a fortune spent, the F-35 will actually be more vulnerable than the aircraft it's replacing. At this point, the Pentagon is literally rewriting its rulebook so that the dumbed-down super jet will pass muster.
The Defense Department's annual weapons testing report reveals that the military actually adjusted the performance specifications for the consistently-underperforming line of F-35 fighter jets. In other words, they couldn't get the jets to do what they were supposed to do, so they just changed what they were supposed to do.
"The program announced an intention to change performance specifications for the F-35A, reducing turn performance from 5.3 to 4.6 sustained g’s and extending the time for acceleration from 0.8 Mach to 1.2 Mach by eight seconds," reads the report drafted under J. Michael Gilmore, the Pentagon’s Director of Operational Test and Evaluation. (The F-35A is the standard model, so to speak, that the Air Force will use. The line also includes the F-35B, the Harrier-like vertical landing version built for the Marines, and the F-35C, a Navy version that's optimized for aircraft carrier takeoffs and landings.)
To put it bluntly, the Pentagon's new trillion-dollar fighter jet doesn't go a fast as it should, doesn't turn as sharp as it should and doesn't handle as nimbly as it should. This is bad news, explains Wired's David Axe. For the pilots who will eventually take the F-35 into combat, the JSF’s reduced performance means they might not be able to outfly and outfight the latest Russian- and Chinese-made fighters," writes Axe. "Even before the downgrades, some analysts questioned the F-35′s ability to defeat newer Sukhoi and Shenyang jets." That all sounds like bad news, doesn't it? If our expensive new jets can't beat the Russians or the Chinese, who can we fight? I'm pretty sure al Qaeda doesn't have an air force.
The good news in the new Pentagon report is that... well, there is no good news, really. Not only have the requirements been adjusted down to make up for the F-35's poor performance, but a series of problems with the plane's software and safety measures hint at future downgrades to the jet, including adding on heavy hardware that will make the planes even more sluggish. That's what you get when you try to design a single plane to do everything–ironically enough, which was done partly to cut development costs. At least they still look cool:

Walker's World: Euro crisis returns

By MARTIN WALKER, UPI Editor Emeritus

Published: July 8, 2013 at 12:02 AM

PARIS, July 8 (UPI) -- For the beleaguered small countries of Europe, the euro crisis has become a form of torture, a death by a thousand cuts.
The Portuguese government stumbles on but was weakened by the resignation of the finance minister and the foreign minister.
The former admitted that he had underestimated how deeply his spending cuts would bite into overall economic output and therefore of tax revenues. The latter leads one of the parties in the governing coalition and in his departing speech said that the austerity imposed by Portugal's eurozone partners couldn't go on.
The next tranche of Greece's bailout money has been held up because the Greek government wasn't meeting its pledges to cut the number of state employees and to privatize state assets.
Ironically, some of the same European governments that insist on the cuts were also those that complained when the government announced the closure of its state broadcasting service to save money. Greece's Supreme Court then said the government had no powers to close it, which simply makes the funding gap all the wider.
The Irish economy is back in recession after a brief period of hope. New car registrations in May were down 11 percent on the previous year and the bad loans ratio is 25 percent, the same as in Greece.
The release of tape recordings of Irish bankers, boasting to each other of the way they had tricked the government into bailing them out, has soured the public mood, already depressed after five years of crisis.
The country's budget deficit this year looks to be 7.5 percent of gross domestic product, the worst in the European Union, and public debt is forecast to reach 123 percent of GDP by the end of the year.
This level of debt is dismaying since interest rates are creeping up, after the Federal Reserve in the United States hinted that the days of cheap money could be drawing to a close, with its monthly bond purchases under review.
If interest rates climb, business in the European countries still in recession will cut back in investment. And governments like Ireland will find the burden of debt all the more onerous. Portugal, for example, looks to be reaching a public debt level of 134 percent of GDP.
At least these countries have become more competitive. Unit labor costs in Spain, Ireland and Portugal have fallen more than 5 percent since the crisis began but at a cost of achingly high unemployment. But in Italy, unit labor costs have risen 5 percent, even as the economy stagnates.
And now a new challenge has arisen. Interpol, the international bureau that coordinates crime fighting efforts, says organized crime has expanded dramatically since the recession with 3,600 criminal syndicates active across Europe. As well as narcotics and human trafficking, the new crime boom covers money laundering, counterfeit medicines, online and credit card fraud. Fraud in value-added tax alone is estimated at $128 billion a year in Europe.
"[Organized crime] is having a particularly negative effect on government's attempts to recover from the economic recession by draining away these resources in taxpayer's revenue," Europol Director Rob Wainwright said.
Interpol recently concluded a 2-year study of organized crime in Italy, where the Calabrian Ndrangheta are estimated to generate illicit revenues of up to $56 billion a year.
"The Italian Mafia-style groups are among the most threatening in Europe and in order to fight them, a pan-European approach is needed. Those of us in the law enforcement community need to step up our cooperation in tackling the most dangerous criminal groups," adds Wainwright.
The euro crisis isn't as desperate as it was when the interest rates that Spain and Greece had to pay to borrow money were spiking into double-digits, thanks to the pledge of European Central Bank President Mario Draghi to buy as many sovereign bonds as required. But his ability to continue doing so could be limited by the verdict expected from the German constitutional court, which has been asked to rule whether the bank has the legal right to land Germany with the resulting debt and possible losses.
And the bill is mounting. Adding together the direct bailouts of Greece and the packages issued to Ireland and Portugal, plus purchases of Spanish and Italian bonds and bank support package for Spain, the total is now $870 billion.
And there is no end in sight.

Andrew Tyrie: bank reform legislation 'so weak as to be virtually useless'

The Government’s pledge to drive through radical banking reforms cannot be relied upon after ministers watered down legislation designed to allow regulators to break up banks, the architect of the changes has claimed.

Andrew Tyrie, chairman of the Parliamentary Commission on Banking Standards (PCBS), said that legislation presented to parliament on Monday to “electrify” the planned ringfence between retail and investment banks was “so weak as to be virtually useless”.

Vigilance would be needed to ensure that the Government’s pledge to support reforms was carried through.

Mr Tyrie was speaking after the Treasury’s announcement on Monday that it is ready to adopt the majority of the proposals in his commission’s final report, including ensuring that reckless bankers face jail and 100pc clawback on their bonuses.

The Chancellor has published an 80-page response to the PBCS’s final report and declared that the “Government will implement its main recommendations”.

George Osborne added: “Where legislative changes are required we will amend the Banking Reform Bill which is currently before Parliament.”

But Mr Tyrie complained there was a marked difference to the Government’s initial welcome of proposals to give regulators the power to break up banks if they breached the division between retail and investment banking operations and the actual amendment put before MPs.
“It would barely give banks pause for thought,” he claimed.
Mr Tyrie said: “Only when the Government’s formal amendments have been laid before Parliament will we be able to assess them. The amendments put forward to electrify the ringfence demonstrate the need to remain vigilant.”
Mr Tyrie said the Government statement “falls short on a number of important points”. The Government refused to adopt his key demand for stricter leverage ratios to be imposed or to convert the Court of the Bank of England into a board.
While the Treasury agreed with the commission that it should investigate creating a “bad bank” from the Royal Bank of Scotland, it rejected the call for the “good bank” of RBS to be divided too, saying it would be too “costly, complex and time-consuming”. It also rejected the commission’s view that UKFI should be abolished and the sales handled by the Treasury.
It said Lloyds Banking Group was “better placed to return to the private sector without additional restructuring” and added that it was “actively considering options for the sale of its Lloyds shares”.
And it backed the commission’s proposals for better resourced full-time chairmen, who did not hold other directorships, to become the norm.
The Treasury said it accepted the commission’s call for a new Senior Persons Regime for regulators to license key managers.
The regime, which would be backed by tough new rules and criminal sanctions, would address the view that “too many bankers, especially at the most senior levels, have operated in an environment with insufficient personal responsibility”.
The Treasury report said: “It would be simpler legislatively and operationally to apply any reforms to the framework for regulating individuals to the financial services industry as a whole.”
The British Bankers’ Association welcomed the Treasury’s acceptance of the proposals. “Above all, what the industry needs is certainty so it can prepare for the introduction of the new regulatory system,” it said.
A spokesman for Barclays said the report “contained many sound proposals which, when implemented, will help restore trust in the industry”.
The Treasury divided its response to the recommendations into four key areas: strengthening individual responsibility among bankers; reforming corporate governance; boosting competition in the sector; and enhancing stability.
The Treasury also accepted that trading floors are too male dominated and should be more diverse. Although it won’t introduce new rules for trading floors, it “would encourage banks to consider disclosing gender breakdown in some business units and divisions as a matter of good practice”.
On competition, the Government said it had asked regulators to report on barriers to entry for alternative funding providers.