Monday, August 24, 2009

Wildfire rages near Athens, thousands flee

* Thousands flee Greek fires fanned by strong winds

* Fires a test for conservative government

* Foreign help arrives but flights suspended

(Updates with fire receding, fire-fighting planes suspended)

By Renee Maltezou and Dina Kyriakidou

ATHENS, Aug 23 (Reuters) - A huge wildfire fanned by strong winds cut a swathe of destruction near Athens on Sunday, burning houses, razing large patches of forest and sending thousands fleeing their homes, authorities said.

Efforts to fight the blaze from the air were suspended as night fell and the fire raged unchecked for a third day, testing state resources and the conservative government, which is facing the threat of an early election by March.

"The constant shift in the wind's direction is rekindling the flames," said fire brigade spokesman Giannis Kapakis. "We must all remain calm through this night."

Authorities said the fire had retreated from Athens suburbs and was burning mainly forest land, but winds remained strong and the danger for a flare-up was constant.

"It will be a difficult night because everyone is exhausted," said Leonidas Kouris, governor of the eastern Attica region where a state of emergency was declared on Saturday. "We will keep fighting for another day," he told Greek TV.

Earlier on Sunday, local authorities used loudspeakers to urge the 20,000 residents of affluent Athens suburb Aghios Stefanos to leave as the flames approached.

Many people abandoned communities around Athens overnight and some frantically tried to stop the flames reaching houses with garden hoses and tree branches.

"We are facing a great ordeal," said Prime Minister Costas Karamanlis, who took a helicopter tour of the afflicted area. "The fire department is making a superhuman effort."

The handling of the fire, the biggest since Greece's worst wildfires in living memory killed 65 people over 10 days in 2007, will be crucial for his political fate.

His government is clinging to a one-seat majority and the socialist opposition, ahead in opinion polls, has made clear it will use a March parliamentary vote, when a new president will be chosen, to force a snap election.

"Nobody has learned anything from the big fires of 2007," far-right LAOS party leader George Karatzaferis told reporters. "It is a huge disaster and coordination was not the best."


In eastern Attica the flames seared about 30,000 acres (12,140 hectares) of forest, farm fields and olive groves.

"A significant part of forest has been lost," WWF Greece conservation director Constantinos Liarikos told Reuters. "This fire will surely affect the Athens region's microclimate."

Help from Greece's European Union allies has started to arrive. Two Italian aircraft joined fire fighting efforts and more were expected from France and Cyprus.

The Greek weather service warned that winds hindering fire fighting efforts were not expected to abate before Monday night. Police and witnesses said scores of homes were heavily damaged.

The fire broke out late on Friday in the village of Grammatiko about 40 km (25 miles) northeast of the Greek capital and quickly spread to neighbouring villages. A children's hospital and a home for the elderly were evacuated.

Twelve aircraft, eight helicopters, 136 fire engines and about 644 fire fighters battled the blaze, fire officials said. Some 500 soldiers were also dispatched to the fires.

Summer fires are frequent in Greece, often caused by high temperatures and winds, drought or arson. In the last three days, more than 200 fires have broken out, some on the islands of Zakynthos, Evia and Skyros, and in the central Viotia area.

Hundreds of fires across southern Europe in July destroyed thousands of hectares of forest and gutted dozens of homes.

California GOP Pins Hopes on Ex-CEOs

SAN FRANCISCO -- After Arnold Schwarzenegger replaced a Democrat in 2003 to become California's governor, fellow Republicans were hopeful the former movie hero's popularity would help arrest a long decline here.

But six years later, Republican voter registration continues to fall, and now many in the party are pegging their hopes on two former corporate chief executives: Meg Whitman and Carly Fiorina.

Ms. Whitman, former president and CEO of San Jose-based online-auction company eBay Inc., in February threw her hat into the ring for the 2010 race to succeed Mr. Schwarzenegger when his second and final term as governor ends in January 2011.

Ms. Fiorina, former chairman and CEO of Hewlett-Packard Co., this month registered a campaign committee called "Carly for California" for a potential 2010 challenge against Democratic Sen. Barbara Boxer.

The star power of both CEOs is likely to give them some momentum. An August Daily Kos poll gave the 53-year-old Ms. Whitman 24% support among California Republicans ahead of the June 8 primary, topping support for her two main challengers, state Insurance Commissioner Steve Poizner and former U.S. Rep. Tom Campbell.

A July poll by Rasmussen Reports showed Ms. Boxer with a slim lead of 45% among likely voters to 41% for the 54-year-old Ms. Fiorina in a hypothetical match-up. Ms. Boxer cited that slim lead in a fund-raising letter she sent to potential donors July 29. "We've got our work cut out for us," Ms. Boxer said in the letter.

If one or both Republican women are elected, party officials say, the victory could help rescue the California GOP from a steady slide since its heyday in the 1980s, when Republican Gov. George Deukmejian served two terms and a former governor, Ronald Reagan, was in the White House.

California's Republican-party registration fell to 31.4% of voters in 2008 from 38.6% in 1988, amid a rise in independent voters, according to the Public Policy Institute of California, a nonpartisan think tank in San Francisco. Democratic registration also has fallen, but to 44.4% from 50.4% over the same period, according to the institute.

"The California Republican Party is smaller, less influential than it used to be," says Ray McNally, a GOP consultant in Sacramento. "But it has the potential to regain its past glory, and it all comes down to which candidates we field for office."

Political observers say the business-leader credentials of both Ms. Whitman and Ms. Fiorina could be a big draw at a time when California is facing a monumental economic crisis.

The state had to issue IOUs this summer before lawmakers agreed to a deal to close a $24 billion budget shortfall, and has been running in the red almost chronically for the past two years. With California's unemployment rate running at 11.9% as of July -- among the highest in the country -- economic issues are likely to take front and center in the state next year.

"The bottom line for the voters is the economy and jobs," says Allan Zaremberg, president of the California Chamber of Commerce, which endorsed Mr. Schwarzenegger for both his gubernatorial terms. "Our goal is to make that the No. 1 issue for the candidates just as it is for the voters."

The emphasis on economic issues could help offset both women's weaknesses in another area: Both are considered moderate on social issues, in a state party that has long been dominated by conservatives. Both are pro-choice on abortion.

Democrats, meanwhile, insist both are still too conservative for California. "At the end of the day, they're still garden-variety Republicans that are to the right of where Californians are on fiscal issues, the environment, and choice," says Steven Maviglio, a Democratic strategist in Sacramento.

One obstacle the party faces in California, as elsewhere, is that demographic trends, such as increased immigration, tend to favor Democrats. In the governor's race, political strategists say, a woman's presence on the general-election ballot could signal an inclusive image for Republicans. So far, state Attorney General Jerry Brown and San Francisco Mayor Gavin Newsom are leading polls among Democratic candidates for governor.

"Republicans face a few different demographic challenges nationally, and running one or two high-profile female candidates in California helps address at least some of that problem," says Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California and former head of communications for Sen. John McCain's presidential campaign.

Some Democratic strategists dismiss the gender advantage, saying both women were also members of a class reviled by many Americans: CEOs. And they say Ms. Fiorina brings considerable baggage: She was pushed out as H-P's chief in 2005, following her tumultuous rein at the Palo Alto computer giant that began in 1999. Ms. Fiorina also was sidelined as a surrogate for last year's GOP campaign after saying neither Mr. McCain nor former Alaska Gov. Sarah Palin could run a major corporation.

A spokeswoman for Ms. Fiorina said the former H-P chief gets criticism, as well as praise, because she is decisive. "She is strong, she is outspoken, and it comes from who she is," said the spokeswoman, Beth Miller, who added that Ms. Fiorina has received hundreds of emails from supporters around the country urging her to take on Ms. Boxer.

A spokeswoman for Ms. Whitman said she is focused on issues that Californians care most about now, including jobs and the economy. "She is a candidate who can provide the strong leadership Californians are looking for on these issues," said the spokeswoman, Sarah Pompei.

Some Republican officials privately say Ms. Fiorina would likely defeat her only announced rival for the primary, Assemblyman Chuck DeVore, despite his popularity among conservatives. The reason, they say, is that Ms. Fiorina, with her greater name recognition, would likely be in a position to raise far more money to take on Ms. Boxer.

Mr. DeVore issued a statement after Ms. Fiorina announced her exploratory run dismissing her as unclear on issues and "an inviting target" for the Democratic senator.

"Whoever our candidates are," says Mike Villines, former Republican leader in the Democrat-dominated state Assembly, "the key for Republicans in the state is definitely focused on winning."

Large Texas bank shut down by federal regulators

WASHINGTON (AP) - Guaranty Bank became the second-largest U.S. bank to fail this year after the Texas lender was shut down by regulators and most of its operations sold at a loss of billions of dollars for the U.S. government to a major Spanish bank.

The transaction approved by the Federal Deposit Insurance Corp. marked the first time a foreign bank has bought a failed U.S. bank.

The bank failure, the 10th largest in U.S. history, is expected to cost the deposit insurance fund an estimated $3 billion.

The FDIC seized Austin-based Guaranty Bank, with about $13 billion in assets and $12 billion in deposits, and on Friday sold all of its deposits and $12 billion of its assets to BBVA Compass, the U.S. division of Banco Bilbao Vizcaya Argentaria SA, Spain's second-largest bank. In addition, the FDIC agreed to share losses with BBVA on about $11 billion of Guaranty Bank's loans and other assets.

Guaranty Bank, with 162 branches in Texas and California, saw its investments in real estate lending and mortgage-backed securities bought from other banks sour and had been teetering near collapse for weeks. Its parent, Guaranty Financial Group Inc. (GFG), reaffirmed Monday in a regulatory filing that the company was critically short of capital and didn't believe it could stay in business.

In April, the federal Office of Thrift Supervision said the company had engaged in "unsafe and unsound" banking practices and ordered it to raise fresh capital, find a buyer or face a takeover by the government.

Guaranty's failure, along with those of three small banks in Georgia and Alabama Friday, brought to 81 the number of U.S. bank failures this year amid rising loan defaults spurred by tumbling home prices and spiking unemployment. That is the highest number in a year since 1992 at the height of the savings and loan crisis; it compares with 25 last year and three in 2007.

Last week the FDIC seized Colonial Bank, a big lender in real estate development, and sold its $20 billion in deposits, 346 branches in five states and about $22 billion of its assets to BB&T Corp. It was the biggest bank failure so far this year, and the sixth-largest in U.S. history.

Birmingham, Ala.-based BBVA Compass, with 600 branches from Florida to California, said its acquisition of Guaranty creates the 15th-largest commercial bank in the U.S., with about $49 billion in deposits. "This compelling transaction makes excellent strategic sense and represents an exciting growth opportunity for BBVA Compass as we continue to build the leading banking franchise in the high-growth Sunbelt region," Jose Maria Garcia Meyer, chairman of BBVA Compass, said in a statement.

Like Spain's biggest bank, Banco Santander, BBVA has managed to skirt the turmoil that swept the industry worldwide by staying away from toxic assets such as mortgage-backed securities.

Instead, BBVA and other big Spanish lenders stuck to their nuts-and-bolts business of lending to consumers and businesses, relying on it for the bulk of their revenue, Nuria Alvarez, an analyst with Madrid-based brokerage firm Renta 4, said earlier this week.

With its strong presence in the American South through BBVA Compass, the bank had made no secret that it was open to expanding.

"It is no surprise. BBVA had never ruled out buying assets or banks, so long as attractive opportunities arose," Alvarez said. The deal is especially attractive because it enables BBVA to expand in Texas, she said.

The financial crisis is giving Spanish banks "the opportunity to make acquisitions and keep expanding their international presence at much more affordable prices than they would have if this crisis had not emerged," Alvarez said.

The FDIC also announced Friday the closures of Internet-based ebank, located in Atlanta, with $143 million in assets and $130 million in deposits; First Coweta, based in Newnan, Ga., with $167 million in assets and $155 million in deposits; and CapitalSouth Bank, based in Birmingham, Ala., with $617 million in assets and $546 million in deposits.

Stearns Bank, based in St. Cloud, Minn., agreed to buy the assets and deposits of ebank. United Bank, based in Zebulon, Ga., is assuming the deposits and $155 million of the assets of First Coweta; the FDIC will retain the rest for eventual sale. IberiaBank, based in Lafayette, La., is assuming the deposits and $589 million of the assets of CapitalSouth Bank.

Those failures are expected to cost the insurance fund an estimated $63 million for ebank, $48 million for First Coweta and $151 million for CapitalSouth Bank.













































































消防人員疲於奔命,緊急疏散參加夏令營的孩童,以及協助年邁災民撤離鎮,同時極力滅火,軍隊也奉命加入滅火行動,以防山火燒到雅典附近長滿松樹的彭代利科山(M o u ntPenteli)。



























森林廣場(Sim Lim Square)是新加坡最大的電器與電腦中心。












德全國搜尋「中國間諜」 華人留學生成箭靶


一 位在德國一家著名高科技公司工作的華人學者21日給中國媒體記者發來郵件稱,憲法保衛局的兩名官員幾天前到公司給高層經理們講安全問題,重點提到防範中國 來的學者、學生。這份報告上寫道,「日益密切的德中科技、經濟交流所導致的專業人士的往來,有助於中國情報機關蒐集德國經濟和科技情報的努力」。


泰國第二季衰退減慢 減低降息必要


泰國政府今天表示,第二季國內生產毛額 (GDP)較去年同期下降4.9%,第一季則衰退7.1%。經濟師原估將衰退5.1%。



(中央社記者楊淑閔台北24日電)行政院農業委員會中午公布,至上午10時止,莫拉克颱風造成農業產物估計損失及民間設施毀損計新台幣 145億8978萬元;其中農畜漁林損失102億9492.5萬元。


災後 學者建議農民速清園消毒88水災造成重大農損,許多果樹在風雨肆虐過倒伏,中興大學植物病理系主任蔡東纂23日建議,農民應儘速清園消毒,杜絕病菌入侵。(圖:中興大學提供)中央社記者郝雪卿傳真 98年8月23日

農委會統計,其中「農產損失」44億503萬元,包含農作物損失43億9876萬元,農作物被害面積7萬4749公頃,損害程度27%,換算無收穫面積2 萬59公頃;受損作物以香蕉倒伏最為嚴重,被害面積達6147公頃,次為木瓜、番石榴、二期水稻、竹筍、蘭花、番荔枝(釋迦)、葉菜類水傷等。另養蜂損失 627萬元。








畢業潮效應 7月失業率破6%心理關卡




金融海嘯爆發後,去年7月失業率破4%、12月破5%、此後連續7個月屢創新高,以每月至少1萬人的失業數字增加,去年11月起,失業人數更以每月增加4萬人的速度急速攀升,到今年7月份終於打破6%心理關卡,來到6.07% 。




畢業求職潮高峰 7月失業率將破6%創高





Monetary reform: reclaiming $1 trillion every year through public creation of money

Without knowing how money is created and managed, all other topics concerning money are out of context. This is crucial: regarding trillions of dollars of economic power, you have no idea where money comes from. It’s time for you to learn. When people don’t know how money is created and managed, the only thing between them and tyranny is trust in ethical government. American democracy is founded upon cautious distrust of government. To compensate for temptations of power and personal profit in government, the US Constitution is designed with checks and balances. However, because checks and balances can be thwarted if politicians are unethical, the only real protection of liberty is citizen responsibility. American democracy is dependent upon our taking personal responsibility for understanding our most important economic and political issues. This is one of them.
Many Americans believe in the US without understanding our major economic and government policies. Collectively, American’s trust in our government to ethically create and manage money is so pervasive that few of us ever give this multi-trillion dollar issue a moment’s thought. As a teacher of economics, this particular topic is a theme of my class. I hope this brief is helpful for your responsible citizenry.
There are five topics to understand for civic competence in creating and managing money. The first four are standard to economics curriculum; the last is rational analysis:
  • Money and bank credit.
  • Fractional reserve banking.
  • Debt (public and private) and money supply.
  • Historical struggle between government-issued money and private bank-issued credit.
  • Cost-benefit analysis for monetary reform in your world of the present.
I promise you can easily understand each topic and that your understanding will give you an informed policy voice over trillions of dollars. I encourage you to verify and supplement the information in this paper through additional research. My experience as a teacher is that the best tool to visualize this information is to literally see it through an online 78-minute video, “Money As Debt II: Promises Unleashed.” Of many sources: . For background: . For transcript of Money as Debt: . For an excellent overview of our monetary system, Want to’s: . For excellent current articles: .
“The process by which banks create money is so simple that the mind is repelled.”
– John Kenneth Galbraith, Money: Whence it came, where it went (1975), p.29. Galbraith wrote five best-selling books on economics (best-selling to the public), was President of the American Economic Association, economics professor at Harvard, and advisor to four US Presidents.
Please be advised that the ideas most people have about how money is created and managed are false. Because the facts are so different from what most people believe, cognitive dissonance will push some people to reject the facts. Please reaffirm your commitment to embrace the facts. Here we go:
Money and Bank Credit: Money is broadly defined as anything generally accepted for trade. However, in the real world something is money only when the government authorizes it as “legal tender.” Its purpose is to facilitate trade. Fiat money (not exchangeable for a commodity that “backs” the currency) is all that’s required for this purpose because the government enforces its acceptance as payment. Commodity money is the attachment of money to a thing, like gold or silver. This is not needed for legal enforcement and introduces fluctuation as the value of the attached commodity changes. If you’re aware of the violent swings of the price of gold, you’ll understand the risk of a wildly fluctuating value of commodity money. Its proponents, like my friend Ron Paul, argue that linkage to a thing of limited quantity is an acceptable tradeoff compared to their prediction of inevitable corruption of any system designed to limit the supply of fiat currency.
Bank credit is the legal power government has given banks to create quasi-money out of nothing and lend it to the public at interest. Your deposits to a bank are loans to them. The bank can legally take a percentage of your deposit (90 to really 100% through clever manipulations of regulations) and create new credit to lend to the public at interest. They are not lending your deposit, as most people envision. They are making the new credit out of thin air! Bank credit increases the supply of money, causes inflation (by definition as the supply increases), and devalues the money already possessed by the public. Inflation is a hidden tax on your money because purchasing power decreases with inflation. The banking industry benefits from this policy of creating credit out of nothing and lending it to us at interest, while the public has the costs of paying banks to “so-called borrow credit at interest while existing money is devalued. I use the term “so-called borrow” because the loan wasn’t something possessed by the bank. The loan was created out of nothing when you asked for the loan. This can be difficult to grasp. Watching “Money As Debt II” will walk you through the process. When you understand the power of creating credit out of nothing, your mind will probably take the next logical step: why don’t we create money out of nothing to pay for public goods and services directly rather than surrender this awesome power to the banks? You’ll begin to realize: isn’t it insane for a government that has the Constitutional authority to create money to not do so when we have unemployed workers, work that needs to be done, and the resources to do the work???
Fractional Reserve Banking: This is the term for how banks and the banking industry create credit. An individual bank creates credit and “so-called lends” it to the public as a fraction of the deposits the public puts in the bank. Because the money so-called lent ends up in another bank that then so-called lends the money again, the effect in the overall economy is a multiplier effect rather than an individual bank phenomenon of a fraction. It works like this: the definition of “fractional reserve banking” is that banks keep a regulated “fraction” of their total deposits “on reserve,” called their reserve ration (RR) that they cannot “lend,” and can create new credit out of thin air up to the total of all their customers’ deposits minus their RR. Again, because my teaching experience agrees with John Kenneth Galbraith’s quote above that this is difficult to grasp: once a bank is established, they must hold a percentage (ratio) of their total deposits “on reserve” that is not leant to customers. This rate is set by the Federal Reserve (Fed), 10% for established banks and less for smaller ones (however, banks get around these limits and will always make credit on terms profitable to the bank).
This means that if you deposit money into your bank, they can then create credit up to their limit in new “loans.” If you deposit $100, the bank can create new/thin-air credit of $90 to anyone asking for a loan. That’s the micro picture.
The macro picture is that the new credit then circulates to other banks and is “re-leant” at 90% and so on. Let’s say that someone borrows the $90 from your bank, purchases something, and then the $90 ends up deposited in another bank. The receiving bank can create credit, let’s say 90% of up to $81 in new credit. The injection of increasing the money supply comes from the Federal Reserve. They create money out of nothing and then use it to buy government securities or non-voting shares of banks, etc. If they buy a government bond for $1,000 from money they create out of nothing, this new money increases the money by the formula 1/RR. Assuming a simplified textbook understanding of a RR of 10% of deposits that banks cannot create credit from, in this case of the Fed creating $1,000 the new credit/money multiplied from the banking system is $1000 x 1/10%, or $1000 x 10 = $10,000. This is the macro effect if all receiving banks create credit up to their reserve requirement and all “lend” out the new credit.
Because the Federal Reserve is owned by the banking industry, this causes a classic conflict of interest: the banking industry’s profit comes from expanding the money supply and then creating credit to “lend” to us at interest. Expanding the money supply is in conflict with the public’s interest to limit the supply of money to guard its value from inflation.
Some people are confused by the Fed’s ownership. What’s in agreement in all curricula and publications is that the Fed is owned by their member banks; over half the stock is from the New York area (also known as Wall Street banks). Court cases have found in each instance that the Federal Reserve is not a government agency. You cannot find them in a government agency organizational chart in any branch of government. They are listed in the business section of phone books shortly after Federal Express.
Debt (public and national) and the Money Supply: When banks “lend” credit, the interest charge can double the amount the customer must repay. Through fractional reserve banking, only the amount leant is created (principle) but not the interest. Because our US money is only created as debt in our current monetary system, and the interest is never created, we can now explain some extraordinary but predictable outcomes. Money is debt, created out of thin air by private banks, and then “leant” to us to repay at interest. The debt will always be greater than the money supply. It’s impossible to ever repay total debt; we are in debt forever in this monetary system. Please let this important fact have a place of honor in your understanding and think through it’s implications in our economy.
To put this in numbers, the total debt of the US public is currently over $50 trillion.[1] The total US money supply is somewhere around $13-15 trillion.[2] We don’t know the exact amount anymore because the Federal Reserve stopped publishing that figure in 2006, claiming it was unimportant and “too expensive to tabulate and print.” This decision was made without consultation from Congress or opportunity for comment from professional economists or the public. Critics responded that this number is among the most important because inflation is a function of the money supply, tabulating its cost is negligible, and not keeping track of the total money supply is potentially crippling to our overall economy through the risk of inflation. Critics suspect that the Fed is hiding how much they’re increasing the money supply.[3]
The Fed is privately-owned by the banking industry with their meetings closed to Congress and the public. The purpose of all business is to maximize their own profit with limited interest in the public good. The Fed is only audited by giving their accounting books to an independent firm to verify their math is correct in the books. Because the Fed is not strictly and transparently regulated by Congress, we have to trust the Fed that the numbers on their books are accurate. As I’ve gently suggested, trusting people in positions of power is un-American from the view of the Founding Fathers. The only “oversight” from Congress is semi-annual interviews for questions and answers with the Chair of the Federal Reserve. Presidents appoints the seven Board of Governors to help manage the Fed, but historically these selections always come from a short-list of candidates selected by Fed ownership.[4] The term of office for Board members is 14 years. As you may know, Congresspersons Ron Paul and Dennis Kucinich have current bills to fully audit the Fed (HR 1207 and HR 2424, respectfully) that the Fed is opposing to protect its “independence.”
Because the Federal Reserve can always create money out of nothing to buy US government securities, the federal government is tempted to increase the national debt rather than operate a balanced budget. The current national debt of over $11 trillion[5] has an annual interest cost to the American taxpayers over $500 billion.[6] US taxpayers only pay the interest and never pay down the principal of the debt. When the securities are due to be paid, additional securities are sold to cover the cost. There is no government plan to pay the national debt or reduce it rather than vague promises to reduce spending and reduce the debt from higher tax revenue of a strong economy. This rhetoric has no track record of performance since Andrew Jackson enacted partial monetary reform in his administration that ended in 1836.
Please let that sink-in: we only pay the interest on the debt and actually cannot pay the debt because it’s far larger than the money supply. Of course, you’re now thinking there has to be a more intelligently-designed monetary system, you’re feeling good in your citizenry that you’re reading this article, and are excited to discover a better policy in creating money!
But let’s allow the costs of our current system to be fully understood to fuel your passion for monetary reform. The interest payment cost of $500 billion every year to Americans is enormous. As we learned in my article, “The economics of ending poverty,” the investment to fund the UN Millennium Goals that would save a million children’s lives every month while decreasing population growth rates is estimated by professional economists from a low of $40 billion/year to a maximum of $150 billion/year at the project’s most expensive phase.[7] This is a ten-year investment, as sustainable and self-funding development is the project’s goal. Even if we wanted to repay the debt, the average cost to the ~100 million American households is about $110,000. We’ll consider alternatives to this monetary system in our cost-benefit section shortly.
To put this in another perspective, the US Bureau of Engraving and Printing (BEP) has two buildings, one in Washington, D.C. and one in Fort Worth, Texas. Imagine each building has two halves: both print pretty pieces of paper. In one half, money is printed; in the other half, US Treasury Securities. Securities are mostly T-Bills, Notes, and Bonds; they are auctioned to the public every week as loans to whoever buys them and are repaid with interest. Bills are loans for a year or less, Notes are two to ten years, and Bonds are ten to thirty years. These are mostly all marketable, meaning that they can be resold.
If Congress wants to buy government programs beyond their tax revenue, they may print and sell as many securities as they wish but cannot get money directly because that is illegal in our current monetary system. If the Fed wants money, they request as much as they wish at the cost of the paper and then charge the taxpayers as an operating expense. Of course, the Fed can also enter money electronically into accounts. We have no way of knowing if the Fed abuses their power to create money by entering money into accounts and not reporting this on their books. The only safeguard the public has is their word that they would never ever create money for themselves, even though that is possible with a few computer keystrokes and undetectable.
And please let the above facts and risks sink-in.
For comparison, imagine if your family was a nation with the power to print its own money. I offer to take this job from you with the following spin: I’m a banking expert. Whomever you appoint from your family to create money will combine ignorance with inevitable corruption that will be incapable of managing your family’s money no matter what transparent safeguards you enact. Therefore, I will print money to lend to your family at interest. With your family’s increased education and economic productivity, you can only increase the money supply by additional lending from me. As a “government,” your family need never pay off the loan, only the interest. Your family will work for me in paying the interest, and my family will manage the money to lend to your family. This is fair because printing your own money will lead to your ruin.
Your family becomes increasingly in debt to me. After decades of this practice, your family doesn’t give this system any thought and whines about the interest payment and debt without taking any action to understand the system and look for alternative structures. This is our Federal Reserve system today.
Historical struggle between government-issued money and private bank-issued credit: As you can imagine, privately-owned banks would love to have the legal right to create and manage a nation’s money. This authority gives a whole new meaning to “taking your work home with you.” For an excellent comprehensive history, watch “The Money Masters” online (made in 1996: among many) and/or read the updated 2006 transcript: .[8] Watching “Money As Debt II” will give you a general appreciation of the history, as will the historical quotes at the end of this lesson.
Watching “Money As Debt II” is important. From my conversations among AP Economics teachers, their reports are in agreement with my experience that students (of all ages) will not be able to understand our monetary system and creation of debt without a walkthrough demonstration. I highly recommend that you watch the beginning of “The Money Masters;” if you like what you learn, keep watching. The entire video is 3.5 hours, so you might want to watch in chapters. A short written parable might also help: The Money Myth Exploded.[9] The bottom-line of the history is a centuries-long struggle of wealthy bankers who have endeavored for the ultimate banking job. In the US, this struggle was won by the banks with the passage of the Federal Reserve Act in 1913. This allowed for the legal practice of fractional reserve banking and a monetary system of perpetual debt. Let’s consider the alternative envisioned for the Constitution but not included because the debate took so much energy and time at the Constitutional Convention that the members tabled the issue for Congress to resolve later.
Cost-Benefit Analysis for Monetary Reform: Monetary reform would nationalize the Federal Reserve (this name is deceptive so the public would perceive it as a government entity) and retain its use for bank administrative functions. Fractional reserve lending by private banks would be made illegal, with the US Treasury having sole legal authority to issue new money for the benefit of the American public rather than the benefit of the banking industry. About 40% of the national debt is intra-governmental transfers and 10% held by the Fed; this debt would be cancelled as it becomes a bookkeeping entry with nationalization. Of the publicly-held debt of various parties holding US Securities, the US Treasury would monetize (pay) the debt in proportion to fractional reserves being replaced with full reserves over a period of one to two years to monitor money supply and avoid inflation. The American Monetary Institute has a proposal called The American Monetary Act.[10] Ellen Brown has extensive articles, including how states can act now rather than waiting for federal reform.[11]
The governmental cost of this reform is negligible. The benefits are astounding: the American public would no longer pay $500 billion every year for national debt interest payments (because 40% of the debt is intra-governmental transfers, this is a savings of $300 billion/year). If lending is run at a non-profit rate or at nominal interest returned to the American public (for infrastructure, schools, fire and police protection, etc.) rather than profiting the banks, the savings to the US public is conservatively $500 billion.[12] If the US Federal government increased the money supply by 3% a year to keep up with population increase and economic growth, we could spend an additional $400 billion yearly into public programs or refund it as a public dividend.[13] This savings would allow us to simplify or eliminate the income tax.[14] The estimated savings of eliminating the income tax with all its complexity, loopholes, and evasion is $250 billion/year.[15] The total benefits for monetary reform are conservatively over a trillion dollars every year to the American public. One trillion is $1,000,000,000,000. I invite professional economists and committed citizens to analyze and comment on my observation of costs and benefits.
To give you an idea of this amount, imagine a new stack of $1 bills. New bills are about 200/inch. Imagine if you laminated bills in a horizontal stack; this would be the same size as a 2x4 board. Now imagine that this board of money was to travel on your nearest freeway. How far would the money-board go to equal $1 trillion? Make your guess, then check the footnote.[16]
The private sector economic costs of monetary reform are transfers of wealth from the banking industry to the American public. The replacement would be either non-profit banks operating as needed with minimum public cost such as fire departments and the postal service, for-profit banks lending time-deposits in regulated free-market competition, or a hybrid of the two (perhaps with government mortgages at a non-profit rate of 1%).
Monetary reform stops the current built-in increases of the money supply through fractional reserve banking, and redirects it for direct payment of taxes for public goods and services. Each dollar transferred from bank creation to public benefit is one dollar less in public tax payment.
Opponents of monetary reform claim that even if government issued money with transparency, any oversight created would be defeated; government would issue too much money and cause inflation. Ron Paul believes that gold should be used as a physical-limit barrier to creating money. Some fear that any change will make things worse. Some also claim that competition for large profits in the banking industry spur innovation that wouldn’t occur in a non-profit design. Improvements such as ATMs, on-line banking, instant purchasing are worth the cost of giving monetary power to the private sector.
The statutory purposes of the Fed are stable prices, maximum employment, and moderate interest rates. For prices, consider for yourself how well they’ve done since the Fed began in 1913. Ask parents and grandparents if prices have remained stable in their lifetimes or if they’ve increased just a teensy-weensy little bit. You could, of course, also check the data and confirm that the dollar has lost over 95% of its value since the Fed went to work for stable prices.[17]
For employment, consider that we have unemployed people in this country, resources to put to work, and infrastructure to improve; then judge the Fed’s effectiveness in creating money only as debt. For example, consider in California that 20,000 teachers were scheduled to be laid-off in 2008 and again in 2009 because of government budget cuts.[18] We have the need for teachers, the teachers are available, but we have unemployed teachers because the government must borrow its money to hire them rather than issue money directly. Nationally, the US had over 11 million unemployed workers at the end of 2008,[19] and perhaps up to 30 million in August 2009.[20] These millions of individuals are key income earners to a multiple average of 2.5 additional Americans. This unemployment rate puts these Americans livelihoods at risk. This only occurs because money is debt in our current system; we would not have this problem if government restored this Constitutional power and issued money directly. If we were serious about achieving the goal of full employment, OBVIOULSY the only way to achieve it is for government to be the employer of last resort. In market failure of what free-market capitalism cannot employ, we either put people to work on infrastructure/public service jobs or we don’t achieve our goal of full employment. Please ponder that idea to full realization. If the public jobs provided to the unemployed and funded by government-created money provide greater economic benefit than their cost, then inflation will actually decrease from creating those jobs. That is conservative definition of how inflation/deflation works.
Another angle of minimizing our costs: consider that the US Government Interagency Council on Homelessness has compiled every known study on cost-benefits of housing the homeless and providing food, medical care and job-employment services versus just leaving them on the streets. In every case study the costs are less to take action for their care.[21] Ponder that.
For interest rates, the non-profit rate of borrowing money is generally considered among economists at 3% in our current inflationary economy caused by fractional reserve banking. With monetary reform, the non-profit rate for a home loan would be less than 1%. Ask yourself if the value added by the banking industry is worth the amount you currently pay above 1%, understanding as you do that your total cost of a home loan has a higher cost of the interest than the principle. That is, you’re paying the banking industry more than your home is worth for them creating credit out of nothing on their bank books.
Thank you for your attention to this information. If the performance of the Fed is acceptable to you along with its trillion dollar annual cost, feel free to defend it. If you prefer monetary reform, a trillion dollars of benefit every year to the American public will go far to building a brighter future. Because it’s so important for your learning in the observations of people who teach this for a living, I gently request once more: if you haven’t yet watched “Money As Debt II,” please do so now.
My next article will post historical and sourced quotes to allow America’s brightest minds an opportunity to speak to you on this topic. Their contribution to our nation deserves a few minutes of your attention.

[1] Washington Post. Phillips, K. The Old Titans All Collapsed: Is the US Next? May 18, 2008:
[2] Shadow Government Statistics. John Williams. .
[3] Wikipedia for overview: , alternative statistics: Shadow Government Statistics homepage. Williams, J. , and The Mess that Greenspan Made. M3, We Hardly Knew You. Nov. 22, 2005: .
[4] This has been the practice for as long as I remember. I wasn’t able to find documentation from the media; sorry!
[5] Treasury Direct. The Debt to the Penny and Who Holds it: .
[6] Seeking Alpha. Shedlock, M. National Debt and Interest Payments for 2008. Jan. 9, 2008: .
[7] Borgen Project: Poverty Reduction through Political Accountability. and The End of Poverty: Economic Possibilities for our Time. Jeffrey Sachs. .
[8] Many of their quotes from Presidents are not included at the end of this lesson because their sources are usually the Congressional Record. Members of Congress did not footnote their sources and we do not have other written sources to corroborate the quotes.
[9] Evan, L. The Money Myth Exploded: The Financial Enigma Resolved – A Debt-Money System:
[11] Web of Debt is Ellen’s book. My favorite state-solution article is California dreamin: how the state can beat its budget woes: .
[12] Of $50 trillion total debt, a conservative current interest cost of 5% is $2.5 trillion every year. The academic estimate of the true cost of borrowing is about 3%. A $500 billion savings if the profits are transferred to the American public rather than to the banking industry is probably low.
[13] The US GDP is ~$13 trillion every year. Three percent growth is moderately conservative.
[14] Of the US Federal government’s ~$2.5 trillion annual budget, about $1.2 trillion is received from income tax.
[15] Tax Foundation. Hodge, S, Moody, J, Warcholik, W. The Rising Cost of Complying with the Federal Income Tax. Jan. 10, 2006: .
[16] Over three times around the world at the equator. Yes, that’s a lot. Earth’s circumference is ~25,000 miles. There are 63,360 inches in a mile.
[17] US Bureau of Labor Statistics. CPI Inflation Calculator: .
[18] California Department of Education. State Schools Chief Jack O'Connell, Teachers, Support Staff, Administrators Announce More Than 20,000 Teachers and Support Staff Getting Layoff Notices Due to Budget Crisis. March 14, 2008:
[20] Huffington Post. What a jobless recovery today means for tomorrow? . August 17, 2009. Also consider economist John Williams Shadow Stats site: .

Reuters: Pot Kills Cancer But Don’t Even Think About Using It!

The MSM may be starting to pay attention. I just got off the phone with CBS News radio, who will be covering this story imminently.


It was just yesterday that I was lamenting about the mainstream media’s failure to report on the anti-cancer properties of cannabis. And then along comes Reuters with this:

Cannabis chemicals may help fight prostate cancer
via Reuters News Wire

Chemicals in cannabis have been found to stop prostate cancer cells from growing in the laboratory, suggesting that cannabis-based medicines could one day help fight the disease, scientists said Wednesday.

After working initially with human cancer cell lines, Ines Diaz-Laviada and colleagues from the University of Alcala in Madrid also tested one compound on mice and discovered it produced a significant reduction in tumor growth.

Their research, published in the British Journal of Cancer, underlines the growing interest in the medical use of active chemicals called cannabinoids, which are found in marijuana.

Experts, however, stressed that the research was still exploratory and many more years of testing would be needed to work out how to apply the findings to the treatment of cancer in humans.

“This is interesting research which opens a new avenue to explore potential drug targets but it is at a very early stage,” said Lesley Walker, director of cancer information at Cancer Research UK, which owns the journal.

It absolutely isn’t the case that men might be able to fight prostate cancer by smoking cannabis,” she added.

Well, well, well, leave it to the MSM to misrepresent the facts and miss the real story. First, the chemicals assessed in this study, R(+)-Methanandamide and JWH-015, are neither “cannabinoids” nor are they “chemicals in cannabis.” Rather, they are synthetic, selective CB2 receptor agonists. In short, they are chemicals created in a lab to mimic certain elements in marijuana, and to bind to specifically to those cannabinoid receptors that are not located in the brain. After all, we can’t possibly have the terminally ill feeling ‘better’, now can we?

Second, US federal researchers have known for some 35 years that the naturally occurring chemicals in cannabis — not just synthesized agonists — can halt the proliferation of multiple types of cancer, including including brain cancer, prostate cancer, breast cancer, lung cancer, skin cancer, and pancreatic cancer. We even know how.

Cannabinoids: potential anticancer agents
via Nature Reviews Cancer (2003)

Cannabinoids are usually well tolerated, and do not produce the generalized toxic effects of conventional chemotherapies. … Cannabinoids inhibit tumor growth in laboratory animals. They do so by modulating key cell-signaling pathways, thereby inducing direct growth arrest and death of tumor cells, as well as by inhibiting tumor angiogenesis and metastasis. Cannabinoids are selective anti-tumor compounds, as they can kill tumor cells without affecting their non-transformed counterparts.

Of course, the real question — conveniently ignored by Reuters and the rest of the MSM — is this: Why, after three decades and dozens of preclinical trials documenting cannabis’ potent anti-cancer abilities, are “many more years of testing” necessary? Last I checked, humans die en masse from cancer, not rats! Yet for some 35 years scientists have been content to replicate these cancer-killer findings in animals and in petri dishes, all the while warning, “It absolutely isn’t the case that men might be able to fight prostate cancer by smoking cannabis.”

Well why the hell not? Not only can cannabis alleviate cancer patients’ nausea and pain, elevate their mood, and increase their appetite, but also — as dozens of preclinical trials over the past three decades consistently demonstrate — marijuana may help to alleviate the very disease that’s ravaging their bodies. Of course, rather than put this theory to the test, investigators for more than three decades have been willing to let people with a terminal illness die while they piddle around with their petri dishes. And to date, not one reporter from the mainstream media has ever had the guts to ask them why.

Global Trading Showing No Sign of Recovery

I happened to be watching The Kudlow Report last tonight were First Trust’s Chief Economist, Brian Wesbury, stated that the economy is in great shape and global trade is fantastic. He cited the Baltic Dry Index as an indicator of strong trade. However, there must be another Baltic Dry Index as the one everyone else follows shows a horrible past month.
In fact, the Baltic Dry Index has dropped another 3.1% Wednesday on top of horrible losses in the last few weeks. Couple that with Japan’s latest trade data which shows the China is now Japan’s largest trade partner. Furthermore Japan stated that exports to the US dropped by 43% to $40.5B which is a stunning drop since most have declared the recession is over.
The latest report from Japan also said the following:
Outlook for 2009
Looking at the whole of 2009, Japan-China trade will likely record its first decline in 11 years (since 1998), pushed by the downward trend that began in November 2008. This fall, however, will not be as severe as seen in the first half of 2009, with the global economy forecast to rebound in the second half of the year.
1) Since a rapid recovery in consumption in Japan, the US, Europe and other developed economies is unlikely, China’s exports of finished products is expected to continue its downward trend, leading to a continued decline in Japan’s exports of high-value added parts and materials to China.
2) A temporary increase in exports of pumps and other machinery is expected, due to increased infrastructure spending in line with the Chinese government’s 4-trillion-yuan stimulus package (its effect on total exports, however, is expected to be limited).
3) In the second half of 2009, China’s consumer market is expected to expand, along with a recovery in domestic production. This will have a positive effect on Japan’s exports of parts and materials, although to a limited extent, as the majority of goods for domestic consumption are low value-added items.
1) Under the current state of the Japanese economy, which is not expected to achieve a quick recovery in 2009, Japanese domestic demand will likely remain stagnant. Therefore, Japanese imports from China, which consist mainly of consumer goods, are expected to fall again this year.
2) Due to weak growth in personal incomes, Japanese consumers will turn more towards inexpensive clothing and food items from China—but this will have limited impact on a value basis.
3) Japanese imports of low-priced parts and materials from China (used in finished goods production in Japan) are likely to decrease again in 2009, as an early recovery in both internal and external demand is thought unlikely.
There is nothing in that segment of the report that is positive. In fact it looks a lot like the data we are getting here in the US. As reported yesterday the ports of Los Angeles and Long Beach are way down which is reflected in the data that Japan just put out. Simply put, there is no demand either domestically or internationally with one exception, China.
As I have stated before, you cannot have a jobless, earning-less, revenue-less and, now, demand-less recovery. Yes, we will see a good 3Q09 GDP report, but it certainly will not be 4.5% like the market is pricing in and it will more than likely not last until 4Q09. This is a global problem that has yet to be fixed and programs like cash for clunkers or cash for whatever will not work long-term.
The problem is now unemployment and, frankly, has been unemployment for a long time now. If people do not have jobs they will not buy things. If people do not buy things that means the supply of products will be in surplus for some time and earnings will be much lower. Unemployment is also the problem behind the housing crisis and housing is still a major threat to the banking system.
We can bury things by getting rid of mark-to-market and telling ourselves that ongoing unemployment claims means that people are finding work, they are not, but hoping things are better does not fix the problem. As of right now we need to let it play out in order to prevent prolonging the recession, possibly making it worse, and by hiding the very problems that got us here makes it entirely likely that the same problem will come back worse than before.