Sunday, December 5, 2010

Dollar tumbles after disappointing jobs report

NEW YORK (AP) - The dollar tumbled broadly Friday after a November jobs report showed a higher rate of unemployment in the U.S., a sign that the economic recovery is still struggling.

The dollar dove as the U.S. government said the unemployment rate increased to 9.8 percent last month from 9.6 percent in October. That's the first increase since August and the highest level of joblessness in seven months.

Economists were expecting the economy to add about 150,000 jobs last month, nearly as many as in October. Instead, employers added only 39,000 jobs.

"Recent labor market news has generally shown an improvement, but this report is a clear break to that trend," wrote Kevin Logan, HSBC's chief U.S. economist, in a research note.

In late morning trading in New York, the euro jumped to $1.3375 from $1.3210 late Thursday. It earlier edged above $1.34 for the first time since Nov. 24.

The euro had fallen about 10 percent in November as traders nervous about a deepening European debt crisis sold off the shared currency. The euro has rebounded in recent days as the European Central Bank said it would extend emergency liquidity measures, supporting Europe's financial system. Traders have acted on rumors that the central bank was stepping up its purchases of the debt of the 16-nation region's most indebted members.

In other trading Friday, the British pound rose to $1.5741 from $1.5584, while the dollar fell to 82.90 Japanese yen from 83.90 yen. The U.S. currency also slid to 0.9777 Swiss francs from 0.9936 Swiss francs, but edged up to 1.0045 Canadian dollars from 1.0034 Canadian dollars.

The dollar slid 1.2 percent against an index of six major currencies, a steep decline.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Massive Monetization: The Failure of the International Financial System

The price of commodities, particularly food and petroleum products, will be higher in the coming year, which will strain budgets more than ever for those who still have jobs. Unemployment will not get appreciably better and government debt will rise. Government is talking about raising the Social Security retirement age by three years, freezing payments and offering government guaranteed annuities in exchange for those of you that do have retirement plans. Two-thirds of those in and about to retire have only Social Security for 50% of their income. The money collected since 1935 is all gone, having been spent by past politicians. In fact, if you put all present and future commitments together you have a debt of $105 trillion.

The US wants to avoid default and devaluation of the dollar. They can raise taxes, cut spending or default on their Social Security and Medicare commitments, and commandeer personal retirement plans. In whole, or in part, these are options for government. If they cannot manage these changes then the Fed will have to increase money and credit, which is now euphemistically labeled quantitative easing. The powers behind government have looted the system perpetually, but particularly since August 15,1971, when the gold standard was abandoned and the result of this gutting and its consequences is about to manifest itself. Unemployment refuses to fall and little is being done to improve the situation. This year five million American workers lost extended unemployment benefits, as Wall Street, bailed out with taxpayer’s loans, is showering their employees with hundreds of billions of dollars in bonuses. There is no question these are the seeds of which revolution is born. We can as a result expect demonstrations and unrest, as we are now seeing in Europe, which could end up in rioting and other antisocial behavior.

Considering what the Federal Reserve and the US Treasury have done over many years we believe we can expect a continuation of fiscal spending and more money and credit to be injected into the economy. That will lead to higher inflation, which could lead eventually to hyperinflation. In preparation in businesses or professionally, or individually, your cost of doing business or living should be reduced and those savings should be used to purchase gold and silver bullion coins and shares. This is the only way you can protect your investable assets. Business and job opportunities have already fallen off a cliff and we believe that situation will get much worse.

Many of you have IRAs and 401Ks, which we have said your government would like to get their hands on. They are not going to stop pursuing these savings, so you have to act before they do. The government desperately needs that $6 trillion. These funds are at risk, even if all you have in these vehicles are only gold and silver coins or shares. If legislation is passed confiscating these assets and you are given a government guarantee on return, you end up with 100% of nothing. Based on that IRAs and 401Ks should be systematically liquidated with an eye toward tax consequences and penalties. Those who refuse to do so will suffer grievous losses.

If the dollar loses 50% of its value versus other major currencies or even more versus gold and silver you will suffer a major loss of buying power. Those are losses versus inflation. If we have hyperinflation the losses will be even worse. That means you have to get a loan against your 401k and invest those funds in gold and silver related assets. 401Ks and pensions are invested in stocks, bonds and other possible illiquid assets. If the stock and bond markets fall you could lose a big part of your savings. Get whatever you can out now while you still can.

Presently many of our readers tell us that people who they explain the problem to think gold and silver are too high. We heard the same thing when gold was $350.00 and silver was $10.00. Unfortunately, 98% of the population doesn’t have a clue to what is going on. They do not understand the massive printing of dollars and credit that has been flooding the world. The monetization is massive as is the fiscal insanity that has been going on in government over the past ten years. How can anyone even consider being long the dollar? That said, the faster one gets into gold and silver related assets the better off they will be. Those who prefer not to listen we refer you to the 60% to 95% losses absorbed during the “Great Depression” of the 1930s.

It is normal for a world reserve currency such as the dollar to be backed 25% by gold. As you all know that has not been the case since August 15, 1971. Over the 39-year period since then debt has risen exponentially, almost to the point of insanity. The world will awaken in time but the cost for not listening will be dreadful. This is why over the next several years gold will easily go to $7,700 an ounce or higher and silver will range between $100 and $500 an ounce. Remember, gold is the only real money and it does not owe anyone anything. For those of you who do not know it gold has been used as money, along with silver for 6,000 years. Do the elitists really think they can beat that kind of track record? We do not think so.

The Fed is creating money and credit at an annual clip of $1.8 trillion and is going to continue to do so. On top of that they have set interest rates at zero percent and they still cannot create a recovery. Worse they know what they are doing is not going to work. As a result inflation to 6 to 7 percent not the 1.2% government would lead us to believe. When government admits that inflation in the future is 5-1/2%, we can assure you it will really be over 14%. Overall interest rates are negative and being in dollar denominated assets is a losing experience unless you own gold and silver bullion, coins and shares. The only thing that has allowed the dollar to retain value on the USDX is that Europe’s banking system is in a state of collapse. Still, all currencies are falling versus gold. Under the circumstances Europe’s austerity measures were the wrong thing at the wrong time, because at the same time the Fed was beginning QE2 taking them in opposite directions. Next you will see new stimulus being fed into the euro zone by the ECB, the European Central Bank. It is inevitable that the euro zone and the EU will collapse and that will be the linchpin which will take the entire world down financially.

The failure of the international financial system and the inability of elitists to control it leave them open to loss and exposure of what they have been up too.

Is the College Debt Bubble Ready to Explode?

Laura Rowley
Yahoo! Finance

Kelli Space, 23, graduated from Northeastern University in 2009 with a bachelor's in sociology — and a whopping $200,000 in student loan debt. Space, who lives with her parents and works full-time, put up a Web site called soliciting donations to help meet her debt obligation, which is $891 a month. That number jumps to $1,600 next November.

In creating the site, Space, of course is hoping to ease her financial burden, but it's "mainly to inform others on the dangers of how quickly student loans add up," she said. So far she's raised $6,671.56, according to her site.

Space is just one example — albeit an extreme one — of a student loan bubble that may be about to burst. Over the last decade, private lenders, abetted by college financial aid offices, eagerly handed young people hundreds of thousands of dollars to earn bachelor's degrees. As a result of easy credit, declining grants and soaring tuitions, more than two-thirds of students graduated with debt in 2008 — up from 45 percent in 1993. The average debt load is $24,000, according to the Project on Student Debt.

In some respects, the student loan crisis looks remarkably like the subprime mortgage crisis. First, outstanding student loan debt has ballooned: It grew roughly four-fold in the last decade to $833 billion as of June — surpassing outstanding credit-card debt for the first time.

Secondly, defaults have soared amid a difficult job market. In 2008, the most recent year for which data are available, nearly 3.4 million borrowers began repayment, and more than 238,000 defaulted on their loans. The number of loans that went into forbearance or deferment (when borrowers receive temporary relief from payments) rose to 22 percent in 2007, from 10 percent a decade earlier, according to The Chronicle of Higher Education. Over a 15-year period, default rates range from 20 percent for federal loans to 40 percent on loans to students who attend for-profit schools, The Chronicle found.

Just as lenders offered easy no-money-down mortgages to unqualified borrowers during the housing boom, private student loan firms offered instant online approval for up to 100 percent of college costs to students, in some cases for four consecutive years. In early 2007, half of loans made by Sallie Mae, one of the industry's biggest players, were to students with no co-signers, according to Mark Kantrowitz, founder of informational Web site

As tuition costs have outpaced the caps on federal loans, more families have turned to private loans, which carry higher interest rates and stricter repayment rules. Last year private lenders supplied about $10 billion in loans (compared with $100 billion in federal loans). A study by the College Board found about a third of graduates in 2007-2008 had private loans. About two dozen private lenders offer student loans, and their business is growing at 25 percent annually, after a temporary decline amid the recent credit crisis, according to

Space, for instance, took out $12,000 in federal loans and borrowed $189,000 from private lender Sallie Mae. In an email interview, Space said she spent the money on tuition and room and board for four years; two summer semesters; a three-month study abroad program in Ireland; and books for three semesters. Some $20,000 of her debt is accrued interest. (Interest rates on her loans range from 3 percent to 9 percent.)

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Bernanke Won’t Rule Out More Bond Buys

Federal Reserve Chairman Ben Bernanke told CBS in an interview to be aired Sunday that he’s not ruling out purchasing more bonds to aid the U.S. economy, the network said in a release Friday.

In an interview taped Tuesday in Columbus, Ohio, Bernanke defended the central bank’s program to buy $600 billion in U.S. Treasury notes, which was attacked by senior politicians in the U.S. and abroad. Top Republicans charge the bond purchases, due to end in June, could bring high inflation and may weaken the U.S. dollar excessively.

Like he did in 2009 to defend the government’s actions to fight the financial crisis, Bernanke is going to appear for the second time on “60 Minutes,” the CBS News show, this Sunday to discuss the most pressing issues facing the U.S. economy.

JP Morgan revealed as mystery trader that bought £1bn-worth of copper on LME

The American investment bank JP Morgan is the mystery trader that grabbed more than half the copper on the London Metal Exchange, The Daily Telegraph has learned.

Copper Wire Spools
The trade was described in the LME's daily update as 'between 50pc and 80pc' of the 350,000 tonnes of copper in reserves

The $1.5bn (£1bn) trade was described in the LME's daily update as "between 50pc and 80pc" of the 350,000 tonnes in reserves. This pushed up the price for the immediate delivery of copper to $8,700 – its highest level since the financial crisis in October 2008.

A high premium on the spot copper price normally reflects fear of a shortage of the metal, which is in hot demand across the world as a vital component in a mass of products from electrical gadgets to wiring.

A source close to the situation said that JP Morgan had bought the copper contracts, adding that amount is closer to the "lower portion of the range" disclosed by the LME.

Traders said JP Morgan's name had been circulating the market all day as the most likely buyer, especially since it is about to launch a physically-backed "exchange-traded fund" (ETF) in copper imminently.

One metals broker dealing on the LME said: "The story is that they're positioning themselves in front of the ETF. There's been a lot of speculation it's them."

Traders noted that there was no physical shortage of copper in the markets but that fears of a squeeze have persisted ever since a raft of investment banks announced their intention to launch ETFs this autumn.

Last month metal traders wrote to the Financial Services Authority (FSA) claiming that licensing the funds, which are also likely to be launched by BlackRock, Goldman Sachs and Deutsche Bank, may amount to "approving the next financial bubble".

It is estimated that if the copper funds are fully subscribed they would be looking to buy more than half the total stocks in LME warehouses.

Traders' concerns are based on the ETF model that will require the investments to be backed by physical metals, such as copper, lead, aluminium and nickel, rather than paper assets offered by futures contracts.

Daniel Major, a metals analyst at RBS, said: "There isn't a huge buffer available for the market. The supply situation can quite easily tighten in copper."

The LME moved to quash claims that a rogue speculator was attempting to corner the copper market.

Diarmuid O'Hegarty, head of compliance, said: "The LME has noted recent comments about the current circumstances in the copper market. Such circumstances are not unusual and the exchange is exercising its well established procedures for maintaining an orderly market."

He added that large trades were not a cause for concern because the market's rules dictate that holders have to lend out a proportion of their stock to ensure a smooth supply of the metal.

Fundamental supply pressures have also been pushing up the copper market. Rio Tinto, the mining giant, warned last week that next year's copper production would be lower than expectations. And a strike at an Xstrata mine in Chile, the third largest in the world, has been going on for longer than predicted.

JP Morgan declined to comment.

How Wall Street Shafted Main Street

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JP Morgan Silver Manipulation Explained

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“Netanyahu, who despises President Barack Obama, has rightly seen the cajoling by the United States as weakness and as the consequence of failure by Washington to articulate any coherent policy in the Middle East…”

by Philip Giraldi

Former US Ambassador to Israel Daniel Kurtzer

A former US Ambassador to Israel Daniel Kurtzer has written a well reasoned op-ed explaining that throwing concessions and gifts to Israeli Prime Minister Bibi Netanyahu in an attempt to obtain relatively minor concessions on his part is precisely the wrong policy to pursue. Kurtzer notes that the deal will be a major shift in policy “…the first direct benefit that the United States has provided Israel for settlement activities that we have opposed for more than 40 years” and he asks “Does anyone really believe that there is a substantive connection between a three month settlement freeze and Israel’s professed need for more airplanes?”

Netanyahu, who despises President Barack Obama, has rightly seen the cajoling by the United States as weakness and as the consequence of failure by Washington to articulate any coherent policy in the Middle East, meaning that he knows that Israel has been empowered to get away with virtually anything it might demand. Netanyahu has obligingly gone to the whack jobs and wing nuts in his own rickety right wing coalition and asked them to present him with a wish list for Washington, confident that Hanukkah has already begun and Christmas is right around the corner.

The latest demand appears to be freedom for Israeli spy Jonathan Jay Pollard, who is an Israeli citizen, has a holiday named after him, and is regarded as a national hero in many right wing Zionist circles. That Israel is completely dependent on Washington for its security and on the American taxpayer for its high standard of living has never inhibited the country’s security service Mossad from using agents like Pollard to steal everything not nailed down from the United States. Pollard currently is spending his time in a federal prison in North Carolina for walking off with a roomful of American top secrets in exchange for money back in the 1980s. I have already described the astonishing damage that he did as well as the reasons why he should never be released but politicians have short memories and President Obama appears to have no memory at all, so if he is pressed by the friends of Israel to release Pollard he will no doubt contrive some weasel worded explanation why it is in America’s interest to do so. And he will do it with a straight face, almost certainly saying something about peace on earth and good will towards men.

And Obama would not be alone in his beneficence. For those who think it inconceivable that a large number of congressmen might petition seeking clemency for a convicted foreign spy who did enormous damage to the United States, think again. Pollard has recently obtained the services of Barney Frank and thirty-eight other Democratic congressmen who have signed on to a letter coordinated with a number of Jewish groups. They apparently believe that the poor guy has suffered enough in service to his country, which is of course Israel, making one wonder why American politicians should feel the pain. But no matter, as we all know where the faux compassion comes from.

Arguing that Pollard should be released because he was only helping a friend and ally, the incredibly plucky splendid little democracy in the Middle East, has not worked up until now, so the congressmen have adopted a slightly different line. They are arguing that Pollard has shown “remorse” and that his punishment is disparate vis-à-vis others who have committed similar crimes. They contend that the years already spent in prison have been “sufficient time from the standpoint of either punishment or deterrence.” They deleted a line from the first draft of the letter that suggested that the release of Pollard would help the Middle East peace process, possibly because even they realized that no one would believe it.

Well congressmen, the truth is that both Pollard and his wife Anne have bragged about the information he provided to Israel while he has never expressed contrition about spying against his country of birth. He has persisted in the big lie that he provided the intelligence only to help Israel against its enemies instead of for money and has also incorrectly maintained that he merely stole information that would be of use in Israel’s defense. If there is any remorse being expressed by Jonathan Jay Pollard, it is over his having to spend twenty-five years in prison.

And as for the deterrence value, it is somewhat hard to imagine what that might be as people who spy for Israel continue to be let off with a slap on the wrist or even less because the Justice Department refuses to prosecute even after FBI agents labor to make a viable case. Ben Ami Kadish, who passed defense secrets to the same Mossad agent handler that worked with Pollard, was recently fined and freed without any jail time. Pollard is, in fact, the only Israeli spy to have done any hard time in a federal prison in spite of the fact that hundreds of Tel Aviv’s agents, including numerous Americans and Israeli “movers” detected red handed during 9/11, have been caught in the act. There are no other spies from “non-adversarial” nations, to use the phrase employed in the congressional letter, who have done anything at all comparable to what Pollard has done. Pollard is unique and, given the magnitude of the crime he committed and the fact that Israel is the major recipient of foreign aid from the US, he should rot in prison.

But a far better reason why Pollard should never be released is the failure of Israel to comply with the agreement it made with the United States Justice Department in the aftermath of his arrest. Israel long denied that Pollard was an Israeli spy, claiming instead that he was being run by a rogue operation without official sanction. Nevertheless, the Israeli government entered into a secret agreement with Washington because of concerns that the US might issue federal warrants for the identified Israeli case officers who had handled Pollard, some of whom were not protected by diplomatic status and might be seized by US Marshals anywhere in the world.

Key to US willingness to enter into the agreement was Israel’s agreement to return the documents stolen by Pollard so a damage assessment could be conducted. But it failed to do so. The team sent to Israel by the US Navy to investigate the crime was harassed, intimidated, and threatened with violence. Its luggage was clandestinely searched and personal possessions were stolen. It returned to Washington with a few dozen low level documents that were among the Pollard haul, meaning that the US will never know the true extent of the betrayal.

The 39 congressmen who signed the Pollard letter might well first consider the failure of Israel to live up to its agreements before demanding yet another bribe to reward its bad behavior. Rather than attempting to appease Bibi Netanyahu and the kleptocrats who surround him, they should first think of what the United States national interest might be. They should be reminded that they do not represent Israel, having been elected by American voters and supported in their posturings by the long suffering US taxpayer. They should for once not seek more concessions for Israel but should instead demand that Tel Aviv comply with what it has agreed to do. If they cannot do that, they do not deserve to sit in the Congress of the United States of America.


Philip Giraldi, a former CIA Officer, is the Executive Director of the Council for the National Interest. His “Deep Background” column appears every month exclusively in The American Conservative

The Fed how legalized counterfeiting promoted secretive gambling and fraud.

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Chinese govt advise gold buying - why? What is their plan?

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Millions Bracing for Cutoff of Unemployment Checks

More than two million jobless Americans are entering the holiday season seized with varying levels of foreboding, worry or even panic over what lies ahead as they cope with the expected cutoff of their unemployment benefits.

Their economic fates are now connected on a taut string to skirmishing between Democrats and Republicans in Washington over whether to extend federal financing for unemployment benefits for the long-term jobless.

Tuesday marked the expiration of a pair of federal programs that had extended unemployment benefits anywhere from 34 to 73 weeks on top of the 26 weeks already provided by the states.

The federal extensions have been customary in past recessions and their aftermath, but they have become ensnared lately in political jousting over the soaring budget deficit.

Some recipients have already received their final checks. If the impasse remains unresolved, others will see their payments lapse in the coming days or weeks, depending on how long they have been receiving benefits.

By the end of December, more than two million are set to lose their extended benefits, according to estimates by the National Employment Law Project, and about a million more by the end of January.

While benefits have lapsed twice before in this downturn because of Congressional bickering — the last time, in June and July, payments were interrupted for 51 days— advocates for the unemployed are worried that if the issue is not resolved by the current lame-duck session of Congress, prospects in the next, with Republicans ascendant, are even slimmer.

That would mean a new reality facing legions of people across the country: a cutoff after six months of benefits for anyone out of work.


In Washington, Partisan Gridlock

WASHINGTON — With jobless benefits starting to run out for up two million of the long-term unemployed, Senate Democrats this week repeatedly tried to bring up a bill that would prolong aid for a year, only to hear Republicans object and block the legislation. Democrats, in turn, rejected Republican counterproposals.

In both the Senate and House, Democrats are pressing the case for jobless aid on two fronts, arguing that it is both the moral and humanitarian thing to do — especially during the holiday season — and that it is also an effective policy mechanism to help stimulate the economy.

“Unemployment insurance, the economists tell us, returns $2 for every dollar that is put out there,” the House speaker, Nancy Pelosi, said in a floor speech on Thursday. “People need the money. They spend it immediately for necessities. It injects demand into the economy. It helps reduce the deficit.”

Republicans said they would be willing to extend benefits provided that Democrats agree to cut spending elsewhere to cover the cost, sparking indignation among Democrats who noted that the Republicans never insist on offsetting the revenue lost through tax cuts.

A deal to extend the aid is likely, but only as part of a wider agreement on the expiring Bush-era tax cuts, and it is unclear how long that will take.

One exchange on the Senate floor, between Senators Jack Reed, Democrat of Rhode Island, and Scott P. Brown, Republican of Massachusetts, was emblematic of the debate.

“In my state of Rhode Island, people are in a very serious situation,” Mr. Reed said. “They are struggling to stay in their homes, to educate their children, to deal with the challenges of everyday life. They have worked hard and long all their lives, and now they are finding it difficult to get a job.”

Mr. Reed noted that Congress has always extended jobless benefits in times of high unemployment.

“We have always done it on an emergency basis because it truly is an emergency,” he said. “We have always determined that it was necessary to get the money to the people who could use it, who needed it desperately, and we should do that again.”

Moments later, when Mr. Reed asked for the Senate’s unanimous agreement to consider his bill, Mr. Brown was waiting. “I object,” Mr. Brown said. “And I have a pay-for alternative on which I would like to speak.”

Mr. Brown proposed that money previously appropriated but not yet spent be redirected for the jobless aid. “The recent job numbers in Massachusetts reflect over 280,000 people unemployed in my state alone — over 8 percent of the Massachusetts work force. As the senator from Rhode Island mentioned — and I know Rhode Island well; I eat in Federal Hill regularly — the unemployment is much higher there.”

US Dollar Fights the Euro in a Battle With No Victor

We awoke to a blizzard. After a few months away, we had forgotten how miserable London’s weather can be. As near as we can tell, the sun doesn’t reach this part of the world – at least, not in the winter months. And the winter hasn’t even begun.

Snow, sleet, rain – it is all coming down. But Londoners don’t seem to mind. They trudge to work over their slippery sidewalks…march over their frozen bridges…

Seeing them coming over Blackfriar’s bridge, we remembered T.S. Eliot’s line about how surprising it was that “death had left so many undone.”

Eventually, death gets us all. And not just us… Banks. Corporations. Trends. Bull markets. Paper currencies. Monetary systems. Empires…

For example, death seems to be stalking the euro as well as the dollar.

“Irish rescue fails to appease markets,” says the front page of The Financial Times.

Europe’s leaders came up with €85 billion that was supposed solve the Irish problem. It was especially important that it create a buffer between Ireland’s banking and funding issues and those of the rest of Europe.

Well, it took about 24 hours for the buffer to give way. Now, Spain’s bolsa is in freefall. Portugal’s asset prices are giving way. And there’s pressure on Italy and even France. Even the biggest banks are slipping (see below).

Yes, dear reader…and you thought you had problems.

We had not paid much attention to the European financial issues. We thought we had enough to worry about already, what with Ben Bernanke trying to destroy the dollar and the US going broke.

But hey…that’s just the beginning.

Since Bernanke announced his program to undermine the dollar, the old greenback has actually risen against its main rival – the euro. How do you like that? Bloomberg reports:

The dollar gained the most since August against six major counterparts as concern that Europe’s debt problem will worsen and military action in Korea will escalate boosted demand for the US currency as a refuge.

The greenback rose against the yen for a fourth straight week, the longest streak in 20 months, after North Korea shelled a South Korean island and said “escalated confrontation” will lead to war. The euro fell for a third week versus the greenback as investors speculated Portugal and Spain will be the next European countries to need a financial rescue. The US added jobs in November for a second month, data next week may show.

“The euro has further to fall against the dollar,” said Kathy Lien, director of currency research at online currency trader GFT Forex in New York. “If there is a war amongst the Koreas, the yen would fall off aggressively against the dollar.”

The problem with the euro is that it is too good for many Europeans. Everyone wants a flexible currency these days. That is, they want one that will act like a good dog…one that will “get down” off the furniture when it is told to do so.

Alas, all the currencies are unruly mutts. The dollar won’t go down, even though Ben Bernanke pulls the rug out from under it and gives it the old “bitch slap” with the back of his hand. And the euro won’t go down because the Germans don’t want it to go down.

Of course, this doesn’t make the Germans very popular with the Spanish…the Irish…and the rest of the peripheral crowd. They want a cheap currency so they can pay their debts. The Germans, on the other hand, must have a kind of race memory for the horrors of the Weimar days…when you could take a wheelbarrow full of paper money to the store and not be able to buy a loaf of bread.

The more you look at the European banking and sovereign debt crisis the more dangerous and insoluble it seems. Try to fix one part of the problem and you make another part worse.

The Germans don’t want to pay to bailout the Spaniards…and the Italians…et al.

But German banks have nearly half a trillion euros worth of their debt.

The Irish taxpayer doesn’t want to pay to bail out the banks either. He’s already facing austerity measures that would choke and appall Americans.

Yesterday, the Obama team proposed freezing federal salaries – that is, leaving them 50% to 100% higher than private sector wages – for the next two years.

“We are going to have to budge on some deeply held positions,” said the decider.

His proposal would save…are you sitting down, dear reader…$2 billion by the end of 2011. Let’s see, that would cut the deficit by approximately 3 tenths of one percent…BFD.

In Ireland, government workers already agreed to a pay cut. And now the Irish feds are supposed to fire 10% of their public workforce…with another 10%, probably, a few years from now.

How much austerity will the Irish be willing to take in order to protect banks from their losses? They could leave the euro…revive the punt…and shirk their commitments in the old-fashioned way – by devaluing their currency.

But wait… If the Irish opt out of the euro…the whole shebang could come falling down.

“If the euro fails, Europe will fail,” says Ms. Merkel, chancellor of Germany.

And if the euro fails…banks fail…companies fail…trade fails…and then US companies fail…US banks fail…

Who knows where this would lead? And only we seem to want to find out.

But what to do? A colleague warns us:

“It’s time to save every possible penny. Next year is going to be worse than 2008 – a lot worse.

“Here’s why:

  1. The euro is going to fail. Ireland, Spain, and Italy’s sovereign debt cannot be financed.

    Shares of even the biggest and strongest of Europe’s banks (Deutsche Bank) have begun to “roll-over.”

  2. More QE in Europe and America will make it much more difficult for businesses to invest across borders. That will result in massive trade problems and could easily cause a global famine. Most people don’t realize how dependent the world has become on free trade for basics, like food. Here’s what agriculture prices have done since July when QE II began. Vastly higher ag prices are not bullish for financial markets or world order.

  3. Housing in the US is going to collapse, again. The various games that have been played to prop up the housing market in the US have failed. Tax credits, etc. haven’t worked…and they never had a chance. I have good contacts in this industry and it is completely bleak. With foreclosed properties making up 25%–50% of the inventories, housing prices will continue to fall 10%–15% a year – or more. There will be no new net demand for homes for a long time. Several major homebuilders will go bankrupt, including the largest, Pulte.

  4. Lots of major US corporations – see GE – have unsustainable debt loads. These companies will end up bankrupt and will fire at least 50% of their employees over the next three years.

  5. Muni/State finance: You guys have seen all of the numbers. Probably half of the states and munis in the US are being run in a way that’s completely unsustainable. As these cuts are made it will have a big impact on the economy. See what happened to Cisco last quarter, all because of cutbacks at the local government level.

“The problems of 2008 haven’t gone away. We’ve just borrowed a lot more money to make people think everything would be okay. As the veneer wears off, there’s going to be a real panic; and this time it will be worse, because there’s zero trust and confidence left in the government or the bankers…

“If I were in your shoes, I’d make sure every business unit I controlled was being run in a very prudent way, with a big-cash flow buffer. I’d make sure they were ready to cut overhead by 50% in 30 days…”

December 4 , 2

Want JP Morgan to crash? Buy silver

The campaign to buy silver and force JP Morgan into bankruptcy could work, because of the liabilities accrued by its short-selling
By Max Keiser at the

Over the past 11 years, the Gata (Gold Anti-Trust Action) committee has worked to reveal the silver/gold price suppression scheme; thanks to whistleblower Andrew Maguire in London, an investigation has been opened. As part of the ongoing exposé, it has now become clear that JP Morgan is sitting on what is estimated to be 3.3bn ounce "short" position in silver (which they have sold short, meaning they don't own it to begin with) in an attempt to keep the price artificially low in order to keep the relative appeal of the dollar and other fiat currencies high. The potential liability for JP Morgan has been an open secret for a few years.
On my show, Keiser Report, I recently invited Michael Krieger, a regular contributor of Zero Hedge (the WikiLeaks of finance). We posited that if 5% of the world's population each bought a one-ounce coin of silver, JP Morgan would be forced to cover their shorts – an estimated $1.5tn liability – against their market capital of $150bn, and the company would therefore go bankrupt. A few days later, I suggested on the Alex Jones show that he launch a "Google bomb" with the key phrase "crash jp morgan buy silver".

Within a couple of hours, it went viral and hundreds of videos have been made to support the campaign.
Right now, silver eagle sales for the month of November hit an all-time record high and the availability of silver on a wholesale level is drying up. The most important indicator is the price itself – holding just under a 30-year high. With each uptick JP Morgan gets closer to going bust or requiring a bailout.

Here's how the campaign works: wealth tied to a fiat currency is easily overwhelmed by wealth tied to silver and gold. And the world is waking up to the fact that they have the ability, without government assistance or other interference, to create a new precious metals-based backed currency system by simply converting their fiat paper into real money.

This campaign has 100% chance of working; it falls into the category of a self-fulfilling prophecy. As more individuals buy silver and gold, all attempts to replenish the system with more paper money will only cause the purchasing power of the silver and gold to increase – thus prompting more people to buy more. Any attempts to bail out JP Morgan would have the same effect. If the US Fed was to flood the system with bailout money for JP Morgan to cover their silver short position (as they did after the collapse of Long-Term Capital Management), more inflation will ensue and the price of silver and gold will rise more, triggering more purchases. A virtuous circle is born.

If anyone is interested in helping to crash JP Morgan, buy silver. In the end, it's about transferring wealth back to the people from where it came.

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Press TV's Arash Zahedi talks to Sara Flounders on US Korea Wargames

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China passenger train hits 300 mph, breaks record

BEIJING – A Chinese passenger train hit a record speed of 302 miles per hour (486 kilometers per hour) Friday during a test run of a yet-to-be opened link between Beijing and Shanghai, state media said.

The Xinhua News Agency said it was the fastest speed recorded by an unmodified conventional commercial train. Other types of trains in other countries have traveled faster.

A specially modified French TGV train reached 357.2 mph (574.8 kph) during a 2007 test, while a Japanese magnetically levitated train sped to 361 mph (581 kph) in 2003.

State television footage showed the sleek white train whipping past green farm fields in eastern China. It reached the top speed on a segment of the 824-mile (1,318-kilometer) -long line between Zaozhuang city in Shandong province and Bengbu city in Anhui province, Xinhua said.

[Rewind: Amtrack reveals vision for high speed rail]

The line is due to open in 2012 and will halve the current travel time between the capital Beijing and Shanghai to five hours.

The project costs $32.5 billion and is part of a massive government effort to link many of China's cities by high-speed rail and reduce overcrowding on heavily used lines.

[Related: Tense fight over U.S. high speed rail]

China already has the world's longest high-speed rail network, and it plans to cover 8,125 miles (13,000 kilometers) by 2012 and 10,000 miles (16,000 kilometers) by 2020.

The drive to develop high-speed rail technology rivals China's space program in terms of national pride and importance. Railway officials say they want to reach speeds over 500 kph (312 mph).

« Ron Paul: The Fed Works In Collusion With Goldman Sachs (MSNBC Ratigan Video) »

Sad how nothing changes...

Video: Ron Paul with Dylan Ratigan - End the Fed!

This is the best clip of the 3...



Subprime Banking Mess

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« CHART: Foreclosures made up 25 percent of national home sales in third quarter »

Even discounted homes don't sell. Two charts at the bottom of the story.


Source - NY Daily News

The worst summer for home sales in decades also put a chill on foreclosure sales, even as the average discounts on the distressed properties got bigger compared with other types of homes.

Foreclosure sales plunged 25 percent in the July-September quarter versus the April-June period and tumbled 31 percent from the third quarter last year, foreclosure listing firm RealtyTrac Inc. said Thursday.

Sales of non-foreclosed properties fell 29 percent sequentially and nearly 31 percent from the third quarter last year, the firm said.

The decline in sales of bank-owned properties and other homes in some stage of foreclosure is in line with an overall housing market slowdown that took hold after federal homebuyer tax credits expired in April.

The fallout over foreclosure processing errors that prompted some lenders to temporarily halt sales of bank-owned homes wasn't a significant factor in the sharp third-quarter drop in foreclosure sales, said Daren Blomquist, a RealtyTrac spokesman.

"We could expect probably in the fourth quarter to see that percentage of foreclosure sales dip because buyers are a bit skittish about purchasing foreclosure properties, given the questions surrounding the foreclosure process," Blomquist said.

Already, the firm has seen a decline in foreclosure activity in November, which suggests a holdover effect from the foreclosure documents mess. That could mean fewer home sales in the final months of the year — already a traditionally slow period.

In all, 188,748 U.S. homes in some stage of foreclosure were sold in the July-September period, accounting for a quarter of all U.S. residential property sales, RealtyTrac said.

The firm used data from sales deeds filed with county recorder offices. The transactions include sales of newly built homes and previously occupied properties. Foreclosure sales include homes sold by banks and short sales — when the homeowner and the bank agree to sell the property for less than what is owned on the mortgage.

As a share of overall home sales, foreclosure sales rose slightly from the second quarter. They peaked at 37 percent of all sales in the first quarter of 2009, but have ranged between 25 percent and 30 percent this year, Blomquist said.

One key driver is the quantity of foreclosed properties on the market.

In 2005, as the housing boom roared, foreclosure sales accounted for just 1 percent of all sales.

This year, even before the foreclosure documents snag erupted, the foreclosure process began to slow as lenders stepped up attempts to modify loans. Lenders also appear to be managing their stock of repossessed homes, not wanting to flood the market with too many properties.

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Foreign Officials Visit USS George Washington During Military Drills

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« Et Tu Motorhead? - Motorhead Beats Up Banksters In Christmas Single »

Note - The video starts automatically when the page loads. I can't disable it.

Relax, it's Friday.

The song is excellent, but that's not the point. What's important and worth celebrating is the burgeoning awareness of the Federal Reserve global bankster heist. I mean, seriously, Motorhead just made a music video about it. Even the most cynical will succumb to the awesomeness in that.

It's why I launched The Bail, 23 months ago. And it's the only reason I gave up my life to sit in this chair 12 hours a day mucking through and assimilating unadulterated madness. As Shakespeare wrote, "Hell is empty. All the Devils are here." He was right. All the Devils are here. All over these pages.

I live my days surrounded by 3,000 stories and 10,000 videos of captured, corrupted, Mephistophelean, soul-sucking druids. I cannot escape it. You get to show up for 15 minutes, absorb the mayhem, and leave for saner pastures. Do not doubt that it's slowly killing me, unlike all previous obsessions during my 44 years, but I'm still Texas pissed every morn and eve, so I must not be dead, or certifiable, yet.

Rock on. Keep spreading the word. Keep educating friends, peers, co-workers, family, strangers at the bar. Whatever you're doing, it's working. November was large for traffic. Large. Awareness, baby. We're starting to win the war against these fucking bastards.


Source - UK Telegraph

The City of London has so far survived the global economic meltdown, but now it faces a different threat: the wrath of hard rock veterans Motorhead.

In a music video for new song Get Back in Line the band gate-crash a bankers' club and attack them with fists, a baseball bat, a chair and trays of their own broken champagne flutes. Meanwhile the band belt out their song from a rooftop overlooking the Square Mile.

While the sentiment is not exactly in the spirit of Christmas, the lyrics will strike a chord with the many thousands of people who have been affected by the economic downturn.

  • "We live on borrowed time, hope turned to dust. Nothing is forgiven, we fight for every crust," Lemmy sings.


Youtube version in case the original gets pulled...