Friday, September 2, 2011

The Economics of Deflation | Jörg Guido Hülsmann

Yes DEFLATION! The opposite of inflation and I'm not making a joke here. Every corrupt bank and government entity would be wiped out by deflation. It would also wipe out all debt held by the public, not a bad thing at all if you understand free market economics.

For you to understand this your going to need to read this book (48pages) Deflation-and-Liberty and watch this video.

Yea I know your going to have to learn something!!

If this policy of simply not printing money and zeroing out the FED's held debt as well as the governments debt. Massive deflation would occur destroying the political economic establishment, ending the depression and leaving the average man relatively unscathed, Watch the video as to why the average Joe would survive and thrive.

P.S. Watch any Ron Paul interview where he gets asked about how to create jobs and improve the economy ... he doesn't say it but it's obvious, DEFLATION! ... Gold standard = deflation, liquidate debt = deflation, stop printing money = deflation, let the to big to fail's go bankrupt = deflation

Greece's debt spiraling out of control - report

Athens - Greece's finance minister found himself on the defensive Thursday after an independent watchdog released an internal report warning that his country's debt was out of control and is likely to miss its budget targets in 2011 just as officials held crucial talks with international creditors.
The newly created committee, known as the State Budget Office and which is independent of the government, warned that the country's primary deficit is increasing and has already exceeded the annual target in the first seven months of the year.
'It must be noted that the primary deficit for the first seven months of the year is significantly higher than the figure projected for the entire year, 1.7 per cent of GDP,' the report published in the Greek daily Kathimerini newspaper said.
The report warned that even if the Greek government fully implements austerity measures in 2011 it still would 'not fully offset the slippage in budget targets.'
The warning came as top-ranking officials from the European Union and International Monetary Fund (IMF) are currently in Athens to review the debt-ridden country's austerity programme before deciding whether to release a new batch of rescue loans totaling 8 billion euros next month.
'All responsible international organizations know in which way macroeconomic and fiscal reports are compiled, checked and published,' Finance Minister Evangelos Venizelos said in a statement.
'It is still clear that the budget office still lacks this knowledge, experience and responsibility,' the minister said.
Greece is in the midst of a major financial crisis and has avoided bankruptcy only after receiving two successive international bailouts worth a total of 220 billion euros.
The latest loan was sealed on July 21 just as the news that the economy is expected to shrink by more than 4.5 per cent in 2011, while the budget deficit is seen narrowing to 7.6 per cent of GDP from 10.5 per cent last year.
The Socialist government has agreed to a wave of austerity measures, which include tax increases and salary cuts, in exchange for the emergency funding.
'It is clear that the country's problem is not just the size of the public debt but the inability to consolidate the current fiscal management. Despite gigantic effort for fiscal adjustment, no primary surplus has been achieved. On the contrary, the primary deficit is widening,' the committee said.
The committee urged increased efforts to fight tax evasion and reduce the primary deficit in light of an even worse than expected recession.
'The widening of the deficit is associated with worrying fiscal developments, particularly delays in implementing the adjustment programme, and the limited efficiency of revenue collection mechanisms,' the report said.
Greece has committed to cutting its massive budget deficit from 15.4 per cent of GDP to below the EU limit of 3 per cent in 2014, and achieving a primary surplus next year.
Venizelos said he is currently discussing with visiting EU/IMF inspectors measures for stemming the recession, but insisted that Greece would not seek additional time from its creditors to reach its target.
News reports said EU/IMF officials are urging the Greek government to move faster on implementing an across-the-board wage structure for public sector employees and slashing public spending.
EU and IMF officials, who are meeting with officials from the finance and labor ministries, showed no willingness to renegotiate the deadlines to which the government has committed itself, reports said.
The inspectors, who are also to discuss other issues - including tax evasion - with the Greek finance minister, are to wrap up their meetings by September 5.

Lew Rockwell: 'We stand to face hyperinflation'

Bankers on Wall Street are asking the Federal Reserve for another round of quantitative easing as America attempts to rebuild its economy, but will the country really reclaim itself with QE3?
According to Lew Rockwell, chairman at the Ludwig Von Mises Institute, those off of Wall Street will be hit hard by a third round of quantitative easing while big banks and corporations will come out on top.
“The average Joe, the average Janet,” said Rockwell, “is being harmed to the benefit of the power elite.”

Rockwell told RT that contrary to what the media might be reporting, the country is still in a recession, and while the government might say they are keeping interest rates low to help everyman, it is only the big names in banking that are being rewarded this way.
“We’re already starting to see prices increase,” said Rockwell, who warns that more quantitative easing would not lower prices as many advertise. Rather, he says, it has a “horrendous effect on the economy.”
Speaking to RT, Rockwell condemned Federal Reserve Chairman Ben Bernanke as a power-happy Fed head that is behaving like a “mad printer” with the first two rounds of QE.
“This is a criminal act that they are contemplating” another round, said Rockwell, who adds that the only ones that would see a positive results are on Wall Street and Pennsylvania Avenue. The average American, rather, will suffer a “deliberate knock on the head.” Rockwell even goes as far as to equate it as top brass putting “the boot on the throat of the average American.”
“Part of the problem we have is too much debt,” said Rockwell. “There is too much debt in this society; too much government debt; too much private debt . . . we need less lending. We need fewer banks; fewer Wall Street firms.”
“We need to puncture the balloon,” added Rockwell. “We don’t want more lending, we want far less lending.”
“We don’t need the banks running the countries. We need to overthrow the banks”
“We need something different,” said Rockwell.

Depreciation Is Nothing New

Exerpted from Gold, Peace, and Prosperity (1981)
In Marco Polo's great book of travels, he talks about a coin called the bezant circulating in Kublai Khan's Mongol Chinese empire. The emperor, like the vast majority of politicians, found the lure of paper money irresistible. In his case, however, it was money printed on pieces of mulberry tree bark. The same disastrous effects, seen everywhere else in history, followed. Prices increased, and the gold bezant took on increasing importance for the people as the government debauched the irredeemable fiat currency. Abuse of paper money helped lead, notes Antony Sutton, to the expulsion of the Mongol dynasty from China. Government demands that the people accept printed mulberry bark as equivalent to metallic money had no effect.

The bezant, however, was minted not by the Chinese, but by the Byzantine Empire. For ten centuries Byzantine coins were accepted all over the world, and Byzantium dominated trade for thousands of miles in every direction from Constantinople. Even the royal accounts of medieval England, says Dr. Sutton, were kept in bezants. The Byzantine Empire only declined when it debased the bezant, adding more cheap alloys and removing gold.
In more recent times, to finance our Revolutionary War, the Continental Congress issued paper money in great quantities. Over a period of about four and a half years, the Continental currency fell from a value of one paper dollar per one gold dollar, to about 1,000 to one.
William Gouge, writing in 1833, quotes one member of the Continental Congress: "Do you think, gentlemen, that I will consent to load my constituents with taxes, when we can send to our printer, and get a wagon load of money, (25 sheets) of which will pay for the whole?"
Most of the burden, Mr. Gouge notes, fell on the patriots, "as it was in their hands the paper depreciated. The Tories, who had from the beginning no confidence in it, made it a rule to part with it as soon as possible."

Those who trusted the Congress were destroyed; the cynics were not. As a result of this paper-money inflation, wrote one of our earliest economists, Pelatiah Webster,
frauds, cheats, and gross dishonesty are introduced, and a thousand idle ways of living attempted in the room of honest industry; economy, and diligence, which have heretofore enriched and blessed the country.
While we rejoice in the riches and strengths of our country, we have reason to lament with tears of the deepest regret, the most pernicious shifts of property which the irregularities of our finances introduced, and the many of thousands of fortunes which were ruined by it; the generous, patriotic spirits suffered the injury: the idle and avaricious derived benefit from said confusion.
Reprinted from

An Elegy for the Age of Space

The orbiters are silent now, waiting for the last awkward journey that will take them to the museums that will warehouse the grandest of our civilization’s failed dreams. There will be no countdown, no pillar of flame to punch them through the atmosphere and send them whipping around the planet at orbital speeds. All of that is over.

In Houston, the same silence creeps through rooms where technicians once huddled over computer screens as voices from space crackled over loudspeakers. The screens are black now, the mission control rooms empty, and most of the staff have already gotten their pink slips. On the Florida coast, where rusting gantries creak in the wind and bats flutter in cavernous buildings raised for the sake of a very different kind of flight, another set of lauch pads sinks slowly into their new career as postindustrial ruins.

There are still rockets lifting off elsewhere, to be sure, adding to the globe’s collection of satellites and orbiting space junk. The International Space Station still wheels through the sky, visited at intervals by elderly Soyuz capsules, counting down the days and the missions until its scheduled deorbiting in 2016. In America, a few big corporations have manned space projects on the drawing boards, angling for whatever federal funding survives the next few rounds of our national bankruptcy proceedings, and a few billionaires here and elsewhere are building hobby spacecraft in roughly the same spirit that inspired their Gilded Age equivalents to maintain luxury yachts and thoroughbred stables.

Still, something has shifted. A tide that was expected to flow for generations and centuries to come has peaked and begun to ebb. There will still be rockets surging up from their launch pads for years or decades to come, and some few of them will have human beings on board, but the momentum is gone. It’s time to start coming to terms with the winding down of the age of space.

Ironically, one of the best pieces of evidence for that was the shrill reception given to an article in The Economist announcing The End of the Space Age. The irony was particularly delicious in that The Economist is a British periodical, and Britain has already been through its own retreat from space. During the first half of the 20th century, the British Interplanetary Society was among the most prestigious groups calling for manned space missions, but dreams of a British presence in space collapsed around the same time as Britain’s empire and industrial economy did. It’s hard to miss the schadenfreude in The Economist’s editorial stance, but it was even harder to overlook the bluster and denial splashed across the blogosphere in its wake.

A little perspective might be useful here. When the space shuttle first came off the drawing boards, the much-repeated theory was that it would be the first of a new breed of spacecraft that would make a flight from Cape Canaveral to orbit as commonplace as a flight from New York to Chicago. The next generation would swap out the shuttle’s disposable fuel tank and solid-fuel boosters for a fully reusable first stage that would take a shuttle-equivalent most of the way into orbit, then come back to Earth under its own power and get refueled for the next launch. Further down the road, but already in the concept phase, were spaceplanes that could take off from an ordinary runway and use standard jet engines to get to 50,000 feet or so, where rocket engines would cut in for the leap to orbit. Single-use rockets? In the minds of the space-savvy, they were already as outdated as Model T Fords.

Yet here we are in 2011, the space shuttle program is over, the replacements weren’t built, and for the five years of scheduled life the International Space Station has left, its crews will be getting there via the 1960s-era technology of Soyuz space capsules atop single-use rockets. As for the rest of the steps toward space everyone in the 1960s assumed we would have taken by now—the permanent space stations, the base on the Moon, the manned missions to Mars, and the rest of it—only the most hardcore space fans talk about them any more, and let’s not even discuss their chances of getting significant funding this side of the twelfth of never.

Mind you, I’m not cheering. Though I realized some years ago that humanity isn’t going to the stars—not now, not in the lifetime of our species—the end of the shuttle program with no replacement in sight still hit me like a body blow. It’s not just a generational thing, though it’s partly that; another large part of it was growing up where and when I did. By that I don’t just mean in the United States in the middle decades of the last century, but specifically in the triumphant years between John Glenn’s first orbital flight and Neil Armstrong’s final step onto lunar soil, in a suburb south of Seattle where every third family or so had a father who worked in the aerospace industry. Yes, I remember exactly where I was sitting and what was happening the moment that Walter Cronkite told the world that Apollo 11 had just landed on the Moon.

You didn’t grow up as a geeky, intellectual kid in that sort of setting without falling in love with space. Of course it didn’t hurt that the media was filled to the bursting point with space travel—turn on the tube any evening during my childhood, and if you didn’t get Lost In Space or Star Trek you’d probably catch The Invaders or My Favorite Martian—and children’s books were no different; among my favorites early on was Ronnie Rocket and Suzie Saucer, and I went from there to The Wonderful Flight to the Mushroom Planet, The Spaceship Under the Apple Tree—well, you get the picture. (I won’t even get into science fiction here; that’s a subject that deserves an entire post to itself.) Toys? The G.I. Joe accessory I treasured most in those days was a plastic Mercury space capsule with space suit to match; I also played with Major Matt Mason, Man In Space, and plenty of less efficiently marketed toys as well.

The future that most people imagined in those days had plenty of options primed to catch a young boy’s imagination, to be sure. Sealab—does anybody remember Sealab these days?—was the Navy’s attempt to compete with the romance of space, complete with breathless National Geographic articles about "a new world of limitless resources beneath the sea." (Ahem.) For a while, I followed Sealab as passionately as I did the space program, and yes, my G.I. Joe also had a wetsuit and scuba gear. That was common enough, and so were my less scientific fixations of the time, the monster lore and paranormal phenomena and the like; when you’re stuck growing up in suburbia in a disintegrating family and the only source of hope you can come up with is the prospect that the world isn’t as tepidly one-dimensional as everyone around you insists it has to be, you take encouragement where you find it.

You might think that a kid who was an expert on werewolf trivia at age ten would have gone in for the wildest of space fantasies, but I didn’t. Star Trek always seemed hokey to me. (I figured out early on that Star Trek was a transparent pastiche of mid-1960s US foreign policy, with the Klingons as Russia, the Vulcans as Japan, the Romulans as Red China, and Captain Kirk as a wish-fulfillment fantasy version of Gen. William Westmoreland who always successfully pacified his extraterrestrial Vietnams.) Quite the contrary; my favorite spacecraft model kit, which hung from a length of thread in my bedroom for years, was called the Pilgrim Observer: some bright kit designer’s vision of one of the workhorse craft of solar system exploration in the late 20th century.

Dilithium crystals, warp drives, and similar improbabilities had no place in the Pilgrim Observer. Instead, it had big tanks for hydrogen fuel, a heavily shielded nuclear engine on a long boom aft, an engagingly clunky command module up front bristling with telescopes and dish antennas—well, here again, you get the picture; if you know your way around 1970s space nonfiction, you know the kit. It came with a little booklet outlining the Pilgrim I’s initial flyby missions to Mars and Venus, all of it entirely plausible by the standards the time. That was what delighted me. Transporter beams and faster-than-light starflight, those were fantasy, but I expected to watch something not too far from Pilgrim I lifting off from Cape Canaveral within my lifetime.

That didn’t happen, and it’s not going to happen. That was a difficult realization for me to reach, back in the day, and it’s one a great many Americans are doing their level best to avoid right now. There are two solid reasons why the future in space so many of us thought we were going to get never arrived, and each one provides its own reasons for evasion. We’ve talked about both of them in this blog at various times, and there’s more than the obvious reason to review them now.

The first, simply put, is that the United States has lost the space race. Now of course it was less a single race than a whole track and field competition, with the first event, the satellite shot-put contest (winner: Russia, with Sputnik I), followed by the single-orbit dash (winner: Russia, with Vostok I) and a variety of longer sprints (winner: much more often than not, Russia). The run to the Moon was the first real US gold medal—we did half a dozen victory laps back out there just to celebrate—and we also scored big in the planetary probe toss competition, with a series of successful Mariner and Voyager missions that mostly showed us just how stunningly inhospitable the rest of the solar system was. The race that ultimately counted, though, was the marathon, and Russia’s won that one hands down; they’re still in space, and we aren’t.

Behind that unwelcome news is the great geopolitical fact of the early 21st century, the decline and imminent fall of the American empire. Like any number of empires before us, we’ve gotten ourselves wedged tightly into the predictable downside of hegemony—the stage at which the costs of maintaining the economic imbalances that channel wealth from empire to imperial state outstrip the flow of wealth those imbalances are meant to produce. Once that stage arrives, the replacement of the failing empire by some new distribution of power is a foregone conclusion; the only question is how long the process will take and how brutal the final cost to the imperial state will turn out to be.

The Cold War competition between the United States and the Soviet Union was a standard contest to see which empire would outlast the other. The irony, and it’s a rich one, is that the loser of that contest was pretty much guaranteed to be the winner in a broader sense. When the Soviet Union collapsed, Russia had an empire wrenched out of its hands, and as a result it was forced to give up the struggle to sustain the unsustainable. The United States kept its empire intact, and as a result it has continued that futile but obsessive fight, stripping its national economy to the bare walls in order to prop up a global military presence that will sooner or later bankrupt it completely. That’s why Russia still has a functioning space program, while the United States may have trouble finding the money to launch cheap fireworks by the time its empire finally slips from its fingers.

It’s our decidedly mixed luck, as discussed here more than once in the past, that America is entering on the downslope of its imperial decline just as a much vaster curve has peaked and begun to arc in the same direction. That’s the second reason that the space age is ending, not just for us but for humanity. In the final analysis, space travel was simply the furthest and most characteristic offshoot of industrial civilization, and depended—as all of industrial civilization depends—on vast quantities of cheap, highly concentrated, readily accessible energy. That basic condition is coming to an end around us right now. Petroleum has already reached its global production peak as depletion rates shoot past the rate at which new fields can be found and brought on line; natural gas and coal are not far behind—the current bubble in shale gas will be over in five or, just possibly, ten years—and despite decades of animated handwaving, no other energy source has proven to yield anything close to the same abundance and concentration of energy at anything like the same cost.

That means, as I’ve shown in detail in past posts here, that industrial civilization will be a short-lived and self-terminating phenomenon. It doesn’t mean, or at least doesn’t have to mean, that future civilizations will have to make do with an equivalent of the much simpler technological suites that civilizations used before the industrial age; I’ve argued at some length here and elsewhere that an ecotechnic society—a civilization that supports a relatively advanced technology on a modest scale using the diffuse and limited energy provided by sustainable sources, without wrecking the planet—is a live option, if not in the immediate future, then after the dark age the misguided choices of the recent past have prepared for us.

Still, of the thousands of potential technological projects that might appeal to the limited ambitions and even more strictly limited resources of some future ecotechnic society, space travel will rank very, very low. It’s possible that the thing will be done, perhaps in the same spirit that motivated China a little while back to carry out a couple of crisp, technically capable manned orbital flights; ten thousand years from now, putting a human being into orbit will still probably be the most unanswerable way for a civilization to announce that it’s arrived. There are also useful things to be gained by lofting satellites for communication and observation purposes, and it’s not at all impossible that now and then, over the centuries and millennia to come, the occasional satellite will pop up into orbit for a while, and more space junk will be added to the collection already in place.

That’s not the vision that fired a generation with enthusiasm for space, though. It’s not the dream that made Konstantin Tsiolkovsky envision Earth as humanity’s cradle, that set Robert Goddard launching rockets in a Massachusetts farmyard and hurled Yuri Gagarin into orbit aboard Vostok I. Of all people, it was historical theorist Oswald Spengler who characterized that dream most precisely, anatomizing the central metaphor of what he called Faustian civilization—yes, that’s us—as an eternal outward surge into an emptiness without limit. That was never a uniquely American vision, of course, though American culture fixated on it in predictable ways; a nation that grew up on the edge of vastness and cherished dreams of heading west and starting life over again was guaranteed to think of space, in the words of the Star Trek cliché, as "the final frontier." That it did indeed turn out to be our final frontier, the one from which we fell back at last in disarray and frustration, simply adds a mordant note to the tale.

It’s crucial to realize that the fact that a dream is entrancing and appeals to our core cultural prejudices is no guarantee that it will come true, or even that it can. There will no doubt be any number of attempts during the twilight years of American empire to convince Americans to fling some part of the energies and resources that remain to them into a misguided attempt to relive the dream and claim some supposed destiny among the stars. That’s not a useful choice at this stage of the game. Especially but not only in America, any response to the crisis of our time that doesn’t start by using much less in the way of energy and resources simply isn’t serious. The only viable way ahead for now, and for lifetimes to come, involves learning to live well within our ecological limits; it might also help if we were to get it through our heads that the Earth is not humanity’s cradle, or even its home, but rather the whole of which each of us, and our species, is an inextricable part.

That being said, it is far from inappropriate to honor the failed dream that will shortly be gathering dust in museums and rusting in the winds that blow over Cape Canaveral. Every civilization has some sprawling vision of the future that’s destined never to be fulfilled, and the dream of infinite expansion into space was ours. The fact that it didn’t happen, and arguably never could have happened, takes nothing away from the grandeur of its conception, the passion, genius, and hard work that went into its pursuit, or the sacrifices made on its behalf. Some future poet or composer, perhaps, will someday gather it all up in the language of verse or music, and offer a fitting elegy to the age of space.

Meanwhile, some 240,000 miles from the room where I write this, a spidery metallic shape lightly sprinkled with meteoritic dust sits alone in the lunar night on the airless sweep of Mare Tranquillitatis. On it is a plaque which reads WE CAME IN PEACE FOR ALL MANKIND. Even if no other human eyes ever read that plaque again, as seems likely, it’s a proud thing to have been able to say, and a proud thing to have done. I can only hope that the remembrance that our species once managed the thing offers some consolation during the bitter years ahead of us.

China Stocks Fall, Capping Biggest Monthly Drop Since May on Tight Credit

Most Chinese stocks fell, driving the benchmark index to its biggest monthly loss since May, as smaller companies slumped on speculation tighter credit will curb earnings growth and U.S. consumer confidence declined.
Baoshan Iron & Steel Co. slid to a one-week low after first-half profit dropped. Shanghai Kaibao Pharmaceutical Co. and Hangzhou Silan Microelectronics Co. led declines for small companies after China Business News reported up to 70 percent of small and medium-sized enterprises may not survive. Banks rebounded, led by Industrial & Commercial Bank of China Ltd.
“The stock market hasn’t shown signs of bottoming out and may continue to head downward for the short term,” said Yan Ji, investment director at HSBC Jintrust Fund Management Co., which manages $1.6 billion. “Investors should be cautious given the central bank’s determination to tighten monetary policy to fight inflation.”
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, added 0.75 points, or less than 0.1 percent, to 2,567.34 at the 3 p.m. close, paring this month’s drop to 5 percent. About seven stocks fell for every five that rose on the gauge. The CSI 300 Index (SHSZ300) gained 0.2 percent to 2,846.78.
The Shanghai gauge has dropped 8.6 percent this year as the central bank raised interest rates five times and ordered lenders to set aside more cash as deposit reserves 12 times since the start of 2010 to contain inflation. It is valued at 11.8 times estimated earnings, compared with a record low of 11.6 times set on Aug. 22, according to daily data compiled by Bloomberg.

Smallcaps Slump

The China Federation of Logistics and Purchasing is scheduled to release a manufacturing index for August at 9 a.m. tomorrow. The gauge is expected to rise to 51 from 50.7 a month earlier, according to a Bloomberg survey. A reading above 50 indicates an expansion.
The ChiNext index of start-up companies slid for a second day after the central bank ordered lenders to set aside more reserves against margin deposits, boosting speculation liquidity will tighten. The ChiNext lost 1.4 percent while the index for Shenzhen small and medium enterprises fell 0.6 percent.
The China Business News cited Gu Shengzu, a vice chairman at the National People Congress’s internal and judicial affairs committee, as saying only about 10 percent of the small- and medium-sized companies are able to get loans from the standard banking system. These companies generate about 60 percent of China’s gross domestic product, according to BNP Paribas SA.
A gauge of technology companies retreated 0.6 percent, the most among the 10 industry groups in the CSI 300. The health- care measure slipped 0.2 percent. Shanghai Kaibao Pharmaceutical dropped 2.9 percent to 27.98 yuan. Shenzhen Glory Medical Co., a maker of medical equipment, fell 2.3 percent to 31.40 yuan. Hangzhou Silan Microelectronics slid 1.4 percent to 15.30 yuan.

Growth Concerns

Baoshan Steel, the listed unit of China’s second-biggest steelmaker, fell 0.8 percent to 5.29 yuan. Its first-half profit dropped 37 percent because of slowing demand from automakers and rising prices of iron ore and coal.
Chinese publicly traded companies conclude reporting semi- annual earnings today. Shanghai Composite companies reported an average 24 percent increase in first-half profit, slowing from a gain of 37 percent from last year, according to data compiled by Bloomberg. They beat analysts’ estimates by 3.4 percent on average, the data showed.
ICBC, the nation’s biggest listed lender, rose 1 percent to 4.14 yuan. China Construction Bank Corp., the second largest, added 1.1 percent to 4.59 yuan. China Minsheng Banking Corp., the nation’s first privately owned bank, climbed 1.2 percent to 5.99 yuan.

Consumer Stocks

China’s inflation rate may slow to 6 percent in August as prices have peaked, according to Shenyin & Wanguo Securities Co. Price increases for seafood and pork eased this month, Li Huiyong and Meng Xiangjuan, analysts at the brokerage, wrote in a report today. Consumer prices rose 6.5 percent in July, the fastest pace in three years. The August inflation figure is due Sept. 9.
Investors should avoid industries with overcapacity and excess inventories, including metals, automobiles and auto parts, said HSBC Jintrust’s Yan. He favors consumer staples producers as the government encourages domestic spending to offset a potential slump in exports.
Wuliangye Yibin Co., China’s second-biggest maker of white liquor by market value, climbed 2.5 percent to 40.40 yuan after the second-biggest producer of baijiu liquor said it will increase prices for its products by 20 percent to 30 percent starting Sept. 10.
China’s stock market has lost $353 billion in market value since the benchmark index reached this year’s high on April 18, according to data compiled by Bloomberg. The market’s losses escalated this month after the U.S. was stripped of the AAA credit rating and the European debt crisis fueled speculation global economic growth had stalled.
--Zhang Shidong. Editor: Allen Wan

Copper wire thefts knock out city street lights

Albuquerque Resident Dan Vargas has been wondering for months why about 20 street lights near Gibson Boulevard and Unser Boulevard haven't been working.
Now he knows and the answer surprised him.
Albuquerque city officials say copper thieves are to blame.
"It is happening. Unfortunately it is a growing trend with the price of copper increasing," says City Department of Muncipal Development spokesman Mark Motsko.
Motsko suspects people may be stealing the copper to feed a drug habit.
But stealing the wire can be risky business.
"They are live wires. You could die basically. You could electrocute yourself," Motsko said.
The thefts are costing city taxpayers. It is estimated that the cost of the wire, and the staff hours to fix the lights will be around $60,000," Motsko said.
The city says the lights will be fixed soon. That is good news for Vargas who rides his bike on a dark trail along Unser.
"Hopefully it won't take too long. These lights have been off since March," Vargas said.

Foreign students - modern day slaves?

Eminem - Mosh MUSIC VIDEO HQ

Solyndra to Declare Bankruptcy

Update: Solyndra announces it plans to file Chapter 11 bankruptcy, is suspending operations and seeks a reorganization. Click here for the company's full statement.
Solyndra, a major manufacturer of solar technology in Fremont, has shut its doors, according to employees at the campus. 
"I was told by a security guard to get my [stuff] and leave," one employee said. The company employs a little more than 1,000 employees worldwide, according to its website.

Shortly after it opened a massive $700 million facility, it canceled plans for a public stock offering earlier this year and warned it would be in significant trouble if federal loan guarantees did not go through.
The company has said it will make a statement at 9am California time, though it's not clear what that statement will be. An NBC Bay Area photographer on the scene reports security guards are not letting visitors on campus. He says "people are standing around in disbelief." The employees have been given yellow envelopes with instructions on how to get their last checks.
Solyndra was touted by the Obama administration as a prime example of how green technology could deliver jobs. The President visited the facility in May of last year and said  "it is just a testament to American ingenuity and dynamism and the fact that we continue to have the best universities in the world, the best technology in the world, and most importantly the best workers in the world. And you guys all represent that. "
The federal government offered $535 million in low cost loan guarantees from the Department of Energy. NBC Bay Area has contacted the White House asking for a statement.
Some Republicans have been very critical of the loans.  "I am concerned that the DOE is providing loans and loan guarantees to firms that aren't capable of competing in the global market, even with government subsidies"  Florida Congressman Cliff Stearns told the New York Times.

Let's Lynch Lloyd Blankfein -- Dick Destiny

Keiser Report: Redback vs Greenback (E177)

Why The Rally Is Fake

Source: What Is That Whistling Sound There is something unsettling about this latest stock market rally.
I asked myself, what has changed?

Is there less uncertainty in the markets?

Are economic reports exceeding our expectations?

Are southern European states running balanced budgets or continuing to slide backwards and needing even larger bailouts/handouts?

Are bullion producers overwhelmed with supply or orders for more gold?

Has the banking system become better capitalized and more responsible?

Let's review some charts that give quite a variation of indications:


Gold seems to be indicating a pull back as low as 1500, at least from a technical standpoint.  But is something else brewing beneath the surface?


The S&P rally to 1360!  I will believe that when I see it.  Perhaps if QE3 is implemented.

Vix seems to support a rally as the S&P chart suggests.  Point and Figure charts were indicating Vix of 74 only a week ago.  Go figure.

Copper at over 8 bucks!  That would be something.  I think Point and Figure are faking us out on this one.

Treasuries at 150, only if the S&P, copper, and vix charts are very wrong.

The dark lord Libor is climbing again.  Certainly reminiscent of 2007 and 2008.

The Treasury - EuroDollar spread is climbing too, not in a spectacular manner, but enough to question the direction we are headed.

Of course the markets don't listen to my view, they just do what they do.

It will be interesting, even breathtaking, to see the action this autumn once transaction volumes pick up.

My gut feeling is that the market is faking us out and preparing to deliver considerable punishment to the bulls.

VIDEO - Nixon Ends The U.S. Gold Standard (1971)

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Nixon announces the end of the Bretton Woods International Monetary System 40 years ago today.  This was one of the most important decisions in modern financial, economic and monetary history and is a seminal moment in the creation of the global sovereign debt crisis confronting the U.S., Europe and the world in 2011.  The U.S. dollar has since fallen from 1/35th of an ounce of gold to 1/1750th of an ounce of gold.
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On August 15, 1971, President Nixon announced on TV 3 dramatic changes in economic policy. He imposed a wage-price freeze. He ended the Bretton Woods international monetary system.  And he imposed a temporary surcharge (tariff) on all imports. The Bretton Woods system was created towards the end of World War II and involved fixed exchange rates with the U.S. dollar as the key currency - but also a role for gold linked to the dollar at $35/ounce. The system began to falter in the 1960s because of an excess of dollars flowing out of the U.S. which foreign central banks had to absorb. A run on gold in 1968 was stemmed by a patch on Bretton Woods known as the two-tier gold system. All of this was ended unilaterally by the Nixon decision.

CNBC Poll: Do You Support a Return to the Gold Standard?

Some are calling for a return to the gold standard following the explosion of government debt in Europe and the U.S.
Before 1944, the standard meant governments linked their currencies to gold at a fixed rate. Since then, currencies have been linked to the dollar, meaning money has no underlying asset to back its value, with most currencies trading freely on the foreign exchange markets.
Declining confidence in the dollar and questions about its viability as the world's reserve currency have also made the gold standard appealing.

Proponents of such a standard argue that it would bring back fiscal stability. With a fixed money supply, they say, inflationary pressures would be largely contained and large increases in government budget deficits and public debt a thing of the past.

Skeptics say getting the world to sign on to gold, or any other type of metal, is too big a hurdle and worry about unintended consequences.
For instance, if the U.S. goes to a metal reserve on its own, whatever the metal, others might buy up the metal market, cause enormous appreciation of the dollar, and therefore threaten American exports.
What is your opinion?

Obama: US economy had a 'heart attack'

US President Barack Obama walks from Marine One
upon arrival on the South Lawn of the White House
© AFP Saul Loeb

WASHINGTON (AFP) - US President Barack Obama on Tuesday said that the US economy had suffered a "heart attack" and survived but is not recuperating quickly enough, as he geared up to unveil a major jobs plan.

Obama appeared on the "Tom Joyner Morning Show" in what also appeared to be an effort to reach out to black voters following criticism by African American leaders that he has not sufficient courted their community.

"What we went through, was the worst financial crisis since the Great Depression, and typically after financial recessions, financial crises like this, it takes a long time for the patient to heal," Obama said.

"This is a situation where the economy essentially had a heart attack, and the patient lived, and the patient is getting better, but it’s getting better very slowly."
Obama is preparing a major speech on jobs and deficit cutting next week which is designed to revive his own declining political prospects ahead of the 2012 election and to jolt the stagnant recovery back to life.

Republicans who run the House of Representatives advocate steep spending cuts and want to roll back regulations on small businesses and have already signaled a frosty reception for Obama's new program.

But the president argued that should Republicans, who have made no secret of their desire to deprive him of a second term, block his initiative, he will ask voters to make them pay in 2012.

"My attitude is that my job is to present the best plans possible. Congress needs to act.

"If Congress does not act, then I'm going to be going on the road and talking to folks, and this next election very well may end up being a referendum on whose vision of America is better."

Obama also dwelt on the problems faced by African American voters with their disproportionally high unemployment rate, after some community leaders complained in a story by the Politico website that he had neglected those core supporters.

"The fact of the matter is that when you occupy this office, when things are going good then you get the credit, and when things are going tough then you get the blame," said Obama, the United States' first African American president.

"That's the nature of the office. And so I don't spend a lot of time thinking about that. I do spend a lot of time thinking about what can we do to make sure that this economy starts growing faster."

© AFP -- Published at Activist Post with license

US moves to block AT&T takeover of T-Mobile

AT&T said it will "vigorously" fight the Justice
Department's move to block its $39 billion
takeover of rival T-Mobile
© AFP/File Etienne Franchi

WASHINGTON (AFP) - The US Justice Department moved Wednesday to block US telecom giant AT&T's $39 billion takeover of T-Mobile, saying it would be anti-competitive.

AT&T shares plunged 5.3 percent on Wall Street as the Justice Department said it had filed a lawsuit in US District Court here opposing the mega-merger.

"We are seeking to block this deal in order to maintain a vibrant and competitive marketplace," Deputy Attorney General James Cole said at a news conference.

"Any way you look at this transaction it is anti-competitive," added Sharis Pozen, acting assistant attorney general in charge of the Justice Department's antitrust division.

AT&T general counsel Wayne Watts said the telecom giant was "surprised and disappointed" by the move and had received "no indication from the Department of Justice that this action was being contemplated" despite numerous meetings.

Watts said AT&T will challenge the Justice Department's move in court.

"We plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewed," Watts said. "The Department of Justice has the burden of proving alleged anti-competitive effects and we intend to vigorously contest this matter in court.

"We remain confident that this merger is in the best interest of consumers and our country, and the facts will prevail in court," he said.

AT&T's takeover of T-Mobile, the US unit of Germany's Deutsche Telekom, had been expected to come in for tough regulatory scrutiny following criticism from some members of the US Congress and others.

But AT&T had been confident of getting the green light from the Justice Department's antitrust lawyers and the transaction carries an exceptionally high "breakup fee" of $3 billion.

AT&T, T-Mobile, Sprint Nextel and Verizon provide more than 90 percent of the mobile wireless connections in the United States.

Verizon currently holds a 31-percent share of the US wireless subscriber market followed by AT&T with 27 percent.

Adding T-Mobile's 37.3 million customers would give AT&T a 39-percent market share, putting it ahead of Verizon and Sprint Nextel, which had also expressed interest in acquiring T-Mobile.

The Justice Department said AT&T's acquisition of T-Mobile "would eliminate a company that has been a disruptive force through low pricing and innovation."

"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," Cole said.

"Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers," he said. "This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition."

The US Federal Communications Commission had also been examining the deal.

FCC chairman Julius Genachowski said that although the process was not complete "the record before this agency also raises serious concerns about the impact of the proposed transaction on competition.

"Vibrant competition in wireless services is vital to innovation, investment, economic growth and job creation, and to drive our global leadership in mobile," Genachowski said.

© AFP -- Published at Activist Post with license