Sunday, January 29, 2012

Fox on Greece

05/07/10 Stockholm, Sweden – Rep. Ron Paul (R-TX) was on Fox News yesterday, discussing Greece and describing how the financial crisis has become a currency crisis… which is much worse. He sees an attack on the dollar in terms of gold, and has no doubt that the currency crisis is a worldwide problem.

Referring to whether or not Greece-like riots could take place in the US he says:

“Absolutely, there’s going to be anger. There’s going to be riots in the streets as well. But this is all a consequence of the fact of why and how government could spend like this. It’s because they don’t have sound money.

“When we run up deficits, we tax, but never enough. We can’t tax, it would ruin the economy. Then we borrow, and we get away with that for a long time. But, we rely on printing presses from the Federal Reserve to create money and that’s where the problem is [...] we can’t have fake money, this is counterfeit.”

India abandons US dollar to purchase Iranian oil

UK Treasury to take charge in next bank crisis

(Reuters) - Britain's finance ministry will have the power from next year to take charge in any future banking crisis, including being able to tell the Bank of England (BoE) to pump money into the financial system.
Finance minister George Osborne published a draft law on Friday reforming the way Britain's financial system is regulated and setting out who has ultimate authority in a crisis.
The legislation is an attempt to draw a line under the regulatory failings that forced taxpayers to stump up hundreds of billions of pounds to shore up the banking sector in 2008.
It will scrap the Financial Services Authority from 2013 and hand power to supervise banks and insurers to the central bank.
"When taxpayers' money is at risk in a crisis this legislation gives the Chancellor (of the Exchequer) the power to direct the Bank of England to act," Osborne said in a speech to world political and financial leaders in Davos, Switzerland.
He said the Chancellor would direct specific funding help for individual entities, the system for winding up ailing banks as well as intervention "to preserve stability as long as the government is willing to take responsibility for the action and take the resulting risk on its balance sheet."
"There will be no ambiguity about who is in charge," Osborne said.
A failure of the 15-year-old "tripartite" system of financial regulation at the time of the 2008 financial crisis was a lack of clear lines of responsibility between the BoE, the FSA and the Treasury, which shared the role.
The tripartite committee did not meet for almost a decade and allowed the now majority state-owned Royal Bank of Scotland to take over Dutch bank ABN Amro when credit markets had already frozen up, Osborne said.
The finance ministry will have the power to direct the BoE only "if the direction is necessary to resolve or reduce a serious threat to the stability of the financial system of the United Kingdom," according to the Financial Services Bill.
Alistair Darling, finance minister during the 2008 crisis, said in his memoirs last year he had been frustrated at not being able to order the BoE to do what he felt was right.
"The Bank was independent and the Governor knew it. We did not agree on what to do," Darling wrote.
The British Bankers' Association, which represents lenders like Barclays, HSBC, Lloyds, and RBS, said it "believes it is vital to bring the Chancellor into crisis management decisions at an early stage - and sooner than the current proposals suggest."
The FSA had no comment on the bill.
The bill also said a future BoE governor should serve only a single eight-year term rather than the current renewable five-year term. Mervyn King's term is due to expire in mid-2013.
The bill confirmed that the Financial Services Authority would be scrapped next year and replaced by two separate bodies to end the pre-crisis regulatory "tick box" culture.
One body, the Financial Conduct Authority (FCA), will police markets and have power to regulate consumer credit, currently handled by the Office of Fair Trading.
The bill stops short of giving the FCA competition powers, which it had sought, but strengthens its remit to ensure there is enough competition in markets.
The FCA will have powers to be more intrusive in its supervisory approach and be able to ban harmful financial products, a reform which follows two decades of mis-selling scandals that cost the industry 15 billion pounds in compensation.
A second body, the Prudential Regulatory Authority, will be a subsidiary of the BoE and will concentrate on day-to-day supervision of banks, making the BoE one of the world's most powerful central banks, and raising concerns about its accountability.
The Bank's Governor also chairs the Financial Policy Committee (FPC) established a year ago on an interim basis, to identify risks to financial stability in the UK and direct regulators to take action.
To counter worries about a lack of accountability, the Bank of England's supervisory body, the Court of the BoE, proposed setting up an oversight committee for financial stability, made up of its non-executive members, to scrutinize the BoE's policymaking committees.
The Court suggested that the oversight committee should commission reviews of the process and implementation of policymaking from external authorities like the International Monetary Fund.
In addition, the legislation will oblige the oversight committee to commission internal reviews of financial stability policymaking, not only from the FPC but from other parts of the Bank with responsibilities relevant to financial stability.
(Editing by Helen Massy-Beresford and David Cowell)

California Jews Shake Down Mel Gibson For Reparations

by Keith Johnson
Does it ever end? Get a load of this…
Congregation Beth Shalom in Corona, California has sent Mel Gibson a letter in hopes of guilting him into forking over some cash to bail them out of a bad investment they made on their local synagogue. Apparently, the group took out a giant loan that they can’t afford to pay back and are now facing foreclosure.
In a move reminiscent of something out of post-war Germany, the Southern California synagogue is looking to Gibson as though he should pay some kind of “Holocaust” style reparations for the so-called anti-Semitic tirade he made back in 2006.
I guess it’s not enough that Mel has already spent millions of dollars contributing to Jewish charities, including $5 million to the Jewish Cedars Sinai Hospital. Not to mention getting down on his knees and apologizing to the Jewish community on numerous occassions—only to have his career railroaded anyway.
Entertainment website TMZ apparently got their hands on the letter. Here’s what it says:
“Our proposal to you, Mr. Gibson, is since you have been cited as an Anti-Semitic, and have denied those allegations, what better way to prove to all your fans and the nay Sayers — than to endorse and help raise funds for our cause — SOS, Save Our Synagogue…“Mr. Gibson, we offer you to be a Mensch and make a sizable contribution to our cause.”
That’s what you call CHUTZPAH, folks!

Confessions of a Communist Taxi Driver in Laos: A Lesson in Free Markets

Mekong River in Vientiane Loas
Bohemian Travelers image
Activist Post

While on our family adventure around the world, we had an interesting encounter with a taxi driver in the capital of Laos, Vientiane. This jovial local with excellent English aspired to move to America, and was ultra inquisitive of our first-hand experience as Americans.

First, our initial observations about Laos are important to help frame this story. After crossing into Laos from Thailand we noticed a distinct difference between the two countries. The rawness of Laos was evident. Not in a way that reeked of desperation, though, but in a way that is unspoiled by multinational corporations (you can always seem to get a Coca-Cola though).

Laos seemed every bit as peaceful and beautiful as Thailand, but Thailand was clearly more civilized, if that’s what you call having a 7-11 store on every other block. It’s almost the identical contrast experienced when crossing into Nicaragua from the more developed and “open” economy in Costa Rica.

Besides the similarity in the lush tropical landscape shared by Thailand and Costa Rica, they also share longer tradition of trading with the West than does Laos and Nicaragua. In short, they’d be considered “more developed.”

The other thing we noticed in Laos was the communist flag flying everywhere, including on the Best Western Hotel -- the lone Western hotel we saw in Vientiane. We could read all about the history of Laos to learn about what these labels like “communism” are supposed to mean, but we thought asking people in the trenches would be more enlightening.

 So, in the taxi ride to visit the Buddha statue park, our driver was thrilled to practice his English and learn about America. His perception was that America was so free, and that everyone has an opportunity to make lots of money. He longed to move there to experience that which he’d likely learned on TV.

We then began to ask him about the system in Laos. “Can you vote for the leaders here?” He laughed heartily before replying “No.”

“How does healthcare and school work?” we asked. “The government provides it, and it’s good enough,” he answered vaguely. However, everyone told us that Thailand’s healthcare is far better -- much like Costa Rica’s is far superior to Nicaragua’s.

“We don’t notice much desperate poverty here,” we led with. He said, “Most have what they need and the homeless children are taken in by the monks.” To which he admitted he’d been a monk…for a week. “It’s really hard. They can only eat in the morning,” he complained. And it’s food that is donated as offerings when the monks parade the streets at dusk.

We asked him what he’d do if he was able to get America. “I don’t know. Maybe open a shop or a food stand.” And this is where the conversation got interesting.

We explained that you can’t open a food stand in America without a license, various permits, insurance, and a tax number from the government. He was flabbergasted. “Really! Anyone can open a stand here with none of that.”

He asked us what happened when businesses are caught operating without those things. We told him they’re shut down by the government, and sometimes their equipment is confiscated and they’re arrested.

He couldn’t believe that the U.S. government would be that controlling of small businesses. “People don’t need permission to survive in Laos.”

This became very noticeable as our journey in Laos progressed. There were countless makeshift food stands selling all sorts of cuisine including grilled bats, bugs, and fried baby chicks – the whole chick! We went to restaurants where we literally used the bathroom in the owner’s living room. There were no health department regulations, no business licenses framed on the wall, and never any taxes calculated on our bill.

Deep-fried baby chicks and grilled bats (Click to enlarge)
Choosing which restaurants or food stands are safe while traveling follows the golden rule of the free market; eat at places that are frequented by locals -- because a busy place is a proven place -- or get firsthand recommendations of a good place.

The ability to obtain licenses and permits or to meet mandatory regulations plays no role in food quality. Sometimes you win and sometimes you lose and spend a day or two on the toilet. But, ultimately, the free market weeds out the overpriced or unsanitary competition.

There were also dozens of makeshift taxi services without licenses, insurance or standardized meters. There are tuk-tuks powered by motorbikes; song thaew, which are pickup trucks with bench seats in the bed, and our personal favorite, the modified rototiller with a wagon.

Makeshift rototiller taxi crosses private toll bridge in Vang Vieng Laos
The rototiller taxi is an example of the how people can use ingenuity to figure out ways to survive in an unregulated marketplace. As cool as it is, though, the lack of conformity or insurance seems very unsafe to the conditioned mind of a Westerner. But just like with the restaurateurs whose livelihood depends on the quality of their vittles, the taxi driver’s livelihood depends entirely on keeping his vehicle clean, serviced, and out of accidents.

By the time we finished our brief taxi ride in Vientiane; we, including our driver, got the sense that the everyday individual in Laos has more freedom and flexibility to provide for themselves than people in the US, and that regulation is governed by the free market. Our driver’s deflated perception of economic freedom in America was evident. It’s an ironic conclusion to come to in a communist country.

Perhaps these regulations exist and the government simply doesn’t have the capacity or the will to enforce them unless a business becomes large enough to care about extracting protection money from. And perhaps the free market can only regulate quality when the vendor’s absolute livelihood is at stake.

Regardless, what we’d call the working class definitely appeared to have more freedom, and there was noticeably less desperation than their nominal poverty would suggest.

India to neglect sanctions on Iranian oil

Saturday, January 28, 2012

China And Japan Currency Swap: Nail In US Dollar’s Coffin – OpEd

By Horace Campbell
On 25 December 2011, the government of Peoples Republic of China and Japan unveiled plans to promote direct exchange of their currencies. This agreement will allow firms to convert the Chinese and Japanese currencies directly into each other, thus negating the need to buy dollars. This deal between China and Japan followed agreements between China and numerous countries to trade outside the sphere of the US dollar. A few weeks earlier, China also announced a 70 billion Yuan ($11 billion) currency swap agreement with Thailand.
After visiting China, the Prime Minister of Japan Yoshihiko Noda went on to India and signed another currency swap agreement with the government of India. These currency agreements in Asia came in a year when the countries of the Association of South East Asian Nations (ASEAN) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) were seeking to deepen ways to strengthen their firewall to protect their economies from the continued devaluation of the US dollar. In the year of the ‘Eurozone crisis’ when the future of the EURO as a viable currency was fraught with uncertainty, many states were reconsidering holding their reserves in the US dollar.
Moreover, in the face of the neo-liberal orthodoxy of the Bretton Woods institutions (especially the IMF) swap agreements were proliferating in all parts of the globe. The Latin Americans established the Bank of the South and are slowly laying the groundwork for a new currency, the SUCRE. As in Asia, the Bank of the South will be one of the fundamental institutions of the Union of South American Nations that has been launched in Latin America in order to guarantee the independence of the societies of Latin America. Not to be left as the only region holding dollars, the leaders of the oil rich states of the Gulf Cooperation Council have been buying gold while announcing as long ago as 2009 the intention to establish a monetary union with a common currency. In Africa there are plans for the strengthening of the financial basis of the African Union but so far there has not been the same kind coordinated regional plans for financial independence. During the period of the debate on the debt crisis in the USA, the Nigerian central bank governor Lamido Sanusi announced that Nigeria plans to invest 5 to 10 percent of its foreign exchange reserves in the Chinese currency – the Yuan also known as the renminbi (RMB).
These accelerated Swap agreements – (agreements between two or several countries (bilateral vs. multilateral) on exchanging currencies in times of crisis) – came a decade after the countries of ASEAN established the Chiang Mai Initiative (CMI). In the aftermath of the Asian economic crash and the currency attack by speculators of the financial services industry, the CMI had been established to promote financial cooperation among the ASEAN countries with regional collaboration on currency issues high on the agenda. Initially when the CMI was launched, the government of China had been lukewarm to the goals of the CMI but over decade, especially after the 2007-2008 Wall Street crash, the preliminary partnership that was called ASEAN plus three (Viz ASEAN countries plus China, Japan and Korea) matured to the point where the ASEAN Swap Agreements have now been expanded to the Chiang Mai Initiative Multilateralization (CMIM) agreement, and a set of rules with structured mechanisms for financial regionalism to work for the development of Asian bond markets. These three pillars of the new Asian economic cooperation – CMIM, Asian Bond Markets and bilateral swap agreements – mark a new stage in the international political order.
This week we will examine the implications of the Chinese/ Japan currency swap in the context of the internal discussions in China about the consolidation of socialism. In 2011, China overtook Japan as the second largest economy in the world, and every expansion increases internal and external pressures on the socialist goals of the People’s Republic of China. More importantly, it is crucial to recollect the competitive devaluations and currency wars of the last depression so that the decline of the dollar can be managed in a way that avoids the recourse to open confrontation of the last depression. It is worth remembering that one of the goals of the fascists in the last depression was to roll back socialism.
In our contribution this week we will examine the implications of the swap agreement between China and Japan and the pressures on other regions to delink from the dollar. The conclusion will argue that this swap is one more nail in the coffin of the dollar as the international reserve currency.


This was the headline in the financial press as Bloomberg News and other news sheets of the financial world reported the agreement on settling trade between the two countries in Yen and RMB instead of dollar. With US $340 Billion of transactions in 2010 between the two countries, both being each other’s biggest trading partner, the deal is a clear break away from US financial domination. This Bloomberg Report stated,
‘Japan and China will promote direct trading of the Yen and Yuan without using dollars and will encourage the development of a market for companies involved in the exchanges, the Japanese government said. Japan will also apply to buy Chinese bonds next year, allowing the investment of renminbi that leaves China during the transactions, the Japanese government said in a statement after a meeting between Prime Minister Yoshihiko Noda and Chinese Premier Wen Jiabao in Beijing yesterday. Encouraging direct Yen- Yuan settlement should reduce currency risks and trading costs, the Japanese and Chinese governments said. China is Japan’s biggest trading partner with 26.5 trillion Yen ($340 billion) in two-way transactions last year, from 9.2 trillion Yen a decade earlier. The pacts between the world’s second- and third-largest economies mirror attempts by fund managers to diversify as the two-year-old European debt crisis keeps global financial markets volatile.
‘Given the huge size of the trade volume between Asia’s two biggest economies, this agreement is much more significant than any other pacts China has signed with other nations.’
Less than two weeks later, in the first week of January 2012, the President of South Korea Lee Myung-bak travelled to China to discuss a ‘bilateral strategic partnership.’ This discussion on bilateral partnership between South Korea and China took place in a context where the Republic of South Korea did not want to be left behind. Ostensibly the visit to China was to discuss the recent passing of Kim Jung IL of North Korea but Chinese media reported that China, Japan and South Korea were hammering out the basic framework for a free trade agreement between the three biggest economies in East Asia.
These agreements will have implications for the dollar as the global reserve currency and there will be increased pressures for the Chinese currency to be internationalized as other societies follow the lead of Japan and seek swap agreements outside of the dollar.


Japan is one of closest allies of the United States. There are thousands of US troops stationed in Japan, but the Japanese, like all peoples of the world, have been losing money as the US dollar was devalued over the past three years. This devaluation has taken the form of what the US authorities called quantitative easing. There has been two such quantitative easings since the 2009 as the United States unloaded more fiat currency on the world. Whatever the name (devaluations or quantitative easing) all countries in the world were thinking of finding ways to escape being hostages to the US dollar and Central Bank governors from Brazil to India and beyond are working to protect their societies from these devaluations. Asian central banks together hold some $3,3 Trillion in reserves, amounting to an impressive 46 percent of the world’s total national reserves. The government of China has vowed to reduce its holding of US dollars and in 2011. The China Daily newspaper reported that,
‘According to data from the US Treasury Department, China’s holdings of US Treasury bonds stood at $1.1326 trillion by the end of November 2011, $1.5 billion down from the previous month. It was the second successive month that the amount had declined, and the lowest reserve level seen since July 2010. China made six monthly cuts of US debt in 2011, the department’s data showed, trimming its holdings by $27.5 billion from the end of 2010. Yet despite the reductions, China remains the top buyer of US Treasury securities.”
What was left unsaid was the plan of the political leadership of China for a deft management of the reductions so that the international political economy is not drastically affected leading to unforeseen circumstances. Over the past decade numerous officials from the National People’s Congress, the Central Bank and the commercial sectors have been stating that China has to reduce its holdings of US bonds and diversify into other currencies. When, over five years ago, Parliamentary vice-chairman Cheng Siwei, called for the diversification of Chinese reserves away from US bonds, the implicit assumption was that China would diversify and buy European bonds. This was before the full hollowness of the European project became manifest to the world.


The Chinese economy has registered an average of over 10 per cent growth in the past thirty years. This has been the most successful transformation of an economy in the recorded history of political economy, but the pundits do not like to point to the socialist foundations of China and the sacrifices made by the Chinese people to transform their society. Mao Zedong called the currency of China, the Renminbi, and the people’s currency. Renminbi is the official name of the currency introduced by the Communist People’s Republic of China at the time of its foundation in 1949. The other name for the currency is the Yuan. Hence the Chinese currency is known by a number of names (including the Kuai).
As a low wage economy, the hard work of the Chinese producers has made the society a force to be reckoned with and the currency attractive to other countries seeking a refuge from the dollar. The political leaders in China have been careful about the pace and nature of the internationalization of the currency. The leaders have slowly allowed Hong Kong to become an offshore renminbi financial centre by allowing authorized institutions in Hong Kong to offer renminbi services such as deposit taking, currency exchange, remittance and trading in RMB denominated bonds. Since 2009 when the Chinese government opened this slight door to the internationalization of its currency, other financial centres such as Macau and Singapore have been hoping to get into the offshore RMB business.
These regional pressures for the internationalization of the RMB came up against the hard reality that for the full internationalization of the currency, for the RMB to become a global currency, the government of China would have to establish capital markets and ensure the full convertibility of capital account. The balance of forces within China would then shift in favour of the one per cent who would then privatise state assets at a faster rate. In the present international system, opening such capital markets beyond the tightly controlled stock exchanges would open up the Chinese currency to the kind of full scale attack and speculation that was witnessed in the Asian financial crisis in 1997. Thus far the Chinese state has held the line against the expansion of capital markets in ways that would undermine the stability of the society.
The economy of China is a mixed economy with the state-owned enterprises dominating the economy. Of the ten largest companies on the Shanghai Stock Exchange, eight are state owned. With the growth and power of the Chinese economy, the Chinese capitalists have expanded with a large number of billionaires. These billionaires do not control political power and the Chinese state continues to subsidise food, education and transportation services. There are many limitations to the nature of the Chinese political system, especially the hothouse of growth and accumulation that is creating a fundamental environmental hazard for the majority of the citizens. The growing inequalities and the massive push for the reversal of socialist gains since 1949 are now compounded by an alliance between capitalists in Singapore and the US who are calling for speeding the internationalisation of the RMB.
It is in this context where the December 25 agreement to allow Japan to ‘apply to buy Chinese bonds next year’ becomes significant. It is again worth quoting the press reports of the December 25 agreement. According to the British Broadcasting Corporation,
‘The two leaders also agreed to allow the Japan Bank for International Cooperation to issue Yuan-denominated bonds in China, the first time a foreign government body has been allowed to do so. At the same time Japan said it was also looking to buy Chinese government bonds, a move that analysts believe may prove to be mutually beneficial to both nations. ‘By adopting Chinese bonds as a part of official foreign exchange reserves, Japan is labelling Chinese bonds as an investable asset,’ according to Takuji Okubo of Societe Generale Tokyo.
‘This should encourage Japanese private investment into Chinese bonds, as well as into other Asian emerging currencies. Such a development in turn should help develop offshore currency trading in Japan.’
This new collaboration between China and Japan has been underlined by the Japanese Foreign Minister Koichiro Gemba who on Tuesday said that ‘Japan will seek to take a less inward-looking stance when it comes to diplomacy in the Asia-Pacific region.’ In the words of the China daily newspaper the Foreign Minister said that, ‘Japan will look to enhance diplomatic ties with China based on mutually beneficial goals. With China, this year marks the 40th anniversary of normalizing diplomatic ties, we will aim to deepen the mutually beneficial relationship based on common strategic interests,’ Gemba said in his first foreign policy speech in parliament.
He went on to say that Japan plans to proactively make ‘concrete efforts’ to strengthen its ties with China and establish more ‘open and multilayered networks’ in the best interests of both countries
Ever alert to these shifts in the global currency and financial markets, the British Chancellor of the Exchequer, George Osborne, travelled to Hong Kong in January and offered London as the western base for the coming internationalization of the RMB. Osborne was vociferously making a plea to make London the leading centre for trading the Chinese currency. This conservative Chancellor was exposing the opportunism of the British and demonstrating the short memory of the British hoping that the Chinese have forgotten the Opium Wars.


While the British were declaring their willingness to embrace the RMB, the US Senate has gone about increasing the war of words against China. In the failure to compete in the so-called ‘marketplace,’ sections of the US political leadership have for years been complaining that China should allow open markets for its currency and for its currency to appreciate more rapidly. There are two sections of the US political establishment pushing against the Chinese currency. The first are those allied to Wall Street and the currency speculators who want to be able to trade in the Chinese currency and to do to China what was done to Malaysia, Taiwan, Thailand and other Asian economies in 1997. The second pressure is coming from those sections of capital who complain that China is flooding US markets. While these two sections do not agree they support the information war against China, this information war carries the refrain that the renminbi is undervalued by 25-30 percent against the dollar, which means Chinese exports to the US become 25-30 percent cheaper, while US goods exported to China are more expensive.
Even though China has allowed its currency to appreciate a little in the last two years, the two sections of capital in the US hostile to China have said that this is not enough. In October 2011 the US Senate passed S.1619, the Currency Exchange Rate Oversight Act of 2011, and a bill to address China’s ongoing currency manipulation, by a vote of 63-35.
One year earlier one commentator for Time Magazine had noted correctly that the real challenge for the United States was to change its consumption patterns.
‘We’ve seen this movie before. From July 2005 to July 2008, under pressure from the US government, Beijing allowed its currency to rise against the dollar by 21 percent. Despite that hefty increase, China’s exports to the US continued to grow mightily. Of course, once the recession hit, China’s exports slowed, but not as much as those of countries that had not let their currencies rise. So even with relatively pricier goods, China did better than other exporting nations.
Look elsewhere in the past and you come to the same conclusion. In 1985 the US browbeat Japan at the Plaza Accord meetings into letting the yen rise. But the subsequent 50 percent increase did little to make American goods more competitive. Yale University’s Stephen Roach points out that since 2002, the US dollar has fallen in value by 23 percent against all our trading partners, and yet American exports are not booming. The US imports more than it exports from 90 countries around the world. Is this because of currency manipulation by those countries, or is it more likely a result of fundamental choices we have made as a country to favor consumption over investment and manufacturing?’


This commentary on the need for the US to transform its economy and live within its means fell short of outlining a more fundamental problem, that of the military management of the international system and the outmoded imperial impulses that stem from the kind of militarism that now reflect US society. While the Japanese and the Chinese were deepening economic relations, the US political leaders were intensifying its bellicose rhetoric about Chinese military buildup in the South China Sea and pushing forward the idea of a Trans-Pacific Partnership (TPP) Agreement. Japan was being wooed to become a key anchor of the US dominated TPP.
The China/Japan currency swap was a bold move on the part of these two economic giants in Asia. There are historic difference between the Chinese and Japanese, especially the experiences of the 1930’s Japanese occupation of China and the Rape of Nanking. Notwithstanding these historic differences the US debt of over US $ 14 trillion along with the inability of the US political leaders to effectively tackle the growing debt has awoken many that the US dollar as the international reserve currency is on its last legs.
In May 2009, Nouriel Roubini in a contribution to the New York Times on the Almighty Renmimbi summed up the decline of the dollar in this way,
‘This decline of the dollar might take more than a decade, but it could happen even sooner if the US did not get its financial house in order. If China and other countries were to diversify their reserve holdings away from the dollar — and they eventually will — the United States would suffer. It would take a long time for the renminbi to become a reserve currency, but it could happen. The resulting downfall of the dollar may be only a matter of time.’
Nouriel Roubini was writing this warning to alert the US rulers to shift gears because of the rise of China. He called for a strategy of investments to recover the US economy declaring, ‘Now that the dollar’s position is no longer so secure, we need to shift our priorities. This will entail investing in our crumbling infrastructure, alternative and renewable resources and productive human capital — rather than in unnecessary housing and toxic financial innovation. This will be the only way to slow down the decline of the dollar, and sustain our influence in global affairs.’
China and Japan have taken a decisive step to diversify their reserve holdings away from the dollar. What is more fundamental is the new rush by other states to join in this new regional currency arrangement. Republic of South Korea is knocking to become central to this swap arrangement while other members of ASEAN are watching these developments carefully. The Eurozone crisis has narrowed the ability of the US to respond negatively to the China/Japan currency swap. Importantly, the capitalist crisis in Europe has stiffened the spine of those elements of the Chinese society who proclaim that the principal task of China is to bail out its own people and transform the economy to benefit the 1.3 billion citizens. These left forces in China are calling for the consolidation of socialism and for vigilance to halt the power of those who are calling for a speedy internationalization of the RMB. These social elements understand the realities behind the call for opening capital markets in China.
It is the left and the progressive forces in China who agree with Mao that the RMB is the people’s currency and that the most important currency is the Chinese people. It is not usual for this writer to quote from Time magazine, but in the arguments of [url=,9171,2024220,00.html#ixzz1kXFiPwKO]
Fareed Zakaria[/url] on the question of overvalued currency, this author would concur, ‘The Real Challenge from China: Its People, Not Its Currency.’
‘China is beginning a move up the value chain into industries and jobs that were until recently considered the prerogative of the Western world. This is the real China challenge. It is not being produced by Beijing’s currency manipulation or hidden subsidies but by strategic investment and hard work. The best and most effective response to it is not threats and tariffs but deep, structural reforms and major new investments to make the U.S. economy dynamic and its workers competitive.’
And Zakaria might have added that the US cannot be competitive as long as it imprisons the best of the young people of colour in the prison industrial complex.
The lessons learnt from the last capitalist depression are that competitive devaluations, trade wars, currency disputes and new alliances sow the seeds of hostilities and provide the climate for incidents. Incidents then spin out of control beyond diplomacy. The contagion from the capitalist crisis will spread and the forces of socialist transformation will have to be even more alert and vigilant to balance the formation of a regional currency block while supporting the creation of the multipolar world to end the era of dollar and pound/sterling hegemony. Those regions of the world that have not awoken to the slow demise of the dollar need to pay closer attention. Planned diversification away from the dollar is preferable to rushed monetary unions. The African peoples have a lot of lessons to learn from both the capitalist crisis in Europe and the new financial arrangements between China and Japan.
Horace Campbell is professor of African American Studies and Political Science at Syracuse University.

EU sent 50 MEPs to Congo for eight days at cost of £850,000

The European Parliament spent over £850,000 sending 50 MEPs for an eight-day trip to the Congo in 2010, according to a list of its most expensive foreign delegations.

EU sent 50 MEPs to Congo for eight days at cost of £850,000 In July, 13 of the ACP-EU MEPs travelled to the Seychelles for a five-day trip that cost the taxpayer an £4,374 per head in travel, hotel and 'logistics' bills

MEPs were attending a meeting of the African-Caribbean Pacific and EU (ACP-EU) joint parliamentary assembly to discuss with MPs from the developing countries how to tackle poverty in the world's poorest regions.
At the November 2010 gathering in Kinshasa, MEPs racked up a bill of £17,067 per head – a sum that is 141 times the £121 that is the average annual income in Congo. The figures, revealed by The Daily Telegraph, were described by a Ukip MEP as “an affront to taxpayers”.
The same ACP-EU delegation of MEPs, a group of 64 this time, had previously gathered in Tenerife in January 2010. They ran up travel and hotel bills of £588,404, or £9,193 each, over the course of a week in the Spanish sunshine, according to the list revealed by The Daily Telegraph. A one week stay in a junior suite in London’s elite Ritz Hotel costs £3,928.
In July, 13 of the ACP-EU MEPs travelled to the Seychelles for a five-day trip that cost the taxpayer £4,374 per head in travel, hotel and “logistics” bills.
The costs of the first class flights and five star luxury hotels for the trips, totalling £230 million in 2010, have traditionally been shrouded in secrecy by an EU assembly that is wary of fuelling its “gravy train” image.

But following an investigation into spiralling costs by MEPs on the parliament’s budget committee, the EU assembly’s administration has compiled a list of the most expensive trips, breaking down costs for the first time.
The figures, seen by this newspaper, show the huge bills presented to taxpayers for keeping MEPs in the lifestyle to which they are accustomed.
A delegation of four MEPs to Argentina in March 2010 cost £21,878 in daily bills for each MEP. Seven MEPs on the parliament’s trade committee managed to rack up travel, hotel and other bills of £5,384 each over four days in springtime Rome.
Marta Andreasen, a Ukip MEP and the European Commission’s former chief accountant before she was sacked by Lord Kinnock for whistle-blowing in 2004, described the costs as “astonishing” at a time when the EU was imposing austerity programmes on the eurozone.
”Even as the eurozone crisis was starting to bite hard in 2010, MEPs were rewarding themselves with self-serving and largely pointless delegation visits,” she said.
”These figures are an appalling abuse of public money. They should hang their heads in shame.”
A parliament spokesman insisted that the figures include “global costs” such as accompanying staff and the cost of hiring rooms for meetings.
”The why of these meetings is that relations between the EU and third countries by necessity have a parliamentary dimension,” she said.
”These meetings provide the only way in which elected representatives of, for example, the ACP former colonies can make their wishes heard as regards EU policies.”
Other Brussels institutions and officials are increasingly concerned that spending by MEPs is in danger of damaging the EU during a period when national public budgets are being cut and living standards have been hit by a recession generated by the eurozone.
Earlier this week, Janusz Lewandowski, the European budget commissioner, wrote a letter to the parliament asking MEPs to show the public that the EU was tightening its belt and reducing the costs of administration.
”It is of utmost importance to continue to demonstrate that the European institutions are acting responsibly in the light of the difficult economic and budgetary conditions and to send a corresponding signal to European public opinion,” he wrote.

Spain's unemployment total passes five million

Spain's unemployment figure passed the five million mark in the last quarter of 2011, official figures show.
Spain's unemployment figure passed the five million mark in the last quarter of 2011, official figures show.
The National Statistics Institute said 5.3 million people were out of work at the end of December, up from 4.9 million in the third quarter.
The rate rose from 21.5% in the third quarter to 22.8% - the highest rate in nearly 17 years.
Spain already has the highest jobless rate in the 17-nation eurozone and is expected to slide back into recession.

The 22.8% rate is more than twice the average unemployment rate of the eurozone, which stood at 10.3% in November, according to data released earlier this month.
The Spanish figures show almost half of all 16-24 year-olds in the country are jobless - 48.6% compared with 45.8% before.
Spain's new ruling Popular Party conservative government has pledged labour reforms to try to improve the jobs market.
On Thursday, public service employees staged a series of demonstrations across Spain to protest against unemployment and increasing austerity measures.
Budget cuts Spain has struggled since the property bubble burst in 2008.
In the years between 2004 and 2008, the average house price in Spain rose 44%, Construction represented about 16% of GDP by the end of the boom, and the unemployment rate was down to 7.95%.
However, rising house prices fuelled the sub-prime mortgage market, leading the Spanish to borrow more as they struggled to get on the housing ladder.

Start Quote

There are millions without hope - some people I know have been without work for two years”
Marisol, Malaga
The downturn has seen repossessions of Spanish properties rise 32% in the past year.
The range of austerity measures proposed by new Prime Minister Mariano Rajoy's government angered many ahead of this week's protests.
His measures include 8.9bn euros in new budget cuts, and tax increases designed to boost government coffers by 6.3bn euros.
However, there are concerns that Mr Rajoy will be unable to meet his pre-election pledge to cut the country's deficit to 4.4% of GDP in 2012.
The Bank of Spain predicts the country's economy will shrink by 1.5% this year, saying the eurozone debt crisis has destroyed business confidence and closed off bank credit, causing a large drop in domestic demand.

If The Economy Is Improving….

Everywhere you turn these days, someone is proclaiming that the economy is improving.  Barack Obama is endlessly touting the “improvement” in the economy, the mainstream media is constantly talking about “the economic recovery” and an increasing number of Americans seem to be buying into this line of thinking.  A new NBC/Wall Street Journal poll found that 37 percent of Americans believe that the economy will improve over the next year, while only 17 percent of Americans believe that it will get worse.  But is the economy actually improving?  Not really.  At the moment things are relatively stable.  Some economic statistics are improving slightly and some continue to get even worse.  However, it is very important to keep in mind that one of the biggest reasons why things have stabilized is because the federal government is pumping more than a trillion dollars a year into the economy that it does not have.  The Obama administration is engaging in a debt binge unlike anything America has ever seen before, and yet many economic indicators are still in decline.  So what is going to happen when the federal government stops injecting gigantic waves of borrowed money into the economy?  That is a frightening thing to think about.  The best efforts of our “leaders” in Washington D.C. are not accomplishing a whole lot.  The Federal Reserve has pushed interest rates as low as they can go and the federal government is spending unprecedented amounts of money.  But even with the federal government and the Federal Reserve pushing the accelerator all the way to the floor, the economy is still not improving much at all.  Millions upon millions of Americans out there are anticipating some sort of a “great economic recovery”, and they are going to be bitterly disappointed.
But right now there are some “bright spots” in the economy, and you are bound to run into family and friends that will repeat to you the nonsense that they are hearing on the television about how the economy is recovering.
When they try to convince you that the economy is getting better, ask them these questions….
If the economy is getting better, then why did new home sales in the United States hit a brand new all-time record low during 2011?
If the economy is getting better, then why are there 6 million less jobs in America today than there were before the recession started?
If the economy is getting better, then why is the average duration of unemployment in this country close to an all-time record high?
If the economy is getting better, then why has the number of homeless female veterans more than doubled?
If the economy is getting better, then why has the number of Americans on food stamps increased by 3 million since this time last year and by more than 14 million since Barack Obama entered the White House?
If the economy is getting better, then why has the number of children living in poverty in America risen for four years in a row?
If the economy is getting better, then why is the percentage of Americans living in “extreme poverty” at an all-time high?
If the economy is getting better, then why is the Federal Housing Administration on the verge of a financial collapse?
If the economy is getting better, then why do only 23 percent of American companies plan to hire more employees in 2012?
If the economy is getting better, then why has the number of self-employed Americans fallen by more than 2 million since 2006?
If the economy is getting better, then why did an all-time record lowpercentage of U.S. teens have a job last summer?
If the economy is getting better, then why does median household income keep declining?  Overall, median household income in the United States has declined by a total of 6.8% since December 2007 once you account for inflation.
If the economy is getting better, then why has the number of Americans living below the poverty line increased by 10 million since 2006?
If the economy is getting better, then why is the average age of a vehicle in America now sitting at an all-time high?
If the economy is getting better, then why are 18 percent of all homes in the state of Florida currently sitting vacant?
If the economy is getting better, then why are 19 percent of all American men between the ages of 25 and 34 living with their parents?
If the economy is getting better, then why does the number of “long-term unemployed workers” stay so high?  When Barack Obama first took office, the number of “long-term unemployed workers” in the United States was approximately 2.6 million.  Today, that number is sitting at 5.6 million.
But there is some good news.
When Barack Obama first took office, an ounce of gold was going for about $850.  Today, the price of an ounce of gold is over $1700.
The era of great prosperity that America has enjoyed for so long is coming to an end.
In fact, our long-term economic decline is about to accelerate.
So enjoy this “bubble of hope” while you can, because it won’t last long.
As I have written about previously, many are warning that Europe is on the verge of a nightmarish financial crisis that could potentially plunge us into aglobal recession even worse than 2008.
So let us hope for the best, but let us also prepare for the worst.
Just because the economy is about to go through hard times does not mean that you have to go through hard times personally.
Right now, you can decide to make an investment or start a business that will thrive in a tough economic environment.
Victory often goes to the most prepared.  So don’t just sit there while the storm clouds gather.  Instead, this should be a time when you are gathering resources and developing a gameplan for the coming economic chaos.
Those that choose to have blind faith in “the system” are going to be tremendously disappointed in the years ahead.  Just because you have a job right now does not mean that it is always going to be there.  Just because your stock portfolio is doing well right now does not mean that will always be the case.
Hopefully we all learned some important lessons from 2008.  The global financial situation can turn on a dime.  When markets fall apart, they tend to do so very rapidly.
Ultimately, the debate about whether the economy is improving or not is going to be ended very emphatically.  When the next wave of the financial crisis hits, there will be no doubt about what direction things are going.
Don’t let the next wave catch you by surprise.
Now is the time to prepare.

Will Iran Kill the PetroDollar?

The official line from the United States and the European Union is that Tehran must be punished for continuing its efforts to develop a nuclear weapon. The punishment: sanctions on Iran's oil exports, which are meant to isolate Iran and depress the value of its currency to such a point that the country crumbles.

But that line doesn't make sense, and the sanctions will not achieve their goals. Iran is far from isolated and its friends – like India – will stand by the oil-producing nation until the US either backs down or acknowledges the real matter at hand. That matter is the American dollar and its role as the global reserve currency.
The short version of the story is that a 1970s deal cemented the US dollar as the only currency to buy and sell crude oil, and from that monopoly on the all-important oil trade the US dollar slowly but surely became the reserve currency for global trades in most commodities and goods. Massive demand for US dollars ensued, pushing the dollar's value up, up, and away. In addition, countries stored their excess US dollars savings in US Treasuries, giving the US government a vast pool of credit from which to draw.
We know where that situation led – to a US government suffocating in debt while its citizens face stubbornly high unemployment (due in part to the high value of the dollar); a failed real estate market; record personal-debt burdens; a bloated banking system; and a teetering economy. That is not the picture of a world superpower worthy of the privileges gained from having its currency back global trade. Other countries are starting to see that and are slowly but surely moving away from US dollars in their transactions, starting with oil.
If the US dollar loses its position as the global reserve currency, the consequences for America are dire. A major portion of the dollar's valuation stems from its lock on the oil industry – if that monopoly fades, so too will the value of the dollar. Such a major transition in global fiat currency relationships will bode well for some currencies and not so well for others, and the outcomes will be challenging to predict. But there is one outcome that we foresee with certainty: Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.

The Petrodollar System

To explain this situation properly, we have to start in 1973. That's when President Nixon asked King Faisal of Saudi Arabia to accept only US dollars as payment for oil and to invest any excess profits in US Treasury bonds, notes, and bills. In exchange, Nixon pledged to protect Saudi Arabian oil fields from the Soviet Union and other interested nations, such as Iran and Iraq. It was the start of something great for the US, even if the outcome was as artificial as the US real-estate bubble and yet constitutes the foundation for the valuation of the US dollar.
By 1975, all of the members of OPEC agreed to sell their oil only in US dollars. Every oil-importing nation in the world started saving its surplus in US dollars so as to be able to buy oil; with such high demand for dollars the currency strengthened. On top of that, many oil-exporting nations like Saudi Arabia spent their US dollar surpluses on Treasury securities, providing a new, deep pool of lenders to support US government spending.
The "petrodollar" system was a brilliant political and economic move. It forced the world's oil money to flow through the US Federal Reserve, creating ever-growing international demand for both US dollars and US debt, while essentially letting the US pretty much own the world's oil for free, since oil's value is denominated in a currency that America controls and prints. The petrodollar system spread beyond oil: the majority of international trade is done in US dollars. That means that from Russia to China, Brazil to South Korea, every country aims to maximize the US-dollar surplus garnered from its export trade to buy oil.
The US has reaped many rewards. As oil usage increased in the 1980s, demand for the US dollar rose with it, lifting the US economy to new heights. But even without economic success at home the US dollar would have soared, because the petrodollar system created consistent international demand for US dollars, which in turn gained in value. A strong US dollar allowed Americans to buy imported goods at a massive discount – the petrodollar system essentially creating a subsidy for US consumers at the expense of the rest of the world. Here, finally, the US hit on a downside: The availability of cheap imports hit the US manufacturing industry hard, and the disappearance of manufacturing jobs remains one of the biggest challenges in resurrecting the US economy today.
There is another downside, a potential threat now lurking in the shadows. The value of the US dollar is determined in large part by the fact that oil is sold in US dollars. If that trade shifts to a different currency, countries around the world won't need all their US money. The resulting sell-off of US dollars would weaken the currency dramatically.
So here's an interesting thought experiment. Everybody says the US goes to war to protect its oil supplies, but doesn't it really go to war to ensure the continuation of the petrodollar system?
The Iraq war provides a good example. Until November 2000, no OPEC country had dared to violate the US dollar-pricing rule, and while the US dollar remained the strongest currency in the world there was also little reason to challenge the system. But in late 2000, France and a few other EU members convinced Saddam Hussein to defy the petrodollar process and sell Iraq's oil for food in euros, not dollars. In the time between then and the March 2003 American invasion of Iraq, several other nations hinted at their interest in non-US dollar oil trading, including Russia, Iran, Indonesia, and even Venezuela. In April 2002, Iranian OPEC representative Javad Yarjani was invited to Spain by the EU to deliver a detailed analysis of how OPEC might at some point sell its oil to the EU for euros, not dollars.
This movement, founded in Iraq, was starting to threaten the dominance of the US dollar as the global reserve currency and petro currency. In March 2003, the US invaded Iraq, ending the oil-for-food program and its euro payment program.
There are many other historic examples of the US stepping in to halt a movement away from the petrodollar system, often in covert ways. In February 2011, Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), called for a new world currency to challenge the dominance of the US dollar. Three months later a maid at the Sofitel New York Hotel alleged that Strauss-Kahn sexually assaulted her. Strauss-Kahn was forced out of his role at the IMF within weeks; he has since been cleared of any wrongdoing.
War and insidious interventions of this sort may be costly, but the costs of not protecting the petrodollar system would be far higher. If euros, yen, renminbi, rubles, or for that matter straight gold, were generally accepted for oil, the US dollar would quickly become irrelevant, rendering the currency almost worthless. As the rest of the world realizes that there are other options besides the US dollar for global transactions, the US is facing a very significant – and very messy – transition in the global oil machine.
The Iranian Dilemma
Iran may be isolated from the United States and Western Europe, but Tehran still has some pretty staunch allies. Iran and Venezuela are advancing $4 billion worth of joint projects, including a bank. India has pledged to continue buying Iranian oil because Tehran has been a great business partner for New Delhi, which struggles to make its payments. Greece opposed the EU sanctions because Iran was one of very few suppliers that had been letting the bankrupt Greeks buy oil on credit. South Korea and Japan are pleading for exemptions from the coming embargoes because they rely on Iranian oil. Economic ties between Russia and Iran are getting stronger every year.
Then there's China. Iran's energy resources are a matter of national security for China, as Iran already supplies no less than 15% of China's oil and natural gas. That makes Iran more important to China than Saudi Arabia is to the United States. Don't expect China to heed the US and EU sanctions much – China will find a way around the sanctions in order to protect two-way trade between the nations, which currently stands at $30 billion and is expected to hit $50 billion in 2015. In fact, China will probably gain from the US and EU sanctions on Iran, as it will be able to buy oil and gas from Iran at depressed prices.
So Iran will continue to have friends, and those friends will continue to buy its oil. More importantly, you can bet they won't be paying for that oil with US dollars. Rumors are swirling that India and Iran are at the negotiating table right now, hammering out a deal to trade oil for gold, supported by a few rupees and some yen. Iran is already dumping the dollar in its trade with Russia in favor of rials and rubles. India is already using the yuan with China; China and Russia have been trading in rubles and yuan for more than a year; Japan and China are moving towards transactions in yen and yuan.
And all those energy trades between Iran and China? That will be settled in gold, yuan, and rial. With the Europeans out of the mix, in short order none of Iran's 2.4 million barrels of oil a day will be traded in petrodollars.
With all this knowledge in hand, it starts to seem pretty reasonable that the real reason tensions are mounting in the Persian Gulf is because the United States is desperate to torpedo this movement away from petrodollars. The shift is being spearheaded by Iran and backed by India, China, and Russia. That is undoubtedly enough to make Washington anxious enough to seek out an excuse to topple the regime in Iran.
Speaking of that search for an excuse, this is interesting. A team of International Atomic Energy Agency (IAEA) inspectors just visited Iran. The IAEA is supervising all things nuclear in Iran, and it was an IAEA report in November warning that the country was progressing in its ability to make weapons that sparked this latest round of international condemnation against the supposedly near-nuclear state. But after their latest visit, the IAEA's inspectors reported no signs of bomb making. Oh, and if keeping the world safe from rogue states with nuclear capabilities were the sole motive, why have North Korea and Pakistan been given a pass?
There is another consideration to keep in mind, one that is very important when it comes to making some investment decisions based on this situation: Russia, India, and China – three members of the rising economic powerhouse group known as the BRICs (which also includes Brazil) – are allied with Iran and are major gold producers. If petrodollars go out of vogue and trading in other currencies gets too complicated, they will tap their gold storehouses to keep the crude flowing. Gold always has and always will be the fallback currency and, as mentioned before, when currency relationships start to change and valuations become hard to predict, trading in gold is a tried and true failsafe.
2012 might end up being most famous as the year in which the world defected from the US dollar as the global currency of choice. Imagine the rest of the world doing the math and, little by little, beginning to do business in their own currencies and investing ever less of their surpluses in US Treasuries. It constitutes nothing less than a slow but sure decimation of the dollar.
That may not be a bad thing for the United States. The country's gargantuan debts can never be repaid as long as the dollar maintains anything close to its current valuation. Given the state of the country, all that's really left supporting the value in the dollar is its global reserve currency status. If that goes and the dollar slides, maybe the US will be able to repay its debts and start fresh. That new start would come without the privileges and ingrained subsidies to which Americans are so accustomed, but it's amazing that the petrodollar system has lasted this long. It was only a matter of time before something would break it down.
Finally, the big question: How can one profit from this evolving situation? Playing with currencies is always very risky and, with the global game set to shift to significantly, it would require a lot of analysis and a fair bit of luck. The much more reliable way to play the game is through gold. Gold is the only currency backed by a physical commodity; and it is always where investors hide from a currency storm. The basic conclusion is that a slow demise of the petrodollar system is bullish for gold and very bearish for the US dollar.


MAKE VIRAL***USS Enterprise False Flag!

Saturday, January 21, 2012











春節到親友家中拜年,最怕就是被長輩問到這些尷尬問題,近日,中國互聯網流傳一份《親戚聚會發 言大綱列表》,表中羅列出長輩們愛問的毒舌問題,還有網民總結出十大過年見面的禁忌問題,而對於男性網民來說,被問“有沒有買房”是致命傷。這張名為《親 戚聚會發言大綱列表》的制圖以“不認識我了嗎?小時候抱過你呢”開始,列舉了親戚見面可能提起的第一句話。

來一回絕地反擊網民“卡多呢”厭倦了每年都被這樣盤問,今年,他準備來一回絕地反擊,總結三種 方法來應對親戚們的嘮叨:“一、被念到時可以假裝蒙娜麗莎,但實際上認真貫徹左耳進右耳出原則。二、說理推卸,以“有沒有對象”這一問題為例,藉口有幾 種:“其實有順眼的了,不過時間不久,等時機成熟了一定帶來給您過目”、“不是我的問題,是我周圍的男人們太噁心”……三、鴕鳥式逃避,減少回家次數。”

SOPA and PIPA postponed indefinitely after protests

NEW YORK (CNNMoney) -- When the entire Internet gets angry, Congress takes notice. Both the House and the Senate on Friday backed away from a pair of controversial anti-piracy bills, tossing them into limbo and throwing doubt on their future viability.
The Senate had been scheduled to hold a proceedural vote next week on whether to take up the Protect IP Act (PIPA) -- a bill that once had widespread, bipartisan support. But on Friday, Senate Majority Leader Harry Reid said he was postponing the vote "in light of recent events."
Meanwhile, the House of Representatives said it is putting on hold its version of the bill, the Stop Online Piracy Act (SOPA). The House will "postpone consideration of the legislation until there is wider agreement on a solution," House Judiciary Committee Chairman Lamar Smith said in a written statement.
The moves came after several lawmakers flipped their position on the bills in the wake of widespread online and offline protests against them.
Tech companies, who largely oppose the bills, mobilized their users this week to contact representatives and speak out against the legislation. Sites including Wikipedia and Reddit launched site blackouts on January 18, while protesters hit the streets in New York, San Francisco, Seattle and Washington, D.C. Google (GOOG, Fortune 500) drew more than 7 million signatures for an anti-SOPA and PIPA petition that it linked on its highly trafficked homepage.
The tide turned soon after the protest, and both bills lost some of their Congressional backers.
"I have heard from the critics and I take seriously their concerns," Smith said Friday in a prepared statement. "It is clear that we need to revisit the approach on how best to address the problem of foreign thieves."
PIPA and SOPA aim to crack down on copyright infringement by restricting access and services to sites that host or facilitate the trading of pirated content. (Click here for our explainer: What SOPA is and why it matters.)
Backed by media companies, including CNNMoney parent Time Warner, the bills initially seemed on the fast track to passage. PIPA was approved unanimously by a Senate committee in May.
But when the House took up its own version of the bill, SOPA, tech companies began lobbying heavily in opposition -- an effort that culminated in this week's demonstrations.
Reid hinted that PIPA may not be dead yet, saying: "There is no reason that the legitimate issues raised by many about this bill cannot be resolved."
Meanwhile, alternative legislation has also been proposed. A bipartisan group of senators introduced the Online Protection and Enforcement of Digital Trade Act (OPEN) on January 18 -- the same day as the Wikipedia site blackout.
Among other differences, OPEN offers more protection than SOPA would to sites accused of hosting pirated content. It also beefs up the enforcement process. It would allow digital rights holders to bring cases before the U.S. International Trade Commission (ITC), an independent agency that handles trademark infringement and other trade disputes.
California Republican Darrell Issa introduced OPEN in the House, and Oregon Democrat Ron Wyden introduced the Senate version. OPEN's backers had posted the draft legislation online and invited the Web community to comment on and revise the proposal.
Soon after SOPA and PIPA were tabled, Issa released a statement cheering "supporters of the Internet" for their protest efforts.
He wrote: "Over the last two months, the intense popular effort to stop SOPA and PIPA has defeated an effort that once looked unstoppable but lacked a fundamental understanding of how Internet technologies work."

Ron Paul This Speech Gave Me Chills

URGENT - FOX News Caught Using Fake Video Of Riots HA, HA!

Destruction Can't Create Jobs: The Broken Window Fallacy

No, Rick Santorum, We Don't Need a Little Inflation

How RON PAUL Would Fix the Economy Don't Bailout Banks No Corporate Welfare

Obama Pushes Hard to Protect Big Banks from Fraud Prosecutions ... But We Can Stop Him

As we've noted for years, the entire strategy of Washington towards the economy is to cover up the fraud which caused the financial crisis ... even though prosecuting fraud and re-establishing the rule of law is the only way to get out of this depression.

One major front in Washington's cover-up effort has been to settle fraud cases with the big banks for pennies on the dollar. This is a backdoor bailout for the banks, encourages them to commit more fraud, and fails to plug the basic holes in the economy which are preventing a recovery.

Why are we bringing this up now?

Because Obama is making a giant push to pressure the states attorneys general to settle all of their mortgage-related fraud claims against the banks for pennies on the dollar.
Yves Smith - who has an ear to the ground on this - warns that a settlement which hurts consumers and the economy will happen very quickly if people don't raise a ruckus.

Smith is asking people to call their state attorney general (not their elected reps) to oppose the settlement:
Here are some of the reasons to oppose a settlement:

1. There have been virtually no investigations, and the Administration has engaged in cover-ups rather than trying to get to the bottom of the mortgage mess

2. The big argument made in favor of the deal, that it will help borrowers, is patently false. Remember, Countrywide entered into a deal with attorney generals just like this, where they agreed to do mods in return for a settlement on abuses. Guess what? They didn’t do the mods. To add insult to injury, they actually abused homeowners who should have gotten mods. Nevada AG is suing Countrywide now over its failure to comply with the terms of its settlement. And even if some mods miraculously did get done, the settlement is designed to have banks hit a dollar amount. That means they will focus on the biggest loans, which means any relief will go to a comparatively small number of people in (originally) big ticket houses.

3. The Administration has only one chance to get this right. Now you might argue that Team Obama has no intention of getting the mortgage mess right, but the tectonic plates suddenly seem to be moving in elite circles. The Fed realizes that housing is a BIG problem and has even started making noise about it. Yet Obama is moving forward with a plan cooked up in late 2010 that is completely out of whack with the urgency and severity of the problem. Note that this settlement will NOT stop private actions, such as borrowers fighting foreclosures. And we will continue to banks refuse to take losses and drag out foreclosures to maximize fees. That will lead to continued pressure on housing prices in many markets as buyers stay on the sidelines, fearful of buying before a large shadow inventory clears.

Leaving the AGs free to investigate and increase the pressure that is already building up in the system is the best chance we have to deal with widespread fraud.

The attorneys general really need your support. It helps them to hear that their constituents appreciate them standing up to the banks and the Obama administration.

PLEASE call them TODAY. Here is a list of phone numbers. If you can’t get through, send an e-mail.

Please also sign this petition from Campaign for America’s Future (it has some talking points if you need them for the AG calls). Note you can opt out of being put on their mailing list (I know that has been a sore point with some past petitions). I know it is futile to ping Obama, but they will collect the number of people who sign, and that will in turn bolster the dissident AGs.

Please call today. Unlike Congresscritters, who get a lot of constituent mail and phone calls, AGs get much less in the way of messages from state citizens, so your calls will make a difference.
Smith tells me that it is especially important for residents of California,  Virgina,  Texas, Florida and South Carolina to call their attorneys general and tell them that they need to stand firm in the face of pressure from Obama.

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Government Lawsuit Says Bank Of America Mortgage Fraud Even WORSE Than Countrywide

This story (from Sep. 2011) has never been published here.  I've been saving it for the right time, and news earlier this week that BofA CEO Brian Moynihan has been named as a defendant in a federal foreclosure lawsuit, makes now a pretty good time for a BofA pile-on.
By Al Lewis
Federal lawsuit says even Angelo Mozilo was shocked...
NEW YORK (MarketWatch) — Bank of America Corp.’s story has long been that Countrywide did it. But a lawsuit filed last week by the Federal Housing Finance Agency tells a different tale.
The lawsuit claims that when former Countrywide Financial Corp. CEO Angelo Mozilo marveled at the dizzying recklessness of the mortgage-lending business, he was in fact looking at Charlotte-based Bank of America.
This is perhaps one of the most insulting claims ever leveled in a mortgage-fraud lawsuit.  Bank of America would probably feel outraged if it weren’t so overwhelmed with its nauseating plunge on the stock market.  Mozilo has easily eclipsed Enron’s brass as one of the most-hated executives of all time. He has become the poster child for the fraudulent mortgage-lending practices that torpedoed the U.S. banking system and the entire global economy.
But he was smart enough to sell Countrywide as it nearly collapsed in January 2008. And Bank of America was dumb enough to buy it for $4.1 billion.
Since then, Bank of America has been blaming Countrywide for a litany of problems.
You’ve heard the allegations before: These banks sold billions worth of mortgage-backed securities while lying about the thousands of funny little mortgages behind them.
Since Bank of America bought Countrywide, it will indeed pay for things Countrywide did. But it will pay for things it did, too.
The government is suing Bank of America for Countrywide, and it is suing Bank of America, separately, for things it did without Countrywide.
Bank of America issued a statement in response to the lawsuits, essentially saying Fannie and Freddie knew the risks of the securities they bought, and that the losses are due to a downturn in the housing market. But the United States of America would rather blame the Bank of America.
BOA was one of the most aggressive competitors in the mortgage-origination market,” the government’s lawsuit reads.
And that’s where it hints that Bank of America was even worse than Countrywide:
“Even the top executives of Countrywide Financial Corp., the notorious mortgage lender ...complained to each other...that BOA’s appetite for risky products was greater than that of Countrywide,” the lawsuit reads.
“In a June 13, 2005, email, Countrywide CEO Angelo Mozilo wrote to President and COO David Sambol: “This is the third deal in the last 10 days that BOA has offered that is impossible to beat. In fact, the other two were substantially worse than this one. It appears to me that BOA is making an aggressive move into mortgages once again.’”
Imagine that. Bank of America doing mortgage deals that even Mozilo found shocking.
Read the whole thing at Marketwatch...

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Southgate pawnbroker says woman offered herself, daughter to pay debt

A mother offered up herself and her daughter this week for sex to pay off a debt at a Southgate pawnshop, the owner of the shop said Wednesday.
Al Hassan, a co-owner of DaSilva's Pawn and Exchange on Eureka, said the mother, believed to be in her mid-30s, came into the shop Monday night and offered him sex with her and her daughter, who he estimated to be 9-11 years old, if he agreed not to sell a laptop she pawned a few weeks ago for $120.
A $25 payment was due to keep the laptop from being sold, Hassan said.
Hassan said he quickly notified police and reported the incident to Children's Protective Services.
Southgate police confirmed they are looking into the allegations.
"It's still under investigation," said Lt. Kasper Ohannasian.
David Akerly, spokesman for the state Department of Human Services, said confidentiality laws prevent the state from commenting on individual cases, and he couldn't confirm that the state is investigating.
WDIV-TV (Channel 4) said it interviewed the mother at her home in Monroe, and she said the offer was meant as a joke.
"I wasn't serious," said the mother. "I don't want to be considered a bad mother just because I needed some money for gas and groceries."
Hassan said he believes the woman may have a drug habit that drove her to desperation.
"I felt disgusted," Hassan said of his reaction to her offer. "I was sick."

HELL FREEZES OVER - Bank Of America CEO Moynihan Named As Defendant In Federal Foreclosure Lawsuit

PHOTO - Brian Moynihan attempts a smile.
Foreclosure Fightclub attorney George Babcock strikes again.  The devil is starting to shiver.
Hat tip to Foreclosure Hamlet for their coverage.
BAC CEO Named as Defendant in Federal Foreclosure Fraud Lawsuit
Compare these two assignments:
Document 1 Bogus Assignments of Mortgage
And Bank of America's useless response:
Bank of America Gratuitous Letter