Wednesday, March 13, 2013

UK on track for triple dip - NIESR

Britain is on track for a triple dip recession, one of the nation’s leading forecasters has signalled, as new figures on the UK’s manufacturing industry dealt a blow to recovery hopes and sent sterling crashing to a fresh two-and-a-half year low.

UK on track for triple dip - NIESR
The economy shrank by 0.1pc in the three months to February, NIESR estimated, which followed a 0.3pc decline in the final quarter of last year Photo: Bloomberg News
The economy shrank by 0.1pc in the three months to February, the National Institute of Economic and Social Research (NIESR) estimated, which followed a 0.3pc decline in the final quarter of last year.
If the economy continues to contract for the three months to the end of March, the UK will officially be in its third recession since the financial crisis of 2008.
NIESR’s monthly GDP estimate was a slight improvement on the three months to January, which showed the economy declined by 0.2pc, but it said the data suggested that “the economy continued to flat-line in the first two months of this year”.
The bleak outlook followed official figures from the Office for National Statistics (ONS) showing that activity in the production industries, including manufacturing, shrank far more sharply than expected in January.
Separate ONS numbers showing a slight improvement in the balance of trade for the month provided little solace from the 1.2pc decline in industrial production between December and January. It was the weakest reading since September. Economists had expected expansion of 0.1pc.
“This is the penultimate nail in the coffin in terms of triple-dip – it’s pretty much game over now,” said Alan Clarke, economist at Scotiabank. “Unless we have a stellar performance from the services sector, we’re almost certainly in a triple dip.”

The pound fell to $1.4832 at one point, the lowest level since June 2010 (Graph: Bloomberg)
Anxiety that Britain’s economy will slide back into recession is hurting market confidence in the UK, forcing down the pound and pushing the cost of insuring government debt up at the fastest pace of all major countries, according to Bloomberg data.
Credit-default swaps insuring gilts have risen 76pc from a four-year low in November of 26 basis points. That marked the biggest rise among 67 governments tracked by Bloomberg. It is now more expensive to insure UK debt than that of countries including Finland, Denmark, Germany and Austria, with rising swap prices signalling a deterioration in investor sentiment.
Just last year, Britain’s debt was considered safest among the biggest European borrowers amid concern the eurozone would fracture and the cost to Germany of supporting weaker members would surge.
The pound also fell sharply against the dollar, touching $1.4832 at one point, the lowest level since June 2010.
The decline in UK industrial production was once again caused largely by North Sea oil platform shutdowns, but the UK’s manufacturing sector also disappointed. Following a 1.6pc increase in December, manufacturing – which remains the country’s largest single industry – declined by 1.5pc.
The trade figures were a little better than hoped, with the deficit in goods and services in January shrinking slightly from £2.8bn in December to £2.4bn in January. The goods deficit, which some had feared would widen from £8.9bn to £9bn, shrank to £8.2bn.
The improvement was not driven by an increase in exports over the latest three months, but by a 2pc decline in imports. In fact, non-oil exports fell 5.4pc in the month, the worst decline since April 2012.
Economists said the weak data could convince the Bank of England to restart quantitative easing, or otherwise loosen policy.
The Chancellor is considering plans to change the Bank’s remit in the Budget to give it a more explicit growth target, with a team in the Treasury reviewing the current mandate. Talks on whether to alter the 2pc inflation target are reported to have been held last week between incoming Governor Mark Carney and Sir Nicholas Macpherson, permanent secretary to the Treasury.
The Treasury confirmed they met in Ottawa.
The Treasury is also considering plans to beef up the Bank’s Funding for Lending cheap credit scheme to improve its impact on small businesses.

Jim Willie: The Collapse is at our Doorstep

Jim Willie collapseSilver Doctors
The Golden Jackass Jim Willie sat down with The Doc this weekend for the second part of an extraordinary interview regarding gold, silver, and what Willie believes will soon be a massive European banking collapse.
Willie states that a global financial collapse is now at our doorstep, and that the endgame will be triggered by a small-medium sized bank failure in Europe.  
Willie informs SD readers that the coming European bust will ignite a global Gold rush as the only remaining safe haven, will see an end to the reserve status of the USdollar, and will result in the arrival of the Gold Trade Finance platforms.
Willie also discusses The Fed’s futile attempts to re-inflate the housing bubble, and the series of climax events that will bring a breath-taking global financial collapse to our doorstep!

The Golden Jackass states that the coming collapse will devastate everyone in the West except those who are bold enough and brave enough to buy gold & silver NOW!
Jim Willie’s second part of an explosive, 2-part interview with The Doc is below:
The Doc began by asking the Golden Jackass what will most likely be the trigger event for a complete systemic collapse:
I don’t think we’re going to see a default as a trigger event in gold or silver. I didn’t say we won’t see a gold and silver default, I said that it won’t be the trigger. There are just too many deep sources for gold that the central banks have access to. I refer to Basel Switzerland, the Roman catacombs, and the BOE, I think they’re pretty close to the bottom of their gold barrel, but they have big powerful friends in Rome and Basel Switzerland.
The trigger is not even going to come from within the US, because it’s just so controlled- the markets are being controlled from multiple different centers, in particular the Federal Reserve and the Treasury Dept, JPM, Goldman Sachs.
It’s just so corrupt to the core, and we’re seeing a blossoming of the fascist business model and the corruption that’s accepted.
Attention should be drawn to Europe. Look at some of the most recent events that are really quite staggering.
The Italian elections kicked out the GSax preppy Mario Monti. I’m surprised that he’s not being thrown off a palace balcony. It’s directly in response to hikes that Monti imposed on property tax to finance the bankers! The Italian people have a much more effective political system than the US!
Italy actually has elected a comedian! This is like electing John Belushi to form a coalition government! Mario Monti is on the way out. What does that mean?
The defense of their dead banks with liquidity lines and property tax hikes will end in the near future!
In Spain you have new high level financial corruption events that have paralyzed the nation at a time when they’ve already seen a string of big financial firm failures!
This at a time where they have 25% unemployment. I think that the likelihood of violence on the streets is greater in Spain than in any other country.
Spain’s bank insolvency and wretched unemployment is causing tremendous distress, and there will be a breaking point there.
Then in France you have Hollande, the leader of the socialist clowns has raised the highest tax brackets to 90%. The resulting capital flight to Scandinavia is astounding, leaving the nation extremely vulnerable.
Then you have the German economic slowdown which is really capturing some attention, which will remove ability and patience of bank rescues.
Then you have the London banks which are joined by French banks in broad deep exposure to Southern Europe. They’ve set themselves up to have their heads cut off.
Recall that the Draghi solutions like LTRO were recently insulted by debt downgrades, which was unprecedented.
Then you have the USFed, which is the only buyer of USTBonds, and the Euro Central Bank as the only buyer of PIIGS Govt Bonds.
Here is a note as to the stress in the system: the European banking system received $1.2 trillion in Dollar Swap funds from the NY Fed in January alone to prop up the ECB banking system.
European banks are collectively much larger than the US banks, but are in suspended animation while the US banks are being supported by narcotics money laundering.
A big European bust is coming. When the European bust events occur, the mad scramble for safety will be on, and they’re not going to be looking for Switzerland any longer because of their Euro peg. A massive rise in the European gold price is coming and it will be staggering, shocking and not reversible. It will ignite a global Gold rush, a massive short covering rally, and powerful 30% to 50% rise in the gold price will come in response to the European collapse.
Following that will come the arrival of the Gold Trade Finance platforms. Gold settlement for trade across the world- primarily though coming out of the East.
In other words, trade involving two parties not involving the US, one of them being an Eastern nation, and they will settle not in dollars anymore, they will settle in gold, and they will have some help from their friends in Turkey.
We’re going to see an end to the USDollar reserve status following these events, and the funeral will have a speech given by the Saudis to bring an end to the Petro-Dollar itself.
You have to look to Europe and not to the US, the US is a joke in regards to crisis, management, propaganda, the ESF, narcotics money laundering, sponsored fraud, it’s just unbelievable what’s going on in the US, it’s not going to be the trigger, the trigger will be Europe.
We have 15 to 20 potential sites to force the breakdown. It’s not just one or two. Every couple months there are a few more potential areas to cause the breakdown. That’s very, very dangerous, and new. We didn’t see that 3-5 years ago. Back in 07 it was really just sub-prime. We have about 12 different areas now which are just as dangerous as sub-prime, and both of them are in Europe.
With QE4 and the recent return of NINJA loans as the Fed attempts to re-inflate the housing bubble, The Doc asked Willie whether the Fed would be able to kick the can down the road one more time with one last bubble:
They have 15-20 fingers and toes, but there are just too many different areas that they need to plug.
This real estate bubble is a joke.  There’s no new bubble coming or even on the horizon.  What we’ve got is the US government has sponsored a whole new round of sub-prime mortgages.  Expect instead of the big banks underwriting them, it’s the Federal government.  We have not seen a rebound in demand for housing, even though the 30 year mortgage rate is under 4% and has been for quite a few months.
What’s not shown in the press is that there’s still 10 million homes that are sitting on the bank balance sheets.  They’re called REO’s, and they’re selling their REO’s or short sales, which ARE NOT INCLUDED IN THE CASE SHILLER INDEX! 
It’s a parallel of the discouraged workers no longer included in unemployment!  They’re bringing labor market calculations to the housing market.  They’re not going to revive the housing bubble for a simple reason- there’s not widespread finance available, it’s exclusively coming out of the FHA.  The other reason is that people have a great distrust for buying homes after they saw so many people foreclosed on.  Another reason is that the people don’t have brisk income.
The factors are not there, it’s kind of a lunatic claim to state that the housing market is going to be re-bubbalized.  Not even close, it’s stuck in a depression!
The Doc asked Jim whether we face a lost two decades like the Japanese, or what type of collapse we face in the US:
I said this back when Lehman Brothers fell in the autumn of 2008.  The US is on a path that cannot escape systemic failure and total dependence on the printing press to cover its debt and for a debt default of the US government debt, which will come in the form of a global conference to organize and co-ordinate the debt write down.  There will be US military outside the room to make sure everyone complies.
If the US goes ahead with sequester cuts, they’re talking about $4 trillion over 10 years.  I cannot emphasize how small that is.  But let’s go through some of the points why I believe the collapse is at our doorstep:
The collapse is happening now- it’s no longer ultra-slow motion like 2 years ago.   It’s a new event every few days or weeks.  The pace is quickening.
The extreme nature of current events is alarming.  Just in the last few months:
The US Fed announces every month their extension of 0% forever (denigrating their own exit Strategy talk).
$1.2 trillion was doled out by the USFed to European banks in January alone!
We have the Germans demanding repatriation of their official gold account (Allocated Accounts).
We have the Italians electing a comedian like John Belushi to halt the property tax hikes that bail out banks.  This is an insult to their entire political system which experienced that Mario Monti appointment without an election.
We have the London banks recently sponsoring a Chinese Yuan Swap Facility, cow-towing to Asia.  This is unprecedented!  New York will not do such a thing, but London did, which means that London and NY might be at odds!
We have an attack announced on Mali in North Africa to wrest gold & uranium timed when the  Germans asked for repayment of their gold reserves.  The quantities really fit.  There was a suspicious comment by the French and British saying it will be repaid in 7 years.
300 tons over 7 years is approximately what Mali produces in gold that will cover almost exactly the German repayment.  That was organized by France and the US.
We have the shutdown of the gigantic Mongolian copper & gold mine by Rio Tinto which is an example of resource nationalism.
We have raids larger and bolder of the GLD inventory that prevents a COMEX default and will produce a bigger price discount vs. the spot for GLD shares.  I think it will go down towards a 20% discount, which will cause alot of problems.
We have the USFed preparing for QE5 (or rather QE187, as in QE to Infinity).
We have events like the major central banks losing credibility while engaging in open currency war.  The franchise system of central banks is being questioned.  They’re in battle with each other.
We have the US facing a fiscal cliff, which forces a quantum leap in job cuts (recession alert).
We have the Japanese ratcheting up the competitive currency devaluations (only USTBond buyer).
We have the Swiss managing their Euro-Franc peg, but suffering losses in Japanese & British bonds.
We have the Russians hosting a G-20 Meeting to coordinate the alternative to US$-based trade.
We have the emergence of Turkey and soon India as gold trade finance intermediaries.  They’re going to supply 1 of 2 parties engaged in trade with gold so they can make the settlement of the trade.
We have the Iranian sanctions coming to a conclusion in US acquiescence.  The US is surrendering to the Iranians!
All these events have occurred just since the new year began less than two months ago!  The pace of extreme events is quickening!
Extreme events have become the norm, putting tremendous additional stress on the system which the boys are trying to manage.  They don’t have enough people, enough resources, enough channels, and they don’t have enough brains to do it.
The managed system cannot succeed, it’s too complex.  They are attempting to work towards a system of total system management, and it’s just not going to work.
A series of climax events is coming very soon.  The changes will be rapid and breath-taking.
Vast wealth has been moving East the past 3-4 years, and with it great power.
Look for some seemingly minor bank failure to cause a ripple effect of deeper damage.
It’s going to involve larger banks tied with commitments such as counter-party contracts or intermediary supply functions, and things are just going to start wrecking.
I think vast wealth is going to be lost in the US and the West, except by gold and silver owners.
Owning gold and silver will become harder to do because the rules are becoming stricter.
Those who have set themselves up in the last few years are going to be the big, big winners, and the ones who are bold enough and brave enough to do it now are going to be glad for their actions.
I have a family member who refused my advice three years ago, and now that family member is facing the conversion of her very large privately managed IRA pension fund into these new special Treasury bonds. That’s going to cause a real firestorm by the public, and they’re going to wish that they had converted their IRA’s into a gold account.
Readers can find out more about Jim Willie’s Hat Trick Letter and subscription services at the
If you missed the first part of Jim Willie’s interview with The Doc, it is available here:

Rick Santelli Gazes Into The Federal Reserve's Crystal Ball


Iceland Saves Economy, Jails Bankers | Tired of Wars & Being Lied To

Bedroom tax shock: Disabled boy may have to go into CARE despite David Cameron's pledge

Logan is severely autistic but his mum has been told she must pay extra £60 a week

Logan's condition means he is susceptible to injury
Logan's condition means he is susceptible to injury
You might think the mum of this severely disabled 11-year-old boy would be relieved to be told by the Prime Minister that she would not be affected by the bedroom tax, the Sunday People reports.
But when Fiona Oxley-Goody listened to David Cameron saying exactly that in the House of Commons, she was astonished and simply could not believe what she was hearing.
Fiona has received a letter ordering her to pay £60 extra a month for the home which has been specially-adapted so her son Logan can receive round-the-clock care. That £60 is simply a price she cannot afford.
And if she cannot find the money, Logan may have to be parted from her and put into full-time residential care.
Yet on Wednesday David Cameron insisted families like Logan’s would be exempt from the cruel charge.
To the cheers of Tory MPs, he announced: “Anyone with severely disabled children is exempt from the spare room subsidy.”
Fiona and Logan Oxley Goody
Fiona and her son Logan
But the truth is, families with disabled children ARE among the 660,000 social housing tenants to be hit with bedroom tax bills of £14 a week on April 1.
The best they can hope for is help from a £30 million hardship fund.
But the National Housing Federation says that’s only £2.51 a week if it was shared out among the 230,000 disabled people who need it.
Fiona said: “Who is the Prime Minister listening to? Who is advising him? It’s frightening that the man who is supposed to be in charge has the wrong information.”
Logan, who has severe autism, lives with Fiona in a three-bedroom house, specially kitted out to meet his needs.
They use their tiny third bedroom so a carer can come and stay three times a week, bringing much needed respite to Fiona and enabling her to be able to work.
Disabled adults who need a room for an overnight carer would be exempt. But as Logan is a child, there is no exemption as the parent is considered the carer.
Fiona, of Rettendon, near Chelsmford, Essex, received the letter from her housing association before Christmas, bringing the news her housing benefit would be cut because she is “under-occupying”.
Fiona has to monitor Logan using CCTV
She says she is already “hanging on by her fingertips” but will have to find an extra £60 a month.
The alternative is to downsize, abandoning her specially-adapted home.
But she fears if she has to do that, it may force her to take the heartbreaking decision to put her son into full-time residential care.
And, apart from the upset, it would cost the taxpayer dearly – upto £4,000 a week, depending on the level of care.
Fiona, 44, said: “I can’t risk losing my baby. There’s no way I’m going to move. I’ll fight this whatever it takes.
"It’s unjust and not thought out. It has been dreamed up in an office and put through without them realising the impact.
"But this is people’s lives they are playing with.”
Logan is prone to self-harm and needs to be monitored 24 hours a day.
If he’s left alone he hurts himself, often biting his flesh to the bone.
Fiona had to leave her job as a sales manager to look after her son.
Sleep deprivation meant she could no longer work full-time and now manages 16 hours a week, working in Logan’s school as a support worker, advising other families on caring for disabled youngsters.
Clearly the third bedroom is essential for the carer to stay in.
It’s one reason Fiona got the three-bed home and applied for a Disability Facilities Grant to pay for adaptations for Logan.
They moved to the housing association property in 2006 and Fiona has spent years making it right.
Fiona Oxley Goody
Adapted: Fiona has spent years changing her house to meet Logan's needs
 Doors have been adapted, and Logan’s bedroom is fully padded so he can’t hurt himself. There are CCTV cameras on the landings and in Logan’s room.
Using savings and grants, Fiona has spent around £15,000 on their semi-detached home.
But she may have to pay back grants if she moves because she has been living there for less than ten years.
As well as the financial cost, Fiona is worried about being forced to move from a community that helps her care for Logan.
She added: “I’ve struck gold with my neighbours. They have been fantastic. You can’t put a price on things like that.”
David Orr, chief executive of the National Housing Federation, said: “This perverse tax is doing exactly what the Government promised they wouldn’t – hitting the most vulnerable people.
“The bedroom tax means thousands of disabled people will have no choice but to cut back further on food and other expenses to stay in their own homes.
"The Government must repeal this ill-conceived policy.”
Labour Leader Ed Miliband said: “The PM doesn’t understand his own policy. It’s shameful not to understand the impact.”
Mr Cameron made his exemption claim despite Work and Pensions Secretary Iain Duncan Smith fighting legal action by disabled bedroom tax victims under human rights laws.
Ten test cases will be heard at the High Court in May. Lawyers claim the disabled are being discriminated against.
Ugo Hayter of law firm Leigh Day said: “We are very concerned as the Prime Minister’s understanding of how the Government’s own policy operates is not, in our view, accurate.”

Bill Moyers Essay: 'Cronyism Blowout At Goldman Sachs'

Excellent clip.  Blankfein at the 2:45 mark.
Bill Moyers explains how the fiscal cliff deal gives tens of billions in tax breaks to banks and corporations (especially Goldman).  Even the Wall Street Journal called it a "crony capitalist blowout."
More details from Matt Stoller:
Eight Subsidies in the Fiscal Cliff Bill, From Goldman Sachs to Disney to NASCAR
Subsidies for Goldman Sachs Headquarters – Sec. 328 extends “tax exempt financing for York Liberty Zone,” which was a program to provide post-9/11 recovery funds.  Rather than going to small businesses affected, however, this was, according to Bloomberg, “little more than a subsidy for fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp.”
Michael Bloomberg himself actually thought the program was excessive, so that’s saying something.  According to David Cay Johnston, Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds.

Let's Stop Fooling Ourselves: Americans Can't Afford the Future

Unemployment, Taxes and Unfunded Retirement are Squeezing Each Generation

PHOTO OF THE DAY - Jamie Dimon Trickle Down

The Trickle Down...

Afternoon links.  25 stories.
Woman shot by police in Dorner manhunt says cops won’t pay taxes on replacement truck
Dollars For Doctors Mints A Millionaire - ProPublica
Food Distribution at European Red Cross at Highest Level Since World War
Climate Change Without Catastrophe: Interview With Anthony Watts
If Corporations Don’t Pay Taxes, Why Should You?
Gold Market Questions After Soros Sale - Bloomberg
Record 89,304,000 Americans 'Not in Labor Force'
SPLC Letter To DOJ & DHS: Patriot Groups Pose Domestic Terror Threat
We Need To Double Bank Capital Requirements - Bloomberg
Jamie Dimon Caught On Tape: 'That's Why I'm Richer Than You'...
Female Senator Gets 'Very Uncomfortable' Screening By TSA

Photo Break - The Dimon Blankfein Syndicate 

More Links
Snow triggers huge 100-car pile-up in Germany - Photos
Europe's Lost Generation - Telegraph
Neil Bush (Brother To Jeb & George) Invests In Singapore Firm - Bloomberg
Bernanke Provokes Mystery Over When Fed Will Exit
Study: Amount Of Cesium-137 Released Into Pacific From Fukushima Is 50X Estimate
DoD Plans to Use Preemptive Deadly Force on Hackers, Cyber Threats
Goldman Rigging the I.P.O. Game - NYTimes
Bankrupt 1990s Internet Toy Company (EToys) Still Thinks It Was Undervalued
Federal Reserve Beige Book March - Business Insider
Watch The Final Minute Of Rand Paul's Filibuster - YouTube
Shopping Habits of Austrians Vs. Keynesians at Duty Free Shops (Hilarious)
Fugitive Fund Manager Arrested Who Stuffed Underwear With Cash And Fled
Former Sen. Jon Kyl Joins Lobby Shop At Covington & Burling - The Washington Post

Photos by William Banzai7...

The Rothschilds and The International Banking Cartel

The Rothschilds and The International Banking Cartel

Got money to burn? Try the $500 cigars that are hand-rolled in 24-carat GOLD

  • The Black Tie is sold in hotels and casinos across Las Vegas
  • Individual cigar costs $500, while a box of 20 costs $4,800

  • There are plenty of ways to see $500 go up in smoke in Las Vegas, but just in case you thought Sin City needed one more, these cigars are just for you.
    Hand-rolled in 24-carat gold, the makers of the Black Tie say it is the only cigar of its kind. 
    London Cut claim their unique gold leaf cigar even produces golden ashes.
    Gold standard: The cigars are wrapped in edible 24 carat gold that even turn the ash gold
    Gold standard: The cigars are wrapped in edible 24 carat gold that even turn the ash gold
    And the ash will reach two or three inches in length before crumbling - triple the size of a properly rolled, good tobacco cigar.

    The high quality Dominican cigars are hand-rolled in Connecticut shade, before being coated in pure gold and are only available in selected hotels and casinos across Las Vegas.

    Quality cigars are still handmade by experienced cigar-rollers who can produce hundreds of very good, nearly identical, cigars per day.

    The rollers keep the tobacco moist, especially the wrapper, and use specially designed crescent-shaped knives to form the filler and wrapper leaves quickly and accurately.
    Luxury: Each cigar costs $500, though a box of 20 costs $4,800
    Luxury: Each cigar costs $500, though a box of 20 costs $4,800

    Five hundred dollars before it goes up in smoke: The Black Tie cigar promises ashes of two to three inches
    Five hundred dollars before it goes up in smoke: The Black Tie cigar promises ashes of two to three inches
    Once rolled, the cigars are stored in wooden forms as they dry, in which their uncapped ends are cut to a uniform size.

    With a price tag of $500 each, every Black Tie is accompanied with a custom cigar cutter, however those with very expensive taste can bag packs of 20 cigars for $4,800.

    Every Black Tie cigar is accompanied with a custom Black Tie cigar cutter and Black Glass Top Humidor.

    A Bad Week for Switzerland - Weekly Update

    It has not been a good week for Switzerland, a country that has unfortunately seen its strong traditions of privacy and independence steadily chipped away.
    Last week saw the criminal sentencing in the US of Bank Wegelin, Switzerland's oldest bank, founded in 1741. The sentencing marks one of the final chapters of the bank's 272 year history, which will have to shut down as a result of the case.
    Wegelin was the first foreign bank in history to be indicted for assisting US citizens to evade taxes, the first to plead guilty, and then the first to be sentenced. Wegelin incorrectly assumed that since it did not have any branches outside of Switzerland and complied with Swiss law, it was in the clear and out of the reach of the long arm of Uncle Sam.
    Wegelin was wrong.
    To illustrate the brazen overreach of this case, it helps to see it from another perspective.
    Imagine if China were the world's dominant financial power instead of the US, enabling it to enforce its will and trample over the sovereignty of everyone else. Imagine that there were a group of Chinese citizens who banked with BNY Mellon (Bank of New York is the oldest bank in the US), that the bank had no branches outside of the US, and that it complied with all US laws. Suppose that through their business with BNY Mellon this group of Chinese citizens were breaking some draconian financial laws in China, but again complied with all US laws. In reaction to this, imagine if the Chinese government were to then seize BNY Mellon's assets, criminally indict the bank and its employees, and effectively shutdown the oldest bank in the United States.
    How would Americans react in such a scenario?
    More importantly, how does the US government get away with such an obscene violation of another country's sovereignty?
    It's simple: they control the world's premier reserve currency. And as long as that is the case, they will continue to get away with similar measures.
    The chilling effects of the Wegelin saga will no doubt ripple throughout the world.
    If Switzerland's oldest bank, which had no foreign branches and abided by all local laws, is able to effectively be shut down by the US government, then who is safe from the whims of this desperate and out-of-control government?
    The Wegelin case will serve as a sobering example to business owners around the world of the consequences that can occur if you do not comply with the onerous and costly regulations concerning American clients.
    We should expect the trend of foreign financial institutions and businesses shunning American clients and partners to accelerate.
    The writing is on the wall.
    The window for Americans to get their savings out of dodge gets narrower each passing week. It seems the US government is just a hop, skip, and a jump away from imposing de facto or de jure capital controls.
    There are, fortunately, still options for you to take action now and internationalize before it's too late. That is exactly what International Man is here for.
    Sign-up here to join the International Man community for free, and get the IM Communiqué delivered to your inbox.

    Nick G.

    USDA: Number of Food Stamp Recipients Reached Record High in 2012

    The number of Americans on food stamps climbed to an all-time peak last year, according to data released by the Department of Agriculture.

    An average of 46.6 million people received the benefits each month last year, with the average number of households that received them totaling 22.3 million. In 2007, just 26.3 million people received food stamps.

    Among states, Texas topped the chart with an average of 4.04 million food stamp recipients per month. California came in second with 3.96 million, and Florida was third with 3.35 million.

    Editor's Note:
    'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

    It is to be expected that big states would have the most participants given that they have the largest populations.

    But on a percentage basis, Washington, D.C., with a total population of 617,996, had an average of 141,147 recipients, or 23 percent of its population, receiving benefits monthly. That compares with only 15.5 percent for Texas.

    Wyoming had the least number of participants, 34,347 out of a total population of 576,412, only 6 percent.

    In the Weekly Republican Address Saturday, Sen. Jeff Sessions, R-Ala., ripped the Agriculture Department for what he called its aggressive program to put more people on food stamps, Daily Caller reports.

    Sessions voiced disdain for the Agriculture Departments’ claim that “each $5 in new [food stamp] benefits generates almost twice that amount in economic activity for the community.”

    Sessions offered a response to that. “Isn’t a better goal to help more Americans find good-paying jobs, to have the pride and self-respect that comes from that?” he asked. “Isn’t this a superior form of compassion that has a more solid moral foundation?”

    But President Barack Obama won’t let that happen, Sessions says.

    The U.S. government spent a record $80.4 billion on food stamps in fiscal 2012 — up $2.7 billion from fiscal 2011.

    According to the Monthly Treasury Statement by the U.S. Treasury Department, the government spent $77.6 billion on food stamps — formally known as the Supplemental Nutrition Assistance Program (SNAP) — in fiscal 2011.

    Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

    © 2013 Moneynews. All rights reserved.

    Triple dip recession fears after slump in manufacturing and Treasury orders 'steroids' for stalled bank lending scheme

    Chancellor George Osborne, pictured in Downing Street today, was told by Labour to 'pull his head out of the sand'
    Chancellor George Osborne, pictured in Downing Street today, was told by Labour to 'pull his head out of the sand'
    George Osborne was today warned Britain could be heading for an unprecedented triple dip recession after new figures revealed a steep decline in manufacturing.
    The Chancellor was forced to defend his support for industry, after it emerged manufacturing output slid by 1.5 per cent during a snow-hit January.
    With just days before the Budget, it emerged the government’s flagship multibillion-pound Funding for Lending scheme – criticised for a lack of money flowing to businesses – is to be ‘put on steroids’ to speed up the flow of credit from banks.
    The latest gloomy figures from the Office for National Statistics (ONS) put further pressure on the pound, which declined to a new two-and-a-half-year low of 1.48 against the US dollar.
    At the end of 2012 the UK economy shrank by a worse-than-expected 0.3 per cent. If the first three months of 2013 sees another decline it will mean Britain is back in recession.
    Samuel Tombs, UK economist at consultancy Capital Economics, said: ‘January's figures do little to ease fears that GDP may still be contracting and that the economy could therefore be in a triple-dip recession.’
    Howard Archer, chief UK and European economist at IHS Global Insight, added: ‘The manufacturing figures are awful, even if it is possible that the snow had more of a negative impact than the ONS indicate, and are a real blow to first quarter growth prospects.’
    In the Commons, Mr Osborne came under fire from Labour over the ‘terrible figures’ revealing a decline in manufacturing.
    New figures from the Office for National Statistics show how manufacturing output in January dropped 1.5% year-on-year, after a rise in December
    New figures from the Office for National Statistics show how manufacturing output in January dropped 1.5% year-on-year, after a rise in December
    Catherine McKinnell, a shadow treasury minister, claimed Britain has ‘lost all confidence’ to invest.
    She told Mr Osborne to ‘pull his head out of the sand and see that his plan is clearly failing’.
    But Mr Osborne said the manufacturing sector halved as a share of the British economy when Labour was in office and the Government has taken steps to support manufacturers.
    He told MPs: ‘We've got to get behind the private sector, we've got to get behind business and that is exactly what this Government is doing.’
    The manufacturing decline, which followed signs of improvement in December, meant overall industrial output dropped by 1.2% in January, dashing City hopes for a better performance over the month.
    Other factors behind the fall included the closure of the Schiehallion oil platform, which drove a 4.3% slide in oil and gas output.
    The Chancellor insisted he was getting behind the private sector, and vowed to do more to boost manufacturing
    The Chancellor insisted he was getting behind the private sector, and vowed to do more to boost manufacturing
    While it is still possible that the services sector could rescue the UK economy in this quarter, the figures increase the pressure on the Bank of England to boost stimulus measures next month.
    Lee Hopley, chief economist at EEF, the manufacturers' organisation, said: ‘The main takeaway from the data so far this year is that much of manufacturing is facing an uphill challenge to grow in a difficult global demand environment.’
    Downing Street insisted there would be no change of strategy. David Cameron’s official spokesman said the government was ‘committed to sticking to the course’ and claimed: We are beginning to see signs is working.’
    However, it also emerged today that the government’s Funding for Lending is to be bolstered in an attempt to get force banks to lend.
    Efforts will be directed efforts at small businesses rather than mortgages as it has so far offered little help to firms.
    Deputy Prime Minister Nick Clegg is said to want to put the FLS ‘on steroids’ after figures last week revealed that net lending in the quarter to December fell by £2.4 billion on the previous three months, according to the Financial Times.
    It is understood the Government is considering splitting the scheme into two, as banks that are currently shrinking their legacy mortgage books are not able to qualify for the cheapest rates, which is holding back improvements in business lending.

    Fears of triple-dip recession in France as motor industry sales slump

    French industrial production dropped by 1.2% in January as carmakers Peugeot Citroen and Renault reported lower sales

    New Renault Clios on display during the press day at the Paris Auto Show.
    Renault has suffered a sharp fall in sales over the last year and has cut production at many plants. Photograph Christophe Ena/AP
    France appears to be heading for a triple dip recession amid concerns that political deadlock in Italy could drag the eurozone back into crisis. French industrial production dropped by 1.2% in January despite a strong rebound in German imports that some analysts believed might rescue some of its neighbours.
    Official figures from Paris showed that a longstanding slump in car buying across much of the eurozone has undermined efforts to maintain a 0.9% rise in December. Car-making dropped by 13.5% in January after a revised 8.8% increase in December. Peugeot Citroen and Renault have suffered a steep fall in sales during the last year and cut production at many of their factories.
    Analysts said the drop in overall output was a further sign that France's €2tn (£1.7tn) economy could slip into recession after contracting 0.3% in the final quarter of 2012 and following a series of weak data this year.
    Italy has proved a particular graveyard for car sellers, prompting the boss of Fiat to say production in Turin may stop if the slide continues for much longer. Fiat, which owns Chrysler, has expanded production in the US while restricting output in the eurozone.
    Rome was battling to maintain some stability after figures showed its recession is likely to run into 2014 even with a resolution to the electoral stalemate. One analyst said Italy posed a "near and present danger" for the eurozone.
    Gary Jenkins, of Swordfish Research, said the most likely outcome from Italy's inconclusive election would be a technocratic government that pledged to maintain reforms, but a coalition could refuse to abide by tough rules set by the European Central Bank, prompting a clash in Brussels. Mario Draghi, president of the ECB, said last week that Italy "should continue first on the structural reform path, which is the only way that can restore growth". He added that it was a priority to maintain credibility with the markets.
    Jenkins said Draghi "didn't sound to me like a man who thought that it was appropriate for Europe to move away from austerity". He added: "Thus it could bring him into conflict with politicians before very long if the economy does not recover and job creation remains non-existent in the stressed countries of Europe. While Mr Draghi has stated he will do 'whatever it takes,' that does not necessarily mean that he will immediately cave in to the demands of politicians."
    If Italy ends up with an anti-austerity government, the market may assume that the ECB's promise of support via its bond-buying programme – the so-called OMT – could be weakening. Such a move could cause Italy's borrowing costs to escalate.
    Beppe Grillo, leader of the Five Star Movement – which controls the lower house and has the largest bloc in the upper house – has continued to mock his social democrat rival Pier Luigi Bersani, dampening hopes that a coalition can be found. Many analysts believe another election is likely in a few months.
    The pressure on Brussels to loosen its purse strings and relax some austerity measures intensified after a speech in London by the Irish prime minister, Enda Kenny. He told a City audience that he wanted Britain to stay in the EU to join calls for a strong internal market. He also used the speech to plead for better terms to Brussels €65bn rescue deal.
    "While Ireland's future is closely tied to the EU, it is also closely connected to our nearest neighbours – here in Britain," he said.
    "Having the ability to work together within the European Union on the many issues on which we are of like mind – the single market, trade and so on – amplifies the impact of our excellent relationship generally.
    "We see the British relationship with the EU as being a two way relationship – Britain benefits from its membership of the EU, and the EU is better off with Britain as a leading member making a valued contribution."

    The Coming Crash in the Bond Market

    By Bud Conrad, Chief Economist
    It is my contention that the 70-year debt supercycle has come to an end.
    To put the current financial situation in perspective, here's a long-term history of the debt-to-GDP ratio, which reached a record high at the beginning of the current crisis. It was a dramatic change in 2009, unlike anything since the aftermath of the Great Depression.
    The highest the debt-to-GDP ratio had previously been for the United States was 301% at the bottom of the depression in 1933 when GDP collapsed and debt was high. The level became unsustainable in 2009, despite low interest rates. Weak borrowers were signing up to finance houses that they thought would increase in price forever. The point of the chart is that this downturn is different from all the recessions since World War II.
    Total market debt includes debt of the federal government, state governments, households, business, financial institutions, and to foreigners. The components of the above total debt are shown below, so you can see which ones are stabilizing and which may be approaching unsustainable levels.
    Looking forward, the most important problem is that the federal government has inserted itself into the economy with huge deficits to try to combat the slowing of the private sector. As you can see, private-sector borrowing has not increased, even as federal government deficits have ballooned to unprecedented levels. In essence, we are building our recovery on government debt.
    The clear driver of this extreme expansion of government debt that I call a "Bond Bubble" is the Federal Reserve's flooding of markets with liquidity to drive rates to zero. The chart below shows a projection what will happen to the Fed's balance sheet as it continues to distort the rate to zero by extending its monthly purchases of $40 billion of mortgage-backed securities (MBS) and $45 billion of Treasuries out to 2016:
    It is my contention that the actions of the Fed, which were started to counter the credit crisis of 2008 with four programs of quantitative easing, have brought us the incredibly low interest rates (aka, the Bond Bubble) we have today. By purchasing so many credit assets, the Fed is driving the price of bonds higher, and thus interest rates much lower, than they would otherwise be.
    The black line in the chart above is the 10-year Treasury rate – you can see that it drops with each of the big balance sheet expansions. The resulting asset bubbles in stocks and housing are a direct result of the monetary creation by the Fed.
    The growth in Fed purchases will likely continue so that the low rates of the Bond Bubble don't collapse. But the effects of the Fed's economic stimulus decline with each new injection of money.
    There will come a time when the Fed announces a new program of balance sheet expansion by asset purchases that will cause the interest rate to rise because of fears of inflation from money creation, rather than fall as the Fed desires. At that point, we'll know the Fed's power to manipulate the economy has dissipated.

    Just How Low Can Interest Rates Go?

    The chart of 10-year Treasuries below shows that the current level of 2% is lower than it has ever been, except for a brief low of 1.5% last fall (blue line). It is the lowest in 240 years. This is happening in spite of government deficits expanding at a trillion dollars per year as far as the eye can see. We are at the bottom of a 32-year bull market in bonds (drop in rate).
    To get a view of how extreme today's rate is, I added the red line, which is 100 divided by the interest rate. It shows a rise as rates fall and makes the bubble of low rates more obvious – which is currently higher than ever.
    The point is that these extremely low rates are unprecedented, even when looking back to the last Great Depression. They could spring back a long way.
    The low rates induced by the Fed are transmitted to many other market rates, as shown in the following charts. These charts need little comment, except that all of them confirm the simultaneous movement to many-decade lows.
    During the credit crisis, junk bonds were the worst performers as investors feared they would lose their money in default. Rates rose on BBB corporate debt as well. At the same time, government debt became the safe haven, and as people moved to the safe haven, they drove the price of Treasuries up and their interest rate down. The premium has gone out of the lower-rated markets, with rates even lower than before this crisis started. It's not that risk has disappeared: I think it is more likely that the flood of excess money is chasing any kind of return it can find, and that is driving rates to record-low levels.
    Inflation spiked dramatically in the 1973 and 1979 oil crises. More recently, official government numbers haven't shown wild inflation. Prices for energy, food and domestic services – like medical care and education – have had big jumps. But thanks to cheap foreign manufacturing, we are able to import goods at attractive prices, so overall inflation doesn't reflect the extreme money creation by the Fed. Wage growth is nonexistent, largely due to foreign competition and high unemployment from offshoring manufacturing.
    The forces of inflation can easily overcome a weak economy to destroy a currency: this has happened in countries like Zimbabwe, Argentina or Yugoslavia. Once things get out of hand, it is hard to say whether it is the weak economy that causes the government spending and further deficit destruction of the currency, or the reverse. But that doesn't matter once people lose confidence in the government and its paper issuance.
    The chart below shows government numbers for inflation that seem awfully low compared to what most people experience. The erratic behavior of commodities is likely to continue, so I think prices will continue to rise.
    But even using these conservative government numbers, when we subtract the inflation from the interest rate to show the real return to an investor, we get negative numbers. This, too, is unsustainable.

    A Look at Interest Rates Worldwide

    I've written extensively in previous articles about central bank expansion, but it's worth reminding ourselves that excessive money creation is not just a US phenomenon but a worldwide experiment. Once this feeds back on itself as ordinary people recognize the destruction of the fiat currency systems, we can expect inflation on a worldwide basis. The similar decline in interest rates in Germany and Japan is the result of their central bank interventions to support their economies by driving rates lower.
    The chart below, which shows the interest rates of 187 countries, has some underlying patterns. At first blush it just looks like spaghetti, but if you step back, you can see that rates were rising into 1980. Then many fell until the recent crisis, after which new deviations appear. In Europe, rates went both ways: up for the PIIGS and down for the safe havens like Germany.
    And here is a simplification of the above by just averaging the numbers to a single line in which you can see an imprecise confirmation that, despite wide variability, there is an underlying pattern in world markets.
    The above six charts confirm that rates of all kinds are at 50-year record lows.

    Debt and Interest Rates Suggest Higher Rates Are Possible

    The chart below shows the comparison of Greece's growing debt (in blue) and the resulting rise in interest rate. You can see that as Greece's debt to GDP rose above 100%, the interest rate rose toward 20%. Lenders lost confidence in the ability of the Greek government to actually pay back its debt.
    In contrast, the stronger countries have been able to accommodate their government debt increase and still maintain moderate interest rates. The United States is shown in the following chart. Central banks have aided the government in managing to keep rates low despite big deficits, by buying the debt. Balance sheets of the world's central banks are growing rapidly to support government deficits while forcing rates to low levels. It is a bubble.
    When you buy Treasury bonds, you are putting your fate in the hands of the government, expecting it to give back your purchasing power and a reasonable amount of interest to you, in return for the use of your money. Should you trust these authorities with your money? I believe we are headed for a serious loss of confidence in the value of the dollar, which will be accompanied by a burst of the Bond Bubble.
    This Ponzi scheme is getting ready to explode.

    Between now and that day of reckoning, you can rest assured the purchasing power of your money will continue to erode. This, of course, means that to make a profit, you have outpace inflation. One of the best approaches you can take is to follow the lead of contrarian investing legend Doug Casey and invest in emerging trends…