Saturday, April 6, 2013

Public Banking: What Better Time Than Now

Veterans Today – by Stephen Lendman
Money power in private hands games the system. It does so destructively. Controlling money, credit and debt for private enrichment assures speculation, booms, busts, inflation, deflation, instability, crisis, recessions and depressions.
The Cypriot crisis alone begs the question. Money power in public hands could have avoided what’s now happening. Ordinary Cypriots face horrific hard times. So do most people in Euroland countries and America.  
Force-fed austerity is policy. Banks accounts no longer are safe. Nor are public pensions. Insiders get advance word and flee. From March 1 – 15, 132 companies with Cypriot deposits shifted hundreds of millions of euros offshore.
Less fortunate unsecured account holders may lose everything. Small depositors aren’t safe. They’re vulnerable. Grand theft is official policy.
Bailouts come with strings. They include strip-mining economies for profit. Massive job, wage and benefit cuts follow. So does selling off state enterprises at fire sale prices.
Ordinary people have no say. Their welfare doesn’t matter. Bottom line priorities take precedence. It’s Wall Street’s way. Global money control is policy.
It’s used to make more of it. It’s made the old fashioned way. It’s stolen. It’s done so with impunity. It wrecks countries in the process.
Cyprus is Exhibit A. It’s being looted. It’s being destroyed. It’s a perfect crime. Eurocrats and Cypriot officials bear full responsibility. Ordinary people face protracted hard times. Most have three choices – starve, rebel or leave.
On March 30, former Reagan budget director David Stockman headlined “State-Wrecked: The Corruption of Capitalism in America.”
Post-2007 crisis conditions devastated ordinary Americans. Main Street’s in protracted Depression. Stockman predicts more trouble ahead.
Fed policy resorted to money printing madness. Helicopter Ben dropped none of it on Main Street. It “stayed trapped in the canyons of Wall Street.” It’s “inflating yet another unsustainable bubble.”
Eventually they all burst. This time don’t expect bailouts. America’s heading for “zero-sum austerity and virulent political conflict.”
“This dyspeptic prospect results from the fact that we are now state-wrecked.”
Money printing madness and bailouts reflect “the single most shameful chapter in American financial history.”
“While the Fed fiddles, Congress burns. (Fiscal collapse) will play out incrementally, like a Greek/Cypriot tragedy, in carefully choreographed crises over debt ceilings, continuing resolutions and temporary budgetary patches.”
It’s not a pretty picture. Things head from bad to worse. “The future is bleak.” America reached its monetary and fiscal limits. Day of reckoning time approaches.
It’s arrive with tsunami force. It’s a far cry from Bernanke’s predicted prosperity. He falsely claimed the Fed tamed the business cycle. He did so before the subprime meltdown.
Instead of what he called the “great moderation,” the great “deformation” approaches. Rogue central bank policy and casino capitalism assure it.
They “brought America to an end-stage metastasis.” Responsible solutions aren’t forthcoming. Things head from bad to worse. America is fiscally, morally, intellectually, and politically broken.
Euroland’s no better. “When the latest bubble pops,” watch out. They’ll be “nothing to stop the collapse.”
Money power in private hands assures trouble. Ellen Brown explained more. Up to 40% of “everything we buy goes (for) interest.”
It goes to “bankers, financiers and bondholders.” A third or more of national wealth shifts from Main Street to Wall Street. Complicit politicians let it happen. They do so for generous benefits they derive. Greed is the national pastime. So is looting America for profit.
Most people think paying bills and credit card charges on time avoids interest charges. Not so. “Tradesmen, suppliers, wholesalers and retailers all along the chain of production rely on credit to pay their bills.”
Their costs pass on to consumers. Unwittingly they pay. We all do like it or not. Ordinary people make wealthy ones richer. They do so at their own expense. What better argument for public banking than that!
If interest paid returned to public hands, a third of more of the cost goods and services bought could be saved. Money earned could buy 50% more than now. Living standards would rise.
Ordinary people would benefit enormously. Poverty would drop. People would live better. They’d have more money to spend. Economic growth would follow. So would greater job creation. It gets better.
Borrowing from public banks eliminates the need to charge interest. It works at federal, state and local levels.
Public banks don’t have to earn profits. They’re not beholden to Wall Street or shareholders. They’re self-sustaining. They can lend for their own needs. They can do so for businesses, farmers and consumers.
The more loans roll over, the more debt-free money is created. If used productively for growth – not speculation, high salaries, big bonuses or other excesses – it can be inflation-free. As long as new money produces goods and services, price stability follows.
It happened before in America and elsewhere. It can again now. Imagine the possibilities. Federal, state and local debt could be substantially reduced or eliminated. So could personal and federal payroll taxes.
Social programs could be funded inflation-free. America’s manufacturing base could be rebuilt. Vitally needed infrastructure projects could be undertaken.
Alternative, sustainable, clean, safe, affordable energy sources could be developed. Environmental cleanup could be prioritized.
Millions of high-pay/good benefit jobs could be created. Homes would be more affordable. Foreclosures would end. So would out-of-control speculation, booms and busts.
Private savings, pensions, and investments would be secure. So would Social Security, Medicare and other vital social programs in perpetuity.
Surpluses would replace deficits. It could happen at federal, state and local levels. Sustained prosperity would be possible. It’s not pie in the sky. It happened before. Why not ahead.
Now’s the time to return money power to public hands. It’s where it belongs. Make banks a public utility. Doing so makes profits they earn public assets.
In 1919, North Dakota established public banking. It’s America’s only state with one. It’s 100% state owned. It works cooperatively with private banks. It’s been a credit machine for nearly 95 years. It created prosperity.
It freed North Dakota from 2008 crisis conditions. During their height nationwide, the state had its highest budget surplus in history. It added jobs. Other states cut them. It’s got the nation’s lowest unemployment rate.
If America and other states operated like North Dakota, prosperity would follow. What better time to do so than now.
Public banking isn’t radical. It’s a sensible solution that works. It’s sorely needed. It’s an idea whose time has come.

Obama seeks deal, proposes cuts to Social Security

FILE - In this April 3, 2013 file photo, President Barack Obama speaks at the Police Academy in Denver. A senior administration official said Friday, April 5, 2013 that Obama's proposed budget will call for reductions in in the growth of federal Social Security pensions and other benefit programs in an attempt to strike a compromise with congressional Republicans. (AP Photo/Susan Walsh, File)Yahoo News – Associated Press
WASHINGTON (AP) — President Barack Obama’s proposed budget will call for reductions in the growth of Social Security and other benefit programs while still insisting on more taxes from the wealthy in a renewed attempt to strike a broad deficit-cutting deal with Republicans.
The proposal aims for a compromise on the Fiscal 2014 budget by combining the president’s demand for higher taxes with GOP insistence on reductions in entitlement programs. But the plan was already encountering negative reviews from top Republicans for insisting on revenue and from liberals for its effect on the social safety net.  
Obama would reduce the federal government deficit by $1.8 trillion over 10 years, according to a summary from the Obama administration provided Friday y. The president’s budget, the first of his second term, incorporates elements from his last offer to House Speaker John Boehner in December.Congressional Republicans rejected that proposal because of its demand for more than a $1 trillion in tax revenue.
Congress and the administration have already secured $2.5 trillion in deficit reduction over the next 10 years through budget reductions and with the end-of-year tax increase on the rich. Obama’s plan would bring that total to $4.3 trillion over 10 years.
While the budget would not affect current automatic spending cuts that took effect in March, it would replace $1.2 trillion in across-the-board reductions that would have been scheduled to kick over the next nine years.
A key feature of the plan Obama now is submitting for the federal budget year beginning Oct. 1 is a revised inflation adjustment called “chained CPI.” This new formula would effectively curb annual increases in a broad swath of government programs, but would have its biggest impact on Social Security. By encompassing Obama’s offer to Boehner, R-Ohio, the plan will also include reductions in Medicare spending, much of it by targeting payments to health care providers and drug companies. The Medicare proposal also would require wealthier recipients to pay higher premiums or co-pays.
Obama’s budget proposal also calls for additional tax revenue, including a proposal to place limits on tax-preferred retirement accounts for wealthy taxpayers. Obama has also called for limits on tax deductions by the wealthy, a proposal that could generate about $580 billion in revenue over 10 years.
Boehner, in a statement, said House Republicans made it clear to Obama last month that he should not make savings in entitlements that both sides agree on contingent on more tax increases.
“If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” Boehner said. “That’s no way to lead and move the country forward.”
The inflation adjustment would reduce federal spending over 10 years by about $130 billion, according to White House estimates. Because it also affects how tax brackets are adjusted, it would also generate about $100 billion in higher taxes and affect even middle income taxpayers.
The reductions in the growth of benefit programs, which would affect veterans, the poor and the older Americans, is sure to anger many Democrats. Labor groups and liberals have long been critical of Obama’s offer to Boehner for including such a plan.
The White House has said the cost-of-living adjustments would include protections for “vulnerable” recipients. But advocates for the elderly and for federal workers promptly criticized the proposal.
The National Committee to Preserve Social Security and Medicare said seniors have averaged a cost-of-living increase of 1.3 percent over four years.
“Arguing that is too generous shows how out of touch Washington is with the real-world economic realities facing average Americans,” the organization’s president and CEO, Max Richtman, said in a statement. “Adopting the chained CPI is nothing more than a political sleight of hand targeting our nation’s middle class and poor.”
Lawrence Mishel, president of the Economic Policy Institute, a liberal research organization in Washington, D.C., called the proposal “bad policy and even worse bargaining strategy.”
While Obama has proposed the slower cost of living adjustment plan during fiscal negotiations with Republican leaders, placing it in the budget would put the administration’s official imprint on the plan and mark a full shift from Obama’s stand in 2008 when he campaigned against Republican Party nominee John McCain.
In a Sept. 6, 2008, speech to AARP, Obama said: “John McCain’s campaign has suggested that the best answer for the growing pressures on Social Security might be to cut cost-of-living adjustments or raise the retirement age. Let me be clear: I will not do either.”
Administration officials insist Obama would only agree to the reductions in benefit programs if they are accompanied by increases in revenue, a difficult demand given the strong anti-tax sentiment of House Republicans.
That Obama would include such a plan in his budget is hardly surprising. White House aides have said for weeks that the president’s offer to Boehner in December remained on the table. Not including it in the budget would have constituted a remarkable retreat from his bargaining position.
Obama’s budget, to be released next Wednesday, comes after the Republican-controlled House and the Democratic-run Senate passed separate and markedly different budget proposals. House Republicans achieved long-term deficit reductions by targeting safety net programs; Democrats instead protected those programs and called for $1 trillion in tax increases.
But Obama has been making a concerted effort to win Republican support, especially in the Senate. He has even scheduled a dinner with Republican lawmakers on the evening that his budget is released next week.
House Republicans, however, have been adamant in their opposition to increases in taxes, noting that Congress already increased taxes on the wealthy in the first days of January to avoid a so-called fiscal cliff, or automatic, across the board tax increases and spending cuts.
As described by the administration official, the budget proposal would also end a loophole that permits people to obtain unemployment insurance and disability benefits at the same time.
Obama’s proposal, however, includes calls for increased spending. It calls for $50 billion in spending on public works projects. It also would make pre-school available to more children by increasing the tax on tobacco.
AP writer Stephen Ohlemacher contributed to this report.
Follow Jim Kuhnhenn on Twitter:–finance.html

How The Criminal Banking Cartel Is Destroying America

Part Two: How Obama Surrendered Sovereignty to the Criminal Banking Cartel
By John Titus
Summary of Part One:
The U.S. government openly conceded that its sovereign authority to enforce its own laws is gone when Attorney General Eric Holder testified that the Justice Department’s failure to prosecute any big banks is based on anonymous “expert” opinions that prosecutions would destabilize the financial system.
This notion of “systemic importance” has been thoroughly discredited. According to Tim Geithner, it’s an intellectually bankrupt phrase. What’s more, it’s been debunked both legally and empirically (which is likely one reason the DOJ’s “experts” wish to remain anonymous).
If it turns out that these “experts” are in fact agents of the big banks whose crimes are being immunized by the very entities whose discredited opinions the DOJ is relying on, then those “opinions” are nothing more than assertions of criminal sovereign immunity—a privilege that is legally limited to the President of the United States.
Since “the King can do no wrong”—the legal foundation of sovereign immunity—the real King here is the criminally immune cartel of banks, not the President, since real sovereigns don’t surrender the right to enforce their laws. And following the long series of unprosecuted crimes by the cartel, in which the President’s own constituents are the undisputed victims, “surrender” is the most charitable description of the Obama’s acts before the banking cartel.

Part Two: Inisde The Criminal Banking Cartel
There are two very big and related clues as to the identity of the anonymous experts behind whose opinions U.S. Attorney General Eric Holder hides whenever explaining away his failure to prosecute big banks on the basis of their “systemic importance.”
The first, noted in an article last week by Golem XIV, is a list of international banks that parade under the rather obvious label of “Globally Systemically Important Financial Institutions,” or G-SIFIs. There are 28 banks in total, 9 of them headquartered in the U.S.:
Deustsche Bank
JP Morgan Chase
BNP Paribas
Bank of America
Bank of New York Mellon
Credit Suisse
Goldman Sachs
Mitsubishi UFJ FG
Morgan Stanley
Royal Bank of Scotland
Bank of China
Group BPCE
Group Credit Agricole
ING Bank
Mizuho FG
Societe Generale
Standard Chartered
State Street
Sumitomo Mitsui FG
Unicredit Group
Wells Fargo
This list of cartel members is updated annually by the Financial Stability Board, a collection of international organizations. The FSB is a global meta-body of bankers.
But the formal edifice, whether called the FSB or the NWO (hat tip Alex), really doesn’t matter, because, as Golem XIV states: “Guess which institutions provide the membership for all of the above international bodies? Yes, you got it—the big banks.”
These are the banks that are above the law in the U.S. In Part One, we mentioned four banks—Citigroup, Wells Fargo, HSBC, and UBS—whose massive crimes had been taxed at a de minimis rate by the Department of Justice rather than prosecuted. All four are on the list of G-SIFIs above.
So what, you may ask, that’s just a list compiled by some international convention of cokehead bankers, how do they make sure a rogue federal prosecutor doesn’t break ranks and haul a cartel member or two off to criminal trial?
Enter clue no. 2: Covington & Burling, the law firm from which both the head of the DOJ (Eric Holder) and the DOJ’s head of criminal enforcement (Lanny Breuer) were recruited. Actually, Breuer is no longer with the DOJ. Following a four-year stint in which “the enforcer” failed to prosecute a single big bank, Breuer has returned to Covington & Burling, where he will earn be rewarded with $4 million in annual compensation.
The significance of Covington & Burling lies in its list of current clients, which looks remarkably like the list of criminally immune cartel members above (particularly the more recognizable names): Citigroup, Deutsche Bank, JP Morgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, UBS, Wells Fargo, and ING Bank.
Not to put too fine a point on it, but Eric Holder and Lanny Breuer have the financial motivation not to prosecute their firm’s clients. In Breuer’s case, it turned out to be $4 million of motivation. Per year.
Under any functioning system of law, of course, both Holder and Breuer would submit to screening procedures at the DOJ to insulate them from prosecutorial decisions involving their former clients. We're sure they did the same thing under our impotent system as well. But so what? When laws against crimes are a dead letter, who in his right mind would put any trust in a conflict screen?
As Cheyenne told Jill in Once Upon a Time in the West, “when you’ve killed four, it’s easy to make it five.
Now commentators are starting to point out where the slippery slope of sovereign immunity for criminal banks will lead.
Jim Chanos, who detected the fraud at Enron well before it destroyed the company and its shareholders, notes that not only are criminal cartel members now motivated to continue cheating and stealing, they have a fiduciary duty to do so. (Speaking of the Enron-ization of the U.S., Eric Holder is working to release CEO Jeff Skilling from prison early in yet another act of prostrate submission before his real masters, the criminal banks.)
As Golem XIV points out, immunity extends not only to criminal behavior, but to assets that a cartel member bank acquires through crime: “if by doing those illegal things [the bank] makes out-sized profits for its shareholders and staff, that money, those profits are also above the law.”
Cyprus Vs. MF Global: The Rule Of Law Is Dead
Thus, anyone who thinks account confiscation a la Cyprus can’t happen in the U.S. is dreaming of a bygone republic.  Not only is account seizure possible in the U.S., or even likely, it is guaranteed.  Just ask MF Global’s segregated account holders or GM senior bondholders if you have any doubts.
In the MF Global case, Jon Corzine "brazenly took liquid assets like Treasuries and warehouse receipts, but not cash which would have been more quickly missed, from customer accounts to post as illegal collateral for emergency funding with a lender who must have known that they were receiving stolen goods." The lender, of course, turned out to be JP Morgan--a prominent international cartel member. Jon Corzine was of course one of Obama's top fundraisers and an alumnus of Goldman Sachs--a cartel member.
In the GM bankruptcy, the age-old pecking order of creditor priority was turned upside down, literally "rewriting law," when senior unsubordinated secured creditors' claims were trumped by payouts to junior unsecured creditors in a patently political sop to Obama's perceived union supporters.
In both cases, the black letter law that's supposed to gird markets with trust and predictablity was trampled in favor of Obama's political allies. Now that Obama has altogether surrendered the DOJ's law enforcement functionality to the criminal international banking cartel, those dangerous precedents turn out to have been short-sighted in the extreme: there is nothing left to stop the plunder of customer accounts in Cyprus from crashing like a tidal wave across U.S. shores. The timing depends only on the restraint that the banking cartel elects to show.
There is no remedy in sight, only more financial crime as Americans are robbed deeper into serfdom.
The Executive Branch is merely an agent of the criminal banking cartel for the reasons given. That fact, in turn, has cut the Judiciary out of the equation altogether: a court cannot try criminals who are never brought before it to face charges.
That leaves Congress, which in theory could initiate impeachment proceedings. But how likely is success when the Senate, which would try any impeachment cases, couldn’t even obtain the names of the DOJ’s so-called experts in the first place?
As noted in Part One, Senator Grassley asked the DOJ for the experts’ names in a letter on January 29, 2013. Eric Holder testified on March 6, more than a month later. The issue of the experts’ identities was thus as ripe as could be, but rather than obtaining the names, the ranking member of the Judiciary Committee put on a clinic in how to conduct an incompetent examination:
Q. On January 29, Senator Sherrod Brown and I requested details on who these so-called 'experts' are. So far we have not received any information. Maybe you're going to but why have we not yet been provided the names of experts the DOJ consults as we requested on January 29? We continue to find out why we aren't having these high-profile cases.
A: We will endeavor to answer your letter, Senator. We did not, as I understand it, endeavor to obtain experts outside of the government in making determinations with regard to HSBC.
Just putting that aside for a minute though, the concern that you have raised is one that I, frankly, share. I'm not talking about HSBC here, that would be inappropriate. But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy. I think that is a function of the fact that some of these institutions have become too large.
Again, I'm not talking about HSBC, this is more of a general comment. I think it has an inhibiting influence, impact on our ability to bring resolutions that I think would be more appropriate. I think that's something that we — you all [Congress] — need to consider. The concern that you raised is actually one that I share.
Note that Senator Grassley asked one question: why haven’t you answered our letter? Holder doesn’t answer it. Instead, he promises to supply the names later. At that point, Grassley should have put two questions to Holder. First, answer my question by explaining why you ignored our letter. Second, when will you supply the names of the “so-called experts”?
A mediocre first-year litigation associate would’ve gotten this information within seconds. But not Senator Grassley, who earned his masters degree during the Eisenhower Administration. Here is his completely irrelevant follow-up question:
Q: Do you believe that the investment bankers that were repackaging bad mortgages that were AAA-rated are guilty of fraud or is it a case of just not being aggressive or effective enough to prove that they did something fraudulent and criminal?
Huh? Not surprisingly, Eric Holder has been in no hurry to disclose the names of the “experts” retained by Covington & Burling’s clients since dancing around Grassley like a cigar store Indian. Holder has completely blown off the Senate, which has done nothing to follow up the issue.
Frankly this disgusting charade has surprised no one who’s paying any attention, coming, as it does, from the same august body that exempted itself from insider trading laws and has failed to pass any meaningful reform legislation since the 2008 meltdown, an even worse repeat of which is on its way.
On the contrary, both Congress and the Executive Branch are now just tools of fraud used by the criminal international banking cartel against the people, who for their part are drooling iDope dreams oblivious to their own last act, proving Edward Murrow right, a nation of sheep having begotten a government of wolves.
Postscript: for an altogether different analysis that reaches the same conclusion (it's open season for international bankers on U.S. bank accounts), please see what Jesse has to say.

Judge Napolitano – Stockton Bankruptcy: Unfunded Pensions Drowning Cities In Debt

Bread riots or bankruptcy: Egypt faces stark economic choices

Source: CSM
It was a perilous time for Egypt. The International Monetary Fund (IMF) was demanding subsidy cuts in exchange for a loan Egypt’s leaders desperately wanted. So they complied, cutting subsidies on the bread, cooking fuel, and gasoline average citizens relied on to live.
Within hours, workers were pouring off the docks in the Suez Canal zone and Alexandria and out of the factories in the Nile Delta, and attacking symbols of the government everywhere – furious about the sudden rise in the price of daily staples.
In Cairo‘s Tahrir Square, angry youth tore up sidewalks to hurl stones at riot police when they ran out of Molotov cocktails; the police responded with tear gas and baton charges. By the time the smoke cleared, at least 80 Egyptians were dead in the worst rioting the country had witnessed in a generation.
The Egyptian government restored the subsidies.
While this probably sounds familiar, it describes the 1977 bread riots that almost brought down the government of Anwar Sadat and left ransacked the home of his young vice president, Hosni Mubarak. This history should be top of mind for the current president, Mohamed Morsi, who is facing decision time on a national financial crisis that dwarfs the one Sadat faced 35 years ago.
President Morsi’s government recently announced a rationing plan for subsidized bread that it claims won’t affect the poor. But few are convinced that the plan won’t either jack up prices or reduce availability of the bread that is now sold at one-quarter to one-fifth of its production cost.
Beyond the bread, more tough choices lie ahead. Morsi’s room to maneuver, however, is shrinking. Political turmoil has frozen high-level decisionmaking, even as the Egyptian pound has plummeted and foreign creditors look askance.
While it’s been a long-held theory that Islamist movements like Morsi’s Muslim Brotherhood can easily come to power in Muslim-majority states, they often lose public support as they fail to manage the economy to their citizens’ satisfaction.
“In one way, what’s happening might be good, so people can see that they’re inept, they’re politicians like everyone else, and they get booted out,” says Erin A. Snider, a postdoctoral fellow at Princeton University in Middle Eastern political economy. “But it’s going to be very ugly in the interim … and it’s going to make them incredibly resistant to admitting defeat.”

Past solution, present options

As in the 1977 crisis, Egypt once again faces an IMF demand for subsidy cuts, a working poor whose struggles are mounting and who feel betrayed and oppressed by their political classes, and a loan the government desperately wants but fears could be its undoing.
Then, Egypt muddled through some desperate years for its poor as Sadat (and after him, Mr. Mubarak) pivoted toward the United States and ultimately reaped lavish aid in return.
Late in 1977, Sadat made his historic trip to Israel, and while that cost him Arab financial support, it led to a tight partnership with the US and international lenders like the IMF, which gave the country credit on easy terms, and debt forgiveness when times got tough.
After Egypt supported the US-led coalition to drive Iraqi troops out of Kuwait, Mubarak was rewarded with at least $15 billion in international debt forgiveness.
But Morsi is neither Sadat nor Mubarak, and Egypt is in far more chaos than it was at any other moment in recent decades. The US doesn’t see his Muslim Brotherhood as a reliable partner, and members of Congress are likely to keep loans and aid at a trickle. The IMF has balked at coughing up money without concrete, short-term change in how the government spends that money.
The turmoil, infighting, and occasional rioting of the past two years have scared away foreign and local investment, left the pyramids and the grand temples of Luxor bereft of tourists, and seen already-low wages for the poor deteriorate in real terms.
Morsi is on the hook for all of this, with the elected parliament dissolved by court order last year and yet to be replaced. So far, he and his loyalists have seemed far more interested in consolidating power than in addressing the needs of average Egyptians, despite the rising unrest.
Rioting in February in Cairo and Port Said, the key Suez Canal city, has already dwarfed the events of 1977.
“What we’ve learned since Mubarak is that the new parties, including the Muslim Brotherhood, but not just them, are only interested in pursuing their own interests,” says Mustafa Eid, a young Egyptian businessman who cheered Mubarak’s fall, participated in street protests demanding democracy in 2011, and stepped back from politics in disillusionment after watching fellow protesters shot and killed by riot police in central Cairo in late 2011.
“The country is filled with petty corruption, with people that need help, and the people in power are just looking after themselves,” he says.
The country’s coffers are draining fast. The exchange rate was at 5.8 pounds to the dollar at the end of 2010, shortly before the massive street protests began that drove Mubarak from power. Today, it is trading close to 6.8 to the dollar, a 17 percent drop, most of which has come since the start of the year.
Since so many Egyptian consumer goods – like much of the nation’s food – are imported, the collapsing pound has driven up local inflation and put a strain on the government, which planned to spend at least $4.5 billion on subsidized fuel in the first three months of 2013.
Though spending on wheat subsidies has fallen, that’s because the government has been drawing on a strategic wheat reserve to keep the ovens on at government bakeries, which sell flatbread for pennies a loaf. The wheat reserve now holds enough to supply demand for three more months, down from six months in the middle of last year.
The pressure on the pound and total subsidy spending of about $20 billion a year has put the central bank in dire straits. Foreign reserves that stood at $35 billion in January 2011 are now hovering close to $13 billion.
That’s why the IMF money, about $4.8 billion in all, is so crucial. While the IMF’s cash by itself wouldn’t make Egypt’s problems go away, it would signal other governments and subsidized lenders to dip into their pockets as well.
If the IMF loan were granted, “that would probably see our debt ratings upgraded; more money would follow it,” says Mohamed Osama al-Khely, a banker and an appointed member of Egypt’s Shura Council. “But if you increase taxes or cut subsidies, you’re going to hit the poor, the streets. To recover, we need a political rest. Not more turmoil.”
The traditionally ceremonial and powerless Shura has been legislating in the absence of parliament. It is packed with both appointed and elected members of the Muslim Brotherhood. (Since Egyptians didn’t expect parliament would be dissolved, few voted in the Shura elections, which had only 7 percent turnout.)
Mr. Khely isn’t from the Brothers and has a jaundiced view of his new colleagues. The people the Brothers put up for the council were at best the B team, he says. “These guys aren’t really professionals; they spend most of their time waiting for orders from outside.”

Islamic banking focus

What kind of orders have they been receiving? They spent much of the first part of the year trying to hammer out legislation on Islamic financing. This involves borrowing arrangements that dress up payments to creditors not as interest but as equity returns, since usury is forbidden by Islam in the eyes of the Muslim Brotherhood.
Such Islamic financial instruments are popular with devout lenders, but Khely says his colleagues are under the impression that there’s a groundswell of religiously motivated capital that’s about to head their way thanks to their efforts.
“It’s like talking [about] fixing the windshield wipers when the engine of the car is broken,” he says. “They’re totally consumed with doing something ‘Islamic’ … when the crisis is growing.”
A few months ago, Samir Radwan sat in his elegant flat in Cairo’s Maadi suburb, equal parts rueful about and detached from Egypt’s economic predicament.
The longtime economic consultant with a PhD from the University of London had been called in as interim Finance minister by the military-ruled government at the time Mubarak fell. Egypt was at the brink of a deal with the IMF.
Egypt’s finances were stronger, optimism was high for a country coming out of decades of a military-backed dictatorship, and he was close to a deal. He’d taken the job, working for Field Marshal Mohamed Tantawi (acting president in all but name) despite family objections. “I had to. Maybe I could help.”
By June 2011 Mr. Radwan had worked out a loan with the IMF for more than $3 billion at 1.5 percent interest – a steal – and without any of the IMF’s often onerous, and potentially destabilizing, subsidy cuts. Then Egypt’s military leaders stepped in.
There were rumblings about Egypt’s “dignity” being compromised from the street and in the country’s halls of power.
Before the deal could be done, “Tantawi said to me that he didn’t want to leave a legacy of debt when he left,” Radwan says. So the deal was abandoned.
Egypt’s economy, as well as the trust that can be as valuable a commodity as cash, continued to deteriorate. IMF demands started to go up along with Egypt’s needs. Radwan says he doesn’t envy Egypt’s current financial stewards.
“The situation has changed … in my time I had $35 billion in reserves and a stable currency,” he says. The wheels really came off at the end of last year, when Morsi decided to decree to himself legislative powers that allowed him to rush through a new constitution, but which polarized Egyptian politics to such an extent that international lenders like the IMF don’t trust he’ll be able to make good on any promises he makes.
“The government found themselves caught in a paradox,” says Radwan. “They wanted the loans on the one hand, and on the other they wanted to rush through the constitution.”

A constitution and a fissure

Morsi got his constitution. But he also got a badly split, furious country. Protests almost every Friday since have racked Cairo and other cities; in mid-March, clashes outside the Muslim Brotherhood’s headquarters sent another paroxysm through the body politic.
The situation is burning up the political capital the Brothers had when Morsi was elected president last summer. Never tested by power in their 80-year history, they had projected to Egypt’s public a can-do, clean, religious image. Their fall from grace may open the door for more secular-oriented politics, in the view of some analysts.
For now, Egypt is caught between two old imperatives: the need for international aid and the need to look after its poorest citizens. The clock is ticking.
Sadat, with the cold war raging and the option of pivoting toward the West, for which Egypt was handsomely rewarded, staved off subsidy cuts and ended up getting the money his country needed.
Morsi’s situation is as dire – if not more so. But finding new friends, or rekindling old friendships, may prove harder for him.

U.S. official: We are ‘not on the brink of war’ with North Korea

North Korean soldiers via AFP
After weeks of intensifying warnings from Washington and threats by Pyongyang, US policymakers are hoping to stop the crisis from spiraling into war while still standing firm on North Korea.
North Korea is famous for its shrill proclamations but it has sent shudders in the United States, South Korea and Japan in recent days by brandishing nuclear war and apparently moving a missile to its east coast.
The United States took the unprecedented step of announcing last week a bomb test by its nuclear-capable B-2 stealth fighter, one of a series of moves meant partly as reassurance to the new administration in ally South Korea.

A senior US official insisted that such shows of force were needed to influence North Korea but said that the United States also wanted to climb down from the crisis and minimize the potential for a miscalculation.
“No one should think we’re on the brink of war, at least at this point, and we have to do everything we can to avoid it,” the official told AFP on condition of anonymity.
The official said the United States was committed to its annual joint maneuvers with South Korea — which end in April and included the B-2 and other advanced jets — but that it may “go a little less public with our exercise activities.”
The Pentagon said Wednesday it would speed up stationing of ground-based THAAD missile-interceptor batteries to protect the US Pacific territory of Guam but characterized the move as defensive.
State Department spokeswoman Victoria Nuland denied any shift in tone but said that the situation “does not need to get hotter” and that the United States was open to a “different course” if North Korea acts differently.
Driving the concern, the United States knows little about Kim Jong-Un, a third-generation leader in his late 20s who since taking charge in late 2011 has met few foreigners other than basketball all-star Dennis Rodman.
Scott Snyder, a senior fellow at the Council on Foreign Relations, said the United States had likely already taken enough actions to make its message clear to North Korea, which in February defiantly carried out a third nuclear test.
But Snyder said Washington had little incentive to turn down the temperature when it appears that Pyongyang may not have completed its playbook.
“My impression is that the North Koreans have got the message. At this point, the problem is that the North Koreans are already on a set course of action,” he said.
Bonnie Glaser of the Center for Strategic and International Studies said that the United States had more leeway on revealing military moves as the key stretch of its exercises with South Korea was winding down.
But she said the United States could not make gestures toward North Korea, other than continuing to state that the door is open for dialogue.
“We do not want to reward their threats and I don’t think we should really be offering them anything new, absent any steps by them to start ratcheting down these tensions,” she said.
Kurt Campbell, who stepped down in February as the top State Department official on East Asia, said that President Barack Obama’s administration has deliberately sent a “dual message” on North Korea.
The administration has warned North Korea but highlighted that it saw little concrete military build-up by Pyongyang.
“I think they (the administration) are doing that in a way so that we don’t have a set of circumstances where things escalate beyond a point where it can be effectively managed,” Campbell said at Johns Hopkins University.
“This is one of the most dangerous parts of the world. It’s a hair-trigger, heavily militarized (area) and so great care needs to be taken,” he said.

Guest Post: 21 Statistics About The Explosive Growth Of Poverty In America That Everyone Should Know

If the economy is getting better, then why does poverty in America continue to grow so rapidly?  Yes, the stock market has been hitting all-time highs recently, but also the number of Americans living in poverty has now reached a level not seen since the 1960s.  Yes, corporate profits are at levels never seen before, but so is the number of Americans on food stamps.  Yes, housing prices have started to rebound a little bit (especially in wealthy areas), but there are also more than a million public school students in America that are homeless.  That is the first time that has ever happened in U.S. history.  So should we measure our economic progress by the false stock market bubble that has been inflated by Ben Bernanke’s recklessmoney printing, or should we measure our economic progress by how the poor and the middle class are doing?  Because if we look at how average Americans are doing these days, then there is not much to be excited about.  In fact, poverty continues to experience explosive growth in the United States and the middle classcontinues to shrink.  Sadly, the truth is that things are not getting better for most Americans.  With each passing year the level of economic suffering in this country continues to go up, and we haven’t even reached the next major wave of the economic collapse yet.  When that strikes, the level of economic pain in this nation is going to be off the charts.
The following are 21 statistics about the explosive growth of poverty in America that everyone should know…
1 – According to the U.S. Census Bureau, approximately one out of every six Americans is now living in poverty.  The number of Americans living in poverty is now at a level not seen since the 1960s.
2 – When you add in the number of low income Americans it is even more sobering.  According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.
3 – Today, approximately 20 percent of all children in the United States are living in poverty.  Incredibly, a higher percentage of children is living in poverty in America today than was the case back in 1975.
4 – It may be hard to believe, but approximately 57 percent of all children in the United States are currently living in homes that are either considered to be either “low income” or impoverished.
5 – Poverty is the worst in our inner cities.  At this point, 29.2 percentof all African-American households with children are dealing with food insecurity.
6 – According to a recently released report, 60 percent of all children in the city of Detroit are living in poverty.
7 – The number of children living on $2.00 a day or less in the United States has grown to 2.8 million.  That number has increased by 130 percent since 1996.
8 – For the first time ever, more than a million public school students in the United States are homeless.  That number has risen by 57 percent since the 2006-2007 school year.
9 – Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.
10 – One university study estimates that child poverty costs the U.S. economy 500 billion dollars each year.
11 – At this point, approximately one out of every three children in the U.S. lives in a home without a father.
12 – Families that have a head of household under the age of 30 have a poverty rate of 37 percent.
13 – Today, there are approximately 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.
14 – About 40 percent of all unemployed workers in America have been out of work for at least half a year.
15 – At this point, one out of every four American workers has a job that pays $10 an hour or less.
16 – There has been an explosion in the number of “working poor” Americans in recent years.  Today, about one out of every fourworkers in the United States brings home wages that are at or below the poverty level.
17 – Right now, more than 100 million Americans are enrolled in at least one welfare program run by the federal government.  And that does not even include Social Security or Medicare.
18 – An all-time record 47.79 million Americans are now on food stamps.  Back when Barack Obama first took office, that number was only sitting at about 32 million.
19 – The number of Americans on food stamps now exceeds the entire population of Spain.
20 – According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
21 – Back in the 1970s, about one out of every 50 Americans was on food stamps.  Today, close to one out of every six Americans is on food stamps.  Even more shocking is the fact that more than one out of every four children in the United States is enrolled in the food stamp program.
Unfortunately, all of these problems are a result of our long-term economic decline.  In a recent article for the New York Times, David Stockman, the former director of the Office of Management and Budget under President Ronald Reagan, did a brilliant job of describing how things have degenerated over the last decade…
Since the S&P 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion). Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually. Real median family income growth has dropped 8 percent, and the number of full-time middle class jobs, 6 percent. The real net worth of the “bottom” 90 percent has dropped by one-fourth. The number of food stamp and disability aid recipients has more than doubled, to 59 million, about one in five Americans.
For the last couple of years, the U.S. economy has experienced a bubble of false hope that has been produced by unprecedented amounts of government debt and unprecedented money printing by the Federal Reserve.
Unfortunately, that bubble of false hope is not going to last much longer.  In fact, we are already seeing signs that it is getting ready to burst.
For example, initial claims for unemployment benefits shot up to385,000 for the week ending March 30th.
That is perilously close to the 400,000 “danger level” that I keep warning about.  Once we cross the 400,000 level and stay there, it will be time to go into crisis mode.
In the years ahead, it is going to become increasingly difficult to find a job.  Just the other day I saw an article about an advertisement for a recent job opening at a McDonald’s in Massachusetts that required applicants to have “one to two years experience and a bachelor’s degree“.
If you need a bachelor’s degree for a job at McDonald’s, then what in the world are blue collar workers going to do when the competition for jobs becomes really intense once the economy experiences another major downturn?
Do not be fooled by the fact that the Dow has been setting new all-time highs.  The truth is that we are in the midst of a long-term economic decline, and things are going to get a lot worse.  If you know someone that is not convinced of this yet, just share the following article with them: “Show This To Anyone That Believes That ‘Things Are Getting Better’ In America“.
So what are all of you seeing in your own areas?
Are you seeing signs that poverty is getting worse?
Please feel free to post a comment with your thoughts below…

Seven Dumb Things Bankers Say

Many of the arguments used to justify the size of the largest U.S. financial institutions simply don’t stand up to scrutiny. It's important that folks in Washington keep this in mind as the political debate over what to do about too-big-to-fail banks heats up.
A number of the bankers' talking points are encapsulated in a report, issued as part of a Wall Street public-relations campaign, that appears to be getting some attention inside the Beltway. Politico's Morning Money mentioned it in February, and this week Bloomberg View columnist Ezra Klein cited it an article on the state of efforts to rein in too-big-to-fail banks.
Before we dig in, a bit of context: Critics of the big banks -- including the editors of Bloomberg View -- argue that the main advantage of being a JPMorgan-size giant is the ability to extract a subsidy from taxpayers. The larger and more systemically threatening banks are, the more confident they and their creditors can be that the government will bail them out in an emergency. This too-big-to-fail status allows such banks to borrow at lower rates than they otherwise would -- a perverse incentive that undermines market discipline, artificially bloats the financial sector and promotes the kind of credit binges that end in crises.
The report in question, published by the public-affairs consulting firm Hamilton Place Strategies, asserts that such reasoning ignores "the value of large banks to the global economy and their growth over time, the dramatic improvements in safety and soundness over the past three years, and the context of international competition." It goes on to say that breaking up the banks -- or, we can assume, other policies that would result in their shrinkage, such as higher capital requirements -- would favor "foreign banks and the nonbank financial sector."
Let's examine the report's points.
  1. The U.S. banking sector has grown proportionately with the rest of the economy.

    To make this point, the report uses a couple unusual proxies for the U.S. economy: The S&P 500 stock index and U.S. exports. It provides a chart showing how these two indicators grew almost exactly as much as the assets of U.S. commercial banks from 1990 to 2012.

    The most widely used measure of the U.S. economy -- gross domestic product -- gives a different answer. From 1992 (the earliest data from the Federal Deposit Insurance Corp.) to 2012, the assets of all U.S. commercial banks grew from about 70 percent of GDP to 91 percent of GDP. Over the same period, the assets of the five largest commercial banks (under U.S. accounting rules) went from about 9 percent of GDP to 40 percent of GDP. The picture is even more striking when using international accounting rules, which capture more of the derivatives that have become a big part of the largest banks' businesses over the past decade. By this measure, the assets of the five largest U.S. banking companies (a slightly different group than in the FDIC data) equaled about 90 percent of GDP as of mid-2012.

    In other words, the too-big-to-fail banks have ballooned in relation to the broader economy.

  2. Growth of the largest U.S. banks did not outpace the growth of the global economy.

    Here, the report presents data showing that the global market share of the largest U.S. banks has grown since 1990, but is lower than it was in 1970. Why global market share should matter is a mystery: If other countries' taxpayers want to encourage their banks to threaten the economy, that doesn’t mean we should follow suit in the name of global competition.

    Even so, the report's conclusions on bank size and the global economy are wrong. The assets of the five largest U.S. commercial banks (under U.S. accounting rules) grew from about 2 percent of world GDP in 1992 to about 9 percent in 2012 (with GDP measured at prevailing exchange rates). Under international accounting rules, the assets of the top five U.S. banks equaled about 20 percent of global GDP as of mid-2012.

  3. Global banks make a complex world simple.

    The point here is that global banks are great because multi-national corporations can go to one place for all the services they need. This may be true, but it's an argument for being global, not for being big. JPMorgan Chase & Co. doesn’t need $4 trillion in assets (under international accounting rules) to serve global companies. As the U.S. Senate investigation into JPMorgan's London Whale trading losses has shown, organizations that combine everything from retail banking to speculative derivatives trading under one roof are beyond the comprehension of their own executives, let alone their boards, clients and investors. They make a complex world more complex.

  4. Big U.S. banks are significantly safer than prior to the crisis.

    The report cites an increase in regulators' preferred measure of soundness -- the Tier 1 common risk-based ratio -- as well as an increase in tangible equity as indicators of banks' safety. It's true that these measures have risen. Problem is, as Frank Partnoy and Jesse Eisinger demonstrate in a recent article, the state of accounting in the financial sector is such that we can’t really know whether such indicators mean the banks have become safer.

    Even if the banks have improved, they're far from safe. Under international accounting standards, JPMorgan's tangible equity was only 3.1 percent of tangible assets as of mid-2012. This means a decline of 3.1 percent in the value of the bank's assets could be enough to render it insolvent. Research by economists at the Bank of England, and a new book by financial economists Anat Admati and Martin Hellwig, suggest banks need at least 20 percent equity if they want to avoid failures.

    The report also denies that the largest U.S. banks enjoy a funding advantage thanks to their too-big-to-fail status. Bloomberg View has dealt with this argument at length here and here.

  5. U.S. banks are not the largest among global players.

    The report points out that, under U.S. accounting standards or compared with their local economies, some foreign banks are even bigger than U.S. banks. It's not clear why this is good. Again, if other countries have an even bigger too-big-to-fail problem, that doesn’t mean the U.S. shouldn’t be concerned about its own.

    Also, under international accounting standards, U.S. banks are the largest. With about $4 trillion in assets, JPMorgan is the biggest bank on the planet. Bank of America is a close second.

  6. Big global companies will turn to foreign banks -- maybe even Chinese banks -- if the big U.S. banks are broken up.

    Again, it's highly doubtful that JPMorgan needs a $4 trillion balance sheet to attract global business. To use the report's own example, an $11.8 billion Wal-Mart Stores Inc. deal was the largest syndicated loan in the U.S. as of the third quarter of 2012, with six banks involved. Beyond that, most large corporations get their debt financing in the bond markets.

    That said, if foreign governments want to subsidize bank credit to U.S. multi-nationals, the U.S. gets the benefit while other countries' taxpayers bear the cost. Trying to compete by maintaining subsidies to our own banks would be like trying to match China's growth in global share of pollution. It's a race to the bottom.

    Conversely, reining in the biggest U.S. banks, and making them easier to understand, might actually enhance the global position of the U.S. financial industry. The share prices of U.S. banks are suffering in part because investors find the banks' finances incomprehensible (see that article by Partnoy and Eisinger). In a world of opacity, demonstrable safety and soundness could be a good selling point.

  7. Breaking up the big banks will cause more financial activity to go into the unregulated world of shadow banking.

    Alternative financing channels such as money-market mutual funds, conduits and structured investment vehicles proved to be a weak link during the financial crisis. It's not clear, however, why making banks smaller and more transparent would cause more shadow activity. Even if it did, it's not a point in favor of big banks. Rather, it suggests regulators should pay more attention to the shadowy areas -- for example, by forbidding the unsupported dollar-a-share guarantees that make money-market accounts seem as safe as insured bank deposits. Regulators should also take advantage of the powers the Dodd-Frank financial reform law granted them to oversee systemically important non-bank financiers.
Total good points: zero.

US Stocks and PMs falling sharply – is this the end of the Supercycle? Big correction dead ahead?

S&P 500
Market indicator favored by Buffett flashes red The last 2 times this happened, the market tumbled sharply. Is the Oracle right this time?
The economy and the market
Buffett thinks the value of all stocks in the Wilshire 5000 Total Market Index should be lower than the U.S. gross national product. The GNP stood at $16.13 trillion at the end of 2012, according to the Bureau of Economic Analysis. Well, the Wilshire 5000 hit that mark on March 4, and has subsequently risen to $16.57 trillion. That difference may seem trivial, but history tells us the gap should be seen as a sell signal.

Big correction dead ahead By John Nyaradi
A growing lineup of fundamental, contrarian, seasonal and technical indicators points to the growing likelihood of a big correction dead ahead.
January 1973 : Dr. Greenspan assures investors that there was no reason why they should not be bullish. One year later, the Dow had lost more than 35%.
December 1996 : Dr. Greenspan characterizes the performance of the stock market as a result of “irrational exuberance.” Seven months later the Dow Jones Industrial Average closes with roughly a 25% gain.
March 15, 2013 : Dr. Greenspan appears on CNBC to emphasize that he would not use the term “irrational exuberance” to describe the current level of investor enthusiasm. Beyond that, Greenspan characterizes stocks as “significantly undervalued.” Time to buy or sell?
Seasonality : We are rapidly approaching the well-known “sell in May and go away,” as developed by the StockTraders Almanac. This well-documented approach indicates that most of the gains in the stock market occur between October and May with the “worst six months” just ahead generating down or flat returns.
Technical : The chart below illustrates the current divergence in global stock markets. The Shanghai Composite Index, the German DAX index and the Vanguard MSCI Europe ETF are all converging in declining patterns, while the S&P 500 continues climbing to record highs. Divergences like these are generally resolved one way or the other, so either the rest of the world’s financial markets need to improve or the S&P 500 could be set to decline.


Tungsten Silver? Fake ASE’s Discovered

Last year news that tungsten filled 10 oz PAMP gold bars surfaced on the market in NYC went viral as long rumored tungsten filled gold bars were finally confirmed to exist.
At the time, we warned readers of rumors of fake silver coins and bars likely filled with molybdenum. 
We now have an official confirmed report of tungsten molybdenum filled American Silver Eagles.

A reader of silver analyst Jeff Lewis
submitted the evidence after acquiring 15 fake ASE’s on ebay (underscoring the need to acquire your precious metals from a reputable dealer who obtains their supply directly from national mints):
Hello Dr. Jeff,
I read you newsletter often and look forward to it on silverseek  as well…
Wanted to let you and readers know, today 4/3/2013, I just received 15 ASE counterfeit fakes, year 2000 from eBay. I thought it was as good deal, also got refund :) .
I work in radiology and had x-rays taken of real and fake, the fake coin can be x-rayed through; writing clearly visualized and authentic ASE can not (a solid white blank)…some kind of alloy I suspect?… Other similar details to the article in Coin World on the fake 2011 ASE’s coins that turned up in Canada in FEB 2013)…Beware…They are out there!!!!
Face and back images are oriented same (eagle and head up, authentic are opposite) and 2000 date slightly smaller in size than authentic ASE date. Fake coin is minimally thicker and minimally smaller in diameter. Non magnetic also.



The fake ASE’s are reportedly slightly underweight, year 2000 in date, and nearly perfect in appearance:

The Counterfeit:
One gram light…30.1g coin, is minimally thicker and minimally smaller in diameter. Side images are oriented same and 2000 date slightly smaller in size than authentic.



With the US Mint unable to keep up with demand and selling ASE’s at an all-time record pace, is this a last ditch effort to dissuade investors from acquiring precious metals, and to keep their wealth in paper assets?

Mining Your iPhone for Gold & Silver- the Infographic

You’ve heard rumors and reports of all the physical gold and silver that is headed to the landfill every year via discarded electronics- but just how much gold, silver, and platinum is really in your iPhone or tablet?
According to Ken Beyer, CEO of the Electronics Recycling Company, there is in fact more gold in a pound of electronics than in a pound of rich gold ore.
Forget South Africa, is Urban Mining the future for gold and silver producers/ recyclers?

Mining Your iPhone for Gold & Silver- the Infographic

From 911Metallurgist

the assault on gold

For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.

When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the US dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver.

The Federal Reserve realized that its massive purchase of bonds in order to keep their prices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver. The Federal Reserve was concerned that large holders of US dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the US dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in US bond and stock prices.

Intelligent people could see that the US government could not afford the long and numerous wars that the neoconservatives were engineering or the loss of tax base and consumer income from offshoring millions of US middle class jobs for the sake of executive bonuses and shareholder capital gains. They could see what was in the cards, and began exiting the dollar for gold and silver.

Central banks are slower to act. Saudi Arabia and the oil emirates are dependent on US protection and do not want to anger their protector. Japan is a puppet state that is careful in its relationship with its master. China wanted to hold on to the American consumer market for as long as that market existed. It was individuals who began the exit from the US dollar.

When gold topped $1,900, Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.

The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.

The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.

For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus the Federal Reserve has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years.
However, for the Russians and Chinese, whose central banks have more dollars than the
y any longer want, and for the 1.3 billion Indians in India, the low dollar price for gold that the Federal Reserve has engineered is an opportunity. They see the opportunity that the Federal Reserve has given them to purchase gold at $350-$400 an ounce less than two years ago as a gift.
The Federal Reserve’s attack on bullion is an act of desperation that, when widely recognized, will doom its policy.

As I have explained previously, the orchestrated move against gold and silver is to protect the exchange value of the US dollar. If bullion were not a threat, the government would not be attacking it.

The Federal Reserve is creating $1 trillion new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices, and a rising interest rate and collapsing bond, stock and real estate markets.

The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for the Federal Reserve to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks’ balance sheets.

When the Federal Reserve can no longer print due to dollar decline which printing would make worse, US bank deposits and pensions could be grabbed in order to finance the federal budget deficit for couple of more years. Anything to stave off the final catastrophe.

The manipulation of the bullion market is illegal, but as government is doing it the law will not be enforced.

By its obvious and concerted attack on gold and silver, the US government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt.

Those who believe in government and those who believe in deregulation will be proved equally wrong. The United States of America is past its zenith. As I predicted early in the 21st century, in 20 years the US will be a third world country. We are halfway there.

read more..

Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously the editor of the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

This article was posted: Friday, April 5, 2013 at 10:32 am

This is What Societal Collapse Looks Like

by Phoenix Capital Research

Add the total and complete hypocrisy of France to the list of reasons to avoid putting a cent in the EU.
We already know about Spain where Prime Minister Mariano Rajoy was “allegedly” receiving bribes from property developers throughout the housing bubble… while THREE different treasurers have been accused of everything from money laundering to fraud.
Rajoy’s defense to the allegations? “I repeat what I said Saturday: everything that has been said about me and my colleagues in the party is untrue, except for some things that have been published by some media outlets.”
Then there’s Italy where Prime Minister Silvio Berlusconi has a track record a mile long (including numerous allegations of sexual misconduct, tax evasion, and collusion with the mafia).
Berlusconi’s latest charge is for bribing an Italian senator to change political sides. His defense? Bribery is a “necessary part of business.” Mind you, this is the same man who once called tax evasion a God-given “right.”
Now there’s France where we find out that the man in charge of catching those committing tax fraud was in fact engaged in massive tax fraud himself.
The French government is in crisis after François Hollande’s former budget minister and tax tsar was charged with tax fraud following a shock confession that he had held a secret foreign bank account for 20 years and had repeatedly lied about it.
Jérôme Cahuzac’s sudden admission that he hid €600,000 (£510,000) offshore for more than two decades is the biggest scandal to hit Hollande’s presidency.

So… in the last few months we’ve discovered…
1)   EU political leaders were on the dole during the boom times often receiving bribes and then hiding the money via tax evasion schemes.
2)   EU political leaders feel it’s acceptable to throw out issues like personal property rights and Democracy during the bust times.
3)   EU political leaders are so corrupt they don’t evendeny their crimes.
4)   When push comes to shove, EU leaders won’t hesitate to STEAL citizens’ money to bail out their banker friends.
At this point, there is literally not one single reason to invest a cent in Europe. Banks are lying about their balance sheets. Politicians are lying about citizen’s rights. The Central Bank is lying about everything…
By the way, Germany’s minster of education recently quit when it was discovered that she plagiarized her PhD thesis.
This is what systemic collapse looks like. This is what happens when society as a whole breaks down. It’s now happening in Europe… the single largest economy in the world. And eventually it will be making its way around the world as the overleveraged financial system breaks down.
You DO NOT want to be on the bad end of this. What’s coming will make what happened following Lehman’s failure look like a joke.
We have just posted a report warning all investors of what’s coming… in it you can find detailed information about how it will unfold and how to prepare yourself and your loved ones.
To read this warning… and take action to protect yourself and your hard earned wealth…

Best Regards
Graham Summers

To the BOJ: Now You're F*ed

Yeah, I know, I know, the central bankers are "under control."
Uh huh.
This is why the 10 year JGB, Japanese 10 year bond rates, traded in a range that was, well, ridiculous.
But here's the real problem:
The BOJ said it will double the monetary base by the end of 2014 through purchases of government bonds, in Japan’s biggest-ever round of asset purchases. Ten-year Japanese government bond yields fell to a record low of 0.315 percent, the yen plunged by the most in 1 1/2 years against the dollar and stocks rallied to a 4 1/2-year high, as investors expect Kuroda to revive an economy beset by prices stuck at 1992 levels.
So if the BOJ thinks it can make inflation go to 2%, what is the embedded loss in that 10y bond?
That's fairly easy; it's 1.685% -- annually.  In other words if you buy said bonds at that yield you are forfeiting about 20% of your purchasing power, assuming that the BOJ manages to hit its target.
Do you really think that anyone is intentionally burning 20% of their funds?  No -- they're wagering the other way -- that the BOJ's actions will fail and the economy will effectively collapse as a consequence.
Now maybe they're right and maybe they're wrong, but with 2% inflation the 10y yield must exceed that in order to provide any sort of actual return, and the magnitude of the moves down at the current level tell you what sort of catfight is being had in terms of beliefs.
The dumb money piled into Japanese equities, just as it has in US equities and almost-certainly under the same rubric -- "there's nowhere else to go."
Uh huh.  That's what the cattle say as they are forced into the chute -- it'll all be ok, there's nowhere else to go.
What's waiting at the other end of that chute?

POVERTY SPIKES TO 1960S LEVEL: Nearly 50 Million Americans Below the Line, Child Hunger Rates ‘Alarmingly High’, Help From Washington Shrinks As Government Struggles With Debt… Does That Mean There’s No Way Out?

U.S. sees highest poverty spike since the 1960s, leaving 50 million Americans poor as government cuts billions in spending… so does that mean there’s no way out?
The number of Americans living in poverty has spiked to levels not seen since the mid 1960s, classing 20 per cent of the country’s children as poor.

It comes at a time when government spending cuts of $85 billion have kicked in after feuding Democrats and Republicans failed to agree on a better plan for addressing the national deficit.

The cuts will directly affect 50 million Americans living below the poverty income line and reduce their chances of finding work and a better life.
Poverty in the USA: Nearly 50 Million Americans on Food Stamps – US food stamp use swells to a record 47.8 million
A record number of Americans are using food stamps, known today as the Supplemental Nutrition Assistance Program (SNAP). Despite official proclamations that the recession has ended and an economic recovery is underway, families are turning to SNAP benefits in record numbers. The working poor comprise a growing number of food stamp recipients, and about half of those receiving benefits are children.
Enrollment in the food stamp program has increased by 70 percent since 2008, to a record 47.8 million people as of December 2012, the Wall Street Journal reported Thursday. The biggest factor driving the increase is the stagnating job market and a rising poverty rate. This means that a staggering 15 percent of the US population receives food stamp benefits, nearly double the rate of 1975.

In 2008, at the onset of the recession, 28.2 million people were enrolled in SNAP. While the official jobless rate, which peaked at 10 percent in 2009, had dipped slightly to 7.7 percent as of February this year, the SNAP program has continued to grow. The Congressional Budget Office (CBO) predicts that food stamp usage will drop only marginally, to 43.3 million people, by 2017. Even this estimate is predicated on the unemployment rate dropping to 5.6 percent over the next four years.
The number of people using food stamps roughly corresponds to the number of Americans living in poverty, which rose to just below 50 million people in 2011. Utilizing the Supplementary Poverty Measure (SPM), which factors in expenses for food, clothing, shelter, health care and other essentials, the US Census Bureau estimates that nearly one in six people in the US is living in poverty.
In U.S., Child Poverty and Hunger Rates Remain Alarmingly High
Alarming statistics released by the U.S. Census Bureau and U.S. Department of Agriculture earlier this month revealed that hunger and poverty rates in the country remain high, particularly among African-American children.
The U.S. Census Bureau determined that 25.1 percent of African-American households and 29.2 percent of households with children are food insecure.
US poverty spikes but help from Washington shrinks as government struggles with debt
OECD: Jobless Young Adults Could Slow Down Global Recovery