Saturday, April 27, 2013

43pct back Anwar as PM, 39pct for Najib

43pct back Anwar as PM, 39pct for Najib
Anwar Ibrahim has a slight edge over Najib Abdul Razak as a prime ministerial candidate, according to a survey by Universiti Malaya's Democratic and Election Centre (Umcedel).

The survey, involving 1,407 respondents residing in Peninsular Malaysia in early April, indicated that 43 percent of voters believe Anwar was qualified to be prime minister while 24 percent of voters disagreed and the rest were unsure.

azlanAs for Najib, 39 percent of voters said he was qualified to be the prime minister, while 31 percent disagreed. Another 30 percent were unsure.
Interestingly, 54 percent of Malay respondents said Anwar was qualified to be prime minister while only 28 percent said the same for Najib.
Among first-time voters, 48 percent of respondents believed Anwar to be qualified as prime minister while 25 percent of respondents said the same for Najib.
Compared to Umcedel's last survey results in January, Najib's rating had dropped four points while Anwar and increased by one point.
In terms of Malay respondents, Najib's rating had dropped by 18 points while Anwar's rating had rose by nine points.
Anwar seen as 'more Islamic'
Both Najib and Anwar are pretty much neck and neck in other areas.
Najib has a slight edge in terms of "friendly-ness" compared to Anwar.
Fifty-four percent of respondents believe Najib to be more "people-friendly" compared to 46 percent who said the same for Anwar.
“Of course Najib is higher (in the polls) - he appears on TV almost every day, compared to Anwar who only appears when there is something not good about him,” said Umcedel director Mohd Redzuan Othman at a press conference today.
Najib is also seen as slightly more capable administration-wise compared to Anwar, while Anwar has a slight lead in terms of accountability and vision to develop the country.
However, Anwar has a clear lead in terms of exhibiting Islamic virtues, with 43 percent of respondents stating that he has such values, as compared to 37 percent saying the same for Najib.
Sex video doesn't sell
Meanwhile, the survey also found that 62 percent of respondents said they were not influenced by a sex video of an alleged Pakatan Rakyat leader floating on the Internet.

azlanThirty nine percent of the respondents said they were convinced that the sex video was a piece of "Umno propaganda" aimed at making personal attacks, while 39 percent said they were unsure.

Twenty two percent of respondents disagreed that the clip was "Umno propaganda".

“It appears that the smear campaign that is going on (in the mainstream media) on Anwar, is not really having a bad effect on him,” said Redzuan.
Meanwhile, the 63 percent of survey respondents said they wanted to see a debate between Najib and Anwar while 19 percent disagreed with the idea.

Native American Reservations: “Socialist Archipelago”

Ludwig von Mises Institute – by Andrei Znamenski
Imagine a country that has a corrupt authoritarian government. In that country no one knows about checks and balances or an independent court system. Private property is not recognized in that country either. Neither can one buy or sell land. And businesses are reluctant to bring investments into this country. Those who have jobs usually work for the public sector. Those who don’t have jobs subsist on entitlements that provide basic food. At the same time, this country sports a free health care system and free access to education. Can you guess what country it is? It could be the former Soviet Union, Cuba, or any other socialist country of the past.  
Yet, I want to assure you that such a country exists right here in the United States. And its name is Indian Country. Indian Country is a generic metaphor that writers and scholars use to refer to the archipelago of 310 Native American reservations, which occupy 2 percent of the U.S. soil. Scattered all over the United States, these sheltered land enclaves are held in trust by the federal government. So legally, many of these land enclaves are a federal property. So there you cannot freely buy and sell land or use it as collateral. On top of this, since the Indian tribes are wards of the federal government, one cannot sue them for breach of contract. Indian reservations are communally used by Indian groups and subsidized by the BIA (the Bureau of Indian Affairs, Department of the Interior) with a current annual budget of about $3 billion dollars. Besides being a major financial resource that sustains the reservation system, BIA’s goal is also to safeguard indigenous communities, or, in other words, to make sure that they would never fail when dealing with the “outside” society. People in the government and many Native American leaders naÏvely believe that it is good for the well-being of the Indians to be segregated and sheltered from the rest of American society.

This peculiar trust status of Indian Country, where private property rights are insecure, scares away businesses and investors.[1] They consider these forbidden grounds high risk areas. So, in Indian Country, we have an extreme case of what Robert Higgs famously labeled “regime uncertainty” that retards economic development.[2] In fact, this “regime uncertainty” borders on socialism. James Watt, Secretary of the Interior in the first Reagan administration, was the first to publicly state this. In 1983, he said (and then dearly paid for this), “If you want an example of the failure of socialism, don’t go to Russia, come to America and go to the Indian reservations.”[3]
In the 1990s, I had a chance to travel through several reservations. Each time when I crossed their borders I was stunned by the contrast between the human landscapes outside and those within Indian reservations. As soon as I found myself within a reservation, I frequently had a taste of a world that, in appearance, reminded me of the countryside in Russia, my former homeland: the same bumpy and poorly maintained roads, worn-out shacks, rotting fences, furniture, and car carcasses, the same grim suspicious looks directed at an intruder, and frequently intoxicated individuals hanging around. So I guess my assessment of the reservation system will be a biased view from a former Soviet citizen who feels that he enters his past when crossing into Native America.
I am going to make a brief excursion into the intellectual sources of this “socialist archipelago.” Since the 1960s, the whole theme of Native America had been hijacked by Marxist scholarship and by so-called identity studies, which shaped a mainstream perception that you should treat Native Americans not as individuals but as a collection of cultural groups, eternal victims of capitalist oppression. I want to challenge this view and address this topic from a standpoint of methodological individualism. In my view, the enduring poverty on reservations is an effect of the “heavy blanket” of collectivism and state paternalism. Endorsed by the federal government in the 1930s, collectivism and state paternalism were eventually internalized by both local Native American elites and by federal bureaucrats who administer the Indians. The historical outcome of this situation was the emergence of “culture of poverty” that looks down on individual enterprise and private property. Moreover, such an attitude is frequently glorified as some ancient Indian wisdom — a life-style that is morally superior to the so-called Euro-American tradition.
Before we proceed, I will give you some statistics. Native Americans receive more federal subsides than anybody else in the United States. This includes subsidized housing, health, education, and direct food aid. Yet, despite the uninterrupted flow of federal funds, they are the poorest group in the country. The poverty level on many reservations ranges between 38 and 63 percent (up to 82 percent on some reservations),[4] and half of all the jobs are usually in the public sector.[5] This is before the crisis of 2008! You don’t have to have a Ph.D. in economics to figure out that one of the major sources of this situation is a systemic failure of the federal Indian policies.

These policies were set in motion during the New Deal by John Collier, a Columbia-educated social worker, community organizer, and utopian dreamer who was in charge of the Native American administration during FDR’s entire administration. English Fabian socialism, the anarchism of Peter Kropotkin, communal village reforms conducted by the Mexican socialist government, and the romantic vision of Indian cultures were the chief sources of his intellectual inspiration. Collier dreamed about building up what he called Red Atlantis, an idyllic Native American commonwealth that would bring together modernization and tribal collectivism. He expected that this experiment in collective living would not only benefit the Native Americans but would also become a social laboratory for the rest of the world. The backbone of his experiment was setting up so-called tribal governments on reservations, which received the status of public corporations. Collier envisioned them as Indian autonomies that would distribute funds, sponsor public works, and set up cooperatives. In reality, financed by the BIA, these local governments began to act as local extensions of its bureaucracy.
It is interesting that these so-called native autonomies received peculiar jack-of-all-trades functions: legislative, executive, judicial and economic — a practice that is totally unfamiliar in America. For example, in the rest of the United States, municipalities and counties do not own restaurants, resorts, motels, casinos, and factories. In Indian Country, by contrast, it became standard practice since the New Deal. By their status, these tribal governments are more interested in distributing jobs and funds than in making a profit. As a result, many enterprises set up on reservations have been subsidized by the government for decades. Under normal circumstances, these ventures would have gone bankrupt. This system that was set up in the 1930s represents a financial “black hole” that sucks in and wastes tremendous resources in the name of Native American sovereignty. This situation resembles the negative effect of foreign aid on Third-World regimes that similarly use the tribalism and national sovereignty excuse as a license to practice corruption, nepotism, and authoritarian rule.

My major argument is that Collier’s utopian project (restoration of tribal collectivism) was not a strange out-of-touch-with-reality scheme but rather a natural offshoot of the social engineering mindset of New Dealers. Moreover, the Indian New Deal was a manifestation of standard policy solutions popular among policy makers in the 1930s, both in Europe and North America. These solutions were driven by three key concepts: state, science, and collectivism. Recent insightful research done by German-American historian Wolfgang Schivelbusch into the economics and cultures of three “new deals” (National Socialist Germany, Mussolini’s Italy, and FDR’s United States) shows that in the interwar period, governments in these three countries (and in other countries, too) pursued extensive state-sponsored modernization. But, simultaneously, to better mobilize their populations and ease the pressure of modernization on the people, they cultivated a sense of community, the organic unity with land and folk cultures.[6]
For example, in 1930s Germany, along with the grand autobahn building project and genetic experimentation, there existed a strong back-to-land movement and attempts to revive Nordic paganism. In the United States, in addition to the National Recovery Administration, Tennessee Valley Authority and similar giant projects, there flourished the community-binding Civilian Conservation Corps (CCC), the Federal Art Project that produced “heroic” community murals as well as thousands of craft items for civic, state, and federal organizations. Furthermore, as “one of the noblest and most absurd undertakings ever attempted by a state” (W. H. Auden), Federal Writers’ Project (also part of WPA) employed thousands of intellectuals who were directed to collect regional folklore and ethnographies, and promote the heritage of local communities. Last but not least, there were projects like the Arthurdale settlement (West Virginia) — a federally sponsored scheme to place unemployed industrial workers on land and mold them into new wholesome American citizens.[7] Even Stalin’s Soviet Union, which was going wild with its aggressive modernization and industrialization, somewhat muted the cosmopolitan message of Communism and became more “organic” in the 1930s, trying to root itself in Russian history, mythology, and folklore — pursuits that became known as National Bolshevism.[8]
Another common sentiment shared by social engineers from California to the Ural Mountains was an unconditional faith in science. We can call it science worship. At that time, policy makers assumed that by using science and expert-scholars government could plan and engineer a perfectly ordered crisis-proof society. F. A. Hayek was the first to draw attention to this aspect of modernity in his seminal book The Counter-Revolution of Science (1955).[9]
The Indian New Deal fits perfectly into those policy trends. In fact, as early as 1928, federal bureaucrats began suggesting that the Indians be organized as public corporations — a fancy innovation that they copied from Europe. Collier, a middle-level New Deal bureaucrat, personified sentiments of modernism I mentioned above. On one hand, he praised Indian tribalism that would help not only the Native Americans but would also help anchor Americans in land and nourish a sense of community among them. Yet, on the other hand, like a mantra, Collier repeated that only a scientific approach would resolve the problems communities faced in the modern world. A recurrent message throughout his essays and articles is a demand that Indian communities be used as laboratories for sociological experimentation. In one of his speeches — which by the way is labeled “United States Administration as a Laboratory of Ethnic Relations” — Collier gave himself an unrestricted political license to experiment with Indian Country. In this speech, he stressed that if a government tried to impose something on an ethic group it would be harmful. Yet, if government intervention was backed up by science and supplemented by generous financial injections to local communities, then the interference would be very benign.[10]
Where did Collier get his “scientific” ideas about segregating Native Americans into cultural groups? The answer is simple: from contemporary anthropological scholarship. At that time, American anthropologists were very much preoccupied with traditional culture. They were on a mission to retrieve ethnographically authentic Indian customs and artifacts. Driven by this romantic notion, anthropologists downplayed the heavy influence of Euro-Americans and African-Americans on indigenous communities. As a result, they totally ignored such segments of Indian population as cowboys, iron, cannery and agricultural workers, and individual farmers. They considered them non-Indian and non-traditional. So, before Collier emerged on the scene in 1933, American anthropology had already invented its own Red Atlantis by classifying the Indians into tribes and relegating them into particular cultural areas.
Pressured by the federal government and lured by an offer of easy credit, a majority of Indians approved of Collier’s plan to restore “tribes” and organized themselves into public corporations. Still, a large minority — more than 30 percent of the Indians — rejected the Indian New Deal. Many of them informed Collier that, in fact, although they were Indians, they had nothing against private property and did not want be segregated from the rest of Americans into tribes under federal supervision. They stressed that they could not stomach his communism and socialism, and wanted instead to be treated as individuals. Collier was very much surprised and angered by these dissidents, who organized themselves and founded the American Indian Federation (AIF) to oppose him. In a bizarre motion, he dismissed them as fake Indians. To him, the true Indian was expected to be a spiritually-charged die-hard collectivist. Historian Graham Taylor, who explored in detail Collier’s attempts to railroad tribalism in Indian Country, stressed, “His basic orientation was toward groups and communities, not individuals, as building blocks of society.”[11] Later, Collier even resorted to nasty tricks labeling his Indian opponents as Nazi collaborators, and had one of them investigated by the FBI. Eventually, government squashed AIF as part of a larger FDR effort to use the FBI to phase out the “right-wing fifth column” elements in the United States.[12] D. H. Lawrence, the famous British novelist, who rubbed shoulders with Collier as early as 1920, had a chance to personally observe his aggressive zeal on behalf of Indian culture. This British writer prophetically noted that Collier would destroy the Indians by setting “the claws of his own white egoistic benevolent volition into them.”[13]

To those dissident Native Americans who repeatedly challenged him about going tribal, Collier explained that their individualism was obsolete. In his view, state-sponsored tribalism was modern and progressive. In his address given before the Haskell Institute, Collier instructed students to cast aside “shallow and unsophisticated individualism.” He warned the Indian youngsters that this useless trait of dominant culture would not be “the views of the modern white world in the years to come.” Instead, he called on the new Indian generation to come help “the tribe, the nation, and the race.” He invited them to step into a radiant future that included such “necessities of modern life” as municipal rule, public ownership, cooperatives, and corporations.[14]
The system set up by Collier is still in place and functioning. What are its future prospects? As I mentioned, the Indian “socialist archipelago” is relatively modest in its size. It occupies only 2 percent of U.S. soil and shelters only 22 percent of 5 million Indians now living in the United States. Unlike bailing out such bankrupt states as California, New York, and Illinois, socializing subsidies to Indian Country is not too painful for a huge American budget. So, potentially, this “socialist archipelago” can exist forever as long as American taxpayers are ready to put up with its peculiar status, and unless, of course, American welfare capitalism goes down under the burden of its numerous entitlement obligations. So far, protected by the shield of trust status and guaranteed financial injections, Indian Country is in pretty “good shape,” unlike, for example, some current Third-World autocracies that are not always sure if Western aid will continue to flow. All in all, like the Social Security scheme, farmers’ subsidies, and many other “wonderful” products of the New Deal alchemical lab, Red Atlantis is still with us alive and well.

[1] Fergus Bordewich, Killing the White man’s Indian: Reinventing Native Americans at the End of the Twentieth Century (New York: Doubleday, 1997),p. 126; John Koppisch, “Why Are Indian Reservations So Poor? A Look At The Bottom 1%,” Forbes, December 13 (2011), available at
[2] Robert Higgs, “Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War,” The Independent Review 1, no. 4 (1997): 561-590.
[3] Watt Sees Reservations As Failure of Socialism,” The New York Times, January 19, 1983,
[4] “Native American Aid, Living Conditions,” available at
[5] Rachel L. Mathers, “The Failure of State-Led Economic Development on American Indian Reservations,” The Independent Review 17, no. 1 (2012): 176.
[6] Wolfgang Schivelbusch, Three New Deals: Reflections on Roosevelt’s America, Mussolini’s Italy, and Hitler’s Germany, 1933-1939 (New York: Picador, 2007).
[7] For more about the Arthurdale project, see C.J. Maloney, Back to the Land: Arthurdale, FDR’s New Deal, and the Costs of Economic Planning (New York: Wiley, 2011).
[8] David Brandenberger, National Bolshevism: Stalinist Mass Culture and the Formation of Modern Russian National Identity, 1931-1956 (Cambridge, MA and London: Cambridge University Press, 2002).
[9] F. A. Hayek, The Counter-Revolution of Science (New York: Free Press, 1955).
[10] John Collier, “United States Administration as a Laboratory of Ethnic Relations,” Social Research 12, no. 3 (1945): 301.
[11] Graham Taylor, The New Deal and American Indian Tribalism: The Administration of the Indian Reorganization Act, 1934-45 (Lincoln: University of Nebraska Press, 1980), p. 23.
[12] Marci Jean Gracey, Attacking the Indian New Deal: The American Indian Federation and the Quest to Protect Assimilation (Masters’ Thesis, Oklahoma State University, 2003), p. 47.
[13] Joel Pfister, Individuality Incorporated: Indians and the Multicultural Modern (Durham, NC: Duke University Press Books, 2004), p. 182.
[14] Kenneth Philp, John Collier’s Crusade for Indian Reform, 1920-54 (Tucson: University of Arizona Press, 1977), p. 161.

Comex Physical Gold Plummets – Gold Disappearing from Depositories Everywhere

goldvault2Liberty Gold and Silver
The worldwide gold battle between paper sellers and physical buyers rages on into its second week…and the physical forces are winning big time!! Ever since the world banking elite two weeks ago attempted to terrify physical precious metals owners by flooding the paper markets with over $50 billion of naked sell orders, something really strange has happened.  
Instead of panicking and selling their physical gold and silver, private investors have gone on one of the greatest single precious metals buying spree in memory. As reported here , buying demand has surged so dramatically that wholesale brokers and retail dealers on all continents have already or soon will, if this trend continues, exhausted nearly all available inventory.
As this trend continues unabated, another very frightening trend that was first reported several weeks ago, has accelerated at the COMEX and other mega-bank bullion depositories; namely, a giant draw down in warehouse inventories. How gigantic you ask?
Consider these glaring statistics: During the first ninety days of this year, and without any announcement, gold stocks on deposit at the COMEX warehouse nosedived by the largest figure ever recorded for one quarter. Combined drainage of physical gold reached nearly two million ounces, or about $3 billion at current prices. Reporting on this situation, chart guru Nick Laird, commented:
“Eligible stocks which are owned in LBMA/COMEX good delivery form are being drawn down — which means they are being removed from the warehouses. As to how and why they are [being] removed, that is a mystery. [Up until now], eligible stocks were on the continual increase throughout the bull market. Now that trend has changed.”
However, if the banking elite thought that the recent frightening $200 plus two day drop in the paper gold price would loosen the grip of the gold bugs and maybe help swell the depleted coffers of the COMEX, LBMA, and other large bullion banks, they were shocked and disappointed. The plunging inventories of the COMEX have continued this week and are metastasizing to the world’s largest fund depositories. Precious metals publisher, Tekoa Da Silva, is reporting that in the last four weeks, gold bullion deposits held for ETFs, various funds, and futures exchanges have “collapsed by over 5.5 million ounces, or in dollar terms, by over seven billion dollars…The largest physical removals reported by the COMEX at 1.4 million ounces, or nearly $2 billion, and the GLD [the world’s largest gold ETF], which reported total inventory removal of nearly 4 million ounces, or roughly over $5.6 million.”
Here is a chart depicting the extended gold inventory collapse at COMEX warehouses.
But the massive liquidation of gold stocks has not been confined to the COMEX. Liquidation of physical reserves has been going continuing this year at various major bullion banks, the largest of which are JP Morgan Chase and Scotia Moccata Depository. Here are the charts for these companies:
JP Morgan Chase has reported that its gold stockpiles have dropped by over 1.2 million ounces, which equates to a staggering $1.8 billion dollars worth of physical gold removal from its vaults during the last 120 days.
Scotia Mocatta’s gold stockpile removals were nominally smaller in size when compared to JP Morgan Chase’s, but registered in at over 650,000 ounces of gold, or over $1 billion dollars worth that has been removed from its vaults in just the last 90 days.
What is important to understand from these charts is that the draw down in gold inventories started before the recent paper price beat down. In other words, this appears to be a very orchestrated removal of physical gold. Where is it going? We are not exactly sure but we can tell you where it is NOT going. It is not going to any of the wholesale depositories or retail bullion dealers throughout the world. Their shelves are almost completely bare of silver and beyond extremely thin for gold bars and coins sought by frenzied individual buyers worldwide.
Here is a just a guess where we think this gold may be hiding. It could well have been rounded up to satisfy large angry world clients in Asia, the Middle East, and elsewhere who have threatened to blow up the Bernie Madoff Ponzi scheme shortages at various international trading exchanges unless they are made whole with physical delivery on their investments.
Another possibility is that the gold is being sequestered in some place like Basel, Switzerland, or some other nefarious IMF enclave, as future backing for a possible new world reserve currency that will be rolled out as major world currencies and markets collapse under their non-repayable debts.
These are just guesses, you understand, but somehow, they seem to have the ring of plausibility. At any rate, it should be obvious by now that the only gold and silver that you can trust actually exists is that which you can hold in your own hands. As for the rest of it, it’s anybody’s guess.
To learn more about the rewards of precious metals investing, including how to fund your existing IRA with gold or silver, call Liberty Gold and Silver seven days a week at 888.751.3330. To learn about the most generous referral program in the precious metals industry, please visit the Liberty Gold and Silver Referral Program. We’re happy to spend as much time as you need to discuss the details with you.

The great Spanish nation can end its crucifixion at will by leaving EMU

The mind goes numb. Spanish unemployment jumped by yet another 237,000 people in the first quarter to 6.2 million, or 27.2pc.
This is equivalent to roughly 8.3 million in Britain, or 39 million in the United States. The country is losing 3,581 jobs a day. There are 1.9m households where no member of the family has a job.
As you can see from this graphic, the rate has reached 36.8pc in Andalusia, Spain's most populous region.
Click for original
The national rate of unemployed youth is 57.2pc, rising to 70pc in the Canaries.
This is in spite of mass emigration by Spanish youth. El Pais reports that 260,000 young people aged between 16 and 30 left the country last year.
A great number have come to London. They are all around the Telegraph offices at Victoria working in Pret a Manger and Starbucks, delightfully well-mannered.
Others have gone to Germany, or the Persian Gulf, or further afield. Such is Spanish diaspora, unseen since mass exodus after the Civil War, or the Conquista.
Some claim that unemployment was almost as high in the early 1990s. It was not. A study by the Bank of Spain found that today's rate would be 4pc to 5pc higher under the old way of counting, nearer 32pc.
Nothing like this has been seen before in modern times. Spain's jobless crisis in the 1930s was much milder, and for a good reason. Spain was not strapped the deflationary disaster of the interwar Gold Standard. It went its own way.
The Rajoy government said today that the crisis is "dramatic" but insisted that the country has regained the confidence of the financial markets and is at last on the road to recovery. Sadly this is not the case. The bond vigilantes have been quiet only because the ECB has promised to backstop the Spanish debt market. The crisis in the real economy is getting worse. The City knows that.
Public debt jumped from 69pc to 84pc of GDP last year, and only part was due to the bank bail-out. That is a big jump in one year and it understates the actual debt. David Owen from Jefferies says the real figure is 113pc once trade credits and unpaid bills are included, a figure available from the Bank of Spain.
The deficit rose from 9.4pc to 10.6pc last year (or 7pc without bank costs). The IMF expects it to remain stuck at 6.9pc in 2014. The improvement is glacial. It has echoes of Greece, and Portugal. The economic damage caused by the austerity cuts is eroding tax revenues, feeding an infernal downward spiral.
Household consumption is collapsing, and so are house prices, as you can see:

As usual, there is much anguish, and complaints against "ultra-austerity" and the EU-IMF Troika (hardly the issue in Spain). The unions talk of a "national emergency". Usual stuff. Yet almost nobody in Spanish public life is willing to admit that the cause of all this grief is the structure of monetary union itself.
The euro led to negative interest rates of minus 2pc in Spain earlier in the decade, and set off an uncontrollable boom. The country now faces an uncontrollable bust. The elemental issue is loss of sovereign control over its exchange rate and monetary policy.
I am surprised that a great historic nation should put up with 27pc unemployment, or accept vassal status to an incompetent and dysfunctional EMU regime. Does anybody in Madrid think that EU officials in Brussels actually know what they are doing? Or that the monetary provincials in Frankfurt (Draghi excepted) are much better? Or that the Eurogroup is a civilised organisation after the way it treated Cyprus?
The EU Project is of course motherhood and apple pie in Spain. It is interwoven in the public thinking with the arrival of democracy after Franco and the re-entry of Spain into the European mainstream. The Brussels subsidies for a quarter century created a dependency culture, and warped the Spanish mind.
Well, minds can be unwarped.
There are a few lone voices willing to utter heresy. I am an avid follower of Ilusion Monetaria, a blog by ex-Bank of Spain economist (and monetarist) Miguel Navascues here.
Dr Navascues calls a spade a spade. He exhorts Spain to break free of EMU oppression immediately.
On the Left, Catalan economist David Lizoain says the time has come for Social Democrats to ask whether EMU is doing more harm than good and therefore should be dismantled.
I leave you with this extract:
On account of the architecture of the euro zone, the countries of the European periphery cannot engage in a fiscal stimulus, a monetary stimulus, a competitive devaluation, or a financial restructuring. Trapped in the midst of recessionary downward spirals, their policy space is extremely limited. The euro zone framework has generated an economic depression and a crisis of democratic legitimacy. These are fertile conditions for even greater political failures, not for success.
Take the Spanish case: A stimulus originating in the public sector is both prohibited, on account of existing deficit targets, and impossible, on account of financing costs on the private markets. Lending channels in the private sector are blocked, as the financial sector’s balance sheet is still overwhelmed by the ever-increasing bad debts originating from the bursting of the real estate bubble. The obvious move would be to engage in a massive financial restructuring (i.e. let the bad banks fail).
This is not possible because the ECB will not act as a lender of last resort. Banks in the periphery cannot fail without wiping out small savers. In order to guarantee deposit insurance, a bail-out of the private sector (and Memorandum of Understanding) was therefore required. Last June the leaders of Europed stated: “We affirm that it is imperative to break the vicious circle between banks and sovereigns.” Events have shown this to have been an empty promise. The cost of the bailing out the banks is now being passed onto the public purse, and the drowning banks are pulling down the sovereigns with them. But if this were not bad enough, the Cyprus deal shows that not even deposit insurance for small savers can be taken for grant
The turn of events in Cyprus makes it far more difficult to defend the proposition that change in Europe is just around the corner, and that it will be for the better. The case for optimism does not rest on solid empirical foundations; there is little evidence of strong majorities in Germany favouring the reforms that would be needed to end the crisis and balance the euro zone
If the countries of the periphery were on a gold standard, they would have already been forced out of it. The euro-induced depression is a breeding ground for populism, anti-politics, extremism and bad-blood in general; it is a toxic environment for dreams of an ever closer Union.
The course of events demands a lifting of the taboo surrounding the dissolution of the euro zone. If solidarity cannot be achieved through a progressive reform of Europe’s economic institutions, then perhaps it is time to consider taking them apart. Perhaps the only way to save the Union is to ditch the euro.
There is hope yet.

People & Power - America's War Games

A Financial And Systemic Disaster Is Coming For Both Central And Bullion Banks That Has Been Brewing For A Long Time

Physical gold vs paper gold: waiting for the dam to break

In this article I will argue that the recent slide in the gold price has generated substantial demand for bullion that will likely bring forward a financial and systemic disaster for both central and bullion banks that has been brewing for a long time. To understand why, we must examine their role and motivations in precious metals markets and assess current ownership of physical gold, while putting investor emotion into its proper context.
In the West (by which in this article I broadly mean North America and Europe) the financial community treats gold as an investment. However, of the global pool of gold, which GoldMoney estimates to be about 160,000 tonnes, the amount actually held by western investors in portfolios is a very small fraction of this amount. Furthermore investor behaviour, which in itself accounts for just part of the West’s bullion demand, is sharply at odds with the hoarders’ objectives, which is behind underlying tensions in bullion markets. To compound the problem, analysts, whose focus incorporates portfolio investment theories and assumptions, have very little understanding of the economic case for precious metals, being schooled in modern neo-classical economic theories.
These economic theories, coupled with modern investment analysis when applied to bullion pricing, have failed to understand the growing human desire for protection from monetary instability. The result has for a considerable time been the suppression of bullion prices in capital markets below their natural level of balance set by supply and demand. Furthermore, the value put on precious metals by hoarders in the West has been less than the value to hoarders in other countries, particularly the growing numbers of savers in Asia.
These tensions, if they persist, are bound to contribute to the eventual destruction of paper currencies.

Central banks bought record amount of gold before collapse

Central banks went on the biggest spending spree in 50 years, buying the most gold since 1964 last year. Their high stockpiles of devalued metal probably makes them the biggest losers of the gold slump.
Central banks have bought the most gold since 1964 in 2012 just before the precious metal took a plunge on the stock market, and are now stuck with record losses and a stockpile of devalued gold. The World Gold Council reported central banks added 534.6 metric tons to worldwide reserves, and then the price fell.

“Central banks are strategic investors, and look at it as the currency of the last resort that lenders will gladly take,” said Rachel Benepe, who helps manage $2.2 billion of assets at the First Eagle Gold Fund in New York. “When there are any big moves, investors get panicked. Nothing has changed from our viewpoint. Gold is a hedge against policy actions, and governments globally are announcing policies that are unproven.”
Gold Rout for Central Banks Buying Most Since 1964: Commodities
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Gold Retraces Half Of Record Plunge
US Mint Gold Sales Surge To Highest Since 2009
“Panic” For Physical Gold Spreads To UK Where Royal Mint Sales Of Gold Coins Triple

Investors Are Panicking!!! Massive run on gold: JPM’s eligible gold plunged from 402.4K ounces to just 141.6K ounces, a drop of 65% in 24 hours and premiums   

We are confident that in the aftermath of our article from last night “Just What Is Going On With The Gold In JPMorgan’s Vault [2]?” in which we showed the absolute devastation of “eligible” (aka commercial) gold warehoused in JPM’s vault just over the Manhattan bedrock at 1 Chase Manhattan Place (and also in the entire Comex vault network in the past month), we were not the only ones checking every five minutes for the Comex gold depository update for April 25 [3]. Moments ago we finally got it, and it’s a doozy. Because in just the past 24 hours, from April 24 to April 25, according to the Comex, JPM’s eligible gold plunged from 402.4K ounces to just 141.6K ounces, a drop of 65% in 24 hours,and  the lowest amount of eligible gold held at the vault on record, since its reopening in October 2010!
Everyone has seen what a run on the bank looks like. Below is perhaps the best chart of what a “run on the vault” is.

Shortages of physical gold now a global phenomenon

Those who precipitated the recent fall in the gold price may have unleashed a beast that will put future efforts at market manipulation way out of their control. Physical metal is now seemingly becoming key in investors’ minds.
They are no longer putting any faith in paper gold and this is being seen in all quarters with reports from virtually all continents of demand exceeding supply of physical metal, and some hefty premiums being applied on sales of gold bullion.
Add to this particularly strong demand from Asia – reports have put the volume of deliveries into the Shanghai exchange so far this year of over 1,000 tonnes as actually exceeding estimated new mine production over the period.

UNPRECEDENTED Shortages Of Ammo, Physical Gold And Physical Silver

All over the United States we are witnessing unprecedented shortages of ammunition, physical gold and physical silver.  Recent events have helped fuel a “buying frenzy” that threatens to spiral out of control.  Gun shops all over the nation are reporting that they have never seen it this bad, and in many cases any ammo that they are able to get is being sold even before it hits the shelves.  The ammo shortage has already become so severe that police departments all over America are saying that they are being told that it is going to take six months to a year to get their orders.  In fact, many police departments have begun to trade and barter with one another to get the ammo that they need.  Meanwhile, the takedown of paper gold and paper silver has unleashed an avalanche of “panic buying” of physical gold and physical silver all over the planet.  In the United States, some dealers are charging premiums of more than 25 percent over the spot price for gold and silver and they are getting it.  People are paying these prices even though they are being told that delivery will not happen for a month or two in many cases.  Some dealers are feverishly taking as many orders as they can, and they are just hoping that they will be able to get the physical gold and silver to eventually fill those orders.  Personally, I have never seen anything like this.  If things are this tight now, what is going to happen when the next major financial crisis strikes and people really begin to panic?

Stunning & Massive Run On Physical Gold & Silver Continues

“One of my colleagues, who was in Tokyo, just told me there were stunning $500 premiums on one ounce American Gold Eagles, and there were none to be found anywhere in Tokyo.  So the Japanese were taking advantage of the price drop to buy seemingly everything available in terms of physical gold in the entire country.
They were dumping their yen and other currency positions and putting massive amounts into physical gold.  This was happening as fast as the Japanese could do it, and they did not mind paying quite a premium for physical gold.  What we have seen around the world has literally been a run on physical gold.  People all over the world are simply turning in their fiat money for physical gold, and silver as well.

Sinclair – Full-Blown Panic As People Ask “Where Is The Gold?”

The question now is, ‘Where has the gold gone?’ Who has all of this gold? Because of the nature of gold leasing, all of this gold has been purchased and it has gone somewhere. The reality of the empty vaults reveal that the gold has gone missing.

Drop In Gold Pricing Triggers Rush To Buy!

Gold’s biggest drop in three decades caused what has become an ongoing global rush into physical gold. Reports are still flooding in at the same pace from around the world, confirming the extent of recent purchasing and persistent shortages.

COMEX Hurtling Towards Default And People Will Be “Settled” With Dollars, No More Metal Will Be Delivered!

The 1 Percent’s Solution

Economic debates rarely end with a T.K.O. But the great policy debate of recent years between Keynesians, who advocate sustaining and, indeed, increasing government spending in a depression, and austerians, who demand immediate spending cuts, comes close — at least in the world of ideas. At this point, the austerian position has imploded; not only have its predictions about the real world failed completely, but the academic research invoked to support that position has turned out to be riddled with errors, omissions and dubious statistics.

Yet two big questions remain. First, how did austerity doctrine become so influential in the first place? Second, will policy change at all now that crucial austerian claims have become fodder for late-night comics?
On the first question: the dominance of austerians in influential circles should disturb anyone who likes to believe that policy is based on, or even strongly influenced by, actual evidence. After all, the two main studies providing the alleged intellectual justification for austerity — Alberto Alesina and Silvia Ardagna on “expansionary austerity” and Carmen Reinhart and Kenneth Rogoff on the dangerous debt “threshold” at 90 percent of G.D.P. — faced withering criticism almost as soon as they came out.
And the studies did not hold up under scrutiny. By late 2010, the International Monetary Fund had reworked Alesina-Ardagna with better data and reversed their findings, while many economists raised fundamental questions about Reinhart-Rogoff long before we knew about the famous Excel error. Meanwhile, real-world events — stagnation in Ireland, the original poster child for austerity, falling interest rates in the United States, which was supposed to be facing an imminent fiscal crisis — quickly made nonsense of austerian predictions.
Yet austerity maintained and even strengthened its grip on elite opinion. Why?
Part of the answer surely lies in the widespread desire to see economics as a morality play, to make it a tale of excess and its consequences. We lived beyond our means, the story goes, and now we’re paying the inevitable price. Economists can explain ad nauseam that this is wrong, that the reason we have mass unemployment isn’t that we spent too much in the past but that we’re spending too little now, and that this problem can and should be solved. No matter; many people have a visceral sense that we sinned and must seek redemption through suffering — and neither economic argument nor the observation that the people now suffering aren’t at all the same people who sinned during the bubble years makes much of a dent.
But it’s not just a matter of emotion versus logic. You can’t understand the influence of austerity doctrine without talking about class and inequality.
What, after all, do people want from economic policy? The answer, it turns out, is that it depends on which people you ask — a point documented in a recent research paper by the political scientists Benjamin Page, Larry Bartels and Jason Seawright. The paper compares the policy preferences of ordinary Americans with those of the very wealthy, and the results are eye-opening.
Thus, the average American is somewhat worried about budget deficits, which is no surprise given the constant barrage of deficit scare stories in the news media, but the wealthy, by a large majority, regard deficits as the most important problem we face. And how should the budget deficit be brought down? The wealthy favor cutting federal spending on health care and Social Security — that is, “entitlements” — while the public at large actually wants to see spending on those programs rise.
You get the idea: The austerity agenda looks a lot like a simple expression of upper-class preferences, wrapped in a facade of academic rigor. What the top 1 percent wants becomes what economic science says we must do.
Does a continuing depression actually serve the interests of the wealthy? That’s doubtful, since a booming economy is generally good for almost everyone. What is true, however, is that the years since we turned to austerity have been dismal for workers but not at all bad for the wealthy, who have benefited from surging profits and stock prices even as long-term unemployment festers. The 1 percent may not actually want a weak economy, but they’re doing well enough to indulge their prejudices.
And this makes one wonder how much difference the intellectual collapse of the austerian position will actually make. To the extent that we have policy of the 1 percent, by the 1 percent, for the 1 percent, won’t we just see new justifications for the same old policies?
I hope not; I’d like to believe that ideas and evidence matter, at least a bit. Otherwise, what am I doing with my life? But I guess we’ll see just how much cynicism is justified.

Growth in U.S. Trails Forecasts as Defense Spending Falls

The U.S. economy grew less than forecast in the first quarter as a drop in defense outlays undercut the biggest increase in consumer spending in two years.
Gross domestic product rose at a 2.5 percent annualized rate following a 0.4 percent fourth-quarter advance, according to data from the Commerce Department issued today in Washington. The median estimate of 86 economists surveyed by Bloomberg called for a 3 percent gain.
Another report today showed consumer confidence fell in April, signaling that households, which sustained spending last quarter by dipping into savings, may not be able keep shopping at the same pace as tax increases start to pinch. Across-the board cutbacks in federal government spending that took effect in March will also take a toll on growth.
“It is encouraging that the consumer maintained a relatively solid pace of spending despite the headwinds,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, the best payroll forecaster in the past two years, according to data compiled by Bloomberg. “We’ll see a bit of deceleration this quarter. The payroll tax is still weighing on consumers, and March’s weaker employment numbers are not going to be friendly for spending.”
Stocks fell amid disappointing corporate earnings reports and the economic data. The Standard & Poor’s 500 Index dropped 0.2 percent to 1,582.24 at the close in New York. Treasuries rallied, sending the yield on the benchmark 10-year note down to 1.66 percent from 1.71 percent yesterday.

Survey Results

U.S. GDP forecasts in the Bloomberg survey ranged from 1 percent to 3.8 percent. Today’s release is the first of three for the quarter, with the other releases scheduled for May and June when more information becomes available.
Consumer spending, accounting for about 70 percent of the economy, climbed at a 3.2 percent pace in the first quarter, the most since the fourth quarter of 2010.
Danielle Colbert, a 33-year-old from southern Maryland, said she is shopping for home goods, frequenting stores like Pier 1 Imports Inc., Regency Furniture Inc. and Macy’s Inc. (M) She and her husband, both government employees, built a house last year, taking advantage of low interest rates.
The economy is improving “very, very slowly” as home prices appreciate, said Colbert, who was looking at clothes in the women’s department of Macy’s.

Sentiment Falls

Not all consumers are as upbeat. The Thomson Reuters/University of Michigan final index of consumer sentiment declined to 76.4 from 78.6 a month earlier. Nonetheless, the figure exceeded the median projection in a Bloomberg survey which called for a drop to 73.5. The preliminary April reading issued two weeks ago was 72.3.
Americans boosted spending by putting less money in the bank, the Commerce Department figures showed. The saving rate dropped to 2.6 percent in the first quarter, the lowest since the last three months of 2007, from 4.7 percent in the prior period.
Another reason for the slump in saving was that earnings plunged. Disposable income adjusted for inflation dropped at a 5.3 percent annualized rate from January through March, the biggest drop since the third quarter of 2009, after a 6.2 percent gain in the fourth quarter.
In addition to the increase in the payroll tax last quarter, the hit to incomes came after companies accelerated dividend and bonus payments in the fourth quarter.

Stockpiling, Housing

Aside from consumer spending, growth in the first quarter was driven by a rebound in stockpiling and a gain in residential construction.
Government outlays declined for the 10th time in the past 11 quarters, restraining growth. Defense spending dropped at an 11.5 percent annualized pace following a 22.1 percent plunge in the last three months of 2012. That was the biggest back-to-back decline on average since 1954, when the military demobilized after the Korean War.
While the drop over the past six months probably reflects the winding down of military operations in Iraq and Afghanistan, it’s also a harbinger of things to come as across-the-board cuts, or sequestration, take effect.
The lagged effect from a two percentage-point jump in the payroll tax at the start of 2013, and $85 billion in automatic budget cuts that began March 1, may take a toll this quarter. The economy will grow at a 1.5 percent pace, before reaccelerating to an average 2.4 percent rate of expansion in the last six months of the year, according to a separate Bloomberg survey.
The Congressional Budget Office has estimated sequestration alone will reduce GDP this year by 0.6 percentage point.

Less Inflation

The GDP report also showed price pressures remain contained. A measure of inflation tied to consumer spending, the one tracked by Federal Reserve policy makers, rose at a 0.9 percent annualized rate in the first quarter, down from a 1.6 percent gain in the previous three months. Central bankers have said their goal is to keep price increases at about 2 percent.
The lack of inflation means the Fed will probably maintain bond purchases when it meets next week.
“The Fed is missing its growth forecast, the Fed is missing its inflation forecast, and there is some risk that they are going to continue missing on both,” said Kevin Harris, chief economist at Informa Global Markets in New York, who projected GDP would climb at a 2.6 percent pace and is the third-best U.S. growth forecaster over the past two years, according to Bloomberg calculations. “The Fed might have to react. They are going to buy more assets.”

Looking Ahead

CSX Corp. (CSX), the largest East Coast rail carrier, is among companies looking ahead to a better second half of 2013. Jacksonville, Florida-based CSX reported first-quarter earnings that topped analysts’ estimates.
The key economic indicators “point to slow steady growth in the U.S. economy,” Clarence Gooden, chief commercial officer, said on an April 17 earnings call. “Forward projections show continued slow growth in the near term, with improved growth rates later in the year.”
One area that has seen sustained gains in demand is automobiles. Cars (SAARTOTL) sold at an average 15.3 million annualized rate in the first quarter, the most since the same period in 2008, according to figures from Ward’s Automotive Group.
“The only negative real headwinds we see are higher taxes and potentially lower government spending,” Kurt McNeil, vice president of U.S. sales and service at Detroit-based General Motors Co. (GM), said on an April 2 conference call. “Everything else seems to be pretty positive,” he said, mentioning jobs, housing and stock market performance.

Housing Rebound

The housing market also remains a bright spot as borrowing costs near a record low help draw buyers. Residential construction increased at a 12.6 percent annualized rate last quarter, adding 0.3 percentage point to growth, today’s GDP report showed.
Business investment, another contributor to growth, is cooling as sequestration takes hold. Corporate spending on equipment and software climbed at a 3 percent pace from January through March after rising at an 11.8 percent rate in the previous quarter.

The Math of The Greatest Wealth Transfer In Human History – Silver to $190,000

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Weakending Economy + Gov’t Spending Cuts + High Taxes = Recession? GDP And Durable-Goods Orders Both Came In Substantially Weaker Than Expected

Overhyped Q1 GDP Grows By Only 2.5%, Biggest Miss To Expectations Since September 2011

Less than an hour ago we speculated that “it wouldn’t be surprising for GDP to come substantially weaker than expected, only to be revised higher (or lower) subsequently.” Sure enough, we have gotten at least the first part right for now, with the advance Q1 GDP number printing a very disappointing 2.5%, on expectations of a 3.0% increase, up from 0.4% in Q4, and the biggest miss since Q3 2011. The reason for the big miss: Inventory and Fixed Investment came well below expectations, comprising 1.03% (of which autos represented 0.24%) and 0.53% of the 2.5% annualized increase GDP. Kiss the great CapEx investment story goodbye.
The only silver lining in today’s otherwise very weak report: Personal Consumption Expenditures, which were a sizable 3.2% versus the 2.8% expected, and amounted to 2.24% or virtually all of the net Q1 GDP growth. So far so good .The bad news, however, is that this number will not sustain into Q2 and look for expenditures to plunge in the coming quarter.

Durable-goods orders sink 5.7% in March

Demand softens for a variety of manufactured products
Orders for durable goods fell a seasonally adjusted 5.7% last month to mark the biggest drop since last August,the Commerce Department said Wednesday.
Economists surveyed by MarketWatch had expected a 3.2% decline.

Durable goods are products designed to last at least three years. These orders are critical component of U.S. growth since rising sales of autos, computers, furniture and so forth signal an improving economy.
The decline in orders is the latest in a string of reports that suggest the manufacturing sector cooled off a bit toward the end of the first quarter — along with the broader economy.

Oops! Economic Growth Wasn’t So Great After All

U.S. economic growth regained speed in the first quarter, but not as much as expected, which could heighten fears the already weakening economy could struggle to handle deep government spending cuts and higher taxes.

Economists caution that it is too early to blame the cooling in business investment and other more recent signs of economic softness on the $85 billion in mandatory government spending cuts, known as the sequester, that began on March 1.
Homebuilding marked an eighth straight quarter of growth, though the pace moderated from the fourth quarter. Housing added to growth last year for the first time since 2005 and its recovery should help ensure the economy does not contract.
While export growth rebounded, it was outpaced by imports, resulting in a trade deficit that cut off half a percentage point from output.

Record 1 out of 5 Households on Food Stamps

The latest available data from the United States Department of Agriculture (USDA) shows that a record number 23 million households in the United States are now on food stamps.
The most recent Supplemental Assistance Nutrition Program (SNAP) statistics of the number of households receiving food stamps shows that 23,087,886 households participated in January 2013 – an increase of 889,154 families from January 2012 when the number of households totaled 22,188,732.

Fed balance sheet grows to record again in latest week – stood at $3.276 trillion on April 24

“The Fed’s balance sheet – a broad gauge of its lending to the financial system – stood at $3.276 trillion on April 24, up from $3.252 trillion on April 17.”

U.S. Treasury securities held by the Federal Reserve: All Maturities (TREAST)

2013-04-24: 1,836,227 Millions of Dollars   Hide Last 5 Observations
2013-04-17: 1,825,042
2013-04-10: 1,814,482
2013-04-03: 1,805,639
2013-03-27: 1,794,459
Weekly, As of Wednesday, Not Seasonally Adjusted, Updated: 2013-04-25 3:53 PM CDT
Graph of U.S. Treasury securities held by the Federal Reserve: All Maturities


Confirmed: Central Banks Now Buying Stocks

Central Banks Now Buying StocksProfit Confidential – by Michael Lombardi, MBA
As of April 22, 67% of the companies in the key stock indices that reported their corporate earnings were able to beat earnings estimates, but only 44% of them were able to exceed the revenue expectations of Wall Street analysts. (Source: Reuters Alpha Now, April 22, 2013.)
Looking at all this, you have to ask: why are the key stock indices rising when the underlying reasons for their rise (corporate earnings and growth) are diminishing?  
The key stock indices aren’t climbing because of fundamental reasons. The harsh reality is that the yields from other investments are too low, so investors are forced to take higher risks to earn a decent rate of return. Just look at the yields on bonds of stronger governments around the world—most are barely beating inflation.
Even the most conservative investors, central banks, are rushing toward the stock market. According to a survey done by Central Banking Publication and Royal Bank of Scotland Group PLC of 60 central banks, 23% of them said they either own equities or plan to purchase them in the future. (Source:Bloomberg Businessweek, April 25, 2013.)
The central bank of Israel bought stocks for the first time last year. Similarly, the central bank of Switzerland and the Czech National bank have increased their stock holdings to at least 10% of their reserves.
The Japanese central bank has done the same. The Bank of Japan, the central bank with the second most reserves, expects to boost its holdings of equity exchange-traded funds (ETFs) to 3.5 trillion yen (about US$35.2 billion) by 2014.
Dear reader, central banks around the world usually hold safer asset classes in their reserves, such as gold, and government bonds, which they can sell in order to intervene in any major currency move (or to implement their monetary policy).
But since investment yields have collapsed in the global economy, central banks’ reserves are in danger. Some central banks have actually seen the value of their reserves decline! For example, the central banks of Taiwan and Singapore saw a collective decline of US$1.0 billion in their assets in 2012.
Looking ahead, this is troublesome for the key stock indices. The reason: as the most conservative investors, central banks, move toward the stock market, even just a little downward movement in equity prices will cause losses in their reserves.
When everyone is rushing to buy stocks, it’s not a good sign.
Michael’s Personal Notes:
The fourth-biggest hub in the eurozone, Spain, is facing a severe economic slowdown. According to Spain’s National Statistics Institute in Madrid, the unemployment rate in the country has surpassed the 27% mark, with more than six million people jobless—the highest number since 1976. (Source:Bloomberg Businessweek, April 25, 2013.)
Furthermore, the Bank of Spain reported that the Spanish economy contracted 0.5% in the first quarter of this year after witnessing a decline of 0.8% in the last quarter of 2012. The International Monetary Fund (IMF) expects this eurozone nation to contract 1.6% this year.
While Spain seems to be at the forefront of headlines about the eurozone, other nations like Portugal are witnessing a severe economic slowdown as well. The country has been experiencing a recession for three years, with its unemployment rate at a record high of 17%. (Source: Wall Street Journal, April 23, 2013.)
The situation in the eurozone is very critical; but if you look at the key stock indices, they do not portray this.
Even though Ford Motor Company (NYSE/F) was able to earn a profit in North America in the first quarter of 2013, its losses in Europe are piling up. The company posted a loss of $462 million in the first quarter in Europe, an increase of more than 210% compared to the same quarter of last year. (Source: Wright, R., “Ford reveals deeper European losses,” Financial Times, April 24, 2013.)
Ford is just one example of how U.S.-based multinational companies can face severe losses in the eurozone as the economic slowdown continues to take its toll on Europe. Even with all the austerity measures and bailouts by the European Central Bank, the eurozone is deteriorating further.
More troublesome is the fact that strong eurozone nations are starting to show weaknesses. Take a look at the two biggest economies in the region: France and Germany. Their growth is anemic at best, and the economic slowdown in those countries seems to be strengthening.
As I have been harping on about in these pages over the past few months, the eurozone’s economic slowdown is far from over, and I expect it to continue for a long, long time. Eventually, just like Ford, U.S.-based companies, especially the 40% of them listed on the S&P 500 that have sales in the eurozone, will see their losses mount—and stock prices reflect as much.
What He Said:
“What group of stocks are next to fall in light of the softening U.S. housing market? The stocks of companies that sell retail products to the American consumer, I believe, are next on the hit list. Many retail stocks are already reporting soft sales. In my opinion, they haven’t seen anything yet in respect to weaker sales.” Michael Lombardi in Profit Confidential, August 30, 2006. According to the Dow Jones Retail Index, retail stocks fell 42% from the fall of 2006 through March 2009.

Shocking US government leaflet tells Mexican immigrants they can collect food stamp benefits without admitting they're in the country illegally

  • Conservative legal group obtained Agriculture Department flyer
  • 'You need not divulge information regarding your immigration status in seeking this benefit for your children'
  • Program in all 50 Mexican consulates in the U.S. helps push food stamps

  • A Spanish-language leaflet that the U.S. Department of Agriculture has provided to the Mexican Embassy in Washington advises border-crossing Mexicans that they can collect taxpayer-funded food stamp benefits for their children without admitting that they're illegal immigrants.

    Underlined and in boldface type, the document tells immigrants who are unlawfully in the United States that, 'You need not divulge information regarding your immigration status in seeking this benefit for your children.'

    The USDA's Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps, is funded in order to prevent hunger by helping poor families maintain a basic level of nutrition for both adults and children.
    Congress spent $86.5 billion on the SNAP program in 2012, by far the largest single line-item in the USDA's $205 billion overall budget
    Congress spent $86.5 billion on the SNAP program in 2012, by far the largest single line-item in the USDA's $205 billion overall budget
    The underlined portion reads: 'You need not divulge information regarding your immigration status in seeking this benefit for your children'
    The underlined portion reads: 'You need not divulge information regarding your immigration status in seeking this benefit for your children'
    The Agriculture Department says SNAP benefits are only to be distributed to U.S. citizens and other legal residents. On its website, it acknowledges an education 'partnership' with the Mexican government, but insists that its aim is to help educate only 'eligible Mexican nationals living in the United States' about nutrition benefits for which they might qualify.

    That education partnership is carried out through a program called 'Ventanillas de Salud,' meaning 'Windows to Health,' implemented through 50 Mexican consulates in the U.S.
    Judicial Watch obtained the Spanish language leaflet through a Freedom of Information Act request. An attached email dates the document to March 2009, just months after President Barack Obama took office.
    In an email, a spokesperson for the SNAP program told The Daily Caller, which first reported on the leaflet, that “non-citizens who are unlawfully present, are not, nor have they ever been, eligible to receive Supplemental Nutrition Assistance Program (SNAP) benefits.
    In this Monday, March 25, 2013 photo, Border Patrol agent Richard Gordon, a 23-year veteran of the agency, walks the border fence in the Boulevard area east of San Diego looking for signs that reveal movement of illegal immigrants
    U.S. Border Patrol agents detain undocumented immigrants near the U.S.-Mexico border on April 11, 2013 near Mission, Texas
    U.S. Border Patrol agents walk fences on the Mexican border, and detain illegal immigrants - including children - before returning them to south of the border. A majority will try to cross the border again
    The leaflet, released late Thursday by the conservative group Judicial Watch, will raise questions about the Obama administration's commitment to limiting the expenditure of taxpayer funds to eligible Mexican nationals - meaning those with legal permission to reside in the United States.

    'The revelation that the USDA is actively working with the Mexican government to promote food stamps for illegal aliens should have a direct impact on the fate of the immigration bill now being debated in Congress,' Judicial Watch president Tom Fitton said in a statement.

    'These disclosures further confirm the fact that the Obama administration cannot be trusted to protect our borders or enforce our immigration laws. And the coordination with a foreign government to attack the policies of an American state is contemptible.'

    Fitton's group also obtained a March 2010 USDA flyer advertising a taxpayer-funded online seminar for nonprofits serving Hispanic communities. The teaching session, promoted as being 'free for all participants,' taught activists how to get USDA funding to provide free lunches during the summer.
    A Federal food stamps card is used to purchase food in Fort Lauderdale, Florida
    The UDSA designated food retailers like this Oregon grocery store as SNAP program participants
    The federal government's SNAP program served about 43.6 million people in November 2010. Before the recession, the program had just 26 million enrollees. The USDA licenses food retailers like this Oregon grocery store as SNAP program participants
    And in a March 2012 communication, Judicial Watch said, the USDA asked the Mexican Embassy to approve a letter addressed to that country's 50 consulates. That letter encouraged staff at those Mexican diplomatic missions to learn in another webinar how to encourage more of 'the needy families that the consulates serve' to enroll in the SNAP program.

    Judicial Watch said Thursday that the 2012 document did not discriminate between legal US residents and illegal immigrants.

    In August, Agriculture Under Secretary Kevin Concannon rolled out a new range of anti-fraud programs aimed at preventing food stamp funds from going to ineligible recipients.

    'USDA has a zero tolerance policy for SNAP fraud,' Concannon said when announcing new measures to clamp down on abuse of the program that he promised would 'help us hold bad actors even more accountable than in the past and discourage them from abusing the public's trust.'

    The agency's press release, however, made no mention of efforts intended to deny SNAP benefits to illegal immigrants.

    People line up for their monthly debt cards and food stamps all over the country
    People line up for their monthly debt cards and food stamps all over the country

    Former Iowa Governor Tom Vilsack is President Obama's Secretary of Agriculture and is responsible for the SNAP program's operation
    Former Iowa Governor Tom Vilsack is President Obama's Secretary of Agriculture and is responsible for the SNAP program's operation
    Last year Alabama Republican Senator Jeff Sessions complained in writing to USDA Secretary Tom Vilsack that, 'It defies rational thinking for the United States – now dangerously $16 trillion in debt – to partner with foreign governments to help us place more foreign nationals on American welfare.'
    An estimated 11 million illegal immigrants are living in the United States. President Obama and a bipartisan group of eight U.S. Senators are gathering support for comprehensive immigration reform  legislation that would put most of them on a path to legal residence and, conservatives allege, both amnesty and citizenship.

    Drills That Readied Boston Hospitals, EMS for Bombings Face Funding Cuts

    Dr. Paul Biddinger was at a medical station near the Boston Marathon's "Heartbreak Hill" on April 15 when his pager went off, notifying him of the bombs at the finish line, five miles away.
    Biddinger, who directs emergency operations at Massachusetts General Hospital, was standing next to someone from Boston Emergency Medical Services and someone from the state health department as they got similar calls.
    They'd drilled for this moment, using actors pretending to be patients, paint bullets and controlled explosions. Federal funding goes to Massachusetts hospitals and emergency teams to train medical personnel to respond to disasters such as the Boston Marathon bombing.
    Fortunately, on April 15, within minutes, Biddinger and the other medical responders were headed to where they needed to be.
    "I think, given the severity of the injuries of the first patients we received after the bombing, I am absolutely surprised there was not more loss of life," said Biddinger, who arrived at the hospital shortly after the first patients arrived.
    But with the final 2013 budget still not settled, the programs that enabled doctors and EMTs to save lives on April 15 may face federal cuts.
    COMPLETE COVERAGE: Terror at the Boston Marathon
    Of the 264 patients injured in the twin blasts on Boylston Street at 2:50 p.m., there have been no deaths after the initial three. Although Boston area hospitals initially listed 38 patients in critical condition and 14 patients underwent amputations for their injuries, no one else died. Now, only one patient remains in critical condition.

    Hospitals throughout Massachusetts have received funding from the Office of the Assistant Secretary for Preparedness and Response's Hospital Preparedness Program to perform emergency drills that include fake patients. (They also need to have a shadow staff that continues to treat real patients during the exercise.)
    RELATED: Jeff Bauman Gives Present to Fellow Boston Bombing Victim
    And since May 2010, the city has done two 24-hour disaster simulations as part of its annual Urban Shield exercises, which are funded by the Department of Homeland Security. The exercises involved police, EMS teams, SWAT teams and hospitals. In 2011, they prepared to encounter bombs and active shooters as part of an exercise intended to mimic the 2008 Mumbai massacre.
    "The realism is heightened. It's not just walking to a garage with props set up," said Boston EMS Chief James "Jimmy" Hooley. "It's noisy. It's sweaty. They run it for 24 hours. It's meant to try to push stress levels a little bit."
    But the drills could be in jeopardy. The Hospital Preparedness Program already faces a proposed $125 million dollar cut from the 2014 federal budget, after receiving $379 million in 2012. It's not yet clear what the final 2013 budget will be because of the sequestration.
    RELATED: Health Care Costs for Boston Marathon Amputees Add Up Over Time
    The program began in 2002 with the Bioterrorism Act, but program director Dr. David Marcozzi said it shifted in 2012 toward building coalitions between hospitals that normally competed for patients and funding.
    "No hospital stands alone," Marcozzi said.
    That's why the Urban Shield drills involved hospitals as well as first responders and law enforcement, Hooley said.
    "In Boston, we did not just invest in bomb robots or radios and stuff," he said. "They have been willing to invest in 'O.K., we need a way to make sure hospitals can work together and cooperate.'"
    But that program saw a 30 or 40 percent cut in recent years, and it's not clear what funds will be available this year because of the sequestration, said Rene Fielding, who directs Boston's Office of Emergency management.
    Still, the training helped teach teams to "think on the fly," which came in handy during the marathon bombing, she said.