Saturday, July 27, 2013

Despite Declining Deficit, Foreigners Aren’t Bailing Us Out, So the Fed Will Keep QE Going

Bud Conrad, Chief Economist
Casey Research

The basic imbalance driving our economy is the government deficit, which spun out of control as a result of the Credit Crisis of 2008/9. But the sequester, improving tax base, lower interest rate, and elimination of stimulus spending have caused the big government deficit, while still extreme, to drop to half its previously nosebleed levels.

Even so, the deficits remain well out of proportion for a sustainable future. Projections for future government expenditures, including those related to the masses of retiring baby boomers, are on track to increase exponentially. Especially given that the deficits are actually much worse than generally discussed. Honest accounting would include the growing liabilities for retirees in the current accruals, resulting in deficits running closer to $5 trillion per year.

Foreigners recycling their trade surpluses have been an important source of purchases for US government debt. As you can see from the chart of long-term securities purchases by foreigners, that buying collapsed during the crisis. And, interestingly, it has recently fallen sharply again.

Offsetting the reduction in purchases of US debt by foreigners, the Fed has stepped in with multiple quantitative easings (QE), buying government securities itself in order to add liquidity and drive interest rates down. The shift into an accommodative policy is easy to see in the big picture of the holdings of Treasuries at the Fed:

Simply, the loss of foreign enthusiasm for US government debt would normally be a red flag for our economy. This time around, the slack is being papered over by the Fed, which is creating money out of thin air in order to buy what is, in essence, most of the new debt being issued by the federal government. By filling the gap left by exiting foreigners, the Fed has been able to sustain low interest rates—for the time being.

As the American public doesn't save much, and because foreigners are stepping away from US government debt, the Fed is left as the buyer of last resort and will have to keep up its QE.

Among a number of problems, the money creation required for the Fed to serve as the government's lender of last resort can be very inflationary once it ultimately bleeds into the economy. For now, most of the new money has been bottled up on the balance sheet of the Fed. With low rates, that is manageable. But if rates rise, as they eventually must in the face of rising inflation and a loss in confidence in the dollar, the interest the Fed pays on deposits rises as well, putting the viability of the institution at risk.

In addition, as rising rates increase the cost of servicing the government's many debts, federal deficits will also rise. And that has the very real potential to create the equivalent of an economic death cycle as foreigners, and pretty much anyone other than the Fed, rush to the exits on US government paper, causing interest rates to rise further.

While it is impossible to say with any certainty when the US government bond bubble, the largest in history, will burst, the recent up-moves in interest rates should serve as a clear warning shot. From the charts, it looks like the foreigners have taken notice.

For those of you interested in learning more about the coming end to the bond bubble, the latest edition of The Casey Report contains Bud Conrad's up-to-date report and in-depth analysis on inflation, deficits and interest rates. Your subscription comes with a 100% money-back guarantee… so you have nothing to lose by giving it a try. Click here for details.

IMF fears Fed tapering could 'reignite' euro debt crisis

The tapering of stimulus by the US Federal Reserve risks reigniting the eurozone debt crisis and pushing the weakest countries into a "debt-deflation spiral", the International Monetary Fund has warned.

The Fed, Federal Reserve Bank, Washington DC. Main entrance on Constitution Avenue near the National Mall
Early tapering by the Fed "could lead to additional, and unhelpful pro-cyclical increases in borrowing costs within the euro area", the IMF said. Photo: Alamy
"The macroeconomic environment continues to deteriorate," said the Fund in its annual `Article IV' health check on the eurozone.
"Recovery remains elusive. Growth has weakened further and unemployment is still rising, and the risks of prolonged stagnation and inflation undershooting are high. Mounting social and political tensions pose an increasing threat to reform momentum."
The report warned that the onset of a new tightening cycle in the US had already led to major spill-over effects in the eurozone, pushing up bond yields across the board.
Early tapering by the Fed "could lead to additional, and unhelpfu, pro-cyclical increases in borrowing costs within the euro area. This could further complicate the conduct of monetary policy and potentially damage area-wide demand and growth. Financial market stresses could also quickly reignite," it said.
The Fund said the European Central Bank must take countervailing action to prevent "a vicious circle setting in," ideally by cutting interests, introducing a negative deposit rate, and purchasing a targeted range of private assets.
It should launch "credit-easing" policies to alleviate the deepening lending crunch in Spain, Italy, and Portugal, where borrowing costs for firms are 200 to 300 basis points higher than in Germany, with small businesses struggling to raise any money at all. The IMF said the more the Fed tightens in the US, the more the European authorities need to offset this with other forms of stimulus.
The report came as fresh data from the ECB showed that loans to the private sector contracted by €46bn in June, after falling by €33nbn in May , and €28bn in April. The annual rate of contraction has accelerated to 1.6pc.

The M3 broad money supply is also fizzling out, with growth dropping to 2.3pc year-on-year. There has been almost no growth in M3 since October 2012.
The money data tends to act as an early warning indicator for the economy a year or so ahead, and therefore casts doubt on recent claims by EU leaders that the crisis is over.
"Today's figures put serious question marks over the strength of the nascent recovery," said Martin van Vliet from ING. The data is at odds with the recent rebound in industrial output and rising PMI survey indexes for manufacturing.
The IMF said the eurozone economy would shrink by 0.6pc this year, the same as in 2012. It is expected to grow by 0.9pc next year but this will not be enough to make a dent on unemployment, and could easily be thrown off course by a fresh global shock.
"There is a high risk of stagnation, especially in the periphery. Such an outcome could push the periphery toward a debt-deflation spiral," it said.
The report said that it may take years to unwind the colossal credit boom of the early EMU years. "Historically, almost all of the run-up in household debt tends to be reversed. But in the euro area, the reduction in debt-to-GDP ratios has barely started, and the boom was more pronounced."
"Furthermore, in past deleveraging episodes, the debt reversal was largely facilitated by high inflation and growth, and supported by expansionary fiscal policy. Because these factors will not contribute much to the ongoing deleveraging process in the euro area periphery, the adjustment is likely to be protracted and have to rely more on reductions in nominal debt. The contrast with history is similarly sobering when it comes to corporate debt," said the Fund, adding that the EMU periphery has the daunting task of triple deleveraging by governments, households, and firms all at the same time.

The Fund said it is crucial that the eurozone deliver on pledges from a proper banking union and resolution fund capable of "swift decisions on burden sharing".
While polite in tone, the authors appear exasperated by "incomplete or stalled delivery of policy commitments" and seemingly endless foot-dragging by EMU leaders.
"The hurdle for reaching a collective agreement is always high. Moreover, building political support for such decisions can take considerable time, especially when they involve thorny issues such as burden-sharing or ceding national control. Hence, making swift progress on completing the banking union and moving toward greater fiscal integration are proving exceedingly difficult."
In a comment clearly aimed at Germany and the key creditor powers, the IMF said "unwavering political backing for institutional reforms remains critical and is in the interest of all EMU members."

Wake Up America: Government Preparing for Economic Collapse & 2nd Revolution

Obama ready to impose martial law in the USA. (New World order RFID chip) Economic Collapse in America 2013

'Bailouts For Wall Street, Not People': GOP Demands Detroit Be Denied Federal Aid

The Obama administration is making no sign of helping Detroit as its emergency manager and republican governor steer the city towards bankruptcy proceedings.

(Photo: Associated Press)

Yet, that is not enough assurance for some in the GOP who are pushing for passage of a law explicitly banning the bailout of Detroit, and any other municipality for that matter.
At least five republican senators have recently proposed tacking language onto spending bills that would broadly prohibit municipal bailouts.
These proposed measures, which would have far-reaching implications for towns and cities across the US if passed, are aimed towards preventing any federal aid to Detroit.
GOP leaders are attacking the city with notable venom at the moment its 700,000 residents—80 percent of whom are African-American—must contend with deepening crises of poverty and privatization.
Rising numbers of Republicans are declaring that the city has dug its own grave and does not deserve federal help. John Cornyn (R-Tex.) declared Thursday that Congress must not, under any circumstance, “bail out Detroit or any American city that mismanages its public finances.”
Yet, when Wall Street took a hit from its self-made 2008 financial crisis—which devastated towns and cities across the US, including Detroit—Republicans and Democrats stood behind a massive federal bailout of big banks, pushed forward under George W. Bush, with President Obama picking up the baton.
Today, there is little interest from either side of the aisle to extend a helping hand to the largest city to file for bankruptcy in US history.
Unions appealed to members of Congress not to turn their backs on the city. In a statement Thursday, AFSCME Detroit Local 207 president Lee Saunders declared:
The whole country is watching how this crisis gets resolved. As the nation emerges from the worst of the Great Recession, it is time for Congress and the White House to make it clear they will not turn their backs on our urban centers.
Nearly 60 percent of Detroit children live in poverty and 33 percent of all land sits vacant. Half of all streetlights are non-functional, and a majority of public parks have shut down.
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License
Republished from: Common Dreams

US blows out $16.7 trillion debt limit

US Treasury Building in Washington, DC (AFP Photo)RT News
The US Treasury has already exceeded the federal legal borrowing limit of $16.7 trillion in May. That signals the main structural problems remain unresolved putting at risk the fragile recovery.
The country’s  outstanding public debt is already $38.82 million above the statuary debt ceiling and now at $16,738,220,000,000.00, according to Treasury data.   

Christopher Weafer from the Economist Macro Advisory Consultancy says the numbers show “that the debt issue along with the deficit is two very structural problems in the US that remain unresolved and without any clear mechanism on how they are going to be resolved”.
In the short term it doesn’t cause any immediate crisis and that’s why I guess the news is not widely covered, ” Weafer told RT.
The American economy grew at 1.8 percent during the first three months of the year, lower than its 2.5 percent average pace during the last two decades. The unemployment rate, at 7.6 percent in June, remains above its 6 percent average during the period, Reuter’s reports.
Despite the US Fed and politicians are speaking  about recovery, that US economy which is picking up and looking stronger next year, the unsolved debt and deficit issues may reverse the process, Weafer says.
“The US budget deficit has only been twitted down by a few hundred million dollars. It’s still massively in deficit, and therefore the amount that the US government needs to borrow to fund that is still rising,  so we’ve reached this technical limit and it will go higher. These are issues that still need to be resolved and they will determine whether or not the pace of recovery can be expanded or whether it will be temporary and reverse next year.”
On Thursday President Barack Obama criticized House Republicans for demanding conditions on raising the US debt ceiling as he tries to shape the coming congressional debate over the nation’s budget priorities, Reuters reports. Obama accused Republicans of skirting responsibility to “pay the country’s bills” and refusing to spend for needed investments in education, energy and research.
“That’s not an economic plan,” Reuters quotes Obama.  “That’s just being a deadbeat.”
House Speaker John Boehner earlier this week said Republicans won’t agree to raise the debt ceiling without spending cuts. The current limit was expected to be reached sometime between October and December, according to Reuters.
In the debt ceiling debate two years ago, lawmakers and the White House battled for months before Obama signed an increase into law on Aug. 2, 2011, the day the Treasury Department warned that US borrowing authority would expire, Reuters reports.

Archbishop of Canterbury embarrassed about church's financial link to Wonga

Justin Welby 'irritated' to discover Church of England holds indirect £75,000 stake in payday lender he singled out for criticism

Link to video: Justin Welby: Wonga investment should not have happened
The archbishop of Canterbury, Justin Welby, has said he was annoyed and embarrassed to learn the Church of England holds an indirect stake in Wonga, the payday lender he promised to bring down through fairer competition, and has called for the church to rethink its investment guidelines.
Welby told BBC Radio 4's Today programme he was disappointed to discover the church's £5.5bn investment portfolio included a stake in Accel Partners, a US venture capitalist that co-funded the launch of Wonga, who Welby singled out when he called for an expansion to credit unions as a means to "compete" payday lenders out of existence.
Asked to rate his embarrassment on a scale of one to 10, he replied, "About eight".
"It shouldn't happen, it's very embarrassing, but these things do happen," he said. "We have to find out why and make sure it doesn't happen again."
Welby said the holding in Accel was worth about £75,000. He added: "I was irritated for a few minutes, but these things happen. I understand the business – it's an incredibly complex business."
Welby said he was unsure whether the investment in Accel broke church guidelines, one of which dictates that money should not be put into companies where 25% or more of its business is connected to such lending. However, he stressed that the investment should not have happened at all: "They shouldn't be investing in Wonga. We don't think it's a good thing."
Such ratios were set by the church's ethical investment advisory group, Welby said, which was independent from him. Nonetheless, he said he would call for a change to guidelines, which also allow the church to invest in companies with very small interests in things such as gambling and pornography: "We have to review these levels and make sure we're entirely consistent between what we're saying and what we're doing."
Asked if such guidelines suggest the church thought "a little sin" was tolerable Welby, understandably, disagreed – "Just for the record, I'm not in favour of sin" – but also stressed the complexity of such investments, for example asking whether the fact hotel chains make pornography available to guests meant the church should never invest in the entire sector.
"If you exclude any contact with anything that directly or indirectly at any point gets you anywhere bad, you can't do anything at all," he said. Welby added: "We can't say that we tolerate bad things, but you've got to live in the real world, and living in the real world means life is often very complicated and you can't escape the complexity."
However, he was clear that connection to payday lending was definitely wrong: "This is an embarrassment. We think that the payday lenders charge vastly excessive amounts for the loans they make. There is a totally inadequate range of choice for consumers in deprived areas. I've seen it. I've lived in these areas and worked in them. I've had staff who've been caught up in it and have had to be helped, and have had their lives destroyed by it. This is something that really matters to me."
Welby insisted he had never specifically targeted Wonga, calling them one of the more professionally managed companies in the sector, but had been answering a direct question about them when, earlier this week, he recounted a conversation with Wonga's chief executive, Errol Damelin.
"I said to him quite bluntly: 'We're not in the business of trying to legislate you out of existence, we're trying to compete you out of existence'," he told Total Politics magazine.
Welby told Today he did not support regulation to curb payday lenders' activities, for example credit caps: "If we try and cap interest rates and drive the legal payday lenders out of business through regulation people become desperate – and there's no consumer choice in a lot of our deprived areas – will end up with the loansharks, who are just a totally different kettle of fish, very much worse."
Instead, Welby said, he wanted the church to support a massive expansion of credit unions in poorer areas. Even these, he conceded, would be obliged to lend short-term at an annualised interest rate of about 70% or 80%, something he argued was hugely less than that charged by payday lenders: "It's a huge sum of money, but it's better than 5,500%."
He conceded there were potential problems with the church becoming directly involved in such a trade, but argued: "It's better to have a go than to just stand and wring your hands and say, it's all terrible."

It Is Almost As If We Are Being Forced To Watch The Replay Of 2008 Crisis, Only This Time You Will Be Watched, Recorded and Tracked During The Economic Collapse, And The Rest of The World Is Preparing For WWIII

NSA is allowed to spy on the people, they say it is constitutional but we know it is not. The pentagon wants to put blimps in the air over Washington to monitor everyone. These blimps will eventual spread to other cities. The government needs to track the movements of everyone for the economic collapse. The rest of the world is preparing for WWIII.
Gov’t INSANITY: Federal “regulators” are about to create another massive mortgage disaster
“It seems we really will never learn…”
Following the debacle of free-and-easy mortgage money to anyone who could fog a mirror in the run-up to the last housing bubble (remember that was just 6 years ago), regulators proposed ‘skin-in-the-game’ rules which forced banks to hold certain amounts of the loans they made (as opposed to securitizing and selling off that yieldy risk to the next greater fool). Makes sense.
However, in a major U-turn, with interest rates rising, mortgage rates spiking, and home prices now collapsing once again, it would appear the very same congress has folded.
As the WSJ reports, more stringent lending standards on top of the market environment leave the watchdogs, which include the Fed and the FDIC, wanting to loosen a proposed requirement that banks retain a portion of the mortgage securities they sell to investors (representing a victory for an unusual alliance of banks and consumer advocates that opposed the new rules).
Undermining the initial goal of imposing market discipline, former FDIC Chair Sheil Bair noted, “My sense is that Washington has lost its political will for serious reform of the securitization market.” Indeed it has, Sheila…..
Marc Faber – “It’s Gonna End One Day… Through War Or Financial Collapse”
“one day, this financial bubble will have to adjust on the downside.” This will occur via either an inflationary burst or a collapse of the system. Simply put, “it’s gonna end one day,” either through war or financial collapse, “it will be very painful…

It Is Happening Again: 18 Similarities Between The Last Financial Crisis And Today
If our leaders could have recognized the signs ahead of time, do you think that they could have prevented the financial crisis of 2008?  That is a very timely question, because so many of the warning signs that we saw just before and during the last financial crisis are popping up again.  Many of the things that are happening right now in the stock market, the bond market, the real estate market and in the overall economic data are eerily similar to what we witnessed back in 2008 and 2009.  It is almost as if we are being forced to watch some kind of a perverse replay of previous events, only this time our economy and our financial system are much weaker than they were the last time around.  So will we be able to handle a financial crash as bad as we experienced back in 2008?  What if it is even worse this time?  Considering the fact that we have been through this kind of thing before, you would think that our leaders would be feverishly trying to keep it from happening again and the American people would be rapidly preparing to weather the coming storm.  Sadly, none of that is happening.  It is almost as if they cannot even see the disaster that is staring them right in the face.  But without a doubt, disaster is coming. The following are 18 similarities between the last financial crisis and today…

#1 According to the Bank of America Merrill Lynch equity strategy team, their big institutional clients are selling stock at a rate not seen “since 2008“.
#2 In 2008, stock prices had wildly diverged from where the economic fundamentals said that they should be.  Now it has happened again.

#3 In early 2008, the average price of a gallon of gasoline rose substantially.  It is starting to happen again.  And remember, whenever the average price of a gallon of gasoline in the U.S. has risen above $3.80 during the past three years, a stock market decline has always followed.
#4 New home prices just experienced their largest two month dropsince Lehman Brothers collapsed.
#5 During the last financial crisis, the mortgage delinquency rate rose dramatically.  It is starting to happen again.
#6 Prior to the financial crisis of 2008, there was a spike in the number of adjustable rate mortgages.  It is happening again.
#7 Just before the last financial crisis, unemployment claims started skyrocketing.  Well, initial claims for unemployment benefits are rising again.  Once we hit the 400,000 level, we will officially be in the danger zone.
#8 Continuing claims for unemployment benefits just spiked to the highest level since early 2009.
#9 The yield on 10 year Treasuries is now up to 2.60 percent.  We also saw the yield on 10 year U.S. Treasuries rise significantly during the first half of 2008.
#10 According to Zero Hedge, “whenever the annual change in core capex, also known as Non-Defense Capital Goods excluding Aircraft shipments goes negative, the US has traditionally entered a recession”.  Guess what?  It is rapidly heading toward negative territory again.
#11 Average hourly compensation in the United States experienced itslargest drop since 2009 during the first quarter of 2013.
#12 In the month of June, spending at restaurants fell by the most that we have seen since February 2008.
#13 Just before the last financial crisis, corporate earnings were very disappointing.  Now it is happening again.
#14 Margin debt spiked just before the bubble burst, it spiked just before the financial crash of 2008, and now it is spiking again.
#15 During 2008, the price of gold fell substantially.  Now it is happening again.
#16 Global business confidence is now the lowest that it has been since the last recession.
#17 Back in 2008, the U.S. national debt was rapidly rising to unsustainable levels.  We are in much, much worse shape today.
#18 Prior to the last financial crisis, Federal Reserve Chairman Ben Bernanke assured the American people that home prices would not decline and that there would not be a recession.  We all know what happened.  Now he is once again promising that everything is going to be just fine.
Are the American people going to fall for it again?

What Would You Do If A Bank Stole Everything You Owned?

With millions of Americans across the country facing default and foreclosure banks are hiring outside firms to take possession of their homes. It is often the case that those living in homes that have been repossessed by their lender stay until the very last minute, or simply aren’t aware of their final eviction date. In such cases these firms simply enter the home, take all of the personal belongings of the tenants, and restrict access. Usually, the tenant has no recourse and may never have their personal items returned to them. It’s a common practice that happens every day in modern day America.
Something else that has become commonplace amid the real estate crisis of the last several years are errors associated with foreclosure repossessions. Sometimes the bank is at fault, while other times the firms hired by them repossess the wrong house.

Katie Barnett of McArthur came home a few weeks ago to find everything in the house gone. She eventually discovered that First National bank mistakenly foreclosed the wrong house — but kept her stuff. Not only did they clear everything out like the Grinch, but they changed the locks. Their actual foreclosure target had been the house across the street.
This matters not to the bank president who responded to her $18,000 estimate for wrongfully stolen goods with a firm:
We’re not paying you retail here, that’s just the way it is.
But they make no attempt for remedy and the actual translation is: Oops, nothing we can do now. (Without the Oops)
Barnett says:
I did not tell them to come in my house and make me an offer. They took my stuff and I want it back.
Now, I’m just angry… It wouldn’t be a big deal if they would step up and say ‘I’m sorry, we will replace your stuff.’ Instead, I’m getting attitude from them. They’re sarcastic when they talk to me. They make it sound like I’m trying to rip the bank off. All I want is my stuff back.

Additionally, the police chief closed the case!
Katie remains without any of her things and no compensation for theft and damages.
Via: Activist Post
(emphasis added)

In any other situation this would be a crime punishable by prison time and the perpetrators would be charged with breaking and entering, burglary, and theft.
But, since it’s a bank, the police chief closed the case and chalked it off as an honest mistake.
An individual who was doing nothing wrong lost everything she owned. And what does the bank do? They laugh at her and make snarky comments, and they refuse to make her whole again.
What would you do if everything you owned was stolen and the criminals who committed the act were left free to prey on others?
Maybe you could hire an attorney with the money you probably don’t have.
Or, you could take matters into your own hands and visit the bank to forcibly take back the money owed to you, but you’d be facing 25 to life as a result.
Corporations, especially banks, continue to act with impunity, whether it be stealing billions of dollars from investors or breaking into their homes and looting everything in sight.
How long before Americans hit a breaking point?
How long before those who are being taken advantage of get mad as hell and decide they’re not going to take this any more?
The day of reckoning will come and when it does the bankers and brokers who have made a living off the backs of hard working Americans better hope they used some of their stolen loot to build underground bunkers, because the masses will be looking for payback, and they won’t be carrying picket signs.
They’ll be carrying pitchforks, nooses, and AR-15?s.

A Message to Trayvon Martin Protestors

()   I haven’t touched on the Trayvon Martin issue because race matters in this country are the paralysis of the American people. To constructively discuss Trayvon would require empathy, introspection and an understanding of America’s social and economic history. This is why the open forums we have seen thus far seem to fuel more ignorance and bias than reasonable debate.
To be brutally honest, the only reason people are even aware of Trayvon Martin is because it became a topic within mainstream news and pop culture. Meaning: News directors saw it as a profitable, sensational story. Hundreds of blacks die annually in South Side Chicago without even a blurb. Trayvon isn’t in the mainstream news for any reason other than ratings and profit. The news coverage on the Zimmerman case almost implies that the killing of this young black man is somehow an anomaly and I resent that.
In this country, if it isn’t streamlined through mainstream media and pop culture, it doesn’t seem to warrant national debate. Our “government” continues to wreak havoc on our civil liberties and there is little to no protest from the black community because of media diversion tactics that keep such pertinent issues out of mainstream media. But if Jay-Z or Rihanna were to make mention of it, we’d suddenly be jolted out of our sugar comas and protesting on freeways.

Mr. Apocalypse beats with his Walking Stick around the Burning Bushes.

Dog Poet Transmitting........

May your noses always be cold and wet.

When we consider how much we do not know... and then we find out a few things, we have to consider just how wide is the sea of our continuing ignorance. I ask that you pay careful attention to this. One of the ways that evil destroys itself, is that it is subjected to the same tactics it seeks to visit upon us. It is divided against itself. Few of the servants of evil trust each other and they are more than willingly to engage in all kinds of crimes against each other. Also, evil is far more easily compromised than good. The only reason a lot of us are looking at Croque Monsieur is because life is a club sandwich and you get 3 levels, although all of them may not be functionally operative at the same time.

What do you do when you are an internationally famous vampire and mass murderer, on your way to the pizza ovens of Hades? You get on a road show epidemic of photo-ops and... it doesn't hurt to let the world know how many government, skinhead Nazis it takes to protect you either. Yeah, when you're going down the big skid-mark highway, having been Big Kahuna at the CIA and instrumental in the killing of the most popular president ever (JFK) as well as the father of the least popular president ever; the head of the Carlyle war machine and a three term president of the United States , of which he only got elected to once, becoming president by proxy in a kinda-sorta, evil twisted way, just like numba won sun did ...through voter fraud...'”aw, lawd, lawd, I can't stop thinking about her, out dere in that cold graveyard, night after night, ngghhh! Ngghh! Ngghhh”!

There has been no more evil a clan in American history than that of the Bush Family Manson, maybe the Rockefellers were, maybe there was some other band of syphilitic sociopaths that I'm overlooking or don't know about . Seems like every single member of that Morlock brood of Bushes, had some kind of a hand in 9/11. I guess there's all kinds of trees planted in IsraHell for this family of righteous gentiles so... you got the Bushes who are the poster children for what a righteous gentile is all about. This is the kind of thing the Bushes brought to the country of America. In the words of the old mass murderer himself; “"If the American people ever find out what we have done, they will chase us down the streets and lynch us”. Here's another example of what Bush and his banker buddies did to America.

This is what America gets now in the form of leadership and he was far and away the front runner, until his serial, sexual psychopathy, reared its ugly mushroom head one more time.; course, it's New York City, where it doesn't matter what you do, where the weak are killed and eaten, it only matters who you are and who you know. Yes, weennie waggers and craven, degenerate bankers is what you get in the age of materialism. Tyranny is what you get, in capitalist nations, that are founded on the ideas of individual liberty and justice for all. What you get is a Draconian police state, where both government and law enforcement, operate for the welfare of the rich ♫I'm rich! Sonofabitch, I'm rich♫”where justice is only for the rich and it ain't justice.

What kind of a country is it, where a bank can break into your home and steal the contents and throw them away or sell them and it turns out to be the wrong house and they don't have to replace what they stole? What this calls for is the vigilante justice that didn't happen in The Grapes of Wrath. Nothing says, I am an asshole and proud of it like this does. These are the people who say, “He who dies with the most toys wins”.

What's America's favorite sandwich, really? This is America's favorite sandwich. You know, round here, it's not a posting, not an authentic jennuwine, visible bas relief of a posting, without some mention of Mr. Apocalypse. When it started out, Mr. Apocalypse was standing against the wall, near the table with the punch bowl and toxic, GMO, fake cheese filled, treats ...with a boutonniere affixed to his jacket pocket. “Blue Velvet” by Bobby Vinton was playing on the high school gym sound system, to be followed shortly by Ray Charles with “Ramblin Rose”. Those as had the stones to ask someone, or who were dancing with the ones who brung them, were cheek to cheek, during these poignant, nostalgic moments. This was before there was two guys cheek to cheek, or a couple of Sumo wrestler chicks, with miniature (not all that miniature) cinder block, nose ring piercings, hanging down as a sort of ornamental testimony to “been there and done that”.

Anyway, Mr. Apocalypse started out leaning against the wall, like the rest of the wallflowers. Then something a little faster came on and he started moving around a little and things started happening. There was just a tad more truth in the air and that led to a degree more intimacy, in the changes among the people in the gym. This wasn't all positive because neither the truth nor intimacy is always positive. Then Chuck Berry came on, probably “Maybelene”, ironically, ♫why can't you be true♫ and the atmosphere definitely changed, as invisible forces moved through the room, out the door too and up into the jetstream, where it began to proliferate all over the place. Then, I don't know, maybe something by Duane Allman or Lynyrd Skynyrd came on. It could have even been The Boss. It definitely wasn't Tom Waits and- what I'm saying- is that the mood kept intensifying, Truth keeps increasing and subsequently things kept changing to adapt to the truth and every day there was more and more of this kind of thing. Mr Apocalypse is on his way to becoming a cross between Michael Jackson and James Brown. It is inevitable and that is something else one really ought to keep in mind.

Once again, cause it gets missed, I've got nothing against most anything cheek to cheek and I have danced like a mad, intoxicated fool with drag queens and drag racers, who managed to get out of their rides for a moment. They might not have been dancing. It might have been simple tension happening, from some hours at 200 miles a hour. My point being, with all of the Minority 'pre-crime' Report, future hate crime legislation coming, I got to use humor to militate against all of that happening. The Devil cannot abide ridicule. “Laugh at the devil and he will flee from you”. This is an important point that people can look right at, nod their head and then go on about their business as usual. The truth hides in plain sight. It vibrates between the lines of inspired text. It is as near to you as you are near to it and as far away as you are far from it.

When death comes, as death invariably does ('some kind of death' (or change) comes to us all), death will scan you for the truth that is in you and then, like one of those automated, parking garage machines, it will spit out a ticket to somewhere. This world is a bus station waiting room, where some are doing more than waiting, for better or worse. Otherwise, they are waiting, which is also called, “going through the motions”. This is something that occurs at a certain point, after childhood and early adulthood have passed and then that window of opportunity closes, wherein one is given the chance to make the connection necessary, to live a life that is not composed of 'going through the motions”. This is a rare occurrence, as you can see, by taking only a superficial look around you and... we live in a world, where looking superficially around, is pretty much 90% of any looking around that takes place.

Paying more than superficial attention, makes you aware of things like this. Of course, being aware of things like that, makes you responsible for acting a certain way and living a certain way, as a result of being aware and that's why a lot of people choose the roads of denial and stupidity, to help ease the pain of going through the motions. That's where they go through the motions, down at the corner of Denial and Stupidity. There's quite a crowd there. It's nothing but elbows and assholes and glazed eyes, highlighting the fixed and frozen grins that acts as a stiff-arm, going down the sidelines to who knows where. All that matters is getting there, not where 'where' is. That might change a person's whole game plan, knowing where 'where' is and what 'where' means. Not knowing means never having to say you're sorry, until it's too late and you're already there, where 'where' is. Where is a lot like nowhere, sometimes it's a lot like Purgatory and sometimes is only a barren and empty field with no one to keep you company but Saturn.

It's a bit of a dichotomy how there can be so many people stranded in their own loneliness, millions of them. It's like a dense crowd of people, who somehow manage to be all alone. Maybe it's like those ranks after ranks of cubicles, that stretch on till the view bends out of site, since space is curved; a kind of barbershop window display of the front and back of your head, going on and on and on. There's probably some kind of meaning, wrapped in a riddle there.

It's all coming down and it's all coming out and they are racing to get 'where' and they will get 'where' but it won't be what they think. No matter how fast they go, it will not be fast enough. No matter what they do, it will not be enough. That will dawn upon them with an ever greater degree of intensity and that is how it should be. That is how it should be.

End Transmission.......

John Oliver: Monopoly Game Removed ‘Go to Jail’ Option to Reflect America’s Financial System

Hasbro’s classic board game Monopoly has  eliminated its jail space,  freeing up time for young players more interested in what the company is calling “snack toys.” Interestingly, Monopoly’s doing away with “jail” can also be interpreted as a statement on the state of the American economy. As John Oliver hilariously pointed out last night on the Daily Show, “The game designed to teach children how capitalism works has removed the ‘go to jail option’ to reflect the financial system they’re going to grow up in, presumably replacing it with a ‘get bailed out by congress and then go directly to the cayman islands option.’”
Nowadays, banks like HSBC can get away with massive money laundering for Mexican drug cartels, pay a fine, and sleep in their own beds that night, while kids caught with a joint can face the more punitive punishment of incarceration.
Oliver also used the Monopoly segment to touch on the Goldman Sachs aluminum price-rigging scandal.
“Goldman can bet on the future price of aluminum while simultaneously having the ability to goose the future price of aluminum if that’s something they’d find interesting or profitable,” he said, “In the stock market, that’s what known as insider trading. In the commodities market, that’s known as simply Thursday — or Monday or Tuesday or Friday or Wednesday.”
Oliver wrapped the long segment up with this pensive remark: “Now that you think about it, the new version of Monopoly is actually perfect, you just move pieces of metal around and around in a circle collecting money whenever you want and it’s guaranteed that nobody’s going to jail.”
Watch it in two parts, below:
Kristen Gwynne is an associate editor and drug policy reporter at AlterNet.  Follow her on Twitter: @KristenGwynne
Republished from: AlterNet

Down The Rabbit Hole w/ Popeye (04-08-2013) A Warning About Tyranny From Those Who Lived Through It

(FEDERALJACK)   On this edition of DTRH Popeye starts off by playing two warnings from people who have lived through real tyranny. The first audio clip is of Kitty Werthmann, a survivor of Hitler’s Nazi regime and Stalin’s Communist regime. What she witnessed has striking parallels to what is going on today. The second clip is of Manuel Martinez, who survived the overthrow of Cuba by Castro and the communists, and he tells of tortures and murder of thousands of unarmed, defenseless Cubans at the hands of the communist regime. At the end of the show he opens the phone lines and gets the listeners take on our slide into fascism.


An overview of the early subversion of America

Shortly after the Constitutional Convention, when it was up to the states to ratify or reject the newly proposed United States Constitution, the Anti-Federalists were already warning the American people that, once approved and established, a consolidated federal government's "relentless expansion of arbitrary power was unstoppable, its tendency toward corruption was inevitable, and its appetite for despotism was unquenchable," according to Joseph J. Ellis in his book American Creation: Triumphs and Tragedies at the Founding of the Republic (pg. 116). Looking back in hindsight, the Anti-Federalists had it exactly right, at least in the case of the United States.

Anti-Federalists, including Thomas Jefferson and James Madison, and others skeptical of a centralized federal government were also raising alarm bells at the prospect of a centralized Bank of the United States shortly after the Constitution was approved and ratified by the states. Alexander Hamilton and the elite banking and financial establishment in America, working on behalf of and in collusion with international financial interests centered around the Jewish banking families in London and other major European capitals, "represented a tiny minority within the overall populace" who "had somehow managed to engineer a hostile takeover of the fledgling American republic and were now poised to consolidate their control to the detriment of all the ordinary citizens, mostly farmers, the true lifeblood of the nation," writes Ellis (pg. 170).

President Andrew Jackson, amongst others, would later warn the American people of the dangers that monopolistic, speculative financial interests posed to the young United States in the early 1800s. In his 1832 veto of the legislation that would have rechartered the Bank of the United States, President Jackson wrote:
The rich and powerful too often bend the acts of government to their selfish purposes... Many of our rich men have not been content with equal protection and equal benefits, but have besought to make themselves richer by act of Congress.
President Jackson declared to his cabinet "The Bank of the United States is itself a Government," and warned the American people private corporations sought "power to control the Government and change its character." He also courageously told his Vice President Martin Van Buren, "The bank is trying to kill me, but I will kill it!" And indeed, President Jackson did just that. However, the international money power seeking to subvert the United States was not defeated.

Time and time again, righteous men in American history raised the alarm bells and sought to prevent the subversion and destruction of the nation their ancestors founded. However, the insatiable desire for political and financial control over these United States was unstoppable, and the forces of international speculative financial capitalism came to dominate this country over the course of the 19th century. The destruction of American economic (and political) sovereignty was finally complete with the establishment of the Federal Reserve System in 1913, which centralized the banking and financial apparatus of this nation into the hands of a clique of international plutocrats hell bent on world domination and subjugation. The centralization of a nation's banking system is a key component of international communism, whose primary goal is the overthrow of Western civilization and all it stands for.

The very concept of a corporation has been transformed and perverted over time. In early American history, states granted private corporations a monopoly on fulfilling a particular public service for a specific period of time. If a road needed to be expanded, for example, and the state was lacking in funds to complete the project, a private corporation would write a charter explaining its purpose (expanding, managing, and maintaining the road expansion) and the state would grant the corporation the privledge of providing an essential public service. Corporations helped build canals, bridges, roads, and other major infrastructure projects, including the extensive railroad system which provided transportation and communication advancements to the American people and private businesses.

But even in this regard, corruption set in, monopolies formed, and the people became oppressed by large financial interests dominating and influencing the state and federal government. Expressing a popular grievance in early America, the editor of New York's Evening Post William Leggett, wrote:
We cannot pass the bounds of the city without paying tribute to monopoly. Not a road can be opened, not a bridge can be built, not a canal can be dug, but a charter for exclusive privileges must be granted for the purpose... The bargaining and trucking away charted corporation privileges is the whole business of our lawmakers.
The rise of speculative financial capital and large corporations, especially railroad corporations, ushered in an era of unprecedented greed, speculation, corruption, and insider dealings in early American history. Alexis de Tocqueville, the French philosopher and writer who wrote extensively about the unique political and cultural traditions of America, perhaps best expressed the plight of the struggling American frontiersman and farmer. Writing in Democracy in America, Volume Two, de Tocqueville contrasted the "territorial aristocracy" or the traditional elite in European society and the "manufacturing aristocracy" or the financial elite which had arisen in America:
The territorial aristocracy of former ages was either bound by law, or thought itself bound by usage, to come to the relief of its serving-men and to relieve their distresses. But the manufacturing aristocracy of our day first impoverishes and debases the men who serve it and then abandons them to be supported by the charity of the public.
Congressman Hendrick B. Wright of Pennsylvania, a champion of the working class and of the American pioneer, advanced legislation in the late 1870s to help homesteaders - small independent American farmers and ranchers - secure and develop their land without going into massive debt. Congressman Wright's efforts were defeated by plutocratic financial interests and their minions, who denied the small independent pioneer and farmer - the very men and women who made this country - any sort of financial concessions while they themselves were lavishly awarded government contracts and land grants. Congressman Wright, who once said, "The working men of this land are better entitled to the bounty of Government than aggregated wealth," responded to the rejection of his legislation with this poignant remark:
Congress can grant railroads money and land, but if it talks of relieving the poor and oppressed, the cry comes, 'We cannot reward idleness.'
I wonder what Congressman Wright would have said about the criminal bailout of Wall Street in late 2008? Congress can grant Wall Street speculators bailouts as a result of their criminal financial practices, but if it talks of relieving home-owners and oppressed debt-slaves, the cry comes, "We cannot reward idleness."  Has anything really changed in American politics in the past 150 years?

Indeed, government largess and corrupt dealings created corporate bonanzas, especially for railroad corporations, which was the standard operating procedure in America for much of 19th century and even to this day. Railroad, lumber, cattle, and mining interests were essentially handed large land grants and other special privileges and insider-deals by the federal government, while independent American farmers and homesteaders were largely exploited and forced to fend for themselves. After being elected to his first presidential term in 1884, President Grover Cleveland appointed William Andrew Jackson Sparks as land commissioner. Mr. Sparks' first report to Congress summarized the situation Americans knew all too well:
The widespread belief of the people in this country that the Land Department has been very largely conducted to the advantage of speculation and monopoly, rather than in the public interest I have found supported by developments in every branch of the service.
As former Governor of Pennsylvania Gifford Pinchot explained, "It must be remembered that monopolistic control was infinitely more potent in the West, in those days, than in the East. The big fellow had control of the little fellow to an infinitely greater extent west of the Father of Waters than east of it." Speculators, monopolists, and plutocrats were taking over America, and those that stood in their way did not stand a chance.

Henry Adams and Charles Francis Adams, Jr. prophetically wrote in the late 1800s:
The belief is common in America that the day is at hand when corporations far greater than the Erie - swaying power such as has never in the world's history been trusted in the hands of mere private citizens, controlled by single men like Vanderbilt, or by cominations of men like Fisk and Gould... after having created a system of quite but irresistible corruption - will ultimately succeed in directing government itself.
Congressman James B. Weaver, the populist presidential candidate for first the Greenback Party in 1880, then the People's Party in 1892, described the ails of the American political system which still plague us today when he wrote in 1892, "Public sentiment is not observed. The wealthy and powerful gain a ready hearing, but the plodding, suffering, unorganized complaining multitude are spurned and derided."

The 19th century truly was a pivotal period of time in American history.  It was during this century that the government formed by the Founding Fathers morphed from an instrument which served the American people to one which served private economic interests to the detriment of the average American worker, farmer, craftsman, and independent businessman.

Writing in Mein Kampf, Adolf Hitler succinctly explained exactly where America went wrong during the 19th century:
... as economic interests begin to predominate over the racial and cultural instincts in a people or a State, these economic interests unloose the causes that lead to the subjugation and oppression [of those people or State].
Perhaps unknowingly, Adolf Hitler perfectly described the United States of America during the 19th century - and it's only gotten worse. 

Stringing The Pearls: Chinese firm to build $1.4 bln Sri Lankan Port City

Source: Daily Mirror
Sri Lanka has signed a deal with a Chinese company to build a $1.4 billion city complex on reclaimed land near the harbour of the capital Colombo, an official said Wednesday.
The state-run Sri Lanka Ports Authority (SLPA) will reclaim 230 hectares (568 acres) next to the new Colombo South port, said SLPA chairman Priyath Bandu Wickrama.
He said the SLPA finalised a deal under which China Communications Construction Company Limited (CCCC) will invest $1.43 billion to build a “Port City” that will change the coastline in the capital.
“We are moving towards the sea to reclaim land and build a mini city,” Wickrama said during a visit to the port.
“We have finalised the deal with CCCC and construction will begin by September. We hope to complete the land reclamation within 39 months,” he added, without saying when the deal was struck.
He said the SLPA planned a new 22-floor headquarters, hotels, apartments and recreational activities on the reclaimed land. The CCCC will be given 50 hectares (123 acres) of the land on a 99-year lease.
Several international hotels, including Hong Kong-based Shangri La are building hotels in Sri Lanka to cash in on the island’s post-war growth after troops crushed Tamil rebels and ended 37 years of ethnic war in May 2009.
Chinese companies have emerged as key infrastructure partners and have already built air and sea ports, highways and railroads in the Indian Ocean island, which is strategically located along East-West trade routes.
The first phase of a $500 million container port next to the main Colombo harbour is due to open next month and bring Sri Lanka on a par with port facilities in Singapore and Dubai, Wickrama said.
China Harbour Engineering will have control over the new Colombo South Harbour for 35 years and it will compete with the existing state-run facilities as well as privately-owned container terminals within the large Colombo port.
Wickrama discounted fears that China was throwing a “string of pearls” or a geographical circle of influence, around the regional superpower India. He said Sri Lankan ports would not be allowed to engage in any military activity. (AFP)

Takeover: Banks Act In Their Own Interests, And They Own The Fed – Make Viral!

The Federal Reserve together with it’s owners, the mega-banks, have engineered a takeover of every citizen on the planet. By giving themselves competitive advantage (free money), and setting up laws so that they can monopolize large parts of the real economy, they have acted like a cartel and will continue doing so until they are stopped.
Clips from Senate committee on Banking, Housing and Urban Affairs, 23rd July 2013.…

Fed Economist Fired for Investigating Suspicious 9-11 Cash Transfers
Would you be surprised to learn that tens of billions in cold, hard cash was shuffled around just prior to 9-11 by none other than the Fed itself? Probably not.
That’s right. The average increase was $8 billion over five years, but it exploded to $18 billion just prior to that fateful day. None other than a Federal Reserve economist discovered this and was promptly fired for his efforts to reveal the cause. The official story involves an Argentine currency crisis. Clearly, this required his termination.
His story at 2m49s:

Profiting from Food Stamps, Student Loans, Unemployment: Wall Street, US Congress, Obama Cash-in

Profiting from Food Stamps, Student Loans, Unemployment: Wall Street, US Congress, Obama Cash-in

“Despite being the richest country in the world, poverty remains an important social issue in the United States. All too often poverty in America is used as a political weapon by both political parties to galvanize their voting base. What is lost in the midst of such politicking is the crony connection of corporations that have positioned themselves to profit from poverty. The welfare programs we use to attempt to alleviate poverty actually play directly into the plans of companies that lobby on behalf of legislation lauded as anti-poverty programs. Rather than overcoming poverty, these programs line the pockets of their promoters. Such crony connections must end.” Government Accountability Institute
According to the US Census Bureau’s Median Value of Debt by Household (2011), the median household debt (both secured and unsecured) for 35-44 year olds was $108,000 (USD); for those 45-54, $86,500; and for 55-64 age group it was $70,000. The data in the Census Bureau report also shows that the less formally educated one is the less debt one has.
The median debt for someone with no high school diploma is $20,000 (with a high school diploma is $42,000), while the median debt for a holder of a graduate or professional degree is $130,705. So while America’s educational leaders say that a college degree will likely lead to increased income over the years, they don’t mention that secured and unsecured debt increases the “smarter” one becomes.
Debt for You, Profit for Them
Maybe Americans should dump the pursuit of a college degree particularly in the face of rising interest rates for federal student loans and increased tuition and ancillary fees at colleges and universities across the land. High interest rates (the cost of money) on student loans can also serve as a barrier to college entry. Perhaps the “hidden hand of the market” is sending a message of some sort, that the financially sound path is to get an education in the 21st Century trades that combine, say, computers and engines or computer systems and networks. Add a Cisco or Microsoft certification to the tradecraft and a job for life is possible. But buyer beware, earning an Associate’s Degree earns you a median debt of $63,000.
Moreover pushing the myth that a college education is a must-have in the USA tends to generate excellent profits for investors, and makes college/university presidents, administrators and senior faculty, quite comfortable. Take the case of Sallie Mae. According to the Huffington Post’s September 2013 report Sallie Mae Profit Boosts College Endowments and Pension Funds As Students Pay More, “University endowments and teachers’ pension funds are among big investors in Sallie Mae, the private lender that has been generating enormous profits thanks to soaring student debt and the climbing cost of education…previously unreported investments [obtained by Huffington Post] mean that education professionals are able to profit twice off the same student: first by hiking the cost of tuition, then through dividends and higher valuations on their holdings in Sallie Mae, the largest student lender and loan servicer in the country, which profits by charging relatively high interest rates on its loans and not refinancing high-rate loans after students graduate and get well-paying jobs. Sallie Mae is a former government-sponsored enterprise that was fully privatized in 2004 and now trades publicly as SLM Corp…
Sallie Mae reported $939 million in net income last year, the highest since 2006. The publicly-traded company, which enjoys a government guarantee on most of its $174 billion in assets, has been profitable in eight of the last 10 years, generating a cumulative $7.3 billion profit. Its shares have risen 54 percent over the past year, outpacing the 19 percent gain in the Standard & Poor’s 500 Index, America’s benchmark equity gauge…The endowments of Furman University, Harvard University, Mount Holyoke College, and University of Michigan all hold stakes in Sallie Mae through their investments in Highfields Capital Management, a hedge fund that manages more than $11 billion and is the second-biggest Sallie Mae shareholder… Pension funds for teachers and other school employees such as the New York State Teachers’ Retirement System, State Teachers Retirement Board of Ohio, Pennsylvania Public School Employees Retirement System, New Mexico Educational Retirement Board, Teacher Retirement System of Texas and California State Teachers Retirement System (CalSTRS) also own significant chunks of Sallie Mae, as does asset manager TIAA-CREF, which oversees retirement funds for teachers, among others… Federal records show the company spent more than $1.4 million lobbying members of Congress last quarter.”
Rockefeller, Obama Nest Eggs Turn Gold

BANKERS! Rich Hall Nails It

Cyprus Deposits Plunge At Fastest Rate In History

Perhaps the most underreported news to come out of Europe this morning had nothing to do with PMI or employment or credit creation in the Eurozone. It had to do with Cyprus - the insolvent island that everyone forgot - and which since its March bail in has been left for a state of Schrodingerian suspended animation, where it is either alive or dead depending on what propaganda wave function it had to satisfy.
Recall that many, most certainly us, said that the imposed capital controls would have no impact in stemming the massive outflow of what money is left with the insolvent banking system, and very soon the entire banking system would remain deposit, and thus funding, free requiring more and bigger bailouts. Sure enough, this was just confirmed when the Central Bank of Cyprus reported that not only did local deposits drop to a level not seen since 2007, plunging by the second fastest absolute amount in history, but declined at the fastest rate ever!

Central Banks ‘Vote For Gold’ Due To Sovereign And Currency Concerns

by GoldCore
Today’s AM fix was USD 1,327.75, EUR 998.76 and GBP 861.73 per ounce.
Yesterday’s AM fix was USD 1,312.00, EUR 994.92 and GBP 857.63 per ounce.
Gold climbed $11.60 or 0.88% yesterday and closed at $1,331.50/oz.
Silver rose $0.04 or 0.2% and closed at $20.20.
Gold is 8.4% higher in July and set for the best month since January 2012 as lower prices lead to increased demand.

Gold Prices/ Fixes / Rates /Vols

Gold is on course for its third week of gains, buoyed by a weak dollar, no definite end to quantitative easing and continuing ultra loose monetary policies.  Central bank gold buying is also supporting gold.
Premiums in India are $20 per ounce over London prices as demand outstrips government restricted supply before the festival season on the subcontinent.
Premiums in China have come down but remain robust at $12 per ounce and gold forward rates (GOFO) remain negative in the near term – 1, 2 and 3 months (see table above and chart below).
Central banks remained net buyers of gold last month as seen in the IMF data released overnight.
Many emerging-market countries with considerable foreign exchange reserves continue to diversify their fx reserves, most of which are in dollars and euros, and increase their gold reserves.
Emerging market central banks have increased their holdings of the monetary asset over the past few years as the sovereign debt crises in the EU, U.S. and Japan put pressure on reserve currencies such as the Japanese yen, U.S. dollar and the euro.
Falling gold prices to their lowest levels in almost three years made gold more attractive to many central banks.

LBMA 1 Month Gold Forward Offered Rate (GOFO)

Russia, Greece, Ukraine, Kazakhstan, Kyrgyzstan, Belarus and Azerbaijan increased their gold holdings in June according to the IMF data.
Mozambique, Serbia and Tajikistan increased holdings in May, which updates as countries report according to Bloomberg.
Russia which now has the seventh-largest gold holdings in the world,added just 9,000 ounces to its holdings, which now stand at 32.0 million ounces.
Russia, which has purchased significant volumes of gold in recent years, has increased its reserves by almost 10% over the past year alone.
Kazakhstan, another regular bullion buyer in recent months, also increased its holdings in June. The country’s central bank bought more than 45,000 ounces, taking its reserves to 4.2 million ounces.
Russia and Kazakhstan increased their gold reserves for a ninth straight month in June.
Greece added 1,000 ounces to its 3.6-million-ounce reserve, while Kyrgyzstan and Belarus also added a small amount of gold to their holdings.
Ukraine returned for the second month running in June, adding another large 80,000 troy ounces of gold to its official reserves, which now stand at nearly 1.3 million ounces.
Azerbaijan bought nearly 65,000 ounces, lifting its reserves to more than 250,000 ounces. It is the sixth consecutive month the country has added to its official holdings, which in December stood at nearly nothing.
Central banks were overwhelmingly buyers and were net buyers again last month but there were some gold reserve sales too.
Guatemala, which last sold gold in July 2012 cut its holdings by 7,300 ounces. The Central American country’s reserves now stand at 214,300 ounces. Neighboring Mexico and the South American nation Suriname made small cuts to their official reserves too.
Germany sold a very small amount of their gold reserves in June and it is believed this was done in order to mint commemorative gold coins. Germany lowered its gold holdings by 25,000 ounces. The reduction is, however, small compared with the overall size of the country’s reserves, which stand at more than 109.0 million ounces.
Germany has the second-largest reserves of gold, behind the U.S. and is attempting to repatriate to Germany its gold reserves that have been stored in the New York Federal Reserve since after World War II.
The Bundesbank wasn’t immediately available for comment according to Marketwatch. It has previously said it sporadically sells gold to the nation’s Ministry of Finance to mint commemorative coins.

Turkey’s gold reserves also declined by just over 120,000 ounces to 14.2 million ounces. Their gold reserves have nearly quadrupled over the past two years after its central bank began accepting gold as collateral from commercial banks. It is believed that rather than on-market purchases, this is the main reason for the recent increases.
China does not report to the IMF and there are strong grounds for believing thatChina continues to accumulate gold quietly and without declaring … for now.
When China does announce its expected increase in holdings it could be of a significant amount that could reignite gold’s secular bull market.
‘Vote For Gold’
“You have to choose, as a voter, between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”
The above quotation from GB Shaw who was born on this day July 26, in 1856, is ringing true during these uncertain political and economic  times.
Shaw’s witty but pointed quotation was featured in a letter printed in the Financial Times today and it is featured on our Facebook page today.
Given the high level of financial and economic uncertainty facing us, it is wise to step back and take a long term historical perspective of the current crisis.
Throughout history, gold has been used as the safest form of money – a form of money that cannot be debased or printed into oblivion by bankers, politicians and reckless governments. When experiments with paper money and massive creation of debt go wrong as unfortunately they inevitably have done throughout history, economic hardship has been the result.
This is why wise people throughout history have always appreciated the finite currency that is gold.
From Aristotle to G. B. Shaw to Kyle Bass to Voltaire their thoughts help enlighten why one should save or invest in precious metals.
Kyle Bass, the respected hedge fund manager recently said:
“Buying gold is just buying a put against the idiocy of the political cycle.  It’s that simple.”
Aristotle, the Greek philosopher and genius (384-322BC) wrote:
“In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and god-like intelligence for kings.”
Lord Rees Mogg, economist & former editor of The Times & assistant editor of The Sunday Times said:
“Governments lie; bankers lie; even auditors sometimes lie: gold tells the truth.”
More recently Hans Sennholz, author & economist of Austrian school wrote:
“For more than two thousand years gold’s natural qualities made it man’s universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper. No other commodity enjoys as much universal acceptability and marketability as gold.”
In the same vein, Voltaire, the French poet, historian & philosopher ( 1694 – 1778) wrote:
“Paper money goes down to its intrinsic value – zero.”

Gold Retreats to April-Crash Low, China to Beat India as No.1 Buyer

Gold Retreats to April-Crash Low, China to Beat India as No.1 Buyer

The PRICE of gold bullion retreated from an overnight rise to $1340 per ounce in London on Friday morning, trading back down to $1322 – the low hit by the mid-April crash – as the US Dollar ticked higher.

Silver prices slipped back below $20 per ounce – a 33-month low when first breached in June.

Japanese stocks meantime fell hard as the Yen rose on the currency markets, and European equities slipped with commodities.

Government bond prices held steady, with 10-year US Treasury yields at 2.57%.

The US Federal Reserve next announces interest-rate and quantitative easing policy on Wednesday.

“I don’t really see how gold can go much higher,” says Matthew Turner, precious metals analyst at Australian bank Macquarie.

“After all the shenanigans of the last few weeks, we know that [QE] tapering at some point is clearly still the policy.”

China’s households will meantime overtake India as the world’s No.1 buyer of goldin 2013, said Marcus Grubb, managing director for investment at market-development organization the World Gold Council, on Thursday.

Buying perhaps 1,000 tonnes of gold – around 1 ounce in every 4 sold worldwide in 2013 – China is growing its jewellery demand, Grubb says, but not as fast as it’s growing demand for investment gold bars and coin.

Analysts have been forecasting China to overtake India since late 2009.

Investment bank and bullion market-maker Societe Generale yesterday warned thatgold-price volatility looks certain if there’s a “hard landing” in China‘s economy.

“Gold purchases by central banks have noticeably slowed of late,” says a note from Germany’s Commerzbank, pointing to the 400 tonnes forecast for 2013 against last year’s 532 tonnes.

New data from the International Monetary Fund showed only light gold buying amongst central banks in June, with Turkey’s reserves falling for the first time in a year, down 0.8% to 441.5 tonnes.

“The flows in the central banks are pretty small now, the big shifts are gone,” Bloomberg quotes economist Justin Smirk at Westpac Banking in Sydney.

“Central bank buying might give us a little bit of a floor, but they’re just soaking up some of what the ETFs are selling. You’re not going to see central banks coming in to push the price up.”

The world’s largest exchange-traded gold trust fund, the SPDR (ticker: GLD) yesterday shed another 2 tonnes on Thursday, taking its bullion – held to back shares in the trust – down  to 927 tonnes, the lowest level since Feb. 2009.

Lower prices mean supplies of scrap gold from existing jewelry and investment owners may slump by three-quarters to 400 tonnes or below, according to 2013 forecasts earlier this week.

“The pawn-broking industry is facing a collapse in the price of gold,” reports NPR’s Planet Money, reducing margins on gold items pledged by borrowers.

On the mining supply side, meantime, world No.3 Goldcorp joined No.2 Newmont in announcing sharp write-downs on the value of its assets, thanks to the 20% drop in world gold prices so far in 2013.

Adding $2 billion and $1.8bn respectively to the gold mining majors’ recent $9bn in writedowns, Goldcorp and Newmont Mining have both dropped more than 40% already on the stock market since gold began falling from $1800 per ounce last fall

Adrian Ash

Stocks Sliding: A Wave of Municipal Bankruptcies Looms, Japan Food And Energy Prices Rise; All Others Drop, China Risks A Crisis

With hotter than expected inflation in Japan (yes we know that’s what they wanted), it appears (from Nikkei and JPY) that there is a growing concern Kuroda will back off just a little during his speech on Sunday night (NY time) from the print-til-we-stink paradigm. Japanese stocks are down over 5% since Tuesday and the JPY is surging (suggesting markets are crying out for Kuroda to do a Bernanke and shift to longer/lower forward guidance). US equities – dragged by JPY-related carry unwinds – are also diving, back near yesterday’s lows.

Detroit bankruptcy case could bring unwanted change for muni market
Detroit’s bankruptcy is sending shivers through the more than $3.7 trillion municipal bond market, as investors worry the case will change the way certain bondholders are dealt with.
The municipal bond market is concerned on several fronts, but one of the thorniest problems is how the city’s general obligation bonds will be viewed. Detroit Emergency Manager Kevyn Orr said that the city is treating its limited and unlimited-tax General Obligation bonds as unsecured debt, except for those backed by liens on state aid.
The market has been selling off, with other credit, since early May on talk from theFed that it will likely pare down the size of its bond purchases before the end of the year. The 10-year Treasury yield has gone from a low of 1.61 percent in early May to 2.57 percent Thursday. In the same time frame, the 10-year 10 year AAA muni yield, as defined by the MMD scale, went from 1.66 percent to 2.75 percent.
Japan Food And Energy Prices Rise; All Others Drop
Today, to much fanfare, the FT and other media blast that “Japan posts highest inflation rate since 2008” using this as evidence that Abenomics is once again working (i.e., that the Nikkei 225 has resumed its upward nominal path). Unfortunately, as usually happens, there is a problem here: this is simply not true.
The only reason why Japan posted its first positive CPI print in years has nothing to do with demand-pull broad “benign” inflation driven by rising wages, and everything to do with the “cost-push” of a plunging Yen forcing food and energy prices higher, something we predicted long ago would happen. In fact, when stripping away food and energy, core inflation was slightly weaker than expected with the first month-on month declines in both Tokyo and nationwide in the latest data in several months (seasonally adjusted). Which is to be expected: with incomes flat at best, in order to accommodate soaring food and energy prices the local population has to cut their spending for all other products, leading to deflation.

But what is most ironic is that economists in the US advise everyone to ignore soaring food and energy costs and to focus on the benign sub 2% annual rise in “other” hedonically-adjusted prices. However, when it comes to Japan, it is the opposite.
Japan Just Had Its Worst Day In A Month, And US Markets Are Heading Lower
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Japanese Inflation Is Entirely Due To Higher Energy Prices
China Meltdown 2013: Economy Is Rapidly Approaching ZERO Growth, Money-Market Funds See Big Outflows, Wage Growth Is Slowing Significantly…

Good morning. Here’s what you need to know.

  • Markets in Asia were mixed in overnight trading. The Japanese Nikkei 225 fell 3%, the Hong Kong Hang Seng rose 0.3%, and the Shanghai Composite fell 0.5%. European markets are in the red with the exception of France and Spain. In the United States, futures point to a negative open.
  • Japanese consumer prices rose 0.2% year over year in June after declining 0.3% in May, marking the first positive annual inflation rate in over a year and the biggest monthly jump in prices since November 2008. Economists were looking for a smaller advance to 0.1% inflation. The increase was largely due to higher energy prices. Stripping out food and energy, consumer prices were still down 0.2% year over year in June.
  • In the week ended July 24, equity funds reported $8.0 billion in inflows, while bond funds saw $4.4 billion in inflows. High yield bond and leveraged loan funds were the big winners, with both asset classes receiving record inflows this week.
  • Amazon reported a loss of $0.02 per share in the second quarter on revenues of $15.7 billion. Both numbers missed consensus forecasts for earnings of $0.06 per share and revenues of $15.73 billion. The company offered third-quarter revenue guidance in the range of $14.45 billion to $17.15 billion versus estimates for $16.98 billion, and shares are lower in pre-market trading.
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