Friday, August 16, 2013

The $4 Trillion Choice: Why the Stakes Are So High for Next Fed Chair

President Obama is mulling what could well be the most important decision of his second term – nominating Ben Bernanke’s replacement as Federal Reserve chairman.
Bernanke, whose second four-year term is set to end in January, has presided over perhaps the most dramatic period in the century-long history of the Fed, the mostly autonomous central bank that sets interest rates and controls the supply of money for the U.S. economy.

The credit crisis that emerged in late 2007 with a downturn in the housing market eventually led to a near-collapse of the financial system and the deepest economic recession since the Great Depression.
In response, Bernanke drove the short-term interest rates under its control to near zero, and unleashed three rounds of bond buying that have injected massive amounts of fresh money into the economy to keep inexpensive loans flowing in the economy.
The economic recovery, while slower than hoped, has continued since late 2009, and Bernanke has vowed to keep rates unusually low at least until the unemployment rate, now at 7.4%, falls to 6.5%.
The stakes surrounding Obama’s choice for Bernanke’s successor are unusually high. For one thing, the Fed chairmanship doesn’t frequently become vacant. Since 1979, there have been only three leaders of the Fed.

Paul Volcker was put forward by President Jimmy Carter and is credited with slaying runaway inflation and setting the scene for the ‘80s economic renaissance through punitively high interest rates. Alan Greenspan used opportunistic rate cuts to help the eoconmy through the 1987 stock-market crash and 1990 recession, ushering in the ‘90s boom.
Bernanke has also presided over an unusually aggressive stimulus policy, which continues for the moment in the form of $85 billion of Fed purchases of Treasury and mortgage bonds per month. His programs have ballooned the Fed’s assets to nearly $4 trillion from less than $1 trillion before the financial crisis.
At some point, Fed stimulus must be wound down in response to further economic improvement, or perhaps a pickup in inflation. At the moment, financial markets are nervously watching for clues of the Fed’s intentions for dialing back its “quantitative easing” campaign of monthly bond purchases – with many economists expecting this to occur in September.
The new Fed chair will have to manage this process, while also assuring world investors, consumers and businesspeople that he or she stands ready to respond assertively to changing economic fortunes. With interest rates around the developed world already close to zero, central bankers’ spoken messages about future policy carry enormous weight.
The two presumed frontrunners for the Fed nomination are Lawrence Summers, Treasury Secretary under President Clinton and Obama’s first National Economic Advisor, and Janet Yellen, current Federal Reserve Vice Chair.

The choice has been unusually contentious, in part because of the way Obama touched off the succession race by seeming to declare in an interview the end of Bernanke’s tenure before the Fed chief himself did, and months before the end of his term. The contrasting personalities of Summers and Yellen, and the strong feelings voiced by their respective supporters, have also made the nomination process more intense. The White House has also not ruled out other dark-horse contenders.
Few question the economic aptitude or policymaking experience of either candidate. Both have been broadly supportive of Bernanke’s policies, though Yellen is generally viewed to be more apt to lean toward greater economic stimulus and less concerned with potential inflationary risks.
Summers is almost universally considered intellectually brilliant but tactless and abrasive, perhaps more prone to impulsive public comments. He famously alienated the Harvard faculty while he was university president with some musings over whether women might lack some capacity to excel in the upper reaches of the sciences.

Yellen is widely liked in Washington and the economics profession, respected for her research work and was shown by The Wall Street Journal recently to be the most accurate economic forecaster among Fed policy officials. Somewhat professorial in manner, she has drawn the support of many female legislators who believe she would make an excellent choice as the first woman Fed chief.
While both seem qualified and have their strong advocates, whomever Obama chooses will certainly face a tough Senate confirmation fight – another indication of how high the stakes are.

Chinese Discovered Fake Gold Bars of Tungsten in 2009

Listen to Market Analyst , Peter Schiff  in the Video at end of Article

Gld ETF Warning, Tungsten Filled Fake Gold Bars
Commodities / Gold & Silver, Nov 12, 2009
By: Rob Kirby
Gold Finger – A New Take On Operation Grand Slam With A Tungsten Twist”
I’ve already reported on irregular physical gold settlements which occurred in London, England back in the first week of October, 2009.  Specifically, these settlements involved the intermediation of at least one Central Bank [The Bank of England] to resolve allocated settlements on behalf of J.P. Morgan and Deutsche Bank – who DID NOT have the gold bullion that they had sold short and were contracted to deliver.  At the same time I reported on two other unusual occurrences:
1] -   irregularities in the publication of the gold ETF – GLD’s bar list from Sept. 25 – Oct.14 where the length of the bar list went from 1,381 pages to under 200 pages and then back up to 800 or so pages.
2] -   reports of 400 oz. “good delivery” bricks of gold found gutted and filled with tungsten within the confines of LBMA approved vaults in Hong Kong.
Why Tungsten?
If anyone were contemplating creating “fake” gold bars, tungsten [at roughly $10 per pound] would be the metal of choice since it has the exact same density as gold making a fake bar salted with tungsten indistinguishable from a solid gold bar by simply weighing it.
Unfortunately, there are now more sordid details to report.
When the news of tungsten “salted” gold bars in Hong Kong first surfaced, many people who I am acquainted with automatically assumed that these bars were manufactured in China – because China is generally viewed as “the knock-off capital of the world”.
Here’s what I now understand really happened:
The amount of “salted tungsten” gold bars in question was allegedly between 5,600 and 5,700 – 400 oz – good delivery bars [roughly 60 metric tonnes].
This was apparently all highly orchestrated by an extremely well financed criminal operation.
Within mere hours of this scam being identified – Chinese officials had many of the perpetrators in custody.
And here’s what the Chinese allegedly uncovered:
Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes].  Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.  I know folks who have copies of the original shipping docs with dates and exact weights of “tungsten” bars shipped to Ft. Knox.      
The balance of this 1.3 million – 1.5 million 400 oz tungsten cache was also (gold) plated and then allegedly “sold” into the international market.
Apparently, the global market is literally “stuffed full of 400 oz salted bars”.
Makes one wonder if the Indians were smart enough to assay their 200 tonne haul from the IMF?
A Slow Motion Train Wreck, Years in the Making
An obscure news item originally published in the N.Y. Post [written by Jennifer Anderson] in late Jan. 04 has always ‘stuck in my craw’:
DA investigating NYMEX executive – Manhattan, New York, district attorney’s office, Stuart Smith – Melting Pot – Brief Article – Feb. 2, 2004
A top executive at the New York Mercantile Exchange is being investigated by the Manhattan district attorney.
Sources close to the exchange said that Stuart Smith, senior vice president of operations at the exchange, was served with a search warrant by the district attorney’s office last week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it was unrelated to any of the exchange’s markets. She declined to comment further other than to say that charges had not been brought. A spokeswoman for the Manhattan district attorney’s office also declined comment.
The offices of the Senior Vice President of Operations – NYMEX – is exactly where you would go to find the records [serial number and smelter of origin] for EVERY GOLD BAR ever PHYSICALLY settled on the exchange. They are required to keep these records. These precise records would show the lineage of all the physical gold settled on the exchange and hence “prove” that the amount of gold in question could not have possibly come from the U.S. mining operations – because the amounts in question coming from U.S. smelters would undoubtedly be vastly bigger than domestic mine production.
We never have found out what happened to poor ole Stuart Smith – after his offices were “raided” – he took administrative leave from the NYMEX and he has never been heard from since. Amazingly [or perhaps not], there never was any follow up on in the media on the original story as well as ZERO developments ever stemming from D.A. Morgenthau’s office who executed the search warrant.
Are we to believe that NYMEX offices were raided, the Sr. V.P. of operations then takes leave – all for nothing?
These revelations should provide a “new filter” through which Rothschild exiting the gold market back in 2004 begins to make a little more sense:
“LONDON, April 14, 2004 (Reuters) – NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.”
Interestingly, GATA’s Bill Murphy speculated about this back in 2004;

“Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but suspect:”

Coincidentally [or perhaps, not?], GLD Began Trading 11/12/2004
In light of what has occurred – regarding the Gold ETF, GLD – after reviewing their prospectus yet again, it becomes pretty clear that GLD was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a stealth, cesspool / catch-all, slush-fund and a likely destination for many of these “salted tungsten bars” where they would never see the light of day – hidden behind the following legalese “shield” from the law:
Excerpt from the GLD prospectus on page 11:
Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fitneness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.
The Fed Has Already Been Caught Lying
Liberty Coin’s Patrick Heller recently (2009) wrote,
Earlier this year, the Gold Anti-Trust Action Committee (GATA), filed a second Freedom of Information Act (FOIA) request with the Federal Reserve System for documents from 1990 to date having to do with gold swaps, gold swapped, or proposed gold swaps.
On Aug. 5, The Federal Reserve responded to this FOIA request by adding two more documents to those disclosed to GATA in April 2008 from the earlier FOIA request. These documents totaled 173 pages, many parts of which were redacted (covered up to omit sections of text). The Fed’s response also noted that there were 137 pages of documents not disclosed that were alleged to be exempt from disclosure.
GATA appealed this determination on Aug. 20. The appeal asked for more information to substantiate the legitimacy of the claimed exemptions from disclosure and an explanation on why some documents, such as one posted on the Federal Reserve Web site that discusses gold swaps, were not included in the Aug. 5 document release.
In a Sept. 17, 2009, letter on Federal Reserve System letterhead, Federal Reserve governor Kevin M. Warsh completely denied GATA’s appeal. The entire text of this letter can be examined at
The first paragraph on the third page is the most revealing. Warsh wrote, “In connection with your appeal, I have confirmed that the information withheld under exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”
This paragraph will likely be one of the most important news stories of the year.
Though not stated in plain English, this paragraph is an admission that the Fed has in the past and may now be engaged in trading gold swaps. Warsh’s letter contradicts previous Fed statements to GATA denying that it ever engaged in gold swaps during the time period between Jan. 1, 1990 and the present.
[Perhaps most importantly], this was GATA’s second FOIA request to the Federal Reserve on the issue of gold swaps. The 173 pages of documents received for the 2009 FOIA request all pre-dated the 2007 FOIA request, which means they should have been released in the response to the earlier FOIA request. This establishes a likelihood that the Federal Reserve has failed to adequately search or disclose relevant documents. Further, the Fed response admitted that it had copies of relevant records that originally appeared on the Treasury Department Web site, but failed to include them in its response.
Now that Federal Reserve governor Warsh has admitted that the Fed has lied in the past about the Fed’s involvement with gold. It should now be very clear to everyone why the Fed is lying and the true nature of what they are hiding / withholding.
On Doing God’s Work
An important footnote to consider is the inter-twined-ness of the U.S. Federal Reserve and the U.S. Treasury [can anyone really tell them apart?] as well as this duopoly’s two principal agents – J.P. Morgan-Chase and Goldman Sachs.  When one truly grasps the nature of these highly conflicted relationships it gives a fuller meaning to words recently uttered by Goldman head, Lloyd Blankfein, who claimed,
    “I’m doing god’s work
Does this really mean that Mr. Blankfein believes that the Federal Reserve is god?  You can judge for yourself.  While the Fed prints money like no one else could – except god almighty himself [or Gideon Gono, perhaps?] – I really doubt that was the intent back in 1864, when the U.S. adopted “In God We Trust” as their official motto.
And that’s my two cents worth for today.
Got [real] physical gold yet?
By Rob Kirby
Rob Kirby is proprietor of and sales agent for Bullion Custodial Services.  Subscribers to the Kirbyanalytics newsletter can look forward to a weekend publication analyzing many recent global geo-political events and more.  Subscribe to Kirbyanalytics news letter here.  Buy physical gold, silver or platinum bullion here.
Copyright © 2009 Rob Kirby – All rights reserved.


India’s Risky Venture: Buying Iranian Oil

India Set to Increase Oil Imports from Iran Despite U.S. Pressure
( After months of sanctions and numerous attempts to destroy the Iranian economy, the U.S. House of Representatives voted once again earlier this month to strengthen the existing sanctions against Iran by targeting the nation’s remaining oil exports.
Iran, which refuses to prop up the failing U.S. dollar, accepts euros, rubles, yuan, and even gold for its oil and currently exports approximately 1 million barrels of petroleum per day. (Iran’s current level of oil exports has already been cut in half from 2.2 million barrels last year, by the existing sanctions.)
The U.S. has also targeted Chinese banks, which have been instrumental in helping Iran maintain its oil exports by settling the oil sale transactions in currencies outside of the U.S. dollar. (China is Iran’s largest oil customer.)
For those who understand the insidious nature of America’s global petrodollar scheme, the Congressional retaliation at Iran’s insistence on selling its oil in currencies outside of the U.S. dollar is no surprise.
These recent actions have a precedent. During World War II, U.S. President Franklin D. Roosevelt placed aggressive and punitive sanctions on Japan. Some historians believe that this policy led to the Japanese bombing of the U.S. naval base at Pearl Harbor.

India’s Risky Venture

This week, energy-starved India appeared eager to increase its oil imports from the country after Iran agreed to accept India’s currency, the rupee, as payment. Because the Indian rupee is not a widespread currency, Iran will likely use the rupees to purchase imports from India.
Some Indian politicians fear U.S. reprisals for conducting business with Iran. It seems, however, that the concerns and demands of India’s growing voting population may trump U.S. wishes.
The Wall Street Journal has an interesting piece about India’s risky venture here.
Finally, here’s a recent video of U.S. Secretary of State, Hillary Clinton, urging India to stop importing oil from Iran.

Ron Paul: The Drug Companies And Insurance Companies Are The Ones Who Write These Laws!

Tungsten Filled Gold Bars

FAKE PAMP SUISSE Tungsten Filled Gold Bars found in NYC. Is your gold bu...

Wolframbarren erkennen - how to detect tungsten filled gold bars

P.M. Kitco Metals Roundup: Gold Surges To 7-Week High On Safe-Haven, Technical Buying

(Kitco News) - Comex gold futures prices ended the U.S. day session sharply higher, near the daily high and hit a fresh seven-week high Thursday. Safe-haven buying was featured amid the sell- off in the U.S. stock market and the escalation in violence in Egypt. Technical buying was also seen Thursday around midday when key chart resistance levels were penetrated on the upside, which trigger buy-stop orders. The U.S. dollar index also sold off sharply around midday, which also gave the gold bulls some fuel. The gold market bulls gained fresh upside near-term technical momentum on Thursday. December gold was last up $29.10 at $1,362.70 an ounce. Spot gold was last quoted up $26.80 at $1,363.75. September Comex silver last traded up $1.198 at $22.985 an ounce.
Reports Thursday said around 525 people have died the past two days in anti-government violence in Egypt. Government troops have reportedly shot citizens protesting in the streets. This news helped to support the safe-haven demand in the gold market. Egypt controls the Suez Canal, through which a good percentage of the world’s oil traffic and other commerce flow.
The gold market saw initial selling pressure in early U.S. trading Thursday. U.S. jobless claims in the latest reporting week fell by 15,000 workers. Meantime, the U.S. consumer price index came in at a tame rise of 0.2% in July, which was right in line with expectations. That jobless claims added fuel to the fire for those thinking the Federal Reserve will begin to “taper” its monthly bond-buying program, also known as quantitative easing, sooner rather than later, and possibly as soon as September.  The consumer price data suggests continued low inflationary price pressures and that was also not bullish for the gold or silver markets.
There was a batch of other U.S. economic data released Thursday that failed to significantly move the markets.  Also, St. Louis Fed president James Bullard spoke at a breakfast meeting Thursday morning. Bullard said nothing that significantly moved the markets.
The U.S. dollar index was solidly lower Thursday and sold off suddenly and mysteriously around midday. The greenback had been firmer Thursday morning following the bullish weekly jobless claims data. The dollar index bears have the overall near-term chart advantage. Nymex crude oil futures prices were firmer Thursday on the Egypt unrest. The crude oil bulls have the overall near-term technical advantage.
The London P.M. gold fix is $1,329.75 versus the previous P.M. fixing of $1,328.50.
Technically, December gold futures prices closed nearer the session high and hit a fresh nearly two-month high Thursday. Gold bears still have the overall near-term technical advantage, but the bulls made some good headway Thursday. Thursday’s price actions started a six-week-old uptrend that is now in place on the daily bar chart. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,400.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,300.00. First resistance is seen at Thursday’s high of $1,367.90 and then at $1,375.00. First support is seen at $1,350.00 and then at $1,345.00. Wyckoff’s Market Rating: 4.0
September silver futures prices closed nearer the session high Thursday and hit a fresh nearly three-month high. Bulls have gained solid upside technical momentum the past week. Bulls have the near-term technical advantage. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $24.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $21.00. First resistance is seen at Thursday’s high of $23.19 and then at $23.50. Next support is seen at $22.75 and then at $22.50. Wyckoff's Market Rating: 6.0.
September N.Y. copper closed up 10 points at 334.10 cents today. Prices Thursday closed nearer the session high and closed at a fresh nine-week high close. Copper bulls have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the June high of 341.25 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 317.50 cents. First resistance is seen at this week’s high of 334.95 cents and then at 336.00 cents. First support is seen at 332.50 cents and then at 330.00 cents. Wyckoff's Market Rating: 6.0.
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By Jim Wyckoff

Greenspan Admits The Federal Reserve Is Above The Law & Answers To No One


2007 all over again?

With so many on Wall Street fighting over the valuation of stocks and worrying whether the market rally has gotten ahead of itself, one economist tells CNBC that prices in today’s market look eerily similar to 2007.
Dan Seiver, editor of the Pad System Report and a professor of finance at San Diego State University, bases his long-term valuation model on Value Line’s median appreciation potential, which he said has shown statistically to have predictive value of where the market is headed.
“Right now, that number is relatively low. It’s down in the range that it was in 2007,” Seiver told “Squawk on the Street” on Thursday. “That tells me that over the next few years, the returns on stocks aren’t going to be particularly good and they could even be negative.”
Cramer: ‘Giant reset’ looming for markets
A “giant reset” is looming for the markets because the improving economy is simply not trickling down to companies’ bottom lines, CNBC’s Jim Cramer said Thursday.
“Macro is great, but when you have to go deal with companies, it’s bad,” Cramer said on “Squawk on the Street.”
“We have to deal with the four walls of the corporate canvas, and they are simply not able to turn this macro positive into micro earnings gains, and that’s a real conundrum, particularly when the 10-year is signaling that happy days are here again,” he said.
Obama’s Economic Approval Slips to 35%
Was 42% in June; decline mirrors drop in overall approval
PRINCETON, NJ — Despite President Barack Obama’s renewed focus on the nation’s economy this summer, he scores worse with Americans on the economy than he did in June. His approval rating on the issue, now 35%, is down seven percentage points, and his ratings on taxes and the federal budget deficit are each down five points. During the same period, his overall approval rating is down three points.

Recent Trend in President Obama's Overall and Issue Job Ratings, June vs. August 2013
Preps end run around Congress to hike cell phone tax…
Dow skids 200+

Wal-Mart, Macy’s, Kohl’s Cut Profit Outlook; Cisco to Cut 4,000 Jobs, Blames Weak Economic Recovery

The earnings hit parade keeps on rolling, but not in the directions bulls wanted or expected. And with stocks priced well beyond perfection, today’s reaction should hardly be a surprise. Yet, treasury yields soared once again in spite of poor earnings, and in spite of a flat industrial production report.
Wal-Mart, Macy’s, Kohl’s Cut Profit Outlook
Yahoo!Finance reports Wal-Mart cuts profit outlook on shopper worries
 Wal-Mart Stores Inc. cut its annual profit and revenue outlook Thursday as the world’s largest retailer expects a tough economy at home and abroad to continue to squeeze its low-income shoppers through the rest of the year.
Wal-Mart also reported second-quarter results that missed Wall Street estimates. The company’s stock fell nearly 2 percent in premarket trading.
Wal-Mart’s sober assessment of consumer spending adds to worries in earnings from Macy’s Inc. and Kohl’s Corp. Both lowered their expectations for the year after reporting disappointing results.
Wal-Mart said recent tax changes have further put pressure on its shoppers. Americans are dealing with a 2 percentage-point increase in payroll taxes that took effect Jan. 1. That means that take-home pay for a household earning $50,000 a year has been sliced by $1,000.
“The retail environment remains challenging in the U.S. and our international markets, as customers are cautious in their spending,” Wal-Mart Chief Financial Officer Charles Holley said in a statement. He noted a “reluctance” among its customers to spend on discretionary items like flat-screen TVs.
Cisco to Cut 4,000 Jobs, Blames Weak Economic Recovery
The Wall Street Journal reports Cisco to Cut 4,000 Jobs, Blames Weak Economic Recovery.
Wal-Mart, Cisco, taper talk send Dow down 200 points

Gold Gone? Germany baffled as Fed bars access to bullion

Obama declares Executive Order that will make food costs SKYROCKET!

Obama issued an Executive order on August 1, 2013 that will effectively ban Ammonium Nitrate in the USA. It will become too expensive and create too much possible civil and criminal liability to manufacture, store, or transport it. Clinton did the same thing to Anhydrous Ammonia dealers in 1999. It put most Anhydrous dealers out of business. Obama is imposing the same regs and adding explosives regulations on top of OSHA and EPA regulations. It’s all there if you know how to read bureacratese.
Food and Fuel prices will skyrocket because Ammonium Nitrate forms the basis for almost all nitrogen in granular fertilizers used in American farming. There are no cost and ease of manufacture/use equivalents for ammonium nitrate. Supply and demand economics are going to be the harsh lesson of the day. Crop yields will go down. Corn is the basis for the American food supply and the fuel additive ethanol. A.N. is critical in corn production.
Hope everyone is ready for $12/gallon gasoline and $20 a box corn flakes.
You know why NKoreans are starving?? Because they don’t have ammonium nitrate to fertilize their crops… so they have shi*ty yields…
Executive Order — Improving Chemical Facility Safety and Security


Gold Gone? Germany baffled as Fed bars access to bullion

‘Wild West’ Of Groundwater: Billion-Dollar Nestlé Extracting B.C.’s Drinking Water For Free!

The price of a litre of bottled water in B.C. is often higher than a litre of gasoline.

However, the price paid by the world’s largest bottled water company for taking 265 million litres of fresh water every year from a well in the Fraser Valley — not a cent.

Because of B.C.’s lack of groundwater regulation, Nestlé Waters Canada — a division of the multi-billion-dollar Switzerland-based Nestlé Group, the world’s largest food company — is not required to measure, report, or pay a penny for the millions of litres of water it draws from Hope and then sells across Western Canada.

According to the provincial Ministry of Environment, “B.C. is the only jurisdiction in Canada that doesn’t regulate groundwater use.”

“The province does not license groundwater, charge a rental for groundwater withdrawals or track how much bottled water companies are taking from wells,” said a Ministry of Environment spokesperson in an email to The Province.

This isn’t new. Critics have been calling for change for years now, saying the lack of groundwater regulation is just one outdated example from the century-old Water Act.

The Ministry of Environment has said they plan — in the 2014 legislature sitting — to introduce groundwater regulation with the proposed Water Sustainability Act, which would update and replace the existing Water Act, established in 1909. But experts note that successive governments have been talking about modernizing water for decades, but the issue keeps falling off the agenda.

This time, many hope it will be different.

“It’s really the Wild West out here in terms of groundwater. And it’s been going on for over 20 years, that the Ministry of Environment, the provincial government has been saying that they’re going to make these changes, and it just hasn’t gone through yet,” said Linda Nowlan, conservation director from World Wildlife Fund Canada.


In the District of Hope, Nestlé’s well draws from the same aquifer relied upon by about 6,000 nearby residents, and some of them are concerned.

“We have water that’s so clean and so pure, it’s amazing. And then they take it and sell it back to us in plastic bottles,” said Hope resident Sharlene Harrison-Hinds.

Sheila Muxlow lives in nearby Chilliwack, downstream the Fraser River from Hope. As campaign director for the WaterWealth Project, she often hears from Hope residents who worry about the government’s lack of oversight with Nestlé’s operations there.

“It’s unsettling,” Muxlow said. “What’s going to happen in the long term, if Nestlé keeps taking and taking and taking?”

While Nestlé is the largest bottled water seller in B.C., others, including Whistler Water and Mountain Spring Water, also draw groundwater from B.C.

When asked by The Province, those companies declined to release the volume of their withdrawals.


Nestlé is one of the largest employers in the District of Hope, providing about 75 jobs, said District of Hope chief administrative officer John Fortoloczky. Though Nestlé is not required to measure and report their water withdrawals to the government, the company voluntarily reports to the District of Hope, said a Nestlé Waters Canada executive, reached in Guelph, Ont. last week.

“What we do in Hope exceeds what is proposed by the province of British Columbia,” said John Challinor, Nestlé Waters Canada’s director of corporate affairs. Nestle keeps records of water quality and the company’s mapping of the underground water resources in the area exceeds what government scientists have done, Challinor said.

“We do these annual reports ... We’re doing it voluntarily with (the local government). If we are asked to provide it as a condition of a new permit, that’s easy to do, because we’re already doing it,” Challinor said.

But the fact that Nestlé’s reports are internal and voluntary is the very issue of concern, said Ben Parfitt, a resource policy analyst with the Canadian Centre for Policy Alternatives.

“There’s a big, big difference between voluntary reporting and mandatory,” said Parfitt. “If it’s voluntary, there’s nothing to stop a company or major water user from choosing not to report ... That is absolutely critical. You can’t run a system like this on a voluntary basis.”

Since groundwater remains unregulated in B.C., Nestle does not require a permit for the water they withdraw.

“No permit, no reporting, no tracking, no nothing,” said David Slade, co-owner of Drillwell Enterprises, a Vancouver Island well-drilling company. “So you could drill a well on your property, and drill it right next to your neighbour’s well, and you could pump that well at 100 gallons a minute, 24 hours a day, seven days a week and waste all the water, pour it on the ground if you wanted to … As far as depleting the resource, or abusing the resource, there is no regulation. So it is the Wild, Wild West.”


The Council of Canadians, a national citizen advocacy group, takes the position that water should be treated as a public trust, a valuable resource protected for the benefit of all Canadians.

But when the government allows a multi-billion dollar, international corporation to withdraw water for free to sell back to us, this doesn’t seem to serve the public good, said Emma Lui, national water campaigner for the Council of Canadians, reached in Ottawa. Compared with the rest of the country, Lui said, “When you look at all these different factors, B.C. actually is doing quite poorly: that they don’t include groundwater (in their water licensing system), they don’t have any sort of public registry of who’s taking groundwater, they don’t charge.”

Nestlé is far from the only large company withdrawing B.C.’s groundwater for free, and Challinor said Nestlé is “largely supportive of what the government is trying to do” with modernizing the Water Act. He said he plans to sit down with B.C.’s new environment minister Mary Polak in the fall, to discuss these issues. Nestle supports the government moving toward increased regulation, monitoring and reporting.

As far as the government charging for groundwater, Challinor said “We have no problem with paying for water, as long as the price is based on the actual cost of regulating the program.”

If you walk into Cooper’s Foods in downtown Hope — less than 5 km away from Nestlé’s bottling plant — and buy a 1.5 litre bottle of Nestlé Pure Life water, it will set you back $1.19.

That’s $1.19 more than Nestle paid to the government last year for withdrawing more than 265 million litres of fresh water from the well.

Nestlé’s other water bottling plant in Canada is in Wellington County, Ont., where the province requires them to buy a license and pay for the water they extract. Some critics, including Lui and Parfitt, feel that Ontario’s charge of $3.71 per million litres is still too paltry. But still, they say, it’s more fair than B.C. charging nothing.

(photo)Sheila Muxlow has concerns about Nestle withdrawing millions of litres of water without payment, outside Nestle's bottling plant near Hope on August 12, 2013. Photograph by: Wayne Leidenfrost , PNG

China knows that gold is rigged

By Martin W. Hennecke
It is an open secret among precious metals analysts and traders that the gold and silver markets are being heavily manipulated, mostly to the downside; i.e. their prices are being suppressed by various Western financial entities in what should be a scandal much bigger than the Libor rigging scheme.
Not only did a senior commissioner at the Commodity Futures Trading Commission (CFTC), Bart Chilton, reiterate recently his original statements from 26th October 2010 that "there have been fraudulent efforts to persuade and deviously control the price of silver" adding this time that " there have also been silver and gold market anomalies outside of the [current] silver investigation" , but we have also heard similar comments from former Assistant Secretary of the Treasury Paul Craig Roberts: "I suspect that the Federal Reserve is manipulating the gold and silver markets in order to prevent its low interest rate policy from undermining the value of the US dollar. It is easy to offset rising prices of bullion due to physical demand by selling shorts in the paper market.”
And then, of course, there is the famous, albeit much older, remark from the maestro Alan Greenspan himself, in his July 24, 1998 testimony to the Committee of Banking and Financial Services, U.S. House of Representatives that: "Central banks stand ready to lease gold in increasing quantities should the price rise".
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Escape From Wall Street

image source
Dave Hodges
Activist Post

This bankster-run system does not work for you and me. After reading this article, if you still have not taken your money out of their banks and you have not stopped shopping in globalist stores like Walmart and you are not planning to trade and barter with your neighbors as well as grow your own food, then you get the dismal future you deserve. If you stay in the bankster system and continue to participate in this rigged game stemming from Wall Street, you are sowing the seeds of your own destruction!

There Is a New Elephant In the Room

There are a series of new free trade agreements which threaten to obliterate the cities of the United States in the same manner we have witnessed in Detroit. Among the worst of these new free trade agreements is the one entitled “Increasing American Jobs Through Greater Exports to Africa Act of 2013 (H.R. 1777).”

The premise of this article is based upon the fact that Detroit was primarily destroyed by the anti-worker free trade agreements of NAFTA and CAFTA.

If the complete destruction of one American city was not enough, through NAFTA and CAFTA, we should all be concerned that Congress is preparing to pass H.R. 1777. H.R. 1777 is not just another free trade agreement, but this is far worse than NAFTA and CAFTA. This bill takes American taxpayer money to fund industrial infrastructure in many of the 54 African countries in order to make them “factory ready.”

America, you are soon going to be forced to fund your own economic demise. Not only will you likely lose your job, witness your city going broke, but you will go deeper into debt paying the taxes that Congress will require to fund the African Free Trade Agreement.

Before discussing the impact of H.R. 1777 on America as a whole, we can get a strong sense of what it is going to be like when this bill passes by quickly examining the impact of NAFTA and CAFTA on Detroit.

NAFTA, CAFTA and the Destruction of the Motor City

At the height of Detroit’s success as a city, it was a representation of American middle class dominance. It was the greatest manufacturing city ever seen on the planet. Detroit once made cars that were the envy of the world.

At its peak, Detroit was the America’s fourth-largest city, with more than 1.8 million people. Detroit’s population losses began in the 1960s with migration to the suburbs. Then in the 1990s Detroit fell victim to global politics in the names of NAFTA and CAFTA; and, literally, the roof caved in.

Today, 30% of Detroit’s 140 square miles are either vacant or deserted. Today, Detroit has less than 700,000 residents. There are more than 33,500 vacant houses and over 90,000 vacant lots in Detroit. The city government is razing entire city blocks of business buildings and residential homes. If you are the only one left on your block, you are forced to move, and if you are lucky you will receive $10,000 for your home.

Under NAFTA and CAFTA, virtually all tariffs were eliminated so that manufacturers could shut down U.S. plants and relocate to the Third World in order that they could pay their new, foreign workers slave labor wages. Then, adding insult to injury, when NAFTA and CAFTA eliminated tariffs, they made it possible for the multinational corporations to ship these foreign made products back into the U.S. and pay no import taxes at all. Thus, the great city of Detroit was destroyed.

The National Impact of the African Free Trade Agreement

Soon after H.R. 1777 passes, every major city is going to look like Detroit. As bad as NAFTA and CAFTA are, at least the government did not take trillions of American dollars to build infrastructure in foreign labor markets. Yet, this is exactly what the African Free Trade Agreement is going to do.

I have to hand it to Congress for their undisguised boldness as they are not even hiding this private theft of public money. Additionally, Congress has the nerve to title this bill in such a way that it appears that American jobs are going to be created by passage of the bill. Sadly, most of the sheep will believe them.

How can I be sure that H.R. 1777 will be passed?

A Wolf In Sheep’s Clothing

In addition to H.R. 1777, SB 718 “Increasing American Jobs Through Greater Exports to Africa Act of 2013,” is being run through the Senate. The language for both bills is identical.

Additionally, the text of H.R. 1777 turns up in SB 431, the Nepal Trade Preferences Act, and SB 432, the Asia-South Pacific Trade Preferences Act. The language for all four bills is virtually identical.

Why do the banksters need all four bills with the same language? Simple, if one bill does not pass, the other three bills still have a chance.

For those who do not think that Congress doesn’t cater to the whims of Wall Street, explain why these bills contain provisions for global health, global education, global transportation and global water?

Make no mistake about it, there is an excellent chance that at least one of these bills will pass.


This bill is being perpetrated by the international banksters on Wall Street. Why do we continue to fund this criminal government, who in turns funds Wall Street? The solution resides in defunding the government which hands our money and our jobs over to the thugs on Wall Street. It makes no sense to continue funding our demise.

There are several options. First, there are countries which would be happy to accept skilled Americans because of the boost to their economy. Can you imagine if 100 million Americans suddenly left the country? Certainly, the government would eventually move to impose an iron curtain type of restriction on leaving the country.

Secondly, we should withdraw from the Wall Street system as much as possible. I can see the day where people cash out of their 401K’s (the government is preparing to steal them anyway), withdraw money from your bank account and invest with other like-minded people in a farm collective. Trading and bartering would be the new underground economy. By owning farms, urban refugees would be food sufficient, could become water sufficient with the proper planning and we could largely be out of the reach of the feds. However, there is one caveat. In a brilliant move, the Obama administration and the Supreme Court mandated participation in the Obamacare system. In my opinion, this was establishment’s way to keep people in their system. Obviously, defying the dictates of Obamacare would have to become our first line of civil disobedience.

There is a third option. The American people could defy the tyrannical laws to the point where the country erupts into a civil war. I prefer the second option because it comes the closest to nonviolent revolution. However, my instincts and knowledge of history tells me we are in for a very serious civil war. The flash point for what is coming will be gun confiscation.

Of course, the fourth option is to acquiesce. Presently, that is what well over half the country is doing. It is sad to think that so many will go quietly into the night without putting up a fight.

At the end of the day, all Americans have a choice on whether we are going to stop funding our destruction.

Dave is an award winning psychology, statistics and research professor, a college basketball coach, a mental health counselor, a political activist and writer who has published dozens of editorials and articles in several publications such as Freedoms Phoenix, News With Views and The Arizona Republic.

The Common Sense Show features a wide variety of important topics that range from the loss of constitutional liberties, to the subsequent implementation of a police state under world governance, to exploring the limits of human potential. The primary purpose of The Common Sense Show is to provide Americans with the tools necessary to reclaim both our individual and national sovereignty.

Economist: Real US Debt $70 Trillion, NotThe $16 9 Trillion The Government Claims

Fed Admits – “Excessive” Inflation (aka “hyperinflation”) Coming

Fed’s Bullard: Inflation low for now, but could be excessive in the future

Stocks tumble…
Stocks slumped on Wednesday as the market continued to gauge when the Federal Reserve might start to reduce its $85 billion in monthly bond purchases. Apple was a standout as some big investors took stakes in the smartphone maker.

ObamaCare Rate Calculator – Premium for me (55) and wife (47) is $17,171 a year, 70% coverage, plus out-of-pocket $14,232 a year

There is no subsidy for a couple earning $65k+ a year combined. We included the $5,300 smokers surcharge in our calculation. This will DESTROY what’s left of the middle class, here the calculator…
The penalty/tax will be phased in from 2014 to 2016.
The minimum penalty/tax in 2016 will be $695 per person and up to 3-times that per family. After 2016, these
amounts will increase at the rate of inflation.
The minimum penalty/tax per person will start at $95 in 2014 (and then increase through 2016)
No family will ever pay more than 3X the per-person penalty, regardless of how many people are in the family.
The $695 per-person penalty is only for those who make between $9,500 and ~$37,000 per year. If you make less than ~$9.500, you’re exempt. If you make more than ~$37,000, your penalty is calculated by the following formula…

The penalty is 2.5% of any household income above the level at which you are required to file a tax return. That level is currently $9,500 per person and $19,000 per couple. The penalty on any income above that is 2.5%. So the penalty can get expensive quickly if you make a lot of money.
However, the penalty can never be more than the cost of a “Bronze” heath insurance plan purchased through one of the state “exchanges” that will be created as part of Obamacare. The CBO estimates that these policies will cost $4,500-$5,000 per person and $12,000-$12,500 per family in 2016, with the costs rising thereafter.
So, basically, you’re looking at penalties of approximately the following at the following income levels:
Less than $9,500 income = $0
$9,500 – $37,000 income = $695
$50,000 income = $1,000
$75,000 income = $1,600
$100,000 income = $2,250
$125,000 income = $2,900
$150,000 income = $3,500
$175,000 income = $4,100
$200,000 income = $4,700
Over $200,000 = The cost of a “bronze” health-insurance plan

Sacked and left stranded: phone book staff called to HQ, fired and told to hand over company cars

  • People drove across country to be made redundant as company had gone into administration
  • Parents were told to remove child equipment before handing over company cars as well as company mobile phones
  • They were left to return home on public transport to places such as Devon, Leeds, Manchester and North Wales

Hundreds of workers were left stranded and in tears yesterday after they were called to their company head office, unexpectedly made redundant and then told they could not use their company cars to get home.
Sales representatives for telephone directory Thomson Local received a mysterious email late on Tuesday afternoon ordering them to attend a meeting at head office at noon yesterday.
They drove from across the country to Farnborough, Hampshire, where they were ushered into two rooms – and half were told they had lost their jobs because the company had gone into administration.
Account representative Jocelyn Green, 57, from Chelmsford, Essex, pictured left, is worried about paying her mortgage,  while Emma Foulds, 23, from Bath, right, said there had been no warning of the job losses
About 200 workers were made redundant. Some had worked for the firm for 27 years.
Parents were told to remove child equipment before handing over company cars as well as company mobile phones, leaving them stranded and unable to contact friends and relatives.
They were left to return home on public transport to places such as Devon, Leeds, Manchester and North Wales.
Emma Foulds, 23, from Bath, said there had been no warning of the job losses. She said: ‘We knew that the company was up for sale, so people thought the meeting was because we had new owners who wanted to introduce themselves.
‘But as soon as we walked into the room there was no senior management and people we did not recognise, [the] administrators.’
Miss Foulds said: ‘People started crying, there are a lot of pregnant people who are not going to get maternity leave, pensions may have gone. It is disgusting how they have dealt with it.’
Employees drove from across the country to the office in Farnborough, Hampshire, pictured, and told they had lost their jobs
Employees drove from across the country to the office in Farnborough, Hampshire, pictured, where they were ushered into two rooms and half were told they had lost their jobs
Account representative Jocelyn Green, 56, feared not being able to pay her mortgage. Miss Green, from Chelmsford, Essex, sold advertising in the directories and online, earning £40,000 a year. She said: ‘I have worked for Thomson since July 1986 and have worked tirelessly for them.
‘I have been noticed as one of the top three reps in the country, never missing a sale or a target. When I got the email I thought it could be a buyout, but this is crazy.
‘To travel 86 miles to get here and be told: “Sorry, you don’t have a job” is a terrible way to be treated.
‘I was crying my eyes out in the meeting. People were shouting, accusing the company of having played us like a fiddle.
‘It’s diabolical. I am distraught and have lost everything. I gave the company the best years of my life.’
Single mother-of-three Rachel Cooper, 37, from Swindon, Wiltshire, said: ‘I’m terrified about how I will keep a roof over all our heads now. Thomson have screwed us all over. I was successful in my last job and Thomson approached me in November and April.’
Thomson Directories is the UK subsidiary of Italian telephone directory publisher Seat Pagine Gialle and has been making phone books in this country for 30 years.
Some 174 editions are produced annually and delivered to 22million homes and businesses.
Last night there was no one available for comment at Thomson Local, Seat Pagine Gialle or the administrators Grant Thornton.

£800million bill for hiring consultants to replace government staff made redundant with £300million in pay-offs

  • Whitehall accused of 'letting good people go’ before calling in consultants
  • Pay-offs in 2012-13 hit £290million as part of cost-cutting programme
  • But millions more was spent on external firms on temporary contracts

  • The government has spent £800million calling in consultants to do the work of staff made redundant with pay-offs worth almost £300million.
    The revelation sparked claims Whitehall departments have ‘let good people go’ before rehiring former civil servants on expensive, temporary contracts.
    The spending also flies in the face of a ban on the use of external consultants as part of the government’s austerity programme.
    Revolving door: The government has spent almost £300million laying off staff, and up to £800million bringing in consultants
    Revolving door: The government has spent almost £300million laying off staff, and up to £800million bringing in consultants
    The total pay-offs in 2012-13 to core staff at the 17 main central Government departments was £290 million, Cabinet Office figures show.
    The data reveals the Ministry of Justice recorded a high of £89 million in exit payments for staff in 2012-13, followed by the Department of Work and Pensions' £67 million.
    But at the same time Whitehall departments paid out £505 million on consultants and short-term staff, listed as ‘consultancy and contingent labour’.
    Analysis by The Times of the data placed the overall cost of consultants and temporary staff at nearer to £800 million for the 17 main departments.
    It includes private firms brought in to work on projects including HS2, Universal Credit and the West Coast Main Line railway, plus more than £328 million on ‘off-payroll’ staff.
    Grip: Tory MP Priti Patel said ministers had to do more to control spending
    Grip: Tory MP Priti Patel said ministers had to do more to control spending
    Tory MP Priti Patel told The Times: Witham, said: ‘Ministers need to get a grip on consultancy and temporary staff costs.
    ‘Paying for these services should be the exception rather than the rule and Whitehall must restructure itself to bring these costs down.’
    Bernard Jenkin, the Tory chairman of the Public Administration Select Committee, added: ‘We have let good people go as part of the downsizing - but how many of these consultants are ex-civil servants?’
    In August 2012 Francis Maude, Minister for the Cabinet Office, claimed the last government used consultants as a 'comfort blanket', adding: 'If there was anything difficult to be done, they would reach for consultants immediately, which is both very expensive, but also it actually undermines the position of mainstream civil servants.’
    The coalition, he added, was trying to reduce the dependence on consultants through trying to achieve a skills transfer from consultants used to civil servants, and knowing where existing skills were across Government.
    A Cabinet Office spokeswoman said: ‘We've already put an end to excessive consultancy spend by establishing stringent controls across Government saving, over £1.6 billion in 2011/12 compared to the level of spending in 2009/10.
    ‘Cabinet Office delivers projects across a wide range of high-profile policy areas.
    ‘It is sometimes necessary to recruit for specialist business-critical roles. Such roles are only authorised where the skills are not readily available within civil service and where using temporary labour is better value for taxpayers' money than hiring full-time staff.
    ‘Bringing in procurement, finance and digital expertise plays a crucial part in our determination to strengthen the corporate centre in Whitehall and ensuring that government operates like the best-run businesses.’

    How Congressmen Are Bought

    Obamacare Forced Home Inspections

    24 Countries That Actually Require People to Take Vacation

    Did you know some countries require you to take a vacation?

    Some countries actually require companies to give employees vacation leave. This infographic, created by the employee leave and FMLA (Family And Medical Leave Act) experts at Employment law HQ, highlights the vacation requirements of countries around the world. The results are a bit surprising and, depending on your views, concerning, especially if you live in the United States. It raises the question of whether some societies like the U.S. have become too work-obsessed, and taking vacation is unfortunately misconstrued in those societies as having “lack of commitment” to one’s job. All I know for sure is that I would love to be able to work in Austria!

    Bill Gross to BTV: Fed Keeps Funds Rate On Hold Until At Least 2016

    PIMCO’s Bill Gross joined Bloomberg Television’s Erik Schatzker and Sara Eisen on “Market Makers” today and said:  There is an 80 percent probability that the central bank will begin tapering its bond-buying program in September. He went on to say, that the Fed will rely on forward guidance rather than asset purchases more going forward.


    On seeing the market as “a war in which there will be many causalities”:
    “It is bloody if in fact the market has turned and interest rates have moved higher. They’ve done that for the past three months and bond prices have gone down. We know that bond mutual funds in the market itself is described in higher-quality terms and has slipped by about 2 percent. Investors are worried and I’m suggesting there’s a war on to retain assets and fight a future battle in which the return on bonds may be less than historic. We’ve come up with some strategies that aren’t necessarily durational or maturity related and can protect principle more than historic.”
    On whether September is the time for tapering:
    “I think it is changing and I think September is probably the time. We give it 80-percent and here’s the reason. We think the future fed policy will increasingly rely on what’s being called forward guidance as opposed to asset purchases or quantitative easing. To the Fed’s way of thinking, that is a tired horse which has inflated asset prices but has done little to stimulate growth. In addition, according to some Fed numbers, it puts the Fed balance sheet at future risk with potential higher interest rates. This implies to us our reliance on future guidance and forward guidance which is a reverse type of twist from back in September of 2011. This is a reverse twist in which the fed wants the market to buy securities with the comfort of forward guidance and withdrawing the purchasing of 85% of the gross issuance of 20 year and 30 year treasuries. If this diagnosis is correct, long treasuries and long maturities should be sold in one to five years and one to ten year maturities should be brought.

    On how certain he is about the direction of the bond market:

    “The way we look at it is a conceptual way, not subject to historical modeling. In a highly levered economy, and we have a highly levered economy not just in the U.S. but globally, when there is a lot of leverage in the economy, the central bank must tread lightly in terms of increasing interest rates. That’s why you see the emphasis on forward guidance and that’s why we see quantitative easing. The store raising interest rates to countermand higher inflationary threats basically a thing of the past. If the Fed stays where they are, at 25 basis points for a long time, perhaps 2016 and beyond, what does it mean in terms of strategy? It means that the five year and ten year don’t represent value relative to inflation but represent value relative to where they were three or four months ago at 150 to 160. It all depends on what the Fed does in a central bank does and leverage and the associated increase which would slow the economy significantly and we think the Fed understands that.”

    On whether inflation is something to be concerned about:
    “Ben Bernanke has emphasized this. He says they will defend inflation not from the top side but from the downside. The consumption deflator, so to speak, that is at 1.2% and they are targeting as high at 2.5%. This will argue for aggressively easy fed policy going forward, keeping funds low to elevate inflation much like the Japanese are trying to do in their economy.”

    On whether he has reversed the war to retain assets in the fixed income market:
    “It sure is working. Our returns relative to the market were not only positive in terms of their real returns. What the strategy is, is to emphasize durational, longer maturities less. The problem is you reduce yields. If you went to cash entirely, you would have a portfolio yielding 10 basis points and clients wouldn’t want that grade you want to reduce aeration but substitute other areas in the bond market which provide what we call ‘carry.’ That emphasizes yield but is less sensitive area we are talking about yield curve emphasis volatility and bonds and other currencies as opposed to dollar-related currencies. There are other ways to defeat this army other than emphasizing duration, and we intend to move into other areas to do it.”

    On whether it is time for PIMCO to get back into Europe:
    “Perhaps not. Not in the core countries like Germany. Yields are historically low, lower than even the United States. If Europe is improving, you would not look for ECB to begin tightening. They just gave us our guide’s in terms of easing for an indefinite time area their yields are significantly lower in terms of the core. In terms of the UK, they have adopted forward guidance which suggests, although indefinite in terms of a lag and unemployment, their policy is as easy as the policy in the United States. I would look at German Bonds.”

    Your mortgage documents are fake!

    Prepare to be outraged. Newly obtained filings from this Florida woman's lawsuit uncover horrifying scheme (Update)

    Your mortgage documents are fake!EnlargeLynn Szymoniak (Credit: CBS News/60 MInutes)
    If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)
    A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.
    This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.
    The 2011 lawsuit was filed in U.S. District Court in both North and South Carolina, by a white-collar fraud specialist named Lynn Szymoniak, on behalf of the federal government, 17 states and three cities. Twenty-eight banks, mortgage servicers and document processing companies are named in the lawsuit, including mega-banks like JPMorgan Chase, Wells Fargo, Citi and Bank of America.
    Szymoniak, who fell into foreclosure herself in 2009, researched her own mortgage documents and found massive fraud (for example, one document claimed that Deutsche Bank, listed as the owner of her mortgage, acquired ownership in October 2008, four months after they first filed for foreclosure). She eventually examined tens of thousands of documents, enough to piece together the entire scheme.
    A mortgage has two parts: the promissory note (the IOU from the borrower to the lender) and the mortgage, which creates the lien on the home in case of default. During the housing bubble, banks bought loans from originators, and then (in a process known as securitization) enacted a series of transactions that would eventually pool thousands of mortgages into bonds, sold all over the world to public pension funds, state and municipal governments and other investors. A trustee would pool the loans and sell the securities to investors, and the investors would get an annual percentage yield on their money.

    In order for the securitization to work, banks purchasing the mortgages had to physically convey the promissory note and the mortgage into the trust. The note had to be endorsed (the way an individual would endorse a check), and handed over to a document custodian for the trust, with a “mortgage assignment” confirming the transfer of ownership. And this had to be done before a 90-day cutoff date, with no grace period beyond that.
    Georgetown Law professor Adam Levitin spelled this out in testimony before Congress in 2010: “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever.”
    The lawsuit alleges that these notes, as well as the mortgage assignments, were “never delivered to the mortgage-backed securities trusts,” and that the trustees lied to the SEC and investors about this. As a result, the trusts could not establish ownership of the loan when they went to foreclose, forcing the production of a stream of false documents, signed by “robo-signers,” employees using a bevy of corporate titles for companies that never employed them, to sign documents about which they had little or no knowledge.
    Many documents were forged (the suit provides evidence of the signature of one robo-signer, Linda Green, written eight different ways), some were signed by “officers” of companies that went bankrupt years earlier, and dozens of assignments listed as the owner of the loan “Bogus Assignee for Intervening Assignments,” clearly a template that was never changed. One defendant in the case, Lender Processing Services, created masses of false documents on behalf of the banks, often using fake corporate officer titles and forged signatures. This was all done to establish standing to foreclose in courts, which the banks otherwise could not.
    Szymoniak stated in her lawsuit that, “Defendants used fraudulent mortgage assignments to conceal that over 1400 MBS trusts, each with mortgages valued at over $1 billion, are missing critical documents,” meaning that at least $1.4 trillion in mortgage-backed securities are, in fact, non-mortgage-backed securities. Because of the strict laws governing of these kinds of securitizations, there’s no way to make the assignments after the fact. Activists have a name for this: “securitization FAIL.”
    One smoking gun piece of evidence in the lawsuit concerns a mortgage assignment dated Feb. 9, 2009, after the foreclosure of the mortgage in question was completed. According to the suit, “A typewritten note on the right hand side of the document states:  ‘This Assignment of Mortgage was inadvertently not recorded prior to the Final Judgment of Foreclosure… but is now being recorded to clear title.’”
    This admission confirms that the mortgage assignment was not made before the closing date of the trust, invalidating ownership. The suit further argued that “the act of fabricating the assignments is evidence that the MBS Trust did not own the notes and/or the mortgage liens for some assets claimed to be in the pool.”
    The federal government, states and cities joined the lawsuit under 25 counts of the federal False Claims Act and state-based versions of the law. All of them bought mortgage-backed securities from banks that never conveyed the mortgages or notes to the trusts. The plaintiffs argued that, considering that trustees and servicers had to spend lots of money forging and fabricating documents to establish ownership, they were materially harmed by the subsequent impaired value of the securities. Also, these investors (which includes the Treasury Department and the Federal Reserve) paid for the transfer of mortgages to the trusts, yet they were never actually transferred.
    Finally, the lawsuit argues that the federal government was harmed by “payments made on mortgage guarantees to Defendants lacking valid notes and assignments of mortgages who were not entitled to demand or receive said payments.”
    Despite Szymoniak seeking a trial by jury, the government intervened in the case, and settled part of it at the beginning of 2012, extracting $95 million from the five biggest banks in the suit (Wells Fargo, Bank of America, JPMorgan Chase, Citi and GMAC/Ally Bank). Szymoniak herself was awarded $18 million. But the underlying evidence was never revealed until the case was unsealed last Thursday.
    Now that it’s unsealed, Szymoniak, as the named plaintiff, can go forward and prove the case. Along with her legal team (which includes the law firm of Grant & Eisenhoffer, which has recovered more money under the False Claims Act than any firm in the country), Szymoniak can pursue discovery and go to trial against the rest of the named defendants, including HSBC, the Bank of New York Mellon, Deutsche Bank and US Bank.
    The expenses of the case, previously borne by the government, now are borne by Szymoniak and her team, but the percentages of recovery funds are also higher. “I’m really glad I was part of collecting this money for the government, and I’m looking forward to going through discovery and collecting the rest of it,” Szymoniak told Salon.
    It’s good that the case remains active, because the $95 million settlement was a pittance compared to the enormity of the crime. By the end of 2009, private mortgage-backed securities trusts held one-third of all residential mortgages in the U.S. That means that tens of millions of home mortgages worth trillions of dollars have no legitimate underlying owner that can establish the right to foreclose. This hasn’t stopped banks from foreclosing anyway with false documents, and they are often successful, a testament to the breakdown of law in the judicial system. But to this day, the resulting chaos in disentangling ownership harms homeowners trying to sell these properties, as well as those trying to purchase them. And it renders some properties impossible to sell.
    To this day, banks foreclose on borrowers using fraudulent mortgage assignments, a legacy of failing to prosecute this conduct and instead letting banks pay a fine to settle it. This disappoints Szymoniak, who told Salon the owner of these loans is now essentially “whoever lies the most convincingly and whoever gets the benefit of doubt from the judge.” Szymoniak used her share of the settlement to start the Housing Justice Foundation, a non-profit that attempts to raise awareness of the continuing corruption of the nation’s courts and land title system.
    Most of official Washington, including President Obama, wants to wind down mortgage giants Fannie Mae and Freddie Mac, and return to a system where private lenders create securitization trusts, packaging pools of loans and selling them to investors. Government would provide a limited guarantee to investors against catastrophic losses, but the private banks would make the securities, to generate more capital for home loans and expand homeownership.
    That’s despite the evidence we now have that, the last time banks tried this, they ignored the law, failed to convey the mortgages and notes to the trusts, and ripped off investors trying to cover their tracks, to say nothing of how they violated the due process rights of homeowners and stole their homes with fake documents.
    The very same banks that created this criminal enterprise and legal quagmire would be in control again. Why should we view this in any way as a sound public policy, instead of a ticking time bomb that could once again throw the private property system, a bulwark of capitalism and indeed civilization itself, into utter disarray? As Lynn Szymoniak puts it, “The President’s calling for private equity to return. Why would we return to this?”
    Update: This story previously suggested that banks settled this lawsuit with the federal government for $1 billion. That number is actually the total for a number of whistle-blower lawsuits that were folded into a larger National Mortgage Settlement. This specific lawsuit settled for $95 million. The post above has been changed to reflect this fact.

    Issa: IRS Scandal Broke Trust of American People

    While the committee investigating the IRS targeting of conservative groups hasn't found any criminal violations, House Oversight Committee Chairman Darrell Issa says what it has found is even more troubling.

    "Right now, what we see is something worse," Issa told Fox News on Wednesday. "We see the intent and the recognition of people that the IRS should not be a political body. And if it is, it could be the end of our democracy."

    Editor's Note : Video Exposes Dangers of Obamacare Law

    Appearing on "Hannity," Issa, R-Calif., said the targeting was ideological and "it clearly affected only conservative groups."

    The Internal Revenue Service is being investigated for subjecting conservative groups seeking tax-exempt status to additional scrutiny. Though some liberal groups faced the same scrutiny, they were far fewer in number and were either told they were approved or denied. The conservative groups were held in limbo, which affected their ability to participate in the 2012 presidential election.

    Issa on Tuesday called for IRS official Lois Lerner to turn over emails sent to her personal account. Lerner has pleaded her Fifth Amendment right not to testify before Issa's committee on grounds she could incriminate herself

    "I believe that the trust of the American people was broken," Issa told Fox News.

    © 2013 Newsmax. All rights reserved.

    Dow Off 230 Points; All 30 Components In The Red, 10Y 2,81%!!! China, Japan Sell Most US Paper In Years; Foreign Treasury Holdings At 2013 Lows

    Stocks Futures Drop After Higher Yields And Disappointing Earnings From WMT, and CSCO

    NEW YORK (MarketWatch) — U.S. stocks fell hard Thursday and borrowing costs spiked after a deluge of economic data and disappointing results from Wal-Mart StoresInc. WMT -2.80% and Cisco Systems IncCSCO -7.25% . “The continued reduction in the pace of firings to the slowest since the fall of 2007 should point the Fed further into the camp of taper sooner rather than later and it’s likely why the 10-year yield touched 2.80%,” said Peter Boockvar, chief market analyst at the Lindsey Group.
    Stock market crumble continues: Dow off 230

    China, Japan Sell Most US Paper In Years; Foreign Treasury Holdings At 2013 Lows
    And the bid hits just keep on coming.
    While previously we reported the foreigners as an aggregate class sold the most gross US securities ever in the month of June, we also learned that in June the biggest selling came from America’s two largest creditors: China and Japan (excluding the Fed of course, whose P&L losses are now approaching $300 billion in the past 3 months, or would if the Fed marked to anything but unicorns).

    In June, the two countries combined sold $42 billion, with each selling over $20 billion: the most in years.
    Industrial Production Misses For 4th Month In A Row
    10yr yield just touched 2.82% AND RISING AGAIN…

    Philly Fed Drops Most In 9 Months
    From last month’s cycle-leading 19.8 print, Philly Fed printed a disappointing (but rather preduictably cyclical drop to 9.3). The same pattern we have seen in economic data (post QEs) has happened once again for the fourth year in a row as the headline print dropped the most since November 2012. Missing expectations after such a cognitively reassuring pront last month is hard for some take we are sure but under the surface things are even worse as the average workweek sub-index turned negative, new orders dumped, and both current and futures expectations for number of employees collapsed.