Thursday, January 31, 2008

Bush Lies...3941 Soldiers Lose Their Lives.

If Congress fails to impeach Bush and Cheney, then the Constitution is really just another piece of paper.

read more | digg story

Bush Seeks Surplus via Medicare Cuts to Elderly, Poor & Underprivileged

In his new budget, President Bush will call for large cuts in the growth of Medicare and he will again seek major savings in Medicaid. The budget would not touch payments to insurance companies for private Medicare Advantage plans, even though many Democrats and independent experts say those plans are overpaid.

read more | digg story

FOX News is becoming irrelevant to the national debate...

... And now the evidence is really starting to come in. I say, "Good riddance!"The ways in which they dismissed Congressman Paul was a very real disservice to the public debate... and a slap in the face of the American people.I hope their shareholders - and their advertisers - suffer like hell.

read more | digg story

National Taxpayers Union "Only Ron Paul would cut spending"

Of the Republican candidates left in the primary, Ron Paul is the only one who proposes net tax cuts.

read more | digg story

Florida precinct reports 109% turnout

Now that's participation.Rock the vote.

read more | digg story

Scientists Harsh Criticism as Bush Stifles Science

In email interviews this week with 21 researchers in various fields of study, LiveScience and found widespread criticism for Bush's "retardation of research," as one scientist put it, that threatens to knock the country out of its global leadership role in science and technology.

read more | digg story

GATA to Federal Reserve... "Where's the Gold in Ft. Knox?"

"The gold reserves of the United States have not been independently audited for half a century," GATA charges in a new advertisement set to appear in the Wall Street Journal.

read more | digg story

Homegrown Terrorism Act: The Latest on this Scary Bill

All the latest news as well as highlights of oppositional outcry from Sacramento to Atlanta. There should be enough here to convince even the most skeptical on your list that S1959 is a waste of resources. It won't make us safer. As one writer points out, it sets up conditions that would have enabled Martin Luther King, Jr to be labeled a terrorist

read more | digg story

The Great Credit Unwind of 2008

An Inverted Pyramid of Subprime Slop


Global market turmoil continued into a second week as stock markets in Asia and Europe took another tumble on Monday on growing fears of a recession in the United States. China's benchmark index plummeted 7.2 per cent to its lowest point in six months, while Japan's Nikkei index slipped another 4.3 per cent. Equities markets across Asia recorded similar results and, by midmorning in Europe, all three major indexes---the UK FTSE "Footsie", France's CAC 40, and the German DAX---were all recording heavy losses. It's now clear that Fed Chairman Bernanke's 'surprise' announcement of a 75 basis points cut to the Fed Funds rate last Tuesday has neither stabilized the markets nor restored confidence among jittery investors.

In Monday's Financial Times, Harvard economics professor, Lawrence Summers, made an impassioned plea for further government action in addition to the Fed's rate cuts and Bush's $150 billion "stimulus plan". Summers believes that steps must be taken immediately to mitigate the damage from the sharp downturn in housing and persistent troubles in the credit markets. He suggests a "global coordination of policy", which is another way of admitting that the Fed has lost control of the system and cannot solve the problem by itself.

Summers is right, although it's easy to wonder why he remained silent while the markets were soaring and the investment banks were reaping trillions of dollars in profits on a "structured investment" swindle which has left the global financial system teetering on the brink of catastrophe. Now that the US economy is sliding towards recession; Summers is calling for "transparency". How convenient.

"Financial institutions are holding all sorts of credit instruments that are impaired but are difficult to value, creating uncertainty and freezing new lending. Without more visibility, the economy and financial system risk freezing up as Japan's did in the 1990s."

Right again. The banks are "capital impaired" because they are holding nearly $600 billion in mortgage-backed assets which are declining in value every month. This is forcing many banks to conceal their real condition from investors while they scour the planet for the extra capital they need to continue operations. As long as the banks are in distress, consumer and business lending will dwindle and the economy will continue to shrink. The main gear in the credit-generating mechanism is now broken. The rate cuts can provide liquidity, but they cannot bring insolvent banks back from the dead. Summers is expecting too much.

The US' current account deficit (nearly $800 billion) has been recycling into US Treasuries and securities from foreign investors. Up to this point, American markets were an attractive place to put one's savings. The dollar was strong, and the stock market had a proven record of profitability and transparency. But since President Bill Clinton repealed Glass-Steagall in 1999, the markets have been reconfigured according to an entirely new model, "structured finance".

Glass-Steagall was the last of the Depression-era bulwarks against the merging of commercial and investment banks. As a result banking has changed from a culture of "protection" (of deposits) to "risk taking", which is the securities business. Through "financial innovation" the investment banks created myriad structured debt instruments which they sold through their Enron-like "off balance" sheets operations (SIVs and Conduits) Now, trillions of dollars of these subprime and mortgage-backed bonds---many of which were rated triple A---are held by foreign banks, retirement funds, insurance companies, and hedge funds. They are steadily losing value with every rating's downgrade.

Summers, of course, understands the enormity of the swindle that has taken place beneath the noses of US regulators, but chooses not to point fingers. Instead, he draws our attention to a little known part of the market which will probably lead the way to a stock market crash and a system-wide meltdown.

Here's Summers:

"It is critical that sufficient capital is infused into the bond insurance industry as soon as possible. Their failure or loss of a AAA rating is a potential source of systemic risk. Probably it will be necessary to turn in part to those companies that have a stake in guarantees remaining credible because they have large holdings of guaranteed paper. It appears unlikely that repair will take place without some encouragement and involvement by financial authorities. Though there are many differences and the current problem is more complex, the Long-Term Capital Management work-out is an example of successful public sector involvement."

Some of the largest bond insurers are are currently unable to cover the losses that are piling up from the meltdown in mortgage-backed securities (MBS) and collateralized debt obligations (CDO). Their business model is hopelessly broken and they will require an immediate $143 billion bailout to maintain operations. The largest of the bond insurers is MBIA. Here's stock analyst Michael Lewitt, quoted in Bloomberg:

"MBIA's total exposure to bonds backed by mortgages and CDOs was disclosed to be $30.6 billion, including $8.14 billion of holdings of CDO-squareds (eds note; pure garbage). MBIA was being priced as a weak CCC-rated credit when it issued its bonds last week; it is now being priced for a bankruptcy. MBIA's stock, which traded just under $68 per share last October, dropped another $3.50 this morning to under $10.00 per share."

Barclay's estimates that the investment banks alone are holding as much as $615 billion of structured securities guaranteed by bond insurers. If the insurers default, hundreds of billions will be lost via downgrades.

So, in practical terms, what does it mean if the bond insurers go under?
It means that the system will freeze and the stock market will crash. Listen to TV stock guru Jim Cramer summed it up last week in an interview with MSNBC's Chris Matthews:

"But, Chris, there is something I would urge all the candidates to think about and our Treasury Secretary, which is that there are a group of insurance companies which insure all these bad mortgages and, Cris, I think they are all about to go belly-up, and that will cause the Dow Jones to decline 2,000 points. They've got to be shut down and the insurance given to a New Resolution Trust. This is going to happen in maybe two or three weeks, Chris, it going to on the front of every newspaper and no one in Washington is even willing to admit it."

Chris Matthews: "So who are you including in these mortgage companies that are going to go belly-up; give me a description?"

"These are MBIA and Ambac. Remember the companies that Merrill Lynch and Citigroup wrote down a lot of stuff the other day? All these companies are relying on insurance to save them. The insurers don't have the money. There's also personal mortgage insurance; that's PMI, is one company; MGIC is another. Chris, I am telling you that these companies do not have the capital to "make good". And when they do fall, and I believe it is when---if the government does not have a plan in action; you will not be able to open the stock market when they collapse." No one is even talking about the fact that these major insurers, who insure $450 billion of mortgages are all about to go under."

Cramer is correct in assuming that the market won't open. And yet, so far, nothing has been done to avert the disaster just ahead. Maybe nothing can be done?

So, how did things get so bad, so fast? How could the world's most resilient, reliable and profitable markets be transformed into a carnival show peddling poisonous "mortgage-backed" snake-oil to every gullible investor?
Author and stock market soothsayer Pam Martens puts it like this

"How could a layered concoction of questionable debt pools, many of dubious origin, achieve the equivalent AAA rating as U.S. Treasury securities, backed by the full faith and credit of the U.S. government, and time-tested over a century of panics, crashes and the Great Depression?

How did a 200-year old "efficient" market model that priced its securities based on regular price discovery through transparent trading morph into an opaque manufacturing and warehousing complex of products that didn't trade or rarely traded, necessitating pricing based on statistical models?"

The answer to all these questions is "deregulation". The financial system has been handed over to scam-artists and fraudsters who've created a multi-trillion dollar inverted pyramid of shaky, hyper-inflated, subprime slop that they've sold around the world with the tacit support of the ratings agencies and the US political establishment."

Late Sell-Off Sinks Stocks

Indexes shot higher after the Fed cut rates one-half percent, only to tumble on fresh worries about bond insurers

Even by the rarefied standards of January 2008 (aka the "January from Hell") Wednesday's stock market was truly weird.

After sustaining modest losses for much of the session as traders paced the floor waiting for the outcome of the Federal Reserve policy meeting, major indexes shot higher in the wake of the central bank's 2:15 pm EDT announcement of a 50 basis point cut in the Fed funds rate target to 3.0%, just eight days after a surprise 75-basis point easing. The Dow Jones industrial average logged triple-digit gains. The market got what it wanted, and the champagne was flowing.

But any good cheer in the markets these days is fleeting, as a number of terrifying beasts lurk in wait for Wall Street. Indexes gave back their gains in the final hour of trading to finish with losses amid fears that U.S. bond insurers Ambac (ABK) and MBIA (MBI) will be downgraded by ratings agencies, after CNBC reported such moves could come as early as Wednesday. And Fitch cut the AAA rating on FGIC's bond insurance arm to AA, saying it does not have the capital needed for a top rating.

The markets are worried that if bond insurers, the primary backstop for credit quality in debt markets, lose their triple-A designations, it could create problems in the broader financial sector.

On Wednesday, the Dow Jones industrial average finished with a loss of 37.47 points, or 0.3%, to 12,442.83. The broader S&P 500 index shed 6.49 points, or 0.48% to 1,355.81. The tech-heavy Nasdaq composite index fell 9.06 points, or 0.38%, to 2,349.00.

The last-hour sell-off was emblematic of the market's volatile January.

The Fed's move Wednesday came just eight days after it cut rates 75 basis points in an effort to boost a flagging U.S. economy and stabilize jittery financial markets.

In its post-meeting statement, policymakers said that "[financial markets remain under considerable stress, and credit has tightened further for some businesses and households. Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets."

As for inflation, the FOMC expected it to "moderate" in coming quarters, "but it will be necessary to continue to monitor inflation developments carefully."

"Today’s policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity. However, downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks."

The Fed's language indicates it is leaving the door open for further rate cuts ahead, according to Action Economics.

There was one FOMC member voting against the easing: Dallas Fed president Richard W. Fisher, who preferred no change in the Federal funds rate target.

"The economy is in or near a recession, so only time will tell if this move is sufficient to avert further economic deterioration," said Kurt Karl, chief U.S. economist for Swiss Re. "Since Fed monetary easing takes about a year to have its full impact on the economy, this will help cushion the growth slowdown but only by late this year and early next year."

"Unless the economic data show enough strength to shift market expectations on rates, we see the Fed cutting the funds rate to 2% at the March 18th FOMC meeting," wrote Bear Stearns economists in a note Wednesday. "The problem with this strategy is that it is likely to boost inflation pressures over the next year," they wrote.

On Wednesday, a report on gross domestic product showed the U.S. economy barely grew in the fourth quarter of 2007. U.S. GDP grew 0.6% last quarter, half the percentage economists were expecting. The advance reading is a big slowdown from the third quarter, when GDP jumped 4.9%.

Half of gold in central banks gone?

Watchdog: 'We want to expose and stop the manipulation'

By Jerome R. Corsi

© 2008

U.S. central banks may have less than half the gold they claim to possess in their vaults, charges a watchdog group in an ad scheduled for publication in the Wall Street Journal this week.

As WND reported, the Gold Anti-Trust Action Committee, or GATA, claims the Federal Reserve and the U.S. Treasury are surreptitiously manipulating the country's gold reserves by participating in undisclosed leases, according to an advance copy WND obtained of the ad running in Thursday's edition of the Journal.

GATA believes much of the borrowed gold out on lease will never be returned to the central banks.

"With the demand for gold so strong worldwide, it has become impossible to return much of the leased gold without driving the price to the moon," said GATA's chairman, William J. Murphy III.

"Most observers calculate central bank reserves are supposed to have about 30,000 tons of gold worldwide in their vaults, but we believe the amount of gold actually there may be more like 15,000 tons," Murphy said. "The rest of the gold is gone."

The U.S. Treasury denies the claim, insisting the stock is accounted for regularly.

"We want to expose and stop the manipulation of the gold market by the United States Treasury and Federal Reserve right now," Murphy said.

"The purpose of this ad is to wake people up in the investment world as to what is going on behind the scenes in the U.S. gold and financial markets," Murphy told WND.

He explained GATA has decided to pay the Wall Street Journal $264,000 for a one-time placement of the full page ad in the national edition because the financial press has not covered the story.

"We have had two major international conferences since 2001; the mainstream financial press has blackballed our message," Murphy explained.

"Anybody Seen Our Gold?" the ad is titled, charging U.S. gold reserves held at depositories such as Fort Knox or West Point may have been seriously depleted as they are shipped overseas to settle complex transactions utilized by the Federal Reserve and the U.S. Treasury to suppress prices.

GATA further charges the U.S. government strategy to manipulate the price of gold has begun to fail.

"The objective of this manipulation is to conceal the mismanagement of the U.S. dollar so that it might retain its function as the world’s reserve currency," the ad copy reads.

"Gold's recent rise toward $900 per ounce shows that the price suppression scheme is faltering," GATA says. "When it is widely understood how central banks have been suppressing gold, its price may rise to $3,000 or $5,000 an ounce or more."

As evidence of gold price manipulation by the U.S. Treasury and the Federal Reserve, GATA cites Treasury's weekly report of the government's international reserve position that since May has listed gold loans and swaps as a line item in accounting for U.S. gold reserves.

The ad also cites a July 24, 1998, statement by then-Federal Reserve Chairman Alan Greenspan, who told Congress "central banks stand ready to lease gold in increasing quantities should the price rise."

The most recent U.S. Treasury statement of the U.S. international reserve position, released Jan. 24, lists the total U.S. foreign currency reserves as $71.515 billion, of which $11.041 billion is listed as gold (including gold deposits and, if appropriate, gold swapped).

The Bank of International Settlements reports the gold derivatives market hit a peak of $640 billion dollars in December 2006.

Murphy emphasizes that tracing the derivatives back to central bank gold transactions and determining precisely the degree to which the Federal Reserve and the U.S. Treasury are involved is not possible now, given the lack of public accountability and transparency built into the gold derivatives financial system worldwide.

Murphy said his grouip filed a Freedom of Information Act request with the U.S. Treasury and the Federal Reserve "to find out what this line item is all about."

"What is the true status of the U.S. gold that is supposed to belong to the American people?" he asked. "Has U.S. gold been put into play without the Treasury or Fed letting the American people know?"

A statement on Treasury's website claims the agency's Exchange Stabilization Fund has not been used to manipulate gold prices. But no statement could be found on the Treasury website that categorically denies the agency engages in gold swaps, leases or futures contracts for reasons other than to manipulate the price of gold.

The London Bullion Market Association lists on its website more than 80 members working as "bullion bank market makers" engaged in the worldwide gold commodities market place as principals originating and participating in various gold derivative products, including gold leases and swaps.

The U.S. members of the London Bullion Market Association listed include Bear Stearns Forex Inc., Goldman Sachs International, JP Morgan Chase Bank, Bank of America, Citibank, Merrill Lynch and Morgan Stanley.

A legal memorandum filed Feb. 28, 2003, on behalf of Barrick Gold Corporation, a major gold company affiliated with bullion bank J. P. Morgan, admitted Barrick engages with central banks in gold leases and other gold derivative transactions, without specifically admitting whether any such transactions were conducted on behalf of the Federal Reserve and Treasury.

In September 1999, European central banks meeting in Washington signed what has become known as the "Washington Accord," an agreement in which the banks agreed to limit the amount of their gold sales to 400 tons per year and not to expand their leasing operations during the five years of the agreement.

Under a gold lease, a central bank loans gold to a bullion bank at a nominal rate of interest, typically 1 percent.

The bullion banks then takes the gold lease to a commodities market such as the London Bullion Market, where the physical gold is sold, thereby adding to the supply of gold available on the market.

Problems develop when the price of gold rises dramatically, such as it has in recently months, with gold currently running over $900 an ounce.

Now, when the leased gold needs to be returned to the central banks at the end of the lease period, the bullion banks may have to go into the market and buy gold at a much higher price than the price when the gold initially was leased.

To hedge against the risk, bullion banks typically buy futures contracts or gold call options to secure gold delivery at a specified future date for a specified future price.

In the world of gold derivatives, a wide variety of contracts exist, including transactions in which central banks swap gold reserves, so they can carry out leasing or other gold derivative transactions using the gold of the other central bank rather than their own.

Gold swaps make central bank gold transactions even less transparent and more difficult to track.

Under current International Monetary Fund rules, central banks do not have to disclose on their financial statements how much of the gold in their stated reserves is encumbered by derivative contracts, including gold leases and swaps.

Nor are bullion banks required to disclose to the public the contracts under which they lease gold from central banks.

Gold yesterday hit a new all-time high, with futures contracts for February delivery surging to $929.80 an ounce on the New York Mercantile Exchange in mid-day trading.

A wild ride

Jan 24th 2008
From The Economist print edition

There will be odd rallies, but fear will continue to stalk the financial markets

JAMES CARVILLE, Bill Clinton's political adviser, once said he wanted to be reincarnated as the bond market so that he could “intimidate everybody”. This week the stockmarkets showed they could make pretty good use of the knuckle-duster, too.

It did not even take a fall on Wall Street to spook the Federal Reserve into slashing interest rates by three-quarters of a point on January 22nd; the American markets were closed for a public holiday the day before. The Fed reacted instead to a slump in global markets and the prospect, indicated by the futures market, that the Dow Jones Industrial Average would drop by more than 500 points at the opening. Small wonder that traders are now talking about the “Bernanke put”─the idea that, like his predecessor, Alan Greenspan, the Fed chairman will ride to the rescue whenever markets falter.

On January 23rd the markets chalked up another success when, after driving down the share prices of the two largest bond insurers to the point where they threatened to buckle, the prospect of a rescue surfaced. It came just in the nick of time. Half way through January 23rd, many global stockmarkets, including America's NASDAQ, were at least 20% below their peaks, a decline that put them in bear-market territory (see chart). World stockmarkets, as measured by the MSCI, were almost there. Despite its recovery on January 23rd the S&P 500 was still down 14.5% from its peak in October.

The markets have pulled out of such swallow dives before, notably in 1998 when rate cuts revived sentiment in the wake of the Asian crisis and the collapse of Long-Term Capital Management, an American hedge fund. Whether the latest recovery marks a turning point, or merely a pit stop on the way to a bear market, depends on whether the Fed has moved sharply and deeply enough to save America from recession. It also depends on how the rest of the world reacts to America's woes (see article, article, article).

There are plenty of reasons for pessimism. The credit market, which has been a better gauge of the credit crisis than shares, is still sickly. As of January 23rd, the cost of insuring against default by European speculative bonds had risen by almost one-and-a-half percentage points over the previous month (see chart).

The credit crunch continues to sap the strength of the financial system, which may curb banks' ability to lend. By flooding the money markets with liquidity near the end of last year, central banks helped unjam the troubled interbank market. But a year after subprime-mortgage woes started to emerge, house prices are still falling and investment banks are owning up to ever larger write-offs on mortgage-related investments.

If the problems are still largely focused on the subprime-mortgage market, they are not safely quarantined in the United States. Before the year started, investors had taken comfort from the concept of decoupling—that the rest of the world, and particularly Asia, could keep growing regardless (see article). Generally, much of the world, particularly emerging Asia, is less exposed to America than it was. However, the slide in the Baltic dry index of shipping rates could be an indicator of falling global trade volumes (it may also reflect extra shipping capacity). And commodity prices (including oil) have slipped on fears the global economy is slowing.

Emerging markets, which had yielded much better returns than the developed world did in 2007, have also been dragged down since the start of the year. And riskier currencies have lost ground to the relative security of the Japanese yen and the Swiss franc.

Never satisfied, futures markets are betting that the Fed will cut rates again when policymakers meet at the end of the month. Would another half a percentage point be enough to stop the rot? One salutary thought, according to Teun Draaisma of Morgan Stanley, is that on the 15 occasions since 1970 when the Fed has cut rates by 75 basis points or more, the average gain for European stockmarkets over the following six months has been 10.3%. Fredrik Nerbrand of HSBC Private Bank thinks markets are due for a rebound because the selling has become so indiscriminate.

But even if rate cuts bolster confidence, they may not come soon enough to stop corporate profits tumbling. According to Tim Bond of Barclays Capital, the recent falls in American and European share prices imply a 20% or so drop in profits from their cyclical peak. That is close to the average decline in previous profits downturns. However, this cycle has been more extreme than normal; profits recently reached a 40-year high as a share of American GDP. They thus have further to fall if they are going to return to the mean.

The dismal dollar

Also, the Fed's actions do not just have an effect on share markets. Alan Ruskin of the Royal Bank of Scotland says that rapid rate cuts mean the dollar risks becoming a funding currency for the “carry trade”, rather as the ill-starred Japanese yen has been. (The trade involves borrowing in a currency with low interest rates and investing the proceeds in a currency with higher rates.) Mr Ruskin says that the gap between 12-month dollar and Swiss-franc rates is already as low as it was in the last cycle, when the Fed cut rates to 1%. “By the end of this cycle, dollar short-term rates will be lower than all 40 liquid currencies except the Japanese yen and Hong Kong and Taiwanese dollars.”

If the dollar becomes part of the carry trade, it will tumble even further. And a falling currency makes it harder to persuade foreigners to finance America's trade deficit. David Bowers of Absolute Strategy Research reckons the subprime crisis has “destabilised the symbiotic relationship between Asian and Middle Eastern savers and American consumers.”

Those foreign investors may also get spooked at the direction of Fed policy. They have seen the bank cut rates in response to last August's credit turmoil and now a January stockmarket plunge. They may start to feel that the Fed has turned from a watchdog against inflation into a labrador puppy. Thanks to the global slowdown, there is no short-term inflationary threat. But the longer-term risks have probably gone up. And, as James Carville discovered in the 1990s, the bond-market vigilantes can be powerful enemies if they feel neglected.

More Dollar problems

SHELL OIL set to declare biggest-ever profit by a British company...

Which is worse: Regulation or De-Regulation?

By Paul Craig Roberts

Libertarians preach the morality of the market, and socialists preach the morality of the state. Those convinced of the market’s morality want de-regulation; those convinced of the state’s morality want regulation. In truth, neither seems to work. Continue

America’s Middle Classes Are No Longer Coping

By Robert Reich

The fact is, middle-class families have exhausted the coping mechanisms they have used for more than three decades to get by on median wages that are barely higher than they were in 1970, adjusted for inflation. Male wages today are in fact lower than they were then. Continue

Doubtful U.S. will pass trade deals: lawmaker: The Panama agreement is in trouble because last year that country's National Assembly elected as its president a lawmaker wanted in the United States on charges of killing a U.S. soldier in 1992, he added.

U.S. slump spreading around the globe, IMF warns: Financial turbulence is carrying the U.S. slump to the rest of the world, and now the global economy is in the midst of a serious slowdown, the International Monetary Fund said yesterday

US recession will dwarf dotcom crash: The views of Stephen Roach, one of the world's leading economists, now heading the Asian wing of Morgan Stanley, would have seemed outrageous at last year's World Economic Forum.

US House passes stimulus package : The United States House of Representatives has approved an economic stimulus package worth $150bn in a bid to prop up the nation's faltering economy.

America's meltdown: Once again, the health and happiness of the average American is being sacrificed so that those in power can continue to make poor choices.

Wednesday, January 30, 2008

Fed Cuts Interest Rates by 1/2 Point

WASHINGTON -- The Federal Reserve on Wednesday cut a key interest rate for the second time in just over a week, reducing the federal funds rate by a half point. It signaled that further rate cuts were possible.THE TRUTH IS...No stimulus plan by itself can save this nation from the looming recession and beyond. Recessions are part of an economic

read more | digg story

State of the Union by the Numbers

A look at what President Bush said in his final State of the Union Address delivered Monday night. Each word is scaled in proportion to the number of times it was used. Roll over a word for its frequency.

read more | digg story

Vote Fraud? New Hampshire, Louisiana, What’s NEXT

Perhaps I have always been a little naive. I guess I believed in the system, and I expected that everyone else believed in the system too. I recognized that there were people in power in government that didn't have the best interest of the country at heart, but I just assumed that most people did want what is best for our nation.

read more | digg story

Harris Calls For Resignations In New Hampshire Recount Fiasc

Veteran election watcher Beverly Harris has found irregularities in the N.H. recount that rise to the level of criminal intent.

read more | digg story

More Dollar problems

10-city home price drop a record...

Nevada Top Foreclosure Rate...

FBI in subprime crackdown...

The Great Credit Unwind of '08

By Mike Whitney

The financial system has been handed over to scam-artists and fraudsters who've created a multi-trillion dollar inverted pyramid of shaky, hyper-inflated, subprime slop that they've sold around the world with the tacit support of the ratings agencies and the US political establishment. (wink, wink) Now that system is about to collapse and there's nothing that the Federal Reserve can do to stop the Great Credit Unwind of '08.Continue

Record plunge for new-home sales: The Commerce Department reported yesterday that sales of new homes dropped 26.4 percent last year to 774,000. That marked the worst sales year on record, surpassing the old mark of a 23.1 percent plunge in 1980.

Countrywide loses $422M amid mortgage meltdown : Countrywide lost $422 million, or 79 cents a share, during the fourth quarter, compared with earnings of $622 million, or $1.01 a share, during the same period the previous year.

US home foreclosures surge : Home repossessions spiked across the United States during 2007 leaving over one percent of all households in some stage of foreclosure, an industry report showed Tuesday.

Tuesday, January 29, 2008

Howard Highlights Ease Of Recount Fraud

Following on from Bev Harris shocking expose in which she unveiled disturbing chain of custody issues in New Hampshire, Republican presidential candidate Albert Howard has identified another problem that leaves the recount wide open to fraud.

read more | digg story

Bush's State of The Union: Give Me Spy Powers Now

Wired gets it right.

read more | digg story

President Bush doing away with Freedom of Information Act !!

Leahy And Cornyn: White House Trying To ‘Eliminate’ FOIA Office

read more | digg story

US Dollar index falling

The First Bank Failure of 2008

A tiny bank in Kansas City, Mo., has become the first bank in the country to fail this year—but it's unlikely to be the last. Cunningham expects other small banks—especially those with weak profits and deteriorating capital bases—to follow suit in the coming months, as the slowing economy limits borrowers' ability to repay loans.

read more | digg story

Bush orders NSA to snoop on US agencies

Not content with spying on other countries, the NSA (National Security Agency) will now turn on the US's own government agencies thanks to a fresh directive from president George Bush. Under the new guidelines, the NSA and other intelligence agencies can bore into the internet networks of all their peers.

read more | digg story

"Tyson Foods Will Raise Prices Substantially"

"We have no other choice but to raise prices substantially," CEO Richard Bond said in a conference call. "We are raising prices because we can't absorb these costs. Despite concerns about the economy, people have to eat, and they will continue to eat protein." Tyson Foods Inc. reported Monday its quarterly profit fell 40% from a year ago

read more | digg story

Inflation Rate Now 34%!


Money and Markets - Back in 2002, I forecast that gold would hit new highs by the end of 2007. Nearly everyone thought I was crazy!

Then, in 2004, many called me "absolutely insane" when I issued my forecast that oil would hit $100 a barrel within three years.

Now, in the first days of 2008, gold has already reached as high as $893 an ounce — above its all-time record high of $877 set on the Comex in New York on January 18, 1980. Plus, last week, oil crossed the $100-a-barrel threshold, hitting my 2004 forecast, albeit three days late.

Unlike when I made my original forecasts, today it seems just about everyone is jumping on the gold and oil bandwagon, predicting even higher prices to come.

Usually, that's a sign that a top is near. Latecomers and copycats almost always buy toward the end of a major uptrend.

But not this time ... I think gold and oil prices are headed much higher. Today, I'm going to explain why by answering the most frequently asked questions I've been getting on what's happening in the markets ...

Q: What's the significance of the new record highs in gold and oil?

Gold smashes through its old all-time high!

A: Three important points ...

First, they show that inflation, as I predicted, is coming back with a vengeance!

We've already seen the first signs in November's inflation data, which indicated the biggest increase in wholesale prices in 34 years.

And that was before the latest round of money pumping by the central bank. All told, more than $750 billion has been thrown into the global economy in the last five months.

As this "funny money" works its way through the global economy, inflation is sure to rise substantially.

Also note that latest data shows the broad supply of money in the U.S. — formerly known as the M-3 Money Supply — is growing at an annual rate of more than 34%. That's super inflationary!

Second, the new highs in gold and oil also reveal the giant cracks that are beginning to appear in the world's financial system.

By cracks, I mean financial insecurity ... geopolitical worries ... and outright FEAR.

On the surface, everyone is blaming the subprime mortgage crisis. And to be sure, the subprime crisis is a big factor. But the subprime disaster is symptomatic of a much bigger, deeper problem — the near bankruptcy of the entire United States.

Lest you forget, the U.S. is $55 TRILLION in debt ...

Arrow $9 trillion of Federal government debt.

Arrow $3.9 trillion owed to foreign interests.

Arrow More than $42 trillion owed by municipal governments, trust funds, households, businesses and financial companies.

All told, our debts have now reached 460% of national income — an all-time high — with no end in sight.

There is absolutely no way those debts can ever be repaid without continuing to systematically devalue the U.S. dollar.

But that's not the only crack driving gold and oil higher. There are also cracks and fissures in geopolitics, including uncertainties surrounding the U.S. elections.

These worries drive investors into tangible assets ... which adds to inflationary pressures ... and drives natural resource prices even higher.

Third, investors are beginning to lose confidence in governments and central banks.

When investors are confident in government and central bank policies, inflation tends to be low or declining ... municipal and government bonds do well ... and tangible assets like gold and oil tend to be mostly ignored.

But when investors lose confidence in their governing officials and central bankers, as they are now, they opt instead to buy more tangible assets ... more inflation hedges ... and more contra-dollar investments.

Q: How high can gold and oil go?

Oil's got a lot more upside ahead of it!

A: Gold will ultimately reach at least $2,200 an ounce. Oil will reach $150 a barrel this year; $200 within three years.

Sound crazy? Again, that's what they thought years ago when I predicted new highs in gold and $100 oil. But there's absolutely no doubt in my mind that we will see those prices, sooner rather than later.

Remember, gold at $890 an ounce is undervalued when adjusted for inflation. In fact, $890 in today's dollars is the equivalent of just $332 in 1980 dollars (when gold hit its previous record high of $877).

Oil, at $100 a barrel in today's dollars, is the equivalent of just $37.35 in 1980 dollars. And back then we had nowhere near the shortages and tight demand/supply fundamentals that we have now in the oil market.

Q: But what about the obviously slowing U.S. economy? Won't it negatively affect natural resource prices, especially oil?

A: To be sure, the slowing U.S. economy is bound to cause some sharp pullbacks in natural resource prices this year, including gold and oil.

But growth and demand in other regions — particularly Asia — will more than offset any weakness in the U.S. Any pullbacks should be treated as buying opportunities within major bull trends.

Q: Won't Asia slow if the U.S. economy turns south?

A: Hardly!

Let's take a look at China first. It has ...

Check Virtually no external debt.

Check No major exposure to the U.S. subprime collapse.

Check $1.4 trillion in reserves, which are growing by more than $1 billion per day!

Check Some of the strongest banks and financial institutions in the world as a result of its reserves.

Check 1.3 billion people who are just beginning to emerge as a consumer class.

Moreover, Beijing has committed to spending more than $700 billion on rural infrastructure projects to bring China's 800 million farmers and peasants into the 21st century. That alone is enough to keep China's growth cooking for many more years.

Now, let's take a look at India. It has ...

Check No major external debt.

Check No major exposure to the U.S. subprime crisis.

Check An estimated annual economic growth rate of 9% for 2008.

Check 1.1 billion emerging consumers, including a middle-class of 320 million.

India is now home to the largest number of billionaires in Asia ... and the number of millionaires in India is growing at a 20.5% annual rate, the second fastest in the world behind Singapore.

Many of these same trends can be seen in other Asian countries like Indonesia ... Malaysia ... Vietnam and Thailand.

And while there are bound to be some wild swings in these markets in 2008, their growth curves remain intact and will continue sharply higher regardless of a downturn in the U.S.
Any pullbacks should be bought!

Q: You said the Dow would decline to 11,800. Is this what we're seeing now? And how low do you think the Dow could ultimately fall?

The Dow could fall to 11,000!

A. Yes, the bear move down in the Dow has begun! And I now believe the Dow will fall to about 11,000.

For now, I continue to recommend staying out of all stocks except select natural resource plays.

But there is something I must mention — while I am bearish on most U.S. stocks right now, longer-term I think the Dow is poised to move substantially higher ...

Reason: For the last several years, the Dow has not only failed to keep up with inflation, it's actually lost almost 70% of its value in real terms. I expect the Dow to join the inflation cycle that is now beginning, and quite possibly move substantially higher to regain its purchasing power via the much weaker dollar.

That's a ways off though. First, this bear move will strengthen.

Q: Do you think the dollar has bottomed yet?

A: No, not in the least!

I estimate the dollar will fall as much as another 40% over the next two to three years before its bear market comes anywhere close to an end.

That's not to say there won't be rallies in the greenback. In fact, a good bounce is way overdue. But long-term, the dollar has virtually nowhere to go but down. It's the only hope the U.S. has to get out of the financial mess it's in.

Q: Do you have any suggestions for the start of 2008?

A: Take advantage of the upside potential in natural resources and Asia!

Two of my favorite ways to do this ...

#1. The PowerShares DB Commodity Index Tracking Fund (DBC). The fund, which is incorporated in the United States, invests in commodities such as crude oil, heating oil, aluminum, gold, corn and wheat.

#2. The First Trust ISE Chindia Index Fund (FNI). The fund seeks out the best returns from companies in China and India in the following industries: oil and gas, software, telecommunications, banks, Internet and mining.

Lastly, I think everyone should own some gold! The single best way, in my opinion: The StreetTRACKS Gold Trust (GLD).

Inventory of words used in the State of the Union since 2001

Paperwork could keep immigrants from voting

Well looks like permanent citizens have to pay taxes, but can't get to vote in time. Awesome taxation without representation.

read more | digg story

Corpocrac y is on the way!!!

Shell Hits All-Time Record Profits Of $27B
NAFTA - North American Slave Trade Agreement
Beginning Of The Eclipse Of US-Style Capitalism
$1,4B Bad Loans In Just ONE Town
Fed Must Save The Banks To Save The Economy
Dollar's Reserve Currency Role Ending

Bush orders NSA to snoop on US agencies

Cyber attack fear used to expand spy grid

Published Sunday 27th January 2008 21:25 GMT

Not content with spying on other countries, the NSA (National Security Agency) will now turn on the US's own government agencies thanks to a fresh directive from president George Bush.

Under the new guidelines, the NSA and other intelligence agencies can bore into the internet networks of all their peers. The Bush administration pulled off this spy expansion by pointing to an increase in the number of cyber attacks directed against the US, possibly from foreign nations. The Office of the Director of National Intelligence (ODNI) will spearhead the effort around identifying the source of these attacks, while the Department of Homeland Security and Pentagon will concentrate on retaliation.

The Washington Post appears to have broken the news about the new Bush-led joint directive, which remains classified. The paper reported that the directive - National Security Presidential Directive 54/Homeland Security Presidential Directive 23 - was signed on Jan. 8. Earlier reports from the Baltimore Sun documented the NSA's plans to add US spying to its international snooping duties.

The new program will - of course - drains billions of dollars out of US coffers and be part of Bush's 2009 budget.

During Bush's presidency, US citizens have come under an unprecedented spying regime. In addition to upping its focus on suspected criminals, the administration permitted a system for wiretapping the phone calls of Average Joes and Janes. The government is also funding specialized computers from companies such as Cray that can search through enormous databases at incredible speed. Ah, if only Stalin could see us now.

The government points to cyber attacks against the State, Commerce, Defense and Homeland Security departments as the impetus for expanding the NSA's powers. "U.S. officials and cyber-security experts have said Chinese Web sites were involved in several of the biggest attacks back to 2005, including some at the country's nuclear-energy labs and large defense contractors," the Post reported.

Critics of the new directive will point to the NSA's ability to operate in total secrecy as cause for concern.

More troubling, however, may be the Pentagon and Homeland Security's aspirations to hit attackers with counter-strikes.

Proving that a nation rather than a rogue set of attackers are behind a cyber attack will likely be very difficult. In addition, the international community has yet to address the rules of cyber war in any meaningful way. ®

Gold going to a new place altogether

Kitco analyst makes derisive comments, and builds a wall of worry, added to the propaganda of the fed, spins on dying markets, feckless fork-tounged economists, writing off billions and billions of bad debts, yet more reasons to buy gold and silver, depression threats, helicopter Ben and Keynsian fantasies, debtor nation status for the USA

Recently, when gold broke 900, so-called "analyst" Jon Nadler of Kitco made his usual derisive comment about the precious metals, this time pronouncing that gold was in "rarefied air" at such levels. Well, we gather from this comment that when gold crosses the 1000 mark in the upcoming weeks, Mr. Nadler will probably pronounce that gold has left its location in that "rarefied air" and state that it has just entered into a vacuum. If he does, it will be the first time he has ever made a correct call. Gold is going to enter a vacuum all right-in outer space-which is where gold is now headed!

Mr. Nadler is actually in the construction business. What does he build? He helps the elitists build their so-called "wall of worry" for the precious metals markets by putting a negative spin on these markets whenever he can. The financial commentators are fond of saying that every bull market has to climb a "wall of worry", but this is really just a euphemism for what is really a wall of fraud, deceit, fear propaganda and lots of disinformation. "Wall" Street is appropriately named, because the Illuminati which run it lock, stock and barrel head construct such "walls of worry" to keep the public out of a market sector that is about to become very profitable by scaring them with lies and disinformation. While any such "wall of worry" is in place, the elitist scum scarf up as much of the assets in that sector as they can get their hands on, often secretly as with gold and silver, while such assets are still extremely cheap. They keep building their position until they have completely sated themselves. Then, suddenly, the "wall of worry" is knocked down and the public is encouraged to buy into that sector. After the price of the assets has soared to record levels from the sudden and very massive increase in demand that results whenever the public joins the party, the insider-trading slime on "Wall" Street bail out at the top of the market when the public stampede has peaked. These ne'er-do-wells reap mega-profits while everyone else is left holding the bag after the blow-off top is reached and the sharp decline in value begins. This final rip-off of the public is aided by the deceitful and unmitigated tripe and poppycock propaganda spewed forth by the sociopaths at the diabolical (and privately owned) Fed and by their government moles in the PPT, the Treasury and the SEC, as well as in the Congress and the Executive and Judicial branches. The elitists put a positive spin on a dying market until they have bailed out, and then the real truth is allowed to come out and take the markets down as they laugh all the way to the banks, which they of course own. Their bought and paid for judges then block any and all litigation aimed at exposing this fraudulent propaganda and seeking damages resulting from this flow of misinformation. This is how the insider elitist leaches suck the public dry over and over again, ad nauseam, day after day, week after week, month after month, year after year, decade after decade, century after century, from the beginning of time.

National Public Radio, a mainstream media outlet which like most other mainstream media is owned or controlled by the Illuminati and run by a group of elitist bootlickers, has miraculously started to cover gold, but have put the elitists' spin on the coverage as you would expect from these reprobates. Before gold crossed 850, this bastion of bleeding liberal jackasses started quoting gold prices only when it was going down in value, and would not mention it in their financial commentary whenever the price of gold was rising. This is a perfect example of how the press helps shape the so-called "wall of worry". They tell outright lies or they lie by omission. You should withdraw all support from this group of stations until they start to give fair coverage for both bulls and bears in the gold market. As another example, a week ago Friday, they had yet another economics professor telling everyone that the average person should not buy gold which he stated has nearly peaked out, and that you would do much better by buying the S&P 500 over the next several years. This is the sort of moronic garbage being spewed out to the general public, which you, as our subscribers, know to ignore. They do not want the public to buy gold because the elitists have not yet bailed out of the stock market and they want to use the proceeds to buy gold on the cheap. So they trot out some feckless idiot or forked-tongued economist to keep you in the stock market and out of gold while the elitists themselves attempt to do precisely the opposite. This "gem" from National Public Radio would over the next several years probably cause you to lose at least half of your principal in the general stock markets and lose out on an opportunity to very likely triple your principal in the precious metals markets and in their related resource stocks. Follow their advice, and your $10,000 will probably become $5,000, if you are lucky. Follow our advice, and your $10,000 could become $30,000 or more!

Just to give you an example of how imbecilic this NPR broadcast was, we thought we would show you their vapid stupidity in spades by simply citing some facts. The Dow, the S&P 500 and the Nasdaq have, in the first four weeks of 2008, lost all of their gains from 2007 and then some. They are all well into red ink when compared to their 12/29/06 levels. By contrast, since 12/29/06, spot gold has gained 43.16%, spot silver has gained 26.14%, the XAU has gained 30.43% and the HUI has gained 36.44%. Now here are your fundamentals: the credit markets are frozen, the real estate markets are virtually dead with record levels of inventory, much of it vacant, continuing to deteriorate, ARM and pick-a-pay mortgage payments on hundreds of billions in mortgages are about to adjust to unaffordable levels for millions of borrowers, defaults on all types of debt are starting to skyrocket including prime customers, consumer spending and confidence are both decreasing rapidly as hyper-stagflation begins its reign of terror, state budgets are running massive deficits and some are near bankruptcy, inflation is over 11% (officially 4.1%), M3 is about 16% (officially unpublished), unemployment is 15% (officially 5%) and growing as free trade, globalization, off-shoring and out-sourcing continue to decimate our better-paying job sectors, banks are writing off or writing down tens of billions soon to become hundreds of billions in subprime losses and bad mortgages and loans, a looming multi-tens-of-trillions mountain of potential derivative losses continues to threaten markets with a nightmarish thermonuclear meltdown, oriental stock markets are currently crashing while carry trades are unwinding, the United States government is talking about an economic stimulus of 145 billion which is a drop in the bucket meant to delay the day of reckoning past the November elections and is highly inflationary, the Fed is about to cut interest rates again even beyond the recent .75% rate cut as European banks reluctantly consider doing the same with their M3 levels on a par with the US that will send the developed economies of the West into a whirlwind of killer-hyperinflation while developing countries continue to have high rates of inflation, the dollar is at its lowest levels in multi-decades with no end in sight as to how far it could tank, our national debt and trade deficits are out of control while a huge decrease in tax revenues is about to hit at exactly the wrong time due to mega-write-offs of losses that will be suffered in stocks, bonds, derivatives and business income by taxpayers who pay the largest portion of income taxes, oil is at record levels over $90/barrel with peak oil pushing it ever higher, food prices have roared to record highs as the ethanol fraud diverts food into an energy inefficient bio-fuel source, war rages in Afghanistan and Iraq as we waste hundreds of billions on these wars for profit while thousands of our own people are needlessly slaughtered not to mention millions of Iraqis, nuclear threats and issues continue with Iran and North Korea, there is constant discord throughout the Middle East and parts of Africa, Serbia and Kosovo are about to have an armed conflict that could propel us into World War III, Russia is ticked off over our proposed missile systems near its borders and our extremely aggressive, bellicose behavior while it develops and distributes mobile, multiple-warhead ICBMs and carrier-killing missiles and China is competing with us for resources while developing a weapon that can knock out our satellites in outer space. We ask our subscribers, would anyone in their right mind invest in any of the general stock sectors with this kind of data and fundamentals? Does not this scenario sound like a poster advertisement for buying gold and silver? Could the fundamentals for precious metals possibly be more bullish than they are now? Buy gold and silver, or prepare to get reamed!!!

Speaking of getting reamed, the odds of us moving into a Much Greater Depression keep getting higher with each passing day as we experience shock and awe at the greed, stupidity, incompetence and fraud that are finally starting to take a terrible toll on our economy and on the economies of Western civilization and the Orient. We refer to this upcoming calamity of epic proportions as the Much Greater Depression because that is exactly what we expect if our economy continues on its current trajectory, a much greater depression than the one that was initiated in 1929. This expectation is due to several reasons and circumstances that did not hold true during the Great Depression of the 1930's and which now threaten to lead us into a final conflagration much worse than the first. First, we have a massive derivatives overhang with the potential for tens of trillions in losses that did not exist in 1929 due to "financial engineering" that has created weapons of mass financial destruction. Second, we have no manufacturing sector left to lift us out of a recession or a depression. Our manufacturing jobs and facilities have been victimized by an elitist agenda of free trade, globalization, off-shoring and outsourcing accompanied by rampant illegal immigration that was condoned, promoted and sanctioned by our government to break our unions and provide a source of cheap slave labor. Third, we will have severe hyperinflation before our economy implodes. In 1929, the evil Fed tightened up the money supply much earlier than will be the case in the present day.

Helicopter Ben thinks that this was a mistake based on his Keynesian fantasies and that it "caused" the Great Depression. Had the Fed done then what it plans to do now, the Great Depression would have been much worse because any delay of the day of reckoning only makes the final cataclysm all the more devastating.

This time inflation will climb to levels never even dreamed of in 1929, and high levels of interest will either be voluntarily implemented by the Fed or will be involuntarily imposed by the markets through risk reassessment in order to counteract the destructive impact of such hyper-stagflation as business failures and loan defaults skyrocket. This hyper-stagflation will either completely wipe out the value of the dollar, bringing it to near zero value, and render all dollar-denominated assets such as US treasuries, stocks and bonds worthless, or double digit interest rates will have to be implemented to get inflation under control. And if we get into double digit interest rates, our economy will be completely and utterly destroyed. Company profits would get wiped out, the real estate market would suffer a myocardial infarction and keel over dead, and a thermonuclear meltdown of interest rate swaps would be ignited that would in turn cause problems with credit default swaps as principals and counter-parties alike would get wiped out. Such losses could run into the tens of trillions of dollars. Fourth, we have been taken off the gold standard, so all sense of fiscal responsibility has been lost while worthless fiat paper is passed off as real money. This is why we are going to experience far greater problems this time around as our paper money is rendered worthless by almost a century of fiat money excesses and complete fiscal irresponsibility. This was done intentionally by the privately owned Fed so they could inflate us out of our wealth by charging interest on money created out of nothing by use of the fractional reserve banking system, which is simply a glorified Ponzi-scheme. Fifth, unlike in 1929, we are now the world's greatest debtor nation. In 1929 and for some time thereafter we were on the way to becoming the world's greatest creditor nation of all time. Our current record national debt and record trade deficits are sucking us dry based on interest payments on our debts alone, much less the principal that is due. This interest is being paid on money created out of nothing, and unlike in 1929, the insidious inflation of fractional banking has had many decades to wreak its havoc on our economy. Much higher tax rates due to out-of-control social welfare and entitlements has drained us of our spending power and our liquidity in a way that we had not even dreamed of in 1929. Our nation has gone bankrupt while our citizens have a negative rate of savings. In the Great Depression, our rate of savings went negative after the financial crash occurred, whereas we have been into negative savings for some time now prior to the upcoming crash. This governmental and individual fiscal irresponsibility will severely restrain our ability to restart our economy. We have nothing left to work with to spur new growth and investment having all but lost our manufacturing sector.

We are totally tapped out and we are all but helpless. Sixth, worldwide economic integration and communication has interconnected economies on a scale never imagined in 1929. When the US economy goes down this time, we will not just take a few of our major trading partners down with us. Virtually everyone is a trading partner with the US today. When the US super tanker economy goes down this time, it is going to take a much larger proportion of the world economy down with it than occurred in 1929, with far more dire consequences due to a burgeoning world population that will suffer greatly as resources are strained due to a dramatic loss of production that will dwarf what occurred in 1929. The transportation logistics alone will be a nightmare as oil continues to skyrocket. Seventh, and finally, the US has a stagnant or shrinking population today. In 1929, we had a very quickly growing population due to both births and immigration, so we had a natural form of growth occurring where our work force was expanding along with our demand. We had the many taking care of the few. Now as the Baby Boomers leave the work force we are going to have a smaller population of workers relative to non-workers which has a stagnating effect on growth as the few are forced to support the many, meaning that more money will be bled out of workers to take care of burgeoning entitlements, and this will put a huge drag on our work force and economy by draining our productivity and vastly reducing the amount of money that is available for future savings, growth and investment and for improvements to our infrastructure. Large curtailments of entitlements due to lack of funds are almost inevitable, and this will reduce the spending power of our populace. We fear that another war is inevitable as the elitist panacea for economic stagnation has always been armed conflict. And with today's technology a world war has much greater destructive power than at any time in the past.

When taken together, the above seven differences from 1929 will place us all in an unenviable position when the Sword of Damocles finally comes chopping down, and frankly, we have no idea how the US economy is ever going to work its way out of this one. We are going to get hammered and we may well become the next Japan - or worse. If you want to survive the upcoming Much Greater Depression, get out of debt and buy gold, silver and their related shares like your life depended on it, because your life will depend on it! Gold and silver are now in the middle of a picture-perfect consolidation before moving much higher as the Fed continues to cut and the dollar tanks. This is the perfect time to take a position before the next leg up! Gold will take a brief respite as the February futures contracts are rolled over mainly to April as well as to later expiration dates. After the rollover is completed, gold will continue to rise to new heights. Open interest for February has dropped this week from the close of a week ago Friday of 247,306 to 187,921 as of this Thursday's close, but we are still hoping that some may hold out for physical delivery to test the gold resources of the cartel which we believe are very nearly tapped out.

Already this Friday spot gold has set an all-time intra-day high of 923.65 and an all-time closing high of 910.50, while gold futures for February did likewise with parallel figures of 924.30 and 910.70, respectively. Silver also set new 27-year highs on Friday with an intra-day high of 16.61 and a closing high of 16.41. We could see more records set early next week due to short-covering as positions for February are closed out and as options expire. There may not be much of a lull at all if the Fed cuts again in their January 29-30 meeting, a high likelihood based on stock market performance since the cut was made, an incredibly dismal performance that is now being blamed on a rogue trader at Societe Generale in France who lost them billions in a complete embarrassment to the banking system in general as well as to the victim bank. This shows you just how rampant the corruption is in our banking system. This rogue trader is just the tip of the fraud iceberg that will sink the world economy. But this is not the reason for the worldwide meltdown. It is all about tanking earnings, rising inflation, a plummeting dollar, and a sinking US super tanker economy with consumers that are broke and unable to generate any further growth in demand. We might also add that Wednesday's 600 point miracle turnaround was another flagrant PPT manipulation to save the markets from a total catastrophe because the earlier collapse would have been a total non-confirmation of the Fed's move to cut rates by .75% and of the 145 billion stimulus package proposed by our government. Prior to this miracle, which has happened before when markets have reacted negatively to a major move by the Fed, the Dow was off about 300 after European markets were flushed down the toilet and given a "swirly" following the Fed's move to cut big which was a total embarrassment to the Fed. No one has any more confidence in the Fed or in our government, especially pros, because they are finally seeing them for what they really are - lying sacks of deceitful hot air! The dumbest dolt could see that we are spiraling down to plumb the depths of fiat money hell. When the lawsuits start against money managers for gut-wrenching losses suffered by their clients because they did not diversify into precious metals despite rampaging inflation, these dolts will try to claim that official rates of inflation were tame and did not warrant such diversification. As soon as they make this claim in court, judges and juries alike will laugh them to scorn for their vapid stupidity and their stark ignorance. They were supposed to be professionals and dig behind bogus government statistics to get to the truth on behalf of their clients, and juries will find that they totally ignored the obvious facts when even non-professionals could easily see what was really going on.

Half of gold in central banks gone?

Watchdog: 'We want to expose and stop the manipulation'

Posted: January 29, 2008
1:00 a.m. Eastern

By Jerome R. Corsi
© 2008

U.S. central banks may have less than half the gold they claim to possess in their vaults, charges a watchdog group in an ad scheduled for publication in the Wall Street Journal this week.

As WND reported, the Gold Anti-Trust Action Committee, or GATA, claims the Federal Reserve and the U.S. Treasury are surreptitiously manipulating the country's gold reserves by participating in undisclosed leases, according to an advance copy WND obtained of the ad running in Thursday's edition of the Journal.

GATA believes much of the borrowed gold out on lease will never be returned to the central banks.

"With the demand for gold so strong worldwide, it has become impossible to return much of the leased gold without driving the price to the moon," said GATA's chairman, William J. Murphy III.

"Most observers calculate central bank reserves are supposed to have about 30,000 tons of gold worldwide in their vaults, but we believe the amount of gold actually there may be more like 15,000 tons," Murphy said. "The rest of the gold is gone."

The U.S. Treasury denies the claim, insisting the stock is accounted for regularly.