Jay's Daily News

Wall Street Is A High-On-Crack Driver That Just Smashed Into Your House


http://www.businessinsider.com/wall-...r-house-2010-2

Here's a fantastic way to save on the cost of education.

Just don't educate! I suppose the next step will be to just scrap the police force. Then crime will drop drastically and it will save the state Billions in enforcement.

Utah Proposes Scrapping 12th Grade

http://globaleconomicanalysis.blogsp...2th-grade.html

Bomb explodes outside JP Morgan Athens, none hurt

Renee Maltezou and Harry Papachristou
ATHENS
Tue Feb 16, 2010 4:57pm EST

Police cordon off a street after a bomb went off in the Kolonaki district in central Athens February 16, 2010.


ATHENS (Reuters) - A bomb exploded on Tuesday outside the Athens offices of JP Morgan, the second largest U.S. bank by assets, causing minor damage and no injuries, police and the company said.


The explosion is the latest in a series of blasts that have rocked the country since the police killing of a teenager in December 2008 sparked the country's worst riots in decades.

"It was a time-bomb outside JP Morgan's offices at the second floor of an Athens building," said a police official who declined to be named.

"The explosion damaged the door, furniture, computers and smashed some windows," the official added.

Police had cordoned off the area after a local newspaper received a warning call. Ambulances and fire engines blocked streets in the upmarket central district of Kolonaki, where JP Morgan's Greek offices are situated, a Reuters witness said.

JP Morgan confirmed the incident and said there were no injuries.

"No one was hurt," said a JP Morgan spokesman in New York. "The company is still gathering details about the situation."

In 2007, the New-York based firm came under scrutiny by Greek investigators' after underwriting 280 million euros ($382.2 million) of structured government bonds which ended up with state pension funds at inflated prices.

JP Morgan, which denied any wrongdoing, agreed to buy back the bonds and reverse the deal.

Banks, foreign companies and police are a frequent target of leftist groups in Greece. No group has yet claimed responsibility for the attack, the official said.

Urban guerrillas exploded a makeshift bomb outside Greece's parliament in January, causing no injuries and minor damage.

In other attacks since the teenager shooting, guerrilla groups killed a Greek antiterrorism officer and bombed the Athens Stock Exchange.

Move Over China: Beijing Sells Whopping $34.2 Billion Treasuries In December As Japan Becomes Largest Official Holder Of US Debt

http://www.zerohedge.com/article/mov...ecomes-largest

Greece is Ready to Explode

February 16, 2010
Alex Zachus in Athens

(for Henrymakow.com)


Greece is a boiling pot ready to explode. Things are going to turn ugly and soon as society here is fed up with illegal immigration and the deconstruction of our founding values. And I dont mean the "orange" riots of December 2008. I mean real riots... Here is how we got to this crisis:

After the military dictarorship ended in 1974, the Greek political scene has been dominated by two families (Papandreou and Caramanlis). The Papandreou clan has been the oldest political clan in Greece starting its involvement with public life at around 1923 in the royal court of Greece

This clan was established by George Papandreou senior. He rose to political monolithism after the extermination of the WW2 leadership of Greece under Ioannis Metaxas and Alexander Koryzis. After the mysterious deaths of these leaders, he was handpicked by the allies to represent the sovereign Greek government in Cairo.

He was married to Sophia Mineiko a Polish-Jew whose father built fortification walls for Turks during the liberation of Northern Greece in the 1910s. Information about the family is scarce, even on the internet. To cut a long story short, after WW2 George Papandreou senior reigned in the public life from 1945 until 1967.

His son Andreas Papandreou reigned from 1981 until his death in 1996. A dual American Greek citizen, Trotskyist at the age of early 20s, to the point he left Greece under Metaxas in 1938, to then persue a career as a lecturer and proffesor in the Harvard University(!!)

He married Margaret Chant in 1951 (she gave birth in Minnesota to the current prime minister and is a controvercial personality involved in dubious ngo projects and excerts great inluence on George Papandreou). He returned to Greece in 1959 where he served in several important positions (chief advisor to his father, deputy prime minister) after rennouncing his American citizenship.

Andreas Papandreou Jr. ruled from 1981-1989 and 1993-1996. In these goverments, the current prime minister, Georgios, served as Minister of education and he was able to start the de-christianization process which now is in full blown motion. As foreign minister, he planted the seeds of the defeatism in Greek foreign policy.


SCANDAL


Papandreou's was involved in a huge scandal and cover up in the States (apart from the ones in Greece), that rocked the Greek-american community.This involved a Greek bank (Ktimatiki Bank),which lured Greek-americans with high interest returns, and evasion of the IRS.

However the whole scheme scheme went wrong, as the FBI infiltrated the gameplay, and this resulted to a lot of people losing their savings and serving many years in prison.The money trail back to the "pink villa" where Papandreou lived with his mistress who later became his second wife, in a posh suburb of Athens. (The scheme was in the region of 700 million dollars in the 1980s.)

Despite the overwelming evidence (all the money ended up in the Papandreous family coffers), no one was charged for the scheme apart from some small fish trying to make 15% on their petty cash stash.

One would think that because of a Chavez-like anti American rhetoric on which he was elected, the Americans would use this opportunity to put him in prison. Even the MI6 was puzzled at the time. Even CNN, when broadcasting this newstory, cut the sattelite link to Greece (satelite was brand new then here) in order for the story to get burried.

Papandreou died in 1996 and was suceeded in a internal party coup in which a crypto jew (Costas Simitis whose father was minister of the guerilla communist government with high royal connections) took the leadership of the party and ruled Greece until 2004. By cooking stats and data, Simitis managed to get us in the Eurozone and pillage all Greeks savings through a stock market swindle.


WHATS GOING ON NOW


While all the political parties in Greece have a share to the current situation, the Papandreou clan did the biggest damage. With the import of immorality, nepotism and dubious loylties and dependacies, this family has been the caretaker of the imperial grand plan of destroying the Greek people values, religion and ideals.

All this with the destruction of education and the criminalisation of the treasures of Greek orthodox religion, literature, and philosophy as well as patriotism. Even referring to tyhis destruction is enough for someone to be labelled as a fascist by all pollitically correct media whores. To give the final push, Papandreou wants to legalize all Asian and African Muslim hordes that have invaded our country with the financing of the Turkish mafia and extremist Saudis. "Progressives" refer to them as war refugees.

Usually the refugees are women, children and aged people, not males 20-30 y.o.I believe Papandreou is on a mission to destroy Europe along with Greece. He will achieve that firstly by economic means. This man has given bad publicity to the Euro, has managed to sink the Greek economy and also create problems for the Eurozone (not that immoral and greedy Europeans don't deserve it) .

Also with his Soros, Rockerfeller funded NGO-driven policy on immigration, he is preparing troubles for Europe as well. He promised the sky to the Greek people, only to tell them that due to the economy, we are going to lose part of our sovereignity. Sovereignity is lost only through war.
The alibi he has is the odious debt and his clan's policies that have never benefited our country.

Man Bulldozes Home After Foreclosure

By Chris Walters on February 18, 2010 8:04 PM 0 views

http://consumerist.com/2010/02/18/02...ozing-home.jpg (WLTW.com)

A man in Ohio grew so angry at his bank for refusing to work with him to keep his home that he bulldozed it. He told WLWT News, "As far as what the bank is going to get, I plan on giving them back what was on this hill exactly (as) it was. I brought it out of the ground and I plan on putting it back in the ground."

Terry Hoskins owed $160,000 on a mortage on the home, which was valued at $350,000. Hoskins says the IRS placed liens on his business property and home after his brother, a former business partner, sued him. He says the bank then claimed his home as collateral and refused to accept a $170,000 buyout offer on the mortgage, telling him they could get more from it at auction.

He says he might bulldoze the commercial property next.
"Frustrated Owner Bulldozes Home Ahead Of Foreclosure" [WLWT.com]

Published on Thursday, February 18, 2010 by the Austin American-Statesman Official: Austin Plane Crash Into IRS Building ‘A Criminal Act’; Pilot's Suicide Note


See also: Suicide Note Posted by Man Linked to Austin IRS Plane Crash
http://www.commondreams.org/files/ar...stin-irs_0.jpgAUSTIN, Texas -- A plane crashed into a Northwest Austin building that houses federal offices about 9:30 this morning, injuring several people and sending plumes of smoke into the air that could be seen for miles.

Mathilda Sanchez, a spokeswoman for the Seton Family of Hospitals, said University Medical Center Brackenridge received two patients, and that no other hospitals had received any.

CNN is quoting federal officials as saying the pilot had set his home ablaze before intentionally crashing plane into the building.

A Federal Aviation Administration spokesman said the crash was "apparently a criminal act" and that in such a case the FBI would be the lead investigating agency rather than the National Transportation Safety Administration.
"The NTSB investigates accidents," said Paul Turk, assistant director of public affairs for the FAA.

The tail number of the Piper Cherokee plane that crashed into the building is the same as the number that is registered to a plane owned by Joseph Andrew Stack, a federal official confirmed for the Statesman.

Stack, whose nearby home was on fire at roughly the same time, is a private plane owner.

The pilot of the plane that crashed did not file a flight plan or, as far as FAA officials know at this time, have any other contact with the agency.

Paramedics have set up a triage center at the scene, though it is unclear how many people are injured. EMS officials said one person was unaccounted for.

"We have no idea right now if there are any patients, or how many," Austin-Travis County EMS Assistant Director James Shamard said.

The Internal Revenue Service has offices in the building, including its civil enforcement and criminal investigations divisions, said Special Agent Michael Lemoine, a spokesman for the criminal investigations division.

He said that some IRS offices are on the first floor, which Lemoine said was hit by the plane.

He said that the criminal investigations division personnel are safe and accounted for. He did not have information on the civil division workers, who conduct audits and other activity at the offices

web0219crash.jpg
According to an FBI agent who asked not to be identified because he isn't authorized to release information, the incident is being investigated as an accident, although eyewitnesses said the plane seemed to come in at full throttle. He said the plane was out of Waco and that Federal Aviation Administration officials are en route to the scene.

FBI sources said that the eyewitness accounts saying that the plane did not slow down is making some authorities wonder if it was an intentional act.

FBI spokesman Bill Carter said the building hit by a plane at the Echelon office complex did not contain an FBI office. While the FBI has an office at the complex, the plane did not crash into that particular building, Carter said.

"At this time we have no reason to believe there is a nexus to criminal or terrorist activity," Matt Chandler, a spokesman for the Department of Homeland Security, told CNN. "We are in the process of coordinating with state officials and other federal partners to gather more information and at this time we will defer additional questions to local officials and the FAA."

William Winnie, an Internal Revenue Service agent, said he was in a training session on the third floor of the building when he saw a light-colored, single engine plane coming at the building.

"It looked like it was coming right in my window," Winnie said. He said the plane veered down and to the left and crashed into the floors below. "I didn't lose my footing, but it was enough to knock people who were sitting to the floor."

Mischelle Diaz, a spokeswoman for St. Edward's University, said the plane hit a building in the Echelon business complex next to a building where the university's Professional Education Center provides software training and teaches some graduate students. She said the education center has been evacuated and that university officials were trying to confirm that students and instructors all got out safely.

"We're just desperately trying to get some information," Diaz said.

The American Red Cross of Central Texas will be providing food and water to the firefighters and investigators at the crash site, said spokeswoman Marty McKellips. They are also calling in mental health professionals to tend to crash survivors. Many people are shaken up and there are still some people missing, she said.

2010 Austin American-Statesman

The Future of the Dollar

by futureofdollar.com

http://globalresearch.ca/coverStoryPictures/17677.jpg Global Research, February 18, 2010
futureofdollar.com - 2010-02-17


The World is concerned that the dollar cannot play the role of the main reserve currency any longer after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since the 1930s. The Government’s stimulus packages, financial bailouts, the need to support liquidity in Treasuries, keeping interest rates at the lowest level under the circumstances of low economic growth, high unemployment and low tax collection make it print more dollars. This leads to a high risk of substantial inflation, or hyperinflation in a long-run.

With a $12.3 trillion national debt and $55 trillion in unfunded obligations for programs such as Social Security, Medicare and Medicaid, with total Federal Reserve and Treasury bailout commitments now at $11.8 trillion, of which $3.6 trillion has already been spent the U.S. need to take steps immediately to protect themselves from the potential loss of the purchasing power of their U.S. Dollars, inflation.us warns.

Although there is still no significant inflation data in the United States international stock and commodity markets grew abnormally within the last eleven months. Analysts called it the “flight from the dollar” or “diversifying risks.”

There are many factors evidencing against the future of the dollar as a global reserve currency. In the present article futureofdollar.com pays attention to the crucial points of analysis after conducting an extensive research on the topic.

Part I

Weak Fundamentals of the U.S. Economy

Nobel Prize winner Paul Krugman states that “a country whose fundamentals are persistently and predictably deteriorating will necessarily have a [currency] crisis at some point.” (1)

1. National Debt

In the middle of February 2010, President Obama signed into law the bill increasing the public debt ceiling from $12.394 trillion to $14.294 trillion. This is a second increase in the upper limit on the national debt in less than two months.

Last time, in December, House Majority Leader Steny Hoyer commented that the Congress simply had no other choice: otherwise the United States would have to default on their debt obligations what would be another catastrophe for financial markets. (2)

The Peterson-Pew Commission on Budget Reform stated that “the United States would almost certainly experience a debt driven crisis,” that “could unfold gradually or it could happen suddenly, but with great costs either way.” “The excessive debt would. . . affect citizens in their everyday lives by harming the American standard of living through slower economic growth and dampening wages, and shrinking the government’s ability to reduce taxes, invest, or provide a safety net.” (3)

2. Unemployment

This past January, the economy lost 20,000 jobs after loosing 150,000 jobs in December, and the unemployment rate was 9.7 percent. (4)

The unemployment rate fell from 10.0 to 9.7 percent in January. According to Reuters “a sharp increase in the number of people giving up looking for work helped to depress the jobless rate. The number of 'discouraged job seekers' rose to 1.1 million in January from 734,000 a year ago.”

3. Budget deficit

IMF’s Managing Director Dominique Strauss-Kahn noted at the 10th Annual Herzliya Conference in Tel Aviv that the global crisis had created a problem of fiscal sustainability for many countries that could take decades to fix because of the huge debts built up during the crisis, especially in developed countries. (5)

The United States reached a record budget deficit of $1.415 trillion in fiscal year 2009 that ended in September. (6) The deficit will probably again exceed one trillion dollars in the current fiscal year as it is already over $400 billion.

The excess of spending over revenue in the United States rose to $91.9 billion in December 2009, as opposed to a deficit of $51.8 billion in December 2008, the Treasury Department announced in its monthly budget statement. The U.S. has posted a record 15 straight monthly deficits. (7)

In the beginning of February 2010 Obama transmitted a $3.8 trillion budget for 2011 to the Congress with a record $1.6 trillion deficit. (8)

During the debate on the national debt the Senate “rejected a proposed bipartisan commission to recommend ways to reduce the U.S. budget deficit,” Bloomberg reported. “The legislation would have required that the panel’s recommendations be voted on by Congress without being amended.” (9)

4. Financial sector

Recent Bank of America’s and Citigroup’s losses for the fourth quarter of 2009 and inability to repay the bailout funds without additional stock offering, Morgan Stanley’s low profits, and J.P. Morgan Chase's retail division loss confirm a suspicion that the U.S. banks’ economic conditions are not very strong putting in doubt health of the financial sector as a whole.

“Loan demand continued to decline or remained weak in most Districts.” (10)

“A number of Districts reported that credit quality continued to deteriorate.” (11)

5. Home Sales

Existing-home sales fell 16.7 percent in December 2009 “after first-time buyers rushed to complete sales before the original November deadline for the tax credit,” the National Association of Realtors reported. (12)

According to the U.S. Bureau of the Census sales of new single-family houses declined 7.6 percent in December 2009, following a drop of 9.3 percent in November. Bloomberg noted that for all of 2009, sales declined 23 percent to 374,000, the lowest level since records began in 1963. (13)

6. Economic impact of U.S. international military operations

The cost of conducting wars in Iraq and Afghanistan pushed the budget into the red during the presidency of George W. Bush. The situation deteriorated after the beginning of the financial crisis when the government adopted measures such as stimulus packages, financial bailouts, the need to support liquidity in Treasuries, etc. Moreover, early in December 2009 it has increased its nonproductive expenses by approving 30,000 troops to be sent to fight in Afghanistan.

All economists agree that one of the basic nonmonetary reasons of inflation is the existence of significant nonproductive government expenses such as military expenses.

Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said Obama may have too much on his plate. “You can’t fight a war, a financial crisis, a recession, and add health-care coverage to the uninsured at the same time,” he said. “It is simply the recipe for disaster.” (14)

However important goals of the war could be, military operations are, undoubtedly, very costly for U.S. citizens especially at the time of the financial crisis and growing deficits. Moreover, the situation is not getting better considering that around 40 percent of the war financing has been borrowed from abroad, Joseph Stiglitz, the Nobel Prize Winner, shows in his research “The Three Trillion Dollar War: The Real Cost of the Iraq Conflict.”

Explaining why wars are expensive he points out that military expenditures are not only limited to direct operation costs but also include (the bigger part) human casualties, future disability costs, loss of income, increased oil prices, opportunity costs, veterans’ social welfare, nonproductive spending, loss of confidence in the future economic situation, increase in the national debt, and so on.

“If we try to stay the course, we are going to spend more and more money,” Stiglitz stresses. “The fact that we financed the war totally by deficits means that when 10 years from now we decide we want to repay that, which I don’t know if we will, the amount that we will have to raise our taxes will be that much larger because the debt will be that much larger.”

7. China’s peg to the dollar

So far China is enjoying low yuan rate giving its exports competitive advantage in relation to those countries with appreciating currencies against the U.S. dollar.

As the result China is actually “stealing” jobs from many countries since with appreciating currencies their companies are not able to compete with Chinese producers.

In relation to the United States this means that the country should not count on sooner recovery. China’s peg to the dollar makes imports into the U.S. cheaper. This supports high level of unemployment in America. Unemployment prevents the growth of GDP and reduces revenues.

Part II

Lack of Coincidence

Defining major reasons of currency crises Paul Krugman states that the most important is a lack of confidence. The “investor lack of confidence – is a defining feature of a currency crisis,” he argues. (15)

Below are opinions of a number of people from different parts of the world whom many of us know quite well. Their opinions concern the U.S. dollar and the U.S. economy.

Nouriel Roubini, the New York University professor who predicted the financial crisis, said that the greenback may weaken for the next three years. (16)

Warren Buffett, a successful international investor: “There is the likelihood of significant inflation down the road.” (17)

Robert B. Zoellick, the World Bank President: “There is little the United States can do about the sinking value of the dollar except restore growth in its economy.” (18)

George Soros, a successful international investor: “Irrespective of the situation in the stock markets or condition of the economy we shall see further shift from the dollar into real assets in a long run.” (19)

Jim Rogers, a successful international investor: “Printing money to help the U.S. economy will weaken the greenback and Treasuries in a long run.” (20)

Joseph Stiglitz, Nobel Laureate in Economics: The greenback will continue to head downward for the time being, given the huge U.S. trade deficit and global trade imbalance. (21)

Fan Gang, a prominent economist and adviser to China's central bank: "This crisis is a U.S. dollar crisis, which takes a relatively long time to clear up. The problem involves the U.S. currency and U.S. debt; eventually it has to be solved through U.S. dollar depreciation." (22)

Yuri Luzhkov, City of Moscow Mayor, Russia: The world is on the brink of a radical devaluation of the American currency. Therefore, Russia has to abandon its dependency on the dollar as soon as possible. American currency reserves are supported by nothing and industrial production in this country is very low. (23)

The list of well-known people with similar thinking is endless. In its research futureofdollar.com faced a difficulty of finding successful investors, economists or foreign politicians with the opposite thinking. There are just a few of them. Most of them are the U.S. government officials whose job is to restore the confidence in the U.S. economy with a part of this job being speaking in ‘positive’ terms.

People in this group either believe that:

*the recession is over and the U.S. economy will have a sharp rebound, or
*that the dollar will remain the primary reserve currency for a long time because during this last financial crisis investors found the dollar a safe haven, or
*that there is no inflation threat relying on the U.S. government data, or
*simply stating that “we will sink or swim with the dollar.”

For instance, Barack Obama is confident that the dollar is “extraordinarily strong” because investors are confident in the ability of the U.S. to lead a worldwide recovery. (24)

The Chairman of the U.S. Federal Reserve Ben Bernanke believes that U.S. asset prices aren’t out of line with underlying values, and central bank policy will ensure that the “dollar is strong.” (25)

The U.S. Treasury Secretary Timothy Geithner forecasts that the dollar will remain the world's "dominant reserve currency." (26)

Therefore, we came to a conclusion that, unfortunately, the U.S. economy and the dollar are losing confidence. The U.S. government must work even harder now to restore it.

Part III

Diversification Out of the Dollar

It is hard to argue that the future of the dollar nowadays significantly depends on such developing countries as China, India, Brazil, Russia, and others. These countries accumulate very large dollar reserves and the U.S. debt.

Let’s explore their recent positions regarding the U.S. dollar with an attempt to predict its future.

1. China

Already for an extended period of time China was quite aggressive in diversifying its reserves and protecting from weakening dollar, recommending its private sector to do the same.

The Chinese Ministry of Finance said in the beginning of September 2009 that it would issue 6 billion yuan worth of government bonds in Hong Kong, a major step to internationalize its currency at a time of concern about the dollar. (27)

Same month China bought the equivalent of $50 billion of the first bond sale by the International Monetary Fund, a purchase that might raise Beijing’s standing in the fund and help the government’s quiet campaign to expand the reach of its currency. China took the unusual step of paying for the IMF bonds with 341.2 billion yuan — which is not traded on global markets — rather than dollars. (28)

The country signed currency agreement with Argentina and agreed to credit South Korea, Malaysia, Indonesia and Belarus with its own currency. (29)

In the mid-September 2009, the International Monetary Fund announced that it was going to sell 403 tons of gold. Chinese central bank showed its willingness to buy the whole offer. (30)

The People’s Bank of China showed its intention to decrease its dollar reserves. Chinese authorities will increase their euro and yen reserves. (31)

China and Brazil established international payments in national currency of the Republic of China. Zhuhai Geli corporation received a transfer of several million yuan from San Paolo in the fall of 2009. (32)

Foreign investments of Chinese companies rose in the 3d quarter of 2009 reaching $20,5 billion. The number is almost three times higher as opposed to the last year statistics for the same period of time, as data of the Chinese Ministry of Trade showed. (33)

The country was seeking to expand its African oil reserves by bidding for up to a sixth of Nigeria's crude reserves constituting approximately 6 billon barrels. Valuing near $30-50 billion Chinese offer is higher than that of the current owners. China has been buying oil resources around the World for the second year already. (34)

Chinese companies may invest about $ 4,4 billion into Peru’s mining sector within the next three years, said Bloomberg referring to the statement made by the Prime Minister of Peru Javier Velasquez. (35)

Nearly 44% ($14,3 billion) of the total volume of China’s investments within the first nine months of 2009 were coming into mining and production sector. Representative of the Asian Development Bank noted that investing in the mining sector by purchasing stocks corresponded to a long-term strategy of the country to achieve resource security. (36)

China Investment Corporation (CIC), a sovereign wealth fund responsible for managing part of Chinese foreign exchange reserves, “has been quietly accumulating stakes in resource firms including Canada's Kinross Gold Corp. and Potash Corp. of Saskatchewan according to a filing with securities regulators.” (37)

CIC chairman Lou Jiwei “recently said that CIC would focus on investing in emerging markets in 2010. In October, the CIC chairman said the fund had allocated $110-billion for foreign investments and had already deployed about half of that.” (38)

“In addition to its $3.5-billion interest in Teck, CIC has a $652-million stake in Brazilian iron ore and nickel giant Vale SA, a $4.7-million interest in copper miner Freeport-McMoRan, and a $9.1-million holding in steel producer ArcelorMittal.” CIC has also acquired stakes in a number of high-profile brand name companies in North America such as Research In Motion Ltd., Apple Inc., News Corp., and AIG Inc. (39)

2. India

IMF sold 200 metric tons of gold to India in the beginning of November 2009. The $6.7 billion sale is “the biggest single central-bank purchase that we know about for at least 30 years in such a short period,” said Timothy Green, author of “The Ages of Gold.” “The only comparable event was the U.S.’s steady purchases in the 1930s and 1940s.” (40)

3. Brazil

Brazilian Central Bank president Henrique Meirelles said the country is considering the gradual elimination of the U.S .dollar in trade with China, Russia and India. (41)

In October 2009, the Brazilian Central bank announced that an agreement was reached with Uruguayan economic authorities to apply the so called SML system in bilateral trade operations. (42)

Brazilian Finance Minister Guido Mantega said that Brazil would spend 10 billion US dollars on buying International Monetary Fund bonds to boost the fund's resources. This “radical change” will help Brazil to diversify its resources, he added. (43)

4. Russia

The Central Bank of Russia increased the share of Japanese yen and Swiss franc in reserves in the middle of 2008. Japanese yen currently accounts for around 2 percent of Russia's reserves. The franc’s share is smaller because of the limited liquidity.

Russian reserves consist now mainly of the U.S. dollar and the euro. However, it is quite possible that Russia will add Chinese yuan in there, said Alexei Kudrin, Russian Finance Minister. The lack of convertibility of the China’s currency and of the free movement of capital was the main current obstacle. (44)

Brazil and India are interested in settling bilateral trade with Russia in national currencies, said Alexander Potemkin, an advisor to the Russian central bank chairman, echoing Moscow's drive for more use of national currencies and less of the U.S. dollar. "There was an initiative within the framework of the BRIC. These countries intend to create the conditions for direct payment for trade in national currencies," he said. He also said that Russia had a reach experience of reciprocal payments in national currencies with China. He estimated that settlements in yuan and rouble already account for around 2 percent of Russia's trade with China. (45)

Moscow also discusses trade in national currencies with other countries including Turkey and Vietnam. (46)

Russian central bank first deputy chairman Alexei Ulyukayev said in November 2009 that Russia was going to add the Canadian dollar to its gold and forex reserves in the next few months, but its share would be insignificant. (47)

5. Other countries

In April 2009 the Latin American leaders signed into effect a new South American currency, to be called the ‘sucre’. ALBA leaders (representing Venezuela, Cuba, Bolivia, Honduras, Nicaragua, and Dominica) say the sucre is necessary to help defray the regional effects of the world economic crisis by substituting their trade in dollars with a new alternative currency. The ALBA countries and their allies plan to use the virtual sucre by early 2010. (48)

In the second quarter ending in June 2009, central banks around the world invested 63 percent of their new cash reserves into euro and yen, and put only 37 percent into dollars. (49)

Kuwait, Saudi Arabia, Qatar and Bahrain signed in June 2009 an accord to create a joint monetary union council, a prelude to establishing a Gulf central bank and launching a monetary union and single currency. The remaining two members of the Gulf Cooperation Council (GCC), the UAE and Oman, did not sign after deciding to withdraw from the project. The GCC states have set 2010 as the target to launch the monetary union and single currency, but many experts believe that target is too ambitious and unrealistic. (50)

The International Monetary Fund sold 10 metric tons of gold to the central bank of Sri Lanka for about $375 million. The purchase is part of Sri Lanka’s plan to diversify its reserves and it has been gradually accumulating the metal in the past nine months. “Gold is a good anchor and hedge to have in these volatile circumstances,” said Nivard Cabraal, the bank’s governor. “We think it’s a good time to buy.” (51)

In the beginning of January 2010 Canada announced that it might sell about 1 billion euros of 10-year bonds, its first issue of debt in the European currency in more than a decade. This strategy will help attracting new investors, while debt denominated in U.S. dollars is becoming less popular among the creditors given the declining value of the U.S. currency. (52)

It is obvious that the trend of the diversification out of the dollar persisted through the whole year of 2009.

Part IV

Way Out

Peterson-Pew Commission on Budget Reform suggests that “the United States must show its creditors that it is serious about stabilizing the federal debt over a reasonable timeframe. Both spending cuts and tax increases will be necessary.”

Most of the economists would suggest that the anti-inflation strategy of the United States should include:

* suppression of inflation expectations and stimulation of savings;
* reaching balance between budget receipts and expenditures;
* increasing the mass of commodities; and
* strengthening national currency by establishing an unconditional priority of inflation targeting over other government programs (such as military expenses, unemployment rate regulation, influencing the national currency market, etc.).

Will the U.S. assume such a pain by reducing spending and fighting the deficits? Probably not, taking into consideration the words of Sir John Templeton, the John Templeton Foundation, who said in 2005: “The psychology all over the world is that people will not re-elect leaders who want them to be thrifty. The voters will elect the government that spends more money.” (53)

Many analysts are pretty sure that the weak dollar policy is beneficial to the U.S. Therefore, whatever the authorities say, there will be no resistance to dollar depreciation on their part.

Most experts already doubt that the solution of the problem depends much on the U.S. and call for global measures. “We must reform the international monetary system,” Yu Yongding, a former Chinese central bank adviser, stated in mid-November 2009. “A good monetary system should make us confident. But we don’t have confidence in the U.S. dollar now,” he added. (54)

George Soros, a global financier, is convinced that we “need a new currency system and actually the Special Drawing Rights do give you the makings of a system," he told the Financial Times.

The Future of the Dollar

The future of the dollar is in jeopardy now as it is evident from the article.

This subject is the primary focus of futureofdollar.com. We follow latest developments in this area and provide our readers information from reliable sources.

This analysis is prepared by http://www.futureofdollar.com
Notes

(1) Paul Krugman, Currency Crises, 1997;
(2) Reuters, December 17, 2009;
(3) budgetreform.org, December 14, 2009;
(4) U.S. Department of Labor, February 5, 2010;
(5) IMF, January 31, 2010;
(6) The Department of the Treasury;
(7) Merco Press, January 13, 2010;
(8) Bloomberg, February 1, 2010;
(9) Bloomberg, January 26, 2010;
(10) Jan 2010 Beige Book;
(11) Ibid.;
(12) NAR, January 25, 2010;
(13) Bloomberg, January 27, 2010;
(14) Bloomberg, January 8, 2010;
(15) Paul Krugman, Currency Crises, 1997;
(16) Bloomberg, February 4, 2010;
(17) FOX Business Network, June 24, 2009;
(18) The Economic Times, November 13, 2009;
(19) Reuters, October 26, 2009;
(20) Bloomberg, October 28, 2009;
(21) The Korea Times, October 28, 2009;
(22) Reuters, December, 2009;
(23) RB.ru Russian Business, September 1, 2009;
(24) Bloomberg, March 24, 2009;
(25) Bloomberg, November 17, 2009;
(26) USA Today, March 25, 2009;
(27) DealBook, September 7, 2009;
(28) The Associated Press, September 3, 2009;
(29) The New York Times, September 4, 2009;
(30) CommodityOnline.com, September 21, 2009;
(31) RosBusinessConsulting, November 6, 2009;
(32) NEWSru.com, October 28, 2009;
(33) Bloomberg, 26 October 2009;
(34) Vedomosti, 28 September, 2009;
(35) Bloomberg, 25 November, 2009;
(36) ChinaPro.ru / Vedomosti, 25 November 2009;
(37) The Globe and Mail, February 8, 2010;
(38) Ibid.;
(39) Ibid.;
(40) Bloomberg, November 3, 2009;
(41) Merco Press, October 29, 2009;
(42) Ibid.;
(43) Bloomberg, October 4, 2009;
(44) Bloomberg, October 24, 2009;
(45) Reuters, November 25, 2009;
(46) Ibid.;
(47) Reuters, November 2009;
(48) Venezuelanalysis.com, April 17, 2009;
(49) CNBC, October 14, 2009;
(50) ArabianBusiness.com, October 11, 2009;
(51) Bloomberg, November 25, 2009;
(52) Bloomberg, January 5, 2010;
(53) NewsMas;
(54) Bloomberg, November 17, 2009.

'Power Lunch' Guest Says No to Greek Debt, Warns All Governments Will Default
Marc Faber tells CNBC that market turmoil caused by Europe is a 'correction,' praises soundness of emerging economies.

By Julia A. Seymour
Business & Media Institute
2/10/2010 3:11:24 PM

Just one day after Treasury Secretary Timothy Geithner said the U.S. wouldn’t lose its “top-notch” credit rating, one CNBC guest said that ‘”all governments” will default – it’s only a matter of time.

When asked by “Power Lunch” co-anchor Sue Herera if he would buy Greek debt, Marc Faber said: “No, I’m not interested in government or sovereign debts because I think that all governments will eventually default, including the U.S.”

Shocked, Herera replied, “What! Whoa, whoa, whoa.” Co-anchor Dennis Kneale asked for clarification, “All governments?”

“Mhmm. All governments,” Faber, editor of the Gloom, Boom & Doom Report, explained. “Some like Singapore that have basically no government debt and have huge reserves … in general the problem is the emerging economies today are financially much sounder in terms of debt to GDP than the developed world, including the U.S., Western Europe, the U.K. and so forth.

Faber cited “huge unfunded liabilities” for developed nations and concluded “eventually these governments will all have to print money before they default.”

Given the pessimistic name of Faber’s publication Kneale asked him “if he was selling this kind of panic in March before stocks rose 60 percent.”

Faber said in March he had been interviewed by Bloomberg and encouraged people to buy stocks at that time.



http://www.businessandmedia.org/arti...210150745.aspx

The Future of the Euro in Question

by Bryan Rich 02-20-10

At the beginning of this year, I wrote a Money and Markets column entitled “Will the Euro Become the Most Hated Currency for 2010?“

At that time, the euro/dollar exchange rate was about 5 percent off of its 2009 highs. And we were just months removed from hearing the constant and broadly espoused opinions suggesting the euro would become the world’s next primary reserve currency — replacing the troubled U.S. dollar.

But the focus of global investors was starting to shift …

Concerns were beginning to turn away from the “minor hiccup” of a debt-restructuring surprise in Dubai, and toward the fiscal deficit problems in the Eurozone — specifically Greece.

Meanwhile, the euro bulls were still beating their drums …

The overall consensus was still advertising the pullback in the euro as an attractive buying opportunity. In fact, the median forecast of 43 economists polled by Bloomberg was calling for the euro to trade at 1.51 to the dollar by the end of March (a little more than a month from now).

But as I pointed out in my January 2 column, this type of market scrutiny surrounding sovereign debt can snowball quickly. In short, these problems have a history of being contagious and spreading throughout the world.
http://images.moneyandmarkets.com/1637/eurodollar.jpg With the euro falling another 5 percent, the dollar looks mighty good!

Since then …

The dollar doesn’t look so bad! And the euro has dropped another 5 percent and looks increasingly vulnerable to a break-up, or at least a structural change, of the monetary union. To sum up, it’s a decisive moment for the future of the common currency.

No-Win Situation …

With Portugal, Ireland, Italy and Spain all under the hot spotlight and the Greek situation worsening, European leaders stepped in last week in an attempt to stem the negative pressure on the Greek bond market and the euro. They said they would support Greece — a verbal commitment to do whatever was necessary. Yet they gave no details on how.

Nevertheless, a bail-out of a fellow Economic and Monetary Union (EMU) member country is a direct violation of rules set forth in the Stability and Growth Pact, the principles upon which the euro was built.

When questioned over the past month, the European Central Bank and European leaders consistently rejected any notions of a bail-out. But it appears they’ve ultimately conceded to the danger that Greece is presenting to the stability of the monetary union.

Perhaps this is why …

The Bank of International Settlements shows that European banks have $2.1 trillion exposure to sovereign debt of the weakest EMU countries (Portugal, Ireland, Greece and Spain). And it’s my guess that that exposure has only been exacerbated by the European Central Bank’s answer to “extraordinary monetary policy.”

Instead of overtly buying their own government debt, as is done by the U.S., Japan, the UK and many other countries, the European Central Bank’s liquidity strategy was to provide unlimited easy money to European banks — unlimited 1-percent funds for one year.

What did those banks do with the money? They bought up sovereign debt of the weak-link EU members, i.e. backdoor quantitative easing.

Credibility Damaged …

Regardless of the outcome, the euro’s creditability has taken a major hit.

First off, the integrity of the EMU is diminished when fiscal constraints are ignored. Secondly, the enforcement of those policies has been exposed as unenforceable. So countries have no incentive to responsibly manage their fiscal situation.

Instead, they can simply take cover under the broader monetary union, without suffering an attack on their currency.

Irreparable Moral Hazard …
http://images.moneyandmarkets.com/1637/otmar.jpg “Europe cannot afford to rescue Greece.” — Otmar Issing

This week, former executive board member for the European Central Bank, Otmar Issing, wrote an op-ed piece in the Financial Times. He warned against a Greek bailout and, further, questioned the viability of the euro.
Here’s what he said …

“Starting monetary union without having established a political union was putting the cart before the horse.
“Once Greece was helped, the dam would be broken. A bail-out for the country that broke the rules would make it impossible to deny aid to others.”

Confidence Broken …

Just as European leaders were trying to stem the tide of negative sentiment and the sense of urgency and imminence surrounding the Greece situation, the Greece Finance Minister said publicly that they’re trying to change the “course of the Titanic” … an ominous statement for a situation so central to the future of the euro.

Then to add to the Eurozone’s problems, a controversy recently broke out exposing off-balance-sheet funding that Greece engaged in through “special currency swap” agreements with Goldman Sachs and other investment banks.
http://images.moneyandmarkets.com/1637/eurozone.jpg Several Eurozone countries are under investigation for their currency swap agreements.

These special currency swaps appear to have allowed Greece to hide debt to gain entry into the currency bloc in 2001. Furthermore, other weak Eurozone countries are now being scrutinized for participating in similar accounting shenanigans.

To Sum It Up …

I’ve warned repeatedly that following such a widespread global economic crisis, synchronized with a financial crisis, the looming damage and time bombs would likely linger.
That’s why I’ve been recommending aggressive, long dollar exposure and short exposure to those currencies most vulnerable to global financial market shocks.

The global economic crisis has left the Eurozone with uneven economic performance. Some countries are recovering, many are not.

And that means countries with damaged balance sheets and a bleak outlook for growth are stuck. With a one-size fits all monetary policy and currency, they lack critical tools to work their way out.

So you can expect more problems ahead for the euro.

Regards,
Bryan

Citigroup Warns Customers It May Refuse To Allow Withdrawals

John Carney
Feb. 19, 2010, 2:57 PM

http://static.businessinsider.com/im...rella-ebay.jpg
The image of banks locking their doors to keep customers from making withdrawals during a bank run is what immediately came to mind when we heard that Citigroup was telling customers it has the right to prevent any withdrawals from checking accounts for seven days.

"Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change," Citigroup said on statements received by customers all over the country.

What's going on? It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at The Future of Capitalism. It was accidentally included on customer statements nationwide.

"Whatever the explanation, it doesn't exactly inspire confidence in Citi," Stoll writes. "But it's hard to believe a bank would be sending out a notice like that on its statements."

Head Of Greek Debt Office Replaced By Former Goldman Investment Banker


by Tyler Durden
02/19/2010 11:18 -0500



And so the tragicomic becomes surreal. Yesterday's news about the departure of the head of the debt management agency, Spyros Papanicolaou, was somewhat of a yawner, until we realized that his replacement would be none other than Petros Christodoulou, who until today was head of Private Banking and Group Treasury at the National Bank of Greece (reporting directly to the CEO of the NBG Tamvakakis), as can be seen on the org chart below. Yet was is oddest, is that Mr. Christodoulou worked not only as head of derivatives at JP Morgan but also held comparable posts at Credit Suisse, and... wait for it, Goldman Sachs... Uh, say what?
http://www.zerohedge.com/sites/defau...%20Chart_0.jpg
Petros' profile from Forbes:

Petros Christodoulou, born 1960, is the General Manager of Treasury, Global Markets and Private Banking. Before joining the Bank in 1998, he worked in various positions in Global Markets for Credit Suisse First Boston and for Goldman Sachs. Additionally, at JPMorgan he led the derivatives desk, followed by the short-term interest-rate trading and emerging markets division in London as Managing Director. He is a member of the Investment Committee of EH and the Foundation for Economic and Industrial Research. He holds a BSc from the Athens School of Commerce and Economics and an MBA in International Financial Markets from Columbia University.

But, but, we thought it was all Goldman Sachs' fault for annihilating Greece? Wasn't it all Goldman's fault for fully (not) disclosing the terms of its nearly decade worth of swaps, which apparently were obvious to Risk magazine but oh so incomprehensible to Eurostat. Although it may all be good - it appears that Greece has found a new enemy. Reuters now reports that Greek opposition lawmakers said on Thursday that Germans should pay reparations for their World War Two occupation of Greece before criticising the country over its yawning fiscal deficits.
The fact that Greece's survival is now reliant on Germany's goodwill, seems to be lost on everyone.
We can not wait for the next installment in this ever more fascinating soap opera

Hanging On in Quiet Desperation Is the English Way

by: Clive Corcoran February 22, 2010


The economic data coming out of the UK is unrelentingly abysmal. Retail sales are down more than expected, and mortgage applications are plummeting since the winding up of stamp duty relief on modestly priced homes at the end of 2009. Not to mention the shocking announcement last week from the Treasury that the UK had to borrow more than £4bn in January because of much weaker taxation receipts than expected, coupled with increasing payouts in benefits and public sector programs.

In many quarters, even amongst those who should know better, there is an atmosphere of lethargic complacency about the current predicament facing the UK government’s balance sheet - which is just as bad, if not worse, than that of Greece. However, pre-election spin and the ongoing ostrich economic policy so carefully followed by Gordon Brown and his government are lulling a domestic audience into a false sense that it will all turn out alright, thanks to the clever management of the financial technocrats at the Treasury.

External investors are far less sanguine, and as the long term chart for GBP/USD reveals, sterling is losing its grip with hundreds of pips of gains ahead for those that want to sell this currency pair.
Click to enlarge

http://static.seekingalpha.com/uploa...20100219_1.png
The current climate in the UK has eerie similarities to that seen in the early 1970s and could just as easily end up with a sterling crisis and rescue talks with the IMF. (At least the ECB/EZ can breathe a sigh of relief that the UK's version of a basket case economy is not part of its domain.)

Somehow there are echoes in my head of a lyric from the classic Pink Floyd album released in 1973, Dark Side of the Moon:

"Hanging on in quiet desperation is the English way. The time is gone, the song is over, Thought I’d something more to say."

Unfortunately, life does not imitate art, and for Mr. Brown there will be so much more to say as he wants UK electors to cast their minds back over the last thirteen years of his government's successes.

Some - but not many - politicians think out of the box, but far more should be locked up in a box and have the key thrown away.

Recent Stats Indicate U.S. Economic Recovery Was an Illusion


by: Daryl Montgomery February 25, 2010

A number of economic reports in the last few days indicate that the U.S. economy has not only failed to recover from the recession, but continues to fall deeper into a hole. Banking, consumer confidence, employment numbers, durable goods and the housing industry - each representing a different aspect of the economy - are all sending out troubling signs. Despite the onslaught of negative data, mainstream economists continue to echo the official U.S. government view that "the recovery is still on track."

Updated statistics from the FDIC indicate that there were 702 banks on the troubled list at the end of 2009. This is an increase of 27% from the third quarter. FDIC numbers also show that U.S. banks cut lending by 7.5% in the fourth quarter of last year. Since lending is the lifeblood of the economy this doesn't bode well for the future. The FDIC also had to put aside an additional $17.8 billion for future bank failures. Its deposit insurance fund is now at a negative $20.9 billion. Despite statements that it has enough cash to keep operating (Bear Stearns and Lehman Brothers made similar claims), it is only a matter of time before the FDIC is bailed out. This will take place before the end of the year and will be done by tapping a line of credit from the Treasury department. Expect this event to be downplayed by mainstream media reports with claims that it is not really a bailout.

While the U.S. banking system continues to dissolve, consumers are losing confidence in the economy. The Conference Board numbers for February fell a whopping 10.5 points to 46 (around 100 is a good number). The present situation subindex fell to 19.4, the lowest level since February 1983 when the U.S. was trying to recover from a severe double dip recession. Before the Credit Crisis, consumer spending represented 72% of the U.S. economy. Without their participation, a sustainable recovery is not possible. Other reports indicate there is no way in the near future that consumers can resume their vital economic role. Consumers not only don't have credit - credit card debt was dropping at close to a 20% annual rate at the end of last year - but they are worried about the job market as well.

The weekly jobless claims indicate why the job picture is still troubling. Initial claims were up 22,000 last week to 496,000 (a number around 400,000 indicates recession and 300,000 indicates a healthy economy). These numbers are highly volatile because they come from state unemployment offices that are notorious for backlogs in processing claims. This problem occurred during the holiday season and the claim numbers were consequently lower. The mainstream media then fell all over itself to report the tremendous improvement in the employment picture, instead of the real story of bureaucratic incompetence that was preventing accurate numbers from being produced. Market watchers usually only pay attention to the four-week moving average to get around this problem. This number has risen by 30,000 to 473,750 in the last four-weeks.

The just released Durable Goods report got major headlines about how bullish the number was. This is only the case as long as you don't look at the details of the report. Responsible for the good headline number was a 126% increase in civilian aircraft orders (these orders can be cancelled, by the way). Outside of transportation, orders fell 0.6%. Core capital equipment and machinery orders dropped 2.9% and 9.7%, respectively. These two numbers are the important ones that determine the direction of the economy. For all of 2009, durable goods fell a record 20%.

Finally, housing doesn't look like it is in recovery mode either. Housing was the epicenter of the Credit Crisis and it will be years before all the damage wrought by the bubble is worked out. According to the Mortgage Bankers Association, mortgage applications for home purchases have just fallen to a 13-year low. New home sales in the U.S. fell to the lowest level on record in January (records go back almost 50 years). Government nationalized Freddie Mac (FRE) reported it lost another $7.8 billion in the fourth quarter. That brings its total loss to $25.7 billion for all of 2009. Freddie Mac purchased or guaranteed one in four U.S. home loans in 2009. The Obama administration has promised a blank check to Freddie along with its companion housing entity Fannie Mae (FNM), also nationalized and bleeding money, to cover losses up until 2012.

There is little evidence that the U.S. economy has recovered from the recession or is going to recover from the recession anytime soon. The support for the recovery viewpoint comes from government statistics that have been highly manipulated. All governments, of course, want to present a rosy picture of their handling of the economy for political reasons and it is much easier to make the numbers better than it is to actually make the economy better. Eventually the public catches on to this game, however. The recent consumer confidence numbers indicate that the American public is no longer buying the public relations story, but is starting to pay more attention to the realities they have to face on a day to day basis.

You Could Now Be Arrested, In America, Just For Mentioning Europe's Problems Over Dinner

Vincent Fernando | Mar. 3, 2010, 12:01 AM


You know a company/country/continent is in trouble when authorities start cracking down on short bets against it. That's why it's so disturbing how much heat European currency and sovereign debt speculators are getting these days.

Even the U.S. has climbed aboard the bandwagon now.
Reports of a U.S. Justice Department investigation into Soros Fund Management, SAC, and Greenlight Capital short positions against the euro broke last week.

Yet now the speculator clamp down is evolving into something completely terrifying. Apparently, it could now be considered collusion if you simply share economic opinions over dinner:

WSJ:
The Journal article disclosed that the big euro bets were emerging amid gatherings including an "idea dinner" involving a number of hedge funds including SAC, Greenlight and Soros, where a trader argued that the euro is likely to fall to "parity," or equal to, against the dollar on an exchange basis. The euro currently trades at $1.3609. One of the questions investigators are likely to examine is whether such information-sharing constitutes collusion, the people say.
...

At one such gathering, a dinner on Feb. 8 at a Manhattan restaurant, an SAC portfolio manager said he believed the euro could fall to a level equal to that of the dollar and urged other traders to "short," or bet against, the euro as his firm had, according to people at the dinner. The size of the bets against the euro is unclear.

In a research note issued to hundreds of hedge-fund clients shortly after the dinner, the research boutique that hosted the event summed up the SAC manager's argument without mentioning his name. [But attributing it to an unnamed third party source, 'a presenter', which is standard practice]

One of the most dangerous misconceptions used to restrict economic freedoms is that opinions have more weight than fundamentals. Should we arrest people for threatening 'economic stability' if they argue against a particular stimulus bill or government and then collectively vote against it?

Because that's all euro-shorts are doing. Whoever thinks that euro speculators are pushing the euro to unfairly low levels has an opportunity to vote against them any day of the week in the currency markets. So let's not forget that a truly viable currency can carry the weight of open criticism, just like a strong nation or value-system can. Else traders better brush up on their Orwellian double speak.

Disinformation Tactics: The Methods Used To Keep You In The Dark

By Giordano Bruno
Neithercorp Press - 02/04/2010

http://neithercorp.us/npress/wp-cont...confusion1.jpg

There was a time, not too long ago (relatively speaking), that governments and the groups of elites that controlled them did not find it necessary to conscript themselves into wars of disinformation. Propaganda was relatively straightforward. The lies were much simpler. The control of information flow was easily directed. In fact, during the early Middle-Ages in most European countries commoners were not even allowed to own a Bible, nor was the Bible allowed to be interpreted from Latin to another language, let alone any other tome that might breed “dangerous ideas”. This was due in large part to the established feudal system and its hierarchy of royals and clergy. Rules were enforced with the threat of property confiscation and execution for anyone who strayed from the rigid socio-political structure. Those who had theological, metaphysical, or scientific information outside of the conventional and scripted collective world view were tortured and slaughtered. The elites kept the information to themselves, and removed its remnants from mainstream recognition, sometimes for centuries before it was rediscovered.

With the advent of anti-feudalism, and most importantly the success of the American Revolution, elites were no longer able to dominate information with the edge of a blade or the barrel of a gun. The establishment of Democracies (and Democratic Republics), with their philosophy of open government and rule by the people, compelled Aristocratic minorities to plot more subtle ways of obstructing the truth and thereby maintaining their hold over the world without exposing themselves to retribution from the masses. Thus, the complex art of disinformation was born. The technique, the “magic” of the lie, was refined and perfected. The mechanics of the human mind and the human soul became an endless obsession for the elites.

The goal was malicious, but socially radical; instead of expending the impossible energy needed to dictate the very form and existence of the truth, they would allow it to drift, obscured in a fog of contrived data. They would wrap the truth in a “Gordian Knot” of misdirections and fabrications so elaborate that they felt certain the majority of people would surrender, giving up long before they ever finished unraveling the deceit. The goal was not to destroy the truth, but to hide it in plain sight.

In modern times, and with carefully engineered methods, this goal has for the most part been accomplished. However, these methods also have inherent weaknesses. Lies are fragile. They require constant attentiveness to keep them alive. The exposure of a single truth can rip through an ocean of lies, evaporating it instantly. In this article, we will examine the methods used to fertilize and promote the growth of disinformation, as well as how to identify the roots of disinformation and effectively cut them, starving out the entire system of fallacies once and for all.

Media Disinformation Methods
The mainstream media, once tasked with the job of investigating government corruption and keeping elitists in line, has now become nothing more than a PR firm for corrupt officials and their Globalist handlers. The days of the legitimate “investigative reporter” are long gone, and journalism itself has deteriorated into a rancid pool of so called “TV Editorialists” who treat their own baseless opinions as supported fact.

The elitist co-opting of news has been going on in one form or another since the invention of the printing press, however, the first methods of media disinformation truly came to fruition under the supervision of newspaper magnate William Randolph Hearst, who believed the truth was “subjective” and open to his personal interpretation. Hearst’s legacy of lies and sensationalism lives on in the Hearst published magazine ‘Popular Mechanics’, who accuse the growing 9/11 Truth Movement of outrageous “conspiracy theory” while at the same time consistently publishing articles about UFO sightings and secret government flying saucer programs.

http://neithercorp.us/npress/wp-cont...st-911-med.jpg

As we will show, this strange juxtaposition of mixed signals and hypocritical accusations is characteristic of all purveyors of disinformation.

Some of the main tactics used by the mainstream media to mislead the masses are as follows:

Lie Big, Retract Quietly

Mainstream media sources (especially newspapers) are notorious for reporting flagrantly dishonest and unsupported news stories on the front page, then quietly retracting those stories on the very back page when they are caught. In this case, the point is to railroad the lie into the collective consciousness. Once the lie is finally exposed, it is already too late, and a large portion of the population will not notice or care when the truth comes out. A good example of this would be the collusion of the MSM with the Bush administration to convince the American public after 9/11 that Iraq had WMDs, even though no concrete evidence existed to prove it. George W. Bush’s eventual admission that there had never been any WMDs in Iraq (except chemical weapons which the U.S. actually sold to Saddam under the Reagan / Bush administration) was lightly reported or glazed over by most mainstream news sources. The core reason behind a war that has now killed over a million people was proven to be completely fraudulent, yet I still run into people today who believe that Iraq had nukes…

Unconfirmed Or Controlled Sources As Fact

Cable news venues often cite information from “unnamed” sources, government sources that have an obvious bias or agenda, or “expert” sources without providing an alternative “expert” view. The information provided by these sources is usually backed by nothing more than blind faith. A recent example of this would be the Osama Bin Laden audio tapes which supposedly reveal that the Christmas “Underwear Bomber” was indeed Al-Qaeda:

http://abcnews.go.com/WN/osama-bin-l...ory?id=9650267

The media treats the audio tape as undeniable fact in numerous stories, then at the same time prints a side story which shows that the White House cannot confirm that the tape is even real:

http://www.reuters.com/article/idUSTRE60N16I20100124

If the White House cannot confirm the authenticity of the tape, then why did the media report on its contents as if it had been confirmed?

Calculated Omission

Otherwise known as “cherry picking” data. One simple piece of information or root item of truth can derail an entire disinfo news story, so instead of trying to gloss over it, they simply pretend as if it doesn’t exist. When the fact is omitted, the lie can appear entirely rational. This tactic is also used extensively when disinformation agents and crooked journalists engage in open debate.

Distraction, and the Manufacture of Relevance

Sometimes the truth wells up into the public awareness regardless of what the media does to bury it. When this occurs their only recourse is to attempt to change the public’s focus and thereby distract them from the truth they were so close to grasping. The media accomplishes this by “over-reporting” on a subject that has nothing to do with the more important issues at hand. Ironically, the media can take an unimportant story, and by reporting on it ad nauseum, cause many Americans to assume that because the media won’t shut-up about it, it must be important! An example of this would be the recent push for an audit of the Federal Reserve which was gaining major public support, as well as political support. Instead of reporting on this incredible and unprecedented movement for transparency in the Fed, the MSM spent two months or more reporting non-stop on the death of Michael Jackson, a pop idol who had not released a decent record since “Thriller,” practically deifying the man who only months earlier was being lambasted by the same MSM for having “wandering hands” when children were about.

Dishonest Debate Tactics

Sometimes, men who actually are concerned with the average American’s pursuit of honesty and legitimate fact-driven information break through and appear on T.V. However, rarely are they allowed to share their views or insights without having to fight through a wall of carefully crafted deceit and propaganda. Because the media knows they will lose credibility if they do not allow guests with opposing viewpoints every once in a while, they set up and choreograph specialized T.V. debates in highly restrictive environments which put the guest on the defensive, and make it difficult for them to clearly convey their ideas or facts.

TV pundits are often trained in what are commonly called “Alinsky Tactics.” Saul Alinsky was a moral relativist, and champion of the lie as a tool for the “greater good;” essentially, a modern day Machiavelli. His “Rules for Radicals” were supposedly meant for grassroots activists who opposed the establishment, and emphasized the use of any means necessary to defeat one’s political opposition. But is it truly possible to defeat an establishment built on lies, by use of even more elaborate lies, and by sacrificing one’s ethics?

Today, Alinsky’s rules are used more often by the establishment than by its opposition. These tactics have been adopted by governments and disinformation specialists across the world, but they are most visible in TV debate. While Alinsky sermonized about the need for confrontation in society, his debate tactics are actually designed to circumvent real and honest confrontation of opposing ideas with slippery tricks and diversions.

Alinsky’s tactics, and their modern usage, can be summarized as follows:

1) Power is not only what you have, but what the enemy thinks you have.

We see this tactic in many forms. For example, projecting your own movement as mainstream, and your opponent’s as fringe. Convincing your opponent that his fight is a futile one. Your opposition may act differently, or even hesitate to act at all, based on their perception of your power.

2) Never go outside the experience of your people, and whenever possible, go outside of the experience of the enemy.

Don’t get drawn into a debate about a subject you do not know as well as or better than your opposition. If possible, draw them into such a situation instead. Look for ways to increase insecurity, anxiety and uncertainty in your opposition. This is commonly used against unwitting interviewees on cable news shows whose positions are set up to be skewered. The target is blind-sided by seemingly irrelevant arguments that they are then forced to address. In television and radio, this also serves to waste broadcast time to prevent the target from expressing his own positions.

3) Make the enemy live up to their own book of rules.

The objective is to target the opponent’s credibility and reputation by accusations of hypocrisy. If the tactician can catch his opponent in even the smallest misstep, it creates an opening for further attacks.

4) Ridicule is man’s most potent weapon.

“Ron Paul is a crackpot.” “Dennis Kucinich is short and weird.” “9-11 twoofers wear tinfoil hats.” Ridicule is almost impossible to counter. It’s irrational. It infuriates the opposition, which then reacts to your advantage. It also works as a pressure point to force the enemy into concessions.

5) A good tactic is one that your people enjoy.

The popularization of the term “Teabaggers” is a classic example, it caught on by itself because people seem to think it’s clever, and enjoy saying it. Keeping your talking points simple and fun keeps your side motivated, and helps your tactics spread autonomously, without instruction or encouragement.

6) A tactic that drags on too long becomes a drag.

See rule number 6. Don’t become old news. If you keep your tactics fresh, its easier to keep your people active. Not all disinformation agents are paid. The “useful idiots” have to be motivated by other means. Mainstream disinformation often changes gear from one method to the next and then back again.

7) Keep the pressure on with different tactics and actions, and utilize all events of the period for your purpose.

Keep trying new things to keep the opposition off balance. As the opposition masters one approach, hit them from the flank with something new. Never give the target a chance to rest, regroup, recover or re-strategize. Take advantage of current events and twist their implications to support your position. Never let a good crisis go to waste.

8) The threat is usually more terrifying than the thing itself.

This goes hand in hand with Rule #1. Perception is reality. Allow your opposition to expend all of its energy in expectation of an insurmountable scenario. The dire possibilities can easily poison the mind and result in demoralization.

9) The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition.

The objective of this pressure is to force the opposition to react and make the mistakes that are necessary for the ultimate success of the campaign.

10) If you push a negative hard and deep enough, it will break through into its counterside.

As grassroots activism tools, Alinsky tactics have historically been used (for example, by labor movements) to force the opposition to react with violence against activists, which leads to popular sympathy for the activists’ cause. Today, false (or co-opted) grassroots movements use this technique in debate as well as in planned street actions. The idea is to provoke (or stage) ruthless attacks against ones’ self, so as to be perceived as the underdog, or the victim. Today, this technique is commonly used to create the illusion that a certain movement is “counterculture” or “anti-establishment.”

11) The price of a successful attack is a constructive alternative.

Never let the enemy score points because you’re caught without a solution to the problem. Today, this is often used offensively against legitimate activists, such as the opponents of the Federal Reserve. Complain that your opponent is merely “pointing out the problems.” Demand that they offer a solution.

12) Pick the target, freeze it, personalize it, and polarize it.

Cut off the support network and isolate the target from sympathy. The targets supporters will expose themselves. Go after individual people, not organizations or institutions. People hurt faster than institutions.

The next time you view an MSM debate, watch the pundits carefully, you will likely see many if not all of the strategies above used on some unsuspecting individual attempting to tell the truth.

Internet Disinformation Methods
Because the MSM’s bag of tricks has been so exhausted over such a long period of time, many bitter and enraged consumers of information are now turning to alternative news sources, most of which exist on the collective commons we call the internet. At first, it appears, the government and elitists ignored the web as a kind of novelty, or just another mechanism they could exploit in spreading disinformation. As we all now well know, they dropped the ball, and the internet has become the most powerful tool for truth history has ever seen.

That being said, they are now expending incredible resources in order to catch up to their mistake, utilizing every trick in their arsenal to beat web users back into submission. While the anonymity of the internet allows for a certain immunity against many of Saul Alinsky’s manipulative tactics, it also allows governments to attack those trying to spread the truth covertly. In the world of web news, we call these people “disinfo trolls.” Trolls are now being openly employed by governments in countries like the U.S. and Israel specifically to scour the internet for alternative news sites and disrupt their ability to share information.

http://www.rawstory.com/news/2006/Ra...gers_1016.html
http://www.thenational.ae/article/20...882042198/1002
http://www.atlanticfreepress.com/new...-unveiled.html

Internet trolls, also known as “paid posters” or “paid bloggers,” are increasingly being employed by private corporations as well, often for marketing purposes. In fact, it is a rapidly growing industry.

Trolls use a wide variety of strategies, some of which are unique to the internet, here are just a few:

1) Make outrageous comments designed to distract or frustrate: An Alinsky tactic used to make people emotional, although less effective because of the impersonal nature of the web.

2) Pose as a supporter of the truth, then make comments that discredit the movement: We have seen this even on our own forums — trolls pose as supporters of the Liberty Movement, then post long, incoherent diatribes so as to appear either racist or insane. Here is a live example of this tactic in use on Yahoo! Answers.

The key to this tactic is to make references to common Liberty Movement arguments while at the same time babbling nonsense, so as to make those otherwise valid arguments seem ludicrous by association.

In extreme cases, these “Trojan Horse Trolls” have been known to make posts which incite violence — a technique obviously intended to solidify the false assertions of the notorious MIAC report and other ADL/SPLC publications which purport that constitutionalists should be feared as potential domestic terrorists.

3) Dominate Discussions: Trolls often interject themselves into productive web discussions in order to throw them off course and frustrate the people involved.

4) Prewritten Responses: Many trolls are supplied with a list or database with pre-planned talking points designed as generalized and deceptive responses to honest arguments. 9/11 “debunker” trolls are notorious for this.

5) False Association: This works hand in hand with item #2, by invoking the stereotypes established by the “Trojan Horse Troll.”
For example: calling those against the Federal Reserve “conspiracy theorists” or “lunatics”. Deliberately associating anti-globalist movements with big foot or alien enthusiasts, because of the inherent negative connotations. Using false associations to provoke biases and dissuade people from examining the evidence objectively.

6) False Moderation: Pretending to be the “voice of reason” in an argument with obvious and defined sides in an attempt to move people away from what is clearly true into a “grey area” where the truth becomes “relative.”

7) Straw Man Arguments: A very common technique. The troll will accuse his opposition of subscribing to a certain point of view, even if he does not, and then attacks that point of view. Or, the troll will put words in the mouth of his opposition, and then rebut those specific words. For example: “9/11 truthers say that no planes hit the WTC towers, and that it was all just computer animation. What are they, crazy?”

Sometimes, these strategies are used by average people with serious personality issues. However, if you see someone using these tactics often, or using many of them at the same time, you may be dealing with a paid internet troll.

Government Disinformation Methods

Governments, and the globalists who back them, have immense assets — an almost endless fiat money printing press — and control over most legal and academic institutions. With these advantages, disinformation can be executed on a massive scale. Here are just a handful of the most prominent tactics used by government agencies and private think tanks to guide public opinion, and establish the appearance of consensus:

1) Control The Experts: Most Americans are taught from kindergarten to ignore their instincts for the truth and defer to the “professional class” for all their answers. The problem is that much of the professional class is indoctrinated throughout their college years, many of them molded to support the status quo. Any experts that go against the grain are ostracized by their peers.

2) Control The Data: By controlling the source data of any investigation, be it legal or scientific, the government has the ability to engineer any truth they wish, that is, as long as the people do not care enough to ask for the source data. Two major examples of controlled and hidden source data include; the NIST investigation of the suspicious 9/11 WTC collapses, in which NIST engineers, hired by the government, have kept all source data from their computer models secret, while claiming that the computer models prove the collapses were “natural”. Also, the recent exposure of the CRU Climate Labs and their manipulation of source data in order to fool the public into believing that Global Warming is real, and accepting a world-wide carbon tax. The CRU has refused to release the source data from its experiments for years, and now we know why.

3) Skew The Statistics: This tactic is extremely evident in the Labor Department’s evaluations on unemployment, using such tricks as incorporating ambiguous birth / death ratios into their calculation in order to make it appear as though there are less unemployed people than there really are, or leaving out certain subsections of the population, like those who are unemployed and no longer seeking benefits.

3) Guilt By False Association: Governments faced with an effective opponent will always attempt to demonize that person or group in the eyes of the public. This is often done by associating them with a group or idea that the public already hates. Example: During the last election, they tried to associate Ron Paul supporters with racist groups (and more recently, certain Fox News anchors) in order to deter moderate Democrats from taking an honest look at Congressman Paul’s policies.

4) Manufacture Good News: This falls in with the skewing of statistics, and it also relies heavily on Media cooperation. The economic “Green Shoots” concept is a good example of the combination of government and corporate media interests in order to create an atmosphere of false optimism based on dubious foundations.

5) Controlled Opposition: Men in positions of power have known for centuries the importance of controlled opposition. If a movement rises in opposition to one’s authority, one must usurp that movement’s leadership. If no such movement exists to infiltrate, the establishment will often create a toothless one, in order to fill that social need, and neutralize individuals who might have otherwise taken action themselves.
During the 1960’s and 70’s, the FBI began a secretive program called COINTELPRO. Along with illegal spying on American citizens who were against the Vietnam conflict or in support of the civil rights movement, they also used agents and media sources to pose as supporters of the movement, then purposely created conflict and division, or took control of the direction of the movement altogether. This same tactic has been attempted with the modern Liberty Movement on several levels, but has so far been ineffective in stopping our growth.

The NRA is another good example of controlled opposition, as many gun owners are satisfied that paying their annual NRA dues is tantamount to actively resisting anti-gun legislation; when in fact, the NRA is directly responsible for many of the compromises which result in lost ground on 2nd amendment issues. In this way, gun owners are not only rendered inactive, but actually manipulated into funding the demise of their own cause.

6) False Paradigms: Human beings have a tendency to categorize and label other people and ideas. It is, for better or worse, a fundamental part of how we understand the complexities of the world. This component of human nature, like most any other, can be abused as a powerful tool for social manipulation. By framing a polarized debate according to artificial boundaries, and establishing the two poles of that debate, social engineers can eliminate the perceived possibility of a third alternative. The mainstream media apparatus is the key weapon to this end. The endless creation of dichotomies, and the neat arrangement of ideologies along left/right lines, offers average people a very simple (though hopelessly inaccurate) way of thinking about politics. It forces them to choose a side, usually based solely on emotional or cultural reasons, and often lures them into supporting positions they would otherwise disagree with. It fosters an environment in which beating the other team is more important than ensuring the integrity of your own. Perhaps most importantly, it allows the social engineer to determine what is “fair game” for debate, and what is not.

Alinsky himself wrote: “One acts decisively only in the conviction that all the angels are on one side and all the devils on the other.”
One merely needs to observe a heated debate between a Democrat and a Republican to see how deeply this belief has been ingrained on both sides, and how destructive it is to true intellectual discourse.

Stopping Disinformation

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The best way to disarm disinformation agents is to know their methods inside and out. This gives us the ability to point out exactly what they are doing in detail the moment they try to do it. Immediately exposing a disinformation tactic as it is being used is highly destructive to the person utilizing it. It makes them look foolish, dishonest, and weak for even making the attempt. Internet trolls most especially do not know how to handle their methods being deconstructed right in front of their eyes, and usually fold and run from debate when it occurs.

The truth, is precious. It is sad that there are so many in our society that have lost respect for it; people who have traded in their conscience and their soul for temporary financial comfort while sacrificing the stability and balance of the rest of the country in the process. The human psyche breathes on the air of truth, without it, humanity cannot survive. Without it, the species will collapse in on itself, starving from lack of intellectual and emotional sustenance. Disinformation does not only threaten our insight into the workings of our world; it makes us vulnerable to fear, misunderstanding, and doubt, all things that lead to destruction. It can lead good people to commit terrible atrocities against others, or even against themselves. Without a concerted and organized effort to diffuse mass-produced lies, the future will look bleak indeed.

Iceland, the Mouse that Roared
Szandor Blestman

http://www.silverbearcafe.com/privat...hat-roared.jpgI thought I heard something the other night. It was a distant sound, a low rumbling, a roar from some far off beast that had finally pronounced its presence. It woke me for a second, but it was so distant I felt no threat and simply rolled over and went back to sleep. The next morning I learned that Iceland was taking a stand. It was refusing to pay its British and Dutch debts. It is claiming the debts are a result of fraud, and it's right. They have made the offer to pay some years from now, if they can afford it at that time, and only as a percentage of their GDP. This offer has been, of course, declined by Iceland's creditor banks as they demand payment in the form of real assets.

The Icelanders have grown a pair, so to speak. They are doing something I wish Americans would have done, or will do in the future. They are standing up to the privately owned banks that seem to think they are above the law, that they can change the rules at their whim, and that they alone know what's best for the world, which of course happens to empower them and help their profits. I may not agree with all the politics of Iceland. It might not be the bastion of freedom one looking to get away from intrusive government might run to, but I do admire their stance against the banksters.

Let's examine the situation a little closer. The Icelanders claim that private banks owe the money to other private banks, not taxpayers. The people who own the private banks should be responsible for paying back the creditor banks, not the people of Iceland. I agree wholeheartedly with that assessment. Furthermore, I would take it a step further and make the assertion that any government official voting for any public borrowing that requires payment of public funds for interest be held responsible, or their family be held responsible, should the loans go into default. In other words, these public officials should not be allowed to maintain their fortunes while the common folk are expected to pay for the mistakes they made. Perhaps that would help stop the corruption.

It seems that Iceland was fooled into the same ponzi scheme the rest of the world finds itself in. This all revolves around the fact that money in and of itself has no intrinsic value. It is just paper, for the most part, and in the modern world it is just data floating around in cyberspace. Even metal coins are made from cheap and common metals anymore. The fiat system devised by the central banks are designed to collapse at some point, and it's designed to collapse in such a way that the very few, very rich, very powerful end up with all the marbles. It's not enough to them, it seems, to be at the top of the heap, they have to be so high up and keep the common folk down so low as to be untouchable.

Those that own the banks now hope that they can swoop in and buy up the nation's infrastructure for pennies on the dollar, or in this case aurar on the krona. This is how they operate. They print money based on nothing but debt at negligible cost to themselves, then charge interest on that debt, interest that is never created by the way, and then when the debt can't be repaid they end up acquiring all the real wealth that's been created. It's a brilliant scheme in its simplicity. They end up with all the real wealth and they risk nothing of any real value. I could be wrong, but I think it's safe to say that the Icelanders figured this out when their creditor banks started demanding things like their geothermal power stations and other such publicly owned infrastructure as payment for their defaulted loans. They cried "foul!" - as well they should having played by the rules all this time - and charged that they had been defrauded. They may well have shocked the establishment with their refusal to pay the extortion.

One may well ask, "Is this the fate that awaits all nations?" How many nations in the world today are in the same boat as Iceland? How many are having problems just servicing the interest on their debt? I dare say it would be easier to count the nations that weren't experiencing debt trouble. And one could rightly ask where all the money has gone. Certainly the debt hasn't been put back into the economy to create more wealth. Indeed, I would venture a guess that there's trillions of dollars, euros, yens, pounds, francs, marks, you name it, stashed away in vaults somewhere just waiting for the day when they can be used again, money that should no longer exist that somehow found its way into secret vaults that also shouldn't exist.

It is interesting to note that the biggest banks, the ones that managed to get bailed out by US tax dollars rather than made to liquidate, are intimately connected to the same international bankers who own the central banks across the globe. Indeed, Goldman Sachs seems to have become a "bank of the world," so to speak, as it has its fingers in a little bit of everyone's pies these days. It is also interesting to note that their largest competitors were allowed to fail, effectively setting them up with monopoly privileges. That's how the power banking elite want it, all the money in their hands and all the corporations under their thumb as they monopolize the issuance of currency and credit. Everyone will have to do as they say or they will quickly become bankrupt and destitute. Such is the power of monopoly.
One may well wonder what happens next. The British and Dutch have threatened economic sanctions should the Icelanders fail to fall in line, but is this how we want to treat our brethren? Is this how we want to treat our allies that stood by us in the darkest of times? Do we now just shun people we consider friends simply because they stand up for what they believe is right? Do we go so far as to commit an act of war on such a democratic nation because they recognize a fraud when they see one? This situation should get everyone thinking. The corruption now exposed is so grievous and obvious that we should all realize the time has come to obliterate the current system and deny any power to those who brought this situation to bear.

It is once again time to set up a system of money based on labor instead of debt. We should have a system where free people are able to own property outright, not have to borrow to afford it and then worry that an uncaring bank may come and claim it should one find one´s self in financial trouble. Similarly, it is very disturbing that government can claim private property via eminent domain and non payment of property taxes as if they feel they already own the land you pay for. These wrongs have needed correction for a long time now and hopefully the actions of the Icelanders will help start the ball rolling.

While the Greeks are rioting because they worry their entitlements will be taken away, the Icelanders have been able to take a more direct roll in the political process. The Greeks may well feel they have been left out of the political process, much like many Americans feel at this point in time as we watch the congress blatantly ignore the wishes of the common folk time and again. The bailouts, the wars, the passing of laws violating our rights and the health care bills are all examples of the minority political class ignoring the wishes of the majority to the detriment of society. The Icelanders may have to pay a price for their bravery, but they are finding their way back to freedom and self reliance.

We have been dependent on these banks for far too long and they have taken advantage of it. They have threatened our lawmakers with martial law and economic destruction. They have refused to honor the will of the people and answer questions involving how they´ve spent our money. As I write this, a very few senators, Bob Corker (R-TN), Richard Shelby (R-AL), Chris Dodd (D-CT) and Judd Gregg (R-NH), are working to strip the Audit the Fed amendment from the Financial Reform Bill and give the Federal Reserve even more power. This will assure they will never be held accountable for the wrongs they have done. These senators need to be shown in no uncertain terms that we the people have had enough and will not obey their dictates and whims any longer.

We as a society need to start producing again. We need to start competing with others who wish to produce. This is how wealth is created. The more wealth we create, the more prosperous we all become. For a few decades now, we have tried to maintain our lifestyles with a service economy. It didn´t work. Now the economy is collapsing worldwide. Now the banks are hoarding that which they created and are trying to claim the real wealth that should be owned by private sovereigns. We need to ask ourselves, can we be proactive and stop this before we wake up and find ourselves in the same boat as Iceland? If not, will we simply say no and refuse to pay as they did, or will we allow our society to break down and resort to violence as the Greeks? Don´t let a few politicians on the bankster´s payroll dictate what needs to be done. Demand action now. Roar louder than the Icelanders. Hopefully, we will find justice later. Hopefully, we can avoid the fate of nations that remain on the central banker´s preferred course.

The Video That Will Put Geithner Behind Bars
One Of The Greatest Crimes Ever Perpetrated

By Mike Whitney

March 13, 2010

"Information Clearing House" -- You gotta see this! If this doesn't convince you that the Timothy Geithner knew about the securities shenanigans that were going on at Lehman, than I don't know what will.

Keep in mind, that Geithner ran Lehman through 3 "stress tests" prior to bankruptcy; all of which Lehman failed, and yet, nothing was done. Anton R. Valukas--the examiner who wrote the 2,200 page investigative-report which was released on Thursday-- has provided plenty of information detailing Lehman's “materially misleading” accounting and “actionable balance sheet manipulation.”

In other words, they cooked the books.

Eves Smith at Naked Capitalism sums up what was going on like this:

"Quite a few observers... have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. ....The unraveling isn’t merely implicating Fuld (Lehman CEO) and his recent succession of CFOs, or its accounting firm, Ernst & Young, as might be expected. It also emerges that the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and Sarbox violations....

We We need to demand an immediate release of the e-mails, phone records, and meeting notes from the NY Fed and key Lehman principals regarding the NY Fed’s review of Lehman’s solvency. If, as things appear now, Lehman was allowed by the Fed’s inaction to remain in business, when the Fed should have insisted on a wind-down ..... at a minimum, the NY Fed helped perpetuate a fraud on investors and counterparties.

This pattern further suggests the Fed, which by its charter is tasked to promote the safety and soundness of the banking system, instead, via its collusion with Lehman management, operated to protect particular actors to the detriment of the public at large.

And most important, it says that the NY Fed, and likely Geithner himself, undermined, perhaps even violated, laws designed to protect investors and markets. If so, he is not fit to be Treasury secretary or hold any office related to financial supervision and should resign immediately. (Naked Capitalism)

Repeat: "Accounting fraud", "collusion", "aiding and abetting." These are serious charges by a usually restrained blogger.

And this is from Zero Hedge:

"Lehman has become merely the latest example of all that is broken with today's crony capitalist system.... The evident conclusion is that the core driver of modern capitalist society is fraud at its very core, and nothing short of a massive revolutionary overhaul of the political system, which is the number one defender .. of very lucrative bribes and kickbacks originating from the same rotten Wall Street that (is) nothing but a sham filled with toxic assets" Zero Hedge

This story isn't going away. Someone has to go to jail. It's clear that Geithner acted as the "chief facilitator" of industrial scale securities flim-flam which led directly to the Great Crash of '08. He needs to be held accountable for his actions.

Next Leg for the Euro: Down

by Bryan Rich 03-20-10

There are two major issues facing global currencies in the months ahead. And both have escalated in the past week.
Issue #1: The Greek Drama
Act I:
Sovereign debt fears
In the first act of the euro-zone sovereign debt shock, shaky Greek government finances exposed the structural flaws of the euro. And as the lens of scrutiny widened, the potential domino effect of weak euro-zone countries combined to represent a viable threat to the future existence of the euro.
I called attention to this vulnerability back in early January in my piece, Will the Euro Become the Most Hated Currency for 2010? Since then, the euro plunged another 6 percent against the dollar and the outlook has grown increasingly tenuous.
Intermission:
Bail out?
But in came talks of a bail out. And that marked a timeout for the massive speculative selling pressure against the euro. Euro-zone leaders gathered and emerged with a promise of support for its flagging member country, Greece. But the implications of such a decision would bring with it an irreparable moral hazard. If Greece could be bailed out, that opens the floodgates for the other weak countries in the euro zone to come looking for support from their more fiscally responsible neighbors.

Now, with increasing signs that no concrete form of financial aid will be offered to Greece, the sovereign debt problems weighing on the euro currency are approaching Act II.
Act II:
The realization of a no-win situation for the euro …
A bail out of a fellow Economic and Monetary Union (EMU) member country is a direct violation of rules set forth in the Stability and Growth Pact, the principles upon which the euro was built. And that’s why euro-zone leadership has been slow to provide details of their proposed support.
But this past week, Greek Prime Minister Papandreou turned up the heat. He asked for a definitive decision on aid from Europe to come by next week. His bargaining chip: IFM aid. If the euro zone is not prepared to step in with financial aid, he’ll turn to the IMF. And a turn to the IMF represents a further credibility hit for the European monetary union … i.e. the structure of the euro is flawed, its rules are unenforceable and solidarity isn’t possible.
And with an official deadline for speculators to lean on, this coming week could bring with it the catalyst for the next big leg down in the euro.
Take a look at this chart …

http://images.moneyandmarkets.com/1665/chart.gif

Source: Bloomberg

The euro had a false break from the four-month bear channel, but now is on track to test the lower line of this channel, which projects a test of the 2009 lows of 1.2457 by the end of April. Coincidentally, Greece will have to come up with 14 billion dollars in fresh capital to refinance maturing government debt by that time.
And as I laid out in my February 20th Money and Markets column, The Future of the Euro in Question, expect the intense scrutiny surrounding the lifespan of the euro to continue.
The EMU countries with damaged balance sheets and a bleak outlook for growth are stuck. With a one-size fits all monetary policy and currency, they lack critical tools to work their way out.
Issue #2: China’s Currency
While a sovereign debt crisis will likely be potent enough to knock global recovery off track, the most severe threat to the global economy remains China’s currency, as I discussed in my February 27th column, Why You Should Be Worried About China.
And the issue with China’s currency heated up this week.
With the healthcare debacle in Washington death-spiraling favorability polls, it became time to pull out the China card again.
http://images.moneyandmarkets.com/1665/senators.jpg Senators Schumer and Graham are spearheading efforts to force China to revalue its currency. Last week Congress resurrected threats against China’s currency policy. In 2005, Senators Graham and Schumer, lobbied a bill which threatened a 27.5 percent tariff on Chinese imports, unless China revalued its currency. Now the two Senators are spearheading new rules for the way the U.S. Treasury manages currency manipulators and proposes tougher consequences.
Tougher Talk … More Resistance
In 2005, the global economy was humming along, and China had a lot to lose by not showing some concession. Today, times are different. Global demand is weak and China’s major trading partners are dealing with sluggish growth. And despite the assertions of China’s emerging domestic demand, China has built its economic model on exports. So, in tough times, disabling their trade advantage through a currency revaluation is not likely.

That’s why I’ve been expecting China’s currency policy to be the biggest threat to global economy recovery — fueling protectionism and damaging the global economy (see my September piece Protectionism: Enemy of Recovery for more details).
Overall, the issues with sovereign debt and global imbalances, fueled by China’s weak currency, present a big challenge for the global economy. That’s why I expect a sustained risk aversion to be the dominant theme of 2010.
Regards,
Bryan

Has Germany just killed the dream of a European superstate?

So after weeks of Euro-bluff it looks ever more like an IMF rescue for Greece after all, and hence for any other eurozone nation driven to ruin by the wrong monetary policy.



By Ambrose Evans-Pritchard
Published: 7:29PM GMT 21 Mar 2010


http://i.telegraph.co.uk/telegraph/m...7_1600862c.jpg German Chancellor Angela Merkel has little hope of selling a bail-out of Greece to German voters


German and Dutch leaders have concluded in the nick of time that they cannot defy the will of their sovereign parliaments by propping up a country that lied about its deficits, or risk court defeats by breaching the no-bail-out clause in Article 125 of the EU Treaties.

Chancellor Angela Merkel has halted at the Rubicon. So has Dutch premier Jan Peter Balkenende, as well he might in charge of a broken government facing elections in a country where far-right leader Geert Wilders is the second political force, and where the Tweede Kamer has categorically blocked loans for Greece.

The failure of EU leaders to cobble together a plausible bail-out – if that is what occurs at this week’s Brussels summit – is a 'game-changer' in market parlance. Eurogroup chair Jean-Claude Juncker said last month that such an outcome would shatter the credibility of monetary union. It certainly shatters many assumptions.

There will be no inevitable move to fiscal federalism; no EU treasury or economic government; no debt union. It is Stalingrad for the federalist camp and the institutions of the permanent EU government.

I remember hearing Joschka Fischer, then German Vice-Chancellor, telling Euro-MPs a decade ago that EMU was “a quantum leap ... creating an inexorable federal logic”. Such views were in vogue then.

Any euro crisis would force Europe to create the necessary machinery to make it work, acting as a catalyst for full-fledged union. Yet the moment of truth has come. There is no quantum leap. We have a Merkel pirouette.

Paris is watching nervously. As Le Monde put it last week, “behind the question of aid to Greece is a France-Germany match that pitches two conceptions of Europe against each other.” The game is not going well for 'Les Bleus’. The whole point of the euro for the Quai D’Orsay was to lock Germany into economic fusion. Instead we have fission.

EU leaders may yet rustle up a rescue package that keeps the IMF at bay, but alliances are shifting fast. Even Italy has slipped into the pro-IMF camp, knowing that rescue costs can be shifted on to the US, Japan, Britain, Russia, China, and the Saudis, lessening the burden for Rome.

Besides, too much has been said over the last week that cannot be unsaid. Mrs Merkel’s speech to the Bundestag was epochal, a defiant warning that henceforth Germany would pursue the German national interest in EU affairs, capped by her call for treaty changes to allow the expulsion of fiscal sinners from Euroland. Nothing seems so permanent about the euro any more.

Days later, Thilo Sarrazin from the Bundesbank blurted out that if Greece cannot pay its bills “it should do what every debtor has to do and file for insolvency. This would be a suitably frightening example for every other potentially unsound state,” he said, pointedly excluding France from the list of sound countries.

Dr Sarrazin should be locked up in a Frankfurt Sanatorium. It was such flippancy that led to the Lehman disaster, requiring state rescues of half the world’s financial system. A Greek default would alone be twice the size of the combined defaults by Argentina and Russia. Contagion across Club Med would instantly set off a second banking crisis.

Some suspect that ultra-hawks in Germany want to bring the EMU crisis to a head, deeming delay to be the greater danger. How else to interpret last week’s speech by Jürgen Stark, Germany’s man at the European Central Bank, calling for tightening to head off inflation.

This is alarming. Core inflation in Euroland was 0.9pc in February, the lowest since the data series began. It is certain to fall further as the doubling of oil prices fades from the base effect. M3 money has been contracting for a year. Business credit is shrinking at a 2.7pc rate.

So, it is not enough for the EU to impose a fiscal squeeze of 10pc of GDP on Greece, 8pc on Spain, and 6pc on Portugal, and 5pc on France over three years, we need a dose of 1930s monetary policy as well to make sure life is Hell for everybody.

Be that as it may, Greece’s George Papandreou says his country is in the worst of both worlds, suffering IMF-style austerity without receiving IMF money – which comes cheap at around 3.25pc. So why allow his country to be used as a “guinea pig” – as he put it - by EU factions pursuing conflicting agendas?

The IMF option has its limits too. The maximum ever lent by the Fund is 12 times quota, or €15bn for Greece, not enough to nurse the country through to June. The standard IMF cure of devaluation is blocked by euro membership. So Greece will have to sweat it out with a public debt spiralling to 135pc of GDP next year, stuck in slump with no exit route.

The deeper truth that few care to face is that under the current EMU structure Berlin will have to do for Greece and Club Med what it has done for East Germany, pay vast subsidies for decades. Events of the last week have made it clear that no such money will ever be forthcoming.

Let me be clear. I do not blame Greece, Ireland, Italy, or Spain for what has happened. No central bank could have tried more heroically than the Banco d’España to counter the effects of negative real interest rates, but the macro-policy error of monetary union washed over its efforts.

Nor do I blame Germany, which generously agreed to give up the D-Mark to keep the political peace. It was the price that France demanded in exchange for tolerating reunification after the Berlin Wall came down.

I blame the EU elites that charged ahead with this project for the wrong reasons – some cynically, mostly out of Hegelian absolutism – ignoring the economic anthropology of Europe and the rules of basic common sense. They must answer for a depression.