FROM MONEY AND MARKETS EMAIL 10/4/08

The Euro and British Pound Come Down to Earth by Jack Crooks Don't look now, but the Eurozone and England are in big trouble. Actually, you do need to look now because there's no point in turning your head away from what's driving global financial markets and more importantly ... currencies. It's almost as if U.S. Treasury Secretary Hank Paulson bailed out Europe and the United Kingdom. How? Whether or not his plan works to restore confidence in the U.S. financial system, this controversial $700-billion proposal he's been trying to push through Congress is sucking up so much attention from the markets that developments on the other side of the Atlantic are going relatively unnoticed. Currency investors, however, aren't shrugging off the revelations. That's why both the euro and the British pound bowed at the feet of the dollar again this week. For the euro, the correction didn't last long. It plummeted through a key low established within the last month. The above chart doesn't bode well for the euro by any means. My next target is a key level of support just north of 13300. As for the pound, it did behave much better. On a daily basis, it still sits above the key low established a few weeks ago. But by the looks of this chart, a weekly view, the pound should still be in for some major steps lower. I'm eyeing 17150 as the first target, and then 15750 after that. The way things are shaping up (or perhaps I should say shaping "down") it's not a far stretch by any means. Fundamentals Across the Atlantic Point Straight Down Within the last week or so the market got a good glimpse of the situation in the European credit markets. And let me tell you, it's far more sobering than most expected. It's clear that now, this crisis is no longer just about the economy or the stock market or even your investments. The game is changing. Investors worldwide are realizing that the government's latest attempt at a bailout is simply too little, too late — and that this great crisis is about to affect each one of us at a very personal level. The most noticeable problem is that banks are leveraged up on loans to an extent that easily exceeds the leverage of at-risk banks in the United States. In layman's terms, the amount in loans makes up too great a portion of the amount of deposits coming into banks. And there's where the biggest worry lies. It's sparking all kinds of action among European central banks and governments: More than 11 billion euros were pumped into Fortis SA this week thanks to Belgium, the Netherlands and Luxembourg. Belgium also teamed up with France in providing more than 6 billion euros to Dexia SA. Germany helped out Hypo Real Estate with a loan guarantee. Ireland also stirred the pot in saying it would guarantee 400 billion euros of deposits and debts belonging to its domestic banks for a period of two years. Throw into the mix Iceland's little bailout of Glitner Bank and you can see the type of havoc this stuff can wreak on a currency. Government bonds, in reaction to the 600 billion euros thrown into a 75% stake of Glitner, are now rated below investment grade. The Icelandic krona ... well ... let me just say it's seen better days. The last time the value of the krona was as low as it is today ... 2001. The Iceland krona (and other emerging/developing European nation currencies) has been crushed relative to the U.S. dollar because of the credit crunch in Europe, as you can see in the chart below: Simply put: lending is screwed up, down, left and right. If you manage to get funds, then you're paying up for them. But in most cases, parties aren't even able to get funds because their counterparts are unwilling to lend. The rate which European banks charge one another on three-month loans (Euribor) jumped to its highest level ever this week. Libor, the three-month rate at which foreign banks can borrow U.S. dollars, surged again and remains at the highest levels since January. The European Central Bank is pumping money, too. The latest auction of $50 billion worth of three-day loans comes on the heels of billions of dollars auctioned off earlier in the week. That's not to mention the additional money shoved through auctions in the weeks prior. The worst part of all this is that it pretty much isn't working to lubricate the gears of the lending system. Apparently banks are funneling cash back into the ECB's deposit facilities. So far more than 100 billion euros have supposedly been dumped back into the ECB because banks are fearful of stashing it anywhere else ... Boy, oh boy, it's ugly out there. The Battle of Britain Just so they're not left sitting at home while the bailout party rages on, the U.K. government seized the country's biggest lender to landlords, Bradford & Bingley Plc. They also lent a hand in rescuing HBOS Plc. The Bank of England then auctioned $30 billion worth of one-week funds and $10 billion worth of overnight loans. Earlier in the week they pumped emergency funds into money markets. And if that wasn't enough (as seems to be the case with all lending assistance these days), the Bank of England widen the collateral they would except for three-month loans to banks. If you have some decent securities tied to corporate bonds, or perhaps some top-notch Asset-Back Commercial Paper, then you are in luck — you can dump that stuff on the BOE and come away with a loan. It's easy to see credit markets are not functioning. And the U.K. economy is paying for it. For the month of September, a gauge of U.K. manufacturing fell at its fastest pace since record-keeping of such data began in 1992. A stagnating services sector in the three months ending in July added to the pain. House prices fell 3.9% in the second quarter, in case the housing situation wasn't already bad enough. What this hideously awful combination of economic fundamentals and a dysfunctional lending system creates is a renewed call for interest rate cuts for the European Central Bank and the Bank of England. Narrowing Yield Differentials on Our Minds Analysts across the board jumped at the chance this week to proclaim their monetary policy predictions. These beacons of light expect both the European Central Bank and the Bank of England will cut interest rates before year-end. The ECB concluded a meeting just this week where they stood pat on rates — though Jean-Calude Trichet, ECB President, did discuss the potential for reducing borrowing costs. This is a big deal for the financial media since Trichet has been sticking to his guns in fighting and preventing further inflation. The Bank of England, on the other hand, meets this coming week and many see a rate cut at the meeting as inevitable. I'm not so sure because often reality throws analysts' predictions right back in their faces. I will say, though, that the Bank of England has surprised me thus far. They've not budged in the face of economic deterioration. But I don't think they can hold the line much longer. The risks for either of these central banks are huge. And what that will do is surely undermine their respective currencies. But regardless of the outcomes at the monetary policy meetings that wrap up the year, the currency markets understand the conditions across Europe and are already reacting ... and fast. Best wishes, Jack

RON PAUL VIDEO ON THE ECONOMIC COLLAPSE...CURRENT

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MORE NOURIEL ROUBINI TODAY OCT 3, 2008 THE RISK OF THE MOTHER OF ALL BANK RUNS

Nouriel Roubini's Global EconoMonitor Financial and Corporate System is in Cardiac Arrest: The Risk of the Mother of All Bank Runs Nouriel Roubini | Oct 3, 2008 It is now clear that the US financial system - and now even the system of financing of the corporate sector - is now in cardiac arrest and at a risk of a systemic financial meltdown. I don’t use these words lightly but at this point we have reached the final 12th step of my February paper on “The Risk of a Systemic Financial Meltdown: 12 Steps to a Financial Disaster” (Step 9 or the collapse of the major broker dealers has already widely occurred). http://www.rgemonitor.com/blog/roubini/253853/financial_and_corporate_system_is_in_cardiac_arrest_the_risk_of_the_mother_of_all_bank_runs

NOURIEL ROUBINI..THE SMARTEST ECONOMIST AROUND

Nouriel Roubini's Global EconoMonitor Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefitting only the Shareholders and Unsecured Creditors of Banks Nouriel Roubini | Sep 28, 2008 http://www.rgemonitor.com/roubini-monitor/253783/is_purchasing_700_billion_of_toxic_assets_the_best_way_to_recapitalize_the_financial_system_no_it_is_rather_a_disgrace_and_rip-off_benefitting_only_the_shareholders_and_unsecured_creditors_of_banks

LATEST BOB CHAPMAN ARTICLE 10/1/08 YOU SURE BETTER READ THIS ONE FOLKS!

The Bailout Wont Work and the System Will Implode The Paulson Plan means you are going to eat it all, Paulson wants to keep the corrupt greed machine going, A Wall Street Bailout plan means you will pay for their mistakes, Administration trying to scare everyone into accepting bailout plan, Buyouts now like zombie marriages, derivative Death-Star on its way Oh, we must help the poor sheople by easing the credit-crunch so they can get more loans and get deeper into hock (like more loans is what they somehow need), and so their savings accounts and pensions plans can be saved as we hyperinflate the dollar. Oh, we are sooooo concerned about the welfare of the poor, helpless sheople! We have to save them from destroying themselves, because only we, the masters of the universe, know what is best for them. (Judy, get the barf-bag - quick!) You just don't understand. The corrupt, graft-laden, insider-trading-saturated, fraud-based, Ponzi-scheming system that we have used to rip you off and steal you blind for over a century must obviously be saved so we can keep screwing you ad infinitum. After all, isn't that what sheople are for, to be fleeced and sheered, fattened and slaughtered? You know your place. You are all bleating, ignorant sheople, so come lick our boots - and give us the damned money!!! Oh, there, there, now. We're sorry to take such an imperious tone with you. There, there, just give in to our demands like good little sheople and, in time, everything will turn out juuuuust fine --- NOT! http://theinternationalforecaster.com/International_Forecaster_Weekly/The_Bailout_Wont_Work_and_the_System_Will_Implode

HOUSE PASSES BAIL OUT BILL

NEW YORK TIMES By DAVID M. HERSZENHORN Published: October 3, 2008 WASHINGTON — The House of Representatives gave final approval on Friday to the $700 billion bailout for the financial system, reversing course to authorize what may be the most expensive government intervention in history. http://www.nytimes.com/2008/10/04/business/economy/04bailout.html?_r=1&hp&oref=slogin

MORE STIMULUS CHECKS?

Treasury Distributes 1.147 Million Additional Stimulus Checks in September Washington, DC--The Treasury Department announced today that it distributed 1.147 million stimulus payments, totaling $672 million in the month of September. As of the end of September, a total of 115.957 million payments have been distributed totaling $94.061 billion since disbursements started April 28. While mass disbursement of stimulus checks ended July 11, small batches of payments continue to be sent out to American households. The Treasury Department will announce updates monthly until the end of the year. The Treasury Department also reminds Americans, especially those seniors and veterans who do not normally file a tax return, to file a return by the October 15th filing deadline to receive a stimulus payment this year.

NON FARM PAYROLL REPORT

Payrolls fall by 159,000 in September Job losses worst in 5 years; unemployment rate is steady at 6.1% By Rex Nutting, MarketWatch Last update: 8:31 a.m. EDT Oct. 3, 2008 Comments: 4 WASHINGTON (MarketWatch) - U.S. employment fell by 159,000 in September, the worst job losses since March 2003, the Labor Department reported Friday. The unemployment rate was steady at 6.1% as expected, the government said. An alternative measure of unemployment that includes discouraged workers rose from 10.7% to 11%, the highest since April 1994. The economy has now lost 760,000 jobs this year, further evidence that the economy was in a recession even before the financial market crisis of the past few weeks. Job losses in September were worse than expected and double the average monthly loss this year. Economists surveyed by MarketWatch were forecasting payrolls to fall 110,000. See Economic Calendar.

4:26AM PDST GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: Nonfarm payrolls Unemployment rate Average hourly wages ISM services Please see my comment under this morning's first chart. Watched the first question and both answers of the VP Debate and turned it off. It was as painful as listening to the happy voice lady that greets you when you call a company and get the voice recognition system or the phone tree. I can't spend any more precious minutes of my remaining days of this life polluting my brain with this concocted propaganda. It goes on 24/7 now. You can't escape it. TV,radio, billboards, people waving signs in front of businesses in costumes. Hell, if you go in the woods to fish, I expect to see adverts painted on the side of the trout pretty soon. 1984 is here. Brave New World is here. Brazil, the movie (great flick) is here. Surviving this bullshit is only a part of the task now. Getting any personal value and reward is the BIG TASK. And that can only be done by you, by reading and experiencing AND THEN SHARING WITH OTHERS what you know for sure, with NO EXPECTATION that they will "get it", as they have to find their personal rewards on their own, in the same way. It's called EVOLUTION OF MAN. Anyway, I take this opportunity to share my morning brilliance with you. If it stimulates your mind and jerks you out of the trance that the PROPAGANDA has you in...I will be satisfied. This should be an interesting Friday, as over the weekend, Europe is considering their own BAIL OUT PACKAGE. (see JSMINESET.COM for more). There are so many things happening in rapid succession that it's hard to discuss them all coherently even if you can see clearly what is occurring, and understand why it's happening. I hate the "deck chairs on the Titanic" metaphor, but as I listen to and watch the CNBC JABBERWOCKIES blabber and spew whatever stupid thought is on the tip of their fragile minds, I saw this "DELEVERAGING", (HAHAHA, what a stupid word) of companies as they merge BUILDINGS, as being nothing more than the reorganization of the OVER STUFFED LAZY BOY CHAIRS on the deck of the sinking U.S.S. GEORGE W. BUSH "I AM A TRAITOR". These companies are merely CONSOLIDATING the PHYSICAL REMAINS of their companies to later be stuffed with more serf employees who will once again buy their companies' stock, and then lose it all again, plus their jobs, in the next financial collapse. Because these fools NEVER LEARN. They just do the same dumb shit again and again. And we pay for it whether through losing our investments in their schemes, or by having the Guv'mint reach into our pockets through INFLATION when they bail their pals out after the scheme fails or is found out. Enough...this whole thing is just too big a case of MASS STUPIDITY! And unfortunately, IT IS GOING TO BE FATAL FOR MANY, MANY OF US!

JIM SINCLAIR COMMENTS

Posted On: Thursday, October 02, 2008, 4:10:00 PM EST Europe Next To Take Hit In Worldwide Financial Crisis Author: Monty Guild Dear CIGAs, THIS WEEKEND WILL BE BRUTAL FOR EUROPE and the World We must understand that Europe will be in the news now about their banking crisis as their financial system along with those of the rest of the world begin to disintegrate. Europe has been blaming the US for their problems, yet they are at least as bad and will now come to light. Please continue to protect yourselves and listen to wise people like Jim Sinclair. Note the article below: France, Germany clash on financial rescue Wed, 01 Oct 2008 17:50:27 GMT By Huw Jones and Paul Taylor BRUSSELS, Oct 1 (Reuters) - France and Germany were at loggerheads on Wednesday over the idea of a U.S.-style financial rescue fund for Europe as EU governments went their separate ways in response to the global credit crisis. The European Commission appealed for more consistency in deposit guarantee schemes and stronger pan-European financial supervision, but the apparent discord between Paris and Berlin underlined the difficulty of finding a common approach. French Finance Minister Christine Lagarde said in a German newspaper interview that a "European safety net" could be needed to prevent a bank in a smaller EU country from going bankrupt. But Chancellor Angela Merkel said Germany "cannot and will not issue a blank cheque for all banks, regardless of whether they behave in a responsible manner or not". A European government source said Paris had floated the idea of a 300 billion euro ($425 billion) EU rescue fund ahead of a meeting of leaders of the four big European powers and top EU officials tentatively set for Saturday in Paris. But Lagarde told reporters: "There is no such thing. There is nothing of the sort," when asked about the report. The German Finance Ministry said: "The government completely disagrees with these plans." European Commission President Jose Manuel Barroso said he was working closely with French President Nicolas Sarkozy to present proposals to the leaders in Paris. http://www.forexyard.com/reuters/popup_reuters.php?action=2008-10-01T175027Z_01_L151927_RTRIDST_0_FINANCIAL-EU-WRAPUP-3 OR GO DIRECTLY TO JSMINESET.COM FOR THE LINK AT THE END OF THE EXCERPT.

JIM SINCLAIR COMMENTS AND A WARNING

Posted On: Thursday, October 02, 2008, 12:09:00 PM EST Protecting Your Financial Self - An Addition Author: Jim Sinclair Dear CIGAs, I have no doubt that $1650 will come. My concern is not that it will not happen, but that I am much too conservative in my long-term price objective since 2000. If major banks can be torn apart how can we have faith in the small local institutions that hold most of your ready cash? When I said “This is IT,” it is not something that I take lightly. Never in 49 years in finance have I seen a set of circumstances so challenging to the man in the street. What I am getting at is a simple question. Are you prepared? You have heard us talk repeatedly on removing financial intermediaries between you and your assets, but the time has come for us to recommend going one step further: Hold enough cash at your household to last you a month or two. It may be largely unnecessary for the majority, but what do you have to lose? If your bank should fail this will save you a lot of grief in the short term. If they do not, you still have all your cash that can easily be deposited back into your account. Regards, Jim Posted On: Thursday, October 02, 2008, 12:08:00 PM EST A Modern Day Weimar Author: Jim Sinclair Dear Extend Family, Unless the LIBOR rate drops sharply we are facing a planetary financial crisis next week. For God's sake protect yourself. Gold and gold related items will be the only true storehouses of wealth. The bailout bill is powerless to reverse what is now happening. This is a modern day Weimar happening right before our eyes. Respectfully yours, Jim

4:44AM PDST GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: Jobless claims Factory orders Gold slips lower overnite falling below the Major Uptrend Channel's bottom line. Euro sinks almost to previous lows at 1.3864 as Europe has worse problems than we do at the moment. These markets represent the actions of people who understand nothing about the crisis we are ALL in and who are reacting "in the moment" to each bit of State Propaganda from their individual nations, and especially our crooked leaders whose economy affects all others. Knowing what we know about gold's part in all of this makes us disappointed that THE WORLD isn't fully aware of the calamity that is unfolding all around us much as carbon monoxide slowly fills a room and kills you while you are growing sleepier from its presence. Just maintain your faith in gold and what it represents. This is the period where vast amounts of gold and other assets are trading hands out of sight of the masses, where the ELITES are filling their coffers with gold and the stocks of major entities, so that eventually they will be the new owners of the World's resources and assets. History never changes its ultimate course of separating fools from their assets. Ultimately, it appears the goal in life seems to be just to survive it for as long as it is rewarding to your body. It never turns out like you expect or plan for it to turn out.

OLIVER GARRET OF CASEY RESEARCH

A HORRIBLE MESS, AND HOW WE GOT THERE by Olivier Garret No one will deny that last week was one of the most tumultuous in history. The streets red with blood...the bodies of the dead and dying strewn about where they fell. You already know the names: Lehman, Merrill, AIG. Fannie and Freddie. But none of this happened by accident. The warning signs have been all around us for years. Bud Conrad, chief economist at Casey Research, wrote about the beginnings of our current problems back in March of 2007...before most people were even aware of the storms brewing just over the horizon. “Faced with historic levels of debt, falling housing prices, and weaker economy, the pressure on housing would gain momentum as desperate homeowners either hand their keys back to the banks, or simply hit the bid on the best (low) offer they can get. A vicious cycle would set in, threatening to shove the economy into uncharted and unpredictable waters. “The impending calamity – mass housing foreclosures, failing banks, Fannie Mae and Freddie Mac in ashes, millions of personal bankruptcies – is so dire...most people can’t even conceive of it. And indeed, it may not hit us this year, or next, but the market always corrects itself, and this time will be no exception – sooner or later... That’s why the coming crisis is so predictable: there’s no way to avoid it.” I actually wish that his analysis had been flawed. I also wish that the government officials had been right who have consistently claimed since then that the subprime crisis was contained and the markets would rebound in the second half of the year. Unfortunately, this is not the case. The Fed’s recent attempts at quick fixes have not worked, and current events are reinforcing what Bud Conrad prognosticated almost two years ago: that this is much more than a normal cyclical correction. This is a disaster of biblical proportions. As the Fed and the Treasury continue to intervene in the market, they continue to lose ground and credibility, caught between a sharp recession and strong inflationary pressures. In an effort to bail out the financial sector, they have no choice but to start injecting hundreds of billions in liquidity into a contracting market place. This will contribute to the creation of a stagflation period that will make the ’70s look like a tea party. The Fed’s never-ending injection of liquidity into the market has, and will continue to, devalue the dollar. Ordinarily, a country threatened with currency collapse would lean toward tight money, perhaps contracting its domestic money supply. That would push interest rates upward and compensate foreigners for holding on to the currency despite the depreciation risk. And it would soften that risk. But this time, things aren’t ordinary...there is a difference that has turned what might otherwise be a disturbance into a disaster: the U.S. economy’s inability to endure high interest rates. Because of the corrections taking place now in the grossly distorted U.S. housing, commercial real estate, and personal credit markets, raising interest rates to protect the dollar would prove as calamitous as not raising interest rates. The housing bubble fueled a blockbuster business in first mortgages, and then home equity loans. Homeowners drew down their equity to splurge on consumer goods, including shiploads of imports. The relative attractiveness of U.S. financial instruments kept the game going into overtime. The foreigners who received all those U.S. dollars put them back into U.S. Treasury bills and other dollar-denominated instruments, thereby underwriting low interest rates for all U.S. borrowers. The net result? Foreigners funded our housing boom. The amount of mortgage growth annually matched the amount of trade deficit, which foreigners dutifully invested back into the U.S. And subprime lending was no mere sideshow. It was big business. In 2005, it accounted for 25% of all new mortgages – about $600 billion of high-risk paper, most of it with adjustable interest rates. The collapse of the subprime market soon spread into other mortgage sectors...and the derivatives created on top of all those subprime mortgages made everything much worse. Given that the annual GDP of the U.S. economy is just $13 trillion, the $250 trillion in derivatives should have been seen as an accident waiting to happen. Foreign reinvestment is part of the system of U.S. debt, and we are already seeing a significant impact. As foreign investors watched the collapse of the U.S. housing markets, and the relative values of their debts began to sink, they quickly moved out of U.S. debt, particularly Fannie/Freddie obligations. This massive exodus of foreign cash out of the debt of Fannie/Freddie prompted the biggest stock market fall since the days just after 9/11. On September 15, 2008, Treasury Secretary Paulson injected the biggest amount of daily liquidity since 2001, a whopping $70 billion in just one day. And now the government is proposing an additional infusion of approximately $1 trillion. More than the total cost of the Iraq War. To put this amount into perspective: if you had spent $1,000,000 a day, from the birth of Christ until today, you would have only spent about 732 billion dollars. It’s going to be interesting to see what happens to our markets if that proposal goes through. Regards, Oliver Garret for The Daily Reckoning

MOGAMBO GURU MONDAY 9/29/08

The Daily Reckoning PRESENTS: We all know that the U.S. dollar has been on a steady decline since it was removed from the gold standard. So what would happen if one of the world’s fastest moving countries suddenly used gold to back their money? The Mighty Mogambo investigates... THE WORLD’S MOST POWERFUL CURRENCY? by The Mogambo Guru The economic slowdown has been characterized as “consumers are de-leveraging”, which is an interesting turn of phrase that means that people are not borrowing money to spend. The importance is dependent on your perspective. Those people who are not borrowing money to spend are thus suffering the pangs of a lowering of their lifestyle, which depended on borrowing money to spend; and then they come around, whining about stupid things like, “Daddy, things have gone up so much in price that I need more money, which you would give me if you loved me. Don’t you love me? I love you! Won’t you please love me, daddy?” And so I ask, “Can’t you love me if I don’t give you any money?” and they say, “No. You could borrow the money, and then we would love you”, and I reply, “I have been borrowing money and now I can’t pay them back” and so the kids say, “Then borrow some more!” And, in a terrifying revelation, I realized that it is not only my children, but all the rest of the economy that is totally dependent on everybody else borrowing money to spend, too. So now you see how Chaos Theory was right, and that all things are connected to all things? If not, then pay attention to how they will now commence to all drag each other down into the Nightmarish Hell Of Inflationary Insolvency (NHOII). And it doesn’t take a real genius to see why, but the point is not that the American people were stupid enough to think they could get a perpetual free lunch by borrowing money to pay for it, or even that a smaller subset of those who are suffering the pangs of a lowering of their lifestyle is composed of those who also think that they can call me on the phone and either 1.) Ask to borrow some money from me, or 2.) Ask me to pay them back the money I borrowed from them. My response is the same, in that I give neither one of them any money because I don’t have any money; so to one I laugh in scorn, and to the other I say that I have just put a check in the mail to them, and that they will get their money soon, and if it hasn’t arrived in a few months, call me back and I’ll write you a new check and get it right into the mail. The point is that a much larger subset of those who are suffering the pangs of a lowering of their lifestyle is composed of those people who think that they can elect government representatives who legislate all problems out of existence, that will tax me and then give the money to them, or the Federal Reserve will create more money to loan to investors with which to buy government debt so that the government can spend, spend, spend us into blessed Utopia. Either way, it’s Bad, Bad News (BBN). And, alas, one way or the other, they are right. Unfortunately. And that is one reason that I weep, alone, in the Mogambo Bunker Of Bunkers (MBOB), doors locked, radio blaring, machine guns cocked and loaded, mostly drunk or nearly so, soon to be blissfully comatose. Another reason that I cry so piteously and drink so abusively is that all this new government borrowing will create so much new money that it will destroy the dollar’s buying power, taking my own country down with it. The only reason that I stop bawling like a little crybaby is the knowledge that the people who own gold, silver and oil will get rich, rich, rich, and since I own gold, then people will want me to loan them a few bucks out of my huge stacks of money because they are starving, and their children are starving, and I will say “No!”, and it will be thin gruel indeed for them to hear my mocking voice again echoing in their heads, “Buy gold, silver and oil, you morons, because your stupid government is letting a private bank (that misleadingly calls itself the Federal Reserve when it is, in fact, neither) to create so damned much fiat money that it will produce catastrophic inflation in consumer prices that will destroy the country, just like it has done to every other stupid country in the last 4,000 years that let its stupid government increase a fiat money supply at its whim! Hahahaha! Now you see why I always said you were freaking doomed! Hahaha!” But I feel terrible, as this constant infliction of inflationary pain by heedless expansion of the money supply is so unnecessary, and that is why I was pleasantly surprised to read in the Wall Street Journal the headline “Central Banks Consider Gold” in its Commodities Reports column. The reason is easy to see if you read the article backwards, in that there was a question about central bank buying “last week, when gold saw a record single-day gain”, especially Chinese central bank buying of gold, which is already the ninth-largest holder of gold in the world but which holds only 1% of its foreign-exchange reserves in gold, although it actually said it would like to hold more. And Mark O’Byrne at Gold & Silver Investments says that he would “be surprised if the Chinese hadn’t been nibbling at the gold market,”, which leads to the news that Asian banks “are seen as keen buyers” of gold, which leads to the news that “other central banks are now far more likely to be holders of gold”, which leads us back to the second paragraph that “Turbulence in the financial markets and recent U.S. dollar weakness are helping the precious metal claw back its reputation as the central monetary anchor within the international monetary framework”, which leads to the opening paragraph of “Central banks may be starting to turn one of the few assets in which they can invest; gold.” In short, those crafty Chinese, a fifth of the world’s population, may be getting ready to issue a gold-standard money, which will instantly make their currency the strongest in the world, which is just what a country needs if it wants to import a lot of things cheaply so as to respond to demand for internal economic growth without stoking inflation in prices! And, fortunately for those of us who both love to have large profits handed to us and who also own gold, a Chinese gold-standard may soon make a dream come true as gold would skyrocket when priced in suddenly depreciated dollars. Whee! This investing stuff is easy! Until next time, The Mogambo Guru for The Daily Reckoning

FROM THE DAILY RECKONING MONDAY 9/29/08

“We must regulate,” says Dominique Strauss-Kahn, director of the IMF (perhaps forgetting that Fortis was regulated by hundreds of bureaucrats in dozens of different countries....). “The time has come to save capitalism from the capitalists,” writes Luigi Zingales of the University of Chicago. Thank God for the bureaucrats. The economists. The Wall Street pros. Now, they’re going to “rescue” us... But wait a minute... ...wasn’t it the US government that set up Fannie and Freddie with an implied guarantee? ...wasn’t it the SEC that was set up to regulate Wall Street and prohibit the sale of slimy “investments?” ...weren’t these same economists the ones who thought the U.S. financial system was the best in the world...because it was so “dynamic...inventive...and flexible?” ...isn’t it the Fed itself that has been lending money below the inflation rate since 2002? And wasn’t that the major source of “liquidity” that created such a huge credit bubble? ...and wasn’t Hank Paulson the head man at Wall Street’s most go-go firm when all this stuff was going on? Do you remember hearing him warn investors or lawmakers that the whole Vesuvius of hyper-credit was going to blow up? We don’t... Yes, dear reader, as predicted in these pages...we are witnessing an epochal shift – from capitalism to socialism...from markets to politics...from subtle swindle to naked larceny...from white collar grifters to stick-up men...from slick fraud to brute force. And then...who will rescue us from the rescuers? AND THIS... *** Here’s a sobering detail: For the last 15 years, the U.S. money supply has grown about twice as fast as GDP. Federal government liabilities, meanwhile, have grown three times as fast. It now has more financial obligations than assets. It is, effectively, broke. And here is another cup of strong coffee: U.S. debts are now compounding negatively like a Neg Am mortgage, that delightfully fatal confection invented at height of the housing bubble. Some house buyers didn’t even pay enough to cover the interest on their mortgage; the missed interest payments were added to the mortgage itself, causing it to grow automatically. Exponentially. We don’t know what Professor Chris Martenson is a professor of. But he has done the world a favor with his description of what happens when things grow exponentially, rather than arithmetically. Imagine you could make a football stadium watertight, he writes. Then, imagine that you put a magic drop of water in the center...a drop of water that doubles every minute...so that after six minutes or so, you’d have about enough water to fill a thimble. Now how long would it take before the stadium filled, he asks? We’re not going to leave you in suspense. For the first 45 minutes, you can walk around the stadium and barely get your feet wet. But in the next 4 minutes the stadium fills and you drown.

FROM JSMINESET.COM

ADP REPORT (almost never accurate)

ECONOMIC REPORT ADP index shows 8,000 jobs lost in September By Rex Nutting, MarketWatch Last update: 8:23 a.m. EDT Oct. 1, 2008Comments: 1WASHINGTON (MarketWatch) -- Employment dropped by 8,000 in the private sector of the U.S. economy in September, according to the ADP employment index released Wednesday. Economists were expecting the ADP index to fall 65,000 after it lost a revised 37,000 in August. See Economic Calendar. Counting some 20,000 jobs typically created in government agencies during a month, the ADP index signals growth of about 12,000 jobs in the nonfarm payroll report to be released Friday. ADP does not include government employment. Economists expect a loss of 103,000 in nonfarm payrolls when it is reported Friday.

JIM SINCLAIR COMMENTS

Jim Sinclair's Commentary All those that the community loves to hate and blame for every reaction in the long term gold market are the ones who own most of the gold. Do you ever ask yourself who buys the gold from central banks not bought by other central banks? Do you ever ask yourself who is on the long side of all those short of gold producer hedges?

4:49AM PDST GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: ADP employment ISM Construction spending On the longer term charts (hourly and greater) you can see that gold is actually trading SIDEWAYS here overall between 8285 and 932 in an up channel (blue lines on chart, see recent chart this morning. Nothing is acting as it would if the manipulators weren't fiddling non-stop with everything to prevent their arrest and conviction for TREASON for this CRIMINAL manipulation of THE MEDIUM OF EXCHANGE of our economic system which also AFFECTS THE WORLD ECONOMIC SYSTEM because our Dollar is also the INTERNATIONAL EXCHANGE MEDIUM. Gold is,just before 5am pdst falling on light volume after a head fake to the upside. Short term trading in gold is a total CRAP SHOOT as nothing resolves for very long in either direction. Floor traders are simply reaching in the barrel and taking candy from the baby fishes, to combine two metaphors. The rest of this week will be insane while the "NEW" BAILOUT BILL is being considered by these infantile self-absorbed idiots we have in our NATIONAL LEGISLATURE, ADMINISTRATION, AND COURTS. The INMATES ARE DEFINITELY RUNNING THE ASYLUM!

FROM THE LUDWIG VON MISES INSTITUTE..READ AND LEARN

Will Central Bankers Become Central Planners? Daily Article by Robert Blumen | Posted on 7/31/2006 http://mises.org/story/2257 As if fighting inflation, smoothing out the business cycle, and saving the world from economic crises were not enough, central banks are being advised to include another objective in their mission: the purchase and management of stock portfolios. The Washington Post reports that former Treasury Secretary (and soon-to-be-former president of Harvard University) Lawrence Summers "is advising some of the world's biggest holders of US Treasury bonds that they ought to find much better ways to invest their money." Summers says that by holding large portfolios of US Treasuries, central banks are passing up more lucrative investments in the stock market. BREAK Mises explained the tendency of economic management to evolve in small and seemingly logical increments into a regime of complete central planning. The progression of central banks from their origin as repositories of gold created to bail out bankrupt fractional reserve banks into active portfolio managers perfectly illustrates the Misesean critique.

GT's NOON COMMENTS

What a crazy market! Be sure to read Dan Norcini's comments on his afternoon chart today. One more person saying this is all crazy ought to convince you you're aren't nuts. Nobody knows what's happening in the short term. But we all know where this is headed ultimately. Join all the groups you find on the internet that want to have Bush and his cronies charged with TREASON and WAR CRIMES before they escape to Paraguay. These people need to lose their freedom for what they've done to BILLIONS of the people of this planet. More tonight as the day's info comes in. Read the usual sites I recommend to keep up to speed.

Full Text of Ahmadinejad's Speech to the UN General Assembly

http://www.informationclearinghouse.info/article20872.htm Full Text of Ahmadinejad's Speech to the UN General Assembly By Haaretz Service 25/09/08 "Haaretz" -- The following is a copy of Iranian President Ahmadinejad's speech to the United Nations General Assembly early Wednesday morning, as translated by the Presidency of the Islamic Republic of Iran News Service: Mr. President, Excellencies, I am grateful to the Almighty for granting me another opportunity to be present in this world Assembly. In the last three years, I have talked to you about great hopes in the bright future of human society, and some solutions for achieving sustainable peace and expanding love, compassion, and cooperation. I have also talked about unjust systems governing the world; pressures exerted by some powers seeking to trample the rights of other nations, oppression imposed on the majority of the global community, especially on the people of Iraq, Palestine, Lebanon, Africa, Latin America, and Asia; about challenges we are faced with, such as efforts to shatter the sanctity of families, destroy cultures, humiliate lofty values, neglect commitments, expand the shadow of threats, as well as about the arms race and the unfairness and inability of the systems governing world affairs in reforming the status quo. With the occurrence of various new developments, the debility of existing mechanisms has been revealed even more. However, at the same time, an encouraging trend, which has originated in the thoughts and beliefs of peoples, has blossomed and become stronger. Posed against the despairs caused by the new developments, this trend has ignited the ray of hope for a brilliant, desirable and beautiful future in the hearts of men. Ladies and Gentlemen, Dear Colleagues, Today I would like to talk to you about the main reasons behind the conditions ruling the world and the means to tackle them. Of course, you are already aware of what I am talking about, but I think it is necessary to remind ourselves. It seems that the roots of problems lie in the way one views and perceives the world and humankind, as well as in the important issues of freedom, obeisance to God, and justice. The world, humankind, freedom and obeisance to God, and justice, have been of utmost importance to humans throughout history. 1. The World: God Almighty purposefully created the world. This world is the bedrock for the evolution and growth of a creature called man, and the laws governing the world and all other creatures are at the service of man's quest for loftiness. The world should provide the needed opportunities for the fulfillment of the purpose behind man's creation. No phenomenon, creature, or indeed anything has been created in vain. Together they all pave the ground for the flourishing of mankind in a complex and purposeful system, and they are, each, one of the signs of God Almighty. All are His creations and He is the sole creator and ruler of the world. All existence including power, knowledge and wealth come from Him. 2. Humankind: God created the world for humans and humans for Himself. He created humans from mud and in the soil, but He did not want them to remain in the soil and with animal instincts. He kindled the light of guidance in their souls and asked them to rise from the soil to the heavens and to Him with the help of wisdom, prophets and perfect men. The world will ultimately disappear, but God has created man for eternity and has made them a manifestation of Himself. Creativity, mercifulness, kindness, knowledge, wisdom, zeal, concealment of sins, splendor, justice, bounteousness, generosity, greatness, love, glory, dignity, forgiveness, insight, kingship and all other goodness and beauty are attributes of God. God has not created humans for aggression, bloodshed, rancor, selfishness and destruction. He made humans His vicegerents on earth and has asked them to, on the one hand, make earth prosper by using their God-given potentials and to prepare the ground for the growth of divine attributes in all humans, and to provide all with a life full of beauty, amity, freedom, justice and goodness; and on the other hand in pursuance of this path, to prepare for a prosperous, everlasting life endowed by God's mercy. God has obligated humans to live divinely and socially, for it is only through social life and interactions with others that divine attributes may emerge. 3. Obeisance to God: God Almighty has tied their perfection and true freedom of humans to their devotion and obedience to Himself. True freedom and obedience to God are in balance and in fact are two sides of the same coin. Obeisance to God means confessing to monotheism and obeying His commands, and to be free from ungodly worship. Obeisance to God means the acceptance of the absolute truth, the absolute light, and the absolute beauty. Obeisance to God means abandoning selfishness and animal instincts, power-seeking and aggression, surrendering to righteousness, justice, love, and perfection. And in this way, humans can achieve their true freedom and flourish, they can grow and manifest divine attributes, have affection for others, stand up for justice, and fear no power or threat, and defend the oppressed. In such an environment, one's freedom will not impinge on any others. Contention and conflict are characteristic of materialistic freedom and animal instinct. The essence of all divine religions and obeisance to God and true freedom is disassociating from oppressors and instead obeying and worshiping God, for: - God is omniscient and knows all that is revealed or kept secret, and He is kind and merciful. - All creatures are humble before Him and resign to His will. - God is alive and is the Creator of the universe and all life. - God loves His creatures and desires nothing but goodness, blessings, and perfection for them, and is against bullying, injustice, selfishness and domination. 4. Justice: Justice is the foundation of the creation of humankind and the whole universe. Justice is tantamount to placing every phenomenon in its own place, and providing humans with opportunities to actualize all their divine capabilities. Without it, the order of the universe will collapse and the opportunity for perfection will fade away. Without justice, it would be impossible for human society to taste real peace, beauty, joy and happiness. Justice is the main pillar of social life and without it, social life cannot continue or grow. Humans need to know God in order to realize a prosperous society in this world as well as to strive for a beautiful eternal life, and to this end they first have to know themselves and strive for loftiness in themselves and their societies. However: - as long as the world is construed as closed, limited and aimless, - as long as eternal life is considered imaginary and illusory and afterlife and the Judgment Day as well as reward and punishment are thought of as fictional and unreal, - as long as morals and commitment to them are called backwardness, and immorality, lies, deceit and selfishness are considered desirable, and humans are limited to a materialistic life in this world, - as long as attempts are made to replace obedience to God and following His prophets and true freedom with servitude to materialistic tendencies and animal instincts and servitude to oppressing human beings, and contention reaches its pinnacle, - as long as the aggressors, because of their financial, political and propaganda powers, not only escape punishment but even claim righteousness, - and as long wars are started and nations are enslaved in order to win votes in elections, not only will the problems of the global community remain unsolved, but they will be increasingly exacerbated. Friends and Colleagues, Let's look at the situation of the world today: Iraq was attacked under the false pretext of uncovering weapons of mass destruction and overthrowing a dictator. The dictator is toppled and WMDs are not uncovered. A democratic government is established by the votes of the people but, after 6 years, the occupiers are still there. They insist on imposing colonial agreements on the people of Iraq by keeping them under Chapter 7 of the UN Charter. Millions of people have been killed or displaced, and the occupiers, without a sense of shame, are still seeking to solidify their position in the political geography of the region and to dominate oil resources. They have no respect for the people of Iraq and disregard any dignity, rights or status for them. The UN is not capable enough to solve the problems and to remove aggression, occupation and imposition. In Palestine, 60 years of carnage and invasion is still ongoing at the hands of some criminal and occupying Zionists. They have forged a regime through collecting people from various parts of the world and bringing them to other people's land by displacing, detaining, and killing the true owners of that land. With advance notice, they invade, assassinate, and maintain food and medicine blockades, while some hegemonic and bullying powers support them. The Security Council cannot do anything and sometimes, under pressure from a few bullying powers, even paves the way for supporting these Zionist murderers. It is natural that some UN resolutions that have addressed the plight of the Palestinian people have been relegated to the archives unnoticed. In Afghanistan, production of narcotics has multiplied since the presence of NATO forces. Domestic conflicts continue. Terrorism is spreading. And innocent people are bombarded on a daily basis in streets, markets, schools and wedding ceremonies. The people of Afghanistan are the victims of the willingness of NATO member states to dominate the regions surrounding India, China, and South Asia. The Security Council cannot do anything about it because some of these NATO members also happen to be the major decision makers in the Security Council. In Africa, efforts are made to reestablish the relationships of the colonial era. By starting civil wars in large countries including Sudan, disintegration of those countries is planned in order to serve the interests of some corrupt powers. In case there is a national resistance, the leaders of the resistance are put under pressure by legal mechanisms created by the very same powers. In Latin America, people find their security, national interests and cultures to be seriously endangered by the menacing shadow of alien domineering governments, and even by the embassies of some empires. The lives, properties and rights of the people of Georgia and Ossetia and Abkhazia are victims of the tendencies and provocations of NATO and certain western powers, and the underhanded actions of the Zionists. The never-ending arms race and the proliferation and stockpiling of nuclear and other weapons of mass destruction and the threats to use them, and the establishment of missile defense systems, have made the situation unstable. With regard to Iran's peaceful nuclear program, despite the inalienable right of all nations including the Iranian nation, in producing nuclear fuel for peaceful purposes, and despite such facts as the transparency of all Iranian activities and our country's full cooperation with the inspectors of the IAEA and the Agency's repeated confirmation of the fact that Iran's activities are peaceful, a few bullying powers have sought to put hurdles in the way of the peaceful nuclear activities of the Iranian nation by exerting political and economic pressures against Iran, and also through threatening and pressuring the IAEA. These are the same powers that produce new generations of lethal nuclear arms and possess stockpiles of nuclear weapons that no international organization is monitoring; and, the tragedies of Hiroshima and Nagasaki were perpetrated by one of them. Indeed, they are not against weapons, but they oppose other nations? progress, and tend to monopolize technologies and to use those monopolies in order to impose their will on other nations. But it is very natural that the great Iranian people, with their trust in God, and with determination and steadfastness and with the support of its friends, will resist the bullying and has defended and will continue to defend its rights. The Iranian nation is for dialogue. But it has not accepted and will not accept illegal demands. The time has come for the IAEA to present a clear report to the international community on its monitoring of the disarmament of these nuclear powers and their nuclear activities, and for a disarmament committee to be established by independent states to monitor the disarmament of these nuclear powers. The theories of development that are in line with the hegemonic system and not in accordance with the true needs of humankind and human societies, have turned into repetitive and bland tools for assimilation of economies, expanding hegemonic domination, destroying the environment and destroying the social solidarity of nations. There is no end in sight to this. Poverty, hunger and deprivation are hurting more than one billion of the world's population and have dashed their hopes for a decent life. The dignity, integrity and rights of the American and European people are being played with by a small but deceitful number of people called Zionists. Although they are a miniscule minority, they have been dominating an important portion of the financial and monetary centers as well as the political decision-making centers of some European countries and the US in a deceitful, complex and furtive manner. It is deeply disastrous to witness that some presidential or premiere nominees in some big countries have to visit these people, take part in their gatherings, swear their allegiance and commitment to their interests in order to attain financial or media support. This means that the great people of America and various nations of Europe need to obey the demands and wishes of a small number of acquisitive and invasive people. These nations are spending their dignity and resources on the crimes and occupations and the threats of the Zionist network against their will. Friends and Colleagues, All these are due to the manner in which the immoral and the powerful view the world, humankind, freedom, obeisance to God, and justice. The thoughts and deeds of those who think they are superior to others and consider others as second-class and inferior; who intend to remain out of the divine circle, to be the absolute slaves of their materialistic and selfish desires, who intend to expand their aggressive and domineering natures, constitute the roots of today's problems in human societies. They are the great hindrances to the actualization of material and spiritual prosperity and to security, peace and brotherhood among nations. I explicitly state that the Iranian people and the overwhelming majority of peoples and governments are against those deeds and perspectives of the world- domineering powers. Establishment of justice requires people who have achieved moderation and justice inside themselves, and have restrained their domineering attitudes and actualized their attributes of self-sacrifice and are at the service of humanity. The complete and full-scale manifestation of such characteristics can happen only under the rule of the righteous and perfect human being who is obedient to God and who is promised by the divine Prophets. Dear Colleagues, Of course with the grace of God Almighty a hopeful trend is flourishing in the heart and soul of human societies. The universal eagerness for justice, purity, and love for others, monotheism and the quest for perfection is clearly and increasingly on the rise. A universal resistance against the acquisitiveness, aggression and selfishness of the bullying powers is being formed. Today, the bullying powers' thoughts, practices and strategies are rejected by nations and governments, and all are seeking to establish new human relations based on justice with a view to attain prosperity, perfection, security, and sustainable welfare. This is the very auspicious phenomenon that all the traditions of creation and the ruling laws of the universe emphasize and support. Today, the Zionist regime is on a definite slope to collapse, and there is no way for it to get out of the cesspool created by itself and its supporters. The Islamic Republic of Iran, while fully respecting the resistance of the oppressed people of Palestine and expressing its all-out support for it, submits its humane solution based on a free referendum in Palestine for determining and establishing the type of state in the entire Palestinian lands to the distinguished Secretary General of the UN. American empire in the world is reaching the end of its road, and its next rulers must limit their interference to their own borders. Today, the thought of hegemony quickly becomes a demerit. And now a few words with the expansionist governments ruling global relations: Be aware that living with obedience to God and carrying out His orders, compassion for people and striving for the fulfillment of justice is to your advantage too. I invite you to return to the path of God, the Prophets and to the path of the people of the world and to the truth and justice. The only route to salvation is a divine straight path. Otherwise, God's hand of power will emerge from the sleeve of oppressed nations and will make your life difficult, and will put an end to your hegemony. Let's love the people of the world and respect their rights. Rectify past behavior. This will benefit you and the human community. The Iranian people are prepared, along with other nations, to help you be rescued from your current situation and to establish peace and prosperity. My Friends, Fortuitously, opportunities are accessible. With the grace of God Almighty, the existing pillars of the oppressive system are crumbling. Great developments in favor of humankind as well as its true and real rights are on the way. A golden and brilliant future is awaiting mankind. A global community filled with justice, friendship, brotherhood and welfare is at hand, as I have elaborated. A community which will tread the path of beauty and love under the rule of the righteous and perfect human being, the One promised by all divine prophets and the One who is the true lover of humanity. A community that will be devoid of any fear, despair and privation. Such a community will soon be ours. The community promised by the great divine Prophets Noah, Abraham, Moses, Jesus Christ and Mohammad (PBUH) is about to materialize. Let us, hand in hand, expand the thought of resistance against evil and the minority of those who are ill-wishers. Let's support goodness and the majority of people who are good and the embodiment of absolute good that is the Imam of Time, The Promised One who will come accompanied by Jesus Christ, and accordingly design and implement the just and humanistic mechanisms for regulating the constructive relationships between nations and governments. Oh great Almighty, deliver the savior of nations and put an end to the sufferings of mankind and bring forth justice, beauty, and love. Friends; Let?s have a proper share in the establishment of that illuminated and promised divine age

LATEST PAUL CRAIG ROBERTS ARTICLE

America Should Listen To Ahmadinejad By Paul Craig Roberts http://www.informationclearinghouse.info/article20897.htm 29/09/08 "ICH" -- - The full text of Iranian President Mahmoud Ahmadinejad’s speech to the UN General Assembly last week was printed in the Israeli newspaper, Haaretz (9-25-08). Although our Founding Fathers would have comprehended and endorsed Ahmadinejad’s speech to the United Nations, present-day Americans would find it strange should they happen to hear about it. Unlike their forbears, Americans today live a material life, not a spiritual one. Americans are far too likely to dismiss Ahmadinejad’s words about obeisance to God and justice as the mumbo-jumbo of an “Islamist extremist.” The hubris of Americans and their belief in U.S. “exceptionalism” would cause them to reject Ahmadinejad’s holding the US, its NATO puppets, and Israel accountable before the UN General Assembly. So successfully has Ahmadinejad been demonized by the propagandistic US media that his speech would be dismissed out of hand by the arrogance of those who regard themselves as the salt of the earth. Ahmadinejad echos the statements of other world leaders when he says that US power is rapidly waning. The US “superpower” is dependent on foreigners for its financing. The US cannot exist without Chinese financing, just as Europe cannot exist without Russian energy. America’s European puppet regimes are rethinking the consequences of serving US hegemony. A “superpower” that cannot subdue Iraq and Afghanistan cannot subdue Russia and China. Do Americans and their neocon leaders believe that China and Russia will lend the US the money to finance a war against themselves? Do they believe that Russia will keep America’s NATO puppets supplied with energy if American aggression against Russia intensifies? Warnings about America’s financial dependency on foreigners have been ignored. The bailout of the US financial system is entirely dependent on the willingness of the Chinese, Saudis, and other foreigners to use their trade surpluses with the US to purchase the US Treasury instruments that must be sold in order to raise the money for Bush’s bailout of the financial institutions. The bailout of the US government’s budget has been going on for years, and it takes place every time the US Treasury holds an auction of new American debt. But now the bailout by foreigners of the US government is starting to turn into much larger sums that carry much higher risks. Last week the Financial Times reported that Peer Steinbruck, the Finance Minister of Germany, said that the American financial crisis was “a fundamental rupture” and that “the US will lose its status as the superpower of the world financial system.” Steinbruck is being charitable. The US lost that status when it became dependent on foreigners to finance American consumption of foreign goods and US goods and services produced offshore in addition to the war-swollen budget deficits of the US government. Indeed, foreigners finance Americans’ home mortgages. The Chinese alone hold about $400 billion of Fannie Mae and Freddie Mac bonds. Is Ahmadinejad correct in his view that, with the waning of American hegemonic power, the world is on the verge of a better, more humane, and more just world? I wonder. Many Americans think of themselves as hard-nosed realists. They believe that it is a dog-eat-dog world: We have to get “them” before they get us. This paranoid view is the basis of US foreign and military policy. It holds that America must not only have the military power to overwhelm any combination of possible enemies, but also America must prevent the rise of any country or countries that could challenge American power. This is a “diplomacy” without any concept of peaceful coexistence or good will among men. Yet, Americans think of themselves as a Christian nation. Neocons and macho Republicans think we don’t win our wars because we lack the balls to use enough force. They believe that the US should nuke every country that doesn’t follow our orders. Indeed, many American “conservatives” are lusting for the US to nuke a country in order “to teach the world a lesson.” To accommodate this blood-lust, the Bush Pentagon revised US war doctrine to permit preemptive nuclear attack even upon non-nuclear-armed countries. During the long cold war, preemptive nuclear attack was not a US option. Which vision of the future will win out? Ahmadinejad’s policy of peaceful co-existence or neoconservative desires for American world dominance? The chance is too high for comfort that the hubris and arrogance of the United States will lead to a nuclear confrontation that will destroy the world. People of good will hope that Ahmadinejad and Steinbruck’s views will prevail and that the rest of the world will wake up and ask if they want to continue financing America’s hegemonic ventures that threaten life on earth. The day the foreign bankers turn off the credit spigot to the US Treasury, American arrogance will be tamed.

LATEST MIKE WHITNEY ARTICLE

Black Monday? Global Investors vote "No" on Paulson's Bailout By Mike Whitney The bill is just Paulson's way of carving a silver canoe for he and his brandy-drooling investor buddies so they can paddle away to some island paradise while the rest of us drown in a bottomless ocean of debt. http://www.informationclearinghouse.info/article20900.htm

WISE WORDS FROM THE PAST TO BE SHARED

"Live your life that the fear of death can never enter your heart. Trouble no one about his religion. Respect others in their views and demand that they respect yours. Love your life, perfect your life, beautify all things in your life. Seek to make your life long and of service to your people. Prepare a noble death song for the day when you go over the great divide. Always give a word or sign of salute when meeting or passing a friend, or even a stranger, if in a lonely place. Show respect to all people, but grovel to none. When you rise in the morning, give thanks for the light, for your life, for your strength. Give thanks for your food and for the joy of living. If you see no reason to give thanks, the fault lies in yourself. Abuse no one and no thing, for abuse turns the wise ones to fools and robs the spirit of its vision. When your time comes to die, be not like those whose hearts are filled with fear of death, so that when their time comes they weep and pray for a little more time to live their lives over again in a different way. Sing your death song, and die like a hero going home." by: Tecumseh -(1768-1813) Shawnee Chief

SOME TRUTH FROM MICHAEL MOORE

The Rich Are Staging a Coup This Morning By Michael Moore 29/09/08 -- http://www.informationclearinghouse.info/article20891.htm Friends, Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door. No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday's New York Times and you can see what the real deal is: "Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it. "Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages. "At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees. "Nobody wants to be left out of Treasury's proposal to buy up bad assets of financial institutions." Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even Rudy Giuliani is lobbying for his firm to be hired (and paid) to "consult" in the bailout. The problem is, nobody truly knows what this "collapse" is all about. Even Treasury Secretary Paulson admitted he doesn't know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can't figure it out nor can he explain it to anyone. And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling! Falling for whom? NOTHING in this "bailout" package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance. Health insurance? Mike, why are you bringing this up? What's this got to do with the Wall Street collapse? It has everything to do with it. This so-called "collapse" was triggered by the massive defaulting and foreclosures going on with people's home mortgages. Do you know why so many Americans are losing their homes? To hear the Republicans describe it, it's because too many working class idiots were given mortgages that they really couldn't afford. Here's the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage "crisis" may never have happened. This bailout's mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It's to protect the top shareholders who own and control corporate America. It's to make sure their yachts and mansions and "way of life" go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars! I have to stop writing this and you have to stop reading it. They are staging a financial coup this morning in our country. They are hoping Congress will act fast before they stop to think, before we have a chance to stop them ourselves. So stop reading this and do something -- NOW! Here's what you can do immediately: 1. Call or e-mail Senator Obama. Tell him he does not need to be sitting there trying to help prop up Bush and Cheney and the mess they've made. Tell him we know he has the smarts to slow this thing down and figure out what's the best route to take. Tell him the rich have to pay for whatever help is offered. Use the leverage we have now to insist on a moratorium on home foreclosures, to insist on a move to universal health coverage, and tell him that we the people need to be in charge of the economic decisions that affect our lives, not the barons of Wall Street. 2. Take to the streets. Participate in one of the hundreds of quickly-called demonstrations that are taking place all over the country (especially those near Wall Street and DC). 3. Call your Representative in Congress and your Senators. (click here to find their phone numbers). Tell them what you told Senator Obama. When you screw up in life, there is hell to pay. Each and every one of you reading this knows that basic lesson and has paid the consequences of your actions at some point. In this great democracy, we cannot let there be one set of rules for the vast majority of hard-working citizens, and another set of rules for the elite, who, when they screw up, are handed one more gift on a silver platter. No more! Not again! Yours, Michael Moore MMFlint@aol.com MichaelMoore.com P.S. Having read further the details of this bailout bill, you need to know you are being lied to. They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again. P.P.S. From talking to people I know in DC, they say the reason so many Dems are behind this is because Wall Street this weekend put a gun to their heads and said either turn over the $700 billion or the first thing we'll start blowing up are the pension funds and 401(k)s of your middle class constituents. The Dems are scared they may make good on their threat. But this is not the time to back down or act like the typical Democrat we have witnessed for the last eight years. The Dems handed a stolen election over to Bush. The Dems gave Bush the votes he needed to invade a sovereign country. Once they took over Congress in 2007, they refused to pull the plug on the war. And now they have been cowered into being accomplices in the crime of the century. You have to call them now and say "NO!" If we let them do this, just imagine how hard it will be to get anything good done when President Obama is in the White House. THESE DEMOCRATS ARE ONLY AS STRONG AS THE BACKBONE WE GIVE THEM. CALL CONGRESS NOW.

THE PAULSON PLAN

The Rise Of The American Oligarch Class By Robert Wenzel http://www.informationclearinghouse.info/article20892.htm EXCERPTS: "Is the play for the Oligarchs to grab the banks, the assets and the mortgages and then inflate the money supply boosting the value of all these assets by trillions, while the rest of us simply get to deal with the price inflation as higher prices at the grocery store, the gas pump and everywhere else?" "Clearly, the new oligarchs have arrived in America. It will mean a lower standard of living for the rest of us as it is clear by the Paulson Plan that they are not afraid to think big when grabbing money from the populous at large. Further, they have the political skill and influence to get the legislation passed that will benefit themselves even when there is virtually non-existent popular support. Be scared, very scared. The new American Oligarchs now rule financial America and there is no such thing as enough with them. They will be back for another big bite from our wallets and income streams, all too soon."

Bush Wants To Bankrupt America: There is Method To His Madness

Bush Wants To Bankrupt America: There is Method To His Madness By Sam Hamod 07/01/03: "ICH" -- - Some have wondered if GW Bush knows what he's doing with his tax cut that benefits the corporations and the very rich, and cuts away the remaining money of the poor and the middle class. I say yes, he does know what he'd up to, as do his corporate advisors and his neo-con economist friends and theorists, chief among them Grover Norquist. Norquist has been the chief architect behind the dismantling of the American federal financial structure in terms of benefits for the common citizen, but has helped to create the superstructure of tax breaks for the very rich and the corporatocracy that now has a choke-hold on America. The plan is very simple, but not obvious on first blush. Make sure that all the money is gone from the U.S. treasury, make sure the deficits are so great that all social and educational programs are cut, increase the military and security budgets to "protect our nation" with all these monies going to corporations and security firms who are extra-national (not tied to any country, but actually more than multi-national in that they are outside the purview of any nation at any single moment) and stave in the social security fund by allowing it to go to private corporations for "investment"-and you have the perfect scenario for saying, "only the private sector can save us-we're broke and they have the money to run every program, fund every program, but of course, at huge costs and profits for the private corporations." Our only resource will be the corporate lenders, especially the large extra-national corporations who will have loyalty to no one except their corporate coffers and large share owners throughout the world. This plan is so obvious at this point that it is hard to believe because it is happening so fast and the Democrats and even conservative non- neo-con Republicans don't realize what Bush and his neo-con buddies are up to. Of course, this is easier to accomplish with all of our attention being focused on 9/11 matters, Bin Laden, Saddam Hussein, the WMDs, threats to our nation, threats to our troops in Iraq and Afghanistan (where we lose troops everyday to Iraqis and Afghans fighting against our occupation), but we keep sending in more troops to basically protect Bechtel and Halliburton. Soon, we'll also hire private contractor troops, some from other countries and others from selected American security firms. All the time we are occupied with this, just as Orwell predicted in his novel, 1984, the Bush team will be destroying our civil liberties and taking away our social and educational programs in order to fund "security measures" and will keep blinking yellow, orange, and red codes at us. I want to make this article short so that you have time to think about this and alert your congressperson and senator as to what's really going on. Bush has already started pushing for privatization in Iraq and Afghanistan and in America-it's only a short step from this huge debt he has created from the great surplus he inherited. *God only knows what kind of deficit he's going to create as he lets the dollar drop freely, so that consumers have to pay more for goods and our balance of trade goes to hell, the national debt at its current rate will take over 100 years to pay off-if we can even then get a hold on it according to some economists who are upset (see articles by Paul Krugman and others)sat the Bush team's actions. But they fail to see the real motive behind all this seeming disaster. Yes, it's a disaster for us, but it's a windfall for Bush and his corporate friends who will soon be running everything. *Actually, through their lobbying, they are running most things at this point-simply see the astounding inflation in drug prices compared to the low national inflation rate, the false "shortage of natural gas"-a commodity that is endless in the world and in its supply in America-the artificial shortage of electricity (as done by Enron and others to jack up prices and now FERC saying that though California did sign contracts with utilities under duress, they are still bound by the contracts even though they were lied to when signing the contracts-which is fraud in any honest person's mind, but not in the mind of FERC) and now our need for added security that is endless because it will not be long before Bush brings terrorists to our shores by either his behavior, or allows some actors within the Republican camp to fake terrorist raids so that possibly martial law will follow. Friends, we are in a mess of catastrophic proportions on so many fronts that it will be difficult to unravel all the various strains of this explosive Bushian virus. I use the term virus, because Bush is trying to pack the courts with his appointees from the neo-con right, placing government officials in corporations and in some cases, in law schools so that the neo-con approach to the destruction of the federal government may have academic credentials and blessings. Yes, this is an artificially created virus intended to kill the patient-namely, our democracy and our formerly free and decent lives. http://www.informationclearinghouse.info/article3977.htm

6:00AM PDST GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: Retail chain index Case-Shiller home prices Chicago PMI Consumer confidence Didn't have my laptop by my bed because I restored it too and haven't had time to put my trading platform on it, so I had nothing to watch periodically to get my attention. Finally woke up about 5:07 with the alarm in my hand still pushing the snooze button. There hasn't been that much fast action overnight, just a slow sell off as the World digests the results of what Bush and his people have done to our Nation and Economic System. None of these pukes are EVER going to admit their stupidity and greed for power and money caused this mess and that all the suffering of millions of people is their responsibility. They'll just run to Paraguay and drink cocktails until their livers quit. The market is moving so fast that it is difficult to post a proper short term chart or even make a comment that's usable. This is a gambler's market, except you are gambling for your economic survival this time. It's hard to believe that the manipulators can still push gold down, but when you have the weak longs scared you can do lots of things to a market. The up move volumes aren't large enough to make me think this market can't have a quick sell off where the "elites" will buy more cheap gold for themselves while at the same time take the profit from their short positions while they drive the market down. Talk about having your cake and eating too! I'm going to post some articles I discovered last night while I was fixing computer problems. Much time was wasted doing that, and I know what I'm doing! More as I think of it.

OTHER BAILOUTS TOOK PLACE THIS WEEKEND

Did any of you notice that the auto makers got 25 BILLION in bailouts? That is 25 times what Chrysler got in the 1970s and 3 times what the airlines got a while back. There must be an article on it somewhere. Get ready to bailout every large company in the country. If we don't bail them out... or if we do... they are all going to collapse anyway!

5:12AM PDST GOOD MORNING GOLD BUGS!

NO REPORTS TODAY Spent the weekend restoring my main computer...What a chore. Lost of stuff didn't back up, but what I need is still here. Hopefully I got rid of all the crap and bugs that were slowing it down. Just read JSMINESET.COM, BOB CHAPMAN, AND ELAINE SUPKIS for details of the Weekend Comedy in D.C. Bush manages to sneak out again this AM and say "hard work"... when has that asshole every worked hard, except at lying? Until a BAILOUT bill is passed or not, gold will be uncertain in the PAPER MARKET.. As everyone should know by now, CASH GOLD IS GETTING HARD TO OBTAIN, and certainly not at spot prices. This means you better get what you can, while you can. Gold will always be available...AT A PRICE! Please notice that I am now attempting to put some current comments at the bottom of each chart, but it takes extra time to do and takes me away from my own trading, which is hair-trigger timed to take advantage of some of these gold swings... so my trading comes first. Only 37 days until we elect another IDIOT to run this fire drill.

LATEST BOB CHAPMAN ARTICLE 9/27/08

Wall Street Pirates Wont Get Unconditional Bailout Posted: September 27 2008 http://theinternationalforecaster.com/International_Forecaster_Weekly/Wall_Street_Pirates_Wont_Get_Unconditional_Bailout Planned profits for the elites, successive administrations set the stage for current market debacles, bailout plan set months in advance, threat of a depression from the bailout, Economy set to wither, Wall Street will not go unscathed, a stampede to safety is coming

FINANCIAL TIMES SUNDAY

European central banks cut sales of gold By Javier Blas in Kyoto Published: September 28 2008 18:30 | Last updated: September 28 2008 18:30 European central banks have cut their sales of gold to the lowest level in almost a decade, reversing the practice of recent years when hefty sales helped depress prices. Institutions bound by the Central Bank Gold Agreement – the banks of the eurozone plus Sweden and Switzerland – sold about 343 tonnes of gold in the year that expired on Friday, the lowest amount since the first CBGA was signed in 1999.