Saturday, February 7, 2009
US military suicide rate at record high By James Cogan 4 February 2009 http://www.wsws.org/articles/2009/feb2009/suic-f04.shtml American troops are taking their own lives in the largest numbers since records began to be kept in 1980. In 2008, there were 128 confirmed suicides by serving army personnel and 41 by serving marines. Another 15 army deaths are still being investigated. The toll is another of the terrible consequences that have flowed from Washington's neo-colonial wars in Afghanistan and Iraq. The army suicide rate is now higher than that among the general American population. The rate has been calculated as 20.2 per 100,000 soldiers, compared with 19.5 per 100,000 civilians. This is a shocking statistic, as soldiers theoretically are screened for mental illnesses before enlistment and have access to counselling and health services that millions of ordinary people cannot afford. As there is an average of 10 failed suicide attempts for each actual loss of life, the figures suggest that more than 1,600 serving army and marine personnel tried to kill themselves last year. Army Secretary Pete Geren told the Associated Press that "we cannot tell you" why the number of military suicides was rising. It is indisputable, however, that it is linked to the stresses on soldiers caused by the wars in Afghanistan and Iraq. In 2002, the army suicide rate was just 9.8 per 100,000. The last time it exceeded the civilian rate was in the late 1960s, at the highpoint of the US war in Vietnam. An estimated 30 percent of soldiers who took their own lives in 2008 did so while on deployment. Another 35 percent committed suicide after returning from a tour of duty. In one reported case, a highly regarded marine pilot hanged himself just one month before he was scheduled to return to Iraq. Dozens of men and women who have left the armed forces since serving in Afghanistan or Iraq also committed suicide in 2008. The Department of Veterans Affairs recorded 144 such cases. The suicide rate among veterans aged 20 to 24 was 22.9 per 100,000 in 2007—four times higher than non-veterans in the same age bracket. A hotline for veterans has received over 85,000 calls since mid-2007 and arranged some 2,100 suicide prevention interventions. The rise in army suicides was registered despite an information campaign in the US military intended to end stigmas over seeking medical health for Post Traumatic Stress Disorder (PTSD) and depression—psychological conditions that afflict tens of thousands of Afghanistan and Iraq veterans and in severe cases can trigger suicidal tendencies. Veterans Affairs (VA) reported in January that 178,483 veterans of the two wars had been diagnosed with one or more mental illnesses between 2002 and September 2008. The conditions diagnosed included 92,998 cases of possible PTSD; 63,009 possible depressive disorders; 50,569 neurotic disorders; 35,937 cases of affective psychoses; 27,246 cases of drug abuse and 16,217 cases of alcohol dependency. VA deputy director for mental health services, Antonette Zeiss, told the Air Force Times: "Most of these conditions would not have been present prior to being in the military. In VA, we assume that these are veterans coming to us who have had significant stresses as a result of their involvement with the military and the war." The "significant stresses" would include killing; repeated exposure to scenes of death and injury; the constant threat of death or injury; and the dehumanising policing operations that American soldiers have been ordered to conduct against civilian populations. No-one who has taken part in the occupations of Afghanistan and Iraq could have returned completely unscathed by the experience. The true extent of mental illness among war veterans is believed to be far worse than VA's figures. It has only treated around 400,000 of the 1.7 million men and women who have served. "We know there are guys who desperately need help who aren't coming to us," a spokesman told the Air Force Times. A Rand Corporation study last year estimated that 20 percent of Afghanistan and Iraq veterans—some 350,000 people—were suffering from PTSD. As many as 18 veterans of American wars take their own lives in the United States every day—more than 6,500 per year. Vietnam veteran advocates have estimated that suicide ultimately killed more of the soldiers who fought in that conflict than the actual war itself. The same trend is now surfacing among the veterans of Afghanistan and Iraq. A recent case was the suicide of Specialist Larry Applegate on January 16. After an argument with his wife, during which shots were fired, Applegate barricaded himself inside his Colorado Springs home. Shortly after, he killed himself with a bullet to the head. The Army Times reported that the 27-year-old soldier, who served in Iraq during 2006, had been under the supervision of a Warrior Transition Unit (WTU) since February 2008 for an undisclosed condition. WTUs were established in June 2007 after the exposure of substandard treatment of wounded troops at the Walter Reed Medical Centre. There are currently some 9,000 soldiers assigned to 36 WTUs across the US. A total of 68 soldiers had died under WTU care by October 2008. More than half the deaths were ruled to have resulted from natural causes, but nine were determined to be suicides. Six others were classified as accidental deaths caused by "combined lethal drug toxicity".
GT says: People SAVE...those savings are BORROWED by people/companies who use those savings to PURCHASE CAPITAL GOODS which are then used to PRODUCE other goods for sale. THIS IS CALLED PRODUCTIVITY. If SAVING is not rewarded, or those assests SAVED lose value due to the form in which they are saved (fiat money), then there is no INCENTIVE TO SAVE, and there will be NO SAVINGS from which those who want to PRODUCE GOODS can BORROW to PURCHASE CAPITAL GOODS (machines, etc.) to produce goods. Therefore, there will be NO PRODUCTION, ONLY CONSUMPTION of the remaining goods available. And the PRICES (in terms of the de-valued fiat money) WILL INCREASE to compensate for the SCARCITY OF THE REMAINING GOODS. NO PRODUCTION WILL OCCUR until the MEDIUM OF EXCHANGE is once again TRUSTED by the populace. This, of course, will NOT OCCUR until the OLD, WORTHLESS MEDIUM OF EXCHANGE (the over-produced fiat money $$$$) is REJECTED, or RE-VALUED, in terms of a REAL, NON-COUNTERFEITABLE MEDIUM OF EXCHANGE is used as the basis for its VALUE. THIS MEANS GOLD AND OTHER PRECIOUS METALS! Peter Schiff: Obamanomics = Food Lines Video Interview Click her to view http://informationclearinghouse.info/article21915.htm
Obama CIA Choice Nets $700,000 From Rescued Banks By Christine Seib in New York The revelations about Leon Panetta's finances highlight the difficulty the new administration faces in finding experienced advisers that do not violate the President's ban on hiring lobbyists. http://informationclearinghouse.info/article21914.htm IT'S ALL ABOUT MONEY AND POWER.... IT HAS NOTHING TO DO WITH YOUR WELFARE OR CONTINUED EXISTENCE.
Thursday, February 5, 2009
From the Federation of American Scientists: In an interview with CBS’s Katie Couric on Wednesday (http://www.cbsnews.com/blogs/2009/02/04/politics/politicalhotsheet/entry4774878.shtml?utm_source=MailingList&utm_medium=email&utm_content=cedricward%40adelphia.net&utm_campaign=weatherization), President Obama was asked about spending measures in the House version of the stimulus package that have been criticized by Sen. Mitch McConnell and others, including $6.2 Billion for the Weatherization Assistance Program. President Obama makes the case for the weatherization program as a means to jump start the economy by creating jobs immediately, saying “We’re going to weatherize homes, that immediately puts people back to work and we’re going to train people who are out of work, including young people, to do the weatherization. As a consequence of weatherization, our energy bills go down and we reduce our dependence on foreign oil. What would be a more effective stimulus package than that?” The President is correct. As a paper by the Federation of American Scientists (http://fas.org/programs/energy/btech/policy/Weatherization%20Article.pdf?utm_source=MailingList&utm_medium=email&utm_content=cedricward%40adelphia.net&utm_campaign=weatherization) demonstrates, the Weatherization Program is the longest running, and perhaps the most successful US Energy Efficiency Program. The program, which underwrites a portion of the cost for improving the energy efficiency of low-income homes, reduces heating costs by an average of 31 percent, resulting in significantly lower energy bills that are so important in trying economic times like these. The program also creates roughly 52 jobs for every $1 million of federal investment. The stimulus package’s investment of $6.2 Billion into the Weatherization program will result in roughly 300,000 jobs created. The program carries a great potential to alleviate both the economic and energy woes our country currently faces. Investing in weatherization through the stimulus bill also provides the opportunity to create a more modern, streamlined and effective system for improving residential energy efficiency in the future. To do so, and to ensure the best use of stimulus funds, the weatherization program needs to improve the software tool that weatherization centers use to determine which retrofits are cost-effective, upgrade and standardize the training for energy auditors and weatherization crews, and start collecting data from the field about the real energy savings and costs of different weatherization measures to continuously improve the program. FAS applauds President Obama and the members of congress for recognizing the potential of the Weatherization Program, and we look forward to seeing this potential realized. Please look for a more comprehensive review on weatherization and the stimulus package in the near future.
James Bamford: The Spy Factory Must Watch Video By PBS - Includes Transcript "it (the NSA) also has turned its giant ear inward, listening in without warrant on thousands of American citizens, many of whom are on the government's secret watch list, now more than half-a-million names long." http://www.informationclearinghouse.info/article21902.htm
February 5, 2009 Dear Friend of Liberty, This week, the U.S. Senate is debating the so-called "Stimulus" bill, a nearly TRILLION DOLLAR boondoggle being carefully marketed as a treatment for our economic woes. In reality, this big government disaster-in-the-making will only further devalue our dollar, increase our national debt, and continue our country's descent into socialism. You may think there's nothing you can do to make a difference, but you can. More on that in a moment. Just last week, House Democrats passed their pork-laden "stimulus" package over the surprisingly united opposition of House Republicans. The Senate bill is, amazingly, an even more inflated version. Our economy cannot survive this type of continued limitless spending and reckless disregard for free market principles. Our country is already over $10 TRILLION in debt, with tens of trillions in unfunded liabilities on top of that. This "stimulus solution" to our economic problems is exactly the type of disastrous big government policy that created the crisis in the first place, and passing it will certainly prolong the suffering. What can YOU do? For starters, you can contact your Senators today and urge them to oppose this bloated federal spending spree. There is mounting outrage over this pork-laden disaster, and the politicians are getting nervous. You can get contact information for your Senators by clicking here, then selecting your state from the map and clicking "Congressional Information." Our website not only allows you to speak out and hold your Congress accountable, but it also keeps you updated on all Campaign for Liberty activity in your state and across the country. To make your voice heard and to stay involved with the Revolution in your state, follow this link: http://www.campaignforliberty.com/usa.php Campaign for Liberty was founded to deliver the message to the bureaucrats in D.C. that "Enough is enough!" It is our mission to stop this extravagant spending, educate our fellow countrymen on sound economics, and turn the tide back toward liberty and a balanced federal checkbook. It is crucial that you help us by making your voices heard. Calling and writing Congress can seem hopeless at times, but that's exactly the feeling politicians want you to have. They want you to think you don't matter. They want you to sit quietly. Let them know that you won't be quiet, that you are watching them, and that you are not going away. Demand that your Senators defend the constitutional values they have sworn to uphold. Encourage them to call this "stimulus package" what it really is - a socialist repudiation of our nation's values – and to vote it down. Again, please contact them today by following this link: http://www.campaignforliberty.com/usa.php With your help, we can win this battle in our fight to restore our Constitution and reclaim the Republic our forefathers fought to give us. And even if it does still pass, we will use it to further the Revolution that you and I are bringing about. In Liberty, John F. Tate President, Campaign for Liberty P.S. Radical Socialism is currently being debated in the halls of Congress. Please write and call your Senators and demand that they oppose this so-called "Stimulus Package" and other Big Government power grabs. P.P.S. Campaign for Liberty practices the principles we preach. Unlike the government, we will not go into debt. Only your ongoing support allows us to continue our fight against tyranny. If you can help Campaign for Liberty financially, please make your generous contribution of $250, $100, $50, or whatever you can afford at this time here: https://www.campaignforliberty.com/donate.php Thank you for all of your hard work for the cause of liberty!
The Coming Fascism by Karen Kwiatkowski http://www.lewrockwell.com/kwiatkowski/kwiatkowski223.html The Anderson-Obama interview this week wrapped by congressional hearings on government collusion with friends and relatives (otherwise known as the Bernie Madoff scandal) have brought forth only more government whining, moaning and self-justification. In them, we have also been given a pale notice of future full-fledged American fascism. Our government is bloated past the point of repair, and those in government understand this perfectly. We still have an overstretched, poorly led, and unreliable military web, funded by various other confused governments and unborn American taxpayers. Before long, the state will not only demand we spend what paltry savings we have as a civic duty, but that we bear more children to ensure the kingdom has serfs.
Tuesday, February 3, 2009
AUDIT AFTER GOLD DEALER’S SUICIDE SUGGESTS CUSTOMERS LOST MILLIONS By ROBERT J. COLE Published: October 5, 1983 NEW YORK TIMES Some $60 million worth of gold, silver and platinum sold to thousands of individuals and then supposedly stored in Rocky Mountain vaults may never have existed, an investigation suggested yesterday. The possibility emerged in an audit conducted by the accounting firm of Touche Ross & Company in connection with the suicide last Wednesday of Alan David Saxon, 39-year-old chairman of Bullion Reserve of North America, a gold dealer with offices in Los Angeles, Dallas and Hong Kong. Bullion Reserve has 30,000 to 35,000 customers. If the missing assets cannot be found, most of their investments may be lost. http://query.nytimes.com/gst/fullpage.html?res=9C01E5DE173BF936A35753C1A965948260&sec=health&spon=&&scp=1&sq=AUDIT%20AFTER%20GOLD%20DEALER%27S%20SUICIDE%20SUGGESTS%20CUSTOMERS%20LOST%20MILLIONS%20&st=cse LINK AVAILABLE ON JSMINESET.COM
California Goes Broke, Halts $3.5 Billion in Payments By Stephen C. Webster California, the eighth largest economy in the world, is broke. "People are going to be hurt starting today," said Hallye Jordan, speaking on behalf of the state Controller. "There's no money." http://www.informationclearinghouse.info/article21898.htm
Wandering through the MarketWatch comments today, I see that MORGANMAN555 has adopted the picture of me covered in snow that I posted earlier during our record winter snow storms. I guess MW Admin doesn't know who it is, or I would have certainly been excommunicated from the site. I don't know what to think of this, but it certainly was a bit of a start to see my mug back on MarketWatch, even if it is this way.
Gary North's REALITY CHECK Gold's price: http://www.GaryNorth.com/snip/300.htm The Federal debt: http://www.GaryNorth.com/snip/544.htm To subscribe to this letter: http://www.snipurl.com/subscribenow Issue 829 February 3, 2009 THE FEDERAL RESERVE'S SELF-IMPOSED DILEMMA The Federal Reserve System face a dilemma of its own creation: the doubling of the monetary base. You can see it here: http://GaryNorth.com/public/4512.cfm The only thing that is keeping this from creating mass inflation is the decision of commercial bankers to deposit the bulk of this increase with the Federal Reserve. The banks are not lending out this money. Neither is the FED. This money does not legally belong to the FED. President Obama has said that banks that receive money from the Federal government as part of the bailout operation are going to be required to lend money. As to how this is going to be enforced, he did not say. Rep. Barney Frank insists that there will be specific legislation mandating that banks lend money to the public. http://GaryNorth.com/snip/785.htm If the Federal government gets into the business of allocating bank loans, the results will be disastrous. For a nice survey of the bad effects that such intervention will cause, read the article by Michael Rozeff, a retired professor of finance. http://www.lewrockwell.com/rozeff/rozeff266.html SUBSIDIZING EXCESS RESERVES There is a reason why the banks are not lending money to the public. Instead of taking the risk of lending, the banks are depositing hundreds of billions of dollars with the Federal Reserve. Beginning last October, the Federal Reserve began paying low rates of interest on money above the legal reserve requirement that banks must deposit at the Federal Reserve system. This new policy was not to go into effect until October of 2011, but the banking crisis forced the Federal Reserve to speed up the legal timetable. Congress, of course, did nothing. Because the banks place their money with the Federal Reserve, this money is taken out of the fractional reserve process. The Federal Reserve System does not lend this money to borrowers. It is not part of the FED's balance sheet. The FED keeps the money in reserve. The banks were initially paid only 1.25% for these deposits, and this was dropped to 1% before October was over. Because of the Federal Reserve's new target for the federal funds rate, which is now approximately 0%, banks are not receiving any interest on the money they have on deposit with the FED. Yet they have to pay interest to depositors. So, the excess reserves are causing banks to hemorrhage money. The money is safe, but the losses are guaranteed. The banks have almost no money coming in as interest payments from the Federal Reserve, but they have money going out as interest payments to depositories. This cannot go on forever. The new Administration understands that something is wrong. Advisors know the banks are not lending. They do not seem to understand why the banks are not lending. They are not lending because bankers are fearful that they will not be repaid. They are so terrified by this economy that they would rather put the money with the Federal Reserve System, receive essentially no interest, and suffer losses on interest paid to depositors. They would rather lose a little money, month by month, then put their money at risk by lending it. This gives some indication of just how bad the present economy is. If bankers are afraid to lend money to senior American corporations for 90 days, and if they are afraid to lend money to the United States Treasury to buy long-term bonds, there appear to be no profitable opportunities for investors, either. The banks are certainly not going to put the money in the stock market. Why should you? They are afraid to put in the corporate bond market. I can hardly blame them. They are afraid of doing anything with the money. The Federal Reserve now faces a problem. It faces a series of problems. We need to understand the nature of the problems that the Federal Reserve is facing in order to understand what Federal Reserve policy is today. A ZERO-BOUND ECONOMY The Federal Reserve wants to avoid price deflation. In the terminology of Keynesian central bankers, this is called a zero- bound condition. We are now in that condition. The federal funds rate is so low that banks ought not to be lending to the Federal Reserve. Nevertheless, they are lending to the Federal Reserve at approximately one-tenth of 1% interest. They are not lending to the general public. If the economy continues to contract, as Keynesian theory says it will contract if the banks do not lend, then prices will fall, and interest rates on Treasury debt will remain essentially zero at the short maturities. This will make it difficult for the Treasury to get foreign investors to lend money to it. The Federal government is facing a $1.2 trillion deficit, and foreign central banks are unlikely to lend to the Treasury at a quarter of a percent interest, the rate for 90-day T-bills. Foreign central banks are also saying that they no longer wish to lend on long-term T-bonds. According to Keynesian economic theory, when interest rates fall to zero, increases in central bank purchases of debt obligations, which would otherwise stimulate the economy, no longer occurs. Why not? Because banks refused to lend. This stops the fractional reserve banking expansion process. The economy stagnates. Economic growth contracts. Prices fall. The process accelerates. It is a downward economic spiral. This is what Milton Friedman said caused the Great Depression. Almost everybody today believes Friedman. So, they are frightened that we have reached a situation where Federal Reserve expansion of the monetary base will not lead to an expansion of the money supply. This means that the economy will continue to fall even faster. AN EASY SOLUTION WITH DISASTROUS CONSEQUENCES There is an easy solution to this problem. The Federal Reserve knows exactly what the solution is. Nobody mentions it. The suggestion that the Federal Reserve would attempt it would probably bust the bond market. The Federal Reserve would announce that, from this point on, all money deposited by banks as excess reserves will be charged a storage fee. This fee could be 2%. Not only would banks not make any interest on the money deposited with the Federal Reserve, they would begin suffering a loss of 2% per annum on the money held as excess reserves. These losses would be in addition to the losses sustained by the banks because they have to pay interest to depositors. The banks would find that the guaranteed loss of the combined payments would be so great that it would be safer to lend the money to the general public. Banks would then start lending to corporations and to the Federal government. They would certainly buy Treasury bills at quarter of a percent per annum rather than holding excess reserves at -2%. The Treasury would spend the money into circulation. This money would then multiply through the fractional reserve banking process. This would create another grim scenario for the Federal Reserve. The Federal Reserve has more than doubled the monetary base since September 2008. This has been offset by the decline in the money multiplier, which has been caused by bankers' decisions to hold money as excess reserves with the Federal Reserve. If the Federal Reserve begins charging a storage fee to banks that deposit excess reserves with the FED, the money multiplier will immediately reverse. It will go back to something approaching normal. At that point, the increase in M-1 will begin to affect the economy. There will be more money available for consumers to spend. Some people are afraid that consumers will save money. Why? Bad economic theory. Thrift does not have any effect on the money supply in a fractional reserve banking system. If one group of consumers saves more money, this does not affect the money supply. These thrifty people will increase the amount of money that they have deposited at their local bank. This does not change the monetary base. When a small percentage of consumers stops spending on consumer goods and increases holdings of bank accounts or money market funds, this will have no effect on the total money supply. It means that one group of consumers will cut back on spending, but it means that other groups of consumers will increase spending. People who borrow money at a bank intend to spend it. Maybe they are going to spend it on business activities. Maybe they are going to spend it on consumer goods. But they are going to spend it. Nobody increases his debt in order to put it in a bank account. Nobody pays a bank 7% or 10% per annum in order to put it in a bank account that pays 2% per annum. If he does, he is doing this only for very brief time until he spends the money. FEAR OF PRICE INFLATION Why hasn't the Fed adopted this policy of a penalty payment? I think this should be obvious. Banking theory teaches that when the monetary base doubles, the money supply will double. If the money supply doubles, consumer prices will also come close to doubling. There will usually be a time lag, but the process is clear. An increase in the monetary base, which is called high-powered money, multiplies through the fractional reserve banking system. All schools of economic opinion agree on this point. If the Federal Reserve is unwilling to impose a penalty payment on excess reserves, it is afraid that banks are going to do the rational thing: lend money to the general public. It is clear that the Federal Reserve System's policy-makers are afraid that banks are going to do would banks are supposed to do with reserves: lend money to the general public. The Federal Reserve is attempting to sterilize the increase of the monetary base, which it created. Federal Reserve economists know that if banks start lending reserves that are being held the Federal Reserve beyond the 10% legal limit, there is going to be mass inflation in the United States. The Consumer Price Index will double. Any additional spending by the Federal Reserve to prop up the Treasury bond market will be immediately reflected in an increase in M-1. Long-term interest rates will soar. The market for Treasury bonds will collapse. At that point, the Federal Reserve will have to intervene and purchase Treasury bonds. This will drastically raise interest rates on corporate bonds and mortgages. The Federal Reserve is now trapped by its own policies. It has dramatically increased the monetary base, and it does not want this money to be spent into circulation. Federal Reserve economists understand the fractional reserve banking process. They know that the only way that the M-1 money supply will not match the doubling of the monetary base is for the Federal Reserve to impose an increase in the reserve requirement. It has not done this. Instead, it has paid a small amount of interest to banks to persuade backers to see keep money on deposit with the Fed, which sterilizes the increase in the monetary base. If banks begin lending money to the general public, the Federal Reserve will have to sell assets in order to offset the increase in its balance sheet, which is a result of the big bank bailouts and buying T-bills. The problem is, the Federal Reserve is running out of Treasury debt certificates to sell. The only asset that the Federal Reserve now holds in its balance sheet that can be sold at face value to the general public is Treasury debt. There is no way for the Federal Reserve to unload the toxic assets that block from the banks. Furthermore, with the proposal of the so-called bad bank, which is one of those rare circumstances where the name given to it is appropriate for what the organization is, somebody has got to buy the toxic assets that are unloaded by the banks, so that the banks can get their balance sheets solvent again. Who is going to put up the money to buy all of this debt? The Treasury can buy it, but then the Treasury then must sell a comparable amount of debt to the general public. Who is going to buy that? Whoever does will invest money in a government-guaranteed bailout rather than in the private sector. Kiss the recovery goodbye. Once the banks get their balance sheets in good shape again, by unloading hundreds of billions of dollars of junk assets onto the bad bank, they will start lending again. They will reduce their holdings of excess reserves at the Federal Reserve system. At that point, the money multiplier will start multiplying again, M-1 will grow dramatically, and we will be into mass inflation. I don't mean 10% or 20% or 30% price inflation. I mean 50%, 60%, or 100% per annum. The vast increase of the monetary base, once it is translated into an increase in M-1, will create mass inflation in the United States. That money will be spent. Anyone who thinks the US Treasury will not send money to Social Security recipients, Medicare insurance programs, and all the other groups that are clamoring for bailouts, has been smoking something funny. DELIBERATE POLICY The reason why the banks are not lending is because a Federal Reserve policy has been established that pays banks not to lend. But now that the expansion of the money supply has been so great that the federal funds rate has been dropped to a tenth of a percent, the Federal Reserve's plan to sterilize its own expansion of the monetary base is threatened by constant losses to commercial banks, because they have to pay interest on deposits. Furthermore, the plan to sterilize the monetary base is also threatened by Congress and by the President, who insist that legislation is going to be passed which forces the banks to lend money. People who are predicting price deflation, meaning significant price deflation of 5% to 10% per annum or more, operate on an assumption that the fractional reserve banking system no longer expands the money supply. They are assuming that banks will not lend. They are therefore assuming that the expansion of the monetary base which is already taken place is not going to be translated into an expansion of the money supply, because the Federal Reserve's program of asset sterilization by paying interest on excess reserves is going to be successful. If success is defined as "falling prices and a collapsing economy," success is not going to be allowed by the United States Congress and the Obama Administration. They have made it clear that they are going to mandate that the banks lend. As soon as the banks start lending, the fractional reserve banking process takes over, and the money supply will double. I think we are beyond the point of no return. I think the expansion of the monetary base by the Federal Reserve System cannot be sterilized much longer. Congress is going to force the un-sterilization of bank reserves. The Federal Reserve System can do this on its own authority, simply by imposing a penalty payment on excess reserves. This is not rocket science. This is simply a matter of the Board of Governors passing a new rule that imposes a 2%, 3%, or 4% penalty payment on excess reserves. If I understand this, you can be certain that Federal Reserve officials understand this. You can also be certain that Ben Bernanke understands this. If Bernanke and the Federal Reserve's Board of Governors have refused to impose such a penalty payment, there is a reason for this. It is the same reason that the Federal Reserve began paying interest on excess reserves last October. The reason is clear: the Federal Reserve is terrified by its own policies. It knows exactly what is going to happen, once banks lend excess reserves into the general economy. It does not matter one way or the other who gets the money. It can be the United States Treasury. It can be large corporations. It can be people borrowing money to buy real estate. It can be any or all of these recipients of money. The public is willing to borrow whatever the banks are willing to lend area at some interest rate. Contrary to John Maynard Keynes, the money will be borrowed, and the money will be spent. My belief is that the banks will pull money out of excess reserves, either because they are forced to by the Federal government or because the Federal Reserve System begins imposing a penalty payment on excess reserves. Why would the FED do this? In order to forestall Congress. Also, in order to escape the zero-bound crisis that Keynesian economics says is the result of central bank policies that lower interest rates to zero. The thought that nobody in the general public is willing to borrow money at 1% or 2% is ludicrous. Tens of millions of Americans have credit cards, and they pay 10%, 15%, or more on these cards. Americans will rush to buy houses if they can get mortgage rates at 2% or 3%. The idea that the interest rate does not balance the supply and demand of credit is so utterly ludicrous that it takes a Ph.D. in economics to believe it. This idea has been a dominant idea among economists all over the world ever since Keynes wrote the "General Theory." It is a preposterous concept, and it is universally held. This is why economists throughout America are now clamoring for more bailouts by the Federal government. This is why they are demanding that the Federal government spend the money on anything and everything in order to make certain that the money gets spent by consumers. --------------------- CONCLUSION The case for price deflation rests on one primary idea: banks will not lend, even though they have reserves to lend. So far, this has proven to be the case. Banks are keeping excess reserves with the Federal Reserve, thereby refusing to lend money to the general public. Congress is not willing to accept this much longer. Neither is the Obama administration. So, the Federal Reserve System is going to have to fish or cut bait. It is going to have to decide whether or not it is going to subsidize the banking system: the decision of bankers to hold reserves with the Federal Reserve, thereby sterilizing the expansion of money that the Federal Reserve has produced since last September. I don't think the Federal Reserve wants either outcome. On the one hand, it is terrified by the zero-bound economy that it has created. On the other hand, it is terrified by the thought of what the expansion of the Federal Reserve's monetary base will do the money supply, and from there do to consumer prices. I feel their pain. I prefer not to. We are all going to feel a great deal of pain over the next few years. The basis of this pain is already in the monetary pipeline. The relevant question now is this: "How soon will the FED decide to un-sterilize its monetary base?" This raises a practical question: "What can a small minority of investors do to beat the rush to the lifeboats, before they fill up?" The majority will not be able to escape the sinking ship of state.
CREDIT TO GOLDMELTER FOR THE LINK http://www.business24-7.ae/articles/2009/2/pages/02032009_6fce22dd78604ed19eeb0ca3276fb9b0.aspx Gold prices may hit $1,500 (Dh5,509) an ounce in the next 12 to 15 months, Gary Dugan, the Chief Investment Officer (CIO) of Merrill Lynch, said yesterday. Dugan termed his apprehensions of gold striking such a high as a "fear" that may come true. He reasoned that such a price would mean the other commodities and streams of investments have been shunned by investors. With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of "the most trusted currency", Dugan said. "We have never seen such a rush to buy gold. It's bringing in security and it's still affordable." Merrill Lynch commodity price forecast authored by Dugan showed that gold prices can rise from the currently prevailing $913/oz to $1,100/oz in the first quarter of 2009 and to $1,150/oz in the second quarter. "While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems," Dugan said. With reports of declining returns from other investment options, "cash" – keeping money safe in banks and investing in government bonds – is the option in front of investors, Dugan said. "Fear" and eventual decline of the greenback are the two factors that will drive gold prices, he said. While commodity markets could also bounce back in the first half of the year, a rebound is likely to be short-lived in the absence of strong US consumer demand. Precious metals, led by gold, could enjoy a more sustained rally with gold benefiting from a weakening of the dollar in the second half of the year, Dugan said. Dugan said the greenback, which has been strengthening for the past few months, will decline in value by the middle of this year. "That's when people will begin to realise that President Obama's policies are not having the desired impact," he said. Investors could also look to private equity, which produced strong returns during the downturns in 1991 and 2001, on an opportunistic basis. Some hedge fund strategies may be worth following but hedge funds should be treated with caution, Dugan said. Returns from private equity should remain in single digits in 2009 and a return of beyond 10 per cent should be treated as "fair value", he said. "Investors should remain cautious. They need to be prepared to take profits. We think any such rally would run out of steam by the second half of the year." Low risk assets could offer private investors the best prospects of attractive returns in 2009 as the world's leading industrialised nations face recession, Dugan said. With governments around the world striving to tackle the economic crisis, private investors could find value in a cautious approach towards asset allocation. Options include high-grade corporate bonds and high-quality, high-yielding equities in defensive industries. "Investors will look to long-term US government bonds as an important barometer of the progress of global recovery," said Dugan. "Sharply rising bond yields will show that the governments have overspent." While earnings downgrades are likely to dominate the first quarter of 2009, a rally in global equity markets could be on the cards for the first half of the year with consumer and cyclical stocks among the potential beneficiaries, Dugan said. Broad equities indices could also offer trading opportunities to private investors. "Equities could outperform as an asset class in 2009 unless there is a serious deflation risk. Our view is that deflation will be avoided," he added. Selective investment in high-grade corporate bonds could also provide attractive returns, Dugan said.
Monday, February 2, 2009
RIGHTS: Call to Try Bush By Julio Godoy BERLIN, Feb 2 (IPS) - Now that former U.S. president George W. Bush is an ordinary citizen again, many legal and human rights activists in Europe are demanding that he and high-ranking members of his government be brought before justice for crimes against humanity committed in the so-called war on terror. http://www.ipsnews.net/news.asp?idnews=45636
O'BOMB'A SOLD AMERICA SNAKE OIL- GT A Bankrupt and Discredited Country The Era of American Leadership Is Over By Paul Craig Roberts February 02, 2009 "Information Clearinghouse" -- -Vast numbers of people in the United States and abroad are hoping that President Obama will end America’s illegal wars, halt America’s support for Israel’s massacre of Lebanese and Palestinians, and punish, instead of reward, the shyster banksters whose fraudulent financial instruments have destroyed economies and imposed massive sufferings on people all over the world. If Obama’s appointments are an indication, all of these hopeful people are going to be disappointed. http://www.informationclearinghouse.info/article21885.htm
Sunday, February 1, 2009
Since this picture was taken, Black Cat had his left eye removed due to a tumor. He also had just received his shots the week before he disappeared. On Wednesday January 14, 2009 my cat named 'black cat' didn't show up for breakfast. It's been 17 days since his disappearance. I assumed coyotes got him, or some cruel human killed him. (that's not uncommon, as I had that happen to a previous cat in Helena, Montana while I was passing through on a long vacation in my truck and trailer back in 2003.) Black Cat adopted me while I was visiting a friend's 30 acre raisin vineyard 20 miles west of Fresno, Ca in 2003. I had my trailer parked on a dirt service road that came into the vineyard from the main highway. A dirt drive way went perpendicular to that service road into the center of the vineyard where my friend's house was along with a large industrial shed. Black Cat showed up one day meowing and looking pretty skinny. I fed him some of the leftover cat food that my other cats had not finished. He gobbled it up and jumped in the trailer and stayed for a month. I took him to the local SPCA for shots and had his ears cleaned of ear mites for $80. A few days before I was to return to Idaho, Black Cat disappeared. I searched the local area (mostly acreage with a house here and there) which was large sections of land with streets maybe every mile or so. Found one place where he might have originated, but had probably been abandoned. Either that, or he got sick of the place and how he was treated. The night before I was to leave, I pulled my trailer in next to the house to fill up my water tanks. I slept there about 100 yards from where the trailer had been sitting for many days out on the main service road. Around midnight, Black Cat entered the trailer through the cat door and jumped up on the bed and said " MEOW!". I believe that meant, "okay, dude...I'm all yours!" We've been together ever since and he is the most affectionate cat I've had so far. We communicate so well, he almost speaks English. He is truly an amazing cat. Well, after disappearing for just over 2 weeks now, I had resigned myself that he was dead. At 3am this morning, he came in meowing to let everyone know he was back. I could not believe my eyes! He is pretty skinny, but he ate well and doesn't appear to be damaged, although he has a faint medical smell about him. He slept the whole night next to me and nuzzled me like someone who has just been released from a prison. I have to assume that he got locked up somewhere by accident. But how does an animal survive for two weeks without food, and especially, water. And it has been below freezing most of the time since he disappeared with one brief day or two where it went down to zero. Simply amazing! And I will never know what happened to him. He gets a trip to the vet Monday to be checked out. Nice to have my furry child home again.