TRADER DAN ON JSMINESET.COM COMMENTS DEC 4, 2008

Trader Dan Comments On The Dire Condition Of The International Monetary System Posted: Dec 04 2008 By: Dan Norcini Dear CIGAs, Linked below are a few charts showing the custodial account treasury holdings and agency holdings. If there is any wonder why the bond market is experiencing a once-in-a-generation bubble, just look at the Treasury Holdings chart. It is going vertical. Meanwhile, the chart showing the Agency debt holdings such as Fannie Mae and Freddie Mac continues its “fall off a cliff” imitation. Foreign Central Banks are dropping Fannie and Freddie debt like a bad habit and rushing into US Treasuries. I keep wondering just who it is that is supposed to provide the capital for Fannie and Freddie to function! The feds supposedly dumped $200 billion into them if I recall correctly but foreign Central Banks have already unloaded $120 billion. At the rate the FCB’s are ditching the debt, it looks like it is a wash and we are back to where Fannie and Freddie were in July. I read these charts as an indicator as to just how dire is the condition of the world’s current monetary system. If any of these foreign Central Banks balks at buying US Treasuries or even whisper about selling them, Katie bar the door on the US Dollar. Still, I think it is just a matter of time before the US has to devalue the dollar if it ever hopes to make good on these ever-increasing obligations. It reminds me of one of those old biology films we used to watch back in school when the virus would divide and just keep on dividing and dividing and dividing. Maybe we could rename US Treasury bonds to US Treasury viruses - They just keep on multiplying until they suck the life out of their host. Also, note the yield charts on the 3 month and the 10 year. The three month is effectively at zero. I have not shown them but the one month is at 0.01% and the one year is at 0.61%. Talk about zero bound… Quantitative Easing, here we come with a vengeance. They have no other choice. Trader Dan

LONG TERM DOLLAR CHART

BOB CHAPMAN'S DECEMBER 3, 2008 ARTICLE

Financial Crisis Only Squandering Our Future Posted: December 3 2008 http://theinternationalforecaster.com/International_Forecaster_Weekly/Financial_Crisis_Only_Squandering_Our_Future Big rise in monetary base, trillions in loans all over the world that will never be repaid, many nations very exposed in monetization crisis, all currencies to fall against gold, writers running naked, larger corporate failures to come, American condition to worsen, resentment already smoldering around the world, taxpayer money still being squandered on bankrupt Wall Street...

RUDYARD KIPLING

"The individual has always had to struggle to keep from being overwhelmed by the tribe. To be your own man is hard business. If you try it, you will be lonely often, and sometimes frightened. But no price is too high to pay for the privilege of owning yourself.": Rudyard Kipling - (1865-1936)

THESE PEOPLE HAVE NEVER BEEN WRONG YET

Breakdown of the Global Monetary System by Summer 2009 By GEAB December 01, 2008 "GEAB" -- "November 17, 2008 http://www.informationclearinghouse.info/article21364.htm Go to the GEAB WEBSITE by clickinng on the "GEAB" next to the date in the infoclearinghouse copy of the article. It is a very good website. Be sure to scan it thoroughly. YOU WILL LEARN LOTS.

PAUL CRAIG ROBERTS ARTICLE

The Cost of Hegemony is Beyond Reach By Paul Craig Roberts December 01, 2008 "Information Clearinghouse" EXCERPT: When the dollar collapses, the image of a strutting Washington as “the world’s only superpower” will evaporate. The evil that is the American government will find itself at war with its own people and those of the rest of the world." http://www.informationclearinghouse.info/article21366.htm

DAN NORCINI'S COMMENTS ON DECEMBER 3, 2008

FROM JSMINESET.COM Hourly Action In Gold From Trader Dan Posted: Dec 03 2008 By: Dan Norcini Dear CIGAs, I am a bit pressed for time today as the price action in the various commodity futures that I trade is keeping me on my toes. Some of the commodity markets are following the US equity markets higher today while some of them are not, notably gold and most of the metals. Gold in particularly is not trading “right” today. By that I mean the correlation between it and the US equity markets has been pretty close recently. When the equities are moving higher, gold has been moving higher in what I am calling the reflation trade. The opposite also has been holding true. Today, the equity markets were initially higher and yet gold still got whacked again. Generally, we have been seeing the Dollar and the US equity markets going in opposite directions as well. Today that changed with the Dollar moving slightly higher while the equities were also moving higher. That brought in selling into gold after the market had recovered most of its overnight losses. About 30 minutes before the close of pit session trading in New York, gold was hit once again. So too were the mining shares. The war against gold obviously continues. Interestingly enough, the equities faded off their highs just about the time gold was getting ready to close in the pit. The volume in the gold is getting quite anemic. It looks more like a holiday trade than a normal business day trade. Spreads between bids and offers at times are as much as 7-8 points at times even in the most active month. The contraction in open interest is taking its toll on liquidity. Yesterday saw another drop of over 1900 contracts bringing the total to an almost laughable 264,796. I say laughable because who would have envisioned that during a time of such incredible financial duress, the interest in gold would be collapsing. That just goes to show the extent of the de-leveraging trade. Again, we are talking about the phony paper gold market and not the real deal. Technically gold is treading water holding just above support near the $760 level basis February. Failure there and it will retest $740. Upside resistance is first at $780 - $785 and then at $800. We had another 285 deliveries assigned this morning with HSBC the largest stopper followed by Bank of Nova Scotia. Fortis Clearing is providing the brunt of the selling. Total deliveries so far this month are 11,758 contracts or 1,175,800 ounces. That is a nice chunk of gold but we still need some more taken out. Open interest in the December contract still is a bit high for this late in the contract’s life which could mean that there are more than a few players left who intend to take delivery. The total remaining as of yesterday is 2,118. That is 211,800 ounces of potential physical gold purchases. More guys still could come into that month yet if they knock prices much lower so stay tuned. A quick comment about the price action in so many of these markets which can aptly be termed, “schizophrenic” – they have become the domain of day traders and scalpers. Drawing too much in the way of assumptions from price action in regards to the fundamentals is a waste of time. They will go in whatever direction the most money happens to get thrown at them on any given day. If the biggest order of the day is one that says in effect; “Jump off the edge of the canyon and follow me” – guess what – They all will do exactly that! Newsletter writers in particular, who are forced to make daily recommendations to their readers are to be pitied. What they write one day, they have to take back the next only to eat those words the day after. Better to sit on the sidelines and wait and see if some semblance of sanity comes back after the new year. I have chatted with a few of my trading pals and the consensus is becoming just that. Take a long vacation and let the rest of these guys chop each other to pieces, particularly the hedgies.

HEXILLIONS...GET READY FOR IT HERE

FROM THE ZIMBABWE TIMES: http://www.thezimbabwetimes.com/?p=7633 $60 000 000 000 000 000 000 000 fraud! November 20, 2008 By Our Correspondent HARARE - Reserve Bank Governor, Gideon Gono has frozen the accounts of eleven companies and nine individuals who have been involved in fraudulent cheque activities totaling Z$60 000 000 000 000 000 000 000 ($60 hexillion) over the past ten days which they deployed on the Zimbabwe Stock Exchange to bid for shares. This amount effectively dwarfs the $1, 1 hexillion that is the total of all quasi-fiscal operations the central bank has engaged in over the past five years. The accounts of nine individuals and directors of blacklisted companies were frozen while they were barred from opening any other banking accounts in Zimbabwe for “indiscipline, corruption, fraudulent activities and underhand manipulation of the money and capital markets”. Gono blamed rogue and fraudulent activities for the cash shortages that have forced depositors to sleep in queues outside commercial banks and building societies in order to withdraw the $50 000 proclaimed by the central bank as the maximum daily withdrawal limit. While the fraudulent activities in question have, in the words of Gono, taken place over the past 10 days, the bank queues that the Reserve Bank governor refers to have been in existence for months now. Gono made these shocking revelations as he put in place new measures to curb fraudulent banking activities and trading on the Zimbabwe Stock Exchange which he said “had become the most devastating vehicle of economic destruction”. In the past, Gono has labelled inflation as the Number One enemy hampering his much talked about economic turn-around programme. His previous efforts have achieved little success in reining in inflation which is now currently pegged officially at 231 million percent “The current cash shortages are a combined effect of the rogue trading on the Zimbabwe Stock Exchange,” Gono said. “Insurance companies have stoked the flames of financial instability through flouting of the statutes that govern their operations.” The central bank has immediately stopped entertaining unsecured accommodation from commercial banks and threatened to eject those who flout regulations out of the clearing houses. “Any banks or stock-broking firm which writes cheques that are not funded will have their accounts closed. Any bank where bank cheques are fraudulently drawn will automatically lose their trading licences and the CEO charged with criminality,” Gono said. For instance, one bank branch authorised a cheque that far exceeded the whole company’s assets put together. Some players in the banking sector had relaxed controls and risk management systems leading to officials engaging in corrupt activities, he said. Other proposed deterrent measures include penalizing a bank’s entire management and board of directors in cases where the bank does not report suspicious transactions that turn out to be fraudulent or money laundering proceeds and closing accounts for any stock broking companies that fail to settle their obligations on the ZSE register “The victims of these fraudulent activities are the hard-working workers going for months without access to their salaries at banks; the sick who cannot get treatment at hospitals and clinics due to lack of cash; the commuting public who fail to go from place to place because of rampant increases in transport costs and children having to go to school of empty stomachs and the disadvantaged members of society who can barely make end meet,” Gono said. Gono routinely uses populist excuses and lays blame on the banking sector to cover up for cases of clear mismanagement at the Reserve Bank.

DAN NORCINI'S COMMENTS ON DECEMBER 2, 2008

Hourly Action In Gold From Trader Dan Posted: Dec 02 2008 By: Dan Norcini Dear CIGAs, Today we are back into trading the “reflation trade”. Yesterday we were all trading the deflation trade. Tomorrow – who knows? Today was a near perfect inverse of yesterday’s price action in the commodity complex. Yesterday the index funds and some hedgies were throwing away everything and anything that remotely resembled a commodity. I remarked that my quote board was a solid line of red. Today that same quote board is a solid line of blue – everything that looks remotely like a commodity is up. Okay – let’s try to deeply divine this incredibly sophisticated and complex trading program that is being employed by the marvelously inept modern hedge and index funds – ready? Stock market UP – BUY COMMODITIES… Stock market DOWN- SELL COMMODITIES… I know it is hard to wrap your mind around such a complex algorithm, but I think that if we concentrate really hard and apply ourselves we will be able to grasp the vagaries of this amazingly sophisticated strategy. I sure am glad the best and brightest traders on the planet are handling this strategy as I for one would no doubt be lost in its complexities. Seriously folks – we are all trading the US equity markets nowadays whether we actually trade them or not. Even with the up day (thus far) in the equity markets, it does seem to me from watching the price action, that ongoing long liquidation and some small amounts of fresh hedge fund selling are emerging on rallies in the commodity markets. That is being confirmed by yesterday’s release of the supplemental commitment of traders reports showing further index fund long liquidation across the entire spectrum of the commodity complex. The exodus of that money from the complex has seen open interest in many of these markets cut by more than 50% from its peak. That is a tremendous amount of selling. These guys were the ones that drove prices north when they first came in to buy as investors were clamoring for commodity exposure in their portfolios and now they are the ones driving prices south as those same investors sour on world of tangibles. Assuming there are any of them left when the dust settles, they will also be the ones driving prices back up again once the fallout from this quantitative easing begins and the Dollar gives up the ghost. As a further point of reference, open interest took yet another big hit in yesterday’s price collapse dropping nearly 5,000 contracts to 266,000. We are now down to levels of open interest last seen in August 2005, more than 3 years ago! Gold was trading closer to $450 back then. I am beginning to think that the bulk of the index fund liquidation is coming to an end. A lot depends on whether or not the hedge funds decide to start building short positions in the gold market but as far as selling goes, the index funds are generally “long only” funds so once they have exhausted their selling and met all the redemption requests that they need to meet, the selling is going to either have to come from the hedge funds or the comex gold market is going to run out of sellers. If the hedge funds do not move in on the short side, gold is not far from a bottom. We just have to wait and see since attempting to ferret out just how large a long position the index funds had built up is pretty challenging since we do not have the appropriate data from the COT – instead we have to extrapolate from the current COT reports. Three year’s worth of positions dropped in less than a year is pretty revealing however. Technically, gold bounced off of the ascending 20 day moving average and climbed back above the 40 day – both are positives. It has not been able to recover the 50 day moving average however – that is a negative. The shorter term moving averages are moving higher while the longer term moving averages are headed lower. That means short term the picture is friendly while the intermediate term is still negative. An upside crossover by the shorter term moving averages above the longer term moving averages will further reinforce the friendly technical picture but to really give the bulls control of the market, the 40 day and the 50 day will need to turn higher. Above those two moving averages, the 100 day comes in near the $833 level. That will be a noteworthy achievement if gold can best that level. The HUI and the XAU are following the broader stock market higher today. I am still waiting for these to trade independently on their own merits. Crude oil dipped sharply overnight to nearly $47 before it too rebounded with the higher stock market. It is struggling however to maintain its minor gains on the day. I would be surprised to see crude oil much lower than the lower 40’s. OPEC has a meeting scheduled in a couple of weeks so its price action over this period will determine what they may or may not do in regards to any potential supply reductions. I am sure there are quite a few sad faces among that group considering that it was not all that long ago that they were fetching an additional $100 per barrel on their product. Not that too many celebrate Christmas over that way but I suspect that among those that might, the stockings are going to be a bit light this year. Incidentally, if you have not looked at a price chart of the long bond recently, do yourself a favor and do so. I was still sucking milk through a bottle the last time yields were this low. I would not be the least bit surprised, and this is the cynic in me, to learn that a good portion of the bond buying in the futures pits is actually front-running using bailout money to get into position for the Fed to begin buying across the yield curve to keep interest rates low. How else to explain the insane rush into US Treasuries in the face of nearly unlimited creation of US debt and collapsing yields? Since there is ZERO accountability for the use of this bailout money, what is to keep the recipients from using it to try to once again leverage it up for a “sure bet”? Answer – nothing! These are the same people who would sell those worthless alphabet soup structured investment securities to their own grandmothers if they thought that they could make a quick buck from it. Do not be under any illusions as to what these conscience-deprived cretins are capable of. Let me take a brief moment here to address an issue that seems to be coming up more often than not. I think some folks misunderstand what Jim and I, along with others, are attempting to do with our campaign to urge folks who want to buy gold in quantities of 100 oz or more to stand for delivery at the Comex. We are not trying to bust the Comex in the month of December. What we are attempting to do is to begin a systematic and sustained effort among potential buyers to REGULARLY buy their gold by entering long positions at the Comex and then taking delivery and doing this over and over again each time they feel prices are cheap or they have money to invest in gold. Every time the bullion banks raid the gold price, those who want to buy gold at a discount thanks to our “friends” there, can enter their long positions and then ride the contract into the delivery process. If enough gold buyers do this over and over again on a regular basis, the shorts will have been served noticed that their days of manufacturing unlimited amounts of paper gold with which they can attempt to drive the price lower are coming to a close. What it will do is force them to cover their shorts much more quickly effectively limiting the downside damage that they can inflict on the paper price of the metal. The more buyers that can be recruited to this effort, particularly buyers of large size, the more difficult the life of the paper shorts will become. Short of taking delivery of the actual metal, preferably pulling it out of the warehouses, the shorts can reign supreme over this market. What’s more – they are doing this with impunity as they pay no price financially to do so and profit quite handsomely I might add. Strip them of the metal and they are cooked. Then they will have to compete on a level playing field like the rest of us. Who was it that said, “He who sells what isn’t his’n, must pay the price or go to prison”? If the paper shorts are selling what doesn’t exist, namely tons of actual gold, forcing them to show us the actual metal will work to modify their behavior. This is the only way to keep the Comex gold market honest. Speaking of deliveries, another 307 deliveries were assigned this morning. I can tell you that 43 of those were retenders by Greenwich Capital Markets. The total so far this month is 11,473 contracts or 1,147,300 ounces. I want to see the warehouse totals over the next couple of days before commenting on that. Time is needed to actually move the metal that is going out.

JIM SINCLAIR'S IMPORTANT POINTS TO KNOW

FROM JSMINESET.COM on Dec 1, 2008 The dollar cannot rise in the face of the Fed wishing to construct a less deflationary perception in markets and business. It is simply not possible to sustain. The dollar rising in the face of the creation of so many dollars simply is not possible to sustain. The dollar rising in the face of imploding financial and general business entities, being immensely bigger than the Euroland problems, is impossible to sustain. The dollar rising in the face of Quantitative Easing cannot be sustained. As you clearly recognize, gold is a currency, has always been a currency and will continue to be a currency regardless of today’s effort to the contrary. Therein lies the future of gold which will trade on or before January 14th, 2011 at $1650. When Comex deliveries represent 21,000 100 oz. bars taken delivery and removed from the COMEX warehouse, the price of gold will no longer be a game for the well known names out there. The price of gold will reflect the true state of the physical market because the Comex in a practical sense will be a cash market. The Comex as an observation also becomes a cash market at 100% margin requirement. The effort here is in no way a covert attempt to break the playing board known as the Comex. The actions suggested and practiced here will with certainty level the playing field which is now totally leaning towards the professionals who are picking your pockets regularly and without fail on every single move.

HERE IS A SITE TO MONITOR COMEX DELIVERIES

http://meltdown2011.wordpress.com/2008/11/29/vaporize-comex-countdown/ Be sure to scroll through the whole first page. It will answer many of your questions. Thanks to UNWASHEDMASS on the MW gold thread for the link.

READ THIS FROM SORCHA FAAL AND COME TO YOUR OWN CONCLUSIONS

[Ed. Note: This report should be read from its website location at http://www.whatdoesitmean.com/index1173.htm as this email copy does not contain the links embedded in the original report.] December 1, 2008 Obama To Usher In "Mark Of The Beast" Age, Warns Russian Church By: Sorcha Faal, and as reported to her Western Subscribers A new report presented to Prime Minister Putin and President Medvedev by His Holiness Patriarchy Alexy II of Moscow and All Russia is warning that the new United States President Barak Obama is following the same dark 'spiritual pathway' forged by last centuries German Leader Adolph Hitler as the Western Nations continue their efforts to institute upon this Earth their centuries old goal of a 1,000 Year Third Reich. The Third Reich was the official name for the Nazi Germany - or Nazi period of government from January,1933, to May, 1945. The term "Reich" is a German term to mean reign or rule. During this brief reign, it was under the firm control of Adolph Hitler's dictatorship and the totalitarian ideology of National Socialism. The term Nazi is a short form of the German Nationalsozialismus. The Nazi Party is the short form for the NSDAP (Nationalsozialistische Deutsche Arbeiterpartei) or the National Socialist German Workers' Party. Not being understood by the Western peoples however, is that this Third Reich was always meant to be the 'last age' of our present World as the bridge between what we are now and what we are going to become and follows upon the previous two 1,000 year reigns of the Babylonian and Roman Empires that preceded it and which were, likewise, working towards the establishment of One World Rule upon our Earth. Most interesting to note in this report are the stunning parallels between Hitler and Obama's meteoritic rise to power which include: Neither Hitler nor Obama were natural born citizens of the Nations they took command of as Hitler came from Austria and Obama from Nigeria. Both Hitler and Obama were raised from relative obscurity based upon the publishing of their first books which propelled them to National prominence and the publics consciousness with Hitler's "My Struggle/My Battle [Mein Kampf]" and Obama's "The Audacity of Hope: Thoughts on Reclaiming the American Dream". Both Hitler and Obama were preceded to power by ineffective and unpopular governments that nevertheless laid the groundwork for dictatorial rule through numerous laws enacted to prevent "terrorism" and protect the Homeland. Both Hitler and Obama campaigned for office using the slogans of "Change" and "Yes We Can" while at the same time having their pasts nearly totally obscured by their National corporate media structures. The warnings issued to the German and American peoples by numerous religious organizations about Hitler and Obama went unheeded by the mass of their citizens. Both Hitler and Obama assumed leadership during their Nations worst economic crisis in history allowing them to radically change the social structures of their Nations towards full militarization of the populace as the means to restore their economies. Both Hitler and Obama advocated vast public work projects to repair their Nations systems of roads and bridges as a means to employing their citizens. Both Hitler and Obama advocated new laws and protections for the environment vowing to protect our Earth for the benefit of future generations. Both Hitler and Obama advocated mandatory public service for all youths as a means for attaining free public education. Both Hitler and Obama advocated energy 'revolutions' to reduce their Nations consumption of fossil fuels. Both Hitler and Obama were described as charismatic speakers able to mesmerize their supporters with "messiah like" fervor. Both Hitler and Obama in private conversations prior to their taking power held great disdain for both religion and their citizens owning guns. But most importantly about Hitler and Obama, this report continues, is that to their citizens they had been put forth as 'blank slates' upon which anyone is able to project upon them anything they like as behind them lies no substance, history or record of achievement other than that which is directed upon them by those dark forces which control them. In one of the most astounding surveys conducted by the Russian Church on Obama it was found that among the American people that: Over 97% of Americans were not able to name either the city or State of his birth; Over 98% of Americans were able to name either his mother or father; Over 99% of Americans were unable to name any US elementary or secondary school he attended; Over 78% of Americans were unable to say which university he attended; Over 99% of Americans were unable to state what he did or where he lived between the years of 1970-1998. What brings these shocking numbers into even sharper relief is that when Hitler had, likewise, assumed the leadership of Germany nearly 95% of the German people didn't know he was born and raised in Austria. What is not known about Obama's past however, does not conceal his plans for his Nations future, and as best stated by the British Illuminati researcher David Icke on the coming Obama Presidency, "It is not a change of direction.just the next stage." And to this 'next stage' the American people are about to enter into there should be great fear among them as Obama is in the process of creating a ruling elite which combines the worst personages of the last 20 years coming from both the Bush and Clinton Family's powerful rule and which began with Prescott Bush, the current Presidents grandfather, who along with the most powerful US and British Industrialists, financed the rise of Nazi Germany, attempted to overthrow President Roosevelt in a 1933 coup d'état called the Business Plot, brought to the United States after World War II the elite of German Nazis surviving that conflict in what was called Operation Paperclip, assassinated President Kennedy for daring to oppose them, took over the Central Intelligence Agency (CIA) turning it into the largest drug cartel the World has ever known, and killed nearly 4,000 American citizens during the 9/11 attacks to further their aims towards total dictatorial rule. Even today as these very words are being written, and in yet another bid showing both their leaders arrogance and the ignorance of the American people, the Pentagon has announced it is stationing 20,000 armed US Soldiers in the United States itself to help 'protect' the Homeland from attacks. These 20,000 US Soldiers being stationed among them should strike great fear into the hearts of all Americans, especially when viewed in the context of Russian Military reports which state that with nearly every US City surrounded by 'circle freeways', and with the average number of exits for these circle freeways being around 50, and with the number of armed troops needed to secure each exit being 6, and with only one heavy combat vehicle needed for each squad of 6 soldiers, every major population center in the United States can be sealed off and contained within 24 hours by just this exact number of troops. In our World today one doesn't have to look to far to see how this is done as the Israeli's have perfected the mass imprisonment of human beings in urban prison camps as evidenced by the Gaza Strip where barely 300 Israeli soldiers have cut off from all food and fuel supplies to over 1.5 million Palestinian men, women and children. And it should come as no surprise that neither the United States, nor its Western allies, are opposing this mass imprisonment as they themselves are planning for those times when they will be doing the same thing to their citizens. To how soon the mass imprisonment of Western citizens will begin we can glimpse as reported by the Prison Planet News Service: "An internal memo from a top Citibank analyst reveals what the banks really think about the global financial situation, and the outlook is grim. "The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed through into an inflation shock," wrote Tom Fitzpatrick, Citibank's chief technical strategist. He goes on to explain that the massive money creation efforts by the Federal Reserve and other central banks will end with one of two things: A resurgence of inflation, or a fall into "depression, civil disorder and possibly wars." But to the direst warning of this report, the Russian Church states that like the Soviets had once defended our Earth from the Nazis, it is going to have to be done again lest we all fall into an eternal darkness where the "Mark of the Beast" will no longer be an antiquated Biblical myth, but will become the reality for billions of our human race forced into micro chipped and drugged servitude to the cruelest slave masters our Earth has ever known. © December 1, 2008 EU and US all rights reserved. http://www.whatdoesitmean.com/index1173.htm -- Sorcha Faal sorchafaal@fastmail.fm

BOB CHAPMAN'S NOVEMBER 29, 2008 ARTICLE

Debt Upon Debt And Bankrupt Financial Institutions Posted: November 29 2008 A moment for the big picture, panic set in to resolve the insolvency crisis now upon us, new moral hazard, soon an end to the bubbles, toxic waste worth next to nothing, legislative malfeasance, markets soon to be put under maximum pressure, everyone now terrified of lending and our way of life is set to change http://theinternationalforecaster.com/International_Forecaster_Weekly/Debt_Upon_Debt_And_Bankrupt_Financial_Institutions

WHICHEVER GENERATION YOU BELONG TO, YOU SHOULD READ THIS

Hope You Die Before You Get Old By David Michael Green http://www.informationclearinghouse.info/article21359.htm November 30, 2008 "Information Clearinghouse" -- As a Baby Boomer, I’m sure not encouraging generational warfare in America. I have everything to lose from such a battle. On the other hand, though, as a political analyst, I can hardly believe we’re not seeing it. Never has it been so manifestly logical. Never would it be so thoroughly deserved. And yet, never has it been so astonishingly absent from the playing field of American politics. I grew up in a period of generational conflict. “Never trust anyone over thirty”, “Hope I die before I get old”, etc. But I have to say that my generation got a way better deal from our parents than we’re leaving for our kids. Sure, our parents bequeathed us Vietnam and Nixon. But I think those politics were a matter more of naivete, really, rather than malice or greed. I remember how my own parents reacted to the war and to Watergate. Having struggled collectively through the Depression, and having fought the good fight of World War II, I think they were wholly unprepared for the levels of deceit and callous indifference to harm they came inescapably to find that their government was capable of. This was an existential challenge of the kind we jaded Boomers can probably never appreciate. They were true believers, and they were rattled to the core when Toto pulled back the curtain. Their children, on the other hand, were raised to become cynics, for whom no such political crime can ever quite surprise us.

AND BE SURE TO WATERBOARD HIM EVERY DAY AT THE SAME TIME

George W. Bush Belongs in Prison By Joel S. Hirschhorn http://www.informationclearinghouse.info/article21358.htm November 30, 2008 "Information Clearinghouse" -- Electing Barack Obama president was the first step in redeeming American democracy. The second step must be indicting ex-president George W. Bush, giving him a fair trial, finding him guilty of many criminal acts and putting him in prison. Forget revenge. Think rule of law and justice. I want President Obama soon after taking office to go on television and announce the formation of a special group of outstanding jurists and attorneys to make a recommendation whether or not the US Justice Department should bring criminal charges against George W. Bush. Based on earlier analyses, including work by the American Bar Association, I have no doubt they will recommend indictment. If moral honesty and courage have any meaning, then the nation must take seriously the concept that no president can ever be allowed to be above the law. How can President Obama not strongly support this? Surely no president must be allowed to disrespect and dishonor the US Constitution. George W. Bush broke his oath of office. His behavior was treasonous. Instead of defending the Constitution he disgraced it. Instead of protecting constitutional rights, including privacy, he sullied them. He asserted his right to ignore or not enforce laws so he could break them. Respect for the office of the presidency must never be allowed to trump truth and justice. Millions and millions of Americans and people worldwide know that George W. Bush made 9/11 the trigger for initiating an illegal war in Iraq that has killed and maimed so many thousands of people. What Vincent Bugliosi, author of “The Prosecution of George W. Bush for Murder" called “the most serious crime ever committed in American history.” I say convict Bush of myriad counts of criminally negligent homicide related to both Iraq and the Katrina disaster and put him in prison. A former president in prison would not disgrace the presidency. It would restore honor to the office and the Constitution. Surely millions more people now understand that George W. Bush bears responsibility for creating the conditions that encouraged greed-driven capitalism to rape and murder the middle class and push us into the current global economic meltdown. By removing government oversight and regulation he committed the greatest acts of fraud in the history of mankind. After he made American democracy delusional he made prosperity delusional. We the people are paying the price for George W. Bush’s criminal acts and so must he. When George W. Bush is sent to prison everyone will see that American democracy has earned the respect of the world. Everyone will better understand that evil comes in many forms and that even an elected president of the United States of America can and must be recognized as a perpetrator of horrendous criminal acts. Please President-elect Obama, make it so. Be the principled person we want you to be. Make the USA the nation it is supposed to be. Have the courage to do what Congress refused to do when it did not impeach George W. Bush. Change history by showing the world that American justice applies as equally to the president as it does to anyone else. Do not let George W. Bush escape the justice and prison sentence he deserves. Do not let respect for the presidency trump respect for justice. If we do not bring George W. Bush to justice that probably only you can make happen, then surely we do not restore respect for the office that you worked so hard to achieve. To ensure that no future president behaves like George W. Bush we must punish him. Not merely through the words of historians, but through the physical punishment that he has inflicted on so many millions of people. In previous eras citizens would have demanded “off with his head.” Now we must demand “lock him up.” How poetic for a pro-torture ex-president. As summed up at www.imprisonbush.com : “Bush must be made accountable to the law, to serve as a lesson to all those who would attempt to destroy the American system of laws and liberty for the sake of their own power.” This is a test for both President Obama and American democracy. If there is any kind of God in the universe, then George W. Bush must go to prison. When he does, then and only then should God bless America. Formerly a full professor at the University of Wisconsin, Madison and a senior official at the Congressional Office of Technology Assessment and the National Governors Association, Joel S. Hirschhorn is the author of nonfiction books, including Prosperity Without Pollution, Sprawl Kills and Delusional Democracy.

THEY DON'T CALL US SHEOPLE FOR NO REASON

A MUST WATCH 16 MINUTE VIDEO THAT WILL GIVE YOU A COMPLETELY NEW PERSPECTIVE ON YOUR PLACE HERE ON EARTH. STATISM IS DEAD PART THREE (THE MATRIX) http://www.youtube.com/watch?v=P772Eb63qIY FOR THE PRECEDING TWO PARTS: STATISM IS DEAD PART ONE (DEFINITIONS AND THEORY)IS AT: http://www.youtube.com/watch?v=PGIgOIFdnMQ&feature=channel (24 1/2 minutes) PART TWO (THE PROSECUTION OF GEORGE W. BUSH FOR MURDER) IS AT: http://www.youtube.com/watch?v=8EJ9VyjCsXU&feature=channel BE SURE TO INVESTIGATE THE OTHER VIDEOS PUT OUT BY STEPHAN MOLYNEAUX (see the links on the right of the YouTube page of each of the above videos) His first video was called NAKED NEWS (see link on right of Part One) but he changed it to TRUE NEWS starting with his 2nd video because the name was taken and people objected. You can type in either title in the search box at the top of the YouTube pages for his videos

THIS INFO HAS BEEN IN THE NEWS LATELY, BUT THE GRAPH SHOWS IT MUCH MORE CLEARLY...(thanks to goldmelter for the link)

THE NEW HAVES VERSUS THE HAVE NOTS

IMAGE COURTESY OF ELAINE MEINEL SUPKIS' WEBSITE

BOB CHAPMAN'S NOVEMBER 22, 2008 ARTICLE

A Climate of Corruption, Bailouts, Currency Rigging and Unfair Competition Posted: November 22 2008 Citigroup's big problems, beggars in Zegna suits, trade wars on the horizon, Philadelphia Fed report beset by weakness, record injections of liquidity, jobs slashed on wall street, a bevy of financial indicators to ponder just how much we have fallen, market losses trim size of overall economy Citigroup’s problems are double AIG’s, which has the taxpayers and investors on the hook for $170.4 billion. We see AIG’s problems at over $500 billion so that means Citigroup could be offside $1 trillion. Citi is loaded with the same garbage AIG has. That means both AIG and Citigroup are insolvent, and you will get to pay to bail out both of them. What very few know or understand is that the financial condition of the US is far worse than realized. You have to get out of all dollar denominated assets with the exception of gold, silver, oil and gas stocks and Swiss Franc Treasuries. Be very heavy in gold and silver coins. http://theinternationalforecaster.com/International_Forecaster_Weekly/A_Climate_of_Corruption_Bailouts_Currency_Rigging_and_Unfair_Competition

BOB CHAPMAN'S NOVEMBER 19, 2008 ARTICLE

Manipulations, Corruption And Looting Takes Economy To The Brink Posted: November 19 2008 Watching obvious criminal manipulations, COMEX becomes CRIMEX, Dubai Exchange, economic pundits avoid reality, eight years that changed America, regulation will protect the elite... EXCERPT: "What you are now witnessing is the slow motion destruction of the CRIMEX, formerly known as the COMEX, a commodities futures market which is supposed to provide a means for producers to hedge their products, but which has morphed into a rigged casino where commodities that don't exist are traded as if they did for prices that exist only in the fairytales woven by the Illuminati, who control the exchange. This destruction is what happens when the credibility and integrity of the market owners and managers of the CRIMEX, together with the credibility and integrity of the market regulators, the CFTC, move from near zero to negative infinity." http://theinternationalforecaster.com/International_Forecaster_Weekly/Manipulations_Corruption_And_Looting_Takes_Economy_To_The_Brink

THE DAILY RECKONING, WEDNESDAY NOV 26, 2008

The Turkey's Revenge Paris, France Wednesday, November 26, 2008 "You can understand how fraudulent most economic analysis is," Nassim explained, "just by looking the life of the turkey. The animal is fed for 1000 days...and then it is killed. So, if you plotted out the turkey's life on a chart, it would look great for 1,000 days...each day, the food arrived reliably, and each day, the turkey gained weight. The turkeys would look around and say they were enjoying growth and a bull market. Momentum investors would see it as an opportunity. The quants would run linear regressions on the data and prove that the risk was minimal. " Ben Bernanke would describe the turkey's life - with no setbacks - as the product of a "great moderation." Turkey stockbrokers would assure their clients that nothing had ever gone wrong in the turkey's life. Turkey econometricians and theorists would come up with explanations for why the turkeys' growth would continue forever and they'd pat each other on the back for having finally mastered the "turkey cycle." Turkey politicians would run for re-election on the grounds that they had helped create a better world. And turkey economists would project further weight gains...until the turkey was the size of a hippopotamus Then, come Thanksgiving, and all of a sudden, something goes wrong. Alas, all the turkeys' theories, models, and conceits were for the birds. "Rare events can't be modeled," Nassim continued. "Because they are too rare. You can't get a statistically reliable sample. Alan Greenspan recently explained that he 'had never seen anything like this before.' Well, of course he had never seen it before. It never happened before. "Because these events are so rare, they are also completely unpredictable...and usually much worse than you can expect. Like Thanksgiving Day for the turkey." The turkeys are getting the axe...but they're having some revenge: Americans are getting the axe too. Unemployment is rising sharply...and tomorrow, when Americans sit down to their turkey dinners, they will be dining in houses worth about 18% less than they were worth a year ago. Not only are their houses worth less...their values are falling faster and faster. There's no sign of a bottom to the housing market. In some areas - Los Angeles, Miami, San Diego, and San Francisco - the loss in housing wealth already exceeds 26% from a year earlier. But don't worry, dear reader. Houses are not dot.coms. And they're not turkeys. They won't go to zero. And they won't disappear. Besides, they were never financial assets in the first place. They're just places to live. If you're happy with your house...you don't care what its price is. On the other hand, if you're not happy with your house, this is the time to start looking around. Our guess is that house prices will go down another 20-30%. Then, you will be able to get houses at very reasonable prices.. Unless you want to live in Detroit - where you'll be able to get a house at a remarkable price. Meanwhile, the economy itself is sinking too. GDP faded in the 3rd quarter - down 0.5%. Most likely, the U.S. economy will begin walking backwards faster too. Which means...more businesses will fail...more people will be out of work...and those people with any money in their pockets will be very careful about how they spend it... ...which will, of course, make things worse. All this is a natural, normal response to a credit bubble. It gets bigger and bigger - and then it blows up. Loans are made...and then they are collected. Mistakes are made...and then they are corrected. People do stupid things...and then they pay for them. People go mad on the way up...then, they go mad again on the way down. What could be simpler? But if you think the feds are going to stand still and let something natural happen, you have not been reading the papers. They're "pulling out all the stops" to try to prevent the correction. More below... *** So far, the feds' efforts have been futile. But we have little doubt that they will get the hang of it eventually. If there is one thing the feds can do it is inflate the money supply. Ben Bernanke stakes his reputation on it. And here is Thomas L. Friedman explaining what is needed: "...a massive stimulus program to improve infrastructure and create jobs, a broad-based homeowner initiative to limit foreclosures and stabilize housing prices, and therefore mortgage assets, more capital for bank balance sheets, and most importantly, a huge injection of optimism and confidence..." Friedman is the voice of the masses. But the intellectuals agree. Bloomberg reports: "'You want to do everything you can when you're facing the threat of a deflationary breakdown of the economy,' says Michael Feroli, a former Fed official who is now an economist at JPMorgan Chase & Co. in New York. He sees the central bank cutting the overnight lending rate to zero in January and holding it there throughout the year." "Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson are being forced to pull out the stops because the extraordinary actions they've taken so far have failed to gain much traction. Credit markets are collapsing, stock prices are plunging and the world economy is sinking into a recession." "The biggest mistake Obama could make," says Yale economist Jeffrey Garten, "is thinking this problem is smaller than it is. On the other hand, there is far less danger in over-estimating what will be necessary to solve it." Yeah...go ahead and err on this side now.... Why not? You erred on the other side. That is about the depth and breadth of thinking on the issue - at least from the people who never understood what the problem was...and now offer to solve it. And it was to one of these same hacks whom Obama has turned for his Secretary of the Treasury - Timothy Geithner. Here is another Hank Paulson. Unlike Hank, he did not work on Wall Street. Instead, he was supposed to be keeping an eye on Wall Street - as head of the New York Fed. "He was in the room," when all the bailouts and busts happened, said one Wall Street pro. AIG, Bear, Lehman, Citigroup - he was in on them all. And he was at least peeping through a keyhole when Wall Street was enjoying its wild party. He saw the deals go down...the leveraged debt...the private equity buyouts...the subprime razzle-dazzle...the quants...the bonuses. We don't recall a single word of warning. But then, he's a young guy...maybe he's learned something. But we have a pretty strong hunch he'll be at the Treasury Department not to further his education...but to play his role in the developing tragedy. He's meant to try to stop the correction. Rather than examine his lines carefully to see if they really make sense...he'll speak the speech given him. "Stimulus," he will say. "Protect jobs...save homes...avoid financial meltdown." he has heard them before. He will say them again. And why not? Almost everyone wants to hear them. They all want bailout. Almost everyone wants to be saved. Almost everyone wants to duck the bill collector...and stop the hangman. We all have to play our roles, dear reader. We are all turkeys...waiting for the axe.

HAVE A HAPPY TURKEY DAY!

Think about what you are really thankful for and about. Then vow to eliminate all the extraneous crap out of your life, including people who don't provide support to your well-being. This might include relatives. Relish that holiday meal...it may be the last one that isn't out of an MRE plastic pouch...or a garbage can.

GARY NORTH TELLS IT LIKE IT IS, OR WILL BE!

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 809 November 25, 2008 FIVE SUNDAYS TO NATIONALIZATION As a conservative, I grew up in the threat of socialism: the nationalization of the tools of production. What no one warned me was that this could be accomplished by way of a unique form of nationalization: the nationalization of insolvency. We have lived through this process in 2008. The process will continue for several more years. Insolvency is being transferred from the banking sector to the government sector. How much insolvency? So far in 2008, the government and the Federal Reserve System are on the hook for as much as an additional $7.7 trillion. http://GaryNorth.com/snip/725.htm Solvency is being retained by the bailed-out banks: the private sector. Insolvency is being transferred to the those who depend on Social Security and Medicare, and also to future investors in U.S. government debt. This is being done with full compliance of Congress, both Administrations, Wall Street, and most voters, who do not understand the nature of the transfer process. One man does understand it. He shares a common bond with Treasury Secretaries Henry Paulson and Robert Rubin: he served as CEO of Goldman Sachs. His name is John Whitehead. He has watched the financial markets for seven decades. On November 12, he offered his assessment. The United States faces a slump deeper than the Great Depression. Unlike the Great Depression, however, this will be accompanied by the downgrading of Treasury debt. We're talking about reducing the credit of the United States of America, which is the backbone of the economic system. I see nothing but large increases in the deficit, all of which are serving to decrease the credit standing of America. . . . The public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs -- all very costly and all done by the government. http://GaryNorth.com/snip/723.htm All this has taken place behind the scenes this year. It has taken place on five Sundays. Then, on five Mondays, the announcement of the transfer of insolvency to the U.S. government has been announced by Treasury Secretary Paulson. The public cheers. CITIGROUP It happened again last weekend: another Sunday surprise. The government on Sunday guaranteed the survival of Citigroup, which was about to go bankrupt. Citigroup includes Citibank. Citigroup in 2006 had a capitalized value of $274 billion. By Thursday afternoon, this was down to $26 billion. This was not much of a surprise. The stock market had already anticipated it. The Dow rose by almost 500 points late on Friday in expectation of the bailout. It was up another 400 points on Monday. American investors believe in bailouts. For them, salvation happens on Sunday. As taxpayers, they shrug it off. "We'll grow our way out of this." They really mean, "Our children will grow their way out of this, and will pay us our Social Security and pensions as our government has promised on their behalf." Think of this as the equivalent of the United Auto Workers' faith in the pension guarantees made by the Big Three American automakers. As investors, they cheer. "No more losses!" Think of this as the United Auto Workers' view of competition in 1965. To understand the enormous gullibility of investors, let me cite directly from a Citi document that I downloaded this week. Save it before senior management takes it down. You'll never be alone with the CitiMortgage Correspondent Team by your side. When it comes to running your business, confidence and support mean everything. We know how important it is to work with an investor who has your best interests at heart, with a proven track record for consistent stability in the industry. As a financial institution that's been a trusted leader, innovator and model of consistency for over 200 years, you can feel confident working with CitiMortgage Correspondent. We take pride in our ability to instill confidence in both our people and our clients, which translates to stronger, long-term relationships. If you are interested in becoming a CitiMortgage Correspondent, please read below to learn more about the benefits CitiMortgage offers. The Power and Stability of Citi -- As one of the leading investors in the industry, CitiMortgage offers the power and stability our clients need to grow their businesses. http://GaryNorth.com/snip/724.htm It goes on like this for two pages. Inspirational! Investors believe in government bailouts with the same confidence that readers are expected to believe this promotional piece by Citi. Before I comment on the Citi bailout, let me review the history of recent Sunday deliverances. I call these Sunday surprises. THE FIRST SURPRISE The first Sunday surprise took place on March 16. The "New York Times" described it late that afternoon. Bear Stearns, pushed to the brink of bankruptcy by what amounted to a run on the bank, agreed late Sunday to sell itself to JPMorgan Chase for a mere $2 a share, narrowly averting a collapse that threatened to cascade through the financial system. The price represents a startling 93 percent discount to Bear Stearns' closing stock price on Friday on the New York Stock Exchange. Bankers and policy makers raced to complete the deal before financial markets in Asia opened on Monday, as fears grew that the financial panic could spread if Bear Stearns failed to find a buyer. The deal, done at the behest of the Federal Reserve and the Treasury Department, punctuates the stunning downfall of one of Wall Street's biggest and most storied firms. http://www.garynorth.com/snip/710.htm Less than a week earlier, the CEO of Bear Stearns, Alan Schwartz, had assured the public that the company was solvent, that there was no problem. A Reuters story was typical of the press's handling of the story. Schwartz, in a televised interview on CNBC, also said he is comfortable with the range of analysts' earnings estimates for the fiscal first quarter ended Feb. 29. Results for the quarter are due next week. "We don't see any pressure on our liquidity, let alone a liquidity crisis," he said. Bear finished fiscal 2007 with $17 billion of cash sitting at the parent company level as a "liquidity cushion," he said. "That cushion has been virtually unchanged. We have $17 billion or so excess cash on the balance sheet," he said. Schwartz denied speculation that other brokers were turning down Bear's credit on trades for fear of counter-party risk. According to an article published weeks later, this "speculation" was introduced by the CNBC interviewer, who cited an anonymous source that Goldman Sachs had turned down a Bear Stearns trade. Schwartz denied it. "There's been a lot of volatility in the market, a lot of disruption. That's causing some administrative pressure, getting trades settled. We're in constant dialogue with all the major dealers, and I have not been made aware of anybody not taking our credit," he said. The Reuters article went on the describe the state of the markets. As one of the largest players in mortgage-backed bond markets, investors have assumed Bear's exposure would lead to crippling losses. "None of that speculation is true," Schwartz said. When speculation starts in a market, one that has a lot of emotion in it and people concerned with volatility, "they will sell first and ask questions later," he said. "That creates its own momentum." http://www.garynorth.com/snip/711.htm The critic of this chain of events argues that there never was verifiable evidence that Goldman Sachs or any other firm had turned down Bear Stearns' business. http://www.garynorth.com/snip/712.htm The market did not care. This supposed solvency turned out to be irrelevant within hours. Bear Stearns' stock price continued to fall on Thursday and Friday. By Monday morning, Bear Stearns was no more. A rumor cannot create this outcome except when fears are rampant and leverage is high. Bear Stearns was the victim of high leverage and bad forecasts. It took a fire sale on Sunday, initiated by the New York Federal Reserve Bank, to keep Bear from going bankrupt on Monday, March 17: St. Patrick's Day. To sweeten the deal, the Federal Reserve absorbed the risk for $29 billion of Bear Stearns' debt. The public outcry and the threat of shareholder' lawsuit against the $2 per share price later led to Morgan upping the price to $10. As for the $17 billion in liquidity, Morgan must have gotten it as part of the firm's assets. We never heard any more about it. Paraphrasing Bunker Hunt's statement in 1980, as he was going bankrupt, when the FED had to lend him a billion dollars, "Seventeen billion just doesn't go as far as it used to." THE SECOND SURPRISE On Sunday, September 7, Treasury Secretary Paulson announced that Fannie Mae and Freddie Mac had been taken over by the U.S. government. He issued this press release. Before I turn to Jim to discuss the action he is taking today, let me make clear that these two institutions are unique. They operate solely in the mortgage market and are therefore more exposed than other financial institutions to the housing correction. Their statutory capital requirements are thin and poorly defined as compared to other institutions. Nothing about our actions today in any way reflects a changed view of the housing correction or of the strength of other U.S. financial institutions. Note these words: "Nothing about our actions today in any way reflects a changed view of the housing correction or of the strength of other U.S. financial institutions." A week later, Paulson & Co. were at it again. They tried -- and failed -- to keep Lehman Brothers Holdings from going bankrupt. Paulson's press release then made a statement that will haunt the financial markets for the news two years -- maybe three. I have long said that the housing correction poses the biggest risk to our economy. It is a drag on our economic growth, and at the heart of the turmoil and stress for our financial markets and financial institutions. Our economy and our markets will not recover until the bulk of this housing correction is behind us. I can think of no more accurate statement from Mr. Paulson during his term of office. The housing correction is in its early phase. As it accelerates, so will the "the turmoil and stress for our financial markets and financial institutions." Count on it. This was the nationalization of America's mortgage industry. By September 2008, Fannie and Freddie were supplying 90% of all residential mortgages in the United States. But Paulson did not use the N-word. He picked another. I support the Director's decision as necessary and appropriate and had advised him that conservatorship was the only form in which I would commit taxpayer money to the GSEs. "Conservatorship." How reassuring. Nationalization would have seemed so crass, so anti-free market. Then he admitted what is still true: the mortgage market is at the heart of the U.S. economy. The economy was heading for a cliff. And let me make clear what today's actions mean for Americans and their families. Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe. This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation. That is why we have taken these actions today. This is the issue of systemic risk, or, as the old spiritual put it, "the knee bone connected to the thigh bone. The thigh bone connected to the. . . ." And so on. Paulson called for government intervention to keep the market from imposing its negative sanctions on bad decisions made by the leaders at Fannie and Freddie. And policymakers must address the issue of systemic risk. I recognize that there are strong differences of opinion over the role of government in supporting housing, but under any course policymakers choose, there are ways to structure these entities in order to address market stability in the transition and limit systemic risk and conflict of purposes for the long-term. We will make a grave error if we don't use this time out to permanently address the structural issues presented by the GSEs. There was no mention of the taxpayers' price tag on this "conservatorship." Combined, the two outfits have guaranteed over $5 trillion in mortgages. To this was added the Mortgage Backed Securities (MBS) that had been sold -- and borrowed against -- to buy these mortgages. What of these investments? Because the U.S. Government created these ambiguities, we have a responsibility to both avert and ultimately address the systemic risk now posed by the scale and breadth of the holdings of GSE debt and MBS. http://www.ustreas.gov/press/releases/hp1129.htm The move was immediately praised by Ben Bernanke. Bond fund manager Bill Gross also praised it. http://www.garynorth.com/snip/713.htm THE THIRD SURPRISE A week after the nationalization of the mortgage market, there was another emergency meeting. This time, the survival of the huge investment banking firm of Lehman Brothers Holdings was at stake. So little known was this 160-year-old institution that knowledgeable commentators still do not know how to pronounce Lehman: "Leeman" or "Layman." ("Leeman.") Another institution facing bankruptcy was Merrill Lynch, the largest and most famous retail brokerage form in the United States. The result of Sunday's meeting: Lehman declared bankruptcy on Monday morning and Merrill was bought by Bank of America for $50 billion of BofA stock. All of this was done behind closed doors over a weekend. That was how desperate the government and the Federal Reserve were to get the deals done by Monday morning. They failed with Lehman. No deal. Lehman had over $100 billion in bonds outstanding. It reported its debts at $613 billion and its assets at $639 billion. http://www.garynorth.com/snip/714.htm According to its former CEO, Richard Fuld, he took out $300 million in the eight years prior to the collapse of his company. http://www.garynorth.com/snip/715.htm By the end of the week, September 21, two other investment banks, Goldman Sachs and Morgan Stanley, filed with the FED for bank holding company status. That was on a Saturday. This switch was immediately granted. This entitled them to the bailout money being offered by the Federal Reserve System and anything Congress might pass. Congress passed a $700 bailout plan, plus $150 billion in pork, by the end of September. That was the last of the Big Five investment banks. The survivors are minor players that only specialists have heard of, such as Jeffries. Goldman Sachs' press release on September 21 is worth considering. It mentioned that it had been founded in 1869. It was a private banking firm open only to "high net worth individuals." No longer. "When Goldman Sachs was a private partnership, we made the decision to become a public company, recognizing the need for permanent capital to meet the demands of scale. While accelerated by market sentiment, our decision to be regulated by the Federal Reserve is based on the recognition that such regulation provides its members with full prudential supervision and access to permanent liquidity and funding," said Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs. "We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources." http://www.garynorth.com/snip/716.htm That said it all. The rich no longer could survive on their own. From now on, they will need to be "under Federal Reserve supervision." We are at the end of an era that stretches back to early nineteenth-century America. The whole nation now looks to fiat money and government bailouts. The era of American entrepreneurship has ended in the financial markets. THE FOURTH SURPRISE On the weekend of September 27, FDIC officials met with officials of America's fourth largest bank, Wachovia, and officials of America's no longer largest bank, Citigroup. They hammered out a merger. This was done with no public announcement. The announcement came in a press release on Monday morning, before the stock market opened. Citigroup Inc. will acquire the banking operations of Wachovia Corporation; Charlotte, North Carolina, in a transaction facilitated by the Federal Deposit Insurance Corporation and concurred with by the Board of Governors of the Federal Reserve and the Secretary of the Treasury in consultation with the President. All depositors are fully protected and there is expected to be no cost to the Deposit Insurance Fund. Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC. It was a sweet deal for Citigroup. Citigroup Inc. will acquire the bulk of Wachovia's assets and liabilities, including five depository institutions and assume senior and subordinated debt of Wachovia Corp. Wachovia Corporation will continue to own Wachovia Securities, AG Edwards and Evergreen. The FDIC has entered into a loss sharing arrangement on a pre-identified pool of loans. Under the agreement, Citigroup Inc. will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will absorb losses beyond that. Citigroup has granted the FDIC $12 billion in preferred stock and warrants to compensate the FDIC for bearing this risk. http://www.garynorth.com/snip/717.htm It was too sweet a deal. Wells Fargo sued Citigroup. Citigroup was offering $2.2 billion for Wachovia. Wells Fargo was offering $15 billion. Wells Fargo eventually triumphed. That move gave Wells Fargo more branches than any other bank, plus deposits equaling Bank of America. http://www.garynorth.com/snip/718.htm THE FIFTH SURPRISE Citigroup was the institutional heir of the Rockefeller family, through William, the brother of John D. William's son James Stillman Rockefeller became chairman in 1959. The bank's history goes back to the War of 1812. So large was this bank that it was the first contributor to the Federal Reserve Bank of New York in 1914. On November 4, 2007, its CEO, Chuck Prince, resigned. The next day, I told my Website's subscribers to get out of stocks and short the S&P 500. According to a report on Bloomberg, in late 2006, the capitalized value of Citigroup was $274 billion. It was the largest bank in the United States in terms of market value, with Bank of America second. By September 21, 2008, its capitalized value was in the range of $26 billion. http://www.garynorth.com/snip/719.htm The extent of the bank's condition was published only after the Sunday bailout. At that point, the government and the Federal Reserve had to come clean. The disaster could no longer be concealed. What had been the largest bank in terms of market value had slipped to #6, and was about to go bust. This is why the government intervened. The government (you and I) will shield the bank's shareholders and creditors against most of the losses in its portfolio of toxic loans. Terms of the asset guarantees mean Citigroup will cover the first $29 billion of pretax losses from the $306 billion pool, in addition to any reserves it already has set aside. After that, the government covers 90 percent of the losses, with Citigroup covering the rest from assets that include leveraged loans and so-called structured investment vehicles. The government will pay $20 billion for $27 billion of preferred stock, which will pay 8%. (It will pay 8% only because the government will pay off the bad loans.) The government has already provided $25 billion in the Troubled Asset Relief Program, which is part of the $700 billion bailout bill, passed in late September. "This is a partial government takeover," Christopher Whalen of Institutional Risk Analytics, a Torrance, California- based research firm, said in a Bloomberg Radio interview. "We have been telling people for a while that some of the top banks were going to end up controlled by the government next year. It looks like that's happening sooner than even we expected." http://www.garynorth.com/snip/720.htm In a lengthy, detailed article published in the "New York Times" on November 22 -- two years too late -- the reporters trace the history of bad decisions made by senior managers at Citi. The article shows that there were red flags, but no one paid any attention. The article also indicates that there may be more bad news to come. http://www.garynorth.com/snip/721.htm Call it "Citi bailout, phase I." CONCLUSION America's biggest banks are going bust or have gone bust. Little banks are toppling each week. There is no end in sight. The government, which is running a trillion-dollar deficit this fiscal year, is adding ever more debt to save the favored banks. It is buying the banks' insolvency in the name of future taxpayers. The buyers of Treasury debt and the Federal Reserve System are funding all of this. They think future taxpayers will pay them back. I don't. I think there will be a tax revolt: mass inflation. Meanwhile, every dollar that flows into the Treasury does not flow into the private sector. The nationalization of insolvency continues. The authority of make decisions regarding who will get the shrinking supply of private savings that the banks have not already absorbed to keep their doors open have been transferred to a new generation of capitalists, people who live in fear of government regulators, not depositors. The year 2008 has seen the end of free market financial capitalism. Forget about efficiency. Forget about stable economic growth. Forget about everything except solvency as defined in fiat money. Moral hazard is alive and well in the West. Free capital markets are not. It was nice while it lasted. But it could not last. State capitalism always demands bailouts. It always gets what it asks for. Senior managers got the gold mine. Taxpayers got the shaft.

4:16AM PST GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: Jobless claims Consumer spending Personal incomes Core PCE price index Durable goods orders Chicago PMI Consumer sentiment New home sales Could be a very interesting day for gold. Don't be surprised if you see it soar today! As I have stated before, some of the largest moves I've seen happen on pre-holiday trading days and sometimes right at the end of the session. But don't wait for it to happen. Buy any big dips and hang on and sell the top as soon as the price rise slows.

HOW MUCH IS 6 TRILLION DOLLARS? COURTESY OF "CHAINSAW" ON MARKETWATCH COMMENT THREAD

How much is 6 trillion dollars? I worked this up in a slightly different presentation about 15 years ago as a letter to an editor for an Idaho newspaper when Washington began talking routinely in terms of trillions of dollars. The approximations and math are mine, so corrections are welcome. Once before I posted this on Marketwatch, but I think the reminder is due again. A typical tractor-trailer rig that you see on the highway weighs in at about 80,000 pounds, including the rig weight, so the load weight would be less. There has been some talk of setting load weights at a maximum 50,000 pounds, so that will be the figure I will use for the following. But again, how much is 6 trillion dollars? A. 62,500 tons of $100.00 bills. B. A convoy of 2,500 eighteen wheelers each loaded with 50,000 pounds of $100.00 bills. C. A stack of one dollar bills reaching all the way to the moon and 1/3 of the way back to the earth. Answer: Any of the above. I assumed that a stack of one dollar bills = 300 per inch. Then, 300 bills/inch = 3,600 bills/ft, or about $19 million/mile (for $1.00 bills stacked). $6 trillion divided by $19 million = 315,789 miles. With the distance from the earth to the moon being 238,857 miles (old data from a 1966 dictionary), 1.32 times this would be 315,291 miles (close enough for government work, pardon the pun). Also assume that 30 ($100) bills = 1 ounce. (I used a postage scale with several small bills to approximate the weight.) So, using now $100 bills, each ounce would = $3,000. One pound would = $48,000 of $100 bills. One ton would = $96 million. Then, $6 trillion divided by $96 million = 62,500 tons. And 2,500 loads at 50,000 pounds each = 125,000,000 lbs = 62,500 tons. By the way, a convoy of 2,500 eighteen wheelers, if you allow even just 200 feet per vehicle including following distance, equals 500,000 feet, or a steady convoy 95 miles long.

DAN NORCINI'S COMMENTS AND CHARTS

Hourly Action In Gold From Trader Dan Posted: Nov 25 2008 By: Dan Norcini Post Edited: November 25, 2008 at 2:53 pm Dear CIGAs, The 100 day moving average near the $832 level provided the overhead selling resistance in today’s gold session. The chatter was that $100 worth of gains in gold over the past three trading sessions was enough of a move to bring in some short term profit taking. That is probably true although I would not be surprised to learn that the bullion banks showed up at the $830 level trying to draw another line in the sand. Dip buyers are appearing however which is a good sign as the technicals have flipped to friendly with the turn higher in the 10 and 20 day moving averages and the consistent trade above the 40 day. Thus far gold has managed to maintain its footing above the 50 day as well which comes in closer to the $800 level. It looks as if we are oscillating around the 50% retracement level from the October peak. If gold can maintain a general consolidation-type trade around this level, it will be constructive. We are headed into a holiday shortened period in which liquidity can dry up some - that leaves the market vulnerable to wide swings in price on even relatively small orders. Technically, a closing trade above the $835 level should enable gold to run to $850 before it encounters anything much in the way of overhead resistance. Stops are building just above today’s session high. Support lies at today’s lows and then the $790 level. Open interest numbers remain very, very low which does give me a bit of concern. Figures from yesterday reveal that a large amount of the buying was indeed short covering. It is constructive to push the shorts out as no doubt happened when the market pushed into stops that were located above the $800 - $810 level but we need fresh buying, not just short covering, to sustain prices at these levels and set things up for an extended push higher. We must see a continued increase in open interest (an end to the deleveraging) before we can mount a sustained rally. Interestingly enough, the Euro-Yen cross was knocked lower today even in the face of the newly announced Fed plan to buy up FNM and FRE debt. Stocks initially greeted the plan with happiness but then moved lower mid-morning. That took the cross lower and as it faded, so too did gold but as that cross began to recover off its lows, so too did the gold price. The HUI managed a close above the horizontal resistance level near 225 yesterday but could not manage (thus far) to get a second consecutive close above that level. It will need to do so in order to bring in more technically based buying into the mining shares. So far the selling in the HUI and the XAU has not been unmanageable. The Dollar (USDX) did dip below the critically important 85 level in today’s session but it managed to claw its way back above that by mid-morning. Watch that level closely as two consecutive closes below it will begin to push the concentrated speculative long side positions into liquidation. Right now the USDX is bouncing from its 40 day moving average which tells me that the fund longs are attempting to defend their positions. If they cannot hold it there, they will be forced out and a top will be confirmed on the technical charts. Their exodus will bring the 83.50 level into play quite quickly. They know that and so do we. (SEE CHART AT JSMINESET.COM)

MIKE WHITNEY'S LATEST ARTICLE

You Ain't Seen Nothing Yet By Mike Whitney http://www.informationclearinghouse.info/article21313.htm "The problems we face today cannot be solved by the minds that created them" Albert Einstein November 24, 2008 "Information Clearinghouse" -- Obama hasn't even been sworn in yet, and already the Wall Street cheerleaders are celebrating his first great triumph. According the pundits, the stock market staged a surprise 494 point rally on Friday because--get this--it was announced that Timothy Geithner would be appointed Obama's Treasury Secretary. Timothy who? What nonsense. The sudden turn-around in stocks had a lot more to do with short-covering than anything else, but don't let that get in the way of a good story. Even so, the last minute surge on the NYSE couldn't stop another week-long bloodbath that ended with the Dow and S&P 500 tumbling another 5 percent. That's not to say that Geithner is not bright and talented guy. He is; and so is his White House counterpart, Lawrence Summers. But the media hype is way overdone. Geithner doesn't drive the markets and he isn't "change you can believe in". In fact, he's a protege of Henry Kissinger, a member of the Council on Foreign Relations, and has the same political pedigree as his predecessor, Henry Paulson. They're both part of the ruling fraternity and their views of the world are nearly identical. There's no doubt that Geithner will be more competent and effective than Paulson but, then again, who wouldn't be? Paulson may be the biggest flop at Treasury since Andrew Mellon steered the country onto the reef during the Great Depression. The recent flap over the Troubled Assets Relief Program (TARP) just proves the point. After convincing Congress to pass a $700 billion bailout plan--by invoking the specter of economic Armageddon and martial law--the former G-Sax chairman proceeded to set up a program for buying back mortgage-backed securities (MBS) and other junk paper from his banking buddies. Paulson argued that removing the crappy loans would help the banks get back on their feet and start lending again. Of course, no one could really figure out how the process was going to be executed, but maybe that's just nit-picking. Fortunately, Paulson never got a chance carry out his plan. He was torpedoed by the stock market which plunged seven days in a row losing nearly 20 percent of its value until Paulson threw in the towel and did what 200 economists had suggested from the very beginning---buy preferred shares in the banks so they could rev-up their credit engines again. (http://www.informationclearinghouse.info/article21313.htm)

COLIN TWIGGS OF INCREDIBLE CHARTS (AUSTRALIA)

Borrowing Your Way Out Of A Debt Crisis By Colin Twiggs November 25, 2008 5:00 a.m. ET (9:00 p.m. AET) Barack Obama boasted that his new economic recovery program will create 2.5 million new jobs. The question is what kind of jobs? What the US needs are manufacturing jobs. Preferably in industries with strong export sales. What it does not need are more roads, more community halls, more schools, more dams or more bridges. These may stimulate consumption in the short term, but will have a negligible impact on GDP in the long run. To restore long-term stability the program will need to address the "terrible twins": the current account deficit and the budget deficit. From the mid-1990s the burgeoning current account deficit reflected rising external debt, needed to maintain strong levels of new investment. External debt was needed for one simple reason: national savings were shrinking in response to artificially low interest rates maintained by the Fed to "stimulate" the economy. In effect the US traded a higher exchange rate in return for cheap finance from China, Japan and other East Asian economies. Asian manufacturers benefited from the artificially low exchange rate which stimulated exports. The US financial sector in turn benefited from artificially low interest rates, encouraging consumers to borrow cheap money and invest in inflationary assets such as housing. While the financial sector and consumers gained in the short term, we are now aware of the long-term consequences. The strategy backfired with the collapse of the housing bubble damaging the financial sector, the housing market, the stock market and the manufacturing sector. There is a further hidden cost of the earlier trade-off, however. That is the loss of manufacturing jobs. Manufacturers could no longer compete in export markets against the very same East Asian economies, due to the strong dollar. In short, the US traded cheap finance for manufacturing jobs. This appears to have been a conscious decision rather than gross stupidity. I suspect that the financial sector bought more influence in Washington than the manufacturing sector. And sold legislators on the idea that the future lay in the (then) rising share of GDP attributable to financial services: "Growing more high-paying white-collar jobs in the US and exporting cyclical blue-collar jobs to Asia will eliminate inflation and make us recession-proof". They drank the Kool-Aid. In 2001 private investment fell by almost 4 percent, which should have resulted in a smaller current account deficit, but was replaced by a growing federal budget deficit. In addition to artificially low interest rates, which discouraged savings, the Federal government also ran increasingly large deficits in an attempt to stimulate the economy, funding the shortfall with more external debt. The situation is now a whole lot worse with the federal government forced to run even larger deficits in order to shore up the banking system and create "2.5 million jobs". Funded by even more external debt. A recession is supposed to reduce the current account deficit, but this was not allowed to happen during 2001 because of the strong dollar policy. And is unlikely to occur in 2008/2009. David Axelrod, senior adviser to the president-elect, warned that automakers would have to come up with a long-term plan to restructure the industry before they received any federal assistance. I would suggest that the federal government faces similar tough decisions in order to assure their own long-term survival. What is needed is a weaker dollar. To discourage imports and stimulate manufacturing exports. And to minimize federal budget deficits as far as humanly possible. The US has one major advantage over emerging economies who find themselves in a similar position: external debt is denominated in US dollars. Depreciation of the dollar would not result in an increase in external debt as with an emerging economy. Rather, the cost of the depreciation would be borne by creditors. While this may harm the dollar's status as a reserve currency, it should be weighed against the benefits of export-led growth. For those interested in the nuts and bolts of current account deficits and capital account flows, I recommend this excellent though lengthy 2004 paper by Nouriel Roubini and Brad Setser: http://pages.stern.nyu.edu/~nroubini/papers/Roubini-Setser-US-External-Imbalances.pdf (65 PAGE PDF DOC)

DAN NORCINI'S COMMENTS AND CHARTS

Gold In US Dollars Is Only Part Of The Picture Posted: Nov 24 2008 By: Dan Norcini Post Edited: November 24, 2008 at 10:36 pm Dear Friends, Linked below (GO TO JSMINESET.COM FOR THE LINKS) are a few charts detailing the price of gold when viewed through the prism of differing major currencies. As you can see, gold in British Pound terms has notched another new all time high. So did gold priced in Canadian Dollar terms. Gold in Australian dollar terms is just a wee bit below its all time high. The same goes for gold in terms of the Russian Ruble. Gold in Euro terms is 20 euros below its all time high. The weakest gold chart is Yen-Gold which has been hit because of the strength in the Yen coming from the carry trade unwind. That has served to push the yen sharply higher which depresses the price of gold when measured in those terms. We Americans tend to view the price of gold only in US Dollar terms forgetting that a major portion of the world does not do so. It is my opinion that those American-based analysts who make their prognostications of gold without considering the price in terms of the other major currencies of the world do their readers a huge disservice. Ask yourself a simple question as you look at the following price charts – does this look like a metal that is experiencing a deflationary psyche among a large portion of the global investment community or does it look like a metal that is preserving the wealth of millions of international investors as the global economic chaos expands? Keep this in mind whenever you read some self-proclaimed gold expert dissing the metal because it is not trading back above $1000 US and is anxious to short it. Such gloom and doom gold dirges would be met with incredulous scorn in the UK and perhaps with amusement in Canada and elsewhere. Australian investors must be thinking that American beers are missing a few vital ingredients if this is the kind of thinking that they are producing. Whether some folks want to admit it or not, gold is an international currency of last resort and always will be, no matter how much the US based elites and their paper love-sick puppies want to pooh-pooh it. Trader Dan

4:25AM PST TUESDAY GOOD MORNING GOLD BUGS!

TODAY'S REPORTS: GDP Consumer confidence Tomorrow there are a slew of reports, and it's the last day of trading before Turkey Day so the market can be a bit crazy from think volume. Although, some of the biggest moves I've seen have happened on the day before a holiday, so be on your toes. We could have a boomer of a rise Wednesday if people decide to jump into gold before a long weekend if they are afraid of what could happen if our "glorious leaders" have four whole days to fuck things even up more than they have already. About the only thing they haven't done so far to us directly is gas us to death. No particular news stands out this morning, but gold is looking very good to keep rising.

RALPH NADER ON O'BOMB'A

Changing With Retreads The Third Clinton Administration By RALPH NADER November 21, 2008 "Counterpunch" -- While the liberal intelligentsia was swooning over Barack Obama during his presidential campaign, I counseled “prepare to be disappointed.” His record as a Illinois state and U.S. Senator, together with the many progressive and long overdue courses of action he opposed during his campaign, rendered such a prediction unfortunate but obvious. Now this same intelligentsia is beginning to howl over Obama’s transition team and early choices to run his Administration. Having defeated Senator Hillary Clinton in the Democratic Primaries, he now is busily installing Bill Clinton’s old guard. Thirty one out of forty seven people that he has named so far for transition or appointments have ties to the Clinton Administration, according to Politico. One Clintonite is quoted in the Washington Post as saying – “This isn’t lightly flavored with Clintons. This is all Clintons, all the time.” Obama’s “foreign policy team is now dominated by the Hawkish, old-guard Democrats of the 1990,” writes Jeremy Scahill. Obama’s transition team reviewing intelligence agencies and recommending appointments is headed by John Brennan and Jami Miscik, who worked under George Tenet when the CIA was involved in politicizing intelligence for, among other officials, Secretary of State Colin Powell’s erroneous address before the United Nations calling for war against Iraq. Mr. Brennan, as a government official, supported warrantless wiretapping and extraordinary rendition to torturing countries. National Public Radio reported that Obama’s reversal when he voted for the revised FISA this year relied on John Brennan’s advise. For more detail on these two advisers and others recruited by Obama from the dark old days, see Democracy Now, November 17, 2008 and Jeremy Scahill, AlterNet, Nov. 20, 2008 “This is Change? 20 Hawks, Clintonites and Neocons to Watch for in Obama’s White House.” The top choice as White House chief of staff is Rahm Emanuel—the ultimate hard-nosed corporate Democrat, military-foreign policy hawk and Clinton White House promoter of corporate globalization, as in NAFTA and the World Trade Organization. Now, recall Obama’s words during the bucolic “hope and change” campaign months: “The American people…understand the real gamble is having the same old folks doing things over and over and over again and somehow expecting a different result.” Thunderous applause followed these remarks. “This is more ‘Groundhog Day’ then a fresh start,” asserted Peter Wehner, a former Bush adviser who is now at the Ethics and Public Policy Center. The signs are amassing that Barack Obama put a political con job over on the American people. He is now daily buying into the entrenched military-industrial complex that President Eisenhower warned Americans about in his farewell address. With Robert Rubin on his side during his first photo opportunity after the election, he signaled to Wall Street that his vote for the $750 billion bailout of those speculators and crooks was no fluke (Rubin was Clinton’s financial deregulation architect in 1999 as Secretary of the Treasury before he became one of the hugely paid co-directors tanking Citigroup.) Obama’s apologists say that his picks show he wants to get things done, so he wants people who know their way around Washington. Moreover, they say, the change comes only from the president who sets the priorities and the courses of action, not from his subordinates. This explanation assumes that a president’s appointments are not mirror images of the boss’s expected directions but only functionaries to carry out the Obama changes. If you are inclined to believe this improbable scenario, perhaps you may wish to review Obama’s record compiled by Matt Gonzalez at Counterpunch. Ralph Nader is the author of The Seventeen Traditions.

JIM SINCLAIR'S TERRIFYING RECOMMENDATION

What MUST Be Done To Avoid Financial Destruction Posted: Nov 22 2008 By: Jim Sinclair Post Edited: November 22, 2008 at 10:48 pm Filed under: General Editorial My Dear Extended Family, Things are now "Out of Control." This international financial crisis is now out of control as the world asks if the USA has two presidents, one president or no president at all. It would appear that Paulson is in financial control with Bernanke as his second. I warned you by personal email long before the statement was proven totally correct that “This is it.” That was followed by “This is it, and it is now.” Many people laughed it off. This is it, and it is now. Now it is out of control. Now we enter the Collapse of Confidence period. Then we begin the Weimar Experience. It has all hit the fan, and still the absolute majority have no clue. The OTC derivative dealers broke the system into millions of pieces of glass. This broken glass cannot be put back together. It is heart rending to see a picture of GM autoworkers holding a prayer meeting for their retirement funds. The retirement money was never funded. It is a lost hope. This is another responsibility the government has undertaken that is going to go wild. Those of you still in freeze frame are headed for lines around your bank. Your bank will likely be acquired by another bank that also is in deep trouble. The US dollar, like a leaderless company, will lose its respect and therefore value. In order of importance the following MUST be done unless you want to be one of the suffering masses that will be all too visible this winter: 1. You must have your assets held anywhere they are in true custodial-ship accounts. That type of account at a bank or broker states clearly that the assets held there are not on the balance sheet of the host financial entity. Those assets are clearly segregated in your name. This must be reviewed by counsel to be sure you have what you think you have. Don’t cheap out. All you have is depending on the validity of true custodial-ship accounts. You cannot know all the banks are broke, however I feel ALL banks are broke because finance is an intertwined system that if visible would look like a spider’s web. Problems on the top will materialize all along the web. Therefore the singular most important step you must take is the establishment of a true custodial-ship account. Do not assume you have this type of account unless a competent attorney reviews the account papers. 2. I am extremely concerned about those of you who persist in holding certificates for gold rather than holding the actual metal either delivered to you or held for you in a true custodial-ship type account. The scams out there in gold are plentiful. The only way to avoid these scams absolutely is to have your gold in your own possession. Every other means of holding gold is steps away from perfection. Some will be ok, but many will not. 3. Why would anyone fail to either take paper certificates or order their financial agent to make direct registration book entry at the transfer agent? In most cases you only have until year-end to accomplish this strategy. 4. Withdraw from ETFs. 5. If you carelessly keep large assets with your broker you are as mad as a hatter. The FDIC DOES NOT have the money to guarantee all they are undertaking. Withdraw excess money constantly from any net broker. If you are so stubborn that you think you can trade to insure yourself when your funds are not making money while still getting your money that counts you are nuts. Admit to yourself you are nothing more than a gambling addict in a downward spiral. 6. Leave no gold or coins with any coin dealer. 7. If you can withdraw from your corporate retirement plan do it. 8. Withdraw from credit unions. 9. Withdraw from all money market instruments. 10. This is it. 11. It is now. 12. It is out of control NOW. The next two months are going to be shocking, but nothing compared to what you will have to experience in 2009. Respectfully yours, Jim