5:09AM PST GOLD MAKES A NEW HIGH, THE H&S PATTERN IS VIOLATED

VERY LIGHT VOLUME ON THESE UP MOVES. NEXT TWO OLD HIGHS TO EXCEED ARE: $1001.20 $1005.30 THE ULTIMATE HIGH FOR THE APRIL09 CONTRACT IS AT $1050.00

5:05AM PST GOLD MOVING UP VERY GRADUALLY ON LIGHT VOLUME, THE NY OPEN SHOULD BE INTERESTING

MOVING AVERAGES ON A DAILY CHART FEB 20, 2009

The higher the gold price goes above all the MAs, the more they want to pull back to seek equilibrium.

4:55AM PST TWO PULL BACK SCENARIOS

4:58AM PST WARNING!!! A SHORT TERM INVERSE HEAD & SHOULDERS PATTERN HAS FORMED, RESOLVES DOWN

4:47AM PST GOLD PULLS BACK ON LIGHT VOLUME

Notice that gold has broken out of the dark blue down flag and has reached all the way up to the top line of the dark green intermediate trend channel and is now dancing around on the line looking for support. The low volume on this move concerns me, but that will all change as we near the NY open. They, of course, will do everything possible to keep gold BELOW $1000, but that round number is NOT as big a deal, having already been exceed months go, and can be exceeded easily by tens of dollars before pulling back to that level, which should logically become a support level just by virtue of it's round number significance.

4:35AM PST GOLD TOPS AT 9957 FOR NOW AND PULLS BACK

The other indicator markets don't mean much right now. This rise was on only 1200 contract up volume in the last 30 minutes (4am to 425am pst) and even less in the 30 minutes previous to that time segment (3:30am to 4am pst) Nothing really explains this rise in gold except PANIC RUSH INTO GOLD AS A SAFE HAVEN! Dow is down over 135 points but just turned up a bit Bonds rose with gold but have dropped with a slight up turn Oil has been trending down short term to the 38s Yen and Euro just don't matter In fact NONE of these markets' movements would help you predict gold's movement. The Dollar's high on Feb 20, 2009 was .8886. It is currently at .8804 moving up from a low of .8774

4:26AM PST FRIDAY GOLD ZOOMS TO 995

30 MINUTES before I wake up gold explodes above 990.\ Then I have trouble making my remaining computer work. I'm online now and have a working order placing system on my last computer. I wonder what the gods will throw at me next.

FROM MARKET WATCH THIS MORNING 2/19/09

ciscokid New US stock market terminology. > CEO --Chief Embezzlement Officer. > > CFO-- Corporate Fraud Officer. > > BULL MARKET -- A random market movement causing an investor > to mistake > himself for a financial genius. > > BEAR MARKET -- A 6 to 18 month period when the kids get no > allowance, the > wife gets no jewelry, and the husband gets no sex. > > VALUE INVESTING -- The art of buying low and selling lower. > > > P/E RATIO -- The percentage of investors wetting their > pants as the market > keeps crashing. > > BROKER -- What my broker has made me. > > STANDARD & POOR -- Your life in a nutshell. > > STOCK ANALYST -- idiot who just downgraded your stock. > > STOCK SPLIT -- When your ex-wife and her lawyer split your > assets equally > between themselves. > > FINANCIAL PLANNER -- A guy whose phone has been > disconnected. > > MARKET CORRECTION -- The day after you buy stocks. > > CASH FLOW-- The movement your money makes as it disappears > down the toilet. > > > INSTITUTIONAL INVESTOR -- Past year investor who's now > locked up in a nuthouse. > > PROFIT -- An archaic word no longer in use.

7:00AM PST GT IS DOWN WITH COMPUTER PROBLEMS FOR A LONG TIME

I can't log on to any of my order placing platforms. I may have to do a complete restore to all my computers as none of the tech support people can figure out the problem, so I have to go back to square one and start fresh to eliminate all possible problems. Should take a long time.

FROM MARKET WATCH THIS MORNING 2/18/09

Gold demand surpasses $100 billion last year: WGC By Moming Zhou Last update: 9:08 a.m. EST Feb. 18, 2009Comments: 3 NEW YORK (MarketWatch) -- Demand for gold surpassed $100 billion last year for the first time ever on increased industrial and jewelry consumption and as investors bought into the metal as a safe haven, the World Gold Council reported Wednesday. Gold demand, including jewelry consumption, industrial demand, and identifiable investment such as bars, coins, and gold exchange-traded funds, hit $102 billion in 2008, up 29% from a year ago. In tonnage terms, gold demand rose 4% to 3,659 tons, the WGC said.

VIOLENCE COMING LATE THIS YEAR AS POPULATION REVOLTS?

LINK CREDIT TO JSMINESET.COM RT Guest February 11, 2009, 4:40 Gerald Celente In 2009 we’re going to see the worst economic collapse ever, the ‘Greatest Depression’, says Gerald Celente, U.S. trend forecaster. He believes it’s going to be very violent in the U.S., including there being a tax revolt. http://www.russiatoday.com/guests/detail/2114

MIKE WHITNEY ARTICLE

Trouble at Treasury Geithner gets the keys to the henhouse By Mike Whitney http://informationclearinghouse.info/article22025.htm February 17, 2009 "Information Clearinghouse" --- The Obama Team has a big problem on their hands; Timothy Geithner. Geithner was picked as Treasury Secretary because he is a trusted ally of the big banks and has a good grasp of the intricacies of the financial system. The problem is that Geithner can't handle the public relations part of his job. His big debut in prime-time last Tuesday turned out to be a complete dud. He was thoroughly unconvincing and looked like a nervous teenager at a speech contest. He fizzled on stage for 25 minutes while the little red box in the corner of the TV screen--which shows the current Dow Jones Industrials--plummeted nearly 400 points. It was a total disaster and one that is sure to be repeated over and over as long as Geithner is at Treasury. Not everyone can be a charismatic orator like Obama and nothing short of a personality transplant will fix Geithner. He lacks gravitas and doesn't inspire confidence. That's a problem since, the administration's main objective is to restore public confidence and get people spending again. They're just shooting themselves in the foot by using him as their pitchman. Eventually, Geithner will either have to be tossed overboard or strapped to Obama like a papoose so he can share in the president's popularity. Otherwise he will continue to be a millstone.

PAUL CRAIG ROBERTS ARTICLE

The People Be Damned The President of Special Interests By Paul Craig Roberts http://informationclearinghouse.info/article22018.htm February 17, 2009 "Information Clearinghouse" -- - The Bush/Obama bailout/stimulus plans are not going to work. Both are schemes hatched by a clique of financial insiders. The schemes will redistribute income and wealth from American taxpayers to the shyster banksters, who have destroyed American jobs, ruined the retirement plans of tens of millions of Americans, and worsened the situation of millions of people worldwide who naively trusted American financial institutions. The ongoing theft has simply been recast. Instead of using fraudulent financial instruments, the banksters are using government policy.

I RECOMMEND THIS ARTICLE TO YOU...READ IT FROM THE LINK PROVIDED AND READ ALL THE LINKS WITHIN IT

Warning To All Americans.You Are About To Be Destroyed http://www.whatdoesitmean.com/indexnow.htm -- Sorcha Faal GT sez: As I explained previously... I don't believe everything Sorcha Faal writes... but you have to admit that it piques your interest to consider that many of the things he/she has said in the past that seemed 'way out there', HAVE COME TRUE. Did anyone believe THE HOLOCAUST at the outset? Very strange and despicable things will come to light very soon. DON'T CLOSE YOUR EYES OR COVER YOUR EARS.

FROM GARY NORTH: THE COLLAPSE OF EUROPEAN BANK SYSTEM

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 833 February 17, 2009 THE LOOMING COLLAPSE OF EUROPEAN BANKING The banking system of Europe is at the edge of the abyss. A brief story by "The Telegraph" revealed this last week. The original was almost immediately deleted. A new version was substituted. You can see the original headline on Google: European banks may need £16.3 trillion bail-out, EC document warns ... http://www.garynorth.com/snip/790.htm There are dozens of these links. I read the story last week. I saved the link. But, lo and behold, when I clicked my saved link on Monday morning, the story did not mention a specific figure. There was a reason for this. The editors at "The Telegraph" had taken out the following paragraphs: European Commission officials have estimated that impaired assets may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the trading book total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets. In addition, so-called 'available for sale instruments' worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion. http://www.garynorth.com/snip/794.htm Fortunately, web sites around the globe have posted the deleted paragraphs. Converted into dollars, £16.3 trillion euros are the equivalent of $25 trillion. The original paragraphs can be found in several links in the Google list of headlines. Why did the editors do this? A call from some government bureaucrat? Or the realization that the article might start a bank run? I think the latter. In either case, it's scary. The current article begins with a lie: "Last updated: 6:34 GMT, 11 Feb 2009." WHAT THE EUROPEAN ESTABLISHMENT IS FACING NOW The original February 11 story was a shocker. The author claims to have seen a secret European Commission report. The report estimates that losses (write-downs) by European banks will be in the range of $25 trillion. If true, then to save the banking system, European governments will have to find an extra $25 trillion, fast. There is only one source of such funding: the central banks, mainly the European Central Bank (ECB). For comparison's sake, consider the $700 billion banking bailout in the United States last fall. Of this, only about half has been spent. That was sufficient bailing wire and chewing gum to keep the American banking system going. More will be needed, but so far, this has sufficed. The Federal Reserve did a lot of asset swaps in 2008 -- Treasury debt for toxic assets -- and pumped in an extra trillion dollars or so. But the system has held. Adding these together -- the increase in the monetary base and $350 billion in bailout money -- the total is around $1.5 trillion. Then think "$25 trillion." This is a sobering thought for some, and a reason to get unsober, fast, for others. The European Central Bank will have to serve as the lender of last resort. There are over a dozen national EC governments. How will they coordinate their respective bailouts? Think of a dozen Barney Franks and a dozen Nancy Pelosis. Think of a dozen Henry Paulsons. Think of a dozen Gordon Browns. Terrifying, isn't it? Here is the story, as airbrushed by the editors. "Estimates of total expected asset write-downs suggest that the budgetary costs -- actual and contingent -- of asset relief could be very large both in absolute terms and relative to GDP in member states," the EC document, seen by The Daily Telegraph, cautioned. Very large? That's it? Just very large? Twenty-five trillion dollars in losses is merely very large? That is twice the size of the gross domestic product of European Community. It is not as though there is a lot of time to deal with this. Bank runs can take place very fast. What if Europeans try to pull out currency? There will not be enough currency. So, they will move their assets to American or Japanese banks. They will have to sell their domestic currencies to buy dollars and yen. Their currencies will crater. "It is essential that government support through asset relief should not be on a scale that raises concern about over-indebtedness or financing problems." Wait a minute. If asset relief is not on this scale, then what will sustain a bankrupt European banking system? You are telling me that these banks are sitting on top of $25 trillion in losses, and this can be concealed? Does no one audit these banks? The secret 17-page paper was discussed by finance ministers, including the Chancellor Alistair Darling on Tuesday. National leaders and EU officials share fears that a second bank bail-out in Europe will raise government borrowing at a time when investors -- particularly those who lend money to European governments -- have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain to pay it back. National leaders apparently have a clear perception of the public's lack of faith in the in specific governments' ability to repay. But that does not answer the crucial question: "What are the depositors' fears regarding their individual banks?" It's one thing for a government to be unable to pay back loans over the next two decades. Of course they will not pay it back. No national debt is ever paid back. It is rolled over. It's another thing to deal with bank runs. The Commission figure is significant because of the role EU officials will play in devising rules to evaluate "toxic" bank assets later this month. New moves to bail out banks will be discussed at an emergency EU summit at the end of February. The EU is deeply worried at widening spreads on bonds sold by different European countries. In line with the risk, and the weak performance of some EU economies compared to others, investors are demanding increasingly higher interest to lend to countries such as Italy instead of Germany. Ministers and officials fear that the process could lead to vicious spiral that threatens to tear both the euro and the EU apart. Ministers and officials have got the picture. They are facing a breakdown of Europe's economy. If the bailouts are insufficiently large in every nation to reduce depositors' fears regarding their banks, there will be a rush out of the euro and into dollars and yen. If the bailouts are sufficiently large to stem the tide on bank fears, then there will be a rush by bond investors out of government bonds. This will make the existing recession much worse. If each country has widely different rates, the euro will break down. The poorer countries will borrow at low rates from the European Central Bank. The Germans will revolt. They could demand an end to the ECB, which will have become a welfare agency for the Mediterranean governments. That would end the euro. That would end the attempt to create a new European order. This thought brings to mind one of Johnny Mercer's masterpieces. So you met someone who set you back on your heels - goody, goody You met someone and now you know how it feels - goody, goody You gave him your heart too, just as I gave mine to you And he broke it in little pieces, now how do you do? You lie awake just singing the blues all night - goody, goody And you think that love's a barrel of dynamite Hooray and hallelujah, you had it coming to y'a Goody goody for him, goody goody for me I hope you're satisfied, you rascal you, I hope you're satisfied 'cause you got yours But I digress. "Such considerations are particularly important in the current context of widening budget deficits, rising public debt levels and challenges in sovereign bond issuance," the EC paper warned. http://www.garynorth.com/snip/789.htm These considerations are indeed important. But solutions are a lot more important. The report is 17 pages long. The solutions -- if any -- will be a lot longer. SO FAR, SO GOOD So far, the euro has not collapsed. It has fallen, but there is no rush for the exits. Why not? These answers come to mind. 1. The story is not true: no such document. 2. The document is wrong: banks are not really that much in the hole. 3. The banks are in the hole, but public faith in their governments remains high. 4. The report is true, but it is not believed by currency speculators. 5. The report is true, but currency speculators believe that the governments and central banks can handle it without major shifts in currency values. The response of the British government was swift: to demand a revision of the original article. This tells me the article was true. European bank stocks have fallen since the article was published, but they are not in free-fall. In my view, the European public still has faith that the governments and the central banks will successfully intervene to restore commercial banks. But if the original article was correct, that 44% of bank balance sheets have disappeared, then the public is living in la-la land. The entire structure of Europe's capital markets is at risk. Or, I should say, what remains of the capital markets is at risk. How are governments going to replenish lost capital? It's gone. It's missing in action. EASTERN EUROPE Ambrose Evans-Pritchard has explained this in a "Telegraph" article published on February 15. If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Gotterdammerung. He was referring to loans to Eastern Europe. He used Austrian banking as the example. The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc. The Vienna press said Bank Austria and its Italian owner Unicredit face a "monetary Stalingrad" in the East. . . . Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay -- or roll over -- $400bn this year, equal to a third of the region's GDP. Good luck. The credit window has slammed shut. Not even Russia can easily cover the $500bn dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36pc of its foreign reserves since August defending the rouble. "This is the largest run on a currency in history," said Mr Jen. This reminds me of the bankruptcy of Long-Term Capital Management in 1998. That hedge fund had bought ruble-denominated assets on a leveraged basis: 30 to one. When the Russian central bank failed to defend the ruble, LTCM went bust in a few days. It had to be bailed out by $3.6 billion in loans from New York banks. Today, the European banks are gutted, not a lone hedge fund. Russia is going belly-up. It will have to liquidate most or all of its reserves of Western currencies. It has stopped buying U.S. Treasury debt. It is selling. In Poland, 60pc of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story. As an act of collective folly - - by lenders and borrowers -- it matches America's sub-prime debacle. There is a crucial difference, however. European banks are on the hook for both. US banks are not. Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74pc of the entire $4.9 trillion portfolio of loans to emerging markets. They are five times more exposed to this latest bust than American or Japanese banks, and they are 50pc more leveraged (IMF data). This is the ringing of the bell. The bell of the Great Depression of the 1930's rang on Wall Street in October 1929. But that was not the cause of the Great Depression. The causes were these: (1) monetary base expansion in the 1920s, (2) the cessation of this expansion in 1929; (3) the governments' raising of tariff and trade barriers in 1930 all over the West, and (4) the collapse of the Austria's Credit Anstalt Bank in 1931. In the USA, we saw the first two, 2000-2007. Central banks will inflate to keep any major bank from collapsing. But the trend is ominous. Russia and Eastern Europe are gonners. European banks that lent to them are, too. So is the purchasing power of the euro -- and maybe even the actual euro. I can see Germany cutting and running sometime before 2011. Evans-Pritchard pulls no punches. This is a gutsy forecast. Whether it takes months, or just weeks, the world is going to discover that Europe's financial system is sunk, and that there is no EU Federal Reserve yet ready to act as a lender of last resort or to flood the markets with emergency stimulus. If he is correct about the inability of the ECB to imitate the Federal Reserve System, this means a collapse of the banks. That means the collapse of Europe's economy. "This is much worse than the East Asia crisis in the 1990s," said Lars Christensen, at Danske Bank. "There are accidents waiting to happen across the region, but the EU institutions don't have any framework for dealing with this. The day they decide not to save one of these one countries will be the trigger for a massive crisis with contagion spreading into the EU." He ends with this: "If one spark jumps across the eurozone line, we will have global systemic crisis within days. Are the firemen ready?" (http://www.garynorth.com/snip/793.htm) The capital markets do not indicate agreement with his assessment. People still trust the banking system. Generally, I trust capital markets rather than journalists. But I think the report is too explosive to ignore. I think the optimism of investors is greater than the optimism of European bankers, bureaucrats, and newspaper editors. --------------------- CONCLUSION The West's economy really is at the edge of a leveraged disaster. The politicians know only one answer: deficit spending. The central bankers have only one significant tool: monetary inflation. The speed of events is increasing. The markets don't reflect this yet. This gives time to a few people to get out. But the vast majority cannot get out. There are too few escape hatches open. ------------------------------------------------------

GT HAVING COMPUTER AND BLOG PROBLEMS TODAY

I'm posting this on my one good computer that will bring up a correct form to post on Blogger. My usual machine is giving me all sorts of crazy problems. I have to do a complete system restore today. I have several important articles to post but can't get them across to this computer right now as they are from emails that I only receive on the troublesome computer. I am starved for time and sleep so I can't post anything more today until I get the problems fixed. You can still post on the blogs and I can put up a general headline as on TALKBACKTOGOLDTRADER, so feel free to do that. I can respond to your post, but don't have the time until later after I fix my computer, which is going to take a long time what with backups, etc.

SINCLAIR SAYS 'EUROPE UNWINDING', AS OF MONDAY 2/16/09...GOLD RISES TO 961.10 AS OF 10PM PST AND MAY GO HIGHER OVERNIGHT

Europe Unwinding Posted: Feb 17 2009 By: Jim Sinclair Post Edited: February 17, 2009 at 12:14 am Filed under: General Editorial Dear Friends, To underscore my statement that "It has hit the fan," please review the following: Forex failure continues in Poland Posted by Izabella Kaminska on Feb 16 21:43. GO TO JSMINESET.COM FOR THE WHOLE POST

FROM THE MW THREAD TODAY 2/16/09

Integral Barack Obama was seated next to a little girl on an airplane trip back to Washington. He turned to her and said, “Let’s talk. I’ve heard that flights go quicker if you strike up a conversation with your fellow passenger.” The little girl, who had just opened her book, closed it slowly and said to The Obama, “What would you like to talk about?” “Oh, I don’t know,” said the Obama. “How about What Changes I Should Make To America?” and he smiles. “OK,” she says. “That could be an interesting topic. But let me ask you a question first. A horse, a cow, and a deer all eat the same stuff - grass. Yet a deer excretes little pellets, while a cow turns out a flat patty, and a horse produces clumps of dried grass. Why do you suppose that is?” Obama, visibly surprised by the little girl’s intelligence, thinks about it for a second and finally says, “Hmmm, I have no idea.” To which the little girl replies, “Do you really feel qualified to change America when you don’t know shit?”

H. L. MENCKEN

"Democracy is the theory that the common people know what they want and deserve to get it good and hard." For more quotes from Mencken: http://www.brainyquote.com/quotes/authors/h/h_l_mencken.html

THERE IS NO END TO WHAT OUR 'LEADERS' WILL TAX US FOR

What's next? A tax on breathing? http://edition.cnn.com/2006/POLITICS/06/27/pimp.tax/ This list is from today's MW Headline thread: guru1 People focus on Income tax, but let's not forget the others. They either get you this way, or thru the unkindest tax of all: a money supply increase in the hands of a select few. Accounts Receivable Tax Building Permit Tax Capital Gains Tax CDL license Tax Cigarette Tax Corporate Income Tax Court Fines (indirect taxes) Dog License Tax Federal Income Tax Federal Unemployment Tax (FUTA) Fishing License Tax Food License Tax Fuel permit tax Gasoline Tax (42 cents per gallon) Hunting License Tax Inheritance Tax Interest expense (tax on the money) Inventory tax IRS Interest Charges (tax on top of tax) IRS Penalties (tax on top of tax) Liquor Tax Local Income Tax Luxury Taxes Marriage License Tax Medicare Tax Property Tax Real Estate Tax Septic Permit Tax Service Charge Taxes Social Security Tax Road Usage Taxes (Truckers) Sales Taxes Recreational Vehicle Tax Road Toll Booth Taxes School Tax State Income Tax State Unemployment Tax (SUTA) Telephone federal excise tax Telephone federal universal service fee tax Telephone federal, state and local surcharge taxes Telephone minimum usage surcharge tax Telephone recurring and non-recurring charges tax Telephone state and local tax Telephone usage charge tax Toll Bridge Taxes Toll Tunnel Taxes Traffic Fines (indirect taxation) Trailer Registration Tax Utility Taxes Vehicle License Registration Tax Vehicle Sales Tax Watercraft Registration Tax Well Permit Tax

WATCH THIS AND LEARN

The Money Masters - How International Bankers Gained Control of America - Google Video 3:35:19 http://video.google.com/videoplay?docid=-515319560256183936 You can also just Google the title for other sites that have the video.

NOTICE: READERS OF THIS BLOG, PLEASE SEE THE NEW SECTION TO THE RIGHT FOR 'CURRENT VIEWERS'

CLICK ON 'FOLLOW' AND LET ME KNOW WHO MY REGULAR VIEWERS ARE. EVEN IF YOU ARE A ONE-TIME VIEWER, PLEASE LET ME KNOW SO I CAN MODIFY THIS BLOG TO ATTRACT A WIDER AUDIENCE. The Counter reflects those followers who add their User Names as of February 15, 2009

Job Losses Pose a Threat to Stability Worldwide

CREDIT TO JSMINESET.COM FOR THE LINK http://www.nytimes.com/2009/02/15/business/15global.html?_r=1&partner=rss&emc=rss

STARTING A GARDEN: SOME LINKS TO ARTICLES

http://www.nytimes.com/2009/02/15/opinion/15sun4.html?ref=opinion Use this link to see some more links to gardening information. THE VERY BEST BOOK ON GARDENING I HAVE EVER FOUND IS: THE JOY OF GARDENING by Dick Raymond. BUY IT and you will never need another book on gardening again. Use this Amazon link to get it for $8 used: http://www.amazon.com/Joy-Gardening-Garden-Way-Book/dp/0882663194 or Google the title and find other sources. You will value it and protect it like the family Bible. You can have a garden no matter what size space you have. You can have a garden in pots on a movable platform that you can move to the sunny areas of a tight space just by putting the post on a large flat platform on wheels or an old flat bed trailer which you can make from scrap. Don't forget that you can grow indoors using GROW LIGHTS...the pot growers have been doing it for years. Eat what you grow while it's fresh, then FREEZE the left overs in vacuum packed bags using a Tilia system. OR, learn to CAN foods...it's so darn simple and enjoyable you will go crazy when you taste some of the things you make...even the mistakes. Just don't kill yourself by not heating the product enough. Error on the side of CLEANLINESS and HEAT SANITIZING (boiling).

NEW YORK TIMES ARTICLE: DO WE NEED A NEW INTERNET?

http://www.nytimes.com/2009/02/15/weekinreview/15markoff.html?_r=1&hp Know that your internet interactions are NOT safe. They may soon be used against you. The internet could easily be brought down, which would cripple all business, banking and social interactions. Do the best you can to be as internet/computer literate as you can become, to the greatest level you can attain, including programming and hacking if only for defensive purposes. It's really not a hard field of study to understand. You just have to PRACTICE until it becomes second nature. Its languages make more sense than regular English.

February 15 - 2009 Obama Turns US Over To ‘New World Order’ On February 17th

URL TO ARTICLE: http://www.whatdoesitmean.com/index1207.htm I read Sorcha Faal ONLY because he/she (there is speculation as to who this person really is) brings up very interesting points that I find nowhere else. Quite often his/her message sounds crazy and outrageous and many statements made seem to blow simple occurances out of all proportion. I read it all with a critical eye. So don't think I BELIEVE it all. I present this to you so you can at least have your interest piqued as to what MAY BE HAPPENING. I personally, tend to believe that the worst is ABSOLUTELY ABOUT TO HAPPEN. It's just the details and timing that I don't always agree with. But it is absolute TRUE that the ILLUMINATI's GRAND SCHEME to control the world in a NEW WORLD ORDER is being pushed forward in RUSH MODE while they have the world's peoples in panic mode because of the economic crisis that they engineered for just this purpose. Be sure to click on all the links in this article. And read CRITICALLY, but DO be concerned. What O'Bomb'a has already done is just an extension of the disaster of the Bush years in power. The elites of this world will NEVER give up their control of the mechanisms of POWER or of THE TRUE WEALTH of this planet.

FOUNDATION FOR ECONOMIC EDUCATION (FEE) HAS SOME GOOD ARTICLES TO READ

URL FOR FEE: http://fee.org/economics/economic-stimulus-bill-arra-of-2009/ I have linked to the page with the current articles, but you should click on home and see what the site offers. Then you should go to the site every now and then to see what's new. You should review the new Stimulus Bill to see what it is and will do. Also read the three articles on The Great Depression at the bottom to get a better understanding of what caused it. Be very critical about all information you read about The Great Depression as many falsehoods are still flying about. You have to understand Austrian Economics to ever truly understand Economics and how things truly work.

SINCLAIR WARNS: IT'S OFFICIALLY 'OUT OF CONTROL'...HAVE YOUR AFFAIRS IN ORDER NOW OR SUFFER GREATLY

Officially “Out Of Control” Posted: Feb 14 2009 By: Jim Sinclair Post Edited: February 14, 2009 at 8:26 pm Dear Extended Family, I sent you a certain few emails that I consider to be the most important communications issued in my career that started in 1958. I am the son of what I know to have been the greatest Lone Wolf trader in Wall Street history ever, Bertram J. Seligman. He was a past master at his business and believed to be a market sensitive. I apprenticed to him, learned from him and inherited some of his ability, not all however. From this background of experience understanding and sensitivity the following flows. The emails of note: 1. Said, "This is it." 2. Said, "It is now." This communication is to inform you as of 2/13/09, "It is totally out of control." There is no longer any means of reversal of the beginning of the final phase of the downward spiral now solidly set in motion. For your sake, protect yourselves immediately. Be prepared for disruptions in distribution common to hyperinflation. 1. You should have already distanced yourself from your financial agents. If you haven’t you are headed for significant displeasure and strain. 2. Make sure you stay three months ahead on necessary items that could experience distribution delays such as prescribed medicine and preferred foods. 3. Even though real estate is far from a buy, if you can afford a second home outside of major cities it would serve a good purpose. 4. Own gold. 5. Consider that good gold shares of non-US companies incorporated in a non-US country operating in third country, traded on multiple exchanges are a means of money expatriation legally and in broad daylight if required. 6. For currencies, all you can do is own a spread held by a true custodial ship wherever that might be. Simply said, as of Friday February 13th, 2009 the situation is in confirmed "Out of Control" mode as this well engineered downward spiral enters into a terminal phase. The motive was profit and degree of the disintegration caused in the pursuit of this goal was not anticipated. The key event was when Lehman was flushed - all hell broke loose. The hell cannot be contained in any practical manner. I seek nothing of you, but the protection of yourselves. Respectfully yours, Jim

YOU ALL BETTER BE READING ELAINE MEINEL SUPKIS' CULTURE OF LIFE NEWS...EVERY DAY

MUST READ ARTICLE http://emsnews.wordpress.com/2009/02/13/us-debt-shooting-past-12-trillion/

VERY INFORMATIVE ARTICLE...THE WEB OF DECEIT EXPANDS

Found this article from a link in the comments section of one of Elaine Supkis' previous posts from Dec 2008 which she refers to in her current post of Feb 14, 2009. The links to other articles within this article should be read to begin to understand how interleaved all these criminals and criminal organizations are. GO TO URL: http://www.henrymakow.com/we_all_are_victims_of_a_giant.html Take the time to understand that THIS IS OUR ENTIRE ECONOMIC SYSTEM THAT IS A WORLD WIDE PONZI SCHEME! This can NOT be 'fixed' without realizing the total and complete BANKRUPTCY of the entire world economic system! PAY BACK IS A BITCH!

HAVE A VERY ROMANTIC VALENTINE'S DAY ALL...!

Okay guys, I hope you have all purchased your 'boner pills', you know, that crap they've been advertising UN-mercifully for months now. And I hope you bought a Vermont Teddy Bear to please that special 'child-woman' they have in their advertisement. You know, the females that do an accurate portrayal of Hugh Hefner's 'Girls Next Door'. Those brainless flesh puppets that some men think are the kind of female they should be seeking, instead of one with a brain. And of course we don't want to forget to send our loved one a Pajama Gram. And last but not least, a dozen of the most over-priced Red Thorn Plants (roses) that anyone has ever been humiliated into buying to retain that so-called 'love' that was supposed to have bound you and your loved one together back when you were both in that hormonal trance that drew you to one another. Love and Kisses Kiddies. By Sunday, you will be in the dog house once again.

THE MOVIE 'IDIOCRACY' IS ON COMEDY CENTRAL THIS WEEKEND

This is a very funny movie. It almost is NOT satire, but a real portrayal of our country, or what it will be soon. Look up the time on your local cable station. There are snippets of the movie on the internet, either YouTube or Google Videos. You can almost watch the whole movie that way.

GOLD ARTICLE IN THE WALL STREET JOURNAL

Capitalism Needs a Sound-Money Foundation Let's give the Fed some competition. Abolish legal tender laws and see whose money people trust. By JUDY SHELTON Let's go back to the gold standard. If the very idea seems at odds with what is currently happening in our country -- with Congress preparing to pass a massive economic stimulus bill that will push the fiscal deficit to triple the size of last year's record budget gap -- it's because a gold standard stands in the way of runaway government spending. http://online.wsj.com/article/SB123440593696275773.html Article recommended by Jacob Hornberger at FFF.org

FROM THE FUTURE OF FREEDOM FOUNDATION FFF.ORG

Thursday, February 12, 2009 Gun Control and Enemy Combatants by Jacob G. Hornberger Ever since Barack Obama’s election, gun and ammo sales have skyrocketed. Many online gun stores report “out of stock” for AK47s and AR15s, along with the ammunition for such assault rifles. Demand for these products, it appears, is insatiable. The reason for this enormous increase in demand seems to be concern that the Obama administration will enact another assault-weapons ban, perhaps even one that is more severe than the assault-weapons ban that expired in 2004. Gun owners seem to understand, as did our American ancestors, that gun ownership is a core feature of a free society. If I had to guess, I’m say that most of the people who are pro-Second Amendment are conservatives, which is ironic. It’s ironic because it was conservatives who enthusiastically supported President Bush’s assumption of omnipotent powers to wage his “war on terrorism,” powers that now reside in Barack Obama. Such powers include the enemy-combatant doctrine. How do the war on terrorism and its enemy-combatant doctrine relate to the Second Amendment? Here at The Future of Freedom Foundation, one of the principles we have long argued, especially with respect to civil liberties is this: Before you vest a public official with omnipotent powers, imagine first that the powers are being exercised by your worst enemy, and then decide whether it is still wise to do so. But conservatives didn’t listen. All that mattered was, “We can trust President Bush with omnipotent powers in the war on terrorism. He is our friend. He will protect us from the terrorists.” Then, much to the surprise and dismay of conservatives, Obama was elected president. Notwithstanding his much-vaunted campaign calling for “change,” Obama now wields all the war on terrorism powers that conservatives vested in Bush, including the power to seize any American and haul him way as a terrorist to a military prison camp, denying him due process and a jury trial, and subjecting him to treatment as a terrorist. That’s what the enemy combatant doctrine is all about. Thus, on the one hand, conservatives are concerned that President Obama is going to take away their guns. Yet, on the other hand, conservatives have vested Obama with the power to label them and everyone else enemy combatants, thereby empowering him (and his troops) to seize them and cart them away to a prison camp. Thus, conservatives are essentially saying, “We don’t want Obama to have the power to seize our guns but we do want him to have the power to seize us and to send us away to prison camps.” This week, Harvard Law Dean Elena Kagan, who will be representing the Obama administration before the Supreme Court, emphasized that the Obama administration will continue the Bush’s administration’s enemy-combatant doctrine. Why should that surprise anyone, even those who were expecting all that much-vaunted “change” that helped Obama get elected? When was the last time you saw any public official voluntarily giving up power? Given the omnipotent power to seize any American as enemy combatants, why should Obama care whether people still have the right to own guns? Even if Obama fully respects gun rights, what are the chances that he is going to permit enemy combatants to take their guns with them to prison camp? I’d say, not very high. Jacob Hornberger is founder and president of The Future of Freedom Foundation.

THIS FROM THE MW GOLD THREAD THIS MORNING 2/13/09 NO LINK GIVEN

dingoman George Orwell, call your office ! If prostitution is the world’s oldest profession, then city mayors follow a very close second. In fact, it occurs to me they may be the spiritual offspring of the aforementioned liaisons. Whenever there is loose change or unclaimed dollar bills laying around, mayors can smell them a mile away and if a Sugar Daddy offers free cash, they never stop to question what the vigorish might be. The urban emperors, suburban commissars, the hack and the highbrow, the Republican and Democrat, the apolitical and amoral, the exurban apparatchiks all assemble to line dance down Pennsylvania Avenue like ladies of the evening on the way to a golden score with Big Daddy. The United States Conference of Mayors has assembled the most ridiculous and repulsive example of government excess I think I have ever seen. Here is a PDF file of the document which stretches to 344 pages. One of the most alarming features of this civic gluttony is the gift list request for funds to buy military SWAT assault equipment for police forces like the examples offered here by Texas blogger and Reason.com contributor, Trey Garrison: Frisco wants $125,000 for an armored vehicle and $200,000 for a mobile command vehicle. You know, for all that gang tank warfare going on up in Frisco. McKinney wants $5 million for SWAT toys and stuff. North Richland Hills wants $51,000 for volunteer patrol volunteers. Let’s throw in $10 for a dictionary so they can look up the word “volunteer.” Irving wants $5 million for biometric scanners, digital cameras, RFID scanners — nothing Big Brother there. Grand Prairie wants $1.25 million for nicer landscaping around the public safety building. And finally, Arlington is really gearing up for urban warfare. Arlington wants $1.6 million for SWAT toys including more equipment for those deadly but camera-friendly no-knock raids, $56,000 for military grade carbines, $625,000 for unmanned aerial surveillance drones, and $130,000 for “covert ops.” Here is the “Public Safety” wish list from the US Conference of Mayors. Radley Balko, of The Agitator and contributing editor of Reason, offers these galling examples of cops gone Rambo: • Sparks, Nevada wants $600,000 to purchase a “live fire” house its SWAT team can shoot up, and another $420,000 for a SWAT armored vehicle. • Pleasanton, California wants $250,000 to buy a vehicle for its SWAT team. • Gary, Indiana wants $750,000 for a host of “modernization” upgrades to its police department, including “sub-automatic machine guns” and an “armored vehicl” [sic]. • Hampton, Virginia wants a whopping $3.5 million for “Air Tactical Unit Support and Equipment,” which I’m pretty sure means they want a sweet helicopter for the SWAT team. • Ottawa, Illinois (population: 18,307) wants $60,000 to purchase, among other things, five “tactical entry rifles.” • Glendale Heights, Illinois wants $96,000 to purchase red light cameras, and another $67,000 to hire someone to monitor them. • Toward a more Orwellian America! The following cities requested stimulus funds to supplement, initiate, or upgrade public surveillance camera systems: Brockton, Massachusetts; Buffalo, New York; Burnsville, Minnesota; Caguas, Puerto Rico; Cerritos, California; Columbia, South Carolina; Compton, California; Homestead, Florida; Hormigueros, Puerto Rico; Indianapolis, Indiana; Inglewood, California; Lewiston, Maine; Lorain, Ohio; Lynn, Massachusetts; Marion, Ohio; Merced, California; New Rochelle, New York; North Richland Hills, Texas; Oakland, California; Orange, New Jersey; Orem, Utah; Orlando, Florida; Pembroke Pines, Florida; Ponce, Puerto Rico; Riverdale, Illinois; Shreveport, Louisiana; Silver City, New Mexico; Sumter, South Carolina; Tallahassee, Florida; Warren, Ohio; and Wilkes-Barre, Pennsylvania. Winston-Salem, North Carolina requested just under $85 million in security-related stimulation. But top prize goes to Tulsa, Oklahoma, which is asking the rest of the country to stimulte its economy with a whopping $135 million in public safety-related requests. All in all, America’s mayors asking for a little over $5.5 billion in public safety “stimulus.” The city of La Porte, Texas has applied for $700,000 to build a “Lifestyle Center” while the city of Houston wants a whopping $175,000,000 to build the “Metro Houston Intermodal Terminal” in downtown Houston. I could go on, but I am nauseated by reading these documents. Readers will have to carry on in my absence while I try to recover.

BLACK CAT.... FEBRUARY 11, 2009... MAY HE REST IN PEACE

I had to put my good buddy Black Cat to sleep today. He had a tumor that cost him his left eye a few months ago. It appears to have been putting pressure on his brain, as he was not acting like his old self in the last few days. It could be that's why he went missing for 17 days. He might not have known where he lived and had a momentary glimpse of reality and found his way home on the 17th day. At least I got to spend the last 10 days with him. He was an extra special cat. A black bundle of furry love like no other I've every known. I pray there's a cat heaven and that that's where I wind up when I'm gone to be with all my special little pals.

LEW ROCKWELL TELLS IT LIKE IT IS

The Daily Reckoning PRESENTS: A trillion-dollar bailout. ‘Demonizing’ private enterprise. Is President Obama destined to follow in the footsteps of FDR and the New Deal? Or is there still time to turn it around? Lew Rockwell explores... OBAMA’S WEALTH DESTRUCTION by Llewellyn H. Rockwell, Jr. President Obama is under the impression that history owes him $1 trillion right now to spend on whatever he wants. His language is strident and full of irritation that anyone would question his right to live out his personal dream of being Franklin Roosevelt to George Bush’s Hoover. This, he says, is what the election was all about. The arrogance reminds me of George Bush after 9-11, who similarly believed that history owed him a gargantuan war in the tradition of FDR. And look how that arrogance led to disgrace and loss, as he unwittingly presided over the destruction of American prosperity while searching for bugbears abroad. It just goes to show you that the presidency is something like a drug. It makes people lose all connection to reality. Part of the reality that Obama needs to recognize is that the New Deal was a calamity far worse than the initial market downturn that began it. He needs to stop basing his policies on dumbed-down civics texts versions of events and consider the economic logic. With his rhetoric and policies, he has decided to demonize private enterprise, just as FDR did, as a way to present government as the great savior. Now, think about this. If there is a way out of the recession, it will have to be provided by private enterprise. It will come by new businesses, business expansions, entrepreneurship, new technology, and this will be the source of lasting jobs and prosperity. You cannot make a country rich by looting taxpayers and paying people to pound nails into siding at public schools! These activities amount to capital consumption. They are not sources of investment. You can say that they are stupid tasks or wonderful tasks, but it is not a matter of ideology as to whether such public projects will make us all wealthier. They will not. They drain the sources of wealth from society. They represent a cost, not a blessing. That was also true of Bush’s dumb stimulus program. He was only bailing out his friends at our expense. The effect was to give a little longer life to institutions that were failing anyway. It’s pathetic that the Republicans ever went along with it. You will notice that the scheme didn’t actually work. Well, Obama is doing the same thing, though rewarding a different set of friends. This is not wealth production. This is wealth consumption. Do enough of this nonsense and you can destroy the livelihoods of an entire generation. Americans are proud of their system of government, but consider what it has given us this time around. We had an outgoing president who thought it was his right to grab as much as he could while leaving. Now we have a new president who thinks that the election entitled him to grab as much as he can, right from the beginning. We get looted by the state coming and going. It all amounts to one massive war on prosperity and freedom. Particularly culpable here are the official historians who have for generations heralded FDR as the great savior. It is a case study in how a civic lie can appear and fester for decades. The fact is that the New Deal did not work. It prolonged what might have been a troubling two-year downturn into a horrifying blow to world prosperity that ended up in a war that killed countless millions. It was one of the greatest acts of wreckage in world history. And Obama is inspired by this? He wants to repeat it? I’m not so cynical about human affairs that I believe that errors must be endlessly repeated. Obama can put a stop to his madness. He needs to know – someone must tell him frankly and openly – that his current path is going to lead not to recovery, but to an extension of suffering, and untold amounts of it. The biggest threat facing the American economy right now is rarely even discussed. It is the massive buildup of paper bank reserves in the last quarter of 2008. This was Bush’s doing. He ordered the Fed to print like mad. Fortunately for us, the banks are still holding on to these reserves. When they start lending again, the result could be hyperinflation of Confederate-dollar proportions. Hence the priority of the Obama administration should be to first do no evil, and second to find some means for withdrawing those reserves from the banking system before they wash through the economic structure and destroy the dollar. There is still time. He must act. Yes, that will lead to bank failures. That’s good! It will lead to business failures. That’s good and essential too. There simply is no choice. If he acts now, he could find that recovery will come before his second term. This is precisely what happened with Reagan. He was fortunate to have advisers who insisted that he let the liquidation happen rather than attempt to fix the recession of 1981–82 with huge new government spending programs. In any case, the hardest work to do here is intellectual. Obama’s head is filled with myths and lies, not only about FDR and the New Deal but also about the government’s power to repair the existing economic problems. With this model in his head, he can only do evil. This must change. Nothing is inevitable. He can turn on a dime. The main message: do not repeat the actions of FDR, lest you destroy what is left of American liberty and prosperity. Regards, Llewellyn H. Rockwell, Jr. for The Daily Reckoning

SINCLAIR'S 9 POINTS EXPLAIN IT SIMPLY

Nine Points Of Logic And Reason Posted: Feb 09 2009 By: Jim Sinclair Post Edited: February 9, 2009 Dear CIGAs, Nine points of logic and reason: This article is totally correct in saying nothing whatsoever has been done about the basic problem which is the failure of the OTC derivative. As long as the basic problem is not addressed by true valuation and bankruptcy of the friends of Washington all attempts to whitewash the disaster will in a short time wash away. The problem is how to value the failed OTC derivative properly because we can’t use the "zero" word. Because of #2 the US Treasury will guarantee a false value. Since the majority of SIVs will never perform due to bankruptcy in the asset chain, the US government will have to guarantee these at 100% of whatever value they intend to raise money on. Next, the US treasury will have to guarantee and/or provide 100% of the funds borrowed or raised to make this worthless unless guaranteed investment in a pile of miss-valued worthless SIV paper. Yielding the plan as it is now conceived is a useless camouflage of bankruptcy to be paid in via guarantee by the US taxpayer. We need no Bad Bank as we already have a really BAD one called the Federal Reserve. It is stuffed to its own bankruptcy level with all their financial pal’s OTC derivatives, also called toxic paper. The majority of dopes and all the financial media will praise this outstanding job of window dressing and whitewash painting as solid accomplishment at last. The media will have done a solid job instructing you that Toxic Paper is the villain, not those that manufactured the toxic paper OTC derivatives and distributed them, now having been bailed out 100% at your personal expense This is all a Devil’s financial brew being moiled and boiled daily in hopes of keeping you all firmly intoxicated. GT sez: As Dr. Phil says so often, "you can't change anything until you admit where you're at" (paraphrased) In MY WORDS: You can't fix something that is unfixable. You just have to admit that the money is gone and move on with what is left.

JIM SINCLAIR. A VERY IMPORTANT ARTICLE TO READ

Armstrong Economics Posted: Feb 10 2009 By: Jim Sinclair Post Edited: February 10, 2009 Dear Friends, Read this and you need not read any more ever, anywhere. Save the file linked below. Each time you need me to hold your hand read this first. You will no longer need me. I have in chapter and verse outlined to you what is coming and why. This article is a maximus opus in line and verse, outlined in time and form and absolutely correct in content. I met Mr. Armstrong in the early 80s. I know his story better than most. This is a man who has been persecuted for his knowledge. He is a modern day Livermore. Armstrong is the only true genius in finance. No one can qualify to tie his shoes. He was incarcerated because of his talent by an all but now forgotten jurist. The why is forgotten. All that is remembered is someone’s belief he cost the IRS a large chunk of money. Armstrong Economics: The Coming Great Depression. Why Government Is Powerless http://www.jsmineset.com/wp-content/uploads/2009/02/martin-armstrong.pdf GT says: This is a 44 page PDF. Take the time to read it.

FROM CASEY RESEARCH ON SATURDAY 2/7/09

LINK TO THIS DAILY EMAIL: http://caseyresearch.com/displayDrp.php?e=true EXCERPT: "In a nutshell...it's the same old, same old routine as we've seen for the last decade or so. The '4 or less' traders in the Commercial category [U.S.bullion banks] continue to take the short side of virtually every long trade. They do it because there are no willing free-market participants that are stupid enough to take the short side of the trade at these prices for either gold or silver. If the bullion banks weren't there to take the other side of the trade, the prices for both metals would already be at the outer edges of the known universe...which is exactly what the U.S. government, the Fed and the U.S. bullion banks don't want to happen...as their precious US$ would disappear in the blink of an eye. Well, you say, how am I so sure it's the U.S. bullion banks that are involved. A couple of things. The first is called the monthly Bank Participation Report [BPR] which, coincidentally, was also issued yesterday...and also for positions held at the end of trading on February 3rd...the same as the latest COT. Both are snapshots of positions held at the exact same point in time...the close of business on Tuesday. So let's see what it says about what the U.S. bullion banks are up to. Firstly, silver...where it reports that two [or less] U.S. banks are short 27,189 contracts. The two [or less] U.S. banks have zero long positions. [As a comparison, there are thirteen non U.S. banks that are long 8,416 contracts and short 1,871 contracts.] Now...in the Commitment of Traders report yesterday, the silver net short position in the Commercial category was reported to be 33,173 contracts. So, by straight division, two [or less] U.S. bullion banks are short 82% of the net silver short position in the Commercial category on the Comex!!! Any questions? Now in gold, the Bank Participation Report [BPR] says that three [or less] U.S. bullion banks are short 111,190 contracts (a record high by a long shot!). They are long 3,629 contracts...so net, they are short 107,561 contracts. [As a comparison in gold, there are twenty-three non U.S. banks that are long 33,434 contracts and short 42,335 contracts.] In Friday's Commitment of Traders, the gold net short position in the Commercial category was reported to be 177,589 contracts. So, once again by straight division, three [or less] U.S. bullion banks are short 60% of the net gold short position in the Commercial category on the Comex. And if you remove all spreads in both metals, these short positions by these U.S. banks go from obscene to grotesque! Yet the CFTC says they're still studying the issue. The link to the Bank Participation report is (http://www.cftc.gov/dea/bank/deafeb09f.htm)... and you'll have to scroll down a bit."

US military suicide rate at record high

US military suicide rate at record high By James Cogan 4 February 2009 http://www.wsws.org/articles/2009/feb2009/suic-f04.shtml American troops are taking their own lives in the largest numbers since records began to be kept in 1980. In 2008, there were 128 confirmed suicides by serving army personnel and 41 by serving marines. Another 15 army deaths are still being investigated. The toll is another of the terrible consequences that have flowed from Washington's neo-colonial wars in Afghanistan and Iraq. The army suicide rate is now higher than that among the general American population. The rate has been calculated as 20.2 per 100,000 soldiers, compared with 19.5 per 100,000 civilians. This is a shocking statistic, as soldiers theoretically are screened for mental illnesses before enlistment and have access to counselling and health services that millions of ordinary people cannot afford. As there is an average of 10 failed suicide attempts for each actual loss of life, the figures suggest that more than 1,600 serving army and marine personnel tried to kill themselves last year. Army Secretary Pete Geren told the Associated Press that "we cannot tell you" why the number of military suicides was rising. It is indisputable, however, that it is linked to the stresses on soldiers caused by the wars in Afghanistan and Iraq. In 2002, the army suicide rate was just 9.8 per 100,000. The last time it exceeded the civilian rate was in the late 1960s, at the highpoint of the US war in Vietnam. An estimated 30 percent of soldiers who took their own lives in 2008 did so while on deployment. Another 35 percent committed suicide after returning from a tour of duty. In one reported case, a highly regarded marine pilot hanged himself just one month before he was scheduled to return to Iraq. Dozens of men and women who have left the armed forces since serving in Afghanistan or Iraq also committed suicide in 2008. The Department of Veterans Affairs recorded 144 such cases. The suicide rate among veterans aged 20 to 24 was 22.9 per 100,000 in 2007—four times higher than non-veterans in the same age bracket. A hotline for veterans has received over 85,000 calls since mid-2007 and arranged some 2,100 suicide prevention interventions. The rise in army suicides was registered despite an information campaign in the US military intended to end stigmas over seeking medical health for Post Traumatic Stress Disorder (PTSD) and depression—psychological conditions that afflict tens of thousands of Afghanistan and Iraq veterans and in severe cases can trigger suicidal tendencies. Veterans Affairs (VA) reported in January that 178,483 veterans of the two wars had been diagnosed with one or more mental illnesses between 2002 and September 2008. The conditions diagnosed included 92,998 cases of possible PTSD; 63,009 possible depressive disorders; 50,569 neurotic disorders; 35,937 cases of affective psychoses; 27,246 cases of drug abuse and 16,217 cases of alcohol dependency. VA deputy director for mental health services, Antonette Zeiss, told the Air Force Times: "Most of these conditions would not have been present prior to being in the military. In VA, we assume that these are veterans coming to us who have had significant stresses as a result of their involvement with the military and the war." The "significant stresses" would include killing; repeated exposure to scenes of death and injury; the constant threat of death or injury; and the dehumanising policing operations that American soldiers have been ordered to conduct against civilian populations. No-one who has taken part in the occupations of Afghanistan and Iraq could have returned completely unscathed by the experience. The true extent of mental illness among war veterans is believed to be far worse than VA's figures. It has only treated around 400,000 of the 1.7 million men and women who have served. "We know there are guys who desperately need help who aren't coming to us," a spokesman told the Air Force Times. A Rand Corporation study last year estimated that 20 percent of Afghanistan and Iraq veterans—some 350,000 people—were suffering from PTSD. As many as 18 veterans of American wars take their own lives in the United States every day—more than 6,500 per year. Vietnam veteran advocates have estimated that suicide ultimately killed more of the soldiers who fought in that conflict than the actual war itself. The same trend is now surfacing among the veterans of Afghanistan and Iraq. A recent case was the suicide of Specialist Larry Applegate on January 16. After an argument with his wife, during which shots were fired, Applegate barricaded himself inside his Colorado Springs home. Shortly after, he killed himself with a bullet to the head. The Army Times reported that the 27-year-old soldier, who served in Iraq during 2006, had been under the supervision of a Warrior Transition Unit (WTU) since February 2008 for an undisclosed condition. WTUs were established in June 2007 after the exposure of substandard treatment of wounded troops at the Walter Reed Medical Centre. There are currently some 9,000 soldiers assigned to 36 WTUs across the US. A total of 68 soldiers had died under WTU care by October 2008. More than half the deaths were ruled to have resulted from natural causes, but nine were determined to be suicides. Six others were classified as accidental deaths caused by "combined lethal drug toxicity".

PETER SCHIFF ATTEMPTS TO EXPLAIN WHAT MAKES AN ECONOMY GROW

GT says: People SAVE...those savings are BORROWED by people/companies who use those savings to PURCHASE CAPITAL GOODS which are then used to PRODUCE other goods for sale. THIS IS CALLED PRODUCTIVITY. If SAVING is not rewarded, or those assests SAVED lose value due to the form in which they are saved (fiat money), then there is no INCENTIVE TO SAVE, and there will be NO SAVINGS from which those who want to PRODUCE GOODS can BORROW to PURCHASE CAPITAL GOODS (machines, etc.) to produce goods. Therefore, there will be NO PRODUCTION, ONLY CONSUMPTION of the remaining goods available. And the PRICES (in terms of the de-valued fiat money) WILL INCREASE to compensate for the SCARCITY OF THE REMAINING GOODS. NO PRODUCTION WILL OCCUR until the MEDIUM OF EXCHANGE is once again TRUSTED by the populace. This, of course, will NOT OCCUR until the OLD, WORTHLESS MEDIUM OF EXCHANGE (the over-produced fiat money $$$$) is REJECTED, or RE-VALUED, in terms of a REAL, NON-COUNTERFEITABLE MEDIUM OF EXCHANGE is used as the basis for its VALUE. THIS MEANS GOLD AND OTHER PRECIOUS METALS! Peter Schiff: Obamanomics = Food Lines Video Interview Click her to view http://informationclearinghouse.info/article21915.htm

DID YOU REALLY THINK O'BOMB'A WOULD BE DIFFERENT?

Obama CIA Choice Nets $700,000 From Rescued Banks By Christine Seib in New York The revelations about Leon Panetta's finances highlight the difficulty the new administration faces in finding experienced advisers that do not violate the President's ban on hiring lobbyists. http://informationclearinghouse.info/article21914.htm IT'S ALL ABOUT MONEY AND POWER.... IT HAS NOTHING TO DO WITH YOUR WELFARE OR CONTINUED EXISTENCE.

From the Federation of American Scientists

From the Federation of American Scientists: In an interview with CBS’s Katie Couric on Wednesday (http://www.cbsnews.com/blogs/2009/02/04/politics/politicalhotsheet/entry4774878.shtml?utm_source=MailingList&utm_medium=email&utm_content=cedricward%40adelphia.net&utm_campaign=weatherization), President Obama was asked about spending measures in the House version of the stimulus package that have been criticized by Sen. Mitch McConnell and others, including $6.2 Billion for the Weatherization Assistance Program. President Obama makes the case for the weatherization program as a means to jump start the economy by creating jobs immediately, saying “We’re going to weatherize homes, that immediately puts people back to work and we’re going to train people who are out of work, including young people, to do the weatherization. As a consequence of weatherization, our energy bills go down and we reduce our dependence on foreign oil. What would be a more effective stimulus package than that?” The President is correct. As a paper by the Federation of American Scientists (http://fas.org/programs/energy/btech/policy/Weatherization%20Article.pdf?utm_source=MailingList&utm_medium=email&utm_content=cedricward%40adelphia.net&utm_campaign=weatherization) demonstrates, the Weatherization Program is the longest running, and perhaps the most successful US Energy Efficiency Program. The program, which underwrites a portion of the cost for improving the energy efficiency of low-income homes, reduces heating costs by an average of 31 percent, resulting in significantly lower energy bills that are so important in trying economic times like these. The program also creates roughly 52 jobs for every $1 million of federal investment. The stimulus package’s investment of $6.2 Billion into the Weatherization program will result in roughly 300,000 jobs created. The program carries a great potential to alleviate both the economic and energy woes our country currently faces. Investing in weatherization through the stimulus bill also provides the opportunity to create a more modern, streamlined and effective system for improving residential energy efficiency in the future. To do so, and to ensure the best use of stimulus funds, the weatherization program needs to improve the software tool that weatherization centers use to determine which retrofits are cost-effective, upgrade and standardize the training for energy auditors and weatherization crews, and start collecting data from the field about the real energy savings and costs of different weatherization measures to continuously improve the program. FAS applauds President Obama and the members of congress for recognizing the potential of the Weatherization Program, and we look forward to seeing this potential realized. Please look for a more comprehensive review on weatherization and the stimulus package in the near future.

PBS 1 HOUR PROGRAM - THE SPY FACTORY

James Bamford: The Spy Factory Must Watch Video By PBS - Includes Transcript "it (the NSA) also has turned its giant ear inward, listening in without warrant on thousands of American citizens, many of whom are on the government's secret watch list, now more than half-a-million names long." http://www.informationclearinghouse.info/article21902.htm

FROM RON PAUL'S CAMPAIGN FOR LIBERTY

February 5, 2009 Dear Friend of Liberty, This week, the U.S. Senate is debating the so-called "Stimulus" bill, a nearly TRILLION DOLLAR boondoggle being carefully marketed as a treatment for our economic woes. In reality, this big government disaster-in-the-making will only further devalue our dollar, increase our national debt, and continue our country's descent into socialism. You may think there's nothing you can do to make a difference, but you can. More on that in a moment. Just last week, House Democrats passed their pork-laden "stimulus" package over the surprisingly united opposition of House Republicans. The Senate bill is, amazingly, an even more inflated version. Our economy cannot survive this type of continued limitless spending and reckless disregard for free market principles. Our country is already over $10 TRILLION in debt, with tens of trillions in unfunded liabilities on top of that. This "stimulus solution" to our economic problems is exactly the type of disastrous big government policy that created the crisis in the first place, and passing it will certainly prolong the suffering. What can YOU do? For starters, you can contact your Senators today and urge them to oppose this bloated federal spending spree. There is mounting outrage over this pork-laden disaster, and the politicians are getting nervous. You can get contact information for your Senators by clicking here, then selecting your state from the map and clicking "Congressional Information." Our website not only allows you to speak out and hold your Congress accountable, but it also keeps you updated on all Campaign for Liberty activity in your state and across the country. To make your voice heard and to stay involved with the Revolution in your state, follow this link: http://www.campaignforliberty.com/usa.php Campaign for Liberty was founded to deliver the message to the bureaucrats in D.C. that "Enough is enough!" It is our mission to stop this extravagant spending, educate our fellow countrymen on sound economics, and turn the tide back toward liberty and a balanced federal checkbook. It is crucial that you help us by making your voices heard. Calling and writing Congress can seem hopeless at times, but that's exactly the feeling politicians want you to have. They want you to think you don't matter. They want you to sit quietly. Let them know that you won't be quiet, that you are watching them, and that you are not going away. Demand that your Senators defend the constitutional values they have sworn to uphold. Encourage them to call this "stimulus package" what it really is - a socialist repudiation of our nation's values – and to vote it down. Again, please contact them today by following this link: http://www.campaignforliberty.com/usa.php With your help, we can win this battle in our fight to restore our Constitution and reclaim the Republic our forefathers fought to give us. And even if it does still pass, we will use it to further the Revolution that you and I are bringing about. In Liberty, John F. Tate President, Campaign for Liberty P.S. Radical Socialism is currently being debated in the halls of Congress. Please write and call your Senators and demand that they oppose this so-called "Stimulus Package" and other Big Government power grabs. P.P.S. Campaign for Liberty practices the principles we preach. Unlike the government, we will not go into debt. Only your ongoing support allows us to continue our fight against tyranny. If you can help Campaign for Liberty financially, please make your generous contribution of $250, $100, $50, or whatever you can afford at this time here: https://www.campaignforliberty.com/donate.php Thank you for all of your hard work for the cause of liberty!

MY FAVORITE AUTHOR KAREN KWIATKOWSKI

The Coming Fascism by Karen Kwiatkowski http://www.lewrockwell.com/kwiatkowski/kwiatkowski223.html The Anderson-Obama interview this week wrapped by congressional hearings on government collusion with friends and relatives (otherwise known as the Bernie Madoff scandal) have brought forth only more government whining, moaning and self-justification. In them, we have also been given a pale notice of future full-fledged American fascism. Our government is bloated past the point of repair, and those in government understand this perfectly. We still have an overstretched, poorly led, and unreliable military web, funded by various other confused governments and unborn American taxpayers. Before long, the state will not only demand we spend what paltry savings we have as a civic duty, but that we bear more children to ensure the kingdom has serfs.

AND THAT'S THE WAY IT WAS

Watching Our Rulers Destroy Our World by Robert Higgs http://www.lewrockwell.com/higgs/higgs104.html

YOU JUST CAN'T TRUST ANYONE ANYMORE

AUDIT AFTER GOLD DEALER’S SUICIDE SUGGESTS CUSTOMERS LOST MILLIONS By ROBERT J. COLE Published: October 5, 1983 NEW YORK TIMES Some $60 million worth of gold, silver and platinum sold to thousands of individuals and then supposedly stored in Rocky Mountain vaults may never have existed, an investigation suggested yesterday. The possibility emerged in an audit conducted by the accounting firm of Touche Ross & Company in connection with the suicide last Wednesday of Alan David Saxon, 39-year-old chairman of Bullion Reserve of North America, a gold dealer with offices in Los Angeles, Dallas and Hong Kong. Bullion Reserve has 30,000 to 35,000 customers. If the missing assets cannot be found, most of their investments may be lost. http://query.nytimes.com/gst/fullpage.html?res=9C01E5DE173BF936A35753C1A965948260&sec=health&spon=&&scp=1&sq=AUDIT%20AFTER%20GOLD%20DEALER%27S%20SUICIDE%20SUGGESTS%20CUSTOMERS%20LOST%20MILLIONS%20&st=cse LINK AVAILABLE ON JSMINESET.COM

JUST ONE OF MANY TO COME

California Goes Broke, Halts $3.5 Billion in Payments By Stephen C. Webster California, the eighth largest economy in the world, is broke. "People are going to be hurt starting today," said Hallye Jordan, speaking on behalf of the state Controller. "There's no money." http://www.informationclearinghouse.info/article21898.htm

GT BECOMES AN AVATAR

Wandering through the MarketWatch comments today, I see that MORGANMAN555 has adopted the picture of me covered in snow that I posted earlier during our record winter snow storms. I guess MW Admin doesn't know who it is, or I would have certainly been excommunicated from the site. I don't know what to think of this, but it certainly was a bit of a start to see my mug back on MarketWatch, even if it is this way.

GARY NORTH ARTICLE

Gary North's REALITY CHECK Gold's price: http://www.GaryNorth.com/snip/300.htm The Federal debt: http://www.GaryNorth.com/snip/544.htm To subscribe to this letter: http://www.snipurl.com/subscribenow Issue 829 February 3, 2009 THE FEDERAL RESERVE'S SELF-IMPOSED DILEMMA The Federal Reserve System face a dilemma of its own creation: the doubling of the monetary base. You can see it here: http://GaryNorth.com/public/4512.cfm The only thing that is keeping this from creating mass inflation is the decision of commercial bankers to deposit the bulk of this increase with the Federal Reserve. The banks are not lending out this money. Neither is the FED. This money does not legally belong to the FED. President Obama has said that banks that receive money from the Federal government as part of the bailout operation are going to be required to lend money. As to how this is going to be enforced, he did not say. Rep. Barney Frank insists that there will be specific legislation mandating that banks lend money to the public. http://GaryNorth.com/snip/785.htm If the Federal government gets into the business of allocating bank loans, the results will be disastrous. For a nice survey of the bad effects that such intervention will cause, read the article by Michael Rozeff, a retired professor of finance. http://www.lewrockwell.com/rozeff/rozeff266.html SUBSIDIZING EXCESS RESERVES There is a reason why the banks are not lending money to the public. Instead of taking the risk of lending, the banks are depositing hundreds of billions of dollars with the Federal Reserve. Beginning last October, the Federal Reserve began paying low rates of interest on money above the legal reserve requirement that banks must deposit at the Federal Reserve system. This new policy was not to go into effect until October of 2011, but the banking crisis forced the Federal Reserve to speed up the legal timetable. Congress, of course, did nothing. Because the banks place their money with the Federal Reserve, this money is taken out of the fractional reserve process. The Federal Reserve System does not lend this money to borrowers. It is not part of the FED's balance sheet. The FED keeps the money in reserve. The banks were initially paid only 1.25% for these deposits, and this was dropped to 1% before October was over. Because of the Federal Reserve's new target for the federal funds rate, which is now approximately 0%, banks are not receiving any interest on the money they have on deposit with the FED. Yet they have to pay interest to depositors. So, the excess reserves are causing banks to hemorrhage money. The money is safe, but the losses are guaranteed. The banks have almost no money coming in as interest payments from the Federal Reserve, but they have money going out as interest payments to depositories. This cannot go on forever. The new Administration understands that something is wrong. Advisors know the banks are not lending. They do not seem to understand why the banks are not lending. They are not lending because bankers are fearful that they will not be repaid. They are so terrified by this economy that they would rather put the money with the Federal Reserve System, receive essentially no interest, and suffer losses on interest paid to depositors. They would rather lose a little money, month by month, then put their money at risk by lending it. This gives some indication of just how bad the present economy is. If bankers are afraid to lend money to senior American corporations for 90 days, and if they are afraid to lend money to the United States Treasury to buy long-term bonds, there appear to be no profitable opportunities for investors, either. The banks are certainly not going to put the money in the stock market. Why should you? They are afraid to put in the corporate bond market. I can hardly blame them. They are afraid of doing anything with the money. The Federal Reserve now faces a problem. It faces a series of problems. We need to understand the nature of the problems that the Federal Reserve is facing in order to understand what Federal Reserve policy is today. A ZERO-BOUND ECONOMY The Federal Reserve wants to avoid price deflation. In the terminology of Keynesian central bankers, this is called a zero- bound condition. We are now in that condition. The federal funds rate is so low that banks ought not to be lending to the Federal Reserve. Nevertheless, they are lending to the Federal Reserve at approximately one-tenth of 1% interest. They are not lending to the general public. If the economy continues to contract, as Keynesian theory says it will contract if the banks do not lend, then prices will fall, and interest rates on Treasury debt will remain essentially zero at the short maturities. This will make it difficult for the Treasury to get foreign investors to lend money to it. The Federal government is facing a $1.2 trillion deficit, and foreign central banks are unlikely to lend to the Treasury at a quarter of a percent interest, the rate for 90-day T-bills. Foreign central banks are also saying that they no longer wish to lend on long-term T-bonds. According to Keynesian economic theory, when interest rates fall to zero, increases in central bank purchases of debt obligations, which would otherwise stimulate the economy, no longer occurs. Why not? Because banks refused to lend. This stops the fractional reserve banking expansion process. The economy stagnates. Economic growth contracts. Prices fall. The process accelerates. It is a downward economic spiral. This is what Milton Friedman said caused the Great Depression. Almost everybody today believes Friedman. So, they are frightened that we have reached a situation where Federal Reserve expansion of the monetary base will not lead to an expansion of the money supply. This means that the economy will continue to fall even faster. AN EASY SOLUTION WITH DISASTROUS CONSEQUENCES There is an easy solution to this problem. The Federal Reserve knows exactly what the solution is. Nobody mentions it. The suggestion that the Federal Reserve would attempt it would probably bust the bond market. The Federal Reserve would announce that, from this point on, all money deposited by banks as excess reserves will be charged a storage fee. This fee could be 2%. Not only would banks not make any interest on the money deposited with the Federal Reserve, they would begin suffering a loss of 2% per annum on the money held as excess reserves. These losses would be in addition to the losses sustained by the banks because they have to pay interest to depositors. The banks would find that the guaranteed loss of the combined payments would be so great that it would be safer to lend the money to the general public. Banks would then start lending to corporations and to the Federal government. They would certainly buy Treasury bills at quarter of a percent per annum rather than holding excess reserves at -2%. The Treasury would spend the money into circulation. This money would then multiply through the fractional reserve banking process. This would create another grim scenario for the Federal Reserve. The Federal Reserve has more than doubled the monetary base since September 2008. This has been offset by the decline in the money multiplier, which has been caused by bankers' decisions to hold money as excess reserves with the Federal Reserve. If the Federal Reserve begins charging a storage fee to banks that deposit excess reserves with the FED, the money multiplier will immediately reverse. It will go back to something approaching normal. At that point, the increase in M-1 will begin to affect the economy. There will be more money available for consumers to spend. Some people are afraid that consumers will save money. Why? Bad economic theory. Thrift does not have any effect on the money supply in a fractional reserve banking system. If one group of consumers saves more money, this does not affect the money supply. These thrifty people will increase the amount of money that they have deposited at their local bank. This does not change the monetary base. When a small percentage of consumers stops spending on consumer goods and increases holdings of bank accounts or money market funds, this will have no effect on the total money supply. It means that one group of consumers will cut back on spending, but it means that other groups of consumers will increase spending. People who borrow money at a bank intend to spend it. Maybe they are going to spend it on business activities. Maybe they are going to spend it on consumer goods. But they are going to spend it. Nobody increases his debt in order to put it in a bank account. Nobody pays a bank 7% or 10% per annum in order to put it in a bank account that pays 2% per annum. If he does, he is doing this only for very brief time until he spends the money. FEAR OF PRICE INFLATION Why hasn't the Fed adopted this policy of a penalty payment? I think this should be obvious. Banking theory teaches that when the monetary base doubles, the money supply will double. If the money supply doubles, consumer prices will also come close to doubling. There will usually be a time lag, but the process is clear. An increase in the monetary base, which is called high-powered money, multiplies through the fractional reserve banking system. All schools of economic opinion agree on this point. If the Federal Reserve is unwilling to impose a penalty payment on excess reserves, it is afraid that banks are going to do the rational thing: lend money to the general public. It is clear that the Federal Reserve System's policy-makers are afraid that banks are going to do would banks are supposed to do with reserves: lend money to the general public. The Federal Reserve is attempting to sterilize the increase of the monetary base, which it created. Federal Reserve economists know that if banks start lending reserves that are being held the Federal Reserve beyond the 10% legal limit, there is going to be mass inflation in the United States. The Consumer Price Index will double. Any additional spending by the Federal Reserve to prop up the Treasury bond market will be immediately reflected in an increase in M-1. Long-term interest rates will soar. The market for Treasury bonds will collapse. At that point, the Federal Reserve will have to intervene and purchase Treasury bonds. This will drastically raise interest rates on corporate bonds and mortgages. The Federal Reserve is now trapped by its own policies. It has dramatically increased the monetary base, and it does not want this money to be spent into circulation. Federal Reserve economists understand the fractional reserve banking process. They know that the only way that the M-1 money supply will not match the doubling of the monetary base is for the Federal Reserve to impose an increase in the reserve requirement. It has not done this. Instead, it has paid a small amount of interest to banks to persuade backers to see keep money on deposit with the Fed, which sterilizes the increase in the monetary base. If banks begin lending money to the general public, the Federal Reserve will have to sell assets in order to offset the increase in its balance sheet, which is a result of the big bank bailouts and buying T-bills. The problem is, the Federal Reserve is running out of Treasury debt certificates to sell. The only asset that the Federal Reserve now holds in its balance sheet that can be sold at face value to the general public is Treasury debt. There is no way for the Federal Reserve to unload the toxic assets that block from the banks. Furthermore, with the proposal of the so-called bad bank, which is one of those rare circumstances where the name given to it is appropriate for what the organization is, somebody has got to buy the toxic assets that are unloaded by the banks, so that the banks can get their balance sheets solvent again. Who is going to put up the money to buy all of this debt? The Treasury can buy it, but then the Treasury then must sell a comparable amount of debt to the general public. Who is going to buy that? Whoever does will invest money in a government-guaranteed bailout rather than in the private sector. Kiss the recovery goodbye. Once the banks get their balance sheets in good shape again, by unloading hundreds of billions of dollars of junk assets onto the bad bank, they will start lending again. They will reduce their holdings of excess reserves at the Federal Reserve system. At that point, the money multiplier will start multiplying again, M-1 will grow dramatically, and we will be into mass inflation. I don't mean 10% or 20% or 30% price inflation. I mean 50%, 60%, or 100% per annum. The vast increase of the monetary base, once it is translated into an increase in M-1, will create mass inflation in the United States. That money will be spent. Anyone who thinks the US Treasury will not send money to Social Security recipients, Medicare insurance programs, and all the other groups that are clamoring for bailouts, has been smoking something funny. DELIBERATE POLICY The reason why the banks are not lending is because a Federal Reserve policy has been established that pays banks not to lend. But now that the expansion of the money supply has been so great that the federal funds rate has been dropped to a tenth of a percent, the Federal Reserve's plan to sterilize its own expansion of the monetary base is threatened by constant losses to commercial banks, because they have to pay interest on deposits. Furthermore, the plan to sterilize the monetary base is also threatened by Congress and by the President, who insist that legislation is going to be passed which forces the banks to lend money. People who are predicting price deflation, meaning significant price deflation of 5% to 10% per annum or more, operate on an assumption that the fractional reserve banking system no longer expands the money supply. They are assuming that banks will not lend. They are therefore assuming that the expansion of the monetary base which is already taken place is not going to be translated into an expansion of the money supply, because the Federal Reserve's program of asset sterilization by paying interest on excess reserves is going to be successful. If success is defined as "falling prices and a collapsing economy," success is not going to be allowed by the United States Congress and the Obama Administration. They have made it clear that they are going to mandate that the banks lend. As soon as the banks start lending, the fractional reserve banking process takes over, and the money supply will double. I think we are beyond the point of no return. I think the expansion of the monetary base by the Federal Reserve System cannot be sterilized much longer. Congress is going to force the un-sterilization of bank reserves. The Federal Reserve System can do this on its own authority, simply by imposing a penalty payment on excess reserves. This is not rocket science. This is simply a matter of the Board of Governors passing a new rule that imposes a 2%, 3%, or 4% penalty payment on excess reserves. If I understand this, you can be certain that Federal Reserve officials understand this. You can also be certain that Ben Bernanke understands this. If Bernanke and the Federal Reserve's Board of Governors have refused to impose such a penalty payment, there is a reason for this. It is the same reason that the Federal Reserve began paying interest on excess reserves last October. The reason is clear: the Federal Reserve is terrified by its own policies. It knows exactly what is going to happen, once banks lend excess reserves into the general economy. It does not matter one way or the other who gets the money. It can be the United States Treasury. It can be large corporations. It can be people borrowing money to buy real estate. It can be any or all of these recipients of money. The public is willing to borrow whatever the banks are willing to lend area at some interest rate. Contrary to John Maynard Keynes, the money will be borrowed, and the money will be spent. My belief is that the banks will pull money out of excess reserves, either because they are forced to by the Federal government or because the Federal Reserve System begins imposing a penalty payment on excess reserves. Why would the FED do this? In order to forestall Congress. Also, in order to escape the zero-bound crisis that Keynesian economics says is the result of central bank policies that lower interest rates to zero. The thought that nobody in the general public is willing to borrow money at 1% or 2% is ludicrous. Tens of millions of Americans have credit cards, and they pay 10%, 15%, or more on these cards. Americans will rush to buy houses if they can get mortgage rates at 2% or 3%. The idea that the interest rate does not balance the supply and demand of credit is so utterly ludicrous that it takes a Ph.D. in economics to believe it. This idea has been a dominant idea among economists all over the world ever since Keynes wrote the "General Theory." It is a preposterous concept, and it is universally held. This is why economists throughout America are now clamoring for more bailouts by the Federal government. This is why they are demanding that the Federal government spend the money on anything and everything in order to make certain that the money gets spent by consumers. --------------------- CONCLUSION The case for price deflation rests on one primary idea: banks will not lend, even though they have reserves to lend. So far, this has proven to be the case. Banks are keeping excess reserves with the Federal Reserve, thereby refusing to lend money to the general public. Congress is not willing to accept this much longer. Neither is the Obama administration. So, the Federal Reserve System is going to have to fish or cut bait. It is going to have to decide whether or not it is going to subsidize the banking system: the decision of bankers to hold reserves with the Federal Reserve, thereby sterilizing the expansion of money that the Federal Reserve has produced since last September. I don't think the Federal Reserve wants either outcome. On the one hand, it is terrified by the zero-bound economy that it has created. On the other hand, it is terrified by the thought of what the expansion of the Federal Reserve's monetary base will do the money supply, and from there do to consumer prices. I feel their pain. I prefer not to. We are all going to feel a great deal of pain over the next few years. The basis of this pain is already in the monetary pipeline. The relevant question now is this: "How soon will the FED decide to un-sterilize its monetary base?" This raises a practical question: "What can a small minority of investors do to beat the rush to the lifeboats, before they fill up?" The majority will not be able to escape the sinking ship of state.