EZ READING MONEY MATTERS

Markets Go Down On Bad News

Lords a' Leaping Day

Elaine Meinel Supkis

Just want to thank everyone for the new systems here. I stopped cartooning for a while because of so many malfunctions. It was very disturbing, trying to do things that jerked around or didn't even show up. Now, all is easy and smooth! If only our economy were that easy to repair! Everyone who has no idea what is going on, is aghast at the stock markets of the world all going down as the US Titanic sinks. The Bernanke rate cuts aren't cutting it anymore.

Here is the MarkIt web page that was set up to let the banks learn how well their various funds were doing in a real-time market:

Oh my god. The investors holding these AAA, AA and A bonds were supposed to make a profit if it rose above 100. If it fell, their losses accumulated very rapidly. Losing is very dangerous in this derivative game! And they lost. Big time. The plunge was very rapid from the end of July till the end of October. Then, Bernanke stepped in first, with the usual magic wand waving of rate cuts. Then he went in for a massive injection of funds to stop this decline. Incidentally, the stock market's nightmare ride downwards had barely begun at this point! After all, it reached its all-time high [excluding inflation, of course] of 14,100 in early October, 2007.

So basically, we went from a record market to a complete melt down in less than three weeks. The fact that these funds started floating or rather, deflating rapidly in July when the DOW was at 12,000, is a sign to us that the fall here isn't due to commerce ending or even slowing down. Consumer spending was still forging ahead, after all. The only things that were different were all banking-related. The Basel II Accord rules were taking effect and the banks, who were pretending for the previous year to have great equities in their vaults had to suddenly expose all of this to the cruel light of day. They had to open the books. And all the 'off the books' accounts had to be put on the books. This was the doom that cast everything into the depths of despair!

From Culture of Life News back when the Fed tried to save these markets, November 16, 2007:

Yesterday was a busy day for us Doom Meisters. Today, the landscape is littered with the various CDO corpses that crawled out of various Dark Lagoons. Now the attention of the money magicians turns back to that pesky business of the FOREX situation. The destabilization of international commerce and finance caused by the dying dollar is causing many cascading events which look unconnected at first but actually are all part of the same system. If we look at all this as if it is Götterdämmerung and the Bifrost Bridge is collapsing and Valhalla is being repossessed by the Frost Giant/dragon, Fafner, we can guess what will happen next: the Fat Lady Will Sing.

Fed makes biggest temporary injection since '01

The Federal Reserve on Thursday pumped its biggest temporary daily infusion into the U.S. banking system since just after the September 11, 2001 attacks as short-term lending rates rose on both sides of the Atlantic.

The banks cannot give more loans if they have no reserves and if their existing equities are losers, they have to add reserves, not make more and more loans. They cannot make money totally out of thin air. They have to have a pay-back system somewhere. As well as some savings. Once they were forced to start telling the truth, the whole thing has been impossible. Look at those charts! The losses are staggering. All the AAAs, AA and A ABX CDOs are all moving towards the same place: zero. The BBB papers are now at slightly higher than 10¢ to the dollar. But the others are barely better. All but the AAA papers are now below 30¢ to the dollar. They stabilized briefly from the Bernanke money injection day in mid-November and desperately clung to life until the second half of February. This is when all systems, the Stock Markets, the muni bond markets, the interbank lending markets, you name it, all have decisively turned downwards. The news that the Federal Government was going to hand out a bundle of goodies temporarily buoyed up the markets, the financiers, the bankers, but now that has faded. Even the Japanese are now accepting the idea that the $150 billion Xmas gift from Santa won't save the global economy.

So the ABX funds fell. I give them another month, maybe two, but probably less, to hit zero once and forever. This is how Mother Nature takes care of excess: it is burned. It vanishes into smoke. These ABX charts are not about all the money out there that will vanish in the next two years, it is more like a heart monitor. The patient is dying. When all these funds hit zero, they will be flatlined.

From October, 2006 to October, 2007, the DOW jumped over 2,000 pts. Since then, it has fallen twice as fast as it rose and has now lost in only 4 months, nearly 2,000 pts. Always, the collapse of markets are much faster than the rises.

Ambac Cuts Dividend, Suspends Asset-Backed Insurance

Ambac Financial Group Inc., the AAA rated bond insurer seeking to avoid a crippling downgrade, cut its dividend and will suspend writing guarantees on new asset- backed securities for six months to bolster capital.

The dividend will be reduced to 1 cent from 7 cents, New York-based Ambac said today in a statement. Halting the asset- backed business will free up $600 million in capital, Ambac said.

Ambac is in talks with banks to raise $3 billion to satisfy Moody's Investors Service and Standard & Poor's that it deserves its AAA credit rating. Moody's today gave the company more time and said the extra money may be enough to meet its target. Ambac and MBIA Inc. came under scrutiny over the past three months after losses on asset-backed securities such as collateralized debt obligations.

AAA is supposed to be strong and healthy not dying on your feet, crawling in the dust, hissing, 'My Precioussssss....' The banks need Ambac and Ambac needs the banks and they are clinging to each other's straws here. Ambac was supposed to supply the life boats when any Titanics were threatening to sink. But when the people piloting these super-huge ships tried to jump into these life rafts, the boards broke and into the ocean of red ink, these life rafts fell, spilling everyone out. The Fed has bailed out the banks who are trying to bail out the life boats. But more ships are sinking and ditto, the life boats. Bailing is no good when there is a gaping hole in the bottom of the boat.

Citigroup Underwrote $6.9 Billion of Ambac's Most Troubled CDOs

Citigroup Inc. helped create at least $6.9 billion of securities insured by Ambac Financial Group Inc. that have tumbled in value and may require the insurer to pay claims, according to research by Tavakoli Structured Finance Inc.

Of the $22 billion of collateralized debt obligations linked to the mortgage market and insured by Ambac, about $7.5 billion were underwritten by Citigroup, which is among banks seeking to help Ambac raise capital. Of those CDOs, $6.9 billion, or 92 percent, are experiencing so-called events of default, Tavakoli said. Such events signal the most-senior classes may not be paid in full.

OK, let's get this straight: Citigroup wrote nearly $8 billion in bad loans. Loans that had a 92% default rate and this means in another two months, it will be probably 100%. We look at the two ABX charts and we can see they are collapsing into total default now. So Citibank is finding money--too bad the yen is even stronger today, no?---this is hard. Finding money when the carry trade is gone. Citibank is begging for money so Ambac can do what? Pay back Citibank? HAHAHA. Isn't that a cute one. Namely, Citibank wants LOANS so they can give this to Ambac so Ambac can pay insurance on the 100% bad loans written by Citibank! This is robbing Peter to pay Peter! Why bother with this fiction? Why not simply have Citibank get loans and pay up?

But then, they can't write loans until they get these wheezing, dying CDOs off the books and discharging them to Ambac who then hands over some cash is the only way to keep in business. If Citibank is alive next year, I will be amazed. Of course, they will run screaming to the Fed for help. They cannot go screaming to the King of Saudi Arabia. He wants to cut their heads off. No golden parachutes from him. They beat people to death for drinking coffee with the wrong sex over there. Losing all of the King's money is far greater. Buried up to the neck in the desert and left for the ants to eat, I might guess?

Financial Firms Face $600 Billion of Losses, UBS Says

Financial firms will likely see their losses reach at least $600 billion as the crisis triggered by the collapse of subprime mortgages batters banks, brokers and insurers, UBS AG analysts said.

Banks and brokers stand to lose $350 billion, according to estimates from the global banking unit of UBS, the world's largest wealth manager. Financial institutions have so far disclosed more than $181 billion of writedowns and credit losses.

This is a lot of money. And this is just real estate. Always, the biggest losers are corporations and governments. When they begin to fall, this is when we get full-scale depressions. Inflation surges when we have a growth in the money supply. What we are seeing is an epic collapse in the money supply. I noted last fall that the central banks injected over $600 billion. This hasn't revived much of anything. But I suspect it kept things afloat for a short while. But it can't fix the leaking ships. They will still sink.

AIG Says Cassano Leaving After Losses on Derivatives

American International Group Inc. said the head of its financial products unit, Joseph Cassano, is stepping down after the insurer reported $11.1 billion in losses on contracts sold to fixed-income investors.

Cassano co-founded the unit in 1987 and built it into a business providing financial guarantees on more than $500 billion of assets at year-end, including $61.4 billion in securities tied to subprime mortgages. He will be replaced on an interim basis by William Dooley, 54, a senior vice president of the New York-based insurer's financial services division.

Cramer ran around ranting, 'There is BLOOD in the STREETS' back when he and his goofy friends were wailing for huge interest rate cuts. They then celebrated all of these cuts. Only they work out less and less well each cycle. The massive 1.25% rate cut barely increased much of anything. Note the amounts here, by the way: $500 billion in assets? And what are their reserves? $20 billion? Note how the Wunderkind of 20 years ago is suddenly the Bad Boy of today. I bet the team Mr. Cassano led happily wrote more and more contracts to protect goofy lending deals by others and thus ended out on the same limb as their customers.

This is very similar to sitting on a tree branch and sawing it off on the side next to the trunk. Or chainsawing the bottom of life boats and then dropping them into the water. Actually, many people died on the Titanic because of the lack of reserves: passengers far outnumbered spaces in the lifeboats. The ship's owners believed it was unsinkable so they didn't bother with enough reserves. This sort of goofy thinking is what happened in our financial markets. I remember them all boasting that their hedges and derivatives would protect them no matter what.

Goldman, Bear Stearns Bankers Targeted in Muni Criminal Probe

Goldman Sachs Group Inc. and Bear Stearns Cos. bankers are under investigation in the U.S. Justice Department's criminal probe of the municipal derivatives business, regulatory documents show.

Bear Stearns's Stephen Salvadore and former JPMorgan Chase & Co. banker James Hertz are targets of the antitrust investigation of Wall Street's sales of derivatives and investment contracts to state and local governments, Financial Industry Regulatory Authority records show. Goldman's Shlomi Raz also disclosed to Finra that he is being investigated, without saying whether he is a target.

U.S. prosecutors and the Securities and Exchange Commission have been searching for more than a year for evidence of rigged bidding and other misconduct by banks that sell investments and derivatives, such as interest-rate swaps, tied to municipal bonds. This week Wachovia Corp. and Piper Jaffray Cos. also disclosed in SEC filings that employees were targeted.

The Governor of New York is Eliot Spitzer. He used to prosecute guys on Wall Street. Now he is going after them yet again and he is very much like a shark in this regard. I expect arrests. The good people of New Jersey should get on their own governor's case! He used to be the President of Goldman Sachs! Note how he hasn't been all that noisy about the coup at the muni bond sales. That whole business stank to high heaven, by the way. I look forward to the arrests.

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Out Of the Breach! Prince Hal!

Leaping Lizards Day

Elaine Meinel Supkis

Prince Hal is being pulled out of Afghanistan. He loves it there because he can be 'normal'. HAHAHA. True to his royal roots. Iran and Russia grow closer and make more gas/oil deals. US talking heads worry about China muscling us out of the Middle East even as we send in yet more warships to patrol the seas there. Troops are going up, not down in Iraq except for Prince Hal who wasn't allowed to go there. And Turkey finishes killing Kurds and begins its exit while the Jews in Israel bomb little boys playing soccer. Sec. Gates warns Pakistan to not talk to Pakistanis who are revolting against our dictator there. HAHAHA.

Prince Harry to Return Home After Combat

Harry, 23, third in line to the British throne, deployed to Afghanistan on Dec. 14 and has been fighting Taliban forces from a forward combat base in southern Helmand province.

His presence there had been kept secret from the public in a remarkable deal between the British military and media. But the secret was revealed in two little-noticed articles in an Australian tabloid magazine, and then blasted into the global media spotlight Thursday by the Drudge Report Web site. Harry's deployment immediately became sensational news here, rekindling an emotional debate about whether the red-haired second son of Prince Charles and Princess Diana should be risking his life in war.

Up until the death of Bonnie Prince Charles, British royals still occasionally visited the battlefields. In days of yore such as the Battle of Hastings, the King was in the Van and not the van driving outside of London to a palace but in the van where the banner flew high and brave. Swinging his mace or sword, he led his troops into battle. More than one died this way. 'A horse! A horse, my kingdom for a...erp!' as King Richard III said. Now, as the empire is now dead and gone and the last shreds of sanity left the royals back in 1776, we have the spectacle of England still invading lands they invaded long ago only the poor little royal pets have to be penned up and muffled in cotton at home, except for Diana. She was killed. Um...on the battlefields of France, slain by freelance photographers.

The Prince wants to live brave and free and enjoy the honest prerogatives of his lineage. To kill peasants! Killing peasants has a long, long history. He can't go to Ireland to do this anymore. Certainly, he can't go to Scotland and lay land to waste! His mother's throne sat upon the rock of the Scottish kings, brought south after great slaughter. No, the poor lad is being forced by the poodles in Parliament to come home and live like a pampered Yorkie. He is to pose in picturesque ways for photographers who will hound him. And he can't get on a war horse and pound them into the ground with his battle mace! I feel his pain.

The ruling elites in the US are acting the same way. Unlike in WWII when all fought, since then, the spawn of the rich slink home and hide. They would love to be in Prince Hal's boots. To be forced into cowardice is their wet dream! But the Prince is true to his real calling. And I find this very amusing. I hope he quits the Royal Lists and goes out as a pirate. He can sail the Seven Seas and raid his mother's islands. Lots of loot there. I give him my blessings in this.

Russia gas pact energizes Iran

While Washington, facing European Union discomfort and frank opposition from Russia and China, remains obsessed with another round of United Nations sanctions against Iran, the facts on the ground spell an overwhelming "expansion of mutual cooperation" in the energy sector between Iran and Russia.

Iran holds the world's second-largest proven natural gas reserves, behind only Russia. Alexei Miller, chief executive of Russia's state-run gas exporter Gazprom, recently visited Tehran and met with Iran's Oil Minister Gholam-Hossein Nozari. The result is that Gazprom will develop "two or three" blocks of the monstrous South Pars gas field in Iran; and its daughter company, Gazpromneft, will also be part of a huge oil project in Iran. Gazprom has been in South Pars since 1997, alongsideTotalFinaElf of France and Malaysia's Petronas.

For Iran, this is really big news. Reza Kasaeizadeh, the managing director of Iran's National Gas Company, now insists that Iran will supply no less than 10% of the world gas market in the next 20 years; currently it's only 1%. Iran at the moment exports gas only to Armenia and Turkey. When South Pars phases 17, 18 and 19 are developed by 2013 that will be a whole different ball game. South Pars - which Iran shares with Qatar - is the largest gas field in the world. Annual output of its eight blocks on the Iranian side stands at 73 billion cubic meters; in the next few years it will easily reach 200 billion cubic meters.

So much for the US trying to kill Iran Kitty. I will have my art abilities back very soon and will be able to cartoon, etc, again! Today, my Adobe Photoshop arrives. At last. Iran Kitty has won every round with the World Empire. As we try to kill the cat, it kills us via high oil prices. $103 a barrel and climbing. Someone in the media ought to explain this matter. Attack Iran kitty: price of oil shoots up. Stop attacking=price of oil drops. See? How simple is this lesson? This news won't make much of a splash in the US, of course, but in Europe it is big, big news. Europe doesn't want the Russian bear chomping at their throats. This month, to prove how much contempt they all have for Russia, they chose to recognize Kosovo as a great causus bellus for WWIII. Isn't that darling of them?

Prince Hal may be fighting in a nuclear war at home! He can wave a sword at the missiles as they rain down. Why is the West doing this madness? Why are we digging up excuses for wars that go into the dim past? The cave of death is all about history! And history is that Bitch who laughs as she weaves our fates.

Europe was going to get gas from the Middle East rather than Russia. But this is not a working strategy. Germany recently had to cut all trade with Iran who has retaliated by trading with you-know-Hu! And Hu is HAPPY. Will we slit our wrists and throats as a means for winning WWIII? What the hell?

We are going bankrupt spending as if this were WWIII. And this is the plan: Russia, China, Bin Laden, Iran, Venezuela, Cuba and nearly everyone in the Middle East are hoping we go BANKRUPT. And money is war in another form. The refusal to understand this plagues Europe, Japan and the US. The G7 think they can play stupid monetary games of debt while going to war with half of the planet and this is a total failure.

Not that anyone listens to me when I channel the Norns, Fates and Furies.

US Sending 3 Warships to Eastern Mediterranean As Regional Tensions Mount

The U.S. Navy is sending three ships to the eastern Mediterranean Sea in a show of strength during a period of tensions with Syria and political uncertainty in Lebanon.

Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, told reporters the deployment should not be viewed as threatening or in response to events in any single country in that volatile region.

"This is an area that is important to us, the eastern Med," he said when asked about news reports of the ship movements. "It's a group of ships that will operate in the vicinity there for a while," adding that "it isn't meant to send any stronger signals than that. But it does signal that we're engaged, we're going to be in the vicinity and that's a very, very important part of the world."

We should send the USS Liberty. Let Israel sink it again. They are the only nation on earth that can demand we do military moves for them even when they openly attack us. Not to mention, bankrupt us. Cut them off. Not one thin dime for Jewish colonialists.

China and the Middle East...A new frontier and a big challenge for the US.

The Global Power Barometer has been tracking for nearly two years the rise of Chinese diplomatic activity in Africa. It began first when countries such as South Africa, Kenya, Zimbabwe and many others switched their diplomatic penchant from Taipei to Beijing after heavy economic incentive packages were offered by China across the continent. Now only five countries in Africa still maintain ties with Taiwan: Burkina Faso, Swaziland, Malawi, The Gambia and Sao Tome and Principe. By 2006 many global analysts had taken significant notice of China's prowess in Africa, observing large Chinese expatriate communities across Africa, in charge of projects such as mining in Zambia, steel plants in Zimbabwe, transportation planning in Namibia and oil exploitation in Sudan. Beijing hosted a massive summit for African leaders in 2007 (with 43 member nations attending) and Chinese President Hu Jintao has visited more African nations than most people in the Bush administration could probably name.

Recently, global thought leaders have been taking note of a new trend: China's growing role in the Middle East. On Sunday, one of China's state news agencies, Xinhua, reported that an Egyptian leader praised Beijing for its positive role in Sudan. This is significant, given the massive international criticism China has been receiving for its blind eye turned toward Khartoum's role in the genocide in Darfur. China, a supplier of arms to Sudan, and with a large stake in Sudanese oil, now comes under fire from international rights organizations especially in light of this year's Olympics to be held in Beijing. Egyptian expert Hani Raslan, head of the Sudan and Nile Basin Studies Program of the Al-Ahram Center for Political & Strategic Studies praised China's role in Sudan, saying: "China provides humanitarian aid, builds water projects, hospitals and schools in Darfur to promote local development and improve people's lives. China doesn't interfere in Sudan's internal affairs. China's investment in Sudan can help improve the expertise of the local people." (For the full story, see China key articles).

This is the sort of childish analysis that passes for talking heads today. Obviously, China is going to do business with all the people we reject. The US loved to think of Africa as a 'Dead Continent Walking.' This was pure racism. And instead of paying reparations for the enslavement and looting of Africa, the G7 nations chose to push Africa into debt and then LECTURE THEM ABOUT FISCAL RESPONSIBILITY. This is going to hurt: the G7 are the most fiscally irresponsible collection of nations on earth, bar none. And all of Africa is waiting with bated breath to watch the IMF, World Bank and all these colonialist nations collapse into bankruptcy! China is not rich but will have money to lend in a world that is seeing nothing but wall to wall bankruptcies. And this is all our fault: we put our domination of the earth on our American Express Card and then threw away the monthly bill statements and paid nothing on it.

US-India defence deal 'to counter China'

America is attempting to forge a strategic alliance with India with a series of arms deals as the South Asian nation bolsters its defences against China.

Robert Gates, the US defence secretary, will arrive in New Delhi to strike a common position on Beijing with the Indian government.

His arrival comes as New Delhi decides whether the US firms Lockheed Martin and Boeing, or Russian and European rivals, will win a contract to supply the Indian air force with 126 combat aircraft in a £5 billion deal.

And we are trying to balance our trade deficit by selling arms. I remember when we wanted to punish both Pakistan and India for nuclear expansions. Now we are trying to rule both at the same time. China plays for one and then the other. The US rushes back and forth. Now, as we arm India, Pakistan will go to China for help! And China is giving them help! China is more concerned with Pakistan which shares borders that threaten to explode thanks to bin Laden. And China's borders with India are protected by Maoist revolutionaries in Nepal! India can't control Nepal. China waits for Nepal to fall into their lap. So India wants the US to stop this and the US is going bankrupt, as I have pointed out so often. We can't control the planet. We can't control ourselves and Prince Harry can't control England. And England is the Mouse that Roared only it is squeaking as it runs in circles.

Turkey says military operation in Iraq might last a year

Turkey's military operation in northern Iraq against Kurdish separatists could finish in as short a time as one day or take up to year, Turkish Chief of General Staff Yasar Buyukyanit said on Thursday.

On the sidelines of talks with US Defence Secretary Robert Gates in Ankara, NTV television said Buyukyanit repeated Turkey's promise that it will withdraw Turkish troops as soon as possible but refused to name an actual date.

"The shortest time is a relative concept. It may be one day or it might mean a year," Buyukyanit was quoted as saying.

Earlier, Gates said that Turkey should quickly wrap up its military incursion against Kurdish separatists in northern Iraq.

In order to stop "terror," not just military but also economic and political initiatives must be made, he said.

They are pulling out after scaring the G7 to death. Turkey wants to be part of the EU. Maybe this will scare Europe into letting them in. On the other hand, maybe they will decide to go the other route. If the US collapses, it is quite possible. Between themselves and Pakistan, dividing up the Muslim Sunni world. The Shi'as will form their own empire, I guess. The US/UK empire can't keep this process from happening much longer.

Israeli forces pound Gaza Strip

Israeli forces have kept up attacks on the Gaza Strip, where they have killed at least 32 Palestinians, militants and civilians, since Wednesday morning.

Four Palestinian boys were killed in an Israeli attack as they played in a field in northern Gaza on Thursday.

Life in the Gaza Warsaw Ghetto. The US watches and yawns. We lose more power with each massacre.

MORE TROOPS FOR IRAQ AND AFGHANISTAN, DEFENSE DEPARTMENT SAYS

The Defense Department says it needs more troops to fight in Iraq and Afghanistan. But an Army general warns that troops already in the fight are under too much strain. The warning comes as violence in Afghanistan – unlike Iraq, where violence is down - is expected to increase.

We can't win. And so long as we think we can steal stuff in the Holy Land, we are doomed elsewhere. Either we pull out or we go bankrupt. These choices are not choices but inevitabilities. Note that no one running for office now, the top three, that is, are mentioning this terrible truth. McCain thinks we can be there forever. So does Clinton and Obama. Anyone who dares to suggest the Jewish coquistadores must stop will not ever be heard on TV again. Just as Paul and Kucinich were rubbed out. The American people are not being given a choice here because no one can talk about the choices nor talk about the LACK of choice here. The option of continuing on this disastrous course is NOT POSSIBLE. And we should know the details about why and be forced to understand that this is reality: we can't conquer the Middle East without nuclear war and if we have nuclear war, we all will die. So much for any overpopulation problems.

The winners won't be alive, by the way. Nor will the losers. Note the top of this news service here: cockroaches will win WWIII.

US cautions Pakistan over Taliban

US Defence Secretary Robert Gates has said any new government in Pakistan should be wary of holding talks with the pro-Taliban insurgents. Gates told the BBC that efforts of the previous administration to negotiate with the militants had not worked out.

Speaking in Delhi, Gates said the polls had been bad for Musharraf. But Gates said the US hoped to continue working with the man he described as the elected president of Pakistan. Gates said the new government would have to face the reality that the al-Qaeda militants and insurgents were operating along the frontier.

"Even the Musharraf government tried talking and doing deals in Waziristan. That didn't work out very well," he said. "Maybe this new government in Pakistan will have to go through the same experience itself," he added. Opposition leaders have hinted they are willing to talk to the insurgents, with a view to drawing them into the political process.

I listened to Gates on the radio. He sounds exactly like Elmer Fudd. He looks like old Elmer, too. I once knew a monkey by that name. He was shot by the police. But this Elmer is roaming the planet talking about 'that scweeewy wabbit.' This is one step lower than Condi Rice striding about, flashing her comely legs while talking in a quavering, frightened little girl voice. She would make a fine consort but is a terrible strong arm man or woman. People were scared of the previous female Secretary of State, Kirkpatrick. She could turn Medusa to stone. And a good thing, too. When one negotiates and one is pretending to represent the top global power, quaking in high heel boots and stammering while eyes dart back and forth just doesn't work any more than sounding like Elmer Fudd.

Cheney shoots like Elmer Fudd but he is scary. Don't go hunting with him. Or if you do, make him walk in front. By at least 50 paces. And don't look for game, watch him like a hawk. Afterwards, you can say, 'I thought he was Dan Quayle.' And so it goes: we can't pretend we are a power if we are a weak.

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A Carpet Of Dollars Can't Sop Up All The Red Ink

Leap Year Day of Doom

Elaine Meinel Supkis

Today is a very magical day: it is the missing day to make up for the light glitch in the solar calendar. A mysterious day which is turning into a fall through the floor day for investors. The dollar continues to fall, stock markets around the world are falling and leverage money making is falling and all is going down the Leap Year rabbit hole together. This reminds me that a year ago, when everyone was boasting about how strong the world's economies were, we had this sudden plunge right about now! And I said, this was a harbinger for things to come when it all would begin to unravel.

One of our readers, Tony, sent me this bit of numbers business:

Speaking of burning $1b dollars - I wanted to let you know that after trying to wrap my mind around his 3 trillion dollar budget I calculated the following:

3 trillion one dollar bills would carpet the entire continental United States...23 dollars deep!!

Why not simply be honest and just put a sideways number eight on the f*king budget and be done with it!

I own 22.8 acres of land. So at 9.6 $ per sq ft, 43,560 sq ft per acre, we would get from the Bernanke helicopter drop, $2,377,942.14. Or rather, since this is spending, I would owe this amount. I don't know that these calculations are correct but it does go well with the Reagan comment that the US debt could, if the dollars were laid end to end, reach the moon---back when it was only a trillion dollars. Now, the deficit is nearing $10 trillion as it heads towards Mars. Actually, we are still merrily spending as if there is no tomorrow. I intend to talk about that and gold later today since all this brings up the Bretton Woods II mess and wage/price controls. A long article that would make this one too long. First, today's bitter news:

Clinton and Obama Focus on Economy; Bush Finds Fault

Hillary Clinton and Barack Obama pressed their economic messages today, drawing in President George W. Bush, who scolded the Democratic presidential candidates for their tough talk on trade.

Touring Ohio, Clinton put out a $5 billion, 12-year plan to cut in half the 13 million U.S. children living in poverty. The plan also would seek to end child hunger by 2012.

Obama reiterated his proposals for strengthening the middle class and ensuring fair trade agreements, saying he would roll back some of Bush's tax cuts to the level they were during the administration of former President Bill Clinton.

``Most rich people were doing pretty good in the '90s,'' the Illinois senator said in Austin, Texas. ``They were rich then and they will be rich when I am president.''

In depressions, the rich who are not in debt remain 'rich'. Wealth is all about relativity. If a man with a dollar in inflationary times is poor, a man with a dollar in depressionary times is rich. The person with money when no one has money, is rich. In the Middle Ages, wealth was depressed so badly since the fall of the Roman Empire, signs of wealth were reduced to its simplest level by 1000 AD. The ONLY persons allowed to sit in chairs were high church officials, kings and emperors. They called these things, 'thrones' and down the scale it went: stools went to the barons, benches to the chivalry and sitting on the floor or standing to the lower levels. When Parliament met back in the times of the Tudors, for example, this being in the 1400s-1600s, the Burgess demanded to sit on bags of wool as a reminder to the kings and queens of England, their tax money came from wool. Before that, they stood while the sovereign sat on the aforementioned 'throne'.

Every election since Nixon, our candidates, one and all, promise to make trade deals that aren't double deals. Yet every one of them does the double deals. Why is this? We just have to look at who is paying for our elections. The main top individual donors pouring millions into elections as well as the media that mediates these things are one and all, united in their desire for open borders and bad trade deals for the US workers. True, our candidates often raise millions from millions of small donors. But this money can be discounted due to the simple fact, these moneys have no strings attached. If NO ONE contributes, the handful of rich donors seeking to open our doors to exploitation will still be powerful since they don't need the small donors. Only if all small donors gave to an upstart party such as under Ross Perot, can we see a serious push away from open borders.

Note Perot here: he took a good hunk of the vote thanks to his personal fortune united with many small donors to talk about the 'giant sucking sound'. He was trashed pretty thoroughly by the ruling elites and note that NO ONE dares appear in public like he did armed with graphs, pie charts and numbers to debate reality! I loved Perot just for that one thing. I itch to see this happen again. But it will not. We have probably one of the most desultory debates about finances possible considering that we are deep into a total banking/finance meltdown of historic proportions. Yet our candidates who remain standing as well as the Fed and others are sleepwalking.

This is where we miss people like Ron Paul. If nothing else, he is a refreshing slosh of water in the face! The need to talk about bottom lines, gold and war financing is at the top of the agenda but in this election, is at the bottom. We have, instead of a decent argument about all our treaties and accords, nothing but Santa Claus promises. All my life, I have watched the public run off to whoever was promising them the most goodies. This disgusting activity has driven our nation down into a very deep hole. Since the people at the top don't care if we go bankrupt, the people in the middle and bottom don't care. The people at the top, instead of running to tax havens while using offshore accounts to flood our finances with debts, if they were serious about protecting America, they would change their own course. But they won't.

The wealth they get this way is too tempting. They don't want to sacrifice one bit of their pleasures and fun in order to build a nation. Instead, they enjoy tearing apart our nation because this gets them richer. So what if we go bankrupt? They plan to decamp to other shores! And this is treason. Our candidates must secretly deal with these traitors while pretending to be patriots. This is why we had a flash in the pan yell-a-thon about Obama not wearing a US flag lapel pin! Talk about stupid. The biggest traitors wave the biggest flags. And just like we have news about the cost of hair dressers or the photos of our leaders wearing funny clothes dominating our media, we have no mention about the cost of government, cost of war, cost of the US life style.

Financial Services Authority turns to insurers as it looks for the next crisis

The Financial Services Authority has turned the spotlight on the insurance industry as it tries to seek out the next problem waiting to explode in the financial industry following the sub-prime mortgage crisis.

The City regulator has written to insurance companies asking for details of their illiquid assets and credit derivatives as it tries to uncover where the risks lie in the financial system.

Insurers are being asked for details of their exposure to credit derivatives - complex financial instruments that have been at the heart of the current financial turmoil. They are also being told to outline how they are valuing these assets at a time when financial markets have frozen up, making it difficult to be confident about their precise value.

I put this in to show that the financial mess isn't made just in America. It is epidemic within the G7 framework. Even countries like Germany that once boasted, it wasn't part of this mess, is part of this mess. The entire get up of the financial accords hammered out over the last 35 years is rapidly imploding and we have only just begun to see the emergence of the Derivative Beast from his dark, deadly cave! Much of the M1 and M2 money growth in the world is in the G7 nation framework. This money flow system is based on 'free trade' which means 'flood the US with imports and pocket the profits and then laugh all the way to the bank.' Only this dynamic is now hammering all the G7 partners of the US. They are now becoming the destination of a flood of imports! The Japanese are fending this off by simply not leaving any excess income to spend on much of anything within their own working class. The US vacillates on this matter. The people funding our candidates want to starve the working class but they want the working class to spend. Thus, the desire to expand working class debt. Only we just hit the ceiling: debts can't rise much more. Time to raise wages. Only this will cut into profits. The ruthless severing of the unions continues as all the major manufacturers with unions continue their buy-outs so they can hire cheap labor. This means, the new workers can't buy much of anything. Classic depressionary systems!

AIG Posts Biggest Loss, Misses Analysts' Estimates

American International Group Inc., the world's largest insurer by assets, posted its biggest quarterly loss as a publicly traded company after an $11.1 billion writedown of guarantees sold to fixed-income investors.

The fourth-quarter net loss of $5.29 billion, or $2.08 a share, compared with profit of $3.44 billion, or $1.31, a year earlier, New York-based AIG said today in a statement. AIG said it doesn't expect to repurchase shares for the ``foreseeable future'' beyond commitments made last year. The company declined in extended trading.

Another sign of the ongoing financial collapse. AIG made a profit last year because many deals were made requiring 'insurance' and so they got the fees. But when the fees vanished as the insurer had to pay out again, now they discover a 10% or less reserve ratio is no good in a hurricane. Just as the major damage from Hurricane Katrina came not from the winds of the storm but from the levees collapsing, so it is here. The levees that separated the dry funds from a flood of red ink have collapsed and now everything is drowning in a sudden and 'unexpected' overflow of red ink.

Since this is a dam collapse and not mere overflow, the money will gush continuously until the river runs dry. Meanwhile, all the central banks in the G7 are frantic to increase liquidity. If my metaphor is correct and I think it is, this means they are worsening this mess. We can't fix the overload of debt by adding more debts. Bankruptcy exists in order to deal with this sort of ceiling: no system is infinite. And infinite debt is impossible. So instead of trying to discover this truth the hard way like Weimar inflation did with their own debts back in the 1920's, so it is here. We must bite this bullet. It is not going to be easy or fun. But we can't let a total banking meltdown get worse and worse forever. The intricate web of treaties, organizations, deals, situations and reciprocal accords and arrangements cannot be battered like this forever. And fixing things means fixing fundamental things.

In this case, the fundamental at stake is the US: our multiple deficits. Trade, finance and military are all one and the same problem. We can't continue as the world's biggest empire and biggest debtor nation all at the same time. The time to give this up is rapidly approaching. We best deal with it directly, now, rather than wait for the Chinese to deliver it to us on a silver platter with our head lying in a pool of blood.

Private equity head hits back after attack by buyout pioneer Moulton

The barbs, made in a speech on the last day of the industry's showpiece conference in Munich, were interpreted as a thinly veiled attack on Mr Moulton, the founder of Alchemy Partners.

Mr Moulton had delivered the opening address for the Super Return International conference on Tuesday. The industry grandee trained both barrels on what he called the "enemies" of private equity – from the media and trade unions to politicians and hedge funds – before launching a surprising attack on the BVCA.

He criticised the trade body for using "dodgy" statistics to paint private equity in a misleadingly positive light. "We shouldn't use flaky statistics to show an over-optimistic image," he said.

Mr Walker, a former press secretary to the Queen, said the BVCA stood by its research but did admit the numbers were not perfect. "We need a lot more data, and it's my job to see that it happens.

'Data! Data! My Offshore tax haven for more data!' cries the secretary of the Queen as he stumbles around Bosworth Field. The numbers aren't perfect? HAHAHA. I will note here that Her Majesty's servant slithered off to the offshore haven heaven for royal barking dogs to make some loot! Isn't that ever so funny? Meanwhile, Prince Harry is shooting turbans in Afghanistan in the present movie, 'Harry of Afghanistan.' Into the breechcloths! O, band of brothers! Meanwhile, back in the financial trenches, the men with the tranches are trembling. Boo hoo! The media is mean to them. Perhaps they will try again to sue me to make me stop talking about the Queen, her pirates and their covens.

Speaking of covens, note the name of the group here: Alchemy Partners. LLP. HAHAHA. The sorcerer's apprentice guild incarnate! One reader here sighed with relief when I didn't mention Her Majesty's pirates or wizards yesterday. Well, I am NOT the one who keeps bringing this up! It is all in the news! Should I ignore this? HAHAHA. No. I won't. The Alchemists are attacking the Queen's pirates and yo-ho-ouch. I hope they turn them into newts.

Under the normal rules of capitalism, any industry that can produce double-digit annual growth should soon be swamped by eager competitors until returns are driven down. But in fund management that does not seem to be happening. The average profit margin of the fund managers that took part in a survey by Boston Consulting Group was a staggering 42%. In part, this is because most fund managers do not compete on price. Instead, they persuade their clients to select their funds on the basis of past performance, even though there is little evidence to show that this is a good predictor of future success. Nor can investors be sure that the intermediaries who sell the funds—brokers, advisers and bankers—will steer them in the right direction. These middlemen often get a cut of the fund managers' fees, so they have little interest in recommending low-cost alternatives.

Can we all say it in a chorus? HAHAHA. Pass the bottles of beer on the wall, me darlings! Talk about collecting loot. And these pirates wonder where the investors went. Until these creeps running these funds are punished with a whack from a cat of nine tails, they will continue to loot. And they will NOT figure out why this is bad. Not for a while. Only after most of them are in prison, out in the streets, begging or fleeing enraged mobs, will we see an end to the present financial crisis.

Leveraged funds rush to sell debt

Troubled leveraged funds are likely to sell almost $100bn worth of asset-backed bonds and financial company debt by the end of the year as they struggle to avoid defaulting on their own debt, according to analysts at Citigroup (NYSE:C) .

Sales of asset-backed securities, such as mortgage-backed bonds and collateralised debt obligations, have gathered pace in recent weeks, pushing prices down further and keeping the market shut for new issues.

And as more fake money vanishes, let us wave a hanky in bye-bye. These ships aren't vanishing over the horizon, they are pulling a Titanic. Glub. Down they go as they squabble on the deck. Note that these funds are all LEVERAGED. These clowns created a huge sea of red ink. They borrowed money to play money games. The more they played, the more money they borrowed and the more debt was created. This went on and on as it was laughably easy with loans running below the rate of inflation. They still do! Inflation rages, thanks to all this. And loans are even cheaper than ever! But the downward spiral has begun. Like any dynamic movement, it must go all the way until the end. People up to their eyeballs in debt can't get out of debt via more debt. This is logic.

I say, it was OUTLAWED, this use of debt to play speculative games! Then this was thrown away and the doors to a flood of debts were opened wide as it is much more profitable to bet with someone else's savings than one's own! Note that again, in the news, is this story of a trader, this time in wheat, pulling an Evil Keviel. 10% of the wheat futures were fictional trades! Based on no funds. Ergo: illegal. But then, the speculations based on loans should be illegal, too! They are boosting all the commodity markets right now. This flood of lending continues to seek bubbles. And is succeeding.

Peloton Blames Wall Street Lending Crackdown for Fund Collapse

Peloton Partners LLP, the London- based hedge fund manager being forced to liquidate a $1.8 billion asset-backed fund, said it's a victim of Wall Street's reduced lending.

``Credit providers have been severely tightening terms without regard to the creditworthiness or track record of individual firms, which has compounded our difficulties and made it impossible to meet margin calls,'' Peloton co-founders Ron Beller and Geoff Grant said in a letter yesterday to clients.

Peloton joins Thornburg Mortgage Inc. and Sailfish Capital Partners LLC on the growing list of funds and companies that have had to sell securities or shut down after banks restricted how much they could borrow, or demanded more collateral as values of securities backed by mortgages slumped. The world's biggest financial institutions are cutting off lines of credit to hedge funds after at least $163 billion of asset writedowns and market losses.

``More hedge funds will blow up this year than ever before,'' said Michael Hennessy, who helps oversee $10 billion of hedge fund investments at Morgan Creek Capital Management in Chapel Hill, North Carolina. ``Financing is much harder to get. The bubble has burst.''

All these ships were made of paper. Like paper hats set afloat, they are now all soggy and sinking. Note how these hell hound hedge funds were making their deals with debts! I complained about this for years! And as usual, when this happens, it causes a total melt down when deals unravel. After the Great Depression, Congress figured this out and passed laws forbidding this sort of stupid thing. Unlike someone who has savings in a bad deal, one can hang on for dear life for several years. BUT if the money is BORROWED and the equities it is borrowed against, whether real estate, stocks, etc, if these fall, then the bill comes due if it is more than the assessed value of the equities which have debts parked on top of them.

So in bad times, forced sales shoot up! To prevent this, our government tried to disallow this sort of goofy finances. This was tossed out by people eager to make themselves rich without real work. Now we get the downwards multiplier effect: each fall forces more falls. Each equity, as it loses value, forces more sales. This is true in real estate as well as in the hedge funds. Both echo each other, too! Creating a 'perfect Katrina levee collapse' moment.

VRDOs Spell More Trouble For Banks

Yes, we've heard all about the problems in the mortgage derivatives markets, with the bond insurers, and in an arcane and little understood corner of the debt markets: auction rate securities. But a form of municipal money market security called the variable rate demand obligation (VRDO) and related tender option bonds and Dutch auction structure securities are also wrecking havoc.

Like the auction rates securities recently grabbing headlines, VRDOs are another one of those long-term debt masquerading as short-term securities deals. The banks that invented them converted long-term tax-exempt bonds into investment eligible money market funds by agreeing to let investors sell their holdings in periodic Dutch auctions or by backing them with funding commitments, and getting a rating from a monoline bond insurer to enhance the credit.

There is about $250 billion of VRDOs outstanding and another $350 billion of Dutch auction structure securities.

Since all our governments are in the red, we need bond markets to function. Since we allowed all the Great Depression laws and rules to be suspended or eliminated, we get to see gravity do its worse. As everything collapses, we have to recall that 9/11 was just like this: the very weight, the poor design of the World Trade System is collapsing from its own weight as well as significant damage from war! And the fires of misspending on war are destroying the guts of our WTC nation. Just as on that day, the whole thing is imploding at a very fast speed. The ditherings of our leaders is comic in comparison. They are reading 'The Pet Goat' in unison even as we are all running around, screaming. All forms of investment are seizing up because the underlying basis is 'leverage' which is 'red ink' which is 'the carry trade' which is the Bank of Japan. Now, the US is becoming the 'carry trade'. And these powerful shifts in relative power and value are hammering us internationally as well as in domestic markets! All these banking panics in history have ALWAYS led to depressions.

No matter how we try to evade this fact, this is the truth. The belief that we can spend our way out of this is foolish since we are deep in debt. Japan is deep in debt. England is deep in debt. Yet all three act as if they can generate infinite loans! Japan does have a huge trade surplus with the other two but this is now changing direction. The joy the Japanese had at the news that the US was going to misspend more money has now evaporated. The yen is up. They read that most Americans intend to save their bonuses, not spend them on Japanese imports. So the Nikkei, which rose 1,000 pts on the news of easy loans, more debt and more funny money, has now fallen by nearly this much and will continue to fall.

Regulators are girding for dozens of bank failures. There were just four last year and an unprecedented none in the 18 months before that. Ben Bernanke, chairman of the Federal Reserve Board, said Thursday that banks will have to raise capital so they can continue to lend, which is his way out of the credit market crisis.

In 2006, no banks failed due to the flood of easy money pouring across our land! Even bankrupt individuals couldn't go bankrupt! We saw TV shows of people filing for bankruptcy and getting credit offers THE SAME MONTH! All the banks were desperate to make these deals! Who could lose? But now, this is over. Now, it is hard to get loans. Bankruptcies are soaring due to the very same easy money given out like candy in 2006. This will end only after all the bankrupts are bankrupt.

Putin Makes Medvedev Suffer Russian Inflation Jolt

Russia's prosperity is built on nine successive years of expansion, a sixfold increase in average incomes and almost $500 billion of currency reserves. They contribute to Putin's inability to contain consumer-price growth, which overshot its target in every one of his eight years as president except 2003.

Medvedev, 42, the likely winner of the March 2 election, must find ways of containing inflation that accelerated to 11.9 percent in 2007. Failure to do so may trigger unsustainable wage demands, squeeze consumer spending and dent company profits.

Cash dominates transactions, with almost 90 percent of cards used only to withdraw rubles from bank accounts, according to Anatoly Aksakov, a member of the lower house of parliament.

Just included this to prove, inflation is global, not local. Oil selling nations have it. Manufacturing nations have it. And the evolving depression will finally kill inflation the hard way.

Dollar Falls to 2 1/2-Year Low Against Yen Before Spending Data

The dollar fell to a 2 1/2-year low against the yen on speculation a U.S. government report will show consumer spending stayed at the weakest in six months.

The currency headed for its biggest monthly loss against the euro since September as a cooling economy prompted traders to bet the Federal Reserve will cut interest rates at least twice more this year. The dollar is the second-worst performer this month among 16 major currencies against the euro after Fed Chairman Ben S. Bernanke said the dollar's depreciation is ``a positive factor'' for reducing the U.S. trade deficit.

``This is the Bernanke shock, causing much faster dollar depreciation than expected,'' said Michiyoshi Kato, a senior vice president of currency sales in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's second-largest publicly traded lender by assets. ``We are entering into another world of dollar weakness. The Fed is not unhappy about that.''

The U.S. currency declined to 104.67 yen, the weakest since May 2005, before trading at 104.88 yen as of 9:24 a.m. in Tokyo, from 105.37 yen in New York late yesterday. It traded at $1.5188 per euro, from $1.5193 in New York late yesterday, when it touched $1.5229, the weakest since the euro began trading at about $1.17 in January 1999.

The dollar may fall to $1.5230 per euro today, Kato forecast.

The Japanese complain about a weak dollar while they flooded us with goods and debts. The wave of inflation this has caused has now sloshed back into Japan as we see in the Nikkei news:

Jan Core CPI Rises 0.8% On Year

TOKYO (Kyodo)--Japan's key consumer price index rose 0.8 percent in January from a year earlier, the government said Friday.
*********************************************
Stocks: Open 2% Lower On Stronger Yen, Fresh Credit Turmoil

TOKYO (Kyodo)--Tokyo stocks opened about 2 percent lower Friday on the U.S. dollar's fall into the upper 104 yen range and fresh credit turmoil sparked by grim comments from U.S. Federal Reserve Chairman Ben Bernanke.

We all must remember this harsh truth: inflation can't be stopped by easy credit or more government spending. Energy and food price hikes are the nastiest and most important forms of inflation because no one can escape them in inflationary times. And all inflationary periods are balanced by deflationary periods. And there is no infinite debt. And pirates are EVIL. Someone better inform the Queen about this. And finally: I am going to find out tonight if I will be on national radio. Will give the details later. The wall of isolation is breaking down! I hope. It has been a long time coming. Also, my new Adobe Photoshop is coming today! I can cartoon again! Hooray! Thanks to generous readers. Thank you, all. You are so wonderful!

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Washington--You Are FIRED!---A movie review

2/28/2008

Elaine Meinel Supkis

Mr. William Lewis, a fine film maker, contacted me recently to let me know that my news service appears in a movie he just made. He then sent me a copy. It is called 'WASHINGTON---YOU ARE FIRED!' So my husband and I got it today in the mail and sat down for over 2 hrs worth of very good, informative, fair, well-paced and well-directed movie about the Bill of Rights and how we have lost them to a bunch of liars, crooks, devious deal makers and our Congress critters in DC. This new movie is a definite must-watch. Left, right and center: we all have the same civil rights at stake!

Washington, You're Fired!
A film about taking back OUR government

What if the President of the United States had ordered the NSA to data-mine the electronic communications of every single American... BEFORE the attacks of September 11 had even occurred? What if every email, every phone call; every time you surfed the Internet, your private communications were being siphoned into a gigantic dragnet funded by a forty-five billion dollar budget and carried out in cooperation with the FBI, AT&T, and Verizon? Compelling first-hand testimony and whistleblower accounts, punch holes in the official "war on terrorism" excuse that has been used to dismantle the U.S. Bill of Rights and tip the scales of executive checks and balance in this country.
The United States stands at a threshold where one man, the President of the United States, has been granted dictatorial ruling powers by the U.S. Congress. The President, any president, now holds solely in his or her hands the power to become judge, jury, and executioner. Is this the kind of government that our founding fathers enshrined forever in the U.S. Constitution? Will the American people recognize their loss of civil liberties and rise up to affect change in Washington or will they drift even further into a state of affairs that is quickly beginning to resemble that of a 1940's police state; complete with a National ID, a Homeland security force, and enough "terrorist-related" spy laws to know what color underwear you have on at this very moment...

Do the American people even know the names of the Bills that were used to exterminate the U.S. Constitution? Chances are, the answer is no... "Washington, You're Fired" is a chance for every American to play a serious game of political "catch-up" minus the partisan punch lines. We'll examine both sides of the political aisle exposing some of the most damning laws ever enacted in any country.

Bills such as the USA PATRIOT Act, the Military Commissions Act, and the John Warner Defense Act have crippled the U.S. Constitution and have weakened the liberties that Americans once thought they could never lose. The loss of Habeas Corpus and Posse Comitaus; coupled with a new definition of “torture” are just the tip of the Orwellian iceberg. If enacted, HR 1955 will for the first time put “thought crime” laws on the books, robbing Americans of their right to freedom of conscience thought.

We will examine constitutional issues as they relate to the Katrina disaster, the President's illegal spy program, NSA data-mining, FISA's secret court, the illegal wiretapping of millions of Americans, the re-defining of "privacy" rights, frightening Executive Orders and "terror-war" legislation.

We don't just drop the bomb and run... In "Washington, You're Fired" you'll be shown what to look for in any candidate for political office, plus we provide the tools necessary to enable all of the people to make informed decisions about their political candidates. Problems and solutions are addressed by man on the street interviews with people who think just like you do... and a few who don't, but that's America... right?

“Washington, You're Fired” is a powerhouse of information that every person in this country must fully comprehend before casting their vote in 2008 or in any election for that matter. Get a copy today and share it with someone you care about.

Written, Produced & Directed by William Lewis
Co-Written & Produced by Keith Abel

Feature length DVD $19.95

This movie was a joy to watch. The director knows how to make good transitions from one topic to another. The movie covers a lot of ground from WWII till this last year, 2007. It moves from discussing the CIA to the history of wiretapping, the courts and how they ruled about wiretapping. It mentions the Church Commission and it goes over, item by item, the Homeland Security Act as well as rendition rules and secret courts.

Item by item, Mr. Lewis starts with the First Amendment and works his way down the long list including the important 'Right to bear arms' section. He talks about Hurricane Katrina and how a number of long-standing civil rights were violated there. He shows the story of the bridge to nowhere when the people escaping the doomed city were shot at when trying to reach safety. There are so many things in this movie that are covered, I would have to watch it several times to catch all of it!

This is an excellent movie to show neighbors, family members and friends. For it is not ideological or strident. With a cool narrator ticking off all the facts and reading us the information, one after another, it is impossible to see any real bias or hysteria. Just the facts, sir! And they are all there, one by one. This is why I think this movie is a good springboard for any discussion about our collapsing democracy. Democrats or Republicans, the vast majority in Congress have not only allowed Bush to create laws out of thin air, they voted repeatedly for eliminating our UNALIENABLE civil rights. This movie spells this out, literally, letter by letter in this case.

I want my rights back. I want my Constitution back. This movie helps explain how we can do this. I is very much, a must-watch.

CLICK HERE TO PURCHASE THIS MOVIE:

A reader of my news service who is also a very enthusiastic supporter sent me an interesting DVD, 'The Creature From Jekyll Island'. This is a lecture by Edward Griffin about the birth and history of the Federal Reserve. I found this online and decided to put it up here for anyone who wishes to listen to it. This is distributed by www.realityzone.com.

A Talk by G. Edward Griffin

Author of The Creature from Jekyll Island

We'll start way back in history to give some kind of historical perspective to this; we'll go back to the first century BC and the tiny kingdom of Phrygia. There was a philosopher by the name of Epictetus and it was Epictetus who said "Appearances are of four kinds: things either are as they appear to be; or they neither are nor appear to be; or they are but do not appear to be; or they are not and yet appear to be." When I read that statement for the first time, I had a big chuckle over it and I thought for sure that if Epictetus were alive today he would probably be a Harvard professor of money and banking; it sounds like so many explanations that I have read about various aspects of the Federal Reserve System. What he did was he took a fairly simple concept but by the time that he was through explaining it, we didn't have any idea what he was talking about. All Epictetus said was that appearances can sometimes be deceiving. That's all he said but by the time he was through explaining the four different ways in which they can be deceiving, we were left back at the switch somewhere.

Nevertheless, I thought, accidentally perhaps, Epictetus had given me a track to run on so-to-speak. Actually it could be the theme since if there's anything in the world that is deceiving it is the Federal Reserve System. In fact, it is one of those appearances of the fourth kind which are those appearances which are not and yet appear to be. I'm going to use that as sort of a hook on the topic. We'll come back to it from time-to-time and punctuate it if I can remember to do that because it tells us something at the most fundamental level about the Federal Reserve System and that is that appearances can be deceiving.

When I did my research on this topic I came to the startling conclusion that the Federal Reserve System does not need to be audited, it needs to be abolished. This is very intriguing to think we should audit the Fed but I discovered that probably if they audited the Fed it would get a clean bill because it's undoubtedly doing exactly what it's supposed to do according to the law. What it is supposed to do according to the law is justification for abolishing it so all we have to do is understand what the Federal Reserve System is supposed to do and we'll be pretty upset about it. The fact of the matter is that most people haven't the foggiest idea of what it is in fact supposed to do.

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Freaky Inflationary Froo-Froos

2/28/2008

Elaine Meinel Supkis

Today is a harmonic number day and the music of the markets is distinctly more like a Schoenberg 12 tone tune. Chaos. We go around the world today to visit a number of markets trying to deal with inflation. We examine how this is impacting gold markets in Asia. And the price of oil and gold continues to climb while the dollar continues to drop against the euro and even the yen. China is continuing to slam the doors shut on everyone's fingers as I fully expected. While Gross of PIMCO thinks we are playing 'Old Maid', he is really playing 'Hot Potato' with fellow investment banks anxious to pass along trashy pieces of paper that are losing value. And Fannie Mae may be the Old Maid but these guys want her to also be the sucker here. To sop up all the stupid mortgages they made during the bubble.

Investors continue to shun market

An analyst at Saigon Securities Incorporation told Thanh Nien Daily that investors “didn’t believe in the market.”
*snip*
Other analysts said the increasing inflation rate and absurdly high deposit rates had caused investors to shun the stock market.

“Many investors have opted to park their money in banks,” a HCMC stock investor said.

“The one-month savings rate has reached 1.1 percent.”

What is so absurd about offering interest rates that are greater than inflation? This should be the rule, not derided as terrible or stupid. Banks are supposed to be the safe harbor. If inflation is 12% then banks must offer 13% on savings, at the very least! Look at the US: we have a system that offers rates well below the rate of inflation. One keeps money in the bank only to pay bills. We have a banking crisis due to this. Savings has collapsed and debts have soared and now, soured. Global inflation has been prowling the planet ever since oil prices began to rise relentlessly due to US oil wars and our terrorist actions against oil pumping nations such as the attempted coup in Venezuela or the attempt to strangle the Iranians.

The US is going to the UN to demand this get worse. Isn't that shocking? Americans should be storming the State Department and string up the people doing this. Better still, going to the Boss, Mr. Cheney, and arresting him for treason. The more we pressure Iran, the higher the price of oil. This logic should be the subject of huge headlines in the US. Yesterday, I had to purchase fuel. I saw nothing but agonized faces at the pumps. Ouch. I was outraged that diesel rose over 20% in one month alone! At this rate we will be paying $200 a barrel for oil at the end of the year.

Fuel is fueling world inflation but the other thing fueling this has been the flood of easy loans put out by banks in Japan, Europe and the US. The G7 has flooded the world with a fabulous amount of money, over 12% a year increase, well over that. So it, in turn, has unleashed a flood of inflation everywhere. As with all periods in history, when the oil rises, inflation shoots up. The G7 discovered this nostrum for higher oil prices back in the 1970s. They now let this happen without a word of remorse. They will try to destroy the wealth of all the commodity nations if this is what it takes to maintain power of the bank.

Only this time around, there are other forces at work! China signaled this first by raising the reserve ratios and interest rates repeatedly right at the same time the cynics running the G7 banking system were turning on the taps and flooding the banking system with ever-lower lending as well as over a trillion in emergency funding. After some hesitation, Australia joined in the tightening process of the Chinese since they are a commodity nation, not a manufacturing nation and need to prevent inflation which would cause their profits from trade to vanish just as it is vanishing in Saudi Arabia. Unlike the 70's, by the way, the Middle Eastern nations now have not only their own banking systems but own a large chunk of the G7 banking system. China has been buying up on this, too. The bankers of the G7 sneer that they are losing money on these deals. But both China and Saudi Arabia know that once they get their claws into our banking system, they can eventually take over. And thus, begin to control how we inflate or deflate our currency or make loans!

They all know they are in a long-term game of nerves. They need to see who will fold first and they have no intention of folding. They can move money from one system to another rather secretively since their governments are very secretive and ruled ruthlessly. It is as if we are playing a banking game with the guys who made the Federal Reserve back in 1907 only this time, instead of being the robber barons of banking back then, these new players are foreign powers who want to rule us.

China Faces `High' Inflation Pressures, Planner Says

China faces ``relatively high'' inflationary pressures, said Han Yongwen, secretary general of the National Development and Reform Commission, the country's top planning agency.

The inflation rate was 7.1 percent last month, the highest in more than 11 years. The first-quarter rate may be 6.9 percent because of rising transportation costs and disrupted food supply, the planning body-affiliated State Information Center said today.

Note how the Chinese admit to food and fuel inflation. Nations that maliciously ignore this important inflation will fall beneath the wheels of history. I remember when our nation mocked Russia and China for their inflated happy-talk 5 Year Plan statistics! We thought they were very stupid to lie about reality. We warned them that pretending things were better than in reality would lead to a collapse. Both dictatorships finally did collapse due to exactly that! And what is the lesson here? HAHAHA. I better warn the Federal Reserve and the Treasury.

Indeed, I wonder if the ghosts of all those dead communist bureaucrats slipped over to the US and took over the souls of our leaders? Certainly, all the happy talk I read in many a government report coupled with the fantastical spewing of statistics from a bunch of lying bastards leads me to suspect they are communist plants! Meanwhile, the hard-nosed accountants of yore that used to be the backbone of America seem to be haunting communist nations. Let's look at another Asian nation:

S Korea posts big current account deficit

South Korea suffered its biggest monthly current account shortfall in almost 11 years in January on higher commodities prices and may have to enlarge its deficit forecast for the whole year, the central bank said on Thursday.

The seasonally adjusted current account deficit widened to a provisional $2.03bn in January, the biggest since a $2.21bn loss in February 1997, from a revised $1.07bn deficit in December 2007, the Bank of Korea data showed.

Japan's fake depression is rapidly turning into a mess and dragging down all of Asia who do heavy trade with Japan. Japan has chased out yet more Korean businesses from Japan and they are busy trying to drive down Chinese trade. While the US flounders and flops. I said in the past that China doesn't really mind Japan doing this. It merely prepares the ground for China to suck in all its neighbors in the future. True, trade with China and Japan has surpassed Japan's trade with the US. But unlike the US, China is very determined to enter Japanese markets. And Japan much prefers the dupe to the East in the US rather than their near neighbors who understand them better and can see through their schemes more. Eventually, China wants direct trade with South Korea. The new train agreement between North and South Korea are part of a package to tie Manchuria into the Koreas and then to Siberia.

China was talked about on NPR last night and I listened while snow plowing. As I have often said, China's leaders would crack down on the 'cheap' exports and would try to move them out of the country in the long run. This is due to it being a waste of China's precious resources. China is a huge nation but doesn't have infinite water, air or energy resources. They want the maximum value-added activity because this brings in the wealth. This is why they want to be the manufacturing center for solar panels, maglev trains, jets, automobiles, etc. Coupled with hard-nosed population control policies, they hope to bring things under control. I also noted in the past, the rulers do NOT want a host of billionaires running amuck, making trouble. So they would squeeze them in the end.

As gold price soars, a Korean custom suffers

Thirty-four years ago, each of the guests at Moon Sang Soo's first birthday party brought the customary baby present: a 24-karat gold ring.

When Moon was accepted to college, his parents had 20 of these rings, each weighing one don (3.75 grams, or an eighth of an ounce), melted down and recast as a miniature crown, which he now proudly displays in his living room.

But in December, at his own son's first birthday party, only half of Moon's 50 or so guests brought a ring. The others presented the baby with cash, slipping it into his parents' sleeves.

Gold prices have climbed due mainly to Asian people being able to buy more of it...up until now. The vast majority of global gold sales are in Asia. And as I keep pointing out, much of this is for magical purposes. Bride prices, baby good luck ceremonies, funerals, etc. These are the main reasons along with jewelry for the ladies who use it as protection money. If a husband is brutal, she can pawn her jewelry and flee. And yes, it is emergency money during wars, riots and revolutions. The fact that we are beginning to hit the top ceiling of Asian ability to buy gold is significant. In the West, gold buying continues. But mainly as an inflationary protection. This is quite simple. In Vietnam, people have stopped buying gold because the banks are sensible. They are giving good interest returns so inflation still hurts people who can't save but those who can are happy. In the US, we see rates being dropped on purpose. There is no profit in saving in banks! So the banking crisis worsens as savings continue to flee to gold, to anything but the banks!

Until the Fed gives up on this attempt at fake interest rates, gold will continue to see a flood of investors seeking returns that protect savings.

Japanese factory output shrinks

Factory production fell 2% last month, that was much more than economists were expecting, and compares with a rise of 1.6% in December.

Concern is rising that Japan's export-dependent economy is being hurt by the slowing US economy.

Last night, the Nikkei resumed it plunge. It floated upwards for a few weeks thanks to the happy news that the US was going to give huge rebates to people so they could buy Japanese products. But the news since then has been increasingly gloomy. For example, the yen continues to be strong against the dollar. They hate this with a passion. The other news is, commodity inflation can't be kept at bay in Japan any longer via the cool tool called 'cutting worker's wages' anymore. According the the Nikkei news, workers from the industries doing this are fleeing their jobs and moving towards or into Tokyo. There is no longer any incentive to work.

Greenspan says US economic growth is at zero; PIMCO's Bill Gross says US needs a "demand-based" fiscal package not a boost to consumption

The former chairman of the US Federal Reserve Alan Greenspan, has warned that US economic growth has stalled and a quick recovery is not likely. Meanwhile, Bill Gross, manager of the world's biggest bond fund PIMCO, says that until recently, US and therefore global demand has been driven by the ability to lower interest rates and extend credit to an increasing majority of Americans. Gross says that because demand in the form of consumption has been artificially and fictitiously stimulated in recent years by financial engineering run amuck, there is a legitimate question as to whether its black hole imploding destructiveness can be totally countered with another dose of lower yields and deficit spending packages.

"As of right now US economic growth is at zero," Greenspan said on Monday, at an investment conference in Jeddah, Saudi Arabia's Red Sea commercial capital. "We are at stall speed."

The US Federal Reserve said last week that 2008 growth will be between 1.3% and 2%.

Dead in the waters. The red ink Red Sea. Greenspan created this. Now he goes to the people seeking to buy us out to tell us that we are PWNED. That's all, folks! Gross of PIMCO made a lot of money from the several bubbles created by Greenspan. Now he, too, tells us we are PWNED. We can all go to the PWNED shop with the three balls of the Medici on the outside and turn over whatever valuables we have left. Isn't this sweet? I remember these guys back in the old days of 2005. While I was yelling about the super-low below the rate of inflation interest rates and the fake inflation statistics that leave out all essentials, they were telling me that I was stupid to worry about all that stuff.

Here is a comment I made in February, 2005, at Angry Bear right before starting my own blog:

Why did we have "inflation"? Depending on the ideology and class biases of various economists, there is no real consensus of what is inflation and what causes it.

This is deliberate. They don't want to know what causes it because this means making life/political choices no one really wants to make.

American inflation: this is the result of wanting to have your cake and eat it too and pretend it isn't bad for the waistline. It is what happens to a currency when you want a free lunch.

We saw virtually no inflation during the Clinton Golden Years only because Russia suddenly joined world oil markets causing the price of oil to collapse. Then China joined world labor markets causing the price of labor to collapse.

Inflation is back because both Russia and China have now readjusted world price expectations and are now reaping the benefits of higher prices. So now, we have inflation without the nice side of inflation, our own wages going up. Instead, they are stagnating with means, in real buying terms, depression.
Elaine Supkis | 02.27.05 - 8:04 am | #

Germany is in the same bag as the ole USA and I will note that Germany and France are struggling to get out of the energy noose that will strangle their economies. If they succeed, they will be much stronger than us. We are pretending we can tax cut/run huge public debts out of our economic coming stranglehold. This is beyond dumb.

I wrote this 9 months before the housing bubble began to leak air. This was back when oil was still under $60 a barrel and gold was barely coming to life again. But the forces we see today were at work back then. A good system depends on people who can see reality before it hits them on the snoot. Being able to respond to possible future events is the highest skills required by guardians of any state. This is why our government should be scouring the postings of all people online who make predictions and analyze things. Those whose past postings are correct should be hired to run things. The ones in the public as well as private who miscall events or misunderstand the deeper forces should be fired. This means firing most of the guys running the top positions in the Federal Reserve, firing the head of the Treasury and of course, our top rulers in the White House.

Seeing all this mess as it developed was easy as falling off a log, of course. And the reason the guys who created this mess couldn't see it was because they did not want to see it. They and their buddies made money irresponsibly by ignoring reality and now, as reality bites our heads off, we have to play this game of 'who could have guessed?' Which is stupid, of course, since Google search lets us know that there were people who did guess back then.

Americans Plan to Save, Not Spend, Tax-Rebate Checks, Poll Says

The stimulus plan Congress approved this month may provide less of a jolt to the U.S. economy than intended, as most Americans plan to save rather than spend their tax rebates, a Bloomberg/Los Angeles Times survey shows.

Only 18 percent of respondents said they will spend their rebate on purchases, while slightly more than three in 10 said they prefer to use the money to pay off debt, and a third said they'll pocket it.

Maybe we can all put our rebate checks in a bank in China or Vietnam! Earn real interest. I know that a number of people want to pay down their debts for the simple reason, credit card debt isn't cheap. It is expensive as hell. And so people are frightened because the credit card companies are being hammered by late payments and defaults so they are raising rates and punishing penalties which increases the rate of non-payment. Far from easing, credit in the consumer class is shrinking rapidly. And the consumers are scared enough to make this worse by trying to undo it all. The system depends on more and more credit leading to more and more spending. Buying gold doesn't expand commerce, it kills commerce since it isn't part of a value-added system like manufacturing is, for example. But it is a good hedge against reckless inflation caused by government misallocation of money or wars. And we are at war! And like in all wars, gold's utility rises while war spending rages. And spending on the Iraq war has risen every year. The Pentagon's budget rises, too. And rose 7% this year so inflation will be at least 7% and since this is for wars where there is oil, this means oil will continue to rise in price, too. A vicious circle. Back when the US was joyful about 'winning' the Iraq war, I heard so many people say, 'NOW oil will be cheap again!' And it was at $50 a barrel back then. Now, it is over $100 and rising relentlessly.

Freddie Mac Posts Record Loss, Remains `Cautious'

Freddie Mac, the second-largest mortgage-finance company, posted a record $2.45 billion loss for the fourth quarter as rising defaults sent credit costs soaring.

The net loss, which amounted to $3.97 a share, widened from $401 million, or 73 cents, a year earlier, the McLean, Virginia- based company said in a statement today. Freddie Mac, which buys and guarantees home loans, had predicted the results would be similar to the third-quarter's $2 billion loss.

Government-chartered Freddie Mac and Fannie Mae, which account for 45 percent of the $11.5 trillion home loan market, are posting their biggest-ever losses as foreclosures and tumbling home prices increase costs. Freddie Mac Chief Executive Officer Richard Syron said today the company remains ``extremely cautious'' for 2008.

Both Congress, the President and the banks are all pushing to have Fanie Mac and Fannie Mae take not just 45% of the housing market risks but 100% of this! They want a COMMUNIST SYSTEM. Due to lack of savings, lack of paying realistic interest rates, these guys are now pushing to have the government eat ALL the losses if loans fail! See? Insanity! This way, banks can merrily issue loans of any sort and then PASS IT ON. To the taxpayer. Note how the losses here are shooting up! The intention is to have all losses end on the government side of the ledger. Remember the GOP push for 'privatization'?????

HAHAHA. It was a con job, of course. As I noted years ago! The ONE THING the government should NOT BE DOING is this! Why should our government be our bankers? Eh? And if they are, they should charge realistic interest rates! And who sets that? The Federal Reserve which is neither Federal nor a reserve! These private banks get to screw the Federal Government whenever they want! And the banks? They want to earn FEES on writing loans and then pass them off! Onto the tax payers! They will write loans to infinity if they don't have to worry about them going bad. And the collapse of the US economic system continues and speeds up.

I say, eliminate the Fannie packs and sent them to the banks. If the banks can't eat them, then we should declare a bank emergency and arrest all the bankers. Put them on trial concerning how they came up with the 0% down/super low 2% mortgages. Then arrest the politicians who egged this on. And they did. Bush even praised banks for doing this! This was a crime. No sane saver would trust a bank with their money while bankers were doing this stupid thing. As I point out again and again, we NEED compound interest and the method for paying for houses in ancient times like when I bought my first house years ago with 20% down, are good rules and work. I paid off all my mortgages before reaching 50 years! This is not impossible! My children are doing this right now. And they paid more than 20% down on their homes!

They won't bankrupt America. But the people who thought handing out funny free money would not cause inflation as well as banking collapses: they knew better. They wanted those damn fees.

Multi-billionaire Gross of PIMCO: [And] if Washington gets off its high “moral hazard” horse and moves to support housing prices, investors will return in a rush.

But let there be no mistake: this description of Old Maids and PIMCO’s Investment Committee’s attempt to avoid holding one is serious business and the game playing does involve some of the same skills that little kids learned by playing cards generations ago. Pretend that you don’t hold the Maid? Banks have been playing that game for nearly 12 months now and only recently have entered the confessional to expose some of their sins. Are the monolines showing any of their cards? No – just ask MBIA’s CEO – they’re doing just fine thank you. “But by the way,” he’ll say, “take a card, one of these good ones on the end or maybe the one in the middle with the exposed edge.” Bank loans for sale by Wall Street at distressed prices? Nah, those Harrahs and Clear Channel loans are money good – “as a matter of fact all of the $150 billion or so we have in inventory are great assets” the banks will say. We’ll just hold on to these maids – unless you pay 95 cents on the dollar that is. Don’t wanna take a loss you know.

And so the game goes on and on. Its most recent twist involves an asset class known as Auction Rate Preferred Stock and the astounding revelation that its holders didn’t even know they were playing cards to begin with. Holders of ARPS – mostly wealthy investors, but also the likes of Bristol-Meyers and other visible corporations – thought they were holding AAA assets with money market liquidity. In this case, most of the assets probably are AAA, but the liquidity has suddenly evaporated, transforming them from a 30-day to potentially a 30-year asset. The assets on these Maids it appears are real but they have come with a marriage license. Whoops! Another Old Maid in masquerade.

Speak of the devil himself. First, note how he mocks the banks for wanting 95¢ on the dollar for crummy loans that should have never been made. He won't pay more than 85¢ on the dollar. The losses these represent is way the wailing-baby jerks who penned these loans want Fannie Mae to take on 100% of the loan holding risks. The Big Guys like Gross want short term stuff so they can flip or unload if inflation eats it. NONE of these clowns want to hold these things for 30 years. Well, the American people don't want to pay off, either. Note how as soon as the value of the house began to really climb, many were enticed into going deeper into debt? Thus, the need for everyone to pass the buck here. And the buck is losing value during all this. Massively. Now, they are all in a panic to pass it faster. People owing money love to pay with cheaper dollars but NOT if they have to spend every penny on food and fuel. This is why ALL PARTIES are getting 'poorer' in this mad cycle. This is a very destructive deflationary spiral despite the appearance of inflation as I noted back in early 2005.

Gross:

Slow credit growth is a harbinger, however, for slow economic growth (if any) and that in turn leads to the necessity for low short-term interest rates for an extended period of time. I think Ben Bernanke knows that restarting the U.S. growth engine almost by definition requires nominal GDP growth of 5%. He’d prefer that nominal rate be composed of 3% real and 2% inflation, but desperate times sometimes require compromise: 2% real and 3% inflation may be the best he can hope for in 2009 as soaring commodity prices and a declining dollar add to the equation’s complexity. If so, a bond investor should expect a prolonged, several year period of low short-term rates (Fed Funds averaging 2½%) with vulnerability on the intermediate and long-term portions of the U.S. curve due to inflationary fears and the diminishing support of foreign central banks and SWFs. If, as a bond investor, I expected 3% inflation (2% in 2008 – higher in the out years), a 3% 5-year Treasury would not seem very appealing. Nor, I should add, would a 3.80% 10-year or a 4.65% 30-year bond.

He is a bond trader. What did these guys do the other day? Oh! They charged the munis selling muni bonds 20% interest! OUCH. And of course, the Fed rate will at at 2.5% forever. I thought this would be the magic number while snow plowing yesterday. And talk about a goofy idea. To keep Fannie Mae afloat with inflated tits, they are going to ignore inflation just like Japan is ignoring inflation. So what if worker's wages aren't dropping? They will continue to ignore true inflation statistics and true banking values. They will ignore all the dirty details while focusing on one thing and one thing only: lending money, collecting fees and dumping all this on top of the US taxpayer who owes not only nearly $10 trillion in US government spending but many more trillions in individual debts! And all of this will be paid for by these same people who have no savings? Are we nuts? This is like the banks funding their monoline insurers who are supposed to be protecting the banks from their own bad loans!

Can't Anyone Here Deal with Derivatives?

Merrill Lynch overstated cash flows received from derivatives-financing transactions.

I continue to try to figure out the Derivative Beast. No one can see it. We can see its footprints in the snow. They are the size of whole cities. Stomp, stomp, stomp, the Beast trudges across the earth, smashing everything under its paws. Or hooves. No one has any clear idea how this creature looks. I would suggest it has seven heads and the Whore rides on its back.

By the way, I may be on the radio soon. Will let everyone know when and where.

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Diesel Fuel Here Hits $4.15 A Gallon

February 27, 2008

Elaine Meinel Supkis

I had to put diesel in my plow truck today after plowing out people from the latest of many ice storms. I nearly fainted when I saw the price: $4.15 a gallon. Just last week, it was $3.56 a gallon! WOW. Then I went grocery shopping. WOW. OK, fellow Americans: we will see serious trouble soon. Everywhere I went, I met very angry people and they should be angry. Time to wake up from the dream of world conquest! Our money is dying. The dollar fell hugely against the euro today, more than 10¢ this month alone! Insanity. And then Herr Greenspendthrift goes off to the Middle East to echo what Iran Kitty has been saying all this last three months: dump the dollar! Well, we shall have fun over here. Time to hitch Sparky, my horse, to the truck and use him to plow. Also, I figured out the need for Bernanke to drop rates to 2.5%: this is the 'teaser rate' all those billions in Sub-prime mortgages rake in! So there will be no 'reset'! Cheap mortgages will save us! After the dollar dies.

Greenspan gives green light to depeg

His remarks about clarity arose from his habit, while in office, of making delphic comments that had the power to move markets and transform economic policy in the space of a few words. The famous 1996 remark about “irrational exuberance” was the best example of such a remark – it set the tone for US monetary policy for the next few years, until the American market got carried away in the
dotcom boom.

His opinions on the dollar peg with GCC countries seemed clear enough. In Abu Dhabi he said: “Depegging is probably the most useful thing that can be done to stop the increasing influence of foreign assets on the monetary system and therefore the monetary base, which is basically the major force in inflationary pressures.”

He seemed to reinforce this message in another speech in Jeddah: “In the short term free-floating [of the Gulf dollar-pegged currencies] will not fully dissipate inflationary pressures, although it would significantly do so.”

This snipped was published in the Emirates Business News. At the last two meetings of the oil pumping nations in the Middle East, Iran teased the others about their peg-leg relationship with the dying US dollar. Now Greenspan is echoing this? HAHAHA. Life is full of irony or maybe it is just flatulence? Greenspendthrift gets paid huge dollars or rather lots of Weimar dollars to talk and talk and talk. This man is a hoot since he feels that now he should tell the truth: he shafted everyone in the US and has utterly destroyed us and now he is going to sell us down the river so he can get rich in his dotage? Arrest this man! If the most powerful banker in America turns out to be a traitor, arresting him and making an example is very important. I feel that many people who loved guys like him back when it looked like we could make magic money forever should reconsider this. Reagan betrayed America and so did Greenspan. Both men as well as Bush Sr and Clinton, everyone but Carter has, upon leaving the White House or the Federal Reserve, runs off to the rest of the world to collect their pay from their true masters: the New World Order wants to own our Presidents. As well as Greenspan and his cronies. They all cock an eye, while in office, on these future pay-outs. And they collect. Reagan hardly waited a month to rush to Japan to get his millions, for example.

This form of treason has been going on so outrageously, the Chinese have used this to their advantage not to mention the oil sheikhs and kings. As well as other people who have interests in ruling us. All have been pulling the strings via virtually undisguised bribes. This is true of England, too. As well as most elected rulers of the 'democracies' in Europe and South America. Well, thanks to all these WONDERFUL people, the dollar is dying. The US is losing its industries. We are deeper and deeper into debt. We are seeing inflation in all the most dangerous parts of our economy and virtually none of this makes so much as a peep in this awful election cycle which focuses on hair cuts, photos of turbans, accusations of peeking up skirts or plagerizing platitudes: damn.

But then, every time Kucinich or Ron Paul did try to talk about the important things, the media shut them out. Or talked about stupid things about either man. This is democracy. Welcome to hell.

Oil Rises Above $100 to Record Close After the Dollar Declines

Crude oil rose above $100 a barrel to a record close in New York as the U.S. dollar fell to an all-time low against the euro, prompting some traders to invest in commodities as a hedge against inflation.

Reports today showed that U.S. home prices tumbled, consumer confidence weakened and producer prices rose last month. Hedge- fund managers and other large speculators increased net-long positions, or bets on higher oil prices, in the week ended Feb. 19, a Commodity Futures Trading Commission report showed.

``The continuing upward pressures from the weakening dollar, geopolitics, and the use of energy as an inflation haven continues apace,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York. ``There is an inflation wave ripping through commodities of all stripes.''

A Texan diesel refinery blew up and now my pocketbook is being picked due to price gouging. Thanks a lot, everyone at the top. The $5 gold coin that sells for $150 is sitting on my desk as an icon, a goddess, a plea for salvation. And it buys only slightly more than filling the double tanks on my Ford 350. And snow plowing ice eats energy like crazy. Even as gold struggles to get ahead of inflation, the oil guys, the guys paying Greenspendthrift, the people supporting the Iraq war, Bernanke and all of these jerks---they kill the dollar so fast, even gold won't be able to keep up at this rate. Everyone is now figuring out the obvious: the only way to save the collapsing housing bubble is to drop rates below the 'teaser' rates that are resetting. Then everyone can pretend all is well because no one will be kicked out of their grossly-overpriced mansions.

But this will cause ever more inflation. Bernanke assured everyone last Thanksgiving, the plans to save everything would not weaken the dollar. Since then, the dollar has gone from being sick to the verge of death. Will Bernanke continue? Will he hesitate due to tremendous inflationary forces being released by this action? Will the banks sit idle during this? They expect global wealth to pour in while offering insane interest rates? Are the Japanese savers putting their money into the Bank of Japan?

Hell, not even here, are people saving money! It makes no sense. The thing being saved is the huge derivative Beast that overshadows all the wealth in the world. This is shuddering and collapsing inwards, sucking down trillions in paper wealth. But the horror is, dropping interest rates won't save anyone. It actually makes things worse. For the dollar is losing value, too. If all these things end up being reset at zero, the economic system ceases. This is why Greenspan is warning everyone to cut their losses and flee.

Producer Prices in U.S. Increase More Than Forecast

Prices paid to U.S. producers rose more than twice as much as forecast in January, pushed up by higher fuel, food and drug costs, signaling inflation may keep accelerating even as growth slows.

The 1 percent increase followed a 0.3 percent drop in December, the Labor Department said in Washington. The median forecast in a Bloomberg News survey of economists was for a 0.4 percent gain. Excluding food and energy, so-called core wholesale prices climbed 0.4 percent, the most in almost a year.

Combined with figures showing consumer prices also rose more than forecast, today's report may prompt the Federal Reserve to consider raising interest rates as soon as the economy stabilizes. Fed officials, including Governor Frederic Mishkin yesterday, have warned that higher prices may stoke inflation expectations.

MAY stoke inflation? What the hell has been going on all this time? Was I hallucinating this last 35 years? I reached adulthood only to be greeted by on sickening inflationary episode or massive dollar devaluation after another. Every 8 years, it seems. This so annoyed me that I decided to zero out my debts back in 1990. And succeeded finally a few years ago! This doesn't mean I avoid the downside of inflation. Even if people park money in 'safe' havens, they still are hammered by inflation on a daily basis. It is just that any savings they can eke out can be saved and not lost, too. When Bernanke took over the Fed, I went ballistic. Indeed, there were a number of us on the internet who did this back then. But NOT MANY.

Here is an article I wrote soon after Bernanke took over the Federal Reserve:

I warned everyone that Bernanke is an idiot. He celebrates the destruction of our manufacturing base, claiming that shipping jobs to China to scrub inflation due to energy hikes creates jobs here in America. Alas, the jobs created are also not "inflationary" since no one can ask for or get pay raises! Great. Sounds like a depression.

'Ben Bernanke, in his first public speech as Federal Reserve chairman, laid out a scholarly case Friday that keeping inflation low and stable tends to foster economic growth and jobs.

This sensibility — now largely a consensus view — marked an evolution in economic thinking, Bernanke said in remarks at Princeton University in New Jersey. '
*snip*
Well, I predicted from my very first article about Bernanke that he would be both insane as well as ill-informed. He is going to finish us off. We are so very doomed thanks to this idiot.

"Central bankers, economists and other knowledgeable observers around the world agree that price stability contributes importantly to the economy's growth and employment prospects," he said. "But that view did not always command the support it does today."

Well, he better consult with me! Or read this story of mine!

Price stability exists? What the farking hell? I see none, none at all!

I wanted to get more past stories from Blogger but as usual, it is crashed. So I dragged that story out. It certainly nails everything on the head as well as rear end! What can we say? I knew more of what was going to happen than Bernanke! Why doesn't the Fed and everyone bang down my door, asking me to help?

Yes, the mountain here is very icy and you need a truck with chains on the tires to make it up the hill. But then, in all stories about wisdom, one has to climb a mountain, anyway. Or maybe it is my crazy cackle, the 'Hahaha' stuff? Well, I try to be funny. What else can we do?

The fact is, I have said since day one, inflation in fuel and food are THE most important things to track. France didn't fall into riots and revolution because the price of laces rose! Indeed, the price of laces FELL. What rose were the prices for food and fuel! Always, always and even more often, all riots and revolutions happen when food and fuel suddenly spurt in price. This should be hammered into the heads of these idiots running things. Far from minimizing it or even outright, ignoring this, they should be focused on this like a laser.

People can double up in houses and so the loss of a home isn't so hideous. But we all have to eat! And not freeze to death! So the loss of food and fuel bites directly. It is, in other words, literally life and death. Already, food riots are spreading across the third and some second world nations. Today, Congress passed a bill increasing....BIOFUELS! This is fueling food inflation. Yes, farmers will be happy with higher prices but they all buy what I bought today: diesel fuel! And if it rises twice as fast as the value of their harvests, guess what?

They don't make a profit. If the price of corn shoots upwards faster than diesel prices, then we have food riots. The farmers in the US represent a small minority. The teeming masses in the cities on the other hand, are far, far greater in number. I have been in cities that were burning down in the past. It is not a pretty thing. Indeed, it is teeth-grindingly horrible. The only store in my community that survived was the one where the owner ran out with a rifle and shot a rioter dead. It was, needless to say, a liquor store. The paint store in another neighborhood survived only because the owner had four huge sons armed with pistols who shot into the air and said, they would kill anyone who came within ten yards.

All the others went up in smoke. I picked through the ruins. We had no police, no fire department. The mayor refused to call the National Guard. I had to hike to City Hall in Manhattan to demand the military support! The social disorders continued for months afterwards. This is why I prize some sense of balance. We cannot let things slide off of cliffs here. And ignoring or mocking people talking about inflation in essentials is provoc