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Gold down today on negative Euro data that drove down EUR/USD.

I bought more gold, knowing full well that this will reverse once the traders close out EUR/USD long.



You were right about the Peoples' Bank of China re: Fannie Mae and Freddie Mac. The WSJ (once esteemed but now a Murdoch rag) has reported that the Chinese read Paulson the riot act!



Remember Twilight Zone ?

The aliens came and said they were only
here to "serve man". Everybody believed them
and fell all over themselves rushing out and getting in line in order to ride their
UFO back to their home planet.

Finally someone pointed out that their
book, "To Serve Man" was a cookbook

Ha ! Cooked books lead to cooked people
in more ways than one.

Christian W

Well when people have been simmering for long enough they start to get nasty.


Dear Elaine,
I fear for my family, my country, and my future. This is all so sick and evil. NY governor makes emergency speech on fiscal crisis, and its not front page NYT??? WTF???
I cannot beleieve this insanity. The financial propoganda, and dumbing down of America is culiminating. Their will be violent revolution when the masses realize the viscous agenda against them. Your voice of reason and sanity must be heard. Get on the Jeff Rense show, or Alex Jones, or patriot news hour PLEASE!!! America needs your help. Your writing and knowledge is a powerful force. I hope that all your writings are archived somewhere, so when the shit finally hits the fan and solutions are needed, your writings can be viewed by our new govt. as a chronicle of predictions and solutions. Thank you for everything you do.

Elaine Meinel Supkis

Yes, Ralph, I was plainly shocked. All sorts of goofy things were on the front page. The Governor of NY saying we are going bankrupt was in Metro section where they talk about street parties, City Hall gossip, etc.

Amazing. Just stunningly amazing.

Elaine Meinel Supkis

G, I remember that Twilight Zone story. Heh. Then there is the one of the NASA brat with blonde hair riding her little red trike at the China Lake Naval base for secret rocket testing....and she nearly gets run over by a truck.

My father, back when we saw this said, 'Hey, you were the only one doing that on the base back then.' I was still a kid. 'Would you time travel in order to save me?' I asked.

He said, 'No. There are more interesting things to do.' And so I learned an important survival law: no one is going to save us except cannibals hoping for dinner so you better watch out and be ready to fight or take flight! Twilight Zone, to me, is required TV. It was the very best and some of the writers were black listed by Ronnie Reagan's gang in Hollywood. Thus, the dark side of the stories. Which is why they are classic.


Did you see the petroglyphs in that canyon
on the China Lk Base ?

I heard that they are the best there are,
as no peckerwoods ever shot at them or
tried chiseling them off.


Sitting here in our depreciating and dilapidating Big Brother McMansions, why don't we all agree to refuse to continue paying our mortgages.
Yea, right on.
Enmasse we should all demand a moratorium on debt. In the past, we have all eagerly agreed to play the credit/debt game - so now we can just all quit the game at the same time together (that's the important part comrades) The opportunity is knocking on our doors. Let's demand new rules to the financial game.
Rule one - all old mortgage and credit card debt is forgiven. This is justified because of unfair rules of the present system. (You will still have to pay your father-in-law the $100 he loaned you)
Rule two - The tax system will not promote debt in the future.
Rule three - The country will abolish the FED and issue it's own currency.
Rule four - Campaigning Representatives will not receive any donations or gifts of more than one hundred dollars.
Rule five - You make up this one.....




shorter NYTimes...

Everybody calm down, it's only state budget that is crashing. We'll have gangland war and collapsing inner city after budget crisis hit bottom.

What's the big deal? We all been there before.
City service closed in 5 minutes people. Offices will be open only Monday tuesday and Wednesday. Watch for flying bullets. And have a nice day.

thank you.

PS. don't forget the urine smell for effect.


I had an interesting conversation today with an attorney from California - specializing in real estate and mortgage related litigation. He mentioned that in the latest bail-out legislation, they made it easier for people to walk away from their "upside down" mortgages.

His contention was that the current laws will invite many new defaults as mortgages reset and real estate drops in value. I mentioned the moral hazard of having private citizens bailing out commercial entities and that this will lead to a new "murky" morality.

For example, in the past it was seen as a failure if one were to default on a mortgage and they would get little sympathy (unless health issues or unemployment caused the default). Now, given the fact that we have such a predatory financial system, my opinion is moving to one of "do what is best for you and your family and forget the old morality."

Like me, I think many people are re-evaluating the basic black and white morality standards that have guided our society. I think we are seeing the first steps in the decline of civilization in the US.


I just don't get the calls to "Arrest Them". It just does not seem realistic to me, that there's any probability the likes of Bush, Bernanke, Greenspan, will ever be arrested.

They will not be arrested, this is a olicharchistic, plutocratic dictatorship now, and 90% of Americans are complacent and stupid, not to mention being defeated by cheap immigrants that want our jobs. The immigrants are willing to be slaves.

Exactly who is going to " Arrest them", when they are insiders. They couldn't even get Libby.


The Federal Reserve Bank is a private bank. It is NOT a U.S Bank. The stockholders in this private bank are foreign central bankers, or Cabalists.

Bernanke works for these Cabalists. He does not work for Americans, or even give a damn about hungry Americans.

Bernanke has one job -- making money for this private bank. He makes this money by piling on debt and collecting interest, and thereby gouging U.S. taxpayers.

Why should our government pay interest to a Cabal of private bankers on monies it borrows for itself?

WE could stop this crooked process tomorrow by closing the private bank (FED) and taking back control of our money supply, just as President Lincoln did to finance the Civil War.

Just think, we are needlessly paying $Billions in interest to these Cabalists every day and of what we could do with this money. Hell, we could eliminate the deficit entirely in a year or so.

The Cabalists are deliberately ruining our free enterprise system. They plan wealth for the very few at the top and socialism for everybody else.

So stay focused. Lock'n Load.

Elaine Meinel Supkis

If we all walk away from debt, this means we will all be relegated to third world status.

'Good as my word' becomes, 'No mas.' In turn, we find out we can't get any loans from each other, forget getting them from the Chinese or Japanese. We might walk away from mortgages but they can walk away from us.

Lincoln financing the Civil War: fiscal ruin for the US. Lucky for us, we got the Alaskan gold rush to bail us out as well as stealing the last of the Indian lands.

Remember: 50% of America was held by the natives back then! The 'cowboy and Indian wars' we saw in all those movies was post-Civil War. Looting the natives of vast natural wealth was how we paid for the Civil War. Period.


Drkrbyluv - I believe you have gone to the very heart of the matter.

What is the "morally correct" thing for an individual (or an entire society) to do when it has been so narcissistic, pleasure-seeking, and greedy that it has brought itself to the edge of complete self-destruction?

The behavior that got us to this point (where we will have to either inflate our currency to near-zero value or default on unsustainable debt at every level including U.S. Treasuries) has been based on no ethic other than "gimme more." We stopped being Pioneer Nation, Yeoman Farmer Nation, Factory Nation, and chose to become Finance Nation.

Like Alice, we picked up the bottle of endless credit that says DRINK ME, and we didn't stop chugging until it was empty. Then we looked around for another bottle.

Elaine, and all other rational people, are astounded and angry that we want to try to wiggle out of our self-destructive fate by CREATING MORE AND MORE CREDIT! How stupid can we get? But, all previous morality (saving, honest accounting, self-restraint in borrowing and consuming) has been cast aside. We don't accept equilibrium any more, we demand endlessly accelerating growth.

We have adopted and glorified the Friedman/Reagan "every man for himself, being rich proves your superior virtue" morality. We are Finance Nation, and we shall rescue ourselves (from all problems)by borrowing! and borrowing! and borrowing!

I'm afraid it's going to take a whole new generation to come along that (while still young) has to live through the consequences of all this so they can learn to reject the morality of their parents and grandparents, we the Finance Generation, before they will be able to meaningfully approach questions about ethical behavior regarding borrowing and lending.

Royal Dutch Paper

What we could use here is a vote of no confidence from our stupid reps and senators and print our own money like Lincoln wanted to do to put an end to this bullshit.

Paul S

Right. It will take a whole new generation. A generation whose brains have not been turned to mush through Political Correctness, XBox and MTV videos. We live in a society now that says it is OK to screw the other guy IF you get away with it. We need a generation that is smart enough NOT to shop at Wal Mart. We need a generation that will keep a watchful eye on their politicians, local and Federal.


President Lincoln paid for the Civil War by printing greenbacks and issuing bonds from the U.S. Treasury.

The Cabalist central bankers wanted Lincoln to lose the Civil War and thereby split the country. That's why England sent thousands of troops to Canada, and France sent thousands of troops to Mexico, in hopes of pressuring the North to give up the fight.

Fortunately, the Russian Czar rallied to President Lincoln's support. The Czars knew all about the evils of Cabalist central bankers. They had kept them out of Russia and didn't want them setting up shop in the U.S.

The Czar also told England and France that should they jump into the war on the side of the Confederacy, that he (Czar) would fight them in support of President Lincoln. The Czar even sent the Russian fleet to San Francisco and New York harbors to make the point.

When some thief steals from me, how does that make me financially responsible for greater loss? How can I default on that debt?

We will never get our money back from the Cabalist central bankers. We are insane to trust these proven crooks with another dime.

Our government can function as its own FED, and control our own money supply. We can feed money into the financial system as needed, without disastrous business cycles, and without paying a dime in interest.

Come on folks, this is a no brainer.


Russia is cashing out. This is going to hurt. There goes $50B.


MOSCOW - Russia has cut its exposure to U.S. mortgage lenders Fannie Mae and Freddie Mac to less than $50 billion by not refinancing matured short-term debt, a senior central bank official told Reuters on Monday.

Russia held about $100 billion in U.S. agencies Freddie, Fannie and Federal Home Loan Banks at the start of 2008, as part of its now near-$600 billion reserves, although over 80 percent of the holdings were due to mature within the year. "It's now less than $50 billion," central bank first deputy chairman Alexei Ulyukayev said.

"We had short-term paper. They mature: you can refinance and buy some more, or you can not," he told journalists later, when asked about why the central bank had reduced its holdings. Ulyukaev did not comment on Russia's holding in the U.S. Federal Home Loan Bank System (FHLB).


PLovering, Hitler rebuilt the Reich using the same formula. He jettisoned the banking interests who of course came after him with a vengeance. The rest is history. Read about it here: http://tinyurl.com/5hajv8

Anthony, Russia doesn't owe America anything, in fact it is the other way around, the USSR was plundered by the West with the help of American bankers all throughout Yeltsin's term which only accelerated the bankrupting and final dismembering of the the USSR, read this: http://tinyurl.com/55h8h6

Food for thought: Following the USSR model may not be such a bad way out. Visualize enlightened people of the Blue States living in harmony with the rest of humanity. Russia is in ten short years a wonder to look at, practically debt free and using sound economic policies, run by an ex-Communist intelligence chief.

As for the Red States, well, they could take a few tips from the States of Tajikistan, Kyrgystan, Uzbekistan, etc. and will probably be run by the son of an ex-CIA chief who has already served two terms in office.



Most of the debt is in private hands, as in money borrowed to build shopping centres and buy toll roads. Somebody could lose their shirts, it won't be the first time. Yes, we are in the middle of credit crunch.

We will do pain since we have not have a trade surplus since we started to do away with tariffs 30 years ago.

Our strengths, only 20.5 million people. Our federal government has run a surplus since since 2002.

Our biggest unknown, at what point will we notice a slow down in China affecting us?

I repeat that we will do pain and the sensible among us preparing for that.


re: Soros

Rumor: Soros going to seriously short FTSE


Looks like bloodletting is about to begin!

Elaine Meinel Supkis

At the time of the Civil War, Russia and England had just had the Crimean War. So Russia had some very large bones to pick with England.

This reminds me of an important history lesson: alliances are always very flexible. Russia was at war with England but a mere two generations later, was an ally of England and fought not one but two major world wars on England's side! The US has tried to freeze all alliances in place since 1945 and this is a total disaster for us.


Elaine you relate the news of ongoing TAF assistance. That was one of the reasons for the day's stock market rally: traders went long the bank stocks which gapped upon 4% higher but fell to a 2% gain for the day as oil rose 4%; this made for a 10% gain on the bank, KBE, stocks over two days; so they are now residing where they were on Thursday the 24, 2008.

We have likely reached "Peak Dollar" as the US Dollar traded basically unchanged at 73.33 as oil rose and stocks topped out as the EUR/JPY, a barometer of the yen carry trade, turned lower on falling global currencies.

The world currencies are now falling lower as 'Peak Currencies' occurred on July 25, 2008: most currencies sold off significantly.

DBV, the world currency ETF, manifested a bearish engulfing, hanging man candlestick to fall through both 50 day moving average, and 200 day moving average; the latter crossing over the former today is a bear cross, and the 'nail in the coffin' for currency wealth: no currency can now maintain wealth -- all are falling lower in a death spiral lower together with the US dollar leading the way down.

FXE, The Euro fell, it is now a 'failed currency'.

FXY, The yen rose, but may not continue to do so; it could continue to fall lower with other currencies in their new found downward direction. In this scenario, the Euro would fall faster than the yen.

FXA, The Australian dollar fell drastically -- to the former mid-June level in response to the National Australia Bank announcement that it is writing off 55% of its home loan portfolio value to reflect current real estate reality. ActionForex shows the unraveling of interest rate differential investing in their chart of the Aussie in AUD/USD Daily Outlook; the Australian Dollar had just made a 25 year high.

FXS, Swiss Krona rose from a sharp sell off yesterday.

EUR/JPY, FXE:FXY, fell lower from the prior day's bearish engulfing candlestick; thus an unwinding of the yen carry trade has commenced on the world currencies falling lower.

With the rise again in the price of oil, 'Peak Dollar' has definitely been attained.

USD/JPY closed down at 107.98.

Gold gapped lower on opening as the currencies sold off; it recovered some on oil's rise; gold will become the sole means of preserving wealth.

Gold today fell through a consolidation pennant; but its price today at 89.50 is above a previous pennant price of 87 on June 23, when yen carry traders sold stock to invest in gold: thus gold is still technically in break out since July 23.

The chart of gold relative to US stocks, GLD:VTI, shows that an investment demand for gold, that began in late 2007 is still strong and underway; the investment demand for gold will grow stronger as investors sell stocks, bonds, and currencies to invest in gold to preserve wealth, in a world environment where inflation of basic goods is rising, stocks and bonds deflating, and world conflict is increasing.

Gold, $GOLD, closed at $906, clearly still in breakout since July 23, 2008.

The neoliberal Milton Friedman principle of floating currencies has met its Waterloo demise, with gold rising as the defacto international currency. As you might say Libra has arisen to take vengance. Disinvestment from stocks world wide will really get underway as risk aversion rises due to inflation, expectations of decreased corporate earnings, and level two assets and level three assets at banks and investment bankers.

Investors will be buying yen to repay their 0.5% interest loans.

Gold and gold alone will emerge as the sole means of garnering and manintaining wealth. Oil's volatility means it cannot be a reliable source of long term investment for the common investor.


Eleaine wrote: "These open windows will now stay open until January 30, 2009 which is six months from now. And you can bet, this won't be the final deadline."

Correct. Because, as you've pointed out, they aren't fixing it. They are perpetrating the system. But perhaps it will end one of two ways. Bernake runs out of tricks as the tsunami finally overwhelms the pirate islands. Or China starts playing it's strong hand to begin dictating terms on economic policy. It is interesting to see IOC accepting terms on censorship during the Olympics. A foregleam of the West eating crow?

So there will be no 'adult' behavior of these rascals. Some Beatles lyrics:

You never give me your money
You only give me your funny paper
And in the middle of negotiations
You break down


Copied from Carli: http://tinyurl.com/5hajv8

"Sheldon Emry commented: Germany issued debt-free and interest-free money from 1935 and on, accounting for its startling rise from the depression to a world power in 5 years. Germany financed its entire government and war operation from 1935 to 1945 without gold and without debt, and it took the whole Capitalist and Communist world to destroy the German power over Europe and bring Europe back under the heel of the Bankers. Such history of money does not even appear in the textbooks of public (government) schools today."

Game, set, and match.

Buffalo Ken

RobG - thanks for the Beatles quote - here is another from "Penny Lane"

On the corner is a banker with a motorcar
The little children laugh at him behind his back
And the banker never wears a mack
In the pouring rain, very strange


P.S. - A "mack" is a raincoat. Dumb banker --- so disconnected from life that even the children can tell and they laugh.


I read the news today oh, boy
Four thousand holes in Blackburn,Lancashire
And though the holes were rather small
They had to count them all
Now they know how many holes it takes to fill the Albert Hall
I'd love to turn you on.....Beatles

Just like the media...they report on the
"holes" but leave out the donuts.


How about this one for Paulson and Bernake:

Words are flying out like
endless rain into a paper cup
They slither while they pass
They slip away across the universe
Pools of sorrow waves of joy
are drifting thorough my open mind
Possessing and caressing me

Jai guru deva om
Nothing's gonna change my world
Nothing's gonna change my world


"If we all walk away from debt, this means we will all be relegated to third world status."

Elaine, Is it fuzzy thinking to think that there is fast approaching a day where we will be unable to meet our obligations of debt maintenance in the future - this will effect the need for higher interest rates on the new issuance of Treasury notes to attract buyers to keep us from turning into cannibals.
This could take years to work out - a slow train wreck like the US auto industry.
Or.....we can just do it today with a moratorium on our old national debt and not prolong the embarrassing Kabuki-like melodrama of the demise of the US dollar and reduction in living standards to that of a Banana Republic?


Over at Daily Reckoning:

And now that the profound stupidity of serial bubbles has finally burst, here comes the ridiculous Stiglitz, writing an essay in The Financial Times titled "Fannie's and Freddie's free lunch".

But, to be fair, this is standard Stiglitz thinking, as he is such a weird Leftist loony tunes kind of guy, but Columbia University has this guy on its faculty? Hahaha!

And now Columbia will soon have Fredric Mishkin, too, a thoroughly repugnant Fed governor who actually endorses an asinine policy of pursuing an "inflation target" (which is the most despicable and outrageous damned thing anybody could say, and for which he should be shunned as the intellectual leper and laughable fool that he is), of about 2% a year! Purposely creating inflation! Wow! This is truly insane!

The question is, "Why is Columbia staffing itself with people like this? And what is the real value of a degree from Columbia, given their faculty?"

Bear of Little Brain

"If we all walk away from debt, this means we will all be relegated to third world status."

I was intrigued by that statement, too.

I'd say that it depends on just who is owed the debt. Does a loan from a fractional reserve system using money created out of thin air and specifically designed to enslave a nation have any moral right to repayment?

How about:
"If we were all to walk away from enslaving debt, we may avoid being relegated to third world status."

The phoenix only ever rises from the ashes.

Just musing.

Paul S

I found this YouTube video amusing and at the same time pathetic. If you have not seen it, it may be worth a couple of minutes of your time to watch Dana Perino, the current press secretary for "Dubaya": http://www.youtube.com/watch?v=_MugHx9wEao .
More forthrightness from the Bush White House, it's been their hallmark.

Elaine Meinel Supkis

NO empire EVER walks away from debt obligations to foreign powers without losing ALL international and even domestic powers! EVER. This is iron clad.

When England went belly up after WWII, they were allowed to limp along due to the US needing them happy for propaganda purposes. Ditto, Germany, France and Japan. These huge empires were all bankrupt or destroyed but were rebuilt because this is how we won the Cold War.

No Cold War, these empires would have been in rags for many, many decades. I assure everyone, neither China nor Russia have any political reason to rebuilt the US after we destroy ourselves.


Hey I thought Arnold was protecting against the Terminator. Seems he's doing the terminating now:

Governor orders layoffs, steep pay cuts for thousands of state workers

Gov. Arnold Schwarzenegger, one month into a state budget impasse, today ordered the layoffs of thousands of state workers and steep pay cuts for most other state employees in an effort to save cash as California faces a multibillion-dollar budget deficit.

Bear of Little Brain

"NO empire EVER walks away…"

Walking away implies that there is a choice. Bankrupt states will not have that luxury.

On a lighter (!) note, I see Mr. Willie has issued his latest merry missive:


Note to self: chase up that overdue silver Maple order!

Bear of Little Brain

Oh, oh. Greenspan speaks on nationalisation, recession and inflation today


"After the former Fed chairman spoke, Washington-based Fannie Mae dropped 69 cents, or 5.7 percent, to $11.52 at 3:48 in New York Stock Exchange composite trading. Freddie Mac fell 55 cents, or 6.3 percent, to $8.18."

``It important that we focus on stabilizing the financial system,'' Greenspan said. Policy makers also need to reconcile slowing economic growth with rising prices, he said.

The U.S. faces ``a very substantial change in the balance between growth and inflation,'' Greenspan said.

The Oracle has spoken. Well, he sure stabilised Freddie and Fannie!

Elaine Meinel Supkis


Market Watcher

Hi, Elaine, all.

The story of Merril Lynch's markdown of what one day were $11.1 Billion of assets to $6.7 Billion followed by sale of these assets has more to it. The purchaser of the $6.7 Billion of assets is a purpose made corporation with no assets except the ex-Merril paper while the purchase of the ex-Merril paper was done with 25% outside money and 75% Merril money. Merril loaned this new company about $5,025,000,000 so it could buy these assets. In essence Merril is still on the hook for more than $5 Billion (while putting the loan in the books as an asset), and the assets must actually be worth something like $1.675 Billion. $1.675 Billion divided by $11.1 Billion (last week's asset "value") is 0.15, or 15%.

If we take this as typical then obviously there is a very great deal of bad paper out there. Also, obviousy, without the trillion dollars "loaned" to the banks by the Fed and Treasury, the banks would not be able to pay their creditors, and so be bankrupt, and would have to be closed.

It is no wonder that the banks won't lend to each other.

Elaine Meinel Supkis

Correct, Market Watcher. And the ABX market is rapidly approaching $0 in value! The BBB tranches are already there. The AA ones are closing in on $8 from a former $100 value and the AAA are well past the $40 and have lost more than half of their value. Since the punishing costs are multiplied, these falls are very fatal. It isn't just principal vanishing, it is ALL FUTURE INTEREST ADVANTAGES.

This is more valuable than any principal! This is why the collapse is gaining in pain even if it isn't 'bigger'. The value losses are snowballing.

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