Your home for discussing politics, the restored gospel of Jesus Christ, and the principles of liberty.
Original_Intent wrote:Not wanting to start another Ron Paul discussion either, but he does not support a gold standard, he supports a sound money standard backed by WHATEVER people wnat to back it with. This is very much IN LINE with the Secret of Oz. He says let currencies compete and let the market decide - gold backed, silver backed, oil backed, wheat backed - whatever! He just wants it backed by something and end fiat money creation at interest to the private Fed!
The plan seems to center around a 50% haircut on Greek debt, combined with a $200 billion Euro recapitalization of European banks for starters. The scheme is supposed to seek private capital, but the implication is that the Eurozone could end up owning 40% of the sector. I see no mention of actually closing down some banks, or exactly how stockholders and senior bondholders fare in all this. How is the Government stake handled in the pecking order? Do they severely dilute the others or is this some kind of joke. The plan maybe has the hint of some good elements to it, but shrinkage of the banking sector and debt haircuts eaten by banks is the key. If the governments of the Eurozone absorbs much of the loss, then we simply see more core country downgrades (see Is Germany the Savior of Europe?)
Elsewhere on the front of Gumnut interventionism, the China sovereign wealth fund is supposedly buying shares in their sick banks. There are increasing signs that the Chinese are in active Treasury dump mode. FT reports further: “Central Huijin, the domestic arm of China’s sovereign wealth fund, will buy the shares to help stabilise the pillars of the country’s financial system, the official Xinhua news agency said on Monday. Wash, rinse, repeat. The Chinese like the Fed, and the Eurozone like to talk a big story.
FCB activity is in actual liquidation mode, which I would attribute to China and possibly Russia. Lee Adler discusses. There has been a back up in rates from extremely low levels but hardly enough to disrupt the massive US Treasury financing operation. As you can see the 13 week moving average shows no net buying at all, and that is unprecedented. October 17th marks a heavy settlement date of Treasury finance. How the Gumnut keeps financing at these rates is beyond me. Tycoon Asher Edelman who supports OWS explains the whole scam.
Right now, I’m very much focused on a phrase I call "The Wizard of Oz." The Wizard of Oz is the Federal Reserve, the governments, the U.S. Treasury, and the "Troika." You need to understand these organizations to invest today. You need to hire old apparatchiks from the old Soviet Union, because the basis of the 2009-2011 bull market is massive government intervention.
For instance, the spending of the U.S. Treasury, the U.S. government, right now is 25% of GDP. The norm is 18%. So that means 7% of GDP can be attributed to the government propping up this economy. You have huge transfer payments used for paying off banksters and keeping the system going. A lot of the transfers go to the wealthy "kleptocrats." That’s one of the reasons we had a 400% increase in the price of Tiffany’s, while Wal-Mart is on it’s butt. Is it any mystery that protests against Wall Street and kleptocrats are on the rise?
So that’s the effect. You really have to be an old apparatchik Russian guy; those guys would do really well in an environment like this.
Elliott: One of the things I’m trying to figure out is the Dollar. It ran in a channel between 73 and 76 for the last six months, and then in the last three weeks it broke out in a big way, and now it’s trading in the 78 to 79 range.
Russ: A lot of that is probably technical. Many of these carry trades that have gone on around the world are all in dollars, you remember the cost of borrowing in dollars is nothing, if you do it right. So if you’re a speculator you’re borrowing dollars and jumping into emerging markets, or gold or commodities, or whatever, and then once those trades come undone, it’s a technical factor that causes the dollar to rally.
Elliott: Do you see the Dollar breaking back down to the 73-76 range or below?
Russ: I don’t know. The Dollar could go up, if this carry trade continues to unwind. I have a feeling right now that, for people out there in trouble, they keep running these rumors, to try to help them out.
Ilene: Do you mean the Banksters are running rumors to drive the Dollar down and the stock market up?
Russ: Yes, the people who run the trades, finance the trades, benefit from the fees and commissions, who skim the fractions off the trade, the pump and dumpsters, it all ties together. If you invest or speculate, you better understand the big picture.
There’s also a lot of shorts in the market. People are classically over-trading the market. People have to, there’s no return on their money, so they’re in there playing something. You gotta play something, you gotta be short something, or you gotta be long something, or you gotta be doing a carry trade. That’s because the banking sector is too large. It dominates our economy. The real economy has shrunken while these monkeys play these games.
The most bullish thing that could happen is for this system to come to a final end. Until that happens, I would not be a long term investor.
I could go on and on about moral hazard and the apparatchik Soviet Union Russian type behavior it engenders. Ultimately it comes back to shrinking the banking sector, making them take the hit, starting to forgive the debt – restructuring the debt, and resetting the plate for the whole economy. That means wiping out banksters, taking their equity, closing down their banks, taking their bondholders and wiping them out. That absorbs a lot of the debt out there and properly places it. To take that debt and put it on the back of Germany and France now is insane.
Now, the other aspect that’s going on is that China has been a huge story. China is a disaster waiting to happen. I noted that on September 12 there was a story out of Shanghai where seven of these large operators, businesses, manufacturers just shut down the same day, leaving huge amounts of debt unpaid. Most of these guys fled the country. Now there are more and more of these stories involving hundreds if not thousands of firms. They haven’t paid their workers. It’s a slash and burn economy. There’s totally inefficient development, waste, building unoccupied cities – vanity projects. Yet when you step back and look at China, 35% of their sewage is untreated. So they do everything out of order, everything is "big splash," something that could collect a fee or loot and steal, and put it in the ratlines rather than really solving the problem. I think that’s very much what’s happening in China.
Elliott: Well, we’ve heard a lot about the possibility of "debt contagion" in Europe, if Greece were to default. I think what they’re really afraid of is the idea of a debt forgiveness contagion spreading.
Russ: Well, that’s what’s required.
Elliott: Because once one guy gets forgiven over a giant debt, the next guy standing next to him goes "hey, wait, how come he got his debt forgiven, and I still have to carry this giant burden? Screw that! I want to get forgiven too!"
Russ: Right, well, these countries are trapped, they’re in debt traps, and who loaned them the money? Typically this debt is held by the banking system.
But an indebted country has a moral obligation to default on that loan if paying it would mean starving its people. Extreme austerity is a trap. Defaulting is not that big of a deal. They did it in the 1980′s with the Brady bonds. They did it in Brazil, in Argentina. Those countries got re-established, and here we are 20 years later. It’s not the end of the world. Banks have been going out of business for centuries. Look at the United States, the British were constantly loaning money for railroad construction, canal construction, there were booms and busts. They lost money. And they’d come back two years later and do it all over again. So the idea that because some big banks go under its the end of the world is bullshit. It’s not how banking and economic history has worked.
Weekly Jobless Claims rose from 401,000 in the prior week to 404,000. Of course that 401k was revised higher, and the mainstream then compares apples to oranges only if it puts a positive spin on the headline so they can say the number didn’t rise, it was flat. Whatever, numbers above 350k are job losing propositions, the real economy has been, and continues, to shed jobs.
In fact what’s happening to continuing claims is that people have been unemployed for so long, historically long(!), that they are dropping off the backend of their benefits. And without Congressional action soon, the Emergency Unemployment benefits are set to expire, that will cause more than 4 million people to fall off the roles in the next year. Obama put an extension of those benefits onto his “Jobs Bill” as if unemployment benefits were about jobs. Did you know that his “Jobs Bill” also included a 5.6% tax on income in excess of $1 million? Needless to say, it went nowhere and was voted down yesterday, this morning Obama is talking about splitting the bill in two in order to attempt to pass part.
That “Jobs” bill is nothing but impossible math on top of impossible math – as has been all efforts to date attempting to cure the impossible math. You can’t cure debt saturation with more debt. And because you’re trapped inside of the central banker box where everything benefits them, you can’t raise taxes or you cut off your hand to spite your face. Impossible math just is – you can work to make it possible within the central banker paradigm, but that leads to deflation and thus it is impossible to fix anything as long as you remain inside their box.
A New Boogeyman for America
Last month, now-retired Chairman of the Joint Chiefs of Staff Admiral Mike Mullen testified to a U.S. Senate panel that Pakistan’s Inter-services Intelligence Agency backed the terrorist group Haqqani in its attack on the U.S. embassy in Kabul, Afghanistan. Never heard of Haqqani? Don’t worry, you probably never heard of Al-Qaeda prior to 9/11 either. According to Mullen, “the Haqqani network…acts as a veritable arm of Pakistan’s Inter-Services Intelligence Agency.” The Haqqani network was founded and is lead by the newly dubbed public enemy No. 1; Jalaluddin Haqqani.
America, meet your new boogeyman.
Oct. 13 (Bloomberg) -- Tokyo's Setagaya district officials said an investigation today of a “high” radiation reading in the area indicates it may not have come from the crippled Fukushima reactors.
The reading was more than 30 microsieverts per hour, NHK reported, which equates to a dose of 157.7 millisieverts per year, or more than 150 times the internationally recommended safety level for the general public, according to a Science Ministry formula.
The discovery follows a flurry of reports this week on a rise in radiation readings in Tokyo and Yokohama, indicating fallout from the Fukushima nuclear disaster has formed “hot spots” in the cities.
Setagaya adjoins Ota ward where radiation levels exceeding the ward's own safety standard of 0.25 microsieverts per hour were detected at 13 schools, the Ota ward board of education said today. The tests are continuing at the schools.
This past week the NYTs article, "Hiring Locally for Farm Work Is No Cure-All" described how a Colorado onion and sweet corn farmer couldn't find enough local help to work in his fields. There are well over 400 reader comments under the article. The NYTs followed up the story with a Room for Debate titled, "What happened to the American work ethic?" It, too, was excellent, so I recommend reading both if you haven't.
Few people are willing to do the hard physical labor required to farm under often harsh weather conditions while living in social isolation without many city amenities. This is not just an American problem, as migrant labor issues are present in Europe, the UK, Canada, Australia and elsewhere. In the developing world, young rural countryside residents in large numbers are migrating to cities in China, India, Africa, and other nations to escape farm labor.
Today, farming is all about efficiency. Huge farms. Huge hot houses. Big agribusiness. Copious amounts of chemicals. Huge grocery chains. Cheap labor. Robotics. Huge central distribution centers. Cheap transportation. Cheap food. Spoiled consumers. We are in a global competition to produce goods cheaply, including food. Labor costs get squeezed and might even go underground.
According to the Migrant Workers Journey exhibit, there are almost 4,900,000 migrants in Italy, with 700,000 irregulars. These workers move for miles from East to West and from South to North harvesting melons, tomatoes, grapes, olives and oranges. In Basilicata, there are about 3,000 migrants willing to work 12 hours per day for only 25 euros, living in abandoned rural houses without electricity or running water.
Italy's migrant farm worker problems are quite well-know, and so are Spain's.
Eventually, this migrant farm worker situation has huge ramifications for entire nations. What I couldn't help but note from the above NYTs article was this sentence in the second paragraph, "In the last two decades, Spain, Italy, Portugal and Greece have run at least 15 legalization programs, including a Spanish effort three years ago that was among the Continent’s largest." That would be the PIGS (Portugal, Italy, Greece, and Spain).... the same European nations which were threatening the entire region's stability due to their fiscal insolvency.
This led me to look at the states within the U.S.
The largest migrant worker population state? California. The state with the worst balance sheet? California. Remember that California's GDP would equal the world's eighth largest economy and it is the world's fifth largest supplier of food and agriculture commodities.
Let's look at the top seven states which a 2009 Pew Center study named the most fiscally troubled: California, Arizona, Florida, Illinois, Michigan, Nevada, and New Jersey. Next, I've compared this list to the 2000 U.S. Census Bureau statistics list of the seven states which have the highest Hispanic populations: California, Texas, New York, Florida, Illinois, Arizona, and New Jersey. The strong overlap between the two lists is five out of seven states: California, Arizona, Florida, Illinois, and New Jersey.
Note that immigrant farm laborers are used primary in the temperate climate regions since those are the most productive year round vegetable and fruit producing areas and we all purchase these products, so it doesn't matter where we live, if we want lettuce or tomatoes in January, then we all benefit and we all share in the real true costs.
I do not wish to make any political or prejudicial statements here, I am only noting observations. The current immigrant farm worker model used by our world's developed nations has far reaching ramifications beyond the performance of the actual labor, and I'm not the first to say that. The related social, ethical, political, and humanitarian issues have been described many times by others and goes beyond today's writing. It is a complex subject, and since the developed nations use an economic growth model requiring growing, youthful demographic populations, integrating the farm workers provides that desirable demographic shift providing an ever larger consumer base. When I reviewed three articles on this subject over at VOXEU, economists who wrote articles about Spain and Western Europe viewed the subject favorably.
Just as immigrant labor has been moving into dairy here in the U.S. this past decade, it will very likely advance into the Midwestern corn and soybean growing regions in the not too distant future, too, dictated by demographics. So far, this region has chosen to pay for more advanced and larger equipment over the hiring of labor with hints that robotics may be on the horizon.
Since fruit, vegetable, and all food harvests are seasonal, much of the labor required is temporary, and global markets for these products mean that global wage competition to bring these products to the market races to the bottom, or, perhaps the production itself relocates to regions with cheap labor just as asparagus production has been leaving the U.S. and moving to Peru, Chile, and Mexico in recent years. As long as there are regions of the world wishing to provide the cheap labor required to harvest these crops, agricultural managers willing to hire them, and politics that encourage it, this reality in our agricultural system is here to stay.
Hurricane Jova has dissipated, but its remnants continues to dump heavy rains over Mexico's coastal mountains near Puerto Vallarta. Jova made landfall on Mexico's Pacific coast at 10 pm PDT Tuesday night as a Category 2 storm with 100 mph winds, and was the strongest hurricane to hit Mexico's Pacific coast since Hurricane Jimena hit Baja as a Category 2 storm with 105 mph winds in 2009. Jova's torrential rains triggered flooding and mudslides that have killed five people so far in Mexico. Jova's highest rainfall amounts on Tuesday occurred in Coquimatlan, located in the state of Colima, about 30 miles northeast of Manzanillo. Coquimatlan recorded 374.4 mm (14.74") of rain on Tuesday, according to the Mexican weather service. This is not far below the all-time record hurricane rainfall for Colima state, which is 15.57", set in 1998 during Hurricane Javier.
Another significant rainfall threat is the remains Tropical Depression 12-E, which moved inland near the Mexico/Guatemala border yesterday afternoon. TD-12E is being blamed for the deaths of thirteen people in Guatemala, due to flooding, mudslides, and electrocutions from downed power lines. Tropical Depression Irwin, which is headed eastwards towards the same stretch of Mexican coast Jova affected, is expected to dissipate before reaching the coast. It is unlikely Irwin will bring significant rains to Mexico.
USGS Reports Record Number Of Strong Earthquakes In 2011
By analysing data from the US Geological Survey (USGS), IWO was able to determine that earthquake activity (6.0-9.9 magnitude) during the period 01 January to 12 October 2011 reached its highest level in 20 years. The 2011 data was compared with data for the corresponding period in each of the 19 previous years since 1992.
A total of 177 earthquakes in the range 6.0 to 10 magnitude on the Richter Scale have been recorded so far in 2011, compared to 149 for the same period in 2010 and 119 in 2009.
Newell, who the sources say was familiar with the tactic of "gun walking" from the previous failed Operation Wide Receiver in Tuscon where Newell had participated in it, probably provided the germ of the idea that "walked" weapons could be used to "boost the statistics" of weapons found at crime scenes in Mexico, in the words of an early whiistleblower in this case.
If this is true, it places Kevin O'Reilly, a State Department employee responsible to Hillary Clinton, as the critical potential witness in the early history of the Gunwalker Scandal. Sources also say that there is a "not unfounded" fear that O'Reilly, who was suddenly transferred to Iraq "to keep him from being interviewed by the committee" according to one, "will not survive the deployment."
ECB Tells Belgium Not To Backstop Dexia Interbank Deposits, Says Bailout Plan May Be Against The Euro Charter
If anyone is surprised that things in Europe will get massively surreal before this is all over, we suggest finding another thread. In the meantime, for the latest example of the utter chaos and "make it up as we go along" we go to the ECB which has just, in very polite terms, warned Belgium that its bailout-cum-nationalization plan may not be quite feasible. From Bloomberg: "The European Central Bank advised Belgium not to backstop Dexia SA’s interbank deposits and to avoid providing guarantees on debt maturing within three months because it risks interfering with the central bank’s monetary policy." Reading between the lines here, it means that the ECB is effectively telling national governments to not try and become their own central banks under the ECB's umbrella, which would likely result in not only in various sovereign downgrades (that is guaranteed) but in loss of conviction in the European Central Bank, something which the insolvent European continent and the insolvent hedge fund in its core, aka Jean-Claude Trichet Capital et Cie. which holdings hundreds of billions of Greek bonds at par, can certainly not avoid. It gets better: "The ECB also said the planned debt guarantees for Dexia may last as long as 20 years, which is inconsistent with European Union guidelines for national support measures to be temporary in nature, according to a statement published on the Frankfurt- based central bank’s website and dated Oct. 13. Belgium sought the ECB’s opinion on draft legislation that would grant state guarantees on Dexia loans." Oops: the ECB may have just scuttled the currently envisioned Dexia bailout plan. Oh well, just like with the Greek 50% bond haircut, so here to it is now back to the drawing board.
More from Bloomberg:
Guarantees on interbank deposits “could entail substantial distortion in the various national segments of the euro-area money market by potentially increasing short-term debt issuance activity across member states,” the ECB said in the statement.
“It could also affect the transmission of monetary policy decisions.”
For those who may have already forgotten last weekend's key event, now largley forgotten and priced in, "Dexia obtained a pledge from the governments of France, Belgium and Luxembourg last week to backstop as much as 90 billion euros ($125 billion) of interbank and bond funding with maturities of as much as 10 years until 2021. The French-Belgian municipal lender, which is being broken up after concern over its European sovereign debt holdings caused short-term funding to evaporate, sought state guarantees to finance long-term assets including 95 billion euros of bonds with an average maturity of almost 13 years at the end of June."
And the ECB just said that this whole plan may be against the Eurozon'e charter.
The most difficult challenge in writing about the Iranian Terror Plot unveiled yesterday is to take it seriously enough to analyze it. Iranian Muslims in the Quds Force sending marauding bands of Mexican drug cartel assassins onto sacred American soil to commit Terrorism — against Saudi Arabia and possibly Israel — is what Bill Kristol and John Bolton would feverishly dream up while dropping acid and madly cackling at the possibility that they could get someone to believe it. But since the U.S. Government rolled out its Most Serious Officials with Very Serious Faces to make these accusations, many people (therefore) do believe it; after all, U.S. government accusations = Truth. All Serious people know that. And in the ensuing reaction one finds virtually every dynamic typically shaping discussions of Terrorism and U.S. foreign policy.
Iran and Saudi Arabia Square Off
The two countries, at odds since the 1979 revolution in Iran and ever more so in the wake of the Arab Spring, are competing for dominance in global energy markets and nuclear technology and for political influence in the Persian Gulf and the Levant. Their conflict, with its sectarian overtones, has the potential to weaken pro-democracy forces in the Middle East and North Africa, empower Islamists, and drag the United States into military interventions. To avoid all this, the United States will need strategic imagination to devise ways to mitigate and manage the rivalry between Riyadh and Tehran.
Iran and Saudi Arabia are neither natural allies nor natural enemies but natural rivals who have long competed as major oil producers and self-proclaimed defenders of Shia and Sunni Islam, respectively. Until the Iranian revolution in 1979, their rivalry was managed and controlled by the United States, with whom they were both strategic allies. But after the Shah was overthrown, Saudi Arabia’s leadership became frightened by the Ayatollah Khomenei’s denunciation of the Saudi monarchy as antithetical to Islam and his ambition to export to the revolution to the Arab world. Saudi Arabia remained an ally of the United States; Iran became an implacable foe. Thereafter, the rivalry between Iran and Saudi Arabia became defined by the new U.S. strategy -- ally with Saudi Arabia to offset Iran.
As a result, Iran sees Saudi Arabia as a wealthy, ambitious proxy of the United States and Saudi Arabia views Iran as a major source of instability in the region, believing that it seeks to establish a so-called Shia Crescent to dominate Arab Sunnis. The rivalry has shaped both countries' policies as they have attempted to contain and combat each other’s influence. They have accused each other of blatant interference in their internal affairs, including indirect support for acts of terrorism against each other.
Although the United States and Iran both support the nascent Iraqi government, Saudi Arabia flatly opposes it for being too close to Iran. Indeed, Iran has supported extremist Shia forces in Iraq that have attacked the country’s Sunni community and U.S. soldiers. To weaken the government, Riyadh has declined to send an ambassador to Baghdad and has refused to forgive or reduce the huge loan it gave to Saddam Hussein to wage war against Iran in the 1980s, estimated to be almost $30 billion. And, according to WikiLeaks documents, Iraqi Prime Minister Nouri al-Maliki has accused Saudi Arabia of “fomenting sectarian conflict” and “funding a Sunni army.” The competition between Iran and Saudi Arabia over Iraq is only likely to escalate after U.S. troops withdraw later this year, threatening to further destabilize an already shaky political situation.
Oct. 12 (Bloomberg) -- Public schools in California, which already spend less per student than those in 28 states, are bracing for a $1.7 billion cut that may wipe out high-school sports and student busing, and trim the academic calendar by seven days next year.
Automatic cuts built into this year's budget, intended to protect bondholders if revenue falls short of projections, are drawing new attention after California fell $705 million behind estimates in the first quarter.
A shortfall of $1 billion will slash hundreds of millions of dollars from universities and care of the elderly and disabled. A deficit of $2 billion will trigger reductions to public schools, creating "a fiscal emergency" that could leave some districts insolvent, a group of superintendents told Governor Jerry Brown in a Sept. 15 letter.
California earmarked $64.1 billion for kindergarten through 12th grade in the current budget. The cuts would remove $1.5 billion, the equivalent of seven school days, and a $248 million subsidy for bus service.
"Before the trigger cuts are put into effect -- and clearly that seems like where we're heading -- we need to come back to Sacramento to discuss everything," Olsen said in a telephone interview. "Our resources need to go to education and public safety the most."
Last year, Prof. Susan Reverby reported on the recent history of human experimention in the US and Guatemala. Prof. Reverby wrote that virologists “knew that secrecy, and even law-breaking was sometimes necessary to further research,” quoting the father of virology who later explained:
(I)t’s against the law to do many things, but the law winks when a reputable man wants to do a scientific experiment. For example, the criminal code of the City of New York holds that is a felony to inject a person with infectious material. Well, I tested out live yellow fever vaccine right on my ward in the Rockefeller Hospital. It was no secret, and I assure you that the people in the New York City Department of Health knew it was being done. Unless the law winks occasionally, you have no progress in medicine.
This week, Irish news reporter Katie Hannon reveals how pharmaceutical companies, universities and governments injured and killed hundreds of babies to test vaccines without consent; how they delivered the babies to universities and medical schools for dissection, and how government agencies continue to stonewall survivors and siblings who seek answers.
Fukushima Government to Push Fukushima Rice in Restaurants and Schools
Now that the rice from all districts and cities in Fukushima Prefecture are declared "safe" (i.e. below the provisional safety limit of 500 becquerels/kg of radioactive cesium), the Fukushima prefectural government is gearing up for the PR campaign it plans to mount to promote Fukushima rice in restaurants and school lunches and to consumers in the Tokyo metropolitan area.
Experts are warning that an eruption could be imminent at an even more powerful Icelandic volcano than the one that paralysed air traffic last year. Seismologists are nervously watching rumblings beneath Katla which could spew an ash cloud dwarfing the 2010 eruption that cost airlines two billion dollars (£1.27 billion) and drove home how vulnerable modern society is to the whims of nature. Brooding over rugged moss-covered hills on Iceland's southern edge, Katla is a much bigger beast than the nearby Eyjafjallajokul volcano, which blasted ash all over Europe for several weeks in an eruption that local scientist Pall Einarsson describes nonetheless as "small". Named after an evil troll, Katla has a larger magma chamber than Eyjafjallajokul's. Its last major eruption in 1918 continued more than a month, turning day into night, starving crops of sunlight and killing off some livestock. The eruption melted some of the ice-sheet covering Katla, flooding surrounding farmlands with a torrent of water that some accounts have said measured as wide as the Amazon. Now, clusters of small earthquakes are being detected around Katla, which means an eruption could be imminent, seismologists say. The earthquakes have been growing in strength, too.
Heavy rains in Thailand during September and October have led to extreme flooding that has killed 283 people and caused that nation's most expensive natural disaster in history. On Tuesday, Thailand's finance minister put the damage from the floods at $3.9 billion. This makes the floods of 2011 the most expensive disaster in Thai history, surpassing the $1.3 billion price tag of the November 27, 1993 flood, according to the Centre for Research on the Epidemiology of Disasters (CRED). Floodwaters have swamped fields and cities in 61 of Thailand's 77 provinces, affected 8.2 million people, and damaged approximately 10% of the nation's rice crop. Thailand is the world's largest exporter of rice, so the disaster may put further upward pressure on world food prices, which are already at the highest levels since the late 1970s. Some of the highest tides of the month occur this weekend in the capital of Bangkok, and the additional pressure that incoming salt water puts on the flood walls protecting the city is a major concern. A moderate monsoon flow continues over Southeast Asia, and the latest GFS model precipitation forecast foresees an additional 2 - 5 inches of rain over most of Thailand during the next three days.
Heavy rains due to an active monsoon and moisture from tropical cyclones
Rainfall in September peaked at 574.3mm (22.61") at Nong Kai in Northeastern Thailand, 501mm (19.72") at Uttardit in Northern Thailand, and 1446.7mm (56.96") in Eastern Thailand. For these regions, precipitation averaged 40 - 46% above normal in September. In the week ending Oct. 13, an additional 4 - 8" fell in Central and Thailand, where the capital of Bangkok lies. On Thursday, 38 mm (1.53") fell in Bangkok, and rainfall amounts of 1 - 3" fell over much of Central Thailand. Heavy monsoon rains are common in Thailand and Southeast Asia during La Niña events, and we currently have a weak La Niña event occurring. Ocean temperatures in the waters surrounding Thailand during September and October have been approximately 0.3°C above average, which has increased rainfall amounts by putting more water vapor into the air. The remains of Tropical Storm Haitang and Typhoon Nesat also brought heavy rains in late September. The flooding has also affected neighboring Cambodia, killing at least 183 people. Floods have also killed 18 in Vietnam and 30 in Laos this fall.
Hurricane Jova kills five in Mexico, but damage limited
Hurricane Jova killed five people in Mexico but damage was less than expected, amounting to less than $52 million, according to AIR-Worldwide. Jova hit the Pacific coast of Mexico Tuesday night as a Category 2 hurricane with 100 mph winds. Wunderblogger Mike Theiss rode out the storm on the coast, and has a a great post on his experience, which I excerpt here: "the winds suddenly picked up fiercely and started pounding the building I took shelter in. The surf ran way up on the beach and the waves were pounding the buildings and spraying up over everything at the pool. The wind was screaming and howling and the glass was flying. The Spanish tiles were getting ripped off the roof and all the glass light fixture were popping like balloons."
Saudi Arabia appeals to UN after Iran charged with plotting to kill ambassador
Many analysts remain skeptical about U.S. charges that Iran plotted to assassinate the Saudi ambassador in Washington, but in Riyadh officials are taking the accusations seriously and have already begun to employ them in a diplomatic assault against Tehran.
On Sunday, Riyadh’s permanent mission to the United Nations formally requested that the secretary-general notify the Security Council of the “heinous conspiracy” against it, Saudi-owned newspapers reported on Sunday. The move that could be used to impose fresh sanctions on Iran.
“Tension is already high and is going to skyrocket in the days and weeks to come,” Abdelkhaleq Abdalla, professor of political science at Emirates University in Dubai, told The Media Line. “How far will the Saudis go? Maybe as far as recalling their ambassador from Tehran. I think this is the limit.”
The United States launches a large-scale exercise over the Middle East deploying 41 giant transports of the 22nds Airlift Squadron Monday Oct. 17, the day before the Israeli soldier Gilad Shalit is scheduled to be released by Hamas. The US Transportation Command and its Air Forces Transportation will be testing its ability to provide a rapid strategic airlift response to major crises and contingencies.
Tuesday morning, when the Israel and Hamas prisoner exchange is due to be executed, the giant US transports will drill landings in Israel and Saudi Arabia. The aircraft will be packed with command and control elements and fighting units with full equipment.
DEBKAfile’s military sources report that during this critical week, the exercise ending Friday, Oct. 21 will keep an American air fleet in Middle East skies ready to land at any moment for any contingency. The Israeli, Egyptian and Saudi armies are on a high state of preparedness.
In parallel, The USS John C. Stennis aircraft carrier is on its way from the Persian Gulf to the Mediterranean. Last Tuesday Oct. 11, as the US officials accused the Iranian government of directing a plot to assassination the Saudi ambassador to Washington, the Stennis was nearing the Red Sea.
Aboard was the Chief of US Naval Operations Adm. Jonathan Greenert who was assigned to the operation in this arena shortly after taking up his appointment.
The missions of the Stennis Battle Group, consisting of an additional seven warships, most of them destroyers and frigates, as well as Air Wing CVW-9, are to provide ground troops with combat support and strike land and sea targets. It is also able to sow mines over large areas around coastal regions and on the high sea.
Israel’s Mossad gets dragged into latest British political scandal
Speculation that defense minister’s aide was “unwitting” agent of Israeli intelligence
British media have speculated that the man behind the fall of their minister of defense was in cahoots with Israel’s famed intelligence agency, Mossad, perhaps unwittingly, as the perfect spy.
Adam Werritty, an unofficial “chief of staff” to Defense Minister Liam Fox - a much respected, staunch conservative who quit in disgrace this weekend - boasted extraordinary access, had no security vetting and plotted to overthrow the Iranian regime.
Lowe's Cos. Inc. said on Monday it is closing 20 of its U.S. stores -- including two in Illinois -- eliminating nearly 2,000 jobs, and the home improvement retailer now plans to open far fewer locations in the future, citing the need to improve its profitability.
Lowe's, which operates about 1,700 stores in the United States, said Monday that it had closed 10 on Sunday and would close another 10 within a month. Its two Illinois stores, in Aurora and Oswego, were part of the Sunday closures
WASHINGTON -- The top Republican on the Senate Armed Services Committee is recommending that a special committee searching for ways to slash the deficit consider some of President Barack Obama's proposed changes to health and retirement benefits for the military.
In a letter to the bipartisan panel, Arizona Sen. John McCain signaled he was open to cost-saving steps in military benefits, a move certain to send shock waves through Congress and among powerful groups of retired officers and veterans resistant to change.
Ilargi: Bit of an unusual post today.
First, a series of short videos in which Stoneleigh aka Nicole Foss talks about finance and energy.
Then, a call from Ashvin Pandurangi to the TAE community to participate in an interactive project he's starting. Ashvin is looking for diamonds in the rough, things that can help us make it (better) through a financial collapse.
He then writes about the first such diamond himself: the banking system of North Dakota.
An experienced judge in Pennsylvania is charged with trying to exchange sexual favours for positive verdicts.
Ross Cioppa, 70, was released on $10,000 bail Thursday after being charged with two counts of bribery, two counts of indecent assault, and two counts of official oppression.
The judge is said to have made inappropriate sexual advances to two women whose civil housing cases he was hearing in his courtroom
JulesGP wrote:Great posts today Jason! That video on the chain of obedience.....![]()
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Terror backers should lose US citizenship: lawmakers
WASHINGTON — Americans who support or engage in acts of terror against the United States should have their citizenship revoked, said a group of lawmakers who on Thursday introduced legislation to that effect.
The bill submitted to both chambers of Congress by hawkish independent Senator Joe Lieberman, Republican Senator Scott Brown and Republican congressmen Charlie Dent and Jason Altmire come fresh on the heels of the killing of US-born radical cleric and Al-Qaeda militant Anwar al-Awlaqi in Yemen by a suspected CIA drone.
That killing was authorized by US authorities in a secret document, drawing fire from civil rights advocates who argued it permitted the execution of a US citizen without due legal process.
The so-called "Enemy Expatriation Act" is aimed at US nationals "engaging in or supporting hostilities against the United States."
Detroit struggles to keep lights on - Copper thieves, aging equipment darken blocks in cash-starved city
City officials estimate 15-20 percent of the 88,000 lights in the Motor City are not working, and they acknowledge that figure could be as high as 50 percent in some neighborhoods.
What the banks are doing is dumping bad assets not only into shell corporations but they are dumping them into the biggest shell dumping grounds of them all, Freddie and Fannie. The banks are making bad loans with money from nothing, then moving the garbage off their books to appear healthy themselves, while putting the taxpayer on the hook for their mistakes – but we already know that, don’t we?
What many are overlooking is that the banks, meanwhile, have stuffed their coffers full of “Excess Reserves,” to the tune of $1.6 Trillion!
In September, 2008, Hank Paulson, former Goldman Sachs CEO and then Treasurer turned chief criminal of the United States, wanted and then got the “Fed” to begin paying the banks for any “excess” reserves they hold! Where does the money to pay them come from? Why YOU, of course. And just look at “excess reserves” today.
Now let’s get a few things straight about this $1.6 trillion that is just sitting there with you paying the banks interest… The banks have never had any (to mention) real reserves – they have generated so much debt that they have saturated the planet. Because they were so successful at saturating the planet, they have destroyed their own lending model – there are now so few qualified borrows because of saturation that they have a difficult time just taking in deposits and then lending at a profit. Besides, why pay depositors their pittance .25% when they can make money from nothing to lend anyway and then offload their horror show onto Freddie and Fannie and now their other shell corporations?
Talk about broken, the money system and the rule-of-law in the United States are so far gone it’s not even funny. What’s more, just turn on the television and you will see “analysts” proclaim that there’s never been a better time to own bank stocks, “They’re cheap!” Only problem is that they are nothing but giant leverage and fraud baskets that the winds of change are about to sweep clean.
Of course I tell it like it is, if you want to hear the PC version, Meredith Whitney is smoother: [see video at link below]
Many people worry about that $1.6 trillion in “excess reserves.” They worry that it’s going to come flooding into the economy at some point and cause hyperinflation. Well, let’s examine what a bank really can do with all that money – they can’t lend it because they saturated everyone with debt already and the populace can’t service still more debt. Hmmm, that’s a problem. But what they could do is use it to buy up cheap assets and strip the poor saps of America of the rest of their belongings… hmmm. But if they did that then they may not be properly capitalized, so what’s a poor, poor bank to do?
If I had my way, I’d force out the leverage and bad debts during a special bankruptcy procedure, and I’d use a big portion of that money to buy back U.S. treasuries or Fannie, Freddie debts – of course that won’t even scratch the surface, but the purveyors of fraud should not be allowed off the hook that they created, and when the winds of change sweep them from power, they should not be allowed to abscond with their loot, certainly they should not be paid off – that is a part of restoring the natural rule-of-law.
Isn’t it great having a few private individuals control the production of your money? You know they pay you with a certificate of DEBT? And that the money you earn they make you pay them interest on it? LOL, are we gullible or what? Can I offer you gold as money? LOL, of course they control the majority of the gold too, and control is the key word as they use it to control you with it too (this is Ron Paul’s Achilles).
As far as the “markets” go, they are nothing but a rigged and manipulated casino arm of the private banks. Again I encourage people not to feed the animals, move your money into a local bank or credit union and stop playing in their casino.
Bank Of America Forces Depositors To Backstop Its $53 Trillion Derivative Book To Prevent A Few Clients From Departing The Bank
Bank of America, which today reported a big bottom line loss net of one-time beneficial items, did something quite tricky and extremely devious last month: it shifted anywhere up to the total of $53 trillion of the total derivatives it held as of June 30 (as Zero Hedge previously reported) on its books at Q2 from the Holding Company, which was downgraded last by Moody's from A2 to Baa1 (the third-lowest investment grade rating) to its retail bank, which was downgraded to the far more palatable A2 (from Aa3). The reason for the transfer? Bank customers who were uneasy with the fact that suddenly the collateral backstoping the operating entity handling their counterparty risk was downgraded to just above junk, demanded that said counterparty risk be mitigated by the bank's $1 trillon in deposits. In other words, as Bloomberg first reported when it broke this story, anywhere up to the full $53 trillion (we don't know for sure how much so we assume the worst case) is now fully and effectively backstopped explicitly by the bank's $1,041 trillion (as of September 30) deposits. Pardon's we meant the people's deposits: the same deposits which caused the bank's website to be inoperative for several days in a row after it was rumored that there was an electronic run on the bank. Why? Just so Bank of America can appears whatever remaining clients it has so they decide not to take their business to another derivative counterparty. And who is exposed to this latest idiocy? Why you. But that's not all: the FDIC, which is the entity backstopping the deposits in a worst-case scenario, is not happy with this move for obvious reasons. Yet even it is hopeless to override the Fed, which as Bloomberg reports, "has signaled that it favors moving the derivatives to give relief to the bank holding company." And so, once again, we see just how much more important the Federal Reserve are the interest of US taxpayers and savers over those of the banks that effectively run the Fed.
The Megabanks are trying to prevent bank runs in the United States (Video)
Megabanks around the world are reeling from their customers removing their capital and closing their accounts. People are standing up worldwide in a non-participational form of civil disobedience in order to do anything possible to bring down these corrupt megabanks.
There was an Italian bank run scare in at the beginning of August that really started the gears in motion for the possibilities of future bank runs.
Financial blogs predicted a run on the French banks during the economic turmoil in the EU and Eurozone countries.] Many corporations in France have moved their money out of French banks and into safer short term holdings for the time being.
Similar bank runs in August occurred in the United States, and the megabank Bank Of America had to employ the assistance of the St. Louis SWAT Team to prevent customers from closing their accounts and moving their money to smaller banks.
The chastisement of the American saver – Federal Reserve offers a higher interest rate to banking reserves than too big to fail banks offer American savers
Americans are facing a banking system that is largely designed to go against their best economic interest. Even a decade ago people were able to find a savings account or a certificate of deposit that would keep up with the rate of inflation. Today, most typical savings accounts at too big to fail banks offer essentially a zero percent interest rate. Mattress savings. And the true rate of inflation on items like food, education, and fuel is far outpacing in household gains. This is the dilemma. If you put your money into the banking system you will surely lose because of the erosion of money thanks to our central banking policies. The Federal Reserve has purposely created a negative interest environment to get people to spend again and restart the economy. The unfortunate point is that banks have plenty of excess reserves thanks to trillions of dollars in bailouts yet fail to lend it out largely because the public is seeing household incomes shrink. The last decade growth was largely debt based. The banking system essentially is punishing the American saver with whatever little amount they try to sock away.
The Fraud At The Heart Of Student Lending Exposed - The One Sentence Everyone Should Read
A key reason why a preponderance of the population is fascinated with the student loan market is that as USA Today reported in a landmark piece last year, it is now bigger than ever the credit card market. And as the monthly consumer debt update from the Fed reminds us, the primary source of funding is none other than the US government. To many, this market has become the biggest credit bubble in America. Why do we make a big deal out of this? Because as Bloomberg reported last night, we now have prima facie evidence that the student loan market is not only an epic bubble, but it is also the next subprime! To wit: "Vince Sampson, president, Education Finance Council, said during a panel at the IMN ABS East Conference in Miami Monday that lenders are no longer pushing loans to people who can’t afford them." Re-read the last sentence as many times as necessary for it to sink in.
Clinton pledges more aid in surprise Libya visit
The secretary of state used unusually blunt terms to describe what the United States wants to see happen in Libya. Clinton told students and others in Tripoli that the U.S. wants to see former dictator Muammar Qaddafi killed or captured.
Clinton says the U.S. will keep supporting Libya as it forms a new government. She announced about $11 million in new U.S. aid during Tuesday's visit.
Reporting from Tripoli, CBS News correspondent Allen Pizzey said Secretary Clinton arrived in Tripoli amid heavy security, and security is one of the focuses of her trip here - specifically about 10,000 shoulder-fired surface-to-air missiles that are missing from Muammar Qaddafi's arsenal. Part of the $135 million in aid that the U.S. has pledged to Libya's new leadership will go to search for and dismantle those weapons.
The State Department already has sent 14 weapons experts to Libya and is looking for other countries to contribute to the effort. The new U.S. contribution of some $10 million means Washington will have spent $40 million on the effort alone since the former rebels began making major military progress, according to the officials.
CIA officer holds mystery assignment at NYPD
(AP) WASHINGTON - Three months ago, one of the CIA's most experienced clandestine operatives started work inside the New York Police Department. His title is special assistant to the deputy commissioner of intelligence. On that much, everyone agrees.
Exactly what he's doing there, however, is much less clear.
Since The Associated Press revealed the assignment in August, federal and city officials have offered differing explanations for why this CIA officer — a seasoned operative who handled foreign agents and ran complex operations in Jordan and Pakistan — was assigned to a municipal police department. The CIA is prohibited from spying domestically, and its unusual partnership with the NYPD has troubled top lawmakers and prompted an internal investigation.
His role is important because the last time a CIA officer worked so closely with the NYPD, beginning in the months after the 9/11 attacks, he became the architect of aggressive police programs that monitored Muslim neighborhoods. With the earlier help from this CIA official, the police put entire communities under the microscope based on ethnicity rather allegations of wrongdoing, according to the AP investigation.
It was an extraordinary collaboration that at times troubled some senior CIA officials and may have stretched the bounds of how the CIA is legally allowed to operate in the United States.
Darpa Wants to Master the Science of Propaganda
Mark Twain once tried to distinguish between the storyteller’s art and tales that a machine could generate. He observed that stringing “incongruities and absurdities together in a wandering and sometimes purposeless way, and seem innocently unaware that they are absurdities,” was the province of the American storyteller. A machine might imitate simple formulas behind yarns, but never quite master them.
The Pentagon’s freewheeling research arm is hoping to prove Twain wrong. Darpa is asking scientists to “take narratives and make them quantitatively analyzable in a rigorous, transparent and repeatable fashion.” The idea is to detect terrorists who have been indoctrinated by propaganda. Then, the Pentagon can respond with some messages of its own.
The program is called “Narrative Networks.” By understanding how stories have shaped your mind, the Pentagon hopes to sniff out who has fallen prey to dangerous ideas, a neuroscience researcher involved in the project tells Danger Room. With this knowledge, the military can also target groups vulnerable to terrorists’ recruiting tactics with its own counter-messaging.
Recently SANE Vax announced that Dr. Sin Hang Lee, a pathologist at the Milford Hospital pathology laboratory, well-known for using cutting-edge DNA sequencing for molecular diagnoses, was contracted to examine a single sample of Gardasil for possible contamination. According to the Sane Vax team this sample tested POSITIVE for recombinant HPV-11 and HPV-18 residues, both of which were firmly attached to the aluminium adjuvant.
According to the SANE Vax team, Gardasil vials with different lot numbers from New Zealand, Australia, Spain, Poland, France and three states in the U.S.A were also sent to Dr. Lee who found these also to be contaminated.
On 2nd September 2011 SANE Vax wrote a letter to Dr Margaret Hamburg the Commissioner for the FDA informing her of this very disturbing find.
Since then SANE Vax Inc. has received several replies to what they describe to be ‘a worldwide coordinated response’ and as a result put out a press release to inform the public. I have decided to relay their press release to you in full as I feel that it is so important:
The Battle Over Genetically Modified Food Continues – FDA Petitioned To Require GM Labels
Current FDA regulations don’t require food companies in the United States to tell consumers when their products contain transgenic crops. Yet the large amount of GM corn and soy grown in the US mean that a high percentage (estimated at upwards of 60%) of processed foods contain GM products, or meat fed with GM grains.
As we’ve discussed before, the US is the largest producer and consumer of genetically engineered foods. Many of these crops are developed so that they are resistant to herbicides, so that farmers can spray copious amounts of weed-killer on their fields and not kill the food. There are other GMOs that produce higher yields, or resist natural pests. There’s even a GM salmon that grows twice as fast as its natural cousin. Corn and soy are heavily dominated by GMOs, and the majority of those crops (in the US) go towards making livestock grain and high fructose corn syrup. Hence, a large portion of the processed food and meat eaten in the US is likely to contain or be affected by GMOs. But corn and soy are just the two largest of many varieties of GM produce the US grows including GM sugar beets, tomatoes, potatoes, papaya, and squash. We have 66.8 million hectares dedicated to growing GMOs, more than twice as much as the next largest source, Brazil. Labeling would impact a huge amount of the food you see in every grocery store (even the organic ones – GM crops are there too).
The reason why the US FDA has eschewed GMO labels is probably as simple as one word: Monsanto. One of the most prolific US developers of GMO intellectual property, Monsanto has over 5000 patents on its products. As we’ve discussed before, they are very aggressive at protecting their IP, going so far as to sue farmers who are accidentally contaminated by strains of their crops which are blown in from neighboring fields. It’s gotten to a point where non-Monsanto affiliated farmers are pre-emptively suing Monsanto just to gain some ground in the ongoing intellectual property lawsuits. In regards to labeling, Monsanto has maintained that their products have passed rigorous FDA safety requirements and that they are otherwise indistinguishable from natural strains of these foods. As true as that may be, decrying the need for labels seems like simply another calculated step by Monsanto and other GM developers to help grow the presence of GMOs in the agricultural industry. That the FDA has agreed with their position either shows that Big Agriculture has an undue influence on the agency, or that the science supports that conclusion. Either way, Monsanto and its cohorts have gotten their way so far and kept GMO labels off their goods.
Organic Farming vs. Conventional Farming: Results of a 30 Year Study
The Farming Systems Trial (FST)® at Rodale Institute is America’s longest running, side-by-side comparison of organic and chemical agriculture. Started in 1981 to study what happens during the transition from chemical to organic agriculture, the FST surprised a food community that still scoffed at organic practices. After an initial decline in yields during the first few years of transition, the organic system soon rebounded to match or surpass the conventional system. Over time, FST became a comparison between the long term potential of the two systems.
Heavy rains kill 84 in Central America
A week of torrential rains across Central America have triggered extreme floods and landslides that have killed 84 people, with 9 missing, according to media reports. El Salvador and Guatemala have seen the worst flooding, with 32 and 31 people killed, respectively. Another 13 have died in Honduras, and 8 in Nicaragua. The rains were due to a large area of low pressure that was moistened by the landfall of Tropical Depression 12-E near the Mexico/Guatemala border last week. Since the beginning of October, the region near the coast on the Guatemala/El Salvador border has received over 800 mm (31.50") of rain, according to Norman Avila of climaya.com, a Guatemalan weather web site.
Massive dust storm sweeps through the Texas Panhandle
It was a very bad afternoon rush hour yesterday in the Texas Panhandle. A powerful cold front pushed through the state during the afternoon, and damaging north winds behind the front whipped up a dangerous dust storm that cut visibility to near-zero during the afternoon rush hour. Lubbock recorded sustained winds of 48 mph, gusting to 63 mph, with a visibility of 0.2 miles in heavy dust at 5:36 pm CDT. The dust storm was reminiscent of the great dust storms of the 1930s dust bowl era, and was due to the ongoing exceptional drought. Unfortunately, the front brought no rain to the area, and Lubbock has received just 3.16" of rain so far in 2011--more than 13.50" below average. In his Climate Abyss blog, Texas's state climatologist, John Nielsen-Gammon, gives a 25% that the current drought will last five more years.
rlyman22 wrote:That link you warned us about in today's Blipits is the saddest thing I have ever seen and makes me agree that the judgments can't come soon enough.
Rand wrote:rlyman22 wrote:That link you warned us about in today's Blipits is the saddest thing I have ever seen and makes me agree that the judgments can't come soon enough.
Ditto's. When I was in China about a dozen years ago, we passed little children on the street begging, that were absolutely disfigured. Limbs broken, bent backward, etc Our guide insisted we not give them any money. When we persisted he insisted saying it will just make their "pimps" do more of it. He was visibly upset, that he had to explain further, but he said that the Pimps, steal these kids, disfigure them, and then set them out on the street like prostitutes, and they have to make a certain amount of money or he punishes them. But if they make anything, they will just be motivated to do more of it. Please don't give them any money. Based on that, I can believe this video. They, many there, just do not value human life as much as some others hopefully do.
Libyan Oil Fully Liberated On News Gaddafi Dead
Just out from Reuters:
LIBYA'S GADDAFI DIES OF WOUNDS SUFFERED IN CAPTURE NEAR SIRTE -- SENIOR NTC MILITARY OFFICIAL
All we can say is be careful who you shake hands with. Next up: burial at sea.
Areas next to Lake Michigan could see occasional wind gusts up to 55 or 60 miles per hour Thursday, but winds will drop away quickly farther inland, the National Weather Service said this morning.
Large “battering” waves measuring 20 to 25 feet will continue to hammer the lake shore before subsiding to 15 to 20 feet levels Thursday afternoon, according to the weather service.
rlyman22 wrote:That link you warned us about in today's Blipits is the saddest thing I have ever seen and makes me agree that the judgments can't come soon enough.
Zkulptor wrote:rlyman22 wrote:That link you warned us about in today's Blipits is the saddest thing I have ever seen and makes me agree that the judgments can't come soon enough.
Why would people not feel a bit of sorrow for the little girl? I can't fathom not running towards her right away....they look at her like she is roadkill.... I am very upset over this.... the more I learn about this world the harder it becomes for me to want to stay here... but I know.... we must endure... this is just too much though.... I still cannot fathom the attitude of these people.... I never will....
US Money Supply Surges Surges 33% in 4 Months – Global Money Supply to Lead to Gold $10,000/oz?
Gold prices are mixed today as markets remain on edge due to increasing divisions amongst European leaders on how to solve the intractable Eurozone debt crisis. There continues to be very strong demand for physical bullion globally and support is strong at the $1,600 level due to this demand.
The sharp fall of copper yesterday, by 6%, is an indication that the US, Chinese and indeed global economy is very fragile and may soon begin to contract.
Physical demand in Asia, mainly India and China, has entered the traditional peak season with Indian festivals and the increasingly important Chinese New Year.
This is reflected in premiums in Asia which remain good. There are reports of massive physical buying out of China on gold’s fall close to $1,600 yesterday. The most active Shanghai gold futures traded at a premium of more than $10 over spot prices earlier today. The contract stood at 335.22 yuan a gram, or $1,634 an ounce, at a premium of $3.
While all the focus has been on the Eurozone debt crisis recently, the US is suffering a stealth debt crisis of its own which is being ignored - for the moment. As is the burgeoning debt crisis in China.
The US fiscal position is appalling with a $1.6 trillion deficit projected for fiscal 2012 alone. For those who have lost count, the US national debt has risen to over $14.8 trillion. The latest updated projections reveal that the US will reach a 100 percent debt to GDP ratio by Halloween – in 10 days time.
Leeb recently said that gold could rise to $12,500/oz. He concluded this based on many of the factors documented by GoldCore in recent years such as gold in terms of financial assets, the monetary base and surging money supply globally.
As the ‘U.S. M2 Money Supply: Accelerating Sharply in 2011’ chart shows, US money supply (M2) has surged in a parabolic manner in the last few months and is up by more than 50% year to date and up 33% in just 4 months - from June 1st to October 1st.
As if:
A. They have $1.3 Trillion to wield.
B. $1.3 Trillion in DEBT can cure a DEBT problem.
C. $1.3 Trillion given to the purveyors of fraud will help anyone but the fraudsters.
And so we have this crazy world where the people who currently run the globe via fraud (hereto forth known as “the 1%,” or bribe givers), create debt money from nothing and demand hard work from the world’s citizens to pay it back, plus interest (aka “austerity”), and so you have violent riots on the streets of Greece occurring the same day that the fraud enabling government (aka bribe takers) pass the central banker demanded austerity measures.
Not that the world cares, because oh my gosh, we got Gaddafi and we’re proud that we “saved the world” from yet another evil doer by illegally targeting yet another head of state (karma will eventually repay that rule-of-law that isn’t being followed).
Are you distracted yet? Did you notice that the “Fed” stepped in to guarantee $75 Trillion worth (!!) of Bank of America’s wild derivatives? We make the Eurofools look good. Have you noticed that the impossible math right here in the good old U.S.A. is far worse than it is in Europe and it’s getting worse by the minute, or did we forget? Take a look at what’s NOT on the books if you want to see reality. No matter, the impossible math will keep coming back to remind us all, again, and again, until the purveyors of fraud are removed from power.
But for now the “markets” are higher on the fantasy, the dollar is lower of course, the Yen is breaking out to new and ridiculous highs, bonds are lower (but still at ridiculous manipulated levels), oil is higher of course despite securing the Libyan oil fields (oops, did I say that?), and food commodities roar higher in response to the thought of more trillions in debt money, thus choking the literal life out of the real, non-fantasy world.
To what extent this matters is about as transparent as a dust storm. Amidst all the contradictory dribble that comes forward from all the - too many- various parties involved in the Euro Kabuki, what has indeed become clear is that the minimum haircut on Greece is 50%, with 60% a lot more likely (or whatever agreement is reached will just be laughed away by those with skin in the game).
So even if Schäuble's inane bond insurance plan gains any traction, private investors will still need to swallow a 30%-40% loss, if not more. Which in turn invalidates the one agreement that does still stand, and is only three months old, which states that the Max Haircut would be 21%.
The arguably most amusing part of all this is that those private investors are to a large extent banks such as the ones Sarkozy is trying to save. Which also face increased tier 1 capital ratio requirements, to the tune of 9%, by EU regulators, and a whole lot faster than anyone predicted. The FT reports that this will only require €80 billion in extra capital, but other voices darkly whisper of €250 billion or more.
And while we're at it, everyone can agree, at least in private, that it will be impossible to raise that kind of money in the financial markets, so it will have to come from either separate countries or some troika member, EU, ECB or IMF. Now, if France bails out its own banks, it is sure to be downgraded. If it doesn't, and the ECB and/or the EFSF must be called upon, it's Germany that - a bit further down the line, perhaps, but still - stares the downgrade risk in the face.
Do any of you remember the good old days of say, oh, last year, when we were told ad nauseam that the bail outs were all meant to achieve one thing more than all, namely that banks would start lending again? Well, those days are over.
.....
Mostly hidden from view by emergency meetings and earnings reports, we live in the days of the incredibly shrinking banks. Tens if not hundreds of thousands of job losses in the banking sector have already been announced, and they'll just keep on coming with a vengeance.
If you can't meet capital ratio requirements by raising cash, you can always sell whatever you can sell, get a whole lot smaller and lower requirements that way. Only thing is, you're going to lend less, not more, money to the consumer and industry.
But there's a problem with that too, wouldn't you know it? That is, you need someone willing to buy what you want to sell. And it won't be the banks in the same predicament as you. At first, there'll be hedge funds willing to snap up penny on the dollar deals, but if everyone wants to, needs to, sell, you get a buyer's market, in which prices keep dropping so much it's not much use to sell at all.
Which is why, while Bloomberg reports that Morgan Stanley predicts that EU (including UK) banks will need to sell assets, reduce lending and overall reduce short-term funding as much as €2 trillion, other voices say they won't be able to achieve that much, because they can't sell enough assets. Ergo: they’ll need to reduce lending even more.
Along the exact same lines, Bank of America is shrinking, and right into oblivion down the line. How any regulatory body, be it the Fed or the FDIC, can possibly comply with BofA moving $53 trillion in derivatives to its consumer deposits book is beyond us. What is it? Despair over desperation? Thinking you can get away with anything? Still, whoever's made to pay (Hello, Occupy Wall Street, protest this! Occupy BofA. Occupy the FDIC.), the effect remains what it is: Incredible Shrinkage.
And that, dear reader, is how you spell deflation.
And debt deflation. And credit crunch. This cannot be prevented. It is written in stone. Not even Occupy Wall Street or Syntagma Square have the power to undo the inevitable. They can, however, have a loud and major voice in seeing to it that the pain is evenly distributed. It is not now.
French Regulator Urges Banks To Write Down Greek Debt To Realistic Levels
Slowly even those staunchest critics of reality, namely undercapitalized and insolvent French banks, are coming to grips with the truth that they are going to see massive losses on their tens of billions of French debt exposure. The FT reports that the French stock market regulator has told French banks to apply realistic assumptions to their Greek debt haircuts. Because through today, French banks only used the 21% agreed upon haircut at the July 21 (and even that number is likely greatly overstated). So where are Greek bonds trading now? Oh about 30 cents on the dollar (70% haircut) , which means at the end of the day French banks will see about three time more losses on Greek holdings than provisioned.
The problem, as is well known courtesy of daily fruitless discussions between Sarkozy and Merkel, is that "French banks have more cross-border exposure to Greece than any other country, mainly through subsidiaries owned by Crédit Agricole and Société Générale. BNP Paribas holds the most Greek sovereign bonds among private sector investors, with €4bn of exposure...French banks argued that limiting themselves to 21 per cent was justified because trading in Greek government debt was so subdued, making market prices unreliable." Uh, what? Those billions in Greek bond volumes, where the 1 year yields 184% in dozens of daily trades, are "subdued" and "unreliable?" Why not just buy the bonds then and take advantage of the illiquid arb then? What's that? Crickets? Oh ok. In the meantime, what is certain is that after the ECB, France is the country most exposed to a Greek admission of reality (even truncated, assuming a 60% haircut which is still generous). Which of course confirms, once again, our thesis that the only source of EURUSD stability in the past two weeks have been French banks liquidating assets, and using the feedback loop of rising asset prices from FX EUR repatriation to sell even more to a willing market.
The slow process of identifying regime assets has continued since the uprising began in spring. The British Government froze assets in the UK worth about £12billion as the rebels launched their attack on Gaddafi’s forces.
The US government froze about £20 billion, but began to release some assets to the Libyan National Transitional Council when it was recognised as the legitimate government last month. Switzerland, Austria and Canada also froze billions of pounds worth of assets.
The main vehicle for the money has been the Libyan Investment Authority, the £60 billion sovereign wealth fund the Gaddafi family is believed to have used as a private bank account. Since the start of the rebellion, the Treasury has set up a unit to trace the family’s UK assets.
Move your Mortgage to a Small Bank
...in the spirit of seeking solutions, we were inspired by a conversation with one of our friends in the Valley of South Texas along the Mexican border. "We did not have any conforming loans or borrowers," notes the banker, who ran a $4 billion portfolio for decades. "And we never sold loans to investors or sought government insurance. We kept the paper in portfolio till it prepaid."
Imagine the difference between this small bank's locally serviced portfolio and the credit-scored crap found inside the typical large bank loan book. The small bank's "keep what you kill" policy presents part of the solution. But the embedded losses still on the books of the largest banks - a half trillion or so in bad first and second lien real estate exposures - is a boil that needs to be lanced before the US economy is going to start growing credit and jobs.
This made us begin to think about the prospect of some sort of refinancing effort by the GSEs after the 2012 election. One of the problems we see with most of the refinancing proposals out there is that we are relying on the GSEs and the TBTF banks to carry out the process operationally. Never happen. One of the problems with bank consolidation is that the branches of the average TBTF banks are a credit underwriting, new business wasteland. The larger banks and GSEs use credit scoring to make loan decisions, while a community banker often knows the borrower and the collateral, not to mention the local real estate markets.
There is nobody to talk to at the branch of a Bank of America or other TBTF bank because branch officers cannot make credit decisions. Go into the branch of a smaller regional or community bank and there may actually be somebody on the floor who can underwrite credit and start an approval process whereby the bank will not only make the loan but keep it in portfolio. Indeed, like our friend in the Valley, many smaller banks never sell loans to Fannie Mae or Freddie Mac. Maybe instead of "move your money" we should all move our home finance business to a small community bank.
To us, the beginning of the end of the crisis in US real estate starts with the process of getting good loans refinanced. Second, we must get defaulted or doubtful, underwater loans into the hands of people who have the skills and the authority to manage a restructuring. Whether you talk about a refinance of a good loan or a troubled loans, selling these loans back to smaller banks in the geographic area where the collateral is located is a far better solution, in our view.
In response to A "Must See" Heart Wrenching Video of Moral Deterioration in China I received several emails saying I should have posted a warming about graphic content.
Yes, I could have done that.
I also received emails from several people who were upset at this video thinking it does not belong in an economic blog at all. They are mistaken.
The often repeated story regarding China is that the country will grow without end, it will overtake the US, and rule the world.
Instead, I propose the China story is really about rampant credit expansion, malinvestments, unproductive assets, no free capital markets, centralized planning that people mistake for capitalism, no legal system of merit, no freedom of speech, no respect for either property rights or human rights, and that peak-oil will in and of itself kill the story.
In short, all the people who think China is some sort of miracle savior for the world economy are going to find out otherwise.
The Southern Plains should prepare for continued drier and warmer than average weather, while the Pacific Northwest is likely to be colder and wetter than average from December through February, according to the annual Winter Outlook released October 20 by NOAA. We currently have weak La Niña conditions over the tropical Pacific ocean, which means that a large region of cooler than average waters exists along the Equator from the coast of South America to the Date Line. Cooler than average waters in this location tend to deflect the jet stream such that the Pacific Northwest experiences cooler and wetter winters than average, while the southern U.S. sees warmer and drier winter weather. NOAA's forecast calls for a typical La Niña winter over the U.S.--warm and dry over the Southern Plains, cool and wet over the Pacific Northwest, and wetter than average over the Ohio Valley. According to NOAA's latest La Niña discussion, La Niña is expected to remain solidly entrenched throughout the coming winter and into spring.
Winter and the sunspot cycle
Another major influence on the AO and winter circulation patterns might be the 11-year solar cycle. Recent satellite measurements of ultraviolet light changes due to the 11-year sunspot cycle show that these variations are larger than was previously thought, and may have major impacts on winter circulation patterns. A climate model study published this month in Nature Geosciences by Ineson et al. concluded that during the minimum of the 11-year sunspot cycle, the sharp drop in UV light can drive a strongly negative AO pattern: "low solar activity, as observed during recent years, drives cold winters in northern Europe and the United States, and mild winters over southern Europe and Canada, with little direct change in globally averaged temperature." The winters of 2009 - 2010 and 2010 - 2011 both fit this pattern, with strongly negative AO conditions occurring during solar minimum. The coming winter of 2011 - 2012 will have a much increased level of solar activity (Figure 2), so we may speculate that a strongly negative AO and a cold winter in northern Europe and the United States is less likely.
Jason wrote:Zkulptor wrote:rlyman22 wrote:That link you warned us about in today's Blipits is the saddest thing I have ever seen and makes me agree that the judgments can't come soon enough.
Why would people not feel a bit of sorrow for the little girl? I can't fathom not running towards her right away....they look at her like she is roadkill.... I am very upset over this.... the more I learn about this world the harder it becomes for me to want to stay here... but I know.... we must endure... this is just too much though.... I still cannot fathom the attitude of these people.... I never will....
I can't begin to fathom what Gethsemane must have been like....

Merrill Lynch moving derivatives to BofA FDIC insured bank unit
Utter garbage. How can we sit back and let a bank move a massive load of liabilities to a banking unit that has deposits and is backed by the U.S. taxpayers via the FDIC? No surprise the Federal Reserve didn’t see a problem because they would not be first in line to make that banking unit whole again if something went wrong and trigger the CDS and whatever, other exotic contracts Merrill Lynch may have. We are just increasing the risk on this massive institution.
For the record, there is no such thing as “real” money. All money is a human construct. It doesn’t matter what is behind the money or what the money itself is made of – that’s all bunk. The supposed self-correcting attributes of gold, for example, are complete bunk, very easy to disprove if one simply and objectively examines history.
The “Roaring Twenties” roared because of a flaming credit bubble – and the country was on a gold standard at the time. All gold standards have failed, as have all money systems to date, as will ours soon. In fact gold as money systems last for shorter durations than do non-gold systems if you look back in time – Talley sticks in England, for example, lasted more than 800 years, during which time gold standards came and went.
Of note is that the stock market bubble that crashed in 1929 was one built upon MARGIN, not just general credit growth. I note this because those who wish to eliminate fractional reserves entirely are barking up the wrong tree. It is easy to create leverage, that is to multiply effective money through many, many schemes. Today there are hundreds of them, they are growing unchecked - $600 Trillion just in known derivatives today in the United States alone. In fact, if you eliminate fractional reserves but do nothing to regulate other forms of leverage, then I will guarantee you that I can multiply the money in the system to infinity through other means that more closely resemble gambling.
Again, all money is a human construct; its purpose is to enact trade. The only way to make money a “store of value” is to keep the total quantity of ALL money(ness) under control. That’s it.
All money that is approved by your government is “fiat.” Again, it doesn’t matter what it is made of or what is behind it, since fiat means “by decree.” If your nation decrees that gold is to be used as money, then it is fiat. Gold is only not fiat when it is allowed to trade freely alongside of whatever else has been decried. Gold is the flip-side of the proverbial control-you coin (the other side is debt). Those who own the gold control those who do not – get over it, or own it – most do not.
The most important attribute about money is WHO controls its production. The natural rule-of-law is that its production benefit/not benefit everyone equally. Once you give a few private individuals the power to produce money, they will use that power to buy rules that favor them, and then the government and their money production become intertwined – as has obviously happened today.
The only solution to this is to restore the power of money production to the people. Since it cannot be private people, it MUST be done through your representatives as the Constitution correctly dictates (it does NOT dictate gold money, by the way, read it).
Once the money power correctly rests in your representative’s hands, then the problem becomes vote buying with that money creation power. This is where the Constitution falls short – they failed to get strong enough checks and balances in place to ensure that your representatives cannot cede this responsibility, THE MOST IMPORTANT RESPONSIBILITY THEY HAVE. Not only should they not cede this responsibility, but they MUST keep the quantity of money under control. This is why I say there is only ONE responsible target for the supply of money, that being ZERO percent price inflation (the quantity of money should change up/down to allow for changes in population, etc.). This can be accomplished as I spelled out in Freedom’s Vision.
The entire economy is now saturated with debt – not just the Federal Government, but state and local governments, corporations, and the people collectively too. Addressing any single problem in this regard will NOT cure the economy, it will take unsaturating all levels to reach a real cure – the exact opposite of what the current money producers are doing or attempting to do. Transitioning to an unsaturated condition DOES NOT have to involve “pain” for the people! The ones who rightly should take the pain are the ones who purveyed the fraud in the first place, again it is possible to make them eat the pain, and to restore a proper rule-of-law, money system, and economy without the “pain” they would like you to believe everyone must take! Solutions are found only when you get outside of the central banker box, and stop being a willing party to their lies.
It’s been awhile since I ran a lot of charts by you, here come a lot, but don’t be intimidated – they all revolve around the same subject, our money supply. Stand back and take a big picture look at the supply of money and you will see that a MONEY EXPLOSION is occurring right now!
Below I am displaying charts in order from the smallest measurement of money, Base, to the largest, MZM. The first series is the basic amount expressed in dollars - here you will see a progression - exponential growth that turns into a parabolic shaped curve. Note that the upwards trend did not stop, in fact is now taking off straight up within the smaller measurements and still parabolic on the larger ones:
[see link for charts]
Wow, I'm nauseous just looking at those wild moves! Those moves are dangerous, they are the exact opposite of stability. Remember, when the quantity of money is allowed to grow beyond that necessary to handle REAL expansion, then the value of the money falls. The worst situation is exactly what we're experiencing where the things you hold fall in value, and the things you need rise in value. This is true for the 99% who don't create the money, while the 1% (or less) who do, take from those who don't.
Here's a little fun with numbers, in the year 1980 (230 million people) there was approximately $4,347 of MZM per person in America. Today (310 million people) that number has grown to $35,516, more than eight times as much!! Are you eight times more wealthy? Didn't think so. Now look at debt. Debt has grown multiples of times more, especially if you count unfunded liabilities - that figure is now way beyond $300,000 per person, but just the National Debt has grown from the exact same (coincidence?) $4,347 per person in 1980, to $46,774 per person today - nearly 11 times as much! Wow, we're only talking 30 years here, not even half a lifetime - how's that "Fed" mandate of low inflation looking?
Now here's a chart that may startle you - here I told the "fed's" own chartmaker to divide the MZM by the Base Money to see the ratio of Base Money compared to the much larger MZM... and what do you think it shows? It shows a CRASHING ratio from the peak of 10 to 1 to today's 4 to 1. That means that today it takes way more base money to create a commensurate move in MZM.
Since our money is backed by debt, what this is really reflecting is the drop off of velocity caused by macroeconomic debt saturation - yet more proof of the impossible math and that debt saturation has occurred.
While I'm not a fan of GDP because I believe it is VASTLY overstated, I had some fun dividing first Base Money, and then MZM, into GDP. This tells us how much "productivity" we are getting per our money creation... are you ready?
Kaboom! Cliff Diving. That, my friends, is called ECONOMIC FAILURE. You are witnessing it in progress. Those charts are VERY telling, and very important to understand, they deserve to go viral.
The root cause of this failure is WHO it is that controls the production of our money. There are solutions, but none can or will be implemented while the same WHO is in charge. Only the people can change the power structure, there is change in progress one way or the other.
To view just how clueless the "Fed" is, below is their latest issue of monetary trends where you find tons of irrelevant charts (except for velocity which is in the gutter), and mundane commentary designed to lack insight - all designed to keep you in the dark.
Zkulptor wrote:Update: Little Chinese girl ( ran over twice while people negligently passed by).
http://www.telegraph.co.uk/news/worldne ... e-her.html
I guess they are taught not to help:
http://uk.news.yahoo.com/chinese-girl-d ... 48358.html
DrJones wrote:Interesting thought, O_I...
Jason -- thank you so much for sharing your outline for the FF dinner! wish I could be there, but I will review your outline. So far, I'm enjoying it! You have done a lot of research -- thanks for all the references!
Could someone video at least part of Jason's talk, so we get a feel for this good brother?
And thank you for the blipits! I know may read without posting replies much -- we just appreciate being kept up-to-date!
Sincerely,
Steven E Jones
Illargi wrote:Mostly hidden from view by emergency meetings and earnings reports, we live in the days of the incredibly shrinking banks. Tens if not hundreds of thousands of job losses in the banking sector have already been announced, and they'll just keep on coming with a vengeance.
If you can't meet capital ratio requirements by raising cash, you can always sell whatever you can sell, get a whole lot smaller and lower requirements that way. Only thing is, you're going to lend less, not more, money to the consumer and industry.
But there's a problem with that too, wouldn't you know it? That is, you need someone willing to buy what you want to sell. And it won't be the banks in the same predicament as you. At first, there'll be hedge funds willing to snap up penny on the dollar deals, but if everyone wants to, needs to, sell, you get a buyer's market, in which prices keep dropping so much it's not much use to sell at all.
Which is why, while Bloomberg reports that Morgan Stanley predicts that EU (including UK) banks will need to sell assets, reduce lending and overall reduce short-term funding as much as €2 trillion, other voices say they won't be able to achieve that much, because they can't sell enough assets. Ergo: they’ll need to reduce lending even more.
Along the exact same lines, Bank of America is shrinking, and right into oblivion down the line. How any regulatory body, be it the Fed or the FDIC, can possibly comply with BofA moving $53 trillion in derivatives to its consumer deposits book is beyond us. What is it? Despair over desperation? Thinking you can get away with anything? Still, whoever's made to pay (Hello, Occupy Wall Street, protest this! Occupy BofA. Occupy the FDIC.), the effect remains what it is: Incredible Shrinkage.
And that, dear reader, is how you spell deflation.
And debt deflation. And credit crunch. This cannot be prevented. It is written in stone. Not even Occupy Wall Street or Syntagma Square have the power to undo the inevitable. They can, however, have a loud and major voice in seeing to it that the pain is evenly distributed. It is not now.
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